Petrol giant Chevron to pay record fine for Clean Air Act violation

Chevron has agreed to pay $7 million after a court case with the US government over leakages of volatile organic compounds at its offshore loading terminal near El Segundo in California.

The settlement includes a $6 million penalty, the highest ever paid under the Clean Air Act for a single facility, and environmental improvement projects valued at $1 million, including a health clinic for respiratory diseases, the US Government’s Environmental Protection Agency (EPA) and the Justice Department announced on 23 August.

The agreement, part of a consent decree lodged in the US District Court in Los Angeles, requires Chevron to pay $500,000 to help build and operate the clinic in Wilmington, California, to diagnose and treat respiratory diseases. The facility will provide medical care to people in the South Coast Air Basin who have experienced health problems that can be traced to air pollution.

“This settlement sends a strong message that any company violating the Clean Air Act rules to reduce smog will pay a heavy price. This is especially so in the Los Angeles area, which has one of the most serious smog problems in the nation,” said Lois J. Schiffer, Assistant Attorney General for Environment and Natural Resources at the Department of Justice. “Our citizens are entitled to breathe clean air, and compliance with the Clean Air Act is not optional.”

San Francisco-based Chevron also has agreed to spend $500,000 to install leakless valves and double-sealed pumps at its El Segundo refinery. These devices are effective at preventing significant emissions of air contaminants.

“Besides paying a significant penalty for failing to control harmful emissions in the past, Chevron will improve technology at the terminal to reduce emissions in the future. People who live in the vicinity of the terminal will literally be able to breathe easier from now on”, said Steve Herman, EPA’s Assistant Administrator for Enforcement and Compliance Assurance.

The EPA originally filed a suit against EPA in November last year after Court action was taken by the EPA after it alleged that volatile organic compounds (VOCs) were escaping into the atmosphere as petroleum products were transferred to marine vessels from underwater pipelines connected to the Chevron refinery. The emission of VOCs, which cause smog and aggravate respiratory diseases, exceeded levels prescribed under the Clean Air Act. This was the second such suit levelled at Chevron in as many years.

The 1995 regulations require companies to achieve a 95 percent reduction in VOC emissions from marine terminals, but Chevron’s El Segundo facility was found to have not used the technology required to meet this reduction.

The settlement also prohibits Chevron from using its marine terminal until the EPA and Chevron agree on a plan to keep air emissions so low that they are not required to be controlled. Until then, the company will conduct its petroleum-loading operations at a third party’s marine terminals, which are equipped with emissions-control equipment required by the Clean Air Act and California’s regulations.

Chevron stressed that the agreement neither assigned nor implied any wrongdoing on its part. “Chevron operated in good faith and thought it was in full compliance with appropriate air emission rules,” General Manager of the El Segundo Refinery Gary Yesavage said.

“One of our primary core business values at Chevron is protecting people and the environment. We are disappointed that we did not take the extra step needed to ensure we were meeting all requirements of this complex regulatory system”, Yesavage added.

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