From: Michael Carbon [mcarbon@environcorp.com]

Sent: Thursday, April 25, 2013 12:15 PM

To: Shepherd, Lorinda

Cc: Donald Evans (DOEV@statoil.com); Kjersti Seim (kjes@statoil.com); Kyle Heitkamp; Michael Carbon Subject: Statoil

- Response to EPA Email Questions
Attachments: Maersk_Developer

- Emissions_and_Forms.pdf; Transocean_Discoverer_Americas

- Emissions_BACT_and_Forms.pdf

Importance: High

Lori,

This email correspondence contains responses to a series of questions you provided to Statoil over the
last month and a half. Responses are separated for each of the two drill rigs, and a series of
attachments include more detailed emission calculations.



### Maersk Developer

Will the project include flaring? No, the Developer do es not have flare booms installed and Statoil is not proposing to conduct any flaring during the exploratory drilling operations.

Will any welding activities be conducted during the drilling campaign? Yes, welding occurs as part of regular maintenance a ctivities. Rig operators estimate that up to

240 pounds of welding electrodes could be used per 180

- day drilling campaign. Electricity for welding is provided by the main engines on the drilling vessel. ENVIRON has estimated emissions from the welding

a ctivities to be less than 0.01 tpy of PM/PM10/PM2.5 and approximately 7 lb/yr of total HAP. Detailed emission calculations for welding activities are attached to this email.

Since potential emissions of regulated air pollutants are less than 2 tpy, and H AP emissions are less than
1,000 lb/yr, the emission levels from welding activities are considered insignificant per 40 CFR 71.5(c)(11)(ii). There are no applicable regulations that would apply to the maintenance welding

activities.

Detailed emission cal culations for welding activities and application forms that required an update are
attached to this email.

Will any painting (spray or roller) activities be conducted during the drilling campaign? Yes, painting occurs as part of regular maintenance ac tivities. Rig operators estimate that up to

380 gallons of paint coating and 310 gallons of paint thinner could be used per 180

- day drilling campaign. Paint is applied using both brush/roller and sprayer depending on the size and location that

needs to b e painted; however, ENVIRON has assumed 100 percent of the paint is applied by spray to conservatively account for particulate matter emissions generated from paint overspray.

MSDS information (Percent Solids, VOC content, HAP content, etc.) was obtained for each paint coating and thinner used on the drill rig. ENVIRON has estimated emissions from painting in Table 1 below. Detailed emission calculations and application forms that required updating are attached to this email.Since po tential HAP emissions (Xylene) are above the 1,000 lb/yr insignificance level, painting activities

are not considered an insignificant activity. There are no applicable regulations that would apply to the maintenance painting activities.

Table 1. Maers k Developer

– Painting Emissions

Pollutant Emissions

(tpy)

PM10 0.3

PM2.5 0.1

VOC 1.5 Xylene 0.8

Will any seismic operations require additional emission units not included in the application? No, vertical seismic profile (VSP) activities during the Statoil exploratory drilling campaign will be drill rig
based. Electric compressors powered by the drill rig main engines will be utilized for all VSP activities and Statoil will not be including an y additional boats or compression/spark ignition engines as part of

the seismic measurement activities.

Description of cement/mud mixing activities? Dry cement and mud additives are mixed onboard the drill rig for use in casing and drilling operations. On the Developer drill rig, the mixer is completely enclosed and air that is displaced by the addition of dry materials and/or wet mud is directed back to the enclosed material conveyors. The enclosed conveyor and mixing system prevents the dry cement an d mud mixing activities from being emitted as particulate matter to the atmosphere. We do not anticipate particulate emissions from this fully enclosed process.



### Transocean Discoverer Americas

Will the project include flaring? No, the Discoverer America s does not have flare booms installed and Statoil is not proposing to conduct any flaring during the exploratory drilling operations.

Will any welding activities be conducted during the drilling campaign? Yes, welding occurs as part of regular maintenan ce activities. Rig operators estimate that up to

50 pounds of welding electrodes could be used per 180

- day drilling campaign. Electricity for welding is provided by the main engines on the drilling vessel. ENVIRON has estimated emissions from the weldin g activities to be less than 0.002 tpy of PM/PM10/PM2.5 and less than 2 lb/yr of total HAP.

Since potential emissions of regulated air pollutants are less than 2 tpy, and HAP emissions are less than
1,000 lb/yr, the emission levels from welding activiti es are considered insignificant per 40 CFR 71.5(c)(11)(ii). There are no applicable regulations that would apply to the maintenance welding

activities. Detailed emission calculations for welding activities and application forms that required an update ar e attached to this email.

Will any painting (spray or roller) activities be conducted during the drilling campaign?Yes, painting occurs as part of regular maintenance activities. Rig operators estimate that up to

250 gallons of paint coating and 250 gallons of paint thinner could be used per 180

- day drilling campaign. Paint is applied using both brush/roller and sprayer depending on the size and location that needs to be painted; however, ENVIRON has assumed 100 percent of the paint is applied by sp ray to conservatively account for particulate matter emissions generated from paint overspray.

MSDS information (Percent Solids, VOC content, HAP content, etc.) was obtained for each paint coating and thinner used on the drill rig. ENVIRON has estimate d emissions from painting in Table 2 below. Detailed emission calculations and application forms that required updating are attached to this email.

Since potential emissions of regulated air pollutants are less than 2 tpy, and individual HAP emissions

ar e less than 1,000 lb/yr, the emission levels from painting activities are considered insignificant per 40 CFR 71.5(c)(11)(ii). There are no applicable regulations that would apply to the maintenance painting

activities.

Table 2. Transocean Discoverer

– P ainting Emissions

Pollutant Emissions

(tpy)

PM10 0.2

PM2.5 0.1

VOC 1.5 Xylene 0.4

Will any seismic operations require additional emission units not included in the application? No, vertical seismic profile (VSP) activities during the Statoil exploratory drilling campaign will be drill rig
based. Electric compressors powered by the drill rig main engines will be utilized for all VSP activities and Statoil will not be including an y additional boats or compression/spark ignition engines as part of

the seismic measurement activities.

Description of cement/mud mixing activities? Dry cement and mud additives are mixed onboard the drill rig for use in casing and drilling operations. On the Discoverer Americas drill vessel, the mixing area is not fully enclosed like the Maersk Developer, but the Discoverer Americas contains dust pickup points routed to a dust collector for control. There are no applicable regulations that would apply to the handling of cement/mud additives.

Particulate matter emissions are based on the dust collector design flow rate (4,415 cfm) and an exhaust grain loading of 0.01 grains per dry standard cubic foot, established from discussions with the dust
collect or manufacturer. Assuming continuous dust collector operation (180 days/yr), potential PM/PM10/PM2.5 emissions are 0.4 lb/hr and 0.8 tpy. The cement handling activities are not considered insignificant. Detailed emission calculations and updated forms a re attached to this email.

Update BACT EGEN BACT Analysis for Engine Replacement? The BACT analysis included in the original permit application did not include technical feasibility or cost effectiveness for replacement of the Transocean Discoverer Amer icas emergency generator engine because, at that time, Statoil believed the engine was Tier 2 compliant. Subsequent information provided to Statoil showed the engine was certified as IMO compliant engine, but the engine was not certified Tier 2 compliant.Compliance with EPA’s emission standards (Tier 2, Interim Tier 4, and Final Tier 4) is an inherent part of

engine design and no modifications or retrofits can be made to an existing engine to obtain a newer
emission certification level. The NSPS Subpart IIII requires the owner or operator to purchase a certified engine in order to comply with the NSPS regulations (40 CFR 60.4211(c)) and does not allow the engine manufacture to provide certification for any Tiered emission levels if additi onal emission controls were to be added to the engines. Therefore, to meet an emission certification level, the engine would need to be replaced with a new engine. Replacement of the emergency engine would require the new engine to have a similar output rating, meet vessel space and footprint restrictions, and weight distribution requirements that were determined during the vessel design phase. Replacement of the engine could also require a re

- design of the engine frame, modification of drill vessel stru cture, and potentially require the rig owner to recertify the vessel.

Even though the technical limitations provided above would likely prove replacement of the existing emergency engine is technically infeasible, Statoil has included conservative cost ef fectiveness calculations assuming that a Tier 4 engine (meeting most stringent future emission standard) is
available. A Tier 4 engine would be limited to NOx emissions of 0.67 g/kW

- hr (40 CFR 1039.101, Table 1).

Conservatively assuming a new 3,000 hp engine would cost $20,000 and require one day in dry dock to install ($500,000), the cost effectiveness of the engine replacement is over $90,000 per ton of NOx

removed. The replacement of an emergency engine would require a yard stay based on safety c oncerns that the loss of main engines at sea without an emergency backup would clearly be an unsafe situation. Based on the very conservative cost effectiveness calculations, replacement of the emergency generator engine with a future Tier 4 engine would not be cost effective. The cost effectiveness calculations for the EGEN replacement are attached.

Update BACT ACOMP BACT Analysis for Engine Replacement? The BACT analysis included in the original permit application did not include technical feasibilit y or cost effectiveness for replacement of the Transocean Discoverer Americas emergency air compressor engines engine because, at that time, Statoil believed the engines were Tier 2 compliant. No emission
certification documents were available from the en gine manufacture, so Statoil has conservatively assumed the engines do not meet any emission standards.

Compliance with EPA’s emission standards (Tier 2, Interim Tier 4, and Final Tier 4) is an inherent part of engine design and no modifications or retrof its can be made to an existing engine to obtain an emission
certification level. The NSPS Subpart IIII requires the owner or operator to purchase a certified engine in order to comply with the NSPS regulations (40 CFR 60.4211(c)) and does not allow the en gine manufacture to provide certification for any Tiered emission levels if additional emission controls were to be added to the engines. Therefore, to meet an emission certification level, the two emergency engines would need to be replaced with new engi nes. Replacement of the emergency engines would require the new engines to have a similar output rating, meet vessel space restrictions, and weight distribution requirements that were determined during the vessel design phase. Replacement of the engines could also require a re

- design of the engine frame, modification of drill vessel structure, and potentially require the rig owner to recertify the vessel.

Even though the technical limitations provided above would likely prove replacement of the existing two emergency air compressor engines is technically infeasible, Statoil has included conservative costeffectiveness calculations assuming that Tier 4 engines (meeting most stringent future emission

standard) are available. A similar sized Tier 4 engine w ould be limited to NOx emissions of 4.7 g/kW

- hr (40 CFR 1039.101, Table 1 (19 ≤ kW < 56)).

Conservatively assuming a new 50/68 hp engine would cost $1,000 and no other costs would apply to the engine replacement, the cost effectiveness of the engine rep lacement is over $88,000 per ton of

NOx removed. Based on the very conservative cost effectiveness calculation, replacement of the emergency air compressor engines with future Tier 4 engines would not be cost effective. The cost
effectiveness calculation s for the ACOMP replacement are attached.



### Updated PSD Significance Analysis

Based on welding, painting, and dust collector (Transocean rig only) emissions, ENVIRON has updated the PSD Significance Analysis summary for particulate matter and VOC emission s from the two operating scenarios (Maersk Developer and Transocean Discoverer Americas). Table 3 presents the update PSD Significance Analysis for PM, PM10, PM2.5 and VOC. The updated emission calculations for both drilling scenarios do not change the p ollutants currently subject to PSD review. Both scenarios are still subject to PSD for only NOx emissions.

Table 3. Updated PSD Significance Analysis

Pollutant Maersk

Developer

Scenario a (tpy) Transocean

Discoverer

Americas

Scenario b
(tpy) PSD

Significant
Threshold (tpy) Subject to

PSD
Review?

PM 10.6 10.2 25 No

PM10 9.8 9.4 15 No

PM2.5 9.5 9.2 10 No

VOC 27.6 24.8 40 No

Notes:

a

– Maersk Developer scenario PTE were updated to include welding and painting emissions.
b

– Transocean Discoverer Americas scenario PTE were updated to include welding, painting, and dust collector emissions.



### Air Quality Impact Analysis The inclusion of maintenance activities (welding and painting) and cement handling (Transocean only) result in slight increases on short

- term and annual particulate matter and VOC emissions from the two drilling vessel scenarios. As presented in Table 3 of this email, the updated operating scenario emission s still show that only NOx triggers PSD review, and PM2.5 PSD review is also triggered due to NOx

emissions. The addition of welding, painting, and cement handling does not increase NOx emissions, so no changes to previous modeling completed for Class I o r Class II NO2 concentrations or Class I nitrogen deposition are required.

The slight increase in primary PM2.5 emissions would have an insignificant impact on the conclusions drawn from previous CALPUFF modeling. Tables 6.3.1

- 1 and 6.4.11

- 1 of the Janua ry 28, 2013 revised airquality impact analysis show that CALPUFF

- predicted Class I and Class II PM2.5 concentrations are well

below relevant modeling criteria (Class I and Class II Significant Impact Levels). Previous visibility modeling results show the change to visibility in Breton Wilderness is dominated by nitrates formed from NOx emissions from the two drilling vessel scenarios and direct PM2.5 emissions play a much
smaller role in CALPUFF

- predicted visibility impacts. Based on these reasons ENVIRO N believes no additional modeling is required for the small increase in potential PM2.5 emissions as it would have an insignificant impact to the Class I and Class II PM2.5 modeling concentrations and to the visibility impact analysis already provided to E PA.

Additionally, please note that we have prepared responses to Stan Krivo’s email questions related to the Statoil air quality analysis and we will copy you on those responses.

Please do not hesitate to contact us with any additional questions or if you would like to discuss anything about Statoil’s permit application.

Thanks
Michael



### Michael Carbon | Principal

ENVIRON | www.environcorp.com 8235 YMCA Plaza Drive | Suite 300 | Baton Rouge, LA 70810 T: 225.408.2691| M: 225.907.3822 | mcarbon@environcorp.com



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