After pleading guilty to felony violations of the Clean Air Act (CAA) and obstruction of justice in October 2011, Pelican Refining Company LLC, a Texas oil company operating in Lake Charles, LA, was sentenced to a $10 million criminal fine and $2 million in community service payments for environmental projects in Louisiana.

The company’s admissions include the following:

• Knowing commission of criminal violation of operating permits, which were discovered during a joint LDEQ – EPA inspection, resulting in unsafe operating conditions;
• Obstruction of justice for submission of materially false deviation reports;
• Nonexistent environmental department or budget for the same;
• Nonfunctioning or improperly-maintained pollution prevention equipment;
• Storage of sour crude in faulty tank, continuing after roof sank;
• Bypassing necessary caustic scrubber;
• Nonfunctioning continuous emission monitoring system (CEMS);
• Providing false information to states regarding asphalt testing; and
• Employee use of an emergency flare gun to relight improperly functioning flare used to burn off toxic gasses and for combustion of explosive chemicals.

As the investigation of company practices continues, it is noteworthy that a vice president and a facilities manager have pled guilty to CAA negligent endangerment charges, with the vice president of Lake Charles operations awaiting sentencing which could amount to one year in prison and $400,000 in fines. Furthermore, the company is prohibited from future operations unless it implements an environmental compliance plan with court oversight of quarterly independent audits, an annual practice of which could have prevented – or at least mitigated – the wrongdoing.