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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MAR 13 1992
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: Policy Determination on Limiting Potential to Emit for
Koch Refining Company's Clean Fuels Project
FROM: John B. Rasnic, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: David Kee, Director
Air and Radiation Division
Region V
This is in response to your memorandum dated January 24, 1992.
As stated in your memorandum, the Koch Refining Company in Rosemount,
Minnesota, has submitted a permit application for their Clean Fuels
Project (CFP) to the Minnesota Pollution Control Agency. In addition,
Koch is attempting to correct deficiencies in its refinery expansion.
In order to limit potential emissions from these projects, Koch
would like to have policy determinations made for several issues
regarding the June 13, 1989, memorandum "Guidance on Limiting the
Potential to Emit in New Source Permitting" signed by Terrell Hunt
and John Seitz.
Koch specifically requests whether the following conditions could
be used to limit their potential to emit to below major modification
thresholds: bubble all process heater emissions for the existing
heaters, take a federally enforceable emission limit on the heaters,
use an averaging period of 365 consecutive days which are rolled
daily for the heaters, bubble all VOC emissions for its storage
tanks in the refinery tank farm, and take a federally enforceable
emission limit for storage tanks.
With regard to the bubble for the 59 heaters, your memorandum
states that due to fuel use variability dictated by the refinery
and individual heater operating conditions, Koch wishes to bubble
the emissions from the heaters. The permits will require continuous
flow monitors on individual heaters, and historical records have
shown usage variability in the distribution system. The individual
fuel monitors will allow for the overall emissions calculation to
be made. As indicated to us in your memorandum, historical records
show that individual limits reflecting the individual operating
need for each of the heaters would be difficult to develop. Thus,
a bubble for the 59 heaters may be reasonable. However, the bubble
need only be granted to the
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extent that it facilitate enforceability of the limits applied.
Also, the decision whether to grant a bubble should consider the
bubble's impact on our ability to evaluate whether any future physical
or operational changes at the heaters should be subject to NSR.
Taking an emission cap to limit potential to emit is restricted
by the June 13, 1989 guidance. The guidance states that "the particular
circumstances of some individual sources make it difficult to state
operating parameters for control equipment limits in a manner that
is easily enforceable as a practical matter. The guidance lays out
two examples that would be exceptions to the prohibition on using
emission limits to restrict potential to emit. As is expressed in
your memorandum, the particular circumstances of Koch refinery make
it difficult to state operating parameters in a manner that is easily
enforceable as a practical matter. In fact, what is described as
the "VOC exception" in the 1989 guidance applies in principle to
sulfur dioxide (SO2) emissions for the process heaters burning refinery
gas. For these heaters, no add-on control equipment is used, but
rather several parameters are used to determine a mass emission
rate.
However, in accordance with the 1989 potential to emit policy,
when an emission limit is taken to restrict potential to emit, some
type of continuous monitoring of compliance with that emission limit
is required. In the case Of SO2 emissions, the application of continuous
emission monitors (CEMS) should be explored. The use of a CEM equivalent
may also be acceptable given that it provides a continuous assessment
of emissions that is at least as reliable as a CEM. The appropriate
means for monitoring or calculating emissions must be determined
on a case by case basis by the permitting authority. Use of an emission
limit to restrict potential to emit SO2 at the refinery heaters,
which are served by a common fuel line, is acceptable provided that
emissions can be and are required to be readily and periodically
determined or calculated. The continuous monitoring method described
in your memorandum includes analyzing the sulfur content of the
oil in the tank on a daily basis and measuring the oil used with
continuous flow monitors as well as monitoring fuel usage at each
heater as well as meeting a specified H2S content.
With respect to an acceptable averaging time for limiting potential
to emit, the section in the June 1989 guidance entitled "Time Periods
for Limiting Production and Operation" allows for averaging periods
of 365 consecutive days which are rolled daily. This allows for
short term enforceability of production or operation limits while
allowing for long term data to be considered. When a long term average
is used, we believe that it is reasonable to require permit conditions
which provide for
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interim limits that ensure compliance and enforceability during
the first year. The method used to provide interim limits and the
need to do so should be determined on a case by case basis, considering
how close the allowable emissions would be to the applicability
threshold, and how closely the enforcing agency believes monitoring
is warranted for the particular source. Determinations whether to
allow an annual rolling average versus a shorter term limit must
also be made on a case by case basis. Various factors may weigh
in favor of allowing a long term rolling average.
From discussions with your staff, we understand that Koch Refinery
has historic unpredictable variations in their emissions. Use of
a 365 day rolling average in this case may therefore be warranted.
However, other facts not presented to us may weigh in favor of a
shorter limit. Yet, your indication that Koch Refinery may be willing
to use emission data for the year prior to start-up of the heaters,
to provide interim enforceable limits for the first year of their
potential to emit limitation, weighs in favor of allowing a 365
day rolling average. This approach allows the limits to become enforceable
on the first day of operations.
With regard to setting an overall limit for the storage tanks
in the refinery tank farm, although throughput to individual tanks
in the tank farm is closely monitored for business purposes, it
is argued that throughput limitations for particular tanks are infeasible
as they would defeat the purpose of the tank as a temporary holding
vessel. The tank farm consists of over 150 tanks. These tanks would
also hold a variety of products. The annual throughput for a particular
product will depend on the market demand and refinery capacity.
Given the need for variability in the operation of these tanks,
an overall limit for the tank farm, as opposed to individual limits
for tanks, appears warranted. Discussions with your staff and Minnesota
Pollution Control Agency have indicated that even with a bubble
over the tanks in the tank farm, modifications affecting emissions
in the tank farm could be detected.
With respect to Koch's request to use an emission limit rather
than production or operation limits for the tank farm, as stated
for the heaters, some type of continuous monitoring is required.
Since a CEM is not feasible for monitoring VOC emissions, the permit
must require a continuous assessment of emissions that is at least
as reliable as a CEM. The appropriate means for continually assessing
emissions must be determined on a case by case basis by the permitting
authority. Your memorandum states that CEMs would not be used to
directly determine compliance with a VOC emission limit because
none are available for this application. Compliance would instead
be determined daily based on product density and volatility, product
throughput per tank, and control efficiency per tank. We believe
that if the
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source is willing to monitor and determine compliance daily, then
the source could be allowed to use an emission cap to limit potential
to emit. Otherwise, the maximum usage of the tank (both in volume
and volatility) must be assumed in determining potential to emit.
Our response is based on the facts presented in your memorandum
of January 24, 1992. This response does not reflect EPA's position
with regard to deficiencies from the 1985 expansion. This response
does not constitute or imply a final decision with regard to enforcement
or the legality of the 1985 expansion.
If you have any questions concerning our response, please contact
Clara Poffenberger at FTS 678-8709.
cc:
Gary McCutchen, NSR Section, AQMD (MD-15)
William L. MacDowell, Region V
Ron VanMersbergen, Region V
Rachel Rinehart, Region V
Karen Schapiro, AED
Julie Domike, AED
Jeffrey Renton, OGC
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