Posted December 2, 2004

Critics Protest Proposed Deal With Chevron Over Pollution

Environmentalists say the pact would do little to better air quality and clear the company for its violations.

By Dennis Pfaff
Daily Journal Newswire Staff Writer

SAN FRANCISCO - Environmentalists protested Wednesday in hopes of derailing a five-refinery pollution deal between Chevron and the federal government that is scheduled to go before a federal judge later this month. Critics, who marched outside of the Environmental Protection Agency's San Francisco regional headquarters, denounced the agreement as a sweetheart arrangement that would produce little in the way of cleaner air. They characterized the deal, struck with Chevron U.S.A. last year, as a setback for the urban poor living near refineries.

Opponents have urged U.S. District Judge Charles R. Breyer to reject the pact, which has been endorsed by the Bay Area Air Quality Management District and the other states where the refineries are located - Mississippi, Utah and Hawaii. The consent decree would settle a lawsuit filed in 2003 against Chevron covering five refineries, including plants in Richmond and El Segundo.

The suit alleged violations of the federal Clean Air Act, including provisions that require companies to improve anti-pollution equipment when upgrading major factory systems. Its defenders claimed the agreement would require Chevron to spend hundreds of millions of dollars cleaning up its refineries and would cut pollution by thousands of tons annually.

San Ramon-based ChevronTexaco, as the company is now known, issued a written statement boasting that its refinery system had one of the lowest pollution rates in the industry before the agreement was reached. The agreement will cut emissions even more, the company said. The agreement will "allow us to focus our resources on improving the environmental performance of our refineries rather than on costly and time-consuming legal proceedings," the company said.

A coalition of environmentalists and unions insisted otherwise. "The proposed consent decree is a sweetheart deal between the U.S. and Chevron that provides almost no environmental benefit and does not require Chevron to comply with pollution control requirements in the future, even though it exonerates Chevron from extensive liability for both its known and unknown violations of the Clean Air Act," those critics said in legal arguments filed in September.

The critics said the deal would allow Chevron to increase pollution in some instances. Moreover, they said, it would assess far too little in penalties and would give the company immunity for hundreds of past violations. They called it "the environmental equivalent of a presidential pardon."

The South Coast Air Quality Management District also has expressed reservations about the deal, although it has not joined in the court action. In comments filed with the Justice Department a year ago, the air district said the agreement might conflict with other regulatory requirements - and that it might also pre-empt the district's ability to act on newly discovered violations and would not significantly cut air pollution. South Coast spokeswoman Tina Cherry said Wednesday the government has since satisfied the district's concerns over its ability to enforce violations. But she said the district's other reservations remain unresolved.

Chevron's settlement is one in a series of controversial deals cut between the Bush administration and oil companies. A government brief in the case said federal judges have approved 10 similar settlements negotiated under the EPA's Petroleum Refinery Initiative.

The opponents said in a brief submitted to Breyer that that EPA program was "aimed at shielding polluters from diligent prosecution for violating the Clean Air Act." In June, the EPA's own inspector general heavily criticized the agency's overall program to bring refineries into conformity with the law. Among other problems, the report said, efforts to implement the settlements "may have delayed emissions reductions and compromised compliance."

In Chevron's case, critics said the government has wildly exaggerated the amount of pollution reduction the settlement would produce. For example, the EPA has said the deal would cut nitrogen oxide pollution - which contributes to respiratory problems and smog - by about 3,000 tons a year. But opponents, led by the organization Communities for a Better Environment, pointed to an EPA official's own court declaration that the company had cut approximately half that amount even before the lawsuit was filed.That same official acknowledged in the declaration it was "not possible to define" the exact amount of reductions the deal would produce.

Most of the reductions under the agreement appear likely to come from the Mississippi refinery, said Will Rostov, staff attorney for the environmental group. He said his group has identified dozens of violations whereby Chevron's California plants failed to pursue pollution upgrades when facilities were remodeled, a process known as "new source review." Rostov said the company's liability for such violations would be traded away under the settlement. "They really haven't done anything for the California refineries, but at the same time they are absolving them of their new source review responsibilities," he said.

Environmentalists and a coalition of states, including California, have long fought what they view as Bush administration efforts to weaken the new source review process. The courts have blocked some of the administration's changes from going into effect. Nevertheless, Rostov said, in combination with the Bush rollbacks, the Chevron agreement effectively would let the company escape liability for all violations - past, present and future.

Protesters Wednesday unveiled a large banner outside the EPA offices, depicting Chevron as a plump cat being licked by a small dog labeled "EPA." The demonstration was organized by Communities for a Better Environment. "EPA - No Bark No Bite," read the banner. Community activists from the Richmond area denounced the agreement as an assault on their neighborhood.

"I'm here to say this deal is a threat to our community," said Gayle McLaughlin, a Richmond City Council member who joined about two dozen demonstrators.

U.S. Justice Department attorneys have defended the settlement in legal briefs as "fair, adequate and reasonable" and consistent with federal environmental laws, including the Clean Air Act. The deal would require Chevron to pay $3.5 million in civil penalties and to spend at least $4.5 million on environmental projects near the company's refineries.

An EPA press release issued at the time of the agreement said the deal would require Chevron to spend $275 million on pollution control efforts and would reduce emissions of nitrogen oxide and sulfur dioxide by nearly 10,000 tons annually.

In briefs filed with Breyer, the government lawyers disputed opponents' charges that any benefits from the deal would be delayed until 2011 - and that the settlement would allow the company to increase pollution.
"The emissions reductions required by this settlement will lead to cleaner air and significant environmental and public health benefits," said Assistant Attorney General Thomas Sansonetti, who heads the Justice Department's environmental and natural resources division, in written comments at the time the deal was announced.

In a brief replying to the opponents' criticisms, the Justice Department cited what it called "the very real uncertainties inherent" in pursuing Chevron in the courts. The terms of the settlement are "not only consistent with, but may greatly exceed, the relief that ultimately could have been achieved through several years of litigation on disputed issues," the brief said. The brief conceded that the government had not investigated every unit at each refinery and identified specific violations at the individual components. But it said the opponents wanted the government to act as if it had gone to trial and won every claim.

"All settlements inherently involve some compromise," the brief said. Breyer is scheduled to consider the pact during a hearing Dec. 17.

The case is United States v. Chevron USA Inc., 03-04650CRB.