Refiners criticize U.S. court ruling on safety flares

HOUSTON (Reuters) - A U.S. refiners association said on Monday the industry was blindsided by a federal court ruling in a case brought by the Sierra Club that increases the chances of companies being fined while using plant safety flares during shutdowns, start-ups and malfunctions.

Two members of a three-judge panel of the U.S. Court of Appeals for Washington D.C. ruled late on Friday that the Clean Air Act does not allow the federal Environmental Protection Agency to exempt refiners, chemical plants and manufacturers from pollution limits when starting, shutting or during the malfunction of equipment.

"The majority's decision was based on an argument not in the (Sierra Club's) brief, thus EPA and (industry associations) had no opportunity to respond," said Bill Holbrook, spokesman for the National Petrochemical and Refiners Association.

The court's ruling will require refiners to stick to pollution limits set for normal operations, said the attorney who argued for the Sierra Club.

"The basic point of the ruling is they have to follow the environmental standards at all times," said James Pew, staff attorney for Earthjustice, a nonprofit law firm that represented the Sierra Club in the lawsuit against the EPA.

U.S. environmental activists have criticized refiners and other plants for routinely using flares in the production process while claiming they were suffering a malfunction.

Giant safety flares at refineries and chemical plants are in place to burn off chemicals that cannot be processed normally. Burning them off prevents explosions which could kill or harm workers and destroy equipment.

The Sierra Club sued the EPA over the exemption, which was first issued in 1994.

The EPA may have to ask the Appeals Court for guidance in setting new rules for start-ups and malfunctions, said Jeffrey Holmstead, partner with the Bracewell & Giuliani law firm.

"By throwing out the alternative approach the EPA has used, the court leaves people wondering what they can do," said Holmstead, a former assistant EPA administrator.

The EPA said on Monday it was disappointed by the court's ruling, according to a spokesman.

"It's too early to tell what we're going to do," said agency spokesman Jonathan Shradar. "Right now, we're just reviewing the opinion."

(Editing by Christian Wiessner)