Average Costs of Air Toxics Cases Increasing: EPA Data

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By Renee Schoof and Llewellyn Hinkes-Jones

July 6 — The average cost of settling hazardous air pollution cases with the Environmental Protection Agency has been going up.

Averaged over four-year periods, the value of supplemental environmental projects—the beneficial projects negotiated to reduce penalties—has increased steadily in hazardous air pollution civil cases in the past two decades, a review of EPA data shows. An average of federal penalties in these cases also goes up through 2012 when examined in four-year increments but then drops in the 2013-2016 period, which is incomplete. A third category—costs to attain compliance and restore the environment—also has trended upward in air toxics settlements.

The trend reflects the agency's priorities. The EPA Office of Enforcement and Compliance Assurance in 2004 made cutting air toxics—pollutants known or suspected to cause cancer, birth defects and environmental damage—one of the agency's national enforcement initiatives.

EPA Makes Air Toxics a Priority

The EPA told Bloomberg BNA in an e-mail that it “has made significant progress addressing sources of toxic air pollution through settlements that reduce pollution and safeguard public health” since 2004 when the enforcement initiative began.

“Air toxics cases are often complex and may take years to finalize after an initial inspection, so case statistics may vary from year to year. In the last five years alone, the agency has finalized more than 500 enforcement actions with facilities that emit toxic air pollution,” the agency said in the e-mail.

In fiscal year 2017, the EPA plans to expand its air toxics focus to target emissions from large product storage tanks and hazardous waste generator and treatment, storage and disposal facilities. The current focus has been on leaks, flares and other excess emissions from refineries, chemical plants and other industries. The EPA said the national enforcement initiatives are generally areas in which there are patterns of noncompliance and opportunities for improvements.

Bloomberg BNA examined data from air toxics cases by searching cases under relevant sections of the Clean Air Act on June 20 in the EPA's Enforcement and Compliance History Online ( ECHO) database.

Average Project Costs Higher

Adjusted for inflation, the average supplemental environmental project cost per settlement was $6,480 in 1997-2000 and rose in each four-year period to reach $451,690 for the incomplete 2013-2016 period.

At the same time, the total number of air toxics cases declined from 352 in 1997-2000; 307 in 2001-2004; 293 in 2005-2008; 236 in 2009-2012; and 139 so far in 2013 to 2016. EPA data officials, however, have said in sessions explaining how to use the ECHO database that it is not a system of record and therefore the numbers are not necessarily comprehensive.

Andrew Stewart, former acting director of the EPA's Special Litigation and Projects Division in the Office of Civil Enforcement, told Bloomberg BNA the decline in the number of cases reflects the EPA’s philosophy of not taking as many cases as possible but rather focusing on cases with a bigger environmental impact. That approach partly is a result of declining budgets and fewer full-time employees, he said.

Stewart, now counsel in Vinson & Elkins LLP’s environmental and natural resources group, said supplemental environmental project increases could reflect an effort by the EPA to promote awareness of these projects and to encourage larger ones, particularly in environmental justice areas.

Trend Up on Penalties, Complying Action Costs

The average penalty reached a high of $463,576 in 2009-2012 after increasing in each of the previous four-year periods since 1997. The average is $311,677 in the 2013-to-date period.

The average cost of complying actions on air toxics cases went up from $281,212 in 1997-2000; $5.15 million in 2001-2004; $8.2 million in 2005-2008; $10.2 million in 2009-2012; and $15.4 million so far in the 2013-2016 period.

The EPA says these amounts are the estimated or actual costs to attain compliance with the law or restore the environment. They do not include penalties or costs related to supplemental environmental projects.

Largest Penalties

Settlements with BP represented four of the top six largest federal penalties, equalling 42 percent of all penalties between 2009-2012.

The largest federal penalty was $25 million paid by BP Exploration Alaska in a 2011 settlement for an oil spill of more than 5,000 barrels from the company’s pipelines on the North Slope of Alaska in 2006. The Clean Air Act claims in that settlement related to air toxics were from the alleged improper removal of asbestos-containing materials from pipelines.

The next largest penalty, in a 2009 settlement with BP North America, was $12 million in a settlement of Clean Air Act violations at a Texas City, Texas, refinery that included benzene emissions. The company also agreed to spend more than $161 million on pollution controls and improved practices and $6 million on projects to reduce pollution in Texas City.

Previously, the largest federal penalty that included air toxics violations found in the database was from 2000, when Morton International Inc. agreed to pay a federal penalty of $10 million and an additional $10 million to Mississippi to resolve alleged violations of air, water and hazardous waste pollution laws at its chemical plant in Moss Point, Miss.

To contact the reporters on this story: Renee Schoof in Washington at rschoof@bna.com and Llewellyn Hinkes-Jones at ljones@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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