Chevron Settlement Information Sheet

(Washington, DC - October 24, 2018) - The U.S. Environmental Protection Agency (EPA), the U.S. Department of Justice, and the Mississippi Department of Environmental Quality (MDEQ) announced a national settlement with Chevron U.S.A. Inc. (Chevron), that requires safety improvements at all its domestic refineries.  This resolves claims that the company violated provisions of the Clean Air Act aimed at preventing accidental releases of hazardous chemicals that can have serious consequences for public health and the environment. 

• Overview
• Background
• Violations
• Injunctive Relief
• Health Effects and Environmental Benefits
• Civil Penalty
• Supplemental Environmental Projects
• Comment Period
• Contact

Overview of Company

Chevron U.S.A. Inc. owns and operates the U.S. petroleum refineries of Chevron Corporation, its parent company.  Chevron Corporation is the second-largest integrated energy company in the United States, and Chevron U.S.A. Inc. is the sixth-largest U.S. refiner as measured by crude oil distillation capacity. Today’s settlement covers the four Chevron U.S.A. Inc. refineries, which are located in Richmond and El Segundo, California; Pascagoula, Mississippi; and Salt Lake City, Utah, and also resolves claims regarding a fifth refinery formerly owned and operated by Chevron, located in Kapolei, Hawaii.

Background

EPA’s initial investigation was spurred by an August 6, 2012 fire involving high-temperature hydrocarbons released in the Crude Unit at Chevron’s Richmond, California refinery. That fire prompted a shelter-in-place order by Contra Costa County officials, endangered 19 employees and caused 15,000 local residents to seek medical attention.  During EPA’s investigation, there were accidental releases of regulated chemicals at two other Chevron refineries, including a 2013 explosion and fire in Pascagoula, Mississippi that caused the death of employee Tonya Graddy, and a 2013 rupture in El Segundo, California that caused a loss of power and significant flaring at the refinery.

Alleged Violations Resolved

The proposed settlement will resolve certain claims at all current or former Chevron U.S.A. refineries related to alleged violations of the Risk Management Program requirements and the Clean Air Act General Duty Clause, which are aimed at preventing accidental releases of hazardous chemicals that can have serious consequences for public health and the environment. Today’s action also will resolve claims under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Emergency Planning and Community Right-to-Know Act (EPCRA) regarding delayed reporting of an August 2, 2012 hydrogen sulfide release from the Richmond Refinery.

The Mississippi Department of Environmental Quality (MDEQ) participated as co-plaintiff in today’s action, exercising its concurrent authority to enforce the Risk Management Program regulations. (Only certain states have such concurrent authority; California, Hawaii and Utah are not among the states that have sought or received it.)  This is the first case in which the United States and a state partner have brought suit together to enforce these provisions. 

Injunctive Relief

Today’s action has significant injunctive relief requirements -- requirements for Chevron U.S.A. to implement capital and process safety improvements -- at the Chevron U.S.A. Inc. refineries. Previous settlements between Chevron U.S.A. and California state and local authorities after the 2012 incident required enhanced inspection and replacement of pipes susceptible to sulfidation corrosion, implementation of “integrity operating windows” to reduce risks associated with other damage mechanisms, and improved employee training related to emergency prevention and response at the Richmond Refinery.  The United States’ and MDEQ’s currently proposed settlement builds on the injunctive relief pioneered at the Richmond Refinery, requiring that these improvements as well as other safeguards are being implemented at all Chevron U.S.A. Inc.. Chevron U.S.A. Inc. has estimated that it will spend approximately $150 million to replace vulnerable pipes, institute “integrity operating window” parameters and alarms for safer operation, improve corrosion inspections and training, centralize safety authority within the corporation, conduct a study on improving fired heater safety during startup, and make other safety improvements at all its domestic refineries. 

Health Effects and Environmental Benefits

Section 112(r) of the Clean Air Act requires companies of all sizes that use certain listed regulated flammable and toxic substances to develop a Risk Management Program, which includes a(n):

• Hazard assessment that details the potential effects of an accidental release, an accident history of the last five years, and an evaluation of worst-case and alternative accidental releases scenarios;
• Prevention program that includes safety precautions and maintenance, monitoring, and employee training measures; and
• Emergency response program that spells out emergency health care, employee training measures and procedures for informing the public and response agencies (e.g., fire departments) should an accident occur.

The information in a facility’s Risk Management Plan helps local fire, police, and emergency response personnel who must prepare for and respond to chemical accidents, and is useful to citizens in understanding the chemical hazards in communities.  Today’s settlement will enhance Chevron U.S.A. Inc.’s risk management program by improving the company’s ability to prevent and respond to accidental releases of extremely hazardous substances.

Today’s action is also important with respect to environmental justice.  Several of the refineries are located in areas presenting significant environmental justice concerns; the improvements in the proposed settlement will enhance the protection of the public in these communities. 

Civil Penalty

Chevron U.S.A. will pay a $2.95 million civil penalty, of which $2,492,750 will be paid to the United States and $457,250 to the State of Mississippi.

Supplemental Environmental Projects

The Supplemental Environmental Projects (SEPs), valued at $10 million, will supply emergency response equipment to local jurisdictions surrounding the five subject refineries. These SEPs will enhance the capabilities of emergency responders located near the refineries and will facilitate quick and efficient response to releases associated with emergency events. Equipment will be provided to response agencies in the communities surrounding the five current or former Chevron U.S.A. refineries, in approximate proportion to the extent of the alleged violations at each refinery:

• The Richmond Fire Department will receive approximately $4.6M of equipment, including a fire engine and three fire trucks;
• In Mississippi, approximately $314K is allocated for MDEQ and approximately $2.8M is allocated for Jackson County, Mississippi emergency responders.
• Two fire departments in Los Angeles County will receive a total of approximately $1.4M of equipment, such as heavy duty pickup truck for the El Segundo Fire Department and a cardiac monitor for the Manhattan Beach Fire Department;
• The Honolulu Fire Department and Emergency Services Department will receive donations of approximately $300K of equipment, and
• Salt Lake City Fire Department and the South Davis County Metro Fire Department will receive a total of approximately $500K of equipment, including instruments to identify gas and chemical leaks.

Comment Period

The proposed settlement, lodged in the U.S. District Court for the Northern District of California, is subject to a 30-day public comment period and final court approval.  Information on submitting comment is available at the Department of Justice.

For more information, contact:

Craig R. Haas
U. S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC  20004
(202) 564-6447
[email protected]