Companies Fined for GHG Emissions Reporting Errors

Nine companies were issued fines by the California Air Resources Board (ARB) for violating the State of California's Mandatory Greenhouse Gas Reporting rule.  The ARB adopted the reporting rule in 2007.  Under the rule, sources that emit more than 10,000 metric tons of carbon dioxide equivalent per year must annually report their greenhouse gas emissions for the prior year to the ARB.  Reporting began in 2008 with approximately 600 facilities reporting their emissions.

The ARB entered into settlement agreements with each of the nine companies to resolve the violations.  The companies were cited for failure to meet the reporting deadlines and agreed to fines ranging from $10,000 to $120,000.  Companies are strictly liable for a penalty of up to $10,000 per violation.  Each day that the report is late or fails to meet the regulation's accuracy and completeness standards or third-party verification requirements constitutes a separate violation.  17 CCR § 95107.  The settlement agreements require the companies to submit updated GHG monitoring plans to ARB to demonstrate that their annual reports will be accurate in the future.

The companies cited for violations were not concentrated in one industry sector.  Sources receiving fines included a refinery, a biomass generating plant, an oil and gas production company, a utility company, a lime manufacturing company, and a cement company, among others.  The fines issued were as follows:

  • ExxonMobil Oil Corporation - $120,000
  • DG Fairhaven Power, LLC - $55,000
  • Vintage Production California, LLC - $35,000
  • Pacific Gas & Electric Co. - $20,000
  • Veneco, Inc. - $20,000
  • Cemex Construction Materials, LLC - $15,000
  • Lehigh Southwest Cement Co. - $10,000
  • Lhoist North America of Arizona, Inc. - $10,000
  • Tidelands Production Co. - $10,000

Although this enforcement action occurred on the state level, it serves as a reminder that companies can be subject to fines for violating federal GHG reporting requirements.  Federal GHG reporting began in 2010 for some sectors and in 2011 for others.  As more information is reported and more is understood about these emissions, sources should expect increased scrutiny of the data.  For example, sources should expect data will be carefully scrutinized to understand the bases for discrepancies from year to year.  Care should be taken before submitting data to reporting agencies to verify the accuracy of all data and the bases for any major changes in the data reported.