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AQMD SEEKS $319 MILLION FINE FROM BP FOR AIR POLLUTION VIOLATIONS

March 13, 2003

At Carson Refinery

The Southland’s air quality agency filed a civil lawsuit this week seeking $319 million from BP/ARCO for thousands of air pollution violations over an eight-year period at the company’s Carson refinery.

“This is by far the largest penalty every sought by AQMD,” said Barry Wallerstein, executive officer of the South Coast Air Quality Management District.

“We are seeking more than $300 million from BP/ARCO because the company committed thousands of violations involving excess air pollution while routinely submitting records to AQMD that showed no violations.”

AQMD’s attorneys filed the civil complaint for $319,265,000 against BP West Coast Products LLC this week in Los Angeles County Superior Court’s Central Division.  The 109-page complaint specifies three main categories of air pollution violations at the company’s Carson oil refinery between 1994 and 2002:

  • Submittal of false inspection reports and failure to maintain an inspection and maintenance program for floating roof tanks under AQMD’s Rule 463, resulting in excess emissions from the tanks;
  • Failure to sample pollutant gases in refinery flares, as required by AQMD’s Rule 1118; and
  • Two incidents that resulted in strong odors, a public nuisance and evacuation of nearby schools.

Voluntary Tank Inspection Program

In 1990, AQMD conducted a pilot program for refineries to self-inspect their petroleum storage tanks to address the need for efficient use of field inspectors in the face of increasingly complex rules and requirements.  ARCO and 11 other companies participated in the highly successful program, which resulted in compliance rates rising from 86 percent to 97 percent.

In 1994, AQMD amended its Rule 463 to require self-inspections by all companies with above-ground storage tanks for volatile liquids such as gasoline, crude oil and jet fuel.  The inspections and any required maintenance were meant to prevent the leakage of volatile organic compound (VOC) vapors.  VOCs combine with oxides of nitrogen to form ground-level ozone, a harmful pollutant responsible for Southern California’s dubious reputation as smog capital of the nation.

Starting in the mid-1990s, oil companies eliminated their in-house inspectors and hired outside contractors to perform the tank inspections.  AQMD officials became suspicious when reviewing BP/ARCO inspection reports from 1999 to 2002 that showed no tank problems and virtually no repairs.

In June 2002, AQMD inspectors attempted to inspect storage tanks at BP/ARCO’s refinery, but company officials refused to allow them entry on several occasions.  AQMD then obtained an inspection warrant from Superior Court and executed the inspection on June 24 with the assistance of the Los Angeles County Sheriffs.

Inspectors found that more than 80 percent of the tanks inspected violated AQMD’s Rule 463, due to numerous leaks, gaps, torn seals and other defects that caused excess violations.  Inspectors issued a total of 12 Notices of Violation documenting thousands of counts of air pollution violations.

Floating roofs – which literally float on the surface of oil -- are used on some petroleum storage tanks to eliminate an empty space in the tank where polluting vapors can form and escape.  External floating roof tanks at BP are used primarily to store crude oil, gasoline, gasoline-blend components, MTBE and slop oil/water.

Most of the lawsuit’s 54 causes of action allege violations at 26 of the refinery’s storage tanks.  The lawsuit alleges the violations occurred every day from Sept. 14, 1994 – the day the self-inspection requirement took effect -- until June 20, 2002, when AQMD notified the refinery that AQMD intended to inspect the refinery’s tanks.  Under California’s Health and Safety Code, each air pollution violation is subject to various maximum daily penalties depending on its duration, whether excess emissions occurred and the state of mind of the violator.

In addition, the lawsuit contends that:

  • From Jan. 1, 2000 through October 2001, BP/ARCO failed to sample and reported to AQMD the constituents of its flare gases, as required by AQMD’s Rule 1118; and
  • On Dec. 6, 2001, and Jan. 25, 2002, strong odors from the refinery caused a public nuisance and severely affected students at nearby schools including Broad Avenue Elementary School and Wilmington Middle School, both in Wilmington.

“We hope this lawsuit and any penalty recovered will serve as a strong deterrent to other companies violating air pollution regulations and thereby endangering the public’s health,” Wallerstein said.

He further noted that any penalties recovered will go into air pollution control projects or health studies related to air pollution.

AQMD is the air pollution control agency for Orange County and major portions of Los Angeles, San Bernardino and Riverside counties.

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