BOARD MEETING DATE: June 1, 2007
AGENDA NO. 39

PROPOSAL:

Amend Rule 1173 – Control of Volatile Organic Compound Leaks and Releases from Components at Petroleum Facilities and Chemical Plants

SYNOPSIS:

The proposed amendments will require enhanced monitoring and reporting of releases from pressure relief devices and other amendments for clarity and enforceability, including clarifying the applicability of facilities subject to the rule.

COMMITTEE:

Stationary Source, May 25, 2007, Reviewed

RECOMMENDED ACTION:

Adopt the Resolution:

1. Certifying the CEQA Final Environmental Assessment for Proposed Amended Rule 1173 – Control of VOC Compound Leaks from Components at Petroleum Facilities and Chemical Plants; and
2. Adopting Proposed Amended Rule 1173 - Control of VOC Compound Leaks and Releases from Components at Petroleum Facilities and Chemical Plants.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The most recent Rule 1173 amendment on December 2, 2002, required monitoring and reporting of releases from atmospheric process PRDs and the option of either venting PRDs that release significant amounts of VOCs to control or vapor recovery or payment of a $350,000 mitigation fee. The Board Resolution also directed staff to provide periodic updates on PRD releases, resulting in a report presented to the Stationary Source Committee that indicated in 2003 there were a total of five VOC releases from process PRDs, each of which was each greater than 2,000 pounds.

PRD releases over the last four years have varied from 89 tons in 2003; 4 tons in 2004; 0.5 tons in 2005 and 7.5 tons in 2006. These individual PRD VOC releases included one that was greater than 61 tons in 2003 and another of 5.5 tons in December of 2006. Staff’s evaluation of release data submitted concluded that amendments to require further control of atmospheric PRDs were not necessary at this time, but that monitoring could be enhanced by taking advantage of recent advancements in wireless electronic monitoring technology that could be used for continuous monitoring. Since the 2002 amendment of the rule, one refinery has installed nine wireless PRD monitoring devices and was awaiting equipment turnaround to install a tenth wireless PRD monitoring device. Another refinery is also conducting a pilot program that consists of the installation of more than 20 wireless monitoring devices on their PRDs. Therefore, staff proposes that the rule be amended to enhance PRD monitoring.

While in the process of studying atmospheric PRDs, staff determined that lubricating oil and grease re-refiners and marine terminals have components such as valves, pumps, compressors and connectors associated with their operations that have the potential to leak fugitive emissions. Therefore, staff concluded that these two new source categories should be included in the rule.

Affected Facilities

The facilities subject to this amendment include refineries, marine terminals and lubricating oil and gas re-refiners.

Public Process

During the rulemaking process, staff met seven times with industry and members of the community. A public workshop and CEQA scoping meeting was held on April 3, 2007. In addition, a public consultation meeting was held in the evening on May 9, 2007 in the City of Wilmington.

Proposal

The primary objective of PAR 1173 is to reduce leaks and releases from components at lubricating oil and grease re-refiners and marine terminals by requiring these facilities to implement a leak detection and repair (LDAR) program. In addition, PAR1173 will require the implementation of an enhanced atmospheric PRD monitoring program at refineries. The LDAR program is expected to achieve approximately up to 0.4 ton per day VOC reductions. Due to the random nature of atmospheric PRD releases, an emission reduction was not quantified for the enhanced PRD monitoring, although it is expected that improved monitoring will result in reduced VOC emissions from fewer PRD leaks and releases. The following is a summary of the proposed amendment:

• Requires an LDAR program for lubricating oil and grease re-refiners and marine terminals beginning no later than January 1, 2008.

• Requires refineries to install tamper-proof electronic monitoring devices to continuously monitor atmospheric process PRDs.
  • Refineries with less than 50 atmospheric PRDs must install monitoring devices:
    (1) on 50% of all atmospheric PRDs by January 1, 2009 and (2) on the remaining atmospheric PRDs by July 1, 2009.
  • Refineries with more than 50 PRDs must install monitoring devices: (1) on 20%
    of all atmospheric PRDs by January 1, 2009; (2) on 40% of all atmospheric PRDs by July 1, 2009 and (3) on the remaining atmospheric PRDs by July 1, 2010.
  • Provides alternative PRD monitoring installation dates and technology subject to AQMD approval.
• Requires the installation of telltale indicators on atmospheric PRDs at lubricating oil and grease re-refiners and marine terminals by December 31, 2007 and the start of monitoring by January 1, 2009.

• Requires lubricating oil and grease re-refiners and marine terminals to notify the AQMD of any atmospheric PRD releases that are greater than 100 pounds and to submit reports indicating the details of these releases.

• Requires all facilities to submit quarterly electronic reports for all process atmospheric PRDs indicating the process parameters monitored as a function of time.

Cost Effectiveness Determination

The cost effectiveness of the proposed amendments is $919 per ton of VOC reduced based on evaluation of the LDAR program for components in heavy liquid service and components in light liquid service at lubricating oil and grease re-refiners and marine terminals. Cost effectiveness estimates for VOC vapor recovery and controls and for continuous atmospheric PRD monitoring devices were not included in the cost effectiveness for the proposed amendments since the need for control and the amount of pollution reduced are unpredictable.

AQMP and Legal Mandates

PAR 1173 will implement Control Measure FUG-05 – Emission Reductions from Fugitive VOC Sources, of the 2003 Air Quality Management Plan (AQMP) by requiring a leak detection and repair (LDAR) program at lubricating oil and grease re-refiners and marine terminals and the implementation of an enhanced monitoring program at these facilities and refineries. At full implementation, PAR 1173 would achieve approximately 0.4 tons per day of VOC emissions reductions.

California Environmental Quality Act

Pursuant to California Environmental Quality Act (CEQA) Guidelines §15252 and AQMD Rule 110, the AQMD has prepared an Environmental Assessment (EA) for PAR 1173. The Draft EA was released for a 30-day public review and comment period beginning March 28 and ending April 26, 2007. Responses are included in the final EA, included as Attachment G of this Governing Board package.

Socioeconomic Analysis

The proposed rule will affect 9 refineries and 13 non-refinery facilities located in the South Coast Basin. The non-refinery facilities belong to petroleum marine terminals, other warehousing and storage and petroleum lubricating oil and grease manufacturing. The total annualized cost of the proposed rule was projected to be $0.72 million, on average from 2008 to 2020. Refineries will incur 78 percent (or $0.56 million) of the cost which will go towards the purchase of electronic PRD monitoring devices, while the remaining 22 percent (or $0.16 million) will be spent on the LDAR program.

Implementation and Resources

No additional AQMD resources are required to implement the proposed amendments.

Attachments (EXE 364kb)
A. Summary of Proposed Amendments
B. Rule Development Process
C. Key Contacts List
D. Resolution
E. Rule Language
F. Final Staff Report
G. Final Environmental Assessment