U.S. EPA MAY FILE A PROOF CLAIM IN THE RESERVE MINING BANKRUPTCY PROCEEDING IN THE SOUTHERN DISTRICT OF NEW YORK. EPA IS SEEKING TO RECOVER MONIES EXPENDED WHILE CONDUCTING A RI/FS AND DEVELOPING A ROD AT A SITE WHERE RESERVE WAS A MA- JOR GENERATOR. THE PROOF OF CLAIM ALSO SEEKS THE COST OF IMPLEMENTING THE ROD. RESERVE MINING FROM ABOUT 1960 TO 1976 SENT 600,000 GALLONS OF WASTE OIL TO ARROWHEAD REFINERY IN GERMANTOWN, MN. FOR RECYCLING. THE RECYCLING PROCESS USED ACIDS TO REMOVE THE METALS IN THE USED OIL. THE RESID- UALS OF THIS PROCESS WERE SPREAD OVER THE AVERAGE BELONGING TO THE RECYCLER. OVER THE PERIOD, 1961 TO 1976, RESERVE MINING COMPANY SHIPPED WASTE OIL FROM ITS HEAVY EQUIPMENT AND ELECTRICAL TRANSFORMERS TO THE ARROWHEAD REFINERY COMPANY (ARROWHEAD) FOR RECLAMATION. RESERVE MINING WAS THE SOURCE FOR MORE THAN 50% OF THE WASTE OIL RECEIVED BY ARROWHEAD DURING THE LATTER'S OPERA6ING LIFE. AS PART OF ITS RECLAMATION PROCESS, ARROWHEAD DISPOSED OF HIGHLY ACIDIC, METAL LADEN SLUDGE IN AN UNLINED 2 ACRE LAGOON ON ITS OWN PROPERTY. BECAUSE OF CONTAMINATION RESULT ING FROM THIS DIPOSAL PRACTICE, ARROWHEAD'S PROPERTY WAS LISTED ON THE NPL IN SEPTEMBR 1983. A REMEDIAL INVESTIGA- TION CONDUCTED BY EPA HAS SHOWN THAT THE SLUDGE FROM THE LAGOON CONTAINS ABOUT 4,600 CUBIC YARDS OF PETROLEUM BASED OILY SLUDGE, CONTAMINATED WITH VARIOUS OR