### ATTACHMENT F

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

Final Staff Report

Proposed Amended Rule 461 – Gasoline Transfer and D ispensing

April 2012

Deputy Executive Officer, Planning, Rule Development, and Area Sources, Elaine Chang, Dr.PH

Assistant Deputy Executive Officer, Planning, Rule Development, and Area Sources, Laki Tisopulos, Ph.D., P.E.

Planning and Rules Manager, Planning, Rule Development, and Area Sources, Naveen Berry

__________________________________________________ __________________________ AUTHOR: Don Hopps AQ Specialist
REVIEWED BY: William Wong Principal Deputy District Counsel
David Ono Program Supervisor

Danny Luong Senior Enforcement Manager, E&CSOUTH 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

MEMBERS: MICHAEL D. ANTONOVICH Supervisor, Fifth District County of Los Angeles

JOHN J. BENOIT Supervisor, Fourth District County of Riverside

MICHAEL A. CACCIOTTI Mayor, 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 Councilwoman, Ninth District City of Los Angeles

MIGUEL A. PULIDO Mayor, Santa Ana Cities of Orange County

EXECUTIVE OFFICER: BARRY R. WALLERSTEIN, D.ENV. Formatted: Spanish (Mexico)TABLE OF CONTENTS

i EXECUTIVE SUMMARY

E XECUTIVE S UMMARY

.................................................. ................................................... .......................... ES-1

CHAPTER 1 - BACKGROUND

I NTRODUCTION

.................................................. ................................................... ........................................ 1-1

R EGULATORY H ISTORY

.................................................. ................................................... ........................... 1-1

A FFECTED F ACILITIES

.................................................. ................................................... .............................. 1-1

ORVR B ACKGROUND

.................................................. ................................................... .............................. 1-1

U PCOMING C OMPLIANCE D EADLINES F OR A BOVEGROUND S TORAGE T ANKS

............................................ 1-3

CHAPTER 2: SUMMARY OF PROPOSED AMENDED RULE 461

O VERVIEW : P ROPOSED A MENDMENTS T O R ULE 461

.................................................. ................................. 2-1

N ON -R ETAIL F LEET E XEMPTION E XTENSION

.................................................. ............................................. 2-1

W HAT I S T HE D IFFERENCE I N E MISSIONS B ETWEEN ORVR A ND P HASE II EVR?

.................................. 2-1

ORVR I DENTIFICATION

– H OW D O Y OU V ERIFY I F A M OTOR V EHICLE H AS ORVR?

............................ 2-2

ORVR E FFECTIVENESS A ND L ONG T ERM R ELIABILITY

.................................................. ......................... 2-3

W HAT D OES A F ACILITY H AVE T O D O T O G O F ROM A P HASE II EVR S YSTEM T O A N ORVR S YSTEM ?

.... 2-4

E-85 C ONDITIONAL E XEMPTION

.................................................. ................................................... .............. 2-5

M ONTHLY T HROUGHPUT D EADLINE

.................................................. ................................................... ....... 2-5

CARB R EQUIREMENTS R EFERENCES

.................................................. ................................................... ...... 2-6

B ACKFILL R EQUIREMENTS

.................................................. ................................................... ...................... 2-6

A DDITIONAL A DMINISTRATIVE C HANGES

................................................... ................................................. 2-6

CHAPTER 3: IMPACT ASSESSMENT

I NTRODUCTION

.................................................. ................................................... ........................................ 3-1

E MISSION I MPACT A SSESSMENT

.................................................. ................................................... .............. 3-1

C OST A NALYSIS

.................................................. ................................................... ....................................... 3-2

I NCREMENTAL C OST E FFECTIVENESS

.................................................. ................................................... ...... 3-2

C ALIFORNIA E NVIRONMENTAL Q UALITY A CT (CEQA)

................................................... ............................ 3-2

S OCIOECONOMIC I MPACT A SSESSMENT

.................................................. ................................................... .. 3-2

D RAFT F INDINGS UNDER C ALIFORNIA H EALTH AND S AFETY C ODE 40727

................................................. 3-3

C OMPARATIVE A NALYSIS

.................................................. ................................................... ........................ 3-3

P UBLIC C OMMENTS AND S TAFF R ESPONSES

.................................................. .............................................. 3-3

TABLES AND EXHIBITS

T ABLE -1: ORVR P HASE

- IN S CHEDULE

.................................................. ................................................... ... 1-2

E XHIBIT -1: N ON -ORVR F ORD V EHICLE

.................................................. ................................................... . 2-3

E XHIBIT -2: ORVR E QUIPPED S UBARU

.................................................. ................................................... .... 2-3

REFERENCES

.................................................. ................................................... ......................... R-1EXECUTIVE SUMMARY

### Executive Summary Final Staff Report

Proposed Amended Rule 461 ES-1 April 2012 EXECUTIVE SUMMARY Rule 461 – Gasoline Transfer and Dispensing applies to the transfer of gasoline from any tank truck trailer, or railroad tank car into a stationa ry storage tank or mobile fueler, and from any stationary storage tank or mobile fueler into any m otor vehicle fuel tank. This rule applies to all facilities that have certain storage capacity to tr ansfer and dispense gasoline. Generally, the equipment used for transfer and storage of gasoline has to be certified by the California Air Resources Board (CARB). Staff is proposing several changes to Rule 461 – Gasoline Transfer and Dispensing.

This proposed amendment for Rule 461 is designed to :



### • Provide non-retail facilities that meet certain con ditions and have fleets with 100% Onboard Refueling Vapor Recovery (ORVR) with an alter nate way to comply in lieu of installing Phase II Enhanced Vapor Recovery (EVR) s ystems certified by CARB;



### • Remove temporary exemptions for dispensing of E-85;



### • Change the deadline for submitting monthly gasoline throughput records to a specific date;



### • Add specific requirements for backfill inspections;



### • Require compliance with applicable CARB requirement s or procedures; and



### • Make other non-substantial changes to provide clari fication, improve enforceability and make administrative changes.

The proposed amendment provides non-retail faciliti es that meet certain conditions and have 100% On-board Refueling Vapor Recovery (ORVR) fleet s with an alternate way to comply in lieu of installing Phase II Enhanced Vapor Recovery (EVR) systems that would otherwise be required to be installed by April 1, 2012.

The proposed amendment will remove the temporary ex emption language for dispensing E-85 by removing the definition for E-85 (85% ethanol, 15% gasoline) from the rule and will remove paragraph (c)(4) which allows E-85 dispensing to co ntinue without Phase II EVR up to April 1, 2012. While E-85 will be now regulated as gasoline , there is currently no E-85 compatible Phase II vapor recovery system that is approved under CAR B Executive Orders. In lieu of the temporary exemption, the proposed rule includes as exemption from those portions of the rule that require equipment and components to be CARB ce rtified when an applicable CARB

Executive Order is not in effect. The net effect o f the changes is to align the compliance timeline

for Phase II EVR with the issuance of a CARB Execut ive Order for E-85 compatible Phase II systems, which would also require installation four years following issuance.

The proposed amendment will change the deadline for submitting monthly gasoline throughput records to a specific date that will allow the owne rs/operators to submit their throughput data directly to District staff. The current version of the rule requires the throughput data to be submitted together with the periodic test results w hich are currently submitted by an independent party, typically the contractor conducting the sour ce test. This change will make the submission and handling of throughput records more efficient b ecause the owners/operators will submit these records directly to AQMD staff, rather than t hrough a third party.

The proposed amendment will add specific requiremen ts for backfill inspections and make explicit the requirement that the vapor lines (pipe s) be in a state of readiness for inspection prior

### Executive Summary Final Staff Report

Proposed Amended Rule 461 ES-2 April 2012 to the inspector arriving for the inspection and th at the equipment shall not be disturbed after passing inspection or be disturbed during the backf illing operation. Additionally, the proposed amendment requires owners/operators to schedule a t ime for inspection with the District after the vapor lines and related appurtenances are in a stat e of readiness. This change is designed to further enhance the compliance review program.

Lastly, the proposed amendment will add additional references to existing rule language which requires compliance with applicable California Air Resources Board (CARB) requirements or procedures including CARB’s approved Installation, Operation and Maintenance (IOM) manual, which was designed by CARB to assist owners/operato rs of the additional manufacturer requirements.CHAPTER 1: BACKGROUND

ο Introduction

ο Regulatory History

ο Affected Facilities

ο ORVR BackgroundChapter 1: Background Final Staff Report

Proposed Amended Rule 461 1-1 April 2012 INTRODUCTION Rule 461 – Gasoline Transfer and Dispensing applies to the transfer of gasoline from any tank truck trailer, or railroad tank car into a stationa ry storage tank or mobile fueler, and from any stationary storage tank or mobile fueler into any m otor vehicle fuel tank. This rule applies to all facilities that have certain capacity to transfer a nd dispense gasoline.

There are approximately 3,300 retail Gasoline Dispe nsing Facilities (GDFs) and an estimated 1,200 non-retail GDFs that are equipped with Underg round Storage Tanks (UST) for gasoline transfer and storage and are subject to the Phase I I Enhanced Vapor Recovery (EVR) requirements. However, about ten percent (120) of these service fleets are equipped exclusively with On-board Refueling Vapor Recovery (ORVR) syste ms that use an on-board activated carbon canister to capture displaced gasoline vapor from r e-fueling without returning the vapor to the stationary storage tanks. These facilities have op ted to comply with the existing ORVR alternative to Phase II EVR for non-retail gasoline dispensing facilities that requires, among other requirements, the UST vapor return line to be cappe d off (sealed) and relies on ORVR equipped motor vehicles to capture emissions during refuelin g operations.

Additionally, there are 500 GDF’s that are equipped with above ground storage tanks. The total throughput of gasoline in the District is seven bil lion gallons and 95% of the annual volume is dispensed through retail GDFs. Without vapor recov ery, the VOC emissions are estimated to be 170 tons per day uncontrolled; however with vapor r ecovery controls, daily VOC emissions are

estimated to be 14 17 tons per day which makes Rule 461 one of the most s ignificant control strategies for VOC emissions in the District.

REGULATORY HISTORY Rule 461 was adopted on January 9, 1976 and has sub sequently been amended 18 times. The most recent amendment was on March 7, 2008.

AFFECTED INDUSTRIES The proposed amendment affects anyone who transfers or dispenses gasoline from a stationary storage tank with a capacity greater than 120 gallo ns; however, because of its narrow scope, staff believes this amendment will have minimal impact. Firstly, 120 non-retail GDFs that currently have a temporary exemption (until April 12, 2012) f rom installation of Phase II EVR systems will be allowed to continue using ORVR systems provided that they continue to meet certain criteria. Secondly, the proposed amendment to conditionally e xempt non-certified equipment from the rule will replace the current exemption from installing a CARB certified vapor recovery system for the storage of E-85 until such a time when a system com patible with E-85 is certified by CARB. This will align requirements regarding applicability tim ing under this rule with the requirements under state law. Finally, a new method of receiving thro ughput data, scheduling a time for backfill inspections and ensuring that all underground stora ge tank installation and piping meet all the requirements under the applicable CARB Executive Or ders before scheduling a time for a backfill inspection are administrative in nature. The remai ning proposed administrative changes will delete outdated rule language and provide clarity to the r ule.

ORVR BACKGROUND ORVR is mandated by Title 13 of the California Code of Regulations (CCR), Section 1978 and 40 Code of Federal Regulations (CFR) Part 86. ORVR sy stems were introduced for 1998 model year motor vehicles and is now required on all new cars and trucks.Chapter 1: Background Final Staff Report

Proposed Amended Rule 461 1-2 April 2012 The CAA Section 182 (b)(3) requires GDFs dispensing gasoline in “Moderate,” “Serious,”

“Severe” and “Extreme” ozone nonattainment areas to equip gasoline dispensing equipment with Phase II vapor recovery control systems. The U.S. EPA began the phase-in of ORVR as shown in

Table-1 below.

TABLE-1: ORVR PHASE-IN SCHEDULE

Vehicle Class 40% Fleet 80% Fleet 100% Fleet

Passenger Vehicles 1998 1999 2000

Light Duty Trucks & Medium Duty Vehicles (0-6000 lbs GVWR 2001 2002 2003

Medium Duty Vehicles (6001-8500 lbs GVWR) 2004 2005 2006

In 1993, the U.S. EPA adopted the On-board Diagnost ic (OBD II) System for passenger cars and light-duty trucks and eventually for heavy-duty gas oline vehicles up to 14,000 GVWR. OBD II is designed to monitor the performance of systems such as engine and emission control systems. OBD II also monitors the evaporative emissions cont rol system, which includes ORVR. ORVR is designed to share the same vapor lines, purge valve s, purge lines and an activated carbon canister as the other engine systems and emission control sy stems. In the event the OBD II system detects a problem with the engine or emission control syste m, the OBD II system will illuminate either a “Check Engine” or “Service Engine Soon” warning lig ht on the vehicles instrument panel to alert the driver of a problem. The vehicle can then be s erviced by a repair technician. The vehicle manufacturer’s warranty covers ORVR components up t o two years or 24,000 miles. However, if a recall is made, the warranty can be extended for the useful life of the vehicle, typically 10 years or 100,000 miles for passenger cars.

There are two systems used for Phase II EVR, a bala nce system and a vapor recovery assist system. Prior to the Phase II EVR requirements, a balance system consisted of a semi-closed loop system where fuel was transported from the UST to t he dispenser and into the vehicle’s fuel tank via a dispensing nozzle. As the liquid level in th e vehicle’s gasoline tank increased the gasoline vapors were displaced and routed back through the d ispensing nozzle and into the UST. The vacuum assist system is quite similar to the balanc e system except it has an auxiliary pump to create a vacuum to draw the gasoline vapors from th e vehicle’s gasoline tank through the dispensing nozzle and back into the UST.

The proposed alternative to installing Phase II EVR at non-retail GDFs relies on ORVR technology which has already been installed in cert ain vehicles (refer to Table-1) to control vapors generated from the refueling operation that would o therwise be returned to the storage tanks via the vapor return piping. The ORVR system consists of an on-board activated carbon packed canister to absorb the vapors during a refueling op eration. The captured vapors in the activated carbon canister are then drawn to the engine intake where they are combusted during normal motor vehicle operation. Therefore, the vapor return pip ing is no longer necessary and is required to be capped off. Additionally, the facilities are requi red to utilize certified fueling hoses and nozzles to take advantage of the features required for these c omponents under CARB Phase II EVR

standards.Chapter 1: Background Final Staff Report

Proposed Amended Rule 461 1-3 April 2012 UPCOMING COMPLIANCE DEADLINES FOR ABOVEGROUND STORA GE TANKS There are several upcoming EVR compliance deadlines for aboveground storage tanks, based on previously issued CARB Executive Orders. The first of such deadlines will be for Standing Loss Control which will be effective on April 1, 2013. The second will be for Phase I EVR which will be effective on July 1, 2014. Because Rule 461 cur rently requires CARB certified equipment, both of these effective dates are applicable to existing aboveground storage tanks. New aboveground storage tanks are already subject to each of these requirements.CHAPTER 2: SUMMARY OF PROPOSED AMENDED RULE 461

ο Overview: Proposed Amendment To Rule 461

ο Non-Retail ORVR Fleet Exemption Extension

− What is the difference in emissions between ORVR an d Phase II EVR?

− ORVR Identification – how do you verify if a motor vehicle has ORVR?

− ORVR effectiveness and long term reliability

− What does a facility have to do to go from a Phase II EVR system to an ORVR system?

ο E-85 Exemption Removal

ο Monthly Throughput Deadline

ο CARB Requirement References

ο Backfill Requirements

ο Additional Administrative Changes

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-1 April 2012 OVERVIEW: PROPOSED AMENDMENT TO RULE 461 Staff is proposing several changes to Rule 461 – Ga soline Transfer and Dispensing. Proposed Amended Rule (PAR) 461 is designed to: (1) provide non-retail GDFs that meet certain

conditions and have fleets with 100% On-board Refue ling Vapor Recovery, with an alternate way to comply in lieu of installing Phase II Enhanc ed Vapor Recovery systems certified by CARB; (2) remove temporary exemption for dispensing of E-85; (3) change the deadline for submitting monthly gasoline throughput records to a specific date; (4) add specific requirements for backfill inspections; (5) require compliance wi th applicable CARB requirements or procedures; and (6) make other non-substantial chan ges to provide clarification, improve enforceability and make administrative changes.

NON-RETAIL ORVR FLEET EXEMPTION EXTENSION - PAR461: (c)(2)(4) Staff proposes to exempt non-retail GDFs with 100% ORVR equipped fleets from installing Phase II EVR, currently required by April 1, 2012. The rule currently provides a non-retail gasoline dispensing facility an alternative complia nce option to installing Phase II EVR system if it meets certain criteria. Among the criteria for qualifying for this alternative option was to install and maintain a pressure monitoring device t o collect pressure data within the gasoline storage tanks. Staff collected and analyzed the re quired pressure data and potential for emissions from the storage tanks operating without the requir ed pressure management equipment, as under Phase II EVR. Approximately 120 non-retail GDFs ha ve applied for this alternative compliance option. All of these GDFs are equipped with Phase I EVR as specified under Paragraph (c)(1).

Staff has analyzed the data collected from the pres sure monitoring equipment and conservatively

estimated that the total emissions due to the absen ce of any pressure management system from all 120 non-retail GDFs to be less than 1.2 pounds/ day or 0.21 tons/year, considered to be well below the level of significance. It is also estima ted that retrofitting these systems with Phase II EVR systems will likely exceed $1,800,000 (a minimu m of $15,000 per facility) and the annual operating and maintenance cost will be about $120,0 00 (or $1,000 per facility). Actual cost of the system will be dependent on the type of pressur e management system chosen by the GDFs. Currently, there are up to four pressure management systems and two different types of Phase II EVR systems available. Considering the collective estimated emissions increase of only 1.2 pounds per day and relatively high cost of the cont rol equipment, staff is proposing to make permanent the alternative compliance option under P aragraph (c)(5) provided a facility can meet the criteria listed without the requirement for ins talling a pressure monitoring device.

What is the difference in emissions between ORVR an d Phase II EVR? Staff conducted an analysis on data collected from 99 ORVR GDFs that were required to record pressure data within the UST to estimate fugitive e missions. Staff also analyzed samples collected at the dry breaks connected to the underg round gasoline storage tanks and at connectors to the pressure management system. Usin g these pressure and concentration data,

staff estimated that the total emissions due to the absence of any Phase II EVR pressure management system from all 120 non-retail GDFs coll ectively was approximately 428 pounds per year of VOCs. The basis for the difference of emissions between the ORVR and the Phase II EVR are from two emission sources; at the nozzle /vehicle tank fill tube interface and from the UST vent pipes. In the case of Phase II EVR, fuel is transported from the UST to the dispenser and into the vehicle’s fuel tank via the dispensing nozzle. As the liquid level inside the vehicles gasoline tank rises, the vapors are displaced and a re then captured by the EVR system and

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-2 April 2012 ultimately returned back into the UST. Due to the high rate of fuel dispensing at retail GDFs, the UST experiences a loss of liquid level which in duces vapor growth, and increases the pressure inside the UST. The Phase II EVR systems incorporate a pressure management system such as an air bladder, incineration, carbon filled canister or any other CARB approved method to capture and process any emissions vented from th e UST pressure/vacuum relief valves. Unlike the Phase II EVR, the gasoline vapors are no t returned to the UST during a refueling operation equipped with an ORVR system. Instead, t he vehicles ORVR system collects the displaced gasoline vapors with the use of an activa ted carbon containing canister. The adsorbed vapor is later stripped from the carbon bed by air and released to the vehicle’s engine as combustion air later while the engine is running. Since no vapor return is needed, the vapor return line to the UST is sealed off at the dispens er. Since no vapor is returned to the USTs, pressure build up within the vapor phase in the UST is strictly due to evaporation of the stored gasoline. Due to the lack of a pressure management device, fugitive emissions occur whenever the tank pressure exceeds the preset cracking press ure of the pressure/vacuum relief valve.

In addition to analyzing the pressure data, staff a lso utilized infrared (IR) video cameras to investigate the effectiveness of the ORVR systems f or controlling fugitive emissions at the nozzle/fuel pipe interface. Based on comparison be tween IR videos taken of a conventional fueling (Phase II EVR equipment on a non-ORVR vehic le) and fueling of an ORVR equipped vehicle with the Phase II vapor return line sealed at the dispenser, there was no distinguishable

difference in observed emissions at the nozzle/fuel pipe interface. Thus, the only emissions forgone in this proposal would be from the vent pip e of the UST particularly when the internal tank pressure exceeds the preset cracking pressure of the pressure/vacuum relief valve which is generally set at 3.5 inches of water column.

ORVR Identification – how do you verify if a motor vehicle has ORVR? The discussion above noted that only non-retail GDF s that have 100% ORVR fleets and meet certain conditions are eligible for the Phase II EV R alternative, the ORVR system. The U.S. EPA mandated that all passenger cars and light duty trucks have ORVR system installed in the vehicles beginning with model year 2000 (refer to T able-1 for other types of vehicles). A method to determine if a vehicle is equipped with t he ORVR system is to inspect the emissions decal which is typically installed under the hood o f the vehicle (front engine) or the engine cover (for rear mounted engines or mid-mounted engines).

Exhibit-1 shows the emissions label for an older mo del Ford Vehicle, equipped with catalyst but not equipped with ORVR. The “EVAP” number is given as 3FMXE0155BAF. In this case the

fifth character of the EVAP is an “E” which means t his vehicle is not equipped with ORVR. If

this fifth letter was an “R” it would indicate that this vehicle was equipped with ORVR.

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-3 April 2012 EXHIBIT-1: NON-ORVR FORD VEHICLE

Exhibit-2 shows the emissions label for a recently manufactured Subaru vehicle, equipped with catalyst and ORVR. The “EVAP” number is given as 9 FJXR01253CN. The fifth character of the EVAP is the letter “R” designating this vehicle to be equipped with ORVR.

EXHIBIT-2: ORVR EQUIPPED SUBARU

ORVR effectiveness and long term reliability Staff contacted CARB staff to discuss their experie nce with effectiveness and long term reliability of ORVR systems. CARB staff stated tha t the data on long-term effectiveness of the

activated carbon in the canister used for controlli ng refueling and diurnal evaporative emissions

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-4 April 2012 should remain effective for the life of the vehicle . In addition, they confirmed their observation through in-use testing including testing conducted by the manufacturers. CARB staff also reported that since the same carbon packed canister that catches refueling emissions also captures diurnal emissions, if there were significa nt issues with the carbon packed canisters, CARB staff would have detected systemic problems in the diurnal tests on in-use vehicles.

CARB staff also commented that the manufacturers co nduct ORVR testing during their in-use verification program and have never had a vehicle f ail the test due to excess emissions. CARB staff informed AQMD staff that the ORVR carbon pack ed canisters are not in the current smog check program (for California affected vehicles) bu t the vehicle’s OBD II does monitor vehicle purge and evaporative system integrity for leaks. There have not been any in-use compliance issues with regard to ORVR. Finally, CARB staff st ated that they were extending the ORVR requirement to all complete vehicles under 14,000 p ounds GVWR, so all light duty and most medium duty vehicles will have ORVR starting in 201 5.

Staff also contacted the U.S. EPA’s Transportation and Air Quality unit to discuss their experience with effectiveness and long term reliabi lity of ORVR systems. Staff was informed that several ORVR equipped vehicles were tested whe n new and were found to have emissions capture reliability and capture efficiencies of 98% . Staff was also informed that several ORVR equipped vehicles were tested that had been in serv ice for ten years and those vehicles still had effective reliability and capture efficiencies of 9 8%. U.S. EPA’s staff found that failures were not a factor and were very rare. U.S. EPA staff in formed AQMD staff that ORVR vehicles are equipped with OBD II which monitors the vehicles em ission system, including the activated carbon inside the canister for the ORVR system. Th ey concurred with staff that if there was a problem (such as the activated carbon becoming satu rated with gasoline vapors) the OBD II would illuminate the “Engine Check Light” to alert the driver of a problem and is sensitive enough to even catch a gas cap that is not secured tightly. Staff recognizes that ORVR is not directly monitored by the OBD II system and therefo re will continue to assess long term effectiveness and reliability.

What does a facility have to do to go from a Phase II EVR system to an ORVR system? Should a non-retail facility equipped with 100% ORV R vehicles and with Phase II EVR choose to opt out of the Phase II EVR by virtue of a 100% ORVR fleet consideration, there are several requirements that would need to be followed. A non -retail facility would have to obtain a permit to operate which would limit fueling of only ORVR e quipped vehicles, seal off the vapor return line from the dispenser to the UST, and use CARB ce rtified hanging hardware (i.e. hoses, breakaways and nozzles).

In summary, the proposal to allow an alternate appr oach to installing Phase II EVR will instead require the use of CARB certified Phase I EVR requi rement, which includes the use of a CARB certified pressure relief valve, the use of Phase I I EVR approved hanging hardware including hoses, breakaways, and nozzles, sealing the vapor r eturn line, and an application for a permit that will require fueling of only ORVR equipped vehicles , except for a vehicle used to respond to an on-going emergency.

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-5 April 2012 E-85 CONDITIONAL EXEMPTION - PAR461: (b)(12), (c)(4 ), & (g)(3) Staff proposes to remove the definition of E-85 to minimize redundancy within the definitions section. E-85 is a blend of 85% ethanol and 15% ga soline and has a Reid Vapor Pressure greater than 205 mm Hg [equates to 4.0 pounds per square in ch (psi)]. Gasoline is defined under the current the version of Rule 461, paragraph (b)(15), as “any petroleum distillate or petroleum distillate/alcohol blend having a True Vapor Pressu re greater than 200 mm Hg (3.9 psi) and less than 760 mm Hg (14.7 psi) at 100 degrees F (Fahrenh eit) as determined by ASTM Method D323-89.” Therefore, E-85 falls under the definiti on for gasoline. Removal of the definition of E-85 under Paragraph (b)(12) and Paragraph (c)(4) w ould mean that operations involving E-85 would be subject to the same requirements as operat ions involving gasoline. Currently, there is no E-85 compatible Phase II Enhanced Vapor Recovery System that is approved under CARB Executive Orders. Therefore, existing systems disp ensing E-85 would not have to install Phase II EVR until four years after the first compatible system has been certified by CARB. Additionally, a conditional exemption for such syst ems is added to the proposed amended rule under paragraph (g)(3) to provide additional clarit y.

CARB’s Executive Order VR-203-I states “The VST Pha se II EVR System is not compatible with gasoline that has a methanol content greater t han 5 percent or an ethanol content greater than 10 percent. Any modifications to comply with future California gasoline requirements shall be approved in writing by the Executive Officer or Executive Officer delegate”. And “VST Phase II EVR Systems certified under Executive Orde r VR-203-A through H may remain in use at existing installations up to four years after th e expiration date of this Executive Order”. All existing VR-200 series CARB Executive Orders have s imilar restrictions. E-85 can have an

ethanol content as low as 70% and thus the VST Phas e II EVR system is not compatible for E-85 dispensing operations. However, it should be point ed out that the 4-year time clock for a newly adopted CARB Executive Order begins upon issuance o f that order but will allow existing systems additional 4 years to comply.

MONTHLY THROUGHPUT DEADLINE – PAR461: (c)(3)(Q) Staff proposes to add a specific deadline for submi tting monthly gasoline throughput records. The rule currently has a throughput data submittal requirement to confirm compliance with various requirements, such as frequency of test, pe rmit conditions, toxic risk analysis, and installation of an In-Station Diagnostic (ISD) syst em. The throughput data are required to be submitted together with the periodic test results w hich presents a confidentiality problem because sources are asked to submit their throughput data v ia their testers who are contractors. The addition of a date (March 1 for the previous calend ar year data) and the addition of having a fax submittal option, ensures that data is being submit ted directly to AQMD, in a timely manner and removes any confidentiality concerns cited by the G DFs.

Sample throughput logs have been provided to the GD Fs and are in common use. Other recording forms are acceptable as long as monthly t hroughput data are clearly listed. The method for submittal of the throughput data will re main the same as what is currently required in the rule since the proposed amendment is focused on a specific deadline date. Additionally, records may be submitted via a dedicated facsimile line. The District is proposing to set a deadline date for the collection of throughput data no later than March 1 of each and every year thereafter. If the proposed rule is adopted, the r equirement will start on the date of approval of

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-6 April 2012 the amendment and throughput data during Calendar Y ear 2012 will have to be submitted by March 1, 2013.

CARB REQUIREMENT REFERENCES – PAR461: (c)(2)(B), (c )(2)(G)(i), (c)(2)(N) (e)(1), (e)(2) Staff proposes to include additional references in the rule language The Executive Orders issued by CARB for EVR systems have incorporated by refere nce various test methods, inspection procedures, and detailed operation of equipment and maintenance in the CARB approved Installation, Operation and Maintenance (IOM) manua ls. Adding specific references to the applicable CARB approved IOM manuals under the spec ified sections of Rule 461 will ensure

that GDFs are aware of the additional manufacturer requirements and add clarity to the requirements that operations must comply with.

BACKFILL REQUIREMENTS – PAR461: (c)(2)(N) Backfill inspections are required to confirm that v apor return lines to the UST are constructed with proper slope and meet the applicable CARB requ irements in the Executive Orders. Improper sloping can lead to blockage in the vapor line from condensate accumulation inside the pipe. Vapor recovery system efficiency will be sev erely impaired if liquid blockage forms. It is important that the vapor return piping be kept in t he same manner when it was inspected and approved throughout the backfill operation when the line is buried underground. The proposed amendment will make explicit the requirement that t he vapor piping be in a state of readiness for inspection and not be disturbed after passing inspe ction or during the backfilling operation. Although this has been the intent, the proposed ame ndment addresses properly installed equipment and enhances enforceability and resource efficiency.

Previously, staff spent an abundance of time waitin g for contractors to properly situate the vapor return piping at the pre-scheduled time of inspecti on. On some occasions, inspectors have found the vapor piping to not have the proper slope only to have some contractors indicate that the system was not quite ready for inspection regardles s of the pre-scheduling. The proposed amendment should help minimize this inefficiency.

ADDITIONAL ADMINISTRATIVE CHANGES – PAR461: (f), (i ) & (j) Staff proposes to make other administrative changes to the rule as follows:

1. Currently, subdivision (f) lists out-of-date tes t procedures or test procedures already included

in CARB Executive Orders. The list of actual test methods are proposed to be removed to avoid redundancy and conflicts with the most curren t CARB approved test methods. CARB Executive Orders list the specific types of testing that must be conducted with each system. To further clarify the testing requirements, the pr oposal includes guidelines for tests to be

conducted in accordance with the most recent CARB t est methods, applicable CARB Executive Orders, approved IOM or any test methods approved in writing by other agencies such as the U.S. EPA, CARB or the District.

2. The dates for compliance plans for the implement ation of Phase II EVR requirements and the applications requirement that were required for a p ermit to construct and operate have expired. These sections are proposed to be removed because all deadlines under these sections have passed.

### Chapter 2: Summary of Proposed Amended Rule 461 Fin al Staff Report

Proposed Amended Rule 461 2-7 April 2012 3. Add additional language to paragraph (c)(2) of P AR 461 in order to make the language consistent with language in paragraph (c)(1). This change will make it consistent with historical implementation.CHAPTER 3: IMPACT ASSESSMENT

ο Introduction

ο Emission Impact Assessment

ο Cost Analysis

ο Incremental Cost Effectiveness

ο California Environmental Quality Act (CEQA)

ο Socioeconomic Impact Assessment

ο Draft Findings under California Health and Safety C ode 40727

ο Comparative Analysis

ο Public Comments and Staff ResponsesChapter 3: Impact Assessment Final Staff Report

Proposed Amended Rule 461 3-1 April 2012 INTRODUCTION The proposed amendment exempts non-retail GDFs with 100% ORVR fleets that would otherwise be required to install Phase II EVR. A non-retail GDF has the option under the current rule but only until April 1, 2012 to utilize this exemption. The following reviews the emission impact associated with removing the April 1, 2012 end date

.

EMISSION IMPACT ASSESSMENT There are two main emission sources from gasoline t ransfer and dispensing operations, where Phase I vapor recovery control equipment is require d for gasoline transfer equipment and Phase II vapor recovery control equipment is required for ga soline dispensing equipment.

Phase I vapor recovery systems recover gasoline vap ors generated during the transfer of gasoline from a fuel delivery truck into an underground or i n some cases, an aboveground storage tank. The proposed amendment does not affect Phase I vapo r recovery control requirements.

Phase II vapor recovery systems recover gasoline va pors generated during the refueling of a motor vehicle and from the storage of gasoline. An alter nate method to the conventional Phase II EVR system is the ORVR system, which is designed with a n on-board activated carbon canister to capture gasoline vapors during a refueling operatio n and subsequently release the vapors during vehicle operation (the vehicles engine combusts the vapors). The current rule allows this alternative method in conjunction with permitted re quirements to install and maintain a pressure monitoring device to collect pressure data within t he gasoline storage tanks. Staff conducted an analysis on 120 ORVR sites to obtain data to estima te fugitive emissions. Staff analyzed samples collected at the dry breaks of the gasoline USTs an d at the connectors to the pressure management system and, together with the pressure data, estima ted that the total emissions due to the absence of any Phase II EVR pressure management system from al l 120 non-retail GDFs collectively was approximately 428 pounds per year of VOCs. The cal culations are shown below:

Emission Rate =

Factor Conversion T R MW

ion Concentrat V P

×× × × × = 0.12 lb/hr (1)

Where:
P* = 735.25 torr = 0.97 atmosphere = 1 atmosphere V* = 23.2 gal/hr
R = 0.73 (cu ft)(atm)/R/lb

⋅ mole

T = 528 ° R Concentration* = 0.336 (as propane) MW = Molecular Weight = 44 lb/lb

⋅ mole

Conversion Factor = 7.48 gal/cu ft *averaged value from data collected

lb/hr 12.0

ft. cu. gal 7.48 R) (deg 528 Rdeg mol) -lb ft.)(atm)( (cu. 0.73 mol-lb lb 44 336.0 hr gal 2.23 (atm) 97.0

Rate Emission =      

× ×              

× ×      

×

= (2)

The total hours of fugitive emissions monitored for 120 sites: 3,564 hours per year.

Therefore, the emissions for the year monitored are as calculated: 3,564 hrs/yr x 0.12 lb/hr = 427.68 lbs/yr = 428 pou nds per year.Chapter 3: Impact Assessment Final Staff Report

Proposed Amended Rule 461 3-2 April 2012 COST ANALYSIS PAR461 results in a cost savings to the industry, s ince they will be able to continue operations

without additional hardware installation.

INCREMENTAL COST-EFFECTIVENESS Under Health and Safety Code § 40920.6, the AQMD is required to perform an incremental cost analysis when adopting a Best Available Retrofit Co ntrol Technology (BARCT) rule or feasible measure required by the California Clean Air Act. To perform this analysis, the AQMD must (1) identify one or more control options achieving the emission reduction objectives for the proposed rule, (2) determine the cost effectiveness for each option, and (3) calculate the incremental cost effectiveness for each option. To determine increm ental costs, the AQMD must “calculate the difference in the dollar costs divided by the diffe rence in the emission reduction potentials between each progressively more stringent potential control option as compared to the next less expensive control option.”

The proposed amendment to Rule 461 does not impleme nt a BARCT requirement or feasible control measure, and therefore § 40920.6 is inappli cable.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) Pursuant to CEQA Guidelines §15002(k)(1), staff has reviewed proposed amended Rule 461 and determined that it is exempt from CEQA requirements pursuant to State CEQA Guidelines §15061(b)(3) because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the envir onment. A Notice of Exemption will be available pursuant to CEQA Guidelines §15062 and fi led with the county clerks in each county within the SCAQMD’s jurisdiction. Copies of the CE QA document can be obtained by calling the SCAQMD’s Public Information Center at (909) 396-203 9.

SOCIOECONOMIC IMPACT ASSESSMENT Proposed amendments to Rule 461 include clarificati ons of existing rule language designed to improve compliance with existing requirements; prov ide additional compliance pathways for nonretail fuel dispensaries; extend exemptions for the dispensing of E-85; change the timing for the submission of throughput records; and enhance the c oordination of backfill inspections. Other proposed changes are administrative in nature or in corporate existing CARB requirements by

reference.

Proposed changes that provide additional flexibilit y, such as the proposed exemption for non-retail dispensaries servicing 100% ORVR fleets, are expect ed to reduce compliance costs that would otherwise be incurred under the existing rule langu age. In the case of the 100% ORVR exemption from the Phase II EVR requirements, staff estimates a compliance cost reduction of $1.8 million. Compliance cost reductions are also anticipated fro m the proposed conditional E-85 exemption, which will continue to provide affected GDFs with a n additional four years to meet the existing compliance obligation to install Phase II EVR once a CARB designated Phase II EVR system has been certified. The proposed monthly throughput de adline requirement, compared to a yearly deadline, is not expected to significantly increase the compliance cost of affected GDFs because monthly throughout records are included in the exis ting recordkeeping requirement of Rule 461. The proposed requirement to ensure that underground storage tank sites be in a state of readiness for inspection does not require any additional acti vity at affected GDFs and is, thus, not expected to have impacts on their cost of compliance.Chapter 3: Impact Assessment Final Staff Report

Proposed Amended Rule 461 3-3 April 2012 The proposed amendments do not affect the scope of rule applicability nor impose new requirements on currently affected GDFs. Cost redu ctions are expected from additional flexibility afforded GDFs by the proposed amendments.

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY C ODE 40727 The draft findings include necessity, authority, cl arity, consistency, non-duplication and reference, as defined in Health and Safety Code Section §40727 . The draft findings are as follows:

Necessity - The AQMD Governing Board finds and dete rmines that Proposed Amended Rule 461 – Gasoline Transfer and Dispensing, is necessary to align Rule 461 with applicable CARB requirements and other statewide practices, and to enhance recordkeeping and reporting.

Authority - The AQMD Governing Board obtains its au thority to adopt, amend or repeal rules and regulations from Health and Safety Code §§ 40000, 4 0001, and 40440.

Clarity - The AQMD Governing Board finds and determ ines that Proposed Amended Rule 461 is written and displayed so that the meaning can be ea sily understood by persons directly affected by

it.

Consistency – The AQMD Governing Board finds and de termines that Proposed Amended Rule 461 is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or federal or state regulations.

Non-Duplication – The AQMD Governing Board has dete rmined that Proposed Amended Rule 461 does not impose the same requirement as any exi sting state or federal regulation, and the proposed amendment is necessary and proper to execu te the powers and duties granted to, and imposed upon, the AQMD.

Reference - In adopting this proposed amendment, th e AQMD Governing Board references the following statutes which AQMD hereby implements, in terprets or makes specific: Health and Safety Code Sections 40001, 40440, and 41950 to 419 64.

COMPARATIVE ANALYSIS California Health and Safety Code Section 40727.2 r equires the comparative analysis with any federal or other AQMD rules that apply to the same equipment or source type as the proposed amendments. There are no other AQMD rules that app ly to gasoline transfer and dispensing operations. There are no federal Phase II vapor re covery requirements for GDFs. The federal program requires the recovery of gasoline vapors fr om motor vehicle refueling through an Onboard Refueling Vapor Recovery (ORVR) vehicle emi ssion control system. In addition, the Governing Board finds that the proposed rule does n ot impose a new emission limit or standard.

PUBLIC COMMENTS AND STAFF RESPONSES The public workshop was held on January 27, 2012 an d on that date the public was informed that

the due date for comments would be extended from Fe bruary 3, 2012 until February 10, 2012. One comment letter was received by staff via e-mail

.Chapter 3: Impact Assessment Final Staff Report

Proposed Amended Rule 461 3-4 April 2012 COMMENT-1 Proposed 461 Amendment Cory Carnahan [carnahan.cory@gmail.com]

Sent: Fri 2/10/2012 5:01 PM To: Don B Hopps

Dear Mr. Don Hopps,

We here at Fuel Marketers Alliance represent over 2 50 independent gas stations in the greater Los Angeles metropolitan area. We would like to propos e an amendment to Rule 461. Due to the further restrictions on retail facilities in the pa st 6 years and the fact that service stations are n ow 98% efficient in vapor recovery (ARB), we believe t hat testing requirements should only be required once a year similar to Ventura country, Sa n Diego County, and Antelope Valley APCD. We have yet to find anything in the CARB Executive Orders that requires testing more than once a year. Since the installation of the Unihose Dispen sers, points of vapor leaks have been reduced significantly. Additionally, due to Phase I upgrad e requirements, the delivery of gasoline to the

tanks have become much more efficient. The recent Phase II upgrade has also further enhanced service stations’ vapor recovery system. Finally, with AQMD's enforcement of ISD (in station diagnostics) the district should be well satisfied that the systems operate with a minimal amount of vapor being released into the air. Service station s have been the most regulated industry in California, let alone Los Angeles. We believe that now that the stations are monitored 24 hours a day, 7 days a week, there is no need for bi-annual testing. Industry experts have stated that as long as the monitoring systems are working correctly, te sting twice a year is completely unnecessary. AQMD should follow the lead of the other agencies, not only the APCD's but also public works and fire department. We would like feedback to our proposal when AQMD makes its final

decision.

Thank you,

Cory Carnahan Director of Operations

Fuel Marketers Alliance

RESPONSE-1 The staff at AQMD appreciates your comment. While some agencies do require annual but not biannual reverification testing, some of these agen cies are in regions of California that have better air quality than the South Coast Air Basin. It sho uld be noted that the South Coast Air Basin’s air quality biannual reverification testing was impleme nted back on April 21, 2000, rather than the CARB’s annual reverification testing requirements t o better ensure air quality improvements under this rule. The AQMD is required to be as stringent as CARB’s Executive Orders but can be more stringent. Please be reminded that the enhanced te sting requirements of the April 2000 amendment were introduced to address the high industry-wide n on-compliance that was identified as part of the pre-amendment compliance sweeps conducted by AQ MD staff. The enhanced testing and subsequent hardware and software enhancements to th e vapor recovery system have contributed to improving compliance but vigilance is still needed to ensure that emissions from this source category, which happens to be among the largest sta tionary source categories, are minimized. The AQMD does recognize the ISD as a monitoring tool as well as an alerting tool but does notChapter 3: Impact Assessment Final Staff Report

Proposed Amended Rule 461 3-5 April 2012 consider it to be a compliance determination tool b ecause the thresholds for ISD alarms are not the same as testing standards. In fact, CARB and CAPCO A have agreed that ISD will not be used as a compliance tool. Reverification tests incorporated under CARB Executive Orders are designed to identify equipment deficiencies that adversely impa ct effectiveness of the EVR systems. AQMD’s compliance staff has increased its presence at reve rification tests and has witnessed many equipment deficiencies that needed repairs before t ests are successfully passed despite ISD installations. Many of these deficiencies would no t have been identified until tests are conducted even with the existence of ISD systems. AQMD staff also found that other deficiencies were not properly addressed because ISD alarms were overridd en without proper repairs or ISD systems failed to respond due to improper installation or m aintenance. AQMD staff believes that reverification tests are essential in ensuring prop er operating condition and early detection of equipment deficiencies especially at stations with high throughput rates. It is for these reasons AQMD staff does not support reducing the frequency of biannual reverification testing to annual.Proposed Amended Rule 461 R-1 April 2012

REFERENCES

SCAQMD Final Staff Report, Proposed Amended Rule 46 1 – Gasoline Transfer and Dispensing, February 2008, Helmy Sultan, Ph.D., Air Quality Spe cialist

COMMONLY ASKED QUESTIONS ABOUT ORVR, U.S. Environme ntal Protection Agency, Office of Air and Radiation, Office of Transportation and Air Quality, http://www.epa.gov/oms/regs/ld-hwy/onboard/orvrq-a. txt

ENVIRONMENTAL PROTECTION AGENCY, 40 CFR Part 51 [EPA–HQ–OAR–2010–1076; FRL–9439–4] RIN 2060–AQ97 Air Quality: Widespread Use for Onboard Refueling V apor Recovery and Stage II Waiver http://www.gpo.gov/fdsys/pkg/FR-2011-07-15/pdf/2011 -17888.pdf

SCAQMD Requesting Information on ORVR Motor Vehicle s, e-mail from: Rao, Leela@ARB [lrao@arb.ca.gov] to: Don B Hopps, Thursday, Februa ry 2, 2021 @ 10:52 AM