Environmental Protection Agency Proposes Revisions to MACT Standards Applicable to Petroleum Refinery Operations

May 19, 2014

Proposed Rule Mandates Fenceline Monitoring for Benzene and Combustion Efficiency Requirements for Flares     

On May 15, 2014, the Environmental Protection Agency proposed revisions to the MACT standards applicable to petroleum refinery operations.  If adopted, the proposed MACT revisions will mandate fenceline monitoring for benzene at all domestic refineries and related public reporting for the first time.  In addition, the proposed rule will impose further requirements on flaring, coking, and tanks at petroleum refineries.

EPA also proposes to eliminate SSM defenses under the refinery MACT standards.  In doing so, however, EPA has created specific limits applicable to some startup and shutdown activities and has suggested that refineries may be able to assert malfunction defenses, depending on the specific circumstances involved.

EPA must finalize these proposed MACT revisions by April 17, 2015 under a consent decree settling related litigation between EPA and environmental groups.

Key Elements.  The proposed rule includes four major revisions to the current MACT standards governing petroleum refining:

• Fenceline Monitoring for Benzene.  The agency’s proposal would require monitoring of benzene in ambient air along the perimeter of refineries.  This proposal would establish an action level of 9 µg/m³ (on a rolling annual average corrected for background).  Relying on estimates of fugitive emissions provided by industry, EPA asserts that no refinery will trigger the requirement for corrective action measures, assuming the estimates are consistent with actual emissions.

  Corrective action will include root cause analysis to determine the primary cause of any exceedances.  Based on this root cause analysis, facilities will make their own determination on the actions necessary to reduce air concentrations at the fenceline to levels at or below the concentration action level.  If exceedances continue to the next sampling period, impacted refineries will be required to submit corrective action plans to EPA under the current proposal.

  Finally, the proposed fenceline monitoring provisions will require refineries to report raw fenceline monitoring data at each monitor location semi-annually.  EPA plans to make this data available to the public.

• Combustion Efficiency for Flares.  The rule proposes new emission and work practice standards aimed at increasing combustion efficiency for flares.  The goal of these provisions is to ensure that flares used as air pollution control devices should achieve 98-percent HAP destruction efficiency.

  The new standards include operational limits to promote combustion efficiency.  Specifically, the rule proposes that refinery flares operate pilot flame systems continuously and with automatic re-ignition systems, and further that refinery flares operate with no visible emissions.  The proposed rule also consolidates requirements related to flare tip velocity.

  The proposed rule provides sources with three options for monitoring combustion zone gas:  the measurement and monitoring of net heating value, a lower flammability limit, or a total combustible fraction.  To comply with the operational standards for any of the three options, sources will need to monitor flow rate of flare vent gas, flow rate of total steam assist media, flow rate of premix assist air, and composition of flare vent gas.

• New Emission Standards for Delayed Coking Units.  The proposed rule would establish new work practice standards for delayed coking units.  In particular, it would establish a lower pressure set point (2 psig) at which operators can switch from venting to an enclosed system to venting to the atmosphere, essentially requiring coking units to vent to a closed system for a longer period.    
• Limitation of SSM Defenses for Refinery MACT Rules.  Finally, the rule proposes to eliminate SSM exemptions available to refineries under Subparts CC and UUU.  In proposing this action, EPA cites the D.C. Circuit’s vacatur of SSM exemptions under the MACT Subpart A general provisions in Sierra Club v. EPA.

  EPA explained that, in proposing the standards in this new rule, it considered emissions during startup and shutdown periods.  Because most emission sources have pollution control devices during startup and shutdown, EPA concluded that compliance with existing and new proposed standards is feasible.  Three emission sources in the refinery MACTs, however, will receive special limits for startups and shutdowns.  First, EPA proposes a PM standard under Subpart UUU applicable during startup of FCCUs, recognizing that safety considerations may limit the operation of precipitators during such operations.  Second, the rule would set a specific CO limit for startup of FCCUs without a post-combustion device.  And third, EPA has included a special rule for sulfur recovery units during shutdown.

  With respect to malfunctions, EPA determined that “CAA section 112 does not require that emissions that occur during periods of malfunction be factored into development of section 112 standards.”  “In addition,” EPA explained, “emissions during a malfunction event can be significantly higher than emissions at any other time of source operation, and thus, accounting malfunctions in setting standards could lead to standards that are significantly less stringent than levels that are achieved by well-performing non-malfunction sources.”  Accordingly, unlike startups and shutdowns, “[i]n the event that a source fails to comply with the applicable CAA section 112(d) standards as a result of a malfunction event the EPA would determine an appropriate response based on, among other things, the good-faith efforts of the source to minimize emissions during malfunction periods.”  In conclusion, EPA indicates that sources can continue to assert malfunction defenses, notwithstanding the fact that the malfunction defense is removed from the MACT standards.

Potential Implications for the Regulated Community and Beyond.

• In the proposed rule, EPA explains that the “fenceline monitoring standard is a new approach for fugitive emissions control,” indicating EPA may expand this tactic to other industries.
• As EPA itself recognized in announcing the new rule, many of the requirements imposed by the proposed regulation are already implemented in recent enforcement actions under the petroleum refinery initiative.  To the extent provisions of those consent decrees are different from the new MACT standards, refineries may not be able to take advantage of the flexibility offered in this rule on operational standards and monitoring.  These companies also may run the risk of inconsistent or duplicative requirements, including reporting requirements, under consent decrees and this new rule.

Gibson, Dunn & Crutcher lawyers are available to assist in addressing any questions you may have about these developments.  To learn more about the firm’s Environmental Litigation and Mass Tort Practice Group, please contact the Gibson Dunn attorney with whom you usually work or the authors:   

Peter S. Modlin – San Francisco (415-393-8392, [email protected])
Stacie B. Fletcher – Washington, D.C. (202-887-3627, [email protected])

Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.