3

CLAIM SUMMARY / DETERMINATION 

Claim Number: N19045-0002 

Claimant: Kolmar Americas Inc. 

Type of Claimant: Corporate 

Type of Claim: Loss of Profits and Earnings 

Claim Manager: 

Amount Requested: $7,721,982.83 

Action Taken: Denial

EXECUTIVE SUMMARY:

In March 2019, a fire broke out at the Intercontinental Terminals Company tank farm in Deer 

Park, Texas. Several tanks containing chemicals and oil burned and, as a result, released their 

contents. The chemicals and oil then commingled inside the containment area surrounding the 

tanks. After the substances commingled in the containment area, the containment area breached

and the mixture eventually discharged into the Houston Ship Channel (HSC), a navigable 

waterway of the United States. A portion of the HSC was closed because of the release. 

Both the EPA and U.S. Coast Guard responded and it was determined the spill was a release 

of hazardous substances under the Comprehensive Environmental Response, Compensation and 

Liability Act (CERCLA). 

The claimant is a petrochemical, petroleum and renewable fuels company that provides 

services such as financing, logistics, storage, risk management and market intelligence. It seeks 

lost profits of $7,721,982.83 comprised of added costs and expenses, including fines, taxes, 

assessed costs, leased tank rentals; and the inability to access leased property in addition to lost 

revenues, profits, and opportunities. 

The NPFC has thoroughly reviewed all documentation submitted with the claim, analyzed 

the applicable law and regulations, and after careful consideration, has determined that the claim 

is not compensable under OPA and must be denied. 

I. RELEASE OF HAZARDOUS SUBSTANCES, RESPONSIBLE PARTY AND RECOVERY 

OPERATIONS:

Release of Hazardous Substances 

On Sunday March 17, 2019, a chemical fire ignited at the Intercontinental Terminals 

Company (ITC) tank farm in Deer Park, Texas. ITC reported the fire to the National Response 

Center the same day.1

 The EPA Region VI Federal On-Scene Coordinator mobilized to the site.2 

The impacted tank farm included 15 petro-chemical storage tanks that contained a variety of 

different petroleum and chemical products such as: Yubase 6, Gasoline Blend Stock, Yubase 4 

 

1 NRC Report #1240304 dated March 17, 2019.

2 EPA Region VI POLREP #1; EPA Region VI ITC tank fire site profile, available at

https://response.epa.gov/itctankfire (last visited June 4, 2020).

(b) (6), (b)
4

Plus, Xylene, Pyrolysis Gasoline, Naphtha, Base Oils, and Toluene. The fire began in the 

centrally located Naphtha tank and spread to 13 of 15 tanks within the containment area. As the 

tanks were compromised, they leaked their contents creating a mixture of chemical and 

petroleum products within the containment area.3 On March 22, 2019, the commingled 

substances breached the containment area eventually entering Tucker Bayou and the HSC.4 On 

March 23, lab results from the sampling in Tucker Bayou and in Buffalo Bayou found 

exceedances of the water quality levels for benzene and xylene.5

 

The fire, the release, and the response caused channel closures and waterway traffic 

restrictions. 

Responsible Party

Intercontinental Terminals Company LLC (ITC) is the owner and operator of the terminal 

and tanks used to store oil and chemicals, including those that were discharged. The EPA 

identified ITC as a “potentially responsible party” under CERCLA.6 ITC’s facilities were not 

designated as the source of the discharge under OPA. Also, the U.S. Coast Guard has not 

identified ITC as an OPA responsible party. 

Recovery Operations

EPA Region VI and U.S. Coast Guard Sector Houston-Galveston responded. During the 

initial stages of the response, federal and state authorities quickly determined that the release 

involved CERCLA hazardous substances and responded under CERCLA authority.7 EPA

Region VI provided the Federal On-Scene Coordinator (FOSC) who oversaw the response and 

removal operations. EPA exercised pollution-response authority under CERCLA based on 

sampling data indicating a release or threat of release of CERCLA-listed hazardous substances, 

including toluene, benzene, xylene, naphthalene, ethylbenzene and styrene.8

 On March 23, EPA 

delivered an Administrative Order to ITC, requiring ITC to conduct actions to abate or mitigate 

an imminent and substantial threat to the public health or welfare by the discharge or substantial 

threat of a discharge of hazardous substances from the Deer Park facility into or upon the 

navigable waters or adjoining shorelines.9 

 

II. CLAIMANT, RP AND THE NPFC: 

Absent limited circumstances, the Federal Regulations implementing the Oil Pollution Act of 

1990 (OPA)10 require all claims for removal costs or damages to be presented to the RP before 

seeking compensation from the NPFC.11

 

3 Email from CDR to NPFC dated January 22, 2020. CDR was in charge of the CG Incident 

Management Division at Sector Houston/Galveston during the spill.

4 Email from CDR to NPFC dated January 22, 2020.

5 In addition, naphthalene, ethylbenzene, methyl tert-butyl ether (MTBE), and toluene exceeded the TCEQ levels in 

the Tucker Bayou sample; EPA Region VI POLREP #2. 6 EPA Region VI POLREPs #1-#4. 7 EPA Region VI POLREP #2.

8 EPA Region VI letter to ITC attorneys dated September 27, 2019; U.S. Coast Guard Second 80’s Tank Farm Fire 

Product Listing PowerPoint presentation attached to email from MSTC to NPFC dated May 2, 2019

9 EPA Region VI POLREP #2.

10 33 U.S.C. § 2701 et seq.

(b) (6), 

(b)

(b) (6), 

(b)

(b) (6), 

(b)

(b) 

(6) 
5

The claimant presented its costs to ITC.

12 Having not heard from ITC after ninety days, the 

Claimant then presented its costs to the NPFC on January 17, 2020.13 The amounts claimed 

against the Oil Spill Liability Trust Fund (OSLTF) are $7,721,982.83 in alleged loss of profits 

and earning capacity.14

In response to a letter from the NPFC notifying it of the claim, ITC explained why it believed 

this event is properly characterized as a CERCLA release and why it believed it should not be 

liable under OPA.15

 

III. DETERMINATION PROCESS:

The NPFC utilizes an informal process when adjudicating claims against the Oil Spill 

Liability Trust Fund (OSLTF).16 As a result, 5 U.S.C. § 555(e) requires the NPFC to provide a 

brief statement explaining its decision. This determination is issued to satisfy that requirement.

When adjudicating claims against the OSLTF, the NPFC acts as the finder of fact. In this 

role, the NPFC considers all relevant evidence, including evidence provided by claimants and 

evidence obtained independently by the NPFC, and weighs its probative value when determining

the facts of the claim.17 If there is conflicting evidence in the record, the NPFC makes a 

determination as to what evidence is more credible or deserves greater weight, and makes its 

determination based on the preponderance of the credible evidence.

IV. DISCUSSION: 

Under OPA, a RP is liable for all removal costs and damages resulting from either an oil 

discharge or a substantial threat of oil discharge into a navigable water of the United States.18

 11 33 U.S.C. § 2713; 33 CFR 136.103. 12 Letter from Claimant to ITC dated May 24, 2019. 13 33 U.S.C. § 2713(c)(2); 33 CFR 136.103(c)(2) 14 The claimed costs are broken down as (a) demurrage costs of $2,325,807.73 from March 22, 2019 through May 6, 

2019; (b) additional levied taxes by Harris County in the amount of $372,452.00 on Kolmar’s immovable product; 

(c) Inaccessibility to the onshore facility and Kolmar’s leased tanks within the onshore facility in the amount of 

$88,039.36; (d) mitigation costs incurred while utilizing tanks leased from other storage operators to prevent 

additional product from becoming paralyzed in the amount of $660,400.00; (e) inability to receive deliveries of 

product into the tanks leased from ITC that it was contractually obligated to receive, which caused alleged damages 

in the amount of $56,700.00; (f) Inaccessibility to the onshore facility, which allegedly prohibited the claimant from 

loading product out of its tanks causing lost opportunities to make various purchases and sales which resulted in 

alleged damages in the amount of $1,239,000.00: (g) Financing costs of at least $406,258.18; (h) Losses because 

certain product markets were in backwardation prior to the incident, a market condition where the price of a 

commodity’s forward contract is trading below the expected price causing the claimant to experience losses of at 

least $1,273,968.00; and (i) $1,299,357.56 in losses because of the inability to reach and utilize the storage tanks 

that it leased from ITC and another terminal service provider, Vopak Terminal Deer Park Inc. 15 Letter from ITC (counsel) to NPFC dated January 28, 2020. 16 33 CFR Part 136. 17 See, e.g., Boquet Oyster House, Inc. v. United States, 74 ERC 2004, 2011 WL 5187292, (E.D. La. 2011), “[T]he 

Fifth Circuit specifically recognized that an agency has discretion to credit one expert's report over another when 

experts express conflicting views.” (Citing, Medina County v. Surface Transp. Bd., 602 F.3d 687, 699 (5th Cir. 

2010)). 18 33 U.S.C. § 2702(a).
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An RP’s liability is strict, joint, and several.19 When enacting OPA, Congress “explicitly 

recognized that the existing federal and states laws provided inadequate cleanup and damage 

remedies, required large taxpayer subsidies for costly cleanup activities and presented substantial 

burdens to victim’s recoveries such as legal defenses, corporate forms, and burdens of proof 

unfairly favoring those responsible for the spills.”20 OPA was intended to cure these deficiencies 

in the law. 

OPA provides a mechanism for compensating parties who have incurred a loss of profits or 

earning capacity where the responsible party has failed to do so. OPA authorizes OSLTF 

reimbursement to a claimant who has suffered a loss of profits and earnings as a result of an 

incident.21 Loss of profits and earning capacity are defined as,”[d]amages equal to the loss of 

profits or impairment of earning capacity due to the injury, destruction, or loss of real property, 

personal property, or natural resources, which shall be recoverable by any claimant.”22

The NPFC is authorized to pay claims for uncompensated damages that result from the 

discharge or substantial threat of the discharge of OPA oil into navigable waters of the United 

States.23 The NPFC has promulgated a comprehensive set of regulations governing the 

presentment, filing, processing, settling, and adjudicating such claims.24 The claimant bears the 

burden of providing all evidence, information, and documentation deemed relevant and 

necessary by the Director of the NPFC, to support and properly process the claim.25 The 

regulations specifically address what a claimant must show to prove a lost profits claim in 

addition to limiting the compensation available from the OSLTF.26 The regulations specifically 

require proof of lost profits by comparing profits earned in previous time periods with the profits 

earned when the loss was alleged to be suffered.27

OPA defines a “claim” to mean “a request made in writing for a sum certain, for 

compensation for damages or removal costs resulting from an incident.” 28

An “incident” under OPA is defined as “any occurrence or series of occurrences having the 

same origin, involving one or more vessels, facilities, or any combination thereof, resulting in 

the discharge or substantial threat of discharge of oil.”29 

OPA defines “oil” as “oil of any kind or in any form, including petroleum, fuel oil, sludge, 

oil refuse, and oil mixed with wastes other than dredged spoil, but does not include any 

substance which is specifically listed or designated as a hazardous substance under 

subparagraphs (A) through (F) of section 101 (14) of the Comprehensive Environmental 

 19 See, H.R. Rep. No 101-653, at 102 (1990), reprinted in 1990 U.S.C.C.A.N. 779, 780. 20 Apex Oil Co., Inc. v United States, 208 F. Supp. 2d 642, 651-52 (E.D. La. 2002) (citing S. Rep. No. 101-94 

(1989), reprinted in 1990 U.S.C.C.A.N. 722). 21 33 U.S.C. § 2712(a)(4). 22 33 U.S.C. § 2702(b)(2)(E). 23 See generally, 33 U.S.C. § 2712(a)(4); 33 U.S.C. § 2713; and 33 CFR Part 136. 24 33 CFR Part 136. 25 33 CFR 136.105. 26 33 CFR 136.231, 136.233, and 136.235. 27 33 CFR 136.233 28 33 U.S.C. § 2701(14). 29 33 U.S.C. § 2701(14)(emphasis added).
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Response, Compensation, and Liability Act (42 USC § 9601) and which is subject to the 

provisions of that Act [42 USCA Section 9601 et seq.]”.

30

CERCLA defines “hazardous substance” broadly.31 However, the definition of “hazardous 

substance” under CERCLA specifically excludes “petroleum, including crude oil or any fraction 

thereof...”.

32 Further, the definition goes on to exclude “natural gas, natural gas liquids, 

liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such 

synthetic gas).”33 

A commingled spill

Notwithstanding the statutory definitions, a question sometimes exists when the release 

involves a mixture of oil and hazardous substances that have commingled before substantially 

threatening to discharge, or discharging into a navigable waterway, such as the facts in this case.

The analysis of these types of releases must begin by analyzing the purpose of each of the 

statutes and how Congress and the agencies have intended them to apply.

OPA’s legislative history clearly highlights the intent of Congress that OPA liability and, by 

extension OPA claim compensation, only applies to discharges of “oil” and not “oil mixed with 

hazardous substances”. 

The definition [of oil] has been modified... to clarify that it does not 

include any constituent or component of oil which may fall within the 

definition of "hazardous substances", as that term is defined for the 

purposes of the Comprehensive Environmental Response, Compensation, 

and Liability Act (CERCLA). This ensures that there will be no overlap 

in the liability provisions of CERCLA and the Oil Pollution Act.

34

The legislative history of CERCLA likewise is instructive: “The reported bill [CERCLA] 

does not cover spills or other releases strictly of oil.”35 Contemporaneous congressional debate 

further elucidated how it intended CERCLA to apply to spills of oil mixed with hazardous 

substances.36 Both Representative Edgar and Senator Randolph specifically discussed oil slicks 

 30 33 U.S.C. § 2701(23). 31 42 U.S.C. § 9601(14). “Hazardous substance means (A) any substance designated pursuant to section 

311(b)(2)(A) of the Federal Water Pollution Control Act, (B) any element, compound, mixture, solution, or 

substance designated pursuant to section 9602 of this title, (C) any hazardous waste having the characteristics 

identified under or listed pursuant to section 3001 of the Solid Waste Disposal Act [42 U.S.C. 6921] (but not 

including any waste the regulation of which under the Solid Waste Disposal Act [42 U.S.C. 6901 et seq.] has been 

suspended by Act of Congress), (D) any toxic pollutant listed under section 307(a) of the Federal Water Pollution 

Control Act [33 U.S.C. 1317(a)], (E) any hazardous air pollutant listed under section 112 of the Clean Air Act [42 

U.S.C. 7412], and (F) any imminently hazardous chemical substance or mixture with respect to which the 

Administrator has taken action pursuant to section 7 of the Toxic Substances Control Act [15 U.S.C. 2606].” 32 Id. 33 Id. 34 H. R. Rep. No. 653, 101st Cong., 2d Sess.102 (1990).S. Rep. No. 101-94 (1989) (emphasis added). 35 S. Rep. No. 96-848, 96th Cong., 2d Sess. 29-30 (1980) (emphasis added). 36 See, e.g., at 126 Cong.Rec. H11798 (Rep. Edgar) (oil slicks and industrial oil waste); 126 Cong.Rec. S14963 

(daily ed. November 24, 1980) (Sen. Randolph) (contaminated oil slick), and other petroleum products containing 

hazardous substance additives intended to be addressed by the legislation including PCB's in transformer fluid, id. at 
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that were mixed with hazardous materials present on a navigable waterway, with the intent of 

ensuring the final legislation was broad enough to cover these events. By all accounts, it was.

Since the passage of CERCLA, the EPA has promulgated several policy documents 

explaining its position with respect to discharges of oil. Taken holistically and simplistically, the 

policies explain that CERCLA excludes discharges of oil37 but CERCLA could impose liability 

on certain discharges of substances that contain oil in an adulterated form. Because of the 

adulteration of the oil, if released, it would be considered a “hazardous material” not “oil” as 

defined.38 While most of the jurisprudence in this area concerns cases where the EPA is asserting 

jurisdiction under CERCLA and the defendant asserts the “petroleum exclusion” as a defense, 

the decisions discussing the intent and application of CERCLA are instructive to how to analyze 

a commingled spill. For example, one court after reviewing the legislative history of CERCLA 

and analyzing EPA’s policy documents on CERCLA’s application to oil concluded pointedly, 

“the EPA determined that the purpose of the petroleum exclusion was ‘to remove from CERCLA 

jurisdiction spills only of oil, not releases of hazardous substances mixed with oil.’”39

Moreover, the Tenth Circuit analyzed the commingling of petroleum products and hazardous 

materials in the soil and floating in the groundwater beneath an oil refinery.40 In that case, the 

sampling results and expert testimony confirmed that certain soil at the refinery, as well as the 

petroleum plume in the groundwater aquifer beneath the refinery, contained a mixture of 

petroleum and hazardous wastes.41 In holding that the petroleum exclusion did not apply to these 

facts, the court indicated that in order for CERCLA to be inapplicable, the moving party would 

have to had provided testing to show that unadulterated petroleum was the only contaminant in 

the ground water plume. Moreover, the court would have required an expert to opine that the 

hazardous waste did not commingle with petroleum products.42

V. CONCLUSION:

It is NPFC’s determination that if a commingled mixture of oil and hazardous substances 

discharges into a navigable waterway, liability and by extension, claim compensation, for the 

spill does not fall under OPA. The OSLTF is not available to pay claims based on these facts. In 

 

S14963 (Sen. Randolph) and S14967 (Sen. Stafford); dioxin in motor fuel used as a dust suppressant, id. at S14974 

(Sen. Mitchell); PCB's in waste oil, id. (Sen. Mitchell) and contaminated waste oil, id. at S14980 (Sen. Cohen). 37 This has become known colloquially as EPA’s “petroleum exclusion”. 38 Several courts have analyzed whether or not a particular discharge falls under CERCLA or has been exempted 

from CERCLA jurisdiction because of the application of the “petroleum exclusion”. For example, when discussing 

lead in waste oil discharge: “If the lead results from its use as an additive to petroleum products, and was found at 

the level expected of purely petroleum additives, it would fall under the petroleum exclusion and would not be a 

“hazardous substance” for the purpose of CERCLA liability. If, on the other hand, the level exceeded the amount 

that would have occurred in petroleum during the refining process, then the petroleum exclusion would not apply.

Mid Valley Bank v. North Valley Bank, 764 F.Supp. 1377 (E.D. Cal. 1991). See also, e.g., State of Wash. v. Time Oil 

Co., 687 F.Supp. 529 (W.D. Wa. 1988), City of New York v. Exxon, 744 F. Supp. 474 (S.D.N.Y. 1990). 39 Mid Valley Bank v. North Valley Bank, 764 F.Supp. 1377, 1383-4 (E.D. Cal. 1991). 40 Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886 (10th Cir. 2000). 41 Id. 42 Id. at 894. See also, Eastman v. Brunswick Coal & Lumber Co., No. CIV. 95-255-P-C, 1996 WL 911200, (D. Me. 

Apr. 19, 1996)(A truck loaded with diesel fuel (an OPA oil) overturned and caught fire releasing its contents, and in 

conjunction with the fire, hazardous materials mixed with the diesel fuel. This mixture entered the [plaintiffs'] soil 

and groundwater, and ultimately, a navigable waterway of the United States. The court indicated that the petroleum 

exception would not apply and these facts, if alleged and proven, would constitute a CERCLA release.