FAIRBANKS -- While Flint Hills Resources says it plans to shut its North Pole refinery in the spring and turn it into a tank farm, the company is still on the hook for cleaning up a solvent that leaked into the groundwater and spread for miles, contaminating hundreds of wells near North Pole.
The refinery is soon to stop making gasoline and jet fuel, but disputes about the level of cleanup needed to protect human health and who should pay for it will continue. Flint Hills is arguing that most of the 354 wells where sulfolane was found contain levels that do not pose a health risk.
The company says it has spent more than $55 million on sulfolane cleanup in the past four years, with some of that cost covered by insurance.
"Even so, Flint Hills has depleted a valuable resource; the insurance is gone and unavailable for any other purpose," it told the state.
Flint Hills says the cleanup level proposed by the Department of Environmental Conservation, 14 parts per billion, is excessive and artificially low. The company wants a level 25 times higher to be considered safe, 362 parts per billion.
The company is seeking a hearing, which would last six to eight days, appealing the decision by DEC. Public comments on whether a hearing is to be granted are due at DEC offices by Monday.
"Tens of millions of dollars and decades of future effort will be wasted if DEC adopts an unjustifiably low cleanup level," Flint Hill told the DEC commissioner in its appeal.
The state plan "would impose enormous costs on Flint Hills that are not justified by risk to human health or the environment," the company asserts. It says the state should consider the scientific evidence researchers have gathered that justifies the higher number.
The underground plume of sulfolane is about 2.5 miles wide, 3 miles long and up to 300 feet deep. Flint Hills has sampled 800 wells in the North Pole area and found sulfolane in 354 of them. In most cases, the level of pollution is below the 362 parts per billion standard proposed by the company. State officials say that if the level is set at 362 ppb, steps to provide alternate water supplies—through tanks, special treatment or bottled water—would not need to continue at most homes.
As part of the $55 million, the company has spent $13 million on alternate water systems. It installed 113 bulk water tanks, added special treatment systems at 158 sites and has provided bottled water to 279 properties, the company told DEC. These efforts are to continue, at a cost of $2.3 million this year, while the company and DEC work to determine the proper cleanup level, Flint Hills said.
It spent $7 million to improve the City of North Pole water system and expects to spend about $5 million this year on groundwater remediation and monitoring.
You might think the costs of future cleanup would be the same whether the refinery is running or not, but with some Fairbanks legislators already claiming that the DEC should allow a higher level of contamination to be considered safe and that DEC is responsible for the refinery shutdown, there may be political pressure on the Parnell administration to decide that higher levels of sulfolane pollution are OK.
Gov. Sean Parnell said Wednesday that market conditions led to the shutdown and that sulfolane was one factor among many, according to Flint Hills. He said the company never came to the state and said, "If you'll do this, we won't close down." Parnell said health issues and groundwater quality are important.
On Tuesday, Rep. Tammie Wilson and Rep. Pete Higgins claimed that DEC caused the refinery shutdown, though the cleanup levels have not been set and are under appeal. They say that the DEC is in error and that the company is correct in its conclusions on the acceptable level of pollution. In a press release, Wilson said DEC has "unrealistic expectations" that played a major role in the closure, while Higgins said DEC actions "forced" the shutdown.
Flint Hills has not said that it would keep the refinery open if the state accepts a higher pollution level. The cleanup costs will continue as the company transforms its operation into an oil tank farm, but costs will rise or fall based on whether the state agrees that higher levels of sulfolane pose no health risk.
DEC has defended its decision in recent months, saying the 14 parts per billion level "is protective of human health, both in terms of drinking water and in ensuring the groundwater is safe to use for gardening and other general purposes. DEC is confident the cleanup level of 14 parts per billion incorporates the best available toxicity data with protective assumptions regarding current and future exposure."
The refinery began using sulfolane as part of the process of making gasoline in 1985, after an extraction unit was added. Flint Hills says the "vast majority" of the sulfolane releases occurred when the refinery was owned by Williams and before that, by MAPCO.
While tests by Williams showed contamination on the 240-acre refinery site, it wasn't until October 2008 that it was detected at the northern boundary of the property. In 2009, tests demonstrated that "sulfolane contamination had migrated well beyond the property boundary."