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Enron Mail |
Steve:=20
Mike Terraso asked me to send you some information relating to the timing a= nd the potential process of the Clean Water Act Section 308 information req= uest sent from EPA Washington to Enron Corp. As Mike likely mentioned, the = request seeks information regarding "discharges" and "releases" of "oil" fr= om pipeline facilities since July 1998. Although the information request wa= s addressed to Enron Corp., we believe the EPA's focus should be on the EOT= T pipeline system. We shared these and other thoughts with the agency when = we met last week in Washington D.C. We hope to hear back from EPA soon rega= rding clarification/resolution of several issues discussed during the meeti= ng (e.g., whether a response solely from EOTT is sufficient at this time). = =20 TIMING -- Enron Corp. received the information request on July 7, 2001. We = requested and received a 90-day extension from the agency, thereby making o= ur response due on November 7, 2001. The agency likely will require a consi= derable amount of time to review our response because we will report a fair= ly significant number of discharges/releases, which will be accompanied by = a large number of responsive documents. It is unlikely that the agency will= begin a serious review of our response until sometime following the 2001 h= oliday season. Based on our meeting in Washington, we do not expect a quick= response in 2002 because the Water Enforcement Division has an extremely b= usy agenda and a small staff, which likely will preclude them from focusing= solely on our response. In addition, we know that the agency sent out a si= milar information request to the Williams Companies. Thus, we do not expect= a response from EPA until late spring-mid summer of 2002 at the earliest. PROCESS -- After we submit our response to the information request, EPA cou= ld respond in several ways: (1) The agency could request a meeting to discuss the materials submitted o= n November 7, 2001 or send out another request seeking additional informati= on. We will be prepared to respond to any such request. (This is a fairly l= ikely scenario) (2) Either before or after requesting additional information, EPA could iss= ue a notice of violation and begin some type of administrative enforcement = action. This could take the form of a compliance order and administrative c= ivil penalty (all internal to the agency) or a consent decree with an order= entered by a federal court. An order could include a fine, required pipeli= ne maintenance activities, and/or stipulated penalties for future discharge= s or releases. Although the differences with our situation appear to be sig= nificant, EPA recently settled an enforcement action with Koch Industries f= or oil spills from its pipeline system for $30 million. Under an enforcemen= t action, we would attempt to negotiate the terms of the order with the age= ncy and hopefully minimize the size of any proposed fine. We also believe t= hat our actions (principally those of ETS as operator of the EOTT pipeline = system) between now and the time of the agency's response will be helpful i= n attempting to mitigate any fine or course of action proposed by the agenc= y. (This is also a fairly likely scenario) (3) If our response is particularly troublesome to EPA, the agency could tu= rn the matter over to the Department of Justice. Before this scenario would= unfold; however, the agency likely would conduct additional inquiries (e.g= ., more focused information requests and employee interviews). This scenari= o would be most problematic because it likely would unfold only if the gove= rnment (EPA and DOJ) consider the alleged violations extremely serious and = possibly systematic. (Although possible, this is a less likely scenario) If you have any additional questions, don't hesitate to contact me (3-7267)= .
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