Resource Environmental (RELLC) is a limited liability company formed by five major energy companies for the purpose of providing effective management of multi-party petroleum fuel spills and releases into the environment. Chevron U.S.A. Inc.ExxonMobil CorporationMarathon Petroleum L.P., and Phillips 66 are visionary petroleum product marketers and suppliers that recognize the need for a business process by which financial responsibility associated with common environmental obligations can be determined quickly to promote responsive environmental remediation programs.

Service Station

Our member companies are each committed to environmentally responsible and safe petroleum marketing practices. Each has a rich history of environmental accountability and stewardship. However, environmental responsibility is sometimes complicated by uncertainty when spills or releases of product occur in areas of neighboring assets such as service stations at the same intersection, storage tanks in the same terminal area, or pipelines in the same easement. Early on, the cause or source of such spills or releases into the environment often cannot be determined with certainty. In most cases the companies are able to work together in solving these issues but occasionally the differences and uncertainties cannot be resolved.

Difficulties associated with spills and releases in areas of multi-member operations are more acute when there may be an imminent hazard to human health or the environment. The rapid response capability of RELLC can address the spill or release without regard to “fault” or “liability” and is an attractive vehicle for the member companies in such situations where the source(s) of the suspected release are not immediately known.

The RELLC business model offers an alternative approach when several industry parties are potentially involved in a known or suspected petroleum fuel release. The member companies are provided a means by which environmental protection and remediation programs can be addressed immediately while issues of proportionate financial responsibility are dealt with after-the-fact based on the orderly development of reliable and credible operational histories and technical data at and near the site.

Tank Farm

  • It is an industry response to a potentially difficult issue.
  • It serves to promptly protect people and the environment.
  • It is cost effective with an equitable cost allocation process.
  • It provides its members alternative dispute resolution options including binding arbitration.
  • It provides centralized management of complex, multi party sites.
  • It helps ensure integrated remedies and leverages assets on a regional basis.
  • It provides its members mechanisms to resolve differences in an amicable and efficient manner.
  • It is open to additional membership.

Once a member company places a multi-party petroleum release site with RELLC for management, certain contractually agreed-to management processes commence immediately. These processes have been developed around the following priorities:

  1. Protection of human health and the environment by addressing exposure of the released fuel to people or property as quickly as possible.
  2. Identification and termination of the source or sources of the released product that may be continuing.
  3. Implementation of an integrated and technically sound remedial program as soon as possible and managed on behalf of its Members involved at the site.
  4. Compliance with applicable environmental regulations and requirements as well as meeting common law duties to local constituencies near the site.
  5. Acceleration of the process to closure of the site by removal of technical, legal, and political obstacles among member companies and by meeting or beating regulatory deadlines.

Pipeline Cooridor

Accordingly, once a site comes into Resource Environmental, any required emergency or other rapid response necessary to protect people and property is commenced immediately. Once the site is stabilized, a thorough investigation of the entire project area is begun without focusing narrowly on individual site conditions or considerations. Remedial action plans are developed that are integrated and that optimize any remedial activities that may already be in place. Once the project area is understood and properly characterized from a technical standpoint, a remedial action plan is developed, submitted for approval, and implemented. The initial allocation of the cost of these activities is underwritten only by those member companies involved at the site, which, by pre-agreement, is usually in equal shares. Member companies not involved at the site have no financial responsibilities whatsoever.

Once sufficient technical and historical information is gathered, an interim allocation of proportionate financial responsibility is determined by the board of directors based upon the recommendation of the president. Each member company has one board member and each board member has one vote. Plume delineation, fate and transport modeling, hydrogeology, site histories, historical aerial photography, monitor well data, and mass balance calculations are typical considerations that influence the estimate of proportionate financial responsibility allocated by the board. These percentage allocations are reconciled at that time and made retroactive to the date the site became a RELLC responsibility. A member company that has over-paid up to the point of the new allocation will receive a refund with interest. The companies that have under-paid up to this point pay in the difference with interest. This percentage allocation remains in place until such time as new data would justify yet a different percentage allocation. Ultimately, there will be a final allocation after all knowable facts are available to all parties and a final reconciliation is made by the board.

If, at any step of the process, a member company disagrees with any aspect of the RELLC’s management of the site (remedy selection, budget control, percentage allocations, etc.), its exclusive remedy is binding arbitration. If arbitration about any matter is requested, the RELLC staff will facilitate the arbitration arrangements and ensure that it is conducted in accordance with contractually agreed terms. Binding arbitration of disputes also ensures that litigation between and among member companies is obviated and allows them to focus on the environmental issues at hand.

Overall, the members of Resource Environmental believe this business model is an attractive viable approach for managing such joint environmental responsibilities. The RELLC processes foster environmental stewardship and minimizes disputes, delays and ineffective remedies. It is an approach that works more effectively with the environmental regulators, neighbors, and the companies themselves.