Bob Lucas/RTP/

USEPA/US

01/27/2009 11:04 AM To: Al_Hendler@URSCorp.com

cc Subject: Fw: Costs of flare gas recovery (FGR) systems

Some notes in response to your e-mail.

Bob Lucas

USEPA/OAQPS Sector Policies and Programs Division

----- Forwarded by Bob Lucas/RTP/ USEPA/US on 01/27/2009 11:01 AM -----

"Coburn, Jeff B." <cob@rti.org>

01/23/2009 03:00 PM To: Bob Lucas/RTP/USEPA/US@EPA cc: Ken Hustvedt/RTP/USEPA/US@EPA, Brenda Shine/RTP/USEPA/US@EPA, "Parrish, Kristin" <kparrish@rti.org> Subject: Costs of flare gas recovery (FGR) systems

Bob –

This is a follow-up to yesterday's e-mail based on your telephone message.

The form of Equations 1 and 2 are common for cost equations. The values used in the equations were developed primarily from data reported in presentations from John Zinc (for 2 case studies) and from Envirocomb, but rounded to nice whole numbers. The attached spreadsheet summarizes the data reported in the presentation.

Capital costs from John Zinc were estimated from the annual gas savings and payback period.

I assumed the "installed" costs covered only the costs paid to the vendor for installation. I assumed the cost to the refinery, which would include planning, vendor selection, and additional site preparation would effectively double the cost actually incurred by the refinery. Consequently, values were selected to yield costs approximately 2 times t he reported costs for the vendors.

Most of the O&M cost data were for very similarl y sized FGR systems. The systems were generally bigger than the units we were evaluating. It is likel y that the intercept value (fixed operating costs) should be lower and the variable cost value should be bigger , but the assumptions used should provide a higher cost estimate for the FGR systems that we were projecting.

Finally, although not included in Equation 2, we also added 4% of the capital costs to the O&M costs for
insurance and taxes. When these costs are included, our projected annual cost for the large Envirocomb FGR is comparable, although we do not know what they included in their operating costs.

Let me know if you have any more questions.

Jeff Coburn

<<FlaerGasRecoveryCosts_JohnZinc.xls>>Al_Hendler@URS Corp.com

01/21/2009 04:25 PM To: Bob Lucas/RTP/USEPA/US@EPA

cc: Subject: Standards of Performance for Petroleum Refineries - Dec 22 Proposed Rule

Mr. Lucas:

I am trying to reproduce the cost effectiveness calcul ations in Tables 6 and 7 of your November 20, 2008 memorandum on revised flare recovery and fuel gas system impacts (EPA- HQ-OAR-2007-0011-0289) but cannot find any explanation of how the key inputs were derived or how they were used in the cost effectiveness calculations. Please explain or direct me to another document that I might have overlooked.

I am also following up on a request from Matt Todd, API, for the data supporting Equations 1 and 2 of the flare recovery cost analysis. Please let me know where I can find that information.

Thank you,

Albert Hendler URS Corporation 512-419-6438 (office) 713-397-7366 (cell) 512-454-8807 (fax)From John Zinc's 'FGR to Reduce Plant Flaring Operations' presentation.Case Study 1 Case Study 2FGR Design 4,900 1000 scfd FGR Design 17,280 1000 scfdFGR Mean Flow 2,400 1000 scfd FGR Mean Flow 14,976 1000 scfdYear 1 O&M costs 182,000$ Year 1 O&M costs -$ Not providedYear 1 gas recovery credit 3,698,000$ Year 1 gas recovery cred11,300,000$Payback 14 months Payback 20 monthsEstimated Capital Cost 4,526,667$ Estimated Capital Cost 18,833,333$Eqn 1 Capital Costs 11,000,000$ 33,875,320$Eqn 2 O&M Costs 200,000$ 724,000$Annaul Op Cost 640,000$ 2,079,013$Parameter DescriptionValueTCI_fixed 1,000,000$TCI_var 10,000,000$AOC_fixed 100,000$AOC_var 100,000$Costed_size 876,000--> 2,400*365 from Case Study 1, mean FGR flowTCI_exp 0.65AOC_exp 1.00Recovery_effic 80%EnvirocombOperating Cost comparison Payback analysisSize: 1000 to 1600 m3/hr848 to 1356 1000 scfd FGR recovered 6000 1000 scfdAnnual Cost119,980$ to 136,410$ Operating Cost 977,899$Installed Cost 7,425,000$6,083,625$ 7,900,038$ 19,140,991$135,315$ 156,504$ 350,000$378,660$ 472,506$ Annaul Op Cost 1,115,640$