Oil Tank Biz Settles Fake-Inspection Case For $2M

An oil tank operator in New Haven’s industrial port has agreed to pay $2 million to settle a state lawsuit that accused the company of falsifying inspection reports and undertaking construction and demolition without pulling the proper permits.

State Attorney General William Tong, state Department of Energy and Environmental Policy (DEEP) Commissioner Katie Dykes, and Mayor Justin Elicker announced that settlement Tuesday morning at a press conference held on the second floor of the Canal Dock Boathouse on Long Wharf.

The proposed settlement — now before a state judge for final approval — would resolve the state court case Katherine Dykes v. Pike Fuels.

That lawsuit accuses Pike Fuels, formerly known as Gulf Fuels, of flouting the state’s clean-air law and other Connecticut environmental regulations in its operation of a bulk petroleum distribution terminal located at 500 Waterfront St. in the Annex.

To quote directly from the eight-page proposed settlement, DEEP accused Pike of the following: 

• Failure to inspect Tanks 101 and 111, as well as other inspection and reporting requirements, including failures to maintain logs and records under regulatory requirements and the terms of permits issued by the Department;

• Failure to notify the Department prior to refilling, repairing, and altering various tanks at the New Haven Terminal;

• Demolition of internal floating roof tanks in 2019 without providing notification at least ten working days prior to the demolition, and without conducting an asbestos survey prior to the tank demolition;

• Falsification of monthly leak inspection records for at least two years, with no evidence that the inspections actually occurred;

• Construction of a new tank at the New Haven Terminal without first obtaining a New Source Review Permit pursuant to Regs. Conn. State Agencies § 22a174-4a (a) (2) (D).

The Nov. 5 lawsuit in this case goes into further detail as to how Pike allegedly doctored its inspection documents.

According to that legal complaint, Pike Fuels is required to conduct ​“monthly audio, visual and olfactory leak inspections of the gasoline loading equipment and to maintain records of such operator inspections” per state law. It’s also required to conduct monthly visual inspections of the internal floating roofs (IFRs) and ​“associated seal systems.”

In September and October 2021, during a routine inspection by DEEP’s Bureau of Air Management, state inspectors found that only three out of 24 monthly leak inspection records for the years 2019 and 2020 ​“appeared to be genuine and complete records.”

“Examination of the twenty-one remaining records revealed multiple indications of fabrication and falsification including but not limited to discrepancies and inconsistencies with alleged inspection dates, inspection observations, and operator signatures,” the lawsuit continued. ​“None of the twenty-one remaining records are genuine and complete but reflect nearly two years of falsified reports maintained by Pike Fuels.”

During Tuesday’s press conference, Tong and Dykes made clear that claims in this now-settled lawsuit do not pertain to leaks. ​“We did not document excess emissions,” Dykes said. Rather, this is about such flagrantly ​“doctored” reports that, as Tong put it, ​“we don’t know” if there were leaks or not.

The proposed settlement would assess $1.2 million as a ​“civil penalty” against Pike Fuels. The company then agreed to pay an additional $800,000 towards ​“Supplemental Environmental Projects,” including:

• $100,000 for a project ​“supporting first responders in New Haven,” as selected by the DEEP commissioner in consultation with the city;

• $100,000 for an ​“environmental justice project in New Haven” which shall ​“support and mitigate environmental impacts of continued operations” at the site;

• $400,000 for DEEP’s Transportation Emission Mitigation & Community Air Quality Monitoring Projects ​“to implement and administer emission mitigation and monitoring projects”;

• $100,000 for DEEP’s Pollution Abatement and Enforcement subaccount to fund air and water quality ​“monitoring, modeling, researching, analyzing, and/or taking other action”;

• $100,000 for the attorney general’s Consumer Fund, ​“to be used for consumer complaint resolution, consumer protection training, investigation, enforcement and/or litigation matters.”

A representative from Pike Fuels did not reply to a request for comment by the publication time of this article.

According to the state’s original lawsuit, Pike Fuels, under the name Gulf Oil, stored and distributed oil at this 500 Waterfront St. site from 1988 until 2024. In April of this year, a firm called Global Partners Limited Partnership ​“took over ownership and operational control of the Terminal.”