Petrochemicals Under Fire

A massive explosion in an underground chemical pipeline caused extensive damage in downtown Kaohsiung in 2014. Photo: CNA

On the last day of 2015, state-owned petroleum company CPC pulled the plug on its Kaohsiung Refinery in the city’s Nanzih District, putting an end to what had been a 25-year-long dispute between advocates of economic development and environmental and community activists. The facility operated as a large integrated refinery and petrochemicals plant, with a refining capacity of 220,000 barrels of oil per day and was the site of the Fifth Naphtha Cracker, with a capacity of 500,000 metric tons annually (mta) of ethylene production.

The Kaohsiung Refinery was the longest operating refinery in Taiwan, but was ultimately doomed by the decision to build the Fifth Naphtha Cracker there. That project was first proposed within weeks of the lifting of martial law in July 1987. Protests against the naphtha cracker erupted almost immediately, organized by local and national environmental activists and spurred on by the newly formed Democratic Progressive Party.

After years of turmoil, the government of Premier Hau Pei-tsun used the classic carrot-and-stick approach, meeting protests with confrontation and suppression but also establishing an NT$1.5 billion fund that provided subsidized cooking gas and free school lunches to local residents. The most significant concession was a government pledge to relocate or close the new naphtha cracker in 25 years, which mollified residents. CPC began construction in September 1990, and it went into operation in 1994.

While Taiwan’s petrochemical industry has long been seen as an engine of economic growth, it has also been viewed as a source of significant environmental degradation and harm to human health. Chemicals derived from crude oil, especially benzene but including ethylene oxide and vinyl chloride, are considered carcinogens. A study published in 2006 by the American Journal of Epidemiology linked proximity to petrochemical plants to rises in leukemia rates. Cancer rates are also reportedly higher in the area neighboring the Mailiao complex of the Formosa Plastics Group (FPG). The Ciaotou Elementary School’s Syucuo branch, located within one kilometer of the plant, was ordered relocated after the National Health Research Institute discovered high levels of hazardous pollutants in the school.

Eight fires or major accidents occurred at the Mailiao facility within a 14-month period in 2010-2011. Photo: CNA

The petrochemical industry is also criticized for its high energy consumption and emissions. The sector accounts for some 14% of total electricity demand in Taiwan, according to comparative data provided by the Petrochemical Industry Association of Taiwan and the Bureau of Energy under the Ministry of Economic Affairs, yet only contributes around 10% to the overall economy. FPG’s Mailiao complex in Yunlin County is powered by its own coal-fired cogeneration plants and has been fined on numerous occasions for exceeding particulate and gaseous pollutant standards.

Processing petrochemicals also presents the risk of toxins being directly released into the atmosphere. The waste water and solid waste produced are likewise very hazardous, and although Taiwan has strong regulations stipulating that all waste must be cleaned and disposed of by certified waste handlers, industry insiders say that the number of such waste handlers is insufficient to deal with the volumes of waste, presenting the risk that certain amounts of hazardous waste are disposed of illegally and potentially unsafely.

Further, as many of the chemicals are volatile, flammable, and are processed under extreme temperatures and pressure, accidents are another risk. FPG faced an unprecedented string of accidents at its Mailiao plant in 2010 and 2011, with eight major fires or other accidents occurring within a 14-month period. Formosa Petrochemical Corp. Chairman Wilfred Wang and President Su Chi-yi both resigned in August 2011 to take responsibility after another fire erupted at a propylene plant at the complex, paving the way for the current chairman, Chen Bao-long, a former head of CPC, to come out of retirement to take the helm.

Safety has improved since then, but accidents continue to happen, including an explosion on March 6 at a plant in Mailiao belonging to FPG subsidiary Formosa Chemicals & Fibre Corp. Four workers were injured.

The worst disaster associated with the petrochemical industry was the July 2014 explosion of an underground pipeline that was transporting imported propylene to LCY Chemical’s Kaohsiung plant. The incident left over 30 dead and devastated a swathe of urban Kaohsiung. Pipelines connecting CPC’s naphtha crackers at Linyuan to downstream manufacturers run beneath city streets, presenting a hidden danger to residents. The alternative, transporting chemicals by truck, is considered even riskier.

The chemical industry is overseen by 11 central government ministries and agencies based on the authority of 17 laws. The key regulator is the Environmental Protection Administration (EPA) as well as local bureaus of environmental protection, which are generally charged with monitoring air quality and water treatment.

In order to more closely monitor the industry, the Legislative Yuan approved a bill last December to establish a new Toxic and Chemical Substances Bureau under the EPA. According to the legislation, the new bureau’s role will be to “carry out point of origin regulation, articulation of enforcement and inspection of toxic and chemical substances in order to protect the health of the citizenry.”

Local sentiment appears to have shifted strongly against petrochemicals, but members of the chemical industry contend that the sector has been unfairly tarnished. They say that the Environmental Impact Assessment process has become unduly politicized, and that the environmental issues of high energy consumption, high water use, emissions, and hazardous waste are in fact worse in other industries, including electrical power and semiconductors.

As for the closed Kaohsiung Refinery, after waiting over two decades for the facility to shut down, local residents will need to wait a bit longer before the land can be reclaimed for other uses. Current estimates say CPC will be at work for at least 20 years removing all of the equipment and remediating contaminated soil, although the city government is pushing for the work to be completed in just 17 years.