Thirty-seven piles of dirt on property owned and operated by Greka Oil and Gas Inc. are at the center of a complaint that could cost the company millions of dollars.

The executive officer of the Central Coast Regional Water Quality Control Board filed an $8.5 million complaint against Greka for what the agency sees as the local oil company’s failure to comply with a clean-up-and-abatement order involving the company’s Northern Santa Barbara County leases, including the Casmalia, Cat Canyon, Santa Maria Valley and Zaca oil fields.

A copy of the complaint dated July 21 was sent certified mail to Greka officials, but a company spokesman said no one had seen the documents yet.

In fact, the company was surprised by the filing because Greka staff were working with state officials on plans to reuse the

material in question on Greka’s property, said company spokesman Robert Emmers.

According to the complaint, staff with the Regional Water Quality Control Board were working with Greka on cleaning and abating the piles of dirt that were compiled after reported leaks at Greka energy sites.

The order was given in December 2006, and according to water board staff, the company repeatedly missed established deadlines to properly test and remove the dirt.

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Water board staff claim that some of the piles of “petroleum-impacted” soil are stored without adequate containment, which could allow contaminated material into nearby bodies of water, including Schmann Canyon Creek, Bradley Canyon Creek and Zaca Creek.

The water board is set to hold a hearing regarding the complaint in Santa Barbara on Oct. 16 and 17 during its regularly scheduled meeting in the Board of Supervisors Hearing Room, 105 E. Anapamu St., fourth floor.

At that time, the board can decide to either affirm, reject, decrease or increase the proposed $8.5 million fine. It also can choose to send the matter to the California Attorney General.

The proposed fine seeks the maximum amount allowed under the state water code, and could grow if the company remains out of compliance, according to the complaint.

“(Greka) also has a significant history of spilling oil and related substances to surface waters, which staff is addressing in a separate action and in coordination with other local, state, and federal agencies,” the document states.

The complaints continues, “This consideration weighs heavily in favor of imposing the maximum liability because (Greka’s) failure to comply with the (cleanup and abatement order) has allowed the continuation of violations that prompted its issuance by the Central Coast Water Board Executive Director.”

In the complaint, water board staff say that tests show that the piles of dirt contain hazardous wastes, but Emmers said a third-party laboratory told Greka officials that the material in question is not hazardous.

“Greka’s Consultants and Greka have been working with regulatory authorities, including the water board, to make use of that material,” Emmers said. “The plan was and still is to use that material, it’s perfect for road base.”

He added that the company intends to use it for roads built within its lease sites.

Malia Spencer can be reached at 739-2219 or mspencer@santamariatimes.com.

July 24, 2008