Air District Outmaneuvered in Its Bid to Close Refinery

The elements for a public relations triumph were all there: a government agency dedicated to clean air, a big oil company and evidence of what seemed to be a flagrant violation of air quality rules.

So Jim Birakos, deputy executive officer and spokesman for the South Coast Air Quality Management District, got on the telephone Jan. 30 and told reporters that Mobil Oil Corp.’s Torrance refinery would be shut down in what would be the biggest enforcement action in the district’s history.

Rather than repair a malfunctioning pollution control system, Birakos said, Mobil had knowingly polluted the air with health-threatening particulates at levels seven times the maximum allowed.

Worse, he continued, Mobil had intentionally withheld inside information--including its own air monitoring tests and private damage assessment reports--that would have alerted authorities to problems with the system more than a year earlier.

“We think (the refinery) has impacted the health of millions of residents,” Birakos said.

But two months after Birakos made that charge, a different picture has emerged--a picture of a district slow to act and one that was outmaneuvered by the nation’s second-largest oil company.

Today, the refinery is back in full production--largely on Mobil’s terms--after making temporary repairs to the pollution control equipment that even some Mobil witnesses doubted would last. Mobil plans to rebuild the control system in October at a cost of $5 million, but even that plan was conceived before the district acted.

Lawsuit on Hold

The South Coast district’s lawsuit to fine the company $1,000 a day has been put on hold pending completion of an investigation by the Los Angeles County district attorney’s office.

And the district never proved that the health of millions of residents had been affected.

Instead of being the biggest enforcement action by the South Coast district, the Mobil case has become something of an embarrassment to district officials and has led environmentalists to question whether the agency, set up to monitor air quality in smoggy Southern California, has any clout when it comes to keeping polluters in line.

“I’m angry, both at the district for allowing it to continue for as long as it did, and at Mobil for their duplicity,” said Barbara Sullivan, executive director of the Coalition for Clean Air.

Recently, a group of Torrance residents demonstrated at the refinery, demanding that the AQMD take Mobil to court. Mary Pendergast, a registered nurse who lives nearby, said: “I am beyond believing we can trust in our public agencies, and that’s scary. It’s a miserable failure.”

Missed Opportunity

The Mobil case appears to be one of missed opportunity and hyperbole on the part of the AQMD.

No one, including Mobil, now disputes that the refinery’s emissions were exceeding the legal limit. Mobil had early indications of possible violations. Its own inspection reports dating back to October, 1983, detailed extensive damage to a key pollution control system, and independent tests run in December, 1983, found air pollution violations.

But the district, which also had tested the refinery equipment that same December, did not get word to Mobil for almost seven months that the refinery might be in violation of air quality rules. This time lag, Mobil contends, only heightened doubts it had about the accuracy of its own independent tests that showed it was emitting twice the legal limit for particulates.

‘False Sense of Security’

Mobil attorney Stanley Roller pointedly testified at a hearing called by the district that the oil company “was lulled into a false sense of security by the district’s apparent lack of concern over this matter, which they now belatedly claim is urgent.”

But even if the district did bungle the case, as some critics have charged, district executives say Mobil had a legal obligation to seek a variance once it became aware of a pollution problem.

Mobil officials have testified that it would have cost the oil company $100,000 a day in lost production to shut down for repairs. If the shutdown had lasted for more than six weeks, the daily loss would have jumped to $200,000 a day. By comparison, the maximum fine for violating the district’s rules is $1,000 a day.

“My feeling,” William Freedman, the district’s deputy counsel, said in an interview, “is this was a simple economic decision (made by Mobil) without weighing the consequences. They looked at the cost. . . . Someone (at Mobil) asked what is the worst-case scenario with a regulatory agency. Then they said, ‘Let’s wait and see.’ ”

Mobil, however, said it was not convinced that its own tests were accurate, and it had received no word from the air quality district about the problem.

Enforcement Problems

The South Coast district’s attempts to enforce particulate emission standards at Mobil were troubled from the beginning. On Dec. 20, 1983, district inspectors drew the first particulate samples from Mobil’s stacks.

A written report on the test--essential to any enforcement action--was not completed until six months later, although inspectors within weeks had a laboratory analysis indicating that Mobil was venting seven times the allowable particulates, which is 30 pounds per hour.

But a mistake in the laboratory analysis threw the results into question. The high reading indicated a potentially serious violation, but a second test wasn’t made until Aug. 7. It took another six weeks to analyze the second sample. This time illegal emissions were even worse--almost 10 times the maximum limits.

Citation Finally Comes

It wasn’t until 11 months after the abortive first test, and three months after a second test, that the district on Nov. 2, 1984, finally cited Mobil for violating particulate standards. Throughout this period, the district later calculated, the refinery vented 1 1/2 tons in excess particulates each day.

The faulty December, 1983, Mobil test marked the first time that the district tested particulate emissions at Mobil since the AQMD was formed in 1977 to enforce air quality laws in Los Angeles, Orange, Riverside and San Bernardino counties.

Indeed, even though the district testified before the state Legislature in 1981 that it would begin annual tests of major polluters, as of this year particulate emissions at four refineries in the South Coast Air Basin still have not been tested. The district’s 1981 testimony helped kill a bill that would have mandated such testing annually.

Eight Source Tests

Between 1977 when the AQMD was formed and 1983, only eight source tests for particulates were conducted at the 15 refineries then in business in the South Coast Air Basin.

However, results from those refineries that have been tested indicate that excessive particulate emissions may be a widespread problem. Out of the 14 tests conducted in 1984, 10 of the tests--71% of the total--revealed that the refineries were exceeding allowable particulate emissions.

While the district had no credible evidence of its own until September, 1984, testimony from Mobil officials, subpoenaed documents, AQMD reports and interviews by The Times indicate that Mobil was aware of possible problems as early as the summer of 1983.

Indeed, by the time the AQMD finally had valid test data in mid-1984, Mobil had already accumulated a wealth of data including inspection reports and air monitoring test results that led Mobil to conclude that the pollution control system, known as an electrostatic precipitator, was beyond repair and would have to be replaced.

Source of Particulates

The precipitator is supposed to capture particulates in the gas stream before they can escape into the atmosphere. The particulates, which can bypass the human body’s defenses and lodge deep in the lungs and cause respiratory illness, originate in the refinery’s fluid catalytic cracking unit that converts oil into gasoline.

AQMD chief counsel Curtis Coleman said that the burden of complying with air quality laws--and reporting violations--fell squarely on Mobil.

“They have a legal obligation to comply with our rules and regulations, and when they received the information we believe they received--that they were not in compliance and believed they were in violation--and failed to do anything about that, it is a knowing and wanton violation of our regulations,” Coleman said.

The oil company, however, contends that it was the district’s responsibility to determine if a violation was occurring. In addition, Mobil said it did not seek an AQMD variance from air quality rules, which would have allowed it to legally continue operations, because it was not prepared to make the repairs by a set date. The oil company did not believe the district would grant a variance for an indefinite period. At that time, Mobil had not decided how it would go about rebuilding the precipitator, and approval for the $5-million project had not been received.

Management Balks

Nor did the refinery’s management then want to go to the expense of making costly temporary repairs it believed to be of questionable value to a precipitator it planned to rebuild. Thus, Mobil simply continued producing gasoline and, according to the district, polluting the air.

“We thought a variance was unattainable,” Ronald L. Wilkniss, Mobil’s environmental engineer, told an AQMD hearing board when asked if Mobil had made “an affirmative decision” to operate in violation of district rules.

Freedman, the district’s deputy counsel, characterized that decision as “cold and calculating” and charged at district hearings that it was nothing less than “a flagrant flaunting of laws specifically imposed to protect the health and welfare of millions of citizens.”

But, the South Coast district’s attempts to obtain an abatement order, which would have immediately shut down the cracking unit, was upstaged by Mobil.

Earlier Denial

Mobil had earlier been denied AQMD permission to continue operating the cracking unit while making repairs to the trouble-plagued precipitator. It was faced with the possibility that the district would order it to shut the cracking unit down entirely.

But, before the district could act, Mobil announced that it was “voluntarily” shutting down its cracking unit to make temporary repairs to the trouble-plagued precipitator.

Despite earlier Mobil testimony that previous interim repairs proved futile and that there was no guarantee that additional repairs would last, Mobil now vouched for their effectiveness. Mobil said they could be completed within 18 days, statements which prompted the district to ask why Mobil hadn’t made the repairs earlier.

Those repairs, Mobil said, would cost $500,000 and last until October, when it planned to replace the precipitator at a cost of $5 million.

The tactic caught the district off guard. It was faced not with having to close the refinery, but with keeping it from reopening until Mobil could prove that the repairs worked.

A Mobil Ultimatum

As negotiations began to fashion such an order, Mobil dispatched what was viewed by the AQMD as an ultimatum, warning that if negotiations were not concluded within three days, Mobil would restart the cracking unit with or without the district’s approval.

In a telegram to the district, E. P. Hardin, Mobil vice president for U.S. manufacturing, declared: “The delay that would result . . . would cost Mobil a tremendous amount of money. . . . If the hearing is not concluded (by Feb. 25), you should understand that Mobil feels free to, and intends to, restart the (cracking) unit as soon as the interim repairs are made.”

Throughout those negotiations and during the abatement hearings, Mobil repeatedly challenged the validity of the South Coast district’s method of measuring particulate emissions.

Company’s Explanation

Mobil explained that it did not at first believe it was violating particulate standards because, the early test results notwithstanding, nothing could be seen coming from the stacks. In addition, Mobil said it was impossible for such a high volume of particulates to escape into the atmosphere without severely damaging a turbine through which the particulates and flue gas pass before reaching the precipitator. But, there were no telltale signs of damage in the turbine, Mobil said.

Eventually, Mobil won the day. In a major concession to Mobil, the AQMD agreed to substitute a less stringent test between now and next October, when the new precipitator is installed. This, despite the fact that the new test is still experimental and has not won final approval from the U.S. Environmental Protection Agency, which is developing it. Mobil contends that the test will yield more reliable measurements.

James J. Morgester, chief of the state Air Resource Board’s compliance division, told The Times that he found the district’s action “strange.”

“It’s clear there’s nothing at all wrong with the district’s test,” Morgester said. He added, “I guess Mobil hopes this test will be lenient enough to make them appear they’re in compliance, but the emissions won’t change any.”

‘Bit of an Edge’

District officials admit that the new test will give Mobil “a bit of an edge.” But, AQMD executive officer Jeb Stuart insisted that Mobil was so far out of compliance with air quality rules a year ago that it would have flunked even the new test. The district will run side-by-side tests using the old test method to develop comparative data.

In the aftermath of the case, attorneys and employees of Mobil have admitted that the oil company made “an error in judgment” in not alerting the AQMD and seeking a variance to continue operations until repairs could be made.

“There is a serious public concern, and there is a need to satisfy that concern,” Mobil attorney Jack E. Fudge said. “The public confidence in this district, and Mobil is a very important thing and Mobil covets that confidence.”

Wilkniss, Mobil’s environmental engineer, told the district: “I think that given the way the circumstances have gone, we will not be found in this position again.”

The same might be said for the South Coast Air Quality Management District.

Time of Notification

Birakos said the AQMD now plans to allow no more than two weeks to pass between the time of a source test and the time a notice of violation is issued.

Stuart and Edward Camarena, the AQMD’s director of enforcement, have issued a series of internal directives to correct what Stuart called “serious procedural and personal errors.” An investigation has begun that could lead to disciplinary action against AQMD employees.

Officials also are evaluating the effectiveness of the district’s air monitoring program, including the frequency and accuracy of source tests, are calling for a more systematic approach to calibrating test equipment to assure its accuracy, and are asking for long-delayed budget increases for a computerized tracking system and more personnel to step up enforcement actions.

But, for Stuart, Freedman and others, disturbing questions linger about the credibility of the district’s enforcement efforts and industry’s willingness to comply with air quality rules in the absence of predictable enforcement.

Stuart asked, “Can we expect larger corporations like Mobil to do their own housekeeping? I used to think we could. But with this, I’m beginning to seriously doubt that. I’m beginning to question whether economic interests don’t outweigh environmental interests for large corporations, and I don’t think Mobil is one of a kind.” Emissions from the Refinery Mobil Oil, accused of violating air quality rules and concealing the fact from authorities, shut down its fluid catalytic cracking unit at the Torrance refinery for three weeks to make repairs. Air quality officials say that, before it was fixed, the defective air pollution control system allowed 1.3 million pounds of health-threatening particulates to escape into the air. Here is a look at the process and the problem.

The Process 1. Silo-like containers hold powdered catalyst used in refining process. 2. Catalyst and oil are mixed at ground level which begins “cracking” oil to gasoline. Process is completed in reactor. 3. Material flows to a fractionator, which separates gasoline from other cracked products. The powdered catalyst becomes coated with carbon in the cracking process. 4. Carbon-coated catalyst goes to regenerator where carbon is burned off. Cleaned or “regenerated” catalyst returns to ground level below reactor where it is again mixed with oil and cracking process begins again. 5. A small amount of catalyst leaves the regenerator with the combustion gases. The majority of these catalyst particles are removed from the gas in the third-stage separator. 6. Gases from the third-stage separator are channeled through a turbine , generating electricity. 7. Gases from the turbine flow through a waste heat boiler where the gases are cooled by generating steam. 8. The gases go to the electrostatic precipitator, where residual catalyst particles, known as particulates, are removed. 9. The cleaned gas is released into the air or sent to another boiler to make steam and then out the large stack (10). The Precipitator Problem At issue in the dispute between Mobil and the Air Quality Management District was the effectiveness of the electrostatic precipitator (8). When it is operating normally, more than 3,000 bare high-voltage wires suspended from the ceiling electrically charge the particulates. The particulates are then attracted like magnets to 1,600 metal collector plates inside the precipitator before they can escape into the atmosphere through refinery smokestacks. Periodically, vibrators shake loose the particulates and they are trucked away as waste. The recent problem was that not all broken wires and warped plates had been replaced, hindering the effectiveness of the device.