Texas Based Oil and Gas Company Phillips 66 Indicted for Alleged Violations of Clean Water Act Stemming from Wastewater Discharge

LOS ANGELES - A federal grand jury has returned a six-count indictment charging the Houston-based energy business Phillips 66 Company with violating the Clean Water Act by illegally discharging hundreds of thousands of gallons of industrial wastewater from its Carson oil refinery into the Los Angeles County sewer system then failing to report the violations to authorities, the Justice Department announced today.

Phillips is charged with two counts of negligently violating the Clean Water Act and four counts of knowingly violating the Clean Water Act.

The company is expected to be arraigned in the coming weeks in United States District Court in downtown Los Angeles.

"Protecting our environment is key to protecting our community," said United States Attorney Martin Estrada. "Just like the rest of us, corporations have a duty to follow the law, so when companies contaminate, they must be held accountable. My office will continue to be vigilant in safeguarding our natural resources for all to enjoy."

"Illegally discharging pollutants into the sewer system violates the Clean Water Act," said Special Agent in Charge Kim Bahney of the U.S. Environmental Protection Agency's Criminal Investigation Division. "The charges today illustrate EPA's commitment to protecting the environment and ensuring accountability for those that neglect or fail to abide by our nation's environmental laws."

According to the indictment that a federal grand jury returned on Wednesday, for approximately two-and-a-half hours on the early morning of November 24, 2020, Phillips' Carson refinery discharged to the Los Angeles County Sanitation Districts (LACSD) - which manages the county's sewer system - industrial wastewater containing a concentration of oil and grease more than 300 times the concentration allowed in its permit. The company's Carson facility failed to inform LACSD of its non-compliant industrial wastewater discharge.

During this approximately two-and-a-half-hour period, LACSD roughly estimated that the Phillips 66 facility in Carson discharged approximately 310,000 gallons of non-compliant industrial wastewater, which contained approximately 64,000 lbs. of oil and grease, to LACSD's sewer system. The energy company's industrial wastewater pretreatment system process controls and practices were inadequate to prevent or quickly address the non-compliant discharge.

In December 2020, LACSD issued Phillips multiple notice of violations for discharging the industrial wastewater containing an excessive concentration of oil and grease, and failing to notify LACSD about the discharge, which adversely affected an LACSD facility. The following month, a Phillips manager wrote to LACSD, acknowledged its non-compliant industrial wastewater discharge, and noted that the company would "retrain operations personnel" on such situations and the procedure to notify LACSD when it happens.

During the evening hours of February 8, 2021, Phillips' Carson refinery - for approximately five-and-a-half hours - discharged approximately 480,000 gallons of non-compliant industrial wastewater, which contained at least 33,700 pounds of oil and grease, to LACSD's sewer system.

In March 2021, LACSD - the month following the incident - issued notices of violations to Phillips for discharging industrial wastewater which adversely affected an LACSD facility and for its failure to notify the LACSD about said wastewater discharge. Again, a Phillips manager at its Carson facility wrote to LACSD and acknowledged the non-compliant industrial wastewater discharge and the company's failure to notify authorities of the discharge.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If convicted of all charges, Phillips 66 would face a statutory maximum sentence of five years' probation on each count and up to $2.4 million dollars in fines.

The United States Environmental Protection Agency is investigating this matter.

Assistant United States Attorneys Juan M. Rodriguez of the Public Corruption and Civil Rights Section and Dennis Mitchell of the Environmental Crimes and Consumer Protection Section are prosecuting this case.

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