BOARD MEETING DATE: April 21, 2000 AGENDA NO. 29
Amend Rule 461 – Gasoline Transfer and Dispensing
SYNOPSIS:
Proposed Amended Rule 461 will further reduce emissions of VOC and toxic compounds from gasoline dispensing facilities and improve compliance. The proposed amendments will improve the reliability and performance of vapor recovery equipment by requiring more frequent testing and enhancing the accountability of contractors who install, maintain, or test the equipment at the gas stations. The proposed amendments will also improve rule clarity and enforceability. The proposal implements Control Measure RFL-02 of the 1999 AQMP Amendment and is one of the key control strategies of the Air Toxics Control Plan.
COMMITTEE:
Stationary Source, February 25, 2000, Reviewed
RECOMMENDED ACTION:
Adopt the attached resolution:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
There are approximately 3700 retail gasoline dispensing facilities (GDFs) and 1900 non-retail GDFs in the district, dispensing about 6 billion gallons per year. Retail GDFs dispense over 95% of this throughput. GDFs in the District are required to be equipped with vapor recovery systems that are approved by California Air Resources Board (CARB) as capable of reducing the vapor emissions by at least 95 %. Without the use of such vapor recovery systems, the vapor emissions are estimated at 170 tons per day. As such, Rule 461 is one of the most significant control strategies for VOC emissions in the District.
Since 1996, the AQMD and CARB have conducted several audits to assess the effectiveness of the vapor recovery systems. A recent AQMD audit conducted in 1997 indicated that only 10 % of the inspected GDFs were in compliance with the rule requirements. This compliance level is significantly lower when compared to the result of the 1987 CARB audit (93.1 % compliance). The VOC emissions from the systems were estimated to be as high as 18.9 tons per day. The findings from the most recent audit conducted in 1999 that focused on actual testing of the vapor recovery equipment corroborate the poor compliance rates indicated by previous audits that mainly relied on visual observations, but showed some improvement.
In response to these audit findings and concerns raised by many air districts, CARB has embarked on developing its "enhanced vapor recovery program," which encompasses new specifications for performance standards and certification. The proposal was adopted on March 23, 2000. While CARB’s enhanced vapor recovery program provides significant long-term improvement, it doesn’t provide a near-term fix for existing excess emissions. PAR 461 is intended to address problems with existing systems and also ensure that the efficacy of the CARB’s proposed program is maintained in the future.
Proposal
The proposed amendments are designed to significantly improve rule compliance and effectiveness, and further reduce VOC and benzene emissions from gasoline transfer and dispensing operations. The proposed amendments are comprised of the following:
The emission reductions that are claimed towards SIP commitment are estimated at 6.2 tons of VOC per day. Nevertheless, the proposed amendments are also expected to reestablish the foregone emission reductions by significantly increasing the control efficiency and compliance levels. Collectively, PAR 461 has the potential to reduce VOC emissions by as much as 27.3 tons per day. PAR 461 is estimated to reduce 197 pounds of benzene emissions per day. This is equivalent to approximately 52 % reduction in benzene from its current levels.
Based on the projected VOC emission reductions, the cost-effectiveness of PAR 461 is estimated at $781 per ton of VOC reduced. The potential cost impact to consumer is estimated at 0.0016 dollars per gallon of gasoline.
Air Toxic Control Plan
PAR 461 implements the control strategy of the 2000 Air Toxic Control Plan relevant to GDFs. The proposed amendments are anticipated to control benzene emissions from GDFs such that the inventory requirements of Rule 1402 – Control of Toxic Air Contaminants from Existing Sources, would not be necessary. Staff will perform a technical assessment by 2005, to determine the effectiveness of PAR 461 in meeting the goals of Rule 1402, assess the state of technology and the potential for further reductions in emissions and health risk and report its findings to the Board.
Policy Issues
Owners of GDFs have commented that the staff’s proposal of increased testing requirements would place a disproportionate financial burden on them and not on any other party, and equipment reliability issues are not being addressed. Furthermore, they have commented that limiting testing during only AQMD business hours as being too restrictive.
Staff has acknowledged that all parties involved in the vapor recovery business have contributed to the poor compliance rates registered in recent years and disagrees that the burden is being placed on the owners alone. The proposed increased testing requirements simply respond to the chronic poor maintenance problem of the vapor recovery systems revealed by the audits as well as to the reality that many defects that have emissions implications can only be identified with actual testing. However, staff’s proposal also includes provisions that would enhance the accountability of the installers, repairers, testers and other service providers.
Staff acknowledges that equipment reliability cannot be ignored and is committed to work with CARB, the responsible agency for equipment certifications, and industry to alleviate short- and long- term reliability issues. In addition, staff has also revised the proposal to allow testing during non-regular AQMD business hours.
AQMP and Legal Mandates
The California Health and Safety Code requires the AQMD to adopt an Air Quality Management Plan (AQMP) to meet state and federal ambient air standards in the Basin. In addition, the California Health and Safety Code requires that the AQMD adopt rules and regulations that carry out the objectives of the AQMP. The proposed rule amendment implements the control measure CM#99 RFL-02 (P2) of the 1999 Amendment to the 1997 AQMP.
CEQA & Socioeconomic Analysis
Pursuant to the California Environmental Quality Act (CEQA) and the AQMD’s Certified Regulatory Program (Rule 110), staff has prepared an Environmental Assessment (EA) for PAR 461. The Draft EA, which was made available for a 30-day review period, concluded that PAR 461 would not have any significant adverse affect on the environment. No comments were received on the Draft EA. The Final EA is included as part of the attached package for the public hearing on the proposed amendments.
The total cost from implementing the proposed amendments is estimated to be $9.6 million annually. The retail value of the gasoline vapors that will be recovered (27 tons per day) as a result of this amendment is expected to offset more than one half of these costs. The gasoline service stations sector (SIC 5541) would experience 73 percent of the total cost. From 2000 to 2015, it is estimated that an average of 32 jobs would be foregone annually. This includes an average of approximately 88 jobs foregone annually in the retail trade sector (including gasoline stations) and 155 jobs created in the professional service sector. These estimated impacts are within the uncertainty of the modeling analysis. There would be very few impacts of the proposed amendments on consumer price indices.
Implementation Plan
The proposed rule will affect all gasoline transfer and dispensing facilities. Staff has been working with these affected facilities and will continue to be available should a need for assistance arise during implementation.
Resource Impacts
When fully implemented, PAR 461 is expected to increase the workload for compliance staff. In addition, telecommunication equipment, computer programs, and professional services for testing may also be needed to better manage the anticipated activities.
As discussed in more detail in the staff report, the increased workload will include handling the required notifications, inspecting underground equipment after installation, witnessing a statistically significant number of the tests, reviewing and managing the test reports, and taking the proper enforcement actions against violators. It is estimated that seven additional staff in the compliance section will be necessary to handle the increased workload. Additionally, the proposed amendments may impact the workload of the Chief Prosecutors Office. Furthermore, additional inspectors may be necessary to improve inspection frequencies.
PAR 461 will significantly increase the number of notifications and test reports received at the AQMD. In order to properly and expeditiously manage the increased inflow of information and effectively assign appropriate personnel for follow-ups, the AQMD, to the extent feasible, should invest and rely on automated systems to ensure the successful implementation of the proposed amendments. In addition, staff plans to continue the use of contracted testing firms to perform tests as a means of auditing the tests conducted by the GDFs.
A. Summary of Proposed Rule
B. Rule Development Process
C. Key Contacts
D. Resolution
E. Rule Language
F. Staff Report
G. Environmental Assessment
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