Oil Company Stuck With Cleanup, Court Rules

     (CN) – An oil company that claims it no longer has the capabilities to clean up a former refinery site in Illinois will have to hire someone clean up the millions of gallons of oil contaminating groundwater and emitting hazardous fumes, the 7th Circuit ruled.




     A lower court had granted the Environmental Protection Agency’s request to force Apex Oil Company to clean up the mess in Hartford, Ill. The federal judge found Apex responsible, because an oil refinery owned by the company’s predecessor had created the toxic hydrocarbon plume.
     The Chicago-based appeals court ruled that the EPA’s claim for an injunction was not discharged when Apex filed for bankruptcy.
     Apex said it no longer works in refining and can’t execute the cleanup, so it would be forced to hire an outside company at a cost of $150 million. Had it known during bankruptcy that it would be slapped with a cleanup fee, Apex said, it would have liquidated, not made the decision to reorganize. It claimed that the cost of complying with the injunction should be deemed a dischargeable money claim, but the appellate panel said the law prevented it.
     Because the EPA is neither seeking nor entitled to payment, the cleanup claim cannot be discharged, the court ruled. The government can’t demand cleanup costs in lieu of an actual cleanup under the Resource Conservation and Recovery Act, the ruling states.
      “If adopted by the courts, Apex’s position would discourage polluters from developing an internal capability of cleaning up their pollution,” Judge Posner wrote.
     Apex estimated that the cleanup could take up to 15 years.

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