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Tauber Oil Company Clean Air Act Settlement

(Washington, DC - January 18, 2017) - The U.S. Environmental Protection Agency (EPA) today announced a settlement with Tauber Oil Company, resolving alleged Clean Air Act violations stemming from the company's sale of a fuel additive that was not registered with the EPA. Tauber stopped selling the unregistered fuel additive and will pay a $700,000 civil penalty.

Overview of Company

Tauber Oil Company is a Houston-based, privately-held company that markets petroleum and petrochemical products. Tauber combined various low-cost alcohol streams to produce a product it called “Mixed Alcohol” in a leased shore tank at a NuStar Energy L.P. facility in Texas City, Texas. The largest component of the Mixed Alcohol was a byproduct of isopropyl alcohol manufacturing. Tauber sold approximately 1.9 million gallons of Mixed Alcohol to Gulftech Marketing, LP, which blended the Mixed Alcohol into fuel prior to distribution to service stations for purchase by consumers. 

Tauber represents that, as of April 2012, it ceased domestic sales of Mixed Alcohol for use as a fuel additive.

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The Clean Air Act sets up a precautionary program for registration of fuels and fuel additives to ensure that changes to composition of fuels and fuel additives do not undermine the emissions performance of motor vehicles, either through increased emissions from combustion of the fuel or fuel additive or through harm caused to vehicle emissions control devices by the fuel or fuel additive.

As one component of the precautionary program, the Clean Air Act requires fuel additive manufacturers to register a fuel additive prior to selling, offering for sale, or otherwise introducing a fuel additive into commerce. Registration identifies the chemical composition of the additive and ensures adequate information and testing to determine potential public health and environmental effects that might result from its use. The regulations define “additive manufacturer” as “any person who produces, manufactures, or imports an additive for use as an additive and/or sells or imports for sale such additive under the person’s own name.” Tauber met the definition of additive manufacturer because it produced Mixed Alcohol by blending various low-cost alcohol streams in a shore tank and then sold the Mixed Alcohol for use as a fuel additive. Further, Tauber sold Mixed Alcohol under its own name for use as a fuel additive (i.e., Tauber did not simply resell another company's additive). Therefore, Tauber allegedly violated the Clean Air Act by failing to register Mixed Alcohol as a fuel additive.

As a second component of the precautionary program, the Clean Air Act requires fuel and fuel additives to be substantially similar to what was used in certification of motor vehicles. The “substantially similar” requirement is intended to ensure that changes to fuels and fuel additives do not cause or contribute to a failure of emission control devices to achieve compliance (over the useful life of the vehicles) with the emission standards to which the vehicle has been certified. The EPA has promulgated an interpretive rule defining the term “substantially similar.” The interpretive rule sets forth criteria that must be met for a fuel additive to be “substantially similar” to a fuel or fuel additive used in the certification of a motor vehicle or engine. One criteria is that the fuel containing the fuel additive may only contain up to 0.3 percent methanol by volume, unless it also contains an equal volume of butanol, or higher molecular weight alcohol, in which case it can contain up to 2.75 percent methanol by volume. Fuel containing Mixed Alcohol had greater than 2.75 percent methanol by volume. Further, fuel containing Mixed Alcohol did not contain a volume of butanol (or higher molecular weight alcohol) at least equal to the volume of methanol. Therefore, Tauber allegedly violated the Clean Air Act by failing to ensure that Mixed Alcohol, and fuel containing Mixed Alcohol, met the requirements for being “substantially similar.”  

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Environmental Benefits and Pollutant Reductions

Sections 211(a) and 211(f) of the Clean Air Act, and the associated implementing regulations, set up precautionary programs for fuels and fuel additives. The precautionary approach ensures that emissions standards for motor vehicles are not undermined (for example, through additional emissions from fuel or fuel additive combustion not anticipated in the engine certification or through the fuel or fuel additive causing harm to vehicle emission control devices). Tauber’s sales of the Mixed Alcohol product for use as a fuel additive undermined the protections of section 211’s precautionary requirements.

Tauber represents that all domestic sales of Mixed Alcohol for use as a fuel additive have ceased as of April 2012.

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Civil Penalty

Tauber will pay a $700,000 civil penalty to the United States.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Southern District of Texas, will undergo a 30-day public comment period and then be subject to final court approval.  Information on submitting comment is available at the Department of Justice.

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For more information, contact:

Virginia Sorrell, Attorney
Air Enforcement Division
Office of Civil Enforcement
U. S. Environmental Protection Agency
1595 Wynkoop Street (8MSU)
Denver, CO 80202
(303) 312-6669

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