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Phillips 66 faces fines, forfeitures over Clean Air Act violations

March 27, 2014

Phillips 66 Borger Refinery - Photo by Don Rice

     Phillips 66, the Houston-based company that owns and operates the Borger Refinery, has entered an agreement with the Environmental Protection Agency to pay $500,000 and forfeit billions of sulphur credits for violating the Clean Air Act, according to a press release issued by the EPA.

     The Clean Air Act  Fuels Program regulates sulphur in gasoline to minimize emissions from vehicles and ensure that emissions controls systems function as intended.

     EPA regulations require that all fuel manufactured, imported, or sold in the United States meet certain specifications and fuels that do not meet the standards contribute to “increased emissions of harmful pollutants, such as volatile organic compounds and cancer-causing air toxics,” said the release.

     In the Fuels Program, companies can generate ‘credits’ by producing gasoline that contains less sulphur than the maximum allowed. The refineries can then sell these ‘credits’ to other refiners who have trouble meeting pollution standards.

     Phillips 66 will forfeit more than 21 billion of these sulphur credits; credits which could have been used by other companies in the production of gasoline. Instead, those credits disappear and the companies  will be forced to produce cleaner gasoline which may lead to a significant decrease in pollution, according to the release.

     The fines and forfeitures are part of an administrative settlement agreement with between the Company and the EPA which became effective in late February.

     In the settlement agreement, the EPA alleged that Phillips 66 Company, an independent downstream energy company that has refining, marketing, midstream and chemical operation all over the globe, generated ‘invalid’ sulphur credits between 2006 and 2012.

     Other allegations involved shoddy compliance practices that failed to adhere to guidelines for record keeping, reporting, sampling, and testing requirements at the Borger Refinery and four other facilities: the Sweeney Refinery in Old Ocean, Texas; the Alliance Refinery in Belle Chasse, Louisiana; the Wood River Refinery in Roxana, Illinois; and the Lake Charles Refinery in Westlake Louisiana; as well as several terminals across the country.

     The EPA discovered the violations through facility inspections and reviews of records, including third-party company audits that are required by the Clean Air Act.

     Sampling, testing, record keeping and reporting requirements for the fuels program are the core of the EPA’s compliance program, said the release.

     The EPA also recently announced new standards for vehicle emissions and  fuel sulphur content, aiming to reduce pollution and prevent the thousands of premature deaths and the illnesses that accompany it - and also enabling increases in the efficiency of cars and trucks. The cleaner fuel standards are a key facet of the EPA’s national program for clean running vehicles.

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