Agenda Item IV-2_PowerPoint

Department of Environmental Quality
Revisions to Rule 02Q .0802, Gasoline Service Stations and Dispensing Facilities
Environmental Management Commission Meeting – May 9, 2024
Acronyms and Abbreviations
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Department of Environmental Quality
Acronym / Abbreviation Definition
DAQ North Carolina Division of Air Quality
EPA U.S. Environmental Protection Agency
HAP hazardous air pollutant
LDT light duty truck
LDV light duty vehicle
NCPCM North Carolina Petroleum & Convenience Marketers
NCCN North Carolina Conservation Network
N.C.G.S.North Carolina General Statute
NPV net present value
ORVR onboard refueling vapor recovery
tpy tons per year
UST underground storage tank
VOC volatile organic compound
Background
02Q .0800 Exclusionary Rules
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Department of Environmental Quality
•The provisions in 15A NCAC 02Q .0800, Exclusionary Rules, redefine potential emissions
as actual emissions for certain industries, allowing a facility to remain a minor source for
Title V and HAPs so long as their actual emissions remain below:
•100 tpy of each regulated criteria pollutant;
•25 tpy of all HAPs; and
•10 tpy of each individual HAP.
•Rule 02Q .0802 provides that Gasoline Service Stations and Dispensing Facilities may
remain exempt from permitting if annual throughput remains below 15 million gallons.
•Compliance with the annual exclusionary threshold is determined on a calendar month
rolling average basis.
Background
Current 02Q .0802 Exclusionary Rule
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Department of Environmental Quality
•Originally adopted and became effective on August 1, 1995, with the 15 million gallon annual throughput threshold on a calendar month rolling average basis.
•Emissions from these facilities result from:
•Underground Storage Tanks (UST) activities filling, breathing, and emptying; and
•Refueling of vehicles at these stations (refueling displacement losses and spillage).
•Also requires incremental reporting to the DAQ:
•Annually once the facility throughput exceeds 10 million gallons; and
•Semiannually once the facility throughput exceeds 13 million gallons.
•Once the throughput exceeds 15 million gallons, the facility must submit a permit application.
Background
EPA Motor Vehicle Emission Standards
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Department of Environmental Quality
•In April 1994, EPA promulgated standards for installation of onboard refueling vapor
recovery (ORVR) technology in new light duty vehicles (LDVs) and light duty trucks
(LDTs).
•Beginning in 1998, the standards gradually increased ORVR requirements to various
portions of the vehicle fleet, determined by vehicle type and model year.
•In 2012, EPA determined that ORVR technology is in widespread use throughout the
motor vehicle fleet for purposes of controlling motor vehicle refueling emissions.
•Over time, non-ORVR vehicles in the fleet will continue to be replaced with ORVR
vehicles.
Proposal Overview
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Department of Environmental Quality
•ORVR technology in the vehicle fleet reduces the vehicle refueling displacement component of the total emissions calculation for gasoline service stations and dispensing facilities.
•As the percentage of the vehicle fleet with ORVR increases, so does the maximum amount of gasoline these facilities can dispense while keeping actual emissions below major source thresholds.
Therefore, the DAQ is proposing an increase to the annual throughput limit in 15A NCAC 02Q .0802 to incorporate the presence of vapor recovery technology in the vehicle fleet and current AP-42 emission factors.
•Application of the phased-in EPA requirements to the recent vehicle registration inventory in North Carolina indicates approximately 85% of the State’s LDVs and LDTs would be equipped with ORVR.
•The recalculated threshold of 52 million gallons reflects 85% of LDVs and LDTs in NC equipped with ORVR that achieves 98% control efficiency of gasoline vapors.
Proposed Rule Revision
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Department of Environmental Quality
(d) A gasoline service station or gasoline dispensing facility that has an annual throughput, on a calendar
month rolling average basis, of less than 15,000,000 52,000,000 gallons shall be exempt from the
requirements of 15A NCAC 02Q .0500.
(e) The owner or operator of a gasoline service station or gasoline dispensing facility exempted by this Rule
from 15A NCAC 02Q .0500 shall submit a report containing the information described in Paragraph (f) of this
Rule if:
(1) annual throughput exceeds 10,000,000 45,000,000 gallons, by the end of the month following the
month that throughput exceeds 10,000,000 45,000,000 gallons and every 12 months thereafter;
(2) annual throughput exceeds 13,000,000 50,000,000 gallons, by the end of the month following the
month that throughput exceeds 13,000,0000 50,000,000 gallons and every six months thereafter;
or
(3) annual throughput equals or exceeds 15,000,000 52,000,000 gallons, by the end of the month
following the month that throughput equals or exceeds 15,000,000 52,000,000 gallons and shall
submit a permit application pursuant to 15A NCAC 02Q .0500.
Reporting Thresholds
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Department of Environmental Quality
•The increment between the Title V Exclusionary Threshold in (e)(3) and the Semiannual Reporting
threshold in (e)(2) remains the same (2 MMgal) between the current and proposed rule.
•The increment between the Title V Exclusionary Threshold in (e)(3) and the Annual Reporting threshold
in (e)(1) is proposed to increase (from 5 MMgal to 7 MMgal), which will allow adequate runway for the
DAQ to track facilities approaching the exclusionary threshold.
Current Proposed
02Q .0802
Subparagraph
Triggered
Requirement
Threshold
(MMgal)
Incremental
Differences
Threshold
(MMgal)
Incremental
Differences
(e)(1)Annual Reporting 10 45
(e)(2)Semiannual Reporting 13 50
(e)(3)Title V Permit 15 522 MMgal
5 MMgal
3 MMgal 5 MMgal
2 MMgal
7 MMgal
Hearing Report on Proposed Rule Amendment
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Department of Environmental Quality
Public Hearing: February 8, 2024
Hearing Officer: Commissioner Tim Baumgartner
Comment Period: January 2, 2024 – March 4, 2024
Commenters: North Carolina Petroleum & Convenience Marketers (NCPCM)
North Carolina Conservation Network (NCCN)
EPA Region 4
Hearing Report Summary
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Department of Environmental Quality
•Three letters received via email during the comment
period.
•The public hearing was held on February 8, 2024. There
was one attendee from the public, but no comments
were made at the public hearing.
•One comment resulted in a revision to the proposed rule.
Summary of Comments from NCPCM and EPA Region 4
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Department of Environmental Quality
From Comment Received DAQ Response
NCPCM
The NCPCM expressed support
of the proposed rule
amendment.
The DAQ thanks the commenter for their interest and
support of the rulemaking.
EPA Region 4 Letter of acknowledgement with
no comments on the proposed
rule.
The DAQ thanks the EPA for their review and
communication about the proposed rule.
Summary of Comments from NCCN
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Department of Environmental Quality
Comment Received DAQ Response
The NCCN noted that the rule does not address a
facility with a throughput of exactly 52 million
gallons.
The DAQ thanks the NCCN for noting this potential gap and has
added the language “equals or” to Subparagraph (e)(3) of the
proposed rule in Chapter II of the Hearing Record.
The NCCN expressed concern about the
calculation of the proposed exclusionary
threshold, including:
The DAQ clarified several points about the calculation and factors
used to derive the proposed threshold:

The EPA factor for underground storage tank
(UST) filling emissions is 4 - 6x lower than the
emission factors resulting from a 2018 study
of gas station emissions cited by the
commenter.

Several different EPA factors were used to derive the
proposed threshold. The combination of the UST filling and
standing emissions factors is comparable to the factors from
the 2018 study provided by the commenter.

Use of the 2018 study factors with a monthly
threshold of 15 million gallons may result in an
emission rate greater than the 25 tons per
year (tpy).

The exclusionary threshold is an annual threshold, not
rolling average basis.

The 2018 study factors represent total gasoline emissions,
HAP threshold.
Summary of Comments from NCCN(continued)
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Department of Environmental Quality
Comment Received DAQ Response
The NCCN expressed concern about the use of this
calculation methodology in future Title V permits for
large “mega-stations”.
The DAQ cannot assume a future facility’s major source
status under Title V regardless of the planned size, since
the utilization rate of the gas pumps is unknown. The
calculation used to derive the proposed exclusionary
threshold uses federal emission factors and is consistent
with EPA methodologies.
Supporting calculations for the proposed exclusionary threshold are provided in Chapter VI of the Hearing Report
Facilities
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Department of Environmental Quality
•Potentially impacted facilities include gasoline stations and dispensing facilities with
throughputs exceeding the current threshold of 15 million gallons, but lower than the
proposed threshold of 52 million gallons.
•Currently 4 gasoline stations in North Carolina hold synthetic minor permits due to
having a throughput greater than 15 million gallons. Since their annual
throughputs are lower than 52 million gallons, they would no longer need to hold a
synthetic minor permit to avoid Title V permitting requirements.
•There is one additional gasoline station expected to apply for a synthetic minor
permit before these rule revisions come into effect.
•Therefore, the fiscal analysis is based on 5 facilities that would no longer need to
hold a permit upon finalization of the proposed rule revisions.
Regulatory Impact Analysis
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Department of Environmental Quality
•Fiscal impacts to 5 facilities in the private sector, including:
•Savings in annual permit fees;
•Savings in labor for activities related to synthetic minor permits:
•Preparation of annual compliance reports;
•Preparation of annual emissions inventory submittals; and
•Preparation of permit renewal applications (every 8 years for each synthetic minor permit).
•Fiscal impacts to the State (DAQ) include:
•Reduced revenues in annual permit fees received;
•Savings in labor for activities related to synthetic minor permits:
•Annual inspections;
•Review of annual compliance reports and emissions inventories; and
•Review of permit renewal applications (every 8 years for each synthetic minor permit).
Regulatory Impact Analysis
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Department of Environmental Quality
Cost(+)/Savings(-) Type 2024 2025 2026 2027 2028 2029 2030 2031
Private Sector (undiscounted, inflation-adjusted 2023$)
Annual Fees -$5,488 -$5,354 -$5223 -$5,096 -$4,972 -$4,850 -$4,732 -$4,617
Staff Time – Malfunction Report -$5,718 -$5,718 -$5,718 -$5,718 -$5,718 -$5,718 -$5,718 -$5,718
Staff Time – Renewal Application and Emission Inventory Preparation $0 $0 $0 -$4,529 $0 -$4,529 -$4,529 -$9,059
Total Net for Private Sector -$11,206 -$11,072 -$10,942 -$15,343 -$10,690 -$15,098 -$14,980 -$19,394
State Government (DAQ) (undiscounted, inflation-adjusted 2023$)
Annual Fees $5,488 $5,354 $5,223 $5,096 $4,972 $4,850 $4,732 $4,617
Staff Time - Inspections -$4,143 -$4,143 -$4,143 -$4,143 -$4,143 -$4,143 -$4,143 -$4,143
Staff Time - Malfunction Report Review and Processing -$838 -$838 -$838 -$838 -$838 -$838 -$838 -$838
Staff Time - Permit Renewal and Emission Inventory Review $0 $0 $0 -$1,584 $0 -$1,584 -$1,584 -$3,533
Total Net for State Government $507 $373 $242 -$1,469 -$9 -$1,715 -$1,833 -$3,533
Summary
Grand Total (undiscounted, inflation-adjusted 2023$)-$10,699 -$10,699 -$10,699 -$16,813 -$10,699 -$16,813 -$16,813 -$22,926
Grand Total (present value at 7% discount rate, 2023$)-$9,999 -$9,345 -$8,734 -$12,826 -$7,628 -$11,203 -$10,470 -$13,343
Net Present Value (7% discount rate, 2023$)-$83,548
Department of Environmental Quality
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 May 2023 Concept to Air Quality Committee (AQC)
 September 2023 Draft Rule to AQC
 November 2023 Request to Environmental Management Commission (EMC) to Proceed to Comment and Hearing
 January 2024 - March 2024 Public Comment Period and Hearing
→ May 2024 Adoption by EMC
June 2024 Rules Review Commission Approval
July 2024 Tentatively Effective
Revisions to Exclusionary Rule 02Q .0802,
Gasoline Service Stations and Dispensing Facilities
Tentative Rulemaking Timeline (Subject to Change)
Recommendation
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Department of Environmental Quality
The Hearing Officer recommends the proposed amendments to 15A
NCAC 02Q .0802 as presented in Chapter II of the hearing report, the
approved regulatory impact analysis contained in Chapter VI of the
hearing report, and the Hearing Officer’s Report be adopted by the
Environmental Management Commission.
Contact
Department of Environmental Quality
Carrie Pickett
Rule Development Branch
NC Division of Air Quality
919 707 8463 office
[e-mail]
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Katie Quinlan, EIT
Rule Development Branch Supervisor
NC Division of Air Quality
919 707 8702 office
[e-mail]
Department of Environmental Quality
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