Document 6n40Kpy21kjpnbo641oJvjZ3

Region 6 - Enforcement & Compliance Assurance Division INSPECTION REPORT Inspection Date(s): Media Program: Regulatory Program(s) 11/08/2024 Water (CWA) Water (CWA) Brine Program (Oil & Gas inspection) Company Name: Facility Name: Facility Physical Location: (city, state, zip code) Mailing address: (city, state, zip code) County/Parish: Facility Phone Number Facility Contact: SMI Operating Company, LLC Walker-Gregory #3 & #4 Tank Battery In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, -92.536533. El Dorado, AR, 71730 190 Vestal Loop Strong, AR 71765 Union County 870-951-0136 Jacob Agerton Owner / Operator agertonjay@icloud.com FRS Number: Identification/Permit Number: Media Identifier Number: NAICS: SIC: N/A ARU002261 N/A 211111 1311 Personnel participating in inspection: Kerri McCabe (lead) EPA / Region 6 ECDW Inspector / Enforcement Officer EPA Lead Inspector Signature/Date Supervisor Signature/Date KERRI MCCABE Kerri McCabe Digitally signed by KERRI MCCABE Date: 2025.01.07 10:48:46 -06'00' Date JEANNE ECKHART Date: 2025.01.10 07:59:24 -06'00' Digitally signed by JEANNE ECKHART Jeanne Eckhart Date 6ENFORM-019-R8.2 (02/12/2020) 1 SMI Operating Company, LLC / Walker-Gregory #3 & #4 Tank Battery (ARU002261 / CWA) Inspection Date 11/08/2024 Section I - INTRODUCTION PURPOSE OF THE INSPECTION EPA Region 6 inspector Kerri McCabe (lead) arrived at the SMI Operating Company, LLC / WalkerGregory #3 & #4 Tank Battery ("facility") at 1230 on 11/08/2024 for an unannounced inspection. The facility is located from Highway 63 E, then Armer Rd, left onto an oil lease road at 33.253333, 92.538889. No facility representatives were present at the time of the inspection. The inspection was conducted by the authority of the Clean Water Act (CWA) to determine compliance with Environmental Protection Agency (EPA) regulations. There were no other federal, state, or local agency representatives present at the time of the inspection. FACILITY DESCRIPTION EPA conducted an inspection on the SMI Operating Company, LLC / Walker-Gregory #3 & #4 Tank Battery, which contained three (3) storage/separation tanks for crude oil and saltwater. Signage on one of the tanks inside secondary containment was marked with "Jamie Oil, Inc." Communication with Mr. Jimmy Crain with Jamie Oil, Inc. on 11/12/2024 confirmed that the facility had been sold to SMI Operating Company, LLC. Map 1. Aerial imagery (Google Earth dated 03/11/2024) of the SMI Operating Company, LLC / WalkerGregory #3 & #4 Tank Battery. 2 SMI Operating Company, LLC / Walker-Gregory #3 & #4 Tank Battery (ARU002261 / CWA) Inspection Date 11/08/2024 Section II - OBSERVATIONS I observed the SMI Operating Company, LLC / Walker-Gregory #3 & #4 Tank Battery facility and associated secondary containment and storage tanks; see Appendix 1 (Photograph Log), Photo No. 1. For additional GPS location and photo metadata, see Appendix 1. I observed one tank with an open hatch, see Photo No. 2. I observed loose oil inside secondary containment, see Photo No. 3 through No. 5. I observed an active leak of crude oil at one of the tanks inside secondary containment, see Photo No. 6. I observed the drainpipe for the secondary containment that was open without a cap, see Photo No. 7 through No. 9. The facility appeared to be out of service; however, there was no labeling on the tanks to indicate the tanks were properly placed out of service. Section III - AREAS OF CONCERN No closing conference was held due to no personnel with SMI Operating Company, LLC being present during the inspection. On 11/12/2024, I contacted Mr. Jacob Agerton, the company contact on file with the Arkansas Oil and Gas Commission ("AOGC"), via email regarding the inspections of related facilities owned/operated by SMI Operating Company, LLC. Areas of concern at the time of the inspection include the following: No updated signage at the facility, Open hatch on one of the tanks, Loose oil inside secondary containment, An active leak of crude oil from a valve for one of the tanks, The open drainpipe for secondary containment, and No indication of the facility being properly placed in "out of service" mode with proper labeling. Section IV - FOLLOW UP Inspector will conduct follow-up phone calls and emails with the company representative(s) over the coming weeks and months to ensure areas of concern are properly addressed. Section V - LIST OF APPENDICES Appendix 1 - Photograph Log - 9 photos taken 11/08/2024. 3 SMI Operating Company, LLC / Walker-Gregory #3 & #4 Tank Battery (ARU002261 / CWA) Inspection Date 11/08/2024 Appendix 1 Photograph Log 9 Photos UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 1 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0317 Orientation: ENE Date of Photo: 11/08/2024 Time of Photo: 1253 Latitude: 33.247374 Longitude: -92.536556 Photographer: Kerri McCabe Description: Looking ENE, this photo shows two (2) crude oil storage tanks and one (1) separator/gun barrel inside secondary containment. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 2 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0318 Orientation: ENE Date of Photo: 11/08/2024 Time of Photo: 1253 Latitude: 33.247383 Longitude: -92.536583 Photographer: Kerri McCabe Description: Looking ENE, this photo shows a crude oil storage tank with an open hatch. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 3 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0319 Orientation: NNE Date of Photo: 11/08/2024 Time of Photo: 1253 Latitude: 33.247467 Longitude: -92.536583 Photographer: Kerri McCabe Description: Looking NNE, this photo shows loose oil inside secondary containment and a crude oil storage tank with an unstable bottom. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 4 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0320 Orientation: N Date of Photo: 11/08/2024 Time of Photo: 1253 Latitude: 33.247400 Longitude: -92.536450 Photographer: Kerri McCabe Description: Looking N, this photo shows the backside of the tank battery with loose oil inside containment and solidified oil on the berm of the secondary containment. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 5 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0321 Orientation: NW Date of Photo: 11/08/2024 Time of Photo: 1254 Latitude: 33.247433 Longitude: -92.536483 Photographer: Kerri McCabe Description: Looking NW, this photo shows loose oil inside secondary containment. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 6 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0322 Orientation: WNW Date of Photo: 11/08/2024 Time of Photo: 1254 Latitude: 33.247500 Longitude: -92.536467 Photographer: Kerri McCabe Description: Looking WNW, this photo shows an active leak from the separator/gun barrel inside secondary containment. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 7 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0323 Orientation: ENE Date of Photo: 11/08/2024 Time of Photo: 1254 Latitude: 33.247533 Longitude: -92.536500 Photographer: Kerri McCabe Description: Looking ENE, this photo shows the drainpipe for secondary containment with flow indicators noted. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 8 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0324 Orientation: SE Date of Photo: 11/08/2024 Time of Photo: 1254 Latitude: 33.247550 Longitude: -92.536450 Photographer: Kerri McCabe Description: Looking SE, this photo shows a closeup of the drainpipe for secondary containment with no cap. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Photograph Log Photo No. 9 Location: In Old Union from Highway 63 N, then Armer Rd, and left onto an oil lease road at 33.247367, 92.536533. City: El Dorado County/Parish: Union State: Arkansas Photo File Name: 100-0325 Orientation: SSE Date of Photo: 11/08/2024 Time of Photo: 1254 Latitude: 33.247550 Longitude: -92.536467 Photographer: Kerri McCabe Description: Looking SSE, this photo shows an additional view of the open drainpipe for the secondary containment.