SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 

Final Staff Report 

Proposed Amended Rule 463 - Organic Liquid Storage 

November 2011 

Deputy Executive Officer 

Planning, Rule Development & Area Sources 

Elaine Chang, DrPH 

Assistant Deputy Executive Officer 

Planning, Rule Development & Area Sources 

Laki Tisopulos, Ph.D., P.E. 

Planning and Rules Manager 

Planning, Rule Development & Area Sources 

Naveen Berry 

AUTHOR: DAIRO MOODY - AIR QUALITY SPECIALIST 

REVIEWED BY: DAVID ONO - PROGRAM SUPERVISOR 

 JOHN OLVERA - PRINCIPAL DEPUTY DISTRICT COUNSEL 

 MEGAN LORENZ - DEPUTY DISTRICT COUNSEL II 

CONTRIBUTORS: BARBARA RADLEIN - AIR QUALITY SPECIALIST 

 GREG HUNTER – AIR QUALITY SPECIALIST 
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 

GOVERNING BOARD 

Chairman: DR. WILLIAM A. BURKE

Speaker of the Assembly Appointee 

Vice Chairman: DENNIS YATES 

Mayor, Chino 

Cities of San Bernardino County 

MEMBERS: 

MICHAEL D. ANTONOVICH 

Supervisor, Fifth District 

County of Los Angeles 

JOHN J. BENOIT 

Supervisor, Fourth District 

County of Riverside 

MICHAEL A. CACCIOTTI 

Councilmember, South Pasadena 

Cities of Los Angeles County/Eastern Region 

JANE W. CARNEY 

Senate Rules Appointee 

JOSIE GONZALES 

Supervisor, Fifth District 

County of San Bernardino 

RONALD O. LOVERIDGE 

Mayor, Riverside 

Cities of Riverside County 

JOSEPH K. LYOU, Ph. D. 

Governor’s Appointee 

JUDITH MITCHELL 

Councilmember, Rolling Hills Estates 

Cities of Los Angeles County/Western Region 

SHAWN NELSON 

Supervisor, Fourth District 

County of Orange 

JAN PERRY 

Councilmember, Ninth District 

City of Los Angeles 

MIGUEL A. PULIDO 

Mayor, Santa Ana 

Cities of Orange County 

EXECUTIVE OFFICER: 

BARRY R. WALLERSTEIN, D.Env. 
Final Staff Report

Proposed Amended Rule 463 - i - November 2011

TABLE OF CONTENTS 

SECTION PAGE 

EXECUTIVE SUMMARY ..................................................................................................1 

Background ..................................................................................................................................... 2 

Introduction .................................................................................................................................... 2 

Regulatory History ......................................................................................................................... 3 

Affected Industries ......................................................................................................................... 3 

SUMMARY OF PROPOSED AMENDED RULE 463 .....................................................3 

Overview ......................................................................................................................................... 3 

Test Methods ................................................................................................................................. 34

Applicability .................................................................................................................................. 45

Definitions ....................................................................................................................................... 5 

Administrative Changes ................................................................................................................ 5 

EMISSION REDUCTIONS ...............................................................................................5 

COMPARATIVE ANALYSIS ............................................................................................5 

SOCIOECONOMIC ASSESSMENT ...............................................................................78

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) .....................................89

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY CODE 

SECTION 40727 ...............................................................................................................89

COMMENTS AND RESPONSES................................................................................910

Comments from the Public ................................................................................................. 910

Comments from U.S. EPA .................................................................................................... 24 
Final Staff Report

Proposed Amended Rule 463 - 1 - November 2011 

EXECUTIVE SUMMARY 

South Coast Air Quality Management District (AQMD) Rule 463 – Organic Liquid 

Storage controls Volatile Organic Compound (VOC) emissions from above-ground 

stationary tanks used for storage of organic liquids. The proposed amendment 

addresses an issue associated with demonstrating compliance with true vapor 

pressure limitations for petroleum products. Historically, test methods relied upon 

the measurement of the so-called Reid vapor pressure, which includes water vapor, 

and converting the measurement to true vapor pressure. This approach works well 

with products that are in the gasoline range of vapor pressures; however, this 

approach does not work well with heavier products, such as middle distillates, 

diesel, and fuel oils, which are commonly known by industry as “non rule product” 

(i.e., not within the scope of Rule 463 control requirements), and which when 

assessed by the conventional test method can result in values that are not 

representative due to the margin of error at the lower vapor pressure values. An 

inability to determine true vapor pressure for low volatile petroleum products 

became problematic when permit conditions and other regulations started to require 

vapor recovery for these products, especially those heavy products that needed to be 

heated when stored. The determination of true vapor pressure for these products 

was addressed by looking at other chemical properties, including flash point and 

percent volume loss under defined test conditions (ASTM Method D-93 and ASTM 

Method D-86, respectively), and a similar approach was incorporated into Rule 

1178 – Further Reductions of VOC Emissions From Storage Tanks at Petroleum 

Facilities as part of the April 7, 2006 amendment. The proposed amendment to 

Rule 463 aligns the test methods with those contained in Rule 1178, and also 

includes additional administrative changes to further clarify rule requirements and 

improve overall enforceability. 

SCAQMD sStaff has reviewed the proposed project amendment to Rule 463 – 

Organic Liquid Storage, pursuant to CEQA Guidelines §15002 (k)(1), - Three Step 

Process, the first step of a three-step process for deciding which document to 

prepare for a project subject to CEQA. The SCAQMD has determined that it can be 

seen with certainty that there is no possibility that the proposed project may have 

any significant effects on the environment and is therefore, exempt from CEQA 

pursuant to CEQA Guidelines §15061(b)(3) - Review for Exemption (General Rule 

Exemption), paragraph (b)(3) – “common sense” exemption. Furthermore, the 

proposed amendments are is categorically exempt because they are it is considered 

an actions to protect or enhance the environment pursuant to CEQA Guidelines 

§15308 – Class 8 Categorical Exemption. 

A Notice of Exemption has been prepared pursuant to CEQA Guidelines §15062 - 

Notice of Exemption. If approved, the Notice of Exemption will be filed with the 

county clerks of Los Angeles, Orange, Riverside and San Bernardino counties. 
Final Staff Report

Proposed Amended Rule 463 - 2 - November 2011

The addition of the test methods and administrative changes to the rule will not 

impact emissions of air pollutants or require installation of additional equipment; 

therefore no socio-economic impact is anticipated. 

BACKGROUND 

Introduction 

Rule 463 – Organic Liquid Storage was originally adopted by the South Coast Air 

Quality Management District (AQMD) Governing Board on August 15, 1977, to 

regulate above-ground stationary tanks with the capacity of 75,000 liters (19,815 

gallons) or greater containing organic liquids, and smaller tanks (251 gallons to 

19,815 gallons) that store gasoline. 

Rule 1178 – Further Reductions of VOC Emissions From Storage Tanks at 

Petroleum Facilities was adopted December 21, 2001, and amended April 7, 2006, 

for the purpose of achieving further VOC emission reductions from storage tanks 

located in petroleum facilities with a design capacity equal to or greater than 75,000 

liters (19,815 gallons) that are used to store organic liquid with a true vapor pressure 

greater than 5mm Hg (0.1psi) absolute under actual storage conditions, and shares 

the same affected tank population as Rule 463. While Rule 1178 applies to large 

above-ground petroleum storage tanks at petroleum facilities emitting more than 20 

tons of VOC annually, Rule 463 applies to internal or external floating roof tanks 

larger than 75,000 liters (19,815 gallons) in facilities that emit less than 20 tons of 

VOC annually. Rule 463 also applies to tanks between 950 liters (251 gallons) and 

75,000 liters (19,815 gallons) used for gasoline storage. 

Rule 463 relies on the ASTM D-323 test method for the determination of vapor 

pressure of hydrocarbon products stored in above-ground tanks because it is readily 

translated into true vapor pressure through use of U.S. EPA AP-42 nomographs. 

Typically, the nomographs are representative for lighter products such as gasoline 

and kerosene that easily vaporize at ambient temperatures. These products were 

referred to by industry as “Rule Products” because they were subject to Rule 463, 

including the required vapor recovery on storage tanks. These products are well 

above 3.0 psia Reid vapor pressure (RVP). However, as the products being stored 

become heavier, with RVP values of 3.0 psia and lower, the nomograph translation 

became less representative for compliance demonstration purposes. Previously, this 

was not an issue since heavier products like diesel were considered low volatile, or 

what industry referred to as “Non-Rule Products”, thereby not requiring vapor 

recovery when stored. However, this changed as permitting requirements pursuant 

to New Source Review started to require vapor recovery on certain mid-range 

products and heavier products that were heated in storage. Accordingly, a different 

test method is needed to demonstrate compliance with the true vapor pressure 

standards for these heavy petroleum products. There are a couple of alternative test 

methods that rely on measuring the flash point and boiling point of product that can 
Final Staff Report

Proposed Amended Rule 463 - 3 - November 2011

more accurately reflect the true vapor pressure of heavier petroleum products. 

Heavier products stored at ambient temperature can rely on a test method that 

evaluates the flash point of the product. The flash point is the lowest temperature at 

which the liquid starts to vaporize and become ignitable. Using this temperature, 

the true vapor pressure can be determined by chart or calculation and used to assess 

rule applicability. Heavy products that are heated during storage and therefore 

above ambient temperature can rely on the use of the boiling point or evaporation 

range of the product in order to determine the representative vapor pressure. These 

ranges of measured temperatures are adjusted by formula to a signal temperature 

used to evaluate the vapor pressure and therefore determine compliance with the 

appropriate rule or permitted standards. 

The alternative test methods that utilize chemical properties like boiling point and 

flash point (ASTM Method D-93 and ASTM Method D-86, respectively) were 

incorporated in Rule 1178 when it was adopted in December 21, 2001 for storage 

tanks larger than 75,000 liters (19,815 gallons) in facilities emitting more than 40 

tons of VOC. 

Regulatory History 

Rule 463 was adopted August 1977 and subsequently amended three times. The 

1984 amendment added a criterion for hydrogen sulfide content in crude oil 

contained in floating roof tanks; a subsequent amendment in March 2005 removed 

this limitation based on a comparative review of similar regulations within the state 

and at the federal level. The March 1994 amendment restructured the rule, clarified 

rule language, streamlined compliance activities by including a self-compliance 

program, and corrected rule deficiencies identified by the U.S. EPA and California 

Air Resources Board (CARB). 

Affected Industries 

The rule amendment applies to stationary above-ground tanks that store organic 

liquids, including existing and any future tank farm facilities and refineries. 

SUMMARY OF PROPOSED AMENDED RULE 463 

Overview 

Proposed Amended Rule 463 applies to owners and operators of above-ground 

stationary tanks used to store organic liquids that contain volatile organic 

compounds with a capacity of 75,000 liters (19,815 gallons) or greater and aboveground tanks with a capacity between 950 liters (251 gallons) and 75,000 liters 

(19,815 gallons) used to store gasoline. The proposed amendment incorporates 

alternative test methods, clarifies rule applicability, updates rule definitions, and 

includes other clarifications and administrative changes. 
Final Staff Report

Proposed Amended Rule 463 - 4 - November 2011

Test Methods 

Proposed Amended Rule 463 addresses a request from industry for alternative test 

methods for demonstrating compliance with the vapor pressure standards required 

by the rule and similar permit conditions. The proposed amended rule incorporates 

the following alternative test methods and aligns the rule with Rule 1178 in 

determining vapor pressure for heavier petroleum products: 

• ASTM Method D-93 – Pensky Martens Closed Cup Method for 

Determining Flash Point, for determining flash point for organic liquids 

stored at ambient temperatures. 

• ASTM Method D-86 – Distillation of Petroleum Products at Atmospheric 

Pressure, for determining volume percent evaporated for organic liquids 

stored at above ambient temperatures. 

Applicability 

The proposed rule language addresses a request from industry to clarify the 

applicability of the rule to tanks storing low vapor pressure organic materials, 

specifically to identify which provisions of the rule apply to tanks that store organic 

liquids with a true vapor pressure of less than 25.8 mm Hg (0.5 psi) absolute in 

tanks of more than 75,000 liters (19,815 gallons) capacity or that store organic 

liquids with a true vapor pressure of 77.5 mm Hg (1.5 psi) absolute under actual 

storage conditions other than a pressure tank or a tank designed and equipped with a 

vapor control device. 

Although tanks that contain these lower vapor pressure organic liquids are not 

subject to the majority of the requirements of Rule 463, they continue to be subject 

to a minimum level of due diligence, primarily focused on validating the low vapor 

pressure of the tanks in question. In summary, these tanks are subject to the selfinspection requirements of subdivision (e) for floating roof tanks, except only to the 

first three steps in Attachment B, and are also subject to the emissions reporting, 

and recordkeeping requirements of subdivisions (f). The proposed amended rule 

renumbers the rule sections to segregate the recordkeeping and reporting 

requirements that do not apply to lower vapor pressure tanks and adds an additional 

statement to Attachment B to clarify the self-inspection requirements that do apply 

to low vapor pressure tanks. Furthermore, to minimize confusion associated with 

the self-inspection requirements that apply to floating roof tanks, references to 

“tank(s)” in subdivision (e) have been revised to refer to “floating roof tank(s)” in 

the proposed amendment. The following is the additional language added to 

Attachment B: 

Attachment B 

4. For floating roof tanks containing organic liquid not subject to the 

provisions of subdivision (c) of Rule 463, conduct only steps 1 through 3 
Final Staff Report

Proposed Amended Rule 463 - 5 - November 2011

of this attachment. For all other floating roof tanks, conduct steps 5 

through 7 as applicable. 

Definitions 

Proposed Amended Rule 463 updates the following definitions to improve clarity 

and consistency and in response to stakeholder input: 

• “Ambient Temperature” is added, consistent with the definition of Rule 

1178. 

• “Certified Person” is defined rather than “Certified”, consistent with the 

proposed amended rule language usage. 

• “Drain-Dry Breakout Tank” is defined to support a limited exemption from 

the vapor headspace limitation requirements for such tanks that are primarily 

used to receive product from pipelines and to distribute product back into 

pipelines and that are subject to the vapor control requirements of Rule 1149 

- Storage Tank and Pipeline Cleaning and Degassing.

• “Vapor-Tight” is updated to reflect current detecting methods and limits 

(from 1,000 to 500 ppm).

• “Volatile Organic Compound” is updated to refer to Rule 102 – Definitions. 

• “Working Day” is defined as Monday through Friday and includes holidays 

that fall on any of the days Monday through Friday.

Administrative Changes 

Proposed Amended Rule 463 clarifies regulatory purpose, removes outdated 

language, streamlines reporting and notification requirements, and updates rule 

language to address minor administrative changes. 

EMISSION REDUCTIONS 

Proposed Amended Rule 463 is not anticipated to achieve additional emission 

reductions. 

COMPARATIVE ANALYSIS 

As required by Health and Safety Code Section 40727.2, the purpose of this analysis 

is to identify and compare any other AQMD or federal regulations that apply to the 

same equipment or source type. 
Final Staff Report

Proposed Amended Rule 463 - 6 - November 2011

Rule 463 shares a similar universe of affected sources as Rule 1178. Whereas 

Rule 463 contains minimum control standards for organic liquid storage tanks, the 

purpose of Rule 1178 is to seek further reductions from facilities that exceed 20 

tons per year of VOC emissions. In general, Rule 1178 builds off of Rule 463 by 

lowering the vapor pressure thresholds for required controls and expanding the 

control requirements. As such, the requirements of Rule 463 and Rule 1178 are 

complementary and supportive. 

The following table has been prepared to compare the current and proposed rule 

with Rule 1178:
Final Staff Report

Proposed Amended Rule 463 - 7 - November 2011

Category Existing Rule 463 Proposed Amended Rule 463 Current Rule 1178 

Purpose Not Stated Purpose and Applicability 

combined (see below) 

Further VOC emission 

reductions from AST at 

petroleum facilities 

Applicability Organic Liquid Storage Tanks: 

 AST > 19,815 gals 

 AST between 251 and 

19,815 gallons containing 

gasoline 

Reduce VOC emissions from 

AST containing organic liquid. 

Same applicability as Existing 

Rule 463. 

Organic Liquid Storage Tanks: 

 AST > 19,815 gals 

 TVP > 0.1psia 

 Petroleum facility > 20 tpy 

VOC 

Tank 

Requirements 

Applies to AST containing 

organic liquid in excess of: 

 > 39,630 gal with TVP > 

0.5 psia 

 > 19,815 gal with TVP >1.5 

psia TVP 

Requirements: 

 Pressurized or primary and 

secondary seal controls 

 External, Internal FRT 

- Vapor recovery system 

- Vapor tight and 

efficiency requirements 

- No visible gaps for 

covers, seals or lids 

Same as Existing Rule Installation of control roof 

devices. 

Requirements for primary and 

secondary seals, including vapor 

tightness for the following: 

 External FRT 

 Domed External FRT 

 Internal FRT 

 Fixed Roof Tank 

Other 

Performance 

Requirements 

 Requires PVV for tanks 

from 251 to 19,815 gal 

 FR to float on product at all 

times except during 

continuous emptying and 

refilling 

 Water refloat specifications 

for refilling with gasoline 

 Prohibition for use of 

specific tanks for > 11 psia 

TVP organic liquids 

 Seal replacement 

specifications 

Same as Existing Rule NA 

Identification 

Requirements 

Requires clear identification on 

tanks signage and changes 

require District approval 

Same as Existing Rule Requires operators to have a 

visible permanent sign with tank. 

Information and the number 

designation of the tank. 

Self-/Owner/ 

Operator 

Inspection/ 

Monitoring 

Requirements 

FRT 

Floating roof tanks inspected 

by certified person twice 

annually, 4 to 8 months apart 

per Attachment B of Rule 463. 

Primary and secondary seals 

inspected by certified person 

when tank is emptied and 

degassed. Notify two weeks 

prior to tank degassing 

Same as Existing Rule Self-inspection requirements per 

Attachment A of Rule 1178 by a 

certified person for the following: 

 External FRT 

 Domed External FRT 

 Fixed Roof Tanks 

AST – Above-ground Storage Tank; FRT – Floating Roof Tank; PVV – Pressure Vaccuum Valve; RVP – Reid Vapor 

Pressure; TVP – True Vapor Pressure. 
Final Staff Report

Proposed Amended Rule 463 - 8 - November 2011

(table cont.) 

Category Existing Rule 463 Proposed Amended Rule 463 Current Rule 1178 

Inspection/ 

Maintenance 

Requirements 

Any tank not in compliance 

with rule has 72 hours from 

time determined out of 

compliance to be in 

compliance 

Same as Existing Rule Requires operators to make 

repairs or replace all devices and 

their gaskets that are defective 

have visible gaps, non vapor 

tight and not meeting 

requirements for filling , refilling 

and empting and degassing AST 

Record 

Keeping and 

Reporting 

Requirements 

All inspections recorded on 

compliance inspection form. 

Submit inspection forms within 

five working days. If a tank is 

in violation a written report is 

due within 120 hours. All 

records of operator inspection 

maintained for 3 years 

Same as existing rule except for 

added provision for electronic 

reporting. 

Records of: Method 21 results, 

inspection of primary, secondary 

seals and tank openings. 

Reports of: semiannual 

inspections of tanks within five 

days, violation/correction report 

within 120 hours, results of 

emission control performance 

test. Maintain all records for 5 

years 

Emission 

Reporting 

Emission Information Report 

using Annual Emission 

Reporting Program. 

Owner/Operator provides all 

upset emission info and 

maintain records for 2 years. 

All person subject to rule keep 

records of liquid, vapor 

pressure, API gravity Temp, 

and boiling point 

Same as Existing Rule NA 

Exemptions Oil Production Tanks Cap 

19,815 to 42,008 gal. exempt 

when heated for only shipment 

and monthly average < 30 

gal/day constructed before 

1984 and properly maintained 

Same as existing rule except 

added limited exemption for 

drain-dry breakout tank turnovers 

subject to Rule 1149. 

 Pressurized storage tank >15 

lbs psig w/o emissions 

 Domed external FRT installed 

before 2002 

 Baker tanks w/ < 500 ppm 

vent stream per Method 21 

 Tanks permitted with 

synthetic emission limits less 

than 20 tpy VOC 

 District approved degassed 

and emptied tanks 

Test Methods Alternative Test methods used 

if approved. AQMD Method 

501.1 and EPA Method 25 for 

VRS efficiency. ASTM Method 

323 RVP. 

VOC leaks Method 21 

ASTM Method D-93 TVP>0.1 

ASC, 

ASTM Method D-86 

TVP>0.1>ASC 

Alternative test used if approved, 

VOC leaks Method 21 

ASTM Method D-93 TVP> 

0.1=ASC 

ASTM Method D-86 TVP>0.1 > 

ASC and ASTM Method D-323 

for RVP 

Self Inspection 

Procedure 

Attachment B of Rule 463 

Primarily a visual and physical 

inspection. 

Same as Existing Rule Attachment A of Rule 1178 

Primarily a Method 21 inspection 

with accompanying visual and 

physical inspection for presence 

and condition of gaskets and 

similar leak prevention 

installations 

AST – Above-ground Storage Tank; FRT – Floating Roof Tank; PVV – Pressure Vaccuum Valve; RVP – Reid Vapor 

Pressure; TVP – True Vapor Pressure. 

SOCIOECONOMIC ASSESSMENT 

The proposed amendments contain clarifications of existing rule language, true 

vapor pressure test methods, and provide additional flexibility in existing rule 
Final Staff Report

Proposed Amended Rule 463 - 9 - November 2011

record keeping requirements. The proposed amendments do not affect the scope of 

rule applicability nor impose additional requirements on facilities subject to the 

existing rule. Staff expects the proposed reduction from 1,000 ppm to 500 ppm in 

the definition of vapor tightness to have a negligible impact on emissions and 

compliance costs associated with tank hatches, closures and device maintenance. 

The vapor tightness definitional change serves to ease administration of tank rule 

requirements by harmonizing the criterion for vapor tightness with that of other 

existing rules. Proposed changes in test methods used to comply with existing 

requirements for tanks with low true vapor pressure permit conditions are expected 

to modestly reduce compliance costs by providing a clear and uniform way to 

demonstrate compliance. The proposed addition of the option to submit compliance 

records electronically will likely reduce the costs of record keeping for many 

facilities and not generate additional cost for facilities choosing not to submit 

records electronically. Overall, compared to the existing rule, the proposed 

amendments are expected to result in cost savings. 

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) 

SCAQMD sStaff has reviewed the proposed project amendment to Rule 463 – 

Organic Liquid Storage, pursuant to CEQA Guidelines §15002 (k)(1), - Three Step 

Process, the first step of a three-step process for deciding which document to 

prepare for a project subject to CEQA. The SCAQMD has determined that it can be 

seen with certainty that there is no possibility that the proposed project may have 

any significant effects on the environment and is therefore, exempt from CEQA 

pursuant to CEQA Guidelines §15061(b)(3) - Review for Exemption (General Rule 

Exemption), paragraph (b)(3) – “common sense” exemption. Furthermore, the 

proposed amendments areis categorically exempt because they areit is considered an 

actions to protect or enhance the environment pursuant to CEQA Guidelines 

§15308 – Class 8 Categorical Exemption. 

A Notice of Exemption has been prepared pursuant to CEQA Guidelines §15062 - 

Notice of Exemption. If approved, the Notice of Exemption will be filed with the 

county clerks of Los Angeles, Orange, Riverside and San Bernardino counties. 

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY CODE 

SECTION 40727 

Health and Safety Code Section 40727 requires that prior to adopting, amending or 

repealing rules, the AQMD Governing Board shall make findings of necessity, 

authority, clarity, consistency, non-duplication and reference, based on relevant 

information presented at the hearing. The draft findings are as follows: 

Necessity: The AQMD Governing Board has determined that a need exists to 

amend Rule 463 – Organic Liquid Storage, to provide alternative test methods that 

are more representative and appropriate for low vapor pressure organic liquids for 
Final Staff Report

Proposed Amended Rule 463 - 10 - November 2011

those permitted facilities that are also subject to more stringent vapor pressure 

standards and to make administrative changes to facilitate compliance with the rule. 

Authority: The AQMD obtains its authority to adopt, amend or repeal rules and 

regulations from California Health and Safety Code Sections 39002, 39650, 40000, 

40001, 40440, 40441, 40463, 40702, and 40725 through 40728, 41508, 41700, and 

42300. 

Clarity: Rule 463 – Organic Liquid Storage as proposed to be amended, is written 

or displayed so that its meaning can be easily understood by the persons directly 

affected by it. 

Consistency: Proposed Amended Rule 463 – Organic Liquid Storage is in 

harmony with, and not in conflict with or contradictory to, existing statutes, court 

decisions, or federal or state regulations. 

Non Duplication: Rule 463 – Organic Liquid Storage, as proposed to be amended, 

does not impose the same requirements as any existing state or federal regulations, 

and the amendments are necessary and proper to execute the powers and duties 

granted to, and imposed upon, the AQMD. The proposed amendment consolidates 

existing state and federal requirements. 

Reference: This regulation would implement, interpret or make specific the 

provisions of: Health and Safety Code Sections 40001 (rules to achieve ambient air 

quality standards), 40440(a) and (c) (rules to carry out the Air Quality Management 

Plan and rules which are also cost-effective and efficient), 40702 (rules to execute 

duties necessary to preserve original intent of rule), 40910 et seq., (California Clean 

Air Act), and Federal Clean Air Act §111 (New Source Performance 

Standards).40440(a) (rules to carry out Air Quality Management Plan), 40440(c) 

(cost effectiveness), 41508, 41700, and Federal Clean Air Act Section 172(c)(1) 

(RACT).

COMMENTS AND RESPONSES 

Comments from the Public 

Comments were received on the Proposed Amended Rule (PAR) during the public 

workshop conducted on August 24, 2011. The following written comments were 

received during the public comment period and included the comments received 

during the workshop. 
Final Staff Report

Proposed Amended Rule 463 - 11 - November 2011

Comment Letter # 1 – Plains West Coast Terminals 

Response to Comment #1-1 

Rule 463 subdivision (g) [PAR463 renumbered subdivision (h)] currently provides 

a mechanism for use of alternative test methods, relying on review by the staffs of 

the District, the California Air Resources Board, and the U.S. EPA. Following such 

approvals, and contingent on widespread applicability, staff may consider 

incorporation into rule language in the future. 

Response to Comment #1-2 

See response to Comment #1-1 

Response to Comment #1-3 

See response to Comment #1-1 
Final Staff Report

Proposed Amended Rule 463 - 12 - November 2011

Comment Letter # 2 – Valero Refinery 
Final Staff Report

Proposed Amended Rule 463 - 13 - November 2011

Response to Comment #2-1 

Staff agrees with the intent of this comment and has updated rule language to 

further clarify the applicability of the rule. 

Specifically, tanks that contain organic liquids that do not exceed the vapor pressure 

thresholds identified in subdivision (c), such as distillate tanks, are subject to the 

reporting and recordkeeping requirements of (f)(2) and (f)(3), as well as the selfinspection requirements of subdivision (e) and Attachment B, sections 1 through 3. 

In short, owners/operators are required to perform a minimum level of due diligence 

to demonstrate that the organic liquids stored do not exceed the vapor pressure 

thresholds of subdivision (c) in order to validate the presumption that the remaining 

tank roof requirements of subdivision (c) do not apply. Staff also notes that 

subdivision (e) applies to floating roof tanks but additional rule language in the 

existing rule refers merely to “tanks” rather than “floating roof tanks.”. As such, 

staff has updated the proposed rule language to refer to “floating roof tank” within 

the context of subdivision (e) to minimize confusion. Below is a summary of the 

rule sections that apply to these low vapor pressure tanks: 

(e) Self-Inspection of Floating Roof Tanks 

(f)(2) Emissions Reporting 

Attachment B 

4. For floating roof tanks containing organic liquid not subject to the 

provisions of subdivision (c) of Rule 463, conduct only steps 1 through 3 

of this attachment. For all other floating roof tanks, conduct steps 5 

through 7 as applicable. 

Response to Comment #2-2 

Alignment with Rule 1178 is limited to accommodation of alternative test methods 

for facilities subject to both rules and to update vapor tightness detection capability. 

The purpose of PAR 463 is not to align the vapor pressure thresholds of the rules 

because they serve different purposes: Rule 463 defines minimum control 

requirements for organic liquid storage tanks while Rule 1178 requires further 

emission reductions from larger emissions sources. Where facilities are subject to 

both rules, the alternative test methods provided by PAR 463 are intended to 

provide flexibility. 
Final Staff Report

Proposed Amended Rule 463 - 14 - November 2011

Comment Letter # 3 – Kinder Morgan 
Final Staff Report

Proposed Amended Rule 463 - 15 - November 2011

Response to Comment # 3-1 

See response to Comment # 2-1. 

Response to Comment # 3-2 

See response to Comment # 2-1. 

Response to Comment # 3-3 

Staff has revised the proposed rule to incorporate the intent of your comment by 

adding a definition for Drain-Dry Breakout Tank and providing an exemption for 

Drain-Dry Breakout Tanks from the provisions of (d)(2) as follows: 

(b)(4) DRAIN-DRY BREAKOUT TANK is an above-ground storage tank 

designed such that the floating roof rests on support legs no higher than 

one foot along the tank shell with a bottom sloped to a sump or sumps 

such that no product or sludge remains on the tank bottom and walls after 

emptying except clingage and is primarily used to receive product from 

pipelines and to distribute product back into pipelines. 

(g)(2) The provisions of (d)(2) shall not apply to drain-dry breakout tanks that are 

subject to the provisions of Rule 1149 - Storage Tank And Pipeline 

Cleaning And Degassing. 

Response to Comment # 3-4 

See response to Comment #3-3. 
Final Staff Report

Proposed Amended Rule 463 - 16 - November 2011

Comment Letter # 4 – Exxon Mobil 

4-1

4-2
Final Staff Report

Proposed Amended Rule 463 - 17 - November 2011

Response to Comment #4-1 

Staff has revised the proposed rule to incorporate the intent of your comment by 

updating the definition of ambient temperature to match the Rule 1178 definition. 

Response to Comment #4-2 

Staff has revised the proposed rule to incorporate the intent of your comment by 

incorporating the term “either of” into the alternative test method provision 

language. 
Final Staff Report

Proposed Amended Rule 463 - 18 - November 2011

Comment Letter # 5 – Western States Petroleum Association 

5-1
Final Staff Report

Proposed Amended Rule 463 - 19 - November 2011

5-1 

contd 

5-2

5-3

5-5

5-6

5-7

5-4
Final Staff Report

Proposed Amended Rule 463 - 20 - November 2011

5-7 

contd 

5-8

5-9

5-10
Final Staff Report

Proposed Amended Rule 463 - 21 - November 2011

Response to Comment #5-1 

The purpose of incorporating the alternative test methods is to provide facilities that 

are subject to both Rule 463 and Rule 1178 the flexibility of using the same 

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5-12

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Final Staff Report

Proposed Amended Rule 463 - 22 - November 2011

methods to demonstrate compliance for both. Because the additional test methods 

are alternatives and optional, staff does not believe that inclusion of these test 

methods broaden the applicability to Rule 463, and none should be inferred. 

While the differences between the originally proposed language of paragraph (g)(4) 

and the equivalent language from Rule 1178 was meant to improve clarity, due to 

the nature of the change and your comment, staff has revised paragraph (g)(4) to 

more closely match the equivalent language from Rule 1178. 

Response to Comment #5-2 

See response to Comment #4-1.

Response to Comment #5-3 

A review of the District’s compliance records indicate that the majority of 

regulatory citations under Rule 1178 that involved vapor tightness on hatches and 

closure devices were in the 2,000 to 100,000 ppm range, well in excess of both the 

current Rule 463 threshold of 1,000 ppm and proposed threshold of 500 ppm. 

During the last two years there has been only one incident with a reading between 

500 and 1,000 ppm. Typically, tanks inspected under Rule 463 normally exhibit 

only background levels below 500 ppm. Therefore, it is expected that no cost 

increase or emission reduction would result from the proposal. 

Response to Comment #5-4 

Staff appreciates the review effort. 

Response to Comment #5-5 

Staff has revised the draft staff report to incorporate the intent of your comment by 

describing flash point as “the lowest temperature at which the liquid starts to 

vaporize and become ignitable.” 

Response to Comment #5-6 

Staff has revised the draft staff report to incorporate the intent of your comment by 

removing the extensive discussion associated with removal of outdated 

requirements. 

Response to Comment #5-7 

Staff has revised the draft staff report to incorporate the intent of your comment by 

updating the sentence in question and incorporating a comparison table in the 

report. The sentence in question has been updated as follows: 

“The rule amendment applies to stationary above-ground tanks that store organic 

liquids, including existing and any future tank farm facilities and refineries.”
Final Staff Report

Proposed Amended Rule 463 - 23 - November 2011

Response to Comment #5-8 

See response to Comment #2-1 

Response to Comment #5-9 

The provisions of Rule 1178, which appliesy to larger emission source facilities, 

supersedes the visible gap requirement as part of subparagraph (d)(1)(C) of Rule 

1178, which requires that instead of meeting the defined one-eighth inch gap 

definition of (c)(43) of Rule 1178, instead meet the vapor tightness definition of 

paragraph (c)(42) of Rule 1178 by July 1, 2003, which is a less than 500 ppm leak 

determined by Method 21. 

Currently Rule 463 relies on a common sense definition for “visible gaps” which is 

intended to provide a minimum protective standard for smaller emission sources. 

Staff has also reviewed the language in nine California Air Districts for 

requirements equivalent to Rule 463 and determined that eight Districts similarly 

rely on similar common sense definitions for visible gaps, while the ninth (Kern 

County) uses a one-sixteenth inch definition. Staff is not aware of any arbitrary 

subjective enforcement action taken with respect to this term under Rule 463, and 

believes that aligning the definition to the vapor tight condition would require 

additional use of Method 21 sampling for smaller emission sources not subject to 

Rule 1178. As such, staff does not recommend incorporating the Rule 1178 

definition as part of Rule 463 at this time. 

Response to Comment #5-10 

Staff has revised the proposed rule to incorporate the intent of your comment by 

removing the requirement to demonstrate 95% control efficiency for vapor recovery 

when tank emissions are vented to a fuel gas system similar to Rule 1178 

(d)(4)(A)(i)(5): 

(c)(3)(C) For purposes of this paragraph, the efficiency of a vapor recovery system 

shall be determined by making a comparison of controlled emissions to 

those emissions which would occur from a fixed cone roof tank holding 

the same organic liquid without a vapor control or vapor recovery system. 

The vapor recovery system shall have an efficiency of at least 95 percent 

by weight, or vent tank emissions to a fuel gas system. 

Response to Comment #5-11 

Staff has revised the proposed rule to incorporate the intent of your comment by 

referring to the requirement to demonstrate vapor pressures less than a defined 

threshold rather than a vapor pressure requirement as follows: 

(4) Notwithstanding the provisions of paragraph (gh)(3), if a permit condition 

or District rule requires a demonstration of true vapor pressure of less than 
Final Staff Report

Proposed Amended Rule 463 - 24 - November 2011

5 mm Hg (0.1 psi) absolute, either of the following test methods may be 

used to show compliance: 

See also response to Comment #5-1.

Response to Comment #5-12 

Staff has revised the proposed rule to incorporate the intent of your comment by 

inserting the decimal place to correct the value from 260 to 26.0. 

Response to Comment #5-13 

Staff has revised the proposed rule to incorporate the intent of your comment by 

removing the additional detail associated with the Test Method as follows: 

(6) Vapor tight condition specified in subparagraphs (c)(3)(A) and (c)(3)(B) 

shall be determined according to U.S. EPA's Reference Method 21 subject 

to the following limitationsusing an appropriate analyzer calibrated with 

methane. 

(A) vapor tight condition shall be determined at a distance of 1 cm. or 

less from the source; and 

(B) the soap bubble test shall not be used in lieu of quantitative test 

methods for vapor tightness determination. 

Response to Comment #5-14 

Staff has revised the proposed rule to incorporate the intent of your comment by 

defining working day to minimize confusion. However, staff disagrees that the term 

“Working Day” was intended to include holidays as associated with the term 

“business day”; rather, as similar in other federal and District rules (such as Rule 

1403 - Asbestos Emissions from Demolition/Renovation Activities) where five 

working days translates to seven calendar days, holidays are not excluded from the 

definition. 

Comments from U.S. EPA 

The following comments were received from U.S. EPA on October 25, 2011. 

Comment #1: 

As discussed in South Coast's December 11, 2001 staff report for SC 1178, ASTM 

D93 (Flash Point) and D86 (Distillation) do not directly measure vapor pressure, but 

are used as surrogate test methods as an indicator of vapor pressure. These ASTMs 

are used to determine applicability in Rule 1178, but in Rule 463, it appears they 

may be used to determine compliance with a 0.1 psi vapor pressure limit in another 
Final Staff Report

Proposed Amended Rule 463 - 25 - November 2011

rule or permit. As such, South Coast should review whether it is appropriate to 

state that these surrogate test methods can demonstrate compliance. 

Response to Comment #1 

Staff has reviewed the appropriateness of stating that the surrogate test methods can 

demonstrate compliance and determined that while the test methods are used to 

determine applicability, the practical use of the test method results would be to 

demonstrate compliance with control requirements that would otherwise apply 

should the true vapor pressure threshold be exceeded. Staff’s review of the 

requested use of the surrogate test methods indicates that the intended use would be 

appropriate as stated, and does not foresee any inappropriate application of the 

proposed provision. However, the proposed amendment language has been revised 

to further clarify the use of the test method as follows: 

“Notwithstanding the provisions of paragraph (h)(3), if a permit condition or 

District rule requires a demonstration of true vapor pressure of less than 5 mm Hg 

(0.1 psi) absolute, either of the following test methods may be used to show 

compliance:” 

Comment #2: 

Per EPA Region 9's Guidance Document for Correcting Common VOC and Other 

Rule Deficiencies, the referenced ASTMs should, at a minimum include the date of 

the version being referenced and preferably also include the title of the method. 

This is because newer versions of ASTM test methods are not automatically 

submitted to or reviewed by EPA. ASTM D-323 should include a year and ASTM 

D-93 and ASTM D-86 should include the year and title of the methods. 

Response to Comment #1 

The proposed rule has been updated to include the test method titles and date of the 

version being referenced. 

Comment #3: 

Similarly, the date of the Lawrence Berkeley National Laboratory test method for 

heavy crude oil should be included. The latest version approved by EPA is dated 

May 28, 2002. 

Response to Comment #3 

The proposed rule has been updated to include the May 28, 2002 latest version date. 

Comment #4 

The reference to nomographs in section (h)(3) should specify where in U.S. EPA 

AP-42 the applicable nomographs are found. For example, include the edition of 
Final Staff Report

Proposed Amended Rule 463 - 26 - November 2011

U.S. EPA AP-42 and the chapter where the figures are located. The latest versions 

are from AP-42 Fifth Edition, Volume 1, Chapter 7. 

Response to Comment #4 

The proposed rule has been updated to refer to the latest version of the applicable 

nomographs from AP-42 Fifth Edition, Volume 1, Chapter 7.