State officials say Kleese Development failed to construct proper containment liner

KDA Affidavit

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Affidavit submitted by US EPA Special Agent David J. Barlow under the belief that KDA Inc. knowingly violated the Clean Water Act after failing to report an oil spill.

By Ed Runyan


The Ohio Department of Natural Resources says Kleese Development Associates failed to construct a proper containment liner at its oilfield waste facility on Sodom Hutchings Road.

“Liner integrity was compromised due to this construction issue,” ODNR spokesman Eric Heis said in an emailed response to questions posed by The Vindicator.

The email said the company, known as KDA, submitted plans for a liner, and ODNR approved those plans. But new Ohio regulations have been put into effect that require ODNR officials to inspect sites “during each stage of the construction to ensure compliance with new standards.”

The battery of KDA oil field-waste tanks and their containment pad were about a year old at the time of a spill at the Sodom-Hutchings Road facility last March, according to a newly discovered document that provides details regarding the spill and the criminal investigation into it.

The spill allowed between 2,000 and 8,000 gallons of a “light-end petroleum derivative called ‘drip gas’” to be released into a wetland and a tributary to Little Yankee Run just east of the KDA property, fouling the wetlands, streams and ponds and killing some wildlife.

KDA did not return numerous calls last week seeking comment, and the woman who answered the door at the KDA offices in Warren on Friday said she would relay the message to management.

Heis said the ONDR investigation of the KDA spill has not yet been completed. As cleanup continues, the facility has been “deconconstructed,” and KDA “must remediate the contaminated area.”

The Vindicator asked the ODNR for more information on the liner after learning a U.S. EPA investigator concluded in April a missing liner was blamed for the spill.

David Barlow, special agent with the federal EPA, submitted an affidavit to a federal court judge that contained a review of the evidence collected by state and federal officials up to that point into the cause of the spill.

Barlow presented his findings to substantiate his request for a search warrant to allow investigators to collect a cellphone, documents, emails, computer records and storage devices from the KDA offices in Vienna and downtown Warren. The warrant was approved, and the search took place April 28.

In the affidavit, Barlow said he had probable cause that KDA’s negligence caused the spill and that the company tried to hide it rather than report it to officials, as required by federal law.

According to federal court records, no charges have been filed against the company, whose Vienna injection wells were shut down after the spill and have not reopened.

The company operated five injection wells at the site at the time. Such wells inject oilfield waste, sometimes called brine, deep underground as a method of disposal. The waste comes from oil and gas drilling operations. The company still has injection facilities on U.S. Route 422 in Warren Township.

The affidavit says the containment system in place in Vienna did not prevent oil from leaking from the site and suggested that was because no liner had been installed under a concrete containment pad, as required.

KDA employees told Kurt Kollar, on-scene coordinator for the state Environmental Protection Agency, that about 10,000 gallons of petroleum spilled from the holding tanks during maintenance work by a company separate from KDA on the tanks in mid-March, according to the affidavit.

Between 2,000 and 8,000 gallons of the light waste oil was released by the spill, the affidavit said. The state EPA referred to the spill as 2,000 gallons or more of “light waste oil” in the days just after the spill was discovered.

The affidavit said Kollar viewed the oily release in the wetlands and creek April 2 and learned from KDA employees that it had come from the KDA site sometime in March, “approximately two to three weeks prior to Kollar speaking to the employees.”

Neighbors noticed oil and first reported it to agencies such as the Ohio EPA on March 30, the document says. The oil killed wildlife and produced a sheen on two ponds owned by people living east of the KDA site.

The document says Barlow’s review of documents filed with the ODNR, which manages the oil and gas industry in Ohio, showed that the north KDA holding-tank “battery” consisted of tanks within a “containment,” which is supposed to be an impermeable-lined concrete pad with cement and earthen dikes around it to inhibit the release of any liquids resulting from tank failure, leaks or spillage.

The KDA facility had two almost identical tank batteries, both approved by ODNR, the affidavit says.

Steve Ochs, an ODNR inspector, told Barlow that a liner “should have been installed under the concrete base [floor] and dike berms,” but “to date, there is no evidence that a liner was installed under the concrete base of the containment.”

Another ODNR official, geologist Andrew Adgate, showed Barlow a document in ODNR files indicating the tank battery that leaked was supposed to have a 30-millimeter liner under the concrete.

“The fact that [oil] migrated from the containment at the KDA facility reveals that the containment was not impermeable,” Barlow wrote.

Ochs told Barlow when he first arrived at the KDA site April 2 that he found an oil-absorbent material called Peatsorb being used in an oily swale on the KDA property. Later excavation of the swale revealed a drain pipe below it “that conveyed the oil to the wetlands across Sodom Hutchings Road.”

But “KDA representatives denied knowledge of a release of product or even how Peatsorb came to be deployed in the swale,” Barlow said.

KDA reported the spill to the Ohio EPA after the state agency arrived at the site, the affidavit said.

Furthermore, there was evidence that KDA probably knew oil was leaking from the containment because of a sump that is supposed to pump liquid that leaks from the containment back into the tanks.

The sump was full of a light-end oil product when ODNR checked it shortly after arriving for the spill, and KDA indicated the sump is checked daily, Ochs told Barlow.

Ochs said his agency was able to determine through dye tests the oil spilled in the north tank battery, “easily migrated under the dike wall to an underground gravel layer on top of a clay layer, where it flowed to agricultural field drainage tiles. The field drainage tiles empty to a culvert which, in turn, discharges to the swale,” the affidavit said.

Among the items seized from the KDA offices were records associated with the company’s closed-circuit video-security system, computers, and the cellphone of Matt Kleese, then-field operations manager for KDA, and all correspondence involving Kleese’s email account and the company’s email account.

Phil Pegg, a Vienna Township trustee, said the information in the affidavit makes him wonder why ODNR inspectors didn’t know that a protective liner may not have been installed as it was supposed to be.

“What is the follow-up to make sure they do this?” Pegg said, adding it makes him wonder whether liners were properly installed at other injection wells in the state. “I think the ODNR should be directed to check to make sure every liner is in place,” Pegg said.

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