Furie settles state air quality notices

Bankruptcy judge signs order approving settlement of notices of permit violations for $4,970.51; no admission of fault by Furie

Steve Sutherlin

Petroleum News

Judge Laurie Selber Silverstein signed an order approving a settlement agreement between the State of Alaska and Chapter 11 debtor Furie Operating Alaska LLC regarding alleged violations of Furie’s air quality operating permits spanning from 2014 to 2019. The order was signed March 19 in the U.S. Bankruptcy Court for the District of Delaware.

The agreement will settle matters relating to an Oct. 10, 2019, notice to Furie - as owner and operator of the Julius R. platform in the Kitchen Lights unit - of violation of an air quality minor source specific permit.

It also settles a Jan. 29, 2020, notice alleging that Furie unlawfully failed to obtain a Title V operating permit, and unlawfully certified permit applications as true, accurate and complete, when those permit applications included incorrect and misleading information.

The State of Alaska also said that Furie operated five rented diesel-electric generators on the Julius R. platform for intervals that in aggregate exceeded the 12 consecutive month residence time limit authorized for a non-road engine.

Under the settlement agreement, Furie will pay the state $4,970.51 in lieu of any civil penalties that might otherwise be assessed.

In return, the state agrees to “release and forever discharge Furie from “all civil claims and causes of action” arising from the matter.

Terms of settlement highly favorable to debtors

Furie said that the maximum civil penalty that Furie is potentially liable for if the alleged violations were proven is $100,000 for the initial violation, and up to $5,000 for each day the violation continues.

“As it stands, the settlement agreement proposes to resolve the alleged violations for less than the potential liability for even a single day’s worth of continued violations, without taking into account the potential liability for the initial violation,” Furie said.

Furie said it is also potentially and concurrently liable in a civil action brought by the State of Alaska for the full amount of actual damages caused to the state by any violation, including all incidental administrative costs.

The settlement agreement specifically says that the sum of $4,970.51 is to cover the state’s enforcement costs.

“This means that the settlement amount is no more than a subset of expenses that might otherwise be recovered in a civil action by the State of Alaska, which could include abatement costs, environmental restoration costs, and actual damages, among other things,” Furie said.

The settlement agreement calls for the immediate resolution of the alleged violations, eliminating the need for litigation or administrative proceedings to contest the matter, Furie said.

“Any such actions would be a substantial drain on the debtors’ limited resources and divert attention away from these Chapter 11 cases,” Furie said.

The settlement funds are to be paid to the state within 30 days of approval by the bankruptcy court.