United States Environmental Protection Agency Region IX Air Division

Technical Support Document

for EPA’s Notice of Proposed Rulemaking

for the California State Implementation Plan as submitted by

the California Air Resources Board

EPA ’s Anal ys is of San Joaquin Valley

Unified Air Pollution Control District’s Rule 4402, Crude Oil Production Sumps

October 20 1 0 Prepared b y J oanne Wells Approved b y Andrew Steckel2

San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD ) Submitted Rule  Rule 4402, Crude Oil Production Sumps originally adopted on April 11, 1991 as Rule 465.2, amended on December 17, 199 2, and submitted on August 24, 2007. The submittal was determined complete on September 17, 2007. There are no other sub mittal s of th i s rule on which EPA has not acted. Applicable SIP Rule  The SIP
- approved rule is SJVUAPCD Rule 465.2, Crude Oil Production Sumps adopted on April 11, 1991, amended on September 19, 1991 and approved into SIP on December 13, 1994 (59 FR 64132)
. Background On January

2, 2008 (73 FR 48), EPA published a direct final approval of revisions to the California State Implementation Plan (SIP). These revisions concerned local rules that address reduction of animal matter, and volatile organic compound (VOC) emissions from crude oil operations and petroleum refinery equipment, asphalt paving and maintenance, and petroleum solvent dry

cleaning
. The direct final action was published without prior proposal because EPA anticipated no adverse comment. The direct final rule stated that if adverse comments were received b y February 1, 2008, EPA would publish a timely removal in the Federal Register
. EPA received a timel y adverse comment. Consequently, we removed the direct final approval of SJVUAPCD Rules 4 104, 4402, 4404, 4453, 4454, 4625, 4641, and 4672. (See 73 FR 13440) In today ’s action we are addressing SJVUAPCD Rule 4402. We do not intend to take final action based on our January

2008 proposal regarding this rule. As a result, we are not providing a thorough summary

or reply to comments submitted in response to our January 2008 proposal regarding the SJVUAPCD Rule. Generally , the comments included concerns regarding the estimated emissions from crude oil sumps, the large number of exemptions in the rule and whether this rule complied with the requirements for reasonably available control technology (RACT) described in CAA Section 182(b)(2) and elsewhere. Purposes of Rule and Rule Amendments Section 110(a) of the CAA requires states to submit regulations that control VOCs, oxides of nitrogen, particulate matter, and other air pollutants which harm human health and the environment. Th i s rule was developed as part of the local agency ’s program to control VOC emissions
. Specifically , Rule 4402 is designed to limit VOC emissions from crude oil production sumps . Rule amendments include:  The rule has been renumbered and the format updated.  Rule purpose is added.  Definition of VOC is deleted.  The exemptions for sumps at petroleum refineries (I.A) an d the exemption for pits and ponds (I.B) have been moved from Section I (Applicability) to Section 4.0 (Exemptions) as sections 4.1.6 and 4.1.7.3

Rule Evaluation Criteria EPA is primarily

using the following three criteria to evaluate Rule 4 402
. 1. E nforce ability

– CAA § 110(a)(2)(A) requires that regulations submitted to EPA for SIP approval must be clear and legall y enforceable. 2. Anti
- Backsliding
- CAA §110(l) restricts certain SIP revisions that would relax existing SIP
- approved requirements. 3. Rule Stringency

– CAA § 172(b) and 182(a)(2)(A) require ozone nonattainment areas to implement RACT for ozone precursors. The SJVUAPCD regulates an extreme 1
- hr ozone nonattainment area and an extreme 8
- hr ozone nonattainment area (see 40 CFR part 81) and must fulf ill the requirements of RACT
. RACT Discussion A. SJVUAPCD 2009 RACT Demonstration On April 16, 2009, SJVUAPCD adopted its “RACT Demonstration for Ozone SIP,” which provides the District’s demonstration that RACT is implemented for all appropriate sourc es . This includes several pages discussing Rule 4402. ( See Cover and applicable pages attached.) In summary , SJVUAPCD states that:

 The 2007 emissions inventory estimated VOC emissions from crude oil sumps in the district at approximately 2.6 tons/day
. T h is updated emissions estimate is based on survey data collected from oil producers for 2007. See attachment 3, 2007 Area Source Emissions Inventory

Methodology , 310
- Oil Production Fugitive L osses.  This emissions estimate of 2.6 tons/day is in contrast to SJVUAPCD’s previous emissions estimate of 3 to 60 tons/day based on 1990’s data from the Department of Oil, Gas, and Geothermal Energy database . This data was largel y found to be inaccurate and did not account for man y closed and inactive sumps. See SJVUAPCD’s RACT Demonstration for Ozone SIP for further explanation.  There are no national guidance (CTG or ACT) or regulation (NSPS, NESHAP, or MACT) to help define RACT for this category
.  Rule 4402 imposes similar requirements to those in Ventura County Ai r Pollution Control District (VCAPCD) Rule 71.4. Although VCAPCD’s rule does not allow 1 st stage sumps and SJVUAPCD Rule 4402 does allow 1 st stage sumps, SJVUAPCD does not believe that Rule 4402 is less stringent. In addition, the 2007 emissions inventory survey data shows that there are no active 1 st stage sumps operating in SJVUAPCD ( s ee attachment 3).  Santa Barbara County (SBCAPCD) is the only other California district that exempts small producers of light or heav y crude (less than 150 barrels/day) from regulation
. SJVUAPCD exempts small producer 2 nd and 3 rd stage sumps less than 1000 square feet surface area used for only heavy crude oil ( small producer is less than 6000 barrels / day at all locations in county). SJVUAPCD also exempts very small producers (1504

barrels / day) with 2 nd and 3 rd stage sumps less than 5000 square feet surface area used only for heav y crude oil. SJVUAPCD states that their exemptions for small producers are similar to the SBCAPCD exemption.  Based on low true vapor pressure ( TVP ) and low emissions from heavy crude, the VOC emissions from 2 nd and 3 rd stage sumps from small and very small producers are relativel y low and to requir e them to install and operate a fixed or floating cover would not be economicall y feasible. SJVUAPCD esti mated the cost effectiveness of a rigid floating cover for a 5000 sq. ft. second stage sump containing heav y crude oil to be $64,800 per ton of VOC reduced. (See RACT Demonstration for Ozone SIP , Page 4
- 79)  Exemptions for minimal VOC emissions (0.007 lbs/s q.ft./day) and clean produced water (35 milligrams/liter) are still appropriate because the emissions are very low and installing controls would be economically infeasible. SJVUAPCD states that the cost of controlling VOC emissions from these low emission sumps and ponds would be significantl y higher than the cost of controlling emissions from the heavy crude oils sumps ($64,800 per ton of VOC reduced for 2 nd stage, as noted above). B. Requirements found in other Californ i a District Rules The following is a list of more stringent requirements found in analogous rules from neighboring agencies:  South Coast ( SCAQMD ) Rule 1176 and San Luis Obispo ( SL OCAPCD ) Rule 419 require floating covers to have seals and the gap cannot exceed 1/8” for a cumulative length of 97 % of the perimeter. Rule 4402 allows a 1 inch gap and does not require seals.  SCAQMD Rule 1176 and SBCAPCD Rule 344 require that fixed covers be equipped with an air pollution control (APC) device with a control efficiency of 95% of VOCs. Rule 4402 only requires a pressure/vacuum valve set to within ten percent of maximum safe working pressure of cover.  SCAQMD Rule 1176 requires monthly to annual inspections for leaks and testing operation of APC equipment. Rule 4402 does not require inspections.  SJVUAP CD Rule 4402 has a large number of exemptions either not found or broader and less restrictive than exemptions found in other district rules. These exemptions allow uncontrolled VOC emissions from exempted 2 nd and 3 rd stage sumps and ponds. See detailed re view of exemptions below.  Rule 4402 does not define “intermittent” as used in Section 3.7 definition of Pit or place an y limit on the amount of time oily water can be kept in an emergency pit before it is cleaned up. SL OCAPCD Rule 419 requires clean
- up t o begin within 24 hours and limits clean
- up to 15 day s and SBCAPCD Rule 344 limits use of pits to less than 30 day s per ye ar. Lack of a time limit would allow uncontrolled emissions for an unlimited amount of time. C. Discussion of Rule 4402 Exemptions R ule 4402 includes a number of exemptions where requirements of the rule do not apply. The following is a brief review and discussion of all the exemptions listed in the rule.5

1. Small producers and very small producers (4.1.1 & 4.1.3):  Exempts s mall producer (6000 barrels/day average over 2 ye ars from all operations within the county) 2 nd and 3 rd stage sumps that are less than 1000 sq. ft surface area and are onl y used for heavy crude oil.  A lso exempts very

small producer (300 barrels/day average over 2 year s from all operations in the county and only 50 barrels/day

per lease ) 2nd and 3rd stage sumps that are less than 5000 sq. ft. surface and that are solely used for heavy

crude oil.  The only

other California district rule found that exempts small producer 2 nd & 3 rd stage sumps is SB CAPCD Rule 344 which exempts small producers (less than 150 barrels/day

average over 1 year) with no restriction on surface area of sump or ty pe of crude oil.  S BCAPCD Rule 344 also exempts any 2 nd or 3 rd stage sump less than 100 0 sq. ft surface area.  SL OCAPCD Rule 419 exempts pits, ponds, and sumps less than 100 sq. ft. surface area.  In the RACT Demonstration, SJVUAPCD estimates the cost effectiveness for controlling the emissions from a 5000 sq. ft 2 nd stage sump containing he avy crude oil to be about $64,800 per ton of VOC reduced and that the cost per ton would be even higher for 3 rd Stage sumps . The district then concludes that due to economic infeasibility , they

believe that these exemptions for small and very small produc ers are still appropriate. (See page 4
- 79 of SJVUAPCD RACT Demonstration for Ozone SIP) 2. 2 nd and 3 rd stage sumps used solely for clean produced water containing less than 35 mg/l VOCs (4.1.2).  SCAQMD, VCAPCD, and SL OCAPCD rules exempt sumps used for wastew ater that do not exceed 5 mg/l of VOCs.  SJVUAPCD’s RACT analy sis states that the emissions from clean produced water are significantl y less than heav y crude and the cost for controlling emissions from these low emission sumps would be significantly highe r per ton of VOC reduced than for heav y crude oil sumps. Due to this higher cost, it would be economically infeasible to control these emissions and therefore this exemption is appropriate. 3. Any sump with estimated emissions of 0.007 lbs/sf
- day or less a s established by

ARB flux
- box method (4.1.4).  Emissions of 0.007 lb s /sf
- day is slightly

lower than the uncontrolled emissions factor for light crude from 3 rd stage sumps (0.008 lbs/sf
- day), and slightly

higher than the emission factor for 3 rd stage sumps f or heav y crude oil (0.005 lbs/sf
- day).  Therefore, it is lik ely

that 3 rd stage light crude oil sumps would not be exempt, but 3 rd stage heav y crude oil sumps could be exempt. We do not know if this exemption is used by any crude oil producers at this time.  SJVUAP C D states in their RACT analysis that controlling emissions from these low emission sumps would be economically infeasible as stated above for sumps containing onl y cl ean produced water.  No other California district rule was found to have a similar exemption. 4. Any sump used less than 7 day s in one month and not more than 21 day s per year (4.1.5).  No other districts were found to have a similar exemption. 5. Sumps at petroleum refineries (4.1.6)6

 Sumps located at petroleum refineries are exempt.  R ule 4 402 is intended to control emissions from crude oil production sumps and is not meant to address sumps at petroleum refineries. 6. Pits or Ponds (4.1.7)  Pits by

definition in Rule 4402 are used onl y intermittently or for emergency collection of crude oil and water and not for oil water separation.  SB CAPCD exempts pits used for emergencies that are used less than 30 day s per year and V CAPCD also exempts emergency pits.  SL OCAPCD exempts emergency pits if cleanup is implemented within 24 hours and is completed within 15 day s.  Ponds by

definition in Rule 4402 are used only to store clean produced water (less than 35 mg/l VOCs) and not used for separation of oil and water.  SCAQMD and other air districts set the limit for clean water at 5 mg/l of VOCs.  We underst and that many ponds in the San Joaquin Valley have been closed under Regional Water Quality

Control Board (RWQCB) order, but other ponds continue to operate in the district. (See Attachment 5)  These ponds can cover many acres and handle a large volume of o ily wastewater (as much as a million gallons per day). For example, see RWQCB Order No. R5
- 2002
- 0223, Waste Discharge Requirements for Valley Waste Disposal Company , Broad Creak No. 2 Facility (Attachment 4). Emissions from these ponds are not included in SJVUAPCD’s current VOC emissions estimate (2.6 ton/day) for crude oil sumps because they

are exempt. It is not known if the VOC emissions from the ponds are significant or not. The ponds that initially receive wastewater from oil production would have the highest VOC concentrations and are of particular concern. Rule Evaluation A. Enforceability and Anti - Backsliding The amendments to this rule are largel y administrative, do not substantively change or relax requirements, but make the rule slightl y cl eare r and more consistent with other SJVUAPCD rules. The rule is generally enforceable, although several test methods are outdated and/or inappropriate. B. RACT We concur with SJVUAPCD’s analy sis that Rule 4402 imposes some requirements that are similar to the requirements found in other California district rules for controlling VOC emissions from crude oil sumps. However, SJVUAPCD has not adequatel y demonstrated that Rule 4402 implements RACT in light of the more stringent requirements found in these rules fro m other California air districts, some of which are in attainment or are designated as moderate nonattainment for ozone. C. Rule Deficiencies The following deficiencies preclude full approval of Rule 4 402 into the SIP
.7

1. SJVUAPCD should strengthen these requirements to help implement RACT or demonstrate why such improvements are not appropriate in light of analogous requirements in neighboring districts. a. Section 5.1.2 allows a 1 inch gap and does not require seals for rigid floating covers
. In contrast, S CAQMD Rule 1176 (e)(2)(B)(vi) and SLOCAPCD Rule 419 D.2.e. require rigid floating covers to have seals , the gap cannot exceed 1/ 8” for a cumulative length of 95% of the perimeter, and no single gap may exceed 1⁄2 inch. b. Section 5.2.5 requires fixed covers to be equipped with a pressure/vacuum valve set to within ten percent of maximum safe working pressure
. In contrast, SCAQMD Rule 1176(2)(A)(ii) and (6)(A) and SBCAPCD Rule 344 D.2.b.2 require that fixed covers be equipped with a 95% efficient Air Pollution C ontrol (APC ) device. c. Rule 4402 does not require periodic inspection of covers and APC equipment to ensure proper operation. In contrast, SCAQMD Rule 1176(f)(C) requires periodic leak inspection and APC testing. d. Rule 4402 has exemptions that are more broad than those found in other district rule s. SJVUAPCD should analyze whether these exemptions continue to be appropriate. This anal ys is should consider more current cost data than used in the 2009 RACT Analy sis, and should consider alternative disposal me thods (e.g., underground injection, tanks, or additional pretreatment) in addition to sump and pond covers. The following exemptions are of particular concern:  Uncontrolled VOC emissions from exempted 2 nd and 3 rd stage sumps. Section 4.1.1 exempts operati ons less than 6000 barrels per day with sumps less than 1000 sf and section 4.1.3 exempts operations less than 300 barrels per day with sumps less than 5000 sf from substantive requirements. No other neighboring districts allow exemptions for small produc ers except for SBCAPCD Rule 344 , which i s more restrictive.  Section 4.1.7 exempts ponds of “clean produced water” with less than 35 mg/l VOC from Rule 4402 requirements. In contrast, SCAQMD Rule 1176(i)(5)(J), VCAPCD Rule 71.4 C.1.c and SL OCAPCD Rule 419 C.4 exempt wastewater sumps onl y where the VOC/ROC content does not exceed 5 mg/l at the inlet. Of particular concern are VOC emissions from the ponds that initially receive the oily

wastewater from oil production facilities. Alternatives including additio nal pretreatment to lower the VOC content and other disposal methods such as underground injection should be evaluated. e. Rule 4402 does not limit the time that oil or oily water can be kept in an emergency pit. In contrast, SL OCAPCD Rule 419 C. 2 requires clean
- up to begin within 24 hours and finish within 15 day s. f. Rule 4402 allows 1 st stage sumps. In contrast, SBCAPCD Rule 344 and VCAPCD Rule 71.4 do not allow the operation of 1 st stage sumps. g. Provisions should be added in Rule 4402 or Rule 4623 (Stora ge of Organic L iquids) that ensure that tanks used to replace the 1 st stage crude oil sumps have adequate VOC controls. We understand that many 1 st stage sumps have already been replaced with tanks; the district should ensure that emission controls for all these tanks are adequate. 2
. The following revisions are needed to improve rule clarity and enforceability consistent with CAA section 110(a). a. Please remove the language at the end of Section 5.3 that states “If replacement tank8

exclusively

serves identi cal function of sump replaced, permitting of such tank shall not be considered an emission change for the purposes of Rule 2201 (New and Modified Source Review Rule)”. Any exemptions to NSR requirements should be evaluated in the context of SJVUAPCD’s NSR program (e.g., Rule 2020) and inc orporated within the NSR program only if appropriate. Such exemptions should not be in source specific prohibitory

rules like Rule 4402. b. Revise section 6.2 Test Methods to remove and/or replace inappropriate or outdated t est methods such as 6.2.1 ARB Method 432, which is designed for paints and coatings and not oily wastewater. We also recommend adding EPA Test Method 21 in section 6.2 for determining leaks. c. Update the definition of clean product water (Section 3.1) rep lacing outdated EPA Test Methods 4.13.2, 418.2 and 8240 that used CFC
- 113 as the extraction solvent. The new test methods using non
- CFC extraction solvents are EPA Method 1664A and EPA Method 8260. See guidance documents referenced below. d. Please revise se ction 6.1 (Recordkeeping) to:  Add requirement for facilities to keep records of all inspections for leaks and testing of APC devices (for example, see SCAQMD Rule 1176 (g) (1)).  Add requirement to document use of emergency pits, includ ing when use started , clean
- up started and clean
- up finished.  Require documentation justifying an y exemptions claimed under section 4, including 4.1.7, which exempts pits and ponds.  Add requirements to verify the sump surface area and the annual production rates for both the small producers and very small producers in section 6.1.1.  Add requirement to keep all records for at least two , and preferabl y five ye ars. E PA Action The revisions to submitted Rule 4402 are largel y administrative changes that marginall y improve the SIP, but the deficiencies discussed above preclude full approval. As a result, EPA staff recommends a simultaneous limited approval and limited disapproval of the August 24, 2007 submittal of SJVUAPCD Rule 4402 pursuant to secti on 110( k) of the CAA as ame nded in 1990. If finalized as proposed, the rule deficiencies identified above would trigger CAA Section 110(m) sanction and Section 110(c) federal implementation plan (FIP) obligations because the San Joaquin Valley

is an extreme nonattainment area for oz one and is required to implement RACT. EPA Recommendations T he following revisions are not currentl y the basis for rule disapproval, but are recommended as improvements when this rule is amended. 1. We suggest deleting section 7.0 Compliance Schedul e since it is no longer applicable. 2. We suggest increasing the r equirements for testing wastewater at each inlet to the clean produced water ponds from annually t o least quarterly to ensure ongoing compliance with wastewater VOC limits. 3. Rule 4402 does not i nclude controls for crude oil well cellars. We suggest that SJVUAPCD evaluate whether to include requirements for controlling emissions from crude oil well cellars in Rule 4402 or as a separate rule.9

Guidance and Policy Documents Guidance and policy

doc uments that we used to help evaluate rules and RACT requirements consistently

include the following: 1. Portions of the proposed post
- 1987 ozone and carbon monoxide policy that concern RACT, 52 FR 45044 (November 24, 1987). 2. Requirements for Preparation, Adoption, and Submittal of Implementation Plans , U.S. EPA, 40 CFR part 51. 3. Addendum to the General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990, 59 FR 41998 (August 16, 1994). 4. Issues Relating to VOC Regulation Cutpoints, De ficiencies, and Deviations , EPA (May 25, 1988). [The Bluebook] 5. Guidance Document for Correcting Common VOC & Other Rule Deficiencies , EPA Region 9 (August 21, 2001). [The L ittle Bluebook] 6. RACT Qs & As
- Reasonably Available Control Technology (RACT): Questi ons and Answers , EPA, Wi lliam T. Harnett, May 18, 2006. 7. Clean W

ater Act Analytical Methods, Method 1664A, Oil and Grease http://www.epa.gov/waterscience/methods/method/ oil/oilfaq.html 8. Test Methods for Evaluating Solid Waste, Physical/Chemical Methods (SW
- 846) Method 8260 , U.S. EPA
. http://www.epa.gov/epawaste/hazard/testmeth ods/sw 846/online/index.htm Attachments 1. Submitted SJVUAPCD rules plus applicable SIP SJVUAPCD rules. 2. 2009 RACT SIP , SJVUAPCD (April 16, 2009). [Cover plus sections relevant to SJVUAPCD Rule 4402]. 3. 2007 Area Source Emissions Inventory Methodology : 310
- Oil Production Fugitive Losses, SJVUAPCD Rev. Date: 23 Jan 09. 4. Order No. R5
- 2002
- 0223, Waste Discharge Requirements for Valley Wastse Disposal Company ,, Broad Creek No. 2 Facility , Midway
- Sunset & Buena Vista Oil Fields, Kern County , California Regional Water Quality Control Board, Central Valley Region. 5. Record of t elephone c onversation, between Joanne Wells, EPA, and Doug Wachtell, RWQCB, 5/26/10.