Emissions Settlement to Cost ExxonMobil $300M in Plant Upgrades

WASHINGTON (CN) – ExxonMobil reached a $2.5 million settlement on carbon emissions Tuesday that will cost it $300 million in compliance measures for facilities in Texas and Louisiana.

Regulators paired their announcement of the Exxon settlement in Houston with news of a separate emissions settlement in Denver with PDC Energy.

PDC has not returned a request for comment about its $2.5 million consent agreement, but Exxon touted its cooperation with the Environmental Protection Agency on industrial flares at its petrochemical facilities.

The flares are used to combust waste gases that otherwise get released into the air. They turn nearly all harmful emissions into water and carbon dioxide when operating efficiently, but lax controls often lead to excess emissions of volatile organic compounds – a key component of smog.

By settling, ExxonMobil is required to minimize the amount of waste gases sent to its 26 flares, and to improve their efficiency. The company will also be required to monitor air quality and detect benzene, a cancer-causing volatile liquid hydrocarbon found in coal tar and petroleum, at four of its eight plants.

Installation of air-pollution control and monitoring technology to reduce pollution from Exxon’s petrochemical facilities in Texas and Louisiana will cost $300 million, according to the settlement.

“These investments, which include flare monitoring equipment and flare gas recovery systems, will help improve flare efficiency at these chemical facilities, which are among the largest petrochemical complexes in the world,” Exxon said in a statement. “ExxonMobil complies with environmental laws, regulations and permits.”

Exxon is based in Irving, Texas, but the five Lone Star State facilities with flares are near Baytown, Beaumont and Mont Belvieu. The three Louisiana facilities meanwhile are in Baton Rouge.

Regulators say Exxon’s updates will reduce volatile organic compound emissions by about 7,000 tons per year, and will reduce other toxic air pollutants, including benzene, by about 1,500 tons per year.

Patrick Traylor with the EPA’s Office of Enforcement and Compliance Assurance, told reporters during a press call that the settlements reflect the Trump administration’s commitment to the rule of law.

“We will be enforcing environmental laws in this administration,” Traylor said. “And that’s not just my message, that’s the message straight from the top of the organization.

“This administration is absolutely committed to the enforcement of the law with prudence and with excellence,” he added.

As part of the settlement, the Louisiana Department of Environmental Quality will receive $470,000 of Exxon’s seven-figure penalty. ExxonMobil agreed to spend $1 million on planting trees in Baytown to create a “natural buffer” with communities near the plants. It also agreed to perform two “beneficial environmental projects” in Louisiana, including buying a $1.5 million mobile air quality monitory vehicle for the state’s use.

PDC Energy’s settlement resolves charges over its emissions of volatile organic compound emissions in tanks that store hydrocarbon liquids resulting from the company’s oil and gas activities in the Denver area.

State inspectors first noticed the emissions in September 2013, according to the settlement.

Compliance will be far less expensive for PDC Energy than for Exxon, according to the settlement, which puts the cost upgrading PDC’s vapor-control system at $18 million. PDC will also spend another $1.7 million on environmental mitigation projects.

The Justice Department says such upgrades will reduce emissions by about 1,600 tons per year. The work, which has already begun, must be completed by June 30, 2019.

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