SECURITY ALERT: BAD REGULATION SABOTAGING REFINERIES

Fear of terrorist attack has brought new attention to the security of US refineries and pipelines.

The concern is obviously justified. If suicidal fanatics can bring down both towers of the World Trade Center in New York and destroy part of the Pentagon in Washington, DC, they can no doubt damage large, stationary targets like refineries.

Whether it would serve the agenda of Arab radicals thought responsible for the Sept. 11 tragedies in New York, Washington, and Pennsylvania, however, is subject to doubt.

But questions of motivation shouldn't ease worry about the security of US refineries. Indeed, the subject is receiving much attention in the mass media. That's good.

Where, though, was worry about processing infrastructure when federal caprice was shuttering refineries?

In the last half of the Clinton administration, the Environmental Protection Agency ran amok with refinery regulation.

Among other things, it tightened gasoline sulfur and air-toxics standards, allowed extra-territorial air-quality regulation on behalf of four Northeastern states, and adopted a diesel sulfur standard much stricter than warranted by environmental considerations.

Taking affect almost at the same time, the measures force refiners to make large equipment adjustments or additions all at once. And, as though to aggravate the timing difficulty, the EPA said it would retroactively interpret its New Source Review program in such a way that many refiners might be deemed out of compliance with permitting requirements.

The regulatory crackdown occurred while US air pollution, thanks to historic regulation, was in steep decline.

The EPA under Bush has been more hospitable to refiners than its predecessor. But it comes under assault whenever it tries to correct Clinton-era excesses. And it has caved on occasion.

In a trade-off for farm-state support of the Bush tax cut, for example, EPA earlier this year refused to waive the oxygen content requirement for reformulated gasoline. With methyl tertiary butyl ether in decline as an oxygenate, the requirement guarantees a market for ethanol, which would be entering the gasoline pool anyway as an octane and volume booster.

In a more constructive move, the Bush team agreed to look again at the thumb in the refiner eye over diesel sulfur. Environmentalists and Democrats naturally and absurdly wailed about how any change in the rule would damage air quality.

On Oct. 3, a coalition of oil industry trade associations took some of the heat off the Executive Branch. It asked the US Court of Appeals for the DC Circuit to send the diesel sulfur rule back to EPA for revision, warning of shortages beginning in 2006.

It's a good and responsible move. If successful, it would not at all compromise environmental values. The industry fully supports lowering the sulfur content of highway diesel by 90%. The difference between that cut and the 97% reduction demanded by the Clinton EPA is environmentally insignificant but economically great. The larger cut requires much more investment by refiners.

The Clinton EPA acted in refinery regulation as though environmental protection was a direct function of economic pain imposed on the regulated. Many environmentalist stooges went along with the nonsense.

Regulations adopted under that notion have already caused some refineries to close. Unless EPA or the courts fix the damage, others will follow.

A terrorist attack on a US refinery would indeed be dreadful. But the market effects alone-embodied in refineries not delivering oil products to market-would differ little from what the Clinton EPA accomplished with regulatory recklessness.

Related Articles

Grizzly files OSCA application with AER for Thickwood

02/25/2015

Grizzly Oil Sands ULC, Calgary, has filed an Oil Sands Conservation Act application with Alberta Energy Regulator for the Thickwood project.

BLM moving toward strategy for Greater Sage Grouse, Jewell says

02/25/2015 Calling it a remarkable example of federal, state, and local cooperation, US Sec. of the Interior Sally Jewell said the US Bureau of Land Managemen...

Hickenlooper’s siting task force calls for more local consultation

02/25/2015 Colorado Gov. John W. Hickenlooper’s (D) oil and gas siting taskforce called for more consultation and greater involvement with local communities o...

Santos-Inpex JV gains permits in Browse basin

02/25/2015 A joint venture of Santos Ltd. and Inpex Corp. has been awarded two exploration permits in the Browse basin offshore Western Australia, about 500 k...

Obama vetoes bill approving Keystone XL crude oil pipeline

02/25/2015 US President Barack Obama vetoed S. 1, authorizing construction of the proposed Keystone XL crude oil pipeline, saying that Congress had attempted ...

County decision in Washington state stalls Shell’s Bakken rail plans

02/24/2015 A Skagit County Hearing Examiner in Mount Vernon, Wash., halted Royal Dutch Shell PLC’s plans to move Bakken crude oil by rail to the company’s Ana...

AER sets new seismic monitoring rules for Duvernay in the Fox Creek area

02/23/2015 The Alberta Energy Regulator (AER) announced seismic monitoring and reporting requirements for companies using hydraulic fracturing in the Duvernay...

BOEM publishes second final SEIS for 2008 Chukchi Sea lease sale

02/23/2015 The US Bureau of Ocean Energy Management published a fresh supplemental environmental impact statement (SEIS) for a Chukchi Sea federal oil and gas...

BLM decision clears way for first NPRA federal oil production

02/23/2015 The US Bureau of Land Management issued a record of decision (ROD) for the proposed Greater Mooses Tooth One project (GMT1), which cleared the way ...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected