NEPA exemptions: The dirty dozen list

Introduction

Explore our list of polluting companies who have benefited from multimillion-dollar stimulus grants and broad exemptions under the National Environmental Policy Act.

Alcoa, Inc.

• Stimulus grant: $13 million total for phases one and two
• Project: converting carbon dioxide from industrial flue gas into mineral “carbonates” to be used for such products as green fertilizer. The site of the demonstration project is at Alcoa’s aluminum plant in Point Comfort, Texas.
• NEPA exemption: Dated June 2010, for “R&D pilot facility construction” to “define the most efficient process conditions for converting CO2.”
• Past violations:
  • Aug. 2006 — Federal officials fined Alcoa $9.2 million in penalties for exceeding air pollution limits, from 2003 to 2005, at the aluminum company’s giant smelter in Rockdale, Tex., thus violating a 2003 consent decree that it had signed to resolve a previous air-pollution case.
  • Jan. 2004 — Federal environmental regulators fined Alcoa $180,021 for shipping hazardous waste to fertilizer manufacturing plants throughout North Carolina without properly identifying and managing the materials.
  • April 2003 — Alcoa agreed to pay $332 million to settle nearly 2,000 air violations at its Rockdale smelter.
• Company response: Alcoa confirms the NEPA exemption for the first phase of its stimulus project, and the still-pending application for another for phase two. “The categorical exclusion process was designed to allow stimulus projects that deliver environmental benefits to move forward more quickly,” said Alcoa’s Mike Belwood, explaining that Energy officials have encouraged the company take this route. Alcoa has submitted an “environmental information volume” with a plan to control the project’s impacts, among other things, which Energy officials are now reviewing. As for past violations, Belwood said, “Our overall record shows we operate safe and environmentally responsible facilities.” He notes that the Rockdale case has since been resolved; in July, offending units were shuttered. And most of the hazardous-waste violations occurred before Alcoa had bought its subsidiary, he says. “The practice no longer occurs today,” Belwood added.

Archer-Daniels-Midland Company

• Stimulus grant: $101 million total for phases one and two
• Project: capturing and sequestering carbon emissions at ADM’s existing ethanol plant in Decatur, Ill. ADM will construct and operate a “collection, compression, and dehydration facility” at its plant. Compressed carbon dioxide will be sequestered, beginning in 2012, in a nearby saline reservoir.
• NEPA exemption: Dated Nov. 2009, for “site characterization and environmental data collection,” among other planning analyses, at the ethanol plant.
• Past violations:
  • Sept. 2009 — An Illinois jury ruled that Archer Daniels Midland should pay the family of a worker $6.74 million after his death from injuries suffered when a malfunctioning machine had doused him with hot, caustic chemicals at the company’s ethanol plant, in Decatur.
  • April 2003 — ADM agreed to pay $340 million to settle air-pollution violations filed by federal environmental regulators at more than 50 of the company’s facilities in 16 states.
  • Jan. 2001 — ADM agreed to pay $3.1 million to settle air violations at its Decatur plant.
• Company response; ADM confirms the NEPA exemption for the first phase of its stimulus project, which “consisted of a study and did not involve any construction work,” according to spokesperson Roman Blahoski. A NEPA assessment of the project’s second phase is currently underway. ADM notes this project, along with a carbon-capture project it began in 2007, will ultimately sequester up to 3.6 million tons of carbon dioxide — or roughly the same emissions from 715,000 cars every year. As for the company’s environmental record, Blahoski said, “We are committed to operating in accordance with all applicable regulations and recognize the importance of taking steps to lessen our environmental impact.”

ConocoPhillips Company

• Stimulus grant: $3 million
• Project: capturing and sequestering carbon emissions from a petcoke “integrated gasification combined cycle” power plant. The demonstration site is beside the company’s oil refinery, in Sweeny, Texas.
• NEPA exemption: Dated Nov. 2009, for phase one “site characterization/environmental monitoring” for the “CO2 pipeline and storage” at the refinery.
• Past violations:
  • Feb. 2010 — Federal environmental regulators fined ConocoPhillips $175,000 for air violations at two of the company’s natural gas stations near Ignacio, Colo. Under the settlement, the company has agreed to install new pollution-control equipment as well.
  • April 2008 — ConocoPhillips agreed to pay a $1.2 million penalty to resolve water violations stemming from more than 2,000 unpermitted discharges at its oil refinery in Borger, Texas.
  • Nov. 2006 — Washington State officials fined ConocoPhillips $540,000 for a 1,000-gallon oil spill from a company tanker, which polluted 21 miles of the Puget Sound shoreline in 2004. The fine marked the largest ever issued by the state for a spill in marine waters.
  • Dec. 2005 — ConocoPhillips (and another company) agreed to cede 450 acres of land to New Jersey to compensate for groundwater pollution caused by several hundred gas stations and oil processing plants statewide.
  • Jan. 2005 — ConocoPhillips agreed to pay $540 million to resolve air violations at nine of its refineries in seven states, including its facility in Sweeny, Texas.
  • Aug. 2004 — Federal environmental regulators fined ConocoPhillips $485,000 for more than 470 water violations spanning five years at its drilling sites in Cook Inlet, Alaska.
  • April 2004 — ConocoPhillips agreed to pay $70 million to 7,000 Florida residents who sued the company over underground pollution from a closed fertilizer plant, thus settling two civil suits against it.
• Company response: ConocoPhillips declined to comment before deadline.

Denbury Onshore/Air Products and Chemicals/Valero Energy Corporation

• Stimulus grant: $254 million total for phases one and two
• Project: capturing and sequestering carbon emissions from existing steam-methane reformers owned by Air Products at an oil refinery. The site of the demonstration project, beginning in 2012, is Valero’s refinery in Port Arthur, Texas.
• NEPA exemption: Dated Nov. 2009, for developing “a fully definitive project basis … to proceed into Phase 2” at the refinery.
• Past violations:
  • Aug. 2010 — Air Products agreed to pay $1.5 million in penalties to resolve hazardous-waste violations at its chemical manufacturing facility in Pasadena, Texas.
  • Nov. 2008—Denbury Onshore paid a $12,500 penalty to resolve a state enforcement action over repeated violations of a clean-water law, including some small oil pipeline spills, spanning the previous five years.
  • April 2008—Federal worker-safety officials fined Valero Energy $101,750 for 16 worker-safety violations at its oil refinery in Port Arthur.

  • Aug. 2007 — Valero agreed to pay $236 million to resolve air violations at three of its oil refineries, including the one in Port Arthur.

• Company response: Air Products confirms the NEPA exemption for the first phase of its stimulus project, yet says the companies expect they will have to do some form of environmental analysis for phase two. Initial work has involved “no groundbreaking or environmental disturbance,” says Art Products’ Art George, which would require a NEPA review. He stresses that Air Products’ recent settlement came after federal regulators had objected to the company exchanging sulfuric acid with a neighboring facility; for 30 years, Air Products had viewed its sulfuric acid as a product, and exchanged it without incident. Outside of the settlement, the company has paid $29,455 in environmental fines for all 300 of its facilities over three years. “Our goal always remains zero fines and complete compliance,” George said.
• Company response: Robert Cornelius, Denbury’s director of operations, echoes the expectation of having to do an environmental analysis for phase two. If the pipeline is installed, he notes, Denbury will have to comply with a full NEPA review. Cornelius acknowledges the company’s past violations, attributing them to its practice of buying oil fields in disrepair. “The first thing we have to do is clean up,” he said, explaining the “relatively small penalties” reflect the spills’ limited impacts. He cites the $3.5 million Denbury has invested in new equipment to prevent future spills. “We do take environmental compliance very seriously,” he added, “and it is one of our core values.”
• Company response: Valero Energy deferred questions on the stimulus project to Air Products, yet noted that it has only owned the Port Arthur refinery since 2005. At the time, according to Valero’s Bill Day, the company voluntarily approached regulators to quickly resolve outstanding issues. “In general,” Day said, “the refinery operates under permits and we take safety and environmental stewardship very seriously.”

Detroit Edison Company

• Stimulus grant: $84 million
• Project: upgrading 55 circuits and installing such new equipment as 600,000 smart meters and other “smart grid” technologies on existing distribution lines.
• NEPA exemption: Dated July 2009, a programmatic “categorical exclusion” for such “smart grid” activities as “additions or modifications to electric power transmission facilities that would not affect the environment beyond the previously developed area,” and “actions to conserve energy.”
• Past violations:
  • Aug. 2010 — Federal environmental regulators have sued Detroit Edison alleging the company evaded permitting requirements under the clean-air law at its coal plant in Monroe, Mich., thus releasing illegal

    emissions of smog, haze, and soot for years; in September, both the Sierra Club and the Natural Resources Defense Council filed motions to intervene in the case.

  • July 2009 — Detroit Edison received a still-pending notice-of-violation action from federal environmental regulators alleging five of its Michigan coal plants have violated the clean-air law.

  • Dec. 2006 — Federal environmental regulators fined Detroit Edison a $144,412 penalty for failing to immediately report releasing more than 10,500 pounds of the hazardous chemical sodium hydroxide at its coal plant in River Rouge, Mich., into the neighborhood, which the company settled for $52,333 the following month. Sodium hydroxide can burn skin, eyes, and the gastrointestinal tract.
  • Jan. 2001 — Detroit Edison agreed to pay nearly $11.5 million, including remediation costs, to settle an air-pollution lawsuit filed by federal and state environmental regulators for evading permit requirements at a coal plant.
• Company response: Detroit Edison says its stimulus money will help deploy smart meters to its customers, yielding efficiencies and jobs. “We’re happy to be participating in the smart grid program,” said John Austerberry, of parent DTE Energy. He calls the company’s environmental record “strong,” noting that five of its coal plants have won the “clean corporate citizens” designation from the state. He attributes the chemical release to an employee error, ceding the incident “did not meet our expectations” for proper management or response. As for the federal lawsuit, he said, “We believe the EPA is over-reaching in pursuit of it.” The firm has invested $1 billion in scrubbers in the last decade, he says; the improvements, still underway, will make the Monroe plant the cleanest in Michigan. “We believe the work done was allowed,” Austerberry added, “and nothing was done to increase the emissions.”

Didion Milling, Inc.

• Stimulus grant: $5.6 million
• Project: changing the way the company produces ethanol at its existing plant through a “drying and moisture removal process” so it uses 25 percent less energy for every gallon of ethanol produced.
• NEPA exemption: Dated March 2010, for energy-saving activities by the ethanol producer, including “increasing dryer capacity, extracting corn oil, and increasing vacuum efficiency.”
• Past violations:
  • April 2010 — Didion Milling agreed to pay $1.05 million in penalties to settle 23 air and water claims, encompassing thousands of violation days, at its ethanol plant, in Cambria, Wis., including claims that it had built and operated its silos and grain dryer without telling the state. Before suing, Wisconsin officials had alerted the company to more than 200,000 original air violations over the past decade.
  • Nov. 2009 — A Wisconsin judge ruled that Didion had violated the federal Clean Water Act multiple times in 2008 and 2009, dumping unauthorized amounts of chlorine and other toxic chemicals into a tributary of a lake. The ruling came in one of three lawsuits filed by residents who live near the company’s plant, all of which were quashed by the state settlement.
• Company response: Didion Milling declined to answer questions about its environmental record, or the process leading to its grant and NEPA exemption. It touts the stimulus project’s job-creation and clean-energy benefits. “Since the day we started construction on our ethanol production facility,” said Dale Drachenberg, Didion’s vice president of operations, “we’ve made innovation and conservation top priorities.”

Duke Energy Corporation

• Stimulus grant: $21.8 million
• Stimulus grant #2: $204 million
• Project: building a battery-powered storage system enabling the company to distribute power during peak electrical demand at an existing Texas wind farm.
• Project #2: installing new equipment like smart meters and “intelligent devices” on existing distribution systems in Indiana, Ohio, Kentucky, North Carolina, and South Carolina, as well as high-speed sensors and other digital equipment on its transmission lines in the south.
• NEPA exemption: Dated March 2010, for “R&D or pilot facility construction,” consisting of a “concrete pad to place four (4) tractor-trailer-sized batteries.”
• NEPA exemption #2: Dated July 2009, a programmatic “categorical exclusion” for such “smart grid” activities as “additions or modifications to electric power transmission facilities that would not affect the environment beyond the previously developed area,” and “actions to conserve energy.”
• Past violations:
  • July 2010 — A North Carolina judge ruled against Duke Energy on largely technical issues in a pending decade-old federal lawsuit against the company. Regulators had sued Duke alleging it violated the clean-air law by refurbishing eight coal plants in North and South Carolina without obtaining permits, thus spewing illegal emissions of smog, soot, and haze for decades.
  • March 2010 — Duke agreed to pay $310,000 in penalties to settle air violations at a manufacturing plant in Narrows, Va.
  • Dec. 2009 — Duke agreed to pay $93 million to settle air violations at its coal plant in New Albany, Ind., after losing a May 2009 jury verdict in a similar federal air-pollution case.
  • May 2009 — An Indiana judge ordered Duke to shut down its coal plant in West Terre Haute, Ind., after the company had lost a second jury verdict. Federal regulators sued Duke (and a corporate predecessor) for evading permit requirements at six coal plants in Indiana and Ohio, thus releasing illegal emissions of smog, soot, and haze for decades; Last week, a federal appellate court reversed the jury verdict, ruling Duke’s predecessor had not been required to obtain permits under state regulations at the time.
• Company response: Duke Energy deferred questions on the grant and NEPA exemption to the Energy Department, yet stated, “It is appropriate that we would pursue grant money that can create jobs and lower costs for our customers.” Duke executives describe the firm’s environmental record as “quite good and getting better,” noting that its $5 billion investment in scrubbers for its coal plants has cut emissions by 70 percent in 10 years. As for the air-pollution cases, Duke’s Tom Williams said, “Duke is defending itself against baseless claims — and has done so in about 90 percent of the claims to date.”

E.I. DuPont DeNemours & Company/BioArchitecture Lab, Inc.

• Stimulus grant: $8.9 million
• Project: developing a “commercially viable” process to produce a clean-burning biofuel from “macroalgae,” or seaweed. The second phase of DuPont’s project entails a “5 to 10 hectare aquafarm” off the coast of Ellwood, California.
• NEPA exemption: Dated Jan. 2010, for “project one, phase one” consisting of “bench-scale research” and “conventional laboratory operations.”
• Past violations:
  • July 2010 — Federal worker-safety officials fined DuPont $43,000 for 11 violations following the January death of an employee from a phosgene leak at the company’s plant in Belle, W.Va.
  • March 2010 — West Virginia supreme court justices upheld most of a 2007 jury verdict in favor of 7,000 residents living near DuPont’s closed zinc smelter plant, in Spelter, W.Va., which federal and state officials had ordered the firm to clean up. The plant’s uncontained waste pile had exposed residents to arsenic, cadmium, and lead for years. The high court disallowed some punitive damages, leaving a judgment of $283 million.

  • Sept. 2009 — New Jersey environmental regulators initiated a still-pending action against DuPont, seeking $444,000 in penalties, for alleged air violations at its plant in Deepwater, N.J.; the plant is also subject of a pending class-action lawsuit filed by residents over alleged poisoning of drinking water by DuPont’s toxic chemical known as C8.

  • April 2009 — Federal environmental regulators sued DuPont for dumping mercury at a polymer fiber facility in Kingston, N.C.; in June, the company paid a $59,000 penalty for the water violations.
  • July 2007 — DuPont agreed to pay $70 million in various penalties to settle air violations at four of its sulfuric acid plants in four states.
  • Dec. 2005 — Federal environmental regulators fined DuPont a record-breaking $16.5 million in penalties for hiding environmental and health hazards of C8 for two decades.
  • Feb. 2005 — First of three class-action lawsuits filed by West Virginia, Ohio, and New Jersey residents, contending DuPont had polluted their drinking water with C8, ended in a $108 million settlement for cleanup of six water districts and an ongoing medical study of 80,000 people; two of the three suits have involved DuPont’s plant in Parkersburg, W.Va.
• Company response: DuPont declined to answer questions about its environmental record, yet stated it is “pleased” to receive its stimulus grant and is “following the NEPA requirements set forth by the Department of Energy.” The company’s seaweed-based biofuel, DuPont added, “present[s] a significant opportunity to expand US and global consumption of low-carbon transportation fuels.”

Honeywell International/UOP, LLC

• Stimulus grant: $561,786
• Stimulus grant#2: $1.5 million
• Project: developing a “condition based maintenance” monitoring system for wind turbines to improve turbine reliability and reduce repair costs.
• Project #2: capturing and re-using carbon emissions from existing exhaust stacks for “beneficial purposes,” such as to produce a biomass feedstock for fuel. The site of the demonstration project, undertaken by UOP, is the Honeywell Resins & Chemical’s “caprolactam” plant, in Hopewell, Va.
• NEPA exemption: Dated Dec. 2009, for “small scale pilot project” consisting of “monitoring system installment on existing wind turbine” at a Minn. wind farm.
• NEPA exemption #2: Dated April 2010, for “R&D or pilot facility construction” consisting of “assembly of a pre-fab pilot plant” for “CO2/algae conversion.”
• Past violations:
  • Sept. 2009 — Honeywell agreed to pay $550,000 to settle civil air violations stemming from three separate toxic chemical releases in 2003 at its plant in Baton Rouge, La. The spills resulted in the death of one employee and injuries to several others.
  • Aug. 2008 — Honeywell agreed to pay $6 million to settle hazardous-waste and water violations at its plant in Phoenix. Arizona officials blamed the decades of violations, stretching from 1974 to 2004, for polluting local groundwater with such hazardous chemicals as cleaning solvents and jet fuels.
  • July 2008 — Honeywell agreed to pay $3 million for air violations totaling more than 1,500 violation days at five of its plants in and around Phoenix. The penalty marked the largest ever levied by state environmental regulators.
  • Feb. 2007 — Honeywell pled guilty to criminal air violations stemming from the fatal 2003 chemical release at its Baton Rouge plant, during which an employee died after opening a mislabeled cylinder of antimony pentachloride. The company was ordered to pay $12 million in fines and sentenced to two years’ probation.

  • Feb. 2006 — Federal environmental regulators cited Honeywell for air violations at the company’s paper-coating plant in Lincolnshire, Ill.

  • Sept. 2002 — Honeywell agreed to pay $36,000 to settle violations of federal reporting requirements for leaking hazardous coal tar after two separate fires at the company’s tar plant, in Detroit.
  • Dec. 2001 — State and federal environmental regulators fined Honeywell $900,000 for inadequate reporting of benzene and other chemicals, as well as other violations, at the company’s plant in Hopewell, Va.
• Company response: Honeywell confirms its NEPA exemptions, which it says were “consistent with the Department of Energy’s rules and regulations,” and notes that both of its stimulus projects will help move the country toward “a renewable energy future.” The company says it strives to meet or exceed all regulatory requirements. “In the rare instance where we fall short of these high standards,” said Honeywell’s Victoria Streitfeld, “we are committed to working closely with public agencies to address the gaps expeditiously.”
• Jan. 2010 — Westar Energy agreed to pay $509 million to settle air violations at its coal plant, in St. Mary’s, Kan. Federal environmental regulators had sued the company for evading permit requirements under the clean-air law, thus releasing illegal emissions of smog and haze at its plant near Topeka for 16 years.
• Company response: Westar sees its past environmental problems and its current stimulus project as “distinct issues,” according to Jim Ludwig, vice president of public affairs. The company has never agreed with regulators’ claims, he notes, yet settled the federal lawsuit because it was already investing millions of dollars to upgrade equipment at its coal plant. To company executives, Westar’s environmental record is “great.” Explained Ludwig, “There is no better indicator than the settlement, and the investment in new pollution control equipment.”