PLACER COUNTY AIR POLLUTION CONTROL DISTRICT

STAFF REPORT

PROPOSED RESCISSION OF RACT AND OTHER RULES:

RULE 227

, PETROLEUM DRY CLEANING OPERATIONS

RULE 229, FIBERBOARD MANUFACTURING

RULE 230, PLASTIC PRODUCTS AND MATERIALS

– PAPER TREATING

OPERATIONS

RULE 232, BIOMASS SUSPENSION BOILERS

RULE 237, MUNICIPAL LANDFILLS

RULE 241, BOILERS AT PLASTIC LAMINATE MANUFACTURING

FACILITIES

RULE 506, BIOMASS EMISSION REDUCTION CREDITS AND BANKING

RULE 805, NOTICE TO COMPLY

April 12, 2012Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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Purpose

In an effort to clean up the District rule book, staff is proposing to rescind a number of rules that are no longer relevant to the types of sources we currently have in Placer County.

Rule 227, Petroleum Dry Cleaning Operations

Petroleum dry cleaning machines use a cleaning fluid that is derived from petroleum and is considered to be 100% hydrocarbon. Cleaning fluid lost from the machine through leaks and small amounts remaining in the cleaned articles for emission estimation purposes is

considered to be VOC that is release d to the air. Most petroleum dry cleaning machines use a cleaning fluid named DF 2000.

Dry cleaning machines that use perchloroethylene ( Perc) as the cleaning fluid in the past were the predominant type, but these units are being phased out because Perc has been classified as a hazardous air pollutant. There are several dry cleaning fluids that are rated as non

- VOC and environmentally friendly and these types of machines do not require District permits.

Rule 227, Petroleum Dry Cleaning Operations , was a dopted on February 5, 1991

, and

forwarded to ARB for approval and then to EPA for incorporation into the SIP. ARB responded that they would approve the rule, but to be forwarded to EPA would require proof of publication of proper public notice for the pub lic hearing where the rule was adopted by the County Board of Supervisors. This proof could not be found, so the rule has not been sent for EPA approval.

The rule was originally intended to mirror the federal New Source Performance Standa rd (NSPS) for Pe troleum Dry Cle aners, 40 CFR 60 Subpart JJJ. The NSPS applies to dry cleaners using petroleum dry cleaning fluid that have a rated dryer capacity of 84 pounds or greater of clothes. ARB comments on the rule during development suggested that the rule

could apply to dry cleaners with capacities less than 84 pounds, as South Coast AQMD was doing at the time. The rule was changed to apply to all petroleum dry cleaners, with a phase

in of the requirements for machines with a capacity less than 84 pounds.

The r ule requires use of solvent recovery dryers, cartridge filters, immediate transfer of cleaned articles to the dryer, and allows no perceptible fluid leaks from the equipment.

The rule also implies that an initial performance test be conducted on the effec tiveness of the dryer, per a test described in NSPS JJJ. The test is implied because the test can be waived by

the APCO.

Since Rule 227 was adopted, standard design for petroleum dry cleaning machines has gone to

closed

- loop, dry

- to

- dr y type equipment. T his means that the entire cleaning operation is conducted in a single machine where the dry articles to be cleaned are initially placed in the

machine and the cleaned articles are removed fro m the machine in the dry state. These modernProposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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machines employ solv ent recovery dryers, cartridge filters to remove the dirt from the fluid, and stills to recycle the dry cleaning fluid. This standard design meets the requirements of Rule 227.

The performance test described in NSPS JJJ is very bu rdensome in that the test has a duration of

two weeks where the final recovered flow rate of solvent from the dryer for each wash load is measured in a graduated cylinder. The NSPS requires this test for all newly installed machines.

The District has bee n waiving this test.

The current situation concerning petroleum dry cleaning machines is:

1. The District has no SIP commitment for this control measure,

2. The rule has not been approved into the SIP so, rescinding the rule will not be a SIP relaxation,

3. NSP S JJJ will apply to any new units having a rated capacity of 84 pounds or greater of clothes,

4. Currently, there are eleven petroleum dry cleaning permits in the District. These existing dry cleaning systems are all of the closed

- loop type that meet s the s tandards of Rule 227. Over the next few years, four dry cleaning systems using perchloroeth yle ne (Perc) fluid will be phased out due to the ARB Airborne Toxic Control Measure and will likely be replaced with new petroleum dry cleaning machines. All new pet roleum dry cleaning machines manufactured today meet the standards of Rule 227.

5. The combined eleven permitted petroleum dry cleaning machines in 2010 used 5 3 2 gallons of cleaning fluid which consisted of 3, 412 pounds of VOC according to the annual throughput reports submitted by the permit holders. From this combined annual usage, it can be seen that dry cleaners are not a sign ificant source of VOC emissions in Placer County.

Accordingly, staff recommends tha t Rule 227, Petroleum Dry Cleaning Operations

, be rescinded as no longer useful in controlling hydrocarbon emissions from dry cleaning operations.

There is no fiscal impact from rescinding Rule 227

. Dry Cleaning equipment available for purchase today i s designed such that it meets the require ments of the rule. Rescinding Rule

227 should have no effect on costs to dry cleaning businesses or the District.

Rule 229, Fiberboard Manufacturing

Rule 229, Fiberboard Manufacturing

, was adopted on June 28, 1994

, and never amended. Adoption of this rule was necessary to satisfy a Federal Clean Air Act requirement that Districts adopt regulations for major source volatile organic compound (VOC) Reasonably Available Control Technology ( RACT). At that time, the Dist rict contained one source subject to this rule;Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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SierraPine, a manufacture r of Medium Density Fiberboard. The rule controls VOC emissions from the plant and sets minimum VOC control efficiencies for various operations used in the

manufacture of fiberboard.

The SierraPine fiberboard manufacturing has been in decline over the past several years, and on December 16, 2011

, the last manufacturing l ine was permanently shut down. SierraPine has surrendered the fiberboard manufacturing permits and filed for Emissio n Reduction Credi ts for

the shutdown emissions. SierraPine still maintains some permits relative to cutting and sanding

of MDF. These remaining operations do not emit VOCs and are not subject to rule 229. SierraPine will no longer be a major source subjec t to Title V permitting.

SierraPine is dismantling the fiberboard manufacturing equipment and is selling off the emission

reduction credits. The company does not expect to operate again in this location. District staff is not aware of any other company wi th plans to open a fiberboard manufacturing operation in Placer County.

There is no fiscal impact from rescinding Rule 229 since there are no sources subject to the rule in Placer County.

Staff proposes that Rule 229, Fiberboard Manufacturing

, be rescind ed because there are currently no sources in the District that are subject to this rule. Furthermore, it is not likely that a new fiberboard manufacturing operation would locate in Placer County.

Rule 230, Plastic Products and Materials

– Paper Treating o perations

Rule 230, Plastic Products and Materials

– Paper Treating Operations

, was adopted on June 28,

1994 , and never amended. Adoption of this rule was necessary to satisfy the Section 182 of the Federal Clean Air Act as amended in 1990 requirement tha t Districts adopt regulations for major source VOC Reasonably Available Control Technology (RACT). At that time, the District contained one source subject to this rule; Formica, a manufacturer of plastic laminates, commonly used in kitchen countertops. T he rule applies to paper treating operations involving the application of melamine and phenolic resins to paper substrates which have a potential to

emit 25 tons or more of VOC per year. This rule was approved into the SIP by EPA. The purpose of the rule is to limit emissions of VOC through either use of low

- VOC compounds, or through use of control equipment to destroy VOC before being emitted to the atmosphere.

Formica shut down all operations at the facility in June of 2006 and obtained Emission

Reducti on Credits for the shutdown emissions. Formica has since sold the land.

There is no fiscal impact from rescinding Rule 230 since there are no sources subject to the rule in Placer County.

Staff proposes that Rule 230, Plastic Products and Materials

– Pa per Treating Operations

, be rescinded because there are currently no sources in the District that are subject to this rule.Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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Furthermore, it is not likely that a new manufacturing operation of this source category would locate in Placer County.

Rule 232, Biomass Suspension Boilers

Rule 232, Biomass Suspension Boilers

, was adopted on October 6, 1994

, and ame nded once on December 9, 1999. Adoption of this rule was necessary to satisfy the Section 182 of the Federal Clean Air Act as amended in 1990 requireme nt that Districts adopt regulations for major source NOx Reasonably Avail able Control Technology (RACT). At that time, the District contained one source subject to this rule; SierraPine, a manufacturer of Medium Density F iberboard. The rule applies to biom ass suspension boilers which have a potential to emit 25 tons or more of NOx per year, which have as a primary energy source of biomass from a medium density fiberboard (MDF) plant consisting of a minimum of 25 percent of the total annual heat input. Sier raPine used sander dust from the final finish sanding of the produced MDF as the biomass fuel. This rule was never approved into the SIP by EPA due to disagreement with the District over what constitutes RACT for this type of biomass boiler.

As was menti oned for Rule 229, Fiberboard Manufacturing

, the SierraPine fiberboard manufacturing MDF production ha d been in decl ine over the past several years and in 2010 the biomass suspension boiler was permanently shut down and replaced with a natural gas fueled

b oiler. SierraPine surrendered the biomass suspension boiler permit and filed for Emission

Reduction Credits for the shutdown emissions. SierraPine is no longer a major source subject to Title V permitting.

SierraPine is dismantling the fiberboard manufa cturing equipment and is selling off the emission reduction credits. The company does not expect to operate again in this location. District staff is not aware of any other company with plans to open a fiberboard manufacturing operation using a

biomass s uspension boiler in Placer County.

There is no fiscal impact from rescinding Rule 232 since there are no sources subject to the rule in Placer County.

Staff proposes that Rule 232, Biomass Suspension Boilers

, be rescinded because there are currently no s ources in the District that are subject to this rule. Furthermore, it is not likely that a new fiberboard manufacturing operation using a biomass suspension boiler would locate in Placer County.

Rule 237, Municipal Landfills

Municipal landfills are regu lated by two different federal regulations known as New Source Performance Standards (NSPS). These are listed in 40 CFR Part 60 with various s ubparts. Subpart Cc, Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills, applies to land fills constructed or last modified prior to May 30, 1991. NSPS subpart WWW,Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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Standards of Performance for Municipal Solid Waste Landfills, applies to landfills constructed or last modified after May 30, 1991.

The two largest landfills in Placer County are the Western Regional Landfill (WRL) and the

Ea stern Regional Landfill (ERL). WRL was expanded after 1991, so Subpart WWW applies to that landfill. ERL was constructed prior to 1991

, and not modified after 1991, so Subpart Cc applies to ERL.

WR L is still an active landfill. ERL was closed in 1995 and converted to a materials recovery

f

acility and a transfer station. Both WRL and ERL have active landfill gas collection and control systems utilizing enclosed flares.

Rule 237 was originally promulgated to mirror the requirement of Subpart Cc for landfills constructed before May 30, 1991

, and a similar California Air Resources Board Suggested

Control Measure. At that time both WRL and ERL were active lan dfills and subject to the

rule. The rule was last amended on October 9, 2003

, and forwarded by ARB to EPA for incorporation into the SIP on May 17, 2010. EPA has not acted on the rule at this time.

WRL was reconstructed to expand the design capacity after 1991, thus making the landfill subject to Subp art WWW instead of Subpart Cc. Rule 237, Section 104, Exemptions, exempts from the requirements of the rule any landfill subject to Subpart WWW. Thus, WRL is no longer subject to Rule 237.

ERL voluntarily installed a gas collectio n and control system even though the landfill never did

reach the emission threshold where the NSPS would require this system. Now that the landfill is closed, ERL wil l never reach that threshold. ERL has filed a closure report and thus is no longer subjec t to Subpart Cc or to Rule 237.

There are no other active landfills in Placer County besides WRL. Any new landfills developed in Placer County in the future would be subject to Subpart WWW and therefore not subject to

Rule 237.

Both WRL and ERL continue to operate their landfill gas c ollection and control systems. The California Air Resources Board has recently promulgated a green house gas regulation for landfills that requires continued operation of the control systems at both WRL and ERL and places em ission limitations and test requirements on the control devices. For this reason, both

landfills will continue to control methane and non

- methane emissions for the foreseeable future. The District recently signed a Memorandum of Understanding (MOU) with the California Air Resources Board to take on enforcement of the new green house gas regulation.

There is no fiscal impact from rescinding Rule 237 since no landfills are currently subject to the rule, and there can’t be any new landfills subject to the r ule.Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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Since there are no current landfills subject to Rule 237 and it is not possible for a potential new

landfi ll to be subject to the rule, staff recommends that Rule 237, Municipal Landfills

, be rescinded as no longer useful in controlling hydrocarbon e missions from landfills.

Rule 241, Boilers at Plastic Laminate Manufacturing Facilities

Rule 241, Boilers at Plastic Laminate Manufacturing Facilities

, was adopted on April 8, 1999

, and never amended. Adoption of this rule was necessary to satisfy the Section 182 of the Federal

Clean Ai r Act as amended in 1990 requiring that d istricts adopt regulations for major source NOx Reasonably Available Control Technology (RACT). At that time, the District contained one source subject to this rule; Formica, a ma nufacturer of plastic laminates, commonly used in kitchen countertops. The rule applies to boilers fueled with a combination of natural gas and waste fuel from paper treating operations at plastic laminate manufacturing facilities which have a potential t o emit 25 tons or more of NOx per year. A paper treating operation is defined as a paper coating process in which a uniform layer of phenolic or melamine resin is applied either by (a) dipping a continuous, moving paper substrate into the resin and then us ing rollers to squeeze the excess resin from the paper, or (b) applying the resin directly to the paper substrate with a roll applicator. Paper treating operations also include lamination of resin

- impregnated paper and trimming, cutting, and sanding of la minated sheets and related processes. Waste fuel for the boiler is defined as material from trimming, cutting and sanding of laminated sheets of resin impregnated paper. This rule was never submitted to EPA for inclusion in the SIP. The purpose

of the r ule is to limit emissions of NOx through use of low

- NOx burners and flue gas

recirculation on the boiler.

Formica shut down all operations at the facility in June of 2006

, and obtained Emission

Reduction Credits for the shutdown emissions. Formica has si nce sold the land.

There is no fiscal impact from rescinding Rule 241 since there are no sources subject to the rule in Placer County.

Staff proposes that Rule 241, Boilers at Plastic Laminate Manufacturing Facilities

, be rescinded because there are currently no sources in the District that are subject to this rule. Furthermore, it is not likely that a new manufacturing operation of this source category would locate in Placer County.

Rule 506, Biomass Emission Reduction Credits and Banking

The Connelly

- Areias

- Chandler Rice Straw Burning Reduction Act of 1991 required the reduction of rice straw burning in the Sacramento Valley and provided that the reductions in emissions resulting from the rice straw burning p hase down are eligible for Emission Reduction Credits (ERCs). The District’s general ERC rule, Rule 504, did not contain the protocols for determining biomass burning emissions and resulting credit s, so a new rule was required. A model rule was developed by the Sacramento Valley Basin Control Council which became the

basis for Rule 506.Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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Rule 506 was adopted on August 8, 1996. This rule has provisions for the issuance of ERCs from rice straw burning, but also provides for orchard trimmings, field crop resi due, and forest wastes.

The rule was advertised to the rice

- growing community, but the District only received se rious interest from one grower. ERCs were issued to this grower in 2003. ERCs have not been issued for other crop residue burning.

As a resul t of EPA’s review of Rule 506

, and similar rules adopted by other districts that were based on the same model rule, EPA would not approve these rules into the SIP. This meant that ERC’s issued to these rules could not be used for offsets for federal purpo ses. The ERCs could still be used for minor projects, but most of the demand for ERCs is for federal major projects. This severely reduced the demand and value of these ERCs.

A joint committee was set up including EPA, ARB, air districts in rice growing areas, and the

Rice Commission to work out a new model rule. This committee met over the course of four years (2004

– 2008) before crafting a model rule that was acceptable to all parties. The District adopted new Rule 516, Rice Straw Emission Reduction Credits , based on this m odel rule on February 19, 2009. The new rule only applied to rice straw burning and not other types of biomass such as field crops or orchard trimmings.

New Rule 516 has a provision that allows owners of ERCs issued to old Rule 50 6 to turn them in to the District and receive new ERCs issued to the new rule, thus making the ERCs good for federal purposes. All the old existing rice straw burning ERCs were converted to the new ERCs.

The District has not received interest from grower s in obtaining ERCs from other crops such as wheat, S udan grass, or orchard trimmings. Orchard trimmings are now mostly sold for fuel for biomass energy plants. Burning of wheat and S udan grass in the county has declined sharply from previous decades. In addition, any ERCs that may have been issued in the future would not be recognized by EPA and therefore could not be use d as offsets for major projects; severely limiting the monetary value of these ERCs.

For these reasons, staff recommends that Rule 506

, Biomass Emission Reduction Credits and Banking

, be rescinded as no longer useful.

Rule 805, Notice to Comply

Rule 805, Notice to Comply

, was adopted on August 12, 1999 , and never amended. Adoption of this rule was required by the California Health and Safety Code (H&SC) section 39150. That section of the H&SC defined a procedure called Notice to Comply to address minor violations in permitted sources without going through the formal process o f a Notice of Violation (NOV). The H&SC required that distric ts adopt a similar regulation or rule.Proposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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The Notice to Comply regulations in the H&SC had a sunset date unless extended by the state legislature. The sunset date was extended once and then the statute was allowed to expire on January 1, 2006. Since Notic e to Comply (NTC) is no longer required by state regulations, the District has not been using NTCs. The NTC process was viewed as being overly cumbersome

and difficult for both District staff and clients to understand. It is possible that the l egislature at some future date may chose to reinstate some form of the NTC or other limits upon District

enforcement discretion and the District will comply at that time

.

The District has implemented an alternate method for addressing minor violations discovered during inspections that do not warrant the issuance of an NOV. This is called a Corrective Action Notice (CAN). In addition the District utilizes an array of approaches to resolve

violations before and after violation discovery

- from verbal or written warnings, to Notices of

Violations. For example, u pon receiving n ew information through the process of mutual settlement negotiations the District may :

**•** R escind the Notice of Violation;

**•** Is sue a warning;

**•** S eek monetary penalties

- as a penalty, for fire cost recovery, or to for any costs avoided through the violation;

**•** A gree to stipulations where all or a portion of penalties are deferred and will be forgiven upon continued compliance; or

**•** A gree to supplemental environmental projects by the violator in lieu of monetary penalties.

There is no fiscal impact from rescinding Rule 805 since it is no longer being used in Placer County.

Staff proposes that Rule 805, Notice to Comply

, be rescinded becau se it is no lo nger mandated by the state H&SC and the District has been using an alternate method of addressing minor violations discovered during source inspections.

Analysis and Findings

The following Analysis and the subsequent Findings are intended t o address the requirements set forth in the Health and Safety Code relating to adoption of a new or amended District Rule, as well

as other State statutes referenced herein.

Cost

- Effectiveness of a Control Measure

California Health & Safety Code (H&S) Section 40703 requires a District to consider and make public “the cost

- effectiveness of a control measure”. The rescission of these rules should have no financial impact on the public because the rule s no longer apply to sources in the District.

T herefo re
, there is no cost

- effectiveness of this rule

.

Socioeconomic ImpactProposed Rescission of District RACT and Other Rules Staff Report Board Date: April 12, 2012

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H&S Section 40728, in relevant part, requires the Board to consider the socioeconomic impact of any new rule if air quality or emission limits are significantly affected. However, Districts with a population of less than 500,000 persons are exempted from the socioeconomic analysis. In 20 10

, the population of Placer County was approximately 3 4 8 ,000 persons.

California Environmental Quality Act (CEQA)

Proposed rescission of these r ules is not an activity that may cause a direct or reasonably foreseeable indirect physical effect in the environment therefore not considered a “project”, as defined by Section 21065 of the California Public Resource Code and Section 15378(b)(4)&(5)

of th e CEQA guidelines. A CEQA analysis is therefore not necessary.

Findings

A. Necessity

– The rescission of these rules is necessary in order to delete District rule s that

are no longer relevant to current stationary sources

.

B. Authority

– California Health and Safety Code, Sections 40000, 40001, 40702, and

39666 are provisions of law that provide the District with the authority to adopt , amend,

or rescind Rule s

.

C. Clarity

– There is no indication, at this time, that the proposed Rule is writ ten in such a manner that persons affected by the Rule cannot easily understand them.

D. Consistency

– The regulation is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations.

E. Non

- duplication

– The regulation does not impose the same requirements as an existing state or federal regulation.

F. Reference

– All statutes, court decisions, and other provisions of law used by PCAPCD in interpreting this regulation is incorporated into this analysis and this finding by

referen ce.

Exhibits: Rule 227, Petroleum Dry Cleaning Operations Rule 229, Fiberboard Manufacturing Rule 230, Plastic Products and Materials

– Paper Treating O perations Rule 232, Biomass Suspension Boilers Rule 237, Municipa l Landfills Rule 241, Boilers at Plastic Laminate Manufacturing Facilities Rule 506, Biomass Emission Reduction Credits and Banking Rule 805, Notice to Comply