EPA’s Petroleum Refinery Rule Will Increase Litigation

The EPA issued its final rule on Sept. 29 seeking to further control emissions of hazardous air pollutants (HAP) and volatile organic compounds (VOC) from petroleum refineries. The rule imposes new requirements on storage vessels, delayed coker units and flares, and requires fenceline monitoring.
The fenceline monitoring requirement is the first ever in a national regulation. A refinery will have to establish sample points along the facility property boundary to monitor for benzene. Meteorological data must also be obtained. If the monitoring establishes levels are below the action level of 9 micrograms/meter3 or 2.8 ppb, the refinery may reduce the sample frequency. If the monitoring establishes levels are above the action level, a root cause analysis must be done and corrective action must be taken, which could include leak inspection using optical gas imaging or more frequent monitoring.

Flares must operate with no visible emissions except in periods not to exceed five minutes in any two consecutive hours. The operation must be monitored when regulated materials are vented to the flare. An initial visible emission demonstration must be done for the first two hours of operation and, depending on observations, at least once a day thereafter. As an alternative, EPA did allow the use of video surveillance camera to continuously monitor emissions.

The rule seems to be a response to EPA’s extensive engagement with communities affected by refinery emissions. Neighboring communities have long complained about flaring, and calls for fenceline monitoring have increased in recent years. While the requirements may address complaints about refinery operations and a need for information, it will result in a relatively small amount of emission reductions.

In the rule’s preamble, EPA claims the final rule will result in a reduction of 1,323 tons/year of HAP and 16,600 tons/year of VOCs from the 142 major source refineries affected by the rule (not including reductions that may occur as a result of operating and monitoring requirements for flares and fugitive emission sources via fenceline monitoring). Although each refinery emits different amounts of pollutants, on a per refinery average this amounts to 9.3 tons/year of HAPs and 117 tons/year of VOCs. EPA estimated the cost of the rule to include a $283 million total capital investment cost with annualized compliance costs of $63 million. Although each refinery may spend more or less, on average it will cost about $2 million per refinery in capital investment and about $450,000/year to comply. EPA also claims these emission reductions will translate to a 15- to 20-percent reduction in cancer incidence associated with refinery emissions.

Perhaps the most worrisome feature, though, is the 37 pages of new recordkeeping and reporting requirements. In addition to mandating all fenceline monitoring results be uploaded to an EPA website, the rule also requires results of each performance test and information on flaring events be routinely reported. This type of increased reporting will place an enormous amount of information in the public realm, which will be easily accessible and likely used to support citizen suits for potential violations and class action plaintiff lawyers for damages for alleged health issues.

The increased reporting and accessibility of information in the rule is similar to that required under the Coal Combustion Residuals (CCR) Rule, which required online compliance reporting. In that rulemaking, EPA blatantly invited citizen suits to help enforce the rule. Together, the CCR Rule and this rule continue a trend of “transparency” established by EPA as part of its Next Generation Compliance initiative. In short, this trend means a regulated facility will not only be subject to traditional EPA enforcement and compliance actions but also an ever-increasing barrage of citizen suits and damage claims.

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