Chevron has agreed to install new smog controls and pay just under $1 million to settle an environmental group's lawsuit charging that the company violated federal clean-air laws at its tanker terminal off El Segundo.
The suit, filed in 1997, alleges that a pollution trading program set up by the Los Angeles region's air-quality agency for local oil companies violates the civil rights of people living around industrial sites.
The program allowed oil companies to buy and scrap old, polluting cars and in return collect credits without having to install pollution-control equipment at their own oil tanker terminals.
In its lawsuit, Communities for a Better Environment charged that the program raises environmental justice concerns because oil facilities are usually found in poor, minority communities.
Chevron officials said Thursday that they followed the rules of the program set up by the South Coast Air Quality Management District. The program, however, has not been approved by the U.S. Environmental Protection Agency, which oversees clean-air laws.
"Chevron operated in good faith and we thought we were in full compliance with appropriate air emission rules," said Gary Yesavage, general manager of the El Segundo refinery.
Chevron will spend $500,000 to install improved smog controls at its oil tanker terminal 1.5 miles off the El Segundo coast.
The oil company also will pay $500,000 to develop a free health clinic in the Wilmington area, and pay the environmental group $485,000 in legal expenses.
A complaint filed against the South Coast district, alleging federal civil rights violations, is still pending. Three other companies, Unocal/Tosco, Ultramar and GATX, already have agreed to install the pollution equipment at their tanker terminals.
Most oil companies in California have already installed the costly vapor-control equipment required under the Clean Air Act. But the South Coast district's program waived the requirement for Southland refineries as long as the companies scrapped old cars.
The pollution trading program, which began in 1992, had been highly touted by the district as a way to give industries more choices in cleaning up smog. But the EPA and environmentalists say it has failed to protect neighborhoods around industrial sites from hazardous fumes.
The oil facilities emit hydrocarbons, which are a main ingredient of smog, but also include such cancer-causing compounds as benzene.