EPA backs off for Tesoro, Chevron, and Pacific Command at governor’s request

HONOLULU—Last week, the U.S. Environmental Protection Agency (EPA) agreed to make changes to proposed rules on emission standards for liquid fired process heaters and boilers after Gov. Linda Lingle said the changes would hurt the State’s economy and affect military operations in Hawaii.

Two refineries on Oahu operated by Tesoro Companies, Inc. and Chevron Corporation provide fuel supplies for 1.3 million residents and over 6 million visitors a year. The two refineries also provide fuel for the fleet of ships, planes, tanks, and related vehicles that are used by the Air Force, Army, Marines, Coast Guard, and Navy facilities throughout the Pacific.

Lingle also told EPA administrator Lisa Jackson that Hawaii does not have access to natural gas, which other refineries could switch to as their fuel source to meet the draft emission standards in the EPA’s proposed rules. In addition, because synthetic gas is produced by a single gas company in Hawaii using the by-products of the two oil refineries and must be liquefied and transported to the neighbor islands, the cost of synthetic gas is considerably more expensive than natural gas.

The EPA will create a regulatory subcategory to reflect the industrial variations of Hawaii’s refineries that would otherwise make it economically unfeasible to comply with the proposed emission standards.

The governor stated that the proposed EPA rules would have forced Chevron and Tesoro “to make investments that are not economically feasible and put them at a competitive disadvantage.”

Lingle also said that requiring Hawaii refineries to comply with the proposed standards would have no measurable impact on improving air quality because Hawaii already complies with EPA ambient air standards.

The U.S. District Court has agreed to the EPA’s request for a one-month postponement, until January 16, 2011, as the deadline for issuing the final rules.