Oil Refinery Permits Photo by Ken Ford A Handbook for Citizen Participation in the Permitting of Oil Refineries under the New Source Review Provisions of the Clean Air Act December 2007 Oil Refinery Permits A Handbook for Citizen Participation in the Permitting of Oil Refineries under the New Source Review Provisions of the Clean Air Act Author: Benjamin J. Wakefield Counsel, Environmental Integrity Project [email protected] Copyright © 2007, The Environmental Integrity Project The Environmental Integrity Project (EIP) is a nonpartisan, nonprofit organization established in March of 2002 by former EPA enforcement attorneys to advocate for more effective enforcement of environmental laws. EIP has three objectives: 1) to provide objective analyses of how the failure to enforce or implement environmental laws increases pollution and affects the public’s health; 2) to hold federal and state agencies, as well as individual corporations, accountable for failing to enforce or comply with environmental laws; and 3) to help local communities obtain the protection of environmental laws. An electronic copy of this Manual can be downloaded free of charge from the EIP website at www.environmentalintegrity.org . Acknowledgements This project received funding support from the Marisla Foundation. Such support does not indicate endorsement by the Marisla Foundation of the contents of this Handbook. “The ABCs of NSR – A Citizen’s Guide to the Clean Air Act’s New Source Review Permitting Process,” written by Laura Haight, et al. , for the New York Public Interest Research Group Fund, Inc., is an excellent guide to the law and process of the NSR program in general, upon which this Handbook has relied and to which it owes a great debt of gratitude. This Handbook has also relied upon “The Proof is in the Permit – How to Make Sure a Facility in Your Community Gets an Effective Title V Air Pollution Permit,” an excellent and detailed guide to participation in the Clean Air Act Title V permitting process, written by Keri Powell, et al. , for the New York Public Interest Research Group Fund, Inc., and the Earth Day Coalition, Inc. This project was completed under the direction of EIP’s Executive Director, Eric Schaeffer. EIP’s Senior Counsel, Karla Raettig, contributed to portions of the text. In addition, portions of the text are taken from EIP’s report, “Gaming the System – How Off-the-Books Industrial Upset Emissions Cheat the Public Out of Clean Air” (EIP, August 2004), written principally by Kelly Haragan. Alex Sagady, of Alex J. Sagady and Associates, provided valuable expertise and consultation regarding the technological processes involved in petroleum refining. Finally, thanks to Kathy Andria (American Bottom Conservancy), Bob Levy (Industry Professionals for Clean Air), Adam Babich and Michael Murphy (Tulane Environmental Law Clinic), and others for reviewing drafts of this Manual. Their comments greatly strengthened the final product. Their listing does not constitute an endorsement of the content of this Manual. Table of Contents Introduction …………………………………………………………………....………. 1 How this Handbook is Organized ………………………………………………...…… 4 I. OVERVIEW OF NEW SOURCE REVIEW …………………………….…. 6 A. The Law ……………………………………………………………….. 6 B. The Permitting Process ……………………………………......…….. 12 1. Background …………………………………………….……. 12 2. Steps in the Process ……………………………………..…… 13 II. REFINING 101 – A BRIEF INTRODUCTION TO HOW REFINERIES WORK ………….…………………………………………… 17 A. Desalting ……………………………………………………………… 18 B. Fractional Distillation …………………………………………..…… 18 C. Cracking ……………………………………………………………… 19 1. Thermal Cracking …………………………………...………. 19 2. Coking ……………………………………………………..…. 20 3. Catalytic Cracking ……………………………..……………. 21 D. Catalytic Hydrocracking …………………………………...……….. 22 E. Heaters and Boilers …………………………………………..……… 22 F. Wastewater Treatment ……………………………………...………. 23 G. Sulfur Recovery ……………………………………………..……….. 24 H. Flare System ……………………………………………...………….. 25 I. Leak Detection and Repair (LDAR) ……………………………….. 25 J. Storage Tanks ……………………………………………....….…….. 26 i III. KEY ISSUES IN CONSTRUCTION (“NSR”) REFINERY PERMITS ……………………………………………………………………. 26 A. Issues Pertaining to both PSD and NA NSR Construction Permits ……………………………………………………….………. 27 1. Emissions increases and NSR applicability ………………... 27 a. “Major Stationary Source” and “Regulated NSR Pollutants” ……………………………..………. 29 b. Physical or Operational Change ……………………. 29 c. Significant Emissions Increase ………………..……. 29 d. Significant Net Emissions Increase (a.k.a., “Netting”) ………………….………………… 33 2. Monitoring, Recordkeeping, and Reporting …………...….. 36 a. Types of Monitoring Technology ………………..….. 37 b. Practical Enforceability …………………...………… 41 i. Ambiguity ……………………….…………… 41 ii. Recordkeeping and Reporting …………..….. 44 iii. Permitted Non-Compliance …………………. 44 iv. Limiting “Credible Evidence” …………..….. 45 3. “Startup, Shutdown & Maintenance” and “Upsets” ……… 46 4. Environmental Justice ……………………………….……… 50 5. Class I Area Impacts …………………………………..…….. 51 B. PSD Permit Issues …………………………………………………… 53 1. BACT Analysis …………………………...………………….. 53 2. Air Quality Impact Analysis …………………….………….. 56 3. Additional Impacts Analysis (Soil & Vegetation, Growth, and Visibility) ………………...……………………. 58 ii C. NA NSR Permit Issues …………………………….………………… 59 1. LAER Analysis ………………………………………………. 59 2. Emission Reductions / Offsets ………………………………. 60 3. Demonstration of Compliance …………………….…...…… 61 4. Alternatives Analysis ……………………………..…………. 62 D. Specific BACT (PSD) and LAER (NA NSR) Technologies to Seek in Oil Refinery Construction Permits ……………..………. 62 1. Refinery Heaters and Boilers ……………………………….. 63 2. Waste Flare Gas Systems …………………………………… 64 3. Fluidized Catalytic Cracker Regeneration Units ……..…… 65 4. Fugitive Emissions …………………………………….…….. 66 5. Product Loading Racks and Marine Terminals …….…….. 66 6. Wastewater Management Units ………………………..…… 67 7. Catalytic Refining Catalyst Regeneration Operation …...… 67 8. Internal and External Floating Roof Tanks ……………….. 68 9. Wastewater Treatment Plant Filter Press Sludge Incinerator …………………………………………………… 68 10. Petroleum Coke Handling ………………………….……….. 68 11. Monitoring ………………………………..………………….. 69 Conclusion ……………………………………………….…………………………… 70 Appendices Appendix A: Summary of Issues and Comments for NSR Permits Appendix B: BACT and LAER Technologies for Oil Refineries iii Appendix C: “Significant” Emission Increase Thresholds for “Major Modifications” Pursuant to 40 C.F.R. § 51.166(b)(23)(i) Appendix D: Ambiguous Language That May Indicate Practical Enforceability Problems Appendix E: Unacceptable Credible Evidence-Limiting Language Appendix F: Minimum Criteria for Excess Emission Affirmative Defenses (Where Available) Appendix G: Key Steps in the “Top-Down” BACT Determination Appendix H: Petroleum Refining Process Flow Chart Appendix I: Mandatory Class I Areas iv Oil Refinery Permits A Handbook for Citizen Participation in the Permitting of Oil Refineries under the New Source Review Provisions of the Clean Air Act Introduction Petroleum refineries emit millions of pounds of air pollution that poses a serious risk of harm to human health and the environment and impairs the quality of life for the people living in nearby communities. Carcinogens and other pollutants are released directly into the predominantly low-income and minority neighborhoods that typically share the refinery fencelines, and many refineries are located in areas that already do not meet federal air quality standards set to protect public health. Further, the environmental consequences of refinery pollution range from acid rain to global warming. Common air pollutants released from oil refineries include volatile organic 1 compounds (VOCs), sulfur dioxide (SO 2), nitrogen oxides (NO X), particulate matter 2 (PM), carbon monoxide (CO), hydrogen sulfide (H 2S), and sulfuric acid aerosol (or “mist”). Many of the pollutants emitted by refineries are “hazardous air pollutants” (“HAPs”), 3 such as benzene, 1,3 butadiene, hexane, 1,2,4-trichlorobenzene, toluene, xylenes, propylenes, naphthalene, carbon disulfide, carbonyl sulfide, selenium compounds, nickel compounds, chromium compounds, cadmium compounds, hydrogen fluoride (hydrofluoric acid (“HF”)), and formaldehyde.4 Many refinery pollutants are also “OSHA carcinogens,” 5 such as polycyclic aromatic hydrocarbons (“PAHs” or “polycyclic aromatic compounds” (“PACs”)), benzene, ethylbenzene, 1,3-butadiene, naphthalene, styrene, tetrachloroethylene, formaldehyde, and metals such as nickel and 1 Numerous VOCs emitted by refineries – such as benzene; 1,3 butadiene; toluene; and xylenes – are toxic air pollutants – those known or suspected to cause cancer or other serious human health problems. 2 “Particulate matter” includes “total suspended particulates” (“TSP”), PM 10 (particulate matter between 2.5 and 10 micrometers in diameter), and PM 2.5 (particulate matter less than or equal to 2.5 micrometers in diameter). 3 HAPs are pollutants “which are known to be, or may reasonably be anticipated to be, carcinogenic, mutagenic, teratogenic, neurotoxic, which cause reproductive dysfunction, or which are acutely or chronically toxic … or [which cause] adverse environmental effects whether through ambient concentrations, bioaccumulation, deposition, or otherwise….” Clean Air Act § 112(b)(2), 42 U.S.C. § 7412(b)(2). 4 See Clean Air Act § 112(b)(1), 42 U.S.C. § 7412. The original list of 189 HAPs promulgated as part of the Clean Air Act Amendments of 1990 can also