# E C 

# / R Incorporated Providing Environmental Technical Support Since 1989

1 MEMORANDUM

TO: Bruce Moore

, EPA/OAQPS/SPPD/CCG

FROM: Bradley Nelson, EC/R, Inc.

DATE: January 5, 2012

SUBJECT: Summary of the January 5, 20 1 2 M eeting with the Gas Processors Association

(GPA) and the U.S. Environmental Protection Agency to D iscuss the Proposed

Oil & Gas NSPS/NESHAP

I. INTRODUCTION

The Gas Processors Association (GPA) requested this meeting with EPA to discuss theis

comments and ask questions on the proposed Oil and Gas NSPS (40 CFR Part 60, subparts KKK, LLL, and OOOO) and NESHAP (40 CFR Part 63, subpart s HH and HHH ). This meeting summary will be available in the docket for this rulemaking (Docket ID No. EPA

- HQ

- OAR

20 1 0

- 0 505 ). The proposed rule for the oil and natural gas sector wa s published in the Federal Register on August 23, 20 11 (7 6 FR 52738 ).

II. ATTENDEES

The following is a list of participants in the meeting.

U.S. Environmental Protection Agency

Bruce Moore Greg Nizich Alex Macpherson Hillary Ward (by phone)

GPA and Member Organizations Molly Wentworth, Crestwood Jeff Adams, BP Grover Campbell, Chesapeake Energy Quentin Mendenhall, DPC Doug Jordan, SWE Lynn Reed, ONEOK Christi Trontell, Markwest (by phone) Tim Helbig, ONEOK (by phone)2

Jessica Kaiser (by phone) Lance Lodes, OG&E (by phone) Bill Grygar, Anadarko (by phone)

Klent Lasley, ONEOK (by phone) Andrea McMillen, PVR (by phone) Mitch Anderson, ONEOK (by phone)

EC/R Incorporated Bradley Nelson (by phone)

III. SUMMARY OF DISCUSSION

Bruce Moore opened the meeting by stating that the comment period is currently over and EPA

could answer clarifying questions from the group, but could not provide any responses to comments on the proposed rules.

GPA stated that one of their main concerns was the regulation of natural gas in the proposed rules. They noted that the def inition for modification includes a reference to the change in natural gas emissions and believes that this should be omitted from subpart OOOO. They stated

that the VOC content from gas streams varies widely and that the rule should only apply to gas

str eams with a VOC content greater than 10% by weight

. They also stated that this VOC content should apply to all sources covered under the NSPS.

GPA asked if the comment summary on the proposed rules was completed. EPA responded that

the individual commen ts were still being processed, but the industry and environmental group comments had been sorted into summary bins and that a list of specific issues would be completed by early next week. GPA asked if they could see a copy of the comment outline.

EPA be lieves that a copy of the comment can be provided to the group. GPA asked if the schedule for completing the final rule was still the same. EPA responded that a schedule that

included a 30

- day Office of Management and Budget (OMB) had been produced; howe ver EPA management believes that a 45

- day OMB review would be needed. Therefore, Bruce Moore is currently working on a revised schedule that includes a 45

- day OMB review. EPA also added that an internal management review of the final rule would take plac e in a couple of weeks.

The next topic of discussion was the complexity of the storage vessel requirements. GPA believes that this section needs to be rewritten to remove references to other storage vessel requirements. They believe i t is not appropriat e to use MACT standards, monitoring, recordkeeping and reporting requirements for NSPS sources. The group also believes that the monitoring and testing requirements for the NSPS should be reserved for major sources and not the small, remot e, unmanned faci lities

. They stated that measurement of throughput is difficult and believe that p rovisions should be provided to use Lease Automatic Custody Transfer (LACT) meter, crude oil / condensate truck load out tickets or tank strappings or metering to
determine whether a storage tank is exempt from the NSPS Subpart OOOO standards. The y also

believe that the efficiency of a vapor recovery unit (VRU) that is used as a control device should be determined by the annual overall efficiency considering both run time an d allowed downtime3

for maintenance , and that a VRU that is part of a process should not be considered a control device, and therefore not subject to testing and monitoring.

The next topic of discussion was the proposed leak detection and repair requirements in the proposed NSPS. GPA believes that the proposed 500 ppm leak standard for valves should be revised to 10,000 ppm and connectors should continue to be monitored by vi sual, audible and olfactory methods. They stated that the subpart VVa LDAR program was designed for the synthetic organic chemical manufacturing industry and does not work for the oil and gas industry. They believe the 500 ppm leak definition does not pr ovide additional environmental benefit and significantly increases the cost of maintenance. One member noted that they use an outside contractor to perform their LDAR and that the addition of monitoring connectors would double the cost of the monitoring.

The next topic concerned the “commenced construction,” and related provisions of the NSPS

. GPA believes that EPA should use the subpart A, 60.14 definition for reconstruction to ensure

that performance standards do not apply to compressors that are merely being relocated; and

avoid confusion over whether pneumatic controllers are “reconstructed.”

The notification, monitoring, recordkeeping, performance testing and reporting requirements for each affected facility in the proposed NSPS Subpart OOOO was the next topic of discussion. GPA believes these requirements are onerous for small sources, especially the requirements for pneumatic controllers. GPA believes that EPA should allow all notifications required during a given year to be combined into a single annual report that would include all of the affected facilities installed during that reporting period. GPA also believes that the c ompliance dates for

certain storage vessels and pneumatic controllers should be extended. EPA stated that they we re looking at other NSPS rules and in discussions with the Office of General Counsel (OGC) about extending some of these compliance dates in the NSPS.

Storage vessels were the next topic of discussion. GPA stated that there is currently a 24

- week

wait ti me for receiving VRUs and a 40

- week wait time for receiving combustors for storage vessels. They believe this wait time will increase once the final rule is promulgated and they will not be able to achieve compliance. They also noted that the proposed ru le requires the use of propene for testing the combustors and currently propone is only available from Louisiana, which may cause a shortage. In addition, GPA stated that the proposed rule assumed 600 storage vessels would need to be controlled, but they estimated that as many as 14,000 storage vessels

would be affected.

GPA asked in the case of a processing plant that needed to replace a pneumatic controller with

an air

- assisted pneumatic controller, would they be able be able to have additional time to replace all of the pneumatic controllers with air

- assisted pneumatic controllers. They believe it would take roughly 3 years to complete the transition. EPA asked why it would take 3 years to replace all of the pneumatic controllers. GPA responded that budgeting, ordering, and replacement of individual lines would require this amount of time. EPA believes that the transition time would be shorter, approximately 2 years.4

The next topic was pneumatic controllers. GPA believes that a pneumatic controller affected facility should be defined as a single continuous bleed gas driven pneumatic controller located at and part of a natural gas processing plant, or a continuous high bleed pneumatic controller located upstream of a natural gas processing plant or p oint of custody transfer (excluding pneumatic controllers located along gathering pipelines). GPA asked if snap acting controllers are included as an affected source. EPA responded that snap acting controllers were not included in the proposed rule.

GPA noted that the proposed rule did not include a 180

- day provisional period for the establishment of and LDAR program. GPA believes that e xisting “process units” that become subject to the NSPS Subpart OOOO LDAR requirements should have 180 days to make the transition, as is allowed in NSPS Subpart KKK. EPA stated the omission of this provision was

not intentional and would be included in the final rule.

GPA believes that EPA should maintain the exemption for startup, shutdown and malfunctions (SSM) in NSP S . EPA stated that the affirmative defense language in the proposed rule came from the Electric Utility rule and that EPA was adding language to all rules. GPA believes that EPA should require work practices and require documentation instead of the affir mative defense. They also noted that EPA did not include the malfunction costs or affirmative defense reporting costs in the proposed rule.

GPA asked if any changes had been made to the proposed rule. EPA responded that decisions

had been made at this t ime. However, EPA did note that the proposed rule is regulating VOC and not methane. Also, for reporting, EPA does not intend to require reporting of all pneumatic controllers, only pneumatic controllers installed during the reporting period.