Environmental and Energy Law Blog

Saturday, November 18, 2017

ExxonMobil and PDC Energy Settle Clean Air Act Claims

Exxon Mobil Corp. recently agreed to pay a $2.5 million civil penalty to settle a lawsuit brought by Department of Justice for alleged Clean Air Act (CAA) violations at petrochemical manufacturing facilities in Texas and Louisiana. In a related development, Denver-based PDC  Energy Inc. also agreed to pay $2.5 million for alleged CAA violations stemming from emissions of volatile organic compounds from its oil and gas exploration and production business.

The Exxon Settlement

According to the Environmental Protection Agency (EPA), ExxonMobil illegally emitted thousands of tons of volatile organic compounds and toxic air pollutants, such as benzene from 26 flares at five plants in Texas and three in Louisiana. Flares are designed to burn and dispose of gases that are produced by industrial manufacturing processes. The five facilities in Texas were located near Baytown, Beaumont, and Mont Belvieu, while all three Louisiana plants were located in Baton Rouge.

In addition to the civil penalty, Exxon agreed to spend around $300 million on new air pollution control and monitoring technology. The energy company will also spend about $1 million to plant new trees near the Baytown facility. Exxon denied any wrongdoing in the settlement, and its spokesman Aaron Stryk said the company worked closely with the government to resolve the matter.

“These investments, which include flare monitoring equipment and flare gas recovery systems, will help improve flare efficiency at these chemical facilities,” Stryk said in a statement. 

Nonetheless, environmental groups contend that ExxonMobil got off easy and the fines were merely a slap on the wrist.

“These mild fines are tiny compared to the colossal wealth of fossil fuel elites, and will only embolden Exxon and its ilk in exploiting our planet for profit,” said Lindsay Meiman, a spokeswoman for 350.org.

The PDC Energy Settlement

PDC, which owns and operates hundreds of oil and gas production facilities in the Denver-Julesburg Basin, was sued by the Trump Administration in June. The EPA claimed that the company violated the Clean Air Act and Colorado air pollution rules by failing to design, operate and maintain control systems on 80 batteries of condensate storage tanks. The resulting leaks contributed to smog and excessive ozone levels in the area.

The EPA and Colorado authorities requested the lawsuit after state inspections from 2013-2105 revealed the CAA violations. PDC President and Chief Executive Bart Brookman said the agreement was the result of months of conversations with state and EPA regulators. In its settlement, the company denied any liability and also agreed to spend about $18 million on systems upgrades and another $1.7 million to mitigate the problems.

The Takeaway

While the EPA’s Office of Enforcement and Compliance Assurance believe that the settlements are examples of the Trump Administration’s commitment to enforcing environmental laws, it remains to be seen whether there will be further enhanced enforcement of the CAA and and other environmental regulations. In any event, the energy sector continues to be heavily regulated and resolving disputes ultimately requires the advice and counsel of experienced health, safety and environmental attorneys.


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