EPA Inspector General Report on Refinery Enforcement Initiative

Issued June 22, 2004.
http://www.epa.gov/oig/reports/2004/20040622-2004-P-00021.pdf

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. 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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