2020 Environmental Real Estate Issues

EPA alleges a refinery violated a Consent Decree, issued by a federal court in 2016, by failing to comply from 2018 through 2020 with the nitrogen oxide emission limit of 20 parts per million at the refinery’s fluid catalytic cracking unit (FCCU). The 2016 Consent Decree settled prior air pollution allegations.

Consent Decree Modification
In a proposed Consent Decree Modification (CDM) filed with the court on April 27, 2023, the refinery agreed to pay a $27.5 million civil penalty, plus interest accruing from November 1, 2020.

Conversion to Renewable Fuels
The refinery has announced its intention to convert to a Renewable Fuels Plant. Under the CDM, the conversion must include nitrogen oxide and sulfur dioxide emission reductions; flaring controls; an enhanced leak reduction and repair program; permanent shutdown of many petroleum refining units; partial demolition of the FCCU and its associated boiler; and the surrender of emission reduction credits that otherwise would have resulted from the permanent shutdown of the refining units.

Option to Refine Petroleum
Under the CDM, the refinery retains an option to resume petroleum refining, but only if it installs additional controls on the FCCU, estimated to cost $125 million; implements more stringent nitrogen oxide limits on the FCCU and associated boiler; and surrenders its accumulated nitrogen oxide emission trading credits.

Conversion in 2023
In September 2022, the company announced completion of a transaction and issuance of permits for the conversion. The company expects the facility will produce 730 million gallons per year of renewable fuels by the end of 2023.

For information on the settlement, which includes links to the news release and CDM https://www.epa.gov/enforcement/2023-tesoro-martinez-clean-air-act-settlement-information-sheet

To see the company’s September 2022 announcement https://ir.marathonpetroleum.com/investor/news-releases/news-details/2022/Marathon-Petroleum-Corp-Announces-Closing-of-Martinez-Renewables-JV-with-Neste/default.aspx