Enforcement

Sinclair Clean Air Act Settlement

(Washington, D.C. - August 20, 2012) - The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced a settlement with two subsidiaries of Sinclair Oil Corporation to resolve alleged violations of air pollution limits established in a 2008 consent decree at refineries in Casper and Sinclair, Wyo. Sinclair Casper Refining Co. and Sinclair Wyoming Refining Co. will pay stipulated penalties totaling $3,844,000 and spend approximately $10.5 million on additional pollution control equipment and other projects to resolve the allegations.

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2012 Settlement

Overview of Company and Location of Facilities

In June 2008, the United States District Court, for the District of Wyoming, entered the Consent Decree between the United States and three Sinclair-affiliated refineries, resolving claims of the United States, and States of Oklahoma and Wyoming, under the Clean Air Act. The 2008 CD covered two refineries in Wyoming (owned by Sinclair Casper Refining Co. and Sinclair Wyoming Refining Co.) and one in Tulsa, Oklahoma (owned by Sinclair Tulsa Refining Co.). Defendants paid a combined civil penalty of $2,450,000, which was shared among the United States and the State co-plaintiffs.

The injunctive relief terms of the 2008 CD are the standard terms under the PRI. The four "marquee" issues in PRI settlements cover emissions from fluid catalytic cracking units ("FCCUs") and refinery heaters and boilers; flaring devices; leak detection and repair ("LDAR") requirements; and benzene waste management requirements.

This is the Sixth Amendment to the 2008 CD. Previous amendments have increased emission reductions, accelerated certain compliance dates, made technical changes, permitted alternative compliance options, and addressed two changes in ownership of the Tulsa refinery. The recent Fifth Amendment to the 2008 CD, entered by the United States District Court for the District of Wyoming on June 22, 2012, addressed a January 21, 2011, fire in the Sinclair Wyoming Refining Co.'s electrostatic precipitator ("ESP"), a control device for the FCCU. The Company has paid a $126,000 stipulated penalty ($3,000 per day for 42 days of violation of the PM limit) as a result of the ESP being offline for repair. The Fifth Amendment requires Sinclair to mitigate the harm caused by the ESP being non-operational for 42 days by installing next generation ultra-low NOx burners on heater units and paving roads to reduce PM emissions by approximately 15 tpy.

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Violations

EPA conducted a thorough investigation of Sinclair's compliance with the 2008 CD, and determined that Sinclair had the following violations:

  • Excess NOx emissions from the FCCU regenerator unit at the Casper refinery;
  • Excess SO2 emissions from the FCCU regenerator units at the Sinclair, Wyoming, and the Casper, Wyoming refineries;
  • Excess carbon monoxide (CO) emissions from the FCCU regenerator at the Sinclair refinery;
  • Delay in installing and operating a combustion unit to meet specified NOx reductions at the Sinclair refinery;
  • Excess SO2 emissions from the sulfur recovery plant (SRP) and tail gas unit (TGU) at the Sinclair refinery;
  • Failure to install and operate a FGRS to control continuous combustion in the flaring device at the Sinclair refinery;
  • Failure to undertake timely corrective action with respect to acid gas and tail gas incidents;
  • Failure to report LDAR data to unit supervisors the Sinclair refinery; and
  • Excess particulate matter (PM) emissions from the FCCU at the Sinclair refinery.

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Injunctive Relief

Injunctive Relief Under the Sixth Amendment to the 2008 CD

Reduced NOx Emissions Limits at the Casper Refinery

  • Sinclair is not complying with the 365-day rolling NOx emission limit at the FCCU at the Casper refinery. To address this, the amendment contains several new requirements to reduce emissions of NOx from the Casper refinery's FCCU. By no later than March 31, 2013, Sinclair will install and operate a selective catalytic reduction (SCR) system to control NOx emissions from the FCCU. The NOx emissions limit is reduced under the amendment to 20 ppm (365-day average) and 40 ppm (7-day average) at the FCCU, as compared to the existing limit under the 2008 CD, which is 50 ppm (365-day average) and 100 ppm (7-day average). The amended paragraph requires compliance with an interim NOx limit until March 31, 2013, when the new limits become effective. The cost of installing and operating the SCR is approximately $3.5 million.

Compliance with SO2 Emissions Limits at the Sinclair Refinery

  • Sinclair is not complying with 2008 CD requirements, including: (1) install and operate a flare gas recovery system (FGRS); (2) comply with emissions limits for combustion of fuel gas as set forth in 40 CFR 60.104(a)(1); (3) minimize concentration of hydrogen sulfide ("H2S") in streams vented to the flare, and (4) continue to operate in compliance with 40 CFR 60.18 operating requirements for flare systems. The amendment will address this by requiring an upgrade to Sinclair's FGRS and compliance with emissions limits and requirements by March 31, 2013. Sinclair will install and operate a Hijet Hijector as part of the FGRS at the Sinclair refinery, which will be adequately sized to ensure that the FGRS will control combustion in the flaring device such as to enable compliance with emissions limits at 40 CFR 60.104(a)(1). The amendment will require that Sinclair operate its FGRS in compliance with an optimization plan which EPA will review and approve. The cost of installing and operating the Hijet Hijector system and implementing other FGRS upgrades is approximately $6 million.

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Pollutant Reductions

Excess NOx emissions from the FCCU Regenerator Unit at the Casper Refinery

  • This NOx emissions violations at the Casper FCCU resulted in over 24 tons of excess NOx emissions. We estimate the reduced NOx emissions limit under paragraph 13.b., will result in reduced NOx emissions at a rate of 23 tpy23 tpy. Therefore, the entire amount of excess NOx emissions resulting from the 2008 CD violations will be paid back in just over one year from the time the SCR is installed and begins operating.

Excess SO2 emissions from the FGRS Unit at the Sinclair Refinery

  • The amendment will require as of the day of lodging SO2 emissions resulting from fuel oil burning will be no greater than 95 tpy on a 365-day rolling average basis, as compared to 188 tpy on a 365-day rolling average basis under the existing 2008 CD. This is a significant reduction in the SO2 cap from fuel oil burning.

Excess PM Emissions from the FCCU Unit at the Sinclair Refinery

  • The 2008 CD included PM violations at Sinclair refinery that occurred over a 42-day period. This will be addressed by amended paragraphs 186, which requires Sinclair to reduce PM by approximately 59 tpy by additional road paving by no later than June 30, 2012.

This additional road paving will cost approximately $1 million.

Stipulated Penalties

  • The proposed Sixth Amendment, combined with stipulated penalties recently paid, will result in Sinclair paying a total of $3,970,000 in stipulated penalties (shared equally by the United States and the State of Wyoming (pursuant to the split prescribed in the 2008 CD).

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Supplemental Environmental Project

Sinclair is not conducting a Supplemental Environmental Project as part of this settlement.

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State Partners

The State of Wyoming participated in the settlement negotiations as a co-plaintiff and is a signatory to the Sixth Amendment and the Stipulation and Agreement Regarding the Assessment of Stipulated Penalties.

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Comment Period

The proposed amendment is lodged in the U.S. District Court for the District of Wyoming. The consent decree will be subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice.

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Petroleum Refinery National Initiative Case Results

Through multi-issue, multi-facility settlements or detailed investigations and aggressive enforcement, this national priority addresses the most significant Clean Air Act compliance concerns affecting the petroleum refining industry.
See EPA's National Petroleum Refining Initiative website for more information.

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For more information, contact:

Robert G. Klepp, Attorney
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
(202) 564-5805
klepp.robert@epa.gov

Patrick W. Foley
Senior Environmental Engineer
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-7978
foley.patrick@epa.gov

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2008 Settlement

(Washington, D.C. - January 16, 2008) Sinclair Oil Corporation has agreed to pay a $2.45 million civil penalty and spend more than $72 million for new and upgraded pollution controls at each its three refineries, the Justice Department and U.S. Environmental Protection Agency announced. The settlement resolves alleged violations of the Clean Air Act and is expected to reduce more than 5,700 tons of harmful emissions annually from the company's refineries in Casper and Sinclair Wyoming, and in Tulsa, Oklahoma.

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Geography - Three refineries:

  • Tulsa, Oklahoma
  • Casper, Wyoming
  • Sinclair, Wyoming

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Industry Capacity

  • Approximately 160,800 thousand barrels of oil/day.
  • About 1% percent of U.S. domestic refining capacity.

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Emissions reductions

  • Nitrogen oxide (NOx) reduced by more than 1,100 tons per year.
  • Sulfur dioxide (SO2) reduced by more than 4,600 tons per year.
  • Additional reductions of volatile organic compounds (VOCs), particulate matter (PM) and other pollutants.

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Injunctive Relief
 

More than $72 million will be spent on injunctive relief through 2012

FCCUs and Heaters and Boilers (NSR/PSD):

  • FCCU NOx limits of 20 ppm (365-day) and 40 ppm (7-day) at the Tulsa refinery, 40/80 ppm for the Sinclair refinery and 50/100 ppm at the Casper refinery.
  • FCCU SO2 limits of 25 ppm (365-day) and 50 ppm (7-day) at all three refineries.
  • NOx and SO2 continuous emission monitors are required to be installed at all refineries.
  • System-wide weighted average NOx emission limit 0.044 lbs/MMBtu for heaters and boilers greater than 40 MMBtu/hr.
  • Particulate emissions limits of 1 pound per 1,000 pounds coke burned at each FCCU.

NSPS and Flaring:

  • All flares, heaters and boilers subject to NSPS Subpart J.
  • All sulfur recovery plants subject to NSPS Subpart J.
  • No fuel oil burning except in limited circumstances.
  • A "root cause" analysis for all future flaring events.
  • Stipulated penalties for repeated causes of acid gas and tail gas flaring.

Benzene Waste Operations NESHAP:

  • Total annual benzene (TAB) less than 10 Mg/yr at the Casper refinery.
  • Compliance with the EPA-preferred "6 BQ" benzene compliance option at the Tulsa and Sinclair refineries.
  • Modified management of change procedures to ensure that new benzene streams are included in the TAB calculation.
  • Conduct laboratory audits.
  • Quarterly sampling and TAB calculation.
  • Training for those who sample benzene.

Leak Detection and Repair Program:

  • NSPS Subpart GGG for each affected facility.
  • Training, including refresher courses, for refinery personnel with LDAR responsibility.
  • Required LDAR compliance audits.
  • Strict internal leak definitions (500 ppm for valves and 2000 ppm for pumps).
  • Internal first attempt at repair at 200 ppm for valves.
  • More frequent monitoring than required by regulation.

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Environmental Benefits

When all controls are installed, the settlement will result in substantial reductions of the following pollutants:

  • NOx, which can cause or contribute to a variety of health problems and adverse environmental impacts, such as ground-level ozone, acid rain, global warming, water quality deterioration, and visual impairment. Affected populations include children, people with lung diseases such as asthma, and exposure to these conditions can cause damage to lung tissue for people who work or exercise outside.
  • SO2, which in high concentrations can affect breathing and may aggravate existing respiratory and cardiovascular disease. Sensitive populations include asthmatics, individuals with bronchitis or emphysema, children, and the elderly. SO2 is also a primary contributor to acid deposition, or acid rain.
  • VOCs, which -- along with NOx -- plays a major role in the atmospheric reactions that produce ozone, which is the primary constituent of smog. People with lung disease, children, older adults, and people who are active can be affected when ozone levels are unhealthy. Ground-level ozone exposure is linked to a variety of short-term health problems, including lung irritation and difficulty breathing, as well as long-term problems, such as permanent lung damage from repeated exposure, aggravated asthma, reduced lung capacity, and increased susceptibility to respiratory illnesses such as pneumonia and bronchitis.
  • PM, especially fine particles, contain microscopic solids or liquid droplets that are so small that they can get deep into the lungs and cause serious health problems. PM is linked to a variety of problems, including increased respiratory symptoms such as irritation of the airways, coughing, or difficulty breathing, decreased lung function, aggravated asthma, and premature death in people with heart or lung disease.

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Penalty

$2.45 million (includes $1.65 million to be paid to participating state partners)

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Supplemental Environmental Projects

  • $150,000
  • $100,000 state SEP or diesel retrofits of municipal trash trucks in Tulsa, Oklahoma
  • $50,000 for an additional state SEP in Oklahoma to be determined by Sinclair and the Oklahoma Department of Environmental Quality.

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Oklahoma and Wyoming

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For more information, contact:

Patrick W. Foley
Senior Environmental Engineer
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-7978
foley.patrick@epa.gov