2010-33194. Revisions to the California State Implementation Plan, San Joaquin Valley Air Pollution Control District (SJVUAPCD)

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing a limited approval and limited disapproval of revisions to the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) portion of the California State Implementation Plan (SIP). These revisions concern volatile organic compound (VOC) emissions from crude oil production operations and refineries. We are proposing action on local rules that regulate these emission sources under the Clean Air Act as amended in 1990 (CAA or the Act). We are taking comments on this proposal and plan to follow with a final action.

DATES:

Any comments must arrive by February 3, 2011.

ADDRESSES:

Submit comments, identified by docket number EPA-R09-OAR-2010-0907, by one of the following methods:

1. Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions.

2. E-mail: [e-mail].

3. Mail or Deliver: Andrew Steckel (Air-4), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.

Instructions: All comments will be included in the public docket without change and may be made available online at http://www.regulations.gov,, including any personal information provided, unless the comment includes Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through http://www.regulations.gov or e-mail. http://www.regulations.gov is an “anonymous access” system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send e-mail directly to EPA, your e-mail address will be automatically captured and included as part of the public comment. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.

Docket: The index to the docket for this action is available electronically at http://www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT:

Joanne Wells, EPA Region IX, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

Throughout this document, “we,” “us” and “our” refer to EPA.

Table of Contents

I. The State's Submittal

A. What rules did the State submit?

B. Are there other versions of these rules?

C. What is the purpose of the submitted rules and rule revisions?

II. EPA's Evaluation and Action

A. How is EPA evaluating the rules?

B. Do the rules meet the evaluation criteria?

C. What are the rule deficiencies?

D. EPA Recommendations To Further Improve the Rules

E. Proposed Action and Public Comment

III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What rules did the State submit?

Table 1 lists the rules addressed by this proposal with the date that they were amended by the local air agency and submitted by the California Air Resources Board (CARB).

Table 1—Submitted Rules

Local agency	Rule No.	Rule title	Amended	Submitted
SJVUAPCD	4402	Crude Oil Production Sumps	12/17/92	08/24/07
SJVUAPCD	4625	Wastewater Separators	12/17/92	08/24/07

On September 17, 2007, the submittal for San Joaquin Valley Unified Air Pollution Control District Rules 4402 and 4625 was found to meet the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

B. Are there other versions of this rule?

On December 13, 1994 (59 FR 64132), EPA approved into the SIP a previous version of Rule 4402, SJVUAPCD Rule 465.2. On May 13, 1993 (58 FR 28354), EPA approved into the SIP a previous version of Rule 4625, SJVUAPCD Rule 463.4. CARB has not submitted any subsequent versions of these rules for our consideration besides those submitted on August 24, 2007.

C. What is the purpose of the submitted rules and rule revisions?

VOCs help produce ground-level ozone and smog, which harm human health and the environment. Section 110(a) of the CAA requires States to submit regulations that control VOC emissions. These rules were developed as part of the local district's program to control VOCs.

The purpose of the rules and the rule revisions are as follows:

• Rule 4402, Crude Oil Production Sumps, is designed to limit VOC emissions from crude oil production sumps. The rule is renumbered and the format updated. The rule purpose is added and the definition of VOC deleted. The exemptions for sumps at petroleum refineries, pits and ponds have been moved from Section I (Applicability) to Section 4.0 (Exemptions).
• Rule 4625, Wastewater Separators, is designed to limit VOC emissions from oil-water separators by requiring covers and use of vapor loss control devices. The rule is renumbered and the format updated. The rule purpose is added and the definition of VOC deleted. Paragraph 4.3 was added, which allows an exemption from the BACT and offset requirements of Rule 2201 for existing facilities where an incineration device has been added for the sole purpose of complying with the requirements of this rule.

EPA's technical support document (TSD) for each rule has more information about these rules and the rule revisions.

II. EPA's Evaluation and Action

A. How is EPA evaluating the rule?

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for each category of sources covered by a Control Techniques Guidelines (CTG) document as well as each major source in nonattainment areas (see sections 182(a)(2) and (b)(2)), and must not relax existing requirements (see sections 110(l) and 193). The SJVUAPCD regulates an extreme ozone nonattainment area (see 40 CFR part 81), so Rules 4402 and 4625 must fulfill RACT.

Guidance and policy documents that we use to evaluate enforceability and RACT requirements consistently include the following:

1. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook).

2. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

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

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

5. “RACT Qs & As-Reasonably Available Control Technology (RACT): Questions and Answers”, EPA, _William T. Harnett, May 18, 2006. http://www.epa.gov/​ttn/​oarpg/​t1/​memoranda/​ractqanda.pdf.

6. “Clean Water Act Analytical Methods”, U.S. EPA. http://www.epa.gov/​waterscience/​methods/​method/​oil/​oilfaq.html.

7. “Test Methods for Evaluating Solid Waste, Physical/Chemical Methods (SW-846)”, U.S. EPA. http://www.epa.gov/​epawaste/​hazard/​testmethods/​sw846/​online/​index.htm.

8. “Control of Refinery Vacuum Producing Systems, Water Separators and Process Units”, EPA-450/2-77-025, October 1977.

9. “Standards of Performance for VOC Emissions from Petroleum Refinery Wastewater Systems”, 40 CFR part 60 subpart QQQ, November 23, 1988 (53 FR 47623).

10. “National Emission Standards for Oil-Water Separators and Organic-Water Separators”, 40 CFR part 63 subpart VV, July 1, 1996 (61 FR 34195).

B. Do these rules meet the evaluation criteria?

Both submitted Rules 4402 and 4625 clarify and marginally improve the SIP with revisions that are largely administrative. These rules are generally consistent with the relevant policy and guidance regarding enforceability and SIP relaxations. Rule provisions which do not meet the evaluation criteria are summarized below for each rule and discussed further in the TSD.

C. What are the rule deficiencies?

These provisions conflict with section 110 and part D of the Act and prevent full approval of the SIP revision. Rule 4402, Crude Oil Production Sumps:

1. 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.

a. 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 1/2 inch.

b. 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.

c. 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.

d. Rule 4402 has exemptions that are more broad than those found in other districts 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 6,000 barrels per day with sumps less than 1,000 sf and section 4.1.3 exempts operations less than 300 barrels per day with sumps less than 5,000 sf from substantive requirements. No other neighboring districts allow exemptions for small producers except for SBCAPCD Rule 344. The exemption in Santa Barbara's rule is more restrictive than the exemptions found in Rule 4402.
• 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.

e. 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.

f. 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.

g. 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.

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

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 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.

b. 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.

c. 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.

d. 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.

Rule 4625, Wastewater Separators:

The following revisions are needed to improve rule clarity, enforceability, and to strengthen requirements to help implement RACT.

1. The December 1992 amendment added exemption 4.3, which reads “For existing facilities, if an incineration device is added or modified for the sole purpose of complying with the requirements of this rule, such a device shall be exempt from the Best Available Control Technology and the Offset requirements of Rule 2201 (New and Modified Stationary Source Review Rule)”. This exemption should be removed from Rule 4625. Any exemptions to NSR requirements should be evaluated in 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 4625.

2. Although Rule 4625 includes similar requirements to the 1977 CTG, SJVUAPCD has not adequately demonstrated that Rule 4625 currently implements RACT because RACT can change over time as control technology improves and/or becomes more available. More stringent requirements exist in the NSPS (1988), NESHAP (1995), BAAQMD Rule 8-8 (1993) and SCAQMD 1176 (1996). These regulations have requirements for stricter VOC controls (see, e.g., 95% requirement in SCAQMD Rule 1176, section (e)(2)(A)(ii) and (e)(6)), additional design requirements for controlling fugitive emissions or breathing losses (see, e.g., BAAQMD Regulation 8 Rule 8, section 302.4), and additional requirements for inspections and maintenance (see, e.g., BAAQMD Regulation 8 Rule 8, section 302.4 and 302.6).

3. The exemption for air flotation units precludes regulation of potentially significant VOC sources (section 4.2). Even though these sources are currently regulated via District permit conditions, SJVUAPCD should subject them to SIP requirements as part of Rule 4625 or demonstrate why that is not necessary. There is no specific allowance in the CTG or other guidance documents for exempting air flotation units from regulation and no other California air district rules include such an exemption.

4. To improve enforceability, SJVUAPCD should revise section 6.0 Test Methods to remove inappropriate or outdated test methods such as 6.1.2 ARB Method 432 for paints and coatings, and 6.1.3 which refers to an obsolete document superseded by EPA Method 204 for determining capture efficiency (40 CFR part 51). We recommend including EPA Test Method 21 (measurements of leaks) as referenced in SJVUAPCD Rule 4455, Section 6.4 Test Methods, or SCAQMD Rule 1176, Section (h).

5. The SJVUAPCD 2009 RACT SIP Demonstration mentions that the requirements in SJVUAPCD Rule 4455, “Components at Petroleum Refineries, Gas Liquids Processing Facilities and Chemical Plants”, apply to oil-water separators. SJVUAPCD should include those requirements directly in Rule 4625 or by reference to improve enforceability, or demonstrate that this is not appropriate.

6. To ensure ongoing compliance and strengthen enforceability, SJVUACPD should add to the rule requirements for inspections of covers, access hatches and other openings and emissions control equipment, along with recordkeeping requirements for inspections and testing or demonstrate that this is not appropriate. For example, please see SCAQMD Rule 1176, section (f) and (g).

7. SJVUAPCD should delete or justify exemption 4.1 for wastewater separators exceeding a set value for a sump surface area to the rate of oil vapor loss ratio. The only other rule where we found such exemption is SCAQMD Rule 464 for Wastewater Separators; last amended December 7, 1990. This exemption is not found in the newer SCAQMD Rule 1176, “VOC Emissions from Wastewater Systems”, amended September 13, 1996, which also addresses wastewater separators and which largely supersedes Rule 464.

D. EPA recommendations to further improve these rules.

The TSD for each of these rules describes additional rule revisions that we recommend for the next time the local agency modifies these rules.

E. Proposed Action and Public Comment

As authorized in sections 110(k)(3) and 301(a) of the Act, EPA is proposing a limited approval of the submitted rules to improve the SIP. If finalized, this action would incorporate the submitted rules into the SIP, including those provisions identified as deficient. This approval is limited because EPA is simultaneously proposing a limited disapproval of the rule under section 110(k)(3). If this disapproval is finalized, sanctions will be imposed under section 179 of the Act unless EPA approves subsequent SIP revisions that correct the rule deficiencies within 18 months of the disapproval. These sanctions would be imposed according to 40 CFR 52.31. A final disapproval would also trigger the 2-year clock for the federal implementation plan (FIP) requirement under section 110(c). Note that the submitted rules have been adopted by the SJVUAPCD, and EPA's final limited disapproval would not prevent the local agency from enforcing them.

We will accept comments from the public on the proposed limited approval and limited disapproval for the next 30 days.

III. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

B. Paperwork Reduction Act

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because SIP approvals or disapprovals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve or disapprove requirements that the State is already imposing. Therefore, because the proposed Federal SIP limited approval/limited disapproval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of state action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a) (2).

D. Unfunded Mandates Reform Act

Under sections 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate; or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the limited approval/limited disapproval action proposed does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action proposes to approve and disapprove pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

E. Executive Order 13132, Federalism

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely proposes to approve or disapprove a State rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This proposed rule does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not apply to this rule.

EPA specifically solicits additional comment on this proposed rule from tribal officials.

G. Executive Order 13045, Protection of Children From Environmental Health Risks and Safety Risks

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045, because it approves a state rule implementing a Federal standard.

H. Executive Order 13211, Actions That Significantly Affect Energy Supply, Distribution, or Use

This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Population

Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes Federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

EPA lacks the discretionary authority to address environmental justice in this rulemaking.

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Intergovernmental relations
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compounds

Authority: 2 U.S.C. 7401 et seq.

Dated: December 14, 2010.

Jared Blumenfeld,

Regional Administrator, Region IX.