REFINERS MAY MEET CAA REQUIREMENTS IF ...

A preliminary National Petroleum Council survey says U.S. refiners may be able to meet most of last year's Clean Air Act amendments' requirements for cleaner fuels-if the Environmental Protection Agency cooperates. The study said refiners think the requirements will result in substantial additional refinery investment, many technical risks, and poor cost effectiveness.
June 10, 1991
3 min read

A preliminary National Petroleum Council survey says U.S. refiners may be able to meet most of last year's Clean Air Act amendments' requirements for cleaner fuels-if the Environmental Protection Agency cooperates.

The study said refiners think the requirements will result in substantial additional refinery investment, many technical risks, and poor cost effectiveness.

It said, "Many refiners foresee the uncertainty's impact on supply and demand contributing to unfavorable industry conditions, thus magnifying the compliance challenge and leaving little margin for error in their decision making.

"Refiners are anxious for a long range assessment of environmental benefits relating to costs and reflection of such assessment in future legislation and regulation."

CHALLENGE IN 1992

Refiners think requirements for oxygenate production in 1992 represent the most severe challenge.

"Virtually all companies expect some form of waivers to be required for the winter of 1992-93, primarily owing to physical obstacles, limited time to comply, and regulatory uncertainty."

Moving MTBE produced on the Gulf Coast and ethanol produced in the Midwest to large consuming centers on the East and West coasts may be an insurmountable logistic challenge, especially for the winter of 1992-93.

"The limited time to comply limits severely the industry's ability to build new oxygenate production, storage, and transportation facilities and constrains the purchase of oxygenates for storage until required."

It said most companies see 15-50% shortfalls for oxygenates for fuel available for industry in the 1992-93 winter.

It recommended that EPA issue waivers by fall 1992 to balance demand with the expected supply for oxygenates in carbon monoxide nonattainment areas for the winter of 1992-93, which it said would go a long way in averting trouble.

"SIMPLE" REFORMULATED FUEL

The study said refiners think "simple" reformulated gasoline certification requirements and monitoring/compliance programs are required if industry is to meet the 1995 deadline for the fuel.

"if EPA imposes impractical certification requirements for reformulated gasoline, the industry may not be able to comply.

"A certification requirement based on a simple, straightforward emissions model with fuel compliance determined at the point of manufacture or blend would impose the least interference on historical supply, demand, and logistics.

"Compliance averaging should be on a pool basis, averaged over a given nonattainment area or group of nonattainment areas, and cover a significant period of time to cover supply disruptions and planned or emergency shutdowns."

It said the goal should be a 15% volatile organic compound reduction, starting from 8.7 psi Reid vapor pressure summer gasoline.

In contrast to some of the other fuels requirements, most industry participants expect to meet the 1993 onhighway diesel fuel desulfurization specifications without further regulatory actions.

But refiners and engineering and construction contractors expressed concern about getting timely permits for required plant modifications or new construction.

Thousands of permits will be required related to reformulated gasoline and diesel fuel desulfurization projects for compliance. A surge of applications could overwhelm agencies and delay projects, the study warned.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.

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