Thursday, July 29, 2004

Still Above The Law

Refineries, power plants and other large industrial facilities in California that violate clean air laws typically pay penalties lower than what an SUV driver may legally be fined for a smog violation, according to an investigation of enforcement records by Environmental Working Group (EWG).

Since 1999, when EWG last investigated clean air enforcement efforts in California, half of all air quality violations by large industrial facilities in the Bay Area, South Coast, San Joaquin Valley and Sacramento air quality districts were settled for $2,000 or less. Even allowing for a few high-profile large fines, this median penalty is a minute fraction of polluters' profits and an abysmal failure as an incentive for companies to obey the law.

Just as we found five years ago, many companies still violate their permits repeatedly. The pace of justice has slowed: The air districts used to close many cases within 90 days, but now routinely take more than six months. A striking disparity remains between enforcement in the rest of the state and in the Bay Area, where the median fine since 1999 was $1,450.

Since 1999, half of all air quality violations in California have been settled for $2,000 or less.

Air district Number of major sources regulated Total number of civil violations settled Median penalty assessed Total penalties collected
Bay Area 114 703 $1,450 $2,880,386
Sacramento 14 24 $2,045 $84,500
San Joaquin 175 901 $2,100 $4,333,932
South Coast ~800 742 $2,000 $3,625,343*
All Districts   2,370 $2,000 $10,924,161

*Does not include two civil penalties in excess of $1 million.

The state's lax enforcement of clean air laws has been well documented since a 1997 audit by the U.S. Environmental Protection Agency, which sharply criticized California's efforts as inadequate to deter repeat offenders. The EPA admonished regional air districts to increase the size and severity of penalties and said the state must provide better oversight of the districts' enforcement efforts.

But EWG's new analysis found that penalties have increased only slightly in the Bay Area and South Coast districts, and not at all in the San Joaquin and Sacramento districts. Five years ago, you couldn't rent the average one-bedroom apartment in San Francisco for what the Bay Area air district typically fines major air polluters. You still can't.

Major polluters have clearly accepted low fines as the cost of doing business — permission to pollute without the threat of major consequences. Since 1999, eight major facilities have each paid more than 50 penalties, meaning they have broken a law or a district rule an average of more than once a month. During this period, the Shell refinery in Martinez and Chevron refinery in Richmond were each issued more than 120 notices of violations (NOVs) — an average of almost two a month.

Lax enforcement produces both a disincentive to compliance and a stark inequity. The fine for a motorist who illegally operates a vehicle of more than 6,000 pounds — i.e., most larger SUVs — with an exhaust system that fails to meet state standards is $500 to $2,500. †1 As a percentage of income, the motorist's minimum fine is more than 250 times higher than the maximum single fine paid by an oil refinery in California for air pollution violations in the last five years. †2

This double standard is neither fair nor just - not to the millions of Californians who make sure their cars comply with smog standards, not to the many companies that abide by the environmental rules their competitors violate with impunity, and not to the communities whose health and safety are affected by toxic industrial chemicals in the air they breathe.

In California, where there are fewer high-profile "smokestack" industries than in some other parts of the country, air pollution is often discussed solely as a problem of auto emissions. While vehicle exhaust from what regulators call "mobile sources" clearly is the leading cause of dirty air in California, industrial emissions from "stationary sources" also are a major contributor.

According to the California Air Resources Board (ARB), in 2003 statewide emissions of nitrogen and sulfur from mobile sources were 2,826 tons per day, compared to 645 tons from stationary sources. But emissions of particulate matter (microscopic particles of soot and dust) were 210 tons per day from stationary sources and 127 tons from mobile sources. (ARB 2004)

California's air quality districts have made marginal statistical progress in enforcement since 1999, but still have no place to go but up. We repeat the recommendations we made five years ago: Penalties should continue to rise until they are large enough to curtail future violations. The EPA should exercise its authority and intervene when local regulators don't practice effective enforcement against high-priority violators, and bring persistent offenders into compliance.


†1 California Vehicle Code 42001.2

†2 Based on $63,000 median income for a California family of four, Exxon Mobil's 2002 net earnings of $56.2 billion, and $1.75 million Exxon Mobil paid that year for violations at its Torrance refinery.

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