Citgo Petroleum Corp. has agreed to a $160,000 fine in a proposed settlement with state regulators to end more than 200 alleged violations from air emissions and other issues at its Lake Charles-area oil refinery between 2017 to 2020.
The alleged violations at the 2,000-acre complex along the Calcasieu River include an accidental but preventable leak of 662 pounds of the human carcinogenic benzene in August 2018 and a September 2018 crude oil leak triggered by corrosion in a storage tank's floating roof, state settlement and compliance documents say.
Though contained in a diked-off area around the tank, the oil spill emitted hundreds of thousands of pounds of toxic volatile organic compounds evaporating from the exposed oil, compliance documents say.
The proposed fine from the Louisiana Department of Environmental Quality is only the latest from state and federal regulators over air and water quality failures in recent years that have already cost millions of dollars in fines for the economically important complex south of Interstate 10 in Sulphur and Westlake.
Under a U.S. Department of Justice settlement in 2021, the company agreed to pay $19.7 million for a 2006 spill of millions of gallons of waste oil and industrial wastewater into the Calcasieu River and its broader estuary during a heavy, four-day rain event.
The latest settlement was made public in late January, remains in a required 45-day public comment period and still needs approval from the Louisiana Attorney General's Office.
If the deal is approved, under the standard terms of such agreements, Citgo would admit to none of the exceedances and other potential violations that it self-reported to DEQ, but they could be considered in future permitting and enforcement actions.
Citgo Flagship Refinery
With more than 1,000 direct workers, the 463,000-barrel-per-day oil refinery is a top 10 employer and property taxpayer in Calcasieu Parish. Making gasoline, jet fuel, butane and many other products, the refinery is the nation's seventh-largest. It is tied into a vast pipeline network and has access to the Gulf of Mexico, which President Trump recently unilaterally renamed the Gulf of America through an executive order.
The refinery is the flagship for Citgo, an arm of the Venezuelan state oil company worth billions of dollars that is poised this year to be sold in a debt auction overseen by a federal judge in Delaware, according to RBN Energy LLC.
DEQ officials did not return a request for comment on Friday. In the settlement document, they say the deal was reached to avoid the cost of litigation and was determined based on the agency's standard rubric for fines. Citgo officials declined comment.
Some environmentalists who track southwest Louisiana industries argued the fine amounts to a "slap on the wrist" for blatant and numerous violations by a big company that receives state property tax and other breaks.
"The evidence is clear that they knowingly violated the law, failed to follow up, and is indicative of a culture that does not place the community, the environment, or even their own workers as a priority, and instead places profits above all," said James Hiatt, a former Citgo employee turned climate activist. "And the regulators allow it."
In the DEQ settlement, dozens of the alleged breakdowns involved operational failures that allegedly violated the terms of the Citgo refinery's air permits or other internal guidelines, or missed deadlines to make repairs to avoid leaks, the 2021 compliance document says. Sometimes heavy rain or power losses not tied to Citgo caused the breakdowns. In other cases, employees didn't do standard emissions monitoring, it says.
The alleged operational breakdowns sometimes undermined the effectiveness of scrubbers and protective flares or otherwise allowed elevated levels of toxic and other air pollutants to escape, DEQ papers allege.
Other emissions contribute to harmful ground-level ozone or create tiny particulates that can cause respiratory problems and asthma with long-term exposure, compliance papers allege.
Among the emissions are nitrogen oxide, sulfur dioxide, carbon monoxide, hydrogen sulfide, hydrochloric acid, benzene and a class of chemicals known as volatile organic compounds that can be tied to hydrocarbons and, in some instances, are carcinogenic.
Public Concern
Often, the failures at Citgo went unnoticed by the broader public but occasionally drew attention.
On Sunday, July 23, 2017, residents reported a foul stench from the refinery due to a release that included hydrogen sulfide, sulfur dioxide, carbon disulfide and carbonyl sulfide.
Of those four chemicals, all but sulfur dioxide has a strong rotten egg smell. Sulfur dioxide has a more pungent smell, like a burnt match, according to the U.S. Environmental Protection Agency.
Citgo officials blamed the incident on the loss of its high-pressure boilers, which immediately triggered protective flaring that released many of the air pollutants.
Company officials told DEQ the emissions were lighter than air and dissipated in the atmosphere. No evacuations, injuries or offsite impacts were reported at the time, Citgo officials reported.
In other cases, Citgo failed to report alleged failures in a timely fashion. For two weeks, the refinery did not disclose the Aug. 22, 2018, benzene leak, which happened during the transfer of the chemical to a barge, regulators allege.
State and federal law requires initial reporting of that large of a benzene leak within 24 hours and for follow-up reports in the days and weeks afterward. Federal regulators closely watch benzene emissions from refineries.
In the big crude oil leak, Citgo crews began emptying Tank 41 on Sept. 27, 2018, after they spotted its floating roof listing to one side.
On the morning of Sept. 28, 2018, however, the floating roof sank inside the tank. About four hours later, a leak from the bottom of the tank was found, DEQ officials said in compliance documents.
The entire episode went on for 23 hours and an estimated 1,337 barrels of crude oil leaked out, which would roughly fill a little more than three 15-by-30-foot backyard swimming pools about 5 feet deep.
About 407,520 pounds of VOCs also evaporated from the failed tank roof and from leaked oil sitting in the diked-off area around the tank.
Included in those emissions were an estimated 2,600 pounds of benzene and nearly 2,120 pounds of ethylbenzene, which causes eye and throat irritation in short-term exposures and is a suspected carcinogen with long-term exposure.
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