Petroleum Refineries Air Regulation

Petroleum refineries confront some of the most complex air quality regulatory requirements under state and federal law. The professionals at MGKF have extensive experience assisting refineries to address the myriad of federal and state air quality requirements that they face on a daily basis. Our unique, in-depth knowledge of refinery operations allows MGKF to provide our refinery clients with sophisticated and efficient legal services in a wide range of disciplines, including permitting, compliance counseling, enforcement, and regulatory development.

Permitting: At MGKF, we recognize that obtaining air quality permits that provide necessary operational flexibility is critical for refinery operations. We also appreciate that obtaining these permits in a timely manner is equally important. Our professionals have extensive experience with the entire permitting process, from preparing the application, to negotiating with permit writers, to—if necessary—appealing objectionable permit terms. During the permitting process, we work closely with refinery operators to identify and present all potential operational scenarios and emission estimates in support of permits authorizing a wide range of operational units. For example, we have serviced permits for crude units, cokers and cat-crackers (full burn and partial burn), sulfur recovery units, petroleum coke storage and handling systems, gasifiers, wastewater treatment systems, and the heaters and boilers critical to refinery operations.

Often, the construction or modification of refinery units may implicate the Nonattainment New Source Review ("NNSR") and Prevention of Significant Deterioration ("PSD") programs. We have evaluated NNSR/PSD applicability for numerous refinery projects, performing complex netting analyses and advising clients concerning NNSR/PSD compliance options.

Our attorneys are also very knowledgeable in other federal- and state-based control requirements imposed by the wide range of air quality permitting programs potentially applicable to refinery operations, including minor new source review and Title V programs.

Compliance Counseling: The complex web of operational, monitoring, and reporting requirements imposed upon petroleum refineries on a daily basis presents unique challenges for refinery operators wishing to maintain consistent compliance. In working closely with petroleum refineries, our attorneys have developed significant experience with the unique and expansive set of federal and state air quality requirements applicable to refinery operations. Our professionals have provided compliance assistance for refinery units regulated by federal-based New Source Performance Standards ranging from refinery fuel gas combustion devices and other units subject to Subpart J, boilers subject to Subpart Db, storage vessels subject to Subpart Kb, units subject to the SOCMI equipment leak standards of Subpart VV, and wastewater systems subject to Subpart QQQ. We have also supplied compliance advice related to National Emissions Standards for Hazardous Air Pollutants ("NESHAPs") applicable to refinery operations such as MACT 1, MACT 2, and the Benzene NESHAP. We also recognize the importance of state-specific requirements, and our attorneys have worked effectively with state regulators to achieve desirable results for our clients.

Enforcement: Federal and state agencies have targeted the petroleum refinery industry for aggressive enforcement action. At the federal level, we have represented major refineries in negotiations with the U.S. Department of Justice ("DOJ"), U.S. Environmental Protection Agency ("EPA"), and state officials to execute federal consent decrees under EPA's national petroleum refinery enforcement initiative. We have also negotiated high-profile consent decrees with EPA and state agencies entered in response to major environmental incidents. Additionally, we have represented refineries in responding to enforcement actions by state agencies that encompass virtually all aspects of refinery operations.

Further, while we recognize the benefits of cooperation with an agency during an enforcement effort, we have the resources and experience to respond vigorously through administrative or civil litigation if appropriate. The attorneys in our air practice have many years of litigation experience before administrative tribunals, and in trial and appellate courts at both the state and federal levels. Moreover, under certain matters, the air practice attorneys have and continue to draw upon the expertise of MGKF's litigation team, whose depth of experience rivals that of many "big firm" departments.

Our service to refinery clients in enforcement actions, however, does not end when a consent decree is entered. We also assist refinery operators in complying with the terms of these consent decrees, and work with our clients to terminate the consent decree as soon as possible.

Regulatory Development: The air quality regulatory framework is constantly evolving, with petroleum refineries often the focus of new regulation. Our attorneys have worked at all levels of the regulatory development process, including interactions with agency representatives and other stakeholders at the initial stages of regulation drafting, as well as preparation and filing of formal comments. Where such efforts are not successful, we have pursued appeals and other legal challenges to promulgated regulations before state agencies and state and federal courts.

Examples of representative matters in which MGKF professionals have assisted our refinery clients include the following:

• We assisted a national refinery company in negotiating multi-facility consent decrees under EPA's national petroleum refinery enforcement initiative with DOJ, EPA, and multiple state agencies. The terms of the consent decrees covered multiple operational units including cokers, cat-crackers, sulfur recovery units, and carbon monoxide boilers.
• The firm represented a refinery in appealing construction permits governing the installation of over $300 million in pollution control equipment at various refinery units. Ultimately, we renegotiated the terms of each of these permits, including throughput conditions, to reflect terms that were more consistent with our client's business plan for the refinery.
• MGKF attorneys assisted a refinery client in a regulatory development process directed at refinery heaters and boilers by attending stakeholder meetings and drafting written comments. We worked with state regulators to secure substantial revisions to the regulation that were more consistent with expected refinery operations.
• We negotiated terms of a complicated and comprehensive global administrative order on consent for a refinery with a state agency that resolved all outstanding alleged compliance issues through a combination of administrative penalties, pollution control upgrades, and supplemental environmental projects totaling approximately $6.25 million. After more than a year of negotiations, the refinery was praised by the regulatory authority for its cooperation and technical expertise.