EPA v. Tesoro Refining & Marketing Company LLC, et al. (NC) (Lead)

Case summary

EPA and DOJ reached a $425-million settlement with subsidiaries of Tesoro Corporation, and Par Hawaii Refining that resolves alleged Clean Air Act violations at six petroleum refineries in Alaska, California, Hawaii, North Dakota, Utah, and Washington. The settlement addresses a range of leak detection and repair and flaring violations at all six refineries, as well as violations of the following programs and standards at specific refineries: (i) the Prevention of Significant Deterioration and Non-Attainment New Source Review permit programs; (ii) New Source Performance Standards; (iii) National Emission Standards for Hazardous Air Pollutants; and (iv) state clean air laws, programs, and permits. Under the settlement, the two companies will spend about $403 million to install and operate pollution controls, and Tesoro will spend about $12.2 million to fund three environmental projects in local communities previously impacted by pollution. Tesoro will also pay a civil penalty of $10.45 million, of which the United States will receive $8.05 million, Alaska will receive $1.3 million, Hawaii will receive $850,000, and the Northwest Clean Air Agency will receive $250,000. Once implemented, the pollution controls required by the settlement will reduce annual emissions at the six refineries by 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 two refineries in Region 9 are located in Martinez, California, and Kapolei, Hawaii. As part of the $425-million settlement, Tesoro Refining & Marketing Company will spend an estimated $24 million to install and operate pollution controls at its Martinez refinery and $1 million to fund the replacement of old diesel school buses with at least four new compressed natural gas school buses for the Mount Diablo Unified School District in Contra Costa County, California. Par Hawaii Refining will spend an estimated $47 million to install and operate pollution controls at its refinery in Kapolei, which was formerly owned by Tesoro Corporation. On April 27, 2023, EPA and DOJ lodged a Consent Decree (CD) modification to settle Tesoro Refining & Marketing Company's violation of the 2016 CD. Specifically, Tesoro (an indirect subsidiary of Marathon Petroleum Corp.) failed to comply with a NOX emission limit at its Martinez, California, petroleum refinery's fluid catalytic cracking unit (FCCU). Since Tesoro suspended operations at the Martinez Refinery in May 2020, the CD modification has two sets of injunctive relief requirements. If Tesoro resumes petroleum refining, it must first install selective catalytic reduction control technology on the FCCU and comply with more stringent NOX emission limits at both the FCCU and a large boiler. However, if Tesoro converts the idled refinery to a renewable fuels facility, it must render the FCCU and large boiler permanently inoperable, surrender permits for dozens of units, and comply with new requirements for heaters, boilers, flares, and leaks. On March 16, 2023, Tesoro provided notice that the refinery will convert to a renewable fuels facility. Thus, Tesoro must comply with the renewable fuels injunctive relief requirements of the CD modification, which also requires Tesoro to surrender most of its existing NOX emission credits and forego almost all trading credits from the shutdown of petroleum refining equipment (the estimated cost of such credits is $20,202,420). These CD modification requirements will result in annual air emissions reductions of about 440 tons of NOX, 327 tons of SO2, 697 tons of CO, 69 tons of VOC, 301 tons of PM2.5, and 1,342,025 metric tons of CO2e. On December 15, 2023, DOJ confirmed receipt of Tesoro's payment of $32,013,212.10 in civil penalty ($27,500,000 base penalty and $4,513,212.10 in interest accruing from November 2020).

Defendants (1)

• Tesoro Refining & Marketing CompanyNamed in complaintNamed in settlement

Facilities (11)

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO HAWAII REFINERY

  91-325 KOMOHANA STREET, KAPOLEI, HI, 96707

  Registry ID: 110000486322

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

• TESORO HAWAII REFINERY

  91-325 KOMOHANA STREET, KAPOLEI, HI, 96707

  Registry ID: 110000486322

• TESORO REFINING & MARKETING COMPANY

  150 SOLANO WAY, AVON REFINERY, MARTINEZ, CA, 94553

  Registry ID: 110071349304

Statutes cited

• CAA 112 — Hazardous Air Pollutants
• CAA 173 — New Source Review Permit Requirements
• CAA 502 — Operating Permits (Title V)
• CAA 165 — Prevention of Significant Deterioration (PSD)

Enforcement conclusions (2)

• Tesoro Refining & Marketing Company LLC, et al. (NC) (Lead)entered 2016-09-28

  Primary law: CAA

  Federal penalty: $2,683,333 · State/local: $850,000

• Tesoro Refining & Marketing Company LLC, et al. (NC) (Lead)entered 2023-11-29

  Primary law: CAA

  Federal penalty: $27,500,000

Timeline (6 milestones)

• 2010-09-29Supplemental Referral-Other
• 2010-09-29Referred To Dept Of Justice
• 2010-09-30Enforcement Action Data Entered
• 2016-07-18Complaint Filed With Court
• 2023-04-27Final Order Lodged
• 2023-11-29Final Order Entered