eogresources

May 30,2012

VIA HAND DELIVERY

Mr. Eric Wortman

U.S. Environmental Protection Agency-Region 8

Mail Code 8P-AR

1595 Wynkoop Street

Denver, Colorado 80202-1129

'I""M""'Ay'--"F-"-C.JiL 20'=2

8P AR

EOG Resources, Inc.

600 Seventeenth StrNt

Suite fOOON

Denver; CO 80202

Main: 303-572·9000

Fax: 303-824-5400

Re: EGG Resources, Inc.'s Voluntary Response to Request for Information Pertaining to Emissions

Control Equipment at Oil and Gas Production Faci ities on the Fort Berthold Indian Reservation

Dear Mr. Wortman:

EOG Resources, Inc. ("EOG") voluntarily responds to the May 16, 2012, infonnation request

sent by Mr. Carl Daly, Director, Air Program, EP!A. Region 8 ("EPA"), concerning EGG's

emissions control equipment at oil and gas produdion facilities on the Fort Berthold Indian

Reservation ("FBIR"). EOG respectfully submits that due to the 14-day time constraint set forth

in EPA's request, components of the data requesled have been difficult to ascertain with

precision. I

Nonetheless, EOG has acted diligently to compile anq review available data, and provide its best

estimates as to other data, in order to comply with EPA's request in good faith. I, David Long,

EOG Environmental Manager, have signed the State~1 ent of Certification, Attachment A to this

response, acknowledging that EOG personnel have w, rked diligently to obtain available past and

current information, and that such information i true, accurate, and complete based on

information known at this time. Regarding responses , where it was necessary for EOG to

estimate costs, such estimations were made in good faith, based on relevant data and good faith

assumptions.

EOG submits this information, which is limited t~ its operations in the FBIR, in order to

voluntarily provide infonnation for use in EPA's eXPf.cted rulemaking regarding air emissions at

oil and gas production facilities on the FBIR. Such rttlemaking is anticipated to be in the form of

a Federal Implementation Plan ("FIP") for oil and ~s exploration and production facilities on

the FBIR. As such, EOG does not intend for this inf0rmation to apply to or be representative of

any of EOG's other exploration and production facil~ties located throughout the nation, or to be

used for purposes other than EPA's FIP rulemaking.

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EOG asserts no business confidentiality aim as to any of the information it is providing in this

response. EOG's responses to the numbered EPA requests are as follows:

J. Please provide tile average J~t incurred to develop a .lytJIlletic minor permit

application for an oil and gas exploration and production facility on tire FBIR..

EOG calculates that the average cost incuLed to develop a synthetic minor pennit application for

an oil and gas exploration and production facility on the FBIR is approximately $8,000 to

$10,000 in capital costs, plus annual oper!tional costs of approximately $5,000 for an anticipated

duration of five years.

2. Plea!J'e provide tire average CO•..,·t incurred on an annual basis for each ofthe following

types ofcontrol equipment:

a. A pitflare capable ofachieving 90% VOC destruction efficiency.

EOG estimates the average annualized Cj1st basis for a pit flare capable of achieving 90% VOC

destruction efficiency to be approximatel $1,250 to $1,300, over a 20-year life expectancy.

b. A utility flare that is manfacturer certifiedfor 98% VOC destruction efficiency

or compliant with the requirement8 for s ch flares at 40 CFR 60.18(b).

EOG estimates the average annualized c st basis for a utility flare that is manufacturer certified

for 98% VOC destruction efficiency to ~e approximately $2,700 to $3,200, over a 10·year life

expectancy. J

c. An enclosed combu..,·tor that is manufacturer certifiedfor 98% VOC destruction

efficiency.

EOG estimates the average annualized cost basis for an enclosed combustor that is manufacturer

certified for 98% VOC destruction efficibncy to be approximately $3,400 to $4,000, over a 10-

year life expectancy,

d. An auto-ignition sy!t;tem tlrat includes, an electronically controlled ignition

device, continuous recording device, mal/unction alarm, and remote IIotijication !t,y...,'tem to

ensure the continued presence ofaPilotrlame during operation.

EOG estimates the average annualized st basis for an auto-ignition system that includes, an

electronically controlled ignition device.lcontinuous recording device, malfunction alarm, and

remote notification system to ensure the ontinued presence of a pilot flame during operation to

be approximately $2,200, over a 10 to 20tear life expectancy.

e. A continuous pilot flame ...,y.\'tem that includes a thermocouple, continuou...,·

recording device malfunction alarm, UlJd remote Iwtification system to ensure the continued

presence ofa pilotflame.

EOG estimates the average annualized cost basis for a continuous pilot flame system that

includes a thennocouple, continuous recording device malfunction alann, and remote

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notification system to ensure the continued presence f a pilot flame to be approximately $2,200,

over a 10 to 20-year life expectancy.

f. A vapor recovery ~Y!J'tem (VRU) ftJr capture and recovery o/storage tank ga...;es.

EOG estimates the average annualized cost basis for1vapor recovery system (VRU) for capture

and recovery of storage tank gases to be approximatbly $19,000 to $34,000, over a 5 year lifeexpectancy.

3. Please describe the source of the data and the methodology used in calculating items

2(a) through 2(/). The average annual C(J~·t ;,rcurrerl should include, but is not limited to, the

following list 0/cost elements:

a. The total capital investmellt (Tel) co t. which includes but is not limited to, tire

capital cost for the primary) control device, auxiliar equipment and im·trumelltatiOll, piping,

performance te~·ting, as.\"Ociated uti!itie.'t, engitrerring and sy.\'tem design, freight. site

preparation, foundation, COIl.\,truction and field expem'e~', illstallation, etc.;

I

b. Tire operatioll and mailltenance (O&M) cost (equipment, pilot/uel, etc.);

c. Tire a",malized labor costs suclr ls salary and benefits associated witlr

monitoringlrecordkeepinglreporting requirements a),d O&M activities; and

d. Tire a",maUzed non-labor costs su IIJ as office supplies, vehicle cO.\'ts, and

information technology.

from accumulating.

Cost data described herein is derived from multiple urces, including invoices, rate sheets, and

estimated cost of field services, site prep and enginee+ng. It was not possible to ascertain certain

specific items of cost data due to the time constrains presented by this expedited request.

Nonetheless, EOG has estimated in good faith certai1 ofthese costs based on general knowledge

of its FBlR operations and such estimates are not intended to be used for any purpose other than

establishing a range of likely costs incurred for each trre of control equipment in this region. As

such, actual full costing of control equipment could bel more or less than the ranges provided for

a given piece of control equipment in the FBIR. Specifically, particularly given the time

constraints, EOG was not able to precisely quantify expenses such as labor and non-labor costs,

including office supplies, vehicle costs, and infonnatron technology-inclusion of such costs in

the total annualized O&M expenses is based on assumed or estimated prices and salaries.

a. A pitflare, per No. 2(0).

a. total capital investment: approximately $5,000 to $10,000.

b-d. annualized O&M, labor costs, and non-labor cos s combined: approximately $1,000.

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b. A utility flare, per No. 2(b).

a. total capital investment: approximately $15,000 to $20,000, including associated components

necessary for operation.

b-d. annualized O&M, labor costs, and n n-Iabor costs combined: approximately $1,200.

c. An enclo.'ied combustor, p r No. 2(c).

a. total capital investment: approximatel $19,000 to $25,000.

b-d. annualized O&M, labor costs, and nJn-labor costs combined: approximately $1 ,500.

d. An auto-ignition system,p r No. 2(d).

a. total capital investment approximatcl $12,000, including associated components necessary

for system operation.

b-d. annualized O&M, labor costs, and n n-Iabor costs combined: approximately $1,000.

e. A continuous pilotflame ystem, per No. 2(e).

a. total capital investment: approximatel $12,000, including associated components necessary

for system operation.

b-d. annualized O&M. labor costs. and n n-Iabor costs combined: approximately S1.000.

f. A vapor recovery ~ystem (VRU), per No. 2(j).

a. total capital investment: approximatel1s70,000 to $120,000.

b-d. annualized O&M, labor costs. an non-labor costs combined:

$10,000.

approximately $5,000 to

4. Please each piece of equip",en I identified ill 2(a) through 2(j), please provide the

expected life for each component. AllY fosts associated with ",a;,rtellallce over the life ofthe

ullit should be allllllalized alld included as part ofthe annual O&M costs reported.

a. A pitflare, per No. 2(0).

Expected life is 20 year.;.

b. A utility flare, per No. 2(b .

Expected life is 10 years.

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c. An enclosed combustor, per No. 2(c).

Expected life is 10 years,

d. An auto-ignition ,\Y!J'tem, per No. 2(d).

Expected life is 10-20 years.

e. A contimlOus pilotflame !Jystem, per No. 2(e).

Expected life is 10-20 years.

f. A vapor recovery system (VRU), per No. 2(j).

Expected life is 5 years.

5. Please provide the average cost associated with the !J'ale ofrecoverable product from a

VRU.

Due to the wide range of unit cost and the variability of commodity pricing, establishing an

economic analysis of installation ofa VRU as facility1equipment is not feasible at this time.

Please do not hesitate to contact me at 303-262-9448 if you have any questions or comments

about the above responses.

Sincerely,

c_r__~",- David Long

Environmental Manager, EOG Resources

cc: file

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ttachment A

STATEME1TOFCERTIFICATION

I certify under penalty of law that I Have personally examined and am familiar with the

~nfonn~tion submitt~ in this doc~~entl and tha~, based o~ my inquiry ?f those. indi.viduals

Immediately responsible for obtammg ~nfonnat1on, I beheve that the mfonnatlon IS true,

accurate, and complete based on availabl~ infonnation known at this time. I am aware that there

are significant penalties for submitting false infonnation, including the possibility of fine or

imprisonment.

David Long

Name

Environmental Manager, EOG Resources, Inc.

Title

May 30,2012

Date

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