Sunoco 2011 Annual Report Download - page 37

In September 2010, Sunoco, Inc. (R&M) received a Proposed Administrative Order and Consent Agreement
(“AOCA”) from AMS alleging violations of Title V permit requirements and/or state and/or federal air
regulations at Sunoco’s formerly owned and operated Frankford chemicals plant, and proposing a penalty in
excess of $100 thousand. Sunoco proposed a modified AOCA and penalty to AMS in October 2010 and the
matter remains pending. (See also the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2010.)
The Massachusetts Attorney General’s Office (“Attorney General’s Office”) issued a Civil Investigative
Demand against Sunoco for alleged failure to disclose insurance policies that may have covered costs submitted
for reimbursement to the Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund (“Fund”).
The Attorney General’s Office claims that Sunoco failed to disclose that it received a settlement from its insurers
related to Massachusetts service stations which also were allegedly reimbursed by the Fund. The Attorney
General’s Office is seeking reimbursement from Sunoco of an amount in excess of $100 thousand. Sunoco has
reached an agreement in principal with the Attorney General’s Office and the Massachusetts UST Fund to settle
the investigation and claims with regard to Massachusetts and the final terms are being negotiated. North
Carolina is conducting a similar investigation through the North Carolina Department of Justice and has offered
to settle the matter. Further, the states of Florida, Michigan, Minnesota, Missouri, Pennsylvania, Ohio, Oklahoma
and South Carolina are conducting investigations. These states are represented by private attorneys. The litigation
is in its early stages and an estimate of the outcome or any potential liability cannot be estimated at this time.
However, the Company intends to defend itself with regard to any claims in this matter. (See also the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2010.)
In March 2011, the PADEP proposed a Consent Order and Agreement (“COA”) in excess of $100 thousand
alleging that Sunoco had exceeded effluent limitations at its Girard Point wastewater treatment unit on several
instances between March 2009 and January 2011. In June 2011, Sunoco and the PADEP reached an agreement
wherein Sunoco agreed to pay a civil penalty totaling $400 thousand to resolve the matter. This penalty was paid
during the third quarter of 2011. (See also the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2011.)
In March 2011, AMS proposed a COA in excess of $100 thousand alleging that Sunoco had failed to obtain
installation permits for several diesel engine sources at its Philadelphia refinery. In April 2011, AMS and Sunoco
reached an agreement in principle to resolve the matter for a total payment of $300 thousand. An appropriate
consent order and agreement is currently being negotiated between the parties. (See also the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011.)
In September 2011, Sunoco and the EPA entered an Administrative Settlement Agreement wherein Sunoco
agreed to pay a civil penalty in the amount of $695 thousand to resolve allegations relating to gasoline detergent
additive requirements at the formerly owned and operated Tulsa refinery. The civil penalty payment was paid in
October 2011 and no other actions are required. (See also the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2011.)
In addition, Sunoco Logistics Partners L.P. (the “Partnership”), the master limited partnership in which
Sunoco is the general partner and owns a 32-percent interest in the Partnership’s limited partner units, is a party
in the following administrative proceedings:
In August 2009, the Pipeline Hazardous Materials Safety Administration (“PHMSA”) proposed penalties
totaling approximately $200 thousand based on alleged violations of various pipeline safety regulations relating
to the November 2008 product release by Sunoco Pipeline L.P. in Murrysville, PA. In December 2011, PHMSA
issued to Sunoco Pipeline L.P. the final order in the Murrysville, PA release which resulted in a penalty of $233
thousand. This penalty has been paid. (See also the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2010.)
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