Enforcement

Rocky Mountain Pipeline Clean Air Act Settlement

(Washington, DC - May 4, 2011) The U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department today announced a settlement with Rocky Mountain Pipeline System, LLC, Western Convenience Stores, Inc., and Offen Petroleum, Inc. to resolve claims that they illegally mixed and distributed more than 1 million gallons of gasoline that did not meet Clean Air Act emissions and fuel quality requirements. The companies will pay a $2.5 million civil penalty and conduct an environmental project designed to offset the harm caused by their failure to meet federal gasoline quality requirements. Gasoline that does not meet Clean Air Act standards for fuel can result in increased emissions from car tailpipes, which can harm Americans' health, affect vehicle performance, and in some cases can damage engines and emission controls.

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Overview of Company

Rocky Mountain Pipeline System, LLC (Rocky Mountain) owns and operates petroleum product terminals in Dupont and Fountain, Colo. Rocky Mountain is an indirect subsidiary of Plains All American Pipeline, L.P., which is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of refined products and other petroleum products.

Western Convenience Stores, Inc. (Western) owns and operates retail gasoline stations in Colorado and Nebraska.

Offen Petroleum, Inc. (Offen) owns and operates retail gasoline stations in Denver and distributes gasoline and diesel fuel to customers in Colorado and Wyoming.

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Violations

The Defendants produced gasoline at Rocky Mountain's terminals in Dupont and Fountain by blending natural gasoline and ethanol with previously certified gasoline (PCG) in tanker trucks. Natural gasoline is a byproduct of natural gas production.

Section 211 of the Clean Air Act allows refiners to produce gasoline by adding blendstocks to previously certified gasoline, but anyone that produces gasoline by this method must meet the same emissions standards as other refiners and must comply with similar sampling, testing and quality assurance requirements to ensure that the gasoline meets the applicable standards.

The complaint alleges that the Defendants violated the fuels regulations promulgated under the Clean Air Act by failing to comply with sampling, testing, and recordkeeping requirements. The complaint also alleges that the Defendants failed to comply with the renewable fuel standards and that some of the gasoline that they produced did not meet the gasoline volatility standards, which are designed to limit emissions of volatile organic compounds (VOCs) from gasoline.

Western and Rocky Mountain produced gasoline in violation of the fuels regulations from October 2006 through February 2009, and Offen produced gasoline in violation of the fuels regulations from May of 2007 through February 2009. The Defendants stopped producing gasoline when EPA issued a Notice of Violation in February of 2009.

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Injunctive Relief

The settlement requires the following actions from the Defendants:

Environmental Mitigation Project

  • EPA estimates that the Defendants' violations of the gasoline volatility regulations resulted in a total of 10.3 tons of excess emissions of VOCs. In order to mitigate the environmental harm caused by these violations, Rocky Mountain agreed to install a geodesic dome on one of the gasoline storage tanks at its Dupont, Colo. terminal.
  • This project will reduce emissions of VOCs from this storage tank by over 8.6 tons per year for each year that the geodesic dome remains in place. Rocky Mountain is required to maintain the geodesic dome during the five year time period that the Consent Decree will remain in effect, but the geodesic dome is expected to result in continued emissions reductions for many years into the future. Rocky Mountain will spend about $200,000 on this project.

Compliance Plan

  • The Consent Decree prohibits the Defendants from producing gasoline in tanker trucks. If any Defendant decides to produce gasoline by other methods, they must prepare a compliance plan and have it reviewed and approved by an independent engineer.

Renewable Fuel Program Mitigation

  • The renewable fuels regulations require refiners, including refiners that produce gasoline by adding blendstocks to previously certified gasoline, to meet a renewable fuel standard. The Defendants failed to fully comply with the renewable fuel standard. The Consent Decree requires the Defendants to acquire and retire sufficient credits, or Renewable Identification Numbers (RINs), to offset the number of RINs that they should have retired to meet their obligations under the renewable fuels regulations.

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Pollutant Impacts

EPA estimates that the Defendants' violations of the gasoline volatility regulations resulted in a total of 10.3 tons of excess emissions of VOCs.

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Health and Environmental Effects

The Defendants emitted excess VOCs that contribute to the formation of ground-level ozone.

  • 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.

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Civil Penalty

The Defendants will pay a $2.5 million penalty.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the District of Colorado, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

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For more information, contact:

Jeff Kodish
Air Enforcement Division
U.S. Environmental Protection Agency
1595 Wynkoop Street (8MSU)
Denver, CO 80202-1129
Jeff Kodish (kodish.jeff@epa.gov)
(303)-312-7153

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