Koch, BP reach innovative refinery emissions agreements with regulators


The US Department of Justice and the Environmental Protection Agency said Tuesday agreements had been reached with BP and Koch Petroleum Group that will reduce air emissions at 12 refineries.

Justice said the agreements, together valued at nearly $600 million, are the largest ever in the refining industry. When fully implemented, they will eliminate nearly 60,000 tons/year of air pollution.

EPA Administrator Carol Browner said, �We appreciate the unprecedented cooperation from BP and Koch in stepping forward to work with us to reach this innovate and comprehensive agreement.�

Under the deal, BP will spend more than $500 million to improve pollution control technologies and work practices at nine refineries that will reduce emissions from smokestacks, leaking valves, wastewater vents, and flares. Koch will invest up to $80 million at three refineries to achieve the same goals.

EPA said the deals represent a breakthrough in its enforcement strategy for US refineries by achieving comprehensive, across-the-board compliance on a cooperative basis.

The agreement, which affects 15% of US refining capacity, will cut nitrogen oxide and sulfur oxide emissions by 49,000 tons/year from the 12 plants by 2004, and another 6,000 tons by 2008, when new technologies become available.

Also, improved leak detection and repair practices and other pollution control upgrades will reduce smog-causing volatile organic compound emissions by 3,600 tons/year and benzene emissions by 400 tons/year.

The agencies said, �The agreement also includes measures to improve safety for workers and local communities that will sharply reduce accidental releases of pollutants.�

They said BP also agreed to pay a $10 million penalty and Koch a $4.5 million penalty for past violations.

BP and Koch opened talks with EPA this spring rather than wait for possible enforcement action, said DOJ and EPA. In return for their cooperation and commitments, EPA offered a �clean slate� for certain past violations, and greater flexibility and incentives for installation of new technology.

Justice said the agreements with BP and Koch set the framework for a comprehensive consent decree, which is due for completion within a few weeks.

BP operates refineries at Belle Chase, La.; Los Angeles; Bellingham, Wash.; Mandan, ND; Salt Lake City; Toledo, Ohio; Texas City, Tex.; Whiting, Ind.; and Yorktown, Va. Koch has a refinery at Rosemont, Minn., and two refineries at Corpus Christi, Tex.

Groundbreaking approach
The agreements are seen as groundbreaking for several reasons. They foster cooperation between industry and regulatory authorities, they provide the refiners with the flexibility to use emerging technologies to reach clear-cut environmental goals, and they approach past problems from the standpoint of solutions rather than punishments.

"This agreement [with Koch] breaks new ground for EPA and the refining industry at large in two important ways," said Eric Schaeffer, director of EPA's Office of Regulatory Enforcement. "First, it demonstrates that we can reconcile two critical goals by preserving both a competitive environment for American industry and a clean environment for the American public. Second, and equally important, it proves that, in addressing these complex and contentious issues, we can still work together without incurring the costs and delays of burdensome litigation."

Koch seems to value the opportunity to address its past violation through future performance goals.

"This agreement addresses the past in a small way and the future in a big way," said Jim Mahoney, executive vice-president of operations for Koch Petroleum. "It closes some old, disputed issues to the satisfaction of all parties involved and lays out an efficient, flexible path forward to implementing additional clean technologies and best practices at our Minnesota and Texas refineries."

Don Clay, Koch's vice-president of environment and regulatory affairs and a former EPA assistant administrator, said, "The EPA's efforts to work with companies in an atmosphere of mutual trust and cooperation to pave the way for pollution-control advances are to be commended. We all agree that a clean environment is good for America and good for business. This agreement clearly shows that, when it comes to complex environmental issues and evolving regulatory requirements, cooperative processes are the most effective path to shared stewardship goals."

"If we stay focused on the twin goals of a clean environment and a competitive, job-generating economy," said Mahoney, "vigorous debate on complex regulatory issues can lead to real progress. New discoveries and technologies, along with evolving compliance responsibilities, force us all to constantly reexamine past practices, best practices, and future plans. That process need not result in drawn-out, expensive litigation. This agreement is proof positive."

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