Marathon Petroleum has agreed to pay a hefty $27.5 million fine and forfeit its emissions trading credits after violating a crucial legal agreement aimed at reducing pollution at its Martinez, California facility.
The roots of the violation can be traced back to Marathon’s acquisition of Tesoro Refining and Marketing in 2018. Following the acquisition, Tesoro failed to impose necessary restrictions on nitrous oxides (NOx) emissions from its fluid catalytic cracking unit, consequently contributing to smog in the region.
Taking a significant step to address its environmental impact, Marathon Petroleum decided to close down the Martinez refinery in 2020. Subsequently, the company initiated the transformation of the facility into one that produces renewable fuels derived from vegetable oils, a notable shift away from traditional crude oil processing.
To hold companies accountable and enforce strict pollution controls, the California regulatory framework mandates that entities like Tesoro adhere to stringent guidelines and relinquish tradable emission credits. These measures aim to curb air pollution and its adverse effects on the San Francisco Bay area.
In compliance with the legal settlement, Marathon Petroleum has agreed to abstain from utilizing emission credits for any new initiatives or trading them to other businesses. This will effectively restrict emissions within the region and foster cleaner air.
As part of the agreement, Marathon has voluntarily given up a significant portion of its existing NOx emission trading credits and will also forego credits obtained from the shutdown of its petroleum refining equipment. This move exhibits the company’s commitment to mitigating its environmental impact.
The conversion of the Martinez refinery into a facility producing biofuels will be carried out in collaboration with Neste, as part of a joint venture. The new requirements and environmental standards will be put into effect upon the complete transition to biofuel production.
One of the most noteworthy outcomes of this agreement will be the substantial reduction of annual air emissions. It is estimated that the measures will result in the prevention of 440 tons of NOx, 327 tons of sulfur dioxide, and the equivalent of a staggering 1,342,025 tons of carbon dioxide. These reductions will significantly contribute to improving air quality and combating global warming in the region.
NOx emissions, responsible for an array of environmental issues such as ground-level ozone, acid rain, particulate matter, global warming, deteriorating water quality, and visual impairment, have been a major concern for regulators and environmentalists alike. The measures undertaken by Marathon Petroleum and its compliance with the legal agreement are seen as a significant step toward mitigating the detrimental effects of these emissions on the environment and public health.