June 27, 2007 / 7:12 PM / 10 years ago

UPDATE 2-Citgo found guilty of violating U.S. Clean Air Act

3 Min Read

(Adds Citgo comment, paragraphs 6-8)

By Erwin Seba

HOUSTON, June 27 (Reuters) - A federal jury in Corpus Christi, Texas, on Wednesday found Citgo Petroleum Corp. guilty on two of four charges in the first criminal trial of a refiner under the U.S. Clean Air Act, according to the court clerk's office.

In their third full day of deliberations, jurors determined Citgo was guilty on two counts of operating oil-water separators at the 156,000 barrel per day (bpd) refinery in 2001 and 2002 without pollution control equipment required by the Clean Air Act.

The jury found Citgo not guilty on two counts of violating limits for releasing cancer-causing benzene from the refinery in 2001 and 2002.

Citgo's attorney said the company was pleased to be acquitted on the benzene-release charges, but disappointed by the guilty verdicts.

"We've already fixed everything," said Dick DeGuerin in a phone interview. "It doesn't help people to think you're still going to be charged for fixing things."

In a statement issued Wednesday afternoon, Citgo said it planned to appeal the verdicts.

"CITGO has followed EPA Regulations and will appeal the (guilty) verdict," company spokesman Fernando Garay said in a statement.

"It is unfortunate that the Justice Department has chosen to take the unprecedented step of pursuing criminal charges on matters that are purely regulatory in nature and that are inconsistent with applicable EPA regulations," Garay said.

Citgo is owned by PDV America Inc., a subsidiary of Petroleos de Venezuela S.A., the national oil company of Venezuela.

The benzene-release charges stemmed from large amounts of the carcinogen that came from the refinery's East Plant in 2001 and 2002. In 2001, Citgo reported benzene releases totaling 127,528 lbs (57.8 metric tons), nearly 10 times the legal limit of 13,200 lbs (5.99 metric tons).

Citgo has said the large releases in 2001 were due primarily to a unit malfunction at the refinery.

State environmental investigators traced some benzene releases to two large storage tanks at the East Plant.

Citgo said the tanks were primarily used for containing refinery wastewater before it was released into the Corpus Christi sewer system. Citgo also said the tanks contained some crude oil that was carried in the water.

The U.S. Justice Department charged the tanks were actually modified, without needed air pollution control equipment, to separate waste oil from wastewater because other oil-water separators at the refinery did not work up to expectations.

One Corpus Christi environmental activist said the guilty verdict affirmed pollution claims by residents of low-income neighborhoods around the refinery.

"Not only was the Clean Air Act on trial, but environmental justice was on trial and we won," said Suzie Canales.

U.S. Judge John Rainey will determine what fines Citgo must pay for the violations. The company will be fined either $500,000 on each count or two times the economic gain realized through the violations, whichever amount is greater.

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