Chinese city lashes PetroChina unit over chemical leaks

PetroChina unit agrees to remedy operations after Lanzhou authorities take company to task over string of polluting incidents since August

PUBLISHED : Sunday, 11 January, 2015, 11:50pm
UPDATED : Monday, 12 January, 2015, 8:08am

Lanzhou Petrochemical, a subsidiary of oil and gas giant PetroChina, has agreed to fix its problems "immediately" after a rare public rebuke for a string of serious pollution leaks.

The Lanzhou city government in Gansu province demanded on Friday that Lanzhou Petrochemical apologise to the city's 3.6 million residents for four serious air and water contamination incidents in the past few months, according to China National Radio.

The Lanzhou authorities said that since August, the company - the biggest petrochemical enterprise in western China - had been responsible for leaks of ethylene and ammonia and two machinery failures at one of its plants that had resulted in plumes of black smoke.

It is rare for a local government to take a state-owned enterprise to task because the companies are usually key taxpayers and contributors to local economies.

In a statement released to some state media outlets on Saturday night, Lanzhou Petrochemical said it "sincerely accepted the supervision of the government and the public", pledging to implement about 20 new rules to monitor its plants and equipment, the China News Service reported.

It is the first time a local government has publicly challenged a state owned giant over pollution since the country's revised Environmental Protection Law became into effect on January 1. The law makes local governments at or above the county level responsible for enforcing its provisions.

Companies that violate the law face fines that accrue for every day that they fail to rectify problems.

Ma Jun, from the Institute of Public and Environmental Affairs, said the rebuke was a positive step. "It is a good start to see local governments beginning to inspect and challenge polluting giant state-run companies under the new Environmental Protection Law, even though they used to contribute a lot to the local economy," Ma said.

He also said that Lanzhou residents had complained about pollution from the company's plants well before the ones identified by the city authorities.

On April 11, the city warned residents not to drink tap water for 24 hours after benzene levels 10 times higher than national standards were reported in local supplies. The benzene was later traced to underground contamination from leaks from Lanzhou Petrochemical sites.

China Business Journal cited an unnamed company source as saying that the local government wanted to move the operations further out of the city, but the company was resisting the move because it would cost billions of yuan. Lanzhou Petrochemical can process 10.5 million tonnes of crude oil and produce 700,000 tonnes of ethylene a year.