Lower sulfur-in-fuel limits for distillate and residual oils, remove expired provisions and correct typographical errors.
Text of final rule:
A new Subdivision 200.1(cw) is added as follows:
(cw) Waste Oil. Used and/or reprocessed engine lubricating oil and/or any other used oil, including but not limited to, fuel oil, engine oil, gear oil, cutting oil, transmission fluid, hydraulic fluid, dielectric fluid, oil storage tank residue, animal oil, and vegetable oil, which has not subsequently been re-refined.
(Existing sections 200.2 through 200.8 remain unchanged.)
Existing section 200.9, Table 1 is amended as follows:
Regulation
Referenced Material
Availability
225-1.5(b)
40 CFR Part 60, Appendix B, July 1, 2006, Performance Specification 2, pages 639-646
(Existing section 200.10 through section 200.16 remains unchanged.)
Existing 6 NYCRR Subpart 225-1, Fuel Composition and Use - Sulfur Limitations is repealed.
A new Subpart 225-1, Fuel Composition and Use - Sulfur Limitations is added as follows:
Section 225-1.1 Definitions.
(a) To the extent that they are not inconsistent with the specific definitions in Subdivision (b) of this Section, the general definitions of Part 200 and Part 201 of this Title apply.
(b) For the purpose of this Subpart, the following definitions also apply:
(1) Fuel distributor. Any person who transports, stores, or causes the transportation or storage of distillate oil, residual oil, and/or coal at any point between a refinery/mine or importer's facility and a retail outlet or wholesale purchaser-consumer’s facility.
Section 225-1.2 Sulfur-in-fuel limitations. No person will sell, offer for sale, purchase, or fire any fuel which exceeds the sulfur-in-fuel limitations of this Section, except as provided in Sections 225-1.3 or 225-1.4 of this Subpart. For the purposes of this Subpart liquid bio-fuels, other than waste oils, will be required to meet the sulfur-in-fuel standards of either number two heating oil or distillate oil.
(a) Owners and/or operators of any stationary combustion installation(s) that fire(s) coal and has a total heat input greater than 250 million Btu per hour, where an application for a permit was received by the department after March 15, 1973, and the stationary combustion installation is not located in New York City or Nassau, Rockland or Westchester Counties, are limited to the firing of coal with 0.60 pound of sulfur per million Btu gross heat content or less. If two or more emission sources are connected to a common air cleaning device and/or emission point, the total heat input for such emission point is the sum of the total heat input of all emission sources which are operated simultaneously and connected to the common air cleaning device and/or emission point; or
(b) Owners and/or operators of any stationary combustion installation that fires either solid fuels or oil are limited to the firing of solid fuels or oil with a sulfur content listed in the table below through June 30, 2014:
Area
Liquid fuel (percent sulfur by weight)
Solid fuel (pounds of sulfur per million Btu gross heat content)
Residual
Distillate*
New York City
0.30
0.20
0.2 MAX
Nassau, Rockland and Westchester Counties
0.37
0.37
0.2 MAX
Suffolk County: Towns of Babylon, Brookhaven, Huntington, Islip, and Smith Town
1.00
1.00
0.6 MAX
Erie County: City of Lackawana and South Buffalo**
1.10
1.10
1.7 MAX and 1.4 AVG***
Niagara County and remainder of Erie County
1.50
1.50
1.7 MAX and 1.4 AVG***
Remainder of State
1.50
1.50
2.5 MAX, 1.9 AVG***, and 1.7 AVG (ANNUAL)****
* Except for number two heating oil as stated in Subdivision (f) of this Section.
** South Buffalo is defined as the area in the City of Buffalo south of a line from the intersection of IR 190 and Route 5 and proceeding east along IR 190 to the city line.
*** Averages are computed for each emission source by dividing the total sulfur content by the total gross heat content of all solid fuel received during any consecutive three-month period.
**** Annual averages are computed for each emission source by dividing the total sulfur content by the total gross heat content of all solid fuel received during any consecutive 12-month period.
(c) Owners and/or operators of any stationary combustion installation that fires solid fuels are limited to the firing of solid fuel with a sulfur content listed in the table below on or after July 1, 2014:
Area
Solid fuel (pounds of sulfur per million Btu gross heat content)
New York City
0.2 MAX
Nassau, Rockland and Westchester Counties
0.2 MAX
Suffolk County: Towns of Babylon, Brookhaven, Huntington, Islip, and Smith Town
0.6 MAX
Erie and Niagara Counties
1.7 MAX, 1.4 AVG*
Remainder of State
2.5 MAX, 1.9 AVG*, and 1.7 AVG (ANNUAL)**
* Averages are computed for each emission source by dividing the total sulfur content by the total gross heat content of all solid fuel received during any consecutive three-month period.
** Annual averages are computed for each emission source by dividing the total sulfur content by the total gross heat content of all solid fuel received during any consecutive 12-month period.
(d) Owners and/or operators of any stationary combustion installation that fires residual oil are limited to the firing of residual oil with a sulfur content listed in the table below on or after July 1, 2014:
Area
Residual Oil (percent sulfur by weight)
New York City
0.30
Nassau, Rockland and Westchester Counties
0.37
(e) Owners and/or operators of any stationary combustion installation that fires residual oil are limited to the purchase of residual oil with a sulfur content listed in the table below on or after July 1, 2014, and are limited to the firing of residual oil with a sulfur content listed in the table below on or after July 1, 2016:
Area
Residual Oil (percent sulfur by weight)
Suffolk County: Towns of Babylon, Brookhaven, Huntington, Islip, and Smith Town
0.50
Erie and Niagara Counties
0.50
Remainder of State
0.50
(f) Owners and/or operators of commercial, industrial, or residential emission sources that fire number two heating oil on or after July 1, 2012 are limited to the purchase of number two heating oil with 0.0015 percent sulfur by weight or less.
(g) Owners and/or operators of a stationary combustion installation that fires distillate oil other than number two heating oil are limited to the purchase of distillate oil with 0.0015 percent sulfur by weight or less on or after July 1, 2014.
(h) Owners and/or operators of any stationary combustion installation that fires distillate oil including number two heating oil are limited to the firing of distillate oil with 0.0015 percent sulfur by weight or less on or after July 1, 2016.
(i) Owners and/or operators of any stationary combustion installation that fires waste oil on or after July 1, 2014 are limited to the firing of waste oil with 0.75 percent sulfur by weight or less.
Section 225-1.3 Exceptions contingent upon fuel shortage.
(a) Upon application by a facility owner or a fuel distributor the department may issue an order granting a temporary exception from the provisions of this Subpart where it can be shown, to the department’s satisfaction, that there is an insufficient supply of conforming fuel, either:
(1) of the proper type required for firing in a particular emission source; or
(2) generally throughout an area of the State.
(b) The New York State Energy Research and Development Authority must certify that there exists an insufficient supply of fuel which conforms to the standards in this Subpart before a sulfur-in-fuel exception may be granted under this Subdivision.
(c) The department may grant a sulfur-in-fuel exception contingent upon a fuel shortage for a period not longer than 45 days.
(d) The department may grant a sulfur-in-fuel exception contingent upon a fuel shortage for a period longer than 45 days, but not longer than one year, only after a public hearing is held to gather information relevant to such an exception. The applicant for the exception must publish notice of such hearings, in a form acceptable to the department, in a newspaper of general circulation in the area for which the exception is sought. The applicant will bear the cost of publication of the notice, of the hearing transcript, and for rental of space in which the hearing is conducted.
(e) The department recognizes that, pursuant to section 117 of article 5 of the Energy Law, provisions of this Subpart may be pre-empted when the Governor declares that an energy or fuel supply emergency exists or is impending.
Section 225-1.4 Variances.
(a) Fuel mixtures or equivalent emission rate variances. Fuels with sulfur content greater than that allowed by this Subpart may be fired when the facility owner can demonstrate that sulfur dioxide emissions do not exceed the value for S calculated using the following equation: S = (1.1AM + 2BT)/(M + T) where:
S = Allowable sulfur dioxide emission (in pounds per million Btu)
A = Sulfur in oil allowed by Section 225-1.2 of this Subpart (in percent by weight)
B = Average sulfur in solid fuel allowed by Section 225-1.2 of this Subpart (in pounds of sulfur per million Btu gross heat content)
M = Percent of total heat input from liquid fuel
T = Percent of total heat input from solid fuel (including coal, coke, wood, wood waste, and refuse-derived fuel)
Fuel mixtures and equivalent emission rate variances only apply to processes or stationary combustion installations. Compliance will be based on the total heat input from all fuels fired, including gaseous fuels. Any process or stationary combustion installation owner who chooses to fire a fuel mixture pursuant to this Subdivision is subject to the emission and fuel monitoring requirements of Section 225-1.5 of this Subpart.
(b) Experiments variance. Upon application, the department may issue a variance allowing the sale, offering for sale, purchase and firing of fuel having a sulfur content in excess of the limits imposed by this Subpart, where such fuel would be fired to demonstrate the performance of experimental equipment and/or process(es) for reducing sulfur compounds from an emission source.
(c) Coal and coke. In New York City and Nassau, Rockland and Westchester Counties, the commissioner will permit:
(1) the sale and the continued, but not increased, purchase and use of coal and coke for installations with a maximum operating heat input equal to or less than one million Btu per hour if coal and coke has been used continuously since December 31, 1967 and the maximum sulfur content does not exceed 0.6 pound per million Btu gross heat content; or
(2) the sale, purchase and use of coal and coke for approved conversions of existing stationary combustion installations to the use of coal, and for new coal-fired stationary combustion installations, provided that the coal conversion or new stationary combustion installations meet all applicable air quality and State Environmental Quality Review requirements.
Section 225-1.5 Emissions and fuel monitoring.
(a) The provisions of this section apply to owners of stationary combustion installations:
(1) with a total heat input greater than 250 million Btu per hour. If two or more emission sources are exhausted through a common emission point, the total heat input for such an emission point is either the sum of the maximum operating heat inputs of all emission sources which are operated simultaneously and exhausted through the common emission point, or the maximum operating heat input of any individual emission source operated independently and connected to the common emission point, whichever is greater;
(2) which are equipped with approved sulfur dioxide control equipment; or
(3) which are subject to a sulfur dioxide equivalent emissions rate for a fuel mixture pursuant to Subdivision 225-1.4(a) of this Subpart.
(b) Instruments for continuously monitoring and recording sulfur compound emissions (expressed as sulfur dioxide) must be installed and operated at all times that the stationary combustion installation is in service. Such instruments must be operated in accordance with manufacturer's instructions, must satisfy the criteria in “performance specification 2”, appendix B, part 60 of title 40 of the Code of Federal Regulations (see Table 1, Section 200.9 of this Title), and must be acceptable to the department. Exceptions to these requirements are:
(1) stationary combustion installations where gaseous fuel is the only fuel fired; or
(2) stationary combustion installations, not including any equipped with sulfur dioxide control equipment, whose fuel is subjected to representative sampling and sulfur analysis conducted in a manner approved by the department; or
(3) stationary combustion installations required to use the continuous monitoring specifications under 40 CFR part 75 (see Table 1, Section 200.9 of this Title).
(c) Measurements must be made daily of the rate of each fuel fired. The gross heat content and ash content of each fuel fired must be determined at least once each week. In the case of stationary combustion installations producing electricity for sale, the average electrical output and the hourly generation rate must also be measured.
Section 225-1.6 Reports, sampling, and analysis.
(a) The department will require fuel analyses, information on the quantity of fuel received, fired or sold, and results of stack sampling, stack monitoring, and other procedures to ensure compliance with the provisions of this Subpart.
(b)(1) Any person who sells oil and/or coal must retain, for at least five years, records containing the following information:
(i) fuel analyses and data on the quantities of all oil and coal received; and
(ii) the names of all purchasers, fuel analyses, and data on the quantities of all oil and coal sold.
(2) Such fuel analyses must contain, as a minimum:
(i) data on the sulfur content, ash content, specific gravity, and heating value of residual oil;
(ii) data on the sulfur content, specific gravity, and heating value of distillate oil; and
(iii) data on the sulfur content, ash content, and heating value of coal.
(c) Sampling, compositing, and analysis of fuel samples must be done in accordance with methods acceptable to the department.
(d) Facility owners or fuel distributors required to maintain and retain records pursuant to this Subpart must make such records available for inspection by the department.
(e) Data collected pursuant to this Subpart must be tabulated and summarized in a form acceptable to the department, and must be retained for at least five years. The owner of a Title V facility must furnish to the department such records and summaries, on a semiannual calendar basis, within 30 days after the end of the semiannual period. All other facility owners or distributors must submit these records and summaries upon request of the department.
(f) Facility owners subject to this Subpart must submit a written report of the fuel sulfur content exceeding the applicable sulfur-in-fuel limitation, measured emissions exceeding the applicable sulfur-in-fuel limitation, measured emissions exceeding the applicable equivalent emission rate, and the nature and cause of such exceedances if known, for each calendar quarter, within 30 days after the end of any quarterly period in which an exceedances takes place.
Section 225-1.7 Severability.
Each provision of this Part shall be deemed severable, and in the event that any provision of this Part is held to be invalid, the remainder of this Part shall continue in full force and effect.
Final rule as compared with last published rule:
Nonsubstantive changes were made in section 225-1.2(f), (g), (h) and (i).
Text of rule and any required statements and analyses may be obtained from:
Michael Jennings, NYSDEC, Division of Air Resources, 625 Broadway, Albany, NY 12233-3254, (518) 402-8403, email: airregs@gw.dec.state.ny.us
Additional matter required by statute:
Pursuant to Article 8 of the State Environmental Quality Review Act, a Short Environmental Assessment Form, a Negative Declaration and a Coastal Assessment Form have been prepared and are on file.
Summary of Revised Regulatory Impact Statement
INTRODUCTION
The New York State Department of Environmental Conservation (Department) is proposing to revise 6 NYCRR Subpart 225-1, “Fuel Composition and Use - Sulfur Limitations” and 6 NYCRR Part 200, “General Provisions.” Subpart 225-1 imposes limits on the sulfur content of distillate oil, residual oil, and coal fired in stationary sources. The Department is proposing these changes to both implement a statutory requirement and meet our obligations to reduce air pollution. The revisions to Subpart 225-1 will be a component of the State Implementation Plan (SIP) for New York State (NYS) directed at attainment of the particulate matter less than or equal to 2.5 microns in diameter (PM-2.5) national ambient air quality standard (NAAQS), the sulfur dioxide (SO2) NAAQS and the Department’s obligations under the regional haze SIP submitted to U.S. Environmental Protection Agency (EPA) on March 15, 2010. This is a requirement flowing from the State’s obligations under the Clean Air Act. This is not a mandate on local governments. It applies to any entity that owns or operates a subject stationary source. This proposal will not regulate transportation fuel.
The revisions to Part 200 incorporate references to federal rules and add a definition for “waste oil”. The revisions to Subpart 225-1 primarily include the lowering of the sulfur-in-fuel limits for all distillate and residual oils sold, purchased, and/or used in portable (not including non-road engines) or stationary sources in New York State. These revisions will also include the removal of “out-of-date” sulfur-in-fuel tables, expired source specific variances, and the correction of typographical errors. In addition, the Department is removing the variance for emission sources with a maximum operating heat input greater than one million Btu per hour (mmBtu/hr) heat input rate that fire coal and coke in New York City, Nassau, Rockland, and Westchester Counties.
STATUTORY AUTHORITY
The following Sections of the Environmental Conservation Law (ECL) allow the Department to promulgate and implement the proposed regulation: Section 1-0101, Section 3-0301, Section 19-0103, Section 19-0105, Section 19-0301, Section 19-0303, Section 19-0305, Section 19-0325, Section 71-2103, and Section 71-2105.
LEGISLATIVE OBJECTIVES
Article 19 of the ECL was adopted for the purpose of safeguarding the air resources of New York from pollution. To facilitate this purpose, the Legislature bestowed specific powers and duties on the Department including the power to formulate, adopt, promulgate, amend, and repeal regulations for preventing, controlling or prohibiting air pollution. This authority also specifically includes promulgating rules and regulations for preventing, controlling or prohibiting air pollution in such areas of the State as shall or may be affected by air pollution, and provisions establishing areas of the State and prescribing for such areas (1) the degree of air pollution or air contamination that may be permitted therein, and (2) the extent to which air contaminants may be emitted to the air by any air contamination source. In addition, this authority also includes the preparation of a general comprehensive plan for the control or abatement of existing air pollution and for the control or prevention of any new air pollution recognizing various requirements for different areas of the State. The legislative objectives underlying the above statutes are directed toward protection of the environment and public health. The proposed rulemaking will further the goals of the above referenced statutes by reducing air pollution, specifically SO2 emissions, a criteria pollutant and a precursor to PM-2.5 which in turn is a precursor to visibility-impairing haze from the majority of oil firing stationary sources throughout New York. These reductions will reduce the health impacts of said pollutants by providing cleaner air.
NEEDS AND BENEFITS
Regional haze refers to the presence of light-inhibiting pollutants in the atmosphere. These particles and gases scatter or absorb light to cause a net effect referred to as “light extinction.” This scattering and absorbing occurs across the sight path of an observer, thus leading to a hazy condition. Emissions of pollutants such as SO2, PM-10, and PM-2.5 are the primary contributors to visibility problems. These pollutants lend themselves to being transported great distances once they enter the atmosphere. Accordingly, sources contribute to visibility impairment in Class I areas far downwind of their locations, thereby necessitating a regional approach to solving the haze issue.
There are many environmental benefits inherent in the reductions of PM and SO2 that do not explicitly relate to visibility improvement. These reductions will lead to advances in health protection as well. Although downwind rural and urban areas within NYS were not specifically targeted through the Regional Haze Rule, these areas can expect to benefit from improved air quality. In addition to experiencing improved visibility, forested areas such as the Adirondack Park will benefit from reduced PM acid deposition impacts, which are described below. These environmental impacts could also be expected to translate into economic benefits from increased public use of a cleaner and visibly healthier park.
Elevated PM levels are of concern for the New York City metropolitan area, which has been designated as non-attainment for the annual and 24-hour PM-2.5 NAAQS. PM consists of microscopic solid or liquid particles, and is the major cause of the regional haze issue. PM can be emitted directly from stationary sources, or comprised of nitrate and sulfate particles formed through reactions involving NOx and SO2 in the atmosphere. These particles are small enough to be inhaled into the lungs, and can even enter the bloodstream. Ongoing scientific studies show that particulate inhalation, similarly to ozone, leads to health problems such as coughing, difficulty breathing, aggravated asthma, and a higher likeliness for other respiratory disorders. Studies have also shown that elevations in PM concentrations are associated with such cardiovascular threats as irregular heartbeat and non-fatal heart attacks. Increased PM exposure may even cause premature death in those with existing heart or lung disease.
The proposed changes to Subpart 225-1 are intended to reduce the emission of SOx that are the precursors of PM below the present levels. Existing regulations and emission control programs have been successful in the past at reducing these emissions. Regulatory efforts such as the Acid Rain program, past state and federal fuel sulfur limitations for stationary and mobile sources, and efforts like the Clean Air Interstate Rule have had a significant effect on air quality and health. The proposed sulfur-in-fuel limits in this rule are expected to further reduce monitored values of SOx, and to enable and maintain attainment of the NAAQS.
Stakeholder Meetings
The Department held two stakeholder meetings to discuss its proposed revisions to Subpart 225-1. The first stakeholder meeting was held on June 24, 2010 and the second on November 21, 2011. The Department solicited comments on the proposed rule from the stakeholders. Both stakeholder meetings consisted of attendees from the regulated community (oil manufacturers, oil distributors, and end users) to be affected by the proposed regulation, consultants (both technical and legal), and interested environmental groups. There were two primary concerns raised at the stakeholder meetings. The first involved timing because of the statute. Stakeholders were concerned that the Department would be unable to promulgate a regulation prior to the compliance date contained in the statute. The second also concerned compliance dates. Stakeholders were concerned about phase in of compliance dates for the remainder of distillate oil. Many subject facilities use distillate as back up fuel and fire it very infrequently. These facilities requested time to be able to use and/or blend down their reserve fuel. Based upon these comments the Department proposed a phased in compliance approach. While the July 1, 2012 compliance date for number 2 heating oil is in statute and therefore may not be changed by regulation, the regulation requires a July 1, 2014 compliance date for the purchase of complying oil and a July 1, 2016 compliance date for the firing of these oils.
COSTS
Costs to Regulated Parties and Consumers:
Stationary sources subject to the Subpart 225-1 provisions may incur increased fuel oil costs associated with this proposed regulation. There are several factors that may affect fuel oil prices. These factors include but are not limited to fuel availability, price of crude oil, production costs, storage costs, increase in taxes on oil, overall demand based on weather conditions, and natural gas availability and price. The refining process used to produce lower sulfur content oils (less than 500ppm sulfur content oils) is different from the refining process currently used to manufacture oil with a sulfur content greater than 500 ppm. There will be an initial cost to the oil manufacturers associated with conversion of the current refining process to the new refining process. Therefore, the Department anticipates that production costs will increase. However, based on all of the above listed factors there may or may not be an increase in oil prices (there is the possibility that oil prices could decrease). Setting aside the other factors, the Department conducted a cost analysis based solely upon the increase in production costs and availability of oil to the consumer.
The Department evaluated the availability and production cost of distillate oil with sulfur-by-weight specifications of 500 ppm (low sulfur distillate oil) in 2014 and 15 ppm (ultra-low sulfur distillate oil) in 2018 for the northeast U.S. that corresponds to the MANE-VU Region. The Department based this analysis on currently available refinery studies conducted for the National Oil Heat Research Alliance (NORA) and American Petroleum Institute (API), Energy Information Agency (EIA) data, and a public health benefits study conducted by Northeast States for Coordinated Air Use Management (NESCAUM). The NORA report concludes that as the demand for low and ultra-low sulfur distillate oil increases, the sources of supply and refining capacity for low and ultra-low sulfur distillate oil will be reconfigured for greater production capability. The API report projects that sufficient supplies of low sulfur distillate oil will be available to meet the demand that will be generated from the implementation of a low sulfur distillate oil standard in 2010 for New York State. The NESCAUM report determined overall health care savings from the implementation of both low and ultra-low sulfur distillate oil standards. (Public Health Benefits of Reducing Ground-level Ozone and Fine Particle Matter in the Northeast U.S., A Benefits Mapping and Analysis Program (BENMAP) Study, NESCAUM, January 15, 2008). The Department also conducted a cost analysis based on information from this report in addition to the NORA and API reports and EIA data. Additionally, the Department considered the study conducted by the New York State Energy Research and Development Authority (NYSERDA) and Brookhaven National Laboratories (Low sulfur Home Heating Oil Demonstration Project Summary Report, Energy Research Center, Inc., and Brookhaven National Laboratories, BNL-74956-2005-IR, June 2005 (NYSERDA Report)). The NYSERDA report finds overall savings to consumers in terms of reduced heating equipment service and maintenance costs from using low sulfur distillate oil.
In addition to the above referenced report NYSERDA publishes a weekly “Heating Fuels Report”. This report contains the cost difference and oil stock pile figures for both high sulfur and 15 ppm oil. NYSERDA has published this report for about 15 years. NYSERDA also published a report in January 2011 titled “Patterns and Trends - New York State Energy Profiles: 1995-2009”1. These reports show some important trends. First, the amount of number 2 heating oil used in New York State has been steadily decreasing since 2005 after its peak usage from 2000 through 2005. The report shows that the amount of number 2 heating oil used between 2005 and 2009 dropped by 40 percent. Preliminary number 2 heating oil use data from 2010 and 2011 show the trend of lower oil usage in the Northeast has continued. Second, price trends show that the difference between 15 ppm and high sulfur oil was as low as a penny per gallon prior to the shutdown of several oil refineries in the Northeast between October 2011 and April 2012. Since the shutdown of these refineries the price difference between 15 ppm and high sulfur oil has once again risen to approximately five cents per gallon.
Costs to State and Local Governments:
State and local governments may incur increased fuel oil costs associated with this proposed regulation because they are required by Section 19-0325 of Chapter 203 of the ECL to purchase and fire 15 ppm sulfur content number 2 heating oil. However, no new recordkeeping, reporting, or other requirements will be imposed on state and local governments based on this proposed rule-making. Based on the Department’s permitting data, there are 50 State and local government facilities that have Title V permits and 75 State and local government facilities that have state facility permits (please note that some of these facilities fire both distillate and residual oil and that the facilities that fire residual oil that reside in New York City, Nassau, Rockland, and Westchester counties will not be affected by the proposed sulfur-in-fuel standards). Using the cost per gallon figures from the above reports in combination with the fuel use data and fuel use assumptions, the Department was able to estimate the cost or cost range increase for the State and local government facilities. The four State and local government facilities with Title V permits that fire residual oil will incur an average fuel cost increase of 14,000 dollars per year per facility. The 48 State and local government facilities with Title V permits that fire distillate oil will incur a fuel cost increase of between 21,000 to 24,000 dollars per year per facility. The 24 State and local government facilities with state facility permits that fire residual oil will incur an average fuel cost increase of 1,200 dollars per year per facility. The 56 State and local government facilities with state facility permits that fire distillate oil will incur a fuel cost increase of between 9,000 to 10,000 dollars per year per facility. The projected fuel cost increases will be partially offset by the gain in efficiency and lower maintenance costs that are directly attributable from the use of lower sulfur fuels.
Costs to the Regulating Agency:
The Department will face some initial administrative costs associated with the application review and permitting of the new sulfur-in-fuel limits. No additional monitoring, recordkeeping, or reporting requirements are being proposed under this rule-making. Therefore, no additional costs will be incurred by the regulating agency based on these factors.
LOCAL GOVERNMENT MANDATES
This is not a mandate on local governments. Local governments have no additional compliance obligations as compared to other subject entities. Also, no additional monitoring, recordkeeping, reporting, or other requirements will be imposed on local governments under this rulemaking.
PAPERWORK
The proposed changes to Subpart 225-1 will create no additional paperwork for the facilities subject to the requirements of this rule.
DUPLICATION
The proposed revisions to Subpart 225-1 do not duplicate, overlap, or conflict with any other State or federal requirements.
ALTERNATIVES
The Department evaluated the following alternatives:
(1) Take no action: This alternative could prevent New York State from complying with its obligations under the CAA. If the Department does not implement this regulation, it would not be able to meet its obligations to achieve attainment in the PM-2.5 non-attainment areas throughout New York State. Also, without the promulgation of Subpart 225-1, the State would not be reducing its regional haze impacts in the northeast. The reduction in sulfur-in-fuel limitations will directly result in reductions of SO2, PM-10, and PM-2.5. Reductions of these air contaminants will definitively aid New York in meeting both its attainment goals for PM-2.5 and reduce the State’s regional haze impact. Therefore, the “Take no action” alternative has been rejected.
(2) Partial implementation of sulfur-in-fuel standards: The Department could revise Subpart 225-1 to only include the sulfur-in-fuel requirements of Section 19-0325 of the ECL for number 2 heating oil. These revisions would also correct any existing typographical errors and update the regulation to match the permitting nomenclature of Part 201. During the June 24, 2010 stakeholder meeting for Subpart 225-1 the oil manufacturers and distributors expressed concerns that the Department would create added burdens by only including the provisions in ECL Section 19-0325. The oil manufacturers stated that they would need to reconstruct their facilities to be able to manufacture the 15 ppm sulfur content distillate oil. They stated that the manufacturing process was different for distillate oil that has a sulfur content of less than 500 ppm than for distillate oil that has a sulfur content of greater than or equal to 500 ppm. They expressed that the reconstruction was fine as long as they could totally commit and not have to divide their manufacturing between several fuel sulfur contents (which would entail maintenance of multiple processes and equipment). The oil distributors expressed concerns that a partial implementation would require them to maintain multiple fuel oil storage tanks which could result in cross contamination problems. Therefore, based on the stakeholder concerns the “Partial implementation of sulfur-in-fuel standards” alternative has been rejected.
FEDERAL STANDARDS
The proposed revisions to Subpart 225-1 do not exceed any minimum federal standards. The proposed reductions will lower the standards to the point where they would be equivalent to the sulfur-in-fuel standards of both 40 CFR 60 NSPS and 40 CFR 63 National Emission Standards for Hazardous Air Pollutants.
COMPLIANCE SCHEDULE
The Department proposes to promulgate the revisions to Subpart 225-1 by early 2013. The provisions of this rule will take effect based on a phased approach. The initial compliance date, for purchase of number 2 heating oil, is July 1, 2012, in accordance with section 19-0325 of the ECL, for emission sources that fire number 2 heating oil for residential, commercial, or industrial heating applications. The secondary compliance dates are July 1, 2014 for the purchase of all remaining distillate oil and residual oil in New York State and July 1, 2016 for the firing of all distillate oil and residual oil in New York State.
Revised Regulatory Flexibility Analysis
No changes were made to previously published Regulatory Flexibility Analysis.
Revised Rural Area Flexibility Analysis
No changes were made to previously published Rural Area Flexibility Analysis.
Revised Job Impact Statement
No changes were made to previously published Job Impact Statement.
Initial Review of Rule
As a rule that requires a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2016, which is no later than the 3rd year after the year in which this rule is being adopted.
Assessment of Public Comment
Comment 1: Since Part 225-1 does not define residential emission sources or number 2 heating oil. Where can I find the definition for these terms? (Commenter 1)
Response to Comment 1: Both terms fall within existing definitions contained in 6 NYCRR Part 200. The term residential emission source is covered by the definition of stationary source in subdivision 6 NYCRR 200.1(cd). The term number 2 heating oil is covered by the definition of distillate oil in subdivision 6 NYCRR 200.1(r).
Comment 2: While Part 225-1 (f) implies that owners and operators of commercial, industrial, and residential emission sources that combust number 2 heating oil on or after July 1, 2012, are limited to combusting number 2 heating oil with a sulfur content of 15 ppm by weight or less; Part 225-1 (g) states that owners and operators of any stationary combustion installation that combust distillate oil are limited to purchasing distillate oil with a sulfur content of 15 ppm by weight or less on or after July 1, 2014, and are limited to combusting distillate oil with a sulfur content of 15 ppm by weight or less on or after July 1, 2016. Why are (f) and (g) different and why is NYSDEC differentiating between emission sources which combust number 2 heating oil and those that combust distillate oil? Under the federal regulations number 2 heating oil is defined as a subset of distillate oil, in essence one in the same. (Commenter 1)
Response to Comment 2: Environmental Conservation Law (ECL) section 19-0325 requires that all number 2 heating oil sold for use in New York State must be at or below the 15 ppm sulfur content by July 1, 2012. DEC cannot change that statutory requirement through rulemaking. The Department, however, determined that this requirement did not apply to all of the distillate oil sold for use throughout the State (e.g. distillate oil used in power plants and emergency generators). Historically, there is a 75 percent heating oil to 25 percent non-heating oil usage in the State. Non-heating oil users generally have much larger stockpiles of their fuel oil on site. Therefore, the Department decided to provide additional time for compliance for the non-heating oil users. However, several commenters stated that they have not had sufficient time to use their previously purchased non-compliant fuel by the July 1, 2012 deadline. As a result we have removed “firing” from the July 1, 2012. For further information, please see pages 7 thru 9 of the RIS under the Section titled Number 2 Heating Oil Sulfur-in-Fuel Limit vs. Distillate Oil Sulfur-in-Fuel Limit.
Comment 3: The implementing statute for the proposed regulation does not limit the firing of number 2 fuel oil in excess of the 15 ppm sulfur limitation. Instead Section 225-1.2(f) of the proposed regulation extends the July 1, 2012 deadline to owners and operators of commercial, industrial, or residential emission sources that fire number 2 heating oil on or after July 1, 2012. We believe that this proposed action supersedes statutory requirements and must be addressed so as not to negatively impact the industry in New York State by limiting the use of number 2 heating oil that does not meet on the standard as of the July deadline, but is currently stored in on-site. The commenters recommend the revision of the proposed language in Section 225-1.2(f) to relate to the sale of number 2 heating oil and not the firing of number 2 heating oil. (Commenters 2, 5 and 7)
Response to Comment 3: The Department has carefully reviewed this issue and concerns about the use of previously purchased non-compliant fuel. As a result, the Department has removed “firing” from the July 1, 2012 deadline. All facilities using number 2 distillate oil will now be limited to firing only number 2 distillate oil with a sulfur content of 15 ppm by weight or less on or after July 1, 2016.
Comment 4: Require that all generating facilities who are not able to comply with the 2016 deadline be allowed to document that they have not purchased non-compliant fuel since the proposed regulations were published in the ENB (Oct 31, 2012). This will ensure that no entity needing relief from the requirement is increasing its inventory. (Commenters 3 and 4)
Response to Comment 4: The Department believes that it has provided sufficient time to comply with the proposed revisions to sulfur limitations in subpart 225-1 based upon outreach conducted during the development of the rulemaking. Subdivisions 225-1.2(e) and (g) require that owners or operators of oil firing equipment purchase compliant oil on or after July 1, 2014 and fire the compliant oil on or after July 1, 2016. The Department believes that the proposed rule adequately requires that subject facilities monitor the purchase of compliant fuels for two years prior to the firing compliance date.
Comment 5: Revise section 225-1.4 to include the option of co-firing natural gas with the higher sulfur fuel to achieve an effective SO2 emission equal to or lower than that resulting from the compliant fuel. (Commenters 3, 4 and 5)
Comment 6: We further recommend that this co-firing calculation be done on a daily basis. (Commenters 3 and 4)
Comment 7: Specifically, we recommend that a second equation be included in this section to demonstrate co-firing of oil and natural gas. (Commenters 3 and 4)
Comment 8: Averaging would allow facilities to burn down existing supply of non-conforming oil without waiting for a fuel shortage or emergency. (Commenter 5)
Response to Comments 5-8: Subdivision 225-1.4(a) states “Fuel mixtures and equivalent emission rate variances only apply to processes or stationary combustion installations. Compliance will be based on the total heat input from all fuels fired, including gaseous fuels.” Thus, the use of gaseous fuel is allowed when co-fired with non-compliant oil to reduce the equivalent sulfur dioxide emission rate of a subject emission source. Because existing language permits this, the Department does not believe that specific language needs to be added to this proposed regulation. The Department believes that this is better addressed on a case-by-case basis for each affected facility.
Comment 9: Allow purchase of lower sulfur fuel (i.e. 0.3 percent S) in sufficient quantities such that the resultant fuel would be compliant. Since many of the larger residual oil tanks are not equipped with mixing capabilities, it may be difficult to demonstrate that the as-burned fuel is compliant. The DEC should allow for a calculated or “paper” demonstration of compliance. (a tank has 100 gallons of 0.7 percent S fuel, the purchase of 100 gallons of 0.3 percent S fuel would result in 200 gallons that would have a compliant S content of 0.5 percent) (Commenters 3 and 4)
Response to Comment 9: The Department believes that the proposed rule already allows this and that any facility specific monitoring should be addressed in the subject facilities monitoring requirements and permits on a case-by-case basis.
Comment 10: For facilities where other previously mentioned options are not viable, we recommend that the DEC develop site specific agreements that those facilities be allowed to burn down existing inventory and demonstrate that the SO2emission from the facility do not exceed permit limits. (Commenter 3)
Comment 11: The option of selling inventories of non compliant fuel and transferring the fuel off site presents serious concerns. The existing fuel oil, though possible to sell, has engineering, technical and logistics issues to transfer from storage tanks to barges and would have the increased risk of a significant spill and the liability to sell the product. We do not believe this is therefore an option that the Department should include in its regulations. (Commenter 4)
Comment 12: Please note that should the economics or other operational changes require more oil burn than currently forecast prior to July 2016, these options may not be utilized. However, we strongly believe that they should be incorporated into the regulations. (Commenter 3)
Response to Comments 10-12: The Department respectfully disagrees with the commenter that the regulation should contain facility specific requirements. For facilities that are not able to comply with the regulation a case-by-case determination must be conducted to address the issues. Any case-by-case analysis and determination would be incorporated into both the affected facility’s permit and the State Implementation Plan (SIP) as a single source SIP revision.
Comment 13: The footnotes to the solid fuel limit tables refer to the heat content of solid fuel delivered. In practice, the heat input is calculated using CEMS. As long as that is understood then no changes are necessary. (Commenter 4)
Response to Comment 13: Thank you for your comment. No changes are necessary.
Comment 14: Section 225-1.5 Emissions and Fuel Monitoring(b) notes in “‘performance specification 2’, appendix B, part 60 of title 40 of the Code of Federal Regulations (see Table 1, Section 200.9 of this Title)” but the reference in the table is for Section 225-1.7(b). Section 225-1.5, Emissions and Fuel Monitoring (b)(3) states “stationary combustion installations required to use the continuous monitoring specifications under 40 CFR part 75 (see Table 1, Section 200.9 of this Title)”, but Part 75 and this section are not included in this table. Section 225-1.5, Emissions and Fuel Monitoring (b)(3) states “stationary combustion installations required to use the continuous monitoring specifications under 40 CFR part 75 (see Table 1, Section 200.9 of this Title)”, but Part 75 and this section are not included in this table. (Commenter 4)
Response to Comment 14: Changes to Table 1, Section 200.9 are part of this rulemaking. Please see the Part 200 express terms where these changes are listed.
Comment 15: Exceptions to the sulfur-in-fuel limits, as discussed in Section 225-1.3, appear to be limited to the unavailability of fuel that complies with the requirements of this regulation and neglects fuel shortages created by local natural gas curtailment during the heating season. Local natural gas curtailments would not initially trigger the responses required under Section 225-1.3, but would still affect gas fired facilities under Subpart JJJJJJ to maintain their heating capabilities. Since these facilities have a limited allowable annual burn time for fuel oil under non-emergency conditions, it may be difficult for these facilities to burn down number 2 heating oil with a sulfur content of greater than 15 ppm purchased prior to July 1, 2012, within the next two to four years. Any variance or exception should also require that any new fuel added to their storage tanks be compliant under 6 NYCRR Subpart 225-1. Therefore, we recommend the Department add an exception under Section 225-1.3 for facilities which have boilers with dual fuel combustion capabilities and meet the definition of a gas-fired unit under 40 CFR 63 Subpart JJJJJJ National Emissions Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers Area Sources to allow the combustion of their existing supply of number 2 heating or distillate oil purchased prior to July 1, 2012 and compliant with the regulations that existed at the time of purchase. (Commenter 5)
Response to Comment 15: Please note that the Department has not accepted delegation of 40 CFR 63 Subpart JJJJJJ. Also the Department’s regulations do not include the same definition of boiler as 40 CFR 63 Subpart JJJJJJ. Please note that the affected facility will be required to purchase compliant fuel as per the relevant applicability date. Please also see the response to comment numbers 10-12.
Comment 16: Number 2 heating oil is normally considered a subset of distillate oil as presently defined under 6 NYCRR Subpart 200, General Provisions, Section 200.1, paragraph (r) and 40 CFR 60.41c Distillate Oil. Generally, the regulated community tends to use these terms interchangeably. Therefore, using two different regulatory concepts for nearly the same item to create a separate set of regulatory requirements for number 2 heating oil is confusing and can potentially lead a user to misread the requirements for the application that affects them. The Department should either remove the distinction between distillate oil and number 2 heating oil from this regulation; or add to Section 225-1.1 Definitions, wording that specifically defines how these terms are to be applied in this regulation. If the State intends to maintain this difference in other regulations, then the general definitions of Subpart 200 of this Title should also be amended to reflect these concepts. (Commenter 5)
Response to Comment 16: ECL section 19-0325 carved out “number 2 heating oil” from “distillate oil”. Therefore, the initial regulatory compliance requirements carve out number 2 heating oil. The Department does not intend to maintain a differentiation between number 2 heating oil and distillate oil beyond July 1, 2016. Once this date occurs, all distillate oils will have the same requirements in the rule. Please also see the response to comments number 2 and 3.
Comment 17: The National Bio-diesel Board (NBB) supports these regulations and New York’s efforts to improve air quality through the reduction of allowable sulfur content in heating fuels. (Commenters 6, 8)
Response to Comment 17: Thank you for your support.
Comment 18: The National Bio-diesel Board serves to promote bio-diesel, which is a trans-esterified version of usually vegetable or animal waste oils into a diesel-like fuel that meets ASTM Standard 6751. This standard itself incorporates sulfur limitations of 15 parts per million. So, bio-diesel, as a product, inherently meets any and all sulfur regulations that exist here in New York State as well as across the nation and for what we anticipate coming in the future as the various states transition to ultra-low sulfur fuels for thermal purposes. The concern that - or suggestion I would offer is that under the definition of waste oils, which is one of the first paragraphs in the published material here, it makes specific reference to animal and vegetable waste oils. I think that needs some additional attention, clarification and definition. (Commenter 8)
Response to Comment 18: Subpart 225-1 neither defines nor prohibits bio-diesel or bio-derived oil. This regulation only sets specific sulfur-in-fuel limits on solid and liquid fuels fired throughout New York State. Please note that the definition of waste oil is found in Subpart 225-2 and is beyond the scope of this rule making.
Comment 19: The animal and vegetable fats-based oils often represent the first time that that this material has been used in an oil application. But there are other liquid alternative fuels that are entering the market place without the rigorous testing and evaluation that has been performed on biodiesel in the past. There is a lot of oil that is finding its way into the thermal market outside the umbrella of all of the ASTM standards for heating oil that we normally refer to. We suggest that this needs some closer attention. The Department needs to be very careful to stay ahead of the curve in regulating these fuels as they come into the marketplace. Some of these alternate fuels will have substantial sulfur contents. After all, sulfur, as we already know, is part and parcel of many plant products but, in addition, I know this starts to go outside the realms of this particular regulation, we also have to be concerned about CORID contents and then also mercury and other heavy metals. The proposed sulfur limit for the waste oils is 0.75 percent. That actually is higher than what we have seen in much of the products that are going into bio-diesel manufacturing. We would suggest that this particular category of waste based oils perhaps be subject to their own sulfur standards. We really want to encourage the reprocessing of these oils into a higher quality product such as what occurs with bio-diesel manufacturing in order to reduce air pollution. (Commenters 6 and 8)
Response to Comment 19: Bio-diesels and other bio-derived oils must meet the sulfur-in-fuel requirements listed in Subpart 225-1. As long as they meet the appropriate limits their use will be considered to be compliant with the requirements. However, the Department believes that the request to define bio-derived oils differently in the term ‘waste oil’ is beyond the scope of this rule making. Please also see the response to Comment number 18.
Comment 20: I would encourage the Department to consider implementation of additional requirements that would require the blending of bio-diesel into Number 6 oil, similar to what New York City has done recently with their bio-heat mandate. Bio-diesel enhances combustion performance cleanliness rather significantly when used with number 6 oil systems. It helps to reduce viscosity, it improves atomization, finer droplets in the atomization process and, thus, cleaner combustion. It helps to keep the burners clean and with all this plus the inherent chemistry of oxygenated content it helps to reduce PAH formation during the combustion process. So, we could encourage the Department to give this further consideration. (Commenter 8)
Response to Comment 20: The Department notes this comment. The proposed regulation does not prohibit a facility from blending bio-diesel or bio-derived oils with their fossil fuels. At this point in time the Department does not plan to mandate the blending and/or use of bio-diesel or bio-derived oil in New York State.
Comment 21: The regulations inappropriately applies retroactively to the firing of number 2 home heating oil. (Commenter 5)
Response to Comment 21: The Department has carefully reviewed this issue and concerns about the use of previously purchased non-compliant fuel. As a result, the Department has removed “firing” from the July 1, 2012 deadline. All facilities using number 2 distillate oil will now be limited to firing only number 2 distillate oil with a sulfur content of 15 ppm by weight or less on or after July 1, 2016. Please also see the response to Comment 3.
Commenters:
1) William Guerrera
2) New York Farm Bureau
3) National Grid
4) Environmental Energy Alliance of New York, LLC
5) US Department of Energy
6) Mr. Raymond Albrecht - National Bio-diesel Board
7) Mr. Darren Suarez - Business Council of New York State Inc.
8) Mr. Raymond Albrecht - National Bio-diesel Board, Public Hearing, Albany
9) Mr. Darren Suarez - Business Council of New York State Inc., Public Hearing, Albany
