# STAFF REPORT

Rule 3. 8 : Gasoline Dispensing Facilities


## Rule 3. 9 : Storage of Petroleum Products



### Date of Release: June 2 , 20 14

Schedule of Meetings

Rule Workshop: April 17

, 20 14 Public Hearing: June 2 , 2014

Feather River AQMD 1007 Live Oak Blvd, Suite B

- 3, Yuba City, California 95991

### Table of Contents

Contents Page

1. Executive Summary

................................ ................................ ........................... 1

2. Background

................................ ................................ ................................ ........ 1

3. Legal Mandate

................................ ................................ ................................ ... 2

4. Propo sed Rule Requirements

................................ ................................ ............. 3

5. Socioeconomic Impact

................................ ................................ ....................... 5

6. Impacts of the Pro posed Rule

................................ ................................ ............ 5

7. Estimated Cost Impact

................................ ................................ ....................... 6

8. Environmental Review and Compliance

................................ ........................... 6

9. Required Findings

................................ ................................ .............................. 6

10. References

................................ ................................ ................................ .......... 7

...........................................

Appendix A: Rule Analysis Appendix B: Public Notice Appendix C: Comments and ResponsesP roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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- 

### 1.0 Executive Summary:

Feather River Air Quality Management District (District) is a Bi

- County agency that administer s local,

state

, and federal air quality management program s for Yuba and Sutter Counties. Because portions of the District have been designa ted as nonattainment for failing to meet the federal 8

- hour ground

- level ozone standard, the United States Environ mental Protection Agency ( EPA) requires the District to control emissions from stationary and area sources

, such as gasoline fueling and storage . The F ederal Clean Air Act (CAA) requires an analysis of whet her the District rules meet each Reasonably Available Control Technology (RACT) standard for sources in nonattainment areas . The District’s RACT analysis determined that Rule 3.8 was not meeting the control standards

.

District Rule 3.8 , Storage and Transfer of Gasoline, was adopted in June of 1991. For the 2014 amendments, the District proposes to rename this rule “ Gasoline Dispensing Facilities. ” The rule will effectively require existing Aboveground Stora ge Tanks (AST s) and Underground Storages Tanks (USTs) with Phase I vapor recovery to perform annual leak tests

. Also, a ll newly installed ASTs will be required to meet the Phase I Enhanced V apor Recovery (EVR) and the Standing Loss Control (SLC) requirements , whereas the newly installed USTs will only need to meet the Ph ase I EVR requirements

, since SLC requirements aren’t applicable to USTs . These new requirements will demonstrate a 98% control efficiency for vapors displaced during the loading of gasoline into the storage tank s

.

To help clarify and organize the requir ements in Rule 3.8, some of the existing requirements from the rule, specifically those regarding bulk facilities and dispensing into gasoline delivery vessels , will be

moved to Rule 3.9.

Gasoline Dispensing Facilities are generally categor ized into two separate groups: r etail and non

- retail

facilities. T he changes to Rule 3.8 will mainly be affecting those non

- retail facilities because the retail

facilities already have to comply with the Benzene Airborne Toxic Control Measure (ATCM) as adopted by the Ca lifornia Air Resources Board (CARB). The Benzene ATCM is more restrictive than proposed Rule 3.8, mainly because retail facilities have a much higher throughput of gasoline tha n non

- retail facilities, so control requirements have been mandated on retail fa cilities since 1988.

The District has around 60 permitted non

- retail gasoline storage tanks within Yuba and Sutter counties.

Amendments to the se rule s are expected to lower VOC emissions from gasoline dispensing facilities in the District by 0.15 tons pe r year.



### 2.0 Background :

Ozone Ozone is formed when volatile organic compounds (VOCs) react with nitrogen oxides (NOx) in the presence of sunlight, and is one component of smog. It is a strong irritant that attacks the respiratory system and leads to the damage of lung tissues. Exposure to ozone aggravates asthma, bronchitis and other respiratory diseases, as w ell as cardiovascular diseases. VOC reductions are necessary to attain and maintain the state ambient air quality standard for ozone.

Ambient Air Quality Standards

The EPA and the California Air Resources Board ( C ARB) have adopted ambient air quality standards (national standards “NAAQS” and California standards “CAAQS”) to determine outdoor pollutant levels considered safe for the public. The standards are health

- based and designe d to provide protection for the most sensitive groups.P roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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- The Clean Air Act (CAA) requires that EPA designate air districts not meeting the NAAQS as

“ nonattainment ” and to prepare a plan describing how the standards will be met. On the state level, t he

Cali fornia Clean Air Act (CCAA) requires the District to develop a plan to achieve attainment with the

state ozone standard.

Gasoline Dispensing and Storage Regulations The EPA has published several Control Techniques Guidelines (CTG) related to ga soline dispensing and

storage. These CTGs inc lude Design Criteria For Stage I Vapor Control Systems Gasoline Service Stations (November 1975); Control of Hydrocarbons From Tank Truck Gasoline Loading Terminals (October 1977); Control of VOC Emissions from Bulk Gasoline Plants (December 1977); Control of VOC Emissions from Storage of Petroleum Liquids in Fixed Roof Tanks (December 1977); and Control of VOC Leaks from Gasoline Tank Trucks and Vapor Collection Systems (December 1978). The CTGs

are used to defi ne the Reasonably Available Control Technology (RACT) standards for each specific

source category.



### In 1988 the California Air Resources Board (CARB) adopted an Airborne Toxic Control Measure (ATCM) to reduce public exposure to benzene from motor vehicle refueling operations at retail service stations. The ATCM required station owners to install vapor re covery system that were certified by the CARB to meet pollution control standards. The systems generally fall into 2 different categories: Phase I Vapor Recovery equipment and Phase II Vapor Recovery equipment. Phase I

covers those emissions created when t he transport vessels deliver the gasoline to the storage tanks

whereas Phase II covers those emissions created from fueling the vehicles from the storage tanks.

The initial Phase I and Phase II certifications from CARB demonstrated a 95% control efficien cy. However, these controls were then tightened to 98% when Enhanced Vapor Recovery (EVR) systems were employed. I n 2005, retail GDFs with USTs had to upgrade their vapor recovery equipment to Phase I EVR. Then, in 2009, retail GDFs with USTs were required to upgrade their vapor recovery equipment to

Phase II EVR.

CARB is currently focused on implementing EVR for retail GDFs with ASTs

. All retail ASTs will be required to use a Phase I EVR system by July 1, 2014.

FRAQMD Rules 3.8/3.9

District Rule 3.8 St orage and Transfer of Gasoline was adopted in June 1991. The Rule required gasoline vapors to be controlled by 90% or more during gasoline transfer f rom a delivery vessel into a stationary storage tank, except as exempted by the rule. The 1991 rule also conta ined requirements for bulk loading

facilities and terminals.

District Rule 3.9 Storage of Petroleum Products was adopted in June 1991. The 1991 rule was designed to control emissions of large organic liquid storage tanks that contained materials oth er than gasoline.



### 3.0 Legal Mandate :

Federal Mandates

Portions of the District were designated as nonattainment fo r the 1997 Ozone 8

- hour NAAQS. The Sutter Buttes were designated subpart 1 and the southern portion of Sutter County was designated Serious nonattainment as part of the Sacramento Federal Nonattainment Area (SFNA), which also includes all of Sacramento and Yolo counties and portions of Placer, El Dorado, and Solano counties. The District is required to evaluate the local District rules to determine whether all Reasonab ly Available ControlP roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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- Technologies (RACT) are being impl emented in areas that are designated as moderate nonattainment and above, such as in the SFNA.

An analysis of the existing CTGs was required as p art of the RACT analysis

, and was due to the EPA by September 2006. The District completed its RACT analysis

, and upon review

, it was determined to be deficient in regards to Rule 3.8 not meeting all of the control requirements in the CTGs. Since the Distr ict has gasoline storage tanks located in the SFNA, t he District is required to amend Rule 3.8 to be as stringent as the CTG. Once amended, the District will also have to submit Rule 3.8 to the State Implementation Plan to correct the deficiency.

State Mandates

The CCAA requires areas designated as nonattainment for ozone to develop a plan, in accordance with

s ection 40913 of Cal ifornia Health and Safety Code (CH&S Code) , to achieve California’s ambient air quality standard by the earliest practical date by adopting cost

- effective control measures.

The SFNA portion of Sutter County is designated as “severe” nonattainment for the st ate ozone standard.

CH&S C ode s ection 40920 requires the District to adopt a control measure that will use Best Available

Ret rofit Control Technology (BARCT) for all exi sting stationary sources in this area. BARCT

, as defined

in the CH&S Code , is as “an emission limitation that is based on the maximum degree of reduction achievable, taking into account environmental, energy and economical impacts by ea ch class or category

of source.

Yuba County and the northern area of Sutter County are designated as “non attainment

- transitional” for

the state ozone standard. CH&S Code section 40925.5 requires the District to adopt a control meas ure that

will use RACT for all ex isting stationary sources in these areas.

All Feasible Measures Requirements

CH&S Code s ection 40914 requires the District’s plan to demonstrate that the plan includes “every

feasible measure" to co ntrol emissions. All feasible control measures are those which have the most effective regulatory emissions standards demonstrated in California’s air districts.

The District has evaluated the standards in the rule against similar requirements recently adopted by other

d istricts. The District has determined that the standards a re feasible and have been achieved in practice.



### 4.0 Proposed Rule Requirements:

For this rule amendment, t he District is focusing on non

- retail tanks since they are not subject to the

Benzene ATCM. The District is proposing to require annual testing on some of the existing storage tanks and requiring all new tanks to meet the current CARB Phase I EVR and SLC standards. These control requirements have been proven to be effective at controlling the VOC emissions from retail gasoline storage tanks, and so they should be equally effective at controlling the VOC emissions from non

- retail

tanks.



### The District has reviewed the poten tial rule requirements for Phase II systems, but has chosen not to include them in this rule development proceeding. For many districts in serious or severe non

attainment designations for ozone, there was a need for immediate emission reductions and s o Ph ase II requirements were a cost effective implementation choice. However, since 1998, EPA has required manufacturers to phase in new vehicles equipped with an Onboard Refueling Vapor Recovery (ORVR) system . The s e ORVR system s prevent gasoline vapors from b eing released from the carP roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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- 

### during refueling, so they effectively perform the same function as a Phase II system on the gasoline storage tank. Since 2006, nearly 99% of all gasoline powered vehicles are equipped with ORVR.

O n May 9, 2012, the EPA signed a notice of final rulemaking determining that ORVR systems are in widespread use such that it is no longer required to mandate Phase II systems. Hence, the District is not including any Phase II requirements in Rule 3.8. Please note that all retail gasoline stations are still required to maintain their Phase II systems in accordance with the CARB’s Benzene ATCM.

Rule 3.8 Changes The District is proposing to update the rule to require CARB certified Phase I vapor recovery systems for all new non

- retail gasoli ne dispensing facilities. Phase I controls target gasoline vapors that are generated during the transfer from the transport vessels into the stationary storage tanks. The current CARB certifications for Phase I Enhanced Vapor Recovery (EVR) have a 98% cont rol efficiency, which is more restrictive than the current language in Rule 3.8 requiring only 90%

control

.

The District has permitted a number of non

- retail tanks over the last two decades u sing the 90% provision. The majority of these tanks have an extremely low gasoline throughput, and so it was determined to not be cost effective to retrofit or replace these tanks to meet the new requirements. If these existing tanks are replaced, the replacem ents tanks will be required to meet the new Phase I

control requirements at the time of replacement

.

The District also has a number of non

- retail tanks that were installed prior to June 1991, which were exempted from the 90% control requirement if the mon thly throughput for the tank was 25,000 gallons per month or less. The District has reduced the monthly throughput exemption from the Phase I requirements to 10,000 gallons per month in accordance with the CTG.

Gasoline dispensing equipment is also subje ct to wear and tear duri ng its use, which may cause a tank to constantly leak vapors. The District has previously required all permitted tanks to have a maintenance and inspection schedule so that obvious defects can be fixed. However, some leaks may

be ha rder to detect. The District will be requiring each tank that has a 90% Phase I control efficiency or higher to annually demonstrate that the tank is vapor tight through CARB Test Procedure TP

201.3, TP

- 201.3B , or TP

- 206.3, as applicable. These test s, which are known as the Static Pressure

Dec ay Test, involve pressuring a gasoline tank with nitrogen and then recording the tank pressure after 5 minutes. If the tank loses too much pressure, then there is a leak that needs to be fixed.

Comparison of Similar G asoline Rules enacted in the State As stated earlier, numerous districts across California have already enacted similar gasoline rules. Since there are a few variations in the requirements stated in these rules, a side

- by

- side comparison was performed. These comparis ons can be seen below in Table 1

.P roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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- Table 1 : Comparison of District Rules

FRAQMD Proposed Rule Other District Limits

Sac Metro
AQMD Yolo

- Solano

AQMD Placer

APCD Bay Area

A QMD

Rule Number 3.8 448 2.22 213 8.7

Rule Date 6/2 /2014 2/26/2009 Draft 2/12/2014 2/21/20 13 11/6/2002
Applicability

Exemption Levels

Tanks <250 gallons Yes Yes Yes Yes Yes Agricultural Tanks Yes Yes Yes <550 gallons <550 gallons Requirements

Executive Order Required Yes Yes Yes Yes Yes Annual Static Decay Test Yes Yes Yes No Yes



### The main variation between the various District rules is whether to require agricultural tanks to meet the rule standards. Since FRAQMD has historically exempted these tanks used exclusively in agricultural operations , FRAQMD is not looking to set rule standards for them at this time.

Rule 3. 9 Changes The changes being made to Rule 3.9 are primarily for clarity. No new standards are being introduced at this time. Rule 3.8 was simplified to contain the requirements for only gasoline dispensing facilities, so the standards for gasoline bulk plants, terminals, and delivery vessels were transfer red into Rule 3.9.



### 5.0 Socioeconomic Impact :

Yuba and Sutter C ounties have a combined population of less than 500,000 persons. The Required Assessment in subsection (d) of the Ca lifornia Health and Safety Code (Section 40728.5) states

, “T his

section does not apply to any district with a population of less than 500,000 persons .” A s ocioeconomic impact analysis is not required.



### 6.0 Emission Impacts of the Pro posed Rule :

Staff es timates that there will be around 30 existing tanks which may require sli ght adjustments, such as purchasing a pressure

- vacuum valve. These tanks would also be required to be tested annually to make sure that they are vapor tight. The District anticipates the rule to save ar ound a 0.13 ton s /year of VOC from existing tanks from being emitted into the atmosphere. This number is based on emission factors provided by the 1997 CAPCOA Gasoline Service Station Industry Wide Risk Assessment as it applies to the 2012 reported throughput numbers for non

- retail stations in Yuba and Sutter.

Staff estimates that there will be 1

- 2 new storage tanks installed per year in the future. Since these tanks will be required to use Phase I EVR, there will be an anticipated savings of around 0.02 tons/year of VOC due to the higher control efficiencies.P roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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### 7.0 Estimated Cost Impact:

CH&S C ode s ection 40703 requires the District, in the process of the adoption of any rule or regulation, to consider and make public its findings related to the cost effectiveness of the rule. Cost effectiveness for

rulema king purposes is calculated by dividing the cost of air pollution controls required by the rule by the amount of air pollution reduced.

The majority of Air Districts within California have had the requirement to install and maintain CARB certified pre

- EV R Phase I systems on their non

- retail tanks since the 1990s. To meet this pre

- EVR requirement, tanks in Yuba and Sutter would need to install a pressure

- vacuum valve and be tested for leaks once per year. The pressure vacuum valve is estimated to cost arou nd $80 whereas the annual test is estimated to cost around $500 per test. These requirements have been widely accepted as being cost effective in reducing VOC emissions across the state of California.

New tanks will be required to meet the Phase I EVR sta ndard. The slight increase in costs to install EVR equipment as opposed to pre

- EVR requirement were found to be negligible when compared to the total cost of the installation. Hence, this requirement was also found to be cost effective.



### 8 .0 Environmental Review and Compliance:

The amendments to R ule 3.8 and Rule 3.9 are categorically exempt from the California Environmental Quality Act (CEQA) under Sections 15307 and 15308 of the State CEQA Guidelines and no exceptions to these exemptions apply. This exemption is allowed when the rule will help improve air quality in Yub a and Sutter County . California Public Resources Code (Section 21159) requires an environmental analysis of the reasonably foreseeable methods of compliance. The District has concluded that no reasonably foreseeable adverse environmental impacts will be ca used by adoption of the proposed rule.



### 9 .0 Required Findings:

The California Health and Safety Code, Division 26, Air Resources, requires local Districts to comply with a rule adoption protocol as set fort h in Section 40727 of the Code. This section has been revised through legislative mandate to contain 6 findings that the District must make when developing, amending, or repealing a rule. These findings and their definitions are listed in the following table.P roposed Rule s : 3.8 & 3.9 June 2 , 20 14

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- Table 2 : Required Findings

FINDING DEFINITION REFERENCE Authority A district shall adopt rules and regulations and

do such acts as may be necessary or proper to execute the powers and duties granted to, and imposed upon, the district by this division and other statutory provisions California Health and Safety Code, Sections 40000, 40001, and 40702 are provisions of law that provide air districts with the authority to adopt these proposed rules.

Necessity The District has demonstrated that a need for

the rule, or for rule amendment or repeal. It is necessary for districts to adopt these amendments to comply with state law and to ensure consistency with neighboring air

districts. Clarity The rule is written or displayed so that its

meaning can easily be understood by the

persons directly affected by it There is no indication, at this time, that the proposed rules are writt en in such a manner

that it can not be easily understood by persons affected by the rule s

. Consistency This rule is in harmony with, and not in conflict

with or contradictory to, existing statutes, court decisions, or State or federal regulations. These rules are consistent with applicable statutory requirements.

Non

Duplication The rule does not impose the same requirements

as an existing State or federal regula tion, unless the District finds that the requirements are necessary and proper to execute the powers and duties granted to, and imposed upon, the district The proposed rule s do not impose requirements that duplicate existing laws or regulations.

Reference Any statute, court decision, or other provision of

law that the district implements, interprets, or makes specific by adopting, amending, or repealing a regulation. The proposed rule s have been developed to meet the requirements of the State Implementatio n Plan.



### 10 .0 References:

- Federal Register Notice

– Air Quality: Widespread use for Onboard Refueling Vapor Recovery and Stage II Waiver, 77 FR 28772, Published May 16, 2012.

- Benzene Airborne Toxic Control Measure (ATCM) for Retail Service Stations, Title 17, Cal. Code Reg ulation s, Section 93100, Adopted May 13, 1988.

- Design Criteria for Stage I Vapor Control Systems Gasoline Service Stations, Published November

1975.

# A PPENDIX A

Rule Analysis

# A PPENDIX B

Public Notice

# A PPENDIX C

Comments and Responses