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BP Subsidiary to Pay a Whopping $40M Air Pollution Penalty

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BP plc’s (BP - Free Report) affiliate, BP Products North America, recently agreed to pay a whopping $40 million penalty to settle civil charges against its Whiting refinery in Indiana, per the U.S. Justice Department. The refinery had violated federal rules intended to curb hazardous air emissions.

The civil penalty of $40 million is the highest ever obtained for a Clean Air Act stationary source settlement. The Whiting refinery, operated by BP, is the sixth largest in the United States.

According to the agreement signed by BP Products North America, the Department of Justice and the Environmental Protection Agency, the refinery's benzene emissions will have to be reduced by about seven tons, hazardous air pollutants by 28 tons and other volatile organic compounds by 372 tons annually. This will cost the company roughly $197 million.

In addition, BP committed to establish 10 air pollution monitoring stations to track the quality of the air outside the refinery's boundary. It is also focused on carrying out a $5 million supplemental environmental project to minimize diesel emissions in areas around the refinery.

According to the company, the agreed-upon capital investments would be carried out over the next few years in close consultation with state and federal officials.

Zacks Rank & Key Picks

Currently, BP carries a Zack Rank #3 (Hold).

Some better-ranked players for investors interested in the energy sector include Sunoco LP (SUN - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) . While Sunoco sports a Zacks Rank #1 (Strong Buy), both Murphy USA and Dril-Quip carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco, which distributes motor fuel to approximately 10,000 convenience stores, has a stable business model with sustainable and predictable cash flows. SUN has witnessed an upward earnings estimate revision for 2023 in the past 30 days.

Murphy USA is a leading retailer of gasoline, operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. MUSA has more than 1,700 stores. It witnessed an upward earnings estimate revision for 2024 in the past seven days.

Dril-Quip is a leading provider of highly engineered equipment, service and innovative technologies that are being employed in the energy sector. DRQ’s balance sheet has zero debt, highlighting a sound financial position.

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