NOTICE OF VIOLATION

Via Certified Mail# Via Certified Mail#

To: Mackey Tanner Pertoleum, Inc. Mackey Tanner Petroleum, Inc.

John Mackey, President John Mackey, R.A.

P.O. Box 5446 3491 East Rogers Rd.

Bloomington, IN 47407 Bloomington, IN 47401

Case No. 2001-10432-S

Based on an investigation by designated representatives of the Indiana Department of Environmental Management (IDEM) on March 6, 2001, the Fair Lease Well #1 owned by Mackey Tanner Petroleum, Inc., located in the center of Section 9, Township 5 North, Range 10 West, Oaktown, Knox County, Indiana ("Site") is in violation of the following environmental rules and statutes:

A. Pursuant to 327 IAC 2-6.1-7, any person who operates, controls or maintains any mode of transportation or facility from which a spill occurs shall, upon discovery of a reportable spill to the soil or surface waters of the state contain the spill, if possible, to prevent additional spilled material from entering the waters of the state; undertake or cause others to undertake activities needed to accomplish a spill response; and as soon as possible, but within two (2) hours of discovery, communicate a spill report to the Department of Environmental Management, Office of Environmental Response. During the above noted inspection, Mackey Tanner Petroleum, Inc., caused or allowed the discharge of crude oil from the Site and failed to adequately report, respond to, and contain the spill.

B. Pursuant to 327 IAC 2-1-6(a)(1), all waters at all times and at all places, including the mixing zone, shall meet the minimum conditions of being free from substances, materials, floating debris, oil, or scum attributable to municipal, industrial, agricultural, and other land use practices, or other discharges that will settle to form putrescent or otherwise objectionable deposits, that are in amounts sufficient to be unsightly or deleterious, that produce color, visible oil sheen, odor, or other conditions in such degree as to create a nuisance, which are in amounts sufficient to be acutely toxic to, or to otherwise severely injure or kill aquatic life, other animals, plants, or humans, and which are in concentrations or combinations that will cause or contribute to the growth of aquatic plants or algae to such a degree as to create a nuisance. During the above noted inspection, Mackey Tanner Petroleum, Inc., caused or allowed the discharge of crude oil from the Site to waters of the state.

C. Pursuant to 327 IAC 5-2-2, any discharge of pollutants into waters of the state as a point source discharge is prohibited, unless in conformity with a NPDES Permit obtained prior to the discharge. During the above noted inspection, Mackey Tanner Petroleum, Inc., caused or allowed the discharge of crude oil from the Site to waters of the state without a valid NPDES permit.

D. Pursuant to IC 13-18-4-5, it is unlawful for any person to throw, run, drain, or otherwise dispose into any of the streams or waters of this state, or to cause, permit, or suffer to be thrown, run, drained, allowed to seep, or otherwise disposed into any waters, any organic or inorganic matter that causes or contributes to a polluted condition of any waters, as determined by a rule of the board adopted under Sections 1 and 3 of this chapter. During the above noted inspection, Mackey Tanner Petroleum, Inc., caused or allowed the discharge of crude oil from the site to waters of the state.

E. Pursuant to IC 13-30-2-1(1), no person may discharge, emit, cause, allow, or threaten to discharge, emit, cause, or allow any contaminant or waste, including any noxious odor, either alone or in combination with contaminants from other sources, into the environment or into any publicly owned treatment works in any form which causes or would cause pollution which violates or which would violate rules, standards, or discharge or emission requirements adopted by the appropriate board under the environmental management laws. During the above noted inspection, Mackey Tanner Petroleum, Inc., caused or allowed the discharge of crude oil into the environment.

F. Pursuant to 326 IAC 4-1-2, the open burning of any material is prohibited unless exempted by rule 326 IAC 4-1-3 or an approval is obtained in accordance with 326 IAC 4-1-4. During the above noted inspection, Mackey Tanner Petroleum, Inc., caused or allowed the open burning of crude oil which had discharged to waters of the state.

In accordance with IC 13-30-3-3, the Commissioner is required to notify an alleged violator in writing that a violation may exist and offer an opportunity to enter into an Agreed Order providing for the actions required to correct the violations and for the payment of a civil penalty. The Commissioner is not required to extend this offer for more than sixty (60) days.

Entering into an Agreed Order will prevent the issuance of a Notice and Order of the Commissioner under IC 13-30-3-4, or the filing of a civil court action under IC 13-14-2-6. IDEM encourages settlement by Agreed Order, thereby saving time and resources. Timely settlement by Agreed Order may result in a reduced civil penalty. Settlement discussions will also allow the opportunity to present any mitigating factors that may be relevant to the violations.

In addition, as provided in IC 13-30-3-3, an alleged violator may enter into an Agreed Order without admitting that the violation occurred.

If settlement is not reached within sixty (60) days of receipt of this Notice of Violation, the Commissioner may issue a Notice and Order containing the actions that must be taken to achieve compliance, the required time frames, and an appropriate civil penalty. Pursuant to IC 13-30-4-1, the Commissioner may assess penalties of up to $25,000 per day for each violation.

To discuss this matter further, please contact Dirk Andres at (317) 233-5534 within fifteen (15) days after receipt of this Notice to request a conference. If settlement is reached, an Agreed Order will be prepared and sent for review and signature.

For the Commissioner:

Signed on June 29, 2001

Date: _______________ _________________________

Felicia A. Robinson

Assistant Commissioner

Office of Enforcement

cc: Knox County Health Department

Public File

http://www.state.in.us/idem