EPA crackdown: HF Sinclair to pay $172m and overhaul emissions systems

HF Sinclair Navajo Refining LLC, a subsidiary of HF Sinclair Corporation, recently agreed to a $172 million settlement with the U.S. Department of Justice (DOJ), the Environmental Protection Agency (EPA), and the New Mexico Environment Department (NMED). This settlement, following allegations of severe air quality violations at its Artesia, New Mexico refinery, underscores the growing regulatory focus on environmental compliance across the energy sector.

What sparked the $172 million settlement?

The settlement follows a 2019 investigation led by the EPA and NMED, which found systemic noncompliance with air quality regulations at the refinery. The investigation revealed that the facility had violated the Clean Air Act and the New Mexico Air Quality Control Act, resulting in the unlawful release of hazardous pollutants such as volatile organic compounds (VOCs), sulfur dioxide (SO₂), and benzene, a known carcinogen.

Federal regulators labeled the Artesia refinery as a “major source of hazardous air pollutants,” citing emissions that posed significant health risks to nearby communities. Investigators highlighted that the refinery recorded the highest fenceline benzene concentrations in the country during 2018 and 2019, raising serious public health concerns.

How will HF Sinclair Navajo address emissions violations?

As part of the agreement, HF Sinclair Navajo Refining will pay a $35 million civil penalty, with the amount split equally between the federal government and the State of New Mexico. In addition, the company is required to implement an extensive package of compliance measures valued at $137 million.

These measures are designed to reduce emissions and improve the facility’s environmental footprint. Key initiatives include:

• Installing a flare gas recovery system to reduce hydrocarbon emissions.
• Upgrading wastewater treatment infrastructure and storage vessels.
• Enhancing air pollution monitoring systems, including the installation of 10 real-time air monitors around the refinery’s fenceline and seven monitors in Artesia.
• Improving leak detection and repair protocols for refinery equipment.
• Strengthening chemical monitoring processes for heat exchangers.

The real-time air monitoring system, costing an estimated $1.8 million, will provide publicly accessible emissions data, increasing transparency and accountability.

What are the expected environmental benefits?

According to the DOJ and EPA, the compliance measures are expected to reduce annual emissions by approximately 97,551 tons of carbon dioxide equivalents, representing a significant step toward improving local air quality.

EPA Acting Assistant Administrator Cecil Rodriguez described the settlement as a critical measure to protect public health and ensure regulatory compliance. “The failure to control hazardous emissions at this refinery posed a direct threat to the health and safety of the surrounding community,” Rodriguez stated. “This settlement ensures that HF Sinclair Navajo’s operations will be closely monitored to prevent future violations.”

Why is air quality regulation enforcement increasing?

The HF Sinclair Navajo settlement reflects a broader trend of increasing regulatory scrutiny on U.S. refineries and industrial facilities. Federal agencies are intensifying enforcement actions, particularly in communities disproportionately affected by industrial pollution.

Energy analysts suggest that the substantial cost of noncompliance—both in financial penalties and reputational damage—serves as a wake-up call for companies across the oil and gas sector. “This settlement underscores the importance of prioritizing environmental accountability,” said an independent environmental consultant. “Companies must adapt to stricter regulatory frameworks or risk significant financial and operational repercussions.”

What does this mean for HF Sinclair’s future operations?

HF Sinclair Navajo’s compliance measures not only address emissions violations but also position the refinery as a potential industry benchmark for environmental upgrades. The Artesia facility, which processes sweet and sour crude oil from the Permian Basin, has a refining capacity of 100,000 barrels per day (b/d). Additionally, it produces approximately 9,000 b/d of renewable diesel through its pre-treatment and renewable diesel units.

By investing in advanced monitoring and emissions reduction technologies, the company aims to restore community trust and align its operations with evolving regulatory expectations.

How does this settlement affect the industry?

The energy sector faces increasing pressure to balance operational efficiency with environmental responsibility. The HF Sinclair Navajo settlement demonstrates the rising costs of noncompliance and highlights the critical role of modern monitoring technologies in mitigating environmental risks.

For companies operating in this space, proactive investment in emissions control systems and transparent reporting mechanisms is essential to navigating regulatory challenges and maintaining public trust.