UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION 8 

99918TH STREET- SUITE 200 

DENVER, CO 80202-2466 

Phone 800-227-8917 

http://www.epa.gov/region08 

Ref: 8P-AR 

Board Secretary 

Montana Board of Environmental Review 

P.O. Box 200901 

Helena, MT 59620-0901 

Dear Board Secretary: 

The purpose of this letter is to provide EPA's comments on proposed revisions to the 

Administrative Rules of Montana (ARM) that were announced in MAR Notice No. 17-2238,24­

12/22/05. In the MAR notice the Board is proposing to adopt new, and amend existing, air 

quality rules establishing a registration system for certain oil and gas well facilities that presently 

require an air quality permit. This letter also contains comments on modifications to the new 

rule the Department proposed at the January 23,2006 public hearing. 

EPA has recognized that for certain source categories, involving relatively few operations 

that are relatively similar in nature, case-by-case permitting may not be the most administratively 

efficient approach to establishing federally-enforceable restrictions. One approach that has been 

used is to establish a general rule which sources register to create federally enforceable 

restrictions. States submit such rules as a SIP revision. 

We have several concerns with the proposed new rules. Our concerns pertain to assuring 

that the national ambient air quality standards (NAAQS) and prevention of significant 

deterioration (PSD) increments are met and that the rules are practicably enforceable. These 

concerns should be addressed for EPA approval of the new rules as a SIP-approved rule. We 

have also identified some general concerns with the proposed New Rule. Enclosure I to this 

letter discusses in detail all of our concerns. We have discussed these concerns with the 

Department of Environmental Quality. 
Please note that this letter and Enclosure I contain our current views based on a 

preliminary review ofthe draft rules. These views should not be considered our final position, 

which we will only reach through notice and comment rulemaking after the state has submitted 

the rules for our approval as a SIP revision. If you have any questions regarding this letter please 

contact me or Laurie Ostrand at (800) 227-8917. 

Sincerely, 

Richard R. Long, Director 

Air and Radiation Program 

Enclosures (2) 

cc: Don Vidrine, Montana Department of 

Environmental Quality
 

John Wardell, 8MO
 

2
 
Enclosure I 

A. Evaluation of Proposed Rule 

The following concerns should be addressed for EPA approval as a SIP revision. 

1. Impact on Attainment and Maintenance of the NAAQS and PSD Increments 

The DEQ must provide a quantitative analysis showing that the proposed new rule will 

not impact the NAAQS or PSD increments before EPA could approve this rule as a SIP revision. 

Section 110(1) of the Act indicates that EPA cannot approve a revision of a plan ifthe revision 

would interfere with any applicable requirement concerning attainment and reasonable further 

progress (as defined in section 171), or any other applicable requirement ofthis Act. 

Specifically, a quantitative analysis should be completed that (1) evaluates the cumulative 

impacts of the existing oil and gas well facilities, and (2) estimates the cumulative impacts of 

new oil and gas well facilities expected each year. Finally, the State must commit to evaluate the 

NAAQS and PSD increments in the future. We would be more than happy to work with the 

DEQ and suggest the type of quantitative analysis necessary for us to determine that section 

110(1) of the Act has been met. 

We note that Department's proposed modifications to New Rule IX(6), presented at the 

January 23,2006 hearing, indicate that an owner or operator of a registration eligible oil and gas 

well facility, with a detectible level of hydrogen sulfide from the well, shall submit, with the 

registration form, an air quality modeling analysis demonstrating compliance with the S02 and 

H2S ambient air quality standards. The rule should also indicate that the owner or operator needs 

to demonstrate compliance with S02 increments. 

Regarding demonstrating compliance with the S02 ambient air quality standards, we 

understand that an oil and gas well facility cannot register (and must obtain a permit) if 

demonstration of compliance with the S02 air quality standards can only be assured by 

installing/using control technology not identified in the rule. Our understanding is based on 

discussions with DEQ staff. However, this is not clear in the rule. The rule should be clear that 

if compliance with ambient air quality standards and increments cannot be achieved with the 

controls specified in the rule then the source is not registration eligible. 

2. Short Term Limits 

Ifthe DEQ envisions that some oil and gas well facilities that emit less than 100 tpy of 

S02 may be registration eligible, the rule must include provisions for short term S02limits to 

assure that the S02 NAAQS and increment are met. 

3. Practical Enforceability Review 

For guidance on exclusionary or prohibitory rules, we look in part to a January 25, 1995 

memorandum entitled "Options for Limiting the Potential to Emit (PTE) of a Stationary Source 

3
 
Under Section 112 and Title V of the Clean Air Act (Act)," from John S. Seitz, Director, Office 

of Air Quality Planning and Standards, and Robert 1. Van Heuvelen, Director, Office of 

Regulatory Enforcement, to Regional Air Division Directors. See Enclosure II. One of the main 

tenets of any rule used to limit the potential to emit of sources is that the rule be enforceable as a 

practical matter. Therefore, our review has focused on the practical enforceability of the 

proposed new rule. 

Attachment #4 to the Ja~1Uary 25, 1995 memorandum mentioned above describes six 

enforceability criteria which a rule must meet to make limits enforceable as a practical matter. In 

general, practical enforceability for a source-specific permit term means that the provision must 

specify: (1) a technically accurate limitation and the portions of the source subject to the 

limitation; (2) the time period for the limitation (hourly, daily, monthly, annually); and (3) the 

method to determine compliance including appropriate monitoring, recordkeeping and reporting. 

For rules that apply to categories of sources, practical enforceability additionally requires that the 

provisions (4) identify the categories of sources that are covered by the rule; (5) where coverage 

is optional, provide for notice to the permitting authority of the source's election to be covered by 

the rule; and (6) recognize the enforcement consequences relevant to the rule. 

Below we review the proposed new rule against the six criteria contained in the guidance. 

Our review addresses requirements (4) and (5) first as they are concepts that are unique to rules. 

a. Specific Applicability 

Guidance: Rules must be specific to the emission units or sources covered by the rule. In 

other words, the rule must clearly identify the category of sources that qualify for the rule's 

coverage. The rule must apply to categories of sources that are defined specifically or narrowly 

enough so that specific limits and compliance monitoring techniques can be identified and 

achieved by all sources in the categories defined. 

Review: For the most part, the draft new rule meets the guidance with respect to specific 

applicability. However, the definition of oil and gas well facility from Montana Code Annotated 

(MCA), indicates in (b) that "equipment referred to in subsection (13)(a) includes but is not 

limited to wellhead assemblies, amine units, prime mover engines, phase separators, heater 

treater units, dehydrator units, tanks, and connecting tubing." The draft new rule should develop 

criteria determining how it will include the equipment not identified in the definition. As an 

alternative to developing criteria, the draft new rule could instead include a definition of "oil and 

gas well facility" rather than referring to the MCA definition. The new definition could identify 

the equipment currently regulated by the rule (and not include the phrase "but is not limited to") 

and could be revised as needed in the future when new equipment is included. 

b. Reporting or Notice to Permitting Authority 

Guidance: The rule should provide that a source notify the permitting authority ofits 

coverage by the rule. 

4 
Review: New Rule VI(l) should be clarified. The rule indicates that owner or operators 

"may" submit a registration form. It should be clarified that owners or operators have the option 

of registering but if they chose not to register under this rule they need to obtain a permit. 

Otherwise, it appears that this requirement has been met 

c. Specific Technically Accurate Limits 

Guidance: The rule must specify technically accurate limits on the potential to emit. The 

rule must clearly specify the limits that apply, and include the specific associated compliance 

monitoring. The standards or limits must be technically specific and accurate to limit potential to 

emit, identifying any allowed deviations. Further, for potential to emit limitations, the standards 

set must be technically sufficient to provide assurances to EPA and the public that they actually 

represent a limitation on the potential to emit. A rule that allows sources to submit the specific 

parameters and associated limits to be monitored may not be enforceable because the rule itself 

does not set specific limits. 

Review: The rule does not meet this requirement. Below are several options for revising 

the rule to meet this requirement. 

i) Have the rule establish production limits, hours of operation limits or fuel 

consumption limits to ensure that the PTE levels in New Rule VI(2) are met. 

ii) Have the rule indicate that production limits, hours of operation limits or fuel 

consumption limits submitted as part of the registration packet by the source become 

enforceable limits for both synthetic and true minors. Such limits should be derived from 

equations/calculations set forth in the rule and chemical composition of the crude (based 

on, at least, the first 30 days after completion ofthe well) and ensure that the PTE level in 

New Rule Vl(2) are met. 

Additionally, the rule should specify the combustion efficiency that "smokeless 

combustion devices must achieve" (We note that the rule references 40 CFR 60.18. However, 40 

CFR 60.18 does not contain a combustion efficiency for flares. Without a specified combustion 

efficiency there appears to be a practical enforceability problem; the January 23,2006, 

Department modified New Rule VII(1)(a)) indicates that other control equipment "with equal or 

greater control efficiency than the smokeless combustion device" may be used.) 

d. Specific Compliance Monitoring 

Guidance: The rule must specify the methods to determine compliance. Specifically, the 

rule must state the monitoring requirements, recordkeeping requirements, reporting requirements, 

and test methods as appropriate for each potential to emit limitation; and which methods are used 

for making a direct determination of compliance with the potential to emit limitations. 

Review: Although the new rule requires certain recordkeeping and reporting, to be SIPapprovable, the new rule should also: 

5
 
i) ensure consistency and accuracy in the calculations that oil and gas well facilities 

conduct, for example by including the calculations in the rule or referencing, for example, 

specific AP42 or ASTM methods to determine emissions from the various emission unit 

at the oil and gas well facility (if specific constants are to be used in the equations then 

they should be specified as well); 

ii) require that the assumptions used in the calculations (e.g., chemical composition ofthe 

crude) are still accurate; 

iii) require sources to keep daily records of fuel consumption (in New Rule V(3)) because 

fuel consumption is mentioned in New Rule VI(2) as a potentially limiting factor; 

iv) require that the information/reports submitted to the Department are certified by the 

owner/operator (we note that the modifications proposed by the Department at the 

January 23,2006 hearing now contain such a requirement at New Rule !X(7), however, it 

appears that the certification requirement in New Rule !X(7) only applies to synthetic 

minors and should apply to all registered sources); and 

v) provide a provision for source owners or operators to self report (within a time period, 

i.e., within 7 days or some other time), when they have exceeded the confirmed PTE 

limits. 

The rule also requires the source inspect monthly all VOC piping components for leaks 

and repair such leaks within a specified period of time. The rule should specify methods more 

reliable than sight, sound and smell to detect leaks, for example, field gas chromatography; photo 

ionization air monitoring; or portable gas detection instrumentation. In addition, the rule should 

require the oil and gas well facility to conduct a first attempt at repair for leaks that exceed a 

certain specification (e.g., 500 ppm). 

Under the Inspection and Repair Requirements, the New Rule should require also 

owners/operators to test/monitor all control equipment (e.g., monitoring for the presence of a 

continuous pilot flame using a thermocouple and continuous recording device) to assure that they 

are operating correctly. 

e. Practicably Enforceable Averaging Times 

Guidance: The averaging time for all limits must be practicably enforceable. In other 

words, the averaging time period must readily allow for determination of compliance. EPA 

policy expresses a preference for short term limits, generally daily, but not to exceed one month. 

Review: Although we agree that 12-month rolling limits satisfy this requirement for most 

pollutants, shorter term S02 limits (e.g., 3-hour and 24-hour) need to be established to assure that 

the S02 NAAQS and increment will be met. 

f. Clearly Recognized Enforcement 

Guidance: Violations of the potential to emit levels imposed by the rule constitute 

violations of permitting and SIP requirements. 

6 
Review: The proposed new rule should indicate the consequences of violating the rule. 

For example, the rule should indicate the potential consequences if a registered source exceeds 

the potential to emit thresholds. Alternatively, the DEQ can explain how existing state rules will 

address this concern. Also, the rule should mention that"if a HAP level is exceeded, the oil and 

gas well facility may be subject to multiple MACT standards and may become a Title V source. 

B. General Issues 

We strongly recommend that the DEQ revise the draft new rule to address the following 

concerns: 

1. New Rule VII(l)(d) and (e) should be revised to require stationary internal combustion 

engines greater than 35 BHP (rather than 85 BHP) be equipped with nonselective catalytic 

reduction or its equivalent (for rich-bum) and oxidation catalytic reduction or its equivalent (for 

lean-bum) engines. EPA is aware of lower HP engines being controlled for NOx emissions. The 

Oil and Gas Initiative effort being conducted by EPA Region 8 and the Region 8 states has 

specified an Existing Engines Proposal for 4-Stroke Engines to require controls on all engines 

greater than 35 HP. Control of these engines to 35 BHP has been shown to be technically and 

economically feasible in SW Wyoming and the Federal Land Managers are recommending 

control of engines 40 BHP and greater in the San Juan Basin. 

2. New Rule VII(l)(a) should indicate that any VOC vapors, within a half mile of a pipeline 

must be routed to a gas pipeline, regardless ofthe BTU content of the vapors. We note that the 

Department proposed modifications presented at the January 23,2006 hearing no longer require 

VOC vapors to be routed to a pipeline. We also note that there appears to be a gap in the rule 

between the requirement to treat VOC vapors greater 500 BTU/scf and the referenced 40 CFR 

60.18. That is, 40 CFR 60.18 indicates that flares can treat VOC vapors down to 300 BTU/scf if 

steam assisted and 200 BTU/scfifnon-assisted. The rule should address this gap. 

3. The rule itself should indicate that sources have to meet other SIP requirements, for example, 

state rules for minimizing fugitive emissions, opacity requirements, etc. We note in the MAR 

proposal notice, under Reason, that registered facilities would still be required to comply with 

any other applicable requirements not listed in the rules. However, to make it clear to registered 

facilities, such language should also be in the rule. 

4. Regarding emission control requirements, the rule should indicate that any control equipment 

used be operated to provide the maximum air pollution control for which it was designed. We 

note that the Department proposed modifications presented at the January 23,2006 hearing now 

include this requirement. 

5. The rule should define "VOC piping components." The term is used in New Rule VIII(I). 

We note that the Department proposed modifications presented at the January 23,2006 hearing 

now include the following definition ofVOC piping components to mean "VOC emissions from 

valves, pumps, compressors, flanges, pressure relief valves, and connectors, and other piping 

7
 
components" However, it's not clear to us why a piping component would mean VOC emissions 

from the various pieces of equipment mentioned. 

6. The rule should contain a definition for "emission minimizing technology" similar to the 

language in the 8895 rule. However, we note that the 8895 definition of emissions minimizing 

technology indicates "or technology that results in significantly lower emissions ofVOCs 

through the use ofvapor capture and introduction into a pipeline." We question the starting point 

for determining "significantly lower emissions"; significantly lower than what? We recommend 

clarifying this in a new definition for the oil and gas registration rule. We note that the 

Department proposed modifications no longer contain a reference to "emission minimizing 

technology." Therefore, such a definition is not necessary. 

7. We note that the modifications to the draft new rule that the Department proposed at the 

January 23,2006 hearing, contain a new reference to "potential to emit" in New Rule VI(2). The 

draft new rule itself contains a definition of "potential to emit" at New Rule 1(2), yet as used in 

New Rule VI(2), "potential to emit" is as defined in the operating permit rules at ARM 

17.8.1201(26). We question why you've added this new reference to New Rule VI(2). 

..

8
 
Laurie To ber@mt.gov 

Ostrand/P2/R8/USEPAlUS 

01/30/200611 :26 AM 

ee viwalsh@mt.gov 

bee 

Subject Comments on Oil and Gas Registration Rule 

Board Secretary 

Montana Board of Environmental Review 

Attached are EPA's comments on the draft Oil and Gas Registration rule.