Citgo Fined $19M for 2006 Spill of 54,000 Barrels of 'Slop Oil' Into Louisiana River

Citgo Petroleum Corp. will pay $19.7 million for a 2006 spill in Louisiana, the Department of Justice announced Thursday.

The Houston-based company was sued by the United States and the state of Louisiana for money damages to natural resources caused by a major oil discharge from its refinery in Lake Charles into nearby waterways.

"At least 54,000 barrels of slop oil (2,268,000 gallons) and untold millions of gallons of oily wastewater breached the faulty secondary containment berm around the tanks and flowed into the waterways, including the adjacent Indian Marais waterway, the Calcasieu River and the Calcasieu Estuary," the Justice Department said in a press release.

Approximately 150 miles of shoreline were polluted by the incident, including residential and marsh areas, and forced the ship channel to close. Birds, fish and other aquatic life were killed by the oil discharge.

Federal and state trustees will use $19.18 million of the $19,688,149.83 paid out by Citgo for restoration projects to compensate for the harms caused by the 2006 oil spill.

Officials said the settlement sends a message that those who pollute the environment will be held responsible.

"Oil companies have a responsibility to protect our waters, people, wildlife and diverse habitats from oil spills, and those who violate that duty will be held accountable for the harms they cause," Jean Williams, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division, said in a statement.

In a statement, Citgo said it was "pleased to reach this voluntary settlement" and to provide $19.16 million to fund the environmental restoration planning and projects.

"Protecting our natural resources is a core value for the Company," the company said. "We promptly responded to the spill, invested significant resources to implement early restoration, and assisted the Trustees with evaluating the impacts.

"Additionally, we made significant improvements in our plant, policies and procedures to prevent this type of event from happening again. We understand it is a privilege to operate in our communities, and we will continue working to ensure our operations are safe for our people and our environment," the statement said.

CITGO Fined $19M For 2006 Spill
Smoke and fire billow from a chimney on August 14 at the Citgo Petroleum Corp.'s Lemont oil refinery in Romeoville, Illinois. Citgo will pay $19.7 million for a 2006 spill in Louisiana, the Department of Justice announced Thursday. Tim Boyle/Getty Images

In a previous trial brought by the U.S. Environmental Protection Agency, a Louisiana federal judge found the cause of the 2006 spill was CITGO's "gross negligence" in the operation and maintenance of its treatment facility in Lake Charles. The improper operation and inadequate storage caused the tanks at the refinery to overflow during a rainstorm.

At the height of its response to the spill, CITGO deployed 1,500 and 60 miles of boom, vacuum trucks, skimmers and other cleanup equipment—according to court documents. But the court said the initial response was "slow and lacking" and the company failed to inform the Coast Guard of the "true nature" of the incident.

The company was ordered to pay a federal penalty of $81 million for violating the Clean Water Act.

"Citgo is guilty of prior violations and does not appear to have recognized the importance of compliance, pollution control, environmental responsibility, and the overall duty imposed on businesses to operate safely," U.S. District Judge Richard Haik Sr. wrote at the time.

Updated (6/18/2021, 9 a.m. EST): This story has been updated to include a statement from Citgo.