EPA Applicability Determinations Index 

U.S. Environmental Protection Agency 

Applicability Determination Index 

Control Number: 0800090 

Category: NSPS 

EPA Office: Region 8 

Date: 11/20/2008 

Title: Integrated Gasification Combined Cycle Power Plant 

Recipient: Phillips, Preston 

Author: Reynolds, Cynthia J. 

Comments: 

Part 60, J Petroleum Refineries 

Ja 

References:	 60.100(b) 

60.101(f) 

60.101a 

Abstract: 

Q1: Does 40 CFR part 60, subpart J apply to the proposed Hyperion Energy Center near Elk Point, 

South Dakota? 

A1: No. NSPS subpart J applies to various affected facilities at petroleum refineries based on the date 

the affected facility commenced construction, reconstruction, or modification. Since the Hyperion Energy 

Center has not yet begun construction it is not subject to subpart J. To be subject to subpart J, HEC's 

Claus sulfur recovery plant and fuel gas combustion devices would have had to begin construction on 

or before May 14, 2007, except for flares which would have had to begin construction on or before 

June 24, 2008. 

Q2: Do the synthetic gas and pressure swing adsorption (PSA) tail gas to be produced at the integrated 

gasification combined cycle power plant gasification block at the proposed Hyperion Energy Center 

near Elk Point, South Dakota, constitute "fuel gas" under 40 CFR part 60, subpart Ja? 

A2: Yes. Because the synthetic gas and PSA tail gas will be generated at a petroleum refinery and 

combusted and meet the definition of "fuel gas" in 40 CFR 60.101a, therefore these are subject to 

NSPS subpart Ja. This definition is not restricted to gas produced by a refinery process unit, but even if 

it were, the gasification block will be a refinery process unit, because it is a segment of a refinery in 

which gasification, a specific processing operation, will be conducted. 

Letter: 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION 8 

1595 Wynkoop Street 

DENVER, CO 80202-1129 

Phone 800-227-8917 

http://www.epa.gov/region08 
EPA Applicability Determinations Index 

Ref: 8ENF-AT 

CERTIFIED MAIL 

RETURN RECEIPT REQUESTED 

Preston Phillips, Vice President 

Hyperion Energy Center 

Hyperion Refining LLC 

1350 Premier Place 

5910 N. Central Expressway 

Dallas, TX 75206 

Dear Mr. Phillips: 

The United States Environmental Protection Agency (EPA) is reviewing the draft prevention of 

significant (PSD) air quality preconstruction permit that the South Dakota Department of Environment 

and Natural Resource (DENR) has prepared in response to an application by Hyperion Refining LLC 

(Hyperion) to build an oil refinery and power plant known as the Hyperion Energy Center (HEC), near 

Elk Point, South Dakota. We have also reviewed two August 20, 2007, letters from RTP Environmental 

Associates Inc. (RTP), on behalf of Hyperion Resources, Inc., to the Director of EPA's Compliance 

Assessment and Media Programs Division in Washington, D.C., and EPA's September 24, 2007 

response. 

This letter is EPA's response regarding (1) whether the synthetic gas (syngas) and Pressure Swing 

Adsorption (PSA) tail gas to be produced by Hyperion's proposed integrated gasification combined 

cycle (IGCC) power plant gasification block should be considered a "fuel gas" under the new source 

performance standards (NSPS) Subparts J and Ja1 and (2) whether the IGCC power plant is subject to 

maximum available control technology (MACT) Subpart CC.2 EPA has determined that both the syngas 

and PSA tail gas are "fuel gas" for purposes of NSPS Subpart Ja and that the IGCC power plant is 

subject to MACT Subpart CC.3 

In one of its August 20, 2007, letters, RTP stated that the syngas produced in the IGCC power plant 

gasification block is fuel gas, and that the IGCC combined cycle gas turbines are fuel gas combustion 

devices under the current NSPS Subpart J and are other fuel gas combustion devices under the 

proposed NSPS Subpart Ja. In the other August 20, 2007, letter, RTP determined that the gasification 

block does not fit within the definition of "petroleum refining process unit" and that none of the process 

vents, storage vessels, wastewater streams, or equipment leaks associated with this process unit are 

subject to any of the provisions of MACT Subpart CC. RTP requested EPA's concurrence with these 

determinations. EPA responded by indicating that the facility should work with the State and EPA's 

Regional Office. 

Subsequently, the South Dakota DENR issued a draft PSD permit, along with a supporting Statement 

of Basis (SOB). In the SOB, the State indicated that NSPS Subparts J and Ja applied to the refinery 

and that the syngas was not a fuel gas and that the turbines were not considered fuel gas combustion 

devices under NSPS Subparts J and Ja. The SOB also indicated that the electrical power plant (IGCC 

system) is not a petroleum refining process unit and that MACT Subpart CC did not apply to the IGCC 

system. 

Background 

On December 20, 2007, RTP, on behalf of Hyperion, submitted a PSD preconstruction permit 

application to the South Dakota DENR to construct and operate the HEC refinery and power plant 

complex. DENR's SOB for the proposed permit indicates that the petroleum refinery will process up to 

400,000 barrels per day of crude oil and 26,000 barrels per day of butane and that the IGCC power 

plant will supply the refinery with hydrogen, electric power, and steam for its operation. The power plant 

is designed to provide the refinery with up to 450 million cubic feet per day of hydrogen, 200 megawatts 

worth of electricity, and 2.4 million pounds of steam per hour. 

Additionally, the SOB indicates that the IGCC power plant will use two major processes to produce the 

hydrogen, electricity and steam: (1) a gasification block; and (2) a power/steam block. The gasification 

block converts a solid fuel such as the petroleum coke or coal to a gas. This gas is generally referred to 

as synthetic gas or syngas. The syngas is composed of carbon monoxide, hydrogen, and impurities. 
EPA Applicability Determinations Index 

The gasification process will also remove impurities before the syngas is burned in the power/steam 

block and will produce pure hydrogen, also called PSA tail gas, for the refinery process. Hyperion 

proposes to construct and operate five combined cycle gas turbines. Hyperion will not supply any of its 

electric output capacity to a utility power distribution system for sale. 

Finally, the December 2007 PSD permit application (page 29) indicates that "[a]ll pollutant-emitting 

activities at the Hyperion Energy Center will be under common control and will be located on 

contiguous or adjacent sites. The petroleum refinery falls within two-digit SIC code 29. If the power 

plant were to sell a substantial quantity of electricity to outside users, its primary economic activity 

would be electric generation and transmission, and it would fall into the two-digit Sic code 49. However, 

the sole economic activities of the power plant at the Hyperion Energy Center will be production of 

steam, electricity, and hydrogen in support of the petroleum refinery. Accordingly, RTP has determined 

that the power plant is a support facility for the petroleum refinery, and that the two comprise a single 

stationary source." 

NEW SOURCE PERFORMANCE STANDARDS (NSPS) 

Subparts J and Ja -- General 

The SOB indicates that certain provisions of Subpart J apply to the HEC. We do not agree. Subpart J 

was amended on June 24, 2008 (73 FR 35838) and applies to any fluid catalytic cracking unit catalyst 

regenerator or fuel gas combustion device that commences construction, reconstruction, or modification 

after June 11, 1973, and on or before May 14, 2007, except for flares. Subpart J applies to flares that 

commence construction, reconstruction, or modification after June 11, 1973, and on or before June 24, 

2008. Subpart J also applies to Claus sulfur recovery plants that commence construction, 

reconstruction, or modification after October 4, 1976, and on or before May 14, 2007. See 40 C.F.R. 

§60.100(b). The HEC has not yet commenced construction and therefore is not subject to Subpart J. 

Rather, the facility will be subject to Subpart Ja. 

Subpart Ja -- Fuel Gas 

The SOB indicates that Hyperion's syngas and PSA tail gas are not considered "fuel gas" under 

Subparts J and Ja, citing EPA's December 1, 1980 revision of the definition of "fuel gas" in Subpart J 

and the decision in Star Enterprises; Texaco Inc. v. United States Environmental Protection Agency, 

235 F.3d 139 (3rd Cir. 2000). We do not agree with this conclusion, for the reasons explained below. 

The SOB indicates that because Hyperion's syngas and PSA tail gas will be produced by the 

gasification process of the IGCC system and not by a refinery process unit (defined in 40 C.F.R. 

§§60.101(f) and 60.101a as "any segment of the petroleum refinery in which a specific processing 

operation is conducted"), they are not "fuel gas" under Subparts J and Ja. Again, we do not agree. 

The definition of "fuel gas" in 40 C.F.R. §60.101a4 does not refer to a "process unit." Had EPA 

intended to limit the definition of "fuel gas" to gas produced at any "process unit," EPA would have 

used the term "process unit" in the definition of "fuel gas," as it did in the definition of "process upset 

gas" in 40 C.F.R. §60.101a. Having included the term "process unit" in the definition of "process upset 

gas" but excluded it in the definition of "fuel gas," EPA further demonstrated its intent not to limit "fuel 

gas" to gas produced by a process unit. 

Additionally, even if EPA had intended to limit the definition of "fuel gas" to gas produced by a refinery 

process unit, this would not be relevant, because the gasification block of the IGCC power plant is a 

refinery process unit. Subpart Ja's definition of "refinery process unit" is open-ended, encompassing 

"any segment of the petroleum refinery in which a specific processing operation is conducted." (See 40 

C.F.R. §60.101a.) The IGCC's gasification block clearly falls within this definition, because it is a 

segment of the refinery in which gasification, one of the refinery's specific processing operations, is 

conducted. 

Further, the Subpart Ja definition of "fuel gas" explicitly includes gases from flexicoking unit gasifiers. 

(See 40 C.F.R. §60.101a.) Although the IGCC power plant gasification block is not exactly the same 

unit as a flexicoking unit gasifier, its purpose is the same, i.e., to produce a synthetic fuel gas from 

petroleum coke. 

The SOB also cites Star Enterprises; Texaco Inc. v. United States Environmental Protection Agency, 
EPA Applicability Determinations Index 

supra, in support of its claim that Hyperion's syngas and PSA tail gas are not "fuel gas." However, this 

decision involved a different question: whether two stationary gas turbines located in an electrical power 

plant complex adjacent to a refinery were not subject to Subpart J because they were not "in" the 

refinery and therefore not an "affected facility" as defined in 40 C.F.R. §60.100(a). The court specifically 

noted that this conclusion meant there was no need to reach the question of whether the gas burned in 

those turbines was "fuel gas." (See 235 F.3d at 145, n. 8.) As noted in the December 2007 PSD permit 

application (page 29), the IGCC "power plant is a support facility for the petroleum refinery, and the 

two comprise a single stationary source." 

The SOB suggests that if the turbines involved in the Star Enterprises case had been regulated by 

another subpart of 40 C.F.R. Part 60, they would not have been regulated by Subpart J. However, 

there was no indication in that opinion that a "fuel gas" regulated by Subpart J could not also be 

regulated another subpart. Instead, the court stated that the composition of the gas to be burned by the 

two turbines "may suggest" that another subpart of Part 60 would be the appropriate regulation for 

regulating the emissions from those turbines, while specifically noting that the unique composition of the 

gas to be burned in the turbines did not, in and of itself, exempt the turbines from regulation under 

Subpart J. 

For the reasons explained above, we have determined that the syngas and PSA tail gas proposed to 

be produced at Hyperion and burned in the turbines, are each a "fuel gas" for purposes of NSPS 

Subpart Ja and that the combustion turbines associated with the IGCC system are subject to Subpart 

Ja. Also, any other devices, such as process heaters, boilers, and flares at the refinery, including the 

IGCC system, that combust fuel gas, including syngas and PSA tail gas, are fuel gas combustion 

devices and subject to NSPS Subpart Ja. 

MAXIMUM AVAILABLE CONTROL TECHNOLOGY STANDARDS (MACT) 

Subpart CC 

The SOB indicates that the electrical power plant (IGCC system) is not considered a petroleum refining 

process unit. Based on this characterization, the DENR agrees with the applicant that Subpart CC does 

not apply to the electrical power plant (IGCC system). 

Based on the available information, we conclude that the IGCC system is in fact a petroleum refining 

process unit that is subject to Subpart CC. As stated in the SOB and discussed above, the IGCC 

power plant produces hydrogen. Therefore, the IGCC system is a hydrogen production unit under the 

definition of "petroleum refining process unit." According to 40 C.F.R. §63.641, a "petroleum refining 

process unit" means 

a process unit used in an establishment primarily engaged in petroleum refining as defined in the 

Standard Industrial Classification code for petroleum refining (2911), and used primarily for the 

following: (1) Producing transportation fuels (such as gasoline, diesel fuels, and jet fuels), heating fuels 

(such as kerosene, fuel gas distillate, and fuel oils), or lubricants; (2) Separating petroleum; or 

(3) Separating, cracking, reacting, or reforming intermediate petroleum streams. (4) Examples of such 

units include, but are not limited to, petroleum-based solvent units, alkylation units, catalytic 

hydrotreating, catalytic hydrorefining, catalytic hydrocracking, catalytic reforming, catalytic cracking, 

crude distillation, lube oil processing, hydrogen production, isomerization, polymerization, thermal 

processes, and blending, sweetening, and treating processes. Petroleum refining process units also 

include sulfur plants. [emphasis added] 

Because the IGCC system will be located at an establishment primarily engaged in petroleum refining 

and because it produces hydrogen, it is a "petroleum refining process unit." 

Subpart CC applies to petroleum refining process units and to related emission points that are located 

at a plant site where: (1) the plant site is a major source as defined in section 112(a) of the Clean Air 

Act, and (2) the process unit emits or has equipment containing or contacting one or more of the 

hazardous air pollutants listed in Table 1 of Subpart CC. (See 40 C.F.R. §63.640(a).) 

The IGCC system meets all of these criteria. It meets the definition of "plant site" in 40 C.F.R. §60.6415 

because the refinery and power plant are under common control and will be located on contiguous or 

adjacent sites. It also satisfies both conditions specified in 40 C.F.R. §63.640(a). It meets the definition 

of "major source" in section 112(a)(1) of the Clean Air Act,6 because it is part of a facility that will emit 
EPA Applicability Determinations Index 

or have the potential to emit more tons per year of hazardous pollutants (HAPs) than specified in that 

definition. Further, the December 2007 permit application and the SOB indicate that the IGCC system 

emits or has equipment containing or contacting more than one of the HAPs listed in Table 1 of 

Subpart CC. For example, the SOB indicates that there is benzene in wastewater from the IGCC 

system. The permit application indicates that methanol is used to clean the syn gas and removes, 

among other things, carbonyl sulfide (COS), in the IGCC system. 

CONCLUSION 

For the reasons explained above, we have determined that the syngas and PSA tail gas to be 

produced at the IGCC plant are "fuel gas" Subpart Ja, and that the IGCC system is a refinery process 

unit subject to Subpart CC. Forthcoming, EPA will respond to RTP's inquiry regarding 40 C.F.R. part 60 

subparts Da, Db, and KKKK, part 61, subpart FF, and part 63, subparts UUU and FFFF. 

If you have any questions or concerns regarding this letter, please contact Laurie Ostrand of my staff at 

(303) 312-6437 or by email at ostrand.laurie@epa.gov. 

Sincerely, 

Cynthia J. Reynolds, Director 

Technical Enforcement Program 

cc: Brian Gustafson, Administrator 

Air Quality Program 

South Dakota Department of Environment 

and Natural Resources 

Joe Foss Building 

523 East Capitol 

Pierre, SD 57501 

Colin M. Campbell 

RTP Environmental Associates Inc. 

304-A West Millbrook Road 

Raleigh, NC 27609 

1 Subpart J, 40 C.F.R. §§60.100 et seq., is entitled "Standards of Performance for Petroleum 

Refineries," and Subpart Ja, 40 C.F.R. §§60.100 et seq., is entitled "Standards of Performance for 

Petroleum Refineries for Which Construction, Reconstruction, or Modification Commenced After May 

14, 2007." 

2 Subpart CC, 40 C.F.R. §63.640 et seq., is entitled "National Emission Standards for Hazardous Air 

Pollutants From Petroleum Refineries." 

3 It should be noted that South Dakota DENR has been authorized to implement and enforce MACT 

Subpart CC but not NSPS Subpart Ja. Therefore, EPA has the primary responsibility for implementing 

and enforcing NSPS Subpart Ja. Additionally, pursuant to 40 C.F.R. Subpart E -- Approval of State 

Programs and Delegation of Federal Authorities, specifically 40 C.F.R. 63.90(d)(2), "nothing in this 

subpart shall prohibit the Administrator from enforcing any applicable rule, emission standard or 

requirement established under section 112." 

4 In Subpart Ja, 40 C.F.R. §60.101a provides, "Fuel gas means any gas which is generated at a 

petroleum refinery and which is combusted. Fuel gas includes natural gas when the natural gas is 

combined and combusted in any proportion with a gas generated at a refinery. Fuel gas does not 

include gases generated by catalytic cracking unit catalyst regenerators and fluid coking burners, but 

does include gases from flexicoking unit gasifiers. Fuel gas does not include vapors that are collected 

and combusted to comply with the wastewater provisions in §60.692, 40 C.F.R. §§61.343 through 

61.348, 40 C.F.R. §63.647, or the marine tank vessel loading provisions in 40 C.F.R. §63.562 or 40 

C.F.R. §63.651. 

5 The definition in 40 C.F.R. §63.641 states, "A plant site means all contiguous or adjoining property 

that is under common control including properties that are separated only by a road or other public 

right-of-way. Common control includes properties that are owned, leased, or operated by the same 

entity, parent entity, subsidiary, or any combination thereof." 
EPA Applicability Determinations Index 

6 The definition in section 112(a)(1) of the Clean Air Act states, "The term 'major source' means any 

stationary source or group of stationary sources located within a contiguous area and under common 

control that emits or has the potential to emit considering controls, in the aggregate, 10 tons per year 

or more of any hazardous air pollutant or 25 tons per year or more of any combination of hazardous air 

pollutants. The Administrator may establish a lesser quantity, for a major source than that specified in 

the previous sentence, on the basis of the potency or the air pollutant, persistence, potential for 

bioaccumulation, other characteristics of the air pollutant, or other relevant factors."