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together. In this case, the gasoline loading limit would effect VOC emissions which are defined precursor

pollutants to ozone. Tesoro is located in a maintenance area for ozone which means, that for an increase

in VOC emissions of at least 40 tons per year, the requirements of the PSD program apply. UDAQ has

conducted a review of the limitation in question and has found no evidence that this gasoline loading limit

was taken for the express purpose of avoiding maj or NSR. This limit was put in place in the 1 990s to

demonstrate that no increase in emissions would occur from the installation of two tanks. Rather than

conducting a complicated tank-by-tank individual throughput emission approach at that time, Tesoro

instead used the total throughput at the loading rack as a surrogate. By limiting the total throughput at the

loading rack, the throughput at the individual tanks feeding that loading rack is similarly limited, and

therefore the total emissions ofVOC from those tanks is also limited.

UIJAQ is including the following additional analysis showing that even ifthe removal of that limit could

have impacted the major NSR status of the original project (a point with which UDAQ disagrees), no

changes to the ITA or AO would be required (see the following).

If the possibility of major NSR review had resulted, then UDAQ agrees that 40 CFR 52.21 (r)(4) would be

the applicable regulation. Incorporated by reference into R307-405-1 9 Source Obligation, that regulation

reads as follows:

At such time that a particular source or mod~flcation becomes a major stationary source or major

modification solely by virtue ofa relaxation in any enforceable limitation which was established after

August 7, 1980, on the capacity ofthe source or mod~flcation otherwise to emit a pollutant, such as a

restriction on hours ofoperation, then the requirements or paragraphs U) through (s) ofthis section shall

apply to the source or mod~/Ication as though construction had not yet commenced on the source or

modification.

Consistent with the response to comment #13, UDAQ interprets this to mean that should UDAQ relax a

limit previously taken to avoid major NSR, then the entire project, including the original action which

avoided major NSR, must be re-evaluated as though the entire project were being proposed today. In

other words, the original project (or more to the point both the original and the new project) does not

automatically become major, but that the entire combination project must be evaluated to determine its

major or minor modification status.

Again, this analysis has already been completed. As found in Table 3-3 (page 37) of the revised NOT,

gasoline and diesel loadout VOC emissions are shown as increasing by 14.72 tpy. These values are

projected actual emissions, as no limitation on plant-wide VOC emissions has been established for the

refinery. Including the changes to VOC emissions from other affected components at the refinery, the

total increase in projected actual emissions equals 28.12 tpy, which is well below the 40 tpy significance

threshold. Therefore the modification remains minor. Accordingly, the comment is noted, and no

changes were made to the ITAs.

Comment #15: “The calculation of product demand growth exclusion is not based on adequate

evidence in the record. Tesoro’s calculation of demand growth emissions is not legally defensible.

For example, Tesoro based its demand growth emission estimate on “the maximum actual

throughput, firing rate or emissions rate” experienced at all units (except loading racks and storage

tanks) during a 1 month period. NOl at 27. However, this hypothetical rate must be both legally

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and physically possible. In other words, the rate must be one that the facility could physically

achieve while still complying with its permit and applicable law.”

UDAQ Response: The commenter seems to be making a general statement that just because a source has

demonstrated the capacity to operate at a particular rate or throughput it does not mean it can actually

operate at that rate or throughput. Specifically, the commenter implies that an analysis must be made of

this increased capacity to verify that it would meet all other applicable rules, regulations and

requirements. IJDAQ agrees that such an analysis is required. However, UDAQ disagrees that this

analysis was not completed. Consistent with the requirements of R307-1 01-2, R307-40 1-3 and R307-

403-3, UDAQ reviewed the validity of the supplied calculation methodology and the accuracy of the

resulting projected annual emissions (see NOT Appendix B). In no case did the projected emissions

exceed any short- or long-term emission limitations as found in the most recent AO issued to Tesoro

(DAQE-AN103350056-12). This was explained in the source plan review (RN103350058-12) for

DAQE-1N103350058-12 under Reviewer Comment #8. See also response to comment #25 for more

information.

Comment #16: “Tesoro also uses a 98% utilization factor to calculate its demand growth emission

estimate. NOl at 26-27. However, there is no support for this ufflization factor in the record. In

other words, the record does not support the contention that the facility is physically capable of

operating at that rate for any extended period of time, much less a year. Further doubt is cast upon

this utilization factor because elsewhere Tesoro uses a 95% utilization or annualized rate that

assumes a 95% capacity factor to account for (SRU) unit downtime. NOl at B-30.”

UDAQ Response: UDAQ disagrees with this comment. In EPA’s only policy determination on the use

of the demand growth exclusion, found in a letter from EPA Region 4 (found in the NOT as Attachment

D, and also attached to this response memorandum), EPA states that it agrees that “Georgia Pacific may

use the highest demonstrated average monthly operating level during the baseline period as an

approximation ofthe level of operation that the units ‘could have accommodated’ during the baseline

period.”

The EPA letter goes on to state that once a source has determined the projected actual emissions

following the proposed project, the source is allowed to exclude from the projection “that portion ofthe

unit’s emissions following the project that an existing unit could have accommodated” during the baseline

period and that are unrelated to the particular project.

These statements allow Tesoro to exclude all emissions that were capable of being accommodated during

the baseline period — i.e. 100% of all demonstrated emissions not associated with the new project. Tesoro

took a more conservative approach and applied a 98% utilization factor on top of already demonstrated

maximum monthly emissions (actual emissions) to account for any normal reductions in production that

take place.

The comment also addresses the use of a 95% capacity factor at the SRU versus the 98% utilization factor

applied for all other equipment. When UDAQ originally analyzed this information, it assumed that the

95% capacity factor was derived from the PM10 SIP requirement of installing a 95% efficient SRU, and

that this 95% factor was then applied to the afready adjusted emissions for the SRU (emissions adjusted

by the 98% utilization factor discussed above). This assumption was based on the difference between the

terms “capacity” and “utilization” that were applied to each factor.

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However, this assumption was incorrect. Tesoro has since pointed out that the 95% factor was a

typographical error, and this is demonstrated in Attachment B-14 of the NOT. While the first footnote on

page B-30 (the second page of Attachment B-14) does reference the 95% capacity factor, this factor does

not appear in any of the calculations of that attachment. The 98% utilization factor does appear when

calculating the throughput the unit was capable of accommodating (second table on page B-30). Upon

receiving this clarification from Tesoro, UDAQ verified the equation of concern and determined that the

original calculations were correct and consistent. -

Comment #17: “Although the NOl purports to aggregate the CONO. and Overhead Condensing

Projects with the Waxy Crude Project, there is no analysis or evidence in the record assessing the

emissions from these projects.”

UDAQ Response: UDAQ disagrees with this comment. The emissions from both projects are included

in the emission calculations for the Waxy Crude Processing Project. The commenter is perhaps confused

that these emissions are not included because they are not listed as a separate line item. This is because

the calculation methodology used for determining the emission increase from any project (including one

which is aggregated with previously permitted projects) is to calculate the difference between (total)

projected future actual emissions and established baseline actual emissions. The baseline period chosen

by Tesoro does not include emissions from the CONOx and Overhead Condensing Projects because these

two projects have not yet been constructed. Projected future actual emissions include all changes to the

FCCU (and other equipment) related to the combined Waxy Crude Processing, CONOx and Overhead

Condensing Projects. As these projects all involve changes at the FCCU, the final FCCU emissions are

assumed to include all of the changes associated with all three projects in combination. The commenter

appears to assume that these two projects have already been constructed and are in operation, based on the

following section of the comment:

At the same time, it is important to note that, as with projected actual emissions, baseline actual

emissions shall includefugitive emissions and emissions associated with startups, shutdowns, and

ma~functions. Therefore, ~fthe CONOx and Overhead Condensingprojects result in anyfugitive

emissions or emissions associated with startups, shutdowns or ma(functions, those emissions must also be

included in the company’s calculation ofprojected emissions.

The baseline emissions include startup, shutdown and malfunction emissions which occurred during the

baseline period. UDAQ required Tesoro~to include startup and shutdown emissions in the calculation of

projected actual emissions; however, UDAQ does not include possible but unknown and un-calculable

malfunction emissions in the calculation of projected emissions.

Comment #18: “At the same time, it is important to note that, as with projected actual emissions,

baseline actual emissions shall include fugitive emissions and emissions associated with startups,

shutdowns, and malfunctions. Therefore if the CONOx and Overhead Condensing projects result

in any fugitive emissions or emissions associated with startups, shutdowns or malfunctions, those

emissions must also be included in the company’s calculation of projected emissions; however, they

were not included.” .

UDAQ Response: The response to this comment was included in response to comment #17.

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