[Federal Register: January 2, 2008 (Volume 73, Number 1)]
[Rules and Regulations]
[Page 57-72]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ja08-14]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 260 and 261
[EPA-HQ-RCRA-2002-0002: FRL-8511-5]
RIN 2050-AE78
Regulation of Oil-Bearing Hazardous Secondary Materials From the
Petroleum Refining Industry Processed in a Gasification System To
Produce Synthesis Gas
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is revising its
hazardous waste management regulations under the Resource Conservation
and Recovery Act (RCRA) to further promote the environmentally sound
recycling of oil-bearing hazardous secondary materials generated by the
petroleum refining industry. Specifically, EPA is amending an existing
exclusion from the definition of solid waste for oil-bearing hazardous
secondary materials when they are processed in a gasification system at
a petroleum refinery for the production of synthesis gas. We are
finalizing this exclusion so that the gasification of these materials
will have the same regulatory status (they are all excluded from the
definition of solid waste under RCRA) as oil-bearing hazardous
secondary materials that are reinserted into the petroleum refining
process. This action serves what we believe is a national interest by
capturing as much energy from a barrel of oil as possible to maximize
production efficiencies at petroleum refineries in an energy
constrained world.
DATES: This final rule is effective on February 1, 2008.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-RCRA-2002-0002. All documents in the docket are listed on
the http://www.regulations.gov web site. Although listed in the index,
some information is not publicly available, because, for example, it
may be Confidential Business Information (CBI) or other information,
the disclosure of which is restricted by statute. Certain material,
such as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through http://www.regulations.gov
or in hard copy at the RCRA Docket, EPA/DC, EPA
West, Room 3334, 1301 Constitution Avenue, NW., Washington, DC. This
Docket Facility is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the RCRA
docket is (202) 566-0270.
FOR FURTHER INFORMATION CONTACT: Elaine Eby, Waste Minimization Branch,
Hazardous Waste Minimization and Management Division, Office of Solid
Waste (5302P), Environmental Protection Agency, 1200 Pennsylvania Ave.,
NW., Washington, DC 20460; telephone number: (703) 308-8449, fax
number: (703) 308-8433, e-mail address: eby.elaine@epa.gov.
SUPPLEMENTARY INFORMATION:
A. Does This Action Apply to Me?
This rule may apply to entities regulated under RCRA, in the
petroleum refining industry, identified as Standard Industrial
Classification (SIC) 2911. To determine whether your facility, company,
or business is affected by this action, you should carefully examine 40
CFR Parts 260 through 271. If you have questions regarding the
applicability of this action to a particular entity, consult the person
listed in the preceding ``FOR FURTHER INFORMATION CONTACT'' section.
B. Table of Contents
I. Statutory Authority.
II. Summary of This Action.
III. Background.
IV. Development of This Final Rule.
A. How Many Gasification Systems Are Currently Operating at
Petroleum Refineries?
B. What Conclusions Have We Drawn About Gasification Systems
Operating at Petroleum Refineries?
V. This Final Rule.
A. Does the Conditional Exclusion Include a Definition for a
Gasification System Used at a Petroleum Refinery?
B. Does the Conditional Exclusion Include a Synthesis Gas
Specification?
C. Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Material From Being Placed on the Land
[[Page 58]]
Prior to Insertion in the Gasification System?
D. Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Materials From Being Speculatively Accumulated Prior to
Insertion in the Gasification System?
E. Does the Conditional Exclusion Regulate Certain Metals in
Residuals Generated from the Gasification Process?
F. Does the Conditional Exclusion Require Additional
Recordkeeping and Reporting Requirements?
VI. What Will the Effect of the Final Rule Be on Recycling and
Energy Recovery?
VII. How Will These Regulatory Changes Be Administered and Enforced
in the States?
VIII. What Are the Costs and Benefits of the Final Rule?
IX. Statutory and Executive Order Reviews.
A. Executive Order 12866: Regulatory Planning and Review.
B. Paperwork Reduction Act.
C. Regulatory Flexibility Act.
D. Unfunded Mandates Reform Act.
E. Executive Order 13132: Federalism.
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments.
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks.
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use.
I. National Technology Transfer and Advancement Act of 1995.
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations.
K. Congressional Review Act.
I. Statutory Authority
The U.S. Environmental Protection Agency (EPA or the Agency)
regulates the generation and management of hazardous waste under 40 CFR
Parts 260 through 273 using the authority of the Resource Conservation
and Recovery Act of 1976 (RCRA), as amended, 42 U.S.C. 6901 et seq.
II. Summary of This Action
EPA is amending an existing exclusion from the definition of solid
waste that applies to oil-bearing hazardous secondary materials
generated at a petroleum refinery when these materials are recycled by
inserting them back into the petroleum refining process. This exclusion
is found at 40 CFR 261.4(a)(12)(i) and applies to oil-bearing hazardous
secondary materials that are hazardous because they are listed in 40
CFR Part 261, Subpart D (e.g., K048-K052, K169-K170, and F037-F038), or
because they exhibit a hazardous characteristic under Part 261, Subpart
C.
With today's final rule, the exclusion will be revised to add
``gasification'' to the list of already recognized petroleum refinery
processes (e.g., distillation, catalytic cracking, fractionation, and
thermal cracking units) into which oil-bearing hazardous secondary
materials can be legitimately recycled. The Agency is also promulgating
a definition for the term ``gasification,'' at 40 CFR 260.10, which
applies only to this specific exclusion. The exclusion is conditioned
on there being no land placement and no speculative accumulation of the
oil-bearing hazardous secondary material prior to re-insertion into the
petroleum refining process. The exclusion allows these materials to be
inserted into the same petroleum refinery where they are generated, or
sent directly to another petroleum refinery, and still be excluded
under this provision.
Provided the conditions of the exclusion are met, oil-bearing
hazardous secondary materials will be excluded from the definition of
solid waste at the point of generation. Similarly, the fuels and by-
products manufactured from these excluded materials will also be
excluded.\1\ Residuals from the gasification process, like residuals
generated from other recognized petroleum refining processes (e.g.,
fines from coking operations) will be classified as newly generated
waste and would only be considered hazardous if they exhibit one or
more of the hazardous waste characteristics. However, as discussed in
the preamble for the Federal Register notice promulgating this
exclusion at 63 FR 42128 (August 6, 1998), the exclusion extends only
to materials actually reinserted into the petroleum refinery process,
and any residuals generated from the processing of oil-bearing
hazardous secondary materials prior to insertion into the petroleum
refining process are designated as F037 waste.
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\1\ The existing exclusion found at 40 CFR 261.4(a)(12)(i) also
requires that the oil-bearing hazardous secondary material inserted
into the petroleum refinery process does not result in the coke
product exhibiting one or more of the hazardous waste
characteristics.
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Subsequent to the promulgation of the exclusion in August 1998 (63
FR 42110), we proposed regulatory language that would create a new,
separate exclusion to address the gasification of oil-bearing hazardous
secondary materials. (See 67 FR 13684, March 25, 2002.) However, in the
course of finalizing this rule, we have concluded that a new exclusion
is unnecessary. Instead, we are following the original proposal
suggested in the July 15, 1998 Notice of Data Availability (NODA) (See
63 FR 38139) to add to 40 CFR 261.4(a)(12)(i) gasification, as one of
the recognized petroleum refining processes to which oil-bearing
hazardous secondary materials can be inserted and not be considered a
solid waste under the Subtitle C hazardous waste regulations. The
definition of gasification, however, is generally based on the March
2002 proposal, and comments and information developed as a result of
both the NODA and that proposal.
Today's final rule is based on information presented in the July
1998 NODA, the final rule for oil-bearing hazardous secondary materials
for petroleum refining operations published in August 1998, and the
March 25, 2002 proposed rule. The rulemaking record for this rule
incorporates the rulemaking records for all of these notices.
III. Background
The exclusion at 40 CFR 261.4(a)(12)(i) provides operators of
petroleum refineries with the ability to recycle materials generated by
the refining of crude oil to manufacture additional fuels. In that
rule, we specifically address certain reinsertion scenarios that
involved common practices within the industry (e.g., coking and quench
coking operations). Prior to finalizing these provisions, however, we
issued a Notice of Data Availability (NODA) specifically requesting
comment on extending the exclusion to gasification--a process that also
provides operators of petroleum refineries the ability to extract
additional hydrocarbons from these materials by converting them into a
synthesis gas. (See 63 FR 38139, July 15, 1998.)
We stated in the NODA that gasification of oil-bearing hazardous
secondary materials from the petroleum refining industry may be an
activity warranting an exclusion from the definition of solid waste,
because gasification also provides a means of recovering hydrocarbons
from these materials and could be viewed as an additional process in
crude oil refining. We also noted that a gasification system might
compete with other petroleum refining operations (i.e., coking) for
these same materials, which suggested to us that gasification is an
alternative fuel production process--just one that was not being used
extensively in the petroleum refining industry.
The Agency did not add gasification in the 1998 rule, choosing to
explicitly include only those petroleum refining processes discussed in
the original proposal. In 2002 however, the Agency proposed a
different, more ambitious exclusion for hazardous waste processed in a
gasification system for the production of synthesis gas. In that
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proposal, we solicited comment on two conditional exclusions. The first
was for oil-bearing hazardous secondary materials recycled in a
gasification system operating at a petroleum refinery or at a different
facility operating outside the petroleum refining industry. This
proposal was different from what was proposed in the 1998 NODA, where
gasification operations were specifically identified as part of the
petroleum refining operation. A second, much broader exclusion,
addressed all hazardous secondary material when processed in a
gasification system for the production of synthesis gas. This broader
exclusion is not being addressed as part of this rulemaking and is
still under consideration by the Agency.\2\
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\2\ However, it is likely that if we chose to move forward with
the broader exclusion, the Agency would issue a supplemental
proposal before it makes any final decision.
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Because the proposed exclusion was addressing recycling scenarios
for oil-bearing hazardous secondary materials outside petroleum
refining operations, we proposed an expanded set of conditions. The
conditions proposed included the conditions already included in 40 CFR
261.4(a)(12)(i) (e.g., no speculative accumulation and no land
placement of the material prior to reuse), as well as conditions, that
we believed, would ensure the legitimacy of the process as a production
operation, rather than a waste treatment process.
The first condition specified was a definition of the types of
gasification systems capable of processing these oil-bearing hazardous
secondary materials into synthesis gas. At the time, we were aware of a
number of devices operating in the United States (U.S.) that could
claim to be a type of gasification system, but did not gasify materials
in the same manner, or to the same extent, as the gasification systems
we considered for the proposal. We were concerned that these devices
may be more similar to waste treatment processes than to production
operations.
Additionally, we proposed that the synthesis gas product from the
gasification system meet the fuel specification promulgated for
hazardous waste derived synthesis gas in the ``Synthesis Gas Rule.''
\3\ The synthesis gas specification (or syngas spec) establishes
specific physical parameters and concentration levels for contaminants
and serves as a regulatory benchmark for classifying synthesis gas
produced from hazardous waste as a fuel that can be readily marketed,
rather than as a hazardous waste fuel (see 40 CFR 261.38(b)).\4\
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\3\ For purposes of this preamble discussion, we are using the
term, ``Synthesis Gas Rule'' to refer to the regulation found at 40
CFR 261.38(b). This regulation was developed as part of the RCRA
Comparable Fuels Exclusion that provides a conditional exclusion
from RCRA Subtitle C for fuels which are produced from a hazardous
waste, but which are comparable to some currently used fossil fuels.
The entire preamble and rule can be found in 63 FR 33782, June 19,
1998. Hazardous Waste Combustors; Revised Standard; Final Rule--Part
I: RCRA Comparable Fuel Exclusion; Permit Modification for Hazardous
Waste Combustion Units; Notification of Intent to Comply; Waste
Minimization and Pollution Prevention Criteria for Compliance
Extensions.
\4\ We also solicited comment on a number of approaches to
revise the synthesis gas specifications found at 40 CFR 261.38(b).
(See 67 FR at 13694, March 25, 2002.) In particular we were
interested in revised standards for the highly volatile metals and
some organic constituents.
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Finally, we proposed that any co-product or residue generated by
the gasification system be subject to the Universal Treatment Standards
(UTS) (found at 40 CFR 268.48) for six RCRA metals (i.e., antimony,
arsenic, chromium, lead, nickel, and vanadium), if such co-product or
residue was placed on the land. This condition was proposed to ensure
legitimacy by applying the same land disposal provisions to any co-
product and residual that would have existed had the oil-bearing
hazardous secondary materials not been excluded from the definition of
solid waste. We reasoned that this would eliminate any incentive to
claim to be performing ``gasification'' for the real purpose of
avoiding treatment of metals in residues that ultimately are placed on
the land.
In response to the proposal, a number of commenters generally
supported the idea of promoting the reuse of oil-bearing hazardous
secondary materials from petroleum refineries to produce additional
fuels, although they also expressed concern with one or more of the
proposed conditions. A number of other commenters, however, disagreed
with our approach. Specifically, these commenters believed that full
RCRA Subtitle C regulation for both the oil-bearing hazardous secondary
materials and the gasification process was mandated by RCRA. These
commenters stated that RCRA Subtitle C oversight is necessary because
gasification is merely a poor combustion process, promoting the
generation and release of toxic products of incomplete combustion
(PIC), including dioxin-containing compounds. Conversely, other
commenters questioned, as they had for the coking and quench coking
operations in the original exclusion, whether we had any regulatory
authority at all in this situation. (See discussion at 63 FR 42121-
42129, August 6, 1998.) These commenters suggested that the
gasification of oil-bearing hazardous secondary materials generated
elsewhere in the refining process is merely the final step in
extracting fuels from the crude oil feed to the refinery and is,
therefore, part of an ongoing production process. We also received
comments on the specific conditions we proposed as part of the
exclusion.
With regard to the specific technical issues for which we solicited
comment, we received little response. That is, commenters did not
provide data on the composition of gasification system residues or the
composition of synthesis gas. In addition, limited data were received
regarding the economics of operating a gasification system at a
petroleum refinery or elsewhere.\5\ While we solicited this information
for both the proposed petroleum refinery exclusion and the broader
exclusion applicable to all hazardous waste (see 67 FR at 13695, March
25, 2002), the lack of information submitted weighed heavily on our
decision to limit today's rulemaking specifically to the petroleum
refinery industry.
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\5\ One commenter described the composition of their residue
streams for their specific gasification system; however, no
constituent concentration data was provided. In this case, the
commenter described inorganic residues that vitrify into a leach
resistant glass, solid particulates of baghouse dust and a dissolved
salt scrubber solution.
A few comments were received on the economics of the
gasification process. Several commenters disagreed with our
assessment of the economics of running a gasification system. One
commenter disagreed with our statements that the cost of building
and operating a gasification system is sufficient to guarantee high
quality products. Other commenters stated that the changes we were
proposing would not lower the regulatory barriers to using
gasification as part of the production process.
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Major comments on today's rule are discussed elsewhere in this
preamble.
IV. Development of This Final Rule
Through study of existing technical reports and papers published by
the Department of Energy (DOE) and others, the Agency was aware that
gasification could be a part of the petroleum refining process. We
solicited data to confirm this in our proposal; however, commenters did
not provide a significant amount of new information, thus requiring EPA
to once again check existing information and data to confirm our
understanding of the gasification process and its use in petroleum
refinery operations. In addition, we sought to confirm, through site
visits, how gasification was integrated into the production process at
some petroleum refineries.
[[Page 60]]
A. How Many Gasification Systems Are Currently Operating at Petroleum
Refineries?
Petroleum refineries use gasification for the conversion of low-
value fuels and/or secondary material, such as petroleum coke,
visbreaker tar and deasphalter pitch into synthesis gas. Synthesis gas
can then be converted to usable products, such as hydrogen, ammonia and
other chemicals, and/or used as a fuel to produce steam and
electricity. Oil-bearing hazardous secondary materials generated at the
petroleum refinery can also be co-gasified with these other materials
to manufacture synthesis gas. In petroleum refining operations,
electric power generation is a preferred use for the synthesis gas. For
this purpose, the integrated gasification combined cycle (IGCC)
technology can be integrated into the petroleum refinery process.
Except for the gasifier and the feedstock preparation units, many of
the components in an IGCC system already exist at a petroleum refinery.
Downstream of a gasifier, petroleum refineries, as part of their
ongoing production processes, typically have the other components of an
IGCC plant, including gas clean-up systems, Claus plants, heat recovery
systems, and steam and gas turbines. Power generation for use within a
petroleum refinery is not a new activity and based on our research, is
widely practiced. Seldom, however, is enough power produced to allow it
to be sold for external consumption. With the utilization of an IGCC
plant, a refinery's internal power needs can be readily addressed with
surplus power sold as a commodity to outside consumers.
Presently, EPA has identified four gasification systems operating
at petroleum refineries in the U.S.\6\; one of these is an IGCC unit.
\7,8,9\ The second uses the synthesis gas to produce chemicals. The
Agency is also aware of two petroleum refineries that operate units
combining fluid coking with coke gasification, a process known as
flexicoking.TM\10\
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\6\ Data pertaining to operational gasification systems
processing secondary materials from petroleum refineries was
developed from a review of the Gasification Technology Council's
database. Based on information obtained from this database, there
are 16 gasification systems operating at petroleum refineries
outside the U.S. See email correspondence from Mr. James Childress,
Executive Director, Gasification Technology Council to Ms. Elaine
Eby, USEPA. Re: Operational Gasification Systems Processing
Petroleum Refining Residues at Petroleum Refineries. July 2007.
\7\ Experience With Low Value Feed Gasification at the El
Dorado, Kansas Refinery by Gary DelGrego. Texaco Power and
Gasification. Presented at the 1999 Gasification Technology
Conference. Recently, the Agency learned that the IGCC unit
operating at the El Dorado, Kansas refinery was shut down in 2006.
\8\ IGCCs combine the gasification reactor with a combined cycle
power turbine designed to use the synthesis gas. In IGCC systems,
the synthesis gas is injected into the combustion turbine and
ignited. The resulting high energy exhaust from the combustion of
synthesis gas in the turbine is used to turn a generator. Steam and
additional electric power is recovered in a follow-up heat recovery
steam generator from the turbine's high temperature exhaust.
\9\ One of the largest markets for IGCC systems is the petroleum
refining industry using petroleum residual feedstock, such as vacuum
residual oil, deasphalter bottoms and petroleum coke. Petroleum
refineries typically feature multi-train designs for high
reliability and the co-production of power, steam and hydrogen for
the refinery, with extra power being sold to third parties. Major
Environmental Aspects of Gasification-based Power Generation
Technologies--Final Report. U.S. Department of Energy. Office of
Fossil Energy. National Energy Technology Laboratory. December 2002.
\10\ Sapre, Ajit, Kamienski, Paul, Phillips, Glenn, Wright,
Marie, Resid Upgrading Technology Options and Role of Flexicoking
Technology. ERTC Coking and Gasification Conference, Paris France.
April 18, 2007.
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While petroleum refinery-based gasification units are currently in
limited use in the U.S., interest in developing these systems is on the
rise.\11,12,13\ Many factors may be contributing to this interest, but
we believe it is most likely related to the increasing cost of natural
gas, an increasing interest in maximizing efficiencies in the petroleum
refining process, manufacturing cleaner fuels, and reducing the
generation of waste. Although limited in number, petroleum refinery-
based gasification systems have demonstrated positive economic returns,
while providing more flexible operations to address increases in raw
material costs.\14\ These facilities have shown that gasification
systems can process lower value fuels or material commodities (e.g.,
petroleum coke and other petroleum secondary materials) into higher
value fuels or chemical commodities. These systems have also
demonstrated how well gasification fits into petroleum refinery
operations and the advantages of doing so.
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\11\ Gray, D. and Tomlinson. Potential of Gasification in the
U.S. Refining Industry. United States Department of Energy, National
Energy Technology Laboratory. June 2000.
\12\ Murano, John J. Refinery Technology Profiles. Gasification
and Supporting Technologies. U.S. Department of Energy. National
Energy Technology Laboratory. Energy Information Administration.
June 2003.
\13\ Clayton, Stewart J., Steigel, Gary J., and Wimer, John G.,
Gasification Technologies Product Team, U.S. Department of Energy.
U.S. DOE's Perspective on Long-Term Market Trends and R&D Needs in
Gasification. Presented at the 5th European Gasification Conference.
Gasification--The Clean Choice. Noordwijk, The Netherlands. April 8-
10, 2002.
\14\ The addition of a gasification plant at an El Dorado,
Kansas petroleum refinery resulted in significant economic benefits.
Previously, the refinery was spending $12 to $14 million per year on
power purchases from the local utility. With the implementation of
the gasification system, the refinery reported paying only a few
million dollars a year for stand-by services. In addition, the
refinery saved about $1 million annually in both waste shipment and
disposal costs and nitrogen costs. Steam production costs were
reduced by more than half. Other benefits resulted from oxygen
enrichment of the sulfur plant that enabled the refinery to process
a wider range of high sulfur crudes. Furimsky, E. Gasification in
Petroleum Refinery of 21st Century. Oil and Gas Science and
Technology--Rev. IFP, Vol.54 (1999), No. 5, pp. 597-618.
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B. What Conclusions Have We Drawn About Gasification Systems Operating
at Petroleum Refineries?
This Unit IV.B. explains the overall rationale for the Agency's
decision that oil-bearing hazardous secondary materials inserted into a
gasifier are excluded from the definition of solid waste. Analyses
supporting this decision are found elsewhere in this preamble and in
the rulemaking record, including the Response to Comment document for
this rulemaking. In each configuration reviewed, where petroleum
refineries used petroleum coke alone or in combination with other
petroleum feedstock (including oil-bearing hazardous secondary
materials), we found that the systems are operated as part of the
petroleum refining process and produce synthesis gas as a legitimate
product to further enhance the petroleum refining operation. We believe
that a gasification system, when operated at a petroleum refinery, will
function as a component of the overall petroleum refinery process to
produce synthesis gas as its main product.\15\ In turn, synthesis gas
can be used to manufacture usable products, such as hydrogen, ammonia
and other chemicals, and/or used as a fuel to produce steam and
electricity. Oil-bearing hazardous secondary materials generated by
petroleum refineries, as well as other low-value fuels, are appropriate
feed materials to
[[Page 61]]
gasification systems because these materials contain hydrocarbons that
can be further processed into fuels or chemicals. The use of a gasifier
to recover these hydrocarbons is ideal because the system not only
operates to recover the hydrocarbon value for the production of a
legitimate product, but can also process the non-fuel components to
yield inorganic co-products (e.g., liquid or solid sulfur, ammonia). In
manufacturing settings, gasification systems have historically been
used to produce commodities and have not been operated to get rid of
unwanted material.\16\ At petroleum refineries, a gasification system
complements the activities already being performed at the petroleum
refinery, i.e., the manufacture of fuels from crude oil.
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\15\ ``Gasification-based systems operated at a petroleum
refinery are typically highly integrated processes. The complex
consists of a number of distinct processing steps/plants. These are:
feed preparation, gasifier, air separation unit (ASU), syngas clean-
up, sulfur recovery unit (SRU), and downstream process options, such
as cogeneration, hydrogen production, Fischer-Tropsch synthesis or
methanol synthesis. Any given installation may or may not contain
all of these processes depending on the feedstock used, products
desired, and the availability of spare capacity in pre-existing
plants at the petroleum refinery. For example, if the petroleum
refinery has spare sulfur plant capacity or can revamp its existing
sulfur plant to gain capacity, the sulfur plant would be considered
outside the battery limits of the gasification complex.'' Marano,
John J., Refinery Technology Profiles: Gasification and Supporting
Technologies. U.S. Department of Energy. National Energy Technology
Laboratory. Energy Information Administration. June 2003.)
\16\ See review of Coal Conversion Technologies in Perry's
Chemical Engineer's Handbook, Seventh Edition. Pages 27-13 through
27-25. McGraw-Hill. 1997.
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While some commenters have argued that gasification of oil-bearing
hazardous secondary materials is more a waste management process
involving incineration than a petroleum refining process, we refer to
the conclusions drawn in a DOE report contrasting incineration and
gasification. DOE concluded, and we agree, that gasification and
incineration are distinct processes that can be distinguished by a
number of factors. As discussed in the report, the factors
distinguishing the two processes are: (1) Incinerators are designed to
maximize the conversion of feedstock to carbon dioxide and water;
gasifiers are designed to maximize the conversion of feedstock to
carbon monoxide and hydrogen; (2) incinerators utilize large quantities
of excess air; gasifiers utilize small quantities of oxygen; (3)
incinerators operate in a highly oxidizing environment; gasifiers
operate in a reducing environment; (4) incinerators discharge their
flue gas to the environment as a waste; gasifiers utilize their
synthesis gas for ongoing chemical, fuel production or power production
as a product gas.\17 \
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\17\ A Comparison of Gasification and Incineration of Hazardous
Waste--Final Report. United States Department of Energy, National
Energy Technology Laboratory (NETL). 3610 Collins Ferry Road.
Morgantown, West Virginia 26505. DCN 99.803931.02. March 30, 2000.
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The Agency has concluded that gasification operations fall within
the scope of normal operations at petroleum refineries--even when
applied to material that has historically been managed as waste. The
Agency believes that recognizing gasification as a petroleum refining
process, capable of recycling oil-bearing hazardous secondary
materials, achieves the resource recovery goals of RCRA without
jeopardizing human health and the environment. Gasification is a
desirable component of fuel manufacturing operations at a petroleum
refinery because it ensures more efficient processing of crude oil and
provides the petroleum refinery with the added flexibility to maximize
its fuel production outputs. Therefore, we disagree with the view that
the activity serves essentially as a waste management process.
In today's final rule, we find that oil-bearing hazardous secondary
materials generated as part of the petroleum refinery process and
inserted into a gasification system located at a petroleum refinery,
will serve as legitimate feedstock materials and that the gasification
process, is a type of petroleum refining process warranting these
materials an exclusion from the definition of solid waste. We have
concluded that the operation of gasification systems at petroleum
refineries is consistent with other processes that occur at petroleum
refineries (e.g., fractionation, coking, quench coking) because: (1)
The activity takes place at a petroleum refinery; (2) the system uses
feedstock only from refinery operations; (3) the system generates a
synthesis gas that, is converted to multiple products, such as steam,
electricity, hydrogen, as well as other chemicals; (4) the products
generated are consistent with the many types of products normally
generated at petroleum refineries; and (5) the system processes the raw
material by manipulating the same variables, e.g., hydrocarbons, as
other refining processes that are universally accepted to be part of a
petroleum refinery.\18\
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\18\ Energy and Environmental Profile of the U.S. Petroleum
Refining Industry. United States Department of Energy. December
1998.
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V. This Final Rule
Gasification systems, like other petroleum refining operations, are
capable of recovering fuel value or chemicals from the recycling of
oil-bearing hazardous secondary materials. As such, we believe it is
appropriate to treat these materials in a manner consistent with the
other processes used at petroleum refineries that recover fuel value or
chemicals from crude oil--the basic raw material used in petroleum
refining. Today, we are amending the exclusion found at 40 CFR
261.4(a)(12)(i), by adding gasification to the list of recognized
petroleum refining processes. We are finalizing this change to: (1)
Prevent unnecessary confusion regarding the status of oil-bearing
hazardous secondary materials from the petroleum industry recycled in a
gasification system; (2) promote the use of a technologically advanced
method of extracting hydrocarbons from these materials; and (3) remove
regulatory restrictions that may limit the petroleum refining
industry's ability to maximize the production of fuels and other
commodities from crude oil, while minimizing the production of waste
from the fuel production process.
The Agency has decided to limit the scope of this exclusion to oil-
bearing hazardous secondary materials that are gasified as part of the
petroleum refining process for the production of synthesis gas. As
such, we are retaining only the conditions applied to oil-bearing
hazardous secondary materials in the existing exclusion at 40 CFR
261.4(a)(12)(i). We are, however, adding one additional condition, a
definition for gasification, which is based on information presented in
the 1998 NODA, as well as the March 2002 proposal and comments and
information received in response to these notices.
We have decided not to finalize the other conditions proposed in
2002. In large part, we have decided to eliminate these conditions
because we are not extending this exclusion to oil-bearing hazardous
secondary materials recycled at gasification systems operating outside
the petroleum refining industry. The condition requiring the synthesis
gas meet the specification we developed in the regulations at 40 CFR
261.38(b) has been removed because we now believe, based on the
compelling arguments made by commenters and a review of our rationale
for including it as a condition, that it was unnecessary and an
inappropriate application of RCRA to a petroleum fuel product. Our
decision is strongly influenced by the operational purpose of petroleum
refineries--the production of fuels. Petroleum refineries create fuels
for commercial markets, and we are convinced that these gasification
systems operate within the reasonable scope of these operations. We
have also removed the condition requiring that materials generated by
the gasification system (i.e., co-products and residuals) not be placed
on the land if they exceed the nonwastewater Universal Treatment
Standards (UTS) for antimony, arsenic, chromium, lead, nickel, and
vanadium (found at 40 CFR 268.48). After further review, the Agency has
determined that this condition is inconsistent with the current
exclusion we are amending, and conflicts with how RCRA manages residues
from excluded materials (i.e.,
[[Page 62]]
wastes are excluded at the point of generation, provided the conditions
of the exclusion are met). Further, these constituents are not expected
to leach at levels above the UTS in the residuals from gasification at
petroleum refineries. These changes are discussed below.
A. Does the Conditional Exclusion Include a Definition for a
Gasification System Used at a Petroleum Refinery?
Yes. In today's final rule, we are promulgating a regulatory
definition for gasification systems that are used at petroleum
refineries. For this rule, gasification is defined as a process,
conducted in any enclosed device or system, designed and operated to
process petroleum feedstock, including oil-bearing hazardous secondary
materials, through a series of highly controlled steps utilizing
thermal decomposition, limited oxidation, and gas cleaning to yield a
synthesis gas composed primarily of hydrogen and carbon monoxide gas.
This final definition differs from the definition proposed in 2002
in a number of ways. We have: (1) Deleted the reference to incinerators
or industrial furnaces; (2) removed the requirement for the gasifier to
slag its inorganic feed at temperatures above 2000 degrees Fahrenheit;
and (3) removed the requirement that the unit be equipped with
monitoring devices that ensure the quality of the synthesis gas. This
revised definition reflects current information on gasification systems
at petroleum refineries and addresses the significant concerns
commenters raised regarding the proposed definition. More importantly,
however, the definition reflects the primary purpose for using
gasification at petroleum refineries, the production of synthesis gas.
As such, we believe that we have retained the most important
requirements of a gasification system operating at a petroleum
refinery: (1) That it is considered a process; and (2) it utilizes
petroleum feedstock to yield a synthesis gas.
In the 2002 proposal (see 67 FR at 13690), we defined a
gasification system as an enclosed thermal device and associated gas
cleaning system (or systems) that does not meet the definition of an
incinerator or industrial furnace (found at 40 CFR 260.10), and that:
(1) Limits oxygen concentrations in the enclosed thermal device to
prevent the full oxidization of thermally disassociated gaseous
compounds; (2) utilizes a gas cleanup system or systems designed to
remove contaminants from the partially oxidized gas that do not
contribute to its fuel value; (3) slags inorganic feed materials at
temperatures above 2000 degrees Fahrenheit; (4) produces a synthesis
gas; and (5) is equipped with monitoring devices that ensure the
quality of the synthesis gas produced by the gasification system.
We received numerous comments criticizing various aspects of our
proposed definition. Some commenters argued the definition, as written,
prohibited the potential use of a large number of gasification system
designs that are in use around the world. More specifically, commenters
stated that the definition eliminated one of the gasification designs
currently processing petroleum residues in the U.S. because it did not
operate at the specified temperature or slag the residual.\19\
Generally, however, commenters urged the Agency to revise the
definition to include all petroleum refinery-based units currently
processing petroleum refining residues, or provide some type of site-
specific variance to allow such units the opportunity to demonstrate
that they can safely process refinery residues in their gasification
system. While the development of a variance procedure would be a
possible mechanism to evaluate those gasifiers not meeting the
definition, the Agency believes that the definition of gasification
being promulgated today addresses the concerns raised by the commenters
and provides sufficient flexibility to allow for any number of
gasification designs or configurations to be used within a petroleum
refinery. As such, we have not included a variance provision as part of
today's rule.
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\19\ The Agency would also note that this gasification system
operates outside a petroleum refinery and as such, would not be
eligible for today's final rule.
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As previously mentioned, EPA has conducted a number of site visits
to gasifiers located both on-site of a petroleum refinery and off-site
and has continued to research the use of gasification at petroleum
refineries. As a result of these efforts, we have concluded that
gasification design and operation can vary substantially within the
petroleum refining industry. We have also concluded and agree with
commenters that a variety of different gasifier designs are capable of
legitimately processing petroleum feedstock to produce a synthesis
gas.\20\ This has given us reason to reassess the need for specifically
defining certain operating characteristics of a gasification system.
Our revised definition of ``gasification'' allows additional
flexibility in the design and configuration of gasification systems to
process petroleum feedstock, including oil-bearing hazardous secondary
materials, provided the gasification system produces a synthesis gas.
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\20\ The reader is referred to the following DOE reports
assessing the various types of gasification systems that can be used
at petroleum refineries. Marano, John J., Refinery Technology
Profiles: Gasification and Supporting Technologies. U.S. Department
of Energy. National Energy Technology Laboratory. Energy Information
Administration. June 2003.) and Gray, D. and Tomlinson. Potential of
Gasification in the U.S. Refining Industry. United States Department
of Energy, National Energy Technology Laboratory. June 2000.
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Several commenters questioned whether our definition should
differentiate gasification from incinerators and industrial furnaces
regulated under Subtitle C of RCRA. One commenter was particularly
concerned that the proposed definition would require an affirmative
determination by regulators that the gasification system did not meet
the definition of incinerator or industrial furnace defined at 40 CFR
260.10. Additionally, the commenter questioned whether gasification
systems also designed to recover hydrogen chloride (HCl) (which
gasification systems can be configured to recover), could also be
defined as a type of industrial furnace, (i.e., halogen acid furnace)
and thus not be able to use the exclusion.
After weighing the value added to the definition by including the
references to industrial furnaces and incinerators (defined at 40 CFR
260.10), we are persuaded that including the reference to hazardous
waste burning incinerators and industrial furnaces in the definition is
unnecessary and could lead to confusion between the public, the
regulated community, and regulators on how to regulate these units.
Accordingly, we have removed the references to incinerators and
industrial furnaces from the final definition. We expect, however, that
even with this change to the definition, that certain gasification
systems could be confused with, or identified as, a type of industrial
furnace. In these situations, where the design and operational
characteristics appear to be shared between the two types of systems,
we believe it is appropriate for regulators to review the predominant
products and process design of the system in question. For example, if
the system recovers only small amounts of synthesis gas fuel, but
significant amounts of hydrogen chloride, and the design of the system
does not differ substantially from industrial furnaces designed to
recover hydrogen chloride (i.e., a substantial fraction of emissions
are released to the atmosphere), such a system would more appropriately
be classified as a type of industrial furnace, rather than a
gasification system.
The Agency received few comments on four of the operational
requirements
[[Page 63]]
proposed as part of the definition of gasification system: (1) Limits
on oxygen concentrations in the enclosed thermal device to prevent the
full oxidization of thermally disassociated gaseous compounds (2)
production of a synthesis gas; (3) requirements for a gas cleanup
system or systems designed to remove contaminants from the partially
oxidized gas that do not contribute to its fuel value; and (4)
requirements for monitoring devices that ensure the quality of the
synthesis gas produced by the gasification system. In general,
commenters did not have specific technical issues with the provisions,
but thought that the provisions were unclear and would benefit from
additional clarification. For example, commenters stated that the
requirement relating to monitoring devices would benefit from EPA
identifying the type of monitoring equipment required. In the case of
the requirement for monitoring devices, consideration of this condition
is no longer germane based on our determination that petroleum
gasification is a part of the petroleum refining operation. In today's
rule, we have retained, with slight modifications, three of the
operational requirements. Changes have been made to the definition to
eliminate redundancy and provide a more clear and concise regulatory
definition. The revised definition retains the key operational
requirements of a gasification system operating at petroleum refinery--
thermal decomposition, limited oxidation, gas cleanup, and production
of a synthesis gas. This ensures that the exclusion applies only to
gasification systems designed and operated in a manner that promotes
the conversion of hydrocarbons found in the oil-bearing hazardous
secondary materials into a synthesis gas fuel.
The operational requirement that received the most comment was for
a gasification system to ``slag inorganic feed materials at
temperatures above 2000 degrees Fahrenheit.'' Commenters were divided
on the need for such a requirement. Some believed that the slagging
criteria generally would result in a non-leachable residue, a
``preferred residual matrix.'' Others stated that the temperature
requirement was arbitrary and not technically supportable. Additional
commenters questioned the usefulness of the term slagging and the
Agency's rationale for deciding to prohibit non-slagging gasifiers from
the exclusion. These commenters pointed to the fact that the residues
would be under RCRA Subtitle C jurisdiction if they exhibited a
hazardous waste characteristic based on the content and leachability of
the toxic metals.
We had proposed this requirement to address two issues: (1) To
ensure that gasification systems processing excluded materials operate
at a temperature sufficient to slag inorganic components found in the
materials, so metals would not leach from the residue; and (2) to
reduce the occurrence of unreacted carbon-containing compounds in the
residue formed by the gasification system. After review of all the
comments, and a re-examination of our site visit reports and available
technical reports, we have determined that this requirement is not
needed and would inappropriately restrict those gasification systems
and configurations that could be effectively used at petroleum
refineries for the production of synthesis gas fuels. We have found
that classifying a gasifier as slagging or non-slagging has no
relationship to a gasification system's overall ability to effectively
process hydrocarbons for the production of synthesis gas fuel.
Similarly, if a gasifier generates a residual that exhibits one or more
of the hazardous waste characteristics, it will be subject to the RCRA
Subtitle C hazardous waste regulations. We believe that this should
provide adequate incentive for petroleum refineries to consider the
potential benefit of slagging gasifiers verses non-slagging units.\21\
Any further requirement by EPA would only interfere with the
refineries' ability to most effectively achieve the same environmental
endpoint.
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\21\ Although EPA did not rely on this information in its
decision-making, data analyzed by the Agency suggests that it is
highly unlikely that leachable metal concentrations in residuals
from gasification of secondary material from petroleum refining
operations will be significant. See the memorandum to the record
from Ms. Elaine Eby, USEPA. Re: Characterization of Petroleum
Refining Waste and Possible Gasification Scenarios. August 2007.
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In the proposed rule, we further stated that gasifiers generally do
not have direct emissions to the atmosphere. Several commenters
disagreed with this conclusion and suggested that potential releases of
toxic and hazardous air pollutants (HAP) can occur during other steps
in the gasification process. These steps include, feedstock
preparation, gas cleanup, product recovery, and slag quenching, as well
as during start-up, shutdown or operational emergencies of the
gasification system. These commenters further stated that the current
Clean Air Act (CAA) regulations may fail to properly address potential
risk to human health and the environment posed by these releases. As a
result, these commenters urged EPA to make a regulatory determination
that gasifiers should be identified as an industrial furnace and
subject to all RCRA/CAA hazardous waste combustion regulations.
In the proposal, (See 67 FR at 13688), we recognized that
gasification systems are designed with release vents or flares that
operate during emergencies or malfunctioning operations. Flares and
release vents are necessary to prevent damage or catastrophic failure
of the gasification system in the event of a major malfunction. These
types of relief systems are common at facilities that manufacture
products using thermal processes. Furthermore, the operation of flares
and release vents is regulated by each facility's Title V CAA permit.
Our decision to exclude, from the definition of solid waste, oil-
bearing hazardous secondary materials generated at a petroleum refinery
and inserted back into the petroleum refining process has been guided
by a determination that gasification is a legitimate petroleum refining
process that results in the manufacture of a synthesis gas product.
(See discussion in Section IV of this preamble.) This decision allows
the beneficial use of petroleum refining oil-bearing hazardous
secondary materials for the manufacturing of a synthesis gas fuel that
can be used for the production of steam, and/or power. Therefore, we do
not agree with the commenter's suggestion that gasification systems
operating at petroleum refineries processing these materials are waste
management units (e.g., incinerators) and that any potential air
emissions should be subject to all RCRA/CAA hazardous waste combustion
regulations. Emissions at a petroleum refinery operating a gasification
system will be evaluated. However, these emissions will be evaluated
for compliance with regulations for petroleum refining operations under
the authority of the CAA.\22\
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\22\ See 72 FR 14734 (March 29, 2007), Risk and Technology
Review, Phase II, Group 2.
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B. Does the Conditional Exclusion Include a Synthesis Gas
Specification?
No. In today's final rule, there is no condition requiring the
synthesis gas to meet certain physical and/or constituent
specifications. In the 2002 proposal, the Agency included a condition
that required the synthesis gas to meet the specification for hazardous
waste derived synthesis gas found at 40 CFR 261.38(b). We proposed to
apply the synthesis gas specification because we believed it would
ensure that the synthesis gas produced was a legitimate fuel product,
and was an appropriate
[[Page 64]]
condition considering we were proposing to allow oil-bearing hazardous
secondary materials to be gasified at facilities outside a petroleum
refinery. In addition, because the Agency was taking comment on whether
to expand the exclusion to address all hazardous secondary materials
generated in other industries, we considered such a provision to be
important. In the development of the final rule, however, we have
concluded, based on analysis of the comments and further review of
petroleum refinery-based gasification systems that such a condition is
unnecessary and an inappropriate use of RCRA to regulate a fuel product
manufactured at petroleum refineries.
The majority of the comments received did not specifically address
the need for a synthesis gas specification, but rather addressed the
overall inadequacy of the synthesis gas specification finalized in the
``Synthesis Gas Rule.'' Commenters suggested that the specification was
too lenient and not drawn from appropriate data.\23\ Several commenters
also reminded the Agency of possible pending litigation.\24\
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\23\ In the proposed rule, we requested comment on a number of
approaches to revise the synthesis gas specification found at 40 CFR
261.38(b). In particular, we were interested in soliciting comment
on the specifications for highly volatile metals and certain
organics.
\24\ Commenters took issue with the inadequacy of the synthesis
gas specification found at 40 CFR 261.38(b). Commenters believed
that the allowable concentration limits for highly volatile metals
and certain organics were excessively high, the BTU value was too
low, and the specification was not based on actual synthesis gas
from a gasification unit. Commenters noted the Agency was challenged
on the synthesis gas specification in the Comparable Fuels Rule by
the Sierra Club, Natural Resources Defense Council, and the
Environmental Technology Council in Chemical Manufacturers
Association v. EPA, No. 98-1375 (DC Cir. Filed August 17, 1998). The
case is currently being held in abeyance by the DC Circuit Court.
Because the Agency has decided not to require the synthesis gas fuel
meet the specifications found at 40 CFR 261.38(b), specific comments
on the appropriate specification requirements are not being
addressed in this rulemaking.
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Irrespective of the concerns with the details of a synthesis gas
specification, only a few commenters supported establishing a synthesis
gas specification. These commenters generally agreed with the Agency's
proposed premise of applying the synthesis gas specification to ensure
legitimacy of the gasification process and the quality of the synthesis
gas. However, other commenters suggested that applying the synthesis
gas specification was without basis and inappropriate. Commenters
reasoned that the purpose of 40 CFR 261.38 was to provide an exclusion
from the definition of solid waste for synthesis gas generated by the
gasification of hazardous waste. Under the 2002 proposal, they believed
EPA was establishing that oil-bearing hazardous secondary materials
generated at a petroleum refinery and re-inserted into a gasifier were
excluded from the definition of solid waste because gasification was
part of the production process. Given that, commenters questioned the
Agency's rationale for including a hazardous waste specification to a
manufactured fuel product, i.e., a product generated from a fossil
fuel. Commenters reasoned that operators of gasification systems did
not need a specification for synthesis gas any more than they needed a
RCRA specification for gasoline, propane, petroleum coke, or any other
legitimate product from a petroleum refining operation. Additionally,
some commenters suggested that any questions regarding the quality of
the synthesis gas were answered by the use of the synthesis gas as a
fuel in power, steam, or hydrogen production on-site (subject to CAA
regulations) and should serve to ensure that the synthesis gas was, in
fact, a legitimate fuel.
The Agency agrees with the commenters. In this rule, we have
determined that gasification is a part of the petroleum refining
process and that oil-bearing hazardous secondary materials generated at
a petroleum refinery and reinserted back into a gasification system
located at a petroleum refinery are excluded from the definition of
solid waste, provided the conditions of the exclusion are met. Hence,
the Agency concludes that gasification is a legitimate fuel process
that does not require a synthesis gas specification as a condition to
ensure its legitimacy. Gasification systems when operated at a
petroleum refinery take petroleum feedstocks and convert them into a
synthesis gas comprised primarily of hydrogen, carbon monoxide, carbon
dioxide and methane. Petroleum feedstocks to these systems can include
petroleum coke, visbreaker tars, deasphalter pitch, as well as oil-
bearing hazardous secondary materials. Available information suggests
that the synthesis gas composition remains consistent regardless of the
petroleum input feed. Furthermore, when used as a fuel for power
generation, information available to the Agency shows that turbine
specifications and other equipment specifications drive the fuel
specification requirements of the synthesis gas fuel. As such, the
Agency has also concluded that applying the synthesis gas
specifications at 40 CFR 261.38 as presented in the 2002 proposal does
not provide an additional assurance that legitimate fuel operations are
occurring at gasifiers located at petroleum refineries. Therefore, in
today's final rule, we are not including a condition that requires the
synthesis gas generated by the gasification system to meet the
specification of 40 CFR 261.38(b). The Agency has determined that the
application of a hazardous waste derived synthesis gas specification is
an inappropriate use of the synthesis gas specification for
gasification operations at a petroleum refining.
However, we note that today's exclusion from the definition of
solid waste does not exempt the device from regulation under the
applicable CAA standard for the gasification device, co-product
recovery units, or any related infrastructure designed to use the
synthesis gas fuel to produce electricity.
C. Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Materials From Being Placed on the Land Prior to Insertion in
the Gasification System?
Yes, the conditional exclusion we are amending (40 CFR
261.4(a)(12)(i)) prohibits oil-bearing hazardous secondary materials
from being placed on the land prior to insertion into the petroleum
refining process. This prohibition will not change with the addition of
gasification as a listed petroleum refining process.
In the proposed rule, we explained our view that this condition
(i.e., no placement on the land prior to re-insertion into the
petroleum refining process) further defines gasification of excluded
oil-bearing hazardous secondary materials as a legitimate refining
operation for processing these materials because it requires that the
excluded materials be handled as a valuable feed to the gasification
system. We stated that we knew of no gasification system (or for that
matter, any petroleum refinery) which stored these materials on the
land, and that to do so would indicate that such oil-bearing hazardous
secondary materials are being handled more like waste, and not as a
feedstock (since because of the physical characteristics of these oil-
bearing materials, the potential for them not to be released could no
longer be assured, and there could be large-scale losses of the
secondary material due to land placement). Thus, we reasoned that oil-
bearing hazardous secondary materials from the petroleum refinery
process should preclude storing the material in anything other than a
tank, container, or some other device that would contain the material
because as
[[Page 65]]
far as we knew, the oil-bearing hazardous secondary materials were
generally comprised of tar-like, oily substances not amenable to land
storage or placement.
Most of the commenters agreed with our position that some type of
restriction was appropriate to prevent the oil-bearing hazardous
secondary materials from being placed or stored on the land. However,
some commenters did not completely agree with our characterization of
these materials (i.e., tar-like oily substances) and suggested that the
prohibition take into account the physical characteristics of the oil-
bearing hazardous secondary materials before a total prohibition on
land placement was implemented. For example, some commenters believed
that the prohibition should only apply to those hazardous secondary
materials that are tar-like oily substances, while other commenters
suggested that we modify the wording of the prohibition to allow for
land placement of hazardous secondary materials if it would not
endanger the environment. One commenter stated that the hazardous
secondary materials they received from a petroleum refinery could be
described as chunky, angular, blocky or coarse particulates and could
be safely managed on the land. However, these commenters did not
provide EPA with any characterization data that would support their
claims.
Given that these hazardous secondary materials would be hazardous
waste if discarded instead of being gasified, and given that land
placement of these types of oil-bearing hazardous secondary materials
is not typical before they are reinserted back into the petroleum
refinery, we see no reason to relieve them from the existing
prohibition against land placement for all oil-bearing hazardous
secondary materials prior to re-insertion into the petroleum refining
process (i.e., gasified). This approach maintains full regulatory
consistency with the exclusion found at 40 CFR 261.4(a)(12)(i) which is
being amended today to include gasification as an identified petroleum
refining process.
D. Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Materials From Being Speculatively Accumulated Prior to
Insertion in the Gasification System?
Yes. In today's rule, the conditional exclusion we are amending (40
CFR 261.4(a)(12)(i)) includes the requirement that the oil-bearing
hazardous secondary materials not be speculatively accumulated prior to
insertion into the petroleum refining process. This provision will not
change with the addition of gasification as a listed petroleum refining
process.
In the proposed rule, we stated that the speculative accumulation
provision ensures that legitimate quantities of oil-bearing hazardous
secondary materials are being recycled and re-inserted into the
petroleum refining process rather than being stored to avoid
regulation. We reasoned that this condition was necessary to assure
that recycling actually occurs, and that such materials are not
discarded by being stored for extended periods of time. Furthermore, we
stated that this condition is consistent with the no speculative
accumulation condition we adopted for excluded oil-bearing hazardous
secondary materials returned to the petroleum refinery process (40 CFR
261.4(a)(12)(i)).
As such, we are promulgating, as proposed, the speculative
accumulation provision for oil-bearing hazardous secondary materials
prior to their insertion into the petroleum refinery process. This
requirement should ensure that such materials are not ``over
accumulated,'' an indication of discard, but are being legitimately
recycled, which maintains regulatory consistency with the existing
exclusion we are amending at 40 CFR 261.4(a)(12)(i).
E. Does the Conditional Exclusion Regulate Certain Metals in Residuals
Generated from the Gasification Process?
No. In today's final rule, we are removing the proposed condition
that materials (both co-products and residues) generated by the
gasification system not exceed the nonwastewater Universal Treatment
Standards (UTS) (40 CFR 268.48) for antimony, arsenic, chromium, lead,
nickel, and vanadium when placed on the land.\25\ Under today's rule,
and consistent with both the proposal and the existing exclusion found
at 40 CR 261.4(a)(12)(i), we are classifying residues generated after
the gasification process as newly generated. The determination as to
whether the gasification residues (i.e., waste) or any other residue
generated after reinsertion into the petroleum refining process are
hazardous will be based on whether the residues exhibit a hazardous
waste characteristic(s) when generated (i.e., after the oil-bearing
hazardous secondary material is gasified). Should a residue exhibit a
characteristic, such as leaching toxic metals at levels above the
prescribed standards, it will be required to be managed in compliance
with all applicable RCRA hazardous waste regulations, including the
Land Disposal Restrictions (see 40 CFR 268.48).\26\ As for co-products,
they are fully excluded as products and are outside RCRA jurisdiction
unless discarded and/or disposed.
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\25\ Universal Treatment Standards (UTS) are concentration-based
treatment levels that must be met before a RCRA hazardous waste can
be land disposed. These treatment standards can be found in 40 CFR
268.40.
\26\ If the Agency receives evidence to suggest that these
gasification residues routinely have the potential to adversely
affect human health and the environment, the Agency could list them
as hazardous under RCRA.
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In our proposed rule, we requested comment on a condition to the
exclusion establishing leachate limits for six toxic metals in the
gasification co-products and residuals prior to any placement on the
land. We considered this condition to ensure that co-products and
residues generated by the gasification process and that were to be
placed on the land did not contain toxic metals with a potential for
leaching greater than allowed by the requirements of the Land Disposal
Restrictions (LDR) program. (See 67 FR at 13691, March 25, 2002.) In
developing this possible condition, we were influenced by the condition
established for hazardous waste-derived products that are used in a
manner constituting disposal (see 40 CFR 266.20). These materials are
required to meet the appropriate LDR treatment standards prior to use
as products applied to the land (e.g., fertilizers). We reasoned that
requiring this same condition for co-products and residuals would
ensure legitimate fuel manufacturing by applying the same land disposal
provisions to the co-products and residuals that would have existed had
the material (i.e., the listed waste) not been excluded from the
definition of solid waste. Further, it was reasoned that this proposed
condition would be needed to assure that the gasification system is
operated for the purpose claimed--conversion of organic matter in the
hazardous secondary materials into fuels (or intermediates), while
removing metals from raw synthesis gas and trapping those metals in an
inert matrix. The levels in the proposed condition would provide a
means of quantifying this premise.
We received comments that both supported and opposed this
condition. Commenters opposed to the condition stated that there was no
need to impose the UTS requirements, beyond what the regulations (e.g.,
40 CFR 261.4(a)(12)(i)) already required for residues generated from
the petroleum refining process (i.e., the characteristic test), and
that EPA had provided no rationale for imposing the additional UTS
[[Page 66]]
requirements. As proposed, the condition would apply to any residual
regardless of its characteristic determination. Other commenters,
however, believed that EPA had not gone far enough, and that the
residuals generated during the gasification process should be certified
to meet all the nonwastewater UTS (both organic and inorganic
constituents). Without such limits on hazardous organics, the
commenters argued that substantial releases to the environment might
occur because these residuals would be allowed in landfills not subject
to subtitle C regulations.
The Agency rejects the suggestion of the commenters that
gasification residuals should be tested for all UTS constituents. As a
result of studies and analyses conducted by EPA in support of the
listing determinations for petroleum refinery wastes, as well as
development of the LDR treatment standards for these wastes, the
characterization of these materials is well documented, and does not
represent all the UTS constituents. The suggestion that it is necessary
to require these residuals meet all the nonwastewater UTS for all
organic and inorganic constituents is therefore without technical
justification.
In response to the commenters arguing against imposing the UTS
requirements for the six metals, the Agency set about establishing
further justification for this condition. This began with a more
detailed analysis of the characterization data for petroleum refining
waste collected as part of the LDR program. We reviewed available data
presented in various Treatment Technology Background Documents to get a
better understanding of the total concentration levels of these six
metals in the listed waste. As a result of this effort, we were able to
collect concentration data for nine listed petroleum refining wastes.
Next, based on information collected as part of the proposed rule, as
well as information presented in two recent DOE studies, we developed
gasification scenarios using a combination of petroleum coke and oil-
bearing hazardous secondary materials as feedstock to gasifiers with
different feed rates.\27\ As a result of this analysis, we concluded,
based on two scenarios we believe are most representative of possible
gasification activities at petroleum refineries, that gasification
residues would achieve the UTS levels for all metals, except for
vanadium in one scenario and chromium in the other. With regard to
chromium, the concentration level was below the characteristic level,
but above the UTS level. As for vanadium, it was determined that
petroleum coke (a product) contributed most of the vanadium to the
gasifier, and that vanadium concentrations in the gasification
residuals would not be affected when feeding petroleum coke alone or in
combination with oil-bearing hazardous secondary materials.
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\27\ See the memorandum to the record from Ms. Elaine Eby,
USEPA. Re: Characterization of Petroleum Refining Waste and Possible
Gasification Scenarios. August 2007.
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Although this analysis showed chromium levels above the UTS in one
scenario, the Agency is convinced that chromium concentrations in oil-
bearing hazardous secondary materials have decreased from the levels
found in our characterization studies, which were conducted in 1988,
1992, and 1998 and therefore will be lower than what we used in our
analysis (i.e., the gasification residuals will have concentration
levels below the UTS). This is based on information in the preamble for
the August 1998 listing rule promulgating the exclusion at
261.4(a)(12)(i) that indicates that chromium levels in these hazardous
secondary materials will decrease due to a prohibition on chromium-
based water treatment chemicals in industrial cooling towers, as a
result of Clean Air Act requirements (see 40 CFR part 63, subpart Q.)
\28\ Furthermore, EPA believes that not only for chromium, but lead
concentrations (which are below the UTS levels in the analysis we
conducted) in the secondary materials will decline with time. This is
due to the overall reduction in the use of these metals throughout the
refinery (e.g., leaded gasoline is no longer produced). In conclusion,
as a result of the additional analysis conducted in response to
commenters concerns regarding the imposition of the UTS requirements,
as well as our decision to amend 40 CFR 261.4(a)(12)(i) because we have
determined that gasifiers are a part of the petroleum refinery process,
the Agency has eliminated the condition requiring material generated by
the gasification system to meet the UTS standards for antimony,
arsenic, chromium, lead, nickel, and vanadium prior to their placement
on the land. As such, oil-bearing hazardous secondary materials
inserted to the gasification system, like other petroleum refining
processes, are excluded from the definition of solid waste, at the
point of generation, provided the conditions of the exclusion are met.
Residuals generated after the gasification process are, therefore,
considered a new point of generation. If a gasifier residual is
determined to be characteristically hazardous, it must be managed as a
hazardous waste (if discarded), including being treated to the UTS.
These standards would require treatment for the characteristic, as well
as any underlying hazardous constituents reasonably expected to be
present. Underlying hazardous constituents include both organic and
inorganic constituents. This is consistent with the current petroleum
refinery exclusion found at 40 CFR 261.4(a)(12)(i), and addresses our
greatest concern--assuring that gasification residues do not create
potential risks when disposed.
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\28\ On September 8, 1994 (59 FR 46339), EPA issued a final MACT
rule that eliminated the use of chromium-based water treatment
chemicals and subsequently chromium compound emissions from
industrial process cooling towers.
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As a final note, the Agency distinguishes between residuals
generated from the gasifier and those residuals generated from the
processing of oil-bearing hazardous secondary materials before they are
reinserted into the petroleum process. EPA discussed in the final rule
for the petroleum refinery exclusion (63 FR 42110, August 6, 1998),
that some oil-bearing hazardous secondary materials cannot be directly
inserted into a particular petroleum refining process, and therefore
may require some type of processing or preparation beforehand (e.g.,
centrifugation, desorption, settling, etc.). See 63 FR at 42113-42114,
42128. These activities are generally viewed as part of normal
petroleum refining operations.
During the 1998 rulemaking, however, we were particularly concerned
with the management of any residuals generated from the processing or
recycling of oil-bearing hazardous secondary materials prior to or
before insertion back to the petroleum refining process, and thus
developed an approach to ensure that if such residuals are discarded,
that they continue to be managed appropriately. In the 1998 final rule,
we clarified that the exclusion for oil-bearing hazardous secondary
materials returned to the petroleum refining process only extends to
the materials actually inserted into the petroleum refinery process,
and any residuals generated from recycling or processing oil-bearing
hazardous secondary materials prior to insertion into the refining
process that: (1) Would have otherwise met a listing description when
originally generated; and (2) are disposed of or intended for disposal,
are designated as F037 waste and must be managed in accordance with all
the applicable Subtitle C RCRA hazardous waste requirements. The
language was
[[Page 67]]
intended to clarify that residuals that are not ultimately inserted are
not excluded, and that these discarded residuals are classified as F037
waste.
The Agency did not include in the F037 listing residuals generated
after reinsertion into the petroleum refining process, e.g., coke fines
from coking operations. These types of residues generated after
insertion into the petroleum refining process, are considered newly
generated waste subject to the characteristic test, and not F037 waste.
This is the exact reasoning we are applying to today's rule, i.e., if
residuals are generated as a result of the processing of oil-bearing
hazardous secondary materials prior to gasification, and if these
residuals are intended for discard and the original oil-bearing
hazardous secondary materials was a listed waste, these residuals are
classified as F037 waste. Similarly, if the original waste exhibited
one or more hazardous waste characteristics, and the processing, prior
to gasification, resulted in a residual destined for disposal, that
residue would be characterized as a newly generated waste, subject to
the characteristic test.
F. Does the Conditional Exclusion Require Additional Recordkeeping and
Reporting Requirements?
No. Under today's rule, no additional recordkeeping or reporting
requirements will be required. Under the exclusion at 40 CFR
261.4(a)(12)(i), oil-bearing hazardous secondary materials are not
solid wastes, for purposes of Subtitle C regulation, and therefore are
not (by definition) hazardous wastes from the point of generation.
Therefore, requirements that normally apply to the management of
hazardous wastes, such as notification or the use of a hazardous waste
manifest, do not apply to these materials, provided the conditions of
the exclusion are satisfied.\29\
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\29\ It should be noted, however, that under 40 CFR 261.2(f)
documentation is necessary to demonstrate that the conditions of an
exclusion have been met. 40 CFR 261.2(f) does not contain specific
record keeping requirements, but it does require the respondent to
bear the burden of showing, through appropriate documentation, that
the excluded material is being processed in a manner that meets the
conditions in the claimed exclusion.
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In the approach used for the proposed rule, oil-bearing hazardous
secondary materials could be processed in a gasification system either
on-site or off-site of a petroleum refinery (i.e., materials could be
sent to gasifiers at facilities that are not located within petroleum
refineries (SIC 2911)). We noted that allowing these materials to go to
facilities outside the petroleum refining industry was somewhat
different and more expansive than what was permitted for the other
processes previously included in 40 CFR 261.4(a)(12)(i). Because of
this expansion, we asked for comment on whether additional records and/
or reporting requirements might be necessary. We proposed this
alternative strategy (i.e., gasification facilities could be located
either on-site or off-site of a petroleum refinery) because we believed
that excluding oil-bearing hazardous secondary materials processed in
gasification systems operating physically outside of a petroleum
refinery could still be an extension of the petroleum refining process.
It is not unusual for the refining of oil into fuels to occur at
multiple locations.
Many commenters generally were supportive of allowing off-site
facilities as part of the exclusion. However, there were some
commenters that strongly believed that gasification should only occur
at a petroleum refinery. Commenters supporting off-site gasification
agreed with the Agency's assessment that any gasification process
operated off-site would be technically indistinguishable from the types
of gasifiers operated at a petroleum refinery. One commenter believed
that generators would be better served by transporting the oil-bearing
hazardous secondary materials to a centralized processing facility for
conversion to synthesis gas, and if the exclusion is not extended to
``off-site'' gasification, the exclusion would be meaningless and have
limited, if any, practical use.
The Agency recognizes and agrees, in part, with the potential
flexibility afforded to petroleum refineries that have an option of
using off-site gasification facilities (i.e., gasification systems not
located at a petroleum refinery). However, we have decided not to
promulgate this aspect of the rule. The Agency has concluded that a
gasification operation located off-site of a petroleum refinery is
inconsistent with our basic premise for promulgating this exclusion--
gasification is a part of the petroleum refining process. As such, EPA
is electing to simplify its approach today by allowing this exemption
only for facilities that clearly meet the definition of petroleum
refineries.\30\ It should be noted, however, that under the provisions
of the exclusion, oil-bearing hazardous secondary materials may be
inserted into the same petroleum refinery where they are generated, or
sent directly to another petroleum refinery, and still be excluded
under this provision.\31\
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\30\ It should be noted that petroleum refineries that ship oil-
bearing hazardous secondary materials to an off-site gasification
system not located at a petroleum refinery (SIC 2911) would not meet
the conditions of this exclusion and would be subject to the
appropriate Subtitle C regulations. See, for example, the Synthesis
Gas Rule at 40 CFR 261.38(b). Furthermore, a gasification facility
that accepts oil-bearing hazardous secondary materials from a
petroleum refinery can not claim to be part of the petroleum
refining process and utilize this exclusion, even if the synthesis
gas is sent back to the petroleum refinery for use. However, we do
recognize that there will be situations where petroleum gasification
facilities are built in close proximity (e.g., adjoining land) and
are part of the petroleum refining facility. In general, such
facilities would be within the scope of the exemption being
promulgated today.
\31\ See the February 8, 2002 letter from Mr. Robert Springer,
Director of the Office of Solid Waste to Mr. Rob Short, Managing
Director Tetra Process Services, L.C. In this letter, Mr. Short
posed twelve detailed questions concerning the regulatory status of
oil-bearing hazardous secondary materials under the RCRA.
Specifically, clarification was requested on numerous aspects of the
exclusion at 40 CFR 261.4(a)(12)(i).
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VI. What Will the Effect of the Final Rule Be on Recycling and Energy
Recovery?
Predicting the impacts of any rule is a difficult task. In most
cases, the marketplace determines the adoption of new technologies and/
or practices. In the case of gasification, it is doubly difficult as
both the waste management market and the fuels market will impact
adoption of the technology more than any regulatory provision. Today's
conditional exclusion provides operators of petroleum refineries an
option to consider. This does not mean that every petroleum refinery
will adopt this technology as part of their operations, but it may mean
that some will adopt the technology to provide for power or steam
production less expensively, or for the generation of hydrogen used
elsewhere in the petroleum refining process, or sold as a fuel or
feedstock. What the rule does do is provide operational flexibility to
allow petroleum refiners to adopt a technology that generates valuable
products as a result of processing oil-bearing hazardous secondary
materials that can and have historically been managed as solid and
hazardous waste. With this rulemaking, petroleum refiners can decide
whether to invest in the development of gasification with the knowledge
that it will also allow them to increase their production efficiency
and reduce their costs through the conversion of these materials.
VII. How Will These Regulatory Changes Be Administered and Enforced in
the States?
Under section 3006 of RCRA, EPA may authorize qualified states to
administer their own hazardous waste
[[Page 68]]
programs in lieu of the federal program within the state. Following
authorization, EPA retains enforcement authority under sections 3008,
3013, and 7003 of RCRA, although authorized states have primary
enforcement responsibility. The standards and requirements for state
authorization are found at 40 CFR Part 271.
Prior to enactment of the Hazardous and Solid Waste Amendments of
1984 (HSWA), a state with final RCRA authorization administered its
hazardous waste program entirely in lieu of EPA administering the
federal program in that state. The federal requirements no longer
applied in the authorized state, and EPA could not issue permits for
any facilities in that state, since only the state was authorized to
issue RCRA permits. When new, more stringent federal requirements were
promulgated, the state was obligated to enact equivalent authorities
within specified time frames. However, the new federal requirements did
not take effect in an authorized state until the state adopted the
federal requirements as state law.
In contrast, under RCRA section 3006(g) (42 U.S.C. 6926(g)), which
was amended by HSWA, new requirements and prohibitions imposed under
HSWA authority take effect in authorized states at the same time that
they take effect in unauthorized states. EPA is directed by the statute
to implement these requirements and prohibitions in authorized states,
including the issuance of permits, until the state is granted
authorization to do so. While states must still adopt HSWA related
provisions as state law to retain final authorization, EPA implements
the HSWA provisions in authorized states until the states do so.
Authorized states are required to modify their programs only when
EPA enacts federal requirements that are more stringent or broader in
scope than existing federal requirements. RCRA section 3009 allows the
states to impose standards more stringent than those in the federal
program (see also 40 CFR 271.1). Therefore, authorized states may, but
are not required to, adopt federal regulations, both HSWA and non-HSWA,
considered less stringent than previous federal regulations.
Today's exclusion is finalized pursuant to non-HSWA authority and
is considered to be less stringent than the current federal
requirements. Therefore, states will not be required to adopt and seek
authorization for the finalized changes. EPA will implement the changes
to the exemptions only in those states which are not authorized for the
RCRA program. Nevertheless, EPA believes that this rulemaking has
considerable merit, and we thus strongly encourage states to amend
their programs and become federally-authorized to implement this rule.
VIII. What Are the Costs and Benefits of the Final Rule?
The costs and benefits of any regulatory action are traditionally
measured by the net change in social welfare that it generates. The
Agency's economic assessment conducted in support of today's final rule
evaluates costs, cost savings (benefits), waste quantities affected,
and other impacts, such as environmental justice, children's health,
unfunded mandates, regulatory takings, and small entity impacts. To
conduct this analysis, we prepared a baseline characterization for
waste management and gasification at petroleum refineries, developed
and implemented a methodology for examining impacts, and followed
appropriate guidelines and procedures for examining equity
considerations, children's health, and other impacts. Because EPA's
data are limited, the estimated findings from these analyses should be
viewed as national, not site-specific impacts.
Proper baseline specification is vital in the assessment of
incremental costs, benefits, and other economic impacts associated with
a rule that would expand the exclusion for oil-bearing hazardous
secondary materials that are utilized to generate fuels and other
chemicals. The baseline essentially describes the world absent any
expanded exclusion. The incremental impacts of today's final rule are
evaluated by predicting post-rule responses with respect to baseline
conditions and actions. The baseline, as applied in this analysis, is
assumed to be the point at which the final rule is published. A full
discussion of baseline specifications is presented in the economic
assessment document completed for this rule.\32\
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\32\ Assessment of the Potential Costs, Benefits, and Other
Impacts of the Exclusion for Gasification of Petroleum Oil-Bearing
Secondary Materials--Final Rule, August 2007.
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As outlined above, the final rule creates an exclusion for oil-
bearing hazardous secondary materials generated at a petroleum refinery
if this material is used at a petroleum refinery as an input for the
production of synthesis gas. Because not all petroleum refineries will
elect to include a gasification system as part of their petroleum
refinery, the impacts of the final rule will depend significantly on
the number of petroleum refineries that decide to adopt the technology
and use the exclusion and the baseline waste management practices of
these petroleum refineries. To account for these factors in this
analysis, a bottom-up analytic approach was developed for estimating
impacts based on the decisions of individual petroleum refineries to
exclude or not exclude their oil-bearing hazardous secondary materials
under the final rule. The analysis of each affected petroleum refinery
begins by estimating the likely costs and benefits associated with its
potential use of the exclusion. A key assumption of the analysis is
that a petroleum refinery will divert its oil-bearing hazardous
secondary materials to gasification if the following two conditions
apply: (1) The benefits realized by the petroleum refinery if it uses
the exclusion exceed the related costs, and (2) the benefits realized
by the gasification system receiving the petroleum refinery's oil-
bearing hazardous secondary materials exceed the costs associated with
accepting this material.
After determining whether a petroleum refinery is likely to divert
its oil-bearing hazardous secondary materials to gasification, we
estimate the total impacts associated with its decision to use or not
use the exclusion. If the petroleum refinery is unlikely to use the
exclusion, we assume zero impacts. If the analysis suggests that the
petroleum refinery will use the exclusion, we estimate impacts as the
sum of three items: (1) The savings that the petroleum refinery will
experience by diverting its oil-bearing hazardous secondary materials
to gasification, (2) savings for the petroleum refinery that receives
this material and uses it as a feedstock in its gasification system,
and (3) indirect third-party costs. Indirect third-party costs include
increased virgin fuel and material costs for facilities that receive
and manage the petroleum refinery's oil-bearing hazardous secondary
materials in the baseline (i.e., prior to the promulgation of the final
rule) and either burn it for energy recovery or recycle it to recover
metals or other valuable materials.
To complete our analysis and estimate the total impacts of the
final rule, we summed the impacts associated with oil-bearing hazardous
secondary materials diverted to gasification under the exclusion. In
addition, we assessed the impacts of the rule under two scenarios to
account for uncertainty in the operational status of gasification
systems that are planned, but have not yet gone online: a low-capacity
scenario reflecting existing gasification capacity
[[Page 69]]
and a high-capacity scenario reflecting existing and planned capacity.
This rule is projected to result in a benefit to society in the
form of net cost savings to the private sector, on a nationwide basis,
thereby allowing for the more efficient use of limited resources
elsewhere in the market. For more detail regarding the data sources,
key assumptions, and any limitations associated with the analyses of
the economic impacts, the reader is referred to the economic assessment
document completed for this rule, which can be found in the docket to
this rulemaking.
As described in the methodology overview in EPA's economic
assessment document, we estimated the impacts of the final rule under
two gasification capacity scenarios: (1) A low-capacity scenario that
reflects the capacity of the three petroleum refinery gasification
systems that are known to be operating; and (2) a high-capacity
scenario that reflects the capacity of these three systems plus two
additional units that were planned as of 2003, but have not yet gone
online. Results for both of these scenarios are presented as a range of
the potential net social benefits of the rule, in order to help account
for the uncertainty regarding the future operational status of planned
units not yet in operation.\33\
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\33\ The IGCC unit located at the El Dorado, Kansas Refinery was
used as part of this analysis. However, as of 2006, this unit is no
longer in operation.
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The central conclusion of our analysis states that approximately
324,300 tons of oil-bearing hazardous secondary materials generated by
152 refineries would qualify for the exclusion each year. Of this
quantity, petroleum refineries currently send approximately 205,500
tons offsite for disposal or recycling; the remaining 118,800 tons are
processed onsite. Of the 324,300 tons of oil-bearing hazardous
secondary materials qualifying for the exclusion, between 123,300 and
177,000 tons are likely to be excluded by petroleum refineries each
year. This represents approximately 38 percent to 55 percent of the
material eligible for the exclusion.
We estimate that the rule will yield between $46.4 million and
$48.7 million in net social benefits per year. Avoided waste management
costs make up the most significant share of the benefits of the rule,
followed by feedstock savings for gasification systems. Commercial
waste management facilities that manage oil-bearing hazardous secondary
materials in the baseline may experience annual revenue losses of $10.8
million to $15.1 million under the final rule. Based on the limited
data available on the revenues of these facilities, this loss
represents a small fraction of their revenues. The impact of the final
rule depends significantly on the cost of incineration. The impacts
reflect the average cost of incinerating bulk sludge, as reported by
the Environmental Technology Council (ETC). If we use the low end of
ETC's cost range, the net social benefits of the rule decline to $5.2
million to $25.5 million per year.\34\
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\34\ ETC, Incinerator and Landfill Cost Data, http://www.etc.org/costsurvey8.cfm
, accessed September 8, 2006.
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IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is a ``significant regulatory action.'' It has been determined
that this rule is a ``significant regulatory action'' because it raises
novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order. Accordingly, EPA submitted this rule to the Office of Management
and Budget (OMB) for review under Executive Order 12866 and any changes
made in response to OMB recommendations have been documented in the
docket for this action.
In addition, EPA prepared an analysis of the potential costs and
benefits associated with this action. As indicated above, the annual
cost savings of the rule are estimated to be $46.4 million to $48.7
million. This analysis is contained in the document ``Assessment of the
Potential Costs, Benefits, and Other Impacts of the Exclusion for
Gasification of Petroleum Oil-Bearing Secondary Materials--Final
Rule.'' A copy of the analysis is available in the docket for this
regulation.
B. Paperwork Reduction Act
This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
EPA is amending an existing exclusion from the definition of solid
waste that applies to hazardous secondary materials generated at a
petroleum refinery when these materials are inserted back into the
petroleum refining process (see current exclusion found at 40 CFR
261.4(a)(12)(i)). With today's final rule, the conditional exclusion
will be revised to add ``gasification'' to the list of identified
petroleum refinery processes into which hazardous secondary materials
can be legitimately recycled. Materials excluded under 40 CFR
261.4(a)(12)(i) are not solid wastes for purposes of Subtitle C
regulation, and therefore are not (by definition) hazardous wastes from
the point of generation. Therefore, requirements that normally apply to
the management of hazardous wastes, such as notification or the use of
a hazardous waste manifest, do not apply to these materials, provided
the conditions of the exclusion are satisfied.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information. An agency may not
conduct or sponsor, and a person is not required to respond to a
collection of information unless it displays a currently valid OMB
control number. The OMB control numbers for EPA's regulations in 40 CFR
are listed in 40 CFR Part 9.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq, generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act, or any
other statute. This analysis must be completed unless the agency is
able to certify that the rule will not have a significant economic
impact on a substantial number of small entities. Small entities
include small businesses, small not-for-profit enterprises, and small
governmental jurisdictions.
For purposes of assessing the impacts of today's rule on small
entities, small entities are defined as: (1) A small business as
defined by the Small Business Administration's (SBA) regulations at 13
CFR 121.201; (2) a small governmental jurisdiction that is a government
of a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently
[[Page 70]]
owned and operated and is not dominant in its field.
After considering the economic impacts of today's rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604.
Thus, an agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule
relieves regulatory burden, or otherwise has a positive economic effect
on all of the small entities subject to the rule.
The final rule is projected to result in benefits/cost savings for
those petroleum refineries that use the exclusion. In addition, those
petroleum refineries that choose not to take advantage of the subject
exclusion would experience no direct impact from this final rule.
Consequently, the rule is not expected to adversely affect small
entities that generate oil-bearing hazardous secondary materials
eligible for the exclusion. Nevertheless, we developed facility-
specific impact estimates for petroleum refineries that may be
classified as small entities to show how they would likely benefit from
the final rule. The SBA considers a petroleum refinery to be a small
business if it has ``no more than 1,500 employees or more than 125,000
barrels per calendar day total Operable Atmospheric Crude Oil
Distillation capacity.'' Based on the available data, it is not
feasible to measure the distillation capacities of each refinery
affected by the rule; therefore, we relied on facility employment data
to determine which petroleum refineries are small entities. Our
analysis of employment data suggests that 37 of the 152 refineries
affected by the rule are small entities.
The benefits (cost savings) of the final rule on each small
business are expected to range from $0 to $2.0 million per year. It is
further estimated that the aggregate small entity impacts total $2.1
million to $2.5 million per year in cost savings, which represents 4.3
to 5.4 percent of the annual impact of the final rule. Similarly, the
quantity of material eligible for the exclusion that is generated by
small businesses, 16,895 tons, accounts for 5.2 percent of the total
oil-bearing hazardous secondary materials tonnage eligible for the
exclusion. We have therefore concluded that today's final rule will
relieve regulatory burden for affected small entities.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
Based on these criteria set forth by the UMRA, the final rule does
not contain a significant unfunded mandate. As reported in the analytic
results presented above, the rule is not likely to result in annualized
costs of $100 million or more, either for the private sector or for
state, local, and tribal governments.
Today's rule contains no federal mandates (under the regulatory
provisions of Title II of the UMRA) for state, local, or tribal
governments or the private sector, as the rule imposes no enforceable
duty on any State, local or tribal governments or the private sector.
Furthermore, EPA has determined that this rule contains no regulatory
requirements that might significantly or uniquely affect small
governments. Thus today's rule is not subject to the requirements of
sections 202 and 205 of UMRA.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999) requires EPA to develop an accountable process to ensure
``meaningful and timely input by state and local officials in the
development of regulatory policies that have Federalism implications.''
``Policies that have Federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government.''
This final rule does not have Federalism implications. It will not
have substantial direct effects on the states, on the relationship
between the national government and the states, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132, because it will not impose any
requirements on states or any other level of government. Thus, the
requirements of Section 6 of the Executive Order do not apply to this
rule.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
With Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This final rule does not have
tribal implications, as specified in Executive Order 13175. No Tribal
governments are known to own or operate petroleum refineries that
generate oil-bearing hazardous secondary materials subject to the final
rule. Thus, Executive Order 13175 does not apply to this rule.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
Executive Order 13045, ``Protection of Children From Environmental
Health
[[Page 71]]
Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies to any
rule that: (1) Is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that are based on health or safety risks, such that
the analysis required under section 5-501 of the Order has the
potential to influence the regulation. This final rule is not subject
to Executive Order 13045 because it does not establish an environmental
standard intended to mitigate health or safety risks.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This rule is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)), because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. On the contrary,
this rule is expected to result in energy savings, as described below.
EPA estimates that of the 324,300 tons of oil-bearing hazardous
secondary material qualifying for the exclusion, approximately 36,735
tons are currently managed through energy recovery in the baseline.
Based on the results of our analysis, we estimate that between 3,700 to
18,700 tons of the 36,735 tons currently being reported as being
recovered (e.g., managed) for energy recovery will be diverted to
gasification at petroleum refineries as a result of the final rule.
This represents an energy loss of 19,800 to 101,300 MMBtu for
facilities that manage this material for energy recovery in the
baseline. This is the equivalent of 3,400 to 17,500 barrels of crude
oil per year.\35\ The petroleum refineries that gasify this oil-bearing
hazardous secondary material under the final rule, however, would use
the resulting synthesis gas as a fuel for the production of power or
other petroleum products, which would (at least partially) offset the
19,800 to 101,300 MMBtu energy loss mentioned above. Moreover,
gasification of the 119,600 to 158,300 tons of excluded material not
burned for energy recovery in the baseline would yield additional
energy savings. Assuming that all of the energy content of this
material is retained in the resulting synthesis gas, the gasification
of this material represents energy savings of 648,300 to 858,000 MMBtu
per year. Therefore, accounting for the estimated energy loss of 19,800
to 101,300 MMBtu associated with oil-bearing hazardous secondary
materials burned for energy recovery in the baseline, this rule could
yield a net energy savings ranging from 628,500 to 756,700 MMBtu per
year.
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\35\ According to the U.S. Energy Information Administration
(EIA) Annual Energy Outlook 2006, Table A2, one barrel of crude oil
produced has a heat content of 5.8 million Btu.
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I. National Technology Transfer and Advancement Act of 1995
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. The NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
The final rule does not involve technical standards. Therefore, EPA
did not consider the use of any voluntary consensus standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment.
Under the final rule, EPA estimates that 123,000 to 177,000 tons of
oil-bearing hazardous secondary materials will be diverted to
gasification processes from their baseline disposition at hazardous
waste treatment, storage, and disposal facilities (TSDFs). As such, the
final rule will concentrate the processing of excluded material at the
limited number of petroleum refineries that could potentially use this
material as a feedstock under the final rule. However, EPA does not
believe that gasification of this material represents a greater risk to
the public than baseline management practices. Rather than managing the
excluded material as hazardous waste and transporting it to more widely
dispersed TSDFs, as is currently the case (e.g., under the baseline),
the final rule would help limit distribution of these materials such
that they are instead managed at their source of generation (e.g.,
petroleum refineries).
EPA also assessed the demographic characteristics of populations
living within a one-mile radius of petroleum refineries with
gasification systems using geo-coded data from the U.S. Census Bureau.
This analysis shows that the areas surrounding gasification systems
affected by the rule have disproportionately high minority and low-
income populations when compared to the national average. However,
based on a number of published studies, areas in close proximity to
TSDFs and combustion facilities also have disproportionately high
minority and low-income populations that are similar to or greater than
those of petroleum refineries with gasification systems. For instance,
among the individuals living within one mile of the existing and
planned gasification systems included in our analysis, 15.8 percent are
low-income individuals, compared to 15.7 percent and 22.3 percent near
TSDFs and hazardous waste combustion facilities, respectively.
Similarly, 28.1 percent of the individuals living near existing and
planned gasification systems are minorities, compared to 27.2 percent
living near TSDFs and 38.3 percent living near hazardous waste
combustion facilities. These findings show that the percentages of low-
income and minority populations near TSDFs are similar to or greater
than those of populations living near petroleum refineries with
gasification systems.
The implication of our analyses is that low-income and minority
populations
[[Page 72]]
will not bear a disproportionate share of any human health or
environmental effects associated with shifting the processing of
excluded oil-bearing hazardous secondary materials to gasification
systems. Furthermore, as less oil-bearing hazardous secondary materials
will be received by TSDFs and hazardous waste combustion facilities,
low-income and minority populations living near these facilities would
likely experience a potential reduction in risk under the final rule.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996,
generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A major rule
cannot take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective February 1, 2008.
List of Subjects
40 CFR Part 260
Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous waste, Reporting and
recordkeeping requirements.
40 CFR Part 261
Excluded hazardous waste, Hazardous waste, Recycling, Reporting and
recordkeeping requirements.
Dated: December 20, 2007.
Stephen L. Johnson,
Administrator.
0
For the reasons set out in the preamble, 40 CFR chapter I is amended as
follows:
PART 260--HAZARDOUS WASTE MANAGEMENT SYSTEM; GENERAL
0
1. The authority citation for part 260 continues to read as follows:
Authority: 42 U.S.C. 6905, 6912(a), 6921-6927, 6930, 6934, 6935,
6937, 6938, 6939, and 6974.
Subpart B--Definitions
0
2. Section 260.10 is amended by adding in alphabetical order the
definition of ``Gasification'' to read as follows:
Sec. 260.10 Definitions.
* * * * *
Gasification. For the purpose of complying with 40 CFR
261.4(a)(12)(i), gasification is a process, conducted in an enclosed
device or system, designed and operated to process petroleum feedstock,
including oil-bearing hazardous secondary materials through a series of
highly controlled steps utilizing thermal decomposition, limited
oxidation, and gas cleaning to yield a synthesis gas composed primarily
of hydrogen and carbon monoxide gas.
* * * * *
PART 261--IDENTIFICATION AND LISTING OF HAZARDOUS WASTE
0
3. The authority citation for part 261 continues to read as follows:
Authority: 42 U.S.C. 6905, 6912(a), 6921, and 6938.
0
4. Section 261.4 is amended by revising paragraph (a)(12)(i) to read as
follows:
Sec. 261.4 Exclusions.
(a) * * *
(12)(i) Oil-bearing hazardous secondary materials (i.e., sludges,
byproducts, or spent materials) that are generated at a petroleum
refinery (SIC code 2911) and are inserted into the petroleum refining
process (SIC code 2911--including, but not limited to, distillation,
catalytic cracking, fractionation, gasification (as defined in 40 CFR
260.10) or thermal cracking units (i.e., cokers)) unless the material
is placed on the land, or speculatively accumulated before being so
recycled. Materials inserted into thermal cracking units are excluded
under this paragraph, provided that the coke product also does not
exhibit a characteristic of hazardous waste. Oil-bearing hazardous
secondary materials may be inserted into the same petroleum refinery
where they are generated, or sent directly to another petroleum
refinery and still be excluded under this provision. Except as provided
in paragraph (a)(12)(ii) of this section, oil-bearing hazardous
secondary materials generated elsewhere in the petroleum industry
(i.e., from sources other than petroleum refineries) are not excluded
under this section. Residuals generated from processing or recycling
materials excluded under this paragraph (a)(12)(i), where such
materials as generated would have otherwise met a listing under subpart
D of this part, are designated as F037 listed wastes when disposed of
or intended for disposal.
* * * * *
[FR Doc. E7-25240 Filed 12-31-07; 8:45 am]
BILLING CODE 6560-50-P