Mirage? Grassroots refinery proposed for Arizona would have tight emission permit. (Photo courtesy of Arizona Clean Fuels LLC)

Public-information meetings held in Yuma County yielded no serious community objections to the project. November hearings are expected to lead to a draft permit from the Arizona Dept. of Environmental Quality (ADEQ). The Environmental Protection Agency then could approve it as early as January. Construction of the $2-billion refinery, the only large one between Texas and California, is expected to begin in 2006.

Arizona Clean Fuels LLC, Phoenix, plans to build the refinery on 1,450 acres of vacant desert land, 40 miles east of Yuma. The plant would process 150,000 barrels of crude oil per day and produce motor fuels, liquefied petroleum gas, sulfur and petroleum coke. It would be fed by a future $500-million, 200-mile-long pipeline from the Port of Guaymas, Mexico, to be built jointly with WesPac Pipelines Ltd., a subsidiary of Buckeye Pipeline LP, Emmaus, Pa. ACF is negotiating a "20-to-30-year" supply deal with Petróleos Mexicanos (Pemex), Mexico’s state-owned oil monopoly, says Ian Calkins, ACF spokesman. Both the pipeline and refinery are scheduled to be operational by 2009.

Permitting delays, environmental restrictions and high startup costs have prompted owners of U.S. refineries to upgrade or expand rather than build new plants, says Bob Slaughter, president of the National Petrochemical & Refiners Association, Washington, D.C. "There’s definitely a risk in building a brand-new refinery," says John Paisie, senior director of PFC Energy, a Washington-based energy industry consulting firm. "Refinery margins have not justified that kind of investment."

The Arizona refinery’s Class I air-quality permit has one of the strictest emission standards in the country, says Cortland Coleman, ADEQ spokesman. It requires selective catalytic reduction and vapor recovery tanks and restricts non-emergency flares, among other criteria. ACF last year abandoned plans to get an air quality permit in Arizona’s Maricopa County that would have allowed 5,000 tons of various air emissions per year because it would not have allowed for future expansion. The Yuma County plant’s permit will allow only 1,100 tons per year, but expansion is an option.

San Francisco-based Bechtel and UOP LLC, Des Plaines, Ill., are the engineering/design team for the project. URS, San Francisco, is the environmental/air-quality engineer. A construction procurement method has not yet been determined.