Petroleum Refining Process Waste Listing Determination Proposed Rule Response to Comments Document Part I


United States     Solid Waste and    EPA530-R-99-030a
Environmental Protection  Emergency Response   NTIS: PB99-156 085
Agency 	     (5305W)      June 1998
Petroleum  Refining
Process Waste Listing
Determination
Proposed Rule
Response to
Comments Document;
Part  I
     Printed on paper that contains at least 30 percent postconsumer fiber

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TABLE OF CONTENTS
I. GENERAL COMMENTS I-1
A. The Agency requested comments on its proposal not to list eleven residuals. . 1-1
B. EPA requested comments on the data used in proposed rule and methodology and
assumptions used in the risk assessment 1-1

II. HAZARDOUS OIL-BEARING RESIDUALS RETURNED TO REFINERY
PROCESSES II-l
A. General Comments on Proposed Exclusions II-l
B. Proposed Exclusion is Supported by Case Law and Absence of Risk 11-2
C. Comments Against the Proposal II-l 1
D. Request for Clarification 11-29
E. Extension of proposed exclusion to recovered oil generated by organic chemical
plants and inserted into co-located or commonly-owned petroleum refining
processes along with normal process streams 11-37
1. General 11-37
2. Comments Against Proposal 11-41
3. The Agency requested additional data on the composition of recovered oil
from petrochemical operations that is typically sent to refineries. . . . 11-45
4. The Agency requested additional information on refinery limitations that
may preclude the introduction of toxic constituents from recovered oil
generated from chemical manufacturing operations 11-54
5. Further Expansion of Proposed Exclusion 11-56
6. Cokers are integral to refining and are not waste management units . 11-66
7. Exclusion of Oil-bearing Wastewater 11-68
8. Miscellaneous Comments on Recovered Oil Topics 11-76

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I. GENERAL COMMENTS

A. The Agency requested comments on its proposal not to list eleven residuals.

Comment 1: The commenters support the decisions not to list the 11 residuals. EPA used a
common sense approach to the rulemaking. Decisions were based on current data and current
management practices and supported by the risk analysis. (Amoco, 00062; API, 00046; ARCO,
00054, BP, 00019; Caufield, 00009, Coastal, 00048, Heritage, 00010; NPRA, 00015; Phillips,
00055; Texaco, 00049; Valero, 00051)

Response: EPA appreciates the commenters' support.

Comment 2: EPA used a sufficiently conservative iterative process for the risk assessment and
therefore should have an extremely high confidence that these residuals will not pose significant
risks. (API, 00046; BP, 00019; Coastal, 00048; Mobil, 00033)

Response: The Agency appreciates the commenters' support. All detailed comments regarding
the risk assessment are provided in Section III of this document.

Comment 3: The commenters do not support the listing of the three residuals and believe the
current regulations (TC) adequately protects human health and the environment. EPA should re-
examine its risk analysis. (API, 00046; Coastal, 00048; Mobil, 00033; NPRA, 00015; Pennzoil,
00053; Phillips, 00055, Valero, 00051)

Response: The commenters provided detailed comments supporting this general comment. They
are presented in Section IV on a waste-by-waste basis, as well as in Section III with respect to the
risk assessment.

B. EPA requested comments on the data used in proposed rule and methodology and
assumptions used in the risk assessment.

Comment 1: The commenters believe EPA obtained accurate and relevant data on the residuals
and management practices through site visits, §3007 survey, and sampling and analysis program.
(API, 00046; Ashland, 00020; Chevron 00050; Mobil, 00033; NPRA, 00015; Texaco, 00049;
Valero, 00051)

Response: EPA appreciates the commenters' support and agrees that the cooperative effort
between EPA and the industry work group during the industry study phase of this listing
determination resulted in a defensible data base and a useful understanding of the industry and its
waste generation and management practices.
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Comment 2: The commenters commended EPA on its extensive information collection through
sampling and analysis and §3007 survey. (API, 00046; Ashland, 00020; BP, 00019; Chevron,
00050; Mobil, 00033)

Response: EPA thanks the commenters for their support.

Comment 3: The commenters agreed that the rulemaking decisions were supported by the data
collected. (API, 00046; Mobil, 00033; Texaco, 00049, Valero, 00051)

Response: EPA appreciates the commenters' support, which was garnered during a useful
dialogue during the industry study.

Comment 4: EPA used a common sense approach to the rulemaking. (Mobil, 00033; NPRA,
00015; Pennzoil, 00053; Texaco, 00049)

Response: EPA agrees that the rulemaking was grounded in common sense decision making and
that the entire process was enhanced by the dialogue engendered by the Common Sense
Initiative.

Comment 5: One commenter anticipated that the Agency would receive adverse comments
about the adequacy of its data collection and evaluation from parties that advocate maximum
regulation of virtually all refining processes and residuals, and that will not be satisfied with
EPA's proposal. Those parties may claim that EPA should not proceed with the proposal not to
list these residuals until EPA has engaged in another extensive data collection and analysis, or
even that EPA should assume that other residuals should be listed as hazardous wastes unless
EPA can demonstrate through further evaluation that they are not hazardous. The Agency should
reject any such argument and finalize the proposed non-listing determinations since 1) the
rulemaking record already is sufficient to support the proposed non-listings, and 2) there is no
presumption that solid wastes are hazardous. Rather, EPA may not list a waste as hazardous
unless the Agency first determines, based on the evidence, that the waste poses a substantial risk
to health or the environment. (Mobil, 00033)

Response: All comments regarding data adequacy were supportive, although one commenter
strongly argued that the TCLP procedure should not have been used as input to the risk
assessment models (see III.H of this document for comments about the TCLP). No commenters,
however, suggested that extensive additional data collection was required or that the final rule
should be delayed pending further information collection.

C. The Agency requested comments on the waste groupings chosen by the Agency; and
any other information supporting the proposed listings.
June 29, 1998 1-2

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Response: Some comments were received regarding the definitions of the three proposed
listings. See Section IV and the waste-specific comments regarding "Scope of Listing" for these
comments and the Agency's response.
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II.     HAZARDOUS OIL-BEARING RESIDUALS RETURNED TO REFINERY
       PROCESSES

A.     General Comments on Proposed Exclusions

Comment I: The Agency's proposal was a common sense approach to the expansion of the
recovered oil exclusion.  (API, 00046; ARCO, 00054; Heritage, 00010; Mobil, 00033; Phillips,
00055; Valero,  00051)

Response: EPA acknowledges the commenters' support of the proposed exclusion from the
definition of solid waste for oil-bearing secondary materials returned to the refining process. As
finalized,  the exclusion from the definition of solid waste for oil-bearing residuals  from specified
petroleum refining sources is expanded to allow the use or reuse of a broader array of residuals
from petroleum refining operations by inserting the materials into any part of the refinery
process, including the coking process.  The Agency notes that the exclusion is conditioned on
there being no storage or placement of the secondary materials on the land and no speculative
accumulation. In addition, the recycling of oil-bearing secondary materials can not result in coke
products that exhibit any of the characteristics of hazardous waste.

In addition, in the final rule, EPA clarifies that the exclusion for oil-bearing secondary materials
returned to the refining process only extends to  the materials actually re-inserted into the refinery
process. In cases where  oil-bearing secondary materials are reclaimed prior to re-insertion, any
residuals that may result from the reclamation process and that are not returned to the refinery
process retain the hazardous waste listing and must be managed as a hazardous waste. In the
final rule,  the Agency modifies the proposed listing descriptions for refining wastes to include
any residuals from the processing of listed hazardous wastes.

EPA clarifies that the Agency is not including within the scope of the exclusion oil-bearing
secondary materials generated outside the petroleum refining sector (i.e., SIC 2911).  The
Agency is basing its decision not to exclude these secondary materials from the definition of
solid waste on the fact that EPA has very limited data from industry demonstrating the chemical
and toxic content of the materials.  In fact, the Agency has no information on which to base a
finding that the  use of oil-bearing hazardous secondary materials originating in a non-refinery
sector of the petroleum refining industry in the coking process would be anything other than the
management of wastes (e.g., hazardous waste recycling) from that non-refinery sector.  Oil-
bearing secondary materials originating from non-refinery sectors have the potential to be more
waste-like and thus do not warrant an exclusion, especially if their ultimate use is in the
quenching process.

Comment 2: The commenters support the exclusion for hazardous oil-bearing materials inserted
back to refining processes, including the coker and believe oil-bearing residuals returned to the
refining process should be excluded from the definition of solid waste. (Amerada Hess, 00027;
Amoco, 00062;  ARCO, 00054; BP, 00019; Caufield, 00009; Chevron, 00050; CMA, 00018;

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Coastal, 00048; Exxon Chemicals, 00041; Mobil, 00033; Pennzoil, 00053; Phillips, 00055;
RETEC, 00028; Shell, 00047; Sun, 00034; Total, 00039; TNRCC, 00043; WIRA, 00024;
Valero, 00051)

Response: EPA acknowledges the commenters' support of the proposed exclusion from the
definition of solid waste for oil-bearing secondary materials returned to the refining process.  As
finalized, the exclusion from the definition of solid waste for oil-bearing secondary materials
from specified petroleum refining sources is expanded to allow the use or reuse of a broader
array of residuals from petroleum refining operations by inserting the materials into any part of
the refinery  process, including the coking process. The Agency notes that the exclusion
continues to be limited to situations where inappropriate storage or accumulation does not occur,
and to  processes that do  not result in coke products that exhibit any of the characteristics of
hazardous waste.

In addition,  in the final rule, EPA clarifies that the exclusion for oil-bearing secondary materials
returned to the refining process only extends to the materials actually re-inserted into the refinery
process.  In cases where oil-bearing secondary materials are reclaimed prior to re-insertion, any
residuals that may result from the reclamation process and that are not returned to the refinery
process retain the original hazardous waste listing. In the final rule,  the Agency modifies the
proposed listing descriptions for refining wastes to include any residuals from the processing of
listed hazardous wastes.

EPA clarifies that the  Agency is not including within the scope of the exclusion oil-bearing
secondary materials generated outside the petroleum refining sector  (i.e., SIC 2911). The
Agency is basing its decision not to exclude these secondary materials from the definition of
solid waste on the fact that EPA has very limited data from industry demonstrating the chemical
and toxic content of the materials. In fact, the Agency has no information on which to base a
finding that  the use of oil-bearing hazardous secondary materials originating in a non-refinery
sector of the petroleum refining industry in the coking process would be anything other than the
management of wastes (e.g.,  hazardous waste recycling) from that non-refinery sector. Oil-
bearing secondary materials originating from non-refinery sectors have the potential to be more
waste-like and thus do not warrant an exclusion, especially if their ultimate use is in the
quenching process.

Comment 3: The proposal is fundamentally flawed and should be rejected. (ETC, 00038)

Response: The commenter's full arguments and the Agency's responses are  found below in
Section II.C of this document.
B.     Proposed Exclusion is Supported by Case Law and Absence of Risk
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 In Section III. A of API's comments, API argues that the proposed exclusion can be supported
 because (1)  it is common sense that oil-bearing secondary materials are best managed in the
 petroleum refining process, (2) the case law supports a common sense reading of Congress'
 approach  to reuse of this type of material in the statutory definition of solid waste, and (3) while
 risk is not the appropriate basis for determining the applicability of the definition of solid waste,
 the oil-bearing residuals do not pose significant levels of risk when recycled.  These three
 elements of API's comments, and EPA's responses, are provided below as Comments 1, 2, and
 3, respectively.

 Comment 1:  [Approach has Common Sense]
 Throughout its history, a principal goal of the petroleum industry has been to  maximize the
 product yield of every barrel of crude oil produced.  Toward this end, it  has long been the
 practice of the industry to recover and return oil, off-specification products, and oil-bearing
 residuals to  the refining process. This practice pre-dates RCRA by many decades and has been
 pursued continuously, except where potential regulatory impediments may have arisen.

 The proposed exclusion reflects the common sense conclusion that the petroleum refining
 process is where oil-bearing secondary materials can best be managed and that such recycling
 should be encouraged. Maximum recovery and productive use of hydrocarbons within the
 industry whose main business is hydrocarbon use promotes RCRA's goals of  resource
 conservation and waste minimization. (API, 00046)

 Response:  EPA acknowledges the commenter's support of the exclusion. The Agency points
 out that although the final rule expands the previous exclusion from the definition of solid waste
 for oil-bearing residuals from specified petroleum  refining sources that are inserted into the
 petroleum refining process, the exclusion will continue to be limited to certain situations. The
 exclusion  is  limited to situations where inappropriate storage or accumulation does  not occur,
 and to processes that do not result in coke products that exhibit any of the characteristics of
 hazardous waste. In addition, in the final rule, EPA clarifies that the exclusion for oil-bearing
 secondary materials returned to the refining process only extends to the materials actually re-
 inserted into the refinery process. In cases where oil-bearing secondary materials are reclaimed
 prior to re-insertion,  any residuals that may result from the reclamation process and that are not
 returned to the refinery process retain the hazardous waste listing and must be managed as a
 hazardous waste. In the final rule, the Agency modifies the  proposed listing descriptions for
 refining wastes to include any residuals from the processing of listed hazardous wastes.

 EPA clarifies that the Agency is not including within the scope of the exclusion oil-bearing
secondary materials generated outside the petroleum refining sector (i.e., SIC  2911). The
 Agency is basing its decision not to exclude these secondary materials from the definition of
solid waste on the fact that EPA has very limited data from industry demonstrating  the chemical
and toxic content of the  materials. In fact, the Agency has no information on  which to base a
finding that  the use of oil-bearing hazardous secondary materials originating in a non-refinery
sector of the petroleum refining industry in the coking process would be anything other than the

June 29, 1998                              II-3

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management of wastes (e.g., hazardous waste recycling) from that non-refinery sector. Oil-
bearing secondary materials originating from non-refinery sectors have the potential to be more
waste-like and thus do not warrant an exclusion, especially if their ultimate use is in the
quenching process.

Comment 2: [Case Law]
API believes that Congress had such [see comment 1 above] a common-sense approach to reuse
of such feedstock-like materials in mind when it crafted the statutory definition of solid waste.
Indeed, the relevant case law supports this view.

In American Mining Congress v. EPA, 824 F.2d 1177 (D.C. Cir. 1987) ("AMC I"), the court
held that only materials that are "discarded," in the ordinary sense of the word, may be
considered "'solid wastes" under RCRA. Thus, for example, in-process secondary materials used
in an ongoing manufacturing process may not be regulated as solid or hazardous wastes under
RCRA

Hydrocarbon-bearing secondary materials inserted into the petroleum refining process, including
sludges, were at issue in AMC I, and the court determined that such materials are not discarded
and so may not be considered solid wastes. Thus, EPA's proposal to exclude such oil-bearing
materials (as far as it goes) is consistent with the AMC I decision.1 (API, 00046)

Response: EPA is finalizing the proposed exclusion from the definition of solid waste for oil-
bearing secondary materials generated and reused by petroleum refineries, based upon a review
of the policy and legal issues involved and on data provided to the Agency related to the
composition of the secondary materials and the manner in which secondary materials are reused
by the petroleum refining industry. By finalizing the proposed exclusion, the Agency is
essentially providing the petroleum refining industry with a regulatory exclusion currently
available to other industries that generate hazardous secondary materials and use or reuse the
materials by reinserting the materials into the production process, essentially substituting the
secondary materials for feedstocks.

Prior to today's rule, the petroleum refining industry was precluded from reusing many
recyclable secondary materials in the refinery process, unless the materials were handled as
hazardous wastes prior to being reinserted into the refinery process. The pre-existing regulatory
exclusions from the definition of solid waste for secondary materials that are reused or recycled
the use of such materials to produce fuels (i.e., 40 CFR §§261.2(e)(2)(ii), 261.4(a)(8)(iv)).
'The subsequent decisions that EPA often cites have said nothing to undercut the basic
holding of AMC I, particularly insofar as that holding applies to the recycling of oil-bearing
residuals in the petroleum industry. See, e.g., American Mining Congress v. EPA, 907 F.2d 1179
(D.C. Cir. 1990) ("AMC II"); American Petroleum Institute v. EPA, 906 F.2d 729 (D.C. Cir.
\99Q)("APr).

June 29, 1998 II-4

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The primary business of the petroleum refining industry is fuel production. Essentially, all
petroleum refining feedstocks, including secondary materials substituted for primary feedstocks,
contribute to the production of fuels.  EPA's intent, when developing the previously established
restrictions to the exclusions from the definition of solid waste for secondary materials that are
reused was to protect human health and the environment from the potential risks associated with
the combustion of hazardous wastes.  EPA normally views combustion of hazardous wastes as a
form of discard and retains jurisdiction over such processes,  even if they occur as part of
recycling activities.  See, for example, 40 CFR Section 266.100 (applicability of hazardous waste
management rules to air emissions from boilers and industrial furnaces burning hazardous
waste).  However, EPA does not view the use or reuse of petroleum refining secondary materials
for the production of primary fuels by the petroleum refining industry necessarily as discarding
those materials.  Therefore, EPA is revising the existing regulations governing the recycling of
hazardous secondary materials to exclude oil-bearing secondary materials generated and reused
by petroleum refineries from the definition of solid waste. To ensure that the  management of
such materials does not include an element of discard, and to ensure that the materials do not
become part  of the waste disposal problem, the Agency is restricting the exclusion to situations
where the secondary materials are not stored or placed on the land and where there is no
speculative accumulation of the materials. In addition, the exclusion does not apply to situations
that would result in a coke product that exhibits a characteristic of hazardous waste. See RCRA
Section 3004(q)(2).

The Agency  also is requiring that the materials excluded under this provision of today's rule be
returned directly to a refinery for insertion.  While this is not an issue if materials are recycled on
site, EPA has concerns about situations where these materials are generated at one refinery for
insertion into another.  Such materials should not end up at an intermediate non-refinery facility
without an accompanying hazardous waste manifest. In cases where materials generated at one
petroleum refinery are to be recycled at another refinery, to meet the conditions of the exclusion
the materials must be located either at the generating refinery, at  the receiving refinery, or must
otherwise be in transit between the two facilities.  This is consistent with the argument that the
exclusion is provided on the basis that the secondary materials are being used within the realm of
on-going production in the petroleum  refining  sector.

In the final rule, EPA clarifies that the exclusion for oil-bearing secondary materials returned to
the refining process only extends to the materials  actually re-inserted into the refinery process.
In cases where oil-bearing secondary materials are reclaimed prior to re-insertion, any residuals
that may result from the reclamation process that are not returned to the refinery process, and
therefore may be discarded, retain the original  hazardous waste listing.  In  the final rule, the
Agency modifies the proposed listing  descriptions for  refining wastes to include any residuals
from the processing of listed hazardous wastes.

EPA notes that it arrived at the decision to exempt oil-bearing secondary materials generated by
petroleum refineries that are re-inserted into the refining process, not merely based on the
argument that the oil-bearing residuals are reinserted into the petroleum refining process, but

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because the residuals are returned to the refining process without there being an element of
discard within the management of the residuals prior to the residuals being inserted into the
refinery process. In assessing the appropriate regulatory status of secondary materials from
petroleum refinery operations, EPA assessed the data provided to the Agency on recyclable oil-
bearing  materials and concluded that these materials are analogous to crude oils.2 Therefore, as
part of the Agency's effort to apply the regulatory framework of RCRA to the refining industry
in a reasonable manner, the Agency has identified those management practices in which oil-
bearing  secondary materials that are similar in composition to crude oil can be returned to fuels
production in a manner not involving discarding or any element of discard.

EPA does not accept all of the commenter's arguments.  It should be noted that EPA disagrees
that an exclusion is compelled (even assuming legitimate recycling  is occurring).  First, there is
direct case authority that secondary materials which originate from  wastewater treatment systems
— the origin of most of the secondary materials which would be excluded under today's rule (see
below) -- can be considered to be "discarded."  See AMC II, 907 F.2d at 1186 ("Nothing in
AMC [I] prevents the agency from treating as 'discarded' the wastes at issue in this case, which
are managed in land disposal units that are part of wastewater treatment  systems, which have
therefore become 'part of the waste disposal problem,' and which are not part of ongoing
industrial processes" (emphasis original)). Industry indicates that, primarily, the oil-bearing
hazardous secondary materials utilized in the quenching process are wastewater treatment
sludges  (chiefly K048, F037 and F0383), which are thus directly analogous to the sludges at issue
in the AMC II decision, and thus could be considered to be discarded.

With regard to secondary materials recycled via quench coking, EPA adds further that
wastewater treatment sludges likewise could be considered to be solid wastes pursuant to RCRA
section 3004(q)(2)(A) which indicates that certain provisions otherwise applicable to hazardous
waste-derived fuels do not apply to petroleum coke produced from "petroleum refinery wastes
containing oil which are converted into petroleum coke at the same facility at which such wastes
were generated." The plain language of the provision can be read to cover the activity at issue
here, and thus indicate that wastewater treatment sludges  and other  hazardous secondary
materials going to quench coking could be classified as solid wastes.4
       2  October 8, 1993 and October 13, 1993 letters from Mark A. Smith (Unocal) to James R.
Berlow.

       3  See September 3, 1997 letter from  Kyle Isakower, American Petroleum Institute to
William Brandes, Office of Solid Waste.

       4The AMC I court gave this provision a restrictive reading, stating (somewhat circularly)
that it applied only to material that had already become a hazardous waste.  824 F. 2d at 1188.
However, given the holding of AMC II that wastewater treatment residuals can be classified as
solid wastes and that wastewater treatment operations break any chain of what must be  regarded

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More basically, EPA does not regard the use of oil-bearing wastewater treatment sludges in the
quenching process to be the type of operation which must necessarily be classified as part of an
on-going manufacturing process. The parts of the petroleum refining process outside the
Agency's RCRA jurisdiction involve the sequential distillation of crude oil into various fractions
such as gasoline, fuel oil, asphalt, and conventional coking. See 824 F.2d at 1181. However, the
quenching process need not be viewed as one more on-going step in this process. Not only is
there the temporal interdiction of the generation of wastewater and subsequent management of
the wastewater and sludges in the refinery's wastewater treatment system, but the quenching
process differs in material ways from the standard refining operations. As discussed above, the
materials utilized have less oil, higher percentages of unusable materials, and the process
generates less recovered oil, than any other unit operation in the conventional refining process.

The Agency thus does not accept the argument that exclusion of hazardous secondary materials
used in the quenching process is compelled. This is not to say that the Agency lacks the
discretion to make such a determination. The term "discarded" is ambiguous, and within the
Agency's authority to interpret consistent with the general goals and policies of the statute.
AMC II, 907 F. 2d at 1186; American Petroleum Inst v. EPA, 906 F. 2d 726, 741 (D.C. Cir.
1990). Among these goals, of course, is encouraging environmentally sound recycling. RCRA
section 1003(a)(6). Moreover, assessing what should be viewed as continuous industrial
processes, and which types of material recovery operations are "not part of the waste disposal
problem" (AMC II, 907 F.2d at 1186), are the types of technical and policy questions
particularly committed to EPA's expert discretion. It is that discretion which the Agency is
exercising in determining in this rule that a conditional exclusion is appropriate for certain
hazardous oil-bearing secondary materials used in the coke quenching process.

As mentioned above, the exclusion continues to be limited to situations where inappropriate
storage or accumulation does not occur, and to processes that do not result in coke products that
exhibit any of the characteristics of hazardous waste. The D.C. Court articulated the Agency's
authority to classify a waste as "discarded" even in those cases where the waste may be destined
for reuse or recycling. As the D.C. Circuit indicated, "discarded" is an ambiguous term that
admits to interpretive discretion. The Agency is exercising such discretion in the rule
promulgated today. AMC II. 907 F. 2d at 1185.

EPA also notes that the EPA Administrator through a rulemaking subject to notice and comment
may designate solid wastes recycled in any manner as "inherently waste-like materials" in
accordance with the criteria of 40 CFR 261.2(d)(3). The intent to recycle is not a shield against
the regulation of residuals that have left the ongoing process.
as a continuous industrial process, the wastewater treatment sludges destined for the quenching
process could be classified as being hazardous wastes.

June 29, 1998 II-7

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Comment 3: [Risk is not an acceptable basis for DSW determination, but if it were, there is no
significant risk]

API notes that, in support of the proposal, as well as in many other recent contexts involving the
definition of solid waste, EPA tends to elevate considerations of risk to a level that is
unnecessary in light of the case law In other words, the Agency appears first to consider the
level of potential risk to human health and the environment that it perceives to be associated with
a given material or recycling process, and then decides largely on that basis whether or not a
recycled material is or should be a solid waste, without regard to whether the material is
discarded. See, e.g., 59 FR 38540 (July 28, 1994) (i.e., recovered oil rule); 57 FR 27880, 27884
(June 22, 1992) (exclusion for coke by-product plant residues). One obvious flaw in this
approach is that in some industries, even the primary manufacturing process, using only virgin
materials, may pose substantial risks. Yet EPA has always recognized that in enacting RCRA,
Congress did not intend for EPA to regulate or otherwise intrude into the primary manufacturing
process.5 Rather, Congress limited EPA's authority under RCRA to materials that are discarded,
i.e., disposed of, and provided vast authorities in other statutes, such as the Clean Air Act and the
Clean Water Act, to regulate manufacturing and the recycling of undiscarded materials6.

Nonetheless, the Agency supports the proposed exclusion in this rulemaking, in large part, on the
basis of a lack ofrisk associated with the recycled oil-rich materials. See, e.g., 60 FR 57752,
57754 - 55. While, as discussed above, API does not believe that purported risk is the lawful
criterion for determining whether materials are solid wastes (as opposed to determining which
solid wastes may be hazardous waste),7 API agrees that the oil-bearing residuals at issue do not
*See, e.g., 51 FR 25487 (July 14, 1986) (citing H.R. Rep. No. 1491, 94th Cong., 2d Sess.
26 (1976)). 50 FR 638 (Jan. 4, 1985).

6For the same reasons, API questions EPA's authority to regulate materials as solid
wastes on the basis of a finding that they are "inherently waste-like", see 60 FR 57755, where
such a finding is based primarily on perceived risk and not on the controlling statutory criterion
of "discard."

7API also takes exception to the implicit suggestion in the preamble that recycled
secondary materials are presumed to be solid wastes, unless EPA can justify a determination that
they are not solid wastes based on safety or risk considerations. See 60 FR 57752 (col. 3). No
such presumption appears in the statute or in the cases construing the statute. EPA's reliance on
the API case is misplaced. There, the court invoked RCRA's "cradle-to-grave" scheme to
question EPA's conclusion that a particular solid waste (electric arc furnace dust) ceased to be a
solid waste upon reaching a recovery facility. The dust's status as a solid waste in the first
instance was undisputed, and not in issue in that case. Nowhere did the court suggest that
secondary materials must be presumed to be solid wastes in order to implement RCRA's cradle-
to-grave scheme.

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pose significant levels of risk when recycled in the petroleum refining process.  The residuals
typically are stored and transported in non-land-based8 vessels or devices that are designed to
prevent releases.  Emissions from the refining processes to which the residuals are returned are
subject to stringent controls under the Clean Air Act.  Moreover, the refining process separates
contaminants from hydrocarbons such that the fuels produced, and their combustion, do not pose
the kind of risks that Congress intended to address when it directed EPA to regulate hazardous
waste fuels in the 1984 RCRA Amendments.

Thus, while API believes that common-sense, the case law, and the undiscarded nature of these
residuals provide the appropriate rationales for the proposed exclusion, the exclusion has a sound
basis even when viewed purely from the perspective of risk. In addition, API concurs with EPA
that the proposed exclusion will promote legitimate recycling and resource conservation,
consistent with the objectives of RCRA; see 42 U.S.C. Section 6902, and EPA's regulatory
reinvention efforts. (API, 00046) (See also CMA, 00018; Mobil, 00033)

Response: The Agency based its decision to exclude,  from classification as solid waste, oil-
bearing residuals that are inserted directly into any part of the refining process upon EPA's
authority to regulate materials that are recycled, as interpreted and  established by the Courts,
including the AMC II decision (AMCII, 907 F. 2d at  1186-87).  The AMCII decision  established
that EPA has jurisdiction over materials that are recycled when the management of such
materials includes an element of discard.  The Court in AMC II held that "discarded" is an
ambiguous term that EPA may interpret in a reasonable manner.  One way in which the Agency
has chosen to interpret the term "discard" is through a determination of whether recycling serves
as a shield for treatment or destruction of a waste or its constituents, or provides for the
legitimate reuse of a material as a feedstock in a production process.  In making such an
interpretation, the Agency may analyze the material in question to determine whether the
material is substantially similar to other feedstocks used in the production process and  whether
the material  can be inserted into the production process without raising the concentrations of
hazardous constituents in the final product to levels of concern. The preamble discussions cited
by the commenter are the discussions that present the  Agency's findings relative to  the
determination of whether the oil-bearing materials are being discarded rather than legitimately
recycled.
       8API notes that the proposed regulatory language conditions the exclusion upon a
material not being "placed on the land."  Consistent with EPA's long-standing policy that
products that are spilled and promptly cleaned up and recycled are not wastes, API assumes that
EPA intends to condition the exclusion upon the absence of any placement on the land in a
manner constituting disposal. EPA should either revise the condition to the exclusion to read
"placed on the land in a manner constituting disposal," or explain in the preamble to the final rule
that the condition should be so read.

June 29, 1998                              II-9

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In today's rulemaking, the Agency has determined that oil-bearing secondary materials generated
by the petroleum refining sector that are reused in the refinery process are substantially similar to
streams used as feedstock in the industry. The critical recycling practice for purposes of this
rulemaking is recycling of secondary streams into petroleum coking operations. (This is because
virtually all secondary streams which contain oil, but are not pure enough to be "recovered oil,"
are recovered via coking). The secondary streams are substantially similar to normal coker
feedstock material. In addition, all the data available to EPA indicates that the recycling of oil-
bearing residuals can be accomplished without raising hazardous constituent concentrations to
levels of concern in the final coke product.9 To partially guard against this possibility, EPA is
limiting the exclusion to materials that result in the production of coke that does not exhibit the
characteristic of a hazardous waste.

In addition, EPA has found that hazardous oil-bearing refinery sludges are managed in much the
same way as are non-regulated coker feedstocks prior to insertion into the petroleum coker (be it
normal coking or quench coking).10 Given that the oil-bearing materials are substituting for
feedstocks, the industry has a significant economic incentive to store the materials in a safe
manner. Therefore, the Agency does not believe that storage of the residuals prior to reinsertion
into the refining process poses hazards to human health and the environment. To guard against
risks associated with unsafe storage practices, the Agency has conditioned the exclusion on there
being no placement of the materials on the land and the materials cannot be accumulated
speculatively (i.e., there can be no element of discard). See 63 FR at 28581 (May 26, 1998)
where EPA imposed identical conditions on intra-industry recycling of mineral processing
secondary materials, and explained that consideration of risk is relevant to determinations of
when a recycling activity is "part of the waste disposal problem," a key component of the
jurisdictional standard. See AMC II. 907 F. 2d at 1186.

Furthermore, data on the composition of the coke product indicate that use of oil-bearing
secondary materials has little, if any, impact on the quality and/or properties of the resulting
coke.11 12 EPA has information which indicates that levels of toxic metals in coke produced from
oil-bearing sludges is comparable to those found in coke produced strictly from crude oil
residuum.
9 "Petroleum Refining Process Waste Listing Determination, Supplemental Background
Document, " U.S. EPA, Office of Solid Waste, March, 1997.

10 Ibid

11 February 2, 1993 data submission from Mobil Oil Corporation.

12 "Petroleum Refining Process Waste Listing Determination, Supplemental Background
Document, " U.S. EPA, Office of Solid Waste, March, 1997.

June 29, 1998 11-10

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Given each of these findings, the Agency finds that the reinsertion of oil-bearing residuals into
the refinery coking process is not part of the waste disposal problem. Identical findings support
the exclusion for insertion elsewhere in the refining process.

In response to the commenter's request to revise the proposed condition of the exclusion to the
absence of any placement on the land "in a manner constituting disposal," the Agency disagrees
with the commenter. The Agency's reason for restricting the placement of secondary materials
on the land goes beyond use "constituting disposal." EPA's intent for the condition also is to
preclude the storage of oil-bearing secondary materials in land-based units prior to reinserting the
materials into the refinery process. EPA has long established that placement of hazardous wastes
in land-based units constitutes discard. Courts concur. See, for example, AMC II, 907 F. 2d at
1186-87. Hazardous oil-bearing secondary materials that are managed in land-based units thus
are not included with the exclusion.

EPA clarifies for the commenter that materials excluded from the definition of solid waste (eg.,
hazardous commercial chemical products, excluded secondary materials that are being recycled)
that are spilled and immediately cleaned up and recycled remain excluded from the definition of
solid waste. However, contaminated soils and other cleanup residues that are not recycled are
solid wastes. In cases where a generator makes a claim that spill residues are excluded materials,
the generator has the burden of proving that legitimate recycling will take place. In the absence
of strong, objective indicators that recycling is taking place, or that the generator intends to
recycle the materials, the spill residues and contaminated media are solid wastes immediately
upon being spilled, because they are abandoned, and must be managed in accordance with all
applicable RCRA management standards. See generally 55 FR at 22671 (June 1, 1990).

Comment 4: The commenter urges EPA to finalize the planned interim final rule correcting the
original recovered oil exclusion. (CMA, 00018)

Response: EPA corrected the existing exclusion from the definition of solid waste for recovered
oil through the issuance of a direct final rule (61 FR 13103, March 26, 1996). The corrected rule
reflects the result EPA initially intended, which was to condition the exclusion of recovered oil
on the oil being reinserted into the petroleum refining process at a point where the process
removes or will remove at least some contaminants. In today's final rule, the Agency is
expanding the exclusion to allow for reinsertion of a broader array of residuals into more parts of
the refinery, including the coking process.
C. Comments Against the Proposal (ETC, 00038)

ETC submitted extensive comments against the proposal. The general flow of these comments is
outlined below:
A. The proposed exclusions ignore controlling judicial decisions on EPA's jurisdiction
(Comment 1).

June 29, 1998 11-11

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B. Overwhelming evidence of environmental contamination from mismanagement of oil-
bearing materials proves that these materials are part of the waste disposal problem
(Comment 2)
C The proposed exclusions are overly broad because the secondary materials in question are
not immediately reused in ongoing, closed-loop production processes
1 The oil-bearing residuals will not be managed in a closed-loop process (Comment
3).
2. The oil-bearing materials are not immediately reused (Comment 4).
D. The proposed exclusions are overly broad because there is no required minimum oil
content for the excluded materials (Comment 5).
E. The proposed exclusions are overly broad because they contain no limitations on
hazardous constituent content in the secondary materials destined for reuse (Comment 6)

Comment 1: EPA correctly states that judicial decisions have construed the Agency's RCRA
jurisdiction over secondary materials very broadly, with only "relatively narrow" exceptions for
materials that are not "discarded." 60 FR 57752 col. 2. Specifically, the Agency is foreclosed
from regulating materials as solid wastes only when the materials are "destined for immediate
reuse in another phase of the industry's ongoing production process [and] . . . have not yet
become part of the waste disposal problem." Id. (quoting American Mining Congress v. EPA.
907 F.2d 1179, 1186 (D.C. Cir. 1990) (AMC ID (emphasis by court)).

Determining whether a particular reuse practice is part of ongoing production activities or is part
of the waste disposal problem "necessarily entails fact-specific evaluation." 59 FR 38536, 38541
col. 3 (July 28, 1994). EPA also acknowledges that such decisions cannot be made in a vacuum.
Instead, EPA must reconcile determinations to exclude materials from RCRA jurisdiction with
Congress' overriding objective to establish a cradle-to-grave regulatory structure to ensure the
safe handling of hazardous wastes. 60 FR 57752 col. 3.

In proposing to expand the existing exclusion at 40 CFR 261.4(a)(12) and to add a new exclusion
at 261.4(a)(13), however, EPA would contravene this controlling law. EPA's proposal fails to
provide any assurance that the oil-bearing residuals in question will be (1) immediately reused,
and (2) managed in a manner that prevents them from becoming part of the waste disposal
problem prior to reuse. This failing is particularly unjustified given that historic mismanagement
of oil-bearing materials has already caused significant environmental contamination.

In short, the proposal would inappropriately exclude materials from Subtitle C regulation that are
discarded and are part of the waste disposal problem. This, in turn, would defeat RCRA's goal of
ensuring safe management of hazardous wastes from cradle to grave.

Response: The Agency disagrees with the commenter. Although the Agency is precluded from
classifying a material as a solid waste when the material is "destined for immediate reuse," the
Court did not hold that materials that are not immediately reused are always solid wastes. The
Agency retains considerable discretion in determining when (or in what situations) materials that

June 29, 1998 11-12

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are destined for reuse become part of the waste disposal problem and therefore are solid wastes.
In the case of the oil-bearing materials that are the subject of today's rulemaking, the Agency
determined that these materials are substantially similar to normal feedstock materials and that
petroleum refiners are handling these materials in the same or a similar manner as other
feedstock materials. In addition, with respect to secondary materials recycled via coking, the
Agency determined that the recycling of oil-bearing residuals can be accomplished without
raising hazardous constituent concentrations to levels of concern in the final coke product, when
such materials are inserted into the coker. Therefore, these materials are not part of the waste
disposal problem.

To ensure that oil-bearing residuals are not "discarded" or managed in a manner that would cause
them to become part of the waste disposal problem, the Agency conditions the exclusion on there
being neither placement of oil-bearing secondary materials on the land prior to reuse nor
speculative accumulation of the secondary oil-bearing materials. In this manner, while the
Agency is relinquishing some control over the subject residuals, the Agency has acted to limit
the period of time that such materials may be retained before they are returned to the process.
The Agency also notes that secondary materials that are spilled or otherwise released to the
environment are not excluded from the definition of solid wastes. Such materials are abandoned,
and therefore discarded and remain subject to RCRA management standards. In addition, the oil-
bearing residuals may be subject to the Spill Prevention and Control Act.

The Agency notes that the materials excluded under this provision of today's rule must be
returned directly to a refinery for insertion into the refinery process. While this is not an issue if
materials are recycled on site, EPA has concerns about situations where these materials are
generated at one refinery for insertion into another. Such materials should not end up at an
intermediate non-refinery facility without an accompanying hazardous waste manifest. In cases
where materials generated at one petroleum refinery are to be recycled at another refinery, to
meet the conditions of the exclusion the materials must be located either at the generating
refinery, at the receiving refinery, or must otherwise be in transit between the two facilities. This
is consistent with the argument that the exclusion is provided on the basis that the secondary
materials are being used within the realm of on-going production in the petroleum refining
sector.

Comment 2: As mentioned in Comment 1, secondary materials become discarded, and hence
"solid wastes," if they are handled in such a way as to become part of the waste management
problem, even if the materials will subsequently be reused in a production process. AMC II. 907
F.2d at 1186; American Petroleum Inst. v. EPA. 906 F.2d 729, 741 (D.C. Cir. 1990); Shell Oil
Co v. EPA. 950 F.2d 741, 756 (D.C. Cir. 1991). An obvious example is placement of materials
into a land disposal unit such as a surface impoundment, where hazardous constituents can be
released to the environment, prior to insertion into a recycling unit. AMC II. 907 F.2d at 1186.

Another way a material can become a waste subject to RCRA regulation is if its management has
resulted in environmental harm. As EPA stated in declining to include certain petroleum refinery

June 29, 1998 11-13

-------
sludges in the exclusion for recovered oil, "there have been many damage incidents associated
with management of such materials as toxic sludges from wastewater treatment, confirming that
these materials are part of the waste disposal problem, rather than part of an on-going
manufacturing operation." 59 FR 38542 cols. 2-3 (emphasis added). See also 60 FR 57753 col.
1.

In this rulemaking, EPA recites the above principles but then states that "it does not believe that
storage of the residuals prior to reinsertion into the refining process poses hazards to human
health or the environment." 60 FR 57754 col. 3. This statement is contradicted by all available
facts. In reaching this mistaken conclusion, EPA expressed its belief that refineries manage such
residuals in a similarly safe manner as they manage non-regulated crude oil residuals, id in
fact, the Agency did not even assess the risks posed by storage and management of the very oil-
bearing materials proposed for exclusion. See, e.g . Listing Background Document. EPA RCRA
Docket document no. S0003, at 26, 37, 46, 57 and 121.

As discussed below, EPA has ignored overwhelming evidence in the record that oil-bearing
materials have been widely mismanaged and have caused environmental damage at petroleum
refineries throughout the United States. A review of that evidence "confirms that these materials
are part of the waste disposal problem." 59 FR 38542 cols. 2-3. The evidence convincingly
demonstrates that Subtitle C controls for management of oil-bearing residuals destined for reuse
are necessary to protect human health and the environment.

EPA investigated and reported on the following damage incidents in preparing its risk
assessment for this rulemaking:

1. Golden West Refining Company — Santa Fe Springs, CA
Metal and volatile organic contamination in groundwater and soil beneath aboveground
storage tanks (ASTs) in west and south tank farms. Hydrocarbon releases from the site
have rendered nearby aquifer unsuitable for domestic or municipal use. Assessment of
Risks from the Management of Petroleum Refining Waste: Background Document.
Appendix H, Damage Incident History, at H-l 1 (EPA RCRA Docket Document No.
S0006).

2. Amoco Oil Refinery and South Tank Field ~ Whiting, IN
Nearby residents have complained about releases of catalyst from electrostatic
precipitators and hoppers. Report notes a "high potential for release [to air and surface
water] exists" from windblown particles while the precipitator is being emptied. Report
also discusses releases from spent catalyst storage bins. Damage Incident History at H-22
toH-23.

3. Energy Cooperative, Inc. — East Chicago, IL
"Several of the [ASTs] are known to have leaks. A major rupture of one of the storage
tanks reportedly last occurred in 1969. Most of the tanks show visual signs of

June 29, 1998 11-14

-------
overflowing as well as oil/product accumulations at the base of the tanks and within the
berm containment area. It is suspected that repeated spills, overfilling, and leaks have all
significantly contributed to both soil and groundwater contamination." Damage Incident
History at H-24 (emphasis added).

"The ECI site appeared to have had numerous and significant spills. Most tanks had
visual signs of overfilling, and product was found on the ground inside the containment
berms. Many of the earthen berms showed signs of staining, as did the base of the
storage tanks and equipment. Documentation in the reports reviewed indicated broken
underground pipelines, tank leaks, and frequent overfills." Id. (emphasis added).

4. ARCO Oil & Gas Co. -- Lafayette, LA
Release of materials from a broken flowline caused by excessive corrosion at pipe elbow
Id. at H-27.

5. Canal Refinery ~ Church Point, LA
"Wastewaters and tank bottoms discharged from storage tanks." Id. at H-28.

6. Conoco-Lake Charles Refinery -- Lake Charles, LA
"High potential for past releases of hazardous constituents [from caustic ASTs] ... to
underlying soils and groundwater." Also, barium, chromium, copper, zinc, and several
organic compounds detected in groundwater samples collected near chromium and lead
AST. Id. at H-29.

7. Conoco-Westlake Refinery — Westlake, LA
Spillage of oily material observed near East Gas Oil and Crude Oil Tank storage facility.
"The spillage appears to be caused by poor housekeeping practices. Also, the facility
failed to clean up this spillage in a timely manner." In addition, "[t]he poor condition of
[four spent caustics ASTs] could lead to leaks or possibly tank rupture." Id at H-30.

8. Shell Oil Co. - Norco, LA
"[A]n estimated 40,680 pounds of 20 percent sodium hydroxide (caustic) were spilled to
an unlined tank dike. The misinterpretation of operating procedures resulted in the
overfilling of a tank used to blend 20 percent sodium hydroxide." Report also notes that
there have been "several releases involving alkaline solution and slop oil, attributed to
line corrosion or fibercast piping pulling apart at the joint." Damage Incident History at
H-34toH-35.

9. Giant Refinery -- Gallup, NM
Release of sludge from reformer-desulfurizer charge tank occurred during normal tank-
cleaning operations. Id- at H-38.

10. Basin Refinery -- Okmulgee, OK

June 29, 1998 11-15

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"[I]t appeared that some of the [ASTs] on-site still contained oil products and were
possibly leaking. Soil discoloration, possibly from berm overflows or failure of
abatement equipment, was evident during the site visit." Id- at H-41.

11. El Paso Refinery - El Paso, TX
"Excessive hydrocarbon contamination of the groundwater has been found in the areas
surrounding and under the surface impoundments and several storage tanks. One of the
SWMUs is a concrete, on-ground tank equipped with a leachate collection system. The
concrete tank apparently leaks, as indicated by the accumulation of liquid in the leachate
collection system." Groundwater contamination from this refinery "is a great concern
since El Paso is totally dependent on groundwater for the majority of its water supply."
Id. at H-48.

12. Old ATC Refinery Superfund Site -- Wilmington, NC
"Results of previous investigations identified 13 sources of contamination at ATC,
including 11 areas of soil contamination and two characterized waste areas. The majority
of these sources involved the mismanagement of petroleum products which can occur
[from] pipeline leaks during the transfer of petroleum over pipelines or from defective 55-
gallon drums." Id. at H-50.

In addition to these damage incidents documented by EPA itself, the API, in a recent survey,
reported pervasive environmental contamination at petroleum refineries. The survey also
reported a general lack of basic safeguards for ASTs, such as secondary containment. A Survey
of API Members' Aboveground Storage Tank Facilities (July 1994). API's findings are generally
consistent with those of EPA. See, e.g.. Listing Background Document at 154 (nearly one-third
of spent caustic ASTs have no secondary containment equipment). The API survey reveals the
following facts regarding management of oil-bearing materials:

1. There are 95 petroleum refining facilities in API's membership, and the 61 facilities
responding to the survey collectively have 10,298 ASTs on-site. API Survey at 3-4.
Well over half of these tanks have a capacity exceeding 420,000 gallons, with roughly
one-third of the tanks having a capacity exceeding two million gallons. Id. In addition,
approximately 90% of the total number of tanks are more than 15 years old. Id. at A-8.

2. Over one-third of the ASTs lack overfill protection mechanisms. API Survey at 7.

3. Of the 61 responding facilities, 85% have known groundwater contamination on-site.
The contamination rate may be even higher for non-API facilities and for API facilities
not responding to the survey. API Survey at 16. Of course, there may very well be
groundwater contamination at facilities that responded "don't know" to this question in
the survey. Id. at B-6.
June 29, 1998 11-16

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4. Of the refineries with known on-site groundwater contamination, 44% reported off-site
groundwater contamination as well. Jd at 15.

5 Of the 10,298 ASTs operated by survey respondents, 3.6% (or 370) of the tanks had
"confirmed bottom failures" within the past five years, id. at 19. Given that a possible
response to this question in the survey was "have no idea," the actual number of tanks
with such failures is likely significantly higher. Id. at B-5.

6. Over half the refineries with buried AST-associated piping have less than 25% of the
piping cathodically protected to prevent corrosion-related failures. Id., at A-18.

In view of these facts, EPA's argument that oil-bearing residuals will be managed "just as safely"
as crude oil feedstocks is unpersuasive. In addition, the newspaper articles attached as Exhibit 2
(see ETC's original comments for exhibits) illustrate that uncontrolled releases of petroleum
products, frequently in excess of hundreds of thousands of gallons, are a serious environmental
problem.

In light of this undisputed evidence of mismanagement, oil-bearing residuals destined for reuse at
petroleum refineries clearly are part of the waste disposal problem, and therefore must be
regulated as solid wastes subject to RCRA. AMC II. 907 F.2d at 1186; 59 FR 38542 cols. 2-3.
EPA's proposal to exempt the management of such residuals from all Subtitle C controls,
including the 40 CFR Part 264 Subpart J tank standards — without even assessing the risks posed
by storage of the residuals prior to reuse — is irrational, unsupported in the record, and contrary
to law.

Response: Although the damage incidents cited by the commenter have some relevance to the
issue of assessing potential risks from the management of oil-bearing residuals prior to reuse at
petroleum refineries, many of the damage cases cited by the commenter and which are contained
in Appendix H of EPA's document "Assessment of Risks from the Management of Petroleum
Refinery Wastes: Background Document," are either significantly dated, or are associated with
facilities that no longer are in operation. In addition, some of the damage incidents cited are not
the result of releases of oil-bearing residuals or releases of hazardous wastes.

EPA has found that hazardous oil-bearing refinery sludges are managed in much the same
manner as are non-regulated crude oil residuals prior to insertion into the petroleum refinery
process.13 A typical petroleum refinery operation stores secondary materials in tanks or
containers that are designed and maintained in accordance with guidelines set by the American
National Standard Institute (ANSI). The ANSI standards governing design, construction,
operation, maintenance and inspection of petroleum terminal and tank facilities help to ensure
13 "Petroleum Refining Process Waste Listing Determination, Supplemental Background
Document, " U.S. EPA, Office of Solid Waste, March, 1997.

June 29, 1998 11-17

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environmentally protective storage of in-process residuals prior to reinsertion into the coker or
other parts of the refinery. To further insure against improper storage of oil-bearing residuals,
the Agency has conditioned the exclusion on there being neither any storage in a manner
involving placement on the land, nor speculative accumulation of the secondary oil-bearing
materials

The Agency understands that even in cases where a refinery adheres to stringent and highly
protective storage standards, the potential for environmental releases exists. The Agency notes
that waste mismanagement incidents, such as those to which the commenter refers, are subject to
full RCRA Subtitle C controls. The exclusion for oil-bearing residuals that are returned to the
petroleum refinery process does not apply to spill residues and contaminated media, unless such
materials are immediately cleaned up and recycled. Spill residues and contaminated soils are
solid wastes (and potentially hazardous wastes) if they are treated and/or disposed.141516 In fact,
the Agency contends that contaminated soils and other cleanup residues generally are solid
wastes because of the difficulty associated with recycling wastes contained within environmental
media. To demonstrate that a spill residue is not a solid waste, the generator has the burden of
proving that legitimate recycling will take place. Releases to the environment at permitted
RCRA facilities also are subject to the requirements for managing releases from solid waste
management units in Subpart F of 40 CFR Parts 264/265.

EPA notes fundamentally that these operations involve situations where there are distinct
questions regarding jurisdiction: intra-industry recycling in processes which can legitimately be
viewed as on-going production. The activity can also be viewed as sequential processing of
hydrocarbons contained in an initial raw material. Storage is analogous to storage of raw
materials. The rule addresses the most obvious possibility of such activities still being part of the
waste management problem by forbidding land placement for excluded materials. The
commenter's further implicit suggestion that leaks from storage necessarily also render these
secondary materials ineligible for exclusion goes too far in EPA's view. See 63 FR at 28581-82
(May 26, 1998) where EPA addressed similar arguments in the context of intra-industry recovery
within the mineral processing industry. EPA's conclusion here is similar: given the potential
jurisdictional constraints, "Where there is no obvious element of discard present, such as land-
based storage, the Agency does not believe it should exercise its interpretive discretion to assert
authority."
14 54 FR 48494, November 22, 1989.

15 55 F_R 22671; June 1, 1990.

16 See Agency guidance related to solid waste determinations for spilled commercial
chemical products, e.g., PPC: 944.1995(20); EPA Document Number: 530-R-95-002E; NTIS:
SUB-9224-95-005.

June 29, 1998 11-18

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EPA also notes a certain irony in this comment. The tanks storing these secondary materials are
unregulated because they are wastewater treatment tanks (see _64. l(g)(6)), and the commenter
has not questioned this exempt status.

Comment 3: In proposing to exclude a wide variety of oil-bearing residuals from RCRA
regulation if they are inserted into the refining process, EPA fails to reconcile the proposal with
existing Agency policy regarding closed-loop recycling. This failing further highlights the lack
of necessary safeguards in the proposal.

As part of its effort to justify imposition of upgraded design and operating standards for
hazardous waste storage tanks nearly 10 years ago, EPA "confirmed that a substantial number of
hazardous waste tank systems are likely to be leaking and may lead to substantial risks to human
health and the environment." 51 FR 25422, 25426 col. 1 (July 14, 1986). EPA indicated that its
data "confirm that leaking tanks present serious threats because they allow hazardous chemicals
to contaminate soils and ground water." id. at 25430 cols. 2-3.

The one exemption from the 1986 tank standards EPA allowed was for secondary materials
managed in closed-loop systems. EPA justified this exemption based upon "the closed nature of
the process (hard connections from point of generation to point of return to the original process),
integral relationship of these reclamation steps to production processes, and widespread use and
economic value of the activity." Id. at 25443 col. 1.

Significantly, the storage tanks that will be used to manage the oil-bearing residuals proposed for
exclusion in this proposal will be managed in tank systems just like those addressed in EPA's
1986 rulemaking. As discussed in Section II.B of ETC's comments, these tanks pose the same
kind and degree of risk EPA discussed for former hazardous waste storage tanks. Therefore, in
accordance with EPA's own reasoning, residuals managed in these tanks should not be eligible
for an exclusion from RCRA unless recycled in a true closed loop.

Of course, the proposal does not limit the new exclusion in this way. To the contrary, EPA
proposes to greatly expand the existing recovered oil exclusion in such a way that is neither
"closed" nor a "loop." Oil-bearing residuals could be shipped -- without a hazardous waste
manifest — to off-site locations to be stored prior to reuse. Moreover, such residuals could be
shipped from intracompany and intercompany sources, as well as from sources wholly outside
the petroleum refining industry. 60 FR 57754. EPA proposes no controls or any minimum
design or operating standards for storage and transportation of these materials. EPA has
therefore completely ignored both the storage tank damage case evidence in the docket and the
Agency's established position that hazardous secondary materials cannot be managed safely
outside a closed-loop process without meeting Subtitle C controls.

June 29, 1998 11-19

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potential to leak, and (4) conveyed to a production process without management standards, EPA
would be creating numerous opportunities for mismanagement of these hazardous wastes. In
doing so, EPA would be unable to "show[] how the determination is consistent with RCRA's
objective to 'establish a cradle-to-grave regulatory structure for the safe handling of hazardous
wastes '" 60 FR 57752 col. 3 (quoting API. 906 F.2d at 741).

Response: The Agency does not believe that the exclusion is overly broad, or that the exclusion
should be limited to immediate re-use in closed-loop systems. Other exclusions from the
definition of solid waste that are codified under §261.4 are for materials that are recycled under
circumstances that are not defined as closed-loop processes. The Agency has considerable
discretion in determining when the definition of solid waste applies to materials that are reused in
an on-going production process, as well as when the materials are "recycled" one-site, at an off-
site facility, or within another industrial process.17

EPA is finalizing the proposed exclusion from the definition of solid waste for oil-bearing
secondary materials generated at petroleum refineries and reused by petroleum refineries, based
upon a review of the policy and legal issues involved and on data provided to the Agency related
to the composition of the secondary materials and the manner in which secondary materials are
reused by the petroleum refining industry.1819 By finalizing the proposed exclusion, the Agency
is essentially providing the petroleum refining industry with a regulatory exclusion currently
available to other industries that generate hazardous secondary materials and use or reuse the
materials by reinserting the materials into a production process, essentially substituting the
secondary materials for primary feedstocks.

June 29, 1998 11-20

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restrictions to the exclusions from the definition of solid wastes for secondary materials that are
reused was to protect human health and the environment from the potential risks associated with
the incineration of hazardous wastes.  EPA views the incineration of hazardous wastes as a form
of discard  and retains jurisdiction of such wastes and management processes. However, EPA
does not necessarily view the use or reuse of secondary materials in the refinery process for the
production of primary fuels by the petroleum refining industry as discard. The fact that
secondary  material  originates within the industry, and involves recovery and utilization of a
resource present in  the initial crude oil,  raises significant issues of authority.  As noted in the
previous response, in such cases, the Agency believes its discretion is best exercised by assuming
that certain elements of discard -- land-based storage in particular — are addressed, but not to
seek to control storage activities which are similar or identical to raw material storage practices.
Therefore, EPA revised the existing regulations governing the recycling of hazardous secondary
materials to exclude oil-bearing secondary  materials  generated by refineries and reused in the
refinery process by inserting the materials into the refining process from the definition of solid
waste. To ensure that the management of such materials does not include an element of discard,
and to ensure that the materials do not become part of the  waste disposal problem, the Agency is
restricting  the exclusion to situations where the secondary materials are not stored or placed on
the land and where  there is no speculative accumulation of the materials.  The exclusion does not
apply to wastes and situations that would result in a coke product that exhibits a characteristic of
hazardous  waste.

In addition, in the final rule, EPA clarifies that the exclusion for  oil-bearing secondary materials
returned  to the refining process only extends to-the materials actually re-inserted into the  refinery
process.  In cases where oil-bearing secondary materials are processed (e.g.,  de-oiling,
centrifugation, desorption) prior to re-insertion into a refining unit, any residuals that may result
that are disposed or intended for disposal would be classified as F037 hazardous waste In the
final rule, the Agency has modified the  listing description  for F037 to include any residuals from
the processing of oil-bearing secondary  materials that, were it not for the exclusion, would
otherwise be defined as a listed hazardous waste.

EPA also clarifies that the Agency is not including within  the scope of the exclusion oil-bearing
secondary  materials generated outside the petroleum  refining sector (i.e., SIC 2911).  The
Agency is basing its decision not to exclude these secondary materials from the definition of
solid waste on the fact that EPA has very limited data from industry demonstrating the chemical
and toxic content of the materials.  In fact, the Agency  has no  information on which to base a
finding that the use of oil-bearing hazardous secondary materials originating in a non-refinery
sector of the petroleum refining industry in the coking process would be anything other than the
management of wastes (e.g., hazardous waste recycling) from  that non-refinery sector.  Oil-
bearing secondary materials originating  from non-refinery sectors have the potential to be more
waste-like  and thus  do not warrant an exclusion, especially if their ultimate use  is in the
quenching  process.
June 29, 1998                              11-21

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The Agency also is requiring that the materials excluded under this provision of today's rule be
returned directly to a refinery for insertion. While this is not an issue if materials are recycled on
site, EPA has concerns about situations where these materials are generated at one refinery for
insertion into another. Such materials should not end up at an intermediate non-refinery facility
without an accompanying hazardous waste manifest. In cases where materials generated at one
petroleum refinery are to be recycled at another refinery, to meet the conditions of the exclusion
the materials must be located either at the generating refinery, at the receiving refinery, or must
otherwise be in transit between the two facilities. This is consistent with the argument that the
exclusion is provided on the basis that the secondary materials are being used within the realm of
on-going production in the petroleum refining sector.

Comment 4: EPA's rationale for the proposed exclusion is based in part on the assumption that
oil-bearing residuals will be "inserted directly" into the refining process. 60 FR 57754 col. 1.
EPA adds that these residuals are "transferred directly" from storage to the refining process, and
thus such storage does not pose hazards to human health and the environment. Id at 57754 col.
3. As mentioned above, EPA did not even assess the risks posed by storage prior to reuse, even
though this activity is a critical component of the exclusion. Listing Background Document at
26,37,46, 57 and 121.

EPA, however, fails to mandate that the residuals be "immediately" or "directly" reused; instead,
the Agency merely prohibits speculative accumulation prior to reuse. 60 FR 57796 (proposed
261.4(a)(12)). In other words, as long as 75% or more of the residuals in storage are inserted into
the refining process within 12 months, then the exclusion may be maintained. 40 CFR
261. l(c)(8). It is clear, therefore, that immediate reuse of the residuals is not a condition of the
proposed exclusion, and that the Agency's stated rationale is contradicted by the actual regulatory-
language proposed.

To make matters worse, as detailed above there is substantial evidence that storage of oil-bearing
residuals prior to insertion into the refining process can cause environmental harm. Existing
tanks used to store these residuals, and existing pipes used to convey the residuals, frequently
lack basic safeguards necessary to prevent releases to the environment. In addition, operating
practices have contributed to releases of these materials. EPA's failure to structure the proposed
exclusion to ensure that "secondary materials [are] immediately reused within an industrial
process," Chemical Waste Management v. EPA. 976 F.2d 2, 14 (D.C. Cir. 1992), will result in
unacceptable risks to human health and the environment.

Response: The Agency is not asserting that oil-bearing residuals must be "immediately"
recycled back to the petroleum refinery process. EPA did not base the proposed exclusion on
such a premise and the final rule does not restrict the exclusion to those instances where the oil-
bearing residuals are recycled within a closed-loop system. The Agency finds that the exclusion
is not overly broad and the exclusion need not be limited to immediate re-use in closed-loop
systems.
June 29, 1998 11-22

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EPA recognizes that not all facilities transfer oil-bearing secondary materials from exempt
wastewater treatment tanks via hard pipe or tank trucks to stationary tanks or containers where
oil is recovered and/or secondary materials are prepared for insertion into the coker. However,
EPA believes that refineries are handling oil-bearing materials in the same or similar manner as
other feedstocks and that these management practices are protective. The Agency points out that
the American National Standard Institute (ANSI) standards governing the design, construction,
operation,  maintenance, and inspection of petroleum terminal and tank facilities help to ensure
that the storage of residuals prior to reinsertion into the refinery process  is  protective of human
health  and the environment.  In addition, the Agency addressed what it believes to be the primary
concern—placement of oil-bearing materials on the land—by including a restriction on the
proposed exclusion.

The Agency also is requiring that the materials excluded under this provision of today's rule be
returned directly to a refinery for insertion. While this is not an issue if materials are recycled on
site, EPA has concerns about situations where these materials are generated at one refinery for
insertion into another, but are instead managed at intermediate non-refinery facilities prior to
insertion into a petroleum refinery process. This is consistent with the argument that the
exclusion is provided on the basis that secondary materials are being used within the realm of on-
going production in the petroleum refining sector.  EPA is indicating in the regulatory text of the
exclusi 5n that oil-bearing materials may be inserted into the same refinery where they are
generated,  or sent directly to another refinery, and still be excluded.

EPA is finalizing the proposed exclusion from the definition of solid waste for oil-bearing
secondary materials generated and reused by petroleum refineries based upon a review of the
policy  and legal  issues involved and on data provided to the Agency related to the composition
of the secondary materials and the manner in which secondary materials  are reused by the
petroleum refining industry.20 21  By finalizing the proposed exclusion, the  Agency is essentially
providing the petroleum refining industry with a regulatory exclusion currently available to other
industries that generate hazardous secondary materials and use or reuse the materials by
reinserting the materials into the production process, essentially substituting the secondary
materials for primary feedstocks.

Prior to today's rule, the petroleum refining industry was precluded from reusing many
recyclable secondary materials in the refinery process, unless the materials were handled as
hazardous wastes prior to  being reinserted into the refinery process.  The previously regulatory
exclusions from the definition  of solid waste for secondary materials that are reused or recycled
       20 February 2,  1993 data submission from Mobil Oil Corporation.

       21  "Petroleum Refining Process waste Listing Determination: Supplemental Background
Document, " U.S. EPA, Office of Solid Waste, March, 1997.

June 29,  1998                              11-23

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preclude the use of such materials to produce fuels (i.e., 40 CFR §§261.2(e)(2)(ii),
261.4(a)(8)(iv)).

The primary business of the petroleum refining industry is fuel production. Essentially, all
petroleum refining feedstocks, including secondary materials substituted for primary feedstocks.
contribute to the production of fuels. EPA's intent, when developing the previously established
restrictions to the exclusions from the definition of solid wastes for secondary materials that are
reused was to protect human health and the environment from the potential risks associated with
the incineration of hazardous wastes. EPA views the incineration of hazardous wastes as a form
of discard and retains jurisdiction of such wastes and management processes. However, EPA
does not view the use or reuse of secondary materials for the production of primary fuels by the
petroleum refining industry as discard. Therefore, EPA is revising the existing regulations
governing the recycling of hazardous secondary materials to exclude oil-bearing secondary
materials generated and reused by petroleum refineries from the definition of solid waste. To
ensure that the management of such materials does not include an element of discard, and to
ensure that the materials do not become part of the waste disposal problem, the Agency is
restricting the exclusion to situations where the secondary materials are not stored or placed on
the land and where there is no speculative accumulation of the materials. In addition, the
exclusion does not apply to situations that would result in a coke product that exhibits a
characteristic of hazardous waste. These conditions are not unlike the exclusions provided for
other materials that are excluded from the definition of solid waste under 40 CFR 261.4.
Comment 5: EPA's rationale for proposing to broaden the existing recovered oil exclusion at 40
CFR 261.4(a)(12) is that the oil-bearing residuals identified in this rulemaking are essentially the
same as those covered by the original exclusion. 60 FR 57754 col. 1. The instant proposal,
however, fails to provide any parameters or limitations on the meaning of the critical term "oil-
bearing residual." For this reason, the proposal is overly broad.

In promulgating the original exclusion for recovered oil, the Agency rejected the petroleum
industry's request to include oil-containing wastewaters in the exclusion. EPA noted that "[t]he
percentage of oil in plant wastewaters ... is minuscule, on the order of 0001% to .000001%."
59 FR 38539 col. 3. EPA explained that in distinguishing between excluded and non-excluded
oil-bearing materials, it will consider several factors, including water, solids and metals content.
Id. at 38537 col. 3. EPA emphasized, however, that "the salient characteristic of recovered oil is
the obvious one: that it consist primarily of oil." Id.

June 29, 1998 11-24

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proposed exclusion. Accordingly, the proposal could be seen as authorizing refinery operators to
deem any oil-containing secondary materials, even those with "minuscule" oil content, as
excluded fropi Subtitle C. Such an outcome would clearly exceed EPA's more limited objective
of excluding only those secondary materials that are "substantially similar to normal . . .
feedstock material." Id. at 57754 col. 2.

Response: The Agency considered, as suggested in several comments, setting a minimum oil
content to define the scope of "oil-bearing secondary materials" that are excluded when used in
the quenching process, or to require a demonstration of hydrocarbons actually being recovered
from the excluded secondary materials that is comparable to oil recovery in the conventional
coking process. The Agency rejected limiting the exclusion based on a set minimum oil content
or a recovery efficiency requirement for several reasons.

As the petroleum industry stated in their comments, the quenching process represents the last
possible process in which to recover hydrocarbon from the original crude oil feedstock. The
refinery processes and operating procedures are designed to separate and process into products as
much hydrocarbon as possible from the crude oil feedstock, in other words, to prevent as much
oil from making its way into these secondary materials as possible. The oil that does make its
way into these secondary materials is generally considered unavoidable and inevitable, or in
some cases, too much oil in these secondary materials is evidence of a problem with some aspect
of the overall refining process (which goes towards explaining the wide range of oil contents in
these materials). Thus, it would be counter to the overall efficiency of the petroleum refining
process to require a minimum oil content in the secondary materials. Conversely, the Agency
believes it is fundamental to this exclusion that there actually be oil recovered for further refining
when these oil-bearing hazardous secondary materials are used in the quenching process.

Also, the Agency believes that, in this case, a minimum oil content condition would do little to
ensure that only those secondary materials from which oil can actually be recovered would be
excluded, or in other words, the Agency does not believe that setting a minimum oil content
would ensure that secondary materials are legitimately being used in the quenching process.
Since most of the secondary materials in question result from wastewater treatment, a minimum
oil content requirement would only serve to encourage a refinery to operate the refinery process
less efficiency to ensure that there these secondary materials contain the minimum oil content
and thus avail themselves of an exclusion.

Although the Agency did not establish a minimum oil content for the exempt secondary
materials, it is highly unlikely that refinery owners or operators will allow any incompatible
materials to be inserted into the coker for fear of interfering with proper operation of the coker.
In addition, the coking process must comply with air emissions standards imposed under the
Clean Air Act. It is unlikely that refinery owners and operators will insert secondary materials
into the coker that will result in violations of the applicable CAA standards.
June 29, 1998 11-25

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EPA clarifies in today's rule that the exclusion for oil-bearing secondary materials returned to the
refining process only extends to the materials actually re-inserted into the refinery process. In
cases where oil-bearing secondary materials are reclaimed prior to re-insertion, any residuals that
may result from the reclamation process and that are not returned to the refinery process retain
the hazardous waste listing and must be managed as hazardous wastes. In the final rule, the
Agency modifies the proposed listing descriptions for refining wastes to include any residuals
from the processing of listed hazardous wastes.

Comment 6: EPA does not provide any limitation on permissible concentrations of Appendix
VIII hazardous constituents (e.g.. toxic metals) in oil-bearing residuals destined for reuse.
Consequently, the proposal runs counter to established Agency policy on preventing the
unregulated disposal of "toxics along for the ride" as part of otherwise legitimate reuse of
secondary materials.

Firmly established Agency policy holds that "[t]o determine whether the processing of a specific
waste is legitimate recycling or treatment, one must consider, among other things, the fate of the
constituents in the waste as they are processed." OSWER Directive No. 9441.1990(03) at 1. If
the waste "contains hazardous constituents not present in the analogous raw material (or
hazardous constituents at significantly higher concentrations than in the analogous raw material)
that serve no purpose in the manufacture of the product, the process would appear to constitute
treatment/disposal rather than legitimate recycling." Id at 2. See also OSWER Directive No.
9441.1989( 19) at 4 (same); OSWER Directive No. 9441.1985(29) at 2-3 (EPA must evaluate
Appendix VIII constituents and total suspended solids in water supernatant from petroleum
refinery wastewaters returned to API separator).

EPA acknowledges that it decided in the July 1994 recovered oil rule not to exclude hazardous
oil-bearing secondary materials that are inserted into the coking process "until the Agency
studied further whether the coker may be functioning ... as a waste management unit." 60 FR
57754 col. 1. EPA now asserts that it is "convinced" that the coker is an integral part of the
refining process, and "it is highly unlikely that refinery owners or operators would allow any
incompatible materials to be inserted into the coker for fear of interfering with proper operation
of the coker." Id. In addition, EPA points to industry data "which support's industry's claim that
oil-bearing sludges generated during the refining process are substantially similar to normal
feedstock material." Id.

There are two fatal flaws with this aspect of the proposal. First, EPA fails to make the exclusion
expressly conditioned upon not exceeding specified hazardous constituent concentrations in the
secondary materials. EPA does propose limiting the exclusion to the production of coke which
does not exhibit a hazardous waste characteristic. That limitation, however, focuses solely on the
product after it already has been subjected to the elevated temperatures of the coker, and provides
no limit on hazardous constituent content in the oil-bearing residuals prior to insertion into the
coker. where hazardous constituents may be disposed of or released into the environment.
June 29, 1998 11-26

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Faced with similar concerns, EPA promulgated maximum allowable levels of certain hazardous
constituents that could not be exceeded to maintain the recycling exclusion for used oil. 40 CFR
279.11. These "specifications" help ensure that used oil that is recycled is not adulterated with
toxic constituents and is in fact substantially similar to displaced virgin fuels See 50 FR 49164,
49180-87 (Nov. 29, 1985).

The second problem with this aspect of the proposal is uncertainty concerning the
representativeness of the data evaluated by EPA. The proposal would exclude secondary
materials sent to refineries from facilities in fully 13 different SIC codes. 60 FR 57753 col. 3
At the same time, the Agency merely states that it has received "some additional data" comparing
oil-bearing residuals with normal coker feed. Id at 57754 col. 2. To the extent those data are
limited to secondary materials from facilities in just a few of the permissible SIC codes, EPA
would have no rational basis to conclude that all the oil-bearing residuals covered by the
exclusion are substantially similar in hazardous constituent content to normal feedstock
materials.

EPA's failure to make the proposed exclusion explicitly conditioned upon not exceeding
hazardous constituent levels is particularly disturbing in light of the extensive mismanagement
and storage-related damage incidents discussed above. Without solid, representative data that
oil-bearing secondary materials from all 13 SIC codes included in proposed 40 CFR 261.4(a)(12)
do not contain Appendix VIII constituents not found in normal feedstock material (or hazardous
constituents at significantly higher concentrations than in the analogous raw material), EPA
would be severely undermining the RCRA cradle-to-grave regulatory system for hazardous
wastes.

Response: As set out in more detail in the preamble to the final rule, EPA carefully examined the
question of whether toxic metals are "along for the ride," i.e., serve a legitimate function or are
present in concentrations so high as to indicate that the secondary material is just being discarded
to get rid of unusable toxics. The Agency notes that the main purpose of the petroleum coking
unit is to recover hydrocarbons from the oil contained in the feedstocks for further refining.
Similarly, the main purpose of using the secondary materials in the coke quenching process is the
energy-efficient recovery of hydrocarbon from the residual oil in the oil-bearing secondary
materials, as a light fraction suitable for recovery as a high-end refining product. The Agency
also notes that coke product produced using hazardous secondary materials in the quenching
process is basically similar to coke produced without using secondary materials in the quenching
process. Further, EPA notes that the making of anode-grade coke, the most high-valued coke
with the most stringent product specifications, is likewise able to meet the product specifications
while using these secondary materials in the quenching process.

In considering whether the fact that the coke product produced using secondary materials in the
quenching process continues to meet the product specifications (and, in fact, demonstrates little
change in the levels of contaminants compared with coke produced without hazardous secondary
materials) is simply a result of dilution, the Agency acknowledges that such dilution does occur.

June 29, 1998 11-27

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However, there are several other considerations. For example, the primary product of the
petroleum coking process is the hydrocarbon fraction recovered for use as feedstock in the
production of high-value fuel products, with the coke product being a co-product of the coking
process.  The Agency is convinced that such recovery occurs when oil-bearing secondary
materials are used in the quenching process.  Given that the recovered hydrocarbon is the
primary product of using the secondary materials in the quenching process, the simple fact that
the coke product (i.e., the co-product) continues to meet the applicable product specifications and
shows no appreciable increase in risk carries more weight in the Agency's evaluation. In other
words, demonstrating hydrocarbon recovery is the key  test in determining whether the hazardous
secondary materials actually serve a useful role in the overall coking operation, rather than
demonstrating a net contribution to the coke (as opposed to no degradation of the coke).
Acknowledging that there is a potential for some degradation of the coke product, depending on
the constituent make-up of the particular secondary materials used in the quenching process, the
Agency believes that economic forces, driven by product specifications and competition for
markets, will serve to ensure that the quenching process is not simply a means of
indiscriminately disposing of hazardous wastes.  However, in cases where there is sufficient
degradation  of the product (or co-product) such that it no longer meets product specifications or
otherwise becomes unmarketable,  the Agency would question the legitimacy of using the
secondary materials in the quenching process. Similarly, if there were no hydrocarbon recovery
stemming from the use of the hazardous secondary materials in the quenching process, the
Agency would question the legitimacy of the activity.  (The Agency knows of no such cases.)

With regard to the commenter's concern regarding the  potential for hazardous constituents
contained in hazardous secondary  materials to be "toxics-along-for-the-ride," the hazardous
metals found in the  hazardous secondary materials generally can be traced back to the metals
found in the original crude oil feedstock and so do not  represent contaminants introduced through
means other than the continued processing of the raw material  feedstocks.  EPA's traditional
concern regarding unnecessary hazardous constituents being processed and ending up in a
product is mitigated in this case because the Agency views this activity as the continual
processing of a raw material that contains the hazardous constituents, with concentrations of
constituents found in the feedstock streams varying dependent on  the point in the overall
production process.  In the context of a multi-step  production process, there is much less of an
element of discard of the hazardous  constituents inherent in the original raw material than there
would be had these  secondary materials been generated by another industry or had the hazardous
constituents not been inherent to the original  raw material.

EPA also concluded that market constraints relating to  product specifications will act as a
deterrent to the reuse of residuals with significant levels of toxics.  Because anode grade
petroleum coke must meet rigorous specifications for salt content  and is of significantly greater
economic value than fuel grade coke, market constraints work to limit any degradation of
product quality. In  the case of fuel grade coke, while there are less stringent product standards,
there are nevertheless standards on the percent ash remaining.  As noted in the proposed rule (60
June 29, 1998                             11-28

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FR 57755), the data EPA obtained does not indicate a significant change in the composition of
fuel grade coke when produced with feedstocks that include oil-bearing residuals.

Finally, regarding the comments citing the lack of a specification for the oil-bearing secondary
material, in contrast to the existing specification for used oil fuel elsewhere in the RCRA
regulations. There is a critical difference between a waste-derived product  like used oil fuel —
which will be used directly — and an intermediate material which will be processed into a
product. In one case, risk can be posed to an end user, perhaps in a residential setting (see
November 29, 1985 final rule).  Whereas, EPA has already determined that use of secondary
refining materials within the refining process does not affect product quality or toxics levels in
end products.  EPA thus sees no need for a specification.

D.     Request for Clarification

Comment 1: EPA should explain that materials listed as hazardous wastes under 40 CFR
261.31 - 261.33 are not solid wastes when recycled in a manner described in 40  CFR
§§261.2(e)(l)(i), (ii), and (iii) or §261.4(a)(8).  EPA correctly recognizes that listed wastes are
not solid wastes if they are recycled in a manner described in 40  CFR §261.2(e)(l)(iii) or
§261.4(a)(8). Acknowledging that listed  wastes are not solid wastes under these two exclusions
calls into question the status of other listed wastes that are recycled in other ways, e.g., 40 CFR
§261.2(e)(l)(i) and (ii), and can be read to expand EPA's jurisdiction beyond what is provided
under RCRA.  Therefore, the commenter recommends that EPA  either clarify this issue in the
preamble to the final rule by explaining that these exclusions apply to all listed waste, or make
the following changes to the rules:

       1.      40 CFR §261.2(e) should be amended to read:
              Materials, including those  listed under 40 CFR SS261.31  -261.33. that are not
              solid wastes when recycled.

       2.      40 CFR §261.4(a)(8) should be amended to read:
              Secondary materials, including those listed under 40 CFR $§261.31- 261.33. that
              are reclaimed and returned to the original process  or processes in  which they are
              generated where they are reused in the production process provided:

(CMA, 00018)

Response:  The commenter most likely is referring to the discussion at 60 FR 57750 of the
proposed rule in which EPA failed to mention the status of other listed wastes that are recycled in
other ways, e.g., 40 CFR §261.2(e)(l)(i) use or reuse as ingredients and  (ii) use or reuse as
effective substitutes for commercial products.  EPA should have  stated, "However, when these
materials are recycled as described in 40 CFR 261.2(e)(l)(i), (ii), and (iii) or 261.4(a)(8), they are
not solid wastes and are not subject to hazardous waste regulations."  EPA acknowledges the
June 29, 1998                             11-29

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error. However, the structures of 40 CFR 261.2(e) and 261.4(a)(8) were not the subject of this
proposed rule.

Comment 2: Implicit in the proposed exclusion is the principle that oil-bearing residuals
destined for the refining process never become solid wastes, assuming they actually are recycled
(although leftover residuals following oil recovery that are discarded are hazardous wastes if the
residuals exhibit a hazardous waste characteristic). Put another way, the proposed exclusion
attaches at the point the residual is produced.22

For example, although API urges EPA to exclude oil-bearing wastewaters upstream of oil
recovery, assume for the sake of argument that EPA declines to exclude such wastewaters. The
oil-bearing sludge produced in an API separator would nonetheless be excluded under EPA's
proposal, if the sludge is destined for oil recovery and is actually sent to oil recovery. The sludge
is formed, or produced, as oil-bearing particles settle from the wastewater and collect in the
bottom of the separator. At that point of formation or production, the sludge (if destined for oil
recovery) is not a solid waste. The sludge does not become excluded only once it is removed
from the separator. As another example, crude oil storage tank bottoms, formed in the storage
tanks, never become solid wastes (either inside or outside the tank), if they are destined for oil
recovery and actually sent to oil recovery.

That this is EPA's intent is demonstrated by the following passage in the preamble to the
proposed rule, which discusses the protective nature of the management of wastewater sludges
prior to insertion to a coker or other refinery units:

The residuals are typically transferred from exempt wastewater treatment tanks via hard
pipe or tank trucks to stationary tanks or containers where oil is recovered and/or the
secondary materials are prepared for insertion into the coker. Since the residuals are not
ordinarily stored in stand-alone storage tanks but are instead transferred directly to
process tanks and containers (i.e., centrifuge systems, desorption units, etc.) EPA does
not believe that storage of the residuals prior to reinsertion into the refining process poses
hazards to human health or environment. In addition, American National Standard
Institute (ANSI) standards governing design, construction, operation, maintenance and
inspection of petroleum terminal and tank facilities help to ensure environmentally
protective management and storage of the in-process residuals prior to reinsertion into the
coker or other parts of the refinery. 60 FR 57754 (col. 3).
22To avoid confusion, we do not use the phrase "point of generation," because that point
is usually viewed as the point at which a material becomes a solid and hazardous waste or
otherwise becomes subject to regulation. See, e.g., the definition of "generator" in 40 CFR
260.10.

June 29, 1998 11-30

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 Additionally, EPA states that "[A]ny material that spills from tanks and containers and is not
 expeditiously retrieved for reinsertion is a solid waste and, if listed or characteristic, a hazardous
 waste." (60 FR 57755 (col 1).)  Presumably, a residual that spills from storage or oil recovery
 tanks and containers and that is expeditiously retrieved would not be a solid waste.

 There are, however,  two statements in the preamble that could cause confusion about the status
 of oil-bearing residuals during storage or oil recovery. First, EPA describes the proposed
 exclusion as applying to oil bearing residuals that are "inserted directly into any part of the
 refining process."  (60 FR 57754) (col. 1)) The use of the qualifier "directly" must have been
 inadvertent, because, as discussed above, the Agency recognizes that oil-bearing residuals are
 often stored in tanks and processed in oil recovery units before insertion to the refining process
 per se, and that such storage and processing should not affect the excluded status of the
 residuals.23 [see also RETEC, 00028]

 Second, with specific reference to crude oil storage tank sediment, EPA states that "de-oiling
 activities, whether in situ or ex situ, are considered recycling and thus are not subject to RCRA
 Subtitle C permitting requirements." (60 FR 57782 (col. 2)). This statement is potentially
 confusing because it could be read to suggest that the sediments are solid wastes, but that the de-
 oiling process is exempt solid waste recycling.  However, the correct analysis would be that  oil-
 bearing sediments destined for oil recovery are not solid wastes in the first instance. Thus, the
 quoted language most likely refers to the Subtitle C status of de-oiling units with respect to de-
 oiled residues destined to be discarded and which are solid wastes.

 EPA should clarify in the preamble to the final rule that oil-bearing residuals that are either
 destined for direct  insertion to the refining process or destined for recovery of oil (which is then
 inserted to the refining process), and that ultimately are so inserted, are excluded from the
 definition of solid waste from the point they are initially produced.24 Additionally, API'
 recommends that the language of the exclusion be amended to read as follows:25 (New language
 underlined; deleted language stricken through.)

       Any hazardous oil-bearing secondary materials that are produced by SIC codes: 1311,
        1321, 1381, 1382, 1389, 2911, 4612, 4613, 4922, 4923, 4789, 5171, and 5172, and whi
       are to be inserted  into the petroleum refining process (SIC Code 2911) at or before any
       23 EPA has previously confirmed this with respect to the "recovered oil" exclusion
promulgated in 1994. See, e.g., EPA Comment Response Document for Recovered Oil Rule
(Feb. 1994), F-94-SWF-S0003.

       24Residual materials remaining after oil recovery that are discarded would be solid wastes.
Their "point of generation" would be after completion of oil recovery.

       25New language is underscored. Deleted language is lined through.

June 29, 1998                               11-31

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       point where removal of contaminants occurs (including, but not limited to, distillation,
       catalytic cracking, fractionation, or thermal cracking units (i.e., cokers)), unless the
       material is placed on the land in a manner constituting disposal, or speculatively
       accumulated before being so recycled. Such secondary materials  inserted into thermal
       cracking units are excluded provided that the coke product does not exhibit a
       characteristic of hazardous waste.

This revised language would be more consistent with EPA's intent and with the recovered oil
rule (as it is expected to be  amended by direct final rule) in its use of the  phrase "to be inserted"
and by deletion of the unnecessary phrase, "along  with normal process streams." Most
importantly, it appropriately recognizes that oil-bearing residuals destined for the refining
process, with or without an intervening oil recovery step, are not "discarded" and are not  part of
the waste disposal problem. (API, 00039)

Response:  The exclusion applies at the point at which an oil-bearing residual is generated, as the
commenter correctly states. However, only those  materials which are re-inserted in compliance
with all the provisions of the exclusion are excluded from regulation as solid waste. Oil-bearing
materials managed in land-based units, speculatively accumulated materials, and wastewaters are
not excluded  from the definition of solid waste.  In addition, residues from de-oiling procedures
or other reclamation  steps that are not inserted into the petroleum refining process remain listed
hazardous wastes and must be managed as hazardous wastes.

The commenter suggests that  the term "produced" be used to distinguish  between the materials to
which the exclusion applies and other "generated" wastes.  EPA disagrees with the commenter
The exclusion only applies  to secondary materials if the materials are managed in accordance
with the conditions established in the exclusion. Secondary materials that are placed on the land,
speculatively accumulated,  or otherwise discarded are solid wastes, as and when generated.

The comment also suggests that the proposed regulatory language for the exclusion be modified
to reflect that the applicability of the exclusion applies to materials "which are to be inserted,"
rather than the proposed language which states "are inserted." EPA agrees. The exclusion, as
promulgated, applies to all  materials that are intended for insertion and are inserted, rather than at
the point of re-insertion, provided that all other conditions are met.  However, the  generator of
the oil-bearing residuals does bear the burden of demonstrating that the generated residuals are
not being accumulated  speculatively or stored or placed on the land prior to reinsertion into the
refinery process.  If the generator cannot make such a demonstration, the exclusion will not
apply.

The commenter requests that  the point of insertion be "at or before any point where removal of
contaminants occurs." This phrase is a requirement of the currently promulgated version of 40
CFR261.4(a)(12). See61 FR 13103. However, through today's rulemaking, the Agency has
concluded that the coker also  serves as a productive process unit integral  to the refinery.  The
coker largely produces more valued hydrocarbons that are separated and  routed to other

June 29, 1998                             11-32

-------
fractionation units, as well as residual petroleum coke. While there is a potential for metals
accumulation in coke product, EPA, in regulating the properties of the coke product that results
from the reinsertion of oil-bearing residuals, has sought to cap additional contaminants at levels
protective of human health and the environment. EPA did not retain the requirement from the
original regulation regarding the "point where removal of contaminants occurs" because the
coker is no longer considered primarily a waste management unit.

EPA re-evaluated the scope of the proposed exclusion, and in particular the regulatory status of
residuals which undergo various types of preparation to make the residual suitable for
reinsertion. The Agency is excluding materials that are returned in their entirety to refining
processes. The refining processes include, but are not limited to, distillation, catalytic cracking,
fractionation, or thermal cracking units (e.g., coker). These are processes which manipulate
predominately dry oil feedstock. However, frequently oil-bearing materials may be processed to
make them usable in the refinery. This processing may involve centrifugation, desorption, and
filtration, among other treatments to enrich oil content or remove water. These processes are
routinely performed at a refinery facility and are considered by EPA as part of the ongoing
refining of petroleum products. Residues resulting from such processing that are not re-inserted
to the refinery process retain the a hazardous waste listing (F037) if disposed or intended for
disposal.

With respect to oil-bearing materials from exploration and processing, EPA also notes that in
many cases, the Bevill-Bentsen amendment exempts such materials in any case. Thus, for
example, EPA has already noted that crude oil emulsions and tank bottoms from exploration and
processing are within the scope of the Bevill-Bentsen amendment. [EPA, Report to Congress on
the Management of Wastes from the Exploration and Production of Crude Oil. Natural Gas and
Geothermal Energy, p. 9 Table 1 (Dec. 1989)].

EPA initially proposed that oil-bearing residuals be inserted "along with normal process streams"
and the commenter suggested striking this phrase. It was the Agency's intent that only those oil-
bearing residuals that are being recycled for their hydrocarbon content be excluded from the
definition of solid waste. The proposed language could be read to preclude the separate insertion
of oil-bearing materials. The separate management of oil-bearing materials prior to their
reinsertion, however, may involve practices that are "not routinely employed" in the refining of
"normal process streams." For example, most process streams are not centrifuged prior to
insertion in the next process unit, however this is a common oil recovery process. Therefore, the
phrase is not included in the regulatory language for the final exclusion.

Lastly, the commenter requests that EPA modify the exclusion such that only materials which are
"placed on the land in a manner constituting disposal" are not included within the scope of the
exclusion. The Agency considers any treatment, storage, or disposal in a land-based unit to be
"placement on the land, " and to involve an element of discard. The effect of the commenter's
suggested modification to the proposed regulatory language would be to exempt land treatment
June 29, 1998 11-33

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or storage on the land of oil-bearing materials intended for insertion to the refining process from
all RCRA controls.  Such an outcome was not the Agency's intent.  As stated in the proposal:

       Today's proposed exclusions do not apply to oil-bearing hazardous secondary materials
       that are placed in land-based hazardous waste management units such as surface
       impoundments or land treatment units. The Agency considers materials placed in such
       units to be discarded, and hence solid wastes. Land-based units that contain hazardous
       oil-bearing residuals are subject to Subtitle C requirements. (60"FR 57755)

EPA clarifies that the Agency is not including within the scope of the exclusion oil-bearing
secondary materials generated outside the petroleum refining sector (i.e., SIC  2911)   EPA is not
finalizing the proposed exclusion for oil-bearing secondary materials generated elsewhere within
the petroleum industry, such as  from petroleum exploration and production sites, bulk crude oil
storage, and petroleum industry-related transportation facilities. The Agency  is basing its
decision not to exclude these secondary materials from the definition of solid waste on the fact
that EPA has very limited data from industry demonstrating  the chemical and  toxic content of the
materials. In fact, the Agency has no information on which to base a finding that the use of oil-
bearing hazardous secondary materials originating in a non-refinery sector of the petroleum
refining industry in the coking process would be anything other than the management of wastes
(e.g., hazardous waste recycling) from that non-refinery sector. Oil-bearing secondary materials
originating from non-refinery sectors have the potential to be more waste-like and thus do not
warrant an exclusion, especially if their ultimate use is in the quenching process.

The Agency notes that the pre-existing recovered oil exclusion promulgated July 28, 1994, is still
being retained under today's rule with respect to recovered oil  generated from within the
petroleum refining industry.
Comment 3:  It is important for EPA to make an explicit statement that refinery
wastewater/tank bottom sludges (K048-K052, F037 and F038) are to be excluded from the
definition of solid waste if these sludges are inserted into the refinery process.  (Mobil, 00033,
Valero, 00051)

Response: Oil-bearing secondary materials included within the scope of the exclusion include
materials which, if discarded are hazardous wastes, such as K048-K052, F037, and F038.  When
such materials are returned in their entirety to the refining process, without being placed on the
land or accumulated speculatively,  the materials are exempt. Oil recovered from such materials
also may be exempt recovered oil, if the oil is recycled in accordance with the terms of the
exclusion.  However, wastes resulting from preparative steps necessary  to make such residual
suitable for reuse, and which are not returned to the production process,  retain any applicable
hazardous listings and associated waste codes and must be managed as solid and hazardous
wastes.

Again, EPA clarifies that the Agency is not including within the scope of the exclusion oil-
bearing secondary materials generated outside the petroleum refining sector (i.e., SIC 2911).

June 29,  1998                             11-34

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EPA is not finalizing the proposed exclusion for oil-bearing secondary materials generated
elsewhere within the petroleum industry, such as from petroleum exploration and production
sites, bulk crude oil storage, and petroleum industry-related transportation facilities.  The Agency
is basing its decision not to exclude these secondary materials from the definition of solid waste
on the fact that EPA has very limited data from  industry demonstrating the chemical and toxic
content of the materials.  In fact, the Agency has no information on which to base a finding that
the use of oil-bearing hazardous secondary materials originating in a non-refinery sector of the
petroleum refining industry in the coking process would be anything other than the management
of wastes (e.g., hazardous waste recycling) from that non-refinery sector. Oil-bearing secondary
materials originating from non-refinery sectors have the potential to be more waste-like and thus
do not warrant an exclusion, especially if their ultimate use is in the quenching process.

The Agency notes that the pre-existing recovered oil exclusion promulgated July 28, 1994, is still
being retained under today's rule with respect to recovered oil generated from within the
petroleum refining industry.

Comment 4:  One difficulty with the proposed exclusion is defining what is meant by "inserted
into the petroleum refining process." Much equipment is integral to oil  recovery and insertion,
including centrifuges, thermal augers, filter presses, etc. The commenter presumes that the use
of such equipment as a step in refining oil bearing materials would make the materials eligible
for the exclusion. Otherwise, this exclusion would be of limited usefulness because this type of
equipment  is very important for processing oil-bearing secondary materials and subsequently
inserting the resulting components into the refining process.  (ARCO, 00054)

Response:  By centering the exclusion on those oil-bearing materials that are "inserted into the
refinery process," the Agency's intention is to limit the exclusion to those oil-bearing materials
that are being used as feedstocks for their hydrocarbon content in the production of petroleum
products.  The Agency's intention is not to place a limitation on the process technology
employed in reusing these materials as feedstocks.  The Agency understands that oil-bearing- -
secondary materials may require special  management to isolate hydrocarbon rich streams that are
suitable for use in the refining process.  Any residuals generated from such pre-processing or
reclamation of the oil-bearing materials to render the oil-bearing materials suitable for insertion
into the petroleum refining process remain listed hazardous waste if discarded or otherwise
managed.

Wastewaters are not exempt oil-bearing residuals, nor are secondary oil-bearing residuals
managed within land-based units. In addition, the exclusion  is limited to oil-bearing secondary
materials that are generated by the petroleum refining sector and directly inserted into a refinery
process.

Comment  5: The proposed exclusion does not specify the regulatory status of residuals that
result from the insertion of these materials into the refining process.  The apparent assumption is
that  every component would become a product.  In some cases there could be some residual

June 29,  1998                             11-35

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material left over.  For example, some refineries may recover the oil from an oil-bearing
secondary material (that would otherwise be a listed hazardous waste) and insert that oil into the
refining process and convert some of the oily solids into petroleum coke. However, this refinery
may not be able to convert all of the remaining oily solids into  petroleum coke because the
resulting coke would not meet specifications. (For example, these oily solids could be largely
oily dirt that would result in coke that would not meet its 'ash'  specification.) Logically, this
excess residual could not be subject to the derived-from rule if it was originally an oil-bearing
secondary material that was excluded from the definition of solid waste.  It would simply be
subject to hazardous waste "characteristic" testing at that point  of generation when it could no
longer be inserted into the refining process.  (ARCO, 00054)

Response:  In the final rule, EPA clarifies that the exclusion for oil-bearing secondary materials
returned to the refining process only extends to the materials that are actually inserted into the
refinery process.  In cases where oil-bearing secondary materials are reclaimed prior to reuse, any
residuals that may result from the reclamation process and that are not returned to the refinery
process retain the hazardous waste listing. In the final rule, the Agency modifies the proposed
listing descriptions for refining wastes to include any residuals from the processing of oil-bearing
secondary materials that are listed hazardous wastes.

Comment 6:  Residuals returned anywhere in the refining process for re-refining should be
excluded from the definition of solid waste.  EPA's suggestion  that oil bearing petroleum
residuals will only be exempt from regulation if inserted into the petroleum refining process prior
to the coker stage is improper because not all refineries will avail themselves of the use of
cokers. Any oil-bearing residual should be allowed to be recycled within the petroleum refining
process.  These are very low risk waste management scenarios  which minimize waste streams
and allow refiners to obtain the most value out of these processes. (Total, 00039)

Response: In today's final rule, EPA expands the exclusion from the definition of solid  waste for
recovered oils to oil-bearing secondary materials that are returned to any part of the refining
process.  While the prior exclusion was limited to oil-bearing materials reinserted into the
process before the coker, EPA is now removing this restriction. Facilities need not employ a
coker as the method of residual oil processing for the oil-bearing material that is returned to the
process to be exempt.  However, oil-bearing materials that are  inserted into thermal cracking
units only are excluded on the condition that the coke product does not exhibit a characteristic of
hazardous waste.

Comment 7:  To eliminate the confusion associated with the exclusion's list of SIC codes,
especially for activities that can be described under multiple  SIC codes, the commenter
recommends that the regulatory language not reference SIC codes but simply state EPA's intent
to have it include "oil-bearing materials from all aspects of exploration, production, transport,
refining, distribution and marketing."  If there are specific materials that EPA does not intend to
include in this exclusion, these could be specifically mentioned rather than  an incomplete list of
June 29,  1998                              11-36

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SIC codes that could result in compliance problems with little environmental benefit. (AR.CO,
00054)

Response. The Agency is not including within the scope of the exclusion oil-bearing secondary
materials generated outside the petroleum refining sector (i.e., SIC 2911). EPA is not finalizing
the proposed exclusion for oil-bearing secondary materials generated elsewhere within the
petroleum industry, such as from petroleum exploration and production sites, bulk crude oil
storage, and petroleum industry-related transportation facilities. The Agency is basing its
decision not to exclude these secondary materials from the definition of solid waste on the fact
that EPA has very limited data from industry demonstrating the chemical and toxic content of the
materials. In fact, the Agency has no information on which to base a finding that the use of oil-
bearing hazardous secondary materials originating in a non-refinery sector of the petroleum
refining industry in the coking process would be anything other than the management of wastes
(e.g., hazardous waste recycling) from that non-refinery sector. Oil-bearing secondary materials
originating from non-refinery sectors have the potential to be more waste-like and thus do not
warrant an exclusion, especially if their ultimate use is in the quenching process.

The Agency notes that the pre-existing recovered oil exclusion promulgated July 28, 1994, is still
being retained under today's rule with respect to recovered oil generated from within the
petroleum refining industry.

E. Extension of proposed exclusion to recovered oil generated by organic chemical
plants and inserted into co-located or commonly-owned petroleum refining
processes along with normal process streams.

1. General

Comment 1: The commenters generally support the exclusion of recycled oil-bearing residuals
from chemical plants and co-located refining processes. (Amerada Hess, 00027; Amoco, 00062,
API, 00046; BP, 00019; CMA, 00018; Exxon, 00035; Exxon Chemicals, 00041; Mobil, 00033;
NPRA, 00015; Shell, 00047; TNRCC, 00043; Union Carbide, 00056; Valero, 00051)

Response: The Agency acknowledges the commenter's support of the exclusion from the
definition of solid waste for recovered oil generated at organic chemical plants and inserted into
co-located or commonly-owned petroleum refining processes. The Agency notes that the final
exclusion applies only to recovered oils generated at organic chemical manufacturing plants that
are co-located with petroleum refineries.

June 29, 1998 11-37

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recovered oils, or the processes from which the recovered oil are generated, and have knowledge
of any potential risks associated with the management of the oils to ensure that they can be
reused safely within its refinery process. The Agency believes that there will be significant
incentives to minimize the levels of potentially toxic and hazardous constituents in the recovered
oil. In general, the Agency believes that co-located facilities provide an opportunity for the
recycling of recovered oil without imposing significant risks to human health and the
environment  In addition,  the degree of integration between a petrochemical facility and a
petroleum refinery that are co-located helps to ensure that each owner/operator is familiar with
the other's manufacturing  processes, composition of products and intermediates, and
administrative procedures.  These attributes go beyond the strict commercial relationship that is
more  typical of transactions between buyers and sellers of various secondary materials, by-
products, and intermediates.

The Agency decided not to expand the exclusion to recovered oils generated at off-site organic
chemical plants, even  in cases where the off-site facility may be commonly owned by the
refinery accepting the recovered oil. The Agency has not been able to develop a definition of
"common ownership" that would be clear and workable.  As  part of EPA's continuing efforts to
redefine solid waste, defining common ownership (as a possible means of describing certain
intracompany relationships) also has been explored and has proven very difficult.  This is largely
because of the many complex ways in which 'ownership' can be defined from both a financial
and a  legal perspective.  EPA believes that to attempt to do so here would not prove effective.
However, EPA does believe that the concept of 'co-located' is more or less understandable and
reflects physical boundaries as well as a degree of integration that would help ensure more
control by each facility over the transfer of materials throughout the combined  facility. Co-
located in today's rule means that the petroleum refinery and the organic chemical manufacturing
facility are physically  adjacent to one another, or otherwise share a common boundary.  In
situations where the facilities consider themselves co-located but they are not physically adjacent
nor do they share a common boundary, the Agency is further clarifying co-located to  include
facilities that have a high degree of integration with one another, as evidenced by things such as:
shared wastewater treatment systems; shared manufacturing units; transfer of materials via
dedicated piping;  environmental permits that cover both facilities; facilities share common
emergency response equipment, procedures, and planning; etc. These examples can be typical of
physically co-located facilities, and therefore can be used to clarify cases where for one reason or
another an integrated petrochemical and petroleum refinery do not actually share a common
boundary.

In addition, the Agency does not have sufficient data to support expanding the exclusion  for
recovered oil beyond recovered oils generated at co-located petrochemical plants.  Although the
Agency received some data comparing recovered oil samples against the used oil specification
criteria,  the data submitted by commenters did not include information precisely identifying  the
specific waste that was sampled and did not provide information on the presence or concentration
of other hazardous constituents (outside those included in the used oil specification) contained in
the waste. Given the Agency's lack of understanding of the types of wastes that could qualify for

June 29,  1998                             11-38

-------
such a broad exclusion and given that these wastes, if provided the exclusion, would be allowed
to be stored for a period of time greater than 90 days in tanks or containers that do not have to
meet RCRA subtitle C storage standards and could be transported any distance without being
accompanied by a hazardous waste manifest, the Agency has decided not to extend the proposed
exclusion to all petrochemical facilities at this time. The Agency believes there may be
significant unknown risks associated with the transport of "recovered oils" generated at unrelated
facilities and which a refinery may have little information on the content of the oil. In the case of
recovered oil from off-site (non-co-located) facilities, the Agency believes that there are
significant opportunities for "recycling" to serve as a shield for the treatment or destruction of
wastes or hazardous constituents.  The Agency does not have sufficient data to adequately define
"recovered oil" as it applies to the organic chemical industry and so as to minimize the potential
for "toxics-along-for- the-ride."

The Agency also is limiting the exclusion for recovered oils generated at co-located
petrochemical plants to those recovered oils that are hazardous only because they exhibit the
characteristic of ignitability (as defined in 40 CFR 261.21) and/or toxicity for benzene (40 CFR
261.24, waste code DO 18).  The Agency is limiting the exclusion in this manner because  the
Agency has concerns regarding the possibility that certain hazardous wastes may end up in the
petrochemical recovered oils either through inadvertent or intentional mixing.  Specifically, there
are many secondary materials that EPA has explicitly listed as hazardous (e.g., K.-wastes  at 40
CFR 261, Subpart D, under "Organic Chemical Industry").  Many of these wastes are highly-
halogenated residuals, and EPA studied each of these waste streams at the time they were listed
and determined that they posed certain risks. EPA believes that these wastes are clearly distinct
from the recovered oils discussed here, and that the intent is not to send these materials to
petroleum refineries in any event.

Comment 2: The proposed exclusion extends to oil-bearing materials produced throughout the
petroleum industry -- including the exploration and production, transportation, refining and
marketing sectors, as well as organic chemical manufacturing facilities associated with refineries
— and subsequently inserted into the refining process.  Thus, the exclusion would appropriately
recognize the integrated nature of the petroleum industry and the in-process, undiscarded nature
of hydrocarbon-bearing materials produced in various parts of the industry and sent to petroleum
refineries for insertion into the refining process.

While risk is not the correct criterion for determining whether a  material  is a solid waste (see
Comment II.B.3), API agrees with EPA that the risks associated with these materials are very
low. As in the case with oil-bearing residuals generated at refineries, oil-bearing residuals
produced throughout the industry are typically managed in non-land-based units.  They are
handled much as crude oil and petroleum products are handled, including storage in tanks and
transportation by pipeline, truck, rail, or barge.  Their return to refineries for processing into
valuable fuels and other petroleum products promotes resource conservation and prevents their
becoming a part of the waste disposal problem.
June 29,  1998                              11-39

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Response: EPA acknowledges the commenter's support for the exclusion from the definition of
solid waste for recovered oil generated at organic chemical manufacturing plants. EPA notes that
the Agency based its decision to exclude from the definition of solid waste oil-bearing residuals
generated by petroleum refineries and recovered oil generated by co-located petrochemical
facilities that are inserted into any part of the refining process on EPA's authority to regulate
materials that are recycled, as interpreted and established by the Courts, including the AMC II
decision (AMC //, 907 F. 2d at  1186-87). The AMC II decision established that EPA has
jurisdiction over materials that are recycled when the management of such materials includes an
element of discard.  The Court in AMC II held that "discarded" is an ambiguous term that EPA
may interpret in  a reasonable manner. One way in which the Agency has chosen to interpret the
term "discard" is through a determination of whether recycling serves as a shield for treatment or
destruction of a waste or its constituents, or provides for the legitimate reuse of a material as a
feedstock in a production process.  In making such an interpretation, the Agency may analyze the
material  in question to determine whether the material is substantially similar to other feedstocks
used in the production process and whether the material can be inserted into the production
process without raising the concentrations of hazardous constituents to levels of concern in the
final product. EPA's decision to finalize the proposed exclusions from the definition of solid
waste is based upon an evaluation of the legitimate reuse of the residuals reinserted into the
production process as feedstocks and the contributions of the hazardous constituents in the
residuals to the production process.

The Agency is limited the exclusion for recovered oils generated at petrochemical plants to those
recovered oils that are generated at petrochemical  facilities that are "co-located" with the
petroleum refinery that intends to recycle the recovered oils.  The Agency decided not to expand
the exclusion to recovered oils generated at off-site organic chemical plants, even in cases where
the off-site facility may be commonly owned by the refinery accepting the recovered oil.  The
Agency has not been able  to develop a definition of "common ownership" that would be clear
and workable. As part of EPA's continuing efforts to redefine solid waste, defining common
ownership (as a possible means of describing certain intracompany relationships) also has been
explored and has proven very difficult. This is largely because of the many complex ways in
which  'ownership' can be defined from both a financial and a legal perspective.  EPA believes
that to attempt to do so here would not prove effective.  However, EPA does believe that the
concept of 'co-located' is more or less understandable and reflects physical boundaries as well as
a degree of integration that would help ensure more control by each facility over the transfer of
materials throughout the combined facility.

Co-located in today's rule means that the petroleum refinery  and the organic chemical
manufacturing facility are physically adjacent to one another, or otherwise share a common
boundary.  In situations where the facilities consider themselves co-located but they are not
physically adjacent nor do they share a common boundary, the Agency is further clarifying co-
located to include facilities that have a high degree of integration with one another, as evidenced
by things such as: shared wastewater treatment systems; shared manufacturing units; transfer of
materials via dedicated piping; environmental permits that cover both facilities; facilities share

June 29,  1998                             11-40

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common emergency response equipment, procedures, and planning; etc.  These examples can be
typical of physically co-located facilities, and therefore can be used to clarify cases where for one
reason or another an integrated petrochemical and petroleum refinery do not actually share a
common boundary.

The Agency does not have sufficient data to support expanding the exclusion for recovered oil
beyond those recovered oils generated at co-located organic chemical manufacturing facilities
(SIC code 2869). Although the Agency received some data comparing recovered oil samples
against the used oil specification criteria, the data submitted by commenters did not include
information precisely identifying the specific waste that was sampled and did not provide
information on the presence or concentration of other hazardous constituents (outside those
included in the used oil specification) contained in the waste. Given the Agency's lack of
understanding of the types of wastes that could qualify for such a broad exclusion and given that
these wastes,  if provided the exclusion, would be allowed to be stored for a period of time greater
than 90 days in tanks or containers that do not have to meet RCRA subtitle C storage standards
and could be transported any distance without being accompanied by a hazardous waste
manifest, the  Agency has decided not to extend the proposed exclusion to all petrochemical
facilities at this time. The Agency believes there may be significant unknown risks associated
with the transport of "recovered oils" generated at unrelated facilities and which a refinery may
have little information  on the content of the oil.  In the case of recovered oil from off-site (non-
co-located) facilities, the Agency believes that there are significant opportunities for "recycling"
to serve as a shield for  the treatment or destruction of wastes or hazardous constituents. The
Agency does not have sufficient  data to adequately define "recovered oil" as it applies  to the
organic chemical industry  and  so as to minimize the potential for "toxics-along-for- the-ride."

The  Agency also is limiting the exclusion for recovered oils generated at co-located organic
chemical manufacturing facilities to those recovered oils  that are hazardous only because they
exhibit the characteristic of ignitability (as defined in 40 CFR 261.21) and/or toxicity for benzene
(40 CFR 261.24, waste code DO 18).  The Agency is limiting the exclusion in this manner
because the Agency has concerns regarding the possibility that certain hazardous wastes may end
up in the petrochemical recovered oils either through  inadvertent or intentional mixing.
Specifically, there are many secondary materials that EPA has explicitly listed as hazardous (e.g.,
K-wastes at 40 CFR 261, Subpart D, under "Organic Chemical Industry"). Many of these wastes
are highly-halogenated  residuals, and EPA studied each of these waste streams at the time they
were listed and determined that they posed certain risks, and the high concentrations of
chlorinated toxics would not normally be recycled in a petroleum refining process, but rather
would be gotten rid of,  i.e., discarded.  EPA believes that these wastes are clearly distinct from
the recovered oils discussed here, and that the industry's intent is not to send these materials to
petroleum refineries in  any event.

2.     Comments Against Proposal (ETC 00038)
June 29, 1998                              11-41

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Comment 3: In proposing to exclude a wide variety of oil-bearing residuals from RCRA
regulation if they are inserted into the refining process, EPA fails to reconcile the proposal with
existing Agency policy regarding closed-loop recycling. This failing further highlights the lack
of necessary safeguards in the proposal.

The one exclusion from the 1986 tank standards EPA allowed was for secondary materials
managed in closed-loop systems. EPA justified this exclusion based upon "the closed nature of
the process (hard connections from point of generation to point of return to the original process),
integral relationship of these reclamation steps to production processes, and widespread use and
economic value of the activity." Id- at 25443 col. 1.

Of course, the proposal does not limit the new exclusion in this way. To the contrary, EPA
proposes to greatly expand the existing recovered oil exclusion in such a way that is neither
"closed" nor a "loop." Oil-bearing residuals could be shipped — without a hazardous waste
manifest — to off-site locations to be stored prior to reuse. Moreover, such residuals could be
shipped from intracompany and intercompany sources, as well as from sources wholly outside
the petroleum refining industry. 60 FR 57754. EPA proposes no controls or any minimum
design or operating standards for storage and transportation of these materials. EPA has
therefore completely ignored both the storage tank damage case evidence in the docket and the
Agency's established position that hazardous secondary materials cannot be managed safely
outside a closed-loop process without meeting Subtitle C controls.

Furthermore, by allowing these hazardous oil-bearing residuals to be (1) shipped off-site without
a tracking mechanism such as a manifest, (2) loaded into tanks that lack overfill protection, (3)
stored in tanks that lack secondary containment and that are already leaking or have a high
potential to leak, and (4) conveyed to a production process without management standards, EPA
would be creating numerous opportunities for mismanagement of these hazardous wastes. In
doing so, EPA would be unable to "show how the determination is consistent with RCRA's
June 29, 1998 11-42

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objective to 'establish a cradle-to-grave regulatory structure for the safe handling of hazardous
wastes.'" 60 FR 57752 col. 3 (quoting API. 906 F.2d at 741).

Response: The final exclusion for recovered oils generated at organic chemical manufacturing
plants is not overly broad. The Agency disagrees with the commenter's assertion that the
exclusion should be limited to cases where the recovered oils are immediately re-used or
recycled in closed-loop systems The Agency notes that EPA has discretion in establishing
exclusions from the definition of solid waste, in addition, other exclusions from the definition of
solid waste that are codified under 40 CFR §261.4 are for materials that are recycled in manners
other than closed-loop processes. The Agency has considerable discretion in determining when
the definition of solid waste applies to materials that are reused in the original production
process, as well as when the materials are "recycled" by at off-site facility, or within another
industrial process.26

EPA is finalizing an exclusion from the definition of solid waste for recovered oils generated by
co-located organic chemical manufacturing facilities and reused by the petroleum refinery, based
upon a review of the policy and legal issues involved and on data provided to the Agency related
to the composition of the recovered oils and the manner in which the recovered oils are reused by
the petroleum refining industry.27 2X

EPA is limiting the exclusion from the definition of solid waste to include recovered oils
generated at co-located organic chemical manufacturing facilities that are inserted into the
petroleum refining process. The Agency is restricting the exclusion in this manner because the
Agency has not been able to develop a definition of "common ownership" that would be clear
and workable. As part of EPA's continuing efforts to redefine solid waste, defining common
ownership (as a possible means of describing certain intracompany relationships) also has been
explored and has proven very difficult. This is largely because of the many complex ways in
which 'ownership' can be defined from both a financial and a legal perspective. EPA believes
that to attempt to do so here would not prove effective. However, EPA does believe that the
concept of 'co-located' is more or less understandable and reflects physical boundaries as well as
a degree of integration that would help ensure more control by each facility over the transfer of
materials throughout the combined facility.
26 API v. EPA, 906 f. 2d 726, 740-41 (D.C. Cir. 1990); Ilco v. EPA, 996 F.2d 1126 (11th
Cir. 1993); Owen Electric Steel v. Browner, 37 F. 3d 146 (4th Cir. 1994).

27 February 2, 1993 data submission from Mobil Oil Corporation.

2X "Petroleum Refining Process waste Listing Determination: Supplemental Background
Document, " U.S. EPA, Office of Solid Waste, March, 1997.

June 29, 1998 11-43

-------
In addition, The Agency also is limiting the exclusion for recovered oils generated at co-located
organic chemical manufacturing facilities to those recovered oils that are hazardous only because
they exhibit the characteristic of ignitability (as defined in 40 CFR 261.21) and/or toxicity for
benzene (40 CFR 261.24, waste code DO 18) The Agency is limiting the exclusion in this
manner because the Agency has concerns regarding the possibility that certain hazardous wastes
may end up in the petrochemical recovered oils either through inadvertent or intentional mixing.
Specifically, there are many secondary materials that EPA has explicitly listed as hazardous (eg.,
K-wastes at 40 CFR 261, Subpart D, under "Organic Chemical Industry"). Many of these wastes
are highly-halogenated residuals, and EPA studied each of these waste streams at the time they
were listed and determined that they posed certain risks. EPA believes that these wastes are
clearly distinct from the recovered oils discussed here, and that the intent is not to send these
materials to petroleum refineries in any event.

To further ensure that the management of such materials does not include an element of discard,
and to ensure that the materials do not become part of the waste disposal problem, the Agency is
restricting the exclusion to situations where the secondary materials are not stored or placed on
the land and where there is no speculative accumulation of the materials.

Comment 4: EPA's rationale for proposing to broaden the existing recovered oil exclusion at 40
CFR 261.4(a)(12) is that the oil-bearing residuals identified in this rulemaking are essentially the
same as those covered by the original exclusion. 60 FR 57754 col. 1. The instant proposal,
however, fails to provide any parameters or limitations on the meaning of the critical term "oil-
bearing residual." For this reason, the proposal is overly broad.

In promulgating the original exclusion for recovered oil, the Agency rejected the petroleum
industry's request to include oil-containing wastewaters in the exclusion. EPA noted that "[t]he
percentage of oil in plant wastewaters ... is minuscule, on the order of .0001% to .000001%."
59 FR 38539 col. 3. EPA explained that in distinguishing between excluded and non-excluded
oil-bearing materials, it will consider several factors, including water, solids and metals content.
Id. at 38537 col. 3. EPA emphasized, however, that "the salient characteristic of recovered oil is
the obvious one: that it consist primarily of oil." Id.

The proposed expansion of the recovered oil exclusion would apply to "all oil-bearing secondary
materials that are generated within the petroleum refining industry," as well as recovered oil from
certain organic chemical industry operations. 60 FR 57753-54. Nowhere in the preamble or
proposed regulatory language, however, does EPA define the critical term "oil-bearing." While
EPA asserts that materials covered by the exclusion are "likely" to be recovered oil or to "closely
resemble" recovered oil, id. at 57754 col. 1, there is no minimum oil content specified in the
proposed exclusion. Accordingly, the proposal could be seen as authorizing refinery operators to
deem any oil-containing secondary materials, even those with "minuscule" oil content, as
excluded from Subtitle C. Such an outcome would clearly exceed EPA's more limited objective
of excluding only those secondary materials that are "substantially similar to normal . . .
feedstock material." Id at 57754 col. 2.

June 29, 1998 11-44

-------
Response: Although the Agency has not established a minimum oil content for the exempt
secondary materials, it is unlikely that petroleum refiners will insert non-oil-bearing materials
into the refinery process. Existing economic factors should control which materials will be
returned to the process without imposing detrimental impact on overall refinery operations. The
Agency bases the exclusion on the fact that recovered oils from organic chemical plants returned
to the petroleum refining process may be substantially similar to normal feedstocks. It is highly
unlikely that refinery owners or operators would allow any incompatible materials to be inserted
into the coker for fear of interfering with proper operation of the coker. In addition, the coking
process must comply with air emissions standards imposed under the Clean Air Act. It is
unlikely that refinery owners and operators will insert secondary materials into the coker that will
result in violations of the applicable CAA standards.
See response to Comment 5 under Section II.C above.
The Agency notes that the final exclusion for recovered oils generated at organic chemical
manufacturing facilities is restricted to recovered oils generated at those facilities that are co-
located with petroleum refineries. In the case of facilities that are co-located, the Agency
believes that there is a greater potential for facility owner/operators to have an accurate
understanding of the composition of the recovered oil being recycled and there will be significant
incentives to minimize the levels of potentially toxic and hazardous constituents in the recovered
oil.

See response to Comment 3 directly above.

3. The Agency requested additional data on the composition of recovered oil from
petrochemical operations that is typically sent to refineries.

Four commenters responded, providing data or references. (CMA, 00018; Exxon Chemical,
00041, NPRA, 00015; Shell, 00047)

SHELL
Shell provided the following three examples of recovered oil from petrochemical operations and
a Lube Oil Plant that could be typically sent to a petroleum refinery as per the information
requested on page 57756. These recovered oils are generated at petrochemical plants and a lube
oil plant that are owned by Shell but not co-located with a Shell refinery.
Parameter &
(Used Oil Spec.)
Same Company
(not co-located)
SIC
Belpre, Ohio
Yes
2822
Lakeland, Florida
Yes
2821
Lakeland, Florida
Yes
2821
Metairie,
Louisiana
Yes
2992
June 29, 1998
11-45

-------
Parameter &
(Used Oil Spec.)
Recovered Oil
Volume
Routine Analysis
Sample Location
# of Samples
Type of Sample
Appearance
Sulfur:
Distillation:
Flash Point:
(100°Fmin)
Hydrocarbon
Type
API Gravity.
Specific Gravity
Ash:
Total Chlorine
Arsenic
(5 ppm max)
Cadmium
(2 ppm max)
Belpre, Ohio
Unused Naphtha
3 to 5 k gallons/day
Yes. for 1 1C
Speciation
Accumulation
Vessel
1 / week
grab
Liquid Hydrocarbon
(Clear to Dark)
Not Detected
62% BP 155-265
14%BP265-400
14%BP400+
< 140 F
(Process
knowledge)
0 to -4 D F
Cyclohexane
Aromatic Mixture
(GC)
52
0.771
<0.1%
< 0.2%
Not Detected
(EPA 7060)
0.05 ppm (EPA
7131)
Lakeland, Florida
Unreacted Toluene
200 gallons/day
For the Amine
Content
From the Tank
1 / month
grab
Clear, colorless
liquid
Not Detected
(x-ray diffraction)
Boiling point is
lire
(est.)
4°C (39.2°F)
(Tagg Closed Cup)
100% Aromatic
(GC)
32
0.867
<0.01
38 ppm
(x-ray diffraction)
Not Detected
(x-rav diffraction)
Not Detected
(x-ray diffraction)
Lakeland, Florida
Unused Crude
Dimer Distillate
20 to 25 gallons/day
Iron & Oxygen
Truck
1 / shipment
grab
Dark Brown, Murky
341 ppm
(GC)
Boiling point is
300" F
(95% of material)
8()CF
(PMCC)
Fatty Acids. CIS
Unsaturated
Dimers,
Olefins
35
0.85
1-2%
(estimate)
0.018%
(x-ray diffraction)
Not Detected
Not Detected
Metairie,
Louisiana
Unused Lube Oil
(Wet. BS&W
1 5%)
300 gallons/day




Clear to Cloudy
< 1%
(MSDS)
Unknown but High
>300;F
(MSDS)

24


<0.5%
(MSDS)
N/A
(MSDS)
N/A
(MSDS)
June 29, 1998
11-46

-------
Parameter &
(Used Oil Spec.)
Chromium
(10 ppm max)
Lead
(100 ppm max)
Total Halogens
(1,000 ppm
(presumption)
4,000 ppm max)
Toluene
Tricthylcne
tetraamine
Cyclohexane
Mineral oils
Kraton polymer
Styrcne
Butadiene
Isoprene
Ethyl benzene
2-cthylhexanol
2-ethylhexanoic
aeid
Diethyl ether
Ethylene
dibromide
Hexanc. Pentane,
Butane
Antioxidants
Barium
Nickel
Silver
Belpre, Ohio
0.5 ppm (EPA
7191)
Not Detected
(EPA 7421)
<0.2%
Not Applicable
Not Applicable
30 - 80% (GC)
1 - 30% (GC)
0- 10% (GC)
0-10%(GC)
0 - 3% (GC)
0 - 5% (GC)
0 - 5% (GC)
0- 15%(GC)
0- 10% (GC)
0 - 5% (GC)
0- 100 ppm (GC)
5 - 60% (GC)
0 - 5% (GC)
<0.5 ppm (EPA
6010A)
2.6 ppm (EPA
249.2)
<0.05 ppm (EPA
7761)
Lakeland, Florida
Not Detected
(x-ray diffraction)
Not Detected
(x-ray diffraction)
40 ppm\v
(x-ray diffraction)
99.2% (GC)
0.01 -0.05%(GC)
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Lakeland, Florida
Not Detected
Not Detected
0.026%
(x-ray diffraction)
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Metairie,
Louisiana
< 1.0 ppm
(MSDS)
N/A
(MSDS)
N/A
(MSDS)


















June 29, 1998
11-47

-------
CMA(00018)
CMA asked companies to conduct sampling, perform analyses, and compile recovered oil data
for the purposes of this rulemaking. As presented in Table l(CMA), analytical results
demonstrate that petrochemical recovered oil is both "similar" to the refinery recovered oil the
Agency already excludes from the definition of solid waste and is "suitable" for use in petroleum
products. Data is presented for co-located/same company facilities and co-located/ intercompany
facilities. For comparison purposes, recovered oil analytical data is also presented for refinery
recovered oil steams. In addition, Table l(CMA) contains information on the SIC Codes
applicable to the petrochemical recovered oil....

Analytical results and observations from the recovered oil characterization included in Table
l(CMA) are as follows:

• Refinery recovered oil appearance was dark brown to black; petrochemical recovered oil
ranged from a golden color, which reflects a narrow cut stream, to black. The
petrochemical recovered oil streams are all of an acceptable appearance for a refiner.

• Refinery recovered oil specific gravity ranged from 0.882 to 0.896; petrochemical
recovered oil ranged from 0.61, again reflecting a light, narrow cut stream, to 0.920. The
petrochemical streams are all acceptable for processing in a refinery system.

• The distillation 50% parameter (which is the temperature at which 50% of the sample
boils off) showed a range of 423 to 511 degrees F. for refinery recovered oil and 194 to
399°F. for petrochemical recovered oil. The range exhibited by these recovered off
streams is indicative of lighter material that will fractionate into more valuable refinery
product pools, such as motor gasoline. Overall, the distillation ranges are quite similar,
with most of the petrochemical recovered oil boiling off within the refinery recovered oil
range. This indicates that processing of the petrochemical recovered oil in a refinery
system will be indistinguishable from the processing of refinery recovered oil.

• Flask points of the samples were essentially in the same range, varying from <46° to
<72°F. for refinery recovered oil and from <60° to < 72° F. for petrochemical recovered
oil.

• Aromatics and saturates represented over 96% of the hydrocarbon types for both refinery
and petrochemical recovered oil, again evidencing a high degree of similarity between the
two streams.

• Sulfur content of the petrochemical recovered oil ranged from non-detectable to 0.23
weight %; for refinery recovered oil it was 0.520 to 0.83. The lower sulfur level in the
petrochemical recovered oil streams is preferred.
June 29, 1998 11-48

-------
• Ash content for the petrochemical recovered oil samples ranged from < 0.001 to 0.03
weight %; for refinery recovered oil it ranged from 0.0 to 0.073. All these are low levels
that clearly indicate the suitability of the material to a refinery system.

• Chlorine levels in refinery recovered oil ranged from <1 ppmw to 13; for petrochemical
recovered oil they ranged from <10 to 3300. It is common for petrochemical recovered
oil to have a higher chlorine level due to the use of chloride-based catalyst systems.
These streams are all acceptable to a refiner, who has the option of determining, for any
hydrocarbon source, the optimum point of insertion in the refinery process to maximize
the contribution of the recovered oil.

Overall, the analytical results in Table l(CMA) demonstrate that petrochemical recovered oil is
both "similar" to refinery recovered oil and "suitable" for use in petroleum products.
Petrochemical and refinery recovered oil samples are "similar," i.e., they are comprised
essentially of hydrocarbons with a desirable distillation range and hydrocarbon types for
recovery into refinery product pools. The results are not surprising because the petrochemical
recovered oil is composed of hydrocarbons that generally originate from feedstocks supplied by
the refinery. Differences in hydrocarbon type reflect the different sources of hydrocarbons that
feed into the recovered oil systems.

In addition to being "similar," the petrochemical recovered oil is "suitable" for use in the refinery
recovered oil systems. Recovered oils have been sent to a refinery for many years to be made
into the same products that refineries manufacture from its other feedstocks. To illustrate,
Attachment 3 of CMA's comments, for one facility, which petroleum product pools would
receive the various fractions from the petrochemical or refinery recovered oil samples. Refinery
recovered oil fractions are sent to the motor gasoline pool, the heating/diesel oil system, or to the
fuel oil system. Petrochemical recovered oil would also be sent to motor gasoline or
heating/diesel oil. Thus recovered oil from both petrochemical and refinery sources are sent to
the same refinery product pools. The different percentages of each fraction sent to different
product pools reflect the different hydrocarbon make-up of the recovered oil streams.
June 29, 1998 11-49

-------
Table 1 (CMA)
Facility/
description
Case
(•'utility 1
Petrochemicals
Refinery
Petrochemicals
(2nd set)
Co-located;
Same company

Co-located;
Same company
SIC Codes

2821,2822
2865, 2869
2911
2821,2822
2865, 2869
Volume
gals/D
Appearance
Spec
Gravity
(a; 15.6 c
Distillation (°F)
IBP
50%
FBP
Flash
Point
(°F)
Hydrocarbon Type, vol%
Aromatic
Oletln
Sat u rat
e
Sulfur
wt%
Ash
Ht%
Chlorine
ppimv

139000
-
139000
Opaque,
black
Opaque,
black
Bright, clear
0.920
0.882
0.894
212
108
67
348
423
326
57.3
111
746
<65
<46
<60
95.4
43.7
93.0
1.4
0
3.9
3.3
56.3
3.0
0.20
0.8.3
0.23
0.001
0.073
<().()()!
<1()
13
34
l-'at ility 2
Petrochemicals
Refinery
Co-located;
Same company

2822, 2649
2911
45000
-
Dark brown
Dark brown
0.912
0.896
<97
97
399
511
955
775
<72
<72
83.1
78.1
<0.3
<0.3
16.9
21.9
0.0056
0.520
0.009
0.0
160
-------
...To comply with EPA's request, analyses were run and the results of the comparison to the used
oil specifications are summarized in Table A(CMA). Table A(CMA) includes analytical results
for the same petrochemical and refinery recovered oil streams described in Table l(CMA).
Again, these are co-located/same company or co-located/intercompany cases. For the
petrochemical recovered oil samples and the refinery recovered oil samples, analyses were run
for arsenic, cadmium, chromium, lead, total halogens and flash point. Analytical results can be
summarized as follows:

Table A(CMA): Comparison of Recovered Oil to Used Oil Specifications

Parameter Used Oil Spec Refinery Petrochemical
Recovered Oil Recovered Oil

Arsenic 5 ppmw max. <0.04 to 0.932 <0.04 to 2.7
Cadmium ' 2 ppmw max. <0.04 to 0.595 <0.04 to 0.84
Chromium 10 ppmw max. <0.04 to 3.93 <0.04 to 0.12
Lead 100 ppmw max. <0.04 to 46.1 <0.04 to 1.9
Total Halogens 4000 ppmw <10to<20 <10to3400
max.
Flashpoint lOOOFmin. <46'to <72'F <60 to <72''F

Note: "<" represents detection limit for test conducted

As shown, all results, except for flashpoint, met the used oil specifications and were generally
either significantly below the specification level or below detection limits for the tests. For flash
point, the measured levels did not meet the used oil specification. This is because the heavier
fractions of crude oil have already been removed from the recovered oil. The rationale'for the
flash point specification for used oil was to protect unsophisticated fuel oil burners from potential
materials handling problems, see 50 FR 49187; November 29, 1985 - a concern that does not
apply in the context of petroleum refineries or associated facilities handling recovered oils. Such
facilities are sophisticated in handling these materials. For refineries, the lower flash point of the
recovered oil provides an important physical property indicating the presence of the lighter, more
combustible hydrocarbon components. These are the hydrocarbon types valued for motor
gasoline, which is a higher valued refinery product. Thus, these recovered oil petrochemical
streams do not contain any of the toxic constituents that the Agency identified as important
contaminants of used oil. See 50 FR 49182 (November 29, 1985).

NPRA
Petrochemical facilities use processes that are similar to refining operations and therefore
recovered oil from petrochemical operations is comparable to oil recovered from refining
operations. Data supporting this position were provided to EPA from Morgan, Lewis, and
Bockius on September 13, 1995. NPRA, which has both petrochemical and refining members,
agrees with the data provided by Morgan, Lewis, and Bockius and supports EPA's proposal to

June 29, 1998 11-51
-------
exclude oil that is recovered from petrochemical operations and inserted into co-located or
commonly owned refining operations.

The petrochemical exclusion is based on the same principles mentioned previously for petroleum
refineries concerning not storing the oil-bearing materials on land, not accumulating the oil-
bearing materials speculatively before returning it to the process, and the resulting coke product
not exceeding the toxic characteristic levels.

Justification for the petrochemical exclusion is based on the following practices at petrochemical
facilities.

• The high quality requirements of petrochemical operations ensures that the recovered oil
from these operations do not contain non-hydrocarbon contaminants not already found in
petroleum feedstock which could jeopardize the integrity of the refinery product.

• In cases where petrochemical and petroleum refining operations share a common
wastewater treatment system, the volume of wastewater from the petrochemical operations
typically comprises only a small portion of the total refinery wastewater volume.

• ' The quality of the refining feedstock is important to the integrity of the petroleum refining
operations. A refinery would not insert into its refining process metals or chemicals which
would cause equipment fouling or costly turnarounds, costly downtime or result in the
increased production of unwanted byproducts.

EXXON CHEMICAL AMERICA
In response to EPA's request, EGA petrochemical recovered oil quality parameters were compared
to the used oil specifications. The total halogen content, arsenic, cadmium, lead, and chromium
levels of recovered oil were all less than the used oil specifications. Flash points of the samples
were below the used oil minimum, but this was to be expected since heavier fractions of material
are generally removed. This allows for recovery into higher value products such as motor
gasoline. The analytical results are included in CMA's submission.

Response: The EPA concludes from the data that the composition of recovered oil from
petrochemical operations may be similar to crude oils, but the data submitted to the Agency does
not provide evidence that the residuals are not potentially contaminated with additional hazardous
constituents, or "toxics-along-for-the-ride." The data submitted by commenters do not precisely
identify the specific wastes that were sampled and do not provide information on the presence or
concentration of other hazardous constituents (beyond those included in the used oil specification)
contained in the wastes. Given the Agency's lack of understanding of the types of wastes that
could qualify for a broad exclusion for recovered oils and given that these wastes, if provided the
exclusion, would be allowed to be stored for a period of time greater than 90 days in tanks or
containers that do not have to meet RCRA subtitle C storage standards and could be transported
any distance without being accompanied by a hazardous waste manifest, the Agency has decided

June 29, 1998 11-52
-------
not to extend the proposed exclusion to off-site, non co-located facilities, or to facilities other than
co-located organic chemical manufacturing facilities (SIC code 2869).

It is the Agency's understanding that co-located facilities often share wastewater treatment
systems. In these cases, given the predominance of petroleum refining wastewater, the Agency
believes that the recovered oil exclusion appropriately applies to oil recovered from shared
petrochemical/petroleum refining wastewater treatment systems. In addition, a petroleum refiner
that is co-located with a chemical manufacturing facility should have sufficient knowledge of the
recovered oils, or the processes from which the recovered oil are generated, and have knowledge
of any potential risks associated with the management of the oils to ensure that they can be reused
safely within its refinery process. The Agency believes that there will be significant incentives to
minimize the levels of potentially toxic and hazardous constituents in the recovered oil. In
general, the Agency believes that co-located facilities provide an opportunity for the recycling of
recovered oil without imposing significant risks to human health and the environment. In
addition, the degree of integration between a petrochemical facility and a petroleum refinery that
are co-located helps to ensure that each owner/operator is familiar with the other's manufacturing
processes, composition of products and intermediates, and administrative procedures. These
attributes go beyond the strict commercial relationship that is more typical of transactions between
buyers and sellers of various secondary materials, by-products, and intermediates.

The Agency decided not to expand the exclusion to recovered oils generated at off-site organic
chemical plants, even in cases where the off-site facility may be commonly owned by the refinery
accepting the recovered oil. The Agency has not been able to develop a definition of "common
ownership" that would be clear and workable. As part of EPA's continuing efforts to redefine
solid waste, defining common ownership (as a possible means of describing certain intracompany
relationships) also has been explored and has proven very difficult. This is largely because of the
many complex ways in which 'ownership' can be defined from both a financial and a legal
perspective. EPA believes that to attempt to do so here would not prove effective. However, EPA
does believe that the concept of 'co-located' is more or less understandable and reflects physical
boundaries as well as a degree of integration that would help ensure more control by each facility
over the transfer of materials throughout the combined facility. Co-located in today's rule means
that the petroleum refinery and the organic chemical manufacturing facility are physically adjacent
to one another, or otherwise share a common boundary. In situations where the facilities consider
themselves co-located but they are not physically adjacent nor do they share a common boundary,
the Agency is further clarifying co-located to include facilities that have a high degree of
integration with one another, as evidenced by things such as: shared wastewater treatment systems;
shared manufacturing units; transfer of materials via dedicated piping; environmental permits that
cover both facilities; facilities share common emergency response equipment, procedures, and
planning; etc. These examples can be typical of physically co-located facilities, and therefore can
be used to clarify cases where for one reason or another an integrated petrochemical and petroleum
refinery do not actually share a common boundary.
June 29, 1998 H-53
-------
The Agency also is limiting the exclusion for recovered oils generated at co-located petrochemical
plants to those recovered oils that are hazardous only because they exhibit the characteristic of
ignitability (as defined in 40 CFR 261.21) and/or toxicity for benzene (40 CFR261.24, waste code
DO 18). The Agency is limiting the exclusion in this manner because the Agency has concerns
regarding the possibility that certain hazardous wastes may end up in the petrochemical recovered
oils either through inadvertent or intentional mixing. Specifically, there are many secondary
materials that EPA has explicitly listed as hazardous (e.g., K-wastes at 40 CFR 261, Subpart D,
under ''Organic Chemical Industry"). Many of these wastes are highly-halogenated residuals, and
EPA studied each of these waste streams at the time they were listed and determined that they
posed certain risks. EPA believes that these wastes are clearly distinct from the recovered oils
discussed here, and that the industry's intent is not to send these materials to petroleum refineries
in any event. The high levels of halogens in certain samples indicate that this concern may be
more than just theoretical. Absent accurate documentation of the precise source of the halogens,
EPA believes it prudent to limit the scope of the exclusion.

4. The Agency requested additional information on refinery limitations that may preclude the
introduction of toxic constituents from recovered oil generated from chemical
manufacturing operations.

Three commenters provided information regarding feedstock parameters and issues. (CMA,
00018; Shell, 00047; Valero, 00051)

Comment 1:
CMA
Product quality management is a critical activity in the petroleum industry. Refineries need to
avoid equipment and catalyst fouling and process unit down times and maintain the integrity of
final products. Poor product quality, e.g., solids or potential gum-forming constituents, can have
an immediate and widespread impact on customers by affecting, for example, automobile
performance. Therefore, feedstock quality management programs, including recovered oil, are an
integral part of a petroleum refinery's operation. The quality of recovered oil is routinely
evaluated and its contribution to refinery product performance determines its acceptability and
value. This is true even if the recovered oil comes from an associated petrochemical facility or a
third party through an arms length transaction. It is important to note that recovered oil is
assessed, not from a solid waste perspective, but from a product performance standpoint.

For facilities that have recovered oil streams that are being considered for transfer to a refinery
recovered oil system, sampling and analysis is often conducted to supplement operating
experience and process knowledge. Potential receiving refineries are interested in parameters
relevant to their refinery process and product quality. Common quality parameters assessed are
water content and bulk solids. Other quality parameters evaluated may include specific gravity,
bromine (an indicator of olefms content and potential fouling due to polymerization), emulsions,
and metals.
June 29, 1998 11-54
-------
Overall it is clear that operating practices, process knowledge, and selected sampling/analysis
programs ensure that recovered oil is suitable for processing into oil based products and is similar
to refinery recovered oil that is sent to the petroleum refinery process.

SHELL
Coker units must be operated to avoid using a feed mix which creates asphaltenes precipitation in
the heater tubes, cause piping and/or stripper corrosion, or result in any premature/unscheduled
decoking operation.

Some of the feedstock parameters and specifications that are evaluated at Shell locations include
the following:
Specific Gravity
Sodium
Metals
Microcoulometry ASTM D4929 (organic & inorganic)
Ion Chromatography
BS&W: l%max
Chlorides: 10 ppm max
Hydrocarbon %
Flash Point
pH
TOC
Sulfates
Formic Acid and DI-Acids of Cl - C4
Monoacids C2 - C4

The results of residual feedstock analysis are often compared to crude assays to determine the
suitability for use in the coker.

VALERO
Because the coker is a critical part of the refining process, operators would not intentionally insert
incompatible materials into the coker because of fear of the disruption of its operation and the
resulting loss of significant revenue. Further, the data provided to EPA by Unocal [note to
reviewers: there are no Unocal comments...] substantiates that the oil bearing materials which are
proposed for exclusion from the definition of solid waste are substantially similar to normal
feedstock to the coker. Therefore, returning oil-bearing residuals to the refinery coker can be
achieved without raising the hazardous constituent concentrations to levels of concern in the final
coke co-product.

Response: From the remarks, the Agency notes that feedstocks returned to refinery process must
be compatible materials or the facility risks disruption of operations and resulting loss of
significant revenue. However, the data submitted to the Agency does not provide evidence that
the recovered oils generated at non-petroleum refining facilities are not potentially contaminated

June 29, 1998 11-55
-------
with additional hazardous constituents beyond those included in the used oil specification. In
addition, the data submitted by commenters do not precisely identify the specific wastes that were
sampled and do not provide information on the presence or concentration of other hazardous
constituents (beyond those included in the used oil specification) contained in the wastes. Given
the Agency's lack of understanding of the types of wastes that could qualify for a broad exclusion
for recovered oils and given that these wastes, if provided the exclusion, would be allowed to be
stored for a period of time greater than 90 days in tanks or containers that do not have to meet
RCRA subtitle C storage standards and could be transported any distance without being
accompanied by a hazardous waste manifest, the Agency has decided not to extend the proposed
exclusion to off-site, non co-located facilities, or to facilities other than co-located organic
chemical manufacturing facilities (SIC code 2869).

See response to comments in Section II.E.3 above.

5 Further Expansion of Proposed Exclusion

Comment 1: If EPA limits the recovered oil exclusion to SIC Code 2869, it may have a
significant impact on large complexes with multiple SIC codes. Segregating recovered oil systems
within a complex could be prohibitively expensive (involving capital investment to modify
piping/connection and distribution systems for different units within a complex) and is clearly not
warranted due to recovered oil quality and recovery value. Oil that is recovered from these
sources is not discarded. Ironically, excluding these sources of recovered oil may force these
facilities to discard recovered oil - even though it has a lot of value to their integrated
manufacturing system.

Based on current practices at petrochemical/refinery facilities, the commenter suggests that EPA
characterize the regulatory exclusion in terms of "recovered oil from a petrochemical facility,"
with no specification of SIC codes. The SIC codes were not designed to differentiate
manufacturing units for purposes of segregating recovered oil systems. Use of an artificially
limiting SIC code will result in unnecessarily limiting the amount of recovered oil that can be
refined into valuable product with no increased environmental benefit. It will also cause confusion
at large petrochemical complexes that are implementing the regulations.

Alternatively, should EPA decide to maintain a SIC code limitation, the commenter recommends
that the limitation be expanded to include SIC codes 2821, 2822, 2865, and 2869. If EPA decides
to maintain an exclusion referenced to SIC code 2869, it should be clarified that the exclusion is
for petrochemical complexes with this primary SIC code, even if other contributing SIC codes are
present. This clarification is necessary to address the issue at complexes with multiple SIC codes.

As part of its data request, CMA asked members who operate in these other SIC Codes to supply
information regarding the quality of their recovered oil to see if recovered oil from such facilities
were similar to other recovered oil and suitable for refinery use. Table 3 (see original comment)
provides analytical results by SIC codes. All of these streams are currently utilized in refineries to

June 29, 1998 11-56
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produce valuable hydrocarbon products. As explained previously, petroleum refineries have
procedures in place to ensure feedstocks and recovered oil streams are suitable for use in refinery
processes and finished products. These quality control procedures themselves, along with site
process knowledge, should be the determining factor whether a petrochemical recovered oil stream
is acceptable to a refinery complex.

Some of these streams are shown with SIC codes more specific than SIC Code 2869, indicating a
particular type of petrochemical source unit. It should be noted that SIC Code 2869 is the primary
SIC code for the aggregated streams at these facilities and the most representative SIC Code for
general petrochemical operations.

Key observations on the SIC code-specific data are as follows:
Appearance of the petrochemical recovered oil samples ranged from either
bright/clear to opaque/black. The bright clear appearance generally indicates a
narrower cut of material versus an aggregated stream. All the streams are
acceptable based on appearance.
The distillation 50% data for the petrochemical recovered oil streams ranged from
157 to 589 degrees F. These are well within the range of the refinery recovered oil
distillation range in Table l(CMA) (108 to 777 degrees F) and indicates that the
petrochemical streams will be processed similar to refinery recovered oil streams.
On hydrocarbon types, for most of the samples the aromatics and saturates content
was over 90%, which is consistent with refinery recovered oil. One sample has an
aromatics/saturates level of 51%, the remaining content consists of 49% olefins
which are acceptable for processing in the refinery; refinery systems produce
olefins, typically in a catalytic cracking unit.
The sulfur content of petrochemical recovered oil ranged from 0.0011 to 0.35 wt.
%, which are all low levels.
Ash levels were also very low for the petroleum recovered oil (<0.001 to 0.009)

The comparison to used oil specifications can be summarized as follows:

Table B: Comparison of Recovered Oil From Associated Non-Organic Chemical Facilities To
Used Oil Specifications

Used Oil Spec. Refinery SIC Code-Specific
Recovered Oil Petrochemicals Recovered Oil
Arsenic 5 ppmw max. <0.04 to 0.932 <0.4 to <0.4
Cadmium 2 ppmw max. <0.04 to 0.595 <0.04 to 1.36
Chromium 10 ppmw max. <0.04to3.93 <0.4to<2.0
Lead 100 ppmw max. <0.04 to 46.1 <4.0 to <2.0
Total Halogens 4000 ppmw max. <10to<20 2.2 to 3890
Flashpoint 100" F. min. <46°to <72°F. <52°to 126°F.
Note: "<" represents detection limit for test conducted

June 29, 1998 11-57
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Table B shows that all results for metals and total halogens were less than the used oil
specifications, and were generally either significantly below the specification level or below
detection limits'for the tests. Again, flashpoint was acceptable to refineries. (CMA, 00018,
supported by API, 00066)

The Agency is limiting the exclusion from the definition of solid waste for recovered oils to
recovered oils generated at co-located organic chemical manufacturing facilities. Although the
Agency proposed to extend the exclusion to both co-owned and co-located facilities, the Agency
has not been able to develop a definition of "common ownership" that would be clear and
workable.

As part of EPA's continuing efforts to redefine solid waste, defining common ownership (as a
possible means of describing certain intracompany relationships) also has been explored and has
proven very difficult. This is largely because of the many complex ways in which 'ownership' can
be defined from both a financial and a legal perspective. EPA believes that to attempt to do so
here would not prove effective. However, EPA does believe that the concept of 'co-located' is
more or less understandable and reflects physical boundaries as well as a degree of integration that
would help ensure more control by each facility over the transfer of materials throughout the
combined facility. Co-located in today's rule means that the petroleum refinery and the organic
chemical manufacturing facility are physically adjacent to one another, or otherwise share a
common boundary. In situations where the facilities consider themselves co-located but they are
not physically adjacent nor do they share a common boundary, the Agency is further clarifying co-
located to include facilities that have a high degree of integration with one another, as evidenced
by things such as: shared wastewater treatment systems; shared manufacturing units; transfer of
materials via dedicated piping; environmental permits that cover both facilities; facilities share
common emergency response equipment, procedures, and planning; etc. These examples can be
typical of physically co-located facilities, and therefore can be used to clarify cases where for one
reason or another an integrated petrochemical and petroleum refinery don't actually share a
common boundary.

Given the Agency's decision to restrict to the exclusion for recovered oils to co-located facilities,
the commenter's concerns regarding impacts on large complexes with multiple SIC codes and the
need to segregate recovered oil systems may be moot. However, the Agency does not understand
the commenter's assertion that the Agency's decision not to grant an exclusion for recovered oils

June 29, 1998 11-58
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generated at these facilities (i.e., the Agency is not excluding materials that currently are not
excluded) will provide cause for such facilities to now discard their recovered oils. Given that no
regulatory change is being finalize, the result should be no impact (either positive or negative) to
the industry.

Comment 2: EPA proposes extending the recovered oil exclusion to associated organic chemical
manufacturing facilities that are either physically co-located or under common ownership with the
refinery at which the recovered oil is inserted into the petroleum refining process. The Agency
should also extend the exclusion to "intercompany, not co-located" situations as well. An example
would be a petrochemical company desiring to send recovered oil, by truck or rail car, to a non-
affiliated refinery at a different location for purposes of fractionating and recovering product value
from the recovered oil.

Such an expansion of the exclusion is a logical outgrowth of the rule. Fundamentally, there is no
reason not to extend the recovered oil exclusion to this case. Many of the recovered oil streams
for this case are the same type as those at co-located or same company facilities; consequently,
stream quality is comparable. In addition, there is no need to discard the material, since it has a
desirable hydrocarbon value to a receiving refinery. The same economic incentives and
precautions that are taken to ensure that the recovered oil is suitable for insertion into the refinery
process will exist. A quality assessment/acceptability analysis would be done and the receiving
refinery would assess the appropriate process insertion point to maximize product recovery. In
addition, the recovered oil allows a receiving refinery to reduce alternate feedstock purchases.

The following table presents analytical results for recovered oil from intercompany/not co-located
facilities that is available to be processed at petroleum refineries. These streams are from
petrochemical operations and are all suitable for recovery by a refiner.

Key observations on the data for specific constituents analyzed are as follows:

The distillation 50% data for the petrochemical recovered oil streams ranged from
338 to 585°F. These are well within the range of the refinery recovered oil
distillation range in Table l(CMA) (108 to 777 °F) and indicates that the
petrochemical streams will be processed similar to refinery recovered oil streams.
The sulfur content of petrochemical recovered oil ranged from non-detect to 0.613
wt. %, which are all levels that are acceptable to a refiner.
Ash levels ranged from <0.009 to 1.2 weight %. While the 1.2 weight % ash content
is higher than what is typically found in refinery recovered oil, this is not a problem
to the refinery; the material will be processed within the refinery to optimize
hydrocarbon disposition.

The comparison to used oil specifications can be summarized as follows:
June 29, 1998 11-59
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Table C: Comparison of Recovered Oil From Non-Associated Industrial Facilities To Used Oil
Specifications Oil

Used Oil Spec Refinery Sic Code-Specific
Recovered Oil Petrochemicals
Recovered Oil
Arsenic 5 ppmw max. <0.04 to 0.932 Non-detect <5
Cadmium 2 ppmw max. <0.04 to 0.595 Non-detect to <50
Chromium 10 ppmw max. <0.04 to 3.93 Non-detect to 33
Lead 100 ppmw max. .04 to 46.1 Non-detect to <4.0
Total Halogens 4000 ppmw max. < 10 to <20 40 to < 1000
Flashpoint 1000°F. n-dn. <46° to <72CF. <200tol500F

Note: "<" represents detection limit for test conducted

The analytical results indicated that the arsenic, cadmium, chromium, lead, and halogen content of
the streams was generally below used oil specifications. One sample had a chromium content of
33 ppmw. The refiner's product control program would note this value and the refinery would
make a decision whether this recovered oil is suitable for use. In four cases the analytical results
for cadmium were below detection limits that were above the used oil specifications; the data
provided was from previous analysis that did not require lower detection limits since the metals
are not expected to be a concern to a refiner even at the higher detection limits.

The recovered oil streams presented in Table C are all suitable for use in a refinery process and
represent valuable hydrocarbons. EPA should encourage this activity. (CMA, 00018; supported
by Amoco, 00062; CMA, 00018, Exxon, 00035; Exxon Chemicals, 00041; Mobil, 00033; Phillips,
00055; Shell, 00047)

Response: The Agency notes that the final exclusion applies only to recovered oils generated at
organic chemical plants that are co-located with petroleum refineries. The Agency has not been
able to develop a definition of "common ownership" that would be clear and workable. As part of
EPA's continuing efforts to redefine solid waste, defining common ownership (as a possible
means of describing certain intracompany relationships) also has been explored and has proven
very difficult. This is largely because of the many complex ways in which 'ownership' can be
defined from both a financial and a legal perspective. EPA believes that to attempt to do so here
would not prove effective. However, EPA does believe that the concept of'co-located' is more or
less understandable and reflects physical boundaries as well as a degree of integration that would
help ensure more control by each facility over the transfer of materials throughout the combined
facility.

Co-located in today's rule means that the petroleum refinery and the organic chemical
manufacturing facility are physically adjacent to one another, or otherwise share a common
boundary. In situations where the facilities consider themselves co-located but they are not

June 29, 1998 11-60
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physically adjacent nor do they share a common boundary, the Agency is further clarifying co-
located to include facilities that have a high degree of integration with one another, as evidenced
by things such as: shared wastewater treatment systems; shared manufacturing units; transfer of
materials via dedicated piping; environmental permits that cover both facilities; facilities share
common emergency response equipment, procedures, and planning; etc. These examples can be
typical of physically co-located facilities, and therefore can be used to clarify cases where for one
reason or another an integrated petrochemical and petroleum refinery don't actually share a
common boundary.

In the proposed rule, EPA stated that it would consider broadening the proposed exclusion to
include hydrocarbon streams from certain other organic chemical manufacturing facilities,
including plastic materials and resins (SIC Code 2821), synthetic rubber (SIC Code 2822), and
cyclic crude and intermediate producers (SIC Code 2865), if sufficient analytical data were
received to support such a broadening. At this time, the Agency has not received sufficient
information on the composition of the hydrocarbon streams produced by these industries that are
typically sent to petroleum refineries, therefore the administrative record does not support
extending the exclusion to these specific materials.

In the case of recovered oil from off-site facilities, the Agency believes that there are significant
opportunities for "recycling" to serve as a shield for the treatment or destruction of wastes or
hazardous constituents. The Agency does not have sufficient data to adequately define "recovered
oil" as it applies to the organic chemical industry and so as to minimize the potential for "toxics-
along-for- the-ride." In the case of facilities that are co-located, the Agency believes that there is a
greater potential for facility owner/operators to have accurate understanding of the composition of
the recovered oil being recycled and there will be significant incentives to minimize the levels of
potentially toxic and hazardous constituents in the recovered oil.

The Agency did not receive sufficient data to support expanding the proposed exclusion to
recovered oils generated at intercompany off-site facilities. Although the Agency received some
data comparing recovered oil samples against the used oil specification criteria, the data submitted
does not precisely identify the specific waste that was sampled and does not provide information
on the presence or concentration of other hazardous constituents contained in the waste. Given the
Agency's lack of understanding of the types of wastes that could qualify for such an exclusion and
given that these wastes, if provided the exclusion, would be allowed to be stored for a period of
time greater than 90 days in tanks or containers that do not have to meet RCRA subtitle C storage
standards and could be transported any distance without being accompanied by a hazardous waste
manifest, the Agency has decided not to extend the proposed exclusion to recovered oils generated
at non-affiliated facilities.

Comment 3: Commenters support the expansion of the recovered oil exclusion to allow the
movement of such feedstock from all petrochemical plants to all refineries, regardless of
ownership or location... The exclusion would appropriately recognize the integrated nature of the
petroleum industry and the in-process, un-discarded nature of hydrocarbon-bearing materials

June 29, 1998 11-61
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produced in various parts of the industry and sent to petroleum refineries for insertion into the
refining process. (Amoco, 00062; Shell, 00047)

Response: See responses to comment 1 and 2 above.

Comment 4: The list of petrochemical plants eligible for the exclusion should be broadened to
include SIC Code 2821 (plastics and resins) and 2822 (synthetic rubber). Lube Oil Plants, SIC
2992, should be added to the list of oil related industries that are eligible for the exclusion. A
mechanism for including additional SIC Codes in the list of approved codes should be established.
(Shell, 00047)

It is not the Agency's intent in expanding the current exclusion from the definition of solid waste
for recovered oils materials inserted into the petroleum refining process as feedstocks to allow for
the widespread shipment of oil-bearing residuals between third parties. Such an expansion of the
exclusion provided for oil-bearing residuals could result in residuals being handled by facilities
whose ability to properly manage the residuals is uncertain. EPA does not have the extensive
waste generation data or waste management information necessary to evaluate such an extensive
expansion of the current exclusion. Therefore, EPA is not expanding the scope of the exclusion to
include oil-bearing residuals generated at facilities that are not petroleum refineries or co-located
organic chemical manufacturing plants.

Comment 5: The proposed recovered oil exclusion discourages smaller operations and petroleum
residual generators from recycling. As proposed, the expansion of the recovered oil exclusion
would benefit the larger petroleum refining operations which have onsite activities that allow
return of the recoverable oil materials to various processes. However, many facilities do not have
the processing capabilities to recover that hydrocarbon value from an onsite recoverable oil.
Recoverable oils from these facilities would therefore be subject to full Subtitle C regulation, even
if sent to a facility that recycles the material to recover its hydrocarbon value.

The EPA's stated purpose for the exclusion is to "promote environmentally sound recycling of oil-
bearing residuals." This goal can be achieved by encouraging recycling of the oil bearing wastes
at any facility that has the equipment and capability to properly manage such wastes. This is
especially true given the fact that the exclusion is not limited to the recycling of onsite oil bearing
wastes, and in fact allows for the transport of offsite oil bearing wastes to petroleum refineries.

June 29, 1998 11-62
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Limiting the exclusion to petroleum refineries results in an inequitable situation, favoring larger,
more complex operations and pushing other generators of recoverable oils to less desirable
management approach (i.e., lower on the EPA's waste management hierarchy). However, the
problem could be remedied by applying the recovered oil exclusion to recoverable oils sent to
off-site, third-party recycling facilities.

EPA should expand the scope of the facilities that can recycle petroleum refinery wastes under the
recovered oil exclusion from the definition of solid waste, to allow off-site recycling and to
include petroleum re-refineries under SIC Code 2992. Safety-Kleen believes that the applicability
of the recovered oil exclusion should be a function of the receiving facility's function, process, and
controls, rather than a function of the location and SIC code of the receiving facility. The
proposed rule would allow oil bearing residuals from specified petroleum refining sources to be
exempt from the definition of solid waste if inserted into the petroleum refining process. Other
companies that can utilize these residuals directly as ingredients in manufacturing processes to
make new products or directly as effective substitutes, for commercial products, should be allowed
to do so with the residuals similarly exempted from the definition of solid waste.

Safety-Kleen's East Chicago, Indiana oil re-refinery is capable of providing efficient and
environmentally sound recycling of recoverable oil and other petroleum residuals for their
hydrocarbon values and properties. However, because it is not associated with any specific
refineries and petrochemical facilities generating the petroleum residuals, any recoverable oil sent
to this facility for re-refining or recovery would have to be managed as a listed hazardous waste
under the requirements of this proposed rule. Safety-Kleen believes that the restriction of the
recovered oil exclusion to co-located or commonly owned recovery operations unnecessarily
limits recoverable oil recycling opportunities, and puts mid- to small-sized businesses who cannot
qualify at an economic disadvantage. In addition, some offsite, third party facilities (such as our
facility) are equipped and managed to handle the residual in an environmentally protective and
beneficial manner, due to the facilities being designed to meet the used oil management standards
or even the hazardous waste management standards. (Safety-Kleen, 00032)

Response: The final exclusion for recovered oils generated by organic chemical manufacturing
facilities that are inserted into the petroleum refining process is limited to recovered oils generated
by organic chemical manufacturing facilities that are co-located with the refinery that is using the
recovered oils. The Agency is limited the exclusion to co-located facilities because the Agency is
not able to develop a definition of "common ownership that would be clear and workable and due
to the fact that the Agency does not have sufficient data to support an additional expansion of the
exclusion to recovered oils generated by other types of petrochemical facilities (outside SIC code
2869).

The scope of the Agency's proposal was limited to the petroleum refining industry. EPA
specifically crafted the exclusion at 40 CFR 261.4(a)(12) for petroleum refineries, because this
industry is in the business of fuels production the exclusion obviously benefits refineries; that was
its intent. The Agency's rationale for the exclusion did not originally include facilities that re-

June 29, 1998 11-63
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refine used oils. The Agency considers the expansion of the proposed exclusion to re-refineries to
be beyond the original scope of the rulemaking.

The Agency previously promulgated separate standards for the management of used oil at 40 CFR
279 and for the management of residuals from the storage, processing, or refining of used oil (see
§279.59). It is not the Agency's intent in expanding the current exclusion from the definition of
solid waste for oil-bearing materials returned to the petroleum refining process as feedstocks to
allow for the widespread shipment of refinery residuals between third parties. Such an expansion
of the exclusion provided for oil-bearing residuals could result in residuals being handled by
facilities whose ability to properly manage the residuals is uncertain. EPA does not have the
extensive data or management information necessary to evaluate such an extensive expansion of
the current exclusion. Therefore, EPA is not expanding the scope of the exclusion to include the
management of oil-bearing residuals at non-petroleum refining facilities that can recycle
petroleum refinery wastes or to any other off-site third party recycling operations. Oil-bearing
materials transferred to off-site facilities other than a refinery do not meet the conditions of the
exclusion, as promulgated with today's final rule.
Comment 6: The petroleum residuals proposed to be excluded from the definition of solid waste
in many instances exhibit characteristics similar to used oils. Therefore, the EPA should require
management standards to guarantee that handling of these petroleum residuals is done in a manner
that is protective of human health and the environment. (Safety-Kleen, 00032)

Response: As noted in the proposal, used oils that are to be burned as fuels and that are within the
used oil specification limits for used oil fuels are considered by the EPA to be comparable to crude
oil for regulatory purposes (60 FR 57756).

The Agency does not find the imposition of separate regulatory management standards to be
warranted for recovered oils or secondary oil-bearing materials, as these materials are being
excluded from the definition of solid waste when they are inserted into the petroleum refining
process as feedstocks. The Agency notes that these materials will be subject to the same storage
and spill prevention requirements that govern other commodity-like petroleum feedstocks.

Comment 7: The manufacturing process operated by CR1-MET at their Braithwaite facility, is
unique and separate from other spent hydroprocessing catalyst recycling operations and their
processes. CR1-MET operates the only hydrometallurgical processing application for spent
hydrorefming catalysts which does not rely on thermal destruction, incineration, to remove
recoverable oil entrained within the spent hydroprocessing catalysts. The recoverable oil, i.e.,
valuable petroleum products consisting of catalytic cracking feed, naphthas, middle distillates, gas
oils, and other intermediates, often represent a significant percentage volume of spent
hydroprocessing catalysts. In place of incineration, the CR1-MET process separates recoverable
oil, which would function as a process inhibitor in the CRJ-MET process, from the catalysts.
Since the recovered oil is managed separately following separation from the catalysts, it is

June 29, 1998 11-64
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appropriate to consider its reuse as a product. Following separation from the catalysts, the
recovered oil is capable of being reinserted in petroleum refining processes.

By comparison, the oil recovered from spent hydroprocessing catalysts, is by far, superior to oil
recovered from "dry" process streams within the organic chemical industry. The recovered oil is
composed entirely of hydrocarbons that originate from petroleum refining feedstocks used by the
petroleum industry. CRJ-MET therefore requests the Agency to exempt oil separated from spent
hydrotreating and hydrorefming catalysts, to allow for its beneficial reuse within the petroleum
refining process. Without such an exclusion, which has already been proposed by the Agency for
an extensive variety of oil bearing residuals encompassing a wide range of SIC codes (see Section
III.E 2 b.2. of the proposed rule), CRJ-MET will be required to omit this element of their facility's
waste minimization program and incinerate a beneficial commodity as a solid waste.

Therefore, CRJ-MET requests the Agency to amend their proposed regulatory language under 40
CFR 261.4(a)(12) to include SIC Code 2819, or modify 40 CFR 261.4(a) to include an additional
entry. Proposed regulatory language would read as follows: (redlined items indicate CRI-MET's
proposed amendments)

40 CFR 261.4 Exclusions
(a) Materials which are not solid wastes. The following materials are not solid waste for
the purpose of this part:
*****
(Number to be assigned) Recovered oil from an associated metals manufacturing facility which is
to be inserted into the petroleum refining process (SIC Code 2911) along with normal process
streams, unless the material is placed on the land, or speculatively accumulated before being so
recycled. An "associated metals manufacturing facility" (SIC Code 2819) is either a physically
co-located facility or a facility under common ownership with the refinery at which the recovered
oil is inserted into the petroleum refining process.
*****
(CRI-MET, 00031)

Response: It was not the Agency's intent in expanding the current exclusion from the definition
of solid waste for oil-bearing materials returned to the petroleum refining process as feedstocks to
allow for the widespread shipment of oil-bearing residuals between third parties. Such an
expansion of the exclusion provided for oil-bearing residuals could result in residuals being
handled by facilities whose ability to properly manage the residuals is uncertain. EPA does not
have the extensive waste generation data or waste management information necessary to evaluate
such an extensive expansion of the current exclusion. Therefore, EPA is not expanding the scope
of the exclusion to include oil-bearing residuals generated at facilities that are not petroleum
refineries or co-located petrochemical operations.

Comment 8: The commenter urges EPA to broaden the proposed exclusion to include certain
intercompany, inter-location transfers of hydrocarbon streams. These should include cracking

June 29, 1998 11-65
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byproducts from the production of olefins from hydrocarbon feedstocks. These materials meet the
same basic rationale for exclusion as the materials already proposed for exclusion: namely, they
are hydrocarbon mixtures which are suitable for use as petroleum refinery feedstocks. (Union
Carbide, 00056)

Response: In the proposed rule, EPA stated that it would consider broadening the proposed
exclusion to include hydrocarbon streams from certain other organic chemical manufacturing
facilities, including plastic materials and resins (SIC Code 2821), synthetic rubber (SIC Code
2822), and cyclic crude and intermediate producers (SIC Code 2865), if sufficient analytical data
were received to support such a broadening. After reviewing limited information submitted by
commenters on streams from these other SIC codes, it became evident that these streams can be
produced by petrochemical units located within the larger facility, which overall is classified as
SIC Code 2869. In other words, petrochemical facilities are vertically integrated such that a unit
from SIC Code 2869 (organic chemical manufacture) might receive a petroleum feedstock, and
produce a chemical that is in turn fed to an adjacent unit classified as SIC Code 2821 (plastics and
resins), all as part of normal manufacturing within the facility. Both units may generate an oil
stream that represents excess unreacted feedstock, or a by-product not usable within the facility,
and these streams are often co-mingled and returned to a co-located petroleum refinery for
insertion into refinery units. Therefore, upon recognition that the separate SIC Codes discussed in
the proposed rule do not necessarily reflect separate facilities but can actually co-occur within the
same facility, the Agency has modified the final exclusion to allow for recovered oil from these
other SIC Codes (2821, 2822, and 2865) provided the units producing these petrochemical
recovered oils are located at a petrochemical facility that is overall classified under SIC Code
2869.

6. Cokers are integral to refining and are not waste management units

Comment 1: In expressly stating that the "recovered oil" exclusion would encompass oil-bearing
materials used as feedstocks to petroleum cokers, the proposed rule correctly recognizes that
petroleum cokers are integral refinery process units, and not waste management units 60 FR
57754. Similarly, the proposed rule acknowledges, appropriately, that oil-bearing residuals fed to
cokers are valuable feedstocks and not wastes.

As API has explained elsewhere [see original comment for citations], the principal function of a
petroleum coker is to upgrade hydrocarbons of lower value into middle and light end
hydrocarbons, which in turn are used to produce valuable fuels, including gasoline, jet fuel, and
kerosene. The coker also produces petroleum coke, itself a valuable fuel or, in some cases, a
valuable component in the production of electrodes.

As EPA points out, the upgrading conducted by the coker is significant enough that in many cases,
the economic viability of a refinery depends upon the coker. 60 FR 57754. Thus refiners would
not risk adversely affecting the operation of their cokers by using incompatible materials as
feedstocks.

June 29, 1998 11-66
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The Agency is also correct in stating that the oil-bearing hazardous residuals used as coker
feedstocks are substantially similar in composition to other coker feedstocks. The use of such
residuals as feedstocks does not measurably affect levels of toxic metals in the product coke. The
residuals are typically managed from generation through insertion to the coker in non-land-based
units, just as virgin raw materials are managed. For all of these reasons, the oil-bearing residuals
fed to cokers are properly viewed as undiscarded, in-process materials, and certainly are not part of
the waste disposal problem.29 Additionally, API agrees with EPA's conclusion that the use of oil-
bearing residuals as coker feedstocks does not pose any significant incremental risks as compared
to the use of other raw materials. (API, 00033)

Response: EPA acknowledges the commenter's support of the proposed exclusion from the
definition of solid waste for oil-bearing materials returned to the refining process. As finalized,
oil-bearing secondary materials generated by the petroleum refining sector (SIC code 2911) and
recovered oils generated by co-located organic chemical manufacturing facilities (primary SIC
code 2869) that are inserted into the refining process at any point, including the coker, are
excluded from the definition of solid waste. Both exclusions are restricted to those situations
where the secondary materials (or recovered oils) are not placed on the land prior to reinsertion
into the refinery process and to cases where the residuals are not accumulated speculatively. In
addition, the insertion of oil-bearing secondary materials into the coker must not result in the coke
product exhibiting a characteristic of hazardous waste.

Comment 2: The commenter supports EPA's proposal regarding the exclusion covering insertion
of CSO sediment into the refinery process (including the coker). (BP Oil, 00019; Mobil, 00033)

Response: EPA acknowledges the commenter's support of the proposed exclusion from the
definition of solid waste for oil-bearing secondary materials returned to the refining process. As
finalized, oil-bearing residuals generated by the petroleum refining sector (SIC 2911) are exclude
from regulation as solid waste when they are returned to the refining process at any point,
including the coker. The exclusion is restricted to those situations where the residuals are not
placed on the land prior to reinsertion into the refinery process and to cases where the residuals are
29While API strongly supports EPA's decision to codify in the RCRA regulations an
exclusion for oil-bearing materials used as coker feedstocks, it is API's position that the
undiscarded status of such materials was determined as a matter of law in AMC I, and that the
definition of solid waste currently does not apply to such materials. For the same reason, API
believes that EPA technically lacks the authority to condition the exclusion upon the coke
product not exhibiting a hazardous waste characteristic. However, API agrees with EPA that the
existing characteristics (including the TCLP) are sufficiently protective and adequate to avoid
any significant risks from the coke product. The use of the characteristics as a standard also is
consistent with a longstanding regulation (40 CFR Section 261.6(a)(3)(vi)) implementing RCRA
Sections 3004(q)-(s).

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not accumulated speculatively In addition, the insertion of oil-bearing secondary materials into
the coker must not result in the coke product exhibiting a characteristic of hazardous waste.

7. Exclusion of Oil-bearing Wastewater

Twelve commenters disagreed with EPA's decision not to exclude oil-bearing wastewaters. (API,
00046; ARCO, 00054; BP, 00019; Caufield, 00009; Coastal, 00048; Mobil, 00033; NPRA, 00015;
Pennzoil, 00053; Phillips, 00055; Total, 00039; Valero, 00051; WIRA, 00024)

In Section III.D of API's comments, API argues that the exclusion should include oil-bearing
wastewaters destined for oil recovery. The major elements of API's arguments include EPA's
lack of jurisdiction with respect to: (1) case law30; (2) whether wastewaters are analogous to
process feedstocks; (3) designation of API separators as process or wastewater treatment units; (4)
need to retain LDS for surface impoundments; and (5) risk. These five elements of .API's
comments, and EPA's responses, are provided below as Comments 1 through 5, respectively.

Comment 1:
[Case law]
[API paragraph 2] As discussed above, [need to cross-reference comment] the decision in AMC I
prohibits EPA from asserting RCRA jurisdiction over materials that have not been discarded, e.g.,
in-process secondary materials. At a minimum, this includes secondary materials involved in
continuous, ongoing manufacturing processes. See AMC II, 907 F.2d at 1186; API, 907 F.2d at
741. Oil-bearing wastewaters destined for oil-recovery certainly meet this description. More
significantly, however, such oil-bearing wastewaters were among the very materials at issue in the
AMC I case. Thus, whatever discretion EPA may have to construe the definition of solid waste in
other contexts is severely limited in the context of the recycling of oil-bearing wastewaters at
refineries.31

Response: EPA continues to consider refinery wastewaters to be discarded materials and therefore
solid wastes potentially subject to regulation under RCRA. The AMC II decision established that
EPA has jurisdiction over materials that are recycled when the management of such materials
includes an element of discard. The Court in AMC II held that "discarded" is an ambiguous term
that EPA may interpret in a reasonable manner. Nor does EPA view wastewater treatment
operations as part of the petroleum refining process, notwithstanding that the water contains
minute concentrations of hydrocarbons which are skimmed as part of the initial stages of
30API believes that the case law argument makes the remaining EPA arguments
irrelevant, but provides a response to each of EPA's considerations.

"While cases decided after AMC I may provide some guidance on the definition of solid
waste as it applies to materials in other industries, those cases have no bearing on issues
specifically litigated and determined in AMC I.

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wastewater treatment. Wastewater treatment systems exist to purify discarded wastewaters from
the refining process and the wastewaters are ultimately discharged, the wastewaters are not
returned to the petroleum refining process as feedstocks. Petroleum refinery wastewaters clearly
are discarded, and therefore are solid wastes. See AMC II. 907 F. 2d at 1186-87.

The Agency thus disagrees with the commenter's assertion that wastewater treatment operations in
which oil is skimmed and oil-bearing sludges are separated from plant waters are part of the
ongoing refining process. Petroleum refining wastewaters differ from both recovered oil and oily
sludges that are separated from wastewaters in that, unlike these secondary materials, the
wastewaters themselves are not analogous in composition to normal petroleum refining feedstock
material and consequently are not reinserted into the petroleum refining process to produce
petroleum products. Instead, petroleum refining wastewaters from which oily materials have been
removed are discharged (i.e., discarded), and are thus not eligible for exclusion as a petroleum
refining process feed. As explained in the preamble to the recovered oil rule (59 FR 38539),
primary wastewater treatment operations exist to treat plant wastewater. The main purpose of
wastewater treatment is to purify discarded wastewaters from the refining process so that they can
ultimately be discharged pursuant to Clean Water Act requirements, not to recover secondary
materials for recycling back into an ongoing manufacturing or industrial process.

Comment 2: [3] The fundamental flaw in EPA's argument that "the wastewaters themselves are
not analogous in composition to normal petroleum refining feedstock material" (60 FR 57755) is
that to one degree or another, nearly all raw materials have some component that will ultimately be
discarded. For example, oil-bearing sludges are often processed to separate the oil from solids and
water. The solids are discarded, but this does not render the pre-oil recovery sludges solid wastes.
For that matter, even crude oil itself is produced with substantial amounts of water and sediments.
Yet the presence of components that will be separated and disposed of does not transform crude oil
from a raw material into a solid waste. (Thus, EPA's claim that oil-bearing wastewaters are not
analogous to feedstock materials is both incorrect and off point.) [see also Mobil, 00033]

[In a related comment, WIRA, 00024, argued that "Refinery wastewater is analogous in
composition to refinery feedstocks. Much of the refinery wastewater is generated by the
dehydration of incoming crude oil or during the washing (desalting) of crude oil prior to
the start of the refinery process. The majority of the rest of the stream either is steam
condensation, boiler blowdown, (these streams are essentially salty water which is similar
to formation water), or cooling tower blowdown. WIRA believes that wastewater
treatment systems exist to recover oil from wastewater.]

[4] Moreover, the fact that wastewaters "from which oil-bearing materials have been removed" are
discharged, id., has no bearing on whether the oil-bearing waters prior to oil recovery should be
considered solid wastes. API has not disputed (and does not dispute) that the non-oil-bearing
wastewaters that remain after oil recovery and that are treated and later discharged from
wastewater treatment systems are solid wastes. To the contrary, it is the presence of oil, and the
ongoing recovery and use of that oil, that distinguishes pre-recovery process water streams from

June 29, 1998 11-69
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discarded, post-recovery waste water streams.32 [see also Mobil, 00033; Total, 00039; Valero,
00051]

Response: The Agency maintains that wastewater treatment systems exist to purify discarded
wastewaters from the refining process. In addition, these systems typically use land-based
treatment units (e.g., impoundments in which biological treatment occurs) and the Agency
considers materials placed in such units to be discarded, and hence solid wastes. The Agency
understands that refinery wastewaters may be analogous to some produced oil/water, but these
wastewaters generally contain significantly less oil than the "as received" crude oil, which has
generally undergone separation of formation water. EPA continues to maintain that wastewater
treatment systems recover oil as a means to improve the efficiency of subsequent processes to
remove oxygen depleting chemicals from the water that is ultimately discharged and to achieve
compliance with discharge standards (e.g., Clean Water Act standards). What oil or oil-bearing
material — indeed minuscule — that is recovered as a result of the primary and secondary
oil/water/solids separation is small relative to the high volume of water used in refinery operations
which is destined for discard. It would be anomalous indeed if 1 ppm of oil could suddenly
transform millions of gallons of wastewater into an in-process material, and transform wastewater
treatment into an on-going refining process. Wastewaters simply have been discarded from the
refining process. AMC II. 907 F. 2d at 1186-87.

Wastewater in a wastewater treatment system does not become an in-process material just because
it happens to contain trace amounts of hydrocarbons. If the commenter's reasoning were followed,
even impoundments holding hazardous sludges such as F037/F038, or an aquifer contaminated
with petroleum, would be considered 'hydrocarbon storage units' because the sludges and
wastewater contained a small amount of oil. It is clear that impoundments are waste management
units and that materials in them can be classified as solid wastes. AMC II, 907 F. 2d at 1186.
Similarly, wastewater treatment tanks can reasonably be classified as something other than part of
the petroleum refining process. Their chief function is to treat wastewater, through the separation
of oil from oil-bearing materials and other co-disposed wastes destined for discard. The vast
32EPA has recognized this principle in the context of tank water draws:

"In determining the regulatory status of the petroleum product/water mixture before
recovery, EPA would not generally differentiate between the two individual components.
After the product has been separated and recovered from the water, the water would be
evaluated on its own merit.... Assuming the contaminated water will be treated and/or
disposed of, the water would become a solid waste once the product has been recovered

Letter from D. Clay (EPA) to A. Buchman (Conoco Inc.), June 14, 1991, Enclosure at 1
(emphasis added).

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majority of the material processed in wastewater treatment tanks is wastewater comprised of
neutralized corrosive wastes and processed waters which no longer have beneficial use at the
source process unit. Further failure to designate these wastewater treatment tanks as waste
management units could result in a lack of treatment of hazardous constituents in the characteristic
waste streams that are managed in wastewater treatment systems which utilize impoundments.
Third Third opinion, 976 F. 2d at 16, 23. Such a failure would strike at a core RCRA concern
Id at 23.

Comment 3: [5] Second, EPA argues that the recovery of oil from wastewaters is merely
secondary to the "wastewater treatment" function of API separators. (60 FR 57755.) See also, 59
FR 38539 (July 28, 1994).33 In fact, oil recovery is a principal purpose and function of API
separators, and such oil recovery has been practiced in the refining industry since long before
RCRA or the NPDES program under the Clean Water Act came into effect.34 EPA's own
engineering experts have concluded that units such as API separators serve a dual function of oil
33In part, EPA may base this argument on the assumption that the concentrations of oil in
refinery wastewater streams are insubstantial and, thus, that oil recovery from such streams is not
significant. See 59 FR 38539 (July 28, 1994). However, the concentrations of oil in refinery
wastewater streams are not as insubstantial as EPA has suggested. API has provided EPA with
data establishing that wastewaters typically contain significant quantities of recoverable oil. See
API, "Fact Sheet: Impact of Revisions of Definition of Solid Waste on Refinery Operations"
(Oct. 1994.) What is more, the total quantities of valuable oil actually recovered from refinery
wastewater streams are, in fact, very substantial. A survey of 20 refineries revealed oil recovery
(as a percentage of total API separator throughput) ranging from 0.05% to 1.0%. Id. It is not
uncommon for a single refinery to recover on the order of 1000 barrels of oil per day from the
wastewater system. Thus, EPA's suggestion that such oil recovery operations are
inconsequential is incorrect.

34EPA's rationale suggests that mere placement of a secondary material in a system called
a "wastewater treatment system" ipso facto renders the material a solid waste. No such
conclusion is possible. Just because something is commonly referred to as a "wastewater" does
not mean it fits the RCRA definition of "solid waste" that Congress crafted so carefully. Indeed,
the legislative history shows that Congress hesitated to use the very word "waste" because it
feared the statute would be misconstrued to regulate undiscarded material:

Waste itself is a misleading word in the context of the committee's activity. Much
industrial and agricultural waste is reclaimed or put to new use and is therefore not apart of the
discarded materials disposal problem the committee addresses.

H.R. Rep. No. 1491, 94th Cong., 2d Sess. 2, reprinted in 1976 U.S. Code Cong. & Admin. News
6240 (emphasis added.)

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recovery and wastewater treatment. See, e.g., Memorandum from Ben Smith, P.E. (EPA Office of
Solid Waste) to EPA Docket No. F-87-SWRP-FFFFF (Nov. 17, 1987). [see also WIRA, 00024]

Response: The Agency disagrees. API separators and other oil/water/solids separators are
designed to remove oil and solids from wastewaters. Without such removal, down stream
treatment capacity would need to be considerably increased to be able to achieve discharge
limitations. While considerable quantities of oil-bearing residuals may be recovered, the amount
recovered is small relative to the treated volume of wastewater. The oil that is contained in the
wastewaters is just commingled with the wastewater discarded from the refining process.

EPA considers the wastewater treatment system's primary function to be contaminant removal for
compliance with Clean Water Act requirements, rather than hydrocarbon recovery for the purpose
of refining crude oil. In the Agency's view, the ongoing petroleum refining process ends when the
process of producing petroleum ends. EPA is not seeking to regulate hydrocarbon fractions
moving between fractionating columns that produce, in sequence, fuels, kerosene, and gasoline.
The wastewater treatment system, however, is not part of this production process, as residuals
containing some recoverable oil are co-managed with residuals destined entirely for discard. In
addition, the Agency maintains that oil recovery from refinery wastewaters occurs for the purpose
of treatment and notes that much of this treatment occurs in land-based units, even though many
facilities have moved to treatment in tanks. EPA has specifically excluded wastewaters from the
realm of materials to be considered oil-bearing on the basis that the Agency considers these
wastewaters to be discarded materials.

Comment 4: [6] Finally, EPA asserts that labeling all refinery wastewaters as "solid wastes" is
necessary to assure "treatment of hazardous constituents in characteristic waste streams ...
managed in wastewater treatment impoundments (e.g., impoundments in which biological
treatment occurs) in accordance with the land disposal restriction (LDR) requirements." (60 FR
57755). It appears that EPA has misstated its argument in this instance, since EPA cites for
support the 1994 recovered oil rule preamble discussion of wastewaters (59 FR 38540) which
actually addressed the potential risks associated with placement of decharacterized wastewaters,
not currently characteristic wastewaters, in biological treatment surface impoundments.35
35If the quoted passage in the current preamble were taken literally, it would prove
nothing. It is a given that any currently characteristic wastewaters that might be deposited in
biological treatment surface impoundments — which are downstream of oil recovery operations —
would, at this time, be subject to LDS. See Chemical Waste Management v. EPA, 976 F.2d 2
(D.C. Cir. 1992), cert, denied, 113 S.Ct. 1961 (1993). However, that is entirely irrelevant to the
status of oil-bearing waters upstream of oil recovery that have not yet been discarded. Moreover,
the Chemical Waste Management decision has been overturned by act of Congress as it applied
to decharacterized wastewaters in Clean Water Act surface impoundments. H.R. 2036, 142
Cong Rec. H1965 (March 7, 1996).

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Assuming that EPA in fact meant to raise concerns about the placement of decharacterized
wastewaters in biological treatment surface impoundments, those purported concerns provide no
justification for classifying all refinery wastewaters — including pre-recovery oil-bearing streams -
- as solid wastes. First, the assertion that any secondary material should be labeled as a solid
waste in order that LDR requirements would apply is completely circular, and would stand the
statute on its head. Under Section 3004(m) of RCRA, 42 U.S.C. Section 6924(m), LDS are
triggered only by the land placement of materials that are, in fact, solid (and hazardous) wastes. In
other words, the LDR requirements do not even come into question unless the material is first
determined to be a solid waste. Thus, to state that because it might be desirable to apply LDS to a
material, the material must therefore be a solid waste, reverses the order of analysis prescribed by
law [see also Mobil, 00033]

[8] Second, even if EPA's attempt to bootstrap the regulation of wastewaters by invoking the
LDR's were valid as to refinery wastewaters when placed in biological treatment surface
impoundments, that would beg the relevant question of whether undiscarded oil-bearing waters
upstream of oil recovery operations should be excluded from the definition of solid waste. That is
because, in refinery operations, biological treatment in surface impoundments occurs downstream
of oil recovery units. API does not claim that wastewaters from which oil recovery is already
complete, and which may in fact be discarded, should be excluded under the proposed exclusion.
However, the RCRA status of such post-oil recovery wastewaters has no bearing on the status of
oil-bearing streams before oil recovery.

[9] Lastly, to the extent EPA relies in this rulemaking on the alleged risks associated with
placement of decharacterized wastewaters in biological treatment impoundments to justify labeling
refinery wastewaters as solid wastes, such reliance is beyond EPA's authority because (as
discussed above), the relevant criterion for identifying solid wastes under RCRA is whether a
material is discarded, not whether EPA believes the material poses a risk. Beyond this, the
purported risks from management of wastewaters in biological treatment impoundments that EPA
cited in the 1994 recovered oil rule (and the asserted need to subject the impoundments to LDR
requirements) simply do not exist. In a recent LDR rulemaking, EPA focused specifically on
management of decharacterized wastewaters in surface impoundments. See 60 FR 43654 (Aug.
22, 1995) ("Phase IV LDR proposal.) Under the EPA favored options under that proposal, EPA
determined that the risks from biological treatment impoundments (that are part of a Clean Water
Act treatment train) at refineries are so low that they do not warrant imposition of LDR
requirements. Id.; Technical Support Document - Options for Standards for Leaks, Sludges and
Air Emissions from Surface Impoundments Accepting Decharacterized Wastes, July 1995.
PHYP-S001; Regulatory Impact Analysis of the Phase IV Land Disposal Restriction Rule, June
June 29, 1998 11-73
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13, 1993. PHYP-S0054, p. 2 - 4 53.54.JJ 36 In fact, regulation under RCRA prior to oil recovery
is simply not necessary to ensure the quality and safety of water down-stream of oil recovery.

[10] The toxicity characteristic and the accompanying land disposal restrictions would apply to the
wastewater should there be any remaining significant risk. Thus, EPA has offered no valid
reasons for declining to exclude from the definition of solid waste oil-bearing refinery wastewaters
that are destined for recycling in ongoing oil recovery operations as part of the refining process.37

Response: Discarded plant wastewaters up to and including the primary wastewater treatment
step, can contain high loadings of hazardous constituents that may pose environmental harm if
released. Primary wastewater treatment also is sometimes conducted in land-based or in-ground
36EPA itself asserted in the Phase IV LDR proposal that the Chemical Waste Management
decision did not require pretreatment of wastewaters managed in biological treatment
impoundments that are part of a Clean Water Act treatment train. See 60 FR 43656-57 (Aug. 22,
1995).

37API notes that although EPA does not explicitly rely on any allegations of risk from the
oil-bearing wastewaters upstream of oil recovery in the November 20, 1995 proposal, it did do so
in the July 28, 1994 "recovered oil" rule (which also failed to exclude oil-bearing wastewaters).
59 FR 38540. As discussed above, those concerns do not satisfy the statutory criterion for
determining what materials are solid wastes. In any event, the risk-related arguments raised in
the 1994 recovered oil rule do not withstand scrutiny and would not support a determination that
oil-bearing waters are solid wastes (even if environmental or health risk were a valid basis for
such a determination). For example, EPA suggested that benzene air emissions from oil-bearing
wastewater in a treatment system are a source of concern. Id. However, even if that were so in
the past, EPA thoroughly addressed that concern in 1993 with a risk-based emission standard for
benzene under section 112 of the Clean Air Act that specifically covered such operations. 58 FR
3072, 3095-3105 (Jan. 7, 1993); 55 FR 8292, 8346-61 (March 7, 1990) (the so-called "benzene
waste NESHAP," in which EPA explicitly acknowledged that "wastes" under the Clean Air Act
are not necessarily "solid wastes" under RCRA, id. at 8318, 8322-23) Thus, the air emissions
issue has been rendered largely academic.

Similarly, in the 1994 recovered oil rule, EPA suggested that potential contamination from land-
based wastewater treatment units was a significant reason for not excluding oil-bearing
wastewaters, but cited for support only the background document for the listing of "primary
sludge." (See 59 FR 38540 n. 10.) Yet, despite that purported concern, primary sludges
themselves would be excluded under the proposed new exclusion if recycled in the refining
process even though wastewaters would not. Thus, EPA again has failed to provide any rational
basis for treating oil-bearing wastewaters differently from other recycled oil-bearing secondary
materials.

June 29, 1998 11-74
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units, which can (and have) resulted in environmental contamination. Therefore the Agency
asserts that these operations can be part of the waste management problem.

In addition, petroleum refineries frequently generate individual wastewater streams that exhibit
characteristics of hazardous waste, the streams are mixed together so that the characteristic is
removed. These aggregated wastewater streams may still contain high volumes of hazardous
constituents, however, because aggregation (i.e., dilution) and primary treatment do not
significantly remove or destroy all hazardous constituents. The aggregated wastewaters are then
managed in surface impoundments, where biological treatment occurs.

EPA's interpretation of the regulatory status of refinery wastewaters does not result in an assertion
that RCRA jurisdiction is extended to any refining operations that process hydrocarbons into
products, nor over hydrocarbons that are lost from process vessels and are gathered for return to
refining. Rather, the Agency is stating that up to and including primary wastewater treatment,
plant wastewaters are just that, and their management is subject to applicable Subtitle C controls.

Comment 5: [11] Ironically, with the exception of purported concern about biological treatment
impoundments, EPA does not appear to base its proposal not to exclude oil-bearing wastewaters
explicitly on the basis of perceived elevated risk. See 60 FR 57755. As discussed above, risk is
not the appropriate criterion for determining whether a material is a solid waste. Nonetheless,
there is no basis to conclude that oil-bearing wastewaters upstream of oil recovery pose any greater
level of environmental risk than do other oil-bearing refinery residuals that EPA has already
excluded, or proposed to exclude, including oil-bearing sludges from recovery units, that remove
oil from the oil-bearing waters, See 60 FR 57754-55. (API, 00046; Caufield, 00009; NPRA,
00015; Valero, 00051)

Response: Discarded plant wastewaters up to and including the primary wastewater treatment
step, can contain high loadings of hazardous constituents that may pose environmental harm if
released. Primary wastewater treatment also is sometimes conducted in land-based or in-ground
units, which can (and have) resulted in environmental contamination. Therefore, the Agency
asserts that these operations can be part of the waste mange problem. Wastewaters are discarded
materials, and therefore are solid wastes.

Comment 6: If EPA is truly concerned about the treatment of refinery wastewater in surface
impoundments, it could have proposed a conditional listing similar to the one it is proposing for
clarified slurry oil. However, WIRA does not believe that this is necessary in light of the D.C.
Circuit's Decision in AMCII (American Mining Congress vs. EPA, 907 F.2d 1179 DC (1990))
which prohibited the storage of secondary materials in surface impoundments. (WIRA, 00024)

Response: EPA infers that the commenter is advocating that oil-bearing wastes be excluded from
classification as solid waste, provided they are not managed in surface impoundments. Such an
exclusion would be analogous to the proposed regulation of CSO sediment provided it was not
managed in land treatment units. Although the fact that refinery wastewaters may be treated in

June 29, 19.98 11-75
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land-based units reinforces EPA's argument that these wastewaters are "discarded" and are part of
the waste management program, EPA asserts that refinery wastewater treatment systems are
treatment systems used to manage wastes that are being discarded, regardless of whether the
treatment system includes the use of surface impoundments.

8. Miscellaneous Comments on Recovered Oil Topics

a. Laboratory Wastes

Comment 1: The commenter requested that EPA clarify it's position on lab wastes. (Caufield,
00009)

Response: While samples collected for the purpose of testing to determine a waste's
characteristics or composition are exempt from the definition of solid waste, provided the
conditions of 40 CFR 261.4(d) are met, residues resulting for such analysis are not exempt. In the
example the commenter cited, the mixture composed of a test sample and the toluene remaining
after testing was complete is a spent solvent mixture. When discarded, the lab waste is subject to
all RCRA regulations and may potentially be regulated as a F003 and D001- ignitable waste in the
case described.

b. 261.6 Modifications

Comment 1: EPA states that, "It should be noted that certain existing exclusions provided under
§261.6 that pertain specifically to petroleum refining wastes would become unnecessary as a result
of today's proposal. The Agency will amend these provisions as necessary in its final
rulemaking." Since the exclusions in §261.6 are carefully crafted and critical to our industry, EPA
should provide opportunity for industry to comment on any modifications. The commenter
supports appropriate revisions to any outdated exclusions; however, any decision to proceed
without industry involvement will likely result in unnecessary confusion and delay as EPA and
industry work to agree on the appropriate wording of any revisions. (Exxon, 00035)

Response: EPA will specifically propose any regulatory amendments found necessary to remove
outdated exclusions.

c. Exclusion of Reprocessed Plastics

Comment 1: EPA's proposal recognizes the jurisdictional parameters of the Agency's existing
regulatory program under RCRA, 42 U.S.C. § 6901 et seq., need clarification insofar as the
application of the program to secondary materials destined for recycling is concerned (60 FR
57749). The need for such classification is at the core of the Agency's ongoing reexamination of
the definition of solid waste occurring outside of this rulemaking. The NPR proposes revisions to
the definition of secondary materials in recognition of the problems created by the narrowness of
the existing exclusion from the definition of solid waste where the primary material is a fuel.

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APC's Comments will focus on this aspect of the NPR. In this regard, APC encourages EPA to
apply the principles proposed in this NPR to a broader revision of the definition of solid waste in
the nonhazardous waste context as applied to the reprocessing of plastics diverted from the waste
stream into a fuel or refinery/petrochemical feedstock (from which fuels may be produced).

Identification of the Issue in the NPR
As the NPR noted, materials are subject to regulation under RCRA only if they meet the definition
of "solid waste." Moreover, "secondary materials" may be excluded from the definition of solid
waste, and therefore from regulation under RCRA, if they are "recycled." Although RCRA itself
does not contain a definition of "recycling," to date EPA has defined recycling to exclude energy
recovery with the result that secondary materials used to produce fuels are generally not excluded
from the definition of solid waste.

The NPR recognizes this limitation on the scope of the secondary materials' exclusion from the
definition of solid waste poses special problems where the primary materials themselves are a fuel
or a raw material from which fuels are produced, as is the case with petroleum. Accordingly, the
NPR proposes to continue the expansion of the secondary materials' exclusion for certain
petroleum wastes that the agency began in its July 28, 1994 Final Recovered Oil Rule. The NPR
would extend the secondary materials exclusion to reprocessing of certain oil-bearing wastes to
produce a fuel. Moreover, the NPR would expand somewhat on the traditional limitation of the
secondary materials exclusion to materials destined for immediate reuse in another phase of the
industry's ongoing production process by applying the exclusion to wastes acquired by a refiner
from a third party in an intercorporate transaction.

APC supports this aspect of the proposed rule. APC concurs with EPA's conclusion that this
proposal is consistent with the waste management hierarchy established in the Pollution
Prevention Act of 1990 ("P.P.A."), 42 U.S.C. §13107, et seq. In this regard, APC believes the
waste management hierarchy of the P. A. must be applied flexibly, consistent with the nature of the
materials involved. Moreover, APC believes that beyond this rulemaking, the artificial bright line
sometimes drawn by EPA between recycling (to produce a product other than a fuel) and disposal
(where reprocessing of materials produces a fuel) cannot be supported where the primary
materials themselves are a fuel or are produced from a fuel.

The Expansion of the Secondary Materials Exclusion Proposed in the NPR Should Be Extended
To The Definition of Solid Waste Generally.

A major focus of APC's activities are programs directed at improving the recycling of plastic
products. In a remarkably short period, plastics have been added to literally thousands of
community recycling programs. Significant increases have occurred in the recycling of many
plastic products, most notably soda bottles and milk jugs. APC's continuing involvement in
recycling programs throughout the country has identified many remaining challenges. Meeting
these challenges is an important focal point of APC's research, development, and demonstration
programs.

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Those programs suggest that among the most cost-effective means recycling of mixed plastic
resins are:

(1) processes which chemically or thermally break down the plastic polymers thereby
recovering the more fundamental hydrocarbons comprising the monomers from
which plastic polymers are produced;38 and

(2) processes which combine waste plastic materials and/or industrial plastic scrap with
waste paper and/or industrial paper scrap to produce PEF, sometimes also called
pellet fuels.

APC's initiatives in these areas, however, have been hampered by EPA's narrow definition of
secondary materials The definition threatens to preclude these processes from qualifying as
recycling and unnecessarily triggers application of various RCRA regulatory requirements without
any environmental benefits.

As demonstrated below, EPA's general limitation on the definition of secondary materials that are
exempt from being considered solid waste only to materials reprocessed into products other than
fuels threaten to impede expanded recycling of plastic resins. Foreclosing production of a fuel
from plastics segregated from MSW from qualifying as recycling cannot be justified on statutory
or policy grounds because the raw materials from which plastics are produced, principally crude
oil or natural gas, are themselves fuels or feedstocks from which fuels are produced.

In a very real sense, plastics are "borrowed energy." If reprocessed into a fuel, the time spent by
hydrocarbons in the form of a plastic resin represents a temporary diversion of the hydrocarbons
from their primary destiny as a fuel. Reprocessing of discarded products manufactured from
plastics into fuels provides an opportunity for the hydrocarbon resources from which the plastic
was made to serve a dual function:

(1) as the product manufactured from the plastic with its attendant use benefits; and

(2) as a fuel that, but-for the temporary conversion of the hydrocarbons into a plastic
resin, would have been the only use for the hydrocarbon resource.

This life-cycle analysis approach to the role of plastics recycling in the hydrocarbon cycle is
consistent with the resource conservation and source reduction goals of both RCRA and the P. A..
Moreover, to the extent that conventional recycling technologies may be uneconomic for waste
streams comprised of mixed plastic resins, reprocessing of such mixed plastics to produce fuels or
38The hydrocarbons produced by these processes commonly take the form of a liquid similar in
many respects to crude oil. one of the most likely markets for which is as a feedstock for petroleum
refineries for further processing into highly marketable conventional fuels or other products.

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fuel feedstocks should constitute "recycling" because of the consistency of this activity with the
resource-conservation and source reduction goals of RCRA and the P.A.. The alternative is likely
to result in disposal of these mixed plastics in a landfill — a consequence with two undesirable
side-effects from a resource conservation viewpoint, increased burden on the nation's waste
disposal system; and increased consumption of virgin fuel resources in lieu of the fuels that could
have been produced from reprocessed plastics.

EPA has recently recognized this principle in its municipal waste combustor rulemaking where the
Agency recognized that pyrolytic processing of plastic materials otherwise destined for disposal to
produce a refinery (or petrochemical) feedstock constitutes recycling and such facilities should not
be regulated as waste incinerators. 60 FR 65382 (Dec. 19, 1995).

The Current Regulatory Definition of "Solid Waste" Hampers Expanded Co-Firing of PEF and
Produces Negative Environmental Consequences.

APC is actively investigating the economic and technological viability of expanded use of plastic
materials recovered from industrial scrap and/or from municipal solid waste streams to produce
PEF. This engineered fuel would be co-fired with coal or other conventional fuel supplies in
industrial and utility combustors. Process engineered fuels are designed to satisfy demanding
performance criteria enabling them to be co-fired with conventional fossil fuels in combustors
where predictability of combustion characteristics is demanded. PEF is produced from a mixture
of industrial and/or commercial plastic scrap plus other industrial and/or commercial scrap
materials. It can also be produced from plastic and other materials diverted from the household
waste stream. Optional binding agents and additives may be used. The proportions of the major
plastic and other components can be varied to yield a pellet fuel possessing the desired combustion
characteristics. The choice of binding agent(s) and additives is a function of the composition and
proportions of the major plastic and other components of the fuel and of the desired properties of
the fuel.39

PEF is designed to provide a highly predictable and uniform Btu content, burn rate and flame
temperature, all characteristics desirable to managers of industrial and utility combustors. In
addition, PEF of a particular composition will yield ash and air emissions with predictable
characteristics, contributing to the desirability of PEF as a fuel source. These characteristics
distinguish PEF from ordinary refuse derived fuel ("RDF"), the composition and combustion
characteristics of which differ and generally vary more widely than is acceptable for PEF. To
meet these performance criteria, the streams of materials used to produce PEF may be required to
39PEF may come in pellet form, or as a briquette, cube or in other form.

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undergo far greater separation, grading, and processing than is typical for RDF produced from raw
or minimally processed municipal solid waste (MSW), further distinguishing PEF.40

Expanded co-firing of PEF with other fuels, particularly coal, could provide significant
environmental benefits. Combustion of PEF typically produces virtually no S02 emission
potential Thus, co-firing up to 30% MSW derived PEF41 with coal could be an alternative means
of achieving S02 emission reductions that would not require switching to more costly sources of
coal or the need to install expensive scrubbers and other emission control devices.42 Additional
benefits from co-firing of PEF include the conservation of resources and reduction in the amount
of solid waste requiring landfill disposal. Accordingly, expanded co-firing of PEF with coal in
industrial and utility boilers is also consistent with the express policy established by Congress in
the waste management hierarchy of the P. A.. Therefore, co-firing of PEF produced from plastic
scrap and other scrap materials and/or from plastic and other materials diverted from the waste
stream may provide twofold environmental benefits: (1) a cost-effective means of achieving S02
emission reductions, while (2) reducing the quantity of solid waste requiring disposal.

However, regulatory impediments at the federal level need to be resolved if the full S02-emission-
reduction-potential and other environmental benefits of PEF are to be realized. The primary,
regulatory issue involves RCRA regulation of disposal of ash from co-firing of PEF with coal.
Unless resolved, the ash disposal issues threaten to limit the source of materials for production of
PEF to industrial scrap and foreclose utilization of materials separated or diverted from
residential sources to produce PEF. This would prevent the expanded use of PEF from helping
solve the Nation's solid waste disposal problem and becoming a creative mechanism for reducing
S02 emissions.

This impediment is the consequence of the overly-broad definition of solid waste that is, in part,
the subject of this rulemaking. Specifically, ash from combustion of coal in industrial and utility
boilers may be disposed in landfills that are exempt from RCRA subtitle C regulation because coal
40PEF, as a manufactured product with standards and specifications, does not contain certain
materials commonly found in MSW. such as batteries and household hazardous wastes. One of APC's
ongoing programs is to document the air emissions and ash residue consequences of combustion of PEF.

41The 30% limitation is the maximum percentage of MSW-derived fuel, including feedstock
diverted from the MSW stream, that may be co-fired in an industrial or utility combustor without
subjecting the combustor to the stringent regulations applicable to MWCs under section 129 of the CAA.
42. U.S.C. 7429(g)(5).

42Expanded co-firing of PEF with coal in industrial and utility boilers is consistent with the
express policy established by Congress in the Clean Air Act. In section 129 of the CAA. 42 U.S.C. §
7429(g)(5). Congress provided that the more stringent air emission standards applicable to municipal
waste combustors would not apply to combustion units which co-fire up to 30% MSW or fuels derived
from MSW. with conventional fuels such as coal.

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combustor ash qualifies as a "Bevill waste" under 42 U.S.C. § 6921(b)(3)(A)(I). Typically,
therefore, industrial or utility coal-combustor ash is disposed in landfills meeting the requirements
of EPA's Regulations on Criteria for Classification of Solid Waste Disposal Facilities and
Practices, 40 CFR Part 257. This result does not change if PEF produced from industrial process
scrap materials (plastic and paper) is co-fired with coal ~ the resulting PEF/coal-ash can still be
disposed in accordance with the Part 257 criteria.43 However, if the PEF is produced from plastic
or paper materials recovered or diverted from MSW, a different result threatens to occur under
EPA's regulations.

Under RCRA, EPA established Criteria for Municipal Solid Waste Landfills, 40 CFR Part 258
(1995). These regulations are far more extensive and costly to comply with than the requirements
applicable under Part 257. For example, Part 258 includes disease vector controls (section
258.22), ground water monitoring and corrective action requirements (Subpart E), and closure and
post-closure regulations (Subpart F) which make disposal in an MSW and post-closure regulations
(Subpart F) which make disposal in an MSW landfill far more expensive than disposal in a landfill
subject to Part 257.

Under Part 258, MSW landfills are those which receive "household waste." Household waste is, in
turn, defined as "any solid waste ... derived from households. . .." 40 CFR § 258.2 (1995)
(emphasis added). The preambles to both EPA's proposed MSW Landfill Criteria rules and to the
final rules adopting the MSW Landfill Criteria indicated that landfills which receive "M.C. ash"
(undefined) are regulated under Part 258 as MSW landfills, presumably because this ash is a solid
waste "derived from" households and therefore is itself a "household waste" rather than an
industrial waste.

This interpretation was apparently developed with ash derived from mass-burn incineration of
unprocessed MSW, including household wastes potentially containing batteries and small
quantities of household hazardous waste that may affect the composition of the resulting ash, in
mind. However, this rule threatens to have environmentally counterproductive results where co-
firing of PEF is concerned. If PEF is "derived" from MSW, ash from co-firing of PEF with coal
would likewise be deemed to be "derived" from MSW and, therefore, subject to EPA's
requirement that such ash be disposed in an MSW landfill meeting the requirements of Part 258
rather than disposed in accordance with Part 257. The unintended consequences of this aspect of
the rule is made more apparent because combustor ash from co-firing of PEF produced from
industrial waste or scrap materials may be disposed in compliance with Part 257 and is not subject
to the more stringent and costly requirements of Part 258. The implications of this consequence
on expanded co-firing of PEF produced in part from plastics derived from MSW (rather than
purely from industrial scrap) are heightened because the requirement for disposal under Part 258
43A question may arise as to whether this ash would not enjoy a Bevill waste exclusion and would,
therefore, be subject to RCRA subtitle C regulation if the ash exhibited any hazardous characteristic, even
though those characteristics were identical to those of "pure" coal-ash qualifying for Bevill waste status.

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may apply to the entirety of the ash produced. This occurs even though only a small portion of
the ash may actually be attributable to plastics from household waste and the great bulk of which
would be attributable to the coal with which the PEF is co-fired44 .

Whatever the merit for such a disposal requirement may be in the context of MWCs which mass-
burn largely unprocessed MSW (including household waste that may contain batteries and small
quantities of other hazardous household wastes), the same cannot be said for applying more
stringent MSW landfill criteria of Part 258 to ash generated by co-firing of PEF with coal where
the PEF is manufactured from materials separated or diverted from MSW, in the course of
which batteries and other hazardous materials have been removed from the PEF feedstock.

EPA's Used Oil Policies Provide Additional Support for Rationalizing the Definition of Solid
Waste in Connection with Recycling of Plastic Materials to Produce Fuels.

The NPR implicitly recognizes an additional limitation on the secondary material exclusion which
limits the exclusion to process scrap materials that have not previously been disposed. Within the
context of the petroleum industry, this limitation is not as constraining as is the case for other
materials because of EPA's used oil recycling rules. In particular, section 279. 10(e)(l) is
especially important for breaking the solid waste characterization linkage. This section provides:

(e) Materials derive from used oil.
(1) Materials that are reclaimed from used oil that are beneficially used and are
not burned for energy recovery or used in a manner constituting disposal
(e.g., re-refined lubricants) are:
(I) Not used oil and thus are not subject to this part, and
(ii) Not solid wastes and are thus not subject to the hazardous
waste regulations ....

40 CFR § 279. 10(e) (1995). This rule affords a potential additional precedent for rationalizing the
definition of "solid wastes" in other contexts.

The NPR recognizes that the regulatory limitation on the exclusion from the definition of solid
waste for secondary materials presents a special problem for the petroleum industry since fuels are
that industry's primary product. For that reason, the NPR proposes to expand the existing
exclusion for secondary materials to include reprocessing of certain petroleum wastes to produce
fuels. The special rules applicable to energy recovery from used oil, 40 CFR §§ 279.60-.66
(1995), reduced the need for the NPR in this DOCKET to address the problems created by the
limitation of the secondary materials exclusion to materials that have not been "disposed." APC
believes that any more comprehensive re-examination of the definition of solid waste, such as that
44The same issue identified in the previous footnote may also arise with respect to the Bcvill-\vaste
status of PEF/coal-ash generated by co-firing of MSW-derived PEF.

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urged by APC in these Comments, must take into account both the limitation on the definition of
secondary materials to materials that have not been disposed and the limitation which excludes
reprocessing to produce a fuel.

CONCLUSION

Currently, plastic or paper materials recovered or diverted from household wastes to produce PEF
do not qualify as exempt from the definition of solid waste. This occurs because PEF is a fuel and
the recycling exclusion that could break the household waste characterization does not extend to
reprocessing to produce a fuel. For the same reasons that EPA proposes to expand the definition
of secondary materials to include certain petroleum wastes reprocessed in a refinery to produce
fuel, EPA should likewise expand the exclusion from the definition of household wastes for plastic
materials recycled to produce a refinery feedstock or PEF.

APC supports the principles EPA relied upon in the NPR to preclude oil bearing wastes
reprocessed into fuels from being defined as solid wastes. Such wastes would be considered
secondary materials and thus exempted from the definition. APC urges EPA to use these same
principles to avoid PEF from being considered "household wastes." This would preclude the
counterproductive application of Part 258 MSW Landfill Criteria to ash from co-firing of PEF
with coal.

Response: The commenter's request is beyond the scope of the current rulemaking. The Agency's
proposal, and today's final rule, are limited to determining the regulatory status under RCRA of
oil-bearing secondary materials generated by petroleum refining and recovered oils generated by
organic chemical manufacturing facilities that are re-inserted into the refining process. The
commenter's request that the Agency expand the exclusion from the definition of solid waste for
household wastes in the case of plastic materials that are recycled to produce a refinery feedstock
or PEF, such that fuels may also be produced from pelletized or pyrolized plastics may fit more
appropriately within the scope of the Agency's ongoing development of amendments to the
current definition of solid waste and the hazardous waste recycling regulations.

In addition, any person may petition the Agency to consider granting a variance from classification
as solid waste, on a case-by-case basis, for any specific material and recycling process. Petitioners
must follow the provisions for submitting rulemaking petitions provided in 40 CFR Subpart C.
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