EPA reaches record $160 million settlement with oil company over CAA violations

October 31st, 2018 by Dakota Software Staff

The Environmental Protection Agency, the Department of Justice and the Mississippi Department of Environmental Quality have reached a national settlement with a multinational energy corporation, which will require the company to spend $150 million on safety improvements at all of its domestic oil refineries.

The massive penalty stems from repeated violations of Clean Air Act provisions aimed at preventing the accidental release of hazardous chemicals that can harm public health and the environment.

The company will devote the funds to replacing vulnerable pipes, improving corrosion inspection, instituting operating parameters and alarms for safer operation and making other safety improvements at all of its refineries in the U.S. Additionally, the California-based oil company will pay a $2.95 million civil penalty and will spend $10 million to provide emergency response equipment to the communities around the five subject refineries in California, Mississippi, Utah and Hawaii.

The total price tag exceeds $160 million, making this the largest settlement in the history of the EPA's enforcement of the Risk Management Plan Rule of the Clean Air Act, according to EPA officials.

Settlement spurred by 2012 and 2013 refinery fires

The EPA's initial investigation was in response to a 2012 fire involving high-temperature hydrocarbons released in the Crude Unit of the company's refinery in Richmond, California. In addition to endangering the lives of 19 employees, that fire caused 15,000 local residents to seek medical attention. In 2013, during the course of the subsequent investigation, there were accidental releases of regulated chemicals at two of the company's other refineries. The incidents included a rupture that led to flaring and a loss of power at the company's El Segundo, California location, and a 2013 explosion that caused the death of one employee at the Pascagoula, Mississippi facility

An Aug. 6, 2012 fire at the company's Richmond, California refinery prompted a shelter-in-place order by Contra Costa County officials.

"This case demonstrates the importance of performing equipment inspections and maintenance in accordance with environmental regulations," said EPA official Susan Bodine.

"The Clean Air Act's hazardous chemical risk management program is intended to protect local communities and American workers," added Acting Assistant Attorney General Jeffrey H. Wood, speaking on behalf of the Justice Department's Environment and Natural Resources Division. "Today's action, taken jointly with our enforcement partners at EPA and the State of Mississippi, strengthens emergency prevention and response systems at Chevron's U.S. refineries, which will help to protect their workers and the communities in which they live from dangerous chemical accidents."

A spokesman for the company said that the new measures, which include the replacement of some carbon steel process piping with chrome-alloy steel piping, would further fuel existing efforts to "enhance safe practices" at its refineries, according to the San Francisco Chronicle.

The United States' and Mississippi's Complaint alleged violations of the Clean Air Act's regulations that require covered facilities to implement a systematic Risk Management Program to prevent the accidental release of dangerous substances, and to design and maintain safe facilities that meet a general duty of care. The Mississippi Department of Environmental Quality participated as co-plaintiff with the federal government, exercising its authority to enforce the Risk Management Program regulations over the company's refinery in Pascagoula, Mississippi.

This is the first time that a state has teamed with the United States in jointly filing suit to enforce these provisions of the Risk Management Program.

The major settlement also resolves claims under the Comprehensive Environmental Response, Compensation, and Liability Act and the Emergency Planning and Community Right-to-Know Act related to the delayed reporting of a 2012 hydrogen sulfide release at the company's Richmond refinery.