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OAR Box 1669 

Prepped by Charmelle Mathews 

Document Number: 

'88lll-E-20 

Docket Number: 

A-98-13 

Printed 9/23/2008 9:36:49 AM Sheet 88 of 110 
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MEMORANDUM 

TO: Air Docket No. A-98-13 

Organic Liquids Distribution (OLD) NESHAP 

ESD Project No. 96/05 

FROM: Martha Smith 

U.S. EPA/OAQPS/WCPG 

DATE: September 12, 2001 

SUBJECT: Conference Call to Discuss Inter-Agency Comments on OLD NESHAP 

Pre-Proposal Rule Package 

OCT-1200 1 

EPA AIR DOCKET 

I. Purpose 

The Office of Management and Budget (OMB) and the Small Business Adminstration 

(SBA) requested the opportunity to discuss issues they had identified in their review of the 

EPA's draft proposal package for the OLD NESHAP. The purpose ofthis telephone call was for 

OMB and SBA to present their comments and for the EPA to respond. 

II. Date 

August 24, 2001, 9:00 am - 10:00 am 

III. Participants 

Office of Management and Budget 

Small Business Administration 

U.S. Environmental Protection Agency 

Pacific Environmental Services 

IV. Discussion Summary 

- Bryon Allen 

- Jonathan Pawlow 

- Keith Barnett 

Kent C. Hustvedt 

Martha Smith 

Larry Sorrels 

- Greg LaFlam 

Martha Smith and Larry Sorrels, EPA, presented a briefing summarizing features ofthe 

proposed OLD NESHAP, as well as its projected cost and economic impacts (see Attachment 1). 

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Memo to Docket A-98-13 

September 12, 2001 

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• The OMB and SBA representatives then discussed each of their comments in turn, and 

' the*EPA responded, as summarized below. 

I Rule applicability. Bryon Allen of OMB asked whether an overlap of different NESHAP 

| regulations might occur for any ofthe HAP emission sources in the organic liquids distribution 

I (OLD) category. For example, if the Miscellaneous Organic NESHAP (MON) is promulgated 

arterlhTOLD NESHAP, would the MON then apply to those MON facility transfer racks 

previously covered by the OLD NESHAP? 

Proposed §63.2338 (b)(1) is meant to avoid overlap of applicability of different NESHAP 

for the same emission sources. The preamble to the rule includes a discussion ofthis provision 

(in Section LA), and indicates that for two or more potentially applicable NESHAP that are not 

yet final, the rule with the earliest compliance date would apply. 

OMB/SBA suggested that the EPA solicit public comment in the preamble on its proposed 

approach for this applicability issue. The draft MON proposal should also be reviewed to 

determine how this issue is addressed and its compatibility with the OLD NESHAP approach. 

Definition of source for transfer racks. OMB was concerned that defining the transfer rack 

emission source to be each loading position for a tank truck or railcar could lead to unintended 

pressures on facilities with regard to their rack utilization. As an alternative, could the entire 

loading system be defined as the source and averaging be used across the source? This might 

eliminate behavioral distortions while achieving the required control level and preserving 

flexibility. 

Mr. Hustvedt and Ms. Smith responded that the EPA believes that the proposed approach 

actually does offer the most flexibility for sources to consolidate their control efforts in fewer 

regulated loading areas. For example, many sources may be able to pipe regulated organic 

liquids to one or more controlled racks, while maintaining other racks in an uncontrolled 

condition for non-regulated liquids. The EPA has determined that allowing averaging of 

emissions is effective and workable only in very limited circumstances, and for OLD liquid 

transfer operations this would not be a feasible approach. 

Control cost estimates. SBA questioned the cost estimates presented for the flare control systems 

that would be installed at OLD transfer racks. Mr. Pawlow said that he had seen considerably 

higher cost figures for similar control systems in other industries. He asked whether the EPA 

could do a QC check on its estimates. 

Ms. Smith pointed out that only about 20 percent ofthe rule's annual cost burden is 

attributable to the rack controls. She stated that the OAQPS Control Cost Manual was used to 

derive these costs, and Mr. Sorrels provided the website where the manual could be found. Mr. 

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Memo to Docket A-98-13 

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Pawlow asked whether some facilities might have additional cost elements (such as long piping 

runs) that would create higher total costs. He also noted that the equipment leak component 

counts for which leak detection program costs were estimated appeared to be low versus the 

number of components seen at chemical plants. Mr. Hustvedt pointed out that the generally 

simpler transfer operations in the OLD industry account for fewer pumps, etc. to perform the 

liquid transfers. 

Mr. Pawlow asked whether the EPA could solicit comment on its projected control cost 

estimates in the preamble. In addition, he suggested that vendors of flare control systems be 

contacted in order to verify that the EPA's costs are realistic. 

Small business impacts. Mr. Sorrels pointed out that the projected rule impacts on small 

businesses were very low, and that only two firms are estimated to have compliance costs that 

exceed 1 percent of their revenues. Mr. Pawlow asked whether the EPA could perform a 

sensitivity analysis on this elasticity estimation, and Mr. Sorrels agreed that such an analysis 

could be added as a new appendix to the Economic Analysis report for this NESHAP. 

Miscellaneous comment. Mr. Allen referred to a typographical error that had been identified by 

DOT in Table 4, item 2 (C), ofthe proposed rule, which cited item 2.B instead of 2. A. The EPA 

agreed to correct this mistake. 

V. Action Items 

The EPA agreed to perform the following actions in response to the issues raised in this 

phone conference: 

1. Prepare a sensitivity analysis (as a new appendix to the Economic Analysis report) on the 1 

percent elasticity estimate. 

2. Correct the typographical error in Table 4, item 2 (C), ofthe draft proposed rule. 

3. Contact two or three vendors of flare control systems, to obtain an evaluation ofthe EPA's 

cost estimates for transfer rack controls. 

4. Prepare draft revisions to the preamble, soliciting public comment on: a) the language 

addressing the approach taken for regulatory overlap, and b) the estimated capital investment and 

annual costs for transfer rack control systems.