# ENCLOSURE4

September20,2010publicationin theNewJerseyRegisterofthe adoptionofamendmentsto N.J.A.C.7:27-9andthe responseto the public'scomments

Nell'.Jcrsev II'an Equal Opportunitl' Emplovcl',Printedon I<ecl'cled Pap{'/'andReevclaille

### ENVIfW!I\MEJ\TAL PROTECTIOl\'



### E-mai!: records.cuslOdiaIN;;.dep.state.nj.us Website: W'\",>\

### .state.nj.us/deplOpra (cllnformation concerning the types ofpermits required for a proiect. timing of permit review. and instructions for completing permit applications may be obtained from the individual program authorized to issuethe type ofpennarequired. ifknown. or: Depanment ofEnvironmental Protection Office ofPermit Coordination and Environmental Review 40I East State Street PO Box**40~** 

### Trenton. NJ**OR6~5-0402** 

### (d I

### The Depanment publishes the DEP Bulletin. which is a semimonthly puhlication listing the construction permit applications recently filed oracted uponhy the Depanment. Usingthe DEP Bulletin. interested persons can determine the status of Coastal Area Facility Review Act (CAFRA) permits. Federal consistency activitv permits. freshwater wetlands individual and general permits. open water fill pern1its. NJPDES permits. solid waste facility permits. flood hazard area control (stream encroachment) permits. tidal wetlands permits. treatment works approvals. and waterfront development permits. The DEP Bulletin also includes a calendar of events ofinterest. a schedule of public hearings I.

### which. however. does not constitute an official notice ofa hearing). and

alistofEnvironmental ImpactStatements acted upon. \. The DEP Bulletin is available on the Department's website at www.nj.gov/dep/bulletin.**~.** 

### Publication In

### the DEP Bulletinconstitutes constructive notice to all interested persons ofDepanmentactions on construction permits.

lei Subpoenas for the production of Department records and/or testimony from Depanment employees must be served upon the Depal1ment at the following address: DepartmentofEnvironmental Protection Office ofLegal Affairs 401 East State Street. Fourth Floor PO Box 402 Trenton, NJ 08625-0402

':1-1.5 Effect ofdelegation ofauthority

la) No provision ofTitle 7ofthe New Jersey Administrative Code or ofany other rules ofthe Depanment which delegates any power. duty or authonty oftht: Department orthe Commissionerto any delegee shall be construed to limit the power or authority ofthe Commissioner over the delegated subiectmatter. Without limitingthe generalityofthe foregoing. the Commissionermay take any action for which responsibility has been delegated to 

### a delegee. with the same force and effect as if such rt:sponsibility had not been delegated. Such actions include, without limitation. the grant or denial ofan application forapermit:revocation of

a 

### permit:

### acti~n on any other application to the Depanment: or the issuance or an administrative order, administrative consent order. directive. notice ofviolation. orpenalty assessment.

Ib) The election to 

### exercise any delegated power. duty or authority shall be solelv within the discretion ofthe Commissioner.

(CI 

### No

### pr~vision of this section shall be construed as affecting any substantive or procedural provisions of Title 7 of the New Jersey Administrative Code or ofany other rules ofthe Department except to the extentthat any such provision delegates any power. duty. or authority ofthe Department or the CommiSSIOner to any delegee. No proviSion of thiS

### secti~n shall be construed as affecting the right ofany person to an administrative' hearing under N.LS.A.**5~:14B-l0.** 

### or adminisuative review under NJ.S.A.**5~:14B-I~.** 

### AIHWTIONS 

# (a)

CLIMATE AND ENVIRONMENTAL MANAGEMENT AIR QUALITY MANAGEMENT Sulfur in Fuels Adopted Amendments: 

## N.J.A.C. 7:27-9.2 Adopted Repeal: 

## N.J.A.C. 7:27-9.5 Proposed: November 16. 2009 at

### 41 N.J

### .R. 41 56(a \ Adopted: August26,20I

### 0by Bob Martin. Comnmsioner. DepartmentofEnvironmental Protection. Filed: August26. 2010 as R.2010 d.203. with technical changesnot requiring additional public notice and comment(see N.J.A.C. 1:30-6.3). Authority: N.J.S.A. !3:1B-3(e), 13:10-9and 26:2C-l 

### etseq. DEI' DocketNumber: 14-09-10/676. Effective Date: September 20. 20

### IO. OperativeDate: October 25, 2010. Expiration Date: Exempt. The DepanmentofEnvironmental Protection (Depanment) is adopting amendments to NJ.A.C. 7:27-9, Sulfur in Fuels. to reduce the sulfur content of fuel oils throughout the State. The Depal1ment is also repealing an outdated and unused section ofthe rules (N.J.A.C. 

### 7:27-9.5l. 

### Therulemaking is arevision to the State Implementation Plan (SIP). The Department is adoptingthe amendments. which apply to

### all liquid fuel oil sold. used. stored. or offered for sale in the State, in orderto reduce the amount of sulfur oxides, particulate matter. nitrogen oxides. and other pollutantsreleased intothe ambientair from the combustionoffuel oil. This rulemaking is a part of the Department's Statewide efforts to 

### reduce secondary aerosol formation. acid rain. fine pal1lculate matter.

ozone. and regional haze. Since the publication of the proposal in the New Jersey Register on November ]6. 

### 2009, three studies concerning suifur in fuel oils werereleased thatare relevant to this rulemabng. First. the harmful nature offuel burning to air pollutant levels was illustrated by a study by the New York City Depanment of Health. (The New York City Community Air Survey, Results from Winter Monitoring 2008-2009, New York City Department of Health and Mental Hygiene, December 

### IS.**~009.** 

### Ihttp://www.nvc.gov/html/doh/ html/eode/nvccas.shtml) ("NY Study") In this study. 

### it was found thal fuel burning for space heating in New York City signifIcantly contributed to paniculate levels in the ambient air. Sampling revealed wide variations in wintertime air quality across New York City. with the highest levels ofpollution occurring in areas with heavier traffIC and a greater concentration of oil-burning boilers in commercial and residential buildings. Specifically, concentrations of fine particulate matter "weregreaterin areas where there were more largeunits burning fuel oil in buildings (includingthe most polluting lypes ofoil known as 'residual oiL' or#4 or

### #6 oil), more total traffic and moretruck traffic'-' (NY Study. page 8) 

### The report also noted that "Higher**SO~** 

### concentrations were observed in areas WIth more nearhy buildings WIth units burning#4 or#6 heating oil and in higher population areas" (NY Study. page 8) 

### The study concluded that "shifting use away from more polluting fuels, especially #6 and #4 oil, toward cleaner burning fuels. may help to reduce air pollution in neighborhoods with many large burnings and combustion boilers." (NY Study. page 35) Although New Jersey does not have the magnitude ofemissions from No.4 and No.6 fuel burning for space heating, the New York Study indicates that like New York. New Jersey's air quality can be expected to 

### Improve as a result ofcombustion ofcleaner burning fuels. such as those WIth lower sulfur content, near where oil is burned and regionally when the sulfur content ofoil is reduced. Second. a study by Hart Consulting in February 2010. entitled "Ultra Low Sulfur Heating Oil Assessment:' concluded that production 01' 15 

### parts per million (ppm) sulfur content distillate oil. also calied ultr,,-Io\\ sulfur distillate. will cost five to nine cents per gallon more to 

### produce than high sulfur diesel. (Ultra Low Sulfur Heating Oil Assessment page 5. available from Hart Energy Consulting. 1616 S. Voss. Suite 10()(). Houston. TX 77057. Terry Higgins. Director

- thiggins2Dhanenergy.com)

ICITE 4Z 

### :\.J.R.2244) "iEWJERSEY REGISTER, "IONDAY, 

### SEPTEMBER20, 2010

### ADOPTlO"S

C'Hart Study") These additional costs are less than the llA cents per gallon that the Department estimated in its Economic Impact (41 N.l.R. at 4162 and 4)63). Among the conclusions ofthe study were that. given thetightmarket outlook.higherpremiums of20 to 30 cents pergallon for distillate oil would prevail if sulfur content in heating oil were significantly reduced without sufficient time for installing additional desulfurization capacity at the refineries. The Hart Study's conclusion regarding the need for time for refineries to install desulfurization capacity the four-year and six-year lead-times provided by the amended rules. The Department has provided time for refineries to add additional desulfurization capacity.

Third, a study by Kevin 

### 1. Lindemer, LLC, for the Northeast Oilheat Research Alliance C'Lmdemer Study"), concluded that the United States refining industry does not currently have the capacity to convertall heating oil demandin the United States to 15 ppm sulfurcontent fuel: however, the refining industry could have the capacity within a few years. (http://wwv,'.nora-oilheat.org!site20/uploads/lowsstudv.pdD The announced distiHate upgrading projects at the refmeries to remove sulfur from fuel close!) match the amount ofoff-highway diesel fuel thatwiH be needed in 2012 to meet Federal off-road sulfur in fuel standards. TheLindemerStudy stated that refmers will add capacity to remove sulfur from fuel only in response to market or regulatory requirements. Given enough lead-time, suggested as five years in this study. the refiners will be able to meet low sulfurheatingoil specificationsof15 ppmfuel sulfurcontent.

The United States is currently exporting ultra-low sulfur distillate. A short-term shiftto using ultra-lowsulfur distiHate ashomeheatingfuel in

some stateswould cause domesticultra-low sulfurdistillate prices to rise relative to the world market, and domestic heating oil prices to fall relative to the world market. A one to three cents per gallon higher cost for ultra-low suIfur distillate compared to home heating oil containing higher levels of sulfur is expected in the northeast wholesale market duringthe winter season. Price spikes could occur ifinsufficient time is provided for implementation of the introduction of ultra-low sulfur distillate into the home heating oil market. The Lindemer Study concluded that, for consumers, the higher cost of 15 ppm heating oil relative to higher sulfur heating oil at 2,500 ppm sulfur levels will be

more than offset by lower furnace maintenance costs and higher fuel efficiency. SummaryofHearing Officer's Recommendations and Agency Responses: Theproposedrepeal and amendmentstothe Sulfurin Fuelsrules were published in the NewJersey Registeron November 16, 2009 at 41 N.l.R. 4l56(a). A public hearing was held on January 5, 2010 in the Department's Public Hearing Room in Trenton. William O'Sullivan. P.E., Director ofthe Department's Division ofAir Quality, served as the Hearing Officer. The comment period was set to close on January 15, 201

### O. Four commenters provided comments at the public hearingand 14
commenters provided written comments during the public comment period. On January 20, 2010, Governor Christie issued several executive orders. Executive OrderNo. I suspended for 90 days morethan 150 thenpendingproposals ofvariousNewJersey agencies. amongwhich was the proposed repeal and amendments to the Sulfurin Fuelsrules and 11 other proposals ofthe Department.Executive OrderNo.1 states thatone ofthe Governor's priorities is to establish, under the direction of a Red Tape Review Group. a "commonsense"approachto the promulgation ofrules. The common sense principles are described in Executive Order NO.2. and the Red Tape Review Group was established under Executive Order No.3.Thepurpose ofthe suspensionwas to afford the Red Tape Reviev. Group the opportunity,to examine the suspended rulemakings and make recommendations as to those proposed rules it determined are "unworkable, overly-proscriptiveor ill-advised."

On February 3. 20

### ICJ. the Department filed for publication in the New Jersey Register a notice of the extension or reopening of the comment period on the amendments to the Sulfur in Fuels rules. and the other I ] suspended Department ruJemakings. to March 15. 2010 The notice appeared in the March 1. 2010. New Jersey Register (see 42 NJ.R. 642Ia)\. The Department posted the notice on its website on February 4. 20**1~.** The Departmenl sought through the notice to focus any additional 

### Ei\"VIRO:'\\1Ei\"TAL PROTECTlO\,

wTitten comments submitted on the purposes ofthe rules revIew set forth in the executive orders. The Department also announced in the notice that it would be scheduling informal stakeholder meetings on the proposals and that the dates forthe meetings would be posted on the Department's website. The schedule of the stakeholder meetings was subsequently posted on the website on February22. 2010. The stakeholdermeeting for the proposal to amend the Sulfurin Fuels rules was held on March 8. 20)

### O. At the stakeholder meeting. the Department specifical1y sought discussion of the economic analysis. Federalstandardscomparison, process improvement and compliance and enforcement review for the proposal. Thirty-six persons attended the stakeholder meeting. During the extended comment period the Department received an additional 12 written comments. nine ofwhich

were from people who did not comment during the initial comment period. After reviewing the comments received during the public comment period, the Hearing Officer has recommended that the proposal be adopted with the changes described below in the Summary ofPublic CommenL, and Agency Responses. The Department accepts the Hearing Officer'srecommendation. Arecord ofthepublichearing is available for inspection in accordance with applicablelawbycontacting: DepartmentofEnvironmental Protection Office ofLegal Affairs 

### ATTN:DocketNo. ]4-09-10/676 40I EastState Street PO Box402 Trenton, NewJersey 08625-0402 This adoption document can also be viewed or downloaded from the Department'swebsiteathttp://www.nj.gov/dep/rules/adoptions.html. SummaryofPublic Comments and AgencyResponses:

The Department received comments on the proposed amendments from the followingpersons: 1. Randall Abbuhl,Weston Solutions 2. Jim Benton,NewJerseyPetroleum Council andAPI 3. MariaBenyshek,ConocoPhillips 4. DanielBrusstar,CMEGroup 5. Keith Buccanan,Sunocolnc. 6. Gregory M. Cohen,AmericanHighway Users Alliance 7. ChristopherColman.Hess Corporation and Hovensa LLC 8. EricDeGesero, Fuel MerchantsAssociation ofNewJerse) 9. Charles

### T. Drevna. National Petrochemical 8.:.. RefinersAssocIation 10. Michael A. Egenton, NewJersey ChamberofCommerce 11. Paul Fiore, Service StationDealers ofAmericaand Allied Trades 12. M. Gary Helm, Conectiv Energy 13. DenaMatolaJaborska,NJ Environmental Federation 14. ChristopherLen. Hackensack Riverkeeper. NYINJ Baykeeper 15.Al Marmato.AmericanPetroleum Institute 16. Jason L. Mengel, BuckeyePipelineCompany.L.P. 17. Richard Moskowitz., AmericanTruckingAssociation 18. Peter

### J. Pantuso,AmericanBusAssociation 19. DavidPringle. NewJersey EnvironmentalFederation 20. RichardSiller. Hess Corporation 21. ThomasSims. UnitedStatesDepartmentofDefense.Air Force 22. JeffTitteL Sierra Club 23. R. PeterWeaver, International Liquid TermmalsAssociation 24. Raymond Werner. U.S. Environmental ProtectionAgenc) 25. SamWhitehead. Colonial Pipeline Company 26. Bill Wolfe.PEER 27. L.M. Ziemba. ConocoPhillips A summaryofthe comments and the Department'sresponses follO'\s. The number(s) in parentheses after each comment identifies the respectivecommenter(s) listed above.

General comments 1. COMMENT: The Department is commended for its working relationship with the regulated community and for soliciting stakeholder input in developing the amendments to the sulfur in fuel rules. The



### (CITE42 T\.J,R, 

### 22451 NEWJERSEY REGISTER, MONDAY, SEPTEMBER20,2010

### ENVIRONME]\'TAL PROTECTlON

Department should continue this cooperative relationship. 

### C. 3. 12. 24. 27)

2. COMMENT The State is commended for taking a leadership role

In the eastern United States in being the first ofmany states expected to propose the lower suifur fuel standards as an Important regional strategy
to improve air quality. 112.24)

RESPONSE TO COMMENTS I AND
., The Department acknowledges the commenters' suPPOrt.

3. COMMENT: The Departmentshould seek a consensus resolution to any outstanding issues with the rules that offers the environmental henefits while providing necessary f1exibility to the transportation and relinery sectors. f2. 15. 25)

4. COMMENT: The Departmentshould workwiththe oil industry and the New Jersey Petroleum Council in implementing the second phase of reductions and in the appropriate level ofsuifur for No.2heatingoil. (4)

RESPONSE TO COMMENTS 3 AND 4: The Department has discussed the sulfur in fuels standards. including appropriate standards for the second phase ofreductions. with all interested parties, including the transportation and refinery sectors. over the past tive years. most recently at aMarch 8. 20I(I meeting ofstakeholders. The Departmentwill continue to meet With interested parties to discuss implementation of these rules and to seek flexible solutions and a consensus resolution. wherepossible.

5. COMMENT: 

### It is unclear whether the proposed sulfur in fuels and sulfurdioxide emission standards at NJ.A.C. 7:27-9.2 apply to kerosene

or gasoline. The proposal states that the rules do not apply to kerosene and gasoline: that is, the proposed rules do not affect the very light fractions of distillate fuels. including gasoline and kerosene. But the proposed rule text itselfdoes not appearto differentiatebetweenthe very light fractions. The Department should clarify whetherthe rules apply to fuel oils already covered by Federal regulation. The Department should add the following to the defmition offuel oil: "Fuel Oil does not include fuels commonly orcommerciallyknown or sold as gasoline."(12)

RESPONSE: In at least oneplace in the proposal (4I NJ.R. 4 I57, for example) the Department did suggest that the sulfur in fuels rules do not apply to kerosene and gasoline. This is an oversimplification that may have caused some confusion. A moreaccurate and preciseexplanation of the relationshipbetweenthosefuels andthese rules follows.

The rules donot apply to kerosene and gasoline to the extentthatthey

are specifically exempted at N.J.A.C. 7:27-9.3(a), which provides an exemption for "fuel used by ocean-going vessels or in motor vehicles." The Department intended that statement in the rule proposal to pertain to fuels used in mobile sources where such fuels are already covered by the sulfur in fuel standards ofFederal regulation at 41 CFR 80.520fd). In the Federal regulation. theFederal government requires the sulfurcontent of kerosene bea maximum of IS ppm ifit is used. intended for use. ormade available for use in highway vehicles with diesel engmes. in NJ.A.C 7:27-9.2. Table IA and Table lB. NO.2 and lighter fuels, which would include kerosene used for other purposes. are defined by their Saybolt Universal Seconds (SSlJj viscosity being less than or equal to 45. Any liquid fuel oil having a viscosity ofless than 45 that meets the definition of a No.2 fuel oil and lighter would be suhject to the sulfur in fuel standard of500ppm in 20J4 and 15 ppm in 2016. ifnot used in a motor vehicle orother mobile source subjectto the Federal sulfur in fuel limits. Kerosene would be considered as a No. 2 or lighter fuel using the viscosity definition in the tables. as kerosene has an SSU of 35 at 68 degrees Fahrenheit. (http://www.engineeringtoolbox.com/kinematicvlscoslty-d 397.html) The existing exemption for mobile sources at ".lAC. 7:27-9.3Ia) excludes any fueL includinggasoline and kerosene, ifused in motorvehicles ormarinevessels.

The Departmentintendsthatthe Sulfurin Fuelsrules atNJ.A.C. 7:27­ 9 include the suIfur in fuel limits for kerosene that is not used in motor vehicles ormarinevessels and not covered byexistingFederal regulation. The level of the sulfur in fuel standards in the State and Federal regulations for diesel fuel and distillate heating oil will then be identical. Settingthe State heating oil standards at the same level as in the Federal diesel fuel ruleensures that there \vill be no confusion as to the applicable level ofthe standard. regardless ofthe type of equipment or use of the kerosene. 

### .l,()OPTIO"iS

6. COMMENT: Ifthe Department adopts the proposed amendment:-

.. J1 should expedite pem1it processing for permits required for reiinenes to comply wilh these rules. as project implementation will benefit the environment. provide jobs to New Jersey. and add to New Jerse\'s economy. The Commissioner should issue a directive to assist in the appropriate facility applications and permits to add refining capacity to the State for manufacturing and storing additional quantities ofreduced sulfurdistillate for use as heatine.oil. (21 RESPONSE: The

### Departm~nt will reallocate staff as needed to conduct any requested pre-application meetings. to ensure that these permits are given prompt and appropriate attention. The Depanment will work closely with the regulated community to complete the permitting process as expeditiously as possible. 7. COMMENT: The Department should amend the rules to exempt fuel used by military vehicles from the proposed fuel requirements. It should also define "tactical military vehicle" so as to exempt ItS use of fuel from the rules. The United States Environmental Protection Agency (USEPA) already exempts military vehicles from the Federal distillate fuel standards at 40 CFR 80.606 for JP-8 fuel, tbe kerosene-based fuel used to fuel tactical military vehicles. The exemption is necessary because subjectingtactical military vehicles to mOlOr vehicle diesel fuel standards would compromise the military readiness for ovcrseas deployment oftactical militaryvehicles, as these vehicles must be fueled using the same fuel that is used globally by the Department ofDefense. (21)

RESPONSE: 

### Itis notnecessary to specifically exempt the fuel used by tactical military vehicles from the provisions ofN.J.A.C. 7:27-9, as fuel used in this manner is already exempted. NJ.A.C. 7:27-9.3Ia). for which theDepartmentdid notpropose amendments, provides thatthe provisions ofthis subchapterdo not apply to fuel used byocean-going vessels or in
motorvehicles. A "motorvehicle" is defined at N.J.A.C. 7:27-9.I as "any vehicle propelled otherwise than by muscular power. excepting such vehicles as run only upon rails or tracks." A tactical military vehicle would, therefore, be considered amotorvehicle and the fuel ituses would beexempt from therequirements ofNJ.A.C. 7:27-9. 8. COMMENT: The Department should not revise New Jersey's SIP
to include these rules as that would make it difficult to amend the rules should future implementation or marketplace conditions warrant. (2. 6. 1D. IS)

RESPONSE: As is discussed at 41 N.J.R. 4J60, the Department proposed to amend its regional haze air quality protection plan on June 16, 2008 (SIP for Regional Haze Proposal, September5. 20(8) to include this air pollution control strategy. This strategy is also included in New Jersey's June 16. 2008 Fine Particles Attainment Demonstration SIP to attain and maintain the fine particles national ambient air quality standards (NAAQS). Theserules, therefore. are already proposed to be a part of New Jersey's SIP and cannot be changed without publicly proposing a modification tothoseplans already before the USEPA. Since these rules are an important component of New Jersey's plan for clean air. the Department will be submitting this rule adoption to the USEPA for inclusion in applicable SIPs. Having a rule as pan of an approved StateSIP means that, by Federal law. the rule cannot be amended without Federal approval and cannot be amended to increase emissions unless a commensuratedecreasein emissions occurs elsewhere.

The Department recognizes the capital investment that refiners are requiredto maketo lowerthe suifur content offuel. The Depanmentalso recognizes the potential effect that these rules could have on the trading offutures in the New York Mercantile Exchange (NYMEX)marketplace Including these rules in New Jersey's SIP gives the marketplace greater certainty. The Department will carefully consider the timing and Impact of any changes to these rules in the future. in order to avoid potential disruption to the marketplace from any uncertainty regarding implementation.

9. COMMENT: The proposed amendment to require 15 ppm sulfur
contentfuel oil in 2016 is not warranted. is excessive. cannotbejustified. is not needed to improve air quality. is tremendously costly in capital expense or is without well documented cause. The DepartmenL should carefullyjustify orexaminethis decision. (1-4. 6. 7. 9-12. 15-18. 23. 15) RESPONSE: The Department disagrees with this comment. New Jersey is required by the Federal Clean Air Act to attain the healtn



### (CITE42 i'U.R.2246) ;'liE\\'JERSEYREGISTER, :'.lO:"DAY. SEPTE.\1BER20, 2010

### ADOPTIO"'iS

standard for all criteria air pollutants, In the Response to Comments 15 and 16 below. the Department notes that approximately eight million New Jersey residents are breathing polluted air in counties not meeting the NAAQS. and that sulfur in fuel oil contributes to New Jersey's nonattainmentissues. Also. the Federal Clean AirActrequires Newjerseyto make progresstowards achievingnatural background visibility conditions in Federally designated Class 

### I Areas. as discussed in the proposal at 41 N.J.R, 4]59. The requirement to reduce the sulfurcontent offuel oil has been determined to be a reasonablemeasure by the members ofthe MidAtlanticfNortheast Visibility Union (MANE-VU) (including NewJersey) and is a component ofNewJersey's SIP for Regional Haze, as discussed
at 4] NJ.R, 4159 and 4160, The standards must be implemented to meet these national requirements as soon as practicable, In its Economic Impact (4J NJ.R, at 4164). the Department performed a cost-benefit analysis for these amendments and determined thatthe benefits exceeded the costs, See also the Department's Responses to Comments 47 through 67 below for a furtherdiscussion ofthe costs and benefits ofthe adopted amendments, Regional implementation oflow sulfurfuelstandards 10, COMMENT: NewJersey shouldadopttheserules along withother states, While New Jersey may be the first state in the MidAtlanticfNortheast United States to proposerules to lower sulfur in fuels, otherregional states are expected to proposesimilarrulemaking. (24 i 11, COMMENT: The Department shouldnot adopt theproposed 2016 limits in NewJersey. because they would bemore stringent than those of any othersurroundingstateand. therefore, could disruptthe homeheating oi

### Imarketplace, (l0) 12.COMMENT: The Department should coordinate these and other related rules with other states, inside and outside of MANE-VU, including the Midwest Regional Planning Organization and the Visibility Improvement State and TribalAssociation ofthe Southeast (VISTAS). so

as to not place New Jersey sources at a competitive disadvantage. (J0. 12)13, COMMENT: New Jersey should harmonize the implementation schedule in the proposed rules with the State of New York to avoid supply problems and price spikes, as these states share the New York harborarea, an internationallyknown producthub. (4) ]4.COMMENT: The Department should adopt the proposed amendments and repeal without delay, as such delay would result in a substantial loss of air pollution reductions region-wide, particularly insofar as any weakening of the proposed standards or delay in their implementation by New Jersey will affect action taken by other states in theregion,thus magnifyingthe loss in pollution reductions. (13. 19)

RESPONSE TO COMMENTS 10 THROUGH 14: New Jersey will experience the greatest improvements in air quality and regional haze if all states throughoutthe eastern United States implementtheMANE-VU sulfur reduction strategy, This was the basis for the agreement of the MANE-VU states to pursue this regional reduction strategy. as noted at 41 NJ.R, 4159. The Department agrees that the amendments should be adoptedwithout delay,

Maine's Governor signed legislation on April 5.2010 to require the

use of 15 ppm sulfur fuel oil by January L 2018 in fulfillment of its MANE-VU commitment. (Public Law Chapter 604, LD 1662. 124th Maine Legislature) This is the first MANE-VU state to complete regulatory or statutory action to achieve the regional reductions that will benefit the airquality in the MANE-VU region. as discussed at 4] KJ.R 4160, The Department is tracking the progress of other states in implementing similarregulations or legislation, Legislation introduced in New Jersey and other MANE-Vli states would require ]5 ppm sulfur
content distillate oil in 2011 or by 2012, (Bills have been introduced as AI054 and SI414 in New Jersey. SIJ45C in New York. SI282 in Pennsylvania. H549 in Vermont. andH7653 and S2521 in Rhode Island,) The Depanmentanticipatesthal otherstates will soonfollow Maine's and New Jersey's Icad and will enact legislation or implement regulations with consistent. workable timeframes and standards, Issues of supply. fungibility. costs. distribution and demandwould best be avoided ifthere

ISregional implementationofthis airpollutioncontrol stralegy.

The proposed 2016 limIts for sulfur will not be more stringent in Nev. Jersey than In**surroundin~** states if New York, Pennsylvania and 

### ENVIRO,\MENTALPROTECTlO,\'

Delaware (all ofwhich are inner zone MANE-VU states, as discussed at 4 I NJ.R, 4162) follow through on their signed MANE-VU commitment The remaining MANE-VU states in the outer zone of the MANE-VL, strategy are expectedtohave similarsulfurin fuels standardsin 2018,

Airqualitybenefits 15, COMMENT: The Department should adopt the proposed amendments becausethey will result in airquality and health benefits for millions ofNewJerseyresidents. (24) 16, COMMENT: New Jersey has been classified as "contributing"**t~** non-attainment ofthe fine particulate matter air quality standard In Ne" YorkCity, NewJerseyresidents are not, themselves, experiencingbad air quality, Therefore.the proposed amendments are not needed, (71 17, COMMENT: The Department should adopt the proposed amendments because they will lead to cleaner air in states surroundmg New Jersey, or will directly benefit New Jersey, helping to reduce negative health impacts, acid rain, water nitrification and regional haze withinthe State, 

### as well as outsideit. (13, 19, 24) 18, COMMENT: The Department should adopt the proposed amendments. as they would limit orprevent harmful emissions from the combustion of fuel oil containing sulfur, including emissions of fine panicles, sulfurdioxideand nitrogen oxides, and they would dramatically limit theharmful healtheffects ofthese emissions. (13, 19,24) RESPONSE TO COMMENTS ]5 THROUGH 18: The Department anticipates that NewJersey's air quality and the health ofits citizens will improve as aresultofadoption ofthe amendments, Benefitsto thepublic health and welfare are the underlying basis for this adoption, The Department discussed this and interstate contributions to air quality at 4I N.J.R.4159 and 4160, New Jersey is contributing to airpollution in surrounding states, and these states are contributing to New Jersey's air pollution, A "nonattainment area" under the Federal Clean Air Act is not only one that exceedstheNAAQS, but also any areathatcontributesto the exceedance in another area. The USEPA classified 13 counties in New Jersey as being in non-attainment of the fme particulate standard, For some of these counties, the classification wasbased on the county's contributiOn>
to unhealthful levels ofairpollutants in New YorkCity, while for others the classification was based on the county's exceedance of the fine particulate standard, TheDepartmentdiscussed this point III the proposal
at 41 NJ.R. 4158 and within the June 16, 2008 State Implementation Plan for fine particles that New Jersey submitted to the USEPA, (http://www.nj,gov/deplbagp/sip/siprevs.htm) Because of the interstate transport of pollutants, it is important for New Jersey and all other MANE-VU states to adopt similar standards in order to obtain the full
extentofairqualitybenefitsto NewJersey andthe region. ]9.COMMENT: Adoption ofthe proposed rules will result in lower emissions, This will help New Jersey in the future. should the USEPA respond to studies showing that the current NAAQS do not adequately protect public health by promulgating more stringent NAAQS, The promulgation ofNAAQS stringent enough to protect public health and the environment would require New Jersey to go beyond the requirements ofthe rules prior to amendment. The amendments will be useful ifthathappens. (24) 20, COMMENT: The 500 ppm sulfur standard for homeheating oil IS needed to effectively assist the State III complying with the current Federal NAAQS for fine particulate. sulfur dioxide or ozone air pollutants, (13.19.23.24) RESPONSE TO COMMENTS 19 AND 20: The Department acknowledgesthecommenters supportfortherules, Thisrulemaking is a vital component ofthe State's strategy to meet its air quality standards and visibilitygoals,

Althoughthe Department is notadopting standards underthe authority of. or in response to. the draft notices ofFederal rulemakingto lower the sulfur dioxide NAAQS, the adopted sulfur in fuel standards will benefit the State's air quality and will be useful in meeting both the current and anticipatedmore stringent FederalNAAQS, OnJune 2, 20I

### O. theUSEPA adopted a substantially more stringent NAAQS for sulfur dioxide, These adopted sulfurin fuel limits ofNJ.A.C. 7:27-9 will be included in future New Jersey SIPs now that the USEPA has made the sulfur dioxide NAAQS morestringent.Theadoptedstandardswould alsobe induded in



### NEW JERSEYREGISTER,MONDAY, SEPTEMBER20, 2010 (CITE42 

### KJ.R. 2247i

### ENVIRONME1\'TAL PROTECTIOl" 

### -\/)OPTIOf\S

New Jersey's SIP for fine particulate matter if the USEPA makes the N.A.

..AQS for fine particulate mattermore stnngent.

The Departmentbelieves that itis Important forthe State to Implement its rules IlJ 

### advance of Federal action on fine panicles. Refiners need as much as four years lead time to add the necessary equipment to 

### desuliurize ali fuel oil. Ifthe Department**.\~ere** 

### to wait for the USEPA to 

### linalize a more stringent fme particulate NAAQS before amending its rules. refineries could be left WIth insufficient time to modify their operations to 

### meet the standard. The modifications to therefinenes must be in place well in advance ofthe operative date ofthe anticipated more stringentNA/\QS. in orderthat the benefit ofreductions is achieved on or before the deadline. Tne State must be able to demonstrate. through monitoring and measurement. that it is in attainment by the required date. Hence. waiting for the new NAAQS and then promulgating arule at that lime may provide less time for compliancethan the four years requested by the refining industry. 21. COMMENT: The Department does not need to adopt the proposed amendments in orderto attamthe NAAQS for sulfurdioxide. As noted in the proposal. all areas of the State are currently in attainment of the NAAQS for sulfurdioxide. (16)

RESPONSE: New Jersey has met the former NAAQS for sulfur dioxide in most areas ofthe State since the 1980s. It is not vet evident if the State is in attainment for the Federal one-hoursulfur

### dio~ide standard of 75 parts per billion that was finalized on June 22. 2010. which the State must meet on or before August 3. 20J

### O. The State's air monitors indicate lower levels than the newFederal sulfurdioxide NAAQS. but air quality modeling of major sulfur dioxide sources will be necessary to determine attainmentornon-attainmentnearthese sources. Although the adopted amendments may be auseful control measure to attain or maintain levels that comply with the new NAAQS for sulfur dioxide. the Department did not propose the amendments as part ofthe State'ssulfurdioxide SIP orto attainthe StateorFederal health standards for sulfur dioxide. Rather. the Department is adopting these more stringent sulfur content standards to meet and maintain the health standard for fine particulate matter. and to make progress towards the State'sregional haze goals.

22. COMMENT: The Department should not adopt the 15 ppm standard as it IS not needed for air quality benefits. The Federal fuel standard for sulfurin kerosene. when used in indoorspace heating. is 400 ppm. Presumably the USEPA set the sulfur specification for indoor kerosene use at a conservative level for operability and air quality purposes, suggesting that the Department should set the sulfur content standard for fuel burned in furnaces and boilers at 500 ppm (a similar level). (7) 

### RESPONSE The primary concern of the Depanment in setting the sulfur content standard for distillate fuel (the fuel generally used in furnaces and boilers) at 15 ppm is not to address indoor air quality

concerns. but to address the formation of secondary aerosols or fine particulate matter in the outside air. as discussed at 4 I N.J.R. 4158. The formation of secondary aerosols contributes to the high levels of particulate found in New Jersey's air, and sulfates are the predominant component ofthis fine particulate matter. The amendments will lowerthe sulfate component ofthe fine particulate matter affecting New Jersey's outdoorairquality. The use of unvented. indoor, kerosene space heaters is of concern. regardless ofthe sulfur content of the kerosene. The USEPA has stated that. "Unvented fuel-fired space heaters that use kerosene or gas are of serious concern to pubiJc health officials" (Introduction to 

### Indoor Air Quality. USEPA. Office of Air 

### and Radiation. Doc. ID # 

### 400-391003. Juiy 1991. page 2261. It is also recommended by the USEPA in this document that adequate ventila[ion must be provided when using unvemed. indoor kerosene heaters by bringing fresh outdoor air into the I iving space. ThIS prevents the build-up ofthe by-products ofcombustion (potentially hannful air contammants like suifur dIOxide) in the indoor environment. (page 227). The Depanment is not aware any findrng that 400 ppm sulfur content kerosene IS safe to 

### use in mdoor. unvented space heaters. Removing pollutantsotherthan sulfurfrom fuel oil 

### 23. COMMENT: The Department should withdra\\ the proposed amendments and re-propose a 15 ppm sulfur content reouirement. while also requiring a lower fuel oil carbon content and inclusion ofa bio-fuel component. NewJersey should alsowork on this with otherSlates and the NortheastStates for Coordinated Air Use Manaf'ement (NESCAUM). (8) RESPONSE: Expanding the scope of this

### ~rulemakmg be:ond what

was already agreed to by the MANE-Vli members to include" bio-fueis component or a carbon content fuel standard is unnecessarv and would delay implementation of the sulfur in fuel standard in

### Ne\~ Jersev and

### thro~ghout the region. The Department does not Wish to

### dcla~' the emissions reduction benefits of these rules Timely adoption of these amendments provides the other MANE-Vl' members the assurance that New Jersey will implement a lower sulfur content standard. and will provide refiners with ample lead-time to 

### comply with the adopted standards. Any delay would shorten the necessary lead-time provided to the refmeries and to the marketplace.

Carbon content and bio-fuels can be addressed as a separate rulemaking effort ifwarranted after further evaluation. The NESCAUM states are doing such an evaluation as part oftheir consideration ofalow carbon fuel standard.

Theamountofemissions reduced by the adopted amendmentsandrepeal 

### 24. COMMENT: The Department should adopt the proposed amendments because that will reduce [Otal sulfur dim;ide emissions in NewJersey by an appreciable amount. (13. 19.24,26)

25. COMMENT: The amendments should be adopted because they will affectthe combustion offuel oil that accounts for 10 percent oftotal sulfurdioxideemissions in NewJersey. (241 26. COMMENT: The Department should adopt the proposed amendments because they would reduce sulfur dioxide from lighter fuels by 97 percent in 20I4 and by 99 percent in 2016. The-proposed amendments and repeal would also reduce emissions of small particles. nitrogen oxides and carbon monoxide. (13.19) RESPONSE TO COMMENTS 24 through26: The Department agrees that these rules will result in significant emissions reductions and acknowledges the commenters' suppon. The proposal at 41 N.J.R. 4162 and 4163 stated that the amendments will result in a reduction in sulfur dioxide of 1.030 tons per year starting in 2014 from distillate fuel consumption. 220.4 tons per year starting in 2014 from residual fuel consumption. and an additional 294 tons per year starting in 2016 from the implementation ofthe ultra-low sulfur fuel standards for distillate oil. The use of fuel oil varies by season and year. by type ofuse. and by location. Distillate fuel oil is used in the northeastern United States for home heating. and in other parts ofthe country for on-road diesel fuel. Given these variations. the numbers in the proposal are a reasonable estimate ofthe typical reductions expected annually in New Jersey from the adoption oftheserules.

The Department's review ofthe Energy Information Agency (EIA) data (available at http://tonto.eia.doe.f'ov/dnavlpetipeLcons 821dsL dcu-fluS a,htm) shows that in 2008 75.1 percent of the distillate and kerosene use in the State was covered bv Federal motor vehicle fuel regulation. In 2008. 68.6 percent ofthe

### di~tillate and kerosene fuel was for on and off-highway vehicle use. 4.5 percent railroad use. and two percent vessel bunkering use. This leaves approximately 24.9 percent ofdistillate and kerosene to be ref'ulated bv the Sulfur in Fuels rules at N.J.A.C. 7:27-9. rather than Fede;al

### regul~tion. The 24.9 percent 01 

### all distillate. residual. and blends of distillate and residual oil includes residential. commercial. and industrial heating and electric power. The adopted amendments are intended to conform the Slate's sulfur in fuels requirements to the Federal requirements for fuel used mon-road and off-road sources. so that all distillate fuel oil. whatever theul[imate usc. will be subject to the same sulfur standards. 27. COMMENT: The proposed amendments give only small incremental benefit from going from 500 to 15 ppm suIfur in fuel in 20 16 considering that sulfur dIOxide emissions from New Jersey's coal-fired power plants amounted to over 45.000 tons in**200~.** 

### The Depanment should delay adoption ofthe proposed amendments untiIafterreductions at the coal-fired electric generating units are achieved. (9)

(CITE42 \.'/.R.2248) "iEWJERSEY REGISTER, \10l"DA\.SEPTE"IBER20. 2010

### ADOPTIO\S

RESPONSE: The Department agrees that coal-fIred power plants are large contributors to sulfur dioxide levels in New Jersey and within the United States. The Federal Clean Air Act namely the New Source Review provisions and the sulfur dioxide/acid rain trading program, and New Jersey's Air Pollution Control rules (NJAC. 7:27-10, Sulfur in SolidFuels) are addressingthese emissions in order to achieve significant emission reductions at New Jersey's coal-fired power plants in the near future, The Departmentexpects that all operating coal burning sources in New Jersey will have state-of-the-art sulfur oxides pollution control equipmentby 2014,makingtheemissions from these sources much lower bytime ofimplementationofthe adopted amendments.

The benefits ofboth the adopted sulfur in fuel oil standard and lower emissions from New Jersey's coal burning sources were included in the estimatesofthe airquality bcnefits in theNESCAUM studyreferenced in the proposal at 41 NJ.R. 4162. This study showed that the region would attain the air quality standard in 2018 for fine particulate matter after regional implementation of these control strategies and lowered emissions from New Jersey's coal burning sources. Reducing the sulfur
content offuel oil from 500 ppm to IS ppm will give smaller, but still majoremissionreduction benefit. Thebenefits to NewJersey's airquality will be aresult ofemissionreductions inNewJersey andregionally. 28. COMMENT: A limited number of boilers now require fuel that contains 15 ppm (oreven 50 ppm) suifur, and will realize no benefitfrom the mandated reduction in sulfur content in fuel oil. The marketplace already provides sufftcient fuel with reduced sulfur content for these boilers. Therefore, the Department 'cannot take credit for emissions reductions for those boilers, The reductions are present with or without the proposed amendmentsto therules. Owners ofotherboilerswill like)y switch to natural gas. In effect. a reduction to 15 ppm or even a more moderate 50ppm sulfur byNewJersey will requirethat thevastmajority offuel oil consumers utilize a fuel they do notneed, will costthem more. and will increase emissionsoverall. (7)

RESPONSE: To the extent that the adopted amendments result in reductions in sulfuroxides and fine particulatematter. there is a benefit. Althoughboilers that already use fuel oil with a sulfurcontent of 15 ppm may not furtherreduce emissions, thoseboilers thatusefuel with a sulfur
content of 50 ppm will experience some reduction. As the commenter suggests, the number ofboilers that already use the ultra-low sulfur fuel is relatively small. The anticipated emission reductions from the adopted 15 ppm sulfur content standard are discussed in the Environmental Impacl4l NJ,R,at4163 and 4]64,

Althoughsome homeownersmay switchfrom fuel oil to natural gas, it is not mandatory in New Jersey that they do so, either as a result ofthe adopted amendments or otherwise, Moreover, there are consumers in parts of the State that do not have access to natural gas pipelines or supply, so they cannot switch from fuel oil to natural gas. 

### It is important that all consumers have access to low sulfur fuels. Some consumers considerdistillate home heatingoil to be "dirtier" thannatural gas. due to the greatersulfurdioxide and particulate emissions from combustion. As

a result of the adopted amendments. the sulfur content of fuel oil and sulfur dioxide and particulate emissions from fuel oil will be approximately equal to the sulfur content and sulfur dioxide and particulate emission from natural gas, providing consumers 

### a "clean" alternativetonatural gas.
Fuelsupplyissues

Studiesconcerning supply

29. COMMENT: Before the Department adopts the IS ppm sulfur in fuel standard for 2016, the Department should do a study to ensure that

an adequate supply ofultra-low sulfur fuel oil (that is, IS ppm) will be available in the future. (2, 3,4,6,8-12,15,16.17,20,23)

30. COMMENT: The Department re'ties on studies to show that fuel supplywill be adequate. These studies are nolonger valid. as many ofthe proiects to lower the sulfur content offuel used in the studies have been canceled by major refming entitles. One refiner could not Droduce additional quantities ofultra-1m

...·sulfur diesel beyond its current supply. The refiner has one refinery in New Jersey that does not produce low or ultra-low sulfur diesel: its other refmery does not have the capacity to 

### E,\VIRONMPiTALPROTECTICP,

produce ultra-low sulfur diesel beyond its current supply that is used in the transportation market. (7) 31. COMMENT: The amendments, ifadopted, will not lead to supply shortages, based on a soon-to-be released study ofthe National Oilheat Research Alliance (NORA) thatshows that the United States is currentl) exporting 80 million barrels a year (equal to three billion gallons) of ultra-lowsulfurheating oil to Europe and South America. Thisamount. if
not exported. would more than cover the 400 million gallons ofheating oil used in NewJerseyannually, (8)

RESPONSE TO COMMENTS 29 THROUGH 31: A Departmen1­ initiated study offuture supply and availability issues is not warranted, based on the availability ofstudies thathave already been conducted, the adequacyofthe current supply ofultra-lov. sulfur oil to meet the fuel oil demands ofNewJersey. and theprojection thatoiIdemand will decrease in the future. Given the long lead-time provided for implementation, supply and availability issues should not be of concern in New Jersey. Four years allows adequatetime for the marketplace to avoid any supply and availability issues, as was suggested by the comments submItted by representativesofthe NYMEXmarketplace, Recent experience with implementation ofFederal rules requiring 15 ppm diesel fuel in all on-road and off-road vehicles has not presented significant issues of fuel supply or availability within New Jersey or elsewhere. Actual experience with production, availability and distribution ofthe ultra-low sulfur (15 ppm) fuel. therefore, supports the conclusions of the NORA study, The NORA study concluded that the supply ofboth 500 and IS ppm sulfur content distillate will be available in the proposed timeframe to cover the remaining 17 percent of the distillate fuel usage. (See 41 NJ.R. at 4162.) The Departmentknows of

no additional studies that have been performed showing that the future supplyofultra-lowsulfurdiesel will not be adequate. By all accounts,the implementation of the Federal ultra-low sulfur diesel standards has occurredwithoutcausingdisruption or supply issues. Oral statements and written comments on the rule proposal, and a recently released study by Hart Consulting, Inc., all indicate that disruption of supply and price spikes can be avoided ifrefmers are afforded a three to four-year lead· time to plan and install the desulfurization equipment needed to rem"vc sutfur from the remaining part of the fuel stream. This**rulemaki:.~** provides sufficient lead-time for refineries to install addition;;! desulfurization equipmenttomeetdemand.

In addition to the 2008 NORA study. studies by the American Petroleum Institute (API) (discussed at 41 NJ,R. 4162) also concluded that an adequate supply of low sulfur oil would exist if suffIcient lead· time were given for the change. While these studies are dated, they are not necessarily outdated. The conclusions of these reportS have been borne out by the experience with implementing the Federal on-road and off-road sulfur in fuel requirements, The recently-released Lindemer Study, discussed above, also concluded that adequate supply will be available ifrefiners are given enough lead-time to implement the ultra' low sulfur fuel requirements. The Department knows ofno shortages or price spikes that have resulted in the transportation fuel market or the home heating oil market due to implementation ofthe Federal ultra-low sulfurfuel requirements, norhave the commentersprovidedanyevidence that shortages or price spikes occurred as a result of implementing the Federal sulfurin fuels rules.

liltra-lowsulfurfuel supplyissues

32.COMMENT: Adoption ofthe 15 ppm sulfur content standard for distillate fuel oil in 20\6 may result in fuel supply and availability
concerns, leading to price disruption and price spikes, especially from U.S. and foreign sources. (2, 3, 4, IS)

33.COMMENT: Adoption of the proposed amendments will likel;

cause 15 ppm or ultra-low sulfur distillate fuel to be 111 short supply because a step-change increase in demand for lower sulfur diesel will likely occur in 2015 when ocean-gomg vessels caliing on U.S. ports will be required to use fuel meeting a 

### LOOO ppm sulfur contentstandard: and during the peak heating season, a percentage of heating oil supply is reliant on impons from areas that do not have the diesel desulfurizallon requirements ofthe U.S. and Canada. (2, lSI 34. COMMENT: The Depanmem should not adopt the 15 ppm sulfur content standard based on an assumption that the availabilIty offuel In

(CITE42N.,I.R. 22491 

### NEWJERSEY REGISTER, MONDAY, SEPTEMBER20.2010E"IVIRONME"iTAL PROTECTION



### the Gulf or Midwest will mean low sulfur fuel will also be available In 

### New Jersey. Pipeline constraints and the requirements of .Iones Act shipping laws (that only U.S. vessels can be used In 

### shipments between United Statesports) can affect availability in Ne,,'Jersey. (7)

35 

### COMMENT: The Depanment should not adopt the proposed amendments because it did not take into account ail factors concerning "iewJersey's refineries and supply. These factors include lack ofrefinery capacity in the nonheast and an inabi\ny of existing refineries to 

### be readily converted to 

### make ultra-low sulfur diesel. Distillate fuel used for on-road transportation accounts for nearly all ofthe demand for number 2 fuel In 

### some states. so that those refiners make a higher proponion of ultra-low sulfur diesel for sale in those states. At one New Jersey refmery. Hess's Port Reading Refinery, 100

### percentofall distillateoutput is used as heating oil. and at the parent company"s offshore refinery distillateoutputis about 50

### percentheatingoil. (7)

36.

### COMMENT: The Depanment should adopt the sulfur content standard of 15 

### ppm in 20J

### 6. based on the positive experience of the Federal government in setting the 2006 

### on-road diesel fuel standards. Ultra-low sulfur diesel was introduced in all states for on-road use with little or no supply or pricedisruption. because all parriesworked together
to identify and fix problems early in the process. (2. 15) 37.

### COMMENT: The amendments and repeal should be adopted because they will affect the remaining component of the distillate fuel market. which is a 59 

### billion gallon market. excludingjet fuel. Ofthis total, 76 

### percentmust havea sulfurcontentof 15 

### ppm orless by later this year as a result of the Federal fuel requirements. in 2012, 

### this will increase to 83 percent oftotal distillate use being covered by Federal regulation requiring a 15 

### ppm sulfurin fuel standard. The USEPArepons significant compliance with the 15 

### ppm Federal sulfur in fuels standard with 99 

### percent ofall diesel pumps distributing ultra-low sulfur on-road diesel fuel through the third quarterof2009.

### This provides a large source ofsupply of 15 

### ppm sulfurcontent distillate fuel. which is available to the home heatingoil market. (8. 22)



### RESPONSE TO COMMENTS 32

### THROUGH 37: 

### As the Department has provided nearly six years for the regulated community to implement the 15 

### ppm suifur in fuel standards, an adequate supply of ultra-low sulfur fuel should be available to meet demand. As part ofits comments. the New Jersey Fuel Merchants Association provided data on the currently available supplies and usage ofultra-low sulfur oil used as onroad diesel fuel and home heating oil in the New York harbor area. The Lindemer Study included data ofthe current exports ofultra-low sulfur heating oil showing that adequate supplies ofultra-low sulfur diesel fuel currently exist to 

### cover New Jersey's annual use of heating oil. Both

sources of data show that current supplies of ultra-low sulfur fuel oil would be adequate to 

### meet New Jersey'sdemandifNewJersey alone had

acurrentstandardfor distillateoil of 15 

### ppm. Additional ultra-low sulfur fuel capacitywill be needed tomeetthe MANE-VU regional need.

The Department also verified the data of the New Jersey Fuel Merchant Association and the data included in the Lindemer Study by reviewingthe aatacurrently available on the website ofthe United States Depanment ofEnergy. This review indicates thatcurrent stocks ofultralow sulfur diesel oil are shown to be at their highest levels ever. (See http://tonto.eia.doe.lwv/dnav/petJhistiLeafHandler.ashx?n=PET&s=MDO S3 SN.I l&f=M.) Stocks ofultra-low sulfur diesel oil in New Jersey for January 2010 

### were reported at 3.903.000 

### barrels or 163.926.000 

### gallons. The same webSite lists refmer sales of all other petroleum products in New Jersey at 437.000 

### gallons ofdistillate fuel oil per day in January 2010 

### or about 13.547.000 

### gallons for the month of January 2010 

### (calculated as 437.000 

### galions a day times 31 

### days equals 13.547.000 

### gallons for January sales). This supportsthe Depanment'sconclusionthat the current supplies of ultra-low suifur diesel fuei exceed the current demand in New Jersey for all distillate fuel. including home heating oil. This excess capacity would cover New Jersey's future demands for distillate fuel ifno other state or Federal requirements for ultra-low sulfur distiJiate fuel were present.

NewJersey needs to implement this type ofregulation in concert with neighboring states. as evidenced by the results ofthe LindemerStudy. To

ensure that adequate supplies exist In 

### the future to meet the demand ofall northeastern states. the Depanment is affording adequate lead-umes to


### ensure lhat sufficient capacity can be installed to remove sulfur from the 

### ADOI'TlOI\iS

entire distillate and residual fuel stream to cover the northeastern unlled SlateS market.

The Department was provided no dala during the comment period to 

### suggestthat the future demand for distillate fuel oil. used as home healing oil. in New Jersey will increase. or that the ability of the refiner, to produce 15 

### ppm sulfur-content fuel oil will decrease from current levels In fact. it was suggested by the Lindemer Study that demand for home heating oil may decrease in the future due to new and more demandIng energy efficiency standards and a shift ofhomeowners to natural gas. It

was suggested by this study that ifthe standards for an ultra-low sulfur fuel were not applied to the sectOr ofdistillate fuel used as home healing oiL the decline in the use ofdistillate fuel oil as home heating fuel would be greater in future years. The adopted amendments also provide for sufficiently long lead-time for implementation, providing approXImately SlX years from publication ofthe adoption until July 1. 2016.

### when the 15 

### ppm standard will be operative. This provides suffiCient time for refineries to plan for the capacity and infrastructure changes needed to desulfurize the remaining distillate component of the fuel Slream. after removing sulfur from the fuels used in mobile sources, to adequately
meet future demand. In the proposal.the Department addressed the issue ofwhether suppIy and availability may be issues in the future. (See 41 

### N.J.R. at**416~.)** 

### The successful implementation ofthe low sulfur fuel standard without supply disruption is dependentupon the refiners adding desulfurizalion capacity
to their facilities. The adopted amendments and repeal provide the leadtime that mostrefiners indicated to the Deparrment in their comments to 

### this rule proposal would be necessary to 

### avoid disruption, issues with supplyorto completecapitalprojects.

Globalsupplyissues 

### 38. COMMENT: The Department should not lower the distil.late fuel oil standardto 15 

### ppm as that wi]1 create global supplyissues. In contrast. maintaining a sulfur content standard of 500 

### ppm for heating oil. or adopting a sulfur content standard of 50 

### ppm. as some countries have done for highway fuel. will increase sources of supply. Worldwide demand for distillate continues to 

### grow, espeCially for ultra-low sulfur distillatesused as transponation motor fuels. 0, 7. 15.27) 39. 

### COMMENT: The Department should not lower the sulfur content standard ofdistillate fuel oil to 15 

### ppm as that would create gioba\ supply issues. At even a 500

### ppm standard. New Jersey's sulfur standard would be the lowest mandatory standard in the world. At \5 ppm. New Jersey would beout ofstep with the rest ofthe giobe. Theproposedreduction of sulfur content in heating oil to 15 

### ppm is by far the most restrictive standard for heating oil in the entire world and is thus needlessly burdensome. (The commenter provided a table showing sulfur content requirements in different fuel types in several countnes. In this table. the regulatory sulfur content limits range from 50 

### to 20.000 

### ppm. depending

on the country.) A IS ppm sulfur content standard for heating oil drastically limits worldwide supply sources. with two predictable effects: higher long-term prices and much more limited ability to obtain supply quickly in case ofacold winter. In the winterof 1999 

### to 2000. 

### shortages

were avoided in the United States by imports ofhigher sulfur material. mostly from Russia andEastern Europe. (71 

### 40. COMMENT: The Depanment should not adopt the distillate fuel oil standard of is ppm. as it will lessen the ability of New Jersey to 

### import compliant fuel in periods ofdistress. A 2000 

### report bv the EIA, "The Northeast Heating Fue] Market: Assessment and Oplions," highlighted the importance of imports in addressing serious shortages causedby unusual cold periods in the northeast. Duringrecent GulfCoast hurricanes. the 15 

### ppm diesel standard caused substantial hardship. including fist fights over supply. because oflimited options for supply. (7)

### 4l.COMMENT: The Depanmentshould adopt the proposed sulfur in fuels standard of 500 

### ppm (but not the proposed 2016 

### sulfur In 

### fuels standard of 15 

### ppm) because approximately 26 

### addilional countries can provide distillate supplies meeting the 500

### ppm standard. (7) 

### RESPONSE TO COMMENTS 38 THROUGH 4l: The Department recognizes that the adopted sulfur content standards for distillate fuei oil differ somewhat from those in some other countries. (jermany. for example. specifies a sulfur in fuel limit for home heating oil at 50 

### ppm

(ClTE.j2 ;'>\.J.R. 22501 NEW JERSEY REGISTER,MO:"DAY. SEPTEMBER

### 20.20]0

### ADOPTJO"S

for the purpose of fostering the use of condensing furnaces. The Department's actions are consistent with the sulfur in fuel requirements for on-road transponation fuel in Canada and the U.S. Virgin Islands. which will have a 15 ppm sulfur in fuel requirement for diesel fue\. These
two countries are the largest recent suppliers ofimpons to thc ultra-lo\\ sulfurdiesel market.

The European union countries and Russia have recently lowered the sulfur content standard of their on-road transportation fuel to 10 ppm (http://www.dieselnet.com/standards/eu/fue\.phpl. lower than the standard of 15 ppm in the United States. Because ofthe shift to ultra-low sulfur levels in transponation fuels throughout the world. the ability of the refiners to meet ultra-low sulfur diesel demand throughout the world has shifted the market to those countries that have installed the capacity
to provide ultra-low sulfurdiesel fuel. Othercountries are now imponing ultra-low sulfur fuel oil from the United States because of those countries' increased demand for ultra-low sulfur fuel oil and the United States' ability to provide it. (http://oilspotJ.dtnenergv.com/

e anicleOOI711850.cfm?x=blI.0.w) Imports of distillate fuel to the United States will most likely come from Canada and the U.S. Virgin Islands in the near future. according to EIA data on current importing countries to the United States and the Han Study. (Hart Study. page II.) (See EIA data at http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.**ashx~n=PET&s=MDOS3** SNJ l&f=M.)

The results of the 2000 EIA study on the imponance of imports. panicularly from Russia and Venezuela. to avoid northeast heating oil disruptions are no longervalid. (See Comment40.) Specifically_the Hart Studystates. "Importshave played adecreasingrole in the NYINJ market coinciding with reductions in the high sulfur off-road distillate market. Peakseasonal wintersupplies from imports have declined significantly." (Han Study, page II.) Most countries are now undergoing the shift to ultra-low sulfur diesel in theirtransportation sectors. For example. Russia has just finished its changeover to 10 ppm ultra-low sulfur diesel transponation fuel in 2009, in accordance with Euro Directive V, the European Union's emission regulations for new heavy-duty diesel engines. and may soon be able to provide ultra-low sulfur diesel fuel to the world market. Other European and Asian countries are also completing this shift to ultra-low sulfur diesel, and the world market for this product is expected to return to balance in the near future. (See http://wwv.•.dieselnel.com/standards/eu/fuel.php.) Refiners have expressed concern that ifNew Jersey adopts the ultralow sulfurdiesel standard. they will have no market for diesel fuel that is off-specification (or off-spec). or does not meet the 15 ppm standard. Priorto the operativedate ofthe 15 ppm standard. therefineries are able. for example. to market off-spec on-road diesel fuel (which has a USEPA standard of 15 ppm) as number2 heating oil. But for the applicable sulfur
content standards.the fuels are the same. The refiners can also blend the off-spec oil into other oils subject to a higher sulfur content standard. Onceall fuels sold for use in NewJersey mustmeetthe 15 ppm standard. such blendingorrelabeling forthe NewJersey heating oil market will not be possibk. However. not all outlets for the off-spec fuel will be closed. The USEPA. through the International Maritime Organization (a specialized agency ofthe United Nations). fmalized plans on March 26. 2010. that would subject ships within a 200 nautical mile buffer zone around the United States and Canadian coastlines to stricterairpollutionregulations. As pan of this effort. the USEPA will require ships to use fuel oil meeting a lower sulfur content standard of 1.000 ppm by January. 2015 within the 200 nautical-mile zone The ships now use fuel with as much

as 40.000 ppm sulfur. The USEPA standard for ships would provide a place for the refiners to market off-specification fuel after the 15 pplll suifur content standard is in effect. This would also create new demands

on the distillate oil market. and some refineriesmay choose to supplythis markel. ratherthan invest inlower sulfurequipment for the home heatll1g oil market.

Winter-time 5ulfaleformalion 42. COMMENT: The Depanmentdoes notneed to adopt the proposed amendments in order to address ozone levels and regional haze. because heating. oil is a winter fuel. Heating oil emissions do not occur in the

summerwhen thereare elevated levels ofozoneand haze.

## n. 16) 

### EN\'IROSME\TALPROTECTlO\,

43. COMMENT: Visibility impairment should not sene as the basis for the proposed amendments because heating oil is a winter fuel. Information published by NESCAUM and MANE-VU indicates that during the wintenime very local emissions. trapped by inversions. are the main causes ofthe visibility diminishments in New Jersey's Class 1area (a small parcel of land in the area of Atlantic City). The long.-term increase in particulatematterin these Class I areas is dueto the increased

use ofcoal-fired powergeneration in regions far from Nev- Jersey. which has caused winter and summer levels of paniculate matter to nearly equalize (lVer several decades. Sulfur dioxide emissions in New Jersey playa limitedorno role in localized visibility diminishments in the area ofconcern. (7) RESPONSETO COMMENTS 42 AND 43: The adopted amendments apply not only to home heating oiL which is used primarily (but not exclusively) in the winter. but also to numerous other types and uses of fuel oil. Distillate and residual fuels are burned during all times of the year. for purposes including electric generation (especiall: to meet peak electric demand on very hot summer days) and other commercial and industrial applications. 

### It is incorrect to characterize the Brigantine Wilderness Area of the Edwin B. Forsythe National Wildlife Refuge. New Jersey's Federally designated Class I Area. as a "small parcel of land'" By definition and listing under the Federal Clean Air Act. a Class 1area is a national park

or wilderness area greater than 5.500 acres in size. The Brigantine Wilderness Area covers approximately 46.000 acres in three New Jersey counties, including Atlantic, Ocean and Burlington counties (www.fws.gov/refugesiprofiles/index.cfm).Thls is the only Class I area in the mid-Atlantic region of the United States and its borders are completely within the confines of the State of New Jersey. Improving visibility in the Class I area also improves visibility and lowers particulate levels throughout New Jersey because only by improving the air quality within New Jersey. and within the air being transported through New Jersey. will an improvement result in the air quality withlll the Class I area itself. The MANE-VU and NESCAUM studies of visibility impairment do not conclude that localized emissions are tile only contributor to the visibility levels found in New Jersey's Class I

area. In fact. these studies and others conclude that the regional transf'nn ofemissions plays a predominant role in the airpollutant levels found at the Class I area. Specifically. accordingto theExecutive Summary ofthe MANE-VU report. "Contributions to Regional Hazein the Northeast and Mid-Atlanticunited States": "Summenime visibility is almost exclusively driven by the presence or absence of regional sulfate. whereas wintenime visibility depends on a combination of regional and local influences coupled with local meteorological conditIOn;. (inversions) that can lead to concentrated build-up of emissions from local sources" (italics in original) According to the MANE-VU report. an "effective emissions management approach would rely heavily on broad-based regional S02 control efforts in the eastern United States'" This rulemaklngwill reduce emissions that have an impact both locally and regionally and could be classified as a broad-basedregional sulfurdioxide control effort.

The MANE-VU studies cited in the proposal at 41 NJ.R. 4159 shov. that the predominant air contaminant in New Jersey's Class I area. regardless of season. is sulfate. Sulfate forms from the sulfur in fuels combining with oxygen during combustion to form sulfur dioxide gas. While the transformation rate ofgaseous sulfur dioxide to sulfate aerosol particles does diminish in winter. its transformation rate is not zero. Moreover. the days ofworst visibility impairment do not always occur In the summer months. The VIEWS website (hnp://capita.wustl.edu' CAPlTA/CapitaReportS/PMFineAn/PMTopics PPTIPM25Formation.ppt: lists the transformation rate ofsulfur dioxide to sulfate on a typical July day as 0.8 percent per hour. The transformatIon rate of sulfur dlO,;ide tc' sulfate on a typical January day is 0.2 percent per hour. or 25 percent 

### 0;' whatthetransformationrate would be on atypical Juiy day. Depending on the quantity and iocatlon ofthe sulfurdioxide released in NewJersey. thi, transformation could and does have a localized effect upon New Jersey's air quality. even in winter. Data collected as pan of an on-site monitoring program for air pollutants at the Brigantine Wilderness Area. called the IMPROVE



### NHV JERSEYREGISTER. MONDAY, SEPTEMBER20, 2UI() 

### (CITE41l\.J.R. 11511E]'\\,IRONMEl\TAL PROTEClION



### monitoring network. show that sulfates are the predominant pollutant comprising particulate matter in both the wInter and summer. These data

are SOrted by days of the hest regIOnal haze visibility levels. where a person can more clearly see objects at a distance. to the days ofworst regional haze visibility levels. where aperson cannot clearly see objects at adistance. Areview ofthe data collectedby the IMPROVE monitoring network show that hetween 34 to 

### 47 

### percent of the 20 percent worst regional haze visibility days occur during the seven coldest months (October through April) at the MANE-VU Class I 

### areas. (http://vista.clra.colostate.eduJIMPROVE) These are not the five summer months associated with high ozone levels. Fifty-sevento 61 percent ofall haze is attributable to 

### sulfates in the winter months at the MANE-VU sites in the northeast. meaning that suifate is the largest contributor to haze and fine pmiculate matter during the winter. As stated previousl). sulfates are the largest contributor to 

### haze and fine particulate matter in all seasons and adoptingthese sulfurin fuel standards will result in lower sulfate levels within New Jersey and New Jersey's Class I area. An analysis of MANE-VU data. performed by Tom Downs. Chief Meteorologistfor Maine's DepartmentofEnvironmental Protection usmg data from 2000 to 2003. shows that the days of worst case visibility impairment occurred on 39 days in the summer, 15 days in the winter. and 36 

### days in the fall and spring. The pollutant adversely affecting visibility levels the most. and increasing fine particulate levels during these worst days ofvisibility impairment was sulfate. The contribution of emissions from heating oil is much more substantial during winter months than the annual average contribution would suggest. For example. in New Jersey home heating oil contributes

seven percent ofthe sulfur dioxide emissions armually from all sources. but contributes 25 percent ofthe sulfur dioxide emissions during winter. This is consistent with the contribution of sulfur dioxide emissions in other states with Class I 

### areas that are affected by New Jersey's air pollution. as shown In Table 1

### helow. The table shows the emissions from home heating oil in cold months compared to emissions from all sulfurdioxide sources. including. emissions from coal-firedpowerplants.
Table 1

Percent ofSeasonal Sulfur Dioxide Emissionsfrom HomeHeating Oil (HHO)

State Name Contributionof Contribution of HHOto all sulfur HHO to all sulfur dioxideemissions dioxideemissions in

on an annual winter(%) average basis (%) 

### Maine 15 25 Vermont 19 32 New Hampshire 7 12 New Jersey 7 12

This percentage ofthe contribution ofsulfur dioxide emissions from home heating oil would increase as power plants install sulfur dioxide controls to meet Federal and State requirements. unless fuel oil sulfur coment is also reduced. As sulfur dioxide emissions from other sources, such as coai-fired power plants, decreases, the relative importance of sulfurdioxide emissions from combustion ofhomeheatingoil increases.

The adopted amendments will not only improve air quality in New Jersey. but also in the reg.ion. New Jersey is setting its standards in cooperation with surrounding states. meeting Federal Clean Air Act requIrements to lessen New Jersey's impact on the downwind Class I

areas affected by New Jersey's emissions. For further discussion. see the proposal Summary. 41 NJ.R.at4160. 44. COMMENT: The rule oroposal misstates the cost-effectiveness of the amendments because cost-effectiveness for sulfur controls is typically expressed in terms of sulfur dioxide, not PM2.5. It is not accurate to express cost-effectiveness for sulfur in terms ofparticulate, particularly for a wintertime fuel in which localized transformation of sulfur to particulate is limited. (7) RESPONSE: Sulfur dioxide gas is converted in the atmosphere to ammOnIum sulfate. which IS 

### a liquid aerosol and a fine particulate. Depending on weather conditions, part ofthe sulfur dioxide released in**ADOI'T)O'\~**



### the State would he converted into fine particulate matter hy the lime it reaches New Jersey's borders. EvenIually. all of the sulfur dioxide released into the atmosphere as a gas will be converted into fine particulate. This is discussed in the proposal Summary. 41 1\

### .J.R. at 4158. and the Social Impact. 41 N

### J.R. at 4161. It is. 

### therefore. appropriate to 

### discuss the cost-effectiveness ofcontrols for sulfur dioxide. not only in terms of sulfur dioxides effect as a gas. but also in IWOS of sulfur dioxides effect as an intermediate product. Including sulfuric acid. and as


### a fine particulate (for example. ammOnIum sulfate). /\Iso. sulfur dioxide has synergistic effects on health and welfare. when exposure to 

### humans and plants occur with otherpollutants. The estimated economic benefit ofthe adopted amendments that wil) result from avoided adverse health care episodes. as stated in the Economic Impact (41 NJ.R. at 4162) was developed from aNESCAUM study of the projected health benefits in 2018 using tbe USEPA's BENMAP model. The BENMAP model. in tum. uses the results from a regional atmospheric photochemical dispersion model. called CMAO. to develop these economic beneftts. In other words. to 

### use the BENMAP model one needs to know the modeled air quality benefits ofa given air pollution control strategy in terms of its reduction in specific air pollutants for some future year. The NESCAUM study used a2018 CMAQ modelingrun thatassumed theemissions ofsulfur dioxide from all liquid fuel burning sources in the eastern United States would be lowered to alevel Similarto those in Ne" Jersey's adopted rule. This assumption resulted in a lowering of sulfur dioxide emissions in the eastern United States of 180.000 tons. The CMAQ modeling used equations ofphotochemical reactivity to predict the conversion of sulfur dioxide gas into fine particulate matter, also called PM2.5. at locations downwind ofwhere the sulfur dioxide gas IS 

### emitted. The PM2.5 predicted 24-hour concentrations for 2018 from the CMAQ model were used in the BENMAP study to predict the economic benefits of the regional ultra-low sulfur fuel strategy. The Department, therefore, relied only upon the economic henefit to health that will result from the adopted amendments' lowering of fine particulate matter becauseofthe reduction insulfurwithin fuel oil. The Departmentis notawareofany additional studies ofthe economic benefit that the adopted amendments will have from the reduction in ambient air sulfuric acid levels or from the reduction in the svnergistic health effects between sulfur dioxide gas and particulates.

### The'incl~sion ofthese benefits would add to 

### the already positive economic benefits of the amendments. See the Response to Comment 43 for adiscussion ofseasonal effects ofemissions from burningoffuel oi!.

TechnicaldiffiCUlty oftheadopted sulfurcontentstandards 

### 45. COMMENT: The Department should not adopt the proposed 2016 sulfur in fuels standard of 

### 15 ppm because it did not consider the costs relating to the technical diffiCUlty ofremoving sulfur from different crude oils, as unequivocally documented in the USEPA's Regulatory Impact Analysis for the off-road sulfurin fuels rule (40 CFR 80.510(bl and (e)l. (7)

### RESPONSE: The technical difficulty of removing sulfur from different crude oils to meet a sulfur content standard of 15 ppm has been documented in the USEPA's Regulatory ImpactAnalysis for the off-road sulfur in fuels rule (40 CFR 80.510(b) and (e)l. 

### The USEPA specifically addressed these difficulties when it developed a cost analysis for the Federal off-road fuel rule. Despite the acknowledged difficulties. USEPA adopted the fmal rule. In response to comments concerning the techmcal difficulty in removing sulfur from fuel. the USEPA indicated that It had "included the cost of improved distributors. heat exchangers and other ancillary items associated with successful diesel fuel hydrotreating in ou:' cost estimates." The USEPA assumed. as the Department ooes. that al! fuel produced to meet the within adopted sulfur coment standards would be produced using new desulfurization equipment. These new Units could bedesigned with ahigherhydrogen pressure and take advantage ofmore advanced catalysts. according to the USEPA. Refiners then would have the ability to design the new equipment to address tne fuel compositions that they amicipate producing from their crude oils. (Summarv and Analysis of Comments: Control of Emissions from Nonroad Diesel Engines. EPA420-R-04-008. May 2004. Page 6-13 and 6-)4.)

ICITE42 

### ".J.R.2252) \EWJERSEY REGISTER. \10NDAY,

### SEPTE"lBER20.2010**"~--,-_** ..**_-_._-_._~--**

---- --------**-----------~-'-_.**



### ADOPTIONS

Given thatboth the Department and USEPA analyses ofcosts assume that new desulfurization equipment will be added to the refineries. the USEPA-projected costs for the removal of sulfur from crude oil are within the Department's estimated range for removal of sulfur. as the Department discussed in the Economic 1mpact (41 NJ.R. at 4162 and 4163). In the USEPA analysis (Summary and Analysis of Comments: Control ofEmissions from Nonroad Diesel Engines. EPA 420-R-04-008. May 2004), the USEPA estimated that the cost to produce E 15 ppm distillate fuel was seven cents a gallon. The Department estimated that the costto producea 15 ppm distillate fuel was 11.4 centspergallon. The Department'suse of 11.4 cents per gallon to remove sulfur from fuel oil also assumed that new equipment would be added to the refinery to desuifurize crude oil and this nev,,' equipment would be designed withthe abilityto remove sulfurfrom the refiner'sfeedstock (orcrudeoil supply). Also. the Hart Study. discussed above. estimated costs at five to nine
cents pergallon to produce ultra-low sulfurfuels. This is also lower than the 11.4 cents estimatedby the Department.

An averaging.bankingand tradingprogram 46. COMMENT: The Departmentshould have proposed an averaging, banking.and tradingprogram providmg refineryflexibility, becausethere will be no remaining markets for the distillate product that may be slightly abovea ultra-lowsulfurdiesel level. This would have allowed for

amore cost-effectiveimplementationofthenewstandards. (2, 15)

RESPONSE: Banking. averaging and trading programs are more difficult to administer than the regulatory approach that the Department has chosen, wherein all refiners must meet a 15 ppm sulfur in fuel level by July 1,2016.Abanking. averaging andtradingprogramwould require administrative oversight and costs to the Department and the rcgulated community, extensive involvementoffinancial planners and investors. an annual "true-up" of the bank and trading program, and a verification program,through an enforceable fuel samplingprogram. to guaranteethat the sulfur dioxide credits traded are the result ofreal reductions in air pollution. This verification program could be burdensome, as it would rely upon sampling and testing the sulfur content of each shipment or with each use of the regulated fuels to ascertain compliance and the number of "credits" generated. The Department did not propose a banking, averaging, or trading program due to these complexities. The Department anticipates that refiners will invest the financial capital to install the needed desulfurization equipment to meet the lower sulfur standards of the adopted amendments, and will forward this cost to

consumers overtime. (See EconomicImpact, 41 N.J

### .R. at4163.)

For a discussion ofalternative markets for off-spec fuel oiL see the Responseto Comments38 to 41

. Costs due to increased competition

47. COMMENT: The Department should not adopt the proposed amendments because lowering the distiliate fuel sulfur content standard
to 

### IS ppm by 2016 would place the users of distillate fuel for home heating in direct competition with the highway and off-road diesel fuel

users. A separate sulfur in fuel standard for home heating oiL. distinct from thetransportation diesel fuel standard. is needed to do this. (2, 6. 7. 10,11. 15. 17.18.27)

48. COMMENT: The Dcpartment should not adopt the proposed amendmentsbecausethe amendments would driveuppricesforthe home heating oil users. cause sharp price impacts, cause seasonal price spikes.

or createyear-round supply problems that would harm both residents of oil-heated homes ane the operators ofdiesel vehicles. (4, 

### 6. 7) 49. COMMENT: The Department should not adopt the proposed amendments and repeal until it has calculated the impact upon diesel prices and supply that would result from the elimination of a diStinct heatingoil market from the on-road ultra-Jow sulfurdiesel market. (2. I I. 17. ]8)

50. COMMENT: The Department should adopt the proposed amendments. The proposed amendments will not create unfaIr comnetition hetween the home heating oil and transponation diesel fuel sectors as this competition already exists. Prior to 1993. heatmg oil and diesel fuel competed in the samc market and were the same product. Although heating oil and diesel fuel are different in theIr sulfur content due to Federal regulation. the) are traded as the same fuel on the Ne\\ 

### E'\VIRO:,\MENTALPROTECTlO,\

'York Mercantile' Exchange (NYMEX). Because they are traded hy NYMEX as the same product. in July 2008 prices for retail home heating oil approached $5.00 per gallon. an all-time record, despite it being a

summer month when heating oil demand is low. Heating oil consumers alreadypaj the price for competing with on-road diesel fuel: theyjustdo
not getthe added benefits ofthe reduced sulfur contentfueL (8. 10) 51. COMMENT: The Department should not be dissuaded from adopting the proposed amendments based on the negative comments concerning costs. suppl). and marketability. These same negative
comments were made in opposition to the USEPA's proposed ultra-lo\\ suIfurin fuel standardof 15 ppm for highwaydiesel use. (8) 52. COMMENT: Adoption of the proposed rulemaking could negatively impact New Jersey's share of Federal highway and public transit funds. The Federal distribution for highway and public transit funding is based on total fuei sales in the State which would drop a, a resultofthis rulemaking. Drivers would buy less expensive, higher sulfur
content fuel out of State, which could negatively impact New Jersey's businessesand economy. (6) 53. COMMENT: The Department should not adopt the proposed amendmentsuntil ithasdoneanothercost-benefIt analysis specificallyto

assess the effect of this rulemaking will have on the price ofon-road diesel fuel. Diesel fuel price**increa~es** will affect small business trucking firms, who will have difficulty in passingthesecosts on to the consumer. (6. 17) RESPONSE TO COMMENTS 47 THROUGH 53: Home heating oil and on- and off-road diesel fuel are essentially the same fuel. called distillate fuel. They may have a different sulfur content, and on and offroad diesel fuel are taxed by the Federal government: however, the two fuels areessentiallythe same.TheDepartmentdoesnotexpectthat future competition in the marketplace between the users of ultra-low sulfur distillate fuel for home heating and the users ofultra-lowsulfurdistillate fuel as on or off-road diesel fuel will result 

### in higher prices for either

consumer. Homeheatingoil and diesel fuel competed in the samemarket for many years. All distillate fuel, regardless of its ultimate use. was marketed and traded together. 

### It was only with the implementation in 1993 ofthe first Federal sulfurcontent standards for highway diesel fuel
to 500 ppm that separate markets for low sulfur diesel. meeung a 500 ppm sulfur content standard. and distillate heating: oil at higher sulfur limits were created. Prior to 1993. distillate fuel could be used interchangeably betweenmarkets for its uses as a motor vehicle fuel and
a, a home heating oil. Making the sulfur content of all distillate fuel consistent again will allow for the interchange offuel between markets. This interchange can be used to avoid shonages in the marketplace. Distillate fuel ofconsistent sulfur content. regardless ofits final intended

use. could be moved between markets or imported from foreign sources tomeetspikes in demandorotherwiseincrease fungibility ofthe fuel.

Havingseparate markets. as currently exists for thedistillateoilusedfor home heatingand for on and off·roaddiesel fuel. does not necessarily mean large differences in price or a large reduction in the price ofhome heating oil. even though currently there are less stringent sulfur content standard, and, thereby, less costs associated with removingsuIfur from homeheating oiL A review of EIA data for fuel oil meeting varying sulfur content standards for the pastsix years showsdecreasingpricedifferentialsover the last four years when annual average prices are reviewed. The data in the Table 

### 2 below werc obtained from the EIA webstte. {hap:!! www.eia.doe.gov/oiLgas/petroleurrv·info..glance/perroieum.hunl\
Table

### 2 AverageAnnualSpot PriceofDiffering SulfurContent Distillate Fuel

-2004 to 2009 NewYorkHarborPrices in (notincludingtaxes) Cents perGallon
Year !'io. 2 Heating liltra-Lo\\ Average Oil with High Sulfur

### 11<0. 2 Difference(in SulfurContent Diesel Fuel**200~** 111.7 J

### 15.: 3.5 

### 200' 162.6 167.8 5.2 2006 180.6 194.5 13.9
2007 203.2 2124 9.2

(CITE42**~'.J.R.** 2253j I'IEW JERSEY REGISTER,MONDAY,SEPTEMBER20.2010

### ENVIRONMEr,TAL PROTECTJOl'

2008 285.5 292.2 b 2009 164.6 166.2 1.6

This table. usmg the real price differences in the New York harbor market. shows that the price ofultra-low sulfur diesel was only' 1.6 cents

more. on average annually. than the price ofhighersulfurcontentnumber 2 healing oil in 201l9. It can be presumed that. since both fuels are essentially the same except for their sulfur content, the only difference in price should be due to the varying sulfur content. As Table 2 indicates. significant differences in price do not necessarily follow differences 10 fuel suifur content. [n 2006. when the tirst Federal suIfur in on-road diesel fuel standards wentinto effect, the difference in price betweenhigh and low sulfurfuels wasthe greatestwiththe difference in price dropping steadily each year. The difference in price between ultra-low sulfur and highersulfur content fuel in 2009 was onlY \.6 cents. This steady decline in price can be attrihuted to the extra capacity ofthe refiners to remove sulfur from fuel oils such that the U.S. is now producing ultra-low sulfur fuel oils beyond its current national demand as on and off-road diesel fuel. This excess supplyofultra-low sulfur distillate oil is currently being exponed to other countries. The ability of the refiners to produce this
extra supply ofultra-lowsulfur fuels has been attributed to the long leadtime afforded by the USEPA to implement the Federal on- and off-road diesel fuel standards. giving the refmers enough time to add the equIpment to remove sulfur from fuel oil. (See the Response to Comments 38 through 41.) According to the Hart Study. this excess capacity to produce ultra-low sulfur distillate fuel will disappear in 2012, whenthe fIrst phaseofthe Federal sulfurin locomotive and marinevessel fuel rules go into effect.

New Jersey is providingclose to a four-year lead timeto meet the 500 ppm standard and a six-year lead-time to meet the 15 ppm sulfur in distillate fuel standard with this rule adoption. This lead-time is appropriate in order to allow the refiners to add the desulfurlzation eauipment to remove sulfur from the remaining part of the distillate
stream notbeing produced as on oroff-road diesel fuel. As NewJersey IS providing this sufficient lead-time, similar to the length of lead-time provided by the Federal sulfur to meet the Federal diesel fuel sulfur standards, the Department is confident that sufficient supply ofultra-low sulfurdistillatecan beavailableto avoid price spikes ordisruptions in the marketplace.

The Department does not agree that New Jersey will lose sales of distillate orresidual fuels to other states and. as aresult. a commensurate share ofFederal highway funding. The Federal highway funding is based

on the sales ofmotor fuel. not sales ofall distillate fuel oils. Tne Federal sulfur in fuel standards for on and off-road vehicle use are consistent

across state lines and do not vary between States. (40 CFR gO.50 and 40 CFR gO.510(b) and lc).) Whether New Jersey requires a lower sulfur standard in distillate or residual fuels in accordance with the adopted standards should not have an impact on sales ofon and off-road diesel fuel in the State.

NewJersey also will not lose sales to other States hecause all MANEYU states are expected to adopt similar sulfur in fuels standards for both distillate and residual fuels. Consequently, there should be no price differential based solely on differences in the sulfurcontent offuels and a regional market for higher sulfur content fuels will not exist. Ifall States surrounding New Jersey implement similar sulfur content standards as NewJersey. consumers will be able to purchase only distillate fuel of 15 ppm sulfurcontentand a residual fuel of5.000ppm sulfurcontentorless. regardless ofthe state ofpurchase. Fuel purchases in a given state wiII then be based upon other factors, like fmal sales pnce, proximity ofthe supplier to a consumer's home. or prior business relationships with the seller. Differences in price among states will not be based upon any difference in the sulfurcontentofthe fuel. (See 41 N.J.R. at 4]57.)

Cost ofreducing the sulfurin fuels standard from 500 ppm to 15 ppm

54. COMMENT The Department should not adopt the proposed amendments until it has adequately evaluated the costs ofthe rule and done anothercost-benefitanalysis. (2.7.17,18.27)

55. COMMENT The Depanment should not adopt the proposed 15 pDm sulfurcontent standard based on Its projection thatgoing from a 500 ppmto the 15 ppm sulfurcontent standard will save the consumermone) 

### ADOPTI()1\

### S

The Brookhaven National Laboratories study (referred lo in the proposal

as the NYSRDA Report) (41 N.J.R. at 4163) considered and evaluated the benefits of500 ppm heating oil versus 2.000 ppm heatIng oil. not the benefits ofusing 15 ppmheatingoiL (13.19) 56. COMMENT: The Department should adopt the proposed amendments and repeal because their adoption is cost-effective and will result in an annual health heneflt of$32 million In reduced health costs. whichexceedscompliancecosts. (\3, 19) 57. COMMENT: The Department's analysis of costs is flawed. The ]\!YSERDA Report, cited by the Depanment (41 K.I.R. at 41631. posited that the lower sulfur content level wouId reduce cleaning intervals from annually to once every five years and to a very limited extent. Improve heat-transfer efficiency. 

### It is not plausible. though, to assume that cleaningintervals wouldrise to 15 or 20 years at the iower 15 ppm sulfur
content leveL The NYSERDA Report's Figure 6-2a. which shows cost savings by fuel oil suifur content. bears this out, as the savings curve flattens out at lower sulfur levels. The study also questioned whether the savings would actually materialize. as people may annually ciean their furnaces anyway, a new visual inspection would he needed, and fire codes and manufacturers' warranties may continue to require annual cleanings. (7) 58. COMMENT: The Department should not adopt the 15 ppm sulfur
content standard because its cost-benefit analvsis did not adequatelv consider the cost difference from reducing th; sulfur in fuel

### st~ndard from 500 ppm to 15 ppm. TheUSEPA estimated thatthe cost ofgoingto

a suifur content standard of500 ppm was about two cents per gallon. but that the cost ofthe next step to IS ppm was an additional five cents per gallon. Based on the USEPA'sestimate ofsales of332million gallons of

no. 2oil in NewJersey in 2008.thereduction from 2000ppmto 500ppm would annually cost about $6.6 million dollars to achieve a 75 percent reduction in sulfur content. Thereduction from 500ppmto 15 ppm sulfur
coment standard would cost about $16.6 million dollars per year to achieve an additional 24 percent reduction. The Depanment did not considerthesecosts. (7) 59. COMMENT: The Department's analysis ofcostsoverestimates the real costs to manufacture ultra-low sulfur fuels. The NORA study referenced in the rule proposal (41 N.J.R. at 4J62) stated that it will cost up to 8.9 cents per gallon more to manufacture ultra-low sulfur heating oil than the current high sulfur product. This estimate was made shortly afterthe implementation ofthe Federal ultra-low suifur diesel rules. The study's authoris in the process ofdeciding whether to revisitthe study in light ofthe changed market since the ultra-low suIfur diesel rules went into effect. The real difference in costs associated with the manufacrure of ultra-iow suIfur fuel has not been as great as the NOltA. study anticipated. (8)

60. COMMENT: The Depanment should not adopt the proposed amendments because a mandated ultra-low suifur content standard is costly and not'needed. Distillate fuel with ultra-low suifur content IS already available for those thatwant to use it and pay the additional cost. It is notnecessaryto mandatethat all heatingoil beultra-lowsulfurdiesel
to support such discretionary fuel choices by customer,. Labeling requirements could differentiate among the fuels of differing sulfur
content levels and the fuel-oil providers assistance could occur. The NYSERDA Report supponed this voluntary-type approach. (2, 7. 9. 15. 25) 61. COMMENT:The Depanmentshouldnotadoptthe 500ppm sulfur in fuel standard in 2014 but instead adopt the 15 ppm sulfur in fuel standard as soon as possible. Currently, not many terminals in Nev. Jersey even offer500 ppm fuel. One ofSouth Jersey's largestheating oil suppliers only supplies a fuel meeting a 15 ppm sulfur content standard andhas for thepasttwoyears. (8) 62. COMMENT: The Depanment should not adoptthe 15 porn sulfur
content standard as it is not needed to allow for the of1eration of additional airpollution controls. Ultra-low sulfur fuel (15 ppm) is needed

to enablethe operation ofnitrogen oxides (NOx) and paniculate controls

on highway diesel engines and to avoid "poisoning" the catalyst in the control devices. This is not the case for furnaces and boilers in wbich heating oil will be used. as there are no reqUired control devices iorthese units. (2.6.7,9.15)



### (CITE**~2** '\.J.R.

### 2254) \;EWJERSEY REGISTER.\-lO"'iDA\, SEPTE\1BER20. 201()

### ADOPTJO,\S



### 63. COMMENT: The Department should adopt the proposed 15 ppm sulfur content standard because ultra-Io\\ sulfur content fuel \lill result in increased fuel efficiency and betterheatingsystemperformance.resulting in increased consumer savings. both on system maintenance and reduced fuel costs. This will increase service intervals and decrease fuel consumption. saving the consumer more than the projected three to five cent average difference between the two fuels. (8, 13. 19.11)

64. COMMENT: The Department should adopt the 15 ppm suifur content standard because there currently is little difference in price between ultra-low sulfurfuel and highersulfurfuels, usually only three to five cents. Regardlessofthe costto manufacture the fuel. therehas been a
nearparityin thepriceoffuel oil meetingeitherthe 15 ppm or 1.000ppm sulfur content standard. However, from the fall of 2009 until January 20J

### O. 

### the difference in price for these two fuels has been almost zero and. at times, it has been more expensive to purchase the higher sulfur. 1.000 ppm suifur contentfuel. (8) RESPONSE TO COMMENTS 54 THROUGH 64: The Department's Economic Impact (41 N.J.R. at 4161 and 4163) included an analysis of the costs and benefits associated with both the 500 ppm and 15 ppm sulfur content standards. The Department used a cost estimate from NORA of4.6 cents'pergallon to convert500 ppm sulfur content fuel to a fuel meeting a 15 ppm sulfur content standard. The total cost per gallon to remove suIfur from fuels to meet a sulfur content standard of IS ppm
was J

### 1.4 cents per gallon (6.8 cents plus 4.6 cents equals 11.4 cents per gallon). This maximum cost, discussedin theproposal. is within all ofthe ranges provided by the commenters, and within the range ofall studies done to date on the costs associated with lower sulfurcontentfuels. Using these figures, the Department concluded that the benefits associated with the amendmentsand repeal outweigh the costs.

A review ofthe ElA data indicates that the current cost to remove sulfur from fuel and the current marketplace price are not correlated. Rather, market forces beyond the operational costs of the refineries to

remove sulfur from fuel are currently influencing the price ofultra-Io\\ sulfur diesel (that is. transportation) fuel. The daily price of ultra-low sulfurdiesel transportation fuel was attimes in the past several years less expensivethan heating oil. Usually, the priceoffuels rises and falls with the cost per barrel for crude oil. For several months in early 2010. the relative cost ofgasoline and ultra-low sulfur diesel fuel has not risen or fallen with the cost of a barrel of oi'l. which points to the difficulty in predictingfuture impacts onconsumers.

The NYSERDA Report, on which the Department relied in its EconomicImpact, calculated savings to consumers based on consumption offuel with 500 ppm sulfur compared to 2.500 ppm sulfur. (41 N..I.R. at 4163.) The NYSERDA Report assumed that the consumer would save only one percentfrom an increase in fuel oil efficiency. The savings to 

### a
consumer because ofincreased fuel efficiency. reduced maintenance and less corrosive exhaust gases could be in the three to five cents per gallon range. thereby offsetting the cost ofthe ultra-low sulfur heating oil. The Department relied on the NYSERDA Report for the estimate of cost savings associated with furnace cleaning at a 58-month (approximate!,y five-year) interval. The Department did not base its analysis on a less frequent interval. Because the NYSERDA Report provided figures based

on a500 ppm standard in its cost-benefit analysis. theDepartmentdid not rely on savmgs to home heating oil consumers that would result from a further reduction to 15 ppm. Consumers could potentially save more on avoided cleanings of boilers and furnaces and increased fuel burning efficiency from using. 15 ppm sulfur content fuel; however. there are no data to quantifythese savings. The present cost ofhigh-efficiency condensing furnaces make these furnaces cost prohibitive for some. Because ofthe high sulfur content in fuel oiL resulting in a highly acidic and corrosive condensate. the furnaces must be constructed ofmoreexpensivestainless steel. The widespread availability ofultra-low sulfur fuel for home heating oil**us~** 

### will do awaywith the need for stainless steel construction. making condensing furnaces more economical. and resulting in increased use of such furnaces and significant additional benefit ofultra-low sulfur heating oil

over time. The Department is not aware ofany available data on the rate ofreplacement ofhome furnaces with condensing furnaces or what that rate would be in the future if ultra-low suifur fuel were mandated for home heating purposes. The benefits to the consumer could be greatcr E:'ITI**RO~\·tE:\TAL** 

### PROTECTIO\



### than calculated b: the Department in the rule proposal. The Depan.men showed the benefits from the amendments outweighthe costs. e\en In

### thl absence ofsuch data. For further discussion of existing hl£h-d'liclenc\ condensing furnaces. seethe Response to Comments75 to 85belo\\.

.

The annual average price difference between ultra-low sulfur on-road diesel fuel and home heating oil was t.6 cents in 200'!. (See Tabie 2 above.) On-road diesel fuel and home heating oil are functionalI: interchangeable. (Additional taxes are charged for on-road diesel fuel. precluding the sale of home heating oil as transpon.ation fueL) Thi,

means that it would have cost the homeowner t.6 cents per gallon more in 2009 on average to bu: ultra-low sulfurhome heaung. oil. rather than highersulfuroil. This is much less than the 11.4 cents difference that the Department relied upon in its cost-benefit analys!s. (See 41 N.J.R. al 4163.) The dollar per ton cost ratio for pollutants removed will be tp'eater during the second phaseofreductions to 15 ppm in 1016 than in the Erst phase of reductions to 500 ppm. Nevertheless. the second phase of reductions is still cost-effective. Using the data provided by the commenter. the cost ofreducing the sulfur content in fuel oil from 1.000 ppm to 500 ppm would be $1.866 per ton of reduction ($6.6 miliion divided by 3.536 tons ofsulfur reduced). The cost per ton to reduce the sulfurcontent offuel from 500 ppm to 15 ppm would be**$14.51~** 

### perton ($16.6 million divided by J.]43 tons ofsulfurreduced). The total costto go from 1.000 ppm to the final level of 15 ppm would be $4.679 perton ($13.2 million divided by 4.679 tom ofsulfur reduced). These costs are less than the calculated benefits to health from the NESCAUM study of $20,000 per ton benefit. (See 4] N..I.R. at 4161.) Additional benefit would result from higher efficiency furnaces and reduced cleaning intervals.

The NYSERDA Report suggested a voluntary approach to lowering sulfur content in home heating oil. as Comment 61 recommends. The NY

### SERDA Report predatesthe Federal requirement for ultra-low sulfur fuels in on-road and off-road engines.Accordingly.ultra-low sulfur fuels

were not in widespread use as they are now. The three-year study was begun in 2001. when on-road diesel fuel had a Federally required sulfur content of500 ppm. and the results were reported inJune 2005. The fIrSt Federal milestone year for lowering the sulfur content ofon-road diesel fuel was 2006; 15 ppm low sulfur fuel was not available to be evaluated in the study. Atthe time ofthe study. there wereno other requirements in the United States for ultra-low sulfur fuels that would have made 10\\ 

### sulfuroil at 15 ppm readily available in sufficient supply foruse as home heating fuel by anyone northeastern State. Consequently. the authors could not havepracticallyincluded an evaluation ofultra-low sulfur fuels when the studv started. and could not have included am recommendation;forultra-low sulfurfuels in that report as itwas beyond the scope ofthe study. A voluntary approach was. necessarily. the only option. As to the recommendations for voluntary use of 500 ppm sulfur content fuel. the authors suggested that "state mandates not be enacted until normal market forces expand the use of 10\\ 

### sulfur heating oil without mandatesthat could cause price instability and supply shortages." In this case. the NYSERDA Repon'sauthors werereferring to low sulfu: heating oil as 500 ppm sulfur content fuel. as this was the only fuel available on the market at that time as transpon.ation or diesel fuel. The authors. therefore. were cautioning against individual state action. in light ofthe fact that the Federal re\!ulation to lower sulfurin on-road and off· road fuel had not yet taken effect and 15 ppm sulfurcontent fuel wa,not available in ali areas. The studv doesnot address the casein which man:, states agree to conduct asimultaneous. mandatory lowering offuel sulfur content. such as the MANE-YU stateshave done.

Ne\\ .Jersey and other MANE-Vli 

### states kne\\ of these potential negative economic effects of state-ny-state mandates when MANE-Yl' proposed a lead-time for implementation of the regional agreement and for many states to implement a similar rule along the same limeframe\. The lead-timeensures that industrywi

### II have adequate time to 

### prepare for the adopted standards. Impacton the refinery sector 65. COMMENT: The Department should not adopt the proposed amendments. ThiS proposal, would have economically dcvastaling

NEWJERSEY REGISTER MONDAY. SEPTEMBER20.2010 (CITE 42 N.J.R. 22551

### ENVIRONMEl\TAL PROTECTlO!\

consequences for the petroleum reEning industry. including potel1lial closures of the refinenes. In the case of a relatively small New**Jersc~** refinery that does not process crude oil. its limited processing configuration means it has few. if any. options to produce petroleum products and remain competitive. It is highly unlikely that it could or would make the more than SJ

# on million investmel1l to produce these fuels. Adoption of the proposed 15 ppm sulfur content standard would elimll1ate highly skilledjobs 111 New .Jersey and would not create any offsettingconstructionjobs. (7)

66. COMMENT: The Department should adopt the proposed amendmel1ls. Others have intimated that refineries may close 

### as a result ofhaving to reduce the sulfur contentofhealingoil. Th'eserefineries may well close. but not becauseor these new sulfurin fuel rules. Heatingoil is simply too small a product pool tor refiners to make the big decision on whether to keep a refinery running. In the last generation. the number of 

### U.S. refineries has fallen bv more than half. from 324 in 1981 to 150 in 2008. Yet the total daily

### ~utput of United States refining industry has II1creased from 12.8 million gallons a day in 1981 to l5 million gallons a day today. The decision on whetherornot to operate a marginal refinery will not be made based uponthesulfurcontentofhomeheating oil. (8)

RESPONSE TO COMMENTS 65 AND 66: The Department recognizes that refiners are competing in a very tight marketplace and a few may close due to market forces. including the closing of two area refmenes. one in New Jersey and another in Delaware (Valero). It was recently reported that the former Valero refinery in Delaware City. Delaware. will be re-opened and operated by new owners. PBF Energy Panners. Accordingto a Los AngelesTimes article, theprofitabilityofall refmeries has decreased in recent years due to a variety of factors. induding decreasing gasoline use that is a product of the economic downturn and changing consumer habits and preferences. This has led to the closing of the smaller. less profitable refll1eries. (Ronald D. White. "Oil companies look at permanent refinery cutbacks." Los Angeles Times. March 

### I 

### 1. 2010. http://articles.latimes:com/2010/mar/11

### ibusi~ess/ la-fi-refineriesll-2010marl1: JeffMontgomery. "Brightnew start for old refmery in Delaware City," The News Journal. June 2. 2010, hnp://www.delawareonline.com/article/20I00602/BUSINESS/6020358" GlD=wU5HLs50fC477vDWcAEDj9!sCSelvgYsx2a670S8ZZk%3Dl.

Not all refiners are opposed to the ultra-low sulfur fuel standards. The

new owner of the Delaware refinery stated, "We're going to come out publicly as the first refining company to support low-sulfur heating oiL" The owner expects to spend about $500 million on construction ofa new hydrocarbon treatment system that will help the Delaware plant produce low-sulfur home heating oil. (http://www.delawareonline.corrv·article! 20I00602/BUSINESS/602035S?GID=wU5HLs50fC477yDWcAEDj9/sC SelygYsx2a670S8ZZk%3D.) Similarly. Sunoco Inc.. which has a refinerv in Pennsylval1la. wrote to the Department in support of the 15 ppm standard.

As stated in the .lobs lmpact. the net impact onjobs in this State will beneutral. (SeeJobs lmpact. 41 NJ.R. at4165)The Department expects that NewJersey refineries and otherrefineries that supply products to the State. such as in the Gulf Coast. will employ new workers to manufacture. install and operate the desulfurization equipment at the refineries. NewJersey is also expected to gainjobs in the manufacture of

new. more fuel-efficient oil boilers and furnaces as aresultofthe adopted amendments.

Fuel for out-of-Stateuse

67. COMMENT The Department should clarify the NJ.A.C. 7:27· 9.2(a) so thatthere is no confusion regardingthe intended meaning ofthe regulation as it pertains to fuel oil stored or blended in the Slate. As proposed. it may appear that the phrase "for use in New Jersey" only applies to the "delivered or exchanged in trade" portion ofthe sentence

.. and not to fuel that is "stored. offered for sale, or sold." This would prohibit (albeit unintentionally) the storage, offering for sale. or sale. or biendingoffuel with higher sulfurlevels for sale to users outside ofNew Jersey. To clarify any possible misunderstanding of the intent of the regulallon. the Department should insert a comma in tbe first and second sel1lence, of NJ.A.C. 7:27-9.2(al after the word "trade" and after "jersey." These suggestedmodifications would clarify that therule would 

### ADOPTIOr-,'S

not apply to fuel thai is slOred. oflered for sale. sold. delivered or exchan£ed in trade. and ultimatelv used outsideofl'ieVl .Jersey. (201 RES'PONSE: The amended

### r~le appiies only \0 fuel oil

### ~sed. stored. offered for sale. delivered. exchanf!ed in trade. or sold for ultimate use In the State of New Jersey. The phrase with which the commenter has

concerns is In tbe rule prior to these adopted amendmel1ls. and has not been changed. The Department is not aware ofthe regulated community's having difficulty interpreting the language. andknows of 110 enforcement action concerning the sulfur content of fuel oil stored in New .Jerse\ but intended for use elsewhere. Nevertheless. the Department is modifY1l1g N..lA.C. 7:27-9.2(a) on adoption to add the commas suggested by the
commenter. to ensure that the intended meaning is clear and unambiguous.

­
l inintended consequencesorthe amendments
68. COMMENT: The Department should not adopt the proposed amendments. The amendments will adverselY affect climate change because therefining process to achieve 15 ppm'is more energy-intensl\;e. releases greenhouse gases and increases the carbon footpnnt 

### oC the process. It will raise. rather than lower. greenhouse gas emissions. (7. 9. 

### IS)

69. COMMENT: The Department should not adopt the proposed amendments as they would also increase nitrogen oxide emissions in the

ozone season. (7) 70. COMMENT: The Department should not adopt the proposed amendments because implementing them is less environmentallY friendh than the current sulfur in fuel standards. Extra emissions will

### r~sult**fro~** the construction ofequipment and storage facilities. from re-processll1g off-specification fuel, and from other sources. such as the increased use offuel. (16) 71. COMMENT: The Department should not adopt the proposed amendments because adoption would require the importing ofadditional quantities of distillate fuel into New York harbor. causing additional emissions and environmental impacts from shipping and distribution. in part becauseofthe closure ofregionalrefll1eries. (7) 72. COMMENT: The Department should not adopt the proposed amendments

### as the emission increases at refineries and elsewhere will be only partially offset by the use of newer. higher-efficiency fuel oil furnaces. This is because of the slow tum-over rate in space-heating svstems, which is usuallv a 20- to 25-Year timeframe. Emissions benefit.s v:,ill notaccrue in the

### sh~rt term. (7, 9)' 

### 73. COMMENT: The Department should not adopt the proposed amendments because they will double the amount of carbon dioxide (C02) from a highly efficient refinelJ·. raise nitrogen oxide emissions in thesummertimeby92 tons. increasecarbonmonoxide (CO) emissions b\ 114 IOns peryear. and increase water use hv 75 million f!allons a vear

### ~t the Hess/Hovensa refinery in New Jersey. This would

### a~ualh**i~crease** carbon dioxide emissions at two of

### He~s's refineries bv 

### 1.18'1.000.000 pounds annually and other refineries would have similar increases in emissions. (7) 74. COMMENT: The Department should not adopt the proposed sulfur in fuel standards because these regulations are too stringent and will ultimatelybe counterproductive 10 the goals and intent ofthe sulfur in fuels rulesto loweremissions. (7. 16.25) RESPONSETO COMMENTS 68 THROUGH 74. Although**refinin~** fuels to low sulfur grades requires more energy than refiningfuels to ; sulfur content of 2.000 ppm. the additional greenhouse gas emissions associated with processing can be offset by reductions that accrue from the introduction of more efficient heating equipment made possible 0\ the availability of low sulfur fuel. The Department calculates that longterm reductions in greenhouse gases and other pollutants will more than offset the increase in emissions at the refinery. The Department calculated that. for the same heat output. a traditional home furnace with 80 percent efficiency and consuming 1.000 f!allons of fuel oil annuallY would generate 2.520 pounds o(

### additio~al C02. compared tu condensing furnace with 90 percent efficiency. Existing condensing furnaces achieve an even higher than 90 percel1l fuel effiCiency. so 

### YO percentis aconservativeestimate. The NYSERDA Report indicated fuel efficiencY would increase in existing furnaces by one percent over the heating'season if the sulfu:



### (CITE -12 !\.J.R.2256\ '\EW ,JERSEY REGISTER, '\10NDAY. SEPTE:\1BER20,2010

## T

ADOPTJO\S

contentofheating oil were reduced to 500 ppm from current sulfurin fuel levels of2.500 ppm. (41 

### 1\.J.R. at 4163.) The NYSERDA Report did not C\'aluate the fuel efficiency that would result from using a fuel thatmeets

a 

### 15 ppm sulfurcontent standard. as this fuel was not readily available at the time ofthe study. The authors did indicate that fuel efficiency should increase further with the use ofa fuel that meets a sulfurcontentstandard lower than 500 ppm. but did not quantify what that increase would be. Even conservatively assuming the efficiency of the traditional furnace would increase from 80 to 81 percent by using a 15 ppm sulfur content fuel oil due to less fouling ofthc heat exchanger and consistent with the increase in efficiency from using a 500 ppm sulfur content fuel. the furnace using 15 ppm sulfur content fuel oil will emit 280 fewer pounds ofC02 thanthefurnaceusing2.500 ppm sulfurcontent fuel oil. The Department estimates that the additional C02 generated at a refinery per l.000 gallons of low sulfur fuel oil to meet lower sulfur
content standards is 39 and 35 pounds for 

### IS ppm and 50 ppm fuel
content standards. respectively. The 280 pounds of C02 saved by the

more efficient fuel burning in existing furnaces will more than offset the increasein C02 of39 pounds ofC02 per 1.000 gallonsto achievethe 15 ppm standard. Over the long-tenn. ascondensing furnaces are used more thebenefitswould be substantiallyhigher. The Department does not anticipate that additional emissions will

occurfrom having to ship additional fuel intoNew York harborwhen the sulfur content offuel oil changes. Fuel oil is currently being shipped Into New York harbor and wi1"1 still need to be transported from other sources out-of-state or via pipeline, to meet demand. The overall demand for home heating oi'l is not expected to increase as a result of a change to ultra-low sulfur fuel. Rather. it will decrease becausethe furnaces will bc

more efficient. Also, any short-tenn emission increases due to localized construction activities will be more than offset by long-term regional reductions in sulfurdioxide and particulate. The Depanment also does not anticipate that higher emissions of nitrogen oxides in summer or any other season will occur 

### as a result of the adopted amendments. The process to remove sulfur from fuel also

removes the fuel-bound nitrogen compounds contained in the fuel. The lower fuel-bound nitrogen results in lower emissions of nitrogen oxide when ultra-low sulfur diesel fuel is burned, compared to higher sulfur fuels. Fuel-bound nitrogen wil] be reduced five to 10 percent in 10\\ sulfur fuels. resulting in proportlonately lower nitrogen oxide emissions from combustion of low sulfur fuels ("Low Sulfur Heating Oil: Evaluating the Impact on Consumers:' Consumer Energy Council of America. Bookhart and Zien. September, 2003, page 8, available at http://wv.rv.·.dbrothers.com/pdf/CECALowSulfurWhitePaper9- I2-03.pdf). This reduction in fuel-bound nitrogen. as well as fuel savings due to increased combustion efficiencies. is expected to result in greater reductions in nitrogen oxides during all seasons of the year. including

summer.
Fuel efficiency and condensingfurnaces 75. COMMENT: TheDepartmentneed not adoptthe proposed 15 ppm sulfur content reqUIrement because no study has shown that furnaces require 15 ppm sulfur content fuel oil to operate efficiently. to**wor~** properly. orto enableimproved emission control technology. (7,23.27) 76. COMMENT: TheDepartmentneed not adopt the proposed 15 ppm suifur content requirement because condensing furnaces or other. newer high efficiency fuel oil furnaces such as the Monitor FCX. Peerless Pinnacle, or equipment by the one condensing boiler manufacturer (Viessmann) can operate efficiently on 50 ppm sulfur fuel oiL with some existing condensing furnaces and boilers operating on existing levels of 2.000 ppm sulfur in fuel. These furnaces and boilers can be used toda, without all users incurring the additional cost oflower sulfur fuel. (2. 6. 7.9. 15.23.27) 77. COMMENT:TheDepanmentneed not adopt the proposed 15 ppm suifur content requirement to improve boiler or furnace efficienc:. The reported manufacturer cfflciencies of the high-effiCiency boilers were typically between 85 and 89 percent. with condensing boilers sometimes reporting operations at 9' percent efficiency. Existing high-efficienc:. boilers were reported to have serious drawbacks and limitations. Also. replacement of Q non-condensing boiler with a condensing boiler rna: require replacement ofthe entire heating system and may require side· EI\'\'IRO\"MEl\T-\L PROTECTIO\"

venting. rather than use of the existing vertical chimne\. which mal violal; building codes. Other problems-noted include the'emission or'a "visible plume:' which may cause moisture and nuisance issues. unsuitability ofexisting stacks. incompatibilities ofsharing the staCK with any non-condensing appliances. and drainag.e ofliquid condensate. Even with ultra-low sulfur or 50 ppm fuel. condensing furnaces may not wor\.. in manyapplications in 1\ewJersey sothatprojectedefficiency gainswill
not be realized. The USEPA reports that increasing industrial boiler thennal efficiency from 86 to 92 percent. the typical condensing boiler performance, would only reduce emissions from 85.1 to 79.5 kilograms of C02 per million BTU output. or about l.000 pounds per home. annually. (7)

78. COMMENT: The Department should not adopt the 15 ppm sulfur
content standard in order to get improvements in fucl efficiency in boilers. Ireland and the United Kingdom currently set a mimmum efficiency standard for new boilers at 86 percent without setting a sulfur in fuel standard of 15 or 50 ppm. so no "gain" in fuel efficiency will result from requiring the use oflow sulfur fuel. These countries set the fuel efficiency level at 86 percent so as to nol compel the use of condensingboilers. (7) 79. COMMENT: The Department should not adopt the proposed amendments as their promulgation will lead to less reliable heating systems. lmprovements in fuel efficiency will come at a cost of reliability, because more complex combustion systems require additional maintenance. (7) 80. COMMENT: The Department should not adopt 

### a lower sulfur
content standard for all distillate oil. People can voluntarily purchase and

use an ultra-lowsulfurfuel nowfor use in a condensmgboiler. Giventhe long turn-over time of

### 20 to 25 years for typical boiler replacement, the market would slowly adjust to the increased demand for**ultr~·low** sulfur fuel in condensing boilers if done voluntarily. without requiring all distillatefuel tomeet a lowersulfurcontentstandard. (7) 81. COMMENT: The Department should adopt the proposed amendments as they areneeded to make improvements in fuel efficienc\ and for oil-fired condensing furnaces. While it is true in atechnical sense that ultra-low sulfur fuel is not needed to make an oil-fired condensing furnace work. the newer higher-efficiency equipment is even better served with fuel meeting a 15 ppm sulfur content standard. as the less sulfurin the fuel oil. the better. Less sulfurin fuel will reduce the scaling

on the heating system component parts that adversely impacts heatmg systemefficiency andperformance. (8. 

### 22\ 82. COMMENT: The Department should adopt the proposed J5 ppm sulfur content standard to get improvements in fuel efficiency in boilers The next generation of heating oil equipment will dramatically reduce fuel consumption beyond what industry has already done. This next generation of heating oil equipment will need to run on a fuel with 

### a sulfurcontent well below500 ppm. (8. 13.19) 83. COMMENT: The Depanmenl should adopt the proposed 

### 15 pprr. sulfur content standard for the good of the retail heatmg oil industry Since the rest ofthe distillate pool users will be required to meet the 1
ppm sulfur content standard. there is no reason for heating oil not to be required to meet the 15 ppm standard. too. The retail heatmg oil industry would become the sulfur sink for the rest of the industry. would be provided no benefit. and would be needlessh harnled in its abilitv to be

### ~ompetitively positIOned against otherfossil-fueled heatingsource; (8) 84. COMMENT: The Department should adopt the proposed 15 ppm sulfur content standard to allow for the use in this country 

## 0: high· effIciency. foreign-designed boilers. designed for low-sulfur content fuel

use. If a 15 ppm sulfur content fuel were used. an increased systerr efficiency would result from the introduction in the united States 01 smaller heating systems with lowerfiring rates. Europeanstylewall-hung boilers have not been introduced iii the lJnited States. since their manufacturers require the use offuel with a lower sulfur content than i, currentlv available in the united States. (8. 13. J91 85. COMMENT: The Department should not adopt the proposed 15
ppm sulfur content standard. Consumers who want cleaner fuels or wish tn use a high-efficiency condensing furnace can switch to natural ga'. New

### Jerse\~ has been steadily swit;hing [0 natural gas from fuel oil for thepast**sc~cral** decades and an amplc supplyofnatural gas is available III NewJersey. (7)

(CITE

### 42 T".J.R. 22571 

### NEW JERSEYREGISTER MONOA\,

### SEPTEMBER20. 2010ENVIRONMENTAL PROTECTION



### RESPONSE TO COMMENTS**~5** 

### THRCJlICJH 85 Some exisllng condensino furnaces can operate efficIently on I'uel oil with sulfur al levels higher than the adopted standards. High efticiency. oil-lired condenSing furnaces and boilers. however. are not commonly purchased IOdav bv the average consumer due to their relatively high cust. The Cl'st ofoil-fired condensing furnaces remains prohibitively expensive due to the need for stainless steel or other corro'sion resistent metal parts to accommodate the sulfunc acid effects ofthe existing high sulfur content in fuel oil. Also. the heat exchanger needs to be larger because of the fouling caused by hIgh suifur oil. The suifur in fuel oil. when burned. converts into sulfur oxides. Sulfur oxides readily combine with liquid water in condenSing furnaces to form sulfuric acid. Alow sulfur fuel will eliminate the creation of suifunc acid in the flue gas and eliminate approximately halfofall particulate matter created in the heatexchanger. One source has estimated that the need for stamless steel components in uii-iired condensing furnaces using existing high sulfur oil adds mure than $800,00 to the average price of a new condensing furnace. Using ultra-low sulfur fuel oil will enable manufacturers to use less expensive steel to design less costly. more efficient and smaller appliances. Ifthe
costs to purchase condensing furnaces were lower. more would be purchased and more fuel savings and emissionreductionswould occur.

European manufacturers have developed several models ofcondensing furnaces and boiiers using ultra-low sulfur oil. Germany passed a resolution calling for a maximum sulfur contentin home heatingoil of50 ppm speciiically to foster the use of uil-fired condensing furnaces. It would foliow that IS ppmsulfur fuel will increasethe lifeofthe materials within the furnace. as even lower amounts of sulfuric acid would be formed. Although the Department is not aware ofstudies evaluating. the durability ofmaterials using 50 ppm versus 

### 15 ppm sulfur content fuel, it would make sense that the lower sulfur content fuel would result in the lower formation of sulfuric acid and result in lower deterioration within the furnace. It wouldalso follow that \5 ppm sulfur fuel oil will allow for less costly materials to 

### be used in the design of uil-fired condensing furnaces. The Department anticipates that as more ultra-low sulfur oil is available in the State, more models ofcondensing furnaces and boilers will become available. Increased availability and lower prices will encourage consumersto replaceinefliclent, olderunits with efficient ones thatuse ultra-low sulfur oil. Not all areas of the State have access to natural gas pipelines or supply, so consumers in these areas cannot readily switch frum fuel oil to 

### natural gas. These consumers are left with the option ofspending a large

sum on a Istainless steel) high efftciency furnace. or purchasing a 10Vo 

### effJciency and higheremitting furnace. Some consumers who have access to both oil and natural gas are switching from home heatingoil to natural gas because there are higher-efficiency condensing furnaces available for gas in an accessible price range. The adopted amendments will result in home heating oil having the same sulfur content and sulfur dioxide emissions as natural gas for home heating. Consumers who desire an "environmentally friendly" fuel will have the chuice ofusing distiliate oil

ornatural gas.
Theproposed 500 ppm sulfurstandard

### in 2014 

### 86. COMMENT: The Department should adopt the proposed 500 ppm sulfurin fuel standard effective July J. 

### 2014. (2-4. 7, 9.10. IS. 16,23,25. 27)87. COMMENT The Department should not at this time adopt a suliur in fuel standard that is lowerthan 500 ppm. because staying at the proposed 500 ppm suifur content standard would reduce the capital Investmentnecessary to meet the standard and would make it more likel,· that refiners would make the investments to assure a stable and competitively priced supplyofheatIngoil. (7) 88. COMMENT: The Department should expedite the adoption ofthe 500 ppm sulfur in fuel standard. Tne Department can do this quickly. as the Department has already met the Administrative Procedure Act notice requirements with this rule proposal. Hastening the adoption of this standard meer;; the test of common sense administrative ruJemaking.

serves to meet the goal of stimulatingNew Jersey's econom). improves the qualityoflife. and creates newinvestmentand.lobs. (2) 89. COMMENT: Tne Department should delay the implementation of the 15 ppm sulfur in fuel standard in 2016 (that is. adopt.but not go more \ DOPTJO\'S



### stringent than the 500 rpm sulfur content standard) and seek hroad

consensus on the appropnate level of the second-phase standard that would offer slgntJlcant environmental benefit while prOViding**necessar~** 

### fle;;ibi!ity to the transportation and refining sector. (4. 23) 90. COMMENT: The Department should not adopt a more stringent sulfur content standard for heating oil effective 2016. but rathercontinue the sulfur content standard of 500 ppm, This would provide increased tlexibilily for the supply and distribution system by allOWing elticient disposition ofpipeline interface fromjet w 

### diesel fuel. aionger life ofthe catalysts used in the relining process. and reduced competition WIth transportation for supplies ofhome heating fuel. (27) 91. COMMENT: The Department should adopt the proposed ultimate suifur coment standard of 15 ppm and not stop at the proposed 500 ppm suifur contentstandard. because refiners will be responding (0

### the greater demand for lower sulfur content fuel, anyway. In 2008, residential and commercial heating oil accounted for only ahout 12 percent ofthe total U.S. distillate use. excluding jet fuel (http://tonto.eia.doe.govidnavlQet! peLcons 82\dsLdcUJluS a.htm). Since there will be no other use for number 2 fuel oil meeting the suifur content standard of 500 ppm. no refiner is going to make the significant capital investment based on the small demand ofa largely regional and seasonal fuel to

### produce500 ppm fuel. (8)

92. COMMENT: The Department should adopt the proposed sulfur content standard of500 ppm for distillate oil. Kerosene meeting a sulfur cuntent standard of 400 ppm can be used as a blend stock to enhance distillate heatingoil supplies ifthe sulfurcontent standard were set at

## son ppm. A 500 ppm standard allows for a much greater diversity ofsupply. which can reduce long-term costs and supplydisruptionrisks. (7) RESPONSE TO COMMENTS 86 THROUGH 92: The Department acknowledgesthecommenters' support forthe first phaseofsulfurin fuel reduction to a 500 ppm suifur content fuel in 2014. Staying at a500 prm sulfur in fuel level is notjustified because further reductiun in the sulfur
content of fuel is reasonable. as discussed in the proposal at 41 l\".J.R. 4160. The 15 ppm suifur in fuel limit is appropriate to achievereasonable reductions in sulfur dioxide. based on the overall costs and benefits. The lower limit of 15 ppm is a proven. cost-effective comrol strategy that provides the greatest environmental and health benefits. Maine has already enacted legislation to lower the sulfur content ofdistillate oil to 

### 15 ppm consistentwith the MANE-VU agreement. Otherstates also have pendingactionsto lowerthe homeheatingoil sulfurcontentto IS ppm.

The sulfur content of kerosene for other than motor vehicle use is being lowered as aresult ofthe adopted amendments. See the Response to Comment 5 above for further discussion of the applicability of the adopted amendments to 

### kerosene. Although kerosene will have a standard of400 ppm sulfur content pursuant to Federal regulation. the majorityofkerosene. which is used for spaceheating orothernon-mobile

source uses. would be required to have a sulfur content of 15 ppm. Kerosene with a 400 ppm sulfur content could not he used as a hlend stock tomeetthe need forheating fuel with a 15 ppm sulfurcontent limit. Supportfor the500 ppm standard 

### 93. COMMENT: There is general consensus within all stakeholder communities to support the Department's proposed transitlon rule to 

### a fuel sulfur content standard of 500 ppm effective in 20\4. including among those who would like the Department to adupt a more stringent standard in an even shorter timeframe. Adoption ofthis sulfur content In 

### fuel standard of 500 ppm effective 2014 will establish economic certainties. establish the need for project financing and provide the necessalJ construction lead-time associated with refining. transportation and storage of products required by these rules. It 

### would also coincide well with the Federal requirements for diesel fuel and marine vessels in 2015. (2) 94. COMMENT: If

### the DepaITment adopted only the 500 ppm sulfur
content in fuel standard and did not implement a 15 ppm sulfurcoment in fuel standard. this refiner would save $100 to S; ISO 

### million in capital costsor50 percentless in annual COSts. which is a significant savings. (71 RESPONSE TO COMMENTS 93 AND 94: Although stakeholders have agreed that a lower sulfur in fuel standard is needed or acceptable,
not all stakeholders have agreed on the level ofthe standard orthe timing ofits implementation. Some have commented that earlierimplementation

(CITE**~2** '\.J.R.2251.;) :'\EWJERSEY REGISTER.\IO:\DA\, SEPTE\1BER20,2010ADOPTIO:\S



### or a 15 ppm suifur content in fuel standard is both practicable and

necessan. The Depanment'sanal)si, shows that 15

### ppm sulfur in fuel standard i, cost-effective. as discussed in the Economic lmpact. 41 KlR. at 4162. The Depanmenthas detennined that all earlierimplementation date j,

### not appropriate. as discussed in the Response to Comments 10i 

### through 112 beloVl. The Department', analysis funher shows that the capital savings from not implementing the second phase ofsulfurin fuel oil reductions to
J

### 5ppm are lowerthan the benefit, to society ofthe 15 ppm standard. For funher discussion of the capital costs and societal benefits. see the Economic Impact (41 N.J.R. at4162).

The

### sulfurin fuel levels for residual fuel oil 95. COMMEl\T: The Department should not adopt the proposed sulfur content standard for residual fuel oil of0.5 percent (5.000 ppm), because Europe. and maybe Canada. will have standards for these fuels at 

# La percent (l0.000 ppm). Refiners do not make extremely low sulfur residual fuels unless it is economical to use very 10Vl sulfur crude oil because they would lose monev on the fuel. Thus. refiners will not invest

to 

### make a

### I~wer residual fuel 'oil that meets a sulfur specification of0.5 percent when they cannot export the product to Europe or Canada. They may invest instead to make the lighter distillates out ofthe distillate fuel. (3)

### 96. COMMENT: The Department should adopt the proposed amendments to 

### lowerthe sulfur content ofresidual fuei oil to 5.000 ppm
or less. (5.8.12,21,22.24) RESPONSE TO COMMENTS 95 AND 96: The Department acknowledges the commenter's support for the proposed sulfur content standard of5.000 ppm for residual fuel oils by 2014. for those counties for which there is not alreadv a lower sulfur content in fuel standard. While a 10.000 ppm

### residu~1 fuels sulfur content standard may be acceptable for parts of Europe or Canada. New Jersey has had a lower standard in its urban counties for many years. The adopted amendments lower the sulfur content standard for residual fuel oil to 

### 5.000 ppm in

some counties in NewJersey. The residual fuel oil sold in the remaining counties remains unchanged if the county already has a residual fuel sulfurcontent standard of3.000ppm or5,000 ppm. Fuels with asulfurcontent meetingthe adopted standards are current!) available in the marketplace. Hence. asulfur content standard of3.000to 5.000 ppm for residua] fuel is feasible. The Depanment's analysis at 41 1'\

### .lR. 4163 shows that the average price difference between J

### 0.000 and 5.000 ppm sulfur content residual fuel oil was 5.05 cents per gallon. A regionally consistentsulfurcontent standard forresidual oils will improve themarketfor this fuel oil. Other countries. such as parts of Europe and Canada. with higher residual fuel sulfur content standards than these adopted by New Jerse)

are considering lowering the sulfur content of these residual fuels. as well. Regardless of whether these countries lower their sulfur content standard-for residual fuels. and depending on the economics ofthe timc. because NewJersev's sulfur standards forresidual fuel are more stringent than those of

### thes~ other countries. residual fuels meeting New Jersey's sulfur content standards could be exported to those countries. Lower sulfurcontentresidual fuel meetingNewJersey's standards could also be blended with higher sulfur reSidual oil to make a fuel for expon near the sulfurcontent standardsofthe receiving country. Options for meeting ornot meetin!!:the 5.000 

### ppm sulfurin residual fuel lenl 97. COMMENT: The Department should not adopt the proposed sulfur in fuel standard for residual oil (numbers 5 and 6) of0.5 percent (5.000 ppm). as it would leave NewJersey refiners with no viable option otherthan exportofhigher sulfurresidual oil. (3)



### 98. COMMENT: The Department should not adopt the proposed sulfur in fuel standard for residual oil 01'0.5 percent 15.000 ppm) because removing sulfur from residual fuels is technologically difficult. ver) costh. ';;1d lIsually economicalI) 

### prohibitive. As a result. refiners may upgr;de heavy fuel oils to lighter distillates. such as highway diesel fuel

or home heatim! oil. instead ofInvesting the capital to desulfunze heavy fuel oil. Dilution through blending

### i~ not a viable option as other properties ofthe fuel oil. like densit). flash point and viscosity. may be E\;\IRON:\1E\TALPROTECTlO\



### arrected. in which case the fuel would be considered to 

### k ofT· specification. Also. dilution \vould s\\ell the volumeofresidual fuel oil to

a level that far exceeds the size ofthe market. making export the onh viable option. (3)

99. COMMENT: The Depanment should not adopt the proposed sulfur in fuel standard for residual oil of 0.5 percent (5.001l ppm). Blendinghigh-valueddistillatefuel with low-valuedresidual fuel \0 

### meet the sulfur in fuel specification will result in greater supply-demand tightness inthe heatingoil and transportation diesel market. (3)



### - 100. COMMENT:-The Depanment should not adopt the proposed sulfur in fuel standard for residual oil of 0.5 percent (5.000 ppm). Residual fuel oil use has declined steeply and reducing the sulfurcontent of this fuel does not appear to 

### be a control measure that would be effective in helping the State attain the national health standard for PM,.'. 

### particularlyin the long run (3) 

### 101. COMMENT: The Department should not adopt the proposed sulfur in fuel standard for residual oil of0.5 percent (5,000ppm) as it did not provide sufficient information to 

### support adopting this standard and additional review is needed for feasibility and cost analysis. (7) 

### RESPONSE TO COMMENTS 97 

### THROUGH 101 Refiners are currently providing residual fuel oil with a 3.000 ppm and 5.000 ppm sulfur content for sale in several counties in NewJersey, as this has been the sulfurin fuel standard for those counties since 1982. The MANE-VU states chose the 5.000 ppm residual fuel oil standard for a regtonally consistent level to reasonably reduce sulfur dioxide emissions from thi, fuel. TheDepanment'sanalysis at 41 N.J.R 4163 shows that the average price difference between 10.000 and 5.000 ppm sulfur content residual fuel oil was 5.05 cents per gaHon. Inasmuch as actual figures for theprice difference among various residual fuels are currently available. astud\ to 

### determine future-costs is not needed. The actual pricedifference between the purchase price of 10.000 ppm and 5.000 ppm residual fuel can be used to determine future costs to affected panies.

The adopted amendments allow the use ofresidual oil with sulfur in

excess of5,000ppm.provided sulfur dioxide emissionrates in Tables 2A and 2B are met. Emission rates will depend on the useofcontrol devices. such as an acid-gas scrubber. In addition. viableoptions exist to

### lowerthe sulfur content of residual oil and still maintain fuel oil specifications. These include reprocessing the residual oil to remove more sulfur and blending lower sulfur residual oi1 with higher sulfurresidua] oil to 

### meet the 5,000ppm limit.

The use ofresidual oil use has declined nationally due to a variety or factors. including ease of use and environmental considerations. The Depanmenl has adequately evaluated and justified the lowering ofthe sulfur content ofresidual oil. as reflected at 4J 

### N.J.R. 4160 and 4163. The reasons for lowering the sulfur content standard for residual fuel to 5.000 ppm include

### co~sistency with the MANE-VU agreement and regional haze goals. attainment of the ftne particulate NAAQS. attainment ofthe ozone NAAQS. and maintenance ofthe existing sulfm dioxideNAAQS A 

### market for off-specification residual oil. above a 5.000 ppm sulfur content standard. exists in the marine vessel market. New Jersey. being 

### a coastal state. has alarge market for bunker or marIne vessel fuel oil**tha~** 

### is mainly residual oil-Ocean-going marine vessels. located in the ocean and away from the United States and Canadian coast. wili 

### still be able to 

### be use

### r~sidual fuel oil with asulfurcontent greaterthan 5,000 ppm. 102. COMMENT: The Depanment should propose more stringent sulfur standards for residual oil in Zones 

### 3, -1 

### and 

### 6 than it has in thi, proposed rulemaking. These areas of the State are monitonng exceedances of the Federal paniculate standard. Adoption of a mort stringent sulfurin fuel standard of500 ppm would result In 

### the accrual of additional emission reductions. doubling the emissions savings and pubilc health benefits. (13. 19)

RESPONSE: New Jersev alread\ has requirements for the lowest levels ofsulfur in number 5'and

### hea~ier residual fuel oil at 3.000ppm

### I~ Zones 3. 4 and 6 and has not proposed a change to these sulfur In 

### fue: Emits. The Depanment detennined that a 

### 5.000 ppm sulfur in residu8! fuel \evel for all other counties not already having a 

### 3.000 ppm sulfur content standard in residual fuel oil is a reasonable regional control

measure. as discussed in the proposal at 4J NJ.R. 

### 4160 and 4163.**Th~** 

### Depanment has not evaluated**rel~oving** 

### sulfur from residual fuel oil to a



### (CITE42 /o\.J.R.2259! NEW

### JERSEY REGISTER. MONDAY,

### SEPTEMBER20. 2UIOENVIRONMENTAL PROTECTION



### lower level. The Depanment will conllnue to monitor New Jersey's air quality to detemline if further measures are.needed [() attaIn the fine paITlculate and sulfur dioxide health standards In 

### New Jersey. 103. COMMENT The Depanment should not adopt the proposed sulfur coment standard for residual oil of 0.5 percent (5.000 ppm) as adoption ofsuch a stringent standard willleave refineries with no viable oDlions for dIsposition of these fuels other than lor expon. The [iepanment should adopt instead a suIfur content standard of7.000 ppm for residual oil Iw 

### 2014. as this still represents a significant sulfur In 

### luel reduction from

### t~da\··s levels. This level would provide l1exibilny in the Northeastern United States fuel market and would only marginally increase the need to exportthese fuels. This level should be set by all the MANE-

### Vl' states bv 20l4. unless a sulfur content standard ofless than 7.000 ppm has

### ajre~dy been established. In 

### which case the lower level should be maintained. (3)

RESPONSE: Adoption ofaresidual fuel oil sulfur content standard of 7.000 ppm sulfur level would be inconsistent with the MANE-VU 

### agreement and the sulfur content standards recently established legislativeiv bv Maine. A market does and Will 

### eXIst for reSIdual fuel

### m~eting a' S.l)OO ppm sulfur content standard. as discussed in the Response [() Comments97 through 101. Sell-through 104 COMMENT: The Depanment should adopt the proposed "sellthrough" provisions at N.J.A.C. 7:27-9.2(a) and (b). This would allow fuel oil that was already sold orstored in the State. and that met the suifur in fuel standard in effect at the time ofsale, to be used-up. rather than madeto meetthe new lower sulfurcontent standards. (5, 9) 105. COMMENT: The Department should not adopt the proposed "sell-through" provisions at 

### N.J.A.C. 7:27-9.2(a) and (b). These Drovisions would allow the compliance deadline to be dragged out and

### ~ould provide industry an opportunity to intentionally use non-compliant fuel beyond the six-year lead-time already afforded it by the rules. (13. 19)RESPONSE TO COMMENTS 104 AND 105: These sell-through provisions are needed to avoid potentially severe negative economic consequences to the regulated community, such as the Northeast HeatIng Oil Reserve run bv the U.S. DepanmentofEnergy. The Depanment also wishes to avoid 'potential enforcement issues with persons. mcluding individual home owners. purchasing: compliant fuel priorto thedeadlmes.

as listed in Table 1B. and having that higher sulfur fuel in their possession after the Implementation date of the lower sulfur fuel standards.

Fuel oil does not have an infmite storage-life, meaning that fuel oil will degrade and become unusable with time. It must be timely used or become useless to its owner. Therefore. industry would not intentionally purchase higher sulfur content oil prior to implementation ofthe lower suifur content standards to have ample supplies of the higher suIfur
content oil for long-term use. New fuel oil meeting the lowest sulfur in fuel standards will eventually be purchased to replace the existing stocks and the full benefitto air quality will be seen over time. 106. COMMENT: The Department should not adopt the proposed amendments and repeal because it will be extremely costly to the Northeast**Heatin~** 

### Oil Reserve. as the fuel in the reserve currently does not meeteither th-e 15 ppm or500 ppm standard. Without this fuel stored

In 

### the reserve. there is an increased threat ofprice spikes and prolonged heating oil shortages. (7)

RESPONSE: The Department recognizes that the new. lower sulfur content standards will apply to fuel in the Northeast Heatmg Oil Reserve and that the lower sulfur content fuel may cost more. However. the adopted sell-through provisions allow the Northeast Heating Oil Reserve to reDlace the fuel stored mthe reserve as partofthe normal replacement schedule. A representative of the United States Depanmem of Energy mOE). the

### F~deral agency that runs the reserve. indicated to the Depanment that the DOE sells all of the fuel In 

### the reserve at

### a set schedule and replaces It With "fresh" fuel. The sell-through prOVISions allow the DOE to 

### keep the non-compliant fuel in the reserve until its nonnal replacement schedule. at which time the non-compliant f'uel will be replaced with compliant fuel. The cost for the DOE to purchase replacement fuel was inc1.uded in the Depanment's Economic Impact 

### -\DOI'TIOI\;S

clllalvsis. since cenam percent of the reserve IS 

### replaced amlUal1;' tc'

### mail~tain the reserve's readiness. The cOSt to replace the

### fu~1 would be Ir, the total Statewide fuel usage ligures in the Economic Impactat 

### 41 J'.:.J.R. -1163. This analysis showed that the adoption of the amendments will have a positiv'e benelit to New Jersey. The Depanmem would characterize the resulting cost increase to 

### the Nonheast Heating Oil 

### Reserve to be slight. rather than extremely costlv. Timingofthe implementationofthe sulfurcontent standards

A 

### shortertimeframe for impleme.ntation is

### needed 107. COMMENT: The Department should nOl adopt the proposed 2016 implementation deadline for the 15 ppm suifur content standard. Instead. the Department should shonen the timeframe to 

### two years or earlier than the proposed 2016 date so that fuel oil would be reqUired to 

### meet the 

### IS ppm sulfur in fuel standard by 2014. by .Iune 

### 2012. or 

### h; 20II. 

### because ofthe extremely positive benefits that would result. This would result in earlier realization ofemission reductions and aIr qualil) benefits. (8.13.19.22) 108. COMMENT: The Depanment should amend the rules on adoption to eliminate altogether the step to a sulfur content standard of 500 ppm, as this standard will be rendered moot by market conditions well before 2014. Instead. the Depanment should implement a 15 

### ppm sulfurin fuel standard effective 2014 orearlier. (8) 109. COMMENT: The Depanment should not adopt the proposed timing for implementation, because New Jersey's Legislature and the legislatures of some other states, such as New York. are considenng: legislation that would enact earlier implementation dates for a sulfur c;ntent standard of 15 ppm suifur for fuel oil. such as 20II. 

### These bilis also create standards in fuel oil. regulating the amounts ofcarbon in fuel and requiring fuels to have a bio-fuels component. New Jersey should followthe lead ofthese states. (8. 13. 19) 110. COMMENT: The Department should adopt the proposed 15 

### ppm sulfurin fuel standard effective in June 2012,because\[ would also better coincide with the timing ofimplementation for the Fedcral standards for fuel used in marinevessels, locomotives and fann equipment.03. 19) Ill. COMMENT: If the Department were to accelerate the implementation ofthe first phase ofthe proposed schedule to lower the sulfur in fuels standard, it would produce supply hardships In 

### the marketplace, with the potential for disruptive price spikes In 

### the short
term. (4) 

### 112. COMMENT: The Department shouid not provide the lead-tIme given to the refineries by the proposed phased-in implementation ofthe

new sulfur fuel content standards beginning in 2014. Industry has not made avalid argument for such a long lead-time and is being afforded an eight-vear lead.:time, far exceeding the average lead-time for industry to 

### c;mplywith new regulatory standards. (13. 19i RESPONSE TO COMMENTS 107 THROUGH 112 An earlier implementation date for the 15 ppm standard is nol practicable for the entireregion. The HartStudyanalyzed the ability ofthe refinersto almost immediately begin supplying the entire market. including the home heatingoil sector. with ultra-low sulfurfuel. The study concluded that the regional demand for ultra-low su1fur fuel could not be met without an

### in~rease in the ability ofrefiners to desulfurize fuel. which would take time to accomplish. The Depanmentis persuaded by this and other earlier studies. as discussed in the proposal at 41 N.J.R. 4160. The Depanment discussed the possibility of an earlier implementation date of2012 with the refmers. consistent with the signed MANE-VC 

### agreement. and concluded that successful implementation ofthe proposed new standards requires a lead-time of four years. The Department is. therefore.

### pr~viding a four-year lead-time to implement the first phase ofsulfur In 

### fuel reductions. Although there could be added environmental benefit lO 

### implementing the lowe;suifur content standards sooner. the lead-lime IS

### ne~ded to allow for installation ofadequate capacny at 

### the reiinenes to


### remove sulfur from distillate and residual oils. avoid price spikes. and avoid disruptions to the supply and distribution network. Phasing In 

### the

more stringent standards by staning with a reduction ofthe standard tl' 50(1 ppm is reasonable to 

### ease the transItion to the 15 

### ppm standard in 

### 2016. panicularly as this lowenng of the suifur content is expected to 

### take place overalarge region ofthe northeastem United Slates.

(CITE**~2** :\.J.R. 22601 :\EWJERSEY REGISTER, \10NDAY, SEPTEylBER20, 2010

### ADOPTJO!\S E\'VIRO!\\1E\TALPROTEC.TIO\



### As discussed in the Response to Comment 23 above. expanding the capacity to avoid disruptions in supply. lC1 

### prevent potential**shonag~,** 

### or scope ofthe sulfur in fuels amendments beyond what was already agreed distillate fuel oi!. and commensurate price spikes and costincreases in the
to 

### by the MANE-VU states to 

### include ablo-fuels component or a carhon home heating oil and**distillal~** 

### market. content fue'l standard would delay implementation ofthe sulfur in fuel standard in Ne'" Jersey and throughout the region. The Department does not wish to 

### delay the suifur dioxide emissions reduction benefits ofthe amendments. Further. timely promulgation ofthese amendments pro\'ide the otherMANE-VU states the assurance thai New Jersey will implement

a lower sulfur content standard, and will provide refmers with ample lead-time to comply with the proposed rule amendments. Any delay would shorten the lead-time provided to the reiineries and to the marketplace. The Department will not. therefore. withdraw or repropose the amendments. but will consider the issues ofcarbon content and hiofuels separately.

Thedate for implementation ofthe amended standards 

### 113. COMMENT: The proposed implementation ofthe first phase of the sulfur in fuel reductions in 2014 would give refiners of fuel oil the lead-time that they need. The refining industry needs at least a three to 

### four-year lead-time. or until 20\4. to implement this rulemaking. This lead-time is needed to 

### be able to complete capital projects and mvestments necessitated by a new standard and for the marketplace to avoid price spikes and for completion of the project phases. include planning. engineering. permitting.procurement. construction and stan-up. The proposed time frames for implementation (that is. 2014 and 20I6) 

### provide sufficiem lead-time to complywith the new standards. (2. 4. 5. 7. 

### 10. 15.27) 114. COMMENT: The Department should not implement the proposed 15 ppm sulfur content standards until 201

### Sat the earliest. as it should evaluate the market's response to the first reduction (effective 2014). and ensure more reliable capability across the regional suppl) chain. (2.15.16.23) 115. COMMENT: The Department should adopt the proposed 2014 implementation date as it is adequate to avoid marketplace disruption. The Department should provide this adequate lead-time and certainty to allow the marketplace to adjust to the lower sulfurrequirements without disruptive price spii-.es. (4)

RESPONSE TO COMMENTS 113 THROUGH 115: The Department has determined. based on its discussions with the refIners. that a three- to four-year lead-time is needed for the regulated community to implement the first phase of the reductions in sulfur content. Current studies. including the February 2010 Hart Study. indicate that immediate implementation (by 201 I)

### ofan ultra-low sulfurin fuel standard for home heating fuel would lead to price spikes and economic disruption of the marketplace Specifically the Hart Study states. "Given the tight market outlook. higher market premiums. 20 to 30 cents per gallon. should be expected to prevail. until additional desulfuri=alion capacln' can he brough! on line." 

### (emphasis added! (Han Study. page 24). Given the scope of the amendments to remove sulfur from the remaining fuel stream. a four-year lead-tune is reasonahle to implement the design. engineenng. and construction work to add additional desulfurization capacity

.

The Department has determined that four years is adequate advance nOllce for areduction to 500 ppm fuel. Another four years is not required for refInenes to implement the 15 ppm sulfur in fuel standard. The total ofsix years for the 15 

### ppm fuel to take effect (an additional two years from 2014) is reasonahle for phasing in the 15 ppm fuel standard 111 

### the innerzone MANE-VU states.

The Department did not extend the 2016 final deadlineto comply with the 15 

### ppm sulfur in fuel standard and is not changing the le\'el ofthe final standard of 15 

### ppm sulfur content distillate oil in 2016. The Department proposed to phase in these ne\\ slandards by implementing

an initial step ofa 500 ppm sulfur content standard in 2014 as an interim

measure to 

### achieve the final goal of a 15 pplll standard in 2016. The Department's reasons for a transition step to a 500 ppm sulfur content distillate oil iI, 

### 2014 were discussed in the proposal Summar). (41 N.J.R. at 4160) As stated at 41 NJ.R. 4160. the Department chose to phase in these requirements in order

..to 

### ensure sufficient time for production and dlstrihution of lower sulfur fuel oil." The Department recognizes that refiner, needed enough lead-time to install sufficient desulfurizatlon Extensions!variances 

### 116. COMMENT: The Department should amend the rules to allo\\ smaller refineries a**on~-** 

### to \\\'(I-year extension ofthe effective date ofthe proposed 500 ppm sulfur in fuels standard. (7) RESPONSE: The Department did not extend the deadhne for sma11 refineries to comply with the 500 ppm sulfur in fuels standard. To do so would place larger refineries at a competitive disadvantage. Smaller refineries whose owners have already made the capital investment to 

### add extra capacity to remove sulfur from fuel would also be placed at a disadvantage. The Department wishes to avoid this situation and did not extend the deadlinebased on the sizeofthe refiner) producing fuel. 11

### i. COMMENT: The Department should amend the rules to issue a temporary waiver ofthe sulfur in fuel standards. allowing the refiner) to producehigh sulfur numher 2 fuel oil until the next scheduled closlllg of the facility for maintenance (also known as a ··tum-around"). At a minimum. the Department should allo\\ in-State refmeries with a turnaround scheduled within one year of July 1. 

### 20J4. to comply with the current standard. as opposed to

### the 500 ppm sulfur contentstandard. until restart after a tum-around. Currently. one refinery has a planned turnaround III

### the 2015 time-frame. The timingofthe proposed operative date of the new standards will necessitate two facility shut-downs. which is extremely costly and may result in increased airemissions.An extra shutdown would mean that the entire refinery would be shut-down for one week and cost in the low millions ofdollars. Allowingrefiners additional time within which to comply with the new standards would require the tracking of high sulfur distillate fuel down-stream to ensure that only those refineries with waivers produce and distribute the otherwise noncompliant fuel. Chain ofcustody requirements for all downstream users. similar to 

### the requirements of USEPA"s Tier 

### II LOI\ Sulfur Gasoline program. couldbe implemented. (7) RESPONSE: The Department desires to implementthe standards with the least disruption to the market as possible. and to avoid refineries' having to undergo two shutdowns within ayear. However. the requested modification is too substantial to make on adoption.**Therefor~.** 

### in a separate rulemaking the Department will propose an amendmenl to the rule to extend the deadline for compliance to meet the interim July 1. 

### 2014 suifur in fuel standard (500 ppm) for up to one year. The amendment would allow a qualifying refinery to contlllucto sell fuel oil that does not meet the July 1. 

### 2014 standard. and others to continue to "store. afTer for sale. sell. deliver or exchange in trade for use In 

### Ne'" Jersey" otherwise non-complying fuel from thatrefinery. (NJ.A.C. 7:27. 9.2(a).) Similarly. persons could use otherwise non-complying fuel from that qualifying refinery. (N.J.A.C. 7:27-9.2(b).1 The extenSIOn would apply to

### aqualifylllg refinery in any state. IJ

### 8. 

### COMMENT: The Department should amend N.JAC. 7:27-9 to provide for a variance to meet alternative sulfur content standards on a case-by-case baSIS. iI' 

### fuel that meets the more stringent suifur contelll standards becomes unavailable. This would provide an**approprlat~** 

### compliance mechanism in the event ofsupply disruptions. or ifsupplies fall short offorecasts in tenns ofquantities. liming. geographic location.

orotherfactors. (12) RESPONSE: There is no need to

### amend the sulfurin fuels rules at this time to handle transient or emergency situations thai result in the unavailahility of fuel oil. The Department does not envision future shortages or'fuel. since sufiicient

### ti~e is provided for adequate supplies and refilling capacity to 

### provide ultra-low sulfur fuel to the marketplace. This is evidenced hy the currently available supplies ofultra-low sulfur fuel (www.eia.!!ov). slUdies ofthe future supplIes ofultra-low sulfur fuel at 41 N.J.R. 4162. and the comments offered in response to 

### this rule proposal thatadequate lead-time will ensure !lme!)' compliance:. 119. COMMENT: The Department should amend NJ.A.C. 7:27-9 l(I 

### allow' for other averaging times for the proposed sulfur dioxide emiSSion standards. In the proposed Tables 2A and 2B. the emiSSion limits arc expressed in pounds per miliion British Thermal Units (lhs1mmBTlIl However. no averaging period is specified for the Ih/mmBTl' sulfur

NEWJERSE'l REGISTER. MONDAY. SEPTEMllER20.20](1 

### (C!TE42 "'.J.R.

### 2261 iEI\'VIRONME!'iTALI'ROTECTlOi\

dioxide emission standard, The rules should be amended to specify an averaging period that is no shorterthan one calendarday. (121

. . RESPONSE: Specific averaging time periods are not specllled m the previous. or**adopt~d** revisions**t~.** i;.J.A.C. 7:27-9. Where arule does not specify an averaging lime. amaximum one-houremiSSion rate IS typically used. along with 

### a corresponding stack testmg**met~od** andreqUIrement. The appropriate averaging time is speCified dunngtne perrnlnmg pr0cess based on a case-byccase review for any control deVice proposed to comply with these alternate provisions. The USEPA's new one-hour sulfur dioxide NAAQS reinforces the use of a one-hour averagmg ume for S02emission limits. 120. COMMENT: The Department should amend N.J.A.C. 7:27-9 to allow for other sulfur dioxide emission limits during transient periods of operation. such as start-up and shutdown periods. Forsourcesthai choose
to use suifur dioxide emission controls to meet the requirements of kJ.A.C. 7:27·Q instead of the sulfur in fuel coment standards. the Department should provide reasonable exemptions from the sulfur dioxide emission limits dunng unit start-up. shutdown or other transient periods. (12) RESPONSE: The Department provides provisions for start-up. shutdown, or other transient periods under the Title V perrmltmg provisions at N.J.A.C. 7:27-22.6(i). The Depanment will consider provisions for these transient periods during the permitting process lor
any proposed control device.

The 15 ppm suifurin disriliate fuei standard
l21 COMMENT: The Department should adopt the proposed 2016 sulfur content standard of l5 ppm. Refiners currently consistently produce ultra-low sulfur diesel fuel at seven ppm with few. if any, mistakes that would cause there to be a large amount of off-spec fuel. Refmers can consistently make heating oil to the ultra-low or 15 ppm standard. (8) 122. COMMENT: The Depanment should notadoptthe proposed step from 

### a sulfur content standard for distillate fuel of500 ppm to a sulfur
content standard of 15 ppm because. in the case ofunexpected operating problems. a refinery's only alternative may be to reduce throughput or shutdown some ponionofthe refinery operations. (2. l5. 27) 123. COMMENT: The Department should notadopttheproposed step from a sulfur content standard for distiliate fuel of500 ppm to a sulfur
content standard of 15 ppm because having an outlet for fuels meeting a 500ppm sulfur contentstandardcan preventevenlargerimpacts on other products. including loss of gasoline. jet fuel and transponatlon dIesel production. (271 124 COMMENT: The Depanmentshouldnotadoptthe l5 ppm sulfur in distiliate fuel standard because the existence ofmultiple sources of distillate in the region is likely to cause exceedances ofthe sulfur in fuel standards.A sudden catalyst breakthrough in manufacturing will result In small sulfur spikes. Any ofseveral complications would require ongoing reprocessing. resulting in several inefficiencies. increased costs

.. and limited supply across an already constrained manufacturing and lOgIstiCS channels. (23) 125. COMMENT: The Department should adopt the proposed amendments to lower the sulfur contentofdistillate fuel oil to 15 ppm by 2016orearlier (5.8. 12.21. 22. 24) RESPONSE TO COMMENTS 121 THROUGH 125: The Department acknowledges the support for the sulfur content standard of 15 ppm for distillate fuel b\ 2016. Ultra-low sulfur fuel can be made**consistentl~** \,vith small

### amo~nts of

### off·spe~ fuel thatwouldneed to be re-refined. The refiners' experience ofoperating their refmeries with minimal operatmg issues after implementation ofthe Federal rules to loweron-road and offroad diesel fuel proves that the \5 ppm sulfurcontentin fuei standard can be successfulI'. met with little disruption to refinery operations. [f an operational

### iss~e does anse. the refiners have the option to blend the offspec fuel into fuel used in the marine vessel market. or reprocessmg the fuel to meet thr more stringent standards. Also. until all outer zone. MANE-VLJ stales lower the

### ~ulfur content ofdistillate fuel to 15 ppm in 2018. off-spec 15 ppm dIstillate oil could be sold In those states. or blended WIth higher sulfur fuel to meet a 500 ppm sulfurin fuel standard.

as these states ;1ay stiil be allowmg a 500 ppm distillate fuel sulfur level until 2018. .\,.[)OPTJO\S

A :'ill ppm sulfurcontentin distillate fuel standard is needed
126. COMMENT: The Depanment should not adopt the IS ppm sulfur in distiIlate fuel standard. but should sel the second phase ofthe reduclJon of sulfur in fuel [(1 50 ppm or a more reasonable standard. if the State does moveto a sulfurcontent slandard more stringent than 500 ppm.This will ensure that fuel that does not meet the Federal ultra-low sulfur reauirements for diesel fuel can be placed Into an allowable. though lin;ited. cost-effectivemarket. (2.6.7. 

### IS. 16.23. 25) 127. COMMENT: The Department should not adopt the proposed 15
ppm sulfur content standard, but should instead repropose a SO ppm standard for distillate oil. Even a 50 ppm standard would impose a lesser burden than a \5 ppm standard. While it would nOI reduce the capital expenditure needed to produce the fuel. it would significantly reduce refinerv o[1erating costs and waste generation as the' catalyst would need
to be

### ·ch~nged less frequently. The catalyst would

### onl~ need to be changed everv two orthree vears.rather than annually. savingonerefiner $2 million

### pe~ year and anotherbetween $0.6 and $l million. (7) 128. COMMENT: Instead of adopting the proposed sulfur content standard of [5 ppm for the second phase ofsulfur in fuel reductions. the Department should stay at 500 ppm and propose a different. less stringent level. such as 50 ppm. This could save the refining industry a lot of

monev compared to adoption ofa suifur content standard of 15 ppm. The refin;ry operating costs are significantly lower with 

### a 500 ppm sulfur
content standard than a \ 5 ppm sulfur content standard for three primaf)

reasons: longer catalyst life. lower hydrogen consumption. and product downgrade capability. Shutdowns for catalyst change-out results In lost economicopportunity. (2.7.23.27) 129. COMMENT: The Depanment should not adopt the proposed amendments and repeal but should instead adopt a 50 ppm sulfur in fuel level. 

### [I' the Department did adopt the rule With a 50 ppm sulfur in fuel standard. the same reasons that support maintaining a 500 ppm standard would still be applicable to this standard. but to some lesser degree. These reasons include having more markets to selI the fuel and greater ability to place ofT-specification fuel. (27) RESPONSE TO COMMENTS l26 THROUGH 129: The Department evaluated the 50 ppm sulfur content standard versus the IS ppm sulfur
content standard and determined that the 15 ppm sulfur content standard ismore appropriate for the following reasons.

The l5 ppm sulfur content standard is consistent with the MANE-VU agreement. with the recently passed legislation in Maine. New York and (onnecticut. and withthe Federal regulations for suIfur content in on and ofT-road diesel fuel. The Depanment will gain additional Statewide reductions in sulfurdioxide from adopting a 15 ppm sulfurcontent in fuel standard. rather than a 50 ppm sulfur in fuel standard. The Depanment estimates that a 96 ton per year reduction in suIfur dioxide will occur annually from using a 15 ppm sulfur content fuel. rather than a 50 ppm fuel. More reductions in the ambient air leveis of sulfur dioxide and particulate will occur ifsurrounding MANE-

### Vll States also adopt the 15 ppm sulfurin distillatefuel standard. The \5 ppm suIfur content standard is consistent with the Federal Clean Air Act requirement to adopt reasonable measures for regional haze and fine paniculate. as discussed in the proposal Summary. (41 N.J.R. at 4159.) New Jersey, by adopting the standard at 15 ppm. is carrying out the Federal requirement to adopt all air pollution control

measures determined to be reasonable. A l5 ppm suifur content fuel may lead to new. more cost-effective desiQ'ns of high efficiency condensing boilers or furnaces, reducing

### poll~tion and increasingfuel efficiency. One trade groupnotedthatsulfur in fuel oil was the "real obstacle for equipment design." An ultra-low sulfur
content standard is expected to lead to the design in the United States of high-efficiencv boilers and furnaces using less costly materials than needed with higher'sulfur content fuels. (hnp:/!\vww.biodieselmagazine.com! ar1lcle.jsp?anicle id=3937&g=&page=2.) Tms would lead to a more widespread use ofhighefficiencyor condensingoil-fired furnaces. Lowenng the sulfur content of fuel oil to 15 ppm sulfur content wili also be adv;ntageous to the fuel 01Idistribution mdustf) and the furnace m<Jnufacturing i-ndustf)'. They would be able to market fuel oil as clean bummg as natural gas. The fuel oii distribution industf)' will benefit from having"identical

### st~ndards for sulfur in distillate fuels regardiess of use.

(CITE**~2** \'

..J.R. 2262\ \lEW JERSEY REGISTER. \10:\DA\, SEPTEMBER20, 2010



# ...

### ADOPTIO,\S

from a storage and transportation perspective. A standard otha than 15 ppm is inconsistent with the existing Federal standards for on and**ofl~** 

### highway vehicles and would be more costly to store anddistribute. as ty,iO different sulfur content fue'ls would need to be handled and stored separately. Ifthe transponation diesel fuel and Number 2fuel oil have the

same sulfur standards. they can be stored in the same tank. with the required dye added to the transponation diesel fuel only when the fuel is distributed. The issues with handling off-specification product are addressed inthe Response to Comments 131 through 134.

The Depanment's cost-benefit analysis in the proposal's Economic Impact (41 N.J.R. at 4J63) was based on the 20J6sulfurcontent in fuel at ]Sppm. This cost-benefit analysis showedthat the amendments would be

more beneficial to the health of New Jersey's population and the environment than it would cost industry to implement. Although a less stringent sulfur content standard of SO 

### ppm would save the refining industry money on purchasing and disposing catalyst and on otherwise producing a IS ppm sulfur content compliant fuel. the ana'lysis showed that a 15 ppm sulfur content standard is costeffective. 

### 130. COMMENT: The Depanment should not adopt the proposed sulfur content standard for distillate fuel oil of ]5 ppm because implementation ofthis more stringent standardwill createless-expensive. off-specification fuel oil. Implementation of the 15 ppm sulfur content standard will cause the downgrading of high quality distillate to less valuableproduct by stranding slightly off-spec material. (7}

RESPONSE: There will be sufficient alternatives for the placement of off-specification fuel oil. These alternatives include blending or selling fuel for ocean-going vessels to the large marine fuel market in Ne\\ Jersey or sending the off-specification fuel for reprocessing. The marine fuel market comprised two to five percent ofthe distillate fuel and 87 to 94 percent ofthe bunker or residual fuel sold in New Jersey in 2007 to 2008. This market will continue to provide a repository for the disposition of off-specification distillate and residual fuel oil. The lowering ofthe suifur content ofmarine fuel. used within 

### 200 nautical miles ofthe United States coastline. by 20J

### 5will also be anew outlet for the off-specification J

### 5ppm fuel. Pipelineinterfaceissues

### with t

### 5ppmfuel 

### 131. COMMENT: The Depanment should adopt a 50 pprn sulfur in distillate fuel standard instead ofthe proposed IS ppm sulfur in distillate fuel standard. The pipeline interface that creates the transition material between ultra-lOw sulfur diesel andhigher sulfurjetfuel will result in of,[­ specification fuel. unless the Depanment adopts a less stringent sulfur contentstandard. such as 50ppm. (2, 7, 15, 16. 25) J32. COMMENT: The Department should not adopt the proposed 15 ppm sulfur in distillate fuel standard. but should keep the sulfur in distillate fuel standard at 

### 500 ppm instead. Fuel coming from the interface of high sulfur jet fuel and ultra-low sulfur distillate after pipeline transfers could be used as home heating fuel ifthe standard for sulfur in fuel were set at 

### 500 ppm. This fuei could not be used as alower sulfurcontentjet fuel because ofother specilications that thejet fuel must meet. (27) 133. COMMENT: The Department should not adopt the proposed ]S ppm sulfur in distillate fuel standard because onjust one pipeline system

an estimated six million barreis of**off~specification** 

### jt:t fuel/ultra-1m' sulfur diesel interface will be generated per year, adding a significant burden to the distributing and refining industry.**Ofi~speciflcation** 

### fuei will be generated with every interstate pipeline receipt and wi]1 have no outlet. especially once the USEPA full) implements tht: ultra-Io\\ sulfur diesel program in 20 J

### 4. This off-specification product is being marketed

as 500 ppm diesel or heating oil. with the maiorit; being distributed as heating oil. With the phase-out of fuel meeting the 500 ppm sulfur content standard. a 15 ppm sulfur content standard for heating oil would force the segregation of this interface material in tankage and Its transponing back to the refinery, where it would have to be re-relined to


### a lower sulfur content level. This will result in lost value. unnecessary lransponation costs, ineffective pipeline capacit;. and redundant refmer'y utilization (2.8,15. ]6.23.251 134. COMMENT The Depanment should adopt the proposed 15 ppm sulfurin distillate fuel level because off-specification fuels or the pipeline imerface materials canbe blended into hcavieroils orbunkerfucl. (8! 

### E\'\IRO\:'1E\TU PROTECTlO\

RESPONSE TO COMMENTS 131 THROUGH 134 The**on~** 

### specification matenal can be used in ocean-going vessels as marine rue 'I 

### and a suitable market for these fuels exists in N

### e\\ Jerse\.**()f1~** 

### specification fuels or the plpelme interface materials can be blended Into heavier oils or bunker fuel. Given the a\'ailability and access to pons In 

### and around New Jersey and the large number ofmarine vessels in those pons. a ready outlet for off-specification fuel exists.**Th~** 

### issue of off· specification pipeline interface material exists in the marketplace. as there

are many differing sulfur content fuel, currently on the market. The establishmentofasulfur content standard for fuels thatis consistent from

use to use and from state to state may reduce pipeline interface issues. as
areduction in the number offuels with differing sulfurcontent standards will occur. Comments on 

### the Gonrnor's

### Executive Orders 

### J35. COMMENT: The Depanment should not adopt the proposed rulemaking as it is not consistent with the Governor's Executive Orders of Januar) IS, 2010. Reducing the sulfur content standard to 15 ppm exceeds Federal requirements and the proposal must, therefore. include a cost-benefit analysis. (7) 136. COMMENT: The Depanment should adopt the proposed amendments and repeal because it does not add red tape or additional paperworkrequirementsto business. (13, 19) J37, COMMENT: The proposal provided very little analysis of the cost-benefit of the additional reduction in the sulfur content standard from SOO 

### ppm to 15 ppm and whether this step-down imposes the "least burden and costs to business:' in accordance with Governor Chris Christie'sExecutive Order 2, paragraph 3d. (7)

RESPONSE TO COMMENTS 135 THROUGH 137: The Department performed a cost-benefit analysis, which it included in the Economic Impact (41 NJ,R. at 4160). The sulfur content standards for the fuels covered by this rulemaking are not covered by Federal regulation: therefore. the adopted amendmentsdo not exceedaFederal requirement. The Department is adopting the amendments to meet several Federa] requirements, including requirements to 

### attain all healtb standards for NewJersey's air for all pollutants, as discussed at 4] N.J.R. 415g New Jersey is required to include rules as part of the State Implemclll3tion Plan in order to ensure that Federal requirements for regional h,,?e and fine particulate are met. as discussed in the proposal Summar) (4 i 

### N.J.R. at 4 I57 and 4159). While Federal law does not specifically requ.re the State to adopt this sulfur in fuels strategy. it does require it to naluate and adopt reasonable measures to meet progress goals for region"j haze and to attain all health and welfare standards. This measure was determined to 

### be a reasonable air pollution control strategy [n the NESCAUM states and the Department as discussed in the prllposa! Summary. (4] NJ.R. at 4160.) The Department. therefore. is adopting this as partofits regional haze and fine particulate SIPs. The Department agrees with the commenters that the adopted rules do not add paperwork requirements upon the users of the oil or add ne\\ paperworkrequirementsupon therefiners. 138. COMMENT: The Governor'sRed Tape Revie\\ executive orders have raised potentially troublesome issues for the Depanment's rulemaking and enforcement process. Considering the economic impacts of environmental regulation is a fraught process. Even the best economists struggle to quantify environmental benefits in dollar' ten11S: their best efforts, with the benefit ofhindsight, tend to underappreciatt environmental value at the time of quantification tragically and repeatedI)

. Economists struggle with correctly finding and vaiuing**th~** 

### extemal impacts ofeconomic transactions, discount rates and contingent values for natural resources: most ecosystem services are nUl captured in market transactions and are thus ofindeterminate**vaiu~.** 

### There is simply

no economically viable way for the Depanment to 

### sa;, for exampk. that 15 shopping malls are ofequal value to New Jersey as aself-sustaining osprey population. Cost-benefit analyses of environmental regulation. when attemptcd,

are invariably wrong. invariahl) non-confmnable and lnvariabl; minimize the benefit. while maximizing the cost. Including such COSl

### benefit analyses in the regulatoryprocess is an important decision for ani statute. and legislatures are well aware ofthe imponanceofdeciding on whetherpanicularlegislationwill impel or forbid such aprocess

!\EWJERSEYREGISTER, MONDAY, SEPTEMBER20.201Ii (GTE42 :\.J.R.2263)

### C\,VIRONMENTAL PROTECTI01\

Inappropriately applying cost-henelit analyses is a common and fmal mistake manylevels ofgovernmentmake: one that ohen puts them on the wrong: end ofan environmental lawsuit.

While true benetit analySIS is probably not possible. only a highly trained economist**~an** be expected towade through analysis ofcontingent valuation. extemaiIues and discount rates. Reasonable analysis, let alone
accurate analysis. IS not possible for a'layperson to produce. The commenter's understanding is that the Depanment has not used any particular economic theory to generate its benefits analysis. has no methodology to auantify benefits. has not used economists to review the effects ofthese rules and has only one economist on staff for the entire department. Although it is good that the Department concludes that its rules are .iustified hy their benefits. a qualified economist is likely tD find far greaterbenefitthan the Departmenthas. (14)

RESPONSE: Governor Christie's Executive Order No.2 delineates "common sense principles" for rtilemaking that are intended to provide the "opponunity to energize and encourage a competitive economy to benetit business and ordinary citizens:' At section Ia. the Executive Grder directs all State agencies to solicit the advice and views of knowledgeable persons from outside of New Jersey State government. including the private sector and academia. in advance ofany rulemaking. At section Id. the Executive Order directs State agencies to "employ the

use ofcost/henefit analvses. as well as scientific and economic research from other

### jurisdictio~s. including but not limited to the federal governmentwhen conducting an economic impact analysis on aproposed rule."'

The Administrative Procedure Act (APA) at N.J.S.A. 52:14B-23 and 24 (P.L. 1995. c. 65. effective June 5. 1995. which codifIed the substance ofGovernor Whitman's Executive Order No. 27 (1994) into the APA) requires Stateagencies that adopt. readopt or amend Stateregulationsthat exceed any Federal standards or requirements to include in the ruiemaking document a comparison with Federal law. The analysis must include a cost-henefit analysis that "supports the agency's decision to impose the standards or requIrements and also suppons the fact that the State standard or reauirement to be imposed is achievable under current technology. notwiths'tanding the Federal government's determination that lesser standards or requirements are appropriate." Therefore. since [994. in accordance with State law. the Department has included a cost-henefit analysis In all of its rulemakings where the rules or standards exceed Federal law.

The APA at N.J.S.A. 52:148-4(a)2 requires State agencies to mclude in each rulemaking a "descriplJon ofthe expected socio-economic impact of the rule." The Office or Administrative Law's Rules for Agency Rulemaking implementthe APA and require at N.J.A.C. 1:30-5.1(c)3 that

a notice of proposal include "an economic impact statement which describes the expected costs. revenues. and other economic impact upon governmental bodies of the State. and particularly any segments of the public proposed to be regulated." Each of the Depanment's rule proposalscontall1s such astatement.

As required by the APA and the Rules for Agency Rulemaking. the Department's rule proposals also contain statements of social impact. johs impact. agriculture industry impact. impact on small business (regulatory flexibility analysis): and statements addressing the proposed rules' impacton smartgrO\vth and the cost ofhousing. The Department in addition includes an environmental impact statement. describing the imoactthat its proposedrules will have on the environment.

The Department acknowledges that it has not historically provided as much detail in its impact analyses as an economist might. The Depanmentendeavors to employ a practical approach to itsdetermination of the costs and benefits of its rulemakings. and necessarily relies to a certain extent on information developed hy other sources. For instance. the Department may adapt and tailor to the circumstances in NewJersey the economic analysis for arule performed hy anotherstateorthe Federal government. In addilJon. the Department conducts informal and formal outreach to regulated communities. environmental interest groups. the L.S. Environmental Protection Agenc\. other Federal and State agencIes. a£encies of other states. and the general public in the early stages of rUlemaking. This IS particularl) the case for larger. more complex ruiemakings. The Department will publish notice on its website or in the New .Ierse\ Register. and/Or use mail and electronic mail to known 

### \[)OI'TlO,\S

stakeholders. proVIding a description oJ' the rules anticipated to 

### k changed and the t1meframe and means by which input will be gatheree. for instance. at informal meetings or by written submiSSions. or hoth Through outreach such as this. the Depanment obtaInS inJomlation on possible costs and benefits of rules that it IS developing. as well as suggestions for the approach the Depanment shOUld take in pursuing Its regulatory goals. Through the impact statements and Federal standards analyses Jor its rulemakings. the Department attempts to identifi- the anticipated costs andbenefits thaI will result from the proposedrules. including reasonah!\ foreseeable indirect or secondary costs and beneiits. The Department does attempt to identify and describe. even 

### ifit cannot always quantify in dollarterms. theproposed rules' costs and beneilts in orderto providethe puhlic with as complele a picture and/or rationale as possible regarding thepositive and negative economic impacts ofthe rulemaking. Going forward the Depanment anticipates looking 10 the scientific and economic research of other jurisdictions and conducting advance outreach for its rulemakings \Il order to obtain enhanced insight into the
costs and benefIts that will flow from its rules and help accomplish the regulatory balance contemplated by Governor Chnstie's Executive Orders. 139. COMMENT: The Governor's concern that Department standards may. in some instances. exceed Federal standards is misplaced. The Federal law in most environmental matters acts as a basement. helow which states cannot fall. but above which they may build. The Congress andthe 

### USEPA are awarethatthey are settingnational minimums.Just as they are awarethat the states are very different. A minimum that makes

sense in a relatively unpopulated state such as Montana. will not necessarily make sense in New Jersey. the most densely populated state in thecountry. A minimum in arelatively virgin state such as Oregon will
not necessarily make sense in New Jersey. a state with legacy of toxic industrial pollution. In this context. it is not oniy appropriate that New Jersey's regulations would exceed Federal standards in a numher of instances. it is essentially mandatory. Any state's environmenta', protection agency that is doing its Job will find instances where the peculiarities ofthe particularstate make federal regulation inadequate. NeVi Jersey's regulations, because of the State's population density. industrial legacy and proximity to several huge metropolitan areas. should probably exceed Federal standards in many and diverse ways. The Depanment is uniquely positioned to use Federal standards as a starting point to create regulations that specifically address the unique problems facingNewJersey and its citizens. The Department. therefore. should not hesitate to exceed Federal standards when the health. safety. and welfare ofNewJersey's citizens and its environmentrequireit. (14) RESPONSE: The APA at N.J.SA 52:148-23 and 24 requires State agencies to include in their Federal standards analvsis a discussion ofthe policy reasons that support the agency's decision to impose a standard that is more stringent than a comparable Federal standard. ThIS is in addition to the cost/benefit analysis thatthe APArequires. asdiscussed in the immediately preceding response. The Legislature stated. at N.J.S.A. 52:14B-22. "[i]t is the declared policy of the State to reduce. wherever practicable, confusion and costs involved in complying with State regulations. Confusion and costs are increased when there are multiple regulations of various governmental entities imposing unwarranted differing standards in the same area of regulated activity. It is in the public interest that State agencies consider applicable federal standards when adopting, readopting or amending regulations with analogous federal counterparts and determine whether these federal standards sufficientiy protectthe health. safety and welfare orNewJersey citizens."' Governor Christie's Executive Order No.2. sectior, Ie. requires Stale agencies to "[d]etail and justify ever) instance where a proposed rule exceeds the requirements of federal law or regulation. State**agencie~** shall, when promulgating proposed rules. not exceed the requirements of federal law except when required hy State statute- or in such circumstances where exceeding the requirements of federal law or regulation is necessary in order to achieve a New Jersey specific**pubii~** policy goal."' This direcrive establishes a**foctl~** and approach to the comparison with Federal lawthatthe APA requires all State agencIes and the Departmentto conductfor rulemaking.



### (CITE .[! '\

..

### J.R. 2264\ 

### "'EWJERSEY REGISTER, MO'\DAl',SEPTEMBER20. 2010ADOPTlO,\S



### As the commenter points out. the conditions and circumstances or Ne\' .Ierse) and its citizens can be unique to the State. Consequent!). both the APA and Executive Order No.2 acknmdedge that there will be times when it is absolutel) appropriate for the Department to

### promulgate standards that are more stringent than Federal standards. either because New .Ierse) la\\ so requires or because doing so is necessary in order to achieve imponantpublic policy goals for the State. 140. COMMENT: There arIC probably many instances where Depanment procedures could be more clear. For example. Depanment fomls ma) hal'e increased in complexity over the years. some information may be requested redundantly and some permits could. perhaps, be merged. The Depanment. however. should keep in mind that it is not a "Depanment of Environmental Pennitting:' and its miSSIOn should not be to smooth the path from developmental pennit applications to development. Central to the idea ofprotection is that one must often say ··no.·· The Depanment should not look at ··process improvement" as making II 

### easlerto get to ··yes:·(14) RESPONSE: The Depanment undenakes various effons to assist the regulated community in the permit application and review process. For example, in accordance with N.J.S.A. 13:1D-III. the Depanment develops and makes available technical manuals relating to its various environmental permits. The Depanment also provides checklists. identifying the application steps and submissions required under the respective permittingprogram rules. Checklists and applications aremade available through the Department"s website. The Department often assigns case managers [Q 

### assist applicants with the permitprocess. and to coordinatepermittingacrossvarious Depanmentprograms.

TheDepartmentconvened thePermit Efficiency ReviewTask Force in 2008 and. in response to its recommendations (see http://www.state.n;.us. dep/pennittf/documents.html). has undenaken various initiatives to improve outreach for rulemaking and to streamline and improve the permit application and review process. The Department is committed to upgrading its information technology infrastructure to 

### support electronic submission and processing ofpernlit applications and associated reports. The Department is in the process ofincreasing its network capacity. and is accelerating its efforts to design and develop electronicpermitting and reponing services. Recent efforts include. for instance. implementation of

an electronic water use and transfer reporting program by the water supply program to facilitate data management. eliminate the use ofpaper forms. reduce data errors. improve tracking and reporting of data. and make dataavailable in amore timely fashion. Process improvements that facilitate the issuance ofpennits that are consistent with the applicable standards and that are issued in a coordinated and timely fashion are beneficial to the regulated community. the Depanment. and the environment. Streamlining permitting will

conserve the resources of all involved and maintain proper focus on achieving substantive environmental protections. As the Permit Efficiency Review TaSK Force's recommendations and Govemor Christle·s Executive Orders recognize. the process ofobtaining a pernl1[ from the Depanment should not stand in the way ofdevelopment that i, 

### otherwise allowable under applicable environmel1\al protection la\\ and standards. 141. COMMENT: Although many of the State's environmental regulations could be improved. the Department ought not curtail any protections ordelay any rules based on the Govemor's Executive Orders. (14)

RESPONSE: The Department. in order to inform the reviews of pending proposed rules being conducted b) the Depanment and the Red Tape Re\'ie\.\ Group established under Executive Order No.3 Issued b) Governor Christie on January 20. 2010. extended or reopened the public comment penod for cenain pending proposals. (See Notice ofextension

or reopening ofCOlllmel1\ periods and informal stakeholder meetmgs for pending Department of Environmellla\ Protection proposals suspended under Executi\'e Order No. J 

### (20 I

### 0I. 

### http:/rwww.nj.gov/der/rules; notices.html. 42 KJ.R. 642(a).) 

### In accordance with Executive Order Nos. 

### I and 

### 3. the Red Tape Review Group's task is. among other things. to 

### examine various proposed administrative rules and regulatioll5 b) a number of State agencies prior to their adoption and make detailed recommendations to the G0\'ernOr to rescind. repeal oramend those rules. Based on those recommendations. the Commissioner orthe Depanment E\'\'I ROI'i'v1 E\'TAoL

### PIWTECTI0'\



### \I'ill deternline whether or not to proceed wilh adoptionoramendment ot the Depanment"saffected proposals. The Executive Orders and the Red Tape Revie\\ process**expr~sslv** 

### recognize that some rules must be adopted in order to 

### prevent an ad\·ers·e impact to public safety or security or public health: pre\enl prejudice [0 

### the State with regard to receipt of funding or certifications from the Federal government; allo\\ State agencies to exercise their essen\lal powers. duties and functions: and compl) with any judicial deadline. Rule proposals that would result in such adverse impacts ifadoption were delayed therefore were not suspended. Executive OrderNo.2 also directs State agencies to implement the "common sense principles· in all rulemaking while keeping in mind the core missions ofthe agency: public health. safety. weifare and the environment: and the**agenc~"** 

### s underlylllg regulatory objectives. In determining whether to 

### proceed with its rule proposals and for all future rulemaking. the Depanmentwill necessarily take all ofthese factors into consideration. 142. COMMENT: The Department·s notice and comment procedure. the informal stakeholder process. and the Red Tape Review Group process created by Governor Christie·s Executive Order No.2 do not comply with the rulemaking reguiremems of the New Jersey Administrative Procedure Act (APAI. Web posting and reliance on the authority ofGovernor Christie's Executive Order Nos. Ithrough 3cannot supersede or replace APA requirements. All 12 proposals were proposed pursuant to and in accordance with the API'. requirements. The Depanmentmay not

- afterthe fact

- revise these procedures. (26) RESPONSE: As the commenter acknowledges, this rulemaking. as well as the other proposals to which the commenter referred. were proposed in accordance with the Administrative Procedure Act (APA). N.J.S.A. 52:14B-1 et seq. On January 20,2010. GovernorChristie issued

a number ofexecutive orders. Executive Order No. 

### 1(EO

### I) suspended for 90 days more than 150then-pending proposals ofvarious New Jersey agencies. including 12 proposals ofthe Department. EO J 

### states that one ofthe Governor·s priorities is to establish. under the direction of a 

### Red Tape Review Group. a "commonsense" approach to the promulgation of rules. The commonsense principles are described in Executive Order No. 2 (E02). and the Red Tape Review Group is established under Executive Order No.3 (E03). The purpose ofthe suspension was to afford the Red Tape Reviev. Group the opponunity to examine the suspended rulemakings and make recommendations as to those proposed rules it determines are "unworkable.overly-proscriptive orill-advised" (see EOI, 

### 4th whereas clause), E01 directed that the suspension be undenaken in a
manner consistent with APA rulemaking requirements. and specifically exempted from suspension any proposedrulemaking. forwhich the failure to adopt would adversely impact public safety or security: adversely impactpublic health: prejudicethe State with respect to receiptofmonies from the Federal government or the ability to obtain any certifications from the Federal government: prevent the application of powers. functions and duties essential to 

### the operations of the relevant State agency: oradverselyimpactcompliancewith anyJudicial deadline.

Both E02 and E03 stress transparency and the involvement of stakeholders and thepublic in agency rulemaking.. which is a fundamental tenet of the APA. Accordingly. the Depanmen" determined It 

### was appropriate both to extend the

### ~f~rmal**com~ent** penod on its suspended proposals and to also hold stakeholder meetings to facilitate informal discussion, of tile rulemaklllgs in consideration ofthe purposes of the executive orders. On February 3. 2010. the Depanment filed for publication in the Nev. Jersey Register a notice ofthe extension or reopening of the comment period on the 12 suspended rulemakings to 

### March 15.2010. The notice appeared in the March 1. 

### 2010. Ne\\ Jerse\ Register (see 42 N.J.R M2(a)). The Depanment posted the notice on its website on February**~.** 

### 201(1

The notice provided an additional period for pubkcommem on each ofthe rulemakings beyond that required by the APA. The noltce did nOl chamre the coment of the original proposals in any wa). While nOl**precl~ding** 

### addiltona'i comment on any aspect of the pending proposals during the extended/reopened comment period. the Depanment sought**throu~h** 

### the nOtice to focus any additional comments submitted on the purpo'ses of the rules reviev. set fonh in the executive orders. The Department also announced III 

### the notice that it would be 

### scnedulin;.

(CITE42 !'\.J.R. 22651 NEW JERSEY REGISTER. MONDAY

.. 

### SEPTEMBER20. 20]0ENVIRONMEl\TAL PROTECTION

stakeholder meetings on the proposals and that the dates for the meetings would be rosted on the Department's website, The schedule of the stakeholder meetings was subsequently posted on the website on February 22, 20 IO. The firs! ofthe stakeholders meetings was held on March 2, and the las! on March II. 2010,

The stakeholder meeting regarding this r-ulemaking is described above in the introducLOry seCllon of thiS adoption. Public comments for the administrative recoro were accepted \0 'WTiting during the original rublic
comment period and during the additional comment period that ended March 15, 20I0 As with any rulemaking, and as contemplated by the APA, the Department has reviewed, considered, summarized and is responding in this adoption to all formally submitted comments received during the enurety ofthe public comment period. In conclusion, DEP did
not "revise the orocedures after the fact" but, rather. supplemented the statutorily reqUired ruiemaking procedures in order to facilitate public input into thereviewofthe rules required by the executiveorders. 143. COMMENT: The Department's web post states the following: "[Note: The Department prefe's electronic submissions in order to facilitate timely review ofcomments to meetthe timeframes for action in the Executive OrdersT

The timerestriction (in other words, the timeframe for action pursuant to Executive Order Nos 1 through 3 and the Red Tape Review Group reviewprocess) cannot replace or supersede the requirements ofthe APA. The March 15 deadline is arbitrar: and not in accordance with APA requirements. (261

R.ESPONSE: The Administrative Procedure Act prescribes minimum notice requirements to ensure that adequate opportUnity for public mput

on a proposed rule is provided. As indicated in the Response to comment 145 above, the proposals for which the Department extended or reopened the comment period for purposes ofthe review initiated by the executive orders satisfied the notice and ['ublic comment requirements ofthe APA
at the time they were originaliy proposed, The notice provided an additional period for public commenton each ofthe rulemakings bevond the minimum required by the APA, The March 15,2010 close of the additional comment period was established so that comments related to the purposes ofthe executive orders would be received withinthe 90-day timeframe lending April 20) establishedby Executive Order No, 1 for the Red Tape Review Group to conductits review ofthe suspendedproposals

sothat Itmightthereaftermake its recommendations.
J44. COMMENT: The substantive requirements of Executive Order Nos. 1 through 3, particularly the requirements to conduct cost/benefit analysis and to consider cost/benefit analysis as a basis for regulator: decisions. is ultra vires and not authorized by either the APA or the enabling authorities pursuant to which each of the 12 rules were proposed, (26)

RESPONSE: The Administrative Procedure Act requires that each proposed ruiemaking include a description of the expected SOCil'· eCQnomic impactofthe rule, as well as aregulatory f1exibility analysis of impacts on small busmesses, a jobs impact statement, an agriculture industry impactstatement, a housingaffordability impactstatement, and a smart growth development impact statement See NJ,S,A. 58:14B-4. See also the Rules for Agenc\ Rulemaking, NJ,A,C 1:30-5,1. In addition, the APA requires that a Federal standards analysis must be included m each proposal and adoption, See NJ,S,A. 52:148-23. and NJAC 1:30­ 5.!. Neither the APA nor the enabling authority for this rulemaking preclude an analysis of the costs and the benefits of a proposed rule as part ofthe APA-required impactanalyses. 145. COMMENT: The "reopening" ofthe public commentperiod and retroactive application ofnew procedures, standards. anddecision critena established b\ Executive Order Nos. 1 though 3 is ultra vires, nol authorized by iav,. and Inconsistent and in violation oflaw, This includes the APA requirements as wei! as the enabling statute for each ruie proposal. (26i RESPONSE: As indicated m Drior Responses, the procedure followed for this ruiemaking, including the reopening of the comment penod to provide additional opportunity for publtc comment and the request to focus the additional public comments on the purposes ofthe rules review
set forth in the executive orders, is consistent with the rulemaking requirements of the Admmistrative Procedure Act. Seeking additional public input on, for example. the potential costs and benefits of the ADOPT)Of\S

ruiemakings m 0 more focused wa)' as contemplated bv the executive orders did not resu

### II in new rrocedures, standards, ond decision criteria being imposed, Rather. the extended comment period and stakeholder meetings supplemented thestatutorily required rulemakingprocedures for public comment and participation in rulemaking The commenter has not explained how providing an opportunity for additional rubilC comment.

or having the Department consider those additional comments, violates the APA or the enabltng statutes for this or an\ of the affected rulemakings. Consequently, the Department is na't able to further specifically address this aspectofthe comment. 146, COMMENT: The Department's application ofthe proviSions of Executive Order Nos. 1 through 3 to the subject rule pro['osals would violate the procedural and substantive requirements of Federal environmental laws and the delegation agreements under which NeVI Jersey implements Federal laws, TI1ese laws include, but are not limited
to the Safe Drinking Water Act. the Coastal Zone Management Act. the Resource Conservation and Recovery Act (RCR..A.I, [he Clean Water Act. and the Clean Air Act The same violations anse by the Department's after the fact "reopening" of the public commem procedure, as part of whichthis commentis submitted, (26) RESPONSE: Several of the programs for which proposals were suspended under Executive Order No, I and for which the Department reopened or extended the comment period are administered by the Department in conjunction with equivalent Federal programs under independent State statutory authonty, as allowed by the applicable Federal statute, Others are programs that have been delegated to the Department by the Federal government, again in accordance with the applicable Federal statute. The Department's decision to allow further opportunity for public commem in order to obtam comments focused on the directives contained in the executive orders is not barred by the New Jersey Administrative Procedure Act and does not violate any Federal environmental law related to any of the Depanmem'5 programs that implement the affected rules, The Federal statutes and delegation agreements do not preclude the Department from seeking public input determined to be appropriate before taking regulator: action. Similarly. the Federal statutes and delegation agreements do not preclude the Department from considering the impacts of the rulemaking on the regulated public for purposes ofdetermining the best way to implement therequired standards, 147, COMMENT: The "reopening" process and the provisions of Executive OrderNos, I through 3violate Federal fundingagreements and the National Environmental Partnership Performance Agreement (NEPPS). The Department may not substitute the proviSions of the Executive Orders and the Red Tape Review Groupreviewprocess for the requirements ofFederal law, regulation and funding agreements. (26) RESPONSE: Federal funding agreements and the National. Environmental Partnership Performance Svstem (NEPPS) do not establish requirements for the rulemaking

### pro~ess. NEPPS has two major components, the Performance Partnership Agreement (PPA) and the Performance Partnership Grant (PPG). The f'PA focuses mainly on activity commitments that the Department makes to earn the overall PPG from the 

### l!,S, Environmental Protection Agenc). While some of the commitments may relate generally to the develDpment of rules and expected timeframes, neitherthe PPA nor PPG deals With the procedures for rulemaking, Accordingly, the PPA and PPG do not preclude the Department from seeking and considering public comments related to the purposes oftherulesreviewset forth in theexecutive orders. 148. COMMENT: Basedon the concerns eXDressed by the commenter in Comments 147 through 153 above, the Department ;hould withdraVl this sham "reopening ofthe public comment process." This "reopening"
process is not in compliance with procedural notice/comment requirements ofapplicable law, (26) 149, COMMENT: The "common sense principles," standards, critena, andinformal processestablished by ExecutiveUruer Nos. I through j are not authonzed by law. can have no legally binding effec:, and exrressly violate State and Federal law. Accordingly, this "proposa!" must be withdrawn. (26) RESPONSE TO COMMENTS 148 AND 149: As explained in the Responses to Comments]45 and 146 above. the Department's actions to

(CITE42 :\

..J.R. 22661 :\EWJERSEY REGISTER, VIONDAY. SEPTLvlBER2(), 2010ADOPTIO:\S



### propose and adopt this rulemaking meet the requirements ofthe APA. and do not violate the enahiing statutesorapplicable Federal \all. 150. COMMENT: The "Red Tape Reviell" process is an infonnal process that is not on the record. This process is not transparent and not authorized b) law. 

### It ma) notbe considered or reiied upon in any way for final agency regulatory decisions regardingthe subject rule proposals. No information considered or decisions reached during that process ma) he considered as pan of the administrative record of the subject rule proposals. and none ofit can be relied on as a basis for linal regulatory decisions b) the Departmenl. (26) 151. COMMENT: The stakeholder process announced for this proposal is an infonnal process that is not on the record. This process is not transparent and not authorized by la"'. It 

### may not be considered or relied upon in anyway for fmal agencyregulatory decisionsregardingthe subject rule proposals. No information considered or decisions reached duringthat process may be considered as part ofthe administrativerecord ofthe subjectrule proposals. and none ofit can be relied on as abasis for final regulatory decisions by the Depanment. The Depanment should withdrawthis proposal and abandon this process. (26) RESPONSE TO COMMENTS ISO 

### AND 151: As indicated in the Response to Comment 145. the process followed by the Department in this rulemaking. including the additional public comment period. meets the requirements of the Administrative Procedure Act. The extended/reopened comment period and the.informal stakeholder meetings were intended to facilitate receipt ofadditional public input on the \ 2 Depanment proposals suspended under Executive Order No. 1in consideration of the purposes of the executive orders as enumerated therein. The notice extending and/or reopening the comment period on the suspended rulemakings specifically noted that the stakeholder meetings were not public hearings and that testimony on the proposals

was not going to be accepted at them. The stakeholder meetings were open to all. and their purpose was to facilitate informal discussion ofthe rulemakings. The stakeholder meeting regarding this rulemaking is described above in the introductory section of this adoption. Public comments for the administrative record were accepted at the formal public hearing. and in writing during the original public comment period

on each ofthe proposals. and in "'Titing during the additional comment period that ended March 15. 2010. As with an) rulemaking. and a, contemplated by the APA. the Depanment has reviewed. considered. summarized and is responding in this adoption to all fOnllally submitted comments received duringtheentirety ofthe public commentperiod.
Federal StandardsStatement Executive Order No. 27 (1994) and N..I.S.A. 52:14B-l et seq. (P.L. 1995, c. 65) requIre State agencies that adopt. readopt or amend State regulations that exceed any Federal standards or requirements to include in the rulemakingdocument aFederal standards analysis. No Federal la\\ establishes standards or requirements regarding the contents ofsulfur in the fuel oil regulated b) N.

### .I.AC 7:27-9 Although the Department's sulfur content standards for fuel oil are Federall) enforceable as part of Nel'l Jersey's State Implementation Plan. the amendments to 

### N..J.A.C. 7:27-9.2 and repeal ofN..l.A.C. 7:27-9.5 are not promulgated under the authorit) of. or in orderto implement. comply with or panicipate in an) program established under Federal la'" or under a State statute that incorporates or refers to Federal la\l, Federal standards or Federal requirements. Moreover. there is no comparable Federal standard exceeded by this rulemaking and no Federal regulatory schemethat might be perceived to be duplicated or 

### overlapped by this rulemaking.. Accordingl). Executive Order NO.27 (1994) and P.L. 1995. c. 65 do not require aFederal standards analysi,.

Full text of the adopted amendments follows [additions \0 

### the proposal indicated in boldiace\lith asterisks *thus*):

SUBCHAPTER 9 SULFUR IN FUEL.S
7:27-9.2 Sulfurcontentstandards (a) 

### No person shall store. ofier for sale. sell. deiiver or exchange in trade*,* for use in Ne\\ Jerse\'*,* tl.lel that contains sulfurin excessofthe appitcable pans per million 

## by weight set fonh in 

### Tabies lA 

### and IB 

### of thi, section. except as provided in Ic). (dt and lei belol",. Fuel stored in E\\"IRO:\\1['\TAL

### PROTECTlO\

Ne\\ Jersey that met the applicable ma:-.:imum suifur content standard of Tahles 

### IA or 

### 1B ofthis section at the time the fuel was stored in "ell Jersey may be stored. offered for sale. sold. delivered or e:-.:changed 111 

### trade*!' for use in NewJersey*.* afterthe effective dattoltheapplicable standard in Table I

### B (b) NCI person shall use fuel that contains sulfur in excess of the applicable pans per million hy weight set fonh in Tables lA and 1

### Bof this section. except as prol'ided in (cl. 

### (d) and (e, belo\\. Fuel stored in New Jersey that met the applicable maximum sulfur content standard of Tahles 1

### A or 1

### B ofthis section at the time it was stored in New Jersey may be used in New Jersey after the operative date ofthe applicable standard in lB. TABLEIA

MAX1MUM ALLOWABLE SULFURIN FUEL EFFECTIVE THROUGH JUNE 30, 2014

Classification Partsper Million hI'

### Wei2"ht (ppm! 

### Typical by

### SSll Gradesof Viscosity at Zones 1 

### Zones

### 4 

### I Fuel Oil 100°F '1 

### Zone 1 

### Zone 3 &5 &6

## ~o 2& 

### I Less than or 3.000 

### I 3.000 2.00CJ 2.000

I 

### lighter 

### I equal to 45. 

### I I 

### i

. including gases 

## I I 

# I I
3.000 'I 

### 20,000 

## i 7.000 3.000

bUI 

### less than ro 4 I 

### Greaterthan45 

### I 145 I 

### I I 

# I
I 

### I Equal to or 20.000 

# I 10.000 5.000 

### I 3.000

# r~ 5. NO.6 

### I & 

### heaVIer g

### realer than 145



### TABLEIB

MAXIMUM ALLOWABLE SULFURIN FUELEFFECTIVE JULY 1.2014 ANDJULY 1.2016

i



### I Classification Parts per Million bl'"

### eight (ppm) I I 

### Typical by 

### SSl i

II 

### Gradesnf Fuel Oil 

### Viscosit)' at 100°F 

# I Zone 1 

### Zones 2&S 

### Zone 3 I I 

### Zones 4&6 

### I i I I



### , No. 26.:

lighter Less than or 

### equal to45. 500 500 500 

### I SOCI I

! I i I

### effectIve includInggases 

### i Jul) 1.

2014 , I

I I 

### I through Junt 3Q. 2(16)

NO.26.: Less than or 15.0 \5.0 15.0 15.0 

### Ilghrer equal to45. (effective Il1cludll1g. gases

I 

### .Iulv I. I

'I 

### 2016\ 

### I

1 

### I

I 

### No -+ 

### Grearerthan

### -+, I 

### 2.500 2.500 2.500 2.500

I I

### effective hut lessthan

'I

.lull' I. 145

I 

### 20i4 i

II No 

### 5. No 

### I Equal to or 5.001) 5.000 5.000 3.000

0& 

### greaterthan heaVIer 145

I

### effectIve .lull' i. 

### 20]4 

### '1

(CITE42 !\.•

### J.R. 2267) 1\iEW

### .JERSEYREGISTER. MO'\'DA\.SEPTEVlBER20,2010

### ENVIRONMEl\'TAL PIWTECTIOi\ 

### ADOPTIONS

Ie) The provisions oflal and (bi above shall not apply to fuels whose combustion carries sulfur dioxide emissions from any stacK or chimne\ intO the outdoor atmosphere that are demonstrated to the Depan:ment 

### as not exceedll1g. at anv ume. those quantities ofsulfurdioxide expressed in pounds per

### l~()OO.OOO BritIsh Thermal Units (BTU

### Igross heat input. set forth in Tables 2A and 2B ofthis section.

. 

### TABLE 2A

MAXIMUM ALLOWABLE SULFUR DIOXIDE EMISSIONS EFFECTIVE THROUGH JUNE 30. 2014

Typical Grades ofFuel

Oil Classification hy 

### SSt' Viscosity at 100°F SO, 

### Emissions (Ibs per million BTlI) 

### ! 

### I Zones
I 

### Zones 4 

### Zone 1 

### 2&5 &6

NO.2&: Less than or 0.32 0.32 0.21 0.21 lighter equal to 

### 45. mcludmg gases 

## I

No Greaterthan 45 2.10 0.74 0.32 032

I 

### but less than

14) 

## I

I 

### NO.5.

NO.6&: HeaVier Equal to or greaterthan 145 2.10 1.05 0.53
I I I I 

### 0.32



### TABLE 2B



### MAXIMUM ALLOWABLE SULFUR DIOXIDE EMISSIONS EFFECTlVEJULY 

### l.2014ANDJULY 

### L 2016

C1assification SO, 

### Emissions (Ibs per million BTlI) Typical oj'SSll Zones Zones Fuel Oil 100°F 1 

### Grades of Viscosityat Zone 

### 4&6 2&5
0.0530 0.0530 0.0530 NO.2 & 

### Less than or 

# i "0530 lighter equal to

### 45. (effective mcludmg gases July 1. 

### 2014 through ! 

### June 30. 

### 2016\ I

. i I i 

### !000160 

### I NO.:' & 

### Less than or 0.00160 1000160 0.00160 lighter equal to45. 

### (effective includinggases I 

### I julv I. I 

### I
20J6! I 

### I No 4 

### Greaterthan 45 

### 0.260 

### I 0.:'60 0.260 0.260 

### (effective but less than

i 

### .Iulv L 145 I I 

## i 20i41 

## i

NO.5. No. 

### Equal 10

### or 0530 0.530 0.530 0.320 b!\: 

### greater than HeaVier 145

I

### effective .Iuiy !.

I 

### 20141

(d)The provisions of (al and Ib) above shall not apply to fueis inCluded in an alternative emission conlfoi pian based on a mathemalJcal comb1l1ation approved b," the Department. Application for such approval shall be made 10

### the Departmentin writing and must include: 1. Certification that all source operations to be included In 

### the mathematical combination are under the control or. or operated by. one person: 2. 

### Cenification that the total sulfur dioxide emissions trom the mathematical combination during each 24-hourDeriod will not exceed the quantity of sulfur dioxide expressed in pounds per million BTl' gross heat input setforth rn 

### Tables 2A and 2B ofthis section: 3. 

### Certification that the total sulfur dioxide emissions from the mathematical combination during each 24-hourncriod will not exceed the maximum total weight of sulfur dioxide that all the sources In 

### the mathematical combinalJon were allowed to emit at 

### the time nfapplying: 4. Identification ofeach fuel burning unit and stack to 

### be mcluded in the mathematical combination: 5. Identification of the grades of fuel to 

### be burned in each unit the maximum sulfur content of each fuel to be burned in each unit. the maximum gross heat input rate for each unit. the higher heating value of each fueL and the annual fuel use and operating hours per year for each unit: 6. 

### An application for a pennit for any fuel burning unit that must be altered or for any fuel burning unit in which fuel is to be burned haVing a sulfur content in excess ofthe applicable limits specJfied in Tables IA 

### and 

### 1Bofthis section. The pennit may be a preconstruction pennit and cenificate under N.J.A.c. 7:27-8. an operating pennit under N.J.A.c. 7:27-22 ora facility-wide permit as defined at N.J.A.C. 7: IK-l.5: 

### 7. A demonstration by air quality simulation modelling acceptable to the Department. including aerodynamic downwash modelling. unless waived in accordance with the provisions of 1\.1.A.C. 7:27-9.4. that increases in air contaminants resulting from use of the alternative emission control plan wiII 

### not cause any ambient air quality standard to 

### he exceeded, or cause any allowable prevemion of significant deterioration ambient air increment as established by the United States Environmental Protection Agency to be exceeded: and In 

### areas where an ambient air quality standard is already exceeded. will not cause an increasein ambientairconcentrations greaterthan thethreshold increases setforth in Table I 

### ofNJAC. 7:27-18.4: 8.-9. 

### (No change.) Ie) (No change.) (f)

### If the identified grade of fuel oil does not agree with the classiEcation by viscosity set forth in Tables lA and IB <lnd TablES 2A and 2B. then he allowable parts per million sulfur by weight shall be detenninedbythe viscosity classification.


# (a)

CLIMATE CHANGE AND ENVIRONMENTAL MANAGEMENT Noticeof Extension of Chapter Expiration Date Pollution Prevention Program Rules N.J.A.C.7:1K

Take notice that the Department of Environmental Protection informed Governor Chris Christie that the Pollution Prevention Program Rules. N.J.A.C. 7:IK. were scheduled to expire on August 24. 

### 2010. in accordancewith N..I.S.A. 52:\4B-5.1. The rules are promulgated under the authority of the Pollution Prevention Act. N.J.S.A. 13:10-35 et seq

.. and set forth requirements to be followed by priority industrial facilities in the development and implementation ofPollution Prevention Plans. Pollution Prevention Pian Summaries and Pollution Prevention Plan Progress Reports. The Department is commencing a stakeholder process to evaluate tnis program. and to 

### consider whether andhowtheserules must be reVised

. By the authority vested in him pursuant to 

### N.1.S.A. 52: 14B-5.1d. Governor Chris Christie. on August 24. 2010. directed tnat the expiration date forN.1.A.C. 7:1Kbe extended from August24. 20I0to February 24. 2012.

(CITE .\2 --;.J.R. 2268) 

### --;EWJERSEY REGISTER, '10NDAY, SEPTf"IBER20, 20]0