BOARD MEETING DATE: June 1, 2007
AGENDA NO. 27

REPORT:

Implementation Status Report for 2006 for Rule 1118 – Control of Emissions from Refinery Flares

SYNOPSIS:

Rule 1118 was amended November 4, 2005. As part of the adopting resolution, staff was directed to study several issues and report back to the Board. This report reflects staff findings and recommendations on these issues.

COMMITTEE:

Stationary Source, May 25, 2007, Reviewed

RECOMMENDED ACTION:

Receive and file Implementation Status Report for 2006 for Rule 1118 – Control of Emissions from Refinery Flares.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In November 5, 2005, the Board amended Rule 1118 – Control of Emissions from Refinery Flares. The primary objective of the amended rule was to minimize flaring and reduce criteria pollutant emissions, such as SO_x, NO_x, VOC, PM10 and CO emissions from flares at petroleum refineries, sulfur recovery plants and hydrogen production plants. As major features, Rule 1118 prohibits flaring of vent gases except for those situations resulting from emergencies, shutdowns and startups, turnarounds and specific essential operational needs; establishes operational requirements and diagnostic practices to minimize flaring; and sets refinery specific annual SO₂ performance targets that decrease with time from 2006 to 2012 to ensure that emissions from flares are reduced on a permanent basis. Exceedance of the annual performance target by a subject facility would trigger mitigation fees and the submittal of a Flare Minimization Plan subject to public review and comment.

The rule also requires that emissions monitoring be enhanced by requiring installation of analyzers to measure the vent gas higher heating value and total sulfur concentration, and flow meters for purge and pilot gas. Until the analyzers are installed, daily samples are required unless there is no flare event. The amended rule also established uniform data substitution procedures and calculations for reporting emissions when flow meters are not operational, samples are not collected and analyzed, and during analyzer downtime periods.

Sources subject to Rule 1118 include refineries, sulfur recovery plants and hydrogen production plants operated by the following facilities:

Staff has worked diligently with the impacted industry and the environmental community and resolved most of the issues that were raised during the rule development process. However, there were a few issues that necessitated further study and the adopting Resolution directed staff to provide the Stationary Source Committee with periodic reports and report to the Governing Board on all issues by no later than April 2007. All action items due before this date were presented as required. Rule 1118 – Control of Emissions from Refinery Flares 2006 Implementation Status Report contains analyses, updates and recommendations for all Resolution items, which are summarized below.

Pilot Projects
Work with Western States Petroleum Association (WSPA) and other interested parties and conduct pilot programs to demonstrate the feasibility of total sulfur (TS) and higher heating value (HHV) analyzers for refinery flares.

Two refineries volunteered to participate in the pilot programs for the two analyzers. The BP refinery in Carson volunteered to conduct the pilot program for the TS analyzer, while the Chevron refinery in El Segundo volunteered to conduct the pilot program for the HHV analyzer.

The TS pilot project is in the final step prior to certification of the analyzer. Although several adjustments and redesign of sampling equipment were required; preliminary results have demonstrated the feasibility of measuring total sulfur emissions from vent gases directed to flares. Based on these results, two refineries have already placed purchase orders for their TS analyzers.

The HHV pilot project, although starting well after the TS project, is proceeding. Two different technologies are being studied side-by-side. Start-up of the analyzers was in March 2007, with final certification to be completed by the end of 2007.

Industry Performance
Provide an annual status report on industry performance and annual SO₂ performance targets exceedances and to develop air quality improvement projects to be funded by mitigation fees collected as a result of those exceedances.

None of the refineries exceeded their 2006 Annual SO₂ Performance Target. In fact, based on the SO₂ emissions reported for 2006 by the seven refineries, two refineries, BP and ExxonMobil would comply with their 2008 performance targets; three refineries, ConocoPhillips and Paramount would comply with their 2010 performance targets; and two refineries, Chevron and Equilon would comply with their 2012 performance targets.

Four refineries have submitted applications for permits to construct and operate a total 13.32 million standard cubic feet per day of new flare gas and recovery and treatment capacity to reduce vent gas flaring at those refineries; an increase of approximately 26 percent in recovery and treatment capacity. All of these projects will be completed by the end of 2009.

Evaluate the feasibility of a daily emission target and the appropriateness of the annual emission targets in the rule.
The annual performance targets developed during the rule amendment process were based on the quarterly emission reports submitted by the refineries starting with the year 2000. The emissions were measured and calculated based on manual “grab” samples taken during flare events. Rule 1118 requires refineries to install continuous and semi-continuous emissions monitoring systems (CEMs) by July 1, 2007; as previously discussed, additional time will be needed to fully implement this significantly enhanced monitoring requirement.

Although the flare event grab sampling method in conjunction with additional daily grab samples has been used with a reasonable success to determine flaring emissions from refineries (it was the best technology/technique at the time), it remains to be seen whether future use of CEMs with measurements taken every 15 minutes will yield reasonably comparable emissions results. Flare events and resultant emissions have been reduced and will continue to be reduced in future years as the refineries modify and install flare gas recovery and treatment equipment; numerous applications for permits to construct and operate have been submitted to the AQMD since 2006 with projected installation dates for most equipment by the end of 2009.

Therefore, staff recommends that a daily limit and the lowering of the annual performance target should not be pursued at this time until sufficient emissions data obtained through the use CEMs are collected and analyzed.

Review the definition of Essential Operational Need (EON) and its use by refineries.
Staff has determined that the use of EON was reasonable given the particular conditions for each refinery. In 2006, companies subject to Rule 1118 reported a use of EON that amounted to 8 percent of the total flow, 8.6 percent of the total VOC, 25.6 percent of the total NOx and 7.4 percent of the total SO₂. Staff noticed that, in some cases, refineries reported flaring events as EONs in error for events that should have been reported under a different category and clarifications will be given to facilities to correctly report flaring events. In addition, the modification and installation of flare gas recovery and treatment equipment by 2009 (and in subsequent years) will also result in a reduction in the use of EON in future years. Based on the use of EON in 2006 and anticipated improvements to the flare systems in the near future, the definition of EON appears to be appropriate.

Therefore, staff does not recommend any changes in the definition of EON at this time. Staff will continue to monitor the use of EON in future years and report back to the appropriate Board committees.

Evaluate the use of data substitution procedure by industry for reporting emissions during the first year following rule amendment.
The use of data substitution in 2006 was minimal. It was used to calculate vent gas flow and associated flare emissions for 65 flare events when the flow meter(s) did not accurately measure vent gas flow and data substitution was used to estimate flare emissions for 594 instances when the facility operator failed to collect a required sample or that sample was not fully analyzed as required by Rule 1118. There were a total of 15,905 flare events reported for 2006. Data substitution accounted for approximately six percent of the total vent gas flow, 38 percent of the total SOx and nine percent of the total VOC emissions reported to the AQMD in 2006 for Rule 1118.

Corrective measures have been taken to reduce the likelihood of potential future flow meter failure resulting from low molecular weight vent gas. Currently, operators collect vent gas samples through a “grab” sampling method; the use of continuous TS and HHV analyzer in the near future will greatly enhance sample collection and analysis. Although breakdown of analyzer(s) may occur, staff believes the need to use data substitution to report flare emissions will be greatly reduced as these analyzers are brought online. Staff will continue to monitor the use of data substitution in the future and will report back to the appropriate Board committees as needed. Staff does not recommend any revisions to the data substitution requirements in Rule 1118 at this time.

Evaluation of Uninterruptible Power
Evaluate the feasibility of uninterruptible power to minimize flaring.
Staff has investigated several technologies to generate electricity at a refinery, including diesel generators, fuel cells and cogeneration units, with the most promising being the use of cogeneration. Staff has determined that six of nine refinery-related facilities operate cogeneration units that produce approximately the same or in excess of the refineries’ electric power requirements. Yet all of these refineries still experience power surges that make them susceptible to upsets that may result in the need to flare. A third party contractor expertise is needed to conduct a more detailed feasibility analysis. Staff will further discuss this issue with the Board’s Stationary Source Committee prior to proceeding with this next phase of the analysis in power engineering as it relates to refinery applications.

Community Notification Procedures
Work with industry, community members and regulatory agencies on community notification procedures for flare events.
Staff updated the Governing Board on the efforts to develop and implement an enhanced public notification procedure for flare events on December 1, 2006.

Staff convened Flare Event Notification Working Group meetings in which stakeholders explored options and made recommendations about developing and implementing appropriate public notification procedures for flare events.

Staff also developed a public notification website designed to send e-mail messages about planned and unplanned flare events to list serve subscribers upon the agency’s receipt of flare event notifications from refineries and related facilities. The website also provides access to flare emissions data reported quarterly by refineries to AQMD, as well as other information about flaring and flare events. With input from stakeholders, the website design has been enhanced to ensure a user-friendly interface.

Staff is proceeding to:

1. Issue an RFP not to exceed $10,000 to design a survey of representative South Bay residents as the basis for developing a sub-regional flare event notification system;
2. Develop a specific work plan to improve existing sub-regional notification systems through local Community Awareness and Emergency Response (CAER) first-responder groups;
3. Maintain monitoring and sampling equipment at the AQMD Long Beach field office for timely dispatch on demand;
4. Complete a comprehensive staff report of Working Group findings, survey results, and recommended sub-regional public notification system;
5. Convene the Working Group quarterly to review progress; and
6. Report milestones semi-annually to the Board.

BAAQMD Flare Rule 12-12
Evaluate Bay Area Air Quality Management District’s (BAAQMD) Rule 12-12 (Flares at Petroleum Refineries) requirements for installation of controls.
BAAQMD adopted Rule 12-12 – Flares at Petroleum Refineries on July 20, 2005 with the purpose of reducing emissions from flares at petroleum refineries by minimizing the magnitude and the number of flaring events from flares. Subject facilities were required to file Flare Minimization Plans with the BAAQMD by August 1, 2006, documenting how they would comply with the rule requirements. BAAQMD is still in the process of evaluating the Flare Minimization Plans submitted by the refineries in the Bay Area and no information was yet available on the flare controls installed as a direct result of Rule 12-12.

Staff will continue to inquire with the BAAQMD and present its findings to the Board as part of its future reports.

Conclusions

The year 2006 has been a year of accomplishment and learning in the implementation of Rule 1118. Flaring and related emission continue to trend downward for most facilities; a couple of facilities experienced an increase in flaring well above levels of the last several years largely due to emergencies attributed to the breakdown of certain critical process components. Staff expects the downtrend of flaring to continue as flare gas recovery and treatment equipment is installed and operated.

Attachment (EXE 39.5mb)

Implementation Status Report for 2006 for Rule 1118 – Control of Emissions from Refinery Flares