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Bath Petroleum Storage, Inc. and EIL Petroleum, Inc. - Decision, August 28, 1998

Decision, August 28, 1998

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1010

In the Matter

- of the -

Proposed permit modification of
the State Pollutant Discharge Elimination System ("SPDES") Permit No.00004278 issued to

BATH PETROLEUM STORAGE, INC., a subsidiary of EIL PETROLEUM, INC.

DEC Project No. 8-4624-00008/00001

DECISION

OF THE DEPUTY COMMISSIONER

August 28, 1998

DECISION OF THE DEPUTY COMMISSIONER

This is a permit modification case initiated by Department Staff. Staff seeks to modify the terms of a State Pollutant Elimination System ("SPDES") permit issued to Bath Petroleum Storage, Inc ("BPSI"). The permit authorizes brine to be discharged to the Cohocton River in the Village of Bath, Steuben County, New York. BPSI objects to two aspects Staff's proposed modifications. These are: (1) reclassification of the facility from "non-significant industrial discharger" to "significant minor industrial discharger" and, (2) adoption of a mass balance formula to provide improved assurance that water quality standards are maintained in the Cohocton River downstream of BPSI's discharge point. A third permit change, relating to sampling location, has been mutually agreed upon by the parties and will be incorporated in the modified permit.

Deputy Commissioner Donohue's March 26, 1997 Interim Decision in this case allowed the adjudicatory hearing to proceed over Staff's objection because the burden was on Staff to justify its proposed permit modifications. (See 6 NYCRR §624.14). Authority to decide this case has been delegated to Deputy Commissioner Erin Crotty, because Mr. Donohue is now an official in the Executive Department. A full hearing has now been completed and ALJ Goldberger's attached detailed hearing report shows that Staff's proposed permit modifications are fully justified and should be implemented forthwith. The facts fully justify requiring BPSI to increase its reporting activity under the SPDES permit, which is what the reclassification accomplishes.

Likewise, the mass balance formula modification is appropriate under the facts. It appears that the applicable water quality criteria for total dissolved solids and chlorides have been exceeded on at least a few occasions as a result of BPSI's activities, and the proposed mass balance approach will aid in avoiding recurrences of water quality standards violations.

Accordingly, ALJ Goldberger's attached report is adopted, and made a part hereof, subject to the above comments. Staff is directed to modify BPSI's SPDES permit in accordance with this Decision and the record in this proceeding.

For the New York State Department
of Environmental Conservation

/s/
By: Erin Crotty
Deputy Commissioner

Dated: Albany, New York
August 28, 1998

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL ONSERVATION

50 Wolf Road
Albany, New York 12233-1550

In the Matter

- of the -

Proposed permit modification of the State Pollutant Discharge Elimination System (SPDES)
Permit No. NY-0004278 issued to BATH PETROLEUM STORAGE, INC., a subsidiary of EIL PETROLEUM, INC.

DEC Project No. 8-4624-00008

HEARING REPORT

-by-

/s/
Helene G. Goldberger
Administrative Law Judge

TABLE OF CONTENTS

Proceedings

Background

Adjudicatory Hearing

Summary Positions of the Parties

Change in Industrial Classification

Mass Balance Formula

Sampling Location

Findings of Fact

Background

BPSI's Facility Modifications

Expansion of Storage Capacity

Groundwater Withdrawal

Staff's Proposed SPDES Modification

Change in Sampling Location

Mass Balance Formula

Potential Impacts on the Cohocton River from BPSI's Discharge

Miscellaneous Facts Related to Brine Disposal

Discussion

The Department's Jurisdiction to Modify BPSI's Permit

Classification

Mass Balance Formula

Conclusion

Appendix A - Staff's proposed permit modification contained in letter of 11/5/96.

Appendix B - BPSI's current SPDES permit.

PROCEEDINGS

Background

Bath Petroleum Storage, Inc. (BPSI), a subsidiary of EIL Petroleum, Inc., operates a liquid petroleum gas (LPG) storage facility on Eagle Valley Road in Bath, New York (Steuben Co.). At this facility, BPSI stores LPG in underground salt caverns. When needed, the LPG is pumped out of the caverns by pumping in brine. Conversely, as additional product is stored in the caverns, the brine is pumped out and stored in one of the two designated surface ponds. Due to its need to discharge excess brine from the ponds into the Cohocton River, BPSI requires a State Pollutant Discharge Elimination System (SPDES) permit. The original NPDES permit was issued to Mobil Oil Corp. for this facility in 1975. DEC transferred the permit to BPSI in 1983. In June 1984, BPSI submitted a renewal application to DEC with a full industrial chemical survey. In 1993, the company submitted another renewal application and DEC issued a renewal on February 4, 1994. The current SPDES permit will expire on September 12, 1999.

In November 1996, Department staff initiated a permit modification concerning BPSI's SPDES permit based upon its view that BPSI had changed operations at the facility. This proposed modification entails the reclassification of the facility from a non-significant industrial discharger to a significant minor industrial discharger, requiring the submission of monthly discharge monitoring reports (DMR's). In addition, staff proposes that BPSI adopt the use of a mass balance formula to determine when and how much to discharge based upon the river's flow and the background levels of chlorides and total dissolved solids (TDS) in the river. Staff's stated purpose for these modifications is to ensure that BPSI meets the parameters set forth in its current permit and that its discharge conforms with water quality standards applicable to the Cohocton River. Based upon its objections to these two modifications, pursuant to § 621.13(d) of Title 6 of the New York Compilation of Codes, Rules and Regulations (6 NYCRR), BPSI requested a hearing, and a legislative hearing and issues conference were held in Bath on February 13, 1997.

The legislative hearing and issues conference were noticed in the Environmental Notice Bulletin of January 8, 1997 and the Steuben-Courier Advocate of January 5, 1997. The participants at the hearing were almost evenly split on their positions on DEC's proposed permit modifications. Those opposed to the conditions stated that the company had a good record of environmental compliance. Some speakers, including representatives of the company, remarked that the proposed modifications were precipitated by the actions of Market Hub Partners, a competitor. Those in favor of the permit conditions spoke to the facility's effects on the ecology of the Cohocton River including negative effects of chlorides on plants and wildlife. In addition to staff and BPSI, the Coalition for Resources and Environment of the Southern Tier, Inc. (CREST) participated in the issues conference. ALJ Goldberger issued a ruling on February 25, 1997 in which she concluded that a hearing should be held on the two proposed conditions and party status should be granted to CREST. This ruling was confirmed by Deputy Commissioner Gavin Donohue in his Interim Decision of March 26, 1997.

While the hearing was scheduled for early May 1997, it was postponed several times as staff and BPSI entered into a period of negotiations that ended without an agreement in August 1997. During September, staff substituted its counsel with Region 8 Assistant Regional Attorney Lisa Perla Schwartz and in October, BPSI retained an attorney, Ronald H. Sinzheimer, to represent the company in the upcoming hearings . Also in October 1997, staff determined that it was appropriate to modify the permit further by changing the discharge sampling location to better reflect the path of BPSI's discharge in the Cohocton River. The proposed sampling location is the center of the Cohocton River from the upstream side of the Savona Bridge at Route 226 in the Town of Bath. BPSI objected to the change in sampling location and accordingly, the ALJ determined that this issue would also be heard at the hearing. In addition, the ALJ allowed BPSI a limited period of discovery to address matters solely related to the change in sampling location.(1) The change of counsel and the additional proposed modification also led to an adjournment of the hearing to January 13-15, 1998.

Prior to the hearing, BPSI served a subpoena on Stewart N. Thompson of Acres International (CREST's consultant) requiring his attendance at the January 13 hearing to give testimony and to produce company documents. BPSI sought information related to Acres International's relationship to Market Hub Partners, a competitor of BPSI and CREST. CREST and Market Hub Partners made motions to quash the subpoena and the ALJ granted those motions in a ruling dated January 9, 1998.

On or about January 6, 1998, CREST moved to preclude the admission into evidence of BPSI's expert report that had not yet been delivered to the parties. On January 9, 1998, BPSI moved to adjourn the hearing based primarily upon its objections to staff's determination to withhold certain documents in response to BPSI's FOIL request. The ALJ denied both these motions by letters dated January 7 and 9, respectively, and the hearing proceeded on January 13 at DEC's Region 8 sub-office in Bath. The hearing continued through January 15 and reconvened on March 12-13 and April 6, 1998 in DEC's Avon office. Prior to the resumption of the hearing in March, BPSI made another motion to dismiss the proceeding and/or compel production of documents (the materials that had been withheld by staff in response to BPSI's FOIL requests). The ALJ denied this motion in a letter ruling dated March 11, 1998.

Adjudicatory Hearing

Representing the staff at the hearing was Assistant Regional Attorney Lisa Perla Schwartz. Representing BPSI were Ronald Sinzheimer, Esq. of Albany, W. Michael Holm, Esq. of Redmon, Boykin & Braswell, L.L.P. of Alexandria, Virginia, and Christopher McGrath of New York Capitol Consultants, Inc. of Albany. Alan Knauf, Esq. of Knauf & Craig, LLP of Rochester, New York represented CREST.

Pursuant to 6 NYCRR § 624.9(b)(2), staff has the burden of proof to show that the modifications it proposes are supported by a preponderance of the evidence. As per the issues ruling, the staff had to show that the re-classification is warranted based upon the change in company processes. As for the mass balance formula, the issues are whether the company's current activities require the application of this formula; the applicability of the formula to the facility taking into account the nature of the discharge and the conditions of the receiving body of water; as well as the burdens, if any, on the company based upon the application of this formula. With respect to the sampling location, the staff had to show that the proposed location was required for more accurate results.

The staff presented Thomas Pearson, the Region 8 water engineer, as its only witness in its direct case. In its rebuttal case, the staff re-called Mr. Pearson and also called Robert Bode, a research scientist with DEC's Division of Water. CREST presented two witnesses in its direct and rebuttal presentations, Cameron Lange, biologist and Rex Tolman, water resources engineer, both of Acres International.(2) BPSI's witnesses were Edward Michalenko, an engineer with HydroQual, Inc., Robert V. H. Weinberg, president of BPSI, and Randall Nemecek, of the DEC Region 8 office of Environmental Permits.

At the beginning of the continuation of the hearing on March 12, the ALJ was alerted by her office that the staff intended to make a motion to adjourn the hearing due to the commencement of a lawsuit in the U.S. District Court in the Northern District of New York by BPSI against the Department and certain DEC employees related to the agency's oversight of the facility. Staff did not demonstrate that the continuation of the hearing would prejudice the Department. Because all the parties would have been prejudiced if the proceeding was adjourned at that point because of the presence of attorneys and witnesses ready for hearing, the ALJ denied this motion. Although staff made an immediate appeal to Deputy Commissioner Donohue, this appeal was denied as was a subsequent appeal to reconsider.(3)

During the hearing, the CREST representative and the ALJ queried Mr. Weinberg with respect to the amounts of volume of brine that could be stored in the brine storage ponds relative to the amount of brine that was stored in the caverns and that was produced as a result of the expansion. Mr. Weinberg objected to responding to these questions on the ground that the information constituted trade secrets. The ALJ ruled that the hearing would move forward onto other topics and that if CREST determined that the information was important, it could make an appropriate motion. By notice of motion dated March 26, 1998, CREST sought an order compelling Mr. Weinberg to respond to these questions. The ALJ denied CREST's motion in a ruling dated April 3, finding that while the information did not constitute a trade secret, it appeared to be available in exhibits that were already part of the hearing record.

The staff and CREST submitted closing briefs on May 29 and June 2, 1998 respectively. BPSI submitted its responsive brief on July 13, 1998 and reply briefs were submitted by staff and CREST on August 3, 1998.(4) The record closed on August 3, 1998 with the submission of the reply briefs.

SUMMARY POSITIONS OF THE PARTIES

Change in Industrial Classification

The staff claims that BPSI's permit was premised on its intermittent discharge of excess brine water that was used to displace product - LPG. The staff states that BPSI has changed its operation so that fresh water is being used to solution additional storage caverns. Once this water is used in this manner it becomes brine water (salt-saturated) that staff terms "cavern development water." Such brine water is typically high in chlorides. Staff determined that the company had begun to discharge this cavern development water on a regular basis to the Cohocton River. Due to these changes, the staff found that a change in status was warranted from non-significant industrial discharger to significant minor industrial discharger. Due to the volume of SPDES permits issued and monitored by the Department, the staff maintains that the 01 designation is used in order to prioritize attention to facilities that require greater scrutiny based on the environmental consequences of their discharges. Thus, under the 01 classification, BPSI would be required to submit monthly discharge monitoring reports that can be reviewed by staff to determine whether its operations result in exceedances of the permit parameters or harm to the quality of the Cohocton River.

BPSI claims that the company meets all current permit requirements and has not changed its operations or the nature of the discharge and thus, there is no reason to change the status of the facility.(5) In addition, BPSI maintains that since the Department staff should have been aware of BPSI's expansion as early as 1991 there is no basis for the change in status.

The current SPDES permit also requires monthly discharge reports. However, around 1982, due to the volume of reports received by the Department, it waived the submission requirement for the non-significant industrial discharger category in order to prioritize reviews based upon potential effects to water bodies. The company believes that there is no demonstration that its operations pose a significant burden to the environment and a change in industrial classification will lead to unnecessary scrutiny by Department staff. In addition, BPSI does not want to be stigmatized by a change in classification as it considers itself a "good neighbor."

CREST supported the Department's position on this point. CREST's water engineer calculated that BPSI was routinely discharging brine in excess of the current SPDES permit limitations due to change in operations that resulted in a much greater volume of brine. CREST maintained that because this amount of brine could not be stored in the existing storage pits, BPSI discharged it into the Cohocton River. CREST argued that this volume of brine was damaging to the environment and it was necessary for DEC to change the classification of the facility in order to obtain the monthly discharge monitoring reports and to provide greater oversight of the operation.

Mass Balance Formula

Staff determined that because BPSI had changed its operations resulting in a greater amount of discharge, it was necessary to review more closely the data that provided information on the effects of the discharge on the receiving river. In particular, the staff decided that prior to discharge, BPSI's application of the mass balance formula would provide a superior method of determining the nature of the effects of the discharge. According to staff, this would ensure that the facility remains in compliance with its permit and applicable water quality standards. Staff described the mass balance formula as a generally accepted scientific formula that is integral to the SPDES program. The formula is used to determine how much of a given pollutant can be discharged into a body of water. The formula is based upon the amount and concentration of a particular pollutant in the receiving water upstream of the discharge, the volume of flow of the receiving water and the concentration of the pollutant and flow discharged from the facility. A mathematical equation using these indicators provides a prediction of the combined flow and pollutant concentration. As described by staff, this analysis allows a facility to take into account the current assimilative capacity of the water prior to discharge. For example, if the Campbell gauge indicates that the river's flow is high, then a higher quantity of brine could be discharged.(6) And, if the flow was low, then the facility would have to tailor the discharge accordingly to ensure that water quality standards were not exceeded. DEC would still require BPSI to take grab samples of the discharge downstream; however, the mass balance formula would enable the company to better predict the discharge effects prior to discharge.

For certain specified periods, staff applied the mass balance formula to the data supplied by BPSI in its DMR's using the river flow information from USGS records available from the gauging station, and the upstream concentration levels of 275 milligrans per liter (mg/l) for TDS and 30 mg/l for chlorides. Based on these calculations, staff determined that the levels of TDS and chlorides should have been higher than what was reported by BPSI in the DMR's for these periods.

BPSI maintains that whether brine is used for displacing product or is brine that is used for solutioning caverns, it is the same byproduct. As mentioned above, BPSI stresses that the expansion of its facility was sanctioned by the Department and has not resulted in any change in its operations or exceedances of the permit. And, to the extent that staff was unaware of the expansion's consequences, this is the fault of the Department and not BPSI. The company argues that because it has not been shown to have violated its permit, it should not be subjected to any change in the sampling methodology. It considers the application of the mass balance formula to be burdensome and unnecessary. The company maintains that as long as it meets the permit limitations there is no basis to modify the permit pursuant to 6 NYCRR § 621.14. BPSI contends that this formula will not be an accurate measure of the facility's activities because the sampling needed would result in a lag time due to laboratory work. This lag time would mean that the mass balance formula, as applied, would not produce a correct picture of the discharge effects. And, if BPSI relied on data that was not current to rate its discharge it might be led to exceed the permit limitations.

BPSI also argues that the formula proposed by staff is not a true mass balance formula because staff will maintain the flow limit in the permit at 440,000 gallons per day (gpd). Thus, if the flow in the river was determined to be at a stage that would allow a greater discharge without exceeding other permit limitations, the current permit would not allow it. BPSI has stated its willingness to use a formula that was agreed to between staff and BPSI during the pendency of these proceedings. This method permits the company and DEC to agree to certain set background levels of TDS and chlorides. In addition, the company uses a device known as a salinometer to determine the level of chlorides and TDS in its discharge. Based upon calculations made using the determined background levels, the flows from the Campbell gauge, and the data received from the salinometer, the company determines when and how much to discharge.

CREST is vigorous in its support of the application of the mass balance formula, arguing that it is fundamental to all water quality analysis. CREST's position is that the failure to use this formula has resulted in an inaccurate portrayal of the company's effects on the river. And, that in fact, based upon the USGS gauge data and the reported BPSI discharge data, CREST has calculated that BPSI has had a great number of exceedances of the applicable limits for TDS and chlorides. CREST finds that this discharge has had a negative effect on the flora and fauna of the Cohocton.

Sampling Location

As noted above, staff applied the mass balance formula to data reflecting river flow and background levels of the applicable parameters and BPSI's discharge flow and concentration from DMR's submitted to staff by BPSI for certain periods. The results indicated to staff that there was a discrepancy between the reported sampling results and what the calculations revealed. The staff determined that either the data was wrong or the sampling location was improper. Staff described changes in the conformation of the river and in BPSI's sampling location from the position that was used previously at the facility. Through the use of a dye test in the spring of 1997 at BPSI, DEC staff determined that the current sampling point is not an appropriate location for accurate sampling. Staff reported that the dye test showed that the plume from the discharge point did not cover the current sampling location and thus, samples from this site would not portray the discharge's effects on the river. Therefore, staff determined that the sampling location had to be moved to a more central portion of the river, rather than near the banks. In order to utilize a location that is more representative of the discharge's effects and maintain a safe and accessible sampling location, staff decided that the Savona Bridge was the appropriate location. The Savona Bridge is located approximately 2 miles downstream from the facility and the current sampling point.

CREST's expert also argued that the results of BPSI's sampling as reflected in the DMR's indicated that either the laboratory work or the sampling location was improper. CREST maintained that the sampling point is out of the plume of the discharge and was therefore not a location that would reflect river conditions. CREST represented that the proposed new sampling location, the Savona Bridge, would probably be a well-mixed location under most conditions.

Initially, BPSI disputed that there was a need to change the sampling location because it maintains there has been no exceedances of its permit limitations and therefore, there is no basis to modify this aspect of the permit. However, during his testimony, BPSI President Weinberg stated that the new sampling location at the Savona Bridge is satisfactory and BPSI agreed to stipulate that this issue was no longer in contest. In its closing brief BPSI argues that this change addresses satisfactorily all other concerns of the Department because accurate sampling will occur.

FINDINGS OF FACT

Background

  1. Bath Petroleum Storage Inc., a subsidiary of EIL Petroleum, Inc., maintains a facility for the underground storage of liquid petroleum gas on the south bank of the Cohocton River on Eagle Valley Road in Bath, Steuben County, New York.
  2. The stretch of the Cohocton River where BPSI is located is designated by the Department as a Class C river. The best usage of Class C waters is fishing. This designation also means that the water should be suitable for fish propagation and survival and for primary and secondary contact recreation. 6 NYCRR § 701.8. Downstream of BPSI, there is a Class A stream -- the Chemung River of which the Cohocton is a tributary -- this waterway serves as the intake for the Elmira water supply. Class A is suitable for drinking water supplies subject to treatment for that purpose. 6 NYCRR § 701.6. In addition, the facility is located over a fresh water aquifer which is used as a supply for drinking water.
  3. In or around 1975, the Department issued a National Pollutant Discharge Elimination System (NPDES) permit to Mobil to discharge brine into the Cohocton River. The facility was constructed in the 1950's at which time six caverns were formed in an underground salt layer by washing the salt out with fresh water. As part of the requirements for the issuance of the NPDES permit, Mobil was required to produce and submit to the Department an engineering report that describes the operations at the facility, including the nature and effects of the discharge.
  4. In the report, Mobil described the company's processes including the use of brine to maintain pressure in the caverns to keep the gas liquefied. As described, when the company wished to remove product, brine was pumped into the caverns to force out the product. The report explained that the major source of wastewater was the excess brine from the brine pits caused by excess precipitation entering into the brine storage ponds of 0.9 millions gallons per year. Fresh water used to flush piping and well tubing each day created approximately another 1.5 million gallons annually of brine wastewater. A third source was identified by Mobil as fresh water used to flush a well when Mobil took it out of service creating about .61 millions gallons per year of wastewater. Mobil estimated that there was a possible annual discharge of 6.5 million gallons per year. Because the storage ponds have a capacity of 29.5 million gallons, Mobil represented that much of the brine would be recycled.
  5. In 1982, BPSI took over the storage facility from Mobil Corporation and in April 1983, the Department transferred the SPDES permit from Mobil to BPSI.
  6. BPSI continued to pump LPG into the underground caverns for storage. When this occurs, brine is pumped out into one of two brine storage ponds or pits.(7) In order to remove LPG, BPSI must pump brine into the cavern. After the initial creation of the caverns until 1992, the major source of brine wastewater (brine that was not needed for LPG purposes) was excess precipitation on the brine ponds. In addition, fresh water used to flush the brine piping and wells also produced brine wastewater. The discharge was not continuous and from 1975 - 1983 the facility averaged 4,417 gallons per day over a 9 year period.
  7. The NPDES permit contained limitations for the facility's discharge of certain pollutants including total dissolved solids and chlorides. The in-stream limits at the point of mixing were 500 mg/l of TDS and 250 mg/l of chlorides. The point of mixing was defined in the permit as 200 feet below the discharge. Since the transfer of the permit from Mobil to BPSI in 1983 and the renewals of the permit by the Department in 1984 and 1994, these discharge limitations have not been altered. And the nature of the material that is discharged by BPSI -- brine saturated mainly with sodium chloride -- has also not changed.
  8. BPSI's application to renew its permit in 1984 includes a description of its discharge that indicates the facility discharged, on average over nine years, 4,417 gallons per day. As part of this application, BPSI provided data that showed in certain years between 1975 and 1983, there was no discharge and in 1979, the year of greatest discharge, the company discharged a total volume of 4,360,600 gallons over 34 days.
  9. The SPDES permit in effect requires BPSI to submit discharge monitoring reports to DEC. In the 1980's, in order to prioritize its review of discharge effects, the Department decided to reduce the number of reports it received and reviewed and thereby waived the submission of DMR's for non-significant industrial dischargers as that term is defined in the Division of Water's Technical and Operational Guidance Series (TOGS) 1.2.2.

    BPSI's Facility Modifications

    Expansion of Storage Capacity

  10. In 1991, BPSI applied to the Department's Division of Mineral Resources for a permit to drill Well No. 7 in order to expand the storage capacity of the facility. Because BPSI expressed its intention to drill six additional wells at the time of this application, staff requested that BPSI apply for a modification to its existing permit which would include the entire expansion. In addition to the expansion permit application process, BPSI had to apply for a permit for authorization to drill each individual well. Each cavern would require the drilling of one well. At this time, BPSI personnel contacted Engineer Pearson of Region 8's water division regarding the possibility of the company constructing an additional brine storage pond.
  11. The creation of each cavern entails drilling a pathway - a well bore - through rock and overburden to the salt layer, the installation of a metal pipe to isolate the groundwater, and the injection of fresh water into the piping to solution the salt and bring it to the surface.
  12. In this application, as in the prior operation of the facility, BPSI explained that each well would be initially full of brine and as LPG was injected into the well, the brine would be forced up and directed to the brine storage pond. When LPG was removed from the well, the process would be reversed and the brine would be pumped back down into the well.
  13. As part of the application materials submitted on or about January 31, 1992, BPSI indicated on the environmental assessment form that the surface discharge resulting from the expansion would not exceed the limitations in the existing SPDES permit.
  14. In April 1992, the Department staff determined that BPSI's proposed expansion would not have a significant impact on the environment and issued a negative declaration dated April 15, 1992 pursuant to 6 NYCRR § 617.7. The negative declaration indicates that water used to solution the caverns will be stored in a pond until needed to force LPG to the surface.
  15. By letter dated April 27, 1992, Sandra F. Brennan, then Director of the Bureau of Oil and Gas Regulation of DEC's Division of Mineral Resources, issued BPSI its permit to increase the storage capacity of the existing liquefied petroleum gas storage facility.
  16. In 1983, BPSI had six operating wells. Since 1992, BPSI has drilled 7 additional wells. Associated with these wells, 2 caverns have been completed (#s7, 13), stratigraphic test well #8 is temporarily shut-in (used to analyze underground layers), #9 is partially developed, and four wells (#s10-12) await solutioning although some fresh water has been circulated in them to keep them serviceable.(8) Now, BPSI has eight caverns in which to store LPG. Although BPSI has expanded the number of caverns, it does not intend to expand the number of brine storage ponds. When there is insufficient brine available to displace product, BPSI intents to use fresh water for this purpose.
  17. For the years 1983-1996, BPSI reported to DEC in its annual underground LPG storage reports the following for the amount of storage capacity at its facility:
    Year Amount
    1983-1984 33,900 gallons
    1985-1987 34,846 gallons
    1988 34,915 gallons
    1989 35,229 gallons
    1990 37,208 gallons
    1991 38,005 gallons
    1992 38,108 gallons
    1993 40,773 gallons
    1994 41,192 gallons
    1995 43,221 gallons
    1996 46,408 gallons

    Groundwater Withdrawal

  18. In April 1996, BPSI submitted an application to the Susquehanna River Basin Commission (SRBC) to withdraw up to 2.0 million gallons per day of groundwater to be used to solution underground salt storage caverns.
  19. Because BPSI's SPDES permit limits the company to 440,000 gallons per day of wastewater brine to be discharged into the Cohocton, the company proposed to dispose of brine wastewater in excess of this amount through underground injection. This injected wastewater would be unavailable for future use and therefore, this activity is considered a consumptive use by the SRBC.
  20. Subject to certain conditions, the SRBC granted BPSI a permit to withdraw the 2.0 mgd and to consumptively use 1.568 mgd of groundwater.

    Staff's Proposed SPDES Modification

  21. As a result of the SRBC's notification to DEC of BPSI's application and information provided by a competitor of BPSI, Market Hub Partners, as well as CNG in a separate proceeding involving the development of a gas storage facility by BPSI before the Federal Energy Regulatory Commission, BPSI's intentions to solution additional caverns, were brought to the attention of the Region 8 water staff.
  22. Based upon its view that BPSI's intentions of discharging 432,000 gpd of brine into the Cohocton River constituted a substantially different type of discharge than currently permitted, in the spring of 1996, regional water staff requested that BPSI provide it with additional information.
  23. BPSI's plan to deep well inject brine for disposal purposes was also a modification from past practices.
  24. Based upon the company's alteration of its practices, by letter dated November 5, 1996, staff indicated its intention to change the permit classification of the company, to obtain additional information from BPSI regarding its operations, and to require the permittee's use of a formula to determine appropriate discharges. Included with this letter was a modification of BPSI's SPDES permit indicating: (1) the administrative class had been changed from an [04] non-significant to a [01] significant industrial discharger; (2) monthly discharge monitoring reports were to be submitted to DEC and BPSI was to utilize a mass balance analysis to regulate its discharge; and (3) BPSI was to have sample analyses performed in a certified laboratory. The November 5, 1996 letter (Exhibit 1) is annexed to this report as Appendix A.
  25. BPSI objected to the change in administrative class based upon the enhanced scrutiny by DEC staff that the 01 status would bring. BPSI also objected to the use of the mass balance formula. Due to these objections, BPSI requested a hearing and these matters are the subject of the current proceeding.

    Change in Sampling Location

  26. Staff's review of discharge monitoring reports submitted by BPSI to the Department upon request and the application of the mass balance formula to the reported background levels, river flow, amount of discharge, and the concentration of the discharge, resulted in a finding that BPSI's reported results did not appear accurate.
  27. As a result, staff decided that the sampling location may not be appropriate and arranged with BPSI to conduct a dye test at the facility.
  28. Staff performed the dye test on April 28, 1997 by introducing red dye into the discharge line at BPSI. The dye was drawn into the piping at 1:55 p.m. and at 2:05 p.m. it appeared in the river. The dye appeared as a slug and was not diffused. The plume traveled down the center of the river for approximately 20 feet and then veered off to the east. A staff member, Nancy J. Rice, Environmental Engineer I and Matthew Slezak of BPSI stood close to the then current sampling point. The dye did not come in contact with this area and therefore, a sample at this location would not reflect the discharge. Staff then proceeded to the Savona Bridge where the dye was no longer visible.
  29. In May 1983, BPSI alerted the Department staff that the main flow of the Cohocton River had moved eastward and the brine dispersal line that had been installed in September 1975, 40 feet into the channel, was no longer in the main stream. This resulted in insufficient dispersal of the company's effluent.
  30. In a letter dated May 20, 1983, BPSI proposed to extend the line approximately 150 feet and the staff determined, based upon the description in BPSI's letter, that a permit was not required for this work.
  31. The current discharge point is located approximately 144 feet from the west bank of the Cohocton River where BPSI is situated.
  32. The USGS map for the Savona quadrant indicates that the Savona Bridge (the new sampling point) is located approximately 2 miles downstream from BPSI's discharge point.
  33. The company has been sampling from the Savona Bridge over the last period and Mr. Weinberg reported at the hearing that BPSI had no objection to continue to do so.

    Mass Balance Formula

  34. The mass balance formula is an equation that is used to evaluate the effects a discharge will have on a given body of water by factoring in the flow of the receiving waters, the background levels of pollutants, the volume of discharge, and the concentrations of the targeted pollutants in the discharge.
  35. The mathematical equation is as follows:

    The river flow = Q1 and the background concentration of the targeted pollutant = C1.

    The point source discharge flow = Q2 and the point source concentration of the pollutant = C2.

    The combined flow = Q3 = Q1 + Q2 and the combined concentration = C3.

    C3 = Q1C1 + Q2C2

    Q1 + Q2

    Staff's proposed permit modifications annexed to the letter of November 5, 1996 (Appendix A) provide the formulas in attachment B-1. An example of the calculation is annexed to the proposed permit as attachment B-2.

  36. The purpose of the application of the mass balance formula is to provide a tool that allows the discharger and/or regulator to predict the volume of discharge that can be allowed without exceeding the applicable parameters. If the flow of the river is high, the formula will show the discharger how much more effluent may be discharged.
  37. In order to use the formula, the discharger must know the concentrations of pollutants in the effluent, the river flow, and the in-stream levels of the pollutants of concern. In the case of BPSI, the company routinely samples the brine and has the information with respect to the concentrations of TDS and chlorides in its wastewater. The river flow information is available by telephone or on the Internet from the Campbell gauge. This gauge is a monitoring station established by the USGS downstream of BPSI that provides a 5 day picture regarding the volume of river flows on the Cohocton. With respect to making determinations of the upstream or background levels of chlorides and TDS, there are optional methods. The staff's proposed permit does not specify how the background concentrations are to be determined by BPSI.
  38. BPSI may sample upstream to obtain data on the background levels of TDS and chlorides. This method involves a lag time factor due to the period it will require BPSI to obtain lab results and the possibility that conditions in the river may change before the results are available. This method will also allow BPSI to discharge at a greater volume at times because it will more accurately reflect actual conditions of higher flows in the river. BPSI may also establish with the Department, as it is doing now, background levels for these pollutants that provide a sufficient safety factor. The use of this method will mean that BPSI is not always discharging at the maximum levels possible. And, periodically, river conditions may change necessitating a revision to the background limits selected.
  39. BPSI may also use a conductivity meter to determine background levels. This instrument can be used to correlate its reactivity with the levels of TDS and chlorides in the river. This instrument will provide results quickly.

    Potential Impacts on the Cohocton River from BPSI's Discharge

  40. The SPDES permit for BPSI provides that the company may discharge a daily maximum of 440,000 gpd and concentrations of TDS and chlorides in the receiving stream that at the point of mixing do not exceed 500 mg/l and 250 mg/l respectively. The point of mixing is defined as a point in the waterway 200 feet downstream of the discharge.
  41. Up until 1992, when BPSI commenced additional solutioning of caverns to expand storage capacity, the facility did not routinely discharge quantities of brine approaching 440,000 gpd. For example, in 1994, over 54 days that BPSI reported discharging, 17,221,530 gallons were discharged (averaging 319,000 gpd) as compared to an average between 1975 and 1984 of 4,417 gallons per day. During the period between 1975 and 1983, there were years of no discharge and in 1979, the year of greatest discharge during those years, the facility discharged a total volume of 4,360,600 gallons over 34 days, for an average of 128,253 gpd.
  42. Applying the mass balance formula to data supplied by BPSI with respect to discharges, the company has exceeded the limitations provided in its permit on certain days. (See, Exhibit 50).
  43. For example, on August 30, 1995, the river flow was 21 cfs and the discharge flow was 138,000 gpd. (.21 cfs). The discharge concentration of TDS was 332,670 mg/l and 233,947 mg/l of chlorides. There is no background concentration of these pollutants factored in this equation. Based upon the calculation using the mass balance formula, there are over 3000 mg/l TDS and over 4000 mg/l of chlorides indicated as the combined concentration in the river.
  44. In 1996, the Department published Quality Assurance Work Plan for Biological Stream Monitoring in New York State by Robert W. Bode, Margaret A. Novak, and Lawrence E. Abele, members of DEC's Stream Biomonitoring Unit. This document sets forth the methods that should be used in a monitoring program to assure quality assurance and control. Among the procedures for sampling and analyses described, this manual sets forth several indicators of water quality such as species richness (total number of species found in the sample); EPT richness (total number of species of Ephemeroptera [mayflies], Plecoptera [stone flies] and Trichoptera [caddisflies]); biotic index (a calculation used to determine the number of species with low tolerance to pollutants); percent model affinity (PMA) (measure of similarity to model non-impacted or ideal community); and diversity (high species diversity indicates well-balanced communities).
  45. Since 1972, DEC's Stream Biomonitoring Unit has been using benthic macroinvertebrate communities to monitor and assess water quality in New York State. In 1992, this unit produced a report to provide a summary of their findings over that twenty year period entitled 20 Year Trends in Water Quality of Rivers and Streams in New York State Based on Macroinvertebrate Data 1972-1992. Macroinvertebrates are comprised of forms such as aquatic insects, worms, clams, snails, and crustaceans. The report identifies 216 sites (of which the staff had previous data to compare) out of the 373 monitored sites as having improved, declined, or remained the same. In addition, as part of their synopsis, the monitoring unit identifies water quality in these water bodies as non-impacted, slightly impacted, moderately impacted, and severely impacted. For the sampling area on the Cohocton River near Bath, the water quality assessment was non-impacted and improved from 1972. The one area on the Cohocton River that was identified as slightly impacted (Curtis -- downstream of BPSI) based upon sampling done in 1991 and 1992 was attributed to nutrient enrichment.
  46. The methods employed in these studies are those set forth in DEC's Quality Assurance Work Plan.
  47. During August 1984, the SRBC conducted a stream survey of the Chemung River Subbasin. In this study, SRBC employed some of the indices set forth in DEC's Quality Assurance Work Plan. The Cohocton River and its tributaries were found to have good water quality. However, the middle reach of the river, from Bath to Coopers Plains, showed indications of nutrient enrichment. The high macroinvertebrate density in this location could be associated with water quality degradation. Yet, pollution sensitive organisms made up a large percentage of the total number of taxa. While the diversity was less than upstream, it was still found to be indicative of a healthy macroinvertebrate community. In addition, seven species of fish, including two species of game fish, were observed. Field analysis of chemical conditions did not reveal a distinction from upstream stations.
  48. In 1997, BPSI retained a consultant, HydroQual, to perform a bioassessment of the Cohocton River in order to determine the effects of BPSI's discharge on the river.
  49. HydroQual surveyed aquatic plants and benthic invertebrates to identify water quality at the point of discharge relative to upstream and downstream locations. These organisms were chosen based upon their nature to be sedentary and thus to be more readily affected by environmental changes.
  50. HydroQual performed sampling using a Surber sampler method on July 31 and August 1, 1997 in the area of the mixing zone, downstream of the area of maximum dilution, and upstream of the facility. This method of sampling employs scraping of rocks to acquire samples. The sampling was done less than 16 hours after a discharge from the facility. Sampling stations were 30 meters long. Two rope transects were placed across the width of the river at each site and each transect was marked at one meter increments. Three sampling positions on both transects were randomly selected but positions remained constant on respective transects across upstream, downstream, and discharge sampling locations. (See, Ex. 53, Figure 1).
  51. HydroQual designated sampling areas with two distinct habitats -- riffle and pool-- because the river is comprised of these different habitats. The sampling locations were in the bank near the facility, on the opposite bank, and in the middle of the river.
  52. HydroQual measured water quality parameters (temperature, dissolved oxygen, conductivity, salinity, pH and turbidity) at mid-stream of each sampling area in addition to stream velocity and depth. Samples of sediment were collected as well.
  53. HydroQual staff collected plant and macroinvertebrates with the use of a Surber sampler and the macroinvertebrates were studied to determine, among other things, abundance, diversity and the EPT richness, PMA, and biotic index.
  54. Columbia Analytical Services, Inc. analyzed the sediment samples while the macroinvertebrate samples were brought to HydroQual's laboratory. The sediment was analyzed for grain size -- larger rock provides better habitat for creatures that would evade predators. Smaller stones are better habitat for organisms that burrow.
  55. In this study, HydroQual found that there was a decrease in the richness of certain of the more sensitive species at the discharge location (Ephemeroptera [mayflies]). The composition of the discharge pool is 40% sands. The sand allows for the growth of vegetation where certain organisms like water boatmen (Hemiptera) can lay eggs and feed. These creatures were not found in the upstream sample areas. There is also a relative increase of Trichoptera in the discharge riffle as compared to the upstream riffle. The sediment would not account for this change because these are hydrocychid caddisflies that attach themselves to rock and the plants would not affect their abundance. It is more likely that the discharge contains a high amount of suspended organics that support this species.
  56. HydroQual found that richness of organisms at the upstream sites was higher than at the discharge pool and discharge diffuser and intermediate at the downstream locations. EPT richness, which is used to examine discharge effects on sensitive organisms, indicated impacts at the discharge diffuser, riffle sites and discharge pool. The greatest dominance was found at the discharge riffle where there was a higher percentage of caddisflies to other taxa.
  57. Among the other analyses to which HydroQual subjected its data was the percent model affinity analysis. Using this model, developed by DEC, there are percentages assigned to different species that indicate the makeup of a healthy community within a river. Compared to the upstream locations, the diffuser, discharge pool, and downstream pool locations indicate a slight impact and the discharge and downstream riffles are closer to moderate impact.
  58. This model only permits the researcher to designate a percentage for each organism up to the percentage that is considered the ideal environment. In other words, if the model calls for 30% of Trichoptera and the stream sample indicates that there is 40%, the researcher can only use the lower figure in the data. While there was a significant number of Trichopterans (caddisflies) found in the discharge riffle and this organism is a sensitive one, it only gets so much credit pursuant to this model.

  59. In comparing DEC's biological assessment profile (BAP) contained in the Quality Assurance Work Plan to the macroinvertebrate community analyses conducted by HydroQual at the discharge riffle, it is shown that for species richness HydroQual found 22 species which shows a slight impact on the BAP scale. With respect to the Hilsenhoff Biotic Index (HBI), HydroQual found 4.47 which shows no impact on the BAP index. This index is used to measure organic and nutrient pollution in streams by assigning appropriate tolerance levels to species on a 0-10 scale with 10 having the most tolerance to pollution. The EPT richness found by HydroQual was 8 showing a slight impact as shown on the BAP index. And, the PMA value found by HydroQual at this site was 39 indicating a moderate impact on the BAP scale. (See, Exhibit 58, p. 41).
  60. With respect to the richness of the most sensitive species, the EPT category, the upstream sites had higher numbers than the discharge sites with significant improvement at the downstream sites (1.5 miles downstream). The facility's discharge may be affecting these sensitive species at the discharge. This effect may not be caused by chlorides but by some other component in the discharge.
  61. The volume of discharge by BPSI just prior to the dates that HydroQual performed its sampling is not similar generally to the company's discharge during its expanded practices. For example, in July 1996, there were 23 days of discharge averaging 295,000 gpd. In Exhibit 28, the July 1997 discharge report indicates 6 days of discharge, averaging 40,000 gpd.
  62. HydroQual compared riffles (fast-moving shallow areas) to pools (slow flowing deeper area) although these environments harbor different organisms and thus, the study compared dissimilar habitats to each other.
  63. The PMA index is meant to be used exclusively for riffles. There currently exists a new model for pools but this latter index was not used by HydroQual. The difference is that the assemblage of organisms for each habitat is different. In addition, this index was developed for use with a kick sampling method rather than the Surber method.
  64. The HydroQual study used randomly selected sampling sites in the three different zones instead of sites based upon the location of the diffusers that carry the discharge out to the river.
  65. The Hilsenhoff Biotic Index (HBI) is used widely for organic loadings.
  66. HydroQual identified the organisms that it found down to the genus level. DEC identifies organisms down to the lowest possible taxa -- species if possible because within genus there are may be several species that have a broad range of tolerance. For example, Chironmidae have a 0-10 range of tolerance.
  67. HydroQual analyzed richness of species by using 100 organisms in a sample. The Department uses a computer model for this purpose.
  68. The dominance of caddisflies in the discharge riffle may relate to the increase of nutrients in that location caused by the BPSI discharge or some other source. It is possible that an increase in chlorides may stimulate growth of algae that would increase the caddisflies. Previous studies of the Cohocton River did not identify BPSI as a source of nutrient enrichment. The 1992 DEC report pointed to the Bath sewage treatment plant (considerably upstream of BPSI) and the Pollio dairy as potential sources of degradation. The Pollio dairy that was 10-15 miles upstream of Bath has closed and the Cohocton River downstream of this facility showed improvement in 1992. Since these impacts were not identified upstream of BPSI, it is unlikely that the noticeable effects downstream of BPSI's discharge are related to the sewage treatment plant.
  69. Chloride is an inorganic toxin for which the Environmental Protection Agency has published water quality criteria. Chlorides of potassium, calcium, and magnesium are generally more toxic to aquatic animals than sodium chloride. Most anthropogenic chloride is derived from sodium. The nature of the effects of sodium chloride on an organism will be governed by the concentration of the sodium, the duration of the exposure, and the nature of the creature.
  70. In the study conducted by EPA in 1988 as the basis for its criteria, there was an acute (fatal) reaction to sodium chloride levels to the Daphnia pulex at 1,470 mg/l, the caddisfly at 4,039 mg/l, and the fathead minnow at 6,570 mg/l. There were found to be chronic toxic effects of sodium chloride of 372.1 mg/l on Daphnia pulex and 433.1 mg/l on the fathead minnow. Growth inhibition occurred in freshwater plant species when exposed to levels of sodium chloride ranging from 71 mg/l over 10 days (Spirogyra setiformis) to 36,400 mg/l over 28 days (Chlorella luleoviridis).
  71. Based upon these findings, EPA concluded that freshwater aquatic organisms would be sufficiently protected if the four-day average concentration of dissolved sodium chloride does not exceed 230 mg/l more than once every three years on the average and if the one-hour average concentration does not exceed 860 mg/l more than once every three years on the average.
  72. New York State has not adopted this standard and instead, 6 NYCRR § 703.5 provides for a standard of 250 mg/l in A, A-S, AA, AA-S and GA waters. This number was adopted by DEC as the permit limitation in BPSI's permit.
  73. Due to the solubility of chlorides, if the 250 mg/l limitation is adhered to, where there has been exceedances, a full recovery in the biotic community should occur within six months.

    Miscellaneous Facts Related to Brine Disposal

  74. Currently, several local municipalities take a small portion of BPSI's waste brine to use as dust control on their roadways. In some states, brine is used in winter for de-icing on roadways; however, this use is not permitted in New York State.
  75. BPSI is seeking to alter its operation so that it will store natural gas rather than LPG in the caverns. In the event that this plan comes to fruition, there will no longer be a need to use the brine as the product will be kept under pressure. BPSI has applied to dispose of the brine through ground injection.

DISCUSSION

The Department's Jurisdiction to Modify BPSI's Permit

There are a number of similar provisions in Article 17 of the Environmental Conservation Law (ECL) and the implementing regulations that relate to permit modifications, generally and specifically, for SPDES permits. Section 4(b) of the General Conditions of BPSI's current SPDES permit contains similar criteria. This permit, Exhibit 3, is annexed hereto as Appendix B. ECL § 17-0815 provides that a permit may be modified if the Department finds (a) a violation of any term of the permit ; (b) the permit was obtained by misrepresentation or failure to disclose fully all relevant facts; or (c) a change in conditions that requires a temporary or permanent reduction or elimination of the discharge. Section 17-0817(5) of the ECL provides that any interested party may request that a permit be modified on the grounds, inter alia, that newly discovered, material information has been discovered. Section 17-0303(4)(f) allows for modification of a permit to prevent or abate water pollution. Section 754.4(e) of 6 NYCRR provides that grounds for modification of a SPDES permit are (1) violation of the permit; (2) obtaining a permit by false representations or failure to disclose all relevant facts; (3) a change in physical circumstances, requirements or criteria applicable to discharges.

Section 621.14 of 6 NYCRR provides that permit may be modified for: (1) materially false or inaccurate statements in the permit application or supporting papers; (2) failure by the permittee to comply with any term or condition of the permit; (3) exceeding the scope of the project as described in the permit application; (4) newly discovered material information or a material change in environmental conditions, relevant technology or applicable law or regulations since the issuance of the permit; (5) noncompliance with permit conditions, orders of the commissioner, the ECL, or regulations related to the permitted activity.

Because staff believes that BPSI has exceeded the scope of the permitted activity based upon new information, it initiated the modification. BPSI denies that it has exceeded the scope of the permit because it claims it has never exceeded the permit parameters including flow. In response to staff's claims that the company's application to the SRBC triggered the regional staff's understanding of BPSI's expanded activities, BPSI argues that staff was well aware of the company's actions because BPSI applied for and obtained permits to expand its storage capacity and to drill additional wells. Thus, from the company's viewpoint, there is simply no basis for any modification.

There is no real dispute over whether BPSI has expanded its facility by enlarging the storage capacity of its caverns. This in turn has led to increased discharges of brine into the Cohocton River. However, in its application to increase the storage capacity dated January 31, 1992, BPSI states in response to the question in the environmental assessment form (EAF) regarding surface liquid waste disposal (no. 12) that there would be "[n]o increase in permitted discharge under existing SPEDES [sic] required." In the package of information submitted to DEC Division of Mineral Resources in December 1991, the company describes washing operations used to develop the caverns. In this description, BPSI states that fresh water is used to wash out the salt and form a cavity and as this water becomes saturated with salt, the brine will be forced out of the wells and sent to a rubber-lined brine storage pond. During operations, the company explains that as LPG product is received at the facility, it will be injected into the well under pressure forcing the brine up to the storage pond. When the LPG is removed, brine is pumped down into the well to force the LPG out. In the EAF annexed to this documentation, BPSI states that "[n]o change in SPDES permit is required" and "[n]o existing water bodies will be effected [sic]." The April 1992 negative declaration related to BPSI's expansion application also describes the operation as in the EAF -- that is, there is no mention of additional discharges to the Cohocton but rather, the brine, when pumped out of the cavern, would go to the storage ponds.

The operation, prior to expansion, was described by BPSI in its 1984 application to renew its SPDES permit. As part of this document, the company included a diagram that shows the brine going between the storage pits and the LPG storage wells except when the net rainfall causes a discharge. The quantity of discharge noted in this diagram is 4,417 gallons per day as an average over a nine year period. Attachment B to this application sets forth the actual days of discharge over this 9 year period (1975-1983) and notes that in some years there was no discharge at all. In Attachment A to this documentation, the company describes the operation of the outfall. BPSI notes here that "[a]ccumulation of rainfall into brine storage pits is in excess of the annual evaporation of water from brine storage pits."

BPSI President Weinberg stated during his testimony that the permit has not changed since it was transferred from Mobil to BPSI except for the change in name of the permittee to EIL Petroleum, Inc. In 1975, Mobil prepared an engineering report for DEC that detailed the company's processes. In this report, the company explains that the LPG storage facility uses brine to maintain pressure in the caverns to keep the gas liquefied. When gas is being removed, brine is pumped into the caverns to force out the liquid gas. In describing the sources of wastewater, Mobil states that the most important one that is the subject of the SPDES permit is the discharge of excess brine from the brine pits. In explaining the source of the excess brine, Mobil states that precipitation is a major source. This source was estimated at .9 million gallons per year. The company also used fresh water to flush the brine piping and well tubing each day creating approximately 1.5 million gallons of brine wastewater per year. A third source of wastewater mentioned in this report is fresh water used to flush a well when Mobil took it out of service. This source was estimated at .61 million gallons per year. The company estimated that a maximum possible annual discharge should be close to 6.5 million gallons per year. In a waste abatement section to this report, Mobil states that the recycling of the wastewater "is inherent in the design of the facility". The two storage ponds combined have a capacity of 29.5 million gallons.

While BPSI denies having knowledge of the Mobil report prior to these proceedings, the staff relied upon it in understanding the operation of the facility and developing the permit. Since BPSI has not requested any substantive changes to the permit and none have been made, it was reasonable to assume that the company's discharge practices remained the same. In any event, BPSI's own renewal application confirms the practices that Mobil described -- that the brine was stored in the pits when not being used in the caverns and the discharge was required by excess precipitation. Now, BPSI did make an application to expand that was reviewed and approved by DEC staff. However, in the applications, BPSI does not note anywhere that it intends to significantly increase its discharge. In fact, the company stated in these applications that the SPDES permit would not require any change. BPSI argues there is no significant increase because the permit allows a maximum flow of 440,000 gpd. But, the fact is that this flow was far above what the company had discharged historically.(9)

The General Provisions section of BPSI's current SPDES permit, paragraph 1(b) provides (emphasis added):

A determination has been made on the basis of a submitted application, plans, or other available information that compliance with the specified permit provisions will reasonably protect classified water use and assure compliance with appliable water quality standards. Satisfaction of permit provisions notwithstanding, if operation pursuant to the permit causes or contributes to a condition in contravention of water quality standards, or if the Department determines, on the basis of notice provided by the permittee and any related investigation, inspection or sampling, that a modification of the permit is necessary to prevent impairment of the best use of the waters or to assure water quality standards or compliance with other provisions of ECL Article 17, or the Act, the Department may require such a modification . . .

Thus, even assuming that BPSI has not exceeded any of the stated parameters including flow to date, the permit provides that DEC may alter conditions if it finds that the permit is not sufficiently protective of water quality standards.(10) In General Electric Company, File No. 2833, 6 ELR 30007 (Hearing Officer's Report 1976), then Hearing Officer Abraham Sofaer made a similar finding in an analogous case. In that case, the ALJ found that G.E. had violated the ECL by discharging PCB's into the upper Hudson even though the company had not exceeded the parameters set forth in its permit. Judge Sofaer found that G.E. had clearly violated water quality standards and that was sufficient to impose the relief sought by the Department. The judge referred to general language in the permit that required compliance with state and federal law.

In response to G.E.'s arguments that the government agencies should have been aware of its activities, Judge Sofaer wrote, "[f]lexibility is preserved because of the numerous ways in which administrators may be unable, despite the best intentions, to regulate effectively through the effluent limitations system. Inadequate information, expertise, personnel or knowledge about the particular discharge, are only some of the reasons a permit might be issued authorizing activity that would contravene some other part of the state or federal government's regulatory scheme. The system seems clearly to place on the would-be discharger, whose influence with the agency might itself cause or contribute to regulatory insufficiency, the burden of insuring that the discharge violates no other federal, state or local prohibitions. It would defeat the legislature's objectives to impose the costs of such failures on the public rather than upon the discharging party." 6 ELR at 30013.

While these proceedings are not precipitated by an enforcement effort and the staff does not seek any penalties here, the logic is quite applicable.(11) The permit was based upon the processes that the company implemented up until the expansion and therefore, while BPSI may not have exceeded the parameters specified in the permit, the expansion and concomitant need to discharge greater quantities of brine into the Cohocton provide an appropriate basis pursuant to the permit's general conditions, the ECL, and the regulations, to modify the permit as requested by staff in order to ensure that the water quality of this river is maintained.

Perhaps because the water staff was not sufficiently apprised of these plans, staff overlooked BPSI's intentions; however, there are no grounds to estop the Department from now addressing the issues raised by the expansion. The State cannot be estopped from performing its statutory duty, which in this case is ensuring that water quality standards are preserved.(12) See, In the Matter of the Application of the Town of Poughkeepsie, Hearing Officer's Rulings (April 21, 1996); Wedinger v. Goldberger, 71 NY 2d 428 (1988).

As for BPSI's presentation with respect to the water quality of the Cohocton River and the facility's effects on that quality, the ALJ found that the study was not conclusive. HydroQual's own analysis shows effects from BPSI's discharge based upon the changes that appear in the discharge pool samples. While it is not clear from the record what specific component of the discharge is the catalyst for the noted changes in the river environment, some impact is noted. In addition, it appears that the period that HydroQual performed its study was not representative of BPSI's discharge since it expanded its activities. The Department's witness, Mr. Bode, who critiqued HydroQual's study and who also co-authored DEC's Quality Assurance Workplan, found that the study did not properly apply certain criteria. For example, the PMA index was developed for use in riffles not pools. Mr. Bode also explained that the use of the Surber sampler method by HydroQual would produce results that were not comparable to DEC's indices because DEC relied upon the kick method. Because the pool and riffle environments contain different organisms, a comparison of these would not be helpful. In addition, the use of the Hilsenhoff Biotic Index for inorganic pollutants was deemed inappropriate by Bode as well as HydroQual's methodology with respect to the use of the EPT richness index.(13)

The CREST experts criticized the HydroQual study for its choice of sampling points. These experts stated that the random sampling points chosen by HydroQual might have resulted in the failure to capture the discharge influenced zones. It may have been preferable for the study to have set forth whether an analysis of the diffuser's influence on the river was noted. However, based upon the areas chosen, the number of samples, and the results observed, it would appear unlikely that HydroQual had completely missed the affected areas. And, in cross-examination of Mr. Tolman, he admitted that he knew nothing about how the discharge diffusers operated and his opinions about the dispersion and solubility of the chlorides were not necessarily more informed than HydroQual's.

The HydroQual study was deficient in certain ways as noted by Mr. Bode. Yet, the study did show changes in the river environment below the discharge that require more inquiry. HydroQual's expert attributed these changes to the different substrates in the discharge riffle. Mr. Bode observed that the sudden change in the decrease in organisms in the discharge sites and the dominance of the caddisflies in this area were indicative of nutrient enrichment.(14) Mr. Bode, who has a masters in entomology, disagreed with Dr. Michalenko, the HydroQual representative, that the abundance of caddisflies in the discharge pool was due to plant life in that location because these organisms live on rocks. It is unclear whether the chlorides discharged from BPSI would have these effects. There is no question that at certain levels, sodium chloride can have acute and chronic toxic effects on the biota in a river. Thus, in consideration of the facility's significant expansion that will result in higher quantities of sodium chloride being discharged on a regular basis into the river, DEC's request to alter the permit to obtain more information and to provide the company with more data to determine its discharge, is logical.

BPSI argues that the staff's proposed modifications impose more stringent conditions on the facility's operation than is permitted by 6 NYCRR § 754.2(b). This regulation provides:

Any point source, the construction of which is commenced after October 18, 1972, and which is so constructed as to meet all applicable standards of performance shall not be subject to any more stringent standard of performance during a 10-year period beginning on the date of completion of such construction . . . provided, however, that if the operations of such source causes or contributes to any contravention of State water quality standards the department may require abatement action to be taken by the permittee and modify the permit pursuant to Part 757 of this Title.

I find that BPSI has misconstrued this section of the SPDES regulations. First, the point source here is not the wells but rather the pipe or conveyance that takes the waste brine water from the storage ponds to the Cohocton River. The definition of point source in 6 NYCRR 750.2(20) is "any discernible, confined and discrete conveyance . . .". This definition would not include the wells which are the original source of the pollutants but are not the conveyance to the water. Thus, as described in the Mobil engineering report (Exhibit 13), the point source here has been functioning prior to 1972 and therefore, this section is not applicable.

Moreover, "standard of performance" is defined in ECL § 17-0105 as "a standard for the control of the discharge of pollutants which reflects the greatest degree of effluent reduction which the federal government determines to be achievable through application of the best available demonstrated control technology, processes, operating methods, or other alternatives, including, where practicable, a standard permitting the discharge of pollutants." The staff has not requested in this modification a heightened standard of performance for BPSI but rather a change in classification and in methods of determining the appropriate discharge that will provide both parties with more information. As noted by staff in its reply brief, the use of the mass balance formula is a guide to help determine the appropriate levels of discharge -- it is not a standard. Therefore, again, the cited regulation does not apply.

The ALJ finds BPSI's arguments with respect to DEC's authority to modify the permit based upon the Department's knowledge of the expansion, the company's alleged compliance with the specific parameters set forth in the permit, and the noted provisions in the SPDES regulations to be unpersuasive. A discussion of the specific proposed modification terms follows.

As described above, three issues, the change in classification, applicability of the mass balance formula, and the change in sampling location, were to be adjudicated in this hearing. Because BPSI agreed to the change in sampling location (the Savona Bridge) during the course of the hearing on March 15, there is no need to make a recommendation with respect to that issue.

Classification

Deputy Commissioner Donohue determined in the Interim Decision dated March 26, 1997 that the Division of Water Technical and Operational Guidance Series (TOGS) 1.2.2 does not require that a facility discharge priority pollutants in order to classify it as a significant minor industrial discharger [01]. Therefore, that legal issue has been determined and will receive no further consideration here.

The proposed reclassification is based upon the staff's view that the facility's change in processes -- the increase in LPG storage capacity and the resulting increase in the discharge of brine -- require heightened scrutiny of the facility to ensure that there is no greater detriment to the receiving waters. Primarily, this entails the company's monthly submission of discharge monitoring reports. This requirement is contained in the current permit but was waived by DEC during the last decade based upon the Department's insurmountable workload in reviewing increasing numbers of monitoring reports from all surface water dischargers. The decision to prioritize dischargers that had greater potential effects on water bodies led to waivers such as the one given to BPSI. This policy is noted in TOGS 1.2.2. However, due to BPSI's increased discharge, the staff have determined, properly so, that it should have the opportunity to more closely monitor the impacts.

BPSI does not dispute that it has expanded its facilities and it is apparent from the annual storage reports and the DMR's submitted to staff by the company that it has also increased its activities and discharges. As noted above, prior to BPSI's involvement, the facility discharged intermittently and in some years did not discharge at all. However, in more recent years, BPSI has discharged throughout the year and often on a daily basis. And, the volume of the discharge has also increased considerably. BPSI's own application to the SRBC indicates that it will discharge on a daily basis volumes above its permitted limits and therefore, it must deep well inject a portion of the brine.

BPSI disputes that its facility is an environmental burden on the river that should require the change in classification. However, the study of its own consultant reveals that there may be impacts resulting from the BPSI discharge to the river. In addition, the modifications proposed by staff do not assume that the discharge mandates a change in the limitations now prescribed. Rather, these permit additions require the company to provide additional information to the Department that will enable everyone to better assess effects and what, if any, further measures must be taken.(15)

Although early on in these proceedings BPSI alluded to a stigma attached to the 01 classification, there is no proof of any such result in the record. In fact, based upon the statements of many who attended the issues conference in February 1997, it would seem that many of the citizen's concerns would be assuaged by systematic monitoring. Given that the company is already required to perform the routine sampling, the only change is the submission to the Department. In fact, the TOGS itself characterizes the change proposed by staff -- from non-significant to significant minor -- as minor. See, TOGS 1.2.2 (4)(b). This cannot be considered prejudicial or burdensome in light of the facility's changed practices. Therefore, I recommend that the staff's proposed change in classification be ratified.

Mass Balance Formula

The mass balance formula is an analytical method that is routinely used in the SPDES program to determine the amount of a given pollutant that may be discharged into a specific waterway without exceeding applicable water quality standards. In essence, this formula is based upon a consideration of the background levels of the pollutant, the flow of the watercourse, the concentration of the pollutant in the discharge, and the flow of the discharge. By inserting these numbers into the formula's equation, the concentration of the pollutant in the waterway can be predicted prior to discharge. And, by application of this formula, the Department staff as well as the consultants for CREST, were able to determine that on certain days, BPSI exceeded its permit's limits. Department staff and CREST used the volume of the flow of the river, the volume of the flow of the discharge and the background concentrations of TDS and/or chlorides in the river and found different outcomes (in-stream levels of TDS and chlorides) than the ones reported by BPSI on certain days. (See, e.g., Exhibit 50). In fact, the use of this formula prompted the Department staff to perform the dye test in the river that revealed that the sampling location was inadequate because it was outside the mixing zone of the discharge.(16)

During the hearing, BPSI did not contest the explanation of the formula by staff or CREST. However, the company does dispute the application of the formula because (1) it will not provide accurate information due to the lag time between upstream sampling and results; (2) the formula as proposed by DEC is not a true mass balance formula because of the cap on flow of 440,000 gpd in the SPDES permit; and (3) the Department has not demonstrated any exceedances of the company's SPDES permit to warrant such a modification. In order to apply this formula, BPSI can get accurate and timely reports of river flow from the USGS gauge at Campbell. However, in order to obtain an accurate account of the upstream concentrations of TDS and chlorides, it must take a sample that must be analyzed in a laboratory. Mr. Weinberg reported at the hearing that the company's lab is certified (although it need not be for purposes of this testing according to staff) and the analysis could presumably be done there.(17)

This process will take several hours during which time, due to changes in river flow, the background concentrations could possibly vary. Thus, the figures used in the formula based upon the sampling performed may not be accurate. BPSI claims that using the formula in this manner may lead the company to exceed its permit limits due to reliance on inaccurate data. If the company's laboratory takes 5-8 hours to process a sample and during that time, if the river flow changed, it might be necessary to take another sample that would require another analysis prior to discharge. Due to the potentially repetitive nature of the process, BPSI might have to keep its laboratory running for lengthy hours.

Mr. Tolman, CREST's expert witness, testified that there other means by which BPSI could determine the upstream levels of chlorides and TDS in the river and that would yield quick results. For example, he stated that the use of a conductivity test could be used by correlating the levels of TDS and chlorides in the river to the level of conductivity. As historical data was developed, this method could be used to get quick background levels to be used in the application of the mass balance formula. Mr. Tolman and others also testified that BPSI could employ a conservative buffer so that the chance for error in using the mass balance formula would be diminished.

In addition, both Mr. Pearson and Mr. Weinberg testified that BPSI had been using a formula since August 1997 that appeared to be working based upon discharge sampling results. This formula establishes a background level for TDS and chlorides and this number is utilized in lieu of daily sampling for that part of the equation. Mr. Weinberg does not consider this to be a pure mass balance formula because the background levels are set as well as the limit on discharge flow (440,000 gpd). However, BPSI represented at the hearing that it was satisfied with the application of this formula. Staff has explained that this formula was developed as a stop-gap measure during the pendency of these proceedings. Staff has further stated that in order to develop background levels that have a good degree of accuracy, more information would have to be obtained such as the year-round concentrations of TDS and chlorides and presented to the Department by BPSI.

The mass balance formula is meant to be used as a predictor of the effects of a discharge. Through its application, the discharger is in a superior position to predict the effects of the effluent on the waterway and to avoid exceedances of applicable permit limitations and/or water quality standards. Even assuming that there may be times that the numbers are not exact due to changes in river flow, etc., the utilization of this system would be preferable to failing to use any real-time information to guide when and how much to discharge. With respect to BPSI's claim that the formula DEC seeks to impose is not "pure", I do not see the relevance. The fact that the Department has adopted a cap on flow seems reasonable in light of the State's goals of protecting water quality. And, considering the earlier practices of the company, the 440,000 gpd was far above what the company routinely discharged. Still, the use of the formula will allow the company, during times of high flow, to discharge closer to the cap than it might otherwise be able to.

The formula now being utilized by BPSI would not be "pure" either by the company's definition. However, it does appear to be working to the satisfaction of both the Department and BPSI. Region 8's water engineer, Mr. Pearson, testified at the hearing that the Department would not dictate to BPSI the method it chose to determine the background concentrations of TDS and chlorides. He explained that if the company opts to do the regular in-stream sampling, it would also have the benefit of being able to discharge at levels closer to the maximum amounts without exceeding the permit's limitations. However, this method is more onerous due to the need to perform laboratory analysis and wait for the results.

Mr. Pearson explained that the company and DEC could agree to certain assumed values for backgrounds levels, as BPSI and the Department now currently use, based upon more data on the concentrations in the discharge and the river. This method would mean that the company would be permitted to discharge less because more protective numbers would be established. Mr. Pearson also noted that the levels established in the 1997 agreement would have to be revisited based upon the information provided by HydroQual. BPSI complains that this latter method was too susceptible to change and would provide the company with little assurance about its ability to discharge. It is logical that any assumed numbers must be based upon the conditions in the river and the nature of BPSI's discharge. To the extent that there are large changes in either of these two factors, the assumed number must also change. This is not something over which the Department has control but rather is based upon changes in the environment and in company practices. In this case, it was the permittee that created the conditions for change by modifying its practices.

CONCLUSION

Based upon the above mentioned facts and analysis, I recommend that the staff's proposed permit modifications be adopted. In consideration of BPSI's complaints with respect to the burden of in-stream sampling, I recommend that the Department staff develop a schedule by which BPSI will produce proposed background levels for chlorides and TDS. If BPSI prefers the in-stream sampling method, it should be permitted to adopt it at any time. And, if assumed background numbers are utilized, neither the Department nor the permittee is to be permanently bound to these levels and, instead, they are subject to revision based upon changes in company practices or river conditions. Of course, the objective will be to give reasonable assurance that applicable water quality standards are met. I also recommend that the Department's Pollution Prevention Unit consider whether the brine might have other uses that might further diminish or eliminate the need to discharge this material into the river.

/s/
Helene G. Goldberger
Administrative Law Judge

Albany, New York
August 17, 1998

TO: Ronald Sinzheimer, Esq.
23 Elk Street
Albany, NY 12207

W. Michael Holm, Esq.
Redmon, Boykin & Braswell, LLP
510 King Street, Ste. 301
Alexandria, VA 22314

Lisa Perla Schwartz, Esq.
NYSDEC - Region 8
6274 East Avon Lima Road
Avon, NY 14414

Alan J. Knauf, Esq.
Knauf & Craig, LLP
183 East Main Street
Suite 1250
Rochester, NY 14604

1. Mr. Sinzheimer also informed the Office of Hearings and Mediation Services that BPSI made a Freedom of Information Law (FOIL) request of staff in August 1997 and staff provided BPSI with documents in response but also withheld documents. The ALJ asked staff to produce a list of withheld documents for BPSI so its counsel could determine whether any of these documents were relevant and necessary to the proceedings. Staff provided a list in late January 1998 however, because the list was incomplete and because BPSI objected to the staff's determination to withhold some documents, BPSI filed a FOIL appeal by letter dated February 25, 1998. This appeal is being reviewed by ALJ Susan Dubois on behalf of the FOIL Appeals Officer.

2. At the last day of hearing, Mr. Tolman explained that he is now employed by a firm in Lakewood, New York -- R.M. Brown Engineering.

3. Mr. Knauf made a similar motion at the beginning of the proceedings on April 6, based on a lawsuit that had been filed by BPSI against CREST the preceding week. The ALJ denied this motion as well.

4. Mr. Knauf and Mr. Boykin contacted the ALJ on July 31 by telephone to discuss CREST's request for an additional week to submit its reply brief. Due to the ALJ's schedule and the already elongated briefing schedule, ALJ Goldberger denied the request.

5. During the issues conference, BPSI also maintained that the DEC's Division of Water Technical Operational Guidance Series 1.2.2 provides for a change to the significant minor industrial category only when the facility discharges priority pollutants. Because BPSI states that the facility does not discharge such pollutants, it argues that it should not be subject to this category. In her issues ruling, the ALJ requested that the parties submit briefs on this issue. Deputy Commissioner Donohue determined in his Interim Decision of March 26, 1997 that a facility need not discharge priority pollutants in order to be considered a significant minor industrial discharger. Accordingly, this legal matter is no longer at issue in these proceedings.

6. The Campbell gauge is a monitoring station maintained by the United States Geological Survey (USGS) to measure flow in the river. The gauge is downstream of BPSI.

7. There are three surface ponds, however, one pond is not used for brine storage because the Department does not approve of its use in this manner due to its determination that this pond does not have a sufficient liner.

8. Contrary information was presented in these proceedings as to whether BPSI has ceased solutioning caverns pursuant to staff's instructions and so it is unclear to the ALJ as to what the status of BPSI's activities are at this time.

9. In contrast to the SPDES renewal applications and the expansion applications submitted to DEC, BPSI made its intentions more explicit in its application to the SRBC in the spring and summer of 1996. In the correspondence and application submitted to the SRBC, BPSI stated that it was permitted to discharge only up to 432,000 gpd of brine to the river and therefore, in order to solution the additional caverns, the company required permission to inject 1.568 mgd into a layer that would make it unavailable for future use.

10. In their reply briefs, both staff and CREST request that the ALJ allow the admission of Exhibit 5, a document that appears to be Mobil's SPDES permit that was issued to it in 1979 and which staff states was the permit transferred to BPSI. CREST and staff point to language in the general conditions of this permit in support of their positions on the Department's authority to modify the permit as it has proposed. At the hearing, the parties disputed the accuracy and completeness of the particular document and the ALJ did not admit it into evidence. Because BPSI made mention of this document in its closing brief, the other parties claim now that the permittee has waived any former objections. However, Exhibit 3, the 1994 permit, contains similar language and therefore, there is no basis to alter the determination to exclude a questionable document.

11. It should be noted that while these are not enforcement proceedings and BPSI has consistently maintained that it has never violated the parameters contained in the SPDES permit, the company's previous sampling point may have given a false sense of security to BPSI because it was not situated to pick up any part of the discharge plume.

12. Apart from the difficulty of applying the doctrine of estoppel against a government entity that is seeking to carry out its jurisdictional duties, there is no basis to find that BPSI has relied to its detriment on the permit conditions as they currently exist. While BPSI did go forward with its expansion, the modifications proposed by staff do not hinder the company's growth. Staff has not proposed that BPSI cease its discharges or even that the parameters set forth in the current permit be tightened. Rather, the modifications are directed at obtaining more information to determine the increased discharge's effects and to prevent exceedances. And, based upon its presentation of its project in the application materials to DEC, BPSI is responsible in large part for the delay in action by DEC staff in addressing the company's expansion. Finally, BPSI presented no proof during the hearing of the detriment that they supposedly incurred.

13. In an article published in the Great Lakes Entomologist , Spring 1987, William L. Hilsenhoff, the creator of the Hilsenhoff Biotic Index describes the use of this index as a measure of organic and nutrient pollution. He also states that samples from pools should not be used and recommends the use of kick sampling. (See, Ex. 59, An Improved Biotic Index of Organic Stream Pollution, Vol. 20, No. 1, pp. 31, 33-34).

14. Past studies that were made part of this record, the Twenty Year Trends and the SRBC report, indicate that the Cohocton River had areas that were not affected but also areas that were influenced by nutrient loadings attributed to the sewage treatment facility at Bath and dairy operations. However, since the sewage treatment plant is considerably upstream of BPSI and the dairy which was also upstream (10-15 miles) is closed, these entities would not be the sources of a disturbance directly downstream of BPSI's discharge. As pointed out by CREST in its reply brief, Mr. Bode testified that the impacts seen downstream of BPSI were not seen upstream of the facility and therefore, sources like the sewage treatment plant are unlikely targets. As noted by Mr. Bode at the hearing, the indices used by DEC and HydroQual are not necessarily indicators of the source of a pollution problem but rather that one exists.

15. In its closing brief, BPSI repeatedly sets forth a philosophical construct to demonstrate the incorrectness of the proposed modifications. BPSI states that DEC is basing the modifications upon the discharge of brine generated from the activity of the solutioning caverns which staff claims is prohibited. However, the company asks rhetorically, "[i]f solutioning caverns is prohibited, what is the activity that warrants the reclassification of the facility?" This proceeding was not initiated to determine the legality of the cavern expansions and there is no question that BPSI obtained permits from the Department for this activity pursuant to Article 23. Rather, in this hearing we are addressing whether given the state of the current operations of the facility are the staff's proposed modifications appropriate?

16. As noted above, while the proposed change in sampling location was initially contested by BPSI, the company agreed to stipulate to the change during the hearing. Thus, the ALJ will not address this modification in this discussion except to the extent that it bears on the other issues. BPSI argues in its closing memorandum of July 10 that the change in sampling location resolves all other issues. While this change should result in more accurate sampling and better data regarding the facility's effects on the Cohocton River, the other proposed modifications are also necessary. The reclassification will result in more information for the Department staff and the mass balance formula will assist the permittee in ensuring that SPDES parameters and water quality standards are not exceeded as explained in more detail herein.

17. Although staff has reiterated that sampling done by BPSI for the purposes of determining the appropriate discharge is not subject to the requirement that analysis be performed by a certified lab, the company continues to argue this point. As staff has made it quite clear that this is not a requirement of the permit because the analysis is of upstream concentrations for the purposes of determining the discharge and has offered to stipulate to same, the ALJ will not consider this as an obstacle to implementation of the mass balance formula.

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