Speeches/Testimony

Statement of David Pavlich of Giant Industries
On Behalf of the National Petrochemical and Refiners Association
at the EPA Public Hearing on New Source Review Reform
Raleigh, North Carolina
August 14, 2003

I am Dave Pavlich of Giant Industries which is headquartered in Scottsdale, Arizona. I am the manager of the Health, Environment, and Safety Program for Giant's Yorktown, Virginia refinery.

I am here today representing the position and views of the National Petrochemical & Refiners Association (NPRA).

NPRA is a national trade association which members comprise more than 450 companies, including virtually all US petroleum refiners and petrochemical manufacturers. Our members supply consumers with a wide variety of products and services that are used daily in homes and businesses. These products include gasoline, diesel fuel, home-heating oil, jet fuel, asphalt products, and the chemicals that serve as "building blocks" in making plastics, clothing, medicine, computers and many other products in daily use.

NPRA Position on NSR Reform

NPRA would like to restate its position on NSR Reform which it provided earlier in comments to EPA and during Congressional hearings. NPRA supports EPA's final rules on NSR reform released last year. The net result of this reform will be both increased energy supplies and continued environmental progress. Providing greater clarity, certainty, and operational flexibility will help industry provide adequate supplies of cleaner transportation fuels, resulting in significant environmental benefits that both the public and policymakers desire.

Court Decision

A number of stakeholders are opposed to EPA's NSR reform, citing reasons which have strong political overtones and which, in fact, lack substance. The Judge in the NSR Ohio Edison lawsuit clearly understands the issues of why reform is needed and stated so in his August 7, 2003 decision. He stated that this case highlights an abysmal breakdown in the administrative process, and that the enforcement of the Clean Air Act with regard to the plant has been disastrous. NPRA has argued from the beginning that NSR is complex, unclear to both the regulated community and EPA, and has not been enforced consistently. NSR reform must continue if we really want environmental improvement. As Assistant Administrator Suarez stated, the regulated community is entitled to clear and consistent enforcement.

NPRA's Comments

I would like to comment today specifically on EPA's Supplemental Analysis and the beneficial impacts from NSR reform. NPRA also supports EPA's decision on the other five areas that EPA opened for reconsideration and appreciates the Agency's efforts to be transparent in its decision-making process. We agree with EPA's position that its decisions on these five issues, as reflected in the December 31, 2002 rulemaking, were sound. EPA's final rule is environmentally protective, allows the flexibility needed by business to improve productivity and strengthen the economy and it will provide greater certainty in the permitting process.

However, we're disappointed that the Agency determined that it needs additional procedures to address concerns raised by some stakeholders-resulting in further delay. We will also provide detailed written comments to the Agency regarding each of the six issues that it is reconsidering.

EPA's Supplemental Analysis

EPA's NSR Reform rulemaking process is detailed and sound. It is based on extensive information gathered over 7 years that includes: a 1996 NSR reform proposal, a 1998 Notice of Data Availability, hundreds of comments from the public, public hearings, and over 50 stakeholder meetings. It includes analyses of reform options as well as comments on impacts of any changes to the NSR program. This long and detailed record supporting the need for NSR improvement is entirely consistent with the standard rulemaking process which includes broad public involvement.

For example, during 1999 and 2000, NPRA and other industries participated with EPA as part of a Complex Manufacturing Workgroup on NSR Reform under the direction of EPA Assistant Administrator Bob Perciasepe and John Seitz of OAQPS. The workgroup discussed technical issues, policy, environmental impacts, and benefits of the numerous possible changes to NSR. The results of these discussions and industry recommendations were also shared with STAPPA/ALAPCO. The summary of these meetings and correspondence between the workgroup and EPA are included in EPA's Docket and available for public review.

We believe that the information which was in EPA's docket and available to the public was more than sufficient from a policy and legal perspective to support promulgation of the final NSR rule. In fact, the docket contains much more information than is normally available for many EPA rulemakings. Given the extensive record already, the Supplemental Analysis was not necessary for the final rulemaking. However, now that EPA has added it to the record, it further strengthens the case already made over the last seven years since the 1996 rulemaking, informs the public, and provides increased transparency.

Environmental Benefits of the Rule

Environmental benefits of the NSR reform are also well documented in EPA's NSR docket. NPRA provided EPA case examples of how NSR reform would reduce air emissions at refineries and petrochemical plants, encourage the use of state-of-the-art control technology, and facilitate the timely production of cleaner burning fuels.

One example of significant emission reductions that will be facilitated by NSR reform is the requirement for our refining members to make cleaner fuels. Because of the large capital expenditures and the significant, often complex, modifications at the facility needed to produce these fuels, permitting is a critical step in the process. NSR reform will provide clarity, certainty, and operational flexibility to the permit and subsequent compliance process. Successful implementation of the clean fuels program is vital to achieving the significant vehicle emission reductions sought by EPA in its rulemakings. Just for the tier 2 low sulfur gasoline provisions alone, the annual environmental benefits reported by EPA in 2007 are reductions of over 18,000 tons of VOC; 86,000 tons of NOx, 20,000 tons of SO2, 2,000 tons of PM10 and 2,000 tons of PM2.5 nationally. Further, as stated in the recent NAAQS proposal preamble, cleaner fuels will also help in meeting the new NAAQS for ozone another significant task facing both the refining and petrochemical industries.

I want to thank you for providing NPRA another opportunity to publicly support the Agency's NSR final rule. NSR reform is long overdue and is the best way to provide clarity and certainty with respect to necessary activities at our facilities while ensuring continuing environmental improvement.