HOUSTON - The Sierra Club, the largest and oldest U.S. environmental organization, filed a federal lawsuit on Monday against Shell Oil Co and subsidiaries over pollution at a refining and chemical plant complex along the Houston Ship Channel. Shell could face a maximum fine of $32,500 for each of an estimated 1,000 incidents between 2003 and 2007 when the Deer Park, Texas, refinery and chemical plant exceeded levels of pollution allowed under permits issued by Texas regulators.

Shell has been cited by regulators and paid fines for some of the incidents, Joshua Kratka of the National Enviromental Law Center, which represents the Sierra Club and Environment Texas in the lawsuit, told reporters. The fines have not been enough to stop preventable pollution, Kratka said. "Shell is paying to pollute," he said. "Shell is factoring these fines into its costs of operating these facilities."

Shell declined comment on the specifics of the lawsuit, but said the company hoped to continue discussions with the Sierra Club and Environment Texas about the issues raised in the lawsuit. "Shell Deer Park refining and chemical share the goal of the Sierra Club and Environment Texas to improve air quality," the company said in a statement.

Pollution from the refinery and chemical plant is regularly pushed by prevailing Gulf Coast winds to neighborhoods along the ship channel, said a resident of the area. "We don't have a magical fence that stops it from coming to us," said Karla Lands, a resident and business owner in the Houston suburb of Channelview, Texas, north of the Deer Park complex.

A former U.S. Environmental Protection Agency enforcement official said to be successful the organizations will have to prove the state enforcement efforts, which include plans to prevent future malfunctions, were ineffective. "They're going to have to address that these problems have already been addressed," said Richard Alonso, attorney with Bracewell, Giuliani.

A University of Texas study released in 2007 found a possible link between childhood leukemia and living within 2 miles of the Ship Channel's refinery row.

The Sierra Club lawsuit was filed in the U.S. District Court for Southern District of Texas under the U.S. Clean Air Act which allows citizen lawsuits to gain enforcement of the act's provisions. The Deer Park refinery is the eighth-largest U.S. refinery and a 50-50 joint venture between Shell and Mexico's state-owned oil company, Pemex. Shell Oil Co, based in Houston, is the U.S. unit of Royal Dutch Shell Plc.

(By Erwin Seba, Reuters, 07/01/2008)