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There is a high risk of a fire at the Navy’s Red Hill Underground Fuel Storage Facility in Halawa, according to Department of Defense budget . The federal agency wants nearly $50 million for the 2015 fiscal year to make improvements to the facility’s fire suppression and ventilation systems.

“The existing underground fueling facility at Red Hill has inadequate fire protection infrastructure and communication system,” the DOD says in a request for funding for the upcoming fiscal year. “Fueling operations in the underground complex create high potential for fire incident.”

But Navy officials last week  denied that there was a significant risk of a fire at Red Hill. A Navy environmental program director dismissed the threat of fire during a meeting of the , a nine-member committee comprised of government officials, the Navy and community leaders convened by the Legislature to discuss safety issues at the facility.

Red Hill has been in the news since an estimated 27,000 gallons of fuel leaked there in January. Government agencies have been scrutinizing the threat that leaked fuel poses to Navy and county drinking water supplies.

Military officials are debating whether to even continue operating the facility that supplies much of the military’s Pacific fleet.

But the massive 70-year-old underground tanks and tunnel system apparently pose a liability that extends beyond what city officials warn is their potential to contaminate one-quarter of urban Honolulu’s drinking water supply.

The 18 operating tanks at the facility hold enough fuel to fill about 340 Olympic-sized swimming pools.

Steven Onoue, a task force member and president of the Moanalua Valley Community Association, asked about the risk of a fire at the facility, noting that there’s a subdivision of some 610 homes near by.

The Navy’s task force member responded that any risk of a fire at the facility is minor.

“Arguably, the chances are remote to none,” said Aaron Poentis, environmental program director for Navy Region Hawaii. “However, we exercise and implement all of these contingency plans specifically to mitigate that potential.”

After the meeting, Civil Beat asked Poentis about the recent Department of Defense  that show the DOD wants $49.9 million to to make improvements at the facility because of its fire risk.

Poentis reiterated that the “risk continues to be low” and the possibility of a fire “remote.”

Later, Poentis emailed a statement to Civil Beat stating the Navy has safety plans in place that greatly reduce the risk.

“All fuel facilities, including gas stations, present elevated risk which is why one might see ‘no smoking’ signs in the area,” Poentis wrote. “I spoke to the careful operation of the facility that reduces those risks greatly, and the training and contingency plans in place to further mitigate that risk.”

Navy spokesman Agnes Tauyan later noted that Red Hill’s fire suppression system has been significantly improved over the past decade.

But the DOD , dated March 2014, provide a sharply different assessment, stating that there is an elevated risk of a fire at the facility, that the facility’s fire protection system is inadequate, that the unique nature of the facility would make a fire hard to contain and that the situation threatenss the safety of Red Hill personnel.

To improve fire safety at the facility, the Defense Logistics Agency wants $49.9 million for the fiscal year beginning in October, with work to be completed in September 2017.

“Fires involving fuel are extremely difficult to extinguish,” the DOD budget request says. “This is even more so in the underground tunnels of the Red Hill tank farm because of the confined spaces. Also the ventilation within the tunnel as well as the remote location and inadequate fire protection infrastructure external to the tunnel make this high risk operation.”

If the funding is not appropriated, workers and the facility will continue to be at risk, according to the documents.

“If this project is not provided, personnel, infrastructure, mission support capability, and DOD property will continue to be at unnecessarily elevated risk,” the documents state. “The high potential for fire incident and long egress distances coupled with inadequate fire protection, alarm, containment, communications, emergency power, and ventilation systems will continue to create a hazardous environment for all personnel in the Red Hill tunnel complex.”

Navy spokesman Tom Clements said that the 2015 fiscal year budget has not been finalized and no work has begun on the improvements.

Clements said by email that “the document you reference is a funding justification, not a planning document. The purpose of the document you reference is to secure monies in a competitive budget environment.”

He didn’t respond to a question about whether a fire would pose a risk to nearby homes.

The price tag for improving Red Hill’s fire protection system could end up being relatively small compared to other investments that the Navy may have to make in the coming years if it wants to keep the facility open.

A rendering of the underground Red Hill tanks.

Honolulu Board of Water Supply

The Hawaii Department of Health and U.S. Environmental Protection Agency are currently in negotiations with the Navy to upgrade its leak prevention and detection systems. This could include requiring the Navy to double-line all of its tanks, each of which is big enough to encompass Aloha Tower — something that officials say has never been done before on that scale.

“If the Navy intends to continue this facility in place in some capacity it ought to be upgraded to the highest standards of double-wall containment and leak detection,” said Gary Gill, deputy director for environmental health at the state health department, during the task force meeting. “Fix it up or shut it down.”

The Navy also began drilling two test wells last week mauka of the Red Hill tanks to gauge whether fuel from the January leak or dozens of older leaks may be migrating toward county drinking water supplies. The Navy has pegged the cost of the wells at $670,000.

However, top officials from the Honolulu Board of Water Supply and state health department warned earlier this summer that more wells may have to be drilled, pointing to an example in Arizona where a decades-long hole in a pipeline leaked 6 million gallons of fuel into the ground. In that case, the Air Force has since drilled at a cost of a quarter-million dollars each.

Amid increasing scrutiny of Red Hill and calls to potentially shut it down or scale it back, Poentis stressed the importance of the facility to national security interests.

“The Red Hill facility is a national strategic asset that we cannot do without. It has a capability that cannot be duplicated in the Pacific,” Poentis told task force members. “The Red Hill facility’s physical security, proximity to customers and ability to rapidly and efficiently provide large quantities of liquid fuel to Joint Base Pearl Harbor and the fleet are essential to the continued viability of military readiness in the Pacific. We are committed to continuing to make Red Hill work without jeopardizing the environment or the public health and safety.”