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Citgo Petroleum Corp. and its refining subsidiary were convicted Wednesday of breaking federal environmental laws by operating two open-air storage tanks without proper emission controls at a refinery in Corpus Christi.

But Citgo was acquitted by a federal jury on charges that it knowingly allowed wastewater in the tanks to expose the atmosphere to illegal levels of benzene, which research has linked to cancer.

Citgo, the Houston-based arm of Venezuela's state-owned oil company, will face fines up to $1 million or twice the economic gain of the violations, whichever is greater, for the felony violations of the Clean Air Act, the Department of Justice said. It also could be put on probation for five years.

U.S. District Court Judge John Rainey set sentencing for Oct. 18.

The company continued to maintain its innocence, saying the huge tanks, known as 116 and 117, were not required to be equipped with roofs or other emission controls.

Citgo attorney Dick DeGuerin said he was disappointed by the verdict, and that the company will appeal.

In the case, Citgo argued that the tanks were not used as oil-water separators, which demand pollution controls under Environmental Protection Agency regulations, but as "equalization" tanks.

"It is unfortunate that the Justice Department has chosen to take the unprecedented step of pursuing criminal charges on matters that are purely regulatory in nature and that are inconsistent with applicable EPA regulations," Citgo said in a statement late Wednesday.

The verdict comes after a monthlong trial in a federal courtroom in Corpus Christi and is the first verdict arising from a 10-count indictment against Citgo last August. The other counts will be taken up in a separate trial scheduled to begin July 9.

A Clean Air Act first

Department of Justice and EPA lawyers said the Citgo case marks the first time that criminal violations of the Clean Air Act have gone to trial rather than being settled out of court.

They said guilty verdicts in two of the four counts addressed by the trial should send a message to other U.S. refiners about the goverment's commitment to enforcing air-quality laws.

"Today's convictions are a strong signal to the industry that emissions controls are not optional and those who knowingly disregard the regulations will face the consequences," said Ronald Tenpas, acting assistant attorney general for the Justice Department's environment and natural resources division.

But Anthony Sabino, professor of law and business at St. John's University in New York, said the biggest message the case may send is that refiners should pause before they take the next case of this kind to court instead of settling. Given the growing public awareness of environmental concerns, the government is likely to keep stepping up enforcement of the Clean Air Act, rather than retreating from it, he said.

Two leading industry trade groups, the National Petrochemical and Refiners Association and the American Petroleum Institute, declined to comment on the potential impact of the case, referring questions to Citgo.

But community and environmental activists who have followed the case closely celebrated the verdict as a first step in getting the companies to acknowledge responsibility for health problems they believe are tied to refineries.

"This is a tremendous victory for so many people that have been unjustly treated by Citgo and other oil refineries for several decades," said Suzie Canales, director of the Citizens for Environmental Justice in Corpus Christi. "The tide is finally starting to turn."

Citgo contends no evidence links the refinery to health problems in the nearby neighborhoods.

Misdemeanor charges

In the trial scheduled for July, Citgo will face five misdemeanor charges, including allegations against the plant's environmental manager and alleged violations of federal migratory bird laws.

Judge Rainey is still considering a separate felony charge alleging Citgo made false statements relating to its compliance with environmental laws.

brett.clanton@chron.com