ILTA Letter to EPA on NSPS Kc Rule Development Costs to Control Tank Degassing

To whom it may concern at the U.S. Environmental Protection Agency (EPA),

The International Liquid Terminals Association (“ILTA”) understands that EPA is involved in the development of a new 40 CFR Part 60 regulation for storage tanks to be designated Subpart Kc, and that one item under consideration is a requirement to control emissions during tank degassing events.  ILTA would like to share some of the more significant concerns with this potential requirement, namely cost and availability.

Costs to Control Tank Degassing

ILTA notes that costs to control tank degassing were addressed in an earlier EPA review of 40 CFR Subpart Kb, and ILTA further notes that the costs asserted by EPA in that rulemaking package were severely understated.  

In the background package for the earlier rulemaking, EPA evaluated a set of model storage vessels (tanks) with estimated costs to control emissions from degassing events, as shown in the following table:

ILTA member companies have reviewed actual cost data for control of tank degassing emissions and have concluded that the cost of such controls can be reasonably estimated on the basis of a daily rental fee for the control equipment and crew, multiplied by the number of days during which controls are required.  The primary variables, then, are the daily rate and the number of days.  The number of days for control equipment to be on-site is a function of the amount and volatility of sludge to be removed from the tank which, in turn, depends on the size of the tank, the material that has been previously stored in the tank, and the length of time since the tank was previously cleaned.

Data from ILTA member companies indicate that where tank degassing contractors are readily available, the cost is found to range from about $10,000 to $12,000 per day.  The number of days for the control equipment to be on-site tends to be significantly longer and more variable for tanks storing crude oil than for tanks storing refined products, and thus an estimate of days on-site for the EPA model tank sizes is shown separately in the following table for crude oil versus for refined products.  These estimates typically include one day per event to account for flat-fee mobilization costs, however, in many parts of the country there are no available contractors offering tank degassing services and thus rates for more isolated locations could be significantly higher.

A range of estimated costs to control degassing emissions for the EPA model tank sizes may be summarized as follows:

Availability of Equipment and Contractors

Other variables that impact costs for controlling tank degassing emissions include:

• Availability of contractors and control equipment. Cost data collected by ILTA was primarily from Texas and New Jersey, where contractors and equipment tend to be located; it would likely be more expensive to bring contractors and equipment to certain other parts of the country and thus may involve significantly higher flat-fee mobilization charges.  This will particularly be an impact at facilities in more remote locations.
• Amount of equipment available. Few jurisdictions currently require controlled tank degassing, and the limited amount of available equipment could increase prices if EPA expands tank degassing requirements in Subpart Kc.
• Accessibility of control equipment and utilities at a tank location. Where access is challenging, the control equipment may be on-site for an additional day or two while overcoming logistical challenges to moving the equipment.

Conclusion

Actual costs to control degassing emissions are significantly higher than the earlier EPA memorandum suggested.  In addition, limitations on availability of equipment and contractors will also impact the costs for control of degassing emissions.  We request that EPA account for realistic costs in the evaluation of the cost-benefit associated with requiring control of tank degassing emissions.

We appreciate your consideration of our comments. If you have any questions about this submittal, please contact us.

Sincerely,