SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix E: Addendum December 15, 2011

E - 1 Final Staff Report with Appendices for

Revised Proposed Amendments to Rule 4402 

## APPENDIX E

Addendum

December 15, 2011SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix E: Addendum December 15, 2011

E - 2 Final Staff Report with Appendices for

Revised Proposed Amendments to Rule 4402 This page intentionally blank.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix E: Addendum December 15, 2011

E - 3 Final Staff Report with Appendices for

Revised Proposed Amendments to Rule 4402 Replacement Tanks

District staff performed a cost effectiveness analy sis of replacing a sump with a tank system to determine whether or not is it a cost eff ective option. Historically, when an operator has been required to cover a sump they res pond by replacing the sump with a tank system. Conversations with affected sources, industry representatives, and vendors have confirmed that operators will continue to respond in this manner in the future. The Air Resources Board (ARB) further supp orts this in the technical support document (TSD) by stating “We believe that a fixed- roof tank operated at a constant liquid level is the logical choice for sump replace ment.”(TSD 1 , p51)

Under two scenarios, District staff performed cost effectiveness analyses for replacing a sump with 1) a closed roof tank system with a PV ve nt and 2) a closed roof tank system with vapor controls. District staff determined cos ts for the analyses using a combination of data from the District permit database, informat ion provided in the ARB TSD, and information provided by affected sources, manufactu rers, and vendors.

The production of crude oil is a complex, continuou s process that involves numerous equipment located in various locations throughout a plot which requires the use and availability of sumps, or tanks, at all times to ha ndle or process the incoming oil and water. To ensure continuous operations, facilities have installed redundant systems

that handle situations of unforseen breakdowns and/ or periodic cleaning and maintenance. If an operator is forced to halt prod uction, the consequences may cost millions of dollars in analysis, drilling of new we lls, and moving and/or rebuilding of infrastructure if they are unable to resume oil pro duction.

Representatives from the Environmental Protection A gency (EPA), ARB, and the District toured two oil production facilities in th e Valley together; by District standards, one facility is considered a small producer and the other facility is a large producer. Operators at both facilities confirmed this necessi ty of redundant systems at their facilities and the consequences of not having it. The facilities toured implemented redundant systems unique to each operation. For th e large producer, each process point (i.e. storage tanks, reject tanks, surge tank s, LACT tanks, Wemcos, etc.) all had duplicative tanks that allowed the facility to cont inue operation while cleaning/repairing a unit. Similarly, the small producer also implement ed redundant systems in their processes and ensuring continuous operation by util izing their equipment to serve multiple purposes.

To analyze the cost of replacing a sump with a tank system, District staff determined that each sump would be required to be replaced wit h at least two tanks of equivalent capacity to account for the required redundancy nec essary for clean-up and maintenance of each tank. Clean-up and maintenance of tanks is a new operating

1 ARB TSD for the Suggested Control Measure of the Control of Organic Compound Emissions from Sumps Used in Oil Production OperationsSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix E: Addendum December 15, 2011

E - 4 Final Staff Report with Appendices for

Revised Proposed Amendments to Rule 4402 procedure that operators would incur after replacin g a sump with a tank system, because operators do not need to clean and maintain the sumps on a frequent or regular basis.

Based on the discussion above, the installation of two tanks is a valid and necessary cost for the replacement of an existing sump. For a detailed discussion of the cost effectiveness of replacing sumps with tanks please refer to the Appendix B of the final draft staff report for revised proposed amendments to District Rule 4402.