DATE: December 15, 2011 

TO: SJVUAPCD Governing Boar 

Z IN HEALTHY AIR LIVING' 

San Joaquin Valley 

AIR POLLUTION CONTROL DISTRICT 

GOVERNING BOARD 

J. Steven Worth ley, Chair 

Supervisor, Tulare County 

Ann Johnston, Vice Chair 

Mayor, City of Stockton 

Tony Barba 

Supervisor, Kings County 

Judith G. Case 

Supervisor, Fresno County 

Ronn Dominici 

Supervisor, Madera County 

Henry Jay Forman, Ph.D. 

Appointed by Governor 

Randy Miller 

Mayor, City of Taft 

William O'Brien 

Supervisor, Stamsloos County 

Leroy OrneIlas 

Supervisor, San Joaquin County 

Alexander C. Sharriffs, M.D. 

Appointed by Governor 

Chris Vierra 

Mayor, City of Ceres 

Hub Walsh 

Supervisor, Merced County 

Raymond A. Watson 

Supervisor, Kern County 

Vacant 

Small City Representative, Kings County 

Vacant 

Large City Representative, Tulare County 

Seyed Sadredin 

Executive Director 

Air Pollution Control Officer 

Northern Region Office 

4800 Enterprise Way 

Modesto, CA 95356-8718 

1209)557-6400 • FAX 1209)557-6475 

Central Region Office 

1990 East Gettysburg Avenue 

Fresno, CA 93726-0244 

1559) 230-6000 • FAX 15591 230-6061 

Southern Region Office 

34946 Flyover Court 

Bakersfield, CA 93308.9725 

(6611392-5500 • FAX 8611392-5585 

FROM: Seyed Sadredin, Executive DirectorAPCO 

Project Coordinator: Errol Villegas 

RE: ADOPT PROPOSED AMENDMENTS TO RULE 4402 

(CRUDE OIL PRODUCTION SUMPS) 

RECOMMENDATION: 

1 Adopt Revised Proposed Amendments to Rule 4402 (Crude Oil 

Production Sumps). 

2 Authorize the Chair to sign the attached Resolution. 

BACKGROUND: 

Rule 4402 (Crude Oil Production Sumps) limits volatile organic 

compound (VOC) emissions from sumps, pits, and ponds at facilities 

that produce, gather, separate, process, and/or store crude oil in an oil 

field. This rule was last amended in December 1992, as a part of the 

District rule numbering effort. The amended rule was submitted to the 

United States Environmental Protection Agency (EPA) as a revision to 

the State Implementation Plan (SIP) in 2006. 

The EPA evaluated the amended rule and determined that while the 

rule largely meets Clean Air Act requirements, several issues needed 

to be further evaluated to ensure the rule fully satisfies the 

requirements of the Act for reasonably available control technology or 

RACT. The District has conducted a thorough analysis and is 

proposing amendments that are expected to result in full EPA 

approval of Rule 4402. The proposed amendments will explicitly 

prohibit the use of first stage sumps, clarify requirements, update test 

methods, and add record keeping requirements. District staff have 

determined that the amendments will not achieve significant emissions 

reductions or have a significant impact on affected sources since the 

District has existing requirements in place that affect these sources. 

www.vaileyairorg 
SJVUAPCD Governing Board 

ADOPT REVISED PROPOSED AMENDMENTS TO RULE 4402 (CRUDE OIL PRODUCTION SUMPS) 

December 15, 2011 

These existing requirements, including the existing rule, New Source Review permitting, 

and the District's risk management requirements, have already eliminated or reduced the 

majority of emissions from this source. Rather than looking at these requirements 

collectively as a demonstration that Valley sources meet Clean Air Act requirements, the 

Act still requires each rule to specifically contain the FtACT limits. Although no significant 

reductions in actual emissions will be achieved, the proposed amendments will satisfy 

these administrative requirements. 

This rule addresses VOC emissions from a source category that is relatively small. 

VOC emissions reductions are generally far less important to the Valley's long-term 

attainment goals than are oxides of nitrogen (N0x) emissions reductions. As such, the 

Valley's attainment strategies generally emphasize NOx reductions. The District will 

continue to seek as much VOC reductions as expeditiously practical, technologically 

feasible, and as economically reasonable as determined by the Governing Board. 

DISCUSSION: 

EPA reviewed Rule 4402 to evaluate compliance with RACT requirements of Clean Air 

Act (CAA) §182(b)(2) and with the CAA §110(a)(2)(A) requirement for enforceability. 

EPA finalized a limited approval of Rule 4402 effective on August 8, 2011 with a 

technical support document (TSD) outlining their evaluation of the rule. In the Federal 

Register and TSD, EPA suggested staff evaluate rule requirements, exemptions, and test 

methods to determine if they are still appropriate and applicable for this source category. 

EPA also suggested the District prohibit first stage sumps and add additional 

recordkeeping requirements for facilities to justify claimed exemptions. District staff 

performed extensive evaluations of various aspects of the rule to determine if each section 

meets RACT requirements, as discussed in the final draft staff report. Overall, the 

District's evaluation has concluded that the existing rule currently satisfies RACT 

requirements. However, the District proposes a number of amendments to enhance the 

existing rule. 

The proposed rule was made available to the public 30 days prior to this public hearing. 

Based on feedback and further review of rule language, the District has made several 

minor revisions to the proposed rule that do not impact the applicability or requirements 

of the rule. 

Summary of Proposed Amendments to Rule 4402 

District staff proposes to simplify and clarify rule requirements by removing some 

language from the applicability section, adding six definitions, and deleting Section 7.0 

(Compliance Schedule) from the rule. 

District staff proposes the following amendments, effective on and after January 1, 

2013: 

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SJVUAPCD Governing Board 

ADOPT REVISED PROPOSED AMENDMENTS TO RULE 4402 (CRUDE 0/L PRODUCT/ON SUMPS) 

December 15, 2011 

• Time limits for use of emergency pits 

• Prohibition of first stage sumps 

• Recordkeeping requirements to verify qualification for exemptions 

• Updated test methods for clean produced water 

These proposed amendments would allow EPA to approve Rule 4402 as RACT. 

Emission Reduction Analysis 

Significant additional emission reductions from the proposed amendments are not 

anticipated since most facilities are already complying with the proposed VOC emission 

limits or can make minor operating or administrative changes to be in compliance. 

Cost Effectiveness Analysis 

Pursuant to California Health & Safety Code Section (CH&SC) 40920.6(a), the District is 

required to analyze the cost effectiveness of new rules or rule amendments that 

implement Best Available Retrofit Control Technology (BARCT) or planning 

requirements to incorporate all feasible measures. The proposed amendments to this 

rule would only add federal RACT requirements but not BARCT or all feasible 

measures, and are therefore not subject to the cost effectiveness analysis mandate. 

Given that operators are generally complying with the new limits currently and there are 

no significant emission reductions or compliance costs expected from these rule 

changes, a cost effectiveness analysis has not been performed. 

Socioeconomic Analysis 

Pursuant to CH&SC 40728.5(a), "Whenever a district intends to propose the adoption, 

amendment, or repeal of a rule or regulation that will significantly affect air quality or 

emissions limitations, that agency shall, to the extent data are available, perform an 

assessment of the socioeconomic impacts of the adoption, amendment, or repeal of the 

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

any rule or regulation that results in any less restrictive emissions limit if the action does 

not interfere with the district's adopted plan to attain ambient air quality standards, or 

does not result in any significant increase in emissions." 

The source category covers crude oil production sumps pits and ponds in the Valley. 

The proposed amendments are not expected to have significant costs associated with 

it. Therefore, staff concludes that there would be no significant socioeconomic impact 

from this rule. 

Rule Consistency Analysis 

Pursuant to CH&SC §40727.2, District staff evaluated the elements of amendments with 

the corresponding elements of other District rules and federal regulations that apply to 

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SJVUAPCD Governing Board 

ADOPT REVISED PROPOSED AMENDMENTS TO RULE 4402 (CRUDE OIL PRODUCTION SUMPS) 

December 15, 2011 

the same source category or type of equipment. District staff found that the proposed 

amendments and requirements of this rule would not conflict with federal rules, 

regulations, or policies covering similar stationary sources. 

Environmental Impacts 

Adoption of the proposed amendments would limit VOC emissions from sumps. As 

discussed in the final draft staff report, the District proposes to make several minor and 

administrative changes to further strengthen District Rule 4402. The District performed 

an environmental analysis of the reasonably foreseeable methods by which compliance 

with the amended rule will be achieved. The District concludes that implementation of 

the proposed amendments would not result in foreseeable changes in existing operating 

practices impacting environmental resources. Staff concludes that there is no 

substantial evidence in the whole record before the District that the proposed 

amendments would cause any adverse environmental effects. Thus, the District finds 

that the project is exempt per the general rule that the California Environmental Quality 

Act (CEQA) applies only to projects which have the potential for causing a significant 

effect on the environment (CCR §15061(b)(3)). 

Rule Development Process 

As part of the rule development process, District staff hosted a public workshop on 

October 18, 2011, and held two technical workgroup meetings with industry 

representatives in September and October 2011. Staff solicited comments from the 

public, affected sources, trade organizations, California Air Resources Board (ARB), 

and EPA. Comments received were evaluated and incorporated into the rule as 

appropriate. 

The notice of the public hearing for the proposed rule amendments was published in 

general circulation newspapers in each of the eight San Joaquin Valley counties, and 

will be made available for review on the District website prior to this public hearing. 

FISCAL IMPACTS: 

District staff expects no fiscal impact to the District to result from this action. 

Attachments: Attachment A: Resolution for Revised Proposed Amendments to Rule 4402 — (4 pages) 

Attachment B: Revised Proposed Rule 4402 - (8 pages) 

Attachment C: Final Draft Staff Report with Appendices for Revised Proposed Rule 

4402— (88 pages) 

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