March 12, 2012

The Regulatory Status of On-Spec Used Oil Inserted Into Refinery Operations

To take advantage of the §279.10(g)(3) exemption, two requirements must be met: 1) the used oil must be inserted into the refining process prior to crude distillation or catalytic cracking, and 2) the volume of used oil must be less than 1% of the crude oil feed to any given process unit. The §279.10(g)(3) exemption makes no distinction between on-spec or off-spec used oil as defined in §279.11. Is on-spec used oil subject to the 1% limitation of §279.10(g)(3)?

In answering this question, EPA turned to its interpretation of §279.10(g)(4) that allows an unlimited volume of on-spec used oil to be inserted into refining operations after crude distillation or catalytic cracking. EPA had previously stated, “…on-specification used oil may be burned in the same manner as virgin petroleum fuel in other situations, therefore it makes little sense to restrict its use as a feedstock to the petroleum coker (or in any other process ‘after’ crude distillation or catalytic cracking).” [March 4, 1994; 59 FR 10554]

Although §279.10(g)(3) is silent on the distinction between on-spec and off-spec used oil, the agency recently issued guidance that this distinction is important: “…because we specifically stated that it does not make any sense to limit the amount of on-specification used oil inserted after the crude distillation or catalytic cracking unit, which provides additional contaminant reduction, we did not intend to limit the amount that can be inserted before.” [RO 14829]

It’s well established that on-spec used oil burned for energy recovery is not subject to Part 279. In addition, §279.10(g)(4) exempts on-spec used oil when used as a feedstock after crude distillation or catalytic cracking. “The basis for this determination is that on-specification used oil is equivalent to virgin fuel oil for regulatory purposes.” [RO 14829] Therefore, EPA’s interpretation is that on-spec used oil is exempt from Part 279 when used as a feedstock in petroleum refinery operations—regardless of whether it is inserted before or after crude distillation or catalytic cracking.


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