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Oil and Gas
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Areas of Expertise :
Oil And Gas, Environmental Engineering, Industrial Engineering, Petroleum, Wildlife
Published Date:
Last Modified Date:
Jurisdiction:
Federal. Fifth Circuit
In United States v. CITGO Petroleum Corp., federal prosecutors brought Clean Air Act (CAA) charges against CITGO Petroleum Corporation and CITGO Refining and Chemicals Company, L.P., along with Migratory Bird Treaty Act (MBTA) charges against CITGO Refining and refinery environmental manager Philip Vrazel. The charges arose from operations at CITGO’s refinery in Corpus Christi, Texas. The CAA counts included two benzene-related charges and two charges involving uncovered equalization tanks known as Tanks 116 and 117. Inspectors found approximately 130,000 barrels of oil floating above wastewater in the tanks, and prosecutors alleged that CITGO was operating them as oil-water separators subject to emission-control requirements under EPA regulations governing volatile organic compound emissions. The MBTA counts concerned bird deaths associated with the tanks. The appellate record catalogued remains from 35 birds, while the indictment separately alleged that ten birds were found in Tanks 116 and 117 between April and May 2003. After a nonjury trial, the district court found CITGO Refining and Chemicals Company, L.P., guilty on three of the five MBTA counts, while Vrazel was acquitted on all five counts.
In September 2015, the U.S. Court of Appeals for the Fifth Circuit reversed CITGO’s remaining convictions and directed the district court to enter judgments of acquittal. On the Clean Air Act counts, the court concluded that Tanks 116 and 117 did not meet the Subpart QQQ definition of an oil-water separator because they lacked several listed structural components. The court also determined that the jury instruction incorrectly allowed the tanks’ operational use alone to establish their regulatory classification. On the MBTA counts, the Fifth Circuit held that the charged act of “taking” migratory birds required deliberate conduct directed at birds and did not cover omissions or commercial activity that indirectly and accidentally caused bird deaths. The reversal removed the legal basis for the penalties associated with Counts 4, 5, 8, 9, and 10.
Texas environmental inspectors cited CITGO in 1999 for allegedly operating Tanks 116 and 117 as oil-water separators. During the resulting investigation, CITGO maintained that the equalization tanks did not meet the Subpart QQQ definition of an oil-water separator. Texas officials accepted that position and dropped the charges.
During a surprise inspection of CITGO’s Corpus Christi refinery, Texas environmental inspectors discovered approximately 130,000 barrels of oil floating on two uncovered equalization tanks identified as Tanks 116 and 117. Each tank measured approximately 30 feet tall and 240 feet in diameter. Based on the volume of oil present, state authorities concluded that CITGO was using the tanks as oil-water separators. Inspectors cited CITGO under the Clean Air Act because the tanks lacked the roofs required for oil-water separators regulated under Subpart QQQ.
A federal grand jury returned a ten-count indictment against CITGO Petroleum Corporation, CITGO Refining and Chemicals Company, L.P., and refinery environmental manager Philip Vrazel. Counts 1 and 2 alleged violations of the Clean Air Act’s National Emission Standard for Benzene Waste Operations based on benzene quantities in refinery waste streams exposed to the air. Count 3 alleged that the two CITGO entities and Vrazel made false statements concerning benzene-generating points in the refinery’s wastewater system, although the district court later dismissed that count as time-barred. Counts 4 and 5 alleged that CITGO knowingly operated Tanks 116 and 117 as oil-water separators without the emission-control equipment required by 42 U.S.C. § 7413(c)(1) and 40 C.F.R. § 60.692-4. Counts 6 through 10 alleged the unlawful taking, or aiding and abetting the taking, of migratory birds under the Migratory Bird Treaty Act and named CITGO Refining and Chemicals Company and Vrazel.
The jury found CITGO Petroleum Corporation and CITGO Refining and Chemicals Company not guilty on Counts 1 and 2, which concerned the benzene-related allegations. The district court later dismissed Count 3 as time-barred.
Both CITGO entities were found guilty on Counts 4 and 5 for knowingly operating Tanks 116 and 117 as oil-water separators without the emission controls required by Subpart QQQ. Count 4 concerned Tank 116, while Count 5 concerned Tank 117. The charged conduct covered the period from January 1994 through May 2003.
Following a nonjury trial, the district court found CITGO Refining and Chemicals Company guilty on Counts 8, 9, and 10 for taking or aiding and abetting the taking of migratory birds. The superseding indictment alleged that ten birds were found in Tanks 116 and 117 between April and May 2003. Evidence presented during the proceedings indicated that migratory birds were attracted to the open tanks, landed on the oily surface, and died after becoming coated with or ingesting oil.
The district court found CITGO Refining and Chemicals Company not guilty on Counts 6 and 7. Philip Vrazel was acquitted on all five MBTA counts.
CITGO moved to set aside the verdicts on Counts 4 and 5, arguing in part that the jury instruction incorrectly interpreted Subpart QQQ. The instruction stated that an oil-water separator was defined by the way the equipment was used and did not need to contain every component listed in the regulation, including forebays, weirs, grit chambers, and sludge hoppers. The district court denied the motion and concluded that the tanks’ use could bring them within the regulatory definition.
CITGO Refining and Chemicals Company, L.P., moved to vacate its three MBTA convictions. It argued that the statutory term “take” was limited to conduct directed at birds, such as hunting, trapping, or poaching, and did not cover commercial activity that unintentionally caused bird deaths.
The district court denied the motion. It concluded that the MBTA misdemeanor provision imposed strict liability and required the government to establish proximate causation rather than an intent to harm birds. The court determined that CITGO Refining’s operation of the uncovered tanks proximately caused the bird deaths addressed in Counts 8, 9, and 10.
The district court imposed $2 million in combined fines for the Clean Air Act convictions. CITGO Petroleum Corporation received a $500,000 fine on each of Counts 4 and 5. CITGO Refining and Chemicals Company separately received a $500,000 fine on each count.
CITGO Refining and Chemicals Company also received a $15,000 fine for each of the three MBTA counts. Those additional fines totaled $45,000, bringing the combined amount imposed on the two entities to $2.045 million.
The U.S. Court of Appeals for the Fifth Circuit reversed both CITGO entities’ convictions on Counts 4 and 5 and CITGO Refining and Chemicals Company, L.P.’s convictions on Counts 8, 9, and 10. On the Clean Air Act counts, the court held that Subpart QQQ defined an oil-water separator by both its function and its required components. Although Tanks 116 and 117 contained skimmers, they lacked weirs, grit chambers, and sludge hoppers and therefore did not qualify as oil-water separators. The court also found that the jury instruction incorrectly treated the tanks’ function as sufficient for classification. It noted that equalization tanks could fall under Subpart Kb, but the government had not charged CITGO under that provision.
On the MBTA counts, the Fifth Circuit held that “take” was limited to deliberate conduct directed at migratory birds and did not cover omissions or commercial activity that indirectly and accidentally caused bird deaths. The court followed the narrower interpretation used by the Eighth and Ninth Circuits rather than the broader approaches associated with the Second and Tenth Circuits. Because the charges involved taking or aiding and abetting a taking, the court did not determine the full scope of the separate term “kill.” The case was remanded with instructions to enter judgments of acquittal on Counts 4, 5, 8, 9, and 10.
Court:
United States Court of Appeals for the Fifth Circuit
Case Name:
United States v. CITGO Petroleum Corp.
Environmental Compliance
Clean Air Act
Environmental Protection Agency EPA
Water and Wastewater Engineering
Wildlife Management
In United States v. CITGO Petroleum Corp., federal prosecutors brought Clean Air Act (CAA) charges against CITGO Petroleum Corporation and CITGO Refining and Chemicals Company, L.P., along with Migratory Bird Treaty Act (MBTA) charges against CITGO Refining and refinery environmental manager Philip Vrazel. The charges arose from operations at CITGO’s refinery in Corpus Christi, Texas. The CAA counts included two benzene-related charges and two charges involving uncovered equalization tanks known as Tanks 116 and 117. Inspectors found approximately 130,000 barrels of oil floating above wastewater in the tanks, and prosecutors alleged that CITGO was operating them as oil-water separators subject to emission-control requirements under EPA regulations governing volatile organic compound emissions. The MBTA counts concerned bird deaths associated with the tanks. The appellate record catalogued remains from 35 birds, while the indictment separately alleged that ten birds were found in Tanks 116 and 117 between April and May 2003. After a nonjury trial, the district court found CITGO Refining and Chemicals Company, L.P., guilty on three of the five MBTA counts, while Vrazel was acquitted on all five counts.
In September 2015, the U.S. Court of Appeals for the Fifth Circuit reversed CITGO’s remaining convictions and directed the district court to enter judgments of acquittal. On the Clean Air Act counts, the court concluded that Tanks 116 and 117 did not meet the Subpart QQQ definition of an oil-water separator because they lacked several listed structural components. The court also determined that the jury instruction incorrectly allowed the tanks’ operational use alone to establish their regulatory classification. On the MBTA counts, the Fifth Circuit held that the charged act of “taking” migratory birds required deliberate conduct directed at birds and did not cover omissions or commercial activity that indirectly and accidentally caused bird deaths. The reversal removed the legal basis for the penalties associated with Counts 4, 5, 8, 9, and 10.
Texas environmental inspectors cited CITGO in 1999 for allegedly operating Tanks 116 and 117 as oil-water separators. During the resulting investigation, CITGO maintained that the equalization tanks did not meet the Subpart QQQ definition of an oil-water separator. Texas officials accepted that position and dropped the charges.
During a surprise inspection of CITGO’s Corpus Christi refinery, Texas environmental inspectors discovered approximately 130,000 barrels of oil floating on two uncovered equalization tanks identified as Tanks 116 and 117. Each tank measured approximately 30 feet tall and 240 feet in diameter. Based on the volume of oil present, state authorities concluded that CITGO was using the tanks as oil-water separators. Inspectors cited CITGO under the Clean Air Act because the tanks lacked the roofs required for oil-water separators regulated under Subpart QQQ.
A federal grand jury returned a ten-count indictment against CITGO Petroleum Corporation, CITGO Refining and Chemicals Company, L.P., and refinery environmental manager Philip Vrazel. Counts 1 and 2 alleged violations of the Clean Air Act’s National Emission Standard for Benzene Waste Operations based on benzene quantities in refinery waste streams exposed to the air. Count 3 alleged that the two CITGO entities and Vrazel made false statements concerning benzene-generating points in the refinery’s wastewater system, although the district court later dismissed that count as time-barred. Counts 4 and 5 alleged that CITGO knowingly operated Tanks 116 and 117 as oil-water separators without the emission-control equipment required by 42 U.S.C. § 7413(c)(1) and 40 C.F.R. § 60.692-4. Counts 6 through 10 alleged the unlawful taking, or aiding and abetting the taking, of migratory birds under the Migratory Bird Treaty Act and named CITGO Refining and Chemicals Company and Vrazel.
The jury found CITGO Petroleum Corporation and CITGO Refining and Chemicals Company not guilty on Counts 1 and 2, which concerned the benzene-related allegations. The district court later dismissed Count 3 as time-barred.
Both CITGO entities were found guilty on Counts 4 and 5 for knowingly operating Tanks 116 and 117 as oil-water separators without the emission controls required by Subpart QQQ. Count 4 concerned Tank 116, while Count 5 concerned Tank 117. The charged conduct covered the period from January 1994 through May 2003.
Following a nonjury trial, the district court found CITGO Refining and Chemicals Company guilty on Counts 8, 9, and 10 for taking or aiding and abetting the taking of migratory birds. The superseding indictment alleged that ten birds were found in Tanks 116 and 117 between April and May 2003. Evidence presented during the proceedings indicated that migratory birds were attracted to the open tanks, landed on the oily surface, and died after becoming coated with or ingesting oil.
The district court found CITGO Refining and Chemicals Company not guilty on Counts 6 and 7. Philip Vrazel was acquitted on all five MBTA counts.
CITGO moved to set aside the verdicts on Counts 4 and 5, arguing in part that the jury instruction incorrectly interpreted Subpart QQQ. The instruction stated that an oil-water separator was defined by the way the equipment was used and did not need to contain every component listed in the regulation, including forebays, weirs, grit chambers, and sludge hoppers. The district court denied the motion and concluded that the tanks’ use could bring them within the regulatory definition.
CITGO Refining and Chemicals Company, L.P., moved to vacate its three MBTA convictions. It argued that the statutory term “take” was limited to conduct directed at birds, such as hunting, trapping, or poaching, and did not cover commercial activity that unintentionally caused bird deaths.
The district court denied the motion. It concluded that the MBTA misdemeanor provision imposed strict liability and required the government to establish proximate causation rather than an intent to harm birds. The court determined that CITGO Refining’s operation of the uncovered tanks proximately caused the bird deaths addressed in Counts 8, 9, and 10.
The district court imposed $2 million in combined fines for the Clean Air Act convictions. CITGO Petroleum Corporation received a $500,000 fine on each of Counts 4 and 5. CITGO Refining and Chemicals Company separately received a $500,000 fine on each count.
CITGO Refining and Chemicals Company also received a $15,000 fine for each of the three MBTA counts. Those additional fines totaled $45,000, bringing the combined amount imposed on the two entities to $2.045 million.
The U.S. Court of Appeals for the Fifth Circuit reversed both CITGO entities’ convictions on Counts 4 and 5 and CITGO Refining and Chemicals Company, L.P.’s convictions on Counts 8, 9, and 10. On the Clean Air Act counts, the court held that Subpart QQQ defined an oil-water separator by both its function and its required components. Although Tanks 116 and 117 contained skimmers, they lacked weirs, grit chambers, and sludge hoppers and therefore did not qualify as oil-water separators. The court also found that the jury instruction incorrectly treated the tanks’ function as sufficient for classification. It noted that equalization tanks could fall under Subpart Kb, but the government had not charged CITGO under that provision.
On the MBTA counts, the Fifth Circuit held that “take” was limited to deliberate conduct directed at migratory birds and did not cover omissions or commercial activity that indirectly and accidentally caused bird deaths. The court followed the narrower interpretation used by the Eighth and Ninth Circuits rather than the broader approaches associated with the Second and Tenth Circuits. Because the charges involved taking or aiding and abetting a taking, the court did not determine the full scope of the separate term “kill.” The case was remanded with instructions to enter judgments of acquittal on Counts 4, 5, 8, 9, and 10.
Environmental Compliance Expert Witness
An environmental compliance expert may review refinery permits, wastewater systems, emission-control requirements, and the technical application of EPA regulations such as Subpart QQQ. In a dispute involving equipment classification, this expert could explain how the tanks operated, identify their physical components, and compare those features with regulatory requirements, while leaving the legal interpretation to the court.
Industrial Engineering Expert Witness
An industrial engineering expert may examine the design and operation of refinery tanks, wastewater systems, skimmers, and related equipment. The analysis could address equipment configuration, operating procedures, maintenance records, process flow, and whether the system functioned as described by the parties.
Wildlife Expert Witness
A wildlife expert could evaluate how migratory birds interacted with uncovered refinery tanks and the surrounding environment. Potential areas of analysis include bird behavior, attraction to open water surfaces, migration patterns, exposure pathways, and the circumstances under which birds may have landed in or near oily wastewater.
Petroleum Expert Witness
A petroleum expert could explain refinery operations, tank functions, oil-water separation processes, and the movement of wastewater through treatment systems. This analysis may assist in distinguishing equalization tanks from other refinery equipment and in evaluating whether the physical design and operational use of the tanks were consistent with industry practices and applicable technical requirements.
Subpart QQQ Required Both Function and Listed Components
The Fifth Circuit read the Subpart QQQ definition of an “oil-water separator” as requiring both a separating function and the specified physical components. Tanks 116 and 117 separated oil from wastewater and contained skimmers, but they lacked weirs, grit chambers, and sludge hoppers. As a result, their operational use alone did not bring them within the regulatory definition charged against CITGO.
The Jury Instruction Applied an Incomplete Definition
The district court instructed the jury that equipment could qualify as an oil-water separator based on how it was used, even without every component identified in the regulation. The Fifth Circuit found that this instruction omitted part of the governing definition and permitted convictions under an incorrect legal standard. It therefore reversed Counts 4 and 5.
“Take” Referred to Conduct Directed at Migratory Birds
The MBTA issue required the court to distinguish the act constituting a taking from the defendant’s mental state. The Fifth Circuit concluded that “take” covered deliberate conduct directed at migratory birds, not omissions or commercial operations that indirectly and accidentally caused bird deaths.
The Fifth Circuit Adopted the Narrower Interpretation of “Take”
The court followed the approach used by the Eighth and Ninth Circuits rather than the broader readings associated with the Second and Tenth Circuits. Its ruling addressed only the statutory term “take” and did not resolve the full scope of the MBTA’s separate prohibition against killing migratory birds.
The Appeal Was Limited to the Regulation Charged
Counts 4 and 5 alleged violations of Subpart QQQ, so the Fifth Circuit confined its analysis to that provision. The court noted that equalization tanks could fall within the separate Subpart Kb framework, subject to its own requirements, but the government had not charged CITGO under that regulation. The issue on appeal was therefore whether Tanks 116 and 117 met the Subpart QQQ definition.
United States v. CITGO Petroleum Corp. arose from the operation of two uncovered equalization tanks at CITGO’s Corpus Christi refinery and bird deaths associated with those tanks. After convictions under the Clean Air Act and the Migratory Bird Treaty Act, the Fifth Circuit reversed Counts 4, 5, 8, 9, and 10 and directed the district court to enter judgments of acquittal. The reversal eliminated the convictions on which the associated $2.045 million in fines had been imposed.
What equipment was involved in the CITGO refinery case?
The dispute involved Tanks 116 and 117, two uncovered equalization tanks used in the wastewater system at CITGO’s Corpus Christi refinery. Each tank measured approximately 30 feet tall and 240 feet in diameter.
How much oil did inspectors find in Tanks 116 and 117?
During a March 2002 inspection, Texas environmental inspectors found approximately 130,000 barrels of oil floating above wastewater in the two tanks. That discovery led authorities to allege that CITGO was operating the tanks as oil-water separators.
What happened to refinery environmental manager Philip Vrazel?
Philip Vrazel was charged in Count 3 and in the five MBTA counts. Count 3 was later dismissed as time-barred, and Vrazel was acquitted on all five MBTA counts.
Why did the Fifth Circuit discuss Subpart Kb?
The Fifth Circuit noted that equalization tanks could be regulated under Subpart Kb. The government, however, had charged CITGO under Subpart QQQ rather than under Subpart Kb.
Which convictions did the Fifth Circuit reverse?
The court reversed the two CITGO entities’ convictions on Counts 4 and 5 and CITGO Refining and Chemicals Company, L.P.’s convictions on Counts 8, 9, and 10. It remanded the case with instructions to enter judgments of acquittal on those counts.
What happened to the $2.045 million in fines?
The district court had imposed $2 million for the Clean Air Act convictions and $45,000 for the three MBTA convictions. The Fifth Circuit’s reversal removed the legal basis for those penalties.
Environmental Compliance Expert Witness
An environmental compliance expert may review refinery permits, wastewater systems, emission-control requirements, and the technical application of EPA regulations such as Subpart QQQ. In a dispute involving equipment classification, this expert could explain how the tanks operated, identify their physical components, and compare those features with regulatory requirements, while leaving the legal interpretation to the court.
Industrial Engineering Expert Witness
An industrial engineering expert may examine the design and operation of refinery tanks, wastewater systems, skimmers, and related equipment. The analysis could address equipment configuration, operating procedures, maintenance records, process flow, and whether the system functioned as described by the parties.
Wildlife Expert Witness
A wildlife expert could evaluate how migratory birds interacted with uncovered refinery tanks and the surrounding environment. Potential areas of analysis include bird behavior, attraction to open water surfaces, migration patterns, exposure pathways, and the circumstances under which birds may have landed in or near oily wastewater.
Petroleum Expert Witness
A petroleum expert could explain refinery operations, tank functions, oil-water separation processes, and the movement of wastewater through treatment systems. This analysis may assist in distinguishing equalization tanks from other refinery equipment and in evaluating whether the physical design and operational use of the tanks were consistent with industry practices and applicable technical requirements.
Subpart QQQ Required Both Function and Listed Components
The Fifth Circuit read the Subpart QQQ definition of an “oil-water separator” as requiring both a separating function and the specified physical components. Tanks 116 and 117 separated oil from wastewater and contained skimmers, but they lacked weirs, grit chambers, and sludge hoppers. As a result, their operational use alone did not bring them within the regulatory definition charged against CITGO.
The Jury Instruction Applied an Incomplete Definition
The district court instructed the jury that equipment could qualify as an oil-water separator based on how it was used, even without every component identified in the regulation. The Fifth Circuit found that this instruction omitted part of the governing definition and permitted convictions under an incorrect legal standard. It therefore reversed Counts 4 and 5.
“Take” Referred to Conduct Directed at Migratory Birds
The MBTA issue required the court to distinguish the act constituting a taking from the defendant’s mental state. The Fifth Circuit concluded that “take” covered deliberate conduct directed at migratory birds, not omissions or commercial operations that indirectly and accidentally caused bird deaths.
The Fifth Circuit Adopted the Narrower Interpretation of “Take”
The court followed the approach used by the Eighth and Ninth Circuits rather than the broader readings associated with the Second and Tenth Circuits. Its ruling addressed only the statutory term “take” and did not resolve the full scope of the MBTA’s separate prohibition against killing migratory birds.
The Appeal Was Limited to the Regulation Charged
Counts 4 and 5 alleged violations of Subpart QQQ, so the Fifth Circuit confined its analysis to that provision. The court noted that equalization tanks could fall within the separate Subpart Kb framework, subject to its own requirements, but the government had not charged CITGO under that regulation. The issue on appeal was therefore whether Tanks 116 and 117 met the Subpart QQQ definition.
United States v. CITGO Petroleum Corp. arose from the operation of two uncovered equalization tanks at CITGO’s Corpus Christi refinery and bird deaths associated with those tanks. After convictions under the Clean Air Act and the Migratory Bird Treaty Act, the Fifth Circuit reversed Counts 4, 5, 8, 9, and 10 and directed the district court to enter judgments of acquittal. The reversal eliminated the convictions on which the associated $2.045 million in fines had been imposed.
What equipment was involved in the CITGO refinery case?
The dispute involved Tanks 116 and 117, two uncovered equalization tanks used in the wastewater system at CITGO’s Corpus Christi refinery. Each tank measured approximately 30 feet tall and 240 feet in diameter.
How much oil did inspectors find in Tanks 116 and 117?
During a March 2002 inspection, Texas environmental inspectors found approximately 130,000 barrels of oil floating above wastewater in the two tanks. That discovery led authorities to allege that CITGO was operating the tanks as oil-water separators.
What happened to refinery environmental manager Philip Vrazel?
Philip Vrazel was charged in Count 3 and in the five MBTA counts. Count 3 was later dismissed as time-barred, and Vrazel was acquitted on all five MBTA counts.
Why did the Fifth Circuit discuss Subpart Kb?
The Fifth Circuit noted that equalization tanks could be regulated under Subpart Kb. The government, however, had charged CITGO under Subpart QQQ rather than under Subpart Kb.
Which convictions did the Fifth Circuit reverse?
The court reversed the two CITGO entities’ convictions on Counts 4 and 5 and CITGO Refining and Chemicals Company, L.P.’s convictions on Counts 8, 9, and 10. It remanded the case with instructions to enter judgments of acquittal on those counts.
What happened to the $2.045 million in fines?
The district court had imposed $2 million for the Clean Air Act convictions and $45,000 for the three MBTA convictions. The Fifth Circuit’s reversal removed the legal basis for those penalties.
Environmental Compliance
Clean Air Act
Environmental Protection Agency EPA
Water and Wastewater Engineering
Wildlife Management
Oil and Gas
Hydrology, +4
Oil and Gas
Electrical Engineering, +4
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