## STATE IMPLEMENTATION PLAN REVISION

TO AMEND 401 KAR 59:174

STAGE II CONTROLS AT GASOLINE DISPENCING

FACILITIES

BOONE, CAMPBELL, & KENTON COUNTIES, KENTUCKY

Prepared by the Kentucky Division for Air Quality Submitted by Kentucky Energy and Environment Cabinet May 2016T HIS PAGE LEFT INTENTIONALLY BLANKT ABLE OF C ONTENTS

INTRODUCTION

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BACKGROUND

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STAGE II VAPOR RECOVERY RULE AND ORVR CONTROLS .......................................................................... 2

WIDESPREAD USE

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CLEAN AIR ACT PROVISIONS

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EMISSIONS CALCULATIONS

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DECOMISSIONING PROVISIONS ........................................................................................................................... 5

CONCLUSION

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PUBLIC PARTICIPATION

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T ABLES

TABLE 1. INCREMENTAL BENEFIT OF MAINTAINING STAGE II VRS IN THE NORTHERN KENTUCKY, CINCINNATI- HAMILTON MSA WITH ORVR PHASE-IN ........................................ 5

TABLE 2. NORTHERN KENTUCKY PORTION OF NATIONAL GASOLINE CONSUMPTION ...................... 5

TABLE 3. PROJECTED GASOLINE CONSUMPTION OF THE NORTHERN KENTUCKY AREA ................... 5

TABLE 4. VOC EMISSIONS INVENTORY WITH STAGE II VRS COMPARED TO VOC EMISSIONS

INVENTORY WITH ONLY ORVR ......................................................................................................... 6

A PPENDICES

Appendix A – Federal Registers

Appendix B – Emissions Calculations

Appendix C – 401 KAR 59:174 as Amended

Appendix D – Notice of Public Hearing & Response to CommentsThis page left intentionally blank1 I NTRODUCTION

This document contains technical support for the Kentucky Division for Air Quality’s (Division) request to revise Kentucky’s State Implementation Plan (S IP) by amending 401 KAR 59:174 to remove Stage II controls from gasoline dispensing facilities (GDF). This submittal demonstrates that removing Stage II equipment from GDF’s in Northern Kentucky will not deteriorate the area’s air quality and that over time, the removal of Stage II will prevent an increase in volatile organic compound (VOC) emissions due to the in compatibility of Stage II equipment and OnBoard Refueling Vapor Recovery (ORVR) system s. This plan focuses on VOC emissions, a precursor in ozone formation, from fac ilities in the Cincinnati-Hamilton, OH-KY-IN, Metropolitan Statistical Area (MSA) which was previously designated as Moderate

Nonattainment for the 1-hour Ozone Nationa l Ambient Air Quality Standards (NAAQS).

B ACKGROUND

On November 6, 1991

, the Environmental Protection Agency (EPA) designated the CincinnatiHamilton OH-KY-IN, MSA as Moderate nonattainm ent for the 1-hour Ozone National Ambient Air Quality Standards (NAAQS). This nonattainment area incl uded the Kentucky counties of Boone, Kenton and Campbell. Section 172(a)(2) of the Clean Air Act (CAA) requires each state with areas failing to meet the NAAQS to develop SIPs to expediti ously attain and maintain the standard. For areas that are designated as a m oderate, serious, or severe nonattainment for the ozone NAAQS, states are required to submit revisions to the SIP th at include a plan for reducing emissions of VOCs by 15 percent from the 1 990 Adjusted Base Year Emissions Inventory.

States that were moderate nonattainment for th e 1-hour Ozone NAAQS were required to attain the ozone NAAQS by 1999.

Kentucky submitted a 15 Percent Plan to EPA on March 21, 1994 however, by the end of the 1994 ozone season, the monitoring data for the entire Cincinnati area indicated attainment of the ozone NAAQS. Subsequently Kentucky submitted a request to redesignate the area to attainment. EPA determined that the 15 Percent Plan was not necessary at that time since the area had attained the standard. Therefore, Ke ntucky requested that EPA take no further action on the proposed reduction plan. The Cincinnati area monitoring da ta recorded a violation during the 1995 ozone season which prompted EPA to deny Kentucky’s request to redesignate the area to attainment, thereby making the 15 percent plan an applicable requirement for the area.

On September 11, 1998, Kentucky submitted a 15 Percent Plan to EPA for the Northern Kentucky area. The submittal not only established the necessary reductions required to meet the 1999 target level, it also provided control strategies that would be implemented to assure that progress towards the target level would be effectiv e. Stage II requirements were established as one of the provisions used to meet the requ ired 15 percent reduction. Kentucky adopted 401 KAR 59:174, Stage II Controls at Gasoline Disp ensing Facilities on January 12, 1998 and the regulations became part of Kentucky’s SIP on February 8, 1999 (63 FR 67586). The regulation applies to 140 facilities in Northern Kentucky that have an average monthly throughput of more than 10,000 gallons/month. The vast majority of Northern Kentucky facilities (138/140) are equipped with vacuum assist Stage II VRS controls. The Cincinnati-Hamilton, OH-KY-IN2 nonattainment area was redesignated to attainment for the 1-hour ozone standard on July 5, 2000 (65 FR 37879).

S TAGE II V APOR R ECOVERY R ULE AND ORVR C ONTROLS

VOCs are emitted from the refueling of gasoline vehicles and trucks at gasoline dispensing facilities (GDF). When gasoline is pumped in to a vehicle, the empty space in the tank has gasoline vapors that are forced ou t of the tank. With Stage II vapor recovery systems (VRS), instead of being emitted into the air, those vapor s are directed into the underground storage tank (UST).

There are two types of Stage II VR S controls. The first is a bala nce type of Stage II system. A balance system has a rubber boot around the gaso line nozzle spout that fits snugly up to a vehicle’s fill pipe. When the gasoline is pumped in to the vehicle, an increase in pressure in the vacant space of the vehicle gas tank, combined w ith a slight decrease in pressure in the UST from emptying fuel, forces the gasoline vapors from the tank, through the fill pipe into the UST. The second is a vacuum assist system that uses a vacuum pump on the va por return line to help draw the vapors from the vehicl e fill pipe into the UST.

ORVR is a vehicle emission control system that captures fuel vapors from the vehicle gas tank during refueling on the vehicle itself. With ORVR, the gas tank and fill pipe are designed so that when refueling the vehicle, fuel vapors in the gas tank travel to an activated carbon packed canister, which adsorbs the vapor. To prevent vapors from escaping through the fill pipe opening, a seal in the fill pipe allows liquid ga soline to enter, but blocks the vapors from escaping. When the engine is in operation, it dr aws the gasoline vapors in to the engine intake

manifold to be used as fuel.

ORVR was first required for all passenger ca rs starting with model year 2000. Since 2006, all light-duty trucks, sports utility vehicles, and medium-duty ve hicles are require d to be equipped

with ORVR.

According to the federal register promulgate d on May 16, 2012, “Stage II and ORVR emission control systems are redundant, and the EPA ha s determined that emission reductions from ORVR are essentially equal to and will soon su rpass the emission reductions achieved by Stage II alone” (77 FR 28772). Where ORVR has been dem onstrated to be in “widespread use,” Stage II is unnecessary and even incompatible. Incompatibility refers to excess emissions resulting from Stage II VRS and ORVR being used together because the two emission controls together result in extra venting of VOCs from the underground stor age tank into the ambi ent air. This can

lead to an increase in emissions. Studi es, including one conducted by the California Air Resources Board (CARB), further indicate that incompatibility between the vacuum assist version of the Stage II VRS and ORVR degrade th e benefit of keeping the Stage II VRS (CARB, June 1999). This incompatibility is especially important in Kentucky, given the high proportion of facilities with vacuum assist versions of the Stage II VRS controls.3 W IDESPREAD U SE

Section 202(a)(6) of the CAA deta ils that the EPA can revise or waive the Section 182(b)(3) Stage II vapor recovery requir ement for applicable ozone nonattainment areas after the Administrator determines widespread use of OR VR has been demonstrated throughout the motor

vehicle fleet. EPA has considered demonstration of widespread use of ORVR in motor vehicle

fleets to include:

1) Determining the percentage of ORVR -equipped vehicles in service, and 2) Determining when VOC emissions resulting from the application of ORVR controls alone equal the VOC emissions when both Stage II vapor recovery systems (VRS) and ORVR controls are used.

Stage II VRS control efficiency is assumed by EPA to be 86 percent from the MOVES 2010b default database (77 FR 28772). The percentage of gasoline pumped into vehicles from GDFs with Stage II control is estimat ed by EPA to be 90 percent as per EPA guidance. By multiplying these two numbers, the expected area-wide control efficiency of Stage II VRS is 77.4 percent.

A policy memorandum published by EPA entitled, “Removal of a St age II Vapor Recovery in Situations Where Widespread Use of Onboard Refueling Vapor Recovery is Demonstrated,”

determined that if at least 95% of the vehicles in a fleet have ORVR, then widespread use will likely have been demonstrated. Because the per centage of vehicles without ORVR is decreasing on a yearly basis and the amount of gasoline pumped to these vehicl es is decreasing as well, EPA could predict a date for ORVR widespread use. EPA considered two different approaches. They first looked at the assumed 98 percent contro l efficiency of ORVR (77 FR 28775 and EPA guidance), and then used the Motor Vehicle Emissions Simulator (MOVES) 2010 motor vehicle

emissions model to determine the number of vehi cles with ORVR projected out to the year 2020. EPA’s table “Projected Penetration of ORVR in the National Vehicle Fl eet by Year – Based on MOVES 2010” is located in Appendix A (77 FR 28776). Overall ORVR efficiency was determined by multiplying the fraction of gasoline dispensed into vehicles with ORVR by the assumed 98 percent average in-use control effi ciency. Using this approach, ORVR control efficiency reached the equivalent Stage II VRS control efficiency of 77.4 percent by May 2013 (77 FR 28778). The second approach used observations from the first approach to determine that by the end of the calendar year 2012; more than 75 percent of gasoline will be dispensed into vehicles with ORVR, resulting in an overall ORVR control efficiency close to the Stage II VRS control efficiency and allowing for a phased-in approach to ORVR. Further information on EPA’s approach for determining widespread us e can be found in EPA’s determination (77 FR 28772) and its proposal published in the Fede ral Register on July 15, 2011 (76 FR 41731).

C LEAN A IR A CT P ROVISIONS

EPA can only propose approval of a SIP revisi on seeking to discontinue an existing SIPapproved Stage II control program if the SI P revision meets the fo llowing CAA provisions:

 The requirements of 110( l ),

 The requirements of CAA, Section 193 for any current nonattainment area that adopted a Stage II control program into its SI P prior to November 15, 1990, and4  The requirements of CAA, Section 184(b)(2) wh ich applies to any area of the northeast ozone transport region (OTR).

Kentucky is not a part of th e northeast OTR and, therefore, CAA Section 184(b)(2) does not apply. Additionally, since Kentucky adopted its Stage II Vapor Recovery Program into its SIP on December 9, 1998 (63 FR 67586), CAA, Secti on 193 also does not apply. Therefore, the

remainder of this section includes a detailed de scription of the require ments of CAA, Section 110( l ).

110( l )
Section 110( l ) of the CAA, governs EPA’s ability to approve all SIP revisions. Specifically,
Section 110( l ) states:

Each revision to an implementation plan submitted by a State under this chapter shall be adopted by such State after re asonable notice and public heari ng. The Administrator shall not approve a revision of a plan if th e revision would interfere w ith any applicable requirement concerning attainment and reasonable further progre ss (as defined in Section 171 of this title), or any other applicable re quirement of this chapter

.

This SIP revision uses the analysis provi ded by EPA’s “Guidance on Removing Stage II Gasoline Vapor Control Programs from State Implementation Pl ans and Assessing Comparable Measures” to demonstrate that removing Stage II vapor recovery controls by amending 401 KAR

59:174 will not interfere with atta inment, reasonable further progre ss or any other requirement of

the Clean Air Act.

E MISSIONS C ALCULATIONS

This section summarizes the results of the emi ssions calculations located in Appendix B. Using methods described in EPA’s Guidance Document, th is submittal demonstrates that the emission control gain, identified in the guidance as the “i ncrement” (or incremental benefits), of Stage II

VRS controls decreases as ORVR controls are phased-in. The calculations provided in Appendix B show that the incremental benefit of keeping Stage II VRS controls as ORVR controls are phased-in is an ev er decreasing benefit, which ev entually becomes a disbenefit.

Additionally, Section 110( l ) of the CAA requires that a SIP re vision does not in terfere with any applicable requirement concerning attainment, and reasonable further pr ogress (as defined in CAA, Section 171). Kentucky regulation 401 KAR 59:174 became effective March 4, 2016. Table 1 below demonstrates that the decommissioning of Stage II VRS at GDF in 2016 will not create an emissions increase. The impact on th e area-wide VOC inventory has been calculated

and evaluated to show that it is consistent with Section 110 ( l ).

Table 1 demonstrates the Stage II in-use control efficiency at 67.5%. The table includes the year

with the latest av ailable data, 2014, along with each subsequent year pr ojected out to 2020. For 2016, the far right column, “% incr ease when Stage II removed,” has a negative percentage. This suggests the operation of the Stage II systems would start resulting in a negative impact on emissions for that particular year due to the increased ORVR vehi cle fleet population in the area.5 By keeping the area’s overall St age II program in opera tion, it would make th e air quality worse. Therefore, the year in which this negative percenta ge first appears would be the year to start the decommissioning of Stage II systems in northern Kentucky. Further expl anation of the terms and calculations can be found in Appendix B.

Table 1 Incremental benefit of maintaining Stage II VRS in the Northern Kentucky, CincinnatiHamilton MSA with ORVR phase-in.

Years Q SII Q ORVRi η iuSII * Q SIIva CF i η ORVR i % Increase when Stage II removed

2014 0.875 0.8293 0.675 0.986 0.0644 0.98 0.0373 3.73%

2015 0.875 0.8650 0.675 0.986 0.0672 0.98 0.0135 1.35%

2016 0.875 0.8860 0.675 0.986 0.0688 0.98 -0.0005 -0.05%

2017 0.875 0.9030 0.675 0.986 0.0702 0.98 -0.0119 -1.19%

2018 0.875 0.9190 0.675 0.986 0.0714 0.98 -0.0225 -2.25%

2019 0.875 0.9320 0.675 0.986 0.0724 0.98 -0.0312 -3.12%

2020 0.875 0.9430 0.675 0.986 0.0733 0.98 -0.0386 -3.86%

* η iuSII = 67.5% Stage II In-Use Control Efficiency

Table 2 below shows the Northern Kentucky area ’s consumption of gasoline. The data was compiled using EPA’s guidance document and th e Federal Highway Administration website.

Table 2 Northern Kentucky Portion of National Gasoline Consumption

Year NKY Portion of Total

National Gasoline Consumption Total National Gasoline Consumption May – September (gallons) NKY Consumption May – September (gallons)
2014 0.001299 59,345,592,000 77,089,924

Table 3 Projected Gasoline Consumpti on of the Northern Kentucky Area

Year NKY Consumption May – September 2014 (gallons) Projected Ratio for Gasoline Consumption

Growth Projected Gasoline Consumption of NKY

Nonattainment Area (gallons/season)

2014 77,089,924 N/A N/A
2017 77,089,924 1.0404 80,204,357
2020 77,089,924 0.9710 74,854,316

Table 4 shows the gasoline consumption for th e Northern Kentucky area for the years 2014, 2017 and 2020. The data was established by using a projected ratio for gasoline consumption from the Department of Energy’s EIA Annual Ou tlook – Liquid Fuels Supply and Disposition.6 Table 4 VOC Emissions Inventory with Stage II VRS Compared to VOC Emissions Inventory with only ORVR

Year VOC Base Year Emissions in (tpd) (2011 Base Year) VOC Emissions with Stage II VRS

Controls in Place (tpd) VOC Emissions with Stage II

VRS Removed (tpd) VOC Emissions

Difference Between

Stage II VRS In

Place and Removed

Incremental Benefit (tpd)

2011 8.47 8.47 N/A N/A

2014 8.47 6.50 6.29 -0.21

2017 8.47 5.03 4.88 -0.15

2020 8.47 3.54 3.44 -0.10

Table 4 above compares VOC emissions with continued implementati on of Stage II VRS to VOC emissions with only ORVR controls in pl ace when projected to 2020 using the 2011 base year inventory. The 8.47 tpd is representative of the on-road mobile source emissions only. This table determines that the removal of Stage II VR S requirements will result in a decrease in motor

vehicle VOC emissions and therefore sa tisfies the requirement in section 110( l ), not to interfere with any applicable requirement concerning atta inment and reasonable further progress or any other applicable requirement.

D ECOMMISSIONING P ROVISIONS

Included in the amendment of the regulation is the process of decommissioning the Stage II VRS controls in such a way that it is done in a sa fe and environmentally appropriate manner. The owner/operator will follow the decommissioning process as amended in 401 KAR 59:174. These decommissioning procedures follow PEI/ RP300-09 recommended practices related to capping and sealing vapor recovery underground piping and vapor recovery dispenser piping, and the associated tests in recommended practices.

Facilities can begin decommissioning January 1, 2016. There is no schedule for facility decommissioning, only the requirement that all f acilities must have decommissioning completed by December 31, 2018.

401 KAR 59:174 has been amended to include these requirements pertaining to the decommissioning of the Stage II VRS equipment and can be found in Appendix C.

CONCLUSION

The Energy and Environment Cabinet is reque sting the approval of the SIP revision to implement the amended regulation 401 KAR 59:174, decommissioning and removal of requirements for Stage II vapor re covery systems. The SIP dem onstrates that the removal of Stage II VRS controls at gasoline dispensing faci lities in Northern Kentucky will result in VOC7 emission reductions beginning in 2016. This re quest to remove Kentucky’s Stage II VRS

controls is based on EPA’s August 7, 2012 Guidance Document, “Guidance on Removing Stage II Gasoline Vapor Control Programs from State Implementation Plans and Assessing Comparable Measures” . Section 202(a)(6) of the CAA give s EPA discretionary authority to revise or waive the Section 182(b)(3) Stage II requirement by rule after the Administrator determines that ORVR is in widespread us e throughout the motor vehicle fleet. EPA can propose approval of a SIP revisi on seeking to discontinue an existing SIP-approved Stage II control program if Kentucky’s SIP re vision meets the requirements of 110( l ). The Division

demonstrates in this SIP revision that remova l of Stage II controls by amendment of 401 KAR 59:174 in Kentucky’s SIP is consistent with Section 110( l ) of the Clean Air Act (CAA) and will
not interfere with the attainment of the NAAQS, reasonable further prog ress towards attainment, or any other applicable requirements.

P UBLIC P ARTICIPATION

In accordance with 40 CFR 51.102, a public hearin g was held at the Division for Air Quality offices located at 200 Fair Oaks Lane, Frankf ort, KY on April 29, 2016. The only comments received during the public commen t period were from EPA. A c opy of the public hearing notice and response to comments can be found in Appendix D.COMPLETENESS CRITERIA FOR SIP SUBMITTALS –

40 CFR PART 51 APPENDIX V To ensure completeness of this SIP revision submittal, the following elements detailed in 40 CFR Part 51, Appendix V are listed:

A. ADMINISTRATIVE MATERIALS:

1. A formal letter of submittal from the G overnor or his designee, requesting EPA approval of the plan or revision.

The cover letter dated May 3, 2015 signed by Secr etary Charles G. Snavely, the Governor’s designee requests EPA’s approval of the SI P revision to amend 401 KAR 59:174 Stage II Controls at Gasoline Dispensing Facilities.

2. Evidence that the State has adopted the plan in the State code or body of regulations; or issued the permit, order, consent agreement in final form. That evidence shall include the date of adoption or final issuance as well as the effective date of the plan, if different from the adoption/issuance date.

The Commonwealth of Kentucky is submitting this document to request 401 KAR 59:174 be amended to the SIP. The regulation became ef fective on March 4, 2016. The effective date of the plan should be the date of the SIP revision submittal, May 3, 2016.

3. Evidence that the State has the necessary le gal authority under State law to adopt and implement the plan.

The powers and duties of the Cabinet establ ished in KRS 224.10-100 provide the Energy and Environment Cabinet with the statutory authority to p repare and develop a comprehensive plan or plans related to the environment of the Commonwealth. Additionally, KRS 224.10-100 requires the cabinet to administer and enforce all rules, regulations and orders promulgated under Chapter 224, Environmental Protecti on, including those regulations that provide for the prevention, abatement, and control of all air pollution

.

4. A copy of the actual regulation, or docume nt submitted for approval and incorporation by reference into the plan, including indicati on of the changes made to the existing approved plan, where applicable. The submitta l shall be a copy of the official State regulation/document signed, stamped, dated by the appropriate State official indicating that it is fully enforceable by the State. The effective data of the regulation/document shall, whenever possible, be indicated in the document itself.

A copy of 401 KAR 59:174 along with the approved changes is provided within Appendix C.

5. Evidence that the State followed all of the pr ocedural requirements of the State’s laws and constitution in conducting and comple ting the adoption/issu ance of the plan.

The procedural requirements associated with this plan and public comment period are

included in the submittal to EPA.6. Evidence that public notice was given of the proposed change consistent with procedures approved by EPA, including the date of publication of such notice.

In accordance with 40 CFR 51.102, the Cabinet provided notice for the opportunity to submit written comments and to allow the public the opportunity to request a public hearing. A copy of the public hearing notice published on the Division’s webs ite is included in Appendix D. A public hearing was held at the Division for Air Quality offices located at 200 Fair Oaks Lane, Frankfort, Kentucky on Apr il 29, 2016. The only comments received during the public comment period were from EPA. Th e Division’s response to those comments are located in Appendix D.

7. Certification that public hearing(s) were held in accordance with the information provided in the public notice and the State’s laws and constitutions, if applicable.

A public hearing notice was poste d on the Division’s website a nd sent to members of the community. This notice detailed that the public had 30 days to provide comment and that a public hearing would be held on April 29, 2016, listing the time and location. The SIP

revision document was made available for public review on the Division’s website throughout the 30 day review period.

8. Compilation of public comments and the State’s response thereto.

All comments along with the Cabinet’s re sponses are available in Appendix D.

B. TECHNICAL SUPPORT:

1. Identification of all regulated pollutants affected by the plan.

The appropriate pollutant(s) have been identifi ed within the narrative consistent with EPA’s guidance.

2. Identification of the locations of affected sources including the EPA attainment/nonattainment designations and th e status of the attainment plan for the affected area(s).

This plan focuses on the Cincinnati-Ham ilton, OH-KY-IN, Metropoli tan Statistical Area (MSA) which was previously designated as Moderate Nonattainment for the 1-hour Ozone National Ambient Air Quality Standards (NAAQS).

3. Quantification of the changes in plan allo wable emissions from the affected sources; estimates of changes in current actual em issions from affected sources or, where appropriate, quantification of changes in actual emissions from affected sources through calculations of the differences be tween certain baseline levels and allowable emissions anticipated as a result of the revision.Quantification and changes in emissions are discussed within the Emissions Calculation

Section of this submittal.

4. The State’s demonstration that the national ambient air quality standards, prevention of significant deterioration increments, rea sonable further progress demonstration, and visibility, as applicable, are protected if th e plan is approved and implemented. For all requests to redesignate an area to attain ment for a national ambient air quality standard, under section 107 of the Act, a revis ion must be submitted to provide for the maintenance of the national primary ambient air quality standards for at least 10 years as required by section 175A of the Act.

This is addressed in the Clean Air Ac t Provisions Section of this submittal.

5. Modeling information required to support the proposed revision, including input data, output data, models used, justification of model selections, ambient monitoring data used, meteorological data used, justification for use of offsite data (where used), modes of models used, assumptions, and other info rmation relevant to the determination of adequacy of the modeling analysis.

6. Evidence, where necessary, that emission limi tations are based on continuous emission reduction technology.

This is not applicable to this submittal.

7. Evidence that the plan contains emission limitations, work practice standards and recordkeeping/reporting requirements, where necessary, to ensure emission levels.

These elements are consistent with EPA’s guidance.

8. Compliance/enforcement strategies, including how compliance will be determined in practice.

Compliance and enforcement strategies have be en addressed in the re gulatory changes being

amended to the SIP.

9. Special economic and technological justific ations required by any applicable EPA policies, or an explanation of why su ch justifications are not necessary.

Economic and technological justifications are consistent w ith EPA’s guidance.

# Appendix A

Federal Registers