Business Roundtable

Refineries are energy intensive and heavily exposed to international competition, thus requiring special consideration regarding the costs and burdens that will be imposed on this sector.  In addition, the complexities of petroleum refineries and the diversity among refineries demand flexible GHG NSPS that will accommodate site-specific circumstances and permit different cost-effective options for GHG emissions reductions.

Such a flexible and common-sense approach, moreover, will help to ensure that GHG NSPS for refineries will not undermine the development and production of cleaner burning gasoline to reduce GHG emissions in motor vehicles.  If cleaner burning gasoline requires refineries to adopt industrial processes that emit more GHGs, then EPA should not impose requirements that would preclude those processes.

C. No commercially available technologies exist to control GHGs from fossil fuel based EGUs or petroleum refineries.  In addition, EPA cannot mandate a specific technology to control GHGs.

The development of commercially available technologies to control GHG emissions from EGUs will require the resolution of significant technical, economic and regulatory issues.  Some carbon dioxide (CO2) control technologies, e.g., carbon capture and storage, are still on the drawing boards and are not expected to become commercially available until 2020-2025, if then.  EPA cannot mandate CO2 control technologies that are undeveloped, unproven and uneconomical.

Section 111 of the CAA requires that a standard of performance must be based on an “adequately demonstrated” system of emission reductions.  This “best demonstrated technology” standard is quite different from the Best Available Control Technology or the Maximum Achievable Control Technology standards contained elsewhere in the CAA.  In the absence of commercially available technologies to control GHG emissions, there are no “adequately demonstrated” technologies.

Section 111, moreover, is not a technology-forcing standard.  With a limited exception, nothing in the statute “shall be construed to require, or to authorize [EPA] to require . . . any particular technological system of continuous emission reduction . . . .”  Thus EPA cannot mandate specific technologies to control GHGs.

D. EPA also is not authorized under the CAA to mandate a specific fuel type or feedstock.

Section 111 does not authorize EPA to set NSPS for EGUs that require one particular type of fossil fuel to be burned, e.g., natural gas.  The statute requires NSPS for each “category” of stationary sources listed by EPA under Section 111.  The categories listed by EPA include (under 40 C.F.R. Part 60, Subpart Da) EGUs, which by definition combust more than 250 MMBtu/hr heat input “of fossil fuel (either alone or in combination with any other fuel.”  Fossil fuel by definition includes coal, natural gas, or petroleum.  Thus NSPS for EGUs must be applicable to EGUs that burn coal or petroleum as well as natural gas.

Similarly, the statute does not authorize EPA to dictate feedstocks for petroleum refineries.  Different feedstocks, e.g., different types of crude oil, may be refined into gasoline, but the industrial process to refine heavier oils, for example, may require more energy, and emit more GHGs, than the process to refine light crude oil.  GHG NSPS for refineries, however, cannot mandate particular feedstocks for gasoline in order to minimize GHG emissions.  Further, mandating specific feedstocks could lead to crude oil supply shuffling and market disruptions without any global GHG benefits.

E. Any industry or sector "performance standards" established by EPA should recognize different types of fuels, boilers, process heaters, other fossil fuel containing equipment and facility configurations.

The diversity among EGUs and, in particular, petroleum refineries precludes the promulgation of workable NSPS that would apply across the board to all EGUs or to all refineries.  EPA should follow its historic practice of recognizing subcategories when establishing GHG performance standards, and identify subsystems and particular emission units that can adopt readily available energy efficient designs to reduce emissions.

Petroleum refineries, for example, are complex and unique in their design, processes, and types of fuel, feedstocks, and products.  Thus GHG emissions reductions cannot be achieved under a one-size-fits-all standard.  Here, these reductions require case-by-case assessments at refineries to determine the most cost-effective approach to reduce GHG emissions.  Refineries also are unique in their business models, with differing sizes, ownership structures, product lines and customer bases.  This additional diversity, which affects the resources available for compliance with GHG NSPS, further complicates the promulgation of workable NSPS that would apply to all refineries.

F. Work practices, maintenance practices and cost-effective equipment upgrades can be used to establish achievable, cost-effective energy efficiency improvement standards.

Reductions in GHG emissions from EGUs can be achieved through increases in energy efficiency.  Such increases would permit the same level of electric power to be generated with less fossil fuel, which means reduced GHG emissions.  Achievable and cost effective increases in EGU energy efficiency, through improved work practices, improved maintenance practices, and equipment upgrades, provide a flexible and common-sense alternative to EPA-mandated technologies to control GHG emissions or an EPA-mandated fuel type.

Increases in EGU energy efficiency also can be achieved through reductions in parasitic losses.  EGUs consume a portion of the electric power they generate to operate auxiliary equipment, e.g., pumps and fans.  Parasitic losses can consume up to 6% of the output of an EGU.  Those losses could increase if additional emissions control equipment is required to be installed in the next few years.  Such equipment, therefore, simply increases GHG emissions.

Petroleum refineries also can achieve reductions in GHG emissions through increases in energy efficiency and have an established record of voluntary efficiency improvements.  U.S. refineries have remained competitive in the face of stiff overseas competition in large part because they have reduced their operational costs through increases in energy efficiency.

G. NSR is a problem with equipment upgrades to increase unit efficiency.  EPA should clearly state that equipment upgrades to increase unit efficiency in order to address GHG emissions will not trigger NSR. 

There is a Catch-22 associated with equipment upgrades intended to increase energy efficiency (and thus reduce GHG emissions).  EPA may deem the upgrades to be major modifications that require new source review.  Such review discourages the upgrades.  To promote equipment upgrades designed to increase EGU energy efficiency and reduce GHG emissions, EPA thus should state that such equipment upgrades will not trigger new source review.

The Roundtable appreciates this opportunity to comment and the consideration that EPA gives to its views.

Sincerely,