BOARD MEETING DATE: September 5, 2008
AGENDA NO. 44

PROPOSAL:

Amend Rule 1146 - Emissions of Oxides of Nitrogen from Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters

SYNOPSIS:

The proposed amendment will further reduce NOx emissions from large boilers, steam generators, and process heaters with maximum rated heat input capacities greater than or equal to 5 million Btu per hour by lowering the applicable NOx emission limits beginning 2012 through 2015, depending on type of fuel and burner used. The proposed amendment will, in part, implement the 2007 AQMP Control Measure MSC-01 - Facility Modernization.

COMMITTEE:

Stationary Source, April 25, May 16, and June 20, 2008

RECOMMENDED ACTIONS:

Adopt the attached resolution:

  1. Certifying the Final Environmental Assessment (EA) for Proposed Amended Rule 1146 – Emissions of Oxides of Nitrogen from Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters; and,
  2. Amending Rule 1146 – Emissions of Oxides of Nitrogen from Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters.
     

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Proposed Amended Rule 1146 was originally identified as control measure MSC-01 in the 2007 Air Quality Management Plan (AQMP). The purpose of that measure was to reduce NOx emissions from boilers and process heaters rated greater than or equal to 5 million Btu per hour.

Rule 1146 was originally adopted in September of 1988. The rule established a 40 ppm NOx emission limit for units with an annual heat input greater than 90,000 therms. For units that did not exceed an annual heat input of 90,000 therms, options were provided to either maintain stack gas oxygen at 3 percent (on a dry basis), operate with a stack gas oxygen trim system, or tune the unit at least twice a year. In addition, for units with a rated heat input of 40 mmBtu/hr and greater, installation and operation of a continuous in-stack NOx monitor was required if annual heat input exceeded 2 million therms. Since original adoption, the rule has been amended four times.

The first amendment occurred in January 1989 and established a 30 ppm NOx emission limit for units burning gaseous and/or non-gaseous fuels with a maximum rated heat input greater than or equal to 40 million Btu per hour and annual heat input exceeding 25 % of the maximum annual fuel consumption rated for the unit. This emission limit made the Rule 1146 NOx emission limit consistent with Rule 1109 – Emission of Oxides of Nitrogen from Boilers and Process Heaters in Petroleum Refineries. This amendment was deemed appropriate because the two categories of applicable equipment were considered similar and should therefore be subject to the same emission limit.

The next three amendments occurred in May of 1994, June 2000, and November 2000. The most significant change (November 2000) was lowering the NOx limits to 30 ppm (at 3% O2) for units burning gaseous fuels only if the annual fuel combustion met or exceeded 90,000 therms per year. The remainder of the amendments was relatively minor which included additions and changes to tune-up procedures, emissions testing, and fuel metering requirements.

The 2007 AQMP was adopted by the Governing Board in June 2007. The plan was designed to demonstrate attainment with national ambient air quality standards for ozone and PM2.5 and make progress toward attaining the state air quality standards. The 2007 AQMP contains control measure MCS-01 calling for additional NOx emission reductions from various non-RECLAIM combustion sources including boilers and heaters.


Affected Facilities

PAR 1146 affects a wide variety of operations within the South Coast Air Basin. Boilers and process heaters subject to PAR 1146 include those units used in medical facilities, educational institutions, office buildings, hotels, and industrial facilities. Staff has estimated that there are about 1,068 active permitted units in the District in the size range affected by this rule amendment.


Public Process

The rule development effort for PAR 1146 is part of an ongoing process to assess low NOx technologies for boilers, steam generators, and process heaters. For this rule development, staff initially held public consultation meetings on January 18, 2006 and December 12, 2007. Subsequently, a series of task force meetings were held on August 16, 2007, October 31, 2007, November 30, 2007, January 29, 2008, July 10, 2008, and August 14, 2008. A public consultation/CEQA scoping meeting was held on February 22, 2008 followed by a Public Workshop on April 2, 2008. These meetings included representatives from the manufacturers, trade organizations, permit holders for units subject to Rule 1146, and other interested parties. At these meetings low NOx technology, equipment useful lives, proposed emission limits, and cost implications were discussed. Staff also held individual meetings and conference calls with manufacturers of boilers, steam generators, and process heaters.


Summary of Proposal

The proposed amendment to this rule would reduce the allowable emission limits of NOx, applicable to large boilers and similar combustion units. In an effort to improve compliance, the proposed amendment significantly strengthens the monitoring requirements of the rule. It is also the intent of this proposed amendment to harmonize the NOx compliance limits with those limits proposed for Rule 1146.1 – Emissions of Oxides of Nitrogen from Small Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters.

The proposal lowers the currently in effect 30 ppm NOx limit for natural gas fired units to 5 ppm (or 0.0062 lbs/106 Btu) for units greater than or equal to 75 mmBtu/hr, 9 ppm (or 0.011 lbs/106 Btu) for units less than 75 mmBtu/hr, and 12 ppm (or 0.015 lbs/106 Btu) for atmospheric units up to 10 mmBtu/hr. In addition, the proposed NOx limits for landfill gas fired and digester gas fired units are 25 ppm, and 15 ppm, respectively. Compliance will occur over a four year period starting in January 2012. The compliance schedule offers flexibility for multiple units and units achieving more stringent NOx limits.

The proposed rule amendment also introduces a weighted average formula for duel fueled co-fired units, compliance testing frequency compatible with RECLAIM sources in the same size range, monitoring of NOx emissions with a portable analyzer, and extending the compliance date for health facilities complying with state seismic safety requirements.


Emission Reductions and Cost Effectiveness

The proposed rule amendment is estimated to reduce 1.2 tons per day of NOx by 2016, which reflects an overall 65% reduction in NOx emissions from this source category. Cost effectiveness estimates range from $10,100 to $24,900 per ton for units complying with the 9 ppm NOx limit (ultra low-NOx burner) and $13,000 to $30,800 per ton for units complying with the 5 ppm NOx limit (SCR). For atmospheric boilers, the cost effectiveness of complying with the 12 ppm NOx limit is estimated to range from $17,300 to $32,800.
 

Key Issues

Staff received many comments on the proposed rule at the public workshop, consultation meeting, and task force meetings. In addition, attendees provided letters summarizing their comments at the workshop and other meetings. From these comments, the following key issues have been identified: (1) achieving the 9 ppm NOx compliance level on a consistent basis, (2) achieving the 9 ppm NOx compliance level for atmospheric units, (3) lowering the NOx compliance level for thermal fluid heaters, (4) application of portable analyzer method, and (5) Supplemental firing biogas with natural gas. It is staff’s understanding that most of the issues identified were already resolved. These key issues and staff’s responses are summarized in Attachment B.


AQMP and Legal Mandates

The California Health and Safety Code requires the AQMD to adopt an Air Quality Management Plan to meet state and federal ambient air quality standards and adopt rules and regulations that carry out the objectives of the AQMP. The Health and Safety Code also requires the AQMD to implement all feasible measures to reduce air pollution. This proposed amendment of Rule 1146 relies on feasible technologies to further reduce NOx emissions. The NOx reductions from this proposed rule amendment will further reduce emissions by 1.2 tons per day and help achieve compliance with federal and state ambient air quality standards for ozone, PM10 and PM2.5.


California Environmental Quality Act (CEQA) Analysis

Pursuant to California Environmental Quality Act (CEQA) Guidelines §15252 and AQMD Rule 110, the AQMD has prepared an Environmental Assessment (EA) for proposed amended Rule 1146. Only the topic of hazardous and hazardous materials was identified in the Draft EA as exceeding the AQMD’s daily significance thresholds resulting from operational activities associated with the use and storage of aqueous ammonia. The Draft EA was released for a 45-day public review and comment period from June 13, 2008 to July 29, 2008. One comment letter was received from the public relative to the Draft EA.

Since the release of the Draft EA, responses to the comments have been prepared and included in the document. Also, minor modifications have been made to the document. However, none of the modifications alter any conclusions reached in the Draft EA, nor provide new information of substantial importance relative to the draft document. Further, the modifications do not constitute significant new information that would require recirculation of the Draft EA pursuant to CEQA Guidelines §15088.5. Therefore, the document is a now a Final EA and is included as an attachment to this Governing Board package.
 

Socioeconomic Analysis

PAR 1146 would affect 532 facilities with at least one boiler or heater (a total of 1,068 units) in the District. These facilities are in a wide variety of operations. The most affected sectors in terms of number of units are educational services, food manufacturing, health services, government, repair and maintenance, real estate, and hotels and other lodging places.

The average annual cost of PAR 1146 is estimated at $9.6 million between 2012 and 2020. The majority of the cost will occur in the sectors of health care services ($3.2 million), educational services ($1.1 million), food manufacturing ($0.8 million), and government ($0.7 million).

PAR 1146 is projected to have 71 jobs forgone annually in the entire four-county economy between 2012 and 2020 (less than one-hundredth of 1% of the total four-county employment).

There are four CEQA alternatives associated with the proposed amendments to Rule 1146. Alternative A is the No Project Alternative, which is the existing Rule 1146. Alternative B has less stringent NOx limits and would have later compliance dates than the proposed amendments. Alternative C is more stringent and has earlier compliance dates than the proposed amendments. Alternative D has the same requirements as Alternative C except that compliance for all affected units would start at a later date than Alternative C. Average annual compliance costs for the CEQA alternatives range from $5.4 to $35 million between 2012 and 2020. Average annual jobs forgone for the CEQA alternatives range from 27 jobs to 320 jobs.
 

Resource Impacts

Existing staff resources are adequate to implement the proposed amendments.

Attachments (ZIP, 2148)

  1. Summary of Proposal
  2. Key Issues and Responses
  3. Rule Development Process
  4. Key Contacts List
  5. Resolution
  6. Proposed Amended Rule
  7. Final Staff Report
  8. Socioeconomic Impact Assessment
  9. Final Environmental Assessment


This page updated: June 26, 2015
URL: ftp://lb1/hb/2008/September/080944a.htm