Document ID: EPA-R09-OAR-2010-0907-0005
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2011-01-04T05:00Z

United States Environmental Protection Agency

 Region IX Air Division

Technical Support Document 

for

 EPA’s Notice of Proposed Rulemaking

for the

California State Implementation Plan

as submitted by the California Air Resources Board

EPA’s Analysis of

San Joaquin Valley Unified Air Pollution Control District’s

Rule 4402, Crude Oil Production Sumps

October 2010

Prepared by Joanne Wells

Approved by Andrew Steckel

San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD)

Submitted Rule

Rule 4402, Crude Oil Production Sumps originally adopted on April 11,
1991 as Rule 465.2, amended on December 17, 1992, and submitted on
August 24, 2007. The submittal was determined complete on September 17,
2007.  There are no other submittals of this rule on which EPA has not
acted.

Applicable SIP Rule

The SIP-approved rule is SJVUAPCD Rule 465.2, Crude Oil Production Sumps
adopted on April 11, 1991, amended on September 19, 1991 and approved
into SIP on December 13, 1994 (59 FR 64132).

Background

On January 2, 2008 (73 FR 48), EPA published a direct final approval of
revisions to the California State Implementation Plan (SIP).  These
revisions concerned local rules that address reduction of animal matter,
and volatile organic compound (VOC) emissions from crude oil operations
and petroleum refinery equipment, asphalt paving and maintenance, and
petroleum solvent dry cleaning.  The direct final action was published
without prior proposal because EPA anticipated no adverse comment.  The
direct final rule stated that if adverse comments were received by
February 1, 2008, EPA would publish a timely removal in the Federal
Register.  EPA received a timely adverse comment.  Consequently, we
removed the direct final approval of SJVUAPCD Rules 4104, 4402, 4404,
4453, 4454, 4625, 4641, and 4672. (See 73 FR 13440)

In today’s action we are addressing SJVUAPCD Rule 4402. We do not
intend to take final action based on our January 2008 proposal regarding
this rule. As a result, we are not providing a thorough summary or reply
to comments submitted in response to our January 2008 proposal regarding
the SJVUAPCD Rule. Generally, the comments included concerns regarding
the estimated emissions from crude oil sumps, the large number of
exemptions in the rule and whether this rule complied with the
requirements for reasonably available control technology (RACT)
described in CAA Section 182(b)(2) and elsewhere.  

Purposes of Rule and Rule Amendments

Section 110(a) of the CAA requires states to submit regulations that
control VOCs, oxides of nitrogen, particulate matter, and other air
pollutants which harm human health and the environment.  This rule was
developed as part of the local agency’s program to control VOC
emissions.  Specifically, Rule 4402 is designed to limit VOC emissions
from crude oil production sumps.  

Rule amendments include: 

The rule has been renumbered and the format updated. 

Rule purpose is added.  

Definition of VOC is deleted. 

The exemptions for sumps at petroleum refineries (I.A) and the exemption
for pits and ponds (I.B) have been moved from Section I (Applicability)
to Section 4.0 (Exemptions) as sections 4.1.6 and 4.1.7. 

Rule Evaluation Criteria 

EPA is primarily using the following three criteria to evaluate Rule
4402.

Enforceability – CAA §110(a)(2)(A) requires that regulations
submitted to EPA for SIP approval must be clear and legally enforceable.

Anti-Backsliding - CAA §110(l) restricts certain SIP revisions that
would relax existing SIP-approved requirements.  

Rule Stringency – CAA §172(b) and 182(a)(2)(A) require ozone
nonattainment areas to implement RACT for ozone precursors. The SJVUAPCD
regulates an extreme 1-hr ozone nonattainment area and an extreme 8-hr
ozone nonattainment area (see 40 CFR part 81) and must fulfill the
requirements of RACT.

    

RACT Discussion

SJVUAPCD 2009 RACT Demonstration

On April 16, 2009, SJVUAPCD adopted its “RACT Demonstration for Ozone
SIP,” which provides the District’s demonstration that RACT is
implemented for all appropriate sources. This includes several pages
discussing Rule 4402. (See Cover and applicable pages attached.) In
summary, SJVUAPCD states that: 

The 2007 emissions inventory estimated VOC emissions from crude oil
sumps in the district at approximately 2.6 tons/day.  This updated
emissions estimate is based on survey data collected from oil producers
for 2007. See attachment 3, 2007 Area Source Emissions Inventory
Methodology, 310- Oil Production Fugitive Losses.  

This emissions estimate of 2.6 tons/day is in contrast to SJVUAPCD’s
previous emissions estimate of 3 to 60 tons/day based on 1990’s data
from the Department of Oil, Gas, and Geothermal Energy database. This
data was largely found to be inaccurate and did not account for many
closed and inactive sumps. See SJVUAPCD’s RACT Demonstration for Ozone
SIP for further explanation.

There are no national guidance (CTG or ACT) or regulation (NSPS, NESHAP,
or MACT) to help define RACT for this category. 

Rule 4402 imposes similar requirements to those in Ventura County Air
Pollution Control District (VCAPCD) Rule 71.4. Although VCAPCD’s rule
does not allow 1st stage sumps and SJVUAPCD Rule 4402 does allow 1st
stage sumps, SJVUAPCD does not believe that Rule 4402 is less stringent.
In addition, the 2007 emissions inventory survey data shows that there
are no active 1st stage sumps operating in SJVUAPCD (see attachment 3).

Santa Barbara County (SBCAPCD) is the only other California district
that exempts small producers of light or heavy crude (less than 150
barrels/day) from regulation. SJVUAPCD exempts small producer 2nd and
3rd stage sumps less than 1000 square feet surface area used for only
heavy crude oil (small producer is less than 6000 barrels/day at all
locations in county).  SJVUAPCD also exempts very small producers (150
barrels/day) with 2nd and 3rd stage sumps less than 5000 square feet
surface area used only for heavy crude oil. SJVUAPCD states that their
exemptions for small producers are similar to the SBCAPCD exemption.  

Based on low true vapor pressure (TVP) and low emissions from heavy
crude, the VOC emissions from 2nd and 3rd stage sumps from small and
very small producers are relatively low and to require them to install
and operate a fixed or floating cover would not be economically
feasible. SJVUAPCD estimated the cost effectiveness of a rigid floating
cover for a 5000 sq. ft. second stage sump containing heavy crude oil to
be $64,800 per ton of VOC reduced. (See RACT Demonstration for Ozone
SIP, Page 4-79)

Exemptions for minimal VOC emissions (0.007 lbs/sq.ft./day) and clean
produced water (35 milligrams/liter) are still appropriate because the
emissions are very low and installing controls would be economically
infeasible. SJVUAPCD states that the cost of controlling VOC emissions
from these low emission sumps and ponds would be significantly higher
than the cost of controlling emissions from the heavy crude oils sumps
($64,800 per ton of VOC reduced for 2nd stage, as noted above).

Requirements found in other California District Rules

The following is a list of more stringent requirements found in
analogous rules from neighboring agencies: 

South Coast (SCAQMD) Rule 1176 and San Luis Obispo (SLOCAPCD) Rule 419
require floating covers to have seals and the gap cannot exceed 1/8”
for a cumulative length of 97% of the perimeter. Rule 4402 allows a 1
inch gap and does not require seals.

SCAQMD Rule 1176 and SBCAPCD Rule 344 require that fixed covers be
equipped with an air pollution control (APC) device with a control
efficiency of 95% of VOCs. Rule 4402 only requires a pressure/vacuum
valve set to within ten percent of maximum safe working pressure of
cover. 

SCAQMD Rule 1176 requires monthly to annual inspections for leaks and
testing operation of APC equipment. Rule 4402 does not require
inspections. 

SJVUAPCD Rule 4402 has a large number of exemptions either not found or
broader and less restrictive than exemptions found in other district
rules. These exemptions allow uncontrolled VOC emissions from exempted
2nd and 3rd stage sumps and ponds. See detailed review of exemptions
below. 

Rule 4402 does not define “intermittent” as used in Section 3.7
definition of Pit or place any limit on the amount of time oily water
can be kept in an emergency pit before it is cleaned up.  SLOCAPCD Rule
419 requires clean-up to begin within 24 hours and limits clean-up to 15
days and SBCAPCD Rule 344 limits use of pits to less than 30 days per
year. Lack of a time limit would allow uncontrolled emissions for an
unlimited amount of time. 

 Discussion of Rule 4402 Exemptions 

Rule 4402 includes a number of exemptions where requirements of the rule
do not apply. The following is a brief review and discussion of all the
exemptions listed in the rule.

Small producers and very small producers (4.1.1 & 4.1.3):

Exempts small producer (6000 barrels/day average over 2 years from all
operations within the county) 2nd and 3rd stage sumps that are less than
1000 sq. ft surface area and are only used for heavy crude oil. 

Also exempts very small producer (300 barrels/day average over 2 years
from all operations in the county and only 50 barrels/day per lease) 2nd
and 3rd stage sumps that are less than 5000 sq. ft. surface and that are
solely used for heavy crude oil. 

The only other California district rule found that exempts small
producer 2nd & 3rd stage sumps is SBCAPCD Rule 344 which exempts small
producers (less than 150 barrels/day average over 1 year) with no
restriction on surface area of sump or type of crude oil. 

SBCAPCD Rule 344 also exempts any 2nd or 3rd stage sump less than 1000
sq. ft surface area.

SLOCAPCD Rule 419 exempts pits, ponds, and sumps less than 100 sq. ft.
surface area.  

In the RACT Demonstration, SJVUAPCD estimates the cost effectiveness for
controlling the emissions from a 5000 sq. ft 2nd stage sump containing
heavy crude oil to be about $64,800 per ton of VOC reduced and that the
cost per ton would be even higher for 3rd Stage sumps.  The district
then concludes that due to economic infeasibility, they believe that
these exemptions for small and very small producers are still
appropriate. (See page 4-79 of SJVUAPCD RACT Demonstration for Ozone
SIP)

2nd and 3rd stage sumps used solely for clean produced water containing
less than 35 mg/l VOCs (4.1.2). 

SCAQMD, VCAPCD, and SLOCAPCD rules exempt sumps used for wastewater that
do not exceed 5 mg/l of VOCs.  

SJVUAPCD’s RACT analysis states that the emissions from clean produced
water are significantly less than heavy crude and the cost for
controlling emissions from these low emission sumps would be
significantly higher per ton of VOC reduced than for heavy crude oil
sumps.   Due to this higher cost, it would be economically infeasible to
control these emissions and therefore this exemption is appropriate. 

Any sump with estimated emissions of 0.007 lbs/sf-day or less as
established by ARB flux-box method (4.1.4).

Emissions of 0.007 lbs/sf-day is slightly lower than the uncontrolled
emissions factor for light crude from 3rd stage sumps (0.008
lbs/sf-day), and slightly higher than the emission factor for 3rd stage
sumps for heavy crude oil (0.005 lbs/sf-day). 

Therefore, it is likely that 3rd stage light crude oil sumps would not
be exempt, but 3rd stage heavy crude oil sumps could be exempt. We do
not know if this exemption is used by any crude oil producers at this
time. 

SJVUAPCD states in their RACT analysis that controlling emissions from
these low emission sumps would be economically infeasible as stated
above for sumps containing only clean produced water. 

No other California district rule was found to have a similar exemption.

Any sump used less than 7 days in one month and not more than 21 days
per year (4.1.5). 

No other districts were found to have a similar exemption.

Sumps at petroleum refineries (4.1.6)

Sumps located at petroleum refineries are exempt.

Rule 4402 is intended to control emissions from crude oil production
sumps and is not meant to address sumps at petroleum refineries. 

Pits or Ponds (4.1.7)

Pits by definition in Rule 4402 are used only intermittently or for
emergency collection of crude oil and water and not for oil water
separation. 

SBCAPCD exempts pits used for emergencies that are used less than 30
days per year and VCAPCD also exempts emergency pits.

SLOCAPCD exempts emergency pits if cleanup is implemented within 24
hours and is completed within 15 days. 

Ponds by definition in Rule 4402 are used only to store clean produced
water (less than 35 mg/l VOCs) and not used for separation of oil and
water. 

SCAQMD and other air districts set the limit for clean water at 5 mg/l
of VOCs.

We understand that many ponds in the San Joaquin Valley have been closed
under Regional Water Quality Control Board (RWQCB) order, but other
ponds continue to operate in the district. (See Attachment 5)

These ponds can cover many acres and handle a large volume of oily
wastewater (as much as a million gallons per day). For example, see
RWQCB Order No. R5-2002-0223, Waste Discharge Requirements for Valley
Waste Disposal Company, Broad Creak No. 2 Facility (Attachment 4). 
Emissions from these ponds are not included in SJVUAPCD’s current VOC
emissions estimate (2.6 ton/day) for crude oil sumps because they are
exempt. It is not known if the VOC emissions from the ponds are
significant or not. The ponds that initially receive wastewater from oil
production would have the highest VOC concentrations and are of
particular concern.  

Rule Evaluation

Enforceability and Anti-Backsliding

The amendments to this rule are largely administrative, do not
substantively change or relax requirements, but make the rule slightly
clearer and more consistent with other SJVUAPCD rules. The rule is
generally enforceable, although several test methods are outdated and/or
inappropriate. 

RACT

We concur with SJVUAPCD’s analysis that Rule 4402 imposes some
requirements that are similar to the requirements found in other
California district rules for controlling VOC emissions from crude oil
sumps. However, SJVUAPCD has not adequately demonstrated that Rule 4402
implements RACT in light of the more stringent requirements found in
these rules from other California air districts, some of which are in
attainment or are designated as moderate nonattainment for ozone.  

Rule Deficiencies 

The following deficiencies preclude full approval of Rule 4402 into the
SIP.

SJVUAPCD should strengthen these requirements to help implement RACT or
demonstrate why such improvements are not appropriate in light of
analogous requirements in neighboring districts.

Section 5.1.2 allows a 1 inch gap and does not require seals for rigid
floating covers.  In contrast, SCAQMD Rule 1176(e)(2)(B)(vi) and
SLOCAPCD Rule 419 D.2.e. require rigid floating covers to have seals,
the gap cannot exceed 1/8” for a cumulative length of 95% of the
perimeter, and no single gap may exceed ½ inch. 

Section 5.2.5 requires fixed covers to be equipped with a
pressure/vacuum valve set to within ten percent of maximum safe working
pressure.  In contrast, SCAQMD Rule 1176(2)(A)(ii) and (6)(A) and
SBCAPCD Rule 344 D.2.b.2 require that fixed covers be equipped with a
95% efficient Air Pollution Control (APC) device.  

Rule 4402 does not require periodic inspection of covers and APC
equipment to ensure proper operation.  In contrast, SCAQMD Rule
1176(f)(C) requires periodic leak inspection and APC testing. 

Rule 4402 has exemptions that are more broad than those found in other
district rules. SJVUAPCD should analyze whether these exemptions
continue to be appropriate. This analysis should consider more current
cost data than used in the 2009 RACT Analysis, and should consider
alternative disposal methods (e.g., underground injection, tanks, or
additional pretreatment) in addition to sump and pond covers. The
following exemptions are of  particular concern:

Uncontrolled VOC emissions from exempted 2nd and 3rd stage sumps.
Section 4.1.1 exempts operations less than 6000 barrels per day with
sumps less than 1000 sf and section 4.1.3 exempts operations less than
300 barrels per day with sumps less than 5000 sf from substantive
requirements.  No other neighboring districts allow exemptions for small
producers except for SBCAPCD Rule 344, which is more restrictive. 

Section 4.1.7 exempts ponds of “clean produced water” with less than
35 mg/l VOC from Rule 4402 requirements. In contrast, SCAQMD Rule
1176(i)(5)(J), VCAPCD Rule 71.4 C.1.c and SLOCAPCD Rule 419 C.4 exempt
wastewater sumps only where the VOC/ROC content does not exceed 5 mg/l
at the inlet. Of particular concern are VOC emissions from the ponds
that initially receive the oily wastewater from oil production
facilities. Alternatives including additional pretreatment to lower the
VOC content and other disposal methods such as underground injection
should be evaluated.

Rule 4402 does not limit the time that oil or oily water can be kept in
an emergency pit.  In contrast, SLOCAPCD Rule 419 C. 2 requires clean-up
to begin within 24 hours and finish within 15 days.  

Rule 4402 allows 1st stage sumps. In contrast, SBCAPCD Rule 344 and
VCAPCD Rule 71.4 do not allow the operation of 1st stage sumps.  

Provisions should be added in Rule 4402 or Rule 4623 (Storage of Organic
Liquids) that ensure that tanks used to replace the 1st stage crude oil
sumps have adequate VOC controls. We understand that many 1st stage
sumps have already been replaced with tanks; the district should ensure
that emission controls for all these tanks are adequate.

2.	The following revisions are needed to improve rule clarity and
enforceability consistent with CAA section 110(a).

Please remove the language at the end of Section 5.3 that states “If
replacement tank exclusively serves identical function of sump replaced,
permitting of such tank shall not be considered an emission change for
the purposes of Rule 2201 (New and Modified Source Review Rule)”.  Any
exemptions to NSR requirements should be evaluated in the context of
SJVUAPCD’s NSR program (e.g., Rule 2020) and incorporated within the
NSR program only if appropriate. Such exemptions should not be in source
specific prohibitory rules like Rule 4402. 

Revise section 6.2 Test Methods to remove and/or replace inappropriate
or outdated test methods such as 6.2.1 ARB Method 432, which is designed
for paints and coatings and not oily wastewater. We also recommend
adding EPA Test Method 21 in section 6.2 for determining leaks.   

Update the definition of clean product water (Section 3.1) replacing
outdated EPA Test Methods 4.13.2, 418.2 and 8240 that used CFC-113 as
the extraction solvent.  The new test methods using non-CFC extraction
solvents are EPA Method 1664A and EPA Method 8260. See guidance
documents referenced below.

Please revise section 6.1 (Recordkeeping) to:

Add requirement for facilities to keep records of all inspections for
leaks and testing of APC devices (for example, see SCAQMD Rule 1176 (g)
(1)). 

Add requirement to document use of emergency pits, including when use
started, clean-up started and clean-up finished. 

Require documentation justifying any exemptions claimed under section 4,
including 4.1.7, which exempts pits and ponds.  

Add requirements to verify the sump surface area and the annual
production rates for both the small producers and very small producers
in section 6.1.1. 

Add requirement to keep all records for at least two, and preferably
five years.

EPA Action 

The revisions to submitted Rule 4402 are largely administrative changes
that marginally improve the SIP, but the deficiencies discussed above
preclude full approval. As a result, EPA staff recommends a simultaneous
limited approval and limited disapproval of the August 24, 2007
submittal of SJVUAPCD Rule 4402 pursuant to section 110(k) of the CAA as
amended in 1990. If finalized as proposed, the rule deficiencies
identified above would trigger CAA Section 110(m) sanction and Section
110(c) federal implementation plan (FIP) obligations because the San
Joaquin Valley is an extreme nonattainment area for ozone and is
required to implement RACT. 

        

EPA Recommendations

The following revisions are not currently the basis for rule
disapproval, but are recommended as improvements when this rule is
amended.

We suggest deleting section 7.0 Compliance Schedule since it is no
longer applicable.

We suggest increasing the requirements for testing wastewater at each
inlet to the clean produced water ponds from annually to least quarterly
to ensure ongoing compliance with wastewater VOC limits.

Rule 4402 does not include controls for crude oil well cellars. We
suggest that SJVUAPCD evaluate whether to include requirements for
controlling emissions from crude oil well cellars in Rule 4402 or as a
separate rule. 

Guidance and Policy Documents

Guidance and policy documents that we used to help evaluate rules and
RACT requirements consistently include the following:

Portions of the proposed post-1987 ozone and carbon monoxide policy that
concern RACT, 52 FR 45044 (November 24, 1987).

Requirements for Preparation, Adoption, and Submittal of Implementation
Plans, U.S. EPA, 40 CFR part 51.

Addendum to the General Preamble for the Implementation of Title I of
the Clean Air Act Amendments of 1990, 59 FR 41998 (August 16, 1994).

Issues Relating to VOC Regulation Cutpoints, Deficiencies, and
Deviations, EPA (May 25, 1988).  [The Bluebook]

Guidance Document for Correcting Common VOC & Other Rule Deficiencies,
EPA Region 9 (August 21, 2001). [The Little Bluebook]

RACT Qs & As-Reasonably Available Control Technology (RACT): Questions
and Answers, EPA, William T. Harnett, May 18, 2006.

Clean Water Act Analytical Methods, Method 1664A, Oil and Grease 
HYPERLINK
"http://www.epa.gov/waterscience/methods/method/oil/oilfaq.html" \t
"_blank" http://www.epa.gov/waterscience/methods/method/oil/oilfaq.html 

Test Methods for Evaluating Solid Waste, Physical/Chemical Methods
(SW-846) Method 8260,  U.S. EPA.   HYPERLINK
"http://www.epa.gov/epawaste/hazard/testmethods/sw846/online/index.htm"
\t "_blank"
http://www.epa.gov/epawaste/hazard/testmethods/sw846/online/index.htm 

Attachments

Submitted SJVUAPCD rules plus applicable SIP SJVUAPCD rules.

2009 RACT SIP, SJVUAPCD (April 16, 2009).  [Cover plus sections relevant
to SJVUAPCD Rule 4402].

2007 Area Source Emissions Inventory Methodology: 310-Oil Production
Fugitive Losses, SJVUAPCD Rev. Date: 23 Jan 09.

Order No. R5-2002-0223, Waste Discharge Requirements for Valley Wastse
Disposal Company,, Broad Creek No. 2 Facility, Midway-Sunset & Buena
Vista Oil Fields, Kern County, California Regional Water Quality Control
Board, Central Valley Region.

Record of telephone conversation, between Joanne Wells, EPA, and Doug
Wachtell, RWQCB, 5/26/10.

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