Enforcement with a Flair
EPA has seen the smoke.
This certainly is no joke.
Benzene is a neighborhood scare,
With upsets going to the flare.
On July 10, the Department of Justice and EPA announced the lodging of a consent decree with Shell Oil Company to resolve alleged Clean Air Act violations at Shell’s refinery and chemical plant in Deer Park Texas. This agreement represents the fourth “refinery flare consent decree” in the past year. More are expected.
Shell will spend $115 million to control emissions from flares and other processes, and will pay a $2.6 million civil penalty. EPA alleged that Shell was improperly operating its flaring devices resulting in excessive emissions of benzene and other hazardous air pollutants. Shell will spend $100 million to reduce flare emissions.
These flare consent decrees represent a new chapter in EPA’s national Petroleum Refinery Initiative (“PRI”), which, beginning in 2000, resulted in the entry of 31 settlements covering 107 refineries in 32 states, affecting 90% of the domestic refining capacity. EPA did address refinery flares as one of the marquee issues in PRI consent decrees – compliance with the New Source Performance Standards (“NSPS”) for Petroleum Refineries.
EPA is now pushing the envelope to impose “regulatory requirements plus.” Through an enforcement alert in August of last year, EPA warned industry that there were significant issues with flare efficiency and excessive emissions. EPA Enforcement Alert: EPA Enforcement Targets Flaring Efficiency Violations.
What is EPA doing? What is the basis of this Petroleum Refinery Initiative 2.0 and the imposition of “regulatory requirements plus”?
EPA bases this new initiative on the “general duty” requirements. NSPS requires that at all times owners and operators should operate and maintain a facility or source consistent with “good air pollution control practices.” In addition, Section 112r of the CAA requires owners and operators to maintain a safe facility by taking such steps as are necessary to prevent releases of hazardous air pollutants (“HAP”), and to minimize the consequences of accidental releases which do occur. Accordingly, with no threshold amount, any release of a listed HAP (e.g. benzene) that could have been prevented violates this general duty. If a flare smokes, there must be a violation.
This general duty is used to require control measures that go beyond those specified in the regulations. The consent decrees include conditions addressing flare combustion efficiency limits incorporating automated controls with complex and expensive monitoring systems, flaring caps for individual flares and the overall refinery, and flare gas recovery systems for individual flares.
The enforcement train has left the station. Who will be next in line? How much will the ticket cost? Are there rulemaking or other actions that may be taken to slowdown or stop the train? Flares are not unique to petroleum refineries and petrochemical plants (e.g. flaring in oil and gas production facilities). Will EPA provide other industries the opportunity to go for a train ride?