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FISCAL YEAR: 2012
1. PRINCIPAL DEFENDANT: Pelican Refining Company, LLC
W.D.  Louisiana  2:11-CR-00227
2. DEFENDANT: Byron Alford Hamilton
W.D.  Louisiana  2:11-CR-00130
3. DEFENDANT: Michael LeBleu
W.D.  Louisiana  2:11-CR-00266


Pelican, headquartered in Houston and operating a refinery in Lake Charles, Louisiana, violated numerous aspects of its permit to operate. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the Environmental Protection Agency (EPA), which identified numerous unsafe operating conditions. Pelican submitted materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.

Pelican has 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 which was designed to burn off toxic gasses 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; and
  • A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly.

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 negligently placing persons in imminent danger of death and serious bodily injury 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.



June 10, 2011
Hamilton was charged with 2 counts of violating the CAA {42 U.S.C. 7413(c)(4) - release into the ambient air...}.

CITATION: 18 U.S.C. 1519, 42 U.S.C. 7413(c)(4), 42 U.S.C. 7661(a)
July 6, 2011
Hamilton pled guilty to the charges.


Press Release
Department of Justice
FOR IMMEDIATE RELEASE
July 6, 2011

Louisiana Oil Refinery Vice-President Pleads Guilty to Air Pollution Causing Negligent Endangerment

WASHINGTON – The vice-president and general manager of the Pelican Refinery in Lake Charles, La., today pleaded guilty to federal negligent endangerment charges under the Clean Air Act before U.S. District Judge Richard T. Haik in Lafayette, La., announced Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice, and Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana.

Byron Hamilton, 66, oversaw operations at the Lake Charles refinery since 2005 from an office in Houston. According to the charges filed in federal court, Hamilton negligently caused the release of hazardous air pollutants, including hydrogen sulfide, an extremely hazardous substance, into the air which placed persons in imminent danger of death and serious bodily injury.

The federal investigation was initiated after a March 2006 inspection by the Louisiana Department of Environmental Quality and EPA when inspectors found unsafe operating conditions, including unpermitted releases of hydrogen sulfide, storage of crude oil in unrepaired storage tanks, failure to repair emissions monitoring and control equipment, and the use of plastic children’s swimming pools to contain petroleum leaks.

In pleading guilty, Hamilton acknowledged that his negligence in overseeing operations at the refinery was a proximate cause of the releases and associated risks. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts.

According to a joint factual statement filed in federal court:
  • The company that Hamilton managed 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, such that there were releases of pollutants into the atmosphere and at the refinery;
  • It was a routine practice for over a year to use a standard signal flare gun to re-light the process flare at the refinery which was designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals because the pilot light was not functioning properly;
  • 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; and
  • A continuous emission monitoring system (CEMS) designed to measure hydrogen sulfide levels in emissions was not working properly.

In 2005 and 2006, the Pelican refinery processed “sour” crude supplied by its owners that had high concentrations of hydrogen sulfide (H²S), a highly toxic and flammable gas inherent to sour crude oil refining. H²S is classified as an “extremely hazardous substance.” It has a characteristic odor of “rotten eggs” at low concentrations. Refinery workers reported smelling H²S as well as having their personal H²S monitors “go off” from time-to-time. Pelican Refining Company had no procedure to record, track, report or mitigate H²S releases. At higher concentrations H²S paralyzes the sense of smell so that its odor is no longer perceived and can result in death.

The government’s investigation of the Pelican Refinery is continuing. 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. Any person adversely impacted is encouraged to visit www.justice.gov/usao/law/vicwit/index.html to learn more about the case and the Crime Victims’ Rights Act or you may contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana, Vicki Chance at 318-676-3600.

The investigation is ongoing and is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Stephanie Finley and federal environmental prosecutors Richard A. Udell, Christopher Hale and Rocky Piaggione of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.

September 7, 2011
Pelican was charged with 1 count of destruction of evidence, a violation of 18 U.S.C. 1519; and 2 counts of violating the CAA {42 U.S.C. 7661(a) }.

October 12, 2011

Pelican pled guilty to all charges.

Read more about the plea in the EPA Press release.

October 17, 2011
LeBleu was charged with one count of violating the CAA {42 U.S.C. 7413(c)(4) - negligent release into the ambient air...}.

October 31, 2011
LeBleu pled guilty to the single count.


Press Release
Department of Justice
FOR IMMEDIATE RELEASE
October 31, 2011

Former Asphalt Manager of Pelican Refinery Pleads Guilty in Louisiana to Air Pollution Causing Negligent Endangerment

WASHINGTON – The former asphalt facilities manager of Pelican Refining Company LLC (PRC), pleaded guilty today to the crime of negligent endangerment under the Clean Air Act in federal court in Lafayette, La., announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice and Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana.

Mike LeBleu served as the asphalt facilities manager of the Pelican Refinery in Lake Charles, La., from May 9, 2005, through Oct. 15, 2009. LeBleu was a member of upper management with regard to the asphalt plant and had overall responsibility for the plant’s operations and personnel. According to court documents, LeBleu negligently caused the release of hydrogen sulfide (H2S), an extremely hazardous substance, into the air, which placed other persons in imminent danger of death and serious bodily injury.

LeBleu faces a maximum of one year in prison and a fine of $100,000.

According to the joint factual statement filed with court, during August 2007, LeBleu facilitated the purchase of a load of 64-22 asphalt that had extremely high levels of H2S emissions, between 150 parts per million (ppm) and 1300 ppm. H2S emissions at these levels carry serious health risks, ranging from eye and lung damage to death at the highest levels. The H2S coming off the asphalt was so high that the barge carrying the load was previously denied entry into the Port of Houston. Because of the high H2S levels, LeBleu was able to negotiate a substantial discount. The Pelican Refinery would have to spend almost $25,000 on treatments and chemicals in order to bring the H2S emissions down to safe levels for road construction, but even with the cost of treatment, the savings to the Pelican Refinery amounted to more than $140,000.

LeBleu admitted that he was fully aware of the risks associated with processing asphalt with such high H2S emissions. For example, at the time of treatment, he requested and received from the Asphalt Institute, a draft copy of “Best Management Practices for Asphalt Facility Control of H2S Exposure.” Nevertheless, those best practices were not instituted or followed.

On Aug. 19, 2007, the asphalt arrived at the Pelican Refinery, and under LeBleu’s direction, employees on the asphalt barges were instructed to load approximately 39,438 barrels of the high-H2S asphalt into a tank, known as Tank 80-02. Tank 80-02 was not permitted for H2S emissions, a violation of PRC’s Title V permit. LeBleu understood that the asphalt was in a liquid phase and that H2S would be emitted into the vapor space of the tank. Because that tank was vented to the atmosphere, H2S would escape into the surrounding air, especially given the heated condition of the asphalt. LeBleu himself saw “blue smoke” being emitted from the elbow vents toward the top of the tank, indicating that fumes were being emitted into the atmosphere.

The treatment of the high H2S asphalt was an ongoing process involving mixing and blending that lasted approximately one month, and was completed by the end of September 2007. During the treatment, regular samples of the H2S levels had to be taken. Some of this was done from a tap valve on the side of the tank. Other samples were taken from a hatch at the top of the tank’s roof. LeBleu personally collected some of these samples, but he also was negligent when he ordered his subordinates to collect such samples. These employees had to climb on top of the tank, open a hatch, and insert a sampling device into the hatch. The employees were not provided with “fresh air” breathing equipment as required by industry best practices. Several of these employees noted that their personal H2S monitors indicated exposure to H2S. Other employees that went on top of Tank 80-02 as part of the sampling program reported smelling “rotten eggs” and being overcome with fumes. The smell of rotten eggs is a human indicator for the presence of H2S.

In related cases, PRC pleaded guilty on Oct. 12, 2011, to felony violations of the Clean Air Act and obstruction of justice for its mismanagement of the refinery. Sentencing is scheduled for Dec. 15, 2011. Additionally, the company’s vice-president and general manager, Byron Hamilton, pleaded guilty to Clean Air Act negligent endangerment charges on July 6, 2011. Sentencing has yet to be scheduled for Hamilton.

December 15, 2011

Pelican was sentenced to 60 months probation and ordered to pay $10 million in federal fines.

Read more in the EPA Press Release.

For more information about this investigation...Joint Factual Statement (PDF) (9 pp, 555K)
Pelican Exhibits (PDF) (22 pp, 3.3MB)

April 4, 2012
Hamilton was sentenced to 3 days incarceration, 12 months probation and ordered to pay a $5,000 federal fine.

LeBleu was sentenced to 3 months incarceration, 12 months probation and ordered to pay a federal fine in the amount of $5,000.

STATUTE:
  • Clean Air Act (CAA)
  • Title 18 U.S. Criminal Code (TITLE 18)

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