Photo by Rafael Aguilera for The Texas Tribune
How the state of Texas allows industrial facilities to repeatedly spew unauthorized air pollution — with few consequences
DEER PARK — For more than two decades, Dennis Gallagher was a proud Shell employee.
During his 22 years working at the energy juggernaut’s sprawling, 80-year-old complex in this Refinery Row suburb of Houston, he learned to oversee different parts of the massive chemical plant and refinery. The facilities manufacture not only oil but a variety of hazardous chemicals that — if mishandled — could easily explode and level the 2,300-acre compound, located less than a mile from residential neighborhoods.
Until two years ago, the Michigan native’s only truly bad day at work was in 1997, when a gas compressor exploded and he was “picked up like a leaf” and blown back 25 feet. Then came what should have been a quiet Sunday in August 2015, when everything went wrong.
A critical pump failed. A small tank overfilled. Then more than 300,000 pounds of 1,3-butadiene — a highly explosive chemical and known human carcinogen used to manufacture rubber — escaped into the atmosphere.
It was the largest malfunction-related air pollution event in the Houston area that year — in less than an hour, the plant spewed 258 times more butadiene into the atmosphere than allowed by state law — and air pollution watchdogs say it was one of the most dangerous they’ve seen.
An internal investigation later noted that the amount of hydrocarbons released that day was more than eight times higher than the amount released during the 2005 fire and explosion at BP’s Texas City refinery that killed 15 people and injured 180 others.
There was no explosion that day. But Gallagher says the incident cost him his job and maybe his health. He struggled with chest pains and balance issues afterward — the latter is a known side effect of butadiene exposure — and had to take a year off. When he came back, he said he was put on probation for the incident and, after a minor screw-up during a routine re-training, promptly fired.
And yet it cost Shell Chemical, a subsidiary of the fifth-largest company in the world, next to nothing.
State records show the Texas Commission on Environmental Quality (TCEQ), the state’s environmental regulatory agency, fined the company just $25,000 — the maximum allowed for an air permit violation under state law — and required it to execute a “corrective action plan,” which called for mostly refresher training.
It’s a scenario that plays out again and again in Texas when industrial polluters spew noxious chemicals into the air during malfunctions and other unplanned incidents, exceeding the emission limits in their state-issued air permits.
A Texas Tribune analysis of self-reported industry data shows that thousands of such rogue releases occur at Texas industrial sites each year. They are known generically as “emissions events”— a term that refers to both malfunctions or “upsets” and unplanned “maintenance, start-up or shutdown” activities.
Whether they are truly unavoidable is a point of dispute.
Last year, there were 3,723 of these rogue releases at 774 industrial sites across the state, according to the Tribune’s analysis. That’s more than 10 per day on average.
Most of them are nowhere near as potentially catastrophic as the one at Shell Deer Park in 2015. They often come in smaller bursts or occur over a longer period of time — days, weeks, even months. And they make up a small fraction of what industrial sites are allowed to emit under their government-issued permits.
Adrian Shelley, who for years monitored unauthorized air emissions as head of the nonprofit environmental advocacy group Air Alliance Houston, said near-misses like the Shell incident “do happen, and I suspect we would be surprised to know the frequency.”
But collectively, they add up to a significant amount of excess air pollution each year — 57.9 million pounds in 2016, according to the Tribune’s analysis. Scientists and public health experts say the toxic and smog-forming pollutants exacerbate nagging air quality problems in the state’s major urban areas, spurring increased rates of asthma and cancer, as well as contributing to climate change.
At their worst, they turn into tragedies like the 2005 BP explosion or the 2014 toxic chemical leak at DuPont's La Porte chemical plant that killed four workers.
If they don’t, though, companies are often let off the hook.
That’s thanks in part to a provision in Texas law that allows polluters to claim that such emission events are unavoidable to escape penalties. (A review of hundreds of industry reports to the state revealed none in which a company claimed fault.)
But an even bigger factor is a general unwillingness by state environmental regulators to challenge them on those claims, the Tribune has found.
Fines are rare, small for unplanned emissions
When something goes wrong at a Texas industrial facility — like the Shell accident in 2015 — and it exceeds its air permit limits, the company is required to report the event to the state within 24 hours and estimate how much pollution was released.
The TCEQ, whose chairman and head toxicologist openly question the harmful effects of high ozone, says it reviews all of those reports and investigates roughly one-third of them.
But state records show that’s usually the end of it.
A Tribune analysis of hundreds of state enforcement records shows the commission has levied fines over fewer than 1 percent of emissions events reported during the 2016 calendar year.
That percentage is sure to grow due to a persistent lag time in enforcement — the commission often penalizes events years later and combines multiple unauthorized emissions events into single enforcement orders. But state enforcement records from the past five years show no more than 4 percent of emissions events were penalized with fines.
TCEQ described the percentages as “outdated” in a statement, saying they don’t “account for ongoing investigation and enforcement activities.”
The lopsided emissions-to-fines ratio is especially stark at the state’s natural gas plants, particularly those in West Texas, which flare off tens of millions of pounds of toxic sulfur dioxide and hundreds of millions of pound of poisonous hydrogen sulfide every year. If the arid West Texas plains weren’t so windy, scientists say there would be far more deaths; even small amounts of hydrogen sulfide can kill people on contact.
The Eagle Ford Shale in South Texas also is a flaring hotspot. But state data indicates that the vast majority of rogue releases happen in fossil-fuel rich West Texas.
The oil and natural gas extraction industry accounted for nearly 83 percent of the state’s unauthorized air emissions in fiscal year 2016, according to the TCEQ’s annual enforcement report; petroleum refineries came in second at more than 11 percent.
The Keystone Gas Plant near Kermit, owned by Dallas-based Energy Transfer Partners, emitted the highest volume of unauthorized sulfur dioxide and hydrogen sulfide of any plant in the state by far from 2012 to 2016 during more than 900 different emissions events. It was fined only once by the TCEQ during that time period, the Tribune’s analysis shows. But that $76,500 fine wasn’t even for an unauthorized air emission — and TCEQ records indicate the plant has only been fined three times since 2006.
A spokeswoman for Keystone, Vicki Granado, said in a written statement, “We continually strive to operate our facilities in the safest and most responsible manner possible and we remain in constant contact with the appropriate regulatory agencies. Safety is our top priority; the safety of our employees, the safety of those who live and work in the area and the safety of the environment.”
Even when the TCEQ does fine companies, environmental and watchdog groups and clean air advocates say the penalties are far below what the law allows and aren’t close to being in proportion to the companies’ profits and the potential public health impacts of the unauthorized emissions.
The companies, they say, save huge amounts of money by delaying maintenance and upgrades that would’ve prevented the emissions in the first place. And knowing the state probably won’t do anything about them means they have no incentive to do so.
Neil Carman, a chemist who worked for a dozen years as an enforcement inspector for TCEQ’s predecessor agency, said companies are reticent to do preventive maintenance work or upgrades because it often requires shuttering plants, which can cost them a lot of money.
“They want to keep running these plants until things break,” said Carman, who now heads the clean air program at the Sierra Club’s Texas Chapter. “TCEQ has been very reluctant to deal with it because industry has been so powerful in this state.”
Gallagher believes Shell could have installed equipment that would’ve guarded against human error and prevented the 2015 incident.
“It might be a big process to get it done but you can get it done; Shell can do it,” he said.
Shell’s parent company, Royal Dutch Shell, brought in $233.6 billion in revenue the year the TCEQ fined the Deer Park complex a mere $25,000 for the butadiene release.
Asked about the size of the fine, TCEQ spokeswoman Andrea Morrow said via email, “Penalties are calculated in accordance with the commission’s penalty policy” and that “several factors can influence a penalty, including, but not limited to: the documented impact the violation has on human health or environmental receptors.
“To characterize TCEQ’s environmental enforcement as ‘hands off’ is patently untrue and misleading to the public,” Morrow said, responding specifically to accusations by environmental groups.
But environmental groups say TCEQ’s approach clearly isn’t working because the same plants are exceeding their air permit limits over and over again.
Shelley, the former Air Alliance Houston executive director who now oversees the Texas office of the government watchdog group Public Citizen, said TCEQ’s enforcement of unpermitted emissions is so lax that it raises the question of why the government even tries to limit them.
“We can require permits, but if the company is going to claim [that unpermitted emissions are unavoidable] as a matter of course and the state isn’t going to challenge it in 95 percent of cases — and it’s probably even more than that — then what does it matter?” Shelley asked.
Shelley said advocates are not asking for zero emissions: “We would love it if they’d just follow their permits.”
Little action from EPA on rogue emissions
The TCEQ’s annual enforcement report suggests that the agency’s goal is to coax companies into compliance rather than hammer them with big fines. Violation notices, issued when the agency is aware a violation may have occurred, are often “enough to encourage compliance, thereby halting possible damage to the environment,” according to the report, which says the agency issued violation notices 154 times in fiscal year 2016, which ended Aug. 31. That’s out of the 3,289 emissions events the agency says occurred during that period — or one violation notice for every 21 events. (Totals do not account for air emissions that occur during planned — as opposed to unplanned — startup, shutdown and maintenance, for which the state now requires permits.)
And any penalties assessed are not necessarily what companies end up paying; the agency routinely reduces fines when companies pay on time and promptly address issues the TCEQ flagged.
A spokesman said payment deferrals “may be offered to expedite settlement and achieve a quicker return to compliance.”
Some agency critics and observers say the agency’s lukewarm enforcement stems from political and financial constraints.
“They just do not have the staff,” said Harvey Jeffries, an atmospheric chemistry consultant who worked closely with the TCEQ in the early 2000s on a federally-mandated plan to reduce ozone levels in Houston.
Jeffries, who is currently working for a Houston-based industry group, said agency employees were reticent at the time to do anything to challenge the three commissioners who oversee the agency and are appointed by the governor.
The Legislature has cut funding to TCEQ in recent years, requiring it to downsize. But with a $456.3 million annual operating budget and 2,780 employees, it’s still among the largest state environmental regulatory agencies in the country behind those in New York and California.
(A spokesman said, “Reductions have not impacted TCEQ’s core functions,” including enforcement.)
Eric Groten, an Austin-based industry lawyer, said the state’s “main concern, I think, is getting people to comply as opposed to getting people to pay penalties.”
The EPA is more focused on fines, he said. But environmental groups say the federal agency has failed to pick up the TCEQ’s enforcement slack.
Toward the end of the Obama administration, the EPA ordered Texas and dozens of other states to overhaul policies allowing industrial polluters to avoid penalties if they can prove unplanned air emissions are unavoidable — acts of God. The order came after a federal court found that such affirmative defenses violate the federal Clean Air Act.
Some clean air advocates say the EPA's final rule, which is in effect but facing a legal challenge, could lead to more stringent enforcement of excessive rogue releases. (Some states, including conservative Arizona, have already complied.)
But even if the rule survives, environmental groups acknowledge it won’t mean much if the state doesn’t take advantage of it.
Texas Attorney General Ken Paxton promptly sued to block it, as did former Oklahoma Attorney General Scott Pruitt — who was recently tapped by President Trump to head the EPA.
“They could’ve blown up the whole damn plant”
Even though the 2015 incident at Shell Deer Park could have been catastrophic, it flew under the radar.
No one died, so the federal government never got involved. Nearby neighborhoods weren't ordered to shelter in place. Local media reports — all relatively short — came days later.
“We are aware of the significance of this event,” Shell said in a written statement. “We are grateful to our employees – the operators and emergency personnel – who responded to the incident that day and prevented the release from having a much larger impact to our workers and the community.”
The TCEQ’s action against Shell after the incident was one of the agency’s more stringent responses that year to unauthorized air emissions — appropriate given its severity.
But former TCEQ employees and environmental compliance experts who reviewed documents detailing the TCEQ’s response at the Tribune’s request said it still was inadequate given how bad things could’ve been.
A few days after it happened, an investigator from the TCEQ’s regional office conducted a one-day, on-site probe. The agency later determined the event constituted an excessive emissions event caused by human error — operators had failed to close two isolation valves. That set the stage for the $25,000 fine and corrective action.
“Chicken feed,” said Gallagher, the former Shell employee, noting that the amount of butadiene lost was likely worth far more than that.
The agency says it was the most it could fine the company for violating its air permits under state law, which imposes a $25,000 cap on civil and administrative penalties assessed for air permit violations.
But some interpret the law differently.
Carman of the Sierra Club said the TCEQ could’ve — and should’ve — fined Shell $25,000 for every highly reactive volatile organic compound (HRVOC) released that day: five in all, including the butadiene.
That’s because state law limits the amount of HRVOCs that Houston area plants can emit to 1,200 pounds per hour and all of those released during the incident exceeded that amount.
The state also imposes an annual limit on HRVOC emissions that the plant exceeded that day. TCEQ could’ve fined the company for that, too, Carman said.
“Why are they letting them off the hook so cheaply?” he asked. “They could’ve blown up the whole damn plant.”
But that’s not how it works, said Morrow, the TCEQ spokeswoman. “Emissions events are evaluated and penalized based on the total emissions,” she said. “Penalties are not assessed for each individual pollutant released during an emissions event.”
Rock Owens, who oversees environmental cases for the Harris County Attorney’s Office, said the TCEQ invokes the state’s administrative code when taking enforcement action against polluters. That is different than the civil code, which he invokes when doing the same thing. But he said both provisions contain almost identical language, meaning the TCEQ could have cited Shell for six violations at $25,000 each for a maximum of $150,000 — “but they chose not to do so.”
The attorney general's office has interpreted the law this way before, Carman said.
After the 2005 explosion at BP’s Texas City refinery that killed 15 people, he recalled that the office invoked state pollution laws to get BP to pay $50 million for 72 different pollution events.
That means “they got $694,444.44 per event on average by fining BP for separate pollutants rather than lumping them all together,” Carman said.
It was only a fraction of the billions in federal fines and settlement costs the company already was facing.
“What TCEQ and the AG did was basically to pile onto BP,” Carman said. It “showed what authority the TCEQ has, but they rarely use it against big polluters.”
The Legislature increased the maximum administrative penalty the TCEQ can hand down for air violations to $25,000 from $10,000 in 2011 after the Texas Sunset Advisory Commission found that the lower amount hindered the agency’s enforcement efforts. Environmental groups say it would be enough if TCEQ fined every emissions event that much.
The TCEQ also has the authority to levy an additional “economic benefit” penalty worth 50 percent of the total amount a company saved by not addressing an issue that led to an emissions event.
In the past five years, state enforcement records indicate the TCEQ has fined Shell Deer Park some $860,000 for emissions events dating back to 2010 at the complex’s refinery and chemical plant. Penalties range from $7,500 to $400,000 — the latter fine covered two major emissions events, one of which lasted 15 days.
Many of the TCEQ enforcement orders cover multiple emissions events. One approved in 2008 that assessed a $345,744 fine to Shell Deer Park covered 44 of them; it came about 10 months after environmental groups sued the company over persistent unauthorized emissions, citing inaction by state and federal regulators.
Owens said he believes that’s due to company lawyers pushing TCEQ to take action on multiple violations as soon as possible; once an administrative order is approved and companies pay a fine, they can no longer be civilly or criminally charged.
As part of its response to the 2015 incident, the TCEQ required Shell to execute a “corrective action plan” that consisted largely of overhauling procedures and conducting “refresher training” for plant operators.
The only maintenance-related requirement called for the installation of seals in piping to block the flow of chemicals between tanks — something representatives from several different industrial engineering companies said probably cost the company a few thousand dollars at most.
That “begs the question why it took a massive release of a dangerous chemical for the company to make what seem like easy and small improvements,” said Ilan Levin, associate director of the Washington D.C.-based Environmental Integrity Project, a nonprofit environmental watchdog group that closely tracks rogue air emissions at Texas industrial facilities.
Gallagher said the seals could have prevented the 2015 incident, but that they are an insufficient fix because someone still could accidentally open them: “A door, not a wall,” he said.
Shell declined to say how much it cost to implement the corrective action plan. The company also declined to say why it didn’t install the seal in the first place but said in a statement that “the top priority of Shell Deer Park is to operate in a safe and environmentally sound manner. As such, we are committed to investigating serious incidents and near misses at the site to understand all causes to drive learning, develop corrective actions and implement improvements across our company.”
The company declined to confirm or comment on Gallagher’s statements, although it said no one was fired in connection with the incident.
Gallagher, who for much of his time working for Shell served on an internal panel that investigated such accidents, is on a union grievance list to get his job back. He said he wants to return to clear his name and make sure the company has addressed the problems that led to the 2015 incident.
“For 22 years, I was a good Shell employee,” he said. “I cannot leave all of this undone. Somebody is going to get killed one of these days if they continue in the modes they are.”
Are upsets preventable?
While some emission events may be truly unavoidable, dozens of experts interviewed for this story — including scientists, lawyers, environmental and watchdog groups and former TCEQ and EPA officials — say they occur so often that there’s no way that all, or even most, of them really are.
“The argument is that this is all unpreventable, but that’s a lot of kabuki mumbo jumbo because there are plants where it just happens over and over and over and the releases are very substantial but you see almost no response,” said Eric Schaeffer, who headed the EPA’s Office of Civil Enforcement from 1997 to 2002 before founding the Environmental Integrity Project.
But industry defenders say there will always be unauthorized air emissions from unplanned events — power outages or shutdowns prior to hurricanes, for example — and that it’s difficult to permit or otherwise account for them.
Jeffries, the atmospheric chemistry consultant, said “it’s almost impossible to make it go away.”
Every accident is due to human error, and the only way to reduce them is through better management and more thorough training, he said.
“It’s like trying to get people to drive safe,” he said. “It’s a human problem. It’s a problem in managing complex systems.”
Groten, the industry lawyer from Austin, said industrial malfunctions are inevitable and regulators are correct to accept companies’ explanations for them.
“Our entire system of government, to some extent, depends on the assumption that most people are honest,” he said. “There’s the ability to screen and catch those that aren’t.”
Companies identified as top emitters of pollutants that scientists and public health experts say are the most damaging to human health and the environment (sulfur dioxide; 1,3-butadiene; benzene; hydrogen sulfide; nitrogen oxide and particulate matter) either said that they were working to reduce unauthorized emissions, that they had already done so, or that their ranking was attributable to their size or a single, large event — like the one at Shell Deer Park in 2015.
A few attributed their ranking to reporting errors; A spokeswoman for Occidental Petroleum Corporation said the emissions total for one of its facilities was inaccurate because the TCEQ had failed to update the online database with a revised report.
[View statements from companies responding to the Tribune’s analysis.]
Worry over possible health effects
Frustrated with the unwillingness of state and federal regulators to punish polluters, environmental groups have increasingly turned to the courts. Judges have proved willing to impose substantial fines — and the companies getting sued often show they can dramatically cut their unauthorized emissions.
In 2010, the Sierra Club and Environment Texas sued ExxonMobil in federal court under a provision of the Clean Air Act that allows citizens to sue polluters when state or federal environmental regulators have failed to act, alleging the energy giant had spewed 8 million pounds of unauthorized air pollution from its Baytown complex over a five-year period.
In April, a federal judge — whose earlier decision favoring Exxon was vacated by a conservative-leaning appeals court — ruled that the energy giant should pay nearly $20 million for emitting 10 million pounds of unauthorized pollution from the compound between 2005 and 2013.
Exxon says it is considering appealing the decision.
“As the court expressed in its decision, ExxonMobil's full compliance history and good faith efforts to comply weigh against assessing any penalty,” ExxonMobil spokesman Todd Spitler said in a statement. “The court also recognized that none of the events in question actually or potentially harmed public health or the environment."
In the past decade, the Sierra Club and Environment Texas have won multimillion-dollar settlements with other energy giants, including Shell and Chevron Phillips, for unauthorized pollution at Houston-area refineries and chemical plants.
The settlements required mandatory emissions reductions and plant upgrades at Shell Deer Park’s oil refinery and chemical plant and Chevron Phillips’ Cedar Bayou chemical plant. Within years, the companies had slashed major unauthorized emissions at those facilities by some 95 percent.
Washington-based environmental lawyer Matthew Morrison, a former EPA lawyer, expects citizen and environmental groups to file even more lawsuits against big polluters under the Trump administration.
Responding to those suits, he said, “may leave many companies longing for the days when they at least had some sense of consistency and expertise in their federal and state regulators.”
The plaintiffs in the already litigated cases who live near the facilities have testified about their continual fear of illness and industrial accidents that could lead to explosions or hazardous chemical leaks.
One of them was Marilyn Kingman, who moved from Baton Rouge to Baytown with her husband 40 years ago and quickly decided against buying a home just north of ExxonMobil’s sprawling refining and petrochemical complex.
It was a relatively posh area, right next to the country club, but Kingman says, “When we got out of the car the odor was so strong, I looked at my husband and said ‘We can’t live here.’”
Kingman, who ended up moving to another part of town, says she can’t help but wonder if the constant exposure to such pollution is connected to the numerous health problems she’s seen or personally experienced over the years: Kingman and two of her neighbors were diagnosed with breast cancer within years of each other; her son’s asthma worsened, requiring biweekly shots; and two of their dogs died from cancer.
“As far as I’m concerned, it’s a cancer belt,” Kingman said of the area, about 25 miles east of Houston.
In court, Kingman didn’t talk much about those health problems.
That’s because it’s difficult to draw a firm causal connection between a particular health problem and a particular plant or pollutant, she said, and the Exxon complex is one of many in the area.
But Dr. Arch Carson, a toxicologist at the UT School of Public Health who also heads the school’s occupational and environmental medicine residency program, said, “All other things being equal, there’s no question that people who live closer to industrial facilities have higher rates of cancer” and other health problems associated with air pollution.
In recent years, the TCEQ has quietly weakened the air pollution guidelines it uses to evaluate the health and environmental risks posed by certain toxic air pollution even though they already were among the weakest in the nation.
The people most directly impacted by industrial air emissions are, of course, those who live closest to the plants — “fenceline communities,” which tend to be low-income and minority.
Hilton Kelley, a longtime environmental justice advocate in Port Arthur, has spearheaded various air monitoring initiatives over the years, but he says the state has no interest in the samples and doesn’t seem to want to take any of its own.
“We’ve been pushing for 17 years for fenceline monitoring. Can’t get the state to do it, can’t get the Environmental Protection Agency to do it — not on a consistent basis, anyway,” he said, noting that cancer and respiratory illnesses — particularly among children — have run rampant in the Beaumont/Port Arthur area for decades.
“We have the bodies to prove that something is going on,” he said, “enough to warrant some kind of cumulative impact study that nobody wants to do.”
In 2006, Kelley helped organize a group of residents living in a public housing complex on the periphery of ExxonMobil Baytown after the apartments were “enveloped in a sticky mist containing process gas oil, which vented from one of the refinery’s nearby tanks,” according to a report in The Baytown Sun. (The company defended its response to the incident.)
Kelley said they pleaded with the local housing authority to help relocate them, but nothing ever happened.
“We’re just a sacrifice for the rest of the world to have gasoline and other petroleum products,” he said.
Reporting for this story was supported by a grant from the Society for Environmental Journalists. BP and ExxonMobil have been financial supporters of The Texas Tribune. View a complete list of Tribune donors and sponsors.
Design and production by Emily Albracht and Ryan Murphy. Additional research by Jackie Wang.
About the data
The Texas Tribune’s analysis of unauthorized air pollution is based on data collected from the Texas Commission on Environmental Quality’s Air Emission Event Report Database. The database contains reports that industrial facilities must file with the state when they emit unauthorized air pollution during malfunctions or unplanned maintenance events. The TCEQ often does not verify the information contained in these reports.
The Tribune collected reports filed between 2012 and 2016. Five-year pollutant totals and 2016 analyses are a reflection of reports contained in that database as of April 1, 2017.
The Tribune’s analysis of state enforcement data uses data sourced from the TCEQ’s Issued Orders/Enforcement Database. This data does not include pending enforcement actions.
Pollutant summaries are sourced from the following: Centers for Disease Control and Prevention; Occupational Safety and Health Administration; National Institutes of Health; Environmental Protection Agency; and the Agency for Toxic Substances and Disease Registry.