Toxics Disposal Probe Targets Exxon, Arco, BP

Federal and state officials are investigating allegations that Exxon Corp. illegally shipped hazardous wastes in the ballast water of its oil tankers to a treatment plant in Alaska, stirring up a hornet’s nest among legislators and imperiling talks to settle lawsuits arising from the 1989 Alaskan oil spill.

Exxon denies wrongdoing.

Meanwhile, Atlantic Richfield Co. and British Petroleum, which both have major tanker operations along the West Coast, confirmed that they have transferred oily ballast water and so-called tank washings from one tanker to another to be shipped for disposal through the plant into Valdez Harbor.

Spokesmen for Arco and BP both denied that the transshipped liquid contains anything other than water, crude oil and tiny amounts of cleaning solvents. They said it certainly does not contain large amounts of chemical or hazardous wastes whose disposal in Alaska would violate federal guidelines.

But Environmental Protection Agency officials say a question remains whether shipments of such waste water violate the terms of a permit issued by the EPA to the Alyeska Pipeline Service Co. to operate the treatment plant.

Harold Geren, chief of water permits and compliance in the EPA’s Seattle regional office, said he was trying to determine whether the Arco or BP transfers would violate the permit. He also said the agency was investigating the allegations that Exxon had illegally used the plant to dispose of hazardous wastes.

“I’m finding out a lot about practices that I didn’t know about, and the first question that runs through my mind is: Why didn’t we know about this when we granted this permit?” Geren said. “It’s become very clear to us we need to find out what common practice is.”

The Exxon allegations threaten to throw a monkey wrench into negotiations between Exxon and state and federal officials seeking to settle civil litigation arising from the March, 1989, oil spill from the Exxon Valdez, according to lawyers familiar with the talks. Such a settlement had been expected as soon as this week.

Alaska Atty. Gen. Charles E. Cole was en route to Washington on Tuesday to confer with Exxon attorneys on the proposed settlement, which reportedly could include a $1.2-billion payment by Exxon. Gov. Walter J. Hickel was planning a visit to Washington to attend the unveiling of President Bush’s new energy policy today. A spokesman would not say whether Hickel might take part in the Exxon talks as well.

Notwithstanding the new allegations, state officials remained optimistic that a settlement will be reached. “I am not aware of any effect this (news of the waste-water shipment) may have,” Alaska Deputy Atty. Gen. Douglas L. Blankenship said. “It’s an ongoing negotiation process.”

In a letter sent last week to U.S. Atty. Gen. Richard L. Thornburgh and EPA Administrator William K. Reilly, former oil tanker broker Charles Hamel alleged that Exxon has accepted hazardous liquid wastes from barges or tankers in California, then shipped them in ballast water of empty oil tankers north to Alaska.

There, the ballast was run through Alyeska’s Ballast Water Treatment plant. But because the plant is designed only to separate oil from water, much of the waste was dumped untreated into Valdez Harbor, a violation of federal regulations, Hamel alleged.

On Tuesday, EPA spokesman David Cohen said the letter has been received and turned over to EPA investigators. “It is being taken seriously and it is being looked into--as we look into any allegation of this kind,” he said.

A spokeswoman for Thornburgh said she was unaware of action to be taken by the Department of Justice on Hamel’s accusations. Rep. George Miller (D-Martinez), acting chair of the House Interior Committee, also received a copy of Hamel’s letter and expressed “deep concern” about the allegations, a spokesman said.

Meanwhile, in Alaska, several state legislators also were taking the allegations seriously. State Rep. Cliff Davidson, a Democrat from Kodiak, said he was considering calling hearings of his resources committee.

He said he was also concerned about Arco’s practices, since Harold C. Heinze, a former Arco transportation executive, has been named commissioner of Alaska’s Department of Natural Resources by Hickel, the Republican former U.S. interior secretary who took over the governor’s office in January.

In his letter, Hamel--who is engaged in a series of legal disputes with Exxon--said that on Aug. 4, 1988, about 8,000 tons of toxic wastes were transferred in San Francisco Bay from the Exxon Galveston tanker to the Exxon Valdez. The wastes, he said, mixed with 21,203 tons of ballast water and were pumped through the Alyeska treatment plant later in the month.

Some sort of transfer appears to be corroborated by a page from the notes kept by the Exxon Valdez’s second mate, which were obtained from Exxon during a deposition in a court case related to the Valdez spill and released by attorneys representing the plaintiffs suing Exxon.

The handwritten page--a record of ship’s activities that month passed from a mate going off shift to the mate relieving him--contains a notation that the Exxon Valdez would “lighter,” or transfer, oil to the Exxon Galveston “after we take (50,000 barrels in) tank washings from them.” That’s roughly 6,000 tons.

If such hazardous wastes were indeed disposed of through the Alyeska treatment plant, it would be a violation of federal guidelines governing the plant’s operations, according to EPA officials. The plant is not designed to treat such wastes.

Discharge of the wastes into Valdez Harbor could result in “some very severe, acute toxic effects on the environment . . . and long-term, chronic effects as well,” said Erik Olson, counsel with the National Wildlife Federation, one of several environmental groups suing Exxon over the 1989 spill.

The state of Alaska is investigating Hamel’s allegations. Water samples from the hold of another Exxon tanker docked in Valdez, the Exxon North Slope, were taken before noon Tuesday, according to Commissioner John A. Sandor of the Alaska Dept. of Environmental Conservation.

On Tuesday, the Wall Street Journal quoted an Exxon spokesman admitting that the company shipped waste water to Alaska, but adding that such shipments were within federal guidelines. In an interview with The Times, Exxon spokesman Les Rogers read from a prepared statement disputing Hamel’s charges and maintaining that all discharges of ballast water fell within federal guidelines.

Also on Tuesday, officials at both Arco and BP confirmed that those companies have transferred oily ballast water or tank washings from one tanker to another for shipment to Alaska.

John Andes, a spokesman for British Petroleum’s American subsidiary, said that it is “common practice” to transfer tank washings from oil tankers cleaned out before going into dry dock, where tanker holds must be free of vapors and fumes.

Andes said that a tanker’s giant tanks are flushed first with crude oil and then with water, to clean out oil residues. The resulting washings--including sludge--are then transferred to an Alaska-bound tanker for disposal in Valdez, he said.

He said that the company normally did not use solvents or detergents in the cleaning process.

Andes added that BP believes the process does not violate federal guidelines. The tank washings are easily treatable by the Alyeska plant and fall within the purview of the plant’s EPA permit, he said.

“This is kind of a tempest in a teapot,” Andes said.

Jerry Aspland, president of Arco Marine Inc., Los Angeles-based Arco’s shipping subsidiary, said the company had similarly transferred tank washings once from a dry dock-bound tanker to one headed for Alaska.

One other time, he said, a tanker transferred ballast water to another during a “lightering” operation. As oil was pumped from the first ship to the second, ballast water was pumped back from the second to the first to balance the two, Aspland explained.

He termed “misguided” perceptions that such waste water would constitute a hazard.

Heinze--who was Aspland’s superior before he left Arco to join Hickel’s administration--said he was not aware of Arco’s practices. But, he added, “There was no reason why I would be.”

Times staff writers Michael Parrish in Los Angeles and Rudy Abramson in Washington contributed to this story.