WILCOX&FETZERLTD. 

## InTheMatterOf: 

# StateofDelawareDepartmentof NaturalResoucesandEnvironmental Control

ProposedRevisionon7DEAdminCode1142 Section2

September30,2009

Wilcox

_Fetzer,Ltd. Phone:302-655-0477 Fax:302-655-0497 Email:depos@wilfet.com Internet:www.wilfet.comWilcox STATE OF DELAWARE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL 

### In re: ) Proposed Revision on ) 7 DE Admin Code 1142 Section 2 ) Division of Air &Waste Management 391 Lukens Drive New Castle, Delaware Wednesday, September 30, 2009 6:00 p.m. BEFORE: ROBERT P. HAYNES, ESQ., SENIOR HEARING OFFICER

PRESENT: FRANK F. GAO, DNREC RON AMIRIKIAN, DNREC C. RAVI RANGAN, DNREC BRUCE STELTZER, DNREC BOB WOJEWODZKI, VALERO THOMAS S. GODLEWSKI, JR., VALERO

WILCOX &FETZER, LTD. 1330 King Street

- Wilmington, Delaware 19801 (302) 655-0477 www.wilfet.com

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ElectronicallysignedbylucindaReeder**(201~240-129-2951)** 302-655-0477 12f14d02-Df534d21·9802·b29d06cb54e4Page 2 1 HEARING OFFICER HAYNES: This is the 2 time and theplace for a public hearing on a 3 proposed regulation to amend 7 Delaware 4 Administrative Code 1142 Section 2, Control of 5 Nitrogen Oxide Emissions from Industrial Boilers 6 and Process Heaters at Petroleum Refineries. 7 My name lS Robert Haynes. I have 8 been assigned to preside over this hearing and to 9 prepare a report of recommendations for the 10 Secretaryof the Department of Natural Resources 11 &Environmental Control, Collin O'Mara. 12 Tonight's hearing is to receive 13 public comments either orally or in writing from 14 the public. I note for the record we do have 15 members of the public here, which is probably the 16 onlymember of the public that's probably 17 impacted by this proposed regulation. So I think 18 they're the onlypeople other than the Department 19 representatives who are in the hearing room. 20 With that, I will turn it over to the 21 Department's representative, who will introduce 22 himself, and anybody else who wants to be 23 introduced andmake comments, and we'll develop 24 the hearing record. Very good.

wilcox Fetzer, Ltd. Registered Professional Reporters ElectronicallysignedbyLucindaReeder(201-240·129-2951) 302-655-0477 12f14d02-Df53-4d21·9802·b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

wilcox MR. GAO: Okay. As the Hearing Officer said, tonight's hearing is to address the proposed revision on Section 2 of 7 DE Admin Code 1142 titled "Control of NOx Emissions from Industrial Boilers and Process Heaters at PetroleumRefineries." My name is Frank Gao. I'm an environmental engineer in the planningbranch of the Air QualityManagement Section of DNREC, and I am the project coordinator for the proposed revision. First, I would like to submit to the Hearing Officer the following exhibits: Exhibit 1, copies of notice for publishing the proposed revision of 7 DE Admin Code 1142 Section 2 inDelaware Register of Regulations; and 2, proposed revisions of 7 DE Admin Code 1142 Section 2 as published inDelaware Register of Regulation on September 1st, 2009. HEARING OFFICER HAYNES: I will mark that as DNREC Exhibit 1. (DNREC Exhibit No. 1 was received in evidence.)

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ElectronicallysignedbylucindaReeder**(201~240~129~2951)** 302-655-0477 12f14d02'()f534d21·9802.lJ29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

wilcox MR. GAO: Exhibit 2, copies of affidavits from News Journal, SundayNews Journal, and the Delaware StateNews of publication of legal notice announcing thepublic hearing tobe held on September 30th, 2009, for the proposed revision of 7 DE Admin Code 1142 Section 2 and legal notice, notice of public hearing. HEARING OFFICER HAYNES: I will mark that as DNREC Exhibit 2 and admitted. (DNREC Exhibit No. 2 was received in evidence.) MR. GAO: Exhibit 3, copy of legal notice mailed to the Department's mailing list notifying the addressees of thepublic hearing to be held on September 30th, 2009, for the proposed revision of 7 DE Admin Code 1142 Section 2. HEARING OFFICER HAYNES: Okay. We'll mark that as DNREC Exhibit 3. And I would request also to be provided a list of the people that it was mailed to so we canhave that in the record. (DNREC Exhibit No. 3 was received ln evidence.)

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ElectronicallysignedbyLucindaReeder(201-240-129-2951) 302-655-0477 12f14d02.Qf53-4d21-9802-b29d06cb54e4Page 5 1 MR. GAO: Sure. We will 2 HEARING OFFICER HAYNES: We'll add 3 that as a supplement to it. It doesn't have to 4 be identified as anything separate. 5 MR. GAO: Sure, we will do that. 6 Exhibit 4, copy of settlement 7 agreement regarding the Premcor Refining Group 8 Inc. appeal of Regulation No. 1142, as signedby 9 DNREC Secretaryand Premcor General Manager. 10 HEARING OFFICER HAYNES: Mark that as 11 DNREC Exhibit 4. 12 (DNREC Exhibit No. 4 was received in 13 evidence.) 14 MR. GAO: Now, I would like to give a 15 brief background overview of the proposed 16 revision. InNovember 2005, the Department 17 started a rule-making process to develop a new 18 section, that is, Section 2, of 7 DE Admin Code 19 1142, to control NOx emissions from large 20 industrial boilers and process heaters in 21 petroleumrefineries inDelaware because those 22 boilers and heaters were determined as 23 significant NOx emission sources contributing to 24 the Delaware's ozone nonattainment problem. In

Wilcox Fetzer, Ltd. Registered Professional Reporters ElectronicallysignedbyLucindaReeder(201·240·129-2951) 302-655-0477 12f14d02'()f53-4d21·9802-b29d06cb54e4Page 6 1 February 2006, the Department's Air Quality 2 Management Section staff and representatives from 3 eight stakeholders formed a review committee for 4 rule development. FromMarch 2006 to october 5 2006, the review committee held five committee 6 meetings and one public workshop. As a result of 7 the committee's work, and after a public hearing 8 onMarch 6th, 2007, Section 2 of 7 DE Admin Code 9 1142 was created and finalized with an effective 10 date of July 11, 2007. The rule sets up NOx 11 emission limits and compliance schedules for 12 sevenunits at Delaware CityRefinery, owned and 13 operatedby Premcor Refining Group Inc. The new 14 section also places two other units at Delaware 15 CityRefinery in a reserved status. 16 On July 20, 2007, Premcor Refining 17 Group Inc. filed with the Environmental Appeal 18 Board an appeal of Section 2 of 7 DE Admin Code 19 1142. InAugust 2009, Premcor and the Department 20 reached a settlement agreement to resolve 21 Premcor's appeal of July 2007. The proposed 22 revision being addressed today is a result of 23 this settlement agreement. 24 The proposed revision revises NOx

Wilcox Fetzer, Ltd. Registered Professional Reporters ElectronicallysignedbyLucindaReeder(201-240-129-2951) 302-655-0477 12f14d02-Df53-4d21-9802-b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Wilcox emission limits for three units among the nine units being coveredby Section 2 of 7 DE Admin Code 1142. Specifically, for the Boiler 1, its emission limit is revised from 0.04 pounds per million BTU to .015 pounds permillionBTU and for Boilers 3 and 4, the requirement of cease-operation is revised to a NOx emission limit of .015 pounds permillion BTU. The Department believes that the revised limits are adequate for achieving necessary and timelyNOx emission reductions that will aidDelaware attainment of the ozone standards. The proposedrevision has been available for public review and comments in the Department's Air Quality Section offices inDover andNew Castle since August 23rd, 2009. The proposed revision was alsopublished inDelaware Register of Regulations on September 1st, 2009 for public review. A legal notice regarding the availability and pUblication of the proposed revision was announced in the Sunday News Journal and the Delaware StateNews on August 23, 2009. This legal notice was also distributed among relevant stakeholders on the Department mailing

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ElectronicallysignedbyLucindaReeder(201·240·129·2951) 302-655-0477 12f14d02.()f53-4d21·9802·b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Wilcox list. Finally, we want topoint out that Delaware's Regulatory FlexibilityAct shall not applyhereto since this proposed regulation does not impact any individuals or small businesses. That concludes the Department's statement. We now are back to the Hearing Officer. HEARING OFFICER HAYNES: Okay. Thank you. Very comprehensive review of this. This is the time to hear from the public. And the representatives are here from Premcor, I believe, who have some either oral comments or written comments you'd like to present. MR. WOJEWODZKI: We have some written comments we would like to present. If we may, we need to confirmation either get a stamp or something on this we can take back. We have this court reporter that will mark this as -- do you go by Valero or Premcor? I know it's Premcor Refining Group. MR. WOJEWODZKI: Premcor is a -- HEARING OFFICER HAYNES: Local name? MR. WOJEWODZKI: That's our name,

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ElectronicallysignedbylucindaReeder(201·240·129-2951) 302-655-0477 12f14d02-(lf53-4d21·9802-b29d06cb54e4Page 9 1 yes. 2 HEARING OFFICER HAYNES: Okay. Mark 3 this as Premcor 4 MR. WOJEWODZKI: This is the 5 submittal. This is one I would like to get back. 6 HEARING OFFICER HAYNES: You have 7 writing on it then. 8 MR. WOJEWODZKI: That's okay. 9 HEARING OFFICER HAYNES: You don't 10 trust us? 11 MR. WOJEWODZKI: I do. 12 HEARING OFFICER HAYNES: There are 

# I I 13 trust issues here. You are dealing with the 14 Department too much. Wouldyou like me to write 15 "received." 16 MR. WOJEWODZKI: "Received 9/30/09." 17 HEARING OFFICER HAYNES: We have it 18 down in the transcript and everything. 19 MR. WOJEWODZKI: Thank youverymuch. 20 HEARING OFFICER HAYNES: We'll mark 21 this as Premcor Exhibit 1, and I'd ask that you 22 sendme the

-- there are several copies of it. 23 You canhave some more. 24 Well, do you have them?

wilcox Fetzer, Ltd. Registered Professional Reporters ElectronicallysignedbyLucindaReeder(201-240-129-2951) 302-655-0477 12f14d02-Of53-4d21·9802·b29d06cb54941 2 3 4 5 6 7 8 9 

### 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Wilcox 

### I just need one. Couldyou sendme the electronic version, too? MR. WOJEWODZKI: Yes, we can. We've sent it to someone. Forgive me for not remembering the distribution. (Premcor Exhibit No. 1 

### was received In evidence.) HEARING OFFICER HAYNES: If somebody In the Department alreadyhas it, they'll send it to me. Very fine. Nothing else? I did get a heads-up that this was coming. I have a question for you. It seemed like because I think I 

### was a Hearing Officer when this regulationwas done the first time, right. That was a distant memory. I try to brainwashmyself out of these things, but. What happened that's causing you to change what apparentlywas an agreement? MR. WOJEWODZKI: I'm on the record? HEARING OFFICER HAYNES: You are on the record. You don't have to answer. You are not Mr. Covert. Why don't you identifyyourself. MR. WOJEWODZKI: My name is Robert Wojewodzki. I'm the environmental manager at the

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ElectronicallysignedbyLucindaReeder(201·240·129·2951) 302-655-0477 12f14d02-()f53-4d21·9802·b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Wilcox Delaware CityRefinery. And you mayhave seen in the News Journal and otherpublications that the refinery is undergoing a significant change due to economic conditions, and, as the letter states, and I think it's hopefully self-explanatory, that there are some certain changes that have beenmade in the refinery that compel us to submit some written comments for you to consider.HEARING OFFICER HAYNES: Do the Department representatives have any comments, have questions? I am not as familiar with the engineering of what's involved in all this. MR. AMIRIKIAN: We haven't had a chance to review the comments yet to understand exactly what's beingproposed. HEARING OFFICER HAYNES: Why don't you introduce yourself? MR. RANGAN: I'mRavi Rangan, engineer with the Air QualityManagement Section. MR. STELTZER: Bruce Steltzer, engineer, Environmental Engineering and Compliance. HEARING OFFICER HAYNES: Anything

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ElectronicallysignedbyLucindaReeder(201-240-129-2951) 302-655-0477 12f14d02.Qf534d21-9802·b29d06cb54e4Page 12 1 else for the record? We'll, is there any time 2 pressure for a decision on this? 3 MR. AMIRIKIAN: I believe the consent 4 agreement has a date in there that the 5 Secretary's committed to that. 6 MR. RANGAN: I believe October 14th. 7 I believe the agreement has October 14th as a 8 date, too. 9 MR. GAO: August 1st. Ravi, you mean 10 the settlement agreement? 11 MR. RANGAN: Yes. 12 MR. GAU: August the 14th. 13 MR. RANGAN: It's paragraph 1 of the 14 agreement. 15 HEARING OFFICER HAYNES: Paragraph 1. 16 No, the date to act on the proposed regulation. 17 MR. RANGAN: That's right. 18 HEARING OFFICER HAYNES: Well, that's 19 not going to happen. What is it? 20 I just got your written comments, and 21 I didn't see any specific language that you would 22 like changed in the proposed regulation. I am 23 just saying that to you. Is there specific 24 language? Obviously, the settlement agreement

Wilcox Fetzer, Ltd. Registered Professional Reporters ElectronicallysignedbyLucindaReeder(201·240·129·2951) 302-655-0477 12f14d02-of53-4d21·9802·b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Wilcox wants an order by October 14th, 2009. MR. WOJEWODZKI: If I may read you to a sentence or two? HEARING OFFICER HAYNES: Yes. MR. WOJEWODZKI: The second paragraph, first page. The sentence beginning with "To the extent these other sources are viable options for obtainingNOx emissions, Premcor respectfully requests that the Department consider a proposedNOx emission limit for Boilers 1, 2, 3, 4 of 0.04 pounds permillion BTUs." HEARING OFFICER HAYNES: So you would be looking onpage 3 of the settlement agreement under subparagraph Bwhere

-- that's what you would seek to have changed? MR. WOJEWODZKI: As well as the follow-up statement that says, "We also request 'that considerationbe given to an adjusted

compliance schedule for achieving the 0.04 pounds per million BTU limit with Premcor providing additional reductions from otherNOx sources at DCR," which is Delaware CityRefinery. HEARING OFFICER HAYNES: Where is

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ElectronicallysIgnedbylucindaReeder(201-240-129-2951) 302-655-0477 12f14d02.{)f534d21·9802·b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

wilcox that language in the proposed regulation? MR. WOJEWODZKI: I'm sorry. It continues from the first sentence to the second page, top of the page. HEARING OFFICER HAYNES: Where is that language on the proposedregulation on the compliance schedule? It is not subject to the proposed regulation change, is it? That's in the. MR. GODLEWSKI: There are dates in the proposed regulation as to when the limit becomes effective, whichwouldbe, for Boilers 3 and 4, May 1st, 2011, and I believe for Boiler 1, it's December 31st, 2008. HEARING OFFICER HAYNES: Is that in the proposed regulation or in the current regulation? MR. AMIRIKIAN: It's in the current regulation. HEARING OFFICER HAYNES: It's not subject to amendment. MR. AMIRIKIAN: And there's no dates that are beingproposed to be changed. HEARING OFFICER HAYNES: So that's

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ElectronicallysignedbyLucindaReeder(201-240-129-2951) 302-655-0477 12f14d02.Qf534d21·9802·b29d06cb54e41 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

wilcox not even subject to this proposedregulation. You understand that. That would have to be done in a whole separate proceeding. The only thing that's really subject to this proceeding, if I read this agreement which is was signed inAugust of '09, is the proposed changes to Section 2.3, and then 2.3.5 and then Section 2.3.3. Is that all the changes? MR. RANGAN: That's correct. HEARING OFFICER HAYNES: Thank you. That helps me understand this. And with that, I will adjourn the record. I will keep the record open for possible staff report toprovide me the technical assistance as needed to prepare my report of recommendations. To the extent that we have any need to have further hearing or further dialogue, I will state on the record that I will only deal with the persons that are in attendance, which will be limited to Premcor so we don't have to provide anypublic notice to the world. I think that is something I can do. All right. Thank you. we are now
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Wilcox adjourned. (Premcor (Hearing adjourned at 6:20 p.m.l

NO. 1

2

3

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NO.

1 I N D E X DNREC EXHIBITS

Notice of publication in Delaware Register and proposed regulation revision Copies of affidavits of publication for News Journal, SundayNews Journal and Delaware State News Copy of legal notice mailed to Department's mailing list Copy of settlement agreement PREMCOR EXHIBIT

9/30/09 letter to F. Gao from P. Covert, Valero

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