Document ID: EPA-HQ-RCRA-2002-0002-0117
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2008-01-02T05:00Z

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 260 and 261

[RCRA-2002:  FRL-7162-8]

RIN:  2050-AE78

Regulation of Oil-Bearing Hazardous Secondary Materials From the
Petroleum Refining Industry Processed in a Gasification System to
Produce Synthesis Gas.

AGENCY:	 Environmental Protection Agency.

ACTION:	 Final rule.		

SUMMARY:  The Environmental Protection Agency (EPA) is revising its
hazardous waste management regulations under the Resource Conservation
and Recovery Act (RCRA) to further promote the environmentally sound
recycling of oil-bearing hazardous secondary materials generated by the
petroleum refining industry.  Specifically, EPA is amending an existing
exclusion from the definition of solid waste, found at 40 CFR
261.4(a)(12)(i), for oil-bearing hazardous secondary materials when they
are processed in a gasification system at a petroleum refinery for the
production of synthesis gas.  We are finalizing this exclusion so that
the gasification of these materials will have the same regulatory status
(they are all excluded from the definition of solid waste under RCRA) as
oil-bearing hazardous secondary materials that are reinserted into the
petroleum refining process.  This action serves what we believe is a
national interest by capturing as much energy from a barrel of oil as
possible to maximize production efficiencies at petroleum refineries in
an energy constrained world.

DATES: This final rule is effective on [insert 30 days after publication
in the Federal Register].

ADDRESSES:  EPA has established a docket for this action under Docket
ID No. EPA-HQ-RCRA-2002-0002.  All documents in the docket are listed on
the www.regulations.gov web site. Although listed in the index, some
information is not publicly available, because, for example, it may be
Confidential Business Information (CBI) or other information, the
disclosure of which is restricted by statute.  Certain material, such as
copyrighted material, is not placed on the Internet and will be publicly
available only in hard copy form.  Publicly available docket materials
are available either electronically through www.regulations.gov or in
hard copy at the RCRA Docket, EPA/DC, EPA West, Room 3334, 1301
Constitution Avenue, NW, Washington, DC.  This Docket Facility 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.

FOR FURTHER INFORMATION CONTACT:  Elaine Eby, Waste Minimization Branch,
Hazardous Waste Minimization and Management Division, Office of Solid
Waste (5302P), Environmental Protection Agency, 1200 Pennsylvania Ave.,
NW., Washington, DC 20460; telephone number: (703) 308-8449, fax number:
(703) 308-8433, email address:  eby.elaine@epa.gov

SUPPLEMENTARY INFORMATION:  

A.	Does this Action Apply to Me?

This rule may apply to entities regulated under RCRA, in the petroleum
refining industry, identified as Standard Industrial Classification
(SIC) 2911.  To determine whether your facility, company, or business is
affected by this action, you should carefully examine 40 CFR Parts 260
through 271.  If you have questions regarding the applicability of this
action to a particular entity, consult the person listed in the
preceding “FOR FURTHER INFORMATION CONTACT” section.

B.	Table of Contents

I.	Statutory Authority.

II.	Summary of Today’s Action.

III.	Background.

IV.	Development of Today’s Final Rule.

A.  How Many Gasification Systems Are Currently Operating at Petroleum
Refineries?

B.  What Conclusions Have We Drawn About Gasification Systems Operating
at Petroleum Refineries?

V.       Today’s Final Rule.

	A.  Does the Conditional Exclusion Include a Definition for a
Gasification System Used at a Petroleum Refinery?

	B.  Does the Conditional Exclusion Include a Synthesis Gas
Specification?

	C.  Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Material From Being Placed on the Land Prior to Insertion in
the Gasification System?

	D.  Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Materials From Being Speculatively Accumulated Prior to
Insertion in the Gasification System?

Does the Conditional Exclusion Regulate Certain Metals in Residuals
Generated from the Gasification Process? 

Does the Conditional Exclusion Require Additional Recordkeeping and
Reporting Requirements?

VI.      What Will the Effect of the Final Rule Be on Recycling and
Energy Recovery?

VII.     How Will Today’s Regulatory Changes Be Administered and
Enforced in the States?

VIII.   What Are the Costs and Benefits of the Final Rule?

IX.      Statutory and Executive Order Reviews.

A.  Executive Order 12866: Regulatory Planning and Review.

B.  Paperwork Reduction Act.

C.  Regulatory Flexibility Act.

D.  Unfunded Mandates Reform Act.

E.  Executive Order 13132: Federalism.

F.  Executive Order 13175: Consultation and Coordination with Indian
Tribal         Governments.

G.  Executive Order 13045: Protection of Children from Environmental
Health Risks and Safety Risks.  

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, 

Distribution, or Use.

I.  National Technology Transfer and Advancement Act of 1995.

J.  Executive Order 12898: Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations.

K. Congressional Review Act. 

I.	Statutory Authority

The U. S. Environmental Protection Agency (EPA or the Agency) regulates
the generation and management of hazardous waste under 40 CFR Parts 260
through 273 using the authority of the Resource Conservation and
Recovery Act of 1976 (RCRA), as amended, 42 U.S.C. 6901 et seq.

II.	Summary of Today’s Action

EPA is amending an existing exclusion from the definition of solid waste
that applies to oil-bearing hazardous secondary materials generated at a
petroleum refinery when these materials are recycled by inserting them
back into the petroleum refining process.  This exclusion is found at 40
CFR 261.4(a)(12)(i) and applies to oil-bearing hazardous secondary
materials that are hazardous because they are listed in 40 CFR, Part
261, Subpart D (e.g., K048-K052, K169-K170, and F037-F038), or because
they exhibit a hazardous characteristic under Part 261, Subpart C.  

With today’s final rule, the exclusion will be revised to add
“gasification” to the list of already recognized petroleum refinery
processes (e.g., distillation, catalytic cracking, fractionation, and
thermal cracking units) into which oil-bearing hazardous secondary
materials can be legitimately recycled.  The Agency is also promulgating
a definition for the term “gasification,” at 40 CFR 260.10, which
applies only to this specific exclusion.  The exclusion is conditioned
on there being no land placement and no speculative accumulation of the
oil-bearing hazardous secondary material prior to re-insertion into the
petroleum refining process.  The exclusion allows these materials to be
inserted into the same petroleum refinery where they are generated, or
sent directly to another petroleum refinery, and still be excluded under
this provision.,

Provided the conditions of the exclusion are met, oil-bearing hazardous
secondary materials will be excluded from the definition of solid waste,
at the point of generation.  Similarly, the fuels and by-products
manufactured from these excluded materials will also be excluded. 
Residuals from the gasification process, like residuals generated from
other recognized petroleum refining processes (e.g., fines from coking
operations) will be classified as newly generated waste and would only
be considered hazardous if they exhibit one or more of the hazardous
waste characteristics.  However, as discussed in the preamble for the
Federal Register notice promulgating this exclusion at 63 FR 42128
(August 6, 1998), the exclusion extends only to materials actually
reinserted into the petroleum refinery process, and any residuals
generated  from the processing of oil- bearing hazardous secondary
materials prior to insertion into the petroleum refining process are
designated as F037 waste.  

Subsequent to the promulgation of the exclusion in August 1998 (63 FR
42110), we proposed regulatory language that would create a new,
separate exclusion to address the gasification of oil-bearing hazardous
secondary materials. (See 67 FR 13684, March 25, 2002.)   However, in
the course of finalizing this rule, we have concluded that a new
exclusion is unnecessary.  Instead, we are following the original
proposal suggested in the July 15, 1998 Notice of Data Availability
(NODA) (See 63 FR 38139) to add to 40 CFR 261.4(a)(12)(i) gasification,
as one of the recognized petroleum refining processes to which
oil-bearing hazardous secondary materials can be inserted and not be
considered a solid waste under the Subtitle C hazardous waste
regulations.  The definition of gasification however, is generally based
on the March 2002 proposal, and comments and information developed as a
result of both the NODA and that proposal.  

Today’s final rule is based on information presented in the July 1998
NODA, the final rule for oil-bearing hazardous secondary materials for
petroleum refining operations published in August 1998, and the March
25, 2002 proposed rule.  The rulemaking record for this rule
incorporates the rulemaking records for all of these notices. 

III.      Background

	The exclusion at 40 CFR 261.4(a)(12)(i) provides operators of petroleum
refineries with the ability to recycle materials generated by the
refining of crude oil to manufacture additional fuels.  In that rule, we
specifically address certain reinsertion scenarios that involved common
practices within the industry (e.g., coking and quench coking
operations).  Prior to finalizing these provisions, however, we issued a
Notice of Data Availability (NODA) specifically requesting comment on
extending the exclusion to gasification -- a process that also provides
operators of petroleum refineries the ability to extract additional
hydrocarbons from these materials by converting them into a synthesis
gas. (See 63 FR 38139, July 15, 1998.)  

	We stated in the NODA that gasification of oil-bearing hazardous
secondary materials from the petroleum refining industry may be an
activity warranting an exclusion from the definition of solid waste,
because gasification also provides a means of recovering hydrocarbons
from these materials and could be viewed as an additional process in
crude oil refining.  We also noted that a gasification system might
compete with other petroleum refining operations (i.e., coking) for
these same materials, which suggested to us that gasification is an
alternative fuel production process -- just one that was not being used
extensively in the petroleum refining industry.  

The Agency did not add gasification in the 1998 rule, choosing to
explicitly include only those petroleum refining processes discussed in
the original proposal.  In 2002 however, the Agency proposed a
different, more ambitious exclusion for hazardous waste processed in a
gasification system for the production of synthesis gas.  In that
proposal, we solicited comment on two conditional exclusions.  The first
was for oil-bearing hazardous secondary materials recycled in a
gasification system operating at a petroleum refinery or at a different
facility operating outside the petroleum refining industry.  This
proposal was different from what was proposed in the 1998 NODA, where
gasification operations were specifically identified as part of the
petroleum refining operation.  A second, much broader exclusion,
addressed all hazardous secondary materials when processed in a
gasification system for the production of synthesis gas.  This broader
exclusion is not being addressed as part of this rulemaking and is still
under consideration by the Agency.  

	Because the proposed exclusion was addressing recycling scenarios for
oil-bearing hazardous secondary materials outside petroleum refining
operations, we proposed an expanded set of conditions.  The conditions
proposed included the conditions already included in 40 CFR
261.4(a)(12)(i) (e.g., no speculative accumulation and no land placement
of the material prior to reuse), as well as conditions, that we
believed, would ensure the legitimacy of the process as a production
operation, rather than a waste treatment process.  

	The first condition specified was a definition of the types of
gasification systems capable of processing these oil-bearing hazardous
secondary materials into synthesis gas.  At the time, we were aware of a
number of devices operating in the United States (U.S.) that could claim
to be a type of gasification system, but did not gasify materials in the
same manner, or to the same extent, as the gasification systems we
considered for the proposal.  We were concerned that these devices may
be more similar to waste treatment processes than to production
operations.  

	Additionally, we proposed that the synthesis gas product from the
gasification system meet the fuel specification promulgated for
hazardous waste derived synthesis gas in the “Synthesis Gas Rule.”  
The synthesis gas specification (or syngas spec) establishes specific
physical parameters and concentration levels for contaminants and serves
as a regulatory benchmark for classifying synthesis gas produced from
hazardous waste as a fuel that can be readily marketed, rather than as a
hazardous waste fuel (see 40 CFR 261.38(b). 

Finally, we proposed that any co-product or residue generated by the
gasification system be subject to the Universal Treatment Standards
(UTS) (found at 40 CFR 268.48) for six RCRA metals (i.e., antimony,
arsenic, chromium, lead, nickel, and vanadium), if such co-product or
residue was placed on the land.  This condition was proposed to ensure
legitimacy by applying the same land disposal provisions to any
co-product and residual that would have existed had the oil-bearing
hazardous secondary materials not been excluded from the definition of
solid waste.  We reasoned that this would eliminate any incentive to
claim to be performing “gasification” for the real purpose of
avoiding treatment of metals in residues that ultimately are placed on
the land.   

	In response to the proposal, a number of commenters generally supported
the idea of promoting the reuse of oil-bearing hazardous secondary
materials from petroleum refineries to produce additional fuels,
although they also expressed concern with one or more of the proposed
conditions.  A number of other commenters, however, disagreed with our
approach.  Specifically, these commenters believed that full RCRA
Subtitle C regulation for both the oil-bearing hazardous secondary
materials and the gasification process was mandated by RCRA.  These
commenters stated that RCRA Subtitle C oversight is necessary because
gasification is merely a poor combustion process, promoting the
generation and release of toxic products of incomplete combustion (PIC),
including dioxin-containing compounds.  Conversely, other commenters
questioned, as they had for the coking and quench coking operations in
the original exclusion, whether we had any regulatory authority at all
in this situation. (See discussion at 63 FR 42121-42129, August 6,
1998.)  These commenters suggested that the gasification of oil-bearing
hazardous secondary materials generated elsewhere in the refining
process is merely the final step in extracting fuels from the crude oil
feed to the refinery and is, therefore, part of an ongoing production
process.  We also received comments on the specific conditions we
proposed as part of the exclusion.  

With regard to the specific technical issues for which we solicited
comment, we received little response.  That is, commenters did not
provide data on the composition of gasification system residues or the
composition of synthesis gas.  In addition, limited data were received
regarding the economics of operating a gasification system at a
petroleum refinery or elsewhere.  While we solicited this information
for both the proposed petroleum refinery exclusion and the broader
exclusion applicable to all hazardous waste (see 67 FR at 13695, March
25, 2002), the lack of information submitted weighed heavily on our
decision to limit today’s rulemaking specifically to the petroleum
refinery industry.  

Major comments on today’s rule are discussed elsewhere in this
preamble. 

IV.  	Development of Today’s Final Rule

Through study of existing technical reports and papers published by the
Department of Energy (DOE) and others, the Agency was aware that
gasification could be a part of the petroleum refining process.  We
solicited data to confirm this in our proposal, however commenters did
not provide a significant amount of new information, thus requiring EPA
to once again check existing information and data to confirm our
understanding of the gasification process and its use in petroleum
refinery operations.  In addition, we sought to confirm, through site
visits, how gasification was integrated into the production process at
some petroleum refineries..   

A.         How Many Gasification Systems Are Currently Operating at
Petroleum Refineries?

Petroleum refineries use gasification for the conversion of low-value
fuels and/or secondary materials, such as petroleum coke, visbreaker tar
and deasphalter pitch into synthesis gas.  Synthesis gas can then be
converted to usable products, such as hydrogen, ammonia and other
chemicals, and/or used as a fuel to produce steam and electricity. 
Oil-bearing hazardous secondary materials generated at the petroleum
refinery can also be co-gasified with these other materials to
manufacture synthesis gas.  In petroleum refining operations, electric
power generation is a preferred use for the synthesis gas.  For this
purpose, the integrated gasification combined cycle (IGCC) technology
can be integrated into the petroleum refinery process.  Except for the
gasifier and the feedstock preparation units, many of the components in
an IGCC system already exist at a petroleum refinery.  Downstream of a
gasifier, petroleum refineries, as part of their ongoing production
processes, typically have the other components of an IGCC plant,
including gas clean-up systems, Claus plants, heat recovery systems, and
steam and gas turbines.  Power generation for use within a petroleum
refinery is not a new activity and based on our research, is widely
practiced.  Seldom, however, is enough power produced to allow it to be
sold for external consumption.  With the utilization of an IGCC plant, a
refinery’s internal power needs can be readily addressed with surplus
power sold as a commodity to outside consumers.

Presently, EPA has identified four gasification systems operating at
petroleum refineries in the U.S.; one.,  One of these is an IGCC unit.
,,  The second uses the synthesis gas to produce chemicals.  The Agency
is also aware of two petroleum refineries that operate units combining
fluid coking with coke gasification, a process known as flexicokingTM.

While petroleum refinery-based gasification units are currently in
limited use in the U.S., interest in developing these systems is on the
rise.,,  .,,  Many factors may be contributing to this interest, but we
believe it is most likely related to the increasing cost of natural gas,
an increasing interest in maximizing efficiencies in the petroleum
refining process, manufacturing cleaner fuels, and reducing the
generation of waste.  Although limited in number, petroleum
refinery-based gasification systems have demonstrated positive economic
returns, while providing more flexible operations to address increases
in raw material costs.   These facilities have shown that gasification
systems can process lower value fuels or material commodities (e.g.,
petroleum coke and other petroleum secondary materials) into higher
value fuels or chemical commodities.  These systems have also
demonstrated how well gasification fits into petroleum refinery
operations and the advantages of doing so.

B.      What Conclusions Have We Drawn About Gasification Systems
Operating at Petroleum Refineries?

This Unit IV.B. explains the overall rationale for the Agency’s
decision that oil-bearing secondary materials inserted into a gasifier
are excluded from the definition of solid waste.  Analyses supporting
this decision are found elsewhere in this preamble and in the rulemaking
record, including the Response to Comment document for this rulemaking. 
In each configuration reviewed, where petroleum refineries used
petroleum coke alone or in combination with other petroleum feedstock
(including oil-bearing hazardous secondary materials), we found that the
systems are operated as part of the petroleum refining process and
produce synthesis gas as a legitimate product to further enhance the
petroleum refining operation.  We believe that a gasification system,
when operated at a petroleum refinery, will function as a component of
the overall petroleum refinery process to produce synthesis gas as its
main product.   In turn, synthesis gas can be used to manufacture usable
products, such as hydrogen, ammonia and other chemicals, and/or used as
a fuel to produce steam and electricity.  Oil-bearing hazardous
secondary materials generated by petroleum refineries, as well as other
low-value fuels, are appropriate feed materials to gasification systems
because these materials contain hydrocarbons that can be further
processed into fuels or chemicals.  The use of a gasifier to recover
these hydrocarbons is ideal because the system not only operates to
recover the hydrocarbon value for the production of a legitimate
product, but can also process the non-fuel components to yield inorganic
co-products (e.g., liquid or solid sulfur, ammonia).  In manufacturing
settings, gasification systems have historically been used to produce
commodities and have not been operated to get rid of unwanted material. 
 At petroleum refineries, a gasification system complements the
activities already being performed at the petroleum refinery, i.e., the
manufacture of fuels from crude oil. 

While some commenters have argued that gasification of oil-bearing
hazardous secondary materials is more a waste management process
involving incineration than a petroleum refining process, we refer to
the conclusions drawn in a DOE report contrasting incineration and
gasification.  DOE concluded, and we agree, that gasification and
incineration are distinct processes that can be distinguished by a
number of factors.  As discussed in the report, the factors
distinguishing the two processes are: (1) incinerators are designed to
maximize the conversion of feedstock to carbon dioxide and water;
gasifiers are designed to maximize the conversion of feedstock to carbon
monoxide and hydrogen; (2) incinerators utilize large quantities of
excess air; gasifiers utilize small quantities of oxygen; (3)
incinerators operate in a highly oxidizing environment; gasifiers
operate in a reducing environment; (4) incinerators discharge their flue
gas to the environment as a waste; gasifiers utilize their synthesis gas
for ongoing chemical, fuel production or power production as a product
gas. 

The Agency has concluded that gasification operations fall within the
scope of normal operations at petroleum refineries -- even when applied
to material that has historically been managed as waste.  The Agency
believes that recognizing gasification as a petroleum refining process,
capable of recycling oil-bearing hazardous secondary materials, achieves
the resource recovery goals of RCRA without jeopardizing human health
and the environment.  Gasification is a desirable component of fuel
manufacturing operations at a petroleum refinery because it ensures more
efficient processing of crude oil and provides the petroleum refinery
with the added flexibility to maximize its fuel production outputs. 
Therefore, we disagree with the view that the activity serves
essentially as a waste management process. 

In today’s final rule, we find that oil-bearing hazardous secondary
materials generated as part of the petroleum refinery process and
inserted into a gasification system located at a petroleum refinery,
will serve as legitimate feedstock materials and that the gasification
process, is a type of petroleum refining process warranting these
materials an exclusion from the definition of solid waste.  We have
concluded that the operation of gasification systems at petroleum
refineries is consistent with other processes that occur at petroleum
refineries (e.g., fractionation, coking, quench coking) because: (1) the
activity takes place at a petroleum refinery; (2) the system uses
feedstock only from refinery operations; (3) the system generates a
synthesis gas that, is converted to multiple products, such as steam,
electricity, hydrogen, as well as other chemicals; (4) the products
generated are consistent with the many types of products normally
generated at petroleum refineries; and (5) the system processes the raw
material by manipulating the same variables, e.g., hydrocarbons, as
other refining processes that are universally accepted to be part of a
petroleum refinery.  

V.	Today’s Final Rule

	Gasification systems, like other petroleum refining operations, are
capable of recovering fuel value or chemicals from the recycling of
oil-bearing hazardous secondary materials.  As such, we believe it is
appropriate to treat these materials in a manner consistent with the
other processes used at petroleum refineries that recover fuel value or
chemicals from crude oil -- the basic raw material used in petroleum
refining.  Today, we are amending the exclusion found at 40 CFR
261.4(a)(12)(i), by adding gasification to the list of recognized
petroleum refining processes.  We are finalizing this change to: (1)
prevent unnecessary confusion regarding the status of oil-bearing
hazardous secondary materials from the petroleum industry recycled in a
gasification system; (2) promote the use of a technologically advanced
method of extracting hydrocarbons from these materials; and (3) remove
regulatory restrictions that may limit the petroleum refining
industry’s ability to maximize the production of fuels and other
commodities from crude oil, while minimizing the production of waste
from the fuel production process.

The Agency has decided to limit the scope of this exclusion to
oil-bearing hazardous secondary materials that are gasified as part of
the petroleum refining process for the production of synthesis gas.  As
such, we are retaining only the conditions applied to oil-bearing
hazardous secondary materials in the existing exclusion at 40 CFR
261.4(a)(12)(i).  We are, however, adding one additional condition, a
definition for gasification, which is based on information presented in
the 1998 NODA, as well as the March 2002 proposal and comments and
information received in response to these notices.  

We have decided not to finalize the other conditions proposed in 2002. 
In large part, we have decided to eliminate these conditions because we
are not extending this exclusion to oil-bearing hazardous secondary
materials recycled at gasification systems operating outside the
petroleum refining industry.  The condition requiring the synthesis gas
meet the specification we developed in the regulations at 40 CFR
261.38(b)) has been removed because we now believe, based on the
compelling arguments made by commenters and a review of our rationale
for including it as a condition, that it was unnecessary and an
inappropriate application of RCRA to a petroleum fuel product.  Our
decision is strongly influenced by the operational purpose of petroleum
refineries -- the production of fuels.  Petroleum refineries create
fuels for commercial markets, and we are convinced that these
gasification systems operate within the reasonable scope of these
operations.  We have also removed the condition requiring that materials
generated by the gasification system (i.e., co-products and residuals)
not be placed on the land if they exceed the nonwastewater Universal
Treatment Standards (UTS) for antimony, arsenic, chromium, lead, nickel,
and vanadium (found at 40 CFR 268.48).  After further review, the Agency
has determined that this condition is inconsistent with the current
exclusion we are amending, and conflicts with how RCRA manages residues
from excluded materials (i.e., wastes are excluded at the point of
generation, provided the conditions of the exclusion are met.). 
Further, these constituents are not expected to leach at levels above
the UTS in the residuals from gasification at petroleum refineries. 
These changes are discussed below.

A.        Does the Conditional Exclusion Include a Definition for a
Gasification System Used at a Petroleum Refinery?

Yes.  In today’s final rule, we are promulgating a regulatory
definition for gasification systems that are used at petroleum
refineries.  For this rule, gasification is defined as a process,
conducted in any enclosed device or system, designed and operated to
process petroleum feedstock, including oil-bearing hazardous secondary
materials, through a series of highly controlled steps utilizing thermal
decomposition, limited oxidation, and gas cleaning to yield a synthesis
gas composed primarily of hydrogen and carbon monoxide gas.	

This final definition differs from the definition proposed in 2002 in a
number of ways.  We have: (1) deleted the reference to incinerators or
industrial furnaces; (2) removed the requirement for the gasifier to
slag its inorganic feed at temperatures above 2000 degrees Fahrenheit;
and (3) removed the requirement that the unit be equipped with
monitoring devices that ensure the quality of the synthesis gas.  This
revised definition reflects current information on gasification systems
at petroleum refineries and addresses the significant concerns
commenters raised regarding the proposed definition.  More importantly,
however, the definition reflects the primary purpose for using
gasification at petroleum refineries, the production of synthesis gas. 
As such, we believe that we have retained the most important
requirements of a gasification system operating at a petroleum refinery:
(1)), that it, is considered a process; and (2) it utilizes, utilizing
petroleum feedstock to yield a synthesis gas.  

In the 2002 proposal (see 67 FR at 13690), we defined a gasification
system as an enclosed thermal device and associated gas cleaning system
(or systems) that does not meet the definition of an incinerator or
industrial furnace (found at 40 CFR 260.10), and that: (1) limits oxygen
concentrations in the enclosed thermal device to prevent the full
oxidization of thermally disassociated gaseous compounds; (2) utilizes a
gas cleanup system or systems designed to remove contaminants from the
partially oxidized gas that do not contribute to its fuel value; (3)
slags inorganic feed materials at temperatures above 2000 degrees
Fahrenheit; (4) produces a synthesis gas; and (5) is equipped with
monitoring devices that ensure the quality of the synthesis gas produced
by the gasification system.

We received numerous comments criticizing various aspects of our
proposed definition.  Some commenters argued the definition, as written,
prohibited the potential use of a large number of gasification system
designs that are in use around the world.  More specifically, commenters
stated that the definition eliminated one of the gasification designs
currently processing petroleum residues in the U.S. because it did not
operate at the specified temperature or slag the residual.  Generally,
however, commenters urged the Agency to revise the definition to include
all petroleum refinery-based units currently processing petroleum
refining residues, or provide some type of site-specific variance to
allow such units the opportunity to demonstrate that they can safely
process refinery residues in their gasification system.  While the
development of a variance procedure would be a possible mechanism to
evaluate those gasifiers not meeting the definition, the Agency believes
that the definition of gasification being promulgated today addresses
the concerns raised by the commenters and provides sufficient
flexibility to allow for any number of gasification designs or
configurations to be used within a petroleum refinery.  As such, we have
not included a variance provision as part of today’s rule.

As previously mentioned, EPA has conducted a number of site visits to
gasifiers located both on site of a petroleum refinery and off-site and
has continued to research the use of gasification at petroleum
refineries.  As a result of these efforts, we have concluded that
gasification design and operation can vary substantially within the
petroleum refining industry.  We have also concluded and agree with
commenters that a variety of different gasifier designs are capable of
legitimately processing petroleum feedstock to produce a synthesis gas. 
This has given us reason to reassess the need for specifically defining
certain operating characteristics of a gasification system.  Our revised
definition of “gasification” allows additional flexibility in the
design and configuration of gasification systems to process petroleum
feedstock, including oil-bearing hazardous secondary materials, provided
the gasification system produces a synthesis gas.      

Several commenters questioned whether our definition should
differentiate gasification from incinerators and industrial furnaces
regulated under Subtitle C of RCRA.  One commenter was particularly
concerned that the proposed definition would require an affirmative
determination by regulators that the gasification system did not meet
the definition of incinerator or industrial furnace defined at 40 CFR
260.10.  Additionally, the commenter questioned whether gasification
systems also designed to recover hydrogen chloride (HCl) (which
gasification systems can be configured to recover), could also be
defined as a type of industrial furnace, (i.e., halogen acid furnace)
and thus not be able to use the exclusion.  

After weighing the value added to the definition by including the
references to industrial furnaces and incinerators (defined at 40 CFR
260.10), we are persuaded that including the reference to hazardous
waste burning incinerators and industrial furnaces in the definition is
unnecessary and could lead to confusion between the public, the
regulated community, and regulators on how to regulate these units. 
Accordingly, we have removed the references to incinerators and
industrial furnaces from the final definition.  We expect, however, that
even with this change to the definition, that certain gasification
systems could be confused with, or identified as, a type of industrial
furnace.  In these situations, where the design and operational
characteristics appear to be shared between the two types of systems, we
believe it is appropriate for regulators to review the predominant
products and process design of the system in question.  For example, if
the system recovers only small amounts of synthesis gas fuel, but
significant amounts of hydrogen chloride, and the design of the system
does not differ substantially from industrial furnaces designed to
recover hydrogen chloride (i.e., a substantial fraction of emissions are
released to the atmosphere) such a system would more appropriately be
classified as a type of industrial furnace, rather than a gasification
system.  

	The Agency received few comments on four of the operational
requirements proposed as part of the definition of gasification system:
(1) limits on oxygen concentrations in the enclosed thermal device to
prevent the full oxidization of thermally disassociated gaseous
compounds (2) production of a synthesis gas; (3) requirements for a gas
cleanup system or systems designed to remove contaminants from the
partially oxidized gas that do not contribute to its fuel value; and (4)
requirements for monitoring devices that ensure the quality of the
synthesis gas produced by the gasification system.  In general,
commenters did not have specific technical issues with the provisions,
but thought that the provisions were unclear and would benefit from
additional clarification.  For example, commenters stated that the
requirement relating to monitoring devices would benefit from EPA
identifying the type of monitoring equipment required.  In the case of
the requirement for monitoring devices, consideration of this condition
is no longer germane based on our determination that petroleum
gasification is a part of the petroleum refining operation.  In
today’s rule we have retained, with slight modifications, three of the
operational requirements.  Changes have been made to the definition to
eliminate redundancy and provide a more clear and concise regulatory
definition.  The revised definition retains the key operational
requirements of a gasification system operating at petroleum refinery -
thermal decomposition, limited oxidation, gas cleanup, and production of
a synthesis gas.  This ensures that the exclusion applies only to
gasification systems designed and operated in a manner that promotes the
conversion of hydrocarbons found in the oil-bearing hazardous secondary
materials into a synthesis gas fuelrule.   

	The operational requirement that received the most comment was for a
gasification system to “slag inorganic feed materials at temperatures
above 2000 degrees Fahrenheit.”  Commenters were divided on the need
for such a requirement.  Some believed that the slagging criteria
generally would result in a non-leachable residue, a “preferred
residual matrix.”  Others stated that the temperature requirement was
arbitrary and not technically supportable.  Additional commenters
questioned the usefulness of the term slagging and the Agency’s
rationale for deciding to prohibit non-slagging gasifiers from the
exclusion.  These commenters pointed to the fact that the residues would
be under RCRA Subtitle C jurisdiction if they exhibited a hazardous
waste characteristic based on the content and leachability of the toxic
metals.  

	We had proposed this requirement to address two issues: (1) to ensure
that gasification systems processing excluded materials operate at a
temperature sufficient to slag inorganic components found in the
materials, so metals would not leach from the residue; and (2) to reduce
the occurrence of unreacted carbon-containing compounds in the residue
formed by the gasification system.  After review of all the comments,
and a re-examination of our site visit reports and available technical
reports, we have determined that this requirement is not needed and
would inappropriately restrict those gasification systems and
configurations that could be effectively used at petroleum refineries
for the production of synthesis gas fuels.  We have found that
classifying a gasifier as slagging or non-slagging has no relationship
to a gasification system’s overall ability to effectively process
hydrocarbons for the production of synthesis gas fuel.  Similarly, if a
gasifier generates a residual that exhibits one or more of the hazardous
waste characteristics, it will be subject to the RCRA Subtitle C
hazardous waste regulations.  We believe that this should provide
adequate incentive for petroleum refineries to consider the potential
benefit of slagging gasifiers verses non-slagging units. ..  Any further
requirement by EPA would only interfere with the refineries’ ability
to most effectively achieve the same environmental endpoint.

	In the proposed rule, we further stated that gasifiers generally do not
have direct emissions to the atmosphere.  Several commenters disagreed
with this conclusion and suggested that potential releases of toxic and
hazardous air pollutants (HAP) can occur during other steps in the
gasification process.  These steps include, feedstock preparation, gas
cleanup, product recovery, and slag quenching, as well as during
start-up, shutdown or operational emergencies of the gasification
system.  These commenters further stated that the current Clean Air Act
(CAA) regulations may fail to properly address potential risk to human
health and the environment posed by these releases.  As a result, these
commenters urged EPA to make a regulatory determination that gasifiers
should be identified as an industrial furnace and subject to all
RCRA/CAA hazardous waste combustion regulations.  

	In the proposal, (See 67 FR at 13688), we recognized that gasification
systems are designed with release vents or flares that operate during
emergencies or malfunctioning operations.  Flares and release vents are
necessary to prevent damage or catastrophic failure of the gasification
system in the event of a major malfunction.  These types of relief
systems are common at facilities that manufacture products using thermal
processes.  Furthermore, the operation of flares and release vents is
regulated by each facility’s Title V CAA permit.  Our decision to
exclude, from the definition of solid waste, oil-bearing hazardous
secondary materials generated at a petroleum refinery and inserted back
into the petroleum refining process has been guided by a determination
that gasification is legitimate petroleum refining process that results
in the manufacture of a synthesis gas product.  (See discussion in
Section IV of this preamble.)  This decision allows the beneficial use
of petroleum refining oil-bearing hazardous secondary materials for the
manufacturing of a synthesis gas fuel that can be used for the
production of steam, and/or power.  Therefore, we do not agree with the
commenter’s suggestion that gasification systems operating at
petroleum refineries processing these materials are waste management
units (e.g., incinerators) and that any potential air emissions should
be subject to all RCRA/CAA hazardous waste combustion regulations. 
Emissions at a petroleum refinery operating a gasification system will
be evaluated.  However, these emissions will be evaluated for compliance
with regulations for petroleum refining operations under the authority
of the CAA.  

B.        Does the Conditional Exclusion Include a Synthesis Gas
Specification?

	No.  In today’s final rule, there is no condition requiring the
synthesis gas to meet certain physical and/or constituent
specifications.  In the 2002 proposal, the Agency included a condition
that required the synthesis gas to meet the specification for hazardous
waste derived synthesis gas found at 40 CFR 261.38(b).  We proposed to
apply the synthesis gas specification because we believed it would
ensure that the synthesis gas produced was a legitimate fuel product,
and was an appropriate condition considering we were proposing to allow
oil-bearing hazardous secondary materials to be gasified at facilities
outside a petroleum refinery.  In addition, because the Agency was
taking comment on whether to expand the exclusion to address all
hazardous secondary materials generated in other industries, we
considered such a provision to be important.  In the development of the
final rule, however, we have concluded, based on analysis of the
comments and further review of petroleum refinery-based gasification
systems, that such a condition is unnecessary and an inappropriate use
of RCRA to regulate a fuel product manufactured at petroleum refineries.

	The majority of the comments received did not specifically address the
need for a synthesis gas specification, but rather addressed the overall
inadequacy of the synthesis gas specification finalized in the
“Synthesis Gas Rule.”  Commenters suggested that the specification
was too lenient and not drawn from appropriate data.  Several commenters
also reminded the Agency of possible pending litigation.

Irrespective of the concerns with the details of a synthesis gas
specification, only a few commenters supported establishing a synthesis
gas specification.  These commenters generally agreed with the
Agency’s proposed premise of applying the synthesis gas specification
to ensure legitimacy of the gasification process and the quality of the
synthesis gas.  However, otherotherThe Agency however, is dismissing
these comments.  Other commenters suggested that applying the synthesis
gas specification was without basis and inappropriate.  Commenters
reasoned that the purpose of 40 CFR 261.38 was to provide an exclusion
from the definition of solid waste for synthesis gas generated by the
gasification of hazardous waste.  UnderUnderWhile under the 2002
proposal, they believed EPA was establishing that oil-bearing hazardous
secondary materials generated at a petroleum refinery and re-inserted
into a gasifier were excluded from the definition of solid waste because
gasification was part of the production process.  GivenGivenIf that
assumption was valid, commenters questioned the Agency’s rationale for
including a hazardous waste specification to a manufactured fuel
product, i.e., a product generated from a fossil fuel.  Commenters
reasoned that operators of gasification systems did not need a
specification for synthesis gas any more than they needed a RCRA
specification for gasoline, propane, petroleum coke, or any other
legitimate product from a petroleum refining operation.  Additionally,
somesomeSome commenters suggested that any questions regarding the
quality of the synthesis gas were answered by the use of the synthesis
gas as a fuel in power, steam, or hydrogen production on-site (subject
to CAA regulations) and should serve to ensure that the synthesis gas
was, in fact, a legitimate fuel. 

The Agency agrees with the commenters,.  In this rule, we have
determined that gasification is a an part of the petroleum refining
process and that oil-bearing hazardous secondary materials generated at
a petroleum refinery and reinserted back into a gasification system
located at a petroleum refinery refining process are excluded from the
definition of solid waste, provided the conditions of the exclusion are
met.  Hence, the Agency concludes that gasification is a legitimate fuel
process that does not require a synthesis gas specification as a
condition to ensure its legitimacy.  Gasification systems when operated
at a petroleum refinery take petroleum feedstocks and convert them into
a synthesis gas comprised primarily of hydrogen, carbon monoxide, carbon
dioxide and methane.  Petroleum feedstocks to these systems can include
petroleum coke, visbreaker tars, deasphalter pitch, as well as
oil-bearing hazardous secondary material.  Available information
suggests that the synthesis gas composition remains consistent
regardless of the petroleum input feed.  Furthermore, when used as a
fuel for power generation, information available to the Agency shows
that turbine specifications and other equipment specifications drive the
fuel specification requirements of the synthesis gas fuel.  As such, the
Agency has also concluded that applying the synthesis gas specifications
at 40 CFR 261.38 as presented in the 2002 proposal does not provide an
additional assurance that legitimate fuel operations are occurring at
gasifiers located at petroleum refineries.  Therefore, in today’s
final rule, we are not including a condition that requires the synthesis
gas generated by the gasification system to meet the specification of 40
CFR 261.38(b).  The Agency has determined that the application of a
hazardous waste derived synthesis gas specification is an inappropriate
use of the synthesis gas specification for gasification operations at a
petroleum refining.  

However, we note that today’s exclusion from the definition of solid
waste does not exempt the device from regulation under the applicable
CAA standard for the gasification device, co-product recovery units, or
any related infrastructure designed to use the synthesis gas fuel to
produce electricity.

C.       Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Material From Being Placed on the Land Prior to Insertion in
the Gasification System?

	Yes, the conditional exclusion we are amending (40 CFR 261.4(a)(12)(i))
prohibits oil-bearing hazardous secondary materials from being placed on
the land prior to insertion into the petroleum refining process.  This
prohibition will not change with the addition of gasification as a
listed petroleum refining process.  

In the proposed rule, we explained our view that this condition (i.e.,
no placement on the land prior to re-insertion into the petroleum
refining process) further defines gasification of excluded oil-bearing
hazardous secondary materials as a legitimate refining operation for
processing these materials because it requires that the excluded
materials be handled as a valuable feed to the gasification system.  We
stated that we knew of no gasification system (or for that matter, any
petroleum refinery) which stored these materials on the land, and that
to do so would indicate that such oil-bearing hazardous secondary
materials are being handled more like waste, and not as a feedstock
(since because of the physical characteristics of these oil-bearing
materials, the potential for them not to be released could no longer be
assured, and there could be large-scale losses of the secondary material
due to land placement).  Thus, we reasoned that oil-bearing hazardous
secondary materials from the petroleum refinery process should preclude
storing the material in anything other than a tank, container, or some
other device that would contain the material because as far as we knew,
the oil-bearing hazardous secondary materials were generally comprised
of tar-like, oily substances not amenable to land storage or placement.

Most of the commenters agreed with our position that some type of
restriction was appropriate to prevent the oil-bearing hazardous
secondary material from being placed or stored on the land.  However,
some commenters did not completely agree with our characterization of
these materials (i.e., tar-like oily substances) and suggested that the
prohibition take into account the physical characteristics of the
oil-bearing hazardous secondary material before a total prohibition on
land placement was implemented.  For example, some commenters believed
that the prohibition should only apply to those hazardous secondary
materials that are tar-like oily substances, while other commenters
suggested that we modify the wording of the prohibition to allow for
land placement of hazardous secondary materials if it would not endanger
the environment.  One commenter stated that the hazardous secondary
material they received from a petroleum refinery could be described as
chunky, angular, blocky or coarse particulates and could be safely
managed on the land.  However, these commenters did not provide EPA with
any characterization data that would support their claims.

Given that these hazardous secondary materials would be hazardous waste
if discarded instead of being gasified, and given that land placement of
these types of oil-bearing hazardous secondary materials is not typical
before they are reinserted back into the petroleum refinery, we see no
reason to relieve them from the existing prohibition against land
placement for all oil-bearing hazardous secondary material prior to
re-insertion into the petroleum refining process (i.e., gasified).  This
approach maintains full regulatory consistency with the exclusion found
at 40 CFR 261.4(a)(12)(i) which is being amended today to include
gasification as an identified petroleum refining process.  

D.        Does the Conditional Exclusion Prohibit Oil-Bearing Hazardous
Secondary Material From Being Speculatively Accumulated Prior to
Insertion in the Gasification System?

Yes.  In today’s rule, the conditional exclusion we are amending (40
CFR 261.4(a)(12)(i)) includes the requirement that the oil-bearing
hazardous secondary materials not be speculatively accumulated prior to
insertion into the petroleum refining process.  This provision will not
change with the addition of gasification as a listed petroleum refining
process.  

In the proposed rule, we stated that the speculative accumulation
provision ensures that legitimate quantities of oil-bearing hazardous
secondary materials are being recycled and re-inserted into the
petroleum refining process rather than being stored to avoid regulation.
 We reasoned that this condition was necessary to assure that recycling
actually occurs, and that such materials are not discarded by being
stored for extended periods of time.  Furthermore, we stated that this
condition is consistent with the no speculative accumulation condition
we adopted for excluded oil-bearing hazardous secondary materials
returned to the petroleum refinery process (40 CFR 261.4(a)(12)(i)).

As such, we are promulgating, as proposed, the speculative accumulation
provision for oil-bearing hazardous secondary materials prior to their
insertion into the petroleum refinery process.  This requirement should
ensure that such materials are not “over accumulated,” an indication
of discard, but are being legitimately recycled, which maintains
regulatory consistency with the existing exclusion we are amending at 40
CFR 261.4(a)(12)(i).

E.       Does the Conditional Exclusion Regulate Certain Metals in
Residuals Generated from the Gasification Process? 

No.  In today’s final rule, we are removing the proposed condition
that materials (both co-products and residues) generated by the
gasification system not exceed the nonwastewater Universal Treatment
Standards (UTS) (40 CFR 268.48) for antimony, arsenic, chromium, lead,
nickel, and vanadium when placed on the land.  Under today’s rule, and
consistent with both the proposal and the existing exclusion found at 40
CR 261.4(a)(12)(i), we are classifying residues generated after the
gasification process as newly generated.  The determination as to
whether the gasification residues (i.e., waste) or any other residue
generated after reinsertion into the petroleum refining process are
hazardous will be based on whether the residues exhibit a hazardous
waste characteristic(s) when generated (i.e., after the oil-bearing
hazardous material is gasified).  Should a residue exhibit a
characteristic, such as leaching toxic metals at levels above the
prescribed standards, it will be required to be managed in compliance
with all applicable RCRA hazardous waste regulations, including the Land
Disposal Restrictions (see 40 CFR 268.48).  As for co-products, they are
fully excluded as products and are outside RCRA jurisdiction unless
discarded and/or disposed.

In our proposed rule, we requested comment on a condition to the
exclusion establishing leachate limits for six toxic metals in the
gasification co- products and residuals prior to any placement on the
land.  We considered this condition to ensure that co-products and
residues generated by the gasification process and that were to be
placed on the land did not contain toxic metals with a potential for
leaching greater than allowed by the requirements of the Land Disposal
Restrictions (LDR) program.  (See 67 FR at 13691, March 25, 2002.)  In
developing this possible condition, we were influenced by the condition
established for hazardous waste-derived products that are used in a
manner constituting disposal (see 40 CFR 266.20).  These materials are
required to meet the appropriate LDR treatment standards prior to use as
products applied to the land (e.g., fertilizers).  We reasoned that
requiring this same condition for co-products and residuals would ensure
legitimate fuel manufacturing by applying the same land disposal
provisions to the co-products and residuals that would have existed had
the material (i.e., the listed waste) not been excluded from the
definition of solid waste. Further, it was reasoned that   SEQ CHAPTER
\h \r 1 this proposed condition would be needed to assure that the
gasification system is operated for the purpose claimed – conversion
of organic matter in the hazardous secondary materials into fuels (or
intermediates), while removing metals from raw synthesis gas and
trapping those metals in an inert matrix.  The levels in the proposed
condition would provide a means of quantifying this premise.  

We received comments that both supported and opposed this condition. 
Commenters 

opposed to the condition stated that there was no need to impose the UTS
requirements,

beyond what the regulations ( e.g., 40 CFR 261.4(a)(12)(i)) already
required for residues generated from the petroleum refining process
(i.e., the characteristic test), and that

EPA had provided no rationale basis for imposing the additional UTS
requirements.  As proposed, the condition would apply to any residual
regardless of its characteristic determination.  Other commenters,
however, believed that EPA had not gone far enough, and that the
residuals generated during the gasification process should be certified
to meet all the nonwastewater UTS (both organic and inorganic
constituents).  Without such limits on hazardous organics, the
commenters argued that substantial releases to the environment might
occur because these residuals would be allowed in landfills not subject
to Subtitle C regulations.  

	The Agency rejects the suggestion of the commenters that gasification
residuals should be tested for all UTS constituents.  As a result of
studies and analyses conducted by EPA in support of the listing
determinations for petroleum refinery wastes, as well as development of
the LDR treatment standards for these waste, the characterization of
these materials is well documented, and does not represent all the UTS
constituents.  The suggestion that it is necessary to require these
residuals meet all the nonwastewater UTS for all organic and inorganic
constituents is therefore without technical justification.  

	In response to the commenters arguing against imposing the UTS
requirements for the six metals, the Agency set about establishing
further justification for this condition.  This began with a more
detailed analysis of the characterization data for petroleum refining
waste collected as part of the LDR program.  We reviewed available data
presented in various Treatment Technology Background Documents to get a
better understanding of the total concentration levels of these six
metals in the listed waste.  As a result of this effort, we were able to
collect concentration data for nine listed petroleum refining wastes. 
Next, based on information collected as part of the proposed rule, as
well as information presented in two recent DOE studies, we developed
gasification scenarios using a combination of petroleum coke and
oil-bearing hazardous secondary materials as feedstock to gasifiers with
different feed rates.  As a result of this analysis, we concluded, based
on two scenarios we believe are most representative of possible
gasification activities at petroleum refineries, that gasification
residues would achieve the UTS levels for all metals, except for
vanadium in one scenario and chromium in the other.  With regard to
chromium, the concentration level was below the characteristic level,
but above the UTS level.  As for vanadium, it was determined that
petroleum coke (a product) contributed most of the vanadium to the
gasifier, and that vanadium concentrations in the gasification residuals
would not be affected when feeding petroleum coke alone or in
combination with oil-bearing hazardous secondary materials.

	Although this analysis showed chromium levels above the UTS in one
scenario, the Agency is convinced that chromium concentrations in
oil-bearing hazardous secondary materials have decreased from the levels
found in our characterization studies, which were conducted in 1988,
1992, and 1998 and therefore will be lower than what we used in our
analysis (i.e., the gasification residuals will have concentration
levels below the UTS).  This is based on information in the preamble for
the August 1998 listing rule promulgating the exclusion at
261.4(a)(12)(i) that indicates that chromium levels in these hazardous
secondary materials will decrease due to a prohibition on chromium-based
water treatment chemicals in industrial cooling towers, as a result of
Clean Air Act requirements, see 40 CFR Part 63, Subpart Q.) 
Furthermore, EPA believes that not only for chromium, but lead
concentrations (which are below the UTS levels in the analysis we
conducted) in the secondary materials will decline with time. This is
due to the overall reduction in the use of these metals throughout the
refinery (e.g., leaded gasoline is no longer produced.)  In conclusion,
as a result of the additional analysis conducted in response to
commenters concerns regarding the imposition of the UTS requirements, as
well as our decision to amend 40 CFR 261.4(a)(12)(i) because we have
determined that gasifiers are a part of the petroleum refinery process,
the Agency has eliminated the condition requiring material generated by
the gasification system to meet the UTS standards for antimony, arsenic,
chromium, lead, nickel, and vanadium prior to their placement on the
land.  As such, oil-bearing hazardous secondary materials inserted to
the gasification system, like other petroleum refining processes, are
excluded from the definition of solid waste, at the point of generation,
provided the conditions of the exclusion are met.  Residuals generated
after the gasification process are, therefore, considered a new point of
generation.  If a gasifier residual is determined to be
characteristically hazardous, it must be managed as a hazardous waste
(if discarded), including being treated to the UTS.  These standards
would require treatment for the characteristic, as well as any
underlying hazardous constituents reasonably expected to be present. 
Underlying hazardous constituents include both organic and inorganic
constituents.  This is consistent with the current petroleum refinery
exclusion found at 40 CFR 261.4(a)(12)(i), and addresses our greatest
concern – assuring that gasification residues do not create potential
risks when disposed.

	As a final note, the Agency distinguishes between residuals generated
from the gasifier and gasifiers from those residuals generated from the
processing of oil-bearing hazardous secondary materials that are placed
on the land before they are reinserted into the petroleum process.  EPA
discussed in the final rule for the petroleum refinery exclusion (63 FR
42110, August 6, 1998), that some oil-bearing hazardous secondary
materials cannot be directly inserted into a particular petroleum
refining process, and therefore may require some type of processing or
preparation beforehand (e.g., centrifugation, desorption, settling,
etc.).  See 63 FR at 42113-42114, 42128.  These activities are generally
viewed as part of normal petroleum refining operations.  

	During the 1998 rulemaking, however, we were particularly concerned
with the management of any residuals generated from the processing or
recycling of oil-bearing hazardous secondary materials prior to or
before insertion back to the petroleum refining process, and thus
developed an approach to ensure that if such residuals are discarded,
that they continue to be managed appropriately.  In the 1998 final rule,
we clarified that the exclusion for oil-bearing hazardous secondary
materials returned to the petroleum refining process only extends to the
materials actually inserted into the petroleum refinery process, and any
residuals generated from recycling or processing oil-bearing hazardous
secondary materials prior to insertion into the refining process that:
(1) would have otherwise met a listing description when originally
generated; and (2) are disposed of or intended for disposal, are
designated as F037 waste and must be managed in accordance with all the
applicable Subtitle C RCRA hazardous waste requirements.  The language
was intended to clarify that residuals that are not ultimately inserted
are not excluded, and that these discarded residuals are classified as
F037 waste.  

	The Agency did not include in the F037 listing residuals generated
after reinsertion into the petroleum refining process, e.g., coke fines
from coking operations.  These types of residues generated after
insertion into the petroleum refining process, are considered newly
generated waste subject to the characteristic test, and not F037 waste. 
This is the exact reasoning we are applying to today’s rule, i.e., if
residuals are generated as a result of the processing of oil-bearing
hazardous secondary materials prior to gasification, and if and these
residuals are intended for discard and the original oil-bearing
hazardous secondary material was a listed waste, these residuals are
classified as F037 waste.  Similarly, if the original waste exhibited
one or more hazardous waste characteristics, and the processing, prior
to gasification, resulted in a residual destined for disposal, that
residue would be characterized as a newly generated waste, subject to
the characteristic test.

F.         Does the Conditional Exclusion Require Additional
Recordkeeping and Reporting Requirements?

No.  Under today’s rule, no additional recordkeeping or reporting
requirements will be required.  Under the exclusion at 40 CFR
261.4(a)(12)(i), oil-bearing hazardous secondary materials are not solid
wastes, for purposes of Subtitle C regulation, and therefore are not (by
definition) hazardous wastes from the point of generation.  Therefore,
requirements that normally apply to the management of hazardous wastes,
such as notification or the use of a hazardous waste manifest, do not
apply to these materials, provided the conditions of the exclusion are
satisfied.  

	In the approach used for the proposed rule, oil-bearing hazardous
secondary materials could be processed in a gasification system either
on-site or off-site of a petroleum refinery (i.e., materials could be
sent to gasifiers at facilities that are not located within petroleum
refineries (SIC 2911)).  We noted that allowing these materials to go to
facilities outside the petroleum refining industry was somewhat
different and more expansive than what was permitted for the other
processes previously included in 40 CFR 261.4(a)(12)(i).  Because of
this expansion, we asked for comment on whether additional records
and/or reporting requirements might be necessary.  We proposed this
alternative strategy (i.e., gasification facilities could be located
either on-site or off-site of a petroleum refinery) because we believed
that excluding oil-bearing hazardous secondary materials processed in
gasification systems operating physically outside of a petroleum
refinery could still be an extension of the petroleum refining process. 
It is not unusual for the refining of oil into fuels to occur at
multiple locations.  

Many commenters generally were supportive of allowing off-site
facilities as part of the exclusion.  However, there were some
commenters that strongly believed that gasification should only occur at
a petroleum refinery.  Commenters supporting off-site gasification
agreed with the Agency’s assessment that any gasification process
operated off-site would be technically indistinguishable from the types
of gasifiers operated at a petroleum refinery.  One commenter believed
that generators would be better served by transporting the oil-bearing
hazardous secondary materials to a centralized processing facility for
conversion to synthesis gas, and if the exclusion is not extended to
"off-site" gasification, the exclusion would be meaningless and have
limited, if any, practical use.

	The Agency recognizes and agrees, in part, with the potential
flexibility afforded to petroleum refineries that have an option of
using off-site gasification facilities (i.e., gasification systems not
located at a petroleum refinery).  However, we have decided not to
promulgate this aspect of the rule.  The Agency has concluded that a
gasification operation located off-site of a petroleum refinery is
inconsistent with our basic premise for promulgating this exclusion –
gasification is a part of the petroleum refining process.  As such, EPA
is electing to simplify its approach today by allowing this exemption
only for facilities that clearly meet the definition of petroleum
refineries.   It should be noted, however, that under the provisions of
the exclusion, oil-bearing hazardous secondary materials may be inserted
into the same petroleum refinery where they are generated, or sent
directly to another petroleum refinery, and still be excluded under this
provision.  

VII.     What Will the Effect of the Final Rule Be on Recycling and
Energy Recovery?

	Predicting the impacts of any rule is a difficult task.  In most cases,
the marketplace determines the adoption of new technologies and/ or
practices.  In the case of gasification, it is doubly difficult as both
the waste management market and the fuels market will impact adoption of
the technology more than any regulatory provision.  Today’s
conditional exclusion provides operators of petroleum refineries an
option to consider.  This does not mean that every petroleum refinery
will adopt this technology as part of their operations, but it may mean
that some will adopt the technology to provide for power or steam
production less expensively, or for the generation of hydrogen used
elsewhere in the petroleum refining process, or sold as a fuel or
feedstock.  What the rule does do is provide operational flexibility to
allow petroleum refiners to adopt a technology that generates valuable
products as a result of processing oil-bearing hazardous secondary
materials that can and have historically been managed as solid and
hazardous waste.  With this rulemaking, petroleum refiners can decide
whether to invest in the development of gasification with the knowledge
that it will also allow them to increase their production efficiency and
reduce their costs through the conversion of these materials. 

VIII.    How Will Today's Regulatory Changes Be Administered and
Enforced in the States?

Under section 3006 of RCRA, EPA may authorize qualified states to
administer their own hazardous waste programs in lieu of the federal
program within the state.  Following authorization, EPA retains
enforcement authority under sections 3008, 3013, and 7003 of RCRA,
although authorized states have primary enforcement responsibility.  The
standards and requirements for state authorization are found at 40 CFR
Part 271.

Prior to enactment of the Hazardous and Solid Waste Amendments of 1984
(HSWA), a state with final RCRA authorization administered its hazardous
waste program entirely in lieu of EPA administering the federal program
in that state.  The federal requirements no longer applied in the
authorized state, and EPA could not issue permits for any facilities in
that state, since only the state was authorized to issue RCRA permits. 
When new, more stringent federal requirements were promulgated, the
state was obligated to enact equivalent authorities within specified
time frames.  However, the new federal requirements did not take effect
in an authorized state until the state adopted the federal requirements
as state law.

In contrast, under RCRA section 3006(g) (42 U.S.C. 6926(g)), which was
amended by HSWA, new requirements and prohibitions imposed under HSWA
authority take effect in authorized states at the same time that they
take effect in unauthorized states.  EPA is directed by the statute to
implement these requirements and prohibitions in authorized states,
including the issuance of permits, until the state is granted
authorization to do so.  While states must still adopt HSWA related
provisions as state law to retain final authorization, EPA implements
the HSWA provisions in authorized states until the states do so.

Authorized states are required to modify their programs only when EPA
enacts federal requirements that are more stringent or broader in scope
than existing federal requirements.  RCRA section 3009 allows the states
to impose standards more stringent than those in the federal program
(see also 40 CFR 271.1).  Therefore, authorized states may, but are not
required to, adopt federal regulations, both HSWA and non-HSWA,
considered less stringent than previous federal regulations.

Today's exclusion is finalized pursuant to non-HSWA authority and is
considered to be less stringent than the current federal requirements.
Therefore, states will not be required to adopt and seek authorization
for the finalized changes. EPA will implement the changes to the
exemptions only in those states which are not authorized for the RCRA
program.  Nevertheless, EPA believes that this rulemaking has
considerable merit, and we thus strongly encourage states to amend their
programs and become federally-authorized to implement this rule.

IX.  	What Are the Costs and Benefits of the Final Rule?

		The costs and benefits of any regulatory action are traditionally
measured by the net change in social welfare that it generates.  The
Agency’s economic assessment conducted in support of today’s final
rule evaluates costs, cost savings (benefits), waste quantities
affected, and other impacts, such as environmental justice, children’s
health, unfunded mandates, regulatory takings, and small entity impacts.
 To conduct this analysis, we prepared a baseline characterization for
waste management and gasification at petroleum refineries, developed and
implemented a methodology for examining impacts, and followed
appropriate guidelines and procedures for examining equity
considerations, children’s health, and other impacts.  Because EPA's
data are limited, the estimated findings from these analyses should be
viewed as national, not site-specific impacts.

		Proper baseline specification is vital in the assessment of
incremental costs, benefits, and other economic impacts associated with
a rule that would expand the exclusion for oil-bearing hazardous
secondary materials that are utilized to generate fuels and other
chemicals.  The baseline essentially describes the world absent any
expanded exclusion.  The incremental impacts of today’s final rule are
evaluated by predicting post-rule responses with respect to baseline
conditions and actions.  The baseline, as applied in this analysis, is
assumed to be the point at which the final rule is published.  A full
discussion of baseline specifications is presented in the economic
assessment document completed for this rule. 

As outlined above, the final rule creates an exclusion for oil-bearing
hazardous secondary material generated at a petroleum refinery if this
material is used at a petroleum refinery as an input for the production
of synthesis gas.  Because not all petroleum refineries will elect to
include a gasification system as part of their petroleum refinery, the
impacts of the final rule will depend significantly on the number of
petroleum refineries that decide to adopt the technology and use the
exclusion and the baseline waste management practices of these petroleum
refineries.  To account for these factors in this analysis, a bottom-up
analytic approach was developed for estimating impacts based on the
decisions of individual petroleum refineries to exclude or not exclude
their oil-bearing hazardous secondary materials under the final rule. 
The analysis of each affected petroleum refinery begins by estimating
the likely costs and benefits associated with its potential use of the
exclusion.  A key assumption of the analysis is that a petroleum
refinery will divert its oil-bearing hazardous secondary materials to
gasification if the following two conditions apply: (1) the benefits
realized by the petroleum refinery if it uses the exclusion exceed the
related costs, and (2) the benefits realized by the gasification system
receiving the petroleum refinery's oil-bearing hazardous secondary
materials exceed the costs associated with accepting this material.  

After determining whether a petroleum refinery is likely to divert its
oil-bearing hazardous secondary materials to gasification, we estimate
the total impacts associated with its decision to use or not use the
exclusion.  If the petroleum refinery is unlikely to use the exclusion,
we assume zero impacts.  If the analysis suggests that the petroleum
refinery will use the exclusion, we estimate impacts as the sum of three
items: (1) the savings that the petroleum refinery will experience by
diverting its oil-bearing hazardous secondary materials to gasification,
(2) savings for the petroleum refinery that receives this material and
uses it as a feedstock in its gasification system, and (3) indirect
third-party costs.  Indirect third-party costs include increased virgin
fuel and material costs for facilities that receive and manage the
petroleum refinery's oil-bearing hazardous secondary materials in the
baseline (i.e., prior to the promulgation of the final rule) and either
burn it for energy recovery or recycle it to recover metals or other
valuable materials. 

To complete our analysis and estimate the total impacts of the final
rule, we summed the impacts associated with oil-bearing hazardous
secondary materials diverted to gasification under the exclusion.  In
addition, we assessed the impacts of the rule under two scenarios to
account for uncertainty in the operational status of gasification
systems that are planned, but have not yet gone online: a low-capacity
scenario reflecting existing gasification capacity and a high-capacity
scenario reflecting existing and planned capacity.

	This rule is projected to result in a benefit to society in the form of
net cost savings to the private sector, on a nationwide basis, thereby
allowing for the more efficient use of limited resources elsewhere in
the market.  For more detail regarding the data sources, key
assumptions, and any limitations associated with the analyses of the
economic impacts, the reader is referred to the economic assessment
document completed for this rule, which can be found in the docket to
this rulemaking.  

	This rule is projected to result in a benefit to society in the form of
net cost savings to the private sector, on a nationwide basis, thereby
allowing for the more efficient use of limited resources elsewhere in
the market.

As described in the methodology overview in EPA’s economic assessment
document, we estimated the impacts of the final rule under two
gasification capacity scenarios: (1) a low-capacity scenario that
reflects the capacity of the three petroleum refinery gasification
systems that are known to be operating; and (2) a high-capacity scenario
that reflects the capacity of these three systems plus two additional
units that were planned as of 2003, but have not yet gone online. 
Results for both of these scenarios are presented as a range of the
potential net social benefits of the rule, in order to help account for
the uncertainty regarding the future operational status of planned units
yet in operation.  

The central conclusion of our analysis states that approximately 324,300
tons of oil-bearing hazardous secondary materials generated by 152
refineries would qualify for the exclusion each year. Of this quantity,
petroleum refineries currently send approximately 205,500 tons offsite
for disposal or recycling; the remaining 118,800 tons are processed
onsite by petroleum refineries.  Of the 324,300 tons of oil-bearing
hazardous secondary material qualifying for the exclusion, between
123,300 and 177,000 tons are likely to be excluded by petroleum
refineries each year.  This represents approximately 38 percent to 55
percent of the material eligible for the exclusion. 

We estimate that the rule will yield between $46.4 million and $48.7
million in net social benefits per year.  Avoided waste management costs
make up the most significant share of the benefits of the rule, followed
by feedstock savings for gasification systems.  Commercial waste
management facilities that manage oil-bearing hazardous secondary
materials in the baseline may experience annual revenue losses of $10.8
million to $15.1 million under the final rule.  Based on the limited
data available on the revenues of these facilities, this loss represents
a small fraction of their revenues.  The impact of the final rule
depends significantly on the cost of incineration.  The impacts reflect
the average cost of incinerating bulk sludge, as reported by the
Environmental Technology Council (ETC).  If we use the low end of ETC's
cost range, the net social benefits of the rule decline to $5.2 million
to $25.5 million per year.

X.       Statutory and Executive Order Reviews

A.	Executive Order 12866: Regulatory Planning and Review

	Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action
is a “significant regulatory action.”  It has been determined that
this rule is a “significant regulatory action” because it raises
novel legal or policy issues arising out of legal mandates, the
President’s priorities, or the principles set forth in the Executive
Order.  Accordingly, EPA submitted this rule to the Office of Management
and Budget (OMB) for review under Executive Order 12866 and any changes
made in response to OMB recommendations have been documented in the
docket for this action.  

	

	In addition, EPA prepared an analysis of the potential costs and
benefits associated with this action.  As indicated above, the annual
cost savings of the rule are estimated to be $46.4 million to $48.7
million.  This analysis is contained in the document “Assessment of
the Potential Costs, Benefits, and Other Impacts of the Exclusion for
Gasification of Petroleum Oil-Bearing Secondary Materials – Final
Rule.”  A copy of the analysis is available in the docket for this
regulation.  

B.	Paperwork Reduction Act 

	This action does not impose an information collection burden under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.  The
EPA is amending an existing exclusion from the definition of solid waste
that applies to hazardous secondary materials generated at a petroleum
refinery when these materials are inserted back into the petroleum
refining process (see current exclusion found at 40 CFR
261.4(a)(12)(i)).  With today’s final rule, the conditional exclusion
will be revised to add “gasification” to the list of identified
petroleum refinery processes into which secondary materials can be
legitimately recycled.  Materials excluded under 40 CFR 261.4(a)(12)(i)
are not solid wastes for purposes of Subtitle C regulation, and
therefore are not (by definition) hazardous wastes from the point of
generation.  Therefore, requirements that normally apply to the
management of hazardous wastes, such as notification or the use of a
hazardous waste manifest, do not apply to these materials, provided the
conditions of the exclusion are satisfied.  

             Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to comply
with any previously applicable instructions and requirements; train
personnel to be able to respond to a collection of information; search
data sources; complete and review the collection of information; and
transmit or otherwise disclose the information.  An agency may not
conduct or sponsor, and a person is not required to respond to a
collection of information unless it displays a currently valid OMB
control number. The OMB control numbers for EPA's regulations in 40 CFR
are listed in 40 CFR Part 9. 

C.	Regulatory Flexibility Act

	The Regulatory Flexibility Act (RFA) as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 USC 601 et seq,
generally requires an agency to prepare a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements under the Administrative Procedure Act, or any other
statute.  This analysis must be completed unless the agency is able to
certify that the rule will not have a significant economic impact on a
substantial number of small entities.  Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions.

For purposes of assessing the impacts of today’s rule on small
entities, small entities   SEQ CHAPTER \h \r 1 are defined as: (1) a
small business as defined by the Small Business Administration’s (SBA)
regulations at 13 CFR 121.201; (2) a small governmental jurisdiction
that is a government of a city, county, town, school district or special
district with a population of less than 50,000; and (3) a small
organization that is any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.

	

The final rule is projected to result in benefits/cost savings for those
petroleum refineries that use the exclusion.  In addition, those
petroleum refineries that choose not to take advantage of the subject
exclusion would experience no direct impact from this final rule. 
Consequently, the rule is not expected to adversely affect small
entities that generate oil-bearing hazardous secondary materials
eligible for the exclusion.  Nevertheless, we developed
facility-specific impact estimates for petroleum refineries that may be
classified as small entities to show how they would likely benefit from
the final rule.  The SBA considers a petroleum refinery to be a small
business if it has “no more than 1,500 employees or more than 125,000
barrels per calendar day total Operable Atmospheric Crude Oil
Distillation capacity.”  Based on the available data, it is not
feasible to measure the distillation capacities of each refinery
affected by the rule; therefore, we relied on facility employment data
to determine which petroleum refineries are small entities.  Our
analysis of employment data suggests that 37 of the 152 refineries
affected by the rule are small entities.

The benefits (cost savings) of the final rule on each small business are
expected to range from $0 to $2.0 million per year.  It is further
estimated that the aggregate small entity impacts total $2.1 million to
$2.5 million per year in cost savings, which represents 4.3 to 5.4
percent of the annual impact of the final rule. Similarly, the quantity
of material eligible for the exclusion that is generated by small
businesses, 16,895 tons, accounts for 5.2 percent of the total
oil-bearing hazardous secondary material tonnage eligible for the
exclusion.  

In addition to petroleum refineries characterized as small entities, the
final rule may also impact small commercial waste management facilities
that currently manage petroleum refinery waste.  These facilities may
indirectly experience a loss in revenues as the result of the rule if
the oil-bearing hazardous secondary material is diverted away from these
facilities to petroleum refineries with gasification systems.  However,
because this rule is deregulatory in nature and constitutes an exclusion
available only to petroleum refineries that generate oil-bearing
hazardous secondary materials, small waste management facilities are
therefore considered to be non-regulated small entities.  Furthermore,
any revenue losses that may be experienced by such non-regulated small
entities constitute secondary (or indirect) impacts, and as a result,
are outside the normal scope of a regulatory flexibility analysis.

After considering the economic impacts of today’s rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities.  In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the primary
purpose of the regulatory flexibility analyses is to identify and
address regulatory alternatives “which minimize any significant
economic impact of the rule on small entities.”

5 USC 603 and 604.  Thus, an agency may certify that a rule will not
have a significant economic impact on a substantial number of small
entities if the rule relieves regulatory burden, or otherwise has a
positive economic effect on all of the small entities subject to the
rule.  

D.	Unfunded Mandates Reform Act				

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector.  Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with "Federal mandates" that may
result in expenditures to State, local, and tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any one
year.  Before promulgating an EPA rule for which a written statement is
needed, section 205 of the UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective or least burdensome alternative that
achieves the objectives of the rule.  The provisions of section 205 do
not apply when they are inconsistent with applicable law.  Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted.  Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan.  The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.

Based on these criteria set forth by the UMRA, the final rule does not
contain a significant unfunded mandate.  As reported in the analytic
results presented above, the rule is not likely to result in annualized
costs of $100 million or more, either for the private sector or for
state, local, and tribal governments. 

Today’s rule contains no federal mandates (under the regulatory
provisions of Title II of the UMRA) for state, local, or tribal
governments or the private sector, as the rule imposes no enforceable
duty on any State, local or tribal governments or the private sector.
Furthermore, EPA has determined that this rule contains no regulatory
requirements that might significantly or uniquely affect small
governments.  Thus today’s rule is not subject to the requirements of
section 202 and 205 of UMRA.

E.	Executive Order 13132: Federalism

	Executive Order 13132, entitled “Federalism”(64 FR 43255, August
10,199) requires EPA to develop an accountable process to ensure
“meaningful and timely input by state and local officials in the
development of regulatory policies that have Federalism implications.”
 “Policies that have Federalism implications” is defined in the
Executive Order to include regulations that have “substantial direct
effects on the states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government.”

This final rule does not have Federalism implications.  It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132, because it will not impose any
requirements on states or any other level of government.  Thus, the
requirements of Section 6 of the Executive Order do not apply to this
rule.

F.	Executive Order 13175: Consultation and Coordination with Indian
Tribal Governments 

	Executive Order 13175, entitled “Consultation and Coordination with
Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires
EPA to develop an accountable process to ensure “meaningful and timely
input by tribal officials in the development of regulatory policies that
have tribal implications.”  This final rule does not have tribal
implications, as specified in Executive Order 13175.  No Tribal
governments are known to own or operate petroleum refineries that
generate oil-bearing hazardous secondary material subject to the final
rule.  Thus, Executive Order 13175 does not apply to this rule.  

G.	Executive Order 13045: Protection of Children from Environmental
Health Risks & Safety Risks

Executive Order 13045: “Protection of Children from Environmental
Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies
to any rule that: (1) is determined to be “economically significant”
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children.  If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.

EPA interprets Executive Order 13045 as applying only to those
regulatory actions that are based on health or safety risks, such that
the analysis required under section 5-501 of the Order has the potential
to influence the regulation. This final rule is not subject to Executive
Order 13045 because it does not establish an environmental standard
intended to mitigate health or safety risks.

H.	Executive Order 13211: Actions that Significantly Affect Energy
Supply,

Distribution, or Use

This rule is not a “significant energy action” as defined in
Executive Order 13211, “Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355
(May 22, 2001)), because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy.  On the contrary,
this rule is expected to result in energy savings as described below.  

EPA estimates that of the 324,300 tons of oil-bearing hazardous
secondary material qualifying for the exclusion, approximately 36,735
tons are currently managed through energy recovery in the baseline. 
Based on the results of our analysis, we estimate that between 3,700 to
18,700 tons of the 36,735 tons currently being reported as being
recovered (e.g., managed) for energy recovery will be diverted to
gasification at petroleum refineries as a result of the final rule. This
represents an energy loss of 19,800 to 101,300 MMBtu for facilities that
manage this material for energy recovery in the baseline.  This is the
equivalent of 3,400 to 17,500 barrels of crude oil per year.  The
petroleum refineries that gasify this oil-bearing hazardous secondary
material under the final rule, however, would use the resulting
synthesis gas as a fuel for the production of power or other petroleum
products, which would (at least partially) offset the 19,800 to 101,300
MMBtu energy loss mentioned above.  Moreover, gasification of the
119,600 to 158,300 tons of excluded material not burned for energy
recovery in the baseline would yield additional energy savings. 
Assuming that all of the energy content of this material is retained in
the resulting synthesis gas, the gasification of this material
represents energy savings of 648,300 to 858,000 MMBtu per year. 
Therefore, accounting for the estimated energy loss of 19,800 to 101,300
MMBtu associated with oil-bearing hazardous secondary material burned
for energy recovery in the baseline, this rule could yield a net energy
savings ranging from 628,500 to 756,700 MMBtu per year.

I.  .	National Technology Transfer and Advancement Act of 1995

  SEQ CHAPTER \h \r 1   SEQ CHAPTER \h \r 1 	Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (“NTTAA”),
Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use
voluntary consensus standards in its regulatory activities unless to do
so would be inconsistent with applicable law or otherwise impractical. 
Voluntary consensus standards are technical standards (e.g., materials
specifications, test methods, sampling procedures, and business
practices) that are developed or adopted by voluntary consensus
standards bodies.  The NTTAA directs EPA to provide Congress, through
OMB, explanations when the Agency decides not to use available and
applicable voluntary consensus standards.

The final rule does not involve technical standards.  Therefore, EPA did
not consider the use of any voluntary consensus standards.

J.	Executive Order 12898: Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal
executive policy on environmental justice.  Its main provision directs
federal agencies, to the greatest extent practicable and permitted by
law, to make environmental justice part of their mission by identifying
and addressing, as appropriate, disproportionately high and adverse
human health or environmental effects of their programs, policies, and
activities on minority populations and low-income populations in the
United States.  

EPA has determined that this final rule will not have disproportionately
high and adverse human health or environmental effects on minority or
low-income populations because it does not affect the level of
protection provided to human health or the environment.

Under the final rule, EPA estimates that 123,000 to 177,000 tons of
oil-bearing hazardous secondary material will be diverted to
gasification processes from their baseline disposition at hazardous
waste treatment, storage, and disposal facilities (TSDFs).  As such, the
final rule will concentrate the processing of excluded material at the
limited number of petroleum refineries that could potentially use this
material as a feedstock under the final rule.  However, EPA does not
believe that gasification of this material represents a greater risk to
the public than baseline management practices.  Rather than managing the
excluded material as hazardous waste and transporting it to more widely
dispersed TSDFs, as is currently the case (e.g., under the baseline),
the final rule would help limit distribution of these wastes such that
they are instead managed at their source of generation (e.g., petroleum
refineries).  

EPA also assessed the demographic characteristics of populations living
within a one-mile radius of petroleum refineries with gasification
systems using geo-coded data from the U.S. Census Bureau.  This analysis
shows that the areas surrounding gasification systems affected by the
rule have disproportionately high minority and low-income populations
when compared to the national average.  However, based on a number of
published studies, areas in close proximity to TSDFs and combustion
facilities also have disproportionately high minority and low-income
populations that are similar to or greater than those of petroleum
refineries with gasification systems. For instance, among the
individuals living within one mile of the existing and planned
gasification systems included in our analysis, 15.8 percent are
low-income individuals, compared to 15.7 percent and 22.3 percent near
TSDFs and hazardous waste combustion facilities, respectively. 
Similarly, 28.1 percent of the individuals living near existing and
planned gasification systems are minorities, compared to 27.2 percent
living near TSDFs and 38.3 percent living near hazardous waste
combustion facilities.  These findings show that the percentages of
low-income and minority populations near TSDFs are similar to or greater
than those of populations living near petroleum refineries with
gasification systems.

The implication of our analyses is that low-income and minority
populations will not bear a disproportionate share of any human health
or environmental effects associated with shifting the processing of
excluded oil-bearing hazardous secondary material to gasification
systems.  Furthermore, as less oil-bearing hazardous secondary material
will be received by TSDFs and hazardous waste combustion facilities,
low-income and minority populations living near these facilities would
likely experience a potential reduction in risk under the final rule.

K.	Congressional Review Act 

	The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating the
rule must submit a rule report, which includes a copy of the rule, to
each House of the Congress and to the Comptroller General of the United
States.  EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register.  A major rule cannot
take effect until 60 days after it is published in the Federal Register.
 This action is not a “major rule” as defined by 5 U.S.C. 804(2). 
This rule will be effective [INSERT 30 DAYS AFTER DATE OF PUBLICATION].

List of Subjects

40 CFR Part 260

Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous waste, Reporting and
recordkeeping requirements.  

40 CFR Part 261

Excluded hazardous waste, Hazardous waste, Recycling, Reporting and
recordkeeping requirements.

Dated                                                               
Stephen L. Johnson

	Administrator

For the reasons set out in the preamble, title 40 of the Code of Federal
Regulations is amended as follows:

PART 260–HAZARDOUS WASTE MANAGEMENT SYSTEM; GENERAL

1.  The authority citation for part 260 continues to read as follows:

Authority: 42 U.S.C. 6905, 6912(a), 6921-6927, 6930, 6934, 6935, 6937,
6938, 6939, and 6974.

Subpart B - Definitions

2.  Section 260.10 is amended by adding in alphabetical order the
definition of “Gasification” to read as follows:

Section 260.10 Definitions.

*      *       *       *       *

Gasification.  For the purpose of complying with 40 CFR 261.4(a)(12)(i),
gasification is a  process, conducted in an enclosed device or system,
designed and operated to process petroleum feedstock, including
oil-bearing hazardous secondary material through a series of highly
controlled steps utilizing thermal decomposition, limited oxidation, and
gas cleaning to yield a synthesis gas composed primarily of hydrogen and
carbon monoxide gas.

*      *       *       *       *

PART 261 - IDENTIFICATION AND LISTING OF HAZARDOUS WASTE

1.  The authority citation for part 261 continues to read as follows:

Authority: 42 U.S.C. 6905, 6912(a), 6921, and 6938.

2.  Section 261.4 is amended by revising paragraph (a)(12)(i) to read as
follows:

(12)(i)  Oil-bearing hazardous secondary materials (i.e., sludges,
byproducts, or spent materials) that are generated at a petroleum
refinery (SIC code 2911) and are inserted into the petroleum refining
process (SIC code 2911 - including, but not limited to, distillation,
catalytic cracking, fractionation, gasification (as defined in 40 CFR
260.10) or thermal cracking units (i.e., cokers)) unless the material is
placed on the land, or speculatively accumulated before being so
recycled.  Materials inserted into thermal cracking units are excluded
under this paragraph, provided that the coke product also does not
exhibit a characteristic of hazardous waste.  Oil-bearing hazardous
secondary materials may be inserted into the same petroleum refinery
where they are generated, or sent directly to another petroleum refinery
and still be excluded under this provision.  Except as provided in
paragraph (a)(12)(ii) of this section, oil-bearing hazardous secondary
materials generated elsewhere in the petroleum industry (i.e., from
sources other than petroleum refineries) are not excluded under this
section.  Residuals generated from processing or recycling materials
excluded under this paragraph (a)(12)(i), where such materials as
generated would have otherwise met a listing under subpart D of this
part, are designated as F037 listed wastes when disposed of or intended
for disposal.  

*      *       *       *       *

 	The existing exclusion found at 40 CFR 261.4(a)(12)(i) also requires
that the oil-bearing hazardous secondary material inserted into the
petroleum refinery process does not result in the coke product
exhibiting one or more of the hazardous waste characteristics.  

 	However, it is likely that if we chose to move forward with the
broader exclusion, the Agency would issue a supplemental proposal before
it makes any final decision.  

 	For purposes of this preamble discussion, we are using the term,
“,” Synthesis Gas Rule” to refer to the regulation found at 40 CFR
261.38(b).  This regulation was developed as part of the RCRA Comparable
Fuels Exclusion that provides a conditional exclusion from RCRA Subtitle
C for fuels which are produced from a hazardous waste, but which are
comparable to some currently used fossil fuels.  The entire preamble and
rule can be found in 63 FR 33782, June 19, 1998.  Hazardous Waste
Combustors; Revised Standard; Final Rule -- Part I: RCRA Comparable Fuel
Exclusion; Permit Modification for Hazardous Waste Combustion Units;
Notification of Intent to Comply; Waste Minimization and Pollution
Prevention Criteria for Compliance Extensions.

 	We also solicited comment on a number of approaches to revise the
synthesis gas specifications found at 40 CFR 261.38(b).  (See 67 FR at
13694, March 25, 2002.)  In particular we were interested in revised
standards for the highly volatile metals and some organic constituents. 

 	One commenter described the composition of their residue streams for
their specific gasification system; however, no constituent
concentration data was provided.  In this case, the commenter described
inorganic residues that vitrify into a leach resistant glass, solid
particulates of baghouse dust and a dissolved salt scrubber solution.

A few comments were received on the economics of the gasification
process.  Several commenters disagreed with our assessment of the
economics of running a gasification system.  One commenter disagreed
with our statements that the cost of building and operating a
gasification system is sufficient to guarantee high quality products. 
Other commenters stated that the changes we were proposing would not
lower the regulatory barriers to using gasification as part of the
production process.  

 	Site visits reports can be found in the docket supporting this rule. 
Many of the references used in support of today’s rulemaking are
identified in footnotes to this preamble.  The reader is also referred
to the docket for additional resources collected and reviewed during the
development of this rule.

 	Data pertaining to operational gasification systems processing
secondary materials from petroleum refineries was developed from a
review of the Gasification Technology Council’s database. Based on
information obtained from this database, there are 16 gasification
systems operating at petroleum refineries outside the U.S.  See email
correspondence from Mr. James Childress, Executive Director,
Gasification Technology Council to Ms. Elaine Eby, USEPA.  Re: 
Operational Gasification Systems Processing Petroleum Refining Residues
at Petroleum Refineries.  July 2007.

 	Data pertaining to operational gasification systems processing
secondary materials from petroleum refineries was developed from a
review of the Gasification Technology Council’s database. Based on
information obtained from this database, there are 16 gasification
systems operating at petroleum refineries outside the U.S.  See email
correspondence from Mr. James Childress, Executive Director,
Gasification Technology Council to Ms. Elaine Eby, USEPA.  Re: 
Operational Gasification Systems Processing Petroleum Refining Residues
at Petroleum Refineries.  July 2007.

 	Experience With Low Value Feed Gasification at the El Dorado, Kansas
Refinery by Gary DelGrego.  Texaco Power and Gasification.  Presented at
the 1999 Gasification Technology Conference.  Recently the Agency
learned that the IGCC unit operating at the El Dorado, Kansas refinery
was shut down in 2006.    

 	IGCCs combine the gasification reactor with a combined cycle power
turbine designed to use the synthesis gas.  In IGCC systems, the
synthesis gas is injected into the combustion turbine and ignited.  The
resulting high energy exhaust from the combustion of synthesis gas in
the turbine is used to turn a generator.  Steam and additional electric
power is recuberated in a follow-up heat recovery steam generator from
the turbine’s high temperature exhaust.

 	One of the largest markets for IGCC systems is the petroleum refining
industry using petroleum residual feedstock, such as vacuum residual
oil, deasphalter bottoms and petroleum coke. Petroleum refineries
typically feature multi-train designs for high reliability and the
co-production of power, steam and hydrogen for the refinery, with extra
power being sold to third parties.  Major Environmental Aspects of
Gasification-based Power Generation Technologies – Final Report.  U.S.
Department of Energy.  Office of Fossil Energy.  National Energy
Technology Laboratory.  December 2002.

 	Sapre, Ajit, Kamienski, Paul, Phillips, Glenn, Wright, Marie, Resid
Upgrading Technology Options and Role of Flexicoking Technology.  ERTC
Coking and Gasification Conference, Paris France.  April 18, 2007

 	Gray, D. and Tomlinson.  Potential of Gasification in the U.S.
Refining Industry.  United States Department of Energy, National Energy
Technology Laboratory.  June 2000.

 	Murano, John J.  Refinery Technology Profiles.  Gasification and
Supporting Technologies. U.S. Department of Energy.  National Energy
Technology Laboratory.  Energy Information Administration.  June 2003.

 	Clayton, Stewart J., Steigel, Gary J., and Wimer, John G.,
Gasification Technologies Product Team, U.S. Department of Energy.  U.S.
DOE’s Perspective on Long-Term Market Trends and R&D Needs in
Gasification.  Presented at the 5th European Gasification Conference. 
Gasification – The Clean Choice.  Noordwijk, The Netherlands.  April
8-10, 2002.

 	Gray, D. and Tomlinson.  Potential of Gasification in the U.S.
Refining Industry.  United States Department of Energy, National Energy
Technology Laboratory.  June 2000.

 	Murano, John J.  Refinery Technology Profiles.  Gasification and
Supporting Technologies. U.S. Department of Energy.  National Energy
Technology Laboratory.  Energy Information Administration.  June 2003.

 	Clayton, Stewart J., Steigel, Gary J., and Wimer, John G.,
Gasification Technologies Product Team, U.S. Department of Energy.  U.S.
DOE’s Perspective on Long-Term Market Trends and R&D Needs in
Gasification.  Presented at the 5th European Gasification Conference. 
Gasification – The Clean Choice.  Noordwijk, The Netherlands.  April
8-10, 2002.

 	The addition of a gasification plant at an El Dorado, Kansas petroleum
refinery resulted in significant economic benefits.  Previously, the
refinery was spending $12 to 14 million per year on power purchases from
the local utility.  With the implementation of the gasification system,
the refinery reported paying only a few million dollars a year for
stand-by services.  In addition, the refinery saved about $1 million
annually in both waste shipment and disposal costs and nitrogen costs. 
Steam production costs were reduced by more than half. Other benefits
resulted from oxygen enrichment of the sulfur plant that enabled the
refinery to process a wider range of high sulfur crudes.  Furimsky, E. 
Gasification in Petroleum Refinery of 21st Century.  Oil and Gas Science
and Technology – Rev. IFP, Vol.54 (1999), No. 5, pp. 597-618.

 	“Gasification-based systems operated at a petroleum refinery are
typically highly integrated processes.  The complex consists of a number
of distinct processing steps/plants.  These are: feed preparation,
gasifier, air separation unit (ASU), syngas clean-up, sulfur recovery
unit (SRU), and downstream process options, such as cogeneration,
hydrogen production, Fischer-Tropsch synthesis or methanol synthesis. 
Any given installation may or may not contain all of these processes
depending on the feedstock used, products desired, and the availability
of spare capacity in pre-existing plants at the petroleum refinery.  For
example, if the petroleum refinery has spare sulfur plant capacity or
can revamp its existing sulfur plant to gain capacity, the sulfur plant
would be considered outside the battery limits of the gasification
complex.”  Marano, John J., Refinery Technology Profiles: 
Gasification and Supporting Technologies.  U.S. Department of Energy. 
National Energy Technology Laboratory.  Energy Information
Administration.  June 2003.)

 	See review of Coal Conversion Technologies in Perry’s Chemical
Engineer’s Handbook, Seventh Edition.  Pages 27-13 through 27-25. 
McGraw-Hill.  1997.

	A Comparison of Gasification and Incineration of Hazardous Waste -
Final Report.  United States Department of Energy, National Energy
Technology Laboratory (NETL).  3610 Collins Ferry Road.  Morgantown,
West Virginia  26505.  DCN 99.803931.02.  March 30, 2000.

 	Energy and Environmental Profile of the U.S. Petroleum Refining
Industry.  United States Department of Energy.  December 1998.

 	The Agency would also note that this gasification system operates
outside a petroleum refinery and as such, would not be eligible for
today’s final rule.

 	The reader is referred to the following DOE reports assessing the
various types of gasification systems that can be used at petroleum
refineries.  Marano, John J., Refinery Technology Profiles: 
Gasification and Supporting Technologies.  U.S. Department of Energy. 
National Energy Technology Laboratory.  Energy Information
Administration.  June 2003.) and Gray, D. and Tomlinson.  Potential of
Gasification in the U.S. Refining Industry.  United States Department of
Energy, National Energy Technology Laboratory.  June 2000.

 	Although EPA did not rely on this information in its decision-making,
data analyzed by the Agency suggests that it is highly unlikely that
leachable metal concentrations in residuals from gasification of
secondary material from petroleum refining operations will be
significant. See the memorandum to the record. from Ms. Elaine Eby,
USEPA.  Re:  Characterization of Petroleum Refining Waste and Possible
Gasification Scenarios.  August 2007.

 	Although EPA did not rely on this information in its decision-making,
data analyzed by the Agency suggests that it is highly unlikely that
leachable metal concentrations in residuals from gasification of
secondary material from petroleum refining operations will be
significant. See the memorandum to the record. from Ms. Elaine Eby,
USEPA.  Re:  Characterization of Petroleum Refining Waste and Possible
Gasification Scenarios.  August 2007.

 	Although EPA did not rely on this information in its decision-making,
data analyzed by the Agency suggests that it is highly unlikely that
leachable metal concentrations in residuals from gasification of
secondary material from petroleum refining operations will be
significant. See the memorandum to the record from Ms. Elaine Eby,
USEPA.  Re:  Characterization of Petroleum Refining Waste and Possible
Gasification Scenarios.  August 2007.

 	See 72 FR 14734 (March 29, 2007), Risk and Technology Review, Phase
II, Group 2.

 	In the proposed rule, we requested comment on a number of approaches
to revise the synthesis gas specification found at 40 CFR 261.38(b).  In
particular, we were interested in soliciting comment on the
specifications for highly volatile metals and certain organics.   

 	Commenters took issue with the inadequacy of the synthesis gas
specification found at 40 CFR 261.38(b).  Commenters believed that the
allowable concentration limits for highly volatile metals and certain
organics were excessively high, the BTU value was too low, and the
specification was not based on actual synthesis gas from a gasification
unit.  Commenters noted the Agency was challenged on the synthesis gas
specification in the Comparable Fuels Rule by the Sierra Club, Natural
Resources Defense Council, and the Environmental Technology Council in
Chemical Manufacturers Association v EPA, No. 98-1375 (D.C. Cir. Filed
August 17, 1998).  The case is currently being held in abeyance by the
D.C. Circuit Court.  Because the Agency has decided not to require the
synthesis gas fuel meet the specifications found at 40 CFR 261.38(b),
specific comments on the appropriate specification requirements are not
being addressed in this rulemaking. 

 	Universal Treatment Standards (UTS) are concentration-based treatment
levels that must be met before a RCRA hazardous waste can be land
disposed.  These treatment standards can be found in 40 CFR 268.40. 

 

 	If the Agency receives evidence to suggest that these gasification
residues routinely have the potential to adversely affect human health
and the environment, the Agency could list them as hazardous under RCRA.

 	See the memorandum to the record from Ms. Elaine Eby, USEPA.  Re: 
Characterization of Petroleum Refining Waste and Possible Gasification
Scenarios.  August 2007.

 	On September 8, 1994 (59 FR 46339), EPA issued a final MACT rule that
eliminated the use of chromium-based water treatment chemicals and
subsequently chromium compound emissions from industrial process cooling
towers. 

 	It should be noted, however, that under 40 CFR 261.2(f) documentation
is necessary to demonstrate that the conditions of an exclusion have
been met.  40 CFR 261.2(f) does not contain specific record keeping
requirements, but it does require the respondent to bear the burden of
showing, through appropriate documentation, that the excluded material
is being processed in a manner that meets the conditions in the claimed
exclusion. 

 	It should be noted that petroleum refineries that ship oil-bearing
hazardous secondary materials to an off-site gasification system not
located at a petroleum refinery (SIC 2911) would not meet the conditions
of this exclusion and would be subject to the appropriate Subtitle C
regulations.  See for example the Synthesis Gas Rule at 40 CFR
261.38(b).  Furthermore, a gasification facility that accepts
oil-bearing hazardous secondary materials from a petroleum refinery can
not claim to be part of the petroleum refining process and utilize this
exclusion, even if the synthesis gas is sent back to the petroleum
refinery for use.  However, we do recognize that there will be
situations where petroleum gasification facilities are built in close
proximity (e.g., adjoining land) and are part of the petroleum refining
facility.  In general, such facilities would be within the scope of the
exemption being promulgated today.

 	See the February 8, 2002 letter from Mr. Robert Springer, Director of
the Office of Solid Waste to Mr. Rob Short, Managing Director Tetra
Process Services, L.C.  In this letter, Mr. Short posed twelve detailed
questions concerning the regulatory status of oil-bearing hazardous
secondary materials under the RCRA.  Specifically, clarification was
requested on numerous aspects of the exclusion at 40 CFR
261.4(a)(12)(i).

 	Assessment of the Potential Costs, Benefits, and Other Impacts of the
Exclusion for Gasification of Petroleum Oil-Bearing Secondary Materials
-- Final Rule, August 2007December 2006.

 	The IGCC unit located at the El Dorado, Kansas Refinery was used as
part of this analysis. However, as of 2006, this unit is no longer in
operation.

 	ETC, Incinerator and Landfill Cost Data,
http://www.etc.org/costsurvey8.cfm, accessed September 8, 2006.

 	According to the U.S. Energy Information Administration (EIA) Annual
Energy Outlook 2006, Table A2, one barrel of crude oil produced has a
heat content of 5.8 million Btu.

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