1. Continue the public hearing opened at the Board’s May 21, 2003 meeting;
2. Adopt the proposed new Regulation 12, Rule 11, Flare Monitoring at Petroleum Refineries, as revised;
3. Approve a Negative Declaration pursuant to the California Environmental Quality Act (CEQA) for this rule-making activity;
4. Refer the issue of real-time video broadcasting (“webcasting”) to the Stationary Source Committee.

A more detailed description of the proposed rule may be found in the attached Board memorandum prepared for the May 21, 2003 public hearing and in the attached staff report.

The primary rule revisions for the May 21st hearing were:

• A limited exemption from hydrocarbon composition monitoring is added for flares that exclusively burn flexicoker gas (which has a very low hydrocarbon content and little variability).
• Rather than simply require reporting of raw data, a provision was added requiring the monthly report to include emission estimates based on specified flare efficiencies.
• The specifications for flow monitors were expanded to include accuracy requirements.
• The sampling trigger was modified to be identical to the South Coast AQMD trigger.
• Monitor downtime provisions were modified to allow a grace period for new monitoring technologies that have not been used on flare headers.

Changes for the May 21st hearing are noted in strikethrough/underline format in the attached revised rule.

The Board opened the public hearing for the rule at its regular meeting of May 21, 2003. Because of the numerous changes to the rule noted above, staff recommended that public comment be taken but that action on the rule be deferred until the June 4th hearing. Under California Health and Safety Code section 40726, if changes are “so substantial as to significantly affect the meaning of the proposed rule or regulation,” the Board may not take action until its next regular meeting.

At the May 21st hearing, speakers representing Communities for a Better Environment (CBE), the Western States Petroleum Association (WSPA), refinery labor unions, individual refineries, and ARB all spoke in favor of rule adoption. However, speakers suggested a number of additional minor changes to the rule:

• The revised rule allowed more time to take a sample for sulfur plant flares because sampling these flares would require use of additional safety equipment including self-contained breathing gear. Refiners urged expansion of this allowance to ammonia plants, where similar concerns apply.
• CBE and labor unions requested changes in the methodology used to calculate flare emissions for monthly reports. They also requested that video images be made available on the World Wide Web (“webcasting”).
• WSPA opposed webcasting.
• ARB suggested a number of minor corrections and a change to the video recording provisions.

To address these issues, District staff convened a meeting of the flare workgroup on May 21st following the public hearing. After discussion of the issues, District staff prepared additional minor changes to the rule.

• Section 401.9: Changes require the use of 93% combustion efficiency in calculating emissions for all vent gases with low-BTU content, not just flexicoker gas. This is a minor change because data gathered during the flare study shows that most flare gas, with the exception of flexicoker gas, exceeds the BTU threshold
• Section 502.3: Changes extend additional time for sampling at sulfur and ammonia plant flares and allow submission of worst-case composition data in lieu of sampling at these flares where sampling is potentially more hazardous.
• Section 506.1: Changes eliminate the downtime allowance for manual sampling.
• Section 507: Changes extend the compliance deadline for video monitoring from 90 days after rule adoption to 180 days after rule adoption (see discussion below).

These additional changes for the June 4th hearing are noted in double strikethrough/double underline format in the attached revised rule. The changes are not “so substantial as to significantly affect the meaning of the proposed rule or regulation,” so that the Board may take action on these changes .

Because webcasting raises numerous technical issues, because District staff does not have expertise in this area, because staff has not had adequate time to fully evaluate webcasting and related issues, and because this would be a significant change in the rule that would require another hearing and would not be covered by the CEQA document prepared for the rule, staff recommends:

• Referral of the webcasting issue to the Stationary Source Committee for review;
• Execution of a contract with an expert in the field of webcasting (contract not to exceed $35,000) to study the issue and report on all aspects of webcasting, including but not limited to technologies, web site design, service provider and user bandwidth requirements, number of concurrent users, initial and ongoing costs, service level (up time availability), measurement of service level, and enforcement issues;
• Reporting to the flare working group for review and comment followed by a report to the Stationary Source Committee.
  

Staff urges adoption of the rule as revised. The proposed rule represents a reasonable compromise that will provide the District with data in an arena where there is great concern, limited data, and significant speculation. Because this is a new rule, because it contains a number of options, and because it encourages new applications of monitoring technologies, we expect that new issues will arise as we work to implement the rule. Staff therefore recommends that it report to the Board within eighteen months of rule adoption about progress on implementation and on any necessary modifications to the rule. Staff will also be reporting to the Stationary Source Committee regarding the webcasting issue.

Respectfully submitted,

William C. Norton
Chief Executive Officer