Bay Area Air Quality Management District 

939 Ellis Street 

San Francisco, California 94109 

Staff Report 

Proposed Amendments to Regulation 8, Rule 28: 

Episodic Releases from Pressure Relief Devices at 

Petroleum Refineries and Chemical Plants 

November 2005 

Prepared By 

Victor Douglas 

Senior Air Quality Engineer 

Alexander Crockett 

Assistant Counsel 
TABLE OF CONTENTS

I. EXECUTIVE SUMMARY .............................................................................1

II. BACKGROUND...........................................................................................3

A. Types of Pressure Relief Devices ..................................................................................4

B. Emissions from PRDs......................................................................................................5

C. Detecting and Characterizing Emissions from PRDs ..................................................6

D. PRDs Currently In Service In The Bay Area ..................................................................8

III. REGULATORY HISTORY...........................................................................8

A. 1980 – Adoption of a PRD Leak Standard .....................................................................8

B. 1997 – Addition of Prevention Measures and Targeted PRD Control Requirements9

C. Other District Regulations Applicable to PRDs..........................................................15

IV. RULE EVALUATION.................................................................................16

A. Areas for Improvement of Current Rule ......................................................................18

B. Potential For Additional Control of PRD Emissions ..................................................21

V. PROPOSED AMENDMENTS ....................................................................23

VI. EMISSIONS...............................................................................................24

A. Current Emissions Summary........................................................................................25

B. Emission Reductions Since Adoption of the Current Rule in 1997..........................26

C. Potential Further Emissions Reductions ....................................................................29

VII. ECONOMIC IMPACTS ...........................................................................30

A. Costs That Would Be Incurred by Affected Facilities ................................................30

B. Incremental Cost Effectiveness....................................................................................39

C. Socioeconomic Impacts................................................................................................40

VIII. ENVIRONMENTAL IMPACTS................................................................40
IX. REGULATORY IMPACTS.........................................................................41

X. RULE DEVELOPMENT PROCESS...........................................................41

A. PRD Audit – May, 2002 ..................................................................................................41

B. Technical Assessment Document – December 2002.................................................41

C. Technical Workgroup Meeting – May 9, 2005 .............................................................42

D. Public Workshop Meeting – September 14, 2005 .......................................................43

E. Informal Office Meetings with Interested Parties – September 2005 .......................44

F. Further Technical Workgroup Meeting – October 20, 2005.......................................44

G. Changes to the Proposal in Response to Public Input.............................................44

XI. CONCLUSIONS ........................................................................................45

XII. RESPONSE TO PUBLIC COMMENTS.....................................................47

XIII REFERENCES ..........................................................................................58
Regulation 8, Rule 28 Staff Report 

November, 2005 

1

I. EXECUTIVE SUMMARY 

This Staff Report outlines the rule development efforts by the Staff of the Bay 

Area Air Quality Management District with regard to pressure relief devices at 

petroleum refineries and chemical plants, which are subject to District Regulation 

8, Rule 28. The Staff Report provides the technical analysis and policy rationale 

behind the proposed amendments to Regulation 8, Rule 28. 

Pressure relief devices, or “PRDs”, are safety devices used to protect 

pressurized equipment from overpressures caused by upset conditions. If 

equipment experiences an upset, the PRD will allow any excess pressure to be 

vented rather than building up and potentially causing a rupture or other 

catastrophic failure. The District committed in Further Study Measure 8 in the 

2001 Ozone Attainment Plan to examining these devices to determine if 

hydrocarbon emissions from petroleum refineries could be further reduced by 

requiring additional controls on refinery PRDs. 

To fulfill the commitment of Further Study Measure 8, District staff has reviewed 

the performance of Regulation 8, Rule 28. This review has shown that in general 

the current rule has been very effective. The Rule aims to phase out all 

atmospheric PRDsi

 eventually by requiring them to be routed to a control system 

(such as a safety flare or vapor recovery system) when new equipment is 

installed or when existing equipment is modified. The Rule also targets existing 

“bad actor” PRDs that have demonstrated a propensity for repeated releases, 

and requires them to be controlled immediately. Finally, for all PRDs, the Rule 

requires facilities to implement Prevention Measures designed to prevent or 

minimize releases. 

The rule has resulted in a significant reduction in PRD emissions. When the 

current Rule was adopted in 1997, emissions from PRDs were found to be 

approximately 27 to 150 tons per year. Since the current rule has been in place, 

emissions have averaged 20.5 tons per year. Furthermore, since the rule’s 

requirement to implement Prevention Measures took effect, emissions have 

averaged only 12.4 tons per year. 

Notwithstanding these successes, staff has identified several areas where the 

current rule could be improved. The rule requires that facilities report releases 

over 10 pounds to the District, but it does not explicitly require emissions 

monitoring or set standards for monitoring equipment. As a result, some facilities 

are not monitoring their PRDs well, and have the potential for releases to go 

undetected. In addition, the rule is somewhat ambiguous about what “sources” it 

covers, and has some other undefined terms and ambiguous or unclear 

language. Staff is proposing that the Board of Directors adopt amendments to 

the current rule to address these issues. 

 

i

 Atmospheric pressure relief devices (PRDs) vent directly to the atmosphere. Many PRDs vent 

to containment and processing such as a gas recovery system, to a thermal oxidizer, or to a flare. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

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Beyond these proposals, staff also considered whether it would be reasonable 

and appropriate to require refineries to control all existing atmospheric PRDs 

now, rather than waiting for them to be phased out over time as equipment is 

modified or replaced, as the current rule requires. Staff has found that such a 

requirement be prohibitively costly, with refineries having to incur costs of over $1 

million per ton of emissions prevented, which is orders of magnitude greater than 

what the District normally considers cost-effective. Staff is therefore not 

recommending additional controls beyond those already required in the rule. 

Finally, Staff also examined whether the District should require all PRDs to be 

vented to control systems as a safety measure to reduce the chance of 

accidental releases of acutely hazardous materials. Such industrial safety issues 

were not part of the mandate of Further Study Measure 8, which was aimed at 

reducing emissions of ozone precursors. Staff nevertheless investigated them 

because of a strong concern for worker and community safety. Staff found that a 

comprehensive overlapping web of industrial safety laws and regulations already 

exists, which requires operators to “design and maintain a safe facility taking 

such steps as are necessary to prevent releases,” in the language of the federal 

Clean Air Act. Staff believes that additional District regulation in the area of 

process safety would be duplicative of existing regulations and would not be well 

directed towards reducing community and worker risks. This conclusion 

reaffirms the determination of the Board of Directors’ Ad Hoc Committee on 

Accidental Emissions in connection with the adoption of the current rule that 

additional District requirements aimed at process safety would not be appropriate 

in Regulation 8, Rule 28. Safety at petroleum refineries and chemical plants is a 

high priority, however, and the District will continue to consult with local 

authorities to assure that adequate regulatory safeguards are in place. 

Summary of Proposed Amendments:

Based on this review, staff proposes the following amendments to Regulation 8, 

Rule 28: 

1. Require facilities to ensure that they have the capability to detect and 

quantify all release events, including small releases of 10 pounds (the 

reporting threshold), and require facilities to demonstrate this capability to 

the District; 

2. Require data recording and recordkeeping for venting and emissions 

verification; 

3. Clearly define the equipment subject to the rule as the process unit to 

ensure that the original intent of the rule – to regulate all PRDs on an 

individual source (i.e., process unit) in the same manner – is clarified; 

4. Require facilities to report to the District their analysis of the root causes 

and potential corrective actions after each PRD release event; 
Regulation 8, Rule 28 Staff Report 

November, 2005 

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5. Make minor, non-substantive changes to the rule such as deleting 

obsolete references to “turnarounds,” moving requirements where 

appropriate, and clarifying various sections of the rule. 

Rule Development Process:

During this rulemaking effort, staff hosted two technical workgroup meetings, as 

well as a public workshop in Rodeo, a community adjacent to a refinery. Staff 

also met informally with representatives of refineries, chemical plants, community 

groups, the Western States Petroleum Association and Contra Costa County 

Health Services. Staff has considered this public input and has incorporated it 

into the proposed amendments, where appropriate. 

Economic Analysis:

The proposed amendments are aimed primarily at improving the clarity and 

enforceability of the current rule. They do not add additional substantive 

requirements or require the addition of new control equipment. The proposed 

amendments thus will not impose any significant additional costs on affected 

facilities beyond what is required under the current rule. Some facilities may not 

currently have adequate monitoring equipment to satisfy the rule’s requirements, 

in part because those requirements are not explicitly spelled out in the current 

rule. Such facilities may have to install additional monitoring equipment to do so, 

but these are not costs imposed by the proposed amendments, and in any case 

they are expected to be minimal. 

Environmental Impacts:

Pursuant to the California Environmental Quality Act (CEQA), the District has had 

an initial study for the proposed amendments prepared by Environmental Audit, 

Inc. The initial study indicated there are no potential significant adverse 

environmental impacts associated with the proposed amendments. Staff is 

proposing that the Board of Directors adopt a CEQA Negative Declaration for the 

proposed amendments. 

Conclusions:

The proposed amendments will ensure that all facilities have the capability to 

detect PRD releases. They will also clarify the rule so that it can be more easily 

understood and enforced. Additional costs to affected facilities will be minimal. 

Staff therefore recommends that the Board of Directors adopt the proposed 

amendments along with the CEQA Negative Declaration. 

II. BACKGROUND 

Pressure relief devices are a means to safely relieve excessive pressures to 

prevent process equipment, piping, and other components from rupturing or 

causing other safety hazards. PRDs are designed to vent, or “lift”, at a 

prescribed “set pressure” to relieve excess pressure before it can exceed safe 
Regulation 8, Rule 28 Staff Report 

November, 2005 

4

operating and/or equipment design levels. In new refinery construction, PRDs in 

VOC service must relieve to a control system that recovers the process gases or 

routes them to a disposal system such as a safety flare or thermal oxidizer. 

However, many older installations still have PRDs that vent directly to the 

atmosphere, resulting in the emission of VOCs and/or other material when the 

PRDs lift or if the valves leak at pressures below the set point. These PRDs are 

called “atmospheric” PRDs and are the subject of Regulation 8, Rule 28. 

A. Types of Pressure Relief Devices 

PRDs can be classified into the following general categories: 

Pressure Relief Valves: The basic pressure relief valve must open automatically 

and quickly during a rise in system pressure beyond a specified set pressure, 

must close with minimal leakage when normal operating pressure is restored, 

and must be highly reliable. A pressure relief valve typically consists of a valve 

inlet or nozzle mounted on the pressurized system, a disc held against the nozzle 

to prevent flow under normal operating conditions, a spring to hold the disc 

closed, and a body/bonnet to contain the operating elements.(1) The spring load 

is adjustable to vary the pressure at which the valve will open. This design is 

illustrated in Figure 2.1.(2) Figure 2.2 is a photo of pressure relief valves. 

Figure 2.1 

Spring-Loaded Pressure Relief Valve 

Bonnet 

Spring 

Disc Holder 

Bushing 

Disc 

Body 

Nozzle 
Regulation 8, Rule 28 Staff Report 

November, 2005 

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Figure 2.2 

Seven 6” Diameter Pressure Relief Devices and Exhaust “Horns” 

Valero Refinery 

Thermal Relief Valves: Thermal relief valves protect liquid pipelines from overpressurizing. Since the compressibility of liquid is minor, releases from thermal 

relief valves are normally small. These valves close as soon as the pressure in 

the closed system is relieved. These valves are generally vented to process 

drains, back into a pipeline, or into the atmosphere. 

Rupture Disks: A rupture disk is a thin metal disk or diaphragm set between 

flanges often located on the pressure side of the relief valve or downstream from 

a block valve. Rupture disks are used to protect relief valves from the process 

pressure. They are designed to burst at the relief valve setting. Owing to their 

“one-time” use, rupture disks are applicable for relief devices where the 

component will be taken out of service after a release, for repairs or retrofits. 

Because they can only be used once, they are installed with block valves that will 

ensure that the piping can be closed once the emergency is contained. Rupture 

disks can also be used in place of relief valves in certain applications. 

B. Emissions from PRDs 

PRDs emit air pollutants when they “lift” to relieve pressure in the equipment they 

are serving. Such releases are often referred to as “episodic” releases because 

they occur only during process upsets when the PRD opens to relieve 

overpressures. In general, episodic emissions from PRDs can vary greatly, from 

a few pounds to many tons of material. Also, the duration of releases can vary 

greatly – from as little as seconds to as much as a day. Emissions may not 

correlate with the duration of venting because the components equipped with 
Regulation 8, Rule 28 Staff Report 

November, 2005 

6

PRDs process a range of materials and operate under a wide range of 

pressures. 

PRDs can also release material through leaks. Emissions from leaks are often 

referred to as “fugitive” emissions, and are addressed in District Regulation 8, 

Rule 18: Equipment Leaks, which requires periodic leak inspections of all PRDs. 

C. Detecting and Characterizing Emissions from PRDs 

Facility operators rely on a variety of indicators to determine whether or not a 

PRD has vented and what kind of release was involved. 

Telltale Indicators: 

A telltale indicator, a physical device placed on the PRD’s exhaust outlet in such 

a way that it will be moved or otherwise impacted if any material is vented out of 

the PRD, is one method of determining whether a PRD has experienced a 

release. Operators can readily determine whether there has been a release by 

simply looking at the device to see whether it has been activated. Some 

common telltale indicators are: 

 Socks – Socks are pieces of cloth or other material placed over the 

exhaust of a PRD such that when the PRD releases, the sock is blown off 

by the releasing gas. If the sock is absent, that is a telltale sign that there 

has been a release. 

 Flags – Flags are brightly colored metal tabs that are activated during a 

venting and become visible and can be easily seen by an operator. 

 Rupture Disks – As mentioned above, rupture disks are thin metal 

diaphragms held between flanges. When the PRD releases, the disk will 

rupture. A ruptured disk is a telltale sign that there has been a release. 

Telltale indicators are very useful in determining whether there has been a 

release. However, they do not provide any information about the release, such 

as when it occurred, how long it lasted, how much material was involved, or the 

nature of the material released. 

Other Indicators: 

In addition to a telltale indicator, there are other ways to determine whether a 

PRD has lifted. These include: 

 Audible indicators – When PRDs vent, they normally make a loud 

distinctive sound. 

 Pressure indicators – PRDs are pressure relieving devices that are set at 

a specific pressure. When a process has an overpressure that causes a 

PRD to lift, it normally leaves a characteristic “pressure signature” that 

indicates that a release occurred. This pressure signature is marked by 

rising pressure as the system approaches the PRD’s set point, then a 

leveling off of the pressure as the PRD opens to vent the accumulated 

gases, and then falling pressure after the PRD closes and the process 
Regulation 8, Rule 28 Staff Report 

November, 2005 

7

returns to a more stable state. Monitoring the pressure within the system 

can thus provide a good indicator that a release has occurred. Pressure 

monitoring is most useful when there is a device that measures the actual 

pressure at the PRD. In many situations, however, the monitoring is in the 

vessel or equipment protected by the PRD, and the actual pressure 

experienced by the PRD must be calculated based on engineering 

calculations. 

 Temperature – Temperature can be used as a way to indicate the release 

of a PRD. As temperature increases, pressure will also increase, 

triggering a release. A decrease in temperature indicates pressure relief. 

 Flowrates – Process flowrate can also indicate the venting of a PRD. An 

initial increase in a process flowrate from a vessel indicates a pressure 

increase. A leveling off or decrease in the flowrate would indicate flow 

being released at another point, such as at a PRD. Although the process 

flowrate is a surrogate indicator, this information taken along with pressure 

readings can be used to indicate and quantify a release event. 

None of these mechanisms, by itself, provides an ideal record of a release. For 

example, an audible indicator may be missed if there is nobody in the vicinity to 

hear it, or if the sound is masked by other noises at the facility. Indications from 

a pressure, temperature or flowrate monitor may be missed if the operator is not 

actively watching the monitor at the time of the release or if the monitor is not 

equipped with an alarm or notification system. Telltale indicators, as mentioned 

above, do not quantify the type or quantity of a release, and may indicate a 

release where none has occurred, such as when a sock is blown off in bad 

weather. Used in combination, however, these mechanisms can create a 

comprehensive monitoring system that will reliably detect and alert operators of 

any PRD releases. 

Such monitoring systems can also reliably characterize PRD releases and 

provide the information that must be reported to the District under Rule 8-28 for 

any release over 10 pounds, such as the type and quantity of the emission.ii This 

information can normally be obtained by reviewing operating data from the 

equipment involved in the release. For example, a review of operating pressure 

may reveal a PRD release “pressure signature” described above: pressure 

increasing at a certain time, then leveling off at the PRD’s set point, and then 

decreasing after a short time. By reviewing the type of material that the 

equipment was processing at the time, the pressure at which the PRD opened, 

the size of the PRD opening, the time period over which the PRD was open, and 

other factors, one can characterize the release fairly accurately. 

Leak Detection:

PRDs can easily be inspected for leak-tightness with a portable analyzer that is 

placed near the PRD to detect any vapors that are leaking out. Using such 

 

ii Current requirements of Rule 8-28 are discussed in Section III. B. 2. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

8

equipment, facility staff and District inspectors can determine if any PRDs are 

leaking, and if so to what extent. Facilities are required by Rule 8-18 to inspect 

all PRDs regularly, and District inspectors conduct their own inspections to verify 

compliance. 

D. PRDs Currently In Service In The Bay Area 

There are 324 atmospheric PRDs located at the five Bay Area refineries. Of the 

324 PRDs, approximately 50 are either rupture disks or pressure relief valve / 

rupture disk combinations, with the remaining being pressure relief valves. 

Approximately ten of the PRDs are equipped with socks as telltale indicators and 

the vast majority have some type of pressure monitoring, although some 

monitoring devices are remotely located and do not directly measure the 

pressure experienced at the PRD. Table 2.1 summarizes the total number of 

atmospheric PRDs located at each refinery. 

Table 2.1 

Population of Atmospheric PRDs at Each Refinery 

Refinery Atmospheric PRDs 

Chevron-Texaco 41 

ConocoPhillips 12 

Shell 107 

Tesoro 99 

Valero 65 

Total 324 

 

Chemical Plants in the Bay Area also use PRDs on various process units. These 

PRDs usually service components containing non-hydrocarbon compounds, and 

have experienced only five reportable releases (over 10 pounds) since the 1997 

amendments to Rule 8-28, involving only 2 tons of material in total. Further 

Study Measure 8 and the current rule development effort are focused on 

hydrocarbon emissions from PRDs at refineries. 

III. REGULATORY HISTORY 

Control of emissions from PRDs has been a focus of the District’s regulatory 

attention for over 25 years. This section provides an overview of how Regulation 

8-28 has evolved over the years into its current form, in order to provide some 

context for the proposed amendments. 

A. 1980 – Adoption of a PRD Leak Standard 

Rule 8-28 was originally adopted July 16, 1980, and regulated fugitive emissions 

(leaks). The rule established a leak standard of 10,000 parts per million for 

PRDs, but it did not place any restrictions on PRD venting as long as the venting 

was reported and the PRD reseated (closed) after releasing any excess 
Regulation 8, Rule 28 Staff Report 

November, 2005 

9

pressure. The rule also required quarterly leak inspections for accessible PRDs 

and annual inspections for inaccessible PRDs. Since adoption in 1980, minor 

amendments were made to the rule in 1981, 1982, 1983, and 1994. 

B. 1997 – Addition of Prevention Measures and Targeted PRD Control 

Requirements 

In the 1990s, the District undertook a comprehensive review and overhaul of 

Rule 8-28, which changed the focus of the rule from fugitive emissions from leaks 

to episodic emissions from PRDs venting to prevent equipment overpressurization. District staff spent a considerable amount of time over a number 

of years on this effort, and the District’s Board of Directors convened an ad-hoc 

committee to look into PRD-related issues and provide direction at the Board 

level. That process, and the amendments that resulted from it in 1997, are 

outlined below. 

1. The Rulemaking Process 

1991 Clean Air Plan Control Measure C1:

The District’s efforts to overhaul Rule 8-28 began with Control Measure C1 in the 

1991 Clean Air Plan. Measure C1 directed staff to examine Rule 8-28 further in 

order to determine whether there were any additional opportunities to reduce 

emissions of ozone precursors (effectively, hydrocarbons). Upon adoption of the 

1991 Clean Air Plan, staff began to work on the issue. 

Concern Over Acutely Hazardous Materials Releases:

As this process was underway, concern arose over the potential for releases of 

“Acutely Hazardous Materials” – highly toxic substances such as chlorine and 

ammonia, and flammable gases that could ignite and cause an explosion – as a 

result of recent industrial accidents. This concern led the Board of Directors to 

establish an Ad Hoc Committee on Accidental Emissions (“Ad Hoc Committee”).iii 

The charge of the Ad Hoc Committee was to assess the need for any additional 

District regulation, above and beyond existing laws and regulations addressing 

environmental impacts from industrial accidents. The charge of the Ad Hoc 

Committee was set forth in the following “Policy on the Accidental Release of 

Acutely Hazardous Materials,” which was approved by the full Board of Directors 

on February 16, 1994: 

The District Board will consider adoption of procedures or 

regulations designed to minimize the possibility of public exposure 

to accidental releases of Acutely Hazardous Materials by 

supplementing or supporting, not duplicating, current federal, state 

and local regulations designed to prevent or minimize such 

releases. 

 

iii Of the current membership of the Board of Directors, Director Harold C. Brown Jr. served on 

the Ad Hoc Committee. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

10

The creation of the Ad Hoc Committee, and its mission of addressing the 

potential for industrial accidents, led staff to expand the focus of their ongoing 

efforts to implement Control Measure C1 from the 1991 Clean Air Plan. District 

staff, along with members of the public, industry representatives, and other 

interested persons, participated in a number of Ad Hoc Committee meetings from 

1993 through 1996. The Committee looked in great detail at all types of 

emissions from PRDs, including acutely hazardous materials as well as other 

materials that may not be considered acutely hazardous but are still of concern 

from an ambient air quality perspective (e.g., ozone precursors). 

The Committee examined existing legal framework covering environmental and 

public health impacts from industrial accidents. In addition to presentations from 

District staff, the Committee heard testimony from a large number of agencies 

with jurisdiction over these issues, including: 

• The United States Environmental Protection Agency; 

• The California Environmental Protection Agency; 

• The Contra Costa County Health Services Department, and in particular 

the Department’s Hazardous Materials Division; 

• The San Francisco Bay Regional Water Quality Control Board; 

• The California Occupational Safety and Health Administration; 

• The United States Coast Guard; 

• The California State Lands Commission; 

• The California Public Utilities Commission; 

• The Contra Costa County Fire Protection Department; 

• The Richmond Fire Department; and 

• The California State Fire Marshal Association. 

These investigations highlighted the comprehensive nature of existing laws and 

regulations addressing industrial safety and the prevention of accidental releases 

of acutely hazardous materials. The centerpiece of these legal requirements is 

Section 112(r) of the federal Clean Air Act (42 U.S.C. § 7412(r)), which requires 

that owners and operators of industrial facilities handling acutely hazardous 

materials “design and maintain a safe facility taking such steps as are necessary 

to prevent releases. . . .” This Clean Air Act requirement complements the 

requirement in Section 5(a) of the federal Occupational Safety and Health Act (29 

U.S.C. § 654(a)) that employers ensure that their workplaces are “free from 

recognized hazards that are causing or are likely to cause death or serious 

physical harm” to employees. The Clean Air Act requirement broadens the 

Occupational Safety and Health Act requirement and forces facilities to address 

risks to off-site communities in addition to risks to employees of the facility. 

These authorities establish the basic legal requirements that each facility must 

take whatever steps necessary to render their operations safe to workers and to 

neighboring communities. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

11

Clean Air Act Section 112(r) also established a mechanism to ensure that 

facilities are taking the steps necessary to make their operations safe. Section 

112(r) requires that any facility handling acutely hazardous materials above 

certain threshold quantities must develop a risk management program that 

includes: (i) an assessment of all hazards associated with a facility’s operations, 

including absolute “worst-case” accidental releases; (ii) an integrated prevention 

program containing procedures to prevent accidents from occurring; (iii) an 

emergency response plan setting forth procedures to respond to accidents; and 

(iv) preparation of a Risk Management Plan (“RMP”) document summarizing the 

program, which must be submitted to the agency with oversight for facility safety 

(which in the Bay Area is the local city or county hazardous materials agency). 

At the state level, the California Accidental Release Prevention (“CalARP”) 

Program imposes similar requirements. The CalARP requirements, which are 

set forth in Health & Safety Code Sections 25531-25543.3, implement the federal 

program in California and are intended to further the twin goals of “reducing 

regulated substances accident risks and eliminating duplication of regulatory 

programs . . . .” (Health & Safety Code § 25531(e).) To that end, the CalARP 

Program requires the preparation of a Risk Management Prevention Program 

(“RMPP”) that satisfies the federal RMP requirements as well as certain 

additional California-specific requirements. The Governor’s Office of Emergency 

Services (“OES”) administers the CalARP program and has adopted 

implementing regulations in Title 19, Division 2, Chapter 4.5 of the California 

Code of Regulations. 

The RMPP process is implemented at the local level by cities and counties. 

These “administering agencies” (also known as “Certified Unified Program 

Agencies” or “CUPAs”) are specifically directed to coordinate their efforts with the 

local air quality management district (Health & Safety Code § 25533(b)), and may 

authorize the local air district to conduct a technical review of a facility’s RMP 

(Health & Safety Code § 25535(a)). In addition, many cities and counties have 

adopted ordinances imposing their own city- or county-specific requirements. 

One example the Ad Hoc Committee reviewed in detail was the Santa Clara 

County Toxic Gas Ordinance (Ordinance No. NS-517.44). 

Finally, in addition to the legal framework outlined above, the Ad Hoc Committee 

also investigated the cooperative efforts of the various agencies with jurisdiction 

over acutely hazardous materials issues to coordinate their regulatory activities. 

One prime example was the Contra Costa County Hazardous Materials 

Interagency Task Force, or “HIT Team.” The HIT Team (which continues to 

operate today) is a coalition of agencies with responsibility for public and 

environmental health and safety that have joined in a cooperative and voluntary 

effort to enhance their level of service. The agencies represent federal, state, 

regional and local governments in the San Francisco Bay Area; local agencies 

are from Contra Costa County. The Task Force provides members with a 

continuing forum to coordinate and improve efforts in accident prevention; 
Regulation 8, Rule 28 Staff Report 

November, 2005 

12

emergency response; communication, outreach, and public participation; and 

efficiency, including the identification of both gaps and overlaps in policies and 

programs to protect the public’s health and safety. District staff participates in 

the HIT Team and adds their expertise and support to furthering the Team’s 

mission. 

Given the level of existing regulation regarding accidental releases of acutely 

hazardous materials, and mindful of the Committee’s charge that the Board did 

not want to duplicate existing federal, state, and local regulatory efforts 

unnecessarily, Staff ultimately concluded that no additional District regulation in 

the are was needed. Staff concluded that additional regulation would be 

duplicative and would disrupt the existing regulatory system, and that the 

District’s efforts would be better spent in participating with the other agencies to 

share District staff’s knowledge, information, and expertise.(3) Based on these 

conclusions, the Ad Hoc Committee did not recommend any additional District 

regulation aimed at preventing industrial accidents, over and above what was 

already being done by other agencies. 

The Ad Hoc Committee process did reaffirm the need for additional regulation on 

PRD releases to address air quality issues from emissions that are not acutely 

hazardous. For example, situations where hydrocarbons are emitted at 

petroleum refineries from the top of a tall stack, where they are not near an 

ignition source and will dissipate into the atmosphere, do not present acute 

health hazards to employees and neighbors of the refinery. Such emissions can 

still be very important from an ambient air quality perspective, however, because 

they contribute to ozone formation. Hydrocarbons, along with oxides of nitrogen 

(“NOx”), are the main focus of the District’s efforts to control ozone. The Ad Hoc 

Committee therefore recommended moving forward with efforts to address 

episodic emissions of hydrocarbons from PRDs, as contemplated by Control 

Measure C1 from the 1991 Clean Air Plan. 

Regulatory Approaches Considered:

Based on this direction from the Ad Hoc Committee, staff then went forward with 

its rulemaking efforts along those lines. Staff conducted meetings with the 

regulated community and interested members of the public, prepared a Rule 

Effectiveness Study and a Technical Assessment Document, and ultimately 

proposed the current Rule to Board of Directors in December of 1997. During 

this process staff considered three approaches to controlling episodic PRD 

emissions (in addition to the option of doing nothing). The approaches 

considered were the following: 

● Prevention Measures Only, With No Controls: 

This approach would have required affected facilities to implement a 

Process Hazards Analysis to identify and analyze potentially hazardous 

scenarios. For each hazard identified, the facility would be required to 

implement at least three “Prevention Measures” designed to minimize the 
Regulation 8, Rule 28 Staff Report 

November, 2005 

13

potential for releases. This approach would not have required any PRDs 

to be vented to control equipment. 

● Blanket Control Requirement: 

This approach would have required all PRDs to be vented to a control 

system, such as a flare or a vapor recovery system. Affected facilities 

would have to pipe all of their existing PRDs to a control system, so that if 

any of them experienced a release, the emissions would either be 

captured or returned to the refinery’s process or be incinerated before they 

reached the atmosphere. 

● Targeted Control Requirement: 

This approach was essentially a hybrid of the prevention measures 

approach and the blanket control approach. It embodied the goal of 

eventually eliminating all PRD emissions to the atmosphere, but did not 

require all existing PRDs to be controlled immediately. Instead, it was 

designed to phase out atmospheric PRDs over time as the equipment they 

serve is replaced. It required facilities to vent PRDs on all new equipment 

to control systems, and to vent PRDs on existing equipment to control 

systems when the equipment is “modified” – that is, expanded or 

upgraded. In addition, this approach attempted to target the “bad actors” 

among the existing PRD population – those in service on potentially 

unstable processes that have a higher potential for an upset that might 

lead to over-pressurization and result in a PRD release. The approach 

required any process unit that experienced a PRD release twice within a 

five year period to be controlled within a year, without waiting for upgrade 

or overhaul. These targeted control requirements were in addition to the 

prevention measures outlined above, which would be required for all 

PRDs. 

Staff evaluated the cost of each of these approaches and the emissions 

reductions each one could be expected to achieve. Staff found that the blanket 

control approach would be the most effective at reducing emissions, because it 

would essentially eliminate all PRD releases to the atmosphere. But staff found 

that it would be prohibitively expensive given the extensive capital improvements 

that would be necessary in relation to the amounts of emissions reductions 

involved. Staff calculated that requiring controls would likely require each 

affected facility to construct a new flare system, at a total annualized cost of 

approximately $27 million, or approximately $40,000 per ton of emissions 

reductions. 

By contrast, staff found that the targeted control approach would be far more 

cost-effective, because it would not require expensive control systems for the 

bulk of PRDs that have low hydrocarbon emissions potential. Yet it still would 

obtain significant emissions reduction benefits because it would control the 

problem PRDs that are the worst contributors of smog-forming emissions, and 
Regulation 8, Rule 28 Staff Report 

November, 2005 

14

would minimize the likelihood of releases from all PRDs. Staff found that this 

approach could obtain emissions reductions at around half the cost-per-ton of the 

blanket control approach, and potentially as little as $3,450 per ton. Staff 

therefore identified the targeted control approach as the preferred alternative, 

and proposed amendments to the Board of Directors to codify that approach. 

The Board adopted the amendments on December 9, 1997, and made minor 

technical amendments in March of 1998. 

2. Current Requirements of Regulation 8, Rule 28 

The current version of Regulation 8, Rule 28 that the Board adopted in 1997 

(with minor subsequent amendments) implements this targeted control approach 

in the following manner. 

New Sources

When a facility installs a new source, Rule 8-28 requires that any PRDs on the 

equipment must meet District Best Available Control Technology (BACT) 

requirements, as defined in Regulation 2, Rule 2 and the District BACT 

Guidelines. BACT requires PRDs to be vented to a fuel gas recovery system, 

furnace, or flare with a control efficiency of at least 98 percent. This means that 

no new PRD may vent directly to the atmosphere. 

Existing Sources

For existing sources with atmospheric PRDs, Rule 8-28 requires that the facility 

meet the BACT requirements – i.e., venting all PRDs on the source to a control 

system – when the equipment undergoes a major modification. This provision 

means existing atmospheric PRDs will eventually be phased out as existing 

equipment is upgraded. There is no set timetable for equipment upgrades, and 

some equipment may remain in service for a long time before it undergoes a 

“major modification”, but ultimately when equipment is upgraded, any 

atmospheric PRDs will have to be vented to a control system. 

The rule also requires existing sources with atmospheric PRDs to implement 

Prevention Measures designed to prevent or minimize any releases. These 

Prevention Measures include: enhancing training, equipment, inspection, 

maintenance and monitoring procedures; installing process flow, temperature, 

level, and pressure indicators with interlocks; implementing documented and 

verified routine inspection and maintenance programs; using inherently safer 

designs; and installing deluge systems to cool and condense emissions before 

they can reach the atmosphere. 

Finally, for existing sources, the rule also targets process units that show a 

propensity for releases. If a source experiences a release from a PRD over 10 

pounds, it must: (1) conduct a failure analysis to discovery the cause of the 

release; (2) review the prevention measures for the source and address any 
Regulation 8, Rule 28 Staff Report 

November, 2005 

15

deficiencies; (3) evaluate whether it would be technologically feasible and costeffective to vent the PRDs on the source to a control system; and (4) install 

telltale indicators on all of the PRDs on that source to ensure that any further 

releases are detected. If the same source experiences a second release within 5 

years, that source must have all of its PRDs vented to a control system within 

one year. In this manner, the rule requires facilities to target their efforts to 

control existing PRDs towards sources that demonstrate a propensity for upsets 

and releases. 

Reporting Requirements for Refineries and Chemical Plants

All Release Events (PRD releases over 10 pounds) at petroleum refineries or 

chemical plants must be reported to the District by the next working day. PRDs 

must be inspected within five days of a Release Event to ensure that they have 

re-seated properly and are not leaking. Within 30 days, the facility must report: 

 the date, time, and duration of the Release Event; 

 the device that experienced the Release Event; 

 the District-assigned episode number; 

 the type and size of device; 

 the type and amount of material released; 

 any information used to estimate duration and amount released; 

 the cause of the release; 

 the schedule for implementation of measures to prevent re-occurrence; 

and 

 the results of the fugitive emission inspection. 

The requirement to report this information implies that facilities must monitor 

PRDs to determine whether a Release Event has occurred and if so, the 

duration, cause, type and amount of material released must be quantified. There 

are currently, however, no explicit monitoring requirements in the rule. 

C. Other District Regulations Applicable to PRDs 

There are three other District regulations that are directly applicable to PRDs: 

Regulation 8, Rule 5 (Rule 8-5); Regulation 8, Rule 18 (Rule 8-18); and 

Regulation 8, Rule 22 (Rule 8-22). 

Rule 8-5: Storage of Organic Liquids

Rule 8-5 requires the pressure vacuum valves (a type of PRD) on tanks used to 

store organic liquids be set at a pressure within 10 percent of the maximum 

working pressure of the tank and that the valves be properly installed and 

maintained in good working order. 

Rule 8-18: Equipment Leaks

Rule 8-18 addresses fugitive emissions of VOCs from various components, 

including PRDs, at petroleum refineries, chemical plants, gasoline bulk terminals 
Regulation 8, Rule 28 Staff Report 

November, 2005 

16

and bulk plants. Fugitive emissions are those that escape from non-airtight 

fittings or connections. Rule 8-18 prohibits VOC leaks from PRDs over 500 ppm, 

subject to certain qualifications. 

Rule 8-22: Valves and Flanges at Chemical Plants 

Rule 8-22 addresses fugitive emissions of VOCs from small chemical plants. 

When fugitive emissions rules were amended in 1990, large chemical plants 

were made subject to the more stringent rules for petroleum refineries. Rule 8-

22 was maintained for small (fewer than 100 valves) chemical plants. 

IV. RULE EVALUATION 

In the San Francisco Bay Area 2001 Ozone Attainment Plan for the One-hour 

National Ozone Standard, the District committed to study several activities at 

petroleum refineries to determine if additional reductions in emissions of ozone 

precursors could be achieved. One commitment, set forth in Further Study 

Measure 8, was to evaluate the potential for obtaining further ozone-precursor 

(i.e., hydrocarbon) reductions at refineries by venting more refinery PRDs to 

control systems. 

Staff has evaluated the effectiveness of the current rule and has concluded that 

overall, Rule 8-28 has been very effective and has resulted in a significant 

reduction in hydrocarbon emissions from PRDs. As noted above, the Rule is 

designed to phase out atmospheric PRDs by requiring them to be vented to 

control systems when new equipment is installed and when existing equipment is 

modified. For existing atmospheric PRDs that have not yet been phased out, the 

rule requires operators to implement Prevention Measures designed to prevent 

or minimize releases. The rule also targets “bad actors” out of the current 

population of existing atmospheric PRDs – i.e., those demonstrating a high 

potential to have an upset that leads to a release – by requiring any source that 

experiences multiple releases to vent all of its PRDs to a control system within 

one year. In this way, the rule balances the desire to have state-of-the-art 

equipment in place on all equipment, with the reality that there are very many 

existing atmospheric PRDs and it would be highly burdensome to require them all 

to be upgraded immediately. 

The merits of this targeted approach in reducing emissions are clearly evident 

when PRD emissions before prevention measures were required are compared 

to emissions after the prevention measures were required. The average annual 

emissions before the requirement became effective were 32.4 tons; average 

annual emissions after the implementation of the prevention measures is 

12.4 tons.iv This difference represents an overall reduction in annual average 

emissions of 61 percent. Further, the average amount of emissions per release 

 

iv Annual average emissions values are PRD population weighted. Since July 1, 1998, there 

have been 31.0 PRD-months before the prevention measures were implemented and 57.9 PRDmonths after the prevention measures were implemented. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

17

was 3.4 tons before the prevention measures were required; after the prevention 

measures requirement went into effect, the average was 3.3 tons. Before the 

prevention measures, there were six release events with emissions of five tons or 

more; since were required, there have been only three. (A full emissionreduction analysis is provided in Section VI.) 

These successes notwithstanding, staff has concluded that there are several 

areas where the rule can be improved. Staff has reached this conclusion after 

several years of rule evaluation efforts. Beginning at the end of 2001 and 

continuing through mid-2002, District staff conducted an audit of PRDs located at 

the five Bay Area refineries. Staff reviewed data made available by the refineries 

that would indicate PRD venting, such as pressure, temperature, and flow data. 

The goals of the audit included (1) identifying all PRDs that vent directly to the 

atmosphere at units common to all refineries (e.g., hydrotreaters and 

hydrocrackers), (2) verifying the PRD set points, and (3) determining to what 

degree of confidence the District can establish whether the PRDs at the 

refineries experienced releases during the audit period. 

The 2002 Audit concluded that for many PRDs, the refineries do not have a 

means of adequately monitoring PRD releases. In some cases, the facilities do 

not have equipment capable of monitoring parameters that would indicate a 

release has occurred. Often, operators simply rely on sound to detect releases. 

In other cases, the facilities may have monitoring equipment, but it does not 

present an accurate picture of whether the PRD released, for example because 

pressure monitors are remote from the PRD and do not reflect actual pressure 

conditions at the PRD itself. In still others, the facilities may have monitoring 

equipment, but it records data in one-minute averages, which may miss short 

ventings. The Audit further concluded that the refineries do not routinely record 

data on operating parameters that could be used to indicate releases, and where 

they do record such data, in some cases they do not retain it for any length of 

time. The audit also discovered two small PRD releases during the audit period 

that had not been detected by refinery staff. These were both below the 10 

pound reporting threshold and so did not trigger any requirements of the rule. 

But the existence of undetected small releases raises a concern that the 

refineries may have failed to detect some larger releases as well. 

After completion of the PRD Audit, staff then proceeded to draft a Technical 

Assessment Document, which was published in December, 2002. The draft 

Technical Assessment Document reiterated the findings of the PRD Audit report 

and recommended several actions to improve Rule 8-28, including the addition of 

an explicit monitoring requirement to ensure that all PRD ventings are detected 

and addressed. 

Based on these investigations and subsequent rule evaluation work, Staff has 

identified the following areas where Rule 8-28 could be improved. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

18

A. Areas for Improvement of Current Rule 

Detecting and Characterizing Releases

Section 8-28-401 of Rule 28 requires that facilities report all releases of over 10 

pounds of any air pollutant from a PRD. Facilities must provide detailed 

information about each release, such as the duration of the release and the type 

and amount of material released, along with the data and assumptions used in 

calculating this information. However, there is no explicit requirement that 

facilities have equipment installed to enable them to detect all such releases and 

collect the information that must be reported, and there is no standard by which 

to determine compliance. As a result, facilities are using a variety of different 

monitoring approaches for their various processes and equipment, which vary 

greatly in their ability to detect and quantify releases. For example, the vast 

majority of PRDs have some sort of pressure monitoring of the system being 

served by the PRD, but few of them actually measure the pressure at the PRD 

itself. Some monitoring systems are not sensitive enough to detect small 

releases, and may not be detecting releases near the 10 pound threshold that 

triggers the reporting requirement. For these reasons, staff believes that facilities 

need to ensure that they have the capability to detect, characterize, and record 

all PRD releases, and that they need to demonstrate this capability to the District. 

Data Recording and Retention

In cases where facilities do currently have monitoring equipment in place that can 

detect PRD releases, monitoring data are often not recorded or retained. The 

lack of data retention for some PRDs makes it difficult for District Enforcement 

staff to independently verify the pressure and venting history of those devices. 

Enforcement would be enhanced if measurements and recordings of the 

pressures experienced by the PRD were maintained for an explicit period of time 

in the rule. The time period should be long enough to allow a facility and/or 

District staff to go back and review the details of an incident some time after the 

fact, in situations where it was not immediately obvious that there were issues of 

interest to be investigated.

Definition of Equipment Subject to the Rule

Several provisions of Rule 8-28 use the term “source.” These include the 

provision that requires the installation a telltale indicator on each PRD on a 

refinery “source” within 120 days following a release event from that source 

(§ 8-28-304.1); and the provision that requires each PRD on a “source” to be 

piped to an emissions control device following a second release within five years 

from any PRD on the “source” (§ 8-28-304.2). 

However, the term “source” as it is used in the rule can be interpreted in various 

ways, which can lead to confusion on how the rule is to be implemented. 

Typically, petroleum refineries have a vast array of interconnected pieces of 

process equipment and a large number of pumps, compressors, and piping to 

move petroleum products between the various stages of refining. Because these 
Regulation 8, Rule 28 Staff Report 

November, 2005 

19

equipment typically do not operate in isolation, various equipment and groups of 

equipment have been defined as “sources” over time for different regulatory 

purposes. For example, in one context “source” may be used to refer to an 

individual piece of equipment, such as a pressure vessel. In other contexts, 

“source” may be used to refer to an entire process unit, which may be made up 

of a large number of pressure vessels, piping, and related equipment. The rule 

does not explicitly indicate which definition should be used in the context of 

Regulation 8-28, and the general definitions in other regulatory provisions (e.g., 

Regulation 1, Rule 1) are not specific enough to provide further guidance. 

The lack of a clear definition of “source” can lead to confusion in how the rule is 

applied, given that all PRDs on a “source” need to be fitted with a telltale 

indicator after a first release event and must be piped to an emissions control 

device if there is a second release event within five years. If “source” is defined 

narrowly, for example as an individual pressure vessel, these requirements are 

triggered only for the PRDs on that particular vessel. If “source” is interpreted 

broadly, for example as an entire process unit comprised of multiple 

interconnected vessels, then these requirements will be triggered for all of the 

PRDs anywhere on that process unit, which would likely be a larger number.v

Staff has reviewed the history of the 1997 rule amendments that included these 

requirements and has determined that the intent of District staff in proposing the 

amendments, and the intent of the Board in adopting those amendments, was 

that “source” was to be defined broadly to encompass an entire process unit.(4, 5) 

The rationale for this definition is that Section 304 is targeted towards the “bad 

actors” – sources that are identified problems because they have demonstrated a 

propensity for repeat releases – and it is most appropriate to look to the entire 

process unit to determine which are the “bad actors.” This is true for several 

reasons. First, a problem that causes a process upset resulting in an 

overpressure and PRD release will not necessarily be limited to a single pressure 

vessel. A fire in a process unit, for example, could lead to an upset in any 

pressure system anywhere on the unit. Second, even problems that arise a 

single pressure system could subsequently spread to other pressure systems 

within the process unit, for example as increased process rates in one part of the 

unit feed higher volumes of material than normal, or material at a higher 

temperature than normal, into downstream equipment causing a further upset 

there. Third, many of the Prevention Measures that must be implemented to 

prevent or minimize releases are implemented on a process-unit basis. If for 

whatever reason those Prevention Measures are not working as effectively as 

they should, the entire process unit on which the Prevention Measures are 

 

v

 A “process unit” is generally understood to be a discrete component of the refining process that 

may contain one or more vessels and other pieces of equipment. Generally, it is physically 

distinct from other process units and can be isolated from the others process units and shut down 

if necessary. The equipment making up a process unit is normally closely grouped together 

physically and controlled from a common control room. The entire process unit is normally shut 

down as a unit for maintenance turnarounds. District permitting staff often (but not always) 

assign Source Numbers to refinery sources on a process-unit basis.
Regulation 8, Rule 28 Staff Report 

November, 2005 

20

implemented should be considered suspect. For all of these reasons, it makes 

the most sense to look at the entire process unit when assessing which sources 

are considered problematic as a result of a history of frequent releases. Staff 

continues to believe that this approach is the most appropriate and that “source” 

should be explicitly defined to encompass all of the PRDs on an entire process 

unit. Providing an explicit definition to make the meaning of the rule clear would 

simply be a clarification of the existing requirements, and would not impose any 

additional requirements. 

Defining “source” for purposes of Rule 8-28 differently than elsewhere in District 

regulations could cause further confusion, however. The term would have 

different meanings depending on the context in which it is used. A different term 

should be substituted for “source” in Rule 8-28 to avoid any potential for 

confusion. “Process unit” would be appropriate, as it describes the concept 

involved. 

Definition of “Telltale Indicator”

The rule as currently written requires affected facilities to install “telltale 

indicators” whenever a source experiences a PRD release. Although facilities 

may have a general concept of what a telltale indicator is, it is not clear that there 

is a specific definition that is commonly accepted among those affected by this 

Rule. To ensure that there is a clear understanding of what a telltale indicator is 

and how to comply with the associated provisions, this term should be explicitly 

defined. 

Reporting of Failure Analyses

Section 8-28-304.1 of the Rule requires affected facilities to undertake a failure 

analysis after experiencing a release event. This failure analysis must include an 

additional Process Hazards Analysis in which the facility must review its 

Prevention Measures for the equipment involved, as well as an analysis of the 

feasibility and cost-effectiveness of venting the PRDs on the source to a control 

system. The current rule requires that this failure analysis be completed, but it 

does not require that the analysis be submitted to the District or be retained for 

any period of time. Facilities should be required to submit the information to the 

District, or should be required to retain it and make it available on request, to 

allow District inspectors to readily verify compliance with this requirement. 

Non-Substantive Amendments and Clarifications

Finally, the District’s review identified several areas where the current language 

of the rule has become obsolete or is confusing in some way. These are not 

areas where the substantive requirements of the rule need to be changed. All 

that is needed are minor, non-substantive changes to make the rule more clear 

and workable. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

21

B. Potential For Additional Control of PRD Emissions 

The District has long believed that ideally, all atmospheric PRDs should be replumbed to control systems, which is the Best Available Control Technology.vi 

This belief was the basis of the targeted control approach that was adopted in 

1997, which is intended eventually to phase out all atmospheric PRDs. The 

District did not require all existing atmospheric PRDs to be controlled immediately 

only because the large costs involved meant that it would not have been costeffective compared to the emissions reductions that could be achieved. Instead, 

the District adopted the current targeted approach, which focuses on the few 

problem PRDs with a high potential to contribute to ozone formation without 

requiring control on the bulk of the PRD population that is not a significant ozone 

concern. 

In Further Study Measure 8, the District committed to reevaluating its 1997 

determination and examining whether additional reductions in refinery 

hydrocarbon emissions could be achieved by requiring additional refinery PRDs 

to be controlled. To do so, staff evaluated the emissions reductions that could be 

achieved from additional control requirements, as well as the costs that would be 

associated with such requirements. Staff has determined that requiring affected 

facilities to install control systems with capacity to handle all 324 existing 

atmospheric PRDs would likely cost between $1 million and $3.2 million per ton 

of emissions reductions achieved. These costs are roughly two orders of 

magnitude greater (i.e., 100 times greater) than what the District normally 

considers to be cost-effective. Staff has therefore concluded that a blanket rule 

requiring all PRDs to be controlled would not be a cost-effective means to 

achieve Further Study Measure 8’s goal of reducing emissions of ozone 

precursors from petroleum refineries. From the perspective of achieving 

additional reductions in ozone precursors, it would be preferable to maintain the 

current targeted approach and seek further reductions in other areas where the 

same level of benefit could be achieved at far less cost. (Full details of Staff’s 

analyses of emissions reductions and associated costs are set forth in detail 

below in Sections VI and VII.) 

Beyond reductions in ozone-precursor emissions, staff also considered the 

potential benefits of a blanket control rule in preventing or minimizing 

catastrophic industrial accidents. These issues are beyond the mandate of 

Further Study Measure 8, which is an ozone control measure from the 2001 

Ozone Attainment Plan, an ozone planning document. Staff nevertheless 

examined catastrophic accidental release issues because of the importance of 

community and worker safety, and because there was significant public interest 

in these issues voiced during the rule development process. PRDs are safety 

devices designed to vent material in a pressure vessel quickly in order to prevent 

the vessel itself from rupturing or exploding. But by venting the material to 

 

vi “Best Available Control Technology,” or BACT, is a regulatory term used to refer to the current 

state of the art in emissions control technology. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

22

relieve the pressure, PRDs can be implicated as the pathway through which 

acutely hazardous materials inside the vessel can reach the atmosphere. Piping 

PRDs to a control system could thus potentially help prevent or minimize certain 

types of impacts from industrial accidents. Staff, therefore, examined whether 

amendments to Rule 8-28 could help enhance facility safety. 

Staff reviewed the existing regulatory environment covering facility safety and the 

prevention of hazards from accidental releases of acutely hazardous materials. 

Staff have reached the same conclusion that the Board’s Ad Hoc Committee on 

Accidental Releases reached in connection with the 1997 Amendments: The 

current system of federal, state, and local laws and regulations provides a robust 

and comprehensive regulatory safety net designed to ensure that regulated 

entities “design and maintain a safe facility taking such steps as are necessary to 

prevent releases,” in the words of Clean Air Act section 112(r). Staff found that 

the system has even been enhanced by further developments beyond what 

existed in 1997. Notably, Contra Costa County, the home of four of the five Bay 

Area refineries and multiple chemical plants, adopted a landmark Industrial 

Safety Ordinance in December of 1998 (with subsequent amendments in 2000).vii 

(See Contra Costa County Code, Title 4, Chapter 450-8.) The Industrial Safety 

Ordinance requires all affected facilities to develop a Safety Program to prevent 

releases, using inherently safer systems wherever feasible. The Ordinance 

requires each facility to document its Safety Program in a Safety Plan, which is 

then reviewed by the County and circulated to the public for comment. If the 

facility’s compliance is determined to be deficient in any way – including with 

respect to the requirement to use all feasible inherently safer systems – the 

County can require the facility to revise its Safety Program to comply. In this way 

the Industrial Safety Ordinance provides yet another mechanism to ensure that 

facilities conduct their operations in a safe manner. Staff believes that these 

comprehensive and overlapping mechanisms, taken as a whole, provide a sound 

framework for preventing accidental releases of acutely hazardous materials, 

through PRDs or via any other avenue. 

Staff has therefore concluded that adding additional control requirements to Rule 

8-28 as a process safety measure is not warranted. Adopting Rule 8-28 

amendments as a safety requirement, as opposed to a smog-control requirement 

as was contemplated by Further Study Measure 8, would be duplicative of these 

comprehensive safety requirements that are already in place. Duplicative 

regulation would be unwise as a matter of policy, and it is prohibited by Section 

40727(b)(5) of the Health & Safety Code, which requires that the Board of 

Directors make a finding of non-duplication of existing regulations before 

adopting or amending a District rule. 

Furthermore, even if the District were regulating in a vacuum without these 

existing safety requirements, requiring all PRDs to be controlled as a safety 

 

vii District Director Mark DeSaulnier sponsored the Industrial Safety Ordinance in his capacity as 

Contra Costa County Supervisor for District IV. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

23

measure would not be an advisable regulatory approach. A blanket District rule 

requiring control of all PRDs would be a crude instrument that would both overregulate and under-regulate the problem. Such an approach would over-regulate 

the problem because it would require facilities to control PRDs on all processes, 

even those that have a very low potential for releases, or that serve low-volatility 

or low-toxicity substances that present very little acute risk to workers and 

neighbors should a release occur. There would be little to gain by controlling 

such low-risk PRDs, and the costs involved would essentially be wasted. By the 

same token, such an approach would under-regulate the problem because it 

would address only the potential for harm from air contaminants that are emitted 

from the operation through PRDs. It would not address safety risks from other 

categories of accidental releases, such as toxic liquids that could impact surfaceor ground-waters. Similarly, it would not address the possibility of accidental air 

emissions from mechanisms other than PRD lifts, such as ruptures in pipes or 

other equipment that would allow emissions directly into the atmosphere 

regardless of whether PRDs were vented to control systems. Staff therefore 

believes that a blanket requirement that all existing atmospheric PRDs must be 

controlled would not be the most effective approach to addressing accidental 

release issues. 

For all of these reasons, staff is not proposing that the Board of Directors adopt a 

blanket requirement that all existing atmospheric PRDs be vented to control 

systems. 

V. PROPOSED AMENDMENTS 

The rule review described above illuminated several areas in which the rule could 

be made more effective. Staff is therefore proposing that the Board of Directors 

adopt certain amendments to the current rule. The proposed amendments 

would: 

• Explicitly require a monitoring system for all atmospheric PRDs. Section 

8-28-503 in the proposed amendments establishes an explicit monitoring 

requirement. The requirement specifies that any monitoring system shall 

be designed, installed, operated and maintained so that operators are 

notified of releases as defined in the rule, and that the system can quantify 

them. This requirement is proposed to become effective June 1, 2007. 

• Require facilities to demonstrate that they have adequate monitoring 

systems in place for all of their atmospheric PRDs subject to the rule. 

Section 8-28-407 is proposed to require facilities to submit a monitoring 

demonstration report that will enable staff to enforce the monitoring 

requirements. The report will require descriptions of the monitoring 

equipment, operating parameters and engineering calculations used to 

quantify releases. 

• Require data recording and recordkeeping for venting and emissions 

verification. Section 8-28-502 is proposed to require that records of 
Regulation 8, Rule 28 Staff Report 

November, 2005 

24

pressure relief devices, prevention measures, equipment served, 

inspections, and monitoring equipment are kept and made available for 

inspection. Some of these records were required to be kept under Section 

8-28-403, which is proposed for deletion. 

• Clearly define the equipment subject to Section 304 of the rule to ensure 

that the original intent of the rule – to regulate all PRDs on process units 

that demonstrate a propensity for releases – is preserved. A definition of 

“process unit” is proposed in Section 8-28-216 and the term replaces the 

term “source” in Section 8-28-304. 

• Add a definition of “telltale indicator.” Facilities are required to install 

telltale indicators after a first release event, but the term is not defined. 

Defining the term will prevent any confusion over exactly what is required 

under such circumstances. The definition is in Section 8-28-217. 

• Require facilities to identify all process units equipped with atmospheric 

PRDs and provide an inventory of all PRDs serving them. In order for 

staff to clearly understand all of the equipment subject to the rule, 

proposed Section 8-28-408 would require facilities to submit a list of all 

process units equipped with PRDs, identify all the PRDs on each process 

unit, and state when the first turnaround occurred at each process unit 

after 1998. The latter information is necessary to determine when the 

requirements of Section 304 came into effect for each process unit. 

• Make minor, non-substantive changes to the rule, such as, deleting 

obsolete references to “turnarounds”; moving requirements where 

appropriate; and clarifying various sections of the rule. Initial compliance 

dates (the first turnaround after July 1, 1998) have been deleted in the 

proposed amendments; and the requirement to conduct a Process 

Hazards Analysis, an administrative requirement, has been moved from 

Section 8-28-304 to proposed Section 8-28-406.

VI. EMISSIONS 

Episodic emissions from excess pressure in facilities’ process units occur at the 

exhaust of the atmospheric PRD. These pressure releases result from problems 

in the process that could result in catastrophic failure of the process equipment if 

the pressure is not released in a controlled manner. Smaller amounts of 

emissions can also occur during normal pressure conditions if a PRD leaks. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

25

A. Current Emissions Summary 

1. Episodic Emissions 

There have been 43 release events reported by the five Bay Area refineries since 

the current version of the Rule took effect in 1998 (through September 2005). 

These 43 release events vented an estimated 144 tons of VOC emissions in 

total. This record represents an average of 6.1 release events per year over this 

period, involving an average of 20.5 tons of emissions per year. The average 

release event involved 3.3 tons of emissions. Emissions during this period are 

summarized in Table 6.1 on a year-by-year basis. 

Table 6.1 

Summary of Annual Emissions from PRDs 

Total tonnage, 1998-2005 

(rounded to the nearest whole number) 

3 5

1 7

8

2 9

2 3

0

3 1

0

5

1 0

1 5

2 0

2 5

3 0

3 5

4 0

J u l 9 8 -

Jun 99

J u l 9 9 -

Jun 00

J u l 0 0 -

Jun 01

J u l 0 1 -

Jun 02

J u l 0 2 -

Jun 03

J u l 0 3 -

Jun 04

J u l 0 4 -

Jun 05

In citing annual average emissions figures, it must be noted that although annual 

averages can provide a useful metric for assessing the scope of PRD releases 

within the Bay Area in general, they are of more limited value in assessing the 

amount of emissions to be expected from PRDs on any given day. PRDs 

normally go for long periods of time without ever opening, interspersed with short 

periods of significant emissions – sometimes as much as tens or hundreds of 

tons – when there is a process overpressure. This is the reason that the current 

rule requires controls on those PRDs with a high propensity for releases, even 

though control requirements are not cost-effective when looked at from an 

annual-average-emissions standpoint: A PRD that has one very large release per 
Regulation 8, Rule 28 Staff Report 

November, 2005 

26

year will have low annual average emissions, but it should still be controlled to 

prevent the significant ozone impact that would occur on the particular day that 

the release occurs. 

It must also be noted that these emissions figures may be somewhat 

underestimated because of the potential that some releases may not have been 

discovered and reported to the District. As noted above, when staff audited 

refineries’ current PRD practices they found that some PRDs do not have 

comprehensive monitoring systems and may have experienced some releases 

that were never detected. The refineries are confident that they have detected 

most (if not all) of the releases that have occurred, however. If any releases did 

go undetected, it is most likely that they were smaller events, as it would be hard 

not to detect a large release even without a comprehensive monitoring system. 

In addition, the emissions summaries do not account for emissions of less than 

10 pounds because these small releases are not required to be reported to the 

District. But again, these are small events and the annual total of these 

emissions is not expected to be significant. Staff, therefore, believes that the 

data on current levels of PRD emissions are sufficiently reliable. 

2. Fugitive Emissions 

As noted above, the fugitive emissions requirements applicable to PRDs were 

moved to Rule 8-18 in connection with the 1997 rule amendments. Rule 8-18 

currently establishes a very stringent 500 ppm leak standard, and requires 

periodic inspections to ensure PRDs are complying. Emissions from PRD leaks 

are currently estimated at approximately 10 pounds per day (as of 2003). This is 

a very substantial reduction from the 3300 pounds per day that staff estimated 

from leaks during the 1997 rule development process. The reduction can be 

attributed to several developments, including the tightening of the Rule 8-18 leak 

standard to 500 ppm and changes to the EPA method for calculating emissions 

from leaks. Staff believes that these reductions are further evidence of the 

success of the District’s VOC emission rules, although in this case the success is 

attributable to Rule 8-18, not Rule 8-28.

B. Emission Reductions Since Adoption of the Current Rule in 1997 

In assessing current emissions from PRDs, staff also examined the effect of the 

requirement that facilities implement Prevention Measures pursuant to Section 8-

28-303 of the 1997 amendments. That section required each affected facility to 

take a number of steps to reduce the chance of PRD releases, such as operator 

training, improved equipment, inherently safer process designs, enhanced 

maintenance protocols, and monitoring systems. Affected facilities had to 

implement these Prevention Measures during the first “turnaround” (scheduled 

shutdown for routine maintenance) after the amendments took effect in 1998. To 

assess the effectiveness of this Prevention Measures requirement, staff 

compared emissions before the Prevention Measures requirement went into 
Regulation 8, Rule 28 Staff Report 

November, 2005 

27

effect (i.e., before the first post-1998 maintenance turnaround for each process 

unit) and after the requirement was triggered (i.e., after the first post-1998 

turnaround).viii The results of this evaluation are presented in Table 6.2. 

Figure 6.2 

Comparison of PRD Release Event Emissions Before and After the 

Prevention Measures Requirement Took Effect 

Total tonnage, 1998 – 2005 

(rounded to the nearest whole number) 

3 1

1 6

8

2 9

0 0

5

1 0 0

2 3

0

3 1

0

0

5

1 0

1 5

2 0

2 5

3 0

3 5

J u l 9 8 -

Jun 99

J u l 9 9 -

Jun 00

J u l 0 0 -

Jun 01

J u l 0 1 -

Jun 02

J u l 0 2 -

Jun 03

J u l 0 3 -

Jun 04

J u l 0 4 -

Jun 05

* The large emissions spike shown for 2004-2005 was primarily the result of two large releases at 

an alkylation unit at the Tesoro Refinery that vented 9.3 tons and 20.4 tons of hydrocarbons, 

respectively. Under Section 8-28-304.2, the PRDs on that unit will now be required to be vented 

to controls so that any further releases will not reach the atmosphere. 

 

The results of this comparison show the effectiveness of the Prevention 

Measures requirement in reducing PRD emissions. Before the Prevention 

Measures requirement came into effect, emissions averaged 32.4 tons/year from 

these PRDs; after the Prevention Measures were required, the annual average 

 

viii To make this comparison, staff looked at each process unit equipped with atmospheric PRDs 

and determined when the Prevention Measures requirement went into effect – the date of the 

process unit’s first maintenance turnaround after July 1, 1998. Staff then compared the 

frequency and size of releases from that process unit before the Prevention Measures 

requirement took effect with the frequency and size of releases after the Prevention Measures 

requirement took effect. Staff then aggregated the data for all PRDs District-wide to obtain an 

overall comparison between emissions before and after the Prevention Measures requirement 

took effect. 

= Emissions before Prevention Measures were required 

= Emissions after the Prevention Measures requirement took effect 

31*
Regulation 8, Rule 28 Staff Report 

November, 2005 

28

has dropped to 12.4 tons per year. Furthermore, overall amount of material 

released has decreased; with a total of 83.8 tons released before the prevention 

measures were required compared with 60.1 tons after the Prevention Measures 

were required. The number of significant releases has declined. Before 

prevention measures were required, there were six release events greater than 

five tons; since the prevention measures requirement became effective, there 

have been only three. The distribution of release events by size is set forth in 

Table 6.3, and shows that the most common type of release before the 

Prevention Measures requirement came into effect was 1,000 to 10,000 pounds, 

whereas the most common type after the Prevention Measures requirement 

came into effect has been in the 10- to 100-pound range. 

Table 6.3 

Release Events Distributed by Amount of VOCs Released

Size of Release 

(pounds emitted)

Number of Releases 

Before Prevention 

Measures 

Number of Releases 

After Prevention 

Measures 

10 – 100 2 6 

100 – 1000 6 2 

 1000 – 10,000 11 7 

10,000 – 100,000 6 3 

Staff believes that these demonstrated declines in the number of PRD releases, 

the amount of emissions per release, and overall PRD emissions, demonstrate 

the effectiveness of the Prevention Measures requirement in the current rule. 

Staff also looked back even further and compared recent PRD emissions rates 

with historical emissions data prepared in connection with the 1997 

Amendments. In the process of developing the Amendments, Staff documented 

51 reported releases in the three years from 1993 through 1995 totaling an 

estimated 459 tons of emissions, which included a single very large event in 

1993 that involved an estimated 371 tons. These figures represent an average 

of 17 release events per year during this period. On a mass basis, average 

emissions were 153 tons per year when the very large 459 ton release is 

included, or 27.2 tons per year if that single event is treated as an outlier and 

excluded from the calculation.(6) These historical emissions rates are significantly 

larger than the rates the region has experience since the 1997 amendments went 

into effect, both in terms of the number of releases per year and mass of 

emissions released per year. Release events dropped from an average of 17 per 

year in 1993-95 to an average of 6 per year since July of 1998. Total annual 

emissions dropped from an average of 27.2 tons per year or 153 tons per year in 

1993-95 (depending on whether the very large 459 ton release is included) to an 
Regulation 8, Rule 28 Staff Report 

November, 2005 

29

average of 17.9 tons per year since July of 1998. These comparisons further 

highlight Rule 8-28’s successful track record in reducing emissions.ix

C. Potential Further Emissions Reductions 

Staff evaluated the emissions reductions that could be expected in two 

scenarios: (i) requiring a demonstration that every facility has comprehensive 

monitoring equipment in place for all PRDs in atmospheric service; and (ii) 

requiring all atmospheric PRDs to be vented to a control system with a 

destruction efficiency of 95 percent or greater. For each scenario, staff evaluated 

emissions reductions based on the 20.5 tons per year average emissions that the 

region has experienced overall since 1998, and also based on the smaller 12.4 

tons per year average emissions that have occurred since the Prevention 

Measures requirement went into effect. 

1. Reductions from Monitoring Demonstration 

Establishing explicit standards for monitoring will allow the District to ensure that 

all facilities are adequately monitoring all atmospheric PRDs. Ensuring that such 

monitoring is in place will ensure that facilities are fully aware of release events, 

which will allow operators to better target their release prevention and mitigation 

efforts and will ensure that repeat-release “bad actors” are identified and 

subjected to additional control requirements. These effects, in turn, are expected 

to lead to fewer release events and reduced emissions. 

US EPA has estimated from time to time in various rulemakings that enhanced 

monitoring can result in a ten to twenty percent emissions reduction. Here, staff 

believes that the proposal to add an explicit monitoring requirement should more 

appropriately use a five percent emissions reduction factor, because many PRDs 

are already subject to some form of monitoring and it appears that most releases 

– and especially the larger ones – are being detected. 

Using the 20.5 tons-per-year average emissions figures from the period 1998-

2005, a five percent reduction would result in emissions reductions of 

approximately 1.0 tons per year. Using the 12.4 tons-per-year average from the 

period after the Prevention Measures requirement came into effect, a five percent 

reduction would result in emissions reductions of 0.62 tons per year. 

 

ix It must be recognized that other factors besides the adoption of the 1997 Amendments likely 

contributed to some of the observed emission reductions. For example, the Pacific Refining 

facility closed in 1997, taking a number of PRDs out of service and removing them as potential 

emissions sources. Any emissions reductions from independent influences such as this would 

have occurred even if the 1997 Amendments had never been adopted. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

30

2. Reductions from Controlling Additional PRDs 

Facilities can achieve a 98 percent reduction in emissions by venting releases to 

a control system such as a flare or recovery system. Using the 20.5 tons per 

year overall average annual emissions since 1998, a blanket control requirement 

could therefore be expected to result in emissions reductions of 20.1 tons per 

year. Using the 12.4 tons-per-year average since the Prevention Measures 

requirements came into effect, a blanket control requirement could be expected 

to result in emissions reductions of 12.2 tons per year. 

VII. ECONOMIC IMPACTS 

This section presents the economic impacts of the proposed amendments, and 

also addresses the economic feasibility of a blanket requirement that all 

atmospheric PRDs be controlled immediately. 

A. Costs That Would Be Incurred by Affected Facilities 

1. Demonstration Reports 

The proposed rule amendments require that each affected refinery prepare and 

submit to the District a “Monitoring System Demonstration Report.” This report 

would provide information that would demonstrate that the refineries have 

adequate monitoring systems in place for all of their atmospheric PRDs subject 

to the rule. Section 8-28-407 is proposed to require facilities to submit a 

monitoring demonstration report that will enable staff to enforce the monitoring 

requirements. The report will require descriptions of the monitoring equipment, 

operating parameters and engineering calculations used to detect and quantify 

releases. Staff estimates that preparing the needed information for inclusion in 

the report for each PRD would take about two man-hours per PRD. (Most of this 

information is already available and must be utilized in the event of a release 

event and the subsequent report to the District.) The hourly labor cost is 

estimated to be approximately $100 per hour. Because there are 324 PRDs in 

total at the five Bay Area refineries, staff estimates the total one time cost of this 

provision to be about $64,800. 

The proposed amendments also require each affected refinery to provide a listing 

of each process unit equipped with atmospheric PRDs and the associated PRDs. 

This information is already generally available and would not require any 

additional man-hours to generate. Preparation of the report for submission 

should take no longer than one hour for each refinery. Staff, therefore, estimates 

the cost associated with this provision to be approximately $100 per refinery; this 

translates to $500 District-wide. 

The total costs of the demonstration reporting requirements are therefore 

expected to be approximately $65,300. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

31

2. Monitoring Equipment 

The current rule implicitly requires that facilities monitor their PRDs so that they 

will know when they have a release that has to be reported in accordance with 

Section 8-28-401. A requirement to report release information implies a duty to 

investigate whether releases have occurred, which cannot be done without 

monitoring. The proposed amendments would simply make the monitoring 

requirement explicit. Simply making the requirement explicit should not involve 

any additional costs beyond what is currently required. Indeed, staff has found 

that most PRDs already have sufficient monitoring equipment to satisfy the 

requirements being proposed. 

Staff recognizes that some facilities do not currently have comprehensive 

monitoring systems for all PRDs, however. Staff has therefore evaluated the 

costs of implementing monitoring systems, even though they are not technically 

additional costs imposed by the proposed amendments, and even though the 

many PRDs that already have comprehensive monitoring systems in place will 

not need to incur such costs. 

Staff evaluated several types of equipment that could be used to implement a 

monitoring system that would satisfy the proposed monitoring requirements. 

Staff’s evaluation was based on conversations with refinery personnel and cost 

quotes from vendors. The cost of installing of a telltale indicator, such as a sock, 

would range from $500 to $1000 per PRD. Costs for installation of pressure 

sensing devices to provide pressure monitoring capability would likely range 

between $1,000 and $1,500 per PRD.(7 8 9 10) Staff does not believe that any 

facility will be unduly burdened by such costs. Moreover, staff believes that any 

such costs would be more than justified in situations where facilities are not 

currently monitoring their PRDs. 

3. Controlling Additional PRDs 

Staff also examined what it would cost to expand the Rule to require all existing 

atmospheric PRDs to be retrofitted and vented to control systems. Staff 

examined costs under two scenarios: 

(1) Refineries would have to install additional control systems to handle the 

PRD emissions (the more likely scenario); and 

(2) Refineries would be able to use spare capacity in existing control systems 

to handle the additional PRD emissions, and would not have to install new 

equipment (a more conservative but far less likely scenario). 

Staff has found that under either scenario, requiring all PRDs to be controlled 

would not be cost effective. Each scenario is described in more detail below. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

32

Cost of Installing New Control Systems:

Most if not all affected facilities would be required to install a new control system 

(or multiple systems) if they were required to control all existing atmospheric 

PRDs. PRDs are designed to vent large amounts of material very quickly in 

order to protect equipment from overpressures. As a result, control systems 

handling PRD emissions (safety flares, predominantly) have to be designed to 

handle large amounts of material from each PRD. Moreover, to accommodate all 

foreseeable upset conditions that might trigger PRD releases, such systems 

need to be able to handle emissions from multiple PRDs simultaneously. As a 

result, requiring all PRDs to be controlled would require a very significant amount 

of control capacity. Staff does not believe that affected facilities have spare 

capacity in their existing systems to handle all of their atmospheric PRDs, and 

would thus have to install new flare systems instead. Staff has concluded that it 

would cost approximately $192.5 million District-wide to install new flare systems 

with a capacity great enough to handle all existing atmospheric PRDs. 

Staff derived this $192.5 million estimate from two sources: (1) a cost study 

undertaken Jacobs Engineering, Inc. (“Jacobs Engineering”), a large refinery 

engineering and construction contractor, in connection with the 1997 

Amendments; and (2) a recent cost estimate performed by the Shell refinery in 

Martinez pursuant to District Regulation 8-28-304.1. 

Jacobs Engineering Estimate:

Jacobs Engineering concluded that it would cost approximately $20 million to 

install a new flare system capable of handling 50 PRDs.(11) This estimate was 

based on an accuracy range of +/- 30 percent, which translates to a cost range of 

approximately $14 million to $26 million. A summary of the Jacobs Engineering 

estimate is set forth in Table 7.1, broken out by line-item. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

33

Table 7.1 

Jacobs Engineering Cost Estimate for a Safety Flare Recovery System to 

Handle 50 PRDs 

 

Component Descriptions Cost Estimates 

50 PRDs and relief lines, 3⁄4” to 8” $1,180,000 

Relief Headers and Knockout Drum $2,970,500 

Flare Gas Recovery system $4,864,000 

Flare $3,553,000 

Pipeway adjustment $ 662,050 

Subtotal $13,229,550 

Shipping $ 123,000 

Sales Tax $ 508,000 

Engineering $2,790,000 

Contingency $3,094,000 

Total $19,744,550 

Staff updated the Jacobs Engineering estimate to 2005 dollars by adjusting the 

costs for inflation. Staff looked at a number of annual inflation measures, as set 

forth in Table 7.2. Staff ultimately used an average of 1.39 percent to convert to 

2005 dollars. 

Table 7.2 

Various Inflation Adjustment Factors: 1993 to 2005 

Bureau of Labor Statistics Consumer Price Index (12) 1.38 

Solomon & Associates Plant Replacement Value(13) 1.26 

Turner Construction Cost Index(14) 1.54 

Average Inflation Factor 1.39

Adjusted for inflation, the Jacobs Engineering estimate for a flare system capable 

of handling 50 PRDs is $27.5 million in 2005 dollars, with a plus or minus 

30 percent confidence range of $19.2 million to $35.7 million in 2005 dollars. 

Given the age of the Jacobs Engineering estimate, staff also compared the 

estimate with current construction and materials costs to assess whether the 

estimate, adjusted for inflation, continues to provide a reliable picture of what it 

would actually cost to install a flare system today. Staff contacted contractors 

with experience in design and construction of flare systems, as well as affected 

facilities that have recently installed flares and/or similar equipment. In some 

cases, these contacts were able to review the Jacobs Engineering study and 

provide an overall opinion on whether the methodology was generally valid and 

whether the cost inputs used, adjusted for inflation, generally reflect current 

realities. In other cases, they were able to give current cost data for individual 

components of a flare system (including labor and/or materials), which allowed 
Regulation 8, Rule 28 Staff Report 

November, 2005 

34

District staff to compare the Jacobs Engineering estimate with current realities on 

a line-item by line-item basis. Several examples demonstrate how these 

inquiries served to validate the Jacobs Engineering estimates.

• Flare, Knockout Drum, and Water Seal: 

Staff first compared the Jacobs Engineering estimates for the various materials 

and equipment needed for a flare system with the current costs for such items. 

Staff contacted John Zink, Inc., a flare manufacturing contractor, who provided 

current cost information for a 200-foot self supported flare, a knockout drum built 

right into the bottom of the flare base, and a water seal. The company estimated 

that this equipment would cost roughly $500,000 today.(15) This estimate 

corresponds very closely with the Jacobs Engineering estimate, which comes to 

$505,960 (in 2005 dollars) for a flare, knockout drum, and water seal. 

• Thermal Incinerator 

Staff also examined cost estimates published by the United States Environmental 

Protection Agency (“EPA”) for a thermal incinerator and associated piping.(16) A 

thermal incinerator is a control device that combusts hydrocarbon vapors before 

they are emitted to the atmosphere in a manner similar to a flare. This similarity 

makes it a good comparator to a flare. EPA estimates that the cost of the 

thermal incinerator itself (without the lines to connect it to the PRDs and all of the 

other parts of the complete system) would cost between $25 and $90 per 

standard cubic foot per minute (scfm) of capacity. For a 60,000 scfm system that 

could handle 50 PRDs – the capacity used in the Jacobs Engineering estimate – 

the total cost would be $1,500,000 to $5,400,000. The analogous Jacobs 

Engineering estimate for the flare equipment is $3,633,500 (in 2005 dollars), 

which is squarely within the range of EPA’s estimate. 

• Piping: 

Staff also examined the costs of installing piping to carry PRD emissions to the 

flare system, which is another large portion of the costs of a new flare system. 

Staff examined the piping costs that the Tesoro refinery incurred when they had 

two releases within five years and had to pipe certain PRDs to a control system 

under Section 8-28-304.2 of the current rule. In Tesoro’s experience, it cost 

approximately $30,000 to $32,500 per 100 linear feet of pipe.(17) This is slightly 

higher than the Jacobs Engineering piping estimate, which ranged from $9,750 to 

$24,310 in 2005 dollars, but is well within an order of magnitude. Again, this 

recent experience corresponds well with the estimates drawn from the work 

Jacobs Engineering did in connection with the 1997 Amendments. 

• Labor Inputs: 

To examine whether the estimates of labor inputs that Jacobs Engineering used 

are accurate, Staff contacted Rex Kenyon & Associates, a maintenance 

consulting services company. Kenyon provided labor estimates for a large 

number of particular tasks that would be involved in installing a flare system. 

Kenyon has generated these estimates from trades estimating manuals, and has 

compiled them into Excel spreadsheet estimating tool which District staff used to 
Regulation 8, Rule 28 Staff Report 

November, 2005 

35

compare the Kenyon estimates of current labor inputs with the Jacobs 

Engineering estimates.(18) Staff identified 32 tasks included in the Jacobs 

Engineering Estimate that had direct comparators in the Kenyon estimates. Of 

these 32 common tasks, the Jacobs estimate was lower for 20 of them (ranging 

from 39 percent to 96 percent of the Kenyon estimates) and higher for 11 of them 

(ranging from 111 percent to 229 percent of the Kenyon estimates), with one task 

being exactly the same. This comparison shows that the labor estimates that 

Jacobs Engineering used continue to be valid today for estimating the costs 

involved in installing a new flare system. 

Given this close correlation between the cost inputs used in the Jacobs 

Engineering estimate (as adjusted for inflation) and current costs for similar 

inputs, Staff believe that the Jacobs Engineering cost estimate, adjusted for 

inflation, provides a reliable estimate of what it would cost to install a new flare 

system today. 

Shell Estimate:

The District also examined an estimate prepared by Shell for installing a new 

flare to handle PRD emissions at its refinery in Martinez. Shell prepared this 

estimate pursuant to Section 8-28-304.1 of the Rule, which requires facilities to 

analyze the cost-effectiveness of controlling PRDs that experience release 

events. In connection with this requirement, Shell examined the costs of 

installing a new flare, liquid knockout drum, flare gas recovery, major headers, 

and individual sub-headers servicing individual PRDs. Shell estimated that it 

would cost the refinery $50 million for a system that could serve 39 PRDs in one 

area of the refinery and $25 million for a system that could serve ten PRDs in 

another area of the refinery. Shell estimated that it would need two separate 

flare systems because the relatively long distance between the two areas and the 

relatively low design pressures involved made it unreasonable to expect that a 

single flare system could serve both areas.(19)

This estimate is slightly higher than the Jacobs Engineering estimate of $27.5 

million (in 2005 dollars) for a system capable of handling 50 PRDs, but it is within 

a factor of two of that estimate. 

Costs to Control All PRDs District-Wide:

Staff then used the estimates referenced above to estimate what it would cost to 

control all PRDs District-wide. Using the more conservative estimate of $27.5 

million for a system to handle 50 PRDs, Staff then looked at how many new flare 

systems would be needed to control all 324 PRDs currently in atmospheric 

service around the Bay Area. Staff assumed that one new flare system with a 

capacity to handle 50 PRDs would be sufficient to control the PRDs at three of 

the refineries, and that two new flare systems would be required at each of the 

remaining two refineries because they have around 100 PRDs each. Staff 

therefore estimated that seven new flare systems would be needed in total to 
Regulation 8, Rule 28 Staff Report 

November, 2005 

36

control the PRDs at all five refineries.x These calculations are summarized in 

Table 7.4. 

Table 7.4 

Flare Systems Required to Control PRDs at the Five Bay Area Refineries 

Refinery Atmospheric PRDs Additional Flare 

Systems Needed 

Chevron-Texaco 41 1 

ConocoPhillips 12 1 

Shell 107 2 

Tesoro 99 2 

Valero 65 1 

Totals 324 7 

At approximately $27.5 million per flare system, controlling all 324 PRDs with 

flares would thus result in a total capital cost of approximately $192.5 million 

District-wide. As with any estimate, there is some uncertainty inherent in this 

number. Staff is confident that it is reasonably accurate, however, and certainly 

is accurate to within an order of magnitude. 

Costs of Using Existing Control Systems: 

Staff also examined the costs of piping existing atmospheric PRDs to existing 

control systems. As noted above, it is highly unrealistic to assume that there is 

currently excess capacity to handle all 324 PRDs throughout the District: PRDs 

are designed to release large volumes of material in a short period of time, and 

control systems need to be capable of handling combined emissions from many 

PRDs simultaneously in case of an upset involving multiple units. Furthermore, 

to the extent that there is existing excess capacity, the current rule contemplates 

that any such existing excess capacity would be reserved for handling “bad 

actor” PRDs that have repeat releases and trigger the control requirements. It 

would be preferable to target any existing excess capacity to these PRDs, rather 

than use it for PRDs that may have a very low potential for release. Staff 

therefore believes that although there is most likely some spare capacity, it is 

unrealistic to assume that all existing PRDs can be vented to existing control 

systems. Staff have nevertheless analyzed the costs of controlling all existing 

PRDs assuming that sufficient spare capacity exists as an ultra-conservative 

estimate of the very least it could possibly cost to control all existing PRDs. 

 

x

 There is a certain level of approximation inherent in these calculations, because PRDs do not 

exist at facilities in neat multiples of 50. Staff believes that such approximation is appropriate, 

however, because the experience of refineries with fewer than 50 PRDs – which will be able to 

install a smaller flare system and incur fewer costs – will balance out the experience of facilities 

that have more than 50 PRDs and will require a larger flare system at greater cost. Notably, the 

two refineries that staff estimate will need two flare systems have very close to 100 PRDs each 

(99 and 107), almost exactly double the 50 PRDs that staff used as the basis for their cost 

estimate. Staff therefore believes that their assumptions are supportable and appropriate for this 

cost estimation exercise. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

37

Staff first examined the experience of one refinery that was able to reroute 

emissions from eight PRDs back into its process unit in a closed loop, without 

having to send them to a flare or vapor recovery system. The refinery was able 

to do so because unlike most PRDs, the devices involved served a liquid-packed 

unit, which (unlike gaseous equipment) can alleviate an overpressure without 

having to vent a lot of material. The refinery found that it could pipe the PRDs to 

a knockout drum to recover liquids vented from the PRDs, and then vent the 

relatively small amount of remaining vapors back into the system without risking 

any over-pressure problems. The refinery was able to accomplish this 

modification at a cost of $2 million for eight PRDs.(20) Extrapolating this 

experience District-wide – which is not a reasonable assumption given that only a 

small subset of PRDs is likely to be eligible for such treatment – the cost would 

be $81 million for all 324 PRDs. 

Staff also reviewed an estimate by another refinery for piping PRDs to existing 

control capacity, which was prepared pursuant to Section 8-28-304.1 of the 

current rule. The refinery estimated that it would be able to vent an individual 

PRD to an existing flare system at a cost of $75,000.(21) The refinery noted that 

existing spare capacity was limited, making it unreasonable to assume that all 

PRDs could be treated this way. Assuming they all could, however, this estimate 

would translate into a District-wide cost of $24.3 million for all 324 existing 

atmospheric PRDs. 

Assuming there was existing capacity for all PRDs District-wide, the only costs 

that facilities would incur would be the cost of installing piping to carry emissions 

from the PRD to the control device. Based on the estimates outlined above of 

$9,750 to $32,500 for 100 linear feet of piping per PRD, which was the average 

length of piping used in the Jacobs Engineering analysis, the costs of piping 

alone would be approximately $1.6 million to $5.3 million for 50 PRDs. For the 

324 atmospheric PRDs District-wide, this corresponds to a total cost of $10.5 

million to $34.8 million. 

Based on these estimates, Staff has concluded that even if facilities had existing 

capacity to control all existing atmospheric PRDs, it would still cost $10.5 million 

to $81 million to control all PRDs District-wide. Again, staff does not believe that 

this is a realistic estimate given that it is highly unlikely that facilities have 

sufficient existing capacity for 324 PRDs. 

Cost Effectiveness: 

Based on the cost estimates of the various control scenarios outlined above, and 

the emissions reductions that would be expected from each of them, staff has 

calculated the cost-effectiveness of each option. Staff amortized the costs over a 

10 and 20-year period at seven percent to determine the annualized costs. Staff 

then compared the annualized costs with the anticipated annual emissions 
Regulation 8, Rule 28 Staff Report 

November, 2005 

38

reductions based on the 20.5 tons-per-year emissions average since 1998 and 

based on the lower 12.4 tons-per-year average since the Prevention Measures 

requirements took effect. The results of these calculations are set forth below. 

Cost-Effectiveness If New Control Systems Required:

For new flare systems to control all existing atmospheric PRDs, the costeffectiveness calculations are as follows. 

Estimated total cost District-wide: $192.5 million 

Cost annualized over 10 years: $26.8 million per year 

Cost annualized over 20 years: $17.9 million per year 

Estimated emissions reduction efficiency: 98% 

 Tons of reductions from 20.5 tons-per-year baseline: 20.1 tons per year 

 Tons of reductions from 12.4 tons-per-year baseline: 12.2 tons per year 

Based on these calculations, the cost-effectiveness of flare systems under 

different scenarios is set forth in Table 7.5. 

Table 7.5 

Cost Effectiveness Calculations for New Control Systems 

Annualization Period 

Cost-Effectiveness 

Based on 20.5 tpy of 

emissions 

Cost-Effectiveness 

Based on 12.4 tpy of 

emissions 

10 years $1.3 million per ton $2.2 million per ton 

20 years $890,000 per ton $1.5 million per ton 

Cost-Effectiveness Assuming Existing Spare Control Capacity:

If there were existing flare or vapor-recovery capacity to handle all existing 

atmospheric PRDs, and all that was needed was piping from the PRDs to the 

existing flares or vapor recovery systems, the cost-effectiveness calculations are 

as follows. 

Estimated total cost District-wide: $10.5 million - $81 million 

Cost annualized over 10 years: $1.5 million - $11.4 million per year 

Cost annualized over 20 years: $977,000 - $7.6 million per year 

Estimated emissions reduction efficiency: 98% 

 Tons of reductions from 20.5 tons-per-year baseline: 20.1 tons per year 

 Tons of reductions from 12.4 tons-per-year baseline: 12.2 tons per year 
Regulation 8, Rule 28 Staff Report 

November, 2005 

39

Based on these calculations, the cost-effectiveness of simply piping PRD 

emissions to existing flare or vapor-recovery capacity, assuming such capacity is 

available, is set forth in Table 7.6 for the different scenarios evaluated. 

Table 7.6 

Cost Effectiveness Calculations Assuming Existing Spare Capacity 

Annualization Period 

Cost-Effectiveness 

Based on 20.5 tpy of 

emissions 

Cost-Effectiveness 

Based on 12.4 tpy of 

emissions 

10 year $75,000 - $567,000 

per ton 

$123,000 - $934,000 

 per ton 

20 year $49,000 - $378,000 

per ton 

$80,000 - $623,000 

per ton 

In each of these cases, the costs associated with controlling all existing 

atmospheric PRDs would be far higher than what the District normally considers 

to be cost-effective. To give some perspective, the costs associated with the 

1997 amendments were estimated to be $20,000 per ton of VOC emissions, 

which is at the high end of cost effectiveness for District regulatory proposals. 

Because of the very high cost, staff is not recommending that all PRDs be 

required to be piped to control systems. 

B. Incremental Cost Effectiveness 

Under California Health and Safety Code Section 40920.6, the District is required 

to perform an incremental cost analysis for a proposed rule under certain 

circumstances. To perform this analysis, the District must (1) identify one or 

more control options achieving the emissions reduction objectives for the 

proposed rule, (2) determine the cost effectiveness for each option, and (3) 

calculate the incremental cost effectiveness for each option. To determine 

incremental costs, the District must calculate the difference in the dollar costs 

divided by the difference in emission reduction potentials between each 

progressively more stringent control option as compared to the next less 

expensive option. 

As explained above, staff examined two options in connection with the proposed 

amendments: an option to enhance the clarity and enforceability of the current 

rule, and an option to require all existing PRDs to be controlled. The first option 

would require facilities to demonstrate that they have the ability to detect release 

events and report them as required by the rule, which staff estimates will cost 

$65,300. Amortized over 10 or 20 years, this cost comes to approximately 

$9,300 or $6,200 in annualized costs, District-wide. The second option would 

require all PRDs to be controlled, and would cost between $26.8 million a year 

(annualized over 10 years) or $17.9 million (annualized over 20 years), assuming 

new control systems would be required. The incremental difference in 
Regulation 8, Rule 28 Staff Report 

November, 2005 

40

annualized costs would therefore be $26.8 million or $17.9 million, depending on 

which amortization period is used. 

It is difficult to estimate the emissions reductions associated with monitoring and 

reporting requirements because they do not directly lead to emissions reductions. 

At the same time, comprehensive monitoring and reporting are necessary to 

ensure adequate compliance with the rule, so these requirements are essential 

to all the reductions expected from a regulation. Staff recognizes these inherent 

difficulties in analyzing the cost-effectiveness of such requirements, but has 

nevertheless estimated a five percent emissions reduction factor from these 

requirements. A five percent reduction would generate 1.0 tons per year in 

emissions reductions if the 20.5 tons-per-year baseline is used, or 0.62 tons per 

year if the 12.4 tons-per-year baseline is used. The emissions reductions that 

could be achieved by controlling all PRDs would be 20.1 tons or 12.2 tons, 

depending on which baseline is used. The incremental difference in emissions 

reductions would therefore be 19.1 tons or 11.5 tons depending on which 

baseline is used. 

Based on these incremental emissions reductions and incremental costs, the 

incremental cost-effectiveness of the second option would be $1.08 million -

$1.40 million per ton if the 20.5-ton emissions baseline is used or $1.56 - $2.33 

million per ton if the 12.4-ton baseline is used. 

Under the unlikely scenario that no additional control systems would be required, 

the same calculations generate an incremental cost-effectiveness of $50,800 - 

$598,000 per ton if the 20.5 ton emissions baseline is used, and $83,900 - 

$988,000 per ton if the 12.4 ton baseline is used. 

C. Socioeconomic Impacts 

Section 40728.5 of the Health and Safety Code requires an air district to assess 

the socioeconomic impacts of the adoption, amendment, or repeal of a rule if the 

rule is one that “will significantly affect air quality or emissions limitations.” 

Applied Economic Development of Berkeley, California has prepared a 

socioeconomic analysis. The analysis concludes that the affected facilities 

should be able to absorb the costs of compliance with the proposed rule without 

significant economic dislocation or loss of jobs. The socioeconomic analysis is 

attached as Appendix A. 

VIII. ENVIRONMENTAL IMPACTS 

Pursuant to the California Environmental Quality Act, the District has had an 

initial study for the proposed amendments prepared by Environmental Audit, Inc. 

The initial study indicated there are no potential significant adverse 

environmental impacts associated with the proposed amendments. The District 

intends to file a negative declaration for the proposed amendments to this rule. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

41

IX. REGULATORY IMPACTS 

California Health and Safety Code Section 40727.2 requires the District to 

identify existing federal air pollution control requirements for the equipment or 

source type affected by the proposed rule or regulation. The District must then 

note any differences between these existing requirements and the requirements 

imposed by the proposal. Regulation 8, Rule 28: Episodic Releases from 

Pressure Relief Devices at Petroleum Refineries and Chemical Plants applies to 

emissions from atmospheric pressure relief devices located at refineries and 

chemical plants. The proposal does not expand the applicability or the current 

rule. No federal air pollution control requirement or other District rule regulates 

episodic emissions from pressure relief devices. 

X. RULE DEVELOPMENT PROCESS 

In developing the proposed amendments to Rule 8-28, District Staff went through 

an extensive rule development process to solicit and receive input from affected 

facilities, interested organizations, and other members of the public. This section 

summarizes that work. 

A. PRD Audit – May, 2002 

Staff’s rule development efforts commenced with a detailed examination of the 

current rule. Staff began by conducting an audit of PRDs at all five petroleum 

refineries in the Bay Area to investigate whether those facilities have been 

detecting and reporting PRD releases as required by the Rule. The audit did not 

find any definitive evidence of reportable releases (over 10 pounds) that had 

gone undetected or unreported. Staff could not conclude that all reportable 

releases have been detected, however, because the refineries did not have 

comprehensive data available for many of their PRDs, either because they do not 

monitor the PRDs or because they do not maintain data for any length of time. 

Indeed, staff discovered several small releases of which the facility was not 

aware. These involved less than 10 pounds of material so they are exempt from 

the Rule and would not have had to be reported, but they highlight the possibility 

that reportable releases could have gone undetected as well. Staff concluded 

from this review that the potential exists for reportable releases to go undetected 

by refinery operators, and recommended that Regulation 8-28 should contain 

explicit monitoring and recordkeeping requirements to alleviate this problem. 

B. Technical Assessment Document – December 2002 

Staff then conducted a technical assessment of the current Rule that assessed 

options for further improvements. The resulting Technical Assessment 

Document (“TAD”) echoed the findings of the PRD Audit that facilities are not 

monitoring all of their PRDs sufficiently to ensure that any reportable release is 

detected and reported to the District. The TAD recommended that an explicit 
Regulation 8, Rule 28 Staff Report 

November, 2005 

42

monitoring requirement be added to the rule to ensure that all releases can be 

detected and quantified, among other ideas. 

C. Technical Workgroup Meeting – May 9, 2005 

Staff next convened a public workgroup meeting to discuss the findings of the 

Rule Audit and Technical Assessment Document and potential improvements to 

the rule. The workgroup meeting was held on May 9, 2005, at the District’s 

offices, and was attended by representatives of the five Bay Area refineries, the 

Western States Petroleum Association (“WSPA”), and Communities for a Better 

Environment (“CBE”), as well as by staff of the District and the California Air 

Resources Board. The workgroup discussed the following regulatory concepts: 

• Clarification of the term “source” as used in the rule. Representatives of 

WSPA and the refineries suggested that “source” should be limited to 

pressure-related equipment, while representatives of CBE suggested that 

“source” should be defined to include any equipment that could be 

affected by a process upset, even if it is not pressure-related. 

• Making explicit the duty to monitor for PRD releases. All parties were in 

general agreement that the rule should explicitly require monitoring to 

detect and characterize PRD releases. Representatives of CBE 

contended that current monitoring systems are deficient and that the 

refineries’ reported information on releases underestimates actual 

emissions. Representatives of the refineries contended that current 

monitoring is sufficient to detect all releases, but agreed that further 

improvements could be made. 

• Requiring telltale indicators on all PRDs. Representatives of WSPA and 

the refineries contended that pressure monitoring systems are preferable 

to telltale indicators as methods to detect and quantify releases. They 

suggested that facilities be given a choice to use telltale indicators or 

pressure monitors, instead of allowing pressure monitors only where 

telltale indicators are infeasible. 

• Requiring additional controls on PRDs, beyond what is already required by 

the Rule. Representatives of CBE suggested that the District should 

require all PRDs to be piped to control systems, and that the District 

should at least go back and review its previous analyses on what level of 

controls should be required to determine if its earlier conclusions are still 

valid. 

• Removal of obsolete provisions and other minor non-substantive 

amendments. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

43

D. Public Workshop Meeting – September 14, 2005 

Staff then took this input and developed a draft of the proposed rule 

amendments, along with a draft staff report. Staff disseminated these documents 

among interested parties and the public, and then convened an early-evening 

public workshop meeting in Rodeo, Contra Costa County, to receive public input 

on them. The meeting was attended by representatives of the refineries, WSPA, 

Dow Chemical, CBE, the Contra Costa County Health Services Department, and 

the District, as well as a number of interested individuals. The discussion 

focused on the following principal areas. 

• Success of current approach. Representatives of WSPA noted that the 

current version of the rule has worked well in reducing the frequency and 

severity of PRD releases. 

• Definition of “source”. Representatives of CBE again commented that 

“source” should not be limited to pressure-related equipment, but should 

include all equipment in a given process unit. They claimed that this was 

the intent of the current version of the rule, and that limiting “source” to 

pressure-related equipment would amount to backsliding. 

• Additional control requirements. Representatives of CBE and several 

members of the public suggested that the District should require all PRDs 

to be piped to controls. Representatives of CBE commented that such a 

requirement would be cost-effective, and suggested that staff need to 

conduct further analysis on that issue. They and other commenters also 

stated that all PRDs should be controlled regardless of costs. 

Representatives of CBE claimed that the “Precautionary Principle” states 

that all feasible pollution prevention measures should be implemented 

regardless of the costs and that application of that principle here would 

require controls on all PRDs. Several commenters suggested that a 

blanket control requirement could be made less onerous by phasing it in 

over a long lead time. 

• Acutely hazardous materials. Representatives of CBE stated that staff 

should consider requiring controls on all PRDs to reduce the likelihood of a 

catastrophic release of acutely hazardous materials that could affect 

workers and nearby residents. They stated that allowing any PRDs to 

vent to the atmosphere presents an unacceptable risk. 

• Fugitive emissions. Representatives of CBE commented that staff needs 

to consider the potential for reduced fugitive emissions (leaks) from PRDs 

that would result from requiring all PRDs to be controlled. They 

commented that this is an additional benefit to a blanket control 

requirement that staff needs to consider. 

At the conclusion of the meeting staff also invited the public to submit written 

comments on the draft rule and staff report, and several entities did so. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

44

E. Informal Office Meetings with Interested Parties – September 2005 

Staff also met individually during this time period (immediately before and after 

the public workshop) with representatives from the refineries and WSPA, CBE, 

Contra Costa County Health Services Department, and Dow Chemical to discuss 

the proposed regulations. Following up on these meetings, each of these entities 

(except Dow Chemical) also submitted written comments on the public workshop 

draft summarizing their positions. 

F. Further Technical Workgroup Meeting – October 20, 2005 

Staff also held a further technical workgroup meeting to discuss additional costeffectiveness information on which Staff wanted to receive input. Staff also 

sought additional input on how the term “source” should be defined, and on how 

to specify minimum requirements for monitoring systems for PRD releases. 

Some participants also voiced a desire to have the District prohibit the use of 

atmospheric PRDs altogether. 

G. Changes to the Proposal in Response to Public Input 

In response to the public input received during this process, Staff took further 

action in several areas, including the following. 

• Telltale indicators and monitoring: Several parties suggested that 

pressure monitoring systems are better than telltale indicators in many 

instances. Staff agrees with these commenters, and has removed the 

preference for telltale indicators that it initially proposed. The current 

proposal would allow affected facilities to choose whichever system of 

monitoring they deem most appropriate, as long as it meets the standards 

set forth in Section 8-28-503. In addition, Staff has made the monitoring 

requirement more generic so that it can accommodate situations where 

pressure is not the principal indicator of whether the PRD has released 

and if so how much material was involved. Any monitoring system will 

require a demonstration (in a report to the District) of its ability to 

effectively monitor PRD releases. 

• “Source” Definition. Staff initially proposed that “source” be defined as all 

equipment within a pressure-related system. Commenters pointed out 

that the intent of the current rule is that “source” is a broader term 

encompassing all equipment within a given process unit, because of the 

potential for a process upset leading to a PRD release is not limited to a 

particular pressure-related systems within a process unit. Staff 

researched the intent of the current rule further and determined that this is 

correct. Staff reviewed the rationale behind the intent of the current rule 

and believes that it is sound from a technical and policy perspective, and 

so has changed its proposal. Staff now proposes to define “source” as a 
Regulation 8, Rule 28 Staff Report 

November, 2005 

45

process unit, the definition that was intended in the 1997 amendments and 

has added a definition of “process unit” to clarify the intent of the rule. 

• Further cost analysis. In response to comments that staff should reevaluate the costs and benefits of piping all PRDs to control systems, staff 

conducted additional cost analysis, and done additional work to verify 

costs used for the 1997 amendments. Staff contacted major engineering 

firms to estimate costs from piping and controls regarding the Jacobs 

Engineering report prepared in connection with the 1997 amendments and 

found that the costs, as adjusted for inflation to 2005 dollar values, are 

valid. Engineering firms contacted to validate costs are listed in the 

Reference Section at the end of this staff report. 

• Further catastrophic release analysis. In response to comments that staff 

should consider provisions directed at preventing catastrophic releases of 

acutely hazardous materials, staff has reviewed the existing requirements 

and the work of the Board’s Ad Hoc Committee on Accidental Releases in 

the 1990s. There are numerous federal, state and local ordinances that 

create programs to plan, prevent and mitigate accidents and releases of 

materials as a result of accidents. The District has been involved in the 

development of these programs for various Bay Area facilities, including 

refineries. Of note is the Contra Costa County Industrial Safety Ordinance 

(ISO), adopted in 1998. The ISO requires process hazards analyses, 

implementation of action items from those analyses, review of prevention 

measures and root cause analyses when accidents occur, strengthening 

existing review, inspection, auditing, and safety requirements, including 

public input on results of inspections and audits, and expansion of federal 

and state programs to additional industrial processes. These issues are 

addressed in detail in Section IV.B of the Staff Report. 

• Fugitive Emissions. Comments suggested that staff should assess 

fugitive emissions from PRDs. Fugitive emissions from leaks at pressure 

relief devices were estimated to be 3300 pounds (1.65 tons) per day in 

1997. Because of the requirements in Rule 8-28 and in Rule 8-18: 

Equipment Leaks, inspection programs and stricter standards imposed 

since 1997 have reduced emissions to approximately 10 pounds per day. 

Detailed responses to all of the comments received -in response to the public 

hearing notice and final draft rule are provided in Appendix B. 

XI. CONCLUSIONS 

The 1997 amendments to Regulation 8, Rule 28 have been successful in 

preventing releases, reducing emissions, and requiring control of those pressure 

relief devices that need it most. The rule has required refiners to consider these 

releases and integrate control technologies into their future plant modifications. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

46

The proposed amendments to Regulation 8, Rule 28 meet the commitment made 

as part of 2001 Ozone Attainment Plan Further Study Measure 8. The proposed 

amendments will enhance the District’s ability to enforce the rule and enhance 

the operator’s ability to detect releases. The proposed amendments also clarify 

the rule so that it can be more easily understood. 

Pursuant to the California Health and Safety Code Section 40727, before 

adopting, amending, or repealing a rule the Board must make findings of 

necessity, authority, clarity, consistency, non-duplication and reference. The 

proposed regulation is: 

• Necessary to supplement the District’s ability to enforce the regulation and 

ensure that all provisions in the regulation are complied with; 

• Authorized by California Health and Safety Code Section 40702; 

• Clear, in that the new regulation specifically delineates the affected industries, 

compliance options and administrative and monitoring requirements for 

industry subject to this rule, 

• Consistent with other District rules, and not in conflict with state or federal 

law, 

• Non-duplicative of other statutes, rules or regulations, and 

• The proposed regulation properly references the applicable District rules and 

test methods and does not reference other existing law. 

A socioeconomic analysis prepared by Applied Development Economics has 

found that the proposed amendments would not have a significant economic 

impact or cause regional job loss. A California Environmental Quality Act 

analysis prepared by Environmental Audit, Inc., concludes that the proposed 

amendments would not result in any adverse environmental impacts. A Negative 

Declaration for the proposed amendments has been prepared and was circulated 

for comment. All public noticing requirements for adoption of this rule have been 

met. 

Staff recommends the adoption of the proposed amendments to Regulation 8, 

Rule 28: Episodic Releases from Pressure Relief Devices at Petroleum 

Refineries and Chemical Plants, and approval of a CEQA Negative Declaration. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

47

XII. RESPONSE TO PUBLIC COMMENTS 

Staff published the proposed amendments to Regulation 8, Rule 28, on 

November 7, 2005, and solicited comments from interested parties. Staff 

received comments from the Western States Petroleum Association (“WSPA”) 

(through its attorneys Pillsbury Winthrop Shaw Pittman LLP); Shell Oil Products 

US Martinez Refinery (“Shell”) (which submitted a comment letter and also an 

email comment); and Tesoro Refining & Marketing Co. (Tesoro).xi Staff has 

considered all of the comments and has the following responses. The comments 

and responses are grouped by issue area, in no particular order. 

Comment 1: Commenters expressed support for the targeted approach in the 

current rule, which aims to control “bad actor” sources that experience multiple 

releases within a 5 year period. (Tesoro comment letter at p. 3.) Commenters 

expressed significant differences in opinion on how to define a “source” that is a 

bad actor (as discussed further below), but there has been general agreement 

that throughout the rulemaking process that the approach of identifying “bad 

actors” that have a propensity for repeated releases is appropriate. 

Response: Staff agrees that the targeted approach is appropriate, and is not 

proposing any changes to the requirement that the PRDs on a source that 

experiences repeated releases must be vented to a control system. 

Comment 2: Several commenters suggested that releases caused by 

mechanical failures should not be counted when determining which sources are 

“bad actors.” (Shell Comment Letter at p. 1; WSPA Comment Letter at p. 5, 

fn. 5.) Presumably, these commenters would prefer to count only releases 

caused by operator error or some other type of negligent conduct. 

Response: Staff disagrees with this comment. Staff believes that any source 

that experiences multiple release events within a five-year period should be 

considered a “bad actor,” regardless of the reasons for the releases. 

Comment 3: A number of commenters contended that the term “source” used to 

define the “bad actors” regulated under the current rule should be defined as a 

pressure-related system of equipment, and not as an entire Process Unit as the 

current rule does. Commenters supported their position by contending that 

process upsets resulting in overpressures and ultimately in PRD releases are 

limited to individual pressure systems and cannot cascade from one pressure 

system to another, contrary to statements in the Staff Report. Commenters also 

 

xi After the close of the public comment period, staff also received a “proprietary and confidential” 

letter from the Valero Refining Company. As the letter was not received during the public 

comment period and it purports to be a confidential communication that the District cannot make 

public, Staff do not believe this letter to be a public comment that the District must consider and 

respond to. But the relevant points raised in the letter are essentially the same as those raised in 

other public comments, and so Staff are responding to the substance of the points Valero raised 

through these Responses. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

48

contended that the PRD release Prevention Measures required by the current 

rule are always implemented on a pressure-system basis and never on a 

Process-Unit-wide basis, contrary to statements in the Staff Report. Based on 

these points, the commenters concluded that there is no technical justification for 

defining “source” as “Process Unit”. (Tesoro Comment Letter at pp. 3-5; WSPA 

Comment Letter at pp. 5-7.)

Response: Staff continues to believe that it is more appropriate to treat the 

entire Process Unit as the “bad actor” that needs to be controlled if it 

demonstrates a propensity for releases. Staff disagrees that upsets that cause 

PRD releases are necessarily limited to individual pressure-related systems. To 

the contrary, in many situations a process upset or similar problem that ultimately 

results in a PRD release could potentially affect any or all of the pressure-related 

systems within a Process Unit. Using the more limited definition of “source” 

proposed by these commenters – an individual pressure-related system instead 

of the entire Process Unit – would therefore allow some “bad actor” units with a 

demonstrated history of multiple releases to go uncontrolled. 

One prime example that illustrates why these commenters’ arguments are 

misplaced is the No. 50 Crude Unit at the Tesoro refinery. Tesoro has had 

recurring upsets at this Process Unit that have affected multiple pressure 

systems. According to Tesoro, the problems have arisen when the crude feed 

pumps experience abrupt rate changes, which causes a “pressure transient 

throughout the crude train.” (See Letter from Alan A. Savage III, Environmental 

Manager, Tesoro Golden Eagle Refinery, to Christine Schaufelberger, Director of 

Enforcement, BAAQMD, December 11, 2002.) The first time this happened after 

the provisions of the 1997 Rule took effect, the upset caused PRDs to release on 

one pressure-related system, the first stage desalter. (See District Episode Nos. 

03R32 and 03S04.) Then, the next time it happened the upset caused PRDs to 

release on a different pressure-related system, the second stage desalter. (See 

District Episode Nos. 03U11 and 03U68.) Tesoro took the position advocated by 

the refineries now: that the 50 Crude Unit was not a “bad actor” with a history of 

multiple releases because the repeat releases occurred on separate pressurerelated systems – even though they were caused by a common, recurring 

problem. Tesoro therefore did not vent any of the PRDs involved to control 

systems, leaving both pressure systems unregulated even though the Unit had a 

demonstrated history of feed pump problems causing pressure transients and 

resulting in releases. Further problems then caused more releases at the first 

stage desalter again. (See District Episode Nos. 03Y27, 04A38, and 04F12.) 

Tesoro conceded that it had to control that pressure system, but it continued to 

maintain that the second stage desalter was a different “source” and thus exempt 

from the control requirement because it was a different pressure system. Again, 

that approach – which the refineries are urging here – would have left the second 

stage desalter unregulated, even with a demonstrated history of feed pump 

problems creating pressure transients that can cause PRD releases from that 
Regulation 8, Rule 28 Staff Report 

November, 2005 

49

pressure system.xii This is just one example from the record of releases since 

the current rule took effect that illustrates why it would be inappropriate to define 

“source” more narrowly as limited to individual pressure-related systems. To do 

so would exempt repeated upsets from the regulation where they happen to 

affect different pressure systems within a common Process Unit. 

The commenters are similarly incorrect that the Prevention Measures designed 

to prevent or minimize releases are applied only on a pressure-system basis. 

The record indicates that many of the Prevention Measures apply to the entire 

Process Unit, not simply individual pressure systems. For example, one 

common type of Prevention Measure is to ensure that Unit operators are 

adequately trained on how to respond to upset conditions before they can result 

in a PRD release. This type of Prevention Measure applies to all pressure 

systems within a Process Unit, and if it should fail as a result of inadequate 

training the failure could result in a release on any of the pressure systems within 

the Process Unit. And again, this type of failure has actually happened in the 

record staff has examined. For example, operator training is one of the 

Prevention Measures the Tesoro refinery identified for its #1 HDS Process Unit. 

(See Avon Refinery Atmospheric PSV Prevention Measures Report, July 14, 

2000.) That Prevention Measure failed when maintenance workers were left in 

charge of the Process Unit while they were working on the Unit’s computer 

control system. The maintenance workers lacked adequate training to 

understand the significance of process alarms, and as a result they ignored a 

high-level alarm on the Unit’s prefractionator surge drum, which overfilled and 

caused a PRD release. (See District Episode No. 02N76.) The upset happened 

to occur in this particular vessel on this particular day, but the problem that led to 

the PRD release – operators failing to respond to alarms properly – was a 

Process-Unit-wide problem. It could have led to a release from any of the 

pressure systems within the Process Unit if they had happened to experience 

upsets on that particular day. Again, this is just one of many examples in the 

record of PRD Prevention Measures reports the District has compiled since the 

current rule was adopted. 

These examples, as well as many more like them in the record the District has 

examined, show why the rule cannot be limited to individual pressure-related 

systems. The causes of release events are not limited to individual pressurerelated systems, and so a regulation limited to individual pressure-related 

systems would be too narrow. 

Comment 4: Several commenters also contended that the term “source” in the 

current version of the rule that was adopted in 1997 was intended to be limited to 

pressure-related equipment, not an entire Process Unit. These commenters 

 

xii Tesoro eventually controlled the PRDs on both pressure systems. But it maintains that it did so 

because there were multiple releases on each individual system, not because it viewed the pump 

problem and ensuing pressure transients as a repeat upset affecting the Process Unit. (See

Tesoro Comment Letter at 1.) 
Regulation 8, Rule 28 Staff Report 

November, 2005 

50

argue that the District should adopt the narrower definition of “source” to conform 

to what they contend was the original intent in 1997. (Tesoro Comment Letter at 

p. 4; WSPA Comment Letter in its entirety.xiii) 

Response: Staff disagrees that the intent behind the current version of the rule 

adopted in 1997 was to limit the definition of “source” to individual pressurerelated systems. The regulatory language adopted in 1997 uses the ambiguous 

term “source,” which could be used to refer to either a Process Unit or a narrower 

grouping of equipment. But the Staff Report that accompanied the 1997 

Amendments and the presentation made at the Public Hearing make it clear that 

the rule was intended to regulate all PRDs on a Process Unit, requiring telltale 

indicators after a first release event and requiring controls after a second release 

event within 5 years. The issue was initially raised by a public comment, which 

stated that the control requirements triggered by a second release event within 

five years “should apply to a second release from any PRD serving the same 

process unit, not merely the same PRD nor even those in parallel service.” Staff 

agreed, and made clear that where there is a second release within 5 years from 

any PRD serving the same process unit, “any PRD serving the same source 

(process unit) must be vented to control.” (1997 Staff Report, p. 30, Comment 18 

& Response (emphasis added).) Staff also made this interpretation clear at the 

public hearing at which the Board of Directors adopted the current version of the 

rule, explaining that in the event of a second release within 5 years, “ultimately, 

the refinery will be required to vent all of the devices associated with the process 

unit to a gas recovery system or safety flare.” (Testimony of Barry Young, 

Principal Air Quality Engineer, December 9, 1997 (emphasis added).) 

The commenters are correct in pointing out that staff used some language that 

was less than perfectly clear in certain places in the 1997 Staff Report when 

referring to the PRD groupings that the rule applies to. For example, in some 

places the 1997 Staff Report uses the term “parallel service”, and in some places 

it suggests that only the individual PRD that experiences two releases must be 

controlled, and nothing more. (See WSPA Comment Letter at p. 7.) But all of 

those statements were made in discussions of other issues unrelated to the issue 

of what was intended by the term “source”. The only place in the 1997 Staff 

Report where that issue is squarely addressed is in the Response to Comments 

cited above, where Staff were unambiguously clear that the term was intended to 

mean “Process Unit.” Taken in conjunction with the discussion at the Public 

Hearing, there is only one conclusion that can be drawn from the record: the 

intent behind the 1997 Amendments was that the “sources” covered by Section 

304 of the Rule are entire Process Units, not simply individual pressure-related 

systems within Process Units. 

 

xiii WSPA appears to be confused about the year in which the current rule was adopted. The 

material provisions of the current rule were adopted in 1997. Minor typographical revisions were 

adopted in 1998, but they did not impact any of the issues involved in the current proposal or any 

of the points raised by the commenters. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

51

The commenters are also correct in pointing out that the language that staff 

ultimately proposed for Section 8-28-304.2 in 1997 was less than perfectly clear, 

stating that upon a second release event within five years on the same “source”, 

“the facility shall vent all the pressure relief devices that vent the second Release 

Event, including those in parallel service,” to a control system. (WSPA Comment 

Letter at 7.) This language is ambiguous and confusing. It suggests that the 

group of PRDs that have to be controlled after the second release event 

“includ[es] those in parallel service,” which implies that the group is larger than 

those in parallel service – i.e., all those on the Process Unit. But it does not 

explicitly use the term “Process Unit,” or even the similar term “source” that is 

used elsewhere in Section 304. As a result, it is impossible to determine 

conclusively from the language of the regulation by itself what must be controlled. 

Faced with such ambiguity, one must look to the statements made on the subject 

in the Staff Report and at the Public Hearing. As outlined above, those 

statements clearly demonstrate that the intent was that all PRDs on a Process 

Unit must be controlled when the Process Unit experiences two release events 

within five years. 

Comment 5: Several commenters claimed that applying the regulation to 

Process Units is inconsistent with the District’s past practice. (WSPA Comment 

Letter at 8-9; Tesoro Comment Letter, pp. 1-2.) One commenter contended that 

it is “inequitable” to apply the rule to Process Units in light of the District’s 

purportedly inconsistent past practice. (Tesoro Comment Letter, pp. 1-2.) 

Response: The District’s past practice has been to interpret “source” as 

“Process Unit”, as was intended when the rule was adopted in 1997. This 

practice was first documented just two months after the current rule was adopted, 

on February 9, 1998, when WSPA representatives met with District staff to 

explain that WSPA believed that using a “Process Unit” definition was too 

burdensome. The refineries contended then – as they do now – that the term 

“source” was overly broad, and asked that it be narrowed to cover only those 

PRDs on the individual vessel or other piece of equipment involved in a release, 

not on the entire Process Unit. District staff disagreed (as Staff continues to do 

now), and declined to propose narrowing the regulation when minor nonsubstantive amendments were adopted in March of 1998.xiv 

The District then applied this same interpretation in 1999 at the Benicia Refinery 

(operated by Exxon at the time, and now operated by Valero). There, Exxon 

experienced a PRD release at one of the three towers at its Crude Light Ends 

Unit, which are each a separate pressure system. Exxon approached the District 

to ask whether it had to install telltale indicators on all of the PRDs on the Unit, or 

 

xiv One commenter appears to suggest that the District’s failure to clarify explicitly that “source” 

was intended to mean Process Unit in the 1998 revisions indicates that the District acquiesced in 

WSPA’s desire to have a narrower definition. (WSPA Comment Letter at p. 7.) But the District’s 

refusal to adopt WSPA’s position shows that the District disagreed with WSPA’s arguments for 

the narrower definition, not that the District agreed. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

52

only those on the pressure system where the release occurred. The District 

made clear that telltale indicators were required on the entire Unit, and that in the 

event of a second release event within 5 years all 4 of the PRDs on the Unit 

would have to be controlled.xv (See letter from William de Boisblanc, Director, 

BAAQMD Permit Services Division, to Eric R. Hengst, Exxon Company, USA, 

August 16, 1999.) 

Finally, the District is also applying this interpretation currently with Tesoro’s 

Alkylation Unit. The Process Unit has experienced the two release events that 

trigger the requirement to control the PRDs on the Unit. The District will require 

Tesoro to control all of the PRDs on the Unit by May 1, 2006, one year after the 

second release event occurred. 

The commenters are correct that the Tesoro refinery used the narrower 

interpretation in connection with the repeated releases at the 50 Crude Unit 

(described above in connection with Comment 3), and the District did not take 

action to enforce the broader definition. But the failure of an agency to take 

enforcement action in a particular situation where a facility has not complied with 

a regulation does not re-write the regulation to excuse the non-compliance, 

whatever the reason. And as described above, the 50 Crude Unit is a prime 

example of why the regulation should not be limited to regulating individual 

pressure systems. The pump problems and resulting pressure transients that 

were causing the PRD releases there were affecting multiple pressure systems. 

Addressing only the individual pressure systems that experienced multiple 

releases allowed the potential for further releases at the other pressure systems 

affected by the pump problems and resulting pressure transients. Thus, to the 

extent this situation was an example of inconsistent application of the regulation, 

it should be considered as an aberration to be corrected and not as evidence of 

what was intended by the rule. Indeed, the situation further demonstrates why 

the language of the rule should be clarified to make its meaning unambiguous. 

 

Comment 6: One commenter also contended that an early draft version of the 

current proposed amendments that was circulated in connection with a public 

workshop meeting in August of this year proposed to define “source” as “process 

component”. The commenter pointed out that the definition of “process 

component” in that early draft was essentially limited to pressure-related 

equipment and did not encompass the entire Process Unit. The commenter 

noted that the draft staff report accompanying that workshop draft stated that the 

 

xv Valero now contends that there were 8 additional PRDs on equipment “associated with” the 

Virgin Light Ends Unit for which the District did not require controls. (WSPA Comment Letter at p. 

9.) But Valero never brought this issue to the District’s attention in 1999. Valero simply asked if it 

had to address all of the PRDs on the Virgin Light Ends Unit, or simply those on the pressure 

system that had the release. Faced with that question, the District applied the “Process Unit” 

approach and responded that all of the PRDs on the Unit needed to be addressed. Had Valero 

informed the District that there was additional equipment that was also part of the Process Unit, 

the District would have concluded that it had to be addressed as well. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

53

term “source” was intended to be limited to pressure-related equipment. The 

commenter contended that these drafts suggest that “source” in the current rule 

should be limited to pressure-related systems. (WSPA Comment Letter at pp. 8-

9.) 

Response: The commenter is correct that staff initially concluded that “process 

component” was a more appropriate definition for “source”. But this was only a 

preliminary assessment contained in a public workshop draft, which staff 

prepared in order to publish their initial assessment of the issue and to allow 

interested parties to comment on it. That is exactly what happened. As detailed 

in Section X of the Staff Report, the discussion at the public workshop revealed 

that the intent of the current rule was to regulate all the PRDs on a Process Unit, 

because the upsets that trigger PRD releases are not limited to particular 

pressure-related systems. (See generally Comments 3 and 4 above and the 

Responses thereto.) After the public workshop meeting, Staff went back and 

researched the issue in more detail and concluded that this was correct: “source” 

should properly be defined as “Process Unit” as was intended in the 1997 

Amendments. Given this situation, Staff’s erroneous initial determination in the 

workshop draft does not suggest that the definition of “source” should be limited 

to individual pressure systems. 

Comment 7: Commenters stated that controlling all PRDs on a Process Unit 

when the Process Unit experiences two releases within 5 years is costly, and 

contended that doing so will likely require the refineries to construct new flare 

systems. These commenters contended that the costs of such control systems 

are not justified by the resulting emissions reduction benefits. Most of these 

comments were couched in terms of “cost effectiveness” and suggested that 

controlling all the PRDs on a problem Process Unit would not be “cost effective.” 

Commenters also stated that staff have not conducted an adequate costeffectiveness analysis as required by California law for the use of “Process Unit” 

as the definition, either in 1997 when the rule was initially adopted or in 

connection with the current proposed amendments. (Tesoro Comment Letter at 

pp. 3-5; WSPA Comment Letter at pp. 10-15; Shell Comment Letter at p. 1.) 

Response: Staff recognizes that requiring PRDs to be vented to control systems 

on “bad actor” Process Units that experience two release events within five years 

may require refineries to incur substantial costs. As explained in the Staff 

Report, venting PRDs to control systems is costly, regardless of whether a new 

control system needs to be installed. But for “bad actor” Process Units, such 

expenditures would achieve important corresponding air quality benefits. 

Controlling the PRDs on these units will eliminate potentially enormous episodic 

releases at volatile processes that have demonstrated a propensity for recurring 

problems. Historically, such releases have resulted in emissions of tens and 

even hundreds of tons of ozone precursors in a single day – amounts that are 

very significant from the perspective of preventing violations of the applicable 

ambient air quality standards for ozone. Where there is a substantial risk of a 
Regulation 8, Rule 28 Staff Report 

November, 2005 

54

release that could contribute to a violation of a public health standard, even very 

large costs could be justified under certain circumstances. “Bad actor” Process 

Units that have a demonstrated propensity for releases present such 

circumstances. 

It is important to note that this conclusion holds for “bad actor” units that have 

demonstrated a propensity for repeat releases, but it is much more tenuous with 

respect to the bulk of the PRD population that has not shown a high release risk. 

Where PRDs have a very low potential for upsets and releases, and hence 

present a far lower ozone concern, it is not possible to justify very large 

expenditures on control equipment. For this reason, staff continues to believe 

that a blanket control requirement that all existing PRDs be vented to a control 

system would not be justified given the costs involved, whereas the targeted 

approach requiring controls only on “bad actor” Process Units is worth the costs 

involved. 

With respect to the comments to the effect that targeting “bad actor” Process 

Units “does not meet standard tests for cost effectiveness” (Tesoro Comment 

Letter at p. 1; see also WSPA Comment Letter at pp. 10-15.), the commenters 

have apparently misunderstood the concept of cost-effectiveness. There is no 

such thing as a “standard test for cost-effectiveness.” Cost-effectiveness is a 

useful tool for comparing alternative emission reduction strategies to determine 

which alternative can achieve the same goal at the least cost. It is not a bar to 

adopting certain regulations simply because they may be expensive. To the 

extent that the concept is applicable here, it would be to compare the rule’s 

current approach with alternative approaches that would achieve the same result 

in controlling episodic emissions from the “bad actor” PRDs that have 

demonstrated a propensity for repeat releases (although this is a hypothetical 

exercise because no such alternative approaches have been identified). It is not 

appropriate to use “cost-effectiveness” expressed in terms of annual emissions to 

compare a regulation aimed at episodic emissions with other regulations that 

address steady-state emissions produced day in and day out at a constant rate, 

as most District regulations do. This is because episodic releases occur 

relatively rarely and thus do not present large totals on an annual basis. They 

may still be a large problem on a daily basis, however, because they can emit 

large amounts of material in a short time. Using the concept of “costeffectiveness” as these commenters suggest ignores these benefits of controlling 

episodic releases. 

Finally, with respect to the formal cost-effectiveness analysis required by 

California law, the targeted control approach set forth in the current rule – 

regulating “bad actor” Process Units that experience multiple releases within five 

years – was supported by the cost-effectiveness analysis that was conducted in 

connection with the adoption of the current rule in 1997. Staff has conducted a 

further formal cost-effectiveness analysis for the changes that are being 

proposed to the rule, but the analysis did not revisit the issue with respect to the 
Regulation 8, Rule 28 Staff Report 

November, 2005 

55

targeted control approach because staff is not proposing any changes to this 

approach. Staff’s response to the comments that the “Process Unit” clarification 

constitutes a change from the existing rule is set forth above in connection with 

Comment 4. 

Comment 8: Commenters contended that applying the regulation to entire 

Process Units involves certain negative environmental effects because of the 

natural gas usage and other aspects of flare systems that may be required for 

“bad actor” Units that demonstrate a propensity for repeat releases. These 

commenters stated that the District has not conducted a CEQA analysis of these 

impacts. (Tesoro Comment Letter at pp. 4, 5; WSPA Comment Letter at pp. 15-

18.) 

Response: Staff recognizes that there are certain environmental impacts 

associated with flares. Such impacts are outweighed by the potential for very 

large releases from “bad actor” process units that show a propensity for upsets, 

however. For example, a small negative impact from emissions from pilot or 

purge gas used in a flare on a daily basis would be outweighed by the large 

positive impacts from having a flare in place when a PRD vents a large volume of 

material to relieve a process overpressure. Staff therefore believes that overall, 

this rule has a positive effect on the environment.

With respect to the legal requirements of CEQA, the current rule was adopted 

pursuant to a negative declaration in 1997 that found that the requirement to 

control PRDs on a Process Unit that experiences multiple releases would have 

no significant adverse environmental impacts. The District is not changing that 

requirement in any way, and so there are no additional or different environmental 

impacts to be analyzed. The District has prepared a CEQA initial study that 

evaluates the effects of the changes to the rule that staff are proposing. This 

CEQA document does not address the impacts of the targeted control approach 

that requires repeat-release Process Units to be controlled because that is not 

something that is being proposed in this rulemaking. Staff’s response to the 

comments that the “Process Unit” clarification constitutes a change from the 

existing rule is set forth above in connection with Comment 4. 

Comment 9: Several commenters identified certain items of equipment at 

certain refineries that the commenters claim would be inappropriately grouped 

together for regulatory purposes under the “Process Unit” definition. These 

commenters were concerned that if they have two releases from such equipment 

within 5 years, the rule would unfairly require them to control all of the PRDs on 

all of the equipment involved. (Tesoro Comment Letter pp. 4-5, Summary Points 

1 & 5; Shell Comment Letter at p. 1; Valero communication referenced in 

footnote 1 above.) 

Response: How the regulation applies to individual pieces of equipment at 

individual facilities is necessarily a fact-specific determination that must be made 
Regulation 8, Rule 28 Staff Report 

November, 2005 

56

on a case-by-case basis after a full investigation of all relevant circumstances. 

Staff are not in a position in the context of a rulemaking effort to provide a 

conclusive determination of how the regulation will work in hypothetical future 

situations. As a result, Staff cannot provide a meaningful response to these 

comments regarding particular Process Units at particular refineries. 

As a general principle, however, Staff intends to apply the regulation in a 

reasonable manner, and does not intend to require controls in situations where it 

would be ill-advised from an air quality perspective. Staff has built in a 

mechanism to achieve this goal in Section 8-28-409 of the proposed 

amendments, which requires each refinery to submit to the District a list of the 

Process Units that are equipped with PRDs, as the refineries would define them. 

Staff will then have an opportunity to determine how to define the equipment 

subject to the rule in an appropriate manner so that the unreasonable outcomes 

these refineries fear will be avoided. If it is truly not possible to avoid significant 

unreasonable outcomes with the current “Process Unit” approach, it will always 

remain possible to propose further amendments to address any problems that 

become evident as the rule is implemented, while avoiding the pitfalls associated 

with the refineries’ narrower approach that are outlined above. 

Comment 10: One commenter noted that the current rule contains an exception 

to the requirement to implement at least three redundant Prevention Measures 

for each PRD that allows facilities to implement fewer than three prevention 

measures for a particular PRD on the condition that the control requirements are 

triggered after a single release rather than after two releases. The proposed 

amendments delete the option of having fewer than three prevention measures, 

but do not provide a future compliance date. The commenter stated that the lack 

of a future compliance date means that in some cases facilities may be out of 

compliance immediately upon adoption. (Shell e-mail comment.) 

Response: Staff has made a change to the proposed amendments to correct 

this oversight, which would provide a six month period to allow facilities to 

implement three prevention measures for each PRD. This revision is not a 

substantive change to the proposed amendments, and does not require a new 

public notice and comment period or continuation of the public hearing in order to 

be adopted. 

Comment 11: Although no public commenter raised this issue, District staff 

have discovered that one release event that occurred since the current rule took 

effect was inadvertently left out of the baseline emissions inventory Staff used to 

calculate the emissions reductions expected from the rule (and related 

calculations) in the original version of the Staff Report. 

Response: Staff have corrected the oversight and have calculated the correct 

numbers. These numbers are set forth in the revised version that is being made 

available in connection with this Response to Public Comments. None of these 
Regulation 8, Rule 28 Staff Report 

November, 2005 

57

changes affects the conclusions reached in the Staff Report or the proposed 

amendments to the rule. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

58

XIII REFERENCES 

 

1 Crosby® Pressure Relief Valve Engineering Handbook, Technical Document 

No. TP-V300, May 1997. 

2 Crosby® Series Technical Brochure: JOS-E, JBS-E, JLT-JPS-E, JLT-JBS-E, 

JOS-H-E; Spring Loaded Pressure Relief Valves; 2005 

3

 Testimony of Mr. Jim Karas, BAAQMD Air Quality Engineering Manager, 

Meeting of BAAQMD Ad Hoc Committee on Accidental Releases, October 26, 

1995. 

4

 Final Staff Report, Control of Episodic Releases Of VOCs From Pressure 

Relief Devices at Petroleum Refineries, Dec. 9, 1997, p. 30. 

5

 Testimony of Mr. Barry Young, Principal Air Quality Engineer, Public Meeting 

of the BAAQMD Board of Directors, Dec. 9, 1997.

6

 Final Staff Report, Control of Episodic Releases of VOCs from Pressure 

Relief Devices at Petroleum Refineries, December 9, 1997, page 11. 

7

 Kathy Wheeler, Shell – Telephone conversation with District staff, 

June 1, 2005. 

8

 Lisa Polos, ConocoPhillips – Telephone conversation with District staff, 

June 2, 2005. 

9

 Omega Engineering, Inc. – Telephone conversation with District staff, 

June 1, 2005. 

10 John Parker, Accutech Industrial Solutions – Presentation to District staff, 

June 21, 2005. 

11 Jacobs Engineering Group Inc., Pressure Valve Cost Study, prepared for 

Western States Pretroleum Ass’n, Concord, CA (July 1993).

12 Bureau of Labor Statistics: Consumer Price Index for the San FranciscoOakland-San Jose, CA Metropolitan Area: Series Id: CUURA422SA0, 

CUUSA422SA0. 

13 Solomon Associates: http://www.solomononline.com/. 

14 Turner Construction Company, Cost Index. 
Regulation 8, Rule 28 Staff Report 

November, 2005 

59

 15 Bob Ferraro, Regional Sales Manager, John Zink Company, Email, Subject: 

Order of Magnitude Cost Estimates for refinery relief systems; 

September 23, 2005. 

16 United States Environmental Protection Agency: “Air Pollution Control 

Technology Fact Sheet, Thermal Incineration, August 14, 2003; Document 

Number EPA-452/F-03-022. 

17 Mike DeLeon, Tesoro – Telephone conversation with District Staff, 

October 13, 2005. 

18 Cost Estimating Spreadsheet, Rex Kenyon & Associates (undated, provided 

Oct. 11, 2005). 

19 Atmospheric Relief Valve Cost Estimates, Shell Martinez Refinery (Rev. 5: 

February 2005) 

20 Mike DeLeon, Tesoro – Telephone conversation with District staff, 

May 26, 2005. 

21 Letter from Clark Hopper, Environmental Manager, Valero Refining Co., to 

Kelly Wee, Director Of Enforcement, BAAQMD, August 28, 2003, p. 3. 
SOCIOECONOMIC 

ANALYSIS 

PROPOSED RULE 

REGULATION 8, RULE 28: 

EPISODIC RELEASES FROM 

PRESSURE RELIEF DEVICES AT 

PETROLEUM REFINERIES AND 

CHEMICAL PLANTS 

November 2005 

Prepared for 

Bay Area Air Quality 

Management District 

Prepared by 

Applied Development Economics 

2029 University Avenue • Berkeley, California 94704 • (510) 548-5912 

1029 J Street, Suite 310 • Sacramento, California 95814 • (916) 441-0323 

www.adeusa.com 
CONTENTS 

1. Executive Summary.................................................................. 2

2. Description of Proposed Rule................................................ 4

3. Impact of Proposed Rule Amendments ............................... 7

3.1 Methodology................................................................... 7

3.2 Regional demographic Trends...................................... 8

3.3 Regional Economic Trends .......................................... 9

3.4 Description of Affected Industries............................ 11

3.5 Compliance Costs......................................................... 13

3.6 Business Response to Compliance Costs ................. 14

3.7 Impact Analysis ............................................................ 14

3.8 Impact on Small Businesses........................................ 15

TABLES 

Table 1: Population Growth: San Francisco Bay Area 9 

Table 2: Employment Profile of the San Francisco 

Bay Area, 1994 – 2004 11 

Table 3: Employment Trends: Industries Affected by 

Proposed Amendments, 2001 – 2004 12 

Table 4: Economic Characteristics of Impacted Oil 

 Refineries in the San Francisco Bay Area 12 

Table 5: Employment at Impacted Sites Relative to 

 the Bay Area as a Whole 13 

Table 6: Impact of Proposed Changes on Estimated 

 Profits at Bay Area Oil Refineries 15 
2 

1. EXECUTIVE SUMMARY 

INTRODUCTION 

This report describes the socioeconomic impacts of proposed 

amendments to Regulation 8, Rule 28 in order achieve and 

maintain state ambient air quality standards for ozone, and 

reduce episodic releases from atmospheric pressure relief 

devices in petroleum refineries. Following this summary, the 

report summarizes the proposed rule requirements and 

describes the methodology for the socioeconomic analysis. 

The report also describes the economic characteristics of sites 

affected by the proposed rule amendments along with the 

socioeconomic impacts of the proposed amendments. The 

proposed amendments will assist the BAAQMD in meeting 

its commitments to improving air quality in the region by 

improving the clarity and enforceability of Regulation 8, Rule 

28. 

SUMMARY 

The proposed rule affects Pressure Relief Devices (PRD) at 

the five oil refineries in the San Francisco Bay Area region. It 

is estimated that the refineries employ about 1,935 workers 

and provide a total payroll of $557 million per year. The 

refineries are estimated to generate sales of $9.8 billion per 

year and to realize net income of about 7 percent of sales, or 

$689 million per year. 

Compliance with the proposed rule amendments would 

require refineries to submit reports identifying all of their 

affected equipment and demonstrating that they have the 

capability to detect and record a Release Event from any of 

their PRDs. Compliance is expected to cost approximately 

$65,300 District-wide. 

The socioeconomic analysis evaluates the compliance costs in 

relation to the financial characteristics of the affected facilities 

to determine the significance of the economic impact of the 

proposed rule amendments. The compliance cost represents 

approximately 0.01 percent of profits for the affected 
3 

facilities, well below the 10 percent threshold of significance 

for such impacts. The analysis concludes that the affected 

refineries should be able to absorb these costs without 

significant economic dislocation or job losses. The analysis 

also addresses the issue of potential impacts to small 

businesses but concludes that the affected refineries do not 

meet the criteria to be considered small business operations. 
4 

2. DESCRIPTION OF PROPOSED RULE 

CURRENT STATUS OF THE RULE 

Regulation 8, Rule 28, which addresses episodic emissions of 

both organic and inorganic compounds from Pressure Relief 

Devices (PRD) located at petroleum refineries and chemical 

plants, was last amended in 1998. For petroleum refineries, 

the rule requires that facilities report to the District any 

releases over 10 pounds from a PRD and that certain 

substantive measures be taken to reduce the likelihood of 

releases. For chemical plants, the rule requires only release 

reporting (releases of 10 pounds or more). The existing rule 

requirements are summarized below: 

1) New and Modified Sources: PRDs at new and 

modified sources at petroleum refineries must 

vent to a fuel gas recovery system, furnace, or 

flare with a control efficiency of at least 98 

percent 

2) Existing Sources: Any PRD in organic 

compound service at an existing source at a 

petroleum refinery must implement specified 

prevention procedures to minimize releases.1

3) Releases from PRDs: Within 90 days of a 

reportable Release Event a facility must: 

a. Conduct a process hazard analysis including 

an evaluation of the cost effectiveness and 

technological feasibility of controls 

b. Implement prevention measures (to the extent 

they have not already been implemented) 

c. Conduct a failure analysis to discover the 

cause of the release and prevent recurrences 

 

1 The prevention measure procedures include: 1) establishing training, equipment, inspection, maintenance and 

monitoring requirements; and 2) implementing prevention measures such as process flow, temperature, level, 

and pressure indicators with interlocks; documented and verified routine inspection and maintenance 

programs; inherently safer design; and deluge systems. 
5 

All PRDs on the source that experienced the 

Release Event must be equipped with a telltale 

indicator and evaluated for control within 120 

days of the Release Event. All PRDs on any 

source that experiences two or more Release 

Events within five years must be vented to a 

control device. 

4) Reporting Requirements for Refineries and 

Chemical Plants: Following all Release Events: 

1) the Event must be reported by the next 

working day; 2) the associated PRDs must be 

inspected within five days; and, 3) a report must 

be submitted to the District within 30 days.2

The requirement to report this information 

implies that facilities must monitor PRDs to 

determine whether a Release Event has occurred 

and if so, the duration, cause, type and amount of 

material released. There is no explicit monitoring 

requirement in the rule, however. 

PROPOSED RULE AMENDMENTS 

In 2005, building upon the District’s 2002 audit of PRDs 

located at the five refineries located in the San Francisco Bay 

Area (Bay Area), District staff evaluated the rule and 

developed a set of recommendations to improve its 

effectiveness. Based upon those recommendations, staff is 

proposing the following amendments to the Rule: 

1. Require facilities to ensure that they have the capability to 

detect and quantify all release events, including small 

releases of 10 pounds (the reporting threshold), and 

require facilities to demonstrate this capability to the 

District; 

2. Require data recording and recordkeeping for venting and 

emissions verification; 

 

2 The report must include: 1) date, time, and duration of Release Event; 2) device that experienced the Event; 

3) District-assigned release number; 4) type and size of device; 5) type and amount of material released; 6) 

information used to estimate duration and amount released; 7) cause of release; 8) schedule prevention of reoccurrence action; and, 9) results of fugitive emission inspection. 
6 

3. Clearly define the equipment subject to the rule as the 

process unit to ensure that the original intent of the rule – 

to regulate all PRDs on an individual source (i.e., process 

unit) in the same manner – is clarified; 

4. Require facilities to report to the District their analysis of 

the root causes and potential corrective actions after each 

PRD release event; 

5. Make minor, non-substantive changes to the rule such as 

deleting obsolete references to “turnarounds,” moving 

requirements where appropriate, and clarifying various 

sections of the rule. 

EMISSIONS REDUCTIONS 

Since the 1998 amendments took effect, there have been 42 

Release Events reported by the five Bay Area refineries 

according to Release Event Reports submitted to the District. 

These 42 Release Events vented 125 tons of VOC emissions, 

according to the refineries’ calculations. The 125 tons of 

reported VOC emissions translates to average emissions of 

approximately 17.9 tons per year. 

Ensuring that facilities are using comprehensive monitoring 

systems will ensure that facilities are fully aware of release 

events, which will allow operators to better target their release 

prevention and mitigation efforts and will ensure that repeatrelease “bad actors” and identified and subjected to additional 

control requirements. These effects, in turn, are expected to 

lead to fewer release events and reduced emissions. 

US EPA has estimated from time to time in various 

rulemakings that enhanced monitoring can result in a ten to 

twenty percent emissions reduction. Here, staff believes that 

the proposal to add an explicit monitoring requirement 

should more appropriately to use a five percent emissions 

reduction factor, because many PRDs are already subject 

some form of monitoring and it appears that most releases – 

and especially the larger ones – are being detected. 

Using the 17.9 tons-per-year average emissions figures from 

the period 1998-2005, a 5% reduction would result in 

approximately 0.9 fewer tons of emissions per year. 
7 

3. IMPACT OF PROPOSED RULE AMENDMENTS 

This section of the socioeconomic analysis describes 

demographic and economic trends in the San Francisco Bay 

Area (Bay Area) region. Following an overview of the 

methodology for the socioeconomic analysis, the first part of 

this section compares the Bay Area against California and 

provides a context for understanding demographic and 

economic changes that have occurred within the Bay Area 

between 1994 and 2004. After an overview of Bay Area 

industries, we focus on SIC 2911, Petroleum Refining 

(NAICS 32411) and how the proposed changes to Rule 8-28 

concerning episodic releases from pressure relief devices 

(PRDs) would impact the refineries in the Bay Area. For the 

purposes of this report, the Bay Area region is defined as 

Alameda, Contra Costa, Marin, Napa, San Francisco, San 

Mateo, Santa Clara, Solano, and Sonoma Counties. 

3.1 METHODOLOGY 

The socioeconomic analysis of the proposed rule 

amendments concerning episodic releases of PRDs involves 

the use of information provided directly by BAAQMD, as 

well as secondary data used to describe the industries affected 

by the proposed rule amendments. 

Based on conversations with BAAQMD staff, ADE 

determined that the impacts would affect the oil refineries in 

the BAAQMD region: Chevron, Shell, Conoco Phillips, 

Valero, and Tesoro. 

With this information we began to prepare an economic 

description of the industry groups of which the affected sites 

are part, as well as to analyze data on the number of jobs, 

sales levels, the typical profit ratios and other economic 

indicators for Bay Area oil refineries. ADE also reviewed and 

summarized documents available to the public such as annual 

reports for publicly traded companies. 

With the annual reports and data from the US Economic 

Census, ADE was able to estimate revenues and profit ratios 

for many of the sites affected by the proposed PRD rule 
8 

amendments. In calculating aggregate revenues generated by 

Bay Area refineries, ADE first estimated an average revenue 

figure for a refinery based on revenues generated over the 

four-year period between 2000 and 2003. Using annual 

reports and publicly available data, ADE calculated ratios of 

profit per dollar of sales for the refineries. To estimate 

employment, ADE used employment data from Dun & 

Bradstreet. 

The result of the socioeconomic analysis shows what 

proportion of profit the compliance costs represent. Based 

on a given threshold of significance, ADE discusses in the 

report whether the affected sites are likely to reduce jobs as a 

means of recouping the cost of compliance or as a result of 

reducing business operations. To the extent that such job 

losses appear likely, the indirect multiplier effects of the job 

losses area estimated using a regional IMPLAN input-output 

model. 

3.2 REGIONAL DEMOGRAPHIC TRENDS 

The Bay Area experienced moderate population growth from 

1994 to 2004. Between 1994 and 1999, the nine-county 

region increased by 7 percent, from 6.2 million in 1994 to 6.6 

million in 1999. From 1994 to 2004, the population increase 

was from 6.2 million to 6.8 million for an increase of 11 

percent. At the same time, California had population growth 

of 14 percent. 

Within the Bay Area, the greatest percentage increase 

occurred in Contra Costa County. From 1994 to 2004 

Contra Costa increased its population by 18 percent. All 

other Bay Area counties had population increases equal to, or 

slower than, the State. The smallest percentage increase 

occurred in Marin and San Mateo Counties where population 

grew 5 percent from 1994 to 2004. Table 1 shows the 

population changes that have occurred in the Bay Area and 

California from 1994 to 2004. 
9 

TABLE 1 

Population Growth: San Francisco Bay Area

Population Percent Change

1994 1999 2004 94 – 99 99 – 04 94 – 04 

California 30,889,182 32,971,834 35,300,654 7% 7% 14% 

Bay Area 6,189,000 6,646,167 6,865,370 7% 3% 11% 

Alameda County 1,302,462 1,406,046 1,470,456 8% 5% 13% 

Contra Costa County 844,076 914,645 992,608 8% 9% 18% 

Marin County 228,718 236,955 239,209 4% 1% 5% 

Napa County 111,083 118,088 126,283 6% 7% 14% 

San Francisco County 729,024 771,122 772,985 6% 0% 6% 

San Mateo County 667,218 712,376 702,017 7% -1% 5% 

Santa Clara County 1,544,523 1,672,977 1,701,831 8% 2% 10% 

Solano County 356,652 377,601 399,826 6% 6% 12% 

Sonoma County 405,244 436,357 460,155 8% 5% 14% 

Source: Applied Development Economics, based on household population estimates from The California Department of Finance

3.3 REGIONAL ECONOMIC TRENDS 

The Bay Area is one of the world’s greatest regional 

economies. It benefits from pre-eminent knowledge-based 

industries, with competitive strength flowing from an 

unmatched culture of entrepreneurship, world-leading 

research institutions, and some of the nation’s best educated 

and most highly skilled workforce. With these remarkable 

advantages, it has led through innovation in a wide range of 

research and industrial fields. 

Many of the Bay Area’s most prominent industries are 

manufacturing related. Bay Area manufacturers are often 

high profile companies with world-renowned recognition. 

From small to large, Bay Area industry has been dynamic, 

creating wealth and jobs in both the export sector and local 

serving industries. 

The economic base is typically comprised of export industries 

within the manufacturing, minerals-resource extraction, and 

agricultural sectors. There are also the “local support 

industries” such as retail or service sectors, the progress of 

which is a function of the economic base and demographic 

changes, and more so the latter than the former. As 

population increases in a given area, demand for services – 
10 

such as realtors, teachers, healthcare – increases, as does 

demand for basic retail items like groceries, gas for 

commuting, or clothing at the local apparel shops. 

The industries affected by the proposed PRD rule 

amendments are a prominent part of the region’s economic 

base. Mainly engaged in export related business, the oil 

refineries are classified as manufacturers. In the Bay Area, 

manufacturing jobs have decreased over the last decade. In 

1994, manufacturing accounted for 14 percent of all Bay Area 

employment. By 2004, manufacturing declined 11 percent to 

account for 11 percent of all Bay Area employment. 

As of 2004, the professional and business services sector was 

the largest employer in the region, at 520,200 jobs or 16 

percent of all private and public sector jobs. This is a change 

from 1994 when professional and business services 

accounted for 15 percent of all Bay Area employment. 

During the same period, professional and business services 

increased 17 percent. The next largest industry in the Bay 

Area is public service, or government, with 460,300 jobs. In 

2004, government accounted for 14 percent of all Bay Area 

employment. From 1994 to 2004, government had one of 

the lowest growth rates of all industries at 4 percent. Two 

other industries came close to manufacturing in total 

employment. Retail trade and education & health care both 

made up 11 percent of total employment and had only a few 

hundred or few thousand jobs less than manufacturing. 

Unlike manufacturing, both retail trade and education & 

health care had significant job gains from 1994 to 2004. All 

other industries made up less than manufacturing in total 

employment in 2004. Table 2 shows Bay Area industry 

sectors and their trends from 1994 to 2004. 
11 

Table 2 

Employment Profile of the San Francisco Bay Area, 1994 - 2004 

Industry 1994 1999 2004 

% of Total 

Employment in 

2004 

Farm 25,800 28,600 21,300 1% 

Natural Resources & Mining 4,300 3,600 2,300 0% 

Construction 109,300 171,400 181,000 6% 

Manufacturing 405,400 459,400 359,700 11% 

Wholesale Trade 118,500 107,100 121,900 4% 

Retail Trade 300,200 339,000 337,900 11% 

Transportation & Warehousing & Utilities 115,500 124,700 102,900 3% 

Information 89,200 122,100 111,600 3% 

Financial Activities 193,300 197,400 209,800 7% 

Professional and Business Services 445,400 626,100 520,200 16% 

Education & Health Care 293,800 335,000 359,200 11% 

Leisure and Hospitality 250,000 289,500 304,400 10% 

Other Services 100,100 108,800 109,700 3% 

Government 444,500 449,800 460,300 14% 

Total 2,895,300 3,362,500 3,202,200 100% 

 

Source: Applied Development Economics from data supplied by the Labor Market Information Division of the 

California Employment Development Department 

3.4 DESCRIPTION OF AFFECTED 

INDUSTRIES 

The proposed PRD rule amendments affect industries in SIC 

2911, Oil Refining (NAICS 32411 – oil refineries). What 

follows is a description of this industry, along with economic 

trends for oil refineries in the Bay Area, and it provides a 

comparison between 2001 and 2004. Data in Table 3 are for 

all sources, not just the five major oil refineries in the Bay 

Area. As shown in Table 3, employment in oil refineries 

increased by 2 percent in the four years from 2001 to 2004. 

This is at the same time that Bay Area manufacturing jobs 

decreased 22 percent. In California, oil refineries declined 5 

percent during the same period and manufacturing jobs 

declined 14 percent. 
12 

Table 3 

Employment Trends: Industries Affected by Proposed Amendments, 2001 - 2004 

 2001 2002 2003 2004 

Change 

from 

2001 to 

2004 

% Change 

from 

2001 to 

2004 

San Francisco Bay Area 

Manufacturing 460,992 402,895 362,089 357,385 -103,607 -22% 

Petroleum refineries 7,086 7,271 7,248 7,196 110 2% 

California 

Manufacturing 1,780,544 1,633,958 1,532,287 1,536,787 -243,757 -14% 

Petroleum refineries 13,447 12,878 13,149 12,776 -671 -5% 

Source: Applied Development Economics from data supplied by the Labor Market Information Division of the California 

Employment Development Department 

Table 4 identifies the economic characteristics of the 

refineries affected by the proposed PRD rule amendments. 

This table shows that the refineries are estimated to employ 

1,935 workers. These sites have an estimated aggregate 

payroll of $172 million, and estimated revenues of $9.8 

billion. In calculating aggregate revenues generated by Bay 

Area refineries, the consultant estimated an average revenue 

figure per refinery based on revenues generated by that 

refinery in 2004 using annual reports. Then, the consultant 

summed the refineries’ estimated revenue to arrive at the 

aggregate amount of $9.8 billion. 

Table 4 

Economic Characteristics of Impacted Oil Refineries in the 

San Francisco Bay Area 

No. of Oil 

Refineries 

Estimated 

Sales 

Estimated 

Employment 

Estimated 

Payroll 

5 $9,837,599,000 1,935 $172,194,000 

Source: U.S. Economic Census 2002; California Employment Development 

Department Quarterly Census of Employment and Wages 

As Table 5 shows, the affected sources represent 27 percent 

of all employment within their respective industry in the Bay 

Area. Overall, there are an estimated 7,196 petroleum 

refining employees in the Bay Area. Of the 7,196 workers, 

1,935 work in the affected refineries, or 27 percent. In all of 

California, there were 12,776 workers in SIC 2911 (NAICS 
13 

32411), meaning that the affected Bay Area refineries equal 

15 percent of the state oil refinery workforce. 

Table 5 

Employment at Impacted Sites Relative to the Bay Area as a Whole 

No. of Oil 

Refineries 

Estimated 

Employment 

Affected Oil 

Refineries as a % 

of Bay Area Total 

Affected Oil 

Refineries as a % of 

California Total 

5 1,935 27% 15% 

Source: Calculations by Applied Development Economics 

3.5 COMPLIANCE COSTS 

The proposed rule amendments require that each affected 

refinery prepare and submit to the District a “Monitoring 

System Demonstration Report.” This report would provide 

information that would demonstrate that the refineries have 

adequate monitoring systems in place for all of their 

atmospheric PRDs subject to the rule. Section 8-28-407 is 

proposed to require facilities to submit a monitoring 

demonstration report that will enable staff to enforce the 

monitoring requirements. The report will require 

descriptions of the monitoring equipment, operating 

parameters and engineering calculations used to quantify 

emissions releases. District Staff have estimated that 

preparing the needed information for inclusion in the report 

for each PRD would take about two man-hours per PRD. 

(Most of this information if already available and must be 

utilized in the event of a release event and the subsequent 

report to the District.) The hour labor cost is estimated to be 

approximately $100 per hour. Because there are 324 PRDs in 

total at the five Bay Area refineries, the District estimates that 

the total one time cost of this provision to be about $64,800. 

The proposed amendments also require each affected refinery 

to provide a listing of each process unit equipped with 

atmospheric PRDs and the associated PRDs. This 

information is already generally available and would not 

require any additional man-hours to generate. Preparation of 

the report for submission should take no longer than an hour 

for each refinery. District Staff have therefore estimated the 
14 

cost associated with this provision to be approximately $100 

per refinery; this translates to $500 District-wide. 

District staff have also recognized that some facilities may 

have to install additional monitoring equipment to be able to 

demonstrate that they can detect releases as required by the 

rule, which could cost approximately $1,500 per PRD. The 

requirement to have such equipment is already an implied 

requirement of the existing rule, however. The current 

proposal simply makes the requirement explicit and 

establishes minimum standards for such equipment. As such, 

any costs facilities will incur for new equipment are not 

attributable to the proposed amendments. Moreover, District 

staff expect these costs to be relatively small, as few PRDs 

will need additional equipment. 

Therefore, the total one time compliance cost that would 

result from the proposed amendments would be 

approximately $65,300.

3.6 BUSINESS RESPONSE TO 

COMPLIANCE COSTS 

Sites impacted by the proposed PRD rule amendments may 

respond in a variety of ways when faced with new regulatory 

costs. These responses may range from simply absorbing the 

costs and accepting a lower rate of return to shutting down 

the business operation all together. Businesses may also seek 

to pass the costs on to their customers in the form of higher 

prices, although, in general, throughout the oil industry prices 

are set in global markets and individual producers or 

refineries are not in a position to affect prices. More likely, 

they may renew efforts to increase productivity and reduce 

costs elsewhere in their operation in order to recoup the 

regulatory costs and maintain profit levels. 

3.7 IMPACT ANALYSIS 

The businesses’ responses to increased compliance costs 

hinge on the effect of the costs on the profits generated at the 

affected sites. An impact on estimated profits greater than 10 

percent implies that the source would experience serious 

economic effects because of the compliance cost. When 
15 

compliance costs are greater than 10 percent of estimated 

profits, companies typically respond to the impact by laying 

off some workers, closing parts of manufacturing facilities or, 

in the most drastic case, possibly closing the manufacturing 

facility. 

Using the cost estimates developed for the proposed PRD 

rule amendments, ADE calculated the socioeconomic 

impacts of the proposed actions. In calculating impacts on 

profits, ADE used return on sales ratios identified by media 

reports and in annual reports of companies directly affected 

by the proposal. Based on this information, we estimate that 

the affected refineries generated a combined profit of $688 

million on $9.8 billion in revenues. 

Table 7 compares the estimated costs of the proposed PRD 

rule amendments and their impact on profits. Affected 

refineries will incur an initial cost of approximately $65,300. 

This cost represents an estimated 0.01 percent of profits for 

the oil refineries affected by the proposed PRD rule 

amendments. This cost impact is far below the 10% of 

profits above which facilities would experience serious 

economic effects. 

Table 6 

Impact of Proposed Changes on Estimated Profits at Bay Area Oil Refineries 

Impacted Refineries Estimated Profits Generated Cost of Compliance Cost as a % of profits 

5 $688,632,000 $65,300 0.01 

Source: Calculations by ADE, based on a 7 percent profit margin for oil refiners 

Furthermore, even if facilities had to incur costs for installing 

additional monitoring equipment of 5 times this cost, and 

these costs were considered to be required by the proposed 

amendments rather than required under the current rule, the 

cost of compliance would still be only 0.05 percent of profits. 

Even under this conservative assumption, the impact would 

still be far below the 10% significant impact threshold. 

3.8 IMPACT ON SMALL BUSINESSES 

In addition to analyzing the employment impacts the 

proposed PRD rule amendments, state legislation requires 
16 

that the socioeconomic analysis assess whether small 

businesses are disproportionately affected by air quality rules. 

For purposes of qualifying small businesses for bid 

preferences on state contracts and other benefits, the State of 

California defines small businesses in the following manner: 

 Must be independently owned and operated; 

 Cannot be dominant in its field of operation; 

 Must have its principal office located in California 

 Must have its owners (or officers in the case of a 

corporation) domiciled in California; and, 

 Together with its affiliates, be either: 

• A business with 100 or fewer employees, 

and an average gross receipts of $10 million 

or less over the previous tax years, or 

• A manufacturer with 100 or fewer 

employees 

The refineries that are affected by the proposed PRD rule 

amendments are not independently-owned and operated 

businesses. These refineries are owned by publicly-traded 

global corporations whose headquarters are generally outside 

of California. In addition, each of the refineries that are 

affected by the proposed PRD rule amendments employ, on 

average, 387 workers (and far more when affiliates are 

included), and their average revenue is approximately $1.9 

billion. Thus, by the standards established by the State of 

California, these sources are not small businesses. Based on 

this discussion, it is determined that the proposed PRD rule 

amendments do not disproportionately affect small 

businesses because the sources impacted by the proposed 

changes do not meet California’s definition of small business.