By Danny Wicentowski
By Lindsay Toler
By RFT Staff
By Lindsay Toler
By Allison Babka
By Lindsay Toler
By Lindsay Toler
By Ray Downs
Last year, after renaming itself Premcor, the company slashed the 273-employee staff at its Clayton headquarters by one-third, moving many of its administrative offices to Old Greenwich, Connecticut. Premcor bills itself as an aggressive corporation that wants to buy more refineries. In February, the company used proceeds from stock sales to close a $445 million deal for a refinery in Memphis, Tennessee. In 2001, Premcor reported profits of $142.6 million on revenues of $6.4 billion.
Besides current refinery owners, the state has asked Apex and Shell to help investigate the mess beneath Hartford, and perhaps pay to clean it up, but none of the companies has committed to do anything but give information to the IEPA. Premcor and Shell don't see links between their operations and the problem, and Apex, which is still owned by Novelly and has estimated annual revenue in excess of $1 billion, says the 1987 bankruptcy shields the company from monetary liability, Morgan says.
The bankruptcy argument didn't work for Apex in Indiana, where the company settled out of court after a federal judge in 1996 ruled that it could be held liable for cleanup costs. Erzen, who handled the case on behalf of companies that faced more than $30 million in cleanup bills, says duties are different than debts in the eyes of the bankruptcy court. "To the extent that a government agency goes after them and doesn't say, 'Give us a million dollars,' but says, 'Clean it up,' that's something that doesn't get whacked in bankruptcy," Erzen says. "If they were ordered to do something now, they may have to do it."
In a 221-page prospectus published in January, Premcor devotes three sentences to the gasoline beneath Hartford, saying little more than the state is investigating but no one's been held responsible. Premcor acknowledges it might be held liable for pollution outside its properties that could force the company to spend more than the $49.6 million budget it's established for cleanup costs at Hartford and Blue Island, a refinery near Chicago that Premcor closed in 2001.
Premcor, under its current name and former name of Clark, was hit by environmental regulators during the 1990s, with the company paying more than $10 million in fines for violating state and federal environmental laws in Illinois.
In 1990, the state health department faulted Clark for failing to comply with a law that requires companies to disclose the amount of chemicals they release into the environment. The federal law took effect in 1987, when Clark reported releasing just 500 pounds of chemicals -- chlorine and methanol -- into the air. If the company's report was accurate, Clark was running the world's cleanest refinery, but nobody believed that.
"The accuracy of Clark Oil's reporting of environmental releases has ... been called into question," health investigators wrote in 1990. Three years later, the state attorney general's office filed charges against Clark before the state Pollution Control Board, claiming that the company had failed to accurately report emissions in 1988, when it claimed that 1,250 pounds of chemicals were released into the air. The case was settled, with Clark agreeing to pay a $40,000 fine and promising to report accurately in the future. By the time the case ended, Clark was admitting to chemical releases of more than 10,000 pounds. But the company still wasn't up to snuff.
In 1999, the federal Environmental Protection Agency accused Clark of 34 violations of the same reporting law, again at the Hartford plant. The EPA sought a $498,000 fine. When Clark countered with an $8,000 offer, regulators played hardball, eventually settling the case in November 2000, with Clark agreeing to spend $330,000 on pollution-control equipment and pay a $56,250 fine.
That wasn't the end of Clark's environmental sins. The company paid a $232,800 fine in 1996 after the IEPA cited the Hartford refinery for thirteen spills of gasoline, oils, asphalt and sulfuric acid totaling an estimated 400,000 gallons. In 2001, the company paid a $2 million fine to settle a case in which the company was accused of failing to obtain proper permits and install required air-scrubbers when it upgraded the Hartford plant in 1994. In addition to the fine, the company agreed to spend as much as $20 million to install the scrubbers by July of this year, but much of that money was never spent because the plant closed.
Last year, Premcor paid a $6.25 million fine to settle a civil case against its Blue Island refinery, where state and federal regulators accused the company of illegally dumping pollution into a tributary of the Mississippi River and failing to accurately report emissions. Two company officials were convicted on criminal charges for violating environmental laws. The company also pleaded guilty to criminal charges and was punished with a $2 million fine.
The state last year issued two notices of violation to Premcor for pollution at the Hartford refinery that remain pending. Mike Roubitchek, an IEPA lawyer, says the agency is preparing two more.
Thomas Davis, an attorney with the Illinois attorney general's office, has one word to describe Premcor's record of complying with environmental laws. "Deplorable," says Davis, who oversees enforcement of environmental statutes.
"Generally, if you look at the big picture, good businesses stay in business," Davis says. "And Premcor had to shut its Blue Island facility and is no longer operating in Hartford. So that tells a story right there."