Colonial Oil to Pay $2.8 Million Penalty for Failure to Meet Clean Air Act Fuels Regulations

Between 2013 and 2019, Colonial excluded certain fuel it supplied to marine vessels from its renewable volume obligations calculations in violation of the RFS regulations. Fuel intended for use only in ocean-going vessels is not required to be included in renewable volume obligation calculations. But not all marine vessels are ocean-going vessels, and volumes supplied to other marine vessels must be included in such calculations. Colonial’s actions resulted in less renewable fuel being used in lieu of gasoline and diesel fuel, causing increased greenhouse gas emissions.

Under the RFS program, refiners or importers of gasoline or diesel fuel are required to either blend renewable fuels into transportation fuel or purchase credits known as Renewable Identification Numbers (RINs) to meet their renewable volume obligations. Between 2013 and 2019, Colonial failed to purchase and retire enough RINs.

The settlement requires Colonial to purchase and retire over 9 million RINs within two years at an estimated cost of approximately $12.2 million. The RIN purchase and retirements is estimated to result in over 18,300 metric tons of carbon dioxide equivalent reductions which equates to powering 2,386 homes’ energy use or 4,355 gasoline cars for a year.

Colonial also sold over a million gallons of gasoline that failed to meet the applicable volatility standard which is intended to reduce evaporative emissions during the summer season from gasoline that contributes to smog and to reduce the effects of ozone-related health problems such as asthma, emphysema and chronic bronchitis.

Attorneys from the Justice Department’s Environmental Enforcement Section are handling the case.

The proposed settlement, lodged in the U.S. District Court for the Southern District of Georgia, is subject to a 30-day public comment period and final court approval.