# **Oil-Fired Generators** 

# **Recommendations To EPA**

The oil-fired steam electric generators ("OFG") have attempted to
develop a framework for EPA to utilize in establishing a MACT standard
under § 112 of the Clean Air Act. The lack of information on the risks
presented from nickel emissions from oil-fired power plants and the
limited data on nickel emissions from such plants represent a
significant obstacle. For the purpose of making these recommendations,
the OFG does not address at this time the poor foundation used to
include oil-fired generators in the § 112 rule making process.
Nonetheless, the lack of emission data from these sources is a serious
problem. EPA has stack-test data, reflecting approximately three hours
of operation for each test, from twelve oil-fired units.[^1] The range
of nickel emissions from the tests is extreme: from 50.50 lbs/trillion
BTU to over 2167 lbs/trillion Btu. Interestingly, both of these data
points were from units equipped with electrostatic precipitators. EPA
also has limited data on nickel concentration in oil that reflects
similarly extreme variability.

In light of the limited data and the extreme variability exhibited in
the data, the industry representatives strongly recommend that any MACT
standard must be based on all relevant (i.e., not pilot testing R&D)
data and that compliance with any standard be based on annual emissions.
These two recommendations are critical to address the variability of the
data and to provide necessary compliance flexibility for a source
category with highly diverse operating characteristics. A discussion of
the OFG's recommendations follows.

**Form of Standard for Oil-fired Generators**

The Oil-Fired Working Group has agreed that there is no evidence
indicating that nickel emissions from oil-fired generators pose any
acute exposure risk. However, to the extent that power plant nickel
emissions pose a risk, the environmental objective should be to reduce
the total mass emissions from oil-fired power plants. This can be
achieved in several ways.

**Option 1: Mass-emissions standard**. The OFG believes that
establishing an annual mass-emissions standard for oil-fired generators
represents the best approach for achieving reductions in total nickel
emissions and accords industry the greatest flexibility in achieving the
emission reduction goals.

**Option 2: Rate-based standard**. A rate-based standard with an annual
compliance period could achieve many of the same objectives of a
mass-emissions standard, although it could pose unnecessary hardships on
a number of peaking units that do not have duel fuel firing capability
or limited fuel flexibility. For example, some units are "captive" to a
local refinery for their residual fuel and cannot dictate supply terms.

The electric generating industry prefers that any MACT standard be
expressed as an annual mass limit for multiple reasons. Most of the
oil-fired generators in the country are utilized for non-baseload
purposes. That is, they operate for relatively short periods of time.
Many of these units have dual-fuel capability to some extent; some units
have the ability to burn natural gas, whenever gas is available, while
others have the ability to burn gas only as a supplemental fuel. For
many units, particularly in the Northeast, having the ability to burn
both oil and gas is critical to ensuring reliability because of the
frequent gas curtailments during winter. Without the ability to burn oil
during the winter peaks, many units would be forced to retire.
Similarly, these units typically are used for peaking purposes only so
that any requirement to install control devices (e.g. electrostatic
precipitators) to meet a short term emission rate limit likely would
force many of the units to retire. In addition, during summer peaks,
transmission reliability constraints may preclude burning natural gas.

The industry prefers setting an annual mass emission limit because it
would allow units greater flexibility in meeting the limit, while
achieving the same environmental objective. A unit would have multiple
options to meet the annual limit. The options would include:

-   Installing particulate control devices

-   Co-firing with natural gas

-   Fuel switching to natural gas

-   Contracting for lower-nickel oil (which may not be possible)

-   Reduced utilization

-   Load shifting to alternative generation

Each plant would be able to make compliance decisions that best suit the
plant's situation, depending on fuel availability, operating levels,
curtailment requirements, etc. In addition, as discussed below, the
compliance monitoring would be much easier with a mass emission limit.

If the Agency decides that it must set the MACT standard in the form of
an emission rate, the OFG recommends two critical components. First,
compliance with the standard must be on an annual basis. This will
address some, but not all, of the constraints faced by the oil-fired
generators in different parts of the country. Second, the standard must
be fuel neutral, based on total heat input, or be output based (i.e.
lbs/Mwh). This will provide companies with some flexibility to manage
unpredictable factors such as fuel availability, demand changes, etc.

**Basis for Establishing Standard**

The OFG believes that the limited emissions data collected under this
rule makes it very difficult, if not impossible, to set a MACT standard
that meets the § 112 achievability and performance requirements. Section
112 of the Clean Air Act requires EPA to establish the MACT standard for
existing sources based on the "average emission limitation achieved by
the best performing 12 percent of the existing sources (for which the
Administrator has emissions information) . . . ." The same section
states that, for source categories with less than 30 sources, the
standard should be based on "the average emission limitation achieved by
the best performing 5 sources (for which the Administrator has or could
reasonably obtain emissions information) . . . ."

EPA has emissions data from twelve units within the source category.
There are approximately 130 to 145 oil-fired units in operation based on
EPA's most recent information. Thus, the statute would require EPA to
utilize data from approximately 16 units (12% x 130 = 16.7; 12% of 145 =
17.4). EPA has data from only 12. If EPA does not intend to obtain
additional data from oil-fired generators, the OFG strongly recommends
that EPA utilize the emissions data from all 12 units for which it has
data in establishing the MACT standard.

The OFG opposes the suggestion that the Agency could set the MACT
standard based on two data points. The OFG also opposes utilizing the
lowest five stack tests from the limited data base. The OFG's reasoning
is simple. First, basing a MACT standard on the results of two,
short-term stack tests would be manifestly inadequate under the statute.
Congress intended for EPA to obtain data from an adequate number of
sources to be able to set a realistic and achievable standard. The two
units represent about one and a half percent of the units in the source
category. The combined six hours worth of operating data from those
units represents an infinitesimal percentage of operations even from
those two units. Second, Congress dictated that for smaller source
categories, with under 30 sources, EPA must utilize at least five
sources in developing the MACT standard. Congress could not have
intended EPA to utilize only two sources for a source category with over
140 sources in the category.

The OFG also opposes utilizing five stack tests for setting the MACT
standard for two reasons. First, the provision of § 112 allowing EPA to
use only five sources is inapplicable to the oil-fired generator source
category, which has well over 30 sources. Second, it would produce an
anomalous result. Of the best performing five sources, two are equipped
with electrostatic precipitators. If EPA set the MACT standard on the
average of the five sources, one of these units would not be able to
comply with the standard. This would violate the achievability
requirement of § 112.

**Applicability**

Finally, the OFG recommends that low-utilization and small units be
exempted from applicability. That is, units that utilize less that
[X]{.underline} bbls per year of oil should be excluded from any
requirements under the rule. This would allow some units to avoid
applicability of the rule by taking constraints on the quantity of oil
burned in any given year. For example, the definition of oil-fired unit
under 40 C.F.R. Part 72 includes units that burn more than 10% oil
annually on a three-year average basis. Part 72 also excludes units that
serve a generator less than 25 MW. The OFG believes the same exclusions
should apply to this rule making.

[^1]: ^?^ EPA has 14 stack tests in total. One plant was tested twice.
    The other data point was from a pilot scale project that used a
    fabric filter, a technology that is not in commercial operation on
    any oil-fired unit in the country.