Flaring of gases at Torrance Refinery could cost owner millions in fees

In just the first six months of this year, flares burning high above Torrance Refinery have put six times as much sulfur oxide pollution into the adjacent residential area than air quality regulators set as the refinery's target for a full year.

The total pollution so far exceeds its annual target that refinery owner PBF Energy could face more than $13 million in mitigation fees to the South Coast Air Quality Management District.

Sulfur oxides, or SOx, is the pollutant targeted for reduction in rules adopted by the AQMD.

The refinery is required to keep its SOx level below about 55,000 pounds annually, but the refinery has already released 323,370 pounds so far this year, according to the agency's report.

Flares are a major source of SOx, which can aggravate asthma, said AQMD spokesman Sam Atwood. It also combines with other pollutants to form fine particles that can get into lungs and cause breathing and other health problems.

The company can be ordered to pay a mitigation fee of  $100,000 per ton of  excess SOx if the total is 20 percent more than its emissions target, he said.

By that standard, the company could be looking at a $13.4 million fee. Just this year, the AQMD lifted its $4 million cap on mitigation fees, Atwood said.

The amount of SOx emissions from flares at the Torrance Refinery might be recalculated to a lower amount, which could result in a lower mitigation fee, Atwood said Friday.

“While they have reported a high volume of emissions in 2017, this may be due to certain ‘default’ calculations that tend to overstate emissions,” Atwood wrote in an email. “The refinery will have an opportunity to propose an alternate calculation method.”

The Torrance Refinery put out a high amount of SOx between April and June during a renovation of the plant, said Barbara Graham, spokeswoman for PBF Energy. She said the gas being burned was mostly hydrogen, but that it mixed with other gases in the flare itself, creating the high SOx emissions.

The company is seeking a permit with the AQMD that would allow it to directly vent, rather than burn excess hydrogen in the future, she said.

She did not respond to a question about the potential multi-million dollar mitigation fee.

The sulfur oxides coming from refinery flares are but one of the regulatory challenges PBF Energy has faced since it acquired the refinery from Exxon Mobil in mid-2016. The AQMD is also drafting rules that could bar the company's use of a toxic chemical called hydrofluoric acid.

Torrance Refinery is already under an abatement order of the AQMD Hearing Board to reduce flaring caused by power outages. A series of power interruptions in late 2016 resulted in repeated smoky flares. When the refinery shuts down, the hydrocarbons circulating in the plant have to be burned off in a smoky, pollution-causing flare.

The  company told the AQMD that the refinery was underpowered, with no instantaneous source of backup electricity to keep the refinery running during a power outage.

The independent hearing board of the South Coast Air Quality Management District ordered the refinery to work with Southern California Edison on a dedicated source of electricity that would be less prone to outages. The hearing board also ordered the refinery to devise some means of keeping the refinery running if power were to be interrupted.

It's a complicated engineering task, requiring the refinery and Edison to supply the refinery with up to 100 megawatts, an amount equivalent to one-third of the power used in the entire city. The project could cost the company as much as $50 million, a company official estimated.

At a status hearing Thursday, the company said it was making progress on the design of the new power line and backup power system and that there had been no flaring caused by power outages since February. However, flaring continued from other causes, such as startups of various portions of the plant, said company attorney Michael McDonough.

In a separate action, a coalition of state and local air quality officials on Thursday released a draft report calling for improvements in air monitoring at refineries and better communications during pollution or toxic releases with the people who live and work near refineries.

This story has been updated.