Pelican Refining pleads guilty, faces possible record fine in Louisiana

Houston-based refiner Pelican Refining Co. LLC could potentially pay the largest federal air pollution fine in Louisiana’s history after pleading guilty to felony violations of the Clean Air Act and obstruction of justice charges in federal court in Lafayette, La., the US Department of Justice and Environmental Protection Agency jointly announced.

The company could pay as much as $12 million in criminal penalties, including $2 million in community service payments for air pollution projects and other environmental projects in Louisiana, DOJ and EPA officials said on Oct. 12. It would be the largest criminal fine ever for CAA violations in the state, they noted.

In pleading guilty, Pelican officials admitted that the company, which operates a 6,000 b/d asphalt and road oil plant at Lake Charles, La., had violated numerous aspects of its permit to operate. The violations were discovered during a March 2006 inspection by EPA and Louisiana’s Department of Environmental Quality, according to DOJ and EPA. Pelican also pleaded guilty to obstruction of justice charges for submitting false deviation reports to the Louisiana DEQ, which administers the CAA in the state.

Pelican admitted that it had no company budget, department, or manager for environmental purposes and that it was required to use key pollution control equipment, which was either nonfunctional, poorly maintained, improperly installed, improperly installed, improperly placed into service, or improperly calibrated.

“It was a routine practice for over a year to use an emergency flare gun to relight the flare tower at the refinery, which was designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals,” DOJ and EPA said. “Because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses.”

They said Pelican also admitted that it stored sour crude oil at the refinery in a tank that was not properly placed into service and remained in the tank after its roof sank, that a caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed, and that a continuous emission monitoring system designed to measure the hydrogen sulfide levels in refinery emissions was not working properly.

DOJ and EPA said Pelican Vice-Pres. Byron Hamilton, who oversaw operations at the Lake Charles refinery since 2005 from a Houston office, pleaded guilty on July 6 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 a year in prison and a $200,000 fine for each of the two CAA counts, they said.

Contact Nick Snow at nicks@pennwell.com.

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