Thursday, October 7, 2010

Case Study: Caltex Oil Refinery- Caltex's Perspective on Environmental Impacts and what they are doing

In 1951-3 when the Caltex oil refinery was being constructed, Kurnell was a small fishing village, which could only be reached by boat. The construction of the refinery opened up the village by constructing a new road, which in effect opened up the village to increasing numbers of people, houses, and industry.

Today, the Caltex oil refinery at Kurnell is the largest refiner of crude oil in Australia, processing and manufacturing 130,000 barrels (20,670,000 litres) of oil per day and employing 550 people and 200 contractors (M Sullivan 2010, pers. Comm., 7 Oct.). It produces around 50 different products— 50% petrol, 22% diesel as well as jet fuel oil, LPG, butane, bitumen, waxes, process oils and sulfur, and supply’s two thirds of Sydney’s oil product market (Caltex,2006). A 600,000 litre a day lubricating oil refinery is also at Kurnell however this will be closing in 2011 due to outdated processes used there, which were installed in the 1950-s and 60’s, meaning that Caltex will no longer manufacture these products at Kurnell (or anywhere else) (M Sullivan 2010, pers. Comm., 7 Oct.).

There have been several oil spills at Kurnell and in Botany Bay. One of the most devastating oil spills as a result of the Kurnell oil refinery occurred in 1979, when the oil tanker the World Encouragement released 95 tonnes of crude oil into the bay. This spill has been cited by the Australian Government as one of the top 25 major oil spills since 1903. This spill was contained by booms soon after the leak was detected, but the oil already had a 3.5km front and this, combined with bad weather (gale force winds and a high tide), meant that contained areas were breached and the oil moved into Quibray and Weeney Bays, Towra point, and Silver beach. These locations contain mangroves and oyster leases which in turn made it difficult to contain the oil, as methods such as spraying dispersant could not be used. As a result of the spill 100 hectares of mangroves were affected by the oil and 4.4 hectares were destroyed. Furthermore many birds were affected by the oil with 50 birds being captured (although many others were oiled and affected but unable to be caught) and cleaned, with three dying and the rest being released. (Australian Government, Australian Maritime Safety Authority, n.d)

The map below shows the extent of the oil spill from the World Encouragement. “Black lines represent moderate oiling, and dark grey shaded areas are mangroves, shaded cross-hatched areas are slightly oiled, black lines represent oiled shoreline and thick black bands are moderate to heavy oiling in mangrove areas” (Australian Government, Australian Maritime Safety Authority, n.d).
Source: Duke & Burns (1999)

The refinery has had several other adverse impacts on the environment of Kurnell, Botany Bay and surrounding areas such as the Towra Point Wetlands. "The refinery is licensed by the EPA for many environmental discharges including air, groundwater and water pollution, noise, and sludge and for soil conditions on the refinery's landfarm” (SSEC, 2000). This means that it releases effluent and stormwater into the ocean, which on several occasions has produced a oily slick on the surface of the water. Additionally the refinery collects and disposes of cooling water into the Bay (SSEC 2000,2008) causing heat pollution and potentially disrupting the marine ecosystem.

Despite these adverse impacts Caltex claims that it is trying to counter these effects by putting management plans into action and training staff. In 2006 Caltex published a report entitled ‘Kurnells environmental story’ which claims that they have “adopted a more focused approach to the environment. We don’t merely respond to the requirements of regulators; we proactively identify improvements and go after them” (Caltex 2006). It does seem as if the refinery has followed the majority if not all of what they claim in this document, as summarised below: 

Conserving resources for future generations
The plant is very water intensive and is the third largest user of water in the Sydney metropolitan area, using approximately 6 million litres of freshwater daily. Therefore conserving water is a challenge for the oil industry, and Caltex sees it as an important initiative. They are currently recycling 50% of their water used internally and saving water by using wastewater to test the soundness of tank repairs instead of using freshwater (this is a massive saving with the tanks having a capacity up to 65 megalitres) and they have also improved their steam recovery (they generate 350 tonnes of steam an hour). Furthermore Caltex is looking to reduce its potable water use by 50% in the medium term future through options such as using wastewater in more processes, reusing Sydney water sewage treatment effluent, and reusing water by use of reverse osmosis and microfiltration.

The Kurnell plant processes waste water in a three stage onsite treatment plant, in a biotreater consisting of tanks that contain a variety of microorganisms, which decompose contaminants. This treats around 8-14 million litres a day, with the water then pumped into the ocean 100m off the coast. All water leaving the plant is also monitored through online instrumentation and regular manual sampling. 

The groundwater below the refinery links with Botany Bay and Quibray Bay. Caltex claims they take great care not to contaminate water, by undertaking regular (quarterly) groundwater surveys on their network of permanent groundwater monitoring wells, which is a more extensive program than the Environment Protection Licence requirements. 

There are two stormwater outlets in the refinery into Botany Bay and Quibray Bay. To protect these areas the refinery uses ‘upstream’ initiatives to make workers more aware of impacts of contaminated stormwater. They have also installed a siphon unit, a concrete pit 7.5 x 2.5 meters and 2.5 meters deep, which allows enough time for water and oil to be separated by gravity with oil present then being skimmed from the surface. 

How we’re contributing to cleaner air 
Caltex claims that without doubt, their most important contribution to the environment over the next decade will be the production of cleaner fuels, to make vehicles more efficient, through initiatives such as the clean fuels project and the manufacturing and development of biofuels (ethanol and biodiesel) 

The clean fuels project 
Allowing the plant to produce fuel with lower levels of benzene and sulfur which will make a vital contribution to cutting air pollution. The clean fuels project means that the Kurnell plant is producing some of the cleanest fuels in the world, which will result in improved air quality, better health and fewer greenhouse emissions. 

Reducing the impact of our operations 

Air Quality 
The key pollutants emitted from the oil refinery include sulfur, nitrogen oxides, carbon dioxide, carbon monoxide, particulate matter and volatile organic compounds (propane, butane, and ethane). Air emmisions are monitored on a continuous scheduled basis, and reported back to state environmental agencies, publically available at 

Greenhouse Gas Emissions 
The greenhouse emissions at the Kurnell plant have increased overtime, however this is due to increased production, reductions in the amount of emissions released per tonne of crude oil processed (increased efficiency). Cutting greenhouse gases at the refinery is a challenge as creating cleaner fuels is more energy intensive and produces more emissions however emissions will be reduced from vehicles using cleaner fuels. 

Containing Spills 
A 1000 litre mini-tanker to replace the elevated diesel tank and drum, the mini tanker refuels directly from the fuel bowsers thus removing the risk of refueling from heights and reducing the risk of exposure and spills. 

Nitrogen Oxides
The refinery has upgraded one of their furnaces which uses new technology that produces the same thermal output, while producing only an eighth of the nitrogen oxide emissions. 

Sulfur Dioxide Emissions 
Using a sulfur recovery unit, Caltex extracts sulfur from sour crude oil, as a liquid product, recovering approximately 5700 tonnes of sulfur dioxide per year, by converting hydrogen sulfide into liquid sulfur, which is taken offsite to be converted into sulfuric acid, this process saves large amounts of sulfur dioxide emissions. However they still emit approximately 2400 tonnes of sulfur dioxide a year, which is under their licence regulations and they are looking to make further reductions in the future. 

Particulate emissions occur when small particles of dust or fuel escape from furnace stacks. Caltex is running as much of their equipment as possible on natural gas which doesn’t produce particulates, and have modified burners in the furnaces to produce a cleaner, more efficient flame, which has reduced the particulate levels by 95%. This is reflected by a dramatic reduction in the number of particulate related community complaints. 

Odours are an unavoidable by-product of the refinery process and are a significant issue for the Kurnell community, with 40% of all complaints being about odour. The main sources of odour are carefully managed so if an odour does reach the community it’s likely source is a fugitive emission (a small leak). Caltex is focused on removing these fugitive emissions by regularly checking valves, gauges and joints to see if any repairs are required. They have also allowed the community to help them by reporting odour intensity and character. 

Waste Management 
Caltex aims to use resources efficiently, by avoiding unnecessary resource consumption, recycling and recovering resources such as energy, and also through use of on site waste treatment of recovering clean oils for reprocessing. The refinery produces many wastes including old concrete, bricks, bottles, timber, cardboard, paper, food wastes, laboratory chemical, spent catalyst, pipes, pumps, valves, metal cut offs and drums. 

Energy Consumption 
Oil refineries are one of the most energy intensive industries in Australia, and this is recognised by Caltex and they acknowledge that they need to reduce their energy consumption. They are attempting to do this through using new technologies and more stable operations, with less interruptions, start ups and shut downs. They are also exploring ways and new technologies they can use to save energy through heat exchange. 


Australian Government, Australian Maritime Safety Authority, n.d, Major oil spills in Australia: World Encouragement, Botany Bay, September 1979, Australian Government, accessed October 7 2010, 

Caltex 2006, Kurnell's environmental story, Business Writers, Australia

Duke, N.C. & Burns, K.A., 1999 Fate and effects of oil and dispersed oil on mangrove ecosystems of Australia: Final Report to the Australian Petroleum Production and Exploration Association, Australian Institute of Marine Science, Townsville

Sullivan, M., personal communication, October 7 2010

Sutherland Shire Environment Centre, 2000, Issues of concern- Kurnell peninsula: presentation to Botany Bay program meeting, SSEC, accessed 2 October 2010 

Sutherland Shire Environment Centre, 2008, The Kurnell Peninsula: Oil Refinery, SSEC, accessed 2 October 2010 <>


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