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Delaware panel hears appeal of refinery permit

Randall Chase, Associated Press

DOVER, Del. (AP) -- A state zoning board's decision on whether a new crude oil transfer operation should be allowed at a Delaware refinery could cost the state economy significantly if it sides with environmentalists who argue the law doesn't permit it.

Delaware's Coastal Zone Industrial Control Board convened Tuesday to hear arguments in the high-stakes appeal of an air pollution permit issued to PBF Energy's Delaware City oil refinery. It must decide if the transfer operation is allowed under a 42-year-old law designed to protect Delaware's coastal environment from industrial pollution.

The Sierra Club and Delaware Audubon Society are challenging the air quality permit granted by Delaware's environmental secretary in May.

The transfer operation involves loading crude oil onto barges at Delaware City for shipment to another PBF refinery in Paulsboro, N.J. That barge loading operation is part of a larger transfer operation in which PBF brings crude oil by train from various sources, including tar sands oil from Canada, to a new rail loop it built near the Delaware City refinery.

Environmental groups argue that PBF's crude oil transfer operation involves new facilities and new activities not allowed under the 1971 Coastal Zone Act, which prohibits bulk product transfer facilities. They argue that the barge operation cannot be separated from the rail loop, which can accommodate hundreds of tanker cars each week, because some of the crude oil is transferred from the train cars to storage tanks, then on to the barges. They also argue that the rail yard itself is outside the geographic footprint of the refinery that was allowed as an existing nonconforming use under the 1971 law.

The refinery, joined by the Department of Natural Resources and Environmental Control, argued that the board does not have jurisdiction to hear the appeal because the permit issued by DNREC was an air quality permit, not a permit required under the Coastal Zone Act. Refinery attorney Bart Cassidy said the company sought neither a coastal zone status decision nor a coastal zone permit for the barge transfer operation.

A majority of the seven board members at Tuesday's hearing seemed receptive to that argument, voting 4-3 that they did not have jurisdiction over the appeal. But the vote fell short of the five required for an official board decision, leaving members no choice but to proceed. Similarly, the board deadlocked short of the required five-vote majority on whether the environmental groups had standing to bring their appeal.

Ken Kristl, an attorney for the environmental groups, argued that the appeal was rightly before the board because DNREC Secretary Collin O'Mara specifically addressed the Coastal Zone Act in granting the air quality permit.

In his order, O'Mara determined that the docking facility was an allowable nonconforming use under the law and did not require a coastal zone permit.

Kristl also argued that the status of the docking facility under the law cannot be divorced from the rail operation that delivers the crude oil being loaded onto the barges.

"The rail loop is an essential part of transferring that crude oil from the tanker cars to the docks," he said. "... They're all one piece together."

"That's bulk product transfer... No operation like that has ever occurred at this refinery," Kristl added.

Cassidy, the refinery attorney, said the docking facility existed before passage of the Coastal Zone Act, and that the refinery is not doing anything fundamentally different than it has in the past, including receiving and shipping unrefined crude oil.

"It is simply a transfer of material," Cassidy said, adding that the Coastal Zone Act requires a balancing of environmental and economic factors, and that if the new crude oil transfer operation was disallowed, "our refinery cannot be economically viable."