ILTA Advocates for Sensible Regulation of Gasoline Distribution
International Liquid Terminals Association
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A respected industry publication for ILTA members, this monthly newsletter highlights legislative and regulatory activities affecting terminal facilities. It also provides news on recent business development within the terminal industry, including new construction, expansions, acquisitions and additions to ILTA's membership, as well as important information about ILTA's committee meetings, conferences and training events. ILTA also offers ILTA News Plus to members. This publication, sent on weeks that ILTA News is not published, aggregates industry and member news.

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Kathryn Clay
/ Categories: ILTA News Articles

ILTA Advocates for Sensible Regulation of Gasoline Distribution

ILTA and its member companies are dedicated to providing safe, sustainable, efficient, and reliable storage and logistics services for bulk liquids. In July 2021, our Board of Directors adopted our organization’s first Environmental, Social, and Governance (ESG) principles. One of these principles affirms our industry’s commitment to continually reviewing new technologies and procedures that might improve emissions monitoring and yield emissions reductions. 

ILTA has put this pledge into action by engaging with the U.S. Environmental Protection Agency (EPA) on a technology review of gasoline distribution equipment and facilities, focused on emissions on hazardous air pollutants. Since EPA initiated this technology review and rulemaking in Spring 2021, ILTA and its members have been in dialogue with EPA officials, providing detailed information about the proper operations of gasoline storage tanks and loading facilities.  

When pandemic-related travel restrictions precluded officials from accepting our invitation for a visit to a terminal site, some innovative thinking led us to provide a virtual tour of a terminal and gasoline loading facilities using “Smart Helmet” technology. ILTA and its members have also provided the agency with information pertaining to emissions control equipment, inspection practices, and data on costs and efficacy. We were pleased to facilitate discussions between EPA officials and manufactures of a key category of emissions controls, vapor combustion units.  

ILTA appreciates the consideration that EPA officials gave to the data and information we provided during their development of their proposed rule, which formally comes in the form of amendments to the National Emissions Standards for Hazardous Air Pollutants (“NESHAP”) for Gasoline Distribution facilities and the Standards of Performance for Bulk Gasoline Terminals (87 FR 35608, June 10, 2022). This rulemaking responds to Clean Air Act requirements for review of existing technology-based emissions standards at least every eight years, and for updates to those standards if warranted by advances in technology, industry practices, or the cost effectiveness of controls. The proposed rule results from EPA’s assessment of three technology-based standards that apply to the Gasoline Distribution source category: Subpart R, the NESHAP applicable to bulk gasoline terminals that are major sources of hazardous air pollutants (“HAPs”); Subpart BBBBBB (“6B”), the NESHAP applicable to smaller but more numerous area source bulk gasoline terminals; and Subpart XX, the New Source Performance Standard (“NSPS”) that applies to new, modified and reconstructed bulk gasoline terminals.  

ILTA is pleased to be able to support the major findings of that proposal, which was published in the Federal Register on June 10. EPA’s proposal would lower the area source emission limits for loading racks at large bulk gasoline terminals from 80 mg/L to 35 mg/L of total organic carbon per liter of gasoline loaded accounts. According to the agency’s analysis, this change would account for the largest share of the hazardous air pollutant emissions reductions in the amendments. While this change to NESHAP Subpart BBBBBB (“NESHAP 6B”) will impose costs to industry – estimated by EPA to be $9,700 per ton of hazardous air pollutant emissions reduced – we believe this proposed standard achieves the right balance as it furthers our shared goals for environmental protection.  

ILTA also agrees with EPA’s assessment that it would not be cost-effective to lower the 10 mg/L standard for loading operations for the NESHAP subpart R. Based on the costs associated with further hazardous air pollutant emission reductions, EPA determined it is not cost-effective to lower the 10 mg/L standard, since the cost effectiveness of the option is over $100,000 per ton of hazardous air pollutants reduced—a level that is over an order of magnitude higher than what the agency has found to be cost-effective in previous rulemakings to limit organic hazardous air pollutants.  

Similarly, for small bulk gasoline terminals at area sources, ILTA agrees it is appropriate to maintain the current submerged loading requirements since the EPA analysis showed that loading rack emission limits at these facilities would not be cost effective. EPA evaluated control options of maintaining the current submerged loading requirements and potentially adding loading rack emission limits of either 80 mg/L, 35 mg/L, 10 mg/L, or 1 mg/L for small bulk gasoline terminals at area sources (i.e., combined throughput between 20,000 and 250,000 gallons per day). The EPA cost-effectiveness analysis indicated that an 80 mg/L emission limit for loading racks would exceed $24,000 per ton of hazardous air pollutant emissions reduced. The other options were even less cost-effective. Based on their analysis, EPA did not propose any changes to the current area source provisions for small bulk gasoline terminals subject to NESHAP subpart 6B. 

ILTA has registered a number of concerns with the proposed rule in its formal comments, which were formally submitted in September. In each case, we provided sensible alternatives that would move us toward the agency’s stated goals in a cost-effective way. In some places, we identified portions of the proposed rule which could subject terminal facilities to overlapping, conflicting, or inconsistent requirements; could impose significant costs without yielding discernable environmental benefits; or could create safety concerns. In other areas, the proposed amendment would require unnecessary or ineffective monitoring or testing processes.  

In addition to the loading rack standards, the proposed rule would have significant implications for other equipment involved in gasoline distribution at terminal facilities, such as vapor recovery units, vapor combustion units, storage tanks, and leak detection. Some of our significant concerns for each of these areas are explained below. 

Vapor recovery units (“VRUs”)

EPA has proposed requirements for VRUs that would prohibit outside air, except to prevent significant vacuum formation. This conflicts with the design criteria for essentially all existing VRUs, which require the addition of outside air for a variety of reasons. Unless changed, the prohibition on outside air would require replacement or modification of all known VRUs. ILTA does not believe that was EPA’s intent, since this significant cost was not included in its cost-benefit analysis and there is certainly no environmental benefit associated with phasing out VRUs. 

Vapor combustion units (“VCUs”):   

EPA should not require temperature monitoring or a minimum average temperature to demonstrate adequate combustion of gasoline vapors in VCUs. Gasoline vapors are much more combustible than the hydrocarbon streams controlled at other types of petrochemical facilities in other regulated source categories. As a result, a minimum temperature is not needed to assure combustion of gasoline vapors. In addition, due to the batch nature of the loading operation, maintaining a minimum average temperature over any arbitrary block of time would require the wasteful and unnecessary use of large quantities of auxiliary fuel, producing significant increases in criteria pollutant and greenhouse gas emissions without any corresponding reduction in HAP or VOC emissions. 

Storage tanks:   

EPA has proposed requiring Lower Explosive Limit (“LEL”) monitoring of the headspace of internal floating-roof tanks (“IFRTs”) as an indicator of leaks in the roof seals. However, in past rulemakings, EPA has acknowledged that LEL is not a reliable tool for detecting tank roof fitting or seal defects. EPA acknowledges that internal floating roofs are very effective in reducing emissions from fixed-roof tanks, but also acknowledges that an IFRT in compliance with all applicable EPA standards will have some vapors escaping past the floating roof. Detectable vapors in the headspace, at 25 percent of the LEL or any other threshold, has not been adequately demonstrated as an effective defect detection practice and should not be required. 

Equipment leaks:   

Existing rules require audio, visual, and olfactory (“AVO”) inspections to detect equipment leaks. EPA has instead proposed requiring instrument-based leak detection. However, EPA’s analysis of instrument-based leak detection is based on flawed premises regarding its sensitivity, effectiveness, and cost versus AVO leak detection methods. As a result, EPA has not adequately demonstrated that instrument-based leak detection adds increased accuracy to existing monitoring requirements or is cost effective versus the present monitoring methods. 

We believe some of these instances of concern may derive from misunderstandings of the proper operations of control equipment used at terminal facilities. In other cases, we believe the Agency may be underestimating the effectiveness of current approaches used for monitoring and testing of emissions.  

This gasoline distribution technology review has been a significant regulatory milestone. It is a complex rulemaking in both a technical and a legal sense, involving amendments to several Clean Air Act provisions. It will change equipment requirements and operating practices at over 1500 terminal facilities across the country that are part of gasoline supply chains. While we await the final rule, expected by June of 2023, we welcome the opportunity for continued dialogue with our regulators and other stakeholders. 


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