Thursday, June 20, 2024

LDEQ agrees to tiny settlement from Dow Chemical for a decade of violations

by BIZ Magazine

By Wes Muller, Louisiana Illuminator

Just days before a large explosion and release of pollutants at the Dow Chemical plant in Plaquemine last month, a state agency let the company forgo paying hundreds of thousands in fines for a decade of alleged permit violations. 

The violations, which all preceded the July 14 explosion at Dow’s Gycol 2 unit, are detailed in a settlement agreement the Louisiana Department of Environmental Quality (LDEQ) signed July 6. The filing notes more than 100 incidents since 2013 resulting in alleged violations that each carry a maximum penalty of $32,500 per day, yet LDEQ settled the entire case for just $120,000. 

Some incidents spanned multiple days and even weeks. In one case, for example, an equipment malfunction in 2014 lasted for 28 days. Another incident that same year lasted 15 days.  

Factoring in the durations yields roughly 150 violations from 2013 through 2015, more than a dozen from 2014 through 2018, and an additional 17 from 2018 through 2020. According to attorney Caitlion Hunter with the Deep South Center for Environmental Justice, the final settlement amount should have been many times greater than it was.

“I found it surprising that LDEQ would settle for such a small amount given that a 2021 federal consent decree between Dow and EPA resulted in a payment of $675,000 to Louisiana,” Hunter said. “That consent decree alleged many of the same violations as in the most recent settlement, namely violations of Title V permits.”

Title V of the federal Clean Air Act covers all enforceable permit requirements on industrial facilities, including emission limits, reporting provisions, monitoring and record keeping.

It’s unclear how Dow and LDEQ settled on the final fine amount. The settlement paperwork made public does not disclose which incidents LDEQ designated as major, moderate or minor, and it refused to disclose that information when asked.

Dow Louisiana spokesperson Glynna Mayers said the incidents were all self-reported, meaning Dow disclosed them voluntarily and saved LDEQ from having to spend time and resources on enforcement. 

LDEQ spokesperson Gregory Langley said the agency uses a standard penalty matrix for settlement agreements to determine a penalty range for each violation. Its calculations are based on the degree of risk to human health or property and the gravity of the violation. To reach an amount as low as $120,000, nearly all of the violations would have had to fit within the minor penalty range between $100 and $15,000. 

Fine amounts can be adjusted up or down based on five factors: 1) the company’s history of previous violations, 2) gross revenues, 3) degree of culpability or indifference to regulations, 4) whether the company has failed to mitigate damages, and 5) whether the company immediately reported the violation. 

At least 31 of Dow’s incidents listed in the settlement involved unauthorized releases of dangerous chemicals into the atmosphere, which should usually be considered major or at least moderate events because they pose a risk to the public, Hunter said. A release on Nov. 3, 2019, sent 18 people to the hospital after an ethylene oxide explosion at the same Glycol 2 unit that exploded this July. 

Hunter analyzed just four of the incidents using LDEQ’s penalty matrix and calculated a penalty of $82,500 for just those four. Even on the very low end, the 31 unauthorized chemical releases should have netted at least twice the amount DEQ settled for, according to Hunter’s analysis. 

The penalty ranges should have been adjusted higher because Dow is a major manufacturer with considerable revenues, there was no evidence of mitigation, and because of the clear history of violations at its Plaquemine facility, Hunter said. Also, according to the settlement filings, Dow failed on multiple occasions to accurately report incidents or submit required updates on accident investigations.

Part of the problem with these kinds of settlements, Hunter explained, is the lack of transparency in how LDEQ calculated the penalties for each specific violation. 

“That information is part of the negotiation and is not available,” Langley said.

Without that information, the public is left in the dark as to whether the state is actually holding industrial polluters accountable. 

“We know the method they’re supposed to use to calculate the settlement, but we don’t get to see how they’re actually using it,” Hunter said. “They don’t show their work. Why aren’t you showing us how you came up with this settlement?”

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