Recap of EPA’s New Rule to Implement Next-Generation Compliance

In September, the Environmental Protection Agency (EPA) signed a new rule that addresses air pollution from refineries. The rule is designed to reduce toxic air emissions from waste from petroleum refineries, and will be fully implemented by 2018. The focus is on the application of Next-Generation (Next-Gen) tools to improve environmental quality and refinery compliance.

Introduction to Next-Gen Compliance

The EPA lists the five components of Next-Gen compliance.

  1. Make it easier to implement regulations and permits. This can increase compliance and help the environment.
  2. Use advanced technology and publicize the results. This lets the public, private sector, and government recognize pollution-generating activities and the need for developing and enforcing regulations.
  3. Use electronic reporting. This increases accuracy and speed so all interested parties can obtain relevant information in a timely manner.
  4. Increase transparency. This allows the public to see which entities are environmentally friendly, which are non-compliant, and the need for environmental regulations.
  5. Increase compliance through novel strategies such as data analytics and targeting. This can make enforcement more effective.

Develop and use innovative enforcement approaches (e.g., data analytics and targeting) to achieve more widespread compliance.

These components are interconnected, as increasing awareness, compliance, and transparency go together.

Three Basic Components

The Next-Gen rules make three major changes.

  1. Requiring “fenceline” monitoring of levels of benzene, which is a colorless, flammable hydrocarbon that may be carcinogenic. Corrective action is necessary if benzene increases above a baseline.
  2. Electronic reporting of the fenceline data is required and may be made public through a database.
  3. Reduction in non-compliance during equipment malfunctioning.

Expected Economic, Socio-Economic, and Environmental Effects

The EPA has published reports on the expected effects of the new rules. In its Economic Impact Assessment, the EPA concluded the rules will cost $63.2 million in total engineering costs. The rules will have little or no significant impact on market prices and small businesses.

The Analysis of Socio-Economic Factors for Populations Living Near Petroleum Refineries looked at models of current and expected future health risk factors for various demographic groups living near refineries. The Post-Control Scenario estimates a reduction in related cancer risk of 15 to 20% among the 6.1 million people living near refineries. An estimated 1.4 million fewer individuals will be exposed to carcinogens that increase risk to more than 1 in 1 million. Given the make-up of populations living near refineries, this represents a decrease in health disparities.

The environmental effects of the EPA’s new regulation, as reported by the EPA, include the following.

  • Reduced toxic air pollutants.
  • Reduced volatile organic compounds, such as benzene, toluene, and xylene.
  • Reduced greenhouse gas emissions, especially of carbon dioxide.

While the rules appear to target petroleum refineries, they may also affect other industries with “fugitive emissions.” Examples include oil and gas storage facilities, chemical plants, and distilleries. Better compliance and enforcement may be the norm in the future.