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Feds open criminal investigation of Chevron!

Government does not have to be “BIG.”

It just has to be big enough to be the only force capable of opposing criminal activity by big corporations.

The San Francisco Chronicle has learned that federal authorities have launched a criminal investigation of Chevron after finding that Chevron fashioned a pipe in its Richmond refinery that routed hydrocarbon gases around monitoring equipment and allowed them to be burned off into the atmosphere for four years without officials knowing about it. The action by Chevron is in possible violation of a federal court order.

“They were routing gas through that pipe to the flare that they were not monitoring,” said Jack Broadbent, executive director of the Bay Area Air Quality Management District, whose inspectors uncovered what Chevron was doing and ordered the bypass pipe removed.

The U.S. Environmental Protection Agency‘s criminal enforcement unit opened an investigation in early 2012, more than two years after the local inspectors made their discovery, according to air-quality officials and others familiar with the probe. The investigation is still open, and Chevron employees have been interviewed.

The federal criminal investigators are trying to determine who at Chevron was aware of the bypass pipe and whether the company used it intentionally to deceive federal regulators. The probe is unrelated to the August 6, 2012 fire that destroyed part of the refinery.

The chairman of the Bay Area air-quality district’s board, Contra Costa County Supervisor John Gioia, said that if Chevron intended to deceive regulators, its actions raised “extremely serious” questions about the company’s credibility.

“That’s a criminal act, intentionally bypassing the monitoring,” Gioia said. “The rule is designed to reduce flaring, and refineries are supposed have a responsibility to abide by it.”

The federal investigation is focused on the burning, or flaring, of gases created during the superheating of crude oils to create fuels.

Under a 2005 settlement of a lawsuit filed against it by the Environmental Protection Agency, claiming that Chevron violated federal environmental rules, the company agreed to limit flaring at Richmond and its other refineries and account for each flaring event.

The Bay Area air-quality district, which enforces federal air standards, ordered Chevron to install monitors at the Richmond refinery to measure pollutants in the gases burned off during flaring, and to report all instances of flaring.

An enforcement manager for the air quality district “…became suspicious Aug. 17, 2009, when they saw steam from a flare coming from a high-pressure, high-temperature hydrocracking complex in Richmond called the Isomax unit, where 62,000 barrels of oil a day are converted into gasoline and jet fuel. The inspectors asked to see Chevron’s pollution-monitoring equipment, and discovered “it wasn’t recording anything,” Kino said.

(Psssst! It’s 2012! :-) ) continues:

Chevron had installed more than 100 feet of 3-inch pipe, linking the vessel where oil is processed to the flare tower, and bypassing two sets of monitoring equipment, Kino said. When an operator activated the bypass pipe, the gases were sent up the flare stack without being recorded.

Chevron said the pipe was designed to balance pressure in the refining process, but investigators could find no legitimate use for it, Kino said.

During a two-year investigation that involved examination of refinery surveillance tapes, Kino said, the air-quality district determined that Chevron used the pipe bypass 27 times from April 2005 to August 2009. He called the violations “very serious.”

What a coincidence! Some 27 concidences, actually! :-)

In August 2011, Chevron agreed to a settlement with the agency in which it paid a $170,000 fine for two violations. That same month, the air-quality agency renewed Chevron’s permit for operating the Richmond refinery for five years.

In September 2010 – a year into the agency’s investigation – Environmental Protection Agency officials expressed concerns that Chevron was flaring at the Richmond refinery as a matter of routine. The air-quality district, however, dismissed the suggestion.

“There is no evidence that the flares at the Chevron refinery are being used as control devices,” the district said. It cited “flaring reports from this refinery covering the period from 2004 to the present show no instances of ‘routine’ flaring.”

It will be interesting to see whether the federal criminal investigation decides that the actions/inactions of the air quality district are, at best, stupidity, or, at worst, collusion.

Only time will tell.

-Bill at

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