1 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

FINAL DRAFT STAFF REPORT 

Proposed Amendments to Rule 4401 

(Steam-Enhanced Crude Oil Production Wells) 

June 16, 2011 

Prepared by: Anna Myers, Air Quality Specialist 

Reviewed by: George Heinen, Rule Development Supervisor 

Mike Oldershaw, Compliance Manager 

Leonard Scandura, Permit Services Manager 

Scott Nester, Senior Project Advisor 

Errol Villegas, Strategies and Incentives Manager 

Samir Sheikh, Director of Strategies and Incentives

I. SUMMARY 

On December 14, 2006 the San Joaquin Valley Unified Air Pollution Control District’s 

(District) Governing Board amended Rule 4401 (Steam-Enhanced Crude Oil Production 

Well Vents) to satisfy commitments in the District 2004 Extreme Ozone Attainment 

Demonstration Plan (EOADP) and in the District 2003 and 2006 PM10 Plans. On July 

17, 2009, upon evaluation of Rule 4401, EPA made the following action: 

The December 14, 2006 amended Rule 4401 – Steam-Enhanced Crude 

Oil Production Wells implements RACT [Reasonably Available Control 

Technology], strengthens the SIP, and is generally enforceable. As a 

result, EPA staff recommends a limited approval of the rule pursuant to 

CAA [Clean Air Act] §110(k)(3) and §301(a). However, EPA staff 

simultaneously recommends a limited disapproval of ... section 6.2.4 of 

the Rule. (EPA TSD, 5)

This action was published in Federal Register Vol. 75, No.16 as 40 CFR Part 52 on 

January 26, 2010. A copy of this Federal Register publication is included as Appendix D of 

this final draft staff report. 

Pursuant to §179 of the CAA, unless the rule has been updated and approved into the 

State Implementation Plan (SIP) within 18 months after the disapproval, one, or more 

sanctions shall be imposed, as selected by the EPA, until EPA determines that the State 

has come into compliance. The sanctions available to the EPA are as follows: 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

2 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

1. Highway Sanctions 

EPA may impose prohibitions, applicable to a nonattainment area, on the 

approval by the Secretary of Transportation of any projects or the awarding by 

the Secretary of any grants, under title 23 other than projects or grants for 

safety. 

2. Offsets 

In applying the emissions offset requirements of §7503 of this title to new or 

modified sources or emissions units for which a permit is required under this 

part, the ratio of emission reductions to increased emissions shall be at least 

two to one. 

The purpose of this rule-amending project is to update Section 6.2.4 of Rule 4401 as cited 

by EPA, and to clarify existing rule standards by removing expired language. 

A. Background 

On April 19, 1991 the District Governing Board adopted Rule 4401 (Steam-Enhanced 

Crude Oil Production Well Vents). Rule 4401 has been amended four times, the most 

recent amendments occurring in December of 2006. The 2006 amendments added 

definitions; revised exemptions; added leak standards; updated and extended record 

maintenance requirements; provided criteria that allowed for a waiver of annual source 

test provisions; and amended the title of the rule to remove “Vents”. The 2006 Rule 

4401 (Steam-Enhanced Crude Oil Production Wells) amendments satisfied 

commitments in the District EOADP and in the District 2003 and 2006 PM10 Plans. 

B. Rule Development Process 

As part of the rule development process, District staff held public workshops on March 

16 and 18, 2011, and a technical workgroup meeting on April 5, 2011. Staff solicited 

comments from the public, stakeholders, ARB and EPA at the workshops and for a two 

week commenting period after the workshops. Comments received during the 

commenting period were evaluated and incorporated into the proposed rule as 

appropriate. 

The proposed rule and final draft staff report was published and provided to affected 

sources and interested parties prior to a public hearing to consider the adoption of the 

rule by the District Governing Board. The proposed amendments are scheduled to be 

presented to the Governing Board for the public hearing to consider adoption of the 

amendments to the rule on June 16, 2011. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

3 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

II. DISCUSSION 

A. Existing Rule 4401 

Rule 4401 applies to crude oil production wells where production is enhanced by steam 

injection. Business establishments with Standard Industry Code (SIC) 1311 (Crude Oil 

and Natural Gas) operate such crude oil production wells. The rule establishes 

requirements for inspection, component replacement, re-inspection, maintenance, 

repair periods, and replacement/retrofit for leaking components. It also describes 

associated administrative and recordkeeping requirements, such as an inspection log, 

for determining compliance. The purpose of the rule is to limit volatile organic 

compound (VOC) emissions from steam-enhanced crude oil production well vents. The 

primary source of VOC emissions from the wells is the casing vent. The emissions from 

a casing vent are usually controlled through the operation of a VOC collection and 

control device. 

B. EPA Evaluation of Rule 4401 

EPA used the following memoranda, guidance, and statute to review the submitted rule 

to evaluate compliance with RACT requirements of CAA §182(b)(2): 

• SJVAPCD’s 2009 RACT SIP Demonstration (April 16, 2009); 

• “Preamble, Final Rule to Implement the 8-hour Ozone National Ambient Air 

Quality Standard”: (70 FR 71612 November 29, 2005); 

• Letter from William T. Hartnett to Regional Air Division Directors, “RACT Qs & 

As – RACT Questions and Answers” (May 18, 2006); and 

• Other state and local rules for this category. 

EPA used the following memoranda, guidance, and statute to review the submitted 

rule to evaluate compliance with CAA §110(a)(2)(A) requirement for enforceability: 

• The Bluebook (“Issues Relating to VOC Regulation Cutpoints, 

Deficiencies, and Deviations,” EPA, May 25, 1988); 

• The Little Bluebook (“Guidance Document for Correcting Common VOC & 

Other Rule Deficiencies,” EPA Region 9, August 21, 2001); and 

• “State Implementation Plans, General Preamble for the Implementation of 

Title I of the Clean Air Amendments of 1990” (57 FR 13498, April 16, 

1992). 

C. EPA Recommendations 

On January 26, 2010, EPA published a limited approval and limited disapproval of 

revisions to the District portion of the California SIP. This action was proposed in the 

Federal Register on July 17, 2009 regarding VOC emissions from steam-enhanced 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

4 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

crude oil production well vents. Under authority of the CAA, as amended in 1990, 

this action simultaneously approves local rules that regulate these emission sources 

and directs California to correct rule language. 

EPA finalized a limited approval of the submitted rule, as authorized in §110(k)(3) 

and §301(a) of the CAA; EPA also simultaneously finalized a limited disapproval of a 

portion of the rule. Because of the limited disapproval, sanctions will be imposed on 

the District unless EPA approves subsequent SIP revisions within 18 months of the 

effective date of this action. These sanctions will be imposed under §179 of the 

CAA according to 40 CFR 52.31. In addition, EPA must promulgate a federal 

implementation plan (FIP) under §110(c) unless EPA approves subsequent SIP 

revisions within 24-months of the effective date of this action. Note that EPA’s final 

limited disapproval does not prevent the District from enforcing the rule. 

The Technical Support Document for the Notice of Proposed Rulemaking 

recommends the District remove the following sentence from Section 6.2.4 of Rule 

4401: “The District evaluation and the APCO request shall be deemed approved 

unless EPA or ARB objects to such approval in writing within 45 days of the receipt 

of the APCO request.” However, the Federal Register states “We note that the 

District may address these concerns by providing explicit and replicable procedures 

within the rule that tightly define how the District’s discretion will be exercised to 

assure equivalent emission reductions.” 

The previously mentioned sentence in Section 6.2.4 provides executive officer 

discretion in conflict with CAA §110(a) and (i) and long-standing national policy as 

discussed in the bluebook and little bluebook. CAA §110(i) specifically prohibits 

EPA and the states from taking any “action modifying any requirement of an 

applicable implementation plan with respect to any stationary source” except as 

otherwise authorized by the CAA. Section 6.2.4 of Rule 4401 effectively allows the 

District to grant a waiver to federally-approved SIP requirements if EPA does not 

object within 45 days of receiving the District’s request for concurrence. Without a 

process that ensures that any such waiver is granted only upon EPA approval in 

accordance with CAA requirements, this provision is inconsistent with the 

requirements of the CAA and cannot be approved. 

D. Proposed Amendments to Rule 4401 

The primary purpose of this rule-amending project is to update rule language as 

identified by EPA, and to remove expired language and redundant language from the rule 

for improved clarity. 

Initially, staff proposed Section 6.2 be amended to remove the following sentence as 

specified by EPA: “The District evaluation and the APCO request shall be deemed 

approved unless EPA or ARB objects to such approval in writing within 45 days of the 

receipt of the APCO request.” 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

5 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

Based on language in the federal register and conversations with EPA and 

stakeholders, staff revised the draft amendments to Section 6.2. Staff now proposes 

that Sections 6.2.1 and 6.2.2 be amended to list specific activities that do not require 

annual source testing because they are subject to other District rule requirements. 

Section 6.2.2 in a previous version of the draft rule presented at the technical workgroup 

meeting on April 5, 2011 had a subsection of 6.2.2.5 that provided language for a VOC 

control system that is at least 99% effective. EPA addressed this section of the draft 

rule in a comment letter sent to the District. The comment stated that Section 6.2.2.5 of 

the April 5, 2011 version of the draft rule could provide for exemptions for all VOC 

control systems that are at least 99% effective. Since 99% VOC control is the default 

requirement of the rule by definition of VOC Collection and Control System (Section 

3.50), this could seem to effectively exempt all sources from source testing under this 

rule. Please delete this provision or demonstrate that it is necessary. Therefore, staff 

deleted Section 6.2.2.5 from the proposed rule. 

The amended Section 6.2.1 and 6.2.2 would read as follows: 

6.2.1 An operator shall source test annually all VOC collection and control 

systems used to control emissions from steam-enhanced crude oil 

production well vents to determine the control efficiency of the 

device(s) used for destruction or removal of VOC. Compliance 

testing shall be performed annually by source testers certified by 

ARB. Testing shall be performed during June, July, August, or 

September of each year if the system's control efficiency is 

dependent upon ambient air temperature. A process system is not 

subject to compliance source testing requirements. 

6.2.2 If approved by the APCO, a VOC collection and control system is not 

subject to Section 6.2.1 if all uncondensed VOC emissions collected 

by the system are controlled by a device meeting one of the 

requirements in Sections 6.2.2.1 through 6.2.2.3. 

 

6.2.2.1 An internal combustion engine subject to District Rule 4702 

(Internal Combustion Engines – Phase 2); or 

6.2.2.2 A combustion device subject to District Rule 4320 

(Advanced Emission Reduction Options for Boilers, Steam 

Generators, and Process Heaters Greater than 5.0 

MMBtu/hr); District Rule 4307 (Boilers, Steam Generators, 

and Process Heaters – 2 MMBtu/hr to 5 MMBtu/hr); or

District Rule 4308 (Boilers, Steam Generators, and 

Process Heaters – 0.075 MMBtu/hr to 2.0 MMBtu/hr); or 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

6 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

6.2.2.3 A unit subject to District Rule 4311 (Flares). 

In addition to the proposed amendments to Section 6.1 and 6.1, staff propose Section 

6.2.3 be amended to remove outdated requirements. The amended Section 6.2.3 

would read as follows: 

6.2.3 An operator shall comply with the following requirements for each 

gauge tank, as defined in Section 3.0: 

6.2.3.1 An operator shall conduct periodic TVP testing of each 

gauge tank at least once every 24 months during summer 

(July – September), and whenever there is a change in the 

source or type of produced fluid in the gauge tank. 

6.2.3.2 The TVP testing shall be conducted at the actual storage 

temperature of the produced fluid in the gauge tank using 

the applicable TVP test method specified in Section 6.4 of 

Rule 4623 (Storage of Organic Liquids). The operator shall 

submit the TVP testing results to the APCO as specified in 

Section 6.1.9. 

Staff originally suggested amending certain sections of rule language to improve clarity 

of currently enforced standards. The draft amendments included the following Sections: 

• Sections 3.7 and 3.31 would be modified to exclude wells as process units or as 

critical process units with the addition of: “For purposes of this rule, an individual 

well is not a process unit, and can not be a critical process unit." 

• Section 3.54 would be added to rule language to clarify the definition of “Year”. 

• Section 4.6.2 exempts “Components buried below ground.” Update language for 

clarity with the addition of: "Components buried below the ground where no part 

of the component is accessible to check for leaks. Well casings are not 

considered buried components." 

• Section 5.2.1 would be modified to clarify that all leaks must be repaired for a 

facility to be in compliance with the addition of: “The violation shall persist until all 

leaking components are repaired according to the requirements of Section 5.5.” 

Industry has expressed concern regarding these draft amendments and requested a full 

rule making process. Due to the shortened timeline for this rule project because of 

potential sanctions clocks, staff will move forward with the Section 6.2 amendments to 

satisfy the EPA limited disapproval. Staff is committed to continuing dialogue with 

stakeholders and continuing the rule development process to consider stakeholder 

concerns. It is important to note that this continuation of the rule development process 

will not change current enforcement standards. 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

7 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

E. Global Climate Change and Greenhouse Gases 

The California Global Warming Solutions Act of 2006 (AB 32) created a comprehensive, 

multi-year program to reduce greenhouse gas (GHG) emissions in California, with the 

overall goal of restoring emissions to 1990 levels by the year 2020. In the coming 

years, the Air Resources Board (ARB) and the Legislature will be developing policies 

and programs to implement AB 32. The District believes that the evidence and the 

rationale that climate change is occurring is compelling and convincing. In addition to 

the long-term consequences of climate change, the District is concerned with the 

potential ramifications of more moderate but imminent changes in weather patterns. 

The Valley depends heavily on agriculture for its economy and has developed 

agricultural practices based on the last several decades of weather patterns. 

Unanticipated and large fluctuations in these patterns could have a devastating effect 

on the Valley’s economy. 

While there are many win-win strategies that can reduce both GHG and criteria/toxic 

pollutant emissions, when faced with situations that involve tradeoffs between the two, 

District staff believes that the more immediate public health concerns that may arise 

from an increase in criteria or toxic pollutant emissions should take precedence. The 

San Joaquin Valley Air Pollution Control District’s Governing Board adopted the Climate 

Change Action Plan (CCAP) in August 2008. For California Environmental Quality Act 

(CEQA) requirements, one of the goals of the CCAP is to establish District processes 

for assessing the significance of greenhouse gas impacts. The District has developed a 

policy and guidance for addressing greenhouse gases under CEQA. 

Adoption of the proposed amendments would not lower emissions from this source 

category and there are no foreseeable changes in operating practices resulting from 

implementation of these changes that would result in increased GHG emissions. 

Therefore, the District concludes that this rule development project would have a less 

than cumulative impact on global climate change. 

III. ANALYSIS 

A. Emission Reduction & Cost Effectiveness Analysis

No emission reductions and no costs are anticipated from this rule-amending project 

due to the administrative nature of the draft amendments. 

B. Socioeconomic Analysis 

Pursuant to California Health and Safety Code (CH&SC) 40728.5(a), “Whenever a 

district intends to propose the adoption, amendment, or repeal of a rule or regulation 

that will significantly affect air quality or emissions limitations, that agency shall, to the 

extent data are available, perform an assessment of the socioeconomic impacts of the 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

8 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

adoption, amendment, or repeal of the rule or regulation. This section does not apply to 

the adoption, amendment, or repeal of any rule or regulation that results in any less 

restrictive emissions limit if the action does not interfere with the district's adopted plan 

to attain ambient air quality standards, or does not result in any significant increase in 

emissions.” Proposed changes are based on federal requirements; additionally, this 

rule-amending project does not significantly affect air quality or strengthen any emission 

limitations, nor does it result in a significant increase in emissions; therefore, no 

socioeconomic analysis is required. 

C. Environmental Impact Analysis 

Pursuant to §15061 of the Guidelines for Implementation of the California 

Environmental Quality Act (CEQA), District staff investigated the likely environmental 

impacts of the proposed amendments to Rule 4401. The purpose of this rule-amending 

project is to update 

 Section 6.2 as cited by EPA, and to clarify existing rule standards by making minor 

changes to rule language. Proposed amendments are based on federal requirements 

do not change the meaning of current rule language. As such, District staff concludes 

that it can be seen with certainty that the proposed amendments to the rule will not have 

any significant adverse effect on the environment. Staff recommends filing a Notice of 

Exemption under the provisions of California Code of Regulations §15061(b)(3). 

D. Rule Consistency Analysis 

Pursuant to CH&SC §40727.2, District staff has prepared a rule consistency analysis 

that compares the elements of amendments with the corresponding elements of other 

District rules, federal regulations and guidelines that apply to the same source category 

or type of equipment. District staff found that the proposed amendments and 

requirements of this rule would not conflict with federal rules, regulations, or policies 

covering similar stationary sources. The rule consistency analysis is presented in 

Appendix B of the final draft staff report. 

E. RACT Analysis 

CAA §182(b)(2) states that ozone attainment plans shall assure that RACT for VOC is 

applied at certain sources. A RACT analysis requires an examination of a rule against 

Federal rules, regulations, and technology guidelines as well as comparing it against 

rules from other air districts in California. On April 16, 2009, the District adopted its 

“2009 RACT SIP,” which provides the District’s demonstration that RACT is 

implemented for all appropriate activities. The District made the following two findings: 

(1) There is no national guidance or regulation to help define RACT for this activity; and, 

(2) overall, Rule 4401’s requirements are as stringent as other large California 

nonattainment areas. As documented in the TSD for EPA’s Notice of Proposed 

Rulemaking on “EPA concurs with SJVAPCD’s findings and concludes that Rule 4401 

implements RACT for three reasons.” 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

9 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

1. Rule 4401 requires significant emissions control; for example, steam-enhanced 

crude oil production wells can not be operated unless uncontrolled VOC 

emissions from any well vent are reduced by at least 99 percent by weight. 

2. Rule 4401 leak detection and repair (LDAR) requirements for crude oil production 

wells are consistent with other similar LDAR rules, such as District Rule 4409 

and Monterey Bay APCD Rule 427 – Steam Drive Crude Oil Production Wells. 

3. SJVAPCD, South Coast AQMD, and other large California large nonattainment 

agencies generally gave the most stringent stationary source requirements 

nationwide, and EPA is unaware of other reasonably available technological or 

operational controls likely to reduce significantly emissions from this activity. 

In summary, EPA believes that Rule 4401 implements relevant RACT requirements. 

The RACT analysis is in Appendix C of this final draft staff report. 

IV. REFERENCES 

EPA. “The Bluebook: Issues Relating to VOC Regulation Cutpoints, Deficiencies, and 

Deviations”. May 25, 1988. 

EPA Region IX. “Federal Register/Vol. 75, No. 16/Tuesday, January 26, 2010/Rules 

and Regulations: 40 CFR Part 52”. January 26, 2010. 

EPA Region IX. “Technical Support Document for EPA’s Notice of Proposed 

Rulemaking on revisions to the California State Implementation Plan”. June 2009. 

EPA Region IX. “The Little Bluebook: Guidance Document for Correcting Common 

VOC & Other Rule Deficiencies”. August 21, 2001. 

SCAQMD Rule 1148 (Thermally Enhanced Oil Recovery Wells). Adopted 11/5/82. 

SCAQMD Rule 1173 (Control of Volatile Organic Compound Leaks and Releases from 

Components at Petroleum Facilities and Chemical Plants). Adopted 7/7/89; Amended 

12/7/90, 5/13/94, 12/6/02, 6/1/07, 2/6/09. 

SJVUAPCD Extreme Ozone Attainment Demonstration Plan for 1-Hour Ozone 

Standards. Adopted 10/8/04; Amended 8/21/08. 

SJVUAPCD 2007 8-Hour Ozone Plan. Adopted 4/30/07; Amended 10/18/08.
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4401 June 16, 2011 

10 Final Draft Staff Report with Appendices 

 For Proposed Amendments to Rule 4401 

This page intentionally blank.