Exclusive-California Bay area regulators probe Phillips 66 refinery work -email By Reuters

by Msnbctv news staff

© Reuters. FILE PHOTO: U.S. oil firm Phillips 66 headquarters in Houston, Texas, U.S., September 27, 2020. Image taken September 27, 2020. REUTERS/Gary McWilliams

By Laura Sanicola

(Reuters) – California Bay Space regulators are investigating whether or not Phillips 66 (NYSE:) didn’t receive essential permits to supply renewable fuels at its oil refinery in Rodeo, in accordance with an e-mail reviewed by Reuters.

The refiner is present process a multi-step conversion of the plant to show it into the world’s largest producer of renewable fuels utilizing feedstocks comparable to soybean oil and animal fat. California is the most important gasoline market in the US, however among the state’s 14 refineries usually are not all the time worthwhile. A number of wish to survive long run by cashing in on state incentives for manufacturing of lower-carbon fuels.

Phillips 66 began to course of small volumes of soybean oil on the Rodeo refinery within the first quarter of 2021, the corporate mentioned this yr.

The Bay Space Air High quality Administration District (BAAQMD), which regulates stationary sources of air air pollution within the area, is investigating whether or not the corporate modified its refinery with out getting required extra permits, in accordance with an e-mail final week seen by Reuters.

Phillips 66 desires the Rodeo venture to supply greater than 800 million gallons of renewable diesel, renewable gasoline and sustainable jet gasoline yearly. That effort requires elevated use of hydrogen, which may trigger flaring occasions and refineries to malfunction, environmental teams say.

A minimum of 10 teams, together with the Nationwide Assets Protection Council, have complained to regulators concerning the extra emissions produced through the use of extra hydrogen to deal with feedstocks like soybean oil and animal tallow.

The NRDC, in a July letter, argued that Phillips 66 didn’t request correct approval from the air high quality administration district to start out processing that oil this yr.

The administration district, in its e-mail this month to NRDC, mentioned it would conduct an on-site investigation and engineering evaluate of the Rodeo facility, the e-mail mentioned.

Phillips 66 instructed Reuters it obtained the required permits to supply renewable diesel from an current hydrotreater as a part of a standalone flexibility venture. The administration district declined to remark.


The renewable diesel market is small however rising rapidly. The U.S. Power Division initiatives will probably be about 7% of the general diesel pool by 2030. Refiners see it as a possibility to shift to lower-carbon fuels whilst electrical autos develop into extra in style.

In contrast to refining petroleum merchandise, producing these fuels requires extra hydrogen to take away oxygen from fat and oils used for making renewable fuels. Teams together with the NRDC, the Sunflower Alliance and the Rodeo Residents Affiliation instructed regulators they’re involved air emissions on the facility will improve due to this course of.

Phillips 66 mentioned it doesn’t want to extend Rodeo’s capability to generate hydrogen, and mentioned estimated emissions from hydrogen technology will likely be a part of Contra Costa County’s unbiased Environmental Affect Report, which isn’t but full.

“We’re assured the evaluation within the EIR will show the venture stands to considerably scale back emissions from the power,” Phillips 66 mentioned in an announcement.

Environmental teams say the power might want to add extra hydrogen technology capability than what’s permitted, notably if the refiner makes use of soybean oil.

Hydrogen-related reactions brought about seven flaring occasions on the Rodeo and the close by Marathon owned Martinez refineries within the final 5 years, inflicting the models’ hydrotreaters, hydrocrackers and different models to malfunction, in accordance with reviews filed by the refiners with regulators.

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