2020 Environmental Real Estate Issues

The Environmental Protection Agency (EPA) uncovered several violations of the Clean Air Act (CAA) when it investigated a 2017 explosion that killed three workers, injured seven others, and “launched a 100,000-gallon tank into the air and over a six-story building before it landed on mill equipment 400 feet away.”

Failure to Follow “Hot Work” Procedures
The US Department of Justice (DOJ) and the State of Louisiana filed a Complaint and Stipulation of Settlement on September 28, 2022. That same day, DOJ issued a news release announcing the settlement. The Complaint alleges the company “failed to ensure that non-condensable gases were drained and purged” from a tank prior to allowing workers to perform “hot work” (welding and cutting) above it. This failure was a violation of industry standards and the company’s Hot Work Permit Procedure, and thus a violation of the “general duty clause” in the CAA, section 112(r).

General Duty to Prevent Releases
Section 112(r) requires facilities handling “extremely hazardous” or “regulated substances” to “identify hazards” and “design and maintain a safe facility taking such steps as are necessary to prevent releases, and to minimize the consequences of accidental releases which do occur.” EPA generally asserts, and alleged in this case, that a facility’s failure to follow industry standard and its own Hot Work Permit Procedures violates section 112(r).

For the violations EPA found, the company agreed to pay a $2.5 million penalty, with 27.27% paid to the State and the remaining to the federal government. The settlement is subject to a 45-day comment period before the judge can approve it.

To see the news release, which includes a link to access the Complaint and Stipulation of Settlement https://www.justice.gov/opa/pr/containerboard-manufacturer-will-pay-25-million-violating-clean-air-act-its-louisiana-mill