Corporate Negligence Case Study: Lima Refining Company and the Air a Community Breathes

The Invisible Threat

For the community living in the shadow of the Lima Refining Company (LRC) in Lima, Ohio, the threat was invisible. It wasn’t a chemical spill or a contaminated river like many of the other pollutions in the lame state of Ohio, but this was in the air they breathed.

The threat was benzene, a hazardous chemical regulated by the Clean Air Act because it is a known human carcinogen.

Federal laws, specifically the Benzene Waste Operations NESHAP (BWON), are designed with one purpose: to force refineries to control this poison and keep it out of the atmosphere. But according to a complaint filed by the U.S. Department of Justice, for years, the Lima refinery systematically failed to comply with these basic, life-saving regulations.

An EPA inspection in June 2022 allegedly uncovered a facility riddled with problems—leaking equipment, failed seals, and improperly managed waste streams that allowed benzene to escape. This was an alleged failure that put the health and safety of an entire community at risk.

The Corporate Playbook: A Pattern of Negligence

The federal government’s complaint against LRC paints a picture not of a single, isolated accident, but of a systemic breakdown in the company’s duty to operate safely. The alleged violations reveal a corporate playbook of neglect and non-compliance across the facility.

• Failure at the Source: From at least 2018 to 2022, LRC allegedly routed its benzene-laden wastewater to an uncontrolled equalization tank. This design flaw meant that the effluent streams were exposed to the open air, allowing the carcinogenic benzene to evaporate and become an airborne pollutant before it could even reach the treatment unit.
• A Facility of Leaks: The 2022 EPA inspection revealed a cascade of equipment failures. Inspectors observed that the metal cover of the Induced Gas Flotation units (a type of oil-water separator) was partially collapsed, causing leaks. They found numerous sewer drains without proper water seals and junction boxes with cracked, missing, or open seals. Each of these failures is a potential pathway for fugitive benzene emissions to escape into the community’s air.
• A Breakdown in Oversight: The alleged negligence extended to basic record-keeping and maintenance. The complaint states that after the inspection, LRC could not produce the required engineering design documents for its pollution control equipment, a fundamental requirement for ensuring safe operation. Furthermore, the company self-reported 44 instances of missed inspections in 2019 alone, demonstrating a pattern of failing to conduct its own required oversight.

A Cascade of Consequences: The Real-World Impact

Public Health in the Crosshairs

The core consequence of these alleged failures is the impact on human health. The BWON regulations exist because benzene is dangerous. By allegedly failing to control its emissions, LRC exposed the surrounding community to an increased, unnecessary risk.

The settlement agreement, or Consent Decree, implicitly acknowledges this risk. In a significant move, it forces LRC to establish a brand-new air monitoring network. This includes two new monitors inside the refinery fence and, crucially, six new monitoring stations located in the community outside the refinery fenceline.

LRC must monitor these community stations for benzene, toluene, and xylene, and post all the collected data on a publicly available website. This measure is a direct response to the threat, empowering the community with the information to see for themselves what is in the air they breathe—a level of transparency that only became mandatory after the government intervened.

Analysis: A System Designed for This

The case of the Lima refinery is a stark example of the failures inherent in a system that relies heavily on corporate self-regulation. The complex, technical nature of environmental laws like the Clean Air Act means that for years, a company can allegedly operate out of compliance, with the failures only coming to light during a rare, intensive federal inspection.

This is a predictable outcome of a neoliberal economic framework where environmental compliance is often viewed by corporations as a “cost center” to be minimized rather than a core public duty. The alleged pattern of deferred maintenance, failed inspections, and improper operations points to a business culture that prioritized production and profit over investment in robust environmental controls. The “externalities”—the cost of the pollution in the form of public health risks—were effectively offloaded from the company’s balance sheet onto the surrounding community.

Dodging Accountability: The $19 Million Price of Admitting Nothing

To settle the government’s claims, Lima Refining Company has agreed to a resolution with two main parts: a massive overhaul of its facility and a significant financial penalty.

• Civil Penalty: LRC will pay a $19,000,000 civil penalty to the United States.
• Forced Investment: The company is now legally bound to perform extensive and costly upgrades, including installing a new Benzene Flash Column by 2028, upgrading its flare gas recovery systems, redesigning its wastewater collection systems, and replacing failing equipment.

However, buried within the legal agreement is the most telling feature of modern corporate accountability. The Consent Decree explicitly states:

“LRC denies the allegations in the Complaint and FOV and does not admit any liability to the United States”.

This is the price of impunity. For $19 million—a figure that is significant but manageable for a subsidiary of a global energy giant like Cenovus Energy —the company gets to fund its own cleanup and walk away without ever admitting it did anything wrong. The fine becomes not a punishment for endangering a community, but a negotiated cost of doing business.

The settlement holds no individual managers or executives responsible, allowing the decision-makers who oversaw the refinery during the years of alleged violations to remain anonymous and unaccountable.

Reclaiming Power: Pathways to Real Change

The consent decree, while flawed in its accountability, represents a partial reclaiming of power by the public. It uses the force of federal law to compel a corporation to do what it allegedly failed to do on its own: invest in the technology and processes necessary to protect the community.

The mandatory community air monitoring program, in particular, is a powerful tool that shifts a degree of power to the residents themselves by providing transparent, publicly accessible data about their environment.

But this reactive, after-the-fact enforcement is not enough. Real, systemic change requires a proactive approach: stricter and more frequent independent audits of major polluters, penalties for non-compliance that are so severe they cannot be absorbed as a business expense, and a legal framework that holds corporate executives personally and criminally liable when their decisions lead to the release of hazardous pollutants that endanger public health.

Conclusion: A Story of a System, Not an Exception

The Lima Refining Company case is a window into the deep contradictions of environmental regulation in a capitalist economy. It shows that the law can be a powerful tool to force polluters to clean up their act, mandating hundreds of millions of dollars in investments to protect a community. But it also shows that the system is structured to protect the corporation itself from the most damaging consequence: having to admit guilt.

This settlement is part of the story of a system that treats the release of known carcinogens as a problem to be managed through negotiation and financial settlement, rather than a profound moral and social failure. Until the cost of polluting is no longer a payable fee but an unacceptable breach of public trust with severe personal consequences for those in charge, the story of Lima will remain just one of many that our economic system is designed to produce.

Disclaimer: All factual claims in this article are derived from the public Complaint (Case No. 3:24-cv-1659) and Consent Decree (Case No. 3:24-cv-1659) filed in the United States District Court for the Northern District of Ohio on September 27, 2024.

https://www.justice.gov/archives/opa/pr/justice-department-and-epa-announce-settlement-reduce-benzene-and-volatile-organic-compounds

https://www.epa.gov/enforcement/2024-lima-refining-clean-air-act-benzene-waste-neshap-and-volatile-organic-compounds

https://news.bloomberglaw.com/environment-and-energy/refining-company-to-pay-19-million-in-clean-air-violations-suit

Cenovus Energy owns the entirety of Lima Refinery Company.

Their website can be found at: https://www.cenovus.com/