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The United States government is responsible for some of the costs incurred and will continue to incur by ExxonMobil Corporation (NYSE: XOM) in cleaning up the environmental pollution caused by its production of aviation gas and rubber during World War II and the Korean War. On August 19, U.S. District Court Chief Judge Lee H. Rosenthal ruled that the U.S. must reimburse Exxon $20.3 million for its share in the costs in wartime environmental pollution cleanup.

Why U.S. gov’t. is liable for a portion of wartime environmental pollution cleanup?

In her ruling, Chief Judge Rosenthal explained that the U.S. government “exerted substantial control” over the refineries owned by Exxon in Baytown, Texas and Baton Rouge, Louisiana. During World War II and the Korean War, Exxon converted both refineries to produce aviation gas and synthetic rubber. The corporation operated the refineries under wartime contracts with the U.S. government. At the time, the company and the federal government’s priority was to fulfill the needs of the military to win the war. “During the war years, the full slate of products Exxon produced in connection with making avgas were essential war products. The government exerted substantial control over the refineries’ actions, including decision on how to use raw materials and labor. This control makes the government responsible for a share of remediation costs, including costs related to the refineries’ delays in implementing certain waste-management improvements,” wrote Chief Judge Rosenthal in her ruling. She ruled that the U.S. government is liable for an allocated share of $24.67% for past response costs incurred by Exxon at the Baytown refinery. The federal government is also responsible for an allocated share of 35.54% for past response costs incurred by the company at the Baytown Ordnance Works/Tankfarm 3000 Area. At the Baton Rouge refinery, the U.S. government is responsible for an allocated share of 14.4% for past response costs. The U.S. government is liable for its share in the wartime environmental pollution cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) also known as Superfund. Under the law, parties potentially responsible for contaminating sites with hazardous wastes must pay the costs for environmental cleanup.

Exxon and U.S. lawyers worked hard to resolve the issues

Exxon sued the U.S. government in 2010 and 2011, “seeking reimbursement for some of the costs it paid and will continue to pay” to address environmental damages caused by its production of products for the military during the wars.