From: Mark Sherman, Associated Press
Published January 28, 2005 12:00 AM

ConocoPhillips Reaches Clean Air Settlement Requiring $525 Million in Pollution Controls

WASHINGTON — ConocoPhillips will install $525 million in pollution controls at nine refineries and pay a $4.5 million fine to settle a federal lawsuit alleging Clean Air Act violations, the Bush administration announced Thursday.


The settlement requires ConocoPhillips, the nation's third biggest oil company, to reduce yearly emissions of nitrogen oxide by more than 10,000 tons and sulfur dioxide by more than 37,100 tons. Both can cause serious respiratory ailments and worsen cases of childhood asthma.


The refineries covered in the agreement among the company, the Justice Department, the Environmental Protection Agency and five states, represent 10 percent of the nation's refining capacity.


The settlement is the 13th reached under an EPA initiative begun in December 2000, and it means that more than half the U.S. domestic refining capacity is covered by settlements stemming from alleged Clean Air Act violations, administration officials said.


"These settlements, when fully implemented, will reduce emissions of air pollutants by approximately 240,000 tons per year at 57 refineries in 26 states," said Thomas V. Skinner, EPA acting assistant administrator for Enforcement and Compliance Assurance.


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Thomas Sansonetti, assistant attorney general for the Justice Department's environment division, said other refineries are under investigation.


But the EPA's inspector general reported last June that the agency does a poor job tracking compliance with the agreements and environmental groups said deadlines in prior settlements have been repeatedly extended.


"The announcement is good, but implementation is more important and there have been some problems," said Eric Schaeffer, director of the Environmental Integrity Project and a former EPA official who worked on refinery settlements.


The money in the ConocoPhillips case will be spent over eight years and is just shy of the largest settlement reached over the past four years, a $550 million agreement with Motiva Enterprises.


ConocoPhillips noted that it entered into the agreement voluntarily and that its other three U.S. refineries are covered by a similar agreement reached in 2001.


"ConocoPhillips is committed to achieving these significant emissions reductions in conjunction with its ongoing business plans," company spokeswoman Lara C. Dilley said in an e-mail. "These actions will improve environmental performance and support safe and reliable continued operations of the refineries."


The company agreed to improve detection and repair of leaks and take steps to minimize flaring of hazardous gases -- the fire sometimes seen at the top of refinery smoke stacks.


In addition to the pollution controls and civil penalty, ConocoPhillips will spend another $10 million in the five states that are part of the settlement on projects ranging from controlling emissions at a wastewater plant at its New Jersey facility to giving new wood-burning stoves to low-income residents near the Washington refinery and an "very sophisticated emergency response vehicle for use in and around the Illinois plant. The agreement was filed in U.S. District Court in Houston and still requires the approval of a federal judge.


The refineries are in the Los Angeles and San Francisco areas in California, Roxana, Ill., Belle Chasse, La., Linden, N.J., Trainer, Pa., Borger and Old Ocean, Texas and Ferndale, Wash. California and Texas are not part of the settlement, Justice Department officials said.


Texas is engaged in its own negotiations with the company to bring supplemental environmental projects to the state, said Paul Sarahan, the litigation director for the Texas Commission on Environmental Quality. Joining in the federal settlement would have eliminated that prospect, Sarahan said. A spokesman for California's attorney general could not immediately explain why the state was not part of the settlement.


Houston-based ConocoPhillips on Wednesday reported fourth-quarter net income of $2.43 billion, or $3.44 per share, for the October-December period, up from $1.02 billion, or $1.48 per share, a year ago.


Its shares rose 51 cents to close at $91 in Thursday trading on the New York Stock Exchange, approaching its 52-week high of $91.22.


Source: Associated Press


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