^tDS7^,
| U.S. ENVIRONMENTAL PROTECTION AGENCY
"% P.o«^ OFFICE OF INSPECTOR GENERAL
Response to Congressional
Request on EPA Enforcement
Report No. 13-P-0168	February 28, 2013

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Report Contributors:
Katie Butler
Dan Engelberg
Genevieve Borg Soule
Danielle Tesch
Abbreviations
CAA
Clean Air Act
CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act

(Superfund)
CWA
Clean Water Act
DOJ
U.S. Department of Justice
ECHO
Enforcement and Compliance History Online
EPA
U.S. Environmental Protection Agency
FTEs
Full-Time Equivalents
FY
Fiscal Year
IR
Injunctive Relief
MERs
Monetary Enforcement Results
NEIs
National Enforcement Initiatives
NPDES
National Pollutant Discharge Elimination System
OECA
Office of Enforcement and Compliance Assurance
OIG
Office of Inspector General
SDWA
Safe Drinking Water Act
SEPs
Supplemental Environmental Projects
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail:	OIG Hotline@epa.gov	write: EPA Inspector General Hotline
phone:	1-888-546-8740	1200 Pennsylvania Avenue, NW
fax:	202-566-2599	Mailcode 2431T
online:	http://www.epa.gov/oiq/hotline.htm	Washington, DC 20460

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.tftD stA/.	13-P-0168
° ^	U.S. Environmental Protection Agency	February 28,2013
Q
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\ Office of Inspector General
At a Glance
Why We Did This Review
We conducted this review in
response to a congressional
request for information about
U.S. Environmental Protection
Agency (EPA) enforcement
results overall and, specifically,
for Region 7 in fiscal year (FY)
2010.
EPA is responsible for
enforcing many environmental
laws across the country. EPA
directs much of its enforcement
towards sectors with histories
of high noncompliance as part
of its national enforcement
initiatives. EPA annually reports
environmental and monetary
enforcement results to
Congress and the public.
This report addresses the
following EPA Goal or
Cross-Cutting Strategy:
• Enforcing environmental
laws
Response to Congressional Request on
EPA Enforcement
What We Found
EPA enforcement data show that the amount of monetary results EPA regions
achieve from concluded enforcement cases varies from year to year and from
region to region. While the number of enforcement cases concluded for FYs 2006
through 2011 remained relatively constant, the overall monetary results varied.
The variations are linked to when and where in the nation a few large cases are
concluded. These few large cases can result in unusually large monetary results
in any given year. National Enforcement Initiatives (NEIs) set by EPA's Office of
Enforcement and Compliance Assurance drove the majority of these large cases.
In FY 2010, Region 7 concluded two enforcement cases with large monetary
results. Both cases were pursued under EPA's NEIs. The two cases accounted
for 24 percent of all of EPA's monetary enforcement results for FY 2010 and
98 percent of Region 7's monetary results for FY 2010. Region 7's results
typically fell in the middle of the 10 regions. We found that from FYs 2006
through 2011, Region 7's enforcement results, regulated facilities, and staff
allocated to enforcement were proportional with each other. Large cases took
several years to close and relied on coordination with the U.S. Department of
Justice, companies, and courts, which meant that EPA did not have full control
over the year in which a case was settled.
There are no recommendations associated with this report. The Office of
Enforcement and Compliance Assurance and Region 7 agreed with the Office of
Inspector General's conclusion that enforcement results can vary from year to
year and from region to region based on when and where large cases are
concluded.
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
www.epa.gov/oig/reports/2013/
20130228-13-P-0168.pdf

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
February 28, 2013
MEMORANDUM
SUBJECT: Response to Congressional Request on EPA Enforcement
Report No. 13-P-0168
FROM: Arthur A. Elkins Jr.
TO:	Cynthia Giles
Assistant Administrator for Enforcement and Compliance Assurance
Karl Brooks
Regional Administrator, Region 7
This is our report on the subject evaluation conducted by the Office of Inspector General (OIG)
of the U.S. Environmental Protection Agency (EPA). This report contains results that describe
the problems the OIG has identified. This report represents the opinion of the OIG and does not
necessarily represent the final EPA position.
Because this report contains no recommendations, you are not required to respond to this report.
However, if you submit a response, it will be posted on the OIG's public website, along with our
memorandum commenting on your response. Your response should be provided as an Adobe
PDF file that complies with the accessibility requirements of Section 508 of the Rehabilitation
Act of 1973, as amended. The final response should not contain data that you do not want to be
released to the public; if your response contains such data, you should identify the data for
redaction or removal along with corresponding justification. We have no objections to the further
release of this report to the public. We will post this report to our website at
http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact Carolyn Copper,
Assistant Inspector General for Program Evaluation, at (202) 566-0829 or
copper.carolyn@epa.gov; or Dan Engelberg, Product Line Director, at (202) 566-0830 or
engelberg.dan@epa.gov.
# JL \
|®|

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Response to Congressional Request
on EPA Enforcement
13-P-0168
Table of C
Chapters
1	Introduction		1
Purpose		1
Background		1
Scope and Methodology		5
2	Results		7
EPA's Monetary Enforcement Results Varied From FYs 2006
Through 2011		7
Variations in Monetary Enforcement Results Are Linked to When
Large Cases Conclude		8
The Proportion of Region 7 Enforcement Results, Facility Universe,
and Enforcement FTEs Are Similar		13
Conclusion		16
Agency Response and OIG Evaluation		16
Status of Recommendations and Potential Monetary Benefits		17
Appendices
A Region 7's 2010 Annual Results News Release, December 6, 2010		18
B Summary of Concluded Enforcement Cases With Monetary
Enforcement Results Greater Than $1 Billion, FYs 2006-2011 		19
C Agency Response to Draft Report		22
D Distribution		23

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Chapter 1
Introduction
Purpose
We conducted this review in response to a congressional request for information
about U.S. Environmental Protection Agency (EPA) enforcement results. We
addressed the following questions:
•	What are the trends in enforcement results stemming from EPA
enforcement actions (injunctive relief, supplemental environmental
projects, and penalties) over time [fiscal years (FYs) 2006 through
2011] and across regions?
•	What are the key factors explaining differences in enforcement results
stemming from EPA enforcement actions among EPA regions?
•	How do enforcement results stemming from EPA enforcement actions in
Region 7 compare to those in the rest of the EPA regions?
Background
EPA's mission is to protect human health and the environment, ensuring that all
Americans are protected from significant risks where they live, learn, and work.
EPA administers programs under federal environmental statutes.1 Each of these
programs has specific regulations. EPA is tasked with enforcing these regulations
at approximately 40 million regulated federal and private entities. EPA's Office of
Enforcement and Compliance Assurance (OECA) works with EPA's 10 regional
offices, state and tribal governments, and other federal agencies to ensure that
federal laws and regulations are enforced fairly and effectively. EPA strives for a
nationally consistent enforcement policy to promote a level playing field among
regulated entities and to ensure that all Americans live in states that meet
minimum environmental standards.
EPA's goal is to direct its core enforcement activities so that the Agency may
achieve the highest environmental benefits and reductions in risks to human
health and the environment.
1 Federal environmental statutes include the Clean Air Act (CAA); Clean Water Act (CWA); Comprehensive
Enviromnental Response, Compensation, and Liability Act (CERCLA, or Superfund); Emergency Planning and
Community Right-to-Know Act; Federal Insecticide, Fungicide, and Rodenticide Act; Marine Protection, Research
and Sanctuaries Act; National Enviromnental Policy Act; Oil Pollution Act; Resource Conservation and Recovery
Act; Safe Drinking Water Act (SDWA); and Toxic Substances Control Act.
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EPA Can Take Enforcement Actions When Violations Are Found
When EPA finds that facilities have violated the law, it may take enforcement
actions to correct any environmental damage and to deter future violations. These
actions may be informal, such as notices of violation; or formal, such as
administrative orders and seeking judicial orders or consent decrees. Depending
on the severity of the violation, and on whether the violation was willfully or
knowingly committed, EPA may also pursue criminal charges against an
individual or corporate defendant.
For each concluded enforcement case, EPA typically tracks two categories of
results:
•	Environmental results. These include environmental improvements
achieved through returning to compliance. OECA typically reports these
as "pounds of pollution reduced," or a similar environmental or human
health improvement.
•	Monetary enforcement results (MERs). These include financial costs to
the violator. OECA reports these in three ways: (1) injunctive relief (IR),
(2) supplemental environmental projects (SEPs), and (3) penalties (see
table 1). EPA considers money the violator agrees to spend on IR as
money the company should have spent complying with the law. IR makes
up the vast majority of MERs. Both IR and SEPs are investments made by
the company, which often result in an improvement to the environment.
For example, the violator agrees to decontaminate soil or reduce the
pollution produced by installing technology. Penalties are money paid
directly to the government. EPA also reports MERs associated with
criminal enforcement actions and violations of administrative and judicial
orders.
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Table 1: Types of monetary results associated with concluded enforcement cases
Monetary
enforcement results
Description
Examples
Injunctive relief (IR)
The action that EPA orders a violator to
take, through court or administrative
order,2 in order to achieve and maintain
compliance with environmental laws.
Facilities typically make these
investments over several years or even
decades, even though EPA reports the
total investment amount in the year the
case was concluded.
•	An energy company must install a
new cooling system to comply with
thermal discharge requirements in a
National Pollutant Discharge
Elimination System (NPDES) permit.
•	A petroleum refinery must install
controls to reduce emissions of air
pollutants to permitted levels.
Supplemental
environmental projects
(SEPs)
Environmental improvement projects
that a violator agrees to perform as part
of an enforcement settlement. These
projects supplement the projects
required to correct the violations
(injunctive relief), and produce
environmental or public health and
safety benefits beyond those required
by law. EPA may grant a credit to the
violator to partially offset the penalty
imposed during settlement.
•	A wastewater treatment plant
connects low-income residents to its
system.
•	A company restores a section of
stream impacted by a release of a
toxic substance from its facility.
Penalties
The money the violator pays in
connection with noncompliance or
violation. Penalty amounts are
established by criteria from relevant
environmental law or agency policy.
Criteria affecting penalty amounts may
include prior knowledge of regulations,
monetary benefits the violator received
by not complying and severity of the
violation.
•	A company must pay a penalty of
$1 million for NPDES permit
violations at 61 of its wastewater
treatment plants.
•	An energy company must pay
$13 million in penalties for illegally
discharging harmful substances to
surface waters without a permit.
Source: Office of Inspector General (OIG) summary based on OECA website and enforcement case summaries.
EPA Reports Annual Enforcement Results to the Public and Congress
Each fiscal year, EPA reports its enforcement results to the public and Congress
through its annual results process. Prior to releasing national year-end results,
OECA collects and validates data from the regions about their enforcement
activities. OECA refers to the final data as "certified data." The annual results
provide overviews of the enforcement program, details about annual results (both
monetary and environmental), and year-to-year enforcement trends. The annual
2 Technically, only courts can issue "injunctions." However, EPA uses the term "injunctive relief' to refer to activity
required by both courts and administrative orders.
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reports often highlight specific accomplishments, like cases that resulted in large
MERs and/or environmental results.3
In addition to OECA's annual reporting, individual EPA regions may describe
their year-end results to the public in press releases. For example, Region 7 issued
a press release on December 6, 2010, describing its enforcement results in
FY 2010. The press release stated that in FY 2010 Region 7 concluded cases
resulting in over $3 billion in IR. The press release also said this dollar amount
accounted for 31 percent of the total for EPA in FY 2010 (see appendix A).
Table 2 summarizes EPA's monetary enforcement results for FYs 2006-2011.4
Table 2: EPA annual monetary enforcement results for all regions by year, FYs 2006-2011
Fiscal
Year
Number of
concluded
enforcement
cases
Injunctive
relief
($ in
millions)
Supplemental
environmental
projects
($ in millions)
Total
administrative
and judicial
penalties
($ in millions)
Enforcement
total
($ in millions)
Average
monetary
commitment per
concluded case
($ in millions)
2006
3,593
$4,801
$69
$103
$4,973
$1.38
2007
3,403
$10,538
$30
$62
$10,631
$3.12
2008
3,541
$11,706
$39
$122
$11,866
$3.35
2009
3,670
$5,319
$41
$87
$5,447
$1.48
2010
3,292
$12,111
$24
$92
$12,227
$3.71
2011
3,206
$19,050
$25
$140
$19,215
$5.99
Source: OIG summary of OECA's certified annual results by fiscal year.
EPA Sets National Priorities for Its Enforcement Activities
Every 3 years, EPA sets national enforcement initiatives (NEIs) to focus civil and
criminal enforcement resources and expertise on serious environmental problems.
EPA's NEIs have focused on pollution problems such as mineral processing, air
toxics/air pollution, stormwater, and petroleum refineries.5 EPA's current NEIs
for FYs 2011-2013 focus on five areas:
•	Reducing air pollution from the largest sources and cutting hazardous air
pollutants.
•	Keeping raw sewage and contaminated stormwater out of the nation's
waters.
•	Preventing animal waste from contaminating surface and groundwater.
3	FY 2011 year-end results are reported at
http://www.epa.gov/compliance/resources/reports/endolYear/eoY2011/eoY-data.html.
4	All of the dollar amounts presented in this report are real dollars (i.e., not adjusted for inflation) as reported in the
annual results for that given fiscal year.
5	The petroleum refineries NEI was returned to the core enforcement program after the FY 2005 through
FY 2007 cycle, but the others have carried over to the FY 2011 through FY 2013 NEIs.
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•	Ensuring energy extraction activities comply with environmental laws.
•	Reducing pollution from mineral processing operations.
OECA and regions negotiate region-specific enforcement commitments to support
the goals and measures of the NEls. Depending on the level of progress, EPA may
either carry over a NEI to the next cycle, or consider the issue addressed and
return the program to the core enforcement program.
Scope and Methodology
We conducted this evaluation in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the
evaluation to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our review objectives. We believe that
the evidence obtained provides a reasonable basis for our analysis and results
based on our evaluation objectives. We performed our review from July to
December 2012.
To answer this congressional request, we evaluated EPA enforcement data from
EPA's Enforcement and Compliance History Online (ECHO) database and
supplemental region-certified data provided by OECA. We reviewed the MERs
associated with civil enforcement cases (including Superfund)6 concluded by EPA
regions. We used the real dollar amounts as reported in the Agency's annual
enforcement results reports. The period for our review was from FYs 2006
through 2011. We selected this timeframe because it gives a sense of the number
and types of enforcement cases concluded by EPA over different administrations.
We did not include criminal actions because the request focused on civil
enforcement results. We also did not include cases taken by EPA headquarters
since the focus of this review was regional results.
To examine trends in EPA's regional MERs, we obtained annual enforcement
results for all 10 regions over our study period and employed descriptive trend
analysis techniques. This analysis involved plotting values from year to year and
describing the shape of the plot. We also calculated the average over the 6-year
period and compared yearly results by calculating the percent change from the
average for each year.
We also analyzed annual enforcement results for IR, SEPs, and penalties for each
region. We assessed the extent of variability in regional MERs by identifying the
frequency with which these results exceeded 150 percent of the 6-year average for
that region. We chose this threshold after an initial assessment of the data
demonstrated that the threshold captured all years in which a substantial variation
from the 6-year average occurred. Once we identified years when results
5 This includes concluded Superfund cases, which are different from other civil enforcement cases since they focus
on locating and negotiating with the parties responsible for contamination at a site, and accomplishing site cleanup.
Further information about Superfund enforcement is at http://www.epa.gov/oecaerth/cleanup/superfund/index.html.
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exceeded 150 percent of the 6-year average, we determined the key factors
leading to differences in MERs by identifying the cases that contributed to the
substantial variations from the averages. We interviewed OECA staff and
managers and reviewed EPA enforcement data to identify the reasons for
variations over this period.
To determine whether the enforcement results in Region 7 were different from
those in other EPA regions, we analyzed the distribution of the region's MERs
over the selected time period. We also analyzed the distribution of EPA's
regulated facilities and full-time equivalents (FTEs or staff) across the regions.
We also identified the cases that contributed to Region 7's FY 2010 enforcement
results through a review of EPA's enforcement data and interviews with Region 7
enforcement personnel. Based on the objectives of the review and the analysis
performed, the OIG has no recommendations to report.
Data Limitations
We obtained our enforcement data from EPA's publicly available and certified
enforcement data. There are limitations in using these data to reach conclusions
about the number of regulated facilities in an EPA region. First, EPA relies on the
number of permits issued as a proxy for the number of facilities regulated by the
agency. However, a single facility may have multiple permits, so the permit count
is higher than the facility count. Second, EPA does not know the location of all
regulated facilities.7 This results in underreporting for the facility universe.
However, EPA has also found that its facility universe includes closed facilities,
which results in overreporting the facility universe. Third, because facility
complexity varies and complex facilities require more inspection and enforcement
resources, the ratio of permits to resources may not provide a precise picture of
the regions' requirements and capabilities. A region with a smaller number of
more complex facilities could have a larger enforcement burden than a region
with a larger number of less-complex facilities. Facility numbers do not capture
this nuance. After considering these limitations, we do not believe that any of the
limitations have material implications for our results.
7 For more information, see the OIG reports Limited Knowledge of the Universe ofRegulated Entities Impedes
EPA's Ability to Demonstrate Changes in Regulatory Compliance (Report No. 2005-P-00024, issued September 19,
2005) and EPA Needs to Further Improve How It Manages Its Oil Pollution Prevention Program (Report No.
12-P-0253, issued February 6, 2012).
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Chapter 2
Results
EPA regions' MERs vary from year to year. A few extremely high-value
enforcement cases that were concluded explain large variations across regions and
over time. For FYs 2006 through 2011, the annual number of cases EPA regions
concluded remained relatively constant. However, over the 6 years, the MERs
stemming from these cases varied. A factor linked to this variation was the timing
and distribution of a few large cases concluded in a given year. In FY 2010,
Region 7 results included two large concluded cases that accounted for 24 percent
of nationwide enforcement results. However, FY 2010 was not an ordinary year in
Region 7. Over the 6-year period, Region 7 MERs accounted for only 6 percent of
national results on average. In addition, we found that for FYs 2006 through 2011,
Region 7 enforcement results were in proportion to both the number of regulated
facilities and the number of enforcement FTEs in the region. Based on this
information, the number of concluded cases and associated MERs in Region 7 for
these years were similar to the level of activity in the other nine regions.
EPA's Monetary Enforcement Results Varied From
FYs 2006 Through 2011
Although the annual MERs varied from year to year, the number of concluded
cases remained relatively constant across EPA regions and over our review
period. Most of EPA's MERs were in the form of injunctive relief, focused on
completing tasks that will return and keep facilities in compliance. IR made up
nearly 99 percent of the $64 billion in MERs assessed in the study period.8
Penalties and SEPs accounted for under 2 percent of MERs. In addition, MERs
also varied across regions.
EPA enforcement data for the period reviewed (FYs 2006 through 2011) indicate
that the number of cases EPA regions concluded remained relatively constant,
differing by an average of 4 percent from the 6-year average over the study period
(see table 3). However, the monetary results associated with these cases
fluctuated widely from year to year, differing by an average of 35 percent from
the 6-year average. Therefore, an increase in the number of concluded cases does
not necessarily lead to an increase in MERs (or vice versa). For example, in
FY 2009 the number of concluded cases increased while the MERs decreased.
8 IR is substantially higher than penalties and SEPs because IR reflects long-term investments (e.g., 15-20 years)
made by companies to correct noncompliance. However, EPA reports the total amount in the year that the case is
concluded.
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Table 3: Comparison of the percent change from the 6-year average for concluded
cases and MERs
Fiscal Year
Number of
concluded
cases
Percent difference
from 6-year
average number of
concluded cases*
Total monetary
enforcement
results
($ in billions)
Percent
difference from
6-year average
MERs*
2006
3,593
4%
$4.9
54%
2007
3,403
1%
$10.6
1%
2008
3,541
3%
$11.9
11%
2009
3,670
6%
$5.3
51%
2010
3,292
5%
$12.3
15%
2011
3,206
7%
$19.1
79%
6-year
Average
3,451
-
$10.7
--
Average
percent
difference
--
4%
--
35%
* Above 6-year average indicated in black text; below 6-year average indicated in red text.
Source: OIG analysis of OECA's certified annual results by fiscal year.
Monetary enforcement results varied across the three categories (IRs, SEPs, and
penalties) as well. Over the 6-year period we reviewed, IR differed 173 percent
between the highest and lowest regions. This variation also occurred within
individual regions. For example, Region 7's IR amounts differed 191 percent
from its lowest to highest years. Similar results were also apparent for SEPs.
Penalties varied 153 percent between the highest and lowest region over the study
period. For an individual region, Region 10 showed the largest variation, posting
a 163-percent difference between the highest and lowest year.
Variations in Monetary Enforcement Results Are Linked to When
Large Cases Conclude
For FYs 2006 through 2011, the conclusion of a few cases with large monetary
results influenced MERs variation. When regions concluded large cases, the
overall value of these cases increased those regions' MERs in that year. This led
to variability in MERs from year to year, both within and across regions. Due to
multiple stakeholders in these types of cases (e.g., the defendants, the U.S.
Department of Justice (DOJ), and others), EPA regions had limited control over
when a large case settled. Additionally, EPA's NEIs drove the majority of these
large cases. (These cases are italicized in figures 1 through 3).
In years when a region reported MERs significantly higher than the 6-year
average, the region concluded one or more large cases in that year. See figures 1
through 3 for more information on these cases.
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Figure 1: The value of injunctive
relief by region and the contributing cases, FYs 2006-2011
$o
mi pit
12006
12007
2008
12009
2010
2011
R1 R2 R3 R4 R5 R6 R7 R8 R9 RIO

Cases contributing to higher than normal injunctive relief results
2006
• Region 6 - Valero Refining Company, $457 million; ExxonMobil Corporation, $193 million; ConoccoPhillips,
$192 million; ExxonMobil and Supply Baton Rouge Refinery, $154 million. These four cases accounted for 76% of
Region 6's injunctive relief in 2006.
2007
• Region 2 - Prasa V -Puerto Rico Aqueduct and Sewer Authority, $1.7 billion; PSEG Fossil, LLC (CD Amendment),
$1.1 billion; New York City Department of Environmental Protection, $930 million. These cases accounted for 91% of
Region 2's total injunctive relief for 2007.
2008
•	Region 1 - Brayton Point, $500 million. This case accounted for 75% of Region 1 's injunctive relief for 2008.
•	Region 3 - American Electric Power Company (national case), $1.9 billion; Allegheny County Sanitary Authority,
$1.4 billion. These cases accounted for 96% of Region 3's injunctive relief for 2008.
•	Region 8 - Kennecott South Zone Superfund Site, $197 million; Libby Asbestos Site, $191 million; Atlantic Richfield
Corporation, $97 million. These three cases accounted for 84% of Region 8's Injunctive Relief for 2008.
2009
• Region 10 - Asarco Bankruptcy (NC) CDA Basin, $373 million. This case accounted for 77% of Region 10's
injunctive relief for 2009.
2010
•	Region 5 - Hamilton County, $1.79 billion; Lyondell Chemical Company, Inc, et al. (NC), $983 million; Enbridge
Energy Partners, L.P. Order (Marshall), $600 million. These three cases accounted for 76% of Region 5's injunctive
relief for 2010.
•	Region 7 - City of Kansas City, Missouri, $2.4 billion; Westar Energy Inc, $556 million. These two cases accounted
for 97% of Region 7's injunctive relief in 2010.
2011
•	Region 2 - General Electric Company, $2.1 billion; Hovensa LLC (Global), $700 million. These two cases accounted
for 88% of Region 2's injunctive relief in 2011.
•	Region 4 - Tennessee Valley Authority, $5 billion, This case accounted for 92% of Region 4's injunctive relief in
2011.
•	Region 5 - NEORDS-Cleveland, $3 billion; NIPSCO, $609 million; City of Evansville, $500 million. These three
cases accounted for 86% of Region 5's injunctive relief for 2011.
•	Region 9 - Honolulu, City and County, $3.7 billion. This case accounted for 94% of Region 9's injunctive relief for
2011.
•	Region 10 - Coeur D'Alene Basin Hecla Mining, $114 million; BP Exploration (Alaska) Inc, $60.5 million; EMF J.R.
Simplot Company, $50 million. These three cases accounted for 65% of Region 10's injunctive relief for 2011.
Source: OIG analysis of EPA enforcement data for FYs 2006-2011. Cases in italic print were part of an NEI.
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Figure 2: The value of supplemental environmental projects by region and the contributing cases,
FYs 2006-2011
o
~
$0
ii ¦ ii m
R1 R2
R3 R4 R5 R6 R7 R8
R9
RIO

Cases contributing to higher than normal supplemental environmental projects results
2006
•	Region 2 - ConocoPhillips, $8 million; Valero Refining Company, New Jersey, $1.2 million. These two cases
accounted for 72% of Region 2's total SEP value for 2006.
•	Region 3 - Sunoco Inc., $3.9 million; Washington Suburban Sanitary Commission, $4.4 million; Motiva Enterprises
LLC, $6.4 million. These three cases accounted for 87% of Region 3's total SEP value in 2006.
•	Region 5 - ExxonMobil Corporation, $2.2 million; Eramet Marietta Inc., $2 million; Archer Daniels Midland, $1 million;
Conoco Inc. Wood River Products, $900,000. These four cases accounted for 52% of Region 5's total SEP value for
2006.
•	Region 6 - Valero Refining, $3 million; ExxonMobil Refining Complex, $1 million; City of Dallas, $1.2 million;
Oxy Vinyls Limited, $964,000. These four cases accounted for 61 % of Region 6's total SEP value for 2006.
•	Region 7 - Cargill Inc., $2 million. This case accounted for 70% of Region 7's total SEP value for 2006.
•	Region 8 - ExxonMobil Refining and Supply Company, $1.8 million. This case accounted for 85% of Region 8's total
SEP value for 2006.
2007
• Region 9 - Nevada Power Company, $9.7 million. This case accounted for 89% of Region 9's total SEP value for
2007.
2008
•	Region 3 - Merck and Company, $4.5 million; Allegheny County Sanitary Authority, $3 million; Southeastern
Transportation Authority, $1.1 million. These cases accounted for 89% of Region 3's total SEP value for 2008.
•	Region 6 - Equistar Global (National Case), $6 million; Premcor Refining Group (National Case), $2.3 million. These
two cases accounted for 86% of Region 6's total SEP value for 2008.
•	Region 10 - USDOE Hanford Facility, $837,000; Thea Foss Settlement, $268,500; ConocoPhillips Company,
$200,000. These three cases accounted for 77% of Region 10's total SEP value for 2008.
2009
•	Region 1 - Franklin Park Apartments (The Community Builders), $1.9 million. This case accounted for 61 % of
Region 1 's total SEP value in 2009.
•	Region 4 - Metropolitan Government of Nashville and Davidson County, TN, $2.8 million; Memphis Light, Gas, and
Water Division, $10 million. These two cases accounted for 92% of Region 4's total SEP value in 2009.
•	Region 6 - BP North American, $6 million; Shintech Inc, $4.7 million. These cases accounted for 91 % of Region 6's
total SEP value for 2009.
2010
•	Region 7 - City of Kansas City, Missouri, $1.4 million; Kaneb Pipeline Operating Partnership, LP, A Nustar Energy LP
Company, $762,302. These two cases accounted for 63% of Region 7's total SEP value for 2010.
•	Region 8 - McWane Inc., $1 million. This case accounted for 81 % of Region 8's total SEP value for 2010.
2011
None
Source: OIG analysis of EPA enforcement data for FYs 2006-2011. Cases in italic print were part of an NEI.
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Figure 3: Penalty amounts by region and the contributing cases, FYs 2006-2011
R1
R2
R3
R4
R5
R6
R7
R8
R9
RIO

Cases contributing to higher than normal total penalties results
2006
• Region 4 - United Organics Corporation & Malcolm Lieberman, $32.8 million. This case accounted for 84% of
Region 4's penalties in 2006.
2007
None
2008
• Region 3 - Massey Energy Company et al., $13.3 million; American Electric Power Company (National Case).
$6.2 million; Euclid of Virginia Inc., $3.2 million. These three cases accounted for 76% of Region 3's penalties in 2008.
2009
• Region 8 - Anadarko Petroleum Corporation, $1.05 million; Colorado Interstate Gas/Natural Buttes. $987.757\
Citation Oil and Gas Corporation, $280,000; Miller Dyer & Company. $250.000; Frontier Refining. $242,600.
These cases accounted for 67% of Region 8's penalties for 2009.
2010
None
2011
•	Region 6 - Citgo Petroleum Corporation, $6 million; BP Texas City, $15 million. These two cases accounted for 72%
of Region 6's penalties in 2011.
•	Region 8 - EOG Resources, $411,000; QEP Energy Company, $381,000; Slawson Exploration Company, $372,000;
Riverbend Compressor Station. $350,000. Alfred Barone-Bar One Ranch, $275,000; Marathon Oil Company,
$294,000.These cases accounted for 46% of Region 8's penalties in 2011
•	Region 10 - BP Exploration (Alaska) Inc, $20.5 million. This case accounted for 81 % of Region 10's penalties in
2011.
Source: OIG analysis of EPA enforcement data for FYs 2006-2011. Cases in italic print were part of an NEI.
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Annual MERs had an average percent change of 35 percent from the 6-year
average. There were 14 cases with MERs greater than $1 billion that accounted
for 48 percent of all of the MERs during the study period (figure 4). These
14 cases represent 0.07 percent of all cases concluded during the study period.
(See appendix B for more information on the individual cases). However, when
these 14 large cases are excluded, the average percent change is only 9 percent.
Figure 4: Total monetary enforcement results, FYs 2006-2011
$25 -|	
$20
¦ All Other Cases
2006 2007 2008 2009 2010 2011
Source: OIG analysis of EPA enforcement data for FYs 2006-2011.
The year with the largest MERs (FY 2011) included four cases with results over
$1 billion. These four cases accounted for 72 percent of the national total
(see figure 4). The largest concluded case addressed violations of the Clean Air
Act by the Tennessee Valley Authority in Region 4. In this case, EPA and the
DOJ reached a $5 billion agreement with the Tennessee Valley Authority to build
new and upgraded state-of-the-art pollution controls. This case represented
26 percent of that year's national MERs.
EPA's NEIs drive the majority of these large cases. During our study period, on
average 64 percent of the top 25 cases in a given year (measured in total MERs)
were part of a NEI. Additionally, 12 of the 14 cases with results over $1 billion
were part of a NEI. These cases vary by region mainly due to the geographic
location of the types of facilities under a given initiative. Geographic variation
causes variability in results stemming from those cases. For example, Region 6
has approximately 55 active petroleum refineries while Region 7 only has 3, so
Region 6 would most likely report more enforcement cases under the petroleum
refinery initiative. The results from those cases could strongly influence annual
results.
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Adding to the variability in annual enforcement results is the fact that regions do
not control the timing of when these large cases reach conclusion. Instead, the
timing is based on EPA working with outside stakeholders, such as DOJ and
defendants, to help them reach settlements. This can take several years. For
example, in FY 2010, Region 7 concluded two large cases that began in FY 2004.
Additionally, many large MERs, such as multi-billion dollar IR agreements with
noncompliant facilities, include costs that facilities will incur over many years.
However, EPA reports the total result in the year the case concludes. For
example, a settlement with a municipality may require it to install billions of
dollars of pollution controls over a 25-year period. The municipality may spend
only a portion of the cost in any single year, but EPA reports the entire amount in
the year the case concludes.
The Proportion of Region 7 Enforcement Results, Facility Universe,
and Enforcement FTEs Are Similar
When we compared the regions' enforcement resources, responsibilities, and
results, Region 7 enforcement results were similar to other regions' results.
FY 2010 represented an atypical year for Region 7. During this year, the region
settled two large NEI cases, which substantially increased the region's MERs for
FY 2010.
Based on estimates of permits that require EPA oversight, Region 7 was
responsible for close to 8 percent of the EPA regulated universe (see figure 5a).
Region 7 also employed close to 7 percent of enforcement personnel over the
6-year study period (see figure 5b). On average, Region 7 concluded almost
8 percent of the enforcement cases (see figure 5c), and achieved 6.2 percent of the
national monetary enforcement results over this period (see figure 5d). The
comparison suggests that the proportion of Region 7's concluded cases and MERs
is similar to the proportion of its regulatory responsibilities and enforcement
resources.
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Figure 5: Region 7 compared with other EPA regions according to: (a) percent of regulated
facilities, (b) percent of FTEs, (c) percent of total enforcement actions, and (d) percent of total
enforcement monetary commitments, FYs 2006-2011
(a) Percent of regulated facilities
4.5%.
(b) Percent of FTEs
11.5%
18.4%
20.2%
(c) Percent of total enforcement actions
6.5%
4.9%
7.5%


13.1%
5.8%

7.6%
8.8%

18.8%
17.3%
IR1
I R2
R3
I R4
I R5
R6
R7
R8
R9
RIO
(d) Percent of total monetary commitments
1.8% r-3-4%
9.7%
13.2%
16.0%
Source: OIG analysis of EPA enforcement data for FYs 2006-2011.
Region 7's FY 2010 Monetary Enforcement Results Were Atypical
FY 2010 was an atypical year because it was the only year in our study period
when Region 7's results significantly exceeded the 6-year national average. In
FY 2004, Region 7 began work on two large cases that concluded in FY 2010.
The results from these cases accounted for over 97 percent of Region 7's MERs
for that year. Based on the results from these two cases, Region 7's IR accounted
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for approximately 24 percent of the national total for that year. However, this was
atypical of Region 7's annual results.
Over the 6-year period, Region 7's IR on average accounted for slightly more
than 6 percent of the national total. Region 7's results typically fell in the middle
of the 10 EPA regions. It was the sixth highest region for both number of
concluded cases and monetary results. Region 7 was responsible for close to
8 percent on average of the concluded cases (see figure 5 c) and assessed slightly
more than 6 percent of the overall monetary enforcement results (see figure 5d).
By these measures, Region 7's enforcement results were proportional to its
resources and regulatory responsibility.
NEIs Drive Large Cases in Region 7
As discussed earlier, NEIs frequently drive atypical enforcement results in all
EPA regions. As also mentioned previously in this report, in FY 2010 Region 7
settled two large cases that accounted for over 97 percent of its MERs for that
year. These two cases resulted in Region 7 annual results for IR that were
substantially greater than any other year between FY 2006 and FY 2010. They
also resulted in a projected environmental improvement of over 200 million
pounds of air and water pollution reduced, treated, or eliminated because of the
enforcement actions.
Region 7 developed these two cases as part of two EPA NEIs to address
municipal combined sewer overflows and combined sewer overflows, and coal-
fired power plants. These cases took several years of research and negotiation to
reach conclusion. Both cases began in FY 2004 but concluded in FY 2010, so the
results reported in FY 2010 were the result of EPA, DO J, and regional activities
over the previous 6 years. Region 7 was not alone in settling significant cases
under the NEIs during the study period; other EPA regions participated in the
initiatives as well (see examples below).
• The larger case addressed CWA combined sewer overflows/combined
sewer overflows violations in the City of Kansas City, Missouri. The region
developed this case as part of EPA's NEI to improve compliance with
combined sewer regulations. This case included IR of approximately
$2.4 billion, a civil penalty of $600,000, and a SEP of about $1.4 million.
The IR amount for this case accounted for approximately 79 percent of the
Region 7 total and 20 percent of the national total for 2010, and consisted
of projects the municipality would implement over 25 years. EPA has
concluded several similar cases under this initiative across the United
States. For example, other significant CWA combined sewer overflows
cases included a Region 5 case against the City of Cleveland, which was
concluded in FY 2011 and resulted in over $3 billion in monetary
enforcement results; and a Region 3 case against the Allegheny County
Sanitation Authority, which resulted in $1.4 billion in enforcement results.
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• The smaller of the two cases Region 7 concluded in FY 2010 addressed
violations of the Clean Air Act at a Westar Energy power plant in Topeka,
Kansas. The region developed the case as a part of EPA's NEI to improve
compliance at coal-fired power plants. The case resulted in $556 million in
IR and included a $2.75 million penalty. The IR in this case accounted for
over 18 percent of the Region 7 total and 5 percent of the national total in
FY 2010. Other EPA regions concluded coal-fired power plant cases during
the study period, including a 2011 Region 4 case against the Tennessee
Valley Authority resulting in over $5 billion in MERs.
In other years, different regions showed larger than typical results for similar
reasons (see figures 1 through 3).
Conclusion
Enforcement is a necessary tool for ensuring that entities regulated under EPA's
environmental programs meet their obligations. During our study period, large
case conclusions determined the size of monetary enforcement results in a given
year. Due to yearly variations in the MERs of concluded cases, examining results
for a single region or a single year may be misleading. More than a single year or
result should be looked at when trying to understand a region's pattern of
enforcement activity. For Region 7, two NEI enforcement cases that began in
2004 and ultimately concluded in FY 2010 drove FY 2010 MERs. Due to the
variability and timing of large cases, EPA cannot reliably predict when cases will
contribute to future annual MERs.
Agency Response and OIG Evaluation
We received joint comments on the draft report from OECA and Region 7 on
January 18, 2013 (see appendix C). OECA and Region 7 agreed with the OIG's
conclusion that enforcement results can vary from year to year and from region to
region based on when and where large cases are concluded. We made changes to
the report where appropriate.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
No recommendations
Claimed
Amount
Ag reed-To
Amount
1 0 = Recommendation is open with agreed-to corrective actions pending.
C = Recommendation is closed with all agreed-to actions completed.
U = Recommendation is unresolved with resolution efforts in progress.
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Appendix A
Region 7's 2010 Annual Results News Release,
December 6, 2010
EPA Region 7 Compliance and Enforcement Actions in 2010 Result in Record
$3 Billion in Pollution Control and Cleanup Release Date: 12/06/2010
Contact Information: Chris Whitley, 91 3-551-7394, whitley.christopher@epa.gov
Environmental News
FOR IMMEDIATE RELEASE
(Kansas City, Kan., Dec. 6, 2010) - Environmental compliance and enforcement activities concluded by
EPA Region 7 during fiscal year 2010 set a new record, securing more than $3 billion in investments in
pollution control and cleanup as a result of legal actions taken against polluters.
Region 7's total of more than $3 billion in secured injunctive relief accounted for fully 31 percent of EPA's
national total for the fiscal year, which ended September 30.
Region 7's actions will result in respondents in Iowa, Kansas, Missouri, Nebraska and on tribal lands
eliminating more than 470 million pounds of pollutants, and implementing more than $3 million in
Supplemental Environmental Projects.
Region 7's targeted actions to achieve EPA's National Priorities - including reducing harmful discharges
of pollutants into rivers and streams, and reducing air pollution from major industrial sources - will further
result in the reduction, treatment, minimization or disposal of more than 227 million pounds of pollutants.
"Region 7's 15 million people benefited from a remarkable year of progress toward a cleaner and safer
environment," Regional Administrator Karl Brooks said. "Our EPA team that links environmental
professionals in program staff with skilled attorneys in our Office of Regional Counsel worked effectively
with state and federal partners to gain these important results."
A report of Region 7's Fiscal Year 2010 Compliance and Enforcement Annual Results, including
statistical summaries and state-by-state highlights, along with links to information about EPA's national
environmental enforcement and compliance activity, is available online at:
www.epa.qov/reqion07/enforcement compliance/end of year 10 results.htm
This year's national reporting of annual results includes an enhanced mapping tool that allows the public
to view detailed information about enforcement actions taken at more than 4,500 facilities across the U.S.
and its territories. The mapping tool shows facilities and sites where civil and criminal enforcement actions
were taken for alleged violations of U.S. environmental laws. The tool also displays community-based
activities, including locations of environmental justice grants awarded during FY 2010, and Environmental
Justice Showcase Communities.
###
For a national summary of EPA's compliance and enforcement results for fiscal year 2010, go to:
www.epa.qov/compliance/resources/reports/endofvear/eov2010/index.html
Source: EPA Newsroom
http://vosemite.epa.qov/opa/admpress.nsf/e77fdd4f5afd88a3852576b3005a604f/418c95dfcd20be418525
77f100645d27!QpenDocument
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Appendix B
Summary of Concluded Enforcement Cases With
Monetary Enforcement Results Greater Than
$1 Billion, FYs 2006-2011
Fiscal





Monetary

Year

Case

Laws and
NEI
enforcement results

Case name
number
Case type
sections
(Y/N)
(rounded)
Case summary

Sanitation District
04-2005-
Civil Judicial
CWA
Y
Federal penalty =
Civil enforcement violations

No. 1 of Northern
9011

301/402

$138,200
of Section 301 of CWA by

Kentucky




SEP cost = $311,000
Injunctive relief =
$1.1 billion
Sanitation District No. 1 of
Northern Kentucky for
unauthorized discharges of
pollutants into waters of
the U.S. and other NPDES
permit deficiencies.

PSE&G Fossil, LLC
02-2001-
0020
Civil Judicial
CAA 165,
173, 113A
Y
Federal penalty =
$4.25 million
Injunctive relief =
$1.1 billion
PSE&G made modifications
at its Hudson, Mercer, and
Bergen facilities without
obtaining a prevention of
significant deterioration
permit and without
installing best available
control technology.

PRASAV-Puerto
02-2004-
Civil Judicial
CWA
Y
Federal penalty =
Violations of NPDES permits
o
o
CM
Rico Aqueduct and
0008

301/402,

$1 million
at 61 wastewater treatment
Sewer Authority


301

SEP cost =
$2.6 million
Injunctive relief =
$1.7 billion
plants throughout Puerto
Rico.

City of Indianapolis
05-2000-
0583
Civil Judicial
CWA 301,
301/402
Y
Federal penalty =
$558,900
SEP cost = $2 million
Injunctive relief =
$1.9 billion
Settlement related to the
City of Indianapolis
developing and
implementing a long-term
control plan to eliminate
sanitary overflows,
implement all feasible
alternatives to bypassing at
the city's two wastewater
treatment plants, and to
ensure the city's combined
sewer overflows comply
with the CWA.
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Fiscal
Year
Case name
Case
number
Case type
Laws and
sections
NEI
(Y/N)
Monetary
enforcement results
(rounded)
Case summary
2008
Allegheny County
Sanitary Authority
(ALCOSAN)
03-2000-
0106
Civil Judicial
CWA
301/307,
301/402,
301
Y
Federal penalty =
$400,000
SEP cost = $3 million
Injunctive relief =
$1.4 billion
Under certain conditions,
materials are diverted from
the path leading to the
treatment plant and instead
flow out of an outfall into
the waters of the U.S. The
diversion of material from
the sewer system to the
outfall is controlled in
whole or in part by
ALCOSAN. While there are
315 outfalls throughout the
system that carry material
to ALCOSAN, the sanitary
authority is only permitted
in its NPDES permit to
discharge from 3 (out of
315) outfalls under certain
conditions.
American Electric
Power Company
(National Case)
03-1999-
0388
Civil Judicial
CAA 111,
165, 173,
110
Y
Federal penalty =
$6.2 million
Injunctive relief =
$1.9 billion
Company did not comply
with prevention of
significant deterioration
permit requirements when
it implemented at least nine
capital improvement
projects, resulting in a
significant increase in S02,
NOx, and/or particulate
matter emissions without a
permit.
Muskingum River
Station, AEP
(Ohio Power)
(National Case)
05-1999-
0644
Civil Judicial
CAA 110,
111, 165
Y
Federal penalty =
$8 million
Injunctive relief =
$2.5 billion
AEP failed to apply for a
permit prior to
commencing major
modifications under
prevention of significant
deterioration permit and
new source performance
standards, and failed to
install best available
control technology.
2010
New York City
Department of
Environmental
Protection
02-2010-
8027
Administrative
Formal
SDWA
1412/141
4
N
Injunctive relief =
$1.6 billion
Administrative order issued
to establish an enforceable
schedule to achieve
compliance with the
requirements of SDWA and
the Long Term 2 Enhance
Surface Water Treatment
Rule.
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Fiscal
Year

Case

Laws and
NEI
Monetary
enforcement results

Case name
number
Case type
sections
(Y/N)
(rounded)
Case summary

Hamilton County
05-1998-
0750
Civil Judicial
CWA
301/402,
301
Y
Injunctive relief =
$1.79 billion
Hamilton County (Ohio)
owns six municipal
wastewater treatment
plants and the sewer
system that feeds into
these wastewater
treatment plants. For a
number of years, the
defendants have violated
the CWA in several
significant respects.

City of Kansas City,
07-2004-
Civil Judicial
CWA
Y
Federal penalty =
Violation of a permit.

Missouri
0333

301/402

$600,000
SEP cost =
$1.4 million
Injunctive relief =
$2.4 billion


General Electric
02-2005-
Civil Judicial
CERCLA
N
Injunctive relief =
Consent decree related to

Company
0015

170A,
106A

$2.1 billion
the Hudson River PCBs
Superfund Site.

NEORDS-
05-2003-
Civil Judicial
CWA 308,
Y
Federal penalty =
Combined sewer overflow

Cleveland
0627

301/402

$600,000
SEP cost = $1 million
Injunctive relief =
$3 billion
violations.

Honolulu, City and
09-1991-
Civil Judicial
CWA
Y
Federal penalty =
City and County of Honolulu

County
0033

301/307,

$800,000
failed to develop and




301/402,

Injunctive relief =
administer a pre-treatment
o
CM



309, 402,

$3.7 billion
program at seven (of eight)



301


treatment plants. Also,
chronic releases of raw
wastewater to surface
water.

Tennessee Valley
04-2010-
Administrative
CAA 165
Y
Injunctive relief =
Injunctive relief secured at

Authority
1760
Formal


$5 billion
all of Tennessee Valley
Authority's coal-fired power
plants across three states to
resolve alleged violations of
the CAA New Source
Review provisions.
Source: OIG analysis of EPA enforcement case summaries.
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Appendix C
Agency Response to Draft Report
January 18, 2013
MEMORANDUM
SUBJECT: Response to Office of Inspector General Draft Report No. FY12-0018: Response
to Congressional Request on EPA Enforcement, dated December 19, 2012
FROM: Cynthia Giles. Assistant Administrator
Office of Enforcement and Compliance
TO:	Carolyn Copper
Assistant Inspector General for Program Evaluation
The Office of Enforcement and Compliance Assurance and Region 7 appreciate the opportunity
to respond to the draft report Response to Congressional Request on EPA Enforcement, dated
December 19, 2012. We agree that enforcement results can vary from year to year and from
region to region based on when and where large cases are concluded. Because there are no
findings or recommendations in this report, our response only addresses the factual accuracy of
the draft report. Technical corrections to address factual accuracy are proposed in the attached
document.
If you have any questions regarding this response, please contact Susan Shinkman, Director,
Office of Civil Enforcement at (202) 564-2220.
cc: Karl Brooks, Region 7
Kathy Finazzo, Region 7
Lauren Kabler. OECA-OCE
Stephen Keim, OECA-OSRE
Lisa Lund, OECA-OC
Mamie Miller, OECA-OC
Erin Miles, OECA-AA
Susan Shinkman, OECA-OCE
Gwendolyn Spriggs, OECA-OAP
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Distribution
Office of the Administrator
Assistant Administrator for Enforcement and Compliance Assurance
Regional Administrator, Region 7
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Associate Administrator for Policy
Deputy Administrator, Region 7
Audit Follow-Up Coordinator, Office of Enforcement and Compliance Assurance
Audit Follow-Up Coordinator, Region 7
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