January 28, 2015 Practice Points

    Three Shell Affiliates Fined by EPA for Violating Clean Air Act

    Motiva Enterprises LLC, Equilon Enterprises, and Deer Park Refining Limited Partnership have agreed to pay a $900,000 civil penalty.

    By Courtney Scobie – January 28, 2015

    Three affiliates of Shell Oil Co., the American subsidiary of Royal Dutch Shell, have agreed to pay a $900,000 civil penalty to the Environmental Protection Agency (EPA) for violations of the Clean Air Act (CAA). Motiva Enterprises LLC, Equilon Enterprises LLC (doing business as Shell Oil Products US), and Deer Park Refining Limited Partnership were subject to an EPA enforcement action for alleged CAA violations that included distributing gasoline with elevated levels of ethanol; violations of gasoline volatility and sulfur standards; violations of diesel sulfur standards; and several recordkeeping, reporting, sampling, and testing violations. With the payment of the civil penalty, the affiliates have settled and resolved the enforcement action. The violations were identified by various sources, including the EPA itself, its partner organizations, consumer complaints, and Shell’s own self-reporting.

    In its enforcement action, the EPA alleged the following specific violations of the CAA:

    • Shell distributed approximately 700,000 gallons of gasoline from its Motiva-operated terminal in Sewaren, New Jersey, that contained elevated levels of ethanol. The Reformulated Gasoline Survey Association, a consortium of refiners, blenders, importers, and distributors of cleaner-burning fuel, identified the problem after surveying Shell retail stations in Irvington, New Jersey, and Staten Island, New York. It reported the violations to the EPA.
    • Shell sold over 4.2 million gallons of gasoline that exceeded the Reid Vapor Pressure level, a fuel standard for gasoline that helps control ground-level ozone during the summer months. Higher-volatility gasoline results in increased emissions of volatile organic chemicals, which contributes to the formation of ground level ozone.
    • Shell sold mislabeled diesel fuel at two gas stations in northern Virginia. EPA inspectors discovered that Shell was selling gasoline labeled as ultra-low sulfur diesel fuel when its sulfur content was actually at the levels for low sulfur fuel diesel. The inspections came about in part because of a consumer complaint made directly to the EPA.
    • Shell failed to follow various protocols for sampling, testing, reporting, and recordkeeping requirements that help ensure compliance with federal fuel standards. Shell self-reported these violations.

    The EPA under the Obama administration has been fairly aggressive in regulating fuel emission standards to reduce ozone levels and pollution. The Obama administration has issued multiple proposals for increased fuel efficiency standards for motor vehicles, and in November 2014, the EPA proposed strengthening the National Ambient Air Quality Standards (NAAQS) for ground-level ozone.

    You can read more about Shell’s settlement on the EPA’s website.

    Keywords: energy litigation, Environmental Protection Agency, EPA, Clean Air Act, CAA, Shell Oil


    Courtney Scobie is with Ajamie LLP in Houston, Texas.

    Copyright © 2015, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).