Environmental Management Systems Handbook for Refineries

Polution Prevention Through ISO 14001

Nicholas Cheremisinoff

• Publisher: Gulf Publishing Company
• Year: 2013
• ISBN:
  9780127999753
• Topic: Biological Sciences
• Subtopic: Environmental Science
• Index: Biological Sciences

This book offers refineries a practical guide for implementing environmental management systems (EMS).The author, who has implemented hundreds of successful EMS programs throughout North America, Europe, Russia and the Middle East, provides a detailed explanation of what an EMS is and how it can benefit refinery operations in complying with environmental laws and improving the overall efficiency of their operations. The author's approach has been internationally recognized as an integrated model that captures improved compliance and financial savings by reducing operating costs through dedicated pollution prevention programs.

1

Is Compliance Enough?

Introduction

This first chapter addresses this question: Is compliance enough? If your business and manufacturing operations have a good or reasonably good track record in terms of complying with current environmental regulations and standards, then the company on the whole must be doing a good job in terms of its environmental performance. Or is it?

Less than a decade ago, several books appeared on the scene that expounded the need for going beyond compliance. Most of these focused on a core principle that is explored later in this book, namely, that exceeding minimum guidelines can enhance a business’s financial bottom line through indirect benefits, such as achieving a competitive advantage through a positive corporate image as a “green” business. This and other benefits discussed later on are all true; however, there is even a greater reason—sustainability.

Sustainability has two meanings within the context of an environmental management system (EMS). The ability to preserve and stretch resources is achieved through pollution prevention and dedicated source reduction programs; waste minimization and recycling enable companies to stretch finite resources, thereby ensuring resource availability for future years of operation. This concept of sustainability is discussed in Chapter 4.

The second interpretation of sustainability is in terms of future risks to a business. In this regard, we borrow a term from the legal profession: liability. All companies, regardless of the industry sector within which they operate or how good their compliance records are, face future liabilities. What is a well-managed waste problem in today’s context may not be in the future. This is often thought of by corporations as an intangible cost for environmental compliance and is generally discounted heavily by captains of industry and business leaders. This is a mistake, for many corporations that acted within the existing legal environmental framework for many years subsequently faced huge liabilities that threatened the very existence of their businesses. Many of these examples are not widely publicized; hence, industry-sector specific examples are often difficult to provide in a general publication. However, the book includes a few examples where I was involved as an environmental forensic expert in the reconstruction of manufacturing events and their relationship to responsible care issues on the part of companies. These will help show why the intangible should be considered substantive in the long-range planning for the sustainability of any business operation.

While the focus of this volume is on the petroleum industry, a refinery and its downstream and upstream operations cross other sectors, and in terms of generalized concepts, refineries do not rely on unique business practices that set them apart from other industries. In short, from a general standpoint, the principles discussed in this first chapter, and in fact through Chapter 5, are equally applicable to all industry sectors.

As noted in the Preface, it is not the intent of this book to review in detail all the concepts, practices, and procedures associated with an EMS. The literature is rich, diverse, and extensive: almost a limitless number of resources are available both in print and on the World Wide Web (WWW), which the reader can access for the operational aspects and implementation practices of an EMS. Some of these excellent resources are referenced in various chapters, but none stands alone as an all-inclusive, authoritative source. This volume attempts to supplement an already rich and diverse technical literature with concepts and methodologies that will help a company shape its strategy in meeting several essential elements of any business—sustainability, competitiveness, and profitability—through improved environmental performance.

Environmental Cost Accounting

Introducing the Concepts

Financial calculation tools applied to the analysis of investment decisions and life-cycle costing (LCC, also life-cycle costs) are closely related techniques for evaluating investments involving expenditures for equipment, installation, services, and various infrastructure investments needed to maintain and grow a business. These investments have present and future benefits or will have an impact on future costs. Readers familiar with business financial management will recognize the process of evaluating and selecting from among investment alternatives having the same objectives as capital budgeting. Among engineers this process is referred to as engineering economic analysis. Whatever the term, the process of economic evaluation and comparison of investment alternatives encompasses a collection of analytical techniques that are tools for investment decision making. For environmental management, these tools enable a company to assess the financial benefits of alternative strategies or compare such strategies to the status quo. Ideally, investments in terms of costs, cost savings, and potential for reducing risk of environmental liability are the foundation on which smart companies base their long-term strategies, just as they do for any business. Unfortunately, there still exists a mentality among enterprises to manage the environmental issues separate from the overall business planning and strategic investments, which are the mainstream of the business. This is mistake, because in today’s world it is not possible to separate the mainstream business from that business’s environmental obligations.

The essence of any investment is to sacrifice now in favor of future benefits. A typical investment decision asks this fundamental question: Do the future net benefits from the investment outweigh the initial costs? Benefits may be in the form of additional future income or revenues, or they may be intangible and possibly nonpe-cuniary in nature.

LCC addresses the question of how best to accomplish a particular task. In other words, it assists in defining the least-cost method, taking into consideration both the initial outlay and future operating costs. LCC also involves risk assessment, in the sense that some of the strategies or initiatives under consideration require larger initial outlays and achieve lower future costs than others. In developing criteria for an investment portfolio, a business should focus on the direct costs for investments and the potential for reducing long-term liabilities. In terms of the environmental issues facing companies, this requires that attention be given to the several cost tiers.

Decisions on investing in pollution management strategies that rely heavily on end-of-pipe treatment technologies are the result of ignoring or not recognizing the true or total costs associated with pollution control and waste management. To account for all of the costs we need to recognize that they fall into four distinct categories or tiers (examples of each category follow):¹

1. Usual or normal costs.

2. Hidden or direct costs.

3. Future liability costs.

4. Less tangible costs.

Tier 1 Costs. Usual or Normal Costs

These costs include such costs to the operation as

• Pollution fees (i.e., fees paid for discharging pollutants within legally allowable emissions standards).

• Direct labor costs.

• Raw materials (e.g., feedstock chemicals, water).

• Energy.

• Capital equipment items.

• Site preparation for pollution control equipment.

• Equipment tie-ins and process modifications to accommodate pollution controls.

• Employee training.

• Permits to construct.

Tier 2 Costs. Hidden or Indirect Costs

These include such costs to the operation as

• Expenses associated with monitoring.

• Permit fees (e.g., permits to operate, permit renewals, other).

• Environmental transformation costs. (For example, costs are associated with transforming a water pollution problem into a solid waste disposal issue; an example is a dewatering operation such as a filter press to treat suspended solids in a wastewater stream. This strategy generates a sludge that requires disposal. Another example is a wet scrubber used to capture particulates to address an air pollution problem. In this example, although we eliminate or reduce an air emission problem, we generate a water pollution problem with the use of this technology. The water pollution problem may also have to be addressed by separate treatment technologies, resulting in a sludge disposal problem.)

• Environmental impact statements (EIS; depending on the nature of the project, EISs can cost many thousands of dollars and require long lead times).

• Health and safety assessments.

• Service agreements.

• Legal costs.

• Control instruments.

• Maintenance and replacement costs.

• Reporting and recordkeeping.

Tier 3 Costs. Future Liability Costs

These include such costs to the operation as

• Remedial action costs (site cleanup plus cleanup costs associated with third-party damages).

• Personal injury to workers.

• Health risks and injury to the public.

• More stringent compliance (environmental compliance is oftentimes a moving target, hence, a control technology used today may become obsolete a few years down the road).

• Inflation (e.g., this could have an impact on higher feedstock costs and energy as well as waste disposal services).

Tier 4 Costs. Less Tangible Costs

These include such costs to the operation as

• Consumer response and loss of confidence due to perceived poor environmental management (it is well recognized in technologically advanced societies that consumers and investors favor those companies that are environmentally conscious ...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• About the Author
• Preface
• Chapter 1: Is Compliance Enough?
• Chapter 2: Getting an EMS Started
• Chapter 3: Integrating Cleaner Production with an EMS
• Chapter 4: Improving Competitiveness through an EMS
• Chapter 5: Conducting Cleaner Production Audits
• Chapter 6: IER Case Study
• Chapter 7: Cleaner Production Case Studies
• Index