UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION IX AIR DIVISION

Technical Support Document

for

EPA ’ s Proposed Rulemaking

for the California State Implementation Plan

S an Joaquin Valley Unified Air Pollution Control District

Rule 4401

Steam Enhanced Crude Oil Production Wells

Prepared by: Joanne Wells Reviewed by: Andrew Steckel

August 201 12

RULE IDENTIFICATION

Agency: San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD)

SIP Approved Rule: Rule 4401

- Steam Enhanced Crude Oil Production Wells Adopted

– December 14, 2006

Submitted

– May 8, 2007 Approved

– January 26, 2010 , effective February 25, 2010 (75 FR 3996)

Subject of this TSD: Rule 4401

– Steam

- Enhanced Crude Oil Production Wells Adopted

– June 16, 2011

Submitted

– J uly 28, 2011

BACKGROUND

On January 26, 2010, EPA finalized a limited approval/limited disapproval of

SJVUAPCD Rule 4401. EPA found that

, while the rule strengthened the SIP, some provisions of the rule di d not full y satisfy requirements of section 110 and part D of the

Clean Air Act (CAA or the Act)

. The limited disapproval was based on a deficiency in

Section 6.2.4 of the rule. Th is deficiency is discussed further in the Rule Summary

section below.

EPA’s limited a pproval/limited disapproval started sanctions clocks under section 179 of the Act and our regulations at 40 CFR 52.31. Unless EPA approves a subsequent SIP revision which corrects the deficiencies, sanctions will become effective within 18

months for offset sanctions (August 25, 2011) and 24 months for highway sanction s (February 25, 2012)

.

RULE SUMMARY

SJVUAPCD Rule 4401

, Steam

- Enhanced Crude Oil Production Wells

, is designed to

limit volatile organic compound (VOC ) emissions at steam

- enhanced crude o il production w ells

. Th is rule also applies to any VOC collection and control systems

associated with these wells

. The rule establishes requirements for inspection, component replacement, re

- inspection, maintenance, repair periods, and replacement/retrofit for leaking components. It also includes administrative and recordkeeping requirements, such as inspection logs.

The purpose of the most recent rule amendment is to correct the rule deficiency in

Section 6.2.4 of the rule and to clari fy existing rule provisions by removing expired language throughout the rule and renumbering the remaining sections as needed. The following is a discussion of the deficiency identified by EPA in Section 6.2.4 and the

revisions made to Section 6.2 , includi ng Section 6.2.4, to correct it.

Section 6.2 of Rule 4401, submitted in May 2007, require d annual source testing but

allow ed SJVUAPCD, the California Air Resources Board ( CARB ), and EPA to wai v e3

this test requirement. Section 6 .2 .4 state d that waiver requests would be deemed approved by EPA if EPA did not object within 45 days of r eceipt. However, as EPA explained in its June 2009 T echnical S upport D ocument (TSD) analyzing Rule 4401

, Section 6.2.4 effectively provided executive officer dis cretion in conflict with the requirements of CAA section 110(a) and (i) and longstanding national policy set forth in

t he Bluebook and Little Bluebook.

To correct this deficiency, SJVUAPCD deleted Sections 6.2.3 and 6.2.4 and revised

Section 6.2.2 . Secti on 6.2.2 now provides that

, “ [i] f approved by the APCO, a VOC collection and control system is not subject to Section 6.2.1 [i.e. annual compliance source testing requirements] if all uncondensed VOC emissions collected by the system are controlled by a device meeting one of the requirements in Sections 6.2.2.1 through 6.2.2.3.” Sections 6.2.2.1 through 6.2.2.3 refer to other SJVUAPCD rules that limit

emissions from internal comb ustion engines, other combustion devices (e.g. boilers and steam generators) and flares. Thus, under the revised rule, a VOC collection and control

system may be exempted from source testing requirements if all the VOC emission s collected by the system are controlled by a device that is regulated under one of the specified rules

.

RULE EVALUATION CRITERIA

We used t he following criteria to evaluate the submitted rule :

1. Enforceability

- CAA section 110(a)(2)(A) requires that regulations submitted to EPA for approval into a SIP must be clear and legally enforceable.

2. Rule Stringency

– CAA s ection 172(c)(1) requires nonattainment areas to implement all reasonably available control measures (RACM), incl uding such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, of reasonably available control technology (RACT), as expeditiously as practicable. In addition, under CAA section 182(b)(2), ozone nonattainment areas classified as moderate or above must implement RACT for all VOC sources covered by a CTG document and all other major sources of VOCs. The SJVUAPCD regulates an ozone nonattainment area

that is classifie d as Extreme under both the one

- h our ozone and eight

- hour ozone standards. 40 C.F.R. § 81.305 (2010). 1 Therefore, submitted Rule 4401 must fulfill RACT requirements for VOCs.

1 SJVUAPCD also regulates a nonattainment area under the 2006 24

- Hour PM 2.5 National Ambient Air Quality Standard (NAAQS). 40 C.F.R. § 81.305 (2010)

. By December 14, 2012, California must submit a revision to the State Implementation Plan (SIP) for this nonattainment area that provides for, among other things, implementation of all RACM as expeditiously as practicable (including RACT for existing sourc es). CAA §

172 (a)(2)(A), (b) & (c)(1), 74 FR 58689 (Nov. 13, 2009). EPA will take action on this

RACM demonstration in a separate rulemaking.4

3. SIP Revisions

- CAA section 110(l) prohibits EPA from approving any SIP revision that would interfere with any ap plicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of the CAA. In addition, CAA section 193 prohibits the modification of any SIP

- approved control requirement in effect before November 15, 1 990, in a

nonattainment area

.

In applying these criteria to the submitted rule , we used the following g uidance and policy documents to inform our evaluation :

Issues Relating to VOC Regulation, Cutpoints, Deficiencies, and Deviations (the "Blue Book"), US EPA, OAQPS (May 25, 1988). Guidance Document for Correcting Common VOC and Other Rule Deficiencies

, EPA Region IX (August 21, 2001, the “Little Bluebook”). State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990, 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992). Final Rule To Implement the 8

- Hour Ozone NAAQS

– Phase 2 , 70 FR 71612 ( Nov. 25, 2005)

.

RULE EVALUATION

1. Enforceability

- As stated in the previous evaluation of Rule 4401, t he recordkeeping and other compliance provisions generally ensure that R ule

4401 can be enforced adequately

. See June 2009 TSD

. The revised provision in Section 6.2.2 allowing the APCO to exempt certain systems from source appropriately limits director’s discretion by ensuring that exempted sour c es are subject to specific restrictions (Sections 6.2.2.1 to 6.2.2.3) under other district

rules. None of the other revisions made to Rule 4401 affect its’ enforceability.
Therefore, we propose to determine that submitted Rule 4401 is sufficiently

clear and enforceable

.

2. Rule Stringency

- In our previous evaluation of Rule 4401

, we concurred with

SJVUAPCD that Rule 4401 fulfills CAA RACT requirements for reasons including: (1) Rule 44 01 requires significant (e.g., 99%) emissions control , and (2) Rule 4401 requirements are as stringent as the requirements applicable to

similar sources in other large California nonattainment areas

. See June 2009

TSD

. None of the recent revisions to Rule 4401 undermine its stringency and we are not aware of any basis to undermine our previous conclusion that Rule

4401 fulfills RACT

. Therefore, we propose to determine that submitted Rule

4401 continues to implement RACT for this source cat egory.

3. SIP Revisions

- None of the revisions to Rule 4401 relax any of the requirements of the version of the rule previously approved into the SIP

. W e therefore propose to determine that our approval of the submittal compl ies with

CAA section s 110(l) and 193 because the submitted SIP revision : (1) would

not interfere with the on

- going process for ensuring that requirements for RFP5 and attainment of the NAAQS are met, and (2) is at least as stringent as the

rule previously approved into the SIP and will insure equivalent or greater

emission reductions of VOCs.

RULE DEFICIENCIES

We have not identified any deficiencies in Rule 4401 that are sufficient for EPA to propose less than full approval.

ADDITIONAL RECOMMENDATIONS FOR THE NEXT RULE REVISION

T he following recommendations are not currently the basis for rule disapproval, but we

encourage SJVUAPCD to consider them the next time the rule is amended.

1. For clarity and to strengthen enforcement, w e recommend adding a definition for

year

.

2. We encourage the district to further study if changing the definitions of critical process unit and process unit as proposed in draft rule revisions dated April 5,
2001, would further strengthen e nforceability of Rule 4401.

3. We encourage the district to f urther study if changes, also proposed in draft rule revisions dated April 5, 2011, to language in Sections 4.6.2 which exempts “component buried underground” and to Section 5.2.1 which addresses when leaks must be repaired

, would strengthen enforceability

.

4. For clarity and enforceability, we recommend that the district replace “by the

APCO” in Section 6.2.2 with “in writing by the APCO” and add the following language to Section 6.1.3 “and/or keep a copy of the APCO approval for VOC

collection and control systems not subject to source testing under Section 6.2.1”.

EPA ACTION

The submitted Rule 4401 will incorporate revisions to Section 6.2.4 that correct the deficiency identified in the limited disapproval on January 26, 2010 into the SIP. The

submitted rule fulfills the relevant CAA requirements as discussed above. Therefore, EPA staff recommends full approval of Rule 4401 pursuant to CAA section 110(k)(3).

Because of the recommendation for full approval, EPA staff also recommends simultaneously issuin g an interim final determination to defer the imposition of sanctions pending EPA’s final approval of Rule 4401. The issuance of the interim final determination to defer sanctions is based on a finding that it is more likely than not that

Rule 4401 fulfill s the relevant CAA section 110 and part D requirements

. EPA staff believes relief from sanctions should be provided as quickly as possible.

ADDITIONAL REFERENCES6

1. SJVUAPCD Rule 4401

- Steam Enhanced Crude Oil Production Wells , as submitted on J uly 28, 2011

2. SJVUAPCD Rule 4401

- Steam Enhanced Crude Oil Production Wells, as given limited approval and limited disapproval on January 26, 2010.

3. SJVUAPCD “Final Draft Staff Report For Draft Amendments to Rule 4401 (Steam

- Enhanced Crude Oil Production Wells)

, M ay 19. 2011.

4. EPA Technical Support Document, Rule 4401, Steam

- Enhanced Crude Oil Production Wells, June 2009.