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MADISON, WISCONSIN -- The Justice Department, the U.S. Attorney's office in Madison, Wisconsin, the Environmental Protection Agency and the Wisconsin Department of Justice today announced a proposed settlement with Murphy Oil USA, Inc., which will dramatically cut sulfur dioxide ("SO2") emissions from the company's Superior, W.I. refinery, and will also improve Murphy Oil's programs to monitor and repair leaks of volatile organic compounds and to prevent oil spills. Murphy will also pay a $5.5 million civil penalty, the largest ever leveled in Wisconsin in an environmental enforcement case; the State of Wisconsin will receive $750,000.

In Orders issued on May 18, 2001, and on August 1, 2001 after a ten-day trial, Chief United States District Judge Barbara B. Crabb found Murphy Oil liable for substantial violations of Clean Air Act emission limits and permitting requirements as well as water permit, oil spill containment and waste handling requirements. Most importantly, Judge Crabb ruled that Murphy Oil violated the Clean Air Act when it made major modifications at its refinery without obtaining the required Prevention of Significant Deterioration ("PSD") permits, part of EPA's New Source Review program. She specifically found that, when Murphy Oil obtained a PSD permit exemption from the Wisconsin Department of Natural Resources, it had "withheld information knowingly and intentionally and that if it had submitted the withheld materials, they would have been material to the [WDNR's] decision making process."

Murphy Oil obtained a PSD permit exemption by withholding necessary information from the Wisconsin Department of Natural Resources when it submitted a permit application. Specifically, Judge Crabb found that Murphy Oil "withheld information knowingly and intentionally and that if it had submitted the withheld materials, they would have been material to the (WDNR's) decision making process."

"The impressive outcome of this case is the direct result of a successful, cooperative effort by State and federal officials," said Tom Sansonetti, Assistant Attorney General of the Justice Department's Environment and Natural Resources Division. "Companies that knowingly withhold information from regulators should be prepared to face the consequences of their misconduct."

"I commend the State of Wisconsin for partnering with the federal government to bring this important case to closure, and for working to make the air cleaner for its citizens and neighboring states," said Christie Todd Whitman, EPA Administrator. "EPA will take all actions necessary to enforce our environmental laws against companies that put the public at risk by not complying with the law."

The settlement, which resolves Murphy Oil's Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act violations prior to the penalty phase of the trial now scheduled for March 2002, requires the company to:

The consent decree only resolves Clean Air Act New Source Review violations at the sulfur recovery unit—it does not preclude EPA or the State of Wisconsin from investigating and bringing enforcement actions for violations of New Source Review requirements at other units at the refinery, if any.

The new control technologies and programs to be implemented by Murphy Oil at its refinery will reduce emissions of sulfur dioxide and volatile organic compounds, both which can cause serious health problems for the young and elderly.

"As a consequence of Murphy Oil's violations, the company has been emitting SO2 from its sulfur recovery unit up to 20 times the level that would have been allowed if it had applied BACT or complied with New Source Performance Standards," said U.S. Attorney Grant Johnson. "This agreement requires the company to comply with stringent pollution control standards, just as its competitors do."

Wisconsin Attorney General Jim Doyle said, "The State continued to work closely with the federal government in the prosecution of this case. We are pleased this consent decree will significantly reduce the SO2 emissions from the refinery and improve the air quality for the citizens of Superior."

Today's agreement will be filed with the U.S. District Court for the Western District of Wisconsin, and is subject to a 30-day public comment period and final court approval.