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ventura county

- Air Pollution Control Di s trict
June 23, 2 015

Air Pollution Co ntro l Board 800 South Victoria Avenue Ventura, CA 93009 669 County Squoro Drive Ventura, Colilornto 93003 tcl805/645 · 1400 lox 805/ 6<15 · 1444 www.vcopcd.org Michael Villegas Air Pollution Control OHicer

SUB JECT: PUBLIC HEARING TO CONSIDER APPROVAL OF PROPOS ED AMENDMENTS TO RULE 74.15.1, BOILERS, STEAM GENERATORS, AND PRO CESS I !EATERS , FROM l MILLION BTU/IIR UP TO 5 MILLION BTU/HR AND FINDING THAT ADOPTION OF PROPOSED RULE REVSIONS ARE CATEGOR ICALLY EXEMPT fROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) RECOMMENDED ACTIONS: I

. Fi nd that adoption of proposed amendments to Rule 74. 1 5.1 is categorica lly exempt from CEQA, and di rect the Air Pollution Co ntro l Officer or his designee to file a CEQA Not ice of Exemption (Attachment I) following approval of the proposed amendments. 2. Approve and adopt the proposed legislative findings for proposed amendments to Rule 74.15.1 (Attachment 2). 3. Approve and adopt the proposed amendments to Rule 74.15. 1 (Attachment 3). 4. Direct the C l erk of the Board to forward two certifi ed minute orders, and an affidavit of publication of the public hearing notice, for all of the forego ing proposed actions to the Ai r Pollution Con trol District within 20 days.

STATEMENT OF MATTER FOR BOARD CONSIDERATION: Dackground Ventura County is s ubject to the requirements of the California C lean Air Act (CCAA) specific to the county 's status as a nonattainment area for the state ozone ambient a ir quality standar ds. In particular, the CCAA requires local air districts to develop air quality plans that will achieve at l east a five p erce nt average annual ozone precursor emission reduction or, if that result is not ach i evable, that include every fea sib le emission control measure under the air di strict's purview and an exped it i ous adoption schedule (llealth & Safety Code §40914). The proposed rule change will add another feasible meas ure that will be part of the Di s trict' s attainment strategy to reduce districtwide air emissions pursuant to llealth and Safety Co de section 40914. The proposed ru l eAir Pollution Control Board June 23, 20 1 5 Page2 amendments will reduce oxides of nitrogen (NOx) emissions from the combustion of fuel in boilers, steam generators, and process heaters. During the processing of a 20 12 revision to District Rule 74 .1 5.1, the Air Resources Board (ARB) strongly recommended that the District adopt NOx emission limits based on the South Coast Air Q uality Management District (SCAQMD) Ru l e 1146.1, whic h , 

### if adopted by the District, would have required that indu stry and government facilities retrofit at least 27 existing boilers, steam generators, and process heaters with ultra-low NOx emission control equipment. Statf determined at that time that these retrofits would not have been cost-effective, s inc e the costs ranged from $ 1 2 to $1,887 per pound of NOx reduced. In stead, staff proposed a new NOx limit of 20 ppm for new (but not existing) boilers, steam generators, and process heaters between 1 and 2 million BTU/hr based on SCAQMD Rule 1146.2, and staff committed to reevaluating District Rule 74.15.1 after 2 01 4. This proposal is the result of that reevaluation. Proposed Rule Amendments NOx emission reductions will result from proposed new NOx emiss ion limits for new or replacement (but not ex ist ing) boilers, steam generators, and process heaters in the size range from 2 million up to 

### 5 million BTU/hr depending on the type of gaseous fuel and whether or not the combustion chamber is atmospheric or pressurized, as follows: CATEGORY Units fired on Natural Gas

- Atmosp heri c Units fired on Natural Gas- Pressurized Units tired on Landt111 Gas Un its fired on Biogas Units fired on Liquefied Petroleum Gas Units fired on Produced Oilfield Gas- Atmospheric Units tired on Produced Oi lfi eld Gas- Press urized 

### NOx Limits (3%0z} 12 ppm 9ppm 25 ppm 1 5 ppm 2 0ppm 15 ppm 12 

### ppm The proposed rule amendments make three important changes to Rule 74.15. 1's applicability in order to align the ru le with other District rules applicable to small boilers, steam generators, and process heaters. With the amendments, Rule 74.15.1 w ill: l. Apply to gaseous fue ls in addition to natural gas including landtill gas, biogas, liquefied petroleum gas (LPG) or propane, and produced oi lfield gas (as shown in the tabl e above). 2. Apply to both stat ionary and portable process heaters. 3. Contain a clarified definition of"process heater" which excludes combustion sources not regulated by SCAQMD Rule 1146.1 including kilns, open heated tanks, dehydrators, dryers, crematories, incinerators, calciners, cookers, roasters, furnaces, and emission control combustion devices such as atlcrburners, vapor incinerators, and thermal or catalytic oxidizers.Air Pollution Control Board June 2 3 , 2 015 Page 3 Proposed Rule Exemption Staff is proposing an exemption for a single existing source with two portable process heaters that otherwise would have been subject to the NOx limit of30 ppm for existing units based on the proposed changes to Rule 74 .1 5.1 ' s applicability. This exemption for existing portable oil well dewaxing process heaters having an annual heat input of less than 2.8 billion BTU per year is being proposed because the cost-effectiveness for retrofitting with low-NOx burners for these units exceeds $9.50 per pound ofNOx reduced, which is not considered a reasonable cost at this time. The amount ofNOx reductions not captured by the inclusion of this exemption for this source is 0.29 tons NOx per year. Proposed Reduction in Compliance Costs The 2012 rule revision included a new provis ion to reduce comp li ance costs by substituting biennial source testing with annual emiss ion screening analysis for equipment rated from 1 million BTU/hr to 2 mi lli on BTU/hr and source testing every four yea r s. To furt her reduce compliance costs, staff is proposing a sim il ar testing frequency for new or replaced units having a rated heat input capaci ty greater than 2 million BTU/hr and less than 5 million BTU/hr. Th is would reduce compliance costs for these new or replaced units by reducing the source testing frequency from biennial to every four years. Existing annual screeni ng requirements for these un its would continue to provide a l ess expensive compliance alternative. Expected Emission Reductions and Cost Analys i s T he proposed amendments to R ule 74.15.1 will reduce NOx emissions in Ventura County by approximately 9
. 3 tons per year as uni ts are replaced. The cost-effectiveness for new or replaced equipment is estimated at $2.3 0 per pound of NOx reduced based on the installation of ultra-low NOx burners, where the use of a Flue Gas Recircu lation system is not needed to comply with the new limits. The staff report (Attachment 4) contains a more comprehensive analysis ofemission and socioeconomic im pacts. Comments A public consultation meeting/rule workshop was held on February 12, 2015. The meeting was attended by Susan Perez ofAlta Environmental (consultant for portable asphalt plants), Marianne Strange (consultant for Western States Petroleum Associates

- WSPA), City of Ventura Water Department and Miura American Company (boiler vendor). No comments were received from ARB. Staff received comments from the U.S. Environmental Protection Agency (EPA) Region IX and WSP

### A The proposal wa s amended to inc lude all suggestions from both entities

. EPA comments were based on a comparison with the SIP

- approved SCAQMD Rule 1146.1 , which includes NOx limits for both landfill gas and biogas. WSPA requested new NOx limits for new or replaced units fueled by produced oi lfield gas as shown in the table on Pag e 2 above. WSPA a lso requested reducing the frequency of source testing for new or replaced units in the size range from 2 to 

### 5 million BTU/ hr. Staff is proposing to reduce the frequency of source te s ting these units from every two years to every four years since annual NOx emissionAir Pollution Control Board June 23.201 5 Pa ge 4 screening s will still be required. As stated earlier, this provi s ion will reduce the costs of compliance for these newer un its. On April28 , 2 015 , the Advisory Committee recommended adopt ion ofthc proposed amendme nts to Rule 74
. 15.1 by a unanimou s vote (Attachment 5

- Vot ing Record). PROPO S ED FIND INGS: I lealth and Safety Code sections 40703, 40727, 40727.2, 40728.5 and 40920.6(a) direct that, prior to adopting amendments to an air quality mle or regulation such as Ru le 74.15.1, your Board adopt findings of necessity, authority, clari ty, consistency, non-duplication, reference, cost-effectiveness, incremental cost-eftectiveness, and socioeconom ic impacts, based upon relevant information presented at the hearing. Health and Safety Code section 40727.2 requires a written ana lysis, comparison, and consideration of existing air pollution regulations that apply to the same type of source (Attachment 4). Therefore, if your Board approves the proposed amendments to Rule 74.15.1, then your Board must also adopt the proposed findings that address thes e statutory requirements. The proposed amendments to Rule 74. 1 5 .1 have been determined by Dis t rict staff to be within the scope of the categorical exemptions from CEQA under State CEQA Guideline sections 1 5307 (actions by regu latory agencies for protection of natura l resources) and 15308 (actions by regulatory agenc ies for protection of the environment). The Not ice ofExemption regarding this exemption determination is included as Attachment 1 and wi ll be filed with the Ventura County Clerk ' s Office upon your Board's approval ofthe amended ru le. This proposal has been reviewed by County Counsel. If you have any questions, please contact Mike V illegas at 645-1440 or Stan Cowen at 645-1408.



# i~ **v, It-**  Air Po ll ution Control Officer Attachment s : 1. Proposed Notice of CEQA Exemption 2
. Proposed Legislative Findings 3
. Propo sed Amendments to Rule 74.15.1 4. Fina l StaffReport 5
. Advisory C ommitt ee Voting Record