Document zzJYJBEJE2MNoK33jjRe3wobg

Kinetica Deepwater Express Docket No. CAA-06-2024-3311 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 6 DALLAS, TEXAS FILED 17 DEC 24 PM 02:48 REGIONAL HEARING CLERK EPA REGION 6 IN THE MATTER OF: ( ( ( KINETICA DEEPWATER EXPRESS LLC ( PATTERSON, LOUISIANA ( ( DOCKET NO. CAA-06-2024-3311 ( ( ( RESPONDENT. ( ( ( ( ______________________________________________________________________________ CONSENT AGREEMENT A. PRELIMINARY STATEMENT 1. This is an administrative penalty assessment proceeding brought under Section 113(d) of the Clean Air Act (the "CAA" or the "Act"), 42 U.S.C. 7413(d), and Sections 22.13, 22.18, and 22.34 of the Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties and the Revocation/Termination or Suspension of Permit ("Consolidated Rules"), as codified at 40 C.F.R. Part 22. 2. Complainant is the United States Environmental Protection Agency, Region 6 ("EPA"). On EPA's behalf, the Director of the Enforcement and Compliance Assurance Division, EPA Region 6, has been delegated the authority to settle civil administrative penalty and compliance proceedings under Section 113(d) of the Act, 42 U.S.C. 7413(d). Kinetica Deepwater Express Docket No. CAA-06-2024-3311 3. Kinetica Deepwater Express LLC ("Kinetica" or "Respondent") is a limited liability company doing business in the State of Louisiana. Respondent is a "person" as defined in Section 302(e) of the Act, 42 U.S.C. 7602(e). 4. Complainant and Respondent, having agreed that settlement of this action is in the public interest, consent to the entry of this Consent Agreement along with the corresponding Final Order hereinafter known together as the "CAFO" without adjudication of any issues of law or fact herein, and Respondent agrees to comply with the terms of this CAFO. B. JURISDICTION 5. This CAFO is entered into under Section 113(d) of the Act, 42 U.S.C. 7413(d), and the Consolidated Rules, 40 C.F.R. Part 22. The alleged violation in this CAFO is pursuant to Section 113(a)(1)(B) of the Act, 42 U.S.C. 7413(a)(1)(B). 6. EPA and the United States Department of Justice jointly determined that this matter, although it involves an alleged violation that occurred more than a year before the initiation of this proceeding, is appropriate for an administrative penalty assessment. 42 U.S.C. 7413(d); 40 C.F.R. 19.4. 7. In satisfaction of the notice requirements of Section 113(a)(1) of the Act, 42 U.S.C. 7413(a)(1), on November 30, 2022, EPA issued to Respondent a Notice of Violation and Opportunity to Confer (the "NOVOC") and provided a copy of the NOVOC to the State of Louisiana. In the NOVOC, EPA provided notice to both Respondent and the State of Louisiana that EPA found Respondent committed the alleged violation of the Louisiana State Implementation Plan ("SIP") described in Section E of this CAFO and provided Respondent an 2 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 opportunity to confer with EPA. Representatives of Respondent and EPA initially discussed the violation alleged in the NOVOC on January 23, 2023, and at various other subsequent times. 8. The Regional Judicial Officer is authorized to ratify this CAFO which memorializes a settlement between Complainant and Respondent. 40 C.F.R. 22.4(b) and 22.18(b). 9. The issuance of this CAFO simultaneously commences and concludes this proceeding. 40 C.F.R. 22.13(b). C. GOVERNING LAW 10. The Act is designed "to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population." 42 U.S.C. 7401(b)(1). 11. EPA is authorized by Section 113 of the CAA, 42 U.S.C. 7413, to take action to ensure that air pollution sources comply with all federally applicable air pollution control requirements. These include requirements promulgated by EPA and those contained in SIPs. Louisiana State Implementation Plan Requirements 12. Section 109(a) of the CAA, 42 U.S.C. 7409(a), requires the Administrator of EPA to publish national ambient air quality standards ("NAAQS") for certain pollutants. The NAAQS establish primary air quality standards to protect public health and secondary standards to protect public welfare. 13. To achieve the objectives of the NAAQS and the CAA, Section 110(a) of the CAA, 42 U.S.C. 7410(a), requires each State to adopt a SIP that provides for the implementation, maintenance, and enforcement of the NAAQS, and submit it to the Administrator of the EPA for approval. 3 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 14. The State of Louisiana has adopted a SIP that has been approved by EPA. See 40 C.F.R. Part 52, Subpart T. Title 33 of the Louisiana Administrative Code ("LAC"), Part III, of the federally-approved Louisiana SIP, pertains to the control of organic compound emissions, and includes housekeeping requirements in Chapter 21. See LAC 33:III.2113. 15. LAC 33:III.2113.A of the Louisiana SIP, approved at 76 Fed. Reg. 38977 (July 5, 2011), applies to facilities with the potential to emit organic compounds and requires that best practical housekeeping and maintenance practices be maintained at the highest possible standards to reduce the quantity of organic compounds emissions and that emission of organic compounds be reduced wherever feasible. 16. LAC 33:III.2101 of the Louisiana SIP, approved at 59 Fed. Reg. 23,166 (May 5, 1994), provides that "[all] facilities affected by the regulations in this Chapter shall be in compliance as soon as practicable but in no event later than one year after becoming an affected facility, except for facilities affected by a different compliance schedule specified in an individual section of this Chapter." D. FINDINGS OF FACT AND CONCLUSIONS OF LAW 17. Respondent owns and/or operates the Patterson Terminal, located at 309 Torch Lane, Patterson, Louisiana, 70392 (the "Facility"). 18. At all times relevant to this proceeding, Respondent has owned and/or operated the Facility. 19. The Facility is a terminal facility that receives natural gas liquids (condensate) under pressure from offshore production facilities or a nearby processing plant. The condensate goes through pressure reduction and separation stages prior to storage in two 4 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 55,000-barrel external floating roof tanks. Condensate is typically sent from the storage tanks through a pipeline for transportation, but it can also be loaded to trucks. 20. The Facility is a "stationary source" within the meaning of Section 112(a)(3) of the Act, 42 U.S.C. 7412(a)(3), and LAC 33:III.502 of the Louisiana SIP, 81 Fed. Reg. 51,341 (August 4, 2016). 21. The Facility is a "major source" within the meaning of Section 112(a)(1) of the Act, 42 U.S.C. 7412(a)(1); the Act's Title V program, Section 501(2) of the Act, 42 U.S.C. 7661(2); 40 C.F.R. 70.2; and LAC 33:III.502 of the Louisiana SIP, 81 Fed. Reg. 51,341 (August 4, 2016). 22. The Facility is subject to the CAA Title V Federal Operating Permit program. 23. On or about February 22, 2017, the Louisiana Department of Environmental Quality ("LDEQ") issued Respondent Title V Permit No. 2660-00059-V7 (the "Title V Permit"), an air operating permit issued under the Louisiana Permit Program. The Title V Permit expired on September 27, 2021. The Facility submitted a permit application for a minor modification in March 2021 and the final permit was issued by LDEQ on December 5, 2022, Title V Permit No. 2660-00059-V8. 24. At all times relevant to this proceeding, Respondent owned and/or operated units that emit Volatile Organic Compounds ("VOCs") at the Facility. 25. Pursuant to Special Requirement 103 of the Title V Permit, the entire Facility is subject to the housekeeping requirements of LAC 33:III.2113.A. 26. EPA contracted helicopter flyovers in Louisiana between August 24 and September 24, 2021, to assess emissions sources using Optical Gas Imaging ("OGI") technology. 5 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 27. The flyover of the Facility at issue in this CAFO was conducted on September 2, 2021, three (3) days after Hurricane Ida made landfall in Louisiana. During the flyover, EPA observed potentially unauthorized hydrocarbon emissions venting to the atmosphere during routine Facility operations. 28. On October 28, 2021, EPA sent Respondent a letter via email notifying Respondent of potentially unauthorized emissions at a facility believed to be owned and operated by Respondent, and included a link to an OGI video capture of potentially unauthorized hydrocarbon emissions from the Facility. EPA asked Respondent to verify ownership, provide current site-specific permit information, and take any necessary corrective action to address unauthorized hydrocarbon emissions at the Facility. EPA considered information provided by Respondent to determine whether violations occurred at the Facility. 29. On October 28, 2021, Respondent sent EPA an email indicating that the addressee to whom EPA sent the video capture no longer worked for the Company and did not receive a link to view the OGI video and requested that EPA provide the OGI video link to personnel identified in the email. EPA provided the link to the OGI video capture to the personnel identified in Respondent's email on October 28, 2021. 30. On November 30, 2021, EPA sent an email to Respondent seeking a response to the prior letter. 31. On December 16, 2021, Respondent sent a letter to EPA, which confirmed that a storage tank at the Facility had two vacuum break seal gas leaks. Respondent had previously ordered the materials needed to make repairs, and the repairs were completed on December 10, 2021. 6 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 32. More than thirty (30) days before the issuance of this CAFO, Respondent was notified of the violations alleged herein. On November 30, 2022, EPA sent Respondent the NOVOC and provided a copy to the State of Louisiana. 33. On January 23, 2023, and on various other occasions, EPA conferred with Respondent regarding the violation alleged herein and provided an opportunity for Respondent to submit additional information or materials. 34. On February 2, 2023, Respondent provided EPA with the work order and invoice for the storage tank repair, as well as a video of a handheld monitoring device demonstrating that the storage tank was no longer leaking. 35. EPA has conducted a comprehensive review of the Facility-specific information gathered based upon observations made from the OGI video capture, Facility permitted operations, and information provided by Respondent. Based on this review, EPA identified the alleged violation of the CAA at the Facility as described in Section E of this CAFO. E. ALLEGED VIOLATION 36. The Facility is subject to LAC 33:III.2113.A, under which Respondent was and is required to maintain the best practical housekeeping and maintenance practices at the highest possible standards to reduce the quantity of organic compound emissions. 37. On information and belief, Respondent emitted unauthorized hydrocarbon emissions to the atmosphere from two vacuum break seal leaks on a storage tank at the Facility for an unknown period of time before repairs were made on December 10, 2021. 7 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 38. Respondent violated LAC 33: III: 2113.A by emitting unauthorized organic compounds directly to the atmosphere based upon failing to maintain the best practical housekeeping and maintenance practices at the highest possible standards. F. CIVIL PENALTY AND CONDITIONS OF SETTLEMENT General 39. For the purpose of this proceeding, as required by 40 C.F.R. 22.18(b)(2), Respondent: a. admits that EPA has jurisdiction over the subject matter alleged in this CAFO; b. neither admits nor denies the specific factual allegations contained in the CAFO; c. consents to the assessment of a civil penalty, as stated below; d. consents to the issuance of any specified compliance or corrective action order1; e. consents to the conditions specified in this CAFO; f. consents to any stated Permit Action2; g. waives any right to contest the alleged violation set forth in Section E of this CAFO; and h. waives its rights to appeal the Final Order included in this CAFO. 1 Although 40 C.F.R. 22.18(b)(2) requires each subbullet, d. and f. are not applicable to Respondent with regard to this particular case. 2 See id. 8 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 40. For the purpose of this proceeding, Respondent: a. agrees that this CAFO states a claim upon which relief may be granted against Respondent; b. acknowledges that this CAFO constitutes an enforcement action for purposes of considering Respondent's compliance history in any subsequent enforcement action; c. waives any and all remedies, claims for relief and otherwise available rights to judicial or administrative review that Respondent may have with respect to any issue of fact or law set forth in this CAFO, including any right of judicial review under Section 307(b)(1) of the CAA, 42 U.S.C. 7607(b)(1); d. consents to personal jurisdiction in any action to enforce this CAFO in the United States District Court for the Western District of Louisiana; e. waives any right it may possess at law or in equity to challenge the authority of EPA to bring a civil action in a United States District Court to compel compliance with this CAFO and to seek an additional penalty for such noncompliance, and agrees that federal law shall govern in any such civil action; and f. agrees that in any subsequent administrative or judicial proceeding initiated by the Complainant or the United States for injunctive relief, civil penalties, or other relief relating to the Facility, Respondent shall not assert, and may not maintain, any defense or claim based upon the principles of waiver, res judicata, collateral estoppel, issue preclusion, claim preclusion, claim 9 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 splitting, or other defenses based on any contention that the claims raised by the Complainant or the United States were or should have been brought in the instant case, except with respect to claims that have been resolved pursuant to this CAFO. Penalty Assessment and Collection 41. Upon consideration of the entire record herein, including the Findings of Fact and Conclusions of Law, which are hereby adopted and made a part hereof, and upon consideration of the size of the business, the economic impact of the penalty on the business, Respondent's full compliance history and good faith efforts to comply, the duration of the violation, payment by the violator of any penalties previously assessed for the same violation, the economic benefit of noncompliance, the seriousness of the violation, and other factors as justice may require, EPA has assessed a civil penalty in the amount of $62,500 (the "EPA Penalty"). The EPA Penalty has been determined in accordance with Section 113 of the CAA, 42, U.S.C. 7413, and at no time exceeded EPA's statutory authority. 42. Respondent agrees to: a. pay the EPA Penalty within 30 calendar days of the Effective Date of this CAFO; and b. pay the EPA Penalty by cashier's check, certified check, or wire transfer made payable to "Treasurer, United States of America, EPA - Region 6." Payment shall be remitted in one of five (5) ways: (1) regular U.S. Postal Service mail including certified mail; (2) overnight mail; (3) wire transfer; (4) Automated Clearinghouse for receiving U.S. currency; or (5) Online Payment. 10 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 For regular U.S. Postal Service mail, U.S. Postal Service certified mail, or U.S. Postal Service express mail, payment should be remitted to: U.S. Environmental Protection Agency Fines and Penalties Cincinnati Finance Center PO Box 979077 St. Louis, MO 63197-9000 For overnight mail (non-U.S. Postal Service, e.g. FedEx), payment should be remitted to: U.S. Bank U.S. Environmental Protection Agency Government Lockbox 979078 3180 Rider Trail S. Earth City, MO 63045 Contact: Natalie Pearson (314) 418-4087 For wire transfer, payment should be remitted to: Federal Reserve Bank of New York ABA: 021030004 Account Number: 68010727 SWIFT address: FRNYUS33 33 Liberty Street New York, NY 10045 Field Tag 4200 of the Fedwire message should read: "D 68010727 Environmental Protection Agency" For Automated Clearinghouse (also known as "remittance express" or "REX"): U.S. Treasury REX / Cashlink ACH Receiver ABA: 051036706 Account Number: 310006, Environmental Protection Agency CTX Format Transaction Code 22 - checking Physical location of U.S. Treasury facility: 5700 Rivertech Court Riverdale, MD 20737 11 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 Contact: Jesse White (301) 887-6548 For Online Payment: https://www.pay.gov/paygov/ Enter sfo 1.1 in search field Open form and complete required fields. PLEASE NOTE: The docket number CAA-06-2024-3311 should be clearly typed on the check to ensure proper credit. The payment shall also be accompanied by a transmittal letter that shall reference Respondent's name and address, the case name, and docket number CAA-06-20243311. Respondent's adherence to this request will ensure proper credit is given when penalties are received for EPA Region 6. Respondent shall also email a simultaneous notice of such payment, including a copy of the money order, or check, and the transmittal letter to the following email addresses: James Leathers U.S. EPA Region 6 leathers.james@epa.gov And Region 6 Hearing Clerk U.S. EPA Region 6 Vaughn.Lorena@epa.gov 43. Respondent agrees to pay the following on any overdue EPA Penalty: a. Interest. Pursuant to Section 113(d)(5) of the CAA, 42 U.S.C. 7413(d)(5), any unpaid portion of a civil penalty must bear interest at the rates established pursuant to 26 U.S.C. 6621(a)(2). 12 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 b. Nonpayment Penalty. On any portion of a civil penalty more than ninety (90) calendar days delinquent, Respondent must pay a nonpayment penalty, pursuant to Section 113(d)(5) of the CAA, 42 U.S.C. 7413(d)(5), which shall accrue from the date the penalty payment became delinquent, and which shall be in addition to the interest which accrues under subparagraph a. of this Paragraph. 44. Respondent shall pay a charge to cover the cost of processing and handling any delinquent penalty claim, pursuant to 42 U.S.C. 7413(d)(5), including, but not limited to, attorney's fees incurred by the United States for collection proceedings. 45. If Respondent fails to timely pay any portion of the penalty assessed under this CAFO, EPA may: a. refer the debt to a credit reporting agency, a collection agency, or to the Department of Justice for filing of a collection action in the appropriate United States District Court (in which the validity, amount, and appropriateness of the assessed penalty and of this CAFO shall not be subject to review) to secure payment of the debt, which may include the original penalty, enforcement and collection expenses, nonpayment penalty and interest, 42 U.S.C. 7413(d)(5) and 40 C.F.R. 13.13, 13.14, and 13.33; b. collect the above-referenced debt by administrative offset (i.e., the withholding of money payable by the United States to, or held by the United States for, a person to satisfy the debt the person owes the Government), which includes, but is not limited to, referral to the Internal Revenue Service 13 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 for offset against income tax refunds, 40 C.F.R. Part 13, Subparts C and H; and c. 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, 40 C.F.R. 13.17. Conditions of Settlement 46. Respondent shall conduct a total of four (4) quarterly visual secondary seal or closure mechanism inspections at each external floating roof tank at the Facility within eleven (11) months from the Effective Date of this CAFO. The inspections shall be conducted quarterly at least 45 days apart. Each visual inspection shall follow the Facility's procedures and include OGI surveys of all components on the tank roof. The OGI survey contemplated by Paragraph 54 shall constitute one of the surveys required by this Paragraph 46. The initial inspection shall be conducted within thirty (30) days of the Effective Date of this CAFO. 47. Within thirty (30) days of completing each inspection required by Paragraph 46, Respondent shall submit to EPA documentation of the following information: (a) the date each inspection was completed; (b) a description of the issue(s) observed; (c) the nature and timing of all modifications, corrective actions, or other actions planned or undertaken as a result of the inspections; and (d) the OGI video capture documenting emissions if observed during the inspection. Such documentation shall be emailed to: James Leathers U.S. EPA Region 6 leathers.james@epa.gov 14 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 48. With regard to EQT 0004 and EQT 0002, Respondent shall conduct one primary and two secondary seal gap measurements at all external floating roof tanks in accordance with the procedures in 40 C.F.R. 60.113b(b)(2). The primary seal gap measurement shall be conducted within one-hundred and eighty (180) days of the Effective Date. The first secondary seal gap measurement shall be conducted within sixty (60) days of the Effective Date and the second shall be no less than 5 months and no more than 7 months apart from the first measurement; provided, however, this Paragraph 48 is not intended to otherwise subject tank EQT 0002 to the requirements of 40 CFR Part 60, Subpart Kb. 49. Within thirty (30) days of completing each of the primary and secondary seal gap measurements required by Paragraph 48, Respondent shall submit to EPA documentation of the following: (a) the date each measurement was taken; (b) the tank level at which the measurement was taken; (c) a description of the issue(s) observed relating to regulatory noncompliance or operating standards, or equipment not operating as designed; and (d) the nature and timing of all modifications, corrective actions, or other actions planned or undertaken, as a result of the measurements. Such documentation shall be emailed to the enforcement officer identified in Paragraph 47. 50. Within forty-five (45) days of the Effective Date of this CAFO, Respondent shall review its operation and maintenance procedures for inspecting tanks, closed-vent systems, control devices, and truck loading operations at the Facility, and update the procedures, as necessary, to ensure that these procedures, at a minimum, meet the requirements described in Section IV of Appendix A. If Respondent does not have such procedures, it shall create such procedures in accordance with Section IV of Appendix A. 15 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 51. Within thirty (30) days of the Effective Date of this CAFO, Respondent shall select an independent third-party auditor (the "Auditor") who satisfies the Auditor Qualifications listed in Section I of Appendix A to perform the Independent Audit described in Paragraph 53. 52. Respondent shall bear all expenses of selecting and retaining the Auditor. 53. The Independent Audit shall consist of the following: a. Respondent shall: (1) provide the Auditor with a copy of this CAFO and all attachments; (2) grant the Auditor reasonable access to the Facility; and (3)provide or otherwise make available any necessary personnel, documents, trainings, and other resources to enable the Auditor to fully perform all activities required by this CAFO. b. Respondent shall ensure that within one hundred twenty (120) days of the Effective Date of this CAFO, the Auditor completes all permitting and operations reviews at the Facility in accordance with Section II of Appendix A. The Auditor may conduct additional steps beyond those identified in Section II of Appendix A as part of the permitting and operations review if it determines that such steps are necessary to complete the Audit. c. Respondent shall work with the Auditor in a commercially reasonable manner consistent with this CAFO to assist the Auditor so that within one hundred twenty (120) days of the Effective Date of this CAFO, the Auditor completes the site inspection and evaluation at the Facility in accordance with Section III of Appendix A. The Auditor may conduct additional steps beyond those identified in Section III of Appendix A as part of the site 16 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 inspection and evaluation if it determines that such steps are necessary to complete the Audit. d. Respondent shall work with the Auditor in a commercially reasonable manner consistent with this CAFO so that within thirty (30) days of the Auditor completing the permitting and operations reviews and the site inspection and evaluation described in subparagraphs (b) and (c) of this Paragraph, the Auditor completes an assessment of the operation and maintenance procedures, in accordance with Section IV of Appendix A at the Facility. The Auditor may conduct additional steps beyond those identified in Section IV of Appendix A as part of the operations and maintenance review if it determines that such steps are necessary to complete the Audit. e. Respondent shall work with the Auditor in a commercially reasonable manner consistent with this CAFO so that within sixty (60) days of the Auditor completing the work described in subparagraph (d) of this Paragraph, the Auditor simultaneously provides a report of the Audit (the "Audit Report") to EPA and Respondent that includes, at a minimum, the information identified in Section V of Appendix A. f. If the Auditor provides a draft of the Audit Report to Respondent, it must simultaneously also provide a copy of the draft to EPA. g. Respondent shall not assert that any documents reviewed, cited, or relied on by the Auditor and the audit team in undertaking the Audit are privileged as 17 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 attorney-client communications or attorney work products, even if written for or reviewed by legal staff. h. As soon as possible, but no later than sixty (60) days of receipt of the Audit Report, Respondent shall send a letter report to EPA ("Letter Report") containing all information identified in Section VI of Appendix A. The Letter Report shall be emailed to: James Leathers U.S. EPA Region 6 leathers.james@epa.gov 54. Within 30 days after the submission of the Letter Report, Respondent shall conduct an OGI survey to detect and correct any gas leaks or unauthorized fugitive emissions from all tanks, closed-vent systems, control devices, and truck loading operations at the Facility. Respondent shall also conduct an OGI survey to detect and correct any gas leaks or fugitive emissions from truck loading/unloading operations while active loading/unloading is occurring. 55. Within thirty (30) days of completing the OGI survey required by Paragraph 54, Respondent shall submit to EPA documentation of the following information: (a) the date and time that the OGI survey was completed; (b) a description of the issue(s) observed evidencing non-compliance with regulatory requirements or operating standards, or equipment not operating as designed; (c) the nature and timing of all modifications, corrective actions, or other actions planned or undertaken as a result of the OGI survey; and (d) documentation of loading/unloading occurring during the survey including: type of product being loaded or unloaded, the rack location of the loading/unloading, the tanks being filled/drawn from, and 18 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 the time each load/unload began and ended. Such documentation shall be emailed to the enforcement officer identified in Paragraph 47. 56. EPA reserves the right to pursue enforcement of any violations identified as a result of the activities in Paragraphs 46-55. Additional Terms of Settlement 57. Respondent agrees that the time period from the Effective Date of this CAFO until all the conditions specified in Paragraphs 46-55 (Conditions of Settlement) are completed (the "Tolling Period") shall not be included in computing the running of any statute of limitations potentially applicable to any action brought by Complainant on any claims set forth in Section E of this CAFO (the "Tolled Claim"). Respondent shall not assert, plead, or raise in any fashion, whether by answer, motion or otherwise, any defense of laches, estoppel, or waiver, or other similar equitable defense based on the running of any statute of limitations or the passage of time during the Tolling Period in any action brought on the Tolled Claim. 58. The provisions of this CAFO shall apply to and be binding upon Respondent and its successors, assigns, or any other entities or persons otherwise bound by law. From the Effective Date of this Agreement until the end of the Tolling Period, as set out in Paragraph 57 of this CAFO, Respondent must give written notice and a copy of this CAFO to any successors in interest prior to transfer of ownership or control of any portion or interest in the Facility. Simultaneously with such notice, Respondent shall provide written notice of such transfer, assignment, or delegation to EPA. In the event of any such transfer, assignment or delegation, Respondent shall continue to be bound by the obligations or liabilities of this CAFO until EPA has provided written approval. 19 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 59. By signing this CAFO, Respondent acknowledges that this CAFO will be available to the public and agrees that this CAFO does not contain any confidential business information. See 40 C.F.R. Part 2, Subpart B (Confidentiality of Business Information). 60. By signing this CAFO, the undersigned representative of Complainant and the undersigned representative of Respondent each certify that he or she is fully authorized to execute and enter into the terms and conditions of this CAFO and has legal capacity to bind the party he or she represents to this CAFO. 61. By signing this CAFO, Respondent certifies that the information it has supplied concerning this matter was at the time of submission, and is, truthful, accurate, and complete for each submission, response, and statement. Respondent acknowledges that there are significant penalties for submitting false or misleading information, including the possibility of fines and imprisonment for knowing submission of such information, under 18 U.S.C. 1001. 62. EPA and Respondent agree to the use of electronic signatures for this matter. EPA and Respondent further agree to electronic service of this CAFO by email to the following addresses: To EPA: tripathi.arati@epa.gov To Respondent: bill.prentice@kineticallc.com 63. Respondent specifically waives its right to seek reimbursement of its costs and attorney's fees under 5 U.S.C. 504 and 40 C.F.R. Part 17. Except as qualified by Paragraph 44 of this CAFO, each party shall bear its own attorney's fees, costs, and disbursements incurred in this proceeding. 20 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 64. Pursuant to 26 U.S.C. 6050X and 26 C.F.R. 1.6050X-1, 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"), which 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; c. Respondent shall email its completed Form W-9 to EPA's Cincinnati Finance Center at Chalifoux.Jessica@epa.gov, within 30 days after the Final Order 21 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 ratifying this Agreement is filed, 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 email address identified in the preceding subparagraph, shall further: e. notify EPA's Cincinnati Finance Center of this fact, via email, within 30 days after the 30 days after the Effective Date of this Order per Section H of this CAFO; and f. provide EPA's Cincinnati Finance Center with Respondent's TIN, via email, within five (5) days of Respondent's issuance and receipt of the TIN. G. EFFECT OF CONSENT AGREEMENT AND FINAL ORDER 65. In accordance with 40 C.F.R. 22.18(c), completion of the terms of this CAFO resolves only Respondent's liability for federal civil penalties for the violations and facts specifically alleged above. 66. If Respondent fails to timely and satisfactorily complete every condition stated in Paragraphs 46-55 of this CAFO, then Complainant may compel Respondent to perform the conditions in Paragraphs 46-55, seek civil penalties that accrue from the Effective Date of this CAFO until compliance is achieved, and seek other relief in a civil judicial action pursuant to the Clean Air Act, pursuant to contract law, or both. 67. Penalties paid pursuant to this CAFO shall not be deductible for purposes of federal taxes. 22 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 68. For purposes of the identification requirement in Section 162(f)(2)(A)(ii) of the Internal Revenue Code, 26 U.S.C. 162(f)(2)(A)(ii), and 26 C.F.R. 1.162-21(b)(2), performance of Paragraphs 46-55 is restitution, remediation, or required to come into compliance with the law. 69. This CAFO constitutes the entire agreement and understanding of the parties and supersedes any prior agreements or understandings, whether written or oral, among the parties with respect to the subject matter hereof. 70. The terms, conditions, and compliance requirements of this CAFO may not be modified or amended except upon the written agreement of both parties, and approval of the Regional Judicial Officer. 71. Any violation of the included Final Order may result in a civil judicial action for an injunction or civil penalties of up to $121,275 per day of violation, or both, as provided in Section 113(b)(2) of the Act, 42 U.S.C. 7413(b)(2), as well as criminal sanctions as provided in Section 113(c) of the Act, 42 U.S.C. 7413(c). EPA may use any information submitted under this CAFO in an administrative, civil judicial, or criminal action. 72. Nothing in this CAFO shall relieve Respondent of the duty to comply with all applicable provisions of the Act and other federal, state, or local laws or statutes, nor shall it restrict EPA's authority to seek compliance with any applicable laws or regulations, nor shall it be construed to be a ruling on, or a determination of, any issue related to any federal, state, or local permit. 23 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 73. Nothing herein shall be construed to limit the power of EPA to undertake any action against Respondent or any person in response to conditions that may present an imminent and substantial endangerment to the public health, welfare, or the environment. H. EFFECTIVE DATE 74. Respondent and Complainant agree to the issuance of the included Final Order. Upon filing, EPA will transmit a copy of the filed CAFO to Respondent. This CAFO shall become effective after execution of the Final Order by the Regional Judicial Officer on the date of filing with the Hearing Clerk. 24 December 16, 2024 Digitally signed by CHERYL SEAGER Date: 2024.12.16 16:31:41 -06'00' APPENDIX A Kinetica Deepwater Express Docket No. CAA-06-2024-3311 I. Auditor Qualifications The Auditor shall satisfy the following independence requirements: 1. The Auditor shall be impartial and independent in conducting all third-party audit activities. 2. The Auditor shall receive no compensation or financial benefit from the outcome of the audit, apart from payment for auditing services. 3. The Auditor shall be: a. knowledgeable about all regulatory requirements relevant to air emissions compliance, all applicable and generally accepted good engineering practices, and technical elements related to this Facility (e.g. NAICS: 424710, Petroleum Bulk Stations and Terminals.) b. trained or certified in proper auditing techniques. 4. If the Auditor has performed work for Respondent within the last two (2) years as of the effective date of the contract or agreement between Respondent and the Auditor (the phrase "performed work" shall not include being an auditor in an independent thirdparty audit that meets the requirements of independence described in this CAFO), the Auditor may not perform elements of the Independent Audit on the same equipment or processes. 5. Respondent may not hire, as either employees or contractors, the Auditor or audit team members for a period of two (2) years following the submission of the final audit report from the Auditor to Respondent (the phrase "hire" shall not include being an auditor in an independent third-party audit that meets the requirements of independence described in this CAFO). 6. The Auditor and audit team members shall each sign and date a conflict-of-interest statement verifying that they are eligible to perform the audit under the terms of this CAFO. As soon as possible, but no later than thirty (30) days after the Effective Date of this CAFO, the signed and dated statement shall be emailed to: James Leathers U.S. EPA Region 6 leathers.james@epa.gov Kinetica Deepwater Express Docket No. CAA-06-2024-3311 7. Retired employees who otherwise satisfy the requirements of independence may qualify as independent if their sole continuing financial attachment to Respondent are employer-financed or managed retirement and/or health plans. II. Permitting and Operations Review The permitting and operations reviewshall include, at a minimum, the following: 1. For the tanks, closed-vent systems, control devices, and truck loading operations at the Facility, review current permit representations (i.e., applications), current equipment inventories, current reported production and emissions data (for all current operating scenarios to determine consistency with permit limits and representations contained in permit applications), and all maintenance and operating logs and repair/replacement work orders generated within the twelve (12) months preceding the Effective Date (including those available from past owners, if any), in order to evaluate and ascertain current or recurring non-compliance issues associated with equipment and process controls at the Facility. 2. Review current permit representations for the tanks at the Facility and evaluate if the tanks are properly permitted. III. Site Inspection and Evaluation The site inspection shall consist, at a minimum, of the following at the Facility: 1. For all tanks: a. Inspect the tanks and associated hatches, valves, gaskets, regulators, seals, closure mechanisms, and pressure relief devices. b. Evaluate whether the materials used to create a vapor seal are compatible with the gas compositions they will come in contact with and whether they will deteriorate at unexpected rates. c. Evaluate whether emergency pressure relief devices are set at the proper pressure set points to operate in accordance with applicable design requirements and current operating scenarios. d. Confirm that every thief hatch is either welded to the storage tank or bolt-mounted with a suitable gasket to the storage tank, in accordance with good engineering practices and applicable manufacturer specifications. A-2 2. For all control devices: Kinetica Deepwater Express Docket No. CAA-06-2024-3311 a. Evaluate whether flares are operating with a continuous pilot flame and that flame arrestors are properly installed. b. Evaluate whether control devices are operated and maintained in conformance with their design and specifications, including recommendations and specifications provided by the device manufacturers, and in a manner consistent with good air pollution control practices for minimizing emissions. c. Evaluate whether reconfiguration of flare tips and installation of thermocouples with Supervisory Control and Data Acquisition capability, auto ignitors with pilots, air assist packages, and pressure gauges for flame arrestors would be appropriate or necessary to meet regulatory requirements and/or to assure compliance with permit terms and conditions. 3. Identify and inspect liquid leaks and staining at permitted equipment (i.e., tanks, closedvent systems, control devices, and truck loading operations). 4. Evaluate whether equipment inventories and process operational descriptions for the tanks, engines, generators, closed-vent systems, control devices, and truck loading operations are current and accurate, such that they are consistent with representations made in applicable permit applications. 5. Evaluate whether there are unauthorized emissions during normal operations by conducting an optical gas imaging survey to detect and correct any gas leaks or fugitive emissions from tanks, engines, generators, closed-vent systems, control devices, and truck loading operations. IV. Operation and Maintenance Procedures For the Facility, review operation and maintenance procedures for inspecting tanks, closed-vent systems, control devices, and truck loading operations to ensure that unauthorized emissions are timely identified and addressed to minimize emissions from such equipment. The operation and maintenance procedures, at a minimum, shall include written Standard Operating Procedures ("SOPs") for the following: 1. Inspection. Conducting inspections of tanks, closed-vent systems, control devices, and loading equipment at the Facility. 2. Preventative Maintenance. SOPs shall include maintenance, inspection, and replacement schedules for equipment related to tanks, closed vent systems, control devices, and loading equipment that are subject to wear and tear. A-3 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 3. Quality Control and Training. SOPs shall establish a quality control program that ensures the quality and performance of facility maintenance activities; and appropriate and regular training for personnel implementing the operation and maintenance procedures. The SOP shall include a procedure by which Respondent evaluates compliance with operation and maintenance procedures on a regular basis. 4. Recordkeeping and Reporting. SOPs shall establish and implement requirements for documenting compliance with regulatory and permitting requirements, including recordkeeping of the date of inspection/maintenance activities, the performance of any corrective actions, and all training conducted. 5. Documentation Protocol. SOPs shall establish document generation and retention protocols, personnel roles and responsibilities, safety protocols, and work order systems to ensure problems are timely identified and addressed. V. Audit Report The Audit Report shall, at a minimum, comply with the following: 1. Explain the audit scope, provide a summary of the audit process, and explain any obstacles encountered. 2. State the period of time covered by the Audit and list the date(s) any on-site portion of the audit was conducted. 3. Identify the audit team members, including names, titles, and summaries of qualifications. 4. Identify any representatives of EPA or Respondent who observed any portion of the Audit. 5. Identify the recipients of the Audit Report. 6. Include a written explanation of the instances of regulatory or permitting noncompliance noted during the Audit, and the areas of concern that, if left unattended could give rise to regulatory or permitting non-compliance identified during the course of the Audit, regardless of whether, in the Auditor's judgement, they require immediate corrective action or merit further review or evaluation for potential environmental or regulatory impacts ("Audit Findings"). 7. Contain an explanation of the basis for each of the Audit Findings. 8. Include any necessary corrective actions for Respondent to take in order to address the Audit Findings and to improve its programs, procedures, or policies so that they are A-4 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 consistent with applicable regulatory and prevailing industry standards and are materially consistent with the key EMS Concepts and Key Elements of an Environmental Management System identified in EPA guidance entitled Environmental Management Systems; An implementation Guide for Small and Medium - Sized organizations. 9. Include a summary of Respondent's comments on, and identify any adjustments made by the Auditor to, any draft of the Audit Report provided by the Auditor to Respondent for review and comment. 10. Include a finding regarding whether Respondent's operation and maintenance procedures meet the requirements of the operation and maintenance procedures described in Section IV of this Appendix A, and any recommended updates. 11. Identify any Audit Findings corrected during the Audit, including a description of the corrective measures and when they were implemented. 12. Include the following certification, signed, and dated by the Auditor or supervising manager for the Audit: I certify that this compliance audit report was prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information upon which the audit is based. I further certify that the audit was conducted, and this report was prepared, pursuant to all applicable auditing, competency, independence, impartiality, and conflict of interest standards and protocols. Based on my personal knowledge and experience, the inquiry of personnel involved in the audit, the information submitted herein is true, accurate, and complete. I am aware that there are significant penalties for making false material statements, representations, or certifications, including the possibility of fines and imprisonment for knowing violations. VI. Letter Report Respondent shall provide a Letter Report to EPA containing the following: 1. A copy of the final Audit Report. 2. An appropriate response to each of the Audit Findings. 3. A description of the following steps that Respondent has taken or will take in response to the Audit Findings: a. A schedule for promptly addressing deficiencies. A-5 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 b. A list of new equipment and piping to be procured (e.g., control devices, combustors, vapor recovery system, tank hatches, pressure relief valves, piping, and gaskets). c. The repair, replacement, upgrading, and/or installation of equipment (e.g., vapor recovery system, control devices, combustors, tank pressure relief valves, tank hatches and gaskets, and compressors). d. The replacement of any piping, valves, flame arrestors, or other equipment that is inadequately sized for the flow of condensate and volume of emissions. 4. Confirmation that there are no unauthorized emissions from any necessary repair, replacement, upgrade, and/or installation of equipment (e.g., conduct optical gas imaging survey to detect and correct any gas leaks or fugitive emissions). 5. A summary of any updates made, in accordance with Section IV of Appendix A, to Respondent's operations and maintenance procedures. 6. A statement of whether Respondent is applying for, or will apply for, new or modified permits, and a statement of whether Respondent is repairing or replacing any equipment in accordance with the Audit Findings. 7. A certification, signed and dated by a senior corporate officer or other officer in an equivalent position of Respondent (who may be Respondent's Director of Environmental Safety & Health), stating: I certify under penalty of law that the attached compliance audit report was received, reviewed, and responded to under my direction or supervision by qualified personnel. I further certify that appropriate responses to the findings have been identified and deficiencies were corrected, or are being corrected, as documented herein. Based on my personal knowledge and experience, the inquiry of personnel involved in the audit, the information submitted herein is true, accurate, and complete. I am aware that there are significant penalties for making false material statements, representations, or certifications, including the possibility of fines and imprisonment for knowing violations. A-6 Kinetica Deepwater Express Docket No. CAA-06-2024-3311 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 6 DALLAS, TEXAS FILED 17 DEC 24 PM 02:48 REGIONAL HEARING CLERK EPA REGION 6 IN THE MATTER OF: ( ( Kinetica Deepwater Express LLC ( Patterson, Louisiana ( ( ( DOCKET NO. 06-2024-3311 ( ( ( RESPONDENT ( ( ______________________________________________________________________ FINAL ORDER Pursuant to section 113(d) of the Clean Air Act, 42 U.S.C. 7413(d), and the Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties, 40 C.F.R. Part 22, the attached Consent Agreement resolving this matter is incorporated by reference into this Final Order and is hereby ratified. Kinetica Deepwater Express LLC is ORDERED to comply with all terms of the Consent Agreement. In accordance with 40 C.F.R. 22.31(b), this Final Order shall become effective upon filing with the Regional Hearing Clerk. Dated __________________ Rucki, Digitally signed by Rucki, Thomas T__h_o_m__a_s______1_5:4_6_:42_-_05_'0_0'_____ Date: 2024.12.17 Thomas Rucki Regional Judicial Officer U.S. EPA, Region 6 CERTIFICATE OF SERVICE Kinetica Deepwater Express Docket No. CAA-06-2024-3311 I certify that a true and correct copy of the foregoing Consent Agreement and Final Order was filed with the Regional Hearing Clerk, U.S. EPA - Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270-2102, and that I sent a true and correct copy on this day in the following manner to the email addresses: Copy via Email to Complainant: tripathi.arati@epa.gov Copy via Email to Respondent: Bill Prentice, Vice President and General Counsel Kinetica Deepwater Express LLC 309 Torch Lane, Patterson, Louisiana, 70392 bill.prentice@kineticallc.com Vaughn, Digitally signed by Vaughn, Lorena _L_o_r_e_n_a________14_:4_8:0_7_-0_6'_00_' _____ Date: 2024.12.17 Signed Lorena Vaughn Regional Hearing Clerk Office of Regional Counsel U.S. EPA, Region 6 A-8