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R Incorporated Providing Environmental Technical Support Since 1989

1 MEMORANDUM

TO: Melanie King, EPA OAQPS/SPPD/ESG

FROM: Bradley Nelson, EC/R, Inc.

DATE: August 28, 2009

SUBJECT: Summary of the May 20, 2009 Meeti ng in Research Triangle Park, NC with

Exterran and the U.S. Environmental Prot ection Agency to discuss the Proposed NESHAP for Existing Stationary RICE

1.0 INTRODUCTION

Exterran requested this meeting with EPA to discuss the proposed national emission standards for hazardous air polluta nts (NESHAP) for exis ting stationary reci procating internal combustion engines (RICE). Also at this meeting were represen tatives from Compressor Systems, Inc. and J-W Power Company, and thei r legal counsel from the law firm of Bracewell & Giuliani. Exterran, J-W Power, and Compressor Systems, Inc. are the three largest operators of contract compression to the U.S. oil and gas in dustry. The companies estimate that contract compression comprises approximately one-third of the compression in the oil and gas industry. This meeting summary will be available in the do cket for this rulemaking (Docket ID No. EPAHQ-OAR-2008-0708). The proposed NESHAP fo r existing stationary RI CE was published in the Federal Register on Ma rch 5, 2009 (74 FR 9698).

2.0 ATTENDEES

U.S. Environmental Protection Agency

Bob Wayland, OAQPS/SPPD/ESG Penny Lassiter, OAQPS/SPPD Jaime Pagán, OAQPS/SPPD/ESG Melanie King, OAQPS/SPPD/ESG Michael Horowitz, OGC (by phone) Larry Sorrels, OAQPS/HEID/ABCG2 Exterran

Jack Maley

Gerald Meinecke Donald Wayne

Bracewell & Giuliani

Jeff Holmstead

Rebecca Rentz

Richard Alonso

J-W Power Co.

John Dutton

Don Bizzell

Compressor Systems, Inc.

Tim Knox Gary George Levent Caglar

EC/R Incorporated

Bradley Nelson

3.0 SUMMARY OF MEETING

The companies provided a handout presentation su mmarizing the issues that they wanted to discuss with EPA. A copy of the presentation is included in Attachment 1 of these meeting

minutes.

The first issue discussed was the recommenda tion for a rural sub category for existing rural spark ignition (SI) RICE less than 500 HP. The repres entatives from the contract compression companies stated that rural RICE are typically sma ll rich-burn engines located at unmanned sites. The representatives also stated that they believe the formaldehyde emission factors that were used by EP A to estimate formaldehyde em issions from rich -burn engines overestimate emissions by a factor of four. They noted that EP A used the same emission factor for all SI engines, which also includes lean-bur n engines. EPA asked fo r test data for these engines for inclusion into the em ission factor calculation.

The next issue that was discussed was th e startup, shutdown, and malfunction (SSM) requirements that are included in the proposed rule . The industry represen tatives at the meeting believed that there is not enough data to support the proposed SSM requirements. The3 representatives stated that their engines opera te 95-98 percent of the time, and only have 2-3 startups per month. The industry representatives also stated th at if a malfunction occurs, the engines have controls in place th at immediately shut down the engi ne. This protects the engine from further damage cause d by the malfunction.

The next issue that was discussed was management practices. The industry representatives at the meeting believed that the proposed mana gement practices that require periodic oil changes and spark plug replacements ar e not appropriate for th eir engines. Industry was of the opinion that because their engines operate continuously, the proposed management practices would increase maintena nce costs without providing any environmental benefit. In addition, the industry representatives stated they already have a strict management practices program in place to protect their investments.

The next issue that was discussed was the control costs estimates that EPA used to estimate the cost of the proposed rule. The industry representatives present at the meeting believed that the capital cost of non-selective cat alytic reduction for smaller engines is too high and can provide specific examples to show this . Exterran estimated the cost per ton of HAP reduced to be greater than $50,000 for rich-burn engines between 175 and 299 HP. Industry also believed that costs for perfor ming compliance tests were not included in the annual cost

calculation.

The industry representatives asked EPA if th ere was a chance of extending the deadline for issuing the final rule. Indus try stated they will need additi onal time to gather test data, especially data for the SSM requirements. EPA poi nted out that it may be difficult to extend the

deadline for the final rule and asked the representatives how much data could be provided between now and October 1, 2009. The representa tives responded that they can provide some data, but will need additional time to gather da ta for SSM. EPA asked the group to point out the data deficiencies in their comments, and provide an estimate of the time required to gather

additional test data to ad dress these deficiencies.4 Attachment 1 Handout Provided by Exterran at Meeting with EPA May 20, 2009