July 18, 2016 / 5:30 PM / 3 years ago

Tesoro, Par Hawaii settle with U.S. over air quality violations

WASHINGTON (Reuters) - U.S. oil refiners Tesoro Corp and Par Hawaii Refining reached a $425 million settlement with the United States on Monday to resolve air quality violations at six refineries in Western states, the government announced on Monday.

The Tesoro oil refinery is viewed from the air in Carson, California August 5, 2015. REUTERS/Mike Blake

The accord requires the companies to invest $403 million in new equipment to better control air emissions at operations in Alaska, Northern California, North Dakota, Utah, Hawaii and Washington, the Justice Department and the Environmental Protection Agency said.

Tesoro is required to pay a $10.45 million civil penalty and spend about $12 million to fund environmental projects in local communities that were affected by pollution, the government added.

“We 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,” said Keith Casey, Tesoro’s executive vice president for operations.

Tesoro sold its Kapolei refinery to Par Pacific Holdings, the parent company of Par Hawaii Refining, in 2013.

Par Hawaii Refining, its subsidiary, said in a statement that Tesoro is obligated to “pay all applicable fines and penalties related to the consent decree,” which is estimated at $30 million.

It will install leak detection and repair equipment at its refinery and make additional improvements to reduce air pollutants and emissions, the company said.

John Cruden, the assistant attorney general for the Justice Department’s Environmental and Natural Resources Division, said the settlement requires “cutting edge technology to address global issues like climate change.”

Monday’s settlement addresses a variety of allegations, including leak detection, repair and flaring violations of the Clean Air Act.

Once the new technology is installed, the government expects annual emissions reductions at the six refineries to total an estimated 773 tons of sulfur dioxide, 407 tons of nitrogen oxide, 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.

“This settlement puts new enforcement ideas to work that will dramatically cut pollution and protect communities,” said Cynthia Giles, the assistant administrator for the EPA’s enforcement and compliance assurance.

The Justice Department, the EPA, the attorneys general for Alaska and Hawaii, and the Northwest Clean Air Agency filed the their complaint in the U.S. District Court for the Western District of Texas.

There will be a 30-day public comment period on the proposed settlement.

By Valerie Volcovici and Sarah N. Lynch; Editing by Alan Crosby and Matthew Lewis

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