Anchorage Daily News

WASILLA -- A couple that run a hazardous waste incinerator in the Matanuska-Susitna Borough are facing a potential $200 million fine for violating federal emission regulations.

James and Nancy Oliver have operated the incinerator next to their home at Mile 11 Knik-Goosebay Road since 1994. They burn medical waste such as syringes and sponges from local doctors' offices as well as confidential paper documents and regulated garbage such as oil filters and food waste from cruise ships, James Oliver said in an interview last week.

In a June 10 ruling, U.S. District Court Judge John Sedwick found the couple had violated the federal Clean Air Act and related regulations since Oct. 2002.

With a minimum fine of $27,500 a day for violations, the couple's total fine could be more than $201 million. Federal officials, however, said the settlement is likely to be far less. In an e-mail response to written questions, U.S. Department of Justice spokeswoman Carrie Nelson stated the court can base the penalty on a number of factors. Kevin Schanilec, an Environmental Protection Agency compliance officer based in Seattle, said those factors can include the couple's financial wherewithal.

James Oliver said last week they intend to fight the ruling, and an attorney for the couple has filed a notice of appeal.

The couple are still operating the facility.

In his June ruling, Sedwick did not look at whether the couple emitted too much pollution from their operation. Rather, he found the incinerator did not qualify for an exemption, known as a "co-fired combustor" exemption.

The exemption is aimed at incinerators that burn only a small percentage of medical waste and allows such operations to forgo stringent emissions monitoring and testing requirements. Right now, James Oliver said he does visual checks of the smoke coming out of the stack. Without the exemption, the couple would be required to install a variety of equipment and monitoring systems, and do air sampling tests. James Oliver estimated those requirements would cost the couple about $500,000 a year.

"Just one test alone for dioxin is $20,000 to $30,000," he said.

The couple also would have to treat the emissions with a water scrubbing system, then truck the water into Anchorage for treatment, he said.

Schanilec said burning medical waste is of concern because emissions can include arsenic, mercury, cadmium and chromium as well as hydrochloric acid produced by the burning of plastic.

The case turns on how the couple calculated how much medical waste they burn at the facility.

Under federal laws adopted in 2000, incinerators that burn only a small amount -- 10 percent or less -- of hospital and medical waste are eligible for the "co-fired combustor" exemption. Under the rules, the percentage is based on the amount of medical waste burned as a percent of the total waste burned plus the weight of the fuel used to burn that waste.

In making their calculations, the Olivers included the weight of air they added to natural gas to burn the waste. The Olivers contend adding in the weight of the air is legitimate because it's part of the fuel.

Environmental protection officials, however, dismissed that contention, and noted the Olivers generally burn more medical waste at their facility than any other kind of waste. By adding air to the total weight, the Olivers significantly dropped the percentage of medical waste they burned from more than 30 percent of their total to less than 10 percent, according to the court documents.

In his ruling, Sedwick sided with the government stating that claiming air was part of the fuel was like claiming one has "found a way to convert lead into gold."

Oliver said the couple live within spitting distance of their incinerator and are confident the emissions are clean. He said the couple burns about a half-ton of waste a day from confidential paper records to pathological wastes.

Schanilec said there has been no air sampling of the incinerator's emissions since at least 2002 and therefore there is no way to measure what the facility is emitting.

The EPA has the authority to ask the courts to shut down a facility if officials think it is endangering the public health. But he said without any tests, there is no evidence standards are being violated in this case.

A judgment hearing in the case is scheduled for March 2009 in federal court in Anchorage. .

Find S.J. Komarnitsky at www.adn.com/contact/skomarnitsky or 352-6714.

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