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Par Hawaii Refining to pay $176,899 fine for EPA violations

The U.S. Environmental Protection Agency announced today that Par Hawaii Refining LLC has agreed to pay a fine of $176,899 for violations of the federal Clean Air Act, among others, at its oil refinery in Kapolei.

This comes as state officials have been exploring using Par’s facilities in Kapolei to store oil from underground tanks at the Navy’s Red Hill fuel storage facility. Red Hill is believed to be the source of the contamination of the Navy’s water supply. Navy officials told Congress it would defuel its tanks after weeks of vowing to resist an emergency order issued by the Health Department, though would not rule out the possibility of future legal challenges.

In addition to paying the fine, Par Hawaii also has agreed to improve safety and reduce the risk of accidental chemical releases as part of the settlement.

“EPA is committed to protecting refinery workers and surrounding communities by ensuring companies implement safety measures and then carefully abide by them,” said EPA Pacific Southwest Regional Administrator Martha Guzman in a news release. “Settlements like this serve notice to companies that they must follow the law by acting to prevent incidents from occurring. These such efforts help protect workers, communities located near refineries, other potentially at-risk groups, and the environment.”

EPA said Par Hawaii also violated the Emergency Planning and Community Right-To-Know Act of 1986, which requires industry to report on the storage, use, and release of hazardous substances to federal, state, and local governments.

The settlement follows violations uncovered as far back as March 2016, when EPA inspectors found violations of the Clean Air Act’s chemical accident prevention requirements under the facility’s Risk Management Plan, as well as the Emergency Planning and Community Right-To-Know Act.

EPA said these included process safety information errors, such as inaccurate piping and machine diagrams. Several operating procedures were also unclear and outdated, according to the EPA, and missing information.

Under federal law, the Risk Management Plan must be up to date and resubmitted at least once every five years.

Other violations, EPA said, included the failure to immediately notify the state emergency response commission and local emergency planning committee of releases of sulfur dioxide above the reportable quantity, which occurred on several occasions in 2014 and 2015.

“The EPA identified areas for improvement at our Kapolei refinery and we took immediate action to address issues identified,” said Par Hawaii spokesman Marc Inouye. “We have had productive conversations with the EPA to explore ways to comply with continually evolving regulations. This has been an important learning experience.”

State officials have been in talks with Par Hawaii exploring whether its above-ground storage tanks could safely store at least some of the fuel from Red Hill — either in the short term or for the long haul — if the Navy goes through with defueling its massive underground tanks. The Red Hill facility has a maximum capacity of up to 250 million gallons and is believed to currently be storing around 180 million gallons.

Par Hawaii operates a refinery in Campbell Industrial Park in Kapolei that is currently capable of producing gasoline, diesel, jet fuel, ship fuel and fuel oil for electrical power generation. Par executives say it offers a total storage fuel capacity of 6 million barrels — or roughly 252 million gallons. Most of it is already in use, but the company estimates that about a third of that could be made available to store fuel from Red Hill.

The company already works with the military. According to data from the Hawaii Defense Economy project, the Defense Logistics Agency paid Par Hawaii $1.7 million for fuel contracts last year. Par and the Navy have at various points discussed deeper cooperation, with the company pitching several fueling and bulk fuel storage options.

“It’s important to point out that in the EPA’s audit of our refinery there were no issues identified with our fuel storage capabilities, and we are confident we will be a valuable partner if the Navy determines it will store its fuel from Red Hill at our refinery,” said Inouye.

This settlement follows another one reached in February 2021, in which Par Hawaii agreed to a fine of $219,638 for violations of the Clean Air Act and the Resource Conservation and Recovery Act.

Under the settlement announced today, Par Hawaii agreed to complete a set of compliance tasks to ensure appropriate equipment operating conditions. The company is required to certify completion of all tasks before December 2023.

“The consent agreement serves as a settlement for concerns raised by the EPA and we continue to invest in upgrades to ensure we remain in compliance with industry standards,” said Inouye. “These investments also position Par Hawaii to be a major, long-term contributor as Hawaii transitions to more clean energy.”

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