A contested case hearing is scheduled for Feb. 1-5 to debate the Navy obtaining a state operating permit for the Red Hill fuel farm, with the Sierra Club of Hawaii hoping it leads to stricter controls in the short term and relocation of the controversial underground tanks longer-term.

The Navy has failed to produce evidence that the underground tanks, completed during World War II and located 100 feet above the groundwater aquifer, will not release more petroleum into the environment, attorney David Kimo Frankel said on behalf of the Sierra Club.

The state Health Department “must deny the Navy’s application and instead order the Navy to immediately commence plans to relocate the tanks,” Frankel said in a pre-hearing memorandum.

The Board of Water Supply, meanwhile, said the importance of the issues to be decided in the contested case “cannot be overstated” and “may well dictate whether Oahu’s water, the most critical resource issue of our lifetime and our children’s lifetime, will be protected or put at dire risk of contamination.”

The Navy, however, said it follows and/or exceeds Hawaii’s underground storage tank laws and regulations with the Red Hill tanks.

Complaints filed by the two groups claim that regardless of regulatory compliance, the age and characteristics of the tank farm, in combination with historical fuel releases, pose a risk to the groundwater aquifer, the Navy said.

“However, in almost 80 years of continuous operation, the facility has never caused any impact to drinking water resources, and there is no evidence that it will in the future,” the Navy said.

The Navy, Sierra Club and Board of Water Supply each filed pre-hearing memorandums ahead of the contested case hearing.

Red Hill Tank 5 leaked 27,000 gallons of fuel in 2014.

In 2018 the Health Department amended its underground storage tank rules to, among other things, require previously exempt field-constructed tanks such as Red Hill to follow state requirements. The Navy applied for a five-year permit, and the Sierra Club and Board of Water Supply requested a contested case hearing.

The Sierra Club said the Navy’s “track record at Red Hill is shameful. From the beginning, these tanks have leaked.”

But the Navy said the tanks and piping were installed following best practices when the facility was built in 1940-43 “and are maintained in accordance with modern standards and codes of practice.”

Evidence at the hearing will show “that the Navy has taken actions to protect human health and the environment that go beyond the requirements set forth” in the state’s underground storage tank regulations, the service said Tuesday in its memo.

Tank maintenance now includes re-coating of interior surfaces to prevent corrosion, decommissioning of small nozzles that could be a risk for fuel release and improved inspection and quality control, the Navy said.

Capt. Gordie Meyer, commander of Naval Facilities Engineering Command Hawaii, said in an email that over the past five years the Defense Department has spent $218 million to modernize Red Hill and anticipates spending another $470 million in the coming five years.

The Navy said in its pre-hearing memo that Hawaii Administrative Rules require that underground storage tanks such as Red Hill utilize a design that the Health Department director finds is protective of human health or incorporates “secondary containment” that meets state requirements by the year 2038.

“The Navy is investigating technologies that will meet one or both of these requirements,” the service said.

Twenty vertically arrayed tanks, which the EPA said is a design “unlike any other in the United States,” can store up to 250 million gallons of fuel.

Two tanks are out of serv­ice and two or three are generally empty as part of the Navy’s maintenance effort, the Board of Water Supply said.

“This leaves at least 15 tanks, with a total capacity of over 187 million gallons, in operation directly above Oahu’s sole-source aquifer,” the Water Board said.

Quarter-inch steel plates backed by concrete form a barrier to the environment. “Numerous” episodic releases from the Red Hill tanks have occurred, and sampling under and around Red Hill has shown some petroleum contamination, the board said.

But the Navy maintains that the facility’s “long- standing record of negligible environmental impact supports the conclusion that there is little risk to the groundwater.”

The Board of Water Supply maintains there have been at least 72 “fuel release incidents” at Red Hill involving more than 175,000 gallons of fuel. Some of that fuel, bound up in basalt, may have been attenuated by microbial action.

Earlier this month the Navy laid out the possibility of a “double-wall stainless steel” tank retrofit at Red Hill and said if testing proved successful, it could begin trial installation in one tank as early as late next year.

Gaztransport &Technigaz North America, a subsidiary of a Paris-based company that has a “successful track record providing similar solutions to tanks larger than Red Hill in the liquefied gas shipping industry,” was selected for the Hawaii effort, the Navy’s Meyer said.

The company is “proposing a double-walled monitored preliminary concept. We are aggressively pursuing secondary containment, but it is early in the process,” Meyer said.

Marti Townsend, director of the Hawaii Sierra Club, said a concern even with a tank within the existing tank proposal is the inability to monitor corrosion of the existing quarter-inch steel tank plates that occurs from the outside environment and proceeds inward.

The Board of Water Supply had previously proposed that the Navy partially fill the tanks with concrete and build a new double-walled tank — in essence creating a new tank within a tank — within the old tank, Townsend said.

At Kitsap Naval Base in Washington state, the Navy, noting potential earthquake damage, relocated six underground storage tanks above ground, the Sierra Club said.

“The Navy has produced no evidence that it cannot simply relocate the (Red Hill) tanks above ground,” the group said.

But the Navy said that “the mere possibility of a future release, or the existence of a past release, should not affect the (Health) Department’s permitting decision given that there is no evidence of significant groundwater impacts or reasonable likelihood of future impacts.”

Frankel, the Sierra Club lawyer, said it will be months before the contested case hearing officer makes a recommendation that the Health Department director then can accept or modify.

Townsend, the group’s director, wants stricter controls at the fuel farm in the short term — but also for the tanks to be relocated.

“It’s going to take a little bit for them (the Navy) to build the new ones,” she said.

So in the interim, “instead of just letting the fuel sit there with less protections, we would like to see the permit impose stronger protections and force the Navy to do the more substantial upgrades that they need to do while relocation is figured out,” she said.

The Board of Water Supply believes that the Navy “cannot credibly claim that operations at Red Hill will not contaminate Oahu’s sole-source groundwater aquifer.”

“Accordingly, the (Health Department) has no choice but to deny the Navy’s permit application and require that the Navy immediately relocate” the tanks “or upgrade them with tank-within­-a-tank secondary containment,” the board said.