Colorado Petroleum Distributors to Pay $2.5 Million to Settle Clean Air Act Allegations of Illegal Mixing and Distribution of Gasoline

WASHINGTON – Three Colorado-based gasoline distributors have agreed to pay $2.5 million to resolve claims that they illegally mixed and distributed more than one million gallons of gasoline that did not meet Clean Air Act emissions and fuel quality requirements. The settlement with Rocky Mountain Pipeline System LLC, Western Convenience Stores Inc. and Offen Petroleum Inc., was filed in federal court in Denver today, announced the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA).

Use of gasoline that does not meet the Clean Air Act’s standards for fuel can result in increased emissions from car tailpipes, affect vehicle performance, and in some cases can damage engines and emissions controls. The settling companies will pay a $2.5 million civil penalty and conduct an environmental project designed to offset the harm EPA alleges was caused by their failure to meet federal gasoline quality requirements.

“Providing and distributing gasoline that fails to meet the Clean Air Act standards for fuel can have serious consequences for human health and the environment,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement appropriately requires that the distributors undertake a project that will result in major annual reductions in emissions of volatile organic compounds in order to offset any harm they may have caused.”

“Complying with the Clean Air Act’s fuel regulations is critical to ensuring that our nation’s important emissions standards are met,” said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Today’s settlement shows that EPA is committed to protecting the air we breathe by reducing illegal air pollution.”

According to the government’s complaint, at two terminals in Dupont and Fountain, Colo., between 2006 and 2009, the companies produced millions of gallons of illegal gasoline by mixing natural gasoline, a byproduct of natural gas production, and ethanol with gasoline previously certified to meet Clean Air Act requirements. The blended gas was distributed and sold by Western Convenience Stores, Inc. (Western), and Offen Petroleum, Inc. (Offen), at retail gasoline stations in Colorado and Nebraska.

The Clean Air Act allows refiners to produce gasoline by adding other fuel sources to previously certified gasoline, but anyone using this method must ensure that the blended gasoline still meets applicable emissions and fuel standards. They must also comply with sampling, testing, and quality assurance requirements to ensure that the gasoline meets these standards.

The companies’ gasoline blending operations may have resulted in the introduction into the environment of a total of more than 10 tons of excess emissions of volatile organic compounds (VOCs), which can lead to higher levels of ozone. Human exposure to ozone can cause lung damage, aggravate asthma, and cause difficulty breathing. EPA sets gasoline standards to reduce air pollutants from motor vehicles, such as volatile organic compounds, particulate matter, and toxic air pollutants, because they contribute to serious public health and environmental problems. To offset any excess emissions, the companies will install a geodesic dome cover on a gasoline storage tank at one of the terminals where the fuel blending took place. The cover is expected to reduce VOC emissions by more than 8.6 tons annually.