EPA delays carbon limits on oil refineries

WASHINGTON Mon Nov 21, 2011 3:20pm EST

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WASHINGTON (Reuters) - The U.S. Environmental Protection Agency, struggling with an ambitious agenda on clean air regulations, said it will delay proposing the country's first-ever greenhouse gas limits on oil refineries.

The delay is the latest setback for the agency's new raft of clean air rules on everything from smog to mercury pollution that are heavily opposed by industry.

The EPA had been required to propose the rules on refineries by mid-December, as part of a court settlement with states and environmental groups.

"EPA expects to need more time to complete work on greenhouse gas pollution standards for oil refineries," a spokeswoman for the agency said. The EPA is working with the litigants to develop a new schedule to replace the current mid-December date for a rule proposal, she added.

The EPA made the comments after sources on both sides of the issue told Reuters the agency would not make the deadline.

The EPA has not told refiners exactly how it plans to cut emissions, and that figuring out how to do so is taking additional time, an oil industry source said.

"How they are going to regulate greenhouse gases, they are not sharing that with us," the source said.

The petroleum industry says it is more difficult to cut emissions from refineries than it is from power plants, the EPA's top target of emissions. Many power utilities can switch from coal, which emits large amounts of carbon dioxide when burned, to burning cleaner natural gas. Refineries, however, mostly already run on natural gas, they argue.

Tough rules on greenhouse gas emissions could add expenses to companies including Exxon Mobil Corp, Valero Energy Corp, and ConocoPhillips.

But refiners can easily cut emissions -- and save money, a source with one of the litigants said. They can do so by replacing inefficient boilers, installing better valves to reduce leaks of methane, a potent greenhouse gas, and by generating power with "waste heat" given off at the plants.

The delays on greenhouse gas plans come after President Barack Obama forced the EPA in September to delay new limits on smog emissions until 2013, saying it was part of an effort to reduce regulatory burdens on business.

That decision came as Republicans in the House of Representatives complained about EPA's raft of new clean air regulations, saying they would kill jobs and add expenses to businesses as they struggle with the weak economy.

RECORD EMISSIONS

The delay comes as time may be running out for world efforts to control global warming emissions. Concentrations of carbon dioxide and two other greenhouse gases reached record levels last year and will linger in the atmosphere for decades, even if the world halts output of the gases today, the World Meteorological Organization, the U.N.'s weather agency, said on Monday.

The United States is sticking with Obama's pledge to cut greenhouse gas emissions by about 17 percent from 2005 levels by 2020. But a comprehensive energy and climate bill failed in the Senate last year, leaving emissions control largely to agencies including the EPA and the Department of Transportation. Last week those agencies proposed doubling auto fuel efficiency.

Meanwhile, U.S. CO2 emissions from energy sources last year rose nearly 4 percent as factories ran harder and as consumers boosted air conditioning during the hot summer.

The EPA has also delayed proposing a plan on reducing emissions from power plants, which are the country's single largest source of emissions blamed for warming the planet.

Those rules were initially delayed in June and again in September. Last week Lisa Jackson, the EPA administrator, said the plan on power plants would be rolled out early next year.

It was unclear if the EPA would also miss the deadline to finalize the rules on refineries by mid-November, 2012.

(Reporting by Timothy Gardner; editing by Bob Burgdorfer)

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