PHILLIPS OWNS AND OPERATES THE SUBJECT PETROLEUM REFINERY OUTSIDE OF SLC, UTAH. THE REFINERY INCLUDES A SULFUR RECOV- ERY UNIT WHICH EMITS, AS A WASTE, SULFUR DIOXIDE. THE APPROVAL ORDER FOR THIS REFINERY ALSO REQUIRES THE OPERATION OF A CONITNUOUS EMISSION MONITOR FOR SULFUR DIO- XIDE AT THE SRU. THROUGH THE USE OF EXCESS EMISSION REPORTS BASED ON DATE FROM THE CEM, WE CAN SHOW THAT SULFUR DIOXIDE EMISSIONS FROM THE SRU HAVE FREQUENTLY EXCEEDED THE ALLOW- ABLE LEVEL DURING THE PAST THREE YEARS. EPA ISSUED A NOV FOR THESE ALLEGED VIOLATIONS TO PHILLIPS ON 3/6/97. THIS NOV IS A PREREQUISITE TO FILING A COMPLAINT FOR A SIP VIOLATION. WE ISSUED A REVISED NOV ON 8/13/97 IN ORDER TO ADD THE VIOLATIONS FOR WHICH WE DID NOT HAVE DATA IN MARCH. EPA HAS CALCULATED A MIMIMUM PENALTY OF $3,700,000. HOWEVER, THERE IS SOME FLEXIBILITY TO THIS NUMBER.