Environment

Oil Company Execs Plead Guilty to Polluting Texas Drinking Water

| by DOJ

WASHINGTON—Texas Oil and Gathering Inc., its owner John Kessel and its
operations manager Edgar Pettijohn pleaded guilty today in U.S. District Court
in Houston to criminal violations related to the disposal of refinery wastes at
an underground injection well in violation of the Safe Drinking Water Act, the
Justice Department announced.

The two corporate officers pleaded guilty to conspiracy and violating the
Safe Drinking Water Act for disposing of oil-contaminated waste water from its
refinery process at an underground injection well. The company pleaded guilty to
conspiracy and violating the Resource Conservation and Recovery Act (RCRA) for
disposing of hazardous waste at an unpermitted facility. The crimes took place
from January 2000 through January 2003.

Texas Oil and Gathering Inc. faces a maximum fine of $500,000 or twice
monetary gain or loss for the conspiracy count and $50,000 per day, twice the
gain or loss, or $500,000, whichever is higher, for the RCRA count. Kessel and
Pettijohn face up to eight years in prison and a fine of up to $500,000.

The charges against the Alvin, Texas-based company and its two officers
involved the fraudulent representation to a Rosharon, Texas, injection well that
the wastewater the company was disposing came from an oil well
Kessel had leased and was developing. In reality the wastewater consisted of various liquids from the company's refineries and chemical plants.

Between January 2000 and January 2003, Kessel and Pettijohn directed
subordinates to truck its oil and water waste from distillation and fill out disposal forms indicating it came from a legal oil well
leased by Kessel.

The government’s investigation began in January 2003, when the well
exploded and killed three workers. Although the explosion was not caused by the
defendants, a closer review of the waste that went to the well led to
their prosecution.

"The Safe Water Drinking Act and the regulations overseeing oil and gas
related injection wells are designed to ensure safe sources of drinking water.
Violations of these laws will be investigated and prosecuted to the fullest
extent of the law," said John C. Cruden, Acting Assistant Attorney General for
the Justice Department’s Environment and Natural Resources Division.

"We remain committed to protecting the precious natural resources of Texas
and hope that today’s conviction sends a clear message to everyone in the
industrial community that the government will investigate and prosecute anyone
who attempts to circumvent our nation’s anti-pollution laws," said Tim Johnson,
Acting U.S. Attorney for the Southern District of Texas.

"The defendants tried to make an illegal end run around our environmental
laws in order to increase their bottom line," said Warren Amburn, Special
Agent-in-Charge of EPA's criminal enforcement office in Dallas. "These guilty
pleas serve as a reminder that senior company executives who decide to commit
environmental crimes will be prosecuted—not just the company."