1 To: Brian Shrager, EPA/SPPD From: Amanda Singleton, ERG Date: August 2, 2010 Re: Minutes of Oil and Gas Industry Meeting – July 21 st , 2010 Meeting Attendees Clay Freeber, Chevron Charlie Bennett, Marathon Glenn England, Environ Douglas VanPelt, Exxon Mobil Norm Morrow, Fresh Air Consulting Matt Todd, API Hector Ayala, Exxon Mobil Jack McClure, JLM Group Bob Hermanson, BP America Matt Hodges, Valero Energy Jan Laughlin, Conoco Phillips Shari Keller, Shell David Friedman, NPRA Bob Wayland, Mary Johnson, Brian Shrager, Brenda Shine, USEPA Amanda Singleton, ERG Meeting Themes

 Both gaseous fuel categories shouldhave a work practice standard  Optimizing combustion, instead of minimizing CO levels, should be the goal of tune-up work practice standards  Achievability of emission limits and demonstration of controls on gas-fired units  Facility-wide energy audit is not justified Emissions from Gas 1 and Gas 2 Subcategories Glenn England plotted the CO emissions from Gas 1 and Gas 2 boilers and concluded that emissions of CO from these two gas subcategories are similar with the exception of some process gas numbers that appear to either be outliers or representative of where a un it is operating on a downcycle mode or at increased levels of excess air. Mr. England also plotted emissions of organic HAP from various gaseous fuel blends and operating conditions at refineries and he indicated that emissions of organic HA Ps are near detection limits except under certain operating conditions, such as startup and shutdown, or lower loads. Fuel characteristics did not affect emissions of organic HAP. Mr. England presented that many gas fuels do not have any significant quantities of Hg or chlorine present in the fuel that would result in emissions of Hg or HCl emissions . He requested that if limits were to be established for2 gaseous fuels that a fuel analysis based standard, in lieu of an outlet stack test standard, would be the more appropriate method of limiting emissions of these two pollutants. Given the similarity of the emissions profiles from gas 1 and gas 2 subcategories Mr. England requested that both gaseous fuel categories be subj ect to work practice standards. Combustion Curves and Relationship between CO and NOx Hector Ayala presented a combustion curve that plotted CO and NOx emissions against excess air levels. The curve showed that very low CO emissions require a level of ex cess air that results in elev ated NOx emissions and lower than optimal combustion efficiency. A side effect of very low CO limits for gas units would be higher emissions of NOx and a lower the efficiency of th e boiler, thereby increasing CO2 emissions and emissions of other HAP as a result of increased fuel use. Instead of having the goal of the tune-up be to minimize CO emissions, the goal of the tune-up should be to tune the boiler to the appropriate maximum operating efficiency range, which is typically between 2 and 4 percent oxygen for units at petroleum refineries. It was noted that the optimal oxygen levels will vary depending on the unit design, and he added that there is typically a margin of error on how much excess air is re quired to achieve maximum operating efficiency in order to avoid operational safety hazards at the boiler. Achievability of Emission Limits/DemonstratedControl Technologies at Gas Fired Units Mr. England presented a flow diagram of a natural draft process heater and the sequenceof anticipated controls necessary to meet the alternative emi ssion limits proposed for gas-fired combus tion units. He noted that the retrofit factors used for refinery units were too low considering th e space constraints at refineri es. Mr. England also noted that the series of additional controls cause significant pressure drop whic h will prevent the us e of natural draft process heaters. In these cases the natu ral draft units would need to be replacedwith forced draft units and the cost of this replacement was not considered in the impacts analysis. Mr. England also noted that there are not any gas-fired units in operation that have installed the full suite of controls. Given the low concentrations of pollutants emitted from gas units, there is no guarantee that these controls can achieve the necessary efficiencies to me et the alternative proposed emission limits. Facility-wide Energy Audit is not Justified Norm Morrow presented on the industry’s concerns with energy audits contained in the proposal:  First, the analysis assumes a one percent improvement in efficiency as a result of th e audit. Many industries have already undergone extensive energy management programs and as a result this improvement is optimistic.  Second, the cost of the audit is closer to $100,000 per facility for plants in the refinery and petrochemicals sectors, which is double the costs of the audit assumed in EPA’s proposal.  Third, the audit expands beyond the source category. Industry will be providing detailed comments about the legal and precedent issues of incorporating a fac ility-wide audit to a source category MACT program.  Finally, the industry disagrees with the EnergySTAR energy management program requirement. Industry representatives noted that they would be pr oviding EPA with detailed written comments and data to support their claims. Attachment 1 : Slides presented during meeting.1 

# Gas Fuels: HAPs Are Below or Near Detection 

# Limits for Wide Range of Fuels, Normal Conditions

Source: England et al., Chemosphere 2001 Pilot - scale2 

# ICR Data for Gas Fuels (not metal furnaces)3 

# CO Levels Are Similar Among HC Fuels

Source: EPA ICR Database,Version 5)4 

# A work practice for gas fuels is appropriate

• Organic HAP emissions from gas fuels are below or near detection 

### limits over a wide range of normal, good combustion conditions • Emissions from natural gas, refinery gas, petrochemical and process gas fuels are similar on a Btu basis • Exceptions are system rather than fuel related • Good combustion achieved via a work practice standard optimizes systems for lowest emissions and energy consumption commensurate with safe operation 

### • Gas fuels with no significant fuel - based HAP precursors (e.g., Cl , Hg) have no significant metallic/inorganic HAP emissions • EPA could establish de minimus standards for fuel - based HAP precursors5 

### • Maintaining low CO limits for gas - fired units will lead to non - optimum operation/efficiency and will increase other pollutants • CO Limit will have an adverse effect on NOx emissions • CO Limit will reduce energy efficiency and subsequently increase CO 2 emissions 

### • Requiring 1ppm CO is Technically Infeasible while maintaining NOx emissions targets, and operating efficiently • Low CO emissions are favored by high temperature, high O 2 , rapid mixing and long residence time • NOx is an undesirable byproduct favored by high temperatures, high O 2 , and rapid mixing (via “thermal”, “prompt” and “fuel” NOx mechanisms) 

### • Emissions control is a trade - off between NOx and CO • Minimum CO occurs at maximum NOx generation • Leads to higher NOx formation, which is a precursor to smog 

# Impact of CO Limit on Other Emissions6 

# CO, NOx as a Function of O 27 

### • Attempts to Meet CO Limit will Reduce Energy Efficiency • Reducing CO to extremely low levels will require an increase in excess air levels which will reduce efficiency • This will increase the amount of fuel that must be fired, therefore increasing the total mass of other pollutants (HAPs, NOx, SOx, PM, etc) • Efforts to maximize efficiency and NOx reduction have been accomplished by reducing excess air levels until the point where CO emissions begin to increase • Operation at levels where CO ranges from 100 - 400ppm provides the most efficient balance between stack heat losses and lost potential energy from incomplete CO oxidation • Thermal efficiency is close to optimized at current NOx, CO levels (see graph) 

# Impact of CO Limit on Energy Efficiency8 

### • During SSM periods, boilers and process heaters operate at off design conditions with low firing rates and high excess air levels • At these low loads, mixing energy of the fuel and air in the combustion process is much lower. CO will increase during this operation • For multiple - burner boilers NFPA code does not allow airflow < 25% • Good operating practices require equipment be gradually warmed - up to operating temperature in order to prevent thermal damage in mechanical components • OEMs give guidance on heat - up rates and require it for equipment warranty • Limit life of units due to a need to increase start - up rate (and stresses) • Attempting to meet 1ppm CO during SSM periods would discourage proper start - up/shutdown of equipment – i.e. operators would quickly ramp up boiler to minimize off - design operation. This is not desirable. • Majority of combustion incidents (near - misses, explosions) have occurred during SSM periods 

# Impact of CO Limit on Safe Operations9 

### • Industry typically operates 

### fired equipment with margin on excess air (O 2 

### ) • To better handle rapid boiler steam load changes when demanded by users and when impacted by inclement weather 

### • Important for maintaining 

### emissions and combustion stability 

# Operating with Safety Margin10 

# CO vs. HAP During Constant Load Tests11 

# Gas - Fired Process Heater (Natural Draft)

• Natural draft • No forced draft or induced draft fans • Combustion air induced by stack gas buoyancy and fuel pressure 

### • Wide variety of furnace and burner 

### configurations • Designed for specific heat duty • Furnace geometry and size • Bottom - fired, side - fired, down - fired • ~4 - 100+ individual burners • Exhaust gas temperature ~500 - 700 F 

### • 1000’s of such units in petroleum 

### refineries & petrochemical plants12 

# Process Heater (Natural Draft) on MACT

• CO: combustion controls & oxidation catalyst • Hg, D/F & PM: ACI + FF • HCl : packed bed wet gas scrubber • Conversion to balanced draft required to offset pressure drop
Technically infeasible because:  Retrofit infeasible, replacement likely  Unproven emissions reduction at low inlet concentrations  Outlet concentrations below detection limits  Increased energy, water consumption13 

# Retrofit Constraints14 

# Retrofit Constraints