BOARD MEETING DATE: March 2, 2007
AGENDA NO. 3

Execute Contract to Demonstrate Feasibility of Refinery Fenceline Monitoring

SYNOPSIS:

In September 2006, the Board approved the release of an RFP in the amount of $500,000 for a pilot demonstration of air monitoring at refinery fencelines with funding from Rule 1173 mitigation fees and the BP/ARCO settlement.  Five proposals were received and evaluated.  This action is to execute a contract for an amount not to exceed $464,400 for the refinery fenceline monitoring pilot program and to set aside the remaining $35,600 for a demonstration of open-path particulate monitoring at the fenceline.    

COMMITTEE:

Technology, February 23, 2007, Recommended for Approval

RECOMMENDED ACTIONS:

1. Transfer $150,000 from the BP/ARCO Settlement Fund #46 to the Rule 1173 Mitigation Fee Special Revenue Fund #44.
    
2. Authorize the Chairman to execute a contract with Terra Air Services to conduct a demonstration refinery fenceline monitoring pilot program for an amount not to exceed $464,400 from the Rule 1173 Mitigation Fee Special Revenue Fund #44.
    
3. Transfer $35,600 from the Rule 1173 Mitigation Fee funds to the General Fund, and appropriate that amount to Science and Technology Advancement FY2006-07 Budget, Professional and Special Services Account, for the demonstration of open-path particulate monitoring at the fenceline of refineries.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In December 2002, the Board approved amendments to Rule 1173 – Control of VOC Leaks and Releases from Components at Petroleum Facilities and Chemical Plants, which included an alternate compliance provision allowing the payment of a mitigation fee in lieu of connecting the pressure relief device (PRD) to a vapor recovery/control system.  Facilities subject to Rule 1173 may elect to pay a mitigation fee of $350,000 for each release of VOC from any PRD exceeding the thresholds specified in the rule.  In September 2003, the Board created a special revenue fund for the Rule 1173 mitigation fees collected, to track projects funded through these fees. 

Approximately $1.4 million in mitigation fees has been collected as a result of four release events that occurred at two refineries.  On April 7, 2006, the Board set aside the $1.4 million for a fenceline monitoring project at refineries and a pilot study of classroom air purifier systems at three elementary schools.  Staff was also directed by the Board to prepare RFPs for these projects.  In addition, at its April 7, 2006 meeting, the Board approved a set-aside of $150,000 from the BP/ARCO Settlement Funds to demonstrate remote sensing capabilities of emissions from stationary sources.

On September 8, 2006, RFP #P2007-06 was released for the pilot refinery fenceline monitoring program in the amount of $500,000.  The intent of this program is to demonstrate the effectiveness of remote sensing technology for monitoring emissions from refineries and provide real-time alerts to downwind schools and communities.  The RFP solicited proposals from potential qualified contractors with strong technical expertise and experience in designing, installing and operating such remote sensing systems for fence-line applications.  The RFP closed on November 9, 2006.

Proposal

Five proposals were received in response to RFP #P2007-06 and reviewed by the evaluation panel.  The evaluation panel for this pilot program was established with particular consideration for each member’s knowledge and experience with open-path monitoring systems and refinery emissions.  The panel consisted of an AQMD manager in Engineering & Compliance, an AQMD Supervisor in Atmospheric Measurements, former AQMD Atmospheric Measurements Manager, and a California Air Resources Board Specialist in the Research Division.  Of the four panelists, three were Asian/Pacific Islander, one was Caucasian, and all four were male.  Additional information was requested from one of the bidders on pricing options that included both  ultraviolet differential optical absorption spectroscopy (UV-DOAS) and Fourier Transform Infrared (FTIR) technologies in order to compare similar scopes of work across bidders.

Based on the results of the evaluation, two proposals received technical scores above the minimum points needed to qualify for an award. The following table shows the average scores of the evaluation panel.

*      A proposal must receive at least 56 out of the 70 points allocated for technical criteria in order to
         be deemed qualified for award.

The evaluation panel found that Kassay Field Services and Terra Air Services are technically capable of successfully completing the project.  Both companies provided scope of work and pricing options based on the types of equipment deployed.  The pricing option considered for both companies was the deployment of both UV-DOAS and FTIR open path systems.  When the project cost was considered, Terra Air Services received the highest overall score.

The fenceline monitoring approach proposed by Terra Air Services includes deployment of UV-DOAS and FTIR open path technologies as well as a meteorological station.  Pollutant measurement capabilities include SO2, NO2, NO, ozone, benzene, toluene, ethyl benzene, xylenes, styrene, phenol, formaldehyde, ammonia, acrolein, mercury, acetaldehyde, hydrogen chloride, carbon disulfide, hydrogen cyanide, ethane, propane, and phosgene, among others.  The proposal also includes site set-up and infrastructure, as well as travel and training costs.  Terra Air Services has directly related refinery fenceline monitoring experience having led a similar program at Tosco Refinery in Rodeo, CA.

Staff recommends that the Board approve a contract award to Terra Air Services to conduct a demonstration refinery fenceline monitoring program for an amount not to exceed $464,400, of which $314,400 will be from the Rule 1173 Mitigation Fee Special Revenue Fund #44 and $150,000 from the BP/ARCO Settlement Fund #46.  The pilot study will include the following main phases: 1) select location for the system, 2) work plan development, 3) equipment purchases and installation, 4) data and communications integration, 5) testing and validation, 6) one year of continuous operation, and 7) final report.  The duration of the pilot program will be approximately 20 months.

During the open bidding of the RFP, staff received comment as to whether particulate emissions would be monitored as part of the fenceline monitoring demonstration.  Since the pilot study is focused on gaseous toxic pollutants, staff believes that adding particulate monitoring to the program is possible.  Potential particle sources from refineries include catalytic cracking units and flaring events.  Potential technologies for open-path monitoring of particulates at a fenceline include Light Detection and Ranging (LiDAR), transmissometers, and the further analysis of UV-DOAS and FTIR data streams.

The total cost of the contract to Terra Air Services of $464,400 is less than the $500,000 allocated for this project from the BP/Arco and Rule 1173 funds.  Therefore, staff recommends that the remaining $35,600 of the Rule 1173 Mitigation Fee funds be transferred to the General Fund, and appropriate that amount to Science and Technology Advancement FY2006-07 Budget, Professional and Special Services Account, for the demonstration of open-path particulate monitoring at the fenceline of a refinery.  This additional demonstration program will be integrated with and serve as a complement to the Terra Air Services contract.

Benefits to AQMD

The successful implementation of this pilot program will demonstrate technologies that can be implemented to protect nearby communities from toxic releases from refineries and other large stationary sources.

Resource Impact

The total cost of the pilot study shall not exceed $500,000.  Sufficient funds are available from the Rule 1173 Mitigation Fees Special Revenue Fund and the BP/ARCO Settlement Fund.