Oil refiners under scrutiny

Companies say they are taking measures to improve safety, standards
2010-04-10T23:55:00Z Oil refiners under scrutinyDUSTIN BLEIZEFFER Casper Star-Tribune The Billings Gazette
April 10, 2010 11:55 pm  • 

CASPER — If you’ve lived next to a refinery in Wyoming in the past 10 years, then you may have had residual oil rain down on your home, car and head.

Or you might have been caught in a rain of brownish silica catalyst, or been overwhelmed by a rotten-egg smell for days, or seen dramatic flares of toxic emissions streaming off the smokestacks like giant orange banners.

On March 30, a cloud of smoke from one of these flares raced over neighborhoods in Newcastle.

“I was getting family members out of the line of the smoke because who knows what’s in the smoke,” Newcastle resident Diane Baird Hudson said.

Fires, spills

During the past year, the Sinclair Refinery near Rawlins had a major fire and at least 14 reportable releases and spills, including one incident in which 3 million gallons of a highly flammable gasoline-grade fuel spewed from a tank and breached secondary containment structures.

“These are not in-the-middle-of-nowhere refineries. These are right in communities. We need to take a harder look at how we protect public health in the state,” said Shannon Anderson of the Powder River Basin Resource Council.

State regulators say the industry’s recent performance has captured their attention. The Wyoming Department of Environmental Quality is seeking $660,000 from Sinclair for violations related to its fuel spill of 3 million gallons in May 2009.

Thorough inspections

“With Sinclair, we have made more frequent inspections and more thorough inspections as well. And on (violations), we have stepped up the penalties via settlement agreement,” said DEQ spokesman Keith Guille.

Federal regulators are interested, too.

In September, the U.S. Environmental Protection Agency levied a $7 million fine against Frontier Oil Corp.’s Cheyenne refinery for allegedly dumping toxic wastes into a storm water pond. Refinery officials said they would fight the fine.

Also in 2009, Wyoming Refining Co. signed a cooperative agreement with EPA settling alleged violations related to “past performance” at its refinery in Newcastle. The refiner agreed to pay $14 million for new pollution control equipment and pay an “assessment” of $150,000 under the cooperative agreement.

Many of the recent toxic releases from Wyoming oil refineries were due to flaring — or burning — a mixture of gases emitting toxins, such as sulfur dioxide and nitrogen dioxide. Those in the industry say flaring gases is a common safety procedure because the gases would otherwise pose an explosion and asphyxiation hazard.

Refiners say they must flare gases upon restarting certain operations after there has been a malfunction or, most commonly, after there’s a power outage. None of the refineries have enough backup generation to support 100 percent of their needs when there’s a power outage.

An external power outage wreaked havoc on operations at the Sinclair refinery in December, then lingering cold temperatures complicated processes at the refinery for weeks.

As for the pollutants released during these restart flaring events, there is no penalty and no limit to how much pollution can be released, according to DEQ. The flaring events don’t even count toward a refinery’s annual allowable emissions limit for particular constituents.

“It’s recognized that those events will occur. There’s going to be a buildup of gas that they have to do something with, and it’s recognized that flaring is the better option,” said Bob Gill, compliance program manager for DEQ’s Air Quality Division.

But others say that view is in direct opposition to federal regulations. Andrea Issod, staff attorney for the Sierra Club’s Environmental Law Program, said the EPA objected to an operating permit for a BP refinery in Whiting, Ind., due in part because the state-issued permit did not count emissions from flares.

“The law is for best available control technology. So this needs to be done on the front end before ever issuing a permit,” Issod said.

Issod argued the Sierra Club’s case against an emissions permit for DKRW Advanced Fuel’s proposed coal-to-gasoline plant to be built near Medicine Bow. Even in this case in which state regulators had the chance to scrutinize emissions controls pre-construction, Wyoming DEQ still declined to count flare emissions.

“The whole idea behind pre-construction permitting is to figure out the best available control technology so you don’t have these emissions in the first place,” Issod said.

Refinery efforts

Sinclair Refinery is working with Rocky Mountain Power to increase its access to the grid to provide added electrical reliability. It is also making several expensive upgrades, including new boilers equipped with nitrogen dioxide abatement technology to minimize the need to flare gases.

These investments are in addition to upgrades to meet federally mandated emission reductions for transportation fuels and refinery emission.

“Both of Sinclair’s refineries in Wyoming have either implemented or are implementing redundant backup power systems for steam and electric power supplies,” the company said in a prepared statement. “Sinclair continues to make major investments at its Wyoming refineries in Casper and Sinclair.”

Bob Neufeld, vice president of environmental and government relations for Wyoming Refining Co., said his company is spending about $23 million over a four- to five-year period to make several upgrades, all of them to improve safety and environmental standards.

The pending improvements at the Newcastle refinery include:

• Relocating the control room from the middle of the refinery area away from potential blasts and fires.

• Cutting sulfur dioxide emissions from the refinery’s baseline 2000-2001 level of 899 tons to 111 tons — a reduction of 88 percent.

• Cutting nitrogen oxide emissions from the refinery’s baseline 2000-2001 level of 140 tons to 120 tons — a 14 percent reduction.

• Cutting particulate matter emissions from the refinery’s baseline 2000-2001 level of 44 tons to 18 tons — a reduction of 59 percent.

“There’s nothing there to expand processing or increase our sales or reduce our operating costs or in any way improve our bottom line. Just safety and environmental purposes only,” Neufeld said.

Neufeld said it’s true that more stringent regulations and the economic downturn have shrunk financial margins in the industry. But that doesn’t mean refiners are cutting corners.

“We are not doing nearly as well as we did two or three years ago. But we are still in acceptable operating basis,” said Neufeld, adding that Wyoming Refining Co. is privately held. “We are maintaining our operations budget.”

Contact Dustin Bleizeffer at

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