United States - Environmental Protection Agency

Office of Air Quality Planning and Standards Research Triangle Park,
NC 27711

EPA-xxx/x-xx-xxx

December 2006

> Air
>
> **[National Emission Standards for Hazardous Air Pollutants: Oil and
> Natural Gas Production - Background Information for Final
> Standards]{.smallcaps}**
>
> **[Summary of Public Comments and Responses]{.smallcaps}**

EPA-XXX/X-XX-XXX

National Emission Standards for Hazardous Air Pollutants: Oil and
Natural Gas Production Facilities

> Background Information for Promulgated Standards - Summary of Public
> Comments and Responses.

Sector Policies and Programs Division

U.S. Environmental Protection Agency

Office of Air and Radiation

Office of Air Quality Planning and Standards

Research Triangle Park, NC 27711

TABLE OF CONTENTS

[1.0 SUMMARY 1](#summary)

[2.0 SUMMARY OF PUBLIC COMMENTS 5](#summary-of-public-comments)

[2.1 General Comments on Proposal 5](#general-comments-on-proposal)

[*2.1.1* *Complexity* 5](#complexity)

[*2.1.2* *Lag Time between Proposals* 6](#lag-time-between-proposals)

[*2.1.3* *Request for Comment Extension*
6](#request-for-comment-extension)

[2.2 Compliance Date 7](#compliance-date)

[2.3 Applicability 10](#applicability)

[*2.3.1* *Applicability to TEG Units Only*
10](#applicability-to-teg-units-only)

[*2.3.2* *Transmission of Oil and Natural Gas*
10](#transmission-of-oil-and-natural-gas)

[*2.3.3* *Outer Continental Shelf* 11](#outer-continental-shelf)

[*2.3.4* *Geographic Applicability Criteria*
12](#geographic-applicability-criteria)

[*2.3.5* *Urban Definition* 17](#urban-definition)

[2.4 Exemptions 23](#exemptions)

[*2.4.1* *Define Low-Risk Subcategory* 23](#define-low-risk-subcategory)

[*2.4.2* *Distance Exemption* 23](#distance-exemption)

[*2.4.3* *Size Cutoffs* 25](#size-cutoffs)

[*2.4.4* *Decline Rates* 27](#decline-rates)

[*2.4.5* *Transition Policy On \"Potential To Emit\"*
28](#transition-policy-on-potential-to-emit)

[*2.4.6* *Documentation to Prove Exemptions*
29](#documentation-to-prove-control-equipment-exemptions)

[2.5 Control Requirements 29](#control-requirements)

[*2.5.1* *Controls for Remote/Unmanned Sources*
29](#controls-for-remoteunmanned-sources)

[*2.5.2* *Start-up, Shutdown, Malfunction Plans*
31](#start-up-shutdown-malfunction-plans)

[2.6 Reporting and Recordkeeping 32](#reporting-and-recordkeeping)

[2.7 Test Methods 33](#test-methods)

[2.8 Impacts Analyses 33](#impacts-analyses)

[*2.8.1* *TEG Dehydrator Population Estimate*
33](#teg-dehydrator-population-estimate)

[*2.8.2* *No New Area Source Assumption*
35](#no-new-area-source-assumption)

[*2.8.3* *Unmanned Facilities Use of Flares*
36](#unmanned-facilities-use-of-flares)

[*2.8.4* *Sensitivity To Operating Costs*
36](#sensitivity-to-operating-costs)

[2.9 Comments Received on February 6, 1998, Proposed Rule
37](#comments-received-on-february-6-1998-proposed-rule)

[*2.9.1* *Definition of Urban Area* 42](#definition-of-urban-area)

[*2.9.1.1* *Interpretation of Section 112(n)(4)*
42](#__RefHeading___Toc143490402)

[*2.9.1.2* *Distinction between \"Urban\" and \"Urbanized\"*
43](#__RefHeading___Toc143490403)

[*2.9.1.3* *Classification of Entire Counties as Urban*
44](#__RefHeading___Toc143490404)

[*2.9.1.4* *Risk-distance Option* 46](#__RefHeading___Toc143490405)

[*2.9.2* *Area Source Regulation* 49](#area-source-regulation)

[*2.9.3* *Control Efficiency* 54](#control-efficiency)

[*2.9.4* *Monitoring, Recordkeeping, and Reporting*
54](#monitoring-recordkeeping-and-reporting)

[3.0 REFERENCES 56](#references)

# SUMMARY {#summary .Level-1}

The U.S. Environmental Protection Agency (EPA) placed in the *Federal
Register* on July 8, 2005 (70 FR 39441), a supplemental notice of
proposed rulemaking to the February 6, 1998 (63 FR 6288) proposed
national emissions standards for hazardous air pollutants (NESHAP) to
limit emissions of hazardous air pollutants (HAP) from oil and natural
gas production facilities that are area sources. The final NESHAP for
major sources was promulgated on June 17, 1999 (64 FR 32610), but final
action with respect to area sources was deferred. This July 8, 2005
action proposed changes to the 1998 proposed rule for area sources,
proposed alternative applicability criteria, and reopened the public
comment period to solicit comment on the changes proposed. The public
comment period closed on September 6, 2005. The purpose of this document
is to present a summary of the public comments received on the
supplemental proposal as well as the February 6, 1998 proposal and the
responses developed by EPA.

The electronic docket for the July 8, 2005 supplemental proposal
contains 18 comment letters from 14 separate organizations. The
commenters represent the following affiliations: industry (5 companies),
industrial trade associations (7 organizations), state agencies (1
agency), and an industry consultant (1 company). Some of these
commenters supported by reference the substantive comments made by
others. Table 1 presents a listing of all persons submitting written
comments, their affiliation, and the docket item number for their
comments. The docket number for this action is EPA-HQ-OAR-2004-0238.
Comments for the February 6, 1998 proposed rule are addressed in section
2.9 of this document (Comments Received on February 6, 1998, Proposed
Rule).

**Table 1. List of Commenters on the Supplemental Notice of Proposed
Rulemaking on National Emission Standards for Hazardous Air Pollutants:
Oil and Natural Gas Production Facilities**

+--------------------+-------------------------------------------------+
| **Document Docket  | **Commenter, Addressee, Title, or Description** |
| ID**               |                                                 |
+====================+=================================================+
| **0019**           | Stephanie R. Meadows\                           |
|                    | Upstream Coordinator\                           |
|                    | American Petroleum Institute\                   |
|                    | 1220 L Street, NW\                              |
|                    | Washington, DC 20005                            |
+--------------------+-------------------------------------------------+
| **0020**           | Stephanie R. Meadows\                           |
|                    | Upstream Coordinator\                           |
|                    | American Petroleum Institute\                   |
|                    | 1220 L Street, NW\                              |
|                    | Washington, DC 20005                            |
+--------------------+-------------------------------------------------+
| **0021**           | G.H.Holliday, Ph.D., P.E., DEE\                 |
|                    | Holliday Environmental Services, Inc.\          |
|                    | P.O. Box 2508\                                  |
|                    | Bellaire, TX 77402                              |
+--------------------+-------------------------------------------------+
| **0022**           | Robert J Sandilos\                              |
|                    | Senior Government Relations Advisor\            |
|                    | Chevron North America Exploration and           |
|                    | Production\                                     |
|                    | 1500 Louisiana St.\                             |
|                    | Houston, TX 77002                               |
+--------------------+-------------------------------------------------+
| **0023**           | Lisa C. Moerner\                                |
|                    | Manager - Environmental Policy\                 |
|                    | Dominion Resources Services, Inc.\              |
|                    | 5000 Dominion Blvd\                             |
|                    | Glen Allen, VA 23060                            |
+--------------------+-------------------------------------------------+
| **0024**           | Pamela F. Faggart\                              |
|                    | Vice President and Chief Environmental Officer\ |
|                    | Dominion Resources Services, Inc.\              |
|                    | 5000 Dominion Blvd\                             |
|                    | Glen Allen, VA 23060                            |
+--------------------+-------------------------------------------------+
| **0025**           | Margaret Young\                                 |
|                    | Koch Exploration Company LLC\                   |
|                    | 9777 Pyramid Court, Suite 210\                  |
|                    | Englewood, CO 80112                             |
+--------------------+-------------------------------------------------+
| **0026**           | Joel D. Howard\                                 |
|                    | Manager - Health, Environment & Safety Services |
|                    |                                                 |
|                    | Marathon Oil Company                            |
|                    |                                                 |
|                    | P.O. Box 3128\                                  |
|                    | Houston, TX 77253                               |
+--------------------+-------------------------------------------------+
| **0027**           | Gregory D. Russell\                             |
|                    | Vorys, Sater, Seymour, and Pease LLP\           |
|                    | 52 East Gay Street\                             |
|                    | Columbus, OH 43216\                             |
|                    | on behalf of the Ohio Oil and Gas Association   |
+--------------------+-------------------------------------------------+
| **0028**           | Larry Lashley\                                  |
|                    | Louisiana Department of Environmental Quality\  |
|                    | 318-676-5088                                    |
+--------------------+-------------------------------------------------+
| **0029**           | Robert Radabaugh\                               |
|                    | Chairman\                                       |
|                    | Independent Oil and Gas Association of West     |
|                    | Virginia\                                       |
|                    | 405 Capitol Street, Suite 507\                  |
|                    | Charleston, WV 25301                            |
+--------------------+-------------------------------------------------+
| **0030**           | Barry Russell\                                  |
|                    | President\                                      |
|                    | Independent Petroleum Associaton of America     |
+--------------------+-------------------------------------------------+
| **0031**           | Angie Burckhalter\                              |
|                    | V.P. of Regulatory Affairs\                     |
|                    | Oklahoma Independent Petroleum Association\     |
|                    | 3555 N.W. 58th Street, Suite 400\               |
|                    | Oklahoma City, OK 73112                         |
+--------------------+-------------------------------------------------+
| **0032**           | Lisa Beal\                                      |
|                    | Director\                                       |
|                    | Environment and Construction Policy\            |
|                    | Interstate Natural Gas Association of America\  |
|                    | 10 G Street, N.E., Suite 700\                   |
|                    | Washington, DC 20002                            |
+--------------------+-------------------------------------------------+
| **0033**           | Lisa Beal\                                      |
|                    | Director\                                       |
|                    | Environment and Construction Policy\            |
|                    | Interstate Natural Gas Association of America\  |
|                    | 10 G Street, N.E., Suite 700\                   |
|                    | Washington, DC 20002                            |
+--------------------+-------------------------------------------------+
| **0034**           | Nicholas DeMarco\                               |
|                    | Executive Director\                             |
|                    | West Virginia Oil and Natural Gas Association\  |
|                    | P.O. Box 3231\                                  |
|                    | Charleston, WV 25332                            |
+--------------------+-------------------------------------------------+
| **0035**           | Stephanie R. Meadows\                           |
|                    | Upstream Coordinator\                           |
|                    | American Petroleum Institute\                   |
|                    | 1220 L Street, NW\                              |
|                    | Washington, DC 20005                            |
+--------------------+-------------------------------------------------+
| **0036**           | Stephanie R. Meadows\                           |
|                    | Upstream Coordinator\                           |
|                    | American Petroleum Institute\                   |
|                    | 1220 L Street, NW\                              |
|                    | Washington, DC 20005                            |
+--------------------+-------------------------------------------------+
| **0043**           | Don Scott Wallace\                              |
|                    | Sr. Environmental Specialist\                   |
|                    | Devon Energy Corporation\                       |
|                    | 20 North Broadway\                              |
|                    | Oklahoma City, Oklahoma 73102                   |
+--------------------+-------------------------------------------------+

# SUMMARY OF PUBLIC COMMENTS {#summary-of-public-comments .Level-1}

# General Comments on Proposal {#general-comments-on-proposal .Level-1}

# *Complexity* {#complexity .Level-1}

[Comment:]{.underline} One commenter (0021) stated that the proposal was
too complex. The commenter (0021) stressed that many TEG dehydrators are
operated by small independent Exploration and Production (E&P)
operators. The commenter (0021) was concerned that the format of the
proposal (i.e., amendatory text) precluded small independent operators
from providing comments. The commenter (0021) maintained that
cutting/pasting the amendatory language into subpart HH is a daunting
task not only for an experienced person, but it would be an impossible
task for an independent E&P operator who is not subject to the major
source rule. The commenter (0021) recommended that EPA withdraw the
proposed rule and prepare a more understandable rule for only area
sources.

[Response:]{.underline} While this is our standard method of
amending rules that have been published in the code of federal
regulations (CFR), we agree with the commenter that reading this
amendatory language may be difficult. Therefore, we have added a copy of
the entire rule (in redline/strikeout format) to the oil and natural gas
production website (<http://www.epa.gov/ttn/atw/oilgas/oilgaspg.html>).
Since the control requirements for area source TEG dehydrators are
similar to the requirements for major source dehydrators contained in 40
CFR part 63 subpart HH, we believe it is more efficient to amend subpart
HH to incorporate area source provisions rather than create a separate
area source rule as suggested by the commenter.

[Comment:]{.underline} One commenter (0021) referred to the
applicability options for the location criteria. Specifically, the
commenter (0021) stated that by offering two options for area source
control implementation when an area source changes from Rural to Urban-1
or Urban-2 status, EPA has increased the difficulty of understanding the
proposed rule. The commenter (0021) also referred to EPA\'s using census
data from 2010 and later as a criterion for the conversion of rural to
urban dehydrators as adding complexity.

[Response:]{.underline} We recognize that proposing two options with
different compliance dates for rural sources made the proposed rule more
complicated to evaluate, however, this was the only approach that
allowed us to provide the same compliance period for sources regulated
under the two options (i.e., three years). We believe that it is
necessary to use the most current data from the Bureau of Census since
it recognizes where people are located. We plan to use notice and
comment rulemaking through the *Federal Register* to amend the rule's
applicability criteria to reflect the latest decennial Census data.

# *Lag Time between Proposals* {#lag-time-between-proposals .Level-1}

[Comment:]{.underline} Commenter 0031 asked why there has been such a
long lag time between the original 1998 proposal and the 2005 proposal.
Has EPA evaluated current data and information that justifies the need
for additional requirements on upstream oil and gas production TEG
units?

[Response:]{.underline} As stated in the July 8, 2005, preamble (70 FR
39443), the basis for regulating area source oil and natural gas
production facilities shifted from the 1998 proposed rule\'s area source
finding (a proposed finding of adverse human health effects from benzene
emissions from TEG dehydration units) to the 2005 proposed rule which
fulfills a portion of our obligation under section 112(c)(3) to regulate
stationary sources of benzene that are area sources. We deferred final
action on the 1998 proposed rule pending issuance on the Urban Air
Toxics Strategy (UATS). Although the UATS was finalized in July 1999 (64
FR 38706), we set our future plans based on court-ordered deadlines. The
court ordered deadline for regulating area source oil and gas production
facilities is December 2006**.**

# *Request for Comment Extension* {#request-for-comment-extension .Level-1}

#  [Comment:]{.underline} Three commenters (0019, 0020, 0031) requested an extension to the public comment period. Two commenters (0019, 0020) requested a 30-day extension in order to thoroughly evaluate the notice and provide helpful comments to EPA. The third commenter requested a 60-day extension so that smaller oil and gas operators could evaluate the impacts of the proposed rule on their oil and gas sites. {#comment-three-commenters-0019-0020-0031-requested-an-extension-to-the-public-comment-period.-two-commenters-0019-0020-requested-a-30-day-extension-in-order-to-thoroughly-evaluate-the-notice-and-provide-helpful-comments-to-epa.-the-third-commenter-requested-a-60-day-extension-so-that-smaller-oil-and-gas-operators-could-evaluate-the-impacts-of-the-proposed-rule-on-their-oil-and-gas-sites. .Level-1}

#  [Response:]{.underline} We denied requests to extend the public comment period. Given that we are beyond the statutory deadline for promulgating the area source NESHAP and because this is a supplement to the February 6, 1998, proposed rule, we believe that 60 days was a reasonable public comment period. {#response-we-denied-requests-to-extend-the-public-comment-period.-given-that-we-are-beyond-the-statutory-deadline-for-promulgating-the-area-source-neshap-and-because-this-is-a-supplement-to-the-february-6-1998-proposed-rule-we-believe-that-60-days-was-a-reasonable-public-comment-period. .Level-1}

#  Further, because the proposed rule potentially applied on a national basis, we believe that 60 days was an adequate period of time to determine whether or not a facility has a TEG dehydration unit and whether the unit operates above the 3-MMscf/day and 1-tpy benzene cutoffs and to draft comments. {#further-because-the-proposed-rule-potentially-applied-on-a-national-basis-we-believe-that-60-days-was-an-adequate-period-of-time-to-determine-whether-or-not-a-facility-has-a-teg-dehydration-unit-and-whether-the-unit-operates-above-the-3-mmscfday-and-1-tpy-benzene-cutoffs-and-to-draft-comments. .Level-1}

# Compliance Date {#compliance-date .Level-1}

[Comment:]{.underline} Several commenters (0022, 0023/0024, 0025, 0026,
0030, 0031, 0032/0033, 0034, 0035/0036. 0043) requested that EPA modify
the compliance date. One commenter (0023/0024) suggested that the date
used to differentiate new from existing dehydrators should be July 8,
2005. The commenter (0023/0024) stated that EPA\'s reasoning for using
February 6, 1998 to differentiate between existing and new sources was
that the July 8, 2005 proposed rule is a supplement to the 1998 proposed
rule, which had a new source threshold date of February 6, 1998.
However, when the final rule was published on June 17, 1999, it did not
regulate area sources. Therefore, according to the commenter
(0023/0024), it is unreasonable for dehydrators installed between
February 6, 1998 and July 8, 2005 to be treated as new dehydrators in
the area source rule.

Five commenters (0022, 0026, 0030, 0035/0036, 0043) requested that the
compliance date be adjusted to accommodate the delay between the
original proposal and the supplemental proposal and because of confusion
in the applicability determinations in the proposed rule. The commenters
(0022, 0026, 0030, 0035/0036) argued that the 1998 proposal did not
clearly communicate the proposed geographic scope of the proposed area
source standard. According to the commenters (0022, 0026, 0030,
0035/0036), the definition of Urban-1 was clear, but because the Urban-2
definition was unclear, E&P operators would not be able to adequately
determine whether the standard would apply outside of Urban-1 areas.
Therefore, the commenters (0022, 0026, 0030, 0035/0036) argued that due
to the delay between the two proposals, and the significant confusion in
the applicability of the 1998 proposal, it was unreasonable for EPA to
adopt a schedule for implementing the area source rule since E&P
operators were not provided reasonable notice regarding area source
control requirements outside of Urban-1 areas. The commenters (0022,
0026, 0030, 0035/0036) recommended that EPA grant area sources outside
of Urban-1 counties three years to achieve compliance if their
construction or reconstruction began after the date of the 1998 proposal
(i.e., treat them as existing sources). The commenters (0022, 0026,
0030, 0035/0036) suggested the following revision to proposed paragraphs
(f)(3) through (6) to accommodate that change: [^1]

> \(f\) The owner or operator of an affected major source shall achieve
> compliance with the provisions of this subpart by the dates specified
> in paragraphs (f)(1)and (2) of this section. The owner or operator of
> an affected area source shall achieve compliance with the provisions
> of this subpart by the dates specified in paragraphs (f)(3) through
> (6) of this section.
>
> \(1\) The owner or operator of an affected major source, the
> construction or reconstruction of which commenced before February 6,
> 1998, shall achieve compliance with the applicable provisions of this
> subpart no later than June 17, 2002 except as provided for in §
> 63.6(i).
>
> \* \* \*
>
> \(2\) The owner or operator of an affected major source, the
> construction or reconstruction of which commences on or after February
> 6, 1998, shall achieve compliance with the applicable provisions of
> this subpart immediately upon initial startup or June 17, 1999,
> whichever date is later.
>
> \* \* \*
>
> \(3\) The owner or operator of an affected area source located in an
> urban area, as defined in § 63.761, the construction or reconstruction
> of which commences before February 6, 1998, shall achieve compliance
> with the provisions of this subpart no later than 3 years after the
> date of publication of the final rule in the **Federal Register**
> except as provided for in § 63.6(i).
>
> \(4\) The owner or operator of an affected area source located [an
> area classified \"Urban-1\"]{.underline} in an urban area, as defined
> in § 63.761, the construction or reconstruction of which commences on
> or after February 6, 1998, shall achieve compliance with the
> provisions of this subpart immediately upon initial startup or date of
> publication of the final rule in the **Federal Register**, whichever
> date is later.
>
> \(5\) The owner or operator of an affected area source located in
> ~~rura~~ [an area classified \"Urban-2\" in an urban]{.underline}
> area,[^2] as defined in § 63.761, the construction or reconstruction
> of which commences before July 8, 2005 shall achieve compliance with
> the provisions of this subpart no later than 3 years after the date of
> publication of the final rule in the **Federal Register** except as
> provided for in § 63.6(i).
>
> \(6\) The owner or operator of an affected area source located in ~~a
> rural~~[an area classified \"Urban-2\" in an urban]{.underline}
> area,[^3] as defined in § 63.761, the construction or reconstruction
> of which commences on or after July 8, 2005 shall achieve compliance
> with the provisions of this subpart immediately upon initial startup
> or date of publication of the final rule in the **Federal Register**,
> whichever date is later.

The commenters (0022, 0026, 0030, 0035/0036) further stated that by
adopting a standard that imposes controls where none were anticipated,
EPA would be imposing controls that are more stringent than its proposed
controls. The commenters (0022, 0026, 0030, 0035/0036) stated that they
believe that the CAA authorizes EPA to defer the compliance date for
area sources outside of Urban-1 areas, because the final rule would be
more stringent than the proposed rule. According to the commenters
(0022, 0026, 0030, 0035/0036) 40 CFR §63.6(b)(3) provides EPA the
authority to adjust the implementation schedule.

[Response:]{.underline} We agree with the commenters that the confusion
related to the definition merits a change in how we classify existing
and new sources, which then changes the compliance date for certain
sources. We believe that area sources not located in counties classified
as Urban-1 should be considered existing sources if
constructed/reconstructed before July 8, 2005. Therefore, the final rule
defines existing and new sources as follows:

-   Sources located in counties classified as Urban-1 based on the 1990
    Census and were constructed or reconstructed before February 6, 1998
    are considered *existing* sources.

-   Sources that are not located in a county classified as Urban-1 based
    on the 1990 Census and were constructed or reconstructed before July
    8, 2005 are considered *existing* sources.

-   Sources located in a county classified as Urban-1 based on the 1990
    Census and were constructed on or after February 6, 1998 are
    considered *new* sources.

-   All sources constructed or reconstructed on or after July 8, 2005
    are considered new sources.

In addition, since the final rule requires add-on controls for certain
sources and management practices at others, the compliance period
differs based on the emission reduction requirements for existing
sources \[discussed in more detail in section 2.5 of this document
(Control Requirements)\]. Existing sources installing add-on controls
must achieve compliance no later than three years after the final rule's
effective date in the *Federal Register*. Existing sources implementing
management practices must achieve compliance no later than one year
after the effective date*.*

The commenters' statements regarding 40 CFR 63.6(b)(3) are not relevant
since the July 8, 2005 supplemental notice informed all area sources
that they could be required to install add-on controls, and therefore
the final rule is not more stringent that the proposed rule.

# Applicability {#applicability .Level-1}

# *Applicability to TEG Units Only* {#applicability-to-teg-units-only .Level-1}

[Comment:]{.underline} One commenter (0025) supported EPA\'s conclusion
that the standards should only apply to TEG dehydration units. They
stated that this is the only approach authorized at this time based on
the fact that oil and gas production facilities were listed as an area
source under the Urban Air Toxics Strategy solely because TEG
dehydration units were deemed to be a significant source of benzene, and
benzene is one of the 30 pollutants regulated under this strategy.
Therefore, the commenter (0025) concluded that these TEG dehydration
units are the only units that can be subject to control requirements
under this strategy.

[Response:]{.underline} As stated in the preamble to the supplemental
proposal (70 FR 39443), oil and natural gas production facilities were
listed in the Urban Air Toxics Strategy solely because the TEG
dehydration units located at these facilities contributed approximately
47 percent of the national urban emissions of benzene from stationary
sources at area sources. We continue to believe that it is appropriate
to define the affected source as each TEG dehydration unit located at
oil and natural gas production facilities and we have not changed the
definition of affected source in the final rule.

# *Transmission of Oil and Natural Gas* {#transmission-of-oil-and-natural-gas .Level-1}

#  [Comment:]{.underline} Commenters (0032/0033, 0034) seek confirmation of the applicability of these rules to only production units, not transmission of oil and natural gas. The table on page 39442 refers to units with NAICS Codes 211111 and 211112, but also directs one to the Subpart HH applicability criteria. The commenters requested a clear exclusion of transmission facilities so that no mistakes will be made by regulated entities. {#comment-commenters-00320033-0034-seek-confirmation-of-the-applicability-of-these-rules-to-only-production-units-not-transmission-of-oil-and-natural-gas.-the-table-on-page-39442-refers-to-units-with-naics-codes-211111-and-211112-but-also-directs-one-to-the-subpart-hh-applicability-criteria.-the-commenters-requested-a-clear-exclusion-of-transmission-facilities-so-that-no-mistakes-will-be-made-by-regulated-entities. .Level-1}

#  [Response:]{.underline} The commenters concerns about the applicability of subpart HH to transmission and storage units are not clear. The NAICS Code for natural gas transmission and storage facilities is 486210. Both the NAICS Codes listed in the table on page 39442 of the preamble to the supplemental proposed rule (NAICS Codes 211111 and 211112) and subpart HH refer to oil and natural gas production facilities. {#response-the-commenters-concerns-about-the-applicability-of-subpart-hh-to-transmission-and-storage-units-are-not-clear.-the-naics-code-for-natural-gas-transmission-and-storage-facilities-is-486210.-both-the-naics-codes-listed-in-the-table-on-page-39442-of-the-preamble-to-the-supplemental-proposed-rule-naics-codes-211111-and-211112-and-subpart-hh-refer-to-oil-and-natural-gas-production-facilities. .Level-1}

#  Further, we do not believe that a specific exclusion for natural gas transmission and storage facilities is necessary. As we discussed in our response to a similar comment on the 1998 proposed rule,[^4] we believe that the definitions in subparts HH (§63.761) and HHH (§63.1271) delineate the boundaries of the oil and natural gas production and natural gas transmission and storage source categories. The key points in this delineation are (1) the point of custody transfer, which is a commonly understood definition within industry, and (2) the natural gas processing plant, which is a clearly defined facility within the production source category. Applicability to the area source rule for oil and natural gas production facilities is specified in §63.760(a), which states that \"facilities that process, upgrade, or store natural gas prior to the point at which natural gas enters the natural gas transmission and storage source category or is delivered to a final end user\" are subject to subpart HH \[§63.760(a)(3)\]. Section 63.760(a)(3) further specifies that \"for the purposes of \[subpart HH\], natural gas enters the natural gas transmission and storage source category after the natural gas processing plant, when present. If no natural gas processing plant is present, natural gas enters the natural gas transmission and storage source category after the point of custody transfer.\" Therefore, based on this applicability criterion, no specific exemptions for natural gas transmission and storage facilities have been added to subpart HH.  {#further-we-do-not-believe-that-a-specific-exclusion-for-natural-gas-transmission-and-storage-facilities-is-necessary.-as-we-discussed-in-our-response-to-a-similar-comment-on-the-1998-proposed-rule-we-believe-that-the-definitions-in-subparts-hh-63.761-and-hhh-63.1271-delineate-the-boundaries-of-the-oil-and-natural-gas-production-and-natural-gas-transmission-and-storage-source-categories.-the-key-points-in-this-delineation-are-1-the-point-of-custody-transfer-which-is-a-commonly-understood-definition-within-industry-and-2-the-natural-gas-processing-plant-which-is-a-clearly-defined-facility-within-the-production-source-category.-applicability-to-the-area-source-rule-for-oil-and-natural-gas-production-facilities-is-specified-in-63.760a-which-states-that-facilities-that-process-upgrade-or-store-natural-gas-prior-to-the-point-at-which-natural-gas-enters-the-natural-gas-transmission-and-storage-source-category-or-is-delivered-to-a-final-end-user-are-subject-to-subpart-hh-63.760a3.-section-63.760a3-further-specifies-that-for-the-purposes-of-subpart-hh-natural-gas-enters-the-natural-gas-transmission-and-storage-source-category-after-the-natural-gas-processing-plant-when-present.-if-no-natural-gas-processing-plant-is-present-natural-gas-enters-the-natural-gas-transmission-and-storage-source-category-after-the-point-of-custody-transfer.-therefore-based-on-this-applicability-criterion-no-specific-exemptions-for-natural-gas-transmission-and-storage-facilities-have-been-added-to-subpart-hh. .Level-1}

# *Outer Continental Shelf* {#outer-continental-shelf .Level-1}

[Comment:]{.underline} Commenters (0022, 0026, 0030, 0035/0036) said EPA
should confirm that the area source proposal is not intended to apply to
Outer Continental Shelf (OCS) facilities. Commenters disagreed with
EPA\'s statement in the proposal that these sources should be excluded
solely because they are assumed to already have controls. Instead, EPA
should also recognize that the authority for controlling emissions from
facilities in the OCS in the central and western Gulf of Mexico is
specifically reserved to the Secretary of the Interior and that in areas
where EPA does have authority over OCS sources, it only extends to
emissions of criteria pollutants, not HAP. Excluding OCS sources from
area source controls conforms to these precedents.

[Response:]{.underline} This area source rule applies to OCS facilities.
As we stated in our response to comments received on OCS for the major
source rule, section 328 of the CAA provides us the authority to
regulate OCS sources to attain and maintain Federal and state ambient
air quality standards and to comply with the provisions of the CAA title
I, part C. [^5] EPA's implementing regulation at 40 CFR § 55.13(e)
specifies that "provisions promulgated pursuant to section 112 of the
Act shall apply \[to OCS sources\] if rationally related to the
attainment and maintenance of federal or state ambient air quality
standards \...." This area source rule regulates benzene, a volatile
organic compound (VOC). VOCs react with nitrogen oxides to form ozone,
one of the criteria pollutants for which EPA is required to set national
air ambient air quality standards. Accordingly, this rule applies to OCS
sources because its regulation of benzene is rationally related to the
\"attainment and maintenance\" of ambient air quality standards for
ozone.

Our statement that none of the sources on the OCS are uncontrolled area
sources that would be impacted by the final rule was in reference to the
assumptions that were made to estimate impacts and was not intended to
imply that this area source rule does not apply to OCS sources. The
commenters did not provide additional data contradicting our assumption
that offshore platforms located on the OCS are generally controlled by a
flare for safety purposes. Therefore, our assumption and impact analysis
remain unchanged.

# *Geographic Applicability Criteria* {#geographic-applicability-criteria .Level-1}

[Comment:]{.underline} EPA proposed two options for the geographic
applicability criteria: (1) all TEG dehydration units would be subject
to area source standards (referred to throughout this document as
Option 1) ; and (2) area source standards would apply to TEG dehydration
units located in Urban-1 and Urban-2 counties (referred to throughout
the remainder of this document as Option 2). EPA specifically requested
comments on Options 1 and 2. Fourteen commenters (0021, 0022, 0023/0024,
0025, 0026, 0027, 0028, 0029, 0030, 0031, 0032/0033, 0034, 0035/0036,
0043) responded to EPA\'s request for comments.

One commenter (0028) supported Option 1. In support of Option 1, the
commenter (0028) stated that rules should not be different for
facilities located in urban counties than those for facilities located
in rural counties. According to the commenter, who works with small
businesses, a common theme was that small businesses want a level
playing field. The commenter (0028) further stated that it puts
additional burden on environmental inspectors if different rules are
applicable in different counties.

Twelve commenters (0022, 0023/0024, 0025, 0026, 0027, 0029, 0030, 0031,
0032/0033, 0034, 0035/0036, 0043) were opposed to Option 1. The
commenters were opposed to EPA\'s imposing control requirements on area
sources in rural areas for two primary reasons: (1) EPA did not have the
authority to regulate rural sources and (2)  low exposure risks from
rural or remote sources. Several of the commenters (0023/0024, 0026,
0029, 0030, 0032/0033, 0034, 0035/0036, 0043) supported Option 2, with
changes to the definition of urban areas (see section 2.3.5 for specific
comments regarding the definition of urban areas).

Several commenters (0022, 0025, 0026, 0029, 0030, 0031, 0032/0033, 0034,
0035/0036, 0043) stated that EPA did not have the authority under the
Clean Air Act (CAA) to regulate area sources in rural areas. One
commenter (0043) stated that Option 2 better meets the intent of the
area source rules. Two commenters (0032/0033, 0034) stated that
nationwide applicability is contrary to the plain language of the CAA
which intends for the area source to address HAP in urban areas. Six
commenters (0022, 0026, 0029, 0030, 0031, 0035/0036) agreed that the
purpose of the area source program was to reduce \"\...ambient
concentrations \[of HAP\] characteristic of large urban areas to levels
substantially below those currently experienced.\"

Several commenters (0022, 0023/0024, 0026, 0029, 0030, 0035/0036),
specifically referred to section 112(k) of the CAA which, according to
the commenters, makes it apparent that the concern to be addressed was
unique to urban areas. One commenter (0023/0024) stated that regulating
rural dehydrators provides limited health benefit since populations in
these areas are sparse. According to the commenter (0023/0024), the
impact of benzene emissions beyond facility fencelines would be minimal
since the number of other sources of benzene emissions are few. In
addition, the commenter stated that many States have air toxics
regulations which limit the emissions of HAP based on impact on the
health of populations beyond the fenceline. Three commenters (0022,
0023/0024, 0029) further stated that it is clear that the remote, small,
or sparsely populated rural areas which characterize the majority of the
dehydrators potentially subject to the rural area applicability option
are not within the scope of section 112(k)(1). One commenter (0025)
referred to EPA\'s decision to regulate area sources based on the fact
that the oil and natural gas production source category was listed in
the Urban Air Toxics Strategy, which focuses on urban air toxics
emissions as directed by section 112(k)(3)(A) and that nothing in the
CAA authorizes extending the Urban Air Toxics program to rural areas.
The commenter further stated that even if section 112(k)(3) did allow
regulation of area sources in rural counties, EPA has not made the
necessary findings to justify extending the proposed rule to rural
locations.

Several commenters (0022, 0025, 0026, 0029, 0030, 0031, 0035/0036, 0043)
referred to exposure risks from facilities located in rural or remote
areas. One commenter (0031) stated that exposure risks in remote areas
are low or nonexistent. Two commenters (0032/0033 and 0034) stated that
there is no clear indication that emissions from remote sources provide
a meaningful contribution to ambient air toxic levels in urban areas.
One commenter (0029) stressed that the foundation for the area source
program was based on regulating area sources in a manner that would
result in a public health benefit. The commenter stated that regulating
dehydration units in rural areas would not yield the same public health
benefits that were \"contemplated\" by the statute.

Five commenters (0022, 0026, 0030, 0034, 0035/0036) stated that
regulating rural sources would not have the effect intended by the CAA.
The commenters (0022, 0026, 0030, 0034, 0035/0036) cited section 112(c)
of the CAA, where Congress directed EPA to list for controls \"\...area
source categories representing 90 percent of the area source emissions
of the 30 hazardous air pollutants that present the greatest threat to
public health in the largest number of urban areas.\" According to the
commenters, the focus of the area source program is those smaller
sources of HAP that create unacceptable exposures in concentrated urban
areas. According to one commenter (0034), the purpose of regulating area
sources under section 112 of the CAA was to specifically reduce health
risks to the environment and people in urban areas (i.e., considered to
be densely populated). Four commenters (0022, 0026, 0030, 0035/0036)
stated that most of EPA\'s estimated 38,000 dehydrators in the E&P
sector are in remote, rural locations and do not present the risk of
exposure that the area source controls are meant to address.

Two commenters (0031, 0043) stated that regulating area sources under
Option 1 was unnecessarily costly and burdensome on sites located in
these remote areas and had little or no effect on human health.

[Response:]{.underline} We believe that the CAA provides the Agency with
the authority to regulate area sources nationwide. CAA section 112(k)(1)
states that "It is the purpose of this subsection to achieve a
substantial reduction in emissions of hazardous air pollutants from area
sources and an equivalent reduction in the public health risks
associated with such sources including a reduction of not less than 75
per centum in the incidence of cancer attributable to emissions from
such sources." Consistent with this expressed purpose of CAA section
112(k) to reduce [both]{.underline} emissions and risks, CAA section
112(k)(3)(i) requires that we list not less than 30 HAP that, as a
result of emissions from area sources, present the greatest threat to
public health in the largest number of urban areas. CAA sections
112(c)(3) and (k)(3)(ii) require that we list area source categories
that represent not less than 90 percent of the area source emissions of
each of the listed HAP. CAA section 112(c) requires that we issue
standards for listed categories under CAA section 112(d). These relevant
statutory provisions authorize us to regulate listed area source
categories and not just sources located in urban areas.

In both the UATS and our July 8, 2005 supplemental proposal, we
identified the reasons supporting a national rule (e.g., benzene's
toxicity and carcinogenicity, a level playing field, the 75 percent
cancer incidence reduction goal) (64 FR 38724 and 70 FR 39446).
Furthermore, by requiring management practices rather than control
requirements on sources outside the UA plus offset and UC boundary, we
believe that we have appropriately addressed commenters' concern with
respect to remote sources being subject to unnecessary or costly
requirements.

[Comment:]{.underline} Several commenters (0022, 0026, 0030, 0035/0036)
stated that extending area source controls to those remote, rural
sources far exceeds the Congressional mandate to control potential
threats to public health in urban areas from diverse sources of HAP
emissions that do not qualify as major sources, as expressed in sections
112(c), 112(k), and 112(n)(4)(B) of the CAA (42 U.S.C. §§7412(c),
7412(k), and 7412(n)(4)(B)). The commenters further stated that Congress
clearly recognized that rural E&P operations presented a low risk of
public exposure to HAP. In support of their argument, the commenters
pointed to section 112(n)(4)(A) and (B), where the commenters stated
that Congress provided express direction to EPA on the treatment of E&P
operations. According to the commenters, based on these sections in the
CAA, it was clear that Congress recognized that the remote, rural nature
of most E&P operations presented a decreased risk of public exposure to
HAP emissions. The commenters stated that it prohibited the aggregation
of emissions from similar equipment in a contiguous area, and it limited
the listing of E&P area sources outside of truly urban areas.

[Response:]{.underline} As stated in a previous response, we believe
that sections 112(c) and 112(k) do not prohibit us from issuing area
source rules of national applicability. We also disagree with the
commenters\' statement that sections 112(n)(4)(A) and (B) of the CAA
limits the listing of E&P area sources outside truly urban areas. First,
section 112(n)(4)(A) does not address area sources. Secondly, section
112(n)(4)(B) states that we \"\...shall not list oil and gas production
wells (with its associated equipment) as an area source
category\...except that (we) may establish an area source category for
oil and gas production wells located in any metropolitan statistical
area or consolidated metropolitan statistical area with a population in
excess of 1 million\....\" In the February 1998 proposal preamble, we
addressed the definition of \"associated equipment\" and determined that
glycol dehydration units and storage vessels with flash emissions are
not associated equipment (63 FR 6300). Therefore, section 112(n)(4)(B)
does not apply to TEG dehydration units at oil and natural gas
production facilities.

[Comment:]{.underline} Several commenters (0022, 0026, 0030, 0035/0036)
stated that EPA did not suggest in the 1998 proposal (63 FR 6300, 6306,
and 6309) that it was considering imposing area source controls on rural
TEG dehydrators.

[Response:]{.underline} The commenter is correct that we did not
indicate in the 1998 proposal that we were considering imposing area
source controls on rural TEG dehydrators. It is for this reason (among
others) that we published the July 2005 supplemental proposed rule and
accepted comments on Option 1.

[Comment:]{.underline} One commenter (0021) stated that they felt that
Option 1 (i.e., regulating all TEG dehydration units) is more favorable
to operators. Regarding Option 2, the commenter stated that it presented
a technically correct method of dealing with rural areas as they mature
into urban areas with time, but that it imposes more severe time
constraints. According to the commenter (0021), Option 2 mandates:

1.  \"pre 6 February 1998\" rural area sources comply with 40 CFR
    subpart HH within three years of the publication of the rule;

2.  \"pre 6 February 1998\" area sources which later become rural as the
    result of census update comply with subpart HH within three years of
    publication of the census update; and

3.  \"post 5 February 1998\" rural area sources comply with subpart HH
    upon publication of the rule.

The commenter stated that this would result in many \"post 5 February
1998\" facilities being forced to \"shut in\" while locating and
installing controls.

[Response:]{.underline} The compliance schedule for new sources is
dictated by the statute (i.e., section 112(i) of the CAA). While new
sources must comply with the final rule on the date of publication of
the final rule or upon startup (whichever is later), the final rule
specifies that sources not located in Urban-1 counties are only
considered new sources if they were constructed on or after July 8,
2005. Therefore, fewer sources constructed after February 1998 are
considered new sources in the final rule.

[Comment:]{.underline} One commenter (0025) pointed out that the
proposal did not include an evaluation of the hazards TEG units pose in
rural areas, and, according to the commenter, by definition rural areas
involve much lower exposure risks than urban areas. The commenter noted
that in the 1998 proposal, EPA was careful to quantify the cancer risks
that it believed were posed by area source TEG units (63 FR 6288, 6299)
but EPA did not update these figures in the July 2005 proposal, instead
relying on \"general\" statements to justify extending the rule to rural
areas (70 FR 39446). According to the commenter (0025), EPA\'s general
statements did not provide an adequate legal basis for extending control
requirements to rural areas.

[Response:]{.underline} As stated in the July 8, 2005, preamble to the
supplemental proposal (70 FR 39443), the February 6, 1998 proposed area
source rule was based on a proposed finding of adverse human health
effects from TEG dehydration units at area source oil and natural gas
production facilities. The basis for the July 2005 supplemental proposal
and the final rule is to fulfill a portion of our obligation under
sections 112(c)(3) and 112(k)(3)(B) to regulate area source categories
accounting for 90 per centum or more of emissions of 30 identified HAP
that present the greatest threat to public health in the largest number
of urban areas ("area source HAP"). Accordingly, listing of area source
categories under these provisions was based on the categories'
contributions to area source HAP emissions and not on a risk finding.
TEG dehydration units at oil and gas production facilities were listed
because they contributed significantly to emission of benzene, one of
the 30 area source HAP.

# *Urban Definition* {#urban-definition .Level-1}

[Comment:]{.underline} Several commenters (0022, 0024, 0026, 0027, 0029,
0030, 0031, 0032/0033, 0034, 0035/0056) opposed EPA\'s definition of
\"urban areas.\" According to the commenters (0022, 0024, 0026, 0029,
0030, 0031, 0032/0033, 0034, 0035/0056), by defining urban area as
county-wide areas, EPA has expanded urban areas to include large
expanses of rural territories. One commenter (0034) stated that a
comparison of land area to population on a county basis shows that the
target population for protection is very thinly distributed. Four
commenters (0022, 0026, 0030, 0035/0056) referred to maps (included in
comment 0036 as Exhibit A). The commenters noted that the maps show vast
areas of the United States that would be classified as urban areas based
on the proposed definition, but have very low population. The commenters
specifically referred to the State of Wyoming, in which half of the
State is classified as \"urban\" using EPA\'s proposed definition. One
commenter (0026) also pointed out that in Utah, six of the twelve
counties designated as \"urban\" using EPA\'s definition have a
population density of less than ten persons per square mile.

Other commenters (0032/0033, 0034) stated that some counties with a
total population of less than 5,000 and an average population density of
less than 2 people per square mile would be classified as urban under
the Urban-2 designation. In order to illustrate the broad geographical
applicability that includes remote locations, the commenters stated that
based on the Urban-2 definition, urban designations would be applied to:

-   14 of 23 counties in Wyoming;

-   20 of 33 counties in New Mexico;

-   10 or 17 counties in Nevada; and

-   17 of 56 counties in Montana.

One commenter (0031) stated that EPA\'s proposed definition of urban
areas would be unnecessarily costly and burdensome on sites located in
rural or remote areas but classified as urban.

Three commenters (0031, 0032/0033, 0034) maintained that EPA does not
have the authority under section 112(k) to regulate area sources in
non-urban, rural areas. One commenter (0031) stated that regulating
these sources is outside the scope of the law. Two commenters
(0032/0033, 0034) stated that by classifying many geographical areas as
urban areas is beyond a reasonable interpretation of the intent of
section 112(k) of the CAA. The commenters argued that the intent of
section 112(k) was to regulate \"urban\" or \"large urban areas\" and
that a number of areas that are included are not \"urban\" or \"large
urban areas.\" The commenters stated that it is apparent that the intent
of the CAA and the Urban Strategy is to affect change in urban areas and
EPA should identify the rationale for including remote areas in the
standard.

One commenter (0022) acknowledged that there have been and will continue
to be instances of energy production and population encroachment.
However, according to the commenter, most of the known conventional or
unconventional gas supply basins are likely to remain rural for the
foreseeable future.

[Response:]{.underline} The statute does not define urban, thus, leaving
us the discretion to define the term. We proposed and took comments on
our definition of the term urban as part of our 1999 UATS. The
definition was the basis for the listing of area source categories
pursuant to section 112(c)(3) and (k)(3)(B)(ii) of the CAA. We are
currently under court-ordered deadlines to complete issuing standards
for all listed area source categories. Changing the definition of urban
would mean recreating an area source category list, which may differ
significantly from the current list and, thus, greatly hinders our
effort to complete our obligation by the court-ordered deadlines.
Therefore, we believe that revisiting the definition of urban is
inappropriate at this time. However, we have tailored this rule to
address the unique circumstances associated with this source category,
as described above. Moreover, in response to comments regarding the
nature of remote sources, we modified this final rule and are only
requiring the add-on control requirement for sources in areas of higher
population densities, which we have identified as areas within the UA
plus offset and UC boundaries. This rule imposes the less costly
management practice requirements on sources outside the UA plus offset
and UC boundaries.

[Comment]{.underline}: Several commenters (0022, 0024, 0026, 0027, 0029,
0030, 0032/0033, 0034, 0035/0056) recommended that EPA redefine \"urban
areas.\" Two commenters (0029, 0034) suggested that the definition of
urban area should at most be limited to Urban-1 counties based on the
2000 census. According to one of the commenters (0034), emission
reductions would not have the effect intended by and directed through
the CAA, but would instead be reductions in open countryside where few,
if any, will have a benefit.

Two commenters (0032/0033, 0034) stated that EPA should not be compelled
to use the Census Bureau-based definition of urban areas and that other
viable options are available. The commenters (0032/0033, 0034) stated
that alternative definitions are available from other agencies and from
recent Federal Register releases. The commenters (0032/0033, 0034)
stated that they believe that EPA should revise the definition such that
it does not include remote or sparsely populated regions. According to
the commenters (0032/0033, 0034), several notices have been published in
the Federal Register related to defining \"urban\" versus \"rural\" and
Metropolitan Statistical Area (MSA). As an example, the commenters
(0032/0033, 0034) referred to one notice which indicates that there are
at least six definitions of \"urban\" in use within federal agencies (65
FR 82229). The commenters (0032/0033, 0034) recommended that EPA define
an alternative option for geographic applicability that does not use the
Urban-2 definition and considers 2000 census information. For example,
the commenters referred to \"Urban Area Criteria for Census 2000\" (67
FR 11663) which includes the following definition:

> \"For Census 2000, a UA \[urbanized area\] consists of contiguous,
> densely settled census block groups (BGs) and census blocks that meet
> minimum population density requirements, along with adjacent densely
> settled census blocks that together encompass a population of at least
> 50,000 people.\"

The commenters also referred to the Census Bureau\'s online glossary
definition of \"urbanized area:\"

> \"An area consisting of a central place(s) and adjacent territory with
> a general population density of at least 1,000 people per square mile
> of land area that together have a minimum residential population of at
> least 50,000 people. The Census Bureau uses published criteria to
> determine the qualification and boundaries of UAs.\"

According to the commenters, the Census Bureau published a list of 453
urbanized areas in the U.S. (based on the 2000 census) with populations
over 50,000, which comprise about 70 percent of the total U.S.
population (67 FR 21962). The commenters stated that the areas and
population covered using this definition appear more than adequate to
address the intent of section 112(k) of the CAA (i.e., to reduce ambient
levels of air toxics for urban areas and populations).

The two commenters (0032/0033, 0034) also referenced the definition of
\"urban cluster,\" a densely settled territory that has at least 2,500
people but fewer than 50,000, which delineates urban and rural areas by
census blocks. The commenters noted that census blocks are much smaller
than counties and provide a more precise urban-rural partitioning than
counties. According to the commenters (0032/0033, 0034), using this
definition would add to the urban category over 3,000 additional areas
and about an additional 10 percent of the U.S. population. The
commenters (0032/0033, 0034) also stated that including the \"urban
cluster\" definition could add complexity and extend beyond highly
populated, larger urban areas. The commenters (0032/0033, 0034) did
state that including Core Based Areas, Urban Clusters, and Micropolitan
Areas (which are detailed in the Census Bureau releases) did not seem
necessary to address the intent of the area source program.

Five commenters (0022, 0024, 0026, 0030, 0035/0056) provided an
alternative definition for urban areas which includes Census-defined MSA
and \"urbanized areas,\" as follows:

> *Urban area* for the purposes of the area source determination is
> defined by use of the U.S. Department of Commerce\'s Bureau of Census
> statistical data to classify all land area in the U.S. into one of
> three classifications as follows:

(1) Urban-1 areas, which consist of metropolitan statistical areas (MSA)
    with a population greater than 250,000.

(2) Urban-2 areas, which are defined as all other areas designated as
    \"urbanized\" by the Bureau of Census (areas which comprise one or
    more central places and the adjacent densely settled surrounding
    fringe that together have a minimum of 50,000 persons. The urban
    fringe consists of contiguous territory having a density of at least
    1,000 persons per square mile); or

(3) Rural areas, which are all areas that are not designated as Urban-1
    or Urban-2.

The five commenters (0022, 0024, 0026, 0030, 0035/0056) claimed that by
revising the definition, EPA would create a more appropriate focus for
applying the regulation. According to the commenters, their definition
more closely approximates the target cited in the Integrated Urban
Strategy, which was urban areas with \"populations of more than
50,000.\"[^6] The commenters further argued that their recommended
definition would more clearly implement the purpose of the area source
program, to address HAP exposure in urban areas.

Two commenters (0032/0033, 0034) supported the use of the \"urbanized
area\" definition as providing an appropriate basis to identify areas
that should be regulated under the proposed standards and is consistent
with the intent of the CAA. At a minimum, the commenters (0032/0033,
0034) stated that EPA should evaluate the range of alternatives that are
available from other Federal agencies (e.g., urbanized area, urban
cluster) to redefine the urban area definition.

One commenter (0027) suggested that EPA redefine urban area or consider
other mechanisms for determining appropriate population densities based
on the risks presented. For example, the commenter suggested a mechanism
analogous to the U.S. Department of Transportation\'s use of the
Potential Impact Circle concept when regulating high pressure natural
gas transmission lines for purposes of pipeline safety.

Several commenters (0022, 0026, 0030, 0035/0056) also pointed out that
EPA noted in the Integrated Urban Strategy states that \"the
determination of the area in which standards apply should be made
separately for each source category.\" According to the commenters, EPA
does not need to impose uniform definitions of urban areas for all area
sources.

[Response:]{.underline} As previously stated, our long-standing
definition of "urban" is the product of public notice and comment and
the foundation of the Agency's area source program. Because the
definition applies to all listed area source categories, we do not
believe that it is appropriate to change the definition within any
specific area source rule. However, we would find ways to address any
specific concern with the application of the definition when warranted.
In this case, because TEG dehydration units are more likely located in
remote areas, we have differentiated between TEG dehydration units
located in densely populated areas (i.e., those located within the UA
plus offset and UC boundary) and those located outside those areas.

[Comment:]{.underline} One commenter (0028) said that the definition of
urban area should be based on the most recent census data. As the census
data are updated and sources change from a rural to an urban
classification, those sources should be considered existing sources. To
classify them as new would be confusing to small businesses.

[Response:]{.underline} Under the final rule, the definitions of UA and
UC are based on the most recent data from the Bureau of Census, which
currently are the 2000 Census data. When census data are updated, we
will propose to amend this rule to reflect the new data if necessary.

# Exemptions {#exemptions .Level-1}

# *Define Low-Risk Subcategory* {#define-low-risk-subcategory .Level-1}

[Comment:]{.underline} Several commenters (0023/0024, 0032/0033, 0034)
asked that EPA consider creating a source category that can be exempted
from the regulations if the facilities can demonstrate insignificant
health risk. The commenters (0023/0024, 0032/0033, 0034, 0043) cited
such \"low-risk\" subcategories in other MACT rules such as the Plywood
and Composite Wood Products MACT (40 CFR 63, subpart DDDD). They believe
that such an exemption would be especially important if EPA adopts
either of the geographical applicability options in the proposed rule.
Two commenters (0032/0033) indicated that an appendix is also needed for
the proposed rule that identifies the methodology and criteria for
demonstrating that an affected source is part of the low-risk
subcategory -- analogous to Appendix B for subpart DDDD. One of the
commenters (0034) suggested that these provisions include a simple
look-up chart of criteria for exclusion based on risk.

[Response:]{.underline} We interpret the commenters\' primarily concerns
to be the regulation of TEG dehydration units in truly remote locations
due to the broad applicability that a county-based approach and a
national approach would require. We believe that we have addressed the
commenters\' concerns by requiring use of control devices only on
sources located within UA plus offset and UC boundaries and management
practices (i.e., optimized glycol circulation rate) for sources located
outside of UA plus offset and UC boundaries.

# *Distance Exemption* {#distance-exemption .Level-1}

[Comment:]{.underline} Commenters (0032/0033, 0034) said if the U-1/U-2
approach is retained, provisions should be added that allow an affected
unit to be excluded based, for example, upon the filing of a
certification and map showing that the unit is not located within any
municipality boundaries or incorporated area, and is geographically
distant from occupied residences; or based upon the approaches suggested
by INGAA and used in other EPA rules, which take low risk into account
based upon a simple look-up chart of criteria for exclusion. Such
approaches will allow sources in rural areas which are not contributing
to any problem to be excluded easily without the need for site-specific
demonstrations or modeling or the use of expensive consulting services.

One commenter (0043) suggested a risk-based approach that looks at
emissions and the distance to the nearest receptor. They supported this
position by stating that the area source rules are meant to protect
human health, therefore controlling offsite impacts where human health
could actually be affected is the most sensible option.

Several commenters (0022, 0026, 0030, 0035/0036) requested that EPA
consider (and adopt) a risk-distance calculation to impose controls only
on those area sources that could be seen to present an unacceptable risk
of exposure to nearby receptors. Specifically, these commenters
suggested that, instead of applying area source controls nationwide or
in rural areas of counties that contain isolated urbanized areas, EPA
adopt a risk-distance approach calculation outlined in API publication,
API 4644, \"A Methodology for Estimating Incremental Benzene Exposures
and Risks Associated with Glycol Dehydrators.\" A copy of this
publication was provided (0036).

The commenters (0022, 0026, 0030, 0035/0036) pointed out that there is a
history of discussions between the industry and EPA on this approach.
Commenters recommended that EPA adopt this screening method, which uses
the PC-based \"SimRisk\" model, during discussions surrounding the 1998
proposal, and EPA raised objections to using this method due to its
complexity. The commenters indicated a willingness to address the
perceived problem and to make implementation of this risk-distance
method more user-friendly. The commenters also pointed out that EPA also
objected in 1998 to the risk-distance calculation because the method
focused solely on protection of the most exposed individual rather than
the general population. The commenters said that this objection
contradicts EPA\'s own risk analyses, which generally use risk to the
most exposed individual as a key measure in risk assessment.

Further, the commenters cited various examples of other regulations and
programs where similar approaches are utilized. These include the NESHAP
for Industrial, Commercial, and Institutional Boilers and Process
Heaters, the NESHAP for Plywood and Composite Wood Products, the
California Air Toxic Hot Spots program, and the California Air Resources
Board land-use handbook.

[Response:]{.underline} As we stated in the previous response, we do not
believe that we have authority to exempt from regulation sources that
have been identified as necessary to reach the statutory 90% target.
However, we believe that we have addressed the commenters' concern by
requiring control devices on sources in densely populated areas.

# *Size Cutoffs* {#size-cutoffs .Level-1}

[Comment:]{.underline} Four commenters (0025, 0026, 0028, 0034)
supported the proposed provisions that exempt sources with gas
throughputs less than 85,000 standard cubic meters per day (3 million
cubic feet per day) or actual average emissions of benzene from the TEG
dehydration unit process vent to the atmosphere less than 0.9 Mg/yr
(1 ton/year). One of the commenters (0028) indicated that they think it
is a good idea to base applicability on flow rate, as it is easy to
measure and is already done for sales purpose. They assumed that the 3
million cubic feet per day gas flow rate was equivalent to the 1
ton/year benzene emissions level, and pointed out that stack testing to
determine the emissions rate would be much more expensive than flow rate
measurement. One of the commenters (0025) stated their belief than any
lower cutoff threshold would not be authorized by law, based on the fact
the Agency has not demonstrated either that controls exist for these
types of sources or that any such controls would be cost-effective.

[Response:]{.underline} We appreciate the commenters\' support regarding
the Agency's decision not to impose control equipment requirements on
sources with flow rate or benzene emissions below the cutoffs. The
commenter is incorrect in assuming that the 3-MMscf/day cutoff is
equivalent to the 1-tpy benzene emissions cutoff. These cutoffs are the
points below which we have not found control equipment being used and
have also determined that it would not be cost effective to control. It
should be noted that sources may determine emissions using the
GLYCalc^TM^ program in lieu of emissions testing.

[Comment:]{.underline} While they supported the concept, one commenter
(0027) stated their belief that the 3 million cubic feet per day gas
throughput exemption level was too low. They wrote that, because of the
typical upstream aggregation of streams in the Appalachian Basin, these
levels will make many marginal streams subject. As evidence, they cited
that the average production for an Ohio well is only 5 million cubic
feet per day. To guard against making these small aggregated sources
subject to the rule, the commenter (0027) suggested that this exemption
level be changed to 5 million cubic feet per day.

[Response:]{.underline} We evaluated the difference between controlling
only TEG dehydration units with natural gas throughputs greater than 5
MMscf/day and those with throughputs greater than 3 MMscf/day. We
determined that the cost effectiveness associated with the 3 MMscf/day
option (\$2,400/ton) was reasonable.[^7] Further, the commenter did not
provide us with additional information showing no TEG units below 5
MMscf/day are controlled. Therefore, the final rule retains the
3-MMscf/day throughput exemption.

[Comment:]{.underline} Another commenter (0030) supported the retention
of the proposed exemptions based on facility-level throughput thresholds
in the current rule that exempt facilities with annual average natural
gas throughput of 18,400 standard cubic meters per day (650 cubic feet
per day) or hydrocarbon liquid throughput of 39,700 liters per day
(250 barrels per day). The commenter (0030) stated that this exemption
allows small production facilities that are incremental contributors to
HAP emissions to easily understand whether they need to further assess
their operations to determine whether an associated TEG dehydrator has
an actual annual average flow rate of natural gas exceeding 85,000
standard cubic meters per day or actual average benzene emissions of
more than one ton/yr.

[Response:]{.underline} The intent of the exemption in §63.760(e)(2) was
to provide a cutoff so that very small facilities would not have to
perform an evaluation to determine whether or not they were major
sources. Therefore, section only applies to major sources and we have
clarified this in the final rule. (Note: the exemption in 760(e)(2)
requires that natural gas throughput be below 18,400 standard cubic
meters per day [and]{.underline} 39,700 liters per day, rather than
[or]{.underline} as stated by the commenter.

# *Decline Rates* {#decline-rates .Level-1}

[Comment:]{.underline} Commenters (0022, 0026, 0030, 0031, 0035/0036,
0043) said EPA should allow the facility operator to establish a true
measure of emissions for area sources prior to installation of controls.
Such a provision would recognize that production in oil and gas
operations typically declines significantly over a short period of time
after initial startup. Some commenters (0031, 0043) said that for
dehydrators with a design capacity of 10 MMscf/day or less that the
operator should be allowed 1 year to establish actual annual average
flow rates to determine if controls under the area source rule are
required. Commenter 0031 added that the use of actual throughput volumes
is recommended because it is easy to determine. This is a factor at
small independent operators who lack the personnel or expertise to
conduct complex emission calculations.

Commenters (0022, 0026, 0030, 0035/0036) said determining whether a new
source is an affected source should be based on a known decline curve in
a producing field. The commenters noted the NESHAP currently applicable
to major sources in the E&P industry allows facility operators to take
the decline in production into account in determining potential to emit
(PTE) for certain existing facilities. EPA should extend this philosophy
to new wells by allowing PTE and exemption calculations to incorporate
representative historical data from existing wells within the same field
as new wells. Specifically, EPA should add a new subparagraph (iv) to
§63.760(a)(1) to allow an operator placing a new well online to make the
determination using the daily average production rate for the first year
of operation of other representative wells within the same field as the
new well. The rule would incorporate the same conservative multiplier
(1.2) that applies in §63.760(a)(1)(i)(A) to existing wells. To qualify,
the TEG dehydrator would have to be installed within an oil and gas
production field with a demonstrated history of production decline. If
the facility operator can demonstrate, to the satisfaction of the
Administrator, that the TEG dehydrator is reasonably likely to meet the
exemption levels in Subpart HH during the first year of operations
(i.e., annual average flowrate of less than 3 million standard cubic
feet per day (85 thousand cubic meters per day) or actual average
emissions of benzene of less than one ton per year (0.90 megagrams per
year)), based on that demonstrated history of production decline and the
first year production rates of the other representative wells in the
field, the new TEG dehydrator would not be an affected major source or
area source .

[Response:]{.underline} New sources are required under section 112(i) of
the CAA and the General Provisions \[40 CFR 63.6(b)\] to be in
compliance with applicable regulations upon startup or upon the
effective date of the regulation (whichever is later). Therefore, it is
not appropriate to include a provision in the final rule that would
provide new sources an extension of the compliance date. Further, we
believe that new sources have options at their disposal to take the
decline in production into account. For example, since the 3-MMscf/day
cutoff is an annual average, not an instantaneous value, once it becomes
apparent that the dehydration unit\'s throughput could exceed the
3-MMscf/day cutoff, a source has the option to regulate the flow to
either maintain a throughput less than 3 MMscf/day or to install
controls. Thus, the final rule does not contain a provision for
incorporating decline rates.

# *Transition Policy On \"Potential To Emit\"* {#transition-policy-on-potential-to-emit .Level-1}

[Comment:]{.underline} Commenters (0022, 0026, 0030, 0035/0036) asked
EPA to verify the continued effect of the Potential to Emit transition
policy until the completion of the PTE rulemaking process. The
commenters stated that they understand that the provisions of the
transition policy that recognize state-enforceable limits are still in
effect and that EPA personnel have indicated that EPA intends to revive
its pursuit of resolution on this issue. The commenters were
particularly interested in the continuing ability of a source to rely on
a \"practically enforceable, state-enforceable limit\" to restrict PTE.
Commenter 0022 said this is important for the great number of small oil
and gas dehydration units that will clearly be able to demonstrate
actual compliance with the proposed flow rate or annual benzene
emissions cutoff limits by being \"subject to state-enforceable limits
that are enforceable as a practical matter.\"

[Response:]{.underline} The PTE transition policy expired on December
31, 2000, with a six-month extension for air permitting agencies that
demonstrated the need for the extension. However, the state-enforceable
provision of the transition policy, which allows a source to rely on a
practically enforceable, state-enforceable limit to restrict its PTE,
will remain in effect until we have completed rulemaking on the term
"potential to emit."[^8]

# *Documentation to Prove Control Equipment Exemptions* {#documentation-to-prove-control-equipment-exemptions .Level-1}

[Comment:]{.underline} One commenter (0031) said EPA should minimize
documentation for sources to prove they are not subject to the
requirements in the final rule. Emission calculations on all well sites
would be costly and burdensome. Instead, basic data such as actual
annual average flow rate of natural gas should be sufficient
documentation.

[Response:]{.underline} The proposed rule does not require emission
calculations on all well sites. First, only well sites that have a TEG
dehydration unit onsite are subject to the emission reduction
requirements in the area source standard. Second, to qualify for the
exemption, benzene emission calculations are only necessary for TEG
dehydration units with an actual annual throughput greater than or equal
to 3 MMscf/day. Any TEG dehydration unit with an actual annual
throughput less than 3 MMscf/day is exempt from emission reduction
requirements. Therefore, we believe that our documentation requirements
are sufficiently minimized and we have not made any changes to the final
rule in response to this comment.

# Control Requirements {#control-requirements .Level-1}

# *Controls for Remote/Unmanned Sources* {#controls-for-remoteunmanned-sources .Level-1}

[Comment:]{.underline} Commenters (0022, 0023/0024, 0026, 0030,
0032/0033, 0034, 0035/0036) said if EPA imposes controls on TEG
dehydrators outside of Urban-1 areas, it should adopt a separate
(lesser) control standard for those remote area sources for the
following reasons:

-   It is not justified based on health effects

-   Practical considerations prevent operators from achieving the 95%
    control efficiency on remote, unmanned TEG dehydrators.

Commenters (0022, 0026, 0030, 0035/0036) said that in order to meet the
95% control efficiency or the outlet concentration, an operator
generally has to install a system with a forced draft fan for the
condenser and a flare or vapor recovery system. Many remote sources do
not have an electric power supply, which precludes using a forced draft
fan. Routing the vapors to the firebox or fire-tube is not practical in
all situations because the high water vapor content can extinguish the
fire. While flares and vapor recovery systems address this problem, they
require frequent monitoring, which is a problem at unmanned sites that
are only visited infrequently. The lack of electric power supply would
make certain automated monitoring systems impossible.

Commenters (0022, 0026, 0030, 0035/0036) said EPA should adopt a
separate GACT standard for facilities outside of \"Urban-1\" areas and
\"urbanized areas.\" The 95-percent control efficiency standard could
still apply in Urban-1 areas and \"urbanized areas,\" but it would not
otherwise apply to area source TEG dehydrators. The commenters
recommended that EPA set GACT for facilities that are not located in
Urban-1 or urbanized areas as a reduction of benzene to a level of less
than 1 tpy, and remove the 95-percent control efficiency requirement.
Commenter 0022 added that GACT could also be considered as the
installation of a flash tank/condenser or incinerator process.

[Response:]{.underline} We agree with the commenters that it is
reasonable to require a higher level of emission reductions for TEG
dehydration units located in more densely populated areas. We also
recognize that the oil and natural gas source category is unique because
there are many area sources that are located in remote or rural areas.
For these reasons and the reasons discussed above, we have
subcategorized to differentiate between those sources above the cutoff
levels identified above that are located inside UA plus offset and UC
boundaries and those located outside such boundaries. We require
installation of control equipment for TEG dehydration units located
inside UA plus offset and UC boundaries and management practices (i.e.,
optimized glycol circulation rate) for units located outside UA plus
offset and UC boundaries. We believe that this approach addresses the
commenters' concerns regarding the control of remote or rural
facilities.

[Comment:]{.underline} Commenters (0032/0033, 0034) said EPA should
conduct additional analysis associated with the burden and cost imposed,
and also the potential for unique technical issues associated with
control effectiveness, for implementing a standard at remote sites.

[Response:]{.underline} Because we are not requiring add-on controls at
sources located outside a UA plus offset and UC boundary, it is not
necessary to revise the costs for the installation of add-on controls to
address burden at remote sites. However, we have estimated impacts
associated with applying management practices (i.e., optimizing the TEG
circulation rate) for sources located outside of UA plus offset and UC
boundaries. In order to be conservative in our analysis, we assumed that
half of the area sources located outside of UA plus offset and UC
boundaries would need to replace their glycol pump to achieve the
optimum circulation rate. Because operating at the optimized TEG
circulation rate results in a reduction of natural gas losses, the
annual cost includes a partial cost savings, which reduces the
annualized cost for glycol pump replacement. We estimate an annual cost
of approximately \$900 per area source.

[Comment:]{.underline} Some commenters (0031, 0043) said the 95-percent
control efficiency appears excessive for area sources, especially those
that are remote and unmanned. A control efficiency of 80 percent was
suggested. Commenter 0043 said achieving a 95-percent removal will
require combustion after a condenser, and there are safety issues
associated with post combustion. Commenter 0031 said EPA has not
justified the 95-percent efficiency rate, and EPA should provide
justification for any efficiency rate it proposes.

[Response:]{.underline} As we stated in the preamble to the February
1998 proposed area source standard (63 FR 6299), condensers and flares
installed on actual area source TEG dehydration units have been observed
and we believe that condensers capable of achieving 95 percent emission
reduction are technically feasible for area sources. The commenters did
not provide any data showing their basis of the 80-percent control
efficiency. Therefore, we have not changed the level of control for the
area source standards. However, as stated previously, the final rule
distinguishes between sources located in densely populated areas and
those located in rural or remote areas. TEG dehydration units with an
actual annual average throughput of 3 MMscf/day or more and benzene
emissions of 1 tpy or more, that are located outside a UA plus offset
and UC boundary, are required to implement management practices.

[Comment:]{.underline} Commenter (0031) asked EPA to clarify if a flare
is required to meet the efficiency rate, would it have to meet the flare
standards in 40 CFR 63, subpart A.

[Response:]{.underline} The commenter is correct, flares are required to
meet the standards in the General Provisions, 40 CFR 63, subpart A \[see
§63.771(d)(i)(iii)\].

# *Start-up, Shutdown, Malfunction Plans* {#start-up-shutdown-malfunction-plans .Level-1}

[Comment:]{.underline} One commenter (0025) supported the decision to
not require submittal of malfunction reports as proposed in 1998 and
prefers the current proposal\'s requirements. This would have been
burdensome and impractical, especially in remote locations that do not
have full-time operators onsite.

[Response:]{.underline} We appreciate the commenter\'s support of the
current proposal\'s startup, shutdown, and malfunction report
requirements. No changes to these requirements have been made to the
final rule.

# Reporting and Recordkeeping {#reporting-and-recordkeeping .Level-1}

[Comment:]{.underline} Commenters (0022,0023/0024, 0026, 0030,
0032/0033, 0034, 0035/0036) said setting a GACT standard for remote area
source TEG dehydrators that eliminates the 95% control efficiency
standard should not require the same level of monitoring, recordkeeping,
and reporting that applies to major sources in truly urban areas.
Commenters (0022, 0026, 0030, 0035/0036) said a remote area source TEG
should be required to register the source with the agency implementing
the control requirements and demonstrate compliance with the GLYCalc^TM^
calculation. The operator could be required to reconfirm that the source
meets the 1-tpy standard through quarterly measurements.

Commenters (0023/0024, 0025, 0032/0033, 0034) added that compliance with
the startup, shutdown, and malfunction (SSM) requirements will be
difficult for remote, unmanned locations because these requirements
normally call for immediate action when there is a failure. Commenters
(0032/0033, 0034) added that EPA has not taken into account previous
comments on SSM requirements that logging of events and submittal of
reports (including time constraints associated with immediate reporting
in some instances) impose issues that are difficult to address for
remote sites.

Some commenters (0029, 0031) felt that EPA should simplify the reporting
and recordkeeping for area sources in general because many of the units
covered may be in remote areas and at unmanned facilities. Commenter
0031 added that smaller operators will be greatly impacted if this level
of detail is required.

[Response:]{.underline} We believe that the recordkeeping and reporting
requirements for remote sources under the final rule are simple and
reasonable. First, SSM procedures only apply to sources required to
install add-on controls, which are only required for sources located
within the UA plus offset and UC boundary. Further, only sources with
TEG dehydration units with annual average throughput of 3 MMscf/day or
more and benzene emissions of 1 tpy or more are required to submit
documentation providing their location. Sources with TEG dehydration
units with throughputs less than 3 MMscf/day or benzene emissions less
than 1 tpy are required to maintain records of the determination of
these criteria \[§§63.764(e)(1) and 63.774(d)(1)\] but are not subject
to any reporting requirement.

[Comment:]{.underline} One commenter (0021) pointed out that the
provisions requiring that records be kept on site or accessible within 2
hours of the dehydrator are impossible for the Rocky Mountain region,
where winter prevents access to the well site within 2 hours.

[Response:]{.underline} Section 63.774(b)(1)(ii) states that records can
be stored in a central location either on computer or other means that
provides access within 2 hours after the request. Therefore, records for
facilities located in regions that may be inaccessible may be stored at
an off-site location provided they are accessible within the 2-hour time
period.

# Test Methods {#test-methods .Level-1}

[Comment:]{.underline} Commenters (0032/0033, 0034) endorsed the
addition of ASTM D6420-99(2004) as an alternative test method to EPA
Method 18.

[Response:]{.underline} We appreciate the commenters\' endorsement of
this alternative test method.

# Impacts Analyses {#impacts-analyses .Level-1}

Several commenters (0021, 0027, 0031, 0034) referred to several aspects
of EPA\'s economic impact analysis, including: the TEG dehydrator
population estimate, the cost impact analysis, and the impact of the
rule on regulated sources. One commenter (0021) stated that EPA\'s
economic impact analysis is based on assumptions that are not
\"supported by the proposed rule, references, discussion, or logic.\"
The commenter (0021) recommended that EPA should prepare an accurate
estimate of the cost of the rule.

# *TEG Dehydrator Population Estimate* {#teg-dehydrator-population-estimate .Level-1}

[Comment:]{.underline} Two commenters (0021, 0031) commented on EPA\'s
estimate of the TEG dehydrator population. One commenter (0021) did not
agree with EPA\'s approach for estimating the number of wells and stated
that the number appeared low. The commenter\'s (0021) arguments had
three main points. First, the commenter (0021) noted that EPA relied on
a 1996 discussion with representatives of API for the number of wells
having specified gas production ranges. According to the commenter
(0021), API represents major operators, who typically find small gas
sources uneconomical, meaning that the estimates may be biased. The
commenter (0021) stated that discussions with representatives of
Railroad Commission of Texas show that the State of Texas does not
routinely record statistics comparing the number of gas wells as a
function of production rate. The commenter (0021) stated that these
statistics were available for a fee and suggested that EPA should have
contracted for them. In addition, the commenter (0021) stated that they
did not believe API worked with 33 State Agencies to prepare the data.

Second, the commenter (0021) referred to the fact that area source
statistics were derived from the number of Gas Processing Plants
estimated to exist in 2003. The commenter (0021) maintained that the
correlation between gas plants and TEG area sources was unsupported. The
commenter (0021) stated that according to the Railroad Commission of
Texas there was no data to support the assumption.

Third, the commenter (0021) stated that EPA provided no insight into how
the TEG/Gas Plant correlation was derived. Specifically, the commenter
(0021) stated that the table of Area Source TEG Dehydration Units by
throughput from 0.1 to 5 MMscf/day was not supported. According to the
commenter (0021), EPA\'s estimate of the number of dehydration units is
low. In support of their argument, the commenter (0021) referred to
personal communications with the Railroad Commission of Texas engineers,
which indicated that EPA\'s estimate of the number of TEG dehydration
units is about the same as the number Texas record show for all E&P
dehydrators in Texas in the range from 0.1 to 5 MMscf/day.

The commenter (0021) also referred to EPA\'s assumption in the current
estimate that 10 percent of the TEG dehydrators would use flash tanks.
According to the commenter (0021), this assumption was based on the
original proposal background information document where EPA did not
recommend the use of the 10-percent flash tank estimate, \"but simply
suggests if 10 percent is used, the results are\....\" The commenter
(0021) maintained that these statements are misrepresentations of the
facts and cast doubts on the rulemaking process.

The commenter (0021) stated that they have attempted to obtain TEG
dehydration unit population without success. According to the commenter
(0021), the Independent Petroleum Producers Association (IPPA) do not
collect these data. Further, the commenter (0021) stated that
representatives of the Railroad Commission of Texas have demonstrated
that they do not have a means of distinguishing TEG dehydration units,
regardless of throughput capacities.

The commenter (0021) supported EPA\'s emission estimates based on
GRI-GLYCalc, but stated that using these emission estimates with
unsupported population estimates appears questionable.

One commenter (0031) questioned where EPA\'s impact estimate came from.
The commenter (0031) clarified that they did not understand how EPA
estimated that 2,200 sources would be impacted by applicability Option 1
(national applicability) and 1,050 sources would be impacted by Option 2
(Urban-1/Urban-2 applicability). The commenter stated that EPA needed to
justify its data and assumption.

One commenter (0021) stated that EPA\'s estimates of TEG dehydrator
population are questionable, and therefore any cost/benefit analysis
based on these population estimates is in question.

[Response:]{.underline} According to the Railroad Commission of Texas,
they do not maintain information about the glycol dehydration unit
population in the State of Texas. The Commission does maintain data on
the number of active wells in the State.[^9] We believe that the
commenter may have confused the number of wells with the number of
dehydration units.

Our estimate of the population of TEG dehydration units was based on a
procedure developed by a consultant to the American Petroleum Institute
(API)[^10] and reasonable apportioning of the number of TEG dehydration
units with actual natural gas throughputs ranging from 0.1 to
5 MMscf/day. Throughput sizes were apportioned across the size ranges
based on the number of wells, the number of processing plants and the
volume of gas produced. We used this estimate to compare control
options. No additional information regarding the population of TEG
dehydration units was provided by the commenters. Therefore, we have not
adjusted our estimates of the TEG dehydration unit population.

# *No New Area Source Assumption* {#no-new-area-source-assumption .Level-1}

[Comment:]{.underline} Commenter (0043) disagreed with EPA\'s assumption
that any new sources would be major sources. The commenter said the
opposite is true because industry tries to avoid the title V process by
limiting emissions below major source thresholds. Therefore, the impact
of the proposal is much greater than assumed.

Commenter (0031) questioned the new source assumption and asked for
clarification regarding the resulting title V impacts. The commenter was
concerned that all sources subject to GACT would be required to obtain
title V permits, which would be burdensome and costly.

[Response:]{.underline} In response to this comment, we reevaluated our
assumptions related to the number of new sources that would be subject
to the area source rule. We estimate that there will be 423 new area
sources constructed in the first three years after promulgation of the
final rule, based on the trend in the number of new wells drilled from
2002 to 2005[^11] that we used to estimate future well drilling
activity. Of these 423 new sources, we estimate that 6 sources will be
located within UA plus offset and UC boundaries. We believe that the
resulting costs and burden of complying with the area source standards
for these sources are reasonable. Area sources are not required to get
Title V permits under subpart HH.

# *Unmanned Facilities Use of Flares* {#unmanned-facilities-use-of-flares .Level-1}

[Comment:]{.underline} Commenters (0032/0033, 0034) said many remote,
unmanned sources in West Virginia use flares rather than condensers due
to gas characteristics in the area. Therefore, controls here may prove
to be more costly than assumed by EPA for sources in remote areas that
are actually having less impact than for most other areas.

[Response:]{.underline} We believe that the final rule, which only
requires management practices for sources outside of UA plus offset and
UC boundaries, addresses the commenters\' concerns regarding the costs
of add-on controls (i.e., flares) for remote sources.

# *Sensitivity To Operating Costs* {#sensitivity-to-operating-costs .Level-1}

[Comment:]{.underline} Commenter 0027 was concerned that the increased
regulatory costs associated with the proposal will result in the
premature abandonment and permanent loss of a significant source of U.S.
natural gas supplies. The vast majority of production in the Appalachian
Basin states is economically marginal, and these natural gas streams are
extremely sensitive to any increases in operating costs, including
increased regulatory costs. These streams are often aggregated from
hundreds and thousands of wells behind a TEG dehydration unit. Applying
standards to the TEG dehydration unit will push the regulatory costs
upstream, resulting in the premature loss of otherwise viable domestic
marginal natural gas supplies.

One commenter (0031) said small independent operators, which are
prevalent in the industry, do not have the personnel or the expertise to
evaluate or implement the proposed rules if they become final. Smaller
operators will have to hire consultants to address the additional
requirements, which create an additional cost burden. EPA needs to
reconsider the impacts to smaller operators.

[Response:]{.underline} As a part of the rulemaking process, we are
required to evaluate the impact a rule may have on small businesses. Our
evaluation was based on the maximum level of control required at a
single source, and the associated costs incurred, in comparison to the
minimum revenue realized from that source. This analysis is presented in
section V.C (Regulatory Flexibility Act) of the preamble to the July 8,
2005 supplemental proposal (70 FR 39449). We estimated that the proposed
area source standards would have costs significantly less than 1 percent
of revenues. Based on this estimate, we determined that the annual cost
of control for facilities affected by the proposed rule is not
sufficient to generate a significant impact on a substantial number of
small entities.

# Comments Received on February 6, 1998, Proposed Rule {#comments-received-on-february-6-1998-proposed-rule .Level-1}

#  In addition to the public comments received on the July 8, 2005, supplemental proposal, we also received comments on the original February 6, 1998, proposal related to the area source standards. These comments were not addressed since final action with respect to area sources was deferred. This section provides a summary of the comments received on the February 6, 1998 proposed area source standards and our responses to these comments. The legacy docket for these comments is Docket No. A-94-04. Table 2 presents a listing of only the persons submitting written comments on the area source standards (i.e., commenters making comments on the major source rule are not shown), their affiliations, and the docket item number for their comment.  {#in-addition-to-the-public-comments-received-on-the-july-8-2005-supplemental-proposal-we-also-received-comments-on-the-original-february-6-1998-proposal-related-to-the-area-source-standards.-these-comments-were-not-addressed-since-final-action-with-respect-to-area-sources-was-deferred.-this-section-provides-a-summary-of-the-comments-received-on-the-february-6-1998-proposed-area-source-standards-and-our-responses-to-these-comments.-the-legacy-docket-for-these-comments-is-docket-no.-a-94-04.-table-2-presents-a-listing-of-only-the-persons-submitting-written-comments-on-the-area-source-standards-i.e.-commenters-making-comments-on-the-major-source-rule-are-not-shown-their-affiliations-and-the-docket-item-number-for-their-comment. .Level-1}

**Table 2. List of Commenters on Proposed Standards for Oil and Natural
Gas Production Industry^a^**

+--------------------------+--------------------------------------------+
| **Docket Item            | **Commenter and Affiliation**              |
| Number^b^**              |                                            |
+==========================+============================================+
| IV-D-1                   | G. Von Bodungen                            |
|                          |                                            |
|                          | Louisiana Department of Environmental      |
|                          | Quality                                    |
|                          |                                            |
|                          | Office of Air Quality                      |
|                          |                                            |
|                          | P.O. Box 82135                             |
|                          |                                            |
|                          | Baton Rouge, Louisiana 70844               |
+--------------------------+--------------------------------------------+
| IV-D-4                   | R. Gow                                     |
|                          |                                            |
|                          | Questar Corp.                              |
|                          |                                            |
|                          | P.O. Box 45433                             |
|                          |                                            |
|                          | Salt Lake City, Utah 84145                 |
+--------------------------+--------------------------------------------+
| IV-D-5                   | T. LaSalle, HLP Engineering, Inc.          |
|                          |                                            |
|                          | barryh@linknet.net (Via e-mail)            |
+--------------------------+--------------------------------------------+
| IV-D-6                   | S. Knis                                    |
|                          |                                            |
|                          | The Dow Chemical Company                   |
|                          |                                            |
|                          | Midland, Michigan 48675                    |
+--------------------------+--------------------------------------------+
| IV-D-7                   | V. Lajiness                                |
|                          |                                            |
|                          | The Coastal Corporation                    |
|                          |                                            |
|                          | 500 Renaissance Center                     |
|                          |                                            |
|                          | Detroit, Michigan 48243                    |
+--------------------------+--------------------------------------------+
| IV-D-8                   | W. Ebarb                                   |
|                          |                                            |
|                          | Hi Trading and Transportation Group        |
+--------------------------+--------------------------------------------+
| IV-D-10                  | T. Hutchins                                |
|                          |                                            |
|                          | El Paso Energy Company                     |
+--------------------------+--------------------------------------------+
| V-D-11                   | R. Metcalf                                 |
|                          |                                            |
|                          | Louisiana Mid-Continent Oil and Gas        |
|                          | Association                                |
|                          |                                            |
|                          | 801 North Boulevard, Suite 201             |
|                          |                                            |
|                          | Baton Rouge, Louisiana 70802               |
+--------------------------+--------------------------------------------+
| IV-D-14                  | T. Horn                                    |
|                          |                                            |
|                          | Harding Lawson Associates                  |
|                          |                                            |
|                          | 202 Central SE, Suite 200                  |
|                          |                                            |
|                          | Albuqureque, New Mexico 87102              |
+--------------------------+--------------------------------------------+
| IV-D-15                  | J. Cantrell                                |
|                          |                                            |
|                          | Gas Processors Association                 |
|                          |                                            |
|                          | 6526 East 60th Street                      |
|                          |                                            |
|                          | Tulsa, Oklahoma 74145                      |
+--------------------------+--------------------------------------------+
| IV-D-16                  | B. Price                                   |
|                          |                                            |
|                          | Phillips Petroleum Company                 |
|                          |                                            |
|                          | Bartelsville, Oklahoma 74004               |
+--------------------------+--------------------------------------------+
| IV-D-19                  | W. Airey                                   |
|                          |                                            |
|                          | Vorys, Sater, Seymour, and Pease LLP       |
|                          |                                            |
|                          | 52 East Gay Street                         |
|                          |                                            |
|                          | P.O. Box 1008                              |
|                          |                                            |
|                          | Columbus, Ohio 43216                       |
+--------------------------+--------------------------------------------+
| IV-D-20                  | K. Beckett                                 |
|                          |                                            |
|                          | Jackson & Kelly                            |
|                          |                                            |
|                          | 1600 Laidley Tower                         |
|                          |                                            |
|                          | P.O. Box 553                               |
|                          |                                            |
|                          | Charleston, West Virginia 25322            |
+--------------------------+--------------------------------------------+
| IV-D-22                  | R. Jones                                   |
|                          |                                            |
|                          | American Petroleum Institute               |
|                          |                                            |
|                          | 1220 L Street, Northwest                   |
|                          |                                            |
|                          | Washington, District of Columbia 20005     |
+--------------------------+--------------------------------------------+
| IV-D-23                  | W. Flis                                    |
|                          |                                            |
|                          | Exxon Company, U.S.A.                      |
|                          |                                            |
|                          | P.O. Box 2180                              |
|                          |                                            |
|                          | Houston, Texas 77252                       |
+--------------------------+--------------------------------------------+
| IV-D-24                  | S. Waisley                                 |
|                          |                                            |
|                          | U.S. Department of Energy                  |
|                          |                                            |
|                          | Washington, District of Columbia 20585     |
+--------------------------+--------------------------------------------+
| IV-D-26                  | W. Doyle                                   |
|                          |                                            |
|                          | Marathon Oil Company                       |
|                          |                                            |
|                          | 539 South Main Street                      |
|                          |                                            |
|                          | Findlay, Ohio 45840                        |
+--------------------------+--------------------------------------------+
| IV-D-27                  | M. Atherton                                |
|                          |                                            |
|                          | Columbia Energy Group Service Corporation  |
|                          |                                            |
|                          | 12355 Sunrise Valley Drive, Suite 300      |
|                          |                                            |
|                          | Reston, Virginia 20191                     |
+--------------------------+--------------------------------------------+
| IV-D-29                  | M. Chytilo                                 |
|                          |                                            |
|                          | Environmental Defense Center               |
|                          |                                            |
|                          | 906 Garden Street                          |
|                          |                                            |
|                          | Santa Barbara, California 93101            |
+--------------------------+--------------------------------------------+
| IV-D-30                  | A. Lee                                     |
|                          |                                            |
|                          | Texaco, Inc.                               |
|                          |                                            |
|                          | P.O. Box 509                               |
|                          |                                            |
|                          | Beacon, New York 12508                     |
+--------------------------+--------------------------------------------+
| IV-D-31                  | L. Beal                                    |
|                          |                                            |
|                          | Interstate Natural Gas Association of      |
|                          | America L. Traweek, American Gas           |
|                          | Association                                |
|                          |                                            |
|                          | (This comment letter contains a printing   |
|                          | error in the topical report, please see    |
|                          | item IV-G-13 for the correction to this    |
|                          | problem.)                                  |
+--------------------------+--------------------------------------------+
| IV-D-32                  | M. Lev-On                                  |
|                          |                                            |
|                          | ARCO                                       |
|                          |                                            |
|                          | 444 S. Flower Street                       |
|                          |                                            |
|                          | Los Angeles, California 90071              |
+--------------------------+--------------------------------------------+
| IV-D-34                  | W. Sellars                                 |
|                          |                                            |
|                          | Chevron U.S.A. Production Company          |
|                          |                                            |
|                          | P.O. Box 1635                              |
|                          |                                            |
|                          | Houston, Texas 77251                       |
+--------------------------+--------------------------------------------+
| IV-D-35                  | M. Blair                                   |
|                          |                                            |
|                          | Colorado Department of Public Health and   |
|                          | Environment                                |
|                          |                                            |
|                          | 4300 Cherry Creek Drive, South             |
|                          |                                            |
|                          | Denver, Colorado 80246                     |
+--------------------------+--------------------------------------------+
| IV-D-38                  | M. Fish                                    |
|                          |                                            |
|                          | Enron Oil & Gas Company                    |
|                          |                                            |
|                          | P.O. Box 4362                              |
|                          |                                            |
|                          | Houston, Texas 77210                       |
+--------------------------+--------------------------------------------+
| IV-G-02                  | J. Ives                                    |
|                          |                                            |
|                          | Rocky Mountain Oil & Gas Association       |
|                          |                                            |
|                          | 1900 Grant Street, Suite 510               |
|                          |                                            |
|                          | Denver, Colorado 80203                     |
+--------------------------+--------------------------------------------+
| IV-G-3                   | C. Matthews                                |
|                          |                                            |
|                          | Interstate Oil and Gas Compact Commission  |
|                          |                                            |
|                          | P.O. Box 53127                             |
|                          |                                            |
|                          | Oklahoma City, Oklahoma 73152              |
+--------------------------+--------------------------------------------+
| IV-G-9                   | P. Bennett                                 |
|                          |                                            |
|                          | KN Energy Inc.                             |
|                          |                                            |
|                          | One Allen Center                           |
|                          |                                            |
|                          | 500 Dallas Street, Suite 500               |
|                          |                                            |
|                          | Houston, Texas 77002                       |
+--------------------------+--------------------------------------------+
| IV-G-12                  | M. Fox                                     |
|                          |                                            |
|                          | New Century Energies                       |
|                          |                                            |
|                          | P.O. Box 840                               |
|                          |                                            |
|                          | Denver, Colorado 80202                     |
+--------------------------+--------------------------------------------+

^a^ Only those commenters that submitted comments on the area source
standard are included in this table.

^b^ The docket number for this project is A-94-04. Dockets are on file
at EPA Headquarters in Washington, D.C.

# *Definition of Urban Area* {#definition-of-urban-area .Level-1}

Several commenters responded to EPA's request for comments on EPA's
proposed definition of urban area. The major comments received about the
definition of urban area were on the following issues: (1) the
interpretation of the language in section 112(n)(4); (2) the distinction
between "urban" and "urbanized"; (3) the classification of entire
counties as urban; (4) the classification of counties as urban that are
truly rural, and (5) the inclusion of an option for a "risk-distance"
approach.

1.  []{#__RefHeading___Toc143490402 .anchor}*Interpretation of
    Section 112(n)(4)*

[Comment:]{.underline} Nine commenters (IV-D-04, IV-D-08, IV-D-15,
IV-D-19, IV-D-20, IV-D-22, IV-D-26, IV-D-34, and IV-D-38) stated that
EPA's definition of urban area was inconsistent with the statutory
language in section 112(n)(4)(B). The commenters stated that the
language in section 112(n)(4)(B) prohibits EPA from listing "oil and gas
production wells (with its associated equipment)" as area sources except
those located in a MSA with a population of one million or more. The
commenters stated that EPA's proposed definition is too broad because it
includes county-wide MSAs with a population of more than 250,000,
Census-defined "urbanized areas," and apparently Census-defined
small-town "urban areas" with a population of at least 2,500. One
commenter (IV-D-15) noted the proposed definition is unclear on the
status of small-town "urban areas," but the preamble (63 FR 6293 through
6294) and docket materials suggest that EPA intends to include them.
Another commenter (IV-D-08) recommended that EPA make the following
revision to the area source location applicability criteria such that:

> \...only TEG area sources located within metropolitan statistical
> areas or consolidated metropolitan statistical areas with a population
> in excess of 1 million are subject to the finding.

The commenter stated that this revision reflects Congress' intent in
section 112(n)(4) and focuses on congested areas.

One commenter (IV-D-38) also requested that a modification to §63.764(e)
be made if EPA finds the risk of adverse effects to public health to be
more than negligible. According to the commenter, Congress intended that
glycol dehydration units should be included as associated equipment.
Therefore, the commenter recommended the following change:

> \(e\) . . . In addition, the owner or operator is exempt from the
> requirements of paragraph (d) of this section if the glycol
> dehydration unit is not located in a [metropolitan statistical area
> (MSA) with a population in excess of 1 million]{.underline}.

The commenter also stated that the definition of urban area in the
proposed regulation is unnecessary and should be eliminated.

[Response:]{.underline} As we indicated in section 2.3.4 of this
document (Geographic Applicability Criteria), the provisions in section
112(n)(4)(B) of the Clean Air Act as Amended in 1990 apply to \"oil and
gas production wells (with its associated equipment).\" Based on our
interpretation of *associated equipment*, glycol dehydration units are
not considered as part of a well and its *associated equipment*. The
final rule does not incorporate the changes suggested by the commenters.

2.  []{#__RefHeading___Toc143490403 .anchor}*Distinction between
    \"Urban\" and \"Urbanized\"*

[Comment:]{.underline} Five commenters (IV-D-08, IV-D-15, IV-D-22,
IV-D-23, and IV-D-24) stated that in its definition of Urban-2 counties,
EPA had confused the terms \"urban\" and \"urbanized.\" According to the
commenters, the expression \"\...areas that compromise one or more
central places and the adjacent densely settled surrounding fringe that
together have a minimum of 50,000 persons\... " appears to apply to
urbanized areas, yet the definition of Urban-2 states that the counties
are defined as \" . . . all other counties designated as *urban* by the
Bureau of Census\....\" Two commenters (IV-D-08 and IV-D-24) stated that
if EPA intended to use the term \"urbanized\" rather than \"urban,\"
then the determination of which counties are Urban-2 areas is incorrect.
One of the commenters (IV-D-08) noted that the counties included in
Figure 1 of the preamble include both urban and urbanized areas.
According to two commenters (IV-D-15 and IV-D-22), the preamble and
docket materials (Item A-94-04, II-I-9) suggest that EPA may apply area
source controls in areas that do not qualify as \"urban\" under Census
classifications. The commenters stated that the preamble and docket
materials have a criterion that more than 50 percent of the county
population must be considered urban in determining which areas are
Urban-2 areas. The commenters, along with another commenter (IV-D-23),
recommended that EPA modify the proposal to limit applicability to large
metropolitan statistical areas, \"Urban-1\" areas, and Census-designated
\"urbanized areas.\" The commenters stated that this modification would
conform to Congressional intent to limit area source controls to truly
urban areas. One commenter (IV-D-22) stated that the Bureau of Census
definition of \"urbanized areas\" is more consistent with a risk finding
for the source category:

> The Census Bureau delineates urbanized areas to provide a better
> separation of urban and rural territory, population, and housing in
> the vicinity of large places. An urbanized area comprises one or more
> places (\"central place\") and the adjacent densely settled
> surrounding territory (\"urban fringe\") that together have a minimum
> of 50,000 persons. The urban fringe generally consists of contiguous
> territory having a density of at least 1,000 persons per square mile.

One commenter (IV-D-24) suggested updating the Urban-2 area definition
as follows:

> Urban-2 areas which are defined as all other areas designated as
> urbanized areas by the Bureau of Census (areas which comprise one or
> more central places and the densely settled surrounding fringe that
> together have a minimum of 50,000 persons). The urban fringe consists
> of contiguous territory having a density of at least 1,000 persons per
> square mile.

[Response:]{.underline} The commenters were correct that there was an
error in the definition of Urban-2 in the preamble of the February 1998
proposed area source standards. However, the final rule does not utilize
the definition of Urban-2. Instead, the final rule refers only to
sources that were located in Urban-1 counties and those that are not
located in Urban-1 counties (which includes counties that met the
February 1998 definition of Urban-2 and rural). This distinction is
important when determining new source status and is discussed in more
detail in section 2.2 of this document (Compliance Date).

3.  []{#__RefHeading___Toc143490404 .anchor}*Classification of Entire
    Counties as Urban*

[Comment:]{.underline} Six commenters (IV-D-08, IV-D-15, IV-D-20,
IV-D-26, IV-D-27, and IV-D-31) objected to designating entire counties
as urban. The commenters stated that several counties in the U.S. that
have large geographic areas (e.g., Texas has counties with more than
1,000 square miles) where most of the county area is rural with a small
portion that is a small city or metropolitan area. These commenters were
concerned that the definition of an entire county as \"urban\" based on
one small population center would transform vast rural areas into urban
areas. The commenters were also concerned that one urbanized center in
the center of a sparsely populated county could cause the entire county
to be classified as \"urban\" under the proposed method. One commenter
(IV-D-20) mentioned that emissions of remote sources may not affect
urban areas because the sources are within a different airshed, given
the terrain and distance from the MSA.

One commenter (IV-D-15) also stated that EPA misapplied Census
classifications. According to the commenter, MSAs cover entire counties
but other Census-designated categories do not: they are limited to
Census blocks. The commenter stated that the more heavily populated a
metropolitan area is, the broader it's economic influence, making
expansion of MSAs to the county line appropriate. The same expanded
influence does not apply to the small Census-designated areas.

Two commenters (IV-D-15 and IV-D-22) recommended, and one commenter
(IV-D-34) supported, the following modification to the definition of
*urban area* to conform to legislative intent:

> *Urban area* for the purposes of the area source determination is
> defined by use of the U.S. Department of Commerce's Bureau of the
> Census statistical data to classify all land area in the United States
> into one of the three classifications, as follows:
>
> i\. Urban-1 areas, which consist of metropolitan statistical areas
> (MSAs) with a population greater than 250,000;
>
> ii\. Urban-2 areas, which are defined as all other areas designated as
> \"urbanized\" by the Bureau of Census (areas that comprise one or more
> central places and the adjacent densely settled surrounding fringe
> that together have a minimum of 50,000 persons. The urban fringe
> consists of contiguous territory having a density of at least 1,000
> persons per square mile); or
>
> iii\. Rural areas, which are all areas that are not designated as
> Urban-1 or Urban-2.

For consistency, the commenters also requested that EPA make a
conforming amendment to § 63.764(e):

> \(e\) . . . In addition, the owner or operator is exempt from the
> requirements of paragraph (d) of this section if the glycol
> dehydration unit is not located in a county classified as an Urban
> area as defined in Section 63.761.

One commenter (IV-D-27) stated that given the legislative history of
section 112 of the CAA, it is unlikely that Congress considers entire
counties as urban. Therefore, the commenter, along with another
commenter (IV-D-31), recommended that EPA use the following definition
of *urban area* published by the Department of Commerce (Statistical
Abstract of the United States, page 4, 1995 ed., \"Urban and Rural\") as
a basis for defining urban areas:

> Urban area means (1) a county in a metropolitan statistical area (MSA)
> with a population greater than 250,000 and (2) those other urban areas
> in which the urban population comprises all persons living in (a)
> places of 2,500 or more inhabitants incorporated as cities, villages,
> boroughs (except in Alaska and New York), and towns (except in the New
> England States, New York, and Wisconsin), but excluding those persons
> living in the rural portions of extended cities (places with low
> population density in one or more large parts of their area); (b)
> census designated places (previously termed unincorporated) of 2,500
> or more inhabitants; and (c) other territory, incorporated or
> unincorporated, included in urbanized areas. An urbanized area
> comprises one or more places and the adjacent densely settled
> surrounding territory that together have a minimum population of
> 50,000 persons. In all definitions, the population not classified as
> urban constitutes the rural population.

Thirteen commenters (IV-D-04, IV-D-08, IV-D-10, IV-D-15, IV-D-20,
IV-D-22, IV-D-23, IV-D-24, IV-D-30, IV-G-02, IV-G-03, IV-G-09, and
IV-G-12) were concerned that the current definition of an Urban-2 area
would cause many sources located in areas that are truly rural to be
subject to the area source requirement. The commenters recommended that
EPA define \"urban\" to avoid covering large portions of land that are
truly \"rural\" in nature (e.g., largely agricultural land use,
undeveloped land, etc.). Three commenters (IV-D-04, IV-D-30, and
IV-G-03) requested that EPA modify the definition of urban area not to
include, for control purposes, equipment located in rural counties with
small urban places. According to three commenters (IV-D-08, IV-D-20, and
IV-D-22), subjecting many area sources to control requirements is
unjustified by the risk posed and is counter to the stated focus of the
area source determination. One commenter (IV-D-10) recommended deleting
all references to Urban-2 to avoid including sources that have no
potential of impacting urban populations.

[Response:]{.underline} As we stated in section 2.3.4 of this document
(Geographic Applicability Criteria), we rejected Option 2, which is a
county-based scope based on the definitions of Urban-1 and Urban-2. The
final rule regulates TEG dehydration units on a national scope, but
differentiates the level of control between sources located within UA
plus offset and UC boundaries and those outside of these boundaries.

4.  []{#__RefHeading___Toc143490405 .anchor}*Risk-distance Option*

[Comment:]{.underline} Sixteen commenters (IV-D-04, IV-D-08, IV-D-11,
IV-D-14, IV-D-16, IV-D-20, IV-D-22, IV-D-24, IV-D-26, IV-D-30, IV-D-32,
IV-D-34, IV-G-02, IV-G-03, IV-G-09, and IV-G-12) stated that the gas
throughput and benzene emission criteria for TEG dehydrators
\[3 MMscf/day and 1 tpy, respectively\] were appropriate for determining
area source applicability. However, the commenters requested that EPA
revise the location criteria to include a \"risk-distance\" approach for
determining whether a facility is subject to MACT. The commenters
recommended that the definition of urban areas be tailored to address
the risk identified - maximum individual risk in areas where persons
reside close to TEG dehydration units. In general, the commenters
suggested that EPA use the urban area definition to define areas where
TEG units are potentially covered by the area source regulation, and
allow the operators the option of using a risk-based methodology, such
as that described in API Publication 4644, to demonstrate that they pose
a negligible risk to nearby residents. The commenters stated that using
such a methodology if it is determined that the health risks are
negligible (e.g., an most exposed individual cancer risk of less than
1x10-6), the source would not be subject to control. Two commenters
(IV-D-22 and IV-D-34) requested that EPA publish in the *Federal
Register*, the risk-distance graphs and equations from API Publication
4644, along with examples, to make the approach easy to apply. The
commenters also recommended if such a methodology is allowed, that the
owner or operator should be required to maintain, and have readily
available, keep documentation of the analysis. Two commenters (IV-D-08
and IV-D-20) proposed a revision to subpart HH to provide a location
applicability such that:

> **\"**\...TEG area sources otherwise subject to the standard (because
> of gas throughput, benzene emission levels, and location) should not
> be subject to additional standard requirements if the operator
> demonstrated that the most exposed individual health risk is
> negligible.**\"**

One commenter (IV-D-16) recommended that EPA consider the population
density around the immediate area in which the unit is located, in the
same manner implemented in design considerations for pipelines by the
Department of Transportation (DOT).

One commenter (IV-D-24) recommended defining area sources as those
located in **\"**populous areas**\"** rather than **\"**urban
areas**\"** to eliminate confusing language from the definition of area
source. The commenter recommended that **\"**populous areas**\"**
consist of MSAs greater than 250,000 people (or some higher threshold)
and **\"**urbanized areas**\"** (i.e., areas that comprise one or more
central places and the adjacent densely settled surrounding fringe that
together have a minimum of 50,000 persons).

Commenter IV-D-08 recommended the following definition for **\"**urban
and rural areas:**\"**

> *[Urban and rural areas:]{.underline}* For purposes of applicability
> of the area source requirements of this subpart, portions of every
> county/parish in the United States that are classified as either
> **\"**urban**\"** or **\"**rural,**\"** based on certain U.S.
> Department of Commerce Bureau of the Census classifications. Urban
> areas are: (i) those entire counties, parishes, or equivalent
> delineated census areas \[referred to herein as **\"**counties**\"**\]
> that fall wholly or partially within a consolidated metropolitan
> statistical areas (CMSA) with a population greater than 1,000,000; and
> (ii) those specified portions of all other counties which are defined
> by the Bureau of the Census as **\"**urbanized areas,**\"** comprising
> one or more central places, and the adjacent urban fringe of
> contiguous territory having a density of at least 1,000 persons per
> square mile, that together have a minimum of 50,000 persons. Rural
> areas are all other areas of the United States, which are not
> classified as urban as defined above.

[Response:]{.underline} As we stated in our response in section 2.4.2 of
this document (Distance Exemption), we do not believe that we have
authority to exempt from regulating sources that have been identified as
necessary to reach the statutory 90% target. However, we believe that we
have addressed the commenters\' concerns by requiring use of control
device for sources located within a UA plus offset and UC boundary and
management practices (i.e., optimized glycol circulation rate) for
sources located outside these boundaries.

[Comment]{.underline}: Commenter IV-D-16 recommended that, in subpart
HH, EPA publish a list of all counties considered Urban and suggested
that a pointer to Table 3 Urban Counties as appropriate. The commenter
stated that pointing to other groups' lists is inappropriate since EPA
has no control or assurance that the other groups will not discontinue
or rename the document being referred to. The commenter referred to the
Internal Revenue Service (IRS) Publication 534, which is pointed to by
the new source performance standard (NSPS) General Provision, which has
been discontinued and is impossible to obtain.

[Response:]{.underline} We included a current listing of urban counties
in the publicly-available docket to this proposed rulemaking, docket
item II-I-9 of EPA Air Docket A-94-04.

# *Area Source Regulation* {#area-source-regulation .Level-1}

[Comment:]{.underline} One commenter (IV-D-01) stated that if the EPA is
to make an urban versus non-urban designation for determining which area
sources are to be affected, it should be addressed under § 63.760
(Applicability).

[Response:]{.underline} The final rules applies on a national scope,
therefore no provisions are necessary stating that area sources in rural
areas are not subject to subpart HH.

[Comment:]{.underline} One commenter (IV-D-05) suggested that all
references to TEG units be removed from the area source requirements.
According to the commenter, specifying TEG provides an exemption for
other glycol units. The commenter stated that specifying a glycol type
was redundant and would create confusion and loopholes allowing units to
use other types of glycol to avoid applicability. The commenter stated
that the type of glycol should not matter. Another commenter (IV-D-35)
stated that they interpreted subpart HH to require area sources to use
triethylene glycol and questioned why the regulation does not address
units that use ethylene glycol. The commenter was also concerned that
the use of ethylene glycol would exempt certain area sources.

[Response:]{.underline} As we stated in the July 2005 preamble to the
supplemental proposal, the 1999 area source listing in the UATS was
based on emissions information showing that TEG dehydration units
contributed significantly to nationwide emissions of benzene from area
sources in urban areas. Furthermore, TEG dehydration units account for
approximately 90 percent of the HAP emissions at oil and natural gas
production facilities. Therefore, we focused on regulating benzene
emissions from TEG dehydration units, and the final rule regulates only
TEG dehydration units located at area sources.

[Comment:]{.underline} One commenter (IV-D-06) stated that subpart HHH
should not apply to area sources. The commenter provided three reasons
for not regulating area sources under subpart HHH:

> 1\. Glycol dehydration units for natural gas transmission and storage
> are typically located remote areas where there is little potential for
> harmful levels of HAP exposure. The commenter referred to section
> 112(c) of the CAA which allows EPA to regulate area sources only if
> there is "a threat of adverse effects to human health or the
> environment" warranting regulations. The commenter also pointed to
> section 112(k) which indicates that Congress was concerned about urban
> area sources. Therefore, the commenter stated that it would be
> unlikely that regulation of area sources would be needed in subpart
> HHH.
>
> 2\. Emissions from glycol dehydration units are below the major source
> levels, which would reduce the likelihood for harmful levels of HAP
> exposure even if some of these units were located in more heavily
> populated areas.
>
> 3\. Regulating all area sources, in order to capture the few that pose
> an unreasonable risk would be unfair. The commenter explained that a
> "one size fits all" rule on every area source would be unjustified in
> the unlikely event that a few area sources present an unreasonable
> risk. The commenter stated that the regulatory burdens would be for
> only a limited subset of area sources. The commenter recommended that
> EPA should address this issue through the "residual risk" provisions
> of section 112(f) of the Act rather than by setting an area source
> standard under §§ 112(c) and (d).

Three commenters (IV-D-07, IV-D-31, and IV-G-09) requested that EPA not
regulate area sources in the transmission and storage source category
until more data could be collected to determine whether an area source
regulation is required. One commenter (IV-D-07) stated that if these
sources are to be regulated, then one rulemaking addressing both major
and area sources is essential. According to two of the commenters
(IV-D-07 and IV-D-31), transmission and storage operations tend to be
centrally located and are usually much larger in volume but much lower
in HAP emissions than production facilities. The commenters stated that,
under proposed subpart HHH, very few facilities would qualify as area
sources. One commenter (IV-D-07) provided an example of facilities that
accepted operating restrictions to qualify as synthetic minor sources.
The commenter contended that the need for regulating these facilities is
eliminated by the need for operating permits. The commenter strongly
recommended that, if EPA decides to include area sources in subpart HHH,
EPA should retain the option that area sources be determined solely on
the basis of the classification of the county in which it is located.
One commenter (IV-D-31) stated that EPA is considering an area source
determination for natural gas transmission and storage facilities
without providing the industry the benefit of a formalized information
collection process and evaluation. The commenter offered to assist EPA
in gathering data to confirm that such units do not pose unacceptable
risks warranting area source standards.

Although one commenter (IV-G-09) does not presently have data that
compares HAP emissions from the initial dehydration to subsequent
dehydration after pipeline quality gas is transported and temporarily
stored underground, the commenter maintained that, logically, HAP
emissions should be less from the subsequent dehydration. The commenter
was concerned that there is not enough lead time for operators to gather
data requested by EPA on area source dehydration units and that random
submission of data may not be representative of the industry and could
result in errors in impact estimates. The commenter suggested that EPA
work with pipeline operators and their trade associations to collect
information about area source dehydration in a uniform manner, and from
a statistically significant sample of the transmission industry.

[Response:]{.underline} We are not regulating TEG dehydration units
located at natural gas transmission and storage facilities under subpart
HHH. These units were not included in the July 1999 listing under
sections 112(c)(3) and 112(k)(3)(B) of the CAA.

[Comment:]{.underline} One commenter (IV-G-09) agreed that control of
HAP emissions below stated cutoff levels is not cost effective for oil
and gas production area source dehydration units.

[Response:]{.underline} We appreciate the commenter\'s support regarding
the cutoffs for area sources (i.e., TEG dehydration units with an actual
average annual natural gas throughput less than 3 MMscf/day or actual
average benzene emissions less than 1 tpy do not have any control
requirements).

[Comment:]{.underline} Three commenters (IV-D-22, IV-D-30, and IV-G-03)
recommended, and one commenter (IV-D-15) supported, that EPA remove the
95 percent control efficiency from area sources, and adopt a revised
GACT standard for area source triethylene glycol dehydration units as an
alternative that would protect human health and the environment at lower
cost. One commenter (IV-D-08) also requested that EPA revise the GACT
standard to eliminate noncompliance instances for area sources. The
commenters recommended the following control strategy:

> Define GACT as reduction of benzene emissions to a level less than 1
> tpy or as installation and operation of a flash tank and glycol
> dehydrator (or equivalent control device) \[Note: The commenter
> mentioned "glycol dehydrator" but it was assumed that they meant
> "condenser."\] for area source units subject to the rule. No control
> efficiency calculation will be required. An operator would register
> with the implementing agency to demonstrate that the control equipment
> operates within unit design standards.

One commenter (IV-D-30) also recommended that the owner or operator
would be given further flexibility to monitor any operating parameter
appropriate to the unit's characteristics in order to demonstrate
compliance. Two commenters (IV-D-08 and IV-G-03) also recommended that
EPA implement the following to provide a cost-effective solution and
provide the desired level of environmental protection:

-   Require monitoring of the condenser exhaust temperature and the use
    of GLYCalc or equivalent methodology (e.g., a design analysis) to
    determine the minimum exhaust temperature that will result in a
    benzene emission level less than 1 tpy.

-   Require monitoring to show that the condenser (or other control
    device) is operating properly. For condensers, the commenter
    proposed that monitoring should consist of measuring the change in
    temperature (T) across the condenser. The minimum required T should
    be determined by design analysis for each unit subject to this GACT
    standard.

-   Add risk-distance as another applicability criterion to the existing
    criteria (i.e., 3 MMscf/day, 1 tpy benzene, urban-1, urban-2) to
    define area source TEG units subject to GACT control requirements.
    Addition of this criterion will control HAP emissions in those
    situations where HAP emissions could negatively impact offsite
    receptors.

One commenter (IV-D-05) noted that there were no differences in the
requirements for glycol units located at an area source and glycol units
located at a major source. Therefore, the commenter suggested that EPA
state the following:

> "\...glycol units that process 3 MMscf/day or more and that emit 1 tpy
> of benzene and are not located in a Rural area are subject to the
> control, recordkeeping, monitoring, etc."

[Response:]{.underline} In developing standards for area sources, we
evaluated alternative methods for regulating area source TEG dehydration
units. Through a review of available information and with support from
results using GLYCalc, we believe that the selected control requirements
are technically and economically achievable and appropriate for area
source TEG dehydration units within the UA plus offset and UC
boundaries. However, we have reduced the reporting requirements for
these units as compared to major sources to lessen the overall burden on
these smaller HAP emission points while still ensuring compliance.

[Comment:]{.underline} One commenter (IV-D-29) advocated more stringent
requirements for area sources, stating that the proposed requirements
were weak and ineffective and would lead to greater enforcement
difficulties and controversy at the local level. The commenter was
concerned that industry would fight for area source determinations
before local regulatory agencies. The commenter noted that local
agencies lack the financial resources and political support to defend
against industry. The commenter maintained that strengthening the
requirements for smaller HAP sources would force the industry to examine
technological control measures for compliance. In order for EPA to meet
its legal and substantive requirements under the CAA, the commenter
recommended that EPA should:

-   require covers, closed vent systems, and control devices with an
    emission control efficiency of 95 percent or greater on area source
    storage vessels with the potential for flash emissions and an actual
    throughput of 500 barrels per day or greater;

-   require leak detection and repair programs and necessary equipment
    modifications for area as well as major sources;

-   require the same recordkeeping and reporting requirements for major
    sources should apply to area sources

-   MACT or best available control technology (BACT) should be applied
    to area sources, instead of GACT; and

-   implement TEG dehydration unit controls to area sources with a
    throughput of 42 thousand m3/day, or greater. The commenter stated
    that EPA offered no real justification for the selected
    applicability thresholds.

[Response:]{.underline} Section 112(d)(5) allows us to set area source
standards according to GACT and management practices. We believe that we
have properly exercised our discretion and have established appropriate
requirements for sources in this category.

In addition, there is no basis to regulate storage vessels and equipment
leaks in the final rule, as recommended. The basis for the February 1998
proposal was an area source finding which only included TEG dehydration
units. Subsequently, the July 2005 supplemental proposal and the final
rule are based on the July 1999 listing of oil and natural gas
production facilities under sections 112(c)(3) and 112(k)(3)(B) of the
CAA. This listing was based on information showing that benzene
emissions from TEG dehydration units at area sources of oil and natural
gas production facilities contribute significantly to nationwide benzene
emissions. TEG dehydration units emit a large majority of the benzene
emissions from oil and natural gas production facilities. Therefore, the
area source category listing focused on regulating benzene emissions
from TEG dehydration units and we did not include other types of
dehydration units or other emission points at area source oil and
natural gas production facilities. Because we have not made a risk
finding under section112(c)(3) regarding the other emission points
(i.e., storage vessels and equipment leaks), nor included them in the
area source category listing under sections 112(c)(3) and 112(k)(3)(B),
we do not have the authority to regulate them in this final rule.

# *Control Efficiency* {#control-efficiency .Level-1}

[Comment:]{.underline} One commenter (IV-D-32) stated that control
efficiency requirements for major and area sources do not both have to
be 95 percent. The commenter remarked that there is no statutory
requirement, nor practical feasibility for such a mandate.

[Response:]{.underline} Information available to us suggests that there
are area sources that are controlled using condensers. In addition, we
modeled area source units and found that they could achieve 95 percent
control. Therefore, we determined that the level of control, when
required, should be 95 percent.

# *Monitoring, Recordkeeping, and Reporting* {#monitoring-recordkeeping-and-reporting .Level-1}

[Comment:]{.underline} Two commenters (IV-D-08 and IV-D-22) stated that
the area source requirements in § 63.775(c) are burdensome and
impractical because some remote locations do not have full time
operators onsite. Commenter IV-D-08 recommended the following:

-   develop a generic, simplified contingency plan for area source
    glycol dehydrators subject to subpart HH to replace the startup,
    shutdown, and malfunction plan codified at §63.10(d)(5);

-   enable area sources to adopt the contingency plan, referenced above,
    or propose their own modifications to it, as part of their
    notification of compliance status, as discussed above; and

-   allow for compilation of all events in which special action was
    taken that is inconsistent with the plan to be submitted in monthly
    letter reports.

The commenter expressed appreciation for EPA's effort to reduce burden
for area sources by not requiring that they have a complete startup,
shutdown, and malfunction plan.

[Response:]{.underline} As we stated in the July 2005 preamble to the
supplemental proposal (70 FR 39447), in the February 1998 proposal, we
proposed only requiring owners and operators to submit reports of any
malfunctions that are not corrected within 2 calendar days of the
malfunction within 7 days of the subject malfunction(s). It was our
intention that owners or operators would only be required to submit the
malfunction reports and not develop a startup, shutdown, and malfunction
(SSM) plan. However, as we stated in the July 2005 preamble, we felt
that the unique nature of oil and natural gas production facilities was
best addressed by having owners and operators prepare a SSM plan that
would provide the necessary flexibility in dealing with SSM events at
these sites. Therefore, the final rule requires SSM plans for sources
located within a UA plus offset and UC boundary. For sources located
outside of these boundaries, the final rule requires management
practices and does not require startup, shutdown, and malfunction
reports for these sources.

# REFERENCES {#references .Level-1}

[^1]: The commenter has marked up the suggested language for Option 1.

[^2]: If EPA extends the area source requirements to rural areas, API
    would insert \"or in a rural area,\" here.

[^3]: If EPA extends the area source requirements to rural areas, API
    would insert \"or in a rural area,\" here.

[^4]: . National Emission Standards for Hazardous Air Pollutants for
    Source Categories: Oil and Natural Gas Production and Natural Gas
    Transmission and Storage -- Background Information for Final
    Standards: Summary of Public Comments and Responses. May 1999. EPA
    Document No. 453/R-99-004b. Section 2.1.3.

[^5]: . National Emission Standards for Hazardous Air Pollutants for
    Source Categories: Oil and Natural Gas Production and Natural Gas
    Transmission and Storage -- Background Information for Final
    Standards: Summary of Public Comments and Responses. May 1999. EPA
    Document No. 453/R-99-004b. Section 2.7.

[^6]: . National Air Toxics Program: The Integrated Urban Strategy (64
    FR 38705, 38724).

[^7]: . Memorandum from Brown, H.P., EC/R Incorporated, to Nizich, G.,
    EPA/OAQPS/ESD/WCPG. June 25, 2005. Revised Impacts for Area Sources
    in the Oil and Natural Gas Production Source Category. Air Docket
    No. OAR-2004-0238-0002 and 0003.

[^8]: . Letter from Seitz, J. EPA/OAQPS and E. Schaeffer, EPA/ORE to
    Director, Office of Ecosystem Protection, Region I, et al. December
    20, 1999. p. 3. Third Extension of January 25, 1995 Potential to
    Emit Transition Policy.

[^9]: . Memorandum from Nizich, G., U.S. Environmental Protection
    Agency, to Air and Radiation Docket No. EPA-HQ-OAR-2004-0238.
    October 18, 2005. Discussion with Representatives of the Railroad
    Commission of Texas regarding Information Referenced in Comments on
    the Oil and Natural Gas Production National Emission Standards for
    Hazardous Air Pollutants (NESHAP) Proposal.

[^10]: . JFD Consultancy. Triethylene Glycol Dehydrator Operating
    Parameters for Estimating BTEX Emissions. Prepared for the American
    Petroleum Institute. Air Docket Number A-94-04, Item Number II-D-55.
    February 1996.

[^11]: . Memorandum from Brown, H.P., EC/R Incorporated, to Nizich, G.,
    EPA/OAQPS/SPPD/CCG. ***Date to be written***. Estimate of the Number
    of New TEG Dehydration Units.