### VENTURA COUNTY APCD
STAFF REPORT Proposed Amended Rule s 5 4, Sulfur Compounds and 42, Permit Fees
FINAL

– November 20 1 3

EXECUTIVE SUMMARY

The Ventura County Air Pollution Control District (District) is proposing revisions to District Rule 54, Sulfur Comp ounds

, and Rule 42, Permit Fees . Staff is proposing to add the 2010 primary 1

- hour sulfur dioxide (SO 2 ) National Ambient Air Quality Standard (NAAQS) of 75 parts per billion as a ground or sea

level concentration limit to Rule 54 ’s current

concentration l imits

. This value must be compared to a “design value” generated through ambient air monitoring or computer modeling of SO 2 concentrations at or beyond an affected facility’s property line. Staff is also proposing to add a description of the design value that must be calculated to compare to the 2010 SO 2 NAAQS concentration limit to determine compliance with the

rule.

Rule 54 ’s current property line limits are based on the California ambient air quality standards (CAAQS) for

SO 2

. Because of its form, t he 2010 SO 2 NAAQS is not directly comparable to the existing CAAQS

- based

limits . Therefore, the 2010 SO 2 NAAQS limit was

added as a new subsection B. 2

. a. This amendment is required to bring Rule 54 up to date with current Federal requirements.

The prop osed revisions might affect approximately

21 existing significant sources of SO 2 (see Table 1)

. For the purpose of this report , a source was considered significant if its permitted SO 2 emissions

are greater than 40 ton s per year and/or five (5 ) pound s per hour. The total permitted or potential

SO 2 emissions from these operations are approximately 197 tons SO 2 per year.

Since the limit being added to Rule 54 is an ambient air limit, compliance will most often be determined during the initial Authority to Construct process. If any ambient monitor or ambient SO 2 concentration modeling shows concentrations above the limit,

sources suspected of contributing to the exceedance will be required to demonstrate compliance , typically through dispersion modeling.

Since all new sources that emit SO 2 must be equipped with Best Available Control Technology (BACT), it is unlikely that any new source will exceed the ambient concentration limits at the property line. In addition, the current sources of SO 2 are either a lready well controlled, are low quantity emitters

, or have

flares on offshore oil platforms that are exempt from

the limits in sections B.1

, and B.2 of R ule 54 during emergencies for safety concerns

. Therefore, no significant emission s reductions are expe cted as a

result of this rule amendment.

The costs associated with compliance with the proposed ground or sea level concentration limits

would be associated with air dispersion modeling

used to demonstrate compliance and possibly with equipment or work pr actices to reduce SO 2 emissions. However, the addition of the 2010 NAAQS SO 2 standard would not increase the need for modeling compliance since the significant emission rate (the

annual emission increase for a new or modified source that requires modeling to demonstrate compliance with the NAAQS) has not changed

.

The estimated cost for additional SO 2 emissions reductions or other strategies to achieve compliance

with the new limitations are difficult to determine. Since BACT must be applied to all new or modified

sources of SO 2 , any additional control technologies above and beyond BACT would likely be experimental and/or not previously implemented on a

commercial scale. Thus the cost s of implementing the proposed rule revision are impossible to predict.

The last time Rule 54 was updated in June of 1994,

USEPA noted a minor deficienc y during the State Implementation Plan revision process. Staff proposes

to correct the deficienc y during this revision by including a statement that the limit to combustion exhaust in subsection B.1.a is on a dry basis corrected

to a percent oxygen based on the combustion source

. In addition, this revision includes clarification of the method of calculating the planned flaring excess

emission fee s in Rule 54 and Rule 42

.

T his report contains five sections: (1) Background, (2) Proposed Rule Re visions , (3) Comparison of Proposed Rule Requirements with Other Air Pollution Control Requirements, (4) Impact of the Proposed Rule, and (5) Environmental Impacts of Methods of Compli ance. The first section provides background information including regulatory history, latest air pollution control technology

, and source description. The second section explains the key features of the proposed revisions. The third section compares the proposed requirements with existing federal requirements and BACT. The fourth section is an analysis of the proposed amendment's effect on

SO 2 emissions , cost

- effectiveness, and socioeconomic impacts. The last section examines the possible

environmental impacts of compliance methods and mitigation of those impacts.S taff Report R ule 54 & Rule 42 Revisions 11 /13 FINAL Page 2

BACKGROUND

Introduction

Rule 54 , Sulfur Compounds

, was last amended in

June of 1994. At that time, the rule was updated to include the most recent CAAQS for SO 2 . An exemption for flares on outer continental shelf oil production platforms was also added to allow flaring of high sulfur gas during emergencies

.

Ventura County is currently designated attainment for

the SO 2 CAAQS 1 and the 1971 SO 2 NAAQS

. However, upon promulgation of the 2 010 primary

1

- hour SO 2 NAAQS, USEPA revoked both the 1971

24

- hour and the annual average primary SO 2 NAAQS

and , moreover, the 1971 NAAQS will no longer apply one year after an area’s effective date of designation

. 2 In June 2011

, the California Air

Resourc es Board sent a letter to USEPA recommending that all areas of California be designated attainment for the 2010 SO 2 NAAQS 3

. O n February 6, 2013, the USEPA Region IX

Administrator responded with a letter stating that

USEPA had insufficient information to d etermine the

attainment status for any area of California for the

2010 SO 2 NAAQS 4

. USEPA was required to complete the designations by June 3, 2013 but as of the date of this report has not issued final designations for California

. Hence

, at this time

Ven tura County has not received an attainment designation for the 2010 SO 2 NAAQS but expects to be designated in attainment of the standard when USEPA completes i ts designation process.

2010 SO 2 NAAQS

On June 22 , 2010 the USEPA strengthened the

federal hea lth

- based or “primary” standard for SO 2 by establishing a new standard for 1

- hour average SO 2 concentrations at 75 parts per billion (ppb) to protect public health from the adverse health effects of SO 2

. With th at action USEPA revoked the existing federal

24

- hour and annual SO 2 standards set in 1971

. In addition, USEPA changed the form of the standard to a “design v alue” for determining compliance with the

standard. 5

Design v alues are mathematically determined air pollutant concentrations that must be reduced to, or maintained at or below a NAAQS

, to assume compliance and/or attainment. The design value for

the 2010 1

- hour NAAQS is derived from the 3

- year average of annual 99th percentile daily maximum 1

- hour values for a monitoring site . This value i s also
known as “the 1

- hour primary standard design value.”

Emission Source Inventory

The 21 operations currently permitted by the District

that have SO 2 emissions that would be considered significant and possibl y affected by the proposed rule

revisions are shown in Table 1. These include crude oil production, port and military base operations, electricity generation, mineral processing, sewage treatment and other operations that involve the

combustion of sulfur

- containing fuels.

Th e table provides the permitted or potential

emissions of SO 2 from stationary sources located at each listed facility. T he estimated total permitted

emissions from th ese source s are approximately 200

tons of SO 2 per year. A facility’s a ctual SO 2 emissions depend on its produc tion level s and its corresponding combustion of sulfur

- containing fuel

.

The emissions thresholds used to determine significant SO 2 sources for this rule revision were 40

tons SO 2 per year and 5 pounds SO 2 per hour. The

40

- ton threshold is the standard SO 2 significance threshold for Prevention of Significant Deterioration (PSD) permitting set by USEPA 6

. USEPA did not change this threshold when it promulgated the 2010

SO 2 NAAQS. Since the 2010 SO 2 NAAQS is a short term (hourly) standard, staff determined that an hourly screening threshold was appropriate. D irect conversion of 40 tons per year to average pounds per hour yields 9.1 pounds per hour. Since the 2010 SO 2 NAAQS is more stringent than the 1971 standards,

staff selected 5 pounds per hour as a rea sonable

threshold for this rule analysis

.

In its draft document “Guidance for 1

- Hour SO 2 NAAQS SIP Submissions

, ” EPA stated that it expected states to “focus performance of attainment demonstration modeling on areas with larger sources (e.g., those source s emitting over 100 tons per year (tpy) of SO 2 ), and any other sources that we anticipate to cause or contribute to a violation to determine compliance with the new SO 2 NAAQS.” 7
Since none of the Ventura County sources listed in Table 1 emit greater than 100 tons of SO 2 per year, modeling of these existing sources will likely not be required to demonstrate attainment of the 2010 NAAQS

.Staff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 3

However, a dditional guidance from USEPA indicates

that some refined modeling might be required to
demonstrate attainment of the 2010 SO 2 NAAQS

. The sources that should be modeled using screen ing modeling and those that must be included in refined modeling will be clarified with the additional USEPA guidance

. If modeling used to determine attainment

status of the 2010 SO 2 N AAQS shows violation(s) of

the standard

, then the sources contributing to the violation(s) will be required to reduce emissions. This is not expected to be the case for Ventura

C ounty , however.

1994 Rule Deficiency

On April 19, 2000 the USEPA finalized a limited approval of revisions to the Ventura County Air Pollution Control District portion of the California State Implementation Plan (SIP). The approval was

limited due to minor deficiencies USEPA identified in their February 22, 2000 proposed limite d approval

of the SIP revisions.

In the proposal, USEPA identified the following deficiency in Rule 54 : “The rule specifies a 300 ppm

SO 2 limit at the point of discharge for any combustion operation. The rule should also indicate that the

standard is on a dry basis and should specify the percent excess air. ” EPA also recommend ed changing the period of record retention specified in

Rule 54 to be consistent with the federal record retention requirement of 5 years , stating this would be an improvement to the rule

. 8

Additional Clarifications and Corrections

The 1994 revisions to Rule 54 included an excess emission fee for planned flaring events on outer continental shelf oil platforms that exceed the

emission rate limits in Section B.1 of the r ule. T he rule requirements did not exactly correspond to the intent as described in the May 12, 1994 rule development staff report. In addition, the District Compliance D ivision manager at that time issued policies to clarify the implementation of the excess

em ission fee requirements to correspond with the staff report.

Since s taff determined that the staff report and Compliance division policy reflected the actual implementation of the rule in practice, this revision includes changes to Rule 54 to codify the current practice. Similar changes to Rule 42 Section N are proposed to maintain consistency between the two
rules.

Table 1 Permitted Operations Possibly Affected by Proposed Rule Revisions
Facility

ID Facility Name Permitted SO 2 Emissions Type of Op eration SIC

Code (tons/year) (lb/hour)

00003 Rincon Island Ltd. Partnership 0.98 8.18 Crude Oil Production 1311

00012 Tenby Production Facility 28.26 55.3 Crude Oil Production 1311

00036 Trinity ESC 63.55 15.89 Mineral Treating/Grinding 3295

00041 Aera Energy LLC 7.00 106.29 Crude Oil Production 1311

00065 Ormond Beach Gen. Station 37.04 8.8 Electricity Generation 4911

00143 Ventura Co. Medical Center 0.41 14.55 Medical/Surgical Hospital 8062

00144 Los Robles Hospital & Medical Ctr. 0.33 10.51 M edical/Surgical Hospital 8062

00157 New

- Indy Oxnard, LLC 0.86 30.26 Paperboard Mill 2631

00165 Simi Vly Water Qlty Control Plant 6.38 5.27 Sewerage Systems 4952

00310 Vintage Production California LLC 0.76 10.03 Natural Gas Plants 1321

00970 Rincon Ons hore Facility 2.00 66.97 Crude Oil Production 1311

00997 Naval Base Ventura County 1.91 8.17 National Security 9711

01139 Ventura Port District 0.87 7.22 Dredges/Pile Drivers 1629

01207 Naval Base Ventura County 6.01 9.24 National Security 9711

01266 M anson Construction Company 1.21 5.87 Dredges/Pile Drivers 1629

01267 Trustees of CSU & CSUCI Site Auth. 25.01 55.04 Electricity Generation 4911

01491 Platform Gina 4.75 76.91 Crude Oil Production 1311

01492 Platform Gilda 2.91 11.94 Crude Oil Production 1311

01493 Platform Grace 2.77 390.8 Crude Oil Production 1311

01494 Platform Gail 3.50 632.89 Crude Oil Production 1311

07294 Schlumberger Tech (Vent. Well Srvs) 0.08 6.97 Oilfield Services 1389

TOTAL PERMITTED EMISSIONS 197Staff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 4

PROPOSED RULE RE VISIONS

The Ventura County Air Pollution Control District (District) is proposing revisions to District Rule 54, Sulfur Compounds and Rule 42, Permit Fees

. The proposed revisions include adding the 2010 SO 2 NAAQS as an ambient concentration limit

, addre ssing deficiencies identified by the USEPA , and clarifications to the planned flaring excess emission fee provisions.

2010 SO 2 NAAQS

Staff is proposing to add the 2010 sulfur dioxide (SO 2 ) National Ambient Air Quality Standard (NAAQS) of 75 parts per bi llion as a ground or sea

level concentration limit to Rule 54 ’s current

concentration limits

. Staff is also proposing to add a description of the design value that must be calculated to compare to the 2010 SO 2 NAAQS concentration limit to determine compli ance with the

rule.

The c urrent ground or sea level limits in Rule 54, based on the California ambient air quality standards (CAAQS) for SO 2 , will be retained

. The limits based on the CAAQS either have a different averaging time (24 hours) or are direct limits on 1

- hour

concent ration that may not be exceeded , providing a maximum hourly concentration not covered by the proposed limit.

The addition of the 2010 SO 2 NAAQS would not directly reduce SO 2 emissions from stationary sources in Ventura County

. Ho wever, adding the 2010 SO 2 NAAQS to Rule 54 would clarif y the requirements

for affected facilities and District permit engineers. If modeling required for Authority to Construct review,

PSD review or attainment demonstration s indicates

violations of the s tandard, emissions reductions

would be required at that time.

1994 Rule Deficiency

Staff is proposing to clarify the combustion source

emission limit in Rule 54 S ubsection B.1.a by adding the requirement that the limit is on a dry basis

corrected to a percent oxygen based on the

combustion source type

. Since different combustion sources are designed to function with different excess air input, staff determined that it would be unreasonable to set a single excess air requirement for all sources subjec t to Rule 54. Therefore, staff reviewed existing District rules that apply to

combustion sources. The Subsection B.1.a revisions

reference other District rules in order to be consistent in setting the percent oxygen correction values. T o cover all sourc es, staff included a final requirement that all other sources correct the SO 2 concentration to 15 % oxygen. Staff reviewed combustion operations not covered by another District rule and determined that they operate at higher excess air (10%

- 19 % oxygen) t han boilers. Therefore the “other” category will be required to

correct SO 2 emissions concentration to 15% oxygen. Processes combusting fuels subject to District Rule

64

– Sulfur Content of Fuels, will be always in compliance with the emission limit of 3 00 ppm SO 2 at 15% oxygen if they are in compliance with the fuel

sulfur limits (see Table 2)

.

Table 2

Theoretical Exhaust Concentrations at

Rule 64 Fuel Sulfur Content Limits

Gaseous Fuel Liquid Fuel

Rule 64 Limit 50 grains S per

100 cubic feet 0.005 pound S

per pound fuel

Exhaust SO 2 Concentration

@ 15 % O2 24.91 ppmv 95.65 ppmv

Exhaust SO 2 Concentration

@ 3 % O2 75.57 ppmv 290.2 ppmv

Staff declined to change the record retention requirement in Rule 54. Staff determined that a

two

- year retention p eriod i s consistent with the requirements of District Rule 24 and is sufficient for minor sources since Compliance D ivision staff inspects minor sources in the District annually. In addition, District Rule 33 requires Title V sources to

retain records for five years as required by Federal rules. Therefore, the five

- year retention requirement is already in place where required.

Additional Clarifications and Corrections

Rule 54 was also reviewed by staff to determine if any clarification s of the existin g rule are needed

. Staff found two typographical errors in R ule 54

. This revision corrects the typographical by making the word “Subsection” plural in Subsection C.1.e and correcting the South Coast AQMD test method reference in Subsection D.1 (the corre ct test method

number is 307

- 91).

In addition, staff determined that some provisions relating to the planned flaring excess emission fee in

Rule 54 S ubsection C.2.f and Rule 42 Section N did not accurately reflect the intention as described in theStaff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 5

staff r eport prepared in conjunction with the 1994

revision. The 1994 staff report states that the flare gas volume allowance should be calculated based on

the baseline period from 1988 through 1993 for existing sources.

The existing R ule 54 Section C.2.f and Rule 64

Section N state the “flare gas volume allowance is 91 percent of the average of the two highest, consecutive, annual flare gas volumes in the preceding 5 years.” Staff believes this wording might

have been added to the rule to address potential n ew sources. However, it was not intended to create a rolling baseline for existing sources. The District Compliance Division has been operating under Policy

F

- 1, which states that the flare gas volume allowance

should be calculated based on the baseline period from 1988 through 1993.

The proposed rule revisions set the baseline period for sources operating prior to January 1, 19 88 as the period from January 1, 19 88 through December 31,

199 3 . This aligns the rule s with the current policy in

effec t with the District Compliance D ivision and the 1994 staff report . Table 3 lists the calculated flare gas volume allowance for the existing offshore oil platforms.

Table 3 Flare Gas Volume Allowances for Existing Sources

Platform Name Flare Gas Volume

Allowanc e (cubic feet)

Gail 37,990,000

Gilda 27,012,000

Gina 2,492,000

Grace N/A (see below)

The operators of platform Grace did not submit data to the District and they have no flaring reduction plan on file. They do not expect to exceed the exhaust or

sea level concentration limits since the gas produced at platform Grace historically has low sulfur content.

To accommodate potential new sources, the proposed

rule s set the baseline period for sources constructed after January 1, 19 88 as the first six whol e calendar years of operation. The rule revisions also clarify that the baseline flare volume is based on planned flaring only and does not include unplanned flare volume.

Public Workshop

Staff held a public workshop to present the proposed

rule revisio ns to the public on August 7, 2013. Staff

notified all 185 sources in the District with permitted

emissions of sulfur compounds greater than zero by sending a postcard with the subject matter, date and time of the workshop to each source on July 24, 2013. In addition, notice of the workshop was posted on the

Di strict web page on July 18, 2013

. Staff held the workshop at the appointed date and time but no industry representatives or members of the public attended the workshop. Staff received no written

c omments from the public before or after the workshop.

Thirty days prior to the public workshop, staff

submitted the d raft revised rules to the California Air Resources Board (ARB) and USEPA for review. ARB responded stating they had no comments on the

dr aft revised rules. USEPA responded by telephone with comments requesting correction of a typographical error in the staff report and minor

clarifications to three subsections of Rule 54. The changes to the Rule 54 text requested by EPA are as

follows:

1. In clude language in Subsection B.2.a that screen modeling software should be EPA approved;

2. Insert the date of the Bay Area Manual of

Procedure referenced in Subsection D.2. (7/20/1994); and

3. Revise the reference to the EPA Quality

Assurance Handbook in Subsec tion D.2.b to

reference the current document. Staff made all of the requested changes and EPA

noted in its written comments that the comments had been addressed in the version posted on the District website prior to the public workshop.

During the public workshop, staff reviewed the rule with District management. Minor editorial changes were suggested. In addition, staff determined the SO 2 emission limit for combustion sources at municipal solid waste landfills should have percent oxygen

correction value s based on the combustion source at

the landfill. Subsection B.1.a.7 was edited accordingly.

Advisory Committee

Staff presented the proposed rule revisions to the

District Advisory Committee on September 24, 2013.

E fforts to notify affected sources an d the public similar to those for the public workshop were employed. Again, no industry representatives or members of the public attended the Advisory Committee meeting. The Advisory Committee unanimously passed a resolution recommending the proposed rev isions be adopted by the Air Pollution

Control Board.

The Advisory Committ ee received one written comment at the September 24 meeting from Phil White, President of AE Mechanical Engineering, Inc.Staff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 6

and former Director of the District . The comment supported the changes to Rule 54 in a general statement and went on to address separate issues not related to these rule amendments. No changes were made to the proposed rule amendments as a result of

the comment. No changes to the proposed rule amendments have b een made after the Advisory Committee meeting on September 24, 2013.

COMPARISON OF PROPOSED RULE REQUIREMENTS
WITH OTHER AIR POLLUTION CONTROL REQUIREMENTS

Health and Safety Code Section 40727.2 requires Districts to compare the requirements of a proposed revised rule with other air pollution control requirements. These other air pollution control requirements include federal New Source Performance Standards (NSPS), federal National

Emissions Standards for Hazardous Air Pollutants (NESHAPS), Best Available Control Technology (BACT)

, and any other District rule that applies to the same equipment.

Comparison with Federal NSPS and NESHAPS

Multiple NSPS regulations include SO 2 emission

limits. Only one NESHAP, Part 63 Subpart UUU

– Sulfur Recovery U nits, limits SO 2 emissions. One other NESHAP, Part 63 Subpart UUUUU

– Coal

and Oil

- Fired Electric Utility Steam Generating Units, includes an optional SO 2 emission limit as a method of demonstrating compliance. Neither of

these NESHAPS regulates ambient air concentrations

of SO 2 at or outside the property line of the source facility.

The elements of the NSPS and NESHAPS were compared to proposed amendments to Rule 5 4

. None of the proposed amendments to the rule affect the:

 Units used for emission stand ards

 Monitoring Frequency

 Test Methods

 Recordkeeping Requirements

None of the Federal rules regulate ground or sea level

concentrations of SO 2 at or outside the property line of the source facility. In summary, there are no conflicting requirements wit h the federal NSPS or NESHAPS.

Comparison with BACT Requirements

Health and Safety Code Section 40727.2 (a) requires that the proposed rule amendments be compared with Best Available Control Technology (BACT) . The CAPCOA Engineering Manager Rule Develo pment Subcommittee developed guidance on this matter. Under this guidance, it is recommended that BACT be interpreted as a District’s BACT determination.

BACT for SO 2 emissions is specific to the type of emission unit. However, the top

- down BACT analysi s used by the D istrict does not consider ambient air concentrations. BACT is a technology

based standard that requires installation of controls and use of work practices to minimize emissions from

new and modified sources. The ground or sea level

concent ration standards in Section B.2 of Rule 54 are separate and are applied differently.

If a source of SO 2 is constructed or modified, BACT must be applied. If the new source review process requires modeling of ambient air concentrations of

SO 2

, and the m odeling results indicate ground or sea

level concentrations greater than the limits in Rule 54,

emissions must be reduced to meet the limits or a permit will not be issued. Thus

, the ambient air

standards in Rule 54 do not conflict with BACT but are compl ementary and constitute an additional layer of protection for the public.

IMPACT OF THE PROPOS ED RULE

SO 2 Emissions Impacts

As shown earlier in Table 1, the total permitted SO 2 emissions of facilities with significant SO 2 emissions are approximately 197 tons per year. Since the proposed property line limit does not directly affect emissions, it is difficult to determine if any emission reductions will be necessary as a result of th is rule

revision

.

As stated above, the significance level for PSD

re view and modeling of emissions for compliance with the ambient air standards has not changed. However, District Engineering staff screen all new

and modified sources of SO 2 for compliance with theStaff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 7

ground or sea level concentration limits in Rule 54.

To d ate, all sources have demonstrated compliance with the existing concentration limits. Engineering staff expects that any sour ce that implements BACT

will read ily demonstrate compliance with the proposed ground or sea level concentration limit.

Cost

- Effec tiveness

The costs associated with compliance with the proposed ground or sea level SO 2 concentration limits are associated with air dispersion modeling to demonstrate compliance and possibly equipment or work practices to reduce SO 2 emissions. However, the addition of the 2010 NAAQS SO 2 standard would

not increase the need for dispersion modeling since the significant emission rate (the annual emission increase for a new or modified source that requires modeling to demonstrate compliance with the NAAQS) has not changed

.

AERMOD modeling software can be obtained for

free from several sources on the Internet. Software packages with additional functionality are available

for an initial cost of between $1

, 500 and $2

, 000 and up to $600 annually for updates and technical
support. AERMOD is a steady

- state dispersion model designed for short

- range (up to 50 kilometers) dispersion modeling of air pollutant emissions from stationary industrial sources.

During the Authority to Construct process, the

District no rmally performs a screening analysis at little or no cost to the applicant. Rarely, a facility would be required to hire a consultant to conduct any required air dispersion modeling. The cost for a screening level model run to demonstrate compliance

for a single source in a simple facility would likely be

no more than $1

, 000. The cost of a more complex

model for a few emission points in a more complex building environment w ould likely be between $2,000 and $10,000. Very complex modeling using the more

s ophisticated CALPUFF model can run well over $20,000. CALPUFF is an advanced non

- steady

- state meteorological and air quality modeling system that

simulates the effects of time

- and space

- varying meteorological conditions on pollution transport,

transforma tion, and removal. CALPUFF can be applied for long

- range transport and for complex

terrain.

The cost s of additional SO 2 emissions reductions or other strategies to achieve compliance with the new

limitations are difficult to estimate . Since BACT

must be applied to all new or modified sources of

SO 2 , any additional control technologies beyond

BACT will likely be experimental and/or not previously implemented on a commercial scale. Thus

the cost of implementi ng this proposed rule revision is impossible to predict.

In the Regulatory Impact Report for the 2010 SO 2 NAAQS, US EPA estimated that unidentified controls would cost $15,000/ton of SO 2 removed on an

annualized basis. 9 The BACT cost effectiveness screening level adopted by the District’s governing

board in December 1988 is $5 per pound of SO 2 emissions reduced (equivalent to $10,000 per ton)

. 10

This indicates that the cost of some controls that might be required under the proposal might exceed

the District BACT screening levels for cost. However, i t should be noted that $10,000 in 1988 dollars is equivalent to $19,109 in 2012 dollars.

It is important to note that all costs discussed here are based on compliance with the 2010 SO 2 NAAQS. Compliance with the 2010 NAAQS limit is required regardless of the amendments to Rule 54 so the proposed revisions will not increase costs. Since the

combustion emission limit is less restrictive than the Rule 64 limits even with the correction for oxygen content and dry basis, it is unlikely that any source

will ex ceed the limit and incur additional cost. The proposed changes to the planned flaring excess emission fee calculation merely align the rule text with actual practice so no increase in fees is expected.

Incremental Cost

- Effectiveness Analysis

Health an d Safety Code Section 40920.6(a) requires

air agencies to identify one or more potential control options, assess the cost

- effectiveness of those options,

and calculate the incremental cost

- effectiveness. Health and Safety Code Section 40920.6 also require s an assessment of the incremental cost

- effectiveness for proposed regulations for ozone, carbon monoxide (CO), sulfur oxides (SOx), nitrogen oxides (NOx), and their precursors.

Incremental cost

- effectiveness is defined as the

difference in control costs divided by the difference in emission reductions between two potential control options achieving the same emission reduction goal of a regulation. The proposed amendments to Rule 54 do not specify control option s and may not require

emission reductions. Therefore, the incremental cost

effectiveness analysis does not apply to this proposed rulemaking.

Socioeconomic Analysis

Assembly Bill 2061 (Polanco), which became effective January 1, 1992, requires that the District ’s governing b oard consider the soci oeconomic impactsStaff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 8

of any new rule or rule revision. The Board must

therefore evaluate the following socioeconomic

information on proposed amendments to Rule 5 4.

(1) The type of businesses , including small

business es , affected by the rule or regulation.

The adoption of amendments to this rule may directly affect the 21 permitted operations in the
county considered significant in this report (see Table 1). These include crude oil production, port and military base operations, electricity generation, mi neral processing

, sewage

treatment and other operations that involve the

combustion of sulfur

- containing fuels

.

(2) The impact of the rule amendments on employment and the economy of the region.

Revisions to this rule are not expected to have a negati ve impact on either employment or the economy of Ventura County. N ew or modified sources are already required to implement BACT, and the proposed property line limits

would not likely cause additional cost to industry. In addition, the proposed limits ar e currently in effect as NAAQS, so this rule does not impose more stringent requirements.

(3) The range of probable costs, including costs to industry or business, including small business, of the rule or regulation.

The proposed rule amendments would n ot cause any specific costs to most, if not all, existing facilities. If USEPA designates Ventura County

attainment for SO 2 , then no modeling of existing

facilities would be required since none exceed 100 tons per year actual emissions. If US EPA
requests modeling for some sources, modeling

would likely cost between $1,000 and $20,000 per facility.

All new and modified sources of SO 2 are evaluated for compliance with Rule 54 limits in the Authority to Construct process. This is normally done without ad ditional cost to the applicant through fuel content analysis or engineering calculations. The addition of the

2010 SO 2 NAAQS limit to Rule 54 will not change this process, though sources not considered trivial might require increased scrutiny due to the s tringency of the proposed

limit

.

New and modified sources with SO 2 emissions

increase of 40 tons per year or more w ould be required to conduct dispersion modeling to determine compliance with the proposed limit. This could add $20,000 or more to the cost of implementing the project. If additional controls are required, it could add hundreds of thousands of dollars to the projec t cost. Note however that the proposed limit is a Federal NAAQS and these costs would be incurred regardless of this

rule amendm ent.

Small businesses with SO 2 emissions less than 40 tons per year or 5 pounds per hour would not

be likely to incur any additional costs.

(4) The availability and cost

- effectiveness of alternatives to the rule or regulation being proposed or amended.

Since the proposed rule amendments are merely adding new Federal requirements to the District rules, no other alternatives were evaluated

.

(5) The emission reduction potential of the rule or regulation.

Since the proposed ground or sea level

concentra tion limit does not directl y affect emissions, it is difficult to determine if any

emissions reductions would be necessary as a

result of the rule amendments

.

(6) The necessity of adopting, amending, or repealing the rule or regulation to attain state

and federal ambient air standards pursuant to Chapter 10 (commencing with Section 40910).

This rule amendment is necessary to bring the

District Rule 54 up to date with the current

Federal SO 2 NAAQS.

ENVIRONMENTAL IMPACTS OF METHODS OF COMPLIANCE

Cali fornia Public Resources Code Section 21159 requires the District perform an environmental analysis of the reasonably foreseeable methods of compliance for the subject amended rule

. Pursuant to paragraphs 21159(a)(1) to (3), t he environmental analysis must include the following information on the proposed revisions to Rule 54 :

(1) An analysis of the reasonably foreseeable environmental impacts of the methods of compliance.Staff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 9

(2) An analysis of the reasonably foreseeable feasible mitigation measures. (3) An a nalysis of the reasonably foreseeable alternative means of compliance with the rule or regulation.

Table 4 lists all reasonably foreseeable compliance methods, the environmental impacts of those methods, and

feasible measures that could be used to mitigat e the identified environmental impacts of compliance methods, if any

.

Table 4 Environmental Impacts of and Feasible Mitigation Measures for Methods of Compliance Compliance Methods (including all reasonably foreseeable alternative means of compliance) Rea sonably Foreseeable Environmental Impacts Reasonably Foreseeable

Feasible Mitigation Measures
Exhaust stack reconfiguration (not to exceed Good Engineering Practice height) Environmental Impacts: None

– this option neither reduce s emissions n or

create s additional emissions of other pollutants

. N/A

Switch fuel to lower sulfur content

fuels Environmental Impacts: None

– this option reduces emissions without creating additional emissions of other pollutants or additional waste streams

. N/A

Install ad d

- on control device s such as

scrubber s or baghouse s with lime injection Air Quality Impacts: Scrubber or baghouse technology could increase particulate emissions

. District rules limit particulate emissions and require h igh efficiency control devices that mitigate these impacts

. Water Impacts: Improper disposal of scrubber liquor could impact water

resources

. Compliance with wastewater discharge standards and waste disposal requirements would mitigate these impacts. Solid Waste Disposal Impacts:

Sorbe nts from scrubber system may be disposed of in landfills. Certain sorbent systems create

gypsum
, which can be sold on

commercial markets to avoid impacts to landfills

. Noise Impacts: Fans and equipment

associated with add

- on controls may

increase noise levels. Sound wall s or enclosures may be

constructed around the control equipment to mitigate these impacts as required by noise

ordinances and industrial hygiene

standards

. Refined computer modeling of SO 2 concentrations at the property line Environmenta l Impacts: None

– this option would merely develop more

accurate estimates of SO 2 concentrations and would not reduce actual emissions or pollutant

concentrations. N/A

Ambient air monitoring of SO 2 concentrations Environmental Impacts: None

– this optio n demonstrates compliance with

ambient air standards and would not affect actual emissions or pollutant

concentrations. N/A

This analysis demonstrates that th e adoption of the proposed revisions to Rule 5 4 w ould not have a significant

adverse effect on t he environment.Staff Report Rule 54 & Rule 42 Revisi ons 11 /13 FINAL Page 10

REFERENCES

1 2012 Area Designations for State Ambient Air Quality Standards SULFUR DIOXIDE. Cal ifornia Air Resources

Board Web site

. http://www.arb.ca.gov/desig/adm/2012/state_so2.pdf

. February , 2012

. Accessed May 13, 2013.

2 Title 40, Code of Federal Regulations, Part 50 §50.4 National primary ambient air quality standards for sulfur oxides (su lfur dioxide). http://www.ecfr.gov/cgi

- bin/text

idx?c=ecfr&SID=94a55a14061941755da6f1f646d09c88&rgn=div8&view=text&node=40:2.0.1.1.1.0.1.4&idno=40

. Accessed June 11, 2013.

3 Goldstene J. N . Recommended Area Designations For The 2010 Federal Sulfur Dioxid e ( SO 2 ) Standard Staff Report. United States Environmental Protection Agency Web site

. http://www.epa.gov/so2designations/recletters/R9_CA_rec_wtechanalysis.pdf

. June 20 , 2011. Accessed May 13,

2013

4 Blumenfeld J

. United States Environmental Protection Agency Web site

. http://www.epa.gov/so2designations/eparesp/09_CA_resp.PDF . February 6, 2013 . Accessed May 13, 2013

5 Primary National Ambient Air Quality Standard for Sulfur Dioxide; Final Rule. United States Environmental Protection Agency Web site

. http://www.epa.gov/ttn/naaqs/standards/so2/fr/20100622.pdf

. June 22, 2010. Accessed May 13, 2013

6 General Guidance for Implementing the 1

- hour SO 2 National Ambient Air Quality Standard in Prevention of Significant Deterioration Permits, Including an I nterim 1

- hour SO 2 Significant Impact Level. United States Environmental Protection Agency Web site . (2010, June). http://www.epa.gov/region07/air/nsr/nsrmemos/appwso2.pdf

. August 23, 2010. Accessed May 13, 2013

7 Guidance for 1

- Hour SO 2 NAAQS SIP Subm issions. United States Environmental Protection Agency Web site

. http://www.epa.gov/air/sulfur dioxide/pdfs/DraftSO2Guidance_9

- 22

- 11.pdf

. September 22, 2011. Accessed May 13, 2013

8 “Approval and Promulgation of Implementation Plans; California State Im plementation Plan Revision, Ventura County Air Pollution Control District,” 65 Federal Register 135 (22 February 2000) pp. 8676

- 8679.

9 Final Regulatory Impact Analysis (RIA) for the SO 2 National Ambient Air Quality Standards (NAAQS). United

States Enviro nmental Protection Agency Web site

. http://www.epa.gov/ttn/ecas/regdata/RIAs/fso2ria100602full.pdf

. June 2010. Accessed May 13, 2013

10 Villegas M. BACT Implementation Permitting Policy. Ventura County Air Pollution Control District Web site

. http://ww w.vcapcd.org/pubs/Engineering/permits2000/BACTPolicy111009.pdf

. November 10, 2009. Accessed May 13, 2013