Phillips 66 indicted on charges it dumped tainted water from California refinery into sewer system
Phillips 66, which last month announced plans to close its Los Angeles-area refineries by the end of 2025, was indicted Wednesday for allegedly discharging hundreds of thousands of gallons of industrial waste from its Carson oil refinery into the Los Angeles County sewer system during the pandemic, the U.S. Attorney’s Office said Thursday, Nov. 21.
The oil refiner, which federal attorneys claim failed to report violations to authorities, is charged with two counts of negligently violating the Clean Water Act and four counts of knowingly violating the 52-year-old federal law designed to regulate pollution in US waterways, according to documents filed in federal court in Los Angeles.
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Phillips 66 is expected to be arraigned in the coming weeks in US District Court in downtown Los Angeles, U.S. Attorney Martin Estrada said on a conference call Thursday. No company executives with the Houston-based energy giant were named in the indictment, which was returned by a grand jury on Nov. 20.
If convicted of all charges, Phillips 66 would face a statutory maximum sentence of five years’ probation on each count and up to $2.4 million in total fines.
As explained by Estrada, there are any number of probationary conditions a judge can place on a company to ensure compliance with the Clean Water Act, though he offered no examples. A company on probation faces heightened scrutiny by regulators and must demonstrate compliance to avoid further penalties, even if the business no longer has a presence in California.
The US Environmental Protection Agency is also investigating the dumping allegations.
“With these charges, we are sending a message. Corporations and individuals need to take their duties to protect the environment seriously,” Estrada said.
Neither a spokesman with Phillips 66 nor LA City Councilman Tim McOsker, whose district includes the Wilmington area, responded to phone calls or emails on Thursday.
Estrada characterized the Phillips 66 indictment — two felonies and four misdemeanor charges — as “not common for our office.”
The Phillips 66 indictment is the first time since 2001 that the US Attorney’s office has brought a felony Clean Water Act case, a spokesman with Estrada’s office said.
In that case, the former LA-based Texaco Refining and Marketing unit pleaded guilty to two felony violations of the Clean Water Act and was fined $4 million. Texaco, which was later bought by Chevron Corp., also admitted that its employees knowingly discharged wastewater, which contained oil and grease above permitted levels, into the Dominguez Channel from a Texaco refinery in the southern part of LA County.
The Phillips indictment comes a month after the Houston-based oil giant announced plans to close refineries in Carson and Wilmington and idle 600 employees and 300 contractors. The company also hired a pair of real estate firms to develop potential uses for the land.
Estrada said his office and other authorities investigating the alleged discharges in November 2020 and February 2021, believe most of the wastewater was caught at the Joint Water Pollution Control Plant in Carson, which is owned by the LA County Sanitation Districts, before reaching the ocean.
LACSD technicians performing routine testing and maintenance at the Carson treatment plant uncovered discharges in two separate incidents, in addition to smelling the oil and grease wafting in the air, according to Estrada.
As outlined by Estrada, the two dumping incidents included the following:
On Nov. 24, 2020, staff at the treatment plant in Carson found that Phillips 66 discharged more than 310,000 gallons of wastewater with 64,000 pounds of oil and grease into the county’s sewage system over a two-and-a-half-hour period. That was more than 300 times the concentration of oil and grease permitted. The following month, a Phillips 66 manager acknowledged in a letter to Los Angeles County Sanitation Districts that his company made the non-compliant industrial wastewater discharge, noting that the company would “retrain operations personnel” to make sure this didn’t happen again.
Just a few months later, a second incident was discovered by LACSD staff at the Carson sewage plant. On Feb. 8. 2021, the Carson refinery discharged 480,000 gallons of wastewater, which contained at least 33,700 pounds of oil and grease, into the county’s sewer system, over a five-and-a-half-hour period.
In both cases, Estrada said the illegal discharges of oil and grease were likely not dumped into the Pacific Ocean. “We believe the county caught all of the contaminated wastewater,” Estrada said.
The cleanup effort was aided by microbial bugs that eat waste products before the discharges were released into the ocean, according to Estrada.
Polluted land
Since Phillips 66 announced plans to close its Los Angeles area refineries, the Los Angeles Water Quality Board has raised concerns about polluted land on the 650 acres that make up the Wilmington and Carson complex, an industrial backbone near the Port of Los Angeles.
Last month, Phillips 66 hired two development firms to envision what could be built on the sprawling complex dating to the early 1900s. A labyrinth of pipes, tanks and an assortment of machinery processes crude oil into gasoline, kerosene and jet fuel. The energy company hired Catellus Development Corp. in Oakland and Deca Cos. in Sacramento to help figure out its next steps.
Experts previously said remediation of the heavily polluted industrial site could take years, as Phillips has processed oil here for a century. The starkest assessment of the pollution on the site came from the water quality board.
In an emailed statement, the board wrote that “significant amounts of contamination” exist on the 650 acres that make up Phillips 66 refinery sites in Wilmington and Carson, and that it will probably take “years to clean up” the soil and groundwater.