BP Products North America Inc., a unit of British oil company BP, agreed to spend $161 million on pollution controls, pay another $12 million in penalties, and spend another $6 million on a project to reduce air pollution near its Texas City, Texas refinery.
The settlement with the Department of Justice and the Environmental Protection Agency follows a deadly explosion and fire in March 2005 that killed 15 people and injured more than 170 others.
In the incident, the company has already pleaded guilty to violating the Clean Air Act and agreed to pay a separate fine of $50 million.
The settlement addresses what the government identified as the company's failure to comply with a 2001 consent decree requiring tight controls on benzene during the refining of petroleum.
Benzene is a hazardous air pollutant known to cause cancer, damage the nerve and immune systems, and affect reproduction and development.
BP spokesman Daren Beaudo said the company has spent more than $100 million over the past 15 years on benzene emission controls for the refinery.
"We are pleased to have achieved this settlement and will work to continue reducing emissions and to ensure regulatory compliance at Texas City," Beaudo said.
The government says the new efforts will reduce emissions of benzine and other volatile organic compounds at the site by 6,000 pounds a year.
BP has also agreed to eliminate roughly 51,000 pounds of ozone-depleting hydro-chlorofluorocarbons, often referred to as HCFC's, by modernizing industrial cooling appliances at the refinery.
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