Tesoro, EPA in talks on biofuel-credit scam

San Antonio-based Tesoro Corp. is working to settle Environment Protection Agency allegations that it bought fraudulent biofuels credits on a $2 billion trading market that’s emerged to meet federal clean-air mandates.

The EPA has accused Tesoro (NYSE: TSO) and more than 30 other refiners — giant Exxon Mobil Corp and Shell Oil Co. among them — of purchasing fraudulent credits under a system the agency oversees. While the EPA doesn’t allege the refiners willingly engaged in fraud, it’s still holding them accountable for buying from companies that sold credits for biofuels they never produced.

Tesoro is “working cooperatively” with the EPA to resolve the matter, company spokeswoman Tina Barbee confirmed in a written statement. The company may have purchased 861,000 invalid biodiesel credits from Clean Green Fuels LLC, a Maryland company federal authorities brought charges against for generating bogus credits, according to EPA documents.

“Since its inception, Tesoro has complied with the requirements of the Renewable Fuels Standard and is fully committed to fulfilling its ongoing obligations,” Barbee says. “Tesoro looks forward to continuing to work with EPA and its colleagues on ways to ensure integrity and efficiency in the RFS.”

Read more in the San Antonio Business Journal.

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