Port of Port Angeles attorney Brian Wendt, right, explains a settlement agreement with Shell Oil that commissioners Colleen McAleer, left, Connie Beauvais and Steve Burke approved unanimously at Tuesday’s port commission meeting in Port Angeles. (Rob Ollikainen/Peninsula Daily News)

Port of Port Angeles attorney Brian Wendt, right, explains a settlement agreement with Shell Oil that commissioners Colleen McAleer, left, Connie Beauvais and Steve Burke approved unanimously at Tuesday’s port commission meeting in Port Angeles. (Rob Ollikainen/Peninsula Daily News)

Port of Port Angeles settles with Shell Oil on cleanup

Officials to oversee removal of gasoline/diesel-ridden soil at Tumwater Truck Route site

PORT ANGELES — Port of Port Angeles commissioners have inked a settlement agreement with Shell Oil Co. for the cleanup of a contaminated site off Tumwater Truck Route.

The negotiated settlement requires Shell Oil to pay $517,500, or 75 percent, of the estimated $690,000 cleanup at 220 S. Tumwater Truck Route, where Shell operated a bulk fuel facility from 1928 to 1975.

The port will cover the remaining 25-percent share with unspent grant funds from the cleanup of the former K-Ply mill site on the Port Angeles waterfront.

Port officials will oversee the removal of about 3,800 tons of gasoline/diesel-ridden soil at the Shell Oil site to bring the vacant property into compliance with environmental laws.

“This is what I hope is good news for the commission and the public,” port attorney Brian Wendt said in a staff presentation Tuesday.

“The benefits of this agreement from staff’s perspective is it leads to a more streamlined performance of the cleanup.

“The majority, if not the entirety, of the cleanup, as to our 25 percent share, can be funded by [state Department of] Ecology grant funds left over from the K-Ply site.”

Port commissioners voted 3-0 Tuesday to approve the settlement with Shell Oil and to authorize the executive director to execute the agreement.

“We’re zipping right along with our cleanups,” port Commissioner Connie Beauvais said after the vote.

“It’s great to see progress,” Commissioner Colleen McAleer added.

In 1983, the port acquired two adjacent parcels on Tumwater Truck Route that were formerly owned by Shell Oil and Pettit Oil, the latter of which declared bankruptcy in 2014.

Shell Oil removed six above-ground storage tanks, a refueling rack and pump house from its former property in 1984.

“Since 1984, the property has really been underutilized,” Wendt told port commissioners.

Recent environmental studies have shown the Shell Oil site, now a parking lot, is contaminated at levels that exceed the state Model Toxics Control Act. The $690,000 estimate for the cleanup is conservative, Wendt said.

A consultant recommended that the port lead the cleanup if Shell Oil would provide a lump sum payment up front, Wendt said.

“It would be more expedient and efficient from a cleanup perspective if the port took the lead,” Wendt said.

“That was something that Shell was amenable to. The parties negotiated kind of a cost-sharing methodology, and that cost-sharing methodology is really the core of this settlement agreement.”

If the cost of the cleanup exceeds 10 percent of the $690,000 estimate, Shell would pay the port 75 percent of the difference between actual costs and $759,000.

If actual costs are less than $621,000, the port would reimburse Shell Oil 75 percent of the difference between $621,000 and actual costs, according to a memo to port commissioners.

The 75-percent, 25-percent cost share does not establish precedence for future cleanups, Wendt told the commission.

“This was just something that the parties negotiated in this specific case only,” Wendt said.

The port is liable for the estimated $300,000 cleanup of the Pettit Oil site near the Shell site. That cleanup also will be funded by the $588,000 remaining in the K-Ply grant from Ecology, Wendt said.

“After a portion of that $588,000 is used for the Shell site to pay for our 25 percent, there’s still sufficient money there to go and clean up the Pettit Oil site, for which the port would be 100 percent liable for that cleanup,” Wendt said.

“Finally,” Wendt added, “the port is able to further demonstrate its commitment to cleaning up its properties as a responsible environmental steward, as well as helping to return properties to productive use for the benefit of the local economy.”

In other port news, Commissioners Steve Burke, Beauvais and McAleer unanimously approved resolutions to appoint John Nutter, who is the port director of properties, marinas and airports. the interim port auditor and treasurer.

Melinda Smithson, port director of finance and administration, is leaving her post at the end of next week, she said.

A job description for Smithson’s replacement is being finalized, Nutter said.

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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected].

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