SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

FINAL DRAFT STAFF REPORT

Revised Proposed Amendments to Rule 4311 (Flares)

June 18, 2009

Prepared by: Anna Myers, Air Quality Specialist Saul Gamez, Air Quality Engineer

Reviewed by: Steve Enns, Air Quality Inspector

Homero Ramirez, Air Quality Engineer Colette Feldner, Senior Air Quality Specialist Joe Nazareno, Senior Air Quality Engineer George Heinen, Rule Development Supervisor Errol Villegas, Planning Manager

I. SUMMARY

A. Reasons for Rule Deve lopment and Implementation

The California Air Resources Board (ARB) and United States Environmental Protection Agency (EPA) classified the S an Joaquin Valley Air Basin (SJVAB) as

severe and serious non-attainment area for the state and federal ozone standards, respectively. In accor dance with Federal Clean Air Act (CAA) requirements for non-attainment areas, the San Joaquin Valley Unified Air

Pollution Control District (District) adopted the 2007 Ozone Plan to establish the strategy for attaining the federal eight -hour ozone standard. The SJVAB is also currently designated as nonattainment fo r the national ambient air quality standard (NAAQS) for particulate matte r with aerodynamic diameter of 2.5 micrometers or less (PM2.5). As such , the District's Governing Board adopted the 2008 PM 2.5 Plan on April 30, 2008.

The ozone and particulate matter attainm ent strategies are comprised of regulatory and incentive-based measures to reduce emissions of oxides of nitrogen (NOx), volatile organic compounds (VOC), particulate matter and sulfur oxides (SOx). As a result, this rule development project is subject to the Code of Federal Regulations (CFR), the CAA and the California Health and Safety Code (CH&SC) requirements.

This rule amending project is proposed to satisfy the goals of the District’s 2007

Ozone Plan and 2008 PM2.5 Plan. The draft amendments to Rule 4311 will seek to obtain as much NOx, SOx, PM, and VOC emission r eductions from the source category as expeditiously prac ticable, technologically feasible, and

1 Final Draft Staff Report with Appendices For Revised Proposed Amendments to Rule 4311SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

2 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 economically reasonable, as determined by the District’s Governing Board. Furthermore, the District intends to satisf y the requirements identified in Table 1.

Table 1 Subject Reference Requirement

BACM Federal Register

8/18/94 Provisions in attainment plans should include the application of best available control measures (BACM) to existing major stationary

sources.

BARCT CH&SC 40919(a)(3)

2007 Ozone Plan Ozone attainment plan should provide for best

available retrofit te chnology (BARCT) for existing permitted sources.

Deadlines Ozone Plan Adoption of rule amendments by the 2 nd
quarter of 2009.

Feasible

Controls CH&SC 40914(a)(2) Ozone attainment plans should include "all

feasible control measures."

RACT CAA 182(b)(2) and 182(f) Ozone attainment plans shall assure that reasonable available control technology (RACT) for oxides of nitrogen (NOx) and VOC is in use at sources and on source categories

at or above the RACT threshold.

RACT

Threshold 70 Federal Register

30592-30596
5/26/05 The applicable RACT threshold for control

measures shall be the threshold in effect on June 15, 2004. The Districts threshold on June 15, 2004 was 10 tons per year (tpy) for

NOx or VOC.

Reductions Ozone Plan and PM

2.5 Plan Emissions reduction will be calculated during the rule development process.

Timeline CAA Section 172(c)(1) Ozone attainment plans shall implement control measures as expeditiously as practicable, and provide for attainment.

B. Climate Change

The California Global Warming Solutions Act of 2006 (AB 32) created a comprehensive, multi-year program to reduce greenhouse gas (GHG) emissions in California, with the goal of restoring emissions to 1990 levels by 2020. In the coming years, ARB and the Legislature will be developing policies and programs to implement AB 32. There are many win-win strategi es that can reduce both GHG and criteria/toxic pollutant emissions . However, when situations that
involve tradeoffs between GHG and criteria or toxic pollutants ar ise, District staffSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

3 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 will give precedence to criteria or toxi c pollutant emissions due to the more immediate public health concerns a ssociated with such pollutants.

C. Description of Project

This rule project would amend Rule 4311 (F lares) to implement emission control requirements in the 2007 Ozone Plan as we ll as the 2008 PM 2.5 Plan. The changes being considered are contained in flare rules or permit conditions in other air districts in California, su ch requirements would be considered for

inclusion to ensure that Rule 4311 m eets federal RACT and BACM requirements as well as CH&SC requirements to impl ement BARCT and all feasible control

measures.

In developing the draft amendments to Ru le 4311, District staff evaluated the emission reduction potential of flare minimization plans (FMP) and other provisions that other air district s’ rules have already implemented, and

determined that it is feasible to require similar emission c ontrols for flares that are operating within the District. However, other relevant findings, available technical information, and input from stakeholder s were considered during the rule development process in order to further refine the draft ru le amendments.

D. Rule Development Process

As part of the rule development process, District staff conducted a public scoping meeting in April 2008. Three public workshops have been held: August 2008, January 2009, and March 2009. A soci oeconomic focus group was also conducted in January 2009 and March 2009. At the public meetings, District staff presented the objectives of the proposed rulemaking project, the draft amended rules, draft staff reports, explained the District’ s rule development process, solicited suggestions from affected stakeholders, and informed all interested parties about tentative upc oming workshop dates, comment periods, and project

milestones.

The knowledge gathered during the scoping meeting and public workshops was used to help with amending the draft rule and draft staff report. Each new draft rule and draft staff report was then presented to the public through public workshops. Each workshop was followed by a two week public comment period. Comments received during the public works hop process were incorporated in the amended draft rule as appropriate.

The final draft rule, draft staff repo rt, and socioeconomic analysis report will be published prior to the public hearing to consider the adoption of the amendments to the rule by the District's Governi ng Board. The District’s 2007 Ozone Plan committed to schedule the public hearing to consider the adoption of the amended rule in the second quarter of 2009.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

4 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 II. BACKGROUND

The EPA, per 40 CFR 52.65284, recommends the District “reconsider the utility of incorporating provisions such as t hose in South Coast Air Quality Management District (SCAQMD) Rule 1118 and Bay Area Air Quality Management District (BAAQMD) Rule 12-12 within Rule 4311 to aid their enforcing of the rule, developing an accurate emissions inventor y for theses sources, and minimizing excess emissions from flare activity to the maximum extent pr acticable.” The experience of the Bay Area Air Qualit y Management District (AQMD) and South Coast AQMD in incorporating FMPs have resulted in data being gathered, which

can be used to evaluate the effectiveness of FMPs in reducing flaring events.

Flaring is a high temperature oxidat ion process used to burn combustible components, mostly hydrocarbons, of wast e gases from industrial operations. 95 percent of the waste gases flared are natural gas, propane, ethylene, propylene, butadiene and butane. During combustion, gaseous hydrocarbons react with atmospheric oxygen to fo rm carbon dioxide (CO 2 ) and water. In some waste gases, carbon monoxide (CO) is t he major combustible component.

Flares generate air pollutants such as oxid es of nitrogen, sulfur dioxide, carbon monoxide, and particulate matter. Additionall y, there is a possibi lity of release of hydrocarbons that have not been completely combusted.

General Equipment Description There are two general types of flares, elevated and ground flares. Flares are categorized by the height of the fl are tip, and by the method of enhancing combustion by mixing at the flare tip (i .e., steam-assisted, air-assisted, pressureassisted, or non-assisted).

Elevated flares are more common and have la rger capacities than ground flares. In elevated flares, a waste gas stream is fed through a stack, which can be over

100 meters tall and is combusted at the ti p of the stack. An elevated flare consists of five components: a gas collection header (to collect gases from various process units), a proprietary s eal, water seal, or purge gas supply (to prevent flash back), a single or multiple -burner unit in the flare stack, and gas pilots and igniter.

Ground flares vary in complexity and can consist of either conventional flare burners discharging horizontally with no enc losures or of multiple burners in refractory-lined steel enclosures.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

5 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Complete combustion requires proper mixing of air and waste gas. Smoking may result from incomplete com bustion, depending upon the waste gas components and the quantity and distribution of combustion air. Waste gases containing methane, hydrogen, CO, and ammonia usually burn without smoke, while waste gases containing hea vy hydrocarbons cause smoke.

An external momentum force, such as st eam injection, is used for efficient mixing of air and waste gas, and turbulence, whic h promotes smokeless flaring of heavy hydrocarbon waste. Other external forc es may also be used, including water spray, high velocity vortex action, or natural gas. External momentum force is rarely required in ground flares. Co mbustion efficiency depends on flame temperature, residence time in the combus tion zone, vent gas flammability, auto ignition temperature, heating value in British thermal uni ts per standard cubic feet (Btu/scf), and turbulent mixing. These fa ctors promote a destruction efficiency of 98 percent or greater. Comp lete combustion would convert all VOCs to carbon

dioxide and water.

Figure 1. Industrial Flare

EPA, “13.5 Industrial Flares”. 1995.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

6 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Waste gases must have a fuel value of at least 200 to 250 British thermal units per cubic foot (btu/ft 3 ) for complete flare combusti on. If a waste gas does not have the required fuel va lue, then fuel must be added. Flares providing supplemental fuel to waste gas are known as fired, or endothermic, flares. In some cases, even flaring waste gases having the necessary heat content will also require supplemental heat.

Flares are normally used to dispose of low volume continuous emissions, but are designed to handle large quantities of waste gases associated with plant emergencies. Flare gas volumes can vary from a few cubic meters per hour during regular operations up to severa l thousand cubic meters per hour during major upsets.

III. DISCUSSION

SJVAPCD Rule 4311 (Flares) would be uni que from all other flare rules in California in that it applies to all flar es with the exception of municipal landfill flares. This source category currently in cludes flares associated with oil and gas production, combustion, sewage treatment, incinerators, petroleum refining, and

VOC control. Other air districts in Ca lifornia with flare rules apply those flare

rules to a limited number of sources. For example, the SCAQMD Rule 1113 (Emissions from Refinery Flares) and BAAQ MD Rules 12-11 (Flare Monitoring at Petroleum Refineries) and 12-12 (Flares at Petroleum Refineries) only apply to petroleum refining flares. The Santa Barbara APCD flare rule, Rule 359 (Flares and Thermal Oxidizers), applies to the use of flares and thermal oxidizers at oil and gas production sources, petroleum refiners, natural gas services and transportation sources, and wholesale trade in petroleum. The Ventura County APCD rule, Rule 54 (Sulfur Compounds) is not a flare rule but a sulfur compound rule which prohibits the discharge of sulfur compounds from any source, including flares, exceeding specified concen trations. All the aforementioned flare rules require submittal of a flare minimization plan.

A search of the District’s permits data base indicates that facilities from 16 different SIC codes are required to comp ly with Rule 4311 and will be affected by changes to the rule language. The diversit y of industries that must comply with

Rule 4311 is illustrated in Table 2.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

7 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Table 2. SIC Codes and Corresponding Industries

SIC SIC Industry

241 Dairy Farms

1311 Crude Petroleum and Natural Gas

1321 Natural Gas Liquids

1389 Oil and Gas Field Services, Not Elsewhere Classified

2037 Frozen Fruits, Fruit Juices, and Vegetables

2869 Industrial Organic Chemicals, Not Elsewhere Classified

2879 Pesticides and Agricultural Chem icals, Not Elsewhere Classified

2911 Petroleum Refining

3211 Flat Glass

4612 Crude Petroleum Pipelines

4922 Natural Gas Transmission

4952 Sewerage Systems

4959 Sanitary Services, Not Elsewhere Classified

5172 Petroleum and Petroleum Products Whol esalers, Except Bulk Stations

and Terminals

9199 General Government, Not Elsewhere Classified

9223 Correctional Institutions

Another difference between the SJVAB flares and the SCAQMD and BAAQMD flares is the quantity and the emissions from those flares. This difference is best illustrated by a comparison bet ween the quantity of flares that would be affected by the rule and amendments to it. Curr ently there are about 137 flares in the

SJVAPCD that are affected by Rule 4311, from an estimated 87 facilities. Whereas the SCAQMD has 27 flares and the BAAQMD has 17 flares affected by their respective flare rules. The SJVAPCD had 75.8 tpy of VOC emissions,
whereas the SCAQMD had an estimat ed 2,713 tpy. The only emission
information available from the BAAQMD included emissions data for sulfur, but NOx inventory was been request ed, but not received at t he time this report was prepared..

It is important to note that the em issions inventory for the SCAQMD and BAAQMD are from 2006 and 2008 respectively, the data was taken from the

district web sites. The emissions dat a from those districts is after the implementation of FMP and monitoring and reporting requirements, whereas the

SJVAPCD emission invent ory is pre-FMP.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

8 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 When comparing the South Coast and Bay Area with the San Joaquin Valley, the

difference in emissions of SO 2 is extremely higher. Even though the SJVAB has five times as many flares as the South Coast, the South Coast SO 2 emissions are 3.5 times as large as the SJVAB. Similarly, even though the SJVAB has 7 times as many flares as the Bay Area, the Bay Area SO 2 emissions are 5.7 times as large as in the SJVAB. A more detailed discussion of the SCAQMD and BAAQMD flare rules is provided in Secti on III A of this draft staff report.

Table 3 provides a comparison of the number of refineries and other sources covered by the flare rules of the SJVAPCD, SCAQMD, and BAAAQMD. It is important to note that whil e the number of the refinerie s in the three regions is approximately equal, the pr oduction capacities, and th erefore the relative emissions of the SJVAB refineries is signi ficantly lower than the other regions. This was an important consideration when determining appropriate monitoring and reporting requirements.

Table 3. Comparison of SJVAPCD, SCAQMD, and BAAQMD Flare Emissions

SJVAPCD SCAQMD 1 BAAQMD 1

Facilities affected by Flare Rule 87 9 5 Non-petroleum refining flares 130

Petroleum Refiner Flares 7 27 17 Petroleum Refining Facilities 5 7 5

2008 Total Annual Petroleum Refinery Production Capacity (MMBBL) 39.06 397.33 286.34

Criteria Pollutant 2 Emissions (tpy)

SOx 66 235 380

NOx 146 135 not available

ROG 76 94 not available

PM 21 31 not available

CO 276 459 not available

1. Data presented is recent avail able from SCAMQD and BAAQMD websites. 2. Criteria Pollutant information presented for SJVAPCD is a combination of the 137 refining and non-refining flares that will be affected by this rule. 3. Refiner production capacity from the Energy Information Association.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

9 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 IV. CURRENT AND PROPOSED REGULATIONS

Federal Requirements The EPA has promulgated standards for SO 2 emissions, in addition to establishing requirements for perform ance testing and compliance assessments, for flares at petroleum refineries.

The new source performance standards (NSPS) for refinery flares constructed or modified after June 11, 1973 are covered under 40 CFR Part 60, Subparts A and J. Subpart A applies to flares as general control devices, specifying design and operational criteria for new and modified flares. Requirements include operating the flare with no visible emission, monito ring the presence of the pilot flame with a thermocouple or equivalent device, and meeting heat content and maximum tip exit velocity specifications. Subpart J applies to flares at petroleum refineries, where flares are defined as fuel gas combustion devices, and are limited to burning fuel gas, for the maintenance of the pilot flame, containing hydrogen sulfide (H 2 S) in excess of 0.10 gr/dscf. Th is limitation does not apply during process upsets, relief valve leakage, or other emergency malfunctions, where vent gases or fuel gas are released to the flare. This subpart also requires that a continuous monitoring and recording device be installed to track emissions of

SO 2 or H 2 S from the flare, in addition to the in stallation of an oxygen monitor for correcting the emissions data for excess air.

The national emission standards for hazar dous air pollutants (NESHAP) for flares are covered in 40 CFR part 63, Subpart SS, which applied to closed vent systems, control devices, recovery devices and routing to a fuel gas system or process. Under the flare requirements of this subpart, flares are subject to compliance assessment and monitoring r equirements. Comp liance assessments include using EPA’s Method 22 to determi ne measure opacity, using Equation 1 (of 40 CFR Part 63, Subpart SS) to determi ne the net heating value of the gas being combusted, using EPA Method 2, 2A, 2C , 2D, 2F, or 2G of 40 CFR Part 60 Appendix A to measure the volumetric flow rate, and using flame or pilot monitors during compliance assessments. Flare monitoring require ments indicate that a device (e.g., thermocouple, ul tra-violet beam sensor, or infrared sensor) to detect the presence of the flare flam e must be used at all times when the flare is in use.

Bay Area Air Quality Manage ment District (BAAQMD) On June 4, 2003, BAAQMD adopted Rule 12- 11 (Flare Monitoring at Petroleum Refineries) requiring monitoring and record ing of emissions data for flares at petroleum refineries. This rule enabled BAAQMD to collect emissions data from refineries, which BAAQMD used to determi ne the causes of specific flaring events, as well as estimate the quant ity of emissions released during those events. As a result of findings obtained under Rule 12-11, Rule 12-12 (Flares at Petroleum Refineries) was adopted July 20, 2005.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

10 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Rule 12-12 reduces emissions from fl ares by minimizing the frequency and magnitude of flaring. Rule 12-12 also prohibits the us e of refinery flares without the refinery first creating, following, and annually updating an FMP for each flare. Facilities are required to submit flari ng reports when a flare releases more than 500,000 standard cubic feet of gas per calendar day (scf/day). The flaring report must identify the cause explain actions that will be taken to avoid flaring from that cause in the future, if possible. The ru le also requires continuous monitoring of the flare system’s knock-out drum wate r seal for leaks, and the submittal of annual reports to BAAQMD that evaluate flaring events that released less than 500,000 scf/day, but SO 2 emitted was more than 500 lbs.

FMPs have proven successful in the BAAQMD in reducing flare emissions. The following chart was taken from the 2008 stat us report on the Flare Minimization Plan Annual Update presented to the St ationary Source Committee by BAAQMD Staff on September 8, 2008. The chart illustrates the trend in refinery flare emissions since the adoption of the BAAQMD flare rules. Note that the adoption date of Rule 12-11 requiring flare moni toring was adopted in 2003 and Rule 12- 12 requiring flare minimization plans was adopted in 2005.

Chart 1. BAAQMD Refinery Flare Trends

Refinery Flare Emission Trend (2001-2007)

0 20 40 60 80 100 120 140 160 180 200

2001 2002 2003 2004 2005 2006 2007Millions

YearVent Gas Volume (scfd)

0 50 100 150 200 250 300 350ThousandsNMHC Emission (lbs)

Vent Gas NMHCSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

11 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 South Coast Air Quality Mana gement District (SCAQMD) SCAQMD adopted Rule 1118 (Emissions from Refinery Flares) in February of

1998. The emissions data collected as a result of Rule 1118, between 1999 and 2003, was analyzed and resulted in recomm endations for further strengthening emissions monitoring and reporting procedu res, leading to the adoption of amendments on November 4, 2005.

The 2005 amendments prohibit the flaring of vent gases except in emergency situations, or during specific operational needs such as startups, shutdowns, and turnarounds. Operational r equirements were established and practices put in place to minimize flaring events, set specific annual SO 2 performance targets, require flares to operate in a smokeless manner, and require annual inspections of pressure relief devices directly connec ted to flares. If a refinery does not

meet SO 2 performance targets, then that fac ility is required to have a FMP.

The rule also contains provisions for refineries to give 24-hour advance notice for each large planned flaring activity, as well as to notify SCAQMD within 1-hour of unexpected flaring events. Also required is the subm ittal of quarterly reports detailing flow, emissions, and cause of each flaring event. SCAQMD also requires refineries to set up a 24-hour public telephone number for inquiries on flaring events. Table 4 illustrates t he annual flare emissions reported to the SCAQMD during the years of 2000 through 2004. This table was copied from
the SCAQMD website.

Table 4. Rule 1118 Reported Annual Flare Emissions (tons)

Year Flow(scf) NOx VOC CO PM10 SOx Total

2000 4,085,000,000 136 125 733 43 2,633 3,670

2001 8,324,000,000 380 456 2,058 87 1,793 4,774

2002 2,440,000,000 83 78 450 25 754 1,390

2003 2,235,000,000 79 75 423 23 735 1,335

2004 2,392,000,000 93 70 364 27 352 906

Ventura County Air Pollution Control District (VCAPCD) Rule 54 (Sulfur Compounds) was adopted July 2, 1968, and last amended June 14, 1994. Rule 54 prohibits the discharge of sulfur compounds from any source, including flares, exceeding specified concen trations. Rule 54 not only applies to refinery flares but to non -refinery petroleum operations as well.

VCAPCD Rule 54 specifies that no per son shall discharge sulfur compounds which would exist as a liquid or gas at standard conditions, in excess of the specified concentrations. Rule language also specifies several scenarios that are exempt from rule requirements including unplanned fl aring, and planned flaring provided certain ci rcumstances are met.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

12 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Unplanned flaring is exempt from rule requirement s as long as the unplanned burning of gas is for emergency or safety concerns provided all the following conditions have been met a) the flaring is not the result of an intentional or negligent act or omission on the part of the operator or owner, b) The flaring is not the result of improper maintenance or improper setting of specific sensors, c) the flaring event results from operational problems, including but not limited to: emergency blowdowns, process upsets, power outages, and equipment breakdown, d) records or logs of each flaring event sha ll be kept, e) the owner or operator immediately under takes appropriate correct ive measures, f) the unplanned flaring event shall not exce ed 24 hours in duration and g) sulfur

emissions are minimized.

Planned Flaring Events are ex empt from rule requirem ents provided that a) a

notice to flare has been submitted in writi ng at least 72 hours prior to such work being done, which justifies that such work shall be done, b) each operator shall have a planned flaring managem ent plan, c) records of the date, time, duration, flare volume and estimated sulfur emissions (as pounds of SO 2 ) are kept during the entire flaring event, d) the District is notified in writing when work is completed e) sulfur emissions are mi nimized during the operation, and f) no flaring shall occur unless an excess em ission fee of $5.00 per pound of sulfur compounds emitted is paid to t he District each calendar year.

Each operator is required to submit a Flaring Management Plan to the District which includes descriptions of all meas ures to be implemented to decrease flare gas volume and reduce sulfur emissions, all planned operational or maintenance procedures that may cause flaring, design features of each flare system, all measures to be implemented to reduce the number of plann ed flaring vents including changes to maintenance or produc tion schedules or installation of new procedures or equipment and any other information determined by the APCO to be necessary for evaluating the qualifications of a source for this exemption.

Santa Barbara County Air Pollution Control District (SBCAPCD) SBCAPCD adopted Rule 359 (Flares and Thermal Oxidizers) on June 28, 1984. Provisions of this rule apply to the use of flares and thermal oxidizers at oil and gas production sources (SIC code 13), pet roleum refinery and related sources (SIC code 29), natural gas services and transportation sources (SIC code 49) and wholesale trade in petroleum/petro leum products (SIC code 51). For purposes of this staff report thermal oxid izer portions of that rule will not be discussed as it does not apply to this rule amending project.

Rule 359 sets specific requirements fo r the sulfur content in gaseous fuels, technology based standards, flare mini mization plans, emergency events, and emission and operatio nal limits.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

13 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Rule language includes Technology-Based St andards, that specify all flares shall be smokeless, the outlet shall be equipped with an automatic ignition system or shall operate with a pilot flam e present at all times, t he presence of the flame in the pilot of the flare sha ll be continuously monitored using a thermocouple or an equivalent device that detects the presenc e of a flame, and t he flame shall be operating at all times when combustible gases are vented through the flare.

A FMP shall be submitted by any source subject to this rule that operates a flare rated at 15 MMBtu/hour or gr eater. For planned flaring, the minimization plan for all sources subject to this rule shall list a targeted maximum monthly flared gas volume, which shall not exceed five percent of the average monthly gas handled/produced/treated at the source. Where limits have been established for sources the owner or operat or shall develop and submit an emissions mitigation plan, which shall achieve a reduction by 50 percent, of either the actual average monthly flare gas volume or the pr oposed volume limit, whichever reduction volume is greater.

Any flaring which causes an exceedance of the emission limits or standards of

this rule shall not be a violation of this ru le if the owner or oper ator of the source

demonstrates that the exceedance resulted from an emergency event. To demonstrate that an emergency even occu rred, the owner or operator shall follow specific guidelines stated in rule language.

Emission and operational limits shall apply to any source subject to the Rule and include the following: a) flares which use flow-sensing automatic ignition systems and which do not use a continuous flame p ilot shall use inert gas or PUC quality gas for purging, b) flares with a rating of 15 million Btu/hour or greater shall not exceed, for planned flaring, the targeted monthly volu me limit of flare gas established pursuant to the FMP, and c) pollutant emissions from all thermal oxidizers and ground-level enclosed fl ares with planned continuous flaring exceeding 120,000 scf/day sha ll meet the emission standards presented in rule language.

Rule 359 does not apply to the burning of sulfur, hydrogen sulfide, acid sludge or other sulfur compounds in the manufacturi ng of sulfur or sulfur compounds. For oil and gas sources (SIC code 13) that re cover sulfur as a by-product of gas treating/sweetening processes, the exempt ion for manufacturing shall apply only to those specific processes, e.g., sulfur recovery plant. The provisions of the rule, with the exception of Technology St andards, shall not apply to the burning of any gas with a net heati ng value of less than 300 Bt u/scf provided the fuel used to incinerate such gas does not contain sulfur compounds in excess of the following 15 grains/100cu.ft. in the Sout hern Zone, and 50 grains/100cu.ft. in the Northern Zone of Santa Barbara County.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

14 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Flare units rated at less than 15 MMBtu/hr, unless the total cumulative rating of

all such rated units at a source exce eds 50 MMBtu/hr and flares whose flaring operations solely consist of planned, cont inuous flaring due to the non-availability of a produced gas pipeline outlet are exempt from FMP requirements.

San Joaquin Valley Air Pollution Control District (SJVAPCD) District Rule 4311 (Flares) applies to operat ions involving the use of flares with the exemption of flares operated in municipal solid waste landfills, flares that are subject to the requirements of 40 CFR 60 Subpart WWW (Standards of Performance for Municipal Waste Landfills ), and flares subject to 40 CFR 60 Subpart Cc (Emission Guidelines and Co mpliance Times for Municipal Solid Waste Landfills).

District Rule 4311 currently has four main requirements:

• Technology – based standards listed to confirm with EPA requirements.

• Emission limits for ground–level, enclosed flares.

• The compliance determination and source testing for ground – level

enclosed flares.

• Record keeping requirements fo r flares used during an emergency,

records are to be retained documenti ng the duration of flare operation, amount of gas burned, and nature of an emergency situation, and are to be submitted to the APCO upon request.

B. Revised Proposed Draft Amendments

District staff is proposing to add moni toring, reporting requirements and flare minimization plans to the current flare ru le in order to reduce flare emissions in the SJVAB. FMPs in other districts, namely the South Coast and Bay Area have been shown to reduce flare emissions by minimizing the frequency and magnitude of flaring. As such, Distric t staff believes that implementing FMP requirements will reduce emissions from flares in the SJVAB.

Draft rule language has been reformatted in response to concerns that the previous formatting may have caused confusi on. By reformatting rule language, the rule language is more in line with other prohibitory rules at the SJVAPCD. The following is a summary of the majo r proposed draft amendments to Rule

4311.

Section 1.0 Purpose

Sulfur Oxides will be added to the emissions to be reduced from flaring activities.

Section 2.0 Applicability No changes are proposed for Section 2.0 at this time.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

15 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Section 3.0 Definitions Definitions would be added or amended to provide clarity and to reflect the additions of flare monitoring, flare reporti ng, and flare minimization plans to rule language.

Section 4.0 Exemptions No changes are proposed for Section 4.0 at this time.

Section 5.0 Requirements

Section 5.8 Flare Minimization Requirements A new requirement requiring flare minimi zation plans (FMP) effective on and after July 1, 2011 would be added to rule lang uage. Petroleum refinery flares and flares with a flaring capacity at or gr eater than 5 MMBtu/hr will be subject to FMP requirements. A standar d of 5 MMBtu/hr was det ermined appropriate because

this has been an established District st andard for permitting, as with District Boiler rules, and because of the low potentia l to emit from fl ares smaller than 5 MMBtu/hr compared to the potential to emit from large flares. A survey of the District permit database indicates the 5 MMBtu/hr threshold will capture about

75% of the flares in the SJVAB, representing 81% of NOx emissions from this
source category.

Petroleum refiners will be subject to FMP re quirements, regardle ss of the size of the flare, to ensure this rule is as st ringent as other flare rule requirements in

other districts in California.

Flaring at facilities subj ect to FMP requirements woul d be prohibited unless it is consistent with an approved FMP and all commitments due under that plan have been met. This standard shall not apply if the APCO determines, based on an analysis conducted in accordance with rule language, that the flaring was caused by an emergency, and was necessary to prevent an accident, hazard, or release of vent gas directly into the atmosphere.

District staff recognizes the difficulties of compliance with the submittal of FMPs for portable safety flares used during the drilling of crude oil and natural gas production wells. These types of flares are typically owned by rental companies

and are relocated from well site to well si te where they operate for time periods ranging from a few days to several mont hs. Stakeholders expressed concern that the preparation and approval of updated FMP may po ssibly hinder the use of these portable safety flares. As FMPs ar e site specific, it could be unclear how a company would obtain District approval of a generic FMP authorizing the operation of flares at well site locations, since the locations are not likely to be known in advance. Therefore, the Distr ict will provide a template FMP for these portable emergency flares, as part of the rule implementation phase, similar to the multiple location permi ts that are currently issued for these flares.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

16 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Section 5.9 Petroleum Refinery Performance SO 2 Targets A new section would be added to provide performance targets for emissions of sulfur, expressed as sulfur dioxide (SO 2 ), from flares at pet roleum refineries. The

new standard would set an emission lim its starting January 1, 2011, with a second, more stringent standard on January 1, 2017. This new standard was put in place to make District Rule 4311 as st ringent as the flares rule in the South Coast Air Quality Management District. The SO 2 emissions target will mirror the SCAQMD emission target in that it will be based on the annual crude processing capacity of each petroleum refiner. T he crude processing capacity will be based on information obtained from the Energy Information Association (EIA). Therefore, each petroleum refiner would have a SOx emission limit that is unique to that facility.

Research of the District permit database indicates that, based on current permits and report inventory, only one petroleum refinery will be affected by the new sulfur dioxide standard, and t hat refinery is already in compliance with the first of the two proposed performance standar ds. The SCAQMD rule set SO 2 standards to become more stringent and to go into e ffect every two years for eight years, until the most stringent st andard of 0.50 tons per MM bbl of crude processing capacity was met.

Research of the District permit database and conversations wit h the staff from the petroleum refinery affected by this new standard indicated that the refinery was in compliance with the first standard, and they believed, the second standard

as well. As a result of the resear ch, conversations and in response to the economic hardships facing the valley, staff is proposing to apply the first standard on the original proposed date, to ensure refiners don’t increase SO 2 emissions and encourage them to work toward the next standard. The next standard proposed would be in 2017 wit h 0.50 tons per MMbbl of crude processing capacity, which is also the original standard and date for this , the most stringent standard. By implementing this approach, the District will achieve the same

reductions in 2018 as we would if we we re to mirror the SCAQMD implantation schedule, while remaining sensitive to the current economic times in the valley.

Section 5.10 This section would include language in the requirements section of the rule to specify that the operator of the flare shall monitor vent gas flow with a flow measuring device, or other parameters as specified in the Permit to Operate. This section is not providing a new requirement rather this is a clarification of rule standards. This section was recently revised to exclude flares that cannot trigger a reportable flaring event. Details of this change and the history of this section are provided below.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

17 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Facilities subject to FMP requirement s are required to s ubmit an annual report, pursuant to Section 6.2.2, that summari zes all reportable flaring events as

defined in Section 3.0 that occurred during the previous twelve month period. A reportable flaring event, as defined by Section 3.31 is any flaring where more than 500,000 standard cubic feet of vent gas is flared per calendar day, or where sulfur oxide emissions are greater than 500 pounds per calendar day. In order to comply with the report in Section 6.2.2 it was implied that the operators would have to monitor vent gas flow, otherwise they would not know if the flare event was reportable or not.

This reportable flaring event requirement was numbered Section 6.4.5 in the first through third drafts of the rule. Through various revisions of the rule, this requirement is now Section 6.2.2. Howe ver, this reporting requirement has not changed since the first draft of the rule. Language similar to that in Section 5.10 was in previous drafts of the rule as Se ction 7.1. Section 7.1 was a Section of requirements for Flare Monitoring for petro leum refiners and flares with a flaring capacity equal to or greater than 50 MMBtu /hr. Upon review of rule language staff felt stakeholders subject to FMPs with flares smalle r than 50 MMBtu/hr might misunderstand the rule to believe t hey would not have to monitor flare gas flow, and as a result would be out of co mpliance with the reporting requirements

of Section 6.2.2. Theref ore, to improve clarity and alleviate the possibility of accidental non-compliance staff removed t he language in Section 7.1 and added language in Section 5.10.

District staff are aware that there are some flares that are subject to FMP requirements, meaning they are rated at and above 5 MMBtu/hr flaring capacity, but that cannot achieve the 500,000 scf or 500 pounds of sulfur oxide emissions per calendar day threshold for a repor table flaring event. The purpose of requiring flare vent gas flow monitoring, as stated above, is to comply with reporting requirements in Secti on 6.2.2. As it is unneces sary to monitor vent gas flow to prove compliance with Section 6. 2.2 for flares that cannot achieve the threshold limits, a provision has been adde d to rule language stating that if an operator can prove, based on permit conditi ons that the flare cannot achieve the reportable flaring event thre shold then the vent gas flow requirement of Section 5.10 shall not be required. This is not a relaxation of existing rule standards and is not a significant change due to it being an unnecessary monitoring requirement

for those smaller flares that can not flar e at levels that w ould trigger reportable flare event reports. Th is change will have no significant impact on rule requirements, emission reductions, or t he Districts ability to enforce compliance

of rule standards.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

18 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Section 5.11 This section would include language in the requirements section of the rule to specify that the operator of a petroleum refinery flare or a flare with a flaring capacity equal to or greater than 50 MMBtu/hr shall monitor the flare pursuant to

Sections 6.6 thru 6.10. This section is not providing a new requirement, but clarifying that this is a requirement in this rule. This section was previously

Section 7.0.

Section 6.0 Administrative Requirements Section 6.0 has been reorganized to clarif y the administrative rule standards.

Section 6.1 Recordkeeping The former Section 6.1 Compliance Determination has not been changed, but

rather it has been moved to Section 6.4 to pair it with Section 6.3 Test Methods. Recordkeeping has been moved from Se ction 6.2 to 6.1 and a new section, Section 6.2 Flare Reporting has been added to rule language.

Formerly Section 6.2, new Section 6. 1 recordkeeping requirements would be added to incorporate moni toring data, annual reports , and FMPs. Operators would be required to maintain copies of FMPs, annual reports submitted to the APCO pursuant to Section 6 and Section 7, as applicable, and monitoring data collected pursuant to Section 7.0 as applicable , at the facility for a period of five years. The effective dates of record keeping requirements are set to align with compliance and FMP dates.

Section 6.2 Flare Reporting

A new section would be added to rule l anguage to provide clarity to rule standards. The requirements in Section 6.2 are not new reporting requirements, but have been pulled from other sections of the rule and placed together to provide fluidity and clar ity to rule language.

Section 6.2.1 Unplann ed Flaring Event
This section was Section 6.4. 4 in previous drafts of this rule. This section will require the operator to notif y the APCO within 24 hours afte r the start of the next business day or within 24 hour of their disco very, which ever occurs first. The

notification shall include t he flare source identificati on, the start date and time,

and the end date and time. This section has been modified from the previous versions in that the previous version of the draft rule required a notification within 24 hours of the start of the flare event. That reporting timeline has been amended to include 24 hours after the discovery or 24 hours after the start of the next business day, which ever occurs firs t. This change is not a significant change because it aligns this rule with ot her flare rules in other districts.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

19 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Petroleum refineries in the SCAQMD and BAAQMD are monitored at all times making it possible to provide the responsible district with notific ation within a very short time. However Rule 4311 applies to flares in several industries, and many flares within the valley are unmanned flares located at remote locations, making

immediate notification to t he district infeasible.

Unlike police or fire fighter s, the District is not a firs t responder in an emergency

situation so immediate not ification is not essential. During an emergency situation, it is more vital for the op erator to be concerned about controlling the situation than satisfying a reporting requirem ent. Further, the rule provides up to 24 hours for reporting but in normal circ umstances, the event would be reported well before the deadline. The propos ed reporting of an unplanned flare event within 24 hours does not affect compliance, enforcement, or the District’s ability to collect data regarding flare events. This is not a significant change because it better aligns requirements with those of SCAQMD and BAAQMD.

Section 6.2.2 Report able Flaring Event This section was Section 6.4.5 in previous drafts of Rule 4311. This section will require an annual report of all reportable fl aring events that occur. The report shall include the primary cause and cont ributing factors of the flaring event, prevention measures consi dered or implemented to pr event recurrence, if appropriate an explanation of why the flaring was an emergency, and the date, time, and duration of each flaring event. This section has not been amended from the previous version.

Section 6.2.3 Annual Monitoring Report This section was previously Section 7.7 in other drafts of the rule. Annual monitoring reports will be submitted to the APCO within 30 days following the end of the previous 12 month period and shall include data regarding volumetric flow, hydrogen sulfide, methane, and hydrocarbon content of vent gas composition, volumetric flows of pur ge and pilot gas, explanations of flare monitoring system downtimes, and a flow verification report.

For the sake of clarification District st aff is elaborating on the annual monitoring reporting requirements. The reports will be due to the APCO within 30 days following the end of each 12 month period for which they are responsible. For example, this standard goes into effect on July 1, 2012 so the annual report would be due to the APCO within 30 days afte r July 1, 2012, not on July 1, 2012.

The section regarding emissions calc ulations has been removed from rule language. Staff have reviewed rule l anguage and requirements and it has been

determined that the secti on was unnecessary and irrelevant to rule requirement and standards. As this requirement is obs olete to the rule it has been removed. This is not a significant change to rule language as it was an erroneous standard

that has been removed.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

20 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Section 6.3 Test Methods

Section 6.3.4 Testing and Sampli ng Methods for Flare Monitoring

A new section would be added to establis h new test methods to fulfill flare monitoring requirements. The test met hods in Section 6.3.4 are to be used to comply with monitoring requirements pursuant to Section 7.2 (Vent gas composition monitoring). The test met hods presented are thos e established by the Bay Area and South Coast air distri cts as appropriate for monitoring requirements.

This section of the rule was amended to simp lify it from previous draft versions. Previously, it was separated out into four subsections. As many of the test methods were repeated for each monitori ng methodology, the Revised Proposed Draft Rule has been simplified in that ther e are no subsections, but it still includes all test methods previously presen ted before. New language has been added that provides operators the opportunity to us e an alternative method as long as it has been approved by the APCO, ARB, and EPA.

Section 6.4 Compliance Determination

Section 6.4 would be moved fr om its previous location of Section 6.1 to provide fluidity and clarity to rule language. There have been no changes to standards or requirements of the Compliance Determination section.

Section 6.5 Flare Minimization Plan (FMP) Section 6.5 was Section 6.4 in previous dr aft versions of the rule. A new section would be added to provide administrative re quirements for FMPs . A FMP would be required for any petroleum refinery flar e and for any other flare with a flaring capacity at or greater than 5 MMBtu/hr. Flares would be subject to commitments

made in each individual flare minimizati on plan. The new section specifies what is to be included in the plans, timelines fo r compliance, FMP renewal instructions, and associated reporting requirements.

The due date for the initial submittal of FM Ps to the District for review would be July 1, 2010. This will give facilities about twelve months after the rule adoption date to plan, write, and submit FMPs. A specific guideline for the formatting of the FMPs was purposely not spec ified in order to provide flexibility to industry in complying with this requirement. If a facility has a plan with another government entity that meets all requirements of the FMP, t hat facility may submit that plan in lieu of writing a new FMP pr ovided that plan includes the information required by

a FMP.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

21 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 The effective date for implementation of FMP requirements is July 1, 2011, as

referenced in Section 5.8 of the rule. This will give District staff twelve months to review, request corrections or additi onal information, and approve FMPs. Regardless of approval date of FMPs, co mpliance implementat ion will begin July 1, 2011. This means if a FMP is approved any date bef ore July 1, 2011

enforcement of the FMP will not begin until July 1, 2011. These dates and this compliance enforcement decision was made in an effort to unify all dates for all facilities for FMP compliance and reporting. A provision has been added to rule language to enable facilities to protect confidential or proprietary information were the public to request to view said FMP.

The operator of a flare w ould be required to submit an annual report to the APCO to report each Reportable Flaring Event that occurred duri ng the previous 12 month period. A reportable flaring event is any flaring where more than 500,000 standard cubic feet per day of vent gas is flared or more than 500 pounds of

sulfur dioxide is emitted. This will make th is rule as stringent as other districts in California, and District staff feel that 500,000 scf/day is a reasonable amount to request reporting because 500,000 scf conver ts into approximately 50 lb of NOx

emissions as illustrated:

(500,000 scf)(1000 Btu/scf)(1 MMBtu/1,000,000 Btu)(0.1 lb NOx/MMBtu)=50 lb NOx

Section 6.5.3 This section has been modified from previous versions of the draft rules. It has been modified to improve clarity of rule requirements. Language has been

added to indicate that submissi on of a revised FMP is nec essary if the operator is installing or modifying any equipment where such a change would require an authority to construct (ATC) permit and woul d impact emissions from the flare. Changes to equipment that does not affect flare emissions would be made at the time of the five-year FMP review. This requirement would keep the FMP current when flare emissions are impacted but reduce unnecessary paperwork when

such emissions are not affected.

Rule language has also been amended to cl arify that ATCs deemed complete before the rule adoption date of June 18, 2009 shall not be required to update FMPs. Meaning that if an operator makes modifications which trigger an update of the FMP before the impl antation of FMPs , that operator would not need to update the FMP because they essentially do not exist yet. However, if the operator obtains an ATC permit after the rule adoption date but does not implement changes per the ATC permit until after the implementat ion of the FMP, then that operator would have to update the FMP. As ATC permits have a two year life span, it would be possible for oper ators to get ATC permits prior to FMP implementation and not make such c hanges until a year or two after FMP implementation, for this reason District st aff feel it would be necessary to update FMP information to reflect changes in or der to keep FMP information current.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

22 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Finally, this section would be been amended to explain that the removal or decommissioning of equipment listed in an FMP does not tri gger an FMP update, except for the five year update, prov ided there is no increase in emissions

associated with the decommissi oning of the equipment.

These revisions from the last draft are not significant changes in that they do not change rule standards or require ments nor affect the Distr icts ability to enforce compliance with rule language.

Draft rule language requiring the 30 day public review and comment period has been removed due to the redundancy associ ated with the public review and comment period provided via District Ru le 2201 and Rule 2520. Also, Title V permits are renewed every five years and are subject to public comment, thus reducing redundancy. District staff also re cognizes that the public has access to view FMPs via public records request; t herefore the public is not being denied access to FMPs by removal of the redundant 30 day review language.

FMP language has been simplified from that of the BAAQMD and SCAQMD because staff feels we can achieve the same type of results as the South Coast and Bay Area did with less of a burden on indust ry. Staff feels this is appropriate

also due to the small size of refineries and emissions from flares when compared
to SCAQMD and BAAQMD. Pleas e see Section III (Discussi on) of this draft staff report for a more thorough discussion of flare emissions compared to SCAQMD
and BAAQMD.

FMP renewals would be every five year s to reduce the regul atory burden from industry. This is an appropriate measur e because it aligns with the Title V permit renewals. It is as stringent as other dist ricts because any time a facility modifies or installs equipment that requires a permi t to operate, they must also update the FMP at the same time. Therefore, annual updates would be unnecessary. The five year standards shall remain to pr ovide operators with the opportunity to reflect on the past five years of emissions, fl aring, and activities at the facility, as well as evaluate the applicability of insta lling any new technologies that may have been developed during that fi ve year period.

Other proposed FMP requirements include notifying the APCO within 24 hours of an unplanned flaring event and the submi ttal of an annual report to the APCO. The annual report shall summarize R eportable Flaring Events during the previous 12 month period, the result of t he investigation of what caused the flare, prevention measures consider ed, if appropriate explanat ion of why flaring was an emergency and the date, time, and duration of the even t. This portion of the FMP requirements of the rule lan guage has been moved to Section 6.2.1 Unplanned Flaring Event in an effort to improve rule clarity.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

23 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Monitoring and Reporting Requirements

Previous versions of Draft Rule 4311 included all monitoring and reporting requirements for petroleum refinery flares and flares with a flaring capacity at or greater than 50 MMBtu/hr together in one Se ction of the rule. Conversations with

stakeholders revealed that confusi on was caused by having monitoring and reporting standards together. In an effort to reduce th is confusion the Reporting Requirements have been moved to Se ction 6.2 Flare Reporting.

Monitoring requirements have been simplified fr om previous versions of the draft rule, District staff feels the same or a similar amount and type of information would be gathered but in a less complicat ed manner from that required by the
SCAQMD and BAAQMD.

Section 6.6 Vent Gas Composition Monitoring Previously Section 7.2, this section of t he rule applies to petro leum refinery flares and to flares that have a capacity at or greater than 50 MMBtu/hour. The decision to include flares with capacitie s at or greater than 50 MMBtu /hr was made due to the high potential for emissions fr om such large flares. This section would be added to provide requirements of vent gas composition monitoring. Operators have five options to choose fr om in order to comply with monitoring requirements. Section 6. 6.5 (formerly Section 7.2. 5) has been amended since the previous version. Previously it onl y applied to petroleum refiners with flares that have a flaring capacity less t han 50 MMBtu/hr, but has been amended to allow all flares subject this section to have this option for compliance.

Section 6.7 Pilot and Purge Gas Monitoring Previously Section 7.3, this would be a new section to the rule and applies to petroleum refinery flares and to flares t hat have a capacity at or greater than 50

MMBtu/hour. The section would be added to provide a requirement for the monitoring of the volumetric flow of purge and pilot gas. Pilot and purge gas are to be monitored by flow measuring devices or other parameters as specified on the Permit to Operate so that volumetr ic flows can be calculated based on pilot design and the parameters monitored.

Section 6.8 Water Seal Monitoring Previously Section 7.4, this section of t he rule applies to petro leum refinery flares and to flares that have a capacity at or greater than 50 MMBt u/hour. This new section would be added to require the operator to monitor the water seal and record the water level and pre ssure of the water seal that services the flare each day, or as specified on the operating permit.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

24 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 Section 6.9 General Monitoring Previously Section 7.5, this section of t he rule applies to petro leum refinery flares and to flares that have a capacity at or greater than 50 MMBt u/hour. This new

section would set a limit for the period of flare m onitoring system inoperation, provide requirements for what to do dur ing periods of inoperation of certain sampling equipment, require that all monitors be maintained and calibrated, and provide guidelines for in-line continuous analyzers and flow monitoring data.

General monitoring requirement pertains to the monitoring equipment itself, not the flare or the equipment f eeding to the flare. The timeline requirement of the 14 days per 18 consecutive months pertains to monitoring equipment, meaning the monitoring equipment itself sha ll not be down more than 14 days per 18 consecutive months. Also, time line does not include periods when the system feeding the flare is not in operation bec ause the flare will not be combusting fuel

therefore there is no need to monitor it.

Section 6.10 Video Monitoring Previously Section 7.6, this section of the rule applies to petroleum refineries only. An alternative monitoring to vi deo monitoring has been written into rule language to provide flexibility for facilit ies to comply with the rule while still ensuring enforceability of the requi rements. Language has been designed to give operators the opportunity to work with the District permit engineer to determine a monitoring methodology that will be appropriate for each facility based on its unique situation. Alternativ e monitoring will provide equivalent

verification data that video moni toring would have provided.

As written into other air district rule s in California video monitoring was added to provide additional information regarding fl aring, not as a so le means of flare
verification. The BAAQMD staff report describes video monitoring “The video monitoring requirements are intended to provide a backup to the extensive data

that will be available after the rule’s other monitoring requ irements go into effect. ... With the proposed rule, video data will be redundant ...”

The SJVAPCD rule faces unique challenges, due to the diversit y of sources with which the rule applies. Unlike SCAQMD and BAAQMD which only regulate refinery flares, all the flares subjec t to Rule 4311 monitoring and reporting requirements are not necessarily petroleum refiners, but are from a diverse set of sources. Many of the flares may be at remote locations or mobile flares that are periodically relocated.

Section 7.0 Compliance Schedule This section was Section 8.0 in previous versions of the draft rule, but was Section 7.0 of the original rule. Flares that are exempt under Section 4.0 that lose exemption status shall be in fu ll compliance with all the applicable requirements of this rule on the date the exemption status is lost.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

25 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 V. EMISSIONS AND EMISSIONS REDUCTIONS

A. Emissions

The emission inventory from sources subj ect to Rule 4311 with current controls in place is estimated to be 0.33 tons per day (tpd) NOx, 0.01 tpd PM2.5, and 0.63 tpd VOC in 2009. District staff previous ly believed the emissions inventory may have only accounted for the natural gas supp lemental fuel to keep the flare pilot on at all times, and that it did not account for the actual amount of emissions from combusting the VOC–containing recovered waste gases from process operations. District staff has since updat ed the emissions inventory for purposes of this rule amending project based on re search of the District database for emissions from flares at facilities subj ect to Rule 4311. The updated emissions inventory is presented in Table 5.

Table 5. Reported Emissions from Facilities Subject to Rule 4311

Emissions VOC CO NOx PM 10 SO 2 Tons per day 0.208 0.756 0.401 0.058 0.181

Emissions from flaring include carbon particles (soot), unburned hydrocarbons, CO, partially burned and altered hydrocar bons, NOx, and if sulfur- containing materials are flared, sulfur dioxide (SO 2 ). The quantities of hydrocarbon emissions generated relate to the degr ee of combustion. The degree of combustion depends largely on the rate and ex tent of fuel-air mixing and on the flame temperatures achieved and maintain ed. Properly operated flares achieve at least 98 percent combustion e fficiency in the flare plume.

The tendency of a fuel to smoke or make soot is influenced by fuel characteristics and by the amount and dist ribution of oxygen in the combustion

zone. Fuel characteristics includ e the carbon-to-hydrogen ratio and the molecular structure of the gases to be burned. Soot is e liminated by adding steam or air; hence, most industrial fl ares are steam-assisted and some are airassisted. Flare gas composition is a crit ical factor in determining the amount of
steam necessary.

Air is supplied to the flame as primary and secondary air. Primary air is mixed with the gas before combustion. Sufficient primary air must be supplied, if the amount of primary air is in sufficient, the gases entering the base of the flare are preheated by the combustion zone, and larger hydrocarbon molecules crack to form hydrogen, unsaturated hydrocarbons, and carbon. The carbon particles may escape further combustion and cool down to form soot or smoke.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

26 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 B. Emissions Reductions

Emission reductions resulting from this rule amending project ar e expected to be an estimated 0.06 tons per day of sulfur dioxide. This will be a 60% reduction of emissions from petroleum refi neries. A complete analysis is pres ented in Appendix B of this staff report.

Review of Staff Reports and emissions data pres ented by the BAAQMD and
SCAQMD since 2000 has revealed that FMP implementation has resulted in VOC and NOx emission reductions, in addition to expected SO 2 reductions. However, staff is not going to quantif y those reductions in this rule amending project because

we do not have accurate information as to how much reductio ns would be achieved by implementation of FM P requirements. SCAQMD and BAAQMD have both presented data to the public verifying th at FMP implementation has resulted in emission reductions, as pres ented in Section III-Discussi on of this staff report.

Emission reductions resultin g from FMP implementation will be quantifiable in the future by comparing new post-FMP emission data with the pre-FMP emission data of previous years. Administrative costs will be incurred by operators in efforts to comply with FMP and reporting requirem ents; however, thes e costs are expected

to be minimal.

Under normal operating conditions, flares burn a small amount of gaseous fuel to keep the pilot flame lit in the event of an emergency waste gas release. Normal operations also include continuously burning sweep gas, which has a considerably greater flow rate than the pilot gas. Pressure relief valves, compressor seals, and analyzer purge lines also vent (either continuously or intermittently) to the flare.

Reduction of flaring can be achieved by installing or improving flare gas recovery

units. Emissions can be further reduced by improved process control equipment, new flaring technology, and new ignition systems with low-pilo t-gas consumption or elimination of pilots altogether with the use of new ballistic ignition systems.

Flare Gas Recovery Units (FGRU)

District staff believes the most efficient method of reducing SO 2 emissions from flaring is to reduce flaring by the installati on of flare gas recovery units. Flare gas recovery units reduce emissions from fl ares by recycling the gases vented during emergency releases instead of combusting them in flare. The vent gases are collected in the flare header, compressed, cooled, and returned for re-use in the refinery as fuel gas or process feedstock. Flare gas recovery systems also have a safety feature built in that allows exce ss vent gas to be combusted in the flare in the event that the compresso r system is at full capacity.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

27 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 VI. COST EFFECTIVENESS ANALYSIS

Pursuant to CH&SC Section 40920.6(a), a cost effe ctiveness analysis is required for rules that implement BARCT . The purpose of the cost effectiveness analysis is

to evaluate the economic reasonableness of the rule or rule amendments. The analysis also serves as a guideline for developing the control requi rements of the

rule.

SO 2 requirements implement BARCT and are the only emissions limits established in this rule amendment project, theref ore a cost effectiveness analysis was

conducted for co mpliance with SO 2 emissions limits only. Other draft amendments do not implement BARCT requirements, and therefore are not s ubject to the cost effectiveness analysis mandat e. The cost effectiveness analysis determined that

the SO 2 emissions limits are cost effective. The cost effectiveness analysis is presented in Appendix C of th is draft staff report.

VII. SOCIOECONOMIC ANALYSIS

Pursuant to CH&SC Section 40728.5, “whenever a district intends to propose the adoption, amendment, or repeal of a rule or regulation that will si gnificantly affect air quality or emissions limitations, that agency shall, to the extent data are available; perform an asse ssment of the socioeconomic impacts of the adoption, amendment, or repeal of the rule or regulation.”

This rule amending project will have financ ial implications to the operators associated with it; therefore the soci oeconomic analysis has been conducted and

includes costs associated with the draft FMP, and the monitoring and reporting requirements presented in the draft rule . District staff encouraged industry to

contribute costs for the socioeconomic analysis.

As a part of the District’s socioeconomic analysis process, District staff convened a Focus Group to assist in the developm ent of the socioeconomic report for the new proposed amended rule. The Focu s Group consisted of volunteers and assisted with the socioeconomic analysis by gathering and pr oviding information about costs expected to be incurred to co mply with the rule and hypothetical business responses to those costs. Th is information and supporting data was provided to an outside consultant who id entified and analyzed the socioeconomic impacts of the proposed amendments to Rule 4311 on the regional economy. Please see Appendix D for further details.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

28 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 VIII. RULE CONSIS TENCY ANALYSIS

Pursuant to CH&SD Se ction 40272.2, District staff has prepared a rule consistency analysis of Rule 4311 that compar es the elements of amendments with the corresponding elements of other District rules, federal regulations and guidelines that apply to the same source category or type of equipment. District staff found that none of the proposed r equirements of these rules would conflict with other District rules, or federal ru les, regulations, or policie s covering similar stationary sources. The rule consistency analysis is presented in Appen dix E of the Final Draft Staff Report.

VII. ENVIRONMENTAL IMPACTS

Pursuant to the Californ ia Environmental Quality Act (CEQA), District staff investigated the possi ble environmental impacts of the proposed am endments to Rule 4311. Based on the lack of evidence to the contrary, District staff has concluded that the proposed amendm ents to the rules will not have any significant adverse effects on the environm ent. Staff recommends filing a Notice of Exemption under the provisions of Pub lic Resource Code 15 061 (b) (3).

IX. REASONABLY AVAILABLE CONTROL TECHNIQUES (RACT)

ANALYSIS

RACT Discussion

The Clean Air Act (CAA) Section 182(b)(2) states that ozone attainment plans

shall assure that RACT for volatile organic compounds (VOC) is applied at certain sources. Section 182(f) extends federal RACT requirements to NOx rules and major NOx sources. District Rule 4311 is a NOx rule, t herefore underwent a RACT analysis during this rule amending project. A RACT analysis requires an

examination of a rule against Federal rules, regulations, and technology guidelines as well as compari ng it against rules from other Districts in California. District Rule 4311 was compared to federal and state regulations and guidance. The following is a discussion of that analysis.

District staff compared emission limits, optional control requirements, and work practice standards in District Rule 4311 to comparable requirements in rules from

the other Air Districts in California nona ttainment areas. Further discussion and comparisons of District Rule 4311 with rules in other Air Districts in California is presented in Section III “Discussion” of the Final Draft Staff Report. District staff

has concluded based on the af orementioned analyses, t hat District Rule 4311 satisfies RACT for flaring operations.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

29 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 A. Comparison with Federal Rules and Regulations

EPA – Control Technique Guidelines (CTG) - There is no CTG for this source
category.

EPA – Alternative Control Technology (ACT) - There is no ACT for this source
category.

Standards of Performance for New Stationary Sources (NSPS )

40 CFR 60.18 (General Control Device Requi rements) specifies certain minimum equipment performance standards for equipment used as control devices. In the case of flares, the CFR specifies no visi ble emission as well as certain equipment

standards. Since NOx and VOC are invisi ble gasses, this portion of the CFR does not identify RACT for flares.

40 CFR 65.147 is part of the f ederal consolidation air rule. It essentially echoes 40 CFR 60.18 and as such does not identify RACT for flares.

National Emission Standards for Haza rdous Air Pollutants (NESHAPs) and

Maximum Achievable Contro l Technologies (MACTs) - There is no NESHAP or MACT for this source category.

B. Comparison with Other Ca lifornia Non-Attainment Areas

District staff compared emission limits, optional control requirements, and work practice standards in District Rule 4311 to comparable requirements in rules from the following California nonattainment areas:

• South Coast AQMD Rule 1118 (Emissions from Refinery Flares) amended February 1998

• Bay Area AQMD Regulation 12 Rule 11(Flare Monitoring at Petroleum Refineries) adopted June 4, 2003

• Bay Area AQMD Regulation 12 Rule 12 )Flares at Petroleum Refineries) adopted July 20, 2005

• Sacramento Metro AQMD has no specif ic prohibitory rule for flares

• Ventura County APCD has no specific prohibitory rule for flares.

SCAQMD Rule 1118 (Emissions from Refinery Flares)

The emissions data collected as a result of Rule 1118, betw een 1999 and 2003, was analyzed and resulted in recomm endations being made for further strengthening emissions monitoring and reporting procedures, leading to the adoption of amendments on November 4, 2005. The 2005 amend ments prohibit the flaring of vent gases except in emergency situations, or during specific operational needs such as startups, shutdowns, and turnarounds. OperationalSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

30 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 requirements were established and practices to minimize flaring events, set specific annual SO 2 performance targets, require fl ares to operate in a smokeless manner, and require annual inspections of pressure relief devices directly

connected to flares. The rule also contains provisions for refineries to give 24- hour advance notice for each large planned fl aring activity, as well as to notify SCAQMD within 1-hour of unexpected fl aring events. Also required is the submittal of quarterly reports detailing fl ow, emissions, and cause of each flaring event. SCAQMD also requires refinerie s to set up a 24-hour public telephone number for inquiries on flaring events.

BAAQMD Regulation 12 Rule 11 and Regulation 12 Rule 12

BAAQMD Rule 12-11 requires that operator s monitor and record emissions data for flares at petroleum refineries. This rule enabled BAAQMD to collect emissions

data from refineries. With emissi ons data BAAQMD was able to determine causes of specific flaring events, as well as estimate the quantity of emissions released during those events. As a result of findings obtained under Rule 12-11, Rule 12-12 was adopted. Rule 12-12 reduces emissions from flares by minimizing the frequency and magnitude of flar ing. Rule 12-12 also prohibits the use of refinery flares without the re finery first creating, following, and annually updating an FMP for each flare. Facilities are required to submit flaring reports when a flare, at that fac ility, releases more than 500, 000 standard cubic feet of gas per calendar day (scf/day). The flar ing report must identify the cause and to avoid flaring from that cause in the future, if possible. The rule also requires continuous monitoring of the flare system’s knock-out drum water seal for leaks, and the submittal of annual reports to BAAQ MD that evaluate flaring events that released less than 500,000 scf/day, but SO 2 emitted was more than 500 lbs.

C. Conclusion

District staff concludes that District Rule 4311 satisfies RACT for flaring operations in terms of emission limits and equipment standards.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Final Draft Staff Report: Rule 4311 (Flares) June 18, 2009

31 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4311 X. REFERENCES

1. Bay Area AQMD. “Rule 12-11 Misce llaneous Standards of Performance, Flare Monitoring at Petroleum Refiner ies” and “Staff Report”. June 4,

2003. 2. Bay Area AQMD. “Rule 12-12 Misce llaneous Standards of PerformanceFlares at Petroleum Refineries” and “Staff Report”. July 20, 2005. 3. Code of Federal Regulations . “40 CFR Part 52. 65283”.

4. EPA. “13.5 Industria l Flares”. January 1995.

5. EPA. “CAM Technical Referenc e for Monitoring Equipment and

Instruments.” 1998. 6. John Zink. “Flare Gas Recovery Unit”. www.johnzink.com 7. Lawrence Berkeley National Laboratory . “Profile of the Petroleum Refining Industry in California”. March 2004. 8. Levy, Bob. “Reducing Emissions Fr om Plant Flares”. March 23, 2006. 9. Mid-Atlantic Regional Air M anagement Association (MARAMA). “Assessment of Control Technology Op tions for Petroleum Refineries in the Mid-Atlantic Region”. Final Report. January 2007.

10. MARAMA. “Model Rule for Petroleum Refinery Flares”. October 13, 2006.

11. National Association of Clean Air Agencies (NACAA). “Letter to U.S. Environmental Protection Agency. Docket ID No. EPA-HQ-2007-0011”. August 22, 2007. 12. San Joaquin Valley Unifi ed APCD. “2007 Ozone Plan”. 2007. 13. San Joaquin Valley Unified APCD. “2008 PM 2.5 Plan”. 2008. 14. Santa Barbara County APCD. “Rule 359 – Flares and Thermal Oxidizers”. June 26, 1994.
15. South Coast AQMD. “Control of Em issions from Refinery Flares”.
16. South Coast AQMD. “Rule 1118 - C ontrol of Emissions from Refinery Flares” and “Staff Report”. November 4, 2005. 17. Ventura County APCD. “Rule 54 – Sulfur Compounds”. Adopted 7/2/68.

Last revised 6/14/94.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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