EL SEGUNDO, Calif. -- In a settlement filed this week, Chevron Corp. has agreed to pay nearly $300,000 in fines and costs for selling gasoline contaminated with excess water at nearly two-dozen gas stations in Orange County, Calif., in 2011.
According to a report in The Orange County Register, the problem was discovered when customers began complaining about engine troubles after fueling up at the Chevron stations on Dec. 14, 2011, just hours after a load of gasoline was delivered. By the next day, Chevron shut down pumps at seven of the stations, alerted the state to the problem and set up a toll-free number for customers to call if they experienced vehicle issues after filling up at the sites, company spokesperson Rod Spackman told the newspaper.
Chevron discovered excessive levels of water in the gasoline at 22 of the gas stations it supplies in Orange County, although it was only able to establish a definitive link between the problem fuel and vehicle troubles at seven stations.
At least 44 vehicles sustained minor damage, said the report.
The company said it believes that "testing and equipment errors" at its El Segundo refinery and a Huntington Beach terminal were the source of the problem, in particular a suction draw on a tank where the gasoline was blended at the refinery. Spackman said since the incident, Chevron has implemented new quality-control procedures and is using different tanks for blending.
Besides the $298,000 in penalties and costs, Chevron has already paid restitution to the 44 owners of the vehicles damaged by fuel from the seven gas stations, Spackman told the Register.
The $298,000 settlement came after the Orange County District Attorney's Office filed a civil lawsuit against El Segundo, Calif.-based Chevron on behalf of the California Division of Measurement Standards, alleging state law violations. While Chevron admitted no wrongdoing, it did agree to create the quality-control program, and not misrepresent fuel quality. In addition, it will have to share a plan with the state for notifying the Division of Measurement Standards in the case of any future contaminated-gas incidents.
Of the $298,000, Chevron is paying more than $222,000 as a civil penalty, along with nearly $36,000 shared by the state Division of Measurement Standards and the county Weights & Measures Programs for investigation costs. The Division of Measurement Standards will get the remaining $40,000 to pay for training and laboratory equipment to test gasoline.
The state is receiving the money instead of individual customers, the report said, because it would be difficult and costly to identify all of the customers who suffered issues from the problem fuel but never complained.
Click here to view the full Register report.
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