Life and near-death for oilman in round - Downstream Magazine

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Environmental regulation Do I need a permit? BUSINESSES CONNECT WITH THE environment by either using natural resources for production processes and/or through emissions to land, air and water. Sound environmental management of processes is a core business issue that can help promote a company's products and services and improve its corporate standing. Permits for discharge to public foul sewer, groundwater and surface waters play a very important role in the environmental management of oil depots and petrol filling stations and for ensuring they comply with the most recent legislation. However, the application procedure and associated monitoring of permits are often regarded as complex and difficult to comprehend. It doesn’t help that the Regulations change often, including changes of name and responsibilities. Do I need a permit? Clients often ask us if they need a permit for their site. Any discharges into controlled waters (groundwater, rivers, streams, ditches and estuaries) and the public foul sewer system, need a permit. This would include discharges to controlled waters through a pipe, drains, an open channel, an infiltration system or an oil separator. Only if the water is clean – surface run-off, for example, from a roof, road, pathway or clean hard standing area – will you not need an environmental permit. In all other cases, you will need a permit from your local sewerage company or the Environment Agency. Discharges to public waste systems For discharges to the public foul sewer, the Water Industry Act 1991 states that any liquid produced as a result or as a part from any trade or business activity carried out on your trade premises qualifies as ‘trade effluent’ and therefore requires consent from your local sewerage company. Discharges to controlled waters For discharges to controlled waters (groundwater and surface waters), you need permission from the Environment Agency. The latest legislation PETER MULDER, Environmental Monitoring Manager for OHES Environmental, discusses how the Environmental Permitting Regulations including the recent amendments could affect your business (Environmental permitting Regulations 2010) was introduced in April 2010 and all consents and permits are now referred to as Environmental Permits. There are two different types of permits under EPR 2010: standard and bespoke, as well as the option to register for an exemption. As the name suggests, standard permits have fixed rules for very common activities. The application process is relatively simple and these permits often have lower fixed charges but are only available for a few industry types that can meet the requirements. Bespoke permits are written specifically for a business activity and tend to be more complex and expensive. Most of the petrochemical industry, including the production of biodiesel, will require bespoke permits. Finally, exemptions are for activities that don’t need a permit. Exemptions need to be registered and are generally free. Examples are some small effluent discharges (below 5 cubic metres per day for discharge to surface waters), as well as some farm and waste activities. Surface water drainage systems Only clean, uncontaminated surface water should go to the surface water drainage system and no trade effluent or contaminated water discharge should be made to this system. This includes vehicle washes and condensate from boiler systems. It is the site owner’s responsibility to ensure drains on his site are identified correctly and any trade effluent discharge directed to the foul sewer with the appropriate permit. Surface water run-off which may be contaminated with oil, i.e. from loading and unloading areas or areas where tankers are parked up, should drain through an oil separator. The Environment Agencies publish guidelines on the selection and installation of oil separators (PPG3). The subsequent discharge from the separator will require a permit. The permit is likely to incorporate quality conditions and it will be a criminal offence to breach these conditions. It is essential therefore that the oil separator is inspected, maintained, emptied (and refilled) on a regular basis and that the discharge from the separator is monitored to ensure compliance. Good housekeeping can reduce maintenance intervals and also minimise the risk of a compliance failure. Environmental Monitoring Permit holders are often encouraged to set up self-monitoring programmes. This can help them monitor the whole process rather than just the end of the pipe, assisting them with the early detection of problems and helping to pinpoint the cause. The EPR 2010 regulations have put a greater emphasis on encouraging operators to take responsibility. Greater emphasis is placed on management systems and using Environment Agency industry-specific guidance such as the ‘How to comply’ and Pollution Prevention Guidance. The bigger picture By introducing Operator Self Monitoring, the Environment Agency is moving to an auditing role and will spend more time and resource investigating water quality problems. This could mean that any discharges, permitted or unpermitted, that cause deterioration are now more likely to be found out. Because the application and compliance monitoring of environmental permits can be a complex procedure and, with so much at stake, many companies choose to bring in external consultants, such as the ex-regulatory specialists from OHES, to help ensure they get it right. MORE INFORMATION www.ohes.co.uk Downstream Winter 2010 20 www.downstreammagazine.co.uk
OPEC at 50 CELEBRATING ITS 50TH BIRTHDAY this year, OPEC (Organization of the Petroleum Exporting Countries) has enjoyed prices in a prevailing $70 80/bbl range through most of 2010. This is largely thanks to the decision taken at the end of 2008 to cut production by 4.2 million bpd from the levels that had been pumped in September that year. OPEC Secretary General Abdullah Al‐Badri said in September that the decision was the best OPEC had ever taken. At the March meeting in Vienna, Saudi oil minister Ali Naimi described oil prices as ‘beautiful’ and the word ‘cheating’ was barely pronounced, even though the group’s members were only around 50% compliant with their targeted production cuts at the time. As is customary at 50 th birthdays (OPEC was founded on September 14 1960 by a nucleus of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela), the usual plaudits from inside and outside the organisation rolled in, celebrating the successes of the producers’ group and its new‐found ‘maturity’. Even BP sent a letter, despite the major’s woes in the US, where some people still want to sue OPEC for alleged ‘cartel’ behaviour. Politeness is customary on such occasions, and particularly when the 50‐year old concerned is sitting on two thirds of the world’s known oil reserves and a large portion of its natural gas. But such anniversaries are often bitter‐sweet for the celebrants. 2010 has been a success for OPEC, but it has been at the expense of the group’s largest member slipping into second place in the league table of oil producers. Russia, which was expected to support OPEC’s bid to boost prices in December 2008, did nothing of the sort, and its output has soared to above 10‐million bpd, nearly 2‐million bpd more than Saudi Arabia, which has invested hundreds of billions of dollars in boosting capacity to what it claims is Challenges ahead 12.5‐million bpd. OPEC had to swallow hard and bite its lip. Russia’s action was perceived as a betrayal, and was galling for the kingdom. OPEC’s Badri mentioned Russian production again and suggested the country will need to ‘slow down a little’ on production at some point. Despite the current stability, the future of the group is by no means assured. So long as prices are in the desired band as now (Nov Brent $78.95, Oct WTI $74.55 1400 London) historical frictions between various member factions are likely to remain under the surface. 2011 is likely to be more challenging, perhaps even for OPEC unity. The Secretary General, speaking on OPEC's 50 th anniversary, said the first half of next year would be difficult. “We are walking a very thin line," Badri told Reuters news agency in an interview. Of OPEC’s 11 members bound by quotas, only three have a compliance rate of above 70% (Kuwait, Saudi Arabia, UAE). Other members don’t even seem to feel the need to be seen to be trying, and Angola had effectively repudiated its quota within two years of joining the OPEC party. If prices gradually fall to $60/bbl next year, as some forecasters predict based on the fundamentals, including 20¬year high oil stocks in the US, OPEC may find it more difficult to tighten compliance than in Dec 2008, when it was effectively threatened by a catastrophe. Whereas $30/bbl oil prices hurt all members, wonderfully concentrating minds at the time, the various members have different budgetary needs and unity may be more difficult to achieve were prices to fall, but less severely. No‐one knows at what price decisive action would be triggered. OPEC members also have different agendas in the case of high oil prices. When oil prices rose above $100/bbl in 2008, OPEC proved chronically unable to control the upside, as Saudi Arabia’s belated attempt to pump more oil proved. Although it is in a better position now, with some 6‐million bpd of spare capacity if needed, not all members will want to act if history repeats itself. Poorer members with smaller reserves may prefer to take the money and run. It may be that Saudi Arabia will act unilaterally in such circumstances, but that is politically a problem in itself. The kingdom fears that too high oil prices will speed up the development of alternatives to oil, and is likely to open the taps if prices start to sky‐rocket. While Saudi Arabia’s dominant role has undoubtedly made OPEC more effective as a group, this is not the same as saying that the group is internally cohesive. Politics have always been as important as commerce in OPEC’s internal Even without Saddam Hussein, the triangle of relationships between Iran, Saudi Arabia and Iraq is still as complex, and potentially unstable, as ever Article by KBC Energy Economics wrangles. The last couple of years have indeed seen a more pragmatic OPEC, more effective and more convincing, and Saudi Arabia’s oil minister Ali Naimi has had a lot to do with this. But while OPEC celebrates its 50 th birthday, the minister has recently celebrated his 75 th . Everyone has to retire some time, and we should remember that the new ‘pragmatism’ has been the exception rather than the rule in a long‐term perspective. At some point, also, Iraq will come back into the spotlight. The one OPEC member that currently does not fall within the quota system is potentially the group’s second largest producer. Indeed, Iraq itself claims it will be able to pump 12‐million bpd in the long run, and pitched for a 4‐million bpd quota at the spring meeting in Vienna. Even without Saddam Hussein, the triangle of relationships between Iran, Saudi Arabia and Iraq is still as complex, and potentially unstable, as ever. MORE INFORMATION Peter Stewart +44 (0)1932 236334 www.kbcat.com/Products-and- Services/Energy-Economics/ Downstream Winter 2010 21 www.downstreammagazine.co.uk
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Life and near-death for oilman in round - Downstream Magazine

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