The settlement covers fines from seven air quality violations that occurred at the refinery in 2010, according to air district spokesman Tom Flannigan.
The violations stemmed from an upset of the refinery's fluid catalytic cracking unit, where heavy gas oils are converted into gasoline and other lighter compounds, Flannigan said.
The upset caused "intermittent violations" of air quality standards over a 10-day period, including violations of carbon monoxide and sulfur standards, he said.
Flannigan said the settlement funds will cover air district activities such as inspection and enforcement operations.
The BAAQMD is the public agency that regulates stationary sources of air pollution in the nine counties that surround San Francisco Bay: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, southwestern Solano, and southern Sonoma counties.