Coastal Zone Act Permit Public Hearing Department of Natural Resources and Environmental Control Re: Premcor Refining Group, Inc. April 30, 2008

The CZA Permit Process  The Delaware City Refinery at 4550 Wrangle Hill Road in Delaware City, is located within Delaware’s Coastal Zone as defined by the Coastal Zone Act.  Any new manufacturing use or an expansion or extension of a nonconforming use in the Delaware Coastal Zone requires a Coastal Zone Act (CZA) Permit issued from the Department of Natural Resources and Environmental Control (DNREC).

The CZA Permit Process  The Premcor Refining Group, Inc. (Premcor), a subsidiary of Valero Energy Corporation, has applied for a CZA Permit to install pollution control equipment in the fluid catalytic cracking unit (FCCU) at the Delaware City Refinery.  The pollution control equipment proposed in Premcor’s CZA Permit application will result in some negative environmental impacts; therefore, allowable in Delaware’s Coastal Zone by permit only.

Background  In July 2006, DNREC and Premcor reached a settlement regarding pending permit appeals and alleged violations.  This project would achieve the decrease of NOx emissions agreed upon in Premcor’s Settlement Agreement with DNREC.  This application is a pollution control project and will not increase production or capacity at the DCR.

Background  Premcor had previously applied for a CZA Status Decision on August 21,  The Department and the public reviewed the application and provided comments to the Secretary.  The Secretary determined on November 14, 2007 that a CZA Permit would be required.  Premcor has since proposed modifications to its existing WWTP which will address 80-90% of the effluent and has included these modifications as part of this CZA Permit application.

Offset Proposal Requirements  The “Regulations Governing Delaware’s Coastal Zone” requires that all applications for a CZA Permit to contain an offset proposal if any negative impacts to the Coastal Zone are anticipated.  Offset proposals must more than offset the negative environmental impacts associated with the proposed project or activity requiring a CZA Permit.  Premcor states that the reduction of tons per year of NOx emissions will more than offset the 33 tons per year of nitrates which would be added to their wastewater discharge as a result of this project.

Land Usage  The Delaware City Refinery (DCR) is a nonconforming use in existence and in active use prior to June 28,  All land included within the DCR boundary is zoned Heavy Industry (HI) by New Castle County.  This project is consistent with the zoning and will not disturb any natural habitat in the Coastal Zone.

Purpose of Hearing  The DNREC has reviewed the application including the offset proposal and determined the application is sufficient to proceed to public hearing.  Solicit public comment on the CZA Permit application.  No decision on the application will be made tonight.  The Secretary of DNREC will make a decision once the record has been closed and reviewed.