2009: So Far, A Big Year for USEPA Enforcement Penalties

As EHS audit programs have matured over the past 25 years, most companies that have established such programs have generally achieved the desired goal of reduced violations and financial penalties.  But in the current economic climate, companies have been looking at all costs and their justifications.  EHS audit activities are also under the microscope.  The reduction in noncompliance costs over time – a good thing – can sometimes trigger questions from senior management about what value EHS auditing is creating NOW – a bad thing.

Answering such questions adequately depends on the individual company, but the threat of future violations (which are more likely to occur without corporate compliance oversight/auditing/reporting activities) is a common thread.  Elm took a look back at USEPA’s enforcement announcements thus far in 2009 to see if any notable trends could be identified.

Our review was not exhaustive and was limited to publicly available information on federal EPA activities.  But there is no question that EPA’s 2009 data clearly show aggressive enforcement involving many multi-million dollar settlements.  This summary information may be useful to those EHS audit programs that use enforcement data as an economic risk/value factor in rationalizing the continuation of audit activities.

–       Oct. 5 – Mosaic Fertilizer will spend approximately $30 million on air pollution controls and will also pay a civil penalty of $2.4 million to resolve alleged Clean Air Act violations

–       Oct. 3 – A federal judge fined Southern Union Gas $18 million for illegally storing mercury at a company-owned site in Pawtucket, R.I.  The penalty involves a $6 million criminal fine and $12 million in fines.  This case is also notable due to the third-party vandalism that resulted in spreading the mercury beyond Southern Union’s property.

–       Aug. 14 – A pipeline company and two of its former operating firms will jointly pay a civil penalty of $3.65 million to resolve violations of the Clean Water Act resulting from anhydrous ammonia spills. Magellan Ammonia Pipeline, of Tulsa, Okla.; Enterprise Products Operating, of Houston, Texas; and Mid-America Pipeline Company, also known as MAPCO, also of Houston, agreed to the settlement.

–       Aug. 4 – Aleris International Inc. and 13 of its subsidiaries have committed to implementing environmental improvements and controls projected to cost $4.2 million at 15 plants located in 11 states. The company also agreed to a $4.6 million civil penalty to resolve violations of the Clean Air Act, which will be allowed as an unsecured claim in Aleris’s bankruptcy proceeding pending in Delaware.

–       July 31 – The former and current owners and operators of a chemical facility in Addyston, Ohio, LANXESS Corp. and INEOS ABS USA Corp., agreed to pay a $3.1 million civil penalty and INEOS will spend up to $2 million to install environmental controls and modify operating procedures to resolve violations of multiple environmental laws.

–       May 7 – Anadarko Petroleum Co., and two related oil production companies agreed to pay a civil penalty of more than $1 million and implement injunctive relief, develop facility response plans, and revise spill prevention as well as containment plans at a cost of more than $8 million during the term of the settlement in order to resolve violations of the Clean Water Act.  Anadarko, Howell Corp., and Howell Petroleum Corp., agreed to pay $1.05 million and will upgrade and implement appropriate spill prevention plans and develop and implement facility response plans. The consent decree also requires the companies to implement a multi-phased integrity and mitigation plan that incorporates inspection, monitoring, testing, data collection and failure analysis activities.

–       Apr. 20 – DuPont and Lucite International Inc. agreed to pay a $2 million civil penalty to settle Clean Air Act violations at a sulfuric acid plant in Belle, W. Va. Further, the companies chose on their own to shut down the sulfuric-acid manufacturing unit of a larger chemical facility at the site by April 1, 2010.

–       April 13 – Invista will pay a $1.7 million civil penalty and spend up to an estimated $500 million to correct self-reported environmental violations discovered at facilities in seven states.  The company disclosed more than 680 violations of water, air, hazardous waste, emergency planning and preparedness, and pesticide regulations to EPA after auditing 12 facilities it acquired from DuPont in 2004.

–       Feb. 19 – BP Products North America Inc. agreed to spend more than $161 million on pollution controls, enhanced maintenance and monitoring, and improved internal management practices to resolve Clean Air Act violations at its Texas City, Texas refinery.  The company will also pay a $12 million civil penalty and spend $6 million on a supplemental project to reduce air pollution in Texas City.

–       Feb. 10 – Two petroleum refiners agreed in separate settlements to spend a total of more than $141 million in new air pollution controls at three refineries in Kansas and Wyoming. Frontier Refining and Frontier El Dorado Refining (Frontier) agreed to pay a civil penalty of $1.23 million and spend approximately $127 million in pollution control upgrades for alleged violations at its refineries in Cheyenne, Wyo. and El Dorado, Kan. Wyoming Refining Co. (WRC) agreed to pay a civil penalty of $150,000 and spend approximately $14 million in similar upgrades for alleged violations at its Newcastle, Wyo. refinery.

–       Feb. 5 – Patriot Coal Corporation agreed to pay a $6.5 million civil penalty to settle violations of the Clean Water Act.  The settlement includes the third largest penalty ever paid in a federal Clean Water Act case for discharge permit violations.

–       Feb. 3 – Kentucky Utilities (KU), a coal-fired electric utility, agreed to pay a $1.4 million civil penalty and spend approximately $135 million on pollution controls to resolve violations of the Clean Air Act.

–       Jan. 15 –  CEMEX California Cement LLC paid a $2 million civil penalty for emissions violations at the company’s Victorville, Calif., Portland cement plant.  The plant also is spending millions of dollars on new air pollution control equipment.

–       Jan. 12 – Three manufacturers of sulfuric acid agreed to spend at least $12 million on air pollution controls at six production plants in Louisiana, Ohio, Oklahoma, Texas, and the Wind River Reservation in Wyoming. Chemtrade Logistics, Chemtrade Refinery Services, and Marsulex also will pay a civil penalty of $700,000 under the Clean Air Act settlement.

–       Jan. 8 – The Explorer Pipeline Company agreed to pay a $3.3 million civil penalty in order to resolve an alleged violation of the Clean Water Act stemming from a spill of jet fuel from its interstate pipeline at a location near Huntsville, Texas.

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