Sunoco Inc.'s Philadelphia Refinery stands on the banks of the Schuylkill River in Philadelphia on Feb. 12, 2009. Photographer: Mike Mergen/Bloomberg News
By Jim Efstathiou Jr.
http://www.bloomberg.com/apps/news?pid=20601072&sid=aRHl__xeTUHk
July 2 (Bloomberg) -- President Barack Obama is considering new curbs on U.S. oil refineries whose gas emissions pose a cancer risk to hundreds of thousands of people living near the plants, setting up a potential conflict with companies over the cost of new regulations.
The White House suspended a ruling signed by President George W. Bush four days before he left office that found refiners were adequately controlling benzene and other cancer- causing gases, said Cathy Milbourn, a spokeswoman at the U.S. Environmental Protection Agency.
The decision may lead to regulations requiring some of the 156 refineries in the U.S. to add or upgrade equipment or limit the burning of waste gases, the environmental group Natural Resources Defense Council said. New restrictions might prompt a lawsuit by refiners, which have spent about $100 billion in almost two decades to lower pollution, according to an industry group.
"We're going to take whatever action we think is necessary if we think the rule isn't justified," said John Wagner, senior attorney for the American Petroleum Institute, based in Washington. Oil companies were already warning of plant closings after the House last week approved the first U.S. regulation of global warming gases.
John Walke, clean-air director for the New York-based Natural Resources Defense Council, said he was encouraged by the Obama administration's decision to suspend the Bush ruling.
"I read into their action a willingness to consider and to adopt more protective practices," Walke said "Otherwise, they could have simply and quietly published the Bush administration rule."
'Premature' Ruling
A White House spokesman, Ben LaBolt, referred questions on refinery emissions to the EPA, where Milbourn said the gas ruling by Bush had been "premature."
While U.S. law doesn't cap toxic emissions from refineries, which convert crude oil into gasoline and diesel fuel, it does require plants to match what the best refiners are achieving at reducing hazardous pollution. Thirteen of the 20 largest refineries are in Texas and Louisiana, according to the U.S. Energy Department.
Standards were last set in 1995. If Obama finds those measures insufficient, the government may take six to nine months to propose new requirements and a similar amount of time after that to adopt them, Walke said.
Valero, Exxon
Valero Energy Corp., Exxon Mobil Corp. and other oil companies together spent $100 billion from 1990 to 2007, and $8.3 billion in 2008, to cut pollution at refineries, according to the American Petroleum Institute. Further regulation may increase refiners' costs and raise the gasoline prices paid by consumers, according to the lobbying group.
Fumes from refineries, factories and utilities account for about a quarter of man-made emissions in the U.S. that are potentially hazardous to human health, the EPA has said. While it's impossible to estimate the potential cost of new rules the agency may propose, additional pollution controls will add to the cost of making gasoline, said Howard Feldman, the API's director of regulatory and scientific affairs.
"It's hard to attribute any final retail price to any specific control but it certainly does impact the cost of manufacturing, which ultimately will impact the cost of fuel," Feldman said in an interview.
Limits on carbon dioxide emissions blamed for global warming were adopted by the House on June 26 in a 219-212 vote. ConocoPhillips Chief Executive Officer Jim Mulva said the legislation may lead to the "potential shutdown of refineries and investment and, ultimately, employment."
Clean Air Act
Irving, Texas-based Exxon Mobil, owner of the largest U.S. refinery, in Baytown, Texas, increased profit to a record $45.2 billion last year. San Antonio-based Valero, the biggest U.S. refiner, reported a net loss of $1.13 billion for 2008.
The pollution controls put in place during the last 14 years were required by Congress under the Clean Air Act and its 1990 amendments. The EPA, under Bush appointee Stephen Johnson, conducted the first review of how well those measures were protecting the public from exposure to hazardous gases.
The agency found that under controls already in place, about 460,000 people in the U.S. were exposed to an added risk of getting cancer of 1 to 30 in a million because of refinery emissions. The EPA deemed those odds "acceptable."
For the U.S population, the lifetime risk of getting any type of cancer is about 40 percent, according to the National Cancer Institute.
Walke's View
The NRDC's Walke, a former attorney in the EPA's clean air division, said Bush's ruling failed to consider the effect of aggregate emissions from neighboring refineries or to account for fumes from all equipment. The risk of getting cancer from refinery pollution should be lowered to 1 in a million, he said.
Getting there takes spending, as "the lower the exposure gets, the more it costs to reduce it further," said Michael Thun, vice president emeritus for epidemiology and surveillance at the Atlanta-based American Cancer Society, which provides information on cancer research.
Benzene from turning crude oil into gasoline can cause leukemia, said Philip Landrigan, head of community and preventive medicine at the Mount Sinai School of Medicine in New York.
"This is not a situation where we talk in probabilities and possibilities," Landrigan said in an interview. "Studies show excess rates of leukemia and related blood cancers in people, especially children, who live in communities adjacent to these refineries."
Leukemia Link
Children under 20 living near the Houston Ship Channel in southeast Texas, an area with elevated levels of benzene from refineries, showed "significantly" higher than normal rates of leukemia, according to a 2008 study from the University of Texas School of Public Health, in Houston.
One day after taking office, White House Chief of Staff Rahm Emanuel moved to block the Bush ruling, which hadn't taken effect, so the Obama administration could review it. Later the EPA said it would withdraw the refinery ruling "in order to reconsider" it, according to Milbourn.
The ruling, signed by Bush January 16, grades the effectiveness of pollution controls adopted by the EPA in 1995. The EPA under Bush found the maximum risk of getting cancer -- for someone living for 70 years within about 30 miles of the highest-polluting refinery -- to be 30 in a million. The agency didn't name which plants were most polluting in the finding.
'Right' Conclusion
"We worked hard with the agency to give them information going into that risk determination," Wagner said. "At that time, they didn't find any residual risk. We thought that conclusion was right."
From 1988 to 2007, hazardous emissions from making gasoline, diesel fuel and other products fell 65 percent, Feldman said. In 2005, refineries emitted 10,560 tons of toxic gases, according to the EPA's latest National Emissions Inventory. Utilities released 408,650 tons.
Since 1990, "emissions have gone down dramatically," Bill Day, a spokesman for Valero, said in an interview. Day referred questions on the EPA rule to the American Petroleum Institute, as did Kristen Hellmer, a spokeswoman for Exxon Mobil.
The industry can do better, according to Monique Harden, an attorney for Advocates for Environmental Human Rights, a group based in New Orleans that helps communities push for environmental regulation. Some of the same companies operate refineries in Europe with lower emissions than at their sites in the U.S., she said.
Mossville Project
"We really need this Obama EPA to pay close attention to innovative technologies that are used by the same companies in refineries in Europe," Harden said.
Harden has worked with citizens in Mossville, Louisiana, who asked Houston-based ConocoPhillips to reduce pollution at its refinery in Lake Charles, Louisiana. The plant is one of 14 factories around Mossville, a community of about 300 families in Calcasieu Parish.
Shirley Johnson, a member of Mossville Environmental Action Now, a group pushing for lower refinery emissions, confronted ConocoPhillips CEO Mulva at the company's annual meeting on May 13. He promised to visit Mossville within two months.
"What's in the people's bodies is the same thing that's emitted from the refineries," said Johnson, 71, who has lived in Mossville for 11 years. "We're struggling here."
Bill Stephens, a spokesman for the company, defended the existing regulation, saying in an e-mail that it was "very successful at reducing refinery emissions."
ConocoPhillips plans to schedule the visit to Mossville, Stephens said.
