Enforcement

Tesoro Corporation

(Washington, DC - May 30, 2013) The U.S. Environmental Protection Agency (EPA) announced that Tesoro Corporation, Tesoro Refining & Marketing Company LLC, and Tesoro Alaska Company have agreed to pay a $1.1 million penalty to resolve claims that Tesoro failed to comply with requirements under the Clean Air Act (CAA) at four of its refining facilities that produce conventional gasoline.  

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Overview of Company

Tesoro Corporation is a Fortune 150 company with its principle executive offices in San Antonio, Texas. Tesoro is one of the largest independent petroleum refiners and marketers in the Western United States. Tesoro operates seven refineries in the Western United States with a combined refining capacity of approximately 675,000 barrels per day. Tesoro’s retail-marketing system includes nearly 1,375 branded retail stations, of which over 590 are company operated under the Tesoro®, Shell® and USA Gasoline™ brands.

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Violations

The settlement resolves a United States Environmental Protection Agency (EPA) enforcement action against Tesoro Corporation and several of its affiliates for Clean Air Act (Act) violations involving Tesoro’s failure to comply with certain recordkeeping, reporting, sampling and testing requirements required by the fuels regulations and the Act.

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Injunctive Relief

The Consent Decree requires Tesoro to take actions to prevent future violations of the type at issue in this case, and will promote Tesoro’s compliance with the fuels regulations. Specifically, Tesoro will implement the Tesoro System-Wide Compliance Plan and Audit Requirements (Compliance Plan). This plan will cover all conventional gasoline produced by the Tesoro Refineries.

While no known damage to the environment or to human health is associated with Tesoro’s violations, these violations result in programmatic harm that seriously undermines the integrity of the fuels regulations. Proper sampling, testing, recordkeeping, and reporting of fuel constituents provide the foundation for the EPA’s fuels compliance program and ensures that the program’s emissions benefits can be realized. Tesoro’s conduct interfered with these bedrock requirements.

Generally, failure to sample and test gasoline according to proper procedures and requirements, failure to maintain records, and failure to submit required reports to the EPA are considered significant violations because they may result in (1) a reduced ability by the EPA to know whether the fuel at issue met an applicable standard, or would require substantial government resources in order to determine whether the fuel met the applicable standards, (2) increased emissions as a result of fuel being produced that does not meet applicable standards, and (3) a large negative overall impact on the integrity of the fuels program.

Notwithstanding improvements in vehicle emission controls, emissions from motor vehicles continue to make up a substantial portion of all air pollution. When inappropriate fuels are used, the emissions of harmful gases from internal combustion engines can increase significantly and emission control equipment can be damaged. The violations at issue in this case reflected a need for better management of data recording, recordkeeping and reporting, laboratory practices, and sampling and testing protocols.

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Health and Environmental Benefits

There are hundreds of different compounds and elements that are known to be emitted from passenger cars, on-highway trucks, various non-road equipment, and the fuels used in these mobile sources. Several of these compounds may have adverse effects on human health and welfare. The injunctive relief required by the Consent Decree will reduce the potential for errors that could result in the production of fuel not meeting the applicable standards. Because the Compliance Plan requires implementation of certain institutional and systemic practices that increase the likelihood of compliance with the fuels regulations, these benefits are likely to occur for many more years after termination of the Consent Decree.

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Civil Penalty

Tesoro will pay a $1.1 million civil penalty. This is the largest penalty for these types of violations in the history of the fuels program. 

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the District of Columbia, 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:

Natalie Firestine
U.S. EPA
1595 Wynkoop Street (8MSU)
Denver, CO 80202-1129
(303) 312-7165
Natalie Firestine (firestine.natalie@epa.gov)

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