Historical Enforcement and Compliance Data on the Petroleum and Coal Product Manufacturing Industry US Environmental Protection Agency Office of Land and Emergency Management ------- To understand the experience of court settlements and judgements, EPA looked at compliance and enforcement in the Petroleum and Coal Product Manufacturing industry. EPA believes that compliance assistance, monitoring and enforcement are important components of the regulatory framework. Through inspections, compliance monitoring can identify noncompliance at regulated facilities. Enforcement actions provide legal instruments to ensure correction of deficiencies to reach compliance with environmental requirements. Compliance and enforcement actions have certain functions which EPA considers particularly pertinent to the risk determination for rulemaking under CERCLA § 108(b). First, through negotiated agreements, EPA can ensure that the responsible party carries out or pays for the cleanup if noncompliance causes release of a hazardous material. Second, enforcement actions can compel a responsible party to return to compliance through instruments such as settlements and orders. Third, the prospect of financial penalties that can accompany these enforcement instruments can encourage compliance. This document identifies facilities where noncompliance was identified and was addressed by means of formal federal enforcement. The scope of this document does not include either facilities where noncompliance was addressed through informal enforcement, facilities where noncompliance was addressed by a state, or facilities that are complying. EPA obtained data from the EPA Enforcement and Compliance History Online (ECHO) system to provide a review of federal enforcement from FY1974 through FY20171. Facilities whose primary North American Industry Classification System (NAICS) codes indicate Petroleum and Coal Product Manufacturing industry activities (NAICS 324) were included in EPA's review. The data are accessed in the ECHO system through NAICS codes. Guidelines on enforcement in this industry have been available since 1980, when the EPA Petroleum Refinery Enforcement Manual2 was published. Petroleum & Coal Enforcement cases 1974-2017 140 11 - . I.IImIi ll 1 llllll II 74 75 76 77 78 79 80 8182 83 84 85 86 87 88 89 90 9192 93 94 95 96 97 98 99 00 0102 03 04 05 06 07 08 09101112 13 1415 16 17 ¦ CAA I CERCLA ¦ CWA ¦ EPCRA ¦ FIFRA ¦ RCRA 1SDWA BTSCA Figure 1 1 ECHO does not include all of EPA's compliance and enforcement activity because regions are not required to report "informal actions," and it does not consistently capture all state actions. 2 U.S. EPA Office of Enforcement, March 1980. EPA-340/1-80-008. 2 ------- A. Number of Petroleum and Coal Product Manufacturing Industry Cases - ECHO data shows that from FY1974 through FY2017 there were over 2500 enforcement cases in the Petroleum and Coal Products Manufacturing industry. Clean Air Act (CAA) (53%) and Clean Water Act (CWA) (18%) cases were the most common. There are a dramatically smaller number of cases in the Resource Conservation and Recovery Act (RCRA) (9%), Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (8%), the Emergency Planning and Community Right-to-Know Act (EPCRA) (11%), and Toxic Substances Control Act (TSCA) (4%). As shown in Figure 1 above, the total number of enforcement cases per fiscal year exceeds 50 in 1985, peaks at over 300 in 1997, and returns to over 300 in 2017. Further information of the enforcement details on these cases can be found in the detailed background document "Data for Enforcement, Court Settlements and Judgments in the Petroleum and Coal Product Manufacturing Industry." a. Historical analysis of Petroleum Refining Compliance History - In the EPA Office of Compliance Sector Notebook Project - Profile of the Petroleum Refining Industry3, i. Exhibit 24 provides an overview of the reported compliance and enforcement data for the refining industry over a period of five years (August 1990 to August 1995). A few points were found at that time: 1. Almost all the facilities identified in the search were inspected during the five-year period. These facilities were inspected on average every three months. 2. The ratio of enforcement actions to inspections varied widely between EPA regions with little or no direct correlation to the number of facilities in the region or the proportion of state lead versus federal lead actions. 3. Those facilities with one or more enforcement actions had, on average, almost eight enforcement actions brought against them. ii. Exhibits 25 and 26 allow the compliance history of the petroleum refining sector to be compared to the other 16 industries covered by the industry sector notebooks. Points highlighted here are: 1. Of those sectors listed, the petroleum refining industry was the most frequently inspected industry. 2. The industry had a relatively large proportion of facilities with violations and enforcement actions, in comparison to the other sectors. 3. The rate of enforcement actions per inspection for the industry was relatively high B. Review of Enforcement Response Actions - Enforcement cases can include instances where removal action, release reduction, or return to compliance include the removal of contaminated media by the responsible party. Measures to remove contamination may be required in enforcement orders under the range of environmental statutes and are negotiated 3 EPA Office of Compliance Sector Notebook Project, Profile of the Petroleum Refining Industry, Sep 1995, EPA/310-R-95-013 3 ------- to require activities aligned with return to compliance4. In this situation, taking an enforcement action directly reduces risks to human health and the environment. During the period FY2011 through FY2016, 14 settled Petroleum and Coal Products Manufacturing industry enforcement cases were identified as those where removal of contaminated media occurred. They are primarily CWA (57%) cases. One CAA, two RCRA and three CERCLA cases are also included. The ECHO system data includes the combined value of separate total enforcement financial penalties, Supplemental Environmental Projects (SEPs) are environmentally beneficial projects that are not otherwise legally required, that have a close nexus to the violations and that a defendant/respondent voluntarily agrees to undertake as part of the settlement of an enforcement action), and associated compliance activity in flagged removal enforcement actions. To place enforcement removal orders in financial perspective, the sum of 14 cases noted above were valued at over $41M. These federal enforcement mandated removals mitigated risks to human health and the environment, by removing contaminated soils, groundwater and a variety of substances. In all, over 440K cubic yards of substances recovered included crude and other oil, diesel, and unspecified petroleum products. Over 2K cubic yards of soil contaminated with debris and volatile organic compounds, diesel, light non-aqueous phase liquids, crude and other oil, lead, hazardous waste, and asbestos was removed. Contaminated waters removed and treated were over 27K cubic yards, reducing volatile hydrocarbons, gasoline, crude and other oil. Details on these volumes and materials are included in the detailed background document "Data for Enforcement, Court Settlements and Judgments in the Petroleum and Coal Product Manufacturing Industry." C. Total value of enforcement settlements and judgements - Settlements and judgements in enforcement cases can result in financial penalties, SEPs and activities required to return to compliance. Enforcement settlements and judgments can ensure that the responsible party conducts or pays for cleanup, drive a return to compliance, and incentivize compliance. The total enforcement costs as exact penalty, exact SEP and estimated compliance activity values are included in the case summaries. Ordered case compliance activity can include the removal of media, installation of new equipment, or implementation of compliance processes. If all enforcement cases from FY1974 through FY2017 in the Petroleum and Coal Product Manufacturing industry, the total penalties are over $626M, the total SEPs are over $153M and the total compliance activity estimates are over $10B. D. Review of Major CERCLA and RCRA cases - Consideration was given to CERCLA and RCRA regulations as relevant components of the modern regulatory framework that applies to the Petroleum and Coal Product Manufacturing Industry. CERCLA and RCRA regulations require the protection and restoration of facility land resources. The first CERCLA/RCRA 4 These ECHO enforcement removals are identified separate from the Superfund removals analyzed elsewhere. ECHO system data includes the combined value of total enforcement financial penalties, Supplemental Environmental Projects (SEPs), and associated compliance activity. 4 ------- case in this industry was concluded in 1980, showing enforcement applicability under the existing modern regulations. The top CERCLA and RCRA case values for the Petroleum and Coal Products Manufacturing Industry enforcement cases have total compliance values ranging from over $13M to over $72M. As shown in Figure 2 below, the number of total CERCLA and RCRA enforcement cases per fiscal year averages over 10 annually, exceeds five in 1988, peaks at over 35 in 1997, and declines to less than 10 in 2017. One 2011 case specifically focused on CERLCA Financial Assurance responsibilities5 Fraud6 and bankruptcy7 cases were also concluded. Further information on the enforcement details on these CERCLA and RCRA cases can be found in the detailed background document "Data for Enforcement, Court Settlements and Judgments in the Petroleum and Coal Product Manufacturing Industry." Petroleum & Coal CERCLA and RCRA Enforcement cases 1980-2017 40 30 20 lO o . 1111 IIIIIII SO 82 84 86 88 90 92 94 96 98 OO 02 04 06 08 lO 12 14 16 ¦ CERCLA ¦ RCRA Figure 2 a. Conoco Phillips (CERCLA, 2005, $72M). The CERCLA order8 is a multi-regional, multi-statute, multi-facility, multi-plaintiff, nationally negotiated settlement including CAA and EPCRA violations. The remaining three enforcement orders from FY1984 through FY1993 are CAA and CWA, with values totaling over $3.7M. b. Dearborn Refining (CERCLA, 2011, $50M) While this facility did recycle used oil, it is listed primarily as a petroleum lubricating oil and grease manufacturer. The site 5 EPA BP Financial Assurance Settlement, 29 Nov 2011 accessed at https://www.epa.gov/enforcement/bp-financial- assurance-settlement 6 EPA Settlement Agreement in Anadarko Fraud Case accessed at https://www.epa.gov/enforcement/case-summarv- settlement-agreement-anadarko-fraud-case-results-billions-environmental 7 EPA Receives $14 Million for Cleanup Costs at Oklahoma Refining Company accessed at https://www.epa.gov/enforcement/case-summarv-epa-receives-14-million-cleanup-costs-oklahoma-refining- company-superfund 8 EPA ConocoPhillips Global Refinery Settlement accessed at https://www.epa.gov/enforcement/conocopliillips- global-refinerv-settlement 5 ------- was one of several responsible parties to two Chrysler/Carco CERCLA bankruptcy orders, totaling over $84M. The remaining three RCRA enforcement orders are from FY1986 through FY2004, with values totaling over $769M. These orders document that at least five oil tanks at the site were in poor condition, violating the RCRA hazardous waste regulations, and that the soil was saturated with oil. Site sampling by the Superfund Start team revealed soil contamination above industrial risk levels. c. Western Refining Yorktown (aka Amoco Oil) (RCRA, 2015, $35M) One of three CERCLA and RCRA orders from FY1991 through FY2015 at this site is a RCRA order associated with release of petroleum products into the environment. The order also requires the maintenance of financial assurance until the work required has been completed. In a FY2010 $190K CERCLA/EPCRA enforcement order, Western Refining failed to notify the National Response Center, the State Emergency Response Commission and the Local Emergency Planning Committee immediately following non-permitted releases of nitrogen dioxide and sulfur dioxide on February 5, 2007 and sulfur dioxide and hydrogen sulfide on April 22, 2007. Western Refining also failed to submit the requisite documents to the appropriate agencies for presence of extremely hazardous chemicals. The remaining three enforcement orders from FY1988 through FY2001 are CAA9, with values totaling over $769M. d. Chevron USA (Cincinnati Refinery) (RCRA, 2006, $30M) On November 1, 2006 U.S. EPA Region 5 issued an Administrative Order on Consent for Cleanup of Groundwater at the former Chevron refinery located near Hooven, Ohio west of Cincinnati. The final remedy called for source control through periodic high-volume pumping of groundwater in targeted areas to extract light non-aqueous phase liquids (LNAPL). Monitored natural attenuation was also conducted. Groundwater was tested regularly, and institutional controls were put in place to prevent groundwater use at the facility and construction of basements on Chevron property. A system to collect vapors from beneath the adjacent residential areas was operated, and the river bank stabilized to prevent the erosion of contaminated material into the Great Miami River. This action was recorded as mitigating 381K yd3 of contaminated soil, 8K yd3 of gasoline and 17K yd3 of LNAPL in ground water. e. El Paso CGP Company and El Paso Merchant Energy-Petroleum Company f/k/a Coastal Refining and Marketing, Western Refining (RCRA, 2002, $26M) The facility was ordered in 2002 to identify, investigate, contain and stop migration of contaminants, above remediation goals, into the Inner Harbor Ship Channel, and remediate hazardous wastes, hazardous constituents, hazardous substances and/or solid wastes that were released to the environment on or under the facility, and to ensure that corrective action activities are designed and implemented to protect human health and the environment. This order required El Paso to: (1) perform Interim/Stabilization Measures at the facility: (2) conduct a Facility investigation and conduct a Corrective Measures Study; and (3) implement the corrective measure or measures as required. The second FY1989 $65K RCRA order at the same site was 9 EPA Western Refining Settlement accessed at https://www.epa.gov/enforcement/western-refin.ing-clean-air-act- settlement 6 ------- directed to the previous owner, Coastal Refining and Marketing. In February 1986 EPA and February 1987 state inspections, hazardous waste from seperator sludge and slop oil emulsions were being placed in on-site surface impoundments. They were cited for operating without a permit, inadequate groundwater monitoring at the landfill and surface impoundment, inadequate closure cost estimates, financial assurance or financial responsibility for sudden occurrences, and inadequate training plans and records. In response to this order, the facility stated that they were unable to obtain financial assurance. The site was sold to El Paso in 2000. The remaining eight enforcement orders from FY1993 through FY2011 are CAA (5) and CWA(3), with values totaling over $2M. f. Berks Associates aka Douglassville (CERCLA, 2001, $22M) The site was a former oil and solvent reclamation facility which operated for approximately 40 years (1938- 85). Beginning in 1941, site operators kept waste oil sludge in on-site lagoons. The contents of these lagoons washed into the Schuylkill River during flooding in 1970 and 1972. Additionally, site operators land farmed sludge generated in the oil recycling process at the site. The operators stored about 700 drums, many leaking, at the site from 1979 to 1982. These activities contaminated site soil, sediment and groundwater. EPA initially estimated the remediation costs at $65M. The site was placed on the NPL in 1983 (PAD00238486). The 2001 CERCLA case awarded only $3.1M (in 2001 dollars) for federal cost recovery. Two additional 1997 CERCLA cases in 1997 were for access and claims against a specific responsible party. g. Coffeyville Resources Refining and Marketing aka Farmland Industries (RCRA, 2004, $19M) This order documents a bankruptcy referral to address issues with the firm's reorganization plan, based on the plan's failure to properly fund RCRA cleanup obligations at both the Coffeyville and Phillipsburg facilities. CERCLA orders in FY2009 and FY2010 document cost recovery orders totaling $248K, for recovery of past response costs. A multimedia CAA and RCRA case settled in FY2010 requires $70M in financial assurance for anticipated RCRA corrective actions at the refinery. The remaining nine enforcement orders from FY1996 through FY2016 are CAA10(6), EPCRA(2) and CWA, including a National Refinery Initiative multi-site case, with values totaling over $16M. Of the 14 total enforcement orders, three address bankruptcy and financial assurance issues with the firms and their associated site. h. Tennessee Products aka Velsicol/Chattanooga Coke/Southern Coke (CERCLA, 2005, $16M) This order to Velsicol and others was for $20M in cost recovery for EPA response actions (non-time critical removal) that were needed to clean up coal tar contamination discharged into waste water that reached the Chattanooga Creek through drainage ditches and sewer lines. As Tennessee Products, Velsicol, Chattanooga Coke and U.S. Xpress over the period of FY1996 through FY2008, the site has been the subject of seven CERCLA orders at a total of over $23M. The site was added to the Superfund NPL list (TND071516959) in 1995. The remaining three 10 EPA Coffeyville Settlement accessed at https ://www. epa. gov/e nfo rce me nt/coffevville-resonrces-refi ni ng~ ma rke t i n g-se tt te me nt 7 ------- enforcement orders from FY1981 through FY2012 are CAA(2) and CWA, total over $320K. Of the 10 total enforcement orders, five address bankruptcy and cost recovery issues with the firms and their associated site. i. SUNOCO Philadelphia Refinery (CERCLA, 2012, $15M) This order is a prospective purchaser agreement for the site, resolving CERCLA and RCRA claims at the former SUNOCO Refinery. It requires SUNOCO to provide EPA with financial assurance to complete RCRA corrective actions at the site. The additional four CERCLA and three RCRA orders from FY1998 through FY2010 include penalties for failure to notify following a non-permitted release of benzene on January 28, 2007, failure to submit the requisite documents to the appropriate agencies for extremely hazardous chemicals that were present, and RCRA violations regarding installation, release detection, monitoring, record keeping, improper operation, permitting and training for hazardous waste storage. The remaining nine enforcement orders from FY1984 through FY2013 are CAAU(5), TSCA(2), EPCRA and CWA, including a National Refinery Initiative multi-site case, with values totaling over $223M. Incidents at this site are also noted in the Refinery Accidents section of the background document "Petroleum and Coal Products Manufacturing Industry Practices & Environmental Characterization". j. Lyondell aka Houston Refining/Valero Houston Refining (CERCLA, 2010, $13M) This national bankruptcy case sought to address Lyondell environmental liabilities at all their sites. The FY1996 RCRA case documented failures to identify, label, date, test or prepare hazardous waste for shipment. Signs were not posted to warn personnel from entering active waste management areas and damage to impoundment basins was not repaired. In addition, there were failures to comply with regulations for the hazardous waste management unit, including closure tracking for each unit and the total facility, and failing to respond to indications of significant increases in hazardous concentrations or Ph decreases in the groundwater. The remaining seven enforcement orders from FY1994 through FY2015 are CAA12, with values totaling over $3M. E. Review of Relevant Criminal cases - EPA's criminal enforcement program focuses on criminal conduct that threatens people's health and the environment. It was established in 1982 and granted full law enforcement authority by Congress in 1988. They enforce the nations laws by investigating cases, collecting evidence, conducting forensic analyses and providing legal guidance to assist with prosecutions. Details on 21 completed cases are presented below, and involve releases of grease, oil, lead, asbestos, benzene, hydrogen sulfide and petroleum contaminated wastewater, and tampering with reports and emissions equipment. Criminal prosecutions in CAA, CWA, CERCLA, SWDA and fraud cases in the Petroleum and Coal Product Manufacturing industry include the following: 11 EPA Sunoco Petroleum Refinery Settlement accessed at https://www.epa. gov/enforcement/sunoco-petroleiun- refi ne rv -sett te me nt 12Valero Petroleum Refinery Settlement of 16 Jun 2005 accessed at https://www.epa.gov/enforcement/valero- petroteiim-refinerv-setttement 8 ------- a. On 13 Jun 1988, Shenango, Inc. pled guilty to six counts of negligently and willfully discharging pollutants into navigable water of the U.S., in violation of its NPDES permits and the CWA, and was sentenced to pay a $100,000 fine and a $100 assessment. A company environmental engineer pled guilty to knowingly submitting false information in a Discharge Monitoring Report (DMR), and was sentenced to pay a $10,000 fine and a $25 special assessment. Shenango, Inc. owns and operates a facility on Neville Island, Pittsburgh, Pennsylvania that produces coke and pig iron using a blast furnace, coke ovens, and other ancillary equipment. Shenango's industrial processes discharge wastewater into the Ohio River13. b. In June 1988, EPA assessed a civil penalty of $130K against Plateau, Inc. Plateau, Inc. was a New Mexico corporation headquartered in Albuquerque and operated refineries in Bloomfield, New Mexico and Roosevelt, Utah. Plateau was in the business of refining and blending petroleum products into gasoline and the retail sale of gasoline. In September and November of 1988, the vice president of Refining and Marketing for Plateau, Inc and a manager for Refinery Planning for Plateau, Inc both pled guilty to criminal conspiracy and making false statements reporting lead usage in the production of gasoline on the EPA report "Lead Additive Report for Refinery", in violation of CAA, Sec. 113(c)(2) [42 U.S.C. 7413(c)(2)]14 c. On 24 September 1993, Fields Products Incorporated was sentenced to 60 months' probation and ordered to pay a $200K fine. Fields Product, Inc. was in Tacoma, Washington and made asphalt roofing products. In May of 1990 approximately 3300 gallons of xylene was released into the environment from their plant. They pled guilty on 23 June 1993 to one count of violating CERCLA {42 U.S.C. 9603(b) - failure to notify}15. d. On 14 November 1994, three individuals pled guilty to misdemeanors of violating the CAA {42 U.S.C. 7413(c)(1)(C) - not following work practice standards}. The three defendants were involved in asbestos demolition work at the McMillan Petroleum Refinery. Most of the metal structures demolished at the facility were covered with friable asbestos insulation material. The defendants failed to adhere to the applicable emission and work practice standards for asbestos demolition16. 13 EPA Summary of Criminal Prosecutions from 1988 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.cfm?action=3&prosecution summary id=260 14 EPA Summary of Criminal Prosecutions from 1989 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.cfm?action=3&prosecution summary id=361 15EPA Summary of Criminal Prosecutions from 1993 accessed at https://cfpub.epa.gov/compliance/criniinal proseeution/index.cfm?action=3&proseeution summary id=522 16 EPA Summary of Criminal Prosecutions from 1995 accessed at https://cfpnb.epa.gov/compliance/criniinal proseeution/index.cfm?action=3&proseeution summary id=597 9 ------- e. On 16 June 1999, three individuals were indicted for making false statements or violating CERCLA {42 U.S.C. 9603(c) - failure to notify}. One of those indicted owns ESCM, Inc., an environmental consulting firm. From late 1993 until 1997, the three defendants engaged in the removal of asbestos-containing material during the demolition of the Shallow Water Refinery near Scott City, Kansas. The removal involved several illegal activities including failure to properly wet the asbestos- containing material before removal, failure to provide workers with protective clothing and failure to properly dispose of asbestos-containing material17. Improper removal of asbestos can cause asbestos fibers to become airborne. Inhalation of airborne asbestos fibers by workers can cause lung cancer, a lung disease known as asbestosis and mesothelioma which is a cancer of the chest and abdominal cavities. f. On 29 September 2000, Koch Industries and Koch Petroleum were indicted on 97 counts of violating Benzene NESHAP, CERCLA and making false statements {18 U.S.C. 1001}. Koch failed to install required devices at its West Plant refinery near Corpus Christi to control benzene emissions. The Thermatrix Thermal Oxidizer at the West Plant could not handle high levels of benzene fumes from two oil-water separators and vented large amounts of untreated benzene into the atmosphere in 1995. Koch failed to report these releases to the National Response Center. Benzene is a known cause of leukemia. Koch Petroleum's Vice President pled guilty on behalf of the company, to one count of violating 18 U.S.C. 1001. Koch Petroleum was sentenced to 60 months' probation, during which the company must comply with a CAA New Source Review Agreement and ordered to pay $10M in criminal fines and an additional $10M for community projects. Statutes involved in this case included the CAA, CERCLA and the Title 18 U.S. Criminal Code18. g. On 31 January 2001, Texaco Refining and Marketing, Inc. (TRMI) was charged with two counts of violating the CWA {33 U.S.C. 1319(c)(2)(A) - knowingly violates}. TRMI had its employees discharge wastewaters which contained oil and grease above permitted levels into the Dominquez Channel from a TRMI refinery in Los Angeles. On March 11, 1997, a TRMI employee, working at a service station in San Luis Obispo, directed contractors working for TRMI to discharge 2,000 to 8,000 gallons of petroleum-contaminated wastewaters into a storm drain that emptied into Prefumo Creek and then into the Pacific Ocean. The service station did not have a discharge permit. The discharge of oil into surface waters can, in enough quantity, create a fire hazard and can harm fish and other aquatic life. TRMI pled guilty to the two counts and was sentenced to 12 months' probation, ordered to pay a special assessment fee of $800, restitution to Los Angeles County Fire Department Haz-Mat, LA City Storm Water Management Division, San Luis Obispo Fire Department, Los Angeles 17 EPA Summary of Criminal Prosecutions from 2001 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.efm?action=3&proseeution summary id= .1.089 18EPA Summary of Criminal Prosecutions from 2001 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.efm?action=3&proseeution summary id= .1.079 10 ------- Regional Water Quality Control Board, Central Coast Regional Water Quality Control Board in the amount of $26K and a federal fine totaling $4M19. h. On 24 August 2000, Clark Refinery and Marketing, Inc, Environmental Monitoring and Technologies, and two individuals were indicted on charges of false statements. The defendants had a permit to discharge process wastewater containing a maximum concentration of 100 milligrams per liter of fats, oils and greases and a pH of between 5.0 and 10.0 into sewers operated by the Metropolitan Water Reclamation District of Greater Chicago, which empty into the Little Calumet River. Between 1993 and March 1997, the defendants conspired to not report violations of the permit. The discharge of wastewater with higher than permitted levels of pollutants and pollutants with high or low pH values can harm sewage treatment equipment, fish and wildlife. Clark Refinery was sentenced to 36 months' probation, ordered to pay an $800 special assessment fee and a $2M federal fine. Environmental Monitoring was sentenced to 36 months' probation, ordered to pay a $125 special assessment fee and a $50K federal fine. Both individuals were sentenced to probation, fees and fines.20 i. On 16 May 1997, an explosion occurred at Ashland Petroleum Refinery in St. Paul Park, Minnesota. Five Ashland employees were injured during the explosion, the explosion was blamed in part on an improperly sealed manhole cover that Ashland knew needed to be tightly sealed while draining hydrocarbons to the sewer. The company also submitted a certification to the Minnesota Pollution Control Agency two months after the explosion stating that the plant's sewer system was in compliance with the CWA. On 13 May 2002, Ashland was charged with three counts of violating the CAA {42 U.S.C. 7411(e) and 7413(c)(1), QQQ - New Source Performance Standards 7413(c)(4) negligent endangerment} and false certifications or writing, a violation of 18 U.S.C. 1018. On 23 December 2002, Ashland was sentenced to 60 months' probation and ordered to pay $3.75M in restitution to the five employees injured in the explosion and to several fire departments that responded to the explosion. Additionally, Ashland was ordered to pay criminal fine in the amount of $1.5M and pay $3.9M to the National Park Foundation for the benefit of the Mississippi River. Ashland was also ordered to upgrade their sewer system21. j. In February 2000, the Exxon Chalmette Refinery had a benzene release from the facility into the Mississippi River, in February 2000. The discharge entered the St. Bernard Parish waster system and Exxon failed to notify authorities until 14 days later. On 29 December 2005, Exxon was charged with one count of negligently 19 EPA Summary of Criminal Prosecutions from 2001 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.cfm?action=3&prosecution summary id= .1.020 20 EPA Summary of Criminal Prosecutions from 2002 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.efm?action=3&proseeution summary id=837 21 EPA Summary of Criminal Prosecutions from 2003 accessed at https://cfpub.epa.gov/compliance/criniinal proseeution/index.cfm?action=3&proseeution summary 11 ------- violating the CWA {33 U.S.C. 1319(c)(1)(A)}. They were later sentenced to pay a $125 special assessment fee and a $200K federal fine22. k. On 2 October 2001, Valley Asphalt was sentenced to 24 months' probation and ordered to pay a federal fine in the amount of $300,000. An individual was sentenced to 12 months' probation and ordered to pay a $25,000 federal fine. Valley Asphalt operates an aggregate mining pit on property it leases near Elberta, Utah. Asbestos containing material (ACM) originated from insulation removed from two tanks at the Valley Asphalt's Spanish Fork, Utah facility and was buried approximately two and a half years ago at the Elberta site. After having learned from sampling and testing that the insulation contained asbestos, an individual directed company employees to dig up and remove the ACM and to ship it via company-owned trucks back to the Spanish Fork facility. The employees were exposed to asbestos, a substance which can cause a lung disease called asbestosis, a type of cancer of the chest and abdominal lining called mesothelioma and lung cancer23. 1. On 13 December 2002, Koppers was sentenced to 36-months' probation, ordered to pay a special assessment fee of $1,200, restitution in the amount of $900,000 and a federal fine in the amount of $2.1 million. The case involved both the corporation and the former Environmental manager at Koppers Woodward Coke Plant in Dolomite, Alabama. The manager falsified DMR's and directed employees to tamper with the monitoring methods used at the plant. The manager was sentenced to 36 months' probation, ordered to pay a $100 special assessment fee and a $2,000 federal fine24. m. On 25 April 2007, an individual was charged with one count of knowingly violating the CAA {42 U.S.C. 7413(c)(2)}. Pursuant to the CAA, British Petroleum (BP) is required to check its refinery in Oregon, Ohio for vapor leaks. Vapor leaks can occur in values, pumps, compressors and other piping connections. Failure to find these leaks may cause the emission of volatile organic chemicals and other hazardous substances. A BP refinery employee was tasked to check components at the refinery for leaks. As part of checking for leaks, they would file monitoring data and sign a certification that the monitoring was conducted properly. Between June 18, 2003 and June 20, 2003, they submitted false monitoring data and certifications. The monitoring data and certifications were false because they did not check the refinery for leaks on those days. The individual pled guilty to the count and was sentenced to 22 EPA Summary of Criminal Prosecutions from 2006 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.cfm?action=3&prosecution summary id= .1.545 23 EPA Summary of Criminal Prosecutions from 2002 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.cfm?aetion=3&prosecution summary 24 EPA Summary of Criminal Prosecutions from 2003 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.cfm?action=3&prosecution summary id= .1.643 12 ------- 12 months' probation, ordered to pay a $100 special assessment fee and a $500 federal fine25. n. On 11 April 2007, Santa Maria (a subsidiary of Greka Energy Corporation), was charged with violating the Safe Drinking Water Act by intentionally pumping contaminated wastewater generated during the refining process into wells that were not permitted for that use. It also made false statements to EPA after admitting that one of its managers lied to EPA to convince the Agency that it was not injecting the wastewater into the ground for disposal purposes. Since April 2004, the officials at Greka Energy had been under investigation because of allegations that they had knowingly and routinely discharged oil refinery waste into a Class II underground injection well that is supposed to be used only to handle brine separated from crude oil during the refining process. This practice risked contaminating groundwater supplies. The wastes contained benzene, which can cause anemia, excessive bleeding and cancer, as well as affect the immune system. On June 11, 2007, the company was sentenced to 36 months' probation, ordered to pay a $800 special assessment fee, $15K in restitution to the U.S. EPA and a $1M fine26. o. On 12 December 2006, Sinclair Tulsa Refining Company and two of its managers admitted to knowingly manipulating the refinery processes, wastewater flows, and wastewater discharges to result in unrepresentative wastewater samplings during mandatory testing required under the CWA's National Pollutant Discharge Elimination System. The manipulated samplings were intended to influence results reported to the Oklahoma Department of Environmental Quality and EPA. On 4 April 2007, Sinclair was sentenced to 24 months' probation and ordered to pay federal fines in the amount of $5.5M. One manager was sentenced to 36 months' probation, ordered to perform 100 hours of community service, pay a $100 special assessment fee and pay a $160K federal fine. Another manager was sentenced to 36 months' probation, ordered to perform 50 hours of community service, pay a $100 special assessment fee and an $80K federal fine27. p. On 20 March 2008, CITGO Petroleum Corporation was charged with one count of violating the CWA {33 U.S.C. 1311(a) - violating a provision of the act}. They failed to maintain storm water tanks and failing to maintain adequate storm water storage capacity at its petroleum refinery in Sulphur, La. Because of these failures approximately 53,000 barrels of oil was discharged into the Indian Marais and Calcasieu Rivers following a heavy rain storm. In 1994, CITGO converted its lagoon 25 EPA Summary of Criminal Prosecutions from 2007 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.cfm?action=3&prosecution summary 26EPA Summary of Criminal Prosecutions from 2007 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.efm?action=3&proseeution summary id= .1.275 27 EPA Summary of Criminal Prosecutions from 2007 accessed at https://cfoub.epa.gov/compliance/criminal proseeution/index.cfm?action=3&proseeution summary 13 ------- waste water system into a tank system for handling excess waste water and storm water. To trim costs, only two storm water tanks were constructed, but as early as 1998, employees and outside contractors advised that an additional tank was necessary. Despite being advised of the inadequate storage capacity, CITGO did not approve construction of a third tank until 2005. In addition, the company failed to follow standard procedures for maintaining the tanks. During its operations, CITGO failed to remove oil, sludge and solids from the tanks and failed to repair the skimming equipment. Failing to follow these procedures allowed for the build-up of a significant amount of oil in the storm water tanks, which contributed significantly to the overflow. Between June 19 and June 20, 2006, a heavy rainstorm overwhelmed the capacity of the two existing tanks and forced oil that had collected in the tanks out and into the two rivers. The illegal discharge resulted in limited commercial transportation on the water ways for approximately 10 days. On 17 September 2008, Citgo was sentenced to 12 months' probation and ordered to pay a $13M federal fine. Along with the fine, CITGO will implement an Environmental Compliance Plan (ECP) by which it will take measures to ensure a spill of this type will not occur in the future. The ECP includes new reporting requirements within the corporate structure regarding environmental issues and tank maintenance, the completion of the third storage tank and the installation of new and more effective oil removal equipment for the storm water tanks28. q. Following the 23 March 2005 Texas City Oil Refinery Explosion, BP Products North America Inc., agreed to plead guilty to a felony violation of the CAA. As part of the 12 March 2009 guilty plea, BP has agreed to pay a $50M criminal fine, the largest ever assessed under the CAA, and serve three years of probation. The catastrophic explosion, which resulted in the death of 15 contract workers and injuries of over 170 others, was the result of hydrocarbon liquid and vapor being released from a "blowdown stack" and igniting during the startup of a unit that is used to increase octane content in unleaded gasoline. The unit had been shut down for nearly a month for maintenance and repairs. BP admitted that from 1999 up until the morning of March 23, 2005, several procedures required by the CAA for ensuring the mechanical integrity and a safe startup had either not been established or were being ignored. This was the first prosecution under a section of the CAA specifically enacted to prevent accidental releases that may result in death or serious injury. The provision was passed by Congress in 1990 in response to an explosion that occurred at the Union Carbide chemical plant in Bhopal, India resulting in thousands of injuries and deaths. It requires facilities such as the BP Texas City Refinery to ensure that "release prevention, detection, and correction requirements" are followed to prevent catastrophic explosions29. 28 EPA Summary of Criminal Prosecutions from 2008 accessed at https://cfpnb.epa.gov/compliance/criniinal prosecution/index.cfm?action=3&prosecntion summary id= .1.836 29 EPA Summary of Criminal Prosecutions from 2009 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.efm?action=3&proseeution summary id= .1.933 14 ------- r. On 5 June 2009 Red Giant Oil Company, Council Bluffs, Iowa, was sentenced to pay a $5K criminal fine and $9.8K in restitution after pleading guilty to violating the state of Iowa's Clean Water Act. The company, which operates a small bulk oil storage facility and refinery in Council Bluffs discharged oil from one of its tanks into a storm drain that flows into Mosquito Creek, a tributary to the Missouri River30. s. On 30 April 2010 an individual was sentenced to three years of probation for falsifying a monitoring device and method. The air-monitoring technician, on November 12, 2004, knowingly falsified the reading of a monitoring device by designating refinery pumps in Commerce City, Colo, as temporarily out of service when in fact they were not. They pleaded guilty in U.S. District Court in the District of Colorado. Refineries are required to have a Leak Detection and Repair (LDAR) program under the CAA to control fugitive emissions. They were employed by Integrated Processing Resources - Environmental Monitoring Services (EMS) and assigned to travel around the Suncor Energy petroleum refinery taking air-monitoring readings. It was discovered that many pumps at the Commerce City refinery had been designated as temporarily out of service instead of monitored properly31. t. In a joint factual statement filed in court, Pelican Refining Company, headquartered in Houston, admitted that the company had knowingly committed criminal violations of its operating permit at the refinery located in Lake Charles, La. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the EPA, which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal CAA in Louisiana. On 15 December 2011, Pelican was sentenced to pay a $12M penalty, which includes a $10M criminal fine and $2M in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. The criminal fine was the largest ever in Louisiana for violations of the CAA at the time. Pelican was also prohibited from future operations unless it implements an environmental compliance plan, which includes independent quarterly audits by an outside firm and oversight by a court appointed monitor. Pelican admitted32 to the following: i. Pelican had no company budget, environmental department or environmental manager; 30 EPA Summary of Criminal Prosecutions from 2009 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.cfm?action=3&prosecution summary id=1910 31 EPA Summary of Criminal Prosecutions from 2010 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.efm?action=3&proseeution summary id=2019 32 EPA Summary of Criminal Prosecutions from 2012 accessed at https://cfpub.epa.gov/compliance/criniinal proseeution/index.cfm?action=3&proseeution summary id=2239 15 ------- ii. To comply with a permit issued under the CAA, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated; iii. It was a routine practice for over a year to use an emergency flare gun to re- light the flare tower at the refinery designed to burn off toxic gases and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses; iv. Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank; v. A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed; vi. A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly; and vii. Pelican provided false information to the states of Louisiana and Texas concerning the laboratory testing of asphalt. u. On 29 July 2015, Gulf Coast Asphalt Company, LLC entered a plea to two counts of an information charging violations of the Oil Pollution Act and Migratory Bird Treaty Act. These charges relate to an oil spill that occurred on September 1, 2011, and ultimately ended up in the Mobile River. The discharge of oil was caused by an over- fill of oil during a tank to tank transfer when employees pumped oil into the receiving tank under pressure. Because employees miscalculated the tank volume of the receiving tank prior to the transfer and engaged in the transfer of oil without employing proper procedures, the tank ruptured, and oil was released into a secondary containment area and ultimately into the Mobile River. Because of this discharge of oil, the Mobile River was closed to ship and vessel traffic by the United States Coast Guard and fish and wildlife were negatively impacted. As part of the plea agreement Gulf Coast Asphalt Company, LLC has agreed to pay a total of one million dollars in criminal penalties. $667,000.00 will be paid in a criminal fee. The remaining penalty in the amount of $333,000.00 will be in the form of an organizational community service payment to the National Fish and Wildlife Foundation. The community service payment shall be applied by the National Fish and Wildlife Foundation to fund projects for the preservation and restoration of waterways and marine wildlife in and around the Southern District of Alabama. Gulf Coast Asphalt Company, LLC also agreed to pay restitution in the amount of $292,000.00 to the United States Coast Guard and $75,000.00 to the Alabama Department of Conservation and Natural Resources, Wildlife and Freshwater Fisheries Division. These penalties and restitution are collected above the statutory requirement under the Oil Pollution Act 16 ------- that the responsible party for the oil spill pays the expense of the environmental cleanup and environmental remediation33. v. On 15 November 2012, Team Industrial Services, Inc. (Team) was sentenced to five- year's probation, ordered to pay a $200K fine and complete an Environmental Compliance Plan on the company. Team, a company that provided leak detection and repair services, as required by the CAA, at a refinery near Borger, Texas, admitted that it negligently released hazardous pollutants into the ambient air and thereby negligently placed others in danger of death or serious bodily injury. As part of its plea agreement with the government, Team agreed to develop and implement an Environmental Compliance Plan to specifically address its leak detection and reporting activities to comply with the CAA's leak detection and repair regulations. In addition, Team also acknowledged that its facility on Florida Street in Borger is being placed on the EPA's List of Violating Facilities, and as such, will be ineligible for any federally-funded contracts, grants or loans, until EPA removes it from that list. According to documents filed in the case, on specific occasions in 2007 through 2009, certain Team employees working at the refinery knowingly failed to follow required protocols while conducting emissions monitoring of certain refinery components. The employees also manipulated testing data to falsely represent emissions monitoring events that were not performed. Their negligence in failing to properly monitor these refinery components enabled the release of emissions into the ambient air and thereby negligently placed others in imminent danger of death or serious bodily injury. A Team supervisor knew the emissions monitoring data were false, yet this supervisor, and another Team employee, altered the emissions monitoring database to falsely represent emissions monitoring events to the EPA and the Texas Commission on Environmental Quality that resulted in false representations/certifications to those agencies34. w. On 13 Nov 2012, an individual was sentenced to 1-day incarceration and 12 months supervised release. From 2005 until mid-2010, he was a certified emissions observer for a coke battery owned by DTE Energy Services, Inc., located on Zug Island, in River Rouge, Michigan. Coke batteries emit dangerous and highly toxic air contaminants during various stages of coke production. Starting early in his employment, he began a pattern of absences, which he covered up by providing false paperwork purporting to report the emissions readings he was hired to perform. His attendance worsened over the years and by 2010 he showed up at work no more than six times over a period of several months. In addition to numerous coke battery emissions readings, he falsified records concerning quench water, which tells operators how well the facility's air pollution control equipment is working and leak- 33 US DOJ Southern District Press Release accessed at https://www.iustice.gov/usao-sdal/pr/gulf-coast-asphalt- eompanv-enters~giiitt¥~ptea~viotations~oit~pottntion~aet~and 34EPA Summary of Criminal Prosecutions from 2013 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.efm?aetlon=3&prosectition summary id=2688 17 ------- testing for hazardous air pollutants at the coke battery pipe systems, as required by the EPA's LDAR (leak detection and reporting) regulatory program.35 x. On 19 Mar 2014, Tonawanda Coke Company (TCC) was sentenced for violating both the CAA and RCRA and required to pay a $12.5 million penalty and $12.2 million in community service payments. The fine was one of the largest fines ever levied in an air pollution case involving a federal criminal trial. The community service payment funded an epidemiological study and an air and soil study to help determine the extent of health and environmental impacts of the coke facility on the Tonawanda community. In addition, the TCC Environmental Control Manager was convicted of 11 counts of violating CAA, one count of obstruction of justice and three counts of violating RCRA, was sentenced to one year in prison, 100 hours of community service, and a $20,000 fine. According to evidence presented at trial, TCC released coke oven gas containing benzene into the air through an unreported pressure relief valve. In addition, a coke-quenching tower was operated without baffles, a pollution control device required by the CAA permit designed to reduce the particulate matter that is released into the air during coke quenches. Prior to an inspection conducted by EPA in April 2009, the manager told another TCC employee to conceal the fact that an unreported pressure relief valve, during normal operations, emitted coke oven gas directly into the air, in violation of TCC's operating permit. The defendants also stored, treated and disposed of hazardous waste without a permit to do so, in violation of RCRA. These offenses related to TCC's practice of mixing its coal tar sludge, a listed hazardous waste that is toxic for benzene, on the ground in violation of hazardous waste regulations.36 y. On 11 August 2016, a 58-year-old man who conspired to evade more than $3.3M in federal fuel excise taxes was ordered to federal prison after eight years on the run. This individual was originally charged with the conspiracy on July 9, 2007. He pled guilty April 14, 2008. He was also charged and convicted in state court on charges related to the same scheme. However, prior to sentencing in both cases, he fled the country. Authorities issued a federal arrest warrant in February 2009, followed by an Interpol Red Notice. In 2014, he was located in Israel and subsequently extradited to the United States. He was ordered to serve 60 months in federal prison and ordered to pay $3.3M in restitution. He was the sixth and final defendant to be sentenced on related fuel tax investigations. The original 2007 indictment charged him and two other individuals with conspiring in a multi-million dollar fuel excise scheme executed in Texas and Louisiana between October 2001 and November 2003. The indictment alleged that the fuel excise tax scheme involved the acquisition of more 35EPA Summary of Criminal Prosecutions from 2013 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.efm?action=3&proseeution summary id=2502 36EPA Summary of Criminal Prosecutions from 2014 accessed at https://cfpub.epa.gov/compliance/criniinal prosecution/index.efm?action=3&proseeution summary id=2555 18 ------- than 13M gallons of kerosene from Calcasieu Refinery in Lake Charles, Louisiana, without paying federal excise taxes. The defendants were able to avoid paying the excise tax by falsely stating the fuel was for export, as opposed to for on-road use. The kerosene was then allegedly trucked to Houston, where it was blended with middle distillate oil, a by-product of asphalt production. The resulting blend was eventually sold to various retail gas stations in and around the Houston area, where it was sold to consumers as diesel fuel. The retail stations collected the federal diesel fuel excise tax from their customers at the filling pump. The other two individuals subsequently pleaded guilty and, in 2009, were sentenced to 60 months in prison and 12 months and one day in prison, respectively. Additionally, they were also ordered to pay more than $3M in restitution to the IRS. In a related investigation, the first individual and two additional individuals were charged in 2011 with a similar fuel excise tax scheme involving Calcasieu Refinery. The charging instrument alleged they and others obtained tax-free kerosene from Calcasieu during 2004 by falsely claiming the fuel would be used only for agricultural and other off-road uses. Instead, the kerosene was trucked to Houston, blended with other agents and sold at stations as diesel fuel. The stations allegedly involved in the fraud included Normandy Truck Stop, Cobra Shell, Channelview Conoco and Wayside Conoco. In 2013, all three individuals pleaded guilty and received probationary sentences. Two individuals were ordered to pay $650K in restitution to the IRS. In 2010, the first individual had been added to the EPA's Most Wanted List. His capture in Israel was the result of collaborative efforts on the part of the IRS-CI, Immigration and Customs Enforcement, Department of Transportation, EPA, U.S. Marshals Service, Travis County District Attorney's Office and the State of Texas Comptroller's Agency37. F. Relevant class specific focused federal initiatives - One way that EPA's Office of Enforcement and Compliance Assurance (OECA) focuses enforcement and compliance resources on the most serious environmental violations is with enforcement initiatives that develop and implement national program priorities. Enforcement initiatives are an important tool for identification of noncompliance and subsequent actions to compel return to compliance. Additionally, these initiatives emphasize use of the full range of compliance assurance tools, not only enforcement, and can thereby reduce risk by helping facilities prevent releases that might otherwise be caused by noncompliance. In recent years, facilities in the Petroleum and Coal Products Manufacturing industry were included in two initiatives: a. National Petroleum Refinery Initiative (NPRI) - The Petroleum Refinery Initiative is one of the most successful enforcement initiatives ever undertaken by EPA38. The EPA selected the petroleum refinery industry as one of its National Enforcement Initiatives (NEIs) in 1996. In its 1996/1997 Memorandum of Agreement guidance, 37 EPA Summary of Criminal Prosecutions from 2016 accessed at https://cfpnb.epa.gov/compliance/criniitial prosecution/index.cfm?action=3&prosecution summary id=2867 38 EPA Comments of 2 Apr 2004 on EPA OIG Report 2004-P-00021 of 22 June 2004 19 ------- OECA ranked petroleum refineries number one for noncompliance and identified petroleum refining as one of three national enforcement priorities. OECA maintained refineries as a national priority and began working with regional officials to explore ways to address compliance issues. The EPA set a compliance goal for the NPRI that companies subject to NPRI consent decrees would achieve a 50 percent improvement in compliance over the 1995 baseline. The EPA intended that its NPRI strategy's companywide consent decrees, or legally binding agreements, would lead to improved compliance and reduced harmful air pollutants or emissions as companies changed environmental management practices and reduced their emissions. The NPRI achieved broad industry coverage by addressing compliance problems on a companywide basis as opposed to a facility-by-facility approach. The companywide strategy used a proactive approach to solving compliance problems by focusing on technology-based solutions to prevent noncompliance. A significant tactic of the refinery program involved pulling together EPA staff with knowledge about the refinery industry. These staff attended training on the refinery process, reviewed trade journals, and met with industry officials to learn about refineries. In addition, OECA identified four national technical leads for the priority areas and ensured national consistency in investigations and negotiations. Technical expertise increased credibility with the industry and helped immensely during negotiations. The refinery program demonstrated that a single program with experts from EPA headquarters and regional offices working together operated more effectively than having each region and headquarters working alone. OECA negotiated with refinery companies and offered an incentive in the form of relief from past liabilities to persuade the industry to sign consent decrees39. Petroleum refineries account for significant releases of pollutants into the environment during the complicated industrial process that refines crude oil into petroleum products. Refineries emit 75 percent of their pollutants into the air. These pollutants contribute to smog, acid rain, climate change, and bioaccumulation in mammals and fish eaten by humans. These pollutants also contribute to cardiovascular and respiratory disease, and cancer in humans. Between 1994 and 1995, the EPA conducted nationwide inspections of 109 petroleum refineries. The inspection results identified widespread CAA compliance challenges, with violations in 70 percent of refineries. Through inspections and additional research, the EPA identified four major areas where refineries did not comply with the law: i. Emissions from major refining units that were incorrectly permitted as "minor" sources, were unpermitted, or did not have Best Available Control Technology installed (New Source Review/Prevention of Significant Deterioration requirements for fluidized catalytic cracking units, heaters and boilers). 39 EPA OIG Report 2004-P-00021 of 22 June 2004 20 ------- ii. Fugitive emissions associated with leaks from refinery equipment, e.g., valves, pumps and connectors (New Source Performance Standards for leak detection and repair). iii. Uncontrolled and unreported benzene waste (National Emission Standards for Hazardous Air Pollutants). iv. Use of flaring for routine purposes instead of on an emergency basis, and indications that some emissions during emergency events were in excess of applicable limits (New Source Performance Standards Subparts A and J). Because a single company may operate many individual refineries, the EPA negotiated with companies instead of facilities under the NPRI. This enabled the agency to cover all a company's facilities in one negotiation. The negotiations resulted in legally enforceable consent decrees, which established companywide and facility-specific compliance expectations and reporting requirements. For example, the companies agreed to change environmental management practices, reduce their emissions, and provide the EPA with regular certified progress reports for all company facilities. The certified progress reports provided the EPA with information about refinery performance, emissions and progress toward completing consent decree requirements. The consent decrees also included requirements that a company's refineries must demonstrate they have paid all stipulated penalties and achieved compliance with the established emissions limits for 12 consecutive months. An Enforcement Alert on Petroleum Refinery RCRA requirements was issued in April 1999, highlighting to the industry new waste listings, waste determination requirements and RCRA air emissions requirements40. In May 2000 EPA issued an Enforcement Alert on a voluntary Storage Tank Emission Reduction Partnership Program with the American Petroleum Institute41. In return for participation, EPA agreed to eliminate any penalties from companies that agree to audit, disclose, and correct leaks on above ground storage tanks. In October 2000, an Enforcement Alert on routine flaring was issued42. At petroleum refineries, flares are used in a variety of process areas to prevent hydrocarbons and waste gases from being released directly. The results of this program were periodically shared with the industry and the public43. As of March 2004, the program resulted in refineries agreeing to invest more than $1.9 billion in pollution control technologies, pay civil penalties of $36.8M, and implement supplemental environmental projects valued at approximately $25M. The EPA officially concluded the NPRI in 2007, when 80 percent of the refining facilities were under a consent decree. The agency then returned enforcement of the petroleum refinery industry back to the EPA's core 40 EPA 300-N-99-003 Enforcement Alert Petroleum Refineries 41 EPA 300-N-00-007 Enforcement Alert EPA Announces Clean Air Act Compliance Incentive Program Developed with API 42 EPA 300-N-00-014 Enforcement Alert Frequent, Routine, flaring May Cause Excessive, Uncontrolled Sulfur Dioxide Releases 43EPA Press Release of 21 Mar 2001 accessed at https://archive.epa.gov/epapages/newsroom archive/newsreleases/349f4d32322bee6f85256a.l.6006.13d84.html 21 ------- enforcement program. By the end of January 2011, the EPA established consent decrees covering 28 refining companies (105 refineries) that accounted for 90 percent of the national industrial capacity. A timeline for this activity is shown in Figure 3 44 More information on the EPA's national Petroleum Refinery Initiative can be found at EPA's website45. Additionally, the September 2015 Compliance Alert46 provided information on engineering and maintenance practices causing compliance concerns in this industry. 44 EPA OIG Report No. 14-P-0184 45 EPA Petroleum Refinery National Case Results accessed at https://www.epa.gov/enforcement/petroleum-refinerv- national-case-re suits 46 EPA Compliance Alert of Sep 2015, "EPA Observes Air Emissions from Controlled Storage Vessels at Onshore Oil ...ProductionFacilities" 22 ------- Figure 3 Timeline for the NPRI 1995 EPA inspect5 1G9 petroleum refineries to identify romplKincc trends. 1=19 G EPA designates the «etirule j:n rrfinei y sector ji An NEi. JfXTO 1 consent tfeeree signed: Koch | D refineries! 2001 20Q2 XlOi- 5 consent detrsci signed: Lion(l r^finer-v") E rgon (2 reHnenesli Cheuran 15 re4ineriei|> CHS Inc. (Ceitexl 111 efinerv) ¦Cc^tri I Foglf Point '!1 refinr ry> 5 tonse-nt decree-? lignthd: BP is refineries^ Conoco (4 refir»er»e5-> Navajo- Montana f3 refineries} Mttttva-Equilon- Oc^rr P.urk fSrefinencsJ Marathon Ashland Petroleum | ? ref> ner es-Ii ?004 J.JO& 2QO& war 2208 2HQ9 5 consent decrees signed: ¦3ia n112 refineries! ?.lJrn>CO f4 n?fine rie51 Valero (14 refineries || ExxonMobil (7 refineries I Conoi"C>Phillip5 (13 refir-priflsj 3 consent decrees signed: "otal Petrochemicals [1 refinery!" HuiWftefining I 3 refineries I Valena/Premeor I 3 ref inertes'' Z consent decrees i^wd; Frontier I 2 refineries | Wyoming 11 refinery) 1 consent draw signed: CTTOO | 5 refirfcerkrs) EPA returns the petro-leun* refinery sector tnjck i-o- the agency's tort enforcement p-rojgrarm, 2010 iaii 2042- 2 consent decrees suited; Havenu 11 refinery] Western (1 refineryl 2 consent decree; signed: Sniclalr 13 retirer»es> Holly II refinery> 2 consent decrees, signed: Shell (3 refineries) fcfi crphyOil (2 refineries) 4 consent decrees issued: BP \AJhiti ng (1 refinery) Hets Corporation 11 refinery) ColfeyvflleHesources Refining, & Marketing (J refinery) Marath-ar. P-etraieum 5 Catletcsburg Ref> n (6 refrneriesj 2013 and Beyond £Pfi rnntinuct to bring other carr panict under con^snt decree. f PA a ka tantinuis oversight work lor monitoring pfO£«'ess towards cement decree requirements, Source: OIG analysts and summary. 23 ------- b. Ensuring Energy Extraction Sector Compliance with Environmental Laws - Since FY 2011 this initiative focused on significant public health and environmental problems: exposure to significant releases of volatile organic compounds, reducing C AA non- attainment, and reducing water quality impairment. EPA and state investigations identified concerns regarding significant emissions from storage vessels at onshore oil refinery and other facilities. To discuss certain engineering and maintenance practices and potentially address compliance concerns and reduce emissions, a Compliance Alert was released in Sep 201547 Figures 4 and 5 below detail some of the initiative inspection and enforcement results from FY 2011 through FY 201748. An average of 11% of federal inspections resulted in enforcement activity. FY2016 was the lowest enforcement rate at 6% and FY2015 the highest at 19%. Please note that initiative case population and statistics presented are not limited to the Petroleum and Coal Products Manufacturing industry. Annual Number of Energy Extraction Facilities Subject to Concluded EPA Enforcement Actions 1 no I ~ 121 _ 8 107 I. i ¦ ¦ Mini FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Fiscal Year Figure 4 47EPA Compliance Alert of Sep 2015, "EPA Observes Air Emissions from Controlled Storage Vessels at Onshore Oil ...ProductionFacilities" 48 National Compliance Initiative: Ensuring Energy Extraction Activities Comply with Enviromnental Laws FY 2019 Update accessed at https://www.epa.gov/enforcement/national-compliance-initiative-ensuring-energy- extraction-activities-complv 24 ------- Annual Number of Energy Extraction Facilities with EPA Inspections/Evaluations 609 871 6 36 7 SI 5 915 71 613 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Figure 5 25 ------- |