ENVIRONMENTAL PROTECTION

ii . As set forth at 40 N.J.R . at 4420, the reason why the Department is requiring the roof landing operating scenarios to be listed separately in the emissions statements is to enable the Department to electronically search the New

Jersey Environmental Management System database for the roof landing emissions for each tank. This is important because roof landings may account for most of a tank's VOC emissions, and having the electronic search capability will help the Department in evaluating its progress towards emission reduction goals. Therefore, the Department is not modifying N.J.A.C. 7:27-21 .5(j)1 as requested. 184. COMMENT: The information required by N .J .A.C. 7:27-21 .5(j)2 is extremely onerous and its additional value to the Department over the Emission Statement data is questionable. Were the reporting costs associated with annual preparation of this document incorporated into the cost-effectiveness evaluation done by the Department? (2, 4, 5, 7, 8, 9, 15, 29, 30, 38 and 43) RESPONSE: The Department estimates that floating roof landing emissions may have accounted for over 50 percent of the total annual floating roof tank emissions in past years. The emission data are incomplete because not all facilities reported their emissions from roof landings prior to the inclusion of the roof landing methodology into AP42 in 2006. The NewJersey specific data collected will help the Department in evaluating its progress towards emission reduction goals and serve as a source of information for technical analyses in future rulemaking

. The collection and public availability of environmental information has been an effective incentive for sources to reduce their emissions . When companies collect emissions information, they learn about the nature and magnitude of their emissions . Therefore, the relatively low costs incurred by compiling this information yields substantial environmental benefits and the costs are minimal in the context of the overall cost of implementing the amendments of N.J .A.C. 7:27-16.2. 185. COMMENT: The requirements at N .J .A.C. 7:27-16.2(o) should only apply to Range III tanks. (2, 4, 5, 7, 8, 9, 15, 29, 30, 38 and 43) RESPONSE: N.J .A

.C. 7:27-16.2(m) through (p) regulate roof landing cycles. (See 40 N.J .R

. at 4406 .) N.J.A.C. 7 :27-16.2(o) relates specifically to roof landings of an internal floating roof tank. A tank's range depends on its capacity, in thousands of gallons, as set forth in N .J .A.C. 7:27- 16.2(b), Table 2A

. Range III tanks are the larger tanks that store high vapor pressure VOCs, such as gasoline. Range III tanks are located at refineries, terminals and pipeline breakout stations. (See 40 N .J .R at 4400.) As set forth in the notice of proposal Summary (see 40 N.J .R . at 4407), the management practices at N .J .A .C. 7:27-16.2(o) are intended to apply to all in-service roof landing cycles to minimize VOC emissions. As discussed in the Response to Comment 117, even with the adoption of these rules, New

Jersey is projected to continue to exceed the newEightHour 75 ppb Ozone NAAQS, so keeping VOC emissions to a minimum is important . Because of the importance of minimizing VOC emissions and because the commenter does not provide any justification for why N .J .A.C. 7:27-16.2(o) should apply only to Range III tanks, the Department has not made the requested modification. 186. COMMENT: There should also be an exemption included in the rule from the requirement to operate air pollution controls during degassing operations should an emergency situation arise that needs immediate attention. (37 and 38) RESPONSE: Emergency situations are provided for under existing provisions for Affirmative Defense at N .J .S.A . 26:2C-19

.1 . Therefore, the Department has not adopted the requested exemption. 187. COMMENT: the Department should adopt the provisions of the degassing rule SCACMD Rule 1149 provided by the New Jersey Storage Tank Coalition. (37 and 38) RESPONSE: The version of SCAQMD 1149 provided by the New Jersey Storage Tank Coalition dates back to 1995 . As set forth in the notice of proposal Summary (40 N.J .R. at 4407), the Department based the provisions of the N.J .A.C. 7:27-16.2(q) on the more recent SJUAPCD Rule 4623, last amended in 2005, which is a more current regulation. 188. COMMENT: The Department's basis for requiring domes on external floating roof tanks at N.J .A.C . 7:27-16.2(1)4 is more akin to the stringent analysis applied to major newsources or sources undergoing major modifications, rather than a proper RACT analysis requiring retrofit technology for an existing source. A determination of what control technologies constitute RACT in ;, given instance is required to consider both technological and economic feasibility. This expansive standard stands in contrast to more stringent standards associated with selecting technology for new major sources that preclude consideration of factors that must be considered under a RACT ' analysis, in particular economic feasibility. For example, major new_~; sources or existing sources undergoing major modifications are required to employ technology that achieves the "lowest achievable emission rate" or "LAER" in non-attainment areas. LAER is defined as, "the most stringent emission limitation which is contained in the implementation plan of any State for such class or category of source . . . or the most stringent emission limitation which is achieved in practice by such class or category ofsource." Similarly, in attainment areas, these sources are required to employ "best available control technology" or "BACT." BACT is defined in pertinent part as "an emission limitation . . . based on the maximum degree of reduction for each pollutant subject to regulation under the Clean Air Act which would be emitted from any proposed major stationary source or major modification which the Administrator, on a : case by case basis, taking into account energy, environmental, and = economic impacts and other costs, determines is achievable for such . source or modification . . ." In addition, New

Jersey imposes its own requirement upon newor modified significant sources by requiring such sources to performa topdown "State of the Art" or "SOTA" analysis. Under this analysis, the most effective control technology for a source is deemed appropriate unless the applicant can demonstrate that such technology should be eliminated based on technological feasibility, environmental impacts, economic feasibility or energy impacts . Of the four control technology selection standards described above, it is clear that a RACT analysis is the most expansive in scope, requiring a broad review of control technology employed across a wide number sources nationwide . Rather than describe and reviewthe reasonableness of requiring the installation of domes on external floating roof tanks as compared to VOC retrofit control technology employed in other states as part of an ozone attainment strategy, the Department appears to have zeroed in on the requirements applicable to stationary storage tanks in California's South Coast Air Quality Management District (SCAQMD), specifically SCAQMD Rule 1178(d)(2)(A) . Other than SCAQMD Rule 1178, however, there do not appear to be any RACT rules at the state or regional levels that require stationary storage tanks with external floating roofs to be retrofitted with domes. The Department's rule proposal indicates that several states, including California and New York, require that existing petroleum storage tanks with external floating roofs be retrofitted with domes. The current requirements at 6 NYCRR §229.3(b) do not list domes as a required control for external floating roof petroleum storage tanks and NewYork's SIP for the 1997 Ozone NAAQS states that NYSDEC determined that the RACT rules currently in place satisfy the Eight-Hour Ozone criteria. More details about the New York and other state rules that require external floating roof tanks to be retrofitted with domes are requested. For example, VOC RACT rules for the 1997 Ozone NAAQS promulgated by California's Bay Area Air Quality Management District, California's San Joaquin Valley Unified Air Pollution Control District and the Texas Council on Environmental Quality (for the HoustonGalveston-Brazoria area) do not require stationary storage tanks with external floating roofs to be retrofitted with domes. In addition, as noted previously, retrofitting external floating roof tanks with domes was not one of the strategies developed by the OTC to reduce interstate pollution. The Department's decision essentially to adopt SCAQMD Rule 1178 as a RACT rule for New Jersey is particularly inappropriate due to the unique non-attainment issues facing the Southern California area. Rule 1178 was adopted as part of the settlement of litigation initiated by three environmental organizations . That settlement required SCAQMD to develop rules that achieved one ton per day VOC reductions starting in 2006 and three tons per day by 2008 . As EPA has noted, RACT determinations are supposed to be performed on a case-by-case basis and thus control technology that is considered "reasonably available" in light of the strict and severe mandatory reductions applicable in Southern California will necessarily differ from what is "reasonably available" to (CITE 41 N.J .R

.1790) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009address ozone attainment issues across New Jersey. The singular nature of the SCAQMD tank regulations is reinforced by a search of the RACT/BACT/LAER Clearinghouse, which does not indicate any instances where a dome retrofit program has been adopted for external floating roof tanks as part of an attainment strategy for the 1997 Ozone NAAQS. In sum, the Department's reliance upon rules adopted by the SCAQMD to the apparent exclusion of RACT strategies in other areas calls into question the sufficiency of the Department's RACT determination with respect to dome retrofits. The Department has previously responded to concerns that its RACT evaluation was more akin to a BACT, LAER or SOTA evaluation by referencing a 1995 EPA memo stating that "RACT requirements can, in some instances, be more stringent than . . . LAER or BACT." This quote, however, was in response to the question as to whether a source that had already installed BACT or LAER in accordance with a previous technology review was required to meet revised RACT rules. In these instances, EPAasserted that control technology may have advanced such that new RACT was more stringent than what was previously considered BACT or LAER, and thus a current RACT study was necessary. This position, however, does not address our concern about the Department's RACT study with respect to domes, namely that the Department's process by which it determined that domes constituted RACT was essentially a LAER, BACT or SOTA evaluation. In other words, while in some instances it may be possible for a RACT study to result in RACT that is more stringent than what was previously considered BACT or LAER, is not proper for a RACT study to impose more stringent control measures by conducting what amounts to a BACT or LAER review . (37) RESPONSE: With regard to the commenter's concerns about the RACT review process being similar to a LAER, BACT or SOTA analysis, a RACT analysis is separate and distinct from, and serves a different purpose than, a LAER, BACT or SOTA analysis. The purpose of a LAER, BACT or SOTA analysis is to minimize the degradation of air quality by a newor modified source. RACT, on the other hand, is intended to improve air quality and bring New Jersey into attainment with the NAAQS by reducing emissions from existing sources. While economic feasibility has to be considered, a RACT analysis does not have to result in less expensive measures than a LAER, BACT or SOTA analysis if the emission reductions from the RACT measures are necessary to achieve attainment with the NAAQS. See the Responses to Comments 117 and 119 for further discussion of costs and the determination of reasonableness. With regard to the question raised about the statement in the rule proposal that New York requires domes (See 40 N.J .R. at 4405) the Department concurs that New York has no regulations that mandate the installation of domes on external floating roof tanks and the Department's statement was an error . However, the Department reviewed the New York Title V permits for petroleum facilities and found no external floating roof tanks, so NewYork would not achieve any emission reductions by requiring external floating roof tanks to be retrofitted with domes. With regard to commenter's statement that adopting SCAQMD Rule 1178 as a RACT rule for New Jersey is inappropriate due to the unique non-attainment issues facing southern California, see the Response to Comment 117 with regard to the appropriateness of modeling New Jersey's rules on from other jurisdictions with similar air quality problems. With regard to the commenter's statement that the RACT/BACT/LAER Clearinghouse does not indicate any instances where a dome retrofit programhas been adopted for external floating roof tanks as part of an attainment strategy for the 1997 Ozone NAAQS, the RACT/BACT/LAER clearinghouse contains information exclusively on case-by-case RACT/BACT/LAER determinations at individual facilities and therefore should not be expected to contain any information on dome retrofits required by a RACT rule as part of an attainment strategy for a nonattainment area. With regard to the commenter's statement that "the Department's reliance upon rules adopted by the SCAQMD to the apparent exclusion of PACT strategies in other areas calls into question the sufficiency of the Department's RACT determination with respect to_ dome retrofits," the commenter is incorrect in asserting that the Department excluded RACT ENVIRONMENTAL PROTECTION Strategies from other areas. As set forth in the notice of proposal Summary (40 N.J .R

. at 4407), certain parts of the roof landing provisions at N.J .A.C. 7:27-16.2(m) through (p) were based on Texas Commission on Environmental Quality (TCEQregulations, and the tank cleaning and degassing provisions at N .J .A.C. 7:27-16.2(q) were based on SJVUAPCD Rule 4623. Also, as discussed in Response to Comment 117, in addition to the fact that domes are required by SCAQMD Rule 1178, the Department considers doming external floating roofs to be RACT because domes are already widely used in New Jersey. 189. COMMENT: The Department's cost effectiveness analysis relies too heavily upon an outdated California analysis and does not accord proper weight to emissions and cost information provided by us. 1n the notice of proposal (40 N.J.R . at 4425) the Department takes the position that installing domes upon VOC stationary storage tanks with external floating roofs is a cost effective control based upon conclusions from a 2001 study conducted by the SCAQMD . The Department argues that it is appropriate to use the 2001 California cost data for purposes of evaluating 2008 through 2010 NewJersey cost data because vendor charges and labor costs are similar between the two locations. Using this study, the Department concludes that the cost-effectiveness of installing domes on external floating roof tanks is $12,036 per ton VOC in 2001 dollars (which is approximately $14,100 per ton in 2008dollars.) It is not apparent, however, that costs of 2001 dome retrofits in California accurately reflect the cost of dome retrofits performed in New Jersey between now

and 2010 (the current compliance date) . There is no discussion as to whether the costs of materials may have increased greater than the rate of inflation between 2001 and today. Further, there is no explicit basis for the Department's assertion that the costs of materials and labor in California are similar to those same costs in the Northeast and New Jersey specifically. In addition, the SCAQMD study acknowledges that it did not take into account the costs of emptying, purging and refloating the tank. Moreover, it is unclear whether the SCAQMD provided an incremental cost effectiveness for dome retrofits, taking into account the other control technology improvements required by Rule 1178, many ofwhich are already employed at our refinery. Perhaps more importantly, however, there is no discussion about the cost effectiveness data that we supplied to the Department during this rule development process . The data provided to the Department highlights two key points. First, the potential reductions for any given external floating roof tank at our refinery as a result of dome installation is, at most, approximately three tons per year . This is particularly important in light of the fact, as noted above, the SCAQMD analysis does not appear to perform an incremental cost-effectiveness analysis of dome retrofits. Second, the incremental cost effectiveness at most of our tanks exceeds RACT thresholds announced by the Department in other contexts. Specifically, in the context of the refinery's wastewater treatment plant (WWTP) permit application from 2002, the Department asserted that its guidance for cost effectiveness factor for VOC control was $10,000 per ton. In the context of the refinery's subsequent VOC RACT plan for the WWTP in 2006, the Department upped its threshold to $20,000 per ton (a figure that arguably exceeds more stringent BACT cost-effectiveness thresholds used by EPA) . In almost every instance, the cost-effectiveness data recently supplied exceeds both of these Department guidance thresholds. In light of the disparity between the SCAQMD study and the figures provided, it is incumbent upon the Department, at a minimum, to analyze and make conclusions about the relative strength of the data provided. Instead, however, the Department has chosen to adopt the conclusions of the SCAQMD 2001 cost-effectiveness data and dismiss, without explanation, the current cost-effectiveness data supplied. Moreover, the Department has failed to acknowledge its previously announced VOC RACT cost-effectiveness thresholds, nor has it provided a basis for potentially abandoning those thresholds with respect to retrofitting external floating roof tanks with domes. (37) RESPONSE: The New Jersey Storage Tank Coalition letter to which the commenter refers did not provide any cost information to refute the information in the 2001 SCAQMD Staff Report for Rule 1178. The figure quoted fromthe California Staff Report, $12,036 per ton reduced, was calculated after the reductions from deck fittings and seals were accounted for, so the cost effectiveness was based on the incremental NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R . 1791)ENVIRONMENTAL PROTECTION

reduction. The average incremental reduction per tank California used in those calculations was 1 .66 tons per year per tank (324.21 tons per year for 195 tanks) was less than average incremental reduction fromdoming presented by the New

Jersey Storage Tank Coalition letter of September 24, 2007 for 12 selected external floating roof storage tanks (21 .57 tons per year for 12 tanks or 1 .8 tons per year per tank) . A cost effectiveness calculation that the commenter provided to the Department contained an error that substantially increased in the cost per ton of reductions the commenter reported. The error consisted of double counting the cost of dome purchase. When the Department corrected the error and recalculated the costs, assuming a 20-year life for the domes and a four percent real (adjusted for inflation) interest rate, as the SCAQMD staff report used, the overall cost effectiveness for doming the external floating roof storage tanks was $19,600 per ton. The cost effectiveness for doming wastewater storage tanks was as high as $125,441 per ton. If the wastewater tanks are excluded fromthe doming requirement, the overall cost effectiveness becomes $17,500 per ton. The cost effectiveness of $17,500 per ton is within the cost effectiveness range reported for other measures the Department is adopting, which are up to $29,000 per ton (in 2001 dollars), as set forth in the Economic Impact (40 N

.J .R . at 4424) . The Department's cost figures are valid even when factoring in the variations in the cost of labor and materials between California in 2001 and New Jersey in 2008. The costs of raw materials have varied widely in recent years. For example the price per pound of aluminum, which is used to manufacture domes, decreased over 40 percent in the last six months of 2008 (httn://futures .tradingcharts .com/nrintchardAL/M ) . Also, the increase in unemployment during 2008 should maintain labor costs at steady levels. As a result, the "dollars per ton of VOC controlled" provides a representation of the costs given the fluctuations in the economy. The primary factor in determining RACT is technical feasibility. The widespread use of existing domes in New Jersey demonstrates that they are used in practice and are effective in controlling VOC, and suggests that it is economically feasible to do so. See the Responses to Comments 117 and 119 for discussions of howtechnical feasibility, cost thresholds and other factors are used to determine RACT. See the Response to Comment 134 with regard to the Department modifying N

.J .A.C. 7:27-16.2(f)4 on adoption to exempt from N.J.A.C. 7:27-16.2(1)4 any tank that stores slop oil or oily wastewater subject to 40 CFR Part 60, Subpart QQQ . 190. COMMENT: The provision of N.J .A.C. 7:27-16.2(1)4 requiring domes on external floating roof tanks to be installed by May 1, 2020 significantly shortens the 20-year internal inspection schedule prescribed by existing Department regulations, which will necessarily result in unanticipated unavailability ofcertain tanks. The proposed rule requires owners and operators to retrofit their external floating roof tanks no later than May 1, 2020 . In order to retrofit an external floating roof tank with a dome, it must be emptied, taken outof-service, cleaned, verified to be in a safe condition to allowworker entry and then undergo an interior inspection. Under NewJersey's discharge prevention regulations at N .J .A.C. 7:1E-2

.16, petroleum storage tanks are required to perform internal inspections in accordance with American Petroleum Standard 653 (API 653), Section 6.4.2, which, among other things, allows for an internal inspection at least every 20 years. In an effort to have as fewtanks as possible off-line at any given time due to internal inspections, thereby causing the minimumamount of disruption to fuel supplies in the region, we performinternal inspections of its tanks according to a predetermined schedule, consistent with the permitted timetable set by API 653. By requiring dome retrofits to be in place by 2020, the Department is in effect mandating that a certain number of tanks be taken offline to undergo an internal inspection before they would be required to under API 653 . More specifically, any tank that was shut down to undergo an internal inspection after May 1, 2000 and before the effective date of the proposed VOC RACT rule would be required to be emptied and be subject to an internal inspection before its regularly scheduled API 653 inspection. Thus, as part of complying with the May 1, 2020 compliance date, more tanks than usual may be off-line.at any given time. Any limits upon the ability of the refinery to store gasoline necessarily reduces the ability of the refinery to produce gasoline, which in tamcould affect fuel supplies in the region. (37) RESPONSE: N

.J .A.C. 7:27-16

.2(1)4 is generally based on the provisions of SCAQMD Rule 1178. SCAQMD Rule 1178 allows facilities a six-year window (2002 through 2008) for doming the applicable external floating roof tanks and all applicable tanks are also subject to API 653. The SCAQMD cost-effectiveness calculations referred to in the Department's Economic Impact (40 N.J.R . at 4425) included a component for loss of use. As set forth in the notice of proposal Summary (40 N.J.R . at 4405), the Department is allowing New Jersey facilities up to l l years (until May l, 2020) to install domes on applicable tanks. Therefore, New Jersey facilities will have more flexibility in scheduling the installation of the domes than was given to SCAQMD facilities. Also, in some cases domes may be installed while a tank is in service. As discussed in the Response to Comment 117, even with the adoption of these rules, New Jersey is projected to continue to exceed the new

Eight-Hour 75 ppb Ozone NAAQS, so it is important to obtain VOC emission reductions expected by installing domes over the 10 year schedule. See the Response to Comment 134 for a discussion of the Department's modification of N .J .A.C. 7:27-16 .2(f)4 to exempt any tank that stores slop oil or oily wastewater subject to 40 CFR Part 60, Subpart 191 . COMMENT: Retrofitting external floating roof tanks with domes in accordance with the N.J.A.C. 7:27-16.2(1)4 unnecessarily increases the risks to persons working at or around the VOC stationary storage tanks. Any rule requiring the installation ofdomes on top of existing external floating roof storage tanks results in increased worker safety concerns as a result of, among other things, the need for inspections and repairs to the dome or external floating roof to be performed in a confined space . For example, any inspection or repair of an external floating roof tank with=a dome will require fresh air to be pumped into the confined space, so as to provide workers with sufficient oxygen. In addition, state of the art fire fighting foam systems on external floating roof tanks are designed to fight fires that range fromsmall hatch and seal fires, to fully engulfed tank fires. Stationary monitors are located around the perimeter of the tank, as well as near the gauge pole, and the gauge pole monitor can rotate to allow foam application around the interior of the tank for small hatch or seal fires. The installation of a dome would prevent the application of foamfrom the gauge pole monitor to extinguish small hatch or seal fires, thereby potentially increasing the risk of a significant tank fire event. While reducing these risks will necessarily increase a facility's costs associated with rule, the main point of this comment is to highlight the potentially significant increased risk to workers as a result ofa pollution control technology that even the Department estimates will only reduce pollution by 130 tons per year, or approximately 10 pounds of VOCs per day, per tank. (37) RESPONSE: The Department considers an emission reduction of 130 tons per year significant enough to justify the rule amendment . As internal floating roof tanks and domed tanks already outnumber external floating roof tanks in New Jersey, the Department is confident that issues with worker safety are not insurmountable. As set forth in the notice of proposal Summary at 40 N .J .R. at 4408, entry into the tank for inspection is only required when the tank is emptied and degassed (no less than every 10 years)

. N.J.A .C. 7 :27-16

.2(r)6 does not require confined-space inspections when the tank contains organic liquid. (See the Responses to Comments 171 and 180 for a more detailed discussion of this issue.) Also, it is generally accepted that domes reduce the risk of seal fires and provide other benefits, such as protecting the floating roof and seals from rain, snowand ice, thus reducing the need for repair and reducing the risk of product contamination. 192 . COMMENT: The requirement at N.J.A.C. 7:27-16 .2(1)2 to make tank fittings "leak-free," as opposed to "vapor tight," is a significant difference between the New Jersey rule and Federal NSPS standards. The Department makes clear in the notice of proposal that it understands the difference between the two terms (40 N.J .R . at 4404) . The NSPS term vapor tight means a fitting is designed to be just that, vapor tight . One would not expect a fitting that was designed to be vapor tight (generally bolted and gasketed) to leak. Gasoline and other light liquid tanks do not (CITE 41 N.J .R

. 1792) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009

### ADOPTIONS experience the type of service conditions with respect to temperature, corrosivity or other conditions that would cause a gasket to deteriorate. Yet, the Department is insisting on verifying the leak free status of every fitting on many of these tanks. This is, by definition, a highly labor intensive practice as each component must either be monitored with a total vapor analyzer using EPA Method 21 or physically proved to have no gaps greater than 0.06 inches. The Department has not presented the cost effectiveness of this practice. The Department adopted the practice from the SCAQMD

. The emission reductions from the extensive monitoring is likely to be insignificant thus making the cost effectiveness nearly infinite. Throughout the rulemaking process the Department assured stakeholders that the final rule would generally mirror the NSPS. While the final rule "generally" follows the NSPS regulations, this deviation is a huge departure and one which should not have waited until the rule was published to have been presented to industry. No cost effectiveness data was provided to demonstrate that it is necessary and reasonable. Sharing rule language throughout the process would have prevented this huge surprise to stakeholders . The Department should present a cost effectiveness demonstration as was done with most other portions of the rule. (26) RESPONSE: With regard to the commenter's concern about the requirement to make tank fittings "leak-free," at N .J .A.C.7:27-16.2(r) use of EPA Method 21 to monitor for a leak-free condition is presented as an alternative to checking the gap widths. (See the Response to Comment 135 regarding the Department's modification ofthe definition of "visible gap" from 1/16-inch to 1/8-inch at N.J .A.C. 7 :27-16.1) If a gasket is shown to have no visible gaps, it does not have to be inspected with EPA Method 21 . The Department disagrees with the commenter's statement that gaskets are not expected to deteriorate. Gaskets may be exposed to rain, snow, ice, freeze-thaw cycles and sunlight, as well as the product contained in the tank. All of these factors can cause a gasket to deteriorate over time. Therefore, the inspection requirements (either checking for visible gaps or verifying the gasket is leak-free) at N.J .A.C. 7:27-16.2(r)5 through 9 are not being modified in response to this comment . With regard to the commenter's question about the cost effectiveness calculations, the dollars per ton for upgraded (that is covered and gasketed with no visible gaps) deck fittings set forth in the Economic Impact statement at 40 N.J .R. at 4424 ($29,000 per ton for external floating roof tanks and $6,000 per ton for internal floating roof tanks) were based on the SCAQMD Staff Report for Rule 1178. The cost effectiveness calculations in that staff report included annual operating and labor costs associated with those fittings. Because gaskets can deteriorate over time, as indicated above, the labor costs associated with periodic inspections are necessary to assure that the emission reductions fromthe enhanced deck fitting requirements are maintained. With regard to the commenter's concern about information provided to stakeholders prior to the rule proposal, in September 2007 the Department provided the NewJersey Storage Tank Coalition an outline of the proposed rules, which clearly stated the inspection requirements would be based on those at SCAQMD Rule 1178 . The response to that outline (letter dated September 24, 2007 fromState Street Associates on behalf of the Storage Tank Coalition to the Department) raised no issues with basing the inspection requirements on SCAQMD Rule 1178. 193. COMMENT: The Department has determined that all external floating roof tanks storing material with a vapor pressure greater than three psia should have domes installed on themusing cost effectiveness data from SCAQMD in lieu of data provided to the Department from NewJersey facilities (40 N.J .R . at 4425) . Stakeholders provided the Department with both cost and emission reduction data specific to the tanks they own and operate within the State. This data spanned a wide range of tanks. In general, the cost effectiveness factors developed using stakeholder data was five to 10 times higher than the data cited in the notice of proposal Summary. The Department did not reference the stakeholder data, did not mention whether it was considered and if not, why it was rejected. These data were actually requested by the Department and took a great deal of effort on behalf of stakeholders to compile it . ENVIRONMENTAL PROTECTION The Department should use the data that it requested. At the very least, the Department should determine and report why such a large inconsistency exists. Stakeholder data is more current and was modeled to reflect actual NewJersey emissions . When the Department continues to request information representing that the data will be used to assist in developing rules and standards and that data thus collected and submitted is not even addressed in the Summary of the rule it makes it more difficult tojustify collecting data in the future. The Department projects in the Economic Impact statement that only about 70 tanks in the State will require domes to be installed. (See 40 N.J .R . at 4427.) This number should be very easy to determine from permit information. About 30 of the tanks at the commenter's facility will require domes. Less than half ofthese tanks are gasoline tanks. It would be surprising if the commenter's facility accounted for nearly half of the tanks in New

Jersey that are affected by the rules. (26) RESPONSE: The data presented to the Department (letter dated September 24, 2007 fromState Street Associates on behalf of the Storage Tank Coalition to the New Jersey Department of Environmental Protection) were emission reductions expected from doming a selected group of 12 external floating roof tanks. The average reductions from doming those 12 tanks (21 .57 tons per year for 12 tanks, or 1 .8 tons per year per tank) actually exceeded the average emission reductions per tank fromdoming presented in the 2001 SCAQMD Staff Report for Rule 1178 (324.21 tons per year for 195 tanks, or 1 .66 tons per year per tank) . Also, the New Jersey Storage Tank Coalition presented no cost data for domes or cost-effectiveness calculations to refute those presented in the SCAQMDreport. With regard to the commenter's statement about the Department's underestimating the number of tanks expected to be affected by the doming provisions at N .J .A.C. 7:27-16

.2(1)4, in light of the 30 tanks at the commenter's facility, the Department's estimate of "at least 70" tanks was a conservative estimate used in the Environmental Impact . (See 40 N.J .R. at 4427.) The air quality permits for some facilities' external floating roof tanks allow them to contain any material with a vapor pressure less than 11 psia, regardless ofwhat they actually store and some of those facilities do not report the specific contents of individual tanks on their emission statements. This creates difficulty in determining the exact number oftanks that would be affected by the doming provisions at N .J .A .C. 7:27-16

.2(1)4. Also, the Department is modifying N.J .A.C. 7:27- 16.2(f)4 on adoption to exempt certain tanks that store slop oil or oily wastewater, as discussed in the Response to Comment 134. This will reduce the number of tanks subject to doming. 194. COMMENT: The Department is proposing at N .J .A.C. 7:27- 16.2(1)4 to allowapproximately 10 years to install domes on all the tanks in New Jersey. Refiners typically followa 20-year tank turn around cycle for tanks corresponding to the inspection schedule allowed by API 653 . If domes are required on tanks and the present schedule becomes the rule then several tanks will need to have domes installed outside of their normal turnaround window(less than 20 years) . This means they will be taken out of service sooner than otherwise required and the degassing emissions will be greater in the short-term than under the current schedules. This will also put those tanks out ofcycle with respect to other tanks at a facility. For a refinery, with nearly 200 tanks that must be managed, this is significant. While in some cases domes can be installed while a tank is in service, this presents safety issues. In addition, this can only be done if sufficient open area exists in the vicinity of the tank to construct a large dome on the ground. Not all facilities have this luxury. (26) RESPONSE: See the Response to Comment 190 for a discussion of why the timeframe for installing domes at N .J .A.C . 7:27-16.2(1)4 is reasonable. 195. COMMENT

: Proposed N

.J .A.C . 7:27-16 .2 includes all or parts of rules from

several jurisdictions including SCAQMD, SJVUAPCD, TCEQ and Bay Area Air Quality Management District (BAAQMD) . Although the Department is applauded for seeking information from other areas that have faced similar issues, the Department did not investigate requirements that were rejected by certainjurisdiction in lieu of others. For example, BAAQMD rejected domes on tanks because it found the domes were not cost effective after all other controls were implemented. NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N .J .R 1793)

### ENVIRONMENTAL PROTECTION

The array of choices available to reduce emissions from tanks contains some amount of overlap. For example, ifone looks at the effect of domes on a tank without other controls installed it will appear to be a very cost effective solution. However, if the Department requires controls on tank fittings (for example slotted guidepole controls), improved seals and other measures, the cost effectiveness ofthe domes is greatly diminished because emissions that would be reduced by the domes are now being reduced by other, cheaper means. In effect, the emissions reductions are double counted. This can occur when various provisions, all of which reduce VOC emissions to some degree, are being proposed for incorporation into the rule. Different jurisdictions have chosen to require some ofthese provisions and have concluded that not all were necessary. The information from Texas and California is valuable and can be tailored to meet the needs of New Jersey tank owners. However, all ofthe rules must be viewed in combination rather than being considered additive in nature. (26) RESPONSE: The model for all of the seal, deck fitting and doming requirements at N.J .A.C. 7:27-16.2 was SCAQMD Rule 1178. Certain parts of the roof landing provisions were taken fromTCEQ regulations and the tank cleaning and degassing provisions were based on SJVUAPCD Rule 4623. The Department did not base its rules on the BAAQMD rules. The environmental benefits from seals, deck fittings and domes are generally not affected by cleaning and degassing or roof landings (though domes are effective in reducing roof landing emissions) . The SCAQMD Final Staff Report for Rule 1178 was very thorough and counted only the emissions reductions from domes that would occur in addition to the emission reductions from the deck fitting and seal requirements when determining the expected emission reductions and cost effectiveness. The anticipated environmental impact of domes, as set forth in the Department's notice of proposal (130 tons per year reduced after 10 years), was estimated after the deck fitting and seal reductions were accounted for (the domes reduced 63 percent of the remaining emissions) . (See 40 N.J.R. at 4427 .) This estimate matches well with the average tons per year per tank reduction (1 .8 tons per year per tank) given by the New Jersey Storage Tank Coalition, multiplied by an estimated 70 tanks (70 tanks times 1 .8 tons per year per tank equals 126 tons per year) . Ifthe 70 tanks affected by doming is a lowestimate, as indicated in Comment 193, then the expected reductions from that measure should be greater . 196 . COMMENT: The purpose of N .J .A .C. 7:27-16.2(I) is to apply additional controls to floating roof deck fittings, other floating roof appurtenances and rim spaces. The EPA has already provided NSPS Subpart Kb and MACT Subpart WW for storage tanks. It would be reasonable for the Department to simply adopt these EPA regulations to all applicable storage tanks in New Jersey instead of adopting N .J .A.C. 7:27-16.2(1), which is full of redundancies, confusing terms, requirements found no where else in the U.S. and contains certain requirements that are technically impossible to comply with . (31) RESPONSE: The conditions at N .J .A .C. 7:27-16.2(1) are based on the SCAQMD Rule 1178, which is more stringent than NSPS Subpart Kb (40 CFR 60.110b through 60 .117b) and MACT Subpart WW (40 CFR 63.1060 through 63 .1067) . It is the Department's intent to be more stringent than Federal rules because NewJersey requires additional measures to achieve attainment with the Federal ozone NAAQS. The commenter fails to provide specifics on the claim that N .J .A.C. 7 :27- 16.2(1) has "redundancies, confusing terms, requirements found nowhere else in the U.S. and contains certain requirements that are technically impossible to comply with" for N.J .A.C. 7:27-16.2(1). Without specific citations, the Department has nothing on which it can focus a response. 197. COMMENT: The Department should adopt the Federal NSPS rules, 40 CFR Part 60 Subpart Kb or the MACT rules, 40 CFR Part 63 Subpart WW

that specifically include double wiper seals as an acceptable alternative to liquid mounted or mechanical shoe seals, rather than maintain the language proposed in N .J .A.C 7:27-16.2(1)3, 9 and 10. The proposed regulation adopts SCAQMD 1178 language regarding rimseal options in N.J .A.C. 7:27-16.2(1)3, 9 and 10 without offering the full range of alternatives identified under 40 CFR Part 60 Subpart Kb or 40 CFR Part 63 Subpart WW

. The specified Federal rules should be adopted completely with regard to rim seals or at a minimum

the New Jersey rules ADOPTIONS

should specifically allow for double wiper seals as an acceptable alternative. This position is supported with reports written by three independent industry experts, provided to the Department. These reports indicate that liquid-mounted or mechanical shoe seals are problematic on tanks with lab-welded or riveted horizontal seams. Liquid mounted seals tend to be damaged easily and mechanical shoe seals may get caught on a seamand damage or sink the roof . A report also suggested that the "liquidmounted" wiper seal types indicated at N .J .A .C. 7:27-16.2(1)9 and 10 were inappropriate, that any wiper seals are vapor-mounted. (7, 8 and 37) RESPONSE: The Department agrees with the commenter that it is appropriate to use vapor-mounted wiper seals on internal floating roof tanks with riveted or lap-welded shell seams because the rivets or lapwelds can damage a liquid-mounted seal, rendering it ineffective and can cause a mechanical shoe seal to get stuck, causing a floating roof to sink. Therefore, the requirements at N.J .A.C. 7:27-16.2(1)5ii and 7iv are being modified on adoption to allowvapor mounted wiper primary seals for existing domed or internal floating roof tanks with horizontal lap-welded or riveted seams. Because ofthe modification of N .J .A .C. 7:27-16.2(1)5ii and 7iv, the Department is also modifying N .J .A.C. 7:27-16.2(1)5ii on adoption to separate it into two conditions at N.J .A.C. 7:27-16.2(1)5ii(1) and (2) . Adopted N.J .A .C. 7 :27-7:27-16.2(1)5ii(l) contains requirements for liquid-mounted primary seals and adopted N.J .A.C. 7:27-16.2(1)5ii(2) contains requirements for mechanical-shoe or vapor-mounted primary seals. Similarly, the Department is modifying N .J .A.C. 7:27-16.2(1)7iv on adoption to divide it into two conditions, N .J .A .C. 7:27-16.2(1)7iv(1) and (2) . Adopted N

.J .A.C. 7:27-7:27-16.2(1)7iv(1) contains requirements for liquid-mounted primary seals and adopted N.J .A.C. 7:27-16.2(1)7iv(2) contains requirements for mechanical-shoe or vapor-mounted primary seals. The requirements at N .J .A .C 7:27-16.2(1)9 and 10 are being deleted on adoption in response to Comment 152, because they are redundanf with N.J .A.C. 7:27-16.2(1)3 and 7. 198. COMMENT: The floating roof seal designs proposed by the Department in N

.J .A.C . 7:27-16.2(1)9i and iii should not be listed as "liquid-mounted." These single and multiple wiper designs are currently utilized by storage tank operators but they are a "vapor-mounted" design. National floating roof designers claim that this "liquid-mounted wiper seal" design is only a conceptual design. Furthermore, there is no mention of a "liquid mounted wiper" in the USEPA TANKS 4.09d emissions software. The liquid-mounted seal in TANKS refers to the foam log primary seal . The Department should provide the emission reduction benefits of a conceptual liquid-mounted wiper seal compared to a vapormounted seal . Because the liquid-mounted wiper seal described in N.J .A.C. 7:27- 16 .2(1)9i and iii is a conceptual design, it may not be a realistic option when replacing a floating roof seal . If they do not have the option of using a vapor-mounted wiper seal, those tanks constructed with a riveted shell will have to chose from either the mechanical shoe seal or the foamlog (wiper) seal and each of these designs is incompatible with the riveted tank shell design. The mechanical shoe seal will not maintain a seal when the shoe rides on the rivets allowing vapors to pass between the shoe seal and tank shell . The mechanical shoe seal is also not recommended because the shoe can get hung up on the riveted courses of the tank shell and damage the seal or sink the floating roof. The foamlog seal is not recommended because the riveted courses of the tank shell have been shown to tear the foam log seal resulting in premature degradation of the foam log seal . The replacement of a riveted shell tank with a welded shell tank would cost approximately $2,000,000. The entire reconstruction of a storage tank is not justified for even a modest air emission reduction. N .J .A .C. 7:27-16.2(1)9i and iii should be modified to allowfor either liquid or vapor-mounted wiper seals or allowfor vapor-mounted wiper seals to be utilized in riveted shell tanks. (21) RESPONSE: See the Response to Comment 197 for a discussion of the Department's modification of N .J .A .C. 7:27-16.2(1)5ii and 7iv on adoption to allow vapor mounted wiper primary seals for domed or internal floating roof tanks with lap-welded or riveted seams. The requirements at N

.J .A.C 7:27-16.2(1)9 and 10 are being deleted on adoption in response to Comment 152, because they are redundant with N.J.A.C. 7:27-16.2(1)3 and 7. (CITE 41 N

.J .R .1794) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS

199. COMMENT: Will vacuumtrucks and pipeline purges be required to be degassed and vapor controlled? The Department's notice of proposal Summary references the SCAQMD rules, which contain such requirements . (40) RESPONSE: Vacuumtrucks used for tank degassing and cleaning are receiving vessels and pursuant to N.J.A.C. 7:27-16.2(q)3i would be required to have 95 percent control during the ozone season ifthe sludge is removed froma tank that stores a VOC with a vapor pressure equal to or greater than 1 .5 psia. As indicated in the notice of proposal Summary (40 N .J .R. at 4407), this provision is based on the SJVUAPCD Rule 4623 (Storage of Organic Liquids), not on the provisions of the May 2, 2008 Amendment of SCAQMD Rule 1149. The Department has not proposed new requirements for controlling purging or degassing of pipelines. 200. COMMENT: Will sludge processing and handling operations require permits? Do they already require permits? Sludge handling and processing will be centrifuge processing units, frac tanks (that is, temporary tanks used for storing and mixing) and the tank itself when the roof lands. (40) RESPONSE: Sludge handling and processing units (for example, centrifuges and mixing tanks) require permits if they can process more than 50 pounds of sludge in any one hour pursuant to existing N .J .A .C. 7:27-8 and 22. Also, the VOC emissions from such equipment are subject to N .J .A .C . 7:27-16

.16 (Other Source Operations) . As for a temporary storage tank or a floating roof tank, any V OCstorage tank needs a permit if its capacity is over 2,000 gallons and it stores material with a vapor pressure greater than 0.02 psia at 70 degrees Fahrenheit, pursuant to N.J.A .C. 7:27-8 and 22. 201 . COMMENT: All storage tanks that contain any amount of VOC would be affected by the inspection requirements at N.J .A .C. 7:27-16.2(r) and that this would be excessively expensive for small storage tanks that contain VOC mixed with water . There should be a de minimis threshold for requiring storage tank inspections, such as having a minimumvolume and vapor pressure similar to that found at NSPS Subpart Kb (40 CFR Part 60, Subpart Kb) that would trigger the requirement for tank inspections. The suggested triggers are: 75 m3 if VOC vapor pressure or sumof VOC partial pressures >= 15 .0 kPa (2.18 psia) ; 75 m3 - 151 m3 if VOC vapor pressure or sum of VOC partial pressures >=3 .5 kPa (0.51 psia) and < 15.0 kPa; and 151 m3 if VOC vapor pressure or sumofVOC partial pressures < 3.5 kPa (0.51 psia) . (2) RESPONSE: The Economic Impact statement (40 N.J .R . at 4425) states that the Department expects costs for inspections to be minimal because owners or operators are already required to perform inspections under the Department's DPCC programrules and Federal NSPS and/or MACT. The tanks described in the comment (small tanks containing water mixed with small amounts of VOC) most likely would not be required to be inspected under DPCC rules, NSPS or MACT . The specific inspection procedures at N .J .A .C. 7:27-16.2(r)5 through 9 refer to Range III floating roof tanks or fixed roof tanks subject to N .J .A.C. 7:27-16.2(1)9 (proposed N .J .A .C . 7:27-16

.2(1)11) . Further, in response to Comment 153, N .J .A.C. 7:27-16.2(1)9 (proposed N .J .A.C. 7:27-16 .2(1)11) is modified on adoption to apply only to Range III fixed roof tanks. Range III tanks are large tanks containing VOC with high vapor pressure and are usually found at refineries, petroleum storage terminals and pipeline breakout stations. All Range III tanks are subject to the Department's Discharge Prevention rules (N.J .A .C. 7aE) and most are now subject to NSPS and/or MACT as well . Therefore, in order to limit the scope of N .J .A .C. 7 :27-16.2(r) to tanks that would also be subject to the Discharge Prevention rules, NSPS and/or MACT, and not to impose significant additional expenses on owners oftanks not subject to inspection requirements of those rules, the Department is modifying N.J.A.C. 7:27-16.2(r) on adoption to indicate it only applies to Range III tanks. All Range III tanks have a minimum capacity of 40,000 gallons, in accordance with Table 2A, N.J .A.C. 7:27- 16.2, and 151 m3 is equivalent to 40,000 gallons, assuming a conversion factor of 264.17 gallons per cubic meter. In addition, in order for a tank with a 40,000 gallon capacity to be classified in Range III, its contents must have a vapor pressure of at least 11 .5 psia (79 .2 kPa) . Consequently, the tanks affected by adopted N.J .A.C. 7:27-16 .2(r) are within the capacity and vapor pressure thresholds that the commenter suggests. ENVIRONMENTAL PROTECTION 202. COMMENT: The Department proposes to require that only an "authorized inspector" at N.J.A .C . 7:27-16.1 can perform the annual inspection. "Authorized inspector" is defined as "someone who is certified as an Aboveground Storage Tank Inspector in accordance with Appendix D of API 653." The basis for this requirement is not clear. To begin, not all storage tanks that will be subject to proposed N.J .A.C. 7:27- 16.2(r) are also subject to API-653. Some are, for example, subject to API-510 or SP001 . If the Department does not reduce the applicability of N.J.A.C. 7:27-16.2(r), there will be thousands of storage tanks throughout the State that are not subject to any integrity standard. In addition, the Department requires that EPA Reference Method 21 be used to measure the emissions fromthe fittings and valves on the tank. Tank integrity inspectors are certified to conduct API inspections and are not the professionals that are most familiar with EPA reference test methods. It appears that the Department felt that it needed to require some form of certification because the SCAQMD does so in Rule 1178. However, EPA does not require certified individuals for any'of the air emission test programs. In addition, the Department does not require certified inspectors for any of its air emission programs. For other N.J .A.C . 7:27- 16 programs (such as N.J.A .C. 7:27-16.18), the Department stipulates only that the testing be conducted in accordance with the reference methods. In the proposed rule, the Department lists no reasons for abandoning this long held practice. The Department should delete the requirement to have an "authorized inspector" performthe N .J .A.C. 7 :27- 16.2(r) inspections. (2) RESPONSE: See the Response to Comment 124 regarding the modified definition of "authorized inspector" at N .J .A .C. 7:27-16.1 . As modified, the definition of "authorized inspector" does not require the inspector to be someone who is certified as an Aboveground Storage Tank Inspector in accordance with Appendix D of API 653. Also, N .J .A.C. 7:27-16.2(r) is modified on adoption to apply only to Range III tanks in response to Comment 201 above, so inspections pursuant to N .J .A.C. 7:27-16.2(r) are not required for tanks outside of Range III . 203. COMMENT: The Department has proposed to make N .J .A .C. 7:27-16.2(s) applicable to every "stationary storage tank that stores VOC, or that stores VOC and non-VOC, except as set forth in (e) and (f) below ." This will impose these requirements onto tanks for which this rule does not make environmental or economic sense. For example, there is no reason that a drinking water storage tank operator should have records ofthe VOC that are stored therein. The applicability criteria for N.J .A.C. 7:27-16.2(s) should be analogous to 40 CFR Part 60 Subpart Kb (40 CFR 60.115b) . (2) RESPONSE: N

.J .A .C. 7:27-16.2(s)2 through 4 refer to floating roof tanks storing VOC

. N.J.A.C. 7:27-16.2(s)6 applies to tanks that meet the applicability criteria at N.J .A.C. 7:27-16 .2(q) . The Department is modifying N.J .A

.C. 7:27-16.2(s)5 on adoption in response to Comment 204 below

to indicate that it applies only to tanks subject to the inspection requirements at N.J .A

.C. 7:27-16.2(r), which are Range III Tanks. (See the Response to Comment 201 regarding the modification of N.J.A.C. 7:27-16.2(r) on adoption to apply only to Range III tanks.) The Department is also modifying N.J.A.C. 7:27-16.2(s)7 on adoption in response to Comment 204 to indicate it applies only to Range III tanks. Therefore, the only requirement at N .J .A .C. 7:27-16.2(s) to apply to all VOC storage tanks is N .J .A .C. 7:27-16.2(s)1, the requirement to maintain records of tank contents and vapor pressure. N .J .A .C. 7:27-16

.2(s)1 is not a new requirement. As set forth in the notice of proposal Summary (40 N.J .R. at 4408), it is an existing requirement that is being relocated from N.J .A.C . 7:27-16.2(k) . Other than its relocation, the Department proposed no change to that requirement and is not modifying it on adoption. 204. COMMENT: In N .J .A .C. 7:27-16.2(s)5, the Department has proposed to require that "all inspection reports" be maintained on site. This requirement is too ambiguous to allowcompliance. The Department should clarify this provision to require only that the inspections that are required under N.J.A.C. 7:27-16.2 be included in the records under this part. In N .J .A.C. 7 :27-16.2(s)7, the Department proposes to create a duplicative requirement to maintain the inspection records that are generated under the Discharge Prevention rules at N.J .A.C. 7:1E. There is no benefit to duplicate the recordkeeping requirements of N.J .A.C. 7:IE. NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R . 1795)ENVIRONMENTAL PROTECTION

In fact, the recordkeeping requirements of N .J .A.C. 7:1E are more stringent than those that are created in N.J.A.C. 7:27-16.2, inasmuch as N .J .A .C. 7:IE-2.15(d) requires that the integrity inspections be maintained for the life of the tank. N .J .A.C. 7:27-16.2(s)7, therefore, has no environmental benefit, yet creates another confusing provision for which the Department can impose penalties. The proposed rules at N .J .A.C. 7:27-16.2(s)7 should be deleted. (2) RESPONSE: The Department agrees with the commenter that requiring all inspection reports to be maintained on site pursuant to N .J .A.C. 7:27-16

.2(s)5 is redundant with the requirements of N.J.A.C. 7:1E-2 .15(d) with regard to tank integrity inspection reports. The Department is therefore modifying N.J.A.C. 7:27-16 .2(s)5 on adoption to require all inspection reports required pursuant to N.J .A.C. 7:27-16.2(r) be maintained on site. This limits the scope of the inspection reports required to be maintained pursuant to N .J .A .C. 7:27-16.2(s)5 to reports related to air pollution, the emissions ofconcern at N.J.A.C. 7:27. N.J .A.C 7 :27-16.2(s)7 requires facilities to keep records of the tank integrity test schedules, but does not require new tests. Records ofthe test schedules are an important component of all the records required under N.J .A.C. 7:27-16.2(s) . The rule does not impose any additional recordkeeping burden upon the facility because N.J .A .C. 7:lE-4.2(c)lv already requires the tank integrity schedules to be kept . These schedules are relevant to air pollution control because requiring the tank integrity testing schedules to be kept assists in the confirmation that the tank inspections pursuant to N.J .A.C. 7:27-16.2(r) will be implemented in the required timeframes. This is because a tank has to be emptied and degassed before tank integrity tests and the tank inspections required by N.J .A.C. 7 :1E-4.2(c)lv and 7:27-16.2(r) can be performed, so the integrity tests and tank inspections pursuant to N .J .A .C. 7:27-16.2(r) will usually occur in the same time frame . In response to Comment 201, the Department is modifying N.J .A.C. 7:27-16.2(r) on adoption to state that it applies only to Range III tanks. Therefore, the Department is modifying N.J .A.C 7:27-16.2(s)7 on adoption to indicate it only applies to Range III tanks as well, because of the relationship between the tank integrity schedules and N .J .A.C. 7:27- 16.2(r) described above. 205. COMMENT: The definition of "capacity" at N.J .A.C . 7:27-16.1 is ambiguous. To clarify, the definition should be based on the working volume of the tank. The applicable permit and or manufacturers specifications could specify working volume and or shell volume, which are not equivalent. For the purpose of determining compliance requirements, the capacity must be based on working volume. Capacity means the working volume of a tank based on equipment specifications and/or calculations maintained by the permittee and made readily available to any authorized representative of the Department upon request . Change the definition to "`Capacity' means the working volume of a tank based on equipment specifications and/or calculations maintained by the permittee and made readily available to any authorized representative ofthe Department upon request." (17) RESPONSE: The Department agrees with the commenter that the definition of "capacity" at N .J .A.C . 7:27-16.1 is ambiguous because the applicable permit or manufacturer's specifications could specify shell volume or working volume. The Department does not agree that working volume is the appropriate definition because, in the case of a floating roof tank, the working volume excludes the minimumvolume required to keep a floating roof in float, while the shell volume includes that minimum volume. That minimum volume, which is the volume belowa landed floating roof, is an important factor for determining roof landing emissions and should be included in the tank capacity. Therefore, to eliminate the ambiguity, the Department is modifying the definition of "capacity" at N

.J .A .C. 7:27-16.1 on adoption to conformto the definition at MACT Subpart WW (40 CFR 63 .1061), which is the internal cross sectional area multiplied by the internal height of the shell (which is the shell volume) . 206. COMMENT: N.J.A.C. 7:27-16.2(f)6 exempts floating roofs from landing loss emission control requirements of N .J .A .C. 7:27-16.2(p) if Federally enforceable potential to emit is less than five tons per year . This exemption is arbitrary and subsequently, provides a competitive advantage to gasoline blending facilities with floating roof tanks of smaller capacities. Specifically, a smaller diameter tank will be afforded ADOPTIONS additional roof leg landing events as compared to a larger diameter tank, based on the proposed flat exemption rate of five tons per year per tank. In some cases, this competitive advantage will be significant. A gasoline blending facility requires the ability to generate different gasoline blends, as dictated by market demand. To do this, the liquid level in the tank must be lowered and most times the roof is taken off. float . As proposed, a 200-foot diameter tank could be limited to two to three roof leg landing events per year, which significantly restricts blending capability resulting in losses of revenue. In addition, in many cases, such tanks may not be easily equipped with roof leg landing control devices, if possible at all, due to the physical limitations ofthat property. Therefore, the proposed five tons per year per tank exemption is not fair and equitable because all floating roof tanks are not the same capacity. As a means to establish a fair and equitable exemption, the exemption must be derived and specified in units of mass per volume (that is, pounds per barrel oftank capacity) . (17) RESPONSE: If a facility commits itself to implementing the control requirements at N

.J .A.C. 7:27-16.2(q)lii for a non-exempt tank, the rule places no restriction on roof landing emissions, though that tank is still subject to its permit limits. Historically, the Department decides to require controls for a piece of equipment based in part on the potential emissions of that piece of equipment. The five-ton per year threshold for roof landings is the same as the five-ton per year threshold that triggers state-of-the-art control requirements for newor modified equipment at N .J .A .C. 7:27-22.35 and 8.12. Economies of scale usually apply to controlling emissions. It is typically more cost effective to control emissions from a piece of equipment if the uncontrolled emissions from that piece of equipment are high, because the resulting benefits in emissions reductions are also high. For example, the 1987 SCAQMD staff report for its degassing rule (Rule 1149) indicates that the dollars perr, ton (reduced) for controlling degassing emissions (which is similar to: controlling roof landing emissions) decreases with increasing size of the tank and increasing vapor pressure of the contents. Therefore, the Department expects that controlling roof landing emissions for large tanks containing material with high vapor pressure will be cost effective, and the facility could conduct blending operations as needed if it equipped its tank with the necessary controls. However, if site-specific circumstances make installing those controls technically infeasible, the facility can apply for an alternative VOC control plan pursuant to N .J .A.C. 7:27-16.17. 207. COMMENT: The requirement at N .J .A.C. 7:27-16.2(o)2 is unnecessary. The rule already establishes an applicability threshold of five tons per year per tank. It may be necessary for some facilities to lower their leg heights as a means to emit less than five tons. However, some facilities may rarely, if ever, land their roof legs and would never approach a landing loss total of five tons per tank, regardless of leg height. Such facilities will incur an unwarranted financial burden associated with raising and relowering the roof legs each time tank cleaning and or maintenance is required. This requirement should be deleted. (17) RESPONSE: The five-ton threshold at N .J .A.C. 7:27-16

.2(f)6 exempts the facility from controlling roof landing emissions or physically modifying the tank. The requirement to use the lowest height setting for in-service landings does not require any physical tank modifications and minimizes emissions fromthose landings. As set forth at 40 N.J.R . 4407, the Department intends that, at a minimum, all floating roof tanks that perform in-service landings will minimize their emissions by using the lowest height setting. As discussed in the Response to Comment 117, even with the adoption of these rules, New Jersey is projected to continue to exceed the newEight-Hour 75 ppb Ozone NAAQS, so keeping VOC emissions to a minimum is important . Therefore, the Department is not modifying N

.J .A .C. 7:27-16.2(o)2 as requested. 208. COMMENT: There is a negligible emission reduction to be realized from controlling degassing and cleaning emissions for any tank with a vapor pressure less than two psia. The cost to clean and degas a tank ranges between $30,000 and $100,000. The requirements at N .J .A.C. 7:27-16.2(q) should be restricted to Range III tanks, as a means to ensure that the emission reduction justifies the significant cost of controlling degassing and cleaning emissions . (I7, 37 and 38) (CITE 41 N.J .R 1796) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009

### ADOPTIONS

RESPONSE: Data provided by the commenters indicate that for a Range I fixed-roof tank containing contents with a vapor pressure less than two psia, the emission reductions fromcontrolling a degassing and cleaning event is less than 200 pounds and that for a Range I or Range II floating roof tank containing gasoline, the maximum emission reduction would be less than 60 pounds. The Final Staff Report for the May 2008 Amendments of SCAQMD Rule 1149 indicated a minimum cost of $10,000 to control degassing and cleaning emissions . This would result in an abatement cost greater than $100,000 per ton for a fixed-roof Range I tank containing material with vapor pressure less than two psia, and for a Range II (or Range I) floating rooftank. The cost effectiveness ratio for controlling degassing and cleaning emissions for these tanks is three times the cost effectiveness ratio underlying the inclusion ofthese control measures for aboveground VOC stationary storage tanks. See the Economic Impact statement at 40 N.J.R . at 4424 ($29,000 per ton of VOC in 2001 dollars) . As set forth in the rule proposal Summary (see 40 N .J .R. at 4427), it is expected that the uncontrolled emissions fromdegassing and cleaning a typical tank are approximately 6.7 tons of VOC . An emission reduction of 6.37 tons would result from 95 percent control of the cleaning and degassing emissions from that typical tank. As indicated above, the emission reductions expected from controlling cleaning and degassing emissions from Range I fixed-roof tanks containing VOC with a vapor pressure less than two psia at standard conditions and Range I or Range II floating roof tanks are less than 200 pounds, or less than two percent of 6.37 tons. Given the cost effectiveness ratio and the limited emissions reductions achieved compared to controlling emissions from tanks with higher uncontrolled cleaning and degassing emissions, it is not considered cost effective to require facilities to control cleaning and degassing emissions fromRange I fixed-roof tanks containing VOC with a vapor pressure less than two psia at standard conditions and Range I or Range II floating roof tanks Therefore, the Department is modifying N.J.A.C. 7 :27-16.2(f)2 on adoption to extend the exemption from the cleaning and degassing requirements at N.J .A.C. 7:27-16.2(q) to any Range I fixed-roof tank containing VOC with a vapor pressure less than two psia at standard conditions and any Range I or Range II floating roof tank. 209. COMMENT: The proposed emissions averaging plan at N .J .A .C. 7:27-16.2(p)2iii as it is currently written will cause certain facilities within the State to have a competitive advantage over others, especially for-hire gasoline blending terminals of similar capacity with a large number of small tanks rather than a small number of large tanks. For example, there are two independent terminals with a total Range III storage capacity of 2,000,000 barrels (42 gallons per barrel) each. The first facility has 27 tanks that average approximately 75,000 barrels per tank. In the first year of the emission averaging, the facility would be allowed to emit 135 tons of VOC during roof landing events. A second facility has 13 tanks that average approximately 150,000 barrels per tank. In the first year of emission averaging, the facility would be limited to 65 tons of VOC during roof landing events. Both terminals are equivalent in terms of capacity, but are simply constructed differently for any number of different reasons . The second terminal has now been put at a competitive disadvantage because it will not be able deliver the same service as the first because its ability to blend and transfer different grades and varieties of gasoline will be limited to half the number ofthe first. The averaging plan should be revised to include emissions averaging based on capacity, not on the number of storage tanks. A very simple transition can be made to relate tons per tank to tons per barrel of shell capacity. For example, assuming that the average Range III tank in the State is 100,000 barrels and the limit in the first year of averaging is five tons, a simple conversion can be made to arrive at an allowable emission factor of 0.05 tons/1,000 barrels. Using this method will allow those facilities with a small number of large tanks remain competitive with terminals that have a large number of small tanks. Over the course of time this emission factor can be reduced, similar to the current notice of proposal . (35) RESPONSE: If a facility commits to controlling roof-landing emissions for all of its non-exempt tanks, pursuant to N .J .A .C. 7:27- 16.2(q)2ii, then the rule does not restrict the annual roof landing ENVIRONMENTAL PROTECTION emissions fromthose tanks or from the facility, though all emissions still must be permitted. The averaging plan requirements at N .J .A.C. 7:27- 16.2(q)2iii are intended as an alternative to the control plan requirements at N.J .A.C. 7:27-16.2(q)2ii, and requires a facility choosing that option to meet an average tons per tank on a fixed schedule. Facilities are free to choose the approach that works best for them . The first terminal in the commenter's example may find it advantageous to submit a control plan pursuant to N .J .A .C. 7:27- 16.2(q)2ii for all of its non-exempt tanks, as economies of scale usually apply to controlling emissions. It is generally more cost effective to control emissions from a piece of equipment if the uncontrolled emissions from that piece of equipment are high. For example, the 1987 SCAQMD staff report for its degassing rule (Rule 1149) indicates that the dollars per ton (reduced) for controlling degassing emissions (which is similar to controlling roof landing emissions) decreases with increasing size ofthe tank and increasing vapor pressure ofthe contents. 210. COMMENT: N.J .A.C. 7:27-16.2(q), which requires control of degassing emissions only during the period May 1 through September 30, will create a perverse incentive that in the end will do nothing to reduce the annual pollutant emissions. The change from abatement of any VOC vapors to abatement only between May 1 and September 30 will result in the unnecessary release of tons of VOCs. The fact that winter conditions reduce NewJersey's pollution levels is not a reason to allowemissions that harm the public. "Attainment" during certain months of the year should not be a justification for allowing the unnecessary release of VOCs, which contain the carcinogen benzene, into the air that New Jersey residents breathe. This health menace is also an environmental justice issue because of the general location of storage tanks in areas of low income and minority demographics . In addition to the respiratory risks to humans and those medical issues noted above, emissions of VOCs pollute New

Jersey's surface waters. The Department's assumption that tanks are generally cleaned only annually is incorrect. Degassing may take place for numerous reasons, including changes in the stored product and changes in ownership or control . Consequently, the Department's estimate ofVOCs resulting from degassing is grossly underestimated. In addition, the "lawof unintended consequences" is certain to prevail . To avoid the cost of abatement, whenever possible, companies will schedule degassing outside of the May to September time frame, resulting in even more VOC releases. Other states recognize these points and have adopted rules to require year-round abatement ofVOCs. The revisions that are nowproposed for New Jersey will allowindustrial entities to shift economic externalities to the public and particularly the immediate neighbors who are least able to bear them

. These externalized costs will continue to be reflected in health care costs and lost productivity. The requirements at N .J .A.C. 7 :27- 16.2(q) should be met year round. (36) - RESPONSE: Although the Department agrees that VOC emissions outside of ozone season create health risks, it is not modifying N .J .A.C. 7 :27-16 .2(q) to be applicable year round. This rule is a major milestone towards the Department's overall emission reduction and attaimnent goals. Its primary focus is ozone reductions. Controlling tank degassing and cleaning emissions during the ozone season is a good start to reducing emissions fromthis type of operation. The Department usually requires RACT control measures for NO, and VOC emissions to be applied year-round and not just during ozone season. An exception was made for degassing and cleaning emissions because bringing in enough control contractors in New Jersey to control those emissions year-round would be problematic during the first year or two of the rule. After it gains experience with the controlling of degassing during the ozone season, the Department will consider controlling degassing and cleaning emissions year round. One of the primary considerations of future rulemaking will be benzene and other air toxic emissions that are emitted during the non-ozone season, as pointed out in this comment . 211 . COMMENT: N.J .A .C. 7:27-16.2(f)6 exempts tanks that emit less than five tons per year from N .J .A.C. 7:27-16.2(p) . Given the levels of non-attainment in this State and the hazardous nature of VOCs, all tanks should be required to comply with VOC control plan. The rule could cause a perverse incentive for facility to install tanks that emit less than five tons, but install more of them, so as to avoid this compliance requirement. (36) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R . 1797)ENVIRONMENTAL PROTECTION RESPONSE: Historically, the Department decides to require controls for a piece of equipment based on the potential emissions of that piece of equipment . The five-ton per year threshold for roof landings is similar to the five-ton per year threshold that triggers SOTA control requirements for newor modified equipment at N .J .A .C. 7:27-22.35. (Any newtank that would emit over five tons per year of VOC must include SOTA control measures and will not be able to avoid control .) Economies of scale usually apply to controlling emissions . It is generally more cost effective to control emissions from a piece of equipment if the uncontrolled emissions from that piece of equipment are high. For example, the 1987 SCAQMD staff report for its degassing rule (Rule 1149) indicates that the dollars per ton (reduced) for controlling degassing emissions (which is similar to controlling roof landing emissions) decreases with increasing size of the tank and increasing vapor pressure ofthe contents. With regard to the perverse incentive to install greater numbers of small-emitting tanks (presumably because they have smaller capacities), emission increases resulting fromany newor modified tanks are subject to permit requirements . Part of the permit reviewprocess is to determine if the potential emissions fromthe proposed new or modified equipment triggers N.J.A.C. 7:27-18, Control and Prohibition of Air Pollution from New or Altered Sources Affecting Ambient Air Quality (Emission Offset Rules)

. A net facility-wide increase of 25 tons per year of VOC would trigger the requirements of those rules and the facility would have to obtain emission offsets and document that the newor modified tanks have the lowest achievable emission rate (LAER) . LAER would require the most stringent controls achieved in practice, without regard to cost. The Department believes that the LAER requirements of N .J .A.C. 7:27- 18 have given facilities a disincentive to build multiple newtanks that would not be subject to N .J .A.C. 7:27-16.2(p), as these newtanks would be subject to more rigorous control requirements . 212. COMMENT: The intention of the RACT amendments is to reduce VOC and NO, emissions fromstationary sources to facilitate New Jersey's compliance with the national ambient air quality standard (NAAQS) for ozone. With like intentions, 40 CFR Part 63 Subparts BBBBBB, CCCCCC and R already cover every gasoline terminal and pipeline tank requiring them to demonstrate compliance with emission limitations and management practices. Generally Available Control Technology (GACT) and MACT regulations specifically reference 40 CFR Part 60 Subpart Kb, or 40 CFR Part 63 Subpart WW, regulating every gasoline tank and therefore the State's rule at N.J .A.C. 7:27-16.2 is redundant in nature. Should gasoline terminals and pipeline facilities remain in the rule, then it is suggested that the option of either complying with 40 CFR Part 60 Subpart Kb or 40 CFR Part 63 Subpart WW be made available as alternative options to the wording put forth in the draft regulation. It appears to have been the intent of the Department to mirror much of NSPS Subpart Kb, however, by not taking the wording of NSPS in its context and inserting newterminology (such as "leak free") the rule is substantially different than NSPS Subpart Kb in its proposed form and beyond what appears to be reasonable. In summary, gasoline terminals already subject to GACT and MACT regulations should be excluded from the proposed RACT applicability in light of the Gasoline Distribution GACT and Gasoline Distribution MACT regulations already in place, or add an option to comply with NSPS Subpart Kb or MACT Subpart WW as another alternative. (41) RESPONSE: See the Response to Comment 119 for a discussion of how reasonableness is determined. The conditions at N.J.A.C. 7:27- 16.2(1)7 are based on the conditions at SCAQMD Rule 1178. SCAQMD Rule 1178 is more protective than the Federal rules at 40 CFR Part 60, Subpart Kb and WW and it was the Department's intent to be more protective because of New Jersey's ozone non-attainment . (See 40 N.J.R . at 4428.) 213. COMMENT: N

.J .A.C. 7:27-16

.3 should include a specific designation for the individual who performs the testing of Stage I and Stage II vapor recovery systems. This designation should be consistent with the certification outlined in N .J .A .C. 7:14B-13 Certification of Individuals and Business Firms. Such a designation is necessary since individuals who perform the testing of Stage I and Stage II vapor ADOPTIONS recovery systems would not meet the proposed definition of "authorized inspector" at N

.J .A.C. 7:27-16.1 . (12) RESPONSE: The definition of "authorized inspector" in N .J .A,C . 7:27-16.1 pertains to tanks subject to the inspection requirements at N .J .A .C. 7:27-16.2(r) and not tanks with Stage I and Stage II vapor recovery systems subject to N .J .A.C. 7:27-16.3. No changes to the vapor recovery equipment testing requirements at N .J .A.C. 7:27-16.3 were proposed and, therefore, were not open for comment. Accordingly, the comment is outside the scope of this rulemaking. 214 . COMMENT: A statement should be added to the rule language that tanks operating under the provisions of Gasoline Dispensing Facilities at N

.J .A.C. 7:27-16.3 are not subject to the proposed rulemaking provisions. It must be made clear that these facilities are not subject to an additional inspection and testing regiment under N .J .A.C . 7 :27-16 .2. (28) RESPONSE: The addition of a statement that tanks operating under the provisions ofGasoline Dispensing Facilities at N.J .A.C. 7:27-16.3 are not subject to the rules is not necessary. Adopted N .J .A.C . 7:27-16.2(f)lii exempts from N

.J .A .C. 7:27-16.2(b) stationary storage tanks that are equipped with a vapor control systemreducing by at least 98 percent the weight of VOCemissions to the outdoor atmosphere. Gasoline stationary storage tanks that are used to accept gasoline fromdelivery vessels and then dispense it to vehicular fuel tanks are regulated by N .J .A .C. 7 :27- 16.3, Gasoline transfer operations and any applicable regulations of N .J .A.C. 7:27-16.2. Since gasoline stationary storage tanks must meet the "98 percent vapor control system" . requirement, pursuant to N.J.A.C. 7:27-16.3(d)li(1), they will be exempt from N .J .A.C. 7:27-16.2(b) . Stationary storage tanks exempt from N .J .A .C. 7:27-16.2(b) cannot be classified as Range III tanks. Since the regulations at N .J .A.C. 7:27-16.2(1)1 through 8 apply only to floating roof tanks, the Department is modifying N .J .A.C. 7:27-16.2(1)11 (adopted N.J.A.C. 7:27-16.2(1)9) on adoption in response to Comment 153 to apply only to Range III fixed-roof tanks. The Department is modifying N

.J .A.C. 7:27-16

.2(r) in response to Comment 201 and N .J .A.C. 7:27-16.2(s)5 and 7 in response to Comment 204 on adoption to state that these provisions are applicable to tanks in Range III only. Consequently, the Gasoline Dispensing Facilities regulated under N .J .A .C. 7:27-16.3 will not be subject to the adopted rules. 215. COMMENT: Proposed N .J .A.C. 7:27-16

.1 includes the definition of "authorized inspector" to mean someone who is certified as an Aboveground Storage Tank (AST) Inspector in accordance with Appendix D of API 653 and who is an employee of an authorized inspection agency. At the same time, the rulemaking at N.J .A.C. 7:27- 16.2 provides some exemptions for fixed roof tanks of 40,000 gallons and less, which are appropriate. The Department is certainly aware that operators of aboveground storage tanks are subject to numerous regulations in addition to those proposed here. Specifically Federal spill prevention, containment and countermeasure (SPCC) rules and the State's Discharge Prevention rules (N.J .A.C . 7:1E) have inspection requirements for the inspection of aboveground storage tanks containing petroleumproducts and other hazardous substances. The Federal SPCC rules recognize inspectors certified by the Steel Tank Institute for the inspection of `shop fabricated tanks' 30,000 gallons or less in capacity. The requirements of the SP001 AST inspection standard developed jointly by EPA and the Steel Tank Institute specifies monthly, quarterly, annual and five-year inspection schedules for shop fabricated ASTs. The Department, in this rulemaking, should be consistent with other regulations mandating inspection of ASTs by including the provision that Steel Tank certified inspectors be authorized to perform the inspection requirements for shop fabricated ASTs of 30,000 gallon or less capacity, which are set for in the N .J .A.C. 7:27-16.2(r) . Operators of these tanks, which are not utilized or regulated as Gasoline Dispensing Facilities, should not have a redundant annual inspection requirement when the inspections required at N .J .A .C. 7:27-16.2(r) could be performed in conjunction with the annual inspections which are currently being performed. (28) RESPONSE: In response to Comment 201, the Department is modifying N

.J .A.C. 7:27-16.2(r) on adoption to indicate it applies only to Range III tanks. This exempts the shop fabricated aboveground storage tanks with a capacity of 30,000 gallons or less from N .J .A.C. 7:27- (CITE 41 N

.J .R 1798) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS 16.2(r), since a tank has to have a capacity of at least 40,000 gallons to be in Range 111 . See the Response to Comment 124 for a discussion of the modification of the definition of "authorized inspector" at N .J .A .C. 7:27- 16.1 . 216 . COMMENT: Proposed amended N.J .A.C. 7 :27-16.2(h) contains a typographical error in language proposed to be added in the second line. The reference should be.to "Table 2A," not to "Table 2." (39) RESPONSE: The Department is modifying N.J .A .C. 7:27-16.2(h) on adoption to correct the cross-reference. 217. COMMENT: To comply with the emissions averaging plan in N .J .A .C. 7:27-16.2(p)2iii, an average of eight percent of the gasoline stored will have to remain in the applicable tanks at all times. This would impact a facility's ability to respond to price fluctuations and also result in supply disruptions. (7 and 8) RESPONSE: If no controls are applied to the facility's floating roof tanks, then an average of approximately eight percent of all gasoline stored on site would have to be retained in the tank to maintain the float. N .J .A.C. 7:27-16.2(p)2ii, which requires a facility-wide tank VOC control plan to be implemented and N .J .A .C. 7:27-16.2(p)2iii, which requires an emission averaging plan to be implemented for gasoline tanks, do not restrict the allowable number of landings. For both rules, vapor control measures can be used to increase the allowable number of landings. This would effectively reduce the volumes that would have to be maintained to keep the roofs floating. Phased Compliance 218. COMMENT: Proposed N.J .A.C. 7:27-19.22 would allowutilities to obtain credit for reductions through energy efficiency, demand response and renewable energy measures . These measures may be currently required by law . The Department should be sure that these proposed measures result in additional reductions beyond what is already required. (36) RESPONSE: N.J.A.C. 7:27-9.22(b)2 provides that the phased in compliance plan must comply with N .J .A .C. 7:27-19.29, 2009 HEDD Emission Reduction Compliance Demonstration Protocol . N.J .A .C. 7:27- 19 .29(d)2 requires that these measures must result in real, quantifiable, enforceable and surplus reductions and are not required by any other "State or Federal permit, regulation, enforceable agreement, or high electric demand day emission reduction program ." Also, N.J.A.C. 7:27- 19.29(d)2 provides a list of allowable measures, including energy efficiency, demand response and renewable energy measures that may be considered to obtain the required emission reductions "as long as the measure was not committed to prior to the operative date of these amendments ." Therefore, these adopted rules ensure reductions beyond what may be already required by law . Summary ofAgency-Initiated Changes: In addition to the changes in response to comments explained above, the Department is modifying the following provisions on adoption: At N .J .A .C. 7:27-16.1, the Department is adding a definition of "hotwork" because this termis used in an agency-initiated change to N .J .A .C. 7:27-16.2(f)3 described below . The definition is the same as that found in Occupational Health and Safety Administration (OSHA) regulations at 29 CFR 1917.152(a) . At N .J .A.C. 7:27-16.1, the Department is adding the definition of "reconstruction" because this term is used in adopted N.J .A.C. 7:27- 16.17. The adopted definition of "reconstruction" is identical to the definition ofthis termin N .J .A.C. 7:27-8 and 22. The Department is deleting the acronym "psi" from N .J .A.C. 7:27- 16.1 because that acronymis not used in Subchapter 16. The Department is adding a definition of "psia" at N.J .A.C. 7:27-16.1 to make the words ofthis commonly used acronymclear . At N .J .A.C . 7:27-16.2(f)3, the Department is adding the phrase "or other hot-work must be performed" after the phrase "must be welded to the fitting." This is because, as set forth in the rule proposal (40 N.J .R . at 4404), the purpose of N.J.A .C. 7:27-16.2f(3) is to prevent explosions by exempting external floating roof tanks fromthe requirements at N .J .A.C. 7:27-16.2(1) until the next time a tank is degassed if welding is necessary to comply with those requirements . Because there are other activities that may present an explosion risk, such as riveting or flame cutting, the ENVIRONMENTAL PROTECTION Department is extending the exemption to include any necessary "hotwork" activities on an external floating roof tank until that tank's next degassing event. Hot-work is an inclusive term that includes activities, such as riveting or flame cutting. At N .J .A.C. 7:27-16.2(1)3x the Department is replacing the phrase "no visible gaps" with "as required at N.J .A.C. 7:27-16.2(1)3iii and iv above." The Department is basing the adopted definition of "visible gap" on SCAQMD Rule 1178. The SCAQMD Rule 1178 definition of "visible gap" incorporated the seal gap criteria adopted at N .J .A .C. 7:27- 16.2(1)3iii and iv. However, it is clearer to refer to these two conditions directly in N

.J .A .C. 7 :27-16.2(1)3x, rather than incorporate those conditions in the definition of "visible gap." The Department is adding the phrase "meeting the requirements for primary seals at N.J .A.C. 7:27-16.2(1)3iii, vii and x above and having no tears or openings" to modified N.J .A .C. 7:27-16.2(1)5ii(1) and to (1)7iv(1) to clarify which conditions applied specifically to liquid-mounted primary seals . The Department is replacing the term"specifications" with the term"requirements" at N.J .A .C. 7 :27-16.2(1)7iv(2) to be consistent with the use ofthe termelsewhere in the rules. Also, the phrase "required at N .J .A .C. 7 :27-16.2(1)3v above" appearing after "mechanical shoe seal" is deleted, because N .J .A.C. 7 :27-16.2(1)3v is a specification for mechanical shoe seals, but does not require tanks to have mechanical shoe seals. The Department is modifying N.J .A .C. 7 :27-16.2(1)7iv(2) to indicate specifications for mechanical shoe seals "instead of meeting the requirement at (1)3v above." The Department is modifying N.J.A.C. 7:27-16 .2(r)6i to clarify that it would be the organic vapor that would be measured. This clarification is consistent with the notice of proposal Summary at 40 N .J .R . at 4408, which explains that the explosimeter is measuring volatile organic compound leaks. These leaks consist oforganic vapors. The Department is modifying N.J .A .C. 7:27-16.2(r)6i and iii by deleting the unnecessary term"by" because it is repetitive. The Department is modifying N .J .A .C. 7:27-16.2(t)1 to correct a spelling error . The Department is adding a recordkeeping requirement at N.J.A .C. 7 :27-16.7(r)5, so that the provisions at adopted N .J .A.C. 7 :27-16.7(r)2 through 4 will be enforceable. Similarly, the Department is adding a recordkeeping requirement at N.J .A .C. 7:27-16.7(s)3, so that the provisions at adopted N .J .A .C. 7:27-16.7(s)1 and 2 will be enforceable. As proposed, the rule did not provide any mechanism to verify compliance. The Department intended that all recommendations incorporated in the rule taken fromthe "Control Techniques Guidelines for Offset Lithographic Printing and Letter Press Printing" (EPA 453/R06-002) (CTG) be subject to recordkeeping requirements, as evidenced by the remaining provisions of N .J .A.C. 7:27-16.7, and the notice of proposal Summary, 40 N.J.R . at 4395 . For example, N.J.A.C . 7:27- 16.7(t)5 requires the recording and maintenance of on-site logs to verify the implementation of best management practices. The notice of proposal Summary (40 N.J.R

. at 4409) states that the cleaning solution requirements at N

.J .A .C. 7:27-16.7(r)2 through 4 and the fountain solution requirements at N .J .A.C. 7:27-16.7(s) were derived from the CTG document. Without such recordkeeping requirements, N .J .A.C. 7:27-16.7(r)2 through 4 and (s) would not be Federally enforceable. According to the notice of proposal Summary (40 N .J .R at 4395) "The Clean Air Act, Section 182(b)(2) (42 U.S.C. §7511(b)(2)), requires states, such as New

Jersey, that have nonattainment areas to revise their SIPS to include reasonably available control technology for sources of VOC emissions covered by a Control Techniques Guidelines (CTG) document issued after November 15, 1990, and prior to the area's date of attainment." Consequently, the recordkeeping requirements must be contained in the rules. At N .J .A.C. 7 :27-16.17, the Department is adding "and facilityspecific" to the heading. The additional words make it clear that any owner or operator with a site-specific approval is still subject to this section. For the same reason, the Department is adding "or facilityspecific" throughout N.J .A .C. 7:27-16.17. At N.J .A.C. 7:27-16.17(a)1, the Department is adding "whose owner or operator seeks approval of a facility-specific VOC control plan that would apply to any source operation or equipment" to clarify the NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R. 1799)ENVIRONMENTAL PROTECTION

applicability requirement. This is consistent with language regarding similar requirements for NO, at N .J .A.C. 7:27-19.13. At N.J.A.C. 7:27-16

.17(b)2ii, the Department is clarifying that this provision applies to a facility-specific VOC control plan for a major facility not regulated elsewhere in Subchapter 16. When this rule was adopted in 1994, the notice of proposal (25 N .J .R . 3339(a), 3354) stated that N.J.A.C. 7:27-16

.17 applied to both facility-specific cases (where a facility is not regulated elsewhere in Subchapter 16), as well as alternative cases (where a facility is seeking alternative requirements to Subchapter 16 existing requirements for that source operation) . The notice of proposal (25 N .J .R . 6002(a), 3354, Alternative means of compliance), as well as the adopted rule text (see 25 N.J.R . at 6009), confusingly used the term"alternative" to mean using the facility-specific requirement at N

.J .A .C. 7 :27-16.17(b)2ii as an alternative to the facilityspecific requirement at N .J .A .C. 7:27-16

.17(b)2i, instead of as an alternative to an existing Subchapter 16 requirement for that source operation. The existing rule at N .J .A.C. 7:27-16.17(b)2ii referred to this facility-specific meaning in the phrase "alternative VOC control plan" when it should have used the phrase "facility-specific VOC control plan." On adoption, the Department is replacing the word "alternative" with the word "facility-specific" to end this confusion. As modified, N.J .A.C. 7:27-16.17(b) applies only to facility-specific VOC control plans. The Department is modifying subsection (b) to include only requirements for facility-specific emission limits. At N.J.A.C. 7:27-16.17(c), the Department is adding the words "pursuant to (a)2 or 3 above" to clarify the applicability requirement due to the amendment to subsection (a) that added paragraph (a)3 . At the end of N.J .A.C. 7:27-16

.17(c)3, the Department is correcting punctuation. At N .J .A .C. 7:27-16.17(c)3i, the Department is correcting grammar . At N.J .A.C. 7:27-16.17(c)4, the Department is adding "and," which was inadvertently omitted fromthe notice of proposal . At N.J .A.C. 7:27-16.17(d) and (d)li, the Department is modifying cross-references to be consistent with the adopted rules. At N.J .A.C. 7 :27-16.17(q), the Department is correcting a cross reference. At N.J .A.C. 7:27-16.17(s), the Department is modifying the Department's contact information. At N .J .A.C. 7:27-16, Appendix II, the Department is adding an explosivity meter to the list of equipment needed to conduct a tank inspection. This is consistent with N.J.A.C. 7:27-16, Appendix II, Inspection Form, Section E. At N .J .A .C. 7 :27-16, Appendix II, Inspection Form, Section F the Department is correcting the numbering ofa provision. At N .J .A.C . 7:27-19.8(e)5, the Department is correcting the Department's website address at which Technical Manual 1004 is located. At N .J .A .C. 7:27-19.13, in the heading the Department is replacing "rates" with "limits ." A limit can be a limit of the rate or concentration of air pollutant emissions, as well as some other prescribed parameter for a source operation. A limit can be a maximumallowable rate, a maximum allowable concentration or some other parameter. Therefore, "limit" is the appropriate termto use in the heading, and was the term used in the heading prior to this adoption. For the same reason, throughout adopted N .J .A .C 7:27-19

.13, the Department is replacing "rate" with "limit" and deleting the words "maximum allowable" to state the more appropriate terms "limit," "emission limit," "alternative emission limit" and "facilityspecific emission limit ." At N .J .A.C. 7:27-19.13(a), as well as throughout N .J .A .C. 7:27-19 .13, the Department is adding the various parameters than can be an emissions limit. As the previous paragraph above explained, an emissions limit can be a maximumallowable rate, a maximum allowable concentration, or some other parameter . At N .J .A .C. 7 :27-19.13(a)1, the Department is adding the acronym FSEL, which is commonly used to describe this type of emission limit . Also the Department is replacing "rate" with "FSEL" to clarify that, in this instance, this type of limit may not necessarily be an emission rate but some other type of limit . At N.J .A.C. 7:27-19.13(a)2, in the last sentence of the paragraph the Department is adding "alternative" because the Department is referencing an alternative limit and not a source category limit specified in ADOPTIONS =}~ Subchapter 19. Also, the Department is adding the acronymAEL, which _ is commonly used to describe this type of emission limit. At N.J.A

.C. 7:27-19.13(b)1, the Department is adding reference to subsection (j) . a cross. At N .J .A .C. 7 :27-19.13(b)2, the Department is adding a cross- reference to subsection (k), adding "as applicable" because either paragraph (b)6 or subsection (k) may apply and deleting the duplicative reference to paragraph (b)6. At N .J .A.C. 7 :27-19.13(b)4, the Department is adding that the information at subsection (c) must be included in the request for an alternative emission limit, and deleting the cross-reference to subsection (d), which subsection (c) already requires be included in the request. At N.J.A

.C. 7:27-19

.13(b)5i, the Department is adding that the information at subsection (c) must be included in the proposed facility. specific NO

. control plan and deleting the cross-reference to subsection (d), which subsection (c) already requires be included in the plan. At N.J .A.C

. 7:27-19.13(b)6, the Department is replacing the word "start" with "start-up" to accurately describe when the termination of any existing alternative or facility-specific emission limit takes effect . At N.J .A.C

. 7:27-19.13(b)7, the Department is clarifying that this requirement applies to an alternative emission limit . At N.J.A

.C. 7:27-19.13(d), the Department is adding "facility. specific" to clarify that this NO, control plan is a facility-specific No. control plan. At N.J.A

.C. 7:27-19.13(h), the Department is correcting a capitalization error . At N.J .A.C. 7:27-19.13(i), the Department is correcting a crossreference. At N.J .A.C. 7:27-19.13(m)3, the Department is correcting a crossreference. At N.J .A.C. 7:27-19.13(o), the Department is modifying the Department's contact information. The Department inadvertently proposed to delete the word "for" from N.J.A.C . 7 :27-19.15(b), making the first sentence grammatically incorrect. The Department is correcting this by reinserting the word "for." At recodified N

.J .A.C. 7:27-19.29(b)2, the Department is adding "at (b)5" to clarify the submittal address location. At N .J .A.C. 7:27-19.29(b)5, the Department is correcting the submittal address. At N .J .A.C. 7:27-19.29(c), the Department is replacing "achieve" with "obtain" to make subsection (c) consistent with N.J .A.C. 7:27-19.29(b)3, which requires the owner or operator to "obtain" emission reductions. At N .J .A.C. 7:27-19.29(c), the Department is adding "pursuant to (b)3 above" to clarify the rule provision that requires the owner or operator to obtain the emission reductions. At N.J.A.C. 7:27-19.29(c), the Department is replacing "USEPA" with "EPA" in two locations to be consistent with references elsewhere in Subchapter 19. At N .J .A.C. 7:27-19.29(c), the Department is modifying one of the factors used in Equation 1 . Equation 1, used to calculate the emission reductions that an owner or operator subject to N.J .A.C. 7:27-19.29 needs to achieve on any given high electric demand day, may require an owner or operator to achieve more reductions ifthe owner or operator installs a newHEDD unit without removing an existing HEDD unit fromservice. In the equation [ER = (BE / EF) * RF], the required emission reductions (ER) is dependant on three factors. The emission factor (EF) is a fixed number that represents the total tons of NO, emitted by that owner or operator's HEDD units on July 26, 2005. The reduction factor (RF) is also a fixed number that is based on the level of NO, ; control that was being utilized on each of the owner or operator's HEDD units that were operated on July 26, 2005. The baseline emission factor (BE) is a value that will vary from one high electric demand day to another. The BE is the total tons of NO, that would have been emitted on a given high electric demand day, if the owner or operator did not implement their 2009 Protocol and is based on the HEDD units that are actually operated on a given high electric demand day. As proposed, the description of BE would require an owner or operator to include all HEDD units operated on a given high electric demand day. The proposed definition of HEDD unit at N.J .A.C. 7 :27-19.1 included newunits, as well as existing units that were operated less than or equal to an average of 50 percent of the (CITE 41 N.J .R

. 1800) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS

time during the immediately preceding three ozone seasons. See the Response to Comment 46 for changes to the definition of HEDD unit) . Equation 1 was designed to require certain owners and operators to achieve emission reductions, based on the operation of their uncontrolled or under-controlled HEDD units. If an owner or operator installs a new electric generating unit without removing an existing HEDD unit from service, the owner or operator could operate its entire existing high electric demand day fleet plus the newunit, which would increase the BE factor and therefore increase the required ER. This is not the intended result because a new

electric generating unit would have to comply with state-of-the-art requirements at N .J .A .C. 7:27-8.12 and 22.35, lowest achievable emission rate requirements at N.J.A.C. 7:27-18 and best available control technology requirements at 40 CFR 52.21, if applicable. Therefore, the installation of this new, additional unit would increase the number of emission reductions that the owner or operator was required to obtain while not leaving the owner or operator any options for obtaining those reductions on the new electric generating unit, because the new unit is already well controlled. In order to correct this condition, the Department is modifying the description of the BE factor to include only HEDD units (upon adoption the definition of HEDD unit is modified to include only those electric generating units that commenced operation prior to May 1, 2005) and any electric generating unit installed to replace a HEDD unit . NewEGUs that are installed as replacement units for existing HEDDunits remain in the determination of BE because Equation 1 divides BE by EF, which is the total NO, emitted by the owner's or operator's HEDD units on July 26, 2005. This means that the BE factor will be reduced by the emissions fromall HEDD units operated on July 26, 2005, including the ones that have been replaced. The required reductions would be biased low if the replaced HEDD units simply dropped out of the determination of BE. By including the replacement units in the determination of BE, the emissions from the power that would have been generated by these replaced HEDD units are still being considered. However, since a new unit will emit less NO, than an HEDD unit, the required emission reductions will be lower . Also, the difference in NO, ; emitted between the replaced HEDD unit and the newEGU can be considered as part of the required emission reduction, for replacement units. However, for additional generating units, the owner or operator does not get any credit for the lowemission rate of the unit because the emissions are in addition to the owner or operator's HEDD unit fleet, and therefore are not reducing emissions fromHEDD units. At N.J .A .C. 7:27-19.29(g), the Department is adding "Department's" to clarify that it is an action by the Department of which the Department will notify the owner or operator . At N.J.A.C. 7:27-19.29(h)1, (i), (j) and (k) the Department is clarifying cross-references to N .J .A .C. 7:27-19.29(b)5. At N.J.A .C. 7:27-19.30(a), the Department is correcting an address. At several locations at N .J .A.C. 7:27-19.30(b), the Department is replacing "shut down" with the Department's intended meaning to permanently take a HEDD unit out of service. The phrase "shut down" could erroneously be interpreted at N .J .A .C. 7:27-19.30(b) as temporarily not operating a HEDDunit. At N .J .A.C. 7:27-19.30(c), the Department is changing the date by which the owner or operator must submit each annual 2015 Plan update to January 30 after the calendar year of the update. Proposed N.J .A.C. 7:27-19 .30(c) required this report to be submitted with the annual compliance certification. This change is being made in order to clarify when the report must be submitted by including a date in the rule. January 30 of the next calendar year was chosen in order to make this requirement consistent with the submittal of the 2009 Protocol annual report, which also must be submitted by January 30 of the next calendar year . This date allows the owner or operator 30 days to prepare each report. The Department proposed to amend N.J.A.C. 7:27-16.2(h), but inadvertently proposed to delete the corresponding penalty fromN .J .A.C. 7:27A-3 .10(m)16. In the notice of proposal Summary (40 N .J .R . at 4420), the Department stated that it proposed to delete penalty provisions for violations of those portions of N .J .A .C. 7:27 that were proposed to be deleted. The Department did not propose to delete N .J .A .C. 7:27-16.2(h) ; accordingly, the penalty provision should not have been shown as deleted ENVIRONMENTAL PROTECTION in the rule text. The Department is, therefore, not adopting the proposed amendment to N.J .A.C. 7:27A-3.10(m)16. The Department proposed to delete the provisions at N .J .A .C. 7 :27- 16.2(k) and reserve this subsection, but inadvertently did not propose to delete the corresponding penalty from N .J .A .C. 7:27A-3 .10(m)16. On adoption the Department is deleting this penalty, for the same reason discussed above, and set forth at 40 N .J .R. 4420

. Federal Standards Analysis Executive Order No

. 27 (1994) and N

.J .S.A . 52 :14B-1 et seq. (P.L. 1995, c. 65) require State agencies that adopt, readopt or amend State regulations that exceed any Federal standards or requirements to include in the rulemaking document a Federal standards analysis. The adopted new

rules and amendments are needed to fulfill a Federal Clean Air Act requirement that New Jersey adopt control measures to reduce NO

., VOC, SOZ and particulate emissions to attain the ozone and fine particulate national ambient air quality standards . Therefore, adoption of the new

rule and amendments are consistent with Federal requirements . Based on its review of Federal regulations, the Department has determined that the adopted newrules and amendments for the following source categories do not contain any standards or requirements that are comparable to Federal law : alternative and facility-specific VOC control requirements, alternative and facility-specific NO, emission limits, asphalt pavement production plants, the source categories affected by the adopted control techniques guidelines, and glass manufacturing furnaces. Accordingly, Executive Order No. 27 (1994) and N .J .S.A. 52:14B-1 et seq. (P.L. 1995, c. 65), do not require any further analysis for these source categories. The Clean Air Act, Section 182(b)(2) (42 U.S.C. §7511(b)(2)), requires states, such as NewJersey, that have nonattainment areas to revise their SIPs to include reasonably available control technology for sources of VOC emissions covered by a Control Techniques Guidelines (CTG) document issued after November 15, 1990, and prior to the area's date of attainment . In September 2006, the EPA issued CTG documents for offset lithographic printing and letterpress printing (EPA 453/R-06- 002), flexible package printing (EPA 453/R-06-003), and flat wood paneling coatings (EPA 453/R-06-004) . (See http://www .epa.eov/ttn/ naaqs/ozone/ctg acU

.) The adopted amendments are equivalent to and are not more stringent than these CTGs. Accordingly, Executive Order No . 27 (1994) and N

.J .S.A. 52:14B-1 et seq. (P.L. 1995, c. 65), do not require any further analysis for these source categories. Based on its review of comparable Federal regulations, the Department has determined that the adopted newrules and amendments for the following source categories contain standards or requirements that exceed the standards or requirements imposed by Federal law : asphalt used for paving, boilers that serve electric generating units, high electric demand day units, ICI boilers and other indirect heat exchangers, municipal solid waste incinerators, and VOC stationary storage tanks. However, as stated above, all of these adopted new rules and amendments are needed to fulfill a requirement, imposed by EPA pursuant to the Federal Clean Air Act, Section 182(b)(2) 42 U.S.C. §§7401 et seq., that NewJersey adopt sufficient control measures to meet the NAAQS for ozone and fine particulates. Therefore, the adopted newand amended rules are necessary for the State to comply with Federal requirements . Failure to achieve these reductions could subject the State to Federal sanctions. Despite the fact that the adopted new rules and amendments are necessary if the State is to meet Federal Requirements, a Federal Standards Analysis follows below by source category. Asphalt Used for Paving In 1979 EPA recommended a seven percent VOC content limit for emulsified asphalt used during the ozone season. The Department is adopting a more stringent VOC content limit (0.1 percent VOC by weight ; or 6.0 milliliter of oil distillate in accordance with the ASTM Method D244 or AASHTOT 59) for emulsified asphalt used during the period April 16 through October 14. The entire state of New Jersey is not in attainment with the Federal 1997 eight-hour NAAQS for ozone. The

NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R . 1801)ENVIRONMENTAL PROTECTION

purpose of the adopted more stringent VOC content limit is to help bring the State into attainment . The Department has investigated various emission sources to determine where further VOC emission reductions can be achieved. The storage, use or application of emulsified asphalt is one of these emission sources. Emulsified asphalts with a lower VOC content than is in EPA's Asphalt CTG exist and are currently being used by the New Jersey Department of Transportation. EPA's Asphalt CTG has not been revised since 1979 (almost 30 years ago) and is outdated. In 1993, the state of Delaware prohibited VOC in emulsified asphalt manufactured, mixed, used or applied during the ozone season. The OTC has recommended that each state in the OTC region adopt a rule for emulsified asphalt and issued white papers to help states develop rules. On December 12, 2007 the state of Connecticut re-proposed a rule. The Department's adopted VOC content limit for emulsified asphalt is the same as Connecticut's re-proposed limit. The adopted rules could affect manufacturers of emulsified asphalt. The adopted rules may also affect some asphalt paving contractors and some municipalities in NewJersey, as users of emulsified asphalt. The Department has analyzed the potential costs and benefits, based on compliance in 2009. As discussed in the Economic Impact above, the Department anticipates that the cost to manufacturers of producing emulsified asphalt with the more stringent VOC content limit will be relatively lowand that compliant emulsified asphalt is available at prices comparable to high VOC content asphalt mixtures. The Department anticipates that the adopted new rules and amendments will result in a direct benefit to public health of 3.6 tpd of VOC reduced during the ozone season, and 420 tpy during the regulated period (April 16 through October 14) as well as other benefits described in the Environmental Impacts section. The 1979 EPA-recommended VOC content limit for emulsified asphalt is outdated. Emulsified asphalts that would comply with the adopted VOC content limit exist and are in use at prices comparable to asphalts with a high VOC content. The adoption's requirement to manufacture and use compliant asphalt is not anticipated to pose a financial burden to emulsified asphalt manufacturers or users. The benefits to public health and the environmental outweigh any cost to manufacturers and users in order to help bring the State into attainment with the Federal 1997 eight-hour NAAQS for ozone. Boilers Serving Electric Generating Units The Department has compared adopted N.J .A.C. 7:27-4.2, 10.2(c) and 19 .4(a) with analogous Federal regulations, namely New Source Performance Standards (NSPS), 40 CFR Part 60. Based on its reviewof these Federal regulations (40 CFR 60.40 and 60.40Da), the Department has determined that the adopted newrules and amendments are more stringent than some of the standards or requirements imposed by the Federal regulations. Standards of ADOPTIONS Performance for Fossil Fuel Fired Steam Generators for which construction is commenced after August 17, 1971 (40 CFR 60.40 - Subpart D) do not apply to boilers that were constructed prior to August 17, 1971, and not modified or reconstructed since; therefore Subpart D does not impose any emission limit for particulates, SOZ or NO . on these sources. Similarly, Standards of Performance for Electric Utility Steam Generating Units for which construction is commenced after September 18, 1978 (40 CFR 60

.40Da - Subpart Da) do not apply to boilers that were constructed prior to September 18, 1978, and not modified or reconstructed since; therefore Subpart Da does not impose any emission limit for particles, SOZ or NO, on these sources. The amendments being adopted by the Department will require all coal-fired boilers in the State to comply with the adopted particle and SOZ emission limits and all boilers serving electric generating units to comply with the adopted NO, emission limits, regardless of installation date and whether or not the source has been modified or reconstructed. Particles The adopted rules would set a maximumparticle emission rate of 0.0300 pounds/IvIIvIBtu for all existing coal-fired boilers in the State and a maximum

particulate emission rate of 0.0150 pounds/MMBtu for any coalfired boiler that is constructed, installed, reconstructed or modified on or after the operative date ofthe rule. These maximum emission rates are more stringent than NSPS for sources that were installed prior to August 18, 1971 because neither 40 CFR 60.40 nor 40 CFR 60.40Da apply to these boilers. The adopted 0.0300 pounds/MMBtu emission rate is also more stringent than the NSPS for sources that were constructed, reconstructed or modified starting August 18, 1971 through September 18, 1978, andnot subsequently reconstructed or modified. The Federal rule at 40 CFR 60.40 requires an emission limit of 0.10 pounds/MMBtu for these sources. Also, for sources constructed, reconstructed or modified after February 28, 2005, 40 CFR 60.42Da allows a less stringent alternative to the 0.0150 pounds/MMBtu emissions limit of 0.030 pounds/MMBtu, as long as the emission reduction is at least 99.8 percent for sources modified after February 28, 2005, or 99.9 percent for sources constructed or reconstructed after February 28, 2005. However, if the construction, reconstruction or modification of the source triggers the Federal Prevention of Significant Deterioration (PSD) rule at 40 CFR 52.21, PSD regulations will require the installation of BACT on the source, which would be capable of achieving the adopted maximum emission rate. Therefore, the adopted maximum emission rate is not more stringent than Federal rules for a new or modified coal-fired boiler that is subject to PSD

. Table 6 below compares the maximum particulate emission rates imposed by Federal NSPS regulations with the adopted maximum particle emission rates as applicable to boilers that were constructed, reconstructed or modified at various times. TABLE 6 Comparison of Federal Particulate Emission Limits and Adopted Particle Emission Limits for Boilers Date Source Was Constructed Reconstructed or Modified Prior to 8/18/71 No Applicable Federal Rules

Federal Regulations (for coal-fired only)

Adopted Emission Rates None Starting 8/18/71 through 9/18/78 40CFR 60.40 NSPS Subpart

D

0.10 pounds/ IvIMBtu Starting 9/19/78 through 2/28/05 On or after 2/28/05 40 CFR 60.40Da NSPS 40 CFR 60.40Da NSPS Subpart Da Subpart Da

Coal : 0 .03 pounds/ MMBtu and 99 percent reduction

Boiler existing as of the Operative Date: 0.14 pounds/MWh or 0.015 pounds/IvIMBtu

or Modification: 0 .03 pounds/MMBtu and 99.8 percent reduction

or Construction or Reconstruction: 0.03 pounds/MMBtu and 99.9 percent reduction

(CITE 41 N.J .R

. 1802) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS

(for coal-fired only) ' Or as specified in a permit if a more ENVIRONMENTAL PROTECTION 0.0300 pounds/MMBtu' If Constructed, Reconstructed or Modified after Operative Date:

0.0150 pounds/MMBtu' stringent limit is imposed due to SOTAor PSD applicability SO, The adopted rules would require a maximum SOZ emission rate of 0.150 pounds/MMBtu (based on a 30-calendar-day rolling average) and 0.250 pounds/MMBtu (based on a 24-hour emission rate) for all sources in the State that combust solid fuel . These limits are more stringent than the NSPS for sources that were installed prior to August 18, 1971, because neither 40 CFR 60.40 nor 40 CFR 60.40Da apply to these sources. The adopted emission limits are also more stringent than the NSPS for sources that were constructed, reconstructed or modified starting August 18, 1971 through September 18, 1978, and not subsequently reconstructed or modified. The Federal regulation at 40 CFR 60.40 requires an emission limit of 1 .2 pounds/MMBtu for these sources. These limits are also more stringent than NSPS for sources that were constructed, reconstructed or modified starting September 19, 1978 through February 28, 2005, and not subsequently reconstructed or modified (40 CFR 60 .40Da requires an emission limit of 1 .20 pounds/MMBtu along with an SOZ reduction of 90 percent or an emission limit of 0.60 pounds/MMBtu along with an SOZ reduction of 70 percent for these sources) . For sources that are reconstructed or modified after February 28, 2005, 40 CFR 60.42Da requires an emission limit of 0 .150 pounds/MMBtu based on a 30-calendar-day rolling average, which the adopted rule also requires. However, the adopted rule also requires an emission limit of 0.250 pounds/MMBtu based on a 24-hour emission rate, which could be more stringent than the Federal 0.150 pounds/MMBtu emission limit based on a 30-calendar-day rolling average. Therefore, the adopted rule could be more stringent than the Federal regulation. Also, NSPS allows an alternative emission limit of 1 .4 pounds/MWh or an SOZ reduction ranging from90 percent to 95 percent for a source depending on whether the source is constructed, reconstructed or modified after February 28, 2005. If the construction, reconstruction or modification of the source triggers the Federal PSDregulations at 40CFR 52.21, these Federal PSD regulations will require the installation of BACT on the source, which would be capable of achieving the adopted maximum emission rates. Therefore, the adopted maximumemission rates are not more stringent than Federal regulations for a new, reconstructed or modified coal-fired boiler that is subject to PSD . If the Federal PSD regulations are not triggered the adopted emission rates may or may not be more stringent than the Federal regulations, depending on the characteristics of the combustion unit. Table 7 below

compares the maximumS02 emission rates imposed by Federal NSPS regulations with the adopted maximumSOZ emission rates as applicable to boilers that were constructed, reconstructed or modified at various times. TABLE 7 Comparison of Federal S02 Emission Limits and Adopted S02 Emission Limits for Boilers Date Source was Constructed Reconstructed or Modified Prior to 8/18/71 No Applicable Federal Rules

Federal Regulations (for coal-fired only)

Adopted Emission Rates (for coal-fired only) None Starting 8/18/71 through 9/18/78 40 CFR 60.40 NSPS Subpart

D

1 .2 pounds/MMBtu

0 .150 pounds/MMBtu'°Z 0.250 pounds/MMBtuZ'3 ' 30-calendar-day rolling average basis Z Or as specified in a permit if a more stringent limit is imposed due to SOTA or PSD applicability ' 24-hour emission rate NO . The Department's adopted new rules and amendments would require a maximum allowable NO . emissions rate of 1 .50 pounds/MWh operative on December 15, 2012 for coal-fired boilers, 2.00 pounds/MWh operative on May 1, 2015 for heavier than No. 2 fuel oil-fired boilers, 1 .00 pound/MWh operative on May 1, 2015 for No . 2 and lighter fuel oil-fired boilers, and 1 .00 pounds/MWh operative on May 1, 2015 for gas-fired boilers. These maximumemission rates are more stringent than NSPS for sources that were installed prior to August 18, 1971, because neither 40 CFR 60.40 nor 40 CFR 60.40Da applies to these sources. Starting 9/19/78 Through 2/28/05 40CFR 60

.40Da NSPS Subpart Da

1 .20 pounds/MMBtu and 90percent reduction or 0.60 pounds/MMBtu and 70 percent reduction After 2/28/05 40 CFR 60.40Da NSPS Subpart Da Construction: 1 .4 pounds/MWh' or 95 percent reduction' Reconstruction: 1 .4 pounds/MWh' or 0 .15 pounds/MMBtu' or 95 percent reduction Modification: 1 .4 pounds/MWh' or 0.15 pounds/MMBtu'

or 90 percent reduction'

The adopted maximum allowable emission rates are also more stringent than NSPS for sources that were constructed, reconstructed or modified starting August 18, 1971 through September 18, 1978, and not subsequently reconstructed or modified. The Federal regulation at 40 CFR 60.40 requires an emission limit of 0.70 pounds/MMBtu for coalfired boilers, 0.30 pounds/MMBtu for oil-fired boilers and 0.20 pounds/MMBtu for gas-fired boilers. As explained earlier in this adoption, to convert pounds/MMBtu to pounds/MWh, the Department uses a generic heat rate of 10,000 British thermal units per kilowatt hour (Btu/KWh) . The adopted maximum allowable emission rates are also more stringent than NSPS for sources that were constructed, reconstructed or NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N .J .R 1803)ENVIRONMENTAL PROTECTION

modified starting September 19, 1978 through July 9, 1997 . The Federal rule at 40 CFR 60.40Da requires an emission limit of 0.50 to 0.60 pounds/MMBtu, based on a 30-calendar-day rolling average, along with a 65 percent NO, ; reduction for coal-fired boilers; 0.30 pounds/MMBtu, based on a 30-calendar-day rolling average, along with a 30 percent NO, reduction for oil-fired boilers; and 0.20 pounds/MMBtu, based on a 30- calendar-day rolling average, along with a 25 percent NO, reduction for gas-fired boilers. The adopted maximumemission rates are also more stringent than NSPS for coal-fired, No. 2 fuel oil-fired, lighter than No. 2 fuel oil-fired, or gas-fired boilers that were constructed starting July 10, 1997 through February 28, 2005. The Federal rule at 40 CFR 60.40Da requires an emission limit of 1 .6 pounds/MWh, based on a 30-calendar-day rolling average, for these sources. The adopted maximum emission rates are also more stringent than NSPS for boilers that combust No. 2 fuel oil, lighter than No. 2 fuel oil, or gas that were reconstructed starting July 10, 1997 through February 28, 2005. The adopted maximum emission rates are

Oil : 0.30 pounds/MMBtu Table 8 Comparison of Federal MaximumAllowable NOx Emission Rates and Adopted Maximum Allowable NO, Emission Rates for Boilers Date Source Was Constructed Reconstructed Starting 8/18/71 or Modified Prior to 8/18/71 through 9/18/78

No Applicable 40 CFR 60.40 NSPS Federal Rules Subpart D Coal : 0.70 pounds/MMBtu

None

Adopted Emission Rates Gas: 0.20 pounds/MMBtu also more stringent than NSPS for boilers that combust coal, No. 2 fuel oil, lighter than No. 2 fuel oil, or gas that were modified starting July 10, 1997 through February 28, 2005. The adopted maximumemission rates are also more stringent than NSPS (40 CFR 60.42Da) for boilers that combust No. 2 and lighter fuel oil or that combust gas that are modified after February 28, 2005. However, if the construction, reconstruction or modification of the boiler triggers the Federal PSD rule at 40 CFR 52.21, PSD regulations will require the installation of BACT on the boiler, which would be capable of achieving the adopted maximumemission rates. Therefore, the adopted maximum emission rates are not more stringent than Federal regulations for a new, reconstructed or modified coal-fired boiler that is subject to PSD

. Table 8 belowcompares the NO, emission rates imposed by Federal NSPS regulations with the adopted NO emission rates as applicable to boilers thatwere constructed, reconstructed or modified at various times,

Starting 9/19/78 through

7/9/97 40 CFR 60.40Da NSPS Subpart Da Coal : 0.50-0.60 pounds/MMBtu' and 65 percent reduction Oil : 0.30 pounds/MMBtu' and 30 percent reduction Starting 7/10/97 Through 2/28/05 40 CFR 60.40Da NSPS Subpart Da Construction: 1 .6 pounds/MWh' Reconstruction: 0.15 pounds/MMBtuI After 2/28/05 40 CFR 60.401)a NSPS Subpart Da Construction: 1 .0 pound/MWh'

Gas: 0.20 pounds/MMBtu' and 25 percent reduction Modification: 1 .4 pounds/MWh' or 0.15 pounds/MMBtu` Coal : 1 .50 pounds/MWh2,1 Heavier than No. 2 Oil : 2.00 pounds/MWh3' s No . 2 and lighter Oil : 1 .00 pound/MWh3'5 Gas : 1 .00 pound /MWh4, s ' 30-day rolling average basis Z 1 .50 pounds/MWh is based on 0.15 pounds/MMBtu 3 2.00 pounds/MWh is based on 0.20 pounds/MMBtu ° 1 .00 pound/MWh is based on 0 .10 pounds/MMBtu Or as specified in a permit ifa more stringent limit is imposed due to SOTAor PSDapplicability The adopted new rules and amendments are needed to fulfill a requirement, imposed by EPA pursuant to the Federal Clean Air Act, 42 U.S.C. §§7401 et seq., that New Jersey adopt sufficient control measures to attain the Federal 1997 eight-hour NAAQS for ozone and the Federal 1997 annual NAAQS for PM2 .5. Therefore, adoption of these newrules and amendments is necessary for the State to comply with Federal air quality requirements. The Department's estimated emission reductions are based on particulate, SOz and NO, inventory emissions and the control efficiencies of the reasonably available control technologies . The Department has determined that the control technologies are technologically feasible, based on several sources that have already installed, or are in the process of installing control apparatus that will bring the units into compliance with the adopted maximumemission rates. The emission reductions from these adopted rules and amendments are expected to be approximately 2,571 tpy (7.04 tpd) of S02 emission reductions and 788 tpy (2.16 tpd) of NO, emission reductions by 2013 . The adopted maximumallowable emission rates are already being complied with by some of the affected boilers in NewJersey and are required to be complied with by other boilers by the ACD and ACO . The adopted rules would ensure that all coal-fired power plants in New Jersey install up-to-date air pollution controls. The adopted newrules and amendments will primarily affect unit 6/8 at the Conectiv Deepwater Generating Station, which will have to install an SOZ control apparatus, such as a scrubber, and install a NO, control apparatus, such as a Selective Catalytic Reduction (SCR) system . There is only one boiler serving an EGU in the State that is not an HEDD unit and that does not combust coal . Instead, it combusts kerosene and natural gas. This boiler currently complies with the adopted maximumallowable NO, emission rate, and therefore would not be impacted by the adopted amendments . As discussed in more detail in the Economic Impact (40 N .J .R . at 4423) the adopted amendment to the maximum allowable emission rate for particles is not expected to have an economic impact, the estimated cost-effectiveness of S02 emission reductions is expected to be less than (CITE 41 N.J .R

. 1804) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS

$4,800 per ton of SOz reductions in 2007 dollars, and the estimated costeffectiveness of NO, emission reductions is expected to be less than $1,250 per ton of NO, ; reductions in 2007 dollars. Control costs are likely to be passed on to the consumer in the form of somewhat higher electricity generating rates. Companies that design, build and install these emission control systems could benefit from the adopted amendments as they will experience an increase in demand for their products and services. The Department anticipates the benefits of the adopted newrules and amendments to be an increase in the quality of life and protection of human health, the environment and agriculture. The Department expects the adopted newrules and amendments to have a significant positive environmental impact . The primary environmental benefit will be a reduction in the emission of NO, emissions, which are precursor emissions that lead to the formation of ground level ozone. See the Social, Environmental and Agriculture Industry Impact statements for an explanation of the health, environmental and agriculture impacts, respectively, of ground level ozone . The Department also expects the adopted rules to significantly reduce emissions of SO2. The Department is adopting these newrules and amendments to meet EPA air quality standards . Failure to achieve these air quality standards could subject NewJersey to economic sanctions, which would adversely affect all businesses and taxpayers in the State. In adopting these amendments and new rules the Department has balanced the need to protect the environment and public health and to comply with the EPA requirements against any economic impacts of the rule. Based on similar sources that currently meet these requirements and similar sources that have committed to meet these requirements, the Department has determined that these amendments are achievable with currently available technology and are cost-effective. By setting maximum emission standards for all New Jersey electrical generating units, the Department will set a precedent for other states to do the same. The Department has determined that establishing these adopted emission standards, even though more stringent than the Federal rules, is necessary in order to attain air quality standards and to protect the environment and public health. High Electric Demand Day (HEDD) Units The Department has performed a comparison of adopted N.J .A.C. 7:27-19 with analogous Federal regulations, namely NSPS. HEDDBoilers Based on its reviewof these Federal regulations for boilers (40 CFR 60.40 and 60.40Da), the Department has determined that the adopted new rules and amendments exceed many of the standards or requirements imposed by the Federal regulations. Standards of Performance for Fossil Fuel Fired Steam Generators for which construction is commenced after August 17, 1971 (40 CFR 60.40 - Subpart D) do not apply to boilers that were constructed on or before August 17, 1971 and not modified or reconstructed since that time, and, therefore, Subpart D does not impose any maximumallowable NO, ; emission rate on these sources. Similarly, Standards of Performance for Electric Utility Steam Generating Units for which construction is commenced after September 18, 1978 (40 CFR 60.40Da - Subpart Da) do not apply to boilers that were constructed on or before September 18, 1978 and not modified or ENVIRONMENTAL PROTECTION reconstructed since. Therefore, Subpart Da does not impose any maximumallowable NO . emission rate on these sources. However, the adopted newrules and amendments will require all HEDD units which are boilers serving electric generating units to comply with the adopted maximumallowable NO, emission rates, regardless of installation date and whether or not the source has been modified or reconstructed. The Department's adopted new rules and amendments require a maximum

allowable NO, emission rate of 2.00 pounds/MWh for heavier than No. 2 fuel oil-fired boilers, 1 .00 pound/MWh for No. 2 and lighter fuel oil-fired boilers and 1 .00 pound/MWb for gas-fired boilers. These maximumallowable emission rates are more stringent than NSPS for boilers that were installed prior to August 17, 1971 because neither 40 CFR 60.40 nor 40 CFR 60 .40Da apply to these boilers. The adopted maximum allowable emission rates are also more stringent than NSPS for boilers that were constructed, reconstructed or modified Starting August 18, 1971 through September 18, 1978 and not reconstructed or modified thereafter. The Federal rule at 40 CFR 60 .40 requires an emission limit of 0.30 pounds/MMBtu for oil-fired boilers and 0.20 pounds/MMBtu for gas-fired boilers. The adopted maximum allowable NO

. emission rates are also more stringent than NSPS for boilers that were constructed or reconstructed starting September 19, 1978 through July 9, 1997; and for boilers that were modified starting September 19, 1978 through February 28, 2005 and not reconstructed or modified thereafter . The Federal rule at 40 CFR 60.40Da requires an emission limit of 0.30 pounds/MMBtu, based on a 30-calendar-day rolling average, along with a 30 percent NO, reduction for oil-fired boilers ; and 0.20 pounds/MMBtu, based on a 30-calendar-day rolling average, along with a 25 percent NO, reduction for gas-fired boilers. The adopted maximumallowable NO . emission rates are also more stringent than NSPS for No. 2 fuel oil-fired or gas-fired boilers that were installed starting July 10, 1997 through February 28, 2005 and not reconstructed or modified thereafter. The Federal rule at 40 CFR 60.40Da requires an emission limit of 1 .6 pounds/MWh, based on 30-calendar-day rolling average, for these boilers. The adopted NO, ; emission rates are more stringent than the Federal rule emission rates for No, 2 fuel oil-fired or gas-fired boilers that were reconstructed starting July 10, 1997 through February 28, 2005 and not reconstructed or modified thereafter . The Federal rule at 40 CFR 60.40Da requires an emission limit of 0.15 pounds/MMBtu, based on a 30-calendar-day rolling average, for these boilers. For sources that are modified after February 28, 2005, 40 CFR 60.42Da requires 1 .4 pounds/MWhr or 0.15 pounds/MMBtu, based on a 30-calendar-day rolling average, which is less stringent than the adopted maximum

allowable NO, ; emission rate for No.2 and lighter fuel oil or for gas. However, if the construction, reconstruction or modification of the source triggers the Federal Prevention of Significant Deterioration (PSD) rule at 40 CFR 52.21, PSD regulations will require the installation of best available control technology (BACT) on the source, which would be capable of achieving the adopted maximumallowable NO, emission rates. Table 9 belowcompares the NO . emission limits imposed by Federal NSPS regulations with the Department's adopted maximumallowable NO, emission rates as applicable to boilers that were constructed, reconstructed or modified at various times. TABLE 9 Comparison of Federal NO . Emission Limits and Adopted Maximum

Allowable NO, Emission Rates for Boilers Date Source Was Constructed Reconstructed Starting 8/18/71 or Modified Prior to 8/18/71 through 9/18/78 No Applicable 40 CFR 60.40 NSPS Federal Rules Subpart D Starting 9/19/78 Starting 7/10/97 through 7/9/97 Through 2/28/05 After 2/28/05 40 CFR 60.40Da 40 CFR 60 .401)a 40 CFR 60.401)a NSPS Subpart Da NSPS Subpart Da NSPS Subpart Da

NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N .J .R. 1805)ENVIRONMENTAL PROTECTION

None

Adopted Emission Rates

' 30-day rolling average basis Z 2.00 pounds/MWh is based on 0.20 pounds/MMBtu 3 1 .00 pound/MWh is based on 0.10 pounds/MMBtu Effective on and after the Operative Date ofAdopted Amendments Heavier than No. 2 Oil : 2.00 pounds/MWh2 No . 2 and lighter Oil : 1 .00 pound/MWh3 Gas: 1 .00 pound/MWh3

HEDD Turbines Based on its review of the Federal regulations for turbines (40 CFR 60 .330 and 60.4300), the Department has determined that the adopted newrules and amendments exceed many of the standards or requirements imposed by the Federal regulations. Standards of Performance for stationary gas turbines (40 CFR 60 .330 - Subpart GG) do not apply to turbines that were constructed on or before October 3, 1977 and not modified or reconstructed since and therefore do not impose any emission limit for NO, ; on these sources. Similarly, Standards of Performance for stationary combustion turbines (40 CFR 60.4300 - Subpart KKKK) do not apply to turbines that were constructed on or before February 18, 2005 and not modified or reconstructed since. The Federal rules do not impose any emission limit for NO . on these sources . Also, Subparts GG and KKKKdo not regulate turbines that have a heat input of less than 10 MMBtu/hr . However, the adopted newrules and amendments require all turbines to comply with the adopted maximum allowable NOx emission rates, regardless of installation date and whether or not the source has been modified or reconstructed. The Department's adopted newrules and amendments require that on and after May 1, 2015, all HEDD turbines comply with the following maximumallowable NO, ; emission rates: 0.75 pounds/MWh for gas-fired combined cycle turbines ; 1 .20 pounds/MWh for oil-fired combined cycle turbines; 1 .00 pound/MWh for gas-fired simple cycle turbines ; and 1 .60 pounds/MWh for oil-fired simple cycle turbines. The adopted maximum allowable NO, emission rates are more stringent than NSPS for turbines that were installed prior to October 3, 1977, because neither 40 CFR 60.330 nor 40 CFR 60.4300 applies to these turbines. It is difficult to determine whether the adopted maximumallowable NO, ; emission rates are more stringent than NSPS emission limits for turbines that were constructed, reconstructed or modified after October 3, 1977, but on or before February 18, 2005 and not reconstructed or modified since. The Federal rule at 40 CFR part 60, subpart KKKK does not apply to these turbines, and the 40 CFR part 60, subpart GG applicable NO, ; emission limit is dependent on the manufacturer's rated heat input for the specific turbine. Therefore, there is no general emission limit that can be used for comparison with the adopted maximum allowable NO, emission rates. All turbines with a heat input greater than 10 MMBtu/hr that are constructed, reconstructed or modified after February 18, 2005 are subject to subpart KKKK. or 0.15 pounds/MMB

The adopted standards for simple cycle and combined cycle gas-fired turbines with a heat input equal to or greater than 10 MMBtu/hr and less than or equal to 50 MMBtu/hr that are constructed after February I8; 2005 are more stringent than the Federal rule at 40 CFR 60.4300, which establishes an emission limit of 2.3 pounds/MWh for these turbines. The adopted standards for both simple cycle and combined cycle gas-fired turbines with a heat input greater than 50 MMBtu/hr and less than or equal to 850 MMBtu/hr that are constructed, reconstructed or modified are more stringent than the Federal standards at 40 CFR 60.4300, which established an emission limit of 1 .2 pounds/MWh for such turbines that are constructed, and an emission limit of 2.0 pounds/MWh for such turbines that are reconstructed or modified. The adopted standards for both simple cycle and combined cycle oil-fired turbines with a heat input equal to or greater than 10 MMBtu/hr and less than or equal to 50 MMBtu/hr that are constructed, reconstructed or modified are, likewise, more stringent than the Federal standards at 40 CFR 60.4300, which establish an emission limit of 5.5 pounds/MWh for constructed turbines, and an emission limit of 8.7 pounds/MWh for reconstructed or modified turbines. The adopted rules for both simple cycle and combined cycle oil-fired turbines with a heat input greater than 50 MMBtu/hr and less than or equal to 850 MMBtu/hr that are constructed, reconstructed or modified are more stringent than the Federal standards at 40 CFR 60.4300, which require an emission limit of 3 .6 pounds/MWh for constructed turbines, and an emission limit of 4.7 pounds/MWh for reconstructed or modified turbines. The adopted rules for simple cycle and combined cycle oil-fired turbines with a heat input greater than 850 MMBtu/hr that are constructed, reconstructed or modified are more stringent than the Federal rules at 40 CFR 60.4300, which require an emission limit of 1 .3 pounds/MWh for these turbines. Additionally, if the construction, reconstruction or modification of the source triggers Federal PSD reviewunder 40 CFR 52.21, the source will be required to install the best available control technology (BACT) capable of achieving the adopted maximumallowable NOx emission rate. Table 10 below shows the NO, emission limits that are imposed by Federal NSPS regulations and the Department's adopted maximum allowable NO, emission rates as applicable to sources that were constructed, reconstructed or modified at various times. TABLE 10 Comparison of Federal NOa Emission Limits and Adopted Maximum

Allowable NOx Emission Rates for Turbines On or before 10/3/77 Starting 10/4/77 throug h 2/18/05 Oil : 0.30 pounds/ MMBtu Gas: 0.20 pounds/ MMBtu oil : 0.30 pounds/MMBtu' and 30 percent reduction Gas: 0.20 pounds/MMBtu' and 25 percent reduction Construction : 1 .0 pound/IviW]1'

. ._

` Reconstruction: 1 .0 pound/MWhl or 0.11 pounds/MMBtu' Construction : 1 .6 pounds/MWh' Reconstruction: 0.15 pounds/MMBtu' Modification : 1 .4 pounds/MWh'

After 2/18/05

(CITE 41 N

.J .R 1806) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS

Federal Regulations for All Simple and Combined Cycle Turbines with Heat Input > 10 MMBtu No applicable Federal rules NSPS Subpart GG Dependant on

manufacturer's rated heat input ENVIRONMENTAL PROTECTION NSPS Subpart KKKK Gas: Construction: <_ 50 MMBtu/hr : 2.3 pounds/MWh or 42 ppm >50 and <_ 850 MMBtu/hr : 1 .2 pounds/MWh or 25 ppm >850 MMBtu/hr : 0.43 pounds/MWh or 15 ppm Reconstruction: >50 and <_ 850 MMBtu/hr : 2 .0 pounds/MWh or 42 ppm >850 MMBtu/hr : 0.43 pounds/MWh or 15 ppm Modification: >50 and :5 850 MMBtu/hr : 2.0 pounds/MWh or 42 ppm >850 MMBtu/hr: 0.43 pounds/MWh or 15 ppm Oil :

Construction : <_ 50 MMBtu/hr: 5 .5 pounds/MWh or 96 ppm >50and <_ 850 MMBtu/hr: 3.6 pounds/MWh or 74 ppm >850 MMBtu/hr: 1 .3 pounds/MWh or 42 ppm Reconstruction: <_ 50 MMBtu/hr: 8.7 pounds/MWh or 150 ppm >50and _< 850 MMBtu/hr: 4.7 pounds/MWh or 96 ppm >850 MMBtu/hr : 1 .3 pounds/MWh or 42 ppm Modification: _< 50 MMBtu/hr: 8.7 pounds/MWh or 150 ppm >50 and <_ 850 MMBtu/hr: 4.7 pound/MWh or 96 ppm >850 MMBtu/hr : 1 .3 pound/MWh or 42 Adopted Emission Rates (non-HEDD Turbines of any Heat Input) Adopted Emission Rates (HEDD Turbines of any Heat Input) Effective on and after *[one day after the operative date ofthese amendments]* *May 20, 2009* Combined Cycle (Gas) : 1 .3 pounds/MWh Combined Cycle (Oil) : 2.0 pounds/MWh Simple Cycle (Gas) : 2.2 pounds/MWh Simple Cycle (Oil) : 3 .0 pounds/MWh Effective on and after May l, 2015 Combined Cycle (Gas) : 0.75 pounds/MWh' Combined Cycle (Oil) : 1 .20 pounds/MWh' Simple Cycle (Gas) : 1 .00 pound/MWh' Simple Cycle (Oil) : 1 .60 pounds/MWh' ppm

'Gas rates based on 25 ppm ; Oil rates based on 42 ppm ; Simple cycle rates based on 35 percent efficiency; Combined cycle rates based on 46 percent efficiency. The adopted new rules and amendments require each owner or operator of a HEDD unit (turbine or boiler) to submit a 2015 HEDD Emission Limit Achievement Plan (2015 Plan) to the Department by May 1, 2010, and an annual update on the progress in achieving the 2015 Plan. The purpose ofthe 2015 Plan is to ensure that the owner or operator has a preliminary plan for achieving compliance for each HEDD unit by 2015. The purpose of the annual update is to allow the Department to monitor the progress of the owner or operator in implementing the 2015 Plan and to provide an opportunity for the owner or operator to revise the 2015 Plan. There is no Federal regulation with a similar requirement ; therefore, this part of the adopted rules is more stringent than the Federal requirements . Due to the large number of HEDD units that will be affected by the adopted amendments, the Department has allowed a substantial period of time for these HEDD units to comply with the adopted limits. The Department expects that each owner or operator will be planning for compliance with the 2015 maximum allowable NO, emission rates. The Department, through the adopted rules, is requiring the owner or operator to share the plan and the status of implementing it with the Department periodically, in order to keep the lines of communications open between the owner or operator and the Department . In this way, the parties can address potential issues early in the process and not delay compliance. Finally, the adopted new rules and amendments require each of the three major owners or operators of HEDD units to reduce NO, emissions on high electric demand days during the interim period. The owners or operators may obtain these NO . emission reductions fromany source that is approved by the Department. The adopted newrules and amendments suggest some emission reduction strategies (N .J .A.C. 7:27-19.29(d)2) . The adopted newrules and amendments do not require the reductions to come fromany specific source, nor do they require any specific source to meet a given emission limit . There is no similar Federal regulation. The adopted new rules and amendments are needed to fulfill a requirement, imposed by EPA pursuant to the Federal Clean Air Act, 42 U.S.C. §§7401 et seq., that New Jersey adopt sufficient control measures NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R .1807)ENVIRONMENTAL PROTECTION

to attain the Federal 1997 eight-hour NAAQS for ozone. Therefore, the adopted new

rules and amendments are necessary for the State to comply with Federal requirements . Technological feasibility of the adopted maximum allowable NO, emission rates is based on several sources that have already installed a control apparatus to bring the EGUs into compliance with the adopted NOx emission rates, or installed newsources that will comply with the adopted maximum allowable NO, emission rates. The NO, emission reductions fromthese adopted new rules and amendments are expected to be approximately 19.8 tons per high electric demand day by 2009, and 63.7 tons per high electric demand day by 2015. The adopted new rules and amendments would primarily affect electric generating companies that have boilers serving electric generating units or turbines that commenced operating prior to May 1, 2005, are capable of generating 15 MW or more of electrical power, and operated less than or equal to an average of 50 percent ofthe time during the 2005 through 2007 ozone seasons. Also potentially affected would be the companies that design, build and install these control apparatus systems and turbines, consumers of the power generated, and all people who live, work or travel in New Jersey. As discussed in more detail in the Economic Impact (40 N.J .R. at 4423) the estimated cost-effectiveness of emission reduction for the boilers is expected to be approximately $600.00 to $18,000 per ton of NO, emission reductions. The cost-effectiveness of installation of water injection on turbines is expected to be approximately $44,000 per ton of mostly ozone day NOx emission reductions, which is equivalent to approximately $4,400 per ton for calendar year NO, emission reductions. The estimated cost of replacing existing turbines is expected to be approximately $0.5 to $0.8 million per MW . The Department anticipates the adopted newrules and amendments will result in an increase in the quality of life and protection of human health, the environment and agriculture. The Department expects the adopted new rules and amendments to have a significant positive environmental impact. The primary environmental benefit will be a reduction in NO, emissions, which are precursor emissions that lead to the formation of ground level ozone. As discussed earlier, ground level ozone is breathed by people and animals and comes into contact with crops and other vegetation, as well as man made structures and surfaces. This exposure can cause a variety of adverse effects. It is estimated that these adopted new rules and amendments will result in an emission reduction of 19.8 tons per high electric demand day by 2009 and an emission reduction of 63.7 tons per high electric demand day by 2015. In addition to the environmental and health benefits, economic benefits, which are difficult to quantify, may also be realized. Owners and employees of businesses will enjoy the environmental, health and other social benefits of the new amendments. A reduction in air pollution will lead to healthier and more productive workers. Finally, the Department is adopting these newrules and amendments to meet EPA requirements. Failure to achieve these reductions could subject New

Jersey to economic sanctions, which would adversely affect all businesses and taxpayers in the State. ADOPTIONS ; In adopting these newrules and amendments the Department has, , balanced the need to protect the environment and public health and to comply with EPA requirements against any economic impacts of the . ;~ adopted new rules and amendments. Based on similar sources that ~' currently meet the adopted requirements, the Department has determined =~ that these adopted new rules and amendments are achievable undercurrent technology and are cost effective. The Department has :- determined that adopting the adopted newrules and amendments, even ` though more stringent than the Federal rules, is necessary in order to -= attain the Federal 1997 eight-hour NAAQS for ozone and to protect the : environment and public health. Industrial/Commercial/Institutional (ICI) Boilers or other Indirect Heat Exchangers The Department compared the adopted new rules and amendments at N .J .A .C. 7:27-19.7 to the NSPS at 40 CFR Part 60, and the Acid Rain NO, Emission Reduction Program, 40 CFR Part 76. The Department determined that the adopted new rules and amendments are more stringent than the Federal regulations for boilers greater than 100 MMBtu/hr firing liquid fuels. The purpose of the adopted new rules and amendments for the ICI boilers and other indirect heat exchangers source category is to help bring the State into attainment with the Federal 1997 eight-hour NAAQS for ozone. The Department investigated various source categories to determine where further NO, emission reductions can be achieved. The Department identified ICI boilers and other indirect heat exchangers as having a Statewide potential of reducing NOa emissions by nearly 1,000 tpy by 2011, assuming compliance is achieved by optimizing each boiler's combustion processes . This 2011 estimate would be lower if some small ICI boilers and other indirect heat exchangers comply by installing control devices because the adopted new rules and amendnients would allowan extra year to comply. The adopted new rules and amendments will affect industry, commercial operations, and institutions that own or operate boilers or other indirect heat exchangers that are equal to or greater than 25 MMBtu/hr rated heat input . Beginning on May 1, 2010 and phased-in over the next two years, allowing smaller units more time to comply, this source category must meet the adopted maximum allowable emission rates at adopted new

N.J .A.C. 7:27-19.7(i) Table 9. Adopted new Table 9 establishes emission rates for 10 categories based on heat input rate and fuel type. The Federal NSPS have not established emission rates for seven of these categories. The Department's adopted emission rates for the other three categories are more stringent than the Federal NSPS emission rates. These three categories are for fuel types natural gas only, No. 2 fuel oil, and other liquid fuels for ICI boilers or other indirect heat exchangers with a heat input rate of 100 MMBtu/hr or greater. Table 11 belowcompares by heat input and fuel type, the maximum allowable NOx emission rates adopted by NewJersey, existing in New Jersey prior to the adopted rates, recommended by the Ozone Transport Commission, and existing in the Federal NSPS regulations. TABLE 11 Maximum

Allowable NO, Emission Rates (in pounds per million BTU) for Industrial/Commercial/Institutional Boilers or other Indirect Heat Exchangers Fired by Gas or Liquid Fuels Heat Input Rate (MMBtu/hr) Fuel Tyne Adopted NJ Rates At least 25 but < Natural gas only 0 .05 100 No. 2 Fuel oil only 0 .08 Other gaseous fuels (except 0.20 refinery fuel gas) Other liquid fuels 0.20 Dual fuel using fuel oil and 0.12 natural gas 100or greater Natural gas only 0.10

No . 2 Fuel oil only 0.10 Other gaseous fuels (except 0.20 refinery fuel gas) NJ Rates Before OTC Recommended Federal NSPS Adopted NJ Rates Rates Rates

0.101 0.05 None 0 .12' 0.08 None 0 .20' NA None 0 .30' 0.20 None 0.12 NA None 0.10 0.10 0.10-0.20 0.20 0.20 0.30-0.40 0.20 NA None (CITE 41 N

.J .R 1808) NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009ADOPTIONS Other liquid fuels 0.20 Dual fuel using fuel oil and 0.20 natural gas ENVIRONMENTAL PROTECTION 0.20 0.20 0 .30-0 .40 0.20 to 0.43 0.20 No limits ` Existing rates apply to units between 50and 100 MMBtu/hr. There are no existing rates for units between 25 to less than 50 MMBtu/hr. As explained in the Economic Impact (40 N .J .R. at 4424), the costeffectiveness is expected to range from $600.00 to $18,000 per ton of NO, reduced with the typical cost effectiveness being less than $5,000 per ton. The Department examined the stack test results for 46 boilers in the three categories in which the Department proposes a more stringent standard than the Federal regulations . All the results were below the adopted more stringent emission rates. Therefore, the adopted more stringent rates are technologically feasible. The Department has determined that measures to reduce NO, emissions from ICI boilers and other indirect heat exchangers beyond those that are required by existing Federal regulations are necessary to achieve the Federal 1997 eight-hour NAAQS for ozone. The adopted new rules and amendments are more stringent than the EPA's requirements because the State's ozone air quality exceedance is higher than in most areas in the United States and in the Ozone Transport Region. Therefore, given the demonstrated success of achieving these rates, as explained in the Background (40 N .J .R . at 4399), and New

Jersey's need to reduce NO, emissions to protect public health, it is reasonable to require that all sources in these three categories meet the Department's adopted maximumallowable emission rates. Municipal Solid Waste (MSW) Incinerators The Department compared the adopted N .J .A .C. 7:27-19.12 newrules with the Federal NSPS at 40 CFR Part 60 Subpart Cb and finds that the adopted new

rules are more stringent than the Federal regulations. The purpose of the adopted newrules for MSW incinerators is to help bring the State into attainment with the Federal 8-hour NAAQS for ozone. The Department investigated various emission sources to determine where further NO, emission reductions can be achieved and concluded that MSW

incinerators is one of these source categories. The Department estimated that further control of NO, emissions from MSW incinerators would yield a Statewide NO, reduction of greater than 100 tpy by 2011 . These adopted rules would affect 13 MSW incinerators located at five facilities. Currently these facilities all comply with the Federal NSPS NO, emission standard of 205 ppm (at seven percent oxygen) on a daily average. Ten of the 13 units, located at four of the five facilities, have already installed selective non-catalytic reduction to control NO, emissions. The technology exists for optimizing the performance of these existing systems and achieving further NO, reductions. The Department expects that a maximum allowable NO, emission concentration of 150 ppmvd (at seven percent oxygen) is readily achievable, and expects that actual NO, emission concentrations will average 130 ppmvd. Achieving the adopted maximumallowable emission concentration of 150 ppmvd (at seven percent oxygen) will require the use and optimization of SNCR on each MSW incinerator . Only three of the existing 13 units in the State do not have a SNCRsysteminstalled. These three units are located at the Camden County Resource Recovery Facility. As explained in the Economic Impact (40 N .J .R . at 4424), the estimated capital cost to install an SNCR system on an MSWincinerator is approximately $1,500 per MMBtu/hr, and the estimated cost to operate an SNCR systemon an MSW incinerator is between $950.00 and $1,675 in 2006dollars. The primary health benefit will be through a reduction in the emission of NO, ; . The health and environmental benefits are explained in the Social Impact (40 N.J.R

. at 4420) and Environmental Impact (40 N .J .R . at 4427) . The Department has determined that these adopted measures to reduce NO, from MSW incinerators beyond that which is required by existing Federal rules and regulations are necessary to achieve the Federal 1997 eight-hour NAAQS for ozone needed to protect the health and quality oflife of New Jersey's citizens. VOC Stationary Storage Tanks The Department performed a comparison of the adopted rules and amendments to N.J .A .C. 7:27-16.2 to analogous Federal regulations, namely, 40 CFR 60.110b to 60.117b, New Source Performance Standards (NSPS) for VOC Storage Tanks for which construction, reconstruction or modification commenced after July 23, 1984 . These Federal regulations were promulgated pursuant to the Federal Clean Air Act and set forth the substantive Federal standards . Based on its review of Federal regulations, the Department has determined that the adopted rules and amendments are more stringent than the Federal regulations. Based on the research and surveys done by BAAQMD, SCAQMD, SJWAPCD and TCEQ, the Department has determined that the adopted newrules and amendments are achievable using current technology and are cost effective. The Department identified control measures based on the Department's VOC emissions inventory, disclosures of previously unreported roof landing emissions, potential emission reductions achievable, and technological feasibility of the adopted measures based on research and surveys conducted by TCEQ, BAAQMD, SCAQMD, and SJVUAPCD

. The adopted newrules and amendments for storage tanks would primarily affect refineries, terminals, and pipeline companies that produce, store, and transport gasoline. In order to comply with the rules, as explained in the proposal Summary (40 N .J .R. at 4404-4408), those facilities will have to retrofit their tanks with upgraded deck fittings and seals, change work practices, and/or install controls for floating roof landings . Potentially affected are businesses that supply equipment to these facilities, market and distribute the products ofthese facilities, and consumers. As explained in the Social Impact (40 N.J.R . at 4420-4421) and Environmental Impact (40 N .J .R . at 4427), the Department anticipates the benefits of the adopted rules and amendments to be an increase in the quality of life and protection of human health, the environment and agriculture. The primary environmental benefit will be a reduction in the emission of VOCs, which are precursor emissions that lead to the formation of ground-level ozone, exposure to which can cause a variety of adverse effects. The adopted new rules and amendments are also expected to reduce emissions of hazardous air pollutants and toxic substances. The Department estimates that the adopted newrules and amendments will achieve a 2,000-ton VOC emissions reduction by 2019, beyond the current Federal rules. This equates to a VOC emission reduction ofapproximately 6.5 tpd by 2019 . As discussed in more detail in the Economic Impact (40 N.J.R . at 4424-4425), the Department's estimated cost-effectiveness of emission reduction ranges from $3,000 to $29,000 per ton of VOC reduced, there may be less than a one-cent per gallon increase in gasoline prices at the pump, distributors and retailers may be impacted, and the industry's annualized compliance cost-effectiveness would be a maximum of $58,000,000 for 2,000 tons per year of VOC reductions in 2019. Economic benefits may also be realized. Owners and employees of businesses will enjoy the environmental, health, and other social benefits of the adopted newrules and amendments. A reduction in air pollution will lead to healthier and more productive workers. The adopted new rules and amendments are needed to fulfill a requirement, imposed by EPA pursuant to the Federal Clean Air Act, 42 U.S.C. §§7401 et seq., that New Jersey adopt sufficient control measures to address additional VOC (ozone precursor) emission reductions identified by EPA as being needed for New Jersey to attain the eight-hour ozone standard. Therefore, adoption of these new rules and amendments are necessary for the State to comply with Federal requirements . Failure to achieve these reductions could subject NewJersey to economic sanctions, which would adversely affect all businesses and taxpayers in the State. In adopting these new rules and amendments, the Department has balanced the need to protect the environment and the public health and to NEW JERSEY REGISTER, MONDAY, APRIL 20, 2009 (CITE 41 N.J .R . 1809)