The U.S. government now owes ExxonMobil $20.3 million for cleaning up environmental damage from producing war materials at its Baton Rouge and Baytown, Texas, refineries and nearby chemical plants.
In a 113-page order issued last week, U.S. District Judge Lee Rosenthal concluded the government exerted substantial control over the refineries’ actions during World War II and the Korean War, including decisions on how to use raw materials and labor.
This control, the judge wrote, makes the government responsible for a share of the remediation costs, including costs related to the refineries’ delays in implementing certain waste-management improvements. Specifically, the judge assessed the government 14.4% of past response costs at the Baton Rouge refinery, nearly 25% of those at the company’s Baytown refinery and 36.54% at the Ordnance Works/Tankfarm 3000 area.
It is the third—and likely final—opinion issued in the environmental pollution cases.
The two refineries date back to the early 20th century, when they were built and operated by predecessors to ExxonMobil. In the 1940s, the Baton Rouge and Baytown refineries “converted with astonishing speed into aviation gas and synthetic rubber production sites,” the order notes, which was “important to the military victory over Japan and Germany. Both refineries operated under wartime contracts with the United States. In both, military needs were given priority over environmental consequences.”
In 2010 and 2011, Exxon sued the U.S. government under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, seeking reimbursement for a percentage of the costs it paid, and will continue to pay, to remediate environmental damage at the Baytown and Baton Rouge refineries and nearby chemical plants under the Resource Conservation and Recovery Act. The statutes impose environmental standards and allow past owners and operators of facilities where hazardous substances are located to be liable for the costs needed to clean them up and prevent further harm.
Exxon alleges that through December 2014, it has incurred $77 million in past response costs attributable to the wartime-related contamination and that it will incur more.
The Baytown and Baton Rouge facilities were two of only three refineries to manufacture over 1 billion gallons of 100-octane aviation fuel during World War II on behalf of the government, according to a document submitted in February by ExxonMobil’s lawyers. In fact, the companies produced approximately 20% of the avgas consumed by the Allied Forces during the war.
During the bench trial, forensic historians testified about the government’s control over the materials and manpower essential to refiner operations, and the inability of refinery operators to make timely repairs or perform routine maintenance because of the government’s insistence on having the plants operate 24 hours a day, seven days a week.
This story first appeared in 10/12 Industry Report. Subscribe to the free 10/12 Weekly e-newsletter to keep up with regional industry news.Â
