CITGO Petroleum, Subsidiary Found Guilty of Clean Air Act Violations
A federal jury in Corpus Christi, Texas, found CITGO Petroleum Corp. and its subsidiary, CITGO Refining and Chemicals Co. (collectively CITGO), guilty of two felony criminal violations of the Clean Air Act, the U.S. Justice Department (DOJ) announced on June 27.
CITGO was convicted on two counts of operating two huge open top tanks, Tanks 116 and 117, without installing the proper emission controls required by federal law at its Corpus Christi East Plant Refinery. The tanks were used as oil water separators but were not equipped with either a fixed-roof, vented to a control device or a floating-roof. Oil water separators upstream of the tanks never worked to remove the oil from the wastewater before the oil entered the tanks. CITGO learned within months after the two tanks went into operation that the upstream oil water separators did not work.
For nearly 10 years, CITGO removed oil from the surface of tanks with vacuum trucks and did not take the steps necessary to install proper emission control equipment to prevent the emission of volatile organic compounds, including benzene, from the tanks, DOJ officials said. Hundreds of thousands of barrels of oil were vacuumed from the two tanks over the years. During an unannounced inspection by Texas Commission on Environmental Quality (TCEQ), a 10- foot layer of oil was discovered in tank 116 and a 7.5 foot layer of oil in tank 117. TCEQ determined that there was 4.5 million gallons of oil in the tanks.
"CITGO violated the law when it failed to install and operate proper emissions control equipment," said Ronald J. Tenpas, acting assistant attorney general for DOJ's Environment and Natural Resources Division. "The convictions are a strong signal to the industry that emissions controls are not optional and those who knowingly disregard the regulations will face the consequences."
Granta Y. Nakayama, EPA's assistant administrator for the Office of Enforcement and Compliance Assurance, stated: "CITGO failed to install required emissions controls, which emitted benzene, a known carcinogen, into the air. This jury conviction sends a clear message that neither the public nor the government will allow corporations to knowingly break the law and pose a risk to the local community and the environment."
While other refiners have faced criminal charges, they have settled before facing a jury. CITGO was indicted along with environmental manager Philip Vrazel by a federal grand jury in Corpus Christi on Aug. 9, 2006. The indictment contained four felony counts of violations of the Clean Air Act (CAA), one felony count of false statements and five misdemeanor counts of the Migratory Bird Treaty Act (MBTA). The MBTA charges were severed and Vrazel and the company will be tried on July 9, 2007.
The court has yet to determine whether government will be able to go forward on the false statement charge.
The companies were acquitted of two counts of relate to not having roofs on two wastewater equalization tanks. CITGO officials said that EPA regulations do not require roofs on wastewater equalization tanks. Though not required to do so, CITGO voluntarily initiated the construction of roofs on the equalization tanks in 2004, officials said.
The convictions will have far-reaching effects, according to CITGO. "Members of the industry must now be concerned that the self- reporting rules intended for regulatory purposes are now used in criminal prosecutions, on a selective basis, by the Justice Department," CITGO officials stated. "It is unfortunate that the Justice Department has chosen to take the unprecedented step of pursuing criminal charges on matters that are purely regulatory in nature and that are inconsistent with applicable EPA regulations."
Sentencing for CITGO is scheduled for Oct. 18, 2007. The company faces fines of up to $500,000 per count or twice the gross economic gain (whichever is greater) and five years of probation.
For more information, contact DOJ's Environment and Natural Resources Division at http://www.usdoj.gov/enrd.
This article originally appeared in the 07/01/2007 issue of Environmental Protection.