EPA reaches historic $4.2 million settlement over 2019 South Philly refinery explosion and fire

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More than five years after the massive fire that shuttered the Philadelphia Energy Solutions refinery, the U.S. Environmental Protection Agency has reached an agreement with the bankrupt refinery operator to settle its last remaining violation of the Clean Air Act related to the incident.

The $4.2 million agreement is the largest penalty the EPA has levied for a single incident under a section of the law that requires safe management of hazardous substances, officials said.

“The PES facility is right in people’s backyards,” said Tom Cinti, an attorney at the EPA. “It was just by the grace of God that no one was seriously injured here.”

The mostly vacant 1,300-acre site in South Philadelphia where the refinery once stood now bears no traces of the early morning fire and series of explosions that sent plumes of flames into the sky, shaking homes and startling nearby residents awake. The explosion and subsequent bankruptcy brought to an end more than 150 years of oil refining and its history of pollution in South Philadelphia. Cleanup of the site is ongoing, and a new warehousing complex has begun to sprout on its southern end.

But former refinery workers still remember fearing for their lives as the fire burned in a refinery unit that handled ​​deadly hydrofluoric acid. A worst-case-scenario leak of the toxic chemical could have affected over a million people.

An investigation after the fire revealed the cause was a rupture of a 90-degree piece of pipe known as an “elbow” that had thinned beyond the point when it should have been replaced.

The settlement the EPA announced Tuesday resolves the agency’s claims of violations surrounding maintenance of this equipment. The EPA alleges the former refinery operator failed to make sure the hydrofluoric acid unit was “designed, built, and operated in accordance with recognized and generally accepted good engineering practices.”

“They did not ever check that elbow in some 40-some years,” Cinti said. “They should have checked every element in that unit at some time, and that elbow was never checked.”

In the proposed agreement, PES — via the bankruptcy trust distributing its assets — does not admit fault, but rather denies it violated any of the cited federal statutes and regulations. An attorney representing the trust did not immediately respond to a request for comment, but signed the proposed settlement.

The settlement money will go to the U.S. Department of Treasury. EPA officials acknowledged that means it will not directly benefit the communities that for years lived in the shadow of the refinery’s pollution and were put in danger during the 2019 incident.

“That’s federal law,” Cinti said.

But EPA officials hope the settlement will serve as a deterrent to other industrial operators, particularly on the East Coast near densely populated areas. They also hope it sends a message to financial lenders that back facilities like PES, that they need to do their due diligence, or lose money.

“There are people who loaned PES money, who fronted them cash, who never said, ‘Are you in environmental compliance?’” Cinti said. “Now they’re fighting with us for whatever money is going to be put in that liquidating trust, and we just now peeled out $4.2 million dollars.”

The proposed settlement is open for public comment for 30 days before it could be finalized.

Meanwhile, the site’s new owner, HRP Group, is moving forward with development of a complex known as The Bellwether District — a planned warehousing and logistics hub and a life sciences campus focused on manufacturing and R&D.

The activist group Philly Thrive, which called for the refinery to remain closed after the fire, has continued to push the site’s new owner to give residents a greater say in the redevelopment plans.

HRP Group is currently negotiating a community benefits agreement with other nearby stakeholders. The terms being considered have not yet been made public.