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CITGO to pay $19.7 million fine for 2006 spill into Calcasieu River

Updated: Jun. 17, 2021 at 11:48 AM CDT
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Lake Charles, LA (KPLC) - CITGO will pay a $19.7 million fine for a June 2006 oil spill into the Calcasieu River, the U.S. Department of Justice announced Thursday.

The fine was for damages to natural resources from a major oil discharge into the Calcasieu River from the wastewater treatment facility at CITGO’s Lake Charles refinery, according to the information from the Department of Justice.

“At least 54,000 barrels of slop oil (2,268,000 gallons) and untold millions of gallons of oily wastewater breached the faulty secondary containment berm around the tanks and flowed into the waterways, including the adjacent Indian Marais waterway, the Calcasieu River and the Calcasieu Estuary.”

The $19.7 million accounts for damages under the Oil Pollution Act and the Louisiana Oil Spill Prevention and Response Act.

Also in connection with the 2006 spill, CITGO has previously been ordered to pay $3 million to the Louisiana Department of Environmental Quality for the discharge and chronic violations of the company’s discharge permit, an $81 million civil penalty under the federal Clean Water Act, and a $13 million criminal fine.

A complaint filed by the United States and Louisiana alleges that millions of gallons of waste oil and oily wastewater were discharged from two 10-million gallon storm surge and wastewater tanks, resulting in the pollution of approximately 150 miles of shoreline.

“The discharged oil killed birds and fish and other aquatic life, contaminated aquatic and shoreline habitats, forced the closure of the ship channel, and disrupted recreational uses of the impacted river and lakes.”

The tanks overflowed during a rainstorm due to a lack of proper operations and the inadequate storage and treatment capacity at the facility, a district court found.

Of the $19.7 million, $19.16 million is for natural resources damages and $528,000 is for remaining unpaid injury assessment costs to designated federal trustees for the natural resources: the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration and the U.S Department of the Interior’s Fish and Wildlife Service.

The trustees will use the $19.16 million for restoration projects

“In an earlier related Clean Water Act enforcement trial spearheaded by the United States on behalf of the Environmental Protection Agency, the district court determined that the cause of this avoidable disaster was CITGO’s gross negligence in the operation and maintenance of its wastewater treatment facility and the lack of adequate storage and treatment capacity. CITGO had been improperly using the tanks to accumulate oil, sludge and oily wastewater at its treatment facility for years. Due to the lack of proper operations and the inadequate storage and treatment capacity at the facility, the tanks overflowed during a rainstorm.”

“The court found that CITGO ‘does not appear to have recognized the importance of compliance, pollution control, environmental responsibility, and the overall duty imposed on businesses to operate safely.’ The court found that CITGO’s oil spill was ‘massive, excessive, and a tragedy’ and that CITGO ‘failed to inform the Coast Guard of the true nature of the incident.’ CITGO was ordered to perform substantial corrective actions to improve its wastewater treatment facility’s storage and treatment capacity and operations, to pay a state penalty of $3 million to the Louisiana Department of Environmental Quality for the discharge and chronic violations of the company’s discharge permit, and to pay a federal Clean Water Act civil penalty of $81 million. Under a separate criminal plea agreement, CITGO paid a $13 million criminal fine.”

Statement from CITGO:

CITGO is pleased to reach this voluntary settlement with various federal and state agencies, providing $19.16 Million to fund environmental restoration planning and projects, as a result of a spill caused by the 2006 heavy rain event at our Lake Charles, La. refinery. Protecting our natural resources is a core value for the Company. We promptly responded to the spill, invested significant resources to implement early restoration, and assisted the Trustees with evaluating the impacts. Additionally, we made significant improvements in our plant, policies and procedures to prevent this type of event from happening again. We understand it is a privilege to operate in our communities, and we will continue working to ensure our operations are safe for our people and our environment.

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