[Federal Register Volume 67, Number 89 (Wednesday, May 8, 2002)]
[Rules and Regulations]
[Pages 30811-30818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11451]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 261

[SWH-FRL-7208-6]


Hazardous Waste Management System; Identification and Listing of 
Hazardous Waste: Spent Catalysts From Dual-Purpose Petroleum 
Hydroprocessing Reactors

AGENCY: Environmental Protection Agency.

ACTION: Notice of availability of response to comments on the scope of 
petroleum hazardous waste listings.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) today is announcing 
its decision to maintain its interpretation that under RCRA 
regulations, spent catalyst wastes removed from dual purpose 
hydroprocessing reactors at petroleum refining facilities are listed 
hazardous wastes. This interpretation was previously announced in 
Agency memoranda dated November 29, 1999 and June 1, 2000. In a Federal 
Register notice published July 5, 2001 (66 FR 35379), EPA announced 
that it was providing the public an opportunity to comment on the 
interpretation set forth in these memoranda and that the Agency would 
issue a second Federal Register notice that would announce EPA's 
decision and provide responses to those comments received. EPA's 
responses are provided in today's document and in a background 
document, ``Response to Comments: July 5, 2001 FR Notice on Spent 
Catalysts from Dual-Purpose Petroleum Hydroprocessing Reactors.'' The 
regulations addressed in the memoranda and again in today's document 
were promulgated under the Resource Conservation and Recovery Act 
(RCRA) on August 6, 1998 (63 FR 42110).

ADDRESSES: Supporting materials to this notice are available for 
viewing in the RCRA Information Center (RIC), located at Crystal 
Gateway I, First Floor, 1235 Jefferson Davis Highway, Arlington, VA. 
The Docket Identification Number is F-2002-PR2F-FFFFF. The RIC is open 
from 9 a.m. to 4 p.m., Monday through Friday, excluding federal 
holidays. To review file materials, we recommend that you make an 
appointment by calling (703) 603-9230. You may copy a maximum of 100 
pages from any file maintained at the RCRA Docket at no charge. 
Additional copies cost $0.15/per page. The docket index and some 
supporting materials are available electronically. See the beginning of 
the Supplementary Information section for information on accessing 
them.

[[Page 30812]]


FOR FURTHER INFORMATION CONTACT: For general information, contact the 
RCRA Hotline at (800) 424-9346 or TDD (800) 553-7672 (hearing 
impaired). In the Washington, DC, metropolitan area, call (703) 412-
3323. For information on specific aspects of the information contained 
in the memoranda discussed below, contact Patricia Overmeyer or Max 
Diaz of the Office of Solid Waste (5304W), U.S. Environmental 
Protection Agency Ariel Rios, 1200 Pennsylvania Avenue, NW., 
Washington, DC 20460. [E-mail addresses and telephone numbers: 
[email protected], (703) 605-0708; [email protected], (703) 
308-0439.]

SUPPLEMENTARY INFORMATION: The docket index and some supporting 
documents, including the Response to Comments document, that are in the 
docket for today's notice also are available in electronic format on 
the Internet at URL: http://www.epa.gov/epaoswer/hazwaste/id/petroleum/catalyst.htm
    EPA will keep the official record for this action in paper form. 
The official record is the paper file maintained at the RCRA Docket, 
the address of which is in ADDRESSES at the beginning of this document.

I. Background

A. What is the Reason for Today's Publication?

    Today's notice fulfills the terms of a settlement agreement between 
EPA and the American Petroleum Institute (API), in which the Agency 
agreed to solicit comment on its interpretation, described in two 
Agency memoranda, regarding the regulatory status of spent catalysts 
removed from dual purpose reactors at petroleum facilities and provide 
the public with responses to comments received. Today's notice provides 
an overview of the response to comments and announces the availability 
of a separate, more detailed, response to comments document. In 
addition, today's notice announces that the Agency is maintaining its 
interpretation provided in the memoranda dated November 29, 1999 and 
June 1, 2000 with regard to the hazardous waste listing determinations 
issued on August 6, 1998. The interpretation is that spent catalysts 
removed from dual purpose petroleum hydroprocessing reactors are 
included within the scope of the hazardous waste listings for spent 
hydrotreating catalysts (K171) or spent hydrorefining catalysts (K172).

B. Overview of Past Agency Actions

    On August 6, 1998, EPA listed as hazardous wastes spent 
hydrotreating catalysts (K171) and spent hydrorefining catalysts (K172) 
generated in petroleum refining operations (63 FR 42110). These 
regulations were promulgated under RCRA, 42 USC 6901, et seq. EPA took 
no action with regard to a third type of spent hydroprocessing catalyst 
generated by petroleum refineries, hydrocracking catalysts.
    Subsequent to the promulgation of the hazardous waste listing 
determination, a number of industry and environmental groups filed 
lawsuits challenging the validity of the listings. These cases were 
consolidated in the United States Court of Appeals for the District of 
Columbia Circuit (D.C. Circuit) in American Petroleum Institute v. EPA, 
Docket No. 94-1683.
    Among the petitioners was Gulf Chemical and Metallurgical 
Corporation. Gulf asserted that the final rulemaking did not provide 
adequate definitions of the spent catalysts covered within the scope of 
the hazardous waste listing descriptions for K171 and K172. In 
particular, Gulf stated that the scope of the final listing 
descriptions did not adequately address the regulatory status of spent 
catalysts from petroleum hydroprocessing reactors that perform both 
hydrotreating and hydrocracking functions (i.e., spent catalysts from 
dual purpose reactors). Gulf pointed out that such dual purpose 
reactors perform functions meeting both the definitions of 
``hydrotreating'' and ``hydrocracking'' provided in the Department of 
Energy's (DOE's) Petroleum Supply Annual (PSA) and presented in the 
preamble to the August 6, 1998 final petroleum refining listing 
determination.
    After reviewing the issues raised by Gulf in its petition, we 
concluded that the Agency had no dispute with the petitioner with 
regard to the regulatory status of spent catalysts removed from dual 
purpose reactors. In fact, we saw no grounds for Gulf's challenge to 
the August 1998 rulemaking given that our interpretation of the final 
listing descriptions for K171 and K172 is that spent catalysts from 
petroleum hydroprocessing units that perform hydrorefining and 
hydrotreatment functions are captured by the listing.
    Gulf's challenge did, however, serve to highlight the potential for 
confusion regarding the regulatory status of spent catalysts removed 
from dual purpose reactors. Although a straight reading of the 
regulatory language promulgated in the final rule should result in a 
conclusion that spent catalysts from units or reactors that perform 
hydrotreatment or hydrorefining functions are listed hazardous wastes, 
EPA's Office of Solid Waste decided to issue a memorandum clarifying 
the regulatory status of spent catalysts from dual purpose petroleum 
hydroprocessing operations. The memorandum was issued on November 29, 
1999, and was distributed to industry trade associations and posted on 
EPA's ``RCRA On-line'' website (http://www.epa.gov/rcraonline). After 
the memorandum was issued, Gulf dismissed its lawsuit on the hazardous 
waste listings (K171 and K172).
    The Agency's policy with regard to spent catalysts from dual 
purpose reactors, as originally expressed in the November 29, 1999 
memorandum, is based on the fact that catalysts used in dual purpose 
reactors enhance the hydrotreatment or hydrorefining of petroleum 
feedstock. Dual purpose reactors are hydroprocessing reactors that 
perform hydrotreatment or hydrorefining functions while simultaneously 
hydrocracking petroleum feedstock. As explained in the memorandum, the 
fact that such reactors hydrocrack petroleum feedstocks does not 
exclude the spent catalysts from the hazardous waste listing. It was 
never the Agency's intent to exclude a spent catalyst from the listings 
for K171 and K172 on the basis that a spent catalyst is removed from a 
unit or reactor that hydrocracks petroleum feedstock, when the same 
unit or reactor also performs a hydrotreating or hydrorefining 
function.
    In February 2000, API filed a lawsuit in the D.C. Circuit 
challenging the validity of the November 29, 1999 memorandum. API v. 
EPA, Docket No. 00-1069. API, however, agreed to hold this lawsuit in 
abeyance until the court decided the challenge to the original 
hazardous waste listing determinations.
    While awaiting the opinion of the court in the first API lawsuit, 
and while the second suit was being held in abeyance, EPA received 
further inquiries on the regulatory coverage of spent catalysts from 
dual purpose hydroprocessing reactors. In response to these additional 
inquiries, EPA distributed a second memorandum on June 1, 2000 further 
clarifying the scope of the K171 and K172 hazardous waste listings with 
regard to spent catalysts removed from dual purpose reactors. EPA also 
responded to two letters from individual petroleum refineries that 
requested information on the regulatory status of spent catalysts from 
two specific types of hydroprocessing reactors. These letters are 
discussed in more detail below, and both letters and

[[Page 30813]]

EPA's responses to each are in the docket for this notice.
    On June 27, 2000, the D.C. Circuit issued an opinion in the first 
lawsuit that upheld EPA's hazardous waste listing determinations. API 
v. EPA, 216 F.3d 50. Following the announcement of the court's decision 
with regard to its petition filed in response to the August 6, 1998 
listing determinations, API reactivated its lawsuit on the November 29, 
1999 memorandum.
    In June 2001, API and EPA entered into an agreement settling the 
second lawsuit. Under the terms of the settlement agreement, EPA agreed 
to publish a Federal Register notice announcing the opportunity for the 
public to comment on the Agency's memoranda regarding the regulatory 
status of spent catalysts removed from dual purpose reactors. We 
published this notice in the Federal Register on July 5, 2001.
    In the settlement agreement, EPA also agreed to publish a second 
notice, after evaluating the public comments received in response to 
the first notice. In the July 5, 2001 notice, we explained that the 
second Federal Register notice would serve as an announcement of EPA's 
decision either to maintain, and possibly clarify, the positions 
expressed in the memoranda or to change them. Today's notice serves as 
the second notice that EPA agreed to publish and completes the 
activities that EPA agreed to undertake in our settlement agreement 
with API.

C. What Are Dual Purpose Reactors?

    Petroleum refineries use hydroprocessing units to prepare residual 
stream feedstocks for cracking and coking units and to polish final 
products (e.g., diesel fuels). Hydroprocessing reduces the boiling 
range of petroleum feedstock and removes substantial amounts of 
impurities from the feed.\1\ During hydroprocessing, molecules in 
petroleum feedstock are split or saturated in the presence of hydrogen. 
Hydroprocessing is a broad term encompassing the more specific 
processes of hydrotreating, hydrorefining, and hydrocracking. 
Hydroprocessing reactors that hydrotreat petroleum feedstock stabilize 
the feed and remove impurities catalytically and react the feed with 
hydrogen. Hydrotreating includes the removal of sulfur, nitrogen, 
metals, and other impurities from petroleum feedstocks. Spent catalysts 
removed from hydrotreating reactors are listed hazardous wastes (K171). 
Hydrorefining also removes impurities, but uses more severe operating 
conditions than hydrotreating, and treats heavier molecular weight 
petroleum fractions (e.g., residual fuel oil and heavy gas oil). Spent 
catalysts removed from hydrorefining reactors also are listed hazardous 
wastes (K172). Hydrocracking is a process in which the primary purpose 
is to reduce the boiling range of petroleum feedstocks. Hydrocracking 
involves the breaking down of higher molecular weight hydrocarbons to 
lighter components with an infusion of hydrogen and in the presence of 
heat. In the August 6, 1998 final rule, EPA did not make a listing 
determination for spent catalysts from petroleum hydrocracking reactors 
and these spent catalysts are not currently listed as hazardous wastes.
---------------------------------------------------------------------------

    \1\ Gary, James H. and Handwerk, Glenn E., ``Petroleum Refining 
Technology and Economics,'' Third Edition, Marcel Dekker, Inc., New 
York, 1994, p. 174.
---------------------------------------------------------------------------

    Dual purpose hydroprocessing reactors are designed to process 
petroleum feedstocks by both hydrotreating (or hydrorefining) the 
feedstock (i.e., removing sulfur, nitrogen, metals, and/or other 
impurities) and hydrocracking the feedstock (i.e., reducing boiling 
points). The impurities are removed from the feedstock and become 
deposited on the spent catalyst. Given that the catalysts in dual 
purpose reactors are used to promote a hydrotreating or hydrorefining 
function, as well as a hydrocracking function, such catalysts when 
spent, are listed hazardous wastes under the plain language of the 
regulation. Although some commenters argue that dual purpose reactors 
fall within the definition of ``hydrocracking'' provided in DOE's 
Petroleum Supply Annual (see 63 FR 42110, at 42155), we point out that 
these units also clearly fall within the definition of 
``hydrotreating'' included in the Petroleum Supply Annual. We include 
spent catalysts removed from dual purpose units within the scope of the 
hazardous waste listings based on the fact that these units perform 
hydrotreating or hydrorefining functions. We disagree with API's 
apparent view that the definitions are mutually exclusive and that a 
unit that can be described legitimately as a hydrocracking unit cannot 
also be described legitimately as a hydrotreating or hydrorefining 
unit. We also disagree with API's suggestion that the hydrotreating 
definition should be limited to the activities that do not also fall 
within the hydrocracking definition.
    The Agency knows of three specific types of dual purpose 
hydroprocessing reactors currently in use at petroleum refineries. The 
Agency is clarifying that spent catalysts removed from these three 
types of dual purpose units are listed hazardous wastes. All are 
expanded-or ebullating-bed processes. These are the H-Oil, the LC-
Fining, and the T-Star reactors. These reactors are designed to process 
heavy feeds such as atmospheric tower bottoms or vacuum reduced crude 
and use a single moving-bed catalyst to perform hydrotreating (i.e., 
metals removal, desulfurization) and hydrocracking functions.\2\ 
Ebullating bed hydroprocessing is a process that takes place in a 
reactor bed that is not fixed. In such a process, hydrocarbon feed 
streams enter the bottom of the reactor and flow upwards passing 
through the catalyst which is kept in suspension by the pressure of the 
fluid feed.
---------------------------------------------------------------------------

    \2\ Gary, James H., Handwerk, Glenn E., Petroleum Refining 
Technology and Economics, fourth edition. 2001. p. 165.
---------------------------------------------------------------------------

    LC-Fining and H-Oil both use similar technologies but offer 
different mechanical designs. The purpose of an ebullating bed reactor 
is to convert the most problematic feeds, such as atmospheric residuum, 
vacuum residues, and heavy oils having a high content of asphaltenes, 
metals, sulfur, and sediments, to lighter, more valuable products while 
simultaneously removing contaminants. The function of the catalyst is 
to remove contaminants such as sulfur and nitrogen heteroatoms, which 
accelerate the deactivation of the catalyst, while cracking 
(converting) the feed to lighter products.
    The H-Oil reactor is used to process residue and heavy oils to 
produce upgraded petroleum products such as liquefied petroleum gas 
(LPG), gasoline, middle distillates, gas oil, and desulfurized fuel 
oil. Stable operation is achieved through a high operating pressure. 
The reactor achieves a very high level of treatment, as well as a very 
high conversion rate. The H-Oil process can achieve conversion rates of 
45 to 90 percent, desulfurization of 55 to 92 percent, and 
demetallization of 65 to 90 percent.\3\
---------------------------------------------------------------------------

    \3\ See ``Background Document Clarifying the Scope of Petroleum 
Hazardous Waste Listings: Supplemental Information Regarding 
Petroleum Hydroprocessing Units.''
---------------------------------------------------------------------------

    The LC-Fining process serves the purposes of desulfurization, 
demetallization, Conradson Carbon Residue (CCR) reduction,\4\ and 
hydrocracking of atmospheric and vacuum residuum. The LC-Fining process 
can be used to yield a full range

[[Page 30814]]

of high quality distillates, including residuals that may be used as 
fuel oil, and synthetic crude or feedstock for a residuum FCC, coker, 
visbreaker, or solvent deasphalter. The LC-Fining process can achieve 
conversion rates of 40 to 97 percent, desulfurization of 60 to 90 
percent, and a demetallization rate of 50 to 98 percent. These 
conversion and treatment percentages are high, relative to other types 
of hydroprocessing units.
---------------------------------------------------------------------------

    \4\ Carbon residue is roughly related to the asphalt content of 
crude and to the quantity of lubricating oil fraction that can be 
recovered from it. It often is expressed in terms of weight percent 
carbon residue by the Conradson ASTM test procedure.
---------------------------------------------------------------------------

    The T-Star Process also is an ebullated bed hydrotreating/
hydrocracking process designed to process very difficult feedstocks 
(e.g., atmospheric residuum, vacuum residues, and heavy oils with high 
levels of sulfur and/or metals) and achieve both a high level of 
treatment and high conversion. T-Star units can maintain conversion 
rates in the range of 20 to 60 percent and hydrodesulfurization rates 
in the range of 93 to 99 percent.\5\ Additional information on each of 
the dual-purpose technologies is provided in ``Background Document 
Clarifying the Scope of Petroleum Hazardous Waste Listings: 
Supplemental Information Regarding Petroleum Hydroprocessing Units' 
which can be found in the docket for today's notice.
---------------------------------------------------------------------------

    \5\ Hydrocarbon Processing. ``Refining Processes 2000.'' Process 
descriptions of hydroprocessing units. November 2000.
---------------------------------------------------------------------------

    At this time, EPA is aware of only three specific types of dual 
purpose hydroprocessing units. In addition to the technologies 
identified in today's notice and in the accompanying background 
document, other dual purpose units may be under development or made 
commercially available in the future. Therefore, we point out that the 
scope of the spent catalyst listings, as it applies to dual purpose 
units, is not limited to the three units named here. In naming these 
three specific units we do not mean to imply that spent catalysts from 
other types of dual purpose units that are designed to both hydrocrack 
petroleum feedstock and hydrotreat or hydrorefine the feedstock are not 
included within the scope of the listings. Our intention is to clarify 
that the scope of the hazardous waste listings includes spent catalysts 
removed from petroleum hydroprocessing units that perform both a 
hydrotreating or hydrorefining function, as well as a hydrocracking 
function. The scope of the hazardous waste listing is based upon the 
function performed by the reactor and is not specific to the name or 
brand of the reactor.

II. Summary of the Agency's Views Regarding Spent Catalysts From 
Dual Purpose Reactors

    EPA is retaining its determination that spent catalysts removed 
from dual purpose reactors (i.e., those hydroprocessing reactors that 
perform both hydrotreating, or hydrorefining, and hydrocracking 
functions) are listed hazardous wastes. In the November 29, 1999 
memorandum, the Agency clarified that these spent catalysts meet the 
listing descriptions for K171 or K172. Such materials include spent 
catalysts removed from expanded-or ebullated-bed reactors (e.g., H-Oil, 
T-Star, and LC-fining processes).
    As explained in the preamble to the August 6, 1998, final rule, 
definitions for petroleum hydrotreating, hydrorefining, and 
hydrocracking operations are not universally established. We explained 
in the final rule preamble that classifying petroleum refining 
processes on the basis of conversion rates is problematic. Although the 
preamble introduced the concept of classifying hydroprocessing units on 
the basis of conversion rates, we decided not to rely upon specific 
conversion rates to define hydrotreating and hydrocracking. Our reasons 
for rejecting the use of specific conversion rates included the fact 
that the ability to vary the operating conditions for some reactors, or 
changes to the manner in which feedstock conversion is calculated or 
accounted for, may allow refineries to classify particular reactors as 
hydrocracking units despite the amount of hydrotreatment or 
hydrorefining conducted in the reactor. After considering all relevant 
information in the rulemaking record, as well as commenter suggestions, 
we decided that the simplest way to differentiate between hydrocracking 
and hydrotreating units was to rely on categorizations provided in the 
Department of Energy's (DOE) Petroleum Supply Annual (PSA).
    We, however, did not foresee the confusion that arose after the 
final rule was promulgated over how to classify hydroprocessing units 
that meet more than one PSA definition. When we wrote the section of 
the final rule preamble discussing the definitions of hydrotreating, 
hydrorefining, and hydrocracking, we did not have dual purpose 
hydroprocessing units in mind. As a result, the discussion did not 
address the uncommon situation of petroleum hydroprocessing units or 
reactors that are designed to both hydrotreat or hydrorefine and 
hydrocrack feedstock and that legitimately meet both the PSA definition 
of hydrotreating and the PSA definition of hydrocracking. Inquiries 
received after promulgation of the 1998 final listing determination 
made us recognize that dual purpose hydroprocessing units that achieve 
high conversation rates and that are designed to and in fact do perform 
a high level of treatment were not specifically addressed in the 
preamble discussion. Due to the high level of treatment obtained in the 
units, the units meet the definition of a hydrotreater and the spent 
catalysts generated by the units become contaminated with the same 
contaminants for which spent hydrotreating catalysts were listed as 
hazardous wastes.
    Dual purpose units are not widely used in the petroleum refining 
industry. The discussion provided in the 1998 final rule preamble 
addressed the more common situation where hydrotreatment and 
hydrocracking are done in succession and in separate units or in 
separate reactors within a given unit (e.g., a two-staged hydrocracker, 
where a guard bed performs treatment prior to hydrocracking). Most 
hydrocracking units, with the exception of the dual purpose units 
addressed in today's notice, are not designed to convert or crack 
untreated petroleum feedstock. Most hydrocracking units contain 
catalysts that promote hydrocarbon conversion but will become poisoned 
by the sulfur, metal and other heteoratom content of untreated 
feedstock. This is not the case with dual purpose units where the unit 
and catalyst can handle untreated petroleum feedstock and perform both 
hydrotreating and hydrocracking in the same unit. The 1998 preamble 
discussion addresses the most prevalent case, and did not address the 
unusual or limited situation of a dual purpose unit.
    Our intention in the November 29, 1999 and June 1, 2000 memoranda 
was to address this situation and clarify that spent catalysts removed 
from hydroprocessing units that meet the PSA definition of 
hydrotreating are listed hazardous wastes, even in cases where the unit 
also meets the PSA definition of hydrocracking. We also clarified that 
we do not consider spent catalysts from a petroleum hydroprocessing 
reactor to be a listed hazardous waste solely because some incidental 
and minimal amount of hydrotreatment (or hydrorefining) of feeds occurs 
in a hydrocracking unit.
    In addition, the Agency, in the November 1999 memorandum, clarified 
that the listing should not be interpreted as providing that spent 
catalysts from any hydrocracking process-regardless of whether or not 
hydrotreatment (or

[[Page 30815]]

hydrorefining) also occurs--are, by definition, outside the scope of 
the K171 and K172 listings (i.e., if a spent catalyst otherwise meets 
the K171 or K172 listings because it comes from a unit that performs a 
hydrotreating or hydrorefining function, the fact that the spent 
catalyst is removed from a unit that also hydrocracks does not exclude 
the spent catalyst from the hazardous waste listing). In the August 
1998 final rule, we did not define hydrocracking and then indicate that 
hydrotreating and hydrorefining are ``not hydrocracking.'' It was never 
our intent to allow the scope of the hazardous waste listing 
determination to be defined or superseded when a catalyst performs a 
hydrocracking function, and that same catalyst also, by design, 
facilitates a hydrotreatment or hydrorefining function in the same unit 
or reactor. The final listing determinations were meant to include 
spent catalysts removed from reactors that perform hydrotreating and 
hydrorefining functions, even if the reactors also perform a 
hydrocracking function. This is consistent with EPA's decision in the 
final rulemaking to rely on the PSA definitions in determining the 
function or functions performed by a reactor. The PSA definitions of 
hydroprocessing take into account the function or operation performed 
by a reactor when defining hydroprocessing operations. We, therefore, 
clarified in the November 1999 memorandum that it was based on these 
functions, hydrotreating and hydrorefining, that we determine the 
regulatory status of the spent catalysts from dual purpose reactors. 
The presence of hydrocracking within a reactor does not exclude a spent 
catalyst from the scope of the hazardous waste listing when the reactor 
also functions as a hydrotreating or a hydrorefining unit.
    We further clarify that spent catalysts generated by refineries 
that classify dual purpose reactors as hydrocracking units when 
reporting to DOE will nonetheless be K171 or K172 listed wastes if the 
unit performs a hydrotreatment or hydrorefining function. Today's 
notice retains the clarification that the 1998 final rule should not be 
interpreted as allowing petroleum refineries to classify dual purpose 
reactors as hydrocracking reactors and in doing so claim that the spent 
catalysts removed from these reactors are spent hydrocracking catalysts 
(which are not listed hazardous wastes). Catalysts removed from 
reactors that perform a hydrotreating or hydrorefining function, 
regardless of whether hydrocracking is performed in the same unit, are 
listed hazardous wastes, when spent.
    We acknowledge that the preamble is confusing in that it indicated 
that units that previously have been classified as hydrocrackers are 
not covered by the listing. Again, at the time EPA wrote the final rule 
preamble, it did not have dual purpose reactors in mind. The preamble 
did specifically address guard beds, in which a separate bed treats 
feed in advance of feeding the petroleum stream to a hydrocracker. But, 
EPA did not (in the 1998 preamble) address the situation where a single 
reactor preforms both a hydrotreating (or hydrorefining) and a 
hydrocracking function. (Indeed, EPA's treatment of guard beds supports 
the interpretation retained today, in that it reflects EPA's clear 
intention to capture within the scope of the listings catalyst wastes 
from units that are intended to, and do, hydrotreat or hydrorefine 
petroleum feedstock). In any event, the indication that self-
classification as a hydrocracker avoids listing coverage is 
inconsistent with EPA's stated intent to rely on the PSA definitions, 
in that it would allow spent catalysts from units that are designed to, 
and in fact do, perform hydrotreating or hydrorefining functions to 
escape the listing, despite the fact that they are generating precisely 
the wastes EPA intended to capture in the listing. It was because of 
the potential inconsistency in the preamble that EPA saw the need to 
issue its interpretive memoranda in the first place. EPA believes that 
its interpretation presented in these memoranda and retained today is 
most consistent with the preamble and rulemaking overall-it captures 
wastes from units that are designed to hydrotreat or hydrorefine waste 
under the PSA definitions.
    After EPA distributed the November 29, 1999 memorandum, it was 
brought to the Agency's attention that the memorandum could be 
interpreted as indicating that spent catalysts from petroleum 
hydrocracking reactors are captured by the hazardous waste listings, 
even though such reactors may conduct only minimal and incidental 
hydrotreatment or hydrorefining of previously treated feedstock. For 
example, some reactors that hydrocrack petroleum feedstock treated 
previously to remove sulfur, metals and other impurities, may also in 
practice perform incidental and minimal hydrotreating or hydrorefining 
due to the operating parameters employed and the nature of the pre-
treated feed entering the reactor.
    The Agency did not intend, when issuing the November 29, 1999 
memorandum, to include within the scope of the hazardous waste listings 
spent catalysts from hydrocracking reactors, if such reactors are 
designed to hydrocrack feedstock and perform only a minimal and 
incidental amount of hydrotreatment or hydrorefining. Rather, EPA 
intended to address only the status of dual purpose units that are 
designed to perform hydrotreatment or hydrorefining as well as 
hydrocracking functions. Therefore, we issued a memorandum dated June 
1, 2000, clarifying that spent catalysts removed from reactors that 
hydrocrack petroleum feedstocks and perform only ``minimal and 
incidental'' hydrotreatment or hydrorefining are not within the scope 
of the hazardous waste listing descriptions for K171 or K172. This is 
consistent with the regulatory language, and with the intention stated 
in the preamble and the November 1999 memorandum, to adopt a functional 
approach to defining catalysts removed from hydroprocessing units.
    Today, the Agency reiterates that a spent catalyst removed from a 
unit that performs hydrotreating or hydrorefining functions is a 
``spent hydrotreating catalyst'' or a ``spent hydrorefining catalyst'' 
within the meaning of the regulation, even if the unit also performs a 
hydrocracking function. However, a spent catalyst removed from a 
reactor that hydrocracks and performs only minimal and incidental 
hydrotreatment or hydrorefining does not fall within the scope of the 
hazardous waste listings K171 and K172. Spent catalysts removed from 
such hydrocracking reactors are not captured by the listings simply 
because some hydrotreating or hydrorefining unavoidably occurs in the 
reactor. A copy of the Agency's June 1, 2000 memorandum clarifying this 
conclusion is included in the docket.
    Following distribution of the November 29, 1999 memorandum, EPA 
also received requests from members of the petroleum refining industry 
for clarification of the regulatory status of two specific types of 
spent catalysts. In response to these requests, we issued two letters 
to the requesting parties on June 1, 2000. In a letter to Motiva 
Enterprises LLC, we explained that we determined that the spent 
catalyst removed from the Motiva refinery's H-Oil unit is a listed 
hazardous wastes. Based on our determination that the H-Oil unit is a 
dual purpose hydroprocessing reactor designed to both hydrotreat and 
hydrocrack petroleum feedstock in a single reactor using a single, 
ebullating bed catalyst, we found that the spent catalyst from the H-
Oil unit falls within the scope of the hazardous waste listings.
    In a second letter, to Chevron Research and Technology Company, we 
addressed the regulatory status of spent

[[Page 30816]]

catalyst removed from Chevron's two-stage ISOCRACKING hydroprocessing 
unit. In this letter, we determined that spent catalyst removed from 
the first stage of the ISOCRACKING unit, which serves as a guard bed 
reactor and performs a predominant treatment function, is a listed 
hazardous waste (K171). The resulting K171 designation of spent 
catalyst from the first stage reactor of this unit follows from our 
determination that spent catalysts from guard bed reactors are within 
the scope of the listing descriptions for K171 and K172 as clarified in 
the preamble to the August 6, 1998 final rule. Also, the final listing 
descriptions for K171 and K172 clearly designate spent catalysts from 
guard bed reactors as included within the scope of the listings (see 40 
CFR 261.32). In addition, we also stated in our letter to Chevron that 
spent catalysts removed from the second stage reactor of Chevron's 
ISOCRACKING unit are not spent hydrotreating or hydrorefining catalysts 
and are not captured by the listing descriptions for K171 and K172. The 
second stage reactor within the ISOCRACKING unit receives pretreated 
feed and performs a predominant hydrocracking function; we concluded 
that any hydrotreatment that occurs in the second stage of the reactor 
is minimal and incidental.

III. Overview of Public Comments

    In the July 5, 2001 Federal Register notice, we reiterated our 
explanation that spent catalysts removed from dual purpose reactors are 
listed hazardous wastes. We explained in that notice that it was our 
finding that this conclusion, as expressed in the two EPA memoranda, is 
consistent with the plain language of the listing description. However, 
we acknowledged that the memoranda were controversial within the 
regulated community and we believed that providing an opportunity for 
public comment was in the interest of good government because it 
provides interested parties with a chance to influence the Agency's 
thinking and could avoid potentially unnecessary litigation. We, 
therefore, solicited comment on the regulatory interpretation presented 
in the November 29, 1999 and the June 1, 2000 memoranda which explained 
the Agency's position that spent catalysts removed from petroleum 
hydroprocessing reactors that perform both a hydrotreatment (or 
hydrorefining) function and a hydrocracking function are captured by 
the hazardous waste listings K171 or K172.
    We also solicited comments as to whether there are specific 
situations where it is not clear whether, or relatively how much, 
hydrotreatment or hydrorefining is either occurring or intended in a 
particular unit or reactor. We noted especially that we were interested 
in comment on whether there is a better test for generally describing 
dual purpose units that are not H-Oil, LC-Fining, or T-Star reactors 
(the dual purpose reactors that, as noted above, EPA knows about) but 
perform hydrocracking and more than ``minimal and incidental'' 
hydrotreating or hydrorefining, or whether decisions regarding the 
regulatory status of these other reactors must be made on a case-by-
case basis. We requested that any improvements suggested by commenters 
be consistent with our focus on determining when a catalyst is used in 
a reactor that performs a hydrotreatment or hydrorefining function, 
regardless of whether it also is performing a hydrocracking function.
    We explained in the July 5, 2001 notice that we were not reopening 
comment on any substantive or procedural issues affecting the August 6, 
1998 hazardous waste listing rule. Comments were requested solely on 
the issues addressed within the context of the two memoranda.
    We received comments in response to the July 5, 2001 notice from 
one petroleum refinery, as well as from the American Petroleum 
Institute and the National Petrochemical and Refiners Association 
(NPRA). We also received comments from the Ferroalloys Association, a 
trade association representing the catalyst recycling industry.
    We did not receive any comments on determining a clear test for 
describing dual purpose reactors that are not the three types EPA knows 
about, nor did any comments identify any other units that should be 
considered dual purpose reactors. However, we understand that we may in 
the future have to make case-by-case determinations of the status of 
spent catalysts from other dual purpose reactors under the general 
principles discussed in the record for the August 1998 rulemaking, as 
clarified by the record accompanying this Federal Register notice.

A. Comments Received From the Petroleum Refining Industry

    Comments received from parties representing the petroleum refining 
industry argued that the memoranda developed by EPA clarifying the 
status of spent catalysts removed from dual purpose petroleum refining 
reactors contradict the preamble language included in the August 6, 
1998 final rulemaking and substantially expand the listing definitions. 
The commenters stated that the preamble to the final rule did not 
mention dual purpose reactors and stated that, with the exception of 
guard beds, if a refinery had been classifying hydroprocessing units as 
hydrocrackers for the purpose of the DOE form EIA-820, spent catalyst 
from such a unit would not be covered by K171 or K172. These commenters 
also argued that since EPA promulgated source-specific listings (or 
``K'' listings), the listings were clearly based on specific processes 
or units from which the catalysts are removed and not based on the 
function performed by the catalysts. In addition, these commenters 
suggested that EPA define the scope of the hazardous waste listings on 
the percentage of feedstock conversion (i.e., the amount of 
hydrocracking performed) in the unit from which a spent catalyst is 
removed.
    We admit that confusion may have been created by the sentence in 
the preamble to the August 1998 final rule that states that ``if a 
refinery has been classifying its hydroprocessor as a catalytic 
hydrocracker for the purposes of DOE's Form EIA-820, spent catalysts 
from this unit would not be covered by K171 or K172 (with the exception 
of guard beds * * *).'' As stated above, when we wrote the section of 
the final rule preamble discussing the definitions of hydrotreating, 
hydrorefining, and hydrocracking, we did not have dual purpose 
hydroprocessing units in mind. As a result, the discussion did not 
address the unusual situation of petroleum hydroprocessing units or 
reactors that legitimately meet both the PSA definition of 
hydrotreating and the PSA definition of hydrocracking.
    Our intention in the November 29, 1999 and June 1, 2000 memoranda 
was to address this confusion and clarify that spent catalysts removed 
from hydroprocessing units that meet the PSA definition of 
hydrotreating are listed hazardous wastes, even in cases where the unit 
also meets the PSA definition of hydrocracking. We also clarified that 
we do not consider spent catalysts from a petroleum hydroprocessing 
reactor to be a listed hazardous waste solely because some incidental 
and minimal amount of hydrotreatment of feeds occurs in a hydrocracking 
unit. In addition, the Agency, in the November 1999 memorandum, 
clarified that the listing should not be interpreted as providing that 
spent catalysts from any hydrocracking process--regardless of whether 
or not hydrotreatment also occurs--are, by definition, outside the 
scope of the K171 and K172 listings.

[[Page 30817]]

    Therefore, we disagree with the underlying premise of the 
commenter's argument that the PSA definitions of hydrotreatment and 
hydrocracking are mutually exclusive. The definitions clearly overlap. 
Individual hydroprocessing units may meet both definitions. The fact 
that any unit can legitimately be classified as a hydrocracker does not 
preclude the unit from meeting the definition of a hydrotreater or a 
hydrorefiner.
    Based on guidance provided in the preamble to the final rule, 
including our use of definitions that categorize hydroprocessing units 
based on the function performed by the unit, and our rejection in the 
final rule of general refining process definitions (e.g., definitions 
provided by the Oil and Gas Journal, that base hydroprocessor 
definitions on the percent of conversion obtained within a unit), we 
believe the preamble to the August 1998 rule reflects our intent to 
base the scope of the final listings on the function performed by the 
units or reactors in which spent catalysts are generated. Therefore, 
when we clarified in our November 29, 1999 and June 1, 2001 memoranda 
that spent catalysts removed from dual purpose reactors are included 
within the scope of the hazardous waste listings based on the function 
performed by dual purpose reactors, we were consistent with the overall 
thrust of the discussion provided in the preamble to the final rule.
    As we explained in the July 5, 2001 Federal Register notice, we 
acknowledge that the scope of the hazardous waste listings, as 
explained in the memoranda, is controversial. Therefore, although we 
believe that the policy explained in the memoranda is a correct reading 
of the final regulatory language, we decided to take the unusual step 
of soliciting public comment on the memoranda in which we explained our 
policy, due to concerns raised by the regulatory community. In today's 
notice, and after considering public comments received in response to 
the July 5, 2001 notice, we are providing public notification that we 
are retaining our policy with regard to the regulatory status of spent 
catalysts removed from dual purpose hydroprocessing units, as it is 
explained in our memoranda of November 29, 1999 and June 1, 2000.
    We also disagree with the commenters' assertion that, because we 
promulgated the final listings as ``K'' listings, this limits the scope 
of the listings to specific units. Neither the listing descriptions 
codified in the regulatory language nor the preamble to the final rule 
limits the listings to specific units. Both the final listing 
descriptions and the preamble language describe the scope of the 
listing based on the function performed by the units or reactors from 
which the spent catalysts have been removed. In addition, while the 
commenter is correct that some K-listings are unit specific (such as 
K051--API separator sludge from the petroleum refining industry), many 
K-listings are not unit specific, but process-specific from a 
particular industry. For example, there are 16 separate listings within 
the K-listings that specify ``wastewater treatment sludge'' from a 
particular industry (e.g., from the production of toxaphene (K041)). 
The wastewater treatment sludge listings are not necessarily from a 
particular type of unit. Instead, the listings can be derived from any 
wastewater treatment process involved in the production of a certain 
product. In fact, very few of the K-listings actually specify a 
specific unit. The major difference between the F- and K-listings is 
that the K-listings generally identify wastes generated by a particular 
industry and are often more specific with regard to where the waste is 
formed. Therefore, the Agency's interpretation that spent catalyst from 
dual-purpose reactors is included in the listing is consistent with the 
Agency's designation of other K-listings.
    We also do not agree with arguments that we should redefine the 
scope of the hazardous waste listings for spent hydrotreating catalysts 
and spent hydrorefining catalysts based on the amount of hydrocracking 
performed in the units or reactors from which the catalysts are 
removed. We find it is more appropriate to base the scope of the 
listings on the basis of the hydrotreating and hydrorefining functions 
performed by the units. As we explained in the preamble to the August 
6, 1998 final rule and in our responses to comments received on the 
proposed listing determinations (60 FR 57747), we continue to reject 
the notion of defining these wastes on the basis of the degree of 
hydrocracking that is performed in the units or reactors from which 
they are removed. As we stated in the preamble to the final rule, 
reliance on specific conversion rates allows that slight changes in 
operating and accounting practices may result in reclassification of 
units or reactors that otherwise would be considered hydrorefiners or 
hydrotreaters. In addition, the mere presence of hydrocracking does not 
preclude a unit or reactor from performing a significant hydrotreating 
or hydrorefining function. Hydrotreating and hydrorefining of petroleum 
feedstock results in the demetalization and desulfurization of 
petroleum feedstock as well as the removal of other impurities and 
heteroatoms. The performance of these functions results in the 
contamination of the catalyst, such that it eventually becomes spent. 
We found that the degree of contamination of the catalyst has a direct 
correlation to the risk potential of the spent catalyst.

B. Comments Received From the Catalyst Recycling Industry

    We also received comments from the Ferroalloys Association, a trade 
association representing companies that recycle spent hydroprocessing 
catalysts. The catalyst recycling industry generally supports the 
policy articulated in the November 29, 1999 and June 1, 2001 memoranda. 
As stated in its comments, the commenter agrees that spent catalysts 
that perform hydrotreating or hydrorefining functions should be 
regulated as hazardous wastes, even when the catalysts are removed from 
units that also perform conversion of heavy fractions to lighter 
fractions. The commenter points out, however, that in the July 5, 2001 
Federal Register notice, we identified only three types of dual purpose 
hydroprocessing units. The commenter argues that other types of 
hydroprocessing units, including some fixed bed units also perform both 
hydrotreating and hydrocracking functions. As pointed out above, our 
interpretation of the final spent catalyst listings, as described in 
the final rule preamble, the two memoranda, and in this notice, is that 
the listings include spent catalysts from dual purpose hydroprocessing 
units. At present, we are aware of three types of specific dual purpose 
units (H-oil, L-C fining, and T-star units), that both hydrocrack 
petroleum feedstock and perform hydrotreatment or hydrorefining 
functions. We are aware that more such units could become available in 
the future and that others could now exist of which we are unaware. 
Although we do not anticipate that many other such units exist, other 
dual purpose units could exist, and the spent catalysts from such units 
would be captured by the listings.
    The July 5, 2001 notice established that the Agency's policy, as 
described in the November 29, 1999 and June 1, 2000 memoranda, is that 
spent catalysts from hydroprocessing units that perform both a 
hydrotreating (or hydrorefining) function and a hydrocracking function 
are listed hazardous wastes. However, spent catalysts from reactors 
that perform a hydrocracking function and

[[Page 30818]]

only some incidental and minimal amount of hydrotreatment of feeds 
(e.g., the second stage of a two-staged ISOCRACKING unit) are not 
listed hazardous wastes. As explained above, the scope of the hazardous 
waste listings for K171 and K172 includes spent catalysts removed from 
a reactor that performs a hydrotreating or hydrorefining function, 
including a spent catalyst from any dual purpose reactor designed and 
operated to hydrotreat or hydrorefine petroleum feedstock, as well as 
hydrocrack the feed in the same reactor. The scope of the listing is 
not limited to the specific units named above or in the background 
document to this notice, or to units with specific brand names.
    The catalyst recyclers also commented that, when EPA promulgated 
the final hazardous waste listings for spent catalysts, EPA designated 
the listings as ``specific source'' listings, or ``K'' listings. The 
recyclers suggested that the Agency amend the listings by combining 
both listings into one ``F,'' or non-specific source listing. In its 
comments, the catalyst recycling industry also encouraged EPA to 
undertake a listing investigation to determine whether or not spent 
hydrocracking catalysts should be listed as hazardous waste. The 
commenter points out that data previously collected by the Agency may 
support such a hazardous waste listing.
    The issue regarding the designation of a ``specific source'' 
listing versus ``non-specific source'' listing (i.e., a ``F-listing'' 
versus a ``K-listing'') is addressed above. The request regarding a 
listing determination for spent hydrocracking catalyst is beyond the 
scope of today's notice.

C. Comments Related to Encouraging Recycling

    Commenters representing petroleum refineries argued that EPA should 
promulgate a conditional exemption from the hazardous waste listings 
for spent hydrotreating catalysts and spent hydrorefining catalysts 
that are recycled. Commenters argued that a conditional exemption from 
the hazardous waste listing would encourage more recycling of spent 
catalysts.
    The consideration of a conditional exemption from the hazardous 
waste listing for spent catalysts that are recycled is beyond the scope 
of today's notice. A commenter representing the petroleum refining 
industry argued that the final listing determination resulted in 
significant increases in the cost of recycling spent catalysts. The 
commenter stated, that ``the predicted result of EPA's refusal to 
tailor the listings was that the costs related to reclamation rose 
substantially (up to $500-800/ton) after the listings took effect in 
early 1999, while landfilling of the listed catalysts--in compliance 
with Subtitle C of RCRA--became relatively more practical and 
economical (about $200/ton) than reclamation.'' The commenter provided 
no additional documentation of its claim.
    Information available to EPA does not support this conclusion. 
Available information indicates that management costs for catalyst 
recyclers increased only slightly as a result of the 1998 final 
rulemaking due to the need to manage wastes generated as a result of 
the reclamation process as hazardous wastes. Almost all of the catalyst 
reclaimers had Subtitle C storage permits prior to the 1998 final rule 
because many catalysts exhibit one or more of the hazardous waste 
characteristics and, therefore, had to be managed as hazardous wastes 
prior to the final listing determination. Although we do not dispute 
that there is a significant cost differential between the costs 
associated with reclamation and disposal of spent catalysts, the cost 
differential is not a result of the final listing determination. In 
addition, we do not expect a regulatory amendment changing the listing 
status of spent catalysts that are reclaimed or recycled to have any 
significant effect upon the future costs of waste management practices.
    In its comments, the association representing the catalyst 
reclaimers did not address the issue of a conditional exemption from 
the hazardous waste listing for spent catalysts that are recycled. 
However, the association has petitioned the Agency to amend the land 
disposal restrictions treatment standards promulgated as part of the 
final listing determination to require similar treatment requirements 
for both spent hydrotreating catalysts and spent hydrorefining 
catalysts. The catalyst reclaimers argue that the difference in 
treatment standards for spent hydrorefining catalysts discourage 
recycling of these wastes and result in significant levels of hazardous 
constituents being land disposed.
    We believe it is important to encourage recycling and reclamation 
of hazardous wastes, as well as the conservation of resources. It is a 
particularly important goal for the Agency to encourage the reclamation 
of hazardous wastes containing significant quantities of recoverable 
metals. As commenters to the July 5, 2001 notice pointed out, spent 
petroleum hydroprocessing catalyst can contain recoverable quantities 
of vanadium and other metals. Therefore, we continue to encourage all 
parties to identify ways in which the recycling of spent catalysts may 
be encouraged.

    Dated: April 30, 2002.
Marianne Lamont Horinko,
Assistant Administrator, Office of Solid Waste and Emergency Response.
[FR Doc. 02-11451 Filed 5-7-02; 8:45 am]
BILLING CODE 6560-50-P