Compliance and Enforcement Annual Results:
FY2006 Air Case Highlights
FY2006 Annual Results Topics
Air pollution threatens human health and damages the environment. EPA continues to enforce our nation's environmental laws and to ensure compliance with the Clean Air Act nationwide, making our air cleaner. While often invisible, pollutants in the air create smog and acid rain and cause cancer or other serious health effects. The air pollutants addressed by these settlements can cause serious respiratory problems and exacerbate cases of childhood asthma. As a result of cases concluded in fiscal year 2006, 583 million pounds of pollution will be reduced, eliminated or properly managed.
Criminal Enforcement Cases
Since 1999, EPA and the Department of Justice have filed a number of lawsuits against coal-fired electric utilities alleging that these companies made major modifications to their plants without installing equipment to control pollution that causes smog, acid rain and soot and that contributes to severe respiratory problems and childhood asthma in violation of the New Source Review provisions of the Clean Air Act.
EPA has litigated and resolved several of these lawsuits and negotiated settlements with 11 companies: Tampa Electric Company; PSEG Fossil; Southern Indiana Gas and Electric Company; Virginia Electric Power Company; Alcoa; Wisconsin Electric Power Company; Santee Cooper; Illinois Power and Dynegy Midwest Generation; Ohio Edison; Alabama Power Company James H. Miller, Jr. Plant; and Minnkota Power Cooperative and Square Butte Electric Cooperative. These settlements will result in the removal of approximately one million tons of pollution from the air annually and an expenditure of about $5.8 billion to install state-of-the-art air pollution controls.[More Information]
The major settlements concluded in 2006 are:
Alabama Power Company James H. Miller, Jr. Plant will spend more than $200 million to install state-of-the art pollution control equipment to reduce air pollution by nearly 34,000 tons per year. The company will also pay a $100,000 civil penalty.
Minnkota Power Cooperative and Square Butte Electric Cooperative will spend more than $100 million to install state-of-the-art pollution control equipment to reduce harmful air emissions by more than 33,000 tons per year and will fund $5 million in renewable energy development projects, including wind power projects in their service area of North Dakota and Minnesota. The cooperatives will also pay an $850,000 civil penalty.
Petroleum Refineries have proved to be one of the largest, most comprehensive and successful enforcement and compliance national priorities ever undertaken by EPA. EPA's investigations of petroleum refineries focused on the four most significant Clean Air Act compliance challenges for the industry and the emissions units that are the source of most of their pollution: New Source Review/Prevention of Significant Deterioration - fluidized catalytic cracking units, heaters and boilers; New Source Performance Standards – flares, sulfur recovery units, fuel gas combustion devices (including heaters and boilers); Leak Detection and Repair requirements; and Benzene National Emissions Standards for Hazardous Air Pollutants. EPA selected refineries as a national priority because of the high rate of violations and rate of air emissions from petroleum refineries. EPA initiated over 150 issue-specific investigations at more than 100 refineries and, beginning in fiscal year 2000, embarked on a process of “global” settlements, which address each issue of concern at all of a company’s refineries. The settlements under the this priority require state-of-the-art controls and the implementation of enhanced programs to ensure continuing compliance with applicable requirements.
Through the end of fiscal year 2006, EPA has entered into “global” settlements with seventeen refiners affecting 85 refineries in 25 states, representing more than 77 percent of domestic refining capacity, to reduce emissions of harmful air pollutants by approximately 315,000 tons per year at a combined cost of $4.4 billion. They will also perform supplemental environmental projects costing approximately $60 million. EPA is in ongoing negotiations with nine additional refiners affecting 15 refineries representing over 11 percent of domestic refining capacity.[More Information]
The following are major settlements concluded this fiscal year 2006.
ConocoPhillips will reduce harmful air emissions by more than 47,000 tons per year at a cost of more than $525 million and will spend more than $10 million on environmental projects to reduce emissions further and to support activities in the communities where it operates. The company also will pay a $4.5 million civil penalty.
Exxon Mobil Corporation will reduce emissions of air pollutants by more than 53,000 tons annually at a cost of more than $570 million. Exxon will pay an $8.7 million civil penalty and will spend more than $9.7 million on environmental projects in communities around the company’s refineries.
Sunoco, Inc. will reduce emissions of harmful air pollutants by more than 23,900 tons annually at a cost of approximately $285 million and will spend more than $3.9 million on further emission controls and environmentally beneficial projects. Sunoco will pay a $3 million civil penalty.
Valero Refining Company will install emission control technologies at a cost of more than $700 million to reduce air pollution by more than 20,500 tons annually and will spend more than $5.5 million on further emission controls and environmentally beneficial projects. Valero will pay a $5.5 million civil penalty.
Ethanol production facilities are major sources of harmful air pollutants such as volatile organic compounds, carbon monoxide, nitrogen oxides, particulate matter, and other hazardous compounds. In addition to contributing to smog, volatile organic compounds can cause serious health problems such as cancer; carbon monoxide is harmful because it reduces oxygen delivery to the body’s organs and tissues. As a result of EPA’s enforcement activities, approximately 80 percent of the ethanol production capacity has adequate pollution controls or is in the process of installing controls. Major settlements to date with 27 ethanol producers and grain processors will reduce emissions of harmful air pollutants by over 100,000 tons per year at a combined cost of over $384 million.
The major settlements concluded in 2006 are:
AGP Corn Processing will spend more than $5.5 million to install pollution control equipment to reduce emissions of harmful air pollutants by 975 tons per year and will pay a $40,000 civil penalty.
Cargill, Inc. one of the nation’s largest producers of corn sweeteners, and a producer of domestic vegetable oils and fuel-grade ethanol, will reduce emissions of harmful air pollutants by nearly 25,000 tons per year from 27 corn and oilseed-processing plants in 13 states at an estimated cost of $130 million. Cargill will pay a $1.6 million civil penalty and will spend $3.5 million on supplemental environmental projects.
MGP Ingredients of Illinois, Inc. will install air pollution control equipment and replace its existing feed dryers at its Pekin, Ill. facility to reduce emissions of volatile organic chemicals and carbon monoxide by over 1,700 tons per year at a cost of over $1 million. MGP will pay a $171,800 civil penalty.
Mobile source pollutants include smog-forming volatile organic compounds and nitrogen oxides, toxic air pollutants such as cancer-causing benzene, and particulate matter or “soot” that are responsible for asthma and other respiratory illnesses. EPA enforces the Clean Air Act provisions governing motor vehicles and engines, including emissions standards for manufacturers of new motor vehicles, passenger cars and light trucks, and heavy duty motor vehicle engines. The requirements are designed to limit harmful emissions from these vehicles.
The following major settlement was concluded this fiscal year.
DaimlerChrysler Corporation entered into the largest mobile source settlement in an emission-related defect reporting case. DaimlerChrysler will repair defective emissions controls on nearly 1.5 million Jeep and Dodge vehicles from model years 1996 through 2001 at an estimated cost of $90 million under the March 2006 settlement. The settlement resolves Clean Air Act violations in which the company failed to properly disclose defective catalytic converters. The company also will pay a $2 million civil penalty and spend at least $3 million to implement a supplemental environmental project to reduce emissions from diesel engines currently in use.
Participating animal feeding operations entered into over 2,500 Air Compliance Agreements in fiscal year 2006 covering nearly 14,000 farms – swine operations, dairy operations, egg-laying operations, and broiler chicken (meat-bird) operations. Under these
State and federal regulators rely on comprehensive and accurate reporting of pollutant data from regulated entities in order to ensure protection of the public and the environment. Individuals or companies that knowingly fail to file required reports or who falsify those reports are subject to criminal prosecution.
The following are major cases concluded this fiscal year.
Pacific States Pipe Company
Charles Matlock, an executive with Pacific States Cast Iron Pipe Company, was sentenced to12 months and one day in prison and a $20,000 fine after pleading guilty to violations of the Clean Air Act which involved a rigged stack emissions test. Pacific States, a division of McWane Inc., located in Springville, Utah, manufactures cast iron pipe for the water and sewer industry. McWane, Inc. also pled guilty to violating the Clean Air Act and was sentenced to pay a fine of $3 million, the largest criminal environmental fine in Utah, and serve a three year period of probation. In 2001, 2002 and 2003, McWane submitted “Emission Inventory” documents that were based on the rigged stack test and falsely reported to the State of Utah that Pacific State’s emissions were at a level that McWane employees knew to be inaccurate. [More Information]
Asbestos is a human carcinogen. Under federal and state law, individuals who work on asbestos and lead abatement projects are required to take an extensive training course instructing them how to properly and safely remove asbestos, lead and hazardous waste without contaminating either themselves, co-workers, or members of the public. The failure to properly follow the regulations regarding the safe removal of asbestos (so called “rip and run” violators), including the use of workers who have not received required asbestos removal training or been given the necessary protective equipment to avoid exposure, can result in criminal prosecution.
The following are major cases concluded this fiscal year.
ACS Environmental Services
ACS Environmental, Inc. and Air Power Enterprises, Inc., were sentenced to five years probation and Air Power was fined $500,000 for conspiracy to defraud the Environmental Protection Agency, the Occupational Safety and Health Administration and the Small Business Administration (SBA). James Schaubach, president of ACS and vice president of Air Power, was sentenced to 21 months in prison, to be followed by 3 years of supervised release, and fined $1.5 million. Nicanor Lotuaco, president of Air Power, was sentenced to five months in jail, followed by five months home detention and three years supervised release, and fined $1 million. All defendants pled guilty to buying false training certificates for their employees working in the asbestos, lead abatement, and hazardous waste industries and fraudulently obtaining set-aside contracts for minority-owned companies by submitting false statements to the SBA. ACS, located in Chesapeake, VA, and Air Power, located in Portsmouth, VA, received $37 million in federal contracts, under the SBA’s program for minority owned businesses. ACS and Air Power falsely certified that the workers had taken the required courses, passed the exams and were otherwise entitled to work on such projects. The untrained workers conducted asbestos, lead, and hazardous waste abatement at schools, hospitals, and other public and governmental facilities. [More Information]
Longley Jones Management Corporation
Longley Jones Management Corporation, which manages commercial and residential real estate, including numerous apartment buildings throughout central and upstate New York State, pled guilty to one count of conspiracy to violate the Clean Air Act, commit mail fraud, and seven counts of violating the Clean Air Act. Longley Jones will pay a $4 million dollar fine, $3 million of which will be suspended for asbestos clean up at various Longley Jones facilities that the company has already initiated (where is has spent more than $3 million). The suspended portion of the fine shall also be used to implement an Environmental Compliance Plan, which has been approved by the EPA. EPA criminal investigators who worked jointly with investigators of the New York State Department of Environmental Conservation found that employees of Longley Jones Management Corporation illegally removed and disposed of regulated amounts of friable asbestos in 98 buildings owned, managed or otherwise controlled by Longley Jones over the past 20 years. [More Information]