The Washington Department of Ecology has issued one of its biggest fines of the year to a Tacoma fuel oil distributor for letting toxic runoff pollute Commencement Bay.

Ecology on Thursday issued a $112,000 penalty to Associated Petroleum Products, which has a tank farm and distribution facility on the Blair Waterway.

According to Ecology, nearly two years of test results showed higher than allowable levels of certain pollutants – such as benzene, total suspended solids, oil and grease, and zinc – were running off the APP property and into the bay.

APP did not fix the problems, Ecology officials said, despite numerous warnings.

Luke Xitco, Associated Petroleum’s president and CEO, did not deny that discharges exceeded allowable limits, but said his company was doing its best to fix the problem.

“APP takes great pride in the way it conducts its business and its long commitment to the community and the environment,” Xitco said Thursday in a prepared statement.

“We are shocked and disappointed by the Department of Ecology’s conclusion and intend to vigorously appeal the penalty, which we are confident is not supported by the facts and will not stand.”

In conversation later, Xitco said the discharges in question were from a new facility constructed seven years ago and used primarily to store biodiesel fuel.

APP voluntarily took monthly samples and regularly sent them to Ecology, he said.

Xitco said he was surprised by what he regards as a suddenly aggressive approach by the DOE. He believes the fine was unwarranted, given his company’s demonstrated willingness to cooperate.

APP had been doing everything it could to reach compliance, he said, and was seeking more help and advice from the state agency.

“In 2007 we had some levels that were slightly higher than the thresholds,” he said. “We immediately contacted the Department of Ecology for assistance. They came down on several occasions, reviewed our procedures and said, quote, ‘“You are doing everything correct.’”

Xitco said the DOE did let him know that the samples were not clean enough, but did not warn him about the fine.

“We were sending them all the information voluntarily and were looking for guidance,” he said.

Ecology spokeswoman Kim Schmanke said that was not the case.

“A penalty is always a last resort for Ecology,” she said. “We always approach working with businesses collaboratively to help them meet their permit requirements.

“That was the same in this situation, where we offered the company technical assistance to understand and meet their storm water permit requirements.”

In 2001, Associated Petroleum was fined $47,000 by the Department of Ecology for spilling nearly 500 gallons of fuel oil into Lynch Creek, a salmon-bearing stream in Eatonville.

The company ended up paying just $14,000 in penalties, after agreeing to a negotiated settlement requiring it to install electronic overfill alarms at the Eatonville site and to train employees to properly respond to spills.