CITGO Fined $13M for Polluting Louisiana Rivers

LAKE CHARLES, Louisiana, September 18, 2008 (ENS) – CITGO, a Delaware corporation, pleaded guilty Wednesday and was sentenced to pay a $13 million fine for the negligent discharge of pollutants into two rivers in Louisiana in violation of the Clean Water Act.

Justice Department officials said the fine is the largest ever for a criminal misdemeanor violation of the Clean Water Act.

CITGO pleaded guilty in U.S. District Court in Lake Charles, Louisiana, for negligently failing to maintain stormwater tanks and failing to maintain adequate stormwater storage capacity at its petroleum refinery in Sulphur, Louisiana.

As a result of these failures approximately 53,000 barrels of oil was discharged into the Indian Marais and Calcasieu Rivers following a heavy rainstorm.

In 1994, CITGO converted its lagoon waste water system into a tank system for handling excess waste water and stormwater. In order to trim costs, only two stormwater tanks were constructed, but as early as 1998, employees and outside contractors advised that an additional tank was necessary.

Despite being advised of the inadequate storage capacity, CITGO did not approve construction of a third tank until 2005.

In addition, the company failed to follow standard procedures for maintaining the tanks. During its operations, CITGO failed to remove oil, sludge and solids from the tanks and failed to repair the skimming equipment.

CITGO refinery near Lake Charles,
Louisiana (Photo courtesy CITGO)

Failing to follow these procedures allowed for the build-up of a significant amount of oil in the stormwater tanks, which contributed to the overflow.

Between June 19 and June 20, 2006, a heavy rainstorm overwhelmed the capacity of the two existing tanks and forced oil that had collected in the tanks out and into the two rivers.

The illegal discharge resulted in 10 days of limited commercial transportation on the waterways.

“CITGO failed to properly maintain and operate equipment designed to prevent oil spills,” said Granta Nakayama, assistant administrator for the U.S. EPA’s Office of Enforcement and Compliance Assurance. “Companies that harm the environment and their community as a result of their own negligence will be prosecuted and pay a heavy price.”

Along with the fine, CITGO will implement an Environmental Compliance Plan by which it will take measures to ensure a spill of this type will not occur in the future.

The plan includes new reporting requirements within the corporate structure regarding environmental issues and tank maintenance, the completion of the third storage tank and the installation of new and more effective oil removal equipment for the stormwater tanks.

“Companies cannot make economic choices that sacrifice the environment,” said Ronald Tenpas, assistant attorney general for the Justice Department’s Environment and Natural Resources Division. “Sound business decisions must factor in the safeguard of the environment or companies will face consequences that in the long run are more detrimental to their bottom line.”

“The protection of the environment is among our highest priorities,” said Donald Washington, U.S. attorney for the Western District of Louisiana. “We will not allow corporations or their employees to escape liability for failing to do their part in preventing harm to the environment.”

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