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Report Contributors: Kim Bryant
Katie Butler
Andrew Creath
Jeff Harris
Jeff Hart
Abbreviations
CO	Carbon Monoxide
EPA	Environmental Protection Agency
FCCU	Fluidized Catalytic Cracking Unit
GAO	General Accounting Office
H2S	Hydrogen Sulfide
ICIS	Integrated Compliance Information System
LDAR	Leak Detection and Repair
NESHAP	National Emissions Standards for Hazardous Air Pollutants
NSPS	New Source Performance Standards
NSR	New Source Review
NOx	Nitrogen Oxide
OECA	Office of Enforcement and Compliance Assurance
OIG	Office of Inspector General
OMB	Office of Management and Budget
PM	Particulate Matter
PSD	Prevention of Significant Deterioration
PART	Program Assessment Rating Tool
S02	Sulfur Dioxide
VOCs	Volatile Organic Compounds
Cover photo: Image of petroleum refinery provided by EPA staff.

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I	'%	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
1		WASHINGTON, D.C. 20460
\
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THE INSPECTOR GENERAL
June 22, 2004
MEMORANDUM
SUBJECT: EPA Needs to Improve Tracking of National Petroleum Refinery
Compliance Program Progress and Impacts
Report No. 2004-P-00021
TO:	Thomas V. Skinner
Acting Assistant Administrator
Office of Enforcement and Compliance Assurance
Attached is our final evaluation report regarding the Environmental Protection Agency's (EPA's)
national refinery compliance program. This report contains findings that describe problems and
lessons learned from the national petroleum refinery compliance program and corrective actions
the Office of Inspector General (OIG) recommends. This report represents our opinion, and
findings in this report do not necessarily represent the final EPA position. EPA managers will
make final determinations on matters in the report in accordance with established procedures.
Action Required
As the Action Official, EPA Manual 2750 requires you to provide this Office with a written
response within 90 days of the final report date. The response should address all
recommendations. For the corrective actions planned but not completed by the response date,
please describe ongoing actions and provide a timetable for completion. If you disagree with a
recommendation, please provide alternative actions for addressing the findings reported. Our
team would like to work with your staff in developing the corrective action plan. Please ask your
staff to contact Jeff Hart, Assignment Manager, at (303) 312-6169 for arrangements.
We appreciate the efforts of EPA officials in working with us to develop this report. If you or
your staff have any questions regarding this report, please contact me at (202) 566-0847 or Kwai
Chan, Assistant Inspector General for Program Evaluation, at (202) 566-0827.
L \L . ()
Nikki L. Tinsley

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Executive Summary
The Environmental Protection Agency's (EPA's) Office of Enforcement and
Compliance Assurance (OECA) selected the petroleum refinery industry as a
national enforcement priority in 1996 because refineries had the highest
inspection-to-enforcement ratio of the 29 industry sectors ranked by EPA.
The 145 operating petroleum refineries in the United States span 9 of EPA's 10
regions and 33 States. Petroleum refineries account for significant releases of
pollution into the environment. In 2001, refineries released over 35,000 tons of
toxic air pollutants, with 75 percent released to the air, 24 percent to the water,
and 1 percent to the land. These pollutants seriously impact human health and the
environment, and include pollutants known or suspected to cause cancer or other
serious human health effects.
Results in Brief
EPA and the U.S. Department of Justice have developed and implemented an
integrated refinery compliance strategy that addresses the most important
noncompliance problems. EPA's national refinery compliance program began in
1996, and over the last 8 years EPA implemented a succession of tools and
strategies as its refinery program evolved and as EPA identified specific
compliance problems. EPA's integrated strategy includes compliance assistance,
inspections, enforcement, and compliance incentives. As of March 2004, the
program resulted in refineries agreeing to invest more than $1.9 billion in
pollution control technologies, pay civil penalties of $36.8 million, and implement
supplemental environmental projects valued at approximately $25 million.
Further, EPA projects the national refinery compliance program will result in
annual reductions of approximately 44,000 tons of nitrogen oxide, 95,000 tons of
sulfur dioxide, and significant amounts of other pollutants.
However, OECA's performance measurement and reporting approach for the
national petroleum refinery program has not provided useful and reliable
information necessary to effectively implement, manage, evaluate, and
continuously improve program results. OECA has not established and
communicated clear goals, systematically monitored refinery program progress,
reported actual outcomes, or tracked progress toward achievement of consent
decree goals. In addition, during consent decree implementation, EPA delays may
have delayed emissions reductions and compromised compliance. OECA must
resolve planning issues and delays, and begin to measure outcomes, to ensure
timely emissions reductions and to optimally protect human health and the
environment, especially for people living in the vicinity of refineries.
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EPA learned several important lessons that it should apply throughout its refinery
program and consider for other enforcement and compliance assurance programs.
EPA effectively demonstrated some of these lessons learned in the refinery
program, such as focusing on specific enforcement concerns, becoming
knowledgeable about the industry, and encouraging EPA regional and
headquarters staff to effectively work together. Other lessons learned that EPA
needs to improve upon include the need to clearly communicate roles and
responsibilities, meaningfully engage stakeholders throughout the process, and
diligently oversee consent decree compliance.
Recommendations
We made various recommendations to OECA related to the development of clear
overall refinery program goals. We also made recommendations to OECA to
improve refinery consent decree implementation and tracking, and to ensure better
measurement and reporting of refinery program outcomes.
Agency Comments and OIG Evaluation
In its April 2, 2004, comments on the draft report, OECA stated that the report
will help EPA as it continues to implement the refinery program and other new
programs or initiatives. OECA also stated that the report had several significant
shortcomings. OECA agreed with 10 recommendations, disagreed with 5, and
partially agreed with 3. We made changes to the report as we determined
appropriate. We include a summary of EPA's chapter-specific comments and our
evaluation of those comments at the end of each chapter. We also provide as
Appendix G the Agency's memorandum summarizing its overall comments,
including its comments on the recommendations. Appendix H contains our
evaluation of those comments. OECA also provided us with detailed comments
as an attachment to its summary memorandum. We have posted this attachment
and our evaluation of OECA's comments on our web site at
http://www.epa.gov/oig/publications.htm.

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	Table of Contents	
Executive Summary		i
Preface 		1
Chapters
1	EPA's National Refinery Compliance Program
Evolved to Become Fully Integrated		3
2	EPA Has Not Yet Demonstrated Environmental and
Human Health Impacts of the Refinery Program		13
3	Refinery Program Lessons Learned		29
Appendices
A Details on Scope and Methodology 		35
B Key Information on U.S. Petroleum Refineries 		41
C Petroleum Refining Process Flow Chart 		45
D Refinery Releases and Effects		47
E National Refinery Program Time Line		49
F Consent Decree Process Flow Chart 		51
G EPA Comments on the Official Draft Report 		53
H OIG Evaluation of EPA Comments 		65
I Distribution 		69
iii

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Preface
Purpose of Evaluation
Enforcement and compliance assistance practices have seen considerable
innovation in recent years. The Environmental Protection Agency's (EPA's)
Office of Enforcement and Compliance Assurance (OECA) adopted a problem-
based approach to addressing environmental problems. This strategic approach
includes: (1) giving up-front consideration to which combination of tools to use
(e.g., enforcement, compliance assistance) when addressing particular
environmental problems; and (2) encouraging up-front development of measures
to assess progress and outcomes. According to an internal OECA evaluation,
prior to using its problem-based approach, OECA implemented integrated
strategies on an ad-hoc basis with limited measurable results.
The Office of Inspector General (OIG) has planned a series of environmental
enforcement evaluations with the overall objective of answering the following
question: What impact have the enforcement and compliance assurance actions,
activities, and policies of EPA and its partners had on the regulated community's
compliance with environmental requirements and on protecting human health and
the environment? At OECA's request, we agreed to first pilot-test our overall
evaluation approach on a single priority area. In consultation with OECA, we
selected the petroleum refinery priority area for this pilot evaluation and
developed objectives that would demonstrate the feasibility of our overall
evaluation approach as well as provide meaningful insight on EPA's refinery
program. Our specific objectives were to answer the following questions:
1.	What is the nature and extent of the regulated petroleum refinery universe?
2.	To what extent have EPA (OECA, other program offices, and EPA regions),
the U.S. Department of Justice, and EPA's partners (States and Tribes)
developed an integrated strategy (that considers compliance assistance,
compliance incentives, inspections, and enforcement actions) to address
priority noncompliance problems at petroleum refineries?
3.	Does the performance measurement and reporting approach for petroleum
refineries provide the information necessary to effectively implement, manage,
evaluate, and improve OECA's petroleum refinery program?
4.	Did EPA effectively implement and manage the petroleum refinery program?
5.	What lessons can be learned from OECA's petroleum refinery program?
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We address questions 1 and 2 in Chapter 1, questions 3 and 4 in Chapter 2, and
question 5 in Chapter 3.
Scope and Methodology
We conducted our evaluation of EPA's refinery program between June 2003 and
March 2004. We performed our evaluation in accordance with Government
Auditing Standards issued by the Comptroller General of the United States.
Our evaluation focused on OECA's enforcement and compliance assurance
activities at petroleum refineries from fiscal years 1996 through 2004. To answer
our five objectives, we interviewed staff and collected and analyzed data from
OECA, EPA's National Enforcement Investigations Center, EPA regions, States,
industry, environmental groups, and the U.S. Department of Justice.
See Appendix A for a detailed description of our scope and methodology,
including details on prior reviews.
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Chapter 1
EPA's National Refinery Compliance Program
Evolved to Become Fully Integrated
EPA and the U.S. Department of Justice have developed and implemented an
integrated refinery compliance strategy that addresses the most important
noncompliance problems. Petroleum refineries account for significant releases of
pollution into the environment. EPA's national refinery compliance program
began in 1996, and over the last 8 years EPA has implemented a succession of
tools and strategies as its refinery program evolved and as EPA identified specific
compliance problems. EPA's integrated strategy includes compliance assistance,
inspections, enforcement, and compliance incentives. As of March 2004, the
program has resulted in refineries agreeing to invest more than $1.9 billion in
pollution control technologies, pay civil penalties of $36.8 million, and implement
supplemental environmental projects valued at approximately $25 million.
Further, EPA projects the national refinery compliance program will result in
annual reductions of approximately 44,000 tons of nitrogen oxide (NOx), 95,000
tons of sulfur dioxide (S02), and significant amounts of other pollutants.
Petroleum represents the single largest source of energy for the United States.
Petroleum refineries span 9 of EPA's 10 regions and 33 States (there are no
refineries on tribal lands). See Figure 1.1.
Figure 1.1: Location and Number of Refineries by State and EPA Region
Background
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EPA REGION
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Map developed by
EPA Region 8
3

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Fifty-seven corporations oversaw 145 petroleum refineries operating in those
33 States as of January 1, 2003. These refineries processed a total of 16.5 million
barrels of crude oil each calendar day. See Appendix B for a complete listing of
U.S. petroleum refinery companies and key information on each.
Petroleum refineries account for significant releases of pollution into the
environment. The Clean Air Act, Clean Water Act, and Resource Conservation
and Recovery Act regulate the majority of releases at petroleum refineries. In
2001, refineries released over 35,000 tons of toxic air pollutants according to
EPA's most current Sector Facility Indexing Project data, with 75 percent released
to the air, 24 percent to the water, and 1 percent to the land. In 1999, according to
the most current data from EPA's AirData system, refineries released
approximately 243,000 tons of NOx, 396,000 tons of S02, and 412,000 tons of
other common air pollutants (also known as "criteria air pollutants").
Petroleum refining is the physical, thermal, and chemical separation of crude oil
into its major components, which are further processed into a variety of finished
petroleum products. Appendix C illustrates the complexity of the petroleum
refining process, potential releases and release points, and the major applicable
environmental regulations. For example, according to one refinery expert, an
average petroleum refinery processing 120,000 barrels of crude daily can have
100,000 connection points. Each connection point is a possible leaking emissions
source. The fluidized catalytic cracking units (FCCUs) and heaters and boilers
represent the largest refinery emitters. FCCUs use heat, pressure, and a catalyst to
break larger hydrocarbon molecules into smaller ones. FCCUs can emit several
thousand tons of NOx and S02 per year.
Petroleum refinery emissions seriously impact human health and the environment.
In 2000, OECA reported that 45 percent of all refineries at that time were within
3 miles of population centers containing 25,000 or more people, and 26 percent
were within 3 miles of population centers containing 50,000 or more people.
Appendix D provides a summary of the human health and environmental effects
of the following common air pollutants released at refineries: volatile organic
compounds (VOCs); S02; NOx; particulate matter (PM); carbon monoxide (CO);
hydrogen sulfide (H2S); and toxic air pollutants. Toxic air pollutants include
pollutants known or suspected to cause cancer or other serious human health
effects.
Refinery Program Uses an Integrated Strategy
OECA's current refinery program incorporates various tools and strategies as part
of an integrated effort to address the most important compliance problems. Using
research, investigations, and national EPA experts, EPA identified four priority
areas that addressed the most important noncompliance areas in the industry.
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EPA also used compliance assistance and incentives to educate the industry and
address noncompliance.
Identifying Priority Areas
During the initial stages of the program, OECA and regional officials used
multiple sources of information to identify refinery priority areas. These sources
included inspections, formal EPA information requests to refineries, and industry
trade journals. OECA and regional officials shared with each other the results of
these initial research efforts and began to focus (or target) investigations on the
noncompliance areas indicated by their research. EPA's national experts
continued gaining experience regarding compliance issues within the refinery
industry, and helped select the four Clean Air Act priority areas that became the
refinery program's focal point. State, refinery industry, and environmental
interest groups generally agreed that these four priority areas represented the most
important noncompliance problems at petroleum refineries:
1.	New Source Review (NSR) / Prevention of Significant Deterioration (PSD)
2.	Flaring / New Source Performance Standards (NSPS)1
3.	Leak Detection and Repair (LDAR)
4.	Benzene Waste National Emissions Standards for Hazardous Air Pollutants (NESHAP)
Figure 1.2 briefly describes the primary problems, related regulations, and
solutions EPA and the refineries agreed to implement for each priority area. The
agreement between EPA and refiners resulted in consent decrees that primarily
focused on these four priority areas.
1 The refinery program addressed two different flaring programs: the elimination of acid gas
flaring; and the reduction of hydrocarbon flaring. The NSPS priority focused on ensuring that
companies complied with NSPS at their recovery plants, flares, and fuel gas combustion devices.
5

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Figure 1.2: Problems, Related Regulations, and Solutions for Priority Areas
Flaring/NSPS
Problem: Refineries used flares for routine purposes instead of only to vent dangerous gases as
required by the Clean Air Act. Also, EPA identified problems with NSPS compliance at sulfur recovery
plants and fuel gas combustion devices.
Regulation: CAA Section 111. 40 CFR Part 60, Subparts A and J.
Solution: Consent decrees require facilities to: identify root causes of each flaring incident; implement
plans to address root causes such as installing new equipment, revising operating procedures, or
providing training; comply at all times for all sulfur recovery units within the plant; install new sulfur
recovery units and tail gas controls devices to ensure compliance with emissions standards and good air
pollution control practice obligations.
LDAR
Problem: EPA found that fugitive emissions, or
refinery leaks, were two to ten times higher
than reported by the facility. If uncorrected,
facilities continued to release fugitive emissions
of VOCs and other hazardous air pollutants.
The cumulative effect of fugitive emissions
posed significant health and environmental
risks.
Regulation: CAA Section 112. 40 CFR Part
61, Subpart J; Part 63, Subparts H and CC; and
Part 60 Subparts VV, GGG, and QQQ.
Solution: Consent decrees require facilities to
identify VOC leaks at an earlier stage than that
required by regulations and make repairs before
emissions become significant. Other solutions
include more frequent monitoring, lower leak
rate goals refinery-wide, and use of innovative
monitoring technologies for monitoring VOCs.
As an "enhanced" program, the LDAR program
includes requirements that bring a company
beyond compliance with applicable regulations.
NSR/PSD
Problem: Relatively few refineries
obtained pre-construction and operating
permits for physical construction that
increased their capacity and emissions.
Capacity increases and modifications
should have triggered NSR permitting and
pollution control requirements.
Investigations focused on physical
modifications to FCCUs.
Regulation: Parts C and D of Subchapter I
of CAA. 40 CFR Parts 51 and 52.
Solution: Consent decrees require
petroleum refineries to install continuous
emissions monitoring equipment so that
facilities, EPA, and States can access real-
time emissions data. More importantly,
consent decrees also require facilities to
install and implement a suite of controls to
reduce NOx, S02, and PM emissions.

	
Benzene Waste/NESHAP
Problem: Investigations showed that refineries did not account for or control benzene in all waste streams (e.g., groundwater and process sewers).
Short-term exposure to benzene can cause temporary nervous system disorders, immune system depression, and anemia, while long-term exposure can
cause chromosome aberrations and cancer.
Regulation: CAA Section 112 (d). 40 CFR Part 61, Subpart FF.
Solution: Consent decrees require increased monitoring, regular laboratory and program audits, quarterly benzene balances, and replacement of
carbon emission filters as soon as monitoring detects any benzene emissions above background levels. As an "enhanced" program, the benzene
waste/NESHAP priority includes requirements that bring a company beyond compliance with applicable regulations.
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Compliance Assistance and Incentives Provided in Various Forms
OECA conducted various compliance assistance and incentive activities
including:
Making presentations at industry
conferences describing
noncompliance issues.
Definition of Compliance Assistance
Activities, tools, or technical assistance that
help the regulated community understand
and comply with environmental regulations or
Developing and disseminating
Enforcement Alert newsletters on
each of the four refinery priority
areas.
help other compliance assistance providers
aid the regulated community.
Definition of Compliance Incentive
Policies and programs that eliminate, reduce;
or waive penalties under certain conditions.
Developing two compliance assistance guidance documents; one to help
increase understanding of the Refining Maximum Achievable Control
Technology Standard, and another to improve understanding of regulations
covering benzene waste and transfer operations.
Developing the slotted guidepole initiative that provided a compliance
incentive for refinery companies to install controls within specific time frames
to address emissions from petroleum storage tanks. If companies complied
with their schedules for installing acceptable controls, EPA would eliminate
penalties.
Four Basic Phases Noted in National Refinery Compliance Program
EPA's national refinery compliance program began in 1996 and evolved as EPA
learned more about the noncompliance issues and applied a variety of tools and
strategies to address those issues. While OECA did not specifically outline a
phased program or develop a comprehensive master plan, in reviewing the
strategy, it appeared that four phases emerged. We used these phases to facilitate
our description of the refinery program. In many instances, activities overlapped
as one phase continued while a new phase began. Appendix E provides a detailed
time line of the refinery program's evolution.
Phase I: Refineries Become a National Enforcement Priority
EPA had long conducted inspections and taken enforcement actions in the refinery
industry. OECA began to focus significant attention on refinery compliance
concerns in 1996 when refineries became an enforcement priority due to the
industry's high rate of noncompliance and pollutant releases. OECA reported in
1996 that the refining sector had the highest inspection-to-enforcement ratio of the
29 industry sectors ranked by EPA. In 1996, when compared to 496 other sectors,
OECA ranked refineries number one for releases of VOCs, number two for S02,
number three for N02 (a particular type of NOx), number four for PM10
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(a particular type of PM), and number five for CO releases. In its 1996/1997
Memorandum of Agreement guidance, OEC A ranked petroleum refineries
number one for noncompliance and identified petroleum refining as one of three
national enforcement priorities. The Memorandum of Agreement guidance
generally sets forth the Agency's enforcement and compliance assurance priorities
and activities for a 2-year period. Designation as an OECA enforcement priority
meant that an industry received special emphasis. OECA maintained refineries as
a national priority and began working with regional officials to explore ways to
address compliance issues.
Phase II: Program Uses Investigations to Identify Significant
Compliance Problems
Although EPA identified refineries as a national priority, OECA officials said they
did not see significant improvement in the regional approach to addressing
compliance issues during 1996 and 1997. According to a senior OECA official,
after 2 years of typical regional inspections of the refinery industry, the
inspections did not identify significant national problems. However, OECA
obtained anecdotal information from OECA's National Enforcement
Investigations Center and regional investigations regarding problems at refineries.
OECA determined that it needed a more comprehensive approach to help assess
the extent of compliance problems identified in a few regions. OECA began
coordinating with the National Enforcement Investigations Center and regional
staff who were developing expertise regarding compliance issues at refineries.
The anecdotal information caused OECA to shift its focus from routine Clean Air
Act inspections that broadly assessed refinery compliance using checklists, to
more targeted, resource-intensive investigations. These investigations focused on
assessing emissions released from certain industrial processes as opposed to
compliance with specific statutory requirements, and identified problems not
found during typical inspections. OECA officials stated that this phase of the
refinery program was extremely successful at developing new targeting and
investigative tools.
Phase III: Program Shifts to Pursue Global Settlements
In 2000, OECA shifted the refinery program focus to pursue voluntary global
settlements with refinery companies that resulted in consent decrees.2 OECA and
regional officials coordinated with the U.S. Department of Justice who took the
lead on all of the global settlement negotiations. OECA referred to these
settlements as "global" because they applied to all facilities owned by one
company. OECA's approach presented corporate officials with the option of
avoiding possible investigation and litigation. OECA's strategy included
2 OECA found success with global settlements in other industries. However, OECA officials
stated that their prior experience related to a much narrower set of issues and on a much smaller
scale than what they achieved under the national refinery compliance program.
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coordinating with interested States and local authorities. States that signed
consent decrees had their own legal claims against the settling refineries and
received a share of the penalties paid by companies. Along with EPA and the
U.S. Department of Justice, 18 States or local authorities have signed consent
decrees as of May 21, 2004. Beginning in 2002, OECA began to shift its
emphasis from pursuing new negotiations to concluding on-going investigations
and negotiations, since over 80 percent of the domestic refining capacity universe
had entered into global consent decrees, was in negotiations with EPA, and/or was
under active investigation. As part of the shift in emphasis, OECA planned for
regions and States to assume larger roles with new investigations and
negotiations.
Phase IV: Consent Decree Implementation Initiated
Implementation of refinery consent decrees began a new and additional phase.
The first two consent decrees entered the implementation phase in early 2001.
The consent decrees span 8 to 10 years and require coordination and
communication among OECA, EPA regions, States, and industry. While the
signing of a consent decree ends the settlement process for that company, it begins
a new process of oversight and interaction by and between the parties. As of
2004, OECA continues to conduct negotiations, assist regions in assuming a
larger role with the refinery program, and work with refiners to implement
consent decrees.
Settlements Projected to Result in Significant Emissions Reductions
By March 2004, OECA had entered into 11 global settlements or consent decrees
covering 42 of the 145 refineries. As shown in Table 1.1 below, the settlements
covered 39 percent of total U.S. petroleum refining capacity.3
3 Table 1.1 represents the settlements on the date of their entry by the Court. Since that date,
companies may have sold some of their refineries and, while those refineries remain subject to the
global settlements, they may be owned by separate refining entities. Consequently, this table may
not easily reconcile with the information in Appendix B.
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Table 1.1: Refinery Companies in Global Settlements
Company
Date Company
Signed
Settlement with
OECA
Number
of
Refineries
Production
Capacity
(barrels per
cal. day)
Total U.S.
Production
Capacity
Koch Petroleum Group
December 2000
2
524,980
3%
BP Exploration and Oil, Co.
January 2001
8
1,501,500
9%
Motiva Enterprises LLC/ Equilon
Enterprises/Deer Park Refining
(Shell)
March 2001
9
1,682,150
10%
Marathon Ashland Petroleum LLC
May 2001
7
935,000
6%
Navajo Refining Company and
Montana Refining Company
December 2001
2
65,000
0.4%
Conoco, Inc.
December 2001
4
566,000
3.4%
Lion Oil
March 2003
1
63,000
0.3%
Chevron USA Inc.
October 2003
5
909,000
5.5%
CHS Inc. (Cenex)
October 2003
1
55,000
0.4%
Coastal Eagle Point Oil Co.
October 2003
1
142,287
0.9%
Ergon Refining Inc.
October 2003
2
42,400
0.3%
Total Refineries under Decrees (Listed Above)
42
6,486,317
39%
Total Refineries Not under Decrees
103
10,271,053
61%
TOTALS
145
16,757,370
100%
Based on settling companies' estimates, once companies fully implement the
consent decrees, they will achieve annual reductions of atmospheric emissions of
approximately 44,000 tons of NOx and 95,000 tons of S02, as well as reductions
in benzene, VOCs, and PM. The settling companies agreed to invest more than
$1.9 billion in pollution control technologies and pay civil penalties of
$36.8 million (OECA based penalties on violations related to the four priority
areas). These refineries also agreed to implement supplemental environmental
projects valued at approximately $25 million.
A key aspect of OECA's global settlements with refinery companies included
EPA's "release" or "covenant not-to-sue." As part of the consent decrees, EPA
provided companies a release from liability for any past regulatory violations
(those that pre-dated the consent decree) associated with the four priority areas.4
4 In legal terms, OECA officials stated that, under the consent decrees, a company typically
receives a covenant not-to-sue. The covenant not-to-sue directly related to the scope of injunctive
relief. Where a company agreed to implement a comprehensive program of injunctive relief that
will bring it beyond compliance with all aspects of the NSPS and benzene leak detection
regulations, EPA and the U.S. Department of Justice extended a covenant not-to-sue regarding all
aspects of that company's pre-consent decree compliance with those regulations. In contrast,
under a consent decree, a company receives a covenant not-to-sue for NSR/PSD and NSPS for
only those emission units specifically addressed by the consent decree.
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The global settlements also relieved OECA from having to conduct resource-
intensive investigations at each refinery a company owned. According to OECA,
a refinery-by-refinery, issue-by-issue approach, in which EPA conducted an
individual inspection or investigation at each and every refinery followed by
information requests, notices of violation, negotiations and/or litigation, could
take many years and require resources beyond EPA's means.
The refinery consent decrees require each company to take various actions over
the next several years. These actions include implementing air pollution controls
as well as developing policies and procedures that go beyond compliance with
existing regulations. As shown in Table 1.2, both the LDAR and benzene priority
areas require companies to incorporate "enhanced" practices beyond regulatory
requirements. In addition, OECA and the companies agreed to test and use
innovative technologies.
Table 1.2: Examples of Consent Decree Requirements
Priority Area
Requirements in Consent Decrees
NSR/PSD
 Install controls and Continuous Emissions Monitoring Systems to reduce
and measure SOz, NOx, PM, and CO from FCCUs, heaters, and boilers.
Flaring/NSPS
	Implement program to investigate the cause of flaring incidents.
	Conduct root cause analyses and take corrective actions.
	Requires NSPS compliance at refinery's flares, sulfur recovery plants, and
fuel gas combustion devices.
	Install new sulfur recovery units and tail gas control devices to ensure
compliance with emissions standards and good air pollution control
practices.
LDAR
	Implement enhanced monitoring program.
	Train all refinery LDAR personnel annually.
	Train all other refinery operations and maintenance personnel on aspects
of LDAR relevant to the employee's duties.
	Monitor valves more frequently than regulations require.
Benzene
	Train all employees who draw benzene waste samples.
	Establish standard operating procedures for all control equipment used to
comply with the benzene waste NESHAP.
	Train all equipment operators on procedures.
	Audit all laboratories that perform analyses of benzene waste NESHAP
samples.
Conclusion
EPA and its partners developed and implemented an integrated strategy that
included compliance assistance, compliance incentives, inspections, and
enforcement actions. EPA staff implemented a succession of tools and strategies
as the program evolved. OECA's integrated strategy addresses the most important
noncompliance problems at petroleum refineries. A significant phase and turning
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point in the refinery program's evolution came with the negotiation of voluntary
global settlements. These settlements resulted in consent decrees between OECA
and refinery companies owning multiple facilities.
Agency Comments and OIG Evaluation
OECA stated that the background discussion in this chapter was vague and, at
times, did not demonstrate an understanding of the refinery program. OECA
stated that the background information implied that they directed the refinery
program at all pollutants from refineries. In our opinion, the background
information in this chapter provides a broad overview of the refinery industry,
including some of the major processes, releases, and health and environmental
impacts caused by refining. It describes the refinery industry as a whole and puts
in perspective why EPA decided to monitor and address noncompliance within
this industry. This chapter also describes how the refinery program focuses on
four priority areas under the Clean Air Act and how the refinery program could
reduce specific pollutants through companies' effectively implementing consent
decrees.
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Chapter 2
EPA Has Not Yet Demonstrated Environmental and
Human Health Impacts of the Refinery Program
OECA's performance measurement and reporting approach for the national
petroleum refinery program has not provided useful and reliable information
necessary to effectively implement, manage, evaluate, and continuously improve
program implementation and results. OECA has not established and
communicated clear goals, systematically monitored refinery program progress,
reported actual outcomes, or tracked progress toward achievement of consent
decree goals. In addition, during consent decree implementation, EPA delays may
have delayed emissions reductions and compromised compliance. OECA must
resolve planning issues and delays, and begin to measure outcomes to ensure
timely emissions reductions and to optimally protect human health and the
environment, especially for people living in the vicinity of refineries.
Program Lacked Clear Goals, Performance Measurement, and
Outcome Reporting
OECA has not established clear program goals, performance measures, or a
reporting system to track progress. Clear goals, performance measures, and a
reporting system are essential to ensure that program managers have a systematic
approach for gathering performance information for effective decision making.
OECA has not clearly and precisely defined official program goals, used
performance measures to manage the refinery program, or reported actual
environmental outcomes.
Clear Goals, Performance Measures, and Reporting Essential
Clear program goals, performance measures, and a reporting system to track
progress are all essential to effectively implement, manage, evaluate, and improve
any program. Government programs need a systematic approach for gathering
performance data and reporting progress toward goals to ensure that program
managers and Congress have performance information for decision making.
The Office of Management and Budget's (OMB's) fiscal 2004 budget proposal for
EPA stated that one of EPA's top two challenges included, "Tracking and
demonstrating programs' effectiveness in achieving public health and ecosystem
protection goals." To help improve program and funding decisions, OMB
evaluated 11 EPA programs, including the civil enforcement program (which
includes the refinery program), using OMB's Program Assessment Rating Tool
(PART). OMB developed the PART to provide a consistent approach to
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evaluating Federal programs during budget formulation. OMB found that the
absence of outcome-based performance data and, in some cases, any data,
hindered the Agency in evaluating the impacts of its programs on the environment
and public health. OMB recommended that EPA establish performance measures
focused on outcomes and efficiencies.
EPA agreed on the need to focus on program results and to use such data in
decision-making, but EPA appealed OMB's PART evaluation results. The
Deputy EPA Administrator said in a November 6, 2002, memo that, "One of my
goals as we implement the President's Management Agenda is to ... continuously
improve the results orientation of our programs and inform our decision-making
with high-quality information on program performance." However, the Deputy
Administrator also concluded that the PART instrument and process needed
dramatic overhaul to have any real value.5
EPA faces a challenge in the next few years to improve the linkage between its
program results and budget resources, which includes developing program
measures. We found OMB's findings and observations concerning EPA's civil
enforcement program generally consistent with what we specifically found
concerning the refinery program.
In fiscal 2004, OECA began moving toward a more performance-based approach
to program management as described in its December 18, 2002,
Recommendations for Improving OECA Planning, Priority Setting, and
Performance Measurement. The Assistant Administrator for OECA decided that
OECA should develop a performance-based approach for national priorities such
as the refinery program. OECA's Recommendations document stated that
strategies "... should always include ... a goal or set of goals and performance
measures that allow progress to be assessed...," and "these elements should be in
place before the implementation period ... begins."
Program Goals Not Clearly Defined
OECA has not clearly and precisely defined official program goals, or ensured
that everyone working on the refinery program in EPA headquarters and regional
offices and State offices have the same understanding of the goals. Different
OECA officials referred to different goals and measures for the refinery program
at different times. Table 2.1 summarizes various goals we identified for OECA's
refinery program.
5 We did not assess the PART tool or OMB's application of the tool.
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Table 2.1: Various Refinery Program Goals
Goal
Source
 Develop innovative approaches to achieve
increased compliance within the industry
sector priorities
Fiscal Year 1996/1997 OECA
Memorandum of Agreement guidance
(National Priority Sector)
	Reduce emissions from refineries
	Bring the refineries into long-term compliance
(with the issues investigated)
	Ensure more consistent interpretations and
enforcement of regulations
Fiscal Year 1998 OECA Accomplishments
Report (Refinery Strategy)
	Obtain significantly reduced emissions/
discharges/releases by 20 percent
	Obtain substantially improved compliance
rates by 50 percent
OECA National Sector Strategies
document - not dated (National Sector
Strategy)
 Significantly improve the industry compliance
rate and reduce the total emissions that
resulted from noncompliance
Fiscal Year 2001 OECA Accomplishments
Report (Refinery Strategy)
 Address 100 percent of refineries either
through consent decrees or other enforcement
actions
2003 and 2004 interviews with senior
OECA managers
OECA managers and staff did not agree on program goals. Throughout our
evaluation, they cited multiple goals listed in Table 2.1, and did not formally
assess their progress toward meeting any of these goals. For example:
OECA officials said Memorandum of Agreement documentation served as
updates to the strategy. However, during our field work, OECA officials said
that either the Memorandum of Agreement documents contained inaccurate
information or that they were not familiar with that information.
While some managers stated that the 50-percent and 20-percent goals were the
official program goals, other OECA managers disagreed.
While some managers stated that EPA had met the 50-percent and 20-percent
goals, officials could not provide specific data to support their conclusion.
Two OECA senior executives told us that establishing and tracking an overall
program goal for the refinery program, or any other program, would require
additional resources. Both said that it was more important to use their limited
resources to take additional enforcement actions (e.g., seek additional consent
decrees) than it was to measure progress toward program goals. We believe that
without clear and well-defined program goals, it was difficult for OECA to
identify appropriate performance measures and track progress.
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Performance Measures Not Used to Manage Program
Although OECA developed some performance measures, it has not used them to
manage the refinery program. For example, while one early OECA strategy
document included nine goal areas and more than 50 separate output or activity
measures, OECA did not track or communicate progress toward these goals.
Performance information should feed back into the management of the refinery
program, but OECA could not take advantage of such feedback because OECA
lacked a formal system for capturing this information. OECA agreed and intends
to use appropriate performance measures and outcomes as part of the fiscal 2005
priority planning process.
In lieu of performance measures to manage the program, OECA officials held
national meetings and scheduled monthly conference calls with regional staff to
review program progress and discuss regional commitments to support the
strategy. In addition, OECA and regional staff formed issue-specific work groups
to develop investigative tools, discuss issues, and devise solutions. Senior OECA
officials stated that they also tracked program-related activities through regular
telephone and electronic mail communications and "status of activities" charts.
However, an OECA official acknowledged that OECA had not tracked or
disseminated data for most of the activity or output measures OECA established.
Reporting Systems Not Focused on Environmental Outcomes
Refinery program reporting focused on projected rather than actual environmental
outcomes. OECA reported program results in two ways:
Press Releases. OECA used press releases to communicate the signing of
consent decrees to the public. Press releases reported the projected emissions
reductions at full implementation of consent decrees (consent decrees lasted
8 to 10 years) and the dollars companies agreed to pay in penalties as a result
of consent decrees. OECA management did not plan to issue press releases or
other reports to the public detailing the actual measured outcomes of consent
decree implementation because OECA management did not believe the press
would be interested.
Reporting to Congress. EPA used the Integrated Compliance Information
System (ICIS) to report EPA enforcement program results to Congress under
the Government Performance and Results Act. For refinery consent decrees,
OECA input data into ICIS representing (1) the projected annual emissions
reductions that would be realized once implementation was complete, (2) the
dollar amount of penalties generated, and (3) the dollar value of required
supplemental environmental projects. According to OECA, ICIS reporting
was not designed to capture, and did not capture, information about
environmental outcomes from the consent decrees, such as demonstrated
environmental and human health benefits.
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EPA used three systems to collect information on consent decree implementation:
Company data collection through consent decree reports.
Monthly conference calls between EPA managers and staff working on
consent decree implementation (described above).
Contractor-developed consent decree tracking system (described in detail later
in this chapter).
However, EPA did not use these systems to demonstrate progress toward meeting
consent decree goals. Consent decrees required companies to provide quarterly
reports that included actual emissions data related to NSR and PSD issues - the
most significant sources of refinery emissions reductions in consent decrees.
OECA used the information to set some emissions limits that consent decrees did
not specify. However, OECA did not use this information to monitor, verify, or
report progress toward achieving consent decree goals.
OECA Has Not Tracked Progress Toward Consent Decree Goals
OECA should closely and regularly track actual emissions reductions and progress
toward consent decree goals for three reasons: (1) refineries have a history of
noncompliance (described in Chapter 1); (2) refineries emit toxic chemicals that
affect human health and the environment (see Appendix D); and (3) some
information used to develop consent decree emissions limits were based on
estimates - facility estimates, pollution control equipment estimates, or both.
OECA officials do not plan to regularly verify or monitor actual refinery
emissions. A national OECA refinery expert said OECA would use emissions
data to assess progress at 4 years into consent decrees and at the conclusion of the
decrees. However, two monitoring events over 8 years will not provide OECA
with information about company or overall refinery program progress toward
predicted emissions reductions, and would limit OECA's ability to modify and
improve existing consent decrees or ongoing negotiations.
Through consent decrees, EPA sets compliance schedules and emissions reduction
goals for companies. OECA officials said company self-certification processes
assured them that companies remained on their compliance schedules. Consent
decrees require companies to demonstrate that they reach emissions reductions
goals by the fourth year of consent decree implementation. However, during our
evaluation, EPA could not demonstrate progress toward meeting emissions
reductions goals in any priority area, as shown in Table 2.2, because EPA did not
analyze information about company progress toward emissions reductions.
Table 2.2 shows compliance status as "on a compliance schedule per consent
decree requirements" and emissions status as "currently unknown" because
OECA lacked data that demonstrated compliance or emissions status at the time
of our evaluation.
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Table 2.2: Current Status of Compliance and
Emissions Reductions in the Priority Areas
Priority
Area
Current
Compliance
Status
Progress Toward
Emissions
Reductions
Potential
Measurement
Data/Sources
Issues Associated with Measures
NSR/PSD
On a
compliance
schedule per
consent
decree
requirements
Currently unknown
Monitoring data
reported to
OECA on a
quarterly basis;
4- and 8-year
assessments
OECA is not assessing emissions
reductions in this area on an ongoing
basis. OECA could use actual
monitoring data to establish limits and
analyze catalyst tests, but companies
need not demonstrate emissions
reductions until the fourth year of a
consent decree.
Flaring/
NSPS
Reaching
compliance
Currently unknown;
although National
technical lead for
flaring documented
a decline in flaring
events from 1998
through early 2004.
Flaring Root
Cause Analyses
Companies do not measure the
constituents of flare emissions.
Companies provide OECA root cause
analysis reports for each flaring
incident that OECA can then use to
measure the number of flaring
incidents. From the reports, OECA can
estimate the pollution resulting from the
flaring event.
LDAR
Benzene
On a
compliance
schedule per
consent
decree
requirements
Currently unknown
State
Inspections,
company
monitoring data,
AP-426 and other
estimated data
Many States were not advised to track
the area and others were not tracking
due to implementation delays. OECA
must rely on company-developed
sampling and monitoring plans, and
4-year company-supplied audits.
OECA indicated that OECA and States share responsibility for ensuring consent
decree implementation and verifying refinery emissions. However, an OECA
executive acknowledged that headquarters had not provided guidance to States or
EPA regions indicating that inspections should take the four priority
noncompliance areas into account. EPA and State staff did not generally include
the priority noncompliance areas in typical Clean Air Act inspections. These
factors left little assurance that EPA or States would verify self-reported company
progress under consent decrees.
Late and Absent EPA Responses to Consent Decree Documents
May Have Delayed Program Outcomes
Refinery program outcomes will depend on successful consent decree
implementation. Late and absent EPA responses to company consent decree
documents may have delayed company implementation of projects designed to
reduce emissions and compromised compliance. EPA delays developed as soon
6 AP-42 estimates are emission factors used to estimate emissions from a source when more
reliable emissions data are not available. The emission factors used to develop AP-42 estimates
are known to have limited accuracy.
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as the implementation phase began, and persisted because OECA did not
effectively plan how it would manage and monitor consent decree
implementation. OECA took steps that reduced but did not eliminate the delays,
and did not take steps to address the delays in a timely fashion.
Program Outcomes Depend on Implementation
OECA needs to accurately track hundreds of consent decree milestones to ensure
that companies comply with consent decree requirements and that expected
emissions reductions actually occur. Appendix F provides a detailed flow chart of
the consent decree process. As depicted in the flow chart, after a company signs a
consent decree and the court enters the decree, the implementation phase of the
consent decree begins. After any necessary EPA review and approval, the
company is expected to take the required actions that should result in reduced
emissions and improved environmental conditions.
OECA's plan for monitoring consent decree implementation called for EPA's
written responses to the hundreds of refinery documents and reports required by
the consent decrees. Table 2.3 shows the types of company reports required by
consent decrees and identifies those reports requiring EPA responses.
Table 2.3: Examples of Consent Decree-required
Company Reports and Required EPA Responses
Priority Area(s)
Type of Company Report Required
EPA Response
Required?
NSR/PSD
Reports on intended design of major pollution control
equipment
Yes
Reports on testing and optimizing pollution controls
Flaring/ NSPS
Root cause analysis reports for illegal acid gas flaring
incidents
Yes
Flaring/ NSPS
and any other
violations
Stipulated penalties for consent decree violations
(particularly flaring)
Yes
Benzene
Reports on implementing pollution abatement
procedures and policies
Yes
Sampling reports
No
LDAR/
Benzene
Audit reports
No
All
Progress reports and quarterly reports
No
Late EPA Responses Delayed Implementation Activities
and Compromised Compliance
We found that EPA issues the majority of its responses either late or not at all.
Late and absent EPA responses delayed company implementation of projects
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designed to reduce emissions and compromised company compliance with
consent decrees. Figure 2.1 shows the timeliness of responses EPA issued and
reports provided by companies (these data were only available for July and
October 2003). Figure 2.2 shows the number of required EPA responses and the
number of responses EPA issued for July 2003, October 2003, and January 2004.
Figure 2.1: Timeliness of EPA Responses and Company Reports
Mandated by Consent Decrees for July 2003 and October 2003
223
~	Total Responses Issued
~	Total Responses Late
~	Average Days Late per Response
~	Company Days late
239
96
91
131 128
-8
July
October
Figure 2.2: Number of EPA Responses Issued Compared with
Number of EPA Responses Not Issued per Consent Decree
Requirements in July 2003, October 2003, and January 2004
(A

(A
C
o
Q.
(0
a>
O.
a>
.a
E
500
400
300
200
100
0
421
96
July
~	Total Responses Not Issued
~	Total Responses Issued
237
131
October
108
271
January
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We reviewed information from nine consent decrees well into implementation to
determine the extent and potential impacts of EPA response delays. We reviewed
information as of July 2003, October 2003, and January 2004. On average, the
consent decrees in our analysis required companies to submit a total of 2,191
reports (or 243 reports per company) requiring 421 EPA responses (or
approximately 47 responses per company) over the 8-year terms of their consent
decrees.
On average, late EPA responses delayed consent decree implementation by nearly
8 months between July 2003 and January 2004. In some cases, companies
proceeded with consent decree actions while awaiting EPA approval. In other
cases, companies awaited EPA responses before taking actions. OECA
management said they kept abreast of implementation activities through regular
conference calls with consent decree implementers.
Figure 2.3 demonstrates that most late and absent EPA responses related to
flaring/NSPS incidents (60 percent) and benzene handling or LDAR requirements
(29 percent).
Figure 2.3: Required EPA Responses by Priority Area
Benzene and
LDAR
29%
Other NSR and PSD
4%	7%
Flaring and NSPS
6 0%
To date, consent decree implementation is not complete and we did not discover
any instances where response delays affected emissions reductions during the
course of our evaluation. However, regional staff, State staff, and refinery
company staff told us that EPA response delays might affect some company
actions under consent decrees. For example:
Acid Gas Flaring: In one consent decree, as of January 2004, EPA
responded to 22 of 23 acid gas flaring reports an average of 273 days
(9 months) late. OECA staff acknowledged that problems could arise if
EPA did not respond to a company's acid gas flaring root cause analysis
report. If a company did not correctly identify a root cause and EPA did
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not respond in a timely fashion, companies might take inadequate
corrective actions, and unnecessary emissions may have resulted.
NOx Control: One EPA consent decree press release stated that the decree
would reduce the company's NOx and S02 emissions by 50,000 tons each
year. As of January 2004, EPA issued its response to 5 of 13 NOx control
plans. For the three responses EPA issued that listed a company report
date, EPA waited approximately 174 days (about 6 months) between
receiving the company report and issuing a response. As of January 14,
2004 (the date we last received the data), EPA had not approved the
company's eight other plans. As a result, EPA had waited at least 478
days (approximately 16 months) between receiving the company reports
and responding to them. These delays could have resulted in continued
emissions of tons of NOx to the surrounding community.
Late and absent EPA responses may have compromised company compliance
with consent decrees. EPA company leads said that, in most cases, companies
continued along their implementation schedules even if OECA did not issue
required responses to reports. In other cases, companies may have awaited EPA
responses before taking consent decree actions. Delays in EPA responses caused
one company to express concerns about remaining in compliance. The company
questioned its compliance status in a July 31, 2003, quarterly report to EPA
stating: "It is critical that [the company] receive responses from the EPA ... to
ensure compliance [with] ... the consent decree . . . [The company] is still
awaiting EPA's comments."
Tracking Problems Developed and Persisted
Delays developed as soon as the implementation phase began and companies
began submitting reports to EPA. EPA responded late to refinery documents and
reports 95 percent of the time as of July 2003, and 98 percent as of October 2003.
Because OECA eliminated tracking for due dates between October 2003 and
January 2004, we could not determine timeliness for company reports or EPA
responses after October 2003.
OECA quickly found that it did not have the resources to efficiently address all of
the company reports arriving at EPA headquarters, particularly since several
consent decrees had similar implementation schedules. In the face of the growing
document delays, OECA introduced an implementation plan and hired a
contractor to help with implementation tracking in January 2002. The
implementation plan outlined responsibilities for EPA headquarters, regional
staff, national technical leads, company leads, and external contractors, as shown
in Table 2.4.
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Table 2.4: Key Roles and Responsibilities for Consent Decree Implementation
Actor
Role/Responsibilities
EPA Company
Lead (1 Lead per
consent decree)
Each consent decree has a lead staff member who ensures timely review
of deliverables and implementation of all consent decree requirements.
EPA National
Expert
(4 National
Experts)
Each priority area covered by consent decree has a national expert (also
known as national technical lead) who ensures national consistency across
all refinery consent decrees. EPA national experts also provide support to
regional staff on specific priority areas.
EPA Regional
Staff (number of
staff varies by
region)
Regional staff responsible for consent decree implementation review all
company submissions directly involving their priority area and/or refinery,
recommend any necessary action, and coordinate with affected States as
appropriate.
Contractor
Tracking contractor tracks consent decree deliverables and EPA's
responses to deliverables. A separate analysis contractor provides support
in evaluating control technology performance and setting appropriate
emissions limits under NSR/PSD regulations.
OECA
OECA's Air Enforcement Division makes determinations, issues approvals,
transmits comments, establishes emissions limits, and assesses stipulated
penalties based on consultations with appropriate company leads, national
experts, and regional staff.
The contractor developed an archive, a list of required deliverables, and a
document tracking system in close coordination with the EPA company leads by
late 2002. Meanwhile, the delays had grown as national technical leads attempted
to approve each individual EPA response, and OECA reported that its success
with obtaining settlements in the refinery sector had created a significant resource
drain. Company leads in EPA regions developed and maintained their own,
personal tracking systems and did not use the contractor's system to track
implementation.
OECA Took Steps to Address Problems But Did Not Eliminate Them
During our evaluation, OECA recognized that the document tracking delays
caused implementation problems and took steps that reduced but did not eliminate
the delays. OECA and regional EPA staff cited the requirement that four national
technical leads review each response and the Air Enforcement Division Director's
required approval as the reasons for delays.
OECA attempted to address the delays by training implementers, reallocating
staff, and making changes to consent decree design and implementation
requirements. For example, in a more recent consent decree, EPA required just
5 company reports and no EPA responses, compared with an average of 243
company reports and 47 EPA responses for the 9 consent decrees in our analysis.
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OECA managers told us they disagreed with the contractor's interpretation of
which items in consent decrees required an EPA response; OECA managers
determined that the contractor-developed system included hundreds of items that
did not require tracking. Between July and October 2003, OECA eliminated
requirements for 149 EPA responses, and eliminated tracking of the timeliness of
both company reports and EPA responses from the tracking system. On the
January 7, 2004, company lead conference call, OECA management and company
leads agreed to use the contractor's system as the principal tool for managing and
tracking consent decree implementation. Because OECA eliminated tracking of
timeliness, we could not determine the impact the changes had on EPA response
time. Also, OECA could not use the tracking system to determine the timeliness
of company reports or EPA responses.
OECA did not accurately assess the resources required for consent decree
implementation. EPA planning guidance stresses assessing the skills and number
of personnel needed to implement programs. More accurate planning that
accounted for the specific monitoring and management requirements of each
signed consent decree could have enabled OECA to avoid the document tracking
delays, delays in EPA responses, and confusion about compliance. OECA
management and national technical leads familiar with the four priority areas
when they negotiated consent decrees should have more accurately assessed the
resources required to monitor and implement the steps outlined in consent
decrees. Identifying resource needs during the planning phase would have
highlighted resource limitations and EPA could have corrected problems before
they caused delays in implementing the program.
Conclusion
OECA did not clearly and precisely define official program goals and measures,
or ensure the goals were consistently shared and clearly understood. Because
refineries emit toxic chemicals, they should be closely and regularly monitored for
compliance. Although OECA officials used informal methods to track program
progress, OECA would benefit from using more formal mechanisms to track and
measure progress toward consent decree and overall refinery program goals.
Implementation problems developed because OECA officials did not establish an
accurate, detailed resource plan. Serious delays developed and persisted because
OECA did not provide sufficient guidance to the contractor charged with
developing the implementation tracking system, and OECA did not reallocate its
own resources to provide for implementation tracking. The ultimate success of
the refinery program depends on effective management of consent decree
implementation.
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Recommendations
To correct issues related to goals, performance measures, and reporting, we
recommend that the Acting Assistant Administrator for Enforcement and
Compliance Assurance:
2-1. Develop clear overall refinery program goals that allow for future
assessment or measurement and include timetables for accomplishment.
2-2. Instruct OECA refinery program managers to develop clear goals
specifically for the refinery program's implementation phase.
2-3. Ensure that all goals and performance measures are understood by
everyone involved in the national petroleum refinery program, including
all EPA and State staff involved in some portion of consent decree
implementation, and hold staff accountable for progress in performance
agreements.
2-4. Instruct OECA refinery program managers to develop reliable
performance measures to assess their progress toward meeting national
program goals. Specifically, managers should fully implement OECA's
performance-based approach to program management as described in its
December 18, 2002, Recommendations for Improving OECA Planning,
Priority Setting and Performance Measurement, which specifies
development of plans and reliable performance measures, to the remaining
phases of the petroleum refinery program.
2-5. Instruct OECA refinery program managers to gather, analyze, and report
relevant program data to support overall OECA organizational decision
making and daily program decision making.
To ensure the accurate measurement and reporting of refinery program outcomes,
we recommend that the Acting Assistant Administrator for Enforcement and
Compliance Assurance:
2-6. Instruct OECA managers to verify emissions reductions predicted in
consent decrees on a quarterly basis. Verification might include
establishing a detailed monitoring system, which could contribute to
refinery program performance measurement.
To improve refinery consent decree implementation, we recommend that the
Acting Assistant Administrator for Enforcement and Compliance Assurance:
2-7. Instruct its consent decree tracking contractor to resume tracking both
company due dates for reports and EPA response due dates so that OECA
and outside parties can easily track company and EPA responsiveness.
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2-8. Revise and circulate a comprehensive tracking plan and system that
outlines specific roles and responsibilities for OECA staff, EPA regions,
State and local air pollution control agencies, and companies.
2-9. Provide additional training at the regional level, and hold regional experts
accountable for reviewing and responding to company reports. Require
national technical leads to spot-check responses from regional experts to
ensure national consistency.
2-10. Develop a formal feedback system to ensure that OECA's workforce and
managers have a common understanding of implementation
responsibilities, a common perspective on the status of implementation,
and the ability to expeditiously address implementation issues.
To avoid similar issues in other enforcement and compliance initiatives, we
recommend that the Acting Assistant Administrator for Enforcement and
Compliance Assurance:
2-11. Ensure frequent and open communication between partners (States,
regions) and headquarters about responsibilities for executing portions of
strategies to quickly eliminate misconceptions or confusion.
2-12. As discussed with OECA managers, include consent decree
implementation in OECA priorities and strategic plans, allocating staff and
resources to implementation until OECA completely implements all
consent decrees.
2-13. Develop a plan for allocating negotiation and implementation resources.
Use resource planning in new initiatives to determine the predicted
workload associated with the initiative; allocate training, education, and
development resources; and provide for office-wide reevaluation of the
resource plan.
Agency Comments and OIG Evaluation
OECA agreed with 9 of our 13 recommendations above, and disagreed with 4.
OECA disagreed with recommendation 2-6 because OECA officials believed that
quarterly monitoring was too frequent and did not take resource limitations into
account. OECA stated that these resources are better utilized if devoted to
addressing compliance issues in other industry sectors, and that verifying
emissions reductions twice over the life of a consent decree (once in the fourth
year, and once at the conclusion) would provide EPA with sufficient assurance
that consent decrees led to environmental results. Because we do not believe that
two monitoring events over the life of a consent decree provide sufficient
assurance of results, we continue to recommend that OECA track available data
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on its singular outcome measure for the program - change in tons of air emissions
- on a quarterly basis.
OECA disagreed with recommendation 2-7 because OECA does not see the
necessity of further revising the tracking system at this time. OECA said it has
made substantial progress in reducing the delays, indicating that the current
approach is having the desired result. We believe that the recommendation to
track company report due dates and EPA response due dates in addition to
company report receipt dates and EPA response issuance dates is crucial to
maintaining accountability for both companies and EPA in consent decree
implementation. To avoid similar delays in the future, OECA should track
companies' and EPA's timeliness and identify and address problems as they arise.
OECA disagreed with recommendation 2-8 because OECA does not see the
necessity of creating a new tracking plan and system when EPA already has a
comprehensive consent decree tracking protocol implemented through its
contractor. Despite OECA's current tracking plan and system, we found that
some EPA and State staff were still unclear about their roles and responsibilities.
We recommend that OECA revise as appropriate and circulate its existing
tracking plan and system that outline roles and responsibilities to all appropriate
stakeholders.
OECA disagreed with recommendation 2-10 because, in light of the small staffing
level and their overlapping responsibilities, they did not believe a formal feedback
system was necessary. Should the number of staff substantially increase in the
future, they said they would consider a feedback system at that time. Despite
OECA's monthly conference calls, our evaluation demonstrated management's
lack of awareness of some issues we raised in our evaluation. We recommend
that OECA develop a formal feedback system so that all staff and managers
working on the program can rely on a common system for making suggestions and
raising issues separate from their day-to-day interactions.
Our official draft report contained discussion about using a logic model to tie
program activities to outcomes, and a recommendation to use the logic model
developed in the course of the evaluation for current and future program
development. OECA disagreed with the draft report recommendation and
specifically stated that several of the short-term, intermediate, and long-term
outcome measures in our logic model were not appropriate benchmarks for
judging the effectiveness of a compliance and enforcement program. We chose to
delete this recommendation because a logic model is only one of several possible
means that OECA may employ to achieve the ends we advocate in
recommendations 2-1, 2-2 and 2-3 - that is, the agreement on and communication
of program goals.
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Chapter 3
Refinery Program Lessons Learned
EPA's refinery program received mixed reviews from States, industry, and
environmental groups, ranging from positive to very negative. For example, two
companies with consent decrees viewed their relationship with OEC A as more
collaborative, but a major industry professional association believed EPA's
refinery program severely damaged the Agency's relationship with the industry.
Most of the stakeholders are taking a wait-and-see approach, believing the
program's success depends on how well EPA maintains a level playing field
within industry, and how well companies implement consent decrees.
Representatives from environmental groups added that, in addition to effective
implementation of consent decrees, they wanted EPA to make program results
available to the public, particularly to those communities directly impacted by
refineries.
EPA learned several important lessons that it should apply throughout its refinery
program as well as consider for other enforcement and compliance assurance
programs. Overall, EPA has effectively used some tools for the refinery program,
but needs to make improvements in other areas. For example, EPA effectively
focused on specific enforcement concerns and became knowledgeable about the
industry, but EPA needs to clearly communicate roles and responsibilities. In
addition, EPA needs to meaningfully engage stakeholders throughout the process,
and diligently oversee consent decree compliance.
Refinery Program Offered Lessons Learned
OECA, regional, State, and industry officials described lessons they learned from
the refinery program that OECA could apply to other industries.
Lesson
Learned
Become Knowledgeable about the Industry and Its
Technical Processes
Each industry has its own characteristics that impact the effectiveness of
enforcement and compliance assurance programs. OECA learned an important
lesson through obtaining an understanding of petroleum refinery processes.
According to one former senior OECA official, the industry did not generally
view EPA as credible or very knowledgeable, and believed that EPA staff could
be easily misled or overwhelmed by technical details.
A significant tactic of the refinery program involved pulling together EPA staff
with knowledge about the refinery industry. These staff attended training on the
refinery process, reviewed trade journals, and met with industry officials to learn
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about refineries. In addition, OECA identified four national technical leads for
the priority areas and ensured national consistency in investigations and
negotiations. EPA regional and OECA staff emphasized that technical expertise
made them credible to the industry and helped immensely during negotiations.
Representatives from companies that signed consent decrees with OECA also said
EPA's industry knowledge increased the program's effectiveness. OECA officials
stated that the marshaling of in-house, cross-regional expertise to investigate
refineries was one of the more remarkable elements of the refinery program.
Lesson
Learned
Build the Program with Regional and Headquarters Staff
Working Together
The refinery program demonstrated that a single program with experts from
headquarters and regional offices working together operated more effectively than
having each region and headquarters working alone. EPA regional officials
believed the refinery program's strategy to pull together staff with expertise to
lead the program regardless of geographic location served as a model for other
enforcement programs. One regional EPA official believed the refinery program's
approach prevented the 10 regions from conducting their own programs or having
OECA dictate the entire program. While OECA coordinated the effort, officials
said regional as well as OECA staff drove the program and contributed to its
success in identifying and addressing priority areas.
Lesson
Learned
Designate a Senior EPA Executive to Champion the Program
Representatives from one company that signed a consent decree stated that EPA
obtained success with settlements because the refinery program had a senior EPA
executive who championed the program. Industry representatives said that having
a senior OECA executive who had specific knowledge about the issues, had
decision-making authority, talked with them about the program, and even
participated in negotiations, made a positive impact in how they reacted.
However, the senior OECA official who had championed the program from its
inception left EPA in February 2002. Some industry and EPA staff believed that
the departure of this former OECA executive slowed the program's progress in
obtaining additional settlements. One OECA official believed the slow progress
related more to difficult and contentious negotiations rather than the departure of
the prior senior executive. OECA replaced the prior official with another
executive, but limited resources and other priorities prevented the new executive
from taking a similar role with the refinery program. OECA officials stated that
resources often limited the extent to which a senior executive could become
actively involved in the day-to-day activities of a single national enforcement
program.
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Meaningfully Engage Stakeholders Throughout the Process
As described in Chapters 1 and 2, OECA engaged various stakeholders
throughout the program, including the U.S. Department of Justice and the States.
Stakeholders' were involved in settlement negotiations and negotiating final
consent decrees. However, some State officials said they wanted more
participation in the process. For example, officials from one State believed they
needed to aggressively try to participate in the negotiations or discussions would
take place without them. Officials from another State complained about the lack
of adequate time to comment on proposed negotiation decisions. The officials
said lack of adequate time gave the appearance that their reviews were irrelevant
and would have no impact on the final EPA decision. Other State and local
officials commented that OECA did not:
Keep the State informed on the status of negotiations.
Keep the State involved during the negotiations or decision making process.
Adequately describe the benefits of participation to local officials.
Adequately describe the increased workload necessary to successfully
implement and monitor consent decrees.
On the other hand, one OECA official said that many States did not want to
participate in the refinery program despite OECA's efforts to include them in
negotiations.
One group of stakeholders - the companies that signed consent decrees with
OECA - formed a "consenters" group to facilitate a relationship with OECA and
minimize the uncertainty around consent decree implementation. The group also
formed to facilitate compliance, learn from each other (when appropriate and
within anti-trust limitations), and reduce learning curves in implementing consent
decree provisions. OECA officials and a representative from a company in the
consenters' group said the group provided an effective means to communicate and
discuss issues among similarly situated companies.
Lesson
Learned
Clearly Communicate Roles and Responsibilities
Clear communication is a critical component of any program. OECA's
Framework for a Problem-Based Approach to Integrated Strategies, dated
November 2002, emphasized the importance of communication and clearly
defining stakeholders' roles and responsibilities. While OECA effectively
communicated its four priority areas to the industry, the public, and other
stakeholders through various means (e.g., Enforcement Alert newsletters), OECA
did not effectively communicate other aspects of its program (particularly
environmental outcomes) as discussed in Chapter 2. OECA's Framework
document encourages the development of a communications plan for internal and
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external stakeholders to ensure that OECA keeps stakeholders informed of the
program's progress as well as roles and responsibilities.
Lesson
Learned
Focus on the End Result and Establish Incentives for Industry to
Participate
OECA and regional officials believed their focus on emissions reductions rather
than individual facility violations led to the refinery program's success. EPA's
refinery program strategy included identifying and focusing on four priority areas
under the Clean Air Act that represented the most significant compliance
problems within the industry. OECA directed its pursuit of global settlements at
obtaining industry's agreement on implementing controls and practices that are
expected to achieve significant emissions reductions in these four priority areas.
As part of its push to achieve significant emissions reductions, EPA encouraged
and, in some instances, required refineries to develop and install new emission
control technologies. OECA officials stated that the refinery program pushed the
use of the most advanced emissions control technologies available.
OECA negotiated with refinery companies and offered an incentive in the form of
relief from past liabilities in order to persuade the industry to sign consent
decrees. OECA worked with the industry's desire to obtain a level of certainty
regarding regulatory risks with EPA's desire to significantly reduce emissions.
The industry saw many complex regulations on the horizon and viewed
participating in consent decrees as "good business" to limit liability and obtain a
level of certainty regarding regulatory risks. As a result, EPA obtained consent
decrees that included implementing controls expected to reduce emissions as well
as requirements to go beyond compliance with regulations.
Lesson
Learned
Diligently Oversee Compliance with Negotiated Settlements and
Consent Decrees and Take Action When Provisions Are Not Met
As discussed in Chapters 1 and 2, the implementation of refinery consent decrees
represents one of the essential pieces of the refinery program. Without effective
implementation, the refinery program may not result in anticipated emissions
reductions and increased industry compliance. OECA officials expressed concern
over the significant amount of resources required by headquarters, regional, and
State offices to implement consent decrees while at the same time continuing
other enforcement-related activities in other industries. While it will require
careful priority-setting and resource allocation, OECA, regions, and States should
ensure implementation of consent decree provisions and take appropriate
enforcement action when necessary.
Conclusions
OECA's refinery program resulted in several important lessons learned. OECA
and regional officials spent considerable time at the start of the program learning
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about the industry and developing expertise in the four areas on which the strategy
focused. Officials continued to gain industry knowledge throughout the refinery
program. As an on-going program, however, the refinery program could continue
to benefit from evaluating where it might apply some of the lessons learned. For
example, OECA should improve communication with stakeholders, particularly
given the feedback States and regional staff provided on the refinery program. In
addition, OECA should designate a senior EPA executive to champion the
consent decree implementation phase.
Recommendations
We recommend that the Acting Assistant Administrator for Enforcement and
Compliance Assurance:
3-1. Disseminate the lessons learned from the refinery program to EPA staff to
benefit other compliance efforts, obtain additional feedback from
stakeholders - including States, industry, and environmental groups - on
other lessons learned, and update relevant OECA guidance documents such
as OECA's Framework for a Problem-Based Approach to Integrated
Strategies or other appropriate documents for on-going and future industry-
specific enforcement programs.
3-2. Designate a senior OECA executive to assume the role of champion for the
refinery program to ensure (a) that refiners enter into consent decrees or face
appropriate alternative enforcement actions, and (b) that consent decrees are
effectively implemented.
3-3. Consider, on a case-by-case basis, designating a senior OECA executive to
assume the role of champion for each of the other enforcement priority
areas. EPA and industry officials should recognize the champion as
knowledgeable and as having the authority to make decisions related to the
priority area.
3-4. Develop a communications plan for refinery consent decree implementation.
The plan should clearly describe the roles and responsibilities of all
stakeholders, including refinery priority area experts and regional and State
officials.
Agency Comments and OIG Evaluation
OECA agreed in part with the first three recommendations in this chapter and
fully agreed with the last recommendation.
OECA concurred in part with recommendation 3-1. OECA disagreed that it
needed to revise the Framework for a Problem-Based Approach to Integrated
Strategies to reflect lessons learned from the refinery program. We view the
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lessons learned from the refinery program as significant and believe OECA should
reflect them in a written document (either combined with lessons learned from
other initiatives or by itself) and distributed to stakeholders. We revised the
recommendation so that OECA can determine the appropriate document - either
the Framework document or another guidance document - to capture the lessons
learned and communicate them to stakeholders.
OECA also concurred in part with recommendation 3-2. OECA agreed that a
senior enforcement official needed to manage national enforcement priorities and
OECA designated a senior official responsible for managing the refinery program.
OECA disagreed, however, that a senior OECA official needed to ensure that
EPA settle or litigate against all refiners in the industry. OECA officials stated
that after the refinery program reaches its goal of 50 percent increased compliance
and 20 percent decreased emissions, the program would return to the "core"
enforcement program, with primary enforcement and compliance assurance
program responsibility devolving to States and EPA regional offices. We
continue to recommend that while the refinery program remains as a national
priority, a senior OECA official maintain responsibility and accountability for the
program.
For recommendation 3-3, OECA stated that it would make the determination of
whether any particular priority area requires an OECA-designated "champion" on
a case-by-case basis as appropriate in light of all relevant facts and circumstances.
We agree, and revised this recommendation accordingly.
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Appendix A
Details on Scope and Methodology
We conducted our evaluation of EPA's national petroleum refinery program between June 2003
and March 2004. We performed our evaluation in accordance with Government Auditing
Standards issued by the Comptroller General of the United States.
We began our evaluation of the petroleum refinery program at the request of OECA senior
managers and after we conducted extensive preliminary research on EPA's enforcement and
compliance assurance program. We began our general preliminary research on EPA's
enforcement and compliance assurance program in February 2002 to obtain information on
EPA's traditional and alternative approaches to enforcement and compliance assistance. Our
preliminary research included interviewing officials in EPA's OECA, Office of Research and
Development, Office of Environmental Information, and Office of the Chief Financial Officer.
We interviewed these officials to obtain information on EPA activities related to enforcement
and compliance assistance strategies. We reviewed a variety of documentation describing
integrated strategies, compliance assistance grants, Memorandum of Agreement priorities,
Government Performance and Results Act reporting, and enforcement and compliance assistance
databases (Enforcement and Compliance History Online, Sector Facility Indexing Project, and
Integrated Data for Enforcement Analysis System).
We also interviewed officials at non-EPA organizations. We met with officials at the General
Accounting Office (GAO), the National Academy of Public Administration, and the
Environmental Council of the States to obtain information on prior reviews they performed on
enforcement and compliance assistance programs, and to obtain their perspectives on significant
concerns and issues related to enforcement and compliance assistance. In addition, we reviewed
reports they issued on enforcement and compliance assistance issues.
We used the results of our initial preliminary research to develop objectives for four separate
evaluations of the enforcement and compliance assurance program. These four evaluations
became part of OIG's March 2003 Multi-Year Plan Fiscal 2003 - 2005.
In December 2002, we had held an entrance conference with OECA to begin one of the four
evaluations in the Multi-Year Plan. We designed the first evaluation to describe the regulated
universe, the compliance status of OECA's priorities, and the enforcement and compliance
assurance strategies EPA and its partners applied to each of the priorities. However, OECA
senior managers said they found the scope of the evaluation too broad and thought it would not
provide meaningful results. After discussions with OECA senior management, we agreed to first
conduct a pilot evaluation of one of the priorities. The pilot evaluation would review the
strategies and measures for one priority area and test our approach to answering the objectives in
all four evaluations.
From February through May 2003, we performed additional research on OECA's priorities to
determine which priority to include in the pilot evaluation and to develop the specific evaluation
objectives. We met with OECA staff to determine the status of each priority and to obtain a brief
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background on the issues prompting OECA to identify them as priorities. As a result of
additional research and analysis, we selected the petroleum refinery program as our pilot issue.
In addition to its status as an OECA national enforcement priority, OECA also had listed the
petroleum refinery as a separate priority industry sector for several years.
Nature and Extent of Petroleum Refinery Industry and Strategies Used
To understand the nature and extent of the petroleum refinery universe and what strategies EPA
and its partners developed to address compliance at refineries, we interviewed and collected
documents from OECA staff, EPA's National Enforcement Investigations Center, regions,
States, industry, environmental groups, and the U.S. Department of Justice.
We interviewed OECA, National Enforcement Investigations Center, and regional staff to
determine the compliance problems in the industry, the specific strategies and approaches used to
address the problems, and the industry's current compliance status. We interviewed officials in
EPA regions 5, 6, 8, and 9 and State officials in Louisiana, Oklahoma, New Mexico, Minnesota,
Delaware, Texas, Arkansas, and Colorado. We also interviewed officials in the Northwest Air
Pollution Authority. We asked the regions, States, and local air authority to provide their
perspectives on the effectiveness of EPA's strategy to address refinery compliance problems,
their level of participation in the strategy, and suggestions for improving the refinery strategy and
other enforcement and compliance strategies. We based our selection of regions on whether they
had a significant number of refineries within their region. We based our selection of States on
whether the State participated in a consent decree as part of EPA's strategy, the number of
refineries in the State, and recommendations from EPA officials and outside organizations.
We met with two petroleum refinery industry groups - the American Petroleum Institute and the
National Petrochemical and Refiners Association - and asked for their perspectives on the
effectiveness of EPA's refinery strategy and their members' view of the strategy. In addition, we
spoke with representatives from two companies and a representative from the consenters group7
to obtain reasons why refineries did or did not enter into settlement agreements with EPA. We
chose not to interview officials of refineries that had not entered into agreements with EPA
because we did not want to interfere with their ongoing negotiations with OECA.
We reviewed documentation on the petroleum refinery industry to better understand the industry,
its compliance issues, and impact on the environment. These documents included the following:
 EPA Office of Compliance Sector Notebook Project - Profile of the Petroleum Refining
Industry, September 1995
Sector Facility Indexing Project
Scientific literature on the petroleum refining industry
7 The consenters group consists of representatives from petroleum refinery companies that already
signed consent decrees with EPA.
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We also reviewed and analyzed documentation on EPA's refinery strategy, justification for its
approach and priority, and compliance assistance efforts. These documents included:
	Memorandum of Agreement Guidance for fiscals 1996 through 2004
	Enforcement Alert Newsletters
Internal documents describing the refinery strategy, goals, and performance measures
We attended the Refining Process Services Inc.'s Basics of Petroleum Refining for
Non-Technical Personnel training to help us better understand the petroleum refining process.
We also toured three refineries - in Denver, Colorado; Whiting, Indiana; and Texas City, Texas -
to observe refineries with various capacities and emissions issues. We also met with officials at
each of these refineries to obtain feedback on how they viewed EPA's refinery strategy and the
consent decree process.
Goals, Performance Measures, and Reporting Approach for Petroleum Refineries
To evaluate the performance measurement and reporting approach for petroleum refineries and
whether the approach allowed EPA to effectively implement, manage, and improve its strategies
for refineries, we interviewed a variety of individuals and analyzed supporting documentation.
These individuals helped plan, implement, track, and/or manage EPA's strategies for the
petroleum refinery industry. These individuals included staff in OECA's Office of Regulatory
Enforcement, Office of Compliance, and OECA refinery issue experts in Headquarters, Region 5,
and the National Enforcement Investigations Center. We interviewed these individuals to obtain
information on OECA's process to identify priorities, establish goals and performance measures,
and report accomplishments. We also interviewed them to determine whether they tracked their
progress in achieving the refinery goals and how they determined baselines for pollutant
emissions and reductions. In addition, we interviewed the prior Director of the Office of
Regulatory Enforcement to determine the refinery program's initial goals and objectives. We
also interviewed outside EPA experts to discuss environmental performance measurement.
We reviewed documentation on the refinery strategy goals, performance measures, and
accomplishment reports. We evaluated how EPA established baselines for its measures and how
it measured emissions reductions. Our documentation review included the following:
Case Conclusion Data Sheet - Training Booklet, November 2000
	OECA's Framework for a Problem-Based Approach to Integrated Strategies
11 Global Consent Decrees
Headquarters and Region 6 Consent Decree Implementation Tracking Databases
	OECA's Accomplishment Reports for fiscals 1996 - 2002
In our interviews with OECA and regional officials, we obtained information on whether they
agreed on the refinery strategy goals and objectives and whether OECA met those goals. In
addition, we obtained information from States and local authority officials on other measures that
OECA could or should use to determine compliance and achievement of refinery strategy goals.
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To determine how well OECA managed its consent decree implementation, we analyzed
OECA's consent decree tracking information. We retrieved nine company spreadsheets from
EPA's contractor on July 31, 2003, October 16, 2003, and January 14, 2004. The company
spreadsheets depicted the due dates and deliverables outlined in the consent decrees. From the
spreadsheets, we calculated the number of responses EPA had not issued and the timeliness of
both company reports and EPA responses. By comparing data from July, October, and January,
we determined that company spreadsheet contents changed between the reporting dates;
therefore, we assessed the nature of changes that occurred, including comparing the number of
company reports and EPA responses required, the types of reports and EPA responses required,
and the fields tracked by the spreadsheets (for example, EPA eliminated using tables that tracked
the timeliness of company reports and EPA responses between October 2003 and January 2004).
To obtain and document lessons learned that EPA could apply in other industries or that OECA
could make to improve the petroleum refining program, we interviewed staff at OECA, EPA's
National Enforcement Investigations Center, regions, States, industry, environmental groups, and
the U.S. Department of Justice.
Prior Audit and Evaluation Work
In our research, we found no previous audit or evaluation reports evaluating EPA's petroleum
refinery compliance program. However, we identified EPA OIG and GAO reports listed below
with findings on performance measurement, monitoring, and tracking:
EPA OIG: Compliance with Enforcement Instruments, Audit Report No.
2001-P-00006, March 29, 2001.
We found that OECA's performance measures were not sufficient to determine the
program's actual accomplishments. Consequently, we determined Congress had less
useful performance data upon which to base its decision making. We also found that
EPA regions did not always adequately monitor compliance with enforcement
instruments (e.g., consent decrees) nor did they always consider further enforcement
actions. We attributed ineffective monitoring primarily to the lack of: (1) guidance
detailing how or when to monitor enforcement instruments, and (2) emphasis OECA
placed on monitoring. Consequently, OECA risked continued violations that would
contribute to human and environmental health impacts, thus decreasing EPA's deterrence
effect. In response, OECA concurred that it and the regions can and should improve
tracking and enforcing compliance with requirements in enforcement instruments. At
that time, we concluded that OECA had begun to take the steps necessary for OIG to
close out the report.
GAO: Environmental Protection: Wider Use of Advanced Technologies Can Improve
Emissions Monitoring, Report No. GAO-Ol-313, June 22, 2001.
GAO found considerable variation in the compliance monitoring performed by stationary
air pollution sources. As a result, regulators and regulated entities lacked certainty about
whether air pollution sources maintained continuous compliance with the Clean Air Act.
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GAO recommended that EPA encourage wider use of advanced air monitoring
technologies. GAO also cited equipment manufacturers and regulators as stating that,
without regulatory requirements, manufacturers had little incentive to bring new
monitoring technologies to market. OECA responded that it had coordinated efforts to
explore ways to increase the application of advanced monitoring technologies with EPA's
Office of Air and Radiation and industry while minimizing the perception that
cooperation with OECA would lead to greater enforcement actions. OECA guaranteed
that they would not punish the industry for their willingness to advance the science of
monitoring except in the most egregious cases.
GAO: Air Pollution: EPA Should Improve Oversight of Emissions Reporting by Large
Facilities, Report No. GAO-Ol-46, April 6, 2001.
GAO reported that EPA performed limited oversight of States' efforts to verify large
facilities' emissions reports. GAO recommended that EPA improve its oversight of
States' review of emissions reports by evaluating the adequacy of these reviews and, if
necessary, strengthening them. In response, EPA stated that it offered tools and
encouragement for States to improve facility emissions estimates, but EPA had no basis
to impose a requirement on State or local permitting authorities to quality assure annual
emissions data.
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Appendix B
Key Information on U.S. Petroleum Refineries
The refinery corporations are listed in order of refining capacity as of January 1, 2003. The
corporations highlighted have signed consent decrees as of March 2004 that apply to at least
some of their refineries. The consent decrees covered each refinery the company owned and
operated on the date of consent decree entry by the court. Since that date, companies may have
sold, bought, or closed one or more refineries, however, the consent decree follows a refinery
regardless of these actions. As a result, the "number of refineries under consent decrees" may
not align with January 1, 2003 data for "number of refineries" owned by a company as depicted
in the table.
Corporation
No. of
Refineries
No. of Refineries
under Consent
Decrees
Capacity
(barrels per
calendar day)
Percent
of Total
Capacity
Conoco Phillips Co.
(known as Conoco, Inc. when consent decree
signed)
161
4
2,276,900
13.59
Exxon Mobil Corp
6

1,808,000
10.79
British Petroleum PLC
(known as BP Exploration and Oil, Co. when
consent decree signed)
6
8
1,501,500
8.96
Valero Energy Corp
12

1,247,362
7.44
Chevron Texaco
(known as Chevron U.S.A. Inc. when consent
decree signed)
72
5
1,079,000
6.44
Marathon Oil Corp
(known as Marathon Ashland Petroleum LLC
when consent decree signed)
7
7
935,000
5.58
Motiva Enterprises LLC
4
4
879,700
5.25
Sunoco Inc.
4

730,000
4.36
PDV America Inc.
(includes Citgo Refining)
5

698,300
4.17
Royal Dutch Shell GP
(includes four refineries known as Equilon
Enterprises LLC when consent decree signed)
63
4
603,750
3.60
Tesoro Petro Corp4
6

562,500
3.36
Koch Industries Inc.
(known as Koch Petroleum Group when
consent decree signed)
2
2
524,980
3.13
1	Conoco purchased 12 of its 16 refineries after it entered into a consent decree with EPA.
2
Two Chevron Texaco refineries not covered by the consent decree are asphalt refineries rather than
petroleum refineries.
3
Two Royal Dutch Shell GP refineries not covered by the consent decree are operated by Shell Chemical, a
separate business unit from its fuels refineries.
4	Tesoro purchased two refineries from BP, both of which are covered by BP's consent decree.
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Corporation
No. of
Refineries
No. of Refineries
under Consent
Decrees
Capacity
(barrels per
calendar day)
Percent
of Total
Capacity
Blackstone Group LP
2

416,500
2.49
The Williams Co. (Premcor)5
2

377,928
2.26
Deer Park Refining Limited Partnership (known
as Deer Park Refining Limited Partnership
(Shell) when consent decree signed)
1
1
333,700
1.99
Lyondell Petrochemical Co.
1

270,200
1.61
Chalmette Refining LLC
1

182,500
1.09
TotalFinaElf SA
1

175,068
1.04
El Paso Corp
(includes Coastal Eagle Point Oil Co. that
signed consent decree)
2
1
158,787
0.95
Crown Central Petro Corp
2

155,000
0.92
Orion Refining Corp6
1

155,000
0.92
Sinclair Oil Corp
3

152,195
0.91
Frontier Oil Corp
2

149,000
0.89
Cenex Harvest States COOP (includes Cenex,
also known as CHS Inc., when consent decree
signed)
2
1
136,200
0.81
Murphy Oil Corp7
2

128,000
0.76
Farmland Industries Inc.8
1

112,000
0.67
Ergon Inc. (includes Lion Oil Company, Ergon
West Virginia Inc., and Ergon Refining Inc. that
all signed consent decrees)
3
3
105,400
0.63
Giant Industries Inc.
3

96,200
0.57
Calumet Lubricants Co. LP
3

67,520
0.40
Holly Corp (includes Navajo Refining Company
and Montana Refinery Company that signed
consent decrees)
2
2
65,000
0.39
United Refining
1

65,000
0.39
Petro Star Inc.
2

62,550
0.37
Alon USA Energy Inc
1

58,500
0.35
Gary Williams Co.
1

52,500
0.31
Paramount Acquisition Corp
1

50,000
0.30
Placid Refining Co.
1

48,500
0.29
Time Oil Co.
1

44,350
0.26
Hunt Consolidated Inc.
1

33,500
0.20
Transworld Oil USA Inc.
1

29,400
0.18
5	EPA took enforcement action against Premcor under the refinery program and entered into a limited, non-
global settlement. EPA reached similar limited, non-global settlements with Murphy, Farmland, Frontier,
Pennzoil, Crown, and NCRA (owned by Cenex Elarvest States COOP).
6	A consent decree with the State of Louisiana (patterned after EPA's settlements) covers Orion's refinery.
7
EPA took an enforcement action against Murphy Oil for operations at one of its refineries that included
elements similar to the global refinery consent decrees.
8
Farmland recently resolved its liability with EPA through a consent decree patterned after the global
refinery consent decrees.
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Corporation
No. of
Refineries
No. of Refineries
under Consent
Decrees
Capacity
(barrels per
calendar day)
Percent
of Total
Capacity
Apex Oil Co. Inc.
1

26,000
0.16
Kern Oil & Refining Co.
1

24,700
0.15
San Joaquin Refining Co. Inc.
1

24,300
0.15
Flying J Inc.
1

24,000
0.14
Countrymark COOP Inc.
1

23,000
0.14
Southland Oil Corp


16,800
0.10
Silver Eagle Refining


14,000
0.08
Wyoming Refining Co.
1

12,500
0.07
Age Refining & Marketing
1

10,200
0.06
American Refining Group Inc.
1

10,000
0.06
Greka Energy
1

9,500
0.06
World Oil Co.
1

8,500
0.05
Cross Oil & Refining Co. Inc.
1

6,800
0.04
Somerset Refinery Inc.
1

5,500
0.03
Young Refining Corp
1

5,400
0.03
Foreland Refining Corp
1

5,000
0.03
Oil Holding Inc.
1

2,800
0.02
Dow Chemical USA
1

880
0.01
TOTALS
145
42
16,757,370
100
43

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44

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Appendix C
Petroleum Refining Process Flow Chart
This flow chart illustrates the petroleum refinery process, potential releases, potential release
points, and the major applicable environmental regulations.
Petroleum Refinery
Process Row
Atrrospheric Distillation
Column
CAA
am
IVfercK
CAA
RCRA
Crude Oil
Vacuum Distillation
Column
CAA
am
ht/dro Treating


Catalytic Reforrring
CAA


CAA
CWA


am
RCRA


RCRA
Isorrerization
CAA
CWA
RCRA
Catalytic Cracking
CAA
CWA
RCRA
Amine Unit and Sulfur Rsccwery
CAA
am
RCRA
Solvent Extraction
CAA
CWA
Propane Dsasphalter
CAA
am
~slayed Coker
CAA
>' >1 CWA
RCRA
"Thermal Cracking/
Visbreaker
CAA
CWA
	3>
-^i
X
Catalytic H/dro Cracking
CAA
am
RCRA
1
Ctewaxing
CAA
CWA
H/dro Treating
CAA
CWA
RCRA
ht/dro Treating -
^ CAA
CWA
RCRA
	t	
Alkylation
CAA
am
RCRA
IVtercK
CAA
RCRA
TT
IVterax
CAA
RCRA
r
Blending
CAA

A r Emissions: heater stack gas (CO, SQx, l\Q(, hydrocarbon, and particulates), fugitive emissions (hydrocarbons), vent
em S3 ons (hyctocarbcns), steam qectcr emissions (hydrocarbons), deooking emissions (hyctocarbons and particulates), catalyst
regeneration (CO, SO<, NCk, catalyst dust, and parti cdates), tail gas orissicns (SCk, NCx, and H2S), ccmbusticn products (SCk,
|sD<, hyctocarbcns), hyctochicride (HQ), lugitive solvents, heaters, fugitive propane
Supporting Operations
Water
NUB, phenol, suspended sdids, dissolved solids, high biochemical cxygen donand (BOD), hicfn
temperature, chlorides, rrercaptans, ele/ated pH, chemical oxygen donand (COD), cyanides, amines, stretford solution, oily
wastewater, contaminated tank water, spent sUtuic add, caustic wash, cil and solvents, ammonia
Land Releases crude dl/desalter sludge (iron rust, day, sand, water, emulsified dl and wax, m^als), coke dust (carbon particles
and hydrocarbons), spent catalysts (m^alsfrcm crude oil and hyctocarbons), spent catalyst fines (aluminium silicate, metals, and
phcsphcric add), heat exchanger sludge (oil, metals, and suspended solids), tank bottom sludge (ircn, rust, day, sand, water,
emulsified oil and wax, metals), neutralized alkylaticn sludge (sUfuicadd or caldim fluoride, and hydrocarbons), caldim chlcride
sludge, spent merox caustic solution, waste oil-disUfide mixture, API separator sludge (pherds, metals, and a I), chemical
predpitaticn sludge (chemical coagulants and dl), dssolved air flotation (D^) floats, bidogcal sludges (rn^als, oil, and
suspended solids), spent lime
Waste Water
Howxwi and
Treatment
45

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46

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Appendix D
Refinery Releases and Effects
This table provides a summary of the human health and environmental effects of the following
common air pollutants released at refineries: volatile organic compounds (VOCs); sulfur dioxide
(S02); nitrogen oxide (NOx); particulate matter (PM); carbon monoxide (CO); hydrogen sulfide
(H2S); and toxic air pollutants. Toxic air pollutants include pollutants known or suspected to
cause cancer or other serious human health effects and include refinery releases such as benzene
and toluene. EPA does not consider S02 NOx, PM, CO, and H2S toxic air pollutants, but EPA
lists pollutants such as benzene as both VOCs and toxic air pollutants.
Releases
VOCs
so2
NOx
PM
CO
h2s
Toxic Air
Pollutants
Human Health Effects
Reacts with other chemicals to create PM that
can cause respiratory illness, aggravation of
heart conditions and asthma, permanent lung
damage, and premature death.

/
/
/



Aggravates respiratory conditions.





/

Reacts with other chemicals leading to
ground-level ozone and smog, which can
trigger respiratory problems.
/

/




Can cause health problems such as cancer.
/





/
Can cause reproductive, neurological,
developmental, respiratory, immune system,
and other health problems.






/
Reacts with common organic chemicals
forming toxins that may cause bio-mutations.


/




Affects cardiovascular system and can cause
problems within the central nervous system.



/

/

^ Environmental Effects
Causes visible impairments that may migrate
to sensitive areas such as National Parks.
/
/
/
/
/


Contributes to formation of acid rain, which
damages crops, trees, and buildings; and
increases acidity in soils, lakes, and streams.

/
/


/

Contributes to the formation of ground-level
ozone, which harms vegetation.
/



/


Contributes to global warming, which leads to
rising sea levels and other adverse changes
to plant and animal habitat.


/




Causes environmental hazards, including
concentration of toxic chemicals
(e.g., mercury) up the food chain.






/
Settles on ground and water, acidifying
streams and lakes, damaging forests and
farm crops, and depleting soil nutrients.

/

/



47

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48

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Appendix E
National Refinery Program Time Line
Date
Event
1995
June
Petroleum refining identified as national enforcement priority in OECA's fiscal
1996/1997 Memorandum of Agreement Guidance. OECA required each Region to
develop compliance/enforcement strategies for the refinery enforcement priority.

September
OECA issued the Profile of the Petroleum Refining Industry sector notebook.
1996
1996
OECA officials made presentations at the National Petrochemical and Refiners
Association conference on the results of LDAR and benzene inspections.
1997
Late 1997
OECA forms the national refinery workgroup with an initial conference structured to
discuss refinery issues and regional initiation of their own enforcement actions. The
workgroup, comprised of OECA and regional staff, focused on investigations/
enforcement at petroleum refineries.

Late 1997
OECA officials share environmental and enforcement concerns with the refinery
industry, State/local officials, community groups, and environmental advocates. Based
on publicly available information, OECA became aware that refinery capacity had
increased substantially but relatively few refineries had applied for NSR permits.
1998
Early 1998
First annual meeting of the Refinery Compliance and Enforcement Workgroup. The
workgroup sets up three sub-workgroups to focus on four priority issues:
/ NSR/PSD
/ Flaring
/ LDAR
/ Benzene Waste
The workgroup held monthly conference calls and annual meetings from 1998 through
2000 that emphasized: (1) sharing expertise among the regions, (2) training, (3)
developing policy, and (4) encouraging and coordinating focused investigation and
enforcement efforts on the priority areas.

April
Began full-scale implementation of the national strategy, including investigations.

November
EPA officials made presentations at the National Petrochemical and Refiners
Association annual meeting to present enforcement priority areas to refinery industry.
1999
January
OECA issued an Enforcement Alert on complying with NSR and PSD.

February
National meetings of EPA workgroup and senior enforcement managers to review
investigation progress.

October
OECA issued an Enforcement Alert on LDAR (fugitive emissions).

November
EPA officials presented preliminary investigation results to the National Petrochemical
and Refiners Association's annual environmental meeting.
49

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Date
Event
2000
February
National meeting of senior enforcement managers to review progress and discuss
targeting major companies for national investigations on priority areas.

Early 2000
BP and Koch Industries separately approach OECAto explore the possibility of
voluntary settlements of violations of the Clean Air Act.
OECA decided to pursue global settlements with refineries by approaching corporate
officials and presenting them with the option to resolve all issues of widespread
compliance/enforcement concern to EPA.

March
OECA held meetings with BP and Koch to kick-off global settlement negotiations.

May
OECA issued an Enforcement Alert that announced EPA's compliance assistance
program developed with American Petroleum Institute on slotted guidepoles.

June
Kick-off meeting held with Motiva, Equilon, and Shell Deer Park.

July 25
OECA announces "Agreements in Principle" for BP and Koch settlements.

August
Kick-off meeting held with Marathon Ashland Petroleum.

October
OECA issued an Enforcement Alert on flaring.

December 22
Koch settlement filed with the court.1
2001
January 18
BP settlement filed with the court.

March 21
Motiva, Equilon, and Shell Deer Park settlements filed with the court (25 percent of
industry now under consent decrees; additional 25 percent in similar global settlement
negotiations).

May 11
Marathon Ashland Petroleum settlement filed with the court.

Mid-2001
Consenters Committee formed by refinery companies that had entered into global
consent decrees with EPA.

December 20
Conoco, Navajo Refining, and Montana Refining settlements each filed with the court
(30 percent of industry now under consent decrees; additional 30 percent in similar
global settlement negotiations).
2002
January 24
Murphy Oil Settlement filed with the court for one of its refineries. Settlement included
elements patterned after the global settlements.
2003
March 11
Lion Oil settlement filed with the court.

October 1
Coastal Eagle Point Oil Company (CEPOC), CHS Inc. (Cenex), and Ergon Refining
settlements filed with the court.

October 16
Chevron settlement filed with the court (40 percent of industry now under consent
decrees; additional 40 percent in similar global settlement negotiations).
1 A consent decree is filed with the court and then is subject to a 30-day public comment period. After the
comments are addressed, the consent decree is entered by the court and becomes effective. The time line
includes the date that the consent decrees were filed with the court and open to public comment. It does not
include the date the consent decrees were entered into court.
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Appendix F
Consent Decree Process Flow Chart
Continue/Initiate
Investigation(s), take
Enforcement Action
Proposed

Consent
	
Decree (CD)

Public
Commen
Active CD,
entered by
court
(1 of 13)
T
Implementation Phase Begins Here
Planned CD
Action
(1 of ~200)

Company
Report to EPA
About Action



Company Report Review and
Cirrculation Process ("Implementation
Tracking System")
i k
PA Does No<
Approve
Company
Action
EPA Approves
ENVIRONMENTAL
RESULT
EPA Response
No EPA Response
Required
Company
Revises
Report/Action
developed by EPA OIG 02/2004
51

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52

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Appendix G
EPA Comments on the Official Draft Report
Apr. 2, 2004
MEMORANDUM
SUBJECT: The Office of Enforcement and Compliance Assurance's Agency Response to the
Draft "Evaluation Report: Opportunities Exist to Improve and Replicate EPA's
National Petroleum Refinery Compliance Program," dated March 5, 2004
FROM: Phyllis Harris /s/
Acting Assistant Administrator
Office of Enforcement and Compliance Assurance
TO:	Jeffrey K. Harris
Director
Program Evaluation, Cross-Media Issues
Office of Inspector General
Introduction
Today, on behalf of the Office of Enforcement and Compliance Assurance's (OECA),
and as the designated "Action Official," I am forwarding to you our consolidated "Agency
Response" (Response) regarding the Office of Inspector General's (OIG) draft "Evaluation
Report: Opportunities Exist to Improve and Replicate EPA's National Petroleum Refinery
Compliance Program," dated March 5, 2004 (Evaluation Report). OECA has actively solicited
comments from Regions 5, 6, 8, and 9. Accordingly, the attached Response represents the
consolidated comments of OECA and those Regions that have provided comments.
In accordance with the instructions provided in your March 5, 2004 memorandum, the
Response addresses the factual accuracy of the draft Evaluation Report. Consistent with those
instructions, the Response also specifically indicates whether OECA concurs with each of the
recommendations proposed by the OIG. Further, to the extent that action has already been
initiated or planned to address issues identified in the draft Evaluation Report, the Response
specifically identifies those actions that have been initiated or planned. Finally, your March 5,
2004 memorandum expressly states that the "final report will include an assessment of [the]
comments" made in the Response. Consequently, I am specifically requesting that this
memorandum and the attached Response be attached to, and be made a part of, the final version
of the draft Evaluation Report.
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It is OECA's view that the final report should remain confidential in its entirety. The
draft Evaluation Report and Response are a road map of OECA's internal deliberations regarding
how, when, and under what circumstances it will deploy its array of enforcement tools to secure
compliance. Because targeting, settlement, and litigation under the Refinery Petroleum Initiative
(Initiative) remains extremely active and planning is currently underway for further
implementation during the fiscal year 2005 through 2007 time frame, it is our view that
disclosure of such deliberative product is not appropriate at this time. Moreover, from a practical
perspective, the publication of this report will make it far more difficult for EPA to reach
agreement with other refiners. At a minimum, the publication of this draft Evaluation Report
will offer potential settlers and their counsel arguments that they can advance in negotiations and,
more significantly, litigation that the conduct of the Initiative is inconsistent with the comments
made in the draft Evaluation Report and therefore unfair.
The Evaluation Report expresses the views of the OIG only. As summarized in this
memorandum and noted in greater detail in the attached Agency response, OIG's Report does not
represent the views of OECA regarding the Initiative.
General Comments
It is apparent from the face of the draft Evaluation Report that it is the product of a
considerable amount of work and effort. Moreover, as indicated in the attached Response, there
are observations, recommendations and lessons learned made in the draft Evaluation Report that
will be helpful to EPA as it moves forward in the Initiative and as it develops and implements
new initiatives.
However, as outlined below in this memorandum, and with more specificity in the
attached Response, it is OECA's view that the draft Evaluation Report has several significant
shortcomings. We highlight those shortcomings below:
The draft Evaluation Report contains errors, omissions and misstatements. To assist
you in the preparation of the final report we have highlighted those errors, omissions and mis-
statements in the attached Response by reference to the page, chapter and sentence in which they
appear. In addition, we have provided you with the specific comments that explain the bases for
our view that the identified sections of the draft Evaluation Report should be corrected.
The draft Evaluation Report does not place the petroleum refining priority in its
proper historical context. The draft Evaluation Report does not reflect an understanding of the
many challenges that OECA identified and overcame as it established and sustained priority
attention on this industrial sector and its multi-media problems. Rather, the draft Evaluation
Report gives the impression that sector-based and multi-media analysis and targeting,
environmental baseline and results measurement, and national planning and accountability
processes were fully mature in the mid-1990's when the first work on the Initiative commenced.
To the contrary, many of these features were in their early or conceptual stages of development
when the petroleum refining sector first appeared on OECA's radar screen. The OECA
reorganization in 1994 marked a nearly complete overhaul of EPA's compliance and
enforcement business model, and to not put this report in that context is a big shortcoming.
54

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The draft Evaluation Report is unbalanced and does little to highlight the
Initiative's successes. The Petroleum Refinery Initiative is one of the most successful
enforcement initiatives ever undertaken by EPA. Since approximately January 2000, the date
that EPA began to formally engage petroleum refining companies in global settlement
discussions regarding their Clean Air Act noncompliance, EPA has obtained settlements with 11
petroleum refiners representing almost 40% of the nation's domestic refining capacity and
covering 42 separate refineries for each of the major four substantive areas related to Clean Air
Act compliance. The settlements contain substantial "beyond compliance" requirements, and
taken together, represent a breadth and depth of coverage not previously realized in the
enforcement program.
The draft Evaluation Report does not demonstrate an appreciation for the
complexity of the issues EPA has successfully addressed under the Initiative and its
unprecedented scope. Prior to development of the Initiative, EPA had largely approached
enforcement on a facility-by-facility, issue-by-issue basis. The Initiative represents a radical
departure from this practice. There are few industries as complex as the petroleum refining
industry and there are few regulatory programs as complex as the Clean Air Act.
Notwithstanding this complexity, under the Initiative, EPA successfully embraced the global
consent decree as a mechanism to secure permanent, consistent compliance with the Clean Air
Act on a company-wide basis. Yet, the draft Evaluation Report only mentions this in passing.
Moreover, the substantive discussion does not appear to recognize or fully appreciate this
complexity as a factor in the development of OECA's consent decree implementation strategy.
The draft Evaluation Report fails to account for the evolution of the Initiative. For
example, the OIG in the draft Evaluation Report appears to fault OECA for having an "absence
of strategic direction" for the petroleum refining priority. The OIG asserts that this is so because
some strategy documents do not have dates or a signature. We do not agree that from these facts
the OIG can conclude that OECA management did not have an idea of what it wanted to
accomplish strategically in this sector. As identified with further specificity in our comments, the
Initiative strategy did evolve over time as EPA learned more about the sector based on its
experience in the field. EPA learned, for example, that noncompliance in this sector was much
more significant and widespread than our original analysis suggested. The documents that OIG
should look to determine whether OECA had a strategic direction for this priority include not
only the petroleum refining sector strategy, but also the MOA guidance documents, the
individual regional MO As which were agreed upon at the highest management levels in OECA
and the regions, and the MOA updates. Similarly, EPA learned, and continues to learn, from its
experience as the consent decree implementation phase of the Initiative continues to evolve.
Many of those lessons learned have already been incorporated into the consent decree
implementation process and have resulted in a significant improvement in responding to consent
decree deliverables.
The OIG fails to recognize the severe resource constraints under which the Initiative
operates, and the innovative approach EPA employed to overcome these resource
constraints. First, the OIG in the draft Evaluation Report criticizes the level of resources
committed to the Initiative. However, the OIG fails to consider the total level of resources
available to OECA's air enforcement program overall (covering the Refinery Initiative as well as
55

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all other air enforcement activities). Because this is nowhere taken into account, the critique of
the resource levels supporting the Initiative is wholly without context. Had the OIG included this
in the assessment, the leveraging benefits of the "global consent decree" approach would have
become apparent.
Second, as a corollary proposition, and perhaps more importantly, the draft Evaluation
Report nowhere acknowledges or considers the level of resources that would have been required
to secure company-wide compliance and "beyond compliance" commitments had the innovative
"global" settlement approach not been used. A refinery-by-refinery, issue-by-issue approach in
which and individual inspection(s) or investigation(s) is conducted at each and every refinery
followed by information request(s), notice(s) of violation, negotiations and/or litigation would
take many years from the inception of the investigation to a final resolution. The resources that
the Agency would have needed to expend under those circumstances to obtain company-wide
compliance under the New Source Review, new source performance standards, benzene waste,
and leak detection and repair programs would have been beyond our means. By way of
illustration, during the fiscal year 2001 and 2002 timeframe, EPA conducted inspections or
investigations at 7 facilities for compliance with new source performance standards and leak
detection and repair program requirements. On just these two areas, EPA inspectors spent, on
average, approximately 366 hours (with a high of 702) at each facility. Had EPA addressed the
refinery non-compliance issues in such a piecemeal fashion, using the high end of this range
(which is conservative since those investigations covered a narrower set of compliance issues),
we estimate that EPA would have expended nearly 15 full-time equivalents or 29,400 hours to
inspect each of the 42 refineries now covered by global consent decrees. This level of resources
is unavailable to OECA to devote solely to compliance in a single industry, without
compromising efforts elsewhere.
Additionally, under the refinery-by-refinery, issue-by-issue approach, the scope of
injunctive relief at each separate facility would typically be limited to correcting those violations
identified during the inspection or investigation. By leveraging activities at fewer facilities to
support a company-wide settlement on a broad range of emissions issues using the global
approach, EPA extended its reach and effectiveness far more efficiently than it otherwise would
have. Rather than recognize OECA's approach in the Initiative as a creative solution in the face
of limited resources that was developed and spearheaded by those charged with accomplishing
results, the draft Evaluation Report overlooks this almost completely.
Conclusion
In an era of shrinking resources, it is OECA's view that the OIG unfairly criticizes a
creative and innovative approach to extending the reach of OECA's air enforcement program's
efforts to address the difficult compliance challenges presented by the petroleum refining
industry. The draft Evaluation Report lacks balance, overemphasizing shortcomings and failing
to provide a robust discussion of accomplishments. Moreover, the OIG vastly underestimates the
complexity of refinery operations and of the controls necessary to reduce emissions, as well as of
the resource implications of the evaluation's various recommendations. It also consistently
understates (or simply fails to give credit for) the "beyond compliance" aspects of the consent
56

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decrees and of the benefits of a "global" approach to settlement. Finally, the draft Evaluation
Report does not display a real understanding of the enforcement program as a whole, nor of how
the Initiative fits within that larger context. As a result, and without any basis for comparison,
the draft Evaluation Report draws unsupported and unsupportable conclusions regarding the
Initiative, the accomplishments achieved to date under the Initiative, and how those
accomplishments compare to other enforcement efforts.
Attachments
57

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Responses to Proposed Recommendations
Chapter 3
Recommendations 3-1, "Develop clear overall refinery program goals that allow for future
assessment or measurement and include timetables for accomplishment"; 3-2, "Instruct OECA
refinery program managers to develop clear goals specifically for the refinery program's
implementation phase and 3-3, "Ensure that all goals and performance measures are
understood and shared by everyone involved in the national petroleum refinery program,
including all EPA and State staff involved in some portion of consent decree implementation. "
[This comment now refers to Recommendations 2-1, 2-2, and 2-3.]
Concur. As discussed in detail in the preceding comments, OECA believes that the
refinery program's goals have been clearly articulated since the national strategy was initiated in
1998, and that as the program evolved they were further reflected in MO As, etc. in the following
years. As a general matter, OECA agrees with these recommendations and will continue to
develop and articulate appropriate goals and performance measures.
Following the identification of refineries as an enforcement priority for FY96/97, OECA soon
recognized the need for a comprehensive national strategy. It then developed a flexible,
integrated strategy (including sub-strategies) to address issues of widespread compliance and
enforcement concern at petroleum refineries. The resulting 1998 strategy was developed in close
consultation and coordination with the Regions, the Office of Compliance and the Office of
Regulatory Enforcement's media-specific enforcement divisions. It has remained largely
unchanged since then, with a focus on targeted investigations of "marquee" issues at petroleum
refineries and the goal of 50% improved compliance and 20% reduced emissions. The national
petroleum strategy and its implementation were regularly discussed at the staff level and
periodically reviewed by senior management in meetings, during conference calls and through
the MOA process. Periodic progress updates have also been and will continue to be circulated to
OECA management and the regions, but the extent to which specific individuals clearly
understand the national strategy, including its sub-strategies, goals and objectives, may depend
on the level of their direct involvement in these processes and communications.
Recommendation 3-4, "Instruct OECA refinery program managers to use existing EPA, OECA,
and outside guidance to develop reliable performance measures to assess their progress toward
meeting national program goals. Specifically, managers shouldfully implement OECA 's
performance-based approach to program management as described in its December 18, 2002,
Recommendations for Improving OECA Planning, Priority Setting and Performance
Measurement, which specifies development of plans and reliable performance measures, to the
remaining phases of the petroleum refinery program. "
[This comment now refers to Recommendation 2-4.]
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Concur. OECA has already begun to implement this recommendation (planned for prior
to the Evaluation), as priority planning process consistent with existing OECA guidance for FY
2005 has already been initiated.
Recommendation 3-5, "Validate and build upon the refinery program logic model we developed
during the evaluation, and consider developing similar program logic models for other OECA
programs to develop a clear consensus on program goals and how a program is intended to
work."
[This recommendation was eliminated from the final draft.]
Non-concur. OECA does not agree that several of the short-term, intermediate and long-
term outcome measures in this logic model are appropriate benchmarks forjudging the
effectiveness of a compliance and enforcement program. These goals - such as "increased
flexibility for refineries to expand or upgrade operations" - are not realistic or likely to be
obtained in an adversarial enforcement context. The absence of recommendations for how
OECA would benchmark the "before" conditions and measure changes over time for these
ultimate outcomes means that there is no basis for OECA to determine whether these measures
are feasible. However, OECA does agree that it should use appropriate performance measures
and outcomes to measure performance under the Initiative, and intends to do so as part of the FY
2005 priority planning process.
Recommendation 3-6, "Instruct OECA managers to verify emissions reductions predicted in
consent decrees on a quarterly basis. Verification might include establishing a detailed
monitoring system, which could contribute to refinery program performance measurement. "
[This comment now refers to Recommendation 2-6.]
Non-concur. As noted in the detailed comments on this issue, OECA does not believe
that this is an appropriate or effective use of resources. Furthermore, the recommendation
fundamentally misconceives the timing of reductions under the decrees, which does not happen
immediately upon lodging or entry of the decree (as is apparently assumed), with regular
reductions on a steady quarterly basis. In part because these facilities are operating under court
order, and are required to submit reports and certify regarding their compliance with consent
decree requirements (punishable by contempt and/or criminal sanction), there are sufficient
indicia of reliability such that quarterly oversight of emissions reductions is not necessary.
Significantly, the recommendation does not take into account the resource implications of this
level of monitoring - both with respect to those available for the Initiative (failing to recognize
that this work would need to be performed and/or reviewed by the same group of national experts
responsible for all other aspects of the Initiative), as well as those available to the air enforcement
program and OECA as a whole. Even if OECA agreed that this level of monitoring is
appropriate, it is not clear how this would be accomplished within the current resource levels and
in light of other priority activities. On balance, these resources are better utilized if devoted to
addressing compliance issues in other industry sectors. Notwithstanding the foregoing, OECA
agrees that it is important to track emissions reductions under the consent decrees, as appropriate
given the consent decree milestone dates.
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Recommendation 3-7, "Instruct OECA refinery program managers to gather, analyze, and
report relevant program data to support overall OECA organizational decision making, and
daily program decision making. "
[This comment now refers to Recommendation 2-5.]
Concur. As with Recommendations 3-1 through 3-4, OECA agrees with the principle
embodied in this recommendation, and will take steps to implement appropriate data gathering
and analysis to support program decisionmaking. However, in light of activities identified in
response to Recommendations 3-1 through 3-4, this recommendation appears redundant and
unnecessary.
Recommendation 4-1, "Instruct its consent decree tracking contractor to resume tracking both
company due dates for reports and EPA response due dates so that OECA and outside parties
can easily track company and EPA responsiveness. "
[This comment now refers to Recommendation 2-7.]
Non-concur. As discussed in the detailed comments above, OECA does not agree that it
is necessary to further revise the tracking system at this time; this recommendation has been
overtaken by events. During the time that OIG was conducting its investigation, OECA itself
identified some deficiencies with its tracking system, and appropriate revisions were made (note
that due dates for reports and EPA responses continue to be tracked under each consent decree's
Master Inventory). The critical issue is not simply tracking, but responding to those reports
requiring an EPA response. Changes have already been made to address this. For example, in
January 2004, Matrix and Region 6 tracking systems were compared and verified for accuracy
and usefulness, and a single system was selected for implementation nationally, and access
provided to all parties responsible for consent decree implementation - including companies. In
addition, changes to requirements for company submittals have been made to subsequent
consent decrees to better manage the process. Furthermore, substantial progress has been made
to reduce the backlog, indicating that the current approach is having the desired result.
Chapter 4
Recommendation 4-2, "Create a comprehensive tracking plan and system that outlines specific
responsibilities for OECA staff, EPA Regions, State and local air pollution control agencies, and
companies."
[This comment now refers to Recommendation 2-8.]
Non-concur. OECA does not agree that this recommendation is necessary. Sixteen states
are parties to global refinery consent decrees and currently receive copies of all consent decree
submissions that relate to each refinery within their states. OECA staff, EPA Regions and
state/local authorities who are parties to the consent decrees are and continue to be reflected in
the consent decree implementation plan. Specific tracking tools (e.g., Master Inventories and
Activity Lists) are circulated on a monthly basis to all necessary participants. As discussed
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above, EPA has a comprehensive consent decree tracking protocol that is being implemented
through our contractor. Subject to claims of privilege and confidentiality, OECA does not object
to any interested non-party, including other states and local authorities, requesting tracking
information from Matrix at its own expense.
Recommendation 4-3, "Provide additional training at the regional level, and empower regional
experts to review and respond to company reports. Allow national technical leads to spot-check
responses from regional experts to ensure national consistency. "
[This comment now refers to Recommendation 2-9.]
Concur. OECA agrees with this recommendation, and has provided (and will continue to
provide) appropriate training as needed.
Recommendation 4-4, "Develop a formal feedback system to ensure that OECA's workforce and
managers have a common understanding of implementation responsibilities, a common
perspective on the status of implementation, and the ability to expeditiously address
implementation issues."
[This comment now refers to Recommendation 2-10.]
Non-concur. As explained in the detailed comments, in light of the small staffing level
and their overlapping responsibilities, a formal feedback system is not necessary. Should the
number of staff substantially increase in the future, a feedback system may be appropriate at that
time.
Recommendation 4-5, "Ensure frequent and open communication between partners (States,
regions) and headquarters about responsibilities for executing portions of strategies so that
misconceptions or confusion can quickly be eliminated. "
[This comment now refers to Recommendation 2-11.]
Concur. OECA will continue to communicate with Initiative partners.
Recommendation 4-6, "As discussed with OECA managers, include consent decree
implementation in OECA priorities and strategic plans, allocating staff and resources to
implementation until OECA completely implements all consent decrees. "
[This comment now refers to Recommendation 2-12.]
Concur. OECA agrees with the principles underlying these recommendations, and efforts
have already begun for FY05 implementation on these matters. OECA will continue to allocate
adequate resources to the Initiative whether it is identified as a national priority or part of the
core program.
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Recommendation 4-7, "Develop a plan for allocating negotiation and implementation resources.
Use resource planning in new initiatives to determine the predicted workload associated with the
initiative; allocate training, education, and development resources; and provide for office-wide
reevaluation of the resource plan. "
[This comment now refers to Recommendation 2-13.]
Concur. This recommendation has been overtaken by events (priority planning for
FY05), and implementation and other resources will be allocated in concert with other OECA
priorities and core programs requirements. Office-wide (and Region-wide) reevaluations are
considered as part of regular planning processes.
Chapter 5
Recommendation 5-1, "Disseminate the lessons learned from the refinery program to OECA
staff to benefit other compliance efforts, obtain additional feedback from stakeholders -
including States, industry, and environmental groups - on other lessons learned, and update
OECA's "Framework for a Problem-Based Approach to Integrated Strategies "for on-going and
future industry-specific enforcement programs. "
Concur in part, non-concur in part. OECA does not agree that revisions to the recently-
issued Framework for Problem-Based Approach to Integrated Strategies (November 2002)
("Framework") are needed to reflect lessons learned from the Initiative. Rather, the lessons
learned from EPA's Refinery Initiative have informed and continue to inform the Agency's
evolving problem-based approach to solving environmental compliance problems. For example,
OECA is currently engaged with the Regions in developing performance-based strategies for
each of the national priorities selected for FY05-07. As part of that effort, EPA is reviewing and
refining, where appropriate, the goals and the strategies for the refinery initiative. In developing
these performance-based strategies, OECA and the Regions will be guided by the recently-issued
guidance, Template for Developing a Performance-Based Strategy for National Compliance and
Enforcement Priorities (Final Draft February 18, 2004) as well as the Framework. As EPA gains
more experience in the development and implementation of such strategies, we will refine
guidance on the use of such strategies where needed.
Recommendation 5-2, "Designate a senior OECA executive to assume the role of champion for
the refinery program to ensure (a) that all refiners enter into consent decrees or face appropriate
alternative enforcement actions, and (b) consent decrees are effectively implemented. "
Concur in part, non-concur in part. As noted above in the comments on the "Conclusion"
section, OECA does not agree that there is no "champion" for the Initiative. However, OECA
agrees with the need for national enforcement priorities to be managed by a senior enforcement
official (e.g., Division Directors or their Associates), working on a team with other senior
managers from EPA headquarters, regions and DOJ. Since 2002, the senior enforcement official
responsible for managing the refinery initiative has and continues to be the Associate Director of
ORE's Air Enforcement Division, who is now serving as the Acting Director of the Air
Enforcement Division. OECA agrees that the Air Enforcement Division Director is responsible
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for ensuring that (a) refineries enter into consent decrees or face appropriate enforcement action,
and (b) consent decrees are effectively implemented. OECA does not agree that it is necessary
for EPA to settle with or litigate against all refiners in the industry under the Initiative. The goal
of the Initiative is and has been to increase compliance by 50% and decrease emissions from
refineries by 20%. The "100%" goal suggested by OIG miscomprehends the purpose of a
"priority." Even after this is no longer a priority, further work in this area would be undertaken
through the "core" program guidance, including the potential for multi-regional priorities, as well
as the potential for State efforts. OECA's work in an area is not just be driven by a coverage
number, but by whether there continues to be an appropriate federal role. OECA designates a set
of national priority criteria {i.e., significant environmental benefit, pattern of noncompliance,
appropriate federal role), and following the return of refineries to the "core" program certain
refineries may be better handled by States or as part of a multi-regional priority. OIG's
suggestion of "all" refineries lacks the context of taking into account all of our regulatory
partners, and that certain types of facilities are best addressed at different levels.
Recommendation 5-3, "Consider designating a senior OECA executive to assume the role of
champion for each of the other enforcement priority areas. EPA and industry officials should
recognize the champion as knowledgeable and as having the authority to make decisions related
to the priority area. "
Concur in part, non-concur in part. The determination of whether any particular initiative
or priority area requires an OECA-designated "champion," and at what level, will be made on a
case-by-case basis as is appropriate in light of all relevant facts and circumstances. For those
areas that have been selected as national enforcement priorities for FY 2005, senior OECA and
regional management have been named as "champions for the purpose of developing
performance-based strategies for each priority area. In addition, the OECA Planning Council,
which meets monthly, will regularly assess progress implementing, and results achieved through
the priority performance-based strategies. In order to ensure that adequate progress is being
made towards achieving priority goals the Planning Council will modify performance-based
strategies as needed, and make recommendations to the OECA Assistant Administrator for
flexibly deploying resources to address workforce gaps.
Recommendation 5-4, "Develop a communications plan for refinery consent decree
implementation. The plan should clearly describe the roles and responsibilities of all
stakeholders, including refinery priority area experts and regional and State officials. "
Concur. OECA is already in the process of priority planning for FY 2005 (begun prior to
the Evaluation), which will result in a revised performance-based strategy for the refinery sector.
The performance-based strategy for FY 2005 will outline the path forward in (a) completing the
refinery sector as a national priority and (b) ensuring that refineries governed by federal consent
decrees comply with the terms and conditions of their consent decrees.
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Appendix H
OIG Evaluation of EPA Comments
On April 2, 2004, OECA provided us with a memorandum summarizing its overall comments,
including its comments on the recommendations. We included the full text of OECA's summary
memorandum as Appendix G. In this Appendix, we highlight and evaluate specific comments
from OECA's summary memorandum. We organized this Appendix along the same lines OECA
used in its summary memorandum. OECA also provided us with detailed comments as an
attachment to its memorandum. We have posted this attachment and our evaluation of OECA's
comments on our web site at http://www.epa.gov/oig/publications.htm. We modified the text as
we determined appropriate based on OECA's detailed comments.
OECA stated that the report will help to EPA as it continues to implement the refinery program
and other initiatives. OECA also stated that the report had several significant shortcomings.
OECA stated that the report unfairly criticized a creative and innovative approach to address the
difficult compliance challenges presented by the petroleum refining industry.
OECA agreed with 10 of the 18 recommendations in our official draft report, partially agreed
with 3, and disagreed with 5. We included a summary of OECA's chapter-specific comments
and our evaluation of those comments at the end of each chapter.
We made various changes to the report as we determined appropriate based on OECA's
comments. We also eliminated some unnecessary detail, and combined the information
previously in draft report Chapters 1 and 2 into a single chapter (now Chapter 1), and Chapters 3
and 4 into a single chapter (now Chapter 2) to clarify our message. We renamed draft report
Chapter 5 as Chapter 3. In addition, we eliminated a recommendation concerning the use of a
logic model because the logic model is only one of several possible means that OECA may
employ to achieve the ends we advocate.
Report Confidentiality
OECA requested that the final report remain confidential in its entirety because the report
findings may adversely impact current and future negotiations with the refinery industry. We
asked OECA to identify specific enforcement sensitive portions of the report, or portions where
the release would damage negotiations; OECA did not do so. We believe the report provides an
accurate evaluation of the refinery program at a point in time and makes recommendations that
can improve program implementation and results.
Errors, Omissions, and Misstatements
OECA stated that the draft report contained errors, omissions, and misstatements. Where the
Agency clearly identified specific errors, omissions, or misstatements, and where we either
already had specific evidence supporting the Agency's suggested changes or where the Agency
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provided specific evidence supporting different facts as part of its written comments, we made
appropriate changes to the report.
Historical Context
OECA stated that the draft report did not place the petroleum refining priority in its proper
historical context, did not reflect an understanding of the many challenges that OECA overcame,
and gave the impression that all necessary management systems had fully matured when the
program began. OECA also stated that we should mention the 1994 OECA reorganization,
which marked a nearly complete overhaul of EPA's compliance and enforcement business
model.
We believe the report places the petroleum refining priority in its proper historical context given
our evaluation scope and objectives. We understand the challenges that OECA overcame and
believe the report reflects that fact. For example, in Chapter 1 of the report, we describe how
EPA shifted from routine Clean Air Act inspections to more targeted, resource-intensive
investigations that focused on carefully assessing emissions released as a result of refinery
processes. We also believe that OECA could have done a better job planning and implementing
the program whether or not its various management processes had fully matured in 1996 when
the refinery program began. Further, we did not state in the report that any of these processes had
fully matured, although we believe they should have matured sooner than they did.
Balance
OECA stated the draft report was unbalanced and did little to highlight the program's successes.
OECA stated that the settlements with refiners contain substantial "beyond compliance"
requirements and, taken together, represent a breadth and depth of coverage not previously
realized in the enforcement program.
We believe the report is well balanced and adequately highlights the program's success. For
example, we recognize in Chapter 1 that EPA obtained settlements with 11 petroleum refiners
representing 39 percent of the nation's domestic refining capacity and covering 42 separate
refineries and the settlements address each of the four priority areas under the refinery program.
Chapter 1 also recognizes that the settlements contain "beyond compliance" requirements and
describes OECA's compliance assistance and incentives developed as part of the refinery
program. In Chapter 3, we describe the lessons learned from the refinery program, such as
focusing on specific enforcement concerns, pulling together EPA staff with knowledge about the
industry, using in-house experts, focusing on the end result, and encouraging and requiring the
development of new emissions control technologies.
Complexity of the Issues
OECA stated that the draft report did not demonstrate an appreciation for the complexity of the
issues EPA successfully addressed and the refinery program's unprecedented scope.
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We believe the report demonstrates a keen appreciation for the complexity of the issues EPA
addressed. Without becoming too technical, the report provides sufficient and succinct
background on the complexity of the industry and the compliance issues addressed under the
refinery program and in the global consent decrees. For example, Chapter 1 references Appendix
C that illustrates the complexity of the petroleum refining process, explains why OECA used
EPA national experts in investigating compliance, and summarizes the four priority areas
addressed under the refinery program and the consent decree requirements for each priority area.
Readers should not interpret our succinct descriptions of the four priority areas to mean that we
did not appreciate or understand their complexities. In addition, in Chapter 3, we describe how
refinery program staff applied technical expertise to gain knowledge of the industry and
compliance issues, and to obtain credibility with the industry on its technical aspects. We cannot
comment on the "unprecedented" scope of the refinery program because we did not compare it to
all other enforcement programs conducted by EPA.
Program Evolution
OECA stated that the draft report did not account for the program's evolution. Our official draft
report referred to an "absence of strategic direction" for the refinery program and OECA stated
that, "We do not agree that from these facts that OIG can conclude that OECA management did
not have an idea of what it wanted to accomplish strategically in this sector." OECA stated that
the strategy evolved over time as EPA learned more about the sector based on its experience in
the field. As evidence of its strategic direction, OECA suggested that we look at Memorandum
of Agreement guidance documents, the individual regional Memorandum of Agreements agreed
upon at the highest management levels in OECA and the regions, and Memorandum of
Agreement updates. Similarly, OECA stated that EPA learned, and continues to learn, from its
experience as the consent decree implementation phase continues to evolve. OECA stated that it
has already incorporated many lessons learned into the consent decree implementation process,
resulting in significant improvement in responding to consent decree deliverables.
We believe the report appropriately communicates that the strategy evolved over time as EPA
learned more about the refinery sector. The report recognizes that OECA learned from
implementation experiences and took steps to address its challenges. Chapter 1 clearly describes
the evolution of the refinery program from inspections to investigations, through global
settlements and consent decree implementation.
Although we do not believe the report conveyed that OECA "did not have an idea of what it
wanted to accomplish strategically in this sector," we believe EPA could have done a better job
of communicating and documenting its goals and strategy. We discuss these issues in greater
detail in Chapter 2.
To determine whether OECA had a strategic direction for this priority, we looked at not only the
petroleum refining sector strategy documents, but also the Memorandum of Agreement guidance
documents and updates OECA referred to in its comments. As we describe in Chapter 2, some
OECA officials told us the information in the Memorandum of Agreement documents was not
entirely accurate or they were not familiar with the information. Based upon meetings with
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senior OECA officials, we concluded that not all managers and staff used or even considered the
Memorandum of Agreement documents for planning and managing the refinery program.
Resource Constraints
OECA stated that we did not recognize the severe resource constraints under which the refinery
program operates and the innovative approach EPA employed to overcome these constraints.
OECA stated that we did not consider the total level of resources available to OECA's air
enforcement program and, had we done so, we would have realized that OECA leveraged
benefits through its "global consent decree" approach. OECA stated that by leveraging activities
at fewer facilities to support company-wide settlements on a broad range of emission issues, EPA
extended its reach and effectiveness far more efficiently than it otherwise would have. OECA
stated it applied a creative solution in the face of limited resources.
We fully recognize the resource constraints under which this and all EPA programs operate, and
we believe the report accurately describes the approach EPA employed to overcome resource
constraints. We did not evaluate the amount of resources EPA chose to devote to the refinery
program compared to the total amount of resources OECA made available to its overall air
enforcement program or to other OECA programs. While we originally planned to conduct
evaluations of OECA's entire suite of enforcement priorities, OECA persuaded us to first pilot
our approach in a single priority area. In consultation with OECA, we chose the refinery sector
for our pilot. We also consulted numerous times with senior OECA officials over several
months at the beginning of this evaluation in determining the evaluation's scope and objectives.
Throughout our extensive consultations, OECA staff never suggested that we include among our
objectives a comparison of resources devoted to various other enforcement programs such as
OECA suggested in its comments.
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Appendix I
Distribution
EPA Headquarters
Administrator
Acting Assistant Administrator, Office of Enforcement and Compliance Assurance
Assistant Administrator for Environmental Information
Director, Office of Regulatory Enforcement, Office of Enforcement and Compliance
Assurance
Director, Office of Compliance, Office of Enforcement and Compliance Assurance
Acting Director, Air Enforcement Division, Office of Regulatory Enforcement, Office of
Enforcement and Compliance Assurance
Comptroller (2731 A) (2724A)
Agency Followup Official (the CFO) (271 OA)
Agency Audit Follow-up Coordinator (2724A)
Audit Follow-up Coordinator, Office of Enforcement and Compliance Assurance
Associate Administrator for Congressional and Intergovernmental Relations (1301 A)
Acting Associate Administrator for Public Affairs (1101 A)
Director, Office of Regional Operations (1108A)
Inspector General (2410)
EPA Regions
Regional Administrators
Regional Audit Follow-up Coordinators
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