Chevron Consents to Pay $8-Million Fine : Environment: The company agrees to plead guilty to 65 violations related to dumping oil and grease into the Pacific Ocean.

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Chevron U.S.A. agreed Monday to pay an $8-million fine for violating the federal Clean Water Act by repeatedly dumping excessive amounts of oil, grease and other toxic wastes off the coast of Ventura County during the 1980s.

If accepted by a federal judge in Los Angeles, the fine would be the third largest criminal penalty assessed against a company for violating environmental statutes, officials said.

Under the terms of the settlement, Chevron agreed to plead guilty to 65 misdemeanor violations of the Clean Water Act from 1982 to 1987, said Assistant U.S. Atty. Gary S. Lincenberg.


The violations took place on one of Chevron’s oil drilling platforms in the Santa Barbara Channel, platform Grace, located 12 miles southwest of Ventura. The company knowingly and repeatedly discharged illegal amounts of oil and grease into the Pacific Ocean and tried to cover up the illegal dumping, Lincenberg said.

As part of its settlement agreement with the government, Chevron will pay $6.5 million in criminal fines and another $1.5 million in civil penalties, he said.

“We’re very happy,” Lincenberg said. “This is the third largest environmental fine ever. We got everything that we wanted.”

A U.S. District Court judge will be selected next week to hear the settlement agreement, said Lincenberg, one of four federal prosecutors who oversaw the four-year criminal investigation.

The judge is expected to review the agreement within the next 60 days, Lincenberg said. Chevron President Raymond Galvin will be required to personally appear to enter the guilty pleas, he said.

“We are extremely embarrassed and disappointed by this,” said Chevron spokesman Michael Marcy.


“We have learned a very painful and expensive lesson,” Marcy said. “And we are determined to do everything in our power to make sure something like this never happens again.”

All operating deficiencies on platform Grace have been corrected since October, 1987, Marcy said. Chevron has eight platforms in the Santa Barbara Channel, but only half are operational. The remaining four have long ceased operations and are in the process of being dismantled.

Marcy said platform Grace began oil pumping operations in 1982. He said it was a year later before officials realized that the platform’s waste-water treatment system was not working properly.

He said the system failed to adequately treat waste water that had been mixed with crude oil when it was pumped before dumping the water back into the ocean.

Maggie Hooper, an environmental engineer with the agency, said there was no specific evidence that the oil and grease discharges had caused any significant environmental damage.

Hooper said she inspected the platform last month and found no operating violations on the rig. Hooper said the rig had been inspected each year from 1984 through 1987, but that no operating violations were found until the 1987 inspection.


Lincenberg said a platform worker, Scott McDonald, who was later fired, had informed federal officials in late 1986 that waste water was not being treated or tested properly before being discharged into the ocean.

“This is a case where we have a company lobbying hard to be able to drill offshore, then when it gets the right to do it--not acting responsibly,” Lincenberg said.

Chevron workers tried to cover up the illegal discharges by routinely diluting contaminated water with seawater before testing its toxicity before dumping, the prosecutor said. The test results were included in the company’s quarterly reports to the EPA about its rig operations.

“They would dilute the water before they tested it, so it would skew their test results,” Lincenberg said. “So the magnitude of the problem wasn’t known.”

Hooper said that on occasion Chevron would report incidents of excessive discharges of oil and grease to the EPA, but that such reports were sporadic.

“It took us awhile to establish a pattern,” she said.

Marcy said his company had continually worked to correct the excessive discharges. He said in 1987 that the company finally installed a special charcoal-filtering system that solved the problem.


But Lincenberg said the company had developed the filtering system in 1984 and didn’t install it because it was too expensive.

“So to save money they didn’t use the only treatment system that was effective,” he said.

Lincenberg said Chevron committed other dumping violations. He said grit and paint left over from sandblasting the rig for repainting was often dumped in the ocean instead of being barged ashore and disposed of properly.

Hooper said it was only in the last three years that a policy was established ensuring that offshore rigs would be inspected twice a year to prevent similar problems.

Lincenberg compared the Chevron settlement to the record fine of $125 million paid by the Exxon Corp. for environmental damage caused by the massive oil spill from the Exxon Valdez tanker in Alaska’s Prince William Sound in March, 1989.

He said the second largest settlement with the federal government occurred March 25, when Rockwell International agreed to pay $18.5 million and to plead guilty to illegal disposal of radioactive waste and environmental contamination that forced the 1989 shutdown of its Rock Flats nuclear weapons site outside Denver, Colo.