Justice Department reaches settlement with the EPA regarding Tesoro refineries

Two oil refiners have agreed to spend $415 million to install pollution-control equipment at refineries in six Western states to resolve Clean Air Act violations, the Justice Department said Monday. The Consent Decree concerns alleged violations of the federal Clean Air Act by a subsidiary of Tesoro that occurred prior to the acquisition of that entity by Par in September 2013 (the “Acquisition Date”).

The other refineries covered by the settlement are located in Alaska, California, North Dakota, Utah and the state of Washington.

Par Hawaii now operates one of the refineries affected by the settlement and formerly owned by Tesoro.

Tesoro will also pay about $12 million for local environmental projects and a $10.45 million fine.

The settlement “provides important reductions of harmful air pollution in communities facing environmental and health challenges”, said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.

“We take compliance with environmental regulations very seriously and are pleased to have reached agreement on this consent decree that allows us to fully implement the required procedures and investments to further improve our environmental performance”, Tesoro Executive Vice President of Operations Keith Casey said in Tesoro’s statement.

The reductions will include the equivalent of 47,034 tons of carbon dioxide, a greenhouse gas, according to the EPA.

The U.S. Justice Department and the Environmental Protection Agency announced the deal in Seattle, calling it the largest settlement to date of its kind.

“For every volatile compound that doesn’t go into the air, it stays in their system and can be converted into something that they can sell”, Mark Asmundson with the Northwest Clean Air Agency said. Alaska and Hawaii will get $2.1 million, with the rest going to the federal government. In addition to installing infrared cameras, Tesoro will install ultra-low NOx burners on a furnace at its Salt Lake City refinery.

There will be a 30 day public comment period on the consent decree lodged today.

The DOJ and EPA believe that the companies’ refineries exposed residents of Anacortes, along with five other Western locations, to substances in the air that might have heightened cancer risks and aggravated asthma problems in children.

Tesoro officials said in an email that most of the upgrades required under the settlement have been completed or are under way. “This settlement puts new enforcement ideas to work that will dramatically cut pollution and protect communities”.