STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MANASOTA-88, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 82-2364

) DEPARTMENT OF ENVIRONMENTAL ) REGULATION, )

)

Respondent, )

and )

)

MANATEE ENERGY COMPANY, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on January 10, 1983, in Tallahassee, Florida. The issues for determination at the hearing were whether Manatee Energy Company is entitled to two revisions of its operating Permit Number A041-26555 for a crude oil splitter located at Port Manatee.

APPEARANCES

For Petitioner: Thomas W. Reese

123 Eighth Street, North

St. Petersburg, Florida 33701

For Respondent: Martha Harrell Hall

Assistant General Counsel 2600 Blair Stone Road Tallahassee, Florida 32301

For Intervenor: W. Guy McKenzie

McKenzie & Panebianco Post Office Box 1200

Tallahassee, Florida 32302 INTRODUCTION

Petitioner Manasota-88, Inc., has challenged two revisions to intervenor Manatee Energy Company's permit to operate a crude oil splitter in Port Manatee. The first revision occurring on November 10, 1980, deleted reference to a specific number of barrels per day which could be produced and added specific limitations on the amount of heat input to the crude oil furnace (55 million BTU/hr) and the boiler (15 million BTU/hr). The second revision occurring on

January 19, 1981, changed the heat input limitations to 70 million BTU/hr for the furnace and boiler combined.

At the hearing, intervenor Manatee Energy Company presented the testimony of H. G. Hutchison, an engineer and Vice President of Manatee Energy Company. The intervenor's Exhibit 1 was received into evidence. The respondent Department of Environmental Regulation (DER) presented the testimony of John Svec, a senior permitting engineer with DER's Bureau of Air Quality Management, who was accepted as an expert witness in the field of engineering with a subspecialty in air pollution permitting. The petitioner presented no witnesses at the hearing. Joint Exhibits 1 through 11 were received into evidence.

Subsequent to the hearing, each party submitted proposed findings of fact and proposed conclusions of law. To the extent that the parties' proposed findings of fact are not incorporated in this Recommended Order, they are rejected as being either not supported by competent substantial evidence adduced at the hearing, irrelevant or immaterial to the issues in dispute, or as constituting conclusions of law as opposed to findings of fact.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the stipulations of fact entered into by the parties prior to the hearing, the following relevant facts are found:

1. Petitioner Manasota-88, Inc., is a nonprofit corporation organized for the protection of the environment and has members who are residents of Manatee County. This organization filed a timely petition for hearing on the subject November 19, 1980, and January 1981 permit revisions.

   
   

2. The intervenor Manatee Energy Company is the owner and operator of a crude oil splitter located in Port Manatee, Manatee County, Florida. This facility is a potential source of air pollutants, received a construction permit in 1978, and is permitted to operate under Permit Number A041-26555 issued by the DER in March of 1980.

   
   

3. The intervenor's application to obtain a construction permit indicated a total process input rate of 15,000 to 22,000 barrels per day of crude oil. The splitter was to be fueled by either liquid petroleum gas or fuel oil with a sulfur content of 0.7 percent weight or less. The type of crude oil to be

   processed was not specified. The application further specified that the maximum heat input rate would be 70 million BTU/hr, and that the normal operating time would be 350 days per year, seven days per week and 24 hours per day.

   
   

4. DER's Permit Number A041-26555, which authorized the operation of the crude oil splitter, described the facility as follows:

   
   

   ". . .a Crude Oil Splitter (15,000 BPSD) to separate crude oil by distillation into jet fuel (JP4 and/or Jet A), diesel fuel, and Bunker C. This permit includes the furnaces, boiler, burnoff flare, and storage tanks under the supervision of Manatee Energy.

   Combustion devices to be fired with LPG or fuel oil with a sulfur content of 0.7 percent or less. Facility located at Port Manatee."

   This permit also included specific conditions limiting particulate and sulfur dioxide emissions in terms of an amount of emissions per unit of heat input into the furnace and boiler. Because the crude oil splitter operates as a closed system, the heat input to the combustion units--the furnace and boiler-- determines the level of emissions from those sources.

   
   

5. During the application and original permit process, Manatee Energy Company did not know the precise quality or grade of crude oil which would be utilized. In the early course of operations, it was discovered that considerably larger volumes of input (as much as 28,000 barrels per day), if processed at the normal design heat input rate, would not result in atmospheric emissions which violated the original permit conditions. For this reason, Manatee Energy Company, by letter dated October 22, 1980, and supplemented by letter dated October 29, 1980, sought a "clarification" in the conditions pertaining to its operating permit. In effect, Manatee Energy Company wanted to know if the original permit allowed a product input of greater than 15,000 barrels per day if other limitations on emissions from the furnace and boiler would not be violated.

   
   

6. In support of its request for clarification, Manatee Energy Company submitted data regarding results from emission tests. The information submitted was not on a DER application form and did not include the certification of a professional engineer registered in the State of Florida, DER has subsequently received a letter dated November 22, 1982, from a Florida registered engineer certifying that the data submitted by Manatee Energy Company on October 22 and 29, 1980, was in conformity with sound engineering principles and offering the opinion that current permit conditions would not be violated by the facts submitted.

   
   

7. DER responded to the October 22 and 29, 1980, letters from Manatee Energy Company by issuing a revised operating permit on November 10, 1980. This revised permit deleted the prior restriction on product input rate (15,000 barrels per day) contained in the project description and added a specific condition restricting the maximum heat input to the crude oil furnace to 55 million BTU per hour and to the boiler to 15 million BTU per hour.

   
   

8. The permit revision issued by DER on November 10, 1980, did not allow a change in the physical premises of the plant, a change in the sulfur content of the fuel, or a change in the amount of heat input to the plant. Consequently, Manatee Energy Company did not request, and the revision did not allow, any additional atmospheric emissions, nor did it allow any increase in emissions which would exceed the limitations imposed in the original operating permit. An increase in the rate at which raw material is processed does not result in an increase in emissions. A cap on the amount of heat input also caps the amounts of emission. Stated differently, if the combustion of the fuel is being held constant by a limitation on the amount of allowable heat input, there will be no increase in emission regardless of the product input rate. The main effect of an increase in product input is on storage.

   
   

9. The furnace and the boiler burn the same fuel. Further operating experience revealed that the boiler did not require 15 million BTU of heat input to perform its function, but only required 5 or 6 million BTU depending on the type of oil or other circumstances, such as wind. Manatee Energy Company therefore sought another clarification of the conditions of its operating permit as to the need to have separate allocations of heat input to the furnace and the boiler. In response to this request, DER, by letter dated January 19, 1981, changed the permit conditions by restricting the combined heat input to the

   furnace and boiler to 70 million BTU per hour, and removing the separate allocations of 55 million BTU/hr for the furnace and 15 million BTU/hr for the boiler. No changes were made to the emissions or the quality of fuel authorized under the original permit. This revision was not preceded by a permit application on a DER form certified by a professional engineer registered in the State of Florida.

   
   

10. The level of emission from the furnace and boiler at the heat input capacity of 55 million BTU per hour and 15 million BTU per hour, respectively, would be the same as the level of emission from the furnace and boiler at the combined heat input capacity of 70 million BTU per hour. Therefore, the January 1981 permit revision did not allow emissions in excess of that allowed by the November 1980 permit revision. The 70 million BTU per hour heat input rate to the furnace and boiler specified in the two challenged revisions is the same as that indicated in the construction application submitted by Manatee Energy Company for the crude oil splitter. There being no increases in allowable heat input to the furnace and boiler, there is no increase in pollutant emissions from the two sources.

    
    

11. By letter dated July 1, 1982, Manatee Energy Company requested that the storage tanks be deleted from Permit Number A041-26555 for the reason that it no longer contemplated using this previously leased tankage in connection with further refinery operations. By letter dated September 14, 1982, DER informed Manatee Energy Company that its permit was being changed by deleting reference to the storage tanks in the project description and by replacing a condition concerning the storage tanks with the following language:

    
    

    "6. The crude oil splitter cannot be operated unless the necessary storage tanks are in the possession and control of Manatee Energy Company, the tanks meet all Department regulations, and Manatee Energy Company obtains the required permit(s)."

    
    

    This permit revision or modification is not the subject of challenge in the instant proceeding. It is relevant only to illustrate that any issue as to an increase in hydrocarbon discharges resulting from increased production is now mooted, since the storage tanks were the only source of hydrocarbon and volatile organic compound emissions associated with the crude oil splitter.

    
    

    CONCLUSIONS OF LAW

    
    

12. As a stationary source of air pollution, Manatee Energy Company's crude oil splitter must obtain permits from the DER to construct, operate, maintain, expand or modify its facility. Section 403.087, Florida Statutes. Such permits may only be issued if the applicant affirmatively provides the DER with reasonable assurances based on plans, test results and other information that its activity will not discharge, emit or cause pollution in contravention of DER standards or rules. An applicant for a permit is required to apply on forms prescribed by the Department and to have the application certified by a professional engineer registered in Florida. Rule 17-4.07(1) and (4), Florida Administrative Code.

    
    

13. The petitioner in this proceeding contends that Manatee Energy Company is not entitled to the permit revisions of November of 1980 and January of 1981 on the grounds that they constituted "modifications" to the original operating permit and therefore required new reasonable assurances on a DER application

    form certified by a professional engineer. Whether the revisions were merely clarifications or modifications requiring new assurances is controlled by the Department's rule defining the word "modification."

    
    

14. The applicable rule in this case is Rule 17-2.02(81), Florida Administrative Code (1980), which defines a "modification" as follows:

    
    

    (81) "Modification" -- Any physical change in, or change in the method of operation or addition to a stationary facility which increases the potential to emit any such air pollutant including any not previously emitted from any source within such facility.

    
    

    A physical change shall not include routine maintenance, repair, and replacement.

    
    

    A change in the method of operation, unless previously limited by an enforceable permit condition, shall not include:

    
    

    An increase in the production rate, if such increase does not exceed the operating design capacity of the source;

    
    

    An increase in the hours of operation;

    
    

    Use of an alternative fuel or raw material, if prior to January 6, 1976, the source was capable of accommodating such fuel or raw material;

    
    

    Change in ownership of the source or facility.

    
    

15. Here, the evidence demonstrates that the first revision in November of 1980 did remove the production rate previously designated as the crude oil splitter's design capacity. Therefore, under the quoted Rule, there was a change in the facility's method of operation. However, the controlling portion of the definition of a "modification" is that it be a "change in the method of operation. . .which increases the potential to emit any. . .air pollutant. . ." The evidence is clear from the record of this proceeding that an increase in production rate does not result in an increase in the potential emissions of any air pollution source so long as the allowable heat input and fuel quality for the combustion devices are unchanged. There was no change requested or granted in the amount of heat input to the facility or the required quality of fuel by the first revision. A limitation on production was demonstrated to be unrelated to the level of emissions from the facility. Therefore, this permit revision did not constitute a "modification." Likewise, the combining of the previously separated heat input allocations to the furnace and boiler, as done in the second revision, did not result in an increased level of emissions and was not a "modification" within the definition of Rule 17-2.02(81), Florida Administrative Code (1980).

    
    

16. A permit is only required for construction, operation, maintenance, expansion or modification of installations which may reasonably be expected to be a source of pollution. Section 403.087(1) and (4), Florida Statutes. Manatee Energy Company already possessed permits for construction and for

    operation of its crude oil splitting facility. The changes in its production rate did not affect or increase the potential to emit air pollutants. The insertion of heat input limitations into the permit conditions was in accordance with its original construction permit application and did not constitute a change in the method of operation. As such, the revisions of November 1980 and January 1981 did not constitute "modifications" for which a permit must be obtained after the provision of new reasonable assurances on an application certified by a registered professional engineer. Manatee Energy Company has demonstrated that it is entitled to the two permit revisions under challenge in this proceeding, and the petitioner has failed to adduce any competent substantial evidence to the contrary.

    
    

17. The issue of whether a new operating permit will be required in the future based upon the latest (September 14, 1982) revision to Permit Number A041-26555 is not properly before the Hearing Officer in this proceeding.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Intervenor's request for revisions to its Permit Number A041-26555 be GRANTED as proposed by the Department of Environmental Regulation on November 10, 1980, and January 19, 1981.

Respectfully submitted and entered this 17th day of March, 1983, in Tallahassee, Leon County, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1983.

COPIES FURNISHED:

Thomas W. Reese

123 Eighth Street, North

St. Petersburg, Florida 33701

Martha Harrell Hall Assistant General Counsel 2600 Blair Stone Road Tallahassee, Florida 32301

W. Guy McKenzie McKenzie & Panebianco Post Office Box 1200

Tallahassee, Florida 32302

Victoria Tschinkel, Secretary Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, Florida 32301

Docket for Case No: 82-002364

Orders for Case No: 82-002364