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[Federal Register Volume 77, Number 72 (Friday, April 13, 2012)]
[Rules and Regulations]
[Pages 22226-22229]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8921]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 260 and 261

[EPA-HQ-RCRA-2008-0808; FRL 9658-3]
RIN-2050-AE78

Regulation of Oil-Bearing Hazardous Secondary Materials From the 
Petroleum Refining Industry Processed in a Gasification System To 
Produce Synthesis Gas; Final Determination To Deny Administrative 
Petition

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule; final determination to deny administrative 
petition.

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SUMMARY: EPA is providing notice of a final determination to deny an 
administrative petition submitted by Earthjustice on behalf of the 
Sierra Club and the Louisiana Environmental Action Network under the 
Resource Conservation and Recovery Act. The petition requested EPA to 
review the final rule, ``Regulation of Oil-Bearing Hazardous Secondary 
Materials From the Petroleum Refining Industry Processed in a 
Gasification System To Produce Synthesis Gas,'' published in the 
Federal Register on January 2, 2008.

FOR FURTHER INFORMATION CONTACT: Alan Carpien, U.S. Environmental 
Protection Agency, Office of General Counsel, Mail Code 2366A, 1200 
Pennsylvania Ave. NW., Washington, DC 20460; telephone (202) 564-5507; 
or carpien.alan@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. General Information

A. How can I get copies of this document and other related information?

    1. Docket. EPA has established a docket for this action under 
Docket ID No. EPA-HQ-RCRA-2008-0808. Publicly available docket 
materials are available either electronically through 
www.regulations.gov or in hard copy at the RCRA Docket in the EPA 
Docket Center, (EPA/DC) EPA West, Room 3334, 1301 Constitution Ave. 
NW., Washington, DC. The EPA Docket Center Public Reading Room is open 
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal 
holidays. The telephone number for the Public Reading Room is (202) 
566-1744, and the telephone number for the RCRA Docket is (202) 566-
0270. A reasonable fee may be charged for copying docket materials.
    2. Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the Federal Register 
listings at http://www.epa.gov/fedrgstr/.

II. Summary of the Action

    EPA is providing notice of a final determination to deny an 
administrative petition submitted by Earthjustice on behalf of the 
Sierra Club and the Louisiana Environmental Action Network under the 
Resource Conservation and Recovery Act. EPA issued an earlier notice 
tentatively denying this same petition in January 2011 and solicited 
written comments on this tentative decision (76 FR 5107, Jan. 28, 
2011). The petition requested EPA to review the final rule, 
``Regulation of Oil-Bearing Hazardous Secondary Materials From the 
Petroleum Refining Industry Processed in a Gasification System To 
Produce Synthesis Gas,'' published in the Federal Register on January 
2, 2008 (73 FR 57). The EPA has considered the petition, along with 
information contained in the rulemaking docket, as well as the five 
public comments received on the tentative denial. After evaluating all 
of this information, EPA has decided to issue a final determination 
denying the petition. In a letter from EPA Assistant Administrator 
Mathy Stanislaus dated April 3, 2012, EPA provided the petitioner with 
its final decision to deny the administrative petition. The letter, 
which is included as an Appendix to this Federal Register document 
explains EPA's reasons for denying the petition, as well as discussing 
the other comments received on the tentative denial.

Appendix: Letter to Earthjustice Denying Administrative Petition

Ms. Lisa Gollin Evans
Earthjustice
21 Ocean Avenue
Marblehead, MA 01945

Dear Ms. Evans:

    This letter is written to inform you of our final determination 
to deny the April 1, 2008 administrative petition you submitted to 
the U.S. Environmental Protection Agency (EPA or the agency) under 
the Resource Conservation and Recovery Act (RCRA) Sec.  7004(a), 42 
U.S.C. Sec.  6974(a) on behalf of the Sierra Club and the Louisiana 
Environmental Action Network (LEAN) (hereafter referred to as 
``Sierra Club''). Sierra Club requested that EPA review the final 
rule, ``Regulation of Oil-Bearing Hazardous Secondary Materials from 
the Petroleum Refining Industry Processed in a Gasification System 
to Produce Synthesis Gas'' (Gasification Rule). This final rule was 
published in the Federal Register on January 2, 2008 (73 FR 57, et 
seq.). The petition raised both procedural (notice and comment) and 
substantive grounds for seeking the agency's review of the 
Gasification Rule. EPA has made a final determination to deny the 
petition and in accordance with the regulatory requirements of 40 
CFR 260.20, EPA is providing notice of this determination to deny 
the petition in the Federal Register.
    A tentative denial was issued on January 19, 2011, and published 
in the Federal Register on January 28, 2011 (76 FR 5107).

[[Page 22227]]

Sierra Club filed comments on this tentative denial (hereafter 
referred to as ``SC Comments'').\1\ This final denial responds to 
the additional points raised in the SC Comments that were not raised 
in previous submittals and incorporates all previous agency 
responses to your original petition.\2\
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    \1\ See docket item EPA-HQ-RCRA-2008-0808-0017.
    \2\ We note that Sec.  7004(a) of RCRA, 42 U.S.C. Sec.  6974, 
provides that any person may petition the Administrator for the 
promulgation, amendment or repeal of any regulation under the Act. 
While your original petition failed to state whether you were 
requesting that EPA amend or repeal the Gasification Rule, the SC 
Comments request the agency ``revoke the Rule in its entirety.'' SC 
Comments at p. 2. EPA also received another comment from a number of 
environmental organizations and persons (EPA-HQ-RCRA-2008-0808-0018) 
requesting that the agency revoke the rule. This comment is regarded 
by the agency as general support for the SC comments, in that it 
mirrored the concerns raised in the comments submitted by 
Earthjustice. (See comment EPA-HQ-RCRA-2008-0808-0018 for a complete 
list of the environmental organizations and persons that submitted 
this comment.)
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    This final denial to your petition adopts all of the reasoning 
stated in our letter of November 2008 \3\ and the January 2011 
tentative denial, both of which are incorporated into this reply. We 
find no new substantive arguments in your comments that would cause 
the agency to grant your administrative petition.
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    \3\ Letters to Lisa Gollin Evans and James S. Pew, Earthjustice, 
from Susan Parker Bodine, EPA Assistant Administrator, dated 
November 14, 2008. This letter is available in the docket (docket 
item EPA-HQ-RCRA-2008-0808-0004 and EPA-HQ-RCRA-2008-0808-0006).
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    In general, you argue that EPA has improperly and arbitrarily 
removed hazardous wastes from RCRA's comprehensive cradle-to-grave 
regulatory system and that EPA's Gasification Rule is directly 
contrary to what you describe as RCRA's statutory mandate to 
regulate the treatment, storage, and disposal of hazardous waste 
derived fuels and the burning of hazardous wastes. For the first 
time, in the proceeding on this rule, you also claim that it 
frustrates the Clean Air Act. You argue, furthermore, that EPA's 
``finding'' that this rule will not jeopardize human health and the 
environment is unsupported by the administrative record for this 
rulemaking. Finally, you argue that the Gasification Rule was 
promulgated in violation of the Administrative Procedure Act (APA).
    EPA disagrees with your comments. The agency has properly 
excluded the materials in question from RCRA Subtitle C regulation 
and does not expect adverse effects on human health or the 
environment from this regulation. EPA finds that you have not 
presented any new information that would suggest or otherwise 
require that we review the Gasification Rule, nor have you raised 
any issues that have not already been raised by the comments in the 
rulemaking process. EPA also finds that the Gasification Rule meets 
the notice and comment requirements of the APA and, therefore, 
disagrees with your view that the agency did not provide adequate 
notice to the public and an opportunity to comment on the provisions 
of the final rule.\4\
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    \4\ The American Petroleum Institute (API) (docket item EPA-HQ-
RCRA-2008-0808-0010) and the Metals Industries Recycling Coalition 
(MIRC) (docket item EPA-HQ-RCRA-2008-0808-0013) also filed comments 
supporting the Gasification Rule. EPA accepts the reasoning in the 
comments in support of the decision with the exception that the 
agency does not agree that the residuals inserted into the 
gasification process ``may not be considered solid or hazardous 
wastes under controlling case law.'' API comments at p. 9. Rather, 
EPA has determined that it has the discretion to exclude the 
residuals from the definition of solid waste. A comment submitted by 
Industry Professionals for Clean Air and Air Alliance Houston 
(docket item EPA-HQ-RCRA-2008-0808-0012) expresses concern regarding 
monitoring and regulation of gasification processes. This is simply 
a general comment that EPA acknowledges regarding the appropriate 
monitoring and regulation under both RCRA and the Clean Air Act for 
these facilities.
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Legal Arguments

    EPA has discussed in earlier responses that it disagrees with 
Sierra Club's legal argument that the final rule does not comport 
with RCRA Sec.  3004(q), 42 U.S.C. Sec.  6924(q). Because EPA is 
providing an exclusion from the definition of solid waste for oil-
bearing hazardous secondary materials fed to gasifiers subject to 
this rule, EPA does not implicate the provisions of section 3004(q), 
which requires that the hazardous secondary material first be a 
solid waste. Nothing cited in your legal argument refutes this 
point. Discussion in SC Comments at pp. 6-7 merely provides a 
cumulative argument that burning of hazardous wastes must be 
regulated. Since the oil-bearing hazardous secondary materials are 
not considered solid wastes, they cannot be hazardous wastes.
    Further, Sierra Club raises a legal argument that has already 
been considered and rejected by the D.C. Circuit. In American Mining 
Congress (AMC) v. EPA, 824 F2d. 1177, 1187-89, the agency relied 
upon section 3004(q) to defend a broad definition of solid waste. 
The court specifically considered whether the exemption in section 
3004(q)(2)(A) for ``petroleum refinery wastes containing oil which 
are converted into petroleum coke at the same facility at which such 
wastes were generated'' implies that the term ``solid waste'' may 
include materials that have not been disposed of, but that are 
destined for reuse in another process. The court concluded that the 
exemption does not carry that implication, and section 3004(q) only 
applies to materials that have already become hazardous. See AMC at 
1188 & n.16.
    Plainly, section 3004(q) directs EPA to regulate all facilities 
that ``produce a fuel from hazardous wastes'' or ``burn, for 
purposes of energy recovery'' any such fuel. 42 U.S.C. Sec.  3004. 
Moreover, EPA agrees with the thrust of your comment that a recycled 
material does not become a non-waste simply because it is burned or 
processed to produce a fuel. Rather, the issue is whether the 
recycled material is discarded.
    The SC Comments (pp. 8-10) seem to imply that case law says that 
burning of recycled secondary materials is a waste activity, 
regardless. However, none of the cases cited deal with burning of 
material. In fact, the only case in the United States Court of 
Appeals that deals with whether certain burning of material is a 
waste found that the burning was not a waste activity. See Safe Air 
For Everyone v. Waynemeyer (``Safe Air''), 373 F.3d 1035 (9th Cir. 
2004) (Kentucky bluegrass stubble burned to return nutrients to the 
soil is not a solid waste).
    Your argument, including your discussions of the Clean Air Act, 
is ultimately based on your ``assertion'' that, in turn, EPA 
believes material inserted into a gasifier is not discarded. EPA 
disagrees. The agency, however, stands on the record developed in 
the rule for its determination that the recycled oil-bearing 
hazardous secondary material excluded from the definition of solid 
waste in this rule is not discarded.
    For the first time in the SC Comments, you claim that the 
gasification rule is ``contrary to and frustrates the purposes'' of 
the Clean Air Act. EPA does not understand the relevance of the 
Clean Air Act to this proceeding, although coverage under the Clean 
Air Act may be an issue in other proceedings. As noted above, the 
issue in this case is simply whether the recycled oil-bearing 
hazardous secondary material inserted into the gasifier is 
discarded. As a result of the Gasification Rule, the gasifiers would 
be subject to Clean Air Act Sec.  112 (42 U.S.C. Sec.  7412) because 
EPA has determined that the material has not been discarded.
    At least one of the arguments on the Clean Air Act is taken out 
of context. See SC Comments at pp. 10-12. As one aspect of its 
determination that gasification is not discard, EPA responded to 
public comments, which argued that ``gasification * * * is more a 
waste management process involving incineration than a petroleum 
refining process'' by comparing gasification to true waste 
management incineration. See 73 FR at 61. The SC Comments, however, 
discuss whether gasification involves combustion--a matter not 
relevant to the Gasification Rule. See SC Comments at pp. 11-12. 
Even if combustion occurs, the issue is whether this is a waste 
management activity or, as EPA found, a ``component of fuel 
manufacturing operations at a petroleum refinery.'' Id. The 
occurrence of combustion, by itself, does not render material a 
solid waste, if the Agency determines that this aspect is part of 
the manufacturing process and does not involve discard of the 
material.

Notice and Comment Issues

    Your petition states that the rule violates the notice and 
comment requirements of the APA. Your basis for this assertion is 
that EPA ``relied on'' a proposal suggested in a 1998 Federal 
Register notice \5\ and ``not on the 2002 proposed rule'' \6\ to 
formulate the Gasification Rule. You suggest that, as a result, the 
final rule ``is not a `logical outgrowth' of the agency's proposed 
rule'' (Petition at p. 7) and, therefore, ``the public

[[Page 22228]]

was denied the opportunity for notice and comment in several 
critical areas.'' (Petition at p. 8)
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    \5\ Notice of Data Availability (NODA), 63 FR 38139 (July 15, 
1998).
    \6\ ``Regulation of Hazardous Oil-Bearing Secondary Materials 
From the Petroleum Refining Industry and Other Hazardous Secondary 
Materials Processed in a Gasification System To Produce Synthesis 
Gas; Proposed Rule,'' 67 FR 13684 (March 25, 2002).
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    The ``critical areas'' to which you refer in the petition are 
noted below.
    (1) You assert that the Gasification Rule does not contain 
``chemical and physical specifications of the synthesis gas fuel 
product that is produced by gasifying the oil-bearing hazardous 
secondary materials'' (Petition at pp. 8-10). In support of this 
assertion, you refer to statements in the preamble to the March 2002 
proposal for the Gasification Rule (67 FR 13684, et seq.) and one 
statement in the January 2, 2008, final rule. The statements in the 
March 2002 proposal discuss various reasons why EPA thought, at the 
time, there should be chemical and physical specifications for 
synthesis gas produced and also express concerns as to what 
concentrations of metals actually exist in synthesis gas. The SC 
Comments reiterate this issue at pp. 14-15.
    (2) You assert that the Gasification Rule ``fundamentally alters 
the definition of gasification and entirely removes proposed 
conditions pertaining to operation of the gasifier,'' particularly 
requirements for slagging inorganic feed at temperatures above 2,000 
degrees C. (Petition at p. 10). These comments were reiterated in 
the SC Comments at pp. 15-17.
    (3) You assert that the Gasification Rule is insufficiently 
protective of human health and the environment because it did not 
``require that co-products and residues generated by the 
gasification system meet the Universal Treatment Standards if these 
materials are applied to the land,'' even though the agency had 
proposed such conditions in March 2002. (Petition at pp. 10-12). The 
SC Comments discuss these issues at pp. 17-18.
    The SC Comments (at p. 18) acknowledge that the original 
petition ``enumerated'' these APA violations. EPA responded to these 
arguments in both the November 2008 letter and the January 2011 
tentative denial, and believes it is not necessary to repeat those 
responses in this final denial, and simply incorporates by reference 
those responses in this denial. In summary, in the Gasification 
Rule, EPA scaled back on its plans for a more ``ambitious'' 
exclusion than proposed in March 2002 and returned largely to its 
original views regarding an exclusion for oil-bearing hazardous 
secondary materials returned to the petroleum refining system. See 
73 FR 58-59. The final Gasification Rule retained some conditions 
and removed others as a result of the agency's deliberations on each 
condition that took into account all of the comments received. EPA 
had received comments ranging from demands for full hazardous waste 
regulation to those arguing that the agency should not be regulating 
gasification at all since it was an integral part of the petroleum 
refining process and did not constitute waste management. See 73 FR 
at 59. The variety and nature of comments submitted demonstrates 
that EPA had a record upon which to make a decision that was based 
on a wide range of opinions and information.
    EPA's November 2008 and January 2011 documents stated that the 
March 2002 Gasification Proposal specifically provided notice that 
the provisions of the 1998 NODA were still being considered and 
noted that it is significant that your original administrative 
petition ignores this discussion in the March 2002 proposal. The SC 
Comments (at p. 18), for the first time, respond to this notice 
argument. EPA continues to defend its position that this discussion 
in the March 2002 Gasification Proposal is supportive of the 
agency's position that adequate notice and comment was provided.\7\
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    \7\ For example, see footnote 2 of the preamble found at 67 FR 
13685, footnote 9 of the preamble found at 67 FR 13688, and the 
discussion in Section VI of the preamble found at 67 FR 13689.
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Arbitrary and Capricious Issues

    The SC Comments (at pp. 19-28) provide a longer discussion than 
the original petition on your argument that the Gasification Rule is 
arbitrary and capricious. However, the arguments for the most part 
are simply those reiterated in comments on the rule and fail to cite 
information not provided in the rulemaking record which EPA has 
already considered. EPA understands that you may disagree with the 
agency's conclusions, but we believe that the regulatory choices 
made by the agency are reasonable based on the rulemaking record.
    In the absence of any new relevant information, it would not be 
useful for the agency to revisit evidence and arguments it has 
already carefully considered. Moreover, in our view, the notice and 
comment issues you have raised are actually discussions of the 
merits of the agency's decision with which you disagree. See 73 FR 
61-67. In fact, the SC Comments do not point to any information 
which EPA lacks to make its decision.

Additional Issues

    The SC Comments do cite two reports issued after the 
Gasification Rule was published.\8\ However, the information in 
these studies are cumulative at best and deal with the management of 
municipal solid waste and the role that incinerators, gasification 
and pyrolytic processes have on potentially affecting the use of 
waste reduction and recycling activities. Neither report 
specifically explores the subject of recycling of oil-bearing 
hazardous secondary materials at a petroleum refinery through 
gasification. Furthermore, the Gasification Rule applies only to 
gasification operations occurring at petroleum refineries for the 
recycling of oil-bearing hazardous materials and does not apply to 
other secondary materials, including municipal solid waste.
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    \8\ Waste Gasification--Impact on the Environment and Public 
Health. The Blue Ridge Environmental Defense League. February 2009. 
An Industry Blowing Smoke. 10 Reasons Why Gasification, Pyrolysis 
and Plasma Incineration are Not Green Solutions. Global Alliance for 
Incinerator Alternatives Global Anti-Incinerator Alliance. June 
2009.
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    In addition, Sierra Club alleges that EPA predicted that ``over 
150 refineries * * * could potentially exploit'' the Gasification 
Rule and thereby burn over 320,000 tons of hazardous waste without 
adequate protections. As discussed in the final rule, the agency's 
cost-benefits analysis was based on two scenarios drawn from U.S. 
Department of Energy projections on the future of gasification 
operations at petroleum refineries: A low capacity analysis (three 
gasifiers employed at three different refineries) and a high 
capacity analysis (five gasifiers at five refineries). This is far 
different than the 150 refineries Sierra Club argues would 
``exploit'' the exclusion.\9\ As for the 320,000 tons of hazardous 
waste being burned, this number represents the total amount of 
hazardous waste generated by petroleum refineries in 2003 as 
reported to the RCRA Biennial Reporting System (BRS) and in no way 
represents the amount of oil-bearing hazardous secondary material 
which would be fed into a gasifier at a petroleum refinery.\10\
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    \9\ This number is based on data from the 2003 RCRA Biennial 
Reporting System (BRS) using the following waste codes K048-K052, 
K169-K172, F037 and F038. This is hazardous waste that was reported 
to EPA that was generated and managed in 2003. The BRS reported 
324,371 tons of hazardous waste generated by 153 sites (Standard 
Industrial Classification 2911). The average generation rate was 
calculated at 2,314 tons per year, with a maximum generation rate of 
76,582 tons per year and a minimum of less than 1 ton per year. 
Information from the report, Refinery Technology Profiles: 
Gasification and Supporting Technologies. U.S. Department of Energy, 
National Energy Technology Laboratory, June 2003, suggests that 
growth in petroleum refinery gasification will most likely be driven 
by future supply and demand of petroleum coke with approximately 40 
refineries within the U.S. producing sufficient quantities of 
petroleum coke to be considered candidates for the addition of 
gasification to their production process. The report suggests a 
market penetration rate of one plant every two years. EPA's analysis 
shows that both waste characterization data and waste generation 
rates indicate that industry would probably not build a gasification 
unit dedicated to gasifying oil-bearing hazardous secondary 
materials and the most probable gasification scenario would be a 
petroleum refinery building a gasification unit for petroleum coke 
gasification with oil-bearing hazardous secondary materials possibly 
used as a supplemental feed (accounting for between 0.1 and 10 
percent of the total feed rate) (docket item EPA-HQ-RCRA-2002-0002-
0110). Given these assumptions, EPA would estimate that with an 
average generation rate of 10,000 tons per year of oil-bearing 
hazardous secondary material, a total of no more than 50,000 tons 
per year of oil-bearing hazardous secondary material would be placed 
into a gasification unit as part of the petroleum refining process.
    \10\ See: Assessment of the Potential Costs, Benefits, and Other 
Impacts of the Exclusion for Gasification of Petroleum Oil-bearing 
Secondary Materials--Final Rule (docket item EPA-HQ-RCRA-2002-0002-
0089).
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    Finally, Sierra Club introduces yet another new issue, not 
raised in the original administrative petition, regarding EPA's 
failure to adequately assess environmental justice as part of its 
cost assessment and the agency's lack of effort to ascertain the 
full range of threats the Gasification Rule would present to 
disadvantaged, low-income and minority communities living nearby the 
exempted refineries. The agency concluded, based on its technical 
analysis supporting the rule, that the gasification of hazardous 
secondary materials at petroleum refineries does not represent a 
greater risk to the public

[[Page 22229]]

than the baseline used to develop the analysis.\11\
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    \11\ The rule is projected to result in benefit-cost savings for 
petroleum refineries using the exclusion. Petroleum refineries 
choosing not to take advantage of the exclusion would experience no 
direct impact from the rule. The benefit-cost analysis showed 
between $5.2 million and $48.7 million in net social benefits per 
year with avoided waste management costs constituting the most 
significant share of the benefits, followed by the energy savings 
from increased fuel production. The analysis further showed that the 
areas potentially affected by the rule showed disproportionately 
high minority/low income populations, but that gasification of oil-
bearing hazardous secondary materials does not represent a greater 
risk to the public than baseline management, and that as less 
material is received by hazardous waste management facilities, low 
income and minority populations would likely experience a potential 
reduction in risk under the rule.
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    As previously stated, a document will be published in the 
Federal Register announcing the agency's final decision to deny your 
administrative petition. If you should have any questions, please 
contact Alan Carpien, EPA's Office of General Counsel at (202) 564-
5507.

Sincerely,

Mathy Stanislaus,

Assistant Administrator, Office of Solid Waste and Emergency 
Response.

Dated: April 3, 2012.

Mathy Stanislaus,

Assistant Administrator, Office of Solid Waste and Emergency 
Response.

[FR Doc. 2012-8921 Filed 4-12-12; 8:45 am]
BILLING CODE 6560-50-P
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