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U.S. EPA to Greka: Clean up, or pay up

Release Date: 01/29/2008
Contact Information: Mary Simms, 415-760-5419, simms.mary@epa.gov

(1/29/2008 SAN FRANCISCO) -- The U.S. Environmental Protection Agency today
orders Greka Oil and Gas, Inc. to immediately comply with the Federal Water
Pollution Control Act, or face fines of up to $32,500 per day, for each
violation.

The EPA issues this order following recent releases of oil and other
hazardous substances from Greka's Central California facilities, including a
Jan. 5th spill that released more than 50-thousand gallons of crude oil into
the environment.

"This order ensures Greka will fully comply with all federal requirements, or
face steep penalties," said Daniel Meer, Chief of the Response, Planning and
Assessment Branch for the Superfund Division in the EPA's Pacific Southwest
region. "Failure to cooperate will result in serious consequences for this
company."

Per the order, Greka must immediately remove all oil and hazardous
substances released into a tributary of Zaca Creek. Water flows continuously
though this unnamed tributary, downstream to Zaca Creek, through the
Santa Ynez River, and into the Pacific Ocean. Greka must work to clean up
and contain the spill, and prevent further flow from causing additional harm to
the environment. Greka's cleanup must include all petroleum, and petroleum
contaminated media including crude oil, soil, debris, creek water, and
vegetation.

The company must develop work plans, subject to EPA approval, that
detail their strategy to prevent future releases of oil. Greka must also
provide the EPA with a written daily update of their progress.

At the direction of EPA, and with EPA oversight, Greka has been engaged
in clean up efforts at the Zaca Creek spill site since Jan. 5th. The EPA is
issuing this order to ensure that cleanup is completed expeditiously,
comprehensively, and in accordance with applicable laws and regulations.

Recent Spills:

On Jan. 5th, oil and contaminated water overflowed into the secondary
containment of the Davis Tank Battery on Zaca Station Road, but was
compromised by an open 12-inch drainage pipe. The oil and produced water
flowed from the secondary containment tank, and migrated through a Santa
Barbara Co. maintenance yard, a winery equipment storage yard, and
ultimately more than a mile down Zaca Creek.

Greka's Jan. 5th oil spill at Zaca Creek led to routine EPA inspections,
which eventually revealed additional spills at Greka facilities. On Jan 24th,
EPA on-scene coordinators discovered additional hazardous releases at
Greka's Ucal lease on Dominion Road, their Bell lease on Palmer Road, their
Bradley 3 Island facility on Telephone Road, and a re-release at their Davis
lease on Zaca Station Road. At Greka's Bradley 3 Island facility, EPA
discovered Greka discharging oil contaminated water from a facility drainage
basin into an unnamed creek, which is habitat for the tiger salamander, an
endangered species.

The EPA continues to work with members of the California Department of
Fish and Game, the Santa Barbara County Fire Department, the U.S. Coast
Guard's Pacific Strike Team, and Greka Oil and Gas, the responsible party, to
contain and clean up these releases, and prevent further harm to the
environment.

If the public sees oil on their property or in waterways please report it to
911 or the National Response Center's oil spill response hot line at 1-800-424-
8802. Additionally if the public smells hydrogen sulfide or a rotten egg smell
they should report it to 911.

For more information about oil spills and cleanup, please visit: https://www.epa.gov/region09/waste/sfund/oilpp/

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