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/R Incorporated Providing Environmental Technical Support Since 1989

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MEMORANDUM 

TO: Bruce Moore, EPA/OAQPS/SPPD/CCG

FROM: Bradley Nelson, EC/R, Inc.

DATE: December 30, 2011

SUBJECT: Summary of the December 14, 2011, Meeting with the American Petroleum 

Institute (API) and the U.S. Environmental Protection Agency to Discuss the 

Proposed Oil & Gas NSPS/NESHAP

I. INTRODUCTION

The American Petroleum Institute (API) requested this meeting with EPA to discuss questions 

on the proposed Oil and Gas NSPS (40 CFR Part 60, subparts KKK, LLL, and OOOO) and 

NESHAP (40 CFR Part 63, subparts HH and HHH). This meeting summary will be available in 

the docket for this rulemaking (Docket ID No. EPA-HQ-OAR-2010-0505). The proposed rule 

for the oil and natural gas sector was published in the Federal Register on August 23, 2011 (76

FR 52738). 

II. ATTENDEES

The following is a list of participants in the meeting.

U.S. Environmental Protection Agency

David Cozzie

Greg Nizich

Alex Macpherson

API and Member Organizations

Matt Todd, API

John Wagner, API

Grover Campbell, Chesapeake Energy

Marish Singh, Occidental Oil & Gas

Christopher Colmen, Hess Corporation

Darren Smith, Devon Energy

Joe Leonard, Devon Energy

Clint Gill, Conoco Phillips

David Simpson, Mule Shoe Engineering
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Roger Zygment, Shell

Jenny Yang, Marathon

Reid Smith, BP

Tom Monahan, XOM

Dana Wood, BP

Rob Ferry, TGB

Clay Freeberg, Chevron

Jeff Adams, BP

EC/R Incorporated

David Hendricks

Bradley Nelson 

III. SUMMARY OF DISCUSSION

David Cozzie opened the meeting by stating that the comment period for the proposed rules had 

ended and EPA could answer clarifying questions from the group, but could not provide any 

responses to comments on the proposed rules. EPA received approximately 150,000 comments, 

however only about 150 of the comments that were received were considered to be substantive. 

He also stated that the draft final rule would be sent to the Office of Management and Budget 

(OMB) in mid-February for a 30-day review and the final rule is scheduled to be promulgated on 

April 3, 2012. 

API asked EPA if they had reviewed the comments and had any questions. EPA responded that 

they have reviewed some of the comments and did not have any questions at this time. Mr. 

Cozzie also noted that questions regarding the NSPS should be directed to Bruce Moore and 

questions regarding the NESHAP should be directed to Greg Nizich.

API started the meeting by stating that their main comment was the breadth of the applicability 

of the proposed rules, most notably the requirements that include control technologies. The 

group believes that they will be unable to comply with the rule because of the unavailability of 

control equipment for well completions and storage vessels. EPA asked if any manufacturers of 

control equipment commented on the proposed rules. The API group responded that there was 

not enough time during the comment period to contact vendors regarding the availability of 

control equipment. One member noted that they had experienced issues with obtaining control 

equipment in WY.

API thanked EPA for the comment extension on the proposed rules. API stated that the general 

structure of their comments includes an executive summary that summarizes the main issues and 

includes sections on the general issues on each part of the proposed rules. The sections also 

include suggestions on revised text, which is also compiled in the appendix. If EPA has any 

questions or needs any additional information regarding a comment they should contact Matt 

Todd at API.
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The first topic of discussion was the definitions used in the proposed rule. API believes that the

definitions do not describe what is actually done in the field and may cause problems later with 

regulatory personnel. API included some revised definitions in their comments and asked EPA 

not to include applicability requirements in the definition. 

The next topic focused on the comments on the economic analysis. API noted that the economic 

analysis was done using model plants which do not represent the oil and gas industry because of 

the variability between the different facilities. For an example the VOC content varies greatly 

between the type and source of the natural gas. They noted that 18% VOC by weight was used 

in the economic analysis, however many natural gas streams are below that VOC content. API 

also noted that the cost of compliance to the proposed rules was not included in the economic 

analysis. These exclusions include the cost of piping, the cost of monitoring equipment, and 

long-term compliance costs.

API asked if there were plans to request for an extension of the final rule promulgation. EPA 

responded that there were no discussions regarding a rule extension. API believes that a 1-year 

extension is needed to make the necessary revisions to the final rule. They stated that there are 

dramatic impacts and complications for small businesses that were not addressed in the proposed 

rule. EPA asked if any small businesses commented on the proposed rules. API responded that 

some trade associations that represent small businesses commented on the proposed rules. API 

noted that many small businesses do not have the time or knowledge to know what is going on 

with the proposed rules and rely on outside contractors for environmental compliance. API 

stated that nearly 60% of oil and gas production is small business operated.

The next topic of discussion was the average VOC content used by EPA in the emission 

reduction calculations. API stated that many gas streams have little or no VOC content and 

noted that reduced emission completions (REC) for gas streams with less than 12% were not cost 

effective. API suggested that a 10% VOC threshold be used for applicability throughout the 

NSPS. API also stated that this VOC content issue is relevant to the NESHAP and believes that 

the 10% VOC applicability should also be used. EPA asked if a VOC threshold could be 

determined for each basin. API responded that the VOC content varies broadly in each basin and 

that the VOC content can also change an average of 7% over time as the well is depleted.

API remarked that the types of affected facilities are different than what has traditionally been 

regulated in previous versions of the NSPS. As an example, a pneumatic controller is a small 

component of a larger system. API stated that there are approximately 100,000 pneumatic 

controllers in the field and believes they are a small source of emissions. In addition, API 

believes that the definition for pneumatic controllers is confusing. API believes that if the 

definitions are clear and concise, then the regulations will be easier to follow. Other sources that 

are being proposed to be regulated are well completions. API stated that well completions are 

part of the well construction and believe that this operation is similar to boiler commissioning. 

API also believes that the General Provisions should not apply to wells in remote areas. 

The term best system of emission reduction (BSER) used in the proposed NSPS was the next 

topic of discussion. API noted that this is a departure from the term best demonstrated 

technology (BDT) that has been used in previous EPA regulations and asked if the precedents for 
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BDT are applicable to BSER. EPA stated that the terms are comparable and is simply a 

reflection of the actual language in the Clean Air Act (CAA). API stated that phased in 

compliance would be needed to obtain the control equipment to meet the requirements. They 

believe the phased in approach used in subpart JJJJ is a reasonable approach to meeting the 

NSPS requirements. API proposed a 2-year phase-in approach so that industry can determine 

what applies to a given well. This approach would also ease the burden on the availability of 

control equipment supplies. As proposed, the oil and gas industry does not believe it can get the 

wells into compliance because of control equipment availability.

Well completions were the next topic of discussion. API believes that EPA should not specify 

the type of equipment to be used for well completions in the proposed NSPS. They believe that 

options should be included such as, “reverse circulation” completion for low pressure wells. 

They also noted that the proposed rule would not allow any well completions for late life coal 

bed methane wells. They stated that the Colorado rule has a pressure threshold, but would rather 

have a requirement for a management plan. They noted that a management plan could be 

allowed under CAA 111(h), and asked EPA to look at subpart Ja for an example of the 

requirement. They also pointed out there are many issues with accessing a collection line 

including: third party owner, low pressure, unsalable gas, and the availability of a collection line. 

API would like the option of combusting the gas for sources that do not have access to a 

collection line. They also noted that under the proposed rule “appraisal wells” would not be 

allowed under the rule. 

API stated that availability of equipment was an issue in the proposed rule. They believe there is 

a shortage of equipment and skilled staff to do reduced emission completions (REC). They 

believe it will take at least 2 years to train the staff or contractors, and roughly 7 years to 

manufacture enough equipment to do RECs. Therefore in their comments, API proposed a 2-

year well completion extension to develop equipment and train personnel. They asked if the 2-

year extension would be possible in the final rule. EPA responded that they would need to have 

discussions with the Office of General Counsel (OGC) about this change.

Timing of requirements was the next issue that was discussed. API noted that the rule would 

require recordkeeping from wells completed after August 23, 2011. They also noted that the rule 

is not limited to onshore sources and the costs for complying with the requirements for offshore 

sources was not included in the Technical Support Document (TSD). EPA stated that the 

proposed rule was meant to be limited to onshore sources. API stated that they believe the 

recompletions should not be considered a modification because there is no emissions change and 

believes that EPA should reference 63.14 for the definition of modification. They also noted that 

the proposed rule would require 4-5 notifications for each well completion, which they feel is 

excessive. They propose submitting a monthly report of the well completion activities. They 

also requested that EPA provide clearer definitions in the final rule. They also requested that 

EPA remove the requirement for determining the distance to the nearest gathering line.

API believes the 10% estimate that EPA used for recompletions is incorrect in the proposed rule

and believes it is closer to 1-2%. They noted that the Regulatory Impacts Analysis (RIA) states 

that fracking is a new method for natural gas extraction and they stated that nearly 95% of wells 

are now fracked. They stated that that categorizing of conventional and unconventional wells is 
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not relative to the proposed rules and is not an industry concept. The group also noted that in the 

RIA, it was assumed emissions captured through RECs would otherwise be vented to the 

atmosphere. They stated that the value of the gas/liquids is high enough that it is advantageous 

to capture these gas/liquids.

The next issue was the availability of equipment and personnel to do RECs. They noted that the 

70% of wells doing RECs listed in the RIA is not for all wells and only represents about only 

40% of production. They stated that many of the smaller companies are not doing RECs because 

of lower quality wells. They estimated the REC equipment to be approximately $1.3 million and 

take roughly 56 weeks to be delivered.

Glycol dehydrators were the next topic that was discussed. API believes that EPA did not need 

to redo the floor for these units, and EPA should have not removed the 1 TPY limit. They noted 

that the CAA only requires EPA to review new technology and not re-do the floor. They also 

noted that changing out technology to meet the new limit would increase the costs higher than 

EPA estimated in the proposed rule. They suggested using a work practice option for small 

dehydrators. API also stated that the equation used will require controls regardless of emissions. 

EPA noted that they planned to look at the emission limit using an upper predictive limit (UPL) 

to address the issue of variability. 

Storage tanks were the next topic that was discussed in the meeting. API stated that EPA needed 

to clarify the applicability requirements in the final rule. They believe these requirements should 

be in the applicability section of the rule and not in the definition portion. They also believe that 

the rule should limit the requirements to the oil and natural gas sector. They noted that the oil 

and natural gas production sector has been historically understood as being distinct from the 

transportation sector, but Subpart OOOO has failed to delineate the sector to which the storage 

vessel provisions apply. They also noted that EPA has proposed removing the distinction of 

“prior to custody transfer” from NESHAP HH, thereby unnecessarily obscuring the boundaries 

that had been previously established. API also stated that there should be a bright line between 

what is defined as a temporary storage tanks and what is a permanent storage tank and suggested 

180 days could be used. 

API also requested that the cutoff in OOOO should be 12 TPY using the EPA guidance for cost 

instead of the 6 TPY in the proposed rule. They also stated that the method of specifying 

threshold should be based on estimated emissions using EMP Tanks or other software that EPA 

believes would be appropriate. They noted that measuring throughput is difficult and over time 

as the production decreases; the flow rate will eventually decrease where it is no longer cost 

effective to control. They stated that Wyoming has a provision that requires no controls when 

the emissions drop below 8 TPY. Other thresholds could be based on vapor pressure or capacity. 

They also stated that the NSPS Kb threshold could be used for the proposed rule with a 

requirement to control if emissions are greater than 12 TPY. They also asked that EPA exclude 

mobile tanks, such as railcars. EPA noted that the Kb requirements would not work with the 

final rule because some mobile tanks would be exempt even though they are permanently located 

at the well site. API suggested that the rule require 30 days to evaluate production to determine 

if the storage tank is required to implement controls.
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Another issue with storage tanks is the proposed recordkeeping and reporting requirements. API 

stated that the proposed rule has over 50 recordkeeping requirements for tanks vented to a 

control device. They noted that many of these tanks are located at unmanned sites and it would 

burdensome to generate and maintain these items. They suggested that EPA require semiannual 

reports for exceedances only. They also stated the rule requires that the pilot flame always be 

present and does not include any options for electric ignition. They also suggested that EPA use 

vapor pressure thresholds and allow the use of floating roof tanks as in other rules.

Another topic that was discussed was pneumatic controllers. API believes that the definitions 

need to be improved and change the affected facility of a single controller to a process unit. This 

was done in the subpart YYY rule, where multiple components were grouped into a single 

process unit. They also have reconstruction issues for pneumatic controllers if parts are replaced. 

API stated that intermittent cannot be controlled as described in the preamble and the 6 scfh 

threshold is not realistic and is based old data from Natural Gas STAR. They also asked EPA to 

include a provision that allows facilities using instrument air to document the facility rather than 

each individual controller. They asked EPA to allow the use of continuous bleed controllers for 

180 days if switching to instrument air. They also asked EPA to clarify whether an actual 

guarantee of emissions is required for controllers. They stated that they would prefer a design 

requirement.

Equipment leaks were the next topic of discussion. API believes that the emission reductions 

that EPA determined for connectors is too high and therefore the cost effectiveness should be 

higher. They estimated the cost effectiveness to be $7,800 per ton of VOC using EPA costs and 

API emission reductions and $8,400 per ton of VOC using API costs and emission reductions. 

Based on these results, they do not believe that connector monitoring is cost effective. API also 

stated that a leak definition of 500 ppm is not cost effective for valves. They stated that the 

emissions reductions are based on uncontrolled emissions rather than subpart KKK emissions. 

API believes that the 10,000 ppm should be used in the final rule with quarterly monitoring. The 

industry stated they would agree to a high leaker program that identifies leaking components 

above 10,000 ppm that have been found leaking for 3 straight quarters. These high leaker 

components would then either be replaced or refurbished. If EPA intends to keep the 500 ppm 

leak definition, API requests that EPA allow facilities 1 year to implement the LDAR program. 

EPA asked why additional time would be needed to implement an LDAR program. API 

responded that modifications or replacement of equipment that were not intended to meet a 500 

ppm leak definition would be needed to meet the requirements.

Compressors were the next topic of discussion. API is concerned that the relocation of 

compressor equipment would trigger NSPS requirements. They request exclusions for 

reciprocating compressors at storage and transmission stations and centrifugal compressors at 

gathering and boosting stations. API also believes that rod packing should be replaced on 

reciprocating compressors every 5 years to coincide with major engine overhaul. They also 

requested the inclusion of a preventive maintenance program to determine when packing is 

failing. They also request the ability to use wet seals for centrifugal compressors.
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A separate meeting took place at EPA to discuss the testing requirements in the proposed NSPS 

and NESHAPs. The EPA personnel that attended this meeting include: Rachel Agnew, Gerri 

Garwood, Stef Johnson, and Jason DeWees.

API stated that the requirements for testing are confusing and have many contradictions. They 

stated that many of these facilities are small sources in remote areas and it is not technically 

feasible to perform some of the testing requirements. API suggests using a carbon balance or 

mass balance to show compliance with the requirements. They noted that it was difficult to 

measure flow rate and are detailed in their comments in Attachment H. They also noted that 

many of these issues are the same for the compliance testing of glycol dehydrators. API 

recommends that EPA specify the use of E&P TANK or a process simulation model such as 

ProSim or HySys to determine the inlet flow and composition of a waste gas stream routed to an 

enclosed combustion device from a storage tank and GlyCalc 3.0 or higher dehydrator model or 

a process simulation model such as ProSim or HySys to determine the inlet flow and 

composition of a waste gas stream routed to an enclosed combustion device from either a small 

or large dehydrator. They also noted that the manufacturers certification testing must show 

approximately 99.97% destruction which is unreasonable and certainly not supportable from the 

standpoint of rule cost effectiveness. API asked why propene was used for certification of the 

combustors. EPA responded that propene is similar to BTEX (benzene, toluene, ethyl benzene, 

xylenes) and is difficult to combust. API noted that propene is difficult to obtain in some places, 

notably Wyoming. 

API stated that storage tank temperature monitoring is different from the temperature monitoring 

requirements in subpart ZZZZ and JJJJ. They believe that EPA should eliminate the proposed 

rule revisions that change the temperature monitoring device accuracy requirements from +/- 2 to 

+/- 1 percent of the temperature being monitored expressed in degrees C.

API asked why an initial performance test that demonstrates that the combustion zone profile has 

a minimum temperature of 760°C was included in the final rule. EPA responded that this 

requirement was included for compliance assurance with the standards. API believes that the 

requirements need to be rewritten and offered to assist EPA in the revision of the testing 

requirements.

API believes that the monthly Method 22 testing for glycol dehydrators is excessively 

burdensome and not needed to assure combustor compliance because continuous monitoring of 

combustion control ignition is already required and the materials being combusted are inherently 

combustible. API noted that states require visual inspection only in the cases where visible 

emissions are present. They believe that final rule should tell the operators what to do, not how 

to do it.

API believes the final rule should be simple and easy to understand. They noted that many 

operators are small businesses and they don’t have the resources to try and understand a complex 

rule. API stated that the compliance assurance requirements need to be measures that are already 

conducted by the industry. 
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API will provide test reports to EPA that outlines some of the methods and data from facilities 

that are complying with state rules.