Document v1MJnGdbr345gZ47o9QRGk1Y

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 6 FILED 15JAN 25 AM 11:41 REGIONAL HEARING CLERK EPA REGION 6 IN THE MATTER OF: Space Exploration Technologies Corp. Respondent Facility Identification No. TXU09110 DOCKET NO. CWA-06-2024-1768 COMPLAINT, CONSENT AGREEMENT AND FINAL ORDER Class II Administrative Penalty Proceeding under Section 309{g) of the Clean Water Act, 33 U.S.C. 1319{g}, and 40 C.F.R. 22.13{b) and 22.18 CONSENT AGREEMENT I. AUTHORITY AND PARTIES 1. This is a Class II civil administrative penalty proceeding under Section 309{g}{l}{A) and 2(8) of the Clean Water Act (CWA), 33 U.5.C. 1319(g)(l)(A) and 2(8), and 40 C.F.R. Part 22 (Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties and the Revocation/Termination or Suspension of Permits). 2. Pursuant to Section 309(g) of the CWA, 33 U.S.C. 1319(g), the Administrator of the United States Environmental Protection Agency (EPA) is authorized to assess administrative penalties against any person who has violated, inter alia, Section 30l{a) of the CWA, 33 U.S.C. 1311{a), or who has violated any permit condition or limitation implementing any of such sections in a permit issued under Section 402 of the CWA, 33 U.S.C. 1342. The Administrator of EPA delegated authority to issue this Complaint, Consent Agreement and Final Order to the Regional Admin istrator of EPA Region 6, who in turn has delegated this authority to the Director of the Enforcement and Compliance Assurance Division (Complainant). 3. Respondent is Space Exploration Technologies Corp . or SpaceX. 4. This Consent Agreement and Final Order (CAFO), which contains the elements of a complaint required by 40 C.F.R . 22 .14(a), simultaneously commences and concludes this penalty proceeding, as authorized by 40 C.F.R. 22.13{b) and 22.18(b)(2) and (3) . The CAFO is the product of settlement communications. Docket No. CW A-06-2 024-1768 Page 2 NOW THEREFORE, before the taking of any testimony, without adjudication of any issue of fact or law, and upon consent by EPA and Respondent, it is hereby STIPULATED, AGREED, AND ORDERED : II. STATUTORY AND REGULATORY FRAMEWORK 5. Section 301(a) of the CWA, 33 U.S.C. 1311(a), makes it unlawful for a person to discha rge pollutants from a point source into waters of the Un ited States, except as authorized, inter alia, by a National Pollutant Discharge Elimination System (NPDES) permit issued pursuant to CWA Section 402, 33 u.s.c. 1342. 6. Section 402(a) of the CWA, 33 U.S.C. 1342(a), establishes the NPDES program and authorizes t he EPA and authorizep states to issue permits governing the discharge of pollutants from point sources into waters of the United States. Any such discharge is subject to the specific terms and conditions prescribed in the appl icable perm it . 7. Section 402 of t he CWA, 33 U.S.C. 1342, authorized states to request approval from EPA to adm inister their own permit programs fo r discharges to navigable waters with in their jurisdiction . Pursuant to t his provision, the State of Texas requested approval from EPA to administer its own permit program for discharges to navigable waters within Texas, and such approva l was granted by EPA on September 14, 1998. Therefore, pursuant to the State' s permit program , the Texas Comm issio n of Environmental Qualit y (TCEQ) issues Texas Pollutant Discharge Elim ination System (TPDES) pe rmits. Vi olation of a TPDES permit is a vio lation of Section 301{a) of the CWA, 33 U.S.C. 1311(a). 8. Pursuant to Section 309(g)(2)(B) of t he CWA, 33 U.S.C. 1319(g)(2)(B), and 40 C.F .R. Part 19.4, the EPA may assess a Class II civi l administrative penalty of up to $26,685 per day of violation, not to exceed $333,552 in t otal, against any person that has violated Section 301(a) or has violated any pe rm it condition or lim itation of a permit issued under Section 402 of the CWA that occurred after November 2, 2015, where penalties are assessed on or after December 27, 2023 . Ill. JURISDICTIONAL ALLEGATIONS 9. Respondent is a pri vately-owned compa ny headquartered in Brownsvil le, Texas, and t he refore, a person w it hi n the meaning of Section 502(5) of the CWA, 33 U.S.C. 1362(5). 10. At al l times relevant to this action (all relevant ~imes), Respondent owned or operated t he Starbase Launch Pad site (facility) located on the south side of the eastern terminus of State Highway 4 in Cameron Cou nty, Texas, (Latitude 25 .996454; Longitude -97.154724) and was therefore, an " owner or operator" within the mean ing of 40 C.F.R. 122.2. 11. Respondent agrees that, at all relevant t imes, EPA possessed jurisdiction over discharges of poll utants from point sources into waters of the United States. Docket No . CWA-06-2024-1768 Page 3 IV. FACTUAL ALLEGATIONS 12. At all relevant times, either the water deluge system or the liquid oxygen tank at the facility acted as a " point source" of a "discharge" of "pollutants" to wetlands bordering the facility as follows. The deluge water discharged to the surrounding wetlands is considered an industrial process wastewater. The wetlands bordering the facility are "navigable waters" as defined in the CWA Section 502(7) and thus "waters of the United States." The wetlands are adjacent to and have a continuous surface connection to the Rio Grande river, which is a traditionally navigable water within the meaning of Section 502 of the CWA, 33 U.S.C. 1362, and 40 C.F.R. 122.2. 13. Because Respondent owned or operated a facility that acted as a point source of discharges of pollutants to waters of the United States, Respondent and the facility were subject to the CWA and the TPDES . 14. Respondent did not have a TPDES Permit (permit) issued under Section 402 of the CWA, 33 U.S.C. 1342. At all relevant times, Respondent was not authorized to discharge pollutants from the facil ity to waters of the United States. 15. On August 25, 2023, EPA transmitted, via e-mail, an information request letter pursuant to Section 308 of the CWA. The letter, signed on August 23, 2023, requested information regarding known unauthorized discharges from the facility to the wetlands bordering the facility. 16. On March 13, 2024, EPA issued Administrative Order CWA-06-2024-1746 citing information on known unauthorized discharges from the facility. EPA asked for information regarding launch.es in November 2023, March 2024, and June 2024. 17. Responses to the Information Request, Administrative Order, and information gathered from other sources identified unauthorized discharges from 2022 to 2024, including, but not limited to : a. On July 11, 2022, Respondent had a liquid oxygen spill which discharged 36,000 ga llons of liquid oxygen to the wetlands. b. On July 28, 2023, Respondent conducted the first full-up test of the launch pad wate r deluge system. An estimated 114,000 gallons of water was used in the test. Approximately 45,300 gallons of the deluge water discharged to the wetlands bordering the launch pad . c. On August 6, 2023, Respondent conducted a static fire test of the starship super heavy booster utilizing the water deluge system. An estimated 194,500 gallons of water were used in the test. An estimated 78,500 gallons were not captured . 41,500 gallons of the 78,500 gallons were vaporized by heat and aerodynamic forces from the engines firing . Approximately 37,000 gallons from the water de luge system discharged to the wetlands. Docket No . CWA-06-2024-1768 Page 4 d. On August 25, 2023, Respondent conducted a static fire test of the starship super heavy booster utilizing the water deluge system. An estimated 194,500 gallons of water were used in the test. An estimated 78,500 gallons were not captured. 41,500 gallons of the 78,500 gallons were vaporized by heat and aerodynamic forces from the engines firing. Approximately 37,000 gallons from the water deluge system discharged to the wetlands. e. On November 18, 2023, Respondent launched a Starship rocket from the facility. An estimated 180,000 gallons of water from the deluge system were used in the launch. An estimated 72,600 gallons were not captured . 38,400 gallons of the 78,500 gallons were vaporized by heat and aerodynamic forces from the engines firing. Approximately 34,200 gallons from the water deluge system discharged to the wetlands. f. On December 29, 2023, Respondent conducted a static fire test of the starship super heavy booster utilizing the water deluge system . An estimated 194,500 gallons of water were used in the test. An estimated 78,500 gallons were not captured. 41,500 gallons of the 78,500 gallons were vaporized by heat and aerodynamic forces from the engines firing. Approximately 37,000 gallons from the water deluge system discharged to the wetlands. g. On May 29, 2024, Respondent conducted a static fire test of the starship super heavy booster with the water deluge system. An estimated 194,500 gallons of water were used in the test. An estimated 78,500 gallons were not captured. 41,500 gallons of the 78,500 gallons were vaporized by heat and aerodynamic forces from the engines firing . Approximately 37,000 gallons from the water deluge system discharged to the wetlands. h. On June 6, 2024, Respondent launched a Starship rocket from the fadlity. An estimated 180,000 gallons of water from the deluge system were used in the launch . An estimated 72,600 gallons were not captured. 38,400 gallons of the 78,500 gallons were .vaporized by heat and aerodynamic forces from the engines firing. Approximately 34,200 gallons from the water deluge system discharged to the wetlands. 18. On July 1, 2024, Respondent applied for an individual TPDES Industrial wastewater permit (TX0146251). 19. On August 13, 2024, Respondent signed a TCEQ Agreed Order, Docket No. 2024-1282-IWDE, requiring, among other measures, sampling of future discharges at the facility, with specific effluent limitations listed in the Order. The Agreed Order is subject to public comment prior to Commission approval. 20. Each unauthorized discharge referenced in Paragraph 17 is a violation section 301(a) of the CWA, 33 U.S.C. 1311(a). Docket No. CWA-06-2024-1768 Page 5 V. ADMINISTRATIVE PENALTY 21. In cons ideration of the penalty factors of Section 309{g) of the CWA, 33 U.S.C. 1319{g), Respondent agrees to a civil penalty in the amount of one hundred forty-eight thousand three hundred and seventy-eight dollars {$148,378) (Assessed Penalty) within thirty (30) days after the date of the Final Order ratifying this Agreement is filed with the Regional Hearing Clerk. 22 . Respondent shall pay the Assessed Penalty and any interest, fees, and other charges due using any method, or combination of appropriate methods, as provided on the EPA website : https://www.epa.gov/financial/makepayment. For additional instructions see: https://www.epa.gov/fi na ncia I/additiona I-i nstructions-ma ki ng-payments-epa. 23. When making a payment, Respondent shall: a. Identify every payment with Respondent's name and the docket numbe.r of this Agreement, CWA-06-2024-1768, b. Concurrently with any payment or within 24 hours of any payment, Respondent shal l serve proof of such payment to the following person(s): Regiona l Hearing Clerk (ORCD) U.S. EPA, Region 6 1201 Elm Street, Suite 500 Dallas, TX 75270-2102 vaughn.lorena@epa.gov Roberto Bernier Supervisor, Municipal & Industrial Wastewater Section (ECDWM) U.S. EPA, Region 6 1201 Elm Street, Suite 500 Dallas, TX 75270-2102 bernier.roberto@epa.gov Scott McDonald Manage r, Water Legal Branch (ORCEW) U.S. EPA, Region 6 1201 Street, Suite 500 Dallas, TX 75270-2102 mcdonald .scott@epa.gov and Docket No. CWA-06-2024-1768 Page 6 U.S. Environmental Protection Agency Cincinnati Finance Center Via electronic mail to: cinwd_acctsreceivable@epa.gov "Proof of payment" means, as applicable, a copy of the check, confirmation of credit card or debit card payment, or confirmation of wire or automated clearinghouse transfer, and any other information required to demonstrate that payment has been made according to EPA requirements, in the amount due, and identified with the appropriate docket number and Respondent's name . c. Interest, Charges, and Penalties on Late Payments. Pursuant to 31 U.S.C. 3717, 31 C.F.R. 901.9, and 40 C.F.R. 13.11, if Respondent fails to timely pay the full amount of the Assessed Penalty per this Agreement, EPA is authorized to recover, in add ition to the amount of the unpaid Assessed Penalty, the following amounts. i. Interest. Interest begins to accrue from the Filing Date . If the Assessed Penalty is paid in ful l within thirty (30) days, interest accrued is wa ived. If the Assessed Pena lty is not paid in full within thirty (30) days, interest w ill continue to accrue until any unpaid portion of the Assessed Penalty as well as any interest, penalties, and other charges are paid in full. To protect the interests of the United States the rate of interest is set at the IRS large corporate underpayment rate, any lower rate wou ld fa il to provide Respondent adequate incentive for t imely payment. ; ii. Handling Charges. Respondent will be assessed monthly a charge to cover EPA's costs of processing and handling overdue debts. If Respondent fa ils to pay the Assessed Penalty in accordance with this Agreement, EPA will assess a charge to cover the costs of handl ing any unpaid amounts for the first thirty {30) day period after the Filing Date. Additional handling charges will be assessed every thirty (30) days, or any portion thereof, until the unpaid portion of the Assessed Penalty as well as any accrued interest, penalties, and other charges are paid in full. iii. Late Payment Penalty. A late payment penalty of six percent (6%} per annum, will be assessed monthly on all debts, including any unpaid portion of the Assessed Penalty, interest, penalties, and other charges, that remain del inquent more than ninety (90} days . Any such amounts will accrue from the Fil ing Date. d. Late Penalty Actions. In addition to the amounts described in the prior Paragraph, if Respondent fails to timely pay any portion of the Assessed Penalty, interest, or other charges and penalties per this Agreement, EPA may take additional actions. Such actions EPA may take include, but are not li mited to, the following . Docket No. CWA-06-2024-1768 Page 7 i. Refer the debt to a credit reporting agency or a collection agency, per 40 C.F.R. 13.13 and 13.14. ii. Collect the debt by administrative offset (i .e., the withholding of money payable by the United States government to, or held by the United States government fo r, a person to satisfy the debt the person owes the United States government) , which includes, but is not limited to, referral to the Internal Revenue Service for offset against income tax refunds, per 40 C.F.R. Part 13, Subparts C and H. iii. Suspend or revoke Respondent's licenses or other privileges, or suspend or disqualify Respondent from doing business with EPA or engaging in programs EPA sponsors or funds, per 40 C.F .R. 13.17. iv. Refer this matter to the United States Department of Justice for litigation and collection, per 40 C.F.R. 13.33. e. Allocation of Payments. Pursuant to 31 C.F.R. 901.9(f) and 40 C.F .R. 13.ll(d), a partial payment of debt will be applied first to outstanding hand ling charges, second to late penalty charges, third to accrued interest, and last to the principal that is the outstanding Assessed Penalty amount: f. Tax Treatment of Penalties. Penalties, interest, and other charges paid pursuant to this Agreement shall not be deductible for purposes of federal taxes. 24. Pursuant to 26 U.S.C. 6050X and 26 C.F.R. l.6050X-l, EPA is required to send to the Internal Revenue Service (IRS) annually, a completed IRS Form 1098-F ("Fines, Penalties, and Other Amounts" ) with respect to any court order or settlement agreement (including administrative settlements), that require a payor to pay an aggregate amount that EPA reasonably believes will be equal to, or in excess of, $50,000 for the payor' s violation of any law or the investigation or inquiry into the payor's potential violation of any law, including amounts paid for "restitution or remediation of property" or to come "into compliance with a law." EPA is further required to furnish a written statement, which provides the same information provided to the IRS, to each payor (i.e. , a copy of IRS Form 1098-F). Failure to comply with providing IRS Form W-9 or Tax Identification Number (TIN), as described below, may subject Respondent to a penalty, per 26 U.S.C. 6723, 26 U.S.C. 6724(d)(3), and 26 C.F.R.. 301.6723-1. In order to provide EPA with sufficient information to enable it to fulfill these obligations, EPA herein requires, and Respondent herein agrees, that : a) Respondent shall complete an IRS Form W-9 ("Request for Taxpayer Identification Number and Certification" ), wh ich is available at https://www.irs.gov/pub/irs pdf/fw9.pdf; b) Respondent shall therein certify that its completed IRS Form W-9 includes Respondent's correct TIN or that Respondent has applied and is waiting for issuance of a TIN ; Docket No. CWA-06-2024-1768 Page 8 c) Respondent shall email its completed Form W-9 to EPA's Cincinnati Finance Center at sherrer.dana@epa.gov, within 30 days after the Final Order ratifying this Agreement is fi led, and EPA recommends encrypting IRS Form W-9 email correspondence; and d) In the event that Respondent has certified in its completed IRS Form W-9 that it has applied for a TIN and that TIN has not been issued to Respondent within 30 days after the Effective Date, then Respondent, using the same emai l address identified in the preceding sub- paragraph, shall further : i. notify EPA' s Cincinnati Finance Center of this fact, via email, within 30 days afte r the 30 days after the Effective Date of this Order per paragraph 32; and ii. provide EPA's Cincinnati Finance Center with Respondent' s TIN, via emai l, within five (5) days of Respondent's issuance and receipt of the TIN. 25. Respondent shall not, and shall not allow any other person to, deduct any penalties and interest paid under this CAFO from federal , state, or local taxes. 26. Pursuant to Section 309(g)(9) of the CWA, 33 U.S.C. 1319(g)(9), if Respondent fails to pay the assessed penalty on time, the EPA may request the U.S. Department of Justice to bring a civil action to recover the overdue amount, plus interest at currently prevailing rates from the Effective Date of this CAFO. In such an action, the validity, amount, or appropriateness of the assessed penalty shall not be subject to review. In addition to any assessed penalty and interest, Respondent shall pay attorney fees, costs for collection proceedings, and a quarterly nonpayment penalty, which shall equal 20% of the aggregate amount of Respondent's penalties and nonpayment penalties that are unpaid as of the beginning of such quarter, for each quarter during which such failure to pay persists. The EPA may also take other debt collection actions as authorized by law, including, but not limited to, the Debt Collection Act, 33 U.S.C. 3711, and 33 C.F.R. Part 13. VI. APPLICABILITY 27. This CAFO shall apply to and be binding on Respondent, Respondent's officers, di rectors, partners, agents, employees, contractors, successors, and assigns . Action or inaction of any persons, firms, contractors, employees, agents, or corporations acting under, through, or for Respondent shall not excuse any failure of Respondent to fully perform its obligations under this CAFO. Changes in ownership, real property interest, or transfer of personal assets shall not alter Respondent' s obligations under th is CAFO . Docket No. CWA-06-2024-1768 Page 9 VII. RESPONDENT'S ADMISSIONS AND WAIVERS 28. In accordance with 40 C.F.R. 22.18{b)(2), for the purpose of this proceeding only, Respondent: a. admits the jurisdictional allegations set forth in Section Ill of the CAFO; b. neither admits nor denies specific factual allegations set forth in Section IV of the CAFO; c. consents to all conditions specified in this CAFO and to the assessment of the civil administrative penalty set forth in Section V of the CAFO; d. waives any right to contest the allegations set forth in Section Ill and IV of this CAFO; and e. waives its right to appeal this proposed Final Order. VIII. RESERVATION OF RIGHTS 29. In accordance with 40 C.F.R. 22 .18{c), full payment of the penalty set forth in this CAFO only resolves Respondent' s CWA civil penalty liabilities for the violations specifically alleged herein and does not in any case affect the right of the EPA to pursue appropriate injunctive or other equitable relief or criminal sanctions for any violations of law. 30. This CAFO is not a permit or modification of any existing permit issued pursuant to any federal, state, or local laws or regulations, and shall in no way relieve or affect Respondent's obl igations under any applicable federal, state, or local laws, regulations, or pe rmits. IX. ATTORNEYS FEES AND COSTS . 31. Unless otherwise specified, each party shall bear its own attorney's fees and costs. X. EFFECTIVE DATE AND TERMINATION 32 . In accordance with C.F.R. 22.18(b){3) and 22.31{b), the Effective Date of this CAFO is the date that the Final Order, having been signed by the Regional Judicial Officer, is filed with the Regional Hearing Clerk. This CAFO shall terminate when Respondent has complied with the requirements of this CAFO in full. XI. PUBLIC NOTICE 33. Pursuant to Section 309{g)(4) of the CWA, 33 U.S.C. 1319(g)(4), and 40 C.F .R. 22.45{b), this Consent Agreement is subject to public notice and comment prior to issuance of the proposed Fina l Order. Complainant reserves the right to withhold or withdraw consent of this Consent Agreement if public comments disclose relevant and material information that was not considered by Complainant in Docket No. CWA-06-2024-1768 Page 10 entering into this Consent Agreement. Respondent may withdraw from this Consent Agreement on ly upon receipt of written notice from EPA that it no longer suppo rts entry of this Consent Agreement. 34. Pu rsuant to Section 309{g)(1) of the CWA, 33 U.5.C. 1319{g)(1), the EPA has consulted with the State of Texas regarding this penalty action . ForRespondentSpaceX Date V.P., Starship Lega l and Regulatory For Complainant the U.S. Environmental Protection Agency, Region 6 October 21, 2024 Date ~ ) tw(f J ~~ Digitally signed by CHERYL SEAGER Date: 2024.10.21 11 :23:45 -05'00' Cheryl T. Seager, Director Enforcement and Compliance Assurance Division Docket No. CWA-06-2024-1768 Page 11 FINAL ORDER IT IS HEREBY ORDERED that this Consent Agreement and Final Order (U.S. EPA Docket No. CWA- 062024-1768) be entered, and that Respondent shall pay a civil penalty in the amount of o one hundred forty-eight thousand three hundred and seventy-eight dollars ($148,378) in accordance with the terms of this Consent Agreement and Final Order. Date Rucki, Thomas Digitally signed by Rucki, Thomas Date: 2025.01.15 10:12:43 -05'00' Thomas Rucki Regional Judicial Officer U.S. EPA, Region 6 Docket No. CWA-06-2024-1768 Page 12 CERTIFICATE OF SERVICE I certify that the foregoing Consent Agreement and Final Order was delivered to the Regional Hearing Clerk, U.S. EPA, Region 6, 1201 Elm Street, Dallas, Texas 75270-2102 via email at vaughn .lorena@epa.gov, and that a true and correct copy was sent this day in the following manner to the addresses: Copy by email : Sheila Mccorkle V.P, Starship Legal and Regulatory SpaceX 52448 Boca Chica Boulevard Brownsville, TX 78521 sheila.mccorkle@spacex.com Craig Pritzlaff, Director Office of Compliance and Enforcement Texas Commission on Environmental Quality P.O. Box 13087 Austin, TX 78711-3087 pritzlaff.cra ig@tceq.texas.gov Tucker Henson Regional Counsel U.S. EPA, Region 6 1201 Elm Street, Suite 500 Dallas, TX 75270-2102 henson.tucker@epa.gov