# Attachment 1: May 19, 2011 Petition for Reconsideration Correspondence

# Attachment 2: Supplemental Information to the May 19, 2011

Petition for Reconsideration1 

### Supplement to Alyeska Pipeline Service Company Petition for

Reconsideration

July 14, 2011

The following discussion supplemen ts Alyeska’s May 19 petition to the Administrator. It is being provided in addition to a copy of that peti tion as information for EPA to incorporate into

its evaluation that is associated with reconsider ation notice as articulated in its federal register notice of March 21, 2011.

In the final rule, EPA created the non-continenta l liquid fuel subcategor y, but units located in

Alaska were not included. API di d raise this issue and make a reque st that Alaska be included in this subcategory. Alyeska is a member of API. In APSC’s letter dated May 19, 2011, we petitioned EPA for reconsideration of the deci sion to exclude Alaska in the definition of unit designed to burn liquid fuel t hat is a non-continental unit in 63.7575.

Basis for Alyeska’s Request

As noted in the previous reconsideration co rrespondence referenced above, the characteristics of many boilers and process heaters in Alaska are id entical to units located in the areas already classified by EPA as non-continen tal liquid, and are wholly consis tent with the characteristics identified by commenters and summarized in EP A’s response to comments (76 FR 15635). We list those non-continental liquid characteristics below, and also provide relevant information specific to the State of Alaska and of our operations.

1. Remote locations wit hout access to natural gas.

Attached is a map showing natural gas transmission lines (pipelines) in the Cook Inlet area of Alaska, which includes Anchorage, Al aska, the state’s largest city. The Cook Inlet area gas system is the closest to Valdez. The pipeline system extends to Palmer, Alaska, a small town which is approximately 30 miles north of Anchorage along the Glenn Hwy. Valdez is approximately 305 highway miles from Anchorage. The only other source of natural gas is on the North Slope which starts on the north side of the Brooks Mountain Range approximately 675 miles north of Valdez. A partial map of Alaska is also attached for reference.

Only the above described small portion of Alaska has access to commercial or utility provided supplies of natural gas. Most areas of this vast and remote state are without commercially or utility provided natural gas, including many of Alaska’s largest cities, such as the state’s capitol,

Juneau. This is a very unusual characteristic for a US st ate, but one shared with cities in the noncontinental areas already identified in the boiler rule.

2. Remote facilities that cannot physically access natural gas pipeli nes, making burning liquid

fuels unavoidable.

The city of Valdez, including the Valdez Marine Terminal (VMT) is such a city and facility. The VMT is located within the city of Valdez, Al aska, but as noted above there is no natural gas2 service in Valdez or the surrounding area. As a result, the city of Valdez and the VMT are forced to burn liquid fuel to meet electric power generation needs

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3. Units at a facility are designed to burn gaseous fuel, but the gaseous fuel produced at the facility, as a product of VMT crude oil storage and crude oil tanke r loading processes, is less than the energy required to genera te power to operate the VMT.

As part of the facility’s crude oil storage and mari ne loading operations, the VMT produces and captures crude oil hydrocarbon vapors for use as gaseous fuel for the production electricity from three onsite Alyeska owned and ope rated 242 MMBtu/hr steam boilers . These processes do not produce sufficient fuel to fully meet power need s. Therefore, the gaseous fuel must be complemented with distillate fue l. Because of the variability of gaseous fuel production, due to variability in crude oil stor age volumes and tanker loading operation, the volume of vapors provided to the steam boilers varies, but on averag e the gaseous fuel pres ently provides 65% of the heat input to the boilers.

As discussed above, there is no natural gas pipeline delivery system in the Valdez area. More accurately the nearest natural gas system is in Anchorage and any pipeline route would be forced to closely approximate the highway system. This would involve costs and environmental impacts that are too significant to be overcome.

In summary, Alyeska can find no reason why units in Alaska that co-fire gaseous and liquid fuel, and also lack access to natural gas pipelines, sh ould be treated differently than other noncontinental units with the same characteristics.

Suggested Subcategory Definition

To address the units located in Alaska discussed above, Alyeska suggests the following change to the definition of non-continental unit in 63.7575 (emphasis added):

unit designed to burn liquid fuel that is a non-continental unit means an industrial, commercial, or institutional boi ler or process heater designe d to burn liquid fuel located in the State of Hawaii, the Virgin Islands , Guam, American Samoa, the Commonwealth of Puerto Rico, or the Northern Mariana Islands, and regions of the State of Alaska without economically available natural gas distribution systems or pipelines

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