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20180515 Late Correspondence
From:Gabriella Yap To:Herb Stark; CC Cc:CityClerk; Cory Linder; Matt Waters Subject:RE: Consent Calendar, Item H Date:Tuesday, May 15, 2018 5:59:18 PM Dear Herb, Thank you for your email. While you may feel like cutting off the City’s social media is going to end Ladera Linda’s traffic problems, it won’t make an impact because the majority of the issues stem from AYSO games and social media meet up groups, not the City’s postings. We have a community of almost 43,000 residents and everyone has different needs, interests, and preferences. It’s important for us to connect our residents to the services they want, and to use a variety of methods to reach them. Some still like mail and we’re finding many, if not most, are digitally connected because it is convenient and real-time. As a result, we use various mediums, like newsletters and social media , to reach them. You had asked how many were RPV residents who were coming to the events, and not others. Here are the stats from the informal, voluntary surveys done at the last Movie in the Park and July 4th that provide a sampling: Movies in the Park - June: totals by Zip Code City Zip Respondents Percent RPV 90275 24 52% Peninsula 90274 14 30% Torrance/Walteria 90505 3 7% Torrance 90501 3 7% Hermosa 90254 1 2% San Pedro 90731 1 2% Movies in the Park - July: totals by Zip Code City Zip Respondents Percent RPV 90275 41 57% San Pedro 90731 9 13% Peninsula 90274 6 8% Torrance 90503 3 4% Hermosa 90254 3 4% Redondo Beach 90277 3 4% Torrance 90501 2 3% Torrance 90504 1 1% Torrance 90710 1 1% Torrance/Walteria 90505 1 1% Carson 90745 1 1% Sylmar 91342 1 1% Movies in the Park - August: Totals by Zip Code RPV 90275 10 50% Torrance/Walteria 90505 3 15% Torrance 90501 3 15% Peninsula 90274 2 10% Hermosa 90254 1 5% San Pedro 90731 1 5% July 4th RPV 56% RHE 15% Torrance 12% Beach Cities 7% Other Cities 5% San Pedro 4% As you can see, the majority of attendees at these events are RPV and/or Peninsula residents. I hope this helps bring some perspective into the discussion. Thanks and talk to you soon. Gabi Gabriella Yap Deputy City Manager City of Rancho Palos Verdes 30940 Hawthorne Blvd. Rancho Palos Verdes, CA 90275 (310) 544-5203 (office) (310) 544-5291 (fax) From: Herb Stark [mailto:pt17stearman@gmail.com] Sent: Sunday, May 13, 2018 7:01 AM To: CC <CC@rpvca.gov> Cc: CityClerk <CityClerk@rpvca.gov> Subject: Consent Calendar, Item H We hear from the City Council all the time that RPV is becoming the playground for the South Bay. Residents are complaining about traffic and crime. Del Cerro is a mess and Ladera Linda is fast going that way. The City Council blames social media, not in their control, while the City Manager proclaims that staff is only using social media to notify residents of coming events. The problem is that the city web page, Facebook, and Next Door are all open to the world. So on one side you have the residents, oh by the way are paying for all this, saying enough is enough and the staff saying come one come all. Staff’s counter to this is that all we are doing is making our residents aware of the programs available to them. Look how many people show up for our planned events. I wonder how many are RPV residents? There are ways to notify residents of coming events without blasting it to the world. There is the resident mailed Quarterly Newsletter with recreation inserts, the activity guide, and the city’s listserver which can be limited to residents only. On the consent calendar, item H, for this coming city council meeting, staff is requesting $8,500 for the quarterly newsletter. This should only be granted provided staff stops all advertising of coming events on social media. Herb Stark Rancho Palos Verdes TO: FROM: DATE: SUBJECT: CITY OF RANCHO PALOS VERDES HONORABLE MAYOR & CITY COUNCIL MEMBERS CITY CLERK MAY 15, 2018 ADDITIONS/REVISIONS AND AMENDMENTS TO AGENDA Attached are revisions/additions and/or amendments to the agenda material presented for tonight's meeting. Item No. D 1 4 Description of Material Email exchange between Councilman Alegria and Senior Administrative Analyst Ramezani Email exchange between Senior Administrative Analyst Ramezani and SUNSHINE Email from Andrea Vona **PLEASE NOTE: Materials attached after the color page(s) were submitted through Monday, May 14, 2018**. Respectfully submitted, W:\01 City Clerk\LATE CORRESPONDENCE\2018 Cover Sheets\20180515 additions revisions to agenda.doc From: Sent: To: Subject: Follow Up Flag: Flag Status: Lauren Ramezani Tuesday, May 15, 2018 1:48 PM CityClerk Late Correspondence for Item D FW: School Crossing Services Follow up Flagged Please see late correspondence for Item D. School Crossing Guards. Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works L City of Rancho Palos Verdes 310-544-5245 Laurenr@rpvca.gov http://www.rpvca.gov From: Lauren Ramezani Sent: Tuesday, May 15, 2018 1:46 PM To: Eric Alegria <Eric.Alegria@rpvca.gov> Cc: Doug Willmore <DWillmore@rpvca.gov>; Elias Sassoon <esassoon@rpvca.gov> Subject: RE: School Crossing Services Councilman Alegria, I found some old staff reports and checked with the PVPUSD to get some background and historic information on the school crossing guards. The City has had a contract for school crossing guards since 1992. The original contract does not specify the original school sites. I was told that PVPUSD used to pay for the cost of the guards but since the guards were on the City Right of Way (ROW) the City administered the contract. I do not know when the City started to pay for some of the guard costs. I'll need more time to do further research. As to why some schools have guards and some do not, it appears that the school(s) initiate the request and inform PVPUSD of their need and traffic/safety concern. If the PVPUSD concurs, then they notify the City. The City conducts a traffic study and brings it to the Traffic Safety Committee. Later by CC approval, the guard contract is amended. In late 2015, PVPUSD asked for one additional guard at Silver Spur and one at Ridgecrest and agreed to pay for those additions. Similarly, in late 2015 Dodson requested a guard and planned to obtain LAUSD approval for funding. The staff reports below indicates that at that time the City paid for the one crossing guard at Silver Spur and split the cost for the two guards at Miraleste. Those three additional guard requests went before the Traffic Safety Committee after a traffic study was conducted, and were recommended to the CC for approval. However, it appears that at some point LAUSD did not approve funding for Dodson, hence the City pays for that school. The City Council reviewed and approved the requests in May and June 2016. Here are the links to two recent staff reports: June 21, 2016 http://q2v.granicus.com/Met,aViewer.php?view id=S&clip id=2578&meta id=27983 1 D. May 3, 2016 http://rpv.granicus.com/MetaViewer.php?view id=S&clip id=2531&meta id=25825 Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works L City of Rancho Palos Verdes 310-544-5245 Laurenr@rpvca.gov http://www.rpvca.gov From: Eric Alegria Sent: Monday, May 14, 2018 2:55 PM To: Lauren Ramezani <LamenJ}@ ... rnvca_,gQy> Cc: Doug Willmore <DWil!more@rpvca.gov>; Elias Sassoon <.§gissoon@rQYf.£,gO\(> Subject: Re: School Crossing Services Thank you. Don't want to slow tomorrow's meeting down, but do want to understand how we came to pay for these three and not others. i.e. prior safety or traffic issues etc. Seems like we should have a criteria to point to to help folks understand how we got here. From: Lauren Ramezani Sent: Monday, May 14, 2018 1:59 PM To: Eric Alegria Cc: Doug Willmore; Elias Sassoon Subject: RE: School Crossing Services Councilman, I know these school locations have had crossing guards for a few years. However, the crossing guards' contract was previously handled by a staff member who is no longer with the City. So let me do some research and get back to you. Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works L City of Rancho Palos Verdes 310-544-5245 Laurenr@rpvca.gov http://www. rpvca .gov From: Eric Alegria Sent: Monday, May 14, 2018 1:14 PM To: Lauren Ramezani <LaurenR@rpvca.gov> Cc: Doug Willmore <DWi!lmore@rpvca.gov> Subject: School Crossing Services Hi Lauren, 2 Just a quick question prior to tomorrow night's meeting ... how did the Council/staff decide to pay for crossing services for the three locations in item D? I was curious how those three were identified versus other schools in the City. Thank you. Eric 3 Subject: Late Correspondence-PH Item 1 FW: RPV-EDCO's FY 18-19 Rate Adjustment Request From: Lauren Ramezani Sent: Tuesday, May 15, 2018 2:57 PM To: CityClerk <CityClerk@rpvca.gov> Cc: Elias Sassoon <esassoon@rpvca.gov> Subject: Late Correspondence-PH Item 1 FW: RPV-EDCO's FY 18-19 Rate Adjustment Request Late Correspondence for Item 1. Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works L~ City of Rancho Palos Verdes 310-544-5245 Laurenr@rpvca.gov http://www.rpvca.gov From: Lauren Ramezani Sent: Tuesday, May 15, 2018 2:56 PM To: 'SUNSHINE' <sunshinerpv@aol.com> Cc: Doug Willmore <DWillmore@rpvca.gov>; Elias Sassoon <esassoon@rpvca.gov> Subject: RE: RPV-EDCO's FY 18-19 Rate Adjustment Request Sunshine, l have a correction on the ROM awards I mentioned below. The current award amount of $250 is not proposed to be changed at this time. Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works ~City of Rancho Palos Verdes 310-544-5245 La wenr@rpvca.gov http://www. rpvca .gov 1 From: Lauren Ramezani Sent: To: Tuesday, May 15, 2018 11:34 AM SUNSHINE Cc: Subject: EZStevens@cox.net; ken.delong@verizon.net; CityClerk RE: RPV-EDCO's FY 18-19 Rate Adjustment Request Follow Up Flag: Flag Status: Sunshine, Follow up Completed This is a public meeting and I will include your email as Late Correspondence to the Item. The City Clerk is copied on this email. Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works L City of Rancho Palos Verdes 310-544-5245 .~llJ![enr@rQYca.gov http://www.rpvca.~gov From: SUNSHINE [mailto:sunshinerpv@aol.com] Sent: Tuesday, May 15, 2018 11:13 AM To: Lauren Ramezani <LaurenR@rpvca.gov> Cc: EZStevens@cox.net; ken.delong@verizon.net Subject: Re: RPV-EDCO's FY 18-19 Rate Adjustment Request Hello Lauren, When will the Council have the opportunity to discuss my beautification suggestion? Sunshine 310-377-8761 In a message dated 5/15/2018 10:47:22 AM Pacific Standard Time, LaurenR@rpvca.gov writes: Good morning Sunshine, Thank you for your email. The City is mandated by the State, AB 939, to implement recycling and waste diversion programs in order to reduce its trash generation. The City is required to report on such activities and the tonnage diverted on an annual basis. Staff includes Recyclers of the Month (ROM) program in the annual report. The annual report to the State includes an inquiry on what economical/financial incentives are provided by the City to encourage recycling. The ROM is one of such programs. Additionally, Calrecycle staff have informed City staff that they look very favorably at the ROM program, and have often used it as an 1 I . example when they communicate with other jurisdictions who are looking for new programs to help "get the word out" on recycling. The ROM program is funded through the restricted Waste Reduction fund. The City pays for the printing cost, and EDCO inserts the cards free of charge. The ROM entry card serves several useful purposes. It reminds residents of recycling when they see the card with the July annual billing, it offers them rewards for their efforts, and at each Council meeting, there is another reminder to recycle. The City gets over 2,200 entry cards each year. That's a 20% response rate. You had a good point about the award amount not being sufficient. Historically the $250 paid for a year's trash services. That amount has not changed in two decades. In the proposed FY 18-19 budget, PW is requesting the amount to increase to $350 per award to cover the cost of a year's trash services. This change is subject to CC approval. Both the Neighborhood Beautification Grant program and median improvement program funding have been discontinued for five years. Instead, in 2013, the City Council approved providing a rebate to customers and asked EDCO to credit -$4.75 a quarter to customers on their invoices. It is at the City Council's discretion to make changes. Thank you. Thanks Lauren Ramezani Sr. Administrative Analyst-Public Works L City of Rancho Palos Verdes 310-544-5245 Laurenr@rpvca.gov http://www.rpvca.gov From: SUNSHINE [mailto:sunshinerpv@aol.com] Sent: Monday, May 14, 2018 2:38 PM To: CC <CC@rpvca.gov> Cc: EZStevens@cox.net; Elias Sassoon <esassoon@rpvca.gov> Subject: Re: RPV-EDCO's FY 18-19 Rate Adjustment Request 2 MEMO from SUNSHINE TO: RPV City Council, Staff and interested parties RE: Once again it is time for me to remind the City Council that the rates for trash collection keep going up and the reward for recycling has remained the same. The prize in the drawing started out as a year's worth of trash collection. Have another look at the program. Does anyone really go out of their way to be sure to recycle something every week just for a chance to win $250.00? Processing the drawing takes a lot of Staff Time and there are printing costs. The HOAs seem to have run out of projects that qualify for the recycle money beautification grants. I have a new suggestion. It would make a huge difference in restoring views of our coast and save a lot of maintenance money if our recycle money income was spent on eradicating acacia bushes/trees. Roadsides, park lands, city owned lots and preserve lands are infested with the nasty, ugly plants. If the public can see them, they should be done away with. Start with Lower Point Vicente Park In a message dated 5/14/2018 10:33:49 AM Pacific Standard Time, listserv@civicplus.com writes: View this in your browser EDCO Disposal Corporation is requesting a residential rate adjustment request of 4.12%. This percentage is calculated based on the methodology and national price indices outlined in their agreement. A public hearing is set on 5/15/18 to present this request to the City Council for consideration. For a copy of the staff report, click on this link: http://rpv.granicus.com/MetaViewer.php?view id=5&event id=1257&meta id=55408 The Council meeting will be held at Hesse Park, 29301 Hawthorne Blvd, RPV 90275 at 7 PM. Thank you. RPV Public Works Publicworks@rpvca.gov ************************************************* This message is been sent by the City of Rancho Palos Verdes as part of a "Notify Me" Listserv category you are signed up for. Please do not press "reply" when responding to this message, it is an unmonitored email address. You can make changes to your subscription by visiting http://www.rpvca.gov/list.aspx. E 3 You are receiving this message because you are subscribed to Solid Waste and Composting on www.rpvca.gov. To unsubscribe, click the following link: Unsubscribe 4 From: Sent: To: Subject: Late corr Teresa Takaoka Tuesday, May 15, 2018 3:03 PM Nathan Zweizig FW: FY18-19 Preliminary Budget -request for signage funding From: Andrea Vona [mailto:avona@pvplc.org] Sent: Tuesday, May 15, 2018 3:01 PM To: CC <CC@rpvca.gov> Cc: Doug Willmore <DWillmore@rpvca.gov> Subject: FY18-19 Preliminary Budget -request for signage funding Dear Honorable Mayor Brooks and Rancho Palos Verdes City Councilmembers, This note is with regard to this evening's FY18-19 Preliminary Budget hearing. There has been a great positive response from the community about the trail entry signage that was installed recently at Portuguese Bend, Alta Vicente and Aqua Amarga Reserves. The Land Conservancy was pleased to have had grant funding to design the signage program and install the signage at three reserves. We are also eager to see the remaining seven reserves benefit from the new signage as well. The cost estimate to install the remaining signage is $249,000 exclusive of any staff time needed to coordinate for project management. I support the City's commitment and endeavors to fund the completion of this project. To further this, I respectfully request a minimum of $249,000 be allocated in the City's FY 2018-2019 budget to complete the project installation for the remainder of the Palos Verdes Nature Preserve. If helpful, the Land Conservancy would be pleased to donate our services to work directly with the signage contractor, Express Signs and Neon, for the completion of the project. This project would be done, similar to the signage installation of the previous reserves, in close coordination with the City staff for the location of each sign and appropriate public notices. We are grateful for the collaboration with the City, in particular the Recreation and Parks staff, to et such distin uished-looking trail signage in place. Warm regards, q_ 1 Andrea Vona Andrea Vona Executive Director Palos Verdes Peninsula Land Conservancy 310-541-7613 X204 310-930-0583 (cell) "Preserving land and restoring habitat for the education and enjoyment of all." 2 TO: FROM: DATE: SUBJECT: CITY OF RANCHO PALOS VERDES HONORABLE MAYOR & CITY COUNCIL MEMBERS CITY CLERK MAY 14, 2018 ADDITIONS/REVISIONS AND AMENDMENTS TO AGENDA Attached are revisions/additions and/or amendments to the agenda material received through Monday afternoon for the Tuesday, May 15, 2018 City Council meeting: Item No. F H N 1 Description of Material Email from Barbara Graham (Due to the document length, please refer to website for attachments) Emails from: Herb Stark; Mickey Radich; Donald Bell; Email exchange between Deputy City Manager Yap and Gary Randall Agenda Report Update Email from SUNSHINE Respectfully submitted, W:\01 City Clerk\LATE CORRESPONDENCE\2018 Cover Sheets\20180514 additions revisions to agenda thru Monday.doc Subject: FW: Letter re: May 15th RPV City Council Meeting Attachments: TORC_Letter -Rancho Palos Verdes_City_Council_5-11-18_FINAL.pdf Importance: High From: Graham, Barbara M [mailto:BARBARA.GRAHAM@pbfenergy.com] Sent: Friday, May 11, 2018 10:33 AM To: Doug Willmore <DWillmore@rpvca.gov> Cc: Susan Brooks <SusanB@rpvca.gov>; Jerry Duhovic <Jerry.Duhovic@rpvca.gov>; eric.allegria@rpvca.gov; John Cruikshank <John.Cruikshank@rpvca.gov>; Ken Dyda <Ken.Dyda@rpvca.gov>; CC <CC@rpvca.gov> Subject: Letter re: May 15th RPV City Council Meeting Importance: High Dear Mr. Willmore, I send the attached letter and associated attachments pertaining to Agenda Item No.Fon the May 15th City Council Agenda on behalf of Torrance Refinery manager Steven Steach. Kind regards, Barbara Graham Manager, Community Relations Office: 310.212-4618 {for ranee ·~. t·('h; ( D!'.:>CLJ\IMF.il: is confidenUe! or i!:~; attachments is :1Uachrnents. end any attacrnr:w1b me intended solely !or trie use of the im:ividual or enlily tc which it!:; addm:;;sed and may (/Jntai11 information I.hat If me no\ the intended recipient. arc !rercby notifirni thill. any dis~;erni:wtion distribuhm, copyi:1u or ol!ier u:se oi this or you have received VliG rnessa9e error. pleose notify the :sender irnrnedintely and pomwnently delete ti% rnessaqo and any 1 f Torrance Refining Company LLC 3700 W. 190th Street Torrance, CA 90504 www.pbfenergy.com May 11, 2018 VIA EMAIL - dwillmore@rpvca.gov Douglas Willmore City Manager City of Rancho Palos Verdes 30940 Hawthorne Boulevard Rancho Palos Verdes, CA 90275 Re: City Council Agenda Item No. F Dear Mr. Willmore, The Torrance Refining Company LLC (“TORC”) has reviewed the agenda for the May 15th meeting of the City Council of Rancho Palos Verdes (“City”). Agenda Item No. F indicates that Council members will consider whether to approve sending a letter to the South Coast Air Quality Management District (“AQMD”) advocating for them to ban or phase-out the use of Modified Hydrofluoric Acid (“MHF”) at the Torrance Refinery, as part of the AQMD’s Proposed Rule 1410 - Hydrogen Fluoride Storage and Use at Petroleum Refineries (“PR 1410”) rulemaking. We respectfully request that the City Council consider the facts as presented in this letter and supporting documents attached to this letter, as a basis for rejecting any recommendation of sending a letter to the AQMD advocating a ban or phase-out of MHF Alkylation in Southern California. The proposed ban would impact two local refineries, Torrance and Valero’s Wilmington Refinery, and could lead to additional price increases in gasoline and other fuels, according to the California Energy Commission (“CEC”). Instead, we ask the City Council to vote to support the decision by the AQMD Refinery Committee on April 28th to have the AQMD staff and two Refineries work together to achieve a multi-tiered approach to safety mitigation that could provide real and valid risk reduction that would further protect Refinery workers and the community. However, if the City Council feels they must take action, we urge them to take a position similar to the City of Torrance, which is supporting the AQMD’s PR 1410 rulemaking process. While there is a lot of misinformation and pressure, City Council members should be aware that at the conclusion of the April 28th Refinery Committee, the Committee directed AQMD staff to develop a proposed regulation -- or enforceable agreement -- to further mitigate the risk from an accidental HF/MHF release. In its subsequent news release dated April 29th (attached), the AQMD indicated that it “will develop a multi-tiered proposal for reducing the risk of an accidental release of MHF at the refineries,” consisting of: (i) Tier 1 enhancements to existing mitigations and the addition of some automated mitigations; (ii) Tier 2 enhancements that would require fully automated mitigation measures; and (iii) Tier 3 concepts, which would be equivalent to a fail-safe operation. Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 2 Since the April 28th meeting, TORC has been reviewing the MHF Alkylation Unit safety systems we already have in place, which are considered by global experts to be among the most advanced in the world. We are also working on Tier I, II, and Tier III safety enhancements, and currently believe we already meet Tier I and II requirements and are working on Tier III enhancements: 1. The Refinery’s MHF Alkylation Unit meets Tier I criteria based on a the current American Petroleum Institute’s Recommended Practice 751 (“API RP-751”), “Safe Operation of Hydrofluoric Acid Alkylation Units,” and California Department of Industrial Relations (“CalOSHA”) Process Quality Verification (“PQV”) inspections. 2. In conjunction with the CalOSHA PQV inspection, the Refinery has voluntarily committed to install five Tier II safety enhancements on the MHF Alkylation Unit by February 2020, and has already began engineering design on these enhancements; and 3. The Refinery is developing potentially feasible Tier III safety enhancements for the MHF Alkylation Unit that would provide real and valid risk reduction to further protect Refinery workers and the community and is willing to commit to installing substantial enhancements to meet the Tier III requirement. While there are two refineries targeted by the rulemaking, we want to address the interests of the Torrance Refinery (“Refinery”), its workers, and the community, which would be best served by an enforceable agreement, rather than an extended PR 1410 rulemaking. Real and valid safety enhancements could be implemented at the Refinery in the near future, consistent with direction given by the Refinery Committee on April 28th, TORC is working with the AQMD to create a path forward for the implementation of its Tier II and proposed Tier III safety enhancements. Everyone working at the Refinery recognizes we have to earn the right to operate in the South Bay community. We are committed to safe, reliable, and environmentally responsible operations, and being active in the communities that host us. We have been communicating with public officials and community groups well before taking ownership of the Refinery on July 1, 2016. We operate with oversight from dozens of agencies at every level of government, in the state with the most stringent refinery safety regulations in the nation and world. We have also been investing in the Refinery, which is reflected by the fact the Refinery has been running reliably, safely, and environmentally responsible. As background, the alkylation process at the Refinery requires MHF to produce a key gasoline ingredient – alkylate, which must be blended into every gallon of California gasoline to meet the state’s stringent environmental standards for gasoline, the strictest in the world. Our Refinery’s alkylation unit was built in 1966 using HF as the catalyst, which the Refinery phased out in 1997. Since then, the Refinery has been required by a Consent Decree with the City of Torrance to use this safer, “modified” version of HF, or MHF, which was thoroughly tested by qualified scientists and researchers who were technical experts in their fields. Indeed, various safety experts and a Los Angeles Superior Court judge thoroughly reviewed and approved the test results that showed MHF is a safe technology. In 1997, the AQMD subsequently approved an operating permit to use MHF in the Refinery’s Alkylation Unit. The unit’s safety systems are also proven and effective. Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 3 Setting the Record Straight About MHF As mentioned above, a ban or phase-out of MHF would impact two of five Southern California refineries: Torrance and Wilmington refineries, which together supply approximately 30% of Southern California’s gasoline demand. Torrance alone supplies 30 to 40% of the jet fuel demand at Los Angeles International Airport and 60 to 80% of the (ECA) marine fuel to the Ports of Los Angeles and Long Beach, depending on demand. Torrance also supplies gasoline out of state to Nevada and Arizona. We are concerned because the City’s consideration of a letter advocating a ban or phase-out of MHF appears to be based on misinformation about the safe use of MHF at the Refinery. In particular, misinformation is being amplified by local activists about what might happen if a release of hydrogen fluoride (“HF”) were to occur. However, to be clear, both refineries phased out HF: Torrance in 1997 followed by Wilmington in 2007. The activists misrepresent the U.S. Environmental Protection Agency’s (“EPA”) Risk Management Program (“RMP”) regulations by referring to Refinery’s ultraconservative emergency “planning circle” as a “death zone” or “circle of death,” purposefully and needlessly creating fear among South Bay residents, regulators, and elected officials. There is no such circle or zone and to support this, the EPA cautions that “… planning circles are not intended to represent a ‘public danger zone’,” which is why the activists’ graphic misrepresentation of EPA’s planning tool is purposefully misleading and presented out of context -- the equivalent to recklessly yelling “fire” in a crowded theater. A cursory review of the EPA RMP program shows that many other industries still use unmodified HF in Los Angeles County and the region, including aerospace companies. This is the same chemical both refineries phased out long ago. Even if the refineries are forced to shut down their MHF alkylation units, there would still be many other facilities using ammonia, chlorine, HF, and other hazardous chemicals that also have emergency “planning circles” across the South Bay. Like the Refinery, these facilities are permitted to operate because they properly manage risk and operate safely. In fact, the EPA produced a report on HF in 1993 that stated there was no need for further legislation to regulate use of HF. Importantly, MHF is considered the most recent advancement in alkylation catalyst available today, and the two refineries combined share 100 years of operation with neither of them ever having an offsite HF or MHF release. In fact, after 51 years of operation, the Torrance Alkylation Unit has never had an offsite HF release, including the last 21 years using MHF, a period that includes both the 6.5+ Sylmar and Northridge earthquakes. To define this more clearly, that is equivalent to about 19,000 days, 450,000 hours, 27,000,000 minutes, 1,600,000,000 seconds, and counting. This consistent reliability and safety record is due primarily to the highly-trained Operators and support personnel including Chemical and Mechanical Engineers who manage the Refinery’s MHF Alkylation Unit, as well as the redundant safety systems employed on the unit, which include the MHF catalyst. In the context of earthquake preparedness, please note Refinery was built to California’s seismic code. We also conduct seismic assessments of the Refinery every five years, including the MHF Alkylation Unit, pursuant to California’s Accidental Release Prevention (“CalARP”) regulations. The purpose of Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 4 the CalARP seismic regulations is to prevent accidental releases of regulated substances in the event of an earthquake. Based on a review of the findings from the five-year assessments, TORC will then undertake the appropriate upgrades to meet the current seismic code. We are in compliance with the current seismic code requirements The Refinery also follows specific, global industry practices for safely and reliably managing this alkylation process. Global alkylation experts have publicly stated to the AQMD they consider the Refinery’s Alkylation Unit’s redundant safety systems, including the use of MHF, to be among the most advanced in the world. Wilmington Refinery’s Alkylation Unit has a similar record, using HF from 1969 until 2007, when they phased out HF and began using MHF in an “enforceable agreement” with the AQMD, which publicized the changeover as one of the AQMD’s “environmental justice initiatives” in 2003. That refinery has never had an offsite release, either. Combined, the two facilities have operated for 100 years without an offsite release. The AQMD issued permits to Refinery for its MHF alkylation unit in 1997 and Valero’s Wilmington Refinery in 2004, after thoroughly reviewing the efficacy of MHF catalyst technology. AQMD staff also worked with Quest Laboratories at the time to better understand how MHF works, As noted in these excerpts from a February 2003 AQMD news release announcing they had entered into an agreement with Valero that required Wilmington Refinery to phase-out and replace HF with MHF technology, the AQMD unequivocally supports and endorses the use of MHF to enhance public safety: “Once this refinery stops using concentrated hydrogen fluoride, we will have virtually eliminated the potential for a catastrophic accidental release of this compound in our region,” said Barry Wallerstein, executive officer of the South Coast Air Quality Management District.” “The agreement fulfills one of the 23 Environmental Justice goals adopted by AQMD’s Governing Board last fall.” “Switching to modified HF will minimize the possibility of a catastrophic accidental release not only at the refinery, but along Southland transportation corridors, as the additive is added to the chemical before shipping.” The Torrance and Wilmington MHF Alkylation Units have been operating without any offsite release since the AQMD originally issued permits to use MHF. The MHF technology is unequivocally the same today as when the AQMD originally permitted its use in both refineries. However, the safety systems, training, and knowledge of the MHF alkylation process and equipment have improved. Consequently, these MHF alkylation units are even safer today than when the AQMD issued the first operating permits to Torrance 21 years ago. As shown in the chart below, TORC believes the combination of MHF, passive mitigation, and active mitigation provides the ability to contain a release onsite, which is reflected in the unit’s reliability record of never having had an offsite MHF release in 51 years of operation. Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 5 As previously noted, TORC follows specific, global industry practices; i.e., API RP-751, for safely and reliably managing this process. Torrance’s MHF Alkylation Unit safety systems meet all API RP-751 requirements, and include the following: Preventive Safety Systems o Specialized training and personal protective equipment for all personnel entering the unit o Robust inspection and audit programs Refinery follows API RP-751 for M/HF units Recognized by CalOSHA and other government agencies globally Followed by refineries worldwide o Two Operators stationed on unit each shift in contact with Console Supervisor o Eight surveillance cameras with video playback o Emergency simulation drills Joint TORC and Torrance Fire Department (“TFD”) drills TORC and TFD personnel are both Hazmat trained o MHF Refinery MHF Alkylation Unit meets >50% Airborne Reduction Factor (“ARF”) per MHF chemistry on an annual basis as required by the City of Torrance Consent Decree Online MHF Analyzer Samples taken once every shift Emergency Response Safety Systems o Redundant response systems allow rapid response and mitigation of any potential loss of containment o Barrier technology = passive mitigation Increases total unit ARF to 89% in combination with MHF chemistry Flange barriers Settler belly pans Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 6 Acid circulation pump enclosures o Water Mitigation = active mitigation Nine remotely controlled water cannons Used in tandem with console cameras to target a specific release point Local fire monitors Deluge systems on major pumps Fire sprays on vessels o 29 Point sensors located throughout unit and on perimeter Detect HF down to 0.1 parts per million (ppm) Alarms internally at 2 ppm Reported directly to AQMD at 6 ppm In the process of completing a similar alarming system to TFD o Line of Sight Laser (Open Path) system on unit perimeter Detect HF down to 0.1 ppm per meter (ppm*m) Alarm internally at 50 ppm*m and 75 ppm*m o Emergency evacuation system routes all acid from the main unit to a storage drum located behind a blast-proof wall - active mitigation 80% of acid is removed in ~2 min The remaining 20% is transferred within 7 minutes after the system is activated o Automatic valves have battery backups that allow the valves to be operated in the event of a power disruption - active mitigation o All flanges and connections in acid services are coated with special MHF-sensing paint - active mitigation Extremely sensitive - paint changes from yellow to red in the presence of trace amounts of MHF in the parts per billion (ppb) range o Alarmed safety showers TORC’s Tier II and proposed Tier III safety enhancements would add additional redundancy and robustness to these already redundant safety systems, further reducing risk to Refinery workers and the community. Recent CalOSHA Inspections In the last year, the Refinery has undergone two comprehensive inspections by CalOSHA, the state’s primary industrial safety and risk management agency. CalOSHA’s first inspection occurred during the Refinery’s Spring 2017 turnaround, which lasted approximately three months and involved approximately one-million hours of work. During the turnaround period, CalOSHA inspectors frequently came onsite to check if the turnaround was being conducted compliantly with the state’s Process Safety Management (“PSM”) regulations. After the conclusion of its inspection, CalOSHA issued a Notice of No Violation for the turnaround, helping make the turnaround a success. The second inspection was a Program Quality Verification (“PQV”) inspection, a multi-agency onsite inspection led by CalOSHA, with participation from the Torrance Fire Department, EPA Region IX, and Los Angeles County Fire Department. The PQV inspection lasted six months, starting in July 2017 and Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 7 ending in January 2018. During a PQV inspection, CalOSHA inspectors comprehensively evaluate a refinery’s PSM program and systems. CalOSHA’s six-month PQV inspection at the Refinery was unprecedented in duration, scope, and size. This multi-agency PQV inspection primarily focused on the Refinery’s MHF Alkylation Unit, but also included the Hydrocracker, Hydrotreater, Coker, Fluid Catalytic Cracking, and Crude Units, which are all major processing facilities. In order to complete the inspection within the six-month period, the multi-agency teams of inspectors were required to be on-site, multiple days per week. To accommodate the PQV inspection and the teams of inspectors, TORC had a dedicated agency liaison, field teams for each unit inspected, and dedicated staff responding to agencies’ document requests and production. At the conclusion of the six-month inspection, CalOSHA issued five citations for alleged tripping hazards, missing guardrails and machine guards, exposed hot surfaces, missing electrical covers, unsecured floor opening covers, lack of proper swing gates, inaccurate P&IDs, barriers not properly installed, out of service equipment not having equivalent mitigation, lack of evaluation of Contractor safety programs, inadequate written plan for employee participation, and the prior owner’s Process Hazards Analyses. All of the alleged issues were either abated during the inspection or have since been abated. Importantly and relevant to the proposal the City Council is considering, the inspectors found no mechanical integrity issues with the MHF Alkylation Unit, and overall, TORC received positive comments from the CalOSHA, such as: Refinery is on par with Northern California refineries, which are thought to have superior PSM programs; Their Findings were comparable to other refineries the agency inspects; and They had no additional safety concerns about Torrance in comparison to other California refineries. At the conclusion of the PQV inspection, TORC committed to add new MHF Alkylation Unit safety enhancements focusing on automating certain appropriate functions to improve incident response time, installing physical barriers, and upgrading leak detection technology, which will further protect workers and the community. TORC committed to complete these enhancements by January 2020. Chemical Safety Board (“CSB”) Final Report City staff’s Agenda Report references the February 18, 2015 Electrostatic Precipitation (“ESP”) incident at the Refiner under the former owner and operator, stating: “In February 2015, a large explosion in an air pollution control device ejected heavy metal parts, narrowly missing a unit that contains highly-toxic modified hydrofluoric acid (MHF).” Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 8 If staff’s intention in stating this is to imply that if the MHF Alkylation Unit had been struck there could have been a catastrophic incident, this is misleading and could result in instilling fear in the public. This is another tactic that activists have used for those purposes. Notably, this claim is based on the Chemical Safety Board’s (“CSB”) characterization of this incident as a “near miss.” This is potentially misleading because a Federal California Central District Court recently denied the portion of a motion brought by the U.S Department of Justice on behalf of the CSB to enforce administrative subpoenas issued to ExxonMobil demanding the production of MHF Alkylation Unit-related documents the CSB had requested from ExxonMobil in the course of the agency’s investigation into the February 18, 2015 ESP incident. In denying the CSB’s requests for ExxonMobil to produce these documents, the Court held that “the requests [were] UNFORCEABLE because the requested information is not sufficiently related to the facts, conditions, and circumstances and the cause or probable cause of the February 2015 accidental release to reasonably be considered relevant.” See United States of America v. Exxon Mobil Oil Corp., Case No. MC 17-00066 CBM (November 3, 2017), p. 7, lns. 14-17; (emphasis in the original). However, a number of important, forgotten factors related to the February 18, 2015 ESP incident are (1) as a precautionary measure the MHF in the acid settlers near where the debris landed was rapidly evacuated from the unit; and moreover, (2) there was no release. Additionally, no one has offered technical evidence or an engineering study that concludes there could have been a release from the Alkylation Unit on February 18, 2015. Merely having an opinion and stating that a “release could have occurred” is speculative at best and purposefully generates unwarranted and needless public fear. Based on public statements by the refinery’s prior owner at the time of the incident, there was no risk of the piece of ESP ductwork causing an MHF Alkylation Unit release on February 18, 2015. Specifically, they said the MHF Alkylation Unit’s safety and mitigation systems were fully functional during and following the incident. Based on the prior owner’s statement, which was made in a public forum, it is highly unlikely ESP debris from the explosion had the force, or could have had the force, necessary to penetrate the 2-inch thick carbon steel MHF Alkylation Unit settlers. The function of an acid settler is literally to “settle out acid” in the bottom third of each of the settlers, while by design the upper two-thirds of a settler contains light hydrocarbons. The acid phase lies in the green portion of the settler vessel. The belly pans physically prevent an upward- or horizontally-oriented MHF release from occurring. The belly pans extend above the acid level for the complete length and width of the settler vessel. Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 9 Accordingly, if the debris had struck an acid settler and somehow had the force to penetrate the 2” thick carbon steel shell, the former owner indicated this would likely occur in the upper section of the settler, which would cause the released light hydrocarbons to auto-refrigerate on exposure to ambient air. If that were to happen, the responsible person on duty would evacuate the acid from the bottom of the settler(s) at the same time and the Alkylation Unit’s multiple layers of protection would deploy, which is what was done as a precaution at the time of the incident, in accordance with Refinery training and procedures. Importantly, the Refinery made the following corrective actions to the Fluidized Catalytic Cracking Unit (“FCC”) and ESP to prevent a similar ESP incident from occurring in the future: Installed new instrumentation, new equipment, and additional alarms; Defined and began using additional minimum levels for operation; Developed a “safe park” procedure and updated shutdown/startup steps for the FCC; and Trained Refinery personnel to use the new instrumentation, equipment, additional alarms, and procedures. In addition, TORC recently initiated a Refinery-wide training program to enhance focus, professionalism, competency and capabilities across the Refinery. This investment in our workforce touches every employee who works at the refinery and they are giving the program positive, enthusiastic feedback. Finally, and importantly, one of the Tier III safety enhancements that TORC is willing to commit to the installation of protective steel structure around the unit’s acid settlers that would prevent debris or projectiles from hitting the settlers, and include additional safety mitigation systems. Sulfuric Acid and Alternative Alkylation Technologies Despite these facts and the unit’s long safety performance, those who want to ban or phase-out MHF point to Sulfuric Acid alkylation because they believe the this technology is safer than MHF and could be installed in four years. However, again they misrepresent the facts. A Sulfuric Acid alkylation unit is not and would not be any safer than the Refinery’s MHF Alkylation Unit. In 1995, after an extensive technical review of the MHF technology by and recommendation of the Court-appointed Safety Advisor, a well-respected Los Angeles Superior Court Judge approved and required the use of the MHF technology at the Refinery under the City of Torrance Consent Decree, finding “… that the modified HF catalyst (including mitigation) as safe or safer than a Sulfuric Acid alkylation plant producing a comparable amount of alkylate.” In addition, Sulfuric Acid alkylation units are three times larger than HF/MHF units. They would effectively increase air pollution - primary air emission concerns are “criteria pollutants” including sulfur oxides; greenhouse gases (“GHG”); and fugitive emissions. These units also consume more energy and have a larger GHG footprint than HF/MHF units. Moreover, these units require a significant amount of acid to run safely and reliably. Torrance alone would require approximately 1,440 truck shipments per month, which is about 50 trucks per day, if the Sulfuric Acid is renewed offsite. In Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 10 contrast, HF/MHF alkylation units regenerate the acid within the process and only require four to six trucks per month. After considering these negative environmental impacts, the highly regarded California Energy Commission (“CEC”) pointed to the uncertainty of operating permits ever being granted for new Sulfuric Acid alkylation units at Torrance and Wilmington. Plus, even if all the required permits were granted, designing, permitting, and constructing new “grassroots units” would take many years and each Refinery would face unique challenges, including competing internally with other projects for funds to build a new unit. The two Sulfuric Acid alkylation plants that have recently been announced to be built in Texas and Louisiana are not representative of how quickly such a grassroots unit could be built in California. Facilities in Texas and Louisiana are not subject to the same complex, extensive permitting requirements that California facilities must comply with, such as a comprehensive project environmental analysis required by the California Environmental Quality Act (“CEQA”). Additionally, they are closer to facilities that manufacture and fabricate the piping, vessels, structures, and equipment that would be required for a grassroots unit. In California, we could never permit, design, engineer, procure, fabricate, deliver, build, and start up a unit within a four-year time period as some activists have alleged, based on projects in Louisiana and Texas. Finally, a Sulfuric Acid alkylation unit at Torrance would be cost-prohibitive. The Burns & McDonnell (“B&McD”) report included in the packet we provided concludes that the total installed cost to build an equivalent capacity Sulfuric Acid alkylation unit for Torrance would be approximately $600,000,000, excluding the cost of spent sulfuric acid regeneration. An industry consultant told us a new grassroots, spent acid regeneration plant of sufficient capacity to serve a sulfuric acid alkylation unit at Torrance, or upgrading an existing third-party spent acid regeneration facility, could cost another $300,000,000, inflating the total estimate to approximately $900,000,000. Unqualified and unsupported estimates have been presented as low as $125,000,000 to replace a MHF Alkylation unit with a Sulfuric Acid alkylation unit. These estimates have been debunked and proven to significantly underestimate the cost to build such a unit. This has been convincingly shown by the B&McD’s report, as well as through testimony given by the licensor of this technology at the AQMD’s August 23, 2017 PR 1410 Working Group meeting. At this meeting, the licensor informed the AQMD, PR 1410 Working Group members, and public in attendance that the estimates were based on Gulf Coast pricing and did not include scale-up or additional costs for critical refinery utility systems. We have been evaluating alternative alkylation technologies since announcing the acquisition of the Refinery in September 2015. We have met separately with alkylation experts from Honeywell/UOP, Stratco/DuPont, B&McD, KBR, and CB&I, as well as independent alkylation experts, to explore emergent alternatives. Each of these technology licensors has also provided background information to the AQMD PR 1410 Working Group associated with the PR 1410 rulemaking. Each licensor has publicly acknowledged their respective alkylation technologies are still in development, and therefore, not commercially viable or proven, especially at the size and production rates required to replace existing units at Torrance and Wilmington. As a result, these alternative technologies: Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 11 Are many years away from being commercially proven, safe/reliable, and available; Have unknown environmental impacts and process safety operations; and Will cost as much as, and perhaps more than, a conventional, new grassroots Sulfuric Acid alkylation unit. Accordingly, the emerging technologies will not be commercially available or proven within a four-year time period as some activists have opined. Their opinions are without any basis in fact considering the licensors’ presentations made at AQMD Working Group meetings in 2017 do not support their claims. Due to the cost and uncertainties of alternative alkylation technologies, a prohibition or ban of MHF would jeopardize the viability of both South Bay refineries because the plants would no longer be able to produce the cleaner-burning CARB gasoline required by law in California. This could result in the loss of approximately 30 percent of southern California’s gasoline supply, 30 percent of jet fuel sent to Los Angeles International Airport and 65 to 85 percent of the low sulfur Emissions Control Area bunker fuel at the ports of Los Angeles and Long Beach. According to the CEC, shutting down the Torrance and Wilmington Refineries could create a 26 cent per gallon or more, increase in the costs of gasoline in the region, which is conservative because gasoline prices rose more than that when Torrance was operating at minimum rates in parts of 2015 and 2016. If the Refinery were to close, there could be market impacts as noted by the CEC above; plus, such a closure could impact the Refinery’s 570 employees and 300 daily Building Trades and other contractors who rely on their steady, highly-paid jobs provided by the Refinery to support their families. Additionally, when considering the Refinery’s economic multiplier effect, for every Refinery job lost, 15 other jobs throughout Southern California and the state would be eliminated. Moreover, such a closure would eliminate the support the Refinery provides to 45 community groups and non-profits, City of Torrance programs, and school district initiatives. The taxes and fees the Refinery pays to fund valuable services community members rely upon, including police and fire services, parks and recreation programs, just to name a few, would also be reduced or eliminated if the Refinery closes. Inherent Safety Measures California refineries are required to consider the availability of inherent safety measures under California’s recently-enacted Process Safety Management (“PSM”) regulations (Title 8 California Code of Regulations (“CCR”) §5189.1(l)) adopted by the California Occupational Safety and Health Standards Board (“CalOSHA”), and new California Accidental Release Prevention (“CalARP”) Program 4 regulations (Title 19 CCR §2762.13) adopted by the Office of Emergency Services (“OES”). These regulations went into effect on October 1, 2017. Both these recently-enacted regulations have mirror requirements for refineries to conduct a “Hierarchy of Hazard Control Analysis” (“HCA”). Under these state regulations, there are five triggers when refineries are required to conduct an HCA: (1) existing processes; (2) Process Hazards Analysis (“PHA”) scenarios that may result in a major incident; (3) recommendations that result from a major Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 12 incident investigation; (4) Method of Change review of a major change; and (5) during the design and review of new processes, new process units or facilities, and related process equipment.1, 2 Perhaps most significantly, both regulations establish risk reduction targets that must be assessed through an HCA. Specifically, the HCA requires refineries to develop recommendations to eliminate risks posed by process safety hazards “to the greatest extent feasible,” using first and second order inherent safety measures.3, 4 Any remaining risks must be reduced using passive, active, or procedural safeguards.5, 6 TORC emphasizes the first and second order inherent safety measure evaluation that is embedded in the HCA. According to the new PSM and CalARP Program 4 regulations, inherent safety7, 8 is defined as: An approach to safety that focuses on eliminating or reducing the hazards ass ociated with a set of conditions. A process is inherently safer if it eliminates or reduces the hazards associated with materials or operations used in the process, and this elimination or reduction is permanent and inseparable from the material or operation. A process with eliminated or reduced hazards is described as inherently safer compared to a process with only passive, active and procedural safeguards. The process of identifying and implementing inherent safety in a specific context is known as inherently safer design. • First Order Inherent Safety Measure. A measure that eliminates a hazard. Changes in the chemistry of a process that eliminate the hazards of a chemical are usually considered first order inherent safety measures; for example, by substituting a toxic chemical with an alternative chemical that can serve the same function but is non - toxic. • Second Order Inherent Safety Measure. A measure that effectively reduces a risk by reducing the severity of a hazard or the likelihood of a release, without the use of add- on safety devices. Changes in process variables to minimize, moderate and simplify a process are usually considered second order inherent safety measures; for example, by redesigning a high-pressure, high-temperature system to operate at ambient temperatures and pressures. As part of the HCA, refineries must review and analyze a broad range of information related to first and second order safety measures and passive, active, or procedural safeguards. The refineries must develop 1 See 8 CCR § 5189.1(l)(1), (2). 2 See 19 CCR § 2762.13(a), (b)(1)-(4). 3 See 8 CCR § 5189.1(l)(4)(E). Note that under the new PSM regulations “feasible” is defined as “[c]apable of being accomplished in a successful manner within a reasonable period of time, taking into account health, safety, economic, environmental, legal, social and technological factors.” See 8 CCR § 5189.1(c). 4 See 19 CCR § 2762.13(f)(1)-(3). Note that under the new CalARP Program 4 regulations “feasible” is defined as “[c]apable of being accomplished in a successful manner within a reasonable period of time, taking into account health, safety, economic, environmental, legal, social and technological factors.” See 19 CCR § 2735.3(v). 5 See 8 CCR § 5189.1(l)(4)(E). 6 See 19 CCR § 2762.13(f)(1)-(3). 7 See 8 CCR § 5189.1(c). 8 See 19 CCR § 2735.3(cc) Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 13 risk-relevant data, identify process safety hazards, and review “all” inherent safety measures and safeguards for each identified process safety hazard.9, 10 The refineries must also review “publicly available information on inherent safety measures and safeguards.”11, 12 This review must include inherent safety measures and safeguards that have been “achieved in practice” by the refining or a related industry, as well as measures required or recommended by a federal, state, or local California agency in a regulation or report.13, 14 Accordingly, as detailed above, all California refineries will be required to implement feasible inherent safety measures to address hazards through the HCA process under the new PSM and CalARP Program 4 regulations, which by default includes Torrance and Wilmington. Through this process, at the required points, TORC and Valero will be required to review MHF Alkylation to determine if there are feasible alternatives (i.e., safety measures and safeguards). Although the Refinery MHF Alkylation Unit already has redundant safety systems in place that have prevented an offsite release over its 51 years of operation, TORC has committed to CalOSHA and other agencies to implement safety system enhancements to further protect workers and the community. In addition, the new PSM and CalARP Program 4 regulations will require the Refinery to periodically assess the state of technology to assure that the MHF Alkylation Unit, as well as all Refinery process units, feature the most up-to-date inherently safety technology. Before Taking Action Accordingly, the Management of Refinery, on behalf of our employees, contractors, and local vendors, urge members of the City Council to closely consider both sides of the alkylation story and contemplate all the facts and evidence before taking action on any Resolution or Letter of Support. We invite the City Council and City staff to visit the Refinery for a tour of our MHF Alkylation unit. They can meet the people who operate the unit and learn first-hand about the many redundant safety systems we employ that keep Refinery personnel and the community safe. We are confident the combination of MHF and redundant safety systems will contain any potential MHF release onsite, as we have seen since the unit began operating 51 years ago. We also encourage you to read the news release issued by the AQMD on April 29, 2018, which explains that the Refinery Committee recommended that the refineries enter into enforceable agreements with the District as an alternative to phasing out MHF. To further assist in your review of the facts and evidence related to the Refinery and its safe use of MHF, we have attached our April 27, 2018 letter to the AQMD that provides detailed comments to staff’s presentation, addressing the misstatements and misrepresentations in the presentation related to the safe use of MHF, TORC’s position on alternative Alkylation technologies, and our position on the 9 See 8 CCR § 5189.1(l)(4)(C). 10 See 19 CCR § 2762.13(e)(3). 11 See 8 CCR § 5189.1(l)(4)(D). A CalOSHA representative has tentatively stated that this information is limited to information in English from the United States. 12 See 19 CCR § 2762.13(e)(3). 13 See 8 CCR § 5189.1(l)(4)(D). 14 See 19 CCR § 2762.13(e)(3). Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 14 multi-tiered approach that could provide real and valid risk reduction that would further protect Refinery workers and the community. In addition, with this letter you will be receiving a spiral bound presentation from the Torrance Refining Company called “Setting the Record Straight, The Truth About Torrance Refinery MHF,” which takes elements of two Refinery Action Alliance (“TRAA”) public presentations and provides the facts behind their myths about MHF. Our report presents the facts based on testing, modeling, and research by qualified experts, correcting misinformation in the presentations by TRAA (“The Case Against MHF, - ARF-SRI-and Barriers-” (January 4, 2017) and TRAA’s feedback to Torrance Fire Department (February 28, 2017). * * * In closing, the Torrance Refining Company is confident the many layers of protection, safety systems and mitigation measures built into our MHF alkylation unit are responsible for enabling the unit to operate safely, reliably, and in an environmentally responsible manner. MHF is the newest, most advanced alkylation catalyst technology available today and the Refinery’s MHF alkylation unit with its current safety systems is the best and safest alkylation process for Refinery. No emerging alkylation technology has reached the mature state of technological, economic, or commercial viability achieved by HF/MHF or sulfuric acid alkylation. Until a newer technology is proven to be inherently safer than MHF alkylation, feasible, cost-effective, commercially viable on a similarly-sized commercial unit, and consistent with California’s environmental goals, the only viable option for the Refinery at this time is MHF, which we are required to use under the terms of the Refinery’s Consent Decree with the City of Torrance. We are continuously looking for opportunities to further improve Refinery operations. To this end, we are in discussion with the AQMD and other agencies about additional enhancements we can potentially implement to the Refinery’s MHF alkylation unit to further enhance its already redundant safety systems. For all these reasons, we encourage the City to reject the proposed letter that would encourage the AQMD to ban or phase-out MHF and consider supporting the AQMD Refinery Committee’s decision to seek an enforceable agreement with the refineries, based on enhancing safety measures. A third option if the City feels that it must take some action, would be to take a position similar to the City of Torrance and support the AQMD’s PR 1410 rulemaking. We respectfully request that the City Council consider the facts, as presented in this letter and supporting documents we provided, and instead, as directed by the AQMD Refinery Committee on April 28th, allow the AQMD staff and the two Refineries to work together towards a multi-tiered approach that could provide real and valid risk reduction that would further protect Refinery workers and the community. Mr. Douglas Willmore, Re: City Council Agenda Item No. F May 11, 2018 Page 15 If you or any City Council member(s) have any questions concerning this letter or attachments, or would like to visit the Refinery for a tour of the MHF Alkylation Unit, so that you can see first-hand the many and redundant safety systems the unit employs to detect, prevent, and respond to any potential HF/MHF release, which there has never been an offsite in the unit’s 51 years of operation, please contact Betsy Brien, External Relations Manager, at (562) 227-0012 or me at (310) 212-4500. Sincerely, Steve Steach Refinery Manager Attachments (4) cc: VIA EMAIL – cc@rpvca.gov Susan M. Brooks, Mayor, via email – susan.brooks@rpvca.gov Jerry V. Duhovic, Mayor Pro Tem, via email - jerry.duhovic@rpvca.gov Eric Alegria, Councilmember, via email – eric.alegria@rpvca.gov John Cruikshank, Councilmember, via email – john.cruikshank@rpvca.gov Ken Dyda, Councilmember, via email – ken.dyda@rpvca.gov Attachment One NEWS For Immediate Release April 29, 2018 SCAQMD Refinery Committee Directs Development of Measures to Further Reduce Risk of Toxic Chemical at Two South Bay Refineries The South Coast Air Quality Management District’s Refinery Committee on Saturday directed the agency’s staff to develop a proposed regulation -- or enforceable agreement -- to further mitigate the risk from an accidental release of a highly toxic chemical at two Southland refineries. The chemical, modified hydrofluoric acid (MHF), is used at Torrance Refining Co., owned by PBF Energy, and at the Valero Wilmington Refinery. “If released during a refinery accident, MHF could pose a serious health threat to the community,” said Clark E. Parker, Sr., Ph.D., chairman of SCAQMD’s Refinery Committee. “We are directing staff to identify potential further mitigations to benefit public health and safety.” Other committee members attending Saturday’s meeting were Vice Chairman and Highland Mayor Larry McCallon, Rolling Hills Estates Mayor Pro Tem Judith Mitchell, and Joseph Lyou, Ph.D. SCAQMD Chairman William A. Burke, Ed.D., participated as an ad hoc member. More than 500 residents and refinery workers were present for the nearly six-hour meeting at Torrance City Hall to provide input on the proposed measures. The event was the fourth Refinery Committee meeting in the South Bay conducted since April 2017 to examine MHF safety issues and gather public input on rule concepts. In addition to public testimony, speakers included representatives of both refineries, labor unions, a UCLA professor and expert on the health effects of HF, and the president of a Torrance community group. Staff will develop a multi-tiered proposal for reducing the risk of an accidental release of MHF at the refineries. Tier 1 would include enhancements to existing mitigations and the addition of some automated mitigations. Tier 2 would require fully automated mitigation measures. Page 2 of 2 The committee also directed staff to further explore concepts for a Tier 3 mitigation, which would be equivalent to a fail-safe operation. MHF is used in the PBF and Valero alkylation units as a catalyst to produce a component of high-octane gasoline. All other refineries in the state and about 50 across the country use sulfuric acid in their alkylation units. Hydrofluoric acid is considered more hazardous than sulfuric acid because upon contact it not only burns skin tissue, but also damages bone and is potentially fatal. Unlike sulfuric acid, MHF has a low boiling point and in the event of an accidental release it can form a dense, ground-hugging cloud that could travel into a nearby community. Torrance Refining Co. and Valero Wilmington Refinery use hydrofluoric acid modified with an additive to provide, at best, a 30 percent additional reduction in the potential hazard to residents. However, MHF has the same harmful properties as unmodified hydrofluoric acid to those exposed. SCAQMD started developing its current proposed MHF regulation, known as Rule 1410, in April 2017. Since then staff has conducted numerous working group meetings composed of representatives from the refineries, community groups and other regulatory agencies. On Saturday, the Refinery Committee directed staff to develop Rule 1410 or equivalent measures in enforceable agreements with the two refineries. In February 2015, an explosion at the former ExxonMobil refinery in Torrance resulted in a 40-ton piece of debris landing within five feet of a large vessel containing MHF. As a result of the accident, community concerns about refinery safety and new information about the safety of MHF, SCAQMD began developing its proposed Rule 1410. For more information on SCAQMD’s Proposed Rule 1410, see http://www.aqmd.gov/home/rules-compliance/rules/proposed- rules/proposed-rule-1410. The SCAQMD is the air pollution control agency for Orange County and major portions of Los Angeles, San Bernardino and Riverside counties. -#- Attachment Two 1/16/2018 HF Valero 2003 http://www.aqmd.gov/home/news-events/current-news/2003-news-archives/hf-valero-2003 1/4 Home (../../../../home)/ News, Agendas, & Webcasts (../../../news-events)/ Current News (../../current-news)/ 2003 News Archives (../2003-news-archives)/ HF Valero 2003 HF Valero 2003 Highly Toxic Chemical to be Phased Out at Valero Re 1/16/2018 HF Valero 2003 http://www.aqmd.gov/home/news-events/current-news/2003-news-archives/hf-valero-2003 2/4 severe damage to human skin and lung tissue. In 1987, an accidental release of HF resulted from an explosion at the Mobil re 1/16/2018 HF Valero 2003 http://www.aqmd.gov/home/news-events/current-news/2003-news-archives/hf-valero-2003 3/4 AQMD is the air pollution control agency for Orange County and major portions of Los Angeles, San Bernardino and Riverside counties. YOU MAY ALSO LIKE ... About (/nav/about) 1/16/2018 HF Valero 2003 http://www.aqmd.gov/home/news-events/current-news/2003-news-archives/hf-valero-2003 4/4 South Coast Air Quality Management District 21865 Copley Dr, Diamond Bar, CA 91765 909-396-2000 Careers (/careers) Accessibility (/accessibility) Sitemap (/sitemap) Privacy Policy (/privacy) © 2018 South Coast Air Quality Management District Questions/Need Info? (mailto:webinquiry@aqmd.gov) Report Website Problem (mailto:webeditor@aqmd.gov) Attachment Three Setting the Record Straight The Truth About Torrance Refinery MHF January 16, 2018 2 •To set the record straight by telling the truth about Torrance Refinery’s use of an alkylation catalyst called modified hydrofluoric acid (MHF), which is the newest, commercially viable alkylation technology available •Present facts based on testing, modeling, and research by qualified experts o Correct misinformation in these presentations by the grassroots organization Torrance Refinery Action Alliance -TRAA “The Case Against MHF, -ARF-SRI-and Barriers-” (Jan. 4, 2017) TRAA’s feedback to Torrance Fire Department (Feb. 28, 2017) o Provide correct information for use in South Coast Air Quality Management District (SCAQMD) 1410 rulemaking process o Address community concerns generated by misinformation •Provide insights regarding issues raised at public meetings and hearings Purpose of This Presentation 3 Chapter 1 -Slide 4 Refinery Statement & Background Information Chapter 2 -Slide 7 MHF Alkylation & How MHF Works Chapter 3 -Slide 13 Torrance Refinery Action Alliance –TRAA Chapter 4 -Slide 20 MHF Has Distinguishing Behaviors Chapter 5 -Slide 26 MHF Review Process Chapter 6 -Slide 34 Vapor Pressure & Additive Concentration Chapter 7 -Slide 56 Airborne Reduction Factor & Societal Risk Index Chapter 8 -Slide 66 Using Barriers to Enhance Safety Chapter 9 -Slide 90 Measuring Risk to Ensure Safety Chapter 10 -Slide 102 Additional Safety Measures and Equipment Chapter 11 -Slide 108 Appropriate Use of EPA “Planning Circles” Chapter 12 -Slide 118 Irresponsibly Creating Fear and Outrage Chapter 13 - Slide 122 Sulfuric Acid Alkylation is a False Choice Chapter 14 - Slide 134 Emerging Alkylation Technologies are Unproven Chapter 15 - Slide 148 Converting the Alkylation Unit Is Implausible Chapter 16 - Slide 160 A Phase-Out or Ban is Illogical Chapter 17 - Slide 170 Summary Addendum - Slide 174 Glossary of Terms - Definitions Table of Contents 4 Chapter 1: Refinery Statement & Background Information We recognize we have to continue to earn the right to operate in the communities that host us. Since acquiring the refinery on July 1, 2016 PBF Energy has been investing in our people, processes, equipment and procedures to improve refinery operations. Everyone who works at the Torrance Refinery today is committed to safe, reliable, and environmentally responsible operations. The Alkylation Unit with its MHF catalyst are critical to the refinery’s future -this Additive represents the most recent proven alkylation technology. Our goal is to operate the best refinery in the State of California and the world…we’re working smartly and diligently on achieving this goal! 5 Torrance Refinery •Economic cornerstone for the City of Torrance o Continuous operation on 750 acres since 1929 •585+ employees / 320+ contractors o ~300 families with ties to Torrance o Turnarounds require additional contractors Spring 2017: ~1875 contractors at peak •~150,000 barrels per day (bpd) crude capacity o Processes crude oils primarily from California o Makes gasoline, jet fuel, diesel, other products •Supplies ~20% of SoCal’s gasoline demand o ~10% of California’s overall gasoline demand o Also supplies gasoline to Nevada & Arizona o Supplies ~25% of LAX jet fuel demand o Supplies ~65% of marine fuel to ports of L.A./LB •Uses MHF to make “alkylate” to blend gasoline o Needed to make all grades of CARB gasoline 6 •Protect our workers, the community, and environment through safe workpractices and procedures •Refinery workers are accountable, responsible, and have authority o To stop work for any safety concern o To shut equipment down for any safety concern •Continue improving our operational reliability to achieve safe,environmentally responsible operations o A safe and reliable refinery will also keep the community safe •Earning the right to operate in this community o Torrance Refinery meets with community groups frequently o We continue to work cooperatively with city officials and regulatory agencies o We have renewed efforts to explain to the community what we do, our safe practices and the refinery’s local and regional socioeconomic contributions Key Priorities 7 Chapter 2: MHF Alkylation & How MHF Works •Alkylate: critical, “clean” gasoline blending component also increases octane o Required for making all grades of CARB gasoline •Refineries use chemical catalysts to make Alkylate from low-value liquid petroleum gases - LPGs •Catalysts used to make Alkylate o Anhydrous hydrofluoric acid (AHF) o Modified hydrofluoric acid (MHF) o Sulfuric Acid •Each type of catalyst is safely used around the world but has unique risks o HF & MHF (M/HF) are used in over 50% of U.S. Alkylation Units as well as globally Benefit: M/HF is reused in the process Sulfuric Acid requires additional processing for reuse o Refining configurations, feed type and product slate determine catalyst type o Globally, refining alkylation represents ~2% of HF end use 8 •Torrance Refinery’s MHF Alkylation Unit is necessary to produce alkylate, acritical component of California’s CARB gasoline -the cleanest in the world •Highly-qualified engineers and research scientists developed MHF in the1990s •Under the City of Torrance Consent Decree, following a rigorous review ofthe MHF testing and modeling data, the independent Court-appointed SafetyAdvisor, an LA County Superior Court Judge determined that MHF o “would not form an aerosol or dense vapor cloud upon release” and MHF“(including mitigation) presents no greater risk than sulfuric acid alkylation plantproducing a comparable amount of alkylate” •Torrance Refinery has never had an offsite M/HF release since start-up in 1966 o HF: used from 1966 until 1997 Survived 6.5+ magnitude Sylmar (1971) and Northridge (1994)earthquakes o MHF in use since 1997 court approval and permit from SCAQMD Use of MHF Alkylation Technology at Torrance 9 •Excerpt AQMD: “Addendum, Mitigated Negative Declaration, Mobil Modified Hydrogen Fluoride Conversion Project”, p. 2 - July 9, 1997 o “The experimental testing indicated that the addition of the Mobil additive to HF was an effective method for reducing or elimination the amount of aerosol formed during a release. o “In summary, after review of available test data and performing release/dispersion modeling, under similar release conditions the addition of the Mobil additive to an HF Alkylation unit was determined to result in a reduction of HF hazard zones for equivalent releases. o “In all cases, addition of the additive of the Alkylation unit will reduce the distance traveled by HF in the event of a release. At any concentration of the additive, the vapor pressure of HF will be reduced, thus reducing the potential for public exposure to HF.” Use of MHF Alkylation Technology at Torrance 10 MHF Works: Proven by Testing •HF and MHF have different characteristics and “behaviors” o MHF is a different type of mixture from AHF •MHF works through Hydrogen Bonding o Additive forms hydrogen bonds to AHF to hold MHF in Liquid Phase o Water also contributes to bonding AHF •MHF used at Torrance Refinery does not flash atomize because of hydrogen bonding •Experiments in 1992 and 1994 showed the presence of the additive in AHF eliminates Flash Atomization of the release o Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F •AQMD Quote -“Alkylation Improvement Project, Final EIR”, Chapter 2, p. 2-7 -SCH #20030536, certified 12/16/04 regarding Valero’s MHF project o “The modified HF catalyst reduces acid vapor pressure sufficiently to suppress the usual flash atomization process of hydrofluoric acid, causing most of the acid to fall to the ground as an easily controlled liquid and reduces the potential for off -site consequences of an accidental HF release.” 11 •Visualize the nails as HF molecules •Visualize the strong magnet as the MHF Additive •Put the nails and strong magnet in a pail •Shake the pail to move the contents around •The nails -HF molecules -attach or “bond” to the magnet -Additive •Additive size and strength induces further attraction between HF molecules •HF molecules are attracted to the Additive and each other and bond together Example of Hydrogen Bonding: Nails in a Bucket 12 HF + Additive •Liquid HF chains already bond among themselves o Typically five or six HF molecules per chain •MHF Additive acts like a strong magnet to bond HF chains •Charge also distributed to surrounding HF chains o Causes the chains to bond with each other o Reduces HF volatility over a much greater volume than just a single Additive molecule •A little Additive goes a long way HF + Water •On a pound for pound basis, water is an even stronger HF magnet than the MHF Additive •One pound of water is roughly three times more effective at holding HF than one pound of Additive HF Bonding HF Additive HF Water HF HF HF Water Water 13 Chapter 3: Torrance Refinery Action Alliance -TRAA •Torrance Refinery Action Alliance (TRAA): Small, grassroots organization that has been trying to selectively ban the use of MHF in two South Bay refineries o 1/4/17 TRAA’s “Science Advisory Panel” released a presentation “The Case Against MHF, -ARF-SRI-and Barriers-” o 2/28/17 TRAA presented “The Case Against MHF, ARF-SRI-Barriers” to Torrance City Council & the public at City Hall; submitted comments refuting Torrance Fire Department’s (TFD) presentation on MHF •Torrance Refining plus independent global HF Alkylation authorities reviewed / analyzed TRAA presentations, sources and methodologies o Identified “Myths:” Incorrect, misleading, altered data and information taken out of context o Response: “Setting the Record Straight - The Truth About Torrance Refinery MHF” Compares and corrects TRAA “Myths” with “Facts” Glossary of Terms included as an Addendum for reference 14 MYTH -TRAA Claims: PBF has no concern for the safety and well-being of the community TRAA Comments on Torrance Fire Department’s Presentation at Torrance City Council Torrance Refinery Workshop -February 28, 2017 15 FACT: We recognize we have to earn the right to operate in this community •We want everyone inside and outside the Torrance Refinery to be safe and feel confident the refinery is in excellent hands •Safe, reliable, environmentally responsible operations are core values •We put safety before profits, otherwise we would be unprofitable and unsuccessful •Safety of all employees and contractors working in the refinery is our utmost priority o They work in safe conditions •PBF met with community groups and public officials before acquiring Torrance o Including TRAA, Homeowners, Associations, business groups, etc. •ALL refinery workers know they are accountable, responsible and have the authority to: o Stop work for any safety concern o Shut equipment down for any safety concern •We expect and want our employees to leave work in the same condition they arrived and feeling positive that they made solid contributions to the refinery •A safe and reliable refinery will also keep the community safe o About 300 families in Torrance have ties to the refinery 16 MYTH: TRAA Science Advisory Panel is knowledgeable about MHF and refining “ We performed an independent assessment of MHF using what’s called proprietary data that’s readily available online and there is no absence of information; there’s no vacuum. We have the information we need from the industry itself -online from Honeywell, from Valero, which uses MHF and so forth … Incidentally, we’ve heard that TORC has dismissed our science panel as aerospace engineers with no refinery experience. We prefer to think of ourselves as rocket scientists. Luckily, knowledge of chemistry and gas dynamics is more pertinent than refinery experience in this matter, so we feel we are qualified to do the assessment.” –TRAA Sally Hayati, SCAQMD Hearing April 1, 2017 Source: TRAA Facebook Page Post (Feb. 20, 2017)Source: TRAA Presentation “Modified Hydrofluoric Acid (MHF) –Wolf in Sheep’s Clothing” (Nov. 16, 2016) *Note: Purple boxes added to original image/text to highlight specific points referenced/discussed 17 FACT: TRAA Science Advisory Panel members have no training or experience in Refining or Alkylation •Although TRAA Science Advisory Panel members may have earned advanceddegrees, most have aerospace backgrounds o Knowledge in this field is irrelevant to Refining or Alkylation o Ms. Hayati’s degree is in Computer Science –not a “Rocket Scientist” •TRAA’s “Case Against MHF” presents misinformation related to MHF Alkylation o Understanding this complex field requires first-hand operational knowledge, experience, actual testing and/or modeling of alkylation technologies, particularly on efficacy of MHF o TRAA findings are based merely on internet searches, patent reviews, & news articles Because these are insufficient to challenge the science behind MHF, TRAA resorts to filling in data gaps and / or presents predetermined outcomes/conclusions Manipulating and / or altering data, particularly on patents o TRAA conclusions have not been tested or validated by third party •Contrast: Mobil, Phillips and Quest used highly QUALIFIED industry experts o Experienced in the science of refining, alkylation, and dispersion modeling Had in-depth technical knowledge of the chemistry and release phenomenology necessary to properly characterize MHF release behavior Applied scientific rigor in testing the efficacy of MHF o MHF technology resulted from field and laboratory testing, and pilot plant studies References•TRAA “The Case Against MHF, -ARF-SRI-and Barriers-”January 4, 2017•TRAA Comments on Torrance Fire Department’s February 28, 2017 Presentation at TorranceCity Council Torrance Refinery Workshop 18 MYTH: TRAA Science Advisory Panel is knowledgeable about MHF and refining “ We performed an independent assessment of MHF using what’s called proprietary data that’s readily available online and there is no absence of information; there’s no vacuum. We have the information we need from the industry itself -online from Honeywell, from Valero, which uses MHF and so forth … Incidentally, we’ve heard that TORC has dismissed our science panel as aerospace engineers with no refinery experience. We prefer to think of ourselves as rocket scientists. Luckily, knowledge of chemistry and gas dynamics is more pertinent than refinery experience in this matter, so we feel we are qualified to do the assessment.” –TRAA Sally Hayati, SCAQMD Hearing April 1, 2017 Source: TRAA Facebook Page Post (Feb. 20, 2017)Source: TRAA Presentation “Modified Hydrofluoric Acid (MHF) –Wolf in Sheep’s Clothing” (Nov. 16, 2016) *Note: Purple boxes added to original image/text to highlight specific points referenced/discussed 19 •Patents are ideas -NOT final products developed from the ideas o A final product or installation often varies significantly from the original patent o Many patents have NEVER been developed into a commercial product •When MHF was being developed, every reasonable idea generated a patent o Only some ideas were advanced to a final installation o Many patents (ideas) were further developed with testing into a final product that was different from the patent •Ms. Hayati misrepresents the Additive concentrations in the depicted barrels o 50% Additive was NEVER considered an option for MHF Alkylation o All of the patents TRAA references indicate that 50% Additive does not work as the alkylate production quality will reduce significantly •TRAA misinterpreted or changed some of the data they found in publicly available papers References •Cited throughout presentation FACT: TRAA evaluations and conclusions appear to be based on patents and publicly available papers and include many incorrect assumptions 20 Chapter 4: MHF has Distinguishing Behaviors 21 Slide left intentionally blank 22 MYTH -TRAA Slides 3 & 15: All types of HF acid behave the same TRAA “Case Against MHF” Jan 4, 2017 –Slide 3 TRAA “Case Against MHF” Jan 4, 2017 –Slide 15 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 23 FACT: Actual lab and field testing of these types of HF Acid prove each acid behaves differently •Hydrofluoric Acid (HF) type determines whether Flash Atomization occurs o Flash Atomization: The occurrence of a substance disintegrating into extremely small droplets when a pressurized liquid is released into the atmosphere •Anhydrous Hydrofluoric Acid (AHF): 99.995 wt% HF –generic used in industry o Full Flash Atomization readily observed o 1986 Desert Testing of AHF shown on TRAA Slide 3 was pre-MHF technology o HF has different characteristics -CANNOT be compared to MHF •HF-Alky Unit Acid (HF-AUA): 90-92 wt% HF –used by most refineries o Partial Flash Atomization readily observed •Delivered MHF to the Torrance Refinery: 85 wt% HF, 15 wt% Additive o Flash Atomization is not observed •MHF-AUA: ~80 wt% HF, ~7 wt% Additive, ~3 wt% Water, ~3 wt% ASO ~7 wt% Hydrocarbon –used by Torrance Refinery o Flash Atomization is not observed References •December 2016 ARF email submission to Torrance Fire Department •DAN 95M-0874 -MHF Airborne HF Reduction estimates 24 MYTH -TRAA Slides 3 & 15: All types of HF acid behave the same TRAA “Case Against MHF” Jan 4, 2017 –Slide 3 TRAA “Case Against MHF” Jan 4, 2017 –Slide 15 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 25 •TRAA is misrepresenting data as a scare tactic and apparently making calculations with limited knowledge •Testing in 1992 and 1994 showed the Additive in MHF eliminates Flash Atomization of HF associated with a jet release •Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F •Torrance Refinery’s MHF Alkylation chemical composition and the unit’s numerous safety systems directly impact ARF and SRI o CANNOT be directly compared to an unimpeded AHF release that was tested during the 1986 desert testing •Conclusion: Testing shows MHF DOES NOT form a dense, ground-hugging cloud as claimed by TRAA •AQMD Quote -“Alkylation Improvement Project, Final EIR”, Chapter 2, p. 2-7 - SCH #20030536, certified 12/16/04 regarding Valero’s MHF project o “The modified HF catalyst reduces acid vapor pressure sufficiently to suppresstheusualflashatomizationprocessofhydrofluoricacid,causing most of theacidtofalltothegroundasaneasilycontrolledliquidandreducesthepotentialforoff-site consequences of an accidental HF release.” References•Consent Decree/Safety Advisor’s Reports, May 1995 and October 1999•DAN 95M-0874 -MHF Airborne HF Reduction estimates•ReVAP Tutorial page 7 FACT: AHF tests conducted in the Nevada Desert in 1986 CANNOT be compared to an MHF release 26 Chapter 5: MHF Review Process 27 Slide left intentionally blank 28 MYTH -TRAA Slides 5, 7 & 8: “No Proprietary Justification for MHF Secrecy” TRAA “Case Against MHF” Jan 4, 2017 –Slide 5 TRAA “Case Against MHF” Jan 4, 2017 –Slide 7 TRAA “Case Against MHF” Jan 4, 2017 –Slide 8 29 •Parties that license MHF technology, including Torrance Refining Company LLC (TORC), are legally obligated to maintain the technology’s proprietary status •UOP is the licensor of the MHF technology and considers the MHF testing information proprietary and trade secret •Claims that product sales are an indication that related proprietary information can be publicly shared are irrelevant •With Licensor consent, proprietary MHF technology information has been shared with the City of Torrance, AQMD, EPA, and Cal OSHA o Permitted through licensing and confidentiality agreements, the Consent Decree, and California Public Records Act and Freedom of Information Act •Many references in this presentation refer to proprietary documents and data that are unavailable to the public FACT: Technology licensors declared MHF information to be 'proprietary' to protect their intellectual property 30 MYTH -TRAA Slide 9: “Public was never informed” of change in Additive concentration in 1999 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed TRAA “Case Against MHF” January 4, 2017 -Slide 9 31 FACT: The Additive concentration was thoroughly vetted and approved through the Consent Decree process, which represented the public interest •Additive with use of barriers was thoroughly vetted and approved in the Court-ordered Consent Decree process, involving the following who represented the public interest: o A well respected and experienced Superior Court Judge -Harry Peetris o Court Appointed Independent Safety Advisor -Steve Maher o City of Torrance -Mayor and Council o Torrance Fire Department and its independent Safety Consultants •1997: Torrance began using MHF Alkylation technology after AQMD issued permits o The initial higher Additive concentration caused operational instability in the Alkylation Unit and generation of an undesired by-product •1998: Mobil approached Court-appointed Safety Advisor, City and TFD to resolve this issue o Prompted reconsideration of the Additive concentration with other mitigation features o Through the Consent Decree process, additional testing and barrier technology review •1999: The Judge approved lowering Additive concentration in conjunction with the installation of barriers based on Safety Advisor recommendation after his thorough review of the barrier testing and input from City and TFD o “(Our) analysis show that the final operating configuration would provide an improvement to the level of safety to the Community.” •Safety Advisor’s Report stated MHF Alkylation Unit ARF increased from 65% in 1995 (MHF- AUA Chemistry) to 89% in 1999 (MHF-AUA chemistry + Barriers) o MHF Technology is successful Reference •Consent Decree Safety Advisor’s Report -October 1999 32 MYTH -TRAA Slide 9: “New MHF unit with 30% additive” and “Mobil slashed additive to 10% to get HF concentration >88%” *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed TRAA “Case Against MHF” January 4, 2017 -Slide 9 33 FACT: The Additive concentration was NEVER 30 wt% in 1997, but was 19 wt% •1997: 19 wt% MHF concentration caused operational instability and generated an undesired by-product o Additive concentration is misrepresented by TRAA’s lack of knowledge •1997-1998: Testing and review of barrier technology was undertaken to identify the optimal Additive concentration •1998: Mobil approached Court-appointed Safety Advisor, City and TFD to resolve this issue o Prompted the innovative reconsideration of the Additive concentration in conjunction with other passive mitigation features o Through the Consent Decree process, additional testing and barrier technology review •1999: Judge approved lowering Additive concentration with the installation of barriers for the Torrance MHF Alkylation Unit o MHF Additive was reduced to ~7 wt% with an HF concentration of ~80 wt% o Barrier technology proven by testing •Torrance Refinery’s MHF Alkylation Unit ARF increased from 65% in 1995 (MHF-AUA Chemistry) to 89% in 1999 (MHF-AUA chemistry + Barriers) o Barrier technology added another layer of protection and safety for MHF use o Increase ARF supported by actual testing and information in Mobil and Phillips patents References•Consent Decree Safety Advisor’s Report -October 1999 •DAN 95M-0874 -MHF Airborne HF Reduction estimates •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA, and MHF Releases 34 Chapter 6: Vapor Pressure & Additive Concentration 35 Slide left intentionally blank 36 MYTH -TRAA Slide 11: “Vapor pressure is the only fluid property related to the claimed relative safety of MHF.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 11 37 FACT: Vapor pressure is NOT the key chemical property driving the effectiveness of MHF •Additive’s primary effectiveness results from formation of hydrogen bonds that hold MHF in liquid phase o Additive is a heavy liquid with very low vapor pressure that does not evaporate •Hydrogen bonding helps MHF resist vaporization and prevents large-scale aerosoling of the released liquid •The Additive is only one component that impacts vapor pressure and aerosoling o Water and Acid Soluble Oil (ASO) also have significant positive effects •Water is a more effective vapor suppressant than the Additive due to strong hydrogen bonding o However, water content is limited to ~3 wt% to prevent accelerated corrosion •Effect of Additive and water on the solution’s surface tension, viscosity, and enthalpy of vaporization also reduces the propensity for aerosol formation •AQMD Quote -February 7, 2003, Governing Board Letter, Agenda No. 25, regarding Valero’s “enforceable agreement” to phase out HF for MHF: o “The unique physical properties of the additive substantially reduce the volatility of the acid at ambient conditions.This reduction in volatility proportionately reduces the amount of HF that can vaporize and subsequently disperse off-site from a given liquid release quantity.” References•DAN 95M-0874 -MHF Airborne HF Reduction estimates•ReVAP Tutorial page 7 38 MYTH -TRAA Slide 12: TRAA’s MHF and HF Vapor Pressure Graph is based on actual data TRAA “Case Against MHF” Jan 4, 2017 –Slide 12 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed Referenced Article by TRAA Science Panel Member 39 FACT: TRAA’s MHF and HF Vapor Pressure Graph is based on theoretical data and unsupported assumptions •Patent US 5,654,251 states the following in support of low concentrations of MHF Additive being effective in depressing vapor pressure: “One important function of the presence of the sulfone component in the composition is its vapor pressure depressant effect upon the overall catalyst composition. Therefore, to take advantage of the vapor pressure depressant effects of the sulfone compound, it is desirable to utilize the sulfone in the catalyst mixture in an amount in the range of from about 2.5 weight percent to about 50 weight percent. In the situation where both vapor pressure depression and improved catalytic activity and selectivity are desired, the composition that works best in the alkylation of olefins has less than 30 weight percent sulfone.” [Emphasis added.] •TRAA source: Harpole article based on theoretical data rather than actual data o Harpole uses AHF data that is NOT relevant/applicable to MHF o Harpole does NOT include the other components of MHF –water and ASO o Harpole’s theory is NOT supported by testing o Harpole’s conclusion is NOT supported by a third party review Reference •Patent US 5,654,251 40 MYTH -TRAA Slide 12: TRAA’s MHF and HF Vapor Pressure Graph is based on actual data TRAA “Case Against MHF” Jan 4, 2017 –Slide 12 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed Referenced Article by TRAA Science Panel Member 41 FACT: TRAA’s MHF and HF Vapor Pressure Graph is based on theoretical data and unsupported assumptions •1995 Patent referenced in Harpole’s article does NOT support his theoretical assumption that Flash Atomization will occur •Referenced 1995 research summary article actually states: “This aerosolization tendency can be significantly reduced by introducing an additive, which reduces the vapor pressure thereby eliminating flash atomization.” o Harpole ignores this and all data that supports testing and MHF efficacy References•Patent US 5,654,251•R. Muralidhar, G.R. Jersey, F.J. Krambeck, S. Sundaresan, “A two-phase release model for quantifying risk reduction for modified HF alkylation catalysts,” J. Hazardous Materials, 44, 141-183 (1995) 42 MYTH -TRAA Slide 13: Patent table refers to MHF: “Appearance is ‘fuming,’ like HF’s. NOT SAFE.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 13 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 43 •Actual table from patent shows additional information and refers to alkylate product rather than MHF; TRAA misleadingly indicates the table refers to MHF Reference •Patent EP 0796657 B1 FACT: TRAA’s “Table A” includes partial information -NOT the complete, original table, which shows ALL alkylate properties *Note: Green box added to original image from Patent to highlight specific point referenced/discussed 44 MYTH -TRAA Slide 13: Patent says “Appearance is ‘fuming,’ like HF’s. NOT SAFE.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 13 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 45 •Patent EP 07 96657 B1 does NOT define fuming and the mentioning of fuming in the patent application is NOT indicative of Rainout from MHF •Sample analyzed in “Table A” on TRAA’s slide is alkylate product -NOT acid o Patent lines [0038] [0039] state: “Samples of liquid and gas products were analyzed.” •“Table A” on TRAA’s slide includes partial information -NOT the patent’s complete, original table, which shows ALL alkylate properties •Patent line [0040] states: “performance was comparable to pure HF” o This patent statement refers to alkylate product quality, including appearance, from a mixture of 20 wt% Additive and 80 wt% HF o NOT that the MHF acid had the same appearance as pure HF •Subsequent patents quantify Rainout in great detail Reference •Patent EP 0796657 B1 FACT: NOTHING in Patent EP 07 96657 B1 says MHF was fuming and is not safe or viable 46 MYTH -TRAA Slide 13: “No data is given for any lower concentration [ MHF with <20%], since that was too low to confer any safety advantage over HF.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 13 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 47 FACT: Patent US 5,654,251 presents data that the Additive was tested at concentrations as low as 2.5 wt% Additive •Patent EP 0796657 B1 is silent on whether lower concentrations were tested o 1992: One of Mobil’s earliest MHF patents o Patent purpose: Test pilot plant alkylate quality comparing MHF to HF catalysts •Patent US 5,654,251 used in Harpole’s Article and referenced by TRAA indicates that Additive concentrations as low as 2.5 wt% were tested o Harpole and TRAA ignored this information -see Slide 39 •TRAA misrepresents the patent and ignores data that supports MHF efficacy References •Patent EP 0796657 B1 •Patent US 5,654,251 48 MYTH -TRAA Slide 13: “ > 40% additive appears as a liquid. SAFER, although some HF does get airborne.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 13 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 49 FACT: Patent refers to an alkylate sample -NOT an MHF acid sample •Patent EP 0796657 B1 does NOT state that at >40% Additive concentration the acid appears as a liquid o Sample analyzed in “Table A” on this slide is alkylate -NOT an acid sample o Patent does NOT state that some MHF becomes airborne at Additive >40% •Patent line [0040] states “performance was comparable to pure HF” o This patent statement refers to alkylate product quality, including appearance, from a mixture of 20 wt% Additive and 80 wt% HF o NOT that the MHF acid had the same appearance as pure HF –see Slide 43 Reference •Patent EP 0796657 B1 50 MYTH –TRAA Slide 13: “Phillips notes, ‘Alkylate quality… decreased with further Sulfolane’ above 20% and isoparaffin/olefin alkylation ceased for additive concentration > 50%. MHF isn’t viable.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 13 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 51 •Patent EP 0796657 B1 line [0041] states: “Alkylate quality increased slightly upon adding 20 wt% Sulfolane to HF and then decreased with further sulfolane dilution. Activity for isoparaffin/olefin alkylation was NOT observed above about 50 wt% sulfolane in HF.” (Emphasis added) •Patent line [0040] also states: “Performance diminished slightly upon adding 50 wt% sulfolane to HF. A 40/60 HF/Sulfolane catalyst showed no activity for alkylation.” •TRAA misrepresents the patent and ignores data that supports MHF efficacy Reference •Patent EP 0796657 B1 FACT: Patent shows MHF is effective and a viable technology 52 MYTH -TRAA Slides 7, 8 and 14: “MHF is 90% HF”; Acid is delivered with 10% Additive TRAA “Case Against MHF” Jan 4, 2017 –Slide 7 TRAA “Case Against MHF” Jan 4, 2017 –Slide 14 TRAA “Case Against MHF” Jan 4, 2017 –Slide 8 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 53 FACT: MHF is delivered at 85 wt% HF and 15 wt% Additive •The positive effect of MHF results from the combination of four components: Additive, Water, Acid Soluble Oil, and Hydrocarbons •Torrance Refinery MHF Alkylation Unit acid concentration References •Bill of Lading from Honeywell for delivered MHF •December 2016 monthly ARF email submission to Torrance Fire Department December 2016 Monthly Average Minimum Maximum HF wt%80.0 78.0 82.5 Additive wt%7.0 5.5 8.5 Acid Soluble Oil wt%3.0 2.2 5.2 Water wt%3.0 2.4 3.0 Hydrocarbons wt%7.0 Airborne Reduction Factor % 55 54 MYTH -TRAA Slide 14:“Flash vaporization will occur for MHF, like for HF” TRAA “Case Against MHF” Jan 4, 2017 –Slide 14 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 55 FACT: Hydrogen bonding prevents MHF from flash atomizing •Hydrogen bonding of the Additive resists vaporization of HF and prevents large- scale aerosoling of the released liquid •Experiments showed that the addition of the Additive causes a significant fraction of the released HF to fall on the ground as liquid rainout •Testing in 1992 and 1994 showed inclusion of Additive eliminates Flash Atomization of HF associated with a jet release •Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F •NO technical data or test data supports TRAA’s claim that the boiling point of MHF is 6ºF higher than HF and that flash atomization will occur •TRAA’s source -Harpole Article -is based on theoretical data o 1995 Patent referenced in article does NOT support the theoretical assumption that Flash Atomization will occur o No test data supports Harpole Article and was NOT reviewed by third party References •DAN 95M-0874 -MHF Airborne HF Reduction estimates •ReVAP Tutorial page 7 •Patent US 5,654,251 56 Chapter 7: Airborne Reduction Factor & Societal Risk Index 57 Slide left intentionally blank 58 MYTH -TRAA Slide 16: “MHF w/ <20% additive was never TESTED.” -ARF extrapolated *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed TRAA “Case Against MHF” Jan 4, 2017 –Slide 16 59 •Additive range of concentrations <20 wt% were tested in 1992 and 1994 o Tests confirmed the Additive increases ARF even at low concentrations •Unit ARF calculated as a function of acid, Additive, water, reactor temperature o Validated rainout model has good agreement with ARF test results •Figure 5 shows ARF tested at different concentrations at the same temperature •Figure 4 shows ARF tested at different temperatures and concentrations References •DAN 96M-0144 -Small Scale HF/Additive Tests at MHF Design Conditions •DAN 95M-0874 -MHF Airborne HF Reduction estimates •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA, and MHF Releases •DAN 93M-0408 -HF/Additive Release Tests at Quest FACT: MHF at <20 wt% was tested –Airborne Reduction Factor (ARF) was NOT extrapolated 60 MYTH -TRAA Slide 17: “MHF ARF was Determined by Lab Testing” -ARF the sole function of vapor pressure TRAA “Case Against MHF” Jan 4, 2017 –Slide 17 61 FACT: ARF is NOT a function of Vapor Pressure •ARF is a function of four components: Additive, Water, Acid Strength, and Reactor Temperature –see slide 59 o Process chemistry safety of MHF is measured by ARF, a “release behavior” property of MHF •ARF represents the amount of HF that remains a liquid relative to the amount of HF potentially released to the atmosphere after a release o The larger the ARF, the less potential for HF to become airborne •Referenced patent by TRAA is based on early MHF testing in 1992 and was filed using preliminary data o Data in the chart and table are both from the 1992 testing Patent updated in 1995 only with corrosion test data o Data had a large degree of uncertainty during early testing due to testing apparatus Before the relationship between the Additive and aerosolization had been rigorously explored o Considerable research and testing was performed subsequent to the patent application Completed large scale tests at Quest and additional small scale tests with improvements to apparatus Tested additional parameters to prove MHF efficacy –see slide 59 for an example References:•Patent US 5,534,657•Consent Decree Safety Advisor’s Report, October 1999, p 1B.A-34•DAN 96M-0144 -Small Scale HF/Additive Tests at MHF Design Conditions•DAN 93M-0408 -HF/Additive Release Tests at Quest 62 MYTH -TRAA Slide 17: “This data curve and graph show that for additive concentrations below < 30%, ARF falls precipitously.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 17 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 63 •Referenced patent by TRAA was a study of MHF alkylate product quality o NOT an in-depth study of MHF Rainout and ARF •Error: Top table in TRAA’s slide measures “Rainout” -NOT ARF o MHF Rainout is different than ARF Rainout -The act of a substance forming a liquid and dropping or “raining” to the ground. “Rainout percent” refers to the percentage of released liquid HF which remains as a liquid due to rainout ARF -Airborne Reduction Factor -The percent reduction in airborne HF as compared to an unmitigated AHF release •Rainout and ARF associated with MHF were extensively established through rigorous lab and field testing o Research and testing conducted in 1992, 1994, and 1996 •AQMD Quote -“Addendum, Mitigated Negative Declaration, Mobil Modified Hydrogen Fluoride Conversion Project”, p. 2 -July 9, 1997 o “The experimental testing indicated that the addition of the Mobil additive to HF was an effective method for reducing or elimination the amount of aerosol formed during a release .” References•Patent US 5,534,657 •DAN 96M-0144 -Small Scale HF/Additive Tests at MHF Design Conditions •DAN 95M-0874 -MHF Airborne HF Reduction estimates •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA, and MHF Release FACT: There are multiple errors in the analysis, assumptions, and conclusions on TRAA's Slide 17 64 MYTH -TRAA Slide 17: ARF “… falls to zero when temperatures exceed critical superheat and flash atomization occurs.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 17 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 65 •Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F •Testing showed operating temperatures as high as 140ºF do not significantly degrade MHF Rainout performance, and Flash Atomization was not apparent o MHF critical superheat was not exceeded at temperatures tested o MHF does not flash atomize at vapor pressures above atmospheric pressure while at temperatures below critical superheat Release dominated by jet hydrodynamic drop break up and droplet vaporization o Testing proved lower Additive concentrations had ARF that was above 50% -see slide 59 •Testing in 1992 and 1994 showed inclusion of Additive eliminates Flash Atomization of HF associated with a jet release •AQMD Quote -Wilmington Refinery Alkylation Improvement Project, Final EIR Chapter 2, p. 2-7 -SCH #20030536, certified December 16, 2004 regarding Valero’s MHF Project o “The modified HF catalyst reduces acid vapor pressure sufficiently to suppress the usual flash atomization process of hydrofluoric acid, causing most of the acid to fall to the ground as an easily controlled liquid and reduces the potential for off-site consequences of an accidental HF release.” References •DAN 96M-0144 -Small Scale HF Additive release tests at MHF design conditions •DAN 95M-0874 -HF Airborne HF Reduction estimates FACT: No flash atomization occurs for superheated MHF 66 Chapter 8: Using Barriers to Enhance Safety 67 Slide left intentionally blank 68 MYTH -TRAA Slide 18: Table accurately reflects patent reference TRAA “Case Against MHF” January 4, 2017 -Slide 18 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 69 FACT: TRAA altered the Table in this patent by inserting an Additive wt% column and deleting a test number row References •Patent US 5,286,456 •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases *Note: This is the original table from the patent Green boxes highlight specific points discussed on slide 71 70 MYTH -TRAA Slide 18: “MHF Lab Test used Barriers & Collection Plates w/H20” TRAA “Case Against MHF” January 4, 2017 -Slide 18 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 71 •TRAA altered the table in Slide 18 from the original patent document o Deleted data –test number column o Deleted data –entire last row in original table –test no. 37 o Deleted the “Pressure, psig” column o Manipulated data -Additive wt% column added using a font type that mimics the original patent o Incorrectly assumed Additive concentrations in patent table were “1 -HF” o See actual table from patent on slide 69 •Collection trays containing water referenced in the patent were used to capture and prevent HF from escaping the test apparatus o Collection trays were NOT considered barriers for testing purposes o Three collection trays filled with water in lab testing apparatus were NOT meant to mitigate or evaluate barrier effectiveness o 1998 MHF design had many barriers as stated in the Safety Advisors 1999 Report •The patent’s author references the deleted data featured in Test No. 37: “Tests 36 and 37 of the Table, installation of an impact plate covered with steel mesh demister pads at approximately 3 feet the orifice increased rainout by about 35-40%.” Reference •Patent US 5,286,456 FACT: There are multiple errors in TRAA analysis, assumptions, and conclusions on TRAA Slide 18 72 MYTH -TRAA Slide 18: “Mobil’s 1993 data table indicates that 34% additive achieves only 53% rainout (~ARF)” -“1994 Stipulation and Order: MHF should achieve 65% ARF using 30% additive.” TRAA “Case Against MHF” January 4, 2017 -Slide 18 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 73 •1995 Court-order stated 65% ARF -NOT an Additive percentage o The initial Consent Decree was 65% ARF with ~19 wt% Additive o 1998 MHF Alkylation Unit had ALL barriers in place Flange shrouds, settler vessel bellypans, and pump barriers •TRAA’s altered table in slides 68, 70 and 72 is from Mobil Patent US 5,286,456 filed in 1992 NOT 1993 •Patent US 5,286,456 references the Large Scale Tests conducted at Quest o Additive concentration in Quest tests was NOT “1-HF” as TRAA misleadingly represents o Quest test measured MHF Rainout NOT ARF •TRAA misstates the actual intent of Patent US 5,286,456 References •Patent US 5,286,456 •DAN 93M-0408 -HF/Additive Release Tests at Quest FACT: There are multiple errors in the analysis, assumptions, and conclusions on TRAA Slide 18 74 MYTH -TRAA Slide 20: “Significant differences between lab test setup and Alky Unit Barriers” and “never tested” TRAA “Case Against MHF” Jan 4, 2017 –Slide 20 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 75 •1992 Patent US 5,286,456 references lab apparatus used for testing different HF concentrations, NOT the Torrance Refinery MHF Alkylation Unit barriers o TRAA misrepresents patent’s intent and subject matter •Table referenced in TRAA’s slide is NOT included in Patent US 5,286,456 o TRAA created this table -contains erroneous data with no sources cited Additive percentage not included in original patent o HF Rainout associated with the Additive is accurate as shown o Barrier effectiveness at short distances (< 1 foot) and current MHF Alkylation Unit operating conditions (105ºF) were tested, not modeled, during the Small Scale Tests •Testing proved that MHF Additive coupled with barriers effectively prevents Flash Atomization and increases Rainout •Safety Advisor’s October 1999 Report found the ARF for Torrance Refinery’s MHF Alkylation Unit increased from 65% in 1995 (MHF-AUA Chemistry) to 89% in 1999 (MHF-AUA chemistry + Barriers) References •Patent US 5,286,456 •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases •DAN 96M-0144 -Small Scale HF Additive Release test at MHF design conditions FACT: There are multiple errors in TRAA's analysis, assumptions, and conclusions on Slide 20 76 MYTH -TRAA Slide 20: “Significant differences between lab test setup and Alky Unit Barriers" and "never tested" TRAA “Case Against MHF” Jan 4, 2017 –Slide 20 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 77 •Figure shows barrier effectiveness over distances less than one foot provides greater than 90% ARF Reference •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases FACT: Testing showed barriers are effective and confirmed ARF data 78 MYTH -TRAA Slide 20: “Mobil stopped claiming credit” for pipe flange shrouds TRAA “Case Against MHF” Jan 4, 2017 –Slide 20 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 79 •Mobil claimed credit for pipe flange shrouds after testing in 1997 proved their effectiveness o Barrier testing in 1992 occurred before flange barriers were developed •Flange barrier testing simulated large catastrophic leak on 15 different types of barriers o Shroud material tested and proved compatible with MHF o Current MHF Alkylation Unit flange shrouds pressure-tested annually with TFD present Shrouds pass annual test at 250 psig and continue functioning as designed •All barriers, including pipe flange shrouds, are used in QRA calculations to determine SRI •Torrance MHF Alkylation Unit Operators monitor the integrity of all barriers daily o TFD notified if a barrier is not fully functional •Steel mesh pad installed in flange barrier outlets diffuse liquid flow to minimize splashing References •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases •DAN 98M-0699 -Cold Flow Experiments to develop Flange Barriers for the Torrance MHF Unit •TFD Chief Dumais’ presentation at the Torrance City Council -TORC Workshop on February 28, 2017 FACT: “Mobil DID claim credit for pipe flange shrouds” 80 MYTH –TRAA Slide 21: “MHF would form a gas and flash out of the tank from a breach anywhere, including the top” TRAA “Case Against MHF” Jan 4, 2017 –Slide 21 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 81 FACT: Liquid at the top of the Settler is primarily hydrocarbons that would auto-refrigerate if Settler were breached •Both Torrance acid settlers are 2” thick carbon steel vessels o MHF resides at the bottom of the settler below the settler barrier o If a settler is breached, liquid hydrocarbons would auto-refrigerate o Release from settlers above barriers would be ~98 wt% hydrocarbons and ~1.5 wt% HF Material would be quickly contained and suppressed by safety systems •Comparing MHF settler leak to the 1987 Marathon HF incident is misleading, inappropriate, and creates unwarranted fears o Marathon leak was a vapor release of HF-AUA, NOT MHF o No fatalities •Myth: TRAA claims exposed piping to right of settlers in slide 80 contains MHF o Fact: Image shows out-of-service cooling water pipes -NO threat of MHF release •1992 and 1994 testing showed HF Additive eliminates Flash Atomization of HF associated with a jet release o Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F References •UOP Design Process Flow Diagram (Heat & Material Balance) •DAN 95M-0874 (MHF Airborne HF Reduction estimates) 82 MYTH -TRAA Slide 22: “Barriers Won’t Work as Claimed … SW [software] could not model flash atomization.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 22 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 83 FACT: Testing proves barriers work -agreement exists between models and experimentally measured ARF •Rainout Model predictions for ARF at short distances show steep increase toward 100% airborne reduction •Rainout Model is based on “first principles” and appears to over-predict ARF at distances less than one foot, while predictions for 3 feet and beyond are accurate o Reasoning: liquid hitting a target at close range drops to the ground with some splashing o First principles: Hydrodynamics of jet releases and thermodynamic equilibrium •ARF at very short barrier distances is only minimally dependent on the acid concentration o HF reduction results primarily from reducing jet release flight time rather than from suppressing vapor pressure o Barriers are intended to break the velocity and momentum of the escaping jet stream •Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F References •DAN 96M-0144 -Small Scale HF/Additive Tests at MHF Design Conditions •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases •DAN 95M-0874 -MHF Airborne HF Reduction estimates 84 MYTH -TRAA Slide 22: “ ‘Fudge factor’ for each case was chosen to give 89% ARF” TRAA “Case Against MHF” Jan 4, 2017 –Slide 22 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 85 •Barriers on the acid settlers are 3” from potential leak source o Model predicts 95.8% ARF for these conditions o Conservative 89% ARF was used -adjusted for shorter travel distance of 3” vs 8” •ARF was conservatively adjusted to 89% for pipe flange covers at <1” distance o Same ARF as acid settler barriers -also adjusted because collected liquid that drops to ground will experience small amount of vaporization •Acid circulation pump seal barriers at 89% ARF are also conservativelyestimated Reference •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases FACT: 89% ARF based on actual testing with barriers 86 MYTH -TRAA Slide 23: “Rained out acid rapidly forms a vapor with some droplets”; “Double credit taken for the questionable benefits of this technology” TRAA “Case Against MHF” Jan 4, 2017 –Slide 23 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 87 •Double credit is NOT taken -the Additive’s hydrogen bonding helps hold MHF in a liquid pool, which minimizes evaporation after Rainout o Tests prove rained out MHF acid does NOT “rapidly” form a vapor cloud o Flange barriers in the MHF Alkylation Unit do have wire mesh pads •Testing in 1992 and 1994 showed inclusion of Additive eliminates Flash Atomization of HF associated with a jet release •If released, rained out MHF will be diluted by water mitigation •AQMD Quote –“Alkylation Improvement Project, Final EIR”, Chapter 2, p. 2-7 - SCH #20030536, certified 12/16/04, regarding Valero’s MHF project: o “The modified HF catalyst reduces acid vapor pressure sufficiently to suppress the usual flash atomization process of hydrofluoric acid,causing most of the acid to fall to the ground as an easily controlled liquid and reduces the potential for off-site consequences of an accidental HF release.” Reference •DAN 96M-0144 -Small Scale HF/Additive Release Tests at MHF Design Conditions FACT: There are multiple errors in the analysis, assumptions, and conclusions on TRAA Slide 23 88 MYTH -Slide 23: The table accurately reflects the patent reference TRAA “Case Against MHF” Jan 4, 2017 –Slide 23 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 89 FACT: This table has been altered from the original Patent document •TRAA manipulated the data from the original Patent document o Additive wt% was NOT in the original patent shown on Slide 88 The column was inserted by TRAA o TRAA incorrectly presents Additive concentration as “1 -HF” concentration •Torrance HF Alkylation Unit was modified in 1997 to use MHF based on the Court-ordered Consent Decree process -achieved 65% ARF without barriers o Acid strength was ~70 wt% -accurately represented in the patent’s original, unaltered table Reference •DAN 98M-0166 -Effects of Active and Passive Mitigation on AHF, AUA & MHF Releases 90 Chapter 9: Measuring Risk to Ensure Safety Quantitative Risk Analysis and the Societal Risk Index 91 Slide left intentionally blank 92 MYTH -TRAA Slide 25: “Quantitative Risk Analysis: a Poor Tool” TRAA “Case Against MHF” Jan 4, 2017 –Slide 25 93 •Quantitative Risk Assessment (QRA) is used throughout industry to improvesafety and reliability of equipment / processes o QRA follows Center for Chemical Process Safety (CCPS) guidelines Considered a global scientific standard o Torrance Refinery also follows American Petroleum Institute's “Recommended Practice 751 - Safe Operation of Hydrofluoric Acid Alkylation Units” Includes periodic third-party audits and other safety requirements •As part of the Consent Decree process, a QRA was conducted to determine if,“MHF (including mitigation) presents no greater risk than Sulfuric Acid alkylationplant producing a comparable amount of alkylate.” The QRA: o Provided quantitative estimates of risks o Considered broad range of scenarios o Applied appropriate allowances for likelihood of occurrence o Facilitated comparison of different processes - i.e., MHF vs. Sulfuric Acid o Highlighted most effective risk mitigation options - provides layers of protection •Leak size and frequency was derived from industry data and modeled in the MHFQRA, which includes a range of release sizes References •CCPS CPQRA published guideline book•American Petroleum Institute Recommend Practice 751•MHF Alkylation Risk Assessment, October 1994•1998 QRA Report -The Modified Hydrofluoric Acid Process Assessment of the Offsite Risk Impact Associated with Modification/Changes in the MHF Process FACT: “Quantitative Risk Assessment is an effective tool and industry risk management standard” 94 MYTH -TRAA Slide 25: “We are expected to TRUST (Mobil and the Safety Advisor) without VERIFYING.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 25 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 95 FACT: MHF Alkylation efficacy WAS verified and approved by the Court and Permitted by AQMD •Approval of MHF Alkylation followed comprehensive Court-ordered Consent Decree and AQMD permitting processes•Change of Additive concentration and addition of barriers were thoroughly vetted and approved in 1999 through the Court-ordered Consent Decree and involved: o A well respected and experienced Superior Court Judge –Hon. Harry Peetris o A Court Appointed independent Safety Advisor –Steve Maher o City of Torrance Mayor and Council Members o Torrance Fire Department and its independent Safety Consultant•1999 Safety Advisor’s report concluded: o “[Our]analysis show that the final operating configuration would provide an improvement to the level of safety to the Community.” o The report also found that the ARF for the MHF Alkylation Unit increased from 65% in 1995 (MHF-AUA Chemistry) to 89% in 1999 (MHF-AUA chemistry + Barriers)•TRAA documents have NOT been verified –NOT a scientific standard•AQMD Quote –“Alkylation Improvement Project, Final EIR”, Chapter 2, p. 2-7 -SCH #20030536, certified 12/16/04, regarding Valero’s MHF project: o “The modified HF catalyst reduces acid vapor pressure sufficiently to suppress the usual flash atomization process of hydrofluoric acid, causing most of the acid to fall to the ground as an easily controlled liquid and reduces the potential for off -site consequences of an accidental HF release.” Reference •Consent Decree Safety Advisor’s Report, October 1999 96 MYTH -TRAA Slides 26 & 31: “Catastrophic failures such as … earthquakes were never addressed.”; “Earthquakes pose a significant risk of MHF release … with little to no mitigation” TRAA “Case Against MHF” Jan 4, 2017 –Slide 26 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed TRAA “Case Against MHF” Jan 4, 2017 –Slide 31 97 •Torrance Refinery conducts a seismic assessment every five years per CalARP o Upgrades are made as recommended by assessment’s results o Intended to reduce likelihood of release of significant quantities of regulated substances in the event of an earthquake o Since the use of MHF in 1997, there has NOT been an offsite release of HF o Torrance Refinery used HF in the Alkylation Unit without any HF offsite release from 1966 until 1997, a period that includes the Sylmar and Northridge earthquakes •Torrance Refinery’s QRA includes catastrophic release cases without distinguishing between internal or external release •Consent Decree required Safety Advisor to conduct detailed seismic review o Addressed in multiple locations of the Safety Advisor’s reports and presentations Analysis and report on seismic safety of MHF Unit’s final design and construction Walk-down of MHF Alkylation Unit prior to commissioning and operating •MHF Additive and barrier protection provide mitigation for potential releases o Testing shows that the Additive will reduce airborne concentrations of HF and prevent Flash Atomization References •CalARP Seismic Analysis •Safety Advisor Reports May 1995, October 1999 and presentation October 2000 FACT: To comply with CalARP, the refinery must be able to withstand an earthquake that occurs once every 2500 years 98 MYTH -TRAA Slide 26: “Never been demonstrated, experimentally or using a theoretical model, that flash atomization does not occur with the MHF used in the Torrance Refinery today.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 26 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 99 FACT: Testing in 1992 & 1994 showed MHF Additive eliminates Flash Atomization associated with a jet release •Testing proved no Flash Atomization was observed for MHF compositions containing as much as 85 wt% HF up to 140°F •Testing in 1992 and 1994 showed inclusion of Additive eliminates Flash Atomization of HF associated with a jet release o The Additive bonds to HF, changing the catalyst’s characteristics •AQMD Quote – “Addendum, Mitigated Negative Declaration, Mobil Modified Hydrogen Fluoride Conversion Project”, p. 2 - July 9, 1997 o “The experimental testing indicated that the addition of the Mobil additive to HF was an effective method for reducing or elimination the amount of aerosol formed during a release. The additive is a water-soluble, thermally stable compound that is solid at ambient conditions. In addition, the health data indicate that the additive has very low toxicity and limited health impacts as compared to HF which has more severe health impacts.” Reference •DAN 96M-0144 -Small Scale HF/Additive Release Tests at MHF Design Conditions 100 MYTH -TRAA Slide 26: “Mobil’s claim that MHF has a factor of three margin in favor of MHF societal risk estimate compared with sulfuric acid … is totally invalid.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 26 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 101 FACT: Results of 1998 QRA update show that mitigation systems favor MHF Alkylation •1998 QRA demonstrated the MHF Alkylation Unit has safety mitigation systems that provide an SRI 24x lower than a Sulfuric Acid Unit of comparable capacity o QRA excluded transportation, regeneration, and incineration of spent Sulfuric Acid When added to QRA, risk from sulfuric acid increases significantly o Post-1998 additions: MHF-sensitive flange paint, perimeter HF lasers, additional water mitigation and camera play back, water cannons controls to control room These additional safety measures, if included in the QRA, would further lower the SRI associated with use of MHF vs sulfuric acid •QRA results show toxic risks associated with Sulfuric Acid Alkylation are higher than for comparable MHF Alkylation Unit o Both processes were shown to represent very low risk o Number of people potentially exposed and evacuation zone area were higher for Sulfuric Acid Alkylation than MHF Alkylation References •MHF Alkylation Risk Assessment, October 1994 •Safety Advisor Presentation -MHF vs Sulfuric Acid Alkylation Risk Assessment 1998 •1998 QRA Report -The Modified Hydrofluoric Acid Process Assessment of the Offsite Risk Impact Associated with Modification/Changes in the MHF Process 102 Chapter 10: Additional Safety Measures and Equipment 103 Slide left intentionally blank 104 MYTH -TRAA Slide 28: “Emergency systems at best reduce but don’t eliminate the impact of a release, -And they may also fail” TRAA “Case Against MHF” Jan 4, 2017 –Slide 28 105 FACT: Redundant emergency systems are routinely tested, validated, and work as designed •Torrance MHF Alkylation Unit includes redundant, active mitigation systems o Water systems Nine water cannons are tested weekly Acid service pumps deluge systems are tested monthly Fixed water sprays on vessels are tested annually o Detailed inspection of barriers completed weekly o Acid Evacuation System tested monthly o Risk Management Prevention Plan (RMPP) interlocks are tested monthly o HF sensors tested monthly o Acid off-loading system tested prior to every truck delivery o Active routine and preventive maintenance Inspection program o TFD is invited to witness all testing o Operator physically present in unit at all times •Testing shows that using MHF catalyst with barriers provides 89% ARF o Active mitigation systems as designed would contain a release on site •There have been NO offsite releases since MHF alkylation was introduced in 1997 •Global Alkylation experts publically informed AQMD that Torrance MHF Alkylation Unit features the most comprehensive safety systems in the world Reference •Actual unit configuration, performance and testing 106 MYTH -TRAA Slide 28: The Acid Evacuation System (AES) “[usually] takes longer” than one minute to activate TRAA “Case Against MHF” Jan 4, 2017 –Slide 28 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 107 •Example: On February 18, 2015, MHF Alkylation Unit Supervisor on duty activated the Unit’s AES system within ten seconds when responding to the ESP incident o Acid settlers emptied within 2 to 3 minutes o Entire MHF Alkylation Unit acid inventory was completely emptied within 7 minutes •AES has only been activated three times since installation in 1991 •Based on these three activations, the acid in the settlers is transferred to the AES in 2 to 3 minutes -removing most of the acid o Remaining acid in the unit will take approximately 3 to 4 minutes more to be transferred to the AES Reference •Actual unit performance FACT: The Alkylation Unit’s Acid Evacuation System (AES) has been activated within seconds 108 Chapter 11: Appropriate Use of EPA “Planning Circles” 109 Slide left intentionally blank 110 MYTH -TRAA Slide 29: TRAA’s interpretation of the RMP follows EPA guidelines and accurately reflects potential community impact TRAA “Case Against MHF” Jan 4, 2017 –Slide 29 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 111 •Repeated references to “Circle of Death” and “Death Zone” are misleading and inconsistent with EPA guidelines, creating unnecessary public panic and fear o Misrepresents “planning circles” in EPA’s Risk Management Program (RMP) Specifically: Worst-Case Scenario and Off-site Consequence Analysis •EPA RMP methodology uses an “endpoint value” referred to as “ERPG-2,” developed by the American Industrial Hygiene Association o ERPG-2 represents an “Emergency Planning Area” NOT a “Death Zone” ERPG: “Emergency Response Planning Guideline” measures potential exposure o Under the Consent Decree process, the Safety Advisor used more conservative ERPG-3 values in analyzing MHF release impacts compared to Sulfuric Acid •AQMD Quote –“Alkylation Improvement Project, Statement Of Findings, Statement Of Overriding Considerations, And Mitigation Monitoring Plan”, p. 9 -SCH #20030536, certified 12/16/04, regarding Valero’s MHF project o “An accidental release of HF could migrate off the Refinery property and expose individuals in the surrounding community.The proposed (MHF) project will substantially reduce the potential hazard impacts associated with an accidental release of HF.” References •USEPA, General Guidance on Risk Management Programs for Chemical Accident Prevention EPA 555-B-04-001March 2009 •Consent Decree Safety Advisor Report, May 1995 FACT: TRAA misrepresents EPA’s RMP guidelines for "planning circles” 112 MYTH -TRAA Slide 29: TRAA’s interpretation of the RMP follows EPA guidelines and accurately reflects potential community impact TRAA “Case Against MHF” Jan 4, 2017 –Slide 29 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 113 •EPA’s RMP guidance clearly demonstrate agency’s intentions: o “EPA intends the estimated distances to provide a basis for a discussion among the regulated community, emergency planners and responders, and the public, rather than a basis for any specific predictions or actions .” o “The distance (to endpoint) is intended to provide an estimate of the maximum possible area that might be affected by a catastrophic release from your facility. It is intended to ensure that no potential risks to public health are overlooked, but the distance to an endpoint estimated under worst-case conditions should not be considered a ‘public danger zone.’ ” (Emphasis added.) o EPA also cautions that “[c]haracterizing data using only worst-case scenarios can be misleading and unnecessarily alarming.” See Id., p. 7. •EPA RMP guidelines acknowledge the WCS uses unrealistic modeling parameters and is an ultra-conservative, unrealistic scenario: o “Because the assumptions required for the worst-case analysis are very conservative, the results likely will also be very conservative ... The distance to the endpoint estimated under worst-case conditions should not be considered a zone in which the public would likely be in danger, instead it is intended to provide an estimate of the maximum possible area that might be affected in the unlikely event of catastrophic conditions .” Reference •USEPA, General Guidance on Risk Management Programs for Chemical Accident Prevention EPA 555-B-04-001March 2009 FACT: TRAA misrepresents EPA’s RMP guidelines for "planning circles” 114 MYTH -TRAA Slide 29: TRAA’s interpretation of the RMP follows EPA guidelines and accurately reflects potential community impact TRAA “Case Against MHF” Jan 4, 2017 –Slide 29 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 115 •TRAA ignores the proven effectiveness of the Additive and barrier technology •Testing shows the Additive and barriers reduce airborne concentrations of HF •Safety Advisor’s 2001 report evaluated benefits of MHF Additive and barrier protection -concluding these contributed to airborne reduction of MHF •AQMD Quote -“Addendum, Mitigated Negative Declaration, Mobil Modified Hydrogen Fluoride Conversion Project”, p. 2 -July 9, 1997 o “The experimental testing indicated that the addition of the Mobil additive to HF was an effective method for reducing or elimination the amount of aerosol formed during a release.The additive is a water-soluble, thermally stable compound that is solid at ambient conditions.In addition, the health data indicate that the additive has very low toxicity and limited health impacts as compared to HF which has more severe health impacts.” Reference •Consent Decree Safety Advisor Report, September 2001 -Alkylation Unit Quantitative Risk Assessment Updates FACT: The Additive and barriers reduce potential airborne concentrations of HF 116 MYTH -TRAA Slide 36: MHF vs. Sulfuric Acid –RMP Worst-Case Scenario Planning Circles Go Away TRAA “Case Against MHF” Jan 4, 2017 –Slide 36 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 117 FACT: If Sulfuric Acid Alkylation replaces MHF, the City of Torrance would still be within multiple "planning circles” •TRAA is correct -sulfuric acid is not a toxic substance per EPA RMP guidance o Spent sulfuric acid is toxic and listed as a carcinogen by the International Agency for Research on Cancer •The RMP Worst-Case Scenario emergency planning area would go away with conversion to a Sulfuric Acid Alkylation Unit o What the TRAA doesn’t state is that the “emergency planning area” does not completely go away with conversion to sulfuric acid •EPA RMP emergency planning areas do not completely go away •There are many other facilities that require RMPs in Torrance and the Los Angeles basin References •USEPA, General RMP Guidance -Chapter 4: Offsite Consequence Analysis •http://usactions.greenpeace.org/chemicals/map 118 The Torrance Refinery Alkylation unit began operating in 1966 and has never had an offsite release 1966 -1997: Hydrofluoric acid -HF 1997 -2018: Modified Hydrofluoric Acid -MHF Chapter 12: Irresponsibly Creating Public Fear and Outrage 119 Slide left intentionally blank 120 MYTH -TRAA Slide: Torrance MHF Alky Unit release will result in an incident like the Bhopal, India 1984 incident TRAA Presentation Modified Hydrofluoric Acid (MHF) –Wolf in Sheep’s Clothing (Nov. 16, 2016, Slide 2) *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 121 FACT: Photo and content designed to instill fear and outrage •Cited incident occurred in India 30+ years ago at a chemical plant that did NOT use MHF and had NO redundant safety mitigation systems o Risk Communication refers to this tactic as using “outrage factors”. Examples: Activists linking graphic images/descriptions of tragedies to a targeted company, facility product, etc., to produce fear and outrage Using children as victims -TRAA uses images of children playing soccer overcome by gas to make residents fearful Inciting fear and outrage in residents same as showing RMP “planning circles” as “Circles of Death” or “Death Zones” Misrepresenting risk is counterproductive when the objective is protecting the community and workforce •Quote cited on slide was made before MHF, barriers, and other safety systems were installed and used in the Torrance Refinery Alkylation Unit o Refinery began using MHF and installed additional, redundant safety systems to make the plant safer for workers and residents o Since the use of MHF in 1997, there has not been an offsite release of HF at the Torrance Refinery •AQMD Quote: “Highly Toxic Chemical to be Phased Out at Valero Refinery, February 7, 2003 o “Modified HF … contains additives that significantly reduce the chemical’s ability to form a vapor cloud in the event of an accidental release.” Reference •Covello & Sandman -“Risk communication: Evolution and Revolution.” 2001 122 Chapter 13: Sulfuric Acid Alkylation is a False Choice 123 Slide left intentionally blank 124 MYTH -TRAA Slides 33, 37, & 40: Conversion to Sulfuric Acid Alkylation H2SO4 –would be cheap and easy TRAA “Case Against MHF” Jan 4, 2017 –Slide 33 TRAA “Case Against MHF” Jan 4, 2017 –Slide 37 TRAA “Case Against MHF” Jan 4, 2017 –Slide 40 125 FACT: No HF / MHF Alkylation Unit has ever been converted to a Sulfuric Acid Alkylation Unit and new unit is extremely expensive •There are many technical reasons conversion has never been done o Processing equipment and metallurgy differ between technologies Vessels, piping, and equipment are not interchangeable New grassroots Sulfuric Acid Alkylation Unit would be required •April 1, 2017 SCAQMD testimony on conversions incorrect and unfounded o Bay Area: Units originally built as Sulfuric Acid - never converted from HF o UK: 4 of 6 refineries are HF Alkylation - 2 others have no Alkylation Units o Europe: No Alkylation Units have ever been converted to Sulfuric Acid •SCAQMD’s Norton Engineering Study cost conversion estimate grossly too low o Failed to consider the cost of acid regeneration and incineration o Estimate was based on replacement of reaction section only o Failed to consider regulatory and construction costs in Southern California o New 30 kbd grass roots units third-party cost estimate is significantly higher o DuPont at the AQMD August 23, 2017 Proposed Rule 1410 working meeting confirmed the Norton Study estimates were low and not representative of a new unit in Southern California. DuPont provided the estimate to Norton and was based on Gulf Coast costs and did not include scale up or outside the battery limits •Cost estimates from the 1990’s and early 2000’s are irrelevant to today’s cost o Cost today for a new Sulfuric Acid Unit with Regeneration is approximately $900MM References •Norton Engineering Study and presentation at American Fuel & Petrochemical Manufacturers meeting February 2016 •Burns and McDonnell Report Brief –Alkylation Study and Estimate July 2017 126 MYTH -TRAA Slides 38 & 40: In January 2016 Valero announced plans to build a new sulfuric alky unit –with startup in 2018 –two years with permitting TRAA “Case Against MHF” Jan 4, 2017 –Slide 38 TRAA “Case Against MHF” Jan 4, 2017 –Slide 40 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 127 FACT: Valero announced its new US Gulf Coast Sulfuric Acid Alkylation Plant project in January 2016, with completion expected in 1H2019 •Valero is building a new $300 million (MM), 13MBD Sulfuric Acid Alkylation Plant in Texas o Estimate excludes added cost of spent sulfuric acid regeneration and incineration plants Regeneration and incineration keep acid supply constant •Basic project designs and permitting processes typically take at least two years •Duration of the permitting process in Southern California is lengthy and indeterminate •Valero project entered detailed engineering, procurement and construction phase o Expected to take longer than three years to complete •Torrance MHF Alkylation Unit is ~30MBD, more than 2x larger than Valero’s new Texas unit o Regulatory, construction and operating costs are significantly higher in California •Replacement cost estimates for building a Sulfuric Acid Alky Unit at Torrance Refinery o Burns & McDonnell: New grass roots unit ~ $600MM o Cost of Sulfuric Acid Regeneration and Incineration plants would be an additional ~$300MM o Acquisition cost of the Torrance Refinery was $187.5MM References •Valero First Quarter 2016 Results •Burns and McDonnell Report Brief –Alkylation Study and Estimate July 2017 •Public Company Records on Refinery Sale and Purchase 128 MYTH TRAA Slides 38: A new Torrance Sulfuric Acid unit can be constructed in modules like the ESP TRAA “Case Against MHF” Jan 4, 2017 –Slide 38 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 129 FACT: A modular approach is irrelevant for a Sulfuric Acid Alkylation Unit at Torrance •Equipment required for a processing unit is very different from the Torrance Refinery’s FCC ESP, which is an emissions control device •Most processing equipment for a Sulfuric Acid Alkylation Unit cannot be manufactured and constructed modularly like the ESP o Consists of towers, heat exchangers, other pressure vessels, pumps, piping networks, instrumentation, and many other types of equipment o There are many long lead items that take years to design/engineer, procure, fabricate, and deliver Long lead items can include pressure vessels, towers, heat exchanges and valves Certain sections could be modularly constructed but would not significantly reduce overall construction time due to long lead items Reference •Construction Fundamentals 130 MYTH -TRAA Slide 37: “Sulfuric Acid might be piped in using existing pipeline from Carson” TRAA “Case Against MHF” January 4, 2017 -Slide 37 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 131 FACT: There is NO sulfuric acid pipeline from Carson to Torrance •Building fresh and spent sulfuric acid pipelines would be virtually impossible in Southern California o Requires acquisition of appropriate rights-of-way and permits through various private property owners, municipalities and regulatory agencies •Transportation of spent and fresh sulfuric acid offsite poses additional safety risks to the community o Spent sulfuric acid contains dissolved sulfur dioxide and hydrocarbons Spent solution is corrosive and can be potentially unstable and reactive o Concentrated fresh and spent Sulfuric Acid are highly dangerous and produce insidious burns to human flesh o Spent sulfuric acid is an Acutely Hazardous material o Trucks and railcars have over-pressured to atmosphere in the past Releasing a vapor/liquid mixture can form a hazardous aerosol There would be ~1440 truck shipments per month if regenerated offsite References •EcoServices Plant Representative •MHF Alkylation Risk Assessment, October 1994 •1998 QRA Report -The Modified Hydrofluoric Acid Process Assessment of the Offsite Risk Impact Associated with Modification/Changes in the MHF Process 132 MYTH -TRAA Slide 37: “Sulfuric Acid might be piped in using existing pipeline from Carson” TRAA “Case Against MHF” January 4, 2017 -Slide 37 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 133 FACT: There is NO sulfuric acid pipeline from Carson to Torrance •Process hazard analysis for an MHF vs. Sulfuric Acid Unit siting decision must consider transportation and regeneration risks o Combined risk may result in a different risk management decision than considering the process risk alone o During the Consent Decree process, a comprehensive QRA was conducted to compare the risk of MHF to Sulfuric Acid QRA determined that MHF with mitigation was safer than Sulfuric Acid QRA conservatively omitted Sulfuric Acid transportation and regeneration risks References •EcoServices Plant Representative •MHF Alkylation Risk Assessment, October 1994 •1998 QRA Report -The Modified Hydrofluoric Acid Process Assessment of the Offsite Risk Impact Associated with Modification/Changes in the MHF Process 134 Chapter 14: Emerging Alkylation Technologies are Unproven 135 Slide left intentionally blank 136 MYTH -TRAA Slides 33, 37, & 40: Commercially available alternatives to MHF exist for Torrance TRAA “Case Against MHF” Jan 4, 2017 –Slide 33 TRAA “Case Against MHF” Jan 4, 2017 –Slide 37 TRAA “Case Against MHF” Jan 4, 2017 –Slide 40 137 FACT: No alternatives are commercially viable for Torrance, including Sulfuric Acid •Solid Acid Catalyst (SAC) o Norton Engineering Study: Too early to be considered commercially viable technology o CB&I has one small 2,700 BPD unit in a chemical plant in China Issues with catalyst regeneration cause periodic, unplanned shut downs o NO commercial plant in the United States o April 01, 2017 SCAQMD testimony about UK refinery conversion to SAC was false Checked with numerous sources including the co-owner and a Union Leader of the Grangemouth Refinery - confirmed there never was a unit conversion CB&I stated at AQMD August 02, 2017 Proposed Rule 1410 working meeting that the China Plant is the only commercialized Solid Acid Catalyst Alkylation Unit in the world •Liquid Ionic Catalyst: nascent technology is only in initial test phase o Only one ~200 gallon per day demonstration unit running today o Norton Engineering Study: Too early to be considered commercially viable technology o Chevron plans to install small ~5,000 BPD unit in Salt Lake City o August 02, 2017 - AQMD Proposed Rule 1410 Working Group meeting: Chevron confirmed that their technology will not be commercially proven until the Salt Lake City unit is built and operated for a significant multi-year time period o UOP in its letter stated that a prudent refinery would wait 4 to 6 years to prove a new technology References•DuPont Design Basis for a new plant in Torrance•Norton Engineering Study and presentation at American Fuel & Petrochemical Manufacturers meeting February 2016•Honeywell UOP Letter to SCAQMD, September 2017 138 MYTH -TRAA Slide 33: “Alternatives Exist” –per SCAQMD’s Norton Engineering Study TRAA “Case Against MHF” Jan 4, 2017 –Slide 33 139 FACT: We advised SCAQMD that there are multiple inaccuracies in the Norton Engineering Study •Torrance Refinery critiqued the Norton Engineering Study o Significantly understates capital cost estimates and disregards operating cost differentials o Norton never validated their assumptions with the Torrance Refinery o Burns and McDonnell cost estimate was provided to AQMD presents a realistic cost estimate and addresses the deficiencies of the Norton Report Assumptions do not hold up - resulting in a much higher cost estimate o No refinery has ever switched from MHF alkylation to a different alkylation technology Equipment is fundamentally different New grassroots process unit would be required April 1, 2017 SCAQMD testimony on conversions was inaccurate and unfounded •AQMD August 23, 2017 Proposed Rule 1410 working meeting: DuPont confirmed the Norton Study estimates were low and not representative of a new unit in Southern California. DuPont provided the estimate to Norton, which was based on Gulf Coast costs and did not include scale-up or outside the battery limits scope References•TORC Letter Submitted to AQMD (Dec. 8, 2016) Re: Norton Engineering Alkylation Study, related to the use of Hydrofluoric Acid in Refinery Alkylation Units •Burns and McDonnell Report Brief –Alkylation Study and Estimate July 2017 140 MYTH -TRAA Slides 33 & 37: “Alternatives Exist -SCAQMD Study of MHF Alternatives agreed with TRAA’s recommendations -” TRAA “Case Against MHF” Jan 4, 2017 –Slide 33 TRAA “Case Against MHF” Jan 4, 2017 –Slide 37 141 •We have met with experts from Honeywell / UOP, Stratco, DuPont and Burns & McDonnell, as well as independent alkylation experts to explore alternatives o Sulfuric Acid Alkylation is the only commercially viable alternative Presents unique challenges o Solid Catalyst and Liquid Ionic Alkylation have been in development for decades There are no commercially viable units running in the U.S. •Through the Court-ordered Consent Decree process, MHF Alkylation was determined to be “…as safe as or safer than Sulfuric Acid technology” o Converting to or building a grassroots Sulfuric Acid Alkylation Unit would be inconsistent with the Consent Decree, increase risk to the public, not any safer than MHF, increase emissions,and does NOT make sense •Before transitioning from MHF Alkylation to a catalyst other than Sulfuric Acid at the Torrance Refinery, the new technology must be proven o Inherently safer than MHF Alkylation o Commercially viable in scope and scale to our existing unit •We are confident the safety systems on the MHF Alkylation Unit protect our employees and the community while reliably producing CARB gasoline FACT: PBF continues evaluating alternative technologies 142 MYTH -TRAA Slides 33 & 37: Alternatives Exist –SCAQMD Study of MHF Alternatives agreed with TRAA’s recommendations” TRAA “Case Against MHF” Jan 4, 2017 –Slide 33 TRAA “Case Against MHF” Jan 4, 2017 –Slide 37 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 143 FACT: SCAQMD’s Norton Engineering Study does NOT agree with TRAA’s recommendation •Norton Engineering’s Study states that Sulfuric Acid Alkylation is the only currently available alternative to MHF Alkylation •Sulfuric Acid Alkylation introduces a different set of risks and impacts o Risks and impacts include direct and indirect increases in greenhouse gases and criteria pollutants, and community risk •Norton Engineering’s Study also states that Solid Acid Catalyst (SAC) is in the early stages of development and needs time to be proven safe and reliable o Rules out SAC as a commercially viable alternative to MHF Alkylation o Silent on whether a pilot plant has been built in the U.S., as TRAA states o Various companies have been developing SAC technology for decades and the process and catalyst are not commercially viable o CB&I stated at AQMD August 02, 2017 Proposed Rule 1410 working meeting that the China Plant is the only commercialized Solid Acid Catalyst Alkylation Unit in the world Operating details, product quality, run length and turnaround interval, catalyst regeneration, and feedstocks are currently unknown Technology is not commercially viable Reference •Norton Engineering Study 144 MYTH -TRAA Slide 34: “TRC’s Interest in ILA [Ionic Liquid Alkylation] is a Delay Tactic” TRAA “Case Against MHF” Jan 4, 2017 –Slide 34 145 •PBF has met with Honeywell / UOP to discuss ILA technology o Researchers from various companies have been working on ILA technology for decades, yet ILA is still not commercially viable •PBF will continue to monitor ILA development o Chevron announced they will build an ILA unit ~15% the size of the Torrance unit •Chevron at AQMD August 02, 2017 Proposed Rule 1410 Working Group meetingstated that the ILA technology will not be commercially proven until the Salt Lake City unit is built and operated for some indeterminate time period o Even after built and operated for some indeterminate time, the technology may not be commercially proven o Chevron stated that its Salt Lake City Refinery HF Alkylation Unit has never impacted its community •If ILA technology becomes commercially viable, PBF will evaluate, butreplacement alkylation unit justification will likely not exist based on safe MHFalkylation operations and cost prohibitive nature of a wholesale unit replacement o Must be inherently safer than MHF Alkylation o Must be comparable in scope and scale to the Torrance Refinery’s existing unit o Must run for two, four-year turnaround cycles to be proven reliable References •UOP/ Chevron Data for Salt Lake City refinery •Norton Engineering Study FACT: PBF continues to evaluate alternative technologies 146 MYTH -TRAA Slide 34: ILA, SAC and Sulfuric Acid have comparable societal benefit TRAA “Case Against MHF” Jan 4, 2017 –Slide 34 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 147 •Despite decades of development, ILA and SAC technologies are not yet commercially viable o QRAs comparing ILA and SAC to Sulfuric Acid or MHF Alkylation cannot be performed until they are commercially proven •Sulfuric Acid Alkylation is one of two commercially-viable alkylation technologies o In the Torrance Consent Decree, MHF “(including mitigation) presents no greater risk than Sulfuric Acid Alkylation plant producing a comparable amount of alkylate” o Converting to or building a grassroots Sulfuric Acid Alkylation Unit would be inconsistent with the Consent Decree, increase risk to the public, increase emissions, and does NOT make sense •Torrance Alkylation Unit is ~30MBD and there are NO commercially viableILA or SAC plants in the US at or anywhere near this capacity o There are two ILA and SAC demonstration units in operation ILA - Salt Lake City: ~420 gallons per day (ten barrels) SAC - China: 2,500 barrels per day chemical plant reportedly has been unreliable Chevron and CB&I stated at the August 02, 2017 AQMD Proposed Rule 1410 working meeting that these are the only two commercial units and that both technologies are not commercially viable References •UOP/ Chevron Data for Salt Lake City refinery •Norton Engineering Study FACT: A QRA has not been performed on ILA or SAC, so their societal risk cannot / has not been determined 148 Chapter 15: Converting the Alkylation Unit Is Implausible 149 Slide left intentionally blank 150 MYTH -TRAA Slides 37 & 40: “Studies have been done on HF conversion; R&D [Research & Development] not needed.” TRAA “Case Against MHF” Jan 4, 2017 –Slide 37 TRAA “Case Against MHF” Jan 4, 2017 –Slide 40 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 151 •A Stratco Alkysafe Unit has NEVER been built or commercially proven o Additionally, DuPont’s current equivalent technology ConvEx is not commercially available Merely a concept - only completed paper case studies No pilot or field testing - no conversion has ever been undertaken •There has NEVER been an MHF/HF unit converted to Solid Acid Catalyst o Confirmed by CB&I at the August 2, 2017 AQMD Proposed Rule 1410 Working Group meeting There is only one 2,500 BPD grassroots SAC plant in China Would have to vet design to validate re-use of equipment Impossible to validate cost because conversion has NEVER been done •Transitioning from MHF Alkylation to a catalyst other than Sulfuric Acid at the Torrance Refinery, the new technology has to be proven o Must be inherently safer than MHF Alkylation o Commercially viable in scope and scale to our existing unit References•DuPont Design Basis for Torrance •Norton Engineering Study •Burns and McDonnell Report Brief –Alkylation Study and Estimate, July 2017 •HF Alkylation Consultants White Paper FACT: There has NEVER been an M/HF Alkylation unit converted to another alkylation technology 152 MYTH -TRAA Slides 37 & 40: “Sulfuric acid (H2SO4) would eliminate the toxic airborne risk” TRAA “Case Against MHF” Jan 4, 2017 –Slide 37 TRAA “Case Against MHF” Jan 4, 2017 –Slide 40 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 153 FACT: Sulfuric Acid Alkylation DOES NOT eliminate toxic airborne risk -the risk increases •With a Sulfuric Acid Alkylation Unit, released sulfuric acid mixed with hydrocarbons can become and remain airborne o Quest Sulfuric Acid experiments convincingly demonstrate this phenomenon •Motiva Delaware City H2SO4 release cited by TRAA occurred in 2001, not 2011 o Caused one onsite fatality, eight injuries, and offsite fish kill •Criteria pollutant emissions - SO2 & SO3 - are produced from combusting spent Sulfuric Acid in an incinerator during the regeneration process o MHF Alkylation does NOT produce SO2 or SO3 •Sulfuric Acid Alkylation consumes ~2x utilities as MHF Alkylation o Results in increased GHG emissions and larger carbon footprint o Each new piece of equipment is a potential source of VOC fugitive emissions •Spent Sulfuric Acid is highly corrosive, reactive, flammable o Produces a carcinogenic mist that is more toxic than HF mist per the International Agency on Research for Cancer o Spent Sulfuric Acid is listed in the same hazardous material category as M/HF o Concentrated fresh and spent Sulfuric Acid are highly dangerous and produce insidious burns to human flesh Reference •CSB Investigation Report (October 2002), Motiva Delaware City Refinery Spent Sulfuric Acid storage tank explosion and fire on July 17, 2001 154 MYTH -TRAA Slide 38: “The refinery should temporarily operate without alkylation if the transition takes > 3 years” TRAA “Case Against MHF” January 4, 2017 -Slide 38 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 155 FACT: Torrance Refinery becomes uncompetitive if the Alkylation Unit outage lasts more than 30 days •ExxonMobil estimated daily gross revenue losses of ~$1 million to $1.5 million due to the closure of the FCC and Alkylation Unit starting in February 2015 o When the MHF Alkylation Unit is down, FCC throughput must be reduced to minimum o FCC will be limited to one month of operation due to railcar logistics •MHF unit makes alkylate for producing cleaner-burning CARB gasoline o Alkylate availability is limited due to high global demand and transport costs •The Torrance MHF Alkylation Unit produces a critical blending component for making cleaner-burning CARB gasoline for Southern California and the State of California o Alkylate is required to meet stringent state-mandated gasoline specifications o Torrance Refinery supplies ~20% of daily regional demand and ~10% statewide •Refinery projects take many years to complete o From permitting design to construction and then startup, each stage is critical to long-term, safe, reliable operations o Permitting process is uncertain o If steps are skipped or rushed, then mistakes can happen •TRAA have no knowledge of refinery / Alkylation -never designed, built, or run a refinery o Unfamiliar with operating, design, procurement, or construction Reference •Seeking Alpha: “Exxon Mobil: About The Torrance Refinery,” April 4, 2016 156 MYTH -TRAA Slide 38: “Consent Decree gave 3 years to construct a MHF or sulfuric acid alky unit” TRAA “Case Against MHF” Jan 4, 2017 –Slide 38 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 157 •Court entered Consent Decree with Mobil and City of Torrance in October 1990 •May 1995: After more than two years of study, analysis, and testing, the Court ordered the phase-out of AHF and replacement with MHF o Based on the Safety Advisor’s recommendation to the Court •1997: After SCAQMD issued required permits, MHF Alkylation Unit started up o Unit only required modifications rather than a complete rebuild Reference •Consent Decree Safety Advisor Report , October 1999 FACT: Consent Decree gave seven years to design, test and construct the Torrance MHF Alkylation Unit 158 MYTH -TRAA Slide 39: PBF Energy paid $537.5M for the refinery TRAA “Case Against MHF” Jan 4, 2017 –Slide 39 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 159 FACT: PBF Energy paid a total of $537.5MM for the refinery and logistics assets -the refinery alone was valued at $187.5MM •The cost of the refinery must be taken into consideration when evaluating the replacement of the MHF Alkylation Unit or any other major investment o Estimate for a new Sulfuric Acid Alkylation Unit is ~$600MM, with an additional ~$300MM for a Sulfuric Acid Regeneration Unit and Incinerator Combined project cost estimate is ~$900MM References •Public Record on refinery price and PBF value •Burns and McDonnell Report Brief –Alkylation Study and Estimate, July 2017 160 Chapter 16: A Phase-Out or Ban is Illogical 161 Slide left intentionally blank 162 MYTH -TRAA Slide 41: “PBF Energy can deal with a MHF Ban” TRAA “Case Against MHF” Jan 4, 2017 –Slide 41 163 FACT: Torrance Refinery MHF Alkylation Unit must be kept running to make CARB gasoline required by California •MHF Alkylation Unit produces a critical blending component for making clean-burning CARB gasoline for Southern California and the State of California o Alkylate is required to meet stringent state-mandated gasoline specifications o Torrance Refinery supplies ~20% of daily regional demand and ~10% statewide •When the Torrance Refinery MHF Alkylation Unit was down following the ExxonMobil 2015 ESP incident, most of the refinery’s gasoline was sent out of state o Unable to meet CARB specs - refinery not viable with MHF Alkylation Unit down o California motorists reportedly paid a premium of $1/gallon when the Torrance Refinery MHF Alkylation Unit was down following the February18, 2015 ESP incident •California Energy Commission statement from AQMD Proposed Rule 1410 Working Group Meeting September 2, 2017 o “Supply impacts of two refineries being close down expected to be greater in magnitude, of longer duration, and higher in costs to motorists and truckers than those resulting from the temporary loss of gasoline production capability at Torrance Refinery following the ESP explosion on 2/18/15” Reference •California Energy Commission Presentation, September 20, 2017 164 MYTH -TRAA Slide 42: “The Refinery Can Survive a Temporary Suspension of Alkylate Production” TRAA “Case Against MHF” Jan 4, 2017 –Slide 42 165 FACT: Idling the MHF Alkylation Unit at the Torrance Refinery would cause the site to be immediately unprofitable •MHF Alkylation enables Torrance to meet California’s strict gasoline requirements o Refinery must comply with CARB gasoline requirements o If unit is idled, the Refinery would have to purchase expensive alkylate that would normally be produced by the unit •Torrance Refinery lacks rail capacity to sell its complete Alkylation feed volumefrom the FCC, which would force the refinery to reduce production •Long-term viability is threatened whether FCC is at reduced rates or shut down o Evidenced by 2015/2016 refinery losses related to shutdown of the Torrance Refinery’s FCC and MHF Alkylation Unit following the February 18, 2015 ESP incident •TRAA slide cites one-time deals, describes unattainable petroleum marketconditions o Slide references a PFD that does NOT reflect current Torrance refinery operations o Slide illustrates TRAA’s lack of expertise and experience in commercial petroleum transactions, logistics movements, and refinery operations References •Site experience post ExxonMobil February 18, 2015 ESP Incident •Market economics 166 MYTH -TRAA Slide 43: California market will not be impacted by a reduction in alkylate production TRAA “Case Against MHF” Jan 4, 2017 –Slide 43 *Note: Purple boxes added to TRAA’s original image/text to highlight specific points referenced/discussed 167 FACT: California markets rely on alkylate production to comply with CARB regulations for cleaner-burning gasoline •Banning MHF Alkylation would drive demand for and cost of alkylate higher o Alkylate would have to be imported into California Foreign imports would be dependent on global octane demand and pricing o Banning effect: would likely increase cost of gasoline to consumers as evidenced by the reported $1/gallon spike following the February 18, 2015 ESP incident •According to California Energy Commission o Permanent production loss in gasoline blending components would be 60.4% greater than the temporary loss associated with the February 18, 2015 ESP incident o Incremental impacts on gasoline costs for consumers and businesses could be as bad or worse than those experienced as a result of the ESP incident o Gasoline prices averaged 26 cents per gallon greater than normal for 17 months o Equates to increased incremental costs of $5.6 billion for motorists and businesses o Closure of two refineries would also increase prices for diesel and jet fuel References •CEC September 20, 2017 Presentation “Potential Transportation Fuel Supply and Price Impacts of HF Ban, Proposed Rule 1410 Working Group Meeting #6”, Slide 27 –“HF Ban –Fuel Price Implications” 168 MYTH -TRAA Slide 41: Gulf Coast market economics are identical to California’s market TRAA “Case Against MHF” January 4, 2017 -Slide 41 *Note: Purple box added to TRAA’s original image/text to highlight specific points referenced/discussed 169 •Chalmette and Torrance operate in distinct, separate markets with different product specifications and demands o Make different products with specifications that vary from each other o 57 operating refineries in PADD 3 (Gulf Coast); 30 operating refineries in PADD 5 (West Coast) •Potential crude changes at Chalmette have nothing in common and have very different consequences than alkylation feed changes at Torrance o Absolutely no connection between idle operating units at Chalmette and Torrance not operating an Alky Unit - Chalmette’s HF Alky Unit was never idled o Idling the MHF Alkylation Unit at the Torrance Refinery would cause the site to be unprofitable due to CARB’s strict gasoline blending requirements o This example shows TRAA’s lack of expertise and experience regarding the refining industry, operations, and markets References •Site experience post ExxonMobil February 18, 2015 ESP Incident •Market economics •US Energy Information Administration -Number and Capacity of Petroleum Refineries (as of Jan 2016) FACT: Market economics on the Gulf Coast -PADD 3 -and West Coast -PADD 5 -are distinct and unassociated 170 Chapter 17: Summary 171 •MHF is the safest, most recent, commercially proven advance in Alkylation technology available to Torrance Refinery o Rigorous testing and modeling were conducted by Mobil and Phillips Petroleum o Reviews & approvals: Safety Advisor, Superior Court, City of Torrance, SCAQMD o Torrance MHF Unit product yield and quality are comparable to HF alkylation •There has never been an offsite M/HF release from the Torrance Alkylation Unit o 1966: HF Alkylation Unit commissioned o 1997: Switched to MHF o 51 years of operation without an offsite release Includes 6.5+ magnitude Sylmar (1971) and Northridge (1994) earthquakes •TRAA activists oppose MHF Alkylation o Use illegitimate examples to attack MHF efficacy o None of their self-styled “Science Advisory Panel” members have relevant education or experience in refining or alkylation o Use misinformation and disinformation to generate fear and outrage among a small group of residents Note: Prior slides provided supporting statements and references Summary: Torrance Refinery's use of MHF is safe 172 •TRAA endorsed Sulfuric Acid Alkylation based on a FLAWED assumption of significantly lower risk than MHF o Sulfuric Acid Alkylation is also hazardous and offers no advantage over MHF o U.S.: 50 M/HF units and 39 sulfuric acid plants, which require more processing •Alternative alkylation technologies are evolving, yet unproven at full scale o There are NO commercially proven, new alternative alkylation solutions available at this time •PBF continues evaluating emerging alkylation technologies Note: Prior slides provided supporting statements and references Summary: Alternative Technologies 173 The following quotes are from public AQMD documents -the information presented is applicable to MHF and barrier use at the Torrance Refinery •News release: “Highly Toxic Chemical to be Phased Out at Valero Refinery” 2/7/03: “Once this refinery stops using concentrated hydrogen fluoride, we will have virtually eliminated the potential for a catastrophic accidental release of this compound in our region.” Barry Wallerstein, former AQMD Executive Officer •Wilmington Refinery Alkylation Improvement Project, Final EIR Ch. 2, p. 2-7, “The modified HF catalyst reduces acid vapor pressure sufficiently to suppress the usual flash atomization process of hydrofluoric acid,causing most of the acid to fall to the ground as an easily controlled liquid and reduces the potential for off-site consequences of an accidental HF release.” •February 7,2003,Governing Board Letter,Agenda No.25 “To further minimize public exposure to potential HF releases,the refinery is proposing to use modified HF in the alkylation process and upgrade its mitigation system to include deflector barriers for HF pumps and flanges.This proposed change meets the intent of the former Rule 1410 and will significantly reduce the potential for public exposure to this hazardous chemical in the event of an emergency release.” Summary: MHF in AQMD's Own Words 174 GLOSSARY OF TERMS ADDENDUM: 175 Glossary of Terms •Acid strength / acid concentration: The weight percent of acid in the alkylation unit main acid stream •Additive: A heavy liquid component added to anhydrous hydrofluoric acid (AHF), which reduces aerosol properties of AHF through hydrogen bonding; additive is the “M” in “MHF” or “modified” HF. Additive is one of the five components of the main acid stream in the MHF alkylation process •Acid detecting paint: Yellow paint that is painted on flanges and other surfaces in the alky unit, which turns red in the presence of hydrofluoric acid (HF) •Aerosol / aerosoling: Dispersing a substance into fine particles or a “mist” suspended in the air; examples of aerosoling are fog or hair spray •AES / Acid Evacuation System / Rapid Acid Dump (RAD) System: A process in which the acid contained in an alkylation unit is rapidly moved to a safe location; typical de-inventory is 5-7 minutes •AHF: Anhydrous hydrogen fluoride / hydrofluoric acid. Anhydrous HF contains no water or other components besides HF (>99% pure HF) •Alkylate: The main product in the alkylation process; alkylate is a high octane, low sulfur component required to blend cleaner- burning CARB gasoline •Alkylation: A refining process in which light olefins (propylene, butylene) are upgraded to a high octane, low sulfur gasoline blendstock. Gasoline regulations in the United States favor alkylate blendstock due to its lower emissions. •AQMD / SCAQMD: South Coast Air Quality Management District -the air pollution control agency for Orange County, Los Angeles, Riverside, and San Bernardino counties •API: American Petroleum Institute -The only national trade association that represents all aspects of America’s oil and natural gas industry. API’s mission is to promote safety across the industry globally and to influence public policy in support of a stro ng,viable U.S. oil and natural gas industry. 176 •API 751 /API RP 751: American Petroleum Institute Recommended Practices for safe operations of HF Alkylation units. RP 751 is an industry document that communicates proven industry practices to support the safe operation of an HF acid alkylation unit •ARF: Airborne Reduction Factor - the percent reduction in airborne HF as compared to an unmitigated AHF release. Larger ARF = less HF released to atmosphere. ARF is calculated using acid strength, water, additive, and reactor temperature. The ARF calculation was developed from extensive lab testing at varying percentages of each component. The refinery reports ARF values monthly to TFD. •ASO: Acid soluble oil - a polymer and byproduct of the alkylation process and one of the five components of the main acid stream in the MHF alkylation process •Barrel / bbl: A barrel of oil; one barrel of oil is equivalent to 42 US gallons •Barrier: An enclosure which intercepts / captures a released jet of MHF which enables it to rainout instead of aerosoling; there are multiple types of barriers at Torrance including flange shrouds, pump enclosures, or barrier or “belly” pans under acid settlers •Belly Pan: A barrier or enclosure surrounding the bottom area of the settler, which contains a large portion of the unit’s MHF. The belly pan captures MHF in the event of a release. •Blast wall: A physical wall surrounding the acid storage and rapid acid dump vessel in the alkylation unit in order to protect both vessels from a major process upset •BOL: Bill of Lading - The certificate a truck must present to the refinery in order to enter and make a delivery; a BOL shows the composition and quantity in the truck from the manufacturer •BPD: Barrels per day •Cal/OSHA: California Division of Occupational Safety and Health (DOSH) - a government agency which protects and improves the health and safety of employees working in California Glossary of Terms 177 Glossary of Terms •Catalyst: A chemical which enhances or enables a reaction to occur without being destroyed or consumed in the reaction; HF is the catalyst in the HF alkylation process •CCPS: Center for Chemical Process Safety - an organization within the American Institute of Chemical Engineers (AIChE) that identifies and addresses process safety needs within the chemical, pharmaceutical, and petroleum industries •CD / Consent Decree / City of Torrance Consent Decree: Ordered by the Superior Court for the County of Los Angeles and developed in the 1990s based on recommendations by the City of Torrance, Mobil, and a court-appointed Safety Advisor (SA) to phase out anhydrous HF by 1997 and ensure the refinery operates in a safe manner. There are multiple post-decree obligatory items including reporting and communication protocols with TFD that were approved by the Superior Court •CSB: Chemical Safety Board - an independent U.S. federal agency charged with investigating industrial chemical accidents. Headquartered in Washington, D.C., the agency's board members are appointed by the president and confirmed by the United States Senate. The CSB conducts root cause investigations of chemical accidents at fixed industrial facilities. •Desert Test / Nevada Desert test : Testing conducted in 1986 to determine release properties of anhydrous HF •EPA: Environmental Protection Agency - an agency of the Federal government of the United States that has the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. •EPA Worst Case Scenario: A component of the EPA’s Risk Management Program or RMP which aims to understand potential offsite impacts in the event of a release of a toxic substance •ERPG-2: Emergency Response Planning Guidelines Tier 2 - part of the EPA’s RMP; the maximum airborne concentration below which nearly all individuals could be exposed for up to 1 hour without experiencing or developing life-threatening health effects. •ESP: Electrostatic Precipitator - a pollution control device on the back-end of the FCC unit which collects FCC catalyst particles, preventing them from being released to the atmosphere •ExxonMobil: The owner and operator of the Torrance Refinery from 1999-2016 178 Glossary of Terms •FCC/FCCU: Fluidized Catalytic Cracking Unit -makes feedstock for the alkylation unit and other gasoline components used to blend CARB gasoline •First Principles: Scientific theoretical work is said to be from first principles if it starts directly at the level of established science and does not make assumptions such as empirical model and fitting parameters. •Flange barrier / flange shroud: One of the MHF barriers at Torrance which fully wrap around pipe flanges and enclose the flange. Shrouds are tested annually for integrity and efficacy with the Torrance Fire Department •Flash Atomization: The act of a substance disintegrating into small droplets when a pressurized liquid is released into the atmosphere. Modified HF eliminates the ability for flash atomization of HF to occur. •Flash Vaporization: A liquid stream partially vaporizing under certain pressure and temperatures. Flash vaporization typically occurs from a large drop in pressure which causes the fluid to rapidly vaporize or “flash ” •HC / light ASO: Hydrocarbon / light acid soluble oil -a component of the main acid stream which has a lower boiling point than “normal” ASO •HF alkylation: Alkylation process which uses hydrogen fluoride as the reaction catalyst •Honeywell / UOP: Honeywell manufactures modified HF which is sold to the Torrance Refinery; UOP owns the ReVAP and HF alkylation technologies •Hydrogen bonding: An attraction between a hydrogen atom and another atom or molecule, such as water. Water’s high boiling point can be attributed to its strong hydrogen bonding relative to its low molecular weight. •IARC: International Agency for Research on Cancer –specialized inter-disciplinary cancer agency of the World Health Organization that promotes international collaboration in cancer research so that preventive measures may be adopted •Ionic liquid Alkylation/ILA: A new alkylation technology developed by Chevron licensed to UOP which has only been tested on a small scale. A small scale plant is planned to be developed and implemented by 2020 at Chevron’s Salt Lake City refinery 179 Glossary of Terms •Isobutane: One of the main feedstocks for the alkylation unit •Jet Release: The act of a substance disintegrating into small droplets when a pressurized liquid is released into the atmosphere . •KB: Thousand barrels •Mobil: The Torrance Refinery’s owner and operator until 1999 when Exxon and Mobil merged •MHF: “Modified” hydrogen fluoride / hydrofluoric acid –hydrofluoric acid with an additive depressant to prevent flash atomization •MHF Alkylation / ReVAP:Reduced Volatility Alkylation Process which uses a heavy liquid additive to suppress aerosolization properties of hydrogen fluoride •MHF-AUA:Modified Hydrogen Fluoride Alkylation Unit Acid •Naphtha:A product made from the FCC which is a key blendstock for CARB gasoline •Norton Study / Norton Alkylation Technology Study:A study commissioned by the South Coast Air Quality Management District assessing the different options of alkylation technologies issues in September 2016 •Olefin / PBB: Main feedstock for the alkylation unit which is produced from the FCC –(PBB –propylene, butylenes, butanes) •Passive mitigation: A mitigation system which requires no human or mechanical interaction •PBF: PBF Energy -the current owner and operator of the Torrance Refinery since July 2016 •TORC: Torrance Refining Company, a subsidiary of PBF Energy,the current owner and operator of the Torrance Refinery since July 2016 •PSM: Process safety management 180 •QRA: Quantitative Risk Assessment -an industry standard methodology that considers a broad range of scenarios, applies probability of likelihood, and highlights most effective risk mitigation options. •Rainout: The act of a substance forming a liquid and dropping or “raining” to the ground.“Rainout percent” refers to the percentage of released liquid HF which remains as a liquid due to rainout. •Reactor:Vessel in which alkylation reaction takes place. Olefin, isobutane, and acid are combined in reactor to make alkylate •Regeneration / acid regeneration: The process in which byproducts / contaminants produced in the alkylation reaction are removed from the acid stream so the acid can be reused •RMP / EPA RMP: Risk Management Plan -part of the Clean Air Act, which requires EPA to publish regulations and guidance for chemical accident prevention at facilities which use hazardous substances. •SA / Safety Advisor: A Superior Court-appointed safety advisor responsible for reviewing, investigating, and developing recommendations around modified HF and overall safe operation of the refinery including the MHF unit at the Torrance refinery; recommendations were documented in the Safety Advisor Report and implemented in the Torrance Consent Decree, which bound the Torrance refinery to adhere to these recommendations •Settler / acid settler: A horizontal vessel in the alkylation unit that separates acid from hydrocarbon / alkylate (based on density) after the alkylation reaction has occurred •Solid Acid Catalyst (SAC) alkylation: An alkylation process not yet commercially viable which uses a zeolite catalyst to produce alkylate. One plant (<3 kbd) has been in operation in China since 2015. •SRI: Societal Risk Index -a measure of risk to the general public which accounts for all safety factors affecting the alkylation unit; lower SRI = lower risk. SRI is affected by multiple factors including ARF, number of acid truck deliveries, and the availability of critical safety systems such as barriers, AES, HF detectors, fire monitors / deluge. The refinery steward s and reports SRI quarterly to the Torrance Fire Department Glossary of Terms 181 •Stratco Alkysafe: The process in which an HF unit is converted to sulfuric acid; process is a patent and has never been implemented in an actual refinery •Sulfuric Acid alkylation: Alkylation process which uses sulfuric acid (H2SO4) as the reaction catalyst •TFD: Torrance Fire Department •TRAA: Torrance Refinery Action Alliance - grassroots organization of South Bay residents and business owners against MHF •Vapor pressure: The pressure exerted by a vapor that is in equilibrium with its solid or liquid form - volatility is directly related to vapor pressure. A substance with a high vapor pressure is considered volatile. •Water: One component in the main acid stream which acts as an HF vapor suppressant (via hydrogen bonding), reducing aerosoling of HF. Water concentration is limited to 3 wt% due to corrosion issues •Water Cannon: A water mitigation system which suppresses HF vapors in the event of a release Glossary of Terms Attachment Four Torrance Refining Company LLC 3700 W. 190th Street Torrance, CA 90504 www.pbfenergy.com April 27, 2018 VIA E-MAIL: pfine@aqmd.gov Philip M. Fine, Ph.D. Deputy Executive Officer Planning and Rules South Coast Air Quality Management District 21865 Copley Drive Diamond Bar, CA 91765 Re: Comments on South Coast Air Quality Management District Staff’s April 28, 2018 Refinery Committee Presentation, as Released to the Public on Saturday, April 21, 2018 Dear Dr. Fine, Torrance Refining Company LLC (“TORC”) is pleased to submit detailed comments to the South Coast Air Quality Management District (“District”) in response to staff’s April 21, 2018 presentation prepared for the Refinery Committee related to “Proposed Rule 1410, Hydrogen Fluoride Storage and Use at Petroleum Refineries” (“PR 1410”), which only impacts two of the five Southern California refineries: Torrance Refining Company (TORC)’s Torrance Refinery and Valero Energy Corporation’s (“Valero”) Wilmington Refinery. For the record, we note that the rulemaking is actually a misnomer, as both refineries phased out the use of Hydrogen Fluoride (“HF”) with modified HF (“MHF”) in 1997 (Torrance) and 2007 (Wilmington), while many industries in the District’s jurisdiction and the state continue to safely use HF because they manage its risk, just like the Torrance and the Wilmington Refineries, who have a combined 100 years of using HF/MHF without an offsite release. As has been the case with every presentation since and including the April 1, 2017 Refinery Committee Investigative Hearing, TORC is extremely disappointed with District staff’s presentation for the April 28, 2018 Refinery Committee meeting. The presentation continues a pattern of being riddled with misstatements, misrepresentations, and misinformation about MHF alkylation technology, TORC’s positions on MHF, Sulfuric Acid and emerging alternative Alkylation technologies, the cost of a new grassroots Sulfuric Acid unit, the potential local, regional, and state- wide economic impacts of an MHF phase-out, the potential benefits of the recently adopted Tax Cut and Jobs Act, and comparative risk between MHF and Sulfuric Acid, as well as our position on the “Tiered Approach” proposed by District staff at the January 20, 2018 meeting. In addition and most egregiously, in contradiction to what District staff represented in a meeting on April 5, 2018, staff has unilaterally dropped the Tier III option without any justification, support, or notice, in favor of two MHF phase-out options: A and B. Option A is in essence a phase-out to Sulfuric Acid alkylation in five years. Option B is in essence a phase-out to an unproven, emerging Dr. Fine., Re: Comments on District Staff’s April 28, 2018 Refinery Committee Presentation as Released to the Public on Saturday, April 21, 2018 April 27, 2018 Page 2 alternative Alkylation technology in six to eight years, depending on the outcome of a technology assessment. Staff’s current proposed PR 1410 conceptual rulemaking limiting the MHF phase-out to two options is inconsistent with and in opposition to the direction provided to stakeholders by Governing Board Chair Burke and Refinery Committee Chair Parker at the end of the January 20th Refinery Committee meeting. At the end of this meeting, the Chairs specifically directed the respective stakeholders – both refiners, District staff, and activist groups – to get together and work out a mutually satisfactory agreement that would enable the District to resolve outstanding issues and proceed to a conclusion on the rulemaking. More specifically, Dr. Burke directed the stakeholders to “… come back, to this Committee with a more highly negotiated approach and then give the Chair of this Committee, who really knows what he is doing, a bite at the apple and then let’s go forward.” Similarly, Dr. Parker directed stakeholders “[t]here’s a lot of ways to basically look at this; I would urge everyone to sit down and look at it realistically and positively … and reason together.” District staff was then further directed to report back on the progress of the parties’ negotiations at the next Refinery Committee meeting. Importantly, the Refinery Committee told the stakeholders, including staff, to resolve outstanding issues and never directed staff to unilaterally formulate and/or recommend new options that were inconsistent with the options presented on January 20th. Following the guidance provided by the two Chairs at the January 20th Refinery Committee meeting, TORC proceeded in good faith to meet with both District staff and the Torrance Refinery Action Alliance (“TRAA”) to begin a dialogue on a potential resolution to the PR 1410 rulemaking. As part of this dialogue, again acting in good faith based on the two Chairs’ direction, TORC expended considerable effort and resources to evaluate and develop potentially feasible Tier III safety enhancements that could provide real and valid risk reduction to further protect Refinery workers and the community, which District staff appeared receptive to in the several meetings we had with them following the January 20th meeting. The evaluation of these safety enhancements were in lieu of what staff had presented at the January 20th meeting since staff’s presented Tier III mitigation actually introduced more process and personnel safety risks. After review of District staff’s presentation for the April 28th Refinery Committee meeting, our considerable efforts and resources spent on developing safe, feasible Tier III safety enhancement projects now appear to have been in vain because staff’s presentation effectively sets up a “strawman” that if the Refineries fail to accept the District’s unsafe and ill-conceived Tier III mitigation “approach” as proposed on January 20th, we will be forced to phase-out MHF instead of considering and implementing our proposed Tier III safety enhancement projects. The decision to disallow consideration of other Tier III options is remarkably disingenuous of staff and highlights its lack of understanding and experience regarding risk management and process safety, especially considering that its Tier III mitigation “approach” presented on January 20 th would never be built in the context of a Refinery process unit due to the additional inherent process and Dr. Fine., Re: Comments on District Staff’s April 28, 2018 Refinery Committee Presentation as Released to the Public on Saturday, April 21, 2018 April 27, 2018 Page 3 personnel safety risk the scheme would have created. District staff has no experience in engineering, designing, and/or constructing Refinery process safety systems, and as a result, it should not dictate what is considered safe or will provide risk reduction. Just as importantly, there is no such thing as “Fail-Safe” in any industry, as evidenced by staff’s Tier III mitigation proposal to dome or undergrounding all or portions of the MHF Alkylation Unit, which could have effectively created an extremely flammable and/or explosive environment that would threaten Refinery workers, the community, and the state’s CARB gasoline supply. In other words, through this strawman, staff has unilaterally eliminated the opportunity for Refinery Committee members to consider any “Tier III mitigation with no MHF phase-out option” on April 28th, with no justification other than misrepresenting the Refineries’ position on staff’s originally proposed Tier III mitigation. Again, the Tier III mitigation that staff presented on January 20th was clearly not “Fail Safe” because it would have created more process safety and personnel risk than any safety benefits these mitigation measures would allegedly produce. Therefore, TORC emphatically and respectfully requests that the District introduce an Option C – Tier III mitigation with no MHF phase-out option, in line with the option staff presented on January 20th, and present this to the Refinery Committee on April 28th for their further consideration. To do otherwise will plainly show staff has eliminated the Tier III option to produce a predetermined outcome for an MHF phase-out, without any compelling evidence or support. In the PR 1410 conceptual rulemaking proceedings thus far, staff has failed to mention another option for the two refineries that utilize MHF alkylation – shutdown of two refineries due to an MHF phase- out. The outcome of such an option is specifically addressed in the “Transportation Fuel Issues” report officially presented by the California Energy Commission (“CEC”) at its “2017 Integrated Energy Policy Report Commissioner Workshop on Transportation Energy Supply Trends” on July 6, 2017. The CEC is required by law to issue this “Integrated Energy Policy Report” (“IEPR”) every two years. In the 2017 IEPR process, CEC staff highlights issues that have the potential to impact supply and availability of transportation fuels over the near- to mid-term period, including those that have greater potential for supply impacts. CEC’s IEPR process is intended to properly characterize these potential issues, as well as have other relevant concerns brought to the forefront through submittal of comments and material, which is provided through CEC reports and presentations like those last provided to District staff in July 2017 and presented at the PR 1410 Working Group Meeting #6 in September 2017. These presentations specifically warn that the “South Coast Air Quality Management District (SCAQMD) has proposed a rule that has the potential to eliminate HF use at refineries in Southern California.” District staff subsequently invited a CEC representative to participate in Working Group Meeting #6 on September 20, 2017. The CEC presentation included previously-released information from the July 2017 presentation. We reference the original report to avoid any controversy related to the CEC’s outstanding Working Group presentation, which we now understand District staff is trying Dr. Fine., Re: Comments on District Staff’s April 28, 2018 Refinery Committee Presentation as Released to the Public on Saturday, April 21, 2018 April 27, 2018 Page 4 to discredit as being “unapproved,” despite the fact that the information had been previously released by the CEC. The July 2017 CEC presentation notes that a “… [m]uch greater portion of alkylation units in [the] world use HF when compared to California.” The presentation also notes that a “[p]erformance- based structure could expand on safety measures” as a means of supporting continuing operation of both MHF Alkylation units. Although District staff had been considering a performance standard based on the American Petroleum Institute’s Recommended Practice 751 (“API RP-751”), all references to an API RP-751 option have disappeared from the currently proposed PR 1410 conceptual rulemaking. CEC’s July 2017 presentation also explores the potential for replacing the MHF Alkylation Units with Sulfuric Acid alkylation by evaluating the need for refiners to obtain all necessary permits through the California Environmental Quality Act (“CEQA”) process before replacement work could commence, admitting “… the outcome of this process is uncertain” because of the possibility “… that such permits will ultimately be denied.” The report goes on to state that “[e]ven if permits are granted, [the] timeline could be extensive,” citing the Chevron Richmond Refinery modernization permit approval that took 9+ years. If that is the timeline of the 1410 rulemaking involving a forced MHF phase-out, permitting alone would extend beyond the arbitrary proposed five- or six- to eight- year deadlines, respectively, under the currently proposed two options without the new grassroots Alkylation Unit being built, even if that were an option. According to the CEC, “[i]f an HF ban were compelled it is uncertain if either or both companies would elect to make such changes to their facilities,” noting the agency is uncertain whether the cost of replacing the MHF alkylation “could be justified by either or both companies should an HF alkylation ban ultimately be approved by the SCAQMD.” The CEC also expresses concern that “the incremental impacts on gasoline costs for consumers and businesses could be as bad as or worse than those … experienced for the duration that the Torrance ESP was out of operation.” In terms of further impacts from both refineries shutting down, the CEC July 2017 presentation also adds that, “Loss of alkylation output (and reduced production from other refinery process units) will decrease local supply of gasoline (and other refined products) for a period of at least two years.” They also expect gasoline prices “… to be worse than those associated with the ExxonMobil ESP explosion” when “[g]asoline prices averaged 26 cents per gallon greater than normal for 17 months,” which “[e]quates to incremental costs of $5.6 billion for motorists & businesses.” The potential closure of both Refineries, supply shortages, and price increases represent the missing “fourth option.” To avoid the threat of Refinery shutdowns, as warned by the CEC, TORC urges the District staff to introduce a new Option C, “Tier III mitigation with no MHF phase-out option,” in line with the Tier III approach staff presented on January 20th, and provide the Refinery Committee with the opportunity to consider this third option at the April 28th Refinery Committee meeting. Dr. Fine., Re: Comments on District Staff’s April 28, 2018 Refinery Committee Presentation as Released to the Public on Saturday, April 21, 2018 April 27, 2018 Page 5 If District staff fails to do this, then staff will have removed any incentive for TORC to continue to evaluate and invest in Tier III MHF Alkylation Unit safety enhancements as they are costly and would only be operable for minimal amount of time before the MHF Alkylation Unit would be forced to shut down to comply with the District’s MHF phase-out requirement. Thus, by failing to include an Option C in keeping with District staff’s initial proposal, District staff could be seen as purposefully undermining the ability of PR 1410 to achieve additional real and valid risk reduction, which should be the focus of the rulemaking, rather than insisting on an unachievable “zero risk” threshold that no other industry, program, or policy is subject to. If District staff chooses to ignore the inclusion of an Option C , the phase-out deadlines District staff proposes under either Option A for Sulfuric Acid and Option B for an emerging alternative Alkylation technology are infeasible. Staff has provided no justification for the arbitrary option deadlines and significantly underestimates the time needed for appropriately designing, engineering, procuring, delivering, permitting, and implementing each option, if they were to be pursued. TORC’s position on Option A, a forced MHF phase-out to Sulfuric Acid in five years, is that it does NOT make process safety, environmental, or economic sense, especially in light of more than 100 years of combined operations without any offsite release of HF or MHF for both the Torrance and Wilmington refineries. Two new grassroots Sulfuric Acid units would increase criteria pollutants, toxics emissions, and greenhouse gases (“GHGs”), which is inconsistent with District’s air quality goals. Additionally, for TORC, the use of Sulfuric Acid at the Torrance Refinery would violate the City of Torrance Consent Decree in which a Los Angeles Superior Court has ordered the use of MHF at the Refinery. Telling and further evidence of District staff’s desire for a predetermined MHF phase-out, staff presented a low ball estimate of what a new Sulfuric Acid unit would cost, citing the Norton Report as the basis for this estimate. However, in a letter to the District dated April 27, 2018, the day before the Refinery Committee meeting, Norton Engineering rebukes staff’s misrepresentation by stating: “The assertion in the presentation that Norton Engineering agrees with SCAQMD staff that the post processing section of any particular the HF alkylation unit is suitable for use if the unit is converted to sulfuric acid is a misrepresentation of the conclusions in our report.” (See Norton Engineering Letter to Dr. Phillip M. Fine dated, “Comments on 4/28/18 Presentation to Refining Committee: Inaccurate Information Referencing Norton Engineering Report On MHF Conversion”, p.1; (emphasis added.)). TORC’s position on Option B, a forced MHF phase-out to an as yet unnamed, unproven, potentially unsafe or unreliable emerging alternative Alkylation technology in six to eight years is to fundamentally question the unjustified basis for effectively phasing-out to an unknown technology. Well before considering transitioning from MHF Alkylation to an alternative Alkylation technology at the Torrance Refinery, the new, emergent technology must be commercially viable in scope and scale to the Torrance Refinery’s existing MHF Alkylation Unit, and must be inherently safer than Dr. Fine., Re: Comments on District Staff’s April 28, 2018 Refinery Committee Presentation as Released to the Public on Saturday, April 21, 2018 April 27, 2018 Page 6 MHF Alkylation. From our extensive evaluation and based on presentations by licensors of alternative Alkylation technologies and their response to questions at various PR 1410 Working Group meetings, these emerging technologies: Are many years away from being commercially proven to be safe, reliable, and available; Present design criteria, environmental impacts, and process safety risks that are unknown and speculative; and Will cost as much as, and perhaps more than, a conventional, new grassroots Sulfuric Acid Alkylation unit. A switch from MHF to any unproven alternative Alkylation technology, or one that has no additional safety benefits, such as Sulfuric Acid, is irresponsible and unrealistic on many fronts. As noted in the PR 1410 Working Groups, and repeated and re-emphasized here, there are no other commercially viable, proven alternative Alkylation technologies available at this time. Importantly, to determine if the MHF phase-out will be in six or eight years for Option B, District staff has included a technology assessment. However, if the technology assessment shows that alternative Alkylation technologies have failed to achieve commercial viability or are still many years away from becoming viable, if ever, the District would effectively force Torrance and Wilmington Refineries to install unproven technology or shut down because Option B has a hard or forced phase- out deadline. Adopting an unproven emerging technology to address unsupported fears, is fraught with potential process and personnel safety issues and environmental concerns, and would introduce more risk to Refinery workers and the community th an compared to the continuing use of MHF. Such an outcome is bad public policy and begs the question as to the intent of the District to shut refineries down. This rulemaking concept should be abandoned in favor of a more achievable, reasonable approach to refining CARB fuels. Based on our current analysis, as detailed in Attachment A and highlighted above, we have identified multiple areas of concern with staff’s presentation and the proposed PR 1410 rulemaking conceptual framework outlined in the staff presentation released on April 21st. Specifically, Attachment A offers detailed comments and responses to specific slides related to the District’s April 28th Refinery Committee presentation. TORC’s comments, along with our prior written comments and Working Group meeting oral comments, must be considered and addressed before the District continues with its PR Rule 1410 conceptual rulemaking framework, in keeping with established and precedential District procedures. * * * In closing, Sulfuric Acid does NOT make process safety, environmental, or economic sense. Emerging Alkylation technologies are years away, if ever, from commercial viability and being proven. Therefore, District staff’s currently proposed two MHF phase-out options are baseless, unjustifiable, and in the case of emerging alternative Alkylation technologies, currently infeasible. Dr. Fine., Re: Comments on District Staff’s April 28, 2018 Refinery Committee Presentation as Released to the Public on Saturday, April 21, 2018 April 27, 2018 Page 7 Accordingly, the focus of the PR 1410 rulemaking should be on a tiered approach of evaluating feasible Tier II and Tier III safety enhancements that will provide real and valid risk reduction to further protect Refinery workers and the community through appropriate risk management. Accordingly, we respectfully and earnestly request that an Option C, “Tier III mitigation without an MHF phase-out option,” be included in the options presented to the Refinery Committee for their consideration on April 28th. We have shown we are committed to engaging in good faith with all parties involved in the PR 1410 rulemaking process. We want to see the stage set for a potential amicable resolution, following on the direction from both Chairs at the January 20th meeting. Please note that in submitting this letter, TORC reserves the right to supplement its responses and comments as it deems necessary, especially if additional or different information is made available to the public regarding the PR 1410 rulemaking process. Sincerely, Steve Steach Refinery Manager cc: District Staff - via e-mail and overnight delivery Wayne Nastri Executive Officer Susan Nakamura Assistant Deputy Executive Officer Michael Krause Planning and Rules Manager cc: District Refinery Committee Members - via e-mail and overnight delivery Dr. William A. Burke Governing Board Chair Dr. Clark E. Parker, Sr. Governing Board Vice-Chair and Refinery Committee Chair Hon. Larry McCallon Governing Board Member and Refinery Committee Vice-Chair Hon. Ben Benoit Governing Board and Refinery Committee Member Dr. Joseph K. Lyou Governing Board and Refinery Committee Member Hon. Judy Mitchell Governing Board and Refinery Committee Member cc: District Governing Board Members - via overnight delivery Hon. Dwight Robinson Governing Board Member Hon. Janice Rutherford Governing Board Member Hon. Marion Ashley Governing Board Member Hon. Joe Buscaino Governing Board Member Hon. Michael A. Cacciotti Governing Board Member Hon. Shawn Nelson Governing Board Member Hon. Hilda L. Solis Governing Board Member Attachment A TORC’s Comments and Responses April 27, 2018 -8- TORC offers the following detailed analysis and comments to specific slides related to the District staff’s April 28th PR 1410 presentation to the Refinery Committee. We address staff’s misstatements, misrepresentations, and correct misinformation found throughout its presentation that seeks to justify its predetermined and unsupported, forced phase-out of MHF under both proposed Options A and B. These comments and concerns, along with TORC’s oral and written responses provided to the District on the dates and forums shown in the Table below, must be considered and addressed with TORC before the District continues with its current PR Rule 1410 conceptual rulemaking framework. To date, it appears that District staff has generally ignored these issues and topics, except when we have requested meetings to address the issues. Forum Dates Meetings May 4, June 7, June 28, July 26, August 17, December 19, 2017 and February 7, March 7, and April 5, 2018 Refinery Tours May 16, 2017 and April 17, 19, and 23, 2018 Written Comments May 4, August 1, August 11, August 23, September 12, September 20, December 12, 2017, and January 18, and February 6, 2018 Working Group Meetings April 19, May 18, June 15, August 2, August 23, 2017, and September 20, 2017 Refinery Committee Meetings January 20 and April 28, 2018 Slide 1 (Title Page) STATUS UPDATE on PR1410 – HYDROGEN FLUORIDE STORATE AND USE AT PETROLEUM REFINERIES In Slide 1, the PR 1410 rulemaking title language mispresents the fact that the two Refineries targeted by PR 1410—Torrance and Wilmington—already phased out the use of HF, Torrance in 1997 and Wilmington in 2007. However, District staff is well aware both Refineries phased-out HF years ago. They also know the refining industry acknowledges MHF catalyst to be safe and the latest, most advanced, commercially proven alkylation catalyst available in the world. In fact, Torrance Refinery’s Alkylation Unit has a 51-year history of safety with no off-site releases of MHF/HF. Combined, the two refineries have a 100-year performance record of no offsite releases of HF or MHF. Slide 2 – SUMMARY OF JANUARY 20TH 2018 REFINERY COMMITTEE MEETING In Slide 2, to provide an accurate representation of the January 28th Refinery Committee meeting, District staff should note that the actual number of attendees at the meeting that were against a phase- out of MHF outnumbered those in support of a phase-out by at least 3:1, which was exacerbated by the fact the meeting room was too small to hold all of the Refineries’ supporters. Attachment A TORC’s Comments and Responses April 27, 2018 -9- Slide 3 - SCAQMD MEETINGS SINCE THE LAST REFINERY COMMITTEE In Slide 3, District staff lists some of the meetings they had with TORC, Valero, and TRAA. District staff fails to list the recent Refinery tours at Torrance and Wilmington through which District staff and various Governing Board members were shown the MHF Alkylation Units at both Refineries, including the units’ redundant safety systems and other features. Importantly and perhaps predictably, even though they were aware of the meeting, District staff fails to note on Slide 2 that representatives from TORC met with TRAA members on March 14, 2018, in keeping with the direction from the two Chairs at the end of the January 20th Refinery Committee meeting. At the meeting, which we considered congenial, the two parties shared their respective positions. TORC explained in response to TRAA questions why Sulfuric Acid makes no sense for the Torrance Refinery, that emerging alkylation technologies are years away, if ever, from commercial viability or being proven safe and reliable, and that our focus was on evaluating feasible Tier II and Tier III safety enhancements that will provide real and valid risk reduction to further protect Refinery workers and the community. Slide 4 - SUMMARY OF STAFF’S INITIAL RULE CONCEPT In Slide 4, District staff presents the same PR 1410 conceptual framework they presented at the January 20th Refinery Committee meeting. As discussed below, without any support or justification, staff’s current proposed PR 1410 conceptual rulemaking includes two options – Option A and B – both with a forced phase-out of MHF. As noted in our cover letter to the Attachment, staff’s current proposed PR 1410 conceptual rulemaking with only two MHF phase-out options is inconsistent with the direction given from the two Chairs at the January 20th Refinery Committee. The two Chairs specifically asked the parties to get together and seek a potential resolution to the PR 1410 rulemaking. District staff was further directed to report back on the progress of the parties’ negotiations at the next Refinery Committee meeting. Importantly, the Refinery Committee never directed staff to formulate and/or recommend new options that are inconsistent with the options that were presented at the January 20th Refinery Committee meeting. While misrepresenting the Refineries’ position on staff’s originally-proposed Tier III mitigation, the staff has no basis or authority to unilaterally exclude from the Refinery Committee’s consideration on April 28th a “Tier III mitigation with no MHF phase-out option,” especially considering staff have no justification or support for excluding the original Tier III option for Refinery Committee consideration. As discussed below, the Tier III mitigation examples staff presented at the January 20th Refinery Committee meeting were not a “Fail Safe.” They are anything but fail safe. In fact, District staff’s proposed Tier III mitigation measures would have created more process and personnel safety risk Attachment A TORC’s Comments and Responses April 27, 2018 -10- than any potential safety benefits. These mitigation measures would have created the potential for a flammable and/or explosive confined space environment. However, as directed by the two Chairs at the January 20th Refinery Committee meeting, TORC in good faith, and in an effort to seek resolution on PR 1410, expended considerable effort and resources to evaluate and develop potentially feasible Tier III safety enhancement that will provide real and valid risk reduction to further protect Refinery workers and the community. Slide 5 - REFINERIES’ RESPONSE TO INITIAL RULE CONCEPT In Slide 5, District staff blatantly misrepresents TORC’s rationale for rejecting staff’s Tier III mitigation conceptual approach, “Fail-Safe” Mitigation – Containment,” presented at the January 20th Refinery Committee meeting. As previously noted, these measures are not “fail safe” as they would actually introduce a higher level of process and personnel safety risk than any perceived safety benefit these ill-conceived mitigation measures would purportedly provide. District staff have set up a strawman that if the Refineries do not accept its Tier III mitigation “approach,” there is no Tier III and the only option is a forced MHF phase-out. This is remarkably disingenuous of staff and highlights its lack of understanding and experience regarding risk management and process safety, especially considering that its Tier III mitigation “approach” presented on January 20th would never be built in the context of a Refinery process unit due to the additional inherent process and personnel safety risk the scheme would have created. District staff has no experience in engineering, designing, and/or constructing Refinery process safety systems, and as a result, it should not being dictating what is considered safe or will provide risk reduction. Moreover, there is no such thing as a “Fail-Safe” in any industry or life in general; this is why government and industry traditionally seek to effectively manage risk, rather than impose “zero risk’ policies, which would preclude having children, travel of any kind, generation of electricity, surfing, or pick a topic – everything everyone does involves risk. As noted in Slide 11 of its January 20th presentation, District staff presented the following proposed inherently and fundamentally unsafe Tier III safety enhancement categories as “Fail Safe” for preventing potential off-site HF releases from Torrance’s and Wilmington’s MHF Alkylation Units: Complete, full enclosure of alkylation unit with roll-up doors, comprehensive water spray (worker safety), sensors & drainage capabilities o Possibly build whole new containment system parallel to existing unit to reduce downtime o Need to address potential “unintended secondary consequences” (e.g., flammable and/or explosive gases) Negatively pressured enclosure venting to scrubber with drainage o Fully automated systems including acid evacuation at alarm set points o Underground storage (acid dump tank, fresh storage, etc.) Attachment A TORC’s Comments and Responses April 27, 2018 -11- Like many attendees at the January 20th meeting, after reviewing these proposed Tier III safety enhancement mitigation measures, TORC expressed to staff that its proposed mitigation measures would introduce more process and personnel safety risks than any safety benefit, and were not “Fail Safe.” Our concern stemmed from the fact that these options would require enclosing or “undergrounding” the entire MHF Alkylation Unit or some portion of the unit. Because MHF Alkylation Units process light hydrocarbons equivalent to propane and butane, an enclosure or undergrounding of the scope and scale proposed by staff would create a massive confined space in which released hydrocarbons could accumulate, creating a highly flammable and/or explosive environment containing rotating equipment and other potential ignition sources nearby. This environment would magnify and increase process and personnel safety risks for working in an Alkylation unit, as well as heightened risks for the community from a potential fire and/or explosion. A flammable and/or explosive incident in such a confined enclosure could cause significant injuries or death to those inside. Damage to the MHF Alkylation Unit would likely be intensified, increasing the likelihood a release scenario that could impact Refinery workers or the community, especially if the enclosure were to become compromised by the incident. Importantly, the API originally considered an enclosure plan similar to the Tier III measures proposed by staff as a potential safety enhancement for API RP-751, the industry’s recommended practices for safely operating HF and MHF Alkylation Units. However, due to many of the safety concerns discussed above, an enclosure was eliminated from further consideration. Specifically, we explained to District staff some of the challenges that must be considered when evaluating an enclosure or undergrounding of a light hydrocarbon processing unit, which include: Flammable and/or explosive mixtures o Unit processes light gases equivalent to propane and butane o Accidentally released gases could accumulate and explode inside the enclosure Emergency response o Impact on incidents – fires, releases, etc. Structural concerns o Design and construction of the dome o Need for scrubbers o Personal Protective Equipment (“PPE”) required for entry o Lifting over live equipment to construct the structure is prohibited o Time required to complete the structure Construction, Operations, and Maintenance access o Entry into the unit is questionable – uncertain how personnel, equipment, materials, could access to the unit o Determining external and overhead boundaries o Determining whether to dome the entire unit or “acid-only” areas Attachment A TORC’s Comments and Responses April 27, 2018 -12- Dome concept was discussed at length as possible mitigation during unit design Hazards increase risk for personnel and process safety issues versus any safety benefit Notably, we commented that we were unaware of any of these proposed enclosure or undergrounding measures ever being installed on and/or constructed as part of any Alkylation unit. We also pointed out that the District’s proposed Tier III mitigation “approach” again fails to prove the current level of safety mitigation on the Torrance and Wilmington MHF Alkylation Units is inadequate and falls short of justifying the need for additional and conceptual safety enhancements, which is and should be a prerequisite for adopting new technology in any tier. Because of these concerns and before TORC could accept such Tier III safety enhancements, we stated that the District must thoroughly vet the dome and undergrounding vessels to make sure these concepts are feasible, improves safety, reduces risk, and are cost-effective. Such a vetting process should include a quantitative risk process that establishes the Tier III risk baseline, which would assist the District in determining if any Tier III options provide additional safety benefits to the refinery workforce and community. Nevertheless, as directed by the Refinery Committee at the January 20 th TORC in hopes of reaching resolution on PR 1410, TORC in good faith, proceeded to continue to evaluate potentially feasible Tier III safety enhancements that would provide real and valid risk reduction. To this end, in several recent meetings with District staff, TORC has explained that we were evaluating the following Tier III safety enhancement projects to determine whether they were feasible, even though the MHF Alkylation Unit was already determined to be as safe if not safer than Sulfuric Acid by the Los Angeles Superior Court under the City of Torrance Consent Decree: Protective steel structure around and over portion of the unit Water mitigation dome over portion of the unit Upgraded detection system Electrostatic Precipitator (“ESP”) over-pressure mitigation Six to eight projects to further enhance unit operational reliability In addition to these potential Tier III safety enhancements, we had already made a commitment to the California Department of Industrial Relations (“CalOSHA”) to install the five Tier II projects, discussed below. We are convinced that these Tier III safety enhancements we are developing with the assistance of global alkylation, engineering, and risk experts will provide real and valid risk reduction if a potential HF release were to ever occur, and thus, further protect Refinery workers and the community. In our recent meetings with District staff, they appeared to be interested in what we were proposing. However, based on staff’s presentation for the April 28th Refinery Committee meeting, our good faith effort appears to have been in vain as staff is discounting these enhancements by referring to them in passing in Slide 5 as “Elements of Tier III Mitigation.” In contradiction to what District staff represented in a meeting on April 5, 2018, they have now arrived at this determination without any Attachment A TORC’s Comments and Responses April 27, 2018 -13- review as to these enhancements’ potential risk reduction in favor of what appears to be District staff’s predetermined and preferred forced phase-out of MHF, which also contradicts the two Chairs’ direction from the January 20th Refinery Committee meeting. This development further supports the view that District staff have set up a strawman that if the Refineries do not accept its original, unsafe and ill-conceived Tier III mitigation “approach,” they will not offer a Tier III option, and as a result, now there is only two forced MHF phase-out options. Despite District staff’s apparent haste to phase-out MHF, before they can eliminate a conceptual option they have to do a proper risk assessment to establish what the risk baseline is and what further risk reduction is warranted. In other words, they must justify their actions and decisions, not make arbitrary decisions without any scientific or technical review and support. Again, District staff has no experience in engineering, designing, and/or constructing Refinery process safety systems, and as a result, it should not being dictating and making arbitrary decisions as to what is considered safe or will provide risk reduction. District staff has informed TORC that the risk baseline for this PR 1410 rulemaking is Sulfuric Acid. However, for the Torrance Refinery, a Sulfuric Acid Alkylation unit is not and would not be any safer than the Torrance Refinery’s MHF Alkylation Unit. A quantitative risk analysis (“QRA”) following industry best practices was conducted as part of the City of Torrance Consent Decree process for the use of MHF at the Torrance Refinery. A QRA was chosen by the City, the Court, and industry-peers as an appropriate decision-making tool because a QRA is an industry standard evaluation tool which considers the likelihood, severity, and other relevant comparison factors that needs to be taken into account for rulemaking. The independent Court-appointed Safety Advisor reviewed, confirmed, and validated the conclusion of the QRA that “…the modified HF catalyst (including mitigation) [is] as safe or safer than a Sulfuric Acid alkylation plant producing a comparable amount of alkylate.” This finding is included in the Safety Advisor’s report to the Court, which approved the use of the MHF technology at the Torrance Refinery and forms the basis for the Consent Decree under which the Refinery operates the MHF Alkylation Unit.1 The QRA was subsequently re-validated and updated in both 1998 and 2001 by the Court-appointed Safety Advisor. The combination of MHF, passive mitigation, and active mitigation in the MHF Alkylation Unit prevent a potential HF release from the Torrance Refinery. The District has never done a risk assessment comparing MHF to Sulfuric Acid. If the QRA associated with the Consent Decree shows that MHF is as safe or safer than Sulfuric Acid, then how can the District justify supporting a forced MHF phase-out, while completely disregarding a Tier III safety enhancement that provide real and valid risk reduction? The answer is the District is incapable of justifying an MHF phase-out without 1 See Documents 21 “Modified Hydrofluoric Acid Alkylation Process Assessment of the Off-Site Risk Impacts Associated with Modifications/Changes in the MHF Process” (March 1998) and 37A/B “Modified Hydrofluoric Acid Alkylation Risk Assessment” (October 1994) disclosed to the District on May 4, 2017 under Trade Secrets/Confidential Business Information. Attachment A TORC’s Comments and Responses April 27, 2018 -14- completely ignoring the regulatory and legal record and unit performance, includ ing both MHF Alkylation Units never having an offsite release in their combined 100 years of operating history. Fundamentally, since nothing is “Fail Safe,” why is District staff only focusing on MHF at these two Refineries when there are numerous other facilities within its jurisdiction, using ammonia, chlorine, HF and Sulfuric Acid that also pose risk of harm and exposure to workers and the public? Answer is that District appears to be establishing a new, incorrect, inequitable, and unprecedented rulemaking criteria through which only the potential hazard, regardless of the probability or risk, is taken into consideration. In other words, a “Zero Risk” criteria for MHF, but other materials within its jurisdiction that present risk of harm or exposure to workers and the public, can still have risk related to its operations. Slide 6 – TRAA’S RESPONSE TO INITIAL RULE CONCEPT In Slide 6, District staff presents what it understands to be TRAA’s position. TORC strongly disagrees with TRAA’s position and has made a concerted effort to explain to TRAA, District staff, elected officials, and other regulators why a forced MHF phase-out to Sulfuric Acid in four years, as proposed by TRAA, is not feasible and makes no sense for the Torrance Refinery or Refinery workers and the community from a safet y and environmental impact perspective. In fact, to address TRAA’s disingenuous misinformation campaign, we presented Governing Board members and District staff with copies of “Setting the Record Straight – the Truth About Torrance Refinery MHF,” which outlines in detail the multiple errors of TRAA’s analyses. As noted in Slide 3 above, TORC and TRAA representatives met on March 14, 2018, and we attempted to educate them on why Sulfuric Acid makes no sense; that emerging alkylation technologies are years away, if ever, from commercial viability; and that our focus was on evaluating feasible Tier II and Tier III safety enhancements that will provide real and valid risk reduction to further protect Refinery workers and the community. Slide 7 - KEY ISSUE #1 In Slide 7, District staff continues to confuse the issue by generally stating that “Refineries Assert They Cannot Convert To Emerging Technologies Because They Are Not Commercially Available And Proven.” Interestingly, TRAA’s position is that Sulfuric Acid is an “emerging technology.” It seems that District staff also seems to believe this by including Sulfuric Acid in its “RESPONSE” on this slide. If that is the case, then this shows staff’s lack of understanding and/or knowledge as to the current state of Alkylation technologies, and if so, is further evidence that staff does not have the current expertise to recommend what Alkylation technologies are currently commercially viable or proven. Attachment A TORC’s Comments and Responses April 27, 2018 -15- As we have explained to District staff on numerous occasions, Sulfuric Acid is a well-established, proven Alkylation technology that has been used in refining for decades, although in less Alkylation units than HF/MHF. Additionally, TORC has consistently stated that other than HF/MHF, Sulfuric Acid is the only other commercially viable and proven Alkylation technology. As highlighted above and discussed in detail below, TORC’s position on Sulfuric Acid is that for the Torrance Refinery building a new grassroots Sulfuric Acid Alkylation unit does NOT make process safety, environmental, or economic sense, especially in light of more than 100 years of combined operations without any offsite release of HF for both the Torrance and Wilmington refineries. Additionally, the use of Sulfuric Acid at the Torrance Refinery would contradict the City of Torrance Consent Decree in which a Los Angeles Superior Court has ordered the use of MHF at the Refinery. With regard to alternatives, as discussed in detail below, no emerging alkylation technology has reached the mature state of technological, economic, or commercial viability achieved by M/HF and Sulfuric Acid alkylation. Until a newer, safer technology is proven to be inherently safer than MHF or Sulfuric Acid alkylation, as well as reliable, feasible, cost-effective, and commercially viable on a similarly-sized commercial unit, and consistent with California’s environmental goals, the only viable option for the Torrance Refinery at this time is MHF, which is recognized globally as being safe and the newest, most advanced alkylation catalyst technology available today, which is why we have been required to use MHF under the terms of the Refinery’s Consent Decree with the City of Torrance for 21 years now. In Slide 7, District staff also states that, “[f]urther demonstration of emerging technologies at scale is desirable,” apparently referring to emerging alternative Alkylation technologies, adding this is not “desirable,” but “necessary.” Quite simply, TORC is a merchant refiner, and this request is outside our core business focus and would require a third-party sponsor/partner. We are not a research and development company. After 30 or 40 years of development, we are aware of two emerging alternative Alkylation technologies: solid acid and Ionic Liquid Acids. Since these technologies are already in development, with significant resources invested in them by licensors that develop these technologies, it makes no sense for TORC to try and “re-invent the wheel” on this development. As discussed below, based on our thorough review and our discussions with licensors of these technologies, we understand there may be one or two low-volume Sulfuric Acid Catalyst Alkylation units in China associated with petrochemical plants. These units have different feedstocks than refineries and reportedly have had trouble regenerating catalyst. We note that Honeywell’s UOP dropped their multi-decade effort to commercialize solid acid alkylation perhaps ten years ago. Chevron reported to attendees at Working Group #4 meeting on the prospects for its Ionic Liquid Acid technology. More recently, Chevron sources have advised us the company has yet to break ground on their proposed relatively small-scale Ionic Liquid Acid unit in Salt Lake City, Utah. One speculative issue with the safe operation of this type of Alkylation technology (i.e., liquid acid) is it Attachment A TORC’s Comments and Responses April 27, 2018 -16- extremely corrosive and requires exotic metallurgy, which will be a key point of continuing attention if the unit is built. While research and development companies pursue alternative Alkylation technologies within their core business, our focus is on running the Torrance Refinery and its MHF Alkylation Unit safely, reliably, and in an environmentally responsible manner. Emerging technologies present their own risks, even at low volumes, both from a process safety, reliability, and environmentally beneficial perspective, which the licensors of the technologies are best suited to vet before representing they are commercially viable and/or proven for the scope and size of the Torrance Refinery MHF Alkyl ation Unit. In slide 7, District staff also states that a proposed MHF phase-out under PR 1410 could include “[p]articipation of refineries in demonstration projects.” Again, TORC is a merchant refiner and has no expertise in process research and development. Additionally, both emerging Alkylation technologies are at preliminary stages of development we see as too premature for us to risk becoming involved in, even at low volumes, or they are focused on petrochemicals, rather than refining. Nor have we been asked to participate in any such development, and quite frankly, they both appear to have evolved beyond “demonstration plant” scale. Also, if we are forced to phase-out MHF alkylation, there is no incentive to adding new costs by being involved in the development of an emerging alternative Alkylation technology. To be clear, there are no real criteria for participating in research and development pilot plants or demonstration projects. The research and development companies that are involved may have partners that have a stake in developing the new process, as we see with Honeywell/UOP and Chevron. Even though both companies were working on the Ionic Liquid Acid technology in parallel, they joined forces, with UOP becoming the licensor and Chevron planning to build the first small-scale unit at their Salt Lake City Refinery. Slide 8 – STATUS OF TECHNOLOGIES In Slide 8, District staff factually misrepresents the number of refineries with Sulfuric Acid Alkylation units. We understand there are 39 refineries in the U.S. that use Sulfuric Acid Alkylation technology, and 50 refineries in the U.S. that use HF/MHF Alkylation technology, so obviously the number of units was switched. In Slide 8, District staff also misrepresents the status of emerging alternative Alkylation technologies to apparently give the impression these fledgling processes are close to commercial viability or being proven in the next six to eight years in order to reinforce its predetermined MHF phase-out period being proposed in Options A and B, respectively. In Slide 8, District staff specifically lists the status of the following Sulfuric Acid Catalyst and Ionic Liquid Acid technologies that are under development: Attachment A TORC’s Comments and Responses April 27, 2018 -17- Emerging Technologies o Solid Acid Catalyst Alkylation being used at a petrochemical plant in China – Application is 2,700 bpd in 2015 o Ionic Liquid Catalyst at Chevron Salt Lake City refinery in Utah – 5,000 bpd HF Alkylation conversion 2017 to 2020 As TORC has repeatedly stated to District staff, PBF Energy Inc. (“PBF”) has been evaluating alternative Alkylation technologies since announcing the acquisition of the Torrance Refinery in September 2015. For example, to explore alternatives to alkylation, PBF and TORC have met separately with experts from Honeywell/UOP, Stratco/DuPont, Burns & McDonnell (“B&McD”), KBR, and CB&I, as well as independent Alkylation experts, to explore Alkylation alternatives. To date, the result of these technological evaluations, meetings, presentations, and discussions is that there is no commercially viable, cost-effective, or safer alternative to MHF Alkylation technology available today. This is borne out by the fact that nothing in any of the presentations by the licensors of exiting Sulfuric Acid and alternative Alkylation technologies at the August 2nd Working Group #4 and August 23rd Working Group #5 meetings supports the commercial viability of alternative Alkylation technologies, yet District staff continues to push these concepts as if they are viable, primarily as a means of fulfilling their publicly-stated predisposition to phase-out MHF Alkylation while allowing other forms of HF to be used throughout the District. For example, at the August 2nd Working Group #4 meeting, CB&I and Chevron presented their alternative Alkylation technologies. TORC’s take away from CB&I’s presentation2 and subsequent discussions with CB&I regarding its CDAlky® and AlkyClean® Solid Acid Catalyst technologies follows: There is only one small unit in a petrochemical plant in China - 2,700 barrels per day (“BPD”). CB&I confirmed there is NO commercial plant in the U.S. CB&I confirmed that AlkyClean® technology is the first and only commercialized Solid Acid Alkylation technology in the world.3 Operating details, product quality, run length and turnaround interval, catalyst regeneration, and feedstocks are currently unknown. We have been told recently by representative of one of the licensor of Solid Acid Catalyst technology that it has had plugging issues with its China demonstration project and will likely need to go back to the drawing board on how to address. 2 CB&I’s Presentation – “Advanced Alkylation Technologies: CDAlky® and AlkyClean®” (August 2, 2017). 3 This patently contradicts the baseless, unfounded, claims that an HF unit in the UK had been converted to Solid Acid Catalyst Alkylation, made by the District’s “expert,” Glyn Jenkins, Bastleford Engineering, at the District’s April 1, 2017 “Investigative Hearing.” We note for the record the District has removed Mr. Jenkins’ erroneous presentation from the hearing website and that his firm, Bastleford Engineering, has gone into receivership/bankruptcy. Subsequent to the hearing, we checked with the CEO of the refinery’s co-owner, a labor leader who’s Union represents workers at the refinery, as well as various other reputable sources, all of whom refuted Mr. Jenkins claims. Incidentally, all of the alkylation units operating in U.K. refineries use HF as their catalyst. Attachment A TORC’s Comments and Responses April 27, 2018 -18- CB&I confirmed that all units on their “Commercial Experience List” are Sulfuric Acid Alkylation units. CB&I conceded that no pilot or demonstration units for an HF/MHF conversion exist. CB&I indicated that they may be able to design an HF/MHF conversion. CB&I conceded such a conversion would be a little more expensive than a conventional Sulfuric Acid conversion, but definitive cost information is currently unknown. Testimony at the District’s April 1, 2017 Refinery Investigative hearing about European refinery converting to Solid Acid Catalyst has been proven to be false via multiple sources in the UK, including labor.4 On August 9, 2017, one week after the Working Group #4 meeting, CBI announced the sale of the company’s technology business, which is responsible for alkylation processes.5 On February 2, 2018, Valero announced their plans to build the first U.S. model of CB&I’s CDAlky® unit at their St. Charles Refinery which is reported to be a 25,000 BPD unit with a cost of $400MM, based on Gulf Coast pricing. Based on the foregoing, TORC remains convinced there is no commercially viable, cost-effective, or safer, reliable Solid Acid Catalyst technology, including CB&I’s technologies, currently available or expected to be available in the foreseeable future. TORC’s take-away from Chevron’s presentation (“Isoalky™ Technology: Next Generation Alkylate Gasoline Manufacturing Process Technology” (August 2, 2017)) and recent discussions with UOP the licensor regarding its Isoalky™ technology follows: Chevron stressing that its existing HF Alkylation Unit at its Salt Lake City Refinery had not had any safety issues, injuries, or offsite impacts associated with the unit’s operation. Chevron technology is still only in demonstration phase. Plans to design and build a 5,000 BPD unit at its Salt Lake City Refinery in 2020 – “Model No. 1, Serial No. 1”. o 2020 is the projected startup of the unit and according to a September 18, 2017 letter 6 to the District from licensor UOP, the unit to be built will take at least five to six years to prove this technology is safe, reliable, and commercially viable. o The Torrance MHF Alkylation Unit is ~6 times larger at ~30,000 BPD. In response to a question, Chevron provided limited information regarding its proven capability to scale up to the size of the Torrance Refinery’s MHF Alkylation Unit, and referred to the licensor, UOP, for this information. Chevron indicated that technology cost would likely be on par with conventional Sulfuric Acid Alkylation; however, the liquid ionic catalyst is reportedly extremely corrosive and expected to require expensive, exotic metallurgy. 4 See footnote 3 above. 5 See http://cbi2016ir.q4web.com/news/press-release-details/2017/CBI-Announces-Intent-to-Sell-Technology- Business/default.aspx. 6 See http://www.aqmd.gov/docs/default-source/rule-book/Proposed-Rules/1410/1410-comment-letters/honeywell-letter- to-scaqmd-9-18-17.pdf?sfvrsn=6. Attachment A TORC’s Comments and Responses April 27, 2018 -19- Chevron’s representative clarified that although their technology is “commercially available,” the process has not been commercially proven and would not be commercially proven until the 5,000 BPD unit in Salt Lake City was built and operated for some indeterminate period of time. o TORC believes that two turnarounds cycles are needed to determine if the technology is sa fe and reliable, which is consistent with UOP’s previously-cited letter to the District dated September 18, 2017. o Chevron conceded that a refinery would need additional plot space for the unit. Chevron indicated that although it believes its technology is safer than Sulfuric Acid Alkylation, the company representative indicated it has no plans to convert its two Sulfuric Acid Alkylation units in California using this technology. Based on the foregoing, TORC is convinced there is no commercially vi able, cost-effective, or safer Ionic Liquid Acid technology, including Chevron’s technology, currently available or expected to be available in the foreseeable future. At the August 23rd fifth Working Group meeting, DuPont presented their ConvEx SM HF Alkylation Conversion Technology. TORC’s take away from DuPont’s presentation (“DuPont Clean Technologies” (August 23, 2017)) regarding this conversion technology follows: Merely a concept - DuPont has only completed paper case studies. No pilot or field testing. No conversion has ever been undertaken. DuPont’s order of magnitude cost estimate based on Gulf Coast pricing, without detailed engineering. o Cost estimate excludes scale-up or outside the battery limit (“OSBL”) costs for critical refinery systems such as supplying utilities; e.g., electric power, sewers, water, etc. o Cost estimate excludes spent acid regeneration. Construction of an onsite unit or capacity in an offsite third-party unit would be required to regenerate Sulfuric Acid, a process based on incineration that creates criteria pollutants. Encouraging additional emissions from incineration runs contrary to the District’s air quality goals. Additional plot space and metallurgy changes would be required. New, expansive infrastructure required (i.e., cooling, utilities, etc.). Potentially need new refrigeration unit with large compressors. Acid consumption is more than double that of an HF/MHF unit. TORC feedstocks would require higher acid consumption if we adopted sulfuric acid alkylation, to produce similar amounts of alkylate product. Based on the foregoing, TORC still believes there is no commercially viable, cost -effective, ConvExSM technology currently available or expected to be available in the foreseeable future. Notably, to our knowledge, District staff has failed to pursue an evaluation of emerging alternative Alkylation technologies to determine whether any may ever become safe, reliable, and proven to be commercially viable at scale in the time periods staff is proposing as part of its Option B. In any evaluation by staff of these technologies, TORC concurs with Valero that CB&I, Chevron, UOP, and DuPont, Stratco, as well as other licensors of emerging alternative Alkylation Catalyst technologies the District may be investigating should provide following information in order for the District and Attachment A TORC’s Comments and Responses April 27, 2018 -20- the targeted regulated entities – TORC and Valero – to understand the fundamental viability, safe operating envelope, evolutionary status, impacts, and costs of these technologies: 1. Name of Licensor? 2. Name of process technology - both technical and commercial if there are differences? 3. Date existing unit was put into operation, if one exists? 4. Location of existing alkylation unit, if one exists? 5. Does the location have a parallel alkylation process of equal or greater size? 6. Definition of unit: demonstration unit, bench scale, pilot scale, intermediate scale, full scale, etc.? 7. Specific feed composition (C4= only, specific C4=, C3=, C5=, other limits)? 8. Olefin feed rate to unit? 9. Iso-Butane feed rate to unit, or other paraffin(s) consumed? 10. Special product treatment / pre-treatment for any product streams such as propane, butane, alkylate? 11. Type of feed pre-treatment used? 12. If no specific feed treatment is implemented, what are the acceptable feed contaminant levels such as water, sulfur, diolefins, other? 13. Type of acid catalyst used and supplier(s)? 14. Alkylate product rate from unit? 15. Alkylate product quality: RON, MON, sulfur, EP, etc.? 16. Corrosion history of equipment and piping? 17. Specialty items: high grade alloy piping, construction requirements, long lead time equipment, etc.? 18. Does the unit include acid regeneration? a. If so, how is that performed? b. If not, how is the catalyst regenerated? c. Can the catalyst be regenerated onsite? d. What is the cost of regeneration? e. How often does the “spent” acid need to be replaced? f. Are there known or suspected technical challenges with regenerating the catalyst? 19. What is the plot space for the largest existing unit you have built? 20. What is the estimated plot space for a unit of approximately 30 MBPD of alkylate production, including any required regeneration facilities, utility substations, etc.? 21. What are the results of any Process Hazard Analysis, QRA, and/or Societal Risk Index Analysis conducted on the unit? 22. Were environmental impact reviews performed in connection with permitting the unit? If so what were the results of that review? 23. What is the energy consumption associated with the unit -- MMBTU/per barrel of alkylate, or similar measure? 24. What emissions, waste streams / material are generated from the unit and do they require special treatment and/or disposal? 25. What is the average/longest/shortest run length been between required / scheduled Maintenance and Inspection? Is this consistent with projected Turnaround cycles? Attachment A TORC’s Comments and Responses April 27, 2018 -21- 26. Does the unit have a history of mechanical breakdowns, corrosion or reliability issues, etc.? 27. What is the estimated cost for a 30,000 BPD (alkylate production) unit and related Outside Battery Limits systems, based on permitting and construction costs in Southern California, including meeting all regulatory requirements, California union labor rates (i.e., prevailing wage), and other anticipated costs? 28. What types of regulatory requirement would the licensor anticipate complying with in Southern California, based on the Alkylation technology, and what is their estimate of the time required to obtain all necessary permit approvals? Importantly, as further discussed below, any evaluation by District staff of these emerging technologies, must not conflict, be inconsistent, or add any additional burdens to what refineries are currently required to comply with under existing state regulations. For example, California refineries are already required to look at inherent safety measures under the recently enacted Process Safety Management (“PSM”) regulations (Title 8 California Code of Regulations (“CCR”) §5189.1(l)) adopted by the CalOSHA and new California Accidental Release Prevention (“CalARP”) Program 4 regulations (Title 19 CCR §2762.13) adopted by the Office of Emergency Services (“CalOES”). As TORC stated in its August 1st, August 23rd, and September 20th, and February 6, 2018 letters, and re-emphasized here, before even considering transitioning from MHF Alkylation to an alternative Alkylation technology at the Torrance Refinery, the new, emergent technology must be commercially viable in scope and scale to the Torrance Refinery’s existing MHF Alkylation Unit, and must be inherently safer than MHF Alkylation. Accordingly, these technologies: Are many years away from being commercially proven, safe, reliable and available; Environmental impacts and process safety operations are unknown; and Will cost as much as, and perhaps more, than a conventional new grassroots Sulfuric Acid Alkylation unit. A switch from MHF to any unproven Alternative technology, or one that has no additional safety benefits, such as Sulfuric Acid, make no sense on many fronts. There are no other commercially viable, proven alternative Alkylation technologies at this time. As explained in detail by the CEC, at the September 20th PR 1410 Working Group #6 meeting, both the Torrance and Wilmington refineries could be economically harmed if forced to phase-out MHF in favor of an Alkylation technology that offers no real safety advantage, is not commercially viable or proven, and cost- prohibitive. To be considered commercially viable, at a minimum, the emerging alternative Alkylation Catalyst technologies need to be constructed at scale and run at California standards through two four-year turnaround cycles, which will establish baseline operating and reliability data, before their commercial viability can be determined. Attachment A TORC’s Comments and Responses April 27, 2018 -22- Slide 9 – KEY ISSUE #2 In Slide 9, District staff misrepresents TORC’s position for not supporting a potential MHF phase-out to Sulfuric Acid by incorrectly stating the “Refineries Cannot Support A Phase-Out Because Conversion To Sulfuric Acid Will Not Generate Any Return On Investment.” Staff conveniently omits the other three critical reasons why TORC is not supportive of Sulfuric Acid, which it believes are even more important than the economics of a new grassroots Sulfuric Acid Alkylation unit. As discussed in detail above and as TORC has repeatedly informed District staff on numerous occasions, for the Torrance Refinery Sulfuric Acid makes NO sense. The use of Sulfuric Acid at the Torrance Refinery is not any safer and will create more environmental impacts than MHF. Additionally, the use of Sulfuric Acid is inconsistent with City of Torrance the Consent Decree, which requires the use of MHF at the Torrance Refinery. What is telling in this slide and evidences that District staff are rushing to present to the Refinery Committee on April 28th a predetermined outcome for the PR 1410 rulemaking in the form of two options, both of which result in a forced MHF phase-out, is the lack of any appropriate and publicly available Socioeconomic Analysis regarding the economic impacts for an MHF phase-out. Case in point, in Slide 9, staff states that “the decision to phase-out MHF should consider public safety and health effects” and it is “[d]ifficult to quantify the financial impact of the risk associated with an off- site release of MHF.” District staff should not be presenting such a predetermined outcome, but must , as mandated by statute, first conduct the appropriate analysis to allow the Refinery Committee, and ultimately the Governing Board, to make an informed decision related to any potential MHF phase-out. Slide 10 – SULFURIC ACID ALKYLATION COST ESTIMATES In Slide 10, District staff continue to present the Norton Engineering “Alkylation Technology Study, Final Report” (September 9, 2016) (“Norton Report”) as representing the realistic cost of constructing a new grassroots Sulfuric Acid Alkylation unit in Southern California. More egregiously, staff blatantly misrepresents in this slide that “SCAQMD staff and Norton Engineering agree post processing replacement not needed for conversion -- Estimated Cost: $300 Million.” (See slide excerpt below as to where the alleged cost savings could occur on the “Post Processing” side with a phase-out to Sulfuric Acid). Attachment A TORC’s Comments and Responses April 27, 2018 -23- In a letter dated April 27, 2018, the day before the Refinery Committee meeting, Norton Engineering rebukes staff’s misrepresentation by stating: “The assertion in the presentation that Norton Engineering agrees with SCAQMD staff that the post processing section of any particular the HF alkylation unit is suitable for use if the unit is converted to sulfuric acid is a misrepresentation of the conclusions in our report.” (See Norton Engineering Letter to Dr. Phillip M. Fine dated, “Comments on 4/28/18 Presentation to Refining Committee: Inaccurate Information Referencing Norton Engineering Report On MHF Conversion”, p.1; (emphasis added.)). Norton Engineering goes on to say: “While our report highlighted the equipment differences between typical HF and H2SO4 alkylation units, it was, by its very nature an overview or screening type of evaluation which noted that additional work would be required to more fully address the underlyin g assumptions used to develop any estimate of the actual costs for a conversion of an actual unit. Since Norton Engineering was not involved in developing additional information to determine if any of our underlying assumptions were applicable to any specific HF unit in SCAQMD’s regulatory area we cannot agree with the statement made on slide 10 of the presentation.” (See Id., pp. 1 and 2; (emphasis added)). The letter concludes: Norton Engineering does not know if the post processing section of the HF alkylation units at either TORC or Valero can be reused in part, in their entirety or at all. It would be more Attachment A TORC’s Comments and Responses April 27, 2018 -24- accurate for SCAQMD to revise slide 10 of the presentation to state that the assumption that the post processing sections of these two HF alkylation units can be reused in their entirety as the conclusion of SCAQMD staff and include another note stating that based on current information available, Norton Engineering does not agree with this conclusion. (See Id., p. 2; (emphasis added)). The assertion in the presentation that Norton Engineering agrees with SCAQMD staff that the post processing section of any particular the HF alkylation unit is suitable for use if the unit is converted to sulfuric acid is a misrepresentation of the conclusions in our report The complete text of the Norton Report also illustrates Staff’s misrepresentation: Some equipment dedicated to HF regeneration or removal from product streams (i.e. product defluorinators) would be removed from service in a conversion to sulfuric acid or solid acid technology, and although re-use of this equipment in the conversion may be possible, this has not been reviewed in detail in this phase of the evaluation. Similarly, a more detailed review of metallurgy utilized in an HF Alkylation unit and acceptable metallurgy in a sulfuric acid or solid acid system would have to be conducted to more rigorously identify all required upgrades and costs for a unit conversion. (See Norton Report, p. 6, (emphasis added)). Additionally, on page 16, the report states: Conversion of a HF Alkylation unit to a Sulfuric Acid Alkylation unit must include a thorough review of the entire unit in order to determine if any equipment can be re -used. It is expected that the Fractionation section of the HF Alkylation Unit may be able to be re-used, but further evaluation, especially of metallurgy requirements between the two technologies would need to be conducted (i.e. Monel, which is used in HF units, is not acceptable in sulfuric acid service). A conversation with DuPont Stratco team, along with an exhaustive review of the literature, suggested that there has never been a refinery in the US having gone through a conversion of an HF Alkylation unit to Sulfuric Acid Alkylation. (Id., (emphasis added); (references omitted); see also Norton Engineering’s Letter dated April 27, 2018, p. 1, quoting this section of the report). This is without question further evidence that District staff is rushing to present a predetermined outcome for the PR 1410 rulemaking with only two options to the Refinery Committee on April 28th, both of which result in a MHF phase-out, by blatantly misrepresented the report’s conclusion related to the use of “Post Processing” equipment in an attempt to reduce the cost of a new grassroots Sulfuric Acid unit at the Torrance Refinery. As is well known, the Norton Report has been repeatedly and thoroughly debunked, proven to significantly underestimate the cost of replacing MHF with Sulfuric Acid. As authenticated in its April 27, 2018 letter, Norton Engineering never visited the Torrance Refinery in connection with this Attachment A TORC’s Comments and Responses April 27, 2018 -25- study; Norton Engineering never confirmed the feasibility of constructing a Sulfuric Acid Alkylation unit at the Refinery; and has never presented the report to the PR 1410 Working Group or for that matter, any other public meetings to support their findings. Because of obvious, multiple shortcomings of the Norton Report, TORC retained B&McD to conduct a thorough cost analysis for constructing a new grassroots Sulfuric Alkylation unit at the Torrance Refinery. In terms of experience in the industry, B&McD is ranked #9 on the list of 2018 rankings of Top 500 Design Firms compiled by the Engineering News-Record. More specific to their estimate for the Torrance Refinery, the firm is working on Valero’s 13,000 BPD, $300 million Sulfuric Acid Alkylation unit under construction in Houston, Texas. In addition, a B&McD subsidiary rebuilt the Torrance Refinery’s ESP following the prior owner’s February 2015 incident. Accordingly, in addition to building Sulfuric Acid Alkylation units, they have recent experience working in Southern California, where regulations, labor costs, and other factors increase the cost of major projects over Gulf Coast prices. The B&McD “Report Brief Alkylation Study & Estimate” (July 2017) that TORC provided to the District on July 26, 2017 convincingly details the obvious shortcomings of the Norton Report by performing a point-by-point analysis of the Norton Report. Additionally, at the August 23, 2017 PR 1410 Working Group meeting #5, a representative from DuPont, owner of Stratco, the world-leading Sulfuric Acid Alkylation licensor, said they provided Norton Engineering with some of the cost estimates for their study, noting these estimates were based on Gulf Coast pricing and excluded scale- up, and OSBL costs for critical refinery systems, including utilities. As the District is keenly aware the B&McD’s Report Brief concluded that the total installed cost to build an equivalent capacity Sulfuric Acid Alkylation unit at the Torrance Refinery would be approximately $600MM.7 As the District was informed on July 26th and also noted in TORC’s August 1st and August 23rd letters, all in 2017, B&McD’s Report Brief excluded the cost of spent sulfuric acid regeneration. However, an global industry expert has advised TORC that the cost of a new grassroots spent acid regeneration plant of sufficient capacity to serve a Sulfuric Acid unit at the Torrance Refinery or upgrading an existing third-party spent acid regeneration facility could cost up to another $300MM, inflating the total estimate for a Sulfuric Acid unit and regeneration plant to approximately $900MM. Similarly, during DuPont’s presentation introducing their ConvEx SM HF Alkylation conversion technology at the August 23rd Working Group #5 meeting, DuPont testified that cost estimates for 7 The report specifically states: “The total installed cost for the new alkylation unit and associated infrastructure (outside the battery limits - OSBL) is estimated at nominally $600 MM, including an owner’s cost of $50 MM provided by PBF. This cost is comprised of $56 MM in direct bare equipment cost, $270 MM in additional direct costs associated with labor and materials and $226 MM in indirect costs. Indirect costs include engineering, construction management, escalation, contingency, and contractor fee. The contingency for this estimate was set at $110.6 MM which represents 20% of the total project cost.” This cost information must be included and thoroughly considered as part of the District’s PR 1410 CEQA and Socioeconomic analyses. Attachment A TORC’s Comments and Responses April 27, 2018 -26- this technology were also based on Gulf Coast pricing and excluded scale-up and OSBL costs for critical refinery systems like utilities. DuPont also noted that additional plot space and metallurgy changes would have to be considered to utilize this technology, while offering no cost estimate for an equivalent-sized unit. District staff must consider the consistent, serious flaws involving its estimated costs and project feasibility it has presented at PR 1410 Working Group and Refinery Committee meetings on new Sulfuric Acid units and alternative alkylation technologies before conducting a Socioeconomic analysis as part of the PR rulemaking. Otherwise, the District’s analysis will suffer the same underestimation of compliance costs and overstate the benefits of PR 1410 for what now appears to be a predetermined MHF phase-out. Case in point is District staff’s unsupported, low-ball $300 million cost estimate for a new Sulfuric Acid Alkylation unit for the Torrance Refinery, as indicated in Slide 10 of its April 28th Refinery Committee presentation. However, further review indicates there is no such dollar estimate in the Norton Report. Plus, the calculations appear inconsistent with valid construction cost estimating principles, especially for a refinery project, unlike those used in B&McD’s thorough and detailed cost analysis. For example: The Norton Report underestimates the cost of a new Stratco Sulfuric Acid Alkylation unit at ~$120M, without the required fractionation / post-processing. B&McD’s fractionation construction estimate alone is approximately $125M. Even if Norton’s $120 million estimate is subtracted from B&McD’s total estimate of $600M, the remaining amount is $475 million, well above the staff’s $300 million estimate. From what we can ascertain, it appears staff’s estimate was based on either of the following: o Ignore B&McD’s OSBL costs, subtract the fractionation cost and add owner’s costs back in; or o Take the Norton Report total estimate of $120M, add it to the B&McD’s OSBL estimate of $175M, and ignore owner’s cost. However, either of these approaches is patently incorrect, misleading, and it appears that staff is purposely lowering the cost of a new grassroots Sulfuric Acid unit to make its predetermined MHF phase-out more palatable to the Refinery Committee, full Governing Board, the public, and elected officials. The District’s staff’s lack of transparency regarding its cost esti mation for a new Sulfuric Acid unit is telling, and further reinforces the impression that staff are seeking to achieve a predetermined outcome to the April 28th Refinery Committee meeting. District staff does not have the expertise to design, engineer, and/or estimate the cost of a new Sulfuric Alkylation technology. Accordingly, District staff should be required to present the basis for its unsupported and low -ball estimate publicly, just like they required TORC to do in order for the Refinery Committee, and ultimately the Governing Board, to have real facts so they can make an informed decision regarding a MHF phase- out. Attachment A TORC’s Comments and Responses April 27, 2018 -27- Moreover, TORC has specifically commented to the District on multiple occasions that use of Sulfuric Acid Alkylation as a replacement for MHF Alkylation presents its own challenges and impacts that run counter to the District’s air quality goals. These issues have been previously documented to the District and ignored, so they are reinforced here for the record: Sulfuric Acid Alkylation introduces a set of risks and impacts that staff must fully evaluate to justify its use in alkylation, including: o Direct and indirect increases in criteria pollutants and GHGs based on the need to incinerate spent acid during the regeneration process. o Direct and indirect increases in criteria pollutants, GHGs, and toxic emissions (i.e., diesel particulates) from significant increase in truck traffic if regeneration takes place offsite. o Community risk from more leak sources due to more piping and significant increase in truck traffic if regeneration takes place offsite. o Disruptions of state and local gasoline supply based on extensive outages required for demolition, construction, and start-up and break-in of a new process unit. (See District’s Tesoro Los Angeles Refinery, Integration And Compliance Project, Final Environmental Impact Report (“Final EIR”), SCH No. 2014091020 (May 2017), Tables 4.2-4, 4.2-7, 4.3-2, 4.3-38, 4.4-1, 4.4-2, 4.6-1, and 4.10-1, for an example of the potential emissions, energy demands, risk, etc. for just the acid regeneration portion of a new grassroots Sulfuric Acid unit.) In comparison to Sulfuric Acid Alkylation unit, MHF Alkylation Units “alkylate” a wider range of feedstocks such as propylene (C3=) and amylene (C5=). These process “streams” increase acid consumption and lower alkylate product quality and yield when processed through Sulfuric Acid Alkylation units, including Octane values can also be lowered, which a technical dilemma that is becoming ever more important as automakers introduce higher compressions engines to increase miles per gallon, which requires octane, typically from alkylate. In fact, TORC’s MHF Alkylation Unit is flexible enough to convert a high percentage of C3= into alkylate for blending into CARB gasoline. Due to Sulfuric Acid Alkylation units’ high consumption of acid, these units require acid regeneration external to the processing unit to facilitate reuse of the acid. On the other hand, 8 Using the heavy duty truck emission factors from Appendix B of the Final EIR and assuming 1,440 truck trips per month with a round trip of 20 miles, the potential emissions and GHGs from transporting fresh and spent Sulfuric Acid from the Torrance Refinery to a regeneration facility in Southern California could be roughly; Pollutant lbs/hr lbs/day lbs/yr VOC 6.59E+00 1.58E+02 5.78E+04 CO 2.24E+01 5.38E+02 1.96E+05 NOx 7.49E+01 1.80E+03 6.56E+05 SOx 4.81E-02 1.15E+00 4.21E+02 PM 2.96E-01 7.11E+00 2.59E+03 CO2 1.62E+04 3.90E+05 1.42E+08 Attachment A TORC’s Comments and Responses April 27, 2018 -28- while MHF Alkylation regenerates the acid within the existing unit. Plot space requirements for Sulfuric Acid Alkylation Units and regenerating facilities are significant; sufficient plot space may not be available at existing refineries and/or may require demolition of existing process units and/or structures, further complicating matters for the refineries. Sulfuric Acid Alkylation units require onsite storage of as much as 200 times more catalyst than HF alkylation units. In addition, if there is insufficient funding and/or plot space to construct an onsite acid regeneration plant, conversion of an MHF Alkylation unit to shipping spent sulfuric acid alkylation to an offsite regeneration plant would increase local truck traffic shipments from six trucks per month to approximately 1,440 truck trips per month in Torrance and surrounding communities, an increase of ~240 times compared to current MHF Alkylation Unit requirements. This would require shipping highly-toxic, spent Sulfuric Acid to the regeneration plant and then the delivery of fresh regenerated acid back to the Alkylation unit for reuse. Increased truck traffic would result in corresponding increases in mobile source emissions unaccounted for in the Norton Report, as well as increased risks to the community along the transport route(s) because spent Sulfuric Acid is classified in the same group of toxic hazards as HF. If such the additional truck traffic related to the introduction of Sulfuric Acid Alkylation is unacceptable to the community along the truck route(s) due to increased congestion, mobile source emissions, and increased transport risks, then the transport of fresh and spent Sulfuric Acid would have to be done shipped via new pipelines to separate newly-built, offsite regeneration facilities and/or existing offsite regeneration facilities, which would have to be upgraded to handle the increased in acid for regeneration. Despite activist’s claims, there are no available Sulfuric Acid pipelines between Torrance and the nearest Southern California regeneration plant. Needless to say, obtaining permits and rights-of-way to build a new pipeline for the shipping of spent acid represents a multi-year effort with little chance of success. Compared to a MHF Alkylation Unit, a new grassroots Sulfuric Acid Alkylation unit requires more energy to operate. Specifically, a MHF Alkylation Unit has lower power needs due to its unique design – does not need refrigeration compressors or an incinerator for spent acid, and requires fewer pumps/mixers. As a result, a new Sulfuric Acid Alkylation unit would increase criteria pollutants and GHGs from the energy supplied and used to operate the unit. Despite all the uncertainty, if permits were granted for a new grassroots Sulfuric Acid Alkylation unit, constructing a new unit at either of the two Refineries would require extended refinery outages to complete. (See TORC letter to District Executive Officer Wayne Nastri, entitled, “Norton Engineering Alkylation Technology Study, related to the use of Hydrofluoric Acid in Refinery Alkylation Units” dated December 8, 2016). Replacing MHF Alkylation technology with Sulfuric Acid Alkylation technology would be an extremely complex undertaking and cost prohibitive. What the District also conveniently omits in its presentation related to the Norton Report, is the report’s highlighting of hazards and safety issues associated with the use of Sulfuric Acid. In Section 4.5 of the report, Norton Engineering states that: Attachment A TORC’s Comments and Responses April 27, 2018 -29- Sulfuric Acid at concentrations above 85 wt.% H2SO4 is a corrosive and hazardous material, and can cause serious burns to exposed tissue. The “immediately dangerous to life and health” (IDLH) limit for Sulfuric Acid from the National Institute for Occupational Safety & Health (NIOSH) is 3.75 ppm. Sulfuric Acid has higher boiling point (626°F) and lower volatility than HF and is less likely to form an aerosol at atmospheric conditions. Tests on leaks of hydrocarbon/acid mixtures (as would be expected from an alkylation unit) showed that on average 97.6% of the leaking acid was recovered (i.e., would have fallen to the ground) – the remainder (2.4%) was believed to have been suspended on hydrocarbon “bubbles” and could travel and impact areas outside the alkylation unit. The facility will require strict controls to contain an acid leak and must have in place the correct PPE and procedures to handle sulfuric acid to prevent chemical burns and corrosion. Typically Sulfuric Acid Alkylation units in the U.S. do not include the same types of mitigation measures (detectors, rapid acid transfer, water mitigation systems) as HF Alkylation Units. Although Sulfuric Acid is not on the U.S. Environmental Protection Agency (“EPA”) list of regulated substances requiring a risk management plan (“RMP”), it is listed on the CalARP list of regulated substance “if in a container with flammable and/or explosive hydrocarbons”. Since the acid is contained in vessels that include alkylate, isobutane, and other light hydrocarbons, the sulfuric acid in alkylation units would need to be listed in a facilities RMP. The light hydrocarbons in an alkylation unit are on the EPA list of flammable and/or explosive substances and need to be included in the RMP for the facility. With the need for multiple reactor vessels and associated equipment in a Sulfuric Acid Alkylation unit, VOC emissions from fugitive equipment (i.e., valves, pumps, etc.) are expected to be higher than from an HF Alkylation Unit. (See Norton Report, pp. 20-21; (internal references omitted)). The California Energy Commission’s July 2017 presentation on “Transportation Fuel Issues” also explores the potential for replacing the MHF Alkylation with Sulfuric Acid Alkylation and the resultant need for refiners to obtain all necessary permits through the CEQA process before replacement work could commence, admitting “… the outcome of this process is uncertain” because of the possibility “… that such permits will ultimately be denied.” The report goes on to state that “[e]ven if permits are granted, (the) timeline could be extensive,” citing the Chevron Richmond Refinery modernization permit approval that took 9+ years. If that is the timeline of the PR 1410 rulemaking, permitting alone would extend the MHF phase-out beyond the arbitrary, proposed eight- year limit without the new Alkylation replacement unit being built, even if that were an option. According to the CEC, “If an HF ban were compelled it is uncertain if either or both companies would elect to make such changes to their facilities,” noting the agency is uncertain whether the cost of replacing the MHF alkylation “could be justified by either or both companies should an HF alkylation ban ultimately be approved by the SCAQMD.” Attachment A TORC’s Comments and Responses April 27, 2018 -30- Importantly, the District has never done a risk assessment comparing MHF with Sulfuric Acid alkylation, yet staff criticize and discount the risk assessment completed for the City of Torrance’s Consent Decree with Torrance Refinery, which shows that MHF Alkylation is as safe or safer than Sulfuric Acid Alkylation. Accordingly, without doing its own risk assessment, then how can the District justify supporting an MHF phase-out, while completely disregarding the hazards and safety issues associated with the use of Sulfuric Acid? The answer is District staff apparently predetermined that MHF Alkylation should be phased out. Lack of an appropriate risk assessment and CEQA analysis further buttresses the view that staff has created strawman for the PR 1410 rulemaking that the only option is a phase-out of MHF. Slide 11 - POTENTIAL BENEFIT OF NEW TAX CUT AND JOBS ACT In Slide 11, District staff without out any substantiating evidence or expertise in tax regulation opines on how the recently enacted New Tax Cut and Jobs Act passed by the U.S. Congress would benefit the Torrance Refinery, especially for constructing a new grassroots Alkylation unit. Specifically, staff asserts that the “New Tax Cut and Jobs Act – ‘full expensing’ provision allows the deduction of 100% cost of investments from taxable income in every year for up to five years ,” and as a result “cost of sulfuric acid alkylation approximately $300 million dollars – Amortized over 5 years,” and as a result, the “[e]stimated cost of sulfuric acid alkylation [of] approximately $300 million dollars [could be] [a]mortized over 5 years.” Staff provides the following table to represent how this could presumably be done: Clearly, a company will only realize tax benefits if income is earned, which is also required for funding the business in the base case. As is commonly known, refining is a capital intensive business and PBF Energy has four other refineries to fund, in addition to Torrance. If the District reviews the publicly-available financial information on PBF, summarized below, they would be unable to identify an extra ~$900 million in cash flow to fund an unjustifiable, unnecessary replacement Alkylation unit at the Torrance Refinery. District staff have opined but failed to justify replacing either MHF Alkylation units and there is no reason for the refineries to replace two process units that have been operating for a combined 100 years without an offsite release of either HF or MHF. Attachment A TORC’s Comments and Responses April 27, 2018 -31- In Slide 10 of the CEC presentation given at the Working Group #6 meeting in September 2017, the agency noted the business model for “Capital Approval for Projects:” Refining companies have specific guidance for capital expenditures o Non-discretionary - Maintenance & dividends o Discretionary - Projects, acquisitions & stock buy-backs o Limits of total capital expenditures - CAPEX Consistent with CEC’s understanding of refining capital expenditures and PBF Energy’s corporate structure, assets, and balance sheet, we note: PBF is a merchant refiner that manufactures, transports, stores, and sells fuels at wholesale o PBF earns money on margins realized from selling fuels to wholesale customers PBF has a different business model and capital structure than fully-integrated oil companies like ExxonMobil, Chevron, Shell, or BP o Unlike these “supermajors,” PBF has no exploration , production, or retail marketing assets o PBF has five refineries, including Torrance, that share in the earnings of the company Even though last year was profitable for PBF Energy, when funds were divided between the five refineries there was no remaining free cash flow Torrance’s share of the profits is enough to operate the Refinery, but not enough to pay for a large, unjustified capital investment such as a new Alkylation unit To benefit from recent tax breaks PBF Energy must earn a profit o Any tax benefit would only provide a small amount of additional discretionary income It would not be enough to pay for a large capital investment such as a new Alkylation unit with no return on the investment -- would not improve Refinery yield or make the Refinery more productive Such a large, unjustified capital investment for a new Alkylation unit is unlikely to be passed on to consumers o Only two of the five Alkylation units in Southern California are targeted for replacement o Refiners with Sulfuric Acid Alkylation would realize a competitive advantage Upcoming regulatory obligations are expected to cost the Refinery hundreds of millions of dollars, making a new Alkylation unit with no return on investment even more difficult to justify In Slide 10 of the CEC presentation given at the Working Group #6 meeting in September 2017 , the agency explained the reasoning behind “Capital & Business Logic” in simple terms: You own a mid-size car with financing payments for another three years o Would a bank loan you money to replace your working transmission that amounted to a sum greater than the value of your vehicle? PBF US Equity 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Net Income / Net Profit (Losses)40 (38)146 171 416 Operating Expenses 1,028 1,206 1,282 1,823 2,193 Selling, General and Administrative Expense 104 144 181 166 215 Capital Expenditures (383)(614) (408) (596) (686) Cash From Operations 291 456 560 652 686 Free Cash Flow (92)(158)153 56 0 Free Cash Flow Yield -9.0%-8.0%4.7% 2.0% 0.2% Attachment A TORC’s Comments and Responses April 27, 2018 -32- o Probably not You own a 3 bedroom home with 20 years remaining on your mortgage o Would a mortgage company loan you money to replace your working HVAC system that amounted to a sum greater than the assessed value of your home? o Probably not You own a complex refinery in Southern California o Would a board of directors agree to commit discretionary capital to replace your working alkylation process unit that amounted to a sum greater than the resale value of your entire refinery and had a negative internal rate of return (“IRR”)9? o Probably not CEC’s simple model above shows clearly that funding an Alkylation unit makes no sense, without even considering other factors such that Sulfuric Acid Alkylation makes no sense and there are no currently viable, proven emerging alternative Alkylation technologies. Accordingly, retaining MHF Alkylation, which is considered to be safe, reliable, and the most recent advance in alkylation technology, and focusing on Tier II and Tier III safety enhancement to further reduce risk and protect Refinery workers and the community, is the only reasonable and feasible current option. Also in Slide 11, District staff misrepresents the Torrance Refinery’s recent Spring 2017 turnaround by stating “TORC’s most recent turnaround cost was more than $250 million – Extraordinary turnaround that included the majority of its refinery process units.” This turnaround did not include the majority of the process units at the Refinery. This turnaround specifically addressed the Crude Unit, Hydrotreater, Hydrocracker, Pretreater, South Coker Units, and Flare system. Moreover, District staff in making this statement, coupled with its prior statements in this slide, seems to imply that because TORC spent approximately $250M on this turnaround that it can easily spend $300M on a new Alkylation unit. However, staff’s bogus $300M estimate has been rebuked as a mischaracterization of the Norton Report. (See Norton Engineering Letter to Dr. Phillip M. Fine dated, “Comments on 4/28/18 Presentation to Refining Committee: Inaccurate Information Referencing Norton Engineering Report on MHF Conversion”). Therefore, staff’s estimate is unsupported. As discussed above, a realistic cost estimate of a new grassroots Sulfuric Acid Alkylation will be $600M to $900M, depending if a Sulfuric Acid regeneration unit is required. Also discussed above, a new grassroots alternative Alkylation technology unit, assuming one will ever be commercially viable and proven, will be in the same range of cost as a new grassroots Sulfuric Acid Alkylation unit. Perhaps the most concerning thing about District staff’s statement here is that staff seems to be implying that TORC could forgo future turnarounds, and instead, spend this money on constructing a new grassroots Alkylation unit. If that is District staff’s perception and/or intent, then this further 9 A negative IRR means that the sum of post-investment cash flows is less than the initial investment; i.e. the non- discounted cash flows add up to a value which is less than the investment. Attachment A TORC’s Comments and Responses April 27, 2018 -33- illustrates that staff lacks knowledge regarding equipment maintenance at a refinery or petrochemical facility that is mandated by federal and state statutes and regulations and is not really concerned about reducing risk to the Refinery workers, community and the public at large. Foregoing necessary, needed, and process safety mandated turnaround maintenance creates far more risk to the community and the public than an MHF Alkylation Unit with its redundant safety systems, especially in the case of the Torrance Refinery, which its Alkylation Unit has never had an offsite release of HF/MHF in its 51 years of operation. Slide 12 - KEY ISSUE #3 In Slide 12, District staff downplays the fact that its PR 1410 conceptual rulemaking “That Affects Only 2 Refineries” will “Give[] A Market Advantage To The Other Refineries And Will Increase Gasoline Prices” if MHF is phased-out. Remarkably, staff again fails to provide any research or report that supports their position, in stark contrast to and often contradicted by the CEC’s 2017 IEPR process. The CEC is required by state statute (B 1389, Bowen and Sher, Chapter 568, Statutes of 2002) to issue such an IEPR every two years, with an update every other year. In the IEPR, CEC staff highlights issues that have the potential to impact supply and availability of transportation fuels over the near to mid-term period, including those that have greater potential for supply impacts. CEC’s IEPR process is intended to properly characterize these potential issues, as well as to bring other relevant concerns to the forefront through submittal of comments and material, which is provided through reports and presentations like those CEC issued in July and September 2017. Despite CEC’s findings and projections featured in its 2017 IEPR process, as well as market realities, District staff in its “RESPONSE” in Slide 11 states that: Any impacts would be temporary Can incorporate a staggered implementation schedule to reduce supply impacts, if any Planned phase-out is different than an unplanned shutdown – less disruptive o Refineries can stockpile or purchase alkylate to minimize downtime Future California gasoline demand projected to decrease minimizing potential supply impacts, if any (Footnote omitted.) Regarding staff’s first point on temporary impacts, the CEC in its July 26, 2017 “Transportation Supply Issues” expresses concern that “the incremental impacts on gasoline costs for consumers and businesses could be as bad as or worse than those … experienced for the duration that the Torrance ESP was out of operation.” In terms of further impacts from both Refineries shutting down, the CEC July 2017 presentation also adds that, “Loss of alkylation output (and reduced production from other refinery process units) will decrease local supply of gasoline (and other refined products) for a period of at least two years.” They also expect gasoline prices “… to be worse than those associated with the ExxonMobil ESP explosion” when “[g]asoline prices averaged 26 cents per gallon greater than Attachment A TORC’s Comments and Responses April 27, 2018 -34- normal for 17 months” which “[e]quates to incremental costs of $5.6 billion for motorists & businesses.” In its July 2017 presentation, the CEC communicated their analysis of the threat posed by a PR 1410 conceptual framework including an MHF phase-out, noting that: “[i]ssues are highlighted that have the potential to impact supply and availability of transportation fuels over the near to midterm period. In support of its analysis, the CEC states: If an HF ban were compelled it is uncertain if either or both companies would elect to make such changes to their facilities o Alkylation process unit projects are extremely expensive A recent project approved for the Valero Houston refinery is estimated to cost $300MM for an Alkylation unit with a capacity of 13,000 barrel per calendar day These Alkylation Unit capacities at the Torrance and Wilmington refineries are each nearly twice this capacity, meaning the potential costs for such projects at the two California refineries could, at a minimum, easily approach or exceed $500MM per facility o These estimated costs for such a replacement project could be at or near the value of the refinery when one considers that ExxonMobil sold the entire Torrance Refinery to PBF Energy for $537.5MM It would therefore be uncertain as to whether such an expenditure could be justified by either or both companies should an HF alkylation ban ultimately be approved by the District For the record, the $537.5 million price tag noted by CEC includes the Torrance Refinery, as well as a vast pipeline network, several terminals, and other logistical assets throughout Southern and Central California. In terms of market dynamics and the CEC, the Refining Committee should consider the following points, which are based in part on current research by Stillwater Associates: 1. PBF is a major supplier to low-price gasoline retailers. 2. If the District forces the refineries to phase-out MHF Alkylation, as previously noted CEC forecasts that both the Torrance and Wilmington refineries will shut down. 3. With Wilmington and Torrance shut down, the Southern California refining industry would have only three competitors, two of whom would control 80% of regional capacity. 4. With Torrance shut down, the refinery’s former customers - low-price gasoline retailers - will have to buy fuel from local refiners whose gas stations compete with low-price retailers. 5. Gasoline, jet fuel, diesel fuel and propane will have to be imported to make up production shortfalls. 6. Retail gasoline prices would increase based on reduced suppl y options, exacerbated by the limited number of refineries outside California that can manufacture CARB gasoline. 7. Even if CEC’s gasoline demand forecast is right, the market would have to rely on gasoline imports in 2023 to meet demand. Attachment A TORC’s Comments and Responses April 27, 2018 -35- 8. Slide 12 ignores the consensus forecast that jet fuel and diesel demand will continue to grow.10 The economy depends on airplanes and trucks. Can Jet fuel imports be doubled from today? 9. According to Stillwater - “Bottom line: the gasoline market will be left to a few local competitors and exposed to shortages, raising gasoline prices as they were raised in 2015.” 10. All fuel demand forecasts are heavily influenced by government regulation and oil price assumptions (See Stillwater Associates, LLC “Impact of an HF Ban on Southern California Transportation Fuels Supply” (June 23, 2017)). In this shutdown scenario forced by the District, supply lines will be extremely long … exposing the Southern California fuel supply system to delays and disruptions: (Id.) The considerable loss in gasoline, jet fuel, and diesel supply in PADD V would shift the market from excess production to a shortfall, especially in gasoline. Id. The resulting effect on spot, wholesale, and retail gasoline sales in California would conservatively increase gasoline prices b y 25 cents per gallon (“cpg”), which is the amount attributed to the 2015 shutdown of most of Torrance Refinery. Stillwater estimates that other environmental mandates, like California’s Low Caron Fuel Standard and Cap and Trade program, would cost California consumers an additional 28 cpg in 2020. Id. When the impact of shutting down two refineries and the estimated regulatory-driven increases are combined, the impact would raise California gasoline prices by 53 cpg, costing consumers an additional $7 to $8 billion annually, so we can forecast retail gasoline prices will increase in the future: 10 See CEC’s “Transportation Energy Demand Forecast”, CEC-200-2017-010 2018-2030 (November 2017), p. 73. Attachment A TORC’s Comments and Responses April 27, 2018 -36- (Id.). As noted above, the price increases to attract imports to Southern California will be on top of the State of California’s SB-1 & AB-32 program costs that will be increasing through 2020. This chart identifies additional risks that could lead to even higher fuel prices: (Id.). The risk of rising gasoline prices increases significantly with the two refineries shut down because CARBOB cannot be produced by Southern California refineries without alkylate. If the District forces the two Refineries to phase-out MHF, the CEC has forecasted that both impacted refiners are unlikely to be viable without alkylation and would shut down. Key factors potentially impacting SoCal gasoline pricing with all current refineries impacted refineries closed Global competition for products intensifies SoCal gasoline demand continues to increase Unplanned refinery outages higher prices Planned refinery shutdowns Delays and disruptions in cargo offloading lower prices Summer demand peak Increased concentration of suppliers in SoCal Attachment A TORC’s Comments and Responses April 27, 2018 -37- With only three fuels refiners left in SoCal, the fuels market will have less competition and ~25% of regional gasoline demand would have to be imported. Offshore refiners will produce the products and ship them halfway around the world to the California market, which is a risk unto itself because they will ship the fuel wherever they can get the highest prices. Conservatively, average spot prices could rise 25 cpg or more, and ultimately the California consumer would pay the price. While District staff has opinions on the fuels marketplace and the role refineries play in supporting the economy, illustrating their lack of knowledge and expertise in this area, they still need to complete an appropriate Socioeconomic Analysis with input from the CEC that examines the potential impact of a phase-out on local, regional, and state fuel markets and economies. Without such and analysis, how can staff justify supporting an MHF phase-out? The answer: staff cannot. Lack of an appropriate Socioeconomic analysis further supports the perception that staff have created a strawman that market impacts from a MHF phase-out or shutdown of two Southern California two refineries will not severely impact markets or economies. As a result, they unjustifiably include a predetermined MHF phase-out in the PR 1410 rulemaking. Slide 13 - ACCIDENTS HAPPEN In Slide 13, District staff again appears to be setting up a strawman of comparing three MHF incidents with one Sulfuric Acid incident to presumably show that the impacts from an MHF Alkylation Unit compared to a Sulfuric Acid unit release are worse. However, the incidents listed in this slide cannot be used for such a proposition since each incident was based on its unique set of circumstances and safety features. It is the equivalent of comparing “apples to oranges.” Only an appropriate risk assessment can provide an informed understanding of the potential comparative risks between MHF and Sulfuric Acid, which District staff has not conducted to date. However, as noted above, such a risk assessment, in the form of a QRA, has already been done for the Torrance Refinery MHF Alkylation Unit, and showed that MHF is as safer if not safer than Sulfuric Acid. Accordingly, the listing of the MHF incidents compared to the one Sulfuric Acid incident can only be seen as another attempt by District staff to discredit MHF without any real basis in order to prop its predetermined outcome that MHF should be phased-out. Moreover, it appears that this listing of MHF incidents in this slide is also intended by District staff to illicit fear from a potential MHF Alkylation Unit release. Case in point for the Torrance Refinery is District staff references the Chemical Safety Board’s (“CSB”) ExxonMobil Torrance Refinery, Electrostatic Precipitation Explosion, Investigation Report, No. 2015-02-I-CA (May 2017) (“Final Report), and states the following: Near-miss” accident at Exxon Mobil in 2015 40 ton piece of electrostatic precipitator landed within 5 feet of the MHF acid settler Attachment A TORC’s Comments and Responses April 27, 2018 -38- (Footnote omitted.) If the District staff’s intention in citing this is to imply that if the MHF Alkylation Unit was struck there could have been a catastrophic incident, this is misleading and could result in instilling fear in the public, elected officials, Refinery Committee, and Governing Board, generating unwarranted fears and concerns to support a phase-out of MHF. Notably, the CSB did not reach any conclusion or speculate on this. Based on a recent court decision, the CSB’s characterization of this incident as a “near miss” is potentially misleading. Recently, the Federal California Central District Court denied the portion of a motion brought by the U.S Department of Justice on behalf of the CSB to enforce administrative subpoenas issued to ExxonMobil for the production of MHF Alkylation Unit related documents. These documents had been sought by the CSB from ExxonMobil in the course of its investigation into the February 18, 2015 ESP incident. In denying the CSB’s requests for ExxonMobil to produce these documents, the Court held that “the requests [were] UNFORCEABLE because the requested information is not sufficiently related to the facts, conditions, and circumstances and the cause or probable cause of the February 2015 accidental release to reasonably be considered relevant.” (See United States of America v. Exxon Mobil Oil Corp., Case No. MC 17-00066 CBM (November 3, 2017), p. 7, lns. 14-17; (emphasis in the original)). Notably, during the February 18, 2015 incident, MHF was rapidly evacuated from the Alkylation Unit; there was no release of MHF, and no one has offered technical evidence or an engineering study that concludes there could have been a release from the Alkylation Unit on February 18, 2015. Merely having an opinion and stating that a “release could have occurred” is speculative at best and purposefully generates unwarranted and unjustified public fear. Based on public statements by the Refinery’s prior owner at the time of the incident, there was no risk of the piece of ESP ductwork causing an MHF Alkylation Unit release on Februar y 18, 2015. Specifically, they said the MHF Alkylation Unit’s safety and mitigation systems were fully functional during and following the incident. Based on the prior owner’s statement, it is highly unlikely the ESP debris from the explosion had the force, or could have had the force, necessary to penetrate the 2-inch thick carbon steel MHF Alkylation Unit settlers. The function of an acid settler is literally to “settle out acid” in the bottom third of each of the settlers. Again by design, the upper two-thirds of a settler contains light hydrocarbons. Attachment A TORC’s Comments and Responses April 27, 2018 -39- The acid phase lies in the green portion of the settler vessel. The belly pans physically prevent an upward- or horizontally-oriented MHF release from occurring. The belly pans extend above the acid level for the complete length and width of the settler vessel. Accordingly, if the debris had struck an acid settler and somehow had the force to penetrate the 2” thick carbon steel shell, the former owner indicated this would likely occur in the upper section of the settler, which would cause the released light hydrocarbons to auto-refrigerate on exposure to ambient air. If that were to happen, the responsible person on duty would evacuate the acid from the bottom of the settler(s) at the same time and the Alkylation Unit’s multiple layers of protection would deploy, which is what was done as a precaution at the time of the incident, in accordance with Refinery training and procedures. Importantly, the Torrance Refinery made the following corrective actions to the Fluidized Catalytic Cracking Unit (“FCC”) and ESP to prevent a similar ESP incident from ever occurring in the future: Installed new instrumentation, new equipment, and additional alarms; Defined and began using new and additional minimum levels for operation; Developed a “safe park” procedure and updated shutdown/startup steps for the FCC and Trained Refinery personnel to use the new instrumentation, equipment, additional alarms, and procedures. In addition, TORC recently initiated a Refinery-wide training program to enhance focus, professionalism, competency and capabilities across the Refinery. This investment in our workforce touches every employee who works at the refinery and they are giving the program positive, enthusiastic feedback. In slide 13, District staff also misrepresents the following 1989 HF Alkylation Unit incident: HF Release at Marathon Petroleum Corporation, Texas City in 1987 Vapors emitted under pressure for over 2 hours More than 1,000 people injured (Footnotes omitted.) First, this was an HF Alkylation Unit and not an MHF Alkylation Unit. Accordingly, an HF release from this unit would not have the same significant rainout as would occur with MHF. Second, this unit did not have the redundant safety systems and training that the Torrance Refinery’s MHF Attachment A TORC’s Comments and Responses April 27, 2018 -40- Alkylation Unit employs that would prevent such an off-site release. Third, Torrance Refinery’s Alkylation Unit has a 51-year history of safety with no off-site releases of MHF/HF. Finally, there were no fatalities associated with this incident. In slide 13, the District presents the following related to the Valero Texas City April 19, 2018 incident: Explosion at Valero Texas City April 19, 2018 Early reports stated fire erupted in refinery’s depropanizer tower Uncertain at this time if HF was released from alkylation unit (Footnote omitted.) It is TORC understands that there were no offsite HF release associated with this incident and that safety systems were deployed and worked as designed during the incident to prevent an off-site release. Most disturbing about this slide is that District staff also appears to be establishing a new, incorrect, inequitable, and unprecedented rulemaking criteria through which only the potential hazard, regardless of the probability or risk, is taken into consideration. In other words, a “Zero Risk” criteria for MHF, but other materials within its jurisdiction that present risk of harm or exposure to workers and the public, can still have risk related to its operations. This inequitable and unprecedented position is borne out by staff’s willingness to accept risks associated with Sulfuric Acid as noted in this slide: Sulfuric Acid Alkylation accident at Tesoro Martinez in 2014 Released 84,000 pounds of sulfuric acid injured two employees (Emphasis added.) Strikingly, this is also borne out by the thousands of CEQA analyses that the District has undertaken over the decades for its permitting and rulemaking projects. For example, the District’s CEQA analysis for Tesoro’s (now Andeavor) Los Angeles Refinery Integration and Compliance Project, found that for the new Sulfuric Acid unit regeneration portion (“SARP”) of the project: “[t]he hazards associated with the SARP are potentially significant in the event of a worst- case accidental release of sulfur dioxide and could extend up to about 1,905 feet. Although the projected hazard zone would avoid residential areas, several houses are located within nearby industrial areas where the projected sulfur dioxide hazard zone (sulfur dioxide concentrations would exceed the three ppm significance threshold).” (See Final EIR, p. 4-53). Notably, the District determines that the way these potentially significant impacts will be mitigated is through the federal and state PSM regulations, which is what TORC complies with for its MHF Alkylation Unit: Attachment A TORC’s Comments and Responses April 27, 2018 -41- “Under federal OSHA, regulations have been promulgated that require the preparation and implementation of a PSM Program (40 CFR Part 1910, Section 119, and Title 8, CCR, Section 5189). A PSM that meets the requirements of the regulations will minimize the consequences of a release involving a toxic, reactive, flammable, or explosive chemical.” (See Final EIR, pp. 4-68 – 69). Despite the potentially significant impacts, the District still accepted them for the project: “The impacts of the proposed project on hazards associated with the Naphtha Isomerization Unit, new crude tanks, SARP, and Interconnecting Pipelines are expected to be significant. Compliance with existing PSM, RMP, and CalARP regulations and implementation of the recommended safety measures would minimize the potential impacts associated with a release, but are not expected to eliminate the potential hazard impacts. No feasible mitigation measures were identified to further reduce significant adverse hazard impacts. Therefore, hazards and hazardous material impacts generated by the proposed project are expected to remain significant.” (See Final EIR, p. 4-69; (emphasis added)). In virtually every CEQA analysis it as undertaken, the District weighs risk, probability, and consequence of project impacts to the environment and the community, especially in the Hazards analysis. Accordingly, there is no justification for District staff in applying a regulatory framework to MHF alkylation that includes a different risk tolerance (i.e., Zero) than it would also apply to Sulfuric Acid Alkylation and other hazardous materials. This is inequitable risk tolerance approach is just another example of what appears to be a predetermined outcome for an unjustified a phase out of MHF to be presented at the April 28th Refinery Committee meeting. Society generally makes rational, risk-based decisions using a number of factors, including the realistic likelihood of a hazard-related incident. In short, the inherent risk of an activity is among the criteria society uses to make all kinds of decisions. Therefore, there is no such thing as a Zero risk tolerance. Slide 14 - TOP THREE U.S. REFINERIES USING HF/MHF ALKYLATION IN DENSELY POPULATED AREAS In slide 14, District staff creates confusion in that it implies that the Philadelphia Energy Solutions, TORC Torrance, and Valero Wilmington refineries also use HF as an Alkylation catalyst. This is patently incorrect as these three refineries have phased-out HF with MHF. In the case of TORC’s Torrance Refinery, this occurred in 1997. Torrance Refinery’s Alkylation Unit has a 51-year history of safety with no off-site releases of MHF/HF. Attachment A TORC’s Comments and Responses April 27, 2018 -42- Additionally, in slide 14, District staff misstates the maximum capacity of the Torrance Refinery MHF Alkylation Unit, which is 30,000 BPD. Finally, in slide 14, District staff seems to be once again be misusing the EPA’s RMP regulations, and specifically the Worst Case Scenario Offsite Consequence Analysis (“WCS”) to imply that a release of HF/MHF at the Torrance Refinery would impact “245,000 People within 3 Miles” with “Nearest Residence 1,500 Feet.” District staff appears once again to be purposefully taking Torrance Refinery’s currently submitted EPA RMP WCS analysis out of context, specifically as an additional rationale for including a phase- out of MHF in the staff’s currently proposed PR 1410 conceptual rulemaking framework – Options A or B. As in previous slides, the District appears to be mistakenly equating “hazards” with “risks.” By doing so, the District is removing the event probability component from their analysis. Use of EPA RMP consequence analysis information in a rulemaking process is inappropriate for a number of reasons. When put into context, according to EPA the purpose of the RMP WCS analysis is not to be a predictor of an event or incident, but rather used as an emergency response planning tool. EPA also states that “[l]ocal emergency planning organizations can use RMPs to prepare response plans and allocate resources. (See EPA’s “Evaluating Chemical Hazards in the Community: Using an RMP’s Offsite Consequence Analysis” (550-B-99-015 Risk Management, May 1999), p. 9). EPA also cautions that “[c]haracterizing data using onl y worst-case scenarios can be misleading and unnecessarily alarming.” (See Id., p. 7. Moreover, EPA has further cautioned that “[t]hey are not intended to represent a ‘public danger zone.’ ”. Id., (emphasis added.)) EPA RMP guidelines acknowledge the WCS use unrealistic modeling parameters and is an ultra- conservative, unrealistic scenario: “Because the assumptions required for the worst-case analysis are very conservative, the results likely will also be very conservative ... The distance to the endpoint estimated under worst-case conditions should not be considered a zone in which the public would likely be in danger, instead it is intended to provide an estimate of the maximum possible area that might be affected in the unlikely event of catastrophic conditions.” (See EPA’s “General RMP Guidance”, Chapter 4 – Offsite Consequence Analysis (2004), pp. 4-6). Just as importantly, in determining the WCS the facility is prohibited from taking credit for active safety measures, such as automatic shutdown systems, firewater monitors, deluge systems, etc. Plus, they are unable to include emergency response actions and weather conditions are purposefully deemed unfavorable. The WCS is modeled to a threshold of ERPG 2, which eliminates irreversible or other serious health effects or symptoms that could impair an individual’s ability to take protective action after one hour of exposure. In addition, RMP regulations require the release to occur over just 10 minutes. These Attachment A TORC’s Comments and Responses April 27, 2018 -43- factors add another level of conservatism to the WCS analysis, further skewing the consequences and undermining District staff’s statements in the presentation. The RMP WCS analysis purposefully overestimates the potential hazard to create an ultra- conservative, unrealistic scenario for planning purposes. Similarly, the hazard of flying is the plane crashing; the hazard of crossing a street is the pedestrian being hit by a vehicle; and the hazard of driving across a bridge is the bridge collapsing. Accordingly, EPA considers the RMP WCS to be an emergency planning tool. The EPA does not use WCS results for determining the acceptability of facility operation or rulemaking, so using the WCS for rulemaking is completely inappropriate and unreasonable for the District, and we request you stop the practice. By including the Torrance Refinery’s current RMP WCS information in the April 28th presentation out of context with EPA’s guidelines, the District misinforms and confuses the public, elected officials, and Refinery Committee and Governing Board members, generating unwarranted fears and concerns to support a phase-out of MHF, despite the proven efficacy of the technology and the Torrance Refinery MHF Alkylation Unit’s robust passive and active safety measures. Importantly, and potentially misleading, is staff’s failure to mention in the presentation the benefits of active mitigation by only showing the WCS results, which as noted previously are used to create an ultra-conservative, unrealistic scenario. In addition, by failing to include the effects of active safety mitigation systems on a release, the presentation misrepresents and inflates the potential impact of a release from the MHF Alkylation Unit. As shown in the chart below, TORC believes that with the combination of MHF, passive mitigation, and active mitigation, a release should be contained onsite. Slide 15 - RELATIVE RISK OF HF AND MHF In this slide, District staff continues to misrepresent the MHF technology and apparently ignores its prior historic understanding of the technology, particularly its permitting of the technology in the 1997. Despite the voluminous information provided to the District back then and more recently during the PR 1410 rulemaking, at its request, and the numerous meetings with staff to explain the MHF testing, analyses and modeling information, it is clear that staff still does not understand the MHF technology, and as result, makes unsupported conclusions regarding the technology by stating in slide 15 that MHF modestly increases rainout - HF exposure would still occur.” We appreciate, as staff admitted at the January 20th Refinery Committee meeting, that MHF technology and behavior represent an extremely complex scientific subject that is difficult to grasp. Consequently, based on staff’s acknowledging their uncertainty, it is clear as mentioned above that staff yet to fully understand or comprehend how MHF works, despite past collaboration between the District and Quest Laboratories, which worked on the initial development of MHF with Mobil and Phillips. It is clear that District staff does not understand and fail to grasp the following important concepts related to MHF: Attachment A TORC’s Comments and Responses April 27, 2018 -44- The polarity of the molecules causes hydrogen bonding, which forms larger droplets that fall to the ground and easily contained by water; and The amount of water present in the MHF solution is highly polar and three times more effective at bonding HF molecules than the additive. The totality of MHF testing, analysis, modeling data, and other information TORC has provided to the District to date, as well as information already existing in the District’s own files, shows that MHF: Prevents flash atomization Prevents formation of an airborne aerosol Promotes rainout of liquid MHF at current Torrance Refinery MHF Alkylation Unit operating conditions These conclusions support the thorough decision-making process both the Court and the District engaged in that led to adopting and permitting MHF Alkylation at the Torrance Refinery in the 1990s. As has been explained to the District in multiple forums and correspondences, qualified, experienced scientists performed extensive MHF testing on a parametric basis to evaluate MHF efficacy on each operating condition for the Torrance Refinery’s Alkylation Unit. Each individual parameter (i.e., temperature, pressure, and concentrations), was indisputably tested at ranges that include current MHF Alkylation Unit operating conditions. Results of this testing were used to create and validate a “first principles thermodynamic model” that accurately predicts liquid rainout of HF across all the Refinery’s MHF Alkylation Unit’s operating conditions. TORC has provided District staff with MHF parametric testing data, analyses, and modeling data from the earlier and subsequent testing (1992, 1993, and 1995) that prove MHF is safe to use at the Refinery’s current operating conditions, which should also already be reflected in the District’s files for both the Torrance and Wilmington refineries. More specifically, as presented by TORC to the District on several occasions, the Add itive range of concentrations was tested at equal to or less than 20% by wt.% in multiple trials from 1991-1995. These tests confirm the Additive increases ARF even at low concentrations.11 11 Specifically, the extensive testing that was completed by Mobil as presented in Document 8, DAN 95M-0874 – “MHF Airborne HF Reduction Estimates.” disclosed by TORC to the District on May 4, 2017 under Trade Secrets/Confidential Business Information, clearly supports this. “Mobil has performed small … and large scale release tests … to understand the effect of storage composition, temperature and pressure and release orifice size on the fraction of released HF that becomes airborne. A key finding of the experiments was that the addition of the additive causes a significant fraction of the released HF to fall on the ground as liquid rainout. The set of experiments … showed that the presence of the additive eliminates flash atomization of the released jets. More specifically, no flash atomization was observed for compositions containing as much as 85 wt.% HF up to 140° F. Attachment A TORC’s Comments and Responses April 27, 2018 -45- As the District has been informed, daily unit ARF is calculated as a function of: (1) HF concentration, (2) Additive concentration, (3) water concentration, and (4) reactor temperature. Rainout Model results for the Torrance MHF Alkylation Unit are consistent with ARF test results. Importantly, the supplemental MHF data and information TORC provided to the District on August 11th and September 12th, and discussed with District staff on August 17th, validates this consistency and efficacy of the Rainout Model, and in turn, the efficacy of MHF at current MHF Alkylation Unit current operating conditions. To further help District staff understand this information, at the District’s request on August 11th, TORC confidentially provided an Excel spreadsheet containing all testing data, complete with associated operating parameters, measured rainout, and predicted rainout. As TORC explained in its August 11th, September 12th, and February 6, 2018 letters, and discussed with District staff on August 17th, and highlighted again in a meeting with staff on March 5, 2018, this data summarizes all of the MHF testing documents from the 1990s to which TORC had access at the time, showing the wide range of operating parameters parametrically tested, including the Torrance Refinery MHF Alkylation Unit current operating conditions. Each relevant case was then run on the Rainout Model - measured versus predicted values. The following graph summarizes the experimental data results and correlates these results to the Rainout Model used as the foundation for the Safety Advisor’s and Court’s evaluation and approval of the use of MHF. Correlating the experimental data to the Rainout Model’s results definitively shows that: Rainout Model calculations are valid; and Stated safety improvements offered by MHF are valid. Mobil has also developed an aerosol model … to interpret the experimental data and to predict the airborne fraction of HF in releases with conditions outside the range of variables experimentally tested. The model predicts small and large scale release data in the subcooled and superheated regimes of interest.” (Internal references omitted.) Attachment A TORC’s Comments and Responses April 27, 2018 -46- Experimental results shown as measured Rainout versus model predicted rainout, validating the Rainout Model’s strong predictive abilities at a wide range of HF and Additive percentages Also at the District’s request, TORC graphed each tested parameter separately to show any testin g bias. These graphs, provided in previous technical submissions to District staff show the difference between measured and predicted Rainout separately for each operating parameter: pressures, temperatures, HF wt.% concentrations, Additive wt.% concentrations, including current MHF Alkylation Unit conditions. The accuracy of the Rainout Model at the full range for each condition, as well as its suitability in validating MHF safety margins, is clearly demonstrated for all key operating parameters. Additionally, at the District’s request, TORC provided a comparison of the rainout at MHF Alkylation Unit operating conditions at 55 pound per square inch gauge (“psig”) versus 225 psig as predicted by the Rainout Model. As has been repeatedly explained to the District, the Rainout Model is a liquid spray model developed by Mobil engineers and scientists to predict the airborne fraction of MHF, based on extensive testing and technical analyses. The model calculates the evaporation of HF in a two-phase HF/additive jet discharging from an orifice. Given the release conditions (pressure, temperature, and composition) and release geometry (hole size, release orientation, and elevation of the orifice from the ground), the model calculates HF Rainout, or capture, which is defined as the fraction of HF discharged from an orifice that falls to the ground as liquid. The Rainout Model output at 55 psig versus 225 psig supports the premise that pressure has a relatively small impact on ARF as the release velocity is proportional to the square root of pressure. Attachment A TORC’s Comments and Responses April 27, 2018 -47- Even at higher pressures tested and small orifice sizes, the projected ARF remains above 50% for the Refinery’s MHF Alkylation Unit operating conditions. In summary, the supplemental analysis TORC provided to the District on August 11th and September 12th, and discussed with District staff on August 17th, and provided in this Attachment A, unequivocally confirms, based on substantial sound and scientific evidence, that: Rainout Model calculations for current Torrance Refinery MHF Alkylation Unit operating conditions are within the range of model validity for Rainout; Experimental data points exist at the Torrance Refinery MHF Alkylation Unit’s current operating temperature and composition; Increasing operating pressure increases hydrodynamic forces with no observable increase to the propensity to flash atomize, thus the validity of the model is retained and reinforced; and The Rainout Model has been proven to accurately predict release characteristics for all operating conditions within the hydrodynamic regime; hence, the model is able to accurately predict rainout across the full range of unit operating pressures. Finally, TORC explained to the District that the Rainout Model was derived from extensive release testing. In other words, after the initial rounds of testing and modeling, researchers subsequently validated the model through additional experiments that proved the model’s predictive ability across all MHF Alkylation Unit operating ranges. Validation tests were performed at representative unit operating conditions: i.e., lower Additive concentrations and higher temperatures. Despite this wealth of verifying information, District staff at the August 17 th meeting presented for the first time its analysis of supplemental MHF testing and modeling data provided by TORC on August 11th. Staff’s analysis was inaccurate, failed to account for the testing data being hydrocarbon - free, and most importantly, ignores the fact that higher unit operating pressure relative to th e tested data points has no observable increase in the propensity to flash atomize. That presentation stands as further evidence that District staff fail to understand MHF behavior and chemistry, and therefore the efficacy of MHF, which has been proven at Torrance Refinery’s current MHF Alkylation Unit operating conditions. Another important aspect of the MHF technology staff fails to understand or has overlooked is water’s positive impact on MHF rainout and its effectiveness in reducing MHF flash atomizat ion at the Torrance Refinery. Water is a highly polar molecule, and its polarity causes water to bond tightly with a similarly polar molecule, HF. This known strong polarity, when combined with the rigorous testing data from the 1990’s and a validated thermodynamic model predicting HF Rainout, supports the strong, attractive benefits of small amounts of water in MHF solutions. A common metric used to compare molecular polarity is the polarity index. The higher the index number the more polar the material. The indices for HF, water, and additive are: HF: 0.2892 Water: 0.2586 Attachment A TORC’s Comments and Responses April 27, 2018 -48- Additive: 0.1283 Therefore, HF will preferentially bond with water before bonding with additive. This allows one to positively conclude that water will still have the same flash atomization-reducing impacts, even in the absence of, or at low concentrations of, additive in an MHF mixture. Stated another way, the water- HF molecule pair forms a stronger bond than the water-additive pair or the HF-additive pair. The dielectric constant is also used to measure the polarity of solvents, with higher values corresponding to more polarity: HF: 83.6 Water: 80.1 Additive: 43.3 This separate metric reinforces the conclusions previously stated. Water and HF are roughly equally polar, and Additive is about half as polar. Therefore, we can expect HF to preferentially associate with water over additive, forming much stronger bonds at any concentration. Testing data performed in the 1990s measured rainout for mixtures of 50 wt.% HF and 50 wt.% water as well as 50 wt.% HF and 50 wt.% additive. The HF/Water mixtures consistently showed higher rainout than the HF/additive mixtures, supporting the conclusion that water is more effective at creating rainout. This fact was upheld by the additional testing performed at various HF/Additive/Water concentrations (going as low as 10% additive and 5% water) that showed 1 kilogram (“kg”) of water to be roughly as effective as 3.9 kg additive. Again, due to the higher polar attraction between HF and water compared with HF and additive, this experimental data can be applied to any level of water present in a HF mixture, regardless of additive concentration. Water will preferentially bond with HF before additive. Another way to look at this and the data is on a molar basis. Using molecular weight conversions, there are 6.7 times more molecules in 1 kg of water than molecules in 1 kg of additive. In addition, the Additive has two primary bonding sites on a single molecule, while water has one primary bonding site. With 6.7 times as many molecules, but half as many bonding sites, a HF/Water mixture yields roughly 3.3 more primary bonds than a HF/additive solution. Although there are other factors that determine a solvent’s effectiveness against flash atomization, such as the polarity and physical properties of the solvent, this simple analysis indicates that we can expect water to be roughly three to four times as effective as additive, which is on par with the experimental data. As we previously discussed, the Rainout Model developed by Mobil is an accurate predictor of MHF mixture rainout for the full range of unit operating conditions at varying acid, additive and water concentrations. This “liquid spray model” is based on extensive testing and technical analysis, with modeling that was validated after development with additional testing data. Using first principles, such as conservation of mass, momentum, and energy, the model calculates the evaporation and liquid rainout of HF in a two-phase HF/additive jet discharging from an orifice. The model is able to reproduce the vapor pressure and rainout characteristics over the entire range of testing, using only NRTL binary interaction parameters. Because of this statistically significant Attachment A TORC’s Comments and Responses April 27, 2018 -49- predictive ability, one could reasonably conclude that describing a ternary interaction between water- HF-additive is unnecessary. Binary interactions, such as those listed above for HF/Water and HF/Additive, are effective and accurate for any concentration range. When the above theoretical, experimental and modeling data are joined with real life experiences in the Torrance MHF Alkylation Unit, the effectiveness of MHF technology is readily apparent. The combined concentration of additive and water in our unit acid stream effectively stops flash atomization, keeping any potential release in a liquid phase, eliminating the potential for a ground- hugging cloud, and allowing for containment within the unit boundaries. This significantly reduces the risk of harm to both our employees and the community. Use of higher water concentrations is infeasible due to known corrosion acceleration and increased potential for unstable unit operations. Additionally, the Court-appointed Safety Advisors September 2001 report it further supports MHF at the MHF Alkylation Unit’s current operating conditions and the effectiveness of water. In this report, the Safety Advisor reviewed the MHF testing and modeling prior to shutting down the MHF Alkylation Unit for the fall 2000 turnaround. In order to undertake this turnaround, the Torrance Refinery proposed the removal of nearly all Additive from unit to minimize the potential for corrosion, which meant that for a short period of time the unit must be operated with lower concentrations or no Additive. The Safety Advisor concluded that under this scenario the unit’s risk would remain within the bounds required by the Consent Decree. Specifically, that the Alkylation Unit could retain the required Unbarriered ARF of 50% by compensating for the decrease in Additive concentration by increasing water and/or ASO. Accordingly, as explained above, the totality of all MHF testing, analysis, modeling data, and other information TORC has provided to the District to date shows that MHF (1) prevents flash atomization; (2) prevents the formation of an airborne aerosol; and (3) promotes rainout of liquid MHF at current Torrance Refinery MHF Alkylation Unit operating conditions. All these conclusions support the decision-making process applied in the 1990’s that supports the acceptability and approval of MHF alkylation by both the Court and the District. This is further demonstrated by the fact that in 1997 the Refinery began using MHF to comply with the City of Torrance Consent Decree. Since then, the MHF Alkylation Unit has been operating without any MHF offsite release of the chemical. Importantly, Torrance Refinery also used HF in the Alkylation Unit without any HF offsite release from 1966 until 1997, a period that includes both the 6.5+ Sylmar and Northridge earthquakes. In total, 51 years have passed since the unit went online, a performance record that staff fails to recognize in its apparent rush to judgement against MHF, a technology acknowledged by the refining industry to be the latest, most advanced, commercially proven alkylation catalyst available in the world and covered by API-751, “Safe Operation of Hydrofluoric Acid Alkylation Units.” To define this more clearly, that is equivalent to about 19,000 days, 450,000 hours, 27,000,000 minutes, 1,600,000,000 seconds, and counting. Attachment A TORC’s Comments and Responses April 27, 2018 -50- This consistent reliability and safety record is due primarily to the highly-trained Operators and support personnel including Chemical, Mechanical, Electrical, Civil, and Environmental Engineers who manage the Refinery’s MHF Alkylation Unit and the redundant safety systems employed on the unit, which include the MHF catalyst. Moreover, staff’s position contradicts the recommendation of an independent Court-appointed Safety Advisor and the decision of a well-respected Los Angeles Superior Court Judge who in 1995 under the City of Torrance Consent Decree approved and required the use of the MHF technology at the Torrance Refinery, finding MHF to be “… as safe as and possibly safer than sulfuric acid for a similarly-sized alkylation unit.” Their decision was reached after a thorough, multi-year review of voluminous MHF testing results, technical analyses, and modeling data by the Safety Advisor and judge that has also been disclosed to the District with the consent of the technology licensor, and already in the District’s files as a result of their collaboration with Quest Laboratories during the permitting process for both the Torrance and Wilmington refineries’ MHF Alkylation Units. Additionally, staff’s current position contradicts the District’s precedential position on this technology that extends back to permitting the Torrance Refinery MHF Alkylation Unit. More publicly, in 2003, the District issued a press release announcing an “enforceable agreement” with Valero to phase-out the Wilmington Refinery’s use of HF with MHF by 2006. In the press release, the District publicizes and supports the use of MHF technology12: “Once this refinery stops using concentrated hydrogen fluoride, we will have virtually eliminated the potential for a catastrophic accidental release of this compound in our region,” said Barry Wallerstein, executive officer of the South Coast Air Quality Management District.” “The agreement fulfils one of the 23 Environmental Justice goals adopted by AQMD’s Governing Board last fall.” “Switching to modified HF will minimize the possibility of a catastrophic accidental release not only at the refinery, but along Southland transportation corridors, as the additive is added to the chemical before shipping.” By endorsing and permitting Valero Wilmington’s Reduced Volatility Alkylation Process (ReVAP) project to modify the Wilmington Refinery’s Alkylation Unit to use MHF under an “enforceable agreement” between Valero and the District, the District further reinforced the efficacy of MHF, while also stating in its CEQA Final EIR for the project the following about the efficacy of MHF: “ReVAP incorporates a suppressant in the HF that reduces volatility in the event of an accidental release with a concurrent reduction in safety risks (i.e., distance that the HF could travel and number of persons exposed) in the surrounding area. Use of this modified process meets the SCAQMD’s objectives with respect to elimination of concentrated HF.” 12 See District’s “Highly Toxic Chemical to be Phased Out at Valero Refinery” news release (February 7, 2003). Attachment A TORC’s Comments and Responses April 27, 2018 -51- See District’s “Ultramar Inc. – Valero, Wilmington Refinery, Alkylation Improvement Project, Statement Of Findings, Statement Of Overriding Considerations, And Mitigation Monitoring Plan ,” p. 3, (SCH #20030536, certified December 2004). Note that both the Wilmington and Torrance refineries use the same “suppressant”/Additive. “An accidental release of HF could migrate off the Refinery property and expose individuals in the surrounding community. The proposed (MHF) project will substantially reduce the potential hazard impacts associated with an accidental release of HF.” Id., p. 9. “The proprietary additive is a non-volatile, non-odorous, low toxicity material that is completely miscible in the acid phase. It has very limited affinity for other hydrocarbons, including the alkylate product and acid soluble oil (ASO) by-product, similar to the organic polymer produced in the current process. The unique physical properties of the additive substantially reduce the volatility of the acid at ambient conditions. This reduction in volatility proportionately reduces the amount of HF that can vaporize and subsequently disperse off-site from a given liquid release quantity. The modified HF catalyst reduces acid vapor pressure sufficiently to suppress the usual flash atomization process of hydrofluoric acid, causing most of the acid to fall to the ground as an easily controlled liquid and reduces the potential for off-site consequences of an accidental HF release.” See District’s “Ultramar Inc. – Valero, Wilmington Refinery, Alkylation Improvement Project, Final EIR”, Chapter 2, p. 2-7, (SCH #20030536, certified December 16, 2004) (emphasis added). This District’s stated position for the Valero MHF project is consistent with the District’s previous supportive conclusion regarding the efficacy of MHF in its CEQA Addendum to the Torrance Refinery’s MHF Alkylation Unit project, in which the District specifically states: “The experimental testing indicated that the addition of the Mobil additive to HF was an effective method for reducing or elimination the amount of aerosol formed during a release. The additive is a water-soluble, thermally stable compound that is solid at ambient conditions. In addition, the health data indicate that the additive has very low toxicity and limited health impacts as compared to HF which has more severe health impacts.” See District’s “Mobil, Addendum, Mitigated Negative Declaration, Mobil Modified Hydrogen Fluoride Conversion Project”, p. 2, (July 9, 1997). “In summary, after review of the available test data and performing release/dispersion modeling, under similar release conditions, the addition of the Mobil additive to an HF alkylation unit was determined to result in a reduction of HF hazard zones for equivalent releases. The amount of reduction will be a function of the additive concentration, and will vary with many parameters which govern the release/dispersion process. In all cases, addition of the additive to the alkylation unit will reduce the distance traveled by HF in the event of a release. At any concentration of additive, the vapor pressure of the HF will be reduced, thus reducing the potential for public exposure to HF. Therefore, modification to Attachment A TORC’s Comments and Responses April 27, 2018 -52- the HF alkylation unit and the use of MHF at the Mobil Refinery are expected to have a beneficial impact on the environment by reducing the potential impacts associated with an accidental release from the alkylation unit.” Id., p. 4, (emphasis added). Neither the MHF Alkylation technologies employed by TORC at its Torrance Refinery, nor, to TORC’s knowledge, those employed by Valero at its Wilmington Refinery have changed since the District originally permitted both refineries’ MHF Alkylation Units. MHF technology is the same today as when originally permitted at Torrance more than 20 years ago. However, the safety systems, training, and knowledge of the MHF Alkylation process and equipment have improved related to MHF alkylation, which has been the case at the Torrance Refinery. Consequently, the Torrance Refinery MHF Alkylation Unit is even safer today than when it was permitted 20 years ago. Importantly and as previously noted, the District issued permits to the Torrance Refinery in 1997 and Valero Wilmington Refinery in 2004, after performing statutorily required CEQA analyses for the MHF technology. Fast forward to 2017 - how does current District staff justify their current concerns with the MHF technology when the District previously endorsed, permitted, and supported MHF technology? We also note for the record we are unaware of any MHF release that has gone offsite from the four operating MHF Alkylation Units in the U.S. that safely and reliably utilize this technology. Concerning, is that the District appears to be ignoring its own research, reports, findings, conclusions, and permits to arrive at a premature and/or predetermined conclusion of phasing-out MHF. To achieve this, staff are defying sound science, technology, and logic by changing the District’s prior position on MHF technology without any supporting technical criteria or credible evidence, including testing, modeling, or operational experience, other than appearing to rely on in part guidance and presentations from the TRAA Science Advisory Panel that have been shown by TORC in “Setting the Record Straight”13 to include mis- and disinformation regarding MHF technology. To apparently support its recommendation to phase-out MHF under either Option A or B, which is discussed in detailed below, District staff cites the following statement from a Material Safety Data Sheet (“MSDS”) allegedly from Honeywell for its position that “HF and MHF list the same hazards”. Notably, in this slide, instead of a frontal view of the MSDS, staff deceptively favored a side angled view that makes the content difficult to read. To compensate for that, they blowout a text box that contains the following: EMERGENCY OVERVIEW: Clear, colorless, corrosive fuming liquid with an extremely acrid odor. Forms dense white vapor clouds if released. Both liquid and vapor can cause severe burns to all parts of the body. Specialized medical treatment is required for all exposures. 13 See staff’s Slide 7 charts, which appear similar to charts included in TRAA’s “The Case Against MHF, -ARF-SRI-and Barriers-” (January 4, 2017). Attachment A TORC’s Comments and Responses April 27, 2018 -53- As we were unable to locate this particular MSDS featured in this slide, we contacted our MHF supplier, Honeywell, which is the same name on the MSDS, regarding this MSDS. A Honeywell representative advised that the District’s version was issued in 2007 and is now out-of-date. The Torrance Refinery’s MHF MSDS supplied by Honeywell does not contain the phrase, “Forms dense white vapor clouds if released.” The Refinery’s MSDS indicates that MHF is a “Colourless fuming liquid.” Accordingly, in contrast to what the District claims based on the MSDS they selected, our current MHF MSDS differs from that of HF on this key point , and is not consistent with the voluminous MHF testing data provide to the District. We do appreciate the District pointing out that MHF “modestly increases rainout,” because Torrance has a broad array of passive and active safety systems that further increase rainout, which should be credited here. Again, it is worth emphasizing that the Torrance and Wilmington MHF Alkylation Units have been operating without any offsite release since the District originally issued permits to use MHF. The MHF technology is unequivocally the same today as when the District originally permitted its use in both refineries. However, the safety systems, training, and knowledge of the MHF alkylation process and equipment have improved. Consequently, these MHF Alkylation Units are even safer today than when the AQMD issued the first operating permits to Torrance more than 21 years ago. As shown in the chart below, TORC believes the combination of MHF, passive mitigation, and active mitigation provides the ability to contain a release onsite, which is reflected in the unit’s reliability record of never having had an offsite MHF release in more than 51 years of operation. As previously noted, TORC follows specific, global industry practices known as API RP -751 for safely and reliably managing this process. Torrance’s MHF Alkylation Unit safety systems meet all API RP-751 requirements, and include the following: Preventive Safety Systems Attachment A TORC’s Comments and Responses April 27, 2018 -54- o Specialized training and personal protective equipment for all personnel entering the unit o Robust inspection and audit programs Torrance Refinery follows API RP-751 for HF/MHF units Recognized by CalOSHA and other government agencies globally Followed by refineries worldwide o Two Operators stationed on the unit each shift and in constant contact with the Console Team Lead o Eight surveillance cameras with video playback o Emergency simulation drills Joint TORC and Torrance Fire Department (“TFD”) drills TORC and TFD personnel are Hazmat trained o MHF Torrance Refinery MHF Alkylation Unit meets >50% Airborne Reduction Factor (“ARF”) per MHF chemistry on an annual basis as required by the C ity of Torrance Consent Decree Online MHF Analyzer Samples taken once every shift Emergency Response Safety Systems o Redundant response systems allow rapid response and mitigation of any potential loss of containment o Barrier technology = passive mitigation Increases total unit ARF to 89% in combination with MHF chemistry Flange barriers Settler belly pans Acid circulation pump enclosures o Water Mitigation = active mitigation Nine remotely controlled water cannons Used in tandem with console cameras to target a specific release point Local fire monitors Deluge systems on major pumps Attachment A TORC’s Comments and Responses April 27, 2018 -55- Fire sprays on vessels o 29 Point sensors located throughout unit and on perimeter Detect HF down to 0.1 parts per million (ppm) Alarms internally at 2 ppm Reported directly to AQMD at 6 ppm In the process of completing a similar alarming system to TFD o Line of Sight Laser (Open Path) system on unit perimeter Detect HF down to 0.1 ppm per meter (ppm*m) Alarm internally at 50 ppm*m and 75 ppm*m o Emergency evacuation system routes all acid from the main unit to a storage drum located behind a blast-proof wall - active mitigation 80% of acid is removed in ~2 min The remaining 20% is transferred within 7 minutes after the system is activated o Automatic valves have battery backups that allow the valves to be operated in the event of a power disruption - active mitigation o All flanges and connections in acid services are coated with special MHF-sensing paint - active mitigation Extremely sensitive - paint changes from yellow to red in the presence of trace amounts of MHF in the parts per billion (ppb) range o Alarmed safety showers In the last year, the Torrance Refinery has undergone two comprehensive inspections by the CalOSHA. The first inspection occurred during the Refinery’s Spring 2017 turnaround, which lasted approximately three months and involved approximately one -million hours of work. During the turnaround period, CalOSHA inspectors frequently came onsite to check if the turnaround was being conducted in compliance with the state’s PSM regulations. After the conclusion of its inspection, CalOSHA issued a “Notice of No Violation” for the turnaround. The second inspection was a Program Quality Verification (“PQV”) inspection and lasted six months, starting in July 2017 and ending in Januar y 2018. During PQV inspections, CalOSHA inspectors comprehensively evaluated the Refinery’s PSM program and systems. This six-month PQV inspection at the Torrance Refinery was unprecedented in duration, scope, and size. It was a multi-agency PQV inspection led by Cal/OSHA, with participation from the Torrance Fire Department, EPA Region IX, and Los Angeles County Fire Department. This multi-agency Attachment A TORC’s Comments and Responses April 27, 2018 -56- PQV inspection primarily focused on the Refinery’s MHF Alkylation Unit and included the Hydrocracker, Hydrotreater, Coker, Fluid Catalytic Cracking, and Crude Units. In order to complete the inspection within the six-month period, the multi-agency teams of inspectors were required to be on-site, multiple days per week. To accommodate the PQV inspection and the teams of inspectors, TORC had a dedicated agency liaison, field teams for each unit inspected, and dedicated staff responding to agencies’ document requests and production. At the conclusion of the six-month inspection, Cal/OSHA issued five citations for alleged tripping hazards, missing guardrails and machine guards, exposed hot surfaces, missing electrical covers, unsecured floor opening covers, lack of proper swing gates, inaccurate P&IDs, barriers not properly installed, out of service equipment not having equivalent mitigation, lack of evaluation of Contractor safety programs, inadequate written plan for employee participation, and the prior owner’s Process Hazards Analyses. All of the alleged issues were either abated during the inspection or have sin ce been abated. However, importantly, the inspectors found no mechanical integrity issues with the MHF Alkylation Unit, and overall, TORC received positive comments from Cal/OSHA that: The Torrance Refinery was on par with Northern California refineries, which are thought to have superior PSM programs due to the Contra Costa County Industrial Safety Ordinance; Their Findings were comparable to other refineries that had PQV inspections; and They had no additional safety concerns about Torrance in comparison to other California refineries. At the conclusion of the PQV inspection, TORC committed to undertake further MHF Alkylation Unit safety enhancements, consistent with the Tier II approach presented at the January 20th Refinery Committee meeting, focusing on automating certain appropriate functions to improve incident response time, installing physical barriers, and upgrading leak detection technology, which will further protect workers and the community. These committed to Tier II safety enhancements for the MHF Alkylation Unit are presented below, and will be completed by January 2020: Automate unit cameras; Enhance water mitigation open path lasers response time; Enhance Unit Console Control; Upgrade fire monitors; and Install additional open path lasers. However, TORC has not stopped there. As it was directed by the two Chairs at the January 20th Refinery meeting to work with District staff and the activists to work together to come up with a resolution to the PR 1410 rulemaking, began working in good faith on feasible Tier III safety enhancements that would result in real and valid risk reduction associated for the MHF Alkylation Unit to further protect Refinery workers and the community. To this end, TORC has developed the following potential Tier III safety enhancements: Protective steel structure around and over portion of the unit; Water mitigation dome over portion of the unit; Attachment A TORC’s Comments and Responses April 27, 2018 -57- Upgraded detection system; ESP over-pressure mitigation; and Six to eight projects to further enhance unit operational reliability. TORC has met with District staff on several occasions to discuss these potential safety enhancements in lieu of the unsafe Tier III enclosure and undergrounding concepts that District staff proposed at the January 20th Refinery Committee meeting. In these meetings with District staff, they appeared to be interested in what TORC was proposing, but now based on the staff’s presentation for the April 28 th Refinery Committee meeting it appears they have discounted these enhancements without any thorough review as to their scope and potential risk reduction in their predetermined phase-out of MHF. Slide 16 - CURRENT STAFF RECOMMENDATION FOR TWO POSSIBLE RULE APPROACHES Stunningly, without any explanation why there is no longer a Tier III option with no MHF phase-out or support that MHF is does not work and/or is not any safer than Sulfuric Acid, t he District presents in this slide two conceptual rulemaking options, both of which include an mandated MHF phase-out. In this slide, Option A, which is in essence is a phase-out to Sulfuric Acid, provides: Option A: Tier 1+ Mitigation with Phase-out in 5 years o “Tier 1+” Mitigation: Enhancements to existing and some automated mitigation implemented within 1 year o Phase-out MHF no longer than 5 years In this slide, Option B, which is in essence is a phase-out to an unproven alternative alkylation technology, provides: Option B: Tier 1 and 2 Mitigation with Longer Phase-out o Tier 1 Mitigation: Enhancements to existing mitigation implemented within 1 year o Tier 2 Mitigation: Automated mitigation implemented within 2-3 years o Technology assessment in 2 years o Phase-out MHF no longer than 6 years o If technology assessment concludes additional time needed, phase-out MHF no longer than 8 years As discussed at length above and below, District staff has no basis to now unilaterally exclude the Tier III mitigation with no MHF phase-out option that was presented on January 20th from the Refinery Committee’s consideration on April 28th, especially when staff has no support for excluding Attachment A TORC’s Comments and Responses April 27, 2018 -58- this option other than misrepresenting the Refineries’ position on staff’s originally proposed Tier III mitigation. Therefore, TORC emphatically requests that the District include an Option C, which is Tier III mitigation with no MHF phase-out, and present this to the Refinery Committee on April 28th for their further consideration. To do so otherwise, will only further buttress the view that staff has a predetermined outcome for an MHF phase-out without any compelling evidence or support as catalogued above. If District staff chooses, to ignore the inclusion of an Option C, the phase-out deadlines that District staff are proposing under either Option A for Sulfuric Acid and Option B for an emerging alternative Alkylation technology are infeasible. Staff has provided no justification for the option deadlines and significantly underestimates the time needed for appropriately implementing each option. Since either option requires the construction of a new grassroots Alkylation unit, CEQA, permitting, long lead items, and/or turnaround(s), under either option will take multiple years to complete – more than five for Option A and more than eight for Option B. Moreover, Option B would result in a phase-out of MHF to a currently unproven alternative Alkylation technology requiring an extended timeline involving the proving-out of the emergent technology, which if successful would then require an agreement to implement the new alkylation technology, permitting, financing, design, and construction. The uncertainty involved in permitting a new grassroots Alkylation technology under either option is provided below: Design/Engineering – New safety system enhancements could, and a new Alkylation process unit the scope and size of TORC’s would, take 12 to 24 months to design and engineer. CEQA – Project-specific CEQA analysis can only begin after the owner decides to invest in alternative technology and the project is defined. Accordingly, the Design/Engineering phase must be completed first. Because of the scope, complexity, and potential environmental impacts involved in new safety system enhancements, and particularly, a new Alkylation process unit equivalent to TORC’s MHF Alkylation Unit, the project would require an EIR. An EIR could take 18 to 24 months to complete, particularly if it becomes a controversial project, which is possible given the nature of the activist community in California. Case in point: Tesoro’s recent Integration and Compliance Project (see District’s Final EIR for the project), which included a new SARP. What will the District do if in the course of the CEQA project-specific analysis that MHF Alkylation is shown to be safer, or has fewer emissions, or produces less toxics than Sulfuric Acid Alkylation, or some other alternative technology; i.e., an Environmentally Superior Alternative? Will there be a predetermined outcome because of an ill-conceived, unsupported, and illogical MHF phase-out that is already in place due to a previously adopted Rule 1410? Permitting – The District cannot issue a permit until the CEQA process has been completed and an alternative has been justified. Historically, the District has taken much longer than several months if not years to review and approve complex refinery permits such as what could be required here. Just as importantly, the District is only one of multiple government entities and jurisdiction that requires, reviews, denies and/or issues permits for such a complex project. In Attachment A TORC’s Comments and Responses April 27, 2018 -59- addition to uncertainty over timing of the District’s permit review proces s, other agencies’ timing is currently unknown. For District permitting, Torrance and Wilmington are Title V facilities, and any permit would be subject to EPA review and public comment. Additionally, a new Alkylation process unit would trigger both New Source Review (“NSR”) and a Prevention of Significant Deterioration (“PSD”) review, which applies to new major sources or major modifications at existing air pollution sources. Under NSR, a new Refinery process unit would be subject to Best Achievable Cont rol Technology (“BACT”) requirements, emission offsets, and air dispersion modeling. Also, under District Rule 1401, the source to be permitted would be subject to a toxics analysis. A new Sulfuric Acid Alkylation unit would trigger all of these regulatory requirements. An Alternative technology is likely to trigger all of these requirements as well, but whether they would or not is unknown because there is no commercially viable/proven alternative Alkylation technology available today. Going through the CEQA process, meeting the District’s NSR, PSD, and BACT requirements, obtaining offsets, and conducting air dispersion modeling and toxics analysis could take several years to complete in order to obtain permits before any construction could occur. However, as noted by the CEC last July and again at Working Group #6 on September 20, 2017, there is no guarantee that permits may ultimately be issued for conversions, replacements, and/or new units, considering the community concerns that could be raised about Sulfuric Acid or alternative Alkylation technologies through this process. Among other questions, will the District waive certain requirements and allow the Torrance and Wilmington Refineries to receive an expedited permit without having to comply with BACT, emissions offsets, air dispersion modeling, and toxics analysis in order to meet an unsupported and unrealistic phase-out timeline? Will other state and federal agencies do the same with their permit processes? Procurement, Fabrication, and Delivery – Whether a complete new Alkylation process unit is required, a large majority of the piping, vessels, valves, pumps, motors, etc., would be custom- built, rather than “off the shelf” items, requiring long-lead items that could take two or more years to procure, fabricate, and deliver. This would have to be coordinated with workloads of existing vendors that are capable of designing and manufacturing equipment for such a large project, as they would also be handling other projects for other clients, which could result in long delays. Logistics – A new Alkylation process unit would take a major turnaround involving the entire Refinery, which would take place in the future based on current schedules, and then take as long as nine months to a year to complete. Turnaround coordination for a project like this takes into account the status of numerous Refinery process units and equipment that would be involved in replacing the MHF Alkylation Unit, which could take more than one refinery-wide turnaround cycle to complete. Testing / Prove Out – A new alternative Alkylation technology would take at least two turnaround cycles to prove out, which would take six to eight years, as both TORC and Valero, as well as the Attachment A TORC’s Comments and Responses April 27, 2018 -60- licensors, have previously informed the District. This needs to be done before any of the previous steps above are initiated in order to prove the technology is commercially viable, as well as safe. If either company decides to transition from MHF Alkylation to a catalyst other than Sulfuric Acid at the Torrance Refinery, the new technology has to be commercially viable in scope, scale, and reliability to the Torrance Refinery’s existing MHF Alkylation Unit, and must be inherently safer than MHF Alkylation, based on a QRA which is a structured approach to identifying and understanding the risks associated with hazardous activities such as the operation of an alkylation unit. TORC is confident the Torrance Refinery’s MHF Alkylation Unit safety systems protect Refinery employees and the community while reliably producing CARB gasoline, which is reflected in its performance. Specifically, since using MHF in the Refinery’s Alkylation Unit starting in 1997, there has never been an offsite release of HF from the Torrance Refinery. Additionally, the Torrance Refinery used HF in the Alkylation Unit without any HF offsite release from 1966 when the unit was commissioned until 1997 when the unit was modified to use MHF. This 51 year record includes thousands of earthquakes, including the Northridge and Sylmar quakes that registered more than 6.5 on the Richter scale. As TORC has previously stated to the public, we will continue to evaluate emerging alternative Alkylation Catalyst technologies. However, there is currently no scientific or technical justification for including an option to phase-out MHF for an alternative Alkylation technology in the PR 1410 conceptual rulemaking framework because no commercially viable alternatives exist at this time. Again, since 1997, the Torrance Refinery has been safely using MHF without an offsite release. Additionally, the Torrance Refinery used HF in the Alkylation Unit without any HF offsite release from 1966 until 1997. Therefore, there is no basis for a potential timeline for the phase-out of MHF based on the potential for a future, albeit unknown release with offsite consequences that may or may not ever occur. Despite the MHF testing, modeling, District permit approvals, and reliable unit performance at both refineries, District staff forge ahead and ignores precedent in its apparent rush to judgement against MHF by presenting a potential phase-out timeline of approximately eight years, without providing any sound scientific basis or justification based on credible evidence for such an unrealistic and infeasible deadline. In Slide 16, for Option B to determine if the MHF phase-out will be six or eight years, District staff has included a “Technology assessment in 2 years,” presumably after rule adoption, and “[i]f [the] technology assessment concludes additional time needed, phase-out [will be] MHF no longer than 8 years.” If the alternative “technology assessment” in two years shows that alternative Alkylation technologies have failed to achieve commercially viability or are still several years away from a legitimate technical assessment, or if ever becoming viable, would the District use this assessment to delay its currently proposed eight-year MHF phase-out? As it stands now, the answer is “No” as Option B has a hard or forced phase-out deadline. Accordingly, this would mean that regardless if the technology assessment showed that an emerging alternative Alkylation technology will not be commercially available in now four or six years, Option B would still force that an emerging technology must be installed at the Torrance and Wilmington Refineries. Installing such an unproven Attachment A TORC’s Comments and Responses April 27, 2018 -61- technology is fraught with potential process and personnel safety issues and environmental concerns, and would introduce more risk to Refinery workers and the community than compared to MHF. This is not good policy and such a rulemaking concept should be abandoned. Is this assessment also intended to review the status of feasible and safe Tier III enhancement options the refineries may propose as part of the negotiation process, particularly for consistency with API- 751? TORC requests that any alternative “Technology assessment” included in a PR 1410 rulemaking framework must not conflict, be inconsistent, or add any additional burdens to what refineries are currently required to comply with under existing state regulations. For example, California refineries are already required to look at inherent safety measures under the recently enacted PSM regulations (8 CCR §5189.1(l)) adopted by CalOSHA and new CalARP Program 4 regulations (19 CCR §2762.13) adopted by the CalOES. Both of these recently-enacted regulations have mirror requirements for refineries to conduct a Hierarchy of Hazard Control Analysis (“HCA”). Under these regulations, there are five triggers when refineries are required to conduct an HCA: (1) existing processes; (2) Process Hazards Analysis (“PHA”) scenarios that may result in a major incident; (3) recommendations that result from a major incident investigation; (4) Method of Change review of a major change; and (5) during the design and review of new processes, new process units or facilities, and related process equipment.14, 15 Perhaps most significantly, both of these regulations establish risk reduction targets that must be assessed through an HCA. Specifically, the HCA requires refineries to develop recommendations to eliminate risks posed by process safety hazards “to the greatest extent feasible” using first and second order inherent safety measures.16, 17 Any remaining risks must be reduced using passive, active, or procedural safeguards.18, 19 TORC emphasizes the first and second order inherent safety measure evaluation that is embedded in the HCA. According to the new PSM and CalARP Program 4 regulations, inherent safety20, 21 is defined as: 14 See 8 CCR § 5189.1(l)(1), (2). 15 See 19 CCR § 2762.13(a), (b)(1)-(4). 16 See 8 CCR § 5189.1(l)(4)(E). Note that under the new PSM regulations “feasible” is defined as “[c]apable of being accomplished in a successful manner within a reasonable period of time, taking into account health, safety, economic, environmental, legal, social and technological factors.” See 8 CCR § 5189.1(c). 17 See 19 CCR § 2762.13(f)(1)-(3). Note that under the new CalARP Program 4 regulations “feasible” is defined as “[c]apable of being accomplished in a successful manner within a reasonable period of time, taking into account health, safety, economic, environmental, legal, social and technological factors.” See 19 CCR § 2735.3(v). 18 See 8 CCR § 5189.1(l)(4)(E). 19 See 19 CCR § 2762.13(f)(1)-(3). 20 See 8 CCR § 5189.1(c). 21 See 19 CCR § 2735.3(cc) Attachment A TORC’s Comments and Responses April 27, 2018 -62- An approach to safety that focuses on eliminating or reducing the hazards associated with a set of conditions. A process is inherently safer if it eliminates or reduces the hazards associated with materials or operations used in the process, and this elimination or reduction is permanent and inseparable from the material or operation. A process with eliminated or reduced hazards is described as inherently safer compared to a process with only passive, active and procedural safeguards. The process of identifying and implementing inherent safety in a specific context is known as inherently safer design. First Order Inherent Safety Measure. A measure that eliminates a hazard. Changes in the chemistry of a process that eliminate the hazards of a chemical are usually considered first order inherent safety measures; for example, by substituting a toxic chemical with an alternative chemical that can serve the same function but is non-toxic. Second Order Inherent Safety Measure. A measure that effectively reduces a risk by reducing the severity of a hazard or the likelihood of a release, without the use of add -on safety devices. Changes in process variables to minimize, moderate and simplify a process are usually considered second order inherent safety measures; for example, by redesigning a high-pressure, high- temperature system to operate at ambient temperatures and pressures. As part of the HCA, refineries must review and analyze a broad range of information related to first and second order safety measures and passive, active, or procedural safeguards. The refineries must develop risk-relevant data, identify process safety hazards, and review “all” inherent safety measures and safeguards for each identified process safety hazard.22, 23 The refineries must also review “publicly available information on inherent safety measures and safeguards.”24, 25 This review must include inherent safety measures and safeguards that have been “achieved in practice” by the refining or a related industry, as well as measures required or recommended by a federal, state, or local California agency in a regulation or report.26, 27 Accordingly, as detailed above, through the HCA process under the new PSM and CalARP Program 4 regulations, all California refineries, which by default includes Torrance and Wilmington, will be required to implement feasible inherent safety measures to address hazards. Through this process, at the required triggers, TORC and Valero will be required to review MHF Alkylation to determine if there are feasible alternatives (i.e., safety measures and safeguards). Therefore, if any “Alternative technology assessment” concept is included in a PR 1410 rulemaking framework, the District’s framework should be consistent with the new PSM and CalARP Program 4 HCA requirements. To this end, to avoid conflicts, inconsistencies, or additional burdens, TORC 22 See 8 CCR § 5189.1(l)(4)(C). 23 See 19 CCR § 2762.13(e)(3). 24 See 8 CCR § 5189.1(l)(4)(D). A CalOSHA representative has tentatively stated that this information is limited to information in English from the United States. 25 See 19 CCR § 2762.13(e)(3). 26 See 8 CCR § 5189.1(l)(4)(D). 27 See 19 CCR § 2762.13(e)(3). Attachment A TORC’s Comments and Responses April 27, 2018 -63- recommends that the District defer to the HCA process for any “Alternative technology assessment.” Since CalOSHA and OES are the expert agencies related to PSM and hazards analysis and response, the District should defer to these agencies for any assessment of technology that address safety or hazards. We also note that API-751 is used throughout the U.S. and globally to promote safe operation of M/HF Alkylation Units, and the API is beginning to update this recommended practice. Slide 17 - TWO POSSIBLE RULE CONCEPTS TO CONSIDER In slide 17, District staff graphically represents what it presented in slide 16 regarding the currently proposed two MHF phase-out Options, A and B. Staff’s current proposed PR 1410 conceptual rulemaking limiting the MHF phase-out to two options is inconsistent with and in opposition to the direction provided to stakeholders by Governing Board Chair Burke and Refinery Committee Chair Parker at the end of the January 20th Refinery Committee meeting. At the end of this meeting, the Chairs specifically directed the respective stakeholders – both refiners, District staff, and activist groups – to get together and work out a mutually satisfactory agreement that would enable the District to resolve outstanding issues and proceed to a conclusion on the rulemaking. District staff was then further directed to report back on the progress of the parties’ negotiations at the next Refinery Committee meeting. Importantly, the Refinery Committee told the stakeholders, including staff, to resolve outstanding issues and never directed staff to unilaterally formulate and/or recommend new options that were inconsistent with the options presented on January 20th. Following the guidance provided by the two Chairs at the January 20th Refinery Committee meeting TORC proceeded in good faith to meet with both District staff and the TRAA to begin a dialogue on a potential resolution to the PR 1410 rulemaking. As part of this dialogue, again acting in good faith based on the two Chairs’ direction, TORC expended considerable effort and resources to evaluate and develop potentially feasible Tier III safety enhancements that could provide real and valid risk reduction to further protect Refinery workers and the community, which District staff appeared receptive to in the several meetings we had with them following the January 20 th meeting. The evaluation of these safety enhancements were in lieu of what staff had presented at the January 20 th meeting since staff’s presented Tier III mitigation actually introduced more process and personnel safety risks. The exclusion of Tier III options from District Staff’s presentation is remarkably disingenuous and highlights its lack of understanding and experience regarding risk management and process safety, especially considering that its Tier III mitigation “approach” presented on January 20th would never be built in the context of a Refinery process unit due to the additional inherent process and personnel safety risk the scheme would have created. District staff has no experience in engineering, designing, and/or constructing Refinery process safety systems, and as a result, it should not dictate what is considered safe or will provide risk reduction. Attachment A TORC’s Comments and Responses April 27, 2018 -64- Just as importantly, there is no such thing as “Fail-Safe” in any industry, as evidenced by staff’s Tier III mitigation proposal to dome or undergrounding all or portions of the MHF Alkylation Unit, which could have effectively created an extremely flammable and/or explosive environment that would threaten Refinery workers, the community, and the state’s CARB gasoline supply. In other words, through this strawman, staff has unilaterally eliminated the opportunity for Refinery Committee members to consider any “Tier III mitigation with no MHF phase-out option” on April 28th, with no justification other than misrepresenting the Refineries’ position on staff’s originally proposed Tier III mitigation. Again, the Tier III mitigation that staff presented on January 20th was clearly not “Fail Safe,” because it would have created more process safety and personnel risk than any safety benefits these mitigation measures would allegedly produce. Therefore, TORC emphatically and respectfully requests that the District introduce an Option C – Tier III mitigation with no MHF phase-out option, in line with the option staff presented on January 20th, and present this to the Refinery Committee on April 28th for their further consideration. To do otherwise will plainly show staff has eliminated the Tier III option to produce a predetermined outcome for an MHF phase-out, without any compelling evidence or support. Additionally, staff’s desire to achieve a pre-determined outcome resulting in a ban or phase-out of MHF, which is the purview of members of the Governing Board, is supported by quotes attributed to staff in the media over the past year, as well as in Working Group meetings. The potential closure of both Refineries as a result of Options A and B, and the resulting supply shortages, and price increases represents the missing “fourth option.” To avoid the threat of Refinery shutdowns, as warned by the CEC, TORC urges the District staff to introduce a new Option C, “Tier III mitigation with no MHF phase-out option,” in line with the Tier III approach staff presented on January 20th, and provide the Refinery Committee with the opportunity to consider this third option at the April 28th Refinery Committee meeting. If District staff fails to do this, then staff will have removed any incentive for TORC to continue to evaluate and invest in Tier III MHF Alkylation Unit safety enhancements as they are costly and would only be operable for minimal amount of time before the MHF Alkylation Unit would be forced to shut down to comply with the District’s MHF phase-out requirement. Thus, by failing to include an Option C in keeping with District staff’s initial proposal, District staff could be seen as purposefully undermining the ability of PR 1410 to achieve additional real and valid risk reduction, which should be the focus of the rulemaking, rather than insisting on an unachievable “zero risk” threshold that no other industry, program, or policy is subject to. If District staff chooses to ignore the inclusion of an Option C, the phase-out deadlines District staff proposes under either Option A for Sulfuric Acid and Option B for an emerging alternative Alkylation technology are infeasible. Staff has provided no justification for the option deadlines and significantly underestimates the time needed for appropriately designing, engineering, procuring, delivering, permitting, and implementing each option, if they were to be pursued. Regarding the PR 1410 rulemaking schedule, District staff did not include in this presentation what the schedule would look like with if an MHF phase-out option is included. Currently, the District’s Attachment A TORC’s Comments and Responses April 27, 2018 -65- February 2, 2018 Rule and Control Measure Forecast currently shows PR 1410 going to the Governing Board for potential consideration in July 2018.28 Based on the extensive comments that TORC, Valero, and other Working Group members have provided to the District to date, and the lengthy and complex CEQA and Socioeconomic processes that will be required for the PR 1410 rulemaking effort with an MHF phase-out option, TORC finds it difficult to imagine how the District will be positioned to draft and release for public review and comment the following statutorily required rulemaking steps by the previously-announced July 7, 2018 target date or even by even the end of this year: Draft rule language; CEQA Notice of Preparation/Initial Study; Draft Staff Report; Draft EIR; Draft Socioeconomic Report; and Revised rule language. Considering the complexity of these regulatory requirements, especially the CEQA and Socioeconomic Report, that are needed to address the District’s current PR 1410 conceptual rulemaking structure, the current schedule seems infeasible. TORC reconfirms through these comments that we are prepared to continue to work in good faith with District staff and interested stakeholders on a PR 1410 rulemaking “approach” that includes Tier II and Tier III safety enhancements with no forced MHF phase-out in keeping with the spirit of Governing Board Chair Dr. Burke’s and Refinery Committee Chair Dr. Parker’s direction at the end of the January 20th Refinery Committee meeting, to reach a potential amicable resolution on PR 1410. For all the reasons above, TORC emphatically requests that the District include an Option C, which is Tier III mitigation with no MHF phase-out, and present this to the Refinery Committee on April 28th for their further consideration. To do so otherwise, will only further reinforce the view that staff has a predetermined outcome for an MHF phase-out. 28 See http://www.aqmd.gov/docs/default-source/Agendas/Governing-Board/2018/2018-feb2-018.pdf?sfvrsn=6. From: Sent: To: Cc: Subject: Herb Stark < ptl 7stearman@gmail.com > Sunday, May 13, 2018 7:01 AM cc CityClerk Consent Calendar, Item H We hear from the City Council all the time that RPV is becoming the playground for the South Bay. Residents are complaining about traffic and crime. Del Cerro is a mess and Ladera Linda is fast going that way. The City Council blames social media, not in their control, while the City Manager proclaims that staff is only using social media to notify residents of coming events. The problem is that the city web page, Facebook, and Next Door are all open to the world. So on one side you have the residents, oh by the way are paying for all this, saying enough is enough and the staff saying come one come all. Staff's counter to this is that all we are doing is making our residents aware of the programs available to them. Look how many people show up for our planned events. I wonder how many are RPV residents? There are ways to notify residents of coming events without blasting it to the world. There is the resident mailed Quarterly Newsletter with recreation inserts, the activity guide, and the city's listserver which can be limited to residents only. On the consent calendar, item H, for this coming city council meeting, staff is requesting $8,500 for the quarterly newsletter. This should only be granted provided staff stops all advertising of coming events on social media. Herb Stark Rancho Palos Verdes 1 H. From: Sent: To: Teresa Takaoka Monday, May 14, 2018 9:12 AM Nathan Zweizig Subject: FW: City Council Meeting, May 15, 2018 -Consent Calendar, Item # H -Newsletter additional Funding Late corr From: Mickey Radich [mailto:mickeyrodich@gmail.com] Sent: Saturday, May 12, 2018 4:06 PM To: CC <CC@rpvca.gov> Subject: Fwd: City Council Meeting, May 15, 2018 -Consent Calendar, Item# H -Newsletter additional Funding I think having Item # H on the Consent Calendar is an appropriate time to begin a conservation on RPV's Parks Dept. advertising policies to reach RPV residents, before you approve the additional $9,500 to fund our quarterly Newsletters. We, at Ladera Linda, have repeatedly questioned the wisdom of using Social Media to advertise Park activities throughout our Parks and Reserves especially since Ladera Linda has been recently inundated with overwhelming traffic problems, as you well know. Something must be done to correct this continual problem very soon because it will become only worse when a new park is built. It has already happened at Del Cerro Park. At the last City Council meeting I spoke against using Social Media, such as Facebook and Next Door, to advertise Parks and Reserve events. In the past the City Council had instructed our Staff not to use Social Media to advertise these events. At the meeting, our City Manager stated that Staff does NOT use Social Media such as Facebook to advertise Park events. Five minutes later, our Director of Parks & Rec., Corey Linder said that he DOES use Social Media such as Facebook and Next Door to advertise Park events. Their viewpoints are completely opposed and I think this is the heart of the problem. No one is following the instructions from the City Council. We find that the internet is full of RPV advertising their events and their recent "Kids to Park's Day" for example has drawn responses from as far away as New Jersey. The Staff should also coordinate events so that they do not conflict with each other ie; having A YSO soccer on the same day as a 100 person hike and also a large activity at Ladera Linda Park. I think that our printed quarterly Newsletter, mailed to all residents, along with the Rec.& Parks quarterly Activity Guide and the List Serve email addresses for residents are the only forms of advertising that should be used to inform our residents of upcoming events. It is very important to inform only our residents and no form of Social Media should be used to advertise any Park events. Our Parks are meant to be for our residents needs and not the needs of outside interests that cause traffic problems. Every resident presently receives a mailed copy of our Quarterly Newsletter. Other cities may advertise on Social Media, but they have the capacities to handle this influx of traffic and have the available parking. They also coordinate their events and promote using businesses in their cities. As a matter of fact RPV advertises on Social Media much more than most of our surrounding cities such as Hermosa Beach, Torrance, Rolling Hills Estates, Lomita and Palos Verdes Estates. I am asking the City Council to follow up on their original instructions and re-instruct the Staff to stop all forms of Social Media advertising for Rec. & Park events. We do not need to create these kind of traffic problems in our neighborhoods. 1 H. From: Sent: To: Cc: Subject: Attachments: Dear Council Members, Donald Bell <dwbrpv@gmail.com> Monday, May 14, 2018 4:06 PM CC; CityClerk Donald Bell May 15, 2018 Council Meeting Agenda -Consent Item H Social Media Charts 2018_05_12.pdf; A TTOOOOl.htm; Social Media Data 2018_05_12.pdf; A TT00002.htm I will submit a request to speak to Council regarding Consent Item H representing the Ladera Linda Homeowners Association as a member of our Ladera Linda Park Committee. My comments will include reference to these PDF's: 1 ~. City Official Facebook Page Number of Postings for Events Located within their city in last 3 months1,3 Rank (volume of postings) City Population (as of 2010) Facebook Postings for Events per 1000 residents in past 3 months Rank (postings per 1000 residents) Rancho Palos Verdes https://www.facebook.com/CityofRanchoPalosVerdes 70 1 41643 1.68 2 Hermosa Beach https://www.facebook.com/pg/CityofHermosaBeach/ 31 2 19506 1.59 3 Torrance https://www.facebook.com/TorranceCA/ 20 3 145438 0.14 6 Rolling Hills Estates https://www.facebook.com/CityRollingHillsEstates/ 16 4 8067 1.98 1 Lomita https://www.facebook.com/LomitaCity 12 5 20256 0.59 4 Palos Verdes Estates https://www.facebook.com/CityofPVEstates/ 2 6 13438 0.15 5 Rolling Hills None2 0 7 1860 0.00 7 San Pedro None5 0 7 80065 0.00 7 Redondo Beach None4 0 7 66748 0.00 7 1 An event is any function in which general public is invited to attend on the City's official Facebook page. The "event" may or may not be officially sponsored by the city, as long as the event is held within city limits. Does not include City Council, forums, or other similar government meetings. Does not include postings after the event showing pictures or other outcomes. It does include postings of calendars of events and postings or links to City newsletters. Multiple postings for the same event are counted as separate, since they represent specific City effort to promote such events, remind viewers of when they are, and reach the widest audience possible. 2 Could not locate an official facebook page for this city. 3 City of Torrance has a regular video feed on their Facebook page….these feeds have not been watched, they may or may not include publicity of City sponsored events. Reported postings does not include content from these video feeds. 4 City of Redondo Beach does not have a general Facebook page, just specific pages for the Performing Arts Center and the Library 5 City of San Pedro has a link on their home page to Facebook, but this just takes the user to a login screen for the users own information. In other words, no official facebook page. From: Sent: To: Subject: Attachments: Late corr Teresa Takaoka Monday, May 14, 2018 9:29 AM Nathan Zweizig FW: Facebook publicizing! Facebook Research 2018_05_12.pdf From: grapecon@cox.net [mailto:grapecon@cox.net] Sent: Sunday, May 13, 2018 8:15 AM To: Gabriella Yap <gyap@rpvca.gov>; CC <CC@rpvca.gov> Cc: CityManager <CityManager@rpvca.gov>; Cory Linder <CoryL@rpvca.gov> Subject: FW: Facebook publicizing! Hello Gabi: Thank you for your response. While the "Movies in the Park" posting yesterday triggered me finally sending an email, my frustration is certainly much broader than that specific event. I spent about 6 hours yesterday morning doing some research on all the cities you mention below (with the exception of Long Beach, which has over 10X the population of RPV and surely is not worthy of comparison!). I also included the cities of RH, RHE, and PVE. I looked at each city's official Facebook page postings for the past 3 months (February 12 to May 12, 2018) and counted the number of Facebook posts for city promoted events held within their own city. Some events may be hosted by other groups, but as long as the city re-posts and encourages attendance, and the event was held within the city, it counted. Here are the results, both by absolute number of postings as well as by the number of postings per 1000 residents: 1 k 20% 0% 3 :2.SO 100% 2.00 150 LOO 0,.50 o_oo Attached is a file with the specific tabulated data and additional notes -I am trying to be as straightforward an honest in my presentation of facts. If the above charts do not show up in your email, please open the attachment, which includes raw data and the charts. 2 As you can see, the City of RPV had by far the most event postings on their Facebook page (more than 2X the closest second City, which was Hermosa Beach). The City of RPV was 2nd in the number of postings per 1000 residents ... only RHE was higher, and that was no doubt due to the fact that RHE has relatively low population and a relatively high number of events at the Peninsula Center/ Promenade, which certainly benefits local businesses there. It is worth noting that some of these other cities are much better equipped than RPV to handle larger crowds and events .... consider all the parking at the Peninsula Center. ... I was very interested in what I saw with the City of PVE .... they only put up 2 posts for events in their own city, but put up numerous posts for events in other cities (I did not count them, but I can assure you they readily post events happening in RPV and other areas). The City of PVE seems to have taken the approach of not encouraging people to come to their city, and at the same time, encouraging their residents to go elsewhere for events! Anyway, the point of all this is to try to get to the bottom of whv RPV City Staff feels it necessary to use unlimited access social media sites, like Facebook, to encourage attendance to events held within the City. Even Nextdoor, while admittedly more limited than Face book, lnstagram, or Twitter, does extend to other nearby areas outside of RPV. You have stated "that most people in LA County are not looking at RPV to fulfill (the) need" for similar recreational events. How do you know this? Why go to a movie in the park in the middle of the urban city, when the City of RPV hosts movies in beautiful suburban parks with expansive views (and lower crime rates!), following a no doubt picturesque sunset overlooking the ocean? Do you have factual data to support the position that people will not travel to adjacent cities for a movie in the park? What about events like all the hikes that the City, PV Lands Conservancy and Docents have (and the City promotes) in our scenic preserves (which, by the way, are not as common in the urban cities you cite in your email)? Are you trying to say people are not coming from all over Los Angeles County to participate in those types of events? Does the city ask everyone coming to their events to sign in, or fill out a form, asking them what City they live in? And perhaps asking how they heard about the event? If you already do this, can you please share some factual data to support what I presume (but could be wrong) is your "speculation" about who is attending the various events in the City? What was the breakdown in attendance (by city of residence) for the recently held (and completely overcrowded) "Meet he Goats" event at PVIC? How did all those attendees hear about that event? Unless the City can provide factual data showing that the use of Facebook and other social media is not attracting folks from outside of RPV to attend City events, I would propose the City immediately stop all publicizing of events on Facebook, lnstagram, Twitter, and yes, even Nextdoor. Instead, the City should rely on your newsletter (which goes to every resident in the city via US mail) and your Listserv notices, which requires registration as an RPV resident. Thank you Gary From: Gabriella Yap <gyap@rpvca.gov> Sent: Friday, May 11, 2018 5:41 PM To: gr:_apecon@cqx.net; CC <CC@rpvca.gov> Cc: CityManager <CityJYlan<J.filt[@rpvcgcE.Q.Y>; Cory Linder <~ory_l@rpvca.gov> Subject: RE: Facebook publicizing! Hello Gary, 3 I'm sorry that you feel frustrated. The City does use Facebook to reach out to our residents, and, yes, anyone with a computer can read it. I would like you to consider a few things. You speculated about whether people from other areas would come, and admitted you have no idea if they would. Below is a sampling of the typical summer movie events near us, without even going into cities further away. As you can see, many cities provide this type of entertainment for their residents, and people don't need to come all the way to RPV to watch a movie in the park. The majority of people we're getting at these events are Peninsula families. Realistically, how often do you drive to other cities to participate in their activities? If this wasn't available to you, how likely would it be that you drive out to another city for an event like this? .b11.P.§..:./.l..ww'.t£.,~-<!Dl2.l:.Qt:Qf,sJe nsL;;i.r:S:..9.mi .. ~yg n tl!J1QYJ.~5.::J..IJ.::1b..§.:.P..a rJsL .b.!tJ?jLwww. vi sj.!red on d 9 ... ,rnrnL.~e as id_g-la goon _::.1.11 ov i ~--~'.b t rn.! .btm~;./.L ww.w.JQJ.I? nc;.~QJ .. ,RQYLQ_~lf-c ity I rec r_~_?.1!9JJ.L~.P.-~£l.9.!.::gye n 1~/m9v i e 2.::i n-ili e-Q.ill"Js .bJJ:.R.;LLw .. ww_JQmJt?.,fo m I c i1Y.ti..E.llL2lLU.Q.ld.IJS::gmfgJ:.t!.2'J .. Q m ita-Pa rks-S pe ci a 1-E.ve IJ.1.~:±rn-17 :.Pill h!!P.JL\'ILWW .. J.Q.!JR beach .gQJ_/_pa rkL re<a:: .. ~_;,:i_tj.Q.IJ:..PJ:.9g ra nJ2.Lp ro gram .s-a n d :fl.£ ssg~f.?_l:!lll mgr:I<!.m i ly·-e nt e rta in me .IJ!f_ni.ov i ~i:Jn:.t.h~-= P9.rkL .b..U12.:/L'0£WW,_hg..cm9..i£1 .. Rfh.org/i nde_>.<_,a spx? recor.9J9..::.1.:2.§4~g~=f .. Q http://www.lawaterfront.org/events.php I hope this helps give a little more perspective about some similar recreational events that are available to the public, and that most people in LA County are not looking at RPV to fulfill that need. Just something to think about. Thanks. Gabi From: grapecon@cox.net [mai!to:grapecon@cox.net] Sent: Friday, May 11, 2018 2:30 PM To: CC <~_c;_@.rnvca.gov> Cc: CityManager <CityManaggr.@ntYf.9.:£.0\.'.> Subject: Facebook publicizing! Hello Mayor and City Councilmembers: I continue to be frustrated at the City use of Face book to publicize events. This just appeared today. Staff tells us that this is only targeted to residents, but the reality is that this can reach anyone in the world with a computer or internet connected device. OK, so we aren't going to have anyone travel from Africa to RPV for this. But will people come in from Torrance, San Pedro, Wilmington, South Central, Santa Monica, Burbank, San Bernardino (just to give a few examples)? I have no idea. Consider that there is at least one AYSO Spring Select soccer team (maybe more) that comes from Santa Monica every weekend for a 1 hour soccer game. Given the population of LA County alone is greater than 10 million, even a 0.01% turnout would be over 1000 people!!!! I am not against the city having fun, family friendly activities at appropriate venues for the primary benefit of the RPV residents who are paying for them (via their tax dollars) ... but "broadcasting" these events on Face book is not prudent. I respectfully urge you to address the use of "social media" to publicize city events with staff. The sooner the better. Please don't continue to promote RPV as a playground for all of LA! Thank you Gary Randall 4 MUv1a...., PARK • In the "1v1ovies · t1 ., u1 . 1e Park" R ... Sununer 2018 eturns for t~ 5 City Hermosa Beach Torrance Rolling HH!s Estates Lomiw P;:ilos VerdE)s Est:at(!s Rolling Hi!!:> San Pedro Official Fncebook Page ~·i1qy:Jf.v, '.:'.··'.'. .. (~C~'..t~:~?.PJ<.~!-~91.1!/(\.is_f/fbiY~kP~\!.'.YYs <.!~'.~ .httr.i;,;J/i;\'!:.\".« "f;/.~:q_(";Ok,{'.~)r>i/PH/:1t';~-::\h<::1!1:.1-:;-d81.1,~~;!J !~q>: //·.\y~y: ,f;~~.:ti.?~~9.~::.f/.\.fn8.i.\.Y..~\Q.!i.\r.:~i: .i~A):'L!.Li.J ~_Hp;,:_~/ /s'.'i.W).~\!,\'.~ ~-:~1.!,-Y!.El/L.~·1.t\~ii.,::fJ~ :'. Rndondo 8e<.1ch None 4 Number of Postings for Events LocJted within their city in last 3 rnonth'i-1"~ 70 31 2.0 Hl 12 () () 0 R~nk {vo!orn~ Clty Popul ... ttion of postings) (a• of 2010) 1 41643 19506 145438 4 8067 20256 6 13438 1860 8006$ 65748 F.;icebook Postings for Events per 1000 residents in past 3 months 1.68 1.59 0.14 1.98 0.59 O.lS 0.00 0.00 0.00 Rank (postings per 1000 residents) 2 7 1 An event ts any function in which general public is invited tc att(!nd on the City's offdal fac~book page. The "event'' may or may not be offidalty sponsored by the city, as !ong .:is th~ event is held within city !imils, Does not. include City Cuunci!, forum~~ ur olher ::.imH<o\r government rm~ctings, Does not iodude postings after the event showing pictures or oth~r outcomr.5. It does lndud~~ postings of calend<irs of eve-nts and po~aings or links to City newsletters. Mu!tip!P posting!'> fm the i;amc-event are rnunteri as $epar~te, sinrn they represent specific City effort to promote such events, remind viewer!> of wh<'H1 they are, and 1 each the widesl audiern:e po.ss.lble. ;: Could not !ocute an official focnbook p~g~ for this (:ity, ~City of Torrance ha$ a regular v!d~o feed on !heir Fa1.ebonk p.cige ... ,thf~::.e feeds havf? not been watched, they may or may not include publicity ot City sponsored events. Reponed postings does nnl" include content. from these video tf!ed;;. 4 City of Redondo Bench dnes. not have a gcnNa! Facebook page1 just specific pages for the Performing Arts Ceni::er and the Library ::, City of San Pedn) has~ link on their home page to Faccbook, but this just takes the user to a login screen for the users own information. ln other words, no offld{I! t(ltebook page MEMORANDUM RANCHO PALOS VERDES TO: FROM: DATE: SUBJECT: CITY MANAGER'S OFFICE HONORABLE MAYOR AND CITY COUNCIL MEMBERS KIT FOX, AICP, SENIOR ADMINISTRATIVE ANALYST~ MAY 11, 2018 LATE CORRESPONDENCE REGARDING THE PROPOSED LETTER IN OPPOSITION TO SENATE BILL NO. 1302 (MAY 15, 2018 -AGENDA ITEM 'N') On May 10, 2018, Senator Lara ordered Senate Bill No. 1302 to the inactive file (see attachment). Nevertheless, Staff believes that the City Council should still express its opposition to the bill in the event that it is bought back to the senate floor at some future date. Attachments: E-mail regarding the status of SB 1302 (dated 5/10/18) M:\Legislative lssues\SB 1302 (Lara)\20180511_CC_LateCorrespondence.docx N. From: To: Subject: Date: capublic(i1'ic.ca.qov K[t_EQ;s SB-1302: Floor Results Thursday, May 10, 2018 11:21:44 PM Floor Results ***Please do not reply to this automated message*** Tracking Notification: SB-1302: Cannabis: local jurisdiction: prohibitions on delivery. On 10-MAY-18 the following history action was applied: "Ordered to inactive file on request of Senator Lara." From: Teresa Takaoka Sent: To: Monday, May 14, 2018 2:48 PM Nathan Zweizig Subject: FW: RPV-EDCO's FY 18-19 Rate Adjustment Request Late corr From: SUNSHINE [mailto:sunshinerpv@aol.com] Sent: Monday, May 14, 2018 2:38 PM To: CC <CC@rpvca.gov> Cc: EZStevens@cox.net; Elias Sassoon <esassoon@rpvca.gov> Subject: Re: RPV-EDCO's FY 18-19 Rate Adjustment Request MEMO from SUNSHINE TO: RPV City Council, Staff and interested parties RE: Once again it is time for me to remind the City Council that the rates for trash collection keep going up and the reward for recycling has remained the same. The prize in the drawing started out as a year's worth of trash collection. Have another look at the program. Does anyone really go out of their way to be sure to recycle something every week just for a chance to win $250.00? Processing the drawing takes a lot of Staff Time and there are printing costs. The HOAs seem to have run out of projects that qualify for the recycle money beautification grants. I have a new suggestion. It would make a huge difference in restoring views of our coast and save a lot of maintenance money if our recycle money income was spent on eradicating acacia bushes/trees. Roadsides, park lands, city owned lots and preserve lands are infested with the nasty, ugly plants. If the public can see them, they should be done away with. Start with Lower Point Vicente Park In a message dated 5/14/2018 10:33:49 AM Pacific Standard Time, listserv@civicplus.com writes: View this in your browser EDCO Disposal Corporation is requesting a residential rate adjustment request of 4.12%. This percentage is calculated based on the methodology and national price indices out!lned in their agreement A public hearing is set on 5/15/18 to present this request to the City Council for consideration. For a copy of the staff report, click on this link: http://rpv.granicus.com/MetaViewer. php?view id=5&event id= 1257 &meta id=55408 The Council meeting will be held at Hesse Park, 29301 Hawthorne Blvd, RPV 90275 at 7 PM. Thank you. RPV Public Works Publicworks@rpvca.gov * * * * * * * ·k * ·k * * * * * * * * * * * * * * * * * * * ·k * * * * * * * * * * * * * * * * * * * 1 This message is been sent by the City of Rancho Palos Verdes as part of a "Notify Me" Listserv category you are signed up for. Please do not press "reply" when responding to this message, it is an unmonitored email address. You can make changes to your subscription by visiting http://www.rpvca.gov/list.aspx. E You are receiving this message because you are subscribed to Solid Waste and Composting on www.rpvca.gov. To unsubscribe, click the following link: Unsubscribe 2