Patrick Crow
Washington Editor
The U.S. oil industry is refighting lost skirmishes this summer as House and Senate conferees work on compromise Clean Air Act legislation.
Oil lobbyists will be arguing against several provisions such as requirements for reformulated gasoline. But changes will be hard to win.
Merging the House and Senate Clean Air Act reauthorization bills will be no small task. Both are about 700 pages long. They take different approaches to different problems. The House bill is more stringent in some respects, the Senate bill in others.
Leaders have named 147 congressmen-more than one fourth of Congress-to serve on the conference committee. They have 33 working days before the planned Oct. 4 adjournment.
Legislative staff members, who will do most of the work, say a compromise bill cannot possibly be approved before September or October. They say it's not likely legislation will be passed until the closing weeks-or days-of the 101st Congress.
But they are equally confident the job can be done.
There is very strong support for a Clean Air Act revision. It passed the Senate Apr. 3 by an 89-11 vote and the House May 23 by a 401 21 vote. And legislators campaigning this fall for reelection want to list passage as an achievement.
WHAT IT DOES
The Clean Air Act, originally passed in 1970 and revised in 1977, requires the Environmental Protection Agency to set limits for air pollutants. EPA has regulated six contaminants: particulate matter, sulfur dioxide, carbon monoxide, nitrogen dioxide, lead, and ozone.
Since passage and revision, pollution levels have been dramatically reduced, and most areas of the country meet national ambient air quality standards for lead (mainly due to the switch to unleaded fuel), nitrogen dioxide (from smokestacks), sulfur dioxide, and particulate matter. Meeting standards for carbon monoxide and ozone has been more difficult, although smog has been significantly reduced.
The House and Senate bills would tighten control requirements in cities that have not yet met federal air quality standards, establish an acid rain control program, and create a system for regulating toxic air pollution.
They also would require tighter auto emissions standards, mandate cleaner gasoline and clean fueled vehicles in some cities, and phase out production of chemicals that contribute to depletion of the stratospheric ozone layer.
ALTERNATIVE FUELS
The bills encourage alternative fuels development and set tailpipe emissions for gasoline and diesel fueled cars, trucks, and buses standards that are more rigorous for 11 serious ozone nonattainment areas.
The bills offer different approaches for promoting development of private and government fleets that can use alternative fuels.
The Senate bill requires EPA to require that oil companies make clean burning alternative fuels available in certain nonattainment areas and later in nationwide transportation corridors. A service station would not have to offer an alternative fuel if it recently had replaced its underground storage tanks.
The House bill limits the clean fueled vehicle program to California. There, the program requires 150,000 cars/year burning alternative fuels to be sold through 1996 and 300,000 thereafter.
EPA would set standards for the fuels and determine which would be sold in which areas. Refiners and service stations would be required to make them available.
Under both programs, stations selling more than 50,000 gal/month would be required to make at least one alternative fuel available, regardless of whether they offer reformulated gasoline.
The Senate bill would ban the manufacture or sale of any on or off road engine that requires leaded gasoline after model year 1992. The sale of gasoline containing lead would be banned July 1, 1992, unless a study determines it would lead to a shortage of fuel for farm vehicles.
Both bills would require EPA to issue rules lowering the volatility of fuels, depending on regional pollution problems. And they stipulate that beginning Oct. 1, 1993, diesel fuel for vehicles could not contain more than 0.05 wt % sulfur or fail to meet a cetane index minimum of 40.
The Senate bill does not require refiners with less than 25,000 b/d of capacity to meet that limit for their diesel. The sulfur ban would not apply to diesel used in oil exploration, production, or development on the North Slope of Alaska.
Both bills require EPA to issue rules requiring all new cars to be equipped with onboard canisters to capture 95% of refueling emissions if the Transportation Department determines the canisters are not dangerous to motorists.
Both require EPA to issue specifications for fuel quality to minimize emissions of hydrocarbons, carbon monoxide, nitrogen oxide, and particulates. The specifications could ban fuel impurities or require the use of additives. And EPA must require refiners to use additives in all their gasolines to prevent buildup of deposits in fuel injected engines.
CLEAN FUELS
The bills require EPA, within 1 year, to set specifications for reformulated gasoline sold for conventional vehicles in severe or extreme ozone nonattainment areas.
The specifications would limit aromatic hydrocarbon content to no more than 30 vol % as of Jan. 1, 1992, dropping to 25 vol % by Jan. 1, 1996. In the Senate bill, benzene content would be less than 1% or lower if it can be achieved without added capital spending The House bill requires less than 0.8%.
Also, oxygen content would be at least 2 wt % by Jan. 1, 1992, 2.5 wt % a year later, and 2.7 wt % by Jan. 1, 1994. EPA could waive that if it determines that use of oxygenated fuels could prevent or interfere with attainment of standards for pollutants other than carbon monoxide.
Companies selling fuels with an oxygen content higher than required would be eligible for credits.
Under the Senate bill, EPA could delay implementation of the reformulated gasoline requirements for 3 years to allow lead time for refiners to provide the fuels.
The Senate bill requires that beginning Oct 1, 1991, any gasoline used in a carbon monoxide nonattainment areas from Oct. 1 to Mar. 31 have an oxygen content of at least 3.1 wt %. The House bill calls for 2.7 wt %. Pumps would have to carry labels indicating the fuel is oxygenated and would reduce vehicle carbon monoxide emissions. And the Senate bill orders EPA to study expanding the use of oxygen in gasoline to all cities of 100,000 population, regardless of their attainment status.
It allows EPA to waive the oxygen standard if EPA determines oxygenated fuels will increase other forms of pollution or if cold temperatures rule out use of the fuel.
The House bill does not dictate a formula for reformulated gasoline but requires such gasoline to be offered in the nine cities with the worst air quality problems, and that it be capable of reducing pollutants 15% by 1995 and 25% by the year 2000.
INDUSTRY OPPOSITION
The American Petroleum Institute waged an intense fight against legislation dictating the gasoline content, saying "government gas" mandates would hamper industry's efforts to develop reformulated, improved fuels. It lost in both Houses.
Charles DiBona, API president, complained the House bill sets such stringent standards for reformulated gasoline no one in the petroleum industry knows whether these standards could be met.
He added that unless the House-Senate conference committee relaxes the requirements, it may not be possible for the industry to continue to meet the fuel needs of consumers.
API said the legislative gasoline formulas are aimed at vastly expanding the use of ethanol as an ingredient in gasoline.
"This may help ethanol producers," API said, "but this `government gas' has never been tested and could make it more difficult to reduce smog."
It said a 10% ethanol, 90% gasoline blended fuel would increase ozone forming potential by at least 6% and nitrogen oxide emissions by 4-8%. API said alcohol fuels evaporate faster than conventional gasoline and contain less energy per gallon than gasoline.
API pointed out the oil and auto industries are conducting a joint research program that is testing various reformulations of gasoline, searching for the cleanest combination of fuels and vehicles.
The National Petroleum Refiners Association questions whether the refinery construction industry has the capability to produce and install the new equipment refineries will need to meet news motor fuel standards.
It estimated the refining industry will have to spend more than $3.6 billion alone to meet the diesel desulfurization requirement.
AIR TOXICS
Refiners are affected by standards in both bills for major sources of air pollutants those that emit 10 tons/year of any hazardous pollutant or at least 25 tons/year of a combination of hazardous air pollutants.
Both bills exempt emissions from oil and gas drilling and producing wells, stipulating wells cannot be aggregated so that oil fields are defined as major sources even though the wells are closely spaced or are owned by the same company. The Senate bill includes pipeline compressor stations.
And the latter exempts production of stripper oil or natural gas from ambient air quality rules except in areas with severe pollution problems.
Senators ordered EPA to examine the human health risk of hydrogen sulfide emissions generated by oil and gas production and report its findings to Congress within 2 years.
Their bill directs the Labor Department to begin a program to prevent accidental releases of chemicals that pose a human health threat. Within 1 year Labor and EPA would have to issue a chemical process safety standard to protect employees from accidental releases of highly hazardous chemicals. The Senate bill would establish an independent Chemical Safety and Hazard Investigation Board similar to the National Transportation Safety Board.
The panel would investigate all chemical accidents and propose corrective steps to make chemical production, processing, and handling as safe as possible.
The House bill gives EPA responsibility for protecting employees against releases and creates an Accidental Release Investigation Board. It directs employers to develop written safety information, perform workplace hazard assessments, consult workers on chemical accident prevention plans, and establish prevention, mitigation, and emergency response systems.
The Senate bill orders EPA to propose within 1 year and issue within 2 years a list of at least 50 substances that might be suddenly released in concentrations that could harm human health. The House bill calls for a list of 100.
Both agree the list should include chlorine, anhydrous ammonia, methyl chloride, ethylene oxide, vinyl chloride, tetrachlorethylene, ammonia, hydrogen sulfide, and sulfur dioxide.
The House bill also requires EPA to study the use of hydrofluoric acid at refineries. If EPA finds an alternative chemical or process that provides net benefits, it would have to issue rules within 15 months requiring its use.
OFFSHORE EMISSIONS
Oil industry associations are not pleased with either the House or Senate bill's provisions regulating emissions from Outer Continental Shelf drilling and production platforms.
The House bill would transfer authority to regulate OCS emissions to EPA, except off Texas, Louisiana, Mississippi and Alabama. In all other areas, EPA would issue rules to control air pollution, and if the facilities are within 25 miles of the state boundary, the rules must be as stringent as onshore rules.
The Senate bill leaves regulation with the Interior Department, but Interior must issue rules limiting emissions off California that are as stringent as the state's onshore rules-and with the concurrence of EPA.
It requires Interior, in OCS areas adjacent to states other than California, to coordinate efforts with EPA on onshore and offshore regulations. Interior is required to make a 3 year study of emissions on the Gulf Coast to determine if they are affecting onshore areas that may fail to meet the national ambient air quality standards for ozone or nitrogen oxide.
Both bills would allow the rules to be waived for practicality or health and safety grounds, but offsetting emissions reductions would be required.
The Senate bill creates a fund to acquire or create emissions offsets to mitigate emissions from OCS activities. Offshore operators needing pollution offsets would pay fees into the fund, which would be used to buy or create emissions offsets.
Nicholas Bush, president of the Natural Gas Supply Association, called the OCS provisions-in particular the House provisions-"a disastrous course."
He said two thirds of the energy produced on the OCS is natural gas, and environmentalists should not tout the environmental benefits of burning natural gas while attempting to block its development at the same time.
OTHER PROVISIONS
In the Senate bill, in all ozone nonattainment areas, states could require a Stage II refueling vapor recovery system at gasoline stations that dispense more than 20,000 gal/month. The House bill sets the limit at 10,000 gal/month or 50,000 gal/month for certain independents.
The House bill also requires EPA to issue Standards for emissions from loading and unloading of tankers within 2 years.
The acid rain portion of the bill includes a number of provisions governing burning of oil and natural gas in electrical power plants. A number of exemptions encourage use of natural gas.
Refiners of less than 50,000 b/d are given an allowance until Dec. 31, 1999.
EPA is ordered to study options to reduce methane release to the atmosphere during processing, distribution, or other activities as part of the program to reduce tropospheric ozone formation and global climate change.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
