The Lanai Oil Company Inc. has agreed to pay a penalty of $71,166 as part of a settlement for Clean Water Act violations at its bulk oil storage facility on the island, according to the U.S. Environmental Protection Agency.

During an inspection in November 2018, the agency found that the company had failed to review and evaluate its Spill Prevention, Control, and Countermeasure plan at least once every five years, as required by the Clean Water Act.

The company had also failed to conduct integrity testing of the above-ground storage tanks, and to permanently close out-of-service above-ground storage tanks, according to the EPA.

EPA officials said the penalty will reduce the risk of future oil spills from the company’s storage facility — about 200 feet from Kaumalapau Harbor — into the Pacific Ocean.

“It is critical that companies operating near our waterways develop and follow a spill prevention plan,” said EPA Pacific Southwest Regional Administrator John Busterud in a news release. “Our action will help prevent oil spills to Hawaii’s harbors and coastal waters.”

Lanai Oil Company, which is owned by Maui Oil Company, has operated the bulk fuel storage and distribution terminal near Kaumalapau Harbor since 1986.

Due to COVID-19 challenges, the company has agreed to pay the penalty in installments within about a year of the settlement.

EPA has specific regulations to prevent oil from reaching navigable waters and adjoining shorelines, as well as to ensure containment of oil discharges in the event of a spill. Besides the spill prevention plans, these include the training of staff, and installation of physical controls to contain and clean up oil spills.

The EPA issued a public notice of the proposed settlement today, and will take comments through Nov. 13 at r9hearingclerk@epa.gov or U.S. Environmental Protection Agency, Region IX, 75 Hawthorne Street (ORC-1), San Francisco, CA 94105.