SOUTH PORTLAND — City officials are seeking a tougher federal crackdown on Sprague Resources LP for air pollution from heated petroleum storage tanks at its facilities in South Portland, Searsport and five other New England cities.

The U.S. Environmental Protection Agency filed a lawsuit against Sprague in May, along with a proposed settlement that would require the company to properly license and take steps to reduce odors and emissions of volatile organic compounds, or VOCs, from heated tanks storing No. 6 heavy residual fuel oil and asphalt.

The Sprague Energy tank farm in South Portland.

In addition to Sprague’s facilities in Maine, the proposed consent decree applies to tank farms in Everett, Quincy and New Bedford, Massachusetts; Newington, New Hampshire; and Providence, Rhode Island.

The city is challenging several aspects of the proposed settlement, including how Sprague’s facilities would be monitored and licensed in the future and why the company wouldn’t be required to pay penalties to South Portland or the state of Maine.

Under the proposed settlement, Sprague would pay a total of $350,000 in civil penalties, including $205,000 to the U.S. government and $145,000 to the state of Massachusetts.

The city’s Clean Air Advisory Committee said it “struggles to understand why the consent decree does not include compensation to the state of Maine or the city of South Portland,” according to a draft of comments being prepared for the EPA.

“The consent decree can, and should, include some provision for payment to the city, the state, or both, to reimburse the significant expense incurred in reacting to these violations,” the draft comments state.

The EPA initially set July 4 as the deadline to submit public comment on the lawsuit and settlement, which must be approved by a federal judge before it takes effect. However, city officials sought a 60-day extension and learned this week that the EPA extended the deadline 30 days to Aug. 5.

As a result, the advisory committee will have an additional month to review and possibly revise three pages of comments that the City Council approved last week to be submitted by July 4 if necessary.

“The air quality of South Portland is a huge continuing concern of our residents, the City Council and the Clean Air Advisory Committee,” said Mayor Kate Lewis. “If the advisory committee decides to make any changes to the comments, they would come back to the council for final review before they are submitted.”

Sprague spokeswoman Shana Hoch said the company wouldn’t agree to pay financial penalties to South Portland or the state because it believes it hasn’t exceeded emission levels allowed under air pollution control permits issued by the Maine Department of Environmental Protection.

Hoch said the Portsmouth, New Hampshire-based company backs the settlement with the EPA as proposed, though it disputes the results of a new testing method used to measure emissions.

“We agreed to settle,” Hoch said, despite being confident the new testing method was flawed and after spending nearly $1 million in legal, engineering and testing fees over the last seven years.

The federal move against Sprague comes a year after the EPA took similar action against Waltham, Massachusetts-based Global Partners LP for Clean Air Act violations related to VOC emissions from heated tanks at its petroleum storage facility in South Portland.

That lawsuit and settlement with Global ignited public outcry among residents who were fed up after dealing with foul odors and health fears for decades. Last week, the city’s Planning Board approved a site plan for an enhanced odor control system that Global will install on heated tanks of No. 6 oil and asphalt.

City officials expected the EPA’s action against Sprague. The agency had filed violation notices against the company in recent years because its facilities were unlicensed to store No. 6 oil or asphalt in heated tanks, according to the lawsuit filed in U.S. District Court in Boston.

Sprague agreed to the settlement with the EPA and the Massachusetts Department of Environmental Protection to resolve alleged violations of the federal air pollution regulations and Massachusetts clean air laws, the EPA said.

The terms of the settlement are designed to bring Sprague into compliance with laws regulating VOC emissions, which are considered hazardous to the environment and human health. VOCs contribute to smog and ground-level ozone and can cause throat and lung irritation, headaches, nausea, organ damage and cancer.

Sprague’s heated tanks emit VOCs mainly because No. 6 oil and asphalt are stored at high temperatures to keep them in liquid form, the EPA said. The heating causes hazardous substances in the petroleum products to vaporize and be released into the air.

Like Global, Sprague disputes the EPA’s findings, which resulted from a new testing method that measured captured emissions. It was developed at the direction of the EPA as an alternative to its standard method of estimating tank emissions using a widely disputed formula developed by the petroleum industry.

Under the agreement, Sprague must apply for revised state air pollution control permits for facilities in Maine, Massachusetts and New Hampshire. The new permits will limit the amount of product and the number of heated tanks storing No. 6 oil and asphalt.

Sprague also must install carbon systems to reduce odors from several tanks in South Portland and Quincy, Massachusetts, which also have been the subject of odor complaints from nearby residents.

South Portland’s Clean Air Advisory Committee is concerned that the consent decree doesn’t specifically require Sprague to get an amended air emissions license from the Maine DEP, though it does direct the company “to obtain all (federal, state and local) permits or approvals” required to meet compliance obligations of the settlement.

“The EPA’s complaint against Sprague alleges numerous violations of Maine law, including failures to seek (Maine DEP) permission to make modifications to the South Portland facility,” the committee’s draft comments state. “If EPA agrees that these modifications do in fact require (Maine DEP) approval, then the (settlement) should include a requirement that license be amended.”

The committee also questions the way emissions have been measured at Sprague facilities, whether disputed vapor pressure estimates provide verifiable results and how emissions will be monitored accurately in the future.

“There is enough uncertainty to suggest true emissions data may show that Sprague may be emitting significantly above its calculated levels,” the committee wrote. “The public is concerned about the health impacts associated with elevated tank farm emissions.”

The committee says Sprague should be required to start monitoring emissions immediately, so there will be baseline data to compare the effectiveness of carbon systems in reducing emissions.

Sprague believes restrictions on the amount of product handled at the South Portland facility and the addition of an odor control system “will be effective in controlling odors and VOCs,” Hoch said.

“While we have never exceeded permitted emissions, we regularly invest in systems to further reduce emissions and odors and anticipate doing so in our South Portland facility,” Hoch said. “We expect to work with regulatory agencies in determining the best approach, building on our long-standing track record of being a good neighbor in the communities in which we operate.”

Hoch noted that the EPA doesn’t regulate odors from petroleum storage tanks. Neither does the Maine DEP.

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