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 the reported costs for the vendors. 

Most of the O&M cost data were for very similarly sized FGR systems. The systems were generally 

bigger than the units we were evaluating. It is likely 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 calculations 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 provided

Year 1 gas recovery credit 3,698,000 $ Year 1 gas recovery cre

d $ 11,300,000

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 Description

Value

TCI_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%
Envirocomb

Operating Cost comparison Payback analysisSize: 1000 to 1600 m3/hr

848 to 1356 1000 scfd FGR recovered 6000 1000 scfd

Annual Cost

$ to 136,410 119,980 $ Operating Cost 977,899 $ 

Installed Cost 7,425,000 $ 

$ 7,900,038 6,083,625 $ 19,140,991 $ 

$ 156,504 135,315 $ 350,000 $ 

$ 472,506 378,660 $ Annaul Op Cost 1,115,640 $