Department of Justice Seal



FRIDAY, APRIL 21, 2000

(312) 886-3000


TDD (202) 514-1888



Company Also Will Pay $4 Million Penalty
to Settle Environmental Charges

WASHINGTON - TPI Petroleum Inc. will spend $9.9 million on two community environmental projects in Alma and St. Louis, Mich., designed to clean up local waterways and promote the reuse of contaminated property in downtown Alma, under a settlement filed today in federal district court in Bay City, Mich.

TPI will also work with the EPA and the Michigan Department of Environmental Quality to permanently clean up contaminated soil and groundwater resulting from the operations of TPI's refinery in Alma.

Under the agreement, TPI will pay a civil penalty of $4 million, one of the largest penalties ever paid in the Midwest for environmental violations at a single facility.

The agreement resolves claims that TPI illegally polluted the air, water, and land prior to the time that TPI closed the Alma refinery in October of 1999.

For one of the community projects, TPI will place $9 million into an escrow account that will be used exclusively to clean up selected areas of the Pine River and Horse Creek, both of which are located in central Michigan. TPI will perform a study to determine the nature and extent of the contamination on these local waterways and will propose how to clean up the areas that are found to be the most polluted. TPI will work with the EPA to develop the specific cleanup plan that will be implemented.

TPI will also do a $900,000 "brownfield" project. After assessing the environmental quality of approximately 11 acres in downtown Alma, TPI will restore and protect the property in a manner agreed to between TPI and the City of Alma. EPA will monitor and approve all proposed activities.

Lois Schiffer, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division, said, "This settlement means a cleaner, healthier environment for the community and the country."

Francis X. Lyons, Regional Administrator for EPA's Great Lakes Region, stated, "TPI's agreement to clean up local waterways and waterfront property should benefit a community that has seen a large share of pollution from historical industrial operations. Together with EPA's own Superfund clean-up project on the Pine River in St. Louis, Mich., this settlement should move the Pine River and Horse Creek closer to what we expect to see in our nation's waterways." Lyons commended TPI for its cooperation in resolving the matter.

The complaint that was resolved by today's agreement alleges that TPI violated multiple requirements of the Clean Air Act by discharging volatile organic compounds (VOCs), nitrogen oxides, sulfur dioxide, carbon monoxide, and particulate matter in excess of state and federal limitations and TPI's own air permits. VOCs and nitrogen oxides are pollutants that contribute to the formation of ground-level ozone smog that irritates lungs, eyes and sinuses. Sulfur dioxide can affect human health, especially among asthmatics, and can harm vegetation and metals. Sulfur dioxide and nitrogen oxides cause acid rain.

The complaint also alleges that TPI violated numerous provisions of the Clean Water Act, including that TPI had polluted Horse Creek and Pine River with wastewater that was toxic to fish and invertebrates. Finally, the complaint alleges that TPI violated the Resource Conservation and Recovery Act by failing to properly handle, store, and dispose of hazardous wastes, and that TPI violated the Safe Drinking Water Act by failing to properly monitor and report on a well that received wastewater from refinery operations.

TPI is owned by Ultramar Diamond Shamrock (UDS). Four other subsidiaries of UDS - Diamond Shamrock Refining Company, Diamond Shamrock Refining and Marketing Company, Sigmor Pipeline Company, and TPI Pipeline Corporation -- were also named in the complaint for discharging excess VOCs from storage tanks in Michigan, Texas, and Oklahoma. Under the settlement, TPI and these other UDS subsidiaries will place controls on the storage tanks creating the pollution.

A proposed notice of the TPI settlement will be published in the Federal Register. The settlement must receive final approval by the federal court in Bay City.

The Department of Justice and EPA will host a public meeting at 7:00 pm on May 10, 2000, at the Heritage Center for the Performing Arts on the campus of Alma College in Alma, Mich., to answer any questions that the public may have regarding the settlement. Free copies of the consent decree will be available on a first come, first serve basis starting today at the Office of the United States Attorney, 101 First St., Suite 200, Bay City, Mich., 48706, and, starting at 9:30 am on April 22, at the Alma Public Library in Alma, Mich. Thereafter, copies of the consent decree may be obtained by mail from the Department of Justice Consent Decree Library, P.O. Box 7611, Washington, D.C. 20044-7611, by identifying the case name and enclosing a check payable to the Consent Decree Library for $39.25. Copies of the consent decree may also be examined at the Office of the United States Attorney in Bay City and at EPA's Regional Headquarters located at 77 West Jackson Boulevard, Chicago, IL, 60604.