ExxonMobil Ordered to Pay $20 Million for Excess Air Pollution in Houston

A federal judge in Texas recently ordered ExxonMobil to pay nearly $20 million for emitting millions of  pounds of excess air pollution from its Baytown industrial facility 25 miles east of Houston. The sprawling 3,500 acre complex is the site of a refinery, and chemical, olefins and plastics plants (olefins production is used as building blocks for other chemicals, plastics, and fibers).

The Backdrop

In 2010, the energy company was sued by the Sierra Club and Environment Texas, claiming that the Baytown facility emitted more than 8 million pounds of hazardous chemicals and other pollutants, exceeding the limits  allowed by state and federal law and clean air permits. The federal Clean Air Act allows citizens to bring lawsuits for violations of emissions standards or limitations.

However, U.S. District Judge David Hittner found that only a small fraction of ExxonMobil's emissions were significant enough to warrant legal action. In his 2014 ruling, Judge Hittner did not assess any penalties against the energy giant.

In May 2016,the U.S. Court of Appeals for the Fifth Circuit vacated the ruling and remanded the case to Judge Hittner. The appellate panel ordered the judge to reassess the penalties based on the correct number of actionable violations. In sum, Hittner ordered ExxonMobil to pay $21.3 million, plus plaintiff's attorneys fees, but subtracted $1.4 million in fines that had already been assessed by the Texas Commission on Environmental Quality (TCEQ).

Some observers believe that is the largest penalty arising from a citizen suit in U.S. history. For its part, ExxonMobil disagreed with the court's decision, saying in a state that it "will consider legal options including appeal of the court's decision."

"ExxonMobil's full compliance history and good faith efforts to comply weigh against assessing any penalty," the statement said.

The Takeaway

This lawsuit is another in a series of citizen suits that environmental groups have filed against energy companies, including Shell and Chevron, for excess air pollution in recent years. Unlike the others that entered into multi-million settlements, however, ExxonMobil took this case to trial. A key issue in many of these cases is an affirmative defense raised by energy companies to the effect that excess emission events are unavoidable due to malfunctions or maintenance.

At this juncture, it remains to be seen whether ExxonMobil will appeal the decision or what the long-term implications of this ruling will be. It is also unclear whether the environmental groups that brought this action will use the award for the betterment of residents in the neighboring community. In any event, this case highlights the need for energy production companies to comply with the Clean Air Act.