GHG regulations threaten US refining, witnesses tell EPA

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Mar. 4 -- US Environmental Protection Agency regulation of refineries’ greenhouse gas (GHG) emissions could drive many US refiners out of business by placing them at a significant disadvantage to foreign gasoline, diesel fuel, and jet fuel suppliers, National Petrochemical & Refiners Association Pres. Charles T. Drevna said on Mar. 4.

“Our nation’s petroleum refineries remain one of the last internationally competitive segments of the American manufacturing base,” he said in a letter to Gina McCarthy, EPA’s assistant administrator for air and radiation, which NPRA submitted to accompany its oral testimony at the agency’s listening session on its effort to implement GHG regulations under the Clean Air Act. EPA has said that it formulated the regulations in response to a 2007 US Supreme Court decision saying that it had the authority and obligation to do so.

US refiners process 95% of the gasoline, diesel, jet fuel, heating oil, and lubricants which are used domestically, Drevna continued. “There is no guarantee that the US domestic refining manufacturing base will continue to be in existence two or three decades from now,” he said. “Our members’…plants could well go the way of many domestic auto plants, virtually all of our domestic textile miles, and many domestic steel plants.”

In his testimony, Howard J. Feldman, the American Petroleum Institute’s regulatory and scientific affairs director, said API also opposes EPA’s GHG regulatory effort, but backs completion of its new source performance standards under the Subpart Ja rulemaking relative to flares.

Refiners already have strong incentives to be more efficient because energy is their second largest cost, less efficient plants have closed as the number of US refineries has dropped by 50% in recent decades, and refiners already have installed cogeneration where appropriate, he noted. “The refining industry already faces a blizzard of EPA regulations that threaten US operations and jobs,” Feldman said. “We’re not sure where this and other regulations fit into [US President Barack Obama’s] regulatory review directive.”

“NPRA is convinced that many legislators on Capitol Hill and a large majority of the American people want this country to grow its domestic manufacturing base, not shrink it,” Drevna’s letter concluded. “They want to create and preserve American jobs, not export them to other countries. And they want affordable, reliable, domestically produced transportation fuels, not energy pipe dreams and a supply of transportation fuels subject to the political whims of foreign companies and governments that may or may not share America’s interests.”

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