U.S. EPA has signaled that it won't reverse a George W. Bush-era policy that lets refineries burn some byproducts without treating them as toxic waste, drawing scorn from environmentalists, who had asked the incoming Obama administration to rethink the rule.

Under the policy, which was put in place in 2008, refineries can burn more than 300,000 tons of sludge and other oily materials in gasifiers each year without being subject to the storage and reporting requirements of the Resource Conservation and Recovery Act (RCRA) or the Clean Air Act rules that set limits on emissions from solid waste incinerators.

It is one of several exemptions from the toxic waste rules that were imposed by EPA toward the end of the Bush administration. EPA reconsidered some of those rules since the Obama administration took over, but the agency is leaning toward keeping the exemption for "oil-bearing hazardous secondary materials," according to a proposed rule (pdf) that was published in the Federal Register on Friday.

Environmental groups say the rule is a loophole because the byproducts of petroleum refining are clearly the type of "waste" that Congress had wanted to control. The decision is causing the neighborhoods around refineries to be exposed to higher levels of pollution, said James Pew, a staff attorney at Earthjustice who worked on the petition asking EPA to reconsider the exemption.

"This stuff is hazardous waste, and a gasifier isn't some magic black box that makes it less dangerous," Pew said. "No one's saying it's not toxic, so letting it get burned without controls is a bad idea."

The original rule was supported by refineries, which told EPA that the rule would allow the sludge to be recycled as fuel rather than shipped off to the dump. Companies said the production of the oily materials was best characterized as a part of the manufacturing process, rather than as a hazardous waste management activity.

A spokesman for the National Petrochemical & Refiners Association, contacted on Friday, said he could not respond by deadline.

Is it 'waste'?

When the rule was finalized in 2008, EPA estimated that the rule would have between $46.4 million and $48.7 million in annual benefits, mostly from the avoided cost of handling the waste and from the need to use other types of fuel in the gasifiers.

"This action serves what we believe is a national interest by capturing as much energy from a barrel of oil as possible to maximize production efficiencies at petroleum refineries in an energy-constrained world," EPA said when it created the exemption.

Environmental groups challenged the new rule in early 2009, but their petition wasn't initially accepted (Greenwire, May 6, 2009).

Upon further review, the Obama administration decided the petitions were flawed because they assumed that the byproducts are solid waste, "rather than a non-waste material that is being recycled," wrote Mathy Stanislaus, head of EPA's solid waste division, in a recent letter (pdf) to Pew.

"EPA decided on a far less ambitious final rule for a number of reasons," he wrote. "We understand that you may disagree with EPA's conclusions, but we believe that the regulatory choices made by the agency are reasonable based on the rulemaking record."

Pew said he wasn't satisfied with that answer. He called it legalistic.

"It can't be true that EPA gets to say, 'Waste is not waste if we say it's not waste,'" he said.

Click here (pdf) to read the proposed rule.

Click here (pdf) to read EPA's letter explaining the decision.

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