Tesoro Refinery Violates 2016 EPA Court Order
The U.S. Environmental Protection Agency, alongside the U.S. Department of Justice, announced that Tesoro Refining and Marketing Company will pay a $27.5 million penalty for violating a 2016 consent decree ordering the company to reduce air pollution at its petroleum refinery in Martinez, California.
According to the settlement from the end of last month, Tesoro failed to limit air emissions of nitrogen oxides (NOX), a pollutant that contributes to smog.
In May 2020, Tesoro suspended operations at the Martinez refinery and then announced its plan to convert the refinery to a renewable fuels plant. The new agreement reportedly includes requirements to limit air pollution from the future renewable fuels plant.
However, the agreement does not prohibit Tesoro from resuming petroleum refining, but if it does so, Tesoro must install specific air pollution control technology, at an expected cost of $125 million, to ensure stringent NOX emission limits are met.
Additionally, the EPA reports that the settlement requires Tesoro to adhere to strict pollution controls at the facility. The facility is currently undergoing conversion into a renewable fuels plant, which will use renewable sources such as vegetable oils to produce fuels instead of crude oil.
It also sets up a framework for additional pollutant reductions, including significant climate co-benefits. Specifically, the settlement requires Tesoro to forego hundreds of annual emission credits that it could otherwise sell to area sources who could then increase their emissions.
Tesoro Refining and Marketing Company will pay a $27.5 million penalty for violating a 2016 consent decree ordering the company to reduce air pollutants, according to the U.S. Environmental Protection Agency. https://t.co/sOVcEWwKR1— San Francisco Chronicle (@sfchronicle) April 28, 2023
“Today, we are holding Tesoro accountable for its failure to implement court-ordered pollution controls,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division.
“This settlement requires Tesoro to forfeit substantially more air emission credits than the excess emissions associated with its violations, resulting in cleaner air for those who live and work in the San Francisco area.”
“Tesoro failed to meet its requirement to reduce air pollution at the Martinez refinery, and EPA is now taking firm action to hold Tesoro accountable,” said EPA Pacific Southwest Regional Administrator Martha Guzman. “This settlement ensures that Tesoro complies with stringent air pollution limits, to protect neighboring communities regardless of fuel type.”
To mitigate pollution resulting from its violation of the 2016 consent decree, Tesoro has agreed to surrender most of its existing NOX emission trading credits. The company also agreed to forego almost all trading credits from the shutdown of petroleum refining equipment should it convert to a renewable fuels plant.
By requiring Tesoro to surrender existing credits and forego petroleum-related shutdown credits if it converts to a renewable fuels plant, the settlement prevents Tesoro and other local sources from using these credits. The EPA reports that, as a result, the settlement filed last month will limit emissions in the San Francisco Bay Area.
Specifically, if Tesoro resumes petroleum refining, the settlement requirements will reduce annual air emissions by about 261 tons of NOX. If Tesoro converts the facility to a renewable fuels plant, the settlement will result in annual air emissions reductions of about:
The terms of a 2016 federal consent decree, which resolved Clean Air Act violations at the Martinez refinery and five other refineries nationwide, established emission limits for multiple pollutants including NOX. The latest settlement will modify the 2016 settlement, including new requirements that apply whether Tesoro chooses to reopen the Martinez facility as a petroleum refinery or a renewable fuels plant.
There will be a 30-day public comment period on the modification to the 2016 settlement.
Company Background, Previous Fine
Following a deadly explosion in 2010 at its Washington state refinery, the EPA filed a complaint against the Tesoro Refining and Marketing Company for alleged violations uncovered in later inspections. The complaint carried a proposed $718,361 penalty.
Eight separate processes at Tesoro’s Anacortes facility are covered under the EPA Risk Management Program—part of the Clean Air Act—which focuses on training, operational maintenance and safety planning, the agency said at the time.
According to the EPA, Tesoro’s Anacortes facility handled thousands of pounds of chemicals, such as isobutane, pentane, and hydrogen every day. The refining process combines these chemicals into a flammable mix that can cause catastrophic harm to workers, the environment and surrounding communities if RMP requirements aren’t closely followed.
The EPA complaint, filed in April 2016, outlined seven violations ranging from incomplete or inadequate written process safety information to operational deviations and hazards to not making written operating procedures easily accessible to employees. The alleged violations were recorded during EPA inspections to determine Tesoro’s compliance with the RMP requirements in January and October 2011.
Tesoro, which operates six refineries in five western states and Alaska with a combined capacity of 875,000 barrels per day, was in its fifth year of appealing the $2.4 million in fines levied against it by the state for the 2010 explosion.
A report issued by the U.S. Chemical Safety Board (CSB) in 2014 determined that the refinery experienced a “catastrophic rupture of a heat exchanger in the Catalytic Reformer/Naphtha Hydrotreater unit” as a result of High Temperature Hydrogen Attack (HTHA).
In its 160-page report, CSB listed recommendations for the U.S. Environmental Protection Agency; Washington legislature and governor; L&I; the American Petroleum Institute; Tesoro; and the United Steelworkers union to address a variety of issues that led to the explosion so that future failures, such as the one that occurred in Anacortes, don’t happen somewhere else.