Retooling the Vapor Recovery System: Part 3 - Reactions by Equipment Makers: Some Fugitive Emissions Remain At Large

ARID Technologies (ARID) believes that vapor recovery would be more effective if CARB were to recognize the economic value of, and environmental need for, controlling evaporative losses at all stations, including those with Stage II balance or assist systems and those without Stage II controls.

This side view of the Permeator shows feed and return piping. Courtesy of ARID Technologies, Inc

The new Enhanced Vapor Recovery regulations indicate that CARB’s staff has begun to understand the mechanisms of air ingestion into storage tanks and the associated dynamics of liquid evaporation, vapor growth, storage tank pressurization and resulting emissions of VOC’s and other air pollutants through system vents and breaches. For purposes of this article, I will refer to these emissions as fugitive emissions or evaporative losses.

ARID Technologies (ARID) believes that vapor recovery would be more effective if CARB were to recognize the economic value of, and environmental need for, controlling evaporative losses at all stations, including those with Stage II balance or assist systems and those without Stage II controls. Also, the vapor recovery program, petroleum marketers and equipment manufacturers could benefit significantly if the CARB certification protocol would permit vent processors (so-called “back-end” components) to be certified separately from the other vapor recovery system components.

Measuring evaporative losses
Based on data gathered from ARID’s commercial installations in the United States and TUV Rheinland (Cologne) field tests in Germany, ARID has concluded that typical wet stock evaporative losses range from 0.10 percent to 0.50 percent of station throughput. The TUV test report is available from Department for Environment, TUV Rheinland, at www.tuev-rheinland.de/enghome.htm.

ARID has obtained data from other countries that further substantiates the magnitude of evaporative losses at uncontrolled stations. Stations in many countries are not subject to Stage II vapor recovery requirements. In some countries, suppliers incorporate dealer rebates based on anticipated evaporative losses. For example, one major marketer in Hong Kong provides a dealer rebate equivalent to a 0.56 percent product loss due largely to evaporation. Another Hong Kong-based major marketer provides a dealer rebate of about 1.0 percent of throughput.

Because the magnitude of evaporative losses has been understated significantly, the economics of vapor recovery are not being analyzed properly. Using prevailing gasoline pump prices—typical values for gasoline at Reid Vapor Pressure (RVP) and storage tank temperatures—positive net present values are generated along with favorable after-tax internal rates of return. The magnitude of the evaporative emissions can be estimated using Tables 1 and 2, which were generated using ARID’s proprietary Evaporative Loss Model.

Negative environmental costs?
The common assumption in the petroleum industry is that if new environmental protection technology has to be developed, it will be costly to all stakeholders. This assumption is not valid in the case of controlling storage tank evaporative losses. The membrane technology exists today and the robustness of that technology has been proven. (Refer to “Membranes, Molecules and the Science of Permeation,” T.P. Tiberi, April 1999, p.30).

The savings of salable product via ARID’s membrane technology generates positive net present values with favorable internal rates of return.

Environmentalists, petroleum industry professionals and consumers have become sophisticated enough to question whether stricter environmental controls are worth the economic price that they typically impose. Economic concerns have taken on a new importance in the wake of reduced public support for initiatives that impose far reaching environmental restrictions. The US Supreme Court, in its ongoing review of a landmark clean-air dispute with the US EPA, is considering the costs of compliance along with health effects. To even consider calculating a financial payback instead of debating costs of compliance is a concept very new to the environmental arena.

The savings from reducing evaporative losses are real, but another important question is, “To whom do the savings accrue?” In a typical wholesaler-to-dealer transaction, the dealer owns the product in the tanks and, therefore, suffers the loss due to evaporation. The wholesaler has no immediate incentive to reduce these losses (they have already collected their money) and they typically control the hardware installed at the dealer’s site.

Moreover, the dealer may not even realize they are losing product to evaporation, because such losses may be masked by the volume expansion of gasoline due to heat gain. It is well known that gasoline blends expand about 0.7 percent per 10° F temperature rise. The volume gain due to increased temperature is reduced by the amount of wet stock evaporative loss.

This view of the Permeator shows piping connections to the vent line. Courtesy of ARID Technologies, Inc

A challenge for CARB
An additional challenge for CARB is to provide incentive by linking the savings in salable product (and associated emissions reductions) to incremental revenues for both the wholesaler and the dealer. A simple alignment of objectives is made possible by the wholesaler basing the dealer’s purchased volumes on cumulative dispenser meter readings.

For example, if a site is picking up 0.7 percent volume in heat gain and suffering 0.5 percent loss due to evaporation, the net effect, without additional evaporative controls, is a positive 0.2 percent. If controls, such as ARID’s membrane system, are added to reduce the evaporative losses by 95 percent, the net gain at the dispenser meter is 0.7 - (.05 x 0.5) or 0.68 percent, which is more than three times the previous figure of 0.2 percent. With one small change in custody transfer, previously conflicting objectives are elegantly aligned between wholesaler, dealer and regulator.

Complete system vs. component certification
Pursuant to a California statute, CARB will now certify only complete, integrated systems, rather than components of a system. This approach may be appropriate for “front-end” systems that direct vapor displaced from vehicle fuel tanks to underground storage tanks. The components in these systems typically include nozzles, hoses, bellows, pumps and check valves. Any modification of these components has a significant impact on vapor recovery performance and efficiency because each component is an integral part of the sequential vapor flow path comprising the overall vehicle-refueling vapor recovery system.

The total system approach, in my opinion, is not appropriate for “back-end” storage tank system components, such as combustion units and membrane processors. These components are designed to maintain storage tank pressures within a prescribed range by periodically actuating in response to prevailing tank conditions. If the tank pressure is not controlled beyond the normal operating range of pressure/vacuum valves, these systems will not negatively affect the operation of the front-end systems.

Membrane systems are complete back-end systems—not components of the front-end systems. Back-end systems, in effect, are subsystems of the overall vapor recovery system at a dispensing facility. Membrane systems can be installed on uncontrolled (no Stage II) facilities or retrofit to existing Stage II balance or assist systems. The system operates independently of the front-end system (if one is present) and recovers, concentrates and returns vapors which would otherwise be emitted from storage tanks.

From a commercial perspective, ARID and other back-end system suppliers are restrained in sales and marketing efforts because we are forced to collaborate with dispenser-based Stage II system suppliers before attempting to retrofit our system to their installed base.

ARID urges CARB to consider a certification protocol that considers both the technical and commercial implications as outlined above. Back-end systems should be certified to deliver a given vapor recovery efficiency and to operate within a specified tank pressure range regardless of the presence of a Stage II vehicular vapor recovery system at any dispensing facility. Perhaps CARB could categorize back-end systems as Stage III systems—stand-alone, complete systems that minimize storage tank vapor emissions.

If one considers passive back-end processors as components that must be certified as part of complete systems offered by competitors, the costs of certification and time requirements can be estimated as follows:

  • Number of Phase II certifications listed on CARB’s EVR Internet site: 64
  • CARB’s estimated cost for Phase II certification: $340,000
  • Minimum time to earn certification: 12 months

A company wishing to have a processor-based system certified with all existing systems would have to incur costs of about $22 million and devote at least 128 staff-years to obtaining certification. We hope that reasonable requirements will be implemented to avoid excessive costs and other problems with the existing certification protocol. In addition to the costs, the certification protocol will cause the following problems.

  • Environmental and economic benefits that can be generated by novel technologies will be delayed significantly.
  • Other countries will lead the United States in implementing technologies that reduce health risks for the general population.
  • Existing certification holders may have monopoly power and free trade will be restrained.
  • Human health risks from poor air quality will remain unduly high if product improvements are restricted.
  • Excessive re-certifications of a large number of systems will put a drain on staff time and resources and create a large backlog.

In conclusion, I think it will be just a matter of time until CARB concludes that evaporative emissions from uncontrolled stations are significant in magnitude and also must be controlled. Petroleum marketers who want to stay ahead of the game and operate cleaner facilities will seek a solution that meets both the short-term and the anticipated long-term CARB requirements.

The optimum solution should be economical, flexible, maintenance free and safe. Also, CARB can make the certification process less cumbersome and time-consuming, as well as more equitable, by not requiring back-end or processor systems to be certified as integral parts of front-end refueling vapor recovery systems.

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