Smaller Oil Refineries Reeling From Order to Test for Ground Leaks

While oil refiners say they “saw the handwriting on the wall” a long time ago regarding the possible repercussions of past dumping practices, many of the smaller operators are still reeling from the state’s orders, issued last week, to begin extensive ground water and soil contamination testing.

Said Mark Newgard, president of the Long Beach-based Edgington Oil Co., “We have no argument with the concept of knowing what’s underground, but it’s kind of like the television commercial where King Kong is on top of (a tall) building swatting planes and wreaking havoc, and Fay Wray comes up to him, stomps on his toes and says ‘Who’s gonna pay for this mess, you big ape?’ ”

The answer, as far as the state is concerned, is clear: the oil industry.

15 Southland Refineries

Largely because of extensive hydrocarbon leaks that have recently come to light at Chevron USA Inc.’s El Segundo plant, the state Regional Water Quality Control Board on Monday ordered all 15 of the Southland’s oil refineries to begin testing for hydrocarbon leaks on and near their sites.

All but one of the refineries are in the South Bay or the southeastern part of Los Angeles County.

The refineries will have 30 days to prepare reports on what they plan to do. They will then have 90 days to conduct the actual testing and an additional 30 days to submit their findings, although the board has made provisions for extending those deadlines where needed.

Any refinery that discovers ground water or soil contamination either on or off its site, according to the board’s directive, will have to begin cleanup immediately.

In the case of large refineries such as Chevron, the cost estimates for the studies alone run into the millions of dollars.

Hardest Hit

But smaller independent refiners, like Edgington, say they will be hardest hit because they operate on a smaller profit margin and can least afford to conduct the stringent, detailed studies being demanded by the board.

“This is coming at a time when the refinery industry is not doing well economically,” Newgard said. “The type of studies they (the board) are talking about could definitely put quite a financial strain on our company. I don’t know whether we’re talking about $10,000, $100,000 or $1 million. I hate to think what it’s going to cost if we actually find anything.”

And the chances of most refineries finding contamination are very good, according to Chevron spokesman Norman R. LeRoy.

“Any refinery that’s been in operation for many years is going to find a certain degree of problems in their underground,” he said. “It’s just the nature of the beast.”

The industry, LeRoy explained, for many years engaged in practices that once enjoyed widespread acceptability because no one knew how harmful they were.

Paying for Past

“It used to be acceptable to dump petroleum products onto the ground right up until the early 1970s,” he said. “Most of us have been here since the 1910s, 1920s, so we’ve been doing it for decades. Now we’re going to pay for our past sins.”

Those sins, according to Chevron’s estimates, will cost plenty.

Another Chevron spokesman, Jim Edmisson, says the studies may cost the company more than $3 million, excluding testing and cleanup in Manhattan Beach and El Segundo, where extensive hydrocarbon vapor migration has been discovered. Chevron’s El Segundo plant is one of the largest refineries in California, sprawling over 1,000 acres and processing more than 200,000 barrels of crude oil a day.

For at least one company, the state directive will involve a court battle to wrest precious assets away from creditors to pay for the studies.

Powerine Oil Co. in Santa Fe Springs shut down operations last June when it filed for reorganization under Chapter 11 of the state bankruptcy code.

Not Surprised

“I can’t say I was surprised by their (the board’s) decision,” said Henry Del Castillo, vice president and general manager of Powerine, “but that doesn’t make it any easier. We don’t know if we’ll be able to get funds for the study, and it could affect the company’s saleability if potential buyers know they have to pay for these studies and possibly cleanup. I guess it’s just an added burden we have to incur.”

Water board spokesman Raymond K. Delacourt said that while the studies will undoubtedly be costly, they are nevertheless crucial if the state wants to avoid more surprises like Chevron.

In January, Chevron made public the fact that a large plume of low-level hydrocarbon vapors had migrated through El Segundo’s manufacturing district. In recent weeks, the company has discovered extremely high levels in the El Porto area of Manhattan Beach as well. Readings of 95,000 parts per million prompted company officials to pave over a 200-foot-long stretch of The Strand recently to prevent the fumes from escaping or beachgoers from digging toward them. Gasoline-based hydrocarbons can explode at 14,000 ppm.

‘Time Has Come’

“We believe this is necessary and that the time has come for us to know exactly what’s underneath these refineries,” Delacourt said.

At least five refineries, he said, are already investigating ground water problems at their facilities. Those companies are Chevron, Atlantic Richfield Co. in Carson, Golden West Refinery Co. in Santa Fe Springs, Shell Oil Co. in Wilmington and Texaco Inc. in Carson.

Arco spokesman Al Greenstein says the company has been aware of several thousand barrels of liquid hydrocarbons pooling under its property for several years, and started hydrocarbon recovery in 1982.

However, he added, “We know from testing that community drinking water has not been affected, and there is no evidence that oil or hydrocarbon vapors have migrated beyond refinery perimeters.”

‘Very Concerned’

The situation, he said, “is not one that we take lightly. We’re very concerned that there not be any contamination.”

While the company may have to do more extensive work to meet the board’s requirements, he said, “we believe it should be to our credit that we did not wait for troubles to develop before we did something.”

Other companies affected by the order are Mobil Oil Co. in Torrance, Fletcher Oil Co. in Harbor City, Golden Eagle Refining Co. in Carson, Newhall Refining Co. in Newhall, Paramount Petroleum Co. in Paramount, Union Oil Co. in San Pedro and Western Fuel Oil Co. in San Pedro.