The Nickel Report

In a surprising turn of events, the Board of the Bay Area Air Quality Management District (BAAQMD) voted to delay adoption of first-of-its-kind caps on refinery greenhouse gas (GHG) emissions. As we reported just three weeks ago, the Board was slated to adopt Regulation 12, Rule 16: Petroleum Refining Facility-Wide Emissions Limits (Rule 12-16), a regulation that would establish refinery-specific, facility-wide caps on GHG emissions from the five Bay Area refineries and three support facilities.  At a public hearing last week, in what initially looked to be a sure thing, the Board pivoted.  Signaling unease about legal vulnerabilities surrounding procedure, the Board voted to delay adoption of the regulation until at least September 2017.

As proposed on May 31, 2017, Rule 12-16 would have imposed facility-specific caps based on recent operating levels (baseline emissions) and a built-in operating flexibility of seven percent. In its fourth iteration since May 31, the June 21 proposal featured caps based on an alternative method wherein baseline emissions include already permitted but under-utilized/not yet built processes.  In addition, rather than build in a seven percent operating allowance, the revised proposal allowed for two standard deviations from the baseline.  The addition of already permitted processes into the baseline and the allowance for two standard deviations garnered significant attention from board members, several of whom had not seen the proposed version of the regulation until arrival at the public hearing.  Board members cited both the short notice and lack of discussion on the revised methodology as swaying them to vote to hold off on adoption until further analysis and discussion could occur.

As with the May 31, 2017 public hearing, numerous industry representatives as well as individual members of the public provided comment. No matter what their perspective on the rule, commenters overwhelmingly agreed on one thing: they all had concerns over the process.  Even California Attorney General Xavier Becerra weighed in via letter calling the last minute nature of the revisions insufficient for a full and transparent analysis.

While the Board did not set a firm date, Rule 12-16 will likely be considered for adoption at BAAQMD’s September hearing. For more information on Rule 12-16, please see the Board’s website.