Refiners Get Reprieve on Carbon Regs

Refinery and Chemical Processing

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.