Baton Rouge Cleanup May Be U.S.’s Problem

(CN) - Exxon Mobil says it inherited an environmentally unsound oil refinery in Louisiana from the United States, and the government should reimburse it for costs related to the "significant environmental contamination" its lax standards spawned.

In a federal complaint filed in Houston on Thursday, the oil giant says the government became liable for the Baton Rouge complex since it took control of the site during World War II. Though the government knew that the site was not equipped to adequately treat hazardous waste, it barred Exxon's predecessor, Standard Oil Co. of Louisiana, from updating equipment at its own expense.

As a result, the refinery and plastic production plant, which sits beside the Mississippi River, released hazardous waste for at least a decade, according to the complaint.

"The government specifically knew that the primary separator at the refinery was not able to adequately handle the increased waste loads generated by the wartime production plants, but denied Standard Oil the requisite approval to install much-needed improvements to the waste processing system that Standard Oil recommended and would have funded," according to Exxon Mobil's complaint.

Exxon says it already filed a 2009 lawsuit against the government for costs associated with the pollution. That contract action is still pending in the U.S. Court of Federal Claims, and the government has also ignored a "confidential written demand for payment" Exxon sent in January 2010.

In the 1940s, the U.S. government "unilaterally" transformed the complex into a wartime manufacturing facility for the government because the nation "had enacted a series of broad, empowering statutes and issued numerous executive orders and regulations that enabled the government to assume unprecedented control over industries and facilities, such as the Baton Rouge complex, that manufactured materials and products deemed strategic and critical to the national defense."

At the time, the United States had expanded and mobilized the government so that it possessed the necessary authority and power "to exercise direct and persuasive control over the operation of certain key oil refineries in order to require (under the threat of seizure) these refineries to expand and devote all refinery operations to the manufacture of critical, war-related materials for the government," Exxon says (parentheses in original).

This also let the country "control the production, pricing, distribution and use of scarce and essential war-related materials, equipment and supplies," according to the complaint.

During the 1940s and '50s, operations at the Baton Rouge production plants generated substantial hazardous waste.

"The Baton Rouge complex utilized to a large extent a facility-wide network of sewers, earthen separators and open drainage canals for the treatment and disposal of the waste that was generated," according to the lawsuit. "Most of the treated wastewater was ultimately discharged into nearby surface water bodies, such as the Mississippi River."

Treatment and disposal of this waste contaminated much of the soil, sediment, groundwater and surface water at the Baton Rouge site, Exxon says.

"The defendant knew that these wartime-related operations at the Baton Rouge complex involved the generation and disposal of wastes at the Baton Rouge site that resulted in significant environmental contamination," according to the 13-page complaint. "Moreover, shortly after WWII, the defendant admitted that its synthetic rubber plants at the Baton Rouge complex were designed with inadequate facilities for the handling and disposal of waste in order to save time and money during their construction."

Exxon says the U.S. government during WWII generally did not "approve or permit the use of manpower or the expenditure of funds to further investigate any waste disposal problems or to correct them through the implementation of appropriate waste processing improvements.

"For example, the government specifically knew that the primary separator at the refinery was not able to adequately handle the increased waste loads generated by the wartime production plants, but denied Standard Oil the requisite approval to install much-needed improvements to the waste processing system that Standard Oil recommended and would have funded," according to the complaint.

Exxon Mobil says it has undertaken a series of ongoing response actions to investigate and remediate this contamination under the oversight and approval of, and in accordance with, a corrective action order issued by the Louisiana Department of Environmental Quality.

But the United States should be deemed owner at the time of the disposal of hazardous substances, and should have to pay accordingly, under the Comprehensive Environmental Response Compensation Liability Act, Exxon claims.Exxon seeks costs and declaratory judgment. It is represented by J. Gregory Copeland of Baker Botts.

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