ANDV Andeavor

Refiners Tesoro Corp. and Par Hawaii Refining agreed to spend more than $400 million on equipment to control pollution at six U.S. oil refineries under a legal settlement with the U.S. Environmental Protection Agency and the U.S. Department of Justice announced Monday.

The government had alleged that Tesoro and Par violated provisions of the Clean Air Act at refineries in Alaska, California, Hawaii, North Dakota, Utah and Washington. Under the terms of the deal, the refiners will have to install equipment to minimize flaring of hazardous gases and to improve leak-detection and repair programs, among other measures.

Tesoro also agreed to pay a $10.45 million civil penalty and to implement projects aimed at mitigating pollution, including spending $1 million to help buy natural-gas-powered school buses in northern California.

The U.S. Department of Justice and the EPA, which brought the complaint against the refiners, said the settlement, totaling $425 million, would help reduce emissions in communities around the plants.

"The advanced technologies Tesoro and Par are required to implement are the future for protecting people from toxic air emissions," said Cynthia Giles, EPA assistant administrator for enforcement and compliance assurance. "This settlement puts new enforcement ideas to work that will dramatically cut pollution and protect communities."

Tesoro, based in San Antonio, operates five of the refineries covered by the settlement. The sixth, in Kapolei, Hawaii, was owned by Tesoro until 2013, when Par Pacific Holdings Inc., the parent of Par Hawaii Refining, purchased it.

Tesoro said that it is already implementing most of the emissions projects required under the settlement: It will have just $75 million of work to do after this year.

"We take compliance with environmental regulations very seriously and are pleased to have reached agreement on this consent decree that allows us to fully implement the required procedures and investments to further improve our environmental performance," said Keith Casey, Tesoro's executive vice president of operations.

Par Pacific Holdings said it would expand a refinery turnaround at its Hawaii plant to make the required improvements. The company said that Tesoro will reimburse Par for expenditures related to the settlement, an estimated $30 million.

Write to Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

July 18, 2016 17:45 ET (21:45 GMT)

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