Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-04650/USCOURTS-cand-3_03-cv-04650-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:7413(b) Clean Air Act

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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

No. C 03-04650 CRB

KELLY A. JOHNSON

Acting Assistant Attorney General

Environment and Natural Resources Division

U.S. Department of Justice

Washington, D.C. 20530

KEVIN V. RYAN

United States Attorney

CHARLES M. O’CONNOR

Assistant United States Attorney

Northern District of California

450 Golden Gate Ave., Box 36055

San Francisco, CA 94102

A. KENT MAYO

Trial Attorney

Environmental Enforcement Section

U.S. Department of Justice

P.O. Box 7611

Washington, D.C. 20044

(202) 616-6557

kent.mayo@usdoj.gov

Attorneys for Plaintiff United States

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

UNITED STATES OF AMERICA, )

)

 Plaintiff, )

)

and )

) NO. C 03-04650 (CRB)

STATE OF HAWAII, )

MISSISSIPPI COMMISSION ON )

 ENVIRONMENTAL QUALITY, )

STATE OF UTAH, )

BAY AREA AIR QUALITY ) THIRD STIPULATION

 MANAGEMENT DISTRICT, ) TO SUBSTITUTE

) CORRECTED PAGES IN 

 Plaintiff-Intervenors, ) PROPOSED CONSENT DECREE

)

)

v. )

)

CHEVRON U.S.A. INC., )

)

 Defendant. )

)

Case 3:03-cv-04650-CRB Document 114 Filed 05/31/05 Page 1 of 9
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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

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Plaintiff, the United States of America, Defendant, Chevron U.S.A. Inc., and PlaintiffIntervenors, State of Hawaii, Mississippi Commission on Environmental Quality, State of Utah,

and Bay Area Air Quality Management District (collectively, “parties”), by and through

undersigned counsel, and pursuant to Civil L.R. 16-2(e) and 7-11, hereby stipulate to substitute

certain pages, as described below and attached to this Stipulation, in the proposed Consent

Decree lodged with this Court on October 16, 2003, to be considered by the Court pursuant to

the pending United States’ Motion to Enter Proposed Consent Decree. The parties request Court

approval of said stipulation. 

1. On October 16, 2003, the United States, on behalf of the Environmental

Protection Agency ("EPA"), concurrently filed its Complaint against Chevron in this action and

lodged with the Court a proposed Consent Decree that reflects the parties’ intent to resolve

through settlement all claims alleged by the United States and the Plaintiff-Intervenors in their

respective Complaints.

2. On August 13, 2004, the United States filed a Motion to Enter Proposed

Consent Decree and supporting Memorandum of Points and Authorities and related Appendix. 

Pursuant to Court orders, the United States, Chevron, Plaintiff-Intervenors, and entities granted

amici curiae status by the Court have made subsequent submissions relating to the proposed

settlement. The United States’ Motion to Enter remains pending before the Court. 

3. On May 12, 2005, the Court held a hearing regarding the United States’

Motion to Enter. At the hearing, the Court expressed concern that certain provisions of the

proposed Consent Decree (Paragraphs 107, 108, and 234) addressing potential future material

modifications of the Decree did not define clearly the Court’s role in the review and approval of

such modifications. The Court requested that the parties consider its concerns and determine

whether such concerns could be addressed through revisions to the relevant language.

4. The parties have consulted and reached agreement on proposed revisions

intended to address the Court’s concerns. The specific revisions are discussed below in

paragraphs 5 and 6.

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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

No. C 03-04650 CRB - 3 -

5. Paragraph 234 (Modification) of the proposed Consent Decree sets forth the

process by which the parties may modify or seek to modify the Consent Decree after the Decree

has been entered by the Court. At the May 12 hearing, the Court expressed concern that the

language of Paragraph 234 did not expressly provide that material modifications to the Consent

Decree would be subject to approval by the Court. To respond to the Court’s concerns, the

parties have agreed to revise the relevant language to clarify the Court’s role in the modification

process. First, consistent with their original intent, the parties hereby submit revised language

for Paragraph 234 that expressly confirms that materials modifications “shall be effective upon

approval by the Court.” Second, the parties also are submitting additional revisions to Paragraph

234 that clarify the types of modifications that can be considered “non-material modifications”

and that provide for the filing of non-material modifications with the Court on a periodic basis

(which is not required by the current version of the Consent Decree). The parties believe that the

submitted revisions resolve, and go beyond, the Court’s stated concerns and ensure a fair and

transparent modification process.

The revised version of Paragraph 234 will read as follows:

234. Modification. The Consent Decree contains the entire agreement of the Parties

and shall not be modified by any prior oral or written agreement, representation or

understanding. Prior drafts of the Consent Decree shall not be used in any action

involving the interpretation or enforcement of the Consent Decree. Non-material

modifications to this Consent Decree shall be in writing and signed by the Parties. The

United States will file non-material modifications with the Court on a periodic basis. 

For purposes of this Paragraph 234, non-material modifications shall include, but not be

limited to, schedule modifications that do not extend the date for compliance with

emission limitations following the installation of control equipment, schedule

modifications that do not extend the date for completion of a catalyst additive program

(as specified in Paragraphs 12.g. or 17.e. of this Consent Decree), and modifications to

frequency of reporting obligations, provided that such changes are agreed upon in

writing by EPA and Chevron. Material modifications to this Consent Decree shall be in

writing, signed by the Parties, and shall be effective upon approval by the Court. 

Specific provisions in this Consent Decree that govern specific types of modifications

shall be effective as set forth in the specific provision governing the modification.

The parties seek to incorporate these revisions by submitting a replacement page 144 for the

Consent Decree, attached to this Stipulation as Attachment 1, to be inserted in the proposed

Consent Decree lodged with the Court on October 16, 2003, and to be considered by the Court

pursuant to the United States’ Motion to Enter.

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6. Paragraphs 107 (Securing Permits) and 108 (Commercial Unavailability of

Control Equipment and/or Additives) of the proposed Consent Decree address specific

circumstances in which Chevron’s ability to meet compliance schedules established in the

Decree is affected by events beyond Chevron’s control. In such circumstances, the parties may

agree on a revised schedule for the relevant obligation(s). The Court expressed concern that

these provisions, as originally drafted, could allow the parties to make material modifications

without subjecting such modifications to Court approval. In order to address the Court’s

concerns, the parties are submitting revisions to Paragraphs 107 and 108 that clarify that any

modifications made pursuant to these Paragraphs are subject to the general provisions governing

modifications, including Court approval of material modifications, set forth in Paragraph 234 (as

revised above). Specifically, the parties have revised the relevant language in Paragraphs 107

and 108 identified by the Court to read as follows: “All modifications to any dates initially set

forth in this Decree or in any approved schedule of implementation shall be signed in writing by

EPA and Chevron and shall be subject to the requirements of Paragraph 234 (Modification).” 

The parties have also agreed to minor corresponding revisions to the language addressing

potential stipulated penalties under Paragraphs 107 and 108. The parties seek to incorporate

these revisions by submitting replacement pages 97, 98, and 99 for the Consent Decree, attached

to this Stipulation as Attachment 2, to be inserted in the proposed Consent Decree lodged with

the Court on October 16, 2003, and to be considered by the Court pursuant to the United States’

Motion to Enter.

7. In addition to the above revisions, the parties have also identified certain

additional revisions/corrections that should be made prior to the Court’s potential final approval

of the proposed Consent Decree. As previously explained, Chevron has been required under the

terms of the proposed Consent Decree to begin performing many of the injunctive relief

obligations in the Decree to meet specific compliance dates. In the course of Chevron’s

performance of these obligations, the parties have become aware of certain corrections to the

Decree that should be made to conform to the parties’ original intent and to allow for the most

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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

No. C 03-04650 CRB - 5 -

efficient and effective performance of the required obligations. The specific corrections are

discussed below in paragraphs 8-11.

8. Appendix D to the proposed Consent Decree is a schedule for compliance with

the requirements of NSPS Subpart J for certain heaters and boilers at Chevron’s refineries. 

Consistent with the requirements of Paragraph 43 of the Decree, Appendix D lists those units

that will be monitored for compliance using an Alternative Monitoring Plan (“AMP”). In the

course of its performance under the Decree, Chevron has determined that its initial identified list

of units needs to be corrected in two respects. First, the unit at the Richmond refinery identified

as “5 NHT F-410" should be corrected to reference unit “5 NHT F-447." Second, the reference

to the “Coker Feed Heater F-501 A/B” at the El Segundo refinery should be corrected to “Coker

Feed Heater F-501 B/C.” The parties agree that those corrections are appropriate, and Chevron

has submitted the AMPs for these units consistent with the December 31, 2004 deadline in the

Decree. The parties seek to incorporate these corrections by submitting a revised version of

Appendix D to the Consent Decree, attached to this Stipulation as Attachment 3, to be inserted in

the proposed Consent Decree lodged with the Court on October 16, 2003, and to be considered

by the Court pursuant to the United States’ Motion to Enter.

9. Paragraph 17 of the proposed Consent Decree sets forth Chevron’s obligations

to use SO2 reducing catalyst additives to reduce SO2 emissions and establish lower SO2

emission limits at Chevron’s Richmond and Hawaii FCCUs. Paragraph 17 sets forth specific

compliance dates by which Chevron must complete each step in the prescribed protocol for

selecting, testing, and using the SO2 reducing catalyst additives. In order to avoid conflict with

its operating schedule at the Richmond refinery, Chevron has requested that two of the

preliminary compliance dates for Richmond be adjusted. First, Chevron has requested that in

Paragraph 17.a. of the Decree, the “Baseline End” compliance date for collection of baseline

data at Richmond be changed from June 30, 2005 to June 1, 2005. Second, Chevron has

requested in that in Paragraph 17.b.iii. of the Decree, the “Commence Date” for additive trials

for Richmond be changed from June 30, 2005 to June 1, 2005. Chevron has not requested any

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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

No. C 03-04650 CRB - 6 -

changes to other compliance dates in Paragraph 17. The parties have discussed Chevron’s

request and agree that the requested adjustments are appropriate and should not impact effective

implementation of the protocol. The parties seek to incorporate these adjustments by submitting

replacement pages 27 and 29 for the Consent Decree, attached to this Stipulation as Attachment

4, to be inserted in the proposed Consent Decree lodged with the Court on October 16, 2003, and

to be considered by the Court pursuant to the United States’ Motion to Enter.

10. Paragraphs 15, 20, and 29 of the proposed Consent Decree set forth the

requirements for use of continuous emission monitoring systems (“CEMS”) to monitor

emissions of oxygen and specific pollutants from Chevron’s FCCUs. These paragraphs

essentially require Chevron to comply with the requirements set forth in 40 C.F.R. § 60.13 and

Part 60, Appendices A and F, that are applicable to CEMS, even though these requirements

might not otherwise be applicable in the absence of the Consent Decree. Due to operating

conditions at its FCCUs, it is possible for Chevron to achieve more precise monitoring results for

its O2 CEMS than can be obtained required using the measurement values specified in Appendix

F. Accordingly, the parties have agreed that the language of the relevant paragraphs should be

revised to allow Chevron to use measurement values that generate more precise monitoring data. 

This revision would be accomplished by adding to the end of Paragraphs 15, 20, and 29 the

following sentence: “With respect to the O2 CEMS required by this Paragraph, in lieu of the

audit points specified in 40 C.F.R. Part 60, Appendix F § 5.1.2., Chevron may audit the O2

CEMS at 20-30% and 50-60% of the actual O2 CEMS span value." The parties seek to

incorporate these revisions by submitting replacement pages 25, 37, and 41 of the Consent

Decree, attached to this Stipulation as Attachment 5, to be inserted in the proposed Consent

Decree lodged with the Court on October 16, 2003, and to be considered by the Court pursuant

to the United States’ Motion to Enter.

11. Section V.M. of the Consent Decree describes the nature and scope of

Chevron’s enhanced LDAR obligations under the Consent Decree, and Paragraph 214A.

provides Chevron with a resolution of liability for certain potential LDAR violations. It was the

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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

No. C 03-04650 CRB - 7 -

intent of the parties that the scope of the resolution of liability under the Decree be consistent

with the scope of Chevron’s enhanced obligations (i.e., apply to the same components and

applicable regulations). However, the current phrasing of the relevant Decree provisions is

potentially ambiguous with respect to the parties’ intent. Therefore, the parties have agreed to

revise the language of the relevant paragraphs to ensure that the Decree reflects the parties’

intent that the scope of Chevron’s enhanced LDAR obligations be consistent with the scope of

the resolution of liability for potential LDAR violations set forth in the Consent Decree. This

revision would be accomplished through the following changes:

a. Revising Paragraph 214A. to read as follows:

214A. Resolution of Liability Regarding LDAR Requirements. Entry of this

Consent Decree shall resolve all civil liability of Chevron to the United States and the

Plaintiff-Intervenors for violations of the statutory and regulatory requirements set forth

below in subparagraphs a. and b. that (1) commenced and ceased prior to the Date of

Entry of the Consent Decree; and (2) commenced prior to the Date of Entry of the

Consent Decree and continued past the Date of Entry, provided that the events giving

rise to such post-Entry violations are identified by Chevron in its Initial Third-Party

Audit Report(s) submitted pursuant to paragraph 85.a. and corrected by Chevron as

required under Paragraph 86:

a. LDAR Requirements. For all equipment in light liquid service and

gas and/or vapor service, the LDAR requirements promulgated by EPA pursuant to

Sections 111 and 112 of the Clean Air Act, and codified at 40 C.F.R. Part 60, Subparts

VV and GGG; 40 C.F.R. Part 61, Subparts J and V; and 40 C.F.R. Part 63, Subparts F,

H, and CC;

b. Any applicable state or local regulations, State Implementation Plan

requirements, or permits that implement, adopt, or incorporate the regulatory

requirements identified in Paragraph 214A.a. or set similar standards and that are

enforceable by the United States or a Plaintiff-Intervenor.

b. Revising the last sentence of the paragraph under the heading

“Section V.M.” and the last sentence of Paragraph 83.b. by adding the following phrase to the

end of each sentence: “that is enforceable by the United States or a Plaintiff-Intervenor.”

c. The parties seek to incorporate these revisions by submitting

replacement pages 82 and 135-136 of the Consent Decree, attached to this Stipulation as

Attachment 6, to be inserted in the proposed Consent Decree lodged with the Court on October

16, 2003, and to be considered by the Court pursuant to the United States’ Motion to Enter. 

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12. Because the Consent Decree has not been entered by the Court, the Court does

not yet have jurisdiction over the implementation of its terms. Therefore, the parties are not

seeking Court approval of the submitted modifications. Instead, this filing is made to ensure that

the version of the Consent Decree before the Court for consideration and approval reflects the

intent of the parties.

13. For the foregoing reasons, the parties request that the Court accept and insert

the corrected pages, attached as Attachments 1 through 6 to this Stipulation, in the proposed

Consent Decree lodged with the Court on October 16, 2003. All other terms of the proposed

Consent Decree shall remain the same. 

14. Counsel for the parties have conferred and hereby stipulate to the substitution

of the attached pages to correct the issues identified above. Counsel for the United States attests

that he has conferred with counsel for Chevron and with counsel for each of the PlaintiffIntervenors and obtained their respective concurrences in the filing of this document in lieu of

signatures.

STIPULATED TO:

FOR THE UNITED STATES

KELLY A. JOHNSON

Acting Assistant Attorney General

Environment and Natural Resources

 Division

U.S. Department of Justice

Date: May 27, 2005 ____[electronically filed by]__________

A. KENT MAYO, Trial Attorney 

Environmental Enforcement Section

U.S. Department of Justice

P.O. Box 7611

Washington, D.C. 20044-7611

(202) 616-6557

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THIRD STIPULATION TO SUBSTITUTE CORRECTED PAGES

No. C 03-04650 CRB

ORDER

PURSUANT TO STIPULATION OF THE PARTIES, IT IS ORDERED that the

substitute corrected pages submitted as Attachments 1 through 6 to the parties’ Third Stipulation

to Substitute Corrected Pages in Proposed Consent Decree shall be inserted in the proposed

Consent Decree filed by the United States on October 16, 2003, and currently pending before the

Court.

Dated: ____________ ________________________________

UNITED STATES DISTRICT JUDGE

May 31, 2005

U

NITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORN

I

APPROVED

A

Charles R. Breyer

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