This case addresses alleged violations of the Clean Air Act (CAA) by Phillips 66, an energy manufacturing and logistics company. Phillips 66Âs refining operations include 15 refineries with a net crude oil capacity of 2.2 million barrels per day. The violations stem from generation of invalid sulfur credits, and failure to meet recordkeeping, reporting, sampling, and testing requirements under Section 211 of the Clean Air Act (CAA or Act), and the regulations promulgated thereunder at 40 C.F.R. Part 80. The violations were discovered during a 2010 audit and also during a separate evaluation of Phillips attest engagement reports.
Failure to sample and test gasoline according to proper procedures and requirements, failure to maintain records, and failure to submit required reports to the EPA are considered significant violations because they may result in (1) a reduced ability by the EPA to know whether the fuel at issue met an applicable standard, or would require substantial government resources in order to determine whether the fuel met the applicable standards, (2) increased emissions as a result of fuel being produced that does not meet applicable standards, and (3) a large negative overall impact on the integrity of the fuels program.
During settlement negotiations, Phillips retired more than 3.5 billion sulfur credits. As part of the settlement, Phillips will retire an additional 21 billion sulfur credits. This will result in a significant reduction in the s