# ORMAT°111

June 13, 2014
Submitted To: Steve Page, Director Office of Air Quality Planning and Standards Office of Air and Radiation U.S. Environmental Protection Agency Oilandgas.whitepapers@epa.gov
Re: Comments on White Papers on Methane and VOC Emissions in the Oil and Natural Gas Sector: Oil and Natural Gas Sector Compressors Submitted by: Ormat Technologies Inc. 6225 Neil Road Reno, NV 89511-1136 Contact: Bob Sullivan. bsullivan@ormat.com / (775) 356-9029 Ext. 32240 Dear Director Page and staff, Ormat Technologies Inc. appreciates the opportunity to submit comments on the EPA technical white papers on VOC and Methane leak sources, released April 15, 2014. In particular our comments pertain to the white paper on Oil and Natural Gas Sector Compressors. About Ormat Ormat Technologies Inc. is headquartered in Reno, Nevada and has over four decades of experience in the development of state-of-the-art, environmentally sound alternative energy power plants. Ormat has pioneered the use of organic fluids as the power system's motive fluid, generally refened to as Organic Rankine Cycle (ORC) systems. These ORC systems can be used to convert low to moderate temperature heat sources to fuel and emission-free electricity. Ormat's ORC application for Waste Heat Recovery, which we call Recovered Energy Generation (REG) units, has been applied successfully on 19 natural gas pipeline compressor stations in North America alone. We believe that waste heat recovery on natural gas transmission pipelines is an important mechanism for reducing the Wm/de climate impact of the natural gas supply chain. We commend EPA and the Administration for recognizing the climate impacts of an inefficient natural gas delivery system and for beginning to scope out methods for improvement. Should EPA prepare a rulemaking on methane leaks and flaring, we also recommend that technology solutions like Ormat's REG units should be eligible as one compliance pathway.Ormat comments on Methane White Papers

Description of Pipeline Compressor Control Technology Ormat's REG units use a power-generation technology based on the classic Rankine Power Cycle.' First, the exhaust heat from an industrial process is recovered using a heat exchanger on the exhaust stack, utilizing a thermal oil to recover the heat. The thermal oil then circulates to another heat exchanger, where heat is transferred to a working fluid (pentane) in a closed-loop vaporizer system. As the working fluid is heated, it vaporizes and expands in volume, which turns a turbine, driving an electric generator to create electricity. The turbines in the REG unit operate at a very high aerodynamic turbine efficiency of 88 to 91 percent. (See Figure on page 3). Ormat has installed the majority of its REG units at natural transmission gas pipelines. On large interstate gas pipelines, compressor stations are installed roughly every 100 miles. These compressors are essentially jet engines that compress and move the pipeline contents. Because this is a high-energy and high-pressure operation, compressors expel heat at about 900° F. Ormat's REG units capture and convert this waste heat into electricity — usually about 5 to 6 megawatts per unit — that can then deliver electricity back to the electric grid of the local operating utility. Ormat has REG solutions in place at 19 gas pipeline compressor stations in North America alone. 2 Together, these stations provide over 100 megawatts of clean generation. The U.S. Energy Information Administration (EIA) notes that in the United States alone, there are over 1,400 compressors on gas-transmission pipelines. 3 Most of these stations would be candidates for waste heat recovery installations. The installation of waste heat recovery on compressor stations creates many economic benefits. For a typical REG installation, the business arrangement includes a waste heat host agreement between the pipeline owner and the REG owner. The compressor station owner would receive a royalty or waste heat host fee for the usage of the heat produced by the compressor station in the REG process. The operations of the pipeline and compressor station on which the REG facility is installed are not impacted by the operation of the REG facility. In some cases, the gas pipeline will retain ownership of the REG unit, thereby retaining ownership of the energy produced and any other attributes associated with the project. The owner of the energy that is generated from the REG facility can sell that back to the local utility. Waste heat capture as a regulatory compliance mechanism Ormat supports inclusion of technology solutions that reduce the lifecycle GHG impact of the natural gas supply chain in any pending rulemaking on methane.

See Figure A
2 See Figure B
3 See Figure C. EIA citation here: http://www.eia.goy/pub/oil gas/natural gas/analysis publications/ngpipeline/index.html.
2Ormat comments on Methane White Papers

In a new proposed regulation on methane leaks, EPA could develop minimum performance standard for pipeline owners/operators that is a function of methane wa§ted versus energy productivity. One potential metric for minimum performance on pipelines could be: 

# I MMBtu of methane leaks / MMBtu of methane delivered I This approach would be similar to the compliance model for EPA's newly proposed New Source Performance Standards (NSPS) for carbon emissions. A single source would be required to limit its overall emissions as a function of energy productivity (i.e. tons of CO2/MWh of power produced). EPA does not prescribe specific control technologies with this NSPS proposal. Instead, individual CO2 sources have pursue a number of pathways to achieve the minimum performance. Taking another page from the NSPS model, these performance standards could be applied across the entire pipeline, allowing leak controls and technology solutions applied at one portion of the pipeline to be averaged in with the rest of the structure, compensating for lesser-performing components along the supply chain. This model is in accordance with EPA's well-established "bubble concept" for NSPS compliance. To fit in with the suggested performance metric above, technology solutions like Ormat's REG unit could be afforded an "MMBtu rnet h ane equivalent" to help pipeline owners/operators achieve minimum compliance for methane leaks. This would be similar to the metrics currently used to compare energy contents of alternative fuels to gasoline, the gallon of gasoline equivalent. Alternatively, there are several well-established protocols for converting all greenhouse gases into CO2 equivalents according to their global warming potential. EPA could use these protocols make an "apples to apples" comparison of avoided CO2 emissions, enabled by REG and other technology solutions, and translate them to some value in avoided methane emissions. An example of a method Ormat suggests for calculating the value of carbon emission offsets created from the operation of REG facilities is shown below. Utilizing the emission comparison values created by the US Energy Information Administration (EIA) or Idaho National Engineering and Environmental Laboratory (INEEL), values for CO2 emissions from coal fossil fuel power generating plants range from 2.08 to 2.18 lbs CO2/kw-hr and energy generated. See http://www.eia.gov/tools/faqs/faq.cfm?id=74&t=11 and http://www.inl.gov/technicalpublications/Documents/33 14491 .pdf Using the lowest of these emission levels for comparison purposes, for each MWh generated from a REG facility will avoid the generation of 2,080 lbs annually. A typical REG facility rate 6MW will avoid the generation of approximately 50,000 tons of CO2 annually. This calculation can be used as a direct conelation between REG output and CO2 off set amounts. Waste heat capture as a pathway to recognition under Natural Gas STAR The Natural Gas STAR Program works to help companies implement cost-effective technologies that reduce methane emissions, but it is up to each partner to determine which technologies and

3Ormat comments on Methane White Papers

practices it will implement. Ormat proposes that as a corollary to our proposal for REG as a compliance pathway, Ormat proposes that technical solutions like REG should be one pathway for natural gas delivery agents to achieve recognition under the Natural Gas STAR program. EPA should offer technical information on waste heat recovery to Natural Gas STAR partner companies as one proven cost-effective methane mitigation technology. EPA should also include waste heat recovery vendor companies, like Ormat, in peer-to-peer networking and technology transfer workshops offered by the Natural Gas STAR program. In May 2014, EPA proposed new protocols for companies to achieve Gas STAR Gold. 4 Ormat proposes that waste heat technologies should be an allowable pathway for a facility to achieve Gold status. Implementation of waste heat recovery could earn gas companies a "bonus" recognition for reducing the lifecycle greenhouse gas impact of the natural gas supply chain. Waste heat recovery could also provide sufficient "credit" for a given gas facility where other types of methane control technologies are comparatively expensive or difficult to delivery. General Cominents By classifying waste heat recovery as a pathway to mitigation of the impacts of methane leaks and flaring, EPA can provide the natural gas supply chain with greater flexibility to achieving measurable improvements. While Ormat has introduced a type of waste heat technology directly applicable to pipelines, there are many other potential applications for waste heat recovery across the gas supply chain, including on gas processing plants, natural gas engines, flare gas and LNG import/export facilities. Ormat looks forward to working with EPA to quantify in greater detail how waste heat technologies can reduce the lifecycle greenhouse gas impact of the natural gas supply chain. We also look forward to working together if EPA does elect to promulgate a rulemaking on methane. Thank you for your consideration and please direct any questions to bsullivan@ormat.com

. Sincer9ly, I Bob Sullivan Vice President of Business Development Ormat Technologies

Attachments

• Figure A: Schematic of an Ormat Recovered Energy Generation (REG) waste heat capture system

• Figure B: Photo of a 22 MW REG Unit on a Compressor Station in North Dakota

4 See here: http://www.epa.gov/gasstar/documents/Gas STAR Gold proposedframework.pdf#page=9.
4Ormat comments on Methane White Papers

• Figure C: Illustration of U.S. Natural Gas Pipeline Compressors, U.S. Energy Information Admithstration, 2008

5Condenser

Heat Transfer Fluid Pump Air-Cooled ORMATo ENERGY CONVERTER (OEC)
Exhaust Stack By Pass Stack
Heat

— Recovery Unit

Hot Gases

Recuperator

1 itot Exhaust Gases Heat Transfer Fluid Motive Fluid (Liquid) Motive Fluid (Vapor) Storage / Expansion Tank Motive Fluid Pump Ormat comments on Methane White Papers

FIGURE A: Schematic of a Recovered Energy Generation (REG) System Recovered Energy Generation (REG) System

FIGURE B: 22 MW REG Unit on a Compressor Station in North Dakota

6Legend = Interstate Pipeline

- = Intrastate Pipeline isi = Compressor Station Ormat comments on Methane White Papers

FIGURE C: Illustration of U.S. Natural Gas Pipeline Compressors, U.S. Energy Information Administration, 2008

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