The CITGO Petroleum Corporation has agreed to spend $323 million to install and implement state-of-the-art control technologies to reduce emissions at its refineries in five states, the federal government and the company announced Wednesday.
The Justice Department and the U.S. Environmental Protection Agency (EPA) said the Clean Air Act settlement with CITGO is expected to reduce harmful air emissions by more than 30,000 tons per year from six petroleum refineries that represent nearly five percent of total refining capacity in the United States.
To meet its obligations under the Clean Air Act's New Source Review program, CITGO will cut emissions from its largest emitting units through the use of up-to-date technologies.
The affected CITGO refineries are located in Lemont, Illinois; Lake Charles, Louisiana; Corpus Christi, Texas; Paulsboro, New Jersey; and Savannah, Georgia.
The CITGO refinery in Corpus Christi, Texas (Photo courtesy U.S. Coast Guard)
The New Source Review program is a set of regulations that requires factories, processing plants, refineries and utilities to obtain specialized permits and install state-of-the-art controls when new plants are built and when certain major changes are made to existing plants.
Based in Houston, CITGO is owned by PDV America, Inc., a unit of Petróleos de Venezuela, the national oil company of Venezuela.
While CITGO has not admitted to any of the violations with which it is charged, the company says it elected to settle the case and move forward with the environmental projects beginning in 2005.
“CITGO has an unwavering commitment to operating our facilities in full compliance with environmental regulations,” said CITGO President and CEO Luis Marín.
“These additional improvements will ensure that the corporation reaches its goal of becoming an exceptional environmental steward. We have been diligently working with EPA towards this settlement because we want to proceed with the implementation of the projects,” said Marín.
CITGO's actions under this agreement are expected to reduce annual emissions of nitrogen oxides (NOx) by more than 7,184 tons and sulfur dioxide (SO2) by more than 23,250 tons.
Luis Marín joined CITGO in August 2003 as President and CEO. (Photo courtesy MIT)
The agreement will also require reductions of volatile organic compounds and other hazardous air pollutants at all CITGO refineries. The air pollutants addressed by the agreement can cause serious respiratory problems and exacerbate cases of childhood asthma.
In addition, at each of its refineries, CITGO will implement programs to reduce excess emissions associated with flaring of hazardous gases, reduce emissions from its sulfur recovery plants through the installation of controls to ensure the proper treatment of hazardous benzene wastes and upgrade its leak detection and repair practices.
The settlement comes as the Bush administration faces broad criticism from environmentalists, public health advocates and state pollution control officers over its enforcement of the nation's clean air regulations, in particular the New Source Review.
A report released last week by the EPA's Inspector General found the administration's revisions to the New Source Review provisions of the Clean Air Act have "seriously hampered" ongoing litigation, out-of-court settlements, and new enforcement actions against coal-fired electric utilities.
But administration officials say they are committed to enforcing the law.
“Today’s settlement means we’re one step closer to bringing all of America's oil refineries into compliance with our Clean Air Act standards, which means cleaner air for our communities and citizens,” said Thomas Sansonetti, assistant attorney general for the Justice Department’s Environment and Natural Resources Division.
The states of Illinois, Louisiana, New Jersey and Georgia are joining the settlement, which is part of EPA’s national effort to reduce air emissions from refineries.
CITGO sign near Fenway Park, Boston (Photo credit unknown)
The consent decree also requires CITGO to pay a $3.6 million civil penalty and spend more than $5 million on a supplemental environmental project to further reduce NOx and carbon monoxide emissions at its Corpus Christi refinery. The states joining the settlement will share in the penalties.
In Louisiana, the agreement calls for CITGO to pay $750,000 as a civil penalty to the state.
The company is also responsible for making reductions in emissions of sulfur dioxide by 6,040 tons per year, nitrogen oxide by 775 tons per year and particulate matter by 365 tons per year at its Lake Charles refinery.
The Lake Charles refinery’s violations stem from benzene emissions in 1999, volatile organic compound leak detection and repair issues in 2002 and three unauthorized releases of sulfur dioxide in 2003, according to the Louisiana Department of Environmental Quality.
In New Jersey, CITGO's asphalt refinery in Paulsboro must reduce emissions of nitrogen oxides by 18 tons per year, as well as implement an enhanced volatile organic compound (VOC) leak detection and repair program and reduce the limits on its VOC emissions.
The Paulsboro plant will also have to implement protocols to minimize toxic emissions from benzene waste operations and to burn lower sulfur fuels, which emit less sulfur dioxide and fine particles.
The settlement calls for emission reductions of air pollutants as well as a $100,000 penalty to be paid to New Jersey, said the state Department of Environmental Protection (DEP).
"This settlement with CITGO will reduce emissions of harmful, smog causing pollutants and sends another clear message to polluters to clean up their act," said DEP Commissioner Bradley Campbell.
The EPA is pursuing emissions reductions from many of the nation's oil refineries. (Photo by Christy Shake courtesy EPA)
"This settlement will require CITGO to substantially reduce its emissions of air pollutants that aggravate childhood asthma and contribute to serious respiratory ailments among the elderly," said New Jersey Attorney General Peter Harvey.
“The CITGO settlement is the 12th reached by the EPA under its Petroleum Refinery Initiative since December of 2000,” said Thomas Skinner, EPA acting assistant administrator for enforcement and compliance assurance.
“Settlements under EPA's Petroleum Refinery Initiative have reduced emissions of air pollutants by 200,000 tons per year at 48 refineries in 24 states that collectively account for more than 40 percent of domestic refining capacity," Skinner said.
Over the past three years, the United States has reached similar agreements with Chevron, Motiva Enterprises, Equilon (Shell) and Shell Deer Park Refining, Marathon Ashland Petroleum, Koch Petroleum Group, BP Exploration & Oil, Conoco, Costal Eagle Point Oil Company, CHS Inc. (Cenex), Lion Oil, Ergon Refining and Navajo Refining Co.
The CITGO consent decree filed Wednesday in U.S. District Court for the Southern District of Texas is subject to a public comment period, and final court approval.