1. January 7, 2015 Proposed Final Report: Gas Vapor Regulations The Legislature’s Decentralized Approach Neither Requires nor Produces Consistency, and Current Regulations May Be Requiring Outdated Technology Zane Potter, JLARC Staff

2. Federal Clean Air Act Regulates Air Emissions in the United States January 7, 2015Gas Vapor Regulations2/14  Gasoline vapors are a source of ground-level ozone (smog) which poses a risk to human health and the environment  Environmental Protection Agency is responsible for establishing air quality standards and regulations  Federal Act gives states flexibility in how to organize themselves to meet EPA’s standards and regulations

3. Washington’s Clean Air Act Allows Decentralized Approach to Regulating Air Quality January 7, 2015Gas Vapor Regulations3/14 Cowlitz Wahkiakum Clark Skamania Lewis Southwest Clean Air Agency Mason Clallam Jefferson Grays Harbor Thurston Pacific Olympic Region Clean Air Agency Snohomish King Pierce Kitsap Puget Sound Clean Air Agency Grant Walla Franklin Adams Lincoln Ferry Stevens Pend Oreille Whitman Columbia Garfield Asotin Ecology: Eastern Regional Office Spokane Spokane Regional Clean Air Agency Yakima Yakima Regional Clean Air Agency San Juan Ecology: Northwest Regional Office Whatcom Skagit Island Northwest Clean Air Agency Kittitas Chelan Okanogan Douglas Ecology: Central Regional Office Klickitat Ecology: Central Regional Office Benton Benton Clean Air Agency Greyed areas = Tribal lands Note: EPA has authority over air quality issues on reservation lands

4. Washington Has Approximately 2,800 Gas Stations January 7, 2015Gas Vapor Regulations4/14 Puget Sound 1,300 stations Puget Sound 1,300 stations Northwest 166 stations Northwest 166 stations Ecology 416 stations Ecology 416 stations Spokane 172 stations Spokane 172 stations Benton 74 stations Benton 74 stations Yakima 103 stations Yakima 103 stations Olympic 292 stations Olympic 292 stations Southwest 334 stations Southwest 334 stations

5. Key Points From Report  Agency fees, methodologies used to determine agency fees and inspection frequency varies  25 other states use a decentralized approach to regulating air quality  Washington’s current regulations may be requiring outdated technology that may increase emissions January 7, 2015Gas Vapor Regulations5/14 Legislative Auditor recommends completing an analysis to avoid increasing emissions Agencies: Concur OFM: Did not provide a response

6. Stage II Vapor Recovery Systems Capture Gasoline Vapors During the Refueling of Motor Vehicles January 7, 2015Gas Vapor Regulations6/14  1990 federal legislation required Stage II in 27 states (including WA) to meet federal ozone standard  Costs $20K to $60K to install per station; $3,000 per year to maintain Vapor Liquid Gas tank Vapor recovery nozzle Coaxial hose vapor liquid vapor liquid

7. Stage II Systems Were Intended to Help Regions Meet the Federal Ozone Standard January 7, 2015Gas Vapor Regulations7/14 Three agencies require Stage II systems at about 1,300 gas stations across seven counties: Puget Sound Clean Air Agency Snohomish King Kitsap Pierce Ecology Thurston Cowlitz Southwest Clean Air Agency Clark S NOHOMISH K ING P IERCE K ITSAP T HURSTON C OWLITZ C LARK

8. Onboard Refueling Vapor Recover (ORVR) Systems Also Capture Gasoline Vapor During Refueling of Vehicles January 7, 2015Gas Vapor Regulations8/14  Federal legislation required EPA to adopt ORVR regulations for automobile manufacturers  This system was phased in for new vehicles beginning in 1998 Vapor Liquid Balance nozzle ORVR canister liquid Gas tank vapor liquid

9. Some Stage II Systems Can Increase Emissions Because of New Technology  In 2012 EPA no longer required stage II vapor recovery systems to meet federal the ozone standard  Stage II systems have become largely redundant because more cars have ORVR  Limited compatibility between ORVR systems installed on cars and some Stage II systems may increase emissions  EPA determination allowed, but did not require, states to remove Stage II January 7, 2015Gas Vapor Regulations9/14

10. Other States Taking Steps to Remove Stage II January 7, 2015Gas Vapor Regulations10/14 NJ NV OR WA CA OH IN TN TX WI IL GA LA AZ PA ME VT CT RI DE MD NH VA KY MO NY Has not determined when to remove Stage II Completed analysis, determined that Stage II needed until about 2017 Completed analysis, will keep Stage II for at least another decade Taking steps to remove Stage II Not completed Stage II analysis No Stage II requirement MA

11. Ecology and Local Agencies Have Not Determined When to Remove Stage II  Ecology has yet to undertake emissions analysis  Southwest completed an analysis in 2012, but agency staff indicated that it was not shared with Board or made publicly available  Puget Sound completed two analyses; however, some factors are inconsistent with EPA guidance January 7, 2015Gas Vapor Regulations11/14 JLARC staff estimated that Stage II systems could begin to increase emissions as soon as 2020 in Southwest and Puget Sound

12. Legislative Auditor Recommendation: Complete Emissions Analysis January 7, 2015Gas Vapor Regulations12/14 The Department of Ecology and the local clean air agencies should estimate and publish when Stage II requirements will begin to increase emissions This analysis should determine whether keeping Stage II systems helps the regions meet EPA’s current ozone standard and the costs and cost effectiveness associated with keeping these systems Agencies: Concur OFM: Did not provide a response

13. Legislative Auditor’s Comment on Agencies’ Response January 7, 2015Gas Vapor Regulations13/14  There may be reasons to keep Stage II requirements for a limited number of gas stations in WA  The analyses conducted by Puget Sound Clean Air Agency had key shortcomings which were not acknowledged in the agencies’ response to the recommendation  Moving forward, Legislative Auditor urges any future analyses include factors that are consistent with EPA guidance and include cost considerations

14. Contact Information Zane Potter, Research Analyst zane.potter@leg.wa.gov 360-786-5194 Eric Thomas, Research Analyst eric.thomas@leg.wa.gov 360-786-5182 Valerie Whitener, Project Supervisor valerie.whitener@leg.wa.gov 360-786-5191 www.jlarc.leg.wa.gov