2011 Sept Information Filed Against Pelican Refining

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

UNITED STATES OF AMERICA * CRIMINAL NO.

*

* 42 U.S.C. §§ 7661a(a) and 7413(c)(1)

VERSUS * 18 U.S.C. § 1519

*

* JUDGE

PELICAN REFINING COMPANY, L.L.C. * MAGISTRATE JUDGE

BILL OF INFORMATION

THE UNITED STATES ATTORNEY CHARGES:

AT ALL TIMES MATERIAL TO THIS BILL OF INFORMATION:

1. The defendant, Pelican Refining Company, L.L.C. (“PRC”), was a limited liability

company headquartered in Houston, Texas.

2. PRC was owned in equal shares by two other corporations. PRC owned and operated

the Pelican Refinery, a crude oil refining and asphalt production facility located in Lake Charles,

Louisiana. Pelican Refinery was a major stationary source.

3. Refinery operations at the Pelican Refinery were governed by Part 70 Title V

operating permits, a program established by the Clean Air Act and its regulations. Operation of the

Pelican Refinery was authorized only under the terms and conditions of the facility’s Title V Permit.

See Title 42 U.S.C. Section 7661a. That Permit detailed the specific point sources, emissions limits,

pollution prevention equipment and processes of the Pelican Refinery.

2:11-cr-00227

HAIKHILL

Case 2:11-cr-00227-RTH-CMH Document 1 Filed 09/06/11 Page 1 of 7 PageID #: 1

4. In 2005 and 2006, the refinery processed crude oil, including “sour crude” that had

high concentrations of hydrogen sulfide, also known as “H2S.” Hydrogen sulfide is a highly toxic

and flammable gas inherent to sour crude refining. H2S is classified as an “extremely hazardous

substance” pursuant to 42 U.S.C. § 11002(a)(2). Louisiana has classified hydrogen sulfide as a Class

III toxic air pollutant (acute and chronic toxin). H2S is a colorless and flammable gas that has a

characteristic odor of “rotten eggs” at low concentrations. At high concentrations, H2S paralyzes

the sense of smell so that its odor is no longer perceived. At higher concentrations, the gas paralyzes

the respiratory center of the brain so that the exposed individual stops breathing, loses consciousness,

and dies unless removed from exposure and resuscitated. Refinery workers reported smelling H2S

as well as having their personal H2S monitors “go off” from time to time. PRC had no procedure

to record, track, report, or mitigate H2S releases.

5. Crude oil also contains benzene, toluene, ethylbenzene, and xylene (collectively

known as “BTEX”). These compounds are each federally listed as hazardous air pollutants and

extremely hazardous substances. Louisiana has classified benzene as a Class I toxic air pollutant

(known and probable human carcinogen), ethylbenzene and xylene as Class II toxic air pollutants

(suspected human carcinogen and known or suspected human reproductive toxin), and toluene as

a Class III toxic air pollutant (acute and chronic toxin).

6. On March 10, 2005, the Pelican Refinery Corporation was issued a Title V permit by

the Louisiana Department of Environmental Quality (“LDEQ”). The corporation’s Title V permit

provides: “Permittee shall comply with all conditions of the 40 CFR Part 70 Permit. Any permit

noncompliance constitutes a violation of the Clean Air Act and is grounds for enforcement…”

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7. The Pelican Refinery’s Title V permit prohibited refinery operations unless the

following requirements were met:

A. Carbon Beds: Carbon beds - “carbon canisters” - were to be used at the loading dock

to capture fugitive emissions of toxic chemicals, such as volatile organic compounds

and H2S;

B. Tanks: Crude oil tanks with floating roofs were to be closed to the environment and

tested on a regular basis to measure the primary and secondary seal gaps to ensure

that the floating roof was preventing the release of emissions of toxic chemicals, such

as volatile organic compounds and H2S;

C. Caustic Scrubber: After refining crude oil, off gas was to pass through a caustic

scrubber unit that sprayed a caustic solution in order to remove H2S;

D. CEMS: After refining crude oil, and after being scrubbed by the caustic scrubber,

emissions from the off gas were to be analyzed by a Continuous Emissions

Monitoring System (“CEMS”), also known as an “H2S analyzer”; and

E. Flare: The Pelican Refinery was required to have a process flare that would allow

any off gases to safely escape without explosion and which would combust the gases

to minimize air pollution and the release of H2S into the environment.

8. The Clean Air Act, 42 U.S.C. § 7413(c)(1), makes it a felony to knowingly violate

requirements or prohibitions of the Act, including the requirements of any federal or state operating

permit authorized or required by Title V.

9. The Clean Air Act imposes a number of monitoring, record keeping, and reporting

requirements on the owners and operators of pollution sources through the Title V operating permits

program and other provisions. These requirements allow owners, operators, and regulatory

authorities to determine whether sources are operating in compliance with statutory, regulatory, and

permit requirements and most importantly, to demonstrate compliance with permitted emission

limits. These emission limits are permitted by the U.S. Environmental Protection Agency (“EPA”)

and LDEQ to ensure that primary and secondary ambient air standards, which were established to

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ensure the safety and health of the public, are not exceeded. Without timely and accurate reports

from the owners and operators of air pollution sources, regulatory agencies cannot determine

compliance with air permits, which are issued to protect public health.

10. The EPA is the federal agency with primary responsibility over the Clean Air Act.

Through a program set forth in Part 70 of Title 40 of the Code of Federal Regulations, LDEQ is the

delegated authority to administer the bulk of federal Clean Air Act regulated activities within the

state. Under the Clean Air Act regulations, those holding Title V permits are required to send

periodic reports to designated state regulatory entities, such as LDEQ. LDEQ utilizes information

contained in those reports to administer the federal Clean Air Act program. LDEQ also transmits

certain information contained in those reports to the EPA. Consequently, when an entity knowingly

introduces false information into those reports, it not only obstructs LDEQ, but also the EPA’s Clean

Air Act program, including potential enforcement actions.

COUNT 1

CLEAN AIR ACT, TITLE V PERMIT VIOLATION

On or about August 1, 2005, through on or about July 1, 2006, in the Western District of

Louisiana, defendant PELICAN REFINING COMPANY, L.L.C., knowingly violated a Title V

operating permit issued under Subchapter V of the Clean Air Act, by knowingly operating and

causing the operation of its refinery in contravention of said permit, to wit:

a. The defendant operated the refinery and caused crude oil to be introduced into Tank

110-16 which had a failed floating roof and which allowed compounds such as

benzene, toluene, ethylbenzene, and xylene to uncontrollably escape into the

atmosphere, and in violation of the following permit conditions:

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i. Without first repairing holes, tears, and other openings in the seal or the seal

fabric of Tank 110-16’s primary and secondary seals so that these conditions

no longer existed before filling and refilling;

ii. Without properly determining the gap areas and maximum gap widths

between the primary and secondary seals and the tank wall within 60 days;

iii. Without notifying LDEQ or the EPA at least 7 days prior to filling and

refilling; and

iv. Without repairing or emptying the tank within 45 days of identifying the

failure.

b. The defendant operated the refinery without the use of a non-regenerable carbon bed

designed to collect and reduce emissions at the barge loading dock;

c. The defendant operated the refinery without the use and proper use of caustic to treat

and remove non-condensable toxic pollutants, including H2S;

d. The defendant operated the refinery without the use and proper use of a CEMS to

continuously monitor H2S concentrations;

e. The defendant operated the refinery without a vapor recovery system at the barge

loading dock; and

f. The defendant operated the refinery without a properly-functioning process flare at

all times when emissions, including H2S, could be discharged into the atmosphere.

All in violation of Title 42 United States Code, Sections 7661a(a) and 7413(c)(1). [42 U.S.C. §§

7661a(a) and 7413 (c)(1)].

COUNT 2

CLEAN AIR ACT, TITLE V PERMIT VIOLATION

On or about July 2, 2006, through on or about March 1, 2007, in the Western District of

Louisiana, defendant PELICAN REFINING COMPANY, L.L.C., knowingly violated a Title V

operating permit issued under Subchapter V of the Clean Air Act, by knowingly operating and

causing the operation of its refinery in contravention of said permit, to wit:

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a. The defendant operated the refinery without the use of a non-regenerable carbon bed

designed to collect and reduce emissions at the barge loading dock;

b. The defendant operated the refinery without the use and proper use of caustic to treat

and remove non-condensable toxic pollutants, including H2S;

c. The defendant operated the refinery without the use and proper use of a CEMS to

continuously monitor H2S concentrations;

d. The defendant operated the refinery without a vapor recovery system at the barge

loading dock; and

e. The defendant operated the refinery without a properly-functioning process flare at

all times when emissions, including H2S, could be discharged into the atmosphere.

All in violation of Title 42, United States Code, Sections 7661a(a) and 7413(c)(1). [42 U.S.C. §§

7661a(a) and 7413(c)(1)].

COUNT 3

OBSTRUCTION OF JUSTICE

On or about 2006, in the Western District of Louisiana and elsewhere, defendant PELICAN

REFINING COMPANY, L.L.C., knowingly made false entries in documents with the intent to

impede, obstruct, and influence the proper administration of a matter within the jurisdiction of an

agency of the United States, to wit: the filing of materially false deviation reports with the Louisiana

Department of Environmental Quality, a state agency which administers the federal Clean Air Act

program in Louisiana, that concealed and failed to disclose an ongoing violation and that falsely

stated that: “A contractor is currently working on building a treater system that will have carbon

canister controls” when no such work had been performed. All in violation of Title 18, United States

Code, Section 1519. [18 U.S.C. § 1519].

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IGNACIA S. MORENO STEPHANIE A. FINLEY

ASSISTANT ATTORNEY GENERAL UNITED STATES ATTORNEY

ENVIRONMENT & NATURAL WESTERN DISTRICT OF LOUISIANA

RESOURCES DIVISION

U.S. DEPARTMENT OF JUSTICE

BY: BY:

/s/ Richard A. Udell /s/ Stephanie A. Finley

Richard A. Udell Stephanie A. Finley

Senior Trial Attorney United States Attorney

Environmental Crimes Section Western District of Louisiana

U.S. Department of Justice

/s/ Christopher Hale

Christopher Hale

Trial Attorney

Environmental Crimes Section

U.S. Department of Justice

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Documents

2011 Sept Information Filed Against Pelican Refining