# E C 

# /

R Incorporated Providing Environmental Technical Support Since 1989

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514 Telephone: (919)484

- 0222  Fax: (919) 484

- 0122 MEMORANDUM

DATE: August 1, 2013

SUBJECT: Cost and Secondary Environmental Impacts Associated with Controlling Storage

Vessels under the Oil and Natural Gas Sector New Source Performance Standards

FROM: Heather Brown, EC/R Incorporated

TO: Bruce Moore, EPA/OAQPS/SPPD/FIG

The purpose of this memorandum is to document the estimated cost and secondary environmental impacts related to reducing volatile organic compound (VOC) emissions from

new storage vess els using a combustion device to comply with the new source performance standards (NSPS) for the oil and natural gas sector (40 CFR part 60, subpart OOOO).

On April 12, 2013, the Envi ronmental Protection Agency (EPA) proposed amendments to the Oil and Natural Gas Sector NSPS (subpart OOOO) to address reconsideration of certain provisions of subpart OOOO. As a part of the proposed action, EPA established an alternative

mass

- based emissi on limitation of 4 tons per year (tpy) of VOC uncontrolled storage vessels. To respond to comments on its rationale for choosing the 4

- tpy mass

- based emission limit, the EPA further evaluated the cost of controls and secondary environmental impacts associa ted with operating a combustion control device at emission rates other than 4 tpy.

COST IMPACTS ASSOCIATED WITH COMBUSTION DEVICE OPERATION

Cost effectiveness was calculated for several regulatory options to determine the appropriate

mass

- based alternat ive emission limit. Regulatory Options A through E represent uncontrolled VOC emissions ranging from 1 tpy to 6 tpy, respectively. The annual cost of $19,580 per year associated with operating a combustion device was previously estimated for the final, Apr il
2012, NSPS. 1 Emission reductions were calculated based on a 95 percent control device efficiency. The options are presented in Table 1. As shown in Table 1, the cost effectiveness ranges from a maximum of $20,611/ton for uncontrolled VOC emissions of 1 tpy down to $3,435/ton for uncontrolled VOC emissions of 6 tpy.

SECONDARY ENVIRONMENTAL IMPACTS ASSOCIATED WITH COMBUSTION

DEVICE OPERATION

Secondary environmental impacts were estimated for nitrogen oxides (NO X ), carbon monoxide, and carbon dioxide (CO 2 ) emissions associated with the combustion of the VOC emissions from oil and condensate storage vessels. In addition, the emissions associated with the pilot light operation were estimated, as well as methane emission reductions associated with control of oil2 Table 1. Cost Impacts Associated Regulatory Options Operating a Combustion Device to

Reduce VOC Emissions

Regulatory Option U ncontrolled

VOC

Emissions (tpy) VOC

Emission

Reduction (tpy) a Total Annual

Cost of Control ($/yr) b Cost

Effectiveness ($/ton)

A 1 0.95 19,580 20,611

B 2 1.9 19,580 10,305

C 3 2.85 19,580 6,870

D 4 3.8 19,580 5,153

E 5 4.75 19,580 4,122

F 6 5.7 19,580 3,435

a Calculated as 95 percent of uncontrolled VOC Emissions.

b Total annual cost for one combustion device. Calculated in previous memorandum (see

Reference 1 ).

and condensate storage vessels. These impacts were calculated on a per

- combustion device basis for each of the regulatory options presented in Table 1.

Table 2 presents inputs used to calculate these secondary impacts. As shown in Table 2, the information necessary to calculate the NO X , CO, CO 2 , and methane emission s includes:

• Condensate and oil emission factors (tpy/bbl/day)

• Heating value of the oil and condensate vapor stream (British thermal units/standard cubic feet, Btu/scf);

• Methane heating value (Btu/scf)

• Gas

- to

- Oil Ratio (GOR) of the oil and condensate (scf per barrel, scf/bbl);

• NO X Emission factor (pounds per million Btu, lb/MMBtu);

• CO Emission factor (lb/MMBtu);

• CO 2 Emission factor (lb/MMBtu);

• Pilot light gas usage (scf/hr)

• Methane to VOC ratio

The secondary emission impacts are shown in Table 3 for each of the defined regulatory options, using the inputs from Table 2. The associated liquid throughput for each oil and condensate storage vessel was calculated using the uncontrolled VOC emissions associated with each regulatory option and the corresponding o il or condensate emission factor. The associated GOR was then used to calculate the vapor stream flow rate. This flow rate was then converted to heat input using the heat value of oil or condensate vapor stream, as appropriate. Emissions of NO X , CO and CO 2 were then calculated using the emission factors identified in Table 2 and the heating input calculated for the oil or condensate vapor stream.

Pilot light emissions were calculated using the same NO X , CO, and CO 2 emission factors and a pilot light usage value of 70 scf/hr from Partner Reported Opportunities associated with the3 Natural Gas STAR program. As shown in Table 3, the NO X and CO emissions associated with combustion of the pilot light are an order of magnitude higher than the NO X and CO emissions

associated with combustion of the VOC stream.

Table 2. Inputs Used to Calculate Secondary Impacts

Variable Value Units Reference

Condensate VOC emission factor 2.09 tpy VOC/(bbl/day) 2

Oil VOC emission factor 0.214 tpy VOC/(bbl/day) 2 Heating value of vapor stream from condensate storage vessel 2,166 Btu/scf 3

Heating value of vapor stream from oil storage vessel 1,806 Btu/scf 3

Heating value of methane 1,011 Btu/scf

Condensate GOR 173 scf/bbl 3 3

Oil GOR 18.9 scf/bbl 3 3

NO X emission factor 0.068 lb NO X /MMBtu 4

CO emission factor 0.37 lb CO/MMBtu 4

CO 2 emission factor 60 kg CO 2 /MMBtu 5 Pilot light natural gas usage 70 scf/hr 6

Methane to VOC ratio 0.207 3

Figure s 1 and 2 illustrate the changes in cost effectiveness and secondary impacts for each of the regulatory options for condensate storage vessels and Figures 3 and 4 present these options for oil storage vessels. Figures 1 and 3 present how cost effectiveness, VOC, NO X and CO change with each regulatory option for condensate and oil storage vessels, respectively. Figu res 2 and 4 show the cost effectiveness, VOC and CO 2 emissions associated with condensate and oil storage vessels, respectively. Pilot light emissions are constant and were not included in these figures. There is a significant increase in cost effectivenes s values the lower the emissions of the uncontrolled storage vessel.4 Table 3. Secondary Emission Impacts Associated with Combustion of VOC Emissions from Storage Vessels

Regulatory

Option Uncontrolled

VOC

Emissions (tpy) Associated Throughput

(bbl/day) a Vapor

Flowrate

from Storage

Vessel (scf/day) b Heating Input from Storage

Vessel (MMBtu/hr) c Emissions Associated with Combustion of Vapor Stream (tpy) d Emissions Associated with Pilot Light Operat i on (tpy) e Total Emissions from

Combustion of Pilot Light and Vapor Stream (tpy) f

NO X CO CO 2 NO X CO CO 2 NO X CO CO 2 CONDENSATE STORAGE VESSELS

A 1 0.478 82.4 0.00744 0.00221 0.0121 4.31 0.021 1 0.115 41.0 0.0233 0.127 45.3

B 2 0.956 165 0.01487 0.00443 0.0241 8.62 0.0211 0.115 41.0 0.0255 0.139 49.6

C 3 1.43 247 0.0223 0.00664 0.0362 12.9 0.0211 0.115 41.0 0.0277 0.151 53.9

D 4 1.91 330 0.0297 0.00886 0.0482 17.2 0.0211 0.115 41.0 0.0299 0.163 58.2

E 5 2.39 412 0.0372 0.0111 0.0603 21.5 0.0211 0.115 41.0 0.0322 0.175 62.5

F 6 2.87 495 0.0446 0.0133 0.0723 25.9 0.0211 0.115 41.0 0.0344 0.187 66.9

OIL STORAGE VESSELS

A 1 4.66 88.0 0.00662 0.00197 0.0107 3.84 0.0211 0.115 41.0 0.0231 0.125 44.8

B 2 9.33 176 0.0133 0.00395 0.0215 7.68 0.0211 0.115 41.0 0.0250 0.136 48.7

C 3 14.0 264 0.0199 0.00592 0.0322 11.5 0.0211 0.115 41.0 0.0270 0.147 52.5

D 4 18.7 352 0.0265 0.00789 0.0429 15.4 0.0211 0.115 41.0 0.0290 0.158 56.4

E 5 23.3 440 0.0331 0.00986 0.0537 19.2 0.0211 0.115 41.0 0.0309 0.168 60.2

F 6 28.0 528 0.0397 0.0118 0.0644 23.0 0.0211 0.115 41.0 0.0329 0.179 64.0 Note: Slight differences are due to rounding.

a Associated throughput (bbl/day) c alculated using VOC emission factor of 2.09 tpy/bbl condensate/day or 0.214 tpy/bbl oil/day (see Table 2) and uncontrolled VOC emissio ns (tpy).

b Vapor flowrate (scf/day) calculated using gas

- to

- oil ratio of 172.5 scf/bbl of condensate or 18.9 scf/bbl of oil (see Table 2) and associated throughput (bbl/day).

c Heating input from storage vessel (MMBtu/hr) calculated using heating value of vapor stream of 2,166 Btu/scf of condensate va por or 1,806 Btu/scf of oil vapor (see Table 2) and vapor flowrate from storage storage vessel (scf/day) and 24 hours/day.

d Emissions associated with combustion of vapor stream (tpy) calculated using emission factors for NO X (0.068 lb/MMBtu), CO (0.37 lb/MMBtu), and CO 2 (60 kg/MMBtu) and

heati ng input from the storage vessel.

e Emissions associated with pilot light operation calculated using average annual pilot light gas usage estimate from Natural G as STAR partners of 70 scf/hr and emission factors

for NO X (0.068 lb/MMBtu), CO (0.37 lb/MMBtu) , and CO 2 (60 kg/MMBtu).

f Emissions associated with combustion of vapor stream plus the emissions associated with the pilot light operation.5 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

1 2 3 4 5 6Emissions after Control (tpy)Cost Effectiveness ($/ton VOC)

Uncontrolled VOC Emissions (tpy) Figure 1. Cost Effectiveness and NO X , CO, and VOC Emissions Associated with Controlling VOC Emissions from Condensate Storage Vessels

Cost Effectiveness ($/ton)

VOC Emissions after Control (tpy)

NOX Emissions Assoc with Controlling VOC (tpy)

CO Emissions Assoc with Controlling VOC (tpy)

Methane Emissions After Control (tpy)

0.00 5.00 10.00 15.00 20.00 25.00 30.00

0 5,000 10,000 15,000 20,000 25,000 30,000

1 2 3 4 5 6Emissions After Control (tpy)Cost Effectiveness ($/ton VOC)

Uncontrolled VOC Emissions (tpy) Figure 2. Cost Effectiveness and CO 2 and VOC Emissions Associated with Controlling VOC Emissions from Condensate Storage Vessels

Cost Effectiveness ($/ton)

CO2 Emissions Assoc with Controlling VOC (tpy)

VOC Emissions after Control (tpy)6 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

1 2 3 4 5 6Emissions after Control (tpy)Cost Effectiveness ($/ton VOC)

Uncontrolled VOC Emissions (tpy) Figure 3. Cost Effectiveness and NO X , CO and VOC Emissions Associated with Controlling VOC Emissions from Oil Storage Vessels

Cost Effectiveness ($/ton)

VOC Emissions after Control (tpy)

NOX Emissions Assoc with Controlling VOC (tpy)

CO Emissions Assoc with Controlling VOC (tpy)

Methane Emissions After Control (tpy)

0.00 5.00 10.00 15.00 20.00 25.00 30.00

0 5,000 10,000 15,000 20,000 25,000 30,000

1 2 3 4 5 6Emissions After Control (tpy)Cost Effectiveness ($/ton VOC)

Uncontrolled VOC Emissions (tpy) Figure 4. Cost Effectiveness and CO 2 and VOC Emissions Associated with Controlling VOC Emissions from Oil Storage Vessels

Cost Effectiveness ($/ton)

CO2 Emissions Assoc with Controlling VOC (tpy)

VOC Emissions after Control (tpy)7 References

1

. EC/R Incorporated, et al. Oil and Natural Gas Sector: Standards of Performance for

Crude Oil and Natural Gas Production, Transmission, and Distribution. Background Supplemental Technical Support Document for the Final New Source Perfor mance Standards. April 2012. EPA Docket No. EPA

- HQ

- OAR

- 2010

- 0505

- 4550.

2

. Memorandum from Brown, H., EC/R Incorporated to Moore, B., US Environmental Protection Agency OAQPS/SPPD/FIG. Revised Analysis to Determine the Number of Storage Vessels Projected to be Subject to New Source Performance Standards for the Oil and Natural Gas Sector. April 8, 2013. EPA Docket Number: EPA

- HQ

- OAR

- 2010

- 0505

- 4597.

3

. EC/R Incorporated. Oil and Natural Gas Sector: Standards of Performance for Crude Oil

and Natural Gas Production, Transmission, and Distribution. Technical Support Document for Proposed Standards. Prepared for U.S. Environmental Protection Agency. Research Triangle Park, NC. Appendix A. Publication No. EPA

- 453/R

- 11

- 0012. July

2011. Docket No. EPA

- HQ

- OAR

- 20 10

- 0505

- 0045.

4

. U.S. Environmental Protection Agency. Office of Air Quality Planning and Standards.

AP

- 42, Fifth Edition, Volume I, Chapter 13.5. Industrial Flares. 1991

5

. 40 CFR part 98, subpart Y, Equation Y

- 2.

6

. U.S. Environmental Protection Agency. PRO Fact Sheet No. 903. Partner Reported Opporunities for Reducing Methane Emissions: Install Electronic Flare Ignition Devices.

2011. Available on the Internet at: http://www.epa.gov/gasstar/documents/installelectronicflareignitiondevices.pdf