Texas Sues Shell Over Massive Fire at Houston Chemical Plant

The state of Texas sued British oil giant Shell and the other owner of a petrochemical and refinery complex near Houston that caught fire in May over alleged environmental damage.

The Texas attorney general alleged in court documents that the massive fire caused “mass quantities” of airborne contaminants and illegal flows of wastewater into nearby waterways. 

The civil lawsuit, filed Aug. 7 in state district court in Travis County, Texas, on behalf of the Texas Commission on Environmental Quality, seeks unspecified monetary damages of more than $1 million and other relief tied to alleged environmental violations at the Deer Park site.

According to the state, days of firefighting using “vast quantities of water” to cool parts of Shell’s sprawling chemical facility resulted in at least 68.7 million gallons of wastewater being unlawfully discharged into a storm-water pond and into the nearby Houston Ship Channel.

The lawsuit says Shell also allowed additional, unspecified volumes of wastewater to flow through a water-treatment facility in amounts exceeding what was permitted.

The wastewater passed through a drainage ditch crossing Shell’s chemicals-manufacturing facility as well as the next-door refinery owned by a subsidiary of Mexican state oil company Petróleos Mexicanos, or Pemex, operating under the name Deer Park Refining Limited Partnership. Both Shell and the Pemex-owned entity are named as defendants.

A Shell spokesman said Saturday the company was aware of the lawsuit and doesn’t comment on pending litigation. He said the Deer Park chemicals facility remains in a recovery phase, and Shell continues to investigate the cause of the fire and rebuild the damaged portion of the plant.

Pemex didn’t respond to requests for comment.

Serious releases of chemicals, oil, vapors and other substances at U.S. chemical-manufacturing sites and refineries resulting in injuries, evacuations or other severe consequences, saw an overall uptick in frequency during portions of the pandemic, according to data collected by the American Fuel and Petrochemical Manufacturers, a U.S. trade and lobbying group.

Such incidents, which are self-reported by companies according to standards set by the industry, have declined in frequency from the levels of a decade ago but became more common in 2021 at U.S. chemical plants. They also increased in frequency during four out of the past five years at U.S. refineries, AFPM data show.

In addition to the lawsuit filed by Texas, Shell faces private lawsuits on behalf of more than two dozen employees and contractors who say they were injured and exposed to harmful chemical fumes during the fire.

A Shell executive at the chemicals plant told reporters in May that the fire sent 15 people to the hospital for evaluations, and that all were later released. The company has said it is committed to the safety and well-being of workers and communities near its plants.

The Deer Park wastewater discharges started May 5, when the fire ignited, and lasted until at least May 26, according to the state’s lawsuit.

“After the fire began at the Shell Chemical Plant, mass quantities of air contaminants were emitted into the environment, including huge plumes of black smoke along with large flames from the Plant’s flares,” the state’s lawsuit says. It says the products that ignited included gasoline and heavy gas oil, citing information from Shell. It adds that the company hasn’t fully evaluated what substances were released or emitted.

The lawsuit alleges that airborne releases were concentrated enough and lasted long enough to endanger humans, animals and vegetation.

Shell said at the time of the fire that there was no danger to the community near the chemicals facility. The Texas Commission on Environmental Quality also said at the time there were “no detections of concern in the air monitoring surveys” being conducted by staff and contractors during the fire.

In 2021, Shell said it would sell its 50% stake in the crude-refining plant at the Deer Park complex to its partner Pemex as part of broader moves by the London-based company to shrink its U.S. refinery footprint. The sale was completed in early 2022.

Shell retained 100% ownership of the adjacent petrochemicals plant that dates back to the 1940s. The company has had a presence at Deer Park for more than 90 years. 

The Deer Park chemicals facility makes ethylene and isoprene for use in paints, plastics, insecticides and other products, as well as acetone and phenol for dyes, agricultural chemicals and other uses. It normally operates 24 hours a day, but portions of the site remain damaged by the May fire.

Shell executives told analysts in July that repairs from the Deer Park fire will continue to weigh on its chemicals business, without providing a cost estimate. The company is reviewing its global chemicals business, which has lagged behind competitors and its own performance targets, according to Shell executives.

Write to Jenny Strasburg at [email protected]