1

U.S. Environmental Protection Agency oilandgas.whitepapers@epa.gov

Re: Comments on the U.S. Environmental Protection Agency’s White Papers Regarding Methane and Volatile Organic Compound Emissions in the Oil and Natural Gas Sector

To Whom It May Concern:

Kinder Morgan Energy Partners, L.P. (Kinder Morgan) appreciates the opportunity to comment on the U.S. Environmental Protection Agency’s (EPA) technical white papers regarding potential sources of methane and volatile organic compound (VOC) emissions in the oil and natural gas sector (the “White Papers”). Kinder Morgan strongly encourages EPA to evaluate all the information received both from peer reviewers and the public, as well as other existing and anticipated regulatory requirements, in its evaluation of the need for and potential mechanisms for reducing methane emissions from the oil and gas sector, particularly in the transmission and storage sector.

I. INTRODUCTION

On April 15, 2014, EPA released for external peer review and public comment five technical White Papers on potential sources of methane and VOC emissions in the oil and gas sector. EPA focuses on technical issues regarding the scope of emissions and available mitigation techniques that target reductions of methane and VOCs from the oil and gas sector. EPA proposes to use the White Papers, along with input EPA receives from the peer reviewers and the public, to determine how and whether to best pursue additional methane reductions from the sources in the oil and gas sector. Specifically, the White Papers address emissions from: compressors; completions and ongoing production of hydraulically fractured oil wells; leaks; pneumatics devices; and liquids unloading. See Oil and Natural Gas Sector Compressors, Report for Oil and Natural Gas Sector Compressors, Review Panel, April 2014 (“Compressor White Paper”); Oil and Natural Gas Sector Leaks, Report for Oil and Natural Gas Leaks, Review Panel, April 2014 (“Leaks White Paper”); and Oil and Natural Gas Sector Pneumatic Devices, Report for Oil and Natural Gas Sector Pneumatic Devices, Review Panel, April 2014 (“Pneumatics White Paper”). EPA has requested comments and technical information by June 16, 2014. Kinder Morgan timely submits these comments in response to EPA’s White Papers regarding compressors, leaks, and pneumatic devices. Kinder Morgan further incorporates the comments of several trade associations by reference, including: American Petroleum Institute (API) and Interstate Natural Gas Association of America (INGAA). Kinder Morgan further attaches responses to EPA’s charge questions in Exhibit A , attached and incorporated hereto.2

II. EXECUTIVE SUMMARY

Kinder Morgan appreciates this opportunity to comment on the EPA White Papers. As a leading energy, transportation, and storage company in North America, Kinder Morgan focuses its comments on those White Papers applicable to the transmission and storage sector: the Compressor White Paper, the Pneumatics White Paper, and the Leaks White Paper. Kinder Morgan has significant experience in assessment of greenhouse gas (GHG) emissions and regulatory regimes regarding compressors, pneumatics, and leaks through its participation in the GHG reporting program, EPA’s Natural Gas STAR program, and regulation under New Source Performance Standards (Sections OOOO and KKK). In Kinder Morgan’s experience, the vast majority of methane emissions come from either: (1) blowdowns of pipeline associated with maintenance or pipe replacement; or (2) a small number of components, typically associated with compressors. Prior to developing regulations or other mechanisms to reduce methane emissions from the transmission and storage sector, Kinder Morgan strongly urges EPA to consider the following:

 EPA should use data from the GHG reporting program to establish baseline emissions rates for the transmission and storage sector as the GHG reporting program provides accurate data regarding emissions from such sources, which are significantly less than what EPA has represented in their national inventory.

 EPA should coordinate with the Pipeline and Hazardous Materials Safety Administration (PHMSA) to address potential reductions in methane emissions that occur as a result of PHMSA’s current regulations requiring installation of new pipe (with limited exceptions) when population density changes the class location of the pipe. The methane emissions that result from blowdowns necessary to upgrade the pipe can be avoided without impacting safety considerations, and EPA should work with its sister agency to evaluate this readily available source of methane emission reductions.

 EPA should not proceed with any decisions regarding methane reductions from the transmission and storage sector until it better understands the emissions from the various sources and components in the transmission and storage sector. Specifically, EPA should wait until after the studies and reports referenced in Kinder Morgan’s comments—namely those being conducted by Colorado State University and Pipeline Research Council International—have been completed and the findings of those studies and reports reviewed and understood by EPA. With the additional data collected during the technical review period on the White Papers, a review of the GHG reporting program data, and the information from these studies, EPA will have the relevant information to determine those sources that may be most appropriate for reduction in the transmission and storage sector (i.e., which sources in fact have the highest methane emissions). Current emissions information provided by EPA conflicts with the data collected by Kinder Morgan and others, and thus warrants further review.

 EPA should not proceed with any decision regarding methane reductions from the transmission and storage sector until it better understands the complex nature of existing regulations governing entities operating in the transmission and storage sector and understands the differences between compressors, leaks, and pneumatics in the3 transmission and storage sector as compared to upstream sectors, such as oil and gas production. Specifically, EPA should coordinate its analysis with the U.S. Department of Energy (DOE) and should not proceed with any decision regarding methane reductions from the transmission and storage sector until the DOE has completed its quadrennial review that will address “downstream” methane opportunities.

 EPA should carefully consider the technical feasibility of many of the proposed mitigation reduction strategies and again await the results of the Pipeline Research Council International report prior to identifying available or feasible emissions reduction technologies. Kinder Morgan does not agree that many of the mitigation technologies, including use of a vapor recovery unit system to reduce emissions from rod packing or converting wet seals to dry seals, are either environmentally beneficial or technically or economically feasible.

 EPA should not regulate existing sources, particularly in the transmission and storage sector based on PHMSA and the Federal Energy Regulatory Commission (FERC) jurisdiction. The transmission and storage sector raises considerations very different from those in the exploration and production and processing sectors. Furthermore, the technologies are not proven for and have not been applied even for new sources within the transmission and storage sector.

 EPA should re-evaluate its position regarding leak repairs and ease of the repair, particularly in the transmission and storage sector. In the transmission and storage sector, repair can require either blowdown of pipeline or blowdown of the compressor piping—an event that releases methane directly to the atmosphere—frequently in greater quantities than emitted from any leak requiring repair.

 EPA should not adopt a leak detection and repair program for the transmission and storage sector. Instead, EPA should either encourage or require (if necessary) operators of transmission and storage facilities to develop a directed inspection and maintenance program that addresses several of the white paper topics (i.e., compressors and leaks). Development of a directed inspection and maintenance program is consistent with EPA’s own data and that of Kinder Morgan and others that a small number of components account for the vast majority of emissions. As a result, it is cost-effective and environmentally beneficial to focus on identifying that small number of components instead of conducting a full scale leak detection and repair program or a mandatory command and control requirement.

 EPA should not regulate pneumatic devices in the transmission and storage sector. Data from Kinder Morgan’s operations indicate that pneumatics account for 1% or less of the total emissions reportable by Kinder Morgan under the GHG reporting program. These insignificant sources do not warrant regulation or emissions reductions in the transmission and storage sector.

Kinder Morgan remains committed as always to working with EPA, industry, and other stakeholders to identify environmentally beneficial, cost-effective and technologically feasible mechanisms for reducing emissions from its operations. Kinder Morgan provides more detailed comments below.4

III. OVERVIEW OF KINDER MORGAN’S OPERATIONS

Kinder Morgan is a leading energy, transportation and storage company in North America. With approximately 70,000 miles of pipelines and 586 billion cubic feet (Bcf) of storage, Kinder Morgan is the largest natural gas transporter and largest storage operator in North America. Kinder Morgan’s pipelines are connected to every important natural gas resource play, including the Eagle Ford, Marcellus, Utica, Uinta, Haynesville, Fayetteville, Barnett, Mississippi Line and Woodford, that will play a significant role in meeting the nation’s long-term natural gas supply. Kinder Morgan serves the major natural gas consuming markets of the entire United States. Key Kinder Morgan natural gas pipeline assets include Natural Gas Pipeline Company of America (which serves the high-demand Chicago market); Tennessee Gas Pipeline (which serves New York City and Boston); Southern Natural Gas (which serves the southeastern United States); and intrastate pipelines in Texas (Texas is the largest producer and consumer of natural gas in the United States), El Paso Natural Gas, Mojave Pipeline and Ruby Pipeline that service California markets. Kinder Morgan also operates gathering systems, several gas processing plants, and two liquefied natural gas (LNG) terminals.

IV. EPA’S METHANE STRATEGY SHOULD BE COORDINATED WITH THE DEPARTMENT OF ENERGY

EPA’s methane White Papers were released as part of President Obama’s Climate Action Plan: Strategy to Reduce Methane Emissions (March 2014) (“Methane Strategy”). With respect to the oil and natural gas sector, the Methane Strategy identified three planned efforts by agencies within the Administration: (1) EPA’s technical review through the White Papers; (2) Bureau of Land Management’s (BLM) proposed venting and flaring regulations; and (3) DOE’s Quadrennial Energy Review to address “downstream” methane opportunities. Interestingly, EPA’s White Papers— particularly the Compressor White Paper, Leaks White Paper, and Pneumatics White Paper— address emissions sources in the downstream natural gas sector. However, at this time, DOE has not yet completed its quadrennial review. EPA’s White Papers do not address how its technical review (and any program resulting from that review) correlates with the direction provided to DOE. Kinder Morgan has significant concern that in the White Papers, EPA appears to treat the transmission and storage sector as identical to the upstream oil and gas sector. Kinder Morgan strongly urges EPA to consider the complex nature of the transmission and storage sector of the natural gas industry; a sector that is not only independent from the upstream oil and gas sector, but also heavily regulated by DOE through FERC and the Department of Transportation’s PHMSA. Kinder Morgan and other regulated entities seek certainty regarding regulatory frameworks and strongly encourage EPA to coordinate its analyses with those other agencies regulating the transmission and storage sector before proceeding with any regulations or mechanism for achieving methane reductions from the transmission and storage sector. Finally, Kinder Morgan strongly urges EPA to refrain from pursuing emissions reductions from sources downstream of natural gas processing facilities until DOE has completed its review and the necessary coordination can occur.5



### V. KINDER MORGAN METHANE EMISSIONS ASSESSMENT AND REDUCTION EXPERIENCE

Kinder Morgan has significant experience in the assessment of GHG emissions and existing regulatory regimes regarding compressors and leaks. In fact, Kinder Morgan first began implementing the GHG reporting program in 2009. This effort has included compliance with the annual surveys and measurements required by 40 C.F.R. Part 98, Subpart W, for Kinder Morgan’s onshore natural gas transmission compression, underground natural gas storage, onshore natural gas processing, and LNG import and export facilities. In fact, Kinder Morgan currently has almost 200 transmission, storage, gas processing, and LNG facilities for which it performs monitoring annually under Subpart W. Kinder Morgan brings a unique perspective along with experience and insight to methane emissions in the natural gas sector because it has collectively monitored its 200 facilities subject to Subpart W nearly 600 times over the course of 2011, 2012, and 2013 under EPA’s Subpart W reporting program, using internal personnel and third-party contractors (200 facilities X 3 years = 600 times). By using operations personnel familiar with the facilities, Kinder Morgan has been able to more closely identify and understand technical obstacles associated with GHG emissions reporting. Kinder Morgan’s monitoring of these facilities has included monitoring of several of the sources under evaluation in the White Papers, including compressors, pneumatic devices and leaks.

Due to Kinder Morgan’s extensive gas pipeline network and sizable number of facilities providing natural gas transmission, storage, and processing services on a continuous basis, Kinder Morgan has a large number of facilities triggering GHG reporting and monitoring. Ultimately, this has resulted in the collection of thousands of data inputs over the last three (3) years and provides Kinder Morgan with the unique opportunity to present the EPA with an analysis of our Subpart W data that we consider a key component in determining a reasonable approach to effectively achieving methane emissions reductions.

In addition, Kinder Morgan’s pipeline companies have participated in EPA’s Natural Gas STAR Program since 1993. Kinder Morgan’s natural gas operations have achieved methane emissions reductions of over 80 Bcf since 1993, with combined reductions in 2011 and 2012 of approximately 3 Bcf. Kinder Morgan has achieved those reductions by implementing cost-effective measures to reduce methane releases from its operations and by repairing identified leaks. Various technologies have been implemented to reduce methane emissions including, but not limited to:

 Implementation of directed inspection and maintenance programs at our compressor stations and other surface facilities (e.g., meter stations);

 Replacing rod packing systems on some reciprocating compressor engines, in certain circumstances;

 Replacing high-bleed pneumatics;

 Installing vapor recovery systems on storage tanks;

 Pumping or drawing down sections of pipe prior to conducting maintenance activities;

 Installing full encirclement or composite sleeves for pipeline maintenance to eliminate the need for pipeline blowdowns; and

 Installing either gas turbines or electric motor driven compression, as appropriate, rather than installing reciprocating compressor engines.6 Historically, Kinder Morgan’s greatest reductions come from preventing natural gas venting or “blowdowns” of pipeline sections prior to conducting maintenance activities. Drawing down pressures with existing compression, using portable compressors to recompress gas into other pipelines or pipeline sections, and the use of full encirclement or composite sleeves reduces the amount of natural gas that would otherwise be released into the atmosphere when conducting maintenance activities (when appropriately applied, considering safety and other concerns). Kinder Morgan’s own efforts to voluntarily reduce methane emissions demonstrate that strict command and control regulatory regimes are simply not the best answer for reducing methane emissions from the oil and natural gas sector, and particularly the transmission and storage sector. Rather, the industry should seek to identify high-impact, cost-effective mitigation options for the greatest emission sources. Further information about proposed and preferred approaches are provided below.

VI. NATURE OF THE NATURAL GAS PIPELINE SECTOR

According to EPA, the driving force behind proposed regulations is the dramatic increase in upstream production in the last several years. Importantly, compressors (such as those in the transmission and storage sector) have not been increasing in linear relation to upstream production. Additionally, as new natural gas pipeline infrastructure occurs, the new systems will be more efficient and have even fewer emissions.

The transmission and storage sector of the natural gas industry proves very complex and in most circumstances is heavily regulated by DOE through FERC, and the Department of Transportation through PHMSA, particularly for safety purposes. In fact, PHMSA has established programs requiring operators to implement fixed gas detection and alarm systems in each compressor building and to develop procedures for leak surveillance and repair. For example, under 49 C.F.R. Section 192.613, PHMSA requires that each operator “have a procedure for continuing surveillance of its facilities to determine and take appropriate action concerning changes in class location, failures, leakage history, corrosion, substantial changes in cathodic protection requirements, and other unusual operating and maintenance conditions.” See 49 C.F.R. § 192.613(a); see also 49 C.F.R. § 192.736 (requiring gas detection

e q u i p m e n t) ; 4 9 C

. F

. R

. § 1 9 2

. 7 0 3 ( b )

− (c) (“ E a c h s eg m e n t of p i p e l i n e th at b eco m es u n s afe m u st be replaced, repaired, or removed from service; Hazardous leaks must be repaired promptly.”).

Natural gas pipelines do not own the gas that they transport; rather they function like a toll road and are paid a transportation fee. Kinder Morgan and other natural gas pipeline companies compete against one another in a highly competitive market and cannot, contrary to some misconceptions, automatically pass on regulatory costs to their customers. Even though Kinder Morgan operates pipelines subject to regulatory oversight by FERC and other federal and state agencies, Kinder Morgan operates in markets in which other natural gas pipeline companies regularly compete for pipeline business through discounting and other competitive market practices. Rate proceedings to establish shipping rates for an interstate natural gas pipeline do not occur annually, and typically occur only once every several years. Thus, new costs incurred between rate cases—such as increased regulatory costs caused by new regulation—cannot be automatically added to the shipping rate and are instead born by the pipeline company.

Moreover, while interstate natural gas pipelines are regulated by FERC, intrastate pipelines, gathering systems, and gas plants are not subject to FERC jurisdiction. Each of the production and consuming markets in the United States is served by multiple pipeline operators.7

Therefore, all Kinder Morgan natural gas pipelines and facilities compete in the marketplace for services provided to existing and new shippers and customers as well as for new expansion projects through competitive contract negotiations, regardless of whether they are subject to FERC regulation or not. Cost competiveness, services provided and service reliability are major factors in maintaining current customer commitments/contracts and in obtaining new business. Similar to other industries potentially subject to requirements to reduce methane emissions, natural gas pipeline companies are also impacted by the competitive marketplace and these companies have to manage their costs of providing gas transportation services. If these costs are not properly managed, the companies will not be able to compete in the market place. Thus, proposed efforts to reduce methane emissions, particularly through a command and control regulation that may not focus properly on the most efficient and significant sources or that incorrectly assumes that all costs will be recouped by natural gas savings, causes great concern to Kinder Morgan.

Importantly, Kinder Morgan operates high pressure pipelines. As a result, Kinder Morgan does not have the “leak tolerances” that perhaps others operating lower pressure gathering and utility service lines are allowed. A breech of natural gas pipelines in the transmission and storage sector can result in a serious event that should be avoided at all costs. To avoid such an event, Kinder Morgan devotes considerable money, technology, labor, and other resources, to identify pipeline sections that need to be repaired or replaced, even in the absence of methane regulations requiring reduction of leaks.

VII. EPA SHOULD NOT REGULATE EXISTING SOURCES

In several places, EPA’s White Papers discuss retrofitting of sources, replacement of sources, and other statements that suggest that EPA may be considering reduction of methane from existing sources. As noted elsewhere in these comments, Kinder Morgan recommends a flexible, company-driven approach to methane reductions and specific to existing sources, strongly urges EPA not to regulate existing sources at this time. Specific to the transmission and storage sector, EPA has not yet sought to regulate new sources. As such, regulation of existing sources would be premature. Furthermore, EPA has not yet regulated the sources at issue (compressors, pneumatics, and leaks) for GHG or methane emissions. As EPA understands, EPA does not have unfettered authority to impose nationally-applicable standards of performance on existing sources under Section 111(d) of the Clean Air Act (CAA). See, e.g. EPA, Proposed Rule, “Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” at (June 2, 2014) (the “Clean Power Plan”) (“Under the authority of [CAA] [S]ection 111(d), the EPA is proposing emission guidelines for states to follow in developing plans to address [GHG] emissions from existing fossil fuel-fired electric generating units.”) (emphasis added). In fact, Section 111(d) does not directly authorize EPA to establish standards of performance for existing sources; rather, Section 111(d) directs EPA to “prescribe regulations which shall establish a procedure similar to that under [CAA Section 110] under which each State shall submit to [EPA] a plan which . . . establishes standards of performance” for existing sources within that state. See 42 U.S.C. § 7411(d)(1) (emphasis added); see also 42 U.S.C. § 7411(d)(1) (EPA’s authority to devise standards of performance for existing sources is limited to the situation “where a State fails to submit a satisfactory plan.”).

As directed by Section 111(d) of the CAA, in 1975, EPA promulgated regulations to “establish a procedure” for states to develop standards of performance for existing sources. Under this statutory and regulatory scheme, EPA bears the burden of providing guidance to states in the8

form of a “guideline document.” See 40 C.F.R. § 60.22 (“Concurrently upon or after proposal of standards of performance for the control of a designated pollutant from affected facilities, the Administrator will publish a draft guideline document containing information pertinent to control of the designated pollutant from designated facilities.”). Specifically, to inform states’ respective plans under Section 111(d), EPA must provide to the states an emission guideline “that reflects the application of the best system of emission reduction (considering the cost of such reduction) that has been adequately demonstrated for designated facilities.” See 40 C.F.R. § 60.22(b)(5) (emphasis added); see, e.g. , the Clean Power Plan, at 15 (proposing a system of GHG emissions reduction “[b]ased on evidence from programs already being implemented by many states as well as input received from stakeholders”). In August 2012, EPA published new source performance standard (NSPS) OOOO, which regulates VOCs at oil and gas sources only, but not methane. See 77 Fed. Reg. 49,490, 49,493 FN2 (Aug. 16, 2012) (“While we expect that these avoided emissions will result in improvements in air quality and reductions in health effects associated with HAP, ozone and particulate matter (PM), as well as climate effects associated with methane, we have determined that quantification of those benefits and co-benefits cannot be accomplished for this rule in a defensible way.”). Where, as here, there is no existing system for methane emissions reductions (much less a “best” system) that has been adequately demonstrated to predicate a methane emissions performance standard, EPA’s authority under Section 111(d) remains constrained with respect to existing oil and gas sources.

VIII. EPA SHOULD CONSIDER VOLUNTARY PROGRAMS AND OTHER MECHANISMS (I.E., NO RULEMAKING)

Prior to adopting regulations specifically regulating methane emissions from the transmission and storage sector, the Obama Administration should evaluate existing programs related to the transmission and storage of natural gas to determine if there are readily available mechanisms to achieve methane emission reductions without development of a significant new regulatory program. Such programs include EPA’s own Natural Gas STAR program.

Significantly, Kinder Morgan believes that there are more effective ways to reduce methane emissions from the transmission and storage sector than those discussed in the EPA White Papers. More specifically, Kinder Morgan recommends that the Obama Administration take necessary steps to reduce the number of unnecessary blowdowns from the transmission and storage sector caused by changes in the class location of pipeline segments. Under PHMSA regulations, pipelines are subject to different requirements based upon, their “class location.” Class location is determined on a location-by-location basis depending upon the density of the buildings along the sliding mile of the pipeline. PHMSA regulations currently require installation of new pipe with limited exceptions, when population density changes the class location of the pipe. To replace a pipeline, the pipeline operator must blowdown the entirety of a segment of pipe (approximately 10 to 15 miles) in order to replace the pipe along any portion of that segment. In a blowdown, the pipeline operator releases to the atmosphere the entire contents (pure natural gas) of the pipeline.

These emissions, which vary depending upon the diameter of the pipeline, can exceed those anticipated from other sources anticipated for reduction by EPA, specifically leaks. For example, a blowdown of a 15 mile segment of 30” natural gas pipeline will result in a release of approximately 20MMcf of natural gas (or methane). In lieu of replacing the pipelines when there is a change in class location, operators have proposed that PHMSA revise its regulations to allow the use of integrity management programs (including pigging and close interval surveys) which will provide an9

additional margin of safety while avoiding wasteful replacement of pipe and otherwise unnecessary blowdown emissions. By adopting such integrity management systems, PHMSA would ensure safety appropriate to a particular class, while significantly reducing emissions of methane far beyond the emissions contemplated by the current white papers.

To put the emissions from pipeline blowdowns necessitated by changes to class location in perspective, Kinder Morgan currently has to blowdown on average 8 to 10 segments per year under PHMSA’s regulations for class location. See 49 C.F.R. § 192.611. Collectively, upgrading 10 segments of pipeline per year would result in approximately 200 MMcf (91,300 metric tons of CO2e) of methane emissions. Kinder Morgan operates approximately 25% of the nation’s transmission lines, so nationwide the amount of methane released to unnecessarily upgrade pipelines is significant Instead, if PHMSA would adopt revised regulations allowing for integrity management in lieu of pipeline replacement, these tons of methane could be preserved each year. Revisions to provide an alternative to pipe replacement under the PHMSA class location rules to reduce pipeline blowdown should be promoted in lieu of a more detailed regulatory program by EPA. In doing so, however, EPA must be cognizant of the fact that pipeline operators frequently cannot always control the timing and need for blowdowns in emergency situations to maintain pipeline integrity and assure safety. However, where such blowdowns are not required for safety, and instead are driven by existing regulations (as described above), the Obama Administration should adopt revisions to reduce the frequency of those blowdowns.

IX. LESSONS LEARNED

Prior to initiating any rulemaking, EPA should better understand the difficulties and uncertainties related to implementation of methane regulations, such as those adopted in Colorado in February 2014. Those regulations have been promoted by many (including the environmental community) as setting forth appropriate, technologically achievable, and cost-effective levels of methane regulations. Kinder Morgan maintains not only that the methane regulations in Colorado (a state in which Kinder Morgan operates) are not as cost-effective as touted, but are also ambiguous and uncertain in many instances. After the rulemaking, the Colorado Department of Public Health and Environment, Air Pollution Control Division developed a draft of frequently asked questions, provided one guidance memorandum, and has undertaken other efforts to evaluate information relevant to the adopted regulations. Though Kinder Morgan appreciates the time and commitment that the Air Pollution Control Division has devoted to resolving the many outstanding questions and issues, the presence of these significant issues warrants careful consideration by EPA as to the available data, current technologies, and costs associated with any requirements to reduce methane in the oil and gas sector. EPA should take the necessary time to evaluate emissions data (including from ongoing studies), better understand available technologies (including from implementation of the Colorado program and pending studies), and provide operators time to provide more accurate assessments of costs (particularly as those operators in Colorado learn more about the true costs of compliance), before proceeding with any decisions as to reductions of methane (or mechanisms for such reductions).10

X. KINDER MORGAN SOURCE SPECIFIC COMMENTS

A. General Comments

As previously stated, Kinder Morgan incorporates by reference API and INGAA comments related to emissions information presented by EPA in the white papers. Specific concerns noted by API and INGAA and shared by Kinder Morgan include but are not limited to:

 EPA’s White Papers should distinguish between studies (which provide original or additional emission data) and papers (which use existing emissions data).

 EPA’s White Papers should contain a detailed assessment or critique of each of the studies and papers cited, including other studies or papers that have refuted the information in those studies and papers.

 EPA’s White Papers should acknowledge the need to update some of the emissions data relied upon both by EPA and many of the papers cited by EPA.

 EPA should rely upon the GHG reporting data as the primary source of measured emission data in the future and compare that data with other studies and data sources.

 EPA overstates the emissions factors for several of the sources.

Importantly, EPA should reference or acknowledge the numerous ongoing initiatives and studies to understand methane emissions from the natural gas sector, including ongoing studies related to pneumatics and well liquids unloading. Kinder Morgan incorporates by reference comments by API and INGAA on these issues. Kinder Morgan has been engaged with Colorado State University (CSU), Environmental Defense Fund (EDF), and other industry partners to develop additional information regarding methane emissions from the transmission and storage sector. CSU is the lead investigator for this study and they are working with EDF and seven transmission and storage industry companies, including Kinder Morgan, to analyze the methane emissions associated with onshore natural gas transmission compressor stations and underground natural gas storage facilities located within the United States. Together, these industry partners represent roughly 60 to 70 percent of the overall transmission and storage industry segment in the United States.

The CSU study includes a combination of on-site field measurements at compressor stations in the transmission sector and at underground natural gas storage facilities and an analysis of existing methane emissions. The combined on-site field measurements and industry partner data has been used to develop a computer model that will seek to estimate the overall U.S. methane emissions associated with this transmission and storage segment to augment the methane emissions currently reported for the transmission and storage segment under 40 C.F.R. Part 98, Subpart W of the Greenhouse Gas Reporting Program, and the EPA’s National GHG Emissions Inventory. This transmission and storage methane emissions study is expected to be released during the second half of 2014. Any evaluation of mechanisms for achieving methane reductions from the transmission and storage sector should be delayed until after the release of that study and EPA has time to assess the data from that study which will specifically cover components leak rates.11 Furthermore, EPA seeks to assess costs of development and incorporation of technologies but does not indicate how EPA plans to analyze the cost per ton of emission reduced to determine cost-effectiveness of the potential reduction technologies or requirements. While the EPA White Papers discuss the cost of equipment and technologies available to reduce methane emissions from oil and gas sources, the EPA White Papers do not evaluate the cost-benefit of methane (or even a CO 2 equivalent) emissions reductions achieved through implementation of the proposed emissions mitigation techniques. Lack of a substantiated cost-benefit analysis constitutes a fundamental error in EPA’s economic analysis. Kinder Morgan asserts that EPA’s proposed mitigation techniques are not all, in fact, cost-effective for the transmission and storage sector.

Not only has EPA not presented a measureable cost per ton of methane reduced, EPA has not presented substantiated data to support its conclusion that any such costs would be reasonable. Kinder Morgan believes the general costs presented in the White Papers are in fact much greater than EPA estimates and the benefits much lower. In EPA’s recently proposed Clean Power Plan—which proposes control techniques to reduce CO 2 pollution from power plants—EPA estimated, for example, that the average cost of CO 2 reductions achieved through gas conversion or co-firing would range from $83.00 per metric ton of CO 2 to $150 per metric ton of CO 2 . See EPA, Proposed Rule, No. EPA-HQ-OAR-2013-0602, “Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” at 240 (June 2, 2014) (unpublished in Federal Register). In its economic analysis, EPA contends that the “system of emissions reductions” proposed would achieve “meaningful CO 2 emission reductions at reasonable costs.” See id. at 252. The same cannot be said for EPA’s proposed mitigation techniques to reduce methane emissions in the transmission and storage sector, which are expected to far exceed this range of values, particularly for smaller sources of emissions.

In fact, EPA chose not to directly regulate methane under the New Source Performance Standards OOOO two years ago in order to collect more accurate, comprehensive, sector-specific data upon which to base any methane-focused rule to regulate the oil and gas industry. See 77Fed. Reg. 49,490, 49,493 FN2 (Aug. 16, 2012) (“quantification of those [methane] benefits and cobenefits cannot be accomplished for this rule in a defensible way”). A mere two years (August 2012 to April 2014) has not been nearly enough time for EPA to develop a comprehensive, accurate, and defensible set of data to demonstrate the cost-benefits of regulating methane in the oil and gas industry, particularly the transmission and storage sector. Furthermore, because the impetus and results of reduction of methane is not primarily a health issue, the costs would need to be lower per ton of reduction (as set forth in the Clean Power Plan). Below Kinder Morgan addresses concerns and provides comments on the Compressor, Leaks and Pneumatics White Papers, in turn.

B. Compressors

1. Kinder Morgan Compressors

Kinder Morgan has a total of approximately 1,360 reciprocating compressors with approximately 280 at processing facilities and 1,080 in the transmission and storage sector. Approximately 20 of the reciprocating compressors at processing facilities are regulated under NSPS OOOO and any new reciprocating compressors at Kinder Morgan’s processing facilities would also be regulated under NSPS OOOO. NSPS OOOO requires Kinder Morgan to replace rod packing on reciprocating compressors installed after October 15, 2012, every 26,000 hours or 3612

months of operation. Kinder Morgan has a total of 150 centrifugal compressors using wet seals, with 2 at processing facilities and 148 in the transmission and storage sector. Kinder Morgan has a total of 194 centrifugal compressors using dry seals, with 4 at processing facilities and 190 in the transmission and storage sector. None of the wet seal centrifugal compressors at processing facilities are regulated under NSPS OOOO; however, any new wet seal compressors at Kinder Morgan’s processing facilities would be regulated under NSPS OOOO.

2. Emissions Assessment From Compressors

Kinder Morgan has significant concerns about the accuracy and scope of the emissions estimates and studies utilized by EPA, particularly with respect to the transmission and storage sector. In general, EPA should wait for further information under development as part of the Subpart W reporting program and through existing and soon-to-be completed studies specific to the transmission and storage sector.

a. EPA Cited Studies

In the Compressor White Paper, EPA identifies several currently available studies that quantify methane emissions and reduction technologies from the natural gas sector, including production, processing, transmission, storage, and distribution operations. Those studies included studies conducted by the Gas Research Institute (1996), URS and the University of Texas (2011), EPA (2012, 2013 and 2014), API and ANGA ((2012), and ICF International for the Environmental Defense Fund (2014).

b. Comparison of Studies

Kinder Morgan finds it difficult to compare or characterize the emissions from reciprocating and centrifugal compressors from each of these studies because the emissions data, as identified in the Compressors White Paper, are presented in different forms in each of the studies. Kinder Morgan provides the methane emissions reporting method for reciprocating and centrifugal compressors in the natural gas transmission and storage sector for each study Table 1 below:

Table 1 Study Methane Emission s Reporting Form

Reciprocating Compressor Rod

Packing Centrifugal Compressor Wet Seals Gas Research Institute (1996) Avg. Methane Emissions (Mscf/yr) 1
and Annual Methane Emissions MT/yr based on a population of 8195 compressors Avg. CH4 Emissions (Mscf/yr)

URS and the University of Texas (2011) Avg. CH4 Emissions (Mscf/yr) Avg. CH4 Emissions (Mscf/yr)

US EPA Oil & Gas NSPS Methane Tons per compressor/yr Methane Tons per

1 Mscf/yr = thousand cubic feet per year, scf/h = standard cubic feet per hour, and scf/min = standard cubic feet per minute. MT/yr = metric tons per year (also commonly referred to as tonnes).13

(OOOO), EPA 2011b & 2012a compressor/yr

US EPA National GHG Emission Inventory, EPA 2014 Annual Methane Emissions MT/yr based on a population of 8247 compressors Annual Methane Emissions MT/yr based on a population of 729 compressors US EPA GHG Reporting Program, EPA 2013 Annual Methane Emissions MT/yr based on a population of 2317 compressors Annual Methane Emissions MT/yr based on a population of 763 compressors American Petroleum Institute and the American Natural Gas Alliance (2012) Methane emission rate for rod packing not reported in this study. Annual methane emissions of 190,573 tons from oil and gas production sector. ICF International for the Environmental Defense Fund (2014) ICF identified a rod packing emission rate of 57 scf/h 1 Methane emission rate range of 40-200 scf/min per compressor

In order to conduct an analysis of the methane emissions from rod packing or wet seals, it is important to establish some consistent baseline emission rate. The emission rates in each of the studies identified in the Compressor White Paper all vary. Establishment of a consistent baseline emission rate or range of emissions is important for development of future national inventories and future policy decisions.

From the sample sets identified in each of the studies, it is readily apparent that data from the GHG reporting program (GHGRP) provides the most recent and extensive dataset of methane emissions measurement data. The GHGRP data included in the Compressor White Paper was derived from 2012 measurements at reporting sources. Kinder Morgan acknowledges that a portion of the GHGRP dataset includes emissions based on Best Available Monitoring Method (BAMM) calculations; however, even considering that fact, the GHGRP provides the most extensive dataset of actual methane emissions measurement data and continues to improve.

A direct comparison of compressor specific methane emission rates from the 2012 GHGRP data (released by EPA in 2013) with the 2014 GHG Emission Inventory with respect to the transmission and storage sector evidences that the US EPA National GHG Emission Inventory for Compressors in those sectors significantly overstate methane emissions. See Table 2 below for compressor population estimates, annual emissions per compressor and average methane emissions rates per compressor in the transmission and storage sector.

Table 2 US EPA National GHG Emission Inventory, EPA 2014 US EPA GHG Reporting Program, EPA 2013 Transmission Reciprocating Compressors (Rod Packing) Compressor Population 7,235 2,008 Compressor Annual Methane Emissions (MT/yr) 1 773,294 75,809

Average Methane Emission Rate per Compressor (MT/yr) 1 106.9 37.814

Storage Reciprocating Compressors (Rod Packing) Compressor Population 1,012 309 Compressor Annual Methane Emissions (MT/yr) 1 150,225 7,658

Average Methane Emission Rate per Compressor (MT/yr) 1 148.4 24.8

Centrifugal Compressors (Wet Seals, Transmission & Storage) Compressor Population 729 763 Compressor Annual Methane Emissions (MT/yr) 1 255,173 26,582

Average Methane Emission Rate per Compressor (MT/yr) 1 350.0 34.8

Centrifugal Compressors (Dry Seals, Transmission & Storage) Compressor Population 95 Not reported Compressor Annual Methane Emissions (MT/yr) 1 21,504 Not reported

Average Methane Emission Rate per Compressor (MT/yr) 1 226.4 Not reported

1 MT/yr = Metric Ton per year (also commonly referred to as tonnes).

Since the GHGRP is the most recent and comprehensive dataset, Kinder Morgan recommends that EPA use data from the GHGRP program as the basis for establishment of baseline emission rates, for incorporation into future national inventories and for any future policy decisions.

Data Discrepancies & Uncertainty

As indicated above, evaluation of the 2012 GHGRP data compared to EPA’s 2014 National GHG Inventory indicates that the average methane emission rate (MT/yr) per compressor is significantly lower for reciprocating and centrifugal compressors in the natural gas transmission and storage sector than what is reported in EPA’s 2014 National GHG Inventory. In light of these discrepancies, EPA should refuse to rely upon the inaccurate 2014 National GHG Emission Inventory and instead should include the relevant 2013 GHGRP data together with the existing 2012 GHGRP measurement data to provide further information regarding compressor emissions and to develop a more accurate average emission factors for reciprocating and centrifugal compressors, particularly in the transmission and storage sector. These average emission factors should also be incorporated into development of the 2015 National GHG Inventory (for the 2013 calendar year).

In addition to its concerns about the comparability of the studies and the validity of the National GHG Inventory, Kinder Morgan has particular concerns about important information EPA omitted from its discussion on the GRI/EPA Methane Emissions from the Natural Gas Industry, Volume 8: Equipment Leaks (GRI/EPA, 1996a) . Specifically, EPA fails to acknowledge in the Compressors White Paper the existence and extent of emission factor uncertainty for reciprocating compressor seal (rod packing) leaks in the GRI/EPA data. “Uncertainty” identifies and quantifies errors involved in a measurement and combines those to form an uncertainty value. As outlined in Table 4-15 of GRI/EPA, 1996a, the emission factor uncertainty for reciprocating compressor seal (rod packing) is extremely high at 96%. This means that the actual emission factor for compressor seal leaks ranges anywhere from 397 Mcf/comp-yr to 186 Mcf/comp-yr. This significant level or15

amount of uncertainty should be considered before developing rules to control this emission source and in fact counsels against development of regulations at this time. EPA should also acknowledge the uncertainty factor in Compressors White Paper Table 3-2, which outlines the summary of reciprocating compressor seal (rod packing) emission factors.

This high level of uncertainty undoubtedly has an effect on the 2014 GHG Inventory from the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1190-2012 (U.S. EPA, 2014) which calculates net methane emissions using the emission factors based on the GRI/EPA study (GRI/U.S. 1996a). As mentioned above, those emission factors have a range of uncertainty from +/- 53% to +/-276% (GRI/EPA, 1996a) . Based off of this information, the methane emissions per industry, per piece of equipment calculated in the Compressors White Paper Table 3-9 have little validity. Another emissions reference relied upon by EPA, Development of the New Source Performance Standards (NSPS) For Oil and Natural Gas Production (U.S. EPA, 2011b and U.S. EPA, 2012a), also utilized the GRI/EPA emission factor having an uncertainty of 95% in estimating emissions from reciprocating compressor rod packing in the transmission and storage industry segments. Again, the uncertainty in the emission factor should be outlined in Compressors White Paper Table 3-10 in the column following the identified methane emission factor. Compressors White Paper Table 3-11 indicates (based on the outdated emission factors) that the transmission and storage segments have the highest methane emissions per ton per compressor per year. However, the significant amount of uncertainty precludes EPA from drawing conclusions from the data provided in this analysis due to the large uncertainty in the basis of the calculations. In fact, and as noted in INGAA’s comments, the emissions for reciprocating compressors are over 7 times higher in the national inventory than Subpart W and emissions for centrifugal compressors are over 30 times higher in the national inventory than Subpart W.

c. Additional Studies

Pipeline Research Council International Report

In addition to further increasing its reliance on the GHGRP dataset, EPA should consider review of additional studies regarding methane emissions and reduction techniques. Kinder Morgan has been and continues to participate in industry sponsored research regarding methane emissions and reduction techniques. As noted above, Kinder Morgan is currently participating in the EDF/Industry collaborative methane emissions inventory study being conducted by CSU. Kinder Morgan is also participating in a comprehensive study by the Pipeline Research Council International, Inc. (PRCI) on methane reduction techniques. The PRCI study is expected to provide a summary of existing GHG emission reduction technologies and work practices for application at transmission and storage compressor stations. Both the CSU and PRCI studies are anticipated to be finalized later this year.

Kinder Morgan recommends that the EPA delay any decisions on future methane reduction policies until the results from these studies can be produced, reviewed, and coordinated with DOE’s efforts under the Methane Strategy. Kinder Morgan believes that these crucial studies will provide significant new information regarding actual methane emissions and potential emission reduction techniques for the transmission and storage sector. Therefore, EPA should include the results from these studies into any future policy decisions.16 d. Kinder Morgan Emissions Data

Kinder Morgan has certified and submitted the following number of GHG reports in e-GGRT in 2011, 2012, and 2013 as a result of being subject to reporting under Subparts C, W, and/or NN of 40 C.F.R. Part 98.

 2011: 112 facilities reported.

 2012: 136 facilities reported.

 2013: 141 facilities reported. 2

The vast majority of the above facilities triggered the requirement because of combustion emissions exceeding 25,000 tons, which led to the need to complete annual surveys and measurements under Subpart W. Table 3 provides a summary of Kinder Morgan actual compressor measurement data compiled from 2011 to 2013 for the facilities that triggered GHG reporting under 40 C.F.R. Part 98 and approximately 212 additional facilities that did not trigger GHG reporting where compressor measurements were also performed over the last 3 years.

Table 3 Kinder Morgan Methane Emission Rates for Reciprocating and Centrifugal Compressors (2011 to 2013 Subpart W Measurements)

Compressor Emission Source KM Total # Compressor

Units Measured* KM Total # Compressor Units w/Methane Emissions** KM Average Methane Emission Rate per compressor (scf/minute) KM Average Methane Emission Rate per compressor (MT/year) Recip. Rod Packing 1250 1152 3.89 39.23

Recip. Blowdown Valves 1088 384 1.55 15.62

Recip. Isolation Valves 1190 863 4.63 46.72

Centri. Wet Seal Vents 73 53 0.88 8.85

Centri. Blowdown Valves 160 62 9.21 92.96

Centri. Isolation Valves 410 198 3.02 30.43

Centri. Dry Seal Vents*** 15 15 1.66 16.78

*Total number of compressors measured by Kinder Morgan from 2011 to 2013. This total includes those facilities that triggered reporting under Subpart W and some additional facilities not reported under Subpart W. **Total number of compressors that had measurable methane leaks from 2011 to 2013. ***Additional measurements that are not required by Subpart W for centrifugal dry seal compressors. Recip.: reciprocating Centri: centrifugal scf/minute: standard cubic feet per minute of methane MT/year: metric ton per year of methane mass emissions = scf/minute x 60 x 8760 x 0.0192 kg/ft^3 x 0.001.

Although this table provides a cumulative roll-up of the first three years of Subpart W monitoring data with respect to compressor, the data indicate that natural gas compressors will have

2 Reported facilities vary year to year based upon sale and purchase of assets since the prior reporting period.17

some amount of leakage every year due to the inherent nature of their operation at high gas pressures, temperatures, vibrations, and the amount of piping and equipment required for operation. In order to minimize the amount of leakage and product loss, formal and consistent operating, repair, and replacement practices should be used to reduce the methane leakage associated with compressors, and specifically those components of compressors with the greatest emissions.

Importantly, the compressor emission sources with the highest per compressor methane emission rates are the centrifugal blowdown valves and reciprocating compressor isolation valves. Here, however, the repair or replacement of these valves is not performed on a regular basis because it requires the complete isolation and blowdown of the respective compressor units in order to perform this repair or replacement. In fact, in the short-term, the repair or replacement activity at these sources could result in greater methane emissions vented to atmosphere thereby minimizing or cancelling out any short-term reductions achieved through the repair or replacement.

The Kinder Morgan annual emission rate per compressor per year (in MT/year) in the last column is similar to the reciprocating rod packing emissions data reported for the overall transmission and storage segment under EPA’s GHGRP, and the Kinder Morgan data is much lower than the wet seal emissions data reported for the overall transmission and storage segment under EPA’s GHGRP. The Kinder Morgan annual emission rate per compressor for reciprocating rod packing and wet seal vents is also several times lower than the emissions reported under the EPA’s National GHG Emission Inventory Report for 2014. Kinder Morgan conservatively based the MT/year rate on 8,760 hours for each of the different emission source categories in order to provide a common comparison between the different emission sources. For the reciprocating and centrifugal isolation valve sources, this 8,760 hour/year assumption is overly conservative since these valves are only used when depressurizing and isolating a compressor; a rare occurrence for many compressors. In actuality, the amount of time spent in this depressurized mode (which requires the closing of the isolation valves) is roughly ten (10) to thirty (30) percent of the year for most compressors depending upon its frequency of utilization.

Interestingly, the emission source with the lowest methane emission rate is centrifugal wet seal vents. Based on this measured data from 2011 to 2013, these centrifugal wet seals appear to be functioning as designed to minimize gas leakage to atmosphere. Kinder Morgan also includes data from fifteen (15) measurements that were taken on some of our centrifugal dry seal vents. Although these measurements are not required under Subpart W, Kinder Morgan decided to take measurements on some dry seal centrifugal compressors in order to gain a better understanding of the potential for leakage from these types of units. Based on these measurements, it shows that leakage may occur from dry seal units at a rate higher than wet seal units. Notwithstanding, Kinder Morgan’s data indicates that dry seal emissions are lower than EPA’s emissions data presented in the White Papers. This empirical data demonstrates that retrofitting wet seal compressors with dry seals may not result in the expected methane reductions, but rather the opposite effect of potentially increasing methane leakage. Even though this data shows that dry seals do have methane leakage, it is still much lower than other compressor emission categories.

In summary, Kinder Morgan hopes that this actual measured data collected over the last three years provides EPA some additional insight and direction on the emissions associated with reciprocating and centrifugal compressors and the sources that have the potential for the greatest level of methane reduction while thoroughly considering any technical obstacles that could prevent achieving those reductions.18 3. Technologies for Methane Reductions

EPA sets forth its understanding of potential technologies available to reduce methane emissions from rod packing associated with reciprocating compressors and from wet seals associated with centrifugal compressors. Kinder Morgan provides more specific information regarding the availability, usability and costs of those technologies below.

a. Reciprocating Compressor

Rod Packing

Section 4.0 of the Compressor White Paper describes the available compression emission mitigation techniques. EPA specifically references the importance and benefits from replacing rod packing on a certain frequency to ensure that emissions from rod packing are reduced, as well as new technologies that enable emissions to be captured and either routed to a combustion device or a useful process.

 Rod Packing Replacement

As described in the Compressors White Paper packing rings wear over time allowing more natural gas to escape around the piston rod. Kinder Morgan agrees that performing rod packing replacements is important in reducing emissions as well as ensuring that our equipment is being properly maintained but thinks that the time frame for replacement should be dictated on the actual wear of the rings, rather than a prescriptive interval. Kinder Morgan would recommend implementation of a rod packing condition based maintenance program rather than a specified time based maintenance program.

 Vapor Recovery Unit System

Section 4.2.1 of the Compressors White Paper describes recovery of the natural gas leaking past the piston rod packing by utilizing a vapor recovery unit (VRU) system. In Kinder Morgan’s experience (with utilizing VRUs to control emissions from storage tanks), these systems inherently have issues and are unreliable. Importantly, VRUs have to be completely sealed; a task incredibly difficult to achieve. In fact, even with the use of a natural gas or nitrogen blanket, the systems pull air, more specifically, oxygen and moisture into the system. This influx of oxygen can cause safety concerns related to the potential for explosion and internal corrosion of the pipeline (NACE 96612). 3 When VRUs are used to control tanks, the natural gas liquids have a tendency to also get collected with the captured gas; inevitably destroying the associated compressor. Currently, in those contexts in which Kinder Morgan uses VRUs, Kinder Morgan has developed systems to shut the VRU and associated compressor down in such an event. This needs to be considered when attempting to transfer this technology to rod packing vent lines and is further described below.

As noted in the Compressors White Paper, the use of a VRU to capture rod packing emissions would require installation of a small compressor to compress this low pressure/low

3 NACE International, The Corrosion Society, “96612 Effect of Oxygen on the Internal Corrosion of Natural Gas Pipelines.”19

volume packing leakage to the pressure rate necessary to pipe it to the VRU. Not only is this an additional emissions source at the facility, but the use of a small compressor creates an even greater likelihood of creating a vacuum and causing additional leakage from the rod packing or drawing air into the system. As with tanks, drawing air into the system creates a safety concern as it can cause an explosion as well as internal corrosion of the pipeline (NACE 96612). For example, some compressor stations currently have pressure switches installed in the vent pipe set at six inches of water (approximately 0.25 psi) for shutdowns. This safety mechanism has been put into place because if the pressure gets too high it could cause a safety issue. Installing a small compressor to draw a vacuum could render this safety shutdown inoperable. The possibility of additional oxygen in the gas needs to be considered when determining if it is safe to use the captured gas elsewhere in the process as suggested in the Compressors White Paper.

In addition, liquids such as engine oils and lubricants will cause severe problems if they are not removed before reaching the VRU’s compressor. Liquids cannot be compressed; therefore, if such liquids were to ever reach the VRU compressor it would cause serious damage to the equipment. A control method would be required to shut the system down if liquid is detected in the line. If this were to occur, the rod packing vent would be required to vent to atmosphere. If this flexibility was not allowed and the unit was required to be shutdown, the additional emissions caused by the subsequent blowdown should be considered in the emission reduction benefit analysis. A similar situation could occur in the reverse direction. Specifically, to mitigate pulling any additional methane out of the system a very small pressure differential is targeted. If the system is ever found to have a negative pressure then that would allow liquids to get into the crankcase, which would in turn damage the large reciprocating compressor. In the case of a compressor at a transmission compressor station, if natural gas demand is high and the unit needs to run there could be serious repercussions if a compressor has to be shut down for maintenance due to liquids getting into the crankcase. These common issues also increase the amount of maintenance required at a station and subsequently the annual operating costs.

Section 4.2.1 of the Compressor White Paper is inaccurate in assuming that if the proper vapor recovery equipment is already available at the facility, capturing the rod packing gas would be as simple as routing the rod packing vents to the tanks allowing the gas to be picked up by the VRU. The vent systems for different compressors should not be tied together for safety reasons; therefore, each compressor would require its own VRU. Separate vents eliminate the chance of excessive rod packing leakage from one unit to cause issues with other units. Therefore, it is incorrect in Compressor White Paper Section 4.2.3 to assume that the incremental cost of additional piping to capture rod packing vent gas at a facility with a VRU already present can be recovered from the value of additional gas captured. The cost of implementing the system would need to be multiplied by the number of compressors at a station, which in some cases could be greater than ten.

Another safety concern with utilizing a VRU on rod packing vent lines is that if a malfunction were to occur causing negative pressure to misdirect the natural gas back toward the rod packing, it would cause the area surrounding the compressor to be engulfed in natural gas, which has the potential to cause a serious flash fire.

The use of a flare to control rod packing emissions captured with a VRU and that has no other meaningful use onsite would not be cost effective. First, the level of emissions from rod packing would not be sufficient to run the flare without use of additional pilot gas. In fact, one flare vendor has indicated to Kinder Morgan that 78 standard cubic feet of gas per hour (scfh) of pilot gas20

is required for their flares ranging in diameter from 4 inches to 24 inches. Assuming $4/Mcf of gas, that would be an additional cost of $2,733.12 per year per flare (or $3,711,576 total for Kinder Morgan’s operation) in pilot fuel since the natural gas from the rod packing would not be sufficient to run the flare. In addition to the fuel required for the pilot gas, if the flare would be required to meet 40 C.F.R. Section 60.18 or 40 C.F.R. Section 63.11, General Control Device and Work Practice requirements, additional fuel would be needed to increase the heat content of the gas to ensure compliance. The associated costs (both environmentally and economically) of the additionally lost fuel would need to be considered in the cost effectiveness of this control method. In addition, it should be noted that along with the criteria pollutants formed via combustion (e.g. CO and NOx), CO 2 is formed by oxidation of fuel hydrocarbons, nitrous oxide is formed in combustion zones and some fuel methane escapes combustion.

Unlike upstream operations, transmission and storage compressor stations rarely have existing flares or vapor recovery systems that would allow an operator to transfer the vapor recovery technology for use on rod packing vent lines. Such technology has many safety and operational implications that were not addressed in the Compressors White Paper. There appears to be no sound research or industry experience that points to vapor recovery being a viable control technology for rod packing emissions, particularly in the transmission and storage sector. Additional research would be required to determine technical feasibility and address these safety concerns.

 REM SlipStream® SA Technology

The Compressors White Paper references REM’s SlipStream® SA Technology for capturing and recovering methane emissions from rod packing systems. The SlipStream® SA Technology utilizes the turbocharger on the engine as a venturi to draw a slight vacuum on the vent piping. After going through a knock-out drum and a demister to remove any oils and lubricants it is feed to theirSlipStream® equipment. Their system monitors the gas flow back into the system which eases airto-fuel ratio and safety concerns. The vented gas is then reintroduced into the intake air after the engine air filter. By re-entering the steam into an already low pressure stream, no recompression is required. While this technology has been applied on several rod packing systems within the industry, Kinder Morgan has safety concerns related to the REM SlipStream® technology due to the potential that excess natural gas can be allowed into the system and has the potential for engine damage or explosion. At best, the REM SlipStream® technology should be viewed as a developmental technology. Further applications and operational history would be required to assure that safety concerns, system reliability and other potential operating issues have been resolved prior to any mandatory requirement to implement this technology nationwide.

Alternative Technology to Control Compressor Emissions

Instead, Kinder Morgan suggests alternatives to those provided by EPA in the Compressor White Paper. As noted above, Kinder Morgan data related to compressor methane emissions indicates that other compressor events, including vented emissions from planned maintenance, may result in greater methane emission reductions than those from rod packing. As such, Kinder Morgan recommends that EPA re-evaluate the most relevant sources of emission from compressors (particularly in the transmission and storage sector) and further evaluate practices that assist in reducing those emissions.21  Compressor Burn Down Technique

Several Kinder Morgan compressor stations use a compressor piping burn down system to reduce the volume of natural gas vented to atmosphere during planned maintenance activities. This burn down technology is applicable for high pressure compressors and is not related to rod packing vents. These burn down systems involve piping, valves and regulators required to connect individual compressor unit piping to the station fuel gas system. When connected for service, the station fuel gas system uses the compressor piping as an alternative supply of natural gas. This process allows the operating pressure contained in the compressor piping to be lowered to the normal station fuel gas pressure (typically 100 – 125 psi) before the compressor piping is vented to atmosphere prior to planned maintenance. Though this can be done in certain circumstances, the compressor burn down system has limited applicability due to the compressor station design and configuration. Broad application would not be appropriate; only a case-by-case application, considering safety (and other) concerns, would be reasonable.

Economic Evaluation

 Rod Packing Replacement

The cost for a rod packing replacement is much more complicated than described in the Compressor White Paper. Kinder Morgan contends that not only are the costs of $1,620/cylinder too low for piston rings, but there are also many other costs that could be incurred during a rod packing replacement. From our experience, the cost of piston rings can range from $1,760 on a 1600 hp compressor to $3,050 on a 5500 hp compressor without the cost of associated labor required for installation. In addition, whenever a rod packing replacement is to be performed, the entire cylinder must be taken apart. At that time, other pieces of equipment could be identified as needing maintenance including, but not limited to wiper packing replacement or repair, rod replacement or repair and packing case replacement or repair. These additional costs can add up to approximately $17,900/cylinder. A compressor blowdown would also be required at the time of a rod packing replacement. The associated cost from the gas lost also needs to be accounted for in the economic evaluation.

 Vapor Recovery Unit System

For any emission control technology that EPA were to mandate, it has to recognize that there is no economic benefit for the transmission and storage segment to capture the methane emissions lost since the transmission company does not own the natural gas. The control equipment would not have a payback period, similar to other segments of the industry. Instead, if required to put on controls, the tariff rates would have to be increased to supply the gas which would be passed on to the consumer. In sum, Kinder Morgan has significant concerns with any requirement to control or reduce methane emission from rod packing using a VRU system.

 REM SlipStream® SA Technology

The cost of the REM SlipStream® SA Technology is dependent on whether the compressor requires a standalone system, which would be the most likely choice for an existing compressor or an integrated panel, which is applicable for new compressors. When doing a cost analysis on this22

control methodology, the standalone system should be considered for a range of different compressor manufacturer model types.

b. Centrifugal Compressors (wet seal)

Centrifugal compressors require seals around the rotating shaft to prevent high-pressure gases from escaping the compressor casing. Traditionally, centrifugal compressors used a series of rotating rings around the compressor shaft to form a barrier to prevent gas from escaping. Seal oil was used to lubricate the rings and act as an additional gas barrier. Older vintage centrifugal compressors are commonly equipped with wet seals. Beginning in the late 1980s, centrifugal compressor manufacturers began install dry seals on new centrifugal compressors. Dry seals do not use any lubricating oil. New centrifugal compressors currently available for purchase by transmission and storage operators are equipped with dry seals.

The emission rates for wet seal centrifugal compressors in EPA’s 2014 national inventory are 50,222 scf/day/compressor for transmission and 45,441 scf/day/compressor for storage. In accordance with the GHGRP requirements, Kinder Morgan has conducted measurements on 73 centrifugal compressors equipped with wet seals between 2011 through 2013. Of those 73 compressors, only 53 compressors had methane emissions. The average methane emission rate from Kinder Morgan’s 53 centrifugal compressors that had measured leaks was 0.88 scf/min, which equates to 1,267 scf/day per compressor. See Table 3 above. The average emission rate from Kinder Morgan’s centrifugal compressors equipped with wet seals is significantly lower than the average rate identified in EPA’s National Inventory. Based on Kinder Morgan’s experience, a well maintained wet seal can operate at methane emission rates comparable to or less than dry seals.

While dry seals are standard equipment for new centrifugal compressors, many existing centrifugal compressors in the transmission and storage sector remain equipped with wet seals. Wet seals are an integral component of the centrifugal compressor so wet seal replacement with a dry seal is not a routine, simple, quick, or inexpensive task. Converting an existing wet seal centrifugal compressor with dry seals involves:

 Removing the oil seal system components and system accessories;

 Reworking the gas compressor to add the dry seal and any associated equipment;

 Rewiring the gas compressor and modifying the control system software; and

 Rebalancing the centrifugal compressor to assure proper operation following the seal replacement.
Since the compressor seal is an integral component of the centrifugal compressor, replacement of a wet seal with a dry seal requires that the centrifugal compressor be shut down and sent back to the manufacturer to compete this replacement. Because of the significant amount of work required to complete the replacement, the centrifugal compressor would be out of service for several months. For these reasons, seal replacements are normally coordinated with scheduled overhauls, compressor restaging, or other compressor maintenance projects.

Costs for replacing a wet seal on a centrifugal compressor will vary based on the compressor type (aero derivative or industrial type), make, model, physical size, horsepower rating, compressor and wet seal configuration and the type of dry gas seal selected (single face or tandem face dry gas seal). Additional considerations relate to the composition of gas being compressed. Dry seals may23

contain fluoroelastomer or spring-energized polytetrafluoroethylene ( PTFE) O-rings depending on gas composition. Fluoroelastomer O-rings can swell and degrade if exposed to some organic compounds (such as ketones, amines, esters and some alcohols).

Limited cost data for wet seal replacements is identified in the Compressors White Paper. The capital costs for replacing wet seals identified in the Compressors White Paper are:

 Subpart W OOOO technical support document $75,000.

 Natural Gas STAR Program (Table 4-4, Transmission and Storage) $75,000.

 ICF International (assumed retrofit capital cost) $400,000.

These studies do not identify the centrifugal compressor type, make, model, horsepower, or other centrifugal compressor specifications used to develop these capital cost estimates. In recent years, Kinder Morgan has obtained proposals to replace wet seals on specific Ingersoll Rand (IR) model CDP24 (July 2012) and Solar Centaur 40 T4702S (May 2014) centrifugal compressors. These IR and Solar centrifugal compressors are common, but not the only centrifugal compressors, used in the transmission and storage sector. The capital costs for these wet seal replacements

were:

 IR model CDP24, seal replacement options:

o Option 1 - Oil seal cartridge & internal shaft bearing $ 95,500

o Option 2 – Single dry gas seal cartridge & gas panel $ 309,700

o Option 3 - Tandem dry gas seal cartridge & gas panel $ 376,300

 Solar Centaur 40 T4702S :

o Dry Gas Seal Package System Upgrade $ 800,000

o Seal Gas Filtration (Solar recommendation) $ 65,000

o Total Cost $ 865,000
Based on the proposals obtained, timing for these wet seal replacements ranged from 28 to 30 weeks. The compressors would be out of service for that duration. There is considerable disparity between the capital cost values provided to Kinder Morgan and the capital cost assumptions in the studies in the Compressors White Paper. This disparity is likely due to an inability to compare the specifications on the types of centrifugal compressors identified and used to develop the cost assumptions in the Compressor White Paper referenced studies.

The studies identified in the Compressors White Paper also provide operating cost and methane reduction percentage assumptions for centrifugal compressors. Based on the capital cost disparity identified above, Kinder Morgan would expect similar operating cost and methane reduction disparities. Any assumptions in the Compressors White Paper regarding the cost effectiveness of retrofit wet seal replacements would be flawed due to the inaccuracies of the assumed capital and operating costs.

Kinder Morgan recommends that EPA obtain a list of commonly used centrifugal compressors within the oil and gas sectors, obtain specific capital and operating costs, and methane reduction levels for those commonly used centrifugal compressors prior to developing future policy decisions. EPA would also need to evaluate the timing associated with any requirement to retrofit the population of centrifugal compressors with wet seals remaining in service within the oil and gas24

sector. Any wet seal replacement policy or requirement would need to address manufacturer and other qualified vendor capabilities, parts and material supply, delivery schedules, and impacts to national gas supply and transportation capabilities.

C. Leaks

Kinder Morgan has an extensive network of pipelines used for transmission of natural gas exceeding 70,000 miles long. Along the pipeline network, Kinder Morgan operates more than 450 compressor stations to maintain the pressure in the pipeline and allow the natural gas to continue flowing through the network from source to destination. The compressor stations include components such as rod packing, centrifugal compressor seals, valves, connectors, pressure relief devices, etc. which have the potential for leaks. Based on the most recent reporting year, one hundred and forty-one (141) Kinder Morgan facilities triggered the requirements to report GHG emissions. The emissions from leaking components from such facilities are a small fraction of the emissions reported under Subpart W.

Kinder Morgan has significant concerns about the accuracy and scope of the emissions estimates and studies utilized by EPA, particularly with respect to the transmission and storage sector. In general, EPA should wait for further information under development as part of the Subpart W reporting program and through existing and soon-to-be completed studies specific to the transmission and storage sector.

1. Emissions from Leaks

a. EPA Cited Studies

As noted above, the GHGRP provides the most relevant information related to leaks from the transmission and storage sector. The Leaks White Paper includes several studies in the natural gas transmission and storage sector intended to describe the nature of methane emissions associated with leaking components. The conclusions drawn from these studies, specifically as related to emissions data and cost effectiveness, should be based on individual sectors such as gas production, gathering and processing, as well as transmission and storage because there are significant differences in the operational parameters affecting leaking rates and leak repair cost to warrant separate analysis for each of the above sectors. Conclusions should not be based on the analysis of a combined dataset.

b. Kinder Morgan Emissions Data

Kinder Morgan has certified and submitted the following number of GHG reports in e-GGRT in 2011, 2012 and 2013 as a result of being subject to reporting under Subparts C, W, and/or NN of 40 C.F.R. Part 98.

 2011: 112 facilities reported.

 2012: 136 facilities reported.

 2013: 141 facilities reported.25

The vast majority of the above facilities triggered the requirement because of combustion emissions exceeding 25,000 tons, which led to the need to complete annual surveys and measurements under Subpart W. Table 4 provides a summary of Kinder Morgan actual equipment component leak counts that were identified with an Optical Gas Imaging (OGI) camera compiled from 2011 to 2013 as well as approximately 212 additional facilities that did not trigger GHG reporting.

Table 4 Kinder Morgan Average Equipment Component Leak Counts (based on OGI annual surveys from 2011 to 2013)

Equipment Component Emission Source 2011 Average # Components Leaking Per Facility 2012

Average # Components Leaking Per Facility 2013

Average # Components Leaking Per Facility Kinder Morgan

3 Year Average # Components Leaking per Facility Kinder

Morgan Total # Components Leaking (2011 to 2013) Connector (comp. service) 5.52 6.38 6.06 5.96 1203

Connector (non-comp. service) 3.67 3.93 4.85 4.15 1476

Meters (comp. service) 3.00 0 1.00 2.00 4 Meters (non-comp. service) 1.21 1.55 1.00 1.32 37

Open ended line (comp. service) 3.63 4.11 2.79 3.57 368

Open ended line (noncomp. service) 1.88 2.16 2.78 2.26 468

PRV (comp. service) 1.93 2.83 3.28 2.73 120 PRV (non-comp. service) 1.78 1.46 4.10 2.43 221

Valves (comp. service) 5.75 6.66 4.29 5.80 1056 Valves (non-comp. service) 3.90 3.97 3.01 3.70 1190

Comp. service: component associated with a compressor in gas service Non-comp. service: component associated with non-compression in gas service

Kinder Morgan notes that in evaluating each individual year of OGI surveys, there is variability in the number of component leaks from year to year. There is always going to be variability in the number of leaking components found every year due to the inherent nature of these operating facilities at very high gas pressures and temperatures, variable weather conditions, equipment vibrations, and the significant amount of piping required for operation.

c. Other Considerations and Lessons Learned

Case studies from the Natural Gas STAR program indicate that direct inspection and maintenance (DI&M) programs help reduce costs and enhance profitable leak repair at the partner facilities where such programs were implemented. The main lesson learned from such studies indicate that a relatively small number of large leaks contribute most of a compressor station’s fugitive emissions and a targeted DI&M program helps reduce leaks from components that are found to most likely leak and are economic to repair. The study also showed that some compressor stations are more leak prone than others and a DI&M program helps identify those frequent leakers through survey and focuses repair efforts on those facilities. Such a program also helps develop a26

system for repairing the most severe leaks first and incorporating minor leaks into regular operation and maintenance (O&M) practices. The experience of program partners showed a net savings range of $48,490 to $492,780 based on participation of 2 to 67 compressor station facilities.

d. Directed Inspection and Maintenance Program

Based on the above information and Kinder Morgan’s own experiences, Kinder Morgan recommends that EPA refrain from developing regulatory command and control requirements to reduce methane emissions at this time, particularly in the transmission and storage sector. Instead, operators should either be encouraged to develop (or if necessary, required to develop) a DI&M program. Kinder Morgan would be willing to work with EPA to provide a sample DI&M plan for EPA’s consideration as it consider these and other comments.

As noted above, the basic premise of DI&M program is that, at a transmission and storage facility, a relatively small number of leaking components account for the vast majority of leaking emissions, and therefore, it is highly cost-effective to focus on identifying that small number of leaking components and repairing them instead of conducting a full scale leak detection and repair program. Lessons learned from the Natural Gas STAR partners indicate that 95 percent of methane emissions in transmission and storage sector occur from 20 percent of the leaky components.

Any DI&M program begins with a baseline survey of all potential leaking componentsincluding screening and measurement followed by identification of candidates for repair and followup survey for future based on specific cost and payback criteria. A DI&M program is a “living” document and should be tailored to the needs of a specific operator rather than developing a generalized plan to fit all entities within the transmission and storage sector.

Data sources from EPA, DOE, industry reports, EPA Natural Gas STAR program reports, industry literature, and engineering judgment and experience identify DI&M as an appropriate GHG reduction work practice for fugitive emission sources for all potential emitting components at compressor stations.

There are significant benefits from a DI&M program in Kinder Morgan’s experience with DI&M. Specifically, the primary benefit of a DI&M program is its cost-effectiveness. A traditional LDAR program is time-consuming and costly, and emission reduction benefits decrease over time. Repair of all leaking components found during a traditional LDAR program may require expenditure of time and resources to gain little emissions benefit and may, as noted elsewhere in these comments, result in additional emissions associated with blowdowns required to conduct repairs. A DI&M program, which initially surveys all potentially leaking components or relies on Subpart W data, targets only those that provide the biggest benefit in terms of GHG reduction when compared to the repair cost. Essentially, EPA created the Leak Detection portion of Leak Detection and Repair (LDAR) when it created Subpart W. While Kinder Morgan believes a DI&M program (see discussion above) is the most effective solution, should EPA decide to enforce an LDAR program, it makes far more sense to use the existing leak detection under Subpart W as the basis for such a program than to require additional leak detection surveys at different frequencies.

The Leaks White Paper does not currently address the cost-effectiveness of a DI&M program at natural gas transmission and storage facilities in lieu of some of the proposed reduction27

technologies or practices described in the Leaks White Paper. EPA publication relating to natural gas STAR partners experience with DI&M at compressor stations supports all of Kinder Morgan’s assertions and indicates that significant reduction in methane emissions can be achieved by implementing a DI&M program at a compressor station by locating leaking components and focusing maintenance efforts on the largest leaks that are profitable to repair.

2. Leak Thresholds and Repair

EPA should be careful about setting any specific leak thresholds or levels of leak requiring repair in the transmission and storage sector. In many instances, repairs may be impossible without blowing down a portion of the pipeline. As noted above, pipeline blowdowns result in significantly greater methane emissions than leaks, compressors and pneumatics combined. As a result, EPA should avoid requiring repair of leaks that require blowdowns. In particular, a leak should not require repair (unless and until the next required blowdown (if any)) if the blowdown (either from the pipeline or the compressor) is necessary to conduct the repair and would result in great methane emissions over an annual period than emissions from the leak.

Additionally, Kinder Morgan has determined that some leaks can be repaired immediately; however, because of the location of compressors in the transmission and storage sector, problems with availability of equipment, availability of personnel, or other factors may result in a delay on conducting those repairs or counsel against repair immediately.

Contrary to EPA’s statements, while some repairs may be easy, economical and accomplished quickly, others may either be uneconomical or take considerable planning, timing, and scheduling prior to implementation. Existing leak detection and repair regulatory programs (e.g., 40 C.F.R. Part 60, Subpart KKK, 40 C.F.R. Part 63, Subpart OOOO, and various state regulatory programs) recognize these considerations and include provisions regarding repair timing and deferral (e.g., at next scheduled plant turn-around). Any leak repair or reduction program would need to address these same repair or replacement considerations, timing and scheduling requirements.

D. Pneumatics

Gas driven pneumatic controllers at transmission and storage facilities and gas plants are required for safety reasons. Specific pneumatic device examples include, but are not limited to, mainline block valves, emergency shutdown valves, pipeline or station manifold isolation valves, pressure relief valves, etc. Natural gas driven pneumatic controllers are needed to operate these valves to assure valve operation or closure in emergency situations. Natural gas is needed for these applications due to system reliability and safety reasons. Alternative operators driven by electricity, solar power or other means would not provide the same level of safety or reliability. If electrical power service at a compressor station or gas plant was lost, even for short, temporary time periods, the valves would not be able to operate or close which could allow pressure build ups potentially causing equipment failure, pipeline ruptures or explosions.

Kinder Morgan does not believe that any potential regulations should be proposed to control the emissions from pneumatics in the transmission and storage industry segments. Based on Kinder Morgan’s Subpart W monitoring data, GHG emissions from pneumatics at its compressor and storage facilities in the transmission and storage segment reportable under Subpart W accounted for29 

# EXHIBIT A

EPA Methane White Papers: KM Responses to EPA Charge Questions30 EPA Methane White Papers: KM Responses to EPA Charge Questions

Compressors:

1. Please comment on the national estimates of methane emissions and methane emission factors for vented compressor emissions presented in this paper. Please comment on the activity data and the methodologies used for calculating emission factors presented in this paper.

Kinder Morgan Energy Partners, L.P. (Kinder Morgan) respectfully directs EPA to Section X.B.2 of Kinder Morgan’s formal comments in response to EPA’s Methane White Papers (KM Comments). In this Section X.B.2., Kinder Morgan asserts that, in general, EPA should await further information under development as part of the Subpart W reporting program and through existing and soon-to-be completed studies specific to the transmission and storage sector.

2. Did this paper appropriately characterize the different studies and data sources that quantify vented emissions from compressors in the oil and gas sector?

Kinder Morgan respectfully directs EPA to Section X.B.2 of the KM Comments. In this Section X.B.2., Kinder Morgan asserts that, in general, EPA should wait for further information under development as part of the Subpart W reporting program and through existing and soon-to-be completed studies specific to the transmission and storage sector.

3. Did this paper capture the full range of technologies available to reduce vented emissions from reciprocating compressors and wet seal centrifugal compressors at oil and gas facilities? In particular, are there other options for reducing emissions at existing reciprocating or centrifugal compressors? For example, the EPA is aware of “low emissions packing” for reciprocating compressors but has no detailed information on this technology.

Kinder Morgan identifies other mitigation options in Section X.B.3.a (Alternative Technologyto Control Compressor Emissions). Specifically, Kinder Morgan recommends that EPA reevaluate the most relevant sources of emission from compressors (particularly in the transmission and storage sector) and further evaluate practices that assist in reducing those emissions. Such practices may include, but should not be limited to, compressor piping burn down systems.

4. Did this paper appropriately characterize the emissions reductions achievable from the emissions mitigation technologies discussed for reciprocating compressors and wet seal centrifugal compressors?

Kinder Morgan incorporates American Petroleum Institute (API) and Interstate Natural Gas Association of America (INGAA) comments by reference. See also Section X.B.2.d for discussion of emissions from wet seal centrifugal compressors versus dry seal centrifugal compressors. In this Section X.B.2.d, Kinder Morgan provides actual measured data collected over the last three years in order to supplement EPA’s access to known datasets and provide insight and direction on the emissions associated with reciprocating and31 centrifugal compressors and the sources that have the potential for the greatest level of methane reduction while thoroughly considering any technical obstacles that could prevent achieving those reductions. Kinder Morgan’s data shows significant differences in many areas from those emissions estimates provided by EPA in its white paper.

5. Did this paper appropriately characterize the capital and operating costs for the technologies discussed for reduction of vented emissions from reciprocating compressors and wet seal centrifugal compressors?

Kinder Morgan respectfully directs EPA to Sections X.B.3.a (Economic Evaluation for Reciprocating Compressors) and X.B.3.b (for Centrifugal Compressors) of the KM Comments. At Section X.B.3.a, Kinder Morgan suggests improvements to EPA’s cost and cost-benefit analyses of technologies for reciprocating compressors to fully account for all costs related to the proposed technologies. At Section X.B.3.b, Kinder Morgan suggests improvements to EPA’s cost and cost-benefit analyses of technologies for centrifugal compressors based upon information received by Kinder Morgan from vendors of commonly owned compressors.

6. If there are emissions mitigation options for reciprocating and centrifugal compressors that were not discussed in this paper, please comment on the pros and cons of those options. Please discuss the efficacy, cost and feasibly for both new and existing compressors.

Kinder Morgan identifies other mitigation options in Section X.B.3.a (Alternative Technology to Control Compressor Emissions). Furthermore, Kinder Morgan has identified other sources that have greater emissions than those proposed by EPA for mitigation at Section X.B.2.d of the KM Comments.

7. Are there technical limitations that make the replacement of wet seals with dry seals impractical at certain existing centrifugal compressors?

Kinder Morgan respectfully directs EPA to Section X.B.3.b of the KM Comments. In this Section X.B.3.b Kinder Morgan describes the limitations of the replacement of wet seals with dry seals and why any wet seal replacement policy or requirement would need to address manufacturer and other qualified vendor capabilities, parts and material supply, delivery schedules, and impacts to national gas supply and transportation capabilities.

8. Are there technical reasons why an operator would use a wet seal centrifugal compressor without a gas recovery system?

Simply stated, the methane emission reductions for the transmission and storage sector are not as significant as thought by the EPA. Kinder Morgan respectfully directs EPA to Section X.B.3.b of the KM Comments (as described in Response to Question No. 7, above).

9. Are there technical limitations that make the installation of gas capture systems at certain reciprocating compressors impractical?32 Yes. Kinder Morgan respectfully directs EPA to Section X.B.3.a of the KM Comments, which discusses other mitigation options (Alternative Technology to Control Compressor Emissions).

10. Please comment on the prevalence of the different emission mitigation options in the field.

Kinder Morgan is not aware that any of the emission mitigation options are prevalent in the field. Kinder Morgan has only replaced one wet seal with a dry seal and does not operate any control systems to control venting from its rod packing or wet seal devices at this time.

11. Given the substantial benefits of dry seal systems (e.g., lower emissions, less maintenance, and higher efficiency), are you aware of situations where new wet seal centrifugal compressors are being installed in the field? If so, are there specific applications that require wet seal compressors?

As discussed in Section X.B.2.d (providing actual measured data collected over the last three years), Kinder Morgan’s data does not indicate that dry seal systems have substantial benefits from an emission perspective over wet seal systems.

12. Are there ongoing or planned studies that will substantially improve the current understanding of vented VOC and methane emissions from reciprocating and centrifugal compressors and available techniques for increased product recovery and emissions reductions?

Kinder Morgan incorporates API and INGAA comments by reference. Kinder Morgan also respectfully directs EPA to Section X.A of the KM Comments, which outlines specific concerns noted by API and INGAA and shared by Kinder Morgan, including ongoing studies by Colorado State University and the Pipeline Research Council International.

* * * Leaks:

1. Did this paper appropriately characterize the different studies and data sources that quantify VOC and methane emissions from leaks in the oil and natural gas sector?

Kinder Morgan incorporates API and INGAA comments by reference.

2. Please comment on the approaches for quantifying emissions and on the emission factors used in the data sources discussed. Please comment on the national estimates of emissions and emission factors for equipment leaks presented in this paper. Please comment on the activity data used to calculate these emissions, both on the total national and regional equipment counts.

Kinder Morgan respectfully directs EPA to Section X.B.2 of the KM Comments for a discussion of use of the greenhouse gas reporting program data versus concerns with emissions factors utilized and relied upon by EPA in its technical white paper, including the Compressor White Paper and the Leak White Paper.33

3. Are the emission estimating procedures and leak detection methods presented here equally applicable to both oil and gas production, processing, and transmission and storage sector?

No. Kinder Morgan respectfully directs EPA to Section X.C. and X.C.1 of the KM Comments for a discussion of the differences in part between the transmission and storage sector and other portions of the natural gas sector.

4. Are there ongoing or planned studies that will substantially improve the current understanding of VOC and methane emissions from leaks and available techniques for detecting those leaks? Please list the additional studies you are aware of.

Kinder Morgan respectfully directs EPA to Section X.A of the KM Comments, which discusses the ongoing study of leaks from the transmission and storage sector involving Colorado State University, Environmental Defense Fund, and multiple operators in the transmission and storage sector (including Kinder Morgan). That study is expected to be issued in the second half of 2014.

5. Are there types of wells sites, gathering and boosting stations, processing plants, and transmission and storage stations that are more prone to leaks than others? Some factors that could affect the potential for leaks are the number and types of equipment, the maintenance of that equipment, and the age of the equipment, as well as factors that relate to the local geology. Please discuss these factors and others that you believe to be important.

Kinder Morgan respectfully directs EPA to Section X.C.1 of the KM Comments, which indicates that the majority of emissions come from a small number of sources. As noted in Section X.C.1.d, this counsels for development of a directed inspection and maintenance program in lieu of a mandated leak detection and repair program for all components or potential sources. Kinder Morgan incorporates API and INGAA comments by reference in response to the remainder of this question.

6. Did this paper capture the full range of technologies available to identify leaks at oil and natural gas facilities?

Kinder Morgan incorporates API and INGAA comments by reference.

7. Please comment on the pros and cons of the different leak detection technologies. Please discuss efficacy, cost and feasibility for various applications.

Kinder Morgan incorporates API and INGAA comments by reference.

8. Please comment on the prevalence of the use of the different leak detection technologies at oil and gas facilities. Which technologies are the most commonly used? Does the type of facility (e.g., well site versus gathering and boosting station) affect which leak detection technology is used?34 Kinder Morgan incorporates API and INGAA comments by reference.

9. Please provide information on current frequencies of revisit of existing voluntary leak detection programs in industry and how the costs and emission reductions achieved vary with different frequencies of revisit.

Kinder Morgan incorporates API and INGAA comments by reference.

10. Please comment on the potential for using ambient/mobile monitoring technologies in conjunction with OGI technology. This would be a two-phase approach where the ambient/mobile monitoring technology is used to detect the presence of a leak and the OGI technology is used to identify the leaking component. Please discuss efficacy, cost and feasibility.

Kinder Morgan incorporates API and INGAA comments by reference.

11. Please comment on the cost of detecting a leak when compared to the cost to repair a leak. Multiple studies described in this paper suggest that detecting leaks is far more costly than repairing leaks and, due to generally low costs of repair and the subsequent product recovery, it is almost always economical to repair leaks once they are found. Please comment on this overall conclusion.

Kinder Morgan respectfully directs EPA to Section X.C.2 of the KM Comments, which demonstrate that it is not correct to conclude that repair is almost always economical to repair leaks once found. In the transmission and storage sector it can be very important to quantify emissions from leaks because in some circumstances, namely those where repair requires blowdown of the pipeline or similar venting, the emissions resulting from the repair may far exceed the emissions from the leaking equipment in the first instance.

Kinder Morgan further incorporates by reference API and INGAA comments.

12. If the conclusion is correct that it is almost always economical to repair leaks once they are found, then how important is the quantification of emissions from leaks when implementing a program to detect and repair leaks?

Kinder Morgan respectfully directs EPA to Section X.C.2 of the KM Comments, which demonstrate that it is not correct to conclude that repair is almost always economical to repair leaks once found. In the transmission and storage sector it can be very important to quantify emissions from leaks because in some circumstances, namely, those where repair requires blowdown of the pipeline or similar venting, the emission resulting from the repair may far exceed the emissions from the leaking equipment in the first instance.

13. Please comment on the state of innovation in leak detection technologies. Are there new technologies under development that are not discussed in this paper? Are there significant advancements being made in the technologies that are not described in this paper?

Kinder Morgan incorporates API and INGAA comments by reference.35 * * *

Pneumatics:

1. Did this paper appropriately characterize the different studies and data sources that quantify emissions from pneumatic controllers and pneumatic pumps in the oil and gas sector?

Kinder Morgan incorporates API and INGAA comments by reference.

2. Please discuss explanations for the wide range of emission rates that have been observed in direct measurement studies of pneumatic controller emissions (e.g., Allen et al., 2013 and Prasino 2013). Are these differences driven purely by the design of the monitored controllers or are there operational characteristics, such as supply pressure, that play a crucial role in determining emissions?

Kinder Morgan incorporates API and INGAA comments by reference.

3. Did this paper capture the full range of technologies available to reduce emissions from pneumatic controllers and pneumatic pumps oil and gas facilities?

Kinder Morgan incorporates API and INGAA comments by reference.

4. Please comment on the pros and cons of the different emission reduction technologies. Please discuss efficacy, cost and feasibility for both new and existing pneumatics.

Kinder Morgan agrees with the Pneumatic White Paper that replacing a high bleed pneumatic with low bleed controllers is infeasible in situations where a process condition may require a fast or precise control response so that it does not stray too far from the desired set point. A slower-acting controller could potentially result in damage to equipment and/or become a safety issue.

5. Please comment on the prevalence of the different emission control technologies and the different types of pneumatics in the field. What particular activities require high bleed pneumatic controllers and how prevalent are they in the field?

Kinder Morgan data does not show use of a significant number of pneumatic devices at Kinder Morgan’s compressor and storage facilities. In fact, based on Kinder Morgan’s Subpart W monitoring data, GHG emissions from pneumatics at its compressor and storage facilities accounted for approximately 1% of the total GHG emissions reported by Kinder Morgan to EPA under Subpart W. This statistic supports Kinder Morgan’s understanding that pneumatics are a very small source within the transmission and storage sector.

6. What are the barriers to installing instrument air systems for converting natural gasdriven pneumatic pumps and pneumatic controllers to air-driven pumps and controllers?

Kinder Morgan incorporates API and INGAA comments by reference.36

7. Are there situations where it may be infeasible to use air driven pumps and controllers in place of natural gas-driven pumps and controllers even where it is feasible to install an instrument air system?

Kinder Morgan incorporates API and INGAA comments by reference.

8. Did this paper correctly characterize the limitations of electric-powered pneumatic controllers and pneumatic pumps? Are these electric devices applicable to a broader range of the oil and gas sector than this paper suggests?

Kinder Morgan incorporates API and INGAA comments by reference.

9. Are there ongoing or planned studies that will substantially improve the current understanding of VOC and methane emissions from pneumatic controllers and pneumatic pumps and available techniques for increased product recovery and emissions reductions?

Kinder Morgan incorporates API and INGAA comments by reference.