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Case 6:12-cv-01110-EFM-JP0 Document 3-1 Filed 03/26/12 of 91

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

UNITED STATES OF AMERICA, ) AND THE STATE OF KANSAS )

) Plaintiffs, )

) )

v. ) ) )

NATIONAL COOPERATIVE ) REFINERY ASSOCIATION, )

) Defendant. )

)

Civil Action No. 6:12-cv-1110-ESAI-JP0

CONSENT DECREE

Case 6:12-cv-01110-EFM-JPO Document 3-1 Filed 03/26/12 of 91

TABLE OF CONTENTS

I. JURISDICTION AND VENUE -2-

II. APPLICABILITY -3-

III. OBJECTIVES -4-

IV. DEFINITIONS -4-

V. CIVIL PENALTY -6-

VI. INJUNCTIVE RELIEF -7-

VII. SUPPLEMENTAL ENVIRONMENTAL PROJECT -27-

VIII. REPORTING REQUIREMENTS -31-

IX. STIPULATED PENALTIES -34-

X. FORCE MAJEURE -40-

XI. DISPUTE RESOLUTION -42-

XII. INFORMATION COLLECTION AND RETENTION -45-

XIII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS -46-

XIV. COSTS -48-

XV. NOTICES -48-

XVI. EFFECTIVE DATE -49-

XVII. RETENTION OF JURISDICTION -50-

XVIII. MODIFICATION -50-

XIX. TERMINATION -50-

XX. PUBLIC PARTICIPATION -52- i


XXI. SIGNATORIES/SERVICE -52-

XXII. INTEGRATION -52-

XXII. FINAL JUDGMENT -53-

XXIII. APPENDICES -53-

ii


A. Plaintiff United States of America, on behalf of the United States Environmental

Protection Agency ("EPA") and the State of Kansas acting through the Kansas Department of

Health and Environment ("KDHE"), have filed a complaint in this action concurrently with this

Consent Decree alleging that Defendant, National Cooperative Refinery Association ("NCRA"),

violated the following environmental statutes and implementing federal and state regulations at

one or more of each Defendant's facilities: the Clean Air Act ("CAA"), 42 U.S.C. §§ 7401-

7671q for violations of (a) the federally-enforceable Kansas State Implementation Plan (the

"Kansas SIP"), (b) the New Source Performance Standards ("NSPS") of the Act, 42 U.S.C. §

7411, and (c) the Risk Management Program requirements of the Act, 42 U.S.C. § 7412(r); the

Emergency Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. §§ 11001-

11050; and the Comprehensive Environmental Response, Compensation, and Liability Act

("CERCLA"), 42 U.S.C. §§ 9601-9675. Pursuant to Section 113(a)(I) of the CAA, 42 U.S.C. §

7413(a)(1), notice of the violations of the Kansas SIP that are alleged in this complaint have been

given to the State of Kansas, and NCRA at least 30 days prior to the filing of the complaint.

B. NCRA owns and operates a 85,000 barrel per day petroleum refinery located on

Iron Horse Road, McPherson, Kansas ("Refinery") and an associated underground product

storage facility in Conway, Kansas ("Conway"), collectively, the "Facilities".

C. Defendant does not admit any liability to the United States or the State arising out

of the transactions or occurrences alleged in the Complaint.

D. The Parties recognize, and the Court by entering this Consent Decree finds, that

this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation

between the Parties and that this Consent Decree is fair, reasonable, and in the public interest.

1


NOW, THEREFORE, before the taking of any testimony, without the

adjudication or admission of any issue of fact or law except as provided in Section I, and with

the consent of the Parties, IT IS HEREBY ADJUDGED, ORDERED, AND DECREED as

follows:

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this action, pursuant

to 28 U.S.C. §§ 1331, 1345, and 1355, and Section 113(b) of the CAA, 42 U.S.C. § 7413(b);

Section 325 of EPCRA, 42 U.S.C. § 11045; and Sections 109(c) and 113 of CERCLA, 42 U.S.C.

§§ 9609(c) and 9613, and over the Parties. Venue lies in this District pursuant to Section 113(b)

of the CAA, 42 U.S.C. § 7413(b); EPCRA Section 325(b), 42 U.S.C. § 11045(b); and CERCLA

Section 113(b), 42 U.S.C. § 9613(b), and 28 U.S.C, §§ 1391 (b) and (c) and 1395(a), because the

violations alleged in the Complaint are alleged to have occurred in, and Defendant conducts

business in, this judicial district. For purposes of this Consent Decree, or any action to enforce

this Decree, Defendant consents to the Court's jurisdiction over this Consent Decree and any

such action and over Defendant and consents to venue in this judicial district.

2. For purposes of this Consent Decree, Defendant agrees that the Complaint

states claims upon which relief may be granted pursuant to the following environmental statutes

and their implementing federal and state regulations: the CAA, 42 U.S.C. §§ 7401-7671q for

violations of (a) the federally-enforceable Kansas SIP, (b) the NSPS provisions of the Act, 42

U.S.C. § 7411, and (c) the Risk Management Program requirements of the Act, 42 U.S.C. §

7412(r); EPCRA, 42 U.S.C. §§ 11001-11050; and CERCLA, 42 U.S.C. §§ 9601-9675.

2


II. APPLICABILITY

3. The obligations of this Consent Decree apply to and are binding upon the

United States and the State, and upon Defendant and any successors, assigns, or other entities or

persons otherwise bound by law.

4. No transfer of ownership or operation of the Facility, whether in

compliance with the procedures of this Paragraph or otherwise, shall relieve Defendant of its

obligation to ensure that the terms of the Consent Decree are implemented. At least 30 Days

prior to such transfer, Defendant shall provide a copy of this Consent Decree to the proposed

transferee and shall simultaneously provide written notice of the prospective transfer, together

with a copy of the proposed written agreement, to EPA Region VII, the United States Attorney

for the District of Kansas, and the United States Department of Justice, in accordance with

Section XIV of this Decree (Notices). Any attempt to transfer ownership or operation of the

Facility without complying with this Paragraph constitutes a violation of this Consent Decree.

5. Defendant shall provide a copy of this Consent Decree to all officers,

employees, and agents whose duties might reasonably include compliance with any provision of

this Consent Decree, as well as to any contractor retained to perform work required under this

Consent Decree. Defendant shall condition any such contract upon performance of the work in

conformity with the terms of this Consent Decree.

6. In any action to enforce this Consent Decree, Defendant shall not raise as

a defense the failure by any of its officers, directors, employees, agents, or contractors to take

any actions necessary to comply with the provisions of this Consent Decree.

3


III. OBJECTIVES

7. It is the purpose of the Parties to this Consent Decree to further the

objectives of the CAA, the Kansas Air Quality Act, Kan. Stat. Ann. § 65 - 3001 et seg, the

reporting requirements of CERCLA Section 103 and EPCRA Section 304, the Risk Management

Program requirements of Section 112(r)(7) of the CAA, and the recordkeeping and reporting

requirements of EPCRA Sections 312 and 313, and to settle and resolve, as provided in Section

XVIII of this Consent Decree, all allegations in the Complaint brought by the Plaintiffs in the

matter.

IV. DEFINITIONS

8. Terms used in this Consent Decree that are defined in the relevant statutes

or in regulations promulgated pursuant to the relevant statutes shall have the meanings assigned

to them in the Act or such regulations, unless otherwise provided in this Decree. Whenever the

terms set forth below are used in this Consent Decree, the following definitions shall apply:

a. "Complaint" shall mean the complaint filed by the United States

and the State in this action;

b. "Consent Decree" or "Decree" shall mean this Decree and all

appendices attached hereto listed in Section XXIII;

c. "Covered Process" as specified by 40 C.F.R. § 68.3 shall mean "a

process that has a regulated substance present in more than a threshold quantity as determined

under 40 C.F.R. § 68.115";

d. "Day" shall mean a calendar day unless expressly stated to be a

business day. In computing any period of time under this Consent Decree, where the last day

4


would fall on a Saturday, Sunday, or federal holiday, the period shall run until the close of

business of the next business day;

e. "Defendant" shall mean National Cooperative Refinery

Association ("NCRA");

f. "EPA" shall mean the United States Environmental Protection

Agency and any of its successor departments or agencies;

g. "Effective Date" shall have the definition provided in Section XV.

h. "Facilities" shall mean:

Defendant's petroleum refinery located in McPherson,

Kansas ("Refinery"); and

ii. Defendant's underground storage product facility located in

Conway, Kansas ("Conway");

i. "Paragraph" shall mean a portion of this Decree identified by an

arabic numeral;

"Parties" shall mean the United States, the State, and Defendant(s);

k. "RMP" shall mean the risk management plan required pursuant to

40 C.F.R. Part 68;

"Regulated Substance" as specified by 40 C.F.R. § 68.3 shall mean

"any substance listed pursuant to section 112(r)(3) of the Clean Air Act, as amended, in 40

C.F.R. § 68.130";

m. "Section" shall mean a portion of this Decree identified by a roman

numeral;

5


n. "State" shall mean the State of Kansas acting through the Kansas

Department of Health and Environment;

o. "United States" shall mean the United States of America, acting on

behalf of EPA;

V. CIVIL PENALTY

9. Within 30 Days after the Effective Date of this Consent Decree, Defendant

shall pay the sum of Seven Hundred Thousand Dollars ($700,000) as a civil penalty, together

with interest accruing from the date on which the Consent Decree is lodged with the Court, at the

rate specified in 28 U.S.C. § 1961 as of the date of lodging as follows: (i) $475,000 to the United

States and (ii) $225,000 to the Kansas Department of Health and Environment.

10. Defendant shall pay the civil penalty due to the United States by FedWire

Electronic Funds Transfer ("EFT") to the U.S. Department of Justice in accordance with written

instructions to be provided to Defendant, following entry of the Consent Decree, by the Financial

Litigation Unit of the U.S. Attorney's Office for the District of Kansas, 500 State Avenue, Suite

360, Kansas City, Kansas 66101, (913) 551-6730. At the time of payment, Defendant shall send

a copy of the EFT authorization form and the EFT transaction record, together with a transmittal

letter, which shall state that the payment is for the civil penalty owed pursuant to the Consent

Decree in United States and State of Kansas v. National Cooperative Refinery Association, and

shall reference the civil action number and DOJ case number 90-5-1-1-06025/3, to the United

States in accordance with Section XIV of this Decree (Notices); by email to

and by mail to:

EPA Cincinnati Finance Office 26 Martin Luther King Drive

6


Cincinnati, Ohio 45268

11. Defendant shall pay the civil penalty due to the State of Kansas (as specified

in Paragraph 9) by certified or corporate check made payable to the Kansas Department of

Health and Environment. At the time of payment, Defendant shall send a transmittal letter,

which shall state that the payment is for the civil penalty owed pursuant to the Consent Decree in

United States and Kansas v. National Cooperative Refinery Association, and shall reference the

civil action number to the following address:

Mrs Shelia Pendleton Office of Legal Services Kansas Department of Health and Environment 1000 SW Jackson, Suite 560 Topeka, KS 66612-1367

12. Defendant shall not deduct any penalties paid under this Decree pursuant

to this Section or Section VIII (Stipulated Penalties) in calculating its federal or State or local

income tax.

VI. INJUNCTIVE RELIEF

13. Unicracker Unit Heater

a. No later than 180 days after the Date of Entry, NCRA shall submit

a complete application to the Kansas Department of Health and Environment (KDHE) to amend

the Clean Fuels Project PSD construction permit dated June 27, 2005 (most recently revised

9/28/10). The application shall contain sufficient information to revise the NOx BACT emission

limit for the Unicracker Unit Heater.

i. This permit amendment shall be limited to the NOx

emission limit for the Unicracker Unit Heater, and shall not constitute a re-opening of the

existing PSD permit for the Clean Fuels Project with respect to any other requirement. 7


b. Following submission of the application to amend the June 27,

2005 (most recently revised 9/28/10) PSD construction permit, NCRA shall cooperate with

KDHE by promptly submitting all information that KDHE requests following their receipt of the

application. Upon issuance of a revised PSD construction permit, or in conjunction with such

permitting, NCRA shall file any applications necessary to incorporate the requirements of the

revised permit into the facility's CAA Title V permit.

14. Unicracker Flaring

a. No later than 180 days after the Date of Entry, NCRA shall

conduct initial training of refinery personnel responsible for the start-up of the Unicracker Unit.

The training shall include proper start-up procedures to minimize emissions during normal and

cold weather conditions. Refresher training shall be conducted for all such personnel once every

calendar year during the life of the Consent Decree.

15. Risk Management Applicability Study for Refinery

a. No later than 60 Days after the Date of Entry, NCRA shall review

all inventories, process records, and lab tests to determine, in accordance with recognized and

generally accepted good engineering practices, the quantity present at the Refinery of all

Regulated Substances (and their components) listed at 40 C.F.R. § 68.130. Such review shall be

conducted consistent with the regulations found at 40 C.F.R. Part 68.

b. For all Regulated Substances present at the Refinery (regardless of

whether a substance exists in a Covered Process) as of the Date of Entry that are either a listed

toxic substance, flammable substance, or part of a flammable mixture, NCRA shall submit a

report to EPA within 90 Days after the Date of Entry containing the following information:

8


i. A description of each process, including a list of process

streams, pressure vessels, and atmospheric tanks within each process.

ii A map including the boundaries of each process.

iii. The amount and CAS number of each Regulated

Substance present in each process stream and the total amount in each process.

iv. For materials that comprise a flammable or toxic mixture,

include a list of all 112(r) regulated components.

v. Include an explanation for omitting any Regulated

Substance or flammable mixture (including NFPA rating, if applicable) in a process that will not

be listed on the updated RMP referenced in sub-paragraph d.

c. If it is determined that a process should have been considered a

Covered Process under 40 C.F.R Part 68 and was not previously included in the RMP, NCRA

shall no later than 180 Days after the Date of Entry, develop a program and complete all required

documentation under 40 C.F.R. Part 68. NCRA shall include a notice of completion stating that

it has completed this work in the next semi-annual report submitted after that date.

d. If the review required under this paragraph determines that

corrections are required to NCRA's RMP for the refinery, NCRA shall, within 210 Days of the

Date of Entry, submit an updated RMP consistent with information found during this review.

16. EPCRA 312 Audit

a. No later than 90 Days after the Date of Entry, NCRA shall retain a

third party to conduct an EPCRA 312 Audit of the Tier II Forms for the Refinery and Conway

submitted by NCRA for reporting year 2010.

.9


i. This EPCRA 312 Audit shall consider (1) all materials at

the Refinery and Conway that are Extremely Hazardous Substances (EHSs) listed in 40 C.F.R.

Part 355 Appendix A and B, or that contain more than 1% by weight of a listed EHS (or 0.1% by

weight for a carcinogenic chemical, as provided in 40 C.F.R. § 370.14(c)); and (2) all hazardous

chemicals for which MSDSs must be developed under 29 C.F.R. § 1910.1200, and which are

present in quantities greater than or equal to 10,000 pounds.

ii The EPCRA 312 Audit shall also review the practices used

by NCRA to gather and track information relevant to Tier II reports, as well as the NCRA's

procedures for training personnel to perform related tasks.

b. At NCRA's option, the EPCRA 312 Audit may also review the

Tier II forms for the Refinery and/or Conway for reporting years 2007, 2008, and/or 2009.

c. No later than 120 Days after the Date of Entry, NCRA shall correct

any Tier II forms identified by NCRA or the third party referenced in subparagraph a. as having

inaccurate information and submit the revised forms to the Conway and/or McPherson fire

departments (as applicable), the LEPC, and Kansas SERC. For materials listed in the

resubmitted Tier II reports that contain more than 1% by weight of an EHS (or 0.1% by weight

for a carcinogenic chemical), NCRA will provide the EHS constituent information in the Mixture

Component Information section (6b) of the Kansas Tier II form.

d. In its next semi-annual report submitted more than 120 Days after

the Date of Entry, NCRA shall include a report summarizing the findings of the EPCRA 312

Audit. The report shall include the following information:

i. what reporting periods were reviewed;

10


ii. what records were reviewed;

iii. what revised reports were submitted to which entities; and

iv. any revised procedures, processes, or training materials for

completing and ensuring the accuracy of Tier II Forms that are developed in response to audit

findings.

e. In its Tier II submittals for the Refinery and Conway for reporting

year 2011, NCRA shall provide the EHS constituent information in the Mixture Component

Information section (6b) of the Kansas Tier II form for materials included on the Tier II form

that contain more than 1% by weight of an EHS.

17. EPCRA 313 Audit

a. No later than 90 Days after the Date of Entry, NCRA shall retain a

third party to conduct a data quality review of TRI submittals (Form R's and/or Form A's) for

the Refinery and Conway for reporting year 2010. This EPCRA 313 Audit shall consider the

quantities of toxic chemicals listed in 40 C.F.R. § 372.65 that are manufactured, processed, or

otherwise used (as those terms are defined in 40 C.F.R. Part 372) at the Refinery and Conway.

The Audit shall verify that all appropriate substances have been identified as potentially needing

to be reported, and that the calculation methodologies used by NCRA to determine whether

thresholds are being met or exceeded and the amounts being reported as released are accurate,

i. The EPCRA 313 Audit shall include a review of relevant

MSDSs, inventories, purchase records, sales records, and release records for the chemicals listed

in 40 C.F.R. § 372.65, as well as for substances containing more than a de minimis concentration

(as that term is defined in 40 C.F.R. § 372.38(a)) of a chemical listed in 40 C.F.R. § 372.65.

11


The EPCRA 313 Audit shall also review the practices used

by NCRA to gather information relevant to TRI submittals, as well as NCRA's procedures for

training personnel to perform related tasks.

b. At NCRA's option, the EPCRA 313 Audit may also include a data

quality review of TRI submittals for the Refinery and Conway for reporting years 2007, 2008,

and/or 2009.

c. No later than 120 Days after the Date of Entry NCRA shall update

any TRI submittal identified in the EPCRA 313 Audit as having contained inaccurate

information. NCRA will submit the revised forms to EPA and the Kansas Department of Health

and Environment, Bureau of Environmental Health.

d. In its next semi-annual report submitted more than 120 Days after

the Date of Entry, NCRA shall include a report summarizing the findings of the EPCRA 313

Audit. The report shall include the following information:

i. what reporting periods were reviewed;

ii. what records were reviewed;

iii. what revised reports were submitted to which entities; and

iv. any revised procedures, processes, or training materials for

completing and ensuring the accuracy of TRI submissions that are developed in response to audit

findings.

e. With respect to listed chemicals that are also regulated under CAA

Section 112(r), NCRA shall ensure that the maximum inventory information on the TRI

submittals for the first reporting year after the Date of Entry is updated according to the RMP

12


Applicability Review conducted under Paragraph 15.

18. CERCLA/EPCRA Reporting Compliance Review. NCRA shall conduct a

CERCLA/EPCRA Reporting Compliance Review, for both the Refinery and Conway facilities,

of the one (1) calendar year (January 1 — December 31) preceding the Date of Entry to identify

any releases that may have been reportable under Section 103(a) of CERCLA, 42 U.S.C. §

9603(a), and Section 304 of EPCRA, 42 U.S.C. § 11004, or similar or corresponding state

reporting regulations. NCRA shall complete the following activities no later than one hundred

and twenty (120) Days after the Date of Entry:

a. For the releases that occurred on or about: November 28, 2005 —

December 22, 2005, January 9-11, 2006, February 2, 2007, June 8-11, 2007; and for all releases

identified in the Compliance Review for which NCRA seeks a resolution of liability, NCRA

shall:

i. Submit a CERCLA/EPCRA Compliance Review Report to

EPA Region 7 that identifies potential violations of Section 103(a) of CERCLA and Section 304

of EPCRA, or similar or corresponding state reporting regulations;

ii. For any EPCRA 304(a) or CERCLA 103 release reports

where a substance was not reported to the NRC, State of Kansas, or LEPC, make the necessary

notifications; and

iii. For EPCRA 304(a) release reports where the amount

released was inaccurate, update and resubmit the written follow-up reports required under

304(c).

13


b. Based on the Compliance Review, correct and/or update release

reporting procedures as necessary and identify any specific steps NCRA shall take to ensure

compliance in the future. NCRA shall submit a copy of any corrected reporting procedures for

both the Refinery and Conway to EPA with the next semi-annual report submitted after the

Compliance Review is completed; and

c. Conduct training for NCRA's environmental compliance personnel

to instruct them on the reporting requirements of Section 103(a) of CERCLA, 42 U.S.C.

§9603(a), and Section 304 of EPCRA, 42 U.S.C. § 11004, or similar or corresponding state

reporting regulations, and to acquaint these personnel with the procedures adopted by NCRA to

meet those requirements. NCRA shall certify completion of the training with the next semi-

annual report submitted after the training is completed.

19. EPCRA/CERCLA Continuous Release Review . For the one (1)

reporting year prior to the Date of Entry, NCRA shall conduct an audit of all CERCLA/EPCRA-

reportable releases of hazardous substances (as designated in CERCLA Section 102(a)) and

extremely hazardous substances (as defined under 40 C.F.R. Part 355, Appendices A and B)

from the Refinery and Conway and determine whether any Continuous Release Report(s) in

accordance with 40 C.F.R. Parts 302 and 355 is appropriate for either facility.

a. NCRA shall complete the following activities no later than one

hundred and twenty (120) Days after the Date of Entry:

i. For all continuous releases for which NCRA seeks a

resolution of liability, submit a Continuous Release Review Report to EPA and the Kansas

SERC that identifies releases at the Refinery and Conway which should have been reported as

14


"Continuous," within the meaning of 40 C.F.R. § 302.8 or 355.32, or similar or corresponding

state reporting regulations;

ii. Complete notification calls to the LEPC, SERC, and NRC

for each facility;

iii. Based on the Continuous Release Review, correct and/or

update release reporting procedures and identify specific steps NCRA shall take to ensure

compliance in the future. NCRA shall submit a copy of any corrected procedures to EPA for

both facilities in the next semi-annual report filed after the completion of the Continuous Release

Review Report; and

iv. Conduct training for NCRA's environmental compliance

personnel to instruct them on the reporting requirements of 40 C.F.R. Part 302, or similar or

corresponding state reporting regulations, and to acquaint these personnel with the procedures

adopted by NCRA. NCRA shall certify completion of the training with the next semi-annual

report submitted after the training is completed.

b. No later than thirty Days after the notification calls are made

NCRA shall submit any initial written notification reports required under 40 C.F.R. Parts 302

and 355 to the LEPC, SERC, and NRC.

c. A year after notification calls are made, NCRA shall review

information concerning all releases for the past year to determine if the information reported in

the Refinery's and Conway's continuous release reports are still accurate. Within 1 year and 30

Days of any notification calls NCRA shall submit the written follow-up notification report to the

EPA, as required under 40 C.F.R. Part 302.

15


20. EPCRA 312 Tier II Fees. No later than 30 Days of the Date of Entry,

NCRA shall pay the retroactive Kansas Tier H fees to KDHE for Conway for calendar years

2005, 2006, 2007, and 2008. NCRA shall provide proof of the payment to EPA in its next semi-

annual report.

21. Refinery Risk Management -- Toxic Worst Case Analysis.

a. Within 210 Days of the Date of Entry, NCRA shall determine the

off-site impacts (as defined by 40 C.F.R. §§ 68.30 and 68.33) within the toxic worst case circle

of the Rapid Acid Transfer System (RATS) vessel and update the RMP to include the identified

off-site impacts.

b, NCRA will include a notice of completion stating that it has

completed this work in the next semi-annual report submitted after that date.

22. Refinery Risk Management -- Process Safety Information. For all

pressure vessels and tanks (and their associated pressure-relief valves) and atmospheric storage

vessels in the Alkylation Unit (including tanks E-30 and E-31), as well as tanks E-32 and E-33

and their associated pressure-relief valves, NCRA shall:

a. Compile and document written information pertaining to the

applicable design codes and standards;

b. Document compliance with recognized and generally accepted

good engineering practices; and

c. For any such pressure vessels and tanks (and their associated

pressure-relief valves) and atmospheric storage vessels designed or constructed in accordance

16

Case 6:12-cv-01110-EFM-JPO Document 34 Filed 03/26/12 of 91

with codes, standards, or practices that are no longer in general use, determine and document

whether that equipment is designed, inspected, tested, maintained, and operated in a safe manner.

d. NCRA will comply with the requirements of this paragraph within

180 Days of the Date of Entry. NCRA will include a notice of completion stating that it has

completed this work in the next semi-annual report submitted after that date.

23. Refinery Risk Management -- Special Tank /Container Report. NCRA

shall, within ninety (90) Days after the Date of Entry, submit a report to EPA containing

information as described below.

a. The reporting requirements of this Paragraph shall be limited to the

following equipment in the Risk Management Program processes at the NCRA refinery:

E-30, E-31, E-32, E-33;

ii. VV-0247 (the Number 2 Acid Settler);

iii. VV-0436 (the Number I Acid Settler);

iv. any equipment that contains 250,000 pounds or more of a

RMP-regulated flammable substance or 250 pounds or more of hydrogen fluoride/hydrofluoric

acid; and

v, pressure-relieving devices for this specified equipment.

b. The report shall include, at a minimum:

i. the date of the most recent internal, external and, if

performed, on-stream inspection/test;

ii the scheduled date for the next planned internal, external

and, if applicable, on-stream inspection/test; 17

Case 6:12-cv-01110-E.FM-JP0 Document 3-1 Filed 03/26/12 of 91

iii. an explanation of how the frequency of inspections

referenced in Subparagraphs 23.b.i and 23.b.ii are consistent with applicable manufacturer's

recommendations, good engineering practices, and industry standards;

iv. for inspections conducted at intervals prescribed by

NCRA's Risk-Based Inspection Program, provide: an explanation and supporting documentation

of how the relevant inspection interval is consistent with generally accepted good engineering

practices and/or manufacturers' recommendations;

v. for the most recent internal, external and, if performed, on-

stream inspection(s)/test(s) provide:

I. the date of the inspection(s)/test(s);

2. the serial number or other identifier of the equipment on

which the inspection(s)/test(s) were performed;

3. a description of the inspection(s)/test(s) performed;

4. the name and credentials of the inspector(s);

5. the name of inspector's employer;

6. the inspector's certification(s) to perform the relevant

inspections;

7. the inspector's report of the results of the

inspection(s)/test(s); and

8. any subsequent reports or action cards addressing findings

resulting from the most recent inspections/tests;

18


vi. all process safety documentation required pursuant to

Paragraph 22 above for the equipment referenced in this Paragraph. In addition, when applicable

under standards, determine and document the calculated life of the equipment referenced in this

Paragraph, or provide documentation explaining why such a determination is not needed; and

vii. A certification of the contents of the Report, pursuant to

Paragraph 44 (Certification).

24. Refinery Risk Management -- Process Hazard Analysis (PHA).

a. NCRA shall, with the first semi-annual report submitted more than

ninety (90) Days after the Date of Entry, submit the most recent PHA report(s) for the Alkylation

Unit and the most recent PHA report(s) for the Terminal Control Center that concern tanks E-32

and E-33, as well as PHA reports detailing the steps taken and further planned actions, including

an approximate schedule, to resolve all action items identified in those reports.

b. NCRA shall submit, in each subsequent semi-annual report,

information describing the steps taken to address the PHA findings and recommendations for the

Alkylation Unit and any PHA findings and recommendations for the Terminal Control Center

pertaining to tanks E-32 and E-33, until all identified findings and recommendations are resolved

or until such time as EPA notifies NCRA in writing that no further reports are required.

c. NCRA shall, by December 31, 2012, resolve all findings and

recommendations that do not require significant capital costs / engineering estimates. If

resolution of all findings and recommendations cannot be completed within the timeframe

established above, NCRA shall, by November 30, 2012, submit documentation to EPA that:

i. identifies unresolved findings and recommendations; 19


ii summarizes steps taken to date to resolve these findings

and recommendations;

iii explains reasons the resolution has not been completed;

iv. provides anticipated actions to resolve the findings and

recommendations; and

v. provides a time line for completion.

d. For PHA items that do require significant capital costs /

engineering estimates. NCRA shall, by December 31, 2014, resolve all findings and

recommendations for the Alkylation Unit; and by December 31, 2013, resolve all findings and

recommendations for the Terminal Control Center pertaining to tanks E-32 and E-33. If

resolution of these findings and recommendations cannot be completed within the timeframe

established above, NCRA shall, thirty (30) Days prior to the respective deadlines established in

this Paragraph, submit documentation to EPA that:

i. identifies unresolved findings and recommendations;

ii. summarizes steps taken to date to resolve these findings


iii. explains reasons the resolution has not been completed;




25. Refinery Risk Management 2010 Compliance Audit.

20


a. NCRA shall, in the first semi-annual report filed more than ninety

(90) Days after the Date of Entry, submit a report to EPA detailing the responses to each of the

findings identified in the 2010 Refinery Compliance Audit. This report shall:

i. identify the disposition of each finding identified in the

2010 Compliance Audit, including any findings that have been closed out;

provide a synopsis of the resolution of each finding; and

iii. for findings that have not been closed out, provide a

summary of the steps taken as of the date of the report, describe further planned actions, and set

forth a schedule for the resolution of each open finding.

b. NCRA shall submit in its semi-annual reports, information

describing the steps taken to resolve all 2010 Compliance Audit findings and recommendations

until all identified findings and recommendations are resolved or until such time as EPA notifies

NCRA in writing that no further reports are required.

26. Conway Risk Management - Propane Caverns.

a. No later than 180 Days after the Date of Entry, NCRA shall

modify the Risk Management program for Conway to include all applicable requirements of 40

C.F.R. Part 68 for the caverns actively used to store propane at Conway.

b. In the first semi-annual report submitted more than 180 Days after

the Date of Entry, NCRA shall include a written report which includes Process Safety

Information/Mechanical Integrity information for the caverns actively used to store propane

including:

21


i. identification of any KDHE regulations and/or applicable

industry standards concerning process safety or mechanical integrity used for the caverns

actively used to store propane;

ii. the date of the most recent inspection/test;

iii. the scheduled date for the next planned inspection/test; and

iv. an explanation of how the inspection frequencies are

consistent with applicable KDHE regulations, good engineering practices, and industry

standards. If the last test/inspection is outside the timeframe allowed by KDHE regulations

and/or industry standards it shall be tested/inspected no later than 180 Days after the Date of

Entry.

c. In the first semi-annual report submitted more than 210 Days after

the Date of Entry, NCRA shall include a notice of completion stating that it has completed all

work required in Subparagraphs (a) and (b).

d. No later than 210 Days after the Date of Entry, NCRA shall submit

an updated Risk Management Plan for Conway that includes the caverns actively used to store

propane.

27. Conway Risk Management - RMP Applicability Study for Conway.

No later than 60 Days after the Date of Entry, NCRA shall review all

inventories and meter records to determine, in accordance with recognized and generally

accepted good engineering practices, the quantity present at Conway of all Regulated Substances

(and their components) listed at 40 C.F.R. § 68.130. Such review shall be conducted consistent

with the regulations found at 40 C.F.R. Part 68. 22


a. For all Regulated Substances used or stored at Conway (regardless

of whether a substance exists in a Covered Process) as of the Date of Entry that are either a listed

toxic substance, flammable substance, or part of a flammable mixture, NCRA shall submit a

report to EPA within 90 Days after the Date of Entry containing the following information:

i. A description of each process, including a list of all caverns

and other vessels containing any Regulated Substance;

ii. A map indicating the location of each cavern or other

vessel containing a Regulated Substance;

iii. The amount and CAS number of each Regulated

Substance present in each cavern or vessel and the total amount in each process;

iv. The maximum intended amounts of each Regulated

Substance present (in pounds), considering administrative controls;

v. For materials that comprise a flammable or toxic mixture,

include a list of all 112(r)-regulated components and NFPA rating.

vi. Include an explanation for omitting any Regulated

Substance or flammable mixture (including NFPA rating, if applicable) in a process that will not

be listed on the updated RMP referenced in sub-paragraph c.

b. If it is determined that caverns or other vessels should have been

considered Covered Processes, or part of a Covered Process, under 40 C.F.R. Part 68 and were

not previously included in the RMP, NCRA shall no later than 180 Days after the Date of Entry

develop a program and complete all required documentation under 40 C.F.R. Part 68, NCRA

23


shall include a notice of completion stating that it has completed this work in the next semi-

annual report submitted after that date.

c. If the review required under this paragraph determines that

corrections are required to NCRA's RMP for Conway, NCRA shall, within 210 Days after the

Date of Entry, submit an updated RMP consistent with the information found during this review.

28. Conway Risk Management - Process Safety Information for Conway.

a. NCRA shall develop a comprehensive, written list of maximum

inventories for each RMP-covered cavern (including caverns actively used to store propane) at

Conway, as determined by sonar surveys and/or administrative controls. NCRA shall conduct

training to acquaint the operators with the maximum intended inventories, including procedures

for locating any updated or revised maximum inventories.

b. In the first semi-annual report submitted more than 90 Days after

the Date of Entry, NCRA shall include a notice of completion stating that it has completed all

work required in this paragraph.

29. Conway Risk Management - Process Hazard Analysis for Conway.

a. NCRA shall commence a Process Hazard Analysis for all covered

processes at Conway, including the caverns actively used to store propane no later than January

4, 2012. NCRA shall submit to EPA the PHA report and a report of the findings and planned

actions, including an approximate schedule for the completion of all findings, no later than April

1, 2012.

b, NCRA shall submit, in each semi-annual report, information

describing the steps taken to address all findings and recommendations until all identified 24


findings and recommendations are resolved or until such time as EPA notifies NCRA in writing

that no further reports are required.

c. NCRA shall, by April 1, 2014, resolve all findings and

recommendations that do not require significant capital costs / engineering estimates. If

resolution of all findings and recommendations cannot be completed within the timeframe

established above, NCRA shall, by March 1, 2014, submit documentation to EPA that:

i. identifies unresolved findings and recommendations;







d. For PHA items that do require significant capital costs

/engineering estimates, NCRA shall, by December 31, 2015 resolve all findings and

recommendations. If resolution of these findings and recommendations cannot be completed

within the timeframe established above, NCRA shall, by November 30, 2015, submit

documentation to EPA that:

identifies unresolved findings and recommendations;




25





30. Conway Risk Management - Compliance Audit for Conway.

a. By June 1, 2013, NCRA shall commence a compliance audit at

Conway (ensuring that the caverns actively used to store propane are included in the review)

consistent with 40 C.F.R. § 68.79. The Compliance Audit and a report of the audit findings and

planned actions, including an approximate schedule for the resolution of all findings, shall be

submitted to EPA in the semi-annual report to be submitted in January 2014.

b. NCRA shall submit in each subsequent semi-annual report

information describing the steps taken to resolve all Conway Compliance Audit findings and

recommendations until all identified findings and recommendations are resolved or until such

time as EPA notifies NCRA in writing that no further reports are required. NCRA shall by June

1, 2015, resolve all findings and recommendations of the Compliance Audit. If resolution of all

findings and recommendations cannot be completed within the time frame established above,

NCRA shall, by May 1, 2015 submit documentation to EPA that:

identifies unresolved findings and recommendations;

ii. summarizes steps taken to resolve these findings and

recommendations;



recommendations; and provides a time line for completion.

26


VII. SUPPLEMENTAL ENVIRONMENTAL PROJECTS

31. Defendant shall implement the Supplemental Environmental Projects

("SEPs"), in accordance with all provisions of Appendix A of this Consent Decree. The SEPs

shall be completed in accordance with the schedule set forth in Appendix A.

32. Defendant is responsible for the satisfactory completion of the SEPs in

accordance with the requirements of this Decree. "Satisfactory completion" means purchase and

delivery of the equipment identified in Appendix A of this Consent Decree to the intended

recipient. As to the "Reverse 911" SEP identified in Appendix A, Paragraph 5, satisfactory

completion shall mean contracting and funding of the "Reverse 911" program and the

satisfactory performance of that contract. Defendant may use contractors or consultants in

planning and implementing any SEP, but Defendant remains responsible for the satisfactory

completion of the SEPs.

33. NCRA certifies that it is not a party to any open federal financial

assistance transaction that is funding or could be used to fund the same activity as the SEPs.

NCRA further certifies that, to the best of its knowledge and belief after reasonable inquiry, there

is no such open federal financial transaction that is funding or could be used to fund the same

activity as the SEPs, nor has the same activity been described in an unsuccessful federal financial

assistance transaction proposal submitted to EPA within two years of the date of this settlement

(unless the project was barred from funding as statutorily ineligible). For the purposes of this

certification, the term "open federal financial assistance transaction" refers to a grant,

cooperative agreement, loan, federally-guaranteed loan guarantee or other mechanism for

providing federal financial assistance whose performance period has not yet expired. 27


34. With regard to the SEPs, Defendant certifies the truth and accuracy of

each of the following:

a. that all cost information provided to EPA in connection with

EPA's approval of the SEPs is complete and accurate and that Defendant in good faith estimates

that the cost to implement each SEP is set forth in Appendix A;

b. that, as of the date of executing this Decree, Defendant is not

required to perform or develop the SEPs by any federal, state, or local law or regulation and is

not required to perform or develop the SEPs by agreement, grant, or as injunctive relief awarded

in any other action in any forum;

c. that the SEPs are not projects that Defendant was planning or

intending to construct, perform, or implement other than in settlement of the claims resolved in

this Decree;

d. that Defendant has not received and will not receive credit for the

SEPs in any other enforcement action; and

e. that Defendant will not receive any reimbursement for any portion

of the SEPs from any other person.

35. SEP Completion Report

a. Within 30 Days after the date set for completion of all SEPs

identified in Appendix A, except the Reverse 911 SEP, Defendant shall submit a SEP

Completion Report to the United States and the State, in accordance with Section XV of this

Consent Decree (Notices). Within 30 Days after the date set for completion of the Reverse 911

SEP, identified in Appendix A, Paragraph 5, Defendant shall submit a SEP Completion Report to

28


the United States and the State in accordance with Section XV of this Consent Decree. The SEP

Completion Reports shall contain the following information:

i. a detailed description of the SEP as implemented;

ii. a description of any problems encountered in completing

the SEP and the solutions thereto;

iii. an itemized list of all eligible SEP costs expended;

iv. certification that each SEP has been fully implemented

pursuant to the provisions of this Decree; and

v. a description of the environmental and public health

benefits resulting from implementation of the SEPs (with a

quantification of the benefits and pollutant reductions, if

feasible).

36. EPA may, in its sole discretion, require information in addition to that

described in the preceding Paragraph, in order to evaluate Defendant's completion report.

37. After receiving the SEP Completion Report, and consulting the State, the United

States shall notify Defendant whether or not Defendant has satisfactorily completed the SEPs. If

Defendant has not completed the SEPs in accordance with this Consent Decree, stipulated

penalties may be assessed under Section IX of this Consent Decree. Unless the United States has

notified Defendant that it contends that Defendant has not satisfactorily completed all SEPs, the

stipulated penalties associated with that failure will cease to accrue after sixty (60) Days after the

receipt of the Completion Report. However, stipulated penalties will continue to accrue once the

United States provides such notice.

29


38. Disputes concerning the satisfactory performance of the SEPs and the

amount of eligible SEP costs may be resolved under Section XI of this Decree (Dispute

Resolution). No other disputes arising under this Section shall be subject to Dispute Resolution.

39. Each submission required under this Section shall be signed by an official

with knowledge of the SEP and shall bear the certification language set forth in Paragraph 44.

40. Any public statement, oral or written, in print, film, or other media, made

by Defendant making reference to the SEP under this Decree shall include the following

language: "This project was undertaken in connection with the settlement of an enforcement

action, United States v. NCRA, taken on behalf of the U.S. Environmental Protection Agency

under the Clean Air Act, Comprehensive Environmental Response, Compensation, and Liability

Act, and/or the Emergency Planning and Community Right to Know Act."

41. For federal income tax purposes, Defendant agrees that it will neither

capitalize into inventory or basis nor deduct any costs or expenditures incurred in performing the

SEPs.

VIII. REPORTING REQUIREMENTS

42. Defendant shall submit the following reports:

a. Within thirty (30) calendar Days after the end of the first semi-

annual period after lodging of the Consent Decree (i.e., January 31 or July 31), and on each

subsequent January 31 and July 31 thereafter, until termination of this Decree pursuant to

Section XIX, Defendant shall submit to EPA and the State a semi-annual report for the preceding

six month period that shall include:

30


Paragraph 13;

Paragraph 14;

i. The status of permit applications/modifications pursuant to

ii. The date of the latest training conducted pursuant to

iii. A description of any problems anticipated with respect to

meeting the requirements of this Decree together with implemented or proposed solutions;

iv. A description of all Supplemental Environmental Projects

and implementation activity in accordance with this Decree, including, at a minimum, a narrative

description of activities undertaken; status of any construction or compliance measures,

including the completion of any milestones set forth in the SEP Work Plan attached as Appendix

A to this Decree, and a summary of costs incurred since the previous report;

v. Any such additional matters as Defendant believes should

be brought to the attention of the United States and the State of Kansas; and

vi. Any additional items required by any other Paragraph of

this Consent Decree to be submitted with a semi-annual report including but not limited to

reports required under Paragraphs 15, 16, 17, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28, 29, and 30.

vii. The report shall also include a description of any non-

compliance with the requirements of this Consent Decree and an explanation of the violation's

likely cause and of the remedial steps taken, or to be taken, to prevent or minimize such

violation. If Defendant violates, or has reason to believe that it may violate, any requirement of

this Consent Decree, Defendant shall notify the United States and the State of such violation and

its likely duration, in writing, within ten working Days of the Day Defendant first becomes

aware of the violation, with an explanation of the violation's likely cause and of the remedial 31

Case 6:12-cv--01110-EFM-JPO Document 3-1 Filed 03/26/12 of 91

steps taken, or to be taken, to prevent or minimize such violation. If the cause of a violation

cannot be fully explained at the time the report is due, Defendant shall so state in the report.

Defendant shall investigate the cause of the violation and shall then submit an amendment to the

report, including a full explanation of the cause of the violation, within 30 Days of the Day

Defendant becomes aware of the cause of the violation. Nothing in this Paragraph or the

following Paragraph relieves Defendant of its obligation to provide the notice required by

Section X of this Consent Decree (Force Majeure).

43. All reports shall be submitted to the persons designated in Section XV of

this Consent Decree (Notices).

44. Each report submitted by Defendant under this Section shall be signed by

an official of the submitting party and include the following certification:

I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted, Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.

This certification requirement does not apply to emergency or similar notifications where

compliance would be impractical.

45. The reporting requirements of this Consent Decree do not relieve

Defendant of any reporting obligations required by the CAA, EPCRA and/or CERCLA or

32


implementing regulations, or by any other federal, state, or local law, regulation, permit, or other

requirement.

46. Any information provided pursuant to this Consent Decree may be used

by the United States in any proceeding to enforce the provisions of this Consent Decree and as

otherwise permitted by law.

47. If Defendant submits a report that fails to contain the information required

by this Decree, within 30 Days of notification by EPA, Defendant shall correct all deficiencies

and resubmit the report.

IX. STIPULATED PENALTIES

48. Defendant shall be liable for stipulated penalties to the United States and

the State (as applicable) for violations of this Consent Decree as specified below, unless excused

under Section X (Force Majeure). A violation includes failing to perform any obligation

required by the terms of this Decree, including any work plan or schedule approved under this

Decree, according to all applicable requirements of this Decree and within the specified time

schedules established by or approved under this Decree.

49. Late Payment of Civil Penalty

If Defendant fails to pay the civil penalty required to be paid under Section V of

this Decree (Civil Penalty) when due, Defendant shall pay a stipulated penalty of $1,500 per Day

for each Day that the payment is late. Stipulated penalties assessed under this Paragraph shall be

paid 50% to the United States and 50% to the State of Kansas.

50. Compliance Milestones

33


a. Non-Compliance with Unicracker Unit Heater Requirements.

Defendant shall be liable for stipulated penalties in the amount set forth below, for failure to

timely and adequately comply with the requirements of Paragraph 13:

Penalty Per Violation Per Day Period of Noncompliance

$ 500 1st through 30th Day

$2,500 31st Day and beyond

Stipulated penalties assessed under this Paragraph shall be apportioned 50% to the United States

and 50% to the State of Kansas.

b. Non-Compliance with Unicracker Flaring Requirements. Defendant

shall be liable for stipulated penalties in the amount set forth below, for failure to timely and

adequately comply with the requirements of Paragraph 14:




Stipulated penalties assessed under this Paragraph shall be apportioned 50% to the United States

and 50% to the State of Kansas.

c. Non-Compliance with Requirements for Risk Management Program.

Defendant shall be liable for stipulated penalties to the United States in the amount set forth

below, for failure to timely and adequately comply with the requirements , of Paragraphs 15 and

21 through 30:



34



d. Failure To Conduct CERCLA/EPCRA Reporting Compliance

Review. Defendant shall be liable for stipulated penalties to the United States in the amount set

forth below, for failure to timely and adequately comply with the requirements of Paragraph 18.




e. Failure To Perform CERCLA/EPCRA Continuous Release Review.

Defendant shall be liable for stipulated penalties to the United States in the amount set forth

below, for failure to timely and adequately comply with the requirements of Paragraph 19:




f. Failure To Perform EPCRA 312 and 313 Audit. Defendant shall be

liable for stipulated penalties to the United States in the amount set forth below, for failure to

timely and adequately comply with the requirements of Paragraphs 16 and 17:




g. Failure To Submit Payment of Tier II fees. Defendant shall be liable

for stipulated penalties to the United States in the amount set forth below, for failure to timely

and adequately comply with the requirements of Paragraph 20:





51. Reporting Requirements. Defendant shall be liable for stipulated penalties

to the United States in the amount set forth below, for failure to timely and adequately comply

with the reporting requirements of Section VIII of this Consent Decree:




52. SEP Compliance

a. If Defendant fails to satisfactorily complete any SEP by the

deadlines set forth in Appendix A, Defendant shall pay stipulated penalties to the United States

for each day for which it fails to satisfactorily complete that SEP, as follows:


$400 1st through 30th Day


b. If Defendant halts or abandons payment or delivery of any SEP,

Defendant shall pay a stipulated penalty to the United States equal to the estimated cost of the

SEP reflected in Appendix A.

36


c. If Defendant fails to comply with the milestone in Appendix A to

this Consent Decree for initiation of Reverse 911 coverage, Defendant shall pay stipulated

penalties to the United States for each failure to meet an applicable deadline, as follows:


$150 1st through 30th Day

$500 31st Day and beyond

53. Except as provided in subparagraphs 53.b, stipulated penalties under this

Section shall begin to accrue on the Day after performance is due or on the Day a violation

occurs, whichever is applicable, and shall continue to accrue until performance is satisfactorily

completed or until the violation ceases. Stipulated penalties shall accrue simultaneously for

separate violations of this Consent Decree.

54. Non-Compliance with Any Decree Requirement Not Specifically

Identified in Section IX. For any term, condition or requirement of this Decree for which a

specific penalty is not provided in Section IX, Defendant shall pay stipulated penalties to the

United States in the amount of $400 per Day, per violation.

55. Defendant shall pay any stipulated penalty within 30 Days of receiving the

United States' written demand.

56. Either Plaintiff may in the unreviewable exercise of its discretion, reduce

or waive stipulated penalties otherwise due it under this Consent Decree.

57. Stipulated penalties shall continue to accrue as provided in Paragraph 55,

during any Dispute Resolution, but need not be paid until the following:

37


a. If the dispute is resolved by agreement or by a decision of EPA or

the State that is not appealed to the Court, Defendant shall pay accrued penalties determined to

be owing, together with interest, to the United States or the State, as applicable, within 30 Days

of the effective date of the agreement or the receipt of EPA's or the State's decision or order.

b. If the dispute is appealed to the Court and the United States, or the

State, as applicable, prevails in whole or in part, Defendant shall pay all accrued penalties

determined by the Court to be owing, together with interest, within 60 Days of receiving the

Court's decision or order, except as provided in subparagraph c, below.

c. If any Party appeals the District Court's decision, Defendant shall

pay all accrued penalties determined to be owing, together with interest, within 15 Days of

receiving the final appellate court decision.

58. Defendant shall pay stipulated penalties owing to the United States or the

State in the manner set forth and with the confirmation notices required by Paragraphs 10 and 11,

respectively, except that the transmittal letter shall state that the payment is for stipulated

penalties and shall state for which violation(s) the penalties are being paid.

59. If Defendant fails to pay stipulated penalties according to the terms of this

Consent Decree, Defendant shall be liable for interest on such penalties, as provided for in

28 U.S.C. § 1961, accruing as of the date payment became due. Nothing in this Paragraph shall

be construed to limit the United States or the State from seeking any remedy otherwise provided

by law for Defendant's failure to pay any stipulated penalties.

60. Subject to the provisions of Section XIII of this Consent Decree (Effect of

Settlement/Reservation of Rights), the stipulated penalties provided for in this Consent Decree

38


shall be in addition to any other rights, remedies, or sanctions available to the United States for

Defendant's violation of this Consent Decree or applicable law. Where a violation of this

Consent Decree is also a violation of relevant statutory or regulatory requirements, Defendant

shall be allowed a credit, for any stipulated penalties paid, against any statutory penalties

imposed for such violation.

X. FORCE MAJEURE

61. "Force Majeure," for purposes of this Consent Decree, is defined as any

event arising from causes beyond the control of Defendant, of any entity controlled by

Defendant, or of Defendant's contractors, that delays or prevents the performance of any

obligation under this Consent Decree despite Defendant's best efforts to fulfill the obligation.

The requirement that Defendant exercise "best efforts to fulfill the obligation" includes using best

efforts to anticipate any potential Force Majeure event and best efforts to address the effects of

any such event (a) as it is occurring and (b) after it has occurred to prevent or minimize any

resulting delay to the greatest extent possible. "Force Majeure" does not include Defendant's

financial inability to perform any obligation under this Consent Decree.

62. If any event occurs or has occurred that may delay the performance of any

obligation under this Consent Decree, whether or not caused by a Force Majeure event,

Defendant shall provide notice orally or by electronic or facsimile transmission, pursuant to

Paragraph 89, within seven (7) Days of when Defendant first knew that the event might cause a

delay. Within fourteen (14) Days thereafter, Defendant shall provide in writing to EPA and the

State an explanation and description of the reasons for the delay; the anticipated duration of the

delay; all actions taken or to be taken to prevent or minimize the delay; a schedule for

39


implementation of any measures to be taken to prevent or mitigate the delay or the effect of the

delay; Defendant's rationale for attributing such delay to a Force Majeure event if it intends to

assert such a claim; and a statement as to whether, in the opinion of Defendant, such event may

cause or contribute to an endangerment to public health, welfare or the environment. Defendant

shall include with any notice all available documentation supporting the claim that the delay was

attributable to a Force Majeure. Failure to comply with the above requirements shall preclude

Defendant from asserting any claim of Force Majeure for that event for the period of time of

such failure to comply, and for any additional delay caused by such failure. Defendant shall be

deemed to know of any circumstance of which Defendant, any entity controlled by Defendant, or

Defendant's contractors knew or should have known.

63. If EPA agrees that the delay or anticipated delay is attributable to a Force

Majeure event, the time for performance of the obligations under this Consent Decree that are

affected by the Force Majeure event will be extended by EPA for such time as is necessary to

complete those obligations. To the extent that the alleged Force Majeure event relates to

obligations under Paragraphs 13 (Unicracker Heater Requirements) and 14 (Unicracker Flaring

Requirements), if EPA agrees, after a reasonable opportunity for review and comment by the

State, that the delay or anticipated delay is attributable to a Force Majeure event, the time for

performance of the obligations under this Consent Decree that are affected by the Force Majeure

event will be extended by EPA, after a reasonable opportunity for review and comment by the

State, for such time as is necessary to complete those obligations.

40


a. An extension of the time for performance of the obligations

affected by the Force Majeure event shall not, of itself, extend the time for performance of any

other obligation.

b. EPA will notify Defendant in writing of the length of the

extension, if any, for performance of the obligations affected by the Force Majeure event.

64. If EPA does not agree that the delay or anticipated delay has been or will

be caused by a Force Majeure event, EPA will notify Defendant in writing of its decision. To the

extent that the alleged Force Majeure event relates to obligations under Paragraphs 13

(Unicracker Heater Requirements) and 14 (Unicracker Flaring Requirements), if EPA does not

agree, after a reasonable opportunity for review and comment by the State, that the delay or

anticipated delay is attributable to a Force Majeure event, EPA will notify Defendant in writing

of its decision.

65. If Defendant elects to invoke the dispute resolution procedures set forth in

Section XI (Dispute Resolution), it shall do so no later than 15 Days after receipt of EPA's

notice. In any such proceeding, Defendant shall have the burden of demonstrating by a

preponderance of the evidence that the delay or anticipated delay has been or will be caused by a

Force Majeure event, that the duration of the delay or the extension sought was or will be

warranted under the circumstances, that best efforts were exercised to avoid and mitigate the

effects of the delay, and that Defendant complied with the requirements of Paragraphs 61 and 62,

above. If Defendant carries this burden, the delay at issue shall be deemed not to be a violation

by Defendant of the affected obligation of this Consent Decree identified to EPA and the Court.

41


XI. DISPUTE RESOLUTION

66. Unless otherwise expressly provided for in this Consent Decree, the

dispute resolution procedures of this Section shall be the exclusive mechanism to resolve

disputes arising under or with respect to this Consent Decree. Defendant's failure to seek

resolution of a dispute under this Section shall preclude Defendant from raising any such issue as

a defense to an action by the United States to enforce any obligation of Defendant arising under

this Decree.

67. Informal Dispute Resolution. Any dispute subject.to Dispute Resolution

under this Consent Decree shall first be the subject of informal negotiations. The dispute shall

be considered to have arisen when Defendant sends the United States a written Notice of

Dispute. Such Notice of Dispute shall state clearly the matter in dispute. The period of informal

negotiations shall not exceed 20 Days from the date the dispute arises, unless that period is

modified by written agreement. If the Parties cannot resolve a dispute by informal negotiations,

then the position advanced by the United States shall be considered binding unless, within 20

Days after the conclusion of the informal negotiation period, Defendant invokes formal dispute

resolution procedures as set forth below.

68. Formal Dispute Resolution. Defendant shall invoke formal dispute resolu-

tion procedures, within the time period provided in the preceding Paragraph, by serving on the

United States a written Statement of Position regarding the matter in dispute. The Statement of

Position shall include, but need not be limited to, any factual data, analysis, or opinion

supporting Defendant's position and any supporting documentation relied upon by Defendant.

42

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