The U.S. oil and gas industry has received a signal of hope in environmental regulation. Carol Browner, administrator of the U.S. Environmental Protection Agency, says she's willing to study enforcement flexibility.
In a speech this month to the U.S. Chamber of Commerce, Browner said EPA will select four to six industrial sectors in which to study new approaches to regulation. The agency will look at all environmental laws and regulations that affect a single industry or type of facility and consider ways to balance regulatory goals with needs of affected businesses.
This change alone would help businesses, such as petroleum refiners and petrochemical makers, with operations subject to several environmental laws and sets of regulations. At present, a single process or piece of equipment can be defined and treated differently under different laws.
BETTER REGULATION, PERFORMANCE
But EPA's nod toward flexibility promises something even more important than a balancing of multiple regulations: better environmental regulation by government and performance by industry. Strict laws and regulations now in force often apply to the wrong things and require costly actions that produce little or no environmental benefit.
A 4 year study concluded last year by EPA and Amoco Oil Co. made this clear. The $2 3 million effort - funded 70% by Amoco nd 30% by EPA - examined air and water emissions of Amoco's 53,000 b/d Yorktown Va., refinery. It concluded that 97% of the emissions reductions required at the refinery could be achieved with alternatives to prescribed programs at 25% of current costs. Randall E. Davis, a Washington, D.C., partner of the law firm Jones, Day, Reavis & Pogue who represented Amoco in the Yorktown project, says present regulations cost the refinery an average of $2,400/ton of reduced emissions of volatile organic compounds and hazardous wastes. The study concluded that alternative methods could reduce emissions of these substances at a cost of $500/ton. The savings could occur, the study said, if a facility-wide release reduction target existed, if statutes and regulations didn't prescribe emission-reduction methods, and if facility operators could determine ways to meet the target.
Browner's announcement this month means she takes these findings seriously. But acknowledging the benefits of flexibility isn't the same as improving regulation. It remains to be seen whether more studies like the Yorktown project will change enforcement methods.
QUICK CHANGE NEEDED
And there are other considerations. If there is to be change, it must come about quickly. Important environmental laws, such as the Clean Water Act and Superfund, need reauthorization. Studying flexibility won't help if industry gets hit with costly new or extended rigidities in the meantime. Also, a turn toward flexibility at the top of EPA must extend all the way down the hierarchy to inspectors and regulators in the field. And industries chosen for the studies, which probably will include the hydrocarbon processing businesses, must welcome environmentalists to the process.
The goal must be improved environmental regulation, not just lower costs for regulated businesses. Industry should have no trouble with that. Likewise, environmentalists should not want businesses to waste money complying with regulations that do no environmental good. Browner's studies by themselves won't ease the oil and gas industry's regulatory pressures. But they turn the government toward a new regulatory approach that the economy and environment both desperately need.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
