Unocal Facing O.C. Suit Over Leaky Tanks

County prosecutors are drafting a multimillion-dollar civil suit against Unocal, one of the nation’s oil giants, accusing the firm of endangering Orange County’s water supply and public health because 79 of its stations have allegedly failed to comply with a major pollution law.

District attorney’s officials confirmed Friday that they intend to file the suit as soon as paperwork is completed and will seek a shutdown of the stations until the company complies.

The suit will allege that Unocal has failed to show that it is checking for underground gasoline tank leaks at 79 of its 119 Orange County stations, and that it has failed to obtain proper permits despite years of warnings from county environmental officials.

The case against Unocal is expected to be one of the largest environmental suits in Orange County, and perhaps the largest in the state involving California’s underground tank law.

“The most significant thing about this is the magnitude of the problem,” said Deputy Dist. Atty. Christopher Kralick. “The stations are spread throughout the county, everywhere. It’s definitely the worst case in the county.”

Leaky fuel tanks pose a serious threat to ground water, which in Orange County provides 70% of the water supply. Gasoline contains cancer-causing ingredients that could contaminate wells. About one-quarter of the estimated 9,000 underground fuel and chemical tanks in Orange County were found to be leaking over the past five years.

Negotiations between the district attorney’s office and Unocal broke down Friday, so Kralick said he has drafted the suit and will file it as soon as health officials complete a declaration for each of the 79 stations.

Unocal officials said they believe they have complied with the law and that the disagreement is over administrative details.

“We believe it’s primarily a misunderstanding between Unocal and the county over the permitting process,” said Jeff Callender, a Unocal spokesman at the company’s Los Angeles headquarters. “We believe we have complied with the spirit and the intent of the law. The bottom line is to protect the environment, and our company is still doing everything within its power to do that.”

County health officials have expressed concern about Unocal’s attitude toward the law, and prosecutors have negotiated with the company for several months. Kralick said one top official with the Los Angeles-based company allegedly told a county health inspector to “sue us.”

“For three years, Unocal has chosen to bury its head in the sand and not deal directly with the problems,” Kralick said. “Their big point is that this is not something they should be held accountable for. It’s obvious they’re not concerned with complying with the law.”

District attorney’s officials have announced that they intend to take an aggressive stand on underground storage tank violations in Orange County, and that several other major oil companies could face similar lawsuits.

Steven Wong, the county’s assistant director of environmental health, said Friday that the Unocal documents probably won’t be ready for filing until after the first of the year. He declined to comment on the case because of the proposed litigation.

The suit will allege two causes of action: unfair business practice and failure to secure permits showing compliance with the underground tank law, Kralick said. Both are violations of the state health and safety code.

Kralick said he will seek “an extremely large” fine of “at least seven digits.”

The minimum fine for the violations is $500 per day per tank. The suit will allege that the violations have continued for three years, so the minimum fine for all 79 cases would be $150 million and the maximum $1.5 billion, Kralick said.

Unocal ranks third in oil and gas sales in California and 10th nationally. Its 1989 sales were reported at $8.85 billion.

Because a large proportion of underground fuel and chemical tanks--usually made of steel or concrete--have leaked into California’s water supply, the Legislature in 1983 adopted a law requiring companies to monitor them for seepage and keep thorough records on each tank’s content. Unocal has missed the law’s deadline by 4 1/2 years, Kralick alleged.

“We’re concerned because without (Unocal’s compliance with the law), we can’t tell whether their tanks are leaking,” Kralick said. “Obviously, if they are, a serious contamination threat presents itself to the ground water.”

Unocal officials said they have policies and procedures in place to detect faulty tanks at their stations, including an annual tank-tightness test.

“Unocal is not acting irresponsibly with regard to the environment,” Callender said. “We take our responsibility there very seriously. If we detect any problems, we take quick action to remediate that.”

Kralick, however, said the tests are not done annually, and there are “significant delays” so that county officials can’t check to make sure the tanks aren’t leaking.

Wong said no gasoline-related contaminants have been detected during ongoing tests of Orange County’s wells, so if there are leaks at Unocal’s stations, they have not yet reached ground water used for drinking supplies.

Unocal officials said they are in the process of replacing tanks at all their stations on the West Coast.

“We have 1,600 stations and we’re about two-thirds of the way through replacing the tanks at all of them,” Callender said. “We’re in about the third year of a five-year program.”

Unocal has “submitted substantial documentation and applications” to the Orange County Health Care Agency, Callender said, adding that it is the only county where the company is having differences of opinion with officials.

“My understanding is every county has a different procedure handling underground tanks,” he said.

Callender declined to elaborate, because “it appears this is going on to litigation.”

Kralick said that in negotiations, Unocal officials have blamed the problem on lack of communication from the Health Care Agency.

“All the Health Care Agency is doing is enforcing the rules and regulations. They aren’t interpreting them any differently than any other county. The difference is Orange County is enforcing them more actively,” he said.

“For Unocal to say they do not understand the law or didn’t realize they weren’t complying concerns me. Gasoline is their business and it’s not possible that they didn’t know,” Kralick said.

Five weeks ago, 97 of Unocal’s 119 Orange County stations did not comply, Kralick said. As of Friday, after repeated meetings with the prosecutors, 79 were still out of compliance, he alleged.