Houston-based CITGO Petroleum Corp. has agreed to pay nearly $20 million to resolve federal and state claims for natural resource damages under the Oil Pollution Act and the Louisiana Oil Spill Prevention and Response Act, according to a published story by 1012 Industry Report. The damage occurred during a 2006 spill of more than 2 million gallons of waste oil and millions of gallons of wastewater into the Calcasieu River. When combined with earlier settlements, CITGO will have paid nearly $115 million in fines over the damage caused by the spill.
This portion of the settlement is earmarked for Calcasieu Parish to restore parts of the 150-mile stretch of the estuary damaged by the spill, said Louisiana Oil Spill Coordinator Sam Jones. Louisiana’s Coastal Protection and Restoration Authority will be the lead agency in determining how the money will be used. Any remaining funds will be used to reimburse federal and state agencies for unpaid damage assessment costs.
A draft damage assessment and restoration plan, required by the federal Oil Pollution Act, is being developed by state and federal trustees representing the oil spill coordinator’s office, CPRA, the Louisiana Departments of Environmental Quality, Natural Resources, and Wildlife & Fisheries, and the National Oceanic and Atmospheric Administration and U.S. Fish & Wildlife Service. No date has been set for its completion.
At least 54,000 barrels (2,268,000 gallons) of slop oil and a significant amount oily wastewater flowed into the river during the incident. The wastes were held in two ten million gallon storage tanks that were supposed to be used to store water from storm surges but CITGO improperly used the tanks to accumulate oil, sludge and oily wastewater for years. The wastes leaked out of the two tanks on June 18 and June 19, 2006, during a four-day rainfall event. The National Weather Service reported that more than eight inches of precipitation fell between June 17 and June 20 at the Port of Lake Charles, but some locations in the parish recorded that amount exclusively on June 19.
A containment berm around the storage tank area failed in multiple places and oil flowed into the Indian Marais waterway and then into the Calcasieu River. During the next few weeks, NOAA and state officials recorded the effects of the spill along the estuary’s shorelines and waterways including adjacent lakes. Officials identified 150 miles of contaminated shoreline, including marshes, beaches and residential and industrial areas.
The wastes were determined to have caused killed fish, birds and at least one dolphin.
Under the Oil Pollution Act, a company responsible for a spill must either restore damaged wildlife and fisheries or compensate the public for their loss.
The spill also disrupted navigation along the Calcasieu Ship Channel and the Gulf Intracoastal Waterway, forcing the closure of the channel for ten days. It also required the removal of oil from the sides of many ships and boats. Recreational uses of the river were disrupted as numerous boat launches were closed.
Based on federal and state environmental investigations that began in 1998, federal and state officials entered an agreement in 2018 for CITGO, Occidental Chemical Corp, OxyUSA Inc. and PPG Industries Inc. to jointly pay $11 million for improperly discharging hazardous wastes into the Calcasieu Basin for decades, with nearly $8 million dedicated to natural resource restoration.
In April, CITGO was one of nine Lake Charles-area chemical companies and oil refineries that agreed to pay a total of $5.5 million to compensate the U.S. EPA for its investigation and enforcement costs involving that hazardous waste case.
CITGO is in the midst of settlement negotiations with Louisiana’s Department of Environmental Quality over charges levied by the agency in December 2018 that it failed to properly report emissions of hazardous chemical releases more than 70 times dating back to early 2016. No total fine amount has been proposed by the state in that case.
CITGO also reported releases of several hazardous chemicals from its refinery during both Hurricanes Laura and Delta in 2020 but filed the report under a state provision that provides companies immunity for acts of God.
