The Baytown Complex. Image courtesy of Exxonmobil.

ExxonMobil could be facing fines after an appeals court overturned a ruling that declined to fine the company for alleged air pollution tied to the Baytown refinery.

According to Houston Public Media, the Fifth Circuit Court of Appeals overturned a 2014 district court ruling that found only a small fraction of the alleged permit violations were actionable.

That ruling also declined to offer financial relief for the alleged violations.

The May 27 appeals court ruling found that the district court “erred finding 94 “actionable” permit violations, “abused its discretion when it weighed less lengthy/less serious violations against more lengthy/more serious violations in its assessment of Clean Air Act penalty factors and “erred in failing to consider certain evidence of Exxon’s economic benefit from noncompliance.”

The appeals court vacated the district court’s judgment and will send the case back to a lower court for an assessment of penalties based on “the correct number of actionable violations.”

The initial lawsuit sought the maximum penalty available under federal law, $642 million, for about 18,000 violations.

The lawsuit was filed in 2010 by the Sierra Club and Environment Texas and claimed that Exxon violated federal permits governing operations at the complex “thousands of times” from October 2005 to the date of the suit.

Of the seven counts included in the plaintiffs’ case, five were at issue during the appeal.

The appeals court also commented on a 2010 environmental improvement project agreement reached between Exxon and the Texas Commission on Environmental Quality.

In their appeal, the plaintiffs claimed that the agreement was reached after the initial lawsuit was filed in an effort to “undercut more stringent citizen enforcement.”

The appeals court rejected the plaintiffs claim that Exxon failed to make a good faith effort to comply with the permits.

“On this point, we think it is possible that the agreement between Exxon and the TCEQ is a sterling example of regulatory capture at its worst; however, it is also entirely possible that Exxon’s explanation for pursuing the agreement—that it wanted more “certainty” in enforcement—is valid and that the company did want to take good-faith steps towards reducing future compliance issues….the district court was entitled to take the view it did, and we cannot second-guess that view now,” the appeals court wrote.

Exxon told News 88.7 that it is considering its options but it is confident the dispute can be resolved in light of the court’s finding that Baytown has “operated reasonably and in good faith.”

The ExxonMobil Baytown area is the largest integrated refining and petrochemical complex in the United States and is located in Texas.


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