Calif Expands Checks on Renewable Fuel Projects
by Dylan Chase (Argus Media) Northern California refiners converting traditional fuel processing units to make renewables will still need to follow the same rules as with older processes, as regulators take a closer look at lower-carbon fuel production.
The Bay Area Air Quality Management District (BAAQMD) plans to update its rules to make renewable fuel facilities subject to the same fees, emissions restrictions and performance standards currently applicable to petroleum refineries, it said in a request for comment published 21 September.
The changes come amid increasing attention to the environmental and community impacts associated with lower carbon fuel projects underway in the region. BAAQMD recently opened a probe into whether Phillips 66 violated permitting procedures involved in the ongoing conversion of its Rodeo facility in the120,000 b/d San Francisco refining complex. The regulator is performing inspections, information-gathering, and engineering reviews at the Rodeo site after environmental advocacy group the National Resource Defense Council (NRDC) asked it to look into whether Phillips 66 failed to apply for a permit for a hydrotreater conversion earlier this year.
Since Phillips 66 already has an active permitting process underway for a full conversion of the Rodeo facility expected in 2024, a potential breach of protocol of the kind alleged by NRDC would “transcend from odd to shocking,” Ann Alexander, an attorney at the NRDC, told Argus.
The group already raised concerns in a letter sent to county regulator earlier this year about more than 11 potential consequences of the Rodeo conversion and expanded biofuel production, ranging from the deforestation impacts of farming for soybean feedstocks to emissions caused by the use of hydrogen units in renewable fuel refining.
Phillips 66 told Argus that it followed “all carefully reviewed applicable regulations and obtained all required approvals to produce renewable diesel from an existing hydrotreater unit as part of a standalone flexibility project.” The company said that the Rodeo Renewed project does not require increased hydrogen generation, as the NRDC has suggested.
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Further expansion of regulatory programs, as envisaged by BAAQMD, may give refiners cause for concern as they eye conversions intended to onramp them into burgeoning markets for renewable fuels and credits traded as part of California’s Low Carbon Fuel Standard (LCFS) program. Alongside Phillips 66’s effort at Rodeo, Marathon Petroleum is working to convert its 166,000 b/d Martinez refinery in the Bay area toward renewable diesel production. And more conversions figure to be forthcoming as demand for traditional fuels recedes in coming decades.
California-based Chevron, for example, which operates the 269,000 b/d El Segundo refinery near Los Angeles and the 250,000 b/d Richmond refinery in the Bay area, recently announced plans to spend $3bn on renewable diesel and sustainable aviation fuel production by 2028 as part of a $10bn energy transition spending program. READ MORE
Phillips 66 Rodeo Renewed Project Project Overview (Contra Costa Conservation and Development
Phillips 66 Renewable Energy Project Manager Nik Weinberg-Lynn joined KCBS radio to share project details regarding Rodeo Renewed’s Draft Environmental Impact Report (EIR). (KCBS Radio: The Matt Bigler Show; includes AUDIO)