September 26, 2023 • 28 mins
Join us as we kick off a lively discussion exploring the complex subject of air permitting. We jump right in with the Clean Air Act and the role the Environmental Protection Agency (EPA) plays in regulating hazardous air pollutants. Shannon guides us through understanding both the EPA and the state's jurisdiction in air permitting, and reveals the unique system of air permitting regulations in Alaska. We discuss pre-approved limits issued by the state, a pivotal tool that allows certain industrial facilities to evade costly Title V permits. We also delve into two types of permit avoidance measures: pre-approved emission limits (PAEL) and owner requested limits (ORL). So, how does one determine if a facility is a PAEL or an ORL? Let's uncover that together in our latest episode of Tank Talk.
This podcast is for informational purposes only and should not be considered legal or regulatory advice. We are not responsible for any losses, damages, or liabilities that may occur from using this podcast. This podcast is not intended to replace professional regulatory or legal advice, and the views expressed in this podcast may not be those of the host, which would be me or Integrity Environmental. Thank you very much for listening. We would be happy to provide professional regulatory advice as part of our consulting services if you need professional regulatory advice.
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Episode Transcript
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Amanda (00:00):
Hey, Shannon, welcome back.
How are you doing today?
Shannon (00:03):
Really well.
How are you, Amanda?
What's kicking?
Amanda (00:06):
Oh, I'm doing well.
I've got to tell you I do enjoysifting through these requests
from our listeners.
We did receive another listenerrequest from Mark: "I am
confused about the airpermitting and bulk fuel storage
.
Would you do an episode on airpermitting for tank farms,
Shannon (00:26):
Mark, you are not the only one.
A lot of people find airpermitting confusing.
Yeah, we could do an episode onair permitting.
Air permitting is one of themost complex permits that we
work with, so I think I'llprobably have to keep it a
little high level because wecould probably have a hundred
(00:47):
episodes on air permitting if wereally wanted.
Air permitting for tank farmsis one of the most complex
permits that we do, and it's gotthe highest NOV notice of
violation potential for all ofour permits.
But yeah, Mark, I can do abasic basic overview of air
permitting as it applies to fuelfacilities.
Amanda (01:05):
Alright, so where do we begin?
Shannon (01:09):
In the beginning a long time ago with the Clean Air Act
in the 1970s.
The Clean Air Act requires theEPA to regulate hazardous air
pollutants from certaincategories of industrial
facilities and 40 CFR 63 is themain regulatory driver for air
permitting at bulk fuelfacilities.
(01:30):
And under the Clean Air Act theUnited States government,
through the EnvironmentalProtection Agency or the EPA, is
controlling hazardous vaporsemitted by certain chemicals,
and they do that by implementingstandards and guidelines for
emissions from large industrialfacilities and they call those
large industrial facilitiesstationary sources.
(01:50):
And common stationary sourcesthat have air permits are power
plants, refineries, bigindustrial facilities that have
the potential to emit quite abit of vapor.
Bulk fuel farms are in thiscategory as well, and that's
because they store largequantities of fuel.
The EPA defines a stationarysource as any building,
(02:14):
structure, facility orinstallation which which emits
or may emit any air pollutant.
So it's not even necessarilythat you are emitting any
pollutants, it's just that youcould.
So in general, the airpermitting program is called
something a little funky calledNESHAP, which is the National
(02:35):
Emission Standard for HazardousAir Pollutants, and that refers
to 40 CFR 63.
And so I'm going to call itNESHAP throughout the rest of
this discussion on airpermitting.
But when I first bring airpermitting to our clients, this
is like alphabet soup time.
And this is part of what makesthis permit very complex and
(02:55):
difficult to understand isthere's a lot of acronyms,
there's a lot of shorthand, andthere's a lot of regulations, of
regulations, of regulations,and then we'll get into this in
a minute.
But there's also the.
There's a federal component anda state component, just just to
double the fun on thisregulation.
So, keeping 10,000-foot view,under NESHAP, which again is the
(03:20):
National Mission Standards forHazardous Air Pollutants and
it's controlled by theregulation 40 CFR 63, there's
something called the subpart hexBs or six Bs, and it's
literally, if you imagine,somewhere in time and space
there was a subpart A and then asubpart AA through ZZ, and then
(03:42):
now we're up to the subpart sixBs.
So this is pretty deep into themassive regulation that is
NESHAP.
But that specific subpart six Bsdefine stationary sources of
air pollutant regulations forgasoline distribution, and
gasoline distribution istypically sorted into three
(04:05):
kinds of facilities bulkterminals, bulk plants and
pipeline facilities and the EPAhas identified these sources as
likely to emit air pollutantsfrom the storage and transfer of
gasoline products For what wedo and what our firm does.
We deal with bulk plants andbulk terminals the most.
We don't necessarily deal withpipeline facilities.
(04:26):
That's more upstream, typically, like what they're doing in
Prudhoe Bay or down in Kenaiwith the natural gas transfer
facilities, and so we're gonnastick to bulk plants and bulk
terminals for this discussion,because it can get very
complicated if I start delvinginto other areas.
(04:46):
So you may have heard me saythat this defines the stationary
sources of air pollution forgasoline distribution.
Gasoline distribution is reallyimportant.
Gasoline, when the EPA talksabout it in air permitting,
includes all flammable retailfuel products.
So we're talking regular andleaded, premium unleaded and
(05:08):
Avgas 100 low lead.
All three of those have aflammability level that means
they put off vapors at a muchhigher level than diesel or jet
fuel, which are some of theother products that we see
stored in Alaska.
Amanda (05:25):
So why is that only for gas liens and not diesel?
Shannon (05:30):
Well, gasoline products emit more vapors than diesel or
jet a products at averageoperating temperatures, and
that's flammable.
Liquids are flammable becauseof those vapors that they emit.
Amanda (05:41):
All right, so that refers to the EPA air quality
program, correct?
And how does that fit in withthe state of Alaska?
Shannon (05:49):
Ah well, in Alaska the EPA has granted the state of
Alaska something called primacy,which means that the EPA funds
the state of Alaska's airprogram and that the state of
Alaska performs air permitapprovals and inspections I
guess, on behalf of the EPA.
I'm not a lawyer or a I'mdefinitely not a regulatory
(06:14):
scholar by any means, butfunctionally it means that the
EPA is funding the state's airprogram and then the state of
Alaska is running the approvaland inspection piece of this
permitting program.
However, the EPA is stillinvolved.
So although the EPA has giventhe state of Alaska many rights,
there's still portions of thefederal air quality program that
(06:36):
will still apply to bulk fuelstorage facilities, and this
really confuses the bulk fuelscommunity.
I think it's confusing, butit's important to understand
that both the EPA and the stateof Alaska have jurisdiction.
You may be interfacing entirelywith the state of Alaska during
air permitting activities andregistration and reporting, but
(06:58):
if you have an incident or aninspection, you may end up
dealing with both the EPA andthe state, and I do think that
that's particularly confusing topeople.
So that's why I wanted to talkabout it specifically.
So before we go to the stateprogram, let me pause and kind
of summarize what we've talkedabout for the federal program
(07:18):
Overall, because I think this ispretty complicated.
So I wanna make sureeverybody's still tracking.
In summary, a facility is astationary source if it emits or
has the potential to emit anair pollutant.
Bulk fuel facilities meet thatstationary source requirement if
they store, transport ordispense gasoline products, and
(07:39):
that includes regular and leadedpremium and Avgas 100 low lead
fuels.
Before we move into the stateregulations, let's pause for a
second and summarize the federalregulations that I just talked
about, because I wanna make surethat we're all tracking these
important terms before we startdigging into how the state is
handling them.
So let's start with thedefinition of a stationary
(08:01):
source.
It's a facility that emits orhas the potential to emit an air
pollutant.
We also wanna remember thatgasoline products, when referred
to in the context of airpermitting, include regular and
leaded gasoline, premiumgasoline and Avgas 100 low lead
fuels.
Bulk fuel facilities areregulated within the six Bs some
(08:22):
part of 40 CFR 63, because theystore and transfer gasoline
products.
And then both the EPA and thestate are involved in regulating
bulk fuel facilities.
And that leads me to the stateof Alaska.
The state of Alaska has its ownregulatory references.
Their regulation is 18 AC 50,and it very, very closely
(08:46):
follows NESHAP or 40 CFR 63.
18 AC 50 also regulatescontrols, if you will, the
emissions of air pollutants inthe state of Alaska, and these
regulations cover a lot ofindustries.
Like we talked earlier.
They apply to things like powerplants and refineries and also
bulk fuel storage andtransportation facilities.
So federal and stateregulations allow for something
(09:10):
called permit avoidance measureand this also greatly
complicates this regulation.
Permit avoidance, it's just adifferent way of saying that you
are allowed to self-regulateyour vapor emissions from your
facility, your stationary source, to avoid having to comply with
stricter permit requirementsunder the broader Title V of the
(09:32):
Clean Air Act.
Amanda (09:34):
What are the stricter measures that we're trying to
avoid?
Shannon (09:38):
I think we would need six or seven podcasts for the
answer to that.
They are typically ongoingmonitoring and reporting on a
daily basis of actual observedemissions.
People in the utilitiesindustry listening to this will
be very familiar with it.
Maybe I could summarize it alittle more plainly and say that
(10:00):
the state is allowed by the EPAto issue pre-approved limits on
operations that will allowcertain industrial facilities to
avoid getting larger, moreexpensive Title V permits.
This is a doozy.
This is gonna be our first ofprobably many podcasts on air
permitting, because it is socomplicated.
(10:22):
The reason why the EPA allowsthese permit avoidance measures
is because so many facilitiesare really really small in
relation to the Title Vguidelines.
Facilities and companies canreduce the amount of vapor they
emit with operational controls.
A really good example of thisis if you've got a garden hose.
It's got an adjustable handleon it and you could let out a
(10:46):
trickle of water, or you couldlet out a huge rush, a huge jet
of water, right, and the onlydifference between the trickle
and the jet is that your hand isoperating it.
The same idea applies to vaporemissions, in that, the way most
bulk fuel facilities areconstructed, you can dispense
(11:06):
fuel quickly and at great volume.
If you can limit that withoperational controls, which
we'll talk about in a minute,you can reduce the volume
without changing theinfrastructure.
So before we go too far down,we actually have to sort these
permit avoidance measures intotwo things.
There are two types ofpre-approved limits in the state
of Alaska.
One is the pre-approvedemission limit, which is
(11:29):
lovingly referred to as the PAEL, and the second type is called
an owner requested limit, an ORL.
All right, so let's define aPAEL, because this is important
to bulk fuel farms and airpermitting.
A PAEL is a preset limit onvery small facilities to limit
(11:51):
the transfer of gasolineproducts to less than 19,900
gallons a day at tank truckloading racks.
And that comes from 18 AAC 50and then section 230, 230.
And for everybody listening,that is not a bulk fuel farm.
Owner Utilities also have PAELsfor their utility and
(12:13):
generators, but in this case Iam specifically talking about a
PAEL for a gasoline distributionfacility.
We will put a link in thecomments to this if your job is
to understand air permitting.
The state of Alaska has a reallygreat page for PAEL and ORL and
it has a lot of helpfulguidance on exactly what is what
(12:36):
, and they definitely break itin down into the generator PAEL
and the gasoline distributionfacilities PAEL.
So that's the PAEL and then thesecond type is called an ORL
and that's the owner requestedlimit and it is a custom limit
for small and medium sizedfacilities to limit transfers of
fuel to a limit above 19,900gallons a day but below the
(12:58):
Title V levels and that specificregulation is 188 EC 50 Section
225.
That Title V levels areenormous.
They're so big they're meantfor like enormous facilities in
large metropolitan areas or likeTexas oil fields.
I mean, most facilities inAlaska are so far below those
(13:20):
Title V levels that it's almostunimaginable based on our volume
of fuel sold in the entirestate of gasoline fuels.
The state of Alaska controlsemissions from certain
industrial groups to limit theamount of air pollutants
released.
The EPA allows the state toissue operational limits to
certain industries to avoidstricter permits under the Clean
(13:43):
Air Act to sidestep those TitleV requirements.
And the pre-approved emissionlimit is a preset limit on very
small facilities, limitingtransfers of product to less
than 19,900 gallons a day atloading racks.
And the owner requested limitis a preset limit for small and
medium facilities to limit thetransfer of gasoline products
(14:04):
above 19,900 gallons a day butbelow the very large Title V
requirements.
Amanda (14:11):
So how do you determine if a facility is a PAEL or an
ORL?
Shannon (14:18):
Well, typically companies evaluate how much
throughput of gasoline productsthey have a day and if it's
under 19,900 gallons a day thenyou are eligible to get a PAEL
For most bulk fuel facilities.
Determining whether you have aPAEL or an ORL is tied to your
(14:40):
facilities throughput limit.
Briefly, the throughput limitat a bulk fuel facility is how
much fuel can be transferred atthe facility in a day.
That specifically often refersto what goes through the tank
truck loading rack.
There are definitely someexceptions and we'll talk about
(15:01):
that a little bit later.
But generally when facilitiesare deciding how to comply with
air regulations, they look attheir throughput numbers and
they say have I ever loadedabove 19,900 gallons of gasoline
at my truck rack in a singleday, you know?
(15:22):
And if the answer is no, we'rewell below that then they are
eligible for and can apply for aPAEL.
But they also have to keepfuture transfers below the
19,900 gallons limit.
That is the difference betweena PAEL and ORL facility at its
most basic.
But remember how we saidthere's the state of Alaska and
(15:44):
they've got these operatinglimits that you can apply for.
The EPA still has regulatoryauthority and they have
requirements for fuel tanks andloading racks in gasoline
products service.
And this is where it getstricky, because the EPA has
regulations that apply toeverything in an industry and
then they allow exemptions Under40 CFR 63,.
(16:07):
There are requirements for fueltanks and loading racks in
gasoline products service tohave vapor control systems
installed.
In Alaska we typically see thatthrough internal floating roofs
in tanks and the installationof a vapor capture system of
some kind at truck and railloading racks.
And I know where everyone'sgoing with this.
But wait, my facility doesn'thave floating roofs or vapor
(16:31):
capture systems in the loadingracks.
How can that be?
Am I out of compliance?
The answer is probably not.
The reason a lot of facilitiesdon't have those vapor capture
and control systems is becausethe EPA requirement for vapor
capture systems applies to alltanks and loading racks, except
tanks and loading racks that useoperational controls to load
(16:54):
more than 20,000 gallons ofgasoline products per day.
There's a reason the state PAOis set at that 19.9 gallons per
day limit.
It gives you that hundredgallons of grace before hitting
the EPA limit of 20,000 gallons,and so those two numbers
together turn into the splitbetween a PAEL facility and an
(17:16):
ORL facility.
The other thing that we see,amanda, with our clients
especially, is that PAEL loadinglimits become really, really
important.
Because if the facility evergoes over the 20,000 gallon EPA
loading limit for gasolineproducts, even once ever, the
EPA defines that facility as abulk gasoline terminal and it
(17:39):
has to operate within an ownerrequested limit or title five
and it has to have all of thosevapor control systems in place,
because the tanks and loadingracks are no longer except from
that EPA requirement and theymust comply with all of those
vapor capture requirements.
I would like to acknowledgethat this is very complicated.
(17:59):
This is very black and white.
This feels very unfair to manypeople, but I also have to
remind you that the EPA has tobe black and white because
everything they decide applieseverywhere inside the entire
United States, whether it'sFlorida, alaska or is somewhere
in between.
Back to the PAEL.
If you're operating under that20,000 gallon limit and you
(18:22):
don't have vapor control systemsin place, like floating roofs
and vapor combustion systems,for example, adding all that
stuff if you go over your PAELloading limit can be really
expensive, like millions ofdollars by the time you add it
all up.
So really the only thingkeeping your facility from
installing all of these vaporcollection systems is that
(18:47):
control limit, the operationalcontrol, keeping all of the fuel
transferred below nineteenthousand nine hundred gallons?
That's a lot, that is a bigchunk of air permitting.
Amanda (18:58):
So just to clarify, if a facility is dispensing less
than 20,000 gallons of fuel perday, then it is a plant and is
under the PAEL.
Yes, if it's over that 20,000gallons, and it's an ORL, and it
(19:19):
is then a terminal.
Shannon (19:21):
Yes, and if you're over 20,000 gallons and a terminal,
you are no longer exempt fromthe requirements for having
vapor control systems in place.
So if you're a facility thatcurrently does not have floating
roughs and does not have avapor collection system at your
truck rack and you are storinggasoline products and you go
over that limit, you will haveto comply.
(19:43):
That is the federal regulation,so that's why that PAEL number
is so important.
The EPA really startedenforcing that in 2014, all the
way up into 2022.
We've seen multiple EPA casesin Alaska where facilities going
over that 20,000 gallon loadinglimit were absolutely enforced.
Amanda (20:05):
What counts towards the transfer limits Is that gasoline
that's sold at marinas barstransfers deliveries to
customers.
Shannon (20:14):
Yeah, the short answer is none of those.
There is a little bit ofcomplexity here and so I don't
know that.
I want to say for absolutelysure, for every facility and for
every situation this is true,but in general, at bulk
facilities, the maindetermination of compliance with
air emission standards istransfers of gasoline products
(20:35):
at the loading rack, so from atank to the truck or from the
truck back to the tank.
There are exceptions to this.
So if you're a lawyer andyou're listening to this, this
is my caveat is it's not justthat clean cut, but in general,
the EPA and the state are usingrack transfers to indicate the
(20:58):
level of vapor emissions at thefacility as a whole, and that's
what the regulation refers to asthroughput capacity.
The EPA itself has not actuallydefined throughput capacity very
well, so it's kind of a greatarea.
There are some places where wejust don't actually know how the
EPA is going to enforce.
For those of us in theconsulting industry, we need to
(21:19):
be much more precise.
But if you're just trying tolearn about how air permitting
applies at tank farms, I think areally good takeaway for this
podcast would be to understandthat every bulk fuel facility
that has gasoline products at itis subject to the NISHAP rules
in the state of Alaska airpermitting regulations.
(21:41):
Also understanding that if youare loading at a tank truck
loading rack under 19,900gallons a day, it's very
important to make sure you don'texceed that in a single day
because there will be prettyexpensive consequences if you
change from an EPA defined bulkplant to an EPA defined bulk
(22:01):
terminal based on thosethroughput numbers.
It will be a really expensiveupgrade for your facility that
will be required.
Amanda (22:10):
I feel like I have some homework to do.
Shannon (22:12):
EPA air regulations and state air regulations always
make me feel like this bigDebbie Downer, like nobody wants
to hear these stories atparties, amanda.
Amanda (22:22):
Where should I go online to learn a little bit more
about this?
I think you had mentioned acouple of links.
Shannon (22:28):
Yeah, there's.
We'll include a link to thestate of Alaska pre-approved
emission limit page.
So there's the PAEL and ORLforms there and a brief
discussion and overview of howyou know if this applies to you.
And then the EPA itself has anindustry specific NISHAP page
and I included that forpetroleum storage and
(22:49):
distribution.
So we'll have those two linksthere and I think that's a good
place to start, especially ifyou're you know, if you're at a
facility and responsible for airpermit compliance, you could
also absolutely talk to anybodyat integrity environmental.
We do do air permitting and wespecifically look at bulk fuel
permitting.
(23:10):
We've handled multiplecompliance cases with the EPA
from beginning to end.
We do have a pretty thoroughunderstanding.
We have subcontractors that weuse for some of the really
complex stuff and in general Ifeel like air permitting is one
of the permits that I do thinkfollowing the DIY route is
(23:31):
pretty difficult.
There's a lot to miss.
It's very complex.
There's a lot of things that aredefined by the EPA that are not
necessarily matching whatpeople you call things in real
life.
For example, one of the biggestissues that we see is the EPA
defines throughput as the actualphysical flow of fuel through a
(23:53):
truck, rack or other means oftransferring fuel.
But a lot of our companies,when they talk about throughput,
they're actually talking aboutsales numbers, like how much
fuel they sold on a day.
We have a whole training forenvironmental management teams
and terminal managers on how tomake sure you're actually using
(24:15):
the numbers that relates to fuelat the rack rather than sales
numbers, because those twonumbers can be different in a
whole bunch of different ways.
Amanda (24:22):
That might be a feature podcast, it sounds like this
might be the beginning of aseries.
Shannon (24:29):
That's a really good idea, because when I tell people
about these really expensivevapor collection systems that we
install if you transitionbetween a PAEL and an oral, for
most people they're worriedabout taking a very low, like a
facility that maybe onlytransfers six or 7,000 gallons a
(24:52):
day of gasoline.
Accidentally having a bad daywhere they loaded too many
trucks, they went up over pastthe 20,000 gallons and now they
have to put all this vaporcontrol and collection systems
in, but really they're a five or6,000 gallon a day facility.
None of this is going toactually net them benefit, but
for some of our facilitiesthey're running right up to that
(25:14):
19,900 gallon level everysingle day because they're
working really hard to avoid it.
Then at some point they decideif we get an oral and we install
this vapor collection system,we'll be able to operate at a
higher level under the oral.
They make that choice and theyget the oral and they install
all the equipment and theyconvert.
(25:34):
Once they do that, I think itwould be fun to have some of the
people from John Zinc orsomething, I don't know.
We'll see if we can get them,but have them come in and talk
about the different types ofsystems that you can choose to
control your vapor.
I think that'd be a good futurepodcast topic.
Also, remember we did a podcaston internal floating roofs
(25:55):
previously, and those internalfloating roofs are the main
compliance factor for tanks andgasoline service If you do go
between the bulk plant to thebulk terminal, and so if you're
considering this or wanting toknow more information about it,
I think there's some goodnuggets in that internal
floating roof episode too.
Amanda (26:16):
Great.
I'll also include a link toepisode three of Tank Talk.
I do remember that one.
It was pretty fun.
Shannon (26:23):
Yeah, I really do like internal floating roofs.
There's a lot about them thatmake me laugh.
They have trampoline legsinside, so they remind me of
French coffee presses.
There's a lot to love aboutinternal floating roofs.
So, just as a reminder, this wasme giving a very basic 10,000
(26:46):
foot overview of air permittingas it relates to bulk fuel
facilities in the state ofAlaska.
I feel like it's complex enoughand legally enough that I
should definitely put adisclaimer out that this is not
a professional legal opinion.
This is me, as a consultant,trying to explain how air
permitting works and why somenumbers are key or critical to
(27:09):
your operations.
You should definitely not relyon this podcast for legal advice
or specific consulting advice.
When we do provide specificconsulting advice, we look at
all the aspects of a facility,all the operational components
of a facility, and airpermitting is so complex that
there's a lot going on, and whatI said for today, which applies
(27:31):
to a pretty standard bulk fuelfacility, might not apply at
your facility at all, based onsome of the other operations or
infrastructure that you have.
Amanda (27:39):
Well, thank you, Shannon , for explaining in a simplified
way the air regulations.
Shannon (27:47):
I'm not sure you can do a simplified way with air
regulations.
Even though we do it so muchand I've got a pretty good beat
on it, it is still prettycomplicated, but I did my best,
thank you.
Amanda (27:58):
I appreciate it and thank you, Mark, for submitting
your question.
It was very helpful and itsounds like it's turned us on to
a new series.
We look forward to it.
Shannon (28:07):
Yeah, I hope that more people submit them.
These are really.
It's very easy to respond tothese episode ideas.
I appreciate them.
Hey, Shannon, welcome back.
How are you doing today?
Shannon (00:03):
Really well.
How are you, Amanda?
What's kicking?
Amanda (00:06):
Oh, I'm doing well.
I've got to tell you I do enjoysifting through these requests
from our listeners.
We did receive another listenerrequest from Mark: "I am
confused about the airpermitting and bulk fuel storage
.
Would you do an episode on airpermitting for tank farms,
Shannon (00:26):
Mark, you are not the only one.
A lot of people find airpermitting confusing.
Yeah, we could do an episode onair permitting.
Air permitting is one of themost complex permits that we
work with, so I think I'llprobably have to keep it a
little high level because wecould probably have a hundred
(00:47):
episodes on air permitting if wereally wanted.
Air permitting for tank farmsis one of the most complex
permits that we do, and it's gotthe highest NOV notice of
violation potential for all ofour permits.
But yeah, Mark, I can do abasic basic overview of air
permitting as it applies to fuelfacilities.
Amanda (01:05):
Alright, so where do we begin?
Shannon (01:09):
In the beginning a long time ago with the Clean Air Act
in the 1970s.
The Clean Air Act requires theEPA to regulate hazardous air
pollutants from certaincategories of industrial
facilities and 40 CFR 63 is themain regulatory driver for air
permitting at bulk fuelfacilities.
(01:30):
And under the Clean Air Act theUnited States government,
through the EnvironmentalProtection Agency or the EPA, is
controlling hazardous vaporsemitted by certain chemicals,
and they do that by implementingstandards and guidelines for
emissions from large industrialfacilities and they call those
large industrial facilitiesstationary sources.
(01:50):
And common stationary sourcesthat have air permits are power
plants, refineries, bigindustrial facilities that have
the potential to emit quite abit of vapor.
Bulk fuel farms are in thiscategory as well, and that's
because they store largequantities of fuel.
The EPA defines a stationarysource as any building,
(02:14):
structure, facility orinstallation which which emits
or may emit any air pollutant.
So it's not even necessarilythat you are emitting any
pollutants, it's just that youcould.
So in general, the airpermitting program is called
something a little funky calledNESHAP, which is the National
(02:35):
Emission Standard for HazardousAir Pollutants, and that refers
to 40 CFR 63.
And so I'm going to call itNESHAP throughout the rest of
this discussion on airpermitting.
But when I first bring airpermitting to our clients, this
is like alphabet soup time.
And this is part of what makesthis permit very complex and
(02:55):
difficult to understand isthere's a lot of acronyms,
there's a lot of shorthand, andthere's a lot of regulations, of
regulations, of regulations,and then we'll get into this in
a minute.
But there's also the.
There's a federal component anda state component, just just to
double the fun on thisregulation.
So, keeping 10,000-foot view,under NESHAP, which again is the
(03:20):
National Mission Standards forHazardous Air Pollutants and
it's controlled by theregulation 40 CFR 63, there's
something called the subpart hexBs or six Bs, and it's
literally, if you imagine,somewhere in time and space
there was a subpart A and then asubpart AA through ZZ, and then
(03:42):
now we're up to the subpart sixBs.
So this is pretty deep into themassive regulation that is
NESHAP.
But that specific subpart six Bsdefine stationary sources of
air pollutant regulations forgasoline distribution, and
gasoline distribution istypically sorted into three
(04:05):
kinds of facilities bulkterminals, bulk plants and
pipeline facilities and the EPAhas identified these sources as
likely to emit air pollutantsfrom the storage and transfer of
gasoline products For what wedo and what our firm does.
We deal with bulk plants andbulk terminals the most.
We don't necessarily deal withpipeline facilities.
(04:26):
That's more upstream, typically, like what they're doing in
Prudhoe Bay or down in Kenaiwith the natural gas transfer
facilities, and so we're gonnastick to bulk plants and bulk
terminals for this discussion,because it can get very
complicated if I start delvinginto other areas.
(04:46):
So you may have heard me saythat this defines the stationary
sources of air pollution forgasoline distribution.
Gasoline distribution is reallyimportant.
Gasoline, when the EPA talksabout it in air permitting,
includes all flammable retailfuel products.
So we're talking regular andleaded, premium unleaded and
(05:08):
Avgas 100 low lead.
All three of those have aflammability level that means
they put off vapors at a muchhigher level than diesel or jet
fuel, which are some of theother products that we see
stored in Alaska.
Amanda (05:25):
So why is that only for gas liens and not diesel?
Shannon (05:30):
Well, gasoline products emit more vapors than diesel or
jet a products at averageoperating temperatures, and
that's flammable.
Liquids are flammable becauseof those vapors that they emit.
Amanda (05:41):
All right, so that refers to the EPA air quality
program, correct?
And how does that fit in withthe state of Alaska?
Shannon (05:49):
Ah well, in Alaska the EPA has granted the state of
Alaska something called primacy,which means that the EPA funds
the state of Alaska's airprogram and that the state of
Alaska performs air permitapprovals and inspections I
guess, on behalf of the EPA.
I'm not a lawyer or a I'mdefinitely not a regulatory
(06:14):
scholar by any means, butfunctionally it means that the
EPA is funding the state's airprogram and then the state of
Alaska is running the approvaland inspection piece of this
permitting program.
However, the EPA is stillinvolved.
So although the EPA has giventhe state of Alaska many rights,
there's still portions of thefederal air quality program that
(06:36):
will still apply to bulk fuelstorage facilities, and this
really confuses the bulk fuelscommunity.
I think it's confusing, butit's important to understand
that both the EPA and the stateof Alaska have jurisdiction.
You may be interfacing entirelywith the state of Alaska during
air permitting activities andregistration and reporting, but
(06:58):
if you have an incident or aninspection, you may end up
dealing with both the EPA andthe state, and I do think that
that's particularly confusing topeople.
So that's why I wanted to talkabout it specifically.
So before we go to the stateprogram, let me pause and kind
of summarize what we've talkedabout for the federal program
(07:18):
Overall, because I think this ispretty complicated.
So I wanna make sureeverybody's still tracking.
In summary, a facility is astationary source if it emits or
has the potential to emit anair pollutant.
Bulk fuel facilities meet thatstationary source requirement if
they store, transport ordispense gasoline products, and
(07:39):
that includes regular and leadedpremium and Avgas 100 low lead
fuels.
Before we move into the stateregulations, let's pause for a
second and summarize the federalregulations that I just talked
about, because I wanna make surethat we're all tracking these
important terms before we startdigging into how the state is
handling them.
So let's start with thedefinition of a stationary
(08:01):
source.
It's a facility that emits orhas the potential to emit an air
pollutant.
We also wanna remember thatgasoline products, when referred
to in the context of airpermitting, include regular and
leaded gasoline, premiumgasoline and Avgas 100 low lead
fuels.
Bulk fuel facilities areregulated within the six Bs some
(08:22):
part of 40 CFR 63, because theystore and transfer gasoline
products.
And then both the EPA and thestate are involved in regulating
bulk fuel facilities.
And that leads me to the stateof Alaska.
The state of Alaska has its ownregulatory references.
Their regulation is 18 AC 50,and it very, very closely
(08:46):
follows NESHAP or 40 CFR 63.
18 AC 50 also regulatescontrols, if you will, the
emissions of air pollutants inthe state of Alaska, and these
regulations cover a lot ofindustries.
Like we talked earlier.
They apply to things like powerplants and refineries and also
bulk fuel storage andtransportation facilities.
So federal and stateregulations allow for something
(09:10):
called permit avoidance measureand this also greatly
complicates this regulation.
Permit avoidance, it's just adifferent way of saying that you
are allowed to self-regulateyour vapor emissions from your
facility, your stationary source, to avoid having to comply with
stricter permit requirementsunder the broader Title V of the
(09:32):
Clean Air Act.
Amanda (09:34):
What are the stricter measures that we're trying to
avoid?
Shannon (09:38):
I think we would need six or seven podcasts for the
answer to that.
They are typically ongoingmonitoring and reporting on a
daily basis of actual observedemissions.
People in the utilitiesindustry listening to this will
be very familiar with it.
Maybe I could summarize it alittle more plainly and say that
(10:00):
the state is allowed by the EPAto issue pre-approved limits on
operations that will allowcertain industrial facilities to
avoid getting larger, moreexpensive Title V permits.
This is a doozy.
This is gonna be our first ofprobably many podcasts on air
permitting, because it is socomplicated.
(10:22):
The reason why the EPA allowsthese permit avoidance measures
is because so many facilitiesare really really small in
relation to the Title Vguidelines.
Facilities and companies canreduce the amount of vapor they
emit with operational controls.
A really good example of thisis if you've got a garden hose.
It's got an adjustable handleon it and you could let out a
(10:46):
trickle of water, or you couldlet out a huge rush, a huge jet
of water, right, and the onlydifference between the trickle
and the jet is that your hand isoperating it.
The same idea applies to vaporemissions, in that, the way most
bulk fuel facilities areconstructed, you can dispense
(11:06):
fuel quickly and at great volume.
If you can limit that withoperational controls, which
we'll talk about in a minute,you can reduce the volume
without changing theinfrastructure.
So before we go too far down,we actually have to sort these
permit avoidance measures intotwo things.
There are two types ofpre-approved limits in the state
of Alaska.
One is the pre-approvedemission limit, which is
(11:29):
lovingly referred to as the PAEL, and the second type is called
an owner requested limit, an ORL.
All right, so let's define aPAEL, because this is important
to bulk fuel farms and airpermitting.
A PAEL is a preset limit onvery small facilities to limit
(11:51):
the transfer of gasolineproducts to less than 19,900
gallons a day at tank truckloading racks.
And that comes from 18 AAC 50and then section 230, 230.
And for everybody listening,that is not a bulk fuel farm.
Owner Utilities also have PAELsfor their utility and
(12:13):
generators, but in this case Iam specifically talking about a
PAEL for a gasoline distributionfacility.
We will put a link in thecomments to this if your job is
to understand air permitting.
The state of Alaska has a reallygreat page for PAEL and ORL and
it has a lot of helpfulguidance on exactly what is what
(12:36):
, and they definitely break itin down into the generator PAEL
and the gasoline distributionfacilities PAEL.
So that's the PAEL and then thesecond type is called an ORL
and that's the owner requestedlimit and it is a custom limit
for small and medium sizedfacilities to limit transfers of
fuel to a limit above 19,900gallons a day but below the
(12:58):
Title V levels and that specificregulation is 188 EC 50 Section
225.
That Title V levels areenormous.
They're so big they're meantfor like enormous facilities in
large metropolitan areas or likeTexas oil fields.
I mean, most facilities inAlaska are so far below those
(13:20):
Title V levels that it's almostunimaginable based on our volume
of fuel sold in the entirestate of gasoline fuels.
The state of Alaska controlsemissions from certain
industrial groups to limit theamount of air pollutants
released.
The EPA allows the state toissue operational limits to
certain industries to avoidstricter permits under the Clean
(13:43):
Air Act to sidestep those TitleV requirements.
And the pre-approved emissionlimit is a preset limit on very
small facilities, limitingtransfers of product to less
than 19,900 gallons a day atloading racks.
And the owner requested limitis a preset limit for small and
medium facilities to limit thetransfer of gasoline products
(14:04):
above 19,900 gallons a day butbelow the very large Title V
requirements.
Amanda (14:11):
So how do you determine if a facility is a PAEL or an
ORL?
Shannon (14:18):
Well, typically companies evaluate how much
throughput of gasoline productsthey have a day and if it's
under 19,900 gallons a day thenyou are eligible to get a PAEL
For most bulk fuel facilities.
Determining whether you have aPAEL or an ORL is tied to your
(14:40):
facilities throughput limit.
Briefly, the throughput limitat a bulk fuel facility is how
much fuel can be transferred atthe facility in a day.
That specifically often refersto what goes through the tank
truck loading rack.
There are definitely someexceptions and we'll talk about
(15:01):
that a little bit later.
But generally when facilitiesare deciding how to comply with
air regulations, they look attheir throughput numbers and
they say have I ever loadedabove 19,900 gallons of gasoline
at my truck rack in a singleday, you know?
(15:22):
And if the answer is no, we'rewell below that then they are
eligible for and can apply for aPAEL.
But they also have to keepfuture transfers below the
19,900 gallons limit.
That is the difference betweena PAEL and ORL facility at its
most basic.
But remember how we saidthere's the state of Alaska and
(15:44):
they've got these operatinglimits that you can apply for.
The EPA still has regulatoryauthority and they have
requirements for fuel tanks andloading racks in gasoline
products service.
And this is where it getstricky, because the EPA has
regulations that apply toeverything in an industry and
then they allow exemptions Under40 CFR 63,.
(16:07):
There are requirements for fueltanks and loading racks in
gasoline products service tohave vapor control systems
installed.
In Alaska we typically see thatthrough internal floating roofs
in tanks and the installationof a vapor capture system of
some kind at truck and railloading racks.
And I know where everyone'sgoing with this.
But wait, my facility doesn'thave floating roofs or vapor
(16:31):
capture systems in the loadingracks.
How can that be?
Am I out of compliance?
The answer is probably not.
The reason a lot of facilitiesdon't have those vapor capture
and control systems is becausethe EPA requirement for vapor
capture systems applies to alltanks and loading racks, except
tanks and loading racks that useoperational controls to load
(16:54):
more than 20,000 gallons ofgasoline products per day.
There's a reason the state PAOis set at that 19.9 gallons per
day limit.
It gives you that hundredgallons of grace before hitting
the EPA limit of 20,000 gallons,and so those two numbers
together turn into the splitbetween a PAEL facility and an
(17:16):
ORL facility.
The other thing that we see,amanda, with our clients
especially, is that PAEL loadinglimits become really, really
important.
Because if the facility evergoes over the 20,000 gallon EPA
loading limit for gasolineproducts, even once ever, the
EPA defines that facility as abulk gasoline terminal and it
(17:39):
has to operate within an ownerrequested limit or title five
and it has to have all of thosevapor control systems in place,
because the tanks and loadingracks are no longer except from
that EPA requirement and theymust comply with all of those
vapor capture requirements.
I would like to acknowledgethat this is very complicated.
(17:59):
This is very black and white.
This feels very unfair to manypeople, but I also have to
remind you that the EPA has tobe black and white because
everything they decide applieseverywhere inside the entire
United States, whether it'sFlorida, alaska or is somewhere
in between.
Back to the PAEL.
If you're operating under that20,000 gallon limit and you
(18:22):
don't have vapor control systemsin place, like floating roofs
and vapor combustion systems,for example, adding all that
stuff if you go over your PAELloading limit can be really
expensive, like millions ofdollars by the time you add it
all up.
So really the only thingkeeping your facility from
installing all of these vaporcollection systems is that
(18:47):
control limit, the operationalcontrol, keeping all of the fuel
transferred below nineteenthousand nine hundred gallons?
That's a lot, that is a bigchunk of air permitting.
Amanda (18:58):
So just to clarify, if a facility is dispensing less
than 20,000 gallons of fuel perday, then it is a plant and is
under the PAEL.
Yes, if it's over that 20,000gallons, and it's an ORL, and it
(19:19):
is then a terminal.
Shannon (19:21):
Yes, and if you're over 20,000 gallons and a terminal,
you are no longer exempt fromthe requirements for having
vapor control systems in place.
So if you're a facility thatcurrently does not have floating
roughs and does not have avapor collection system at your
truck rack and you are storinggasoline products and you go
over that limit, you will haveto comply.
(19:43):
That is the federal regulation,so that's why that PAEL number
is so important.
The EPA really startedenforcing that in 2014, all the
way up into 2022.
We've seen multiple EPA casesin Alaska where facilities going
over that 20,000 gallon loadinglimit were absolutely enforced.
Amanda (20:05):
What counts towards the transfer limits Is that gasoline
that's sold at marinas barstransfers deliveries to
customers.
Shannon (20:14):
Yeah, the short answer is none of those.
There is a little bit ofcomplexity here and so I don't
know that.
I want to say for absolutelysure, for every facility and for
every situation this is true,but in general, at bulk
facilities, the maindetermination of compliance with
air emission standards istransfers of gasoline products
(20:35):
at the loading rack, so from atank to the truck or from the
truck back to the tank.
There are exceptions to this.
So if you're a lawyer andyou're listening to this, this
is my caveat is it's not justthat clean cut, but in general,
the EPA and the state are usingrack transfers to indicate the
(20:58):
level of vapor emissions at thefacility as a whole, and that's
what the regulation refers to asthroughput capacity.
The EPA itself has not actuallydefined throughput capacity very
well, so it's kind of a greatarea.
There are some places where wejust don't actually know how the
EPA is going to enforce.
For those of us in theconsulting industry, we need to
(21:19):
be much more precise.
But if you're just trying tolearn about how air permitting
applies at tank farms, I think areally good takeaway for this
podcast would be to understandthat every bulk fuel facility
that has gasoline products at itis subject to the NISHAP rules
in the state of Alaska airpermitting regulations.
(21:41):
Also understanding that if youare loading at a tank truck
loading rack under 19,900gallons a day, it's very
important to make sure you don'texceed that in a single day
because there will be prettyexpensive consequences if you
change from an EPA defined bulkplant to an EPA defined bulk
(22:01):
terminal based on thosethroughput numbers.
It will be a really expensiveupgrade for your facility that
will be required.
Amanda (22:10):
I feel like I have some homework to do.
Shannon (22:12):
EPA air regulations and state air regulations always
make me feel like this bigDebbie Downer, like nobody wants
to hear these stories atparties, amanda.
Amanda (22:22):
Where should I go online to learn a little bit more
about this?
I think you had mentioned acouple of links.
Shannon (22:28):
Yeah, there's.
We'll include a link to thestate of Alaska pre-approved
emission limit page.
So there's the PAEL and ORLforms there and a brief
discussion and overview of howyou know if this applies to you.
And then the EPA itself has anindustry specific NISHAP page
and I included that forpetroleum storage and
(22:49):
distribution.
So we'll have those two linksthere and I think that's a good
place to start, especially ifyou're you know, if you're at a
facility and responsible for airpermit compliance, you could
also absolutely talk to anybodyat integrity environmental.
We do do air permitting and wespecifically look at bulk fuel
permitting.
(23:10):
We've handled multiplecompliance cases with the EPA
from beginning to end.
We do have a pretty thoroughunderstanding.
We have subcontractors that weuse for some of the really
complex stuff and in general Ifeel like air permitting is one
of the permits that I do thinkfollowing the DIY route is
(23:31):
pretty difficult.
There's a lot to miss.
It's very complex.
There's a lot of things that aredefined by the EPA that are not
necessarily matching whatpeople you call things in real
life.
For example, one of the biggestissues that we see is the EPA
defines throughput as the actualphysical flow of fuel through a
(23:53):
truck, rack or other means oftransferring fuel.
But a lot of our companies,when they talk about throughput,
they're actually talking aboutsales numbers, like how much
fuel they sold on a day.
We have a whole training forenvironmental management teams
and terminal managers on how tomake sure you're actually using
(24:15):
the numbers that relates to fuelat the rack rather than sales
numbers, because those twonumbers can be different in a
whole bunch of different ways.
Amanda (24:22):
That might be a feature podcast, it sounds like this
might be the beginning of aseries.
Shannon (24:29):
That's a really good idea, because when I tell people
about these really expensivevapor collection systems that we
install if you transitionbetween a PAEL and an oral, for
most people they're worriedabout taking a very low, like a
facility that maybe onlytransfers six or 7,000 gallons a
(24:52):
day of gasoline.
Accidentally having a bad daywhere they loaded too many
trucks, they went up over pastthe 20,000 gallons and now they
have to put all this vaporcontrol and collection systems
in, but really they're a five or6,000 gallon a day facility.
None of this is going toactually net them benefit, but
for some of our facilitiesthey're running right up to that
(25:14):
19,900 gallon level everysingle day because they're
working really hard to avoid it.
Then at some point they decideif we get an oral and we install
this vapor collection system,we'll be able to operate at a
higher level under the oral.
They make that choice and theyget the oral and they install
all the equipment and theyconvert.
(25:34):
Once they do that, I think itwould be fun to have some of the
people from John Zinc orsomething, I don't know.
We'll see if we can get them,but have them come in and talk
about the different types ofsystems that you can choose to
control your vapor.
I think that'd be a good futurepodcast topic.
Also, remember we did a podcaston internal floating roofs
(25:55):
previously, and those internalfloating roofs are the main
compliance factor for tanks andgasoline service If you do go
between the bulk plant to thebulk terminal, and so if you're
considering this or wanting toknow more information about it,
I think there's some goodnuggets in that internal
floating roof episode too.
Amanda (26:16):
Great.
I'll also include a link toepisode three of Tank Talk.
I do remember that one.
It was pretty fun.
Shannon (26:23):
Yeah, I really do like internal floating roofs.
There's a lot about them thatmake me laugh.
They have trampoline legsinside, so they remind me of
French coffee presses.
There's a lot to love aboutinternal floating roofs.
So, just as a reminder, this wasme giving a very basic 10,000
(26:46):
foot overview of air permittingas it relates to bulk fuel
facilities in the state ofAlaska.
I feel like it's complex enoughand legally enough that I
should definitely put adisclaimer out that this is not
a professional legal opinion.
This is me, as a consultant,trying to explain how air
permitting works and why somenumbers are key or critical to
(27:09):
your operations.
You should definitely not relyon this podcast for legal advice
or specific consulting advice.
When we do provide specificconsulting advice, we look at
all the aspects of a facility,all the operational components
of a facility, and airpermitting is so complex that
there's a lot going on, and whatI said for today, which applies
(27:31):
to a pretty standard bulk fuelfacility, might not apply at
your facility at all, based onsome of the other operations or
infrastructure that you have.
Amanda (27:39):
Well, thank you, Shannon , for explaining in a simplified
way the air regulations.
Shannon (27:47):
I'm not sure you can do a simplified way with air
regulations.
Even though we do it so muchand I've got a pretty good beat
on it, it is still prettycomplicated, but I did my best,
thank you.
Amanda (27:58):
I appreciate it and thank you, Mark, for submitting
your question.
It was very helpful and itsounds like it's turned us on to
a new series.
We look forward to it.
Shannon (28:07):
Yeah, I hope that more people submit them.
These are really.
It's very easy to respond tothese episode ideas.
I appreciate them.
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