Valero Energy faces air pollution lawsuit

MOSCOW (MRC) -- The Texas Attorney General office filed a lawsuit Friday against Valero Energy for ongoing air pollution at its Port Arthur refinery in Texas, according to Hydrocarbonprocessing.

The lawsuit was filed in the Travis County District Court in Austin, Texas on behalf of the Texas Commission on Environmental Quality (TCEQ). The Attorney General's office claims that the Port Arthur refinery has engaged in air emissions violations since 2014, including releases of benzene, particulate matter, sulfur dioxide, volatile organic compounds and hydrogen sulfide.

“For several years, the Refinery has been plagued with continuing problems associated with operator errors and equipment malfunctions resulting in emissions events that emit unauthorized air contaminants into the environment. Since 2014, approximately 38 emissions events occurred at the Refinery - events caused by operator errors or equipment malfunctions.,” the Attorney General's office said in the filing.

The suit alleges that despite enforcement taken by the TCEQ and the US Environmental Protection Agency against Valero for past violations, "poor operational, maintenance and design practices continue to cause emissions events and unauthorized emissions of air contaminants from the Refinery into the environment."

According to the Houston Chronicle, Valero Energy spokeswoman Lillian Rojas said the refiner is working to address the concerns.

"Valero is committed to working cooperatively with the TCEQ and Attorney General to resolve the State of Texas’ enforcement concerns, Rojas said. "Valero takes compliance seriously and has made substantial strides in reducing emissions from the Port Arthur Refinery.

Harris County in Texas plans to sue Valero Energy Corp for pollution from its Houston refinery, the head of the county’s environmental law department said.

The suit will be brought under a provision of the US Clean Air Act that allows citizens to sue over pollution, said Rock Owens, managing attorney of the environmental practice group in the Harris County Attorney’s Office.

In recent years, environmental groups like the Sierra Club and Environment Texas have filed citizen lawsuits against refineries and chemical plants, but it is rare for governments to do so, Owens said.

"It’s been extremely unusual in Texas," he said. "I can’t speak to the rest of the nation."

The lawsuit, which would be filed in federal court must be preceded by a 60-day notice to Valero, the nation’s second largest refiner, the Texas Commission on Environmental Quality and the US Environmental Protection Agency. Owens expects that notice will be issued this summer.

The Valero refinery is bordered on one side by the Manchester neighborhood in east Houston along the Houston Ship Channel. Residents of the largely Hispanic neighborhood have repeatedly blamed pollution from area refineries and chemical plants for health problems.

"This is an area where people have been crying for relief for years," Owens said.

As MRC reported before, in early May 2018, CB&I has announced that its CDAlky technology had been selected by Valero Refining - New Orleans LLC for its St. Charles Alkylation Project located in Norco, Louisiana
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MOSCOW (MRC) -- The gasoline-producing unit at Marathon Petroleum Corp’s 585,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, may remain shut for two to eight weeks for repairs, reported Reuters with reference to sources.

The 140,000-bpd gasoline-producing Fluidic Catalytic Cracking Unit 3 (FCCU 3) was shut on June 29 to repair a leak, the sources said.

The refinery’s 65,000 bpd reformer, called Ultraformer 4, is also shut down, according to the sources.

A Marathon spokesman was not immediately available to discuss operations at the refinery, which is the second-largest in the United States and the largest the company owns.

To repair the sour water stripper, which removes ammonia and hydrogen sulfide discharged by FCCU 3, Marathon may have to rebuild a needed transformer, which could take eight weeks, the sources said. If a replacement can be purchased, the repairs may only last two weeks.

"If they find one they can buy, it will be about two weeks before they can start again," one of the sources said. "The transformer they need is hard to get."

FCCU 3 was originally shut on June 29 to repair a leak in the regenerator section of the unit.

FCCUs are divided into two sections. In the reactor section, the fine powder catalyst mixes with gas oil under high heat and pressure to convert the gas oil into unfinished gasoline.

The catalyst then goes to the regenerator section to have excess carbon removed so it can be recycled into the reactor.

When FCCU 3 was shut in late June the key naphtha desulfurization unit (NDU) was also shut. The NDU, which removes sulfur in compliance with U.S. environmental rules, has restarted.

The reformer converts low-octane naphthas into octane-boosting components blended into gasoline.

As MRC wrote previously, on April 29, 2018, Andeavor, Marathon, Mahi Inc. and Andeavor LLC entered into an Agreement and Plan of Merger (the "Merger Agreement") providing for the acquisition of Andeavor by Marathon through a merger of Mahi Inc. with and into Andeavor, with Andeavor surviving the merger as a wholly owned subsidiary of Marathon and the subsequent merger of Andeavor with and into Andeavor LLC, with Andeavor LLC surviving the merger as a wholly owned subsidiary of Marathon.
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MOSCOW (MRC) -- Higher fuel exports from China loom as the major threat to an otherwise fairly positive outlook for crude oil refiners across Asia, who have seen margins recover ahead of significant changes to the shipping industry, reported Reuters.

China has raised quotas for the export of refined products for 2019, allocating a third batch totalling 6 million tonnes, three traders told Reuters on Wednesday.

This brings the total allowed for the year so far to 48.15 million tonnes, up from 43 million tonnes for the same period last year. China allocates export quotas in batches throughout the year and has steadily been increasing these since 2015 when refining capacity started to exceed domestic demand.

There is no guarantee that all of the quotas will be used. But it’s worth noting that China’s exports of refined fuels were 32.52 million tonnes in the first half of the year, up 7.3% from the same period in 2018.

The quotas were granted to four state-owned companies including top refiner Sinopec, PetroChina, Sinochem Group and CNOOC Group.

Private refiners such as Hengli Petrochemical Co , which commissioned its 400,000 barrels per day (bpd) plant this year, didn’t receive quotas.

But it doesn’t really matter who gets the quota because if Hengli can’t export, it will sell into the domestic market and displace supplies from those refiners who are authorised to export.

This means the chances are that China will continue to export increasing volumes of gasoline, diesel and jet kerosene into Asian markets.

China customs figures show that diesel exports were 18.2% higher in the first half of 2019 compared with the same period a year earlier, coming in at about 496,000 bpd, while jet kerosene shipments jumped 21.9% to 364,000 bpd.

China’s gasoline exports were down 8.8% in the first half to about 318,000 bpd, but the new quotas granted make it likely that these will rise in the second half of this year.

This could put downward pressure on Asian refining margins, which have been recovering in recent weeks, with the profit from processing a barrel of crude in Singapore DUB-SIN-REF reaching USD9.37 in July, the highest in nearly two years. It has since fallen back to $6.09 a barrel, but this is still well above the USD1.52 low for the year, reached in late January.
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MOSCOW (MRC) -- BP does not expect supply from additional biofuel capacity in Brazil - where it is combining its unit with US grain trader Bunge's - to replace diesel and gasoline demand, BP's head of Alternative Energy, Dev Sanyal, told Reuters.

Through the deal BP will increase its biofuel production to 22 million tonnes from 10 million tonnes a year, firmly focusing on Brazil as its biofuels production and consumption hub.

To grow, BP expects to squeeze more out of the existing assets of the combined entity, rather than buy more land to plant sugarcane, Sanyal said.

A BP spokesman said it was too early to talk about possible job cuts.

As MRC informed before, in April 2018, BP agreed a three-year framework crude oil deal with independent Chinese refinery Shandong Tianhong Chemicals, for annual supplies of 8 million barrels from this year.
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MOSCOW (MRC) -- LyondellBasell Industries (LBI) is cutting 68 jobs at a former A. Schulman Inc. compounding plant in Worcester, as per RubberNews.

The layoffs were included in a Worker Adjustment and Retraining Act (WARN) notice filed with the state of Massachusetts for the week of July 19. The first effective date for the layoffs is Sept. 30.

Officials with LBI in Houston could not be reached for comment.

LBI acquired Fairlawn, Ohio-based Schulman for USD2.25 billion in early 2018. That deal added 54 Schulman production sites to LBI's own 18. At the time, market watchers said that it was unlikely that all 72 sites would remain open.

In late 2018, Plastics News asked Jim Guilfoyle - executive vice president of LBI's Advanced Polymer Solutions unit, which includes the former Schulman business - about possible plant closings. He declined to comment on specific locations, but said that the unit "has a lot of integration ahead of us, but we also have platforms for growth."

Guilfoyle, at that time, pointed out that LyondellBasell plans to achieve USD150 million in cost synergies from the Schulman acquisition through several steps, including better logistics and procurement.

"We're still working through the plants," he said. "We need to optimize the footprint. We're looking at LyondellBasell sites as well as Schulman."

Schulman had acquired the 120,000-sq.-ft.Worcester plant in 2012 when it paid USD36.5 million for ECM Plastics Inc., a maker of custom compounds and color and additive concentrates. ECM employed 140 at that time and had annual sales of USD40 million.

A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds, composites and resins headquartered in Akron, Ohio. Since 1928, the company has been providing innovative solutions to meet its customers' demanding requirements. The company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The company employs approximately 5,200 people and has 54 manufacturing facilities globally. A. Schulman reported net sales of approximately USD2.5 billion for the fiscal year ended August 31, 2017.

LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell manufactures products at 55 sites in 17 countries. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
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