Texas oil company fined $12M for violations in Louisiana

Michael Tremoglie Dec. 20, 2011, 9:00am

WASHINGTON — Houston, Texas-based Pelican Refining Co. has been fined $12 million for felony violations of the Clean Air Act at its Louisiana refinery.

A federal judge in Lafayette, La., imposed the fine – the largest ever in Louisiana for violations of the Act – after the company pleaded guilty in October. The violations were committed at Pelican's Lake Charles, La., facility, and criminal charges also include obstruction of justice.

"Facilities have a responsibility to protect their employees and local residents by following our nation's environmental laws," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Corporations that choose to cut corners and ignore these critical safeguards will face significant consequences."

According to an announcement from the Department of Justice on Dec. 15, Pelican admitted that the company had knowingly committed criminal violations of its operating permit at the refinery. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the Environmental Protection Agency (EPA), which identified numerous unsafe operating conditions.

"This corporation operated without even the most basic requirements of an environmental compliance plan and endangered the public and its own employees by implementing unsafe practices in violation of its permit and reporting requirements," said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. "Today's plea demonstrates that the Justice Department will continue to vigorously prosecute those who violate environmental and workplace safety laws."‬

The EPA also announced that Pelican is "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 also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana. It admitted that there was not a company budget or organizational infrastructure for environmental quality. It also admitted to not having the prerequisite environmental equipment.

Employees routinely used an emergency flare gun to re-light the flare tower at the refinery designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly. This occurred for over a year. The employees would take turns trying to shoot the flare gun to relight the explosive gasses.

In addition, Pelican admitted to violations which included the storage of sour crude oil in a tank that was not properly placed into service and remained in the tank after the roof sank; bypassing a caustic scrubber designed to remove hydrogen sulfide from emission; not repairing a malfunctioning continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions; and furnishing false to both Louisiana and Texas concerning the laboratory testing of asphalt.

The fine includes a $10 million criminal penalty and $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring.

It was also announced that Byron Hamilton, the Pelican vice-president who oversaw the Lake Charles refinery operations since 2005 pleaded guilty on July 6, to negligently placing persons in imminent danger of death and serious bodily injury as a result of negligent releases at the refinery. He could receive one year in prison and a $200,000 fine for each of the two Clean Air Act counts.

Mike LeBleu, the former asphalt facilities manager, pleaded guilty to a negligent endangerment charge under the Clean Air Act on Oct. 31.

The EPA said that the government's investigation of the Pelican Refinery is still ongoing.

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