DHEC not allowed to consider past violations by Kinder Morgan 

A Deficient DHEC: S.C.'s lack of "bad boy" legislation makes it easy to get a permit to pollute

In the month since City Paper covered Kinder Morgan's efforts to expand their Shipyard Creek site in North Charleston, the energy-shipping company has continued to make headlines around the country. On July 24, a pipe break in Burnaby, British Columbia, Canada, forced 50 families from their homes as oil rained over a residential neighborhood. In Portland, Ore., a U.S. senator and a representative have brought new attention to allegations that the company bribed a boat captain to dump 159 pounds of contaminated potash into the ocean to avoid disposal costs, and then heavily covered their tracks when investigations began. The city of San Diego sued the company on Aug. 14 for failure to clean up a fuel leak that has contaminated an aquifer, and on Aug. 25, a natural gas pipeline owned by Kinder Morgan exploded in Rusk County, Texas, lighting up the sky for miles.

Despite ongoing environmental disasters and a history of violating regulations at their Shipyard Creek site, the Department of Health and Environmental Control (DHEC) claims that as long as the company can demonstrate an ability to meet standards in the future, DHEC does not have the authority to deny them a permit renewal or a new permit to expand their coal pile from five to 20 acres.

DHEC formed in 1973 through the merger of the State Board of Health and the Pollution Control Authority and is responsible for everything from restaurant cleanliness to regulating shipping companies worth billions of dollars. "We don't have the flexibility," says Rhonda Banks Thompson, DHEC Bureau of Air Quality's director of the Engineering Services Division. "Our current regulations do not allow us to deny a permit based on a facility's compliance history, including current (recent) or past violations."

At an Aug. 7 public hearing about the permitting process, Thompson cited South Carolina's lack of "bad boy" or "past compliance" legislation as the factor keeping DHEC's hands tied, "so we have to continue to work with the facility."

An Invisible Past

Sen. Phil Leventis (D-Sumter) has submitted "past compliance" bills to Columbia legislators before (most recently in 2001), but the legislation has never left subcommittee discussion, facing stiff opposition from the Chamber of Commerce.

"They (the Chamber) are always the first to cry that this is treating people unfairly, but we've got companies bringing tons and tons of dangerous, hazardous material into South Carolina," says Leventis, who also questions the need to import foreign coal to a country with an abundant supply. "That's commerce if it's done responsibly, but there are plenty coming in who haven't had a history of responsibility. If you can do things and there's no repercussion, then how in heaven's name is there any incentive to manage responsibly?"

S.C. Chamber of Commerce Vice President for Public Policy Otis Rawl says they would support a past compliance if it distinguished between "bad boys" and accidental violators. "We've never seen anything that's been submitted that would not actually penalize businesses that may have made a mistake not on purpose, yet they get penalized the same as a bad actor," says Rawl. "A violation may not be as severe as what the penalty entails, and that's what's always scared us, that it might have been just an incident that wasn't really that bad, and all of the sudden you get stigmatized by that penalty and can't get new permits."

Environmental law attorney Bob Guild feels that companies should be held to the same rule of law as an individual. "If you gave a firearms permit to someone who had committed a firearms crime, you'd be sued for it. If you're a bar owner and you gave another drink to someone who was obviously intoxicated, and they went out and committed vehicular homicide, you can be held responsible," says Guild. "The idea that DHEC can't take into account the evidence that's made available to them about the capacity of a permit application to meet legal requirements shows how toothless this agency is, and reflects a dereliction of DHEC's responsibility."

Guild also asserts that S.C. case law history already allows DHEC the authority to revoke a permit for past compliance failure, and says that the Chamber has used this to write-off "bad boy" laws as unnecessary legislation. "Passing such a law simply clarifies and makes explicit the authority that courts have said DHEC inherently has," says Guild. "They're blowing smoke when they say they're powerless."

The Department of Issuing Permits (and health and the environment)

DHEC's mission statement reads, "We promote and protect the health of the public and the environment," and their 2005-2010 Strategic Plan explicitly recognizes the connection between environment and public health, with the goal of improving both. "Active citizens are catalysts for changes in the health status of their communities," the Plan reads. "DHEC's challenge is to find ways to link our vision and values to the values of people in local communities. We must balance economically sound development with environmental protection and social responsibility."

Since the Aug. 7 public hearing, DHEC has worked with Kinder Morgan to establish a Citizen Advisory Board, currently in the planning stages. An Aug. 24 e-mail from Rhonda Thompson stated that DHEC "plans to follow up on" concerns about the effect of water-borne coal dust on Shipyard Creek seafood and wildlife, and says they'll increase the number of storm water inspections to reduce coal dust runoff, and will review YouTube videos that may document violations. They also promised to set up air monitors around the site, to increase air inspections, and to examine further methods to suppress coal dust from the pile and train cars.

Ken Bonerigo, the citizen who has been videotaping Kinder Morgan's unloading process, says that Thompson also informed him that DHEC would not charge the company with a violation for dumping water on their dock to clean it, documented in his "Midnight Cleanup" video on YouTube. Despite a tenacious apology from KM Regional Manager Arthur Rudolph at the Aug. 7 hearing, accompanied by the assurance that it would never happen again, DHEC now says that the company's permit allows them to "wash their dock and equipment down" after cleaning any spills.

Although Rudolph promised boat owners at the hearing that he'd personally help clean boats at the Cooper River Marina if they were again dusted by "fugitive emissions," Bonerigo documented another such incident on Aug. 17. His videos, available on YouTube by searching "svosprey," depict coal settled not only on top of boats, but also deposited on pilings and in oysters in the water, evidenced at low tide.

Coastal Conservation League Program Director Nancy Vinson fears that problems like this will persist. "You can get a license to pollute in this state, and if you're not doing it very carefully and correctly, you can do serious damage to our air, water, and people, without so much as a background check." She's also concerned about the increase in toxic diesel emissions from the increased number of ships, trains, and trucks that Kinder Morgan's expansion will require. "2,000 studies since 1996 show that particulate matter from diesel emissions is killing us," she says. "We have a serious air pollution problem in Charleston that nobody seems to talk about."

Mike Rove, DHEC's legislative liaison, says that divisions of DHEC handling infectious and hazardous wastes already have statute language allowing them to look at previous performance and feels a general "past compliance" bill would help define their "clear authority." If a bill were to arise again this year, two local politicians have said they'd consider it.

"Just like someone's past behavior is a factor in you formulating a view of their reputation, it's the same thing when you're seeking a permit for environmental matters," says Sen. Chip Campsen (R-Charleston). "In a legal proceeding, if you can establish a pattern of past behavior, the rules of evidence don't permit it as conclusive evidence, but it certainly can be used to establish a pattern. Certainly in an administrative proceeding, that ought to be something that can be taken into account."

Rep. Seth Whipper (D - Charleston) adamantly supports the idea. "That area of North Charleston is almost wrecked," he says. "I'm not at all opposed to business, but they need to be required to be good neighbors. We need to focus on bringing in good strong industries that don't wreck the environment."

Rep. Ben Hagood (R-Charleston) also sees past history as an important aspect of the permitting process and would consider supporting such a bill. "There's got to be a balance in there of whether a violation history is significant enough to warrant the penalty of not being able to be permitted for future operations," he says. "Intentional dumping or discharging, criminal actions and things of that nature are scenarios that would be, but not a minor paperwork violation. There could be a risk of unintended consequences."

(Sen. Glenn McConnell, R-Charleston, and House Speaker Bobby Harrell, R-Charleston, did not return City Paper's requests for comment.)

Actions, not Words

For a "past compliance" bill to succeed in Columbia, it will need careful wording and bipartisan support. "I think that responsible people on the right and the left believe a compliance review process would be a good thing to have," says Sen. Leventis. "Without the latitude it provides, our protection is based on a good 'ol boy system of 'We promise to do it right.'"

Attorney Guild says such a bill would "send a very clear message that South Carolina welcomes clean industry with a demonstrated history of meeting environmental standards," and that without it we're welcoming polluters to a state where they can carry on without retribution. "A permit is a privilege to discharge pollution into the environment and should be subject to revocation for abuse and for failure of past performance," says Guild, also pointing out that permits are subject to an appeal process.

The City of North Charleston's mayor, city council, and affected neighborhood associations have all expressed concern about a coal pile on the Cooper River so large it will be visible from I-26. "You can just call us the 'Coaly City,'" says boater Bonerigo. He and other citizens who came out to DHEC's Aug. 7 hearing made clear their frustration with a Department of Health and Environmental Control that seemed to have little authority to manage their health or the environment.

"DHEC performs two different functions, but the environmental quality control function has always been marginal at best," says Sen. Leventis. "They'll shut you down if you have a chicken house, but if you're dealing in millions of tons of coal, you're pretty much going to get away with whatever you want. It doesn't take many bad apples to spoil Charleston harbor. As a matter of fact, it only takes one."

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