(CN) - Hovensa, an oil giant, will spend $700 million on new pollution controls, along with a $5 million penalty, to resolve allegations that it violated the Clean Air Act at a refinery in the Virgin Islands.
Hovensa, which is one of the 10 largest oil refiners in the world, consented to implementing pollution controls that the federal government claims will reduce annual emissions of nitrogen oxide by 5,000 tons, and sulfur dioxide by 3,500 tons.
The two pollutants contribute to smog and haze, and can harm the health of living things.
Hovensa will also spend $700 million to upgrade pollution controls at the St. Croix refinery. The Virgin Islands government will receive a portion of the $5.375 million fine, and Hovensa also agreed to set aside $4.875 for environmental projects on the islands.
Hovensa was accused of making refinery equipment changes without getting permits and pollution controls.
The federal government touts the settlement as another in a series under an Environmental Protection Agency initiative to crack down on polluters. According to the Department of Justice, this agreement puts the U.S. environmental coverage of refiners at more than 90 percent. Oil refining companies have agreed to invest $6 billion to date on pollution controls since 2000, the department adds.
The Hovensa refinery is a joint venture between the Hess Corporation and Petroleos de Venezuela.