EJlxonMobl1

Refining and Supply Company P.O. Box 551

Baton Rouge, Louisiana 7082H)551

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e*.onMobii

Refining & Supply

February 11, 20 10

CERTIFIED MAIL 70082810000043266931

Mr. Bill Luthans, Deputy Director Multimedia Planning and Permit Division Environmental Protection Agency - Region 6 1445 Ross Avenue

Dallas, Texas 75202-2733

Dear Mr. Luthans:

We are in receipt of your invitation dated January 25, 2010 to participate in a roundtable discussion with the EPA, LDEQ and public interest groups regarding operations at our Baton Rouge Refinery. ExxonMobil is committed to operating in an environmentally responsible manner and we share your desire to make our community a better place to live and work.

ExxonMobil would welcome the opportunity to once again work collaboratively with the LDEQ' and the EPA in a similar fashion to the 1999 Episodic Release Initiative (ERI) referred to in your January 25 letter, by sharing best practices and potential new tools to help reduce episodic events. Our Baton Rouge site participated in 1999 initiative and believes that this type of facilitative approach is effective and appropriate.

While we are continually looking for opportunities to work with our neighbors, regulators, and the Baton Rouge community, we will be unable to directly participate in the roundtable discussion described in your invitation. Several of the groups invited to the February 25 meeting have been or are currently involved in active litigation against our company, which would greatly hinder our ability to candidly discuss details of our process and events. In light of this on-going litigation, the Louisiana Mid-Continent Oil and Gas Association (LMOGA), of which ExxonMobil is a member, will represent us at the roundtable meeting.

A Division of Exxon Mobil Corporation

Regarding the updating of the 1999 initiative, we believe that as before, the participants must be limited to those that are able to provide technical input to the discussions, and should not include those who have pending litigation against our company. This effort should be inclusive of other refineries in Louisiana that are willing to participate, and be coordinated through LMOGA.

Given that the upcoming roundtable was apparently precipitated by a recently released report funded by an EPA grant, ExxonMobil would like to call your attention to a number of inaccuracies and misrepresentations in that report. As requested by Jane LaCour of the LDEQ on January 5, 2010, ExxonMobil reviewed the Louisiana Bucket Brigade Common Ground report as it pertained to the ExxonMobil Baton Rouge Refinery. We are attaching a copy of our findings to this letter. In summary, as noted in this letter to the LDEQ, the Bucket Brigade report improperly distorts and misrepresents our performance and presents these inaccuracies in an inflammatory

manner. ExxonMobil was not provided an opportunity to review the data in advance, and in fact, received the data at the same time as the public and the news media. We are very concerned with the apparent lack of quality assurance/quality control or peer review of this data, which was then presented as fact. The errors in this report are so egregious that ExxonMobil is of the opinion that it does not represent a reasonable basis for discussions. We suggest that LDEQ can provide similar examples of misrepresentations made about other Louisiana refineries in the Common Ground report.

We appreciate the fact that the EPA shares ExxonMobil's goals of continuous improvement, and we look forward to working with your staff and the LDEQ going forward, and hope that you will consider our offer made through LMOGA to update the 1999 report. Please feel to contact me at (225) 977-0609 if you have any questions.

Sincerely,

J. Derek Reese

Senior Section Supervisor

Wastewater. Permits & Compliance Coordination Section ExxonMobil Baton Rouge Refinery

Attachment

Cc: Ms. Lourdes Iturralde-LDEQ Mr. Chris John-LMOGA

ibulonMobIl

IlaRnlnI .1Id Supply Company P.O. 8olI561

Baton Rouge, Loulalan. 70821""551

E'.f{onMobii

Refining & Supply

January 22, 20 to

CERTIFIED MAIL 70082810000043264159

Ms. Lourdes Iturralde

Louisiana Department of Environmental Quality Office of Environmental Compliance

P.O. Box 4312

Baton Rouge. LA 70S21-4312

Re: Response to Requested Analysis of Incident Data

As requested by Jane LaCour on January 5, 2010, ExxonMobil has reviewed the Louisiana Bucket Brigade Common Ground report on the ExxonMobil Baton Rouge Refinery incidents for accuracy of information, We appreciate the opportunity to set the record straight and ensure the agency has an accurate picture of our incident reporting history. The following details our initial findings'.

I. The report grossly overstates the actual events in an inflammatory manner. It erroneously claims that the Baton Rouge refinery had 453 accidents from 200S-200S. The actual number of reportable incidents for this time period is 165. The discrepancy appears to result from the Bucket Brigade counting a single incident with multiple reportable quantity exceedances as multiple incidents. This overstates the incident count by 174 %. Our analysis (see table below) indicates that the incident count inflation is a repetitive issue that appears in each year cited by their report. More to the point, the report provides a deceptive slant on our incident performance implying that our number of incidents is increasing when the exact opposite is true.

Year ExxonMobil Reportable Common Ground
Incidents Incident Claim
2005 48 75
2006 44 78
2007 44 107
2008 29 193
2009 25 NA
Total (2005-2008) 165 453 I This letter is not intended to be an all-inclusive list of errors in the Bucket Brigade report, rather. it is meant to provide a representative sample of some of the more egregious errors in the report.

A Division of Exxon Molin Corporation

2. The report mistakenly claims ExxonMobil did not provide a cause for 59% of the reported incidents. This is incorrect, as an initial cause is always reported. and our follow-up reports have always been submitted in a timely manner. ExxonMobil routinely conducts an investigation to determine the root cause and identify steps to prevent reoccurrence. The LOEQ has routinely reviewed these root cause analysis efforts postincident as part of their enforcement review efforts. In fact, LDEQ has just completed a comprehensive incident review for September 2007 through November 2009. This effort included root cause review of incidents with LDEQ. Further, the LDEQ audit found no incidents or events where ExxonMobii failed to report incidents, reported incidents incorrectly, or failed to submit required follow-up reports, other tban those incidents ExxonMobil had already self-reported to the agency pursuant to applicable permit requirements.

3. The report inappropriately takes exception with incidents and emissions which occurred from 2005 - 2008 due to storms. It is important to remember the sequence of events during recent storms to appreciate the issues related to significant weather-related events.

On September I, 2008, Hurricane Gustav made landfall on the Louisiana coastline as a Category 2/3 force hurricane. Baton Rouge experienced sustained wind speeds of 61 mph for several hours, with peak gusts is excess of 90 mph during the height of the storm on the afternoon of September I, 2008. These winds were higber than forecast for Baton Rouge. which caused catastrophic losses of the power grid and distribution systems in the Baton Rouge area and beyond. and resulted in immediate power losses at the site. These power losses, combined with the loss of critical utilities such as hydrogen and nitrogen, and structural damage and loss of cooling towers, resulted in a controlled shutdown of the refinery and chemical plant operations at the Complex.

Recovery of operations at the Complex was difficult and protracted due to the substantial damage to the power distribution systems and the loss and disruption of nitrogen and hydrogen supply systems all along the Mississippi River. The Complex was able to begin startup activities late afternoon on Friday, September 5, 2008 using alternative emission control devices (flares) to control vent streams until key units could be restarted (i.e., sulfur recovery plant, MEA regenerators, fuel gas compressors). During the entire shutdown and subsequent re-start process, ExxonMobil was in constant contact with LDEQ, the Governor's Office, Office of Emergency Preparedness, and USEPA Region 6 sharing status information and ensuring agency concurrence on efforts to restart the refinery. Attachments 1 ·2 are included as reference.

It is important to remember the historical significance of this storm with re~ect to the Baton Rouge area. In their February 2009 Report on Hurricane Gustav. the U.S. Department of Energy noted that "The damage to the Entergy [ electricity] system from

2 Comogring Ihe lmpqcls oflhe lOOS and 1008 Hurrlcann 011 U,S. Ellergy Infrastructure. Illftruiructure Security ond Energy Restoration. OjJice of Electricity Delivery and Energy Reliability, u.s. Department of Energy. February 1009.

Hurricane Gustav was the worst ever in the Baton Rouge area." In fact. over 300.000 more people in Louisiana lost power from Hurricane Gustav than Hurricane Katrina. Also catastrophic loss of power impacted supplies of other utilities. most notably nitrogen and hydrogen.

4. The report erroneously claims that facilities are not reporting all incidents as required.

This is patently untrue and lacks any basis in fact. ExxonMobil has diligently reported all incidents as required by state and federal regulations. The EPA has established a list of chemicals for which immediate reporting is required which is published at 40 CFR 302.4. This list is used by the LDEQ and Louisiana State Police with some additional chemicals added due to unique local and/or response related concerns. For these chemicals, the Congress set statutory reportable quantities (RQs). Congress also required EPA to issue regulations to adjust these initial RQs to more accurately reflect their potential to threaten public health and welfare and the environment. The RQs for this list of chemicals is continuously reviewed and updated by EPA, with public comment, as additional information or health studies become available. By adjusting the RQs, the Agency is able to focus its resources on those releases that are more likely to pose potential threats to public health or welfare or the environment. while relieving the regulated community and government emergency response personnel from the burden of making and responding to reports of releases that the government has determined are less likely to pose such threats.

In addition, ExxonMobil would like to note that our Baton Rouge Refinery reports releases in a conservative fashion when compared to some other companies in Louisiana. Under the air permits issued by the LDEQ and approved by the EPA, point sources can be permitted to accommodate emissions from start-ups and shutdowns of unit operations or equipment. Emissions from these sources do not have to be immediately reported unless the release exceeds the permitted value by more than the RQ. However. if these emissions are due to an upset or a malfunction, ExxonMobii has always reported emissions exceeding the RQ. without regard to the permitted amount. ExxonMobil. and the LDEQ, are aware that this interpretation may be overly conservative. and it can just as easily be argued that as long as the permitted value is not exceeded by more than the RQ. regardless of cause. then these emissions are Federally permitted. and do not require immediate reporting. The LDEQ has promised to issue written guidance on this matter to ensure consistency in reporting amongst different facilities. We understand that a draft policy has been prepared and is currently undergoing agency review. Obviously. if the permitted emission rate was used as the baseline for evaluation of a release, as opposed to a baseline of zero, the number of immediately reportable events as noted in the Bucket Brigade report would be significantly fewer for the ExxonMobii Baton Rouge Refinery.

5. LDEQ requested additional information on ExxonMobil's processes and procedures with respect to hurricane events. ExxonMobil has detailed procedures for response planning and operations for severe weather scenarios. These procedures include specific criteria for evaluating wind conditions and storm track probabilities as storms approach. Storm tracks can vary significantly and the site operating decisions are often based on weather forecasts which are constantly in flux, which makes it difficult to avoid unnecessary shutdowns. Based on historical experience and current data on sustained wind speeds,

the Complex may decide to either significantly curtail operations or conduct a preemptive shutdown of facilities. This decision is not taken lightly. as it has to take into account the protection of the Complex. its employees and neighbors, and the environment; while at the same time recognizing the unique role the Complex plays in nation's fuel supply chain", often being the only refinery in the Gulf Coast region able to produce gasoline in the days after hurricanes pass through.

In summary, ExxonMobiI takes pride in being a responsible member of the community, and that requires honest and thorough reporting of incidents at the Complex. Our incident reporting record demonstrates that commitment. and the Bucket Brigade report improperly distorts and misrepresents that record. If you have any questions, please contact me at 225977 0609.

J. Derek Reese

Senior Section Supervisor

Wastewater, Penn its & Compliance Coordination Section

Attachments

CC: Jane LaCour, LDEQ

J CDmparing the [mpgc4 oUlre 2QOJ and 2008 Hurricanu on V,S. Energy {nfrastnu:IUrr. In/rtUtniclUre Security and Energy Restoration. OffIce o/Electricity Delivery and Energy Reliability. US. Depanmenlo/Energy. February 1009

Attachment 1

BOBBY JINDAL Governor

~tatt of 'louisiana f>(fiee of tbe 8obetnOf

October 6, 2009

The Honorable Haley Barbour Governor

State of Mississippi P.O. Box 139 Jackson, MS 39205

The Honorable Rick Perry Governor

State of Texas

P.O. Box 12428

Austin. TX 787 J t

Gentlemen,

Our states are responsible for refining approximately 46% of the nation's fuel supply. It is my understanding that hurricane-related regulations. and protocols being considered at the federaJ level could potentially have a detrimental impact on the ability of facilities to produce the fuel needed by our region and the nation at the most critical times. Should such regulations or protocols be adopted. serious fuel-related shortages and other problems may be experienced both by Gulf Slates citizens trying to evacuate from future oncoming hurricanes and by citizens throughout this country during and after landfall. These potential problems include, but are not limited to, fuel shortages and significant price increases.

[ have charged my Secretary of Environmental Quality, Secretary of Natural Resources and Director of Homeland Security and Emergency Preparedness with reaching out to the relevant agencies. both in your states and at the federal level, to better determine the impact that any policy or regulations will have on the region and the nation's supply, especially in times of essential need.

Post Office Box 94004, Baton Rouge. Louisiana 70804-9004 .. (225) 342-7015 • Fax (225) 342·7099 www.gov.state.la.us

As sister states which experience the same hurricane concerns and shoulder the same citizen evacuation responsibilities, I would very much appreciate your states' contribution and input into these conversations. I am copying my above-referenced cabinet leadership, who stand ready to work with your state agencies.

;L~'YYOUB. fJ:Jin~

Governor

BJ/jm

cc: Harold Leggett,

Secretary, Louisiana Department of Environmental Quality

Scott Angelle.

Secretary, Department of Natural Resources

Mark Cooper.

Director, Governor's Office of Homeland Security and Emergency Preparedness

Attachment 2

LOA

USOGA

us Oil & Gol Auociatio!1

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September 1, 2009

Tlle Honorable Bobby Jindal Governor

State 01 Louisiana P.O. 80x 94004

Baton Rouge, LA 70804

Dear Governor Jindal:

As we head Into the heart of the hurricane season, we wanted to make you aware of an issue under serious consideration by the U.S. Environmental Protection Agency (EPA) that has the potential to negatively Impact the pre- and post-landfall availability of fuel In rexas, Louisiana, Mississippi, across the Southeast and Into the Mid-Atlantic states.

One of the key lessons learned from hurricanes Katrina, Rita, Gustav and Ike has been the critical role waivers and. if not waivers. enforcement discretion. play in removing regulatory impediments that Inhibit pre-landfall preparations, such as evacuations and emergency response equipment staging, as well as post-landfall activities. such as the availability of fuel for vehicles and generators.

The 2005 and 2008 hurricane seasons made the nation acutely aware of the vital Importance refinery operations in Texas, Louisiana and Mississippi - coupled with Colonial and Plantation pipelines - play in providing motor fuel to both Impact and non-lmpact regions of the country. For example, accordIng to a USOOE Rafter action- report, Hurricanes Gustav and Ike combined to impact 29 of the 30 refineries supplying product to Colonial - a pipeline system that provides as much as 65 percent of the fuel supplied In several Southeastern and Mld~ Atlamlc states.

The evacuation of 1.9 million people fleeing Hurricane Gustav a year ago has been cited as the largest in the history of Louisiana - and possibly the history of the United States. This was an unprecedented undertaking that clearly could not have been accomplished without adequate public supplies of motor fuel.

The decision to operate, curtaR or shutdown refinery operations at facilities along the Gulf Coast durtng hurricane season Is based on a number of factors. with employee safety. safe and environmentally responsible operaUng practices and public needs being paramount concems. Given all the ramifications of shutting down (and starting up) a refinery, It Is not a decision that Is taken lightly.

It has come to our attention that EPA Is now questioning whether the refineries that supplied the means to allow citizens to get out of harm's way Should have been operating as the storms approached - and are also questioning the timing of efforts to restart refineries after the storms passed. Further, EPA's current position on whether to grant enforcement discretion leaves refineries operating In the Gulf South with uncertainty regardIng potential future penalties from that agency when they are considering whether or not to run. shut down or start up in response to tropical activity.

Jindal - Joint Associations Hurricane Letter September 1, 2009

Page Two

EPA's long distance second-guessing of refinery operations In and around tropical storms and hurricanes will undoubtedly have a chilling effect on all refining operations within 100 miles of the Gulf of Mexico coastline. The potential losers will be the millions of people across a large swath of the country that, knowingly or not, are dependent on the fuel provided by refiners in the Gulf South.

Given the seriousness of the situation, we ask your leadership In convening a summit meeting of federal and state environmental and emergency response agencies as soon as possible to discuss EPA's posiUon and work to aUgn the various agencies on a path that assures that the availability of fuel is not curtailed just when it is needed most Besides EPA's Office of Enforcement and Compliance Assurance (OECA), representatives from the following agencies. at a minimum, should also be Included at the summit US Department of Homeland Security (DHS), US Department of Energy (OOE), Texas CommIssion on Environmental Quality (TCEQ). La. Department of Environmental Quality (LDEQ), La. Department of Natural Resources (LDNR), Mississippi Department of Environmental QuaJlty (MDEQ), Texas Governor's OMsion of Emergency Management, louisiana Govemor's Office of Homeland Security and Emergency Preparedness (GOSHEP) and the Mississippi Emergency Management Agency (MEMA). The meeting should also include industry representatives directly Impacted by this Issue.

Thank you for your assistance in this matter.

Chris John President louisiana Mld-ConUnent 011 & Gas Assn.

Dan Borne President Louisiana Chemical AsSOciation

Ben Thompson President

US 011 & Gas Association MississippI/Alabama

Dan Juneau President louisiana Association

of Business & Industry

cc:

The Hof1Ol8bte Rick Perry. Offlce of the Governor. Texas

The Honorabte Haley Barbour, Office of the Govemor, Miasissippl Administrator Lisa Jackeon, U.S. Environmental Protection Agency Secretary Steven Chu, U.S. Department or Energy

Secretary Janet Napolitano, U.S. Department of Homeland Security Secretary Hal leggett, lao Department of Environmental Quality Secretary Scott Angelle, La. Department of Natural Resources

Director Mart Cooper, La. Governor's Oflk:e of Homeland Secwfty & Emergency Preparednese ExecutlYe DIrector Mark VlckeIY, Texas Commission on Envtronmental Quality

Chief Jack Colley, Texas Governor's Division of Emetgency Management

ExecutNe Direclol Trudy Asher. MIss. Department of EnvIronmental Quatily

Director Mike Womack. Mias. EmDfgency Management Agency