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1 December 2017
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Exporting Pollution (The
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U.S. oil refineries that are unable to sell a dirty fuel waste product
at home are exporting vast quantities of it to India instead.
Petroleum coke, the bottom-of-the-barrel
leftover from refining Canadian tar sands crude and other heavy oils, is
cheaper and burns hotter than coal. But it also contains more planet-warming
carbon and far more heart- and lung-damaging sulfur — a key reason few American
companies use it.
Refineries instead are sending it around the
world, especially to energy-hungry India, which last year got almost a fourth
of all the fuel-grade "petcoke" the U.S. shipped out, an Associated
Press investigation found. In 2016, the U.S. sent more than 8 million metric
tons of petcoke to India. That's about 20 times more than in 2010, and enough
to fill the Empire State Building eight times.
The petcoke being burned in countless
factories and plants is contributing to dangerously filthy air in India, which
already has many of the world's most polluted cities.
Delhi resident Satye Bir does not know all
the reasons Delhi's air is so dirty, but he says he feels both fury and
resignation.
"My life is finished....My lungs are
finished," said the 63-year-old Bir, wheezing as he pulls an asthma
inhaler out of his pocket. "This is how I survive. Otherwise, I can't
breathe."
Laboratory tests on imported petcoke used
near New Delhi found it contained 17 times more sulfur than the limit set for
coal, and a staggering 1,380 times more than for diesel, according to India's
court-appointed Environmental Pollution Control Authority. India's own petcoke,
produced domestically, adds to the pollution.
Industry officials say petcoke has been an
important and valuable fuel for decades, and its use recycles a waste product.
Health and environmental advocates, though, say the U.S. is simply exporting an
environmental problem. The U.S. is the world's largest producer and exporter of
petcoke, federal and international data show.
"We should not become the dust bin of
the rest of the world," said Sunita Narain, a member of the pollution
authority who also heads the Delhi-based Center for Science and the Environment.
"We certainly can't afford it; we're choking to death already."
___
EMBRACING TAR SANDS
For more than a century, oil refining has
served as a lifeline in America's industrial heartland, where thousands of
manufacturing jobs have been lost in recent decades.
In gritty northwest Indiana, a sprawling oil
refinery and steel mills dominate the Lake Michigan shoreline. Freight trains
chug through working-class neighborhoods. And smokestacks and distillation
towers still symbolize opportunity.
Local officials and workers cheered when the
BP Whiting refinery invested $4.2 billion so it could process crude extracted
from tar sands in the boreal forest of Alberta, Canada.
U.S. refineries embraced tar sands oil and
other heavy crudes, when domestic oil production was stagnant before the
hydraulic fracturing boom. Some of the biggest built expensive units called
cokers to process the gunky crude into gasoline, diesel, ship fuel and asphalt,
which leaves huge amounts of petroleum coke as waste. When BP Whiting's coker
in Whiting, Indiana was finished in 2013, its petcoke output tripled, to 2.2
million tons a year.
Petcoke traditionally was used in the U.S. to
make aluminum and steel after its impurities were removed. But when those mills
closed or moved to other countries, the need for petcoke waned, although some
power plants still use it. Other industries that had burned petcoke in the past
did not want to invest in costly upgrades to control emissions of sulfur
dioxide and nitrogen oxides, so they shifted to cleaner natural gas.
The American Fuel and Petrochemical
Manufacturers, a petroleum industry trade group, released a statement to the AP
saying that cokers "allow the United States to export petroleum coke to
more than 30 countries to meet growing market demand."
"Petroleum coke is used globally as a
cost-effective fuel, as well as an integral component in manufacturing,"
AFPM said.
But experts say it's not market forces that
are driving U.S. refiners to make this waste product from heavy oil refining.
The refineries just need to get rid of it, and are willing to discount it
steeply — or even take a loss — which helps drive the demand in developing
countries, experts said.
"It's a commodity that defies
explanation (because) there's not a financial market," said Stuart
Ehrenreich, an oil industry analyst who once managed petcoke export terminals
for Koch Industries. "But at the end of the day, the coke has got to
move."
So it's usually priced cheaper than even
coal, sold around the world through a network of businesses — from boat
captains and stevedores to buyers, brokers and middlemen — and sent on an epic,
weeks-long journey by rail, barge and ship.
There are fewer than a dozen big traders
globally. Among the largest are Oxbow Energy Solutions and Koch Carbon, both
led by members of the politically conservative and climate-skeptical Koch
family. Neither they nor a dozen U.S. oil companies and traders contacted by
the AP would talk about petcoke. They cited past controversies over the
mountains of the waste stored at Midwest refineries, or said they wanted to
avoid angering business partners.
In India, no factory managers would allow AP
access, and federal officials did not respond to repeated requests for
interviews.
With the petcoke market volatile and
competitive, industry holds information close, hoping to maintain an edge and
make a profit.
"It's like the Wild West," said
Ehrenreich.
___
DIRTY AIR
Petcoke, critics say, is making a bad
situation worse across India. About 1.1 million Indians die prematurely as a
result of outdoor air pollution every year, according to the Health Effects
Institute, a nonprofit funded by the U.S. Environmental Protection Agency and
industry.
In the capital of New Delhi, pollution has
sharply increased over the past decade with more cars, a construction boom,
seasonal crop burning and small factories on the outskirts that burn dirty
fossil fuels with little oversight. In October and November, for the second
year in a row, city air pollution levels were so high they couldn't be measured
by the city's monitoring equipment. People wore masks to venture out into gray
air, and newspaper headlines warned of an "Airpocalypse."
"Fifty percent of children in Delhi have
abnormalities in their lung function — asthma, bronchitis, a recurring spasmodic
cough. That's 2.2 million children, just in Delhi," said Dr. Sai Kiran
Chaudhuri, head of the pulmonary department at the Delhi Heart & Lung
Institute.
The country has seen a dramatic increase in
sulfur dioxide and nitrogen dioxide emissions in recent years, concentrated in
areas where power plants and steel factories are clustered. Those pollutants
are converted into microscopic particles that lodge deep in the lungs and enter
the bloodstream, causing breathing and heart problems.
It's impossible to gauge precisely how much
is from petcoke versus coal, fuel oil, vehicles and other sources. But experts
say it certainly is contributing.
Indian purchases of U.S. fuel-grade petcoke
skyrocketed two years ago after China threatened to ban the import of high-sulfur
fuels. Although Indian factories and plants buy some petcoke from Saudi Arabia
and other countries, 65 percent of imports in 2016 were from the U.S.,
according to trade data provider Export Genius.
"It is definitely alarming,"
Chaudhari said. "The government should know what they're getting, what
they're using and what are its harmful effects."
In the north Indian industrial district of
Moradabad, several hours' drive from the capital, villagers see the skies
getting dingier but have little information about what happens behind factory
gates.
Only four factories are on record as using
petcoke. But dozens buy it from middlemen running open-air fuel depots,
according to Sarvesh Bansal, a natural gas distributor in the north Indian city
who leads the ad-hoc local environmental group called WatAir.
"We want the factories moved very far
away from here," said a 25-year-old rice farmer named Mohammad Sarfaraz,
who lives in nearby Farid Nagar. He and others aren't sure what pollutants are
being spewed, but they nevertheless protested at nearby factories a few years
ago until shooed away by guards. "Many illnesses occur because of the
factories. Small kids and old people fall sick very easily. There is
breathlessness, heart disease, pain in the hands and legs."
India's cement companies were first to bring
in petcoke, and still import the most, though cement experts say some sulfur is
absorbed during manufacturing.
As word spread of the cheap, high-heat fuel,
other industries began using it in their furnaces — producing everything from
paper and textiles to brakes, batteries and glass, according to import records
compiled by Export Genius. The government was caught off guard by the shift,
and there are scant records of how much petcoke is being burned.
Petcoke's use was further encouraged by low
import tariffs and a lack of regulations on its most potent pollutants.
Industries also like that petcoke, which is
around 90 percent carbon, burns hot. So they can use less of it to produce the
same heat as coal — though coal still overshadows petcoke in factory furnaces.
Within a decade, India's petcoke appetite
grew so voracious that it began producing and selling its own, and Indian
refineries today are making about as much as the country is importing. One of
the biggest refiners — Mumbai-based Reliance Industries Lts., owned by India's
wealthiest businessman, Mukesh Ambani — has ramped up petcoke production.
Still, U.S. petcoke remains popular.
Indians typically buy petcoke with about 6-7
percent sulfur — more than double than with most coal — because it's the least
expensive, said Vedanth Vasanth, director of Viva Carbon Pvt. Ltd., a supplier
based in the southern city of Chennai that helps broker petcoke contracts
between Indian buyers and sellers abroad.
J.P. Gupta, whose factory in Moradabad
district makes acrylic fibers used in clothing, said his factory burns through
some 4,000 metric tons of Indian-made petcoke every month.
The factory spent about $300,000 on equipment
to control sulfur, he said, but would have spent 50 percent more on pollution
control if it had opted for U.S. petcoke, which he says is dirtier.
"We rejected the imports...," he
said. "But there are some who are not bothering about the pollution."
At an open-air brick kiln just 10 kilometers
(six miles) down the road, workers shoveled a mix of petcoke and coal into a
fiery furnace. Other than thick wooden sandals to protect their feet from the
heat, they wore no safety gear or breathing masks. And there was no equipment
to control the gases or soot billowing from the chimney.
Such small factories operating off the
electricity grid in India's vast informal sector account for 25 to 30 percent
of the country's total energy generation. Often crammed into city outskirts,
these outfits manufacturing everything from plastic bangles to metal screws
rely on fossil fuels to keep their furnaces afire — the cheaper, the better.
Few adhere to pollution standards, said Ajay
Mathur, head of The Energy Research Institute, a nonprofit policy research
organization in New Delhi. "This is an area where we need to have
regulations sooner rather than later," he said
___
AN UNCERTAIN FUTURE
Although petcoke has been an industrial
resource since the 1930s, the high sulfur content and sheer petcoke volume —
and growing concern about climate change, as well as particle pollution — could
restrict or halt its production, experts said.
Governments could decide to tax high-carbon
fuels such as petcoke. They could ban high-sulfur or high-carbon fuels. Or they
could set pollution limits that make petcoke use impractical.
In India, judges of the National Green
Tribunal demanded in May that the government investigate the environmental and
health impacts of petcoke.
"The government was not doing
anything," said the WatAir leader Bansal, whose environmental group
launched the lawsuit. "There is no law in India, no control. So the whole
world's petcoke is coming to India, and it's getting consumed here."
The government's environment ministry has
dismissed the idea that petcoke threatens public health in the nation's
capital. But the country's Supreme Court, which has consistently demanded or
enacted tougher pollution control measures, recently banned petcoke use by some
industries as of Nov. 1 in the three states surrounding pollution-choked New
Delhi. It also demanded tighter pollution standards that — if enforced — could
further limit its use nationwide.
"This is a completely disgusting state
of affairs," the judges said in their (Oct. 24) ruling, "and this is
hardly the way in which the Ministry ought to function if it is expected to perform
its duties sincerely, honestly and with dedication."
The court last month also urged all states
across India to pass similar bans.
The ministry refused months of requests for
interviews, both before and after the court's ruling. But analysts say that,
short of a nationwide ban, petcoke use could be mostly unaffected.
"The petcoke markets grew so fast across
the country that a ban around New Delhi isn't going to put a huge dent in the
overall demand for petcoke," said Jeffrey McDonald, an analyst at S&P
Global Platts.
Refineries could choose to stop producing
petcoke, by using more expensive refining methods that would essentially
convert all the heavy oil to other products.
But it's more likely that if new pollution
limits do affect its use, U.S. refiners will just find new petcoke customers in
other developing nations, especially in Asia and Africa, experts and
environmentalists said.
"It's a classic case of environmental
dumping," said Lorne Stockman, director of the environmental group Oil
Change International. "They need to get rid of it, so it's dumped into a
poor, developing country."The
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