STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
PETROLEUM PRODUCTS CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 87-3124
)
DEPARTMENT OF ENVIRONMENTAL )
REGULATION, )
)
)
Respondent. )
)
RECOMMENDED ORDER
This cause was heard by William R. Dorsey, Jr., the assigned Hearing Officer of the Division of Administrative Hearings, on July 24 and August 21, 1989, in Tallahassee, Florida.
APPEARANCES
For Petitioner: R. L. Caleen, Jr., Esquire
OERTEL, HOFFMAN, FERNANDEZ & COLE
Post Office Box 6507 Tallahassee, FL 32314-6507
For Respondent: E. Gary Early, Esquire
Department of Environmental Regulation
Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400
STATEMENT OF THE ISSUE
The issue is whether the application of Petroleum Products Corporation for reimbursement of the cost of assessment and clean-up of soil and groundwater contamination at its site in Broward County, Florida, under the State Underground Petroleum Environmental Response Act of 1986 should be granted.
PRELIMINARY STATEMENT
The Department of Environmental Regulation (Department) proposed to deny the eligibility of Petroleum Products Corporation to receive reimbursement under the State Underground Petroleum Environmental Response Act, Section 376.3071, Florida Statutes, for the costs of assessing the contamination and cleaning contamination at its property in Pembroke Park, Broward County, Florida on December 8, 1986. Petroleum Products made a timely challenge to that determination in a petition for formal administrative hearing.
Petroleum Products Corporation alleged that it, and its predecessors, had operated a used oil recycling facility on the site for more than 20 years which resulted in site contamination; that it expended approximately $150,000 conducting petroleum contamination assessments and rehabilitation on the site, with additional assessment and clean-up costs to be incurred; and that the Department was currently removing oil from the groundwater by means of recovery wells, the cost of which Petroleum Products Corporation might ultimately be required to pay.
At the request of the parties, the hearing was delayed until two related, consolidated cases were heard, Puckett Oil v. DER and International Petroleum Corporation v. DER. They also raised issues of whether used oil contamination was eligible for cost reimbursement under Section 376.3071. In deciding these cases, the Department reversed its earlier position and decided that used oil could be a "petroleum product" as defined by Section 376.301(10), Florida Statutes.
Due to this change of interpretation, the Department filed a Notice to Amend its earlier denial of Petroleum Product's eligibility for reimbursement, but continued to deny eligibility for the following reasons:
a "substantial portion" of contamination at the property was attributable to disposal of sludge and hazardous contaminated fill material;
these substances are not used oil, and could not be classified as "petroleum products" eligible for clean-up at state expense; and
Petroleum Products Corporation had not established that the contamination at its site is the result of leaks of recyclable used oil from petroleum storage systems.
The parties filed a prehearing stipulation. The issue it framed is Petroleum Product Corporation's eligibility to receive reimbursement of site rehabilitation costs resulting from leaks and spills of used oil and virgin petroleum from its stationary storage tanks. The Department asserted in the stipulation that the application should be denied because:
the predominant source of site contamination is due to the placement of acid/clay sludge on the site, generated by re-refining processes, which originally had been kept in two deep pits;
free product contamination on the site is not significant in terms of overall site contamination and costs of rehabilitation;
the free product is the result of leaching of sludge as well as possible discharges from tanks;
tanks at the site included process tanks as well as storage tanks; and
other tanks held lubricating oil or used oil intended to be recycled as lubricating oil, both of which are ineligible for state reimbursement of clean-up expenses in the Department's view.
At the final hearing, Petroleum Products Corporation presented the testimony of its president, Jerrold Blair; H. Clark Dantzler, Jr., an expert in the operation of used oil recycling facilities between 1959 and 1970; and George
McDonnell, P. E., an expert in professional engineering with an emphasis on the operation of used oil recycling facilities.
Petroleum Products' exhibits numbered 1, 2, 8, 9, 10, 12A-I, 13A through E,
14, 16, 17, 19, 20, 21, 22, 23, 24, and 25 were received in evidence. It was permitted to supplement its exhibit number 8 by filing, after the hearing, copies of additional sludge removal receipts.
The Department presented the testimony of John Ruddell, Chief of the Bureau of Waste Cleanup; Barry Levine, a hydrogeologist; Steven Bedosky, a department employee; William G. Dean, an engineer and department employee; and Gary Webster, an employee of Hunter Environmental Services, Inc., and John Svec, an engineer and department employee. The Department's exhibits numbered 1, 1-A, 2, 2-A, 3, 4-A through D, 5, 6, 7, 8, 9, 10, 11, and 13 were received in evidence.
After the hearing, a further deposition of Mr. Jerrold Blair was taken on November 13, 1989, which was filed on November 16, 1989. Additional receipts for sludge tickets which should be part of the deposition of Mr. Blair were filed on November 9, 1989. These receipts were obtained from the United States Environmental Protection Agency in Atlanta, Georgia, where they had been stored. The Department's Motion to Strike those late filed exhibits is denied. That the sludge was taken to a city landfill rather than a county landfill is not significant. The receipts came from the EPA files or Petroleum Products Corporation.
FINDINGS OF FACT
The Legislature provided a system for the clean-up of sites contaminated as the result of the storage of petroleum or petroleum products in the State Underground Petroleum Environmental Response Act of 1986 (Super Act), Chapter 86-159, Laws of Florida, codified primarily as Section 376.3071, Florida Statutes.
The Super Act contains a reimbursement program funded by the Inland Protection Trust Fund. Section 376.3071(12), Florida Statutes, permits reimbursement of allowable costs for the rehabilitation of sites contaminated from discharges related to the storage of petroleum or petroleum products.
Petroleum Products Corporation owns a parcel of land located at 3130 Southwest 17th Street, Pembroke Park, Florida. From 1959 to 1970 Petroleum Products Corporation operated a facility on that land which collected used oil from service stations and automobile dealerships, processed it, and sold it either as fuel oil or lubricating oil. About 90% of 150,000 gallons of used oil processed monthly at the facility was sold as fuel; the remaining oil was sold as lubricating oil, but even when sold as lubricating oil, it was sometimes burned as fuel because re-refined oil makes good fuel. The storage tanks were located on the southeastern portion of the property, near Carolina Road.
The facility used a two-phase distillation process. Used oil was distilled to remove water, after which it could be sold as fuel oil. If processed in the second phase, for sale as lubricating oil, it was distilled further, and treated with sulfuric acid and clay to remove additives and residue, and change color. This phase produced a waste consisting of acid/clay sludge. This sludge is generally very black, and has a pH of approximately 3. It is very viscous, and has the consistency of roofing cement; laymen would describe it as tar. It does not flow easily, but is liquid enough to be pumped. This processing also occurred in the southeast part of the property.
While the recycling facility produced lubricating oil using the acid/clay treatment from 1959 to 1970, the acid sludge was hauled to a municipal dump, or placed in pits dug into the ground on the north and east of the plant site. When the pits were dug, they were dug below the water level, and there was water in the pits before the sludge was dumped in them. The disposal of sludge in pits on the recycling site was a prevailing industry practice, and violated no regulatory requirements at the time. Operators considered on-site disposal of sludge preferable to hauling sludge to a landfill. During periods of heavy rain, some of the sludge may have overflown the pits and spread to nearby land, where it would become mixed with the surface soil.
Petroleum Products Corporation ceased making lubricating oil in 1970, but continued to process used oil into fuel oil. The local Broward County Pollution Control Agency asked Petroleum Products Corporation to remove the acid/clay sludge from its property, and to refill the pits with other fill material. Petroleum Products Corporation acceeded to this request, and a great volume of sludge, perhaps hundreds of thousands of gallons, was removed from the pits, which were then refilled under the supervision of the Broward County Pollution Authority. Receipts Petroleum Products Corporation produced at the hearing, or thereafter from the custody of the U. S. Environmental Protection Agency, show that more than 150 truck loads of sludge were removed and hauled to landfills operated by Metropolitan Dade County or by the City of Surfside. Some pockets of the sludge remain at the site of the pits because they were not completely emptied. The backfill was clean fill, and the area was then bulldozed so that warehouses could be constructed in the area. This filling and bulldozing changed the contour of the land from what it had been in the past.
The Department contends that much of the sludge was spread out over an extended area of the site, and not removed to landfills. The evidence is persuasive that almost all of the sludge from the pits was removed to landfills. The testimony of Mr. Blair denying that the sludge was spread was credible. In addition, on-site spreading of the sludge would have been impracticable. As a tar-like substance, if spread out, it would have been tracked everywhere. It would stick to the tracks or wheels of any vehicles operating on the surface, and was so acidic it would burn or irritate the skin of anyone who came in contact with it. It would be extremely difficult to perform maintenance on equipment used to spread the sludge because of the need to clean the sludge off, so that the mechanic would not be burned.
In addition, there are a large number of receipts evidencing the systematic hauling of the sludge to landfills. The logic of Mr. McDonnell's testimony is persuasive:
If you have the alternate, which they obviously did, of hauling it away and simply dumping it, no one would go out and deliberately choose to do a very difficult job [spreading the sludge over the property] where there is an easy alternative available to them. (Tr. 285)
Although the facility ceased its re-refining of lubricating oil in 1970, it continued to collect, process, and sell used oil as a fuel until 1984. About 150,000 gallons per month of used oil were processed and sold as fuel.
The oil was typically crank case engine oil which contained the substances normally found in used oil of that type. There is no persuasive evidence that Petroleum Product Corporation ever received any hazardous waste, or mixed used oil with any hazardous waste.
Used oil is not listed as a hazardous waste by the U.S. Environmental Protection Agency or by the Department.
The used oil collected and recycled at Petroleum Product's facility was pumped into and stored in above-ground storage tanks. There were, over time, from 10 to 25 tanks, which ranged in size from 12,000 to 20,000 gallons. Normally, the facility stored between 400,000 and 500,000 gallons of used oil. Occasionally, the facility also received virgin oil, but it was processed quickly or sold because of its higher value. At the peak of its operation, the facility had 25 to 35 storage tanks.
Recycling operations had slim profit margins and were small operations. Storage tanks, pumps, and other equipment were bought used, often from other businesses dealing in virgin petroleum products. That used equipment was often rusty or deteriorating. Tank bottoms could have holes in them as the result of rust from standing water; tanks were sometimes riveted, and would have side or bottom leaks.
The tanks had virtually no overfill protection. When oil was pumped in, it would overflow from the top and run down the sides. Operators were typically not careful with the oil, because it had a very low value, about 2 to
5 cents a gallon. A spill of a few thousand gallons was regarded as an inconsequential matter.
The pumps used in storing oil often had leaks in packing seals, or had screw joints which would leak. Tank valves, also usually bought as used equipment, were often installed without new stem packing, and also would leak during operation. Almost no preventive maintenance was done, because it was not cost-effective to do so. Equipment was repaired only if its current state of repair interfered with operations, which usually meant that leaks were not repaired until they created a fire hazard.
Leaks and spills from used oil storage tanks, including their pumps, valves, and piping, were common.
A great volume of used oil leaked or spilled from Petroleum Products Corporation's tanks, pumps, and piping over its 25 year operation.
There were also large oil spills resulting from four or five major fires at the facility in the 1960s. The fire in 1963, which may have been the result of vandalism, caused 40,000 to 60,000 gallons of use oil to spill from storage tanks; 8 or 10 tanks were destroyed. There were no dikes, so that the oil flowed freely. When firemen used water on the fire, the oil was absorbed into the soil.
Another major fire occurred in October, 1966 in which three oil storage tanks collapsed spilling about 50,000 gallons of oil. Another 25 foot high oil tank collapsed on a firetruck.
There is no way to know, with certainty, the volume of used oil, virgin oil, and lubricating oil which spilled or leaked into the ground on the site. It is reasonable to believe that 9 to 12 gallons of oil would have leaked or spilled each day at the facility, which would have resulted in spill of over 100,000 gallons of oil. This estimate, made by Mr. McDonnell, is credible and is conservative, given the volume of oil also spilled during the fires.
Petroleum Products Corporation does not contend that the leaks and spills from process tanks, rather than from storage tanks, are eligible for reimbursement of site assessment and cleanup costs. Oil leaked from both, however, and once in the ground, the oils are indistinguishable. Due to the capacity of the tanks and the years they were in use, however, it is reasonable to assume that 15% or less of the leaks and spills were attributable to process tanks.
After processing, most of the oil was burned as fuel. Some was used as a lubricant. The only difference between used oil sold as fuel or lubricant was that the lubricating oil had the additives removed and the color changed. Both burn well. There is an insufficient basis in this record to justify the Department's interpretation excluding this site from eligibility for cleanup because oil processing ocurred at the site to produce lubricating oil. Section 376.3071 does not disqualify all or part of a site from eligibility for cleanup reimbursement because a portion of the used oil stored there was ultimately used as lubricants.
In 1984 a Department investigator asked Petroleum Products Corporation to install exploratory wells to determine whether there was contamination at the site. Petroleum Products engaged the firm of Dames & Moore to undertake a preliminary investigation, which revealed that there was groundwater contamination in the form of floating hydrocarbons.
On April 1, 1985, the United States Environmental Protection Agency and Petroleum Products Corporation entered into a consent order agreement which required the removal of 17 above-ground tanks leaking used oil into the ground, which constituted a continuing source of contamination.
Petroleum Products Corporation contracted with Conversion Technology Corporation to recover and recycle the oil and wastes, with Waldron's tank cleaning services to clean the empty tanks and drum the sludge, with Cuyahoga Wrecking Service to make the tanks inoperable, and with Seven & Seven Transporters to remove the waste to a disposal facility. The employee of the
U.S. Environmental Protection Agency who was in charge of the site commended Petroleum Products Corporation for its cleanup effort, and wrote as the OSC [on- scene coordinator] for this EPA-monitored cleanup I may say that [Petroleum Products Corporation] exemplified industrial cooperation and responsibility in combating the vexing problem of hazardous waste management. (Petitioner's Exhibit 9) Petroleum Products Corporation cooperated with the Environmental Protection Agency and with the Department in determining how to deal with the contamination. It has already spent approximately $150,000 to perform remedial action.
Contamination at the site is of three types: oil floating in the groundwater, soil contamination, and groundwater contamination.
It is not possible to clean any individual phase of the contamination without affecting the other phases. Attempts at remediation must be monitored to prevent an influx of organic contaminants into the aquifer. Similarly, the cost related to the cleanup of an individual phase of contamination cannot be isolated because of the inter-related nature of the cleanup phases.
The creation of a cone of groundwater depression is necessary for any recovery of the free or floating oil. The cost of recovery of the free product cannot be separated from groundwater cleanup because it is necessary to treat large quantities of groundwater involved in creating a cone of depression. To
the extent that a proportion of the cost might be estimated, the cost associated with the recovery of free product would be a minor portion of the overall cleanup. There is currently a free product recovery effort in place at the site, which is intended to prevent further migration of the product off-site.
This ongoing action is not considered an element of the site cleanup. The most feasible method of cleanup for the free product will involve the excavation of the soils to create a trench. The free product and ground water will be recovered as they flow into the trench.
During October and November of 1984, Environmental Science and Engineering, Inc., a consulting firm working under contract with the Department, assessed the extent of free floating oil in the groundwater under the Petroleum Product Corporation's site. Those consultants found a free floating layer of oil from 5" to 30" thick under approximately one-half of the one acre site Petitioner still owns. The free product generally mirrors the location of the former recycling facility and its storage tanks. The viscosity of the free product is comparable to about 40-weight engine oil.
Environmental Science and Engineering estimates that the floating layer of oil contains 20,000 to 60,000 gallons of recoverable petroleum product. The direction of ground water flow and the migration of contaminants off-site is to the east or southeast. The soil above the oil layer has been saturated with oil because of the fluctuations of the layer with movement of the water table as the area experiences heavy rains or dry spells.
Wells drilled in the location of the former sludge lagoons to the north and east of the plant site reveal a heavy slightly liquid type of sludge. The oil in the lagoon sites is immobile, and no free product collects in the wells after 24 hours. One sample collected in the mason jar shows a slight degree of oil separation after 24 hours. This anecdotal evidence of separation is not very informative, and is not persuasive that oil separates from the remaining sludge on-site. See, Finding 32, below.
A second assessment of soil and groundwater contamination was done by another consulting firm under contract with the Department, Ecology and Environment, Inc. That study showed free floating product at the site. The only calculation of the amount of free floating oil was that done by Environmental Science and Engineering, Inc., see, Finding 29, estimating that there would be 20,000 to 60,000 gallons of recoverable oil. That calculation understates the amount of oil in the ground. The estimate given by George McDonnell of 103,000 gallons is more persuasive. It is consistent that the large amounts of oil which leaked or spilled at the site over a 25 year period.
It is unlikely that any appreciable portion of the approximately 103,000 gallons of floating oil has its genesis in the separation of oil from the acid/clay sludge which had been disposed in the two lagoons for the following reasons:
Oil associated with acid/sludge would be quite acidic, and have a pH between 2 and 4. The pH scale is not a linear scale, so differences in pH are quite dramatic as the pH values change. Samples of free product shows a uniform pH of approximately 6 or 7. In almost all 31 monitoring or observation wells the pH is consistent with the characteristics of used oil, (a pH of 6 or 7), not the pH of sludge (a pH of 2 to 4). The only sample which disclosed a low pH was that taken in monitoring well number 3 which was located in the former sludge lagoon site.
The groundwater flows to the east or southeast. This does not explain the presence of free product to the west and southwest of the sludge pits nor the absence of free product to the east of the pits.
The viscosity of the oil is similar to that of 40-weight engine oil and not highly viscous, as the tar-like sludge would be.
The oil in the sludge pits is basically immobile and no free product surfaced in the monitoring well after waiting 24 hours.
The pH of the free product is nearly neutral. The Department believes that the sludge was mixed with lime rock or fill and spread over the site to increase the pH of the oil. This is unpersuasive. Mixing with lime rock would increase the pH of the sludge (tend to bring it towards neutral) but it would not cause the dramatic lowering of acidity which would bring the sludge to a pH of 6 or 7. In addition, the viscosity of the sludge would not be so changed by mixing the sludge with fill that its viscosity would become similar to that of 40-weight engine oil.
To believe that the free product results from sludge disposal rather than leaks ignores the normal operating practice of used oil recovery facilities in the late 50s and 60s where spills from storage tanks, pumps, and piping were very common.
Little of the free product has been recovered through the current remediation efforts. If not recovered, over time the approximately 103,000 gallons of floating oil will spread to adjacent property. To recover this oil by conventional trench or well recovery operations will probably cost $250,000 or more. The capital cost of the groundwater recovery/discharge system, with monitoring wells, will be about $85,000; cost of operating and maintenance are approximately $180,000.
The firm of Ecology & Environment, Inc., collected soil samples at 56 locations in two phases in its remedial investigation. Forty-six of the samples were taken at shallow depths (27 at 8 inches, 19 at approximately 10 inches); 10 more samples were taken in the old disposal pit sites at depths between 0 and 35 feet). The two primary classes of contaminants found in the soil were lead and organics (hydrocarbons associated with petroleum products). Both contaminants are found in used oil. The lead and organic contaminants were found in the shallow soils over the southern half of the site. Very little contamination was found beyond the main area of site activity. The soil contamination was concentrated in the plant and former disposal pit areas.
Samples with high lead concentrations were found in the former disposal pit sites. Contamination extended to a depth of 25 feet in one soil sample from a former pit, where oily plastic sludge was found with fine sand or clay. The two former pit sites are the only places with documented contamination below a 10 foot depth.
Although the organic contamination extended laterally further than the lead contamination, Environment & Ecology concluded that the wider distribution did not reflect contamination from Petroleum Product Corporation's activities. The general area has long been the site of commercial and industrial activities, and there are many other possible sources for contamination including a firing range, which would have been disposing of lead bullets fired at the range, a generator plant, and a former spray-painting facility. Solvents and other chemicals used in these activities would contribute to soil and groundwater
contamination. The consultants had been told by area businesses that small scale dumping of industrial chemicals in the vicinity has been common.
Soil samples revealed a "great deal of heterogeneity." There was no uniform distribution of soils in the shallow zone. This probably occurs because after the reprocessing operations ended in 1970, the land was cleared and filled, so that many of the warehouses now in the area could be constructed. Most of the upper 8 to 10 feet is fill material.
The ground water was monitored by installing 38 wells on the site, most of which were screened at depths of 10 to 12 feet. Five intermediate wells with depths of 50 feet and two deep wells of 100 to 200 feet were also installed. Every sample exhibited a pH of between 6.4 and 7.4. The primary contaminants were lead, organics, and chromium. The evidence does not indicate the source of the chromium. It is unrelated to Petroleum Product Corporation's activities.
The groundwater contamination, both metal and organic, was only in the shallow zone. It extends laterally roughly to the same extent of the shallow contamination found in the soil. This suggests that the contaminants in the soil migrated due to seepage from rainfall or fluctuation in the water table into the groundwater. The water table is about five feet below the land surface.
The Department has argued that the contaminants in the soil and groundwater were caused by mixing and spreading of the sludge material during the early 1970s over the surface of the area. This hypothesis has already been rejected for the reason stated in Findings 7 and 8, above.
It is more likely that the soil contamination resulted from frequent spills and leaks of oil from storage tanks years ago. The soil contaminants are those found in used oil. The area generally is flat. There was no impediment to oil spills flowing over a large surface area, following the contour of the land at that time.
Depending on the method used to clean up the site, the cost of rehabilitating the area will range between two and forty-six million dollars. It will cost over one million dollars to recover and treat contaminated groundwater. Approximately 110,000 cubic yards of contaminated soil must be removed and treated, the majority of that coming from the area outside the former sludge pits. The presence of contamination at the site is to be expected, given the site's former use. All of the 8 turnpike facilities and 8 maintenance yards operated by the Florida Department of Transportation report petroleum contamination from tanks, and the Department of Transportation has
estimated cleanup cost will range from $20 to $30 million, although DER believes the cost may be $5 million. The cleanup will be funded by the Inland Protection Trust Fund, as would the reimbursement in this case. The cost of rehabilitation is in the range of estimates that the Department has received for other petroleum contamination sites.
In summary, the Petitioner's site is contaminated primarily from leak and spills of used and virgin oils processed or unprocessed and from storage tanks, pumps and integral piping. Small spills were continuous and some associated with fires were massive. The only portion of the site not contaminated due to leaks and spills is the residual soil and groundwater contamination from the sludge disposal pits, which is a small part of the overall contamination.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.
The Legislature recognized in Section 376.3071(1), Florida Statutes, that spills and leaks from stored petroleum and petroleum products pose a threat to surface and groundwater. The Legislature established the Inland Protection Trust Fund composed from an excise tax on petroleum products, so that cleanup of contamination related to the storage of petroleum would take place without delay. Sections 376.3071(2) and 206.9925(4), (5), Florida Statutes. The fund is used to pay for the cleanup of eligible contamination sites and the reimbursement of owners who undertake their own cleanup efforts.
The provisions of Section 376.3071 apply only to the cleanup of "contamination related to the storage of petroleum and petroleum products." Section 376.3071(2), Florida Statutes. The Department has argued that contamination related to the disposal of petroleum and petroleum products is ineligible for funding from the Inland Protection Trust Fund. Whether that may be true in other circumstances, it is not true here. Storage incident to re- refining or sale of used oil, whether as a fuel or a lubricant, is nonetheless storage of petroleum products. Most of the discharges here arose from the containment of used oil in tanks which were serving to store that used oil. A small amount of the contamination arises from pockets of sludge left after the sludge was hauled away.
As used in Section 376.3071, "petroleum products" includes "any liquid fuel commodity made from petroleum. . ." Section 376.301(10), Florida Statutes. The Department has already found that used oil is a petroleum product within the meaning of the statute when it is being recycled. Puckett Oil Company v. DER,
10 FALR 5525 (1988), reversed on other grounds, 549 So.2d 720 (Fla. 1st DCA 1989). The evidence in this case is persuasive that used oil is commonly used as a fuel. It is therefore a "liquid fuel commodity" without regard to the intention of the person or entity which has stored the used oil for use either as a fuel or as a lubricant. The definition of "petroleum products" in Section 376.301(10) does not require any assessment of the owners subjective intention about used oil's ultimate use in determining whether that substance is a petroleum product. In contrast, the definition of "petroleum storage system" does contain an element of intention. Under that definition, a petroleum storage system is defined as a stationary tank not covered under the provisions of Chapter 377, together with any onsite integral piping or dispensing system associated therewith, which is used, or intended to be used, for the storage or supply of any petroleum product. . . Section 376.301(11), Florida Statutes.
The Third District Court of Appeal rejected the Department's interpretation in Commercial Coating Corporation v. DER, 548 So.2d 677 (Fla. 1st DCA 1989) that mineral spirits was not a "petroleum product" because is was not primarily used as a fuel, but as a solvent. The court focused on two facts: that mineral spirits is a petroleum product, and that it is a liquid fuel. The court therefore reversed an order which had rejected an application to participate in the early detection incentive program for cleanup of contaminated sites under the Super Act. Similarly, used oil is used as a fuel, and the same analysis applied in Commercial Coating Corporation leads to a finding of eligibility here. The contamination resulting from the leaks and spills of used oil is quite similar to the contamination which would result from leaks or
spills of virgin oil or other petroleum products which would clearly be covered under Section 376.3071, Florida Statutes.
Although not directly on point, the decision of the First District Court of Appeal in Puckett Oil v. DER, 459 So.2d 720 (Fla. 1st DCA 1989)(on rehearing) also indicates some judicial dissatisfaction with the Department's reading of the Super Act to exclude the cost of cleanup of used oil from service stations. The spills of used oil Petroleum Products Corporation collected here also qualify for cleanup under the Super Act.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Petroleum Products Corporation fo
eligibility to participate in the cleanup program funded by the Inland Protection Trust Fund be granted.
DONE and ENTERED this 9th day of July, 1990, at Tallahassee, Florida.
WILLIAM R. DORSEY, JR.
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1990.
APPENDIX
Rulings on Findings of Fact proposed the Petitioner:
As will be obvious, the proposed order submitted by Petroleum Products Corporation comported closely with the Hearing Officer's view of the evidence, and with some modification was essentially adopted as proposed.
Adopted in Finding of Fact 3.
Adopted in Finding of Fact 3.
Adopted in Finding of Fact 4.
Adopted in Finding of Fact 4.
Adopted in Finding of Fact 5.
Adopted in Finding of Fact 6.
Adopted in Finding of Fact 6.
Adopted in Findings of Fact 7 and 8.
Adopted in Finding of Fact 8.
Adopted in Findings of Fact 9 and 10.
Adopted in Finding of Fact 10, to the extent necessary.
Adopted in Finding of Fact 11.
Adopted in Finding of Fact 12.
Adopted in Finding of Fact 13.
Adopted in Finding of Fact 14.
Adopted in Finding of Fact 15.
Generally adopted in Finding of Fact 16.
Rejected as subordinate.
Rejected as unnecessary and subordinate.
Adopted in Finding of Fact 17.
Adopted in Finding of Fact 18.
Adopted in Finding of Fact 19.
Adopted in Finding of Fact 20.
Generally adopted in Finding of Fact 21.
Adopted in Finding of Fact 22.
Adopted in Finding of Fact 23.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 28.
Adopted in Finding of Fact 29.
Adopted in Finding of Fact 30.
Adopted in Finding of Fact 31.
Adopted in Findings of Fact 31 and 32.
Adopted in Finding of Fact 33
Rejected as repetitious of Finding of Fact 6.
Rejected, see Findings of Fact 25 and 26.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 34.
Adopted in Finding of Fact 35.
Adopted in Finding of Fact 36.
Adopted in Finding of Fact 37.
Adopted in Finding of Fact 38.
Adopted in Finding of Fact 39.
Adopted in Finding of Fact 40.
Adopted in Finding of Fact 41.
The spreading theory is rejected in Findings of Fact 7 and 8.
Rejected as unnecessary.
Adopted in Finding of Fact 42.
Adopted in Finding of Fact 42. See also the stipulation of the parties entered as Exhibit 22.
Rejected as unnecessary.
Rulings on Findings of Fact proposed by the Department.
Adopted in Finding of Fact 1.
Adopted as modified in Finding of Fact 2.
Discussed in the Conclusions of Law, see page 20.
Adopted in Finding of Fact 3.
Adopted in Finding of Fact 3.
Implicit in Findings of Fact 3 and 6.
Adopted in Finding of Fact 6.
Adopted in Finding of Fact 5.
Adopted in Finding of Fact 4.
Adopted in Finding of Fact 4.
Rejected as unsupported by the transcript references given.
Adopted in Finding of Fact 5.
Adopted in Finding of Fact 5.
Adopted in Finding of Fact 5
Rejected as unnecessary.
Generally rejected; see Finding of Fact 6 concerning the filling of the disposal pits.
While some pockets of sludge remain at the site of the pits, the volume is difficult to determine. In an absolute sense, those pockets may contain a substantial amount of sludge, but on a comparative basis, by far the greatest part of the sludge was removed.
Rejected as unnecessary.
Generally adopted in Finding of Fact 32(1), but see the final sentence of (1).
Generally adopted in Findings of Fact 25, 28, and 34.
Generally adopted in Finding of Fact 28, since the recycling facility and storage tanks were on the southern part of the property.
Rejected as unnecessary.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 3.
Implicit in Finding of Fact 11.
Adopted in Finding of Fact 11.
Adopted in Finding of Fact 4.
Rejected because the process tanks necessarily store the product being processed, serving as a vessel to contain the product.
Rejected, see Finding of Fact 3 with respect to the turnover in the volume of used oil processed at the facility. Only about 10 percent of the oil was reprocessed as lubricating oil. This is more significant than the volume of the tanks. See also Tr. 24 with respect to the storage capacity, and Finding of Fact 11.
Rejected as unnecessary.
Rejected because the surficial drainage has probably been changed by the filling and regrading of the property in preparation for building the warehouses. See Finding of Fact 6. The current surficial flow says little about the flow when the facility operated in the late 1950's and throughout the 1960's.
Adopted in Findings of Fact 15 through 19.
Adopted in Findings of Fact 17 and 18.
Adopted in Finding of Fact 17.
Generally rejected, the evidence is persuasive that about 50,000 gallons of oil were lost in the 1966 fire. (See Tr. 36-37.)
Adopted in Finding of Fact 25.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 27.
Adopted in Finding of Fact 27.
Rejected as unnecessary.
Adopted in Finding of Fact 27.
Adopted in Finding of Fact 27.
Adopted in Finding of Fact 27.
Adopted in Finding of Fact 27.
Adopted in Finding of Fact 27.
Rejected, the free product covers approximately one-half acre.
Rejected, the more persuasive evidence is the 103,000 gallons estimated by Mr. McDonnell. See Finding of Fact 31.
Rejected as unnecessary.
Rejected as unnecessary.
See Findings of Fact 28 and 34.
Rejected because it is unlikely that sludges are separating in the former sludge lagoon. See Finding of Fact 30. The source of the oil is more likely
the substantial loss of oil which occurred from the fires and from leaks over the years which is now floating above the ground water.
Generally adopted in Finding of Fact 28.
Generally adopted in Finding of Fact 28.
Rejected as unpersuasive.
Rejected, the source of the free product is not leaching from the disposal pit, but the oil from over flows and leaks during operation as well as large inundations during fires.
Adopted in Finding of Fact 4.
Adopted in Finding of Fact 4.
Adopted in Finding of Fact 4.
Rejected, see Finding of Fact 30.
Rejected because oil does not separate from the sludge.
Rejected for the reason given for rejecting Finding of Fact 63.
Rejected, the seepage is not the result of separation in the disposal pits, but from the plume of free product in the ground above the ground water.
Rejected as unnecessary, but the similarity of the oil seeping from the sludge pit area to waste oil is consistent with its source as leaks and spills inicident to fires.
Rejected because the sludge does not separate.
Rejected because the sludge does not separate.
Rejected because the sludge does not separate, see Finding of Fact 30.
Rejected as unnecessary; obviously as there is no more storage, so there is no more source for leaks or spills.
71-73. Discussed in Finding of Fact 30.
Rejected because liquid product will not accumulate.
Rejected because the sludge does not separate.
Adopted in Finding of Fact 32(1).
Adopted in Finding of Fact 32(5).
Adopted in Finding of Fact 32(1).
Rejected for the reason stated in Finding of Fact 32(5).
Rejected for the reason stated in Finding of Fact 32(5).
Rejected as unnecessary and for the reason stated in Finding of Fact 32(5).
Adopted in Finding of Fact 32(1), which is consistent with the source of the free product being used oil rather than separation from sludge remaining onsite.
83-84. Rejected as unnecessary.
Rejected as unnecessary.
Rejected because the testimony of Mr. McDonnell has been accepted.
Rejected as unnecessary.
Adopted in Finding of Fact 27.
Rejected as redundant.
Adopted in Finding of Fact 34.
Adopted in Finding of Fact 34.
Implicit in the finding that lead is a contaminant found in used oil. See Finding of Fact 34.
Adopted in Finding of Fact 4.
Rejected as unnecessary.
Generally adopted in Finding of Fact 34.
Generally adopted in Finding of Fact 34.
Adopted in Finding of Fact 35.
Rejected as unnecessary.
Rejected as unnecessary; see also, Finding of Fact 6.
Adopted in Finding of Fact 32(1).
Rejected as unnecessary.
Rejected as unnecessary.
Rejected as unnecessary, although there were disposal pits in the north and eastern parts of the property.
Adopted in Finding of Fact 34 with respect to location, but the testimony with respect to spreading of the sludge is rejected. See Finding of Fact 7.
It is unlikely that sludge was spread over the site. The more likely explanation for the appearance of sludge in the lithologic logs for the southern end of the site is that the disposal lagoons periodically overflowed after heavy rains and provided a mechanism for the active transport of sludge out of the disposal pits into some areas on the southern end of the site. Apparently the northern area now occupied by the warehouses was higher, because no sludge was found in observation wells 4, 5 and 19.
Rejected, page 41 of DER's Exhibit 3 shows no sludge at observation well 5, which the proposed finding implies.
107-112. Generally rejected because the testimony with respect to the surface flow from the tank area being to the south is rejected because the grading of the property as the warehouses were built likely changed the contour of the land. Mr. Levin's testimony was not particularly strong; for example, at page
25 of his prefiled direct testimony he states, "And for the shallow soil contamination I would still have to lean towards the fact that the materials were mixed and spread."
113-114. The sludge contamination is not the predominant or source of contamination. Rather, it is the oils which floated across the land and were carried into the soil and resulted from the leaks and spills.
115-120. Generally accepted in Finding of Fact 36, although subordinate to that finding.
121. Generally accepted, although the soil contamination by lead is attributable to leaks and spills from the used oil.
122-124. Rejected as unnecessary.
Accepted in Finding of Fact 25.
Accepted in Finding of Fact 38.
127-128. Subordinate to Findings of Fact 36, especially the last sentence, and 38.
Subordinate to Finding of Fact 39.
Subordinate to Finding of Fact 39, especially the last sentence.
Rejected as unnecessary.
132-134. Accepted in Finding of Fact 39.
135. Rejected because the soil contamination is the result of leaks and spills of oil.
136-137. Rejected, it is more likely that the neutral pH of the ground water is the result of the essentially neutral contaminant, the used oil.
Rejected as unnecessary.
Rejected as unnecessary, although consistent with Finding of Fact 39 that the lateral extent of ground water contamination mirrors the soil contamination which has resulted from leaks and spills.
140-141. The predominant source of contamination is leaks and spills.
142. Rejected, the area affected by the leaks and spills is large, due especially to the fires and consequent loss of large amounts of oil from tanks. See Finding of Fact 41.
143-144. Rejected as irrelevant and unnecessary.
145. Although true, not relevant.
146-148. Rejected, whether the Environmental Protection Agency is correct or not in its assessment is not at issue here. This site was contaminated by used oil.
149-150. Although true, not relevant.
Implicitly accepted in that no finding with respect to "bias" has been made.
Rejected as legal argument.
Rejected because the predominate source of contamination is an eligible source.
Rejected, but the source here falls within the statutory directive.
Rejected. The site here is predominantly contaminated by used oil, which is eligible. The eligible portion is not a minor part of the entire of the contamination.
COPIES FURNISHED:
R. L. Caleen, Jr., Esquire OERTEL, HOFFMAN, FERNANDEZ
& COLE
Post Office Box 6507 Tallahassee, Florida 32314-6507
Gary Early, Esquire
Department of Environmental Regulation Twin Towers Office Building
2600 Blair Stone Road Tallahassee, Florida 32399-2400
Dale H. Twachtmann, Secretary Department of Environmental Regulation Twin Towers Office Building
2600 Blair Stone Road Tallahassee, Florida 32399-2400
Daniel H. Thompson, General Counsel Department of Environmental Regulation Twin Towers Office Building
2600 Blair Stone Road Tallahassee, Florida 32399-2400
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATIONS
PETROLEUM PRODUCTS CORPORATION,
Petitioner,
OGC Case No. 87-0028
vs. DOAH Case No. 87-3124
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION,
Respondent.
/
FINAL ORDER
On July 9, 1990, a hearing officer from the Division of Administrative Hearings submitted to me and all parties his Recommended Order, a copy of which is attached as Exhibit I. On July 23, Respondent, the Department of Environmental Regulation ("Department"), filed an exception to the Recommended Order, attached as Exhibit II. Petitioner, Petroleum Products Corporation' ("Petroleum Products"), timely filed a response to the exception. The matter thereafter came before me as Secretary of the Department for final agency action.
Background
This matter arises from an application by Petroleum Products for reimbursement from the Inland Protection Trust Fund of the costs of assessment and clean up of soil and groundwater contamination at its site in Broward County, Florida, under the State Underground Petroleum Environmental Response ("S.U.P.E.R.") Act, Section 376.3071, Florida Statutes. The Department proposed to deny eligibility, and Petroleum Products made a timely challenge to that determination in a petition for formal administrative proceedings. After a hearing held on July 24 and August 2l, 1989, the hearing officer recommended that the Department grant the reimbursement application. The hearing officer found that the contamination was the result of leaks and spills from storage tanks containing used oil, approximately 90% of which was reprocessed for use as fuel. The remainder was reprocessed for use as lubricants. The hearing officer concluded, among other things, that the spills and leaks were thus primarily of petroleum products that are a liquid fuel commodity from a petroleum storage system, as those terms are defined and used in the S.U.P.E.R. Act and further interpreted in Puckett Oil Co. v. Department of Environmental Reulation, l0 FALR 5525 (Final Order September l,l988), rev. on other grounds, 549 So.2d 720 (Fla 1st DCA 1989). He thereupon recommended that the site should be eligible for reimbursement.
Ruling on Exception
The Department takes exception to further statements by the hearing officer that question the interpretation in Puckett and suggest that the lubricants would by themselves be eligible for reimbursement as a liquid fuel commodity.
To the extent such an inference exists in the recommended order, I accept the exception, and I incorporate the exception by reference into the Final Order as a modification of the recommended order. I reject the response by Petroleum Products, which argues that I should no longer apply the analysis in Puckett, in defining a liquid fuel commodity, that the Department must look at how a petroleum product is used in determining whether it is a liquid fuel commodity. Rather, as I stated in Red Top Sedan v. Department of Environmental ReQulation, l2 FALR 214 (Final Order September 14, 1989), affirmed per curiam So.2d
(Fla 1st DCA 1990), the functional use analysis of Puckett is still applicable as Department policy. Particularly given the affirmance of the Red Toe Final Order, I reject the hearing officer's suggestion that-I recede from that policy.
Nonetheless, as Red Top also states and as the exception acknowledges, the Department must also look at eligible and ineligible sources that have resulted in a mixed plume of contamination in terms of which source is the predominant one. Since the hearing officer found, based upon competent substantial evidence and contrary to the initial determination by the Department when it proposed to
deny eligibility, that the contamination plume resulted from leaks and spills from petroleum storage systems primarily containing used oil intended for use as fuel, and since the facility is otherwise eligible under Section 376.3071, Florida Statutes, I therefore conclude that Petroleum Products's application for reimbursement under the S.U.P.E.R. Act must be granted.
Therefore, it is ORDERED:
The hearing officer's findings of fact and conclusions of law are adopted in this Final Order, except as modified by.this Final Order and by the Department's exception, which is incorporated by reference into this Final Order.
The application of Petroleum Products for eligibility to participate in the cleanup program funded by the Inland Protection Trust Fund is hereby granted.
DONE AND ORDERED in Tallahassee, Florida this 22 day of August, 1990
STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION
DALE TWACHTMANN
Secretary
Twin Towers Office Building 2600 Blair Stone Road
Tallahassee, Florida 32399-2400
Telephone: (904)488-4805
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished'by hand-delivery to William Dorsey, Hearing Officer, Division of Administrative Hearings, The DeSoto Building, 1230 Apalachee Parkway, Tallahassee, FL 32399-1550, and Gary Early, Assistant General Counsel, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400, and by U.S. Mail to R. L. Caleen, Jr., Esquire, Oertel, Hoffman, Fernandez & Cole, Post Office Box 6507, Tallahassee, FL 32314-6507 on this 23 day of August, 1990.
DANIEL H. THOMPSON
General Counsel
Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400
Telephone: (904)488-9730
| Issue Date | Proceedings |
|---|---|
| Jul. 09, 1990 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 22, 1990 | Agency Final Order | |
| Jul. 09, 1990 | Recommended Order | Used oil is a petroleum product qualifying for cleanup reimbursement under the Inland Protection trust fund |
CHEVRON U.S.A., INC. (138505169) vs DEPARTMENT OF ENVIRONMENTAL REGULATION, 87-003124 (1987)
CJC PROPERTIES LTD. vs DEPARTMENT OF ENVIRONMENTAL PROTECTION, 87-003124 (1987)
CJC PROPERTIES LTD. vs DEPARTMENT OF ENVIRONMENTAL PROTECTION, 87-003124 (1987)
UNION 76 (NO. 138503963) vs DEPARTMENT OF ENVIRONMENTAL REGULATION, 87-003124 (1987)
RED TOP SEDAN, INC. vs. DEPARTMENT OF ENVIRONMENTAL REGULATION, 87-003124 (1987)
