HollyFrontier's plans to expand its Woods Cross refinery have erupted into a controversy that pits state regulators and the petroleum company against environmentalists and the U.S. Environmental Protection Agency.
The flap boils down to this: Critics say Holly has cooked the books that account for projected pollution cuts. But Holly insists its math is accurate, and its updated refinery will pollute less than its current plant does.
And now that the EPA's Denver office and others have questioned Holly's pollution balance sheet, a lawyer for the state Division of Air Quality is evaluating the arguments on both sides even though state regulators signaled their "intent to approve" Holly's expansion three months ago.
"If you look at what you can add and subtract properly, there's an increase in emissions," said Joro Walker, an attorney representing the non-profit advocacy group Utah Physicians for a Healthy Environment, which hired refinery engineers to scrutinize the proposed state permit.
She points to a 2008 consent decree that is signed by Holly, the EPA and the state, and it says reductions made under that legal document can't be counted in balancing out future emissions increases. Based on that agreement, she said, emissions of nitrogen oxides, sulfur dioxide and particulate matter (both PM2.5 and PM10) would go up if the refinery expands as planned.
"They [at Holly] are counting reductions they already had to do," Walker said.
Controls and emission reductions required by the decree should have been in effect already, and the decree prohibits Holly from claiming credit for those reductions, she said.Â In short, state regulators shouldn't be allowing Holly to use them to counterbalance increases associated with the expansion when the prospect of more pollution in an already polluted area is on the line, she said.
"Now it's up to the DAQ to take a hard look at those comments [on net emissions] and do the right thing."
Carl Daly, director of EPA's air programs at the Denver regional office, submitted comments on the state's preliminary approval Jan. 18 that echoed Walker's concerns. Several times, he notes Holly's analysis "may be inconsistent with" parts of the consent decree.
Rich Mylott, spokesman for Denver EPA, declined to explain his agency's position in any more detail.
"Our letter, in this case, speaks for itself," he said in an email, "as we are in the midst of conversations with the State, and this is in fact a state action."
Holly, state regulators and EPA discussed the rift in a conference call last week.
For its part, the refiner insists that it has properly and accurately summarized the likely pollution impacts of its planned $225 million upgrade in full compliance with the consent decree.
Holly also disputes the idea that it will be adding pollution beyond the increases in carbon monoxide and greenhouse gasses that everyone acknowledges.
When the expansion is done, current sulfur dioxide emissions will be reduced by about 99 percent, said Mike Astin, environmental manager with HollyFrontier Corp. And, based on a broader, updated analysis that the company is running at the state's request, nitrogen oxides will increase only insignificantly even though the refinery will be producing 60,000 barrels a day, up from 40,000 a day currently.
"We're going beyond the requirements," Astin said.
How can the company increase output and decrease pollution at the same time? Astin points out that the eastern Utah crude it will use in the updated plant contains much less sulfur than the Canadian petroleum they've been using. That, plus the new equipment being installed, he said, will mean less of the smog-causing pollution that has attracted so much attention in northern Utah this winter.
"They talk about squeezing blood from a turnip, and that's where we are," he said. "The bottom line is the emissions don't exist for us to reduce."
A lot is at stake in the dispute.
If Holly is required to do the math the way EPA and the doctors' group say, the refinery could be forced to buy credits for pollution reductions, since it says there are no more reductions to be made to the plant and operations, said Astin.
In his view, the environmental group isn't aiming at reducing emissions. "What they oppose is the refinery."
On the other side, the doctor's group says the law is intended to prompt pollution cuts and that the Salt Lake Valley air shed needs those cuts to bring the air into compliance with federal law and make it healthier for Utahns to breathe. Walker said, if forced to exclude those improvements ordered by the consent decree, Holly could be compelled to rein in pollution by as much as hundreds of tons and neighbors would breathe easier.
Brian Moench, president of the physicians group, noted that Gov. Gary Herbert's administration has emphasized voluntary pollution-control programs and has told residents they must do their part to reduce emissions.
"You can't really ask them to do that with any integrity," said Moench, "unless you are asking the same from heavy industry and the refineries."
Marty Gray, who reviewed Holly's expansion application for the air-quality division, said the consent-decree-dispute is just one of the many comments that his office is considering before making a final decision.
"We had a significant amount of comments, and we're looking at those also," he said.
His office has to be sure that whatever the permit looks like when it's done, that it complies with the law. And it could be sued by anyone who doesn't like the final result.
"We don't take sides; we do whatever the law requires us to do," Gray said. "Once we decide the correct interpretation, that's the path we go down."
Twitter: @judyfutah What's next?
The Utah Attorney General's Office is reviewing the arguments about HollyFrontier's expansion request. No one knows when it might decide the issue, but many agree a lawsuit is possible, if not likely, no matter what the conclusion.
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