Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 1 ENVIRON 

## 5 BACT Analysis

Federal PSD regulations (40 CFR 52.21(j)) require th e utilization of BAC T to minimize the
emissions of PSD regulated pollutants from a new major stationary source or major modification occurring at an existing major stationary source. For a new major stationary source comprised of only new emissions units, BACT shall be applied to each emissions unit that would have the potential to emit a regulated PSD pollutant that the new major stationary source is proposed to emit in a significant amount

. As previously discussed in this permit application

, both the Developer and Discoverer Americas will be a new major stationary source and each will have the potential to emit NO X emissions above the pollutant’s PSD significant threshold. Therefore

, a BA CT analysis must be performed for applicable emissions unit s on the Developer and
Discoverer Americas that will have the potential to emit NO X

.

Based on the definition of OCS source in 40 CFR 55.2, an emissions unit that operates within
25 miles of an OCS source is not subject to BACT requirements unless the emissions unit is attached to the OCS source and has a stationary source aspect. 1 For example, the lifeboats
and fast rescue boats of the Developer and Discoverer Americas are attached to the drilling vessels to be available for use in emergency events. When the lifeboats and fast rescue boats are used in their intended service (emergency events), they represent mobile sources. Therefore, the lifeboat and fast rescue boat engines are not subject to B ACT requirements under the PSD regulations.



### 5.1 BACT Analysis Proc edure
BACT is defined at 40 CFR 52.21(b)(12) as “an emissions limitation (including a visible emission standard) based on the maximum degree of reduction for each pollutant subject to regulatio n under the Act which would be emitted from any proposed major stationary source or major modification which the Administrator, on a case

- by

- case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievab le for such source or modification through application of production processes or available methods, systems, and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant...

. ”

B ACT is evaluated on a pollutant

- specific basis for an emissions unit using a procedure that is
referred to as the “ top

- down BACT analysis

. ” The top

- down BACT analysis starts with consideration of the technology that would achieve the maximum degree of emissions limitation ( lowest emission rate ) for an emissions unit and that can be or has been applied to the same

1 OCS source means any equipment, activity, or facility which: (1) Emits or has the potential to emit any air pollutant; (2) Is regulated or authorized under the Outer Continental Shelf Lands Act (‘‘OCSLA’’) (43 U.S.C. § 1331 et seq. );

and (3) Is located on the OCS or in or on waters above the OCS. This definition shall include vessels only when they are: (1) Permanently or temporarily attached to the seabed and erected thereon and used for the purpose of exploring, developing or producing resources therefrom, within the mea ning of section 4(a)(1) of OCSLA (43 U.S.C. § 1331 et

seq. ); or (2) Physically attached to an OCS facility, in which case only the stationary sources aspects of the vessels will be regulated. (40 CFR 55.2)Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 2 ENVIRON type of emissions unit o r to a similar type of emissions unit . The top

- ranked technology that is considered technically available may be eliminated based on cost s, economics, environmental impacts, and/ or energy impacts. If the top

- ranked technology is not chosen, then t he BACT analysis proceeds to the next most stringent technology . This analysis continues until a BACT

conclusion is reached.

The following step s outline the top

- down BACT analysis

.

Step 1

– Identify All Control Technologies
The first step in the top

- down BACT a nalysis is to define the spectrum of process and/or add

- on emissions control alternatives potentially applicable to the proposed emission s unit. A review of the EPA’s RACT/BACT/LAER Clearinghouse (RBLC) database is usually relied upon to identify
available BACT control alternatives.

Step 2

– Eliminate Technically Infeasible Options
The second step in the top

- down BACT a nalysis is to evalu ate the technical feasibility of the alternatives identified in Step 1 and to reject those which are technically infeasible based on engineering evaluation or due to chemical or physical principles. The following criteria are considered in determining tec hnical feasibility: previous commercial scale demonstrations, precedents based on previous permits, and technology transfer from similar emissions units

.

Step 3

– Rank Remaining Control Technologies by Control Effectiveness

The third s tep involves an asse ssment and documentation of the emissions limit achievable with each technically feasible alternative when taking into consider ation the specific operating constraints of the emissions units undergoing review. After determining what control efficiency

is achievable with each alternative, the alternatives are rank

- ordered into a control hierarch y from most to least stringent.

Step 4

– Evaluate Most Effective Control Options and Document Results

The fourth s tep i s to evaluate the cost s , economic s , environme ntal impacts , and energy impacts of the top or most stringent technique. To reject the top alternative, it must be demonstrated that this control alternative is infeasible based on the results of the impacts analysis. If a control technology is determine d to be infeasible due to costs or adverse energy or environmental impacts (including toxic pollutant impacts), the control technology is rejected as BACT and the impacts analysis is performed on the next most stringent control alternative.

Step 5

– Selec t BACT

BACT is identified as the option with the highest control effectiveness that was not eliminated in Step 4.



### 5.2 Summary of BACT Determinations
Below is a summary of the BACT determinations for the applicable emissions units proposed for
the Developer an d Discoverer Americas

. For the Developer

, t he only emissions unit s havingOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 3 ENVIRON potential NO X emissions are diesel 2 ( CI ) engines. Therefore, the BACT review performed for

the Developer only addresses diesel engines. Alternatively, the BACT review performed fo r the
Discoverer Americas addresses both diesel engines and a diesel

- fired heater because the drilling vessel is equipped with these two types of NO X generating emissions sources

.



### 5.2.1 **Developer** and **Discoverer Americas** Engines

T he BACT analys es that we perform ed for the diesel engines on the Developer and Discoverer
Americas are presented in engine size groupings . For example, the Developer is equipped with eight large ( > 500 hp) diesel main generator engines and one large diesel emergency generator engine , and the Discoverer Americas is equipped with six large diesel main generator engines and one large diesel emergency generator engine

. T he BACT analyses that we performed for
the se large diesel engines are presented under the grouping of “l arge (>500 hp) d ies el

e ngines

. ”

Similarly, the Developer is equipped with two small ( ≤ 500 hp) diesel cementing unit engines

, and the Discoverer Americas is equipped with two small diesel emergency air compressor engines

. The BACT analyses that we performed for these small diesel engines are presented under the grouping of “small ( ≤ 500 hp) d iesel e ngines. ”

Table 5.1

- 1 below summarizes the BACT determinations made for the diesel engines installed
on the Developer and Discoverer Americas

.

Table 5

. 2. 1

- 1 Summary of BACT Determinations for **Developer** and
**Discoverer Americas** Engines

Engine Grou p Drilling
Vessel Number of Engines Emissions Unit/ Average Annual NO X Emissions
Level Control Technology/

**Engine Description** (g/kW

- hr) Work Practice

Large Developer 8 Main Generator Engines 8.2 40 CFR part 94 Tier 2 Compliant Design, including Turboc harger, Aftercooler, High Injection Pressure, and Low NO X Tuning (>500 hp) Diesel Engines (GEN

- 1 thru GEN

- 8)

Wartsila Model 16V26 A (6,651 hp)

Discoverer
Americas 6 Main Generator Engines 12.1 40 CFR part 94 Tier 1 Compliant Design,
includin g Turbocharger,

Aftercooler, and High

Injection Pressure (GEN

- 1 thru GEN

- 6)

STX MAN Model 14V32/40 (9,387 hp)
Developer 1 Emergency Generator Engine 9.2 40 CFR part 94 Tier 1 Compliant Design, including Turbocharger, Aftercooler, and
Elect ronic Fuel Injection (EGEN)
Caterpillar Model 3516B (2,551 hp)

2 Marine gas oil, diesel fuel, and distillate fu el oil No. 2 all have very similar properties and are collectively referred to

as “diesel” in this permit application.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 4 ENVIRON

Engine Grou p Drilling
Vessel Number of Engines Emissions Unit/ Average Annual NO X Emissions
Level Control Technology/

**Engine Description** (g/kW

- hr) Work Practice

Large Discoverer
Americas 1 Emergency Generator Engine 9.8 40 CFR part 94 Tier 2 Compliant Design, including Turbocharger,

Aftercooler, and High

Injection Pressure (>500 hp)
Die sel Engines (EGEN)

STX MAN Model 7L27/38 (3,097 hp)

Small Developer 2 Cement Unit Engines 7.2 40 CFR part 94 Tier 2 Compliant Design, including Turbocharger, Aftercooler, and Electronic Fuel Injection (≤500 hp) Diesel Engines (CMU

- 1 and CMU

- 2)

Caterpillar Model C15 (500 hp)

Discoverer
Americas 2 Emergency Air Compressor Engines 7.5 40 CFR part 94 Tier 2 Compliant Design, including Turbocharger and Aftercooler (ACOMP

- 1 and ACOMP

2)
Duetz Model F3L912 (50 hp)
Duetz Model F4L912 (68 hp)

Not eworthy in light of the OCS source BACT applicability discussion presented at the beginning
of this section

, the direct physical connection of a support vessel (c rew b oats and O SVs ) t o the Developer or Discoverer Americas would be an unusual event . The typical operation of a support vessel is for it to operate under its own power when adjacent to the drilling vessel for loading or unloading purposes. The only expected physical connec tion between the drilling vessel and support vessel would be for material transfer hoses such as those that would be necessary for the transfer of fuel or drilling mud. Because these types of events are short in
duration

, Statoil believes it is evident th at a BACT analysis for support vessel s would result in determinations that any control technology requirements beyond those with which the specific vessel is already equipped would not be cost effective due to the small amount of NO X emissions reduction th at would be achieved during the short time frame that a support vessel
would be connected to the drilling vessel. Therefore, BACT for support vessels is not discussed any further

.



### 5.2.2 **Discoverer Americas** Heater

In addition to the diesel engines installed on the Discoverer Americas , the vessel is equipped
with a cargo heater system that incorporates a diesel

- fired heater and a thermal fluid circulation loop. The existing diesel

- fired heater ( Hot Oil Heater (Emission Unit ID HTR)) component of the cargo heater system is only operated for testing and maintenance

, and it is expect ed that the testing and maintenance operations of the heater will occur for only two hours per year. Based on such a limited operating schedule, the potential NO X emissions from the hea ter are 0.003 tpy. If any replacement and/or add

- on technologies were available to control NO X emissions from the heater, the emissions reduction amount would be negligible in consideration of theOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 5 ENVIRON proposed 0. 003 tpy potential NO X emissions rate for the he ater . Therefore, any available technology would not be cost effective. For example, a NO X control technology capable of reducing NO X emissions by 95 percent with an annualized cost of $50 would result in a cost
effectiveness greater than $20,000 per ton of NO X removed.

Because any replacement and/or add

- on NO X emissions control technologies for the Hot Oil Heater (Emission Unit ID HTR) would not be cost effective, we have determined that the current combustion equipment contained in the heater and proper operation of this equipment represent
BACT for NO X emissions from the heater. Please note that there is not any further BACT

determination documentation for the heater in this permit application.



### 5.3 NO X 

### BACT Analysis for Large (>500 hp) Diesel Engines

In t his section , we discuss the top

- down BACT analysis conducted for the large (>500 hp) diesel engines located on the Developer and Discoverer Americas

. In summary, the large diesel engines l ocated on the Developer are the eight main generator engines (Emiss ion Unit IDs
GEN

- 1 through GEN

- 8) and the emergency generator engine (Emission Unit ID EGEN)

. Similarly, the large diesel engines located on the Discoverer Americas are the six main generator engines ( Emission Unit IDs GEN

- 1 through GEN

- 6) and the e mergen cy g enerator

e ngine (Emission Unit ID EGEN)

.



### 5.3.1 Step 1

– Identify All Control Technologies

NO X will be formed during the combustion reaction of diesel fuel in the large diesel engines
located on the Developer and Discoverer Americas . There are two sources o f nitrogen that
result in NO X emissions during combustion

– nitrogen in the combustion air and nitrogen in the
fuel. Thermal NO X formation occurs by the high temperature thermal dissociation and subsequent reaction of combustion air molecular nitrogen (N 2 ) and oxygen (O 2 ), via the well

known Zeldovich mechanism. Fuel

- bound NO X is formed by the direct oxidation of organo

nitrogen compounds contained in the fuel.

The available control technologies to minimize NO X emissions from diesel engines can be

charac terized by the following two categories: (1) combustion control (in

- cylinder controls) and (2) post

- combustion exhaust treatment (after

- treatment). With combustion control or in

- cylinder control, thermal NO X is reduced by lowering the peak combustion temp erature by utilizing engine design and calibration parameters such as fuel delivery and valve timing. However, the
reduced NO X formation provided by i n

- cylinder control of combustion temperature must be balanced with potential negative impacts such as inc rease d emissions of other pollutants (e.g., CO, PM, VOC) , increased fuel consumption by the engine , and decreased torque output by the engine . Post

- combustion exhaust treatment relies on the removal of NO X from the exhaust
stream via c hemical reaction tec hnologies.

First, a vailable NO X co ntrol technologies for large (> 500 hp) diesel engines were determined by searching the EPA RBLC using the following search conditions: Process Code 17.110

– Large Internal Combustion Engines (>500 HP); Fuel Oil (ASTM #1, 2, includes kerosene, aviation, diesel fuel). T able 5. 3.1

- 1 below summarizes the NOx control technolog ies for large diesel engines identified in the RBLC.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 6 ENVIRON Table 5. 3.1

- 1
EPA RBLC NO X Control Technologies for Large (>500 hp) Diesel Engines

Abbreviation Con trol Technology Typical Percent
Reduction

SCR Selective Catalytic Reduction 90%

LND Low NO X Engine D esi gn 50

- 80%

ITR I gnition Timing Retard 10

- 50%

IAC Combustion A ir C hiller/ I ntake A ir C ooling

HIP High Injection P ressure

WI Water I njection up to 50 %

Tier 1 or 2 Tier 1 or Tier 2 Emission S tandards per 40 CFR part 89 or 40 CFR part 94 30%

- Turbo c harger with After c ooler Varies

GCP Good C ombustion P ractices

- 3

None No controls specified

-

The complete RBLC database download for large diesel engin es is provided in Appendix D. Note that only those determinations made after January 1, 1999, were downloaded because older determinations are typically less stringent. The RBLC also listed lean burn and clean fuel
as NO X control techniques for large die sel engines

. However, t hese techn iques do not specific ally reduce NO X emissions ; therefore, they are not discussed further. 4

In addition to the large diesel engine NO X emissions controls listed in the RBLC

, Statoil considered the control technologies in cluded in Table 5. 3.1

- 2 below. These control technologies were identified by reviewing permit applications and comments on draft permits for
other OCS sources and reviewing publications on diesel engine emissions control technologies.

Table 5

. 3.1

- 2
Other NO X Control Technologies for Diesel Engines

Abbreviation Control Technology Typical
Percent Reduction

EGR Exhaust Gas Recirculation 40

- 50%

- EGR with WI Varies

- Engine Replacement (replacing old engine with new)

3 While good combustion practices can promote efficient combustion and prevent excessive emissions, these practices do not necessarily re sult in NOx emissions reductions for an engine.

4 Clean fuels having a low nitrogen content do reduce NO X produced from fuel

- bound nitrogen; however, the amount
of NO x produced from fuel

- bound nitrogen in diesel constitutes a small fraction of the total NO x . Lean burn and air

- to

fuel ratio control are more related to engine performance than NO X control.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 7 ENVIRON Abbreviation Control Technology Typical
Percent Reduction

- Engine Re

- Tooling (engine rebuild k its) Varies

- Fuel

- Water Emulsions

- Intake Air Humidification

- Engine Derate

- NO X Adsorber (NO X Traps)

LNC / HC

- SCR Lean NO X Catalyst / Hydrocarbon SCR

CSNOx CSNO X Emission Abatement System

Except for EGR, specific NO X reduction efficiencies w ere not identified for the control technologies in Table 5. 3.1

- 2 . The expected control efficiency for these technologies varies based on the level of existing controls in place or the baseline emissions for each particular engine. The estimated control e fficiencies for technically feasible control technologies are included in the evaluation of controls (Step 4) presented later in this section.



### 5.3.1.1 Selective Catalytic Reduction (SCR)

An SCR system uses catalyst to selectively reduce NO X to elemental nitrogen and water by using ammonia as the reducing agent. The ammonia is inject ed into the exhaust upstream of a catalyst bed. The effectiveness of SCR depends on fuel quality and engine duty cycle or load fluctuations. Contaminants in the fuel may poison or ma sk the catalyst surface causing a reduction or termination in catalyst activity. Load fluctuations can cause variations in exhaust gas temperature and NO X concentration, which can create problems with the effectiveness of the SCR system. 5 Exhaust gas tem peratures greater than 250 ° C are necessary to complete
the NO X reduction reaction. In marine applications, SCR systems are capable of reducing NO X emissions more than 90 percent

. 6

Anhydrous and aqueous ammonia are regulated as toxic chemicals under the CAA. Therefore, SCR systems typically incorporate urea as an intermediate to reduce the risks associated with transportation, storage, and handling of ammonia. The urea is then converted to ammonia for

use as the reducing agent in the SCR system.



### 5.3.1.2 Low NO X 

### Design (LND)
The RBLC lists LND for several engines, but does not describe the actual NO X combustion control technology. It is assumed that these determinations are referring to specific combustion chamber designs which provide good mixing of fuel and a ir before the start of combustion. These designs are intrinsic to the particular model of engine associated with each RBLC
determination for LND.

5 EPA

, AP

- 42

, Section 3.4

- Large Stationary Diesel And All Stationary Dual

- fuel Engines

, October 1996.

6 EPA

, Office of Transportation and Air Quality

, Reg ulatory Impact Analysis: Control of Emissions of Air Pollution from Category 3 Marine Diesel Engines (EPA

- 420

- R

- 09

- 019)

, Chapter 4 Technological Feasibility

, December 2009.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 8 ENVIRON 

### 5.3.1.3 Ignition Timing Retard (ITR) and Intake Air Coolers (IAC)

ITR reduces NO X emissions in RICE by delaying the injection of fuel in the engine from when the chamber is at its smallest to a time when the compression chamber is expanding. The larger volume in the compression chamber lowers peak combustion temperature, thus reducing
thermal NO X formation. Lower peak combustion temperature can also be achieved with charge air coolers or IAC, common to turbocharged engines, which reduce the intake manifold temperature. The combination of ITR and IAC may reduce NO X by 10 to 50 percent (up to 40 percent from ITR and an additional 10 percent from I AC). 7



### 5.3.1.4 High Injection Pressure (HIP)
Cooling the flame with ITR and/or IAC reduces NO X at the expense of incomplete combustion, resulting in the formation of PM, VOC, and CO emissions and reduced fuel economy. 8 The fuel

economy penalty can be reduced by increasing injection pressure. HIP can accomplish better
fuel atomization which leads to better combustion and reduced NO X and PM emissions. ITR also has a negative impact by contaminati ng the lube oil with soot which increases engine wear.



### 5.3.1.5 Water Injection (WI)
In WI systems, water acts as an inert gas and absorbs heat as it evaporat es . Both of these
factors result in a decrease in the peak combustion temperature, thus reducing thermal NO X formation by up to 5 0 percent. 9 The main disadvantage of WI is the large amount of extremely pure water required. In general, reduction of NO X by one percent requires up to one percent of

water in the water

- fuel system. In other words, achieving a 50 percent NO X reduction requires injectin g the engine with as much water as fuel. Another issue with the introduction of water in the combustion chamber is the potential for liquid droplets to contact the cylinder surface. In this case, there would be an immediate disintegration of the lubricat ion oil film, damaging the engine.



### 5.3.1.6 Tier 1 or Tier 2 Emission Standards per 40 CFR Part 89 or 40 CFR Part 94 (Tier 1 or 2)
In November 1999, EPA signed the final rule that established Tier 2 standards for
manufacture r s of Category 1 and Category 2 marine e ngines. Category 1 and Category 2 marine diesel engines typically range in size from about 700 to 11,000 hp. In January 2003,
EPA established Tier 1 emission standards for manufacturers of Category 3 marine engines (typically 3,000 to 100,000 hp)

. The se Tier 1 standards went into effect in 2003 and became
retroactive for vessels built from 2000 to 2002. The Tier 1 standards for Category 3 marine engines rely on engine

- based technologies to reduce emissions. Tier 2 emission standards for Category 3 mari ne engines went into effect in 2011

.

The main generator and emergency generator engines located on the Developer and the main generator and emergency generator engines located on the Discoverer Americas are marine engines subject to exhaust NO X emission s tandards under 40 CFR part 94

. The following is a

7 Khair, Magdi K

, DieselNet Technology Guide

, Engine Design for NO x Control

, May 20 02.

8 DieselNet Technology Guide

, Engine Design for Low Emissions

, March 2003.

9 EPA

, Office of Transportation and Air Quality

, Regulatory Impact Analysis: Control of Emissions of Air Pollution from Category 3 Marine Diesel Engines (EPA

- 420

- R

- 09

- 019)

, Chap ter 4

– Technological Feasibility

, December 2009.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 9 ENVIRON summary of the 40 CFR part 94 NO X emission standards that apply to the large diesel engines
located on the Developer and Discoverer Americas

.

• Developer main generator engines

– Tier 1 NO X exhaust emission standard of

11.5 g/kW

- hr (based on a maximum engine speed of 900 rpm ) 10

• Developer emergency generator engine

– Tier 1 NO X exhaust emission standard of

10.0 g/kW

- hr (based on a maximum engine speed of 1800 rpm )

• Discoverer Americas main generator engines

– T ier 1 NO X ex haust emission standard of

12.1 g/kW

- hr (based on maximum engine speed of 720 rpm)

• Discoverer Americas emergency generator engine

– Tier 2 NO X exhaust emission standard of 9.8 g/kW

- hr.



### 5.3.1.7 Turbo c harger with A ftercooler

A c harge air compression sys tem (turbocharg er ) is used to increase the power output of a diesel engine while reducing fuel co nsumption

. A turbocharger on a diesel engine works as
follows: t he engine ’s exhaust gas is used to drive a turbine that is mechanically linked to a

compressor , which increases the charge air to the engine . The increase in air to the engine cylinder requires additional fuel, which results in higher power output combined with better fuel consumption. By itself, a turbocharger does not reduce NO X emissions. How ever, the addition
of an aftercooler system to reduc e the charge air temperature after it has been compressed by the turbocharger compressor results in a decrease in the engine cylinder temperature during
combustion , which results in a decrease in thermal NO X emissions. 11

As indicated in Table 5.2.1

- 1 earlier in this section

, each of the large diesel engines on the Developer and Discoverer Americas is equipped with a turbocharger and aftercooler

.



### 5.3.1.8 Exhaust Gas Recirculation (EGR)
Although not listed in the R BLC, EGR is a new er diesel engine NO X combustion control technology that is becoming commercially available. EGR is a method by which a portion of the engine’s exhaust gas is returned to its combustion chambers via the combustion air inlet system
in order to reduce thermal NO X formation. In general, the most important factor contributing to
the NO X reduction effect of EGR is a decrease in the peak combustion temperature , which
decrease results from the heat a b sorption and reduced oxygen content of the ret urned inert exhaust gas. Potential issues associated with EGR include increased PM, VOC , and CO emissions, decreased fuel economy, and increased engine wear and durability issues. EGR is capable of NO X reductions from 40 to 50 percent.

10 Note that the Developer main generator engines have been certified to comply with the 40 CFR part 94 Tier 2 NO X emission standard that is applicable to similar sized engines with a model year starting in 2007. The Tier 2 standard is 9.8 g/kW

- hr.

11 EPA

, Office of Mobile Sources

, Final Regulatory Impact Analysis: Control of Emissions from Marine Diesel Engines (EPA

- 420

- R

- 99

- 026), Chapter 3 Technological Feasibility

, November 1999.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 10 ENVIRON 

### 5.3.1.9 Engine Replacemen t and Cam Shaft Cylinder Kits

O ther NO X emissions control alternatives for the large diesel engines located on the Developer
and Discoverer Americas includ e engine replacement and the installation of cam shaft cylinder

re

- engineering kits for certain older engines. Engine replacement is not a specific control technology, but replacing an older engine with a new engine meeting current NO X emission standards can result in lower emissions. To be a feasible option, the replacement engine would have to be capa ble of performing the duties required of the existing engine under the same operation conditions.

Clean Cam T echnology S ystems , LLC (CCTS) o ffer s retrofit cam shaft re

- engineering kits for

certain diesel engines. The kits reduce NO X emissions by increasi ng the volume of the residual exhaust gas that remains in the combustion chamber after the power stroke. The residual exhaust gases reduce the peak combustion temperature, which results in lower thermal NO X emissions.



### 5.3.1.10 Fuel

- Water Emulsions

The use of a fu el

- water emulsion in a diesel engine results in NO X emissions reductions based on the same principles discussed above for a WI system

. Specifically, the water in a fuel

- water emulsion vaporizes in the engine cylinder and increases f uel dispersion, which r esults in more
efficient combustion. Additionally, t he water vapor absorbs heat during the combustion process,
result ing in a decrease in th e peak combustion temperature, which reduc es thermal NO X formation by up to 5 0 percent. One limitation in the use of a fuel

- water emulsion i n an existing engine i s the fuel delivery capacity of the engine’s fuel injection system. The fuel injection system of an existing engine would not be expected to be designed to handle the increased
fuel

- water emulsion volume . T herefore

, such an engine would effectively be derat ed

.



### 5.3.1.11 Intake Air Humidification
Relying on effects similar to a WI system and the use of a fuel

- water emulsion, i n take air
humidification s ystems use a water s pray chamber to hum idify the hot charge air to the engine
before the air enter s the engine cylinder. The w ater in the air acts as an inert gas and absorbs
heat , which result in a decrease in the peak combustion temperature, thus reducing thermal
NO X forma tion

. S eawater could potentially be used in the i n take air humidification s ystem , but the long term effects of using seawater in an engine are unknown. However, it would be expected that using seawater in an i n take air humidification s ystem would present technical
difficulties for the s ystem itself, and the corrosion potential presented by the seawater would likely be incompatible with the large diesel engines on the drilling vessels.



### 5.3.1.12 Engine Derate
Although not listed in the RBLC, an engine can be derat ed by restricting the engine ’s operati ng
rate to a level below its rated capacity . Derating an engine reduces its operating temperature
and could result in lower NO X formation rates. However, the reduction in engine operating temperature could also resul t in higher CO and VOC emissions.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 11 ENVIRON 

### 5.3.1.13 NO X 

### Adsorbers

NO X adsorbers represent an emerging technolog y that adsorb and store NO X under lean burn
conditions. With this technology, NO X is adsorbed by a chemical, typically a barium salt or
other elemental salt. Th e adsorbent is coated onto a honeycomb monolith or the inside surface
of the exhaust duct. Periodically, the NO X adsorbent becomes saturated and must be regenerated. Regeneration is commonly completed by operating the engine in a fuel rich mode
for a bri ef period of time to facilitate the release of NO X in the form of nitrogen or ammonia

. Sulfur dioxide in the engine exhaust will poison the adsorber chemical, which makes fuel sulfur content an important factor for NO X adsorber feasibility. 12



### 5.3.1.14 Lean NO X 

### Cat alyst (LNC)/Hydrocarbon SCR (HC

- SCR)

L ean NO X c atalyst (LNC) systems , also known as hydrocarbon SCR (HC

- SCR) systems, represent another emerging technology in the area of NOx emissions reduction systems. LNC systems use an advanced catalyst to capture and store NO X . The catalyst is regenerated during short periods when excess hydrocarbon in the exhaust removes the stored NO X and reduces it to nitrogen and water. The hydrocarbon in the exhaust can be either unburned fuel from the engine or additional fuel added to the exhaust gases through injection. This system has the advantage that no additional reduc ing agent , such as the ammonia or urea required for an SCR system, is necessary. Excess hydrocarbon emissions (i.e., “ hydrocarbon slip”) from the LNC sys tem are addressed by locating a d iesel p articulate filter or d iesel o xidation c atalyst
downstream of the LNC system. Similar to SCR systems, LNC systems operate best at consistent high loads and are not amenable to long periods of engine idle or load shif ts

.



### 5.3.1.15 CSN Ox Emission Abatement System

CSNOx TM is an emission control technology developed by Ecospec to remove sulfur dioxide,
NO X , and c arbon d ioxide from the exhaust stream of an engine or boiler. CSNOx system s treat
the combustion exhaust gas by passing it through a spray tower having two stage s. During product testing CSNOx was capable of NO X removal efficiencies between 42 and 66 percent.



### 5.3.1.16 Good Combustion Practices (GCP)
As previously noted, although good combustion practices (GCP) can promote efficien t combustion and prevent excessive emissions, these practices do not necessarily result in NO X emissions reductions for an engine

. In regard to large diesel engines, GCP can consist of:

• Training o perations p ersonnel on the signs of improper engine operat ion, including visible plumes, and instruct ing these personnel to report such signs to maintenance personnel ;

• Having at least one full

- time equipment maintenance specialist onboard the drilling
vessel at all t imes during drilling activities;

• A weekly inspe ction of all the engines by the maintenance specialist or his designee to evaluate the engines for proper general operation;

12 Nelson, Bradley, EC/R In corporated

, Alternative Control Techniques Document: Stationary Diesel Engines , EPA
Contract No. EP

- D

- 07

- 019, March 5, 2010.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 12 ENVIRON • Following maintenance procedure s chedules recommended by the manufacturer and having a copy of the schedules available on the drill ing vessel ; and

• Having available a maintenance manual provided by the manufacturer for each engine

on the drilling vessel

.



### 5.3.1.17 Utilizing a “Newer” Drilling Vessel

Statoil has appropriately defined the OCS source in this permit application to include two

opera ting scenarios, Operating Scenario 1 ( Developer ) and Operating Scenario 2 ( Discoverer
Americas )

. While the overall NO X emissions for Operating Scenario 2 are less than those proposed under Operating Scenario 1, Statoil does not consider use of the Develop er in place
of the D iscoverer Americas as a candidate control technology, which is consistent with EPA’s BACT guidance where permit applicants are not generally required to fundamentally redefine

the source to wh ich a BACT analysis is applied.

The Develop er and the Discoverer Americas are dynamically

- positioned drilling vessel s , which

are considered leading edge technology in the deep waters where Statoil intends to explore. To execute the drilling program within the time frame of the lease, Statoil is pr oposing to permit
both of these drilling vessels t o allow flexibility in securing a vessel to initiate drilling activities.



### 5.3.2 Step 2

– Eliminate Technically Infeasible Options

In the below table, w e have summarized the NO X emissions control options that are not technically feasible for the large diesel engines located on the Developer and Discoverer
Americas

.

Table 5.3 .2

- 1 BACT Options Determined to be Technically Infeasible for Large (>500 hp) Diesel Engines

Drilling Vessel Number of Engines Emission s Unit / **Engine Description** Technically Infeasible Control Technolog y / Work Practice

Developer 8 Main Generator Engines (GEN

- 1 thru GEN

- 8 )

Wartsila Model 16V26 A (6,651 hp) • Exhaust Gas Recirculation (EGR)

• Water Injection (WI)

• Fuel

- Water Emulsion

• Intake Air Humid ification

• Cam Shaft Cylinder Kits (Re

- tooling)

• Engine Derate

• NO X Adsorbers

• Lean NO X Catalyst (LNC)/Hydrocarbon SCR (HC SCR)

• CSNOx Emission Abatement System

• Low NO X Design ( LND)/Engine Replacement

Discoverer
Americas 6 Main Generator Engines (GEN

- 1 thru GE N

- 6 )

STX MAN Model 14V32/40 (9,387 hp) • EGR

• WI

• Fuel

- Water Emulsion

• Intake Air Humidification

• Cam Shaft Cylinder Kits (Re

- tooling)Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 13 ENVIRON Drilling Vessel Number of Engines Emission s Unit / **Engine Description** Technically Infeasible Control Technolog y / Work Practice

• Engine Derate

• NO X Adsorbers

• LNC/HC SCR

• CSNOx Emission Abatement System

• Selective Catalytic Reduction (SCR)

Developer 1 Emergen cy Generator Engine (EGEN) Caterpillar Model 3516B (2,551 hp) • EGR

• WI

• Fuel

- Water Emulsion

• Intake Air Humidification

• Cam Shaft Cylinder Kits (Re

- tooling)

• Engine Derate

• NO X Adsorbers

• LNC/HC SCR

• CSNOx Emission Abatement System

Discoverer
Americas 1 Emergency Generator Engine (EGEN)

STX MAN Model 7L27/38 (3,097 hp) • EGR

• WI

• Fuel

- Water Emulsion

• Intake Air Humidification

• Cam Shaft Cylinder Kits (Re

- tooling)

• Engine Derate

• NO X Adsorbers

• LNC /HC SCR

• CSNOx Emission Abatement System

• LND /Engine Replacement

In t he follow ing

, we outline why the above technologies have been determined to be technically
infeasible.



### 5.3.2.1 Exhaust Gas Recirculation (EGR)
EGR is a relatively new control technology that has primarily been applied to smaller high speed diesel engines such as those in cars or trucks

, not to large, medium bore, medium speed engines used in marine applications. Exhaust gas that is recirculated back into the cylinders of the engine adds wear

- inducing contaminants ( e.g.
, soot ) and causes an increase in engine oil acidity, which can result in engine inefficiency and an increase in engine wear. Due to the limited application (if any) of EGR on engines such as the large diesel engines located on the
De veloper or Discoverer Americas and the noted technical issues associated wi th its general application

, we have determined that it is not technically feasible to retrofit the existing large diesel engines on the De veloper or Discoverer Americas with EGR

.



### 5.3.2.2 Water Injection/ Fuel

- Water Emulsions / Intake Air Humidification
Water injecti on i s considered technically infeasible for the large diesel engines due to engine retrofit incompatibility, excessive fresh water ( non

- salt water ) requirement s , and limited space availab ility on the vessels, which availability would be necessary to stor e the fresh water to be used in the system

. Furthermore, water injection introduces t he potential for engine damage

.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 14 ENVIRON The use of water injection can lead to cold corrosion of engine components and damag e to turbochargers and charge ai r coolers. 13 In conside ration of the individual t echnical infeasibility
determinations reach for EGR and water injection, t he combination of EGR and water injection

is also considere d technically infeasible.

F uel

- water emulsion is considered technically infeasible due to engine design and fuel injection system limitations ; excessive fresh water (non

- salt water) requirement s ; limited space availab ility on the vessels, which availability would be necessary to stor e the fresh water to be
used in the fuel

- water emulsion; and concern s about circulating the f uel

- water emulsion into fuel storage tanks on the drilling vessels

. Furthermore, the technology has only been installed on heavy fuel oil burning engines that typically operate at stead y

- state loads, whereas the drilling
vessel en gines under consideration burn diesel fuel at variable loads.

Intake air humidification is considered technically infeasible due to limited available space on the drilling vessels, which would be necessary for heat exchanger and water storage components o f an intake air humidification system . Large volumes of water are required to produce enough water vapor for an intake air humidification system. Typically, an intake air humidification system requires twice the amount of water compared to water injectio n or fuel

water emulsion systems. Additionally , heat required to vaporize the water is provided by the hot compressed air after the engine turbocharger, which at low engine loads may not provide enough heat t o properly operate the system. For these reaso ns, intake air humidification is not considered technically feasible.



### 5.3.2.3 Cam Shaft Retrofits
Clean Cam Technology Systems, LLC (CCTS) cam shaft retrofit kits are only available for two

stroke Detroit Diesel engines, model series 71 and 92. 14 None of the larg e diesel engines proposed in this permit application are two

- stroke engine s . T herefore, this technology is not
feasible for the engines

.



### 5.3.2.4 Engine Derat e Derating the large diesel engine s on the Developer and Discoverer Americas would likely result
in lower NO X emissions, but the reduction in available power for these engines would cause a safety risk for each drill ing vessel because the diminished power availability would potentially reduce the vessel’s ability to maintain correct positioning during storms and loop current events

. Based on the safety risks associated with derating the large diesel engines on the drilling
vessels , this technology is not feasible.



### 5.3.2.5 NO X 

### Adsorbers
The development of NO X adsorber systems for diesel engine s is ongoing, with NO X a dsorbers currently available for on

- road gasoline and diesel passenger vehicle engines. NO X adsorber systems are considered technically infeasible because they are not currently available for large
marine diesel engines.

13 Per communication with Quentin Stewart with Wartsila on July 6, 2012.

14 Per communication with Don Fairchild with CCTS on June 29 , 2012.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 15 ENVIRON 

### 5.3.2.6 Lean NO X 

### Catalyst (LNC) /Hydrocarbon SCR ( HC SCR )
While LNC systems have performed well in some retrofit applications, these systems ha ve primarily been used in on

- road diesel applications. It has also been install ed on diesel engines
used i n backhoes, graders, and wheel loaders. However, neither the LNC nor the HC SCR technology is commercially available for large marine engines. 13 3 Since these technologies are not currently available for large marine engines, they are considered technically infeasible options for the engines.



### 5.3.2.7 CSNOx Emission Abatement System

CSNOxTM technology is currently in the demonstration stages of product development and has not been installed or tested on an engine with v arying loads similar to the main generator and emergency generator engines

. Since CSNOx technology is not currently available for use on the large diesel engines located on the Developer and Discoverer Americas

, it is not considered technically feasible f or our application

.



### 5.3.2.8 Low NO X 

### Design (LND)/Engine Replacement for **D evelope**  **r** Main Generator Engines and **Discoverer Americas** Emergency Generator Engine

LND typically means the latest engine design features that minimize NO X emissions generation in an engine, and these features are intrinsic to a particular engine. Therefore, LND changes to an existing engine essentially represent the replacement of the engine with an engine that has been designed and constructed with the latest LND features.

Engine replaceme nt is not technically feasible for the main generator engines aboard the Developer because these engines meet the currently effective 40 CFR part 94 Tier 2 NO X emission standard. Although the Developer main generator engines were manufactured prior to

the Tier 2 emission standards applicability date (2007 + model year applicability date for engines the size of the main generator engines ), emission certification testing (see Appendix B for the certification summary for the engines ) demonstrates that the engi nes comply with the Tier 2
NO X emission standard that would apply to the engines

. Therefore, Tier 2 compliant replacement engine s would not be required to limit NO X emissions to a level lower than that achieved by the current Developer main generator engi nes.

Similar ly, engine replacement is not technically feasible for the emergency generator engine
aboard the Discoverer Americas because the engine meet s the currently effective 40 CFR part
94 Tier 2 NO X emission standard that is applicable to the engine

. Therefore, a Tier 2 compliant replacement engine would not be required to limit NO X emissions to a level lower than that achieved by the current D iscoverer Americas e mergency generator engine

.



### 5.3.2.9 S elective Catalytic Reduction (SCR) for **Discoverer Americas** Main
Generator Engines

An SCR system is designed in consideration of unit

- specific operations and exhaust stream
characteristics. For example, an emissions unit ’s exhaust stream temperature is an important variable in regard to the d esign and operation of an SCR system because the stream’sOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 16 ENVIRON temperature influences the specific type of catalyst that must be chosen for the system to ensure optimum NO X reduction. Therefore, if the temperature of the exhaust gas is below the optimum operating window of the sele cted catalyst, then the NO X reduction efficiency of the SCR system will decrease and the quantity of reducing agent emitted to the atmosphere (“slip”) or available for undesirable side reactions will increase. Conversely, if the temperature of the
exhaust gas is above the optimum operating window of the catalyst, then the reducing agent can be oxidized and generate additional NO X . Due to the large load variatio n demanded by operations on drilling vessels , the main generator engines aboard the vessels do n ot operate at

a steady load for long periods of time, which result s in inconsistent exhaust gas temperatures for the engines. Because the engines will not operate under uninterrupted steady loads, the
NO X reduction efficiency of an SCR system w ould likely be considerably less than 90 percent

. Additionally, the exhaust gas temperature variability would make it difficult to control s lip
emissions from an SCR system.

There are several technical, environmental

, and safety concerns associated with the operati on of an SCR system. According to EPA’s Tier 2 BACT/LAER Memorandum 15 , a refiner reported that catalyst plugging problems for an SCR system installed on a process heater at its facility have prevented the system from operating at its expected NO X reduction efficiency. The following are several steps that can be taken to reduce the potential for plugging and corrosion: (1) operate with the lowest ammonia injection levels needed to achieve the desired control performance, (2) reduce the level of sulfur in th e fuel (3) ensure proper mixing of the flue gas
and the ammonia to eliminate cold surfaces for ammonium salts to condense, and (4) operate at temperatures above the dew point of the ammonium salt. While proper design considerations and the incorporation o f sophisticated process control into an SCR system can provide means to manage these conditions, the expansiveness of the operating window required for the main generator engines and the dynamic operation of the engines are expected to limit the overall
ef fectiveness of an SCR system. Moreover, if necessary, additional operating costs and engine emissions would be required to operate electric heaters that would provide supplemental heat to the SCR system to ensure that it operated above the dew point of am monium salts that could potentially form in the system. A technical complication that is relatively unique to drilling
vessels is the consideration that must be given to weight and space constraints for these

vessels

. Drilling vessels must stay within ov erall weight and weight distribution limits to ensure they meet stability and buoyancy requirements required for safety purposes . In addition , m ost drilling vessels have been designed and constructed to maximize space utilization , and extra space is often times not readily available for changes to existing equipment components . These overall weight and space constraints limit the use of add

- on emissions controls such as an SCR system

. If emissions controls are added to a vessel , then the weight and posit ioning of the additional equipment affects the vessel ’s weight bearing capacity for other purposes, which can
result in costs to resolve and/or limit certain activities that are integral to the function of the drilling vessel . Additionally, such added wei ght may require structural modifications (e.g.

, additional load bearing structures). Moreover, the effect of these weight

- related changes, as well as the effects on power availability due to the addition of emissions controls to certain engines, may requi re app roval by various government and class ification organizations (e.g.,

15 EPA Memorandum, BACT and LAER for Emissions of Nitrogen Oxides and Volatile Organic Compounds at Tier 2/Gasoline Sulfur Refinery Project , January 19, 2001.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 17 ENVIRON United States Bureau of Safety and Environmental Enforcement

, United States Coast Guard

, American Bureau of Shipping )

.

Environmentally speaking , SCR systems generally operate with a molar ammonia

- to

- NO X ratio greater than that required by the reduction chemical reaction in order to achieve optimal NO X reduction efficiencies. This operational condition is referred to as ammonia slip and it results in
the emission of odorous ammonia i nto the atmosphere. A mmonia is not only odorous, but it can react in the atmosphere to generate fine particulate matter that scatters light and results in regional visibility problems. Furthermore, the formation of ammonium salts can cause visible plumes and elevated opacity readings from the stack of the emissions unit. Besides the noted air quality environmental concerns associated with an SCR system, some of the depleted catalysts from these systems may be considered hazardous wastes and therefore req uire comprehensive management procedures and precautions, as well as expensive disposal mechanisms. Lastly, although urea would likely be used in any SCR system for the main generator engines because it is less toxic than anhydrous ammonia and aqueous amm onia, the transportation, storage, and handling of urea, particularly in a marine environment, would still require safety and environmental considerations and manage ment practices

.

The Discoverer Americas is equipped with six identical main generator engi nes. Each of the engines is an STX MAN 14V32/40 with a maximum power rating of 7,000 kW (9,387 hp). The
Discoverer Americas does not require the simultaneous operation of all six engines, as represented by Statoil’s proposed average and maximum hourly pe rmit bases for the engines. The proposed annual average permit basis for the engines is the operation of three of the six engines at 35 percent engine rating ; and the proposed maximum hourly permit basis is the operation of four engines at 80 percent engi ne rating

. An SCR system was not part of the initial design for the Discoverer Americas

, and the drilling vessel is not currently equipped with an SCR system

.

In addition to the space requirements for the SCR reactor (s) and associated equipment , a large
stainless steel urea storage tank would need to be installed on the drilling vessel to supply the SCR system with reducing agent

. Based on typical main generator engine operations, a new 18,500 gallon (70 m 3 ) urea storage tank would be required to operate the SCR equipment under normal operating conditions for approximately two weeks. The new stainless steel tank (

~ 3 m diameter x ~ 10 m l ength ) would be roughly the same size and weight as one of the main generator engines. Space limitations on the vessel would not allow the SCR equipment

, specifically the urea storage tank, to be installed in the engine room without removing one of the

main generator engine s (engine room layout dr awing included in Appendix D).

The removal of an engine would significantly reduce the available power for the drill ing vessel

. A reduction in available power for the drilling vessel would cause a safety risk and potentially reduce the vessel’s ability to maintain correct positioning during storms and loop current events.
Based on the space constraints on the Discoverer Americas and the safety risks associated with removing one of its main engines to incorporate SCR system equipment, we have determined
that SCR is not feasible for the main generator engines located on the drillin g vessel

.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 18 ENVIRON 

### 5.3.3 Step 3

– Rank Remaining Control Technologies by Control Effectiveness
The following technologies represent those considered to be technically feasible for the main generator and emergency generator engines on the Developer and Discoverer America s

. T he technologies are listed from the highest to lowest potential NO X emissions control.

• Selective Catalytic Reduction ( SCR )

– U p to 90% NO X emissions reduction

o De veloper M ain Generator Engines

o Developer Emergency Generator Engine

o Discoverer Americas E mergency Generator Engine

• Engine R eplacement / 40 CFR part 94 Tier 2 Emission Standards

– Up to 2 0 % NO X emissions reduction

o Discoverer Americas Main Generator Engines

• Engine Replacement/40 CFR part 94 Tier 3 Emission Standards

– Up to 37 % NO X emissions reduc tion

o Developer Emergency Generator Engine

• 40 CFR part 94 Tier 1 Compliant Design

– Baseline emissions

o Discoverer Americas Main Generator Engines

o Developer Emergency Generator Engine

• 40 CFR part 94 Tier 2 Compliant Design

– Baseline emissions

o Developer Main Generator Engines

o Discoverer Americas Emergency Generator Engine



### 5.3.4 Step 4

– Evaluate Most Effective Control Options and Document Results

Below we evaluate the cost effectiveness for the NOx emissions control technologies determined to be technically feasib le for the large (>500 hp) diesel engines located on the Developer and Discoverer Americas

. For a particular NO X emissions control technique, the cost effectiveness was determined by dividing the technique’s annualized costs by the NO X emissions reduction resulting from the control technique

. Please see Appendix D for the

d etailed cost s and cost effectiveness calculations performed as part of this BACT review

.



### 5.3.4.1 Selective Catalytic Reduction ( SCR ) for **Developer** Main Generator Engines

The D eveloper is equip ped with eight identical main generator diesel engines. Each of the engines is a Wartsila 16V26A with a maximum power rating of 4,960 kW ( 6,651 hp). TheOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 19 ENVIRON D eveloper does not require the simultaneous operation of all eight engines, as represented by
Statoil ’s proposed average and maximum hourly permit bases for the engines. The proposed annual average permit basis for the engines is the operation of three of the eight engines at

60 percent engine rating; and the proposed maximum hourly permit basis is the o peration of f ive engines at 6 0 percent engine rating. An SCR system was not part of the initial design for the Developer , and the drilling vessel is not currently equipped with an SCR system.

Similar to the technical difficulties discussed above for the Discoverer Americas main generator engines, Statoil and Wartsila have concerns about the space requirements necessary to install SCR equipment and a related urea storage tank on the Developer to control NO X emissions
from the vessel’s ma in generator engine s . Wartsil a estimated urea usage of 4,000 l iters per day for normal engine operating conditions, which would require a new 15,000 gallon stainless steel storage tank to allow SCR operation over a two week period. Th is new stainless steel tank (~3

m diame ter x ~8 m l ength ) would be roughly the same size and weight as one of the main generator engine s. Additional space to install new equipment on the Developer is extremely limited without having to remove existing equipment. Although vessel space limitati ons likely
make the installation of SCR equipment technically infeasible, we have performed the following
SCR cost effectiveness analysis to demonstrate that SCR is not cost effective for the Developer main generator engines

.

The installation of one SCR s ystem to treat the combined exhaust gases from the eight main generator engines on the Developer is not believed to be less costly than an individual SCR system for each engine because one large SCR system would be expected to require extensive
structural modifications to the vessel when compared to eight smaller SCR systems. Additionally, a single SCR system would introduce process control and NO X emissions control
technical difficulties . Moreover

, a single SCR system would not provid e any backup or spar e SCR capacity, which would require the cessation of main generator engine operation during
SCR system maintenance or malfunction events. Likewise, the installation of only two or three SCR systems would likely not result in cost savings versus the instal lation of eight SCR systems because the two or three systems would be larger than the eight systems in order to provide for comparable NO X emissions control across the potential operating ranges of the engines and to provide some amount of backup or spare SCR system capacity during system maintenance or malfunction events. Furthermore, similar to one large SCR system, two or three SCR systems would result in complications in regard to process control requirements and the maintenance of high levels of NO X e missions control over the varying engine loads and corresponding
fluctuations in mixed e xhaust stream characteristics.

The operational flexibility required for the main generator engines makes it difficult to determine the cost effectiveness for any one o f the eight engines because assuming a greater proportion of the potential emissions under the emissions cap occurs at one or two engines results in a lower cost effectiveness value for that engine or those two engines, but the cost effectiveness
values fo r the remaining engines increase significantly. One could conduct numerous combinations of emissions/cost effectiveness analyses for the eight engines, but these
evaluations rely on emission rate limits for each engine , which runs counter to the proposed emissions cap permit basis for the engines. Statoil believes the most accurate cost effectiveness determination for the engines is based on the total NO X emissions reduction thatOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 20 ENVIRON would occur for the eight engines when each is equipped with an SCR system a nd the total cost
that would be associated with the installation and operation of the eight SCR systems. This analysis results in a cost effectiveness of $ 17, 203 /ton, which we do not believe to be cost
effective. Below w e discuss the details of this cost effectiveness determination.

The estimated total capital cost for the installation of an SCR system on a main generator engine aboard the De veloper is $ 3

, 500

, 000

. Based on a 10

- year life for an SCR system and

the utilization of a 7 percent annual intere st rate, the annualized cost for an SCR system for a main generator engine on the Developer would be $563,143. There are several n oteworthy components of this annualized cost determination

. First, t h e SCR system cost estimate used in this analysis is con servative because we did not include t he costs associated with continuous emissions monitoring system (CEMS) equipment, engineering and supervision, contractor fees, project contingency, and the fuel penalty associated with operating electric heaters. Sec ond , as pointed out, we have assumed that an SCR system installed on a Developer main generator engine would have a life of 10 years. In the more typical stationary source owner or operator circumstances, an engine and SCR system could be assigned a usefu l life more representative of the true useful life of the equipment. A 10

- year useful life has been assigned for this cost effectiveness analysis because this time period represents a realistic estimate of the longest continuous period Statoil would likel y lease the Developer . Drilling vessel leases are typically issued for periods of one to two years with an option to renew once for an additional year. This is done to allow both the lessee and lessor to take advantage of changing market conditions.

Lea sing the same drilling vessel for additional years of service beyond the first option ( i.e.

, after three years) requires negotiation of a new lease agreement. Therefore, the use of a 10

- year useful life actually represents a conservative basis for determi ning the SCR system cost
effectiveness for the Developer under a Statoil lease.

Third , if Statoil were to install SCR systems on the drilling vessel, Maersk would require a financial commitment from Statoil to remove the systems at the end of the Statoil

- Maersk lease agreement. Maersk has expressed that the SCR systems would be requested to be removed from the vessel because the systems would not be required by other lessees of the vessel, and Maersk and future lessees would not want to operate and mainta in the otherwise unnecessary equipment. Therefore, because any SCR system installed on the main generator engines of the vessel would be required to be removed at the end of the Statoil

- Maersk lease agreement,
Statoil has included the cost to conduct this removal activity in the cost effectiveness analysis.

Fourth

, we have included retrofit costs in this BACT cost analysis . The Developer is an existing drilling vesse l that was not designed with sufficient space or accessibility for SCR system
installatio n. Therefore, a considerable portion of the indirect costs used in this analysis is the
costs associated with downtime of the vessel for the installation and removal of the SCR systems under consideration . As described by EPA

, 16 the cost associated with l ost production for an existing source due to the installation of an emissions control device is a component of the indirect installation costs for a control device installation project . In this case, Statoil leases the drilling vessels for exploration act ivities and is obligated to pay a certain lease rate whether the drilling vessel is actively drilling or not. To install and remove the SCR systems, the drilling

16 EPA Pollution Control Cost Manual

, Sixth Edition, Chapter 2

- Cost Estimation: Concepts and Methodology, January 2002 ( EPA/452/B

- 02

- 001 ), pp. 2

- 28

- 2

- 30.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 21 ENVIRON vessel would be down for several days to allow sufficient time for equipment installation and removal and associated commissioning. The lease rate for the Developer is approximately $500,000 per day . We have estimated that 20 days would be required for the installation of the
SCR systems and associated commissioning, while 10 days would be requi red for the removal
of the SCR systems and the installation of the original vessel equipment. Statoil believes the

start

- up cost based on the non

- recoverable lease rate of the Developer is justified under the procedures and guidance provided by EPA

. Last ly, S tatoil has assumed that SCR system

installation and removal activities would be able to occur at sea, which may not be realistic, but this assumption eliminates additional lease days to travel to and from a port.

Now that we have presented the annual ized cost, the final component of this BACT cost effectiveness analysis is to determine the NO X emissions reduction that would result from the installation of the SCR system. W e have conservatively estimated that an SCR system would

reduce NO X emissions f rom a main generator engine by 75 percent, even though we expect
that it will be difficult to maintain this level of reduction at consistently varying engine loads. This efficiency is based on the difference between a baseline NO X emission factor of 8.2 g /kW

- hr (see Section 3.2.1 for the basis of this value) for the main generator engines and a post

- SCR system emission factor of 2 .0 g/kW

- hr , which was provided by an SCR system vendor

.

To determine the main generator engine

- SCR system cost effectiveness, w e d ivid ed the
estimated annualized cost of $563,143 by 32.74 tpy , which is the amount of NO X emissions
reduction estimated to be achieved by a 75 percent efficient SCR system . The resulting value is approximately $17,20 0 /ton, which we do not believe to be cost effective. Therefore, we do not
believe that SCR is cost effective for the main generator engines located on the Developer

.

P lease see Appendix D for the cost effectiveness calculations and supporting SCR equipment and operating cost information and data.



### 5.3.4.2 Selective Catalytic Reduction ( SCR ) for **Developer** Emergency Generator Engine

The Developer is equipped with one emergency generator engine (Eme rgency Generator Engine (Emissions Unit ID EGEN)) that will be operated during plan n ed maintenance and testing checks or in the event of an emergency. The engine maintenance and testing checks

are generally brief an d typically involve the engine operating under low load scenarios. During
the maintenance and testing events , the engine’s exhaust temperatur e is unlikely to reach the minimum temperature needed for an SCR catalyst to function properly, which would likely result
in the need to install an electric heater to heat the exhaust to a sufficient temperature. The proposed potential NO X emissions from normal maintenance and testing of the emergency generator engine and the expected emergency use of the engine based on past operations are 0. 76 tpy. Although there are serious technical difficulties related to operating an SCR system on engines that opera te less than an hour at low loads, we have performed the following SCR cost effectiveness analysis to demonstrate that SCR is not cost effective for the Developer emergency generator engine.

The estimated total capital cost for the installation of an SCR system on the emergency generator engine aboard the Developer is $ 25 0, 22 0. Based on a 10

- year life for an SCROuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 22 ENVIRON system and the utilization of a 7 percent annual interest rate, the annualized cost for an SCR system for the emergency generator engine on the D eveloper would be $ 40

, 879

. Note t hat
Statoil did not include CEMS costs or the costs associated with the required downtime for the Developer for the installation and removal of an SCR system on the emergency generator engine. As previously described, Sta toil would be responsible to pay the lease rate for the drilling vessel during the time period that would be required to install and remov e the SCR system from the emergency generator engine even though the drilling vessel would not be able
to conduct dril ling operations during this time period . Therefore, the annualized cost used in this analysis is a conservative estimate

.

Now that we have presented the annualized cost, the final component of th is BACT cost effectiveness analysis is to determine the NO X emissions reduction that would result from the installation of the SCR system. The NO X emissions control efficiency for the SCR system is

assumed to be 90 percent based on information provided by a n SCR vendor. Therefore, the SCR system would be expecte d to reduce NO X emissions from the emergency generator engine by 0.68 tpy.

To determine the emergency generator engine

- SCR system cost effectiveness, we divided the estimated annualized cost of $40,879 by 0.68 tpy, which is the amount of NO X emissions
red uction estimated to be achieved by a 90 percent efficient SCR system. The resulting value is approximately $ 60

, 000 /ton, which we do not believe to be cost effective. Therefore, we do not

believe that SCR is cost effective for the emergency generator engi ne located on the Developer

.

P lease see Appendix D for the cost effectiveness calculations and supporting SCR equipment and operating cost information and data.



### 5.3.4.3 Selective Catalytic Reduction ( SCR ) for **Discoverer Americas** Emergency Generator Engine

The D i scoverer Americas is equipped with one emergency generator engine (Eme rgency Generator Engine (Emissions Unit ID EGEN)) that will be operated during planed maintenance and testing checks or in the event of an emergency. The maintenance and testing checks are generally brief and typically involve the engine operating under low load scenarios. During the maintenance and testing events, the engine’s exhaust temperature is unlikely to reach the minimum temperature needed for an SCR catalyst to function proper ly, which would likely result in the need to install an electric heater to heat the exhaust to a sufficient temperature. The proposed potential NO X emissions from normal maintenance and testing of the emergency generator engine on the D iscoverer Americas are 1

. 0 3 tpy. Although there are serious technical difficulties related to operating an SCR system on engines that operate less than an hour at low loads, we have performed the following SCR cost effectiveness analysis to demonstrate that
SCR is not cost effective for the D iscoverer Americas emergency generator engine.

The estimated total capital cost for the installation of an SCR system on the emergency generator engine aboard the Discoverer Americas is $250,220. Note that we used the c apital
and annua l costs estimated for the installation of an SCR system on the Developer emergency generator engine for this engine. We believe this assumption is conservative because the

Discoverer Americas emergency generator engine is rated 20 percent higher than theOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 23 ENVIRON Developer emergency generator engine

. Based on a 10

- year life for an SCR system and the utilization of a 7 percent annual interest rate, the annualized cost for an SCR system for the emergency generator engine on the D iscoverer Americas would be $40,879. Note that Statoil

did not include CEMS costs or the costs associated with the required downtime for the

D iscoverer Americas for the installation and removal of an SCR system on the emergency generator engine. As previously described, Statoil would be res ponsible to pay the lease rate for the drilling vessel during the time period that would be required to install and remov e the SCR system from the emergency generator engine even though the drilling vessel would not be able to conduct drilling operations d uring this time period. Therefore, the annualized cost used in this analysis is a conservative estimate.

Now that we have presented the annualized cost, the final component of this BACT cost effectiveness analysis is to determine the NO X emissions reduct ion that would result from the installation of the SCR system. The NO X emissions control efficiency for the SCR system is assumed to be 90 percent based on information provided by an SCR vendor. Therefore, the SCR system would be expected to reduce NO X e missions from the emergency generator engine by 0. 92 tpy.

To determine the emergency generator engine

- SCR system cost effectiveness, we divided the estimated annualized cost of $40,879 by 0. 92 tpy, which is the amount of NO X emissions
reduction estimated to be achieved by a 90 percent efficient SCR system. The resulting value is approximately $ 44

, 4 00/ton, which we do not believe to be cost effective. Therefore, we do not believe that SCR is cost effective for the emergency generator engine located on the D iscoverer
Americas

.

P lease see Appendix D for the cost effectiveness calculations and supporting SCR equipment and operating cost information and data.



### 5.3.4.4 Engine Replacement / Tier 2 Emission Standards for **D iscoverer Americas** 
Main Generator Engine s

While en gine replacement is not a specific control technology, replacing an older engine with a new engine meeting current NO X emission standards could result in lower NO X emissions. A new ( 201 1

- 2015 model year) replacement engine with the same power rating and c ylinder displacement size as the existing Discoverer Americas main generator engine s would be manufactured to meet 40 CFR part 1042 Tier 2 emission standards for Category 3 Engines

. The installation of a 40 CFR part 1042 Tier 2 compliant replacement engin e would result in a
NO X emissions control efficiency of approximately 2 0 percent. This percent reduction was determined by comparing the baseline NO X emission factor for the existing 40 CFR part 94 Tier 1 compliant main generator engine, 9.2 g/kW

- hr, to t he 40 CFR part 1042 Tier 2 emission standard, 9.7 g/kW

- hr, that would be required for a new replacement engine having the same power rating , engine speed (in rpm ), and cylinder displacement size as the existing main generator engine s

.

Similar to the discu ssion above for SCR on the Developer main generator engines, the operational flexibility necessary for the main generator engines makes it difficult to determine the cost effectiveness for any one of the eight engines. Statoil has conducted the costOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 24 ENVIRON effec tiveness analysis for the main engine replacement based on three engines operating at

35 percent load and five engines on standby. Statoil conservatively estimates the total capital cost for replacement of the eight Discoverer Americas main generator engi nes to be $ 6,250,000 per engine. This cost estimate only includes the cost associated with rig downtine associated with removing the existing engines and installing eight new main generator engines. Statoil conservatively estimates that the replacement o f all eight main engine would take 100 days at a daily lease rate of $500,000 per day. Please note the total capital cost estimate does not include the actual engine cost or any other costs associated with the replacing the engines.

As previously describ ed, Statoil would be responsible to pay the lease rate for the drilling vessel during the time period that would be required to remove the existing main generator engine s and install a replacement engine even though the drilling vessel would not be able to conduct drilling operations during this time period. Therefore, this total capital cost is a conservative

estimate

. Based on a 10

- year life for the replacement engine and the utilization of a 7 percent annual interest rate, the annualized cost for one r eplacement main generator engine on the
Discoverer Americas would be $ 889 ,8 5 9.

Now that we have presented the annualized cost, the final component of this BACT cost effectiveness analysis is to determine the NO X emissions reduction that would result from the replacement of the existing main generator engine with a lower NO X emitting replacement engine. We have estimated that the installation of a 40 CFR part 1042 Tier 2 compliant replacement engine would result in a total NO X emissions reduction of 83 tpy (10.37 tpy per engine) relative to the existing engine s

.

To determine the replacement main generator engine s cost effectiveness, we divided the estimated annualized cost of $ 889 ,8 5 9 by 1 0. 37 tpy, which is the amount of NO X emissions
reduction estimated t o be achieved by one replacement engine. The resulting value is approximately $ 85

, 821 /ton, which we do not believe to be cost effective. Therefore, we do not believe that engine replacement is cost effective for the main generator engine s located on the
Discoverer Americas

.

Please see Appendix D for the cost effectiveness calculations and supporting engine replacement equipment and operating cost information and data.



### 5.3.4.5 Engine Replacement /Tier 3 Emission Standards for **De veloper**  Emergency Generator Engine
While engine replacement is not a specific control technology, replacing an older engine with a

new engine meeting current NO X emission standards could result in lower NO X emissions. A

n ew ( 2012 model year+) replacement engine with the same power rating a nd cylinder displacement size as the existing D eveloper emergency generator engine would be
manufactured to meet 40 CFR part 1042 Tier 3 emission standards. The installation of a 40 CFR part 1042 Tier 3 compliant replacement engine would result in a NO X e missions control efficiency of approximately 37 p ercent

. This percent reduction was determined by comparing
the baseline NO X emission factor for the existing 40 CFR part 94 Tier 1 compliant emergency generator engine, 9

. 2 g/kW

- hr

, to the 40 CFR part 1042 Tier 3 emission standard, 5.8 g/kW

- hr,Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 25 ENVIRON that would be required for a new replacement engine having the same power rating and cylinder displacement size as the existing emergency generator engine.

The estimated total capital cost for the installation of a r eplacement emergency generator engine on the Developer is $ 84,755

. This total capital cost does not include the costs associated with the required downtime for the Developer for the removal of the existing emergency generator engine and the installation o f a replacement engine. As previously described, Statoil would be responsible to pay the lease rate for the drilling vessel during the time period that would be required to remove the existing emergency generator engine and install a replacement engine ev en though the drilling vessel would not be able to conduct drilling operations during this time period. Therefore, this total capital cost is a conservative estimate

. Based on a 10

- year life for the replacement engine and the utilization of a 7 percent a nnual interest rate, the annualized cost for a replacement emergency generator engine on the

D eveloper would be $40,879.

Now that we have presented the annualized cost, the final component of th is BACT cost effectiveness analysis is to determine the NO X e missions reduction that would result from the replacement of the existing emergency generator engine with a lower NO X emitting replacement engine

. We have estimated t h at the installation of a 40 CFR part 1042 Tier 3 compliant replacement engine would resu lt in a NO X emissions control efficiency of 37 percent, as
described above . Therefore, the replacement emergency generator engine would be expected
to reduce NO X emissions by 0. 28 tpy relative to the existing engine

.

To determine the replacement emergenc y generator engine cost effectiveness, we divided the estimated annualized cost of $ 12

, 067 by 0. 28 tpy, which is the amount of NO X emissions reduction estimated to be achieved by the replacement engine . The resulting value is approximately $4 3,407 /ton, wh ich we do not believe to be cost effective. Therefore, we do not

believe that engine replacement is cost effective for the emergency generator engine located on

the D eveloper

.

Please see Appendix D for the cost effecti veness calculations and supporting e ngine replacement equipment and operating cost information and data.



### 5.3.4.6 Tier 1 Emission Standards for **Discoverer Americas** Main Generator Engines and **Developer** Emergency Generator Engine

The emergency generator engine on the Developer and the main generator e ngine s on the
Discoverer Americas are equipped with 40 CFR part 94 Tier 1 compliant technology ( e.g.
, t urbocharger, a ftercooler, h igh i njection p ressure ), w hich represents the only remaining technically feasible technology for the engines. Because these e ngines are already equipped
with Tier 1 compliant technology, no cost effectiveness determinations are necessary for the technology

.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 26 ENVIRON 

### 5.3.4.7 Tier 2 Emission Standards for **Developer** Main Generator Engines and
**Discoverer Americas** Emergency Generator Engine

The main generator engines on the Developer and the emergency generator engine on the
Discoverer Americas are equipped with 40 CFR part 94 Tier 2 compliant technology ( e.g.
, t urbocharger, a ftercooler, h igh i njection p ressure ), w hich represents the only remaining

t echnically feasible technology for the engines. Because these engines are already equipped with Tier 2 compliant technology, no cost effectiveness determinations are necessary for the technology

.



### 5.3.5 Step 5

– Select BACT
With SCR and engine replacement elimi nated, the following table summarizes the BACT determinations made for the large (>500 hp) diesel engines on the De veloper and Discoverer
Americas

.

Table 5.3.5

- 1 Summary of BACT Determinations for **Developer** and
**Discoverer Americas** Large (>500 hp) Diesel E ngines

Drilling Vessel Number of Engines Emission s Unit / **Engine Description** Average
Annual NO X Emissions
Level (g/kW

- hr) Control Technolog y / Work Practice

Developer 8 Main Generator Engines (GEN

- 1 thru GEN

- 8 ) Wartsila Model 16V26 A (6,651 hp) 8.2 40 CFR p art 94 Tier 2 Compliant Design, including Turbocharger, Aftercooler, High Injection Pressure, and Low NO X Tuning

Discoverer
Americas 6 Main Generator Engines (GEN

- 1 thru GEN

- 6 )

STX MAN Model 14V32/40 (9,387 hp) 12. 1 40 CFR part 94 Tier 1 Compliant Design, including Turbocharger, Aftercooler, and High Injection Pressure

Developer 1 Emergency Generator Engine (EGEN) Caterpillar Model 3516B (2,551 hp) 9.2 40 CFR part 94 Tier 1 Compliant Design, including Turbocharger, Aftercooler, and Electronic Fuel Injecti on

Discoverer
Americas 1 Emergency Generator Engine (EGEN)

STX MAN Model 7L27/38 (3,097 hp) 9.8 40 CFR part 94 Tier 2 Compliant Design, including Turbocharger, Aftercooler, and High Injection Pressure



### 5.4 NO X 

### BACT Analysis for Small (≤ 500 hp) Diesel Engines

In this section, we discuss the top

- down BACT analysis conducted for the small ( ≤ 500 hp) diesel engines located on the Developer and Discoverer Americas

. T he small diesel engines located
on the Developer a re the two cement unit engines (Emission s Unit IDs CMU

- 1 and CMU

- 2 )

. T he small diesel engines located on the Discoverer Americas are the two emergency air

compressor engine s (Emission s Unit ID s ACOMP

- 1 and ACOMP

- 2)

.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 27 ENVIRON 

### 5.4.1 Step 1

– Identify All Control Technolo gies

Available NO X control technologies for small (≤500 hp ) diesel engines were determined by searching the EPA RBLC using the following search conditions: Process Code 17.210

– Small Internal Combustion Engines (≤500 HP); Fuel Oil (ASTM #1, 2, includes kerosene, aviation, diesel fuel). Table 5.3

- 1 below summarizes the NOx control technologies for large diesel engines identified in the RBLC.

Table 5.4.1

- 1
EPA RBLC NO X Control Technologies for Small ( ≤ 500 hp ) Diesel Engines

Abbreviation Control Technology Typical Percent
Reduction

ITR I gnition Timing Ret ard 10

- 50%

IAC Combustion A ir C hiller/ I ntake A ir C ooling

Tier 1 or 2 Tier 1 or Tier 2 Emission Standards per 40 CFR part 89 or 40 CFR part 94 30%

- Turbocharger with Aftercool er V aries

GCP Good C ombustion P ractices

-
None No controls specified

-

Th e complete RBLC database download for small diesel engines is provided in Appendix D. Note that only those determinations made after January 1, 1999, were downloaded because older determinations are typically less stringent. The RBLC also listed lean bur n and clean fuel
as NO X control techniques for small diesel engines

. However, t hese techn iques do not specific ally reduce NO X emissions ; therefore, they are not discussed further

.

The RBLC database does not indicate that SCR technology has been installed on engines rated

at 500 hp or less . This suggests that SCR has not previously been deemed as BACT for this engine category due to technical infeasibility and/or energy, environmental, or economic impacts. as previously discussed in Section 5.2. The sam e holds true for small engines ≤ 500 hp and SCR is not disc ussed further in this section.

In addition to the small diesel engine NO X emissions controls listed in the RBLC , Statoil considered the control technologies included in Table 5.4.1

- 2 below. These control technologies were identified by reviewing permit applications and comments on draft permits for other OCS sources and reviewing publications on diesel engine emissions control technologies.

Table 5 .4.1

- 2
Other NO X Control Technologies for Diesel Engines

Abbreviation Control Technology Typical
Percent Reduction

EGR Exhaust Gas Recirculation 40

- 50%Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 28 ENVIRON Abbreviation Control Technology Typical
Percent Reduction

- EGR with Water Injection ( WI ) Varies

- Engine Replacement (replacing old engine with new)

- Engine Re

- Tooling (engine rebuild kits)

- Fuel

- Water Emulsions

- Intake Air Humidification

- Engine Derate

- NO X Adsorber (NO X Traps)

LNC / HC

- SCR Lean NO X Catalyst / Hydrocarbon SCR

CSNOx CSNO X Emission Abatement System

Except for EGR, specific NO X reduction efficiencies were not identified for th e control technologies in Table 5.4.1

- 2. The expected control efficiency for these technologies varies based on the level of existing controls in place or the baseline emissions for each particular engine. The estimated control efficiencies for technical ly feasible control technologies are included in the evaluation of controls (Step 4) presented later in this section.

Because th e list of NO X emissions control technologies for small diesel engines does not include any technolog ies that were not reviewed in Step 1 of the large diesel engine BACT analysis in Section 5.3.1, p lease refer to that section of the permit application for a detailed description of the potential NO X emissions control technologies for small diesel engines.



### 5.4.2 Step 2

– Eliminate Technic ally Infeasible Options
The following control options are considered technically infeasible for all of the small diesel engines located on the De veloper or Discoverer Americas unless otherwise noted.

• Exhaust Gas Recirculation (EGR)

• Engine Replacement

• Wate r Injection (WI)

• Fuel

- Water Emulsion

• Intake Air Humidification

• Cam Shaft Cylinder Kits (Re

- tooling)

• Engine Derate

• NO X Adsorbers

• Lean NO X Catalyst (LNC) / Hydrocarbon SCR (HC SCR)Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 29 ENVIRON • CSNOx Emission Abatement System

The following outlines why the above technolog ies have been determined to be infeasible for

small diesel engines located on the De veloper and Discoverer Americas

.



### 5.4.2.1 Exhaust Gas Recirculation (EGR)
EGR is a relatively new control technology that has primarily been applied to smaller high speed
diesel en gines such as those in cars or trucks. Exhaust gas that is recirculated back into the cylinders of the engine adds wear

- inducing contaminants ( e.g.
, soot ) and causes an increase in engine oil acidity, which can result in engine inefficiency and an increas e in engine wear. Due to the limited application (if any) of EGR on marine engines such as the small diesel engines
located on the De veloper or Discoverer Americas and the noted technical issues associated with its general application

, we have determined that it is not technically feasible to retrofit the existing small diesel engines on the De veloper or Discoverer Americas with EGR

.



### 5.4.2.2 Engine Replacement
Engine replacement is not technically feasible for the small engines located on the Developer
and Discov erer Americas because the engines are relatively new and comply with the stringent
40 CFR part 94 Tier 2 NO X emission s tandards

. Therefore, a new small diesel engine would likely have the same NO X emissions characteristics as the existing small diesel eng ines on the Developer and Discoverer Americas , resulting in relatively none to limited NO X emissions
control.



### 5.4.2.3 Water Injection, Fuel

- Water Emulsions, and Intake Air Humidification
Water injection , fuel

- water emulsion, and intake air humidification are cons idered technically infeasible due to engine retrofit incompatibility, the excessive fresh water (non

- salt water) requirement s
, and limited space availab ility on the vessels, which availability would be necessary to stor e the fresh water to be used in these systems

. Furthermore, water injection
introduces the potential for engine damage

. The use of water injection can lead to cold corrosion of engine components and damage to turbochargers and charge air coolers.

In consideration of the individual technica l infeasibility determinations reach for EGR and water injection, the combination of EGR and water injection is also considered technically infeasible.



### 5.4.2.4 Cam Shaft Retrofit s Clean Cam Technology Systems, LLC ( CCTS ) cam shaft retrofit kits are only available for two

stroke Detroit Diesel engines, model series 71 and 92. None of the small diesel engines proposed in this application are two

- stroke engine s . T herefore, this technology is not feasible for the engines

.



### 5.4.2.5 Engine D erate
Derating the small diesel eng ines on the Developer and Discoverer Americas would likely result
in lower NO X emissions, but the reduction in available power for these engines would cause operational complications on the drilling vessels because the services (cement unit and air

compres sion operations) provided by the engines must be achievable at rates corresponding toOuter Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 30 ENVIRON the engines’ rated capacities. The cement operations on a drilling vessel are critical to safe drilling operations, and derating the cement unit engines could potentiall y result in scenarios where safe drilling operations would be comprised due to insufficient cement unit operating rates. Similarly, the emergency air compressor engines located on the Discoverer Americas represent “emergency” operations, and derating thes e engines would potentially compromise critical drilling vessel operations that could lead to damage to vessel equipment or result in unsafe vessel operations

. Based on the safety risks associated with derating the small diesel engines on the drilling ves sels, this technology is not feasible.



### 5.4.2.6 NO X 

### Adsorbers
The development of NO X adsorber systems for diesel engines is ongoing, with NO X adsorbers currently available for on

- road gasoline and diesel passenger vehicle engines. NO X adsorber systems are conside red technically infeasible because they are not currently available for small marine engines. 13 3



### 5.4.2.7 Le an NO X 

### Catalyst (LNC)/Hydrocarbon SCR (HC SCR)
While LNC systems have performed well in some retrofit applicat ions, these systems ha ve primarily been used in on

- road diesel applications. It has also been install ed on diesel engines
used in backhoes, graders, and wheel loaders. However, neither the LNC nor the HC SCR technology is commercially available for marin e engines. Since these technologies are not currently available for marine engines, they are considered technically infeasible options for the engines.



### 5.4.2.8 CSNOx Emission Abatement System

CSNOxTM technology is currently in the demonstration stages of product development and has not been installed or tested on an engine similar to the cement unit engines or emergency air compressor engines. Since CSNOx technology is not currently available f or use on the small marine diesel engines located on the Developer and Discoverer Americas , it is not considered technically feasible for our application.



### 5.4.3 Step 3

– Rank Remaining Control Technologies by Control Effectiveness
40 CFR part 94 Tier 2 complian t engine design, including turbocharger

, aftercool er, and /or electronic fuel injection technologies, is essentially the only remaining NO X emissions control technology remaining for the small diesel engines located on the Developer and Discoverer
Americas

. We have determined that 40 CFR part 94 Tier 2 compliant engine design, including charge air cooling and ignition control design and operations, is technically feasible for the small diesel engines on the drilling vessels.



### 5.4.4 Step 4

– Evaluate Most Effectiv e Control Options and Document Results

The small diesel engines on the De veloper and Discoverer Americas are equipped with Tier 2 compliant technology , which represents the only remaining technically feasible technology for the engines

. Because these engi nes are already equipped with Tier 2 compliant technology, no
cost effectiveness determinations are necessary for the technology

.Outer Continental Shelf Title V and PSD Permit Application

BACT A nalysis 5

- 31 ENVIRON 

### 5.4.5 Step 5

– Select BACT
Based on the above analysis, the following table summarizes the BACT determinations made for the small ( ≤ 500 hp) diesel engines on the De veloper and Discoverer Americas

.

Table 5. 4 .5

- 1 Summary of BACT Determinations for Small ( ≤ 500 hp) Diesel Engines on the **Developer** and **Discoverer Americas**

Drilling
Vessel Number of Engines Emission s Unit / **Engine Description** Average Annual NO X Emissions
Level (g/kW

- hr) Control Technolog y /
Work Practice

Developer 2 Cement Unit Engines ( CMU

- 1 and CMU

- 2) Caterpillar Model C15 (500 hp) 7.2 40 CFR part 94 Tier 2 Com pliant Design, including Turbocharger, Aftercooler

, and Electroni c Fuel Injection

Discoverer
Americas 2 Emergency Air Compressor Engines (A C OMP

- 1 and ACOMP

- 2) Duetz Model F3L912 (50 hp)

Duetz M odel F4L912 (68 hp) 7.5 40 CFR part 94 Tier 2 Compliant Design

, including Turbocharger and After cooler