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* Marathon agrees to caps to settle emissions dispute

* Company also will pay $460,000 penalty-EPA

April 5 (Reuters) – Marathon Petroleum Co has agreed to cap

the flaring of excess natural gas and implement efficiency

controls on combustion devices to settle an emissions dispute

with the Obama administration.

The Ohio-based company reached an agreement with the

Environmental Protection Agency and the U.S. Department of

Justice in response to allegations that Marathon had

violated the Clean Air Act, according to an EPA statement on

Thursday.

Some oil companies burn off excess gas that cannot be reused

or transported. Environmentalists decry the practice as a waste

of energy and a contributor to harmful emissions.

The EPA is pushing companies to improve infrastructure so

that they flare less gas and burn off the gas they must flare

more efficiently.

Marathon has already spent about $45 million on equipment to

improve combustion efficiency and plans to spend an additional

$6.5 million, according to the statement.

Along with the cap on flared waste volumes, these changes

are expected to reduce air pollution from the company’s six

petroleum refineries by about 5,400 tons per year and will allow

the company to save money, the EPA said.

Marathon also will pay a $460,000 penalty, the agency said.