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17 G q % ~ ` ~ ml ' 4 1 : 10 ~ dearing the Air What Really Pollutes? Study of a Refinery Proves an Eye-Opener i • An EPA-Amoco Test Finds That Costly Rules Focus On Wrong Part of Plant One Gigantic Culture Clash By CALEH SOtAMON $(rtJJ RPt1or[er UJ THE W ALL STREET JOURNAL Nowhere has animosity between regu- lator and regulated been more acrid than in environmentalism and pollution control. But now, some signs of change and prag- matism are in the air. "The adversarial relationship that now exists ignores the real complexities of environmental and business probletm;" said Carol Browner, head of the Envitnn- mental Protection Agency, at her cootlr mation hearings. Last week, she told the auto industry she favors flexibility ia meeting clean-air goals. As it happens, the EPA itself has been involved in a far-reaching experiment Is finding new approaches to pollution con- trol, one that has involved nothing ler than a full-bore study of how best to regulate an oil refinery. The study, launched four years ago as an unprecedented joint venture between the EPA and Amoco Corp., tested the goodwill of both sides. Enormous obstacles of mistrust had to be surmounted, as the two sides found that, in jargon and analysis, they literally didn't speak the same language. The study was almost doomed midway through when the EPA slapped a stem penalty on Amoco in an unrelated matter. Less for More Yet the project finallywas completed- with startling conclusions. Among them: The refinery could achieve greater pollu- tion reduction for about $11 million than it is getting for a $41 million expenditure re- quired by current EPA regulations. Equally unsettling: While that $41 mil- lion was spent to trap air pollution from the refinery's waste-water system, no con- trols at all were required-or yet exist-on a part of the plant that the study showed to emit five times as much pollution. It could be dealt with for a mere $6 million. Why such miscalculations? Because, it turns out, nobody had ever actually tested to see hnw'tmtQt air pothttlon the rntnety was emitnng- or where the pollution was coming from. The Clinton-administration EPA is just beginning to consider the refinery study, known as the Yorktown Project, which is now winding up with a multivolume report that will call for such changes as tailoring a solution to each industrial facility. ButMs. Browner indicates she is sympathetic to many of its ideas. "If we were starting out today to develop an environmental program with all the knowledge we have today, we'd probably do it quite ditfer ently:" she says in an interview. "What I'm absolutely committed to is tnatting ame we can do the job we need to do in thr:least costly,tooatexpeditious manner." Sere.dipity Aloft Tlte spark for the rare EPA-industry joint study was a chance meeting of oM acquaintances aboard a 1989 Chicago-b Washington flight. Debora Sparks grabbed the open seat next to James Lounsbury. They had been part of a Washington crowd that used to gather after work in the 1970s atbars alottg.Pennsylvania Avenue. After some catch- ing up, they began talking about their work: pollution, energy. regulatlen. Though both had worked in ttte enetsy industry in the old days- now much had changed. Mr. Lounsbury was at the EPA. Ms. Sparks worked for Atttoco. They talked about the com- plaints of each side about pollution con- trot, and hetw de- spite all the cost and effort much pollu- tion went uncon- trolled. The tenor of the in-flight conver- sation, recalls Mr. Debora Sparks Lounsbury, was, "If we could be king and queen for a day, wouldn't it be nice if we could restructure the world of environmen- tal analysis." They wondered if something mightcome of a joint look by regulator and regulatee at a particular pollution site. When the plane landed, the two re- turned to their offices full of enthusiasm but unsure how to channel it. To Mr. Lounshury at the EPA, the notion of work- ing with an oil company was dangerous heresy. But he knew a midlevel regulator whose job was to look at new ways to regulate, and who had mulled the idea of a joint venture with an energy company. Mr. Lounsbury said he had a candidate. As for Ms. Sparks of Amoco, "there was some part of me that worried about coming across as a flake." But she gently sug- gested an EPA joint venture. "It was a hard sell in Amoco: " recalls the company's vice president for environ- mental affairs, Walter Quanstrom. "fats of people thought that opening the gates was stupid." because the regulators would crawl around a plant and find problems. Yetwithln a few days, he told Ms. Sparks to begin developing a project to take a deep look, jointly with the EPA, at the pollutlon output and possible preventive Pk65e 7Lrn to Paqe A6, Lblumn 1

'1 t ' NNI MI ~ bearing the Air W hat Really Pollutes? Study of a Refinery Proves an Eye-Opener An EPA-Amoco Test Finds That Costly Rules Focus On Wrong Part of Plant One Gigantic Culture Clash • . By CALEB SOtAMON St6fJ RPPOrIfr OJ THE W i1LL a'IM£CT JoURHAI. Nowhere has animosity between regu- lator and regulated been more acrid than in environmentalism and pollution control. But now, some signs of change and prag- matism are in the air. "The adversarial relationship that now exists ignores the real complexities of environmental and business problems." said Carol Browner, head of the Environ- mental Protection Agency, at her tbtVfr mation hearings. Last week, she told the auto industry she favors flexibility iat meeting clean-air goals. As it happens, the EPA itself has beeu involved in a far-reaching experiment is finding new approaches to pollution con- trol, one that has involved nothing bw than a full-bore study of how best 60 regulate an oil refinery. The study, launched four years ago as an unprecedented joint venture between the EPA and Amoco Corp., tested the goodwill of both sides. Enormous obstacles of mistrust had to be surmounted, as the two sides found that, in jargon and analysis, they literally didn't speak the same language. The study was almost doomed midway through when the EPA slapped a stern penalty on Atttaco in an unrelated matter. Less for More Yet the project finally was completed- with startling conclusions. Among them: The refinery could achieve greater pollu- tion reduction for about $11 million than it is getting for a 541 million expenditure re- quired by current EPA regulations. Equally unsettling: While that $41 mil- lion was spent to trap air pollution from the refinery's waste-water system, no con- trols at all were required-or yet exist-on a part of the plant that the study showed to emit five times as much pollution. It could be dealt with for a mere $6 miBion. Why such miscalculations? Because, it turns out, nobody had e.er actually tested to see hos'mttt.tl air pollution the retinetg was emitting, or where the pollution was coming from. The Clinton-administration EPA is just beginning to consider the refinery study, known as the Yorktown Project, which is now winding up with a mWtlvolume report that will call for such changes as tailoring a solution to each industrial facility. But Ms. Browner indicates she is sympathetic to many of its ideas. "If we were starting out today to develop an environmental program with all the knowledge we have today, we'd probably do it quite differ entty," she says in an interview. "What I'm absolutely committed to is tttakin=sto'e we can do the job we need to do in the least costly, ntost expeditious manner." Sere>tdiplty Aloft The spark for the rare EPA-industry joint study was a chance meeting of aN acquaintances aboard a 1989 Chicago-b Washington flight. Debora Sparks grabbed the open seat next to James Lounsbury. They had been part of a Washington crowd that used to gather after work in the 1970s at bars along Pennsylvania Avenue. After some catch- ing up, they began talking about theirwort: poBution,energy,regutation. Though both hai worked in the eeesTy industry In the old days, now much hed- changed. 6tr. Iamsbury was at the EPA. Ms. Sparks worked for Amoco. They talked about the com- plaints of each side about pollution con- trol, and how de- spite all the cost and effort much pollu- tian went uncon- troBed. The tenor of the in-flight conver- sation, recalls Mr. Debora Sparks a I Lounsbury, was, "If we could be king and queen for a day, wouldn't it be nice if we could resttucture the world of environmen- tal analysis." They wondered if something might come of a joint look by regulator and regulatee at a particular pollution site. When the plane landed, the two re- turned to their offices full of enthusiasm but unsure how to channel it. To Mr. Lounsbury at the EPA, the notion of work- ing with an oil company was dangerous heresy. Hut he knew a midlevel regulator whose job was to look at new ways to regulate, and who had mulled the idea of a joint venture with an energy company. Mr. Lounsbury said he had a candidate. As for Ms. Sparks of Amoco, "there was some part of me that worried about coming across as a flake." But she gently sug- gested an EPA joint venture. "It was a hard sell in Amoco," recalls the company's vice president for environ- mental affairs, Walter Quanstrom. 'Lots of people thought that opening the gates was stupid: ' because the regulators would crawl around a plant and find problems. Yet within a few days, he told Ms. Sparks to begin developing a project to take a deep look, jointly with the EPA, at the pollution output and possible preventive Pfeate 71" to Paye A6. t.bfwan f

• i THE WALL STREET- JOURNALL mgs out only modified them in same instanra and the project should pro- ceed. Even wtth that. there was frvstratbn at Amoco. Armed wun study data showmg Ihe was IPwater otam s benzene emissions were om, a tmv fraction of what the EPA had assumed mem :~ be, the company petnlonen in early 19m^'or an exemption to rutes reqwnn tt m complete Its masetve sewer system. EPA sald no - there was no procedure to waive exnttng environmental laws and regWations. even if they were contraNcted by an EPA-sanctioned study. Prescribed Remedy As for the loading area that the study had fingered as a worse cWpnt, the group decided that controlling Its benzene fumes would tate a special twonoule hose. The second noale would suck in escaping fumes. and plpes woWd carry them away. Cost of Ihe svstem: about $6 million. The eroup also aereed the refinery could stand about Si million of other modifications. Ilke new smokestacks. ex- Ira tan% seals and coaltng equipment for opena:r sludge qonds. One Yorktown sludee pand. the study showed, emitted twice as mucn hctlrocarbons as the EPA's rules assumed. The low-cost solution: low. enne tne oond's temoeratures. Late last year, Amoco completed its hlgh•tech waterireatment system. BuildIng that costly facmty ~something many Other reflnenes have had to do over the past two yearsl hrtngs Yorkmwn current with envitonmental laws. The plant now mntrols tbe modest output of betttene fW11M QOm fh AaN! water. Fqetlmea thtt mutls t1[aflOe atltt rbeg from the retlnery'a docfls. "It's not ts quired to be controlled, so It's not." saya Chris taasing, an Amoco manager. EPA officials concede the point. The Yorktown study points to "notential oppor lumttes' for better. cheaper poltutlon con. trol. says the agency's Mr. Potlar, but "we must confirm them before we make na- tlonal poltcy." EPA offictals say new regu- latfons to conttvl benzene at loading docks should be drafted by the mld-1990s. Winding Down The final Yorktown report is neanng completton. The volumes done so far make the baau: argument that each plant ts different, and each requires unique pollu- tion sotuttons. They say only exhaustive testing at each plant will accurately telt what needs to be cleaned up. Sttart of rewrtting laws like the Clean Air Act, there is little hope for immediate. far-reaching change - such as setting a txnune maximum and letting a plant mmt the goal any way it wlshes. If York- town cuts pollution at its loading dock ar the EPA requires it to do so, that doesn't mean the agency would let Yorktown out of any requuemenes at tta waste-water plant. even if they were based on faulty assump- ttans. Says Mr. Davles: "You invest so much in terms of ttme. money and political cnits in amving atone of these regulatory denslotlJ that to go back and change it 1s something nobody wants to do.' Still. there are slgns that EPA regulanon u evolving. The air, water and solid- waste offices talk more to each omer, as Yotttawn i report recommends. And EPA Mmmtstramr Browner says, '"che Idea that one adutlod works in evety sttttatlm b something we've probably Pwed be- ymd, and we need to rewgnise that. We need to bemme mote flexible." As the rare industry-agency joint ven- ture winds down, many of its participants have moved on. Amotro's Howard Klee and Debora Sparks both have new asstgm ments. as do the EPA's Jlm t.ounsbury and Mahesh Potlar. Summing up his expe- nence. Mr. Podar says, "Some of my culleagues may not agree, but Yorktown shows that EPA and industry can work together. You ca! find more effective ways to meet envrronmental objectives." Ms. Sparks, whose spatting of Mr. (.pmabury aboard the 1989 ntght led to the pmject, evm teela a certam emui, U d a perJar uaba hn ended. "YOU Imow:" she says, quietly. "I should catt Mahesh and Jim. I harm't even wished tnetn a happy New Year:' 3 n• ;