Bloomberg News

Chevron Under EPA Probe for Avoiding Refinery Monitors in 2009

September 25, 2012

Chevron Corp. (CVX:US), which paid $170,000 to settle California pollution allegations at a refinery, may face more penalties including prison sentences for employees stemming from a federal investigation of the case.

The Environmental Protection Agency is investigating actions at the company’s Richmond, California, refinery after local officials in 2009 determined that pollution controls were bypassed, according to company and local officials.

The Bay Area Air Quality Management District, which enforces air-pollution rules in nine counties near San Francisco, discovered Chevron employees routed gas emissions around monitoring equipment then burned off the excess, violating local rules. The agency forced the company to end the practice it said was used at least 27 times in four years, said Wayne Kino, the district’s enforcement manager. Chevron paid a $170,000 penalty to settle the agency’s civil case.

“It now appears that EPA has chosen to take that case” as a criminal prosecution, Kino said yesterday in an interview. “There are indications that they are investigating, but they don’t talk about it.”

A flaring system is used in emergencies to eliminate gases that could be increasing to dangerous levels, Kino said. Refineries had been flaring gas for routine maintenance before the local air quality board imposed standards in 2004, he said.

A criminal prosecution might mean further fines or even jail time for employees involved at the Richmond refinery. A total of 249 individuals or companies were charged last year after an EPA criminal investigation. Agency prosecutions last year resulted in sending violators to prison for 89.5 years and fines of $35 million.

‘Currently Cooperating’

The EPA doesn’t comment on pending investigations, Alisha Johnson, a spokeswoman for the agency, said in an e-mail.

“We are currently cooperating with the government’s investigation,” Sean Comey, a Chevron spokesman, said in an e- mail. The company estimates total emissions identified by the state agency at about 200 pounds of sulfur dioxide, compared with total sulfur-dioxide emissions in the Bay Area of 25 million pounds annually.

“This was certainly not done intentionally,” Comey said yesterday during a news conference at the refinery called to discuss an unrelated Aug. 6 fire there. “Safety and protecting people and the environment is one of our core values as a company and we take that responsibility very seriously.”

The refinery resolved the issue three years ago by rerouting a pipe through a metered system, Nigel Hearne, manager of the Richmond plant, said during the news conference. He described the pipe as an “equalization line” that helps control pressure buildup at the refinery.

The August fire injured five workers and forced the company to shut a unit at the Richmond plant.

Chevron said yesterday that it suspects that a phenomenon known as sulfidation corrosion caused a pipe to rupture and led to the fire. The refinery is inspecting all similar pipes and has found at least one that must be replaced, Hearne said.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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