Most of BP's Texas City settlement goes for upgrades BP to pay $180 million to settle pollution case

BP has agreed to pay $180 million to resolve a federal inquiry into pollution violations at its Texas City refinery.

The proposed settlement requires the London-based oil giant to spend $161 million for equipment to reduce harmful emissions at the refinery, including stricter controls for benzene, a petroleum byproduct known to cause cancer. The company also will pay $12 million in penalties and $6 million into programs to clean the air in the surrounding community.

BP’s deal with the federal Department of Justice and Environmental Protection Agency comes nearly four years after an explosion killed 15 people at the nation’s third-largest refinery. Regulators said the ensuing inspections revealed the company had not obeyed an earlier agreement that required tighter controls of benzene, among other violations.

“The Department of Justice and the EPA will aggressively pursue those who fail to comply with the laws that protect our environment, and we will hold them accountable,” said John Cruden, acting assistant attorney general for the Justice Department’s Environment and Natural Resources Division.

BP spokesman Daren Beaudo said the settlement builds upon the company’s efforts to control emissions of benzene at the refinery, which resumed full operations in January after a three-year $1 billion overhaul.

“We are pleased to have achieved this settlement and will work to continue reducing emissions and to ensure regulatory compliance at Texas City,” Beaudo said.

BP has already pleaded guilty to charges related to the explosion and agreed to pay a separate penalty of $50 million, the largest criminal fine ever assessed against a corporation for federal Clean Air Act violations. The plea is still under review by U.S. District Judge Lee Rosenthal in Houston.

But the latest settlement should not be relevant in determining the company’s criminal liability in the March 2005 explosion, prosecutors said.

In the 131-page consent decree, submitted Thursday for approval by a federal judge in Indiana, BP agreed to install equipment that will reduce emissions of benzene and other volatile organic compounds at the refinery by 6,000 pounds a year. The refinery emitted 96,000 pounds of benzene in 2006, according to the most recent federal data available.

BP also agreed to modernize cooling appliances, reducing emissions of hydrochlorofluorocarbons, which are blamed for depleting the Earth’s protective stratospheric ozone layer, and improve handling of asbestos at the refinery.

The Texas City plant regained its ability to operate at fill tilt in January after more than three years of maintenance and upgrades following Hurricane Rita and the deadly explosion. Before the shutdown, the refinery could earn $100 million a month when running at capacity.

matthew.tresaugue@chron.com