Exxon Mobil Slapped With $6.1 Million Fine

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Exxon Mobil Corp. has agreed to pay an additional $6.1 million penalty after it reneged on a promise to cut air pollution from four refineries in California, Louisiana and Texas, the Justice Department said Wednesday.

Chairman and chief executive officer Rex W. Tillerson speaks at a news conference following the Exxon Mobil Corporation Shareholders Meeting in Dallas, Texas, May 28, 2008. (Mike Stone/Reuters)The payment stems from an agreement between the government and Exxon Mobil in 2005 - part of a broader push by the Environmental Protection Agency to reduce air pollution from refineries - in which the company agreed to pay $14.4 million in civil penalties and community-related environmental projects, while also installing new air pollution controls at the refineries.

But Justice and EPA officials said Wednesday that Exxon Mobil violated the agreement by not adequately reducing smokestack sulfur pollution at the refineries as it had promised to do.

Exxon Mobil said in a statement that the company identified the ongoing sulfur emission problem and brought the matter to the EPA's attention.

"Environmental impacts associated with this item were very minor," Prem Nair, a spokeswoman for Exxon Mobil's offices in Fairfax, Va., wrote in an e-mail. She said the emission problems have been corrected and the company now meets the required EPA standard at the refineries in Beaumont and Baytown, Texas, Torrance, and Baton Rouge, La.

But the Justice Department saw the matter as a bit more serious.

"The Department of Justice will not tolerate violation of our consent decrees," Assistant Attorney General Ronald Tenpas said in a statement.

"The significant penalty in this case shows that noncompliance with settlement requirements will have serious consequences."

Granta Y. Nakayama, assistant EPA administrator for enforcement and compliance, said the 2005 settlement "has resulted in major reductions in air emissions" from Exxon Mobil refineries "but we need full compliance to realize all the benefits of the settlement."

The 2005 agreement was one of a number of settlements that covered companies and refineries nationwide. To date, the EPA said, 95 refineries in 28 states, accounting for 86 percent of the country's refining capacity have installed additional emission controls as part of the 2005 settlement or agreements patterned on it.

At the time, Exxon Mobil denied it had violated any laws or clean air regulations but said the settlement was "in the best interest of the company and supports the continued trend of emission reductions" at its refineries.

As part of the settlement, Exxon Mobil originally paid a civil fine of $7.7 million, promised to spend another $6.7 million on community environmental improvements, and said it was installing additional pollution controls at six refineries. Its two refineries at Joliet, Ill., and Billings, Mont., while part of the original settlement, were not involved in the latest penalty.

In October, Exxon Mobil broke its own record for biggest U.S. quarterly profit, reporting earnings of $14.83 billion for the July-September period. The previous mark was Exxon Mobil's $11.68 billion profit in the second quarter of this year.