Premcor history troubled

Williams buyer shuts refineries in violation

By Tom Charlier
charlier@gomemphis.com
March 10, 2003

By the time Connecticut-based Premcor Inc. completed its purchase of the Williams Companies' petroleum refinery in Memphis last week, one veteran company official already had been sent to the city - for a stay in federal prison.

Ronald Snook, former environmental manager at Premcor's now-closed refinery at Blue Island, Ill., is serving a 21-month term at the Federal Correctional Institution in East Memphis following his conviction last year on charges of conspiring to violate the Clean Water Act and conceal the infractions.

Even by the gritty standards of the petroleum industry, the Blue Island facility near Chicago stood out as a major polluter. The plant belched pungent air pollution, dumped explosive wastes into waterways and rained chemical dust on a neighborhood.

But the Blue Island plant is not the only Premcor facility with a tainted environmental track record. Other company refineries from Texas to Ohio also have been plagued by air pollution and groundwater contamination problems.

Although the company claims it has cleaned up, the past troubles loom as a recurring issue as Premcor takes over the former Williams refinery at 543 W. Mallory in South Memphis.

A South Memphis citizens group and a City Council member have criticized the company for refusing to negotiate a "good-neighbor"agreement that would address environmental, safety and esthetic concerns at the refinery.

And members of environmental watchdog groups that have monitored Premcor say local residents have reason to be wary.

"Premcor is notorious when it comes to environmental noncompliance and just being a mean-spirited and tough customer to deal with,"said Denny Larson, coordinator for the Refinery Reform Campaign, a Texas-based group that says it's trying to clean up the petroleum industry.

However, company officials say the refinery will make every effort to comply with environmental and safety regulations.

"We're interested in working with the community and running a safe and efficient operation here,"refinery spokesman Lisa Wheeler said.

For Premcor, "environmental integrity is foremost,"she added.

Premcor, formerly known as Clark Refining and Marketing Inc., is one of the nation's largest independent oil refiners.

Last Tuesday, the Old Greenwich, Conn.-based firm closed on a deal in which it will pay Williams $455 million - plus additional payments of up to $75 million over the next seven years - for the refinery. The 175-acre facility, which has capacity of 190,000 barrels a day, produces most of the gasoline used by Memphis-area motorists, as well as fuel for Memphis International Airport.

Health Department officials say it's too early to predict how well Premcor will abide by environmental regulations.

"Actions speak louder than words - time will tell,"said Diane L. Arnst, pollution-control manager for the department.

With or without the sale, the refinery was facing unresolved environmental matters. The Health Department proposed a $100,000 penalty against the facility for excessive sulfur-dioxide emissions during equipment malfunctions in November 2001.

And last year, Williams disclosed that it had understated its discharges of cancer-causing benzene at the refinery from 1997 through 2001.

Arnst said she was encouraged by Premcor's decision to put off a planned expansion at the Memphis refinery until issues surrounding the benzene releases have been resolved.

"I take that as a good sign - that they're taking compliance seriously, ahead of expansion,"she said.

Premcor currently operates two other refineries, one in Lima, Ohio, and one in Port Arthur, Texas.

Much of the pollution history revolves around two Illinois refineries - in Blue Island, a southern suburb of Chicago, and in Hartford, located across the Mississippi River from St. Louis - that the company recently closed.

"They were both old facilities, and they had a lot of environmental problems,"said Dennis McMurray, a spokesman for the Illinois Environmental Protection Agency.

At the Blue Island plant, state and federal regulators pursued numerous environmental and safety violations.

The refinery frequently emitted clouds of dust over the surrounding community, including a June 2000 episode that coated an eight-block area with up to 2 inches of spent catalyst, a sandlike material containing metal compounds.

Last year, in a settlement with the U.S. Justice Department, the Environmental Protection Agency and State of Illinois, Premcor agreed to pay $6.25 million for alleged violations of five federal pollution statutes at Blue Island.

And 10 months ago, Snook was sentenced after his conviction stemming from violations of the Clean Water Act. Prosecutors said Snook and another plant official conspired to conceal from a local wastewater agency discharges that were up to 20 times the amounts allowed under the refinery's permit.

The plant also bypassed treatment facilities and dumped explosive wastes into a channel that flows into tributaries of the Mississippi River, federal regulators said.

Members of a Blue Island citizens group have few kind words for Premcor.

"They have a bad history,"said Joan Silke, who chairs the Good Neighbor Committee of South Cook County. "This company does not tell the truth."

Silke said the Blue Island refinery was a "nuisance day after day after day."

Residents living near other Premcor refineries have seen similar troubles.

In Hartford, where Premcor has paid stiff penalties for air pollution problems, neighbors also have had to worry about contamination from millions of gallons of gasoline floating on a shallow aquifer. Gasoline vapors have been detected in nearby homes.

State officials believe the fuel came from past underground leaks and spills at the Premcor facility, McMurray said.

But despite pressure from the Illinois Attorney General's Office, the company has refused to intensify its efforts to clean up the gasoline, arguing that it was not the sole source of the contamination.

In Port Arthur, a Premcor refinery has experienced numerous malfunctions, known as "upsets,"that emit pollution. Between December 2001 and March 2002, the plant accidentally released 400 tons, according to state figures.

During a Senate hearing on industrial pollution last summer, a former EPA official described the Premcor releases in Port Arthur as a prime example of what's wrong with the nation's pollution-tracking programs.

Local residents and citizens groups voice concern about the releases and Premcor's policies.

"They just don't feel like they need to abide by what the communities they surround want,"said Hilton Kelley, founder of the Community In-Power and Development Association.

In Memphis, citizens groups representing areas of South Memphis say they met with little success in their attempts to discuss environmental and safety issues with Premcor as the sale of the refinery was unfolding.

Ernestine Carpenter, a member of The Riverview Collaborative, a group rep resenting refinery neighbors, said Premcor "has made no attempt to contact us."

Reginald Milton, executive community director of the South Memphis Alliance, said his group has been rebuffed in trying to develop a "good-neighbor"agreement with Premcor. The agreement would call for efforts to reduce pollution, enhance safety and improve alarm systems and fire-response times.

"Our goal is for the refinery to operate efficiently so that it can make a profit and the community can be assured it is protected and, most importantly, for the refinery to work to offset the negative impact it has had on the community,"Milton said.

Premcor's refusal to negotiate such an agreement is cause for concern, Milton said, especially given the company's "spotty history."

The company's rebuff prompted City Council member Tom Marshall to write Premcor and complain of its seeming "lack of concern"about the community.

However, Wheeler said that despite Premcor's refusal to pursue the good-neighbor agreement, the company is committed to running a safe and environmentally sound operation.

"I just don't know that we have to sign a legal document to do that,"Wheeler said.

- Tom Charlier: 529-2572

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