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"The statute would allow it," says Soward, "because it says $10,000 a day per violation, and I've always maintained that every permit limit that's violated is a violation."
It would be one thing if the penalties that TCEQ issues really packed a wallop, but to the billion-dollar refineries and chemical companies, they are hardly a fly in the oil and chemical-rich ointment. TCEQ proudly says, for example, that in 2008 it issued 1,600 enforcement orders for $16 million. That equals $10,000 per enforcement, the statutory max.
"If a company knows that their only liability is $10,000 a day," says Soward, "they can make a business decision based on that. They'll say, 'We emitted and we'll probably continue to emit because all it's going to cost us is $10,000 a day.'" It's simply cheaper to pay the fine than it is to upgrade or replace aging or failing equipment.
In 2003, the State Auditor's Office reviewed TCEQ and discovered that the economic benefit for companies during periods of noncompliance was tremendous. For the years 2001-2003, the audit concluded, companies were fined only 19 percent of what they gained.
"In other words," says Tom "Smitty" Smith, state director of the environmental group Public Citizen, "the penalty was one-fifth the cost of proper disposal of the pollutants. That's a stunning number."
As evidence that fines are not a deterrent, Matthew Tejada, executive director of the Galveston-Houston Association for Smog Prevention, points to a study he helped publish showing that in 2007 at least 80 percent of companies in the Houston region that received a violation were repeat offenders and had previously been penalized for that same violation. Nearly half of the facilities had ten or more similar infractions and some had more than 50.
Many emission events never receive enforcement and are legally excused. However, InsideEPA, a news service covering the EPA, has reported that the agency is considering revoking those excuses, which critics say are far too broadly applied.
While some news stories have applauded TCEQ for assessing record amounts of fines this past year, the Houston Press found that the agency routinely gives companies a break by reducing the fines and that the facilities with the most violations paid the least percentage of their penalties.
According to calculations obtained through an open records request, TCEQ over the last three years assessed more than $5.7 million worth of fines to the 20 plants, but only ended up charging the facilities slightly more than $2.5 million, meaning the companies paid just 43.9 percent of the assessed penalties.
And the more violations a plant had, the lower the percentage of the penalty it paid.
LyondellBasell's Houston Refining plant, for instance, was cited for 44 violations and $467,306 in penalties. However, TCEQ only made the plant pay 29 percent of that amount. ExxonMobil's Baytown refinery was assessed 32 violations and more than $1.25 million and only had to fork over 35 percent of it. On the other end of the spectrum, the Lubrizol plant was cited for seven violations and had to pay all of its fines, totaling $20,410, and the Rohm and Haas facility, which had ten violations, had to pay 80 percent of its $236,175 in fines (see "Paying the Price").
In response, TCEQ said in an e-mail that the agency "assesses penalties based on statutory requirements."
Says Soward, "Penalties start out usually as a reasonably high number, but then it starts getting ratcheted down because the company gets credit for this and credit for that. Week after week I'd see enforcement orders that said, 'The penalty amount has been reduced to meet statutory limits,' and the agency has to dumb it down."
In addition, it can take as long as four years for TCEQ to finalize a penalty. A TCEQ spokesman acknowledged this problem, saying that "TCEQ is striving to lessen the amount of time it takes to process an enforcement case and issue an effective order."
The penalty process, says Tejada, is another example of how TCEQ does not deter companies from polluting.
"If you have a system like we do where you recover less than 50 percent of assessed penalties," he says, "that's a major failing. If the state doesn't use its penalty policy effectively, then they are effectively neutered."
Additionally, allowing frequent violators to pay less of their penalty than those who are in compliance is unfair to the industry.
"It creates an unbalanced playing field," Tejada says, "because the bigger companies, the ones who have better lawyers and have more representation, can game the system to their advantage, whereas the smaller companies are less adept at it. The whole penalty process needs to be transparent, efficient and accountable, not only to the citizens who suffer the pollution but also to the industries, and right now neither of those things exist."
It was an unusually warm spring day in Texas City on March 23, 2005, when workers at the BP refinery tried to start up a unit that had been down for repairs. As they pumped petroleum into a tower, the tower began to overflow, sending a geyser of gas into the air. This caused a highly flammable vapor cloud to form just above the ground, which exploded, killing 15 workers and injuring another 180. The U.S. Chemical Safety Board later ruled that the initial plume of gas that erupted was caused because the chemicals were vented directly into the atmosphere.
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