Names In the News

Polluters’ Playground

The report, “Polluters’ Playground: How the Government Permits Pollution,” describes many shortcomings in the monitoring of water pollution and efforts to deter polluters.

“It is outrageous that the Bush Administration is proposing to slash enforcement budgets when more than one in four polluting facilities are breaking the law,” says U.S. PIRG Environmental Advocate Richard Caplan. “We need clean water now, and we have to start by requiring polluters to obey the law.”

The report analyzed the behavior of major facilities nationwide by reviewing violations of the Clean Water Act between October of 1998 and December of 1999, recorded in the EPA’s Permit Compliance System database.

The report found that 159 major facilities were in Significant Non-Compliance (SNC) during the entire 15-month period.

Of the 42 industrial facilities in SNC for the entire 15-month period, EPA records indicate only one received a fine over the past five years.

Big Oil: Slowing Supply

Since the mid-1990s, oil companies may have acted to suppress refinery capacity and control gasoline supply in an effort to drive up gasoline prices and boost profit margins, according to a report released in June by Senator Ron Wyden, D-Oregon.

The report is based on internal oil company documents that raise questions about anti-competitive practices among leading oil companies, Wyden says.

With the industry blaming high gasoline prices on insufficient refinery capacity and costly environmental regulations, Wyden’s report reveals that oil companies may have worked to contrive tight supplies.

“These documents raise significant questions about whether America’s oil companies tried to pull off a financial triple play, boosting profits by reducing refinery capacity, tagging consumers with higher pump prices and then arguing for environmental rollbacks and additional financial incentives,” says Wyden.

In memos detailed in the 11-page Wyden report, oil companies articulate a desire to reduce oil and gasoline supply. One document from Texaco reads, “Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline in order to increase prices and grow profit margins.”

Oil company competitors also discuss mutual opportunities to control oil and gasoline supply, thus keeping markets tight. In one case, a Mobil document concerning an offline small refiner in California states, “Needless to say, we would all like to see Powerine [an independent refiner] stay down. Full court press is warranted in this case.”

“I started investigating high gas prices in Oregon back in early 1999, and in the two years since, it’s become clear that America’s gasoline crunch is much more than a simple case of supply and demand,” Wyden says. “This report raises more serious questions about whether anti-competitive and anti-consumer practices are keeping the markets from working the way they should — and hurting American consumers in the process.”

In 1999, Wyden first launched his own investigation into possible antitrust violations in the oil industry. His 1999 report was the initial basis for a Federal Trade Commission investigation and revealed anti-competitive gas pricing in the Pacific Northwest.

Wyden’s probe showed that the industry engages in zone pricing and discrimination against independently owned gas stations.

Earlier this year, at a hearing of the Consumer Subcommittee of the Senate Commerce Committee, Wyden introduced another oil company memo revealing ARCO’s intent to “keep the West Coast market tight” by exporting gasoline to Asia.

Wyden is calling for a ban on exports of Alaskan North Slope crude oil.

$1B Award Against Exxon

A New Orleans jury in May ordered ExxonMobil Corp. to pay a retired Louisiana judge and his family $1 billion for contaminating their land with radioactivity.

The jury ordered Exxon to pay $56 million to clean up the 33-acre site, $145,000 for lost property value, and $1 billion in punitive damages to former Jefferson Parish District Judge Joseph Grefer and his family.

“The jury sent a clear message to Exxon in particular and the oil industry in general that these radioactive materials should and must be cleaned up immediately,” said Stuart Smith, the lawyer who represents Judge Grefer and his family. “Evidence in the record indicates that this is a widespread problem affecting oil fields throughout the United States.”

The Grefers’ land was leased from the late 1950s until 1992 to Intracoastal Tubular Services, a company contracted to clean Exxon’s pipes.
Intracoastal was found 15 percent at fault for the contamination, but the jury ruled ExxonMobil should pay its share because only the oil giant could have known that the crust being cleaned from the pipes was radioactive.

Exxon said justice was not done and that it will appeal the verdict.

— Russell Mokhiber