The People of America's Oil and Natural Gas Indusry

EPA's GHG Refinery Guidance Comes Too Late

Jane Van Ryan

Jane Van Ryan
Posted November 10, 2010

The Environmental Protection Agency (EPA) today took two significant steps toward its proposed greenhouse gas (GHG) regulations for stationary sources. It released guidance to help states and local permitting agencies implement controls on GHGs, and it issued "white papers" to refineries, power plants, pulp and paper mills and other industries outlining the Best Available Control Technologies (BACT) that can be used to reduce GHGs.

Starting Jan. 2, 2011, GHG emissions from certain large GHG stationary sources are subject to regulations, and they must obtain GHG permits to build new sources or to expand.

API responded quickly saying the BACT guidance comes too late for the January deadline. "The EPA is railroading job killing regulation onto states, localities and America's businesses," API's Director of Regulatory and Scientific Affairs Howard Feldman said. "EPA's regulations take effect January 2, 2011, but it's already November and EPA is just now releasing guidance documents for permitting."

EPA's summary of GHG reduction measures for refineries lists 40 control technologies. For only 17 of those measures does EPA give its estimate of potential GHG emission reductions. In only one case does EPA provide a cost estimate for the retrofitted equipment. EPA's analysis is superficial at best.

Furthermore, EPA's laundry list of control technologies fails to address safety issues. Can the new equipment be added to a refinery without raising risks to refinery workers or violating government safety requirements? Retrofitting a huge catalytic cracker which breaks large petroleum molecules into smaller ones won't be a simple process.

Perhaps most importantly, EPA's refinery BACT guidance seems to be based on the faulty premise that refiners are ignoring the GHG issue and don't want to do the right thing. In fact, they have a tremendous incentive to reduce their energy usage and thereby reduce their GHG emissions. In 2008, refineries spent $19.5 billion (scroll to Table T27) on energy to produce fuels and other products for consumers. Refiners are keen to improve efficiency, reduce costs and lower GHG emissions. But EPA's 41-page document on control technologies never acknowledges that this incentive already drives refinery operations and planning.

"There is consensus among many people, including President Obama, that EPA's regulation of greenhouse gases under the Clean Air Act may not be the proper path forward for climate change policy," Howard said. "Many governors around the country have expressed alarm about the consequences of this regulation on the economy and jobs given the current economic environment."