1 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020, 4621, 46 22, and 4624 SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL D ISTRICT

FINAL STAFF REPORT

Revised Proposed Amendments to Rule 2020 (Exemption s)

Revised Proposed Amendments to Rule 4621 (Gasoline Transfer into Stationary

Storage Containers, Delivery Vessels, and Bulk Plan ts)

Revised Proposed Amendments to Rule 4622 (Gasoline Transfer into Motor

Vehicle Fuel Tanks)

Revised Proposed Amendments to Rule 4624 (Transfer of Organic Liquid)

January 10, 2008

Prepared by: Sandra Lowe-Leseth, Air Quality Engin eer Laura Weber, Air Quality Specialist Peter Biscay, Air Quality Specialist Manuel Salinas, Air Quality Engineer Leonard Scandura, Supervising Air Quality Engineer

Reviewed by: Jim Swaney, Permit Services Manager George Heinen, Supervising Air Quality Engineer Morgan Lambert, Supervising Air Quality Inspector Joven R. Nazareno, Senior Air Quality Engineer Matthew O’Donnell, Air Quality Engineer Ben Ellenberger, Air Quality Engineer

I. SUMMARY

A. Reasons for Rule Development and Implementation

In the San Joaquin Valley Air Basin (SJVAB), monito red levels of ozone exceed National Ambient Air Quality Standards (NAAQS), whi ch are set at levels that protect public health and welfare. Consequently, the U.S. Environmental Protection Agency (EPA) has classified the SJVAB’s air quality as ser ious for its nonattainment designation for the federal eight-hour ozone NAAQS. Under the now revoked federal one-hour ozone standard, the SJVAB was classified as extreme nonattainment.

The federal Clean Air Act (CAA) requires air distri cts in nonattainment areas to prepare plans that are designed to achieve and maintain the NAAQS by the earliest practicable date, and no later than attainment deadlines given in the CAA. The San Joaquin Valley Unified Air Pollution Control District (District) a dopted the Extreme Ozone AttainmentSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

2 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 Demonstration Plan

( EOADP

) on October 8, 2004. The EOADP calls for a reduction in volatile organic compound (VOC) emissions by 2010 b y amending Rules 4621 (Gasoline Transfer into Stationary Storage Containe rs, Delivery Vessels, and Bulk Plants) and 4624 (Organic Liquid Loading) to furthe r reduce VOC emissions by introducing more stringent limits.

Control Measure U (New Rule for Aviation Fuel Trans fer) in the District’s EOADP originally was scheduled as a separate project to r educe VOC emissions created during aircraft refueling operations. Aircraft refueling operations include filling aviation fuel bulk storage tanks from primary fuel delivery trucks as well as transferring fuel from the bulk storage tanks into fuel delivery trucks, which are then used to fill an aircraft’s on-board

fuel tanks. Control Measure U would affect bulk av iation fuel storage operations, including those at military, civilian, and private airports and operators of air fleet services. Tanks at these bulk storage facilities t ypically hold either aviation gasoline or a variety of kerosene-based jet fuels. Forty-three airports in the SJVAB sell one or both types of aviation fuel to airlines. After further research, District staff determined that Phase II vapor recovery systems are not certified b y ARB for aircraft refueling operations, since aircraft fill pipes are not stand ardized as they are on motor vehicles. The District staff has always considered aviation g asoline included in the definition of gasoline. Affected sources are currently under per mit and required to be equipped with Phase I vapor recovery systems. Because of these f acts, aviation fuel is addressed as part of the current project to amend Rule 4621 (Gas oline Transfer into Stationary Storage Containers, Delivery Vessels, and Bulk Plan ts).

Although the EPA has revoked the federal one-hour o zone NAAQS the VOC emission

reduction commitment for amendments to Rules 4621 a nd 4624 must still be met. EPA’s final Phase 1 rule implementing the eight-hou r ozone NAAQS (69 FR 23858 and

70 FR 30592) identifies a number of federal CAA requirem ents that applied to an area by virtue of its one-hour ozone nonattainment class ification and that continue to apply after revocation of the one-hour ozone NAAQS [40 CF R 51.900(f)]. Because the SJVAB was classified as extreme nonattainment, and because an attainment demonstration (as defined by 40 CFR 51.905) is one of the requirements, the EOADP becomes one of the requirements that still apply to the SJVAB by virtue of its former

classification under the now-revoked one-hour ozone NAAQS. The EOADP uses the

VOC emissions reductions from the Rule 4621 and Rul e 4624 amendments to project attainment. Thus, the District must proceed with t he Rule 4621 and Rule 4624 emission reductions even though the one-hour ozone standard was revoked. In addition to the EOADP commitment, the District’s 2007 Ozone Plan in cluded commitments for Control Measures S-PET-1, S-PET-2, and S-PET-3 that call fo r reduction in VOC emissions from Rules 621, 4622, and 4624.

B. Rule Development Process

As part of the rule development process, District s taff conducted a public scoping meeting in September of 2006. At the scoping meeti ng, District staff presented theSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

3 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 objectives of the proposed rulemaking project, and solicited comments and suggestions, which were then used to develop the draft amendment s to the rule and staff report. The first public workshop was held on December 19, 2006 . A second public workshop was held on April 4, 2007. District staff invited affe cted source operators, consultants, vendors and manufacturers of control technologies, and trade associations to comment on the technological feasibility and compliance cos t information that would be useful in developing changes to the rules. A third workshop as held on July 23 and July 24, 2007 to discuss technical issues before proposed amendme nts would be brought to a public hearing before the District’s Governing Board. In addition to the public workshops, District staff also conducted a technical meeting i n October 2007 to further discuss stakeholders’ concerns and provide additional oppor tunity for comments.

Pursuant to state law, District staff are required to perform a socioeconomic impact analysis prior to the adoption, amendment, or repea l of a rule that has significant air quality benefits or that will strengthen emission l imitations. As part of the Districts socioeconomic analysis process, District staff soug ht representatives from interested groups to participate as members of a Socioeconomic Focus Group on April 5, 2007. The Focus Group assisted District staff in determin ing the appropriate method for gathering information on regulatory compliance cost s and business impacts resulting from compliance with the rule. The results of the socioeconomic analysis were compiled into a report that has been presented alon g with the refined version of the proposed rule to the public and interested parties during the workshop on July 23 and July 24, 2007. The date for the public hearing to consider adoption of the proposed rule amendments is December 20, 2007.

II. CURRENT REGULATIONS

The purpose of Rules 4621, 4622, and 4624 is to lim it VOC emissions during storage and transfer of gasoline and other organic liquids. The purpose of Rule 2020 is to clarify which operations are exempt from permitting requirements. Current rule specifics are available online at: http://valleyair.org/rules /1ruleslist.htm.

A. Rule 4621

Rule 4621 requires aboveground and underground gaso line storage containers be equipped with a California Air Resource Board (ARB) certified Phase I vapor recovery system, a permanent submerged fill pipe, and pressu re-vacuum relief valve with specified operational settings. Bulk plants and lo ading racks are required to be maintained free of leaks and inspected annually.

B. Rule 4622

Rule 4622 requires that tanks subject to Rule 4621 also be equipped with an ARBcertified Phase II Vapor Recovery system subject to periodic maintenance inspectionsSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

4 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 based on gasoline throughput, maintenance of an ope rations and maintenance manual (O&M manual), and prompt replacement of damaged Pha se II components.

C. Rule 4624

Rule 4624 limits Class 1 facilities’ emissions to 0 .08 pounds VOC per 1,000 gallons organic liquid loaded. Class 1 facilities are faci lities that load 20,000 gallons per day or more of organic liquids. The rule also requires a 95% vapor capture for Class 2 facilities that load at least 4,000 gallons per day of organic liquid but less than 20,000 gallons per day. The rule specifies pressure settings for deli very tank loading, as well.

D. Rule 2020

Rule 2020 lists facilities and operations that are exempt from permitting. Among other things, the rule currently exempts vehicles that ar e used for the delivery of VOC and unloading racks, as well as loading racks that meet specific criteria.

III. BACKGROUND

A. Rule 4621 and Rule 4622

1. Emission Control Techniques

There are two main types of vapor recovery systems utilized to control vapor losses from the transfer and storage of gasoline. The Pha se I systems control vapor losses during the transfer of gasoline from delivery vesse ls to storage tanks while Phase II systems control vapor losses from the transfer of g asoline into motor vehicle fuel tanks.

VOC emissions at gasoline dispensing facilities can occur while the dispenser is used to pump gasoline into a vehicle fuel tank, while the d ispenser is not in use, and during the filling of the aboveground or underground storage t ank(s). Standing losses may also occur, which is vapor loss or VOC emissions, result ing from pressure change occurring within the storage tank due to atmospheric temperat ure fluctuations and the effect that has on gasoline temperatures.

When the dispenser is being used, the gasoline that is introduced into the vehicle tank displaces the gasoline vapor that is already in the tank. Similarly, when the storage tank is being filled the gasoline introduced displa ces the vapor in the storage tank. If the vapor recovery system does not adequately colle ct the displaced vapor, the vapor can be emitted into the atmosphere.

Motor vehicles are now manufactured with Onboard Re fueling Vapor Recovery (ORVR) systems, which are intended to capture vapor being displaced from the vehicle tanks during vehicle refueling. The system transfers vap or into an onboard carbon canisterSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

5 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 until it can be released and burned as fuel. Some Phase II systems that were designed to detect gasoline vapor in the vehicle fuel tank p roved incompatible with ORVR and incompatibility excess emissions resulted. ARB Cer tification Procedure for vapor recovery systems at gasoline dispensing facilities (CP-201) required that all Phase II systems be compatible with ORVR as of March 1, 2006

.

When the dispenser is not being used, gasoline vapo r can be emitted through holes or tears in the vapor return path, through the nozzle or vapor-processing unit if these components do not work effectively, or through the pressure vacuum relief valve when tank pressure rises above three inches water column . An operator can minimize VOC emissions from gasoline dispensing facilities or bu lk plants by using ARB certified Phase I and ARB certified Phase II vapor recovery s ystems and maintaining the systems and all of their components in good repair. An operator can demonstrate that these systems are in good repair by passing perform ance tests, which determine the system’s condition and identify any malfunctioning components of the system.

2. Certifications

In the currently enforced version of Rule 4622, the District requires that testers of gasoline vapor recovery systems attend a District o rientation class. Similar requirements exist in many local air districts in C alifornia. Historically, the District has had problems with individuals or companies performi ng the required maintenance tests on the different vapor recovery systems available t o gasoline dispensing facilities. Problems have included improper execution of tests, falsifying test results, and either

failure to submit results to the district or submit ted test results which are difficult to

assess. Air districts have also had concerns about the installation of gasoline vapor recovery system and ensuring that the systems are p roperly installed and functioning correctly from inception. In both of these cases, no training has been required by districts and manufacturers, despite the complexity of gasoline vapor recovery systems and the potential for leaks or the system being ins talled improperly.

With the creation of Enhanced Vapor Recovery (EVR), and the increased complexity of those systems, manufacturers have begun to require that installers of their systems be certified by the manufacturing company to perform t he act of installation. Additionally, air districts throughout California have worked wit h the ARB to resolve the issues related to installer, tester, and repair personnel work practices. The solution that has been presented is the formation of a committee to w ork with the International Code Council (ICC) to develop certification exams for th e different persons working with gasoline vapor recovery systems. The ICC, a member ship association dedicated to building safety and fire prevention, develops the c odes used to construct residential and commercial buildings, including homes and schools. Most U.S. cities, counties and states that adopt codes choose the International Co des developed by the International Code Council. ICC has worked with the ARB, the Cal ifornia Air Pollution Control Officer Association, and industry volunteers to formulate c ertifications for people performing installations and repairs. The certification exam for installation of underground gasolineSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

6 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 vapor recovery systems is currently available. The ICC exam is computer-based, no more than 60 questions and one and half hours long, open book, $75, and need to be renewed every two years on or before the expiration date to keep the certification

current.

In addition to the Districts’ involvement in the IC C certifications, the District has recently adopted Rule 1177 (Gasoline Dispensing Facility Tes ter Certification) for a gasoline dispensing facility tester certification and traini ng program to ensure that the required performance tests are properly conducted. This prog ram will provide testers with valuable training and operators with a qualified an d accountable pool of testers. Ultimately, this program is expected to result in h igher compliance rates with less direct oversight by District staff. This new certificatio n program, designed by the District, was adopted as replacement to the previously required D istrict orientation class.

3. Vapor Recovery for Aboveground Storage Tanks

The ARB has been working on a certification procedu re to address vapor recovery for aboveground storage tanks. Until this time, facili ties with aboveground storage tanks were required to install a Phase I and Phase II vap or recovery system that was certified under ARB’s certification procedure for specific fa cilities (CP-205). CP-205 required both Phase I and Phase II to achieve 90 percent eff iciency but did not control standing losses from vapor growth that resulted from daily t emperature fluctuations. In 2001, ARB amended CP-201 to require EVR, which requires t hat certified Phase I vapor recovery systems achieve 98 percent volumetric effi ciency and Phase II vapor recovery systems achieve 95 percent efficiency. In doing th is, it became a concern that operators would chose to install aboveground storag e containers because of the cost to install an EVR system.

During the summer of 2005, ARB staff conducted a fi eld study on various sizes of aboveground storage containers in Fresno County, in cooperation with industry stakeholders. The purpose of the field study was to evaluate emission reductions from aboveground storage containers when retrofitted wit h various control technologies during periods of no fuel transfers. The study conc luded that standing loss emissions are significant and that controls are currently ava ilable which would reduce these

losses.

After conducting cost effectiveness and emission re duction analyses, ARB staff

determined the best course was to offer three diffe rent ways that manufacturers of vapor recovery systems could have their systems cer tified. Manufacturers of Phase I and Phase II vapor recovery systems for aboveground storage containers would be required to design systems with EVR so that these s ystems are held to the same stringency standards as underground storage contain er vapor recovery systems. The three different types of certifications that will b e issued for aboveground storage tanks are: 1) standing loss controls; 2) standing loss co ntrols and Phase I; 3) standing loss controls, Phase I, and Phase II. Standing loss con trols for existing facilities will need toSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

7 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 achieve an efficiency of 60 percent while standing loss controls for new facilities will be required to function at 90 percent efficiency.

Under the ARB adoption of CP-206 standing loss cont rol, Phase I EVR, and Phase II EVR requirements would become effective January 1, 2009, and all existing tanks would have until January 1, 2013 to be in complianc e. New tanks installed or existing tanks undergoing major modifications after January 1, 2009 would be required to meet the adopted performance standards for standing loss controls, Phase I EVR, and Phase

II EVR.

B. Rule 4624

Rule 4624 was last amended in December of 1992. Si nce the last amendments to this rule, many changes have taken place in other Distri ct rules. Currently, there is some stakeholder confusion over the applicability of Rul e 4624 in light of how District Rules 4455, 4409, 4623, and 2020 are enforced. Rule 4624 currently applies to facilities that are loading liquids with a true vapor pressure (TVP ) of 1.5 psia or greater. However,

this has become an issue when taken with the fact t hat Rule 2020 (Exemptions) exempts facilities that have crude oil with 0.8762 specific gravity or higher (30oAPI or lower). According to stakeholders there may be ins tances when both conditions can occur, that is, the liquid may have a TVP of 1.5 ps ia or greater and the specific gravity may be 30oAPI or lower. Facilities loading liquids that fall into this category have been required to comply with rule requirements but not t o obtain permits. It is the District’s policy that when this happens, and the rule is open for changes, that language be added to modify the rules to require operators to o btain a permit-to-operate for these operations. By requiring facilities to be permitte d, District staff can ensure that operators are complying with rule requirements.

1. Unloading Racks

Rule 4624 applies to loading of organic liquid, Rul e 4623 applies to organic liquid storage, and Rules 4455 and 4409 apply to component s at specific facility types. Within the District, no rule applies specifically to unloa ding racks and components used to unload organic liquids from the delivery vessels in to the stationary storage containers. Industry stakeholders have shared insight, through public commenting, on the rules by which they have been monitoring these components. District staff would make unloading racks a part of Rule 4624 to allow for cl arity to which rule equipment of this nature would fall. Although the vapor space of rai lcars and tank trucks is typically under vacuum while unloading liquids, there is potential for fugitive leaks, both liquid and vapor. Rule 4624 would require that unloading equi pment and components be included in leak detection inspections and held to the same standards as equipment and components used to load to railcars and tank trucks

.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

8 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 2. Closed Systems

The configuration of facilities to which Rule 4624 may apply can vary greatly. The emission limit to which facilities are required to adhere must be demonstrated by conducting an EPA approved test method that require s facilities testing to have a vent point. This becomes problematic for facilities tha t are designed with closed vapor control system with no ventilation or exhaust point

.

District compliance staff has noted that it is not possible for facilities with closed VOC control systems to perform the test method required by rule. Facilities with this configuration should not only achieve the emission limits that Rule 4624 calls for but should actually have 100 percent vapor control, so long as the system do not leak. It is for this reason that District staff would modify Ru le 4624 requirements to allow for compliance with Rule 4624 to be shown through passi ng leak inspections for facilities with closed VOC control systems.

IV. PROPOSED CHANGES TO RULES

The California Health and Safety Code (CH&SC) Secti on 40914(a)(2) states that ozone attainment plans should include All Feasible Contro l Measures (AFCMs). The ARB interprets “every feasible control measure to mean that, at a minimum, air districts must consider regulations that have been successfully im plemented elsewhere. Districts should also consider going beyond what has already been accomplished by evaluation of new technologies and innovative approaches that may offer potential emission reductions. Further, districts should consider not only technological factors, but also social, environmental, economic (e.g., cost effecti veness), and energy factors which prevail in a district, along with the resources rea listically available to a district to adopt, implement, and enforce the measures.”

In the context of rule development, District staff construes AFCM to mean that each rulemaking project seeks to obtain as much emission reduction from the rule’s source category as is expeditiously practicable, technolog ically feasible and economically reasonable, as determined by the District’s Governi ng Board. To this end, District staff compare the current emission limits or control tech nology against what limits or control technology has been promulgated in other districts, as well as reviewing the federal, state, and local Best Available Control Technology (BACT) clearinghouses for the most recent control technology available for the source category.

A. Proposed Amendments to Rule 2020 (Exemptions)

District staff is proposing several changes to Rule 2020 to support changes in Rules 4621, 4622, and 4624. Additionally, a revision rel ated to the definition of natural gas and liquefied petroleum gas is proposed.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

9 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 1. Section 3.0 (Definitions)

The definition of location would be added to this s ection to support the proposed changes to Section 6.7 (Transfer Equipment). This change would affect oil field operations most directly. Kern River oil field ope rators may have transfer operations scattered across several square miles. Currently, Permits-to-Operate (PTOs) for these widely-spaced operations treat loading racks at eac h site as if it were a separate facility. The proposed language would make this distinction e xplicit.

2. Sulfur Content of Natural Gas and LPG

Rule 2020 Section 6.1.1 exempts indirect heat trans fer units with a heat input rating 5 MMBtu/hr or less if they are fired exclusively on n atural gas, liquefied petroleum gas (LPG), or any combination thereof. LPG is a genera l term that includes propane, butane, and propane-butane blends. Current Rule 20 20 also requires that LPG have no more than 5% by weight hydrocarbons heavier than bu tane and sulfur content no more than 0.75 grains per 100 standard cubic feet (0.75 gr S/100 scf) of gas.

Stakeholders requested amendments to Rule 2020 beca use the actual sulfur content of LPG is typically higher than the current rule’s sul fur content limit. District staff reviewed

other California air districts’ rules to determine the sulfur content limit of LPG and natural gas for permit-exempt small gas-fired units . Unlike Rule 2020, other air districts

do not have a sulfur-content limits for LPG or for natural gas. Gas Processors Association (GPA) liquefied petroleum gas specifica tions for total sulfur content of LPG ranged from 123 parts per million by weight (ppmw) to 185 ppmw. Specifically, the total sulfur content specifications are as follows: (a) 1 85 ppmw for commercial propane; (b) 140 ppmw for commercial butane; and (c) 140 ppmw fo r commercial propane/butane mixtures. A survey of LPG distributors indicates o dorant (typically mercaptan) containing between 1 and 3 gr S/100 scf is added to LPG.

District staff is proposing to modify Rule 2020 Sec tion 6.1.1 to codify how the District has historically applied the exemption to small ind irect heat transfer units. District staff recommends the following requirements:

• For natural gas, the total sulfur content limit wo uld be changed from 0.75 grains per 100 scf to 1.0 grain per scf of gas. This chan ge is proposed as natural gas suppliers in the District can deliver gas with a su lfur content up to 1.0 gr/100 scf. The current limit of five (5) percent by volume hyd rocarbons heavier than butane would remain unchanged.

• For LPG, the total sulfur content limit would be n o more than 15 grains per 100 scf of gas and no more than two (2) percent by volu me hydrocarbons heavier

than butane.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

10 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 • The test methods for determination of sulfur conte nt and percent by volume hydrocarbons heavier than butane would be specified in the rule.

3. Section 6.6 (Mobile Storage Equipment)

In Section 6.6 (Mobile Storage Equipment), District staff would remove draft language added in the previous workshop and, therefore, mobi le storage equipment would remain exempt from permit. Mobile refuelers however, woul d be required to register under the District’s Permit-Exempt Equipment Registration rul e if they were subject to Rule 4622. The proposed registration requirement would be incl uded in Rule 4622.

4. Section 6.7 (Transfer Equipment)

The District would modify the exemptions in this se ction so that facilities subject to the proposed amendments to Rule 4624 (Transfer of Organ ic Liquid) need to obtain a permit-to-operate. In addition, language would res olve an inherent conflict between the

current versions of Rule 2020 and Rule 4624. Rule 2020 currently exempts individual racks that transfer 4,000 gallons per day or less. Current Rule 4624 applies to transfer at least 4,000 gallons per day for the total facili ty, which may have more than one transfer rack. District staff is proposing a revis ion of the exemption in Rule 2020. Under the proposed exemption, the limit would be 4,000 ga llons per day per location, not per individual rack. Appropriate test methods for true vapor pressure and API gravity would

also be added to this section.

5. Other Changes

Throughout Rule 2020, other District rules are ment ioned, however the title of the rule is

not included. District staff has added the rule ti tle wherever a District rule is cited in

Rule 2020 to make it consistent with other District rules.

B. Proposed Amendments to Rule 4621

Language would be adjusted for consistency througho ut the rule with the change of the

term “tank” to “container.”

1. Section 1.0 (Purpose) and Section 2.0 (Applicabi lity)

Section 1.0 (Purpose) will remain unchanged from cu rrent version of Rule 4621. In Section 2.0 (Applicability), the rule applicability would be revised slightly for clarification as to the container capacity to which this rule app lies. As currently written, containers with capacity of exactly 19,800 gallons are subject to both Rule 4621 and Rule 4623 (Storage of Organic Liquids). In order to avoid co nflict between the rules, Rule 4621 rule applicability would be modified to specify tha t the rule applies to containers less than 19,800 gallons. The change moves containers w ith capacity of exactly 19, 800 gallons squarely into Rule 4623.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

11 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 2. Section 3.0 (Definitions)

Section 3.0 (Definitions) would have twenty-five de finitions added. One of those additions is aviation gasoline. District staff has always considered aviation gasoline included in the definition of gasoline. However, a separate definition of aviation gasoline would be added to Rule 4621. This definit ion would echo the terminology used by ARB. The definition of gasoline would be modifi ed to make the difference clear.

The definition of “major modification” would be add ed to this section. The proposed definition is taken directly from ARB document D-20 0 “Definitions for Vapor Recovery

Procedures.” District staff believes that this def inition most accurately reflects the appropriate use of this term relative to Phase I va por control systems and gasoline storage containers.

The definition of leak would be revised. Within th e leak definition, the allowable vapor leak concentration would be a reading of no greater than 10,000 parts per million by volume (ppmv), with the exception that in the insta nce of a repair, replacement, or sampling of process fluid, emissions may exceed thi s limit. The proposed change would align the definition of leak with ARB’s for v apor leaks of vapor recovery systems. Leaks associated with delivery vessels would be tre ated the same way.

Other revisions to the definition section would inc lude the removal of gasoline bulk plant and loading facility definitions. These terms woul d be replaced with “bulk plant” and “loading rack”, which would more accurately describ e those units that are included in the rule requirements. The definition of “vapor ti ght” would be removed with the definition becoming part of the definition of leak. District staff would revise the definition of excess organic liquid drainage in order to decre ase the quantity of liquid deemed

excessive from 30 milliliters to 10 milliliters. T his change is for consistency with other District rules definitions of “excess organic liqui d drainage”. Additionally, District staff has defined mobile fueler to include it among vesse ls considered delivery vessels. This would require that operators of mobile fuelers comp ly with Rule 4621 delivery vessel requirements. Additional changes would be made to ease understanding of terms within Section 3.0 (Definitions), “tank” would be c hanged to “container” for consistency. Definitions would be renumbered as necessary.

3. Section 4.0 (Exemptions)

In Section 4.0 (Exemptions) language would be adjus ted due to the added definitions in Section 3.0 (Definitions) and an exemption would be provided for mobile fuelers used exclusively to fuel emergency motor vehicles while on location at an emergency.

The existing exemption for gasoline storage tanks o f 550 gallons or less used to exclusively fill implements of husbandry would be c hanged to allow those tanks being used primarily to fill implements of husbandry to b e exempt. This better aligns theSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

12 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 language with California Health and Code Section 41 950(e) and is consistent with current District practices. The definition of impl ements of husbandry would be removed from the exemption and added to 3.0 (Definitions) w here it would be more appropriately placed.

Furthermore, existing exemptions for facilities wit h gasoline storage containers in existence or installed prior to July of 1975 would have language added making the exemption contingent on there being no major modifi cations as defined in Section 3.0 (Definitions). The change aligns with the way Dist rict staff has interpreted this exemption.

4. Section 5.0 (Requirements)

Section 5.0 (Requirements) would undergo significan t reorganization to allow improved understanding of the rule requirements for the rang e of facilities subject to this rule, with sections renumbered as necessary. Currently in Rul e 4621, provisions related to aboveground storage containers, underground storage containers, and bulk plants are mixed together. Proposed changes would group the r equirements for each type of equipment separately. In Section 5.0, all referenc es to “tank”, wherever possible, would be changed to “container” for consistency. Languag e would also be adjusted to make requirements clearer due to added definitions in Se ction 3.0 (Definitions).

A requirement proposed for all facilities in Sectio n 5.2.4 would have all underground piping configurations and underground storage insta llations inspected by the APCO before backfilling. This provides an opportunity t o spot construction problems that could lead to certification test failures and require ret renching the piping. Furthermore, operators would need to telephone the District for a confirmation number no less than three days before backfill. Additionally, througho ut this section, District staff would include the requirement that all ARB-certified vapo r recovery systems are maintained in

accordance with their ARB Executive Orders and as r equired by the applicable manufacturer specifications.

District staff is proposing that the provisions for underground storage containers be in one section, in this case Section 5.3 of the propos ed rule. In addition to restating current requirements for underground storage contai ners, a new requirement is proposed that all ARB certified Phase I vapor recov ery systems achieve a minimum of 98 percent volumetric efficiency, which is the mini mum efficiency that ARB currently certifies Phase I vapor recovery systems. District staff would adjust the settings for vacuum and pressure for the pressure-vacuum relief valve requirement as well to reflect

the newest amendments to ARB’s Certification for Va por Recovery Systems at Gasoline Dispensing Facilities (CP-201). This section would also address underground storage of aviation gasoline. The most recent revision to CP-201 requirements specifically exempts aviation gasoline, so District staff is pro posing that the emissions be controlled by a Phase I system with a control efficiency of 95 percent. This control level wasSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

13 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 chosen to reflect the currently-certified aviation gasoline Phase I systems. Thus, current control levels for aviation gasoline storag e containers would remain in place.

As with the underground storage containers, abovegr ound storage container provisions would be grouped together. The requirements for ab oveground storage containers

would be revised to reflect recent work that ARB ha s accomplished to develop a certification procedure (CP-206) for the regulation of standing losses, Phase I vapor recovery, and Phase II vapor recovery for abovegrou nd storage containers. District staff would change the required settings for pressu re vacuum relief valves to match the provisions of CP-206. Other changes that are broug ht about by CP-206, such as requirements to upgrade to EVR and standing loss co ntrols, do not warrant any changes to rule language. Rule 4621 already requir es that aboveground storage containers be equipped with an ARB Certified Phase I vapor recovery system. ARB will only certify Phase I vapor recovery systems to be e quipped with EVR and standing loss controls and expects, at a minimum, two certified s ystems to be commercially available by 2009. As of January 1, 2009, new facilities wou ld be required to utilize a system that ARB has certified as equipped with Phase I EVR and standing loss controls. Existing facilities would have four additional years, until January 1, 2013, to upgrade or retrofit their systems. For more information about ARB’s CP -206 please see Section IV.A.3 of this document or visit http://www.arb.ca.gov/regact /2007/ast07/ast07.htm. Section 5.4 would also address the changes to the control of av iation gasoline by freezing the

control levels at current levels.

Requirements for periodic maintenance inspections o f Phase I components that have been included in Rule 4622 (Gasoline Transfer into Motor Vehicle Fuel Tanks) would be moved to Rule 4621 where they more appropriately be long. Inspections would be based on the previous year’s highest average monthl y throughput and would affect all facilities with Phase I vapor recovery systems.

Bulk plant and loading rack requirements would be r evised for clarity. The requirement for bulk plants to have a vapor recovery system wou ld be revised to state that the vapor recovery system is to control emissions from the lo ading operation. Since gasoline transfers would have ARB certified vapor control eq uipment available while aviation gasoline would not, rule language would reflect thi s difference. District staff would also move the requirement that loading racks not create back pressure for delivery vessels, from the sections pertaining to delivery vessels. In addition to the renumbering of sections and language adjustments in bulk plant req uirements, District staff would include an additional requirement that gasoline mus t be in a closed, non-leaking container to prevent the escape of gasoline vapors into the atmosphere.

Proposed amendments would include a change in the l eak testing frequency. The proposed version would change leak-testing frequenc y to semi-annual and leak tests

would need to be conducted in accordance with EPA M ethod 21 using only a portable hydrocarbon detection instrument. Current requirem ents are for annual leak testing, and as an alternate to using a portable hydrocarbon detection instrument, the soapSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

14 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 bubble method of detecting leaks has been allowed. As is currently required by Rule 4621, if a leak were found during an inspection, th e testing frequency would be changed to quarterly.

Several additional requirements would be added for repair and labeling of leaking components at bulk plants. The current rule requir es bulk plant operators to repair leaks within seven business days; District staff wo uld modify this requirement allowing bulk plant operators to remove components from VOC service when it is not possible to repair them within the allotted time. New language would require that all leaks be identified by a waterproof tag, displaying the date and time of inspection, date and time of leak detection, and for gas leaks, the leak conc entration. District staff believes this requirement more appropriately belongs among other bulk plant and loading rack requirements.

Delivery vessel requirements would be modified to r equire delivery vessels be equipped with an ARB certified vapor recovery systems for ca rgo tanks in addition to the valid State of California decals that are currently requi red. ARB requires this of cargo tanks that are used on highways, however, they do not req uire it for vessels used off-highway. District staff would add the requirement that all d elivery vessels, on-highway and offhighway, be equipped with ARB certified systems and that those systems be maintained in accordance with the applicable ARB Executive Ord er.

Until recently all hatches on cargo tanks carrying aviation fuel were required to be certified by ARB as leak-free. ARB will no longer certify these hatches. However, ARB will still perform the necessary tests if required by a district rule. This means that, although ARB doesn’t certify leak-free cargo tanks for aviation gasoline, ARB will continue to test hatches so that operators can comp ly with the rule.

Stakeholders also noted that there are other agenci es with jurisdiction over aircraft refuelers. Since the inspectors for these agencies may want to look into the cargo tank at any point in the loading or unloading process, D istrict staff is proposing an alternative for the regulated entity by allowing an exception f or other regulating bodies.

5. Section 6.0 (Administrative Requirements)

In Section 6.0 (Administrative Requirements), sever al provisions would be added, while others would be removed or simplified, and sections would be renumbered as needed.

Effective on rule adoption date, all bulk plants wo uld maintain daily records of gasoline throughput. All records required to demonstrate co mpliance would be retained for five years and made available on site during normal busi ness hours to the APCO, ARB, or, and submitted to these agencies upon request.

Section 6.2 outlines the performance test requireme nts along with the schedule of

notification. New to the rule are certifications f or installation and maintenanceSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

15 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 contractors in Section 6.3. District staff is prop osing that installation and maintenance contractors be certified for Vapor Recovery System Installation and Repair (Certification VI). International Code Council (ICC) offers this certification as part of its Aboveground/Underground Storage Tank series of cert ification tests. As an alternative certifying each worker individually, Rule 4621 woul d allow the workers to perform the installation or maintenance if they work under the direct and personal supervision of an

individual who has the certification and the certif ied individual is present at the work site. Also in Section 6.3 are requirements for individual s who wish to conduct vapor recovery systems testing or repair. The District has recent ly adopted a rule to certify these testers, Rule 1177 (Gasoline Dispensing Facility Te ster Certification).

The applicable test methods would be revised to ref lect the most current versions of test methods. The current rule allows the soap bubble m ethod for leak detection. This practice would be discontinued after March 1, 2008. In its place, the use of a portable hydrocarbon detection instrument in accordance with EPA Method 21 would be required for leak inspections. Also in this section, approp riate ARB test procedures would be cited. Operators would be allowed to use alternati ve test methods if approved by the APCO, ARB, and EPA.

6. Section 7.0 (Compliance Schedule)

The compliance schedule in Section 7.0 (Compliance Schedule) would be removed and replaced with a schedule specifying compliance with all sections of the rule upon rule adoption unless otherwise specified in the rule.

C. Proposed Amendments to Rule 4622

1. Section 1.0 (Purpose) and Section 2.0 (Applicabi lity)

Sections 1.0 (Purpose) will remain unchanged from c urrent version of Rule 4622. Section 2.0 (Applicability) would be expanded to in clude mobile fuelers and the term “facility” would be changed to “operation” for clar ity of rule applicability.

2. Section 3.0 (Definitions)

Section 3.0 (Definitions) would add 17 definitions for clarification of terms used within the requirements of Rule 4622. The definitions for Balance System and certified Phase II vapor recovery system would be removed since no references to these terms exists in the proposed rule language. Additionally, District staff would modify several definitions for clarification. The term “gasoline storage and dispensing facility” would be changed to “gasoline storage and dispensing operation”, thi s is because many locations where gasoline transfer occurs are not considered gasolin e storage and dispensing facilities. The definition of existing dispensing facility woul d be modified with a change from the word “facility” to “operation” to make the District staff’s intent clearer. The definition of leak would be reformulated for consistency with Rul e 4621 and the definition of motorSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

16 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 vehicle would be changed to align it with the motor vehicle code definition of motor vehicle. “Major defect” would be modified to clari fy the location of the major defect list

and note that ARB maintains this list. Additional changes would be made to ease understanding of terms within Section 3.0 (Definiti ons) and definitions would be renumbered as necessary.

Stakeholders have requested that the definition of “major modification” be revised to

remove the words “end user.” District staff review ed the ARB document D-200 (Definitions for Vapor Recovery Procedures). The c urrent definition mirrors ARB’s definition and, therefore, no change to the definit ion is proposed.

3. Section 4.0 (Exemptions)

In Section 4.0 (Exemptions), an exemption would be moved from Section 5.0 (Requirements) that allows for facilities not subje ct to Rule 4621 to be exempt from the requirements of this rule. This change would bette r highlight that allowance.

Two exemptions would be added to the rule. The fir st would allow operators of facilities with vehicle fleets having 100 percent of their veh icles equipped with ORVR to no longer maintain or not install Phase II vapor recov ery. ORVR systems serve a similar function as Phase II vapor recovery, so the new exe mption does not relax current rule requirements and does not increase emissions. Plea se see Section IV.A.1 for more information about ORVR. This added exemption is du e to an EPA memorandum dated December 12, 2006. Although the memorandum speaks specifically to rental car fleets, other types of operations with car fleets would hav e similar operations and emission

control would be similar.

The second exemption would be added for mobile fuel ers that serve aircraft. Section 4.4 would specifically exempt refueling of aircraft from mobile fuel trucks. There is no certified ARB Phase II system for aircraft fueling, since there is no standard fueling configuration for individual aircraft as there is f or passenger cars and trucks.

4. Section 5.0 (Requirements)

As in Rule 4621, Rule 4622 would be reorganized to improve understanding of the rule requirements. Under the proposed amendments, mobil e fuelers with a tank capacity greater than 120 gallons would now be required to h ave certified ARB Phase II vapor control systems. New sections would also be added requiring that Phase II vapor system be maintained leak-free and in accordance wi th the most recent ARB certifications and manufacturer specifications.

A new section would be added for installation requi rements with provisions for prebackfill inspections, installer certification by th e International Code Council, and all other certifications required under the applicable ARB Ex ecutive Order and operations manual. Clarification that Phase II vapor recovery systems may be replaced with newSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

17 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 certified Phase II vapor recovery systems would be added to the section prohibiting removal of a Phase II vapor recovery system. Addit ionally, in Section 5.2.6, District staff would add language allowing facilities with vehicle fleets to remove Phase II vapor recovery systems if their facility qualifies for an exemption as a vehicle fleet facility whose 100% of vehicles are equipped with ORVR.

Requirements for the maintenance of an operations a nd maintenance manual (O&M) would be relocated to Section 6.0 (Administrative R equirements). Periodic maintenance requirements would be made clearer. The schedule f or the inspection interval for periodic maintenance inspections would be changed. The inspection interval would be based on the previous year’s highest monthly throug hput. This is proposed due to confusion that has resulted from the previous wordi ng of this section. The method and schedule for determining the amount of liquid in th e vapor path would be changed to require more frequent testing, with the current sch edule being sunset upon rule adoption. District staff recommends removing secti ons outlining the periodic maintenance inspections for Phase I components. It is proposed that the requirements for periodic maintenance of the Phase I system be p art of Rule 4621 (Gasoline Transfer Into Stationary Storage Containers, Delivery Vessel s, and Bulk Plants), since Rule 4621 specifically applies to facilities that are require d to have and maintain a Phase I vapor
recovery system.

A new section would be included for maintenance and repair requirements that incorporate new provisions along with the existing maintenance and repair requirements. The proposed requirements include re -inspection of the affected equipment (e.g., breakaway valves, hoses, and nozzl es) that are separated in a drive off. The proposed requirements for breakaways enga ged in a drive-off are similar to requirements already in place in SCAQMD Rule 461.

A section would also be added to require operators of mobile fuelers to register in accordance with District Rule 2250 (Permit-Exempt E quipment Registration) unless the mobile fueler is not subject to the provisions of S ection 5.1. This is a change from the rule requirements presented in the June workshop. District staff believes that it is not necessary to require permits for mobile fuelers, ye t the list of mobile fuelers generated by the registration would be important in determini ng compliance.

Language throughout Section 5.0 (Requirements) woul d be adjusted to reflect new terms that have been added to Section 3.0 (Definiti ons), remove redundancies, and to aid in understanding rule provisions. Sections wou ld be renumbered to accommodate changes and compliance dates added as needed.

5. Section 6.0 (Administrative Requirements)

In Section 6.0 (Administrative Requirements), the r ecordkeeping and reporting requirements exempt facilities would be separated f rom requirements for permitted facilities. Exempt vehicle fleet facilities would be required to keep records of the make,SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

18 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 model, model year, and vehicle identification numbe r of all vehicles being refueled at the facility. Additionally, facilities that are su bject to Section 5.0 would now be required to maintain monthly throughput records, test result s, information on testers, and inspection results onsite for a minimum of five yea rs and make them available to the EPA, ARB, or APCO upon request. The requirement to maintain five years of records is due to an EPA requirement and is similar to provisi ons in other District rules.

Operations and Maintenance (O&M) Manual requirement s would be moved from Section 5.0 to Section 6.3 (Recordkeeping Requireme nts for the O&M Manual). The manual would have one additional provision, requiri ng operators to maintain copies of all vapor recovery performance tests. O&M manual r equirements that were redundant would be removed. The requirement for a protocol f or performing periodic maintenance inspection be maintained would be removed to elimin ate a redundancy, since the rule already specifies the inspection, maintenance and r epair, and testing requirements.

Within the testing requirement section (Section 6.4 ), staff would make several changes. The requirements that all periodic performance test s be performed at start up and thereafter, as required by ARB Executive Order and installations and maintenance manual, would be added, as well as the need to pass all tests that are conducted. Old compliance dates would be removed and language woul d be added clarifying which facilities are subject to the annual Dynamic Back-P ressure Test. Facilities with aboveground storage tanks that have integral dispen sers (non-remote) need not conduct this test unless otherwise required under A RB Executive Order. The vapor return piping on an aboveground tank that has an in tegral dispenser is very short and is installed by the manufacturer at the assembly plant . As a result, there are no low points in the vapor path where liquid can collect and caus e a blockage. Therefore, dynamic backpressure testing is unnecessary. District staf f would also add in the requirement to conduct a vapor-to-liquid ratio test in lieu of the air-to-liquid volume ratio test when applicable. District staff would adjust the proced ure for conducting the liquid removal test and that procedure would be placed in Section 5.0 (Requirements) as part of the requirement to conduct the test.

The requirement for attendance of a District orient ation class for those persons intending on conducting compliance tests would be s unset and a new requirement would be added that testers be in compliance with D istrict Rule 1177 (Gasoline Dispensing Facility Tester Certification). In addi tion, the amount of time required for notifying the District of performance testing prior to the test date would be shortened from 15 days to seven days, this would allow operat ors more flexibility and still allow District staff enough time to schedule attendance a t the tests.

Only one change is proposed for the Section 6.5, th e test methods section. District staff recommends that the liquid removal test be changed from ARB TP-201.6 to ARB TP201.6C the actual method necessary.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

19 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 6. Section 7.0 (Compliance Schedule)

The compliance schedule would have additional secti ons added allowing time to comply, if necessary, for facilities commencing ope ration after rule adoption, facilities not previously subject to the rule requirements, an d those already subject to the rule requirements.

Additionally, a new section would be added for thos e owners of vehicle fleets that qualify for an exemption under Section 4.0 (Exempti ons). Prior to operating under the exemption, vehicle fleet operators would need to mo dify their Permit to Operate conditions to allow such operations pursuant to Dis trict Rule 2201.

D. Proposed Amendments to Rule 4624

1. Rule Title, Section 1.0 (Purpose), and Section 2 .0 (Applicability)

In the current version of Rule 4624, the District o nly refers to loading operations and is silent on unloading operations. By adding these op erations to rule applicability, the inclusion of unloading operations in the rule requi rements becomes explicit. District staff would revise terminology to include unloading operations within the title, the purpose, and applicability sections. To do this, t he term “loading” would be removed, and the term “transfer” would be used in its place.

District staff would revise Section 1.0 (Purpose) b y removing language referencing the limiting of vapor pressure and storage temperature. This language is not pertinent to the purpose of the rule. In Section 2.0 (Applicabi lity), language would be removed regarding bulk plants subject to Rule 4621, since i t is reiterated in Section 4.0 (Exemptions).

2. Section 3.0 (Definitions)

Nineteen definitions would be added for rule clarit y. Several definitions spell out acronyms, while other would be needed to support ne w requirements. The District would also revise several existing definitions in o rder to use consistent language, consistent definitions between rules, and for clari fication of terms used throughout the

rule.

 Throughout this section, the term loading would be replaced with transfer or transferring to include both the loading and unload ing operations at Class 1 and

Class 2 facilities.

 Within the leak definition, the allowable vapor le ak concentration, above background, would be reduced to a reading of greate r than 1,000 parts per million by volume (ppmv). Exceptions of this would be made for gasoline vapor leaks, which would remain at 10,000 ppmv, as this s tandard is set by ARB.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

20 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624  District staff would also add to the leak definiti on language that in the instance of a repair, replacement, or sampling of process fluid that ppmv readings may exceed the 1,000-ppmv limit.

 For consistency with other District rules the defi nition of Portable Hydrocarbon

Detection Instrument would be revised to use the sa me definition as is used in

Rule 4623.

 Among those definitions that would be added is tra nsfer rack; this term would be changed to include unloading racks as well as loadi ng racks.

3. Section 4.0 (Exemptions)

Three of the current exemptions would be modified t o accommodate the addition of unloading operations to the rule applicability. Al so, operations subject to Rule 4622 (Gasoline Transfer into Motor Vehicle Fuel Tanks) w ould be exempt from Rule 4624 requirements.

Current Rule 4624 specifically exempts a certain ty pe of equipment/process modification from both BACT and offset requirements . In this rule development project, the automatic exemption from BACT and offset requir ements would be removed from the rule. The net result of removing the exemption would be that all equipment/process modifications would be required to meet any BACT or offset requirements specified in Rule 2201 (New and Modified Stationary Source Revie w Rule) unless the modification meets the conditions for being exempt from BACT or offset requirements pursuant to Rule 2201. The removal of automatic exemption from BACT and offset requirements

addresses an EPA concern about this issue.

An exemption would be added to remove the component s subject to the requirements of four District rules from the leak inspection req uirements of Rule 4624. These rules

are:

• Rule 4409 (Components at Light Crude Oil Productio n Facilities, Natural Gas Production Facilities, and Natural Gas Processing F acilities);

• Rule 4455 (Components at Petroleum Refineries, Gas Liquids Processing Facilities, and Chemical Plants)

• Rule 4622 (Gasoline Transfer into Motor Vehicle Fu el Tanks)

• Rule 4623 (Storage of Organic Liquids)

An exemption would be added for vacuum truck operat ions. The District’s definition of transfer rack includes these vessels, although they have historically been exempt. The District would exempt these vessels from rule requi rements with the proviso that the vacuum truck operators submit data as required in S ection 6.0 (Administrative Requirements). By requiring operators to supply Di strict staff with information about the number of vessels operated, capacity, throughput, t ransferred liquid, and VOC controls,

the District can assess whether to include them in future rule requirements.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

21 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 Section 4.0 (Exemptions) would be renumbered and ne w terms from Section 3.0 (Definitions) would be added for rule clarity.

4. Section 5.0 (Requirements)

Throughout Section 5.0 (Requirements), transfer rac k would replace loading rack/facility, and, where necessary, language would be adjusted to allow for improved understanding of rule requirements. Section and re ferenced items would be updated, and old compliance schedules would be removed.

In Section 5.0, language specifying the requirement s for facilities to be equipped with a VOC control and collection systems would be modifie d. The District would add in language that would allow operators to route VOC to a control and collection system or container subject to control requirements of Distri ct Rule 4623 (Storage of Organic Liquids). Additionally, for Class 2 facilities the District would add language identifying a vapor collection and control system must be utilize d; in the current rule, only the term ‘system’ is used to signify this. The District wou ld also add language for VOC control systems that are closed systems, that is to say, th ey have no vent point. Many facilities within the District are configured this way and are unable to conduct the source test specified in the rule. Closed systems have no vent point and unless they leak, they should meet the emission limits specified for Class 1 and 2 facilities. As a result of this configuration, the rule would allow facilities with closed systems to show compliance with emission limits by complying with the leak pro visions in Section 5.0 (Requirements).

In the current rule, there are no requirements to i nspect for leaks. The District would add quarterly leak inspection requirements allowing 72 hours to repair the leak, which is the same repair period specified in SCAQMD Rule 462 . The District would also allow facilities, if unable to repair leaking components in this time, to take components out of VOC service. Provisions would also be provided for returning repaired components to service and reducing leak inspections to annually, if five consecutive quarterly inspections are passed.

5. Section 6.0 (Administrative Requirements)

Section 6.1 would be expanded to require all facili ties to maintain records as before except with the added recordkeeping requirements of keeping leak inspection and source test results. Because of EPA requirements, all records would be maintained for five years and would be made available to the APCO, ARB, and EPA upon request. Requirements for recordkeeping for organic liquid T rue Vapor Pressure (TVP) and the method of acquiring this data would be clarified. Operators would also have the option to use material data safety sheets to show complian ce with the vapor pressure, rather than actually run the test for each material. With the inclusion of vacuum trucks to those vessels that Rule 4624 is applicable, through the d efinition of transfer rack, the District would add an administrative requirement that operat ors of vacuum trucks submit, withinSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

22 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 18 months of rule adoption, information on their va cuum truck operations. The District

would then use this information to determine if it is necessary to require further controls.

The District would add requirements for source test ing Class 1 and Class 2 organic liquid loading facilities in Section 6.2. The Dist rict is proposing that an initial source test be performed within 18 months of rule adoption and that source tests be performed every 60 months thereafter. An exception would be made for existing facilities that have performed a source test in the 60 months preceding rule adoption; these facilities need not perform the initial source test. The District would exempt operators of closed VOC emission control systems from source test requireme nts but require leak testing to show compliance with the rule limits. The source testin g calls for a vent point, but closed systems have no vent point by which operators can s ource test to ensure that emission limits are being met.. By their nature, closed sys tems should be meeting emission limits so long as they are free from leaks. For VOC contr ol systems regulated under Rule 4623, it would be redundant to require source testi ng in Rule 4624.

The proposed rule would revise required test method s to allow operators to use the most recent EPA-approved tests. Tests no longer EP A-approved would be removed. Test methods for determination of TVP of stored org anic liquids and API gravity of crude oil or petroleum distillate would also be added. T wo appendices would be added, one with a table for storage temperature versus vapor p ressure, which is already present in the rule and a second appendix for determination of Reid Vapor Pressure (RVP) and equations to convert to TVP. Operators would be al lowed to utilize alternative test methods if the APCO, ARB, and EPA approve the alter native in writing.

6. Section 7.0 (Compliance Schedule)

Old compliance schedules would be removed and secti ons would be added to allow facilities time to comply with new rule requirement s.

V. SUMMARY OF CHANGES TO OCTOBER 20, 2007 VERSION O F RULES

A. Revised Proposed Rule 2020

District staff is proposing a minor change in Secti on 6.7.1.2. Stakeholders noticed a conflict between the RVP-to-TVP reference temperatu re in Proposed Rule 4624. The exemption mentions the TVP at actual transfer tempe rature, but the test method description specifically says at the storage contai ner’s maximum storage condition. To resolve this conflict, District staff proposes modi fication to all requirements in Rule 2020

and Rule 4624 that mention the RVP-to-TVP reference temperature to be at the storage container’s maximum storage temperature. The chang e minimizes operator testing by having only one reference condition, rather than a condition for the storage container (defined in Rule 4623 – Storage of Organic Liquids) and a different one for the transfer operation (Proposed Rule 2020 and 4624).SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

23 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 B. Revised Proposed Rule 4621

In Section 2.0, the applicability language would be revised to better delineate that the size of the gasoline delivery vessels are not relat ed to the 19,800 gallons stated later in the applicability by grouping all of the storage co ntainer information in the first sentence and placing the gasoline delivery vessels in anothe r sentence. The requirements of Section 5.2.1.2, which was added for aviation gasol ine, would be clarified. ARB will no longer certify Phase I vapor control systems for av iation gasoline. However, to prevent backsliding, District staff proposes that operators storing aviation gasoline retain the current Phase I vapor control systems after ARB no longer certifies them for aviation gasoline. The change in language clarifies this pr ovision.

Three changes would be made to Section 5.3.1 throug h Section 5.3.4. First, the language describing each type of container would be revised for clarity. Second, the settings for the pressures-vacuum relief valves wou ld be changed to look like the requirements in CP-206, although the range itself w ould not change. Lastly, operators were concerned about the language about the minimum control efficiency for Phase I systems. The language in the October 2007 version could imply that operators would have to prove the stated control efficiency a sourc e test. Since these systems are certified, no source test is required. However, pe r Executive Order for these systems, operators would still be required to maintain and t est parts of the system as laid out in

the Executive Order. District staff intended that the system is certified to the stated control efficiency. District staff is proposing la nguage in this section to clearly convey

the intent of District staff.

Section 6.3.3 requires that people wishing to perfo rm the testing for the vapor recovery systems be in full compliance with the District’s 1 177 (Gasoline Dispensing Facility Tester Certification), but no compliance date was g iven. As written, certification would be required as of the date of rule adoption. Since it does take at least some time for the certification process, a short compliance period wo uld be more appropriate. District staff proposes three months after rule adoption dat e for the certification.

C. Revised Proposed Rule 4622

There are three minor language changes to this rule . The first one involves the compliance date for ICC certification in Section 5. 2.3. The date was placed lower in the provision. District staff proposes moving the date to the top of the requirement. The second minor change involves the registration of mo bile fuelers. Since the registration process can take up to a year to complete, District staff is proposing a 12 month compliance schedule for this provision. The last c hange involves the O&M manual provisions in Section 6.3. Since O&M are not spell ed out anywhere else, District staff proposes putting the full title in this section.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

24 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 D. Revised Proposed Rule 4624

Stakeholders noticed a conflict between the RVP-to- TVP reference temperature in Proposed Rule 4624. The exemption mentions the TVP at actual transfer temperature, but the test method description specifically says a t the storage container’s maximum storage condition. To resolve this conflict, Distr ict staff proposes modification to requirements in Rule 4624 that mention the RVP-to-T VP reference temperature to be at the storage container’s maximum storage temperature . The change minimizes operator testing by having only one reference condition, rat her than a condition for the storage container (defined in Rule 4623 – Storage of Organi c Liquids) and a different one for the transfer operation (Proposed Rule 4624).

As proposed, Rule 4624 would apply to unloading as well as loading operations. This means that closed VOC emission control systems may be in use for the unloading operations. Because of stakeholder comments, Distr ict staff is proposing that closed VOC emission control systems be included to the typ es of acceptable emission control systems for both Class 1 and Class 2 transfer opera tions.

Finally, record keeping requirements about the TVP would be revised to reflect the change in TVP requirement discussed above.

VI. BASELINE EMISSIONS AND EMISSION REDUCTIONS

Control Measure T in the EOADP involves emissions f rom gasoline dispensing facilities and other organic liquid transfer operations. The 2005 baseline VOC emissions attributed to facilities subject to Rule 4621 is 1. 80 tons per day. As shown in Appendix B of the Final Staff Report, based on best data ava ilable to District staff, the estimated

VOC emissions reduction from 2005 baseline emission s inventory and ARB staff report for CP-206 for these source categories is 1.06 tons per day.

The baseline VOC emissions attributed to the propos ed amendments to Rule 4622 and Rule 4624 were unavailable through the 2005 baselin e emissions inventory. District staff analyzed information based on the best data a vailable to develop baseline VOC emissions for the source categories. The baseline VOC emissions associated with the proposed changes to Rule 4622 is 0.31 tons per day. The estimated VOC reduction for Rule 4622 is 0.24 tons per day. For Rule 4624 anal ysis showed baseline VOC emissions at 0.38 tons per day and an estimated VOC reduction of 0.12 tons per day.

The total combined VOC emissions reduction from the proposed changes to Rules 4621, 4622, and 4624 is estimated at 1.42 tons per day as presented in Appendix B of the Final Staff Report.

As previously stated in Section IA of this staff re port, this rule project results from two

control measures in the EOADP. Baseline emissions and emission reductions fromSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

25 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 Control Measure T are outlined above. Control Meas ure U expected a total reduction of 0.05 tons per day VOC reduction from a new rule add ressing aviation gasoline. Aviation gasoline did not constitute a new rule and instead the District has included provisions regarding the regulation of aviation gasoline vapor s in Rule 4621. Furthermore, due to technological constraints the District was not able to require a higher efficiency of vapor recovery systems used during the transfer of aviati on gasoline. Despite the inability to be more stringent for aviation gasoline vapor recov ery, the District will meet its

commitment for reductions for both Control Measure T and U by reducing VOC emissions by approximately 1.47 tons per day throug h changes to Rule 4621, 4622, and

4624.

VII. COSTS AND COST EFFECTIVENESS ANALYSIS

Pursuant to CH&SC 40920.6(a) a cost effectiveness a nalysis is required to be performed for rules that implement Best Available R etrofit Technology (BARCT) or all feasible control measures (AFCM). Since Control Me asure U from the District’s Extreme Ozone Attainment Demonstration Plan (EOADP) for aviation gasoline does not impose additional requirements on current operation s, no cost effectiveness analysis is required for the proposed changes related to aviati on gasoline. A cost effectiveness analysis for Rule 2020 is not required because the proposed amendments do not implement BARCT or AFCM. The results of the cost e ffectiveness analysis for Rules 4621, 4622, and 4624 are included in Appendix C of the Final Staff Report.

VIII. SOCIOECONOMIC IMPACT ANALYSIS

Pursuant to state law, District staff is required t o perform a socioeconomic impact analysis prior to adoption, amendment, or repeal of a rule that has significant air quality benefits or that will strengthen emission limitatio ns.

As part of the Districts socioeconomic analysis pro cess, District staff sought representatives from interested groups to participa te as members of a Socioeconomic Focus Group on April 5, 2007. The Focus Group assi sted District staff in determining the appropriate method for gathering information on regulatory compliance costs and business impacts resulting from compliance with the rule. The results of the socioeconomic analysis are published in a report an d were presented along with the refined version of the draft rule to the public and interested parties during the final workshops for the rules in July 2007.

IX. ENVIRONMENTAL IMPACTS

Pursuant to the California Environmental Quality Ac t (CEQA), District staff has investigated the likely environmental impacts of th e proposed changes. District staff hasSAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

26 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 found that the proposed project could not have a si gnificant effect on the environment, and qualifies for exemption pursuant to CEQA guidel ines Section 15061(b)(3).

X. RULE CONSISTENCY ANALYSIS

Pursuant to state Health and Safety Code, Section 4 0727.2, District staff has prepared a rule consistency analysis later in the rule develop ment process. District staff found that facilities could comply with the proposed amendment s to the three rules analyzed in this document as well as all other existing or proposed District rules. Furthermore, District staff found that none of the proposed requirements for this rule project would conflict with federal rules, regulations, or policies coveri ng similar stationary sources.

XI. REFERENCES

1. California Air Resource Board Certification Proc edure for Vapor Recovery Systems at Gasoline Dispensing Facilities, CP – 201 ; Amended May 2006.

2. California Air Resource Board Certification Proc edure for Vapor Recovery Systems of Bulk Plants, CP-202; Amended March 1999.

3. California Air Resource Board Certification Proc edure for Vapor Recovery Systems of Cargo Tanks; CP-204; Amended March 1999.

4. California Air Resource Board Certification Proc edure for Vapor Recovery Systems of Novel Facilities, CP-205; Amended March 1999.

6. California Air Resource Board Certification Proc edure for Vapor Recovery Systems of Aboveground Storage Tanks, CP-206; Adopt ed June 2007.

7. California Air Resource Board Staff Report for t he Adoption of California Air Resource Board Certification Procedure for Vapor Re covery Systems of Aboveground Storage Tanks, CP-206; May 2007.

8. California Air Resource Board Definitions for Va por Recovery Procedures, D200; Amended May 2006.

9. California Air Resource Board Forecasted Emissio ns by Summary Category 2006 Almanac (Base Year 2005 EI); April 5, 2006

10. California Air Resource Board Advisory Number 3 60, May 2007.

11. California Health and Safety Code, Sections 419 50 – 41962.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

27 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 12. Code of Federal Regulations; 40 CFR 60 & 40 CFR 63.

13. San Diego Air Pollution Control District Rule 6 1.3.1 (Transfer of Gasoline into Stationary Underground Storage Tanks); Adopted Marc h 2006.

14. San Joaquin Valley Unified Air Pollution Contro l District 1-hour Extreme Ozone Attainment Demonstration Plan; Amended October 2005

.

15. San Joaquin Valley Unified Air Pollution Contro l District Rule 2020; Amended September 2006.

16. San Joaquin Valley Unified Air Pollution Contro l District Rule 4623; Amended May 2005.

17. San Joaquin Valley Unified Air Pollution Contro l District Rule 4409 and Staff Report for Rule 4409; Adopted April 2005.

18. San Joaquin Valley Unified Air Pollution Contro l District Rule 4455; Adopted April

2005.

19. South Coast Air Quality Management District Rul e 461 (Gasoline Transfer and Dispensing); Amended June 2005.

20. South Coast Air Quality Management District Rul e 462 (Organic Liquid Loading); Amended May 1999.

21. California Air Pollution Control Officers Assoc iation Air Toxics “Hot Spots” Program, Appendix A; November 1997.

22. U.S. Environmental Protection Agency Protocol f or Equipment Leak Emission Estimates, 453/R-95-017, Tables 5-6 & 5-7; November 1995.SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT

Final Staff Report: Rules 2020, 4621, 4622, 4624 J anuary 10, 2008

28 Final Staff Report with Appendices for Revised Proposed Amendments to Rules 2020 4621, 462 2, and 4624 This page intentionally blank.