U.S. Announces Clean Air Agreement with ExxonMobil Nearly 77 Percent of Domestic Refining Capacity Now Under Consent Decrees

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October 11, 2005

ExxonMobil has reached a comprehensive Clean Air Act (CAA) agreement that is expected to reduce harmful air emissions by more than 53,000 tons per year at the company's seven U.S. petroleum refineries, the Department of Justice and the Environmental Protection Agency (EPA) announced today. The seven refineries, located in five states, represent approximately 11 percent of the total refining capacity in the United States. Today's settlement is the 17th in a joint DOJ-EPA initiative to reduce pollution in domestic petroleum refineries nationwide, bringing nearly 77 percent of domestic refining capacity under consent decree. These settlements were reached without litigation as the companies agreed to work with the government in reaching settlements that would protect the environment and allow refiners to expand fuel production in compliance with the environmental laws.

"This settlement brings more than three-quarters of the refining capacity in this nation under legally-binding agreements to reduce their harmful emissions," said Granta Y. Nakayama, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "That will lead to reductions of more than 315,000 tons of pollutants annually from the 17 refining companies that have agreed to come into compliance."

"The emissions reductions required by this settlement will lead to cleaner air and significant environmental and public health benefits," said Acting Assistant Attorney General Kelly A. Johnson of the Justice Department's Environment and Natural Resources Division. "We expect to continue our strong enforcement efforts and see to it that other companies follow suit by improving environmental controls to reduce harmful emissions."

Today's settlement was reached through the lodging of two separate consent decrees, which require ExxonMobil to install and implement innovative control technologies, reducing annual emissions of harmful toxins that can cause serious respiratory problems and exacerbate cases of childhood asthma. As a result of the agreement, emissions of nitrogen oxide (NOx) will be reduced by nearly 11,000 tons per year and sulfur dioxide (SO2) by over 42,000 tons per year. In addition, the company will upgrade its leak detection and repair practices, minimize flaring of hazardous gases, reduce emissions from its sulfur recovery plants and adopt strategies to ensure the proper handling of hazardous benzene wastes at each refinery. ExxonMobil has estimated that the capital cost of the injunctive relief program will be approximately $571 million.

Three states have also joined in today's settlement: Illinois, Louisiana, and Montana. Under the terms of the agreement, ExxonMobil will pay $8.7 million in civil penalties, and spend an additional $9.7 million on Supplemental Environmental Projects (SEPs) in communities around the company's refineries. As partners in the settlement, the states of Illinois, Louisiana, and Montana will share in the civil penalties.

The affected ExxonMobil refineries are located in Baton Rouge, La.; Baytown, Texas; Beaumont, Texas; Billings, Mont.; Chalmette, La.; Joliet, Ill.; and Torrance, Calif. The Chalmette Refinery is owned by Chalmette Refining, L.L.C., a joint venture between ExxonMobil and Petroleos de Venezuela S.A.

ExxonMobil's refinery in Chalmette, La., was heavily affected by Hurricane Katrina and is temporarily out of operation. At the request of ExxonMobil, today's consent decrees reflect a more flexible compliance timetable for that particular refinery.

Several of the proposed SEPs will benefit communities surrounding the refineries and include: reducing air emissions by retrofitting or replacing municipal bus fleets in communities near the Baytown, Beaumont, Billings, Joliet, and Torrance Refineries; performing four different emission reduction projects at the Baytown, Billings, Chalmette, and Joliet refineries, which are not otherwise required by law; and providing $3.7 million to the Louisiana Wildlife and Fisheries Foundation for coastal habitat protection and restoration in the state.

Under EPA's Petroleum Refinery Initiative, these settlements bring the number of multi-facility settlements reached with U.S. refiners to 17. Other U.S. refiners that have reached similar settlements are Koch, BP Amoco, Motiva/Equilon/Shell Deer Park, Marathon Ashland, Conoco, Navajo/MRC, Lion Oil, Ergon, Cenex, Coastal, Chevron, Giant, Citgo, ConocoPhillips, Sunoco and Valero Eagle. The agreements provide for a comprehensive, cooperative approach to addressing environmental problems across the industry, and create opportunities for lawful expansions of fuel production capacity.

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