Tesoro and Par Clean Air Act Settlement

Settlement Resources

(Washington, DC – July 18, 2016) EPA and the U.S. Department of Justice today announced a $425 million settlement with subsidiaries of Tesoro Corp., and Par Hawaii Refining that will increase public health protections by reducing air pollution at six refineries and resolving alleged Clean Air Act violations at those same refineries. Under the settlement, the companies will spend about $403 million to install and operate pollution control equipment and Tesoro will spend about $12 million to fund projects that will improve public health in local communities previously impacted by pollution. Tesoro will also pay a civil penalty of more than $10 million to resolve its alleged Clean Air Act violations.

On this page:

Overview of Companies

The consent decree covers refineries located in Kenai, Alaska; Martinez, California; Kapolei, Hawaii; Mandan, North Dakota; Salt Lake City, Utah; and Anacortes, Washington.

Tesoro Corp., is headquartered in San Antonio, Texas, and its subsidiaries, Tesoro Alaska Company LLC, Tesoro Logistics L.P., and Tesoro Refining & Marketing Company LLC operate five of the six refineries covered by this settlement. Par Pacific Holdings, Inc., a parent corporation of Par Hawaii Refining, purchased the Kapolei, Hawaii refinery from Tesoro in 2013.

Violations

The complaint alleges violations of the following Clean Air Act requirements that are applicable to the petroleum refining industry:

  • New Source Review/Prevention of Significant Deterioration (NSR/PSD), 40 C.F.R. Parts 51 and 52;
  • New Source Performance Standards (NSPS), 40 C.F.R. Part 60, Subparts A, H, J, Kb, GG, GGG, GGGa, and QQQ;
  • National Emission Standards for Hazardous Air Pollutants (NESHAP), 40 C.F.R. Part 61, Subparts A and FF, and Part 63, Subparts A, CC, and UUU;
  • Title V of the Clean Air Act, 40 C.F.R. Part 70; and
  • Other laws, permits, and regulations of Alaska, California, Hawaii, North Dakota, Utah, and Washington, including state implementation plan rules and other federally-enforceable state and local regulations approved under the Clean Air Act.

Injunctive Relief

Flaring (all six refineries)

  • Installation of flare gas recovery systems.
  • Flare minimization:
    • Implementation of a detailed plan for reducing waste gas to flares.
    • A refinery-wide limit on flaring (a “flare cap”).
  • Flare efficiency:
    • Install and operate enhanced monitoring systems and equipment on flares.
    • Operate with a minimum of 96.5 percent combustion efficiency at all times when waste gases are vented.

Enhanced Leak Detection and Repair (ELDAR) Program (all six refineries)

  • Training, including refresher courses, for refinery personnel with ELDAR responsibility.
  • Required ELDAR compliance audits.
  • Strict internal leak definitions (500 parts per million (ppm) for valves and 2000 ppm for pumps).
  • Internal first attempt at repair at 100 ppm for valves.  
  • More frequent monitoring than required by regulation.
  • Limitation on use of “delay of repair” exception.
  • Installation of certified low-leaking valve or certified low-leaking valve packing technology in all new applications.

Refinery-Specific Injunctive Relief

Kenai, Alaska

NSPS and NESHAP

  • Compliance with NSPS Subpart J requirements for the refinery fuel gas system, NSPS Subpart QQQ requirements for the refinery wastewater system, NSPS KKKK requirements for the refinery stationary combustion turbines, and NESHAP UUU requirements for the refinery hazardous air pollutants.
  • Upgrade the hydrogen sulfide (H2S) or total sulfur continuous monitoring system for the main refinery flare and the refinery fuel gas system.
  • Install one or more above ground storage tank(s) sufficient to replace the capacity of the API canals, with each such tank meeting the NSPS Subpart QQQ requirements for oil-water separators.

Ambient Sulfur Dioxide (SO2) Monitoring Requirements

  • Report each acid gas flaring event with information related to the event, the cause of the event, and the measures available to reduce the likelihood of recurrence.
  • If there are three acid gas flaring events within any 12-month period, then install an ambient SO2 monitoring system and continuously measure and report ambient SO2 concentrations. 

Third party audit

  • Implement a third party auditing program to evaluate compliance with requirements in the Title V permit. 

Martinez, California

Fluid Catalytic Cracking Unit

  • Final nitrogen oxides (NOx) emission limits of 40 ppm on a 7-day rolling average basis and 20 ppm on a 365-day rolling average basis.
  • Carbon monoxide (CO) emission limit of 180 ppm on a 365-day rolling average basis.
  • NOx continuous emissions monitoring systems on stack to demonstrated compliance with NOx limits.

Delayed Coker

  • Coke drum depressurization standard of 2.0 pounds per square inch gauge to control volatile organic compounds (VOCs) and other pollutants.
  • Coker quench cycle requirements to control VOCs and other pollutants, including:
    • Restrictions on quench water quality and feed; and
    • Quench water fill time of at least five hours per cycle.
  • At least 30-foot walls surrounding “coke pit” to control particulate matter (PM). 

Sulfuric Acid Plant

  • SO2 emission limits of 1.85 pounds per ton of sulfuric acid produced on a 3-hour rolling average basis and 1.7 pounds per ton of sulfuric acid produced on a 365-day rolling average basis.
  • Implement a monitoring plan and an operation and maintenance plan.
  • Comply with SO2, acid mist, and opacity standards of NSPS Subpart H.

Sulfur Recovery Plant

  • Provides option to route sulfur pit emissions from sulfur recovery plant to sulfuric acid plant, subject to sulfuric acid plant limits.

Kapolei, Hawaii

Heaters and Boilers

  • Ultra-low NOx burners or flue gas recirculation on 11 heaters and boilers.
  • NOx limits on 11 heaters and boilers.
  • Restrict fuel oil burning in combustion units to control SO2.
  • Comply with NSPS Subpart J or Subpart Ja at all heaters and boilers.
  • Install NOx continuous emissions monitoring systems, upgrade or replace H2S continuous monitoring systems, and implement a operation and maintenance plan for the systems.

Sulfur Recovery Plant

  • SO2 emission limit of 180 ppm on a 365-day rolling basis.
  • Comply with NSPS Subpart Ja.
  • Install SO2 continuous emissions monitoring systems and implement an operation and maintenance plan for those systems.

Storage Tanks:

  • Comply with NESHAP CC at nine tanks and NSPS Kb at four tanks.

Mandan, North Dakota

Fluid Catalytic Cracking Unit

  • Conduct annual PM stack testing at the unit.

Continuous monitoring system operation and maintenance plan

  • Develop a comprehensive continuous monitoring system operation and maintenance plan that is designed to enhance the performance of system components, improve system accuracy and stability, and minimize periods of system downtime.

Continuous monitoring system Root Cause Failure Analysis

  • Conduct a continuous monitoring system root cause failure analysis and develop a downtime corrective action plan for any continuous monitoring system having a downtime greater than 5 percent of the total time for each of two consecutive calendar quarters.    

Salt Lake City, Utah

Fluid Catalytic Cracking Unit

  • Install a non-regenerative wet gas scrubber and LoTOx System or equivalent NOx control technology on the unit.
  • NOx emission limits of 20 ppm on a 7-day rolling average basis and 10 ppm on a 365-day rolling average basis.
  • SO2 emission limits of 18 ppm on a 7-day rolling average basis and 10 ppm on a 365-day rolling average basis.
  • CO emission limits of 500 ppm on a one-hour block average and 100 ppm on a 365-day rolling average.
  • Install NOx, SO2, and CO continuous emissions monitoring systems to demonstrate compliance with these limits.
  • Comply with SO2, CO, and PM standards of NSPS Subpart J for the unit.

Anacortes, Washington

Benzene waste NESHAP

  • Complete a third party audit of its benzene waste streams and correct any NESHAP Subpart FF noncompliance identified.

Mitigation Projects

Tesoro will implement three mitigation projects at an estimated cost of $12.2 million.

School Bus Replacement Project

Tesoro will contribute funds to the Mount Diablo Unified School District in Contra Costa County, California to cover the difference in cost of purchasing a minimum of four new compressed natural gas (CNG) school buses rather than new petroleum diesel fueled buses. Tesoro plans to satisfy this obligation by contributing $1 million to the Mount Diablo Unified School District. Replacing existing school buses that run on diesel with vehicles that are powered by CNG decreases emissions of NOX, SO2, PM, greenhouse gases, and other air pollutants.

Infrared Gas-Imaging Camera Project

Tesoro will purchase and employ one infrared gas-imaging camera at each of the following refineries:  Anacortes, Kenai, Mandan, and Salt Lake City. The estimated cost of the mitigation project is $400,000 ($100,000 per camera). Tesoro will use the infrared gas-imaging cameras to locate fugitive emissions of VOCs and take corrective action to address fugitive emissions identified by the infrared gas-imaging camera. 

Salt Lake City Ultraformer Furnace Project

Tesoro will install ultra-low NOx burners on the ultraformer furnace at its Salt Lake City refinery and, following installation of the ultra-low NOx burners and performance testing, establish a new NOx limit for this unit. The estimated cost of this mitigation project is $10.8 million.  Installation of ultra-low NOx burners on the ultraformer furnace will decrease NOx emissions by an estimated 11 tons per year from a unit at the refinery that did not have any violations and would not otherwise be upgraded with lower emitting burners. 

Pollutant Reductions

When fully implemented, the new controls and requirements under the consent decree are estimated to achieve emissions reductions in tons per year (tpy) of the following pollutants:

  • NOx emissions by 407 tpy
  • SO2 emissions by 773 tpy
  • VOCs emissions by 1,140 tpy
  • Hazardous air pollutants emissions by 27 tpy
  • Hydrogen sulfide emissions by 20 tpy
  • Greenhouse gases (as carbon dioxide equivalent) emissions by 47,034 tpy
  • Additional reductions of PM and CO emissions

Health Effects and Environmental Effects

  • Nitrogen Oxides – Nitrogen oxides can cause ground-level ozone, acid rain, particulate matter, global warming, water quality deterioration, and visual impairment. Nitrogen oxides play a major role, with volatile organic chemicals, in the atmospheric reactions that produce ozone.  Children, people with lung diseases such as asthma, and people who work or exercise outside are susceptible to adverse effects such as damage to lung tissue and reduction in lung function.
  • Sulfur Dioxide – High concentrations of SO2 affect breathing and may aggravate existing respiratory and cardiovascular disease. Sensitive populations include asthmatics, individuals with bronchitis or emphysema, children and the elderly. Sulfur dioxide is also a primary contributor to acid deposition, or acid rain.
  • Volatile Organic Compounds - VOCs, along with NOX, play a major role in the atmospheric reactions that produce ozone, which is the primary constituent of smog.  People with lung disease, children, older adults, and people who are active can be affected when ozone levels are unhealthy. Ground-level ozone exposure is linked to a variety of short-term health problems, including lung irritation and difficulty breathing, as well as long-term problems, such as permanent lung damage from repeated exposure, aggravated asthma, reduced lung capacity, and increased susceptibility to respiratory illnesses such as pneumonia and bronchitis.
  • Hazardous Air Pollutants – HAPs, also known as toxic air pollutants or air toxics, are those pollutants that are known or suspected to cause cancer or other serious health effects, such as reproductive effects or birth defects, or adverse environmental effects. Benzene is a HAP.
  • Greenhouse Gases – The release of GHGs into the atmosphere traps heat.  The continued release of GHGs at or above the current rate will increase average temperatures around the globe.  Increases in global temperatures will most likely change our planet’s climate in ways that will have significant long-term effects on people and the environment.

Civil Penalty

Tesoro will pay a $10,450,000 civil penalty as follows:

  • $8,050,000 to the United States;
  • $1,300,000 to the State of Alaska;
  • $850,000 to the State of Hawaii; and
  • $250,000 to the Northwest Clean Air Agency.

State Partners

The State of Alaska, State of Hawaii, and the Northwest Clean Air Agency participated in the settlement negotiations as co-plaintiffs and are signatories to the consent decree.

Comment Period

The proposed settlement is lodged in the U.S. District Court for the Western District of Texas. The consent decree will be subject to a 30-day public comment period and final court approval. Information on how to comment on the consent decree is available on the Department of Justice website.

Petroleum Refinery National Initiative Case Results

Through multi-issue, multi-facility settlements or detailed investigations and aggressive enforcement, this national priority addresses the most significant Clean Air Act compliance concerns affecting the petroleum refining industry.

See EPA’s National Petroleum Refining Initiative website for more information.

For more information, contact:

Patrick W. Foley
Senior Environmental Engineer
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
(202) 564-7978
Patrick Foley

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Last updated on April 9, 2024