Historical Enforcement and Compliance Data on the Petroleum and Coal
Product Manufacturing Industry
US Environmental Protection Agency
Office of Land and Emergency Management
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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
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. 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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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