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Environmental Groups Oppose Bill To Give Tax Break To Refineries Not Yet Producing Tier 3 Fuel

Photo of refinery.
Brian Albers / KUER
Most refineries in Utah have started producing Tier 3 fuel, but two smaller ones have not.

Refineries who have been slow to start producing Tier 3 fuel would still be eligible for a tax break under a bill unanimously passed by a state Senate committee unanimously Thursday. 

Tier 3 fuels are classified as having sulfur content no greater than 10 ppm. They are also cleaner and reduce tailpipe emissions, which can help improve air quality. Most refineries in Utah have started producing it, but two smaller ones have not. 

Current state law gives refineries until 2021 to start producing the cleaner fuels to qualify for a tax break, but under a proposal by Sen. Ralph Okerlund, R-Monroe, they could still receive a tax credit if they start before 2025. 

“We think that this will incentivize the last two refineries who are not now producing Tier 3 to be able to produce Tier 3,” Okerlund said. “So we think it's extremely important.”

But Noah Miterko with the Healthy Environment Alliance of Utah said this lets refineries off the hook. 

“We're concerned that these two refineries have done nothing to move in that direction since the original implementation of the tax exemption in 2017,” Miterko said. “This bill doesn't do nearly enough to ensure that they will move that direction … Asking hardworking Utahns to continue to foot the bill is a breach of public trust and bad public policy.”

Crystal Call Maggelet, CEO of FJ Management, one of the two refineries not producing Tier 3 fuel, said they need the extra time. 

“To get it done in that amount of time was going to be very, very difficult,” she said. “It has been something that we have been working towards, and it is in our capital budget today. It will be completed by 2024. And we are committed to Tier 3.” 

Sonja Hutson covers politics for KUER. Follow her on Twitter @SonjaHutson

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