Posted by: Lawyer Sanders | October 1, 2008

Lawyer Sanders says federal court hammers CITGO to the tune of $13,000,000 for Clean Water Act violations.

CITGO, a Delaware corporation, pleaded guilty and was sentenced to pay a $13 million fine for the negligent discharge of pollutants into two rivers in Louisiana in violation of the Clean Water Act, the Justice Department announced.  The $13 million fine is the largest ever for a criminal misdemeanor violation of the Clean Water Act.  The company is owned by PDV America, Inc., an indirect, wholly owned subsidiary of Petróleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. 

CITGO , based in Houston, TX, is a refiner, transporter, and marketer of transportation fuels, lubricants, petrochemicals, refined waxes and other petroleum products.  CITGO has more than 7,000 locations, three refineries, and 43 terminals throughout the United States.

CITGO pleaded guilty in U.S. District Court in Lake Charles, La., for negligently failing to maintain storm water tanks and failing to maintain adequate storm water storage capacity at its petroleum refinery in Sulphur, La.  As a result of these failures approximately 53,000 barrels of oil was discharged into the Indian Marais and Calcasieu Rivers following a heavy rain storm.

In 1994, CITGO converted its lagoon waste water system into a tank system for handling excess waste water and storm water.  In order to trim costs, only two storm water tanks were constructed, but as early as 1998, employees and outside contractors advised that an additional tank was necessary.  Despite being advised of the inadequate storage capacity, CITGO did not approve construction of a third tank until 2005.  In addition, the company failed to follow standard procedures for maintaining the tanks.   During its operations, CITGO failed to remove oil, sludge and solids from the tanks and failed to repair the skimming equipment.  Failing to follow these procedures allowed for the build-up of a significant amount of oil in the storm water tanks, which contributed significantly to the overflow.  

Between June 19 and June 20, 2006, a heavy rainstorm overwhelmed the capacity of the two existing tanks and forced oil that had collected in the tanks out and into the two rivers.  The illegal discharge resulted in limited commercial transportation on the water ways for approximately 10 days.

Along with the fine, CITGO will implement an Environmental Compliance Plan (ECP) by which it will take measures to ensure a spill of this type will not occur in the future.  The ECP includes new reporting requirements within the corporate structure regarding environmental issues and tank maintenance, the completion of the third storage tank and the installation of new and more effective oil removal equipment for the storm water tanks.

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