AZ AND NEW MEXICO POWER PLANT OWNERS TO REDUCE EMISSIONS AT NAVAJO NATION POWER PLANT

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, June 24, 2015

U.S. Requires Arizona and New Mexico Plant Owners to Reduce Emissions at Navajo Nation Four Corners Power Plant

Today, the U.S. Department of Justice and the Environmental Protection Agency (EPA) announced a federal Clean Air Act settlement with several Arizona and New Mexico-based utility companies to install pollution control technology to reduce harmful air pollution from the Four Corners Power Plant located on the Navajo Nation near Shiprock, New Mexico.

The settlement requires an estimated $160 million in upgrades to the plant’s sulfur dioxide (SO2) and nitrogen oxide (NOx) pollution controls.  The settlement also requires $6.7 million to be spent on three health and environmental mitigation projects for tribal members and payment of a $1.5 million civil penalty.  EPA expects that the actions required by the settlement will reduce harmful emissions by approximately 5,540 tons per year.

“This settlement is a significant achievement for air quality and the health of the people of the Navajo Nation and the surrounding region,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “The agreement will require stringent pollution controls as well as public health and environmental projects that will have lasting benefits for the Navajo people.  It is also a reflection of how serious we are about addressing environmental justice issues in Indian country.”

“All power plants should be using the latest air pollution control technology,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “The law requires companies to protect clean air, and those living nearby – like Navajo communities – expect it.  In addition to installing pollution controls, Arizona Public Service will also take the responsible steps to protect the health of those living near the Four Corners plant, which is one of the largest sources of harmful pollution in the country.”

“This settlement will reduce pollution from the Four Corners Power Plant for years to come, and requires the Plant's owners to fund significant health and environmental projects that will further benefit the Navajo Nation and other communities impacted by the Plant,” said U.S. Attorney Damon P. Martinez for the District of New Mexico.  “We also applaud the efforts of the citizen groups and other co-plaintiffs who helped represent the interests of the Navajo people and the environment so well, and who contributed significantly to obtaining such a fine result for the Four Corners Region.”

Arizona Public Service Company (APS) is the operator and primary owner of the Four Corners Plant.  El Paso Electric Company, Public Service Company of New Mexico, Salt River Project Agricultural Improvement and Power District and Tucson Electric Power Company are current co-owners of the plant and Southern California Edison Company is a former co-owner of the plant.  The settlement resolves claims that the companies violated the New Source Review provisions of the federal Clean Air Act by unlawfully modifying the Four Corners Power Plant without obtaining required permits or installing and operating the best available air pollution control technology.

The pollution controls for NOx required by the settlement improve the Selective Catalytic Reduction controls for the Four Corners Power Plant finalized by EPA in 2012 under the Clean Air Act’s regional haze program.  The current controls for SO2 will be upgraded to increase their efficiency. These additional upgrades will reduce SO2 emissions by approximately 4,653 tons per year and NOx emissions by approximately 887 tons per year.

The settlement requires $6.7 million of mitigation funds to be spent on three types of projects, including cleaner heating systems, weatherization and a Health Care trust fund. Southern California Edison will spend approximately $3.2 million on a project to replace or retrofit local residents’ inefficient, higher-polluting wood-burning or coal-burning appliances with cleaner-burning, more energy-efficient heating systems.  In addition, APS and the other current co-owners will spend approximately $1.5 million for weatherization projects for local homes to reduce energy use.  Examples include the installation of floor, wall and attic insulation; sealing of windows and doors; duct sealing; passive solar retrofits; and testing and repair of combustion appliances.

Finally, APS and the other current co-owners will spend $2 million to establish a Health Care Project trust fund.   The Health Care Project trust will pay for certain medical expenses for people living on the Navajo Nation, near the Four Corners Power Plant, who require respiratory health care.  The funds may be used to pay for complete medical examinations, tests, review of current medications, prescriptions, oxygen tanks and other medical equipment.  The funds may also be used to pay for transportation to and from the hospital or doctors’ offices.

SO2 and NOx, two predominant pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze.  These pollutants form particulates that can cause severe respiratory and cardiovascular impacts and premature death.

This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes coal-fired power plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements.  The total combined SO2 and NOx emission reductions secured from all these settlements will exceed 2 million tons each year, once all the required pollution controls are installed and implemented.

Citizen groups including Diń́é Citizens Against Ruining Our Environment, To’ Nizhoni Ani and National Parks Conservation Association are co-plaintiffs to the settlement and will simultaneously be resolving their own currently pending lawsuit against the companies.

COMPANY TO PAY $3 MILLION FOR AMMONIA RELEASE THAT SICKENED OIL SPILL WORKERS

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, June 2, 2015

Georgia-Based Millard Refrigerated Services to Pay $3 Million Civil Penalty for Ammonia Release That Sickened Workers Responding to Deepwater Horizon Oil Spill

The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a final settlement with Millard Refrigerated Services that resolves alleged violations of the Clean Air Act, Emergency Planning and Community Right-to-Know Act and Comprehensive Environmental Response, Compensation, and Liability Act violations for an airborne release of ammonia from Millard’s Theodore, Alabama, facility in 2010.  Millard will pay a $3 million penalty for the violations that sickened 152 people responding to the BP oil spill.

“The release of ammonia created significant health problems,” said Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division.  “This settlement underscores how lapses in environmental management can have serious consequences, and today we are holding Millard accountable for this failure to ensure the safety of its workers and the surrounding community.”

“The Clean Air Act exists to protect all of us from preventable threats to our health and safety, such as what happened in this case,” said Keyon R. Brown, U.S. Attorney for the Southern District of Alabama. “On behalf of the citizens of our district, I commend the hard work of the EPA and the Department of Justice’s Environmental and Natural Resources Division in achieving such a significant settlement that vindicates these interests."

“EPA is serious about holding companies that threaten people’s health and safety accountable,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “It’s imperative that companies that use and store potentially-hazardous materials like ammonia ensure their operations do not pose a health risk to their employees or the public.”

On Aug. 23, 2010, the Millard Refrigerated Service warehouse in Theodore, Alabama, released approximately 32,000 pounds of anhydrous ammonia, to which exposure can be lethal, into the air after refrigeration equipment malfunctioned.  The ammonia travelled directly over a site where more than 800 people were working on decontaminating ships responding to the Deepwater Horizon oil spill in the Gulf of Mexico.  The Mobile, Alabama, Emergency Management Agency ordered an evacuation of the surrounding area and a one mile shelter in place situation following the ammonia release.

One hundred fifty-two people working at the site and on ships were treated for symptoms of ammonia exposure at hospitals in the Mobile area, four of whom were admitted into intensive care units.  One Millard employee sustained injuries after briefly losing consciousness from ammonia inhalation.

During its investigation of the warehouse after the ammonia release, EPA discovered that Millard failed to adequately address a well-known risk for ammonia production systems called hydraulic shock, which can cause catastrophic equipment failures.  These failures can lead to hazardous releases of anhydrous ammonia.  The company’s failure to address this risk, in addition to other deficiencies in its production and safety systems, amounted to 37 distinct violations of the Clean Air Act’s Risk Management Program and General Duty Clause.  These requirements compel companies that store or use potentially-hazardous substances like ammonia to identify the hazards posed by their operation, design and maintain a safe facility and minimize the consequences of any releases that might occur. The company’s failure to immediately report a release of anhydrous ammonia above the reportable quantity to the National Response Center amounted to one CERCLA violation.  The company’s failure to immediately report a release of anhydrous ammonia to the local and state emergency planning commissions and to file a follow-up reports for two releases amounted to three EPCRA violations.

EPA also discovered that Millard had two prior smaller ammonia releases caused by hydraulic shock, which should have signaled a need to take steps to prevent a catastrophic release like the one that occurred at the Theodore warehouse.  Millard sold the Theodore warehouse facility, which is no longer in operation.

The settlement was entered in the District Court in Mobile, Alabama.

UTAH COMPANY SETTLES ALLEGED CLEAN AIR ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, March 19, 2015
Utah-Based Washakie Renewable Energy LLC Settles Renewable Fuel Standard Violations

The Department of Justice today filed a stipulation of settlement resolving civil claims against Washakie Renewable Energy LLC (Washakie) for violations of the Renewable Fuel Program under the Clean Air Act.  The stipulation of settlement was filed in the U.S. District Court of the District of Columbia.  A complaint stating the government’s claims was filed at the same time, announced Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Assistant Administrator Cynthia Giles for the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance.

From January to October of 2010, Washakie generated more than 7.2 million renewable identification numbers (RINs) based upon its production of biodiesel at its Plymouth, Utah, facility.  During that time period, however, Washakie did not produce any biodiesel - at the Plymouth facility or anywhere else.  The biodiesel associated with the 7.2 million RINs would have accounted for a reduction of emissions equivalent to more than 30,000 metric tons of carbon dioxide.

The stipulation of settlement requires Washakie to pay a civil penalty of $3 million.  In addition to the penalty, Washakie has already retired more than 7.2 million RINs by purchasing RINs from other parties.  By doing this, Washakie tried to correct the problem it created by putting invalid RINs on the market.  In order to protect the program's integrity and maintain a level playing field for regulated companies, EPA is pursuing enforcement actions against renewable fuel producers and importers that generated invalid RINs.

“The defendant made quite a profit by failing to adhere to the requirements of the Renewable Fuel Program regulations,” said Assistant Attorney General Cruden.  “The penalty here sends the message that renewable fuel producers will be held accountable for meeting all legal requirements.  The Department of Justice remains committed to taking the profit out of illegal activity.”

“This case is another example of the EPA’s commitment to maintain the integrity of the Renewable Fuel Standard program,” said Assistant Administrator Giles.  “Making sure producers are supporting their claims with production of actual renewable fuels is critical to reducing greenhouse gas emissions that are fueling climate change.”

The Energy Independence and Security Act of 2007 expanded and strengthened the Renewable Fuel Program to encourage the blending of renewable fuels into the motor vehicle fuel supply of the U.S. and thereby reduce the nation’s dependence on foreign oil, help grow the renewable energy industry in the United States, and achieve significant greenhouse gas reductions.   Authorized renewable fuels producers and importers could generate and attach credits – known as “renewable identification numbers” or “RINs” – to renewable fuels, such as biodiesel, that they produced or imported.  Fossil fuel refiners and importers are obligated to obtain RINs each year according to the volume of fossil fuels that they put on the market.  These “obligated parties” must purchase RINs or produce them themselves and they are responsible for the acquisition of valid RINs to meet their renewable fuel quotas.  If transferred RINs are invalid, the transferees are liable for failing to satisfy their obligations.  Because certain companies need RINs to comply with regulatory obligations, RINs have market value.  A RIN is invalid if it incorrectly identifies, among other things, the production facility, or the type of fuel produced, or the volume of fuel produced and the regulations prohibit the transfer of invalid RINs.

Washakie registered with the EPA as a renewable fuel producer under the Renewable Fuel Regulations and identified its facility in Plymouth as a renewable fuel production facility.  EPA initially discovered these violations during an inspection of Washakie’s Plymouth facility in 2010.  EPA uncovered additional information concerning the violations in Washakie’s response to information requests and further investigation.  There is no evidence that Washakie produced any biodiesel anywhere during the period covered by the complaint.

ENGINE MAKER TO PAY $1.2 MILLION TO RESOLVE ALLEGED CLEAN AIR ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, March 24, 2015

MTU America Inc., Agrees to $1.2 Million Penalty and Auditing Program to Resolve Clean Air Act Violations

MTU America Inc. (MTU), a subsidiary of Rolls-Royce Power Systems AG, will implement an auditing program to ensure proper emissions testing and compliance with federal emission standards for its heavy-duty diesel non-road engines as part of a settlement to resolve alleged Clean Air Act violations, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.

The complaint filed with the settlement alleges that MTU violated the Clean Air Act by selling 895 non-road, heavy-duty diesel engines, which are used in mining, marine and power generation vehicles and equipment, without valid certificates of conformity.  EPA voided the certificates of conformity purporting to cover the engines based on improper emissions testing by MTU employees.  Under the settlement, MTU will pay a $1.2 million penalty and perform annual audits of its engine emission testing and certification activities for three years.  The audits will be conducted by an EPA-approved, third-party auditor that will monitor and evaluate compliance with Clean Air Act requirements for testing, certification, record-keeping and reporting.  MTU is also required to initiate corrective actions if the audit reveals non-compliance.

“Certificates of conformity are a critical part of EPA’s program to ensure that vehicles and engines meet Clean Air Act emissions standards,” said Assistant Attorney General John C. Cruden of the Department of Justice’s Environment and Natural Resources Division.  “Companies that skirt the rules in their certification testing hurt the public and their competitors.  Today’s settlement ensures that the company will adequately monitor the activities of employees involved in the certification process to prevent this kind of conduct from recurring.”

“Engines that aren’t properly certified can emit toxic pollution that aggravates asthma and other respiratory illnesses,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance.  “This agreement requires that MTU take important steps to comply with the law, protect the public and reduce smog in our air.”

Every engine sold in or imported into the U.S. must be covered by a valid EPA-issued certificate of conformity.  When applying for a certificate of conformity, an applicant must certify to EPA that it followed appropriate testing, certification, record-keeping and reporting requirements to ensure its products will meet applicable federal emission standards to control air pollution.  Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and nitrogen oxides, which can cause respiratory illness, aggravate asthma and contribute to the formation of ground-level ozone or smog.

Through information disclosed by the company, EPA discovered that MTU had obtained EPA certificates of conformity without conducting valid testing.  EPA learned that MTU had installed a catalytic converter onto its prototype engine during testing to reduce emissions of pollutants.  MTU had also performed maintenance during durability testing on the same engine, but had not reported this to EPA, a violation of testing regulations.

Selling or importing engines that are not covered by valid certificates of conformity is a violation of the Clean Air Act.  Based on MTU’s disclosures, EPA voided the certificates of conformity covering these engines on Feb. 23, 2015.  MTU violated the Clean Air Act by selling and importing the engines, which, because of the voiding, were not covered by a valid certificate of conformity as required by law.  MTU has worked with EPA to take steps to prevent these violations from occurring in the future.

This settlement is part of an ongoing effort by EPA to ensure that all vehicles and engines meet federal emission limits for harmful pollution.  The Clean Air Act requires that all vehicles have EPA-issued certificates of conformity prior to being imported or sold in the U.S. to demonstrate that they meet federal emission standards.

MTU America Inc. based in Novi, Michigan, and formerly known as Tognum America Inc. is a wholly-owned subsidiary of Rolls-Royce Power Systems AG, a German corporation. MTU manufactures non-road, off-highway engines for the North American market for locomotive, marine, construction and defense uses.

CARBON BLACK MANUFACTURER AGREES TO SPEND $84 MILLION TO CONTROL AIR POLLUTION

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, November 19, 2013
Cabot Corporation Agrees to Spend Over $84 Million to Control Harmful Air Pollution at Louisiana and Texas Facilities

Boston-based Cabot Corporation, the second largest carbon black manufacturer in the United States, has agreed to pay a $975,000 civil penalty and spend an estimated $84 million on state of the art technology to control harmful air pollution, resolving alleged violations of the New Source Review (NSR) provisions of the Clean Air Act (CAA) at its three facilities in the towns of Franklin and Ville Platte, La., and Pampa, Texas, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.   This agreement is the first to result from a national enforcement initiative aimed at bringing carbon black manufacturers into compliance with the CAA’s NSR provisions.    

The state of Louisiana Department of Environmental Quality is a co-plaintiff in the case and will receive $292,500 of the penalty.

“By agreeing to pay an appropriate penalty and install state of the art technology to control harmful air pollution, Cabot Corp. is taking a positive step forward to address these alleged violations of the Clean Air Act,” said Acting Assistant Attorney General Robert G. Dreher of the Justice Department’s Environment and Natural Resources Division.  “This agreement will serve as a model for how the industry can come into compliance with the Clean Air Act by installing controls that prevent harmful pollution and improve air quality for surrounding communities.”

“With today’s commitment to invest in pollution controls, Cabot has raised the industry standard for environmental protection,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance.  “These upgrades will have lasting, tangible impacts on improved respiratory health for local communities.  We expect others in the industry to take notice and realize their obligation to protect the communities in which they operate.”

“This is a huge win for the citizens of our district,” said U.S. Attorney Stephanie A. Finley.  “These harmful pollutants can cause serious, long term respiratory harm.  The United States Attorney’s Office is committed to the enforcement of the environmental laws and protection of the community.  This settlement promotes a healthier environment and an opportunity to allow the residents of the district to breathe cleaner air.”

At all three facilities, the settlement requires that Cabot optimize existing controls for particulate matter or soot, operate an “early warning” detection system that will alert facility operators to any particulate matter releases, and comply with a plan to control “fugitive emissions” which result from leaks or unintended releases of gases.   To address nitrogen oxide (NOx) pollution, Cabot must install selective catalytic reduction technology to significantly reduce emissions, install continuous monitoring, and comply with stringent limits.   At the two larger facilities in Louisiana, Cabot must address sulfur dioxide (SO2) pollution by installing wet gas scrubbers to control emissions, install continuous monitoring, and comply with stringent emissions limits.   In addition, the Texas facility is required to comply with a limit on the amount of sulfur in feedstock that is the lowest for any carbon black plant in the United States.

These measures are expected to reduce NOx emissions by approximately 1,975 tons per year, SO2 emissions by approximately 12,380 tons per year, and significantly improve existing particulate matter controls.  Exposure to NOx emissions can cause severe respiratory problems and contribute to childhood asthma.   SO2 and NOx can be converted to fine particulate matter once released in the air.  Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death.   The harmful health and environmental impacts from these pollutants can occur near the facilities as well as in communities far downwind from the plants.
       
In the complaint filed by DOJ on behalf of EPA, the government alleged that, between 2003 and 2009, Cabot made major modifications at its carbon black facilities without obtaining pre-construction permits and without installing and operating required pollution technology.  The complaint further alleges that these actions resulted in increased emissions of NOx and SO2, violating CAA requirements stating that companies must obtain the necessary permits prior to making modifications at a facility and must install and operate required pollution control equipment if those modifications will result in increases of certain pollutants.

Today’s action also requires that Cabot spend $450,000 on energy saving and pollution reduction projects that will benefit the communities surrounding the facilities in Franklin and Ville Platte, La., and in Pampa, Texas, such as upgrading air handling units at municipal buildings in the three communities to more efficient technology.  

Carbon black is a fine carbonaceous powder used as a structural support medium in tires and as a pigment in a variety of products such as plastic, rubber, inkjet toner and cosmetics.  It is produced by burning oil in a low oxygen environment; the oil is transformed into soot (carbon black), which is collected in a baghouse.  Because the oil used in the process is low value high sulfur oil, the manufacturing process creates significant amounts of SO2 and NOx, as well as particulate matter.

This settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions.  Since 2010, EPA has been focusing enforcement efforts on reducing emissions at carbon manufacturing plants in the United States.  Currently, none of the 15 carbon black manufacturing plants located in the United States have controls on emissions of SO2 and NOx or have continuous emissions monitors.

CITGO PETROLEUM CORP. TO PAY PENALTY AND IMPLEMENT PROJECTS TO REDUCE AIR POLLUTION

FROM:  U.S. ENVIRONMENTAL PROTECTION AGENCY
Thursday, September 19, 2013
Citgo Agrees to Reduce Air Pollution and Pay Penalty to Resolve Clean Air Act Violations at Two Refineries

The Department of Justice and U.S. Environmental Protection Agency (EPA) announced that Houston-based CITGO Petroleum Corp. (CITGO) has agreed to pay a $737,000 civil penalty and to implement projects to reduce harmful air pollution, resolving alleged violations of the Clean Air Act (CAA) at its petroleum refining facilities located in Lemont, Ill., and Lake Charles (Westlake), La.

In addition to the penalty, today’s settlement, lodged in U.S. District Court for the Southern District of Texas, requires that CITGO implement projects that are expected to reduce emissions of volatile organic compounds (VOCs), including toxics, by more than 100 tons over the next five years.

“The terms of this settlement require projects to significantly reduce harmful air pollution, including reductions in benzene emissions and other cancer-causing air toxics,” said Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division.  “This agreement will benefit communities across the United States with cleaner healthier air and will bring mobile sources of pollution under control, according to the standards of the Clean Air Act.”

“Producing fuel for cars sold in the U.S. carries a requirement to meet Clean Air Act standards,” said Cynthia Giles, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance.  “The innovative technologies that CITGO is required to install will reduce the impact of its fuel production on the environment and help protect communities from harmful air pollution.”

To reduce VOC emissions, including toxics, the settlement requires that CITGO install and maintain a geodesic dome on one of the fuel storage tanks at its Lemont refinery, as well as carbon adsorption systems on two fuel storage tanks at its Lake Charles refinery.

In a complaint filed at the same time as the settlement, EPA alleged that the Lake Charles refinery produced fuel that exceeded the refinery’s annual average emissions limit for mobile source air toxics, including benzene.  EPA further alleged that CITGO failed to sample and test reformulated gasoline blendstock at its Lemont refinery, as required by the CAA.

The CAA requires that all fuel produced, imported, and sold in the United States meet certain emissions standards for harmful pollutants, such as benzene and other cancer-causing air toxics.  Air toxics emissions from vehicles and other mobile sources are of particular concern in the areas closest to where they are emitted, but can also be transported long distances, affecting the health and welfare of people in other geographic areas.  Some of these toxic compounds can persist in the environment and bioaccumulate in the food chain, further spreading their harmful effects.

The sampling, testing, recordkeeping, and reporting requirements of the fuels program provide the foundation for EPA’s compliance program.  Refiners that violate these requirements undermine the integrity of the fuels regulations and hinder the Agency’s ability to ensure gasoline complies with fuel quality and performance standards, potentially leading to an increase in harmful air pollution.  Today’s settlement supports EPA’s efforts to reduce toxic air pollution from facilities that threaten communities and the environment.

CITGO is a refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products.  CITGO is owned by PDV America Inc., an indirect, wholly-owned subsidiary of Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.

3 CORPORATIONS, 6 INDIVIDUALS CHARGED IN BIOFUELS FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, September 18, 2013
Six Individuals, Three Corporations Charged in Indiana-based Biofuels Fraud Scheme

The Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Southern District of Indiana announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.

“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”

 “This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” said U.S. Attorney for the Southern District of Indiana Joseph H. Hogsett. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”

“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence and expand our nation’s renewable fuels sector,” said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency (EPA). “Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law, and undermine our commitment to protect public health and the environment.”

“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud,” said Robert A. Jones, Special Agent in Charge of the FBI Indianapolis Division. “In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”

“The indictments returned today send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people,” said James C. Lee, Special Agent in Charge, IRS Criminal Investigation. “Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
 
 The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and 1 percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 was worth up to $2.50 more than an equivalent gallon of B99.

 Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey and Brian Carmichael— operated E Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own, but instead was simply acting as a pass-through facility for fuel purchased elsewhere.

 The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities and the Internal Revenue Service was exposed to as much as $35 million in false claims.

 The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”

 Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.              

 In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97% of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.

 The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.      
 
 If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants were scheduled for initial appearances before a federal magistrate judge today.

 An additional defendant was charged today by federal information, and has petitioned the court to enter a plea of guilty and cooperate with investigators.  Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.

The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney of the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.

 An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
 
 The collaborative investigation that led to today’s arrests was the result of work by the EPA’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the FBI, the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.

U.S., SAFEWAY REACH SETTLEMENT REGARDING ALLEGED CLEAN AIR ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, September 4, 2013
United States Reaches Settlement with Safeway to Reduce Emissions of Ozone-Depleting Substances Nationwide

In a settlement agreement with the United States, Safeway, the nation’s second largest grocery store chain, has agreed to pay a $600,000 civil penalty and implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at 659 of its stores nationwide, estimated to cost approximately $4.1 million, announced the U.S. Environmental Protection Agency (EPA) and Department of Justice today.

The settlement involves the largest number of facilities ever under the Clean Air Act (CAA)’s regulations governing refrigeration equipment.
 
The settlement resolves allegations that Safeway violated the federal CAA by failing to promptly repair leaks of HCFC-22, a hydro-chlorofluorocarbon that is a greenhouse gas and ozone-depleting substance used as a coolant in refrigerators, and failed to keep adequate records of the servicing of its refrigeration equipment. Safeway will now implement a corporate refrigerant compliance management system to comply with stratospheric ozone regulations. In addition, Safeway will reduce its corporate-wide average leak rate from 25 percent in 2012 to 18 percent or below in 2015. The company will also reduce the aggregate refrigerant emissions at its highest-emission stores by 10 percent each year for three years.

“Safeway’s new corporate commitment to reduce air pollution and help protect the ozone layer is vital and significant,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”

 “This first-of-its-kind settlement will benefit all Americans by cutting emissions of ozone-depleting substances across Safeway’s national supermarket chain,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “It can serve as a model for comprehensive solutions that improve industry compliance with the nation’s Clean Air Act.”

HCFC-22 is up to 1,800 times more potent than carbon dioxide in terms of global warming emissions. The measures that Safeway has committed to are expected to prevent over 100,000 pounds of future releases of ozone-depleting refrigerants that destroy the ozone layer.

EPA regulations issued under Title VI of the CAA require that owner or operators of commercial refrigeration equipment that contains over 50 pounds of ozone-depleting refrigerants, and that has an annual leak rate greater than 35 percent repair such leaks within 30 days.

HCFCs deplete the stratospheric ozone layer, which allows dangerous amounts of cancer-causing ultraviolet rays from the sun to strike the earth, leading to adverse health effects that include skin cancers, cataracts, and suppressed immune systems. Pursuant to the Montreal Protocol, the United States is implementing strict reductions of ozone-depleting refrigerants, including a production and importation ban by 2020 of HCFC-22, a common refrigerant used by supermarkets.

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including large grocery stores.

Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership Program works with food retailers to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies and best environmental practices.

Safeway, headquartered in Pleasanton, Calif., is the second largest grocery chain in North America with 1,412 stores in the United States and 2012 revenues of $44.2 billion. Safeway operates companies under the banner of Vons in southern California and Nevada, Randalls in Texas, and Carrs in Alaska. The settlement covers 659 Safeway stores – all Safeway stores in the United States that have commercial refrigeration equipment regulated by the CAA except for those stores in Safeway’s Dominick’s Division, which was the subject of a 2004 settlement with the United States.

The settlement was lodged today in the U.S. District Court for the Northern District of California, and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.

IMPORT FIRM AND OWNER AGREE TO PAY OVER $3.5 MILLION TO SETTLE CAR ENGINE CLEAN AIR ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, August 29, 2013
Two California Firms and Owner Agree to Settle Clean Air Act Violations Stemming from Illegal Import of Vehicles

Two Los Angeles-based consulting firms, MotorScience Inc., and MotorScience Enterprise Inc., (MotorScience) and their owner, Chi Zheng, have agreed to settle alleged Clean Air Act (CAA) violations stemming from the illegal import of 24,478 all-terrain, recreational vehicles into the U.S. from China without testing to ensure emissions would meet applicable limits on harmful air pollution, announced the Department of Justice, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (ARB).

MotorScience and Zheng have agreed to have a stipulated judgment entered against them for a $3.55 million civil penalty and to pay an additional $60,000 civil penalty within six months.  The United States will receive 80 percent of collected penalties, and California will receive the remaining 20 percent.

“Vehicles and engines that are manufactured overseas and sold in the U.S. must meet the same Clean Air standards as domestically-made products,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “We will continue to vigorously enforce these laws to ensure that American consumers get environmentally sound products that do not pollute the atmosphere and violators do not gain an unfair economic advantage by skirting the law.”

“This illegal importation of over 20,000 vehicles evaded federal emission standards, jeopardizing human health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.  “Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and oxides of nitrogen which can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.”

“The integrity of new vehicle standards are the foundation for achieving our air quality goals in California,” said ARB Enforcement Chief James Ryden.  “When a manufacturer circumvents these requirements, they not only cheat their customers and competitors, but they also shortchange every citizen of our state who relies upon our shared actions to clean the air.”

Today’s settlement also requires that for the next 15 years, before either MotorScience or Zheng may engage in any further work involving non-road vehicles and engines, they must follow a rigorous compliance plan to ensure that any emissions testing and certification applications submitted to EPA or the ARB accurately represent those vehicles and engines.  Non-road vehicles and engines include recreational vehicles, generators, lawn and garden equipment, and other non-road internal combustion engines.

EPA’s investigation showed that MotorScience obtained EPA certificates of conformity for numerous vehicles without conducting required emissions testing.  As alleged in separate complaints filed in federal district court by the United States and the state of California in September 2011, MotorScience arranged for emissions testing of a limited number of vehicles, and then reused those results to obtain certificates of conformity for numerous other, dissimilar vehicles.  For at least three of those vehicles, EPA confirmed that their emissions exceeded the federal limits for hydrocarbons and nitrogen oxides.

MotorScience and its president, Zheng, provide consulting services for vehicle manufacturers and other clients interested in obtaining certificates of conformity from EPA to allow import of their vehicles into the U.S.  In 2010, EPA voided 12 certificates held by four of the defendants’ clients, who were U.S.-based importers for Chinese recreational vehicle manufacturers.  The complaints filed by the U.S. and California alleged that defendants caused four of their clients to illegally import vehicles under federal certificates and California executive orders that were voided. The complaints further alleged that defendants caused their clients to fail to create and maintain required records on emissions testing.

The CAA prohibits any vehicle or engine from being imported into or sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity demonstrating that the vehicle or engine meets applicable federal emission standards.  The CAA also prohibits any actions that cause the importation of uncertified vehicles or that cause recordkeeping violations.  Similarly, the California Health and Safety Code prohibits any vehicle or engine from being distributed or sold in California, unless such vehicle or engine is covered by a valid, ARB-issued executive order demonstrating that the vehicle or engine meets applicable California emission standards.

The certificate of conformity is the primary way EPA ensures that vehicles and engines meet emission standards.  This enforcement action is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the CAA’s requirements.

U.S. AND KENTUCKY REACH AGREEMENT WITH AK STEEL CORPORATION RESOLVING CLEAN AIR ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, August 21, 2013
United States and the Commonwealth of Kentucky Reach Agreement with AK Steel Corporation to Resolve Clean Air Act Violations

The United States and the Commonwealth of Kentucky have reached a settlement with the AK Steel Corporation (AK Steel) in Ashland, Ky., resolving alleged violations of the Clean Air Act, AK Steel’s title V permit, and the Kentucky State Implementation Plan, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA).

Under the terms of settlement, AK Steel will pay a civil penalty of $1.65 million, of which $25,000 will be paid to the Commonwealth of Kentucky, for the alleged violations that occurred at AK Steel’s former coke production facility in Ashland.  AK Steel shut down the coke plant on June 21, 2011.  Coke is used as a carbon source and as a fuel to heat and melt iron ore at steel making facilities.

Although AK Steel closed the plant involved in this enforcement action, AK Steel is currently operating the Ashland West Works facility a few miles away from the former coke plant.  Under the agreement, AK Steel has agreed to spend at least $2 million on state projects to reduce particulate matter emissions at the Ashland West Works facility.

“This settlement holds AK Steel accountable for years of violations at its now closed coke plant in Ashland,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “As a result of this agreement, state projects to reduce particulate matter emissions at the Ashland West Works facility will continue to improve air quality for area residents for many years to come.”

“This settlement promotes a healthier environment for our citizens and represents a just resolution of this matter,” said U.S. Attorney for the Eastern District of Kentucky Kerry B. Harvey. “We are committed to the effective enforcement of the environmental laws designed to protect the health of our people”

“We are proud to join with our partners in the Commonwealth of Kentucky in this step toward cleaner air and better health for the citizens of Ashland,” said Stan Meiburg, EPA Acting Regional Administrator in Atlanta.

The consent decree was lodged in the U.S. District Court for the Eastern District of Kentucky. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment.

KING PHARMACEUTICALS LC RESOLVES ALLEGATIONS OF CLEAN AIR ACT VIOLATIONS

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, June 28, 2013

United States and Tennessee Reach Agreement with King Pharmaceuticals LLC to Resolve Allegations of Clean Air Act Violations

King Pharmaceuticals LLC (King) will pay $2.2 million and take measures to comply with the Clean Air Act to resolve alleged violations of the Clean Air Act (CAA) at its pharmaceutical manufacturing facility located in Bristol, Tenn., announced the Department of Justice, the U.S. Environmental Protection Agency (EPA), and the Tennessee Department of Environment and Conservation (TDEC).


From the $2.2 million civil penalty, $1.1 million will be paid to the United States and $1.1 million will be paid to TDEC. From TDEC’s $1.1 million penalty, $650,000 will be applied to a TDEC state project for homeowners. The settlement also requires the facility to demonstrate compliance with CAA National Emission Standards for Pharmaceuticals Production (PharmaMACT regulations) and to apply for a Title V permit. The PharmaMACT regulations impose "Maximum Achievable Control Technology" (MACT) standards, which are industry-specific measures that must be implemented to control hazardous air pollutants in order to prevent harm to human health or the environment.


The TDEC state project calls for implementation of a program dedicated to providing financial assistance to low-to-moderate income homeowners in making improvements to residential housing focused on weatherization, insulation and energy efficiency. This project will focus on the reduction of energy usage and decreasing emissions associated with the generation of electricity or use of fossil fuels in home heating. TDEC plans to use existing local programs in the Bristol area to identify and channel assistance to eligible homeowners.

"This settlement will protect public health and the environment by requiring additional hazardous air pollution controls at the pharmaceutical facility in Bristol," said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This significant civil penalty should send a strong signal to the pharmaceutical industry regarding our commitment to enforce PharmaMACT."

"Upholding the public health benefits of the Clean Air Act is a critical responsibility of EPA," said Beverly H. Banister, Acting Deputy Regional Administrator of EPA’s Southeastern office. "This settlement will result in better management practices that will ultimately lead to greater protection of public health and the environment for the citizens of Bristol."

"The Tennessee Department of Environment and Conservation is pleased the proposed settlement could be reached in this litigation to address air emissions and permitting requirements, and that the facility will move forward to meet those requirements," said TDEC Commissioner Bob Martineau. "Additionally, the state project included in the settlement will promote emission reductions by reducing the energy needs of low-income residents in the area."

King began pharmaceutical manufacturing operations at the Bristol facility in 1993. King was acquired by Pfizer Inc. in 2011, becoming a wholly owned subsidiary of Pfizer. On May 29, 2013, UPM Pharmaceuticals announced that it will acquire the Bristol facility. The sale of the facility will not affect the injunctive relief required by the settlement. The alleged violations were discovered during a May 2006 inspection and subsequent investigation by EPA and TDEC. The United States and the state of Tennessee jointly brought the complaint.

The Department of Justice filed the complaint and lodged the consent decree contemporaneously on behalf of EPA in the U.S. District Court for the Eastern District of Tennessee today. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as a final judgment.

EPA SETTLES WITH ASH GROVE CEMEMNT CORPORATION OVER AIR EMISSIONS

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY

Settlement with Ash Grove Cement Corporation to Reduce Thousands of Tons of Air Emissions

WASHINGTON – Ash Grove Cement Company has agreed to pay a $2.5 million penalty and invest approximately $30 million in pollution control technology at its nine Portland cement manufacturing plants to resolve alleged violations of the Clean Air Act, announced the U.S. Environmental Protection Agency (EPA) and the Department of Justice.

Today’s agreement will reduce more than 17,000 tons of harmful nitrogen oxides (NOx) and sulfur dioxide (SO2) pollution each year across plants located in Foreman, Ark.; Inkom, Idaho; Chanute, Kan.; Clancy, Mont.; Louisville, Neb.; Durkee, Ore.; Leamington, Utah; Seattle, Wash.; and Midlothian, Texas.

"Today’s settlement will reduce air pollution that can harm human health and contribute to acid rain, haze, and smog," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "The new stringent limits on emissions will lead to less pollution and better air quality for communities across the country."

"This significant settlement will achieve substantial reductions in air pollution from Ash Grove’s Portland cement manufacturing facilities and benefit the health of communities across the nation," said Acting Assistant Attorney General Robert G. Dreher. "The agreement reflects the Justice Department’s ongoing commitment to protecting public health and the environment and will bring Ash Grove’s entire system into full compliance with the nation’s Clean Air Act."

In addition, Ash Grove has agreed to spend $750,000 to mitigate the effects of past excess emissions from several of its facilities.

The settlement requires Ash Grove to meet stringent emission limits and install and continuously operate modern technology to reduce NOx, SO2, and particulate matter (PM). Ash Grove is required to reduce NOx emissions at nine kilns, some of which will have the lowest emission limits of any retrofit control system in the country. In addition, modern pollution controls must be installed on every kiln to reduce PM emissions, and on several kilns to reduce SO2 emissions.

In addition, at its Texas facility, Ash Grove will shut down two older, inefficient kilns, while a third will be replaced with a cleaner, newly reconstructed kiln.

Ash Grove will also spend $750,000 on a project to replace old diesel truck engines at its facilities in Kansas, Arkansas, and Texas, which are estimated to reduce smog-forming nitrogen oxides by approximately 27 tons per year.

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including portland cement manufacturing facilities. This is also the first settlement with a cement manufacturer that requires injunctive relief and emission limits for PM. SO2 and NOx, two key pollutants emitted from cement plants, can harm human health and are significant contributors to acid rain, smog, and haze. These pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death.

Eight states and one local agency have joined the United States in the settlement, including: Arkansas, Idaho, Kansas, Montana, Nebraska, Oregon, Utah, Washington, and the Puget Sound Clean Air Agency.

ENERGY COMPANY ORDERED TO FIX PROBLEMS RELATED TO CLEAN AIR ACT VIOLATIONS AND PAY PENALTY

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY

Tesoro to Pay $1.1 Million to Resolve Clean Air Act Violations

WASHINGTON – The U.S. Environmental Protection Agency (EPA) announced that Tesoro Corporation, Tesoro Refining & Marketing Company LLC, and Tesoro Alaska Company have agreed to pay a $1.1 million penalty to resolve claims that Tesoro failed to comply with requirements under the Clean Air Act (CAA) at four of its refining facilities that produce conventional gasoline.


In its complaint, EPA alleged that Tesoro failed to comply with recordkeeping, reporting, sampling, and testing requirements at its facilities in Salt Lake City, Utah; Mandan, N.D.; Anacortes, WA; and Kenai, AK.

"EPA’s fuels regulations are vital safeguards that protect our nation’s air quality," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "By taking action against violations of these regulations, EPA is not only protecting people’s health, but is also ensuring a level playing field for refiners that play by the rules."


The settlement requires that Tesoro implement an environmental compliance and auditing plan which is designed to prevent future violations and ensure compliance with EPA’s fuels regulations.

The EPA’s fuel regulations require that all fuel produced, imported and sold in the United States meet certain standards. Fuel that does not meet the applicable standards could lead to an increase in emissions of harmful pollutants, such as volatile organic compounds and cancer-causing air toxics.

The sampling, testing, recordkeeping, and reporting requirements of the fuels program provide the foundation for EPA’s compliance program. Refiners that violate these requirements undermine the integrity of the fuel regulations and hinder the Agency’s ability to ensure gasoline complies with fuel quality and performance standards, potentially leading to an increase in harmful air pollution.


The consent decree is subject to a 30-day public comment period and final court approval.

COMPANY RESOLVES ALLEGED CLEAN AIR ACT VIOLATIONS WITH EPA AND LDEQ.

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
United States Takes Action to Reduce Hazards from Phosphoric Acid Manufacturing at Louisiana Facility

WASHINGTON –The U.S. Environmental Protection Agency (EPA) and the Louisiana Department of Environmental Quality (LDEQ) announced that PCS Nitrogen has agreed to reduce air emissions from phosphoric acid production at its facility in Geismar, La.

"Reducing pollution from mining and mineral processing operations is one of EPA’s national enforcement initiatives because these facilities release more toxic chemicals than any other sector," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "This settlement will reduce millions of pounds of hazardous air pollutants, ensuring that the residents of Geismar Louisiana have cleaner air."

The settlement resolves PCS’s alleged Clean Air Act violations at its cooling tower operations, which use scrubbers to control air emissions from its phosphoric acid processing equipment. Under the settlement, PCS will prevent the release of 15 million pounds of hydrogen fluoride, a hazardous air pollutant annually and will pay a civil penalty of $198,825.30. PCS has already implemented the pollution controls sought in the settlement.

Mining and mineral processing facilities generate more toxic and hazardous waste than any other industrial sector, based on EPA’s Toxic Release Inventory. In a national enforcement effort, EPA has focused on the phosphoric acid industry because of the high risk of groundwater contamination from facility wastewaters to nearby areas, and the release of acidic wastewaters to local rivers and lakes that cause fish kills. Examples include a 65 million gallon release of acidic wastewaters from the Mosaic Riverview facility into Tampa Bay, which led to a massive local fish kill and a 2007 incident at the Agrifos phosphoric acid facility in Houston that released 50 million gallons of acidic wastewaters into the Houston Ship Channel. Since 2003, EPA has investigated a total of twenty phosphoric acid facilities in seven states.

The consent decree is subject to a 30 day public comment period.

SALVAGE COMPANY OWNERS AND OPERATORS PLEAD GUILTY TO CONSPIRACY RELATED TO HANDLING OF ASBESTOS

 FROM: U.S. DEPARTMENT OF JUSTICE

Thursday, April 18, 2013
Tennessee Salvage Company Owners and Operators Plead Guily to Conspiring to Violate the Clean Air Act

Three owners and operators of a Tennessee salvage and demolition company, A&E Salvage, Inc., pleaded guilty today in federal court in Greeneville, Tenn., for conspiring to violate the Clean Air Act.

Newell (a.k.a., "Nick") Smith, Armida Di Santi, and Milto Di Santi pleaded guilty before U.S. District Court Judge Greer for the Eastern District of Tennessee to one criminal felony count for conspiring to violate the Clean Air Act’s "work practice standards" salient to the proper wetting, stripping, bagging, and disposal of asbestos. According to the charges, Smith and the Di Santis, along with other co-conspirators, engaged in a multi-year scheme in which substantial amounts of regulated asbestos containing materials were improperly removed from components of the former Liberty Fibers Plant or were illegally left in place during demolition.


Smith and the Di Santis face up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to the victims.

Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease. The Environmental Protection Agency has determined that there is no safe level of exposure to asbestos.

This case was investigated by Special Agents of the Environmental Protection Agency. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Morris of the U.S. Attorney’s Office for the Eastern District of Tennessee and Trial Attorney Todd W. Gleason of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

CEMENT MAKER AGREES TO REDUCE HARMFUL AIR EMISSIONS AT COLORADO PLANT

FROM:  ENVIRONMENTAL PROTECTION AGENCY

Cement Manufacturer Agrees to Reduce Harmful Air Emissions at Colorado Plant
WASHINGTON— The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) announced today that CEMEX, Inc., the owner and operator of a Portland cement manufacturing facility in Lyons, Colo., has agreed to operate advanced pollution controls on its kiln and pay a $1 million civil penalty to resolve alleged violations of the Clean Air Act (CAA).

"Today’s settlement will reduce harmful emissions of nitrogen oxides, which can have serious impacts on respiratory health for communities along Colorado’s Front Range," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Cutting these emissions will also help improve environmental quality and visibility in places like Rocky Mountain National Park."

"This agreement will mean cleaner air for Colorado residents downwind of the CEMEX facility and will contribute to improved air quality in the Rocky Mountain National Park, which is one of our nation’s most cherished public spaces," said Ignacia S. Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division. "The settlement is part of the Justice Department’s continuing efforts, along with the EPA, to bring significant sources of air pollution within the cement manufacturing sector into compliance with the Clean Air Act."

The Department of Justice , on behalf of EPA, filed a complaint against CEMEX alleging that between 1997—2000, the company unlawfully made modifications at its Lyons plant that resulted in significant net increases of nitrogen oxide and particulate matter (PM) emissions. The complaint further alleges that these increased emissions violated the CAA’s Prevention of Significant Deterioration and Non-Attainment New Source Review requirements, which state that companies must obtain the necessary permits prior to making modifications at a facility and install and operate required pollution control equipment if modifications will result in increases of certain pollutants.

As part of the settlement, CEMEX will install "Selective Non-Catalytic Reduction" (SNCR) technology at their Lyons facility, which is an advanced pollution control technology designed to reduce nitrogen oxide emissions. This will reduce their nitrogen oxide emissions by approximately 870 to 1,200 tons of nitrigen oxide per year. The initial capital cost for installing SNCR is approximately $600,000 and the cost of injecting ammonia into the stack emissions stream, a necessary part of the process, is anticipated to be about $1.5 million per year.

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including Portland cement manufacturing facilities.

Nitrogen Oxide emissions may cause severe respiratory problems and contribute to childhood asthma. These emissions also contribute to acid rain, smog, and haze which impair visibility in national parks. CEMEX’s facility is located within 20 miles of Rocky Mountain National Park, and its emissions may contribute to visibility impairment and to the nitrogen pollution problem that is affecting the park’s vegetation, water quality, and trout populations. Air pollution from Portland cement manufacturing facilities can also travel significant distances downwind, crossing state lines and creating region-wide health problems.

The proposed consent decree will be lodged with the Federal District Court for the District of Colorado, and will be subject to a 30-day public comment period.

CHEMICAL COMPANY TO PAY $3 MILLION PENALTY FOR ALLEGED CLEAN AIR ACT VIOLATIONS

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, March 27, 2013
Honeywell Resins and Chemicals to Pay $3 Million Penalty, Upgrade Air Pollution Controls at Hopewell, Virginia, Plant

Honeywell Resins and Chemicals LLC has agreed to pay a $3 million civil penalty for alleged Clean Air Act violations at its Hopewell, Va., plant, and improve the facility’s air pollution control equipment and processes, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.

The proposed consent decree resolves violations of federal and state air pollution regulations at the Hopewell plant, the world’s largest single-site producer of caprolactam used in the production of nylon, and ammonium sulfate used for fertilizer. According to EPA and the Virginia Department of Environmental Quality, the facility violated Clean Air Act limits on emissions of nitrogen oxide (NOx), benzene and other volatile organic compounds (VOCs) and particulate matter. The plant also allegedly failed to comply with requirements to upgrade air pollution control equipment, to detect and repair leaks of hazardous air pollutants, and to develop safeguards on benzene waste.

In addition to the $3 million civil penalty, Honeywell has agreed to reduce harmful air pollutants, install selective catalytic reduction at four production trains at the facility, conduct a third-party benzene waste operations audit, and implement an enhanced leak detection and repair program at the facility. Honeywell will also perform a mitigation project valued at approximately $1 million at the facility. The settlement reduces annual emissions of NOx by about 6,260 tons, and cuts annual emissions of benzene, other VOCs and hazardous air pollutants by 100 tons. The estimated cost for injunctive relief to address these emissions will be approximately $66 million dollars. The civil penalty will be split evenly between Virginia and the United States.

As part of the settlement, Honeywell did not admit liability for the violations, but has certified that it is now in compliance with applicable Clean Air Act regulations. The proposed consent decree is subject to a 30 day public comment period and final court approval.

H. KRAMER AND CO., RESOLVES VIOLATIONS OF CLEAN AIR ACT

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
U.S. EPA and State of Illinois announce settlement with H. Kramer; company will spend $3 million to reduce air pollution
Chicago (Jan. 31, 2013) - The U.S. Environmental Protection Agency and the State of Illinois have signed a consent decree with H. Kramer and Co., to resolve violations of the Clean Air Act and state air pollution violations at the firm’s copper smelting foundry in the Pilsen neighborhood on the southwest side of Chicago. Under the terms of the settlement, H. Kramer will spend $3 million on new state-of-the-art pollution controls for the foundry, pay a $35,000 penalty and provide $40,000 to retrofit diesel school buses operating in the neighborhood and surrounding areas with controls to reduce air emissions.

The settlement resolves the federal government’s allegations that H. Kramer failed to maintain and operate furnaces at the foundry in a manner which controls lead emissions and that the company violated the Illinois State Implementation Plan by causing or allowing releases of lead into the air. The settlement also resolves Illinois’ claims that H. Kramer’s activities at the foundry resulted in lead emissions that caused or contributed to air pollution and created danger to the public and the environment. The consent decree requires H. Kramer to install new filters and other controls on two furnaces to reduce emissions and to continue to limit production of two lead alloys until the new equipment is installed.

"This settlement will protect Pilsen residents from lead emissions from the H. Kramer foundry and prevent future violations of the Clean Air Act," said EPA Regional Administrator Susan Hedman. "Exposure to lead can impair the ability of children to learn."

"This settlement will help to dramatically reduce harmful pollution levels in the Pilsen neighborhood and to improve overall air quality in the surrounding community," Attorney General Lisa Madigan said.

On Nov. 22, 2011, EPA announced that air quality in part of Chicago’s Pilsen neighborhood exceeds the national air quality standard for lead. EPA’s determination was based on data collected from a state air quality monitor located on the roof of the Manuel Perez Jr. Elementary School. The H. Kramer facility is located in the area that violates the lead air quality standard -- which is bounded by Damen Avenue to the west, Roosevelt Road to the north, the Dan Ryan Expressway to the east and the Stevenson Expressway to the south.

The proposed settlement, lodged today in the U.S. District Court for the Northern District of Illinois, is subject to a 30-day comment period and final court approval.

NATION'S LARGEST GLASS CONTAINER MANUFACTURER AGREES TO INSTALL AIR POLLUTION CONTROL EQUIPMENT

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY

Glass Container Manufacturer Agrees to Install Pollution Controls and Pay $1.45 Million to Settle Clean Air Act Violations

Settlement to reduce emissions at facilities in Georgia, Oklahoma, Pennsylvania, and Texas

WASHINGTON – Today, the U.S. Environmental Protection Agency (EPA) and the Department of Justice announced that Ohio-based Owens-Brockway Glass Container Inc., the nation’s largest glass container manufacturer, has agreed to install pollution control equipment to reduce harmful emissions of nitrogen oxides (NOx), sulfur dioxide (SO2), and particulate matter (PM) by nearly 2,500 tons per year and pay a $1.45 million penalty to resolve alleged Clean Air Act violations at five of the company’s manufacturing plants.

"The pollution controls required by today’s settlement will significantly reduce emissions that can impact residents’ health and local environment in communities located near glass manufacturing plants," said Cynthia Giles, assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance. "These new pollution controls will improve air quality and protect communities from Georgia to Texas from emissions that can lead to respiratory illnesses, smog and acid rain."

"This agreement will significantly reduce the amount of air pollution, known to cause a variety of environmental and health problems, from the nation’s largest manufacturer of glass containers," said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. "The settlement, the latest in a series of agreements with the glass manufacturing sector, addresses major sources of pollution at facilities located in four states and will mean cleaner air for the people living in those communities."

The pollution controls required as part of the settlement to reduce NOx, SO2, and PM will cost an estimated cost of $37.5 million. Owens-Brockway will also spend an additional $200,000 to mitigate excess emissions at its plant in Atlanta by working with the Georgia Retrofit Program to retrofit diesel school buses and fleet vehicles with controls to reduce emissions, or it will assist with the purchase of new natural gas, propane, or hybrid vehicles.

Reducing air pollution from the largest sources of emissions, including glass manufacturing plants, is one of the EPA’s National Enforcement Initiatives for 2011-2013. This is the fourth settlement in EPA’s National Glass Manufacturing Plant Initiative.

NOx, SO2, and PM, three key pollutants emitted from glass plants, have numerous adverse effects on human health and the environment. NOx and SO2 contribute to ground-level ozone, or smog, acid rain, and the destruction of terrestrial and aquatic ecosystems. NOx and SO2 can also irritate the lungs and aggravate of pre-existing heart or lung conditions. PM contains microscopic particles that can travel deep into the lungs and cause difficulty breathing, coughing, decreased lung function, and even death.

The facilities covered by the settlement are located in Atlanta, Ga.; Clarion, Penn.; Crenshaw, Penn.; Muskogee, Okla.; and Waco, Texas.

The Oklahoma Department of Environmental Quality is also a signatory to this consent decree.

The proposed consent decree will be lodged with the United States District Court for the Northern District of Ohio, and will be subject to a 30-day public comment period.

VEHICLE AND ENGINE IMPORTERS PAY CIVIL PENALTY TO RESOLVE ALLEGED CLEAN AIR ACT VIOLATIONS

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY

Vehicle And Engine Importers To Pay Civil Penalty To Resolve Clean Air Act Violations
Senior company executives jointly liable for consent decree obligations

WASHINGTON – The U.S. Environmental Protection Agency (EPA) and the Department of Justice announced a settlement with two former importers of highway motorcycles, recreational vehicles, and small spark ignition engines. The defendants, Yuan Cheng International Group, Inc. (YCIG) and NST, Inc. (NST), located in Montclair, Calif., allegedly imported and sold vehicles and engines from China in violation of Clean Air Act requirements.

The settlement resolves allegations that, between 2006 and 2011, the companies imported and introduced into commerce 17,521 recreational vehicles, highway motorcycles, and nonroad spark ignition engines without proper EPA certifications required under the Clean Air Act to prevent excess emissions of pollutants. Vehicles and engines that are not certified may be operating without proper emissions controls and can emit excess carbon monoxide and nitrogen oxides and cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone, or smog. The settlement also resolves claims for failure to adequately respond to EPA’s requests for information and labeling violations under the Clean Air Act.

The settlement requires the companies and Mr. John Cheng and Ms. Jenny Yu, senior company executives, to pay a combined civil penalty of $50,000. This amount is based on the United States’ determination that the parties have a limited ability to pay a civil penalty in this matter. Both companies have ceased importing vehicles and engines and are now dissolved. In the fall of 2010, NST agreed to pay $250,000 to the State of California to resolve similar violations concerning the illegal sale of uncertified vehicles.

"When companies or their executives fail to comply with U.S. standards when importing vehicles and engines into the United States, it affects the nation’s air quality, impacts consumers and puts businesses that play by the rules at a disadvantage," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Today’s settlement demonstrates EPA’s commitment to ensuring that imports comply with requirements that protect our nation’s air quality, while leveling the playing field for businesses that comply with the law."

"We will continue to vigorously enforce the law to ensure that imported vehicles and engines comply with U.S. laws so that American consumers get environmentally sound products and violators do not gain an unfair economic advantage," said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. "By holding individuals personally accountable under the consent decree, this settlement shows not only that we will pursue companies who violate the law, but where appropriate, will take additional measures to ensure that individual executives who act on behalf of companies cannot repeat the same conduct under a new corporate identity."

In addition, Mr. Cheng and Ms. Yu must enter into a compliance plan with EPA prior to any future importation, distribution, selling, or offering for sale of any products covered by the Clean Air Act. They must also provide EPA with notice prior to forming any U.S. business entity that engages in the importation, distribution, selling or offering for sale of any products covered by the Clean Air Act, or before individually engaging in such activities. Mr. Cheng and Ms. Yu may be liable for any additional penalties for any violations of the settlement agreement, including $25,000 per vehicle or engine imported, sold or distributed that is not in accordance with an EPA-approved compliance plan, and up to $5,000 per day for each failure to provide notice to EPA as mentioned above.

John Cheng (also known as Yuan Cheng) was the sole shareholder, director, president, secretary, chief financial officer, and treasurer of the YCIG. NST was the corporate successor to YCIG after YCIG dissolved. Mr. Cheng’s wife, Ms. Jenny Yu, was the president, secretary, chief financial officer, one of two directors, and a 50 percent shareholder of NST. Mr. Cheng was the other 50 percent shareholder of NST. Both Mr. Cheng and Ms. Yu are individually bound by the terms of the settlement and are personally jointly and severally liable for the liabilities and obligations arising from the consent decree.

The Clean Air Act prohibits any vehicle or engine from being imported and sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity indicating that the vehicle or engine meets applicable federal emission standards. The certificate of conformity is the primary way EPA ensures that imported vehicles and engines meet emission standards. This settlement is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the Clean Air Act’s requirements.