An oil refinery is poisoning the air in Colorado due to poor maintenance and inspection, according to a new report from federal environmental regulators. But instead of devoting money to deal with the problems, the refinery’s owner, Suncor Energy, has massively increased payouts to shareholders — at the urging of one of the world’s largest hedge funds.

The case illustrates how Wall Street’s investments in fossil fuels directly threatens the health of local residents and, in particular, vulnerable populations.

The Canadian oil and gas giant Suncor has made headlines in recent years for a series of chemical releases and air quality violations at its 92-year-old refinery just outside Denver. In its new report, the Environmental Protection Agency (EPA) found that the problems are systemic.

“The Suncor petroleum refinery in Commerce City, Colorado, may experience more air quality incidents because of inadequacies in preventative maintenance, testing, and inspection of liquid level control systems and electrical equipment,” the EPA declared last week.

The inadequacies persist despite repeated fines and investigations from state and federal regulators. While Suncor has failed to make basic improvements to the refinery’s procedures and staffing, the company has delivered more than $12 billion to shareholders since the start of 2022.

In response to aggressive pressure from Elliott Management, a hedge fund headed by the Republican megadonor and ruthless speculator Paul Singer, Suncor last year increased its stock buybacks by more than 120 percent to $5.1 billion, and its dividends by 67 percent to $2.6 billion.

Suncor and Elliott did not respond to The Lever’s requests for comment.

Taken from Suncor’s 2022 annual report.

Poison For Profit

Suncor — a $39 billion company based in Calgary, Alberta — operates the only major refinery in Colorado. The facility is based in Commerce City, a low-income Denver suburb that has a large Hispanic population.

The Denver area has the sixth-worst air quality among U.S. cities for ozone, a pollutant that damages the tissue of the respiratory tract and is correlated with a high incidence rate of asthma and decreased respiratory functions. Air quality advocates say that Suncor’s refinery has been a significant contributor to the region’s dangerously high ozone levels.

“It doesn't surprise me that Suncor is choosing their dividends and profits despite the harm they have caused to our community,” said Ean Tafoya, a Denver-based environmental activist. “It’s time for a just transition — planned retirement for this facility and for remediation. Not only do communities get poisoned, they are also locking us into long-term climate change. I’m disgusted that we have a system that allows oil companies to do this, even though they lied to the public about the dangers of climate change.”  

In May, state health officials sent out alerts to Commerce City residents near the refinery directing them to close their doors and windows and stay inside after an accidental toxic chemical release by Suncor, for the second time in a month. Commerce City residents typically avoid drinking the tap water due to the impacts of the Suncor refinery.

Suncor has been repeatedly fined for safety and health violations at its facilities in the United States, generating more than $6.5 million in penalties since 2008, according to data reviewed by The Lever. That includes a record $4 million in fines for air quality violations issued by Colorado environmental regulators in 2020 for the Commerce City refinery.

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As Suncor poisoned the community, the firm increased its dividends after Elliott Management, a $55 billion hedge fund, launched a pressure campaign last year targeting the company’s management — and specifically, the company’s decision to cut its dividend shortly after the start of the COVID-19 pandemic, when the firm was facing a multi-billion dollar quarterly loss.

Elliott and other so-called “activist” hedge funds employ a similar playbook: They purchase a block of stock and then target a company’s management and seek to cut costs and increase dividends and stock buybacks, generating profits for the firm and other shareholders.

As part of its campaign, the hedge fund declared that Suncor’s dividend reduction “shook investor confidence.”

Elliott’s campaign materials further called on Suncor to “increase capital return to shareholders from 50 to 80 percent of discretionary cash flow after dividends,” and asserted that stock buybacks — when a company repurchases its own stock from shareholders to artificially drive up share prices — would be an “attractive use of capital.”

Since the start of Elliott’s campaign, Suncor has significantly increased its dividends and stock buybacks. The company repurchased $5.1 billion in stock last year, according to its annual report, up from $2.3 billion in 2021.

Elliott has now appointed four of the 13 members of the company’s board of directors, despite holding just 0.75 percent of the outstanding shares of the company, suggesting that Elliott’s slash-and-burn tactics have support from the company’s major shareholders, which mainly include mutual funds like Dodge & Cox and the Royal Bank of Canada’s asset management arm.

Mutual funds typically invest in a broad range of stocks, paying investors reliably higher dividends, and usually don’t interfere in the companies in which they invest.

Archived Elliott Management Website,

While Elliott attacked Suncor’s safety record as part of its shareholder campaign, the company’s efforts to boost Suncor’s payouts to shareholders means the company has less money to invest in the workers and technology they need to resolve the air quality problems identified by the EPA.

These problems appear to be part of a pattern. The EPA’s report on the consistent inadequacies at Suncor’s Commerce City refinery follows the company’s 2020 settlement with the state over more than 100 air quality violations at the facility.

In March 2020, Suncor entered into a $9 million settlement with the Colorado Department of Public Health and the Environment (CDPHE) over the refinery, the largest penalty against a single facility in state history. Of that sum, $4 million went towards fines and community projects, while $5 million was reserved for a consulting company to investigate problems at the facility.

That consultant’s report was partially used by the EPA to come to its sweeping conclusions about the safety of the Suncor refinery. According to the EPA, “from 2016-2020, Suncor had the greatest number of tail gas incidents that caused releases of excess sulfur dioxide,” compared to 11 other refineries. State permits for the Suncor refinery in Commerce City were repeatedly delayed after they expired, allowing the refinery to operate unpermitted. The EPA vetoed an initial permit from the CDPHE last March, before issuing a revised permit in September with expanded monitoring and toxic chemical release disclosure requirements.