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FEATURE: Refiners get reprieve on carbon regs — but not for long
Washington (Platts)–17Sep2012/1214 pm EDT/1614 GMT
With the presidential race in full swing and gasoline prices still topping $4 per gallon in parts of the US, the Obama administration has delayed issuing greenhouse-gas regulations for oil refineries this year despite a court settlement with states and environmental groups that requires those rules to be finalized by November. Still, the advocacy groups insist — and the refining industry acknowledges — that the Environmental Protection Agency will come under tremendous pressure to issue those rules sometime next year, regardless of who occupies the White House. EPA, which declined to comment for this story, has not said what level of GHG cuts, if any, it will require for oil refineries. But the American Fuel and Petrochemical Manufacturers, a Washington-based refineries trade group, said even relatively small reductions would present a major hardship.
Unlike coal-fired electric utilities, which can switch to cleaner-burning natural gas to meet EPA’s forthcoming carbon standards for power plants, fuel switching is not a realistic option for the refining sector, as many refineries already use gas to run their crackers, heaters and other specialized equipment. According to EPA, the approximately 150 US refineries emit 183 million metric tons of carbon dioxide annually, or 6% of all industrial GHG emissions. Diana Cronan, a spokeswoman for the refiners’ group, said there is no GHG control technology that exists for oil refineries. To meet any required GHG emissions curbs, the industry would have to invest in energy-efficiency upgrades, she said. “But, with oil around $100/barrel, and the industry already extremely efficient, much of the low-hanging fruit is already gone, and those options are limited,” Cronan said. Environmental groups, however, dismissed those concerns. John Coequyt, a climate and energy lobbyist with Sierra Club, said he expects the forthcoming refinery standards to mandate “mostly cost-effective efforts to reduce methane leaks and maximize energy efficiency.” “We fully expect that the first-ever standards for refineries will make important strides in reducing carbon pollution at minimal cost to the industry,” Coequyt said.
This article was previously published in the June 28, 2012 edition of the New York Law Journal Â© 2012 ALM media Properties, LLC.
Power plants are the largest emitters of greenhouse gases (GHGs) in the nation, emitting approximately 40 percent of all U.S. anthropogenic carbon dioxide (CO2) emissions. In recognition of the power sector’s contribution to GHGs, and armed with the U.S. Supreme Court’s 2007 ruling that GHGs meet the definition of an “air pollutant” under the Clean Air Act (CAA),1 the U.S. Environmental Protection Agency (EPA) issued a proposed rule on March 27, 2012, limiting, for the first time, GHGs from new fossil fuel-fired power plants.2 The New York State Department of Environmental Conservation (DEC) has proposed a similar rule as it relates to the siting of new power plants in New York State.3 Most notable about these two proposals is the apparent adoption of policy positions by both agencies that will essentially restrict the construction of new power plants that burn coal.
Proposed Federal Regulation
Pursuant to CAA Section 111, the EPA has proposed establishing a New Source Performance Standard that would require new fossil fuel-burning power plants to emit no more than 1,000 pounds of CO2 gas for every one megawatt hour of power they generate (“1,000 lb CO2/MWh”). For new coal plants, the proposed rule also includes a 30-year averaging option, which would allow coal plants to phase in emerging and expensive carbon capture and storage (CCS) technology to reduce emissions over time, resulting in the same 1,000 lb CO2/MWh standard, but averaged over 30 years.
While most new power plants would be covered by the rule, “transitional sources,” which are those power plants that have already received preconstruction permits and are “poised to commence construction within the very near future” (i.e., within 12 months of the proposed rule), are exempt. The EPA is aware of 15 such transitional sources.
The most controversial aspect of the proposed rule is that it establishes the emissions of a modern natural gas plant as the performance benchmark for all future fossil fuel plants. The 1,000 lb CO2/MWh standard is based on the typical emissions of natural gas combined-cycle power plants, which the EPA says meets the relevant CAA standard of performance of the “best system of emission reduction” that has been “adequately demonstrated.”4 By contrast, coal burning power plants emit twice as much CO2 per unit of energy as combined-cycle natural gas plants.
In order to meet the new standard, coal plants would have to install CCS. Although there are various CCS pilot projects in the United States and around the world, CCS remains prohibitively expensive and has not been installed on a commercial basis on any power plant. Depending on whom you ask, commercial CCS is either right around the corner, or decades away due to technological, economic, and legal obstacles. In response to the proposed rule, coal industry groups say that the 30-year compliance option is “sleight of hand,” because no reasonable utility would commit to build a new plant and hope that CCS would become feasible in the future.5 Coal industry groups also assert that if CCS becomes commercially feasible, there is no reason not to apply it to natural gas plants as well to reduce emissions.6
The EPA asserts that CCS is technologically feasible, its costs will decline, the few coal plants that are constructed can take advantage of existing government subsidies and other funding sources, and several states have already set standards that will make CCS necessary.7 Regarding technological feasibility, the EPA wrote that “there are no insurmountable technological, legal, institutional, regulatory or other barriers that prevent CCS from playing a role in reducing GHG emissions.”8
On the cost of CCS, the EPA states that current research will “dramatically lower the cost of capturing CO2 from fossil-fuel energy plants compared to today’s available capture technologies.”9 While the government estimates that the CCS technology available today would add approximately 80 percent to the cost of electricity for a pulverized coal plant and 35 percent for an advanced gasification-based coal plant, Department of Energy research is working to reduce those premiums to below 30 and 10 percent, respectively.10
In light of the divergent views about the readiness of CCS technology and as a reflection of the lack of political consensus on climate change in the federal government, 216 members of Congress wrote a letter opposed to the rules to the Office of Management and Budget, stating that “[f]orcing a transition to commercially unproven technologies could send thousands of U.S. jobs overseas and raise electricity rates on families and seniors at a time when the nation can least afford it.”11 In addition, the regulatory uncertainty surrounding CO2 had occasionally become a hindrance to the development of CCS technology.
Full Article Available At: Power Engineering
Fri Jul 27, 2012 2:30am EDT
LONDON, July 27, 2012 – Stolt-Nielsen Limited (Oslo Børs: SNI) announced today that it reached an agreement to acquire a bulk-liquid storage terminal at Dagenham, Port of London, UK, from Norbert Dentressangle SA. The completion of the acquisition is subject to the transfer of licenses and permits, and the receipt of necessary approvals to operate the facility. The transaction is expected to close during the Company’s fourth quarter of 2012. Further terms were not disclosed.
The terminal occupies 9.4 hectares and consists of 195 tanks with a total capacity of 134,000 cbm and a jetty with a draft of 9.3 meters. In addition to bulk-liquid storage, services include warehousing, drumming and bulk container filling, laboratory services, blending, dilution and product heating. The facility has immediate access to the UK’s national highway system.
Commenting on the acquisition, Mr. Walter E. Wattenbergh, President of Stolthaven Terminals, said: “This terminal-our first in the UK-joins Stolthaven’s growing global network of bulk-liquid storage facilities. The Dagenham terminal gives us a foothold in the UK market and will provide added support to the Stolt Tankers’ inter-European coastal fleet. Our initial plans include an immediate upgrade program, with the decommissioning of several old tanks and the construction of new tanks.”
Original Article Available From: Reuters
OSHA has cited Bushnell Illinois Tank Company, which operates as Schuld/Bushnell in Valley, Nebraska with eight safety and health violations based on a follow up inspection for hazards associated with workers who enter and work in permit required confined spaces. Proposed penalties total $116,270, according to a release Wednesday from the U S Department of Labor’s Occupational Safety and Health Administration. Bushnell Illinois Tank is located in Bushnell, Illinois and manufactures tanks for agriculture and commercial applications such as grain and feed storage. OSHA initiated the follow up inspection at Schuld/Bushnell in January of this year to determine if hazardous conditions continued to exist after a January 2011 inspection resulted in citations of OSHA’s permit required confined space standard. A willful violation, OSHA says, has been cited for the presence of hazards without an employer permit required confined space program. Workers entered the tanks to weld the bottom to the cylinder, attach ladders and aeration fans and apply sealant in the finishing area. OSHA alleges four repeat violations involve failing to provide a permit required confined space hazard evaluation prior to employee entry, provide appropriate equipment for making permit required confined space entries, test and monitor permit required confined space conditions prior to entry and train workers on entering permit require confined spaces. These violations, OSHA says, previously were cited during the 2011 inspection. The company has 15 business days from receipt of the citations and penalties to comply, request an informal conference with OSHA’s area director in Omaha, or contest the findings before the independent Occupational Safety and Health Review Commission.
Full Article At: CIProud.com