1

5/08/2012

FINAL REGULATORY SUPPORT DOCUMENT

WIDESPREAD USE for ONBOARD REFUELING VAPOR RECOVERY and STAGE II WAIVER

DECOMMISSIONING STAGE II VAPOR RECOVERY

FINANCIAL BENEFITS AND COSTS

MAY 8, 2012

US EPA

OAQPS/OTAQ
2

BACKGROUND

The methodology for capturing gasoline vapors generated during vehicle refueling is in a 

transition phase. Stage II vapor recovery systems (VRS) are gradually being supplanted by vehicle-based 

onboard refueling vapor recovery (ORVR) systems. Stage II VRS capture gasoline vapors at the fuel inlet 

of a vehicle and transfers them to the underground storage tank. ORVR blocks the gasoline vapors from 

exiting the fill neck and instead displaces them to an activated carbon canister on the vehicle where they 

are purged to the engine during vehicle operation. Manufacturers have equipped various vehicles with 

ORVR since 1998. Since 2006, all newly manufactured passenger cars and light trucks and even some 

heavy-duty gasoline vehicles have incorporated ORVR controls. Once vehicles equipped with ORVR are 

in widespread use, using Stage II VRS on fuel dispensers under the program as now structured in most 

states offers little or no additional emissions benefit, especially as ORVR phase-in continues. 1

Under section 202(a)(6) of the Clean Air Act (CAA), EPA has authority to determine a time when 

ORVR is in widespread use and to then waive or revise the CAA section 182(b)(3) statutory requirement 

for installing and operating Stage II VRS equipment in serious, severe and extreme ozone nonattainment areas. Subsequent to this determination, state and local air quality management agencies 

may seek state implementation plan (SIP) revisions to permit gasoline dispensing facilities (GDF) to 

discontinue use of Stage II VRS and follow recommended procedures for decommissioning the 

equipment and vapor vent piping.

In this final rule rulemaking (FRM), EPA is establishing a date when ORVR will be considered in 

widespread use and the statutory requirement for serious, severe and extreme ozone non-attainment 

areas to adopt Stage II VRS is waived. Once this FRM takes effect, this finding gives states the option to 

conclude at that date or some other date in the future that the effectiveness of Stage II VRS programs 

have reached a point where the emissions benefit relative to the control from ORVR will no longer 

justify the cost of installing new Stage II VRS systems or maintaining existing ones. In some cases, there 

is, or could be, a net emissions dis-benefit associated with continuing to employ Stage II VRS.

2

 However, 

it should be noted that removing Stage II will leave refueling emissions from the declining population of 

non-ORVR equipped vehicles uncontrolled.3This rule gives states the option to revise their ozone SIPs to 

remove some or all of their Stage II requirements but does not mandate any action.

The purpose of this document is to present the financial benefits and costs associated with 

removing Stage II VRS from GDFs. The financial information is useful when evaluating cost impacts or 

burdens or cost savings when removing Stage II VRS equipment.

 

1

The California Air Resources Board Enhanced Vapor Recovery (EVR) program includes additional regulatory 

provision to improve the overall effectiveness of Stage II VRS in California. See 

http://www.arb.ca.gov/vapor/vapor.htm for more detail.

2

See discussion in EPA memorandum entitled, Onboard Refueling Vapor Recovery Widespread Use Assessment in 

public docket EPA-HQ-OAR-2010-1076.

3 As is discussed in the preamble to the final rule, the population of ORVR equipped vehicles and the fraction of 

gasoline dispensed to ORVR vehicles increases each year. For example by the end of 2015, over 81 percent of 

vehicles will be ORVR-equipped and over 86 percent of gasoline will be dispensed to ORVR vehicles. The 

control lost from removing Stage II would vary according to the real Stage II in-use efficiency value and the 

impact of the ORVR/Stage II compatibility effect. 
3

STAGE II VAPOR RECOVERY SYSTEMS CURRENTLY IN USE 

Stage II VRS are required to be used at certain GDFs located in serious, severe, and extreme nonattainment areas for ozone under CAA section 182(b)(3). It has also been used in certain areas of the 

Ozone Transport Region (OTR) to meet separate comparable emissions reduction requirements under 

CAA section 184(b)(2) of the CAA, but that section does not absolutely require the use of Stage II in 

these areas and is not directly affected by the CAA section 202(a)(6) widespread use finding and waiver

of the CAA section 182(b)(3) Stage II requirement.

4

 To meet the CAA section 182 and section 184 

provisions noted above, Stage II VRS are in place in a total of 20 states and the District of Columbia.5 Six 

additional states have adopted Stage II VRS regulations to address issues such as ozone attainment and

maintenance and air toxics.6 These states use technically the same hardware and related requirements 

as are used in the serious, severe, and extreme areas, but removal actions by these states does not 

depend on EPA’s widespread use finding, since they are not subject to the CAA section 182(b)(3) 

requirement. In total, 26 states and the District of Columbia have included these control measures in 

their federally-approved SIPs in the form of generally applicable regulatory requirements governing all 

GDF that exceed the relevant gasoline throughput criteria. 

Based on conversations with state agency and industry association representatives and our own 

assessments, EPA estimates that Stage II VRS are in use at GDFs providing about 40 percent of the 

gasoline consumed nationally. This estimate is based on the sum of gasoline consumption in states 

which require Stage II VRS in all counties, plus the gasoline consumption in other states in which Stage II 

VRS are required only in specific counties. We estimate that Stage II VRS are installed at about 47,500 

GDF’s in part or all of the 26 states and the District of Columbia noted above. This includes retail, 

private, and government GDFs. In most cases this involves GDFs using underground storage tanks, but 

in a few locations it includes aboveground storage tanks with volumes above a set threshold such as 

250-500 gallons. Of these, based on gasoline consumption in these 27 jurisdictions, EPA estimates that 

about 4,900 are in areas not subject to CAA section 182(b)(3). Additionally, about 330 GDFs in Vermont 

currently covered under its CAA section 184(b)(2) SIP are expected to remove these controls by 2013 as 

a result of a separate state regulatory action. Finally, of the remaining 42,270 GDFs in these states, 

about 11,700 GDFs in California are expected to retain this equipment until later in this decade. This 

leaves about 30,600 GDFs which may potentially remove Stage II VRS in response to an EPA 

determination of ORVR widespread use and waiver of the CAA section 182(b)(3) requirement. 

EPA received a number of comments on the NPRM stating that the potential cost savings would 

not be realized in the OTR states if EPA did not provide updated guidance to enable states in the OTR to 

meet the emissions reduction requirements of CAA section 184(b)(2) but still be able to remove Stage II 

VRS they previously chose to adopt to achieve those reductions. In the NPRM, EPA proposed the idea 

that the comparable emissions reduction measures of section CAA section 184(b)(2) could be based on 

an assessment of the refueling emission reduction benefits of Stage II incremental to ORVR, rather than 

 

4

See EPA report “Stage II Comparability Study for the Northeast Ozone Transport Region,” EPA-453/R-94-011, 

January 1995 for more information. 

5

The States of Arizona, California, Connecticut, Delaware, Georgia, Illinois, Indiana, Louisiana, Maryland, 

Massachusetts, Missouri, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Texas, Virginia, 

Wisconsin, and the District of Columbia have GDF with Stage II VRS under these provisions. The requirement in 

Maine which was implemented under CAA §184(b)(2) (OTR) was removed at the end of 2011; the requirement in 

Vermont which is also under §184(b)(2) will be removed at the end of 2012. Neither is included in this analysis.

6

These include Kentucky, Nevada, Ohio, Oregon, Tennessee and Washington.
4

the reductions that Stage II would have achieved assuming the absence of ORVR. As discussed in the 

FRM, we are issuing updated guidance to the states on how they might conduct this comparability 

analysis, and we believe its application could create a framework and pathway for a state in the OTR to 

satisfy the comparable emissions reduction measures requirements if it elects to seek removal of Stage 

II controls.7,8

MODEL GDF

Today the average GDF with Stage II VRS pumps about 1.2 million gallons per year, or about 

100,000 gallons of fuel per month.9 While it varies somewhat by design and location, this average GDF 

would have 5 dispenser cabinets with 10 fueling points or nozzles connected by associated piping with 

fuel product being stored in an average of four underground storage tanks. There are two types of 

Stage II VRS: balance and vacuum assist. It is estimated that nationally about 70 percent of GDFs 

employ vacuum-assist type systems and 30 percent area balance-type systems, although this ratio can 

vary greatly from state to state. 

REMOVAL OF THE STAGE II VRS REQUIREMENT

EPA has determined that ORVR is in widespread use nationwide on the effective date of this 

FRM and thereby waives the CAA section 182(b)(3) requirement after that date. After the effective date 

of the final rule, any state currently requiring Stage II VRS under CAA section 182(b)(3) may seek EPA 

approval to revise its state regulations to no longer require GDFs to install and implement Stage II. 

Nonetheless, it should be noted that this action would require EPA to approve a revised ozone SIP 

before a state could permit decommissioning of Stage II systems. This action would not require any 

state to remove Stage II VRS if it elected to retain or upgrade controls.

DECOMMISSIONING OF STAGE II SYSTEMS

The Petroleum Equipment Institute (PEI)10 and at least four states have recommended practices 

or specific requirements for decommissioning Stage II systems. The PEI guidance is especially instructive 

as it was developed by industry experts with a focus on regulatory compliance and safety. It includes

the following steps which involve either hardware costs, labor costs, or both. Most steps apply to both 

balance and vacuum assist type systems, while some only apply to vacuum assist systems. The steps 

listed below assume that underground vapor vent piping is left in place and no construction costs would 

be incurred to break up and repair the GDF driving surface. 

 Relieve pressure in the tank ullage.

 Remove and collect all liquids from equipment.

 

7

The OTR is comprised of the states of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode 

Island, New York, New Jersey, Pennsylvania, Maryland Delaware, Virginia, and the District of Columbia. Only 

Maine and Vermont do not have at least one area covered by section 182(b)(3).

8

EPA intends to develop guidance titled (tentative) "Guidance on Removing Stage II Gasoline apor Control 

Programs from State Implementation Plans and Assessing Comparable Measures."

9

Estimate based on dividing EPA’s estimate of fraction of nationwide annual consumption covered by Stage II VRS 

by the total estimated GDFs with Stage II VRS and dividing by 12 months. 

10 Recommended Practices for Installation and Testing of Vapor-Recovery Systems at Vehicle Fueling 

Sites.PEI/RP300-09.
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 Remove or disable vacuum-assist vapor pump(s), if installed.

 Reprogram dispenser electronics as required related to vacuum assist pump at each dispenser 

or centrally if one pump.

 Disconnect and cap off the vapor line at the dispenser end and the tank end for each dispenser.

 Replace Stage II nozzles and all related aboveground dispensing hardware with conventional 

hardware for each dispenser.

 Remove Stage II operating instructions.

 Conduct tank system integrity test.

 Assure overfill device is present and fully functional.

 Restore the facility to operating status.

 Maintain documentation of the procedures used in decommissioning.

 Report results to owner and/or regulatory authority, as required.

 Update any registration or certificates to reflect that Stage II equipment is no longer in service.

COSTS OF DECOMMISIONING STAGE II VRS

After a state acts to remove its Stage II VRS requirement, each GDF owner in that jurisdiction

should ascertain the optimum point at which to initiate the decommissioning process, within the time 

boundaries of the state requirements. Not all states will act simultaneously, and within a given state not 

all GDFs will initiate this effort at the same time. We expect the GDF owner will pick the optimum date 

for decommissioning which minimizes total cost and minimizes disruption to business operations. To 

accomplish this, we expect the GDF owner to pick a decommissioning date on or near a future date for 

standard maintenance for their GDF pump hanging hardware. 

Once decommissioning starts, this sets in motion a series of actions and ongoing changes in 

future operations in several categories. These changes lead to both costs and reductions in costs 

(savings). This part of the analysis discusses the costs and savings related to these actions and ongoing 

changes. These will be identified as one time or recurring costs or savings for the model GDF.

ANNUAL BASIS PER GDF

The costs presented in this analysis are divided between aboveground hardware and dispenser

related activities. Most aboveground hardware component costs involve the nozzles, hoses, swivels, 

check valves, and other related components needed at the dispensers to dispense fuel and capture the 

vapors displaced during refueling. The dispenser related activities involve isolating and capping the 

vapor piping, dealing with vacuum assist pumps, and other related actions. The aboveground costs at a 

GDF are driven by the number of nozzles present at the GDF, while the dispenser costs depend mostly 

on the number of dispensers. This analysis will break down costs into aboveground and dispenser

portions. 

Table 1 shows the aboveground hardware costs for the model GDF mentioned here to represent 

the typical service station with Stage II VRS. These costs are associated with replacing aboveground 

hardware of the Stage II VRS with conventional nozzle hardware. After moving to conventional 

dispensing hardware, the GDF will not be required to maintain nozzles with bellows, coaxial hoses and 

high hang hose retractors, special breakaway fittings, swivels, flow limiters, vapor check valves and hose 

splitters. As can be seen in Table 1, for the model GDF used here, average replacement costs drop by 

$3580. This savings would be realized at decommissioning since maintenance was presumed to be due 

anyway and at each subsequent maintenance interval for the GDF.
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TABLE 1: COST COMPARISON OF HARDWARE COMPONENTS

ITEM COST OF STAGE II VAPOR 

RECOVERY EQUIPMENT

COST OF NON-STAGE II 

EQUIPMENT

Multi-product Single 

Nozzle Dispenser

Multi-product Single 

Nozzle Dispenser

HANGING HARDWARE COMPONENTS

FOR 5 DISPENSERS (10 NOZZLES)

Vacuum pump, vapor 

recovery Nozzle and 

coaxial hose, breakaway, 

flow restrictor, swivel 

adaptors, vapor caps, vent 

caps, other required 

equipment

Nozzle and traditional 

fuel hose, breakaway, 

check valves, clamps and 

seal kits and other 

required equipment

OVERALL COST ESTIMATE #1 $4,900 $1,540

Franklin Fueling Systems

OVERALL COST ESTIMATE #2 $3,500 $1,200

Graffco Equipment

OVERALL COST ESTIMATE #3 $6,900 $2,060

Nozzlemax *

OVERALL COST ESTIMATE #4 $3,600 $1,920

JME Ellsworth Co.

OVERALL COST ESTIMATE #5

State of Maine DEP*

$7,100 $1,360

TOTAL AVERAGE COSTS $5,200 $1,620

SAVINGS PER GDF $3,580

*vacuum assist system

LABOR AND LOST REVENUE COSTS OF DECOMMISSIONING

Labor costs for maintaining dispensers and hanging hardware occur each time maintenance 

occurs. Since this analysis assumes that Stage II decommissioning occurs at a point when GDF 

maintenance would have occurred anyway, many of the labor and other business costs normally 

associated with this activity are not encountered here. This leaves only one time labor and other costs 

related to the decommissioning of the Stage II VRS dispensers. These include direct labor costs for 

activities such as disconnecting the vapor line between the dispenser and the underground storage tank 

and capping at each point of disconnection, disabling and/or removing vacuum pumps if used, and other 

activities related to modifying the hardware and electronics within the dispenser to disable or remove 

Stage II VRS. In addition, there would be administrative labor costs related to removing any Stage II 

related labels or directions on the dispenser, maintaining documentation of the procedures used in the 

decommissioning, reporting the results to owner and/or regulatory authority, as required, and updating 

any registration or certificates to reflect that Stage II equipment is no longer in service. Underground 

vapor piping would not be uncovered in most cases, but would be capped at the dispenser and remain 

connected to the tank.

As summarized in Table 2 in this analysis, we therefore include time to modify hardware within 

each dispenser as discussed above and time to complete documentation and put the station back in full 

operation. The personnel certified to conduct these activities would spend between 1 and 3 hours at 
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each dispensing unit to exchange equipment and complete the administrative tasks at a billed labor rate 

between $70 to $120/hour. The model GDF we are using has five dispensers. To be reasonably 

conservative for estimating costs, we have chosen the higher labor rate and 10 labor hours to 

decommission the model GDF. Since there will be some miscellaneous parts and materials related to 

the within dispenser work these have been included at 20 percent of direct labor. Two hours have been 

included for completion of administrative tasks. 

 There are two other categories of costs associated with this decommissioning. It should be 

noted that the re-commissioning process for a non-stage II GDF would include tank integrity tests such 

as a pressure decay test. Costs for these tests are not included here as they are already required 

annually under applicable state and federal regulations for Stage I control requirements and NESHAP for 

GDFs.

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 In addition, the work on the dispensers and nozzles will put at least part of the GDF out of 

operation over the course of the day as changes are made to the various dispensers. To some degree, 

this business disruption would occur anyway during the normal maintenance cycle. However, to be 

conservative here, we estimate foregone sales of about 1650 gallons (1/2 of a day’s throughput at the 

model GDF) and a lost gross profit of about $300 at each GDF to account for within dispenser work that 

occurs only at decommissioning.

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TABLE 2: ONE TIME COSTS ESTIMATES OF DECOMMISSIONING DISPENSERS

ITEM COST OF 

DECOMMISSIONING 

STAGE II VRS

LABOR COSTS 5 Multi-product 

Dispensers

Direct Labor for reconfiguration of 5 dispensers:

2 hours per dispenser @ $120 labor rate(1, 2) $1,200

Miscellaneous dispenser hardware/parts @20% of direct labor $240

Administrative tasks $240

TOTAL LABOR COSTS $1,680

Lost gross profit for one-half day out of service

1650 gallons @ $0.185/gal gross marketing margin 13 $300

TOTAL LABOR AND LOST REVENUE COSTS $1,980

Source: 1-Core Engineering, Inc.; 2-OPW, A Dover Company

FINANCIAL BENEFITS OF REMOVING STAGE II VRS

 

11 See recommendations in Enforcement Guidance for Stage II Vehicle Refueling Control Programs, U.S. EPA, Office 

of Air and Radiation, Office of Mobile Sources, December 1991, and requirements in 40 CFR part 63 subpart 

CCCCCC.

12 EPA recognizes that to some degree the revenues and profits arising from these lost sales would be picked up by 

other nearby GDFs and that on average (over time in a given area) these gains/losses could even out. 

13 The gross margin on gasoline in 2011 was 18.5 cents per gallon or about 5.3% of the cost of the fuel. See 

http://www.nacsonline.com/NACS/Resources/campaigns/GasPrices_2012/Documents/NACSFuelsReport2012__

USPetroleumIndustryStatisticsDefinitions%20_black.pdf -- downloaded on February 26, 2012. 
8

The financial benefits of removing Stage II VRS arise as a result of reduced life cycle costs. For 

purposes of this analysis, the costs and savings for the first 12 months will be presented as beginning

when decommissioning first occurs and for the subsequent 12-month periods (without initial one-time 

costs). The direct costs (and cost savings) for hardware and labor were presented above. In addition 

there are other recurring costs and cost savings which will occur in the first year and subsequent 

periods. The recurring costs and costs savings fall into the following categories: foregone vapor recovery 

savings; reduced dispenser operating costs; and elimination of any annual costs related to system 

testing, inspections, fees, training and record keeping. This third category of costs is identified in EPA 

enforcement guidance related to Stage II VRS and in state Stage II SIPs.14 15 Table 3 presents the annual 

reduced dispenser operating and maintenance cost for the model GDF on an annual (or 12 month) basis.

Beyond this, GDFs will lose the vapor recovery savings originally expected with Stage II VRS. 

Even though ORVR is in widespread use, some benefit would have continued to accrue into the future. 

The methodology for calculating this benefit is presented in EPA’s Stage II technical guidance 

document.16 Using 86 percent Stage II efficiency, 85 percent ORVR penetration and $3.04 per gallon 

(2011 average retail gasoline price without tax included according to the Department of Energy), the 

foregone annual recovery savings is about $1230 for the model GDF in the year Stage II is removed.17 

This value would change every year due to the volatility of gasoline prices and the continued phase-in of 

ORVR vehicles. While the effect of the ORVR phase in can be predicted from Table 2 of the final rule 

preamble, predicting future gasoline prices is difficult. For purposes of this analysis, the $1230 will be 

kept constant. 

TABLE 3: OPERATING AND MAINTENANCE COSTS COMPARISON

STAGE II VRS COSTS

(SAVINGS)

CONVENTIONAL

COSTS (SAVINGS)

PER MODEL GDF

Stage II vacuum pump maintenance (1,2, 4, 5) $500 $0

Eliminate electricity costs of operating vacuum pump(5) $144 $0

Training and Certification of operators18(1, 2) $600 $0

GDF Compliance costs (monitoring & recordkeeping)19(1, 2) $600 $0

Vapor Recovery Savings ($1230) $0

OPERATING AND MAINTENANCE SAVINGS WHEN 

SWITCHING TO CONVENTIONAL EQUIPMENT ($614)

Source: 1-NESCAUM; 2-State of Vermont; 3-Franklin Fueling Systems; 4-Core Engineering, Inc.; 5- OPW, A Dover 

Company.

 

14 Enforcement Guidance for Stage II Vehicle Refueling Control Programs, U.S. EPA, Office of Air and Radiation, 

Office of Mobile Sources, December 1991.

15 See https://www.jmmmgt.com/kc/ for an unofficial but useful summary of state Stage II requirements for the 

GDF operators.

16 “Technical Guidance – Stage II Vapor Recovery Systems for Control of Gasoline Refueling Emissions at Gasoline 

Dispensing Facilities Vol. 1,” EPA-450/3-91-022a, November 1991, p. 5-16. 

17 See http://www.eia.gov/todayinenergy/detail.cfm?id=4570 downloaded on February 14, 2012

18 Assumes one operator trained each year for 40 hours ($10 per hour) at a scheduled one week for fee class.

19 This assumes ten minutes per day at $10 per hour. 
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COMBINED HARDWARE AND OPERATING SAVINGS

The results of Tables 1, 2, and 3 can be used to estimate costs for Stage II decommissioning and 

at the first maintenance point thereafter. These are shown in Table 4. The recurring costs (savings) are 

dependent on the time length of the GDF maintenance cycle. Industry sources indicate a life cycle of 

about 18 months for above ground hardware. Thus costs (savings) in the time period following 

completion of initial decommissioning would start again 18 months later. For purposes of this paper,

this analysis is on a 12 month basis and assumes the hanging hardware cost savings, which would occur 

at the 18 month point, are apportioned at 2/3 of total per 12 months. 

TABLE 4: 12 MONTH COSTS (SAVINGS) FOR DECOMMISSIONING STAGE II VRS FOR MODEL GDF

ITEM INITIAL YEAR RECURRING 

HANGING HARDWARE ($2,363) ($2,363)

LABOR COSTS $1,680 $0

LOST GROSS PROFIT $300 $0

OPERATING AND MAINTENANCE ($1,844) ($1,844)

VAPOR RECOVERY $1230 $1230

TOTAL ($997) ($2,977)

An illustration may be helpful here. If a GDF was decommissioned in January 2015 there would 

be a savings of $997 at that time. The next maintenance event would be assumed to be July 2016. In 

this illustration, for 2016 the costs (savings) would be based on the 12 month operating/maintenance 

savings, the 12 month foregone vapor recovery savings, and the hanging hardware savings. The total 

savings would be $2,977. This savings value would continue for subsequent twelve month periods, since 

hanging hardware is apportioned at 2/3 and other items from Table 4 are already on a 12-month basis.

COST DIFFERENCE OF MAINTAINING STAGE II VRS VS CONVENTIONAL DISPENSING SYSTEM

Stage II has been a part of VOC emission control in many areas for some time. Areas 

throughout the country in states listed in footnote 4 would be potentially affected by this action, if 

states choose to seek SIP revisions to remove Stage II requirements from their SIPs. EPA believes that 

not all of these jurisdictions will remove their requirements for the GDF in their states at the same time. 

As mentioned earlier, California has 11,700 GDFs and may keep the Stage II requirements in place for 

the rest of this decade. EPA estimates that there will be approximately 30,600 GDFs in serious, severe, 

and extreme ozone nonattainment areas that will be given the option to take steps to decommission 

their Stage II VRS after an ORVR widespread use determination by EPA. For purposes of this analysis, it 

is our expectation that, just as was the case for installations, decommissioning will occur over about a 

three year period, with approximately 1/3 of the GDF population affected annually. EPA makes this 

estimate based on the following: 1) in many cases there are not an adequate number of trained 

installers and jobbers to meet a surge in demand, especially with seasonal limitations in areas such as 

New England; 2) states are likely to act to revise their SIPs and state regulations to remove their Stage II 

requirements on different schedules and give varying time periods for action by the GDF owners; and 3) 
10

facilities are expected to wait to dismantle their Stage II systems during their scheduled maintenance 

periods that extend beyond one year. 

Costs and savings were estimated on a per facility basis based on the model GDF described 

above, and the initial and recurring cost savings are calculated on that basis. In terms of understanding 

the overall financial impact, it is useful to assess cost savings during transition years and over the long 

term. To assess impacts during the transition years, initial and recurring model GDF costs may be 

multiplied by the number of GDFs assigned for decommissioning each year, equal to 1/3 of the total (or 

approximately 10,200 GDFs), and those decommissioned in previous years, to estimate the nationwide 

impacts or benefits of this action. The long term 12-month savings in 2011 dollars would simply be the 

product of all decommissioned GDFs (30,600) and $2,977 per 12-months or about $91 million. 

TABLE 5: NATIONWIDE SAVINGS OF REMOVING STAGE II VRS (INITIAL PLUS RECURRING)

COST SAVINGS FOR MODEL PLANT of 120,000 GPM SAVINGS FROM SWITCHING TO 

CONVENTIONAL DISPENSERS OVER 

MAINTAINING STAGE II VRS

12-MONTH MODEL PLANT GDF SAVINGS AFTER STAGE 

II VRS IS REMOVED

INITIAL $997; RECURRING $2,977 

ESTIMATED NATIONWIDE SAVINGS FOR FIRST 12 

MONTH PERIOD IF STAGE II VRS IS REMOVED FROM 

10,200 GDFs

$10,200,000

ESTIMATED NATIONWIDE SAVINGS FOR SECOND 12 

MONTH PERIOD IF STAGE II VRS IS REMOVED FROM A 

TOTAL OF 20,400 GDFs

$40,500,000

ESTIMATED NATIONWIDE SAVINGS FOR THIRD 12 

MONTH PERIOD IF STAGE II VRS IS REMOVED FROM A 

TOTAL OF 30,600 GDFs 

$70,900,000

ESTIMATED ANNUAL LONG TERM NATIONWIDE 

SAVINGS (w/o California) $91,100,000 

Of course, these cost savings will not occur in one year, and as presented above are likely to

increase over several years assuming Stage II is phased out. Thus, it is useful to present these cost 

savings as a net present value in one year. For purposes of this analysis we have selected a base year of 

2013 and for sensitivity have used net present value discount factors of three and seven percent. The 

results of this analysis are shown in Table 6. Note that for “2016 and later” column the savings are 

annual and the net present value savings would be less for each following calendar year.
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TABLE 6: DISCOUNTED SAVINGS OF REMOVING STAGE II VRS (INITIAL PLUS RECURRING)

COST SAVINGS

(From Table 5) 2013 2014 2015 2016

Undiscounted 

(millions) $10.2 $40.5 $70.9 $91.1

NPV 3% (millions) $10.2 $39.3 $68.8 $83.4

NPV 7% (millions) $10.2 $37.9 $61.9 $74.4

In conclusion, the agency has regarded Stage II VRS decommissioning to involve equipment 

replacement, labor, elimination of certain expenses associated with Stage II VRS operation. We have 

estimated costs on a model GDF basis and then multiplied by the number of facilities estimated to 

decommission Stage II VRS and the results indicate a long term substantial annual savings of over $91

million per 12 months, nationwide.

GENERAL DISCUSSION ON COST SAVINGS FOR NEW INSTALLATIONS

The analysis above represents savings that could result upon EPA’s ORVR widespread use finding 

and waiver of the CAA section 182(b)(3) requirement only for GDFs which have currently installed and 

are operating Stage II VRS systems. There are also two other categories of GDFs where savings could 

accrue as a result of the final rule, and for which costs would be incurred in the absence of EPA’s finding 

and waiver. The first is Stage II retrofits for GDFs in current Stage II areas which are now exempt but 

whose throughput in the future exceeds the state levels for exemptions and Stage II retrofits in areas 

which might come under CAA section 182(b)(3) in the future. The second is Stage II installations at 

newly constructed GDFs located in areas currently under CAA section 182(b)(3) and Stage II installations 

at new GDFs in areas whose ozone NAAQS status becomes serious or worse in the future. The savings 

profile resulting from EPA’s finding and waiver for GDFs in these two categories has similar elements to 

those identified above but includes some additional elements as well.

RETROFIT INSTALLATIONS FOR GDFs IN AREAS CURRENTLY REQUIRING STAGE II VRS OR IN AREAS 

DOING SO IN THE FUTURE UNDER SECTION 182(b)(3)

This is the situation faced by many GDFs upon implementation of CAA section 182(b)(3) and 

thus the costs of these installations were studied thoroughly in the early 1990s. The retrofitting of GDFs 

to add Stage II VRS is the most expensive control situation because it includes extensive above ground 

costs per dispenser as well as construction and below ground costs for piping needed to route the 

vapors back from the dispenser to the underground storage tank (UST), trenching, backfilling and 

installation. Above-ground costs are driven by the number of nozzles present at the GDF, while belowground costs are driven by the physical layout of the GDF such as the GDF configuration (i.e., number of 

dispensing islands, distance between islands and distance from islands to UST), the type of system 

(balanced system or vacuum assist system) and other station physical characteristics (amount of 

concrete over UST and amount of backfill material required). In EPA’s Stage II technical guidance 
12

document20, a summary of capital cost estimates were provided for installing Stage II VRS. Taking the 

average of the costs suggested by commenters ($18,715) for Model Plant 4 and applying the 

Department of Labor’s Consumer Price Index Inflation Calculator, the capital outlay in 2011 would 

average about $30,000.21 This would be the potential cost-avoidance savings per GDF, plus the avoided 

annual Stage II VRS operating costs of about $3,000 per year as discussed above. It is not possible to 

fold these potential savings into the total above, because the number of potentially retrofit GDFs in the 

absence of EPA’s ORVR widespread use finding and CAA section 182(b)(3) waiver is not known.

STAGE II VRS INSTALLATIONS AT NEW GDFs IN CURRENT OR FUTURE AREAS SUBJECT TO SECTION 

182(b)(3)

Stage II VRS installation costs at new GDFs in the absence of EPA’s finding and waiver would 

involve mostly above ground hardware. There would be below ground costs for vapor vent piping and 

installation to the dispensers manifold, and underground storage tank, but there would be no extra 

costs for driveway break up and resurfacing. EPA estimates these costs to be about $11,000 for a 

vacuum assist system when applying the Department of Labor’s Consumer Price Index Inflation 

Calculator, leaving a remaining additional cost of about $20,000 per GDF.

22 This $20,000 would be the 

potential cost-avoidance savings per GDF, plus the avoided operating costs of about $3,000 per year as 

discussed above resulting from the final rule. There would be no further business disruption costs since 

these GDFs would be new construction. It is not possible to fold these potential savings into the total 

above, because the number of potentially new GDF installations that could incur costs in the absence of 

EPA’s ORVR widespread use finding and CAA section 182(b)(3) waiver is not known.

 

20 “Technical Guidance – Stage II Vapor Recovery Systems for Control of Gasoline Refueling Emissions at Gasoline 

Dispensing Facilities Vol. 1,” EPA-450/3-91-022a, November 1991, pp. 5-19.

21 Work conducted in Colorado in 2008, estimated retrofit costs of twice this value. See 

http://raqc.org/postfiles/board_meetings/2008/june18/StageIIVaporRecoveryDMA-NFR0608RevFinal.pdf.

22 “Technical Guidance – Stage II Vapor Recovery Systems for Control of Gasoline Refueling Emissions at Gasoline 

Dispensing Facilities Vol. 1,” EPA-450/3-91-022a, November 1991, pp. 5- 13.