Record £2.8m fine for chemical plant emissions shames oil giant ExxonMobil

ExxonMobil's Ethylene Plant in Mossmorran, pictured in 1986. Picture: Hamish Campbell
ExxonMobil's Ethylene Plant in Mossmorran, pictured in 1986. Picture: Hamish Campbell
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ENERGY giant ExxonMobil has been forced to pay the biggest fine for an environmental offence in British history for failing to report greenhouse gas emissions from its chemicals plant in Scotland.

The world’s largest oil company was hit with the £2.8 million fine by the Scottish Environment Protection Agency (Sepa) for neglecting to account for 33,000 tonnes of carbon dioxide from its ethylene plant in Fife.

The fine was not publicised by Sepa when it was levied in September 2010 and was buried in a report issued last week by the government’s anti-pollution agency.

Environment groups said the scale of the fine should have been broadcast widely to highlight “complacency” in the oil industry and as a deterrent to other companies.

ExxonMobil is most famously associated with the Exxon Valdez oil disaster in Alaska in 1989. The company’s Fife Ethylene Plant in Mossmorran was opened in 1986 and can produce up to 830,300 tonnes of ethylene a year, much of which is used to make plastic. It is the third-largest source of greenhouse gases in the UK’s chemicals sector.

In 2005, the European Union passed regulations on carbon emissions that put in place stringent fines for not complying with the legislation.

Sepa’s enforcement statistics report, covering activity in the financial year 2010/11 and published last Wednesday, says ExxonMobil Chemical Ltd had informed the agency that it had identified three sources of carbon dioxide that had not been reported in its return for 2008. According to EU statistics, the Fife plant had verified emissions of 708,369 tonnes of carbon dioxide that year but it only reported 675,403 tonnes, a discrepancy of 32,966 tonnes. Each tonne attracts a $100 fine, making the final bill $3.3 million or £2.8m.

ExxonMobil said it “regretted” the error and reported the mistake as soon as it was spotted. Previously the largest fine handed down for an environmental offence was £1m paid by Shell in 1990 for polluting the river Mersey.

The company was also forced to pay a second penalty of £844,765 for a similar mistake at the group’s Esso Petroleum Company in Fawley near Southampton.

An insider at ExxonMobil said there had been a “sharp intake of breath” at the size of the fine. The money, paid to Sepa, was passed to the Scottish Government, which has spent it on community environmental projects.

Stan Blackley, chief executive of Friends of the Earth Scotland, said it was “disappointing” the level of fine had not been published at the time. “This is yet another example of complacency and misinformation from the oil industry – an industry that has a reputation for poor practice, and one that often puts the environment and people at risk through its failure to act properly.”

Richard Dixon, director of WWF Scotland, said: “It’s surprising that a company this big has made such a significant error. It’s a serious lesson for them and I hope they have learned that lesson.”

Following the levying of the penalty in 2010, ExxonMobil’s name was mentioned, but not the size of the fine, on an obscure part of Sepa’s website.

Details were only revealed in the enforcement report and subsequently uncovered by the latest edition of the environmental campaigns journal Ends.

A spokesman for Sepa said:. “The Exxon Mobil Chemical Limited case was a reporting error, and the penalty was a mandatory consequence of breaching the EU Emissions Trading Scheme regulations. Unlike prosecution cases, there was no direct environmental impact caused by Exxon Mobil’s error, and Sepa was not required to carry out an investigation or report the matter to the Procurator Fiscal.”

In a statement ExxonMobil, based in Texas, said: “We regret the errors made at Fife and Fawley relating to the reporting of greenhouse gas emissions under the European Union Emissions Trading System. In both cases these inaccuracies were identified by ExxonMobil’s internal systems and were immediately reported to the regulator. We have now fully reviewed and improved our procedures at both sites to address the issues we identified.”