Featured Victory- Landmark Settlement with Shell Oil

(Roy Luck/Flickr/Creative Commons)

ENVIRONMENTAL GROUPS AND SHELL OIL COMPANY PROPOSE LANDMARK SETTLEMENT OF CLEAN AIR ACT LAWSUIT

Shell Would Cut Illegal “Upset” Emissions by Hundreds of Thousands of Pounds Annually at Deer Park, Texas, Refinery and Chemical Plant Shell Would Pay $5.8 Million Civil Penalty, a Record for Citizen Enforcement Suits Precedent-Setting Agreement Would Require Extensive Plant Upgrades, Additional Emission Reductions, Enhanced Emission Monitoring

Houston, TX – On June 16, 2009, U.S. District Judge David Hittner signed a precedent-setting consent decree settling NELC’s Clean Air Act lawsuit against Shell Oil Company and two affiliates. The consent decree requires dramatic air pollution reductions, extensive plant upgrades, and enhanced monitoring of air emissions at Shell’s Deer Park, Texas, refinery and chemical plant, and imposes a record penalty for a citizen enforcement suit.

“This settlement represents a major victory in the fight for clean air on Texas’s Gulf Coast,” said Josh Kratka, NELC’s lead attorney on the case. “It also demonstrates the crucial role that citizens can and sometimes must play in the enforcement of our environmental laws.”

The lawsuit, filed in January 2008, is the first in Texas in which citizen groups sued to stop illegal air emissions arising from so-called “upset” events: equipment breakdowns, malfunctions, and other “non-routine” occurrences.

The suit, filed on behalf of plaintiffs Environment Texas and Sierra Club, alleged that the Shell facility had committed more than 1,000 separate Clean Air Act violations since 2003, resulting in the unauthorized release of more than five million pounds of air pollutants, including cancer-causing agents and contributors to urban smog.

Despite this egregious history of illegal pollution, neither the Texas Commission on Environmental Quality nor the U.S. Environmental Protection Agency took effective action to end the violations. Numerous violation notices and small fines were treated by Shell as “the price of doing business,” noted Kratka.

Shell’s Deer Park facility is a 1,500-acre complex located on the Houston Ship Channel in Harris County, about 20 miles east of downtown Houston. It is the nation’s eighth-largest oil refinery and one of the world’s largest producers of petrochemicals. The facility is also the third largest industrial source of air pollution in Harris County, which ranks among the worst in the nation in several measures of air quality, including ground-level smog.

To its credit, Shell agreed to enter into settlement negotiations early on in the litigation, rather than attempting to prolong the case with a court battle. The terms of the consent decree were hammered out over the course of a year, in coordination with air enforcement staff at U.S. EPA.

The centerpiece of the settlement is a “hard cap” on excess emissions, without regard to the cause of any particular release. This groundbreaking approach to upset events should create a powerful incentive for pollution prevention and chemical accident prevention, as it effectively requires the facility to anticipate and eliminate the underlying causes of upsets.

Highlights of the settlement include:

• A mandatory 80 percent reduction in upset emissions within three years;

• Automatic penalties for failures to meet pollution reduction benchmarks;

• Major plant upgrades to cut emissions and improve the reliability of equipment; and

• Comprehensive monitoring of air emissions.

In addition, Shell is required to pay a $5.8 million penalty for its history of violations – the largest penalty in an environmental citizen suit in Texas history, and nationally one of the largest ever against a single facility. The entire penalty payment will be used to fund environmental, public health, and educational projects in Harris County, including a project to reduce diesel emissions from school buses and a pilot program to install solar panels on local government buildings.