11/2/2009



## Support for U se of Management Practices in the

National Emission Standards for Hazardo us Air

Pollutants Standards for Reciprocat ing Internal Combustion Engines at Area Sources

in Rural Locations

Prepared by David W. Heinold, CCM

AECOM Enviro nment Westford, Massachusetts

Prepared on behalf of

American Petroleum Institute 1220 L Street, NW Washington, DC 20005

- 4070

November , 2009Support for Rural RICE NESHAP 1 11/1/2009 

### SUMMARY

On March 5 th , 2009 EPA proposed N ational E mission S tandards for H azardous A ir

P ollutants (NES HAP) from existing stationary R eciprocating I nternal C ombustion

E ngines (RICE) with a site rating of less than or equal to 500 brake horsepower located at major sources, existing non

- emergency engines with a site rating >500 HP at major sources, and existi ng stationary RICE of any power rating located at area sources.

The rule will have major cost consequences for the oil and gas industry, which operates RICE primarily in rural, sparsely populated areas . These operations are primarily in

twelve western states where most of America’s oil and natural gas is produced. EPA’s

cost

- benefit assessment for the proposed rule did not consider areas where exposure and

risk from hazardous air pollutants from RICE is extremely limited

. To help fill this void,

a revi ew and technical analysis have been conducted. The principal findings of this

assessment are as follows:

1. A review of the Clean Air Act confirmed that EPA has been directed to develop emission control programs for area sources of Hazardous Air Pollutants i n urban locations, but does not require or suggest similar programs for area sources in rural locations. Thus, by applying the same requirements for RICE (natural gas and diesel fired) in urban and rural areas, EPA is disregarding Congressional intent in these Clean Air Act provisions and the precedent established by EPA for other area source NESHAP, such as Subpart HH for dehydration units associated with oil and gas production, where separate requirements were established for area sources in both

urban a nd rural locations.

2. Oil and gas industry RICE are predominantly located in remote areas. Engines less than 500 HP are typically used for wellsite compression, while those greater than 500

HP are typically found at compressor stations and natural gas pro cessing plants. Major sources of HAP in the oil and gas industry mainly utilize engines greater than 750 horsepower. These major sources comprise many of the gas plants and some of the compressor stations. The rural population density of the aforemention ed twelve

states where oil and natural gas production takes place is very low, averaging only 6 residents per square mile. In contrast, the average urban population density in those states is 2,800 per square mile, about 400 times greater.

3. The chief Hazardous Air Pollutant from natural gas

- fired RICE is formaldehyde . The primary health concern from formaldehyde is cancer from prolonged inhalation. A dispersion modeling assessment accounting for the variability of meteorological conditions throughout the U.S. indicates that potentially health

- significant concentrations associated with typical RICE are limited to within a few hundred meters of the source. This analysis is highly conservative . I t does not account for the following:

a. T he limited hal f

- life of formaldehyde in air

b. A ppl ying an upper

- limit estimate of the cancer potency of formaldehydeSupport for Rural RICE NESHAP 2 11/1/2009 c. U s ing highly protective significant risk level of one chance in million

d. A ssum ing continuous operation with 70 years continuous exposure

Overla ying the rural population data onto the dispersion modeling results in an estimate that typical RICE, on average, does not result in significant formaldehyde exposure to a single individual.

4. Based on these considerations, the RICE NESHAP should follo w the precedent

established for National Emission Standards for Hazardous Air Pollutants for Source Categories from Oil and Natural Gas Production Facilities , promulgated in 2007, whereby, due to the low risk of exposure in rural areas, only sources in or near urban areas are required to apply costly controls and suitable management practices should

be utilized at area sources in rural locations.Support for Rural RICE NESHAP 3 11/1/2009 

### 1 INTRODUCTION

On March 5 th , 2009 EPA proposed the NESHAP from existing stationary RICE wit h a site rating of less than or equal to 500 HP located at major sources, existing non

emergency engines with a site rating >500 HP at major sources, and existing stationary RICE of any power rating located at area sources.

The focus of the present whit e paper is the application of NESHAP for RICE associated with crude petroleum and natural gas production, which are primarily area sources located in rural areas. For RICE, formaldehyde is the chief HAP of concern. The legal basis for establishing NESHAP for area sources stems from the 1990 Clean Air Act Amendments (CAAA), where the law requires that EPA evaluate exposure and risk in urban areas and, if warranted, develops regulatory programs to reduce risk in urban areas. The current RICE NESHAP proposa l disregards the precedent established by EPA for other area source NESHAP, such as Subpart HH for dehydration units associated with oil and gas production, where separate requirements were established for area sources

located in urban and rural locations.

This white paper is organized as follows:

Section 2 provides background regarding the Clean Air Act and its intention that

EPA address HAP risk for area sources in urban areas

. Section 3 characterizes RICE associated with oil and gas production and the rural

nature of their environment

. Section 4 characterizes the low, insignificant, level of HAP exposure typically

associated with RICE

. Section 5 provides support for the use of Management Practices on area sources

in rural locations that take into accou nt capital and operating cost and other factors as allowed by the Clean Air Act.Support for Rural RICE NESHAP 4 11/1/2009



### 2.0 AIR TOXICS REQUIREMENTS UNDER THE CLEAN AIR

ACT FOR AREA SOURCES PERTAINING TO OIL AND GAS

PRODUCTION FACILITIES

According to the C lean Air Act Amendments (CAAA) of 1990, Section 112(k) establishes the basis for EPA to regulate hazardous air pollutants (HAPs) emitted from area sources (i.e., non

- major stationary sources) in urban areas. For the purposes of this discussion in this white paper, the definition of urba n is the one used in NESHAP Subpart HH and includes both urban areas (UA) plus a 2

- mile buffer and urban clusters (UC) with a population greater than 10,000. Both UA and UC are terms defined by the U.S. Census Bureau ( http://www.census.gov/geo/www/ua/ua_2k.html ). A n urban area consists of densely settled areas with a population of at least 50,000 people and an urban cluster consists of densely settled territory with at least 2,500 people.

The int ent is to reduce health risk due to HAPs in urban areas is clearly stated in Section 112(k) (1):

Congress finds that emissions of hazardous air pollutants from area sources may individually, or in the aggregate, present significant risks to public health

in urban areas . Considering the large number of persons exposed and the

risks of carcin ogenic and other adverse health effects from hazardous air pollutants, ambient concentrations characteristic of large urban areas should

be reduced to levels substantial ly below those currently experienced. (underlining added for emphasis)

Section 112(k) (2) outlines a requirement that EPA carry out research in urban areas:

...conduct a program of research with respect to sources of hazardous air pollutants in urban are as and shall include... ambient monitoring ...analysis to characterize the sources...and...atmospheric transformation and other factors

which can elevate health risks. (underline added for emphasis)

Section 112(k) (3) outlines requirements for an EPA urban HAP em issions program for

area sources:

... comprehensive strategy to control emissions of hazardous air pollutants

from area sources in urban areas

... identify not less than 30 hazardous air pollutants which, as the result of emissions from area sources, present the greatest threat to public health in the largest number of urban areas

... As part of such strategy the Administrator shall provide for ambient monitoring and emissions modeling in urban areas as appropriate to demonstrate that the goals and objectives of th e strategy are being met. (underline added for emphasis)

Finally, Section 112(k) (4) encourages state and local air pollution agencies to also develop strategies:

... to reduce risks from emissions by area sources within a particular urban

area

. (underli ne added for emphasis)Support for Rural RICE NESHAP 5 11/1/2009

It is clear from the language of S ection 112(k) that the statutory federal mandate to develop and implement MACT standards for area sources relates to urban areas. The unstated implication is that rural area sources, due to their r elatively low rate of HAP emissions, generally do not pose a significant health risk over a wide area and, therefore, are not of concern in sparsely populated areas.

In addition to Section 112(k), CAA Section 112 ( n) (4) (B) specifically states HAP

em ission standards for oil and gas production wells and associated equipment, could be regulated as an area source category, but only for facilities in urban areas:

4) Oil and gas wells; pipeline facilities.

- (B) The Administrator shall not list oil and gas production wells (with its
associated equipment) as an area source category under subsection (c),
except that the Administrator may establish an area source category for oil

and gas production wells located in any metropolitan statistica l area or

consolidated metropolitan statistical area with a population in excess of 1
million

, if the Administrator determines that emissions of hazardous air pollutants from such wells

. (underline added for emphasis)

This paragraph clearly shows congressional intent not to cover oil and gas production equipment located at area sources in rural locations.

Another pertinent section of the CAA, Section 112(d)(5), allows EPA to establish more flexible emission control requirements for area sources. Specifically, Sec tion 112(d)(5)

indicates that an area source NESHAP can be based on Generally Available Control Technologies (GACT) rather than Maximum Achie vable Control Technology (MACT):

Alternative standard for area sources.

- With respect only to categories and

subc ategories of area sources listed pursuant to subsection (c), the

Administrator may, in lieu of the authorities provided in paragraph (2)

and subsection (f), elect to promulgate standards or requirements applicable to sources in such categories or subcategories which provide for the use of generally available control technologies or management practices by such sources to reduce emissions of hazardous air pollutants. (underline added for emphasis)

In 2007 E PA applied this section of the CAA in establishing management practice

standards for dehydrators in rural areas under NESHAP Subpart HH. Provisions of this section are equally applicable to RICE.

In summary, the conclusion derived from this review of CAA Sections 112(d)(5), 112(k),

an d 112 ( n) (4) (B), is that RICE NESHAP (both natural gas and diesel fueled) should

differentiate between area sources in urban locations and area sources in rural locations. By not allowing for more flexible emission control approaches such as management practices in rural areas, the RICE NESAP as proposed by EPA runs co unter to Congressional intent as expressed in the CAAA of 1990.Support for Rural RICE NESHAP 6 11/1/2009 

### 3.0 RICE IN OIL AND GAS PRODUCTION

According to the Regulatory Impact Analysis (RIA) for Existing Stationary Reciprocat ing Internal combustion Engines (RICE) NESHAP (RTI, 2009) the industries affected most by the proposed rule, include the following :

Electric power generation, transmission, and distribution Oil and gas extraction (including marginal wells) Pipeline transp ortation of natural gas General medical and surgical hospitals Irrigation sets and welding equipment

The focus of this section of the white paper is to highlight the characteristics of oil and gas industry ( production, gathering, and gas processing , hereafter referred to as the Oil and Gas Industry, OGI ) as it pertain s to the need to differentiate between urban and rural areas in the RICE rule. A common characteristic of energy production is that sites are generally located in unpopulated or sparsely popu lated areas.

A review of state oil and natural gas production rankings by the Energy Information Administration ( http://tonto.eia.doe.gov/state/state_energy _rankings.cfm) indicate that the following twelve states combined account for over two

- thirds of t he oil production and over three quarters of the natural gas production in the U.S. (listed alphabetically): Alaska, California, Colorado, Louisiana, Kansas, Montana, New Mexico, North Dakota, Oklahoma, Texas, Utah and Wyoming. The balance of U.S. energy production is mostly from platforms located in federal waters.

Figure 1 shows how urban/urban clusters are geographically distributed in the 48 contiguous states and Alaska. This map, which was created by plotting GIS shape files provided by the U.S. Ce nsus bureau, indicate that the population in these twelve states is

concentrated in small areas.

Table 1 provides a comparison of the area size and the population density for urban and rural areas within these energy producing states. Only a very small portion of these states are classified as urban areas or urban clusters. Excluding Alaska, the population in urban/urban clusters range from 2000 to 4000 people per square mile, whereas rural population density ranges from about 2 to 30 people per square mile. For Alaska, which has a small population relative to the other states, both the urban/urban cluster population density and rural population density are much lower.

The ratio of the rural and urban population densities is an indicator of the rela tive population exposure associated with HAP emissions from a given source in each of these states. The comparison of urban and rural population density indicates that the likelihood of significant exposure from an area source would be at least 70 times l ower rural areas than in urban areas and most likely hundreds of times lower. Table 1 indicates that, on average, the rural exposure would be about 400 times less than urban exposure, ranging

from about 67 times less in Louisiana to about 1100 times less in Wyoming.Support for Rural RICE NESHAP 7 11/1/2009

This rural

- urban population analysis reinforces why Sections 112(k) and 112 (n)(4)of the Clean Air Act Amendments are well founded by requiring that EPA establish programs to reduce HAP emissions from area sources only in urban areas. The drastic difference between rural and urban areas as it pertains to the RICE NESHAP is two

- fold :

1) In urban areas, there is more likely to be a number of area sources in close proximity, the degree to which significant exposure from multiple area sources overlap is greater than in rural areas, where the separation between area sources is typically much greater.

2) Due to the population density in urban areas being several orders of magnitude higher

in urban and urban cluster areas than in rural areas , man y more people could be exposed to significant HAP concentrations in urban areas than in rural areas.

Table 1. Population Distribution in the States with Highest Oil and Gas Production

A review of the types of RICE that are typically present at OGI is provided in Table 2, which provides EPA’s estimates and estimates provided by the oil and gas industry. Based on industry (OGI) estimates, more than 85% of all RICE are less than 500 HP, comprised primarily of four

- stroke rich

- burn (4SRB) and two

- stroke lean

- burn (2SLB).

In the Section 4 of this white paper, consistent with this distribution of RICE, six example s of RICE have been selected to assess potential exposure to significant HAP emissions. (See Appendix B for assumptions used to develop OGI estimates.)Support for Rural RICE NESHAP 8 11/1/2009

Figure 1 Distribution of Urban Areas (Red) and Rural Areas (Yellow) According to

the 2000 U.S. Census Source: http://www.census.gov/geo/www/ua/ua_2k.htmlSupport for Rural RICE NESHAP 9 11/1/2009

Table 2 Estimated Distribution of RICE for Major and Area Source Categories

RICE at Major Sources
Horse Power (HP) EPA Estimate in Rulemaking O GI Estimate

HP Range Average

HP Number

of

Affected Existing
SI Engines 2SLB 4SLB 4SRB Number
of Existing
SI Engines 2SLB 4 SLB 4SRB

25

- 50 37.5 55,409 5,973 25,521 22,806 6,926 762 0 6,164

50

- 100 75 15,055 1,623 6,934 6,197 1,882 207 0 1,675

100

- 175 138 27,553 2,970 12,691 11,341 3,444 379 0 3,065

175

- 300 238 7,662 826 3,529 3,154 958 105 0 852

300

- 500 400 4,249 458 1,95 7 1,749 531 58 27 446

500

- 600 550 N/A N/A N/A N/A 265 29 125 111

600

- 750 675 N/A N/A N/A N/A 89 10 42 37

>750 1000 N/A N/A N/A N/A 7,427 817 3,491 3,119
Major Total 109,928 11,850 50,633 45,246 21,523 2,368 3,684 15,471

RICE at Are a Sources
Horse Power (HP) EPA Estimate in Rulemaking OGI Estimate

HP Range Average

HP Number

of
Affected Existing
SI Engines 2SLB 4SLB 4SRB Number
of Existing
SI Engines 2SLB 4SLB 4SRB

25

- 50 37.5 83,114 8,960 38,282 34,210 131,597 14,476 0 117,12 1

50

- 100 75 22,583 2,434 10,402 9,295 35,756 3,933 0 31,823

100

- 175 138 41,330 4,455 19,037 17,011 65,439 7,198 0 58,241

175

- 300 238 11,493 1,239 5,294 4,731 18,197 2,002 0 16,196

300

- 500 10,091 1,110 505 8,477

300

- 600 450 9,559 1,030 4,403 3,934

500

- 600 5,044 555 2,371 2,118

600

- 750 675 1,071 115 493 441 1,696 187 797 712

>750 1000 11,141 1,201 5,132 4,586 11,141 1,226 5,236 4,679

Area Total 180,291 19,435 83,042 74,208 278,962 30,686 8,908 239,368
Total Engines 290,21 9 31,285 133,675 119,454 300,485 33,053 12,593 254,839

Diesel fueled RICE are most commonly utilized in Alaska and for emergency purposes. Due to available resources, diesel fueled RICE were not included in the analysis in Sections 4 & 5, but the same p rinciples apply.Support for Rural RICE NESHAP 10 11/1/2009



### 4 ESTIMATION OF POTENT IAL SIGNIFICANT HAP EXPOSURE

FROM RICE AT OIL AND GAS INDUSTRY FACILIT IES

An analysis was conducted to evaluate the likelihood that emissions from RICE engines

could result in HAP concentrations at levels of health concern. It is well

- established that the HAP of most interest for natural gas combustion in RICE is formaldehyde, because this substance, although emitted in very small quantities, is classified as a probable human carcinogen. As described in detail in A ppendix A, the potential for exposure to significant concentrations of formaldehyde was evaluated as follows:

1. Emissions and release parameters were estimated for a sample of OGI RICE, ranging from 115 to 440 HP, represented by three sizes o f two

- stroke lean

- burn

, two sizes of four

- stroke rich

- burn

, and one size of four

- stroke lean

- burn RICE

. These example RICE were chosen as being representative of the population of OGI engine types represented in Table 2. Worst case formaldehyde emission data

was used to calculate a conservative estimate of forma ldehyde emissions.

2. Because ambient concentrations associated with emission sources are highly dependent on meteorological conditions, dispersion modeling was conducted for each example RICE by applying 145 meteorological data sets from stations

distribute d throughout the U.S. This resulted in a problematic assessment of how the average formaldehyde concentration would decrease with distance from each example RICE.

3. U.S. EPA guidance was applied to estimate the average concentration of formaldehyde that c ould be considered significant from a health risk perspective. For inhalation of carcinogens, the determination of whether a concentration level is considered significant is based on the following two factors: 1) T he level of individual lifetime cancer risk that is deemed by EPA to be significant 2) T he Unit Risk Estimate (URE, cancer risk per microgram per cubic meter concentration associated with lifetime exposure).

EPA has generally applied a range of one chance in ten thousand (1 x 10 - 4 ) to one

ch ance in a million (1 x 10 - 6 ) as significant risk levels in various regulatory programs. EPA presently lists two widely varying URE’s for formaldehyde, and the determination of the most appropriate URE is under review. Applying the two

UREs and the outer b oundaries of the significant risk levels results in four possible formaldehyde concentrations that could be considered to be significant: 0.077 μg/m 3

, 7.7 μg/m 3 , 180 μg/m 3 and 18,000 μg/m 3 . For this assessment only the most conservative significant concen tration (the lowest value) was quantitatively evaluated since the modeled concentrations did not exceed the higher three possible significant concentration levels.Support for Rural RICE NESHAP 11 11/1/2009

4. For each example

, the results of each of 145 runs (corresponding to the 145 meteorologica l data sets) were compiled and the average formaldehyde concentration at various radial distances (ranging from 100m to 50 km) was computed. Based on these concentrations

, the distance at which the average concentration is equal to the formaldehyde signif icance level (0.077 μg/m 3 ) was determined. Based on the 145 runs, the likelihood that the significant concentration would exceed a given distance was determined. To focus on OGI RICE, this probability assessment was repeated based on the modeling results for the 41 meteorological stations located within the twelve states listed in Table 1.

5. The distances computed in S tep 4 were then used to estimate the area around a RICE within which formaldehyde concentrations could be considered significant.

The num ber of people who could reside within this area was then estimated by assuming that nobody is likely to reside within about 1⁄4 mile of a RICE and applying the average population per square mile listed in Table 1 to the rest of the significant concentration area.

Findings of this assessment can be summarized as follows:

Dispersion modeling of example RICE for 145 meteorological data sets representative of the entire U.S. indicated that only the lowest formaldehyde significant risk concentration estimate o f 0.077 μg/m 3 would be exceeded at distances beyond 100 m. Thus, modeling indicates the potential for significant

off

- site risk only if the most conservative definition of significant risk (1 x 10 - 6 ) and for the higher URE are applied.

The average radius to significant formaldehyde concentrations (based on the 50 th
percentile of the 145 meteorological data sets nationwide) range from about 100 m to 390 m among the six examples of OGI RICE. The upper limit radius (based on one percentile distances) ranges from about 110 m to 440 m among the six examples of OGI RICE.

Applying the average rural population density of 6.3 person/square mile and a significance radius of 390 m

, less than one person would be expected to reside within the area with significant fo rmaldehyde concentrations for RICE located in rural areas. Given the low population density in rural areas and the OGI’s observation that people are seldom located near rural O&G facilities, the level of risk posed by RICE in rural areas is negligible.Support for Rural RICE NESHAP 12 11/1/2009



### 5.0 RATIONALE FOR ESTABLISHING LESS RIGOROUS RICE

NESHAP REQUIREMENTS FOR RURAL AREAS

5.1 Basis in the Clean Air Act and Existing Regulations

The review and analyses conducted in this white paper supports the position that RICE

located in rural area s do not pose significant health risk and the stringent and potentially costly controls of area sources in rural areas will not result in a health benefit. Therefore, requiring less stringent emissions standards in rural areas than in urban areas is entir ely consistent with Section 112 of the Clean Air Act Amendments, which directs EPA to reduce risks associated with area sources in urban areas, where ambient exposure and risk are generally above established significance levels. As discussed below, there is substantial statutory basis and regulatory basis for establishing NESHAP for RICE with different requirements in rural and urban areas.

The precedent for differentiating urban and non

- urban sources under NESHAP has been

established in the National Emis sion Standards for Hazardous Air Pollutants for Source Categories from Oil and Natural Gas Production Facilities , promulgated in 2007

72 Fed. Reg. 26 (January 3, 2007) 40 CFR 63, subpart HH (hereinafter, " ONG GACT

Rule "). In that rule

, dehydrati on units located in non

- urban areas are subject to less rigorous emission control requirements than sources in urban areas. In this recent rulemaking, the Agency recognized the need to set different standards for urban and rural sources for three key reas ons:

(1) M any such units are located in remote rural areas;

(2) T he location of the units, both now and in the future, is and will be associated with the location of a natural resource rather than the need to serve a population center; and

(3) T he u nits are located at sites that are typically not ma naged by a large staff and, in many cases, are completely remote and checked only periodically.

In this context, EPA judged that the limited health risk in rural areas from that set of sources did not jus tify the burden of unnecessary emission controls that would not materially reduce health risks in rural areas. Based on the present assessment it is evident that the same conclusion applies to the RICE NESHAP. These same three considerations apply to abo ut the same degree to OGI RICE, many of which are located in the same remote areas. The vast majority of OGI engines are located at rural, unmanned sites that are visited only infrequently by operation and maintenance staff.



### 5.2 High Cost and Low Benefi t of Add

- On Controls for Area Sources

For the purposes of differentiating between urban and rural areas, the definition used in NESHAP, Subpart HH (a.k.a. the ONG GACT Rule) of "UA plus offset and UC"Support for Rural RICE NESHAP 13 11/1/2009

(referred to as urban area in this white paper) is al so appropriate for RICE NESHAP.

For the ONG GACT Rule

, Urbanized Areas with a pop ulation greater than 50,000 are expanded to also include any area within 2 miles from the boundary of an Urban Area,

and a n Urban Cluster has a population greater than 10,00 0. In the ONG GACT Rule, EPA applied MACT type controls only within urban areas. The result was a rule with a total annual cost of $883 ,000 to reduce emissions in an area that housed an estimated 80 million people. If EPA extended these controls to rura l areas (outside of the UA plus offset and UC), then the ONG GACT Rule would have an additional annual cost of $38 million, but would have covered an area that only housed an estimated 12 million people. (see 72FR29)

T he rationale for this segregation of requirements is not only based on the absence of significant exposure in rural areas but the high cost of unnecessary controls for remote

OGI faciliti es. T he high cost and low environmental benefit make after

- treatment
controls such as oxid ation catalyst s for rural RICE unreasonable. T able 3 provides a similar examination of the cost and population covered for the proposed RICE rule as was calculated for the ONG GACT. The result of applying MACT

- type controls to urban

areas results in a total annual es timated cost of $288 million and will reduce emission in an area housing 11 million people. Extending the MACT type controls to rural areas would cost an additional $2,588 million, while only 251,000 people live in the area.

This indicates that cost esti mates used by EPA severely underestimate the beyond

- the

MACT

- floor cost per ton reduction for area sources. T aken together, the control costs for applying NSCRs or oxidation catalysts to sources in rural areas, without an y real environmental benefit, are u nreasonable and exceeds EPA's estimate by up to several orders of magnitude. Therefore, EPA should follow the ONG GACT Rule in deciding that costly control in rural areas is unwarranted

. EPA concluded that controls in rural

areas were not warranted bec ause
, "This analysis showed that the overall cost of controlling units outside [urban areas] was much higher for a lower population." (72 FedReg 29.) The same conclusion is appropriate for RICE.Support for Rural RICE NESHAP 14 11/1/2009

Table 3 HAP Cost Effectiveness Calculati ons Based on Estimated Distribution of RICE Type and HorsepowerSupport for Rural RICE NESHAP 15 11/1/2009



### 5.3 Alternative Standards Should be Considered for RICE Located in

Rural Areas

Based on the considerations outlined above, EPA sh ould class ify rural RICE as a separate subcategory of engines that utilize Management Practices such as maintenance work practices (as proposed for other engines not equipped with catalyst) in lieu of catalysts

. F ollowing the Clean Air Act, EPA should consider the h igh cost of control and low

emission reduction benefit for area sources in rural locations. A lternative requirements for the various natural gas

- fired engine subcategories at area sources in rural locations

should consider factors such as: whether the faci lity is manned; emissions ( e.g. , engine size); feasibility of control and cost of control, . In addition, when considering the potential benefits of HAP emission control for natural gas

- fired engines, it would be appropriate for EPA to consider the implic ations of the ongoing review of the formaldehyde URE.

The establishment of alternative

, more flexible requirements for area sources are firmly established in Section 112(d)(5) of the Clean Air Act, where Generally Available Control Technologies (GACT) may be applied, rather than Maximum Achievable Control Technology (MACT).

Alternative standard for area sources.

- With respect only to categories and subcategories of area sources listed pursuant to subsection (c), the

Administrator may, in lieu of the authorities provided in paragraph (2)

and subsection (f), elect to promulgate standards or requirements applicable

to sources in such categories or subcategories which provide for the use of generally available control technologies or manageme nt practices by such sources to reduce emissions of hazardous air pollutants. (underline added for emphasis)

Based on the exposure assessment and cost

- effectiveness calculations developed in this white paper

, it is apparent that RICE in rural areas qualif y for this consideration. The risk analysis conducted for this white paper indicates that the average range of risk due to formaldehyde emissions is very limited and perhaps non

- existent if the updated EPA OAQPS URE is more realistic than the historical IRIS value. Therefore, staying

consisten t with the Clean Air Act Amendments, methods of control should be established that are commensurate with the potential risk and associated limited benefits.

In this light it is important to point out that aspects of the required controls under the proposed NESHAP are not practical to apply to remote

, rural settings. For example

, because the sites often have no electrical supply and are typically unmanned, catalyst systems which require routine attention are not vi able. Therefore, management practices that help ensure efficient operation are much more viable in than emission limits for

RICE in rural area s.Support for Rural RICE NESHAP 16 11/1/2009



### REFERENCES

RTI, 2009. Regulatory Impact Analysis (RIA) for Existing Stationary Reciprocating

Internal com bustion Engines (RICE) NESHAP , prepared for U.S. EPA OAQPS by RTI International, February (htt tp://www.epa.gov/ttn/atw/rice/ricepg.html )

Innovative Environmental Solutions, 2009. Reciprocating Internal Combustion Engine National Emission Standard for Haz ardous Air Pollutants (RICE NESHAP) Proposed

Revisions

– Emission Control Dost Analysis for “Above the Floor” Emission Controls for Natural

- Gas Fired RICE , prepared for INGAA and API, October.Support for Rural RICE NESHAP 17 11/1/2009 

### APPENDIX A

ESTIMATE OF SIGNIFICANT LONG

- TERM FORMALDEHYDE

CO NCENTRATIONS ASSOCIATED WITH TYPICAL RICE

The region surrounding a RICE to which HAP emissions could contribute significantly to health risk is limited due to its relatively low rate of emissions. The following analysis demonstrates that for typical RICE located in rural areas

, there is virtually no risk to the general population.

The off

- site exposure associated with HAP emissions from low

- level point sources, such as RICE, depend primarily on the following factors:

Emissions: HAP emission rate of HAPs ; Release characteristic: stack height and inner diameter, exhaust temperature and flow rate and presence of nearby structures; and Dispersion meteorology: wind speed, wind direction, temperature, and atmospheric turbulence intensity

.

It is well

- establish ed that the HAP of most interest for natural gas combustion in RICE is formaldehyde, because this substance, although emitted in very small quantities, is classified as a probable human carcinogen. Formaldehyde emissions and s tack parameters are listed in Table A

- 1 for six natural gas engines (three sizes o f two

- stroke

lean

- burn , two sizes of four

- stroke rich

- burn

, and one size of four

- stroke lean

- burn ). Because these emissions are primarily based on vendor guarantees, they are likely to represent upper l imits.

Table A

- 1 Emissions and Stack Parameters for Typical RICE

These six typical natural gas fired spark ignited engines were evaluated to estimate the potential area of significant HAP exposure. For this assessment, it is conservatively

assumed that a person continuously resides at a fixed location for 70 years and that RICE operate continuously at 100% load over that extended period. Annual average formaldehyde concentrations were modeled and the lifetime inhalation cancer risk was

then calcula ted by multiplying the modeled annual average formaldehyde concentrations by the EPA URE. A URE represents an upper limit estimate of the lifetime inhalationSupport for Rural RICE NESHAP 18 11/1/2009

cancer risk assuming continuous exposure to a modeled concentration for 70 years, for a person wi th a 70 kg body weight and an inhalation rate of 20 m 3 /day. In extrapolating toxicology data in developing a URE, EPA’s objective is apply conservative assumptions such that application of the URE is likely to overestimate the actual risks associated with exposure to a specified long

- term average concentration. The assessment of inhalation risk due to formaldehyde is complicated in that EPA has publicly listed two URE values for formaldehyde

. EPA’s Prioritized Chronic Dose

- Response Values (6/12/2007)

com piled by the Office of Air Quality Planning and Standards (OAQPS) lists a value of

5.5 x 10 - 9 (m 3 /μg)

. EPA’s Integrated Risk Information System (IRIS) lists a value of 1.3

x 10 - 5 (m 3 /μg). The IRIS value was established in 1991 and is presently under revi ew. EPA has labeled the much less stringent formaldehyde URE than the value published

IRIS as the “best science” in its most recent National Air Toxics Assessment.

The Residual Risk provisions of the Clean Air Act set a de minimis incremental lifetime

can cer risk of 1 x 10 - 6

. In evaluating the significance of incremental individual lifetime

cancer risk

, EPA generally applies a range of 1 x 10 - 6 to 1 x 10 - 4 . For instance, EPA’s Superfund (CERCLA) site cleanup program sets a goal of one

- in

- a

- million (1 x 1 0 - 6 ) excess risk of cancer as the point of departure . I f that goal cannot be met, after consideration of nine balancing criteria, cancer incidence risk levels of no more than about one in ten thousand (1 x 10 - 4 ) are considered acceptable.

For this asse ssment, two conservative assumptions were used to estimate the modeled annual average formaldehyde concentration that would correspond to significant cancer risk; EPA’s lower

- limit risk threshold of 1 x 10 - 6 and EPA’s upper

- limit URE of

1.3 x 10 - 5 (m 3 /μg). Taken together these conservative factors indicate that an annual average formaldehyde concentration exceeding 0.077 μg/m 3 could be significant. If the OAQPS URE is applied with the 1 x 10 - 6 risk level, the significant formaldehyde

concentrati on would be 180 μg/m 3 . If the 1 x 10 - 4 risk level were applied

, the significant formaldehyde concentrations would increase by a factor of 100 to 7.7 μg/m 3 and 18,000 7.7 μg/m 3 , respectively for the IRIS and OAQPS URE.

As noted, the potential off

- s ite risk of typical OGI RICE depends on the dispersion meteorology

. To evaluate this variability, dispersion modeling has been conducted applying AERMOD in the rural mode for each of the six sets of RICE source parameters

and the 145 sequential one

- year m eteorological data sets (each representing a single year for over 145 locations). Th is meteorological data ha s been downloaded from EPA’s Human Exposure Model (HEM3) system website. Figure A

- 1 identifies the meteorological data surface stations in the co ntiguous United States and Alaska that were used in this assessment (two stations, one in Hawaii and one in Puerto Rico were used but are not shown in the map). The analysis conservatively assumed that formaldehyde disperses as a passive tracer and does n ot degrade in the atmosphere. However, w hen

released formaldehyde is removed from the atmosphere by direct photolysis and oxidation by photochemically produced hydroxyl radicals

, the e stimated formaldehyde

half

- li fe rang es from about 1.6

– 19 hours

. By no t accounting for this degradation

, the analysis is conservative for distances beyond a few kilometers, making it less likely that significant concentrations from multiple sources would overlap.Support for Rural RICE NESHAP 19 11/1/2009

Figure A

- 1 Location of M eteorological S tations Provided by EPA ’s HEM

- 3

DatabaseSupport for Rural RICE NESHAP 20 11/1/2009

Rings of 36 radial receptors, spaced at 10 o , were used to estimate annual average concentrations starting from 100 m to 50 km from the sources. The average formaldehyde

concentration as a function of distance was then computed for each meteorological data

set.

For this conservative analysis, applying the IRIS URE and 1 x 10 - 6 risk level, significant average formaldehyde concentrations extend to beyond 100 m for all of the example RICE. The average distance to which significant formaldehyde concentrations extended was computed for each RICE source for all 145 meteorological data sets and also for the meteorological stations located in the 12 states with the most OGI activity. The results of the assessment are shown in Figure A

- 2 and Figure A

- 3, respectively. These are probability plots for each RICE indicat es the likelihood, based on meteorological variability, that the significant formaldehyde associated with each engine would exceed the significance level at given distance.

Figure A

- 2 Probability Plot Based on All Met eo rological Stations of Significant Formaldehyde Concentrations based on the IRIS URE and the 1 x 10 - 6 Risk LevelSupport for Rural RICE NESHAP 21 11/1/2009

Figure A

- 3 Probability Plot of Significant Formaldehyde Concentrations based on

the I RIS URE and the 1 x 10 - 6 Risk Level and 41 Meteorological Stations in the 12 Oil and Gas Producing States (see figure

From these figures it can be deduced that it is not possible for a significant formaldehyde

concentration level for a typical RICE to ex ceed 500 m . T he typical range (at the 50 th
percentile level) would be from about 100 m to 400 m. When the OAQPS URE and/or

the 1 x 10 - 4 risk level is considered significant

, formaldehyde concentrations do not extend to the closest model receptor (100 m) for any meteorological data set.

The number of people potentially exposed to significant formaldehyde concentrations can be estimated by combining the modeling results with the population density data. For

this assessment

, it is assumed that the area w ith in 1⁄4 mile of a RICE is uninhabited and that the population density in the surrounding area is representative of the 12 oil and gas states. Given a significant formaldehyde distance of 390 m corresponding to the 50 th
percentile value for the 280 HP two

- stroke RICE in Figure A

- 3 . T he potential off

- site exposure area within this radius would be 0.14 square mile. Multiplying this area by the average population density 6.3 persons per square mile for rural areas, the result is an estimate that 0.87 of a pe rson could be exposed significant formaldehyde concentrations. In typical urban areas with a population density of about 2,760 persons per square mile, 375 persons could be exposed to significant formaldehyde concentrations. Because this

estimate is base d on the lowest range of significance and the higher IRIS URE

, these potential exposure estimates are conservatively high.Support for Rural RICE NESHAP 22 11/1/2009

The conclusion that can be drawn from this analysis is that in rural locations where most oil and gas production exists, it is unli kely that even a single person lives sufficiently close to a RICE to be exposed to significant formaldehyde concentrations. In addition, given the OGI’s observation

, OGI facilities are typically very remote . P eople seldom

reside within several hundred me ters of an oil and gas facility. I t can be concluded that the level of risk posed by OGI RICE in rural areas is negligible.Support for Rural RICE NESHAP 23 11/1/2009 

### APPENDIX B

TABLE 2 & 3 ASSUMPTI ONS

Table 2

- Estimates of the Distribution of RICE at Located Major Sources and

Areas Sources

a. EPA estimated SI engine counts are from Melanie King’s document (titled RICE NESHAP population assumptions.doc) supplied to Jeff Adams by email on May 19, 2009. These engine counts included all engines except engines >500 HP at MACT major sources.

b. EPA c alculated the numbers in this document using the assumptions outlined in Docket

Document # EPA

- HQ

- OAR

- 2005

- 0030

- 0014.

c. The 300

– 600 HP range for area sources could be divided into 300

– 500 HP and 500

– 600 HP ranges by assuming those ranges were at the sa me ratio as the same horsepower ranges for major sources.

d. Engine counts for engines >500 HP at MACT major sites was calculated by using area source engine counts for engines >500 HP , dividing them by 60% to get total engines, and multiplying by 40% to ge t engines at major sources;

e. Assumed that 90% of O&G RICE are located in rural areas (as defined by NESHAP, Subpart HH) as a best estimate. This assumption is based on engine inventories of several operators. As a comparison, the Subpart HH, GACT rule est imated that 2172 out of 2222 total dehydrators were in rural areas, which equates to 97.75% of dehydrators in rural areas. O&G engines are located within the same O&G fields as the dehydrators. However, the recently developed Barnet Shale Field is predom inately in the Dallas/Fort Worth Urban area. This would increase the percentage of urban area engines significantly.

f. EPA’s estimate that 40% of RICE are located at major sources of HAPs (with 60% at area sources) is probably accurate for engines over 750 HP . It should be noted that many of these major sources have become synthetic minor sources by the installation of catalytic controls with federally enforceable permit conditions. Although these are technically not major source engines, they have bee n left in this category because catalytic controls have been installed, thus the cost of controls have already been

incurred.

g. Very few engines less than 750 HP are located at major sources of HAPs, because these sites typically have electricity that can support these smaller energy demands and electric motors are preferred by industry over RICE. The RICE that are at major sources and

under 750 HP are predominately emergency RICE. Assumed that 95% of RICE under

750 HP are at area sources.
h. EPA’s estimat e that SI engines are 11%

- 2SLB, 47%

- 4SLB, and 42%

- 4SRB is a good estimate for engines over 500 HP . For engines under 500 HP , there are no know n 4SLB engines used in the O&G industry. RICE <500 HP are predominately 4SRB with a few
2SLB. Our best es timate for <500 HP is 89%

- 4SRB and 11%

- 2SLB.

Table 3

- HAP Cost Effectiveness Calculati ons Based on Estimated Distribution of RICE Type and Horsepower

Total Capital Cost and Total Annual Cost are from the tables in the Appendices to “ Reciprocating Internal Combustion Engine National Emission Standard for Hazardous Air Pollutants (RICE NESHAP) Proposed

Revisions

– Emission Control Cost Analysis Background for “Above the Floor” Emission Controls for

Natural Gas

- Fired RICE ” a) 2 Stroke Lean Burn engine Total Annual Cost comes from Appendix O, Row 69 b) 4 Stroke Lean Burn engine Total Annual Cost comes f rom Appendix L, Row 31 c) 4 Stroke Rich Burn engine Total Annual Cost comes from Appendix 1 Rows 37Support for Rural RICE NESHAP 24 11/1/2009 d) Population per engine is based on one person/engine for rural areas and 400 people/engine for

urban areas as discussed at the end of Section 4.