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Chevron Phillips to Pay Millions for Air Pollution in Texas (3)

March 9, 2022, 4:26 PMUpdated: March 9, 2022, 6:16 PM

Chevron Phillips Chemical Company LP agreed to pay more than $120 million in fines and facility upgrades to resolve claims against its industrial flaring activities, according to a settlement announced Wednesday.

The Justice Department claimed the company failed to properly maintain its flaring operations at three Texas facilities, resulting in an influx of hazardous air pollution into surrounding areas.

Chevron Phillips’ facilities—located at or near Cedar Bayou, Port Arthur, and Sweeny— violated multiple Clean Air Act and Texas state air pollution requirements while burning off their waste gases, the federal government told the U.S. District Court for the Southern District of Texas. The company will pay an estimated $118 million to reduce air pollution from flares at the plants, and a $3.4 million penalty, according to the settlement.

Chevron Phillips Chemical is an independent company, founded in 2000 as a joint venture between Chevron USA Inc. and Phillips 66 Co.

‘Major’ Agreement

The “major” agreement “will promote environmental justice” in communities overburdened by industrial pollution, according to Todd Kim, assistant attorney general for the department’s Environment and Natural Resources Division.

“This settlement permanently reduces the level of pollutants from the covered plants in which these communities will be exposed,” Kim said in a news conference.

As part of the agreement, Chevron Phillips will also set up fenceline benzene monitors around the Texas facilities, which will cull data to be made public to communities around the petrochemical manufacturing plants.

A Chevron Phillips spokesman said the company is “pleased to have this matter settled with the EPA” and is “making additional investments to proactively reduce our environmental footprint as part of our sustainability strategy.”

The spokesman also said the company “strives to ensure compliance, especially regarding flaring.”

Enforcement Moves

This is the second major environmental justice announcement made by the Justice Department in recent months.

The agency launched an investigation in November 2021 into whether Alabama health officials violated Title VI of the Civil Rights Act by restricting Black residents from sewage and health services.

The announcement pairs up with Kim’s push to crack down aggressively on violators, especially in clean air cases.

In February, a Justice Department official told Bloomberg Law that Justice’s criminal division is going to focus on Clean Air Act cases, which have the potential to bend the curve on climate change, in part because they have been referred to the department by the EPA more often than other types of cases, including Clean Water Act cases.

The announcement is also consistent with Kim’s earlier pledge to tackle the climate crisis and promote environmental justice, consistent with the goals of the Biden administration. Kim called out flaring cases as a “good example” of cases that can meet those goals in a December speech before the American Bar Association.

The Justice Department represents the federal government. Beveridge & Diamond PC represents Chevron Phillips.

The case is United States v. Chevron Phillips Chem. Co., S.D. Tex., No. 4:22-cv-00737, 3/9/22.

(Clarifies in headline and throughout story that Chevron Phillips is affected.)

To contact the reporters on this story: Jennifer Hijazi in Washington at jhijazi@bloombergindustry.com; Stephen Lee in Washington at stephenlee@bloombergindustry.com

To contact the editor responsible for this story: Zachary Sherwood at zsherwood@bgov.com