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Shell to pay $10.75 million settlement for gas station violations

From our October 2005 Shell news archive

San Diego Union Tribune: Shell to pay $10.75 million settlement for gas station violations

“County and city officials announced Wednesday they had reached a $10.75 million settlement with Shell Oil Co. over environmental-health violations at its local gas stations dating back to 1999.”

Wednesday 12 October 2005

By Karen Kucher
UNION-TRIBUNE BREAKING NEWS TEAM

SAN DIEGO – County and city officials announced Wednesday they had reached a $10.75 million settlement with Shell Oil Co. over environmental-health violations at its local gas stations dating back to 1999.

“Today the environment in San Diego just got safer,” District Attorney Bonnie Dumanis said at a news conference downtown that also included City Attorney Michael Aguirre, the head of the county’s Environmental Health Department and other county and city lawyers.

It is the largest settlement ever in an environmental protection case in San Diego County.

The enforcement action came after more than 2,200 violations were found during routine county inspections at Shell and former Texaco stations in the county, officials said.

The problems discovered included leak-detection sensors that were tampered with, record-keeping problems and improper disposal of waste at some stations, officials said.

“Fortunately the violations didn’t include gas leaking into the underground water,” Dumanis said.

Shell has agreed to install new tamper-resistant underground sensors at its 62 Shell gas stations in the county, increase maintenance and improve employee training and create management systems to prevent future problems, according to the settlement. The company also agreed to install new sensors at 40 other stations in the state.

The company also will pay $4.75 million in costs, attorney’s fees and civil penalties, which will be divided among the District Attorney’s Office, County Counsel’s Office, county Department of Environmental Health and City Attorney’s Office.

The agreement technically is with Equilon Enterprises, an entity owned entirely by Shell. It was reached less than a week after the city and county filed a lawsuit against the company Oct. 6. The judgment was signed Wednesday by Superior Court Judge Richard E. L. Strauss.

In announcing the settlement, Dumanis warned that similar action against other gas stations in the region was possible.

“You cannot continue violating the environmental laws and endangering the health of people in San Diego without consequences,” Dumanis said. “We are going to hold those accountable who would wish to pollute our environment and we are going to hit them where it hurts the most – in the pocket.”

Aguirre said the case centered on leak-detection systems at gas stations that were supposed to ensure the integrity of underground storage tanks and make sure hazardous materials didn’t leach into the ground.

“It is a real clear danger to the groundwater supply here in San Diego,” Aguirre said.

Senior Deputy County Counsel Rodney Lorang said station owners and managers moved or tampered with sensors that were supposed to detect if water flowed underneath gas pumps or leaked into the secondary containment systems around underground storage tanks.

Lorang said new sensors will be installed that will automatically shut a station down if they are moved. “No gas will flow. That will force the operators to be more honest, that will force the owners to provide better systems,” he said.

Violations were found at stations that were owned and operated by Shell as well as independently owned franchisees. Shell was held responsible because it owns the tanks, Lorang said.

Gary Erbeck, director of the county’s Department of Environmental Health, said the company was “pretty non-responsive” to the violations found at its gas stations over the past six years.

“It took us a number of years to get their attention,” Erbeck said.

This is the second major enforcement county and city agencies have taken against a gasoline company in recent years.

BP West Coast Products, which owns or franchises 83 ARCO stations inthe county, agreed in September 2003 to a $4 million settlement that arose from an environmental protection case filed jointly by the county and city.

As part of that settlement, the company agreed it would install sensors in all of its underground tanks by January 2004. But in March 2005, it was ordered to pay $1.3 million because it had failed to update sensors on 21 of its tanks.

During Wednesday’s news conference, Aguirre asked one of his deputies for the city’s portion of the settlement. After putting the checks in his pocket, he joked that he would hurry them up the street to City Hall. The city is enmeshed in a fiscal crisis with a pension system deficit of at least $1.4 billion.

“Let me tell you, at the city of San Diego, we really appreciate any money we can get,” Aguirre quipped. “Believe me, we will be depositing this immediately into the pension fund to try to cover that shortfall.”

Karen Kucher: (619) 293-1350; [email protected]

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