Nick Snow
Washington Editor
The US Environmental Protection Agency can expect criticism when it hosts refiners at a listening session on Mar. 4 about its efforts to regulate greenhouse gases under the Clean Air Act. Steve Cousins, a vice-president of independent refiner Lion Oil Co., didn't mince words when he testified Feb. 9 before a House Energy and Commerce Committee subcommittee hearing on the subject.
"We believe these actions by EPA are contrary to the plain wording of the Clean Air Act, are unwise, and endanger America's economic and national security," he told the committee's Energy and Power Subcommittee. "On top of this, EPA's greenhouse gas regulations will have zero positive impact on our global environment, bringing the American people enormous pain and no gain. These regulations are not about environmental protection—they are about job destruction."
Cousins explained that Lion Oil operates a single refinery in El Dorado, Ark., which sells gasoline, diesel fuel, and asphalt to customers in seven states.
"We can't offset the costs of greenhouse gas regulation through profits from other lines of business, such as upstream oil production or retail," he noted. "Our refining operation has to pay for itself or the plant cannot continue to operate. This is true not just for Lion Oil, but for the domestic refining industry as a whole."
'Economic engine'
Lion Oil directly employs 600 people at a unionized plant in an Arkansas county with nearly 10% unemployment, according to Cousins. "The jobs of more than 1,800 people—most with families—are supported indirectly by our company, making Lion Oil a leading economic engine in southern Arkansas," he said. "We and our employees paid about $15 million in local, state and federal taxes last year, even though our company barely broke even."
He said one of the biggest problems with EPA's GHG effort is the business uncertainty it creates. "In our industry, expansions in manufacturing capacity take years to design, permit, finance, and construct," Cousins said. "With the breakneck pace at which EPA is spewing out new regulations, seeing a clear and feasible path 5 years into the future is impossible."
EPA's GHG program already has had an impact on Lion Oil's operation, he told the subcommittee. The refiner began a major expansion at the plant, costing several hundred million dollars, in 2007 which would have increased its capacity to 100,000 b/d from 70,000 b/d.
The 2008-09 recession and several other factors kept it from reaching that goal, leaving it with an 80,000 b/d capacity, Cousins said. "The uncertainty and potentially prohibitive costs associated with possible cap-and-trade legislation and EPA's greenhouse gas regulations was a critical factor," he added.
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