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Oil industry says US EPA's refinery emissions rule would cost $20 billion

Highlights

The US Environmental Protection Agency's proposed regulations on toxic air emissions from oil refineries would cost the industry $20 billion, according to trade groups representing oil producers and refiners.

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In comments filed with the EPA Tuesday, the American Petroleum Institute and and American Fuel and Petrochemical Manufacturers said the proposed rule would be too onerous and could actually lead to higher greenhouse-gas emissions.

"EPA's proposed regulations could drive up costs and roll back environmental progress, forcing refineries to increase emissions by installing hundreds of costly new flare systems at a time when industry has been working with EPA to reduce flaring," API Director of Regulatory and Scientific Affairs Howard Feldman said in a statement.

Tuesday was the deadline for public comments on the regulations. The proposed rule, which would update the EPA's almost two-decades-old toxic emissions standards for refineries, would for the first time require the facilities to measure and report benzene emission levels.


Refineries also would need to upgrade storage tanks, develop performance requirements on flaring waste gases and implement emission standards for delayed coking units.

The EPA, which unveiled the rule in May and intends to finalize it in April, has said its "common-sense proposal" would have "no noticeable impact on the cost of petroleum products" made by US refineries.

The agency said the rule would reduce toxic air pollution from flaring and other refinery activities. Those emissions can cause respiratory problems and potentially cancer, EPA added.

But the oil industry said the rule's three-year deadline for installing flaring technologies would be "impossible to carry out" and could lead to fuel shortages.

"It is not possible to schedule all of the production outages that would be required for compliance in the three years provided," API and AFPM said in their comments. "We estimate at least a decade is required to minimize, though not eliminate, lost fuels production while the hundreds of new flares are installed."

Earthjustice and the Environmental Integrity Project sued the EPA on behalf of community groups in Louisiana, Texas and California, over the agency's failure to update its toxic air pollution standard for oil refineries, as required by the Clean Air Act. The proposed rule is the result of a settlement with the groups.

The agency said the proposed rule would reduce toxic air emissions, including benzene, toluene and xylene, by 5,600 tons/year, while volatile organic compound emissions would be cut by about 52,000 tons/year.

The EPA is required under the Clean Air Act to periodically update its emissions limits for a number of industries, including oil refineries. The agency last reviewed oil refinery emissions in 2009 and concluded then that no changes then were needed to limits first established in 1995.

Earthjustice and the Environmental Integrity Project, in suing the EPA, said oil refineries were underreporting how much benzene and other toxic chemicals they emit.

--Herman Wang, herman.wang@platts.com
--Edited by Jeff Barber, jeff.barber@platts.com