Conoco and Holly settle alleged clean air refinery violations

By the OGJ Online Staff

WASHINGTON, DC, Dec. 20 -- The US Justice Department and the Environmental Protection Agency Thursday announced settlements with refiners Conoco Inc. and Holly Corp. over alleged federal clean air violations.

Under the action, the refiners also reached agreements with the states of Louisiana, Oklahoma, Colorado, and New Mexico. DOJ said that because Conoco and Holly negotiated in good faith, the settlements were reached without litigation.

The proposed consent decrees are still subject to a 30-day public comment period.

US environmental officials have reached similar agreements over the past year with Motiva Enterprises, Equilon Enterprises, Deer Park Refining LP, Marathon Ashland Petroleum LLC, Koch Petroleum Group, and BP PLC.

A consent decree filed in US District Court in Houston will require Conoco to spend $95-$110 million to install the "best available technology" to control emissions from stacks, wastewater vents, leaking valves, and flares throughout its refineries.

Another consent decree, filed in US District Court in Albuquerque, NM, requires Holly subsidiaries Navajo and Montana Refining to spend 16-$21 million to undertake similar projects.

The agreement with Conoco will affect its 245,000 b/d refinery at Westlake near Lake Charles, La.; its 174,000 b/d refinery at Ponca City, Okla.; its 57,500 b/d refinery at Commerce City, Colo.; and its 55,100 b/d refinery at Billings, Mont.

The agreement with Navajo and Montana Refining will affect a 60,000 b/d refinery at Artesia, NM, and a 7,000 b/d refinery at Great Falls, Mont.

The affected refineries comprise about 3.5% of the US' total refining capacity, DOJ said.

"These settlements are a victory for the environment and the public," said Attorney General John Ashcroft. "They exemplify the U.S. government's commitment to protect our natural resources, to promote cleaner air, and to ensure that companies are complying with environmental law."

Environmental groups were critical of the settlement, arguing more should be done to ensure refiners and power plant owners follow "new source" review rules. The administration is expected shortly to issue new guidelines on how refiners and power plant operators should monitor stationary source emissions under NSR.

"This settlement announced today raises an interesting question: if companies like Conoco can agree to reduce their emissions, increase output, and still make a good profit, why do other companies still demand "reform" of new source review?" said Frank O'Donnell of Clean Air Trust. "All these companies were responding to federal investigations that they violated the NSR provisions of the Clean Air Act.

"These settlements undercut the basic premise of the Cheney energy task force -- that new source review was inhibiting energy development," said O'Donnell.

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