The US government filed a $4.2 million settlement with Philadelphia Energy Solutions Refining and Marketing LLC (PES) for Clean Air Act penalties related to the June 21, 2019, fire and explosion at its former South Philadelphia refinery.
The fire and explosion at the 335,000 b/d refining complex prompted a temporary shelter-in-place for area residents and injured five refinery workers (OGJ Online, June 21, 2019). PES and its subsidiaries filed for Chapter 11 federal bankruptcy protection a month later (OGJ Online, July 22, 2019).
The Environmental Protection Agency (EPA) said the settlement, filed in US Bankruptcy Court, represents the largest Clean Air Act 112(r) penalty it has ever imposed for a single incident. That section of the CAA requires infrastructure owners and operators to ensure that regulated and other “extremely hazardous substances” are managed safely, EPA said in a press release.
The agency alleges that PES violated the rule that compels plants to identify and assess the hazards posed by regulated substances, develop an accident-prevention program to reduce the risk of accidental releases, and create an emergency-response program.
“The company violated these requirements by, among other things, failing to ensure that its refining operations, particularly the hydrofluoric acid unit, were designed, built and operated in accordance with recognized and generally accepted good engineering practices,” EPA notes. The settlement marks EPA’s final settlement with PES, the agency said.
The proposed settlement, in which PES did not admit liability, will have a 30-day public notice and comment period and require final court approval. If approved by the court, the penalty will be paid under a court-approved bankruptcy reorganization plan.
The former refinery no longer stands or operates at the South Philadelphia location. The current owners intend to use the property as a warehouse distribution center.
EPA has three previous settlements with PES from 2020, one regarding CAA’s Renewable Fuels Standards, one for compliance issues related to a prior CAA consent decree, and the other for recovery of EPA costs related to the refinery’s explosion and fire.
