On September 29, 2015, the U.S. Environmental Protection Agency (EPA) issued groundbreaking new regulations to control hazardous air pollutant (HAP) emissions from petroleum refineries, including a first ever requirement for fenceline monitoring and public reporting of monitoring data. The final rule arises from the “residual risk and technology” review of existing HAP standards for refineries as mandated by the Clean Air Act.

The chief new requirement requires continuous monitoring of benzene concentrations at the fenceline of refinery facilities to ensure that refineries appropriately manage fugitive source emissions (e.g., from leaking equipment and wastewater treatment). Monitors must encircle the facility to better identify sources of pollution under any wind direction. Alternative monitoring methods may be considered in the future as technology advances. Monitoring data will be available to the public through a new EPA database. Corrective action will be required if emissions detected by the fenceline monitoring exceed prescribed levels.

EPA Administrator Gina McCarthy likened the new database to a “kind of neighborhood watch” for refinery air pollution. Environmental watchdog groups, and plaintiff attorneys, can be expected to utilize the information to target facilities.

The rule also aims to “virtually eliminate” visible smoking flare emissions and releases by pressure release devices by mandating a series of process changes and pollution prevention measures. The pressure release device and flaring measures of the final rule pare back more extensive requirements that would have resulted in the need to install numerous additional flares to control emissions from pressure release devices. The final rule also includes new emission limits for delayed cokers and storage tanks.

Industry sources peg the costs of the final rule at approximately $1 billion (compared to an estimated $20 billion under the proposal). EPA, by contrast, contends that 142 petroleum refineries will incur $283 million in capital costs to comply with the updated standards.

The Clean Air Act requires EPA to assess the risk remaining (i.e., residual risk) after the application of maximum achievable control technology (MACT) standards and to promulgate additional standards, if required, to provide an ample margin of safety to protect health or prevent an adverse environmental effect. The Act also requires the agency to review and revise the MACT standards, if necessary, after evaluating any improvements in practices, processes and control technologies (i.e., technology review) since adoption of the original MACT rule. This “risk and technology review” is to be conducted eight years following promulgation of the original MACT.

Despite changes in the final refinery rule, industry stakeholders remain concerned about the new requirements. In particular, the residual risk review of the sector concluded that refinery emissions fall under “the significance level” for chronic risk, suggesting that the tighter standards (based on an analysis of feasible and available technology) are unnecessary.

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Please join us October 22, 2015 in Houston, TX, for our advanced seminar on key regulatory issues facing the U.S. energy industry. This full-day conference will examine the latest issues, risks, and business opportunities emerging from federal regulatory and policy making decisions. Details here. REGISTER HERE.