Environmental Enforcement: Second Largest U.S. Refinery Fined $5.3 Million for Air Violations

by | Jan 27, 2011

The U.S. Environmental Protection Agency and Department of Justice announced yesterday that Hovensa LLC, owner of the second largest petroleum refinery in the U.S., has agreed to pay a civil penalty of more than $5.3 million and spend more than $700 million on new pollution controls at its St. Croix, U.S. Virgin Islands refinery.

The company will also set aside an additional $4.9 million for projects to benefit the environment of the U.S. Virgin Islands.

According to the EPA, the settlement requires new and upgraded pollution controls, more stringent emission limits, and aggressive monitoring, leak-detection and repair practices to reduce emissions from refinery equipment and process units.

EPA’s complaint, filed with today’s settlement, alleged that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing pollution control equipment required under the Clean Air Act.

EPA estimates the pollution controls required by the settlement will reduce emissions of nitrogen oxides (NOx) by more than 5,000 tons per year and sulfur dioxide (SO2) by nearly 3,500 tons per year.  The settlement will also result in additional reductions of volatile organic compounds, particulate matter, carbon monoxide and other pollutants that affect air quality, the EPA said in a statement.

The government of the U.S. Virgin Islands participated in the settlement and will receive a portion of the civil penalty.

In response to the settlement, Hovensa announced today that it will reduce its crude oil processing capacity at its St. Croix refinery by 150,000 barrels per day as it permanently closes older, less efficient units by the end of the first quarter, Reuters reports.

Hovensa’s St. Croix facility is one of the 10 largest refineries in the world and has the capacity to refine more than 525,000 barrels of crude oil per day.

The consent decree, lodged in the District Court of the Virgin Islands, is subject to a 30-day public comment period and court approval.

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