United States Environmental Protection Agency, Region 9

Air Division

Technical Support Document

for

EPA’s Notice of Proposed Rulemaking

for the

California State Implementation Plan

San Joaquin Valley Unified Air Pollution Control District’s

R ule 43 20

, Advance d Emission Reduction Options for Boiler s , Steam Generators and Process

Heaters G reater than 5.0 MMbtu/hr

Prepared by: Idalia Perez

August 19

, 20 10San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD)

Submitted Rule

SJVUAPCD Rule 43 20

, Advance d Emission Reduction Options for Boilers, Steam Generators

and Process Heaters G reater than 5.0 MMbtu/hr

 Adopted: October 16, 2008

 Submitted: March 17, 2009

 Determined complete : April 20, 2009

Previous Rule Submittals

Ther e are no outstanding submittals of Rule 4 32 0

.

SIP

- Approved Rule

There is no SIP

- a pproved version of Rule 4320.

Rule Summar y Rule 4320 limits NOx, SO2, PM10 and CO emissions from boilers, steam generators and process heaters with a total rated heat input greater than 5 MMBtu/hour.

Rule 4320 provides three options for compliance:

1. Comply with the NOx emission limits and PM control measures specified in the Rule; or

2. Pay an annual NOx emissions fee to the District and comply with PM control measures;

or 3. Com ply with the low

- use requirements.

The NOx l imits in the Rule are as follow: (Std = standard schedule; Enh = enhanced schedule;

S E S I L = Staged Enhanced Schedule, I nitial L imit; SESFL = Staged Enhanced Schedule Final Limit)
Category NOx Limit Compliance

De adline
A. Units with a total rated heat input > 5.0 MMBtu/hr to < 20.0 MMBtu/hr, except for Categories C through G units STD

- 9 ppmv or

0.011 lb/MMBtu

ENH

- 6 ppmv or

0.007 lb/MMBtu STD

– 07/01/2012

ENH

– 01/01/2014

B. Units with a total rated heat input > 20.0 MMBtu/hr, except for Categories C through G units STD

- 7 ppmv or

0.008 lb/MMBtu

ENH

- 5 ppmv or

0.0062 lb/MMBtu STD

– 07/01/2010

ENH

– 01/01/2014

C. Oilfield Steam Generators
C.1. Units with a total rated heat input > 5.0 MMBtu/hr to

<20.0 MMBtu/hr STD

- 9 ppmv or

0.011 lb/MMBtu

ENH

- 6 ppmv or

0.007 lb/MMBtu STD

– 07/01/2012

ENH

– 01/01/2014

C.2. Units with a total rated heat input >20.0 MMBtu/hr STD

- 7 ppmv or

0.008 lb/MMBtu STD

– 07/01/2010SESIL

- 9 ppmv or 0.011 lb/MMBtu;

SESFL

- 5 ppmv or

0.0062 lb/MMBtu SESIL

– 07/01/2012

SESFL

– 01/01/2014

C.3. Units firing on less than 50%, by volume, PUC quality gas SESIL

- 12 ppmv or

0.014 lb/MMBtu

SESFL

- 9 ppmv or

0.011 lb/MMBtu SESIL

– 07/01/2011

SESFL

– 01/01/2014

D. R efinery units
D.1. Units with a total rated heat input > 5.0 MMBtu/hr

to < 20.0 MMBtu/hr STD

- 9 ppmv or

0.011 lb/MMBtu

ENH

- 6 ppmv or

0.007 lb/MMBtu STD

– 07/01/2012

ENH

– 01/01/2014

D.2. Units with a total rated heat input >20.0 MMBtu/hr

to < 11 0.0 MMBtu/hr STD

- 6 ppmv or

0.007 lb/MMBtu

SESIL

- 9 ppmv or

0.011 lb/MMBtu

SESFL

- 5 ppmv or

0.0062 lb/MMBtu STD

– 07/01/2011

SESIL

– 07/01/2012

SESFL

– 01/01/2014

D.3. Units with a total rated heat input > 110.0

MMBtu/hr STD

- 5 ppmv or

0.0062 lb/MMBtu STD

– 06/01/2007

D.4. Units firing on less than 50%, by volume, PUC quality gas. SESIL

- 12 ppmv or

0.014 lb/MMBtu

SESFL

- 9 ppmv or

0.011 lb/MMBtu SESIL

– 07/01/2011

SESFL

- 01/01/2014

E. Units, from any Category, that were installed pri or to
1/ 1 /20 09 and limited by a Permit to Operate to an annual heat input >1.8 billion Btu/year but < 30 billion Btu/year. STD

- 9 ppmv or

0.011 lb/MMBtu STD

– At the next

unit replacement but

no later than

01/01/2014

F. Units at a wastewater treatment f acility firing on less than 50%, by volume, PUC quality gas. SESIL

- 12 ppmv or

0.014 lb/MMBtu

SESFL

- 9 ppmv or

0.011 lb/MMBtu SESIL

– 07/01/2011

SESFL

– 01/01/2014

G. Units operated by a small producer in which the rated heat input of each burner is < 5 MMBtu/hr but the total rated heat input of all the burners in a unit is rated between 5 and 20 MMBtu/hr, as specified in the Permit to Operate, and in which the products of combustion do not come in contact with the products of combustion of any other burner. STD

- 9 ppmv or

0.011 lb/MMBtu STD

– At the next

unit replacement but

no later than

01/01/2014The emission fee is the sum of an administrative fee and a fee based on the amount of emissions

of the unit:

T otal Fee = Admin Fee + ( Total Emissio n of unit/year) ( Fee Rate )

By January 1, 2010, operators must decide if they will comply with Rule 4320 by paying a fee or by complying with the NOx emission limits. The fee shall be paid by July 1 of each year for the previous year’s emissions. Operator s of units for which an annual fee is paid must also meet

RACT.

Before January 1, 2014, a unit designated to comply with the NOx emission limits of the Staged

Enhanced Schedule ca n be redesignate d to comply with the Rule by paying an emission fee if : 1. T he unit meets the Initial NOx Limit (SESIL in Table above) ; 2. E mission fees are paid at time of the application for redesignation, for all past emissions from the unit since January 1, 2009 through the calendar year prior to the calculation date; and

3. T he tota l annual fee is paid from that date forward.

The PM control requirements include : 1. Fire exclusively on gas; or

2. Fire fuel with less than 5 grain of sulfur per 100 standard cubic feet; or

3. Use emission control systems to reduce SO2 emissions by 95% or emit 9 ppm or less;

and

4. Refinery units must be in compliance by Jul y 1, 2013.

Low

- use unit requirements apply to units with a heat input of 1.8 b illion Btu/year or less.

The Rule also includes start

- up/shutdown provisions (Section 5.6), monitoring provisions ( Section 5.7), requirements to demonstrate compliance (Section 5.8), recordkeeping requirements (Section 6.1), a list of test methods (Section 6.2), testing requirements (Section 6.3) , requirements for an emission control plan, a compliance schedule (Sectio n 7.0) and calculation requirements (Section 8.0)

.

Effects on Emissions

NOx Reductions

The District projects emission reductions for the two NOx compliance deadlines. T he first

estimates an emission reduction of 3.3 tons of NOx/day for compliance with th e standard limits

. This is a reduction of 46.5% from the calculated baseline of 7.1 tons of NOx/day. The 2007

Ozone Plan had a 2011 baseline of 4.6 tons of NOx / day with a commitment to reduce emissions by 0.71 tons NOx/day or 15%. The District normalized the 46.5% reduction to the baseline in the ozone plan (4.6 tons/ day ) and calculated a normalized emission reduction of 2.1 tons per day.

This projection satisf

ies the 2007 Ozone Plan commitment of 0.71 tons NOx/Day. The District

also estimates an emissio n reduction of 3.9 tons NOx/day for the applicable enhanced limits

. This would represent the maximum reductions which would be expected from Rule 4320 implementation.SO2 Reductions

SJVUAPCD states that the majority of units would comply with Options 1 an d 2 and expect s n o additional reductions from these units. District staff identified some units that may need to install and operate an emission control system reducing SO2 emissions by at least 95% to comply with Option 3

. Th ey estimate that this would re sult in emission reductions of 5.4 tons of SO2/day.

Criteria for Rule Evaluation Generally, SIP rules must be enforceable (see section 110(a) of the Clean Air Act, hereafter CAA); must require Reasonably Available Control Technology (RACT) for major sourc es in nonattainment areas (see CAA section 182(a)(2)(A)); must not interfere with applicable requirements, including requirements concerning attainment (see CAA section 110(l)); and must not relax existing requirements in effect prior to enactment of the 1 990 CAA amendments (see section 193). In addition, SIP rules must implement Reasonably Available Control Measures (RACM) for PM2.5 nonattainment areas (see CAA section 1 72 ( c )(1) )

.

The SJVUAPCD regulates a severe ozone nonattainment area (40 CFR 81) and a PM2.5 nonattainment area, thus, submitted Rule 4 3 20 must fulfill RACT and RACM requirements.

Guidance and policy documents that we used to define specific enforceability and RACT requirements include the following:

Issues Relating to VOC Regulation, Cutpoints, Deficiencies, and Deviations (the "Blue Book"), US EPA, OAQPS (May 25, 1988). Guidance Document for Correcting Common VOC and Other Rule Deficiencies , EPA Region IX (August 21, 2001, the “ Little Bluebook ” ). State Implementation Plans; General Pr eamble for the Implementation of Title I of the Clean Air Act Amendments of 1990, 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992). Clean Air Fine Particle Implementation Rule; Final Rule , 72 FR 20586 (April 25, 2007) Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters , CARB (July 18, 1991)

. http://w ww.arb.ca.gov/ractbarc/boilers.pdf Alternative Control Techniques Document

-- NOx Emissions from Industrial/Commercial/Institutional (ICI) Boilers

, US EPA 45 3 /R

- 9 4

- 0 22 (March 1994). http://nep is.epa.gov/EPA/html/Pubs/pubtitleOAR.htm Alternative Control Techniques Document

-- NOx Emissions from Utility Boilers , US

EPA 452/R

- 93

- 008 (March 1994). http://nepis.epa.gov/EPA/html/Pubs/pub titleOAR.htm Control Techniques for Sulfur Oxide Emissions from Stationary Sources , US EPA 450/3

- 81

- 004 (April 1981). http://nepis.epa.gov/EPA/html/Pubs/pubtitleOAR.htm

Because Rule 43 20 inc ludes a fee provision in Section 5, EPA considers this rule an economic incentive program subject to EPA’s guidance

, “ Improving Air Quality with Economic Incentive Programs ,” US EPA, 452/R

- 01

- 001 (January 2001) http://www.epa.gov/ttncaaa1/t1/memoranda/eipfin.pdf

Rule EvaluationEnforceability, SIP Relaxation

, RACT and RACM

R ecordkeeping and other compliance provisions in the rule ensure that the requirements are adequately enforceable. Sin ce this rule has not been previously incorporated in the SIP and it does not supersede an existing SIP

- approved rule, t he submitted rule does not relax the SIP and complies with CAA §110(l) and §193.

At a minimum, the District must ensure that RACT will be implemented for appropriate sources subject to Rule 4320. Section 5.3.3 states: “Operators of units for which an annual fee is provided must also certify that the units meet federal RACT control measures at the time the annual fee is provided.” This provision alone is not sufficient to ensure that RACT will be implemented. However, Rule 4306, adopted October 16, 2008, implements RACT for this

source category . EPA approved Rule 4306 on January 13, 2010 (75 FR 1715). Because sources have a separate obligation to comply with Rule 4306 (which does not allow payment of fees in lieu of compliance), the necessary regulatory framework is in place to ensure that RACT will be implemented for this source category. If, in the future, the District intends to r ely on Rule 4320 to implement RACT, the District would need to modify Rule 4320 to delete the provision which allows sources to pay fees in lieu of compliance or otherwise ensure RACT implementation.

There is no specific guidance on what constitutes RACM for PM2.5 for this source category. According to an EPA report (US EPA 450/3

- 81

- 004), the most straightforward way to reduce SOx emissions, a PM2.5 precursor, is to burn fuels with low sulfur content. Rule 4320 requirement that units burn gas or low sulf ur fuel addresses this approach to reducing SOx emissions. For units burning fuel with higher sulfur content, Rule 4320 requires add

- on controls to minimize SOx emissions. The combination of these two approaches (fuel switching or add

- on controls) is app ropriate to fulfill CAA RACM requirements regarding SOx

. RACM requirements for NOx, another PM2.5 precursor are also fulfilled by Rule 4306, as discussed above regarding

RACT.

Emission Reductions Beyond RACT

The amount of emission reductions projected for Rule 4320 assumes complian ce with the

emission limit s in section 5.2.3

, al though sources may p ay fees in stead of directly meeting these

limits

. SJVUAPCD’s staff report explains that the District will use t hese fees to purchase

emission reduction s more co st effective ly than direct compliance with section 5.2.3, and thus will actually achieve more emission reductions if sources elect to pay fees

.

However, to ensure that all emission reductions purchased by the District are adequately surplus, quantifiabl e, enforceable, permanent and otherwise consistent with EPA’s EIP guidance , this component of the program must be fully described and included in a SIP submittal. T he existing

submittal of Rule 4320 does not include all necessary details on how creditable emission

reductions will be achieved. We list below the minimum elements and supporting documentation needed, along with some suggestions on how this information may be provided:

T he submittal should describe and provide supporting documentation on:

Ho w public input is /will be provided for in the development and implementation of the

program.The protocols and quantification methodology and procedures used to calculate emission

reductions. The submittal may rely on and refer to relevant Moyer Program G uidelines

or emissions quantification protocols that have been adopted by the SJVUAPCD Governing Board after a public process.

C riteria, policies and procedures to ensure that the reductions are surplus

. 1

The potential source categories generating the em ission reductions and the demonstration that the reductions are surplus. The process to ensure that protocols are revised as appropriate to reflect new emission standards and emission factors, and that emission reductions thus continue to be surplus.

A re al

- time, transparent and publicly available system for t racking and evaluating program implementation . The purposes of the tracking system are at least the following:

1. To help ensure that the program achieves actual emission reductions

. 2. To allow the Distri ct to compare actual reductions with projected emission reductions in the SIP in order to address any emission reduction shortfall expeditiously.

3. To collect information for the District’s retrospective evaluation of program implementation. 2 See EIP Guidan ce Section 5.3(b).

4. To maximize transparency regarding use of public funds.

5. To increase opportunities for technology transfer.

Real time information available through the tracking system should include 3 : 1. Grant/ Project Level

 Name of grantee

 Funding per grant per year

 Activity and sources 4 that generate emission reductions , and the projected emission reductions by source

 Actual reductions for the source and actual reductions for the project

.

 The emission reduction calculation for each source, including

information / assumptions on baseline emissions.

 Start date of project and duration the reductions will be claimed for credit

2. Funding Source / Rule Level

 Amount of funds collected or provided from the funding source /rule

 Amoun t of f

unds spent

 Actual emission reductions achieved

 T he SIP commitment, by year, on projected emission reductions

1 EPA’s guidance, “Improving Air Quality with Economic Incentive Programs” (EIP Guidance) defines surplus in sections 4.1(a) and 4.1(b). The EIP Guidanc e is available at: http://www.epa.gov/ttn/oarpg/t1/memoranda/eipfin.pdf

2 Prohibitory rules that include fee provisions are economic incentive programs subject to the EIP Guidance. As

s uch, implementation of each rule should be evaluated. For example, the program evaluation should include evaluation of the District’s original purpose for the fee provision, how the fee provision affected compliance within the source category, whether the fee provision had the desired effect, whether the fee rate was appropriate to accomplish the District’s objectives, and whether there are any recommendations to improve the program.

3 “Funding source/rule level” means for example the Carl Moyer Progra m, Rule 9510, Rule 4320, and other prohibitory rules which allow sources to pay fees in lieu of compliance with the emissions requirement.

4 If the activity was changing heavy

- duty diesel engines, the “source” is a specific engine. Comparison of projected with actual emission reductions 5

3. Overall Incentive Program Summary Level

 Amount of available funds

 Funds spent each year

 Actual emission reductio ns achieved annually

 The SIP commitment, by year, on projected emission reductions

 Comparison of projected with actual emission reductions

T he audit and enforcement program that ensures implementation of grantees’ contractual obligations

. A nnual reporti ng to EPA (where the public had the opportunity to review and comment on the draft report) which includes:

o amount of funds spent for each funding source,

o amount of emission reduc tions achieved versus projected for each funding source (see footnote 5)

,

o disc ussion of any quantification or surplus issues that arose during the year and how the issues were resolved,

o description and timing of measures to address any shortfalls in emission reductions, and

o summary of inspections, audits, non

- compliance findings, en forcement actions, and resultant penalties and remedies.

We understand that SJVUAPCD intends to document the amount of reductions from sources that already compl y with the emission limits

. This is possible because Rule 4320 provides a deadline

which has passed for sources to notify the District of their intent to pay fees in lieu of complying

with the limits. To the extent that SJVUAPCD provide s documentation of sources meeting the emission limits, it is appropriate to credit Rule 4320 with emission reduc tions separate from the fee component discussed above.

Suggested Rule Improvements EPA recommends that the SJVUAPCD make the following improvements in the next revision of

Rule 43 2 0:

1. The term nor

mal operations in Section 5. 8

. 2 should be cl ear ly define d in the Rule or the Rule should state that it must be defined in the permit to operate.

2. Ensure compliance with all provisions of EPA’s EIP Guidance in order to fully credit

emission reductions for this rule as discussed in the Rule Evaluation section abov e. 3. After January 1, 2011, take into consideration the condensable fraction of direct PM2.5 emissions per EPA's Fine Particulate Rule, 40 CFR part 51, subpart Z (see 51.1002(c)).

Recommendation Rule 4320 is enforceable, strengthens the SIP and is consiste nt with RACT and RAC M requirements. Therefore, EPA staff recommend s approval of SJVUAPCD submitted R ule 4320

5 The District may cho ose to compare projected emission reductions with actual emission reductions at the Overall Incentive Program Summary Level instead of the Funding Source or Rule Level.for incorporation into the California Applicable SIP

. However, it is not appropriate to fully

credit emission reductions for this rule without ad ditional submitted materials described above.

Attachments

1. Submitted Rule 43 20

2. SJVAPCD Staff Report