3 Oil Firms Settle S.F. Bay Suit, Will Aid Cleanup

Three oil companies have agreed to pay $4.8 million to help clean the waters of San Francisco Bay, settling a lawsuit that was closely watched by environmental organizations and the federal government.

Announcing the settlement Wednesday on San Francisco’s waterfront, environmental groups said it was a victory for the inlet and for citizens groups seeking to force compliance with federal environmental laws.

“Today we turn a corner on the cleanup of our bay,” said Greg Karras, a scientist with Communities for a Better Environment, the group that led the legal battle against Exxon USA, Tosco and Unocal.

The settlement resolved a citizens lawsuit filed in federal court in 1994 by Communities for a Better Environment, the Save the San Francisco Bay Assn., BayKeeper and the Bay Institute.

In 1991, the San Francisco Bay Area Regional Water Quality Control Board, a state agency, charged the three firms with discharging unacceptable levels of selenium, a toxic byproduct of oil refining.

The board ordered the companies to cut selenium discharges 85% and gave them a 1993 deadline. The firms, in turn, sued the water board, arguing that it would cost too much to take selenium out of their refineries’ waste water and that they could not meet the deadline.

In early 1994, the board settled with the oil companies, deferring enforcement of the discharge limits at least until July 31, 1998. The firms, in return, paid $780,000 into a bay cleanup fund managed by the board.

Environmental groups denounced the settlement as a sweetheart deal, meant to cut off the possibility of citizens groups suing the companies for violating pollution standards. They sued the oil companies in federal court to immediately cut their selenium discharges and to pay penalties that federal law says could be as high as $25,000 daily for every day the firms violated the limits.

The companies argued that the case should be dismissed because the Clean Water Act says that neither citizens groups nor the federal government can sue alleged polluters if a state regulatory agency has already assessed penalties. The firms said their $780,000 payment to the water board was a penalty.

But U.S. District Judge Thelton Henderson of San Francisco ruled that the payment was not a penalty and that the citizens could sue. The 9th Circuit U.S. Court of Appeals upheld his decision, and the U.S. Supreme Court let that ruling stand in January 1997. The Clinton administration filed briefs on behalf of the environmentalists in the case and praised the settlement Wednesday.

“From the point of view of the Environmental Protection Agency, it was important to support the citizens on this,” said EPA attorney Laurie Kermish.

She said the government was pleased that the citizens proved their right to sue and that the companies had cut their discharges of selenium to levels acceptable under federal standards.

In the settlement, Unocal agreed to pay $3.8 million to the San Francisco Foundation. Exxon USA agreed to give the Rose Foundation for Communities and the Environment $900,000, and Tosco agreed to pay $100,000 for other bay cleanup efforts.

But Exxon spokesman Fred Newhouse denied Wednesday that the firms and water board ever had a sweetheart deal.

“We needed time to develop technology as well as to design and construct facilities in order to meet the requirements of the board,” Newhouse said. He said Exxon has spent about $14 million developing a method for extracting selenium from its waste water before discharge into the bay, and is now in compliance with selenium limits.

“We are glad we could settle this thing,” Newhouse said.

Speaking for Tosco, David Kory said the company had spent $20 million and developed a new technology it hopes to patent for taking selenium out of oil.

The three firms are now in compliance with the water board’s requirements to cut their selenium discharge levels, according to Wil Bruhns, the board’s chief engineer.