An investigation led by a former Environmental Protection Agency (EPA) engineer and an environmental and civil rights attorney is uncovering evidence that major oil companies are being paid twice for cleaning up toxic oil spills. Multibillion-dollar companies like Chevron, ExxonMobil, and BP are being paid for cleanup efforts with state government funds and again, in secret, by insurance companies, Reuters reports.
Thomas Schruben, a Maryland environmental engineer who was involved in drafting government pollution rules while working for the EPA, had long suspected oil companies of double-dipping when dealing with the cleanup of toxic leaks from underground tanks. Schruben has worked as an environmental engineer for over 30 years, specializing in underground storage tanks.
The EPA has noted that leaking underground storage tanks are one of the greatest threats to the nation’s groundwater. Underground storage tanks store “enormous quantities” of petroleum and other toxic substances and are found everywhere, “as close as your nearest gas station.” Leaks and spills due to corrosion or other tank failures can contaminate soil and groundwater, which is the source of drinking water for nearly 50 percent of Americans.
The vast majority of states in the country have special funds to cover the costs of replacing old tanks and extracting polluted soil and dirty groundwater. Although oil companies have not claimed any wrongdoing, their scheme essentially allows them to be paid double when they are responsible for a spill or leak.
Schruben, attorney Dennis Pantazis, and a team of lawyers, investigators and experts are conducting an ongoing investigation into the scheme. They have brought around 20 cases to state governments, showing how oil companies have essentially defrauded states by collecting both state special funds and insurance money for the same tank cleanups.
“It appears this was a really common practice and it’s very disconcerting,” Colorado Attorney General John Suthers told Reuters.
Chevron, for example, was accused of receiving insurance payouts to clean up and monitor a gas leak in Artesia, New Mexico. However, on the application to receive state funding for the cleanup, Chevron indicated that it did not have insurance. “When I first saw these cases, I thought this is kind of incredible,” New Mexico assistant Attorney General Seth Cohen, who handled the case, said. “The oil companies have, in effect, profited off polluting.”
Just last week, BP was sued by the state of Minnesota for double-dipping into the state’s tank cleanup fund. The state alleged that BP violated the Minnesota False Claims Act by fraudulently collecting more than $25 million from its tank fund while being reimbursed by insurers as well. BP has denied any wrongdoing and claims its acquisition of tank funds have been proper.
Reuters found that nine states have won settlements against oil companies, including Chevron, ExxonMobil, and ConocoPhillips, in the past three years. There are currently lawsuits pending in at least seven other states.