Lupton Petroleum Products, Inc. and Brad Hall Associates, Inc. Clean Air Act Settlement

On July 17, 2024, the U.S. Environmental Protection Agency (EPA) reached a settlement with Lupton Petroleum Products, Inc. and Brad Hall Associates, Inc. addressing violations of the Clean Air Act’s conventional and renewable fuel requirements for the refining and distribution of gasoline and diesel fuel. Under the settlement, the companies will pay a civil penalty slightly above $1 million and implement measures to assure ongoing compliance with the regulations.

On this page:

• Overview of the Companies
• Summary of Violations
• Overview of Environmental Impacts
• Summary of Consent Decree
• Comment Period
• Contact Information

Overview of the Companies

Lupton Petroleum, based in Lupton, Arizona, operates a transmix processing facility and bulk petroleum storage facility in Lupton. The company separates transmix, a combination of gasoline, diesel fuel, and other petroleum products that have mixed in a pipeline and no longer meet fuel specifications, into gasoline and diesel fuel. The Lupton facility can process up to 1,500 barrels of transmix per day.

Brad Hall Associates, headquartered in Idaho Falls, Idaho, is a distributor of petroleum products that delivers transmix and other blendstocks to the Lupton facility and transports gasoline and diesel fuel from the Lupton facility to retail stations.

Summary of Violations

Fuel Standards Violations

Lupton Petroleum produced 20,000 gallons of diesel fuel that exceeded the applicable sulfur concentration limit. Lupton Petroleum and Brad Hall Associates also produced and distributed gasoline that did not contain the required detergent additives.

Further, between 2015 and 2019, Lupton Petroleum and Brad Hall Associates failed to comply with the programmatic Clean Air Act requirements that apply to refiners and fuel distributors.

Under the EPA’s fuels programs, refiners must register, perform fuel sampling and testing, submit compliance reports, maintain compliance records, engage auditors to verify compliance information, and include specific information on product transfer documents. Lupton did not comply with any of these requirements.

Fuel distributors must also include specific information on product transfer documents and maintain certain records, including product transfer documents and test results relating to the fuel or transmix being transported, for a minimum of five years. Brad Hall Associates did not comply with these requirements.

These programmatic requirements help ensure compliance with the EPA’s fuel quality standards, including the sulfur limits and detergent additive requirements at issue in this case.

Renewable Fuel Standard (RFS) Violations

Under the Renewable Fuel Standard or RFS program, refiners and importers of gasoline and diesel fuel, like Lupton Petroleum, comply with the RFS regulations by either blending renewable fuel into transportation fuel or by purchasing credits, called “Renewable Identification Numbers” or RINs, to meet their individual renewable volume obligations or RVOs.

Between 2015 and 2018, Lupton Petroleum used petroleum blendstocks to produce gasoline and diesel fuel that incurred RVOs. However, Lupton Petroleum failed to retire RINs to meet these annual obligations.

Overview of Environmental Impacts

Lupton Petroleum’s and Brad Hall Associates’ actions resulted in high sulfur diesel fuel being dispensed to fuel vehicles, potentially poisoning diesel exhaust catalysts and causing excess emissions.

Lupton Petroleum’s failure to blend renewable fuel or acquire RINs also resulted in increased greenhouse gas emissions. Elevated concentrations of greenhouse gases have been warming the planet, leading to changes in the Earth’s climate including changes in the frequency and intensity of heat waves, precipitation, and extreme weather events, rising sea levels, and retreating snow and ice.

Summary of Consent Decree

Lupton Petroleum and Brad Hall Associates will pay a $1,000,729 civil penalty to the United States.

Under the settlement agreement, Lupton Petroleum is required to maintain equipment to monitor the volumes of transmix and blendstocks it receives and the fuel it produces, prepare and implement a facility practices plan to ensure compliance with the fuels regulations, and hire an independent auditor to oversee compliance with the consent decree.

Additionally, during settlement negotiations, Lupton Petroleum initiated compliance by installing equipment that will facilitate sampling and testing the gasoline and diesel fuel produced at the Lupton facility, at an estimated cost of approximately $200,000 and retired 273,519 RINs to address its RFS violations.

Comment Period

The proposed settlement, lodged in the United States District Court for the District of Arizona, is subject to a 30-day public comment period and final court approval. Information on submitting comment and access to the settlement agreement is available on DOJ’s Proposed Consent Decree web page.

Contact Information:

For additional information on this settlement, please contact:

Karen Nelson, Attorney-Adviser
Air Enforcement Division
Office of Civil Enforcement
U.S. Environmental Protection Agency
1595 Wynkoop Street (8MSU)
Denver, CO 80202
[email protected]