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PROPOSAL:

Adopt Rule 1189 - Emissions from Hydrogen Plant Process Vents

SYNOPSIS:

Proposed Rule would reduce VOC emissions from plants that produce hydrogen for refineries. It would establish emission limits to reduce emissions from existing hydrogen plants in two phases, and a more stringent limit for new or reconstructed hydrogen plants.

 COMMITTEE:

Stationary Source, November 19, 1999, Reviewed

RECOMMENDED ACTION:

Adopt the attached resolution:

1. Certifying the CEQA Final Environmental Assessment for
   Proposed Rule 1189 - Emissions form Hydrogen Plant Process Vents;
   
   
2. Adopting Rule 1189 - Emissions from Hydrogen Plant Process Vents

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Proposed Rule 1189 - Emissions from Hydrogen Plant Process Vents, has been developed to reduce VOC emissions, including methanol and non-methanol VOCs, from plants that produce hydrogen for use in refineries. Currently, there are no source specific rules that regulate VOC emissions from hydrogen plant process vents.

Fourteen (14) hydrogen plants located at nine (9) different sites will be affected by this rule. The majority of these hydrogen plants are located at refineries where they provide petroleum refining processes with hydrogen for the production of gasoline and other fuels from crude oil. Hydrogen is used to remove or reduce undesirable elements such as sulfur, nitrogen, halides and aromatics in order to meet product specifications, including the reformulated gasoline regulations. In cases where plants are not part of a refinery, the hydrogen plants are constructed and operated by third parties and hydrogen is pipelined to various refineries.

In 1998, USEPA specifically exempted emissions from hydrogen plant process vents from federal regulations promulgated in 1995 to reduce toxic emissions from refineries. However, a District audit of emissions information submitted as part of the Annual Emissions Reporting Program revealed that the emissions inventory from this source category was significant. Staff's subsequent preliminary assessment of available control technology, concluded that control of these emissions was feasible. These actions led to a recommendation for a new rule in the January 1999 Rule Forecast Report, and subsequently, a new control measure (#99 FUG-06) for inclusion in the 1999 Amendment to the 1997 AQMP. The proposed rule would implement this new control measure.

Proposal

The proposed rule establishes emission limits for existing hydrogen plants to be achieved in two phases and a more stringent emission limit for new and reconstructed facilities. More specifically, the proposed rule would require plant operators to:

• Perform initial source tests by July 1, 2000, to determine the emissions baseline;
  
  
• In Phase I, effective July 1, 2001, demonstrate compliance for all existing plants with one of the three options: (1) reduce total VOC emissions from all process vents of an existing hydrogen plant combined to 2.5 pounds per million standard cubic feet of hydrogen produced, or (2) reduce total VOC content in the process condensate by at least 80 percent from baseline levels, or (3) install low-methanol catalyst in low-temperature shift reactors;
  
  
• In Phase II, effective January 1, 2003, limit total VOC emissions from all process vents of an existing hydrogen plant combined to 2.5 pounds per million cubic feet of hydrogen produced. An alternative compliance date of July 1, 2003, is provided for those who must install retrofit control equipment and have submitted applications for permits to construct as of January 1, 2003;
  
  
• Limit VOC emissions from process vents of new and reconstructed hydrogen plants to 0.5 pounds per million cubic feet of hydrogen produced upon startup; and
  
  
• Require operators of all affected facilities to perform annual compliance testing and reporting, except that those who choose to comply with Option (3) in Phase I shall conduct testing semi-annually until complying with the Phase II requirements.

In addition, staff has developed a new test protocol to determine VOC emissions from hydrogen plant process vents. The test protocol is developed based on AQMD standard test methods and is included in the proposed rule as an attachment.

The emissions inventory from this source category is estimated at 721 tons of VOC per year. Staff evaluated the state of currently available technology and has determined that these emissions can be reduced by approximately 80 percent or 580 tons per year. The cost effectiveness of the proposed rule is estimated at $3,900 per ton of VOC reduced.

Policy Issues

As indicated in the proposed rule for the set hearing package, staff initially intended to provide two compliance options for Phase I of the rule. However, further staff review revealed that the approach would put facilities that have already installed low-methanol catalyst at a disadvantage. Therefore, staff has revised the proposed rule to incorporate a third compliance option for Phase I. Phase II requirements remain unchanged.

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 implements the control measure CM#99FUG-06 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 proposed Rule 1189. The Draft EA, which was made available for a 30-day review period, concluded that proposed Rule 1189 would not have any significant adverse affect on 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 compliance cost from implementing the proposed rule is estimated to be an annual average of $1.86 million from 2001 to 2015. On average, between 2001 and 2015, a total of 22 jobs could be created annually as a result of the proposed rule. Out of these additional jobs, about 10 jobs could be created in the miscellaneous professional services sector (SIC 81, 87, 89) because of the testing requirement. The construction sector (SICs 15-17) could add 11 jobs as a result of expenditures on control equipment and maintenance operations.

Implementation Plan

The proposed rule will affect some of the major refineries and chemical plants. Staff has been working with these affected facilities and will continue to be available should a need for assistance arise during implementation.

Resource Impacts

Implementation of the proposed rule is not expected to have an impact on AQMD fiscal resources. It will, however, increase staff's workload in making compliance determinations and issuing permits for new or modified hydrogen plants. The workload increase is expected to be minor and no additional staff will be needed.

Attachments

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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