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Cenex Refining Settlement

The Justice Department and the Environmental Protection Agency announced comprehensive Clean Air Act settlements with Coastal Eagle Point Oil Company (CEPOC), CHS Inc. (Cenex), Ergon-West Virginia Inc. and Ergon Refining Inc. (Ergon). These companies have a collective production capacity of approximately 285,000 barrels per day and will reduce air emissions by more than 3,900 tons per year under the terms of settlements being filed with U.S. District Courts in New Jersey, Montana and Mississippi.

These agreements, which will affect three percent of domestic refining capacity, address nitrogen oxide, sulfur dioxide and particulate emissions, pollutants that can cause serious respiratory problems and exacerbate childhood asthma. The refiners will also reduce other emissions of hazardous air pollutants, including benzene, at refineries located in Vicksburg, Mississippi; Laurel, Montana; Westville, New Jersey; and Newel, West Virginia.

The four refineries will install and implement innovative control technologies to reduce emissions from their largest emitting units. These activities will reduce annual emissions of sulfur dioxide by approximately 2,800 tons and nitrogen oxide by approximately 1,100 tons. In addition, each refinery will significantly upgrade its leak-detection and repair practices, implement programs to minimize the number and severity of flaring events and adopt new strategies for ensuring continued compliance with benzene waste requirements under the Clean Air Act's National Emissions Standards for Hazardous Air Pollutants.

These refiners will pay civil penalties totaling more than $2.9 million and will implement supplemental and other environmental projects valued at over $1.6 million to reduce idling truck emissions in New Jersey and provide improved equipment for first responders in Mississippi and West Virginia. The States of Mississippi, Montana, New Jersey and West Virginia actively participated and are joining in these settlements.

Experience under previous global refinery consent decrees suggests that flaring at these refineries may be reduced by more than 50 percent. Flaring is a common concern for communities in the vicinity of refinery operations, often affecting minority and low income populations. Flaring is a high temperature oxidation process used to burn combustible components of gases produced by refining operations.

These settlements are the latest in a series of multi-issue, multi-facility settlements being pursued by EPA under its Petroleum Refinery Initiative. In the past three years, several major refiners have entered into global settlements that reflect similarly comprehensive approaches for addressing compliance concerns across the industry. The latest consent decrees, together with those covering Koch
Petroleum, BP Exploration & Oil, Motiva, Equilon and Deer Park Refining, Marathon Ashland Petroleum, Conoco, Navajo Refining and Lion Oil settlements, account for 37 refineries and 35 percent of domestic refining capacity.

The Justice Department and the EPA also announced a separate, narrower agreement with National Cooperative Refining Association (NCRA). NCRA will pay a penalty and implement supplemental environmental projects collectively valued at over $1.8 million. The State of Kansas participated and will join in this settlement.

After lodging, each settlement will be open to public comment for 30 days.

For additional information, contact:

Patrick W. Foley
Senior Environmental Engineer
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-7978