EPA Reaches Settlement with Fuel Refiner and Distributor Over Violations of the Clean Air Act’s Fuel Requirements

EPA Reaches Settlement with Fuel Refiner and Distributor Over Violations of the Clean Air Act's Fuel Requirements

Lupton Petroleum Products, Inc and Brad Hall Associates, Inc. fined $1M for failing to meet multiple requirements that protect air quality

July 18, 2024

During settlement negotiations, Lupton Petroleum also initiated compliance by installing refinery infrastructure to facilitate fuel sampling and laboratory equipment to test fuel according to the regulatory requirements, estimated to cost approximately $200,000.

"Lupton failed to comply with gasoline and diesel fuel standards that are critical to protecting communities from harmful pollution from cars and trucks," said Assistant Administrator David M. Uhlmann of the EPA's Office of Enforcement and Compliance Assurance. "At a time when climate change and increased heat make it more difficult to maintain air quality, EPA cannot allow any companies to disregard our national clean air standards."

The EPA's conventional fuels requirements include quality standards for gasoline and diesel fuel, as well as requirements relating to compliance demonstrations, including sampling and testing, reporting and recordkeeping. The requirements under EPA's Renewable Fuel Standard program obligate refiners and importers of non-renewable fuels to acquire and retire renewable fuel credits, known as Renewable Identification Numbers or RINs, to meet their renewable volume obligations each year.

Between 2015 and 2019, Lupton Petroleum and Brad Hall Associates produced and distributed, respectively, gasoline and diesel fuel for retail without complying with any of the EPA's fuels regulations applicable to refiners and distributors. In particular, Lupton Petroleum and Brad Hall Associates failed to comply with various regulatory requirements such as registering, taking fuel samples, testing fuel for compliance, maintaining records, submitting reports, ensuring that the diesel fuel produced and distributed met the applicable sulfur standard, and obtaining and retiring RINs.

Lupton Petroleum and Brad Hall Associates' actions resulted in high sulfur diesel fuel being dispensed to vehicles, potentially poisoning diesel exhaust catalysts and causing excess emissions. Additionally, Lupton's failure to purchase and retire RINsundermined the goals of the EPA's Renewable Fuel Standard program, which is designed to reduce the United States' reliance on fossil fuels.

Lupton Petroleum operates a refinery in Lupton, Arizona, where it separates transmix - a combination of gasoline, diesel fuel, and other petroleum products that have mixed in a pipeline and no longer meet fuel specifications - back into gasoline and diesel fuel. Brad Hall Associates, a distributor of petroleum products, delivered transmix to the Lupton refinery and then transported the noncompliant gasoline and diesel fuel from the Lupton refinery to retail stations.

The proposed settlement, filed with the U.S. District Court for the District of Arizona on July 17, 2024, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available on the Justice Department's Proposed Consent Decree web page.

More information on the settlement is available on the EPA's Lupton BHA Clean Air Act Settlement case summary web page.