Rock Zierman, Director of Public Affairs

California Independent Petroleum Association

Rock Zierman, Director of Public Affairs

1112 “I” Street, Suite 350

Sacramento, CA 95814

Direct Line: (916) 447-1185

Fax: (916) 447-1144

E-Mail:

October 17, 2003

Mr. Joven R. Nazareno

Senior Air Quality Engineer

San Joaquin Valley APCD

1990 E. Gettysburg Avenue

Fresno, CA 93726

Subject:Notice of Proposed Amendments of Fugitive Emissions Rules 4451 & 4452 with Proposed Replacement Rule 4455

Dear Mr. Nazareno:

The California Independent Petroleum Association (CIPA) is a non-profit, non-partisan trade association representing approximately 450 independent crude oil and natural gas producers, royalty owners, and service and supply companies with operations in California. We are writing to provide comments on proposed rule 4455.

CIPA’s following comments will be limited to proposed Rule 4455 “Components at Petroleum Refineries, Gas Liquids Processing Facilities, and Chemical Plants”.

Section 3.5 Component, Section 3.6 Component Type, and Section 3.7:Compressor Definition

Comment: “Compressor” should not be considered as a single component. All associated components that make up the compressor unit (e.g., valves, flanges, fittings, flanges, threaded connections, seals, etc.) should be considered as individual components. A typical compressor comprises hundreds if not thousands of individual components. It is not logical to consider a compressor unit as (1) component. Furthermore, to consider a compressor unit, as a single component is inconsistent with ARB RACT/BARCT Fugitive Emissions from Petroleum Refineries, Table I, page H-3, Regulated Component, which lists “Compressor Seals” as a component. It does not list the term “Compressor” as a component.

Section 5.3.7 requires a “component” that incurs five repair actions for major gas or liquids leaks in a 12-month period to be replaced with a BACT component. Considering a compressor is defined in the proposed rule as one component, it follows that if, for example, a ¾ inch tube fitting associated with the compressor incurs five consecutive major leaks it could trigger the requirement that the ENTIRE compressor be replaced with a BACT compressor. This cost to replace the compressor could be in excess of a million dollars. This is an unacceptable standard of cost-effectiveness or reasonableness.

ARB guidance documents and other District rules define a “compressor” or a “pump” as a single component. The District and the Governing Board should correct the errors in these two erroneous definitions.

Recommendation: The term “compressor” and the term “pump” should be removed from all references to the definition of “component” and “component type”.

Section 3.6 Component Types: Pumps, compressors and pipes.

Comment: The term “pipes” is proposed to be added to the definition of component. CIPA is opposed to this for a variety of reasons. There is no basis in other District rules or in ARB RACT/BARCT Determination for such a change. Pipes were not addressed in the SJVAPCD Control Measure Evaluation Project conducted by Kraim Environmental Engineering Services nor have the potential emissions from pipes been included in the Districts emissions inventory or considered within the Rate of Progress Plan. Pipes are already subject to a variety of visual inspection, hydrostatic and non-destructive testing requirements for safety reasons. The inclusion of pipes within the confines of a fugitive emissions rule is duplicative and unnecessary.

In addition, “pumps” and “compressors” are pieces of equipment that are made up of a numerous different types of “components” (e.g., fittings, threaded connections, PRDs, flanges and sealing mechanisms). Calling a pump a single “component” is like calling an IC engine a “component” or a tank a “component” or a loading rack a “component”. Certainly there is no logical rational or technical basis for defining a compressor or pump as a single “component”.

Recommendation: The terms “pumps, compressors and pipes” should be removed from the definition of component type. The definition should only include the following list of components; valve, fitting, threaded connection, pressure relief device, flange, process drain, and sealing mechanism. These listed component types will cover all of the potential leak sources on equipment such as compressors, pumps, sight glasses, meters and all other equipment subject to the proposed rule that handle, process or store VOC compounds.

Section 3.14.1 Operator Inspections: The purpose of the operator inspection is to determine compliance.

Comment: CIPA is opposed to definition 3.14.1 that states the “Operator Inspection” is for the purpose of “determining compliance”. Operator inspections are for the purpose of meeting the requirements of Rule 4455. This is consistent with all other District rules. District inspectors, not operators, are the authorized individuals entrusted by law to “determine compliance”. The District should encourage operator inspections. Forcing the operator to determine compliance will act as a disincentive for operators to conduct more frequent internal operator inspections and will be counter-productive to air quality objectives.

Recommendation: Replace language in proposed Section 3.14.1 with the following language: Operator Inspection: “A survey of the components by the operator or contractor for the purpose of satisfying the requirements of Section 5.0 of the rule. Operator inspections are not for the purpose of determining compliance”.

Section 3.15 Table 1 Leak Standards: Type of component listed in Table 1.

Comment: The types of components in Table 1 are not consistent with the component types listed in Section 5.14, Table 2.

Recommendation: Both tables should be consistent in the component types listed. The recommended list of components should include the following component types:

-valve

-fitting

-threaded connection

-pressure relief device

-flange

-process drain

-sealing mechanism (includes, pump seals, compressor seals and hatch seals)

Section 3.21 Pumps: A pump includes all associated components and is consider “one” component.

Comment: Pumps should not be considered as a single component. Pumps and compressors are pieces of equipment that are made up of a variety of different types of “components” (e.g., fittings, threaded connections, PRDs, flanges and sealing mechanisms).

Recommendation: Refer to comments above that address compressors. Those comments also pertain to pumps, sight-glasses and meters.

Section 3.20x Process Unit: A definition needs to be included for the term “Process Unit”.

Recommendation: Consider the following definition for process unit. “Process Unit is associated equipment and piping used in the manufacturing and processing of a refined product other than storage tanks, liquefied petroleum gas storage vessels or pipelines used to transport material.”

Section 3.20xx Process PRD: A definition needs to be included for the term “Process PRD”.

Recommendation: It is recommended the definition from South Coast AQMD Rule 1173, C (21) is considered. “Process PRD is a PRD located on process equipment other than storage tanks, liquefied petroleum gas storage vessels or pipelines used to transport material.”

Section 4.1 Exemptions Storage Tanks and Liquefied Petroleum Gas Storage Vessels: Components subject to the Storage Tank Rule 4623 are exempt.

Comment: Liquefied petroleum gas storage vessels are already controlled and subject to Rule 4454 Refinery Process Unit Turnaround.

Recommendation: Include within the Section 4.1 an exemption for liquefied petroleum gas storage vessels.

Section 4.1 Exemptions Maintenance and Repair: The proposed rule does not allow leaks to occur during the repair or maintenance of components. During maintenance and repair activities it is not uncommon to create fluid and/or gaseous “leaks” from the component or piping as the component is removed from the process system for repair or replacement.

It would be counter productive to stakeholders and to members of the Hearing Board to require variances each time an operator needs to schedule repair or maintenance on components. Unfortunately, the District has in the past issued a Notice of Violation (NOV) to an operator who thought he was doing the right thing during a District compliance inspection by opening a hatch on a tank to repair the gasket found to be leaking. Unfortunately, even though this operator was trying to expedite the minimization and/or repair of the leak, the company was punished by the issuance of an NOV for failure to obtain a variance before opening the hatch! From an air quality perspective, the District should encourage operators to conduct routine maintenance and repair of components rather than discouraging them by requiring operators to petition for a cumbersome, costly and time-consuming variance each time a component undergoes maintenance or repair.

Recommendation: Add an exemption for the routine maintenance, repair and replacement of components. Proposed exemption language is, “During routine maintenance and during the repair and replacement of any component subject to Rule 4455, all such components will be exempt from the leak definitions specified in Section 3.15.

Section 4.3: Components exclusively handling commercial natural gas:

Recommendation: Use the definition for PUC Quality Natural Gas referenced in Rule 4306 Section 3.16.

Section 5.1.2:Hatches: Each hatch shall be closed at all times except during sampling, adding of process material through the hatch or attended maintenance operations.

Comment: There must be an allowance to open hatches during repair and replacement activities in addition to maintenance activities. The District should encourage maintenance and repair activities.

Recommendation: Revise the language to read, “each hatch shall be closed at all times except during sampling, adding of process material through the hatch or attended “repair, replacement” or maintenance activities.

Section 5.1.4 Operator Inspections: An Operator “shall be in violation” of this rule if the operator inspection or District inspection demonstrates that at least one of the conditions in Sections 5.1.4.1 through 5.1.4.4 exist at the facility in any calendar quarter.

Comment: By defining operator inspections as “compliance” inspections, there will be no incentive for operators to conduct more frequent operator inspections due to the potential enforcement penalties and fines that may follow. It was never the intent of previous Rules 4451 & 4452 to consider an Operator in violation if Table 2 rates were exceeded during an Operator Inspection. Past application of Rules 4451 & 4452 has been to “penalize” an Operator for exceeding the Table 2 rates by requiring a shift from annual inspections to more frequent quarterly inspections. NOVs have not historically been issued for those Operators who must revert from annual to quarterly inspections. Historical SJVAPCD Enforcement Section practices and records support this statement.

Recommendation: Refer to previous comments referring to Section 3.14.1. Operators should not be in “violation” if the Table 2 leak rates are exceeded. The consequence of exceeding the Table 2 standards should be limited to requiring the Operator to revert from annual back to quarterly inspections.

Section 5.1.4 Table 2 Allowable Leak Rate: The number of allowable leaks listed in Table 2 is not realistically achievable and appear to be established as a means to provide the District with a constant steam of revenue through enforcement settlements. Certainly it is not reasonable to expect that if an Operator demonstrates performance of 99.4% success rate in leak control that the issuance of NOVs and the payment of settlement fines should be warranted.

Recommendation: Maintain the current 2% allowable leak threshold specified in Rule 4451. This provides the District with 98% control while providing Operators with a more feasible and attainable standard.

Section 5.1.5.1 Plan: An Operator shall “submit a plan”.

Recommendation: This plan should be part of the Operator Management Plan specified in Section 6.1 and should not be another duplicative “stand alone” plan.

Section 5.1.5.2 Approved Labs: APCO approved labs shall be used.

Comment: Does the District have a list of APCO approved labs? CIPA requests a copy of the District’s written protocol used to set forth the criteria and approval process of evaluating and approving labs.

Section 5.1.5.5: The Operator shall submit an application for Authority to Construct to incorporate the approval of the provisions of Section 5.1.5 as a condition of the Permit to Operate.

Comment: On May 15, 2003, the SJVAPCD Governing Board directed David Crow to establish an Industry/District Ad Hoc committee to consider ways to streamline the permit process and to reduce the current permit backlog. Requirements to submit an application for Authority to Construct specified in Section 5.1.5.5 and in Section 6.1.2 are inconsistent with the directive issued to the Governing Board in pursuit of permit streamlining and reducing the permit backlog.

Recommendation: CIPA recommends that all requirements to submit an application for Authority to Construct be removed from Rule 4455, and those requirements be replaced with the requirement to submit an Operator Management Plan for APCO approval. At the time of permit renewal, conditions can be added to the permits specifying the rule requirements and a reference to the required APCO approved Operator Management Plan can also be added as a condition to the permits.

Section 5.2.1 Audio-Visual Inspection: An Operator shall audio-visually inspect, all accessible operating pumps, compressors, and PRVs in service a least every operating shift or every eight-hour period.

Comment: This requirement is not feasible or practical since Operators are responsible for operating the units within the refinery and are not authorized to make repairs. The Maintenance Department has the responsibility for making repairs. The Maintenance Department personnel only work the daylight shift. When items in need of repair or maintenance are identified, standard work orders are generated and the work is then prioritized. Parts are ordered if necessary and crews are scheduled for each specific work order job. Obviously the requirement to inspect the applicable components every shift, make immediate repairs and re-inspect the component within (1) working day is infeasible and not practical.

Recommendation: Delete Section 5.2.1 of the proposed rule.

Section 5.2.9 PRD Re-inspection: After a PRD releases to atmosphere, it shall be re-inspected twice…once within (1) calendar day after the release and the second inspection within (5) calendar days after the same release.

Comment: What technical or documented field data or other information is the District using as a basis and justification for requiring the same component to be inspected twice within a (6) day period? Does the District have any credible data that indicates components that have undergone a repair or replacement have a propensity to leak? If not, what justification is there to put such unnecessary Operator resources at re-inspecting such a component?

Recommendation: CIPA recommends all components be re-inspected within 30-days after being repaired. This is consistent with Ventura County APCD Rule 74.7.

Section 5.2.10 PRD Re-inspection: PRDs shall be re-inspected twice, once within (1) day of repair and again within (14) days of the repair.

Comment: What technical or documented field data or other information is the District using as a basis and justification for requiring the same component to be inspected twice within a (15) day period? Does the District have any credible data that indicates components that have undergone a repair or replacement have a propensity to leak? If not, what justification is there to put such unnecessary Operator resources at re-inspecting such a component?

Recommendation: CIPA recommends all components be inspected within 30-days after being repaired. This is consistent with Ventura County APCD Rule 74.7.

Section 5.2.12 Component Re-inspection: Components shall be re-inspected within 24-hours after a repair.

Comment: What technical or documented field data or other information is the District using as a basis and justification for requiring the component to be re-inspected within 24-hours after repair? Does the District have any credible data that indicates components that have undergone a repair or replacement have a propensity to leak? If not, what justification is there to put such unnecessary Operator resources at re-inspecting such a component?

Recommendation: CIPA recommends components be inspected within 30-days after being repaired. This is consistent with Ventura County APCD Rule 74.7.

Section 5.2.6 Quarterly to Annual Inspection Frequency: Operator inspections can revert from quarterly to annually if there are no violations or excedences of the Table 2 leak rates during five-consecutive quarterly inspections.

Comment: Table 2 establishes an unachievable standard. As the rule is currently written, an operator and/or the District inspector could inspect a hundred thousand components and if more than (2) compressors were found to be leaking the Operator would be in violation, issued a NOV, would pay a monetary fine and would be further penalized with the cost of reverting from annual to quarterly inspections.

Considering the Operator in this example succeeded in controlling 99.002% of the inspected components in a leak free condition, the Operator is still punished with an NOV penalized with a fine and forced into more costly quarterly inspections for only having 0.008 % of the inspected components found to be leaking. Clearly this is heavy-handed, overly abusive, punitive and counter-productive.

Is this intent of this rule to control emissions or is the intent to generate a constant revenue stream to the District’s enforcement budget?

Recommendation: CIPA recommends that if the thresholds specified in Table 2 are exceeded during operator inspections, that the “punishment” be limited to reverting from a quarterly to an annual inspection frequency.

Section 5.2.9 PRD Re-inspection: If a PRD releases to atmosphere it must be re-inspected twice.

Recommendation: CIPA recommends all components be re-inspected within 30-days after being repaired. This is consistent with Ventura County APCD Rule 74.7.

Section 5.2.10 PRD Re-inspection: If a PRD is repaired or replaced it must be re-inspected twice.

Comment: What technical or documented field data or other information is the District using as a basis and justification for requiring the same component to be inspected twice within a (15) day period? Does the District have any credible data that indicates components that have undergone a repair or replacement have a propensity to leak? If not, what justification is there to put such unnecessary Operator resources at re-inspecting such a component?

Recommendation: CIPA recommends all components be re-inspected within 30-days after being repaired. This is consistent with Ventura County APCD Rule 74.7.