best practices for the petroleum industry - Caribbean Environmental ...

Prefacexinot to pay for themselves. Corporate mentality is such that investments typicallymust earn an adequate return on invested capital for the shareholders and somepollution prevention options at some facilities may not meet the requirements setby the companies. In addition, the equipment used in the petroleum refiningindustry is very capital intensive and has very long lifetimes. This reduces theincentive to make process modifications to (expensive) installed equipment thatis still useful.What is often missed is the fact that pollution prevention techniques are oftenmore cost-effective than pollution reduction through end-of-pipe treatment.This is best understood when consideration is given to indirect cost savings.Indirect cost savings include: reduced healthcare costs from less exposure to airpollution; reduced threat from litigations for property damages, medicalmonitoring, and health claims by citizens who have been exposed to pollution;greater investor confidence (direct correlation between stock prices on the DowJones Industrials have been linked to reported reductions in emissions fromcompany Toxic Release Inventory reporting). A further example is a case studybased on the Amoco/Environmental Protection Agency (EPA) joint study, whichclaimed that the same pollution reduction currently realized through end-of-piperegulatory requirements at the Amoco facility could be achieved at 15% of thecurrent costs using pollution prevention techniques.In addition to the general discounting of indirect cost savings, today’s regulatoryincentives to invest in cleaner production technologies are poor. Considerthe following:The 1990 Clean Air Act Amendments intended to encourage voluntary reductionsabove the regulatory requirements by allowing facilities to obtain emission creditsfor voluntary emissions reductions. These credits were to serve as offsets against anypotential future facility modifications resulting in an increase in emissions. Otherregulations established by the amendments, however, require the construction ofmajor new units within existing refineries to produce reformulated fuels. But thesenew operations require emission offsets in order to be permitted. This is counterproductivebecause it consumes many of the credits available for existing facilitymodifications. Thus a shortage of credits for facility modifications makes it difficultto receive credits for emission reductions through pollution prevention projects.Under the Clean Water Act, discharge of water-borne pollutants is limited by NPDESpermits. Refineries that meet their permit requirements often have their permit limitschanged to lower values. Because system upsets occur, resulting in significantexcursions above the normal performance values, many refineries believe they mustmaintain a large operating margin below the permit limits in order to ensurecontinuous compliance. Refineries that can significantly reduce water-borne emissionsare faced with the risk of having their permit limits lowered, which isa disincentive.Wastes failing a Toxicity Characteristic (TC) test are considered hazardous under theResource Conservation and Recovery Act (RCRA). There is less incentive fora refinery to attempt to reduce the toxicity of such waste below the TC levels because,even though such toxicity reductions may render the waste non-hazardous, suchwaste may still have to comply with new land disposal treatment standards under