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By Tokesha Collins and Lee Vail

On May 15, 2014, the Environmental Protection Agency (“EPA”) announced that it intended to publish a proposed rule to amend the national emission standards governing petroleum refineries. [1]  The emission standards impacted by this proposed rulemaking are:

  • National Emission Standards for Hazardous Air Pollutants (“NESHAP”) from Petroleum Refineries (40 CFR part 63, subpart CC) (Refinery MACT 1);
  • National Emission Standards for Hazardous Air Pollutants for Petroleum Refineries: Catalytic Cracking Units, Catalytic Reforming Units, and Sulfur Recovery Units (40 CFR part 63, subpart UUU) (Refinery MACT 2);
  • Standards of Performance for Petroleum Refineries (40 CFR part 60, subpart J) (Refinery NSPS J); and
  • Standards of Performance for Petroleum Refineries for which Construction, Reconstruction, or Modification Commenced After May 14, 2007 (40 CFR part 60, subpart Ja) (Refinery NSPS Ja).

The EPA’s stated reason for amending the petroleum refinery emission standards was to address the risk remaining after application of the standards promulgated in 1995 and 2002. The EPA proposes to amend the petroleum refinery emission standards to account for developments in practices, processes, and control technologies and also to include new monitoring, recordkeeping and reporting requirements. The EPA further proposes new requirements related to emissions during periods of startup, shutdown and malfunction (“SSM”) to ensure that the emissions standards are consistent with court opinions issued since promulgation of the standards.

The source categories affected by the EPA’s proposed rule include petroleum refineries engaged in converting crude oil into refined products, including liquefied petroleum gas, gasoline, kerosene, aviation fuel, diesel fuel, fuel oils, lubricating oils and feedstocks for the petrochemical industry.

Current regulations recognize the Delayed Coking Units (“DCU”) steam vent as a process vent; however, it is exempt at drum pressures below 15 psi, a pressure well in excess of industry practices. As a result, the EPA determined that direct atmospheric releases from the Delayed Coking Units (“DCU”) decoking operations are currently unregulated emissions and proposed a work practice standard of depressuring to 2 psi prior to opening the vessel. NSPS Subpart Ja currently allows a maximum pressure of 5 psi prior to depressuring. The EPA is requesting comment on whether depressurizing to 2 psig prior to venting to the atmosphere is the appropriate Maximum Achievable Control Technology (“MACT”) limit and whether it is appropriate to include restrictions for decoking operations draining, deheading and coke cutting, in the MACT requirements.

Over the last couple of years, the EPA has devoted significant enforcement resources to correcting alleged regulatory non-compliance of flares often citing federal requirements for equipment operator’s general duty under NSPS and NESHAPs. [2]  The EPA appears to be shifting away from its enforcement reliance on the general duty as the proposed rules acknowledge that existing “regulatory requirements are insufficient to ensure that refinery flares are operating consistently with the 98-percent HAP destruction efficiencies.” As a result, the EPA is proposing significant changes to standards for operations of flares, including that “refinery flares operate pilot flame systems continuously and with automatic re-ignition systems and that refinery flares operate with no visible emissions.” “Owners or operators of flares [must] monitor visible emissions at a minimum of once per day using an observation period of 5 minutes” with additional monitoring in the event of a single one minute visual observation. Further, the EPA is proposing to merge velocity requirements for steam and air assisted flares into a single standard and is proposing “new operational and monitoring requirements related to the combustion zone gas.” This requirement includes equipment that “fine-tune and control the amount of assist steam or air introduced at the flare tip such that combustion efficiency of the flare will be maximized.” “The proposed rule would allow the owner or operator flexibility to select the form of the combustion zone operational limit (i.e., net heating value, lower flammability limit, or total combustibles fraction) with which to comply in order to provide facilities the option of using monitors they may already have in place.” Also of interest, the EPA rejected including a requirement to maintain a maximum steam or air to fuel ratio in the standard as by itself it was inadequate to assure efficient operation.

The EPA is “proposing to revise Refinery MACT 1 for storage tanks to cross-reference the corresponding storage vessel requirements in the Generic MACT (including requirements for guidepole controls and other fittings as well as inspection requirements), and to revise the definition of Group 1 storage vessels to include storage vessels with capacities greater than or equal to 20,000 gallons but less than 40,000 gallons if the maximum true vapor pressure is 1.9 psia or greater and to include storage tanks greater than 40,000 gallons if the maximum true vapor pressure is 0.75 psia or greater.”

Also of significance, the EPA does not propose to change the fluid catalytic cracking unit (“FCCU”) limits found in the MACT standard other than to make them consistent with NSPS Subpart Ja. However, the EPA is proposing to require an FCCU performance test once every 5 years. The EPA also did not propose changes to the leak definitions applicable to the leak detection and repair (“LDAR”) program, changes to standards for gasoline loading racks, cooling towers/heat exchangers, wastewater treatment, reformer regenerations, and sulfur recovery units.

The EPA also recognizes that, in many cases, it is impractical to directly measure emissions from fugitive emission sources at refineries. For this reason, the EPA believes that it is appropriate under the Clean Air Act (“CAA”) section 112(d)(6) to require refiners to monitor, and, if necessary, take corrective action to minimize fugitive emissions, to ensure that facilities appropriately manage emissions of HAP from fugitive sources. The EPA proposes that a HAP concentration be monitored in the ambient air around a refinery that, if exceeded, would trigger corrective action to minimize fugitive emissions. The fenceline concentration action level would be set at a level such that no facility in the category would need to undertake additional corrective measures if the facility’s estimate of emissions from fugitive emissions is consistent with the level of fugitive emissions actually emitted. As part of the fenceline monitoring approach, the EPA seeks to develop a not-to-be exceeded annual fenceline concentration, above which refinery owners or operators would be required to implement corrective action to reduce their fenceline concentration. The EPA is soliciting comment on the application of the following alternative monitoring techniques that it has deemed to be “technically feasible and appropriate for monitoring organic HAP from fugitive emission sources at the fenceline of a petroleum refinery on a long-term basis”: (1) passive diffusive tube monitoring networks; (2) active monitoring station networks; (3) ultraviolet differential optical absorption spectroscopy (“UV-DOAS”) fenceline monitoring; and (4) open-path Fourier transform infrared spectroscopy (“FTIR”). Because there is no current EPA test method for passive diffusive tube monitoring, as part of this action, the EPA is proposing specific monitor citing and sample collection requirements as EPA Method 325A of 40 CFR part 63, Appendix A, and specific methods for analyzing the sorbent tube samples as EPA Method 325B of 40 CFR part 63, Appendix A.

The EPA is proposing to establish an ambient concentration of benzene at the fenceline that would trigger required corrective action. [Benzene is considered a surrogate for organic HAP from wastewater treatment systems at petroleum refineries, as it is present in nearly all refinery process streams.] Further, the EPA is proposing to require the reporting of raw fenceline monitoring data, and not just the highest fenceline concentration (“HFC”), on a semiannual basis. The EPA also proposes that facilities be required to conduct fenceline monitoring on a continuous basis, even if benzene concentrations, as measured at the fenceline, routinely are substantially lower than the concentration action level. To reduce the cost burden on facilities to comply with this rule, the EPA is soliciting comment on approaches for reducing or eliminating fenceline monitoring requirements for facilities that consistently measure fenceline concentrations below the concentration action level, and the measurement level that should be used to provide such relief.

The EPA is also proposing to remove the SSM exemptions for the petroleum refinery emission standards. As a result, affected units would be subject to an emission standard during such events. The EPA believes that the applicability of a standard during such events will ensure that sources have ample incentive to plan for and achieve compliance and thus the SSM plan requirements are no longer necessary. However, the EPA is proposing alternate standards for startup and shutdown periods for a few select emission sources. Generally speaking, the EPA expects that facilities can meet “nearly all” of the emission standards in Refinery MACT 1 and 2 during startup and shutdown. For Refinery MACT 1 and 2, however, the EPA has identified three emission sources for which specific startup and shutdown provisions may be needed. First, due to safety concerns associated with operating an electrostatic precipitator (“ESP”) during startup of the FCCU, the EPA is proposing specific particulate matter (“PM”) standards for startup of FCCU controlled with an ESP under Refinery MACT 2. Second, as many FCCU operate in “complete combustion” mode without a post-combustion device (i.e., for FCCU without a post-combustion device, organic HAP are controlled by the FCCU itself, so there is no separate air pollution control device (“APCD”) that could be operating during startup), the EPA is proposing specific carbon monoxide (“CO”) standards for startup of FCCU without a post-combustion device under Refinery MACT 2. Third, the EPA is proposing specific standards for sulfur recovery units (“SRU”) during periods of shutdown. The SRU essentially acts as the ACPD for the fuel gas system at the facility and would be operating if the refinery is operating, including during startup and shutdown events. However, there are typically multiple SRU trains at a facility, and different trains can be taken off-line as sour gas production decreases to maintain optimal operating characteristics of the operating SRU during startup or shutdown of a set of process units. Thus, the sulfur recovery plant is expected to run continuously and would only shut down its operation during a complete turnaround or shutdown of the facility. In such situations, the 12-hour averaging time provided for the SRU emissions limitation under Refinery MACT 2 may not be adequate time in which to shut down the unit without exceeding the emissions limitation.

In several prior rules, the EPA had included an affirmative defense to civil penalties for violations caused by malfunctions, to ensure adequate compliance while simultaneously recognizing that, despite the most diligent of efforts, emission standards may be violated under circumstances entirely beyond the control of the source. Under the EPA’s regulatory affirmative defense provisions, if a source could demonstrate in a judicial or administrative proceeding that it had met the requirements of the affirmative defense in the regulation, civil penalties would not be assessed. However, the recent court decision NRDC v. EPA, No. 10-1371 (D.C. Cir. April 18, 2014), 2014 U.S. App. LEXIS 7281, vacated affirmative defense provisions in the CAA section 112(d). In NRDC, the D.C. Circuit found that the EPA lacked authority to establish an affirmative defense for private civil suits and held that, under the CAA, the authority to determine civil penalty amounts lies exclusively with the courts, not the EPA. In light of NRDC, the EPA has declined to include a regulatory affirmative defense provision in this rulemaking. If a source is unable to comply with emissions standards as a result of a malfunction, the EPA may use its case-by-case enforcement discretion to provide flexibility, as appropriate.

[1] Consolidated Petroleum Refinery Rulemaking Repository, found at http://www.epa.gov/ttn/atw/petref.html (last visited May 28, 2014).

[2] See EPA Enforcement Targets Flaring Efficiency Violations, Enforcement Alert, Vol. 10, No. 5, August 2012.