Controlling leaks of volatile organic compounds (VOCs) and hazardous air pollutants that may also be volatile (VHAPs) is a staggering job at petroleum refineries and chemical plants.  In a 2007 guide on best practices for leak detection and repair (LDAR), the EPA noted that a typical refinery or chemical plant may have up to 60,000 connectors and 46,000 valves, each of which has the potential to leak into the atmosphere if not properly maintained.  When these items are added to the hundreds of pumps, open-ended lines, sampling connectors, and pressure relief valves that may also leak, the challenge of designing and implementing a cost-effective LDAR program becomes clear. 

A related challenge is faced by government inspectors who must determine compliance with LDAR requirements under several Clean Air Act (CAA) programs and assess penalties in a rational fashion.  In September 2012, the EPA revised Appendix VI of its Stationary Source Civil Penalty Policy (General Policy), which advises inspectors on calculating settlement penalties for violations of LDAR requirements.  Appendix VI is also valuable to the regulated communities as a guide to the major issues about equipment leaks that concern the EPA and state agencies.  This article summarizes the eight types of LDAR violations and ranges of enforcement responses described in Appendix VI.

The EPA first developed its LDAR penalty policy in 1988 mainly to address violations under 40 CFR Part 61 (National Emissions Standards for Hazardous Air Pollutants).  Following the 1990 CAA Amendments, the Agency issued many new LDAR requirements under 40 CFR Part 60 (Standards of Performance for New Stationary Sources) and 40 CFR Part 63 (National Emissions Standards for Hazardous Air Pollutants for Source Categories).  Expanding the range of LDAR requirements necessitated the Appendix VI revision.  According to the Agency, while the specific equipment covered, the leak repair thresholds, and other such matters may vary between Parts 60, 61, and 63, the fundamental structure of the equipment leak standards is similar for all three parts. 

Widespread noncompliance

In its 2007 best practices guide, the EPA noted that there was “significant widespread noncompliance” with the LDAR requirements.  The Agency estimated that 70,000 tons per year (tpy)  of VOCs and 9,000 tpy of VHAPs were released through equipment leaks.  That exceeded emissions from storage vessels, wastewater, transfer operations, or process vents, says the EPA.  At that time, the major problem for industry seemed to be properly following EPA’s Method 21, which requires use of a properly calibrated portable instrument to detect VOC leaks. 

Industry may be improving its performance, but the EPA is still finding large-scale noncompliance.  For example, in December 2012, the Agency fined two companies $970,000 for alleged LDAR violations at a chemical plant in Springfield, Massachusetts.  The charges included failure to use suitable and/or properly calibrated leak detection instruments, identify unsafe and difficult to monitor equipment, implement a plantwide LDAR program, and properly report compliance in semi-annual certifications.  The companies were also ordered to implement an enhanced LDAR program in which they must perform monitoring of more equipment at greater frequencies than would otherwise be required under existing regulations.

Leaks themselves are not violations provided they are corrected once discovered, usually within 5 days. The amount of a penalty for failure to fix a leak within the allotted time or failure to meet any other LDAR requirement will depend on a variety of factors, such as the substance leaked and the possible harm that could result from the violation.  For example, leaks of non-HAP VOCs in ozone attainment areas are viewed as less of a threat than release of the same substances in ozone nonattainment areas.  In the latter case, the enforcing agency may apply a multiplier of 2 to the penalty.  A multiplier of 2 “plus an upward multiplier when warranted” may be applied when HAP leaks present a risk to nearby communities. 

Following are summaries of EPA’s guidance on applying penalties for the eight types of LDAR violations that can occur under Parts 60, 61, and 63.

Recordkeeping

Penalties for recordkeeping violations range from $250 to $37,500.  A complete failure to keep records should generally be assessed a penalty at the upper end.  A higher penalty is also appropriate for listing unregulated equipment on the equipment list, an action that can bias  the calculated leak rate to the low end.  Penalties in the upper range are particularly appropriate when the failure to keep records adversely affects other regulatory requirements; for example, absent visual inspection records may mean required visual inspections were not performed.

Incomplete records can generally be assessed lower penalties provided the objective of the recordkeeping requirement is still served.  For example, lower range penalties may be assessed for violations such as omission of a very small percentage of equipment from the equipment list.  Other factors that affect the penalty amount are the overall importance of the missing information as well as relative importance of the missing information when compared to the information present.

Reporting

Reporting takes several forms–onetime reports, such as initial notification or notification of compliance status, and reports that must be submitted at regular intervals, such as semiannual reports.  Violations include failure to submit a report, submitting an incomplete report, and late submission of a report. 

As with recordkeeping, the seriousness of the violation relates to the quantity of missing information, the overall importance of the missing information to EPA’s ability to evaluate the company’s compliance with regulations, the relative importance of the missing information compared to the information present, and the degree of inattention to the regulatory requirements the company manifests by failing to report information.  Using these parameters, an agency may determine the percentage of total information missing from the report, and that percentage can be used in calculating a final penalty amount.

The minimum penalty for any reporting violation is $250.  Such a violation may involve the omission of one piece of equipment from a report.  The Appendix makes a distinction between an incomplete report and a piece of missing information.  For example, if the missing piece of information is subsequently provided on request, the penalty may be $250 and not a higher amount associated with an incomplete report.

Equipment

Tagging is required for regulated equipment to distinguish it from nonregulated equipment.  The Appendix sets the following penalties for failure to tag:

• $250 per valve, flange, connector, open-ended valve or line, sampling connection system, or instrumentation system;
• $1,000 per pump or agitator; and
• $5,000 per compressor, pressure relief device, surge control vessel, or bottoms receiver.

It is a violation to tag equipment that is not subject to regulation because this will result in a process unit appearing to have a lower leak rate.  Equipment that is not tagged may also not have been monitored, meaning additional penalties may need to be assessed.

Monitoring

Monitoring and inspections are required at regular intervals and may also be required after a leak has been repaired.  Monitoring methods include Method 21 and visual, auditory, and olfactory methods.  The frequency of monitoring depends on the equipment type.  Penalties range from $2,500 to $18,500.  Violations include:

• Missed monitoring and inspections.  Common examples include a complete failure to monitor all pieces of equipment in a process unit, occasional failure to conduct one or more monitoring events (e.g., failure to remove insulation during monitoring), use of an instrument that does not adequately respond to the compounds present, and holding the monitoring instrument too far from the equipment.  Penalties for missed monitoring range from $100 per valve, flange, and connector to $2,000 per compressor, pressure relief valve, and closed vent system.
• Method 21 calibration.  In general, the Method 21 instrument must be calibrated before use on each day of use.  A failure to calibrate the instrument before monitoring is equivalent to a failure to monitor because there is no information to validate the data collected on that day.  Other Method 21 calibration violations may not include failure to monitor.  For example, operators must ensure that the gas cylinders they use are certified to a minimum percentage of accuracy.  Use of gas cylinders that do not meet this standard may still result in leak detection.  However, use of an expired gas cylinder for calibration or use of a cylinder that is not recertified is equivalent to a missed monitoring event.
• Comparative monitoring.  Failure to perform Method 21 correctly may be indicated if comparative monitoring at the process unit shows a higher calculated leak rate than shown in the company’s monitoring records. 

Tagging for repair

Each piece of leaking equipment must be physically tagged to identify it as requiring repair.  Penalties for not doing so range from $100 (pump, flange, connector) to $2,000 (compressor, pressure relief valve).  If the equipment was repaired on time even though it was not tagged, inspectors have the discretion to reduce or not assess a penalty.

Repair

Operators must make a first attempt to repair within 5 days of identifying a leak.  If the first attempt is ineffective, the leak must be repaired as soon as practicable but no later than 15 days after the leak was detected.  Exceptions (e.g., technical infeasibility) may apply.  Also, an operator can be fined multiple times for failure to repair a single piece of equipment within the deadlines, i.e., a penalty is assessed for each failure to repair the same leak.  The Appendix lists a $100-per-day penalty and a $1,000 cap for all pieces of equipment when the first-attempt-at-repair requirement is not met.  The penalties increase dramatically when the final-attempt-at-repair requirement is not met; for example, for a compressor or pressure relief valve, the penalty is $3,000 per unit with a cap of $375,000 (125 days).

Equipment standards

An equipment standard violation refers to a failure to provide certain equipment in LDAR service with hardware required by regulations to prevent leaks.  For example, open-ended lines must be equipped with a cap, a blind flange, a plug, or a second valve.  Compressors must be equipped with a particular type of seal.  Penalties are $750 for each piece of equipment involving an open-ended line, sampling connection system, or instrumentation system.  The penalty is $2,000 for each compressor, closed vent system, surge control vessel, and bottom receiver. 

Pressure testing

When equipment is reconfigured for the production of different products or intermediates, the equipment must be pressure tested for leaks before it is placed into service.  A penalty of $11,250 is assessed per failure to test plus the sum of the per-equipment penalties –$100 per valve, flange, or connector; $400 per pump or agitator; and $2,000 per compressor, pressure relief valve, or closed vent system.

Also, if pressure testing indicates a leak, the leak must be repaired and the equipment retested for start-up.  If the equipment fails the second test, the leak must be repaired as soon as practicable, but not later than 30 days following the retest.  Penalties for violating these requirements are assessed per day with a 125-day cap– $150 per day for a valve, flange, or connector with an $18,500 cap; $500 per pump or agitator with a $62,500 cap; and $3,000 per day for a compressor or pressure relief valve with a $375,000 cap.

Finally, the regulations require that pressure be measured using certain units (e.g., pounds per square inch gauge).  A penalty of $250 may be assessed if other units are used (e.g., inches of mercury); however, this violation does not void the test results.

Click here for Appendix VI (Leak Detection and Repair Penalty Policy).

William C. Schillaci
BSchillaci@blr.com