The U.S. attorney’s office in Los Angeles has filed felony criminal charges against Phillips 66, accusing the company’s Carson refinery of illicitly dumping oil and grease into the county sewer system.
In an announcement Thursday, the Justice Department said that a federal grand jury had returned a six-count indictment against the Houston-based energy business for consciously violating the Clean Water Act and then failing to report its actions to authorities.
Phillips 66 is charged with two misdemeanor counts of negligently violating the Clean Water Act and four felony counts of knowingly violating the Clean Water Act.
Phillips 66 faces up to five years’ probation for each count and $2.4 million in fines. Company officials are expected to appear in United States District Court in downtown Los Angeles for an arraignment within a matter of weeks.
“With these charges, we are sending a message corporations and individuals need to take their duty to protect the environment seriously,” said United States Atty. Martin Estrada. “We also send a message that no one is above the law. When our environment is harmed, this hurts our community. People deserve clean water. Consumers deserve to have their natural resources protected. The public deserves to have big companies that make big profits follow the law.”
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Phillips 66 officials acknowledged the charges and said the company was prepared to make its case.
“Phillips 66 will continue its cooperation with the U.S. Attorney’s office and is prepared to present its case in these matters in court,” a Phillips 66 spokesperson said in a statement. “The company remains committed to operating safely and protecting the health and safety of our employees and the communities where we operate.”
The criminal charges mark a turbulent exit to Phillips 66’s refinery operations in Southern California. Last month, the company announced it would shut down the sprawling 650-acre refinery complex in Carson and Wilmington, which produces about 8% of California’s gasoline.
The twin refinery facilities, about five miles apart and linked by pipeline, have operated for more than a century under Phillips 66 and several other owners. They have been cited repeatedly by local air regulators for releasing toxic chemicals, including two large fires in 2019 that resulted in plumes of smoke and hazardous chemicals drifting into nearby communities.
In those 2019 fires, Regulators found that refinery workers had repaired a malfunctioning pump but failed to inspect the equipment after the repairs. Phillips 66 was later cited by the U.S. Environmental Protection Agency.
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The new federal charges are tied to two massive releases of industrial wastewater from the Carson refinery four years ago.
In the first incident, in November 2020, the refinery discharged 310,000 gallons of contaminated wastewater, which contained more than 64,000 pounds of oil and grease, into the sewer system. The slurry of wastewater contained more than 300 times the allowable levels of oil and grease, as the facility’s treatment and practices were inadequate, according to the U.S. attorney’s office.
The contaminated wastewater surprised workers at the Los Angeles County Sanitation Districts, the public agency that handles and treats wastewater. A Phillips 66 manager told wastewater authorities the company would “retrain operations personnel” on how to properly respond to such situations, including notifying the sanitary district should it happen again.
However, about three months after the first spill, in February 2021, the refinery unleashed an even larger load of contaminated wastewater. The plant dispensed 480,000 gallons of industrial wastewater, including 33,700 pounds of oil and grease.
In both cases, Phillips 66 failed to inform the Los Angeles County Sanitation Districts, according to the U.S. attorney’s office. The sanitation agency’s wastewater treatment plant in Carson — one of the largest such facilities in the world — managed to collect the contaminated water and prevent it from reaching the ocean. But the massive deluge of oil and grease presented a risk to workers at the plant as it could have resulted in a buildup of flammable methane and exploded.
“This oil and grease is a dangerous, flammable substance that creates a hazard to the plant and all the staff working at the plant,” Estrada said.
California officials insist that pesticide air samples remained within healthy limits. However, environmentalists say the state is downplaying the risk.
The U.S. attorney’s office is working to determine whether the treatment plant sustained any lasting damage. If so, Estrada vowed to recoup restitution to make repairs.
“At this point, we don’t have an estimate,” Estrada said. “But we will work with the county, work with a lot of treatment facilities to determine what if any damage occurred, and to do everything we can to make sure they’re made whole.”
If convicted of the charges, a judge could require Phillips 66 to adhere to a slate of probationary conditions. And although the company plans to close its Southern California refinery plants soon, the conditions would still need to be followed by the company writ-large, Estrada said.
“We’re confident the facts that we’ve gathered will show that Phillips 66 is guilty of the felony investigative violations, but they’re presumed innocent until proven guilty,” Estrada said. Any convictions would “be on the company as a whole, not on any one facility in Wilmington or Carson.”
The case is one of the most noteworthy environmentally related criminal prosecutions by the U.S. attorney’s office in Los Angeles in recent memory. The office previously brought
a felony Clean Water Act case against a Texaco subsidiary in 2001 for discharging oil-laden wastewater into Dominguez Channel. That company pleaded guilty and was fined $4 million.
