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.
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.
Hey, Shannon, welcome back. How are you doing today?
Shannon:
Really well. How are you, Amanda? What's kicking?
Amanda:
Oh, I'm doing well. I've got to tell you I do enjoy sifting through these requests from our listeners. We did receive another listener request from Mark: "I am confused about the air permitting and bulk fuel storage. Would you do an episode on air permitting for tank farms,
Shannon:
Mark, you are not the only one. A lot of people find air permitting confusing. Yeah, we could do an episode on air permitting. Air permitting is one of the most complex permits that we work with, so I think I'll probably have to keep it a little high level because we could probably have a hundred episodes on air permitting if we really wanted. Air permitting for tank farms is one of the most complex permits that we do, and it's got the highest NOV notice of violation potential for all of our permits. But yeah, Mark, I can do a basic basic overview of air permitting as it applies to fuel facilities.
Amanda:
Alright, so where do we begin?
Shannon:
In the beginning a long time ago with the Clean Air Act in the 1970s. The Clean Air Act requires the EPA to regulate hazardous air pollutants from certain categories of industrial facilities and 40 CFR 63 is the main regulatory driver for air permitting at bulk fuel facilities. And under the Clean Air Act the United States government, through the Environmental Protection Agency or the EPA, is controlling hazardous vapors emitted by certain chemicals, and they do that by implementing standards and guidelines for emissions from large industrial facilities and they call those large industrial facilities stationary sources. And common stationary sources that have air permits are power plants, refineries, big industrial facilities that have the potential to emit quite a bit of vapor. Bulk fuel farms are in this category as well, and that's because they store large quantities of fuel. The EPA defines a stationary source as any building, structure, facility or installation which which emits or may emit any air pollutant. So it's not even necessarily that you are emitting any pollutants, it's just that you could. So in general, the air permitting program is called something a little funky called NESHAP, which is the National Emission Standard for Hazardous Air Pollutants, and that refers to 40 CFR 63. And so I'm going to call it NESHAP throughout the rest of this discussion on air permitting.
Shannon:
But when I first bring air permitting to our clients, this is like alphabet soup time. And this is part of what makes this permit very complex and difficult to understand is there's a lot of acronyms, there's a lot of shorthand, and there'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 and a state component, just just to double the fun on this regulation. So, keeping 10,000-foot view, under NESHAP, which again is the National Mission Standards for Hazardous Air Pollutants and it's controlled by the regulation 40 CFR 63, there's something called the subpart hex Bs or six Bs, and it's literally, if you imagine, somewhere in time and space there was a subpart A and then a subpart AA through ZZ, and then now we're up to the subpart six Bs. So this is pretty deep into the massive regulation that is NESHAP.
Shannon:
But that specific subpart six Bs define stationary sources of air pollutant regulations for gasoline distribution, and gasoline distribution is typically sorted into three kinds of facilities bulk terminals, bulk plants and pipeline facilities and the EPA has identified these sources as likely to emit air pollutants from the storage and transfer of gasoline products For what we do and what our firm does. We deal with bulk plants and bulk terminals the most. We don't necessarily deal with pipeline facilities. That's more upstream, typically, like what they're doing in Prudhoe Bay or down in Kenai with the natural gas transfer facilities, and so we're gonna stick to bulk plants and bulk terminals for this discussion, because it can get very complicated if I start delving into other areas.
Shannon:
So you may have heard me say that this defines the stationary sources of air pollution for gasoline distribution. Gasoline distribution is really important. Gasoline, when the EPA talks about it in air permitting, includes all flammable retail fuel products. So we're talking regular and leaded, premium unleaded and Avgas 100 low lead. All three of those have a flammability level that means they put off vapors at a much higher level than diesel or jet fuel, which are some of the other products that we see stored in Alaska.
Amanda:
So why is that only for gas liens and not diesel?
Shannon:
Well, gasoline products emit more vapors than diesel or jet a products at average operating temperatures, and that's flammable. Liquids are flammable because of those vapors that they emit.
Amanda:
All right, so that refers to the EPA air quality program, correct? And how does that fit in with the state of Alaska?
Shannon:
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 air program and that the state of Alaska performs air permit approvals and inspections I guess, on behalf of the EPA. I'm not a lawyer or a I'm definitely not a regulatory scholar by any means, but functionally it means that the EPA is funding the state's air program and then the state of Alaska is running the approval and inspection piece of this permitting program. However, the EPA is still involved. So although the EPA has given the state of Alaska many rights, there's still portions of the federal air quality program that will still apply to bulk fuel storage facilities, and this really confuses the bulk fuels community. I think it's confusing, but it's important to understand that both the EPA and the state of Alaska have jurisdiction. You may be interfacing entirely with the state of Alaska during air permitting activities and registration and reporting, but if you have an incident or an inspection, you may end up dealing with both the EPA and the state, and I do think that that's particularly confusing to people. So that's why I wanted to talk about it specifically. So before we go to the state program, let me pause and kind of summarize what we've talked about for the federal program Overall, because I think this is pretty complicated. So I wanna make sure everybody's still tracking.
Shannon:
In summary, a facility is a stationary source if it emits or has the potential to emit an air pollutant. Bulk fuel facilities meet that stationary source requirement if they store, transport or dispense gasoline products, and that includes regular and leaded premium and Avgas 100 low lead fuels. Before we move into the state regulations, let's pause for a second and summarize the federal regulations that I just talked about, because I wanna make sure that we're all tracking these important terms before we start digging into how the state is handling them. So let's start with the definition of a stationary source. It's a facility that emits or has the potential to emit an air pollutant. We also wanna remember that gasoline products, when referred to in the context of air permitting, include regular and leaded gasoline, premium gasoline and Avgas 100 low lead fuels.
Shannon:
Bulk fuel facilities are regulated within the six Bs some part of 40 CFR 63, because they store and transfer gasoline products. And then both the EPA and the state are involved in regulating bulk fuel facilities. And that leads me to the state of Alaska. The state of Alaska has its own regulatory references. Their regulation is 18 AC 50, and it very, very closely follows NESHAP or 40 CFR 63. 18 AC 50 also regulates controls, if you will, the emissions of air pollutants in the state of Alaska, and these regulations cover a lot of industries. Like we talked earlier. They apply to things like power plants and refineries and also bulk fuel storage and transportation facilities. So federal and state regulations allow for something called permit avoidance measure and this also greatly complicates this regulation. Permit avoidance, it's just a different way of saying that you are allowed to self-regulate your vapor emissions from your facility, your stationary source, to avoid having to comply with stricter permit requirements under the broader Title V of the Clean Air Act.
Amanda:
What are the stricter measures that we're trying to avoid?
Shannon:
I think we would need six or seven podcasts for the answer to that. They are typically ongoing monitoring and reporting on a daily basis of actual observed emissions. People in the utilities industry listening to this will be very familiar with it. Maybe I could summarize it a little more plainly and say that the state is allowed by the EPA to issue pre-approved limits on operations that will allow certain industrial facilities to avoid getting larger, more expensive Title V permits. This is a doozy. This is gonna be our first of probably many podcasts on air permitting, because it is so complicated.
Shannon:
The reason why the EPA allows these permit avoidance measures is because so many facilities are really really small in relation to the Title V guidelines. Facilities and companies can reduce the amount of vapor they emit with operational controls. A really good example of this is if you've got a garden hose. It's got an adjustable handle on it and you could let out a trickle of water, or you could let out a huge rush, a huge jet of water, right, and the only difference between the trickle and the jet is that your hand is operating it. The same idea applies to vapor emissions, in that, the way most bulk fuel facilities are constructed, you can dispense fuel quickly and at great volume. If you can limit that with operational controls, which we'll talk about in a minute, you can reduce the volume without changing the infrastructure. So before we go too far down, we actually have to sort these permit avoidance measures into two things.
Shannon:
There are two types of pre-approved limits in the state of Alaska. One is the pre-approved emission limit, which is lovingly referred to as the PAEL, and the second type is called an owner requested limit, an ORL. All right, so let's define a PAEL, because this is important to bulk fuel farms and air permitting. A PAEL is a preset limit on very small facilities to limit the transfer of gasoline products to less than 19,900 gallons a day at tank truck loading racks. And that comes from 18 AAC 50 and then section 230, 230. And for everybody listening, that is not a bulk fuel farm. Owner Utilities also have PAELs for their utility and generators, but in this case I am specifically talking about a PAEL for a gasoline distribution facility. We will put a link in the comments to this if your job is to understand air permitting.
Shannon:
The state of Alaska has a really great page for PAEL and ORL and it has a lot of helpful guidance on exactly what is what, and they definitely break it in down into the generator PAEL and the gasoline distribution facilities PAEL. So that's the PAEL and then the second type is called an ORL and that's the owner requested limit and it is a custom limit for small and medium sized facilities to limit transfers of fuel to a limit above 19,900 gallons a day but below the Title V levels and that specific regulation is 188 EC 50 Section 225. That Title V levels are enormous. They're so big they're meant for like enormous facilities in large metropolitan areas or like Texas oil fields. I mean, most facilities in Alaska are so far below those Title V levels that it's almost unimaginable based on our volume of fuel sold in the entire state of gasoline fuels.
Shannon:
The state of Alaska controls emissions from certain industrial groups to limit the amount of air pollutants released. The EPA allows the state to issue operational limits to certain industries to avoid stricter permits under the Clean Air Act to sidestep those Title V requirements. And the pre-approved emission limit is a preset limit on very small facilities, limiting transfers of product to less than 19,900 gallons a day at loading racks. And the owner requested limit is a preset limit for small and medium facilities to limit the transfer of gasoline products above 19,900 gallons a day but below the very large Title V requirements.
Amanda:
So how do you determine if a facility is a PAEL or an ORL?
Shannon:
Well, typically companies evaluate how much throughput of gasoline products they have a day and if it's under 19,900 gallons a day then you are eligible to get a PAEL For most bulk fuel facilities.
Shannon:
Determining whether you have a PAEL or an ORL is tied to your facilities throughput limit. Briefly, the throughput limit at a bulk fuel facility is how much fuel can be transferred at the facility in a day. That specifically often refers to what goes through the tank truck loading rack. There are definitely some exceptions and we'll talk about that a little bit later. But generally when facilities are deciding how to comply with air regulations, they look at their throughput numbers and they say have I ever loaded above 19,900 gallons of gasoline at my truck rack in a single day, you know? And if the answer is no, we're well below that then they are eligible for and can apply for a PAEL. But they also have to keep future transfers below the 19,900 gallons limit. That is the difference between a PAEL and ORL facility at its most basic. But remember how we said there's the state of Alaska and they've got these operating limits that you can apply for.
Shannon:
The EPA still has regulatory authority and they have requirements for fuel tanks and loading racks in gasoline products service. And this is where it gets tricky, because the EPA has regulations that apply to everything in an industry and then they allow exemptions Under 40 CFR 63,. There are requirements for fuel tanks and loading racks in gasoline products service to have vapor control systems installed. In Alaska we typically see that through internal floating roofs in tanks and the installation of a vapor capture system of some kind at truck and rail loading racks. And I know where everyone's going with this. But wait, my facility doesn't have floating roofs or vapor capture systems in the loading racks. How can that be? Am I out of compliance? The answer is probably not. The reason a lot of facilities don't have those vapor capture and control systems is because the EPA requirement for vapor capture systems applies to all tanks and loading racks, except tanks and loading racks that use operational controls to load more than 20,000 gallons of gasoline products per day. There's a reason the state PAO is set at that 19.9 gallons per day limit. It gives you that hundred gallons of grace before hitting the EPA limit of 20,000 gallons, and so those two numbers together turn into the split between a PAEL facility and an ORL facility.
Shannon:
The other thing that we see, amanda, with our clients especially, is that PAEL loading limits become really, really important. Because if the facility ever goes over the 20,000 gallon EPA loading limit for gasoline products, even once ever, the EPA defines that facility as a bulk gasoline terminal and it has to operate within an owner requested limit or title five and it has to have all of those vapor control systems in place, because the tanks and loading racks are no longer except from that EPA requirement and they must comply with all of those vapor capture requirements. I would like to acknowledge that this is very complicated. This is very black and white. This feels very unfair to many people, but I also have to remind you that the EPA has to be black and white because everything they decide applies everywhere inside the entire United States, whether it's Florida, alaska or is somewhere in between.
Shannon:
Back to the PAEL. If you're operating under that 20,000 gallon limit and you don't have vapor control systems in place, like floating roofs and vapor combustion systems, for example, adding all that stuff if you go over your PAEL loading limit can be really expensive, like millions of dollars by the time you add it all up. So really the only thing keeping your facility from installing all of these vapor collection systems is that control limit, the operational control, keeping all of the fuel transferred below nineteen thousand nine hundred gallons? That's a lot, that is a big chunk of air permitting.
Amanda:
So just to clarify, if a facility is dispensing less than 20,000 gallons of fuel per day, then it is a plant and is under the PAEL. Yes, if it's over that 20,000 gallons, and it's an ORL, and it is then a terminal.
Shannon:
Yes, and if you're over 20,000 gallons and a terminal, you are no longer exempt from the requirements for having vapor control systems in place. So if you're a facility that currently does not have floating roughs and does not have a vapor collection system at your truck rack and you are storing gasoline products and you go over that limit, you will have to comply. That is the federal regulation, so that's why that PAEL number is so important. The EPA really started enforcing that in 2014, all the way up into 2022. We've seen multiple EPA cases in Alaska where facilities going over that 20,000 gallon loading limit were absolutely enforced.
Amanda:
What counts towards the transfer limits Is that gasoline that's sold at marinas bars transfers deliveries to customers.
Shannon:
Yeah, the short answer is none of those. There is a little bit of complexity here and so I don't know that. I want to say for absolutely sure, for every facility and for every situation this is true, but in general, at bulk facilities, the main determination of compliance with air emission standards is transfers of gasoline products at the loading rack, so from a tank to the truck or from the truck back to the tank. There are exceptions to this. So if you're a lawyer and you're listening to this, this is my caveat is it's not just that clean cut, but in general, the EPA and the state are using rack transfers to indicate the level of vapor emissions at the facility as a whole, and that's what the regulation refers to as throughput capacity.
Shannon:
The EPA itself has not actually defined throughput capacity very well, so it's kind of a great area. There are some places where we just don't actually know how the EPA is going to enforce. For those of us in the consulting industry, we need to be much more precise. But if you're just trying to learn about how air permitting applies at tank farms, I think a really good takeaway for this podcast would be to understand that every bulk fuel facility that has gasoline products at it is subject to the NISHAP rules in the state of Alaska air permitting regulations. Also understanding that if you are loading at a tank truck loading rack under 19,900 gallons a day, it's very important to make sure you don't exceed that in a single day because there will be pretty expensive consequences if you change from an EPA defined bulk plant to an EPA defined bulk terminal based on those throughput numbers. It will be a really expensive upgrade for your facility that will be required.
Amanda:
I feel like I have some homework to do.
Shannon:
EPA air regulations and state air regulations always make me feel like this big Debbie Downer, like nobody wants to hear these stories at parties, amanda.
Amanda:
Where should I go online to learn a little bit more about this? I think you had mentioned a couple of links.
Shannon:
Yeah, there's. We'll include a link to the state of Alaska pre-approved emission limit page. So there's the PAEL and ORL forms there and a brief discussion and overview of how you know if this applies to you. And then the EPA itself has an industry specific NISHAP page and I included that for petroleum storage and distribution. So we'll have those two links there and I think that's a good place to start, especially if you're you know, if you're at a facility and responsible for air permit compliance, you could also absolutely talk to anybody at integrity environmental.
Shannon:
We do do air permitting and we specifically look at bulk fuel permitting. We've handled multiple compliance cases with the EPA from beginning to end. We do have a pretty thorough understanding. We have subcontractors that we use for some of the really complex stuff and in general I feel like air permitting is one of the permits that I do think following the DIY route is pretty difficult. There's a lot to miss. It's very complex.
Shannon:
There's a lot of things that are defined by the EPA that are not necessarily matching what people you call things in real life. For example, one of the biggest issues that we see is the EPA defines throughput as the actual physical flow of fuel through a truck, rack or other means of transferring fuel. But a lot of our companies, when they talk about throughput, they're actually talking about sales numbers, like how much fuel they sold on a day. We have a whole training for environmental management teams and terminal managers on how to make sure you're actually using the numbers that relates to fuel at the rack rather than sales numbers, because those two numbers can be different in a whole bunch of different ways.
Amanda:
That might be a feature podcast, it sounds like this might be the beginning of a series.
Shannon:
That's a really good idea, because when I tell people about these really expensive vapor collection systems that we install if you transition between a PAEL and an oral, for most people they're worried about taking a very low, like a facility that maybe only transfers six or 7,000 gallons a day of gasoline. Accidentally having a bad day where they loaded too many trucks, they went up over past the 20,000 gallons and now they have to put all this vapor control and collection systems in, but really they're a five or 6,000 gallon a day facility. None of this is going to actually net them benefit, but for some of our facilities they're running right up to that 19,900 gallon level every single day because they're working really hard to avoid it. Then at some point they decide if 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 they get the oral and they install all the equipment and they convert.
Shannon:
Once they do that, I think it would be fun to have some of the people from John Zinc or something, I don't know. We'll see if we can get them, but have them come in and talk about the different types of systems that you can choose to control your vapor. I think that'd be a good future podcast topic. Also, remember we did a podcast on internal floating roofs previously, and those internal floating roofs are the main compliance factor for tanks and gasoline service If you do go between the bulk plant to the bulk terminal, and so if you're considering this or wanting to know more information about it, I think there's some good nuggets in that internal floating roof episode too.
Amanda:
Great. I'll also include a link to episode three of Tank Talk. I do remember that one. It was pretty fun.
Shannon:
Yeah, I really do like internal floating roofs. There's a lot about them that make me laugh. They have trampoline legs inside, so they remind me of French coffee presses. There's a lot to love about internal floating roofs.
Shannon:
So, just as a reminder, this was me giving a very basic 10,000 foot overview of air permitting as it relates to bulk fuel facilities in the state of Alaska. I feel like it's complex enough and legally enough that I should definitely put a disclaimer out that this is not a professional legal opinion. This is me, as a consultant, trying to explain how air permitting works and why some numbers are key or critical to your operations. You should definitely not rely on this podcast for legal advice or specific consulting advice. When we do provide specific consulting advice, we look at all the aspects of a facility, all the operational components of a facility, and air permitting is so complex that there's a lot going on, and what I said for today, which applies to a pretty standard bulk fuel facility, might not apply at your facility at all, based on some of the other operations or infrastructure that you have.
Amanda:
Well, thank you, Shannon, for explaining in a simplified way the air regulations.
Shannon:
I'm not sure you can do a simplified way with air regulations. Even though we do it so much and I've got a pretty good beat on it, it is still pretty complicated, but I did my best, thank you.
Amanda:
I appreciate it and thank you, Mark, for submitting your question. It was very helpful and it sounds like it's turned us on to a new series. We look forward to it.
Shannon:
Yeah, I hope that more people submit them. These are really. It's very easy to respond to these episode ideas. I appreciate them.