OAKLAND, Calif. (CN) — The San Francisco Bay Area’s state air quality officials have reached two settlements with Chevron and the Martinez Refining Company in a battle over reducing emissions at two refineries in the East Bay.
The Bay Area Air Quality Management District announced Tuesday it has finalized separate agreements to end the companies’ litigation against the agency’s new rules to cut emissions with new penalties and fines for violations. Both relate to enforcement of Rule 6-5, which aims to reduce airborne particulate matter from the fluidized catalytic cracking units used to manufacture gasoline — the largest sources of harmful particulates. The agency approved this rule in 2021, and the oil companies sued months later in Contra Costa County Superior Court to block implementation.
Chevron has agreed to drop its lawsuit and will cut emissions as required, agreeing to pay penalties of between $17 million to $32 million per year for any delay in compliance past the July 2026 deadline.
The company will implement interim emission reductions at its refinery in Richmond ahead of the regulation’s compliance deadline. It will also pay into the Community Air Quality Fund, which starts with $20 million and will receive annual $3.5 million payments, while constructing air quality controls. The fund is meant to finance projects to help further avoid any nearby residents’ exposure to harmful particulates coming from the refinery.
Chevron also agreed to pay a $20 million fine for 678 separate violations at the refinery and commit to a series of measures designed to reduce persistent flaring. It will also pay half the air quality district's attorney fees, up to $500,000.
Martinez Refining Company will also drop its lawsuit and start fully complying with the rule, using a continuous monitoring system instead of periodic quarterly stack testing. It will pay half the air quality district's attorney fees, up to $500,000.
The refining company said in a statement that it has worked with technical experts in process engineering and air quality to develop a plan to further reduce particulate emissions from its refinery.
But Healthy Martinez, a community group advocating for environmental health improvements, said Martinez Refinery Company should be required to make the same upgrades Chevron is making because "gaps in environmental regulation create openings for tragedies similar to those already witnessed in California communities."
"We acknowledge Chevron's commitment to installing a wet gas scrubber, which sets a positive precedent. However, we demand that Martinez Refining Company be similarly compelled to install a wet gas scrubber, ensuring equitable measures for environmental protection and community safety," Heidi Taylor, a resident and member of Healthy Martinez, said.
Chevron spokesperson Caitlyn Powell said in a statement that the agreement is a benefit to the community of Richmond, a city of 116,000 about 20 miles from San Francisco.
“However, we remain concerned that the BAAQMD’s rulemaking process is fundamentally broken and believe it’s another example of how California policies have led to a hostile business environment for manufacturers, disincentivizing production of the transportation fuels that millions of Californians depend on every day,” Powell said.
The air district said that the landmark Rule 6-5 is the most stringent rule of its kind in the country, by setting specific requirements for reducing, monitoring and reporting emissions of various pollutants from refinery operations.
“The historic penalties and successful defense of our life-saving Rule 6-5 are a win for air quality in the bay, especially those living in the Richmond and Martinez-area communities,” said Davina Hurt, chair of the air district board of directors. “The establishment of the Community Air Quality Fund for Richmond further emphasizes our dedication to address the specific air quality concerns of the communities most affected, improve public health and to advance environmental justice.”
The agency’s executive officer Philip Fine said that the penalties the refinery agrees to honor will help ensure that all Bay Area residents have cleaner, healthier air to breathe.
“The air district’s agreements with Chevron and MRC mark a turning point in our commitment to enforcing air quality regulations and deterring future violations throughout the Bay Area, especially in communities already overburdened by air pollution,” Fine said.
Mark Ross, Martinez vice mayor and member of the air district's board, said that the agreements also help protect future generations who face the impacts of climate change.
“Along with this settlement and the resumption of Rule 6-5, with its historic reduction in annual PM emissions, the air district is also demonstrating that enforcement of episodic incidents and violations will be enforced vigorously,” Ross said.
Contra Costa County Supervisor John Gioia, representing Richmond, also praised the settlements.
“Defending our health-protective regulation to substantially reduce particulate matter from refineries and imposing significant penalties helps us improve air quality for all residents," Gioia said.
The agency estimates that if both companies comply with Rule 6-5, they could cut around 70% of Chevron’s emissions and 80% of Martinez’s emissions. Those cuts could result in tens of millions of dollars per year in health benefits, “by reducing early deaths and other health impacts of exposure to particulate matter,” the agency said.
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