By Jonathan Stempel and Nicole Jao
(Reuters) -A grand jury indicted Phillips 66 (NYSE:PSX) for violating the federal Clean Water Act by illegally discharging 790,000 gallons of industrial wastewater into Los Angeles County's sewer system, and failing to report the violations to authorities.
U.S. Attorney Martin Estrada in Los Angeles said the Nov. 24, 2020 and Feb. 8, 2021 discharges from a Carson, California facility contained oil and grease concentrations that exceeded, by a respective 329 and 172 times, what Phillips 66's permits allowed.
He said this threatened to release contaminated water into the Pacific Ocean, though there was no evidence this occurred, and endangered employees because oil and grease are flammable.
"Felony charges against a corporation for environmental violations are not common," Estrada told reporters in a group meeting on Thursday.
He said he believed the county's water treatment facility caught the contaminated water, but "that is not the way it's supposed to work."
Phillips 66 was charged with four counts of knowingly violating and two counts of negligently violating the Clean Water Act.
The Houston-based oil refiner and processor faces up to five years probation on each count, and $2.4 million in fines. It would be arraigned in Los Angeles federal court.
In a statement, Phillips said it will continue cooperating with Estrada's office and is "prepared to present its case" in court. It also said it was committed to protecting the health and safety of employees and communities where it operates.
According to Wednesday's indictment, the Carson facility released 310,000 gallons of non-compliant wastewater, containing about 64,000 pounds of oil and grease, over 2-1/2 hours.
The oil-and-grease concentration was as high as 24,700 milligrams per liter, compared with 75 milligrams per liter allowed under Phillips' permit, the indictment said.
In the second discharge, 480,000 gallons of wastewater containing about 33,700 pounds of oil and grease, for a concentration of 12,900 milligrams per liter, were released over six hours.
Estrada said Phillips 66 acknowledged the discharges only after being contacted by county regulators, and promised in writing after the first discharge to "retrain operations personnel."
Last month, Phillips 66 said it will close its Los Angeles-area refinery complex, comprising the 101-year-old Carson facility and a 105-year-old facility in nearby Wilmington, in the fourth quarter of 2025, citing "market dynamics."