Chevron settles Clean Air Act allegations

Chevron Corp. said it had reached a $7 million settlement with the US Environmental Protection Agency and the US Department of Justice concerning alleged violations of the Clean Air Act at the company's El Segundo marine terminal. The terminal is 1.5 miles offshore from Chevron's Southern California refinery.

Chevron will also stop using its marine terminal until the EPA and Chevron agree on a plan to lower emissions. Until then, the company will conduct its petroleum-loading operations at a third party's marine terminals.

A statement from the EPA said that, in 1997, the nonprofit group, Communities for a Better Environment, filed a lawsuit against Chevron, alleging that volatile organic compounds escaped into the atmosphere as petroleum products were transferred to marine vessels from subsea pipelines connected to the Chevron refinery. In November 1999, the US filed suit against Chevron alleging the same charges.

The settlement involves two environmental improvement undertakings. The first is a $500,000 project to upgrade refinery valve components, which will further reduce emissions. The other is a $500,000 project to help build and operate a health clinic in Wilmington, Calif., to diagnose and treat respiratory diseases, said the EPA.

Chevron will also pay $6 million to the federal government. The EPA and the Department of Justice said the penalty is the highest ever paid under the Clean Air Act for a single facility.

Chevron said that none of these commitments assigns or implies any wrongdoing. The company says it had believed it was in compliance with the applicable rules.

"Chevron followed a rule approved by both the South Coast Air [Quality Management] District and the State of California to purchase and scrap old, 'high-polluting' cars, thereby earning credits to offset air emissions at its marine terminal. Though the offset plan was under review by the US EPA, it had not received approval," a statement said.

Gary Yesavage, general manager of the El Segundo refinery, said, "Chevron is working very closely with the EPA to approve a vessel-loading protocol which will guarantee full compliance with all air quality regulations applicable to our marine terminal operations."

The settlement agreement is subject to a 30-day public comment period and final court approval.

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