California Contamination Case Highlights the Importance of "Knowing" Land History

by Duane Craig

In a case that should serve as a warning to anyone considering buying property these days, it is glaringly clear how important it is to know the history of the land. Many people who own land tend to do whatever they want with it, and since the arrival of oil refining we have a multiplex of chemicals that have only recently been given proper disposal processes. Of course, having access to those processes doesn’t mean that all people will use them, but at least the ones who act responsibly will.

Imagine the fix Kinder Morgan finds itself in as it defends against a suit claiming it is the sole responsible party for nearby soil and groundwater contamination even though the property was previously used by three other companies that received, stored and dispensed petroleum products. The site is on Gaffey Street in San Pedro, California, and its legacy of potential contamination extends back to 1943. Time Oil set up a single, aboveground storage tank on the property that year and in subsequent years added additional tanks to store gasoline and diesel fuel. From 1977 to 1980 BP Marine leased the facility from Time before buying it. At about that time there were 11 tanks on the property.

Next GATX Terminals Corporation bought it in 1996 and sold it to Kinder Morgan in 2001. In 2004, Kinder Morgan decommissioned the facility. It emptied the tanks and cleaned them before subsequently selling the property to a developer. Both GATX and Kinder Morgan stored diesel oil, cutter stock and bunker oil in the tanks. Those oils represent the lower end of refined products because they are heavier, less volatile and burn more slowly. The higher sulphur content means they also are heavier polluters.

Environmental Protection Agency (EPA) lists 16 PAHs as priority items to be monitored in wastes and water

For example, cutter stock is used in refining to “cut” the viscosity of other refinery products. Using it increases the dollar value of certain products sometimes up to 27 percent. There is also evidence that it is the cutter stock that will determine the distribution of polycyclic aromatic hydrocarbons (PAH) in heavy fuel oil. PAHs are naturally produced by forest fires, volcanic eruptions and rotting biological material. They are produced by people in greater quantities through the burning of fossil fuels and they can be present in refined products. The Environmental Protection Agency (EPA) lists 16 PAHs as priority items to be monitored in wastes and water.

Bunker oil is the preferred fuel of cargo ships and has to be steam heated before it can be pumped from the on-board tanks to the engines. It is sometimes called “the bottom of the barrel,” to signify its low quality when compared to other refined products. In general, the less refined products create more pollution when burned, and when released into the environment they are much more persistent and difficult to cleanup.

Kinder Morgan denies being responsible for the alleged contamination but has been ordered by the State of California, Department of Toxic Substance Control to basically prove that by assessing the condition of the soils and groundwater and then cleaning up any problems it finds. An independent soil sampling found “traces of benzene, toluene, ethylbenzene, and xylenes at the site.”