Saturday, November 21, 2009

Silver Eagle Refinery Explosion in Utah

There are many lessons to be learned from the catastrophic explosion at the Silver Eagle oil refinery in Salt Lake City. From a legal standpoint, it appears from published news accounts that the refinery violated several OSHA regulations.

OSHA's Process Safety Management Standard, or PSM (1), requires that a process that involves hazardous chemicals shall have inspection and tests performed (2), and such inspection and testing procedures shall follow "recognized and generally accepted good engineering practices" (RAGAGEP) (3). The owner shall also document the equipment design codes and standards employed for that equipment (4).

The Chemical Safety Board (CSB) is investigating the explosion, and has stated that the refinery's mechanical integrity program was inadequate (my paraphrase). It appears that the refinery contracted some aspects of the inspection and testing to others, who performed (among other things) wall thickness testing on pipes and vessels. However, the thickness testing yielded inaccurate results, as the cause of the explosion was a burst pipe with a wall thickness that was far below acceptable values. The pipe was too thin to hold the pressure, and burst. The subsequent release of hot hydrogen and hydrocarbons ignited and exploded.

The legal issues that could arise from this incident include (but are not limited to):

  • Breach of contract action by Silver Eagle against their mechanical integrity contractor
  • Suit for damages brought by injured homeowners against Silver Eagle
  • OSHA imposed fines against Silver Eagle for violation of 1910.119
  • Criminal actions against Silver Eagle, if the requisite degree of willfulness and culpability is established

(1) PSM is found at 29 CFR 1910.119 et seq.
(2) 1910.119(j)(4)(i)
(3) 1910.119(j)(4)(ii)
(4) 1910.119(d)(3)(i)(F)

More Refineries Closing in USA

Update 1: January 9, 2010. Shell announced they are closing their refinery at Montreal East, Quebec, Canada. Not technically in the USA, but part of the North American oil market. [end update]

The announcements of U.S. refinery closures is increasing lately, as I predicted earlier. Thus far, four have either closed or announced they will close for economic reasons, and one for safety reasons. One refinery is an interesting case, where a capital expansion project is in startup mode presently, but the existing older refinery with equivalent capacity will be shut down for an extended period.

Refining capacity is in over-supply in the U.S., with operating rates presently below 80 percent. Each refinery closure brings layoffs of hundreds of employees, with the ripple effect of additional jobs lost throughout the community. However, the green advocates insist that there are plenty of green jobs available, so it will be interesting to see if and when these green jobs materialize and put the refinery workers back to work.

Valero at Aruba - shut down (not in the USA, but exports products into the USA)
Valero at Delaware City - shut down announced.
Silver Eagle at Salt Lake City - shut down for safety following massive explosion.
Marathon at Garyville (Louisiana) - starting up new capacity and shutting down older capacity.
Western Refining at Bloomfield (New Mexico) - shut down announced.
Sunoco at Westfield (New Jersey) - shut down announced.
Shell at Montreal East (Canada) - shut down announced.

AB 32 Speech to ACEC Channel Coast

I had the pleasure of giving my AB 32 speech and presentation to the Channel Coast chapter of American Council of Engineering Companies in Ventura this past Wednesday evening, November 18, 2009. The presentation was almost identical to the one I gave a week earlier in Nashville, which can be seen here.

The group in attendance was wonderful, and as always I had a great time. The questions during and after my presentation were excellent, and showed the engineers understood that AB 32 requires the impossible in some areas, and the economically disastrous in others.

My theme was, as usual, that AB 32 has good news and bad news. The good news is that there will be plenty of work for engineers. The bad news is that there will be few, if any, clients to hire the engineers after AB 32 drives them out of business.

Bad Science and AB 32

There was quite a news story yesterday in the climate change arena, that is, a large number of computer files were copied from a British university (University of East Anglia) and published on the internet. These files contain emails, pdfs, and some computer code that, by this time, are distributed widely across the internet. The content is damaging, to say the least, and possibly incriminating as it appears several statutes may have been violated. The files are now on a website with an easy-to-use search engine here.

There are profound implications for climate change prevention laws. If, as it appears, the science has been adjusted by a few people with complete control of the data to show a warming where there either is none, or a very slight increase in temperatures, then those states and countries with laws to reduce CO2 must seriously re-think their position. There are many reasons to doubt the veracity of the CO2-is-causing-warming position, as I have written on. Not the least of these is that the fundamentals of process control require that CO2 is not causing any climate change, warmer or colder. Another is that the temperature record was manipulated to show warming, by selective additions and deletions of temperature measuring stations.

In the case of California's law, AB 32, or Global Warming Solutions Act of 2006, several observations can be made. First, the rationale for passing AB 32 has been suspect all along, but now is confirmed that there was no cause for alarm and no reason to have such a law. The seas are not rising any faster than in the past, indeed, they have stopped their rise and are falling offshore California (note the decline since 2003 to date; this is for offshore San Francisco). Heat waves are not occurring with greater intensity and frequency, in fact, there have been fewer and fewer. Polar ice caps are not disappearing, but are within the normal range and in fact are increasing for the past few years. Jobs created by green industries in California are not appearing, in fact, many industries and companies either have already shut their doors, or stated they will shut them rather than comply with the onerous burdens imposed by AB 32.

The unemployment rate in California is 12.5 percent, the highest since the 1940s, which should be much lower if green policies created jobs. California is already one of the greenest states in the USA, with high-efficiency appliances required for many decades, low electricity consumption per capita, high percentage of non-CO2 emitting electric power generation (13 percent of total power sold in the state as of January 2009 was from solar, wind, geothermal, etc), and others. Given all the green-ness in California, where are the jobs?

If the science behind reducing CO2 as a means of slowing or reversing global warming were sound, rather than made up, it would be plausible to have a law such as AB 32. But the science is unmasked, is now exposed, and is shown to be Bad Science. Accordingly, AB 32 must be repealed. A law based on bad science is a bad law. California has enough troubles without AB 32 (huge and chronic budget deficits measured in the tens of billions, exorbitant taxes, onerous environmental laws, high minimum wage law and living wage law, very high workers' compensation taxes, broken education system, inadequate water supplies, gross contamination of existing water supplies, polluted bays and beaches, overflowing jails and prisons, to name just a few).

Roger E. Sowell, Esq.

Thursday, November 12, 2009

Global Warming Laws at AIChE Meeting in Nashville

I just returned from thechemical engineers’ conference(annual meeting) in Nashville TN, where I gave a condensed version of my speech on California’s climate change law – AB 32. I finally encountered quite a number of chemical engineers who are devout believers that Carbon Is Gonna Kill Us All. Their questions after my speech were quite “vigorous.” There were, though, quite a number of people who were very complimentary after my speech. One key point is that the attendees at this meeting were primarily academics and government, who generally have the view that CO2 is a deadly greenhouse gas and must be reduced. As always I very much enjoyed making the speech and the interaction with the audience. A vigorous exchange of viewpoints is quite healthy. As it turns out, I had heard all the objections before, but it appears that they had not heard my points.
After my speech, I related to a few people the fact that attempting to regulate the globe’s average temperature by adjusting the CO2 content of the atmosphere violates the fundamentals of process control, and that started quite a discussion. Many of those in attendance are in government positions, and had never heard the process control argument before. It is likely (at least this is my hope) that the seeds of doubt were planted.
For more on this process control issue, see:
I also am delighted that I received additional invitations to speak on these matters.

I did not record my speech, but have displayed below the prepared text. When I discover how to insert the charts and graphs, I will do so.

Challenges for Chemical Engineers Under California's Global Warming Solutions Act
Author: Roger E. Sowell, Esq.*
Law Office of Roger E. Sowell, Marina del Rey, California
*Mr. Sowell is an attorney in Marina del Rey, California, who holds a B.S. in chemical engineering. He practices in the areas of climate change, energy, and engineering law.He worked for 25 years as a chemical process engineer before becoming an attorney.
California’s Global Warming Solutions Act of 2006, also known as AB 32, requires large reductions in greenhouse gas emissions by 2020. Plants and facilities that consume fossil fuels or produce power will be required to meet the regulations established under AB 32.Achieving the reductions will present many opportunities and challenges for chemical engineers, especially in the areas of oil refining, general industry, cement plants, hydrogen plants, bio-fuels, and many others.Cap and trade issues will present chemical engineers with challenges.More jobs for chemical engineers likely will result, however some plants likely will shut down rather than comply with the burdens imposed by AB 32.
History of AB 32
California’s Global Warming Solutions Act, also known as AB 32, was adopted as law in California in 2006, (1) after first being proposed as a bill in California’s Assembly in 2005.The Democrat-controlled state legislature had little hope of seeing a global warming law at the national level after Republican President George W. Bush was re-elected in November 2004. President Bush had made it clear that he would not ratify the Kyoto Accord that purportedly limits emissions of greenhouse gases (GHG) by signatory countries, nor would he sign any federal bill into law that limited Carbon Dioxide (CO2) or other GHG emissions. In that legislative environment, California’s Assembly Speaker Nunez championed AB 32 into becoming the law in California.The text of AB 32 may be found in California’s Health and Safety Code §38500 et. seq. (2)
Purpose of AB 32
AB 32 was intended to serve as a blueprint for others to follow in reducing GHGs and increasing economic activity. ARB states that, on average, for each dollar spent on AB 32 requirements, two dollars will be returned. Yet, ARB does not state when those two dollars will be returned, whether in 2 years or 40 years or more. However, many independent economic analyses concluded that the economics of AB 32’s Scoping Plan are seriously flawed. ARB states that AB 32 will increase electric power prices. The price of transportation fuels will also increase due to bio-fuels additions.For those segments of the population who are poor or on fixed incomes, who have few or no alternatives to reduce their consumption of electric power and transportation fuel, AB 32 will impose a harsh economic burden. (3)
In addition, the very concept of controlling the earth’s temperature by reducing CO2 and other GHGs is fundamentally flawed. The primary goal of AB 32, reducing global warming by reducing GHGs, is very likely unattainable because of the almost non-existent correlation between CO2 and other GHGs and global temperature. A comparison of CO2 concentration in the atmosphere, either from direct measurements from 1959 or by very good estimates from 1900 (see Figure 1), with global temperature anomalies (see Figure 2), shows that CO2 rises continually while global temperature sometimes decreases, sometimes remains constant, and sometimes increases, all for decades at a time. Fundamental process control principles show that, whatever causes global warming and cooling, manipulating CO2 is not an effective means of controlling the earth’s average temperature. Dr. Pierre Latour, Ph.D. and P.E. in chemical engineering and expert in process control, also made a compelling argument in the February, 2009, Letter to Editor section of Hydrocarbon Processing on why adjusting CO2 cannot control the earth’s temperature. (4) Dr. Latour stated that measuring the earth’s temperature is very difficult if not impossible, and under control principles, if you cannot measure it, you cannot control it. Also, Dr. Latour pointed out that there is almost no response, dT/dCO2, also indicating that CO2 is not a candidate manipulated variable.

Figure 1

Figure 2
Requirements of AB 32
               AB 32 is an enabling act, providing a few specific targets but delegating the creation 
of the detailed regulations to the California Air Resources Board (ARB) (5) .   ARB is directed to 
coordinate with and consult with appropriate agencies and stakeholders, including the Public 
Utilities Commission. (6)   The specific regulations are to “minimize costs and maximize benefits 
for California's economy, improve and modernize California's energy infrastructure and maintain 
electric system reliability, maximize additional environmental and economic co-benefits for 
California, and complement the state's efforts to improve air quality.” (7)
           Two dates are critical in AB 32: 1990 and 2020.  The total quantity of GHGs emitted in 
1990 was to be determined by ARB, and the state’s emissions are required to be reduced to 
the 1990 level by 2020. (8)  Another date and requirement is critical, although not part of AB 32, 
which is 80 percent reduction below 1990 levels by 2050.  The “80 by 50” requirement is imposed 
by the Governor’s Executive Order S-21-09 of September 15, 2009.   ARB determined that the 
1990 emissions were 427 million metric tonnes of CO2 equivalent (MMTCO2e).   The expected 
emissions of GHGs in 2020, absent the requirements of AB 32 (the business as usual case), 
are approximately 600 MMTCO2e.  The GHGs reduction required by 2020 is 173 MMTCO2e, 
which represents a 28.8 percent reduction from the business as usual case.  This reduction by 
2020 may be achievable, although at a high economic cost.  However, the reduction by 2050 
represents a 93 percent reduction over the business as usual case, which is much more 
problematic (see Figure 3).

Figure 3
       Even if California achieves its goals of GHG reductions, there will be very little impact on 
the world’s energy consumption and GHGs.  California consumes approximately 2 percent of 
the  world’s total energy (see Figure 4).  With a 28 percent reduction by 2020, there will be 
no noticeable change, and any change will be overwhelmed by increases in growing 
economies around the world. 

Figure 4
The plan to reduce GHGs to 427 million tonnes per year by 2020 was described by 
ARB in the Scoping Plan document in late 2008, which divided the California economy 
into a number of sectors.  Each sector has its own requirements for reducing GHGs.   
The Scoping Plan identified 73 separate reduction items.  Opportunities for chemical 
engineers exist in almost every sector identified in the Scoping Plan.   These 
opportunities are described in the following section. 
        The Scoping Plan has three basic reduction mechanisms: specific targets or emissions 
limits, cap and trade, and a fee for emissions.  Each economic sector has one or more of the
three mechanisms.   Some of the 73 items with the largest reductions listed in the Scoping 
Plan are shown in Table 1 below, along with the anticipated reductions in GHGs.  Table 1 also 
has Scoping Plan items with low emissions reductions that will affect chemical engineers.
Scoping Plan Item
MMTonnes CO2e/Yr
Cap and Trade
Renewable Portfolio Standard
Low Carbon Fuel Standard
Energy Efficiency (Electricity)
Combined Heat and Power
Regional Transportation Plan
Refinery Flare Gas Recovery Systems
Energy Efficiency and Co-Benefit Audits
Table 1
               The timeline for ARB to write the regulations is 2009 through 2011, with full 
implementation beginning in 2012.  A few regulations have earlier implementation dates.   
The cap and trade regulation will be finalized in 2011 with implementation starting in 2012.   
           Reporting of GHGs emissions are required for some facilities, starting with 2009.  
GHG emission reports will be verified by independent, state-approved, entities beginning 
in April 2010 for the 2009 reporting year.  Chemical engineers will make good candidates 
for the verification jobs.  Mandated reporters include all cement plants, refineries with 
emissions of at least 25,000 MMTCO2e per year (50 MMBtu/h), power plants of at least 1 MW  
plus 2500 MMTCO2e per year (5 MMBtu/h), and any other facility with the same emissions 
criteria as refineries.  Those entities that are exempt from reporting include hospitals, electric 
power plants with renewable energy sources, primary and secondary schools, portable equipment, 
and backup emergency generators.   For a comparison of some common fuels and their emission 
of CO2 compared to MMBtu, see Figure 5.

Figure 5
Opportunities for Chemical Engineers
Oil Refining
The oil refining sector will have GHG reporting and verification, cap and trade, energy audits, and specific reduction requirements. The regulations are not yet final for specific reductions, but will likely include flare gas recovery systems, electric heating systems, and low-carbon-forming catalysts for Fluid Catalytic Crackers. Also, the fired boilers will likely be replaced by gas turbine generators with heat recovery steam generators to provide process steam. The cap and trade requirement will provide great challenges and opportunities for chemical engineers as they strive to reduce GHGs by 28 percent by 2020.
One such GHG-reducing project is hydrogen production by partial oxidation of petroleum coke, with CO2 capture and sequestration. A plant to accomplish this is contemplated for Dow Chemical in Freeport, Texas. (9)
It may be more attractive for oil refiners to cease the refining function, and purchase products from other countries and have the products brought in via ships. Faced with similar legislation in Australia, Caltex announced they would shut down their refineries and operate them as oil terminals. This would entail a loss of property tax, and several hundred high-paying jobs in the community. (10)
Industry and Manufacturing
The Industry and Manufacturing sector includes semiconductor plants, cement plants, hydrogen plants, and other large facilities excluding refineries and oil and gas production facilities. Semiconductor plants are required to reduce their use of perfluorocarbons by 2012 to a level not to exceed 0.2 kg CO2e/ sq cm of wafer. This reduction in perfluorocarbons will reduce GHGs by 0.18 MMTCO2e/yr.
Cement plants are subject to cap and trade, and will likely be required to increase energy efficiency, capture and sequester CO2, switch fuels from coal and petroleum coke to natural gas, and use alternative cementitious materials rather than limestone-based clinker. Also, the concrete industry will be required to reduce waste, and that in turn will reduce cement production. At least one cement plant in California has announced it cannot remain in business by making the proposed changes under AB 32, and will shut down its operations and lay off the employees.
Hydrogen plants will be required to increase energy efficiency, minimize fuel consumed, and likely will be required to capture and sequester CO2.
CO2 Capture and Sequestration
CO2 capture and sequestration likely will be required for many processes and power plants. Such processes will present many challenges to chemical engineers, in finding appropriate CO2 removal systems, materials of construction, and low-energy consumption. CO2 sequestration also may require CO2 purification, compression, liquefaction, or chemical conversion to another compound.
Low Carbon Fuel Standard
The Low Carbon Fuel Standard refers to bio-fuels, both bio-ethanol and bio-diesel, and likely eventually to bio-jet fuel. ARB in 2009 wrote the regulation for bio-ethanol based on corn fermentation. (11) ARB’s analysis shows that corn-based ethanol consumes more energy than is obtained upon combustion in a vehicle engine; this was confirmed a few weeks later by the federal Environmental Protection Agency, EPA. Despite this, corn-based ethanol is mandated not only by California law but also by federal law. Also, there is a shortage of water in California, and corn production requires massive amounts of water. Furthermore, the Governor has issued an Executive Order that requires that 40 percent of all bio-ethanol consumed in California be produced within California. ARB estimates that 25 new ethanol refineries will be required to meet the state’s needs. It remains to be seen how the state will grow corn without sufficient water supplies.
Bio-diesel is made from both plants, usually soy beans, and rendered animal fats. Chemical engineers will have opportunities in processing the oils, but also in producing appropriate additives to ensure these bio-diesels meet all the cold temperature properties such as cloud point, cold filter plugging point, and pour point. Also, other diesel properties must be met.
At least one company, Rentech, has announced a plant to manufacture bio-diesel using the Fischer-Tropsch process with municipal solid waste as the feedstock. The bio-diesel will be used as fuel for airport ground service equipment at Los Angeles International Airport, LAX. (12)
Renewables Portfolio Standard
The Renewables Portfolio Standard requires that a large portion of all power sold in California be from renewable sources such as solar, wind, geothermal, and small hydroelectric plants. The AB 32 target and deadline is for 20 percent renewables by 12/31/2010, and 33 percent by 2020 by the Governor’s Executive Order. At then end of 2008, the state produced only 13 percent of the electrical power by renewables. Chemical engineers will be challenged to discover and produce high-yielding batteries at an economic price to store electric power until it is needed. Also, solar thermal power plants present challenges to chemical engineers in the heat storage medium, materials of construction, and process control. Furthermore, geothermal power plants require chemical engineers in the design of the various power systems, including binary systems.
Low-Friction Oils
Low-friction oils, or synthetic oils, are required under AB 32 to reduce diesel fuel consumption in heavy-duty trucks. These oils are made from poly-alpha olefins, or PAO. Chemical engineers will be involved in designing and operating PAO plants.
Waste Handling and Recycling
Waste Handling and Recycling activities that involve chemical engineers include capturing landfill gas for use as fuel, anaerobic digestors for organic wastes such as manure, and conversion of municipal solid waste to synthesis gas as fuel for power plants. A U.S. utility patent, 7,452,392, was issued in 2008 to Peter A. Nick and his team of Southern California chemical engineers for a process to consume municipal solid waste and convert the material into a medium-Btu syngas. (13) As this technology gains acceptance, chemical engineers will be required for process design, construction, and operation.
Opportunities for chemical engineers exist in water use, purification, and recycling. Processes that use water provide challenges to develop ways to use less, and purification to the point that water can be recycled instead of discharged. Water used as steam condensing heat sink may be replaced by air coolers or water-spray air coolers, with the corresponding reduction in power production. Municipal waste treatment plants will require upgrades to tertiary treatment so that effluent water may be recycled.
Cap and Trade
Many issues remain unresolved with California’s cap and trade regulations under AB 32. Chemical engineers will be affected by the rules no matter what form they take, as the required reductions in GHGs will shape the number and type of projects undertaken by the chemical engineers. The price for a carbon credit will greatly affect economic decisions, whether to build a process revision, or buy the carbon credits.
Federal Laws and AB 32
While there presently is no federal law on global warming, the U.S. House of Representatives early in 2009 passed the Waxman-Markey bill, and a similar bill is pending in the U.S. Senate. Both bills are loosely based on AB 32, with similar goals for GHG reductions by 2020 and 2050. A key difference is that California has no coal-fired power plants, although a small amount of coal is consumed in the state. Also, California is one of the few, if not the only, state with geothermal energy for renewable power production.
The federal law, if passed, will have precedence over the state law, as is the case with all such laws. California’s law may be more strict than the federal law, but may not be less strict. Therefore, it is possible that AB 32 will require amendment after a federal law is passed.
Even though reducing CO2 and other GHGs will be futile in attempting to reduce the earth’s temperature, many opportunities exist and will be created for chemical engineers under AB 32. The state’s numerous refineries, cement plants, hydrogen plants, power plants, semiconductor plants, and other large energy consumers will all be affected by being forced to reduce GHGs. However, AB 32’s requirements may be too burdensome for some, perhaps many, plants. It is anticipated that these plants will shut down rather than be forced to comply with AB 32. A similar closing of nearly half the nation’s oil refineries occurred during the past 25 years, largely as a result of environmental and regulatory requirements. Therefore, the good news for chemical engineers is that there will be plenty of work. The bad news is that there may be fewer customers and clients who will need that work.
(4) Latour, P. R., Hydrocarbon Processing, February, 2009, Letters to Editor
(5) California Health and Safety Code §38501(f)
(6) California Health and Safety Code §38501(g)
(8) California Health and Safety Code §38550
(13) see,452,392.PN.&OS=PN/7,452,392&RS=PN/7,452,392