Aspen Petroleum Clean Air Act Settlement

On November 14, 2007 the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) filed a complaint and settlement in the U.S. District Court for the District of Colorado against Aspen Petroleum Products ("Aspen Petroleum"). Aspen Petroleum agreed to pay a $25,000 penalty and halt the illegal blending of "drip gas" with gasoline. The settlement resolves violations of the Clean Air Act and prevents the Colorado-based company from selling millions of gallons of drip gas, a byproduct of natural gas production, blended with gasoline to retail gas stations.

• Overview
• The Defendants
• Clean Air Act Violations
• Environmental Benefits
• Civil Penalties
• Adding Blendstocks to Gasoline
• Contact

Overview

On November 14, 2007, the United States announced a settlement with Aspen Petroleum, Inc. (Aspen) and its President, Terrance Tschatschula, that prevents Aspen from selling or distributing gasoline which contains illegally blended "drip gas," a byproduct of natural gas production. Aspen produced gasoline for sale in Colorado by blending drip gas and ethanol with previously certified gasoline (PCG), without complying with the sampling, testing, and recordkeeping requirements of the EPA's fuels regulations. The gasoline produced by Aspen also failed to meet a number of applicable emissions standards.

Aspen produced gasoline by buying drip gas and blending it in tanker trucks with ethanol and PCG. They sold the resulting mixture to retail gas stations throughout the Denver metropolitan area. Drip gas, which is also known as natural gas condensate or natural gasoline, is a liquid extracted from the collection and processing of natural gas.

Aspen stopped its production of drip gas-blended gasoline after EPA issued Aspen a Notice of Violation in June 2006. Thereafter, Aspen agreed to shut down their refining operations unless and until they could demonstrate compliance with EPA's fuels regulations. The precise amount of illegally drip gas-blended fuel Aspen distributed is not known (Aspen did not keep records), but EPA estimates it to be well in excess of several million gallons.

The Defendants

Aspen Petroleum, Inc.: Aspen Petroleum is a Colorado corporation that was a refiner engaged in the production and distribution of gasoline in the Denver metropolitan area.

Mr. Terrance Tschatschula: Mr. Tschatschula is the president and sole shareholder of Aspen. He directly and personally operated, controlled and supervised the refining operations at issue in this case.

The complaint alleged that Aspen and Mr. Tschatschula violated various fuel standards set forth in Section 211 of the Clean Air Act, 42 U.S.C. § 7545 and the regulations promulgated thereunder at 40 C.F.R. Part 80.

Environmental Benefits

The gasoline that Aspen produced contributed to excess air pollution by exceeding the volatility standard that applies to gasoline sold during the summer months, from June 1st to September 15th (the ozone control season) of each year. This standard limit the amount of volatile organic compounds (VOC) in gasoline during the ozone control season. VOCs are a major contributor to ground-level ozone, or smog. Ground-level ozone causes health problems, including damaged lung tissue, reduced lung function, and lung sensitization to other pollutants. More information on EPA's fuel and fuel additive requirements and its benefits.

Fortunately, EPA's investigation did not reveal that any cars that were damaged by the gasoline distributed by Aspen. Earlier in 2007, EPA caught the Kinder Morgan Transmix Co. illegally mixing hazardous waste with gasoline sold to consumers. In that case, in which Kinder Morgan was penalized $600,000, a number of vehicles were damaged by the gasoline-and-hazardous waste mixture. More information on the Kinder Morgan case.

Civil Penalties

Aspen and Mr. Tschatschula will pay a penalty of $25,000. The penalty was reduced substantially from what the Defendants would have been liable for, based on their demonstrated financial inability to pay a larger penalty.

Adding Blendstocks to Gasoline

The Clean Air Act allows refiners to produce gasoline by adding blendstocks to previously certified gasoline, but anyone that produces gasoline by this method must meet the same emissions standards as other refiners and must comply with similar sampling, testing and quality assurance requirements to ensure that the gasoline meets the applicable standards. The Defendants in this case did not follow these requirements, and the blended gasoline they produced did not conform to the Clean Air Act's emissions and fuel quality requirements.

Contact

For more information, contact:

Jeffrey A. Kodish
Attorney-Advisor
OECA/AED/Western Field Office (8MSU)
1595 Wynkoop Street
Denver, Colorado 80202
(303) 312-7153
kodish.jeffrey@epa.gov