Philadelphia (EPA release) — The U.S. Environmental Protection Agency (EPA) announced on October 8 that the federal government has settled its final Clean Air Act (CAA) claim against Philadelphia Energy Solutions Refining and Marketing, LLC (PES) pertaining to the June 21, 2019 fire and explosion at its former South Philadelphia refinery.
EPA alleged that the company violated CAA section 112(r) which requires facility owners and operators to ensure that regulated and other extremely hazardous substances are managed safely. Specifically, EPA alleged that PES violated CAA 112(r) and implementing regulations found at 40 C.F.R. Part 68, which requires facilities to identify and assess the hazards posed by regulated substances, develop an accident prevention program to reduce the risk of accidental releases, and develop an emergency response program.
According to EPA, 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.
The proposed $4.2 million settlement, filed in U.S. Bankruptcy Court represents the largest CAA 112(r) penalty EPA has ever imposed for a single incident. EPA has three previous settlements with PES from 2020, one regarding CAA Renewable Fuel 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 under the Comprehensive Environmental Response, Compensation, and Liability Act.
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 as an allowed general unsecured claim in the PES bankruptcy matter, the penalty will be paid pursuant to a court-approved bankruptcy reorganization plan. Any monies collected will go to the U.S. Department of Treasury. 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.
