EPA reaches $4.2 million settlement, largest of its kind, over 2019 Philly refinery explosion

The U.S. Environmental Protection Agency announced Tuesday that it has filed for a $4.2 settlement — a record for its kind — with Philadelphia Energy Solutions over a 2019 refinery explosion and fire that rocked Philadelphia.

Tom Cinti, an EPA attorney serving in the Environmental Justice Division, said it was the agency’s biggest amount ever sought for a refinery under a Clean Air Act rule that requires owners and operators to “ensure that regulated and other extremely hazardous substances are managed safely.”

The amount “sends a message,” Cinti said.

He noted that most other refineries aren’t located in densely populated neighborhoods, as PES was.

“We want to make a point that if you’re going to operate a facility like that right in people’s backyard, then we are going to hold you to a very high standard,” Cinti said. “The point is to make sure that you operate your facility in a manner that reduces risk to the population, and this population, it was just by grace of God that no one was seriously injured here.”

The EPA found that Philadelphia Energy Solutions (PES) failed to identify and assess hazards posed by a pipe elbow in a hydrofluoric acid (HF) alkylation unit in the Girard Point refinery that ruptured due to “extensive” corrosion that had withered the pipe wall to the thickness of a credit card since being installed in 1973.

A resulting fire and explosions on June 21, 2019, forced the closure of the refinery, which had been in operation for 150 years, dominating a large chunk of local landscape in South and Southwest Philadelphia. At the time, it was the largest oil refining complex on the East Coast, processing 335,000 barrels of crude oil each day.

Hilco Redevelopment Partners purchased the 1,300-acre property in 2020 for $225.5 million. The company is developing the area as the Bellwether District. It broke ground in March for the first of 54 planned buildings, which include two large warehouses to be complete by the beginning of 2025.

The EPA filed the claim in U.S Bankruptcy Court in Delaware because PES entered bankruptcy shortly after the explosion.

PES has not admitted liability in the proposed settlement, which has a 30-day public comment period before final court approval. If approved, money would be paid to the U.S. Treasury from the company’s Chapter 11 bankruptcy reorganization plan.

The site is currently under a complex cleanup agreement being overseen by both the EPA and Pennsylvania Department of Environmental Protection.

Sunoco, which sold the refinery to PES in 2012, is responsible for contamination up to then. Sunoco formed a wholly owned subsidiary, Evergreen, to handle its end of the cleanup.

PES, which operated the refinery from 2012 to 2019, has filed for liquidation under Chapter 11 and is seeking to dissolve.

Hilco agreed as part of its purchase to take on PES’s cleanup obligations for contamination that occurred after 2012.

Neighborhood groups and environmentalists had long fumed over pollution caused by PES’s operations, especially regarding benzene emissions.

Indeed, EPA’s own watchdog found in 2023 that the agency had failed to adequately enforce benzene emission standards at refineries, singling out PES, which continued to exceed emissions standards two years after the 2019 fire. Hilco, which is spending billions on the redevelopment, stopped sampling for benzene because it was no longer required to with refinery operations gone.

Many residents continue to believe that benzene is still present on site and that fumes escape.

“Communities impacted by historic refinery operations and explosions, as well as Hilco’s redevelopment, have repeatedly demanded fence line benzene monitoring at the site in addition to expanded greenspace and zero-emission vehicle requirements to protect impacted residents from flooding and air pollution caused by the current redevelopment,” said Russell Zerbo, with the Philly-based Clean Air Council, a nonprofit environmental advocacy group. “These funds would be well-spent on those protections.”

This is a developing story and will be updated.