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Houston Chronicle: BP, Shell to pay in pollution case: Settlements allege gasoline fell short of air rules

Oct. 6, 2006, 12:13AM
Copyright 2006 Houston Chronicle

The Environmental Protection Agency said Thursday that BP and Royal Dutch Shell will pay $1.5 million in fines to settle allegations that they sold gasoline that failed to meet federal clean air standards.

The agency said the settlements were reached Sept. 27 and resolve alleged violations that occurred between 1999 and 2004 at gas stations, fuel-handling terminals and refineries.

Under the voluntary settlements, BP will pay a civil penalty of $900,000 and two Shell affiliates will pay $600,000 in fines. The Shell allegations were aimed at Motiva Enterprises, a joint venture between Shell and Saudi Refining, and Equilon Enterprises, a Shell subsidiary based in Houston.

“These settlements underscore both the importance of EPA standards to protect the public health, and the value of rigorous environmental enforcement efforts to address violations at multiple facilities,” Granta Nakayama, the EPA’s assistant administrator of enforcement and compliance assurance, said in a prepared statement.

Neither BP nor Shell admitted or denied wrongdoing, but agreed to take steps to address the allegations.

Though celebrated by the EPA, the settlements amount to little more than a slap on the wrist to the two oil giants, which have posted massive profits amid a surge in global demand for oil, said Fadel Gheit, an industry analyst with Oppenheimer & Co. in New York.

“It’s like somebody spat on the sidewalk and the police wrote them a $5 ticket,” he said.

Even so, gasoline that fails to follow standards set in the 1990 Clean Air Act can lead to increased vehicle emissions and pose health risks, the EPA said.

In the Shell settlement, the agency said it found violations at more than 20 gas stations, including two in Dallas and one in Angleton. It also found issues at Motiva’s former Delaware City, Del., refinery and an Equilon fuel terminal in St. Louis.

At BP, the agency had issues with more than 10 gas stations in Wisconsin, Illinois, Missouri and Kentucky and a refinery in Yorktown, Va.

Some of the alleged violations related to the companies’ failure to follow standards for storing gasoline in the summer, when heat can make fuel evaporate more quickly and contribute to air quality problems, according to the EPA.

The companies reported some of the incidents themselves, while others were discovered upon EPA inspection.

BP and Shell spokesmen said the companies have put measures in place to prevent further problems.

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