The Issue The issue is whether Florida Petroleum Markers and Convenience Store Association (Florida Petroleum) is entitled to reasonable attorney’s fees and costs pursuant to Section 120.595(2), Florida Statutes, and if so, in what amount.1
Findings Of Fact Introduction Florida Petroleum is the prevailing party in the underlying rule challenge and requests an award of reasonable attorney's fees pursuant to Section 120.595(2), Florida Statutes.2 Florida Petroleum prevailed in DOAH Case No. 05-0529RP on one of two challenged proposed rule revisions to Florida Administrative Code Chapter 62-770, which governs cleanup of petroleum contamination. Proposed rule 62-770.220(3)(b) was held to be an "invalid exercise of delegated legislative authority." Proposed rule 62-770.220(4), was "not an invalid exercise of delegated legislative authority, except insofar as notice must be given every five years to persons other than 'local governments and owners of any property into which the point of compliance is allowed to extend,' as provided in Section 376.3071(5)(b)2., Florida Statutes."3 The Department argues that its actions were "substantially justified" because there was a reasonable basis in law and fact at the time its actions were taken. The proposed rules were approved by the Environmental Regulation Commission (ERC) on February 2, 2005, which is the time when the Department's "actions were taken." The Department does not argue that special circumstances exist that would make the award of fees unjust. Department Contamination Programs The Department's Division of Waste Management is comprised of the Bureau of Petroleum Storage Systems, the Bureau of Waste Cleanup, and the Bureau of Solid and Hazardous Waste. The Bureau of Petroleum Storage Systems administers the state's petroleum contamination cleanup program. This cleanup program encompasses the technical oversight, management, and administrative activities necessary to prioritize, assess, and cleanup sites contaminated by discharges of petroleum and petroleum products from petroleum storage systems. There are approximately 23,000 petroleum-contaminated sites statewide. Florida Administrative Code Chapter 62-770 establishes petroleum contamination site cleanup criteria. These criteria are established for the purposes of protecting the public health and the environment and for determining, on a site-specific basis, the rehabilitation program tasks that comprise a site rehabilitation program and the levels at which a rehabilitation program task and site rehabilitation program may be deemed complete. Fla. Admin. Code R. 62-770.160(8). The petroleum contamination cleanup program incorporates risk-based corrective action (RBCA) principles to achieve protection of human health, public safety, and the environment in a cost-effective manner. The phased RBCA process is iterative and tailors site rehabilitation tasks to site-specific conditions and risks. Fla. Admin. Code R. 62-770.160(8). The Bureau of Waste Cleanup administers the state's drycleaning solvent cleanup program. This program is for the cleanup of property that is contaminated with drycleaning solvents as a result of the operations of a drycleaning facility or wholesale supply facility. Florida Administrative Code Chapter 62-782 establishes drycleaning solvent cleanup criteria, established for the purposes of protecting the human health, public safety and the environment under actual circumstances of exposure and for determining, on a site-specific basis, the rehabilitation program tasks that comprise a site rehabilitation program and the levels at which a rehabilitation program task and site rehabilitation program may be deemed complete. Fla. Admin. Code R. 62-782.150(1). The drycleaning solvent cleanup program, like the petroleum contamination cleanup program, the brownfield site rehabilitation program, and the global RBCA contamination cleanup program mentioned below, incorporates RBCA principles to achieve protection of human health and the environment in a cost-effective manner. Fla. Admin. Code R. 62-782.150(1) and 62-785.150(1). In 2003, the Legislature adopted Section 376.30701, Florida Statutes, which authorizes the Department to adopt rule criteria for the implementation of what is referred to as "global RBCA," which extends the RBCA process to contaminated sites where legal responsibility for site rehabilitation exists pursuant to Chapter 376 or Chapter 403, Florida Statutes. Global RBCA is a cleanup program for contaminated sites that do not fall within one of the Department's other contamination cleanup programs. Department Rulemaking Efforts After the passage of Section 376.30701(2), Florida Statutes, the Department initiated rulemaking to develop Florida Administrative Code Chapter 62-780 (global RBCA). Section 376.30701(2) established July 1, 2004, as the date the Department was to adopt rule criteria to implement the global RBCA contamination cleanup program. At the same time, the Department initiated rulemaking with respect to revisions to Florida Administrative Code Chapters 62-770 (petroleum), Chapter 62-782 (drycleaning solvents), and Chapter 62-785 (brownfields). This decision was predicated on the similarities among the four waste cleanup programs and the Department's desire to ensure a consistent approach across the four programs and pursuant to one large rulemaking effort. As such, the Department sought to include the same notification provisions in each rule for consistency purposes. (T 33-34, 55). However, the Department also recognized at the time that the notice provision for RBCA for petroleum contamination cleanups, i.e., Section 376.3071(5)(b)2., was different from the notice provisions for RBCA cleanups for the drycleaning solvent (Section 376.3078(4)(b)), brownfields (Section 376.81(1)(b)), and global RBCA (Section 376.30701(2)(b)) programs. (T 69, 115, 126-129). In each of these three statutes, the Legislature expressly expanded the class of persons to whom notice is required to be given and expressly referred to a specific type of notice to be given (actual or constructive) depending on the class of persons designated to receive notice. Each of the latter statutes was enacted after, and presumably with knowledge of Section 376.3071(5)(b)2., which was materially amended in material part in 1996 to add, in part, the notice provision. See Ch. 96-277, § 5, at 1131, 1135-1136, Laws of Fla. In May 2004, the Department became aware of concerns with regard to on-going efforts to assess the groundwater contamination at the former American Beryllium plant in Tallevast, Manatee County, Florida. (The party's refer to the city as Tallavast, whereas the Transcript (T 36) and DEP Exhibit 1 refer to the city as Tallevast.) For approximately two years, the owner of the plant, Lockheed Martin, had been conducting an on-going assessment of the extent of the solvent (trichloroethylene) contamination. The Department was concerned that there were residential areas located adjacent to and in the immediate vicinity of the former industrial plant. In May 2004, it became apparent that there were problems with certain assumptions concerning the assessment of the groundwater contamination. First, there had been an erroneous assumption that the contamination plume was small and located predominantly on-site. Second, based on well surveys, there was an assumption that there were no human health exposure points in the form of contaminated off-site potable water wells. Significant concerns arose when it became apparent the contamination plume was more extensive than anticipated and had migrated off-site. These concerns were exacerbated when it became apparent that groundwater contamination was impacting off-site potable water wells. Tallevast residents raised concerns that they were being exposed to contamination and that they were never properly notified by the Department, upon the initial discovery of the groundwater contamination. Tallevast residents were also concerned about whether the Department had failed to properly notify then once it was discovered the groundwater contamination had migrated off-site. The problems experienced at Tallevast emphasized to the Department the need to explore available avenues to enhance public notification procedures as a whole.4, 5 The Department asserted as to a reasonable basis in fact for the proposed rules, that contamination affecting Tallevast residents provided an impetus for the Department in May 2004 to address notification of contamination to affected off-site property owners. The situation in Tallevast arose because well surveys failed to indicate the extent of the contamination plume and that residents were using private wells for potable water. The Department's objective was to make sure that if there was exposure potential, the potentially affected parties should be notified. The Department seems to agree that the failure to discover the contamination of the potable wells in Tallevast occurred during the assessment phase of the cleanup and that it had not yet gotten to the stage of determining the remediation strategy. (T 45-46). The Department's stated concerns regarding Tallevast are not specifically addressed by proposed rule 62-770.220(3)(b) and (4). (T 74-75, 95-96). The Department’s procedure for granting a temporary extension of the point of compliance is that the responsible party will propose such an extension in its remedial action plan. (The four cleanup programs provide for the establishment of a TPOC.) The Department will then issue its notice of intended agency action, notice of the agency action will be provided to the enumerated persons, and the persons receiving notice will have a 30-day comment period. (T 149-155). (Pursuant to proposed rule 62-770.220(3)(a), the person responsible for site rehabilitation (PRSR) "shall provide" actual notice "to the appropriate County Health Department and all record owners of any real property into which the point of compliance is allowed to extend . . . ." In this regard, as Mr. Chisolm testified, the process is "similar to a permit.") Mr. Sole testified that, in the course of rulemaking, Florida Petroleum argued to the Department that the "petroleum statute under 376.3071 is different as it addresses the temporary point of compliance. It's not as prescriptive as the other statutory provisions for Risk-Based Corrective Action and the dry-cleaning, the Brownfields, and now the Global RBCA [statutes]. And their concern was that because it's not as prescriptive, [the Department] should not be establishing these additional notice provisions, such as constructive notice . . . But their fear was or concerns . . . were that you're going to engender a lot of litigation that's unnecessary because, as soon as you say the word 'contamination,' somebody is going to want to sue me . . . . And I understood that position. But at the same time, the lessons that we learned were that failure to provide that notice, unfortunately, can cause exposure and can cause a public health concern; and [the Department] needed to balance the two." (T 63-64, 122). Mr. Chisolm testified, in part, about the development of the constructive notice provision in proposed rule 62- 770.220(3)(b) and explained that the global RBCA, brownfields, and drycleaning solvent statutes required constructive notice to residents and business tenants of impacted properties.6 Mr. Chisolm further explained: So, if you're going to give notice to the legal owners of a piece of property, many cases there are tenants there. And they may not get the word, and they may be the ones that are drinking the water. The same with business tenants. So the idea was let's give notice to the people who are going to be or potentially going to be affected by this contamination, which is, after all, under the property which they may be inhabiting and using. So that was the purpose for the rule change in this case. Let's give notice to everybody who could potentially be affected by the rule, by the contamination beyond the property boundaries . . . . The whole idea behind RBCA, Risk- Based Corrective Actions, is that, if there's no exposure, there's no risk. There's no danger to the individual, to any individual. (T 116-117).
Findings Of Fact This case was presented for hearing based upon the request for formal Subsection 120.57(1), Florida Statutes, hearing, made by Arnold S. Rogers, President, One Stop Oil Company. The matters to be considered are as generally indicated in the Issues statement to this Recommended Order. The hearing was conducted on March 10, 1982. The Petitioner, State of Florida, Department of Agriculture and Consumer Services, is an agency of State government which has the obligation to inspect petroleum products in keeping with the provisions of Chapter 525, Florida Statutes (1980). The Respondent is a corporation which sells petroleum products in the State of Florida at an outlet located at 1238 Broward Road, Jacksonville, Florida. On November 25, 1981, a sample of the petroleum product kerosene was taken at the aforementioned location operated by the Respondent, which is known as Station No. 10. A subsequent analysis on December 3, 1981, revealed a "flash point" of 78F. This reading was below the 100F minimum "flash point" as set forth in Rule Subsection 5F-2.01(2)(b), Florida Administrative Code. The results of the analysis were made known to the Respondent on December 3, 1981. Prior to that date, the Respondent was unaware of this reading below standard related to the "flash point." (A second kerosene sample was taken on December 3, 1981. That sample continued to reveal a "flash point" below 100F.) In view of the results of the November 25, 1981, test related to the kerosene at the Respondent's station, a "Stop Sale Notice" was issued to the Respondent. This was issued in keeping with Section 525.06, Florida Statutes (1980). In lieu of confiscation, a bond was posted in an approximate amount, $4,900.00. This bond amount had been prescribed by an employee for the Petitioner by mistake and subsequent to that time, all of the bond amount, with the exception of $1,000.00 was refunded to the Respondent. It is the $1,000.00 amount that remains in dispute at this time. In excess of 1,800 gallons of the contaminated kerosene had been sold prior to the discovery of this problem. The kerosene in the sample tank in question had been contaminated with gasoline and this combination lowered the "flash point." Kerosene with a low "flash point" is a hazardous substance, particularly when burned in kerosene stoves. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Rule Subsection 5F-2.01(2)(b), Florida Administrative Code, makes it a violation to offer for sale kerosene which has a "flash point" of less than 100F. The Respondent offered and in fact did sell kerosene whose "flash point" was established to be 780F, and in the face of such action, violated the aforementioned Rule. This violation would subject the Respondent to the confiscation of the kerosene remaining in the tank in accordance with the penalty provisions set forth in Rule Subsection 5F-2.02 (2)(c) , Florida Administrative Code. In lieu of such confiscation, the Petitioner could accept a bond, not to exceed $1,000.00 which could be converted into a fine, in the face of a finding of a violation of the petroleum standards law. Respondent posted the $1,000.00 bond and that bond amount can be taken as a fine levied against the Respondent for the violation as found. The Petitioner being found in violation, the only matter to be determined is the proper amount of fine to be imposed. The Petitioner is of the persuasion that the full fine should be levied in view of the clear violation; the hazard posed by offering for sale and selling kerosene with a substandard "flash point," and the cost of prosecution to include appearances by consul and witnesses in Jacksonville, Florida, when counsel and those officials were required to travel from Tallahassee, Florida. Respondent, through its representative, detailed the steps that were taken to ensure against a violation of the "flash point" standards related to kerosene. The rendition of facts establishes that the tank in which the subject kerosene had been placed had immediately prior to that placement, contained unleaded premium gasoline. That gasoline had been pumped out; the tank tilted to allow the residue to collect in one confined area and the tank flushed out by water. The delivery tanker, which belonged to the Respondent and which delivered the kerosene, had been used to transport gasoline before that delivery; however, that tanker had been subjected to a purging to remove the gasoline. Respondent was unsure about the condition of the kerosene which had been sold to the Respondent by an outside source and transported by the Respondent's tanker, as this relates to a "flash point" violation prior to delivery. Notwithstanding the efforts by the Respondent to protect against such a violation of "flash point," Respondent concedes that as much as one quarter inch of gasoline residue could have remained in the storage tank at the time kerosene was offered for sale and sold. While Respondent recognizes that the violation established herein is one which does not require proof of "intent" in order to be found responsible for such violation, Respondent, nonetheless, asks that the fine be less than the full $1,000.00, particularly so in the face of the depressed market conditions related to its business. Finally, Respondent, in answering Petitioner's argument related to the cost of prosecution, states that it would have attended a hearing in Tallahassee, Florida, if necessary. Based upon a full consideration of the facts, conclusions of law and matters in aggravation and mitigation, it is RECOMMENDED: That a final order be entered finding the Respondent in violation of Rule Subsection 5F-2.01(2)(b), Florida Administrative Code, and subjecting Respondent to the penalties set forth in Section 525.06, Florida Statutes (1980), and imposing a fine of $750.00, with $250.00 of the bond amount to be refunded to the Respondent. DONE and ENTERED this 19th day of March, 1982, in Tallahassee, Florida. CHARLES C. ADAMS 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 19th March, 1982.
The Issue Whether Petitioner is entitled to participate in the Reimbursement Program established under the State Underground Petroleum Environmental Response (SUPER) Act of 1986 for the petroleum terminal owned by Gulf Products Division of BP Oil Company at Port Everglades, Florida.
Findings Of Fact The State Underground Petroleum Environmental Response (SUPER) Act of 1986 provides for the expeditious cleanup of sites contaminated as the result of storage of petroleum or petroleum products. The Reimbursement Program, found in Section 376.3071(12), Florida Statutes, provides for reimbursement of the allowable costs of site rehabilitation contaminated as a result of a discharge related to the storage of petroleum or petroleum products from a storage tank, or its integral piping or dispensing system. The Reimbursement Program does not provide for reimbursement of cleanup costs for discharges related to the transportation or disposal of petroleum or petroleum products. The site at issue in this proceeding is a terminal facility used for the storage of petroleum and petroleum product located at 1500 Southeast 26th Street, Port Everglades, Florida. This facility is referred to as Gulf Facility No. 46888 and DER Facility No. 068732278 (Gulf Terminal). The subject terminal facility is one of fourteen petroleum storage terminals located at Port Everglades, Florida. Petroleum and petroleum products come to the terminal by ship and are pumped from the ship through permanent pipelines to the large aboveground storage tanks located at the facility. The petroleum and petroleum products are stored in these large tanks until it is time for the product to be distributed to the end user. The Gulf Terminal contains eighteen storage tanks whose total capacity is 650,000 barrels of petroleum or petroleum products. These tanks vary in size, with the smallest having a capacity of 10,000 barrels and the largest having a capacity of 80,000 barrels. One barrel equals 42 gallons. The primary activity of the terminals at Port Everglades is to store petroleum or petroleum products. None of the terminals at Port Everglades, including the Gulf Terminal, refines or produces petroleum or petroleum products. Operation of this facility began in 1946. Petitioner, as the successor to the Gulf Oil Corporation, owned and operated the facility until February 1, 1985, when it sold the facility to BP Oil, Inc. As the previous owner of the facility, Petitioner performed an environmental audit which revealed petroleum hydrocarbon contamination at the site. Petitioner is responsible for the cleanup and is entitled to reimbursement of the allowable costs of the cleanup if the site is eligible to participate in the reimbursement program. Any contamination of the soil and groundwater at the site was caused by discharges of petroleum or petroleum products, water contaminated with petroleum or petroleum product or sludges which consist predominately of petroleum or petroleum product constituents. Based on hydrogeological assessment information, Petitioner determined that response action, including ground water cleanup activities, was required at the site. Petitioner hired independent contractors to conduct the response action. In 1986, Petitioner designed a recovery system for petroleum and petroleum product and a ground water treatment system at the site. Through February, 1989, the recovery system had recovered over 12,000 gallons of petroleum or petroleum products, which constitutes the recovery of between 60%- 70% of the total amount in the ground. Through November 1989, Petitioner had expended in excess of $560,000 on its response action at the Gulf Terminal. Petitioner advised Respondent of its response action at the site by letter dated January 6, 1988. Petitioner submitted documentation to Respondent concerning hydrogeological assessment at the site which included field and laboratory work and investigation performed for the site from 1984 to the present. Pursuant to the requirements of SUPER Act, Petitioner notified Respondent of its intention to seek reimbursement for money spent conducting response action in accordance with Chapter 17-70, Florida Administrative Code, with regard to petroleum and petroleum product contamination at the site. Petitioner's notice to Respondent was timely and was procedurally correct. On July 13, 1989, Respondent issued its Order of Determination of Ineligibility concerning Petitioner's request for reimbursement. As stated in this order the initial basis for Respondent's denial of eligibility was: The determination is based on the fact that the contamination was not related to the storage of petroleum or petroleum products. Sources of contamination at this site include tanker trucks, an oil/water separator, a holding pond, and crude oil and tank-bottom sludge disposal pit. These items are not petroleum storage systems as defined in Section 376.301 F.S. therefore (sic), this site is not eligible for reimbursement under the SUPER Act. ... Respondent clarified its Order of Ineligibility by a Notice to Amend and Clarify dated November 14, 1989, which provides, in pertinent part, as follows: The notice of denial provides that the site is being denied due to the fact that the disclosed sources of contamination are not petroleum storage systems. One of the criteria for being a petroleum storage system is that it be used or intended to be used for storage of petroleum or petroleum product. It is the criteria that the Department contends is not met in this case; i.e., that the discharges were not intended for storage. Section 376.3071(4), Florida Statutes, specifically limits the use of the Environmental Protection Trust Fund to incidents of inland contamination related to storage of petroleum or petroleum product. * * * The Department recently became aware that prior to 1983, contaminated water was disposed of directly from tanks at the site with no pretreatment by an oil/water separator. As with the disposal of oil and sludge to a pit, the act of intentionally disposing of contaminants to the ground is not "related to storage" as required by Chapter 376, Florida Statutes. * * * Wherefore, The State of Florida Department of Environmental Regulation hereby requests that the Hearing Officer allow for the amendment of the notice of denial of eligibility to include the following basis for denial: Contamination at the site is related to the disposal of petroleum or petroleum product, or water contaminated with petroleum or petroleum products. Disposal activities including the intentional discharge and disposal of contaminated water and/or fuel from tanks, oil water separators and sump areas, the intentional discharge and disposal of contaminated water to a percolation pond, the intentional discharge and disposal of oil and sludge to a disposal pit, and the intentional discharge and disposal of fuel to the ground at the loading rack. Among the causes of contamination of the Gulf Terminal are accidental overfills of tanks and leaks from an integral pipeline. Absent any other source of contamination, the discharges that occurred at the Gulf Terminal due to these causes would be eligible for the reimbursement. Respondent has determined, however, that the following additional sources of contamination render the entire response action ineligible for reimbursement: Discharges of dissolved hydrocarbon molecules contained in water which accumulated in storage tanks; Discharges of petroleum or petroleum products at the loading rack at the terminal; and The discharge of crude oil and of crude oil tank bottoms. TANK OVERFILL During the operation of the Gulf Terminal, petroleum and petroleum products have been accidentally discharged onto the ground. In 1955, an unknown quantity of petroleum or petroleum products was accidentally discharged onto the ground in the areas of tanks 104 and 105 as a result of these tanks being over- filled. Following this massive spill, between 5,000 - 10,000 barrels of product was recovered, while an unknown quantity could not be recovered. PIPELINE LEAK Since 1955, approximately 15,000 additional barrels of petroleum or petroleum products were leaked from an underground pipeline that is integral to the storage system in an area between the loading rack and tank 101, extending toward the west to between tanks 110 and 102. This is the vicinity where the heaviest free floating petroleum contamination exists. DISCHARGE OF CONTAMINATED WATER Florida has adopted the standard code for the design of aboveground storage tanks prepared by the American Petroleum Institute (API-650). The tanks at the Gulf Terminal are in compliance with API-650. The accumulation of water in storage tanks is a problem associated with the storage of petroleum or petroleum products in the storage tanks at the Gulf Terminal and at the other terminals at Port Everglades. Water accumulates in the storage tanks from rainfall and from condensation. The records of the US Department of Commerce, National Oceanic and Atmospheric Administration for Station 08063163 (Fort Lauderdale, Florida) accurately depict the rainfall levels at the terminal facility. The total annual rainfall levels are as follows: 1980, 69.67 inches; 1981, 57.9 inches; 1982, 82.92 inches; 1983 75.16 inches; 1984, 59.4 inches; 1985, 63.74 inches; 1986, 64.14 inches, 1987, 58.50 inches; 1988 40.66 inches. Because water is heavier than petroleum and petroleum products, the water accumulates at the bottom of the tanks. It is essential to the proper storage of the petroleum or petroleum products that the water be removed for at least three reasons. First, if the water is not removed, the tanks would eventually become filled with water instead of product. Second, the product contaminated by water, particularly fuel for motor vehicles and aircraft, would not meet specifications. Third, water in the tanks speeds the corrosion of the tank. In order to remove this water that accumulates at the bottom of the storage tanks, a water draw-off mechanism located at the bottom of the tank is a design feature of API-650. When water accumulates in the bottom of the tank, the water is drained out through the water draw-off mechanism. The storage tanks located at the Gulf Terminal are equipped with such a water draw-off mechanism. Throughout the existence of the facility, accumulated water in the tanks has been controlled by discharging the water through the water draw-off mechanism. From 1948 to 1980, water was drained out of the tanks through the water draw-off mechanism and on to the ground. Beginning in 1980, the water was taken from the tanks through the water draw-off mechanism and piped to a catch basin where an effort was made to recover petroleum product by skimming the water before the water was discharged into the ground. Since 1985, the water taken from the tanks through the water draw-off mechanism has been treated by an oil/water separator which effectively removes all petroleum product before the water is discharged. The purpose of the oil/water separator is to separate petroleum product from water so that the petroleum product can be returned to the storage tank and the water can be discharged. This process serves to prevent the discharge of petroleum product. Up to 1988, the discharges to the ground from the oil/water separator at the Gulf Terminal accumulated in a holding pond. In 1988, the holding pond was eliminated and the water discharges from the oil/water separator were routed to a holding tank prior to treatment by an air stripper and subsequent discharge into the canal adjacent to the property. At all times since 1983, the water drawn out of the tanks has been the subject of permits issued by Respondent which approve the use of the oil/water separator. While it is necessary for the operation of the storage tanks that water be drawn from the tanks, it is not necessary for the operation of the storage tanks for the contaminated water to be discharged onto the ground. The purpose of discharging the water was to dispose of it. There was no intent to recover the contaminated water after it was discharged. Any water coming out of a storage tank is contaminated with dissolved petroleum. It may have solids in it and floating residue or product on it. Between 1946 and 1980, when this water from the storage tanks was discharged to the ground, any contaminates in the water would be discharged along with it. Water has been drained from tanks numbered 101, 106, 109, 110, 111, 112 113, and 114 on a daily basis. The other tanks are drained after a rainfall. An average of one or two inches of water was drained off each time it rained. Following a rainfall, in excess of 30 barrels of water would be drained from the smaller tanks, while approximately 300 barrels of water would be drained from the larger tanks. The discharge of the water drawn from the storage tanks contributed to the contamination of the groundwater at the Gulf Terminal. This type contamination exists in almost all areas of the site. Petitioner was unable to distinguish the contamination to the groundwater caused by the discharge of contaminated water drawn from the storage tanks from contamination to the groundwater which resulted from other causes. Petitioner failed to establish that the contribution to this contamination to the groundwater by the discharge of the contaminated water drawn from the storage tanks was insignificant. THE LOADING RACK The loading rack at the Gulf Terminal is the apparatus by which the petroleum in the storage tanks is dispensed to tanker truck for distribution to consumers. The loading rack is a series of dispensers which operate much like at a service station except that it fuels tanker trucks rather than automobiles. The loading rack is connected by permanent integral piping to the storage tanks. The purpose of the loading rack is to load the transport trucks. Without the storage tanks at the terminal, there would be no need for a loading rack. Over the years, discharges have occurred in the loading rack, usually as the result of human error. Occasional overfills in the 10-15 gallon range have occurred while a truck was being filled. This type discharge is analogous to a spill which occurs at a service station when an automobile is being fueled and the fuel splashes back or overfills the automobile's fuel tank. The supervisor of Respondent's Reimbursement Section testified that this type discharge, absent other causes, would probably be eligible for reimbursement. This testimony conflicts with the official position taken by Respondent in this proceeding that the cleanup caused by the operation of the loading rack is ineligible for reimbursement. In other incidents, small amounts of product ranging from a teacup to less than a gallon, were occasionally discharged while a truck was being drained of one type of product so that the truck could transport another type of product. The loading rack is an integral part of the storage system because without a means of moving the product out of storage and into the distribution system, the storage tanks could not provide a meaningful function. The discharges which occurred at the loading rack during the course of both loading and unloading trucks are insignificant when compared with the other sources of contamination at the site. TANK BOTTOMS In 1956, a storage tank was emptied for the purpose of switching product from crude oil to diesel fuel. At the time the change in product was made, approximately 1000 barrels of sludge and crude oil were disposed of in a pit adjacent to tank 101. Also disposed of was the tank bottom, a hard tar residue which formed at the bottom of the tank. Oil occasionally oozes to the surface in the vicinity of the pit adjacent to tank 101, but the area around the sludge pit has not been found to be contaminated, and the tank bottom has remained a hardened mass. Each tank on the site also had a pit alongside the tank where a tank bottom was disposed. Although it was necessary to remove the sludge and the tank bottoms to be able to properly operate the storage tanks, it was not necessary for the operation of the storage tanks to dump the sludge and the tank bottoms onto the ground or into the pits. The purpose of discharging the crude oil sludge and the tank bottoms was to dispose of them. There was no intent to recover the crude oil sludge or the tank bottoms water after they were discharged. CONTAMINATION PHASES The contamination at the site exists in three phases, floating petroleum product contamination, dissolved petroleum groundwater contamination, and sludge contamination. The contamination in the form of floating petroleum was caused by discharges of petroleum or petroleum products following the tank overfills, the pipeline leaks, and spills at the loading rack. The dissolved groundwater contamination was caused by two primary sources. First, the dissolved groundwater contamination was caused by floating petroleum product coming into contact with groundwater. Upon such contact, molecules from the floating petroleum would dissolve into the water, causing contamination. Second, the dissolved groundwater contamination was caused by the discharge of the contaminated water that had been drawn off from the storage tanks. Petitioner was unable to distinguish the dissolved groundwater contamination that was caused by accidental discharges of product from the contamination caused by the discharge of the contaminated water. Petitioner was also unable to establish that the dissolved groundwater contamination caused by the contaminated water was insignificant. The sludge contamination was caused by the discharge of crude oil and crude oil tank bottoms. CLEANUP The sludge contamination is capable of being cleaned up separately from the free floating petroleum contamination and the groundwater contamination at the site. The sludge contamination is separate and distinct from the other contamination at the site both as to the location of the contamination and as to the methods that would be employed to clean up that type of contamination. Free floating petroleum contamination is recovered by drawing down the water level in a well by use of a pump so that a cone of depression is created. The cone of depression is a funnel shaped depression that causes the surface of the underground water table to bend down towards the well in all directions. The free floating petroleum which flows on top of the underground water surface is then recovered by use of a second pump. The free floating petroleum is then pumped into a holding tank where the recovery of free floating petroleum is completed. The recovery of free floating petroleum contamination is usually more expensive to accomplish than groundwater cleanup because more equipment is required. Groundwater cleanup usually takes a longer period of time to accomplish than does free floating product cleanup. The same or a similar well used to recover the free floating petroleum can also be used for the cleanup of contaminated groundwater. The contaminated groundwater is pumped from the well into an oil/water separator where the water and dissolved petroleum is separated, water is taken off the bottom, put through an air stripper, and is returned to the ground through an infiltration unit. Respondent has previously found sites eligible for the reimbursement program even though those sites experienced discharges which alone would render a site ineligible for the reimbursement program. The basis for finding these sites eligible was that the ineligible discharges had become indistinguishable from the eligible discharges and were insignificant by comparison. Petitioner has complied with all procedural requirements for seeking eligibility contained in Section 376.3701, Florida Statutes. Respondent has not been denied access to the Gulf Terminal. Respondent has made no determination that there has been gross negligence in the maintenance of the petroleum storage system locate at the Gulf Terminal. Petitioner has not willfully concealed the existence of a serious discharge at the Gulf Terminal. Petitioner has not falsified any inventory records maintained with respect to the Gulf Terminal. Petitioner has not caused any intentional damage to the Gulf Terminal. The Gulf Terminal is not owned by the federal government. Petitioner's challenge to Respondent's order of ineligibility was filed in a timely manner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is Recommended that Respondent enter a final order which determines that the subject site is eligible to participate in the reimbursement program for the cleanup of the free floating petroleum contamination, but that the subject site is ineligible to participate in the reimbursement program for the cleanup of the sludge contamination and for the cleanup of the groundwater contamination. RECOMMENDED this 20th day of July, 1990, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of July, 1990. APPENDIX TO RECOMMENDED ORDER, CASE 89-4521 The following rulings are made on the proposed findings of fact submitted by Petitioner in its Supplemental Proposed Recommended Order. The proposed findings contained in paragraphs 1-16, 18-25, 27-30, 33, 36-42, 44, 47-50, and 53-54 of the Supplemental Proposed Recommended Order are adopted in material part by the Recommended Order. The proposed findings contained in paragraphs 17, 31-32, 46, and 51-52 of the Supplemental Proposed Recommended Order are rejected as being contrary to the findings made and to the conclusions reached. The proposed findings contained in paragraph 26 of the Supplemental Proposed Recommended Order are adopted in part and are rejected in part as being unnecessary to the conclusions reached. The proposed findings contained in paragraph 34 of the Supplemental Proposed Recommended Order are rejected as not being established by the greater weight of the evidence. The testimony cited by Petitioner in support of these proposed findings do not establish the proposed findings. The proposed findings conflict with the contents of the Report of Ground-Water Quality Assessment accepted into evidence as Respondent's Exhibit 1. The proposed findings contained in paragraphs 35 , 43, and 45 of the Supplemental Proposed Recommended Order are rejected to the extent the proposed findings conflict with the findings made and the conclusions reached. The following rulings are made on the proposed findings of fact contained in Respondent's Proposed Recommended Order and in Respondent's Supplemental Proposed Recommended Order. The proposed findings of fact in paragraphs 1-5, 7-19, 23, 25-31, 33-34, 39- 52, 55-68, and 70-72 of Respondent's Proposed Recommended Order are adopted in material part. The proposed findings of fact in paragraphs 6, 20-22, 24, 32, 35-38, and 69 of Respondent's Proposed Recommended Order are rejected as being subordinate to the findings made or to the conclusions reached. The proposed findings of fact in paragraphs 53 and 54 of Respondent's Proposed Recommended Order are rejected because the testimony referred to by Respondent in support of the proposed findings relates to amounts discharged following rainfalls, not amounts discharged daily. The proposed findings of fact in paragraphs 1-14 of Respondent's Supplemental Proposed Recommended Order are rejected as being subordinate to the findings made or to the conclusions reached. COPIES FURNISHED: E. Gray Early, Esquire Assistant General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Robert W. Wells, Esquire Ignacio E. Sanchez, Esquire KELLEY, DRYE & WARREN 2400 Miami Center 201 South Biscayne Boulevard Miami, Florida 33131 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
The Issue The issues in this case are whether Respondent, L.B. King, Jr., violated certain rules relating to petroleum contamination site cleanup criteria promulgated by Petitioner, Department of Environmental Protection (Department), whether he should be required to pay an administrative fine and investigative costs and expenses incurred by the Department, and whether he should take corrective action, as described in the Department's Notice of Violation, Orders for Corrective Action, and Administrative Penalty Assessment (Notice of Violation) issued on June 15, 2007.
Findings Of Fact Based upon the record presented by the parties, and those allegations in the Notice of Violation which are undisputed, the following findings of fact are determined: Respondent is the owner and operator of non-residential property (doing business as King Oil and Tire) located at 16776 Southeast U.S. Highway 19 (at Main Street and Ward Street) in Cross City, Florida. He has owned the property since June 30, 1982. Since July 1978, eight regulated petroleum storage tanks were situated on the property. See Fla. Admin. Code R. 62- 761.200(20), (45), (53), and (65). The Department has assigned facility identification number 15/8839661 to the site. During the intervening time period since Respondent assumed ownership, six of the tanks and their associated piping have been closed or removed, including tank 4 in August 1997 and tanks 5 and 6 in March 2004. Tank 4 was a 1,000 gallon diesel underground storage tank system (UST) originally installed in July 1982, tank 5 was a kerosene UST installed in July 1978, while tank 6 was a waste oil UST installed in July 1978. Only tanks 7 and 8 still remain in service. After tank 4 and the associated piping were closed in August 1997, Respondent conducted a closure assessment in the area of tank 4 and performed soil and groundwater analytical sampling in the area of its former piping run. He then filed a Tank Closure Assessment Report (TCAR) with the Department on August 19, 2003. The TCAR revealed groundwater contaminants above the Department's Cleanup Target Levels (CTLs) for Methylnapthalene in two respects and for Naphthalene. See Fla. Admin. Code R. 62-777.170(1)(a), Table I. Because of the presence of contamination on the site, on September 3, 2003, the Department sent Respondent a letter requesting that he submit a Discharge Report Form (DRF) and initiate a site assessment, as required by Florida Administrative Code Rule 62-770.600, and that he file a completed site assessment report by July 10, 2004.3 Subsection (1) of that rule requires that "[w]ithin 30 days of discovery of contamination, the responsible party shall initiate a site assessment." On September 29, 2003, the Department received the requested DRF. During a tank closure inspection of tanks 5 and 6 performed on March 4, 2004, the Levy County Health Department, acting on behalf of the Department, discovered stained soils in the fill area of tank 6. On May 18, 2004, the Department received a TCAR dated May 7, 2004, for the closure of tanks 5 and 6. The TCAR documented the results of laboratory analytical tests on groundwater samples, which revealed groundwater contaminants above the Department's CTLs for Methylnapthalene in two respects. On May 24, 2004, the Department received from Respondent a copy of a DRF (dated March 9, 2004, as amended on April 9, 2004) for the contamination related to tanks 5 and 6. The DRF was the last report filed by Respondent concerning tanks 5 and 6. On the same date, the Department sent Respondent a letter requesting that he initiate site assessment activities for the discharge related to tanks 5 and 6, as required by Florida Administrative Code Rule 62-770.600(1). On July 14, 2004, the Department sent Respondent another letter requesting (a) completion of a site assessment and (b) the submission of a Site Assessment Report (SAR) for the discharge from tank 4 (SAR-97), which complied with the requirements of Florida Administrative Code Rule 62-770.600(8). (The SAR-97 was originally due on July 10, 2004, but had not yet been filed.) In order to be deemed complete, a SAR must contain all of the information detailed in subsection (8). Also, the letter requested that a SAR for the 2004 discharge (SAR-04) be completed no later than August 1, 2004, as required by Florida Administrative Code Rule 62-770.600(7). That subsection requires in relevant part that "[w]ithin 270 days of discovery of contamination, the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SAR] " On July 15, 2004, or the day after the above letter was mailed, the Department received a copy of the SAR-97 from Respondent. The report was then referred to the Department's Petroleum Cleanup Section for its review. By letter dated August 27, 2004, the Department advised Respondent that SAR-97 was under review. The letter also changed the due date for the SAR-04 from August 1, 2004, to November 9, 2004. On September 15, 2004, the Department received correspondence from Respondent requesting an extension of time in which to submit his SAR-04. On December 10, 2004, the Department approved the request and authorized Respondent to file a SAR-04 no later than March 1, 2005. On April 12, 2005, Respondent filed with the Department a Site Assessment Report Addendum (SARA) for the 1997 discharge (SARA-97). The report was dated March 1, 2005. On May 25, 2005, the Department sent Respondent a letter requesting that he file two copies of a supplement to the SARA-97 no later than July 5, 2005, to address certain deficiencies noted in that report, as required by Florida Administrative Code Rule 62-770-600(11). That subsection provides that "[i]f the [SAR] is incomplete in any respect, or is insufficient to satisfy the objectives of subsection 62- 770.600(3), F.A.C., the Department or the FDEP local program shall inform the responsible party pursuant to paragraph 62- 770.600(9)(b), F.A.C., and the responsible party shall submit to the Department or to the FDEP local program for review two copies of a [SARA] that addresses the deficiencies within 60 days after receipt of the notice." The same letter also requested that a disposal manifest be provided for the tank and piping closures. On July 11, 2005, the Department received a second SARA-97 from Respondent's consultant. On July 14, 2005, it also received the disposal manifest documentation for the closure of tank 4 and its piping. These were the last reports filed by Respondent. On October 4, 2005, the Department sent Respondent a letter requesting that he provide two copies of a third SARA for the 1997 discharge to address deficiencies noted by the Department in the second SARA. The letter indicated that the third SARA was to be filed no later than November 23, 2005. The Department also requested that he provide a completed financial affidavit to justify Respondent's claim that he was financially unable to complete the remaining required cleanup corrective actions at his property. On November 29, 2005, Respondent requested an extension of time to complete the third SARA-97. (The reason for the requested extension was that Respondent's insurance carrier would not give authorization for the work.) On January 12, 2006, the Department advised Respondent by letter that his request had been denied and that he must submit either the third SARA or a financial affidavit, as previously requested, no later than February 15, 2006. In its response, the Department indicated that it did not "consider generic delays by contractors or insurance carriers as good cause for an extension." To date, neither filing has been made. By failing to file the requested third SARA for the 1997 discharge, Respondent has contravened the requirements of Florida Administrative Code Rules 62-770.600(11) and 62- 770.800(3), which require that within 60 days after notice, a responsible party submit a SARA to address deficiencies noted in a SAR. Respondent's conduct also implicates Florida Administrative Code Rule 62-770.800(5), which makes it a violation of two Florida Statutes for a responsible party to not submit requested information within the time frame specified. Since March 1, 2005, which was the due date on which a report was to be filed, Respondent has failed to submit an approved SAR for the 2004 discharge, as required by Florida Administrative Code Rule 62-770.600(7), which in turn contravenes Florida Administrative Code Rule 62-770.800(3) and (5). To date, Respondent has failed to complete site assessment activities for both the 1997 and 2004 discharges, as required by Florida Administrative Code Rule 62-770.600(10). That provision states that "[s]ite assessment activities shall not be deemed complete until such time as a [SAR] is approved." To date, Respondent has failed to timely and completely assess and remediate the contamination at his property, as required by Florida Administrative Code Rule Chapter 62-770. That chapter contains the criteria which apply to the cleanup of a site contaminated with petroleum products. During the course of its investigation of this matter, the Department has incurred expenses "in the amount of not less than $500.00." As mitigating evidence, Respondent offered into evidence Respondent's Exhibits 2-15, the majority of which pertain to his insurance policy and the pending litigation with his carrier, Mid-Continent Casualty Company (MCC), or the priority score funding process, which is the process by which contaminated properties are scored or rated for purposes of determining eligibility to receive state cleanup funds when the responsible party is financially unable to do so. Although evidence regarding the insurance policy and pending litigation was deemed to be immaterial to the issues of establishing Respondent's liability for the violations and responsibility for undertaking the corrective actions necessary to satisfy the violations, the undersigned ruled that it could be used by Respondent as mitigating evidence, if relevant, for the purpose of seeking to reduce the administrative penalty. Respondent's Exhibits 8, 9, and 11 indicate that after he reported the 2003 discharge to MCC, in 2003 the carrier denied coverage for that discharge (on the ground "any 'confirmed release' must commence after the retroactive date of the policy (4/3/98)"). However, MCC initially accepted coverage for the 2004 discharge and authorized Respondent's environmental consultants to conduct a site assessment. The documents further show that in December 2005, or before the 2004 site assessment had been completed and a SAR prepared, MCC reversed its position and denied coverage for the 2004 discharge on the ground there was no "Confirmed Release," as defined by the policy. Respondent then filed his lawsuit seeking a determination that the carrier was responsible for cleanup costs. Respondent asserts that he has expended more than $50,000.00 in pursuing the lawsuit, which is much more than the administrative penalty being assessed by the Department. Respondent points out that prior to the time MCC reversed its position as to coverage for the 2004 discharge in December 2005, he had filed a DFR, TCAR, disposal manifest, SAR- 97, and two SARAs for the 1997 discharge, and a TCAR and DFR for the 2004 discharge, all of which indicate a good faith effort on his part to comply with the assessment requirements. As noted above, the final reports prepared by Respondent's consultant were a second SARA-97 and a disposal manifest for the 1997 discharge, which were filed with the Department in July 2005, and a TCAR and DRF for the 2004 discharge filed in May 2004. Respondent's Exhibit 10A recites language in Coverage B of the insurance policy, which provides in part that MCC "will pay Clean-up Costs by an Insured for environmental damage that an Insured is legally obligated to pay . . . ." Respondent argues that if he acknowledges by affidavit or other proof that he does not have the ability to pay for cleanup costs, he fears that under the above language, MCC would not be "legally obligated to pay." This is because Section 376.3071(7)(c), Florida Statutes, provides that when a responsible party does not have the ability to pay for all of the cleanup costs, the Department "may" enter into an agreement with the responsible party to undertake all or part of the site rehabilitation after "taking into consideration the party's net worth and the economic impact on the party." Respondent contends that if he files an affidavit under this statute, MCC would then be relieved of any responsibility under the policy, and his rights in the lawsuit would be jeopardized. Respondent further points out that several other provisions in the insurance policy prohibit him from completing the assessment until the litigation is concluded. For example, one provision (Section II.B) provides that "No Clean-up Costs, charges, and expenses shall be incurred without the Company's consent," while another (Section II.C) provides that "An Insured shall not admit or assume any liabilities or settle any Claim(s) without the Company's consent." Respondent asserts that these provisions prevent his consultant from conducting any further work on the site without MCC's consent, and if he does so, he will lose the right to reimbursement under the policy. Finally, Exhibits 3 through 6 show that Respondent's property has been assigned a site ranking score of ten points, and that the Department is currently funding sites that are eligible for state restoration funding only if they have scores of 37 points and higher. Thus, Respondent argues that a delay in remediation of the site is not unreasonable. Except for the two discharges at issue in this case, there is no evidence that Respondent has a history of non- compliance or that he gained any direct economic benefit by virtue of the discharges. Although no reports have been filed since July 2005, through counsel, Respondent has kept the Department abreast of his efforts to establish liability on the part of MCC so that the site assessments can resume.
The Issue The issue in this case is whether Petitioner's site located at 13292 N.W. 118th Avenue in Miami, Florida is eligible for reimbursement of the costs of petroleum contamination cleanup pursuant to Section 376.3071(12), Florida Statutes.
Findings Of Fact Petitioner Rinker Material Corporation ("Rinker") owns and operates a site known as the Rinker FEC Quarry located at 13292 N.W. 118th Avenue, Miami, Florida 33127 (the "site"). At the Site, Rinker operated three (3) one thousand (1,000) gallon tanks which stored waste oil, virgin oil and hydraulic fluid. The DER Facility ID Number for the Site is 138628827. On December 2, 1988, Petitioner, as part of a tank replacement program that it was attempting to conduct in compliance with the applicable state and county regulations, began excavating the three underground storage tanks at the Site. During the excavation, a visible sheen was discovered. At the time of the excavation on December 2, 1988, Alan Gillespie of the Dade County Environmental Resource Management (DERM) was present to conduct a closure inspection of the Site. The December 2, 1988 closure inspection was conducted for Dade County DERM in its own capacity and not as an agent for DER. The purpose of the December 2, 1988 visit by Alan Gillespie was to inspect the removal and closure of the three 1,000 gallon tanks containing, respectively, waste oil, new oil and hydraulic fluid. Mr. Gillespie's inspection indicated that, while there appeared to be no holes in the tanks, free product was visible. Mr. Gillespie noted in his inspection report, dated December 2, 1988, that the contamination was not caused by a tank leak, but, instead, by overspills caused by the pouring of waste oil into the tank, spilling locally around the riser and then contaminating the soil around the tank. Rinker took samples at the Site and submitted them to a laboratory for analysis. It is not clear when the laboratory report was returned, but it generally takes two (2) weeks to obtain the laboratory analysis. Upon receipt of the laboratory report, Rinker initiated its efforts to apply for participation in the Inland Protection Trust Fund for reimbursement or site rehabilitation. In order to participate in the Inland Protection Trust Fund, an applicant was required to submit an Early Detection Incentive Program Notice (the "EDI Form") to DER prior to midnight on December 31,. 1988. The back of the EDI Form states that the form must be filed with and received by DER during the 15 month grace period beginning July 1, 1986 and ending October 1, 1987. The EDI program was; originally scheduled to end on September 30, 1987. However, the deadline for filing was extended by the legislature to December 31, 1988. The EDI Notification Form was not amended to change the dates to reflect subsequent amendments to the reporting date made by the legislature. While the back of the EDI Application Form indicates that the notification form must be filed with and received by DER on or prior to the initial deadline, DER considered as timely all applications with a postmark on or before the extended deadline of December 31, 1988. Petitioner's EDI Form for the Site was prepared by William Voshell, environmental manager for Rinker. Mr. Voshell was out of the state during the last few days of December, 1988. Petitioner's EDI Form was reviewed and signed by William Payne as Vice President of Real Estate for Rinker, on Friday, December 30, 1988. William Payne was informed by Mr. Voshell that the EDI Forms needed to be sent out before the end of the year. A cover letter accompanying the EDI Form for the Site was signed for Mr. Voshell by his secretary, Linda Vasquez on December 30, 1988. After signing the EDI Form, William Payne returned the application to Linda Vasquez to "process to mail". He reminded her that it had to be mailed that day. Ms. Vasquez placed the EDI Form and the cover letter in the Petitioner's mail system on December 30, 1988. The Certified Mail Number P 533059801 appears on the envelope containing Petitioner's EDI Form. January 3, 1989 was the first business day of 1989. The envelope containing the EDI Form was postmarked January 3, 1989. A certified mail return receipt attached to the envelope containing the EDI Form and cover letter shows that the return was stamped by the post office on January 3, 1989. The postal receipt for the EDI Form and cover letter was returned to Rinker from the post office on January 3, 1989. DER received Petitioner's EDI Form for the Site on January 9, 1989. Petitioner's normal procedure is to internally meter regular mail and affix a postmark date. However, certified or registered mail is metered and taken to the post office for processing. Registered mail received in the Petitioner's mailroom on December 30, 1988 should have been metered and taken to the post office for processing the same day or at the latest the next business day (December 31st, a Saturday). After the EDI Form was filed but prior to the eligibility determination, Petitioner was required to submit Site characterization information and documentation of the Site conditions before the initiation of cleanup. The evidence did not establish the expense or costs incurred by Rinker in gathering this information. Prior to ruling on Petitioner's EDI application, DER, through DERM, conducted an eligibility inspection at the Site. Alan Gillespie of DERM conducted the EDI eligibility inspection on April 20, 1989. During an EDI inspection, the inspector examines and reports on the existing conditions of a facility including: recordkeeping, the age of the tanks and the conditions of the monitoring wells and whether there is any negligence involved with the contamination that has occurred. During the April 20, 1989 inspection, Alan Gillespie reported that the three 1,000 gallon underground tanks had been removed and replaced with a new aboveground petroleum storage system. On the EDI inspection report, Mr. Gillespie reported evidence of soil contamination and/or recent product loss and noted that such contamination was discovered at the time of tank removal. After completion of the April 20, 1989 inspection report, Mr. Gillespie's supervisor at DERM sent the report to DER in Tallahassee. In 1989, final Early Detection Incentive Program or Reimbursement Program eligibility determinations were made in Tallahassee by DER. At the time of the EDI eligibility inspection of the Site on April 20, 1989, the role of Dade County DERM was only to conduct an EDI inspection at the site and to forward the information to Tallahassee. Prior to making an eligibility determination on the Site, Patricia Dugan, Environmental Administrator of the DER Petroleum Cleanup Reimbursement Section, reviewed the EDI application, the inspections from DERM, documentation of the site conditions prior to initiation of cleanup and the envelope that the application came in. On November 23, 1989, DER issued an order finding the Site to be ineligible for participation in the Reimbursement Program. Initially, Petitioner's reimbursement application was deemed ineligible because of mixed contamination (i.e., the Site contained used oil) and because the application was deemed untimely. Subsequent to the date of the denial, certain legal decisions made it clear that, contrary to DER's position, sites containing used oil were eligible for participation in the Reimbursement Program. Thus, the only remaining predicate for DER's denial of Rinker's application is that the application was not timely filed. Because Petitioner's EDI application was postmarked on January 3, 1989, after the December 31, 1988 statutory deadline, the Petitioner's application was deemed untimely by DER. DER's policy of relying on the postmark date for purposes of determining timeliness was informally arrived at in 1987. DER has never promulgated a rule on this matter nor conveyed its interpretation to affected parties. Petitioner could have and would have internally placed a postmark date of December 30, 1988 on the envelope containing the EDI Form had it been aware of DER's policy.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Environmental Regulation enter a Final Order approving Petitioner's application for eligibility under the state's reimbursement program. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 23rd day of July, 1990. J. STEPHEN MENTON 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 23rd day of July, 1990. APPENDIX Both parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties. The Petitioner's Proposed Findings of Fact: Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. Adopted in substance in Findings of Fact 1. Adopted in substance in Findings of Fact 3, 9 and 10. Adopted in substance in Findings of Fact 17 and 20. Adopted in substance in Findings of Fact 20. Adopted in substance in Findings of Fact 26. Adopted in substance in Findings of Fact 22, 36, 37 and 38. Adopted in substance in Findings of Fact 37 and 38. Adopted in substance in Findings of Fact 40. Adopted in substance in Findings of Fact 41. Rejected as constituting argument rather than a finding of fact. Rejected as argument rather than a finding of fact. The Respondent's Proposed Findings of Fact: Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. Adopted in substance in Findings of Fact Adopted in substance in Findings of Fact 2. Adopted in substance in Findings of Fact 25. Adopted in substance in Findings of Fact 22. Adopted in substance in Findings of Fact 21. Adopted in substance in Findings of Fact 17. Adopted in substance in Findings of Fact 16. Adopted in substance in Findings of Fact 18. Adopted in substance in Findings of Fact 19. Adopted in substance in Findings of Fact 20. Adopted in substance in Findings of Fact 23. Adopted in substance in Findings of Fact 24. Rejected as constituting argument rather than a finding of fact. Adopted in substance in Findings of Fact 22. Rejected as unnecessary and irrelevant. Adopted in substance in Findings of Fact 15. 17. Adopted in substance in Findings of Fact 15. 18. Adopted in substance in Findings of Fact 37, 38 and 39. 19. Adopted in substance in Findings of Fact 4. 20. Adopted in substance in Findings of Fact 5. 21. Adopted in substance in Findings of Fact 6. 22. Adopted in substance in Findings of Fact 7. 23. Adopted in substance in Findings of Fact 8. 24. Adopted in substance in Findings of Fact 28. 25. Adopted in substance in Findings of Fact 29. 26. Adopted in substance in Findings of Fact 30. 27. Adopted in substance in Findings of Fact 31. 28. Adopted in substance in Findings of Fact 32. 29. Adopted in substance in Findings of Fact 33. 30. Adopted in substance in Findings of Fact 34. 31. Adopted in substance in Findings of Fact 36. 32. Adopted in substance in Findings of Fact 35. 33. Adopted in substance in Findings of Fact 37. 34. Adopted in substance in Findings of Fact 39. 35. Adopted in substance in Findings of Fact 15. 36. Adopted in substance in Findings of Fact 12. 37. Adopted in substance in Findings of Fact 14. 38. Adopted in substance in Findings of Fact 15. 39. Adopted in substance in Findings of Fact 36, 37 and 38. COPIES FURNISHED: Richard A. Pettigrew, Esquire Morgan, Lewis & Bockius 200 South Biscayne Boulevard Miami, Florida 33181 Janet E. Bowman Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Dale W. 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 =================================================================
The Issue The issue to be determined is whether the applicant, Kanter Real Estate, LLC (Kanter), is entitled to issuance of an Oil and Gas Drilling Permit, No. OG 1366 (the Permit).
Findings Of Fact The Parties Kanter is a foreign limited liability company registered to do business in the State of Florida. Kanter owns 20,000 acres of property in western Broward County, on which it seeks authorization for the drilling of a vertical exploratory well. The exploratory well is to be located on a five-acre site that is subject to an ERP (the Well Site). The Department is the state agency with the power and duty to regulate activities related to the management and storage of surface waters pursuant to chapter 373, Florida Statutes, and to regulate oil and gas resources, including the permitting of activities related to the exploration for and extraction of such resources, pursuant to chapter 377, Florida Statutes. Miramar is a Florida municipal corporation located in Broward County, Florida. Broward County is a political subdivision of the State of Florida with jurisdiction extending to the Kanter property and the Well Site. The Application On July 2, 2015, Kanter submitted its Application for Permit to Drill (Application) to the Department. The proposed Well Site is on land to which Kanter owns the surface rights and subsurface mineral rights. The Application contemplates the drilling of an exploratory well to a depth of approximately 11,800 feet. The Application is not for a production well. The well is to be drilled, and ancillary activities are to be performed on a fill pad of approximately five acres, surrounded by a three-foot high perimeter berm on three sides and the L67-A levee on the fourth. The pad is the subject of an ERP which, as set forth in the Preliminary Statement, is not being challenged. The pad is designed to contain the 100-year, three-day storm. The engineering design incorporates a graded area, berm, and containment with a water control structure and a gated culvert to manipulate the water if necessary. The entire pad is to be covered by a 20 mil PVC liner, is sloped to the center, and includes a steel and concrete sump for the collection of any incidental spills. The pad was designed to contain the full volume of all liquids, including drilling fluid, fuel, and lubricating oil, that are in tanks and containers on the facility. The Application includes technical reports, seismic data, and information regarding the geology and existing producing oil wells of the Upper Sunniland Formation, which Kanter filed for the purpose of demonstrating an indicated likelihood of the presence of oil at the proposed site. The third Request for Additional Information (RAI) did not request additional information regarding the indicated likelihood of the presence of oil at the proposed site. After it submitted its response to the third RAI, Kanter notified the Department of its belief that additional requests were not authorized by law. As a result, the Department completed the processing of the Application without additional RAI’s. On November 16, 2016, the Department entered its Notice of Denial of the Oil and Gas Drilling Permit. The sole basis for denial was that Kanter failed to provide information showing a balance of considerations in favor of issuance pursuant to section 377.241.1/ There was no assertion that the Application failed to meet any standard established by applicable Department rules, Florida Administrative Code Chapters 62C-25 through 62C-30. In particular, the parties included the following stipulations of fact in the Joint Prehearing Stipulation which are, for purposes of this proceeding, deemed as established: The structure intended for the drilling or production of Kanter’s exploratory oil well is not located in any of the following: a municipality; in tidal waters within 3 miles of a municipality; on an improved beach; on any submerged land within a bay, estuary, or offshore waters; within one mile seaward of the coastline of the state; within one mile seaward of the boundary of a local, state or federal park or an aquatic or wildlife preserve; on the surface of a freshwater lake, river or stream; within one mile inland from the shoreline of the Gulf of Mexico, the Atlantic Ocean or any bay or estuary; or within one mile of any freshwater lake, river or stream. The location of Kanter’s proposed oil well is not: within the corporate limits of any municipality; in the tidal waters of the state, abutting or immediately adjacent to the corporate limits of a municipality or within 3 miles of such corporate limits extending from the line of mean high tide into such waters; on any improved beach, located outside of an incorporated town or municipality, or at a location in the tidal waters of the state abutting or immediately adjacent to an improved beach, or within 3 miles of an improved beach extending from the line of mean high tide into such tidal waters; south of 26°00'00? north latitude off Florida’s west coast and south of 27°00'00? north latitude off Florida’s east coast, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301; north of 26°00'00? north latitude off Florida’s west coast to the western boundary of the state bordering Alabama as set forth in s. 1, Art. II of the State Constitution; or north of 27°00'00? north latitude off Florida’s east coast to the northern boundary of the state bordering Georgia as set forth in s. 1, Art. II of the State Constitution, within the boundaries of Florida’s territorial seas as defined in 43 U.S.C. 1301. 19. The proposed oil well site does not contain Florida panther habitat and is located outside of the primary and secondary habitat zones for the Florida panther. 21. There are no recorded archaeological sites or other historic resources recorded within the area of the proposed oil well site. Kanter submitted a payment of $8,972.00 for its oil and gas permit application on June 30, 2016 pursuant to Rule 62C- 26.002(5)(c), F.A.C. Kanter’s application includes sufficient information and commitments for performance bonds and securities. DEP and Intervenors do not claim that the application lacks the information required in rule 62C-26.002, F.A.C. Kanter’s application includes an organization report that satisfies the requirements of rule 62C-26.003(3), F.A.C. Kanter’s engineering aspects of the site plan for the proposed project site, are appropriate. Kanter’s survey submitted to DEP in support of its application includes a suitable location plat which meets the minimum technical standards for land surveys. Kanter’s application includes an appropriate description of the planned well completion. DEP and Intervenors do not claim that the drilling application lacks the information required by rule 62C-26.003, F.A.C. Kanter’s Application proposes using existing levees to provide access to the proposed Kanter well site. Kanter did not propose to construct additional roads for access. Kanter’s proposed well site is located 332 feet from the L67-A levee, which serves as a roadway for trucks used to perform operations and maintenance on the levees and canals in the area. Kanter’s application does not lack any information required by DEP with respect to the location of roads, pads, or other facilities; nor does it lack any information regarding the minimization of impacts with respect to the location of roads. DEP and Intervenors do not contend that the permit should be denied based upon the proposed “spacing” of the well, or drilling unit, as that term is used in rule 62C-26.004, F.A.C. Kanter’s application includes appropriate plans for the construction of mud tanks, reserve pits, and dikes. Kanter agrees to a reasonable permit condition requiring that if water is to be transported on-site, that it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process. Kanter’s design of the integrated casing, cementing, drilling mud, and blowout prevention programs is based upon sound engineering principles, and takes into account all relevant geologic and engineering data and information. Kanter’s proposed casing plan includes an additional casing string proposed in its response to DEP’s Third Request for Additional Information. This casing plan meets or exceeds the requirements of 62C-27.005, F.A.C. Kanter’s proposed casing and cementing program, as modified, meets or exceeds all applicable statutory and rule criteria.[2/] Kanter’s response and documents provided in response to DEP’s 3rd RAI satisfactorily resolved DEP’s concern regarding the risk of passage of water between different confining layers and aquifers resulting from the physical act of drilling through the layers of water and the intervening soil or earth. Kanter’s application includes a sufficient lost circulation plan. Kanter’s application is not deficient with respect to specific construction requirements which are intended to prevent subsurface discharges. Kanter’s drilling fluids plan is appropriate and is not deficient. Kanter’s blowout prevention equipment and procedures are appropriate and are not deficient. Kanter’s plans for blowout prevention are not insufficient. Kanter’s proposed oil pad is above the 100 year flood elevation and under normally expected circumstances would not be inundated by water if constructed as proposed in Kanter’s application. Kanter’s application includes a Hydrogen Sulfide Safety Plan that includes standards which are consistent with the onshore oil and gas industry standards set forth in the American Petroleum Institutes’ Recommended Practice. DEP and Intervenors do not claim any insufficiencies with respect to Kanter’s Hydrogen Sulfide Gas Contingency Plan, the sufficiency of secondary containment, its construction plans for a protective berm around the drilling site and storage tank areas of sufficient height and impermeability to prevent the escape of pad fluid, its pollution prevention plan, its safety manual, or its spill prevention and cleanup plan. DEP and Intervenors do not contend that the permitting of the well would violate section 377.242(1), F.S., regarding permits for the drilling for, exploring for, or production of oil, gas, or other petroleum products which are to be extracted from below the surface of the land only through the well hole(s). DEP and Intervenors do not contend that Kanter’s application violates the applicable rule criteria for oil and gas permitting set forth in Chapters 62C-25 through 62C-30, Florida Administrative Code. In addition to the foregoing, Kanter is not seeking or requesting authorization to perform “fracking,” and has agreed to a permit condition that would prohibit fracking. As a result of the foregoing, the parties have agreed that the Application meets or exceeds all criteria for an exploratory oil well permit under chapters 62C-25 through 62C-30. The Property Kanter owns two parcels of land totaling 20,000 acres in the area of the proposed Well Site: a northern parcel consisting of approximately 11,000 acres and a southern parcel consisting of approximately 9,000 acres. Kanter assembled its holdings through a series of acquisitions by deeds from 1975 to 1996. The Well Site is to be located within the southern parcel. On August 7, 1944, Kanter’s predecessor in title, Dallas Investment Co., acquired by tax deed all interests in a parcel within the 9,000-acre southern parcel described as “All Section 23 Township 51 South, Range 38 East, 640 Acres,” including, without reservation, the oil, gas, minerals, and phosphate. The evidence of title submitted as part of the Application indicates that a “Kanter” entity first became possessed of rights in Section 23 in 1975. By virtue of a series of transactions extending into 1996, Kanter currently holds fee title to all surface rights, and title to all mineral rights, including rights to oil, gas, and other mineral interests, within Section 23 Township 51 South, Range 38 East. The Well Site specified in the Application is within Section 23, Township 51 South, Range 38 East. Kanter’s property is encumbered by a Flowage Easement that was granted to the Central and Southern Flood Control District in 1950, and is presently held by the South Florida Water Management District (SFWMD). The Flowage Easement guarantees Kanter access to the entire easement property “for the exploration or drilling for, or the developing, producing, storing or removing of oil, gas or other . . . in accordance with sound engineering principles.” Kanter has the legal property right to locate and drill the well, and the exploratory well is consistent with Kanter’s ownership interest. The Well Site is located in a 160-acre (quarter section) portion of the 640-acre tract described above, and is within a “routine drilling unit,” which is the block of land surrounding and assigned to a well. Fla. Admin. Code R. 62C-25.002(20) and 62C-25.002(40). The Kanter property, including the Well Site, is in the historic Everglades. Before efforts to drain portions of the Everglades for development and agricultural uses, water flowed naturally in a southerly direction through land dominated by sawgrass and scattered tree islands. The tree islands were generally shaped by the direction of the water flow. Beginning as early as the late 1800s, dramatically increasing after the hurricane of 1947, and extending well into the 1960s, canals, levees, dikes, and channels were constructed to drain, impound, or reroute the historic flows. Those efforts have led to the vast system of water control structures and features that presently exist in south Florida. The Well Site, and the Kanter property as a whole, is located in Water Conservation Area (WCA)-3. WCA-3 is located in western Broward County and northwestern Miami-Dade County. It was constructed as part of the Central and Southern Florida Flood Control project authorized by Congress in 1948, and was created primarily for flood control and water supply. In the early 1960s, two levees, L67-A and L67-C, were constructed on a line running in a northeast to southwest direction. When constructed, the levees separated WCA-3 into WCA-3A to the west and WCA-3B to the southeast. The Well Site is in WCA-3A.3/ The area between L67-A and L67-C, along with a levee along the Miami Canal, is known as the “Pocket.” There is no water control in the Pocket. Although there is a structure at the south end of the Pocket, it is in disrepair, is rarely -- if ever -- operated, and may, in fact, be inoperable. The Well Site is located within the Pocket, on the southern side of L67-A. L67-A and L67-C, and their associated internal and external canals, have dramatically disrupted sheet flow, altered hydrology, and degraded the natural habitat in the Pocket. Water inputs and outputs are entirely driven by rainfall into the Pocket, and evaporation and transpiration from the Pocket. From a hydrologic perspective, the Pocket is entirely isolated from WCA-3A and WCA-3B. The Pocket is impacted by invasive species, which have overrun the native species endemic to the area and transformed the area into a monoculture of cattails. Vegetation that grows in the Pocket dies in the Pocket. Therefore, there is a layer of decomposing vegetative muck, ooze, and sediment from knee deep to waist deep in the Pocket, which is atypical of a functioning Everglades system. L67-A and L67-C, and their associated internal and external canals, impede wildlife movement, interfering with or preventing life functions of many native wildlife species. The proposed Well Site, and the surrounding Kanter property, is in a rural area where future residential or business development is highly unlikely. The property is removed from urban and industrial areas and is not known to have been used for agriculture. The Department has previously permitted oil wells within the greater Everglades, in areas of a more pristine environmental nature, character, and location than the Pocket. The Raccoon Point wellfield is located 24 miles west of the Proposed Project Site within the Big Cypress National Preserve. It is within a more natural system and has not undergone significant hydrologic changes such as the construction of canals, levees, ditches, and dikes and, therefore, continues to experience a normal hydrologic flow. Mr. Gottfried testified that at Raccoon Point, “you can see the vegetation is maintaining itself because the fact that we don’t have levees, ditches canals, dikes, impacting the area. So you have a diversity of plant life. You have tree islands still. You have the normal flow going down.” The greater weight of evidence shows that the Kanter Well Site is far less ecologically sensitive than property at Raccoon Point on which the Department has previously permitted both exploration and production wells. The Biscayne Aquifer The Biscayne Aquifer exists in almost all of Miami- Dade County, most of Broward County and a portion of the southern end of Palm Beach County. It is thickest along the coast, and thinnest and shallowest on the west side of those counties. The western limit of the Biscayne Aquifer lies beneath the Well Site. The Biscayne Aquifer is a sole-source aquifer and primary drinking water source for southeast Florida. A network of drainage canals, including the L-30, L-31, L-33, and Miami Canals, lie to the east of WCA-3B, and east of the Well Site. Those canals penetrate into the substratum and form a hydrologic buffer for wellfields east of the Well Site, including that operated by Miramar, and isolate the portions of the Biscayne Aquifer near public wellfields from potential impacts originating from areas to their west. The canals provide a “much more hydraulically available source” of water for public wellfields than water from western zones of the Biscayne Aquifer, and in that way create a buffer between areas on either side of the canals. The Pocket is not a significant recharge zone for the Biscayne Aquifer. There is a confining unit comprised of organic soils, muck, and Lake Flint Marl separating the Pocket and the Well Site from the Fort Thompson formation of the Biscayne Aquifer. There is a layer of at least five feet of confining muck under the L67-A levee in the area of the Well Site, a layer that is thicker in the Pocket. The Well Site is not within any 30-day or 120-day protection zones in place for local water supply wells. The fact that the proposed well will penetrate the Biscayne Aquifer does not create a significant risk of contamination of the Biscayne Aquifer. The drilling itself is no different than that done for municipal disposal wells that penetrate through the aquifer much closer to areas of water production than is the Well Site. The extensive casing and cementing program to be undertaken by Kanter provides greater protection for the well, and thus for the aquifer, than is required by the Department’s rules. A question as to the “possibility” that oil could get into the groundwater was answered truthfully in the affirmative “in the definition of possible.” However, given the nature of the aquifer at the Well Site, the hydrological separation of the Well Site and well from the Biscayne Aquifer, both due to the on-site confining layer and to the intervening canals, the degree of casing and cementing, and the full containment provided by the pad, the testimony of Mr. Howard that “it would be very difficult to put even a fairly small amount of risk to the likelihood that oil leaking at that site might possibly actually end up in a well at Miramar” is accepted. The Sunniland Formation The Sunniland Formation is a geologic formation which exists in a region of South Florida known as the South Florida Basin. It is characterized by alternating series of hydrocarbon-containing source rock, dolomite, and limestone of varying porosity and permeability and evaporite anhydrite or mudstone seal deposits. It has Upper Sunniland and Lower Sunniland strata, and generally exists at a depth of up to 12,000 feet below land surface (bls) in the area of the Well Site. Underlying the Sunniland Formation is a formation generally referred to as the “basement.” The basement exists at a depth of 17,000-18,000 feet bls. Oil is produced from organic rich carbonate units within the Lower Cretaceous Sunniland Formation, also known as the Dark Shale Unit of the Sunniland Formation. The oil produced in the Sunniland Formation is generally a product of prehistoric deposits of algae. Over millennia, and under the right conditions of time and pressure, organic material is converted to hydrocarbon oil. The preponderance of the evidence demonstrates that active generating source rock capable of producing hydrocarbons exists in the Sunniland Formation beneath the Kanter property. The preponderance of the evidence also indicates that the oil generated in the Sunniland Formation is at a sufficient depth that it is preserved from microbial degradation, which generally occurs in shallower reservoirs. The Upper Sunniland Formation was formed in the Cretaceous geological period, between 106 and 100 million years ago. Over that period, sea levels rose and fell dramatically, allowing colonies of rudists (a now extinct reef-building clam) and oysters to repeatedly form and die off. Over time, the colonies formed bioherms, which are reef-like buildups of shell elevated off of the base of the sea floor. Over millennia, the bioherms were exposed to conditions, including wave action and exposure to air and rainwater, that enhanced the porosity of the component rudist and oyster shell. Those “patch reefs” were subsequently buried by other materials that formed an impermeable layer over the porous rudist and oyster mounds, and allowed those mounds to become “traps” for oil migrating up from lower layers. A trap is a geological feature that consists of a porous layer overlain by an impervious layer of rock that forms a seal. A trap was described, simplistically, as an upside down bowl. Oil, being lighter than water, floats. As oil is generated in source rock, it migrates up through subterranean water until it encounters a trapping formation with the ability to create a reservoir, and with an impervious layer above the porous layer to seal the trap and prevent further migration, thus allowing the “bowl” to fill. The reservoir is the layer or structure with sufficient porosity and permeability to allow oil to accumulate with its pores. The thickness of the layer determines the volume of oil that the reservoir is capable of retaining. Although rudist mounds are generally considered to be more favorable as traps due to typically higher porosity, oyster mound traps are correlated to producing wells in the Sunniland Formation and are primary producers in the Felda field and the Seminole field. The Lower Sunniland Formation is a fractured carbonate stratum, described by Mr. Aldrich as a rubble zone. It is not a traditional structural trap. Rather, it consists of fractured and crumbling rock thought to be created by basement shear zones or deep-seated fault zones. It has the same source rock as the Upper Sunniland. There is little information on traps in the Lower Sunniland, though there are two fields that produce from that formation. A “play” is a group of prospects or potential prospects that have the same source rock, the same reservoir rock, the same trap style, and the same seal rock to hold in the hydrocarbons. The producing oil fields in the Sunniland Formation, including Raccoon Point, Sunniland, Felda, West Felda, and Lake Trafford are part of a common play known as the Sunniland Trend. The Sunniland Trend is an area of limestone of greater porosity within the Sunniland Formation, and provides a reasonable extrapolation of areas that may be conducive to oil traps. The Sunniland Trend extends generally from Manatee County on the west coast of Florida southeasterly into Broward County and the northwestern portion of Miami-Dade County on the east coast of Florida. The trend corresponds to the ancient Cretaceous shoreline where rudist and oyster bioherms formed as described above. In 2003, the “Mitchell-Tapping” report, named after the husband and wife team, identified two separate trends within the Sunniland Trend, the rudist-dominant West Felda Trend, and the more oyster-based Felda Trend. Both are oil-producing strata. The Felda Trend is more applicable to the Kanter property. Throughout the Sunniland Trend, hydrocarbon reservoirs exist within brown dolomite deposits and rudist and oyster mounds. Dolomite is a porous limestone, and is the reservoir rock found at the productive Raccoon Point oil wellfield. The evidence indicates that a brown dolomite layer of approximately 20 feet underlies the Well Site, and extends in all directions from the Well Site. A preponderance of the evidence indicates that the Kanter property, including the Well Site, is within the Sunniland Trend and its Felda Trend subset.4/ Oil produced from wells in the Sunniland Trend is typically thick, and is not under pressure. The oil does not rise through a bore hole to the surface, but must be pumped. The Raccoon Point Field, which is the closest productive and producing wellfield to the proposed Well Site, is located approximately 24 miles to the west of the Well Site, within the Sunniland Trend. Raccoon Point contains numerous well sites, of which four or five are currently producing, and has produced in the range of 20 million barrels of oil since it began operation in the late 1970s. Cumulative production of oil from proven fields in the South Florida Basin, including fields in the Sunniland Formation, is estimated to be in excess of 160 million barrels. Estimates from the U.S. Geological Service (USGS) indicate that 25 new fields capable of producing five million barrels of oil each are expected to be found within the Lower Cretaceous Shoal Reef Oil Assessment Unit, which extends into the Kanter property. Estimates of the potential reserves reach as high as an additional 200 million barrels of oil. The Dollar Bay Formation Another formation that has potential for oil production is the Lower Cretaceous Dollar Bay Formation, also in the South Florida Basin. The Dollar Bay Formation exists beneath the Kanter property at a shallower depth than the Sunniland Formation, generally at a depth of 10,000 feet in the vicinity of the Well Site. Most of the Dollar Bay prospects are on the east side of the South Florida Basin. Most of the wells in the South Florida Basin are on the west side. Thus, there has not been much in the way of exploration in the Dollar Bay Formation, so there is a lack of data on traps. Dollar Bay has been identified as a known oil-bearing play by the USGS. It is a self-source play, so the source comes from the Dollar Bay Formation itself. Dollar Bay exists both as potential and mature rock. It has known areas of very high total organic content (TOC) source rock; logged reservoir in the formation; and seal rock. There have been three oil finds in the Dollar Bay formation, with at least one commercial production well. Kanter will have to drill through the Dollar Bay Formation to get to the Upper Sunniland formation, thus allowing for the collection of information as to the production potential of the prospect. Although Dollar Bay is not generally the main “target” of the Permit, its potential is not zero. Thus, consideration of the Dollar Bay Formation as a factor in the calculation of risk/success that goes into the decision to drill an exploratory well is appropriate. Initial Exploratory Activities In 1989, Shell Western E&P, Inc. (Shell), conducted extensive seismic exploration in south Florida. Among the areas subject to seismic mapping were two lines -- one line of 36,000 feet mapped along the L67-A levee, directly alongside the Well Site, and the other of approximately 10 miles in length along the Miami Canal levee. The lines intersect on the Kanter property just north of the Well Site. The proposed exploration well is proposed to extend less than 12,000 feet deep. The seismic mapping performed by Shell was capable of producing useful data to that depth. The seismic methodology utilized by Shell produced data with a high degree of vertical and spatial resolution. Given its quality, the Shell data is very reliable. Shell did not use the seismic data generated in the 1980s, and ultimately abandoned activity in the area in favor of larger prospects, leaving the smaller fields typical of south Florida for smaller independent oil companies. The Shell seismic data was purchased by Seismic Exchange, a data brokerage company. In 2014, Kanter purchased the seismic data from Seismic Exchange for the lines that ran through its property. With the purchase, Kanter received the original field tapes, the support data, including surveyors’ notes and observer sheets which describe how the data was acquired, and the recorded data. As a result of advances in computer analysis since the data was collected, the seismic data can be more easily and accurately evaluated. It is not unusual for companies to make decisions on whether to proceed with exploration wells with two lines of seismic data. Mr. Lakin reviewed the data, and concluded that it showed a very promising area in the vicinity of the L67-A levee that was, in his opinion, sufficient to continue with permitting an exploratory oil well. Mr. Lakin described the seismic information in support of the Application as “excellent data,” an assessment that is well-supported and accepted. Mr. Pollister reviewed the two lines of seismic data and opined that the information supports a conclusion that the site is a “great prospect” for producing oil in such quantities as to warrant the exploration and extraction of such products on a commercially profitable basis. Seismic Data Analysis The seismic lines purchased by Kanter consist of line 970, which runs southwest to northeast along the L67-A levee, and a portion of line 998, which runs from northwest to southeast along the Miami Canal levee. The lines intersect at the intersection of the two levees. The data depicts, among others, the seismic reflection from the strata of the Sunniland Trend, and the seismic reflection from the basement. The depiction of the Sunniland Trend shows a discernable rise in the level of the strata, underlain by a corresponding rise in the basement strata. This rise is known as an anticline. An anticline is a location along a geologic strata at which there is an upheaval that tends to form one of the simplest oil traps that one can find using seismic data. In the South Florida Basin, anticlines are typically associated with mounded bioherms. A “closed structure” is an anticline, or structural high, with a syncline, or dip, in every direction. A closed structure, though preferable, is not required in order for there to be an effective trap. Most of the Sunniland oil fields do not have complete closure. They are, instead, stratigraphic traps, in which the formation continues to dip up and does not “roll over.” Where the rock type changes from nonporous to porous and back to nonporous, oil can become trapped in the porous portion of the interval even without “closure.” Thus, even if the “bowl” is tilted, it can still act as a trap. Complete closure is not necessary in much of the Sunniland Trend given the presence of an effective anhydrite layer to form an effective seal.5/ The seismic data of the Kanter property depicts an anticline in the Sunniland Formation that is centered beneath the Well Site at a depth in the range of 12,000 feet bls. Coming off of the anticline is a discernable syncline, or dip in the underlying rock. Applying the analogies used by various witnesses, the anticline would represent the top of the inverted bowl, and the syncline would represent the lip of the bowl. The evidence of the syncline appears in both seismic lines. The Shell seismic data also shows an anhydrite layer above the Sunniland Formation anticline. The same anticline exists at the basement level at a depth of 17,000 to 18,000 feet bls. The existence of the Sunniland formation anticline supported by the basement anticline, along with a thinning of the interval between those formations at the center point, provides support for the data reliably depicting the existence of a valid anticline. A basement-supported anticline is a key indicator of an oil trap, and is a feature commonly relied upon by geophysicists as being indicative of a structure that is favorable for oil production. The seismic data shows approximately 65 feet of total relief from the bottom to the top of the anticline structure, with 50 feet being closed on the back side. The 50 feet of closed anticline appears to extend over approximately 900 acres. There is evidence of other anticlines as one moves northeast along line 970. However, that data is not as strong as that for the structure beneath the Well Site. Though it would constitute a “lead,” that more incomplete data would generally not itself support a current recommendation to drill and, in any event, those other areas are not the subject of the permit at issue. The anticline beneath the well site is a “prospect,” which is an area with geological characteristics that are reasonably predicted to be commercially profitable. In the opinion of Mr. Lakin, the prospect at the location of the proposed Well Site has “everything that I would want to have to recommend drilling the well,” without a need for additional seismic data. His opinion is supported by a preponderance of the evidence, and is credited. Confirmation of the geology and thickness of the reservoir is the purpose of the exploratory well, with the expectation that well logs will provide such confirmation. Risk Analysis Beginning in the 1970s, the oil and gas industry began to develop a business technique for assessing the risk, i.e., the chance of failure, to apply to decisions being made on drilling exploration wells. Since the seminal work by Bob McGill, a systematic science has developed. In 1992, a manual was published with works from several authors. The 1992 manual included a methodology developed by Rose & Associates for assessing risk on prospects. The original author, Pete Rose,6/ is one of the foremost authorities on exploration risk. The Rose assessment method is a very strong mathematical methodology to fairly evaluate a prospect. The Rose method takes aspects that could contribute to finding an oil prospect, evaluates each element, and places it in its perspective. The Rose prospect analysis has been refined over the years, and is generally accepted as an industry standard. The 1992 manual also included a methodology for assessing both plays and prospects developed by David White. The following year, Mr. White published a separate manual on play and prospect analysis. The play and prospect analysis is similar to the Rose method in that both apply mathematical formulas to factors shown to be indicative of the presence of oil. Play and prospect analysis has been applied by much of the oil and gas industry, is used by the USGS in combining play and prospect analysis, and is being incorporated by Rose & Associates in its classes. The evidence is convincing that the White play and prospect analysis taught by Mr. Aldrich is a reasonable and accepted methodology capable of assessing the risk inherent in exploratory drilling. Risk analysis for plays and prospects consists of four primary factors: the trap; the reservoir; the source; and preservation and recovery. Each of the four factors has three separate characteristics. Numeric scores are assigned to each of the factors based on seismic data; published maps and materials; well data, subsurface data, and evidence from other plays and prospects; and other available information. Chance of success is calculated based on the quantity and quality of the data supporting the various factors to determine the likelihood that the prospect will produce flowable hydrocarbons. The analysis and scoring performed by Mr. Aldrich is found to be a reasonable and factually supported assessment of the risk associated with each of the prospects that exist beneath the proposed Well Site and that are the subject of the Application.7/ However, Mr. Aldrich included in his calculation an assessment of the Lower Sunniland Formation. The proposed well is to terminate at a depth of 11,800 feet bls, which is within the Upper Sunniland, but above the Lower Sunniland. Thus, although the Lower Sunniland would share the same source rock, the exploration well will not provide confirmation of the presence of oil. Therefore, it is more appropriate to perform the mathematical calculation to determine the likelihood of success without consideration of the Lower Sunniland prospect. To summarize Mr. Aldrich’s calculation, he assigned a four-percent chance of success at the Well Site for the Dollar Bay prospect. The assignment of the numeric scores for the Dollar Bay factors was reasonable and supported by the evidence. Mr. Aldrich assigned a 20-percent chance of success at the Well Site for the Upper Sunniland play. The assignment of the numeric scores for the Upper Sunniland factors was reasonable and supported by the evidence. In order to calculate the overall chance of success for the proposed Kanter exploratory well, the assessment method requires consideration of the “flip side” of the calculated chances of success, i.e., the chance of failure for each of the prospects. A four-percent chance of success for Dollar Bay means there is a 96-percent (0.96) chance of failure, i.e., that a commercial zone will not be discovered; and with a 20-percent chance of success for the Upper Sunniland, there is an 80-percent (0.80) chance of failure. Multiplying those factors, i.e., .96 x .80, results in a product of .77, or 77 percent, which is the chance that the well will be completely dry in all three zones. Thus, under the industry-accepted means of risk assessment, the 77-percent chance of failure means that there is a 23-percent chance of success, i.e., that at least one zone will be productive. A 23-percent chance that an exploratory well will be productive, though lower than the figure calculated by Mr. Aldrich,8/ is, in the field of oil exploration and production, a very high chance of success, well above the seven-percent average for prospecting wells previously permitted by the Department (as testified to by Mr. Linero) and exceeding the 10- to 15-percent chance of success that most large oil companies are looking for in order to proceed with an exploratory well drilling project (as testified to by Mr. Preston). Thus, the data for the Kanter Well Site demonstrates that there is a strong indication of a likelihood of the presence of oil at the Well Site. Commercial Profitability Commercial profitability takes into account all of the costs involved in a project, including transportation and development costs. Mr. Aldrich testified that the Kanter project would be commercially self-supporting if it produced 100,000 barrels at $50.00 per barrel. His testimony was unrebutted, and is accepted. The evidence in this case supports a finding that reserves could range from an optimistic estimate of 3 to 10 million barrels, to a very (perhaps unreasonably) conservative estimate of 200 barrels per acre over 900 acres, or 180,000 barrels. In either event, the preponderance of the evidence adduced at the hearing establishes an indicated likelihood of the presence of oil in such quantities as to warrant its exploration and extraction on a commercially profitable basis.9/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order: Approving the Application for Oil and Gas Drilling Permit No. OG 1366 with the conditions agreed upon and stipulated to by Petitioner, including a condition requiring that if water is to be transported on-site, it will add additional tanks for the purpose of meeting water needs that would arise during the drilling process, and a condition prohibiting fracking; and Approving the application for Environmental Resource Permit No. 06-0336409-001. DONE AND ENTERED this 10th day of October, 2017, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 2017.
The Issue There are three legal issues which remain for determination: (1) Whether Florida Petroleum has standing in this case; (2) Whether proposed rule 62-770.220(3)(b), requiring constructive notice to residents or business tenants of real property into which the temporary point of compliance is allowed to extend is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes; and (3) Whether proposed rule 62-770.220(4), requiring additional constructive notice of the status of site rehabilitation is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes.i
Findings Of Fact On December 23, 2004, the Department published a Notice of Proposed Rulemaking regarding amendments to Florida Administrative Code Chapter 62-770. In particular, proposed rule 62-770.220(3)(b) and (4), provides: Subsequent Notice of Contamination Beyond Source Property Boundaries for Establishment of a Temporary Point of Compliance (TPOC) - Prior to the Department authorizing a temporary extension of the point of compliance beyond the boundary of the source property (i.e., the location from which the contamination originates) in conjunction with Natural Attenuation Monitoring pursuant to Rule 62-770.690, F.A.C., or Active Remediation pursuant to Rule 62-770.700, F.A.C., the PRSP shall provide the following notices: * * * (b) Constructive notice to residents [if different from the real property owner(s) notified pursuant to paragraph 62- 770.220(3)(a), F.A.C.] and business tenants of any real property into which the point of compliance is allowed to extend. Such constructive notice, which shall include the same information as required in the actual notice, shall be provided by complying with the following: * * * Status Update 5-Year Notice - When utilizing a TPOC beyond the boundary of the source property to facilitate natural attenuation monitoring or active remediation, an additional notice concerning the status of the site rehabilitation shall be similarly provided every five years to [the classes of] those persons who received notice pursuant to subsection 62-770.220(3), F.A.C., unless in the intervening time, such persons have been informed that the contamination no longer affects the property into which the point of compliance was allowed to extend. * * * (The language in brackets was added pursuant to the Department's Notice of Change and "those" was deleted.) The proposed rule implements Section 376.3071, Florida Statutes. The specific authority for the proposed rule is Sections 376.303 and 376.3071, Florida Statutes. On February 2, 2005, the Environmental Regulation Commission held a public hearing on the proposed rules and approved the proposed rules with certain amendments. On February 14, 2005, Florida Petroleum filed a Petition for Determination of Invalidity of Proposed Rule (Petition) challenging the validity of proposed amendments to proposed rule 62-770.220(3)(b) and (4). The Petition was filed pursuant to Section 120.56(1) and (2), Florida Statutes, and in each instance, Florida Petroleum alleges that the proposed rule violates Section 120.52(8)(c), Florida Statutes. On March 4, 2005, the Department published a Notice of Change regarding the above-referenced Notice of Proposed Rulemaking. With respect to the pending proceeding, the Notice of Change reflects revisions to language of proposed rule 62- 770.220(4), which are not subject to challenge. See Finding of Fact 1. On May 16, 2005, without objection, official recognition was taken of the Department's Notice of Proposed Rulemaking and Notice of Change. Florida Petroleum is a Florida voluntary, non-profit trade association, which comprise, in part, approximately 194 Marketer Members who own and/or operate petroleum storage system facilities in Florida. Florida Petroleum’s purposes include providing representation on behalf of its members in legislative and regulatory matters before the Florida legislature and agencies. Florida Petroleum routinely represents its members in rule development proceeding and other regulatory matters before the Department of Environmental Protection, Department of Revenue, and Department of Agriculture and Consumer Services. Florida Petroleum’s By-Laws state that its purposes include advancing the business concerns of its members, pooling the energy and resources of its members, and communicating with elected officials at the national, state, and local levels of government. Towards those ends, Florida Petroleum has represented it members before the Florida Legislature in matters relating to the regulation of petroleum facilities under Chapter 376, Florida Statutes, and has appeared before the Department in rulemaking proceedings involving the regulation of petroleum cleanups, and the various state restoration funding assistance programs. The subject matter of the rule at issue is within the general scope of interest and activity of Florida Petroleum, in particular, its marketer members, who own or operate facilities that store petroleum products for consumption, use, or sale. Florida Petroleum submitted oral and written comments, recommendations, objections, and proposed amendments to the Department and the Environmental Regulation Commission in connection with the rules at issue in this case. A substantial number of Florida Petroleum marketer members are "persons responsible" for assessment and remediation of one or more petroleum-contaminated sites. Florida Administrative Code Chapter 62-770, governs the remediation of petroleum-contaminated sites. A substantial number of Florida Petroleum’s marketer members are "persons responsible" for assessment and remediation of sites identified by the Department as "confirmed" or "suspected" sources of contamination beyond the boundary of the facility (i.e., "off-site contamination"). In certain instances, the Department's rules allow for the use of No Further Action with Conditions procedures in cases of petroleum contamination where applicable regulatory requirements are met because the use of conditions, such as institutional and engineering controls, may be more cost- effective than active remediation. As of February 2005, the Department estimated that it had reports of approximately 23,000 petroleum-contaminated sites. In 2004, the Department received an estimated 539 Discharge Report Forms in connection with petroleum storage facilities. As of March 2005, the Department had information indicating that approximately 2,000 "off-site" properties have been affected by contamination. Assessment Reports filed with the Department indicate that a substantial number of these sites may have been affected by discharges of petroleum or petroleum products. Petroleum discharges will in all likelihood continue to occur in the future at petroleum facilities. Petroleum discharges will in all likelihood continue to affect off-site properties in the future.
The Issue Whether Alachua County Environmental Protection Department discriminated against Tilak B. Shrestha based upon his race or national origin, in violation of Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992, by releasing Mr. Shrestha from his temporary assignment through Temp Force with the Alachua County Environmental Protection Department and by not hiring Mr. Shrestha for the position of Senior Environmental Specialist within the Alachua County Environmental Protection Department.
Findings Of Fact The State of Florida funds the Petroleum Cleanup Program (Petroleum Program) which is focused on removing petroleum contaminants from various sites within the State of Florida. The Department of Environmental Protection (DEP) administers the Petroleum Program, also known as the Underground Storage Cleanup Program. In 12 counties, including Alachua, Florida contracts with the county to manage the Petroleum Program. The Alachua County Environmental Protection Department (Alachua DEP) manages the Petroleum Cleanup sites in Alachua County. Mr. Chris Bird has been the director of the Petroleum Program since 1993. He has worked with Alachua County since 1986. In the 1994-1995 fiscal year, the Florida Legislature was facing a deficit; therefore, the Legislature significantly reduced the funding for the Petroleum Program. As a result, DEP froze the Petroleum Program, and dropped several active sites. The lack of funding resulted in downsizing at both the county and state levels at the beginning of 1995. At the beginning of 1995, the Alachua DEP had three funded positions in the Petroleum Program. Mr. Alex Vieira occupied the position of full-time Professional Engineer. The Alachua DEP also had funding for an administrative position and a full-time Environmental Engineer/Geologist. The Environmental Engineer/Geologist position was vacant at the beginning of 1995. The Alachua DEP originally advertised for the position. However, when the State reduced funding for the Petroleum Program, the Alachua DEP decided not to fill the position with a permanent employee and ultimately froze this permanent position. In order for the Petroleum Program to continue at a minimum level of operation, the Alachua DEP hired temporary employees through Temp Force, a temporary employment agency. Temp Force served as an independent contractor for the Alachua DEP. Temp Force provided Mr. Tilak Shrestha and Mr. Mike Shuler to the Alachua DEP Petroleum Cleanup Program. Mr. Shuler began working at the Alachua DEP through Temp Force two months prior to Mr. Shrestha's Temp Force assignment to the Petroleum Program. At the time of the assignment through Temp Force, Shrestha was not credentialed as a Ph.D. Mr. Shrestha and Mr. Shuler were employees of Temp Force, received their paychecks from Temp Force and acquired no benefits from Alachua County. Mr. Shrestha worked as a Temp Force employee for six months at Alachua DEP and was assigned to various projects at the Alachua DEP. As supervisor for the Petroleum Program, Mr. Vieira assigned projects to both Mr. Shrestha and Mr. Shuler. Mr. Shrestha described his working conditions during his assignment through Temp Force with the Alachua DEP as "good, no complaints," and "good on average." In 1995, the Florida legislature ultimately reduced funding for the Petroleum Program from $1.2 million to approximately $250,000. When the Alachua DEP received notice of these funding cuts, Mr. Bird advised Mr. Vieira that he needed to release one of the Temp Force employees from his assignment with the Alachua DEP. Mr. Vieira retained Mr. Shuler and informed Mr. Shrestha that he would no longer be working on the Petroleum Cleanup assignment through Temp Force. Mr. Shrestha's assignment through Temp Force with the Alachua DEP was terminated on August 10, 1995. During Fall 1995, the legislature substantially changed the law and administration pertaining to the Petroleum Program, both at the county and state levels. In October 1995, Ms. Pegeen Hanrahan became the Petroleum Program supervisor following Mr. Vieira's resignation. Ms. Hanrahan earned a Bachelor's degree in Environmental Engineering and Sociology and a Master's degree in Environmental Engineering. She is a registered Professional Engineer and a certified Hazardous Materials Manager. She began working for Alachua County in 1992 as an Environmental Engineer and later served for three years as Hazardous Materials Program Supervisor for Alachua County. When Ms. Hanrahan became supervisor of the Petroleum Program in Fall 1995, the Petroleum Program had essentially entered a "stand-by" mode. The Alachua DEP declined to send any additional work to its sub-contractors. Therefore, the technical duties involved in the Petroleum Program were reduced and the administrative duties became more important. During the Fall of 1995, there were no permanent employees on staff. Mr. Shuler remained as the only temporary employee in the Petroleum Program and according to Ms. Hanrahan was doing a "perfectly adequate job." Based on the new and reduced Petroleum Program budget for the 1995-1996 fiscal year, the Alachua DEP acted in October 1995 to establish the position of Senior Environmental Specialist in lieu of the Environmental Engineer/Geologist position. The position was advertised in December 1995. The main role of the Senior Environmental Specialist was to assist the Professional Engineer in the area of the administration involved in the Petroleum Program. The duties included filing reports, tracking sites, and submitting task orders and invoices to the office in Tallahassee. Due to the increasing changes in the Petroleum Program, the Alachua DEP required a Senior Environmental Specialist who understood the Petroleum Program's administrative tasks, as well as the State policies pertaining to the Petroleum Program. The Senior Environmental Specialist candidate was required to have a technical background in fields including, but not limited to, engineering, biology or geology. The Professional Engineer, not the Specialist, was assigned the technical review of the Petroleum Program. An applicant's understanding of the technical and administrative duties was necessary. In 1995, the Alachua DEP advertised the position of Senior Environmental Specialist, which included printing an advertisement in the local newspaper, per the County regulations. The Alachua DEP described the administrative tasks of Senior Environmental Specialist to include: preparing reports; making recommendations; receiving and investigating complaints; conducting performance evaluations; counseling, hiring and terminating employees. The Alachua DEP described the knowledge, skills, and abilities of the Senior Environmental Specialist to include: thorough knowledge of the technical methods and procedures involved in the administration of environmental regulations, programs, and policies; knowledge of local, state, and federal rules, regulations, and ordinances related to environmental protection; ability to create concise, clear, and succinct technical reports; and ability to research technical problems, formulate recommendations, and compile related reports. The Alachua DEP described the minimum qualifications for the position of Senior Environmental Specialist as: Bachelor's degree in environmental or natural science, civil or environmental engineering, geology, or hydrology, or related field, and two years' professional level environmental-related experience; or any equivalent combination of related training and experience. The County received 14 applications for the position as Senior Environmental Specialist from applicants, which included Mr. Shrestha and Mr. Shuler. Ms. Hanrahan was supervisor of the Petroleum Program in January 1996 and responsible for the hiring of the Senior Environmental Specialist. She received an Application Referral Document from personnel, stating that each of the applicants met the County's minimum requirements for the position of Senior Environmental Specialist. Upon receipt of the re?sume's and applications, Ms. Hanrahan initially screened the applicants for those who had petroleum-related experience. She narrowed the applicants to four individuals, who included Mr. Shrestha, Mr. Shuler, and two others. On January 22, 1996, Ms. Hanrahan conducted a telephone interview of each of the four applicants who passed the initial screening. The telephone interview was customary hiring practice within the Alachua DEP. During the telephone interview, Ms. Hanrahan asked each applicant the same series of ten questions, designed to test the applicant's level of knowledge regarding technical and administrative aspects of the position of Senior Environmental Specialist. Mr. Shrestha answered five out of a possible eleven answers correctly. This was the second highest score out of the four applicants. Shuler achieved the highest score, answering eight-and-one-half out of eleven answers correctly. Three interview questions specifically addressed administrative issues. Question six asked, "What does RBCA stand for?" Question seven stated, "This year the Florida Petroleum Cleanup Program has adopted a new mechanism for review and approval of work on petroleum contaminated sites. Can you tell me what that program is called?" Question nine stated, "Give two examples of policy decisions under RBCA." Mr. Shrestha failed to answer question six, seven or nine correctly. Mr. Shrestha's failure to correctly answer each of the administrative questions indicated to Ms. Hanrahan that he was unaware of the changes within the Petroleum Program. Another purpose of the telephone interview was to assess the applicants under pressure. Ms. Hanrahan also sought to evaluate how the applicants responded to her authority. During the telephone interview, Mr. Shrestha challenged Ms. Hanrahan regarding the relevance of the questions to the position of Senior Environmental Specialist and she noted his argumentative attitude during the interview. He conceded at the hearing that he did ask her about the relevancy of the questions. Based upon his argumentative tone, Ms. Hanrahan questioned Mr. Shrestha about his ability to accept her supervisory decisions. She decided not to hire Mr. Shrestha for the position of Senior Environmental Specialist based on his limited knowledge of the administration of the Petroleum Program, a factor essential to the position of Senior Environmental Specialist, and his inability to accept her authority as supervisor. Ms. Hanrahan was also aware of critical statements that Mr. Shrestha allegedly had made to female co-workers during his assignment through Temp Force at the Alachua DEP. Ms. Robin Hallbourg is currently employed as Senior Environmental Specialist with the Alachua DEP. Ms. Hallbourg has been with the Alachua County DEP for 15 years. Ms. Hallbourg worked with Mr. Shrestha at the Alachua DEP during Mr. Shrestha's assignment through Temp Force. Ms. Hallbourg testified that Mr. Shrestha told her that "she should be home with her child" and that she "should allow a man to have her job." After this conversation, Ms. Hallbourg discussed his statements with others in the Alachua DEP, including Ms. Hanrahan. Ms. Hanrahan recalled the discussion with her. Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist because he proved himself to be the most qualified candidate during the interview process. Ms. Hanrahan kept an interview log on which she noted Mr. Shuler's strong qualifications for the position of Senior Environmental Specialist. She noted his "excellent experience in the Petroleum Cleanup Program and his significant applicable training and experience in program administration." Ms. Hanrahan also noted that his "application and interview showed strong computer skills." Mr. Shuler's Bachelor's degree in Microbiology met the education requirements for the position of Senior Environmental Specialist. Moreover, at the time of Shuler's application, there had been a growing emphasis placed on bi-remediation, which is currently a regularly used process. Given Ms. Hanrahan's education, training,and experience as a Professional Engineer, she determined that a Bachelor's degree in Microbiology was an appropriate background for the position. In addition, Mr. Shuler had the technical knowledge of processes, performance of groundwater sampling, and drilling, as well as other relevant technical knowledge pertaining to the position of Senior Environmental Specialist. Additionally, due to his continued assignment in the Alachua DEP, he was aware of the new administrative duties required of a Senior Environmental Specialist. Ms. Hanrahan had personally observed Mr. Shuler from October 1995 until January 1996, and was extremely satisfied with his performance. As part of the usual hiring process, Ms. Hanrahan submitted her interview log, personnel action form, and applications to the personnel department to support her hiring decision. Mr. Bird approved the hiring decision in his capacity as director, and the personnel department, budget department, and Equal Employment Office then approved the decision. Since his hire, Mr. Shuler has been commended by the Alachua DEP and his supervisors. Ms. Hanrahan informed Mr. Shrestha that he had not been hired for the position during a telephone conversation on January 23, 1996. She did not base her decision to hire Mr. Shuler over Mr. Shrestha on the basis of race or national origin. Ms. Hanrahan is fully aware of Alachua County's Equal Employment Opportunity policy through her position as advisor on the Equal Opportunity Advisory Committee. There is no evidence of any discriminatory hiring decision. In fact, on the same day that Ms. Hanrahan hired Mr. Shuler for the position of Senior Environmental Specialist, she also hired Mr. Gus Olmos for the position of Environmental Engineering Supervisor. Mr. Olmos is from Panama and is Hispanic. Moreover, Dr. Prasad Kuchibhotla is a Professional Engineer with a Bachelor's, Master's and Ph.D. in Chemical Engineering. He is from India and is Asian. Alachua County hired Dr. Kuchibhotla in 1997 and is the current Petroleum Cleanup Program Manager for Alachua DEP. Dr. Kuchibhotla currently has a Senior Environmental Specialist working for him within the Petroleum Program. As was the case in December 1995, the current Specialist's primary duty is to assist him with the detailed administrative tasks involved with the Petroleum Program. On January 27, 1997, Mr. Shrestha filed a formal Charge of Discrimination. The charge was date stamped as received by the Florida Commission on Human Relations on January 30, 1997. Mr. Shrestha is currently employed with Bell South in Atlanta, Georgia. He earns $47,000 per year and receives health benefits.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that Petitioner, Tilak B. Shrestha is not entitled to any relief relating to his charge of discrimination under Title VII of the Federal Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992. DONE AND ENTERED this 2nd day of August, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of August, 2000. COPIES FURNISHED: Tilak B. Shrestha 3579-C Meadowglen Village Lane Doraville, Georgia 30340 Robert M. Ott, Esquire County Litigation Attorney Post Office Box 2877 Gainesville, Florida 32602 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana A. Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
Findings Of Fact Petitioner is the owner of the site known as Union 76 #702 or as Taylor's 76, Inc., located at 9700 East Indigo Street, Perrine, Dade County, Florida. The prior owner of that site was Lawrence Oil Company. There appears to be a commonality of principals between Petitioner TYU, Inc., and its predecessor in title, Lawrence Oil Company. In 1986 the Legislature created the Early Detection Incentive Program (hereinafter "EDI") to encourage early detection, reporting, and cleanup of contamination from leaking petroleum storage systems. Essentially, the Legislature created a 30-month grace period ending on December 31, 1988, for owners of sites with contamination from petroleum storage systems to apply for reimbursement for cleanup expenses due to the contamination, without retribution from the State. The statute also provided several bases for which an applicant would be deemed ineligible. Prior to the December 31, 1988, deadline Petitioner checked the various sites owned by it, including the site which is the subject of this proceeding, to determine whether contamination was present. The subject site had been a service station, selling gasoline for 30 to 35 years. From 1986 forward, however, gasoline was no longer being dispensed at the site although the underground gasoline tanks were still present. It is unknown whether the tanks were emptied at the time that they were taken out of service. Automobile repairs were still performed at the site. By 1989, the site was also occupied by a lawn maintenance company and a pool company. In 1988 and 1989 a 55-gallon drum of used oil was located on the site. The lawn company employees used that oil to lubricate their chain saws. The remainder of the used oil and the solvents from the small parts washer were picked up from that site for recycling. In November or December of 1988, Harry Barkett, president of Lawrence Oil Company, personally visited the site. He sampled the monitoring wells. Because he smelled gasoline in the monitoring wells, he retained Seyfried & Associates, Inc., an environmental consultant, to prepare a report to be submitted to the Department. That report is dated December 15, 1988. Petitioner's application for participation in the EDI program, together with the report of Seyfried & Associates, Inc., was submitted to the Department prior to the December 31, 1988, deadline. At the time, Metropolitan Dade County's Department of Environmental Resources Management (hereinafter "DERM") was performing EDI inspections for the Department pursuant to a contract. On March 22, 1989, a DERM employee who performed only industrial waste inspections went to the subject site. He specifically was not there to inspect the petroleum storage systems, and he did not do so. That employee went into the service bays where the routine auto repair and maintenance services were performed. He noticed the floor drains going from the service bays to the oil/water separator. He then inspected the oil/water separator. He noted that a hole had been cut at the top of the effluent pipe, which breached the system and which might allow oil to flow into either a drain field or a septic tank system. He did not check further to ascertain which. He took three samples from inside the oil/water separator, one for oil and grease, one for phenols, and one for metals, specifically cadmium, chromium, and lead. Not surprisingly, the laboratory analysis of those samples indicated the presence of phenols, oil, and grease. The only sampling done by that employee was of the contents of the oil/water separator. No investigation was made of, and no samples were taken from, the soil or groundwater anywhere on the site. Such sampling was not part of that employee's authority or responsibility. On October 11, 1989, Dade County DERM sent a different employee to perform the EDI inspection at the subject site. To determine the presence of contamination from petroleum or petroleum products, that employee dipped an acrylic bailer into each of the monitoring wells and then "sniffed the bailer" to ascertain if the odor of gasoline could be detected. He did not dip the bailer lower than the top foot of water since he did not wish to bring the bailer up through a column of water before sniffing. Dade County DERM employees no longer "sniff the bailer" due to the health risk involved in such a procedure. In 1989, however, it was the common practice for DERM employees to "sniff the bailer," albeit cautiously. That employee failed to detect the odor of gasoline and did not see any petroleum contamination in the monitoring wells. He issued a report to that effect. He took no samples from the soil or groundwater to determine if there were contamination from petroleum or petroleum products at the site. Based upon the second report indicating the absence of gasoline odor and based upon the first report indicating the presence of oil, grease, and phenols inside the oil/water separator, Dade County DERM recommended to the Department that Petitioner's application for participation in the EDI program be denied. Based upon that recommendation, the Department sent Petitioner a letter dated May 23, 1990, denying Petitioner's application for participation in the EDI program. That letter stated as the two reasons for denial the following: Contamination is not the result of a discharge from a petroleum storage facility as defined in Section 376.301(11), Florida Statutes. Waste oil contamination found on the ground and groundwater was the result of poor maintenance practices by site owner/ operator. Participation in the Early Detection Incentive Program is restricted to contamination from such storage facilities pursuant to 376.3071(9), Florida Statutes. Contamination is a mixture of waste oil, grease and phenolic compounds. Participation in the Early Detection Incentive Program is limited to petroleum or petroleum products as defined in Section 37.301 [sic] (9) and (10), Florida Statutes. That letter further advised Petitioner of its right to request a hearing regarding that determination and advised Petitioner that its failure to timely request an administrative hearing would render that correspondence to be a final Order of Determination of Ineligibility. When Petitioner received that correspondence, one of its employees interpreted the letter to mean that the Department had determined that the site did not have contamination from petroleum or a petroleum product. Viewing that as good news, that employee merely put the letter in a file. No request for an administrative hearing was made by Petitioner, and the correspondence became a final Order of Determination of Ineligibility by its own terms. In 1990 the Legislature determined that all sites which had been declared ineligible by the Department would be re-determined for eligibility. The Legislature established March 31, 1991, as the new deadline by which owners or operators could request the Department to reevaluate eligibility for sites for which a timely EDI application had been filed but which had been deemed ineligible by the Department. The new legislation set forth several circumstances under which the Department would not redetermine the eligibility of a previously denied site. One of those exceptions related to the reason for which a site had initially been denied. Petitioner had remained convinced that the subject site was contaminated by petroleum or petroleum products prior to the original deadline for filing EDI applications. Petitioner was aware of the new legislation and new deadline by which sites determined ineligible could have their eligibility redetermined. Petitioner therefore retained Kiefer-Block Environmental Services, Inc., to do a site analysis to verify Petitioner's belief that the site had a petroleum contamination. That company issued a report indicating that was the case. Petitioner timely filed its application for redetermination before the March 31, 1991, deadline and submitted to the Department the information obtained from Kiefer-Block, the second environmental consultant to verify the presence of petroleum contamination. In reviewing applications for redetermination, the Department established a procedure whereby it simply looked at its original letter denying eligibility to ascertain the reason for denial. If that reason matched one of the exclusions under the new legislation, the Department advised the applicant that it was not eligible to have its site redetermined. The Department did not review the Department's files relating to a site and did no additional inspection. In 1991 the Legislature again amended the statute, this time carving out an exception to those sites excluded from redetermination of eligibility by directing that sites excluded due to an absence of contamination be redetermined for eligibility if contamination had in fact existed. That amendment went into effect July 1, 1991. Accordingly, that amendment was part of the law in effect when the Department made its decision as to whether it would redetermine Petitioner's eligibility. By letter dated September 3, 1991, the Department advised Petitioner that it was not eligible to participate in the redetermination process. That letter specifically provided as follows: This Order is to inform you that this site is not eligible to participate in the eligibility redetermination process pursuant to Section 376.3071(9)(b), F.S., because the original reasons for ineligibility were: Contamination is not the result of a discharge from a petroleum storage facility as defined in Section 376.301(11), Florida Statutes [definition in Section 376.301(15), F.S., current revision]. Waste oil contamination found on the ground and groundwater was the result of poor maintenance practices by site owner/ operator. Participation in the Early Detection Incentive Program is restricted to contamination from such storage facilities pursuant to 376.3071(9), F.S. Contamination is a mixture of waste oil, grease and phenolic compounds. Participation in the Early Detection Incentive Program is limited to petroleum or petroleum products as defined in Section 376.301(9) and (10), Florida Statutes [definitions in Section 376.301(13) and (14), F.S., current revision]. Section 376.3071(9)(b)3.c., F.S., states that redetermination of eligibility is not available to facilities that were denied eligibility due to contamination from substances that were not petroleum or a petroleum product, or contamination that was not from a petroleum storage system. Petitioner timely filed its request for an administrative hearing regarding that letter, contesting the Department's refusal to redetermine Petitioner's eligibility to participate in the EDI program.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: (1) granting Petitioner's application for redetermination of eligibility and (2) finding Petitioner ineligible to participate in the Early Detection Incentive Program. DONE and ENTERED this 26th day of August, 1992, at Tallahassee, Florida. LINDA M. RIGOT 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 26th day of August, 1992. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 92-0678 Petitioner's three unnumbered paragraphs contained in its post-hearing submittal have been rejected as not constituting findings of fact but rather as constituting conclusions of law or argument. Respondent's proposed findings of fact numbered 1-3, 5-18, and 20 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed finding of fact numbered 4 has been rejected as being unnecessary to the issues involved herein. Respondent's proposed finding of fact numbered 19 has been rejected as not being supported by the weight of the competent evidence in this cause. COPIES FURNISHED: C. Vittorino Special Projects Manager TYU, Inc. 1601 McCloskey Boulevard Tampa, Florida 33605-6710 Brigette A. Ffolkes, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Carol Browner, Secretary Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue The issue to be determined in this case is whether the Notice of Intent to Issue Order Requiring Access to Property (“Access Order”) issued by the Department of Environmental Protection (“Department”) and directed to Glenda Mahaney, as the property owner, is a valid exercise of the Department’s authority.
Findings Of Fact Petitioner Glenda Mahaney is a natural person and the owner of the property identified in the Access Order. The Department is the state agency which has been granted powers and assigned duties under chapters 376 and 403, Florida Statutes, for the protection and restoration of air and water quality and to adopt rules and issue orders in furtherance of these powers and duties. Background The groundwater beneath a parcel of land adjacent to Petitioner’s property was contaminated with petroleum when the land was used in the past for auto salvage operations. Initial groundwater sampling near the border of Petitioner’s property showed groundwater contamination by gasoline constituents which exceeded Groundwater Cleanup Target Levels (“GCTLs”). In other words, the contamination was at levels that required cleanup. However, later sampling showed the concentration of contaminants had decreased below GCTLs, probably as a result of natural attenuation. The existing data suggests that any groundwater contamination beneath Petitioner’s property is probably now at a level that would not require cleanup. However, the Department issued the Access Order because the Department is not certain about the contamination beneath Petitioner’s property and because Petitioner has continually requested further investigation. Petitioner believes contamination from the auto salvage site has caused illness in a tenant and even contributed to other persons’ deaths. However, no expert testimony was received on this subject and no finding is made about whether contamination exists on Petitioner’s property which has caused illness or death. The Department’s Site Investigation Section wants access to Petitioner’s property in order to determine whether contamination has migrated beneath Petitioner’s property and, if it has, the extent and concentration of the contaminants. The Department wants to: (a) install up to five temporary groundwater monitoring wells, (b) collect groundwater samples from the wells, (c) collect a groundwater sample from Petitioner’s potable water well, and (d) remove the monitoring wells after the sampling. The Access Order includes terms related to advance notice, scheduling, and related matters. Liability Although Petitioner believes petroleum contamination is present and wants it cleaned up, she objects to the provision of the Access Order related to liability. Paragraph 9(e) of the Access Order provides: Ms. Mahaney shall not be liable for any injury, damage or loss on the property suffered by the Department, its agents, or employees which is not caused by the [sic] negligence or intentional acts. Petitioner insists that she should not be liable under any circumstances for injuries or damages suffered by Department’s agents or employees who come on her property for these purposes. She demands that the Department come onto her property “at their own risk.” At the final hearing, the Department stated that it did not intend to impose on Petitioner a level of liability different than the liability that would already be applicable under Florida law. The Department offered to amend Paragraph 9(e) of the Access Order to indicate that Petitioner’s “liability, if any, shall be determined in accordance with Florida law.” Scope of the Investigation Petitioner objects to the proposed groundwater sampling because she does not believe it is extensive enough. Petitioner also believes the Department should test for soil contamination. The Department’s expert, David Phillips, testified that the proposed monitoring well locations were selected based on the direction of groundwater flow in the area and the wells are along the likely path of migration of any contaminated groundwater from the former auto salvage site. Another Department witness, Tracy Jewsbury, testified that no soil contamination was found on the auto salvage site, so the Department has no reason to expect there would be soil contamination on Petitioner’s property that came from the auto salvage operation. The Department will use the data collected from the wells to determine if contamination is present and whether future contamination assessment and/or remediation activities are necessary.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection withdraw the Access Order or, alternatively, that Paragraph 9(e) of the Access Order be amended to provide that Ms. Mahaney’s potential liability, if any, shall be determined in accordance with Florida law. DONE AND ENTERED this 15th day of November, 2017, in Tallahassee, Leon County, Florida. S BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us COPIES FURNISHED: Filed with the Clerk of the Division of Administrative Hearings this 15th day of November, 2017. William W. Gwaltney, Esquire Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 (eServed) Glenda Q. Mahaney Post Office Box 123 Mount Dora, Florida 32756 Lea Crandall, Agency Clerk Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 (eServed) Robert A. Williams, General Counsel Department of Environmental Protection Legal Department, Suite 1051-J Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 (eServed) Noah Valenstein, Secretary Department of Environmental Protection Douglas Building 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 (eServed
