Alon USA, LP Consent Decree

163 Pages·2017·5.05 MB·English

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

UNITED STATES OF AMERICA )
)
PLAINTIFF )
)
v. )
)
ALON USA, LP )
)
\ ·."
DEFENDANT )
)
CONSENT DECREE
TABLE OF CONTENTS

I. JURISDICTION AND VENUE ........................................................................................ 4

II. APPLICABILITY AND BINDING EFFECT ................................................................... 5

III. OBJECTIVES .................................................................................................................... 7

IV. DEFINITIONS ................................................................................................................... 7

V. AFFIRMATIVE RELIEF ................................................................................................ 15

A. NOx EMISSIONS REDUCTIONS FROM THE FCCU AT THE BIG

SPRING REFINERY........................................................................................... 15

B. S02 EMISSIONS REDUCTIONS FROM THE FCCU AT THE BIG

SPRING REFINERY........................................................................................... 16

C. PARTICULATE MATTER EMISSIONS REDUCTIONS FROM THE

FCCU AT THE BIG SPRING REFINERY ........................................................ 19

D. CARBON MONOXIDE EMISSIONS REDUCTIONS FROM THE

FCCU AT THE BIG SPRING REFINERY ........................................................ 21

E. NSPS APPLICABILITY TO THE FCCU CATALYST REGENERATOR

AT THE BIG SPRING REFINERY .................................................................... 23

F. NOX EMISSIONS REDUCTIONS FROM HEATERS AND BOILERS

AT THE BIG SPRING REFINERY .................................................................... 24

G. S02 EMISSIONS REDUCTIONS FROM, AND NSPS APPLICABILITY

TO, HEATERS, BOILERS, AND OTHER FUEL GAS COMBUSTION

DEVICES (OTHER THAN FLARING DEVICES) ........................................... 29

H. SULFUR RECOVERY PLANT OPERATIONS AT THE BIG SPRING

REFINERY .......................................................................................................... 31

I. FLARING DEVICES .......................................................................................... 34

J. CONTROL OF ACID GAS FLARING AND TAIL GAS INCIDENTS ........... 36

K. RESERVED ................................. ; ....................................................................... 46

L. BENZENE WASTE NESHAP PROGRAM ENHANCEMENTS...................... 46

M. LEAK DETECTION AND REPAIR................................................................... 65

N. INCORPORATION OF CONSENT DECREE REQUIREMENTS INTO

FEDERALLY-ENFORCEABLE PERMITS ...................................................... 84

VI. EMISSION CREDIT GENERATION ............................................................................ 96

VII. SUPPLEMENTAL ENVIRONMENTAL PROJECT AND ADDITIONAL

INJUNCTIVE RELIEF.................................................................................................... 98

A. SUPPLEMENTAL ENVIRONMENTAL PROJECT .............................. 98

B. OPTIONAL NSPS SUBPART QQQ AUDIT .......................................100

VIII. RECORDKEEPING AND REPORTING ..................................................................... 102

IX. CIVIL PENALTY.......................................................................................................... 107

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X. STIPULATED PENAL TIES ......................................................................................... 108

A. Requirements for NOx Emission Reductions from the FCCU .......................... 109

B. Requirements for S0 Emission Reductions from the FCCU ........................... 109

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C. Requirements for PM Emissions Reductions from the FCCU .......................... 110

D. Requirements for CO Emissions Reductions from the FCCU ........................... 110

E. Requirements Related to NSPS Applicability to FCCU Regenerator ............... 110

F. Requirements for NOx Emission Reductions from Covered Heaters and

Boilers ................................................................................................................ 110

G. Requirements for S0 Emission Reductions from Heaters, Boilers, and

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Other Fuel Gas Combustion Devices ................................................................. 111

H. Requirements for Sulfur Recovery Plant ........................................................... 111

I. Requirements for Flaring Devic.es ..................................................................... 112

J. Requirements for Control of Acid Gas Flaring Incidents and Tail Gas

Incidents ............................................................................................................. 112

K. Reserved............................................................................................................. 115

L. Requirements for Benzene Waste NESHAP Program Enhancements .............. 114

M. Requirements for Leak Detection and Repair Program Enhancements ............. 116

N. Requirements to Incorporate Consent Decree Requirements into

Federally-Enforceable Permits ........................................................................... 118

0. Requirements for Monitoring, Recordkeeping and Reporting .......................... 118

P. Non-Compliance with any Consent Decree Requirement Not Specifically

Identified ............................................................................................................ 119

Q. Requirements for Supplemental Environmental Project and Civil Penalties .... 119

R. Payment of Stipulated Penalties ......................................................................... 120

S. Stipulated Penalties Dispute .............................................................................. 121

XI. INTEREST..................................................................................................................... 122

XII. RIGHT OF ENTRY ....................................................................................................... 122

XIII. FORCE MAJEURE ....................................................................................................... 123

XIV. RETENTION OF JURISDICTION/DISPUTE RESOLUTION ................................... 126

XV. EFFECT OF SETTLEMENT ........................................................................................ 128

XVI. GENERAL PROVISIONS ............................................................................................ 137

XVII. TERMINATION ............................................................................................................ 144

XVIII. SIGNATORIES ............................................................................................................. 148

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TABLE OF APPENDICES

Appendix A: Initial Inventory - Covered Heaters and Boilers for the Big Spring Refinery
Appendix B: LDAR - Commercial Unavailability Exception
Appendix C: SEP Project Description and Schedule
Appendix D: Flaring Incident Stipulated Penalty Flow Chart
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CONSENT DECREE
WHEREAS, plaintiff the United States of America ("Plaintiff' or the "United States"),
by the authority of the Attorney General of the United States and through its undersigned
counsel, acting at the request and on behalf of the United States Environmental Protection
Agency ("EPA"), has simultaneously filed a Complaint and lodged this Consent Decree against
defendant Alon USA, LP ("Alon") for alleged environmental violations at its petroleum refinery
in Big Spring, Texas.
WHEREAS, the United States alleges on information and belief that Alon has violated
and/or continues to violate one or more of the following statutory and regulatory provisions:
1) Prevention of Significant Deterioration ("PSD") requirements found at
Part C of Subchapter I of the Clean Air Act (the "Act"), 42 U.S.C. § 7475, and the
regulations promulgated thereunder at 40 C.F.R. § 52.21 (the "PSD Rules"); and "Plan
Requirements for Non-Attainment Areas" found at Part D of Subchapter I of the Act, 42
U.S.C. §§ 7502-7503, and the regulations promulgated thereunder at 40 C.F.R. §
51.165(a) and (b), 40 C.F.R. Part 51, Appendix S, and 40 C.F.R. § 52.24 (the "NSR
Regulations") (collectively the "PSD/NSR Regulations") for heaters and boilers and fluid
catalytic cracking unit for NOx, S02, CO, and PM;
2) New Source Performance Standards ("NSPS") found at 40 C.F.R. Part 60,
Subparts A, J and Ja ("Refinery NSPS Regulations"), promulgated under Section 111 of
the Act, 42 U.S.C. § 7411, for sulfur recovery plants, fuel gas combustion devices, flares,
and fluid catalytic cracking unit catalyst regenerators;
3) Leak Detection and Repair ("LDAR") requirements promulgated pursuant
to Sections 111 and 112 of the Act, and found at 40 C.F.R. Part 60, Subparts GGG,
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GGGa, 40 C.F.R. Part 61, Subparts J and V; and 40 C.F.R. Part 63, Subparts F, H, and
CC ("LOAR Regulations"); and
4) National Emission Standards for Hazardous Air Pollutants ("NESHAP")
for Benzene Waste Operations promulgated pursuant to Section 112( e) of the Act, and
found at 40 C.F.R. Part 61, Subpart FF ("Benzene Waste NESHAP").
WHEREAS, the United States also alleges with respect to the Big Spring Refinery that,
upon information and belief, Alon has been and/or continues to be in violation of the Texas State
Implementation Plan ("SIP"), approved by EPA pursuant to Section 110 of the Act, 42 U.S.C.
§ 7410, to the extent that such plan implements, adopts, or incorporates the above-described
federal requirements.
WHEREAS, with respect to the provisions of Subsection V.J ("Requirements for Control
of Acid Gas Flaring and Tail Gas Incidents") of this Consent Decree, EPA maintains that "[i]t is
the intent of the proposed standard [subsequently codified in part at 40 C.F.R. § 60.104] that
hydrogen-sulfide-rich gases exiting the amine regenerator [or sour water stripper gases] be
directed to an appropriate recovery facility, such as a Claus sulfur plant," see, Office of Air
Quality Planning and Standards, U.S. EPA, Background Information for Proposed New Source
Performance Standards: Asphalt Concrete Plants, Petroleum Refineries, Storage Vessels,
Secondary Lead Smelters and Refineries, Brass or Bronze Ingot Production Plants, Iron and
Steel Plants, Sewage Treatments Plants (Vol. 1: Main Text), 28 (1973).
WHEREAS, EPA further maintains that the failure to direct hydrogen-sulfide-rich gases
to an appropriate recovery facility - and the practice of instead flaring such gases under
circumstances that are not sudden or infrequent or that are reasonably preventable - circumvent
the purposes and intentions of the standards at 40 C.F.R. Part 60, Subpart J.
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WHEREAS, EPA recognizes that "Malfunctions," as defined in Section IV(Definitions)
of this Consent Decree and 40 C.F.R. § 60.2, of "Sulfur Recovery Plants" or of"Upstream
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Process Units" may result in flaring of "Acid Gas" or "Sour Water Stripper Gas" on occasion, as
those terms are defined herein, and that such flaring does not violate 40 C.F.R. § 60.1 l(d) if the
owner or operator, to the extent practicable, maintains and operates such units in a manner
consistent with good air pollution control practice for minimizing emissions during these
periods.
WHEREAS, Alon denies that it has violated and/or continues to violate the foregoing
federal statutory and regulatory provisions, or the foregoing SIP provisions incorporating and
implementing the federal requirements, and maintains that it has been and remains in compliance
with all applicable statutes, regulations, and permits and is not liable for civil penalties and
injunctive relief.
WHEREAS, the United States is engaged in a federal strategy for achieving cooperative
agreements with U.S. petroleum refineries to achieve across-the-board reductions in emissions
("Global Settlement Strategy").
WHEREAS, Alon consents to the simultaneous filing of the Complaint and lodging of
this Consent Decree to accomplish Alon's objective of cooperatively reconciling the goals of the
United States and Alon under the Clean Air Act, and Alon therefore agrees to undertake the
installation of pollution control equipment and the enhancements to its air pollution management
practices at its Refinery to reduce air emissions through participation in the Global Settlement
Strategy.
WHEREAS, with this settlement, each of the facilities currently engaged in petroleum
refining in the U.S. that are owned or operated by Alon USA, LP, or any other subsidiary of
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Alon USA Energy, Inc., Alon USA, LP's corporate parent, are now covered by Consent Decrees
pursuant to the Global Settlement Strategy.
WHEREAS, Alon estimates that, when the affirmative relief identified in Sections V
(Affirmative Relief) of this Consent Decree is fully implemented, annual emissions from the Big
Spring Refinery will be reduced by the following amounts: 1) nitrogen oxide by approximately
477 tons; 2) sulfur dioxide by approximately 2455 tons, and will also result in reductions of
volatile organic compounds ("VOCs"), carbon monoxide ("CO") and particulate matter ("PM").
WHEREAS, Alon waives any applicable federal or state requirements of statutory notice
of the alleged violations.
WHEREAS, the Parties agree that: (a) settlement of the matters set forth in the
Complaint is. in the best interests of the Parties and the public and (b) entry of this Consent
Decree without litigation is the most appropriate means of resolving this matter.
WHEREAS, the Parties recognize, and the Court by entering the Consent Decree finds,
that the Consent Decree has been negotiated at arm's length and in good faith and that the
Consent Decree is fair, reasonable, and in the public interest.
NOW THEREFORE, before the taking of any testimony, without adjudication of any
issue of fact or law, and upon the consent and agreement of the Parties to the Consent Decree, it
is hereby ORDERED, ADJUDGED and DECREED as follows:
I. JURISDICTION AND VENUE
1. This Court has jurisdiction over the subject matter of this action and over the
Parties pursuant to 28 U.S.C. §§ 1331, 1345, and 1355 and 1367(a). In addition, this Court has
jurisdiction over the subject matter of this action pursuant to Sections 113(b) and 167 of the
Clean Air Act, 42 U.S.C. §§ 7413(b) and 7477. The Complaint states a claim upon which relief
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may be granted for injunctive relief and civil penalties against Alon under the Clean Air Act.
Authority to bring this suit is vested in the United States Department of Justice by 28 U.S.C. §§
516 and 519, and Section 305 of the Act, 42 U.S.C. § 7605.
2. Venue is proper in the Northern District of Texas pursuant to Section 113(b) of
the Clean Air Act, 42 U.S.C. § 7413(b), and 28 U.S.C. §§ 1391(b) and (c), and 1395(a). Alon
consents to the personal jurisdiction of this Court and waives any objections to venue in this
District.
3. Notice of the commencement of this action has been given to the State of Texas
under Section 113(a)(l) and 113(b) of the Clean Air Act, 42 U.S.C. §§ 7413(a)(l) and (b).
II. APPLICABILITY AND BINDING EFFECT
4. The provisions of the Consent Decree shall apply to Alon and the Big Spring
Refinery as described herein. The provisions of the Consent Decree shall be binding upon the
United States, Alon, and Alon's successors, assigns, and other entities or persons bound by law.
5. Alon agrees not to contest the validity of the Consent Decree in any subsequent
proceeding to implement or enforce its terms.
6. Alon shall give written notice of the Consent Decree to any successors in interest
prior to the transfer of ownership or operation of any portion of the Big Spring Refinery and
shall provide a copy of the Consent Decree to any successor in interest. Alon shall notify the
United States, in accordance with the notice provisions set forth in Paragraph 248 (Notice), of
any successor in interest at least thirty (30) days prior to any such transfer. No transfer of
ownership will relieve Alon of its obligations under this Consent Decree, except in accordance
with Paragraphs 7-11.
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7. Alon shall condition any transfer, in whole or in part, of ownership of, operation
of, or other interest (exclusive of any non-controlling, non-operational shareholder interest) in
the Big Spring Refinery upon the transferee's written agreement to execute a modification to the
Consent Decree that shall make the terms and conditions of the Consent Decree applicable to the
transferee.
8. As soon as possible prior to the transfer, (a) Alon shall notify the United States of
the proposed transfer and of the specific Consent Decree provisions that Alon proposes the
transferee assume; (b) Alon shall certify that the transferee is contractually bound to assume the
obligations and liabilities of this Consent Decree; and (c) the transferee shall submit to the
United States a certification that the transferee has the financial and technical ability to assume
the obligations and liabilities of this Consent Decree and a certification that the transferee is
contractually bound to assume the obligations and liabilities of this Consent Decree.
9. By no later than sixty (60) days after the submission to the United States of the
notice and certification required by the previous Paragraph 8: (a) the United States shall notify
Alon that the United States does not agree to modify the Consent Decree to make the transferee
responsible for complying with the terms and conditions of the Consent Decree or (b) the United
States, Alon, and the transferee shall file with the Court a joint motion requesting the Court to
approve a modification substituting the transferee for Alon as the Defendant responsible for
complying with the terms and conditions of the Consent Decree.
10. IfAlon does not secure the agreement of the United States to a joint motion
within the sixty-day (60) period, then Alon and the transferee may file, without the agreement of
the United States, a motion requesting the Court to approve a modification substituting the
transferee for Alon as the Defendant responsible for complying with the terms and conditions of
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