**TO:** EPA Docket No. EPA-HQ-OAR-2003-0146

**FROM:** Bob Lucas, EPA/SPPD

**DATE:** July 27, 2007

**SUBJECT:** Gasoline Loading Racks: Control Options and Impact
Estimates

**I. [Purpose]{.underline}**

This memorandum documents the methodology used to identify the control
options and estimate the costs and environmental impacts for gasoline
loading rack control options.

**II. [Background]{.underline}**

Section 112(f) of the Clean Air Act Amendments (CAA) directs the U.S.
Environmental Protection Agency (EPA) to assess source categories
regulated under Section 112(d) of the CAA and determine whether any
human health or environmental risks remain from the continued emissions
of hazardous air pollutants (HAPs) following implementation of maximum
achievable control technology (MACT) standards. The CAA further states
that if the MACT standards do not reduce lifetime excess cancer risk to
the most exposed individual to less than one in one million, EPA must
set additional standards to protect human health and the environment, in
accordance with the interpretation set forth in the Benzene NESHAP.
Additionally, the EPA is required to review these technology-based
standards and to revise them "as necessary (taking into account
developments in practices, processes and control technologies)" no less
frequently than every 8 years, under CAA section 112(d)(6). The Refinery
MACT 1 (40 CFR Part 63 Subpart CC) was promulgated over 8 years ago and
is now being reviewed.

**III. [Summary of Existing Refinery MACT 1 Storage Vessel Control
Requirements]{.underline}**

Refinery MACT 1, subpart CC requires gasoline loading racks located
within a gasoline terminal that is above a certain size to meet the
control requirements specified in part 63 subpart R, which references
requirements in 63.502 of 40 CFR part 60, subpart XX (Standards of
Performance for Bulk Gasoline Terminals). Refinery MACT 1 defines *Group
1 gasoline loading rack* as:

> as any gasoline loading rack classified under Standard Industrial
> Classification code 2911 that is located within a bulk gasoline
> terminal that has a gasoline throughput greater than 75,700 liters per
> day \[20,000 gallons per day\]. Gasoline throughput shall be the
> maximum calculated design throughput for the terminal as may be
> limited by compliance with enforceable conditions under Federal,
> State, or local law and discovered by the Administrator and any other
> person.

Group 1 gasoline loading rack emissions must not exceed 10 milligrams of
total organic compounds per liter of gasoline loaded.

**IV. [Identification of Control Options]{.underline}**

Control options for gasoline loading racks at bulk gasoline terminals
with lower daily throughput cutoff values were reviewed. Two gasoline
loading rack control options were identified.

-   [Option 1]{.underline}: limit emissions from gasoline loading racks
    located at a bulk gasoline terminal that has a throughput greater
    than 56,780 liters per day (15,000 gallons per day) to 10 milligrams
    of total organic compounds per liter of gasoline loaded.

-   [Option 2]{.underline}: limit emissions from gasoline loading racks
    located at a bulk gasoline terminal that has a throughput greater
    than 37,850 liters per day (10,000 gallons per day) to 10 milligrams
    of total organic compounds per liter of gasoline loaded.

**V. [Impact Estimates for Model Gasoline Loading Racks]{.underline}**

***Model Plant Gasoline Loading Racks***

Model plants for loading rack controls from the proposal BID for Stage I
gasoline distribution were used to estimate control costs.[^1] The model
plants from the proposal BID for Stage I ranged in size from 100,000
gal/day to 1,000,000 gal/day and were significantly larger than the
throughputs in the options for this analysis. The smallest model plant
from the Stage I analysis was selected, for upgrade of gasoline loading
rack controls (Model Plant 1, Table 5-3 for Bulk Gasoline Terminal Model
Plant Parameters) to simulate gasoline loading operations at Refinery
MACT 1 sources that would be subject to the control options. Rough
estimates were made to scale the costs for Model Plant 1 to 2006 costs
and to the 15,000 gal/day and the 10,000 gal/day throughputs
(represented by Model Plant A at 17,000 gal/day and Model Plant B at
12,000 gal/day throughput, respectively)

***Model Plant Baseline Emissions***

Baseline emissions were estimated using AP-42 emissions factors for bulk
terminals with gasoline throughputs of 17,000 gal/day and 12,000
gal/day. Using equation 1 from section 5.2 of AP-42, the loading loss
was estimated to be 6.77 lb VOC/1000 gal loaded, based on a saturation
factor of 0.6 (assumed submerged loading and dedicated normal service
for tanker trucks or railcars), a vapor pressure of 7.4 psia based on
gasoline with RVP 10, molecular weight of 68 lb/lb mole, and temperature
of 80ºF.[^2] Based on average refinery waste stream compositions
(Refinery MACT 1), the HAP emissions were assumed to be 10.8 percent of
the total VOC emissions. Baseline emissions for both VOC and HAP for
Options 1 and 2 are shown in Table 1.

**Table 1. Model Plant Emissions Impacts of Refinery Gasoline Loading
Rack Control Options**

  ---------------- ------------ --------------- ------------ --------------
  **Model Plants** **VOC        **VOC Emission  **HAP        **HAP Emission
                   Baseline     Reduction from  Baseline     Reduction from
                   emissions,   Baseline,       emissions,   Baseline,
                   ton/yr**     ton/yr**        ton/yr**     ton/yr**

  Model Plant A:   20.99        19.94           2.27         2.15
  Throughput                                                 
  17,000 gal/day                                             

  Model Plant B:   14.82        14.08           1.60         1.52
  Throughput                                                 
  12,000 gal/day                                             
  ---------------- ------------ --------------- ------------ --------------

***Model Plant Emissions Reductions***

Emissions reductions for control of emissions from gasoline loading
racks were estimated based on control with a thermal oxidizer achieving
an efficiency of 95 percent. The emissions reductions for VOC and HAP
are shown in Table 1.

***Model Plant Control Costs***

Control costs were taken from the proposal BID for Stage I gasoline
distribution (Model Plant 1, Table 7-11 for Bulk Terminal Loading Rack
Costs -- Upgrade of 80 mg/l to 10 mg/L Unit). As the cost estimates were
originally developed in 1990, the costs were escalated to 2006 dollars
using the Chemical Engineering Plant Cost Index (CEPCI). The average
CEPCI in 1990 was 357.6; the average CEPCI in 2006 was 499.6. The costs
were also scaled based on equipment size using the following
relationship:[^3]^,^ [^4]

$C_{2} = C_{1} \ast \left( \frac{Q_{2}}{Q_{1}} \right)^{0\text{.}6}$
*Eqn 1*

Where:

C~2~ = cost of equipment having size Q~2~

C~1~ = cost of equipment having size Q~1~

Q~2~ = size of equipment E~2~

Q~1~ = size of equipment E~1~

Annual operating costs were roughly escalated to 2006 dollars and also
scaled for the equipment size (i.e., 17,000 gal/day and 12,000 gal/day
throughputs). The model plant control costs for Option 1 were considered
to be average costs per bulk gasoline terminal.

Control costs for Option 2 were estimated using the same approach and
costs are shown in Table 2.

**Table 2. Model Plant Capital and Annual Costs for Thermal Oxidizer
Control of Refinery Gasoline Loading Rack**

+----------------+---------+---------+---------------+----------------+
| **Costs**      | **      | **      | **Model Plant | **Model Plant  |
|                | Thermal | Thermal | A: Thermal    | B: Thermal     |
|                | Ox      | Ox      | Oxidizer,     | Oxidizer,      |
|                | idizer, | idizer, | scaled to     | scaled to      |
|                | 1990    | 2006    | smaller unit  | smaller unit   |
|                | \$**    | \$**    | (17,000 gal   | (12,000 gal    |
|                |         |         | /100,000 gal) | /100,000 gal)  |
|                |         |         | a**           | a**            |
+----------------+---------+---------+---------------+----------------+
| **Capital      |         |         |               |                |
| costs b**      |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| Unit purchase  | 108,000 | 151,000 | 52,100        | 42,300         |
| cost           |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| Unit           | 92,000  | 128,000 | 44,300        | 35,900         |
| installation   |         |         |               |                |
| cost           |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| **TCI**        | **20    | **27    | **96,400**    | **78,200**     |
|                | 0,000** | 9,000** |               |                |
+----------------+---------+---------+---------------+----------------+
| **Annual       |         |         |               |                |
| costs**        |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| Electricity c  | 1,000   | 1,280   | 444           | 360            |
+----------------+---------+---------+---------------+----------------+
| Pilot gas d    | 7,300   | 19,600  | 6,780         | 5,500          |
+----------------+---------+---------+---------------+----------------+
| Maintenance e  | 3,500   | 4,890   | 1,690         | 1,370          |
+----------------+---------+---------+---------------+----------------+
| Operation      | 6,800   | 16,400  | 5,670         | 4,600          |
| labor f        |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| Capital        | 32.5    | 45,500  | 15,700        | 12,800         |
| recovery g     |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| Taxes,         | 8,000   | 11,200  | 3,860         | 3,130          |
| insurance, and |         |         |               |                |
| administration |         |         |               |                |
| h              |         |         |               |                |
+----------------+---------+---------+---------------+----------------+
| **TAC**        | **5     | **9     | **34,100**    | **27,700**     |
|                | 9,100** | 8,900** |               |                |
+----------------+---------+---------+---------------+----------------+
| a The costs    |         |         |               |                |
| were also      |         |         |               |                |
| scaled based   |         |         |               |                |
| on equipment   |         |         |               |                |
| size using     |         |         |               |                |
| equation       |         |         |               |                |
| 1.^3,\ 4^      |         |         |               |                |
|                |         |         |               |                |
| b Rough        |         |         |               |                |
| estimates of   |         |         |               |                |
| capital costs  |         |         |               |                |
| were made to   |         |         |               |                |
| escalate the   |         |         |               |                |
| 1990 costs to  |         |         |               |                |
| 2006 costs     |         |         |               |                |
| based on CEPCI |         |         |               |                |
| of 357.6 for   |         |         |               |                |
| 1990 and 499.6 |         |         |               |                |
| for 2006.      |         |         |               |                |
|                |         |         |               |                |
| c Electricity  |         |         |               |                |
| usage was not  |         |         |               |                |
| reported for   |         |         |               |                |
| model plant 1  |         |         |               |                |
| in the         |         |         |               |                |
| proposal BID   |         |         |               |                |
| for Stage I    |         |         |               |                |
| and neither    |         |         |               |                |
| was the unit   |         |         |               |                |
| cost for       |         |         |               |                |
| electricity in |         |         |               |                |
| 1990. As an    |         |         |               |                |
| alternative,   |         |         |               |                |
| the costs were |         |         |               |                |
| scaled based   |         |         |               |                |
| on a ratio of  |         |         |               |                |
| unit costs for |         |         |               |                |
| 1990 to unit   |         |         |               |                |
| costs for      |         |         |               |                |
| 2006.          |         |         |               |                |
| Electricity    |         |         |               |                |
| costs were     |         |         |               |                |
| \$0.0474/kWhr  |         |         |               |                |
| in 1990 and    |         |         |               |                |
| were           |         |         |               |                |
| \$0.0609/kWhr  |         |         |               |                |
| in             |         |         |               |                |
| 2006.[^5]^,^   |         |         |               |                |
| [^6]           |         |         |               |                |
|                |         |         |               |                |
| d Annual pilot |         |         |               |                |
| gas (i.e.,     |         |         |               |                |
| natural gas)   |         |         |               |                |
| usage was not  |         |         |               |                |
| reported for   |         |         |               |                |
| model plant 1  |         |         |               |                |
| in the         |         |         |               |                |
| proposal BID   |         |         |               |                |
| for Stage I.   |         |         |               |                |
| As an          |         |         |               |                |
| alternative,   |         |         |               |                |
| the costs were |         |         |               |                |
| scaled based   |         |         |               |                |
| on a ratio of  |         |         |               |                |
| unit costs for |         |         |               |                |
| 1990 to unit   |         |         |               |                |
| costs for      |         |         |               |                |
| 2006. Natural  |         |         |               |                |
| gas costs were |         |         |               |                |
| \$2.93/1000    |         |         |               |                |
| ft^3^ in 1990  |         |         |               |                |
| and were       |         |         |               |                |
| \$7.88/1000    |         |         |               |                |
| ft^3^ in       |         |         |               |                |
| 2006.[^7]^,^   |         |         |               |                |
| [^8]           |         |         |               |                |
|                |         |         |               |                |
| e Maintenance  |         |         |               |                |
| hours and      |         |         |               |                |
| labor rates    |         |         |               |                |
| were not       |         |         |               |                |
| reported in    |         |         |               |                |
| the proposal   |         |         |               |                |
| BID for Stage  |         |         |               |                |
| I. The         |         |         |               |                |
| maintenance    |         |         |               |                |
| costs were     |         |         |               |                |
| roughly        |         |         |               |                |
| escalated      |         |         |               |                |
| using a ratio  |         |         |               |                |
| of the CEPCI   |         |         |               |                |
| for 1990 and   |         |         |               |                |
| 2006.          |         |         |               |                |
|                |         |         |               |                |
| f Operating    |         |         |               |                |
| labor is 1     |         |         |               |                |
| hr/day for 340 |         |         |               |                |
| day/yr and the |         |         |               |                |
| operator labor |         |         |               |                |
| rate is        |         |         |               |                |
| \              |         |         |               |                |
| $48.26/hr.[^9] |         |         |               |                |
|                |         |         |               |                |
| g The capital  |         |         |               |                |
| recovery costs |         |         |               |                |
| were estimated |         |         |               |                |
| as 0.163 of    |         |         |               |                |
| capital costs. |         |         |               |                |
| The CRF is     |         |         |               |                |
| based on       |         |         |               |                |
| interest rate  |         |         |               |                |
| of 10 percent  |         |         |               |                |
| and equipment  |         |         |               |                |
| life of 10     |         |         |               |                |
| years.         |         |         |               |                |
|                |         |         |               |                |
| h Taxes,       |         |         |               |                |
| insurance, and |         |         |               |                |
| administration |         |         |               |                |
| costs are 4    |         |         |               |                |
| percent of     |         |         |               |                |
| capital costs. |         |         |               |                |
+----------------+---------+---------+---------------+----------------+

***Model Plant Emissions Reductions and Control Cost Impacts***

The model plant impacts are summarized in Table 3. The cost
effectiveness of throughput cutoffs for Option 1 at 15,000 gal/day and
for Option 2 at 10,000 gal/day are \$15,900/ton of HAP and \$18,200/ton
of HAP, respectively.

**Table 3. Model Plant Impacts of Refinery Gasoline Loading Rack Control
Options**

  ----------------- ------------- -------------- ------------- ---------------
  **Model Plants**  **Total       **Total        **HAP         **Total Cost
                    Capital       Annualized     Emission      Effectiveness
                    Investment,   Costs, \$**    Reduction     for HAP, \$/ton
                    \$**                         from          HAP**
                                                 Baseline,     
                                                 tons**        

  Model Plant A:    \$96,400      \$34,100       2.15          \$15,900/ton
  Throughput 17,000                                            HAP
  gal/day                                                      

  Model Plant B:    \$78,200      \$27,700       1.52          \$18,200/ton
  Throughput 12,000                                            HAP
  gal/day                                                      
  ----------------- ------------- -------------- ------------- ---------------

[^1]: Gasoline Distribution Industry (Stage I) -- Background Information
    for Proposed Standards. EPA Publication No. EPA-453/R-94-002a. U.S.
    Environmental Protection Agency, Office of Air Quality Planning and
    Standards. Research Triangle Park, NC. January 1994.

[^2]: Compilation of Air Pollutant Emissions Factors, AP-42, Fifth
    Edition, Volume I: Stationary Point and Area Sources. U.S.
    Environmental Protection Agency, 1995.

[^3]: A Guide to Chemical Engineering Process Design and Economics. G.
    Ulrich. John Wiley & Sons, New York. 1984. pp. 266-268.

[^4]: Cumulative Impact of Environmental Regulations on the U.S.
    Petroleum Refining, Transportation, and Marketing Industries.
    American Petroleum Institute. October 1997. Appendix E, p. E-11.

[^5]: Electric Power Monthly with data for April 2007. Table 5.3,
    Average Retail Price of Electricity to Ultimate Customers: Total by
    End-Use Sector, 1993 through April 2007. Energy Information
    Administration.

[^6]: Electric Power Monthly with data for September 2003. Table 5.3,
    Average Retail Price of Electricity to Ultimate Customers: Total by
    End-Use Sector, 1990 through September 2003. Energy Information
    Administration.

[^7]: Natural Gas Monthly, June 2007. Table 3, Selected National Average
    Natural Gas Prices, 2002-2007. Energy Information Administration.

[^8]: Natural Gas Monthly, May 1996. Table 4, Selected National Average
    Natural Gas Prices, 1990-1996. Energy Information Administration.

[^9]: Bureau of Labor Statistics, May 2006 labor rates (accessed June
    2007).