Texas Oil Company Sentenced to pay $12 Million for Clean Air Act and Obstruction Crimes in Louisiana

Posted: Dec 15, 2011 7:48 PM by Ashley Guidroz
Source: katc
Updated: Dec 15, 2011 7:50 PM

Pelican Refining Company has been sentenced to pay $12 million for felony violations of the Clean Air Act and Obstruction of Justice charges in a Lafayette court today. This sentence is the largest-ever criminal fine in Louisiana for air pollution.

Pelican Refining was sentenced today by U.S. District Court Judge Richard T. Haik Sr. to pay a $12 million penalty, which includes a $10 million criminal fine and $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. The criminal fine is the largest ever in Louisiana for violations of the Clean Air Act. Pelican is also prohibited from future operations unless it implements an environmental compliance plan, which includes independent quarterly audits by an outside firm and oversight by a court appointed monitor.

In a joint factual statement filed in court, Pelican, headquartered in Houston,
admitted that the company had knowingly committed criminal violations of its operating permit at the refinery located in Lake Charles, La. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the EPA, which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.

Pelican admitted to the following:
• Pelican had no company budget, no environmental department and no
environmental manager;
• In order to comply with a permit issued under the Clean Air Act, the refinery
was required to use certain key pollution prevention equipment, but that
equipment was either not functioning, poorly maintained, improperly
installed, improperly placed into service and/or improperly calibrated;
• It was a routine practice for over a year to use an emergency flare gun to
re-light the flare tower at the refinery designed to burn off toxic gases and
provide for the safe combustion of potentially explosive chemicals; because
the pilot light was not functioning properly, employees would take turns
trying to shoot the flare gun to relight the explosive gasses;
• Sour crude oil was stored in a tank that was not properly placed into service
and remained in the tank after the roof sank;
• A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed;
• A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly; and
• Pelican provided false information to the states of Louisiana and Texas
concerning the laboratory testing of asphalt.

Byron Hamilton, the Pelican vice-president who oversaw operations at the Lake Charles refinery since 2005 from an office in Houston pleaded guilty on July 6, 2011, to the crime of negligently placing persons in imminent danger of death and serious bodily injury in violation of the Clean Air Act as a result of negligent releases at the refinery. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts. On Oct. 31, 2011, Pelican's former asphalt facilities manager, Mike LeBleu, also pleaded guilty to a negligent endangerment charge under the Clean Air Act.

The government's investigation of the Pelican Refinery continues. Under the Crime Victims' Rights Act, crime victims are afforded certain statutory rights, including the opportunity to attend all public hearings and provide input to the prosecution.