Royal Farms has agreed to pay a $600,000 penalty for fuel leaks at two of its Maryland outlets and to check dozens more for possible problems, the state Department of the Environment said.
The Baltimore-based convenience store chain, in a settlement that heads off court action threatened by state regulators, pledged to conduct a "comprehensive audit" over the next two years of underground fuel tanks and piping at 70 other stores and take prompt action if groundwater contamination is found or suspected.
In a consent order signed in January but released late last week in an overview of enforcement actions, state environmental officials said that in investigating leaks at stores in Rosedale and Cecil County they found evidence that company employees had missed warning signs of leaks and had not installed or properly tested all the equipment the state requires at service stations to prevent and detect fuel leaks.
The Rosedale leak was found in December 2009, according to a fact sheet posted online by the Department of the Environment, when residents of a home on Chesaco Avenue near the store called the Baltimore County Fire Department to complain of gasoline odors. Emergency responders found fuel pooling in the home's basement sump pump, and investigators determined that about 5,400 gallons had leaked over several months from the store's underground tanks.
"Finding gasoline in a neighbor's sump pump, that would have been a disaster if it had gone to an explosion," said Horacio Tablada, who manages the MDE division that regulates fuel storage.
Royal Farms agreed in 2011 to pay $2.7 million to settle the family's claims that the gas had contaminated their home, according to a Maryland Court of Special Appeals opinion in a related case. The company is in litigation with a New Windsor firm it hired to maintain and monitor its underground fuel system.
The second leak was detected in 2011 in a monitoring well on the grounds of a store in North East, prompting the state to notify all property owners within a half-mile of the establishment. Royal Farms is pumping and treating the groundwater, while state officials monitor the wells of five homes near the store where low levels of chemicals found in gasoline were detected. Carbon filters have been put on wells with levels that warrant treatment, said Christopher Ralston, who oversees the MDE's oil-control program.
Issues raised by the two cases prompted the state to press Royal Farms to do a thorough review of its leak-prevention and detection systems at its stores selling fuel, officials said. Employees at the Rosedale store evidently did not heed discrepancies in fuel inventory records that might have alerted them to the leak, Ralston said, while the North East store did not have double-walled underground piping required by the state to reduce the risk of leaks.
The company subsequently disclosed that it had spotted discrepancies in fuel inventory reports at four other stores, Ralston said.
"We're concerned with the conditions and status in the other places, and we wanted them to do detailed audits," Tablada said.
The company's lawyer, Jonas Jacobson, said Royal Farms chose not to contest the state's allegations, even though in the settlement it did not admit any wrongdoing.
"It's part of their whole corporate philosophy of being responsible on environmental issues," Jacobson said. Company executives "want to raise the bar and lead the industry in both technology and management of fuel stations," he said.
Jacobson said the Rosedale leak apparently stemmed from a bad valve. He said the source of the Cecil County leak has never been identified but contamination has "pretty much" been contained to the store property.
The fuel inventory discrepancies found at other Royal Farms stores do not necessarily mean that gasoline has leaked, Jacobson said. And he said the company had been told by a consultant that the piping it bought was double-walled.
Under the settlement, the company is to pay the fine in three installments over the next two years. The MDE agreed not to fine Royal Farms if its audit of other stores turns up defective equipment or other violations of state regulations unless additional leaks are detected. The company would be required to fix those and could face penalties of up to $5,000 per day if it fails to meet the terms or deadlines in the settlement.
Royal Farms, which describes itself on its website as "Real Green" as well as "Real Fresh" and "Real Fast," won an award last year from the Maryland chapter of the U.S. Green Building Council for energy-efficient and environmentally friendly new store designs. It also is a member of the state's Green Registry, a program created by the O'Malley administration where businesses and organizations can declare their devotion to the environment.
Jacobson said the company agreed to check its other stores to give the state assurance that they have the required safety equipment and safeguards against leaks. He noted that Royal Farms hired an environmental manager to oversee its fuel sales operations about a year and a half ago.
"Royal Farms has pretty state-of-the-art systems that they put in place, and over time they've been upgrading some of the older stores with new technology as well," Jacobson said.