The state of California and Bay Area air regulators are trying to shut down a La Honda oil refinery they say has been illegally operating without a permit for 16 years and spewing potential pollution into the air and water.
The state and the Bay Area Air Quality Management District claims that Costa Loma Limited Corporation and owner James M. Wilkinson have never had a valid permit and missed numerous deadlines to become compliant with standards to qualify for legal operations. The suit filed last week in San Mateo County Superior Court orders Wilkinson to cease operations and threatens hundreds of millions of dollars in civil penalties for every day Costa Loma has been in violation of air district regulations.
Wilkinson said he wants to be in compliance but is stifled by red tape and a two-year battle with leukemia which has left him without the energy to do the needed work.
In addition to shutting the doors, Wilkinson also faces hefty civil penalties of up to $129.962 million.
The potential fines are “a joke” because the company, which produces about a barrel a day, is making no substantial money and will be even more hard-pressed to become compliant when saddled with those costs, Wilkinson said.
Wilkinson said he isn’t sure what the future holds for his company and the suit but that he plans to shut down, get well and figure out the funding to become compliant which he ballparks at about $100,000.
The Costa Loma crude oil production facility in La Honda has operated since January 1997 and includes seven crude oil wells, two injection wells, a 1,000-barrel capacity crude oil production and storage tank and two natural gas fired internal combustion engines.
The facility emits air pollution by the extraction process and creates crude oil, produced natural gas and produced contaminated water which is why an air pollution control officer must give written permission to operate, according to the air district’s suit.
Wilkinson said the lease dates from the 1950s and never required any permitting until the Bay Area Air Quality Management District formed. Until then, Wilkinson said he thought he was in compliance with other governmental divisions regulating oil and gas but about five years ago he was informed about being out of compliance with the state.
“There was all this stuff they wanted to assess, saying you need this and you need that. They’re treating us like we’re Chevron,” he said.
Wilkinson said he paid required fees and began the process but is short of completion.
In December 2009, the district issued a notice of violation for operating the engines, operating the facilities generally and storing organic liquids. In June 2012, the district ordered Wilkinson to get a valid permit or stop.
In January, 2013, the air district again gave Wilkinson until that October to get in compliance or cease operations and later extended the deadline until May 31, 2014. Wilkinson did neither although the suit does note that Costa Loma made some progress.
In February, 2013, Wilkinson submitted a compliance plan to the district and applied that August for a permit. The district issued a preconstrution permit requiring certain equipment be replaced with newer equipment better able to control air pollution emissions.
Wilkinson, who said he was in the midst of cancer treatments, did not meet the Oct. 31, 2013 deadline and asked for more time. After the May deadline passed, Wilkinson continued operating which led to the suit filed last week.
“We’ve been trying to keep it alive and now that we’ve gone past the date they’re saying it really doesn’t matter that you’re not well. We have our guidelines and laws and give you enough time so now we’re going to sue you,” Wilkinson said.
A case management conference is scheduled for Nov. 5.
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