NESHAP/US Environmental Protection Agency Proposed Performance Standards for Bulk Gasoline Terminal Technology Review: Energy Marketers of America Submits Comments | Mitchell, Williams, Selig, Gates & Woodyard, LLC
Energy Marketers of America (“EMA”) submitted comments on September 13 on the U.S. Environmental Protection Agency’s (“EPA”) proposed rule regarding national Clean Air emission standards Hazardous Air Pollutants Act (“NESHAP”) for gasoline dispensing facilities and the Performance Standards for Bulk Gasoline Terminals (“proposed rule”). See 87 Fed. Reg. 35608-35642 (June 10, 2022).
The EMA describes itself as a federation of 47 state and regional trade associations representing small energy marketing companies across the United States. Its members operate exclusively under the terminal rack and supply 80% of all finished petroleum products nationwide, including gasoline, diesel fuel, biofuels, heating fuel, jet fuel, kerosene, fuel racing and lubricating oils. These oil traders own and operate approximately 60,000 retail gas stations nationwide as well as thousands of small intermediate bulk plants serving wholesale accounts.
The Arkansas Oil Marketers Association is a member state of the EMA.
The proposed rule constitutes the Residual Risks and Technology (“RRTR”) rule for gasoline dispensing facilities and performance standards for the NESHAP category of bulk gasoline terminals. The EPA had previously established Maximum Available Control Technology (“MACT”) standards for the major gasoline dispensing source category in 1994 and conducted a RRTR review in 2006.
Sources affected by the main NESHAP source for the Gasoline Distribution source category include:
- Bulk Gasoline Terminals
- Pipeline diversion stations
Sources affected by the NESHAP area source for the Gasoline Distribution source category include:
- Bulk Gasoline Terminals
- bulk gasoline plants
- Pipeline facilities
The EMA’s comments initially note that its members typically operate small intermediate bulk plants with 1,000 to 40,000 gallon storage capacity to supply wholesale customer accounts. These customers include farmers, state and local government entities, private fleet operators, school bus contractors, and car dealerships (among others).
The rationale for energy traders to use gasoline storage at bulk storage plants is stated to include:
- Intermediate gasoline storage is required when terminals are too far apart to make daily trips from the terminal rack directly to end users (noting that typical daily throughput of gasoline can range from a few hundred gallons to 7,000 gallons per day with a few days of no gas flow).
- Tanker Size Prohibitions (Smaller top-loading bobtail trucks with a capacity of 4,000 gallons or less are used to deliver gasoline to wholesale accounts due to the low volume required by wholesale customers.)
- Servicing wholesale accounts with large transport tank trailers is not possible due to the small volume that wholesale customers can accommodate at the same time.
The EMA considers that the EPA has significantly underestimated the economic impact of the proposed rule on small energy marketing companies. The Association said a recent survey of 650 small bulk facilities indicated:
- 72% of respondents said they would close or stop selling gasoline at one or more bulk storage plants if they had to upgrade with vapor balancing equipment
- 14% said they already have Steam Balancing
- The remaining 14% either didn’t know if they would upgrade or didn’t answer the question
Note that the EMA indicates that most of these bulk plants use top loading with a much smaller number using bottom loading.
The maximum daily design throughput is also considered an inaccurate way to define the compliance threshold, as it is stated to be not representative of the actual daily throughput.
The survey reportedly indicated that when analyzing the tank sizes of 88 respondents with a single bulk storage plant:
- 26% had tank sizes greater than 4,000 gallons but less than 10,000 gallons
- 56% had tanks under 20,000 but over 10,000 gallons
- 16% had tanks over 20,000 gallons
Eighty-four percent of respondents would have reported an actual daily flow of less than 4,000 gallons.
The EMA argues that lowering the current compliance threshold of 20,000 gallons to the maximum daily design threshold of 4,000:
. . . would bring virtually all small bulk power plants into NESHAP steam balancing requirements. The EMA believes this unfairly subjects small energy marketing companies to the same regulatory requirements as much larger gasoline distribution facilities.
The EMA also argues that the Congressional Findings and Statement of Intent in the preamble to the Regulatory Flexibility Act require the EPA to recognize the differences and scale of resources of regulated entities in order to avoid the effects negative on the competition.
The Association argues that the EPA failed to achieve these goals when developing the proposed NESHAP for small bulk gasoline storage facilities. He cites a lack of awareness of small bulk gasoline operators as opposed to awareness of large gasoline distributors who were consulted.
EPA’s statement that only 111 small entities are affected by the proposed rule is deemed inaccurate as it cites a survey conducted over a week-long period that resulted in 209 entity responses. These responses would have indicated that the proposed rule would have a significant economic impact.
Issues cited also include:
- Cost estimates on file are out of date
- Maximum daily design flow is a compliance threshold is not an accurate or meaningful method to control emissions of hazardous air pollutants from small bulk gasoline plants
A copy of the EMA comments can be downloaded here.