Murphy OIl agrees to pay fines

MADISON – Murphy Oil USA has agreed to pay $1.25 in penalties to the US government and the states of Wisconsin and Louisiana to settle allegations that it operated its two refineries in violation of the Clean Air Act.

Murphy agreed to the proposed penalties and install air pollution measures to reduce sulfur dioxide and nitrogen oxide emissions by nearly 1,400 tons annually. In Wisconsin, nitrogen oxide would be reduced by 56.5 tons, sulfur dioxide by 446 tons and 12.3 tons of particulate matter.

Additional total reductions of 338 tons per year of nitrogen oxide are required from both facilities due to required improvements in facility heaters and boilers. The settlement will also reduce emissions of volatile organic compounds, particulate matter and carbon monoxide. These pollutants can cause serious respiratory problems and exacerbate cases of childhood asthma, among other adverse health effects, according to statement released by Attorney General J.B. Van Hollen.

“Compliance with Wisconsin’s and federal air pollution control laws is essential to keep a level economic playing field between all Wisconsin businesses and their competitors, and to protect public health,” Van Hollen said in the prepared statement.

The EPA’s lead attorney is John Fogarty. He says this is the 27th settlement with refineries across the country, with eight more to go.

“The EPA has been working our way through the refining industry to address the largest sources of sulfur dioxide and nitrogen oxide emissions from refineries,” says Fogarty. “We have a very comprehensive package of injunctive relief, new pollution controls.”

According to the 158-page consent decree:

Murphy’s Superior refinery has a crude oil capacity of 35,000-barrels per day, and its Meraux, La. refinery has a crude oil capacity of 125,000-barrels a day. The refineries are considered “major emitting” facilities under law as they have the potential to annually discharge more than 100 tons of nitrogen oxides, sulfur dioxides and other pollutants.

The refineries’ boilers in the cracking facilities have been modified in recent years that resulted in Murphy emitting significant increases in nitrogen oxide, sulfur dioxide and other particulate matter. In making those modifications, failed to obtain proper construction permits, use Best Available Control Technology and fully and accurately identify emissions from their refineries.

The alleged violations exposed the company to daily fines ranging from $27,000 to $37,500 since 2004.

Superior refinery manager Dave Podratz said the company has been working with state and federal regulators that past five years on the proposed decree.

“There’s been an effort by the (Environmental Protection Agency) for the past 10 years to get all the refineries in the U.S. covered by consent decrees … This one is similar to the decrees covering 90 percent of the refineries in the U.S.,” Podratz said Wednesday.

Work on lowering emissions at the Superior refinery began in June and will be completed within four years as new burners are installed on the refineries four boiler units, he said.

“The work at the Superior refinery won’t be as extensive as at Meraux, La.,” he said. “We’ve been under a different consent decree since 2002 and this one largely brings Meraux into the fold.”

Murphy Oil budgeted about $142 million to bring its refineries into environmental compliance with about $6 million budgeted for work at the Superior refinery, he said. Murphy added one employee after installing equipment required in the 2002 consent decree, said Podratz and added that employment won’t be affected by work required in the proposed decree.

Work at the Meraux refinery could take up to nine years to complete, according to company press release issued Tuesday.

In the consent decree filed Tuesday in federal court, Murphy would pay $229,687 to the state of Wisconsin, $395,312 to Louisiana’s Department of Environmental Quality, and $625,000 to the U.S. under terms of the decree, which doesn’t become final until a 30-day public comment has lapsed.

In the 2002 consent decree, Murphy paid $5.5 million in penalties and was required to cut sulfur dioxide emissions, monitor and repair of leaks of volatile-organic compounds and prevent oil spills. The State of Wisconsin received $750,000 from the settlement.

Murphy announced plans in July to exit the refinery business and sell its refineries in the U.S. and the United Kingdom. Podratz said the decree could answer questions potential buyers may have about Murphy’s future operations at the Superior and Meraux, La. but those in the petroleum refining business understand that nearly all of the U.S. refineries operate under a consent decree.

“We’re getting more information together (about the possible sale) and will entertain offers in the future,” Podratz said.

Jan Conley with the Lake Superior Greens says getting the Superior refinery in compliance has been a high priority. She says this settlement is a sign of a more aggressive EPA, but adds her group would still like to see health studies done on people who live downwind of the refinery.

Mike Simonson of Wisconsin Public Radio contributed to this report.

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