Federal Judge Rules Against CITGO in Louisiana Oil Spill

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A federal judge has shot down efforts by CITGO Petroleum to limit the fines and special conditions it could face in a federal Clean Water Act lawsuit over a June 2006 oil spill at the company’s Lake Charles, La., refinery.

The ruling by U.S. District Judge Richard Haik comes in a lawsuit filed against CITGO by the U.S. Environmental Protection Agency and the state Department of Environmental Quality seeking damages for a spill that leaked an estimated 53,000 barrels of oil into the Calcasieu River and other nearby waterways.

In the ruling, Haik also found that CITGO violated the Clean Water Act in the 2006 incident, but left open until trial the question of how much the company should pay in civil fines.

Federal and state authorities are seeking penalties that could range from $1,100 to $4,300 per barrel of spilled oil, plus reimbursement for cleanup costs and additional $1 million if the judge finds the spill was intentional or caused severe damage to the environment.

CITGO has already paid $13 million in fines after pleading guilty in 2008 to a criminal charge in the spill an amount the Justice Department has said was the largest ever imposed for a misdemeanor violation of the Clean Water Act.

In the civil case, CITGO has not disputed it violated the federal Clean Water Act with the spill.

But the company has argued that any civil penalty should be offset by the $13 million the company already paid in the criminal case.

Haik wrote that the $13 million CITGO has already paid will be taken into consideration when determining the civil penalty but the company is not entitled to an automatic credit for what was paid in the criminal case.

The Advocate sent an e-mail to Fernando J. Garay, public affairs manager for CITGO Petroleum Corp., seeking a comment. Garay sent back an e-mail that said the company’s policy is to not comment on matters under litigation.

The trial in the civil case is set for Sept. 1.

The June 2006 oil spill occurred during heavy rains in the Lake Charles area that caused two “slop oil” tanks to overflow into a containment area and then into nearby waterways.

Slop oil is a mixture of oil, water and other waste substances from the refining process.

Information from: The Advocate, http://www.2theadvocate.com