Western refiners announce $425 million settlement to reduce emissions

SEATTLE – The Department of Justice and the U.S. Environmental Protection Agency today announced a $425 million settlement with subsidiaries of Tesoro Corp., and Par Hawaii Refining that resolves Clean Air Act violations and steps to reduce air pollution at six refineries.

Under the settlement, the two companies will spend about $403 million to install and operate pollution control equipment, and Tesoro will spend $12 million to fund environmental projects in local communities previously impacted by pollution. Tesoro will also pay a $10.45 million civil penalty.

The settlement resolves ongoing Clean Air Act violations at refineries in Kenai, Alaska; Martinez, California; Kapolei, Hawaii; Mandan, North Dakota; Salt Lake City, Utah; and Anacortes, Washington. Of the $10.45 million civil penalty that Tesoro will pay, the U.S. treasury will receive $8,050,000, and co-plaintiffs including the states of Alaska and Hawaii, and the Northwest Clean Air Agency will share $2.4 million.

Once the companies install the pollution controls required by the settlement, annual emissions reductions at the six refineries will total an estimated 773 tons of sulfur dioxide, 407 tons of nitrogen oxides, 1,140 tons of volatile organic compounds, 27 tons of hazardous air pollutants, 20 tons of hydrogen sulfide and the equivalent of 47,034 tons of carbon dioxide. The settlement will reduce greenhouse gas emissions from flaring at the subject refineries by over 60%.

The settlement addresses a range of alleged leak detection and repair and flaring violations under the Clean Air Act at all six refineries. The settlement also addresses various violations of state clean air laws, programs and permits.

in addition to installing pollution control equipment, the settlement requires Tesoro to use a series of advanced tools to monitor pollution. Tesoro will use infrared gas-imaging cameras at four refineries to supplement the company’s enhanced leak detection and repair program. Tesoro will also pay for third-party auditing of compliance with the enhanced leak detection and repair requirements at all six facilities.

Under the settlement, Tesoro will also spend about $12.2 million to fund three pollution mitigation projects.  In addition to installing infrared cameras, Tesoro will install ultra-low NOx burners on a furnace at its Salt Lake City refinery.  Tesoro estimates that the cost of this mitigation project is $10.8 million and is expected to result in significant quantifiable reductions in NOX emissions.  Tesoro will also contribute $1 million to fund the replacement of old diesel school buses in Contra Costa County, California, with new compressed natural gas (CNG) school buses.

This settlement is part of EPA’s National Enforcement Initiative to control harmful emissions from large sources of pollution, which includes refineries, under the Clean Air Act’s Prevention of Significant Deterioration requirements.  The total combined SO2 and NOx emission reductions secured from all settlements under this initiative will exceed 2 MMtpa once all the required pollution controls have been installed and implemented.