HD50 - Study of the Use of State II Vapor Recovery Systems: Analysis of Costs and Benefits

  • Published: 1992
  • Author: Department of Air Pollution Control
  • Enabling Authority: House Joint Resolution 415 (Regular Session, 1991)

Executive Summary:
In 1990, the Virginia General Assembly adopted House Joint Resolution 415. This resolution directed the Virginia Department of Air Pollution Control (DAPC) to study the use of Stage II vapor recovery systems for controlling gasoline vapors released during the fueling of motor vehicles at service stations. Specifically, HJR 415 requested that the study include an analysis of the costs and benefits of such a program to the environment, public health, and industry.

Gasoline vapors are emitted into the air in substantial amounts during the transfer of gasoline from one container to another. Two types of control systems (Stage I and Stage II) are available to prevent vapors from being emitted during the transfer of gasoline products to and from above-ground storage tanks, transfer trucks, underground storage tanks, and motor vehicle tanks. Stage I vapor control systems prevent the emission of gasoline vapors during the transfer of product from the above-ground tanks at bulk terminals to transfer trucks and then into the smaller underground tanks at service stations. Stage II vapor control systems then prevent the emission of vapors during the transfer of gasoline product from service station tanks to vehicle fuel tanks. It is this last type of system, Stage II, which is the subject of this study.

System Technology

Stage II control systems consist of a special gasoline nozzle and vapor recovery hose connected to the pipes leading to the underground storage tank. The special nozzle and hose allows gasoline to flow from the underground storage tank into the vehicle tank while the gasoline vapors, collected at the vehicle fillpipe/nozzle interface, flow back to the underground storage tank. This process prevents gasoline vapors from being emitted into the air and returns them to the underground storage tanks. Stage II systems, which were originally bulky and difficult to operate, have greatly improved over the years because of technological advances in nozzle and hose components. As far as ease of handling is concerned, the size and weight of Stage II nozzles and hoses are now comparable to conventional hoses and nozzles.

Benefits

Gasoline vapors combine with other air pollutants to form ozone. High ozone levels are a serious threat to the old and infirm and impair the ability of healthy people to exercise. Excessive ozone also causes appreciable damage to forests, crops, buildings, and textiles. Furthermore, the chemical compounds in gasoline (especially benzene) have been found to be carcinogenic to humans. Stage II vapor recovery systems prevent the escape of gasoline vapors during the fueling of motor vehicles, thereby lessening the public's exposure to unpleasant gasoline fumes and their associated health effects.

Along with the health benefits, Stage II control systems can save substantial amounts of gasoline which would otherwise be lost to the air. For instance, a medium-sized station that pumps 50,000 gallons per month (600,000 gallons per year) will recover approximately 1,200 gallons of gasoline that would otherwise be released into the air in the form of gasoline vapors. This reduction in gasoline vapors and subsequent gasoline savings assumes the implementation of a Stage II program that meets EPA inspection and control requirement criteria for a Stage II program allowing an exemption for stations selling less than 10,000 gallons of gasoline per month. Most programs allow exemptions for service stations pumping 10,000 gallons or less per month.

Virginia's Gasoline Dispensing Facilities

Gasoline dispensing facilities in Virginia consist of approximately an equal number of public (retail) and private facilities, the latter owned and operated by government agencies, school systems, and companies of all sizes. The total number of private and public gasoline dispensing facilities is roughly 12,000, and in 1990 these facilities sold slightly more than three billion gallons of gasoline. Of Virginia's public facilities, it is estimated that approximately 34% are owned by independent small-business marketers of gasoline.

Costs

The costs of Stage II systems are most easily compared by looking at above-ground and underground components separately. The reason for this is that the cost of installing above-ground equipment is governed by the type of system installed, while the cost of installing underground equipment is governed by the layout of the station and whether other necessary underground work can be accomplished at the same time.

The capital cost for Stage II above-ground equipment and installation for a typical station with nine dispenser nozzles and average monthly sales of 50,000 gallons is approximately $16,810. The annual cost of Stage II equipment (primarily for the repair and replacement of hoses and nozzles) is about $3,138.

The cost of installing underground pipes is harder to estimate due to the many types of station layouts (orientation of islands and tanks). The cost of pipe installation for a nine-nozzle station with monthly sales of 50,000 gallons ranges from $7,000 to $8,000, depending on which Stage II system is used. Substantial savings can be realized, however, if pipes are installed when other work is being done on underground tanks, such as that needed to comply with the federal Underground Storage Tank program. EPA estimates a savings of 5% to 20% in total Stage II costs if piping is installed concurrently with other underground work.

The cost of Stage II control systems will probably be recovered through an increase in the sale price of the gasoline which is usually passed onto the consumer, and which most sources estimate to be one- to two-cent per gallon. With this price increase, a Stage II system installed at a medium-sized station (selling 50,000 gallons per month) could conceivably pay for itself in about six years, with larger stations (selling more than 100,000 gallons per month) recouping their costs in less time.

The cost-effectiveness of implementing a Stage II program in Virginia's three major urban areas (Northern Virginia, Richmond, and Hampton Roads) is estimated to range from $800 to $1200 per ton of reduced vapor emissions. This rate is very favorable in comparison with other existing technologies for control of the same pollutants. These other technologies have cost-effectiveness rates ranging between $2,000 and $6,000 per ton of reduced emissions. The cost-effectiveness of current controls to smaller businesses (due to mandates from the 1990 Clean Air Act amendments) is estimated to reach $15,000 per ton of reduced emissions.

Clean Air Act Statutory Requirements and Ongoing Programs

A "nonattainment area" is a geographical region which has failed to achieve the air quality standards set by the U. S. Environmental Protection Agency for the maximum allowable concentrations of certain air pollutants. In Virginia, as in most other states, the most problematic air pollutant is ozone. The 1990 Clean Air Act classifies ozone nonattainment areas according to five levels of severity (marginal, moderate, serious, severe, and extreme) and requires progressively more stringent control measures for each level. Virginia's three major urban areas all have air quality that does not meet the federal standard for ozone: the Northern Virginia nonattainment area is classified as serious; the Richmond nonattainment area is classified as moderate; and the Hampton Roads nonattainment area is classified as marginal. Stage II controls are now federally mandated, as a result of the 1990 Clean Air Act, for the Northern Virginia and Richmond nonattainment areas in an effort to attain the ozone standard.

The Act requires that all gasoline stations selling more than 10,000 gallons per month in moderate or worse ozone nonattainment areas install Stage II vapor recovery systems to prevent gasoline vapors from escaping to the atmosphere during motor vehicle fueling. An additional exemption is granted for stations selling less than 50,000 gallons per month which are owned by independent small business marketers. Gasoline stations required to install Stage II controls must do so within two years after the effective date of the state's Stage II regulation.

A number of states, counties, and cities are currently implementing Stage II control programs: California, New York, New Jersey, Massachusetts, the District of Columbia, St. Louis, Philadelphia, and Florida's Dade County. In addition to the District of Columbia and the nonattainment areas in the Northern Virginia and Richmond areas, the Clean Air Act amendments of 1990 have mandated statewide Stage II controls in the eleven northeastern states from Maine to Maryland as part of a comprehensive plan to reduce ozone pollution throughout the region.