Judge begins deliberations over ex-refinery owner’s groundwater contamination liability

(Credit KUAC file photo)

A judge has begun deliberation of a lawsuit filed five years ago by the State of Alaska against a former owner of the North Pole Refinery. The state seeks tens of millions of dollars from Williams Alaska Petroleum for contaminating the area’s groundwater and to help pay for cleanup and expansion of North Pole’s water system.

State Assistant Attorney General David Wilkinson said during Tuesday’s closing arguments that the North Pole Refinery released hazardous substances like benzene and perflourochemicals like PFOS while it was owned by Williams Alaska Petroleum from 1977 to 2004, when it sold the facility to Flint Hills Resources Alaska.

But most of Tuesday’s proceeding focused on releases of sulfolane, beginning in 1985. Williams official admits those releases, but Wilkinson says the company denies responsibility for groundwater contamination they’ve caused.

“For nearly a decade, Williams has evaded responsibility for this contamination,” he said.

Wilkinson cited testimony that suggest the extent of the so-called plume of sulfolane contamination in the groundwater had since grown dramatically.

“Three and a half miles long, two miles wide and 300 feet deep in some points,” he said. “It’s enormous.”

Flint Hills attorney Jan Conlin said testimony and evidence shows Williams is trying to evade responsibility by blaming everyone but itself for the groundwater contamination.

“They blamed the state,” she said. “They blamed the City of North Pole ⁠— or at least attempted to. They certainly blamed Flint Hills. And they blamed the folks in the North Pole community, who don’t want to drink an industrial solvent in their water.”

Conlin sat with the state’s attorneys to represent Flint Hills’ interests in the case, which originated from a lawsuit by the City of North Pole in 2014. The three-week trial that ended this week was the second involving the two former refinery owners. In 2016, the state Supreme Court ruled against Flint Hills’s claims that Williams shared liability for the sulfolane contamination.

Tuesday, Conlin said testimony showed sulfolane had spread into groundwater beyond the refinery property when Williams sold the facility. But she said Williams didn’t tell Flint Hills about it, as the deal required.

“Williams has sat on the sidelines and done nothing,” she said.

The state and Flint Hills both claim Williams owes them for the cost of dealing with the contamination. Wilkinson says the company owes the state just over $4 million. Conlin says Flint Hills has paid more than $138 million dollars since 2009, when the company announced it had discovered the plume had spread beyond the refinery property. She says Williams should’ve paid about 83 percent of that cost.

But lead Williams attorney David Shoup turned the arguments around and said it was the state and Flint Hills that allowed the contamination to spread.

“Flint Hills didn’t do anything to stop it from leaving the site,” he said.

Shoup says Williams included incentives in the purchase deal that were intended to motivate Flint Hills to immediately begin dealing with the contamination, with measures such as drilling recovery wells to extract contaminated water. He says the deal also included funding to pay for those measures.

“The incentive structure was ‘Do something about it, do it right now, and you’ve got insurance to cover that,’” he said. “And so if all they had done was use that $44 million to drill recovery wells, I don’t think we’d have a problem today.”

Shoup faulted the state Department of Environmental Conservation for failing to set a cleanup level that would dictate how much of the contaminant Williams would’ve had to remove. And he says the state Department of Health and Human Services further confused the issue by changing the limit on how much sulfolane people can be exposed to without endangering their health.

“The DHSS studies are pretty clear that no one is going to get sick from drinking sulfolane” in their water. “There’s no evidence to the contrary here.”

Because of that, Shoup questioned the need for and cost of the North Pole water system expansion.

After the closing arguments ended, Justice Warren Matthews said he’ll issue a ruling before Christmas.

Tim Ellis is a reporter at KUAC in Fairbanks.

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