Operators of East Bay Refinery Fined $27.5 Million Over Pollution

Updated 3:25 p.m. Friday

The operators of a Bay Area oil refinery have agreed to pay $27.5 million for violating a 2016 agreement to reduce air pollution at the facility, federal regulators announced Thursday.

Tesoro Refining and Marketing Co. of Los Angeles was penalized for violating a consent decree at its refinery in Martinez, the U.S. Environmental Protection Agency and U.S. Department of Justice said in a statement.

Tesoro failed to install adequate pollution controls and failed to limit emissions of nitrogen oxides (NOX) that contribute to smog, the agencies said.

The settlement will reduce emissions of nitrogen oxides and other air pollutants by hundreds of tons each year, regulators said.

“As this settlement shows, EPA will seek substantial penalties when companies delay installing appropriate pollution controls to meet environmental obligations,” said a statement from Larry Starfield, acting assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

Tesoro was acquired by Marathon Petroleum Corp. in 2018.

“Marathon has a demonstrated history of continually improving our environmental performance across our operations, and we are committed to protecting the environment we all share,” the company said in a statement. “The origins of this matter predate Marathon Petroleum Corporation’s acquisition of the Martinez refinery, and we are glad to have resolved this matter with the U.S. government.”

The penalty is part of a settlement that requires the refinery to adhere to strict pollution controls and to give up emission credits, which companies can use to offset their pollution or trade to other companies to use.

“The City of Martinez government supports the state and federal agencies charged with protecting the health and well-being of the residents of Martinez and our surrounding communities through compliance monitoring of our area refineries,” Martinez Mayor Brianne Zorn said in a statement.

Questions remain as to whether a fine will make much of a difference in the long run.

“The sad truth is the Bay Area has some of the country’s worst air pollution, and these refineries in the Bay Area are largely responsible for that,” said Hollin Kretzmann, senior attorney at the Center for Biological Diversity. “The $27 million [fine] is really a slap on the wrist for a company that made $16 billion in profits last year. These major oil companies consider it as just the cost of doing business … And so if they get slapped with a fine, they’ll pay it or they’ll have their lawyers contest it, but ultimately they keep doing business as usual and these refineries keep spewing harmful pollution for these frontline communities that have been dealing with it for decades.”

Kretzmann said he believes the only long-term solution would be to decommission the refineries and transition to what he called “a safer and healthier future.”

“We need a plan to move away from our fossil fuel dependence … in California and move to safe forms of renewable energy so we don’t need to be living next to these dangerous refineries and being scared about how much it’s going to impact our health and our kids’ health,” added Kretzmann.

The Martinez plant, which is about 30 miles northeast of San Francisco, had a refining capacity of approximately 161,000 barrels of oil per day and was the fourth-largest petroleum refinery in California, the EPA said.

The plant suspended operations in 2020. It is being converted to produce fuels from renewable sources such as vegetable oils. The refinery is expected to come online this year and produce up to 48,000 barrels of renewable fuels per day, according to the EPA.

Regulators said the agreement does not prohibit Tesoro from resuming petroleum refining. But if it does, the company must install specific air pollution control technology to meet NOX emission limits — at an expected cost of $125 million.