July 20 , 2012

The Honorable Lisa P. Jackson, Administrator U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460 Re: Request for Administrative Reconsideration of EPA’s Final Rule “Air Quality Designatio ns for the 2008 Ozone National Ambient Air Quality Standards” Dear Administrator Jackson: The Gas Processors Associat io n (“GPA”) and the Texas Pipeline Associat io n ( “TPA”) hereby request th at the U.S. Environmental Protectio n Ag ency (“ EPA” or “Agency”) reconsider certain aspects of the recent ly

- signed final rule ent itled “Air Qualit y D esignat io ns fo r the 2008 Ozone National Ambient Air Qualit y Standards, ” published at 77 Fed. Reg. 30,088 (May 21, 2012) (“Ozone Designat io ns Rule”). Pursuant to section 30 7(d)(7)(B) of the Clean Air Act (“CAA”), 42 U.S. C. § 7607(d)(7)(B), where it is impract icable to raise an object io n during the period of public co mment or if the grounds for such an object io n arise after the public co mment period (but within the time speci fied for judicial review), and if such object io ns are of central relevance to the outcome of the rule, EPA is authorized to reconsider a rule. While the Ozone Designat io ns Rule was not issued pursuant to § 307(d), r econsideration nevertheless is appropriate here

. GPA is a non

- profi

t trade organizat io n made up of approximately 120 corporate members, all of who m are engaged in the processing of natural gas into merchantable pipeline gas, or in the manufacture, transportation, or further processing of liqui d products fro m natural gas. GPA’s membership accounts for approximately 92 percent of all natural gas liquids produced by the midstream energy sector in the United States. GPA members also produce, gather, transmit, and market natural gas and natural ga s liquids, and include a number of Canadian and internat io nal co mpanies that produce natural gas liquids on a global scale. TPA is an organization consist ing of over 40 members who gather, process, treat, and transport natural gas and hazardous liquids materi als through intrastate pipelines in Texas. One or more TPA and GPA members current ly o wn or operate, or in the future will construct or operate, stationary sources located in Wise Count y of Texas, an area adversely affected by EPA’s Ozone Designat io n s Rule.The Honorable Lisa P. Jackson, Administrator

July 20, 2012 Page 2 We believe that EPA erred by including Wise Count y in t he Dallas

- Fort Worth (“DFW”) oz one nonattainment area. GPA, TPA, and other commenters on EPA’s proposed Ozone Designat io ns Rule 1 provided the Agency wit h informat io n demonstrating that Wise Count y should have been designated attainment/unclassifiable, but EPA misinterpreted or failed to consider that information fully, as reflected in the final rule. 2 In addit io n, EPA asserted new reasons in the final rule for including Wise County that we a nd other commenters did not have a chance to consider during the public co mment period. As detailed below, EPA should address five particular issues in a reconsideration proceeding: (1) EPA should consider more fully emissions trends and inventories. Th ere is good reason to believe that the indicators that EPA used as a proxy for emissio ns trends do not provide an accurate picture of where actual emissio ns in Wise County are going in th e coming years. A mo re thorough analysis would reveal that Wise Coun ty does not need to be included in the DFW nonattainment area in order to ensure timely attainment in the area. For example, EPA looked to populat io n t rends and traffic trends (in particular, assessment of VMT, vehicle miles traveled) to assess the potent ia l impact of non

- point source emissio ns on nonattainment in the DFW area. For Wise County, these data showed that the 2010 populat io n was about 60,000, represent ing about a 20% increase over the prior ten years; populat io n densit y w as about 60 people per square mile, and VMT was about 969 millio n miles in 2008, a 16% increase over the prior 6

- year period. See DFW TSD at 10 and 12. EPA cited th ese statist ics as part of its conclusio n t hat Wise County should be included in the DFW nonattainment area. Id

. at 23. Yet, these data and data trends are not shown to be correlated to actual , poten tial increases in, ozone precursor emissions . For example, emissio ns fro m mo tor vehicles and other mo bile sources are predicted to decrease significantly over the coming years due to the onset of mo re stringent emissions controls and the turnover of the exist ing vehicle fleet. Therefore, a

1 An opportunit y fo r public co mment on EPA’s responses to state and tribal 2008 ozone designation reco mmendat io ns was provided at 76 Fed. Reg. 78872 (Dec. 20, 2011).

2 See Comments of the Texas Commissio n on Environmental Qualit y, EPA Docket ID No. EPA

- HQ

- OAR

- 2008

- 0476

- 0296 (Jan. 11, 2012); Comments of the Gas Processors Associ at io n, EPA Docket ID No. EPA

- HQ

- OAR

- 2008

- 0476

- 0429 (Feb. 2, 2012) (hereinafter “GPA Co mments”); Co mments of the Texas Pipeline Associat io n, EPA Docket ID No. EPA

HQ

- OAR

- 2008

- 0476

- 0403 (Feb. 2, 2012) (hereinafter “TPA Co mments”); Co mments of Targa Resources Corp., Docket ID No. EPA

- HQ

- OAR

- 2008

- 0476

- 0484 (Feb. 3, 2012) (hereinafter “Targa Comments”); Letter fro m R ick Perry, Governor of Texas, to Dr. Al Armendariz, EPA Region 6 Re gional Ad ministrator, and attached Texas Co mmissio n on Environmental Qualit y Analysis, EPA

- HQ

- OAR

- 2008

- 0476

- 0509 ( Feb

. 29, 2012 )

. These comments are hereby incorporated by ref

erence.The Honorable Lisa P. Jackson, Administrator

July 20, 2012 Page 3

mo dest increase in population or VMT does not necessarily indicate a cor responding trend in emissio ns. EPA makes clear in its Resp onse to C omments (“RTC”) document that i t c onsidered whether areas are “current ly co nt ribut ing” to nonattainment and that the Agency did not “assess or predict future source emissio ns.” See RTC at 58. Thi s is puzzling because, as explained above, EPA cle arly considered emissio ns trends in explaining its final decisio ns in the Technical Support Document (“ TSD ”) . EPA also clearly stated that “growth rates and patterns” should expressly be considered in determining the extent of nonattainment areas. Meyers Memo at At tachment 2. We believe that a fuller assessment of relevant trends would show that ozone precursor emissio ns in Wise Count y are no minal in the first instance, do not generally impact the rest of th e DFW area, and should not be expected to grow sig nificant ly o ver time. These issues and inconsistencies can and should be developed more fully on reconsiderat io n. Moreover, the National Emissions Inventory (“ NEI ”) inventory figures for VOC emissio ns in Wise Count y are artificially inflated because they result fro m t he Texas Commissio n on Environmental Qualit y’s (“TCEQ”) use of a 33.3 lb/bbl emissio n factor applied to condensate production. That emissio n factor is demonstrably erroneous and far too conservative. The 33.3 lb/bbl emissio n factor was d erived fro m a study prepared by URS Corporation for the Houston Advance Research Center (“HARC”). This study, which looked at flash emission fro m co ndensate in storage tank s at wellhead and gathering sites, concluded that a 33.3 lb/bbl emissio ns factor wa s appropriate. But the study’s conclusio n in t his regard was based on fault y data and its applicat io n has, unfortunately, led to an unrealist ically high VOC emissions inventory from the oil and gas sector. Responding to widespread crit icism o f t he 33.3 lb/bbl emissio n fa ctor , TCEQ recently contracted with E astern Research Group (“E RG ”) to conduct a study on condensate storage tank emissio ns. The purpose of th e study is to develop updated county

- and region

- specific emissio n factors for estimat ing condensate storage tank emissio ns fo r each of the regions in Texas. These would replace the overly conservative est imates present ly u sed in TCEQ’s statewide inventory, which are based on the flawed 33.3 lb/bbl factor. ERG will analyze addit io nal information that has become available since the HARC report was issued, such as the Barnett Shale P hase II Speci al Inventory data. ERG is expected to complete its work by August 31, 2012. The fact that TCEQ i s now embarking on a path to correct these emissio ns factors, which will result in more realist ic VOC emissio ns data, presents yet another issue for EPA to explore on reconsiderat io n. (2 ) EPA should provide more explanation of the reasons for including Wise County in the DFW nonattainment area. In most respects, Wi se County is indist inguishable fro m Hood County, which EPA ul timately excluded from the nonattainment area. For example, the populat io n, populat io n densit y, and populat io n growth rates for both counties are co mparable. Emissio ns inventories fo r NOx and V OC fro m t he two counties are comparable. Traffic data fro m t he two counties are com parable. And, HYSPLIT and source apportionment modeling show comparable results. Yet,The Honorable Lisa P. Jackson, Administrator

July 20, 2012 Page 4
th e outcome was different for these two similarly situated counties. EPA was correc t to designate Hood County as attainment/unclassifiable. Because Wise and Hood counties are similarly si

tuated, the rationale for excluding Hood County should also apply to Wise County. More generally, TPA provided detailed examples in its comments of inconsistency between EPA regions and within Regio n 6 it self as to how particular types of data were used in EPA’s designat io n decisio ns. See, e.g. , TPA Comments at 8

- 10, 15, and 17

- 20. Notwithstanding th ese detailed examples of inconsistency, EPA responds to these co mments by wrongly stating th at the “co mmenter fails to point to any specific concerns to support its claim.” See RTC at 59. EPA’s only other response is that, “We disagree wit h t he commenter that our designation criteria have been inconsisten

tly applied and that our decisio ns are arbitrary and capricious.” Id . These statements plainly are not responsive to the comments. In short, the TSD fails to provide discernable decisio n mak ing criteria and corresponding facts to justify the differing r esul ts for Hood and Wise Counties. Moreover, the RTC fails to provide any real response to comments detailing other inconsistencies in EPA’s designation decisio ns. EPA should grant reconsiderat io n to provide further explanation and opportunit y fo r public co mment on these crit ic al points. (3 ) EPA should develop a more robust assessment of the potential impact of emissions in Wise County on ozone levels in other parts of the DFW area. The HYSPLIT modeling EPA presented in the Ozone Designat io ns Rule prov ides only a qualitat ive indication o f t he potential downwind impacts of emissio ns fro m Wise Count y because HYSPLIT does not account for atmospheric chemistry or other confounding factors ( e.g. , emissio ns fro m upwind o f Wise County that simply pass through th e country ). EPA appears to agree, observing in the RTC that “HYSPLIT wind trajectory or other modeling

- based tools are excellent tools for determining the frequencies for which areas potentially contribute to high oz one levels.” RTC at 59 (emphasis add ed), see also id. at 60 (emphasis added) (“By applying HYSPLIT to show the tracks that air parcels traveled to monitors during exceedances of the standard, HYSPLIT does give a reliable indicat io n of th e areas that could be co nt ributing to an exceedance.”). On the other hand, even though EPA admits that HYSPLIT modeling gives only an indicat io n of a possible contribution to downwind nonattainment , 3 EPA nonetheless clearly relies on the HYSPLIT modeling as one of the primary factors

– if no t th e primary fact or

– in deciding

3 At best, HYSPLIT can provide only an indicat io n of a possible contribut io n, as EPA has acknowledged in the past: “While trajectory analysis can be helpful it has significant limit ations as it does not take into consideration at mo spheric chemical processes, the inject io n of emissio ns, or the deposit io n of material alo ng the trajectory path.” Technical Support for St at e and Tribal Air Qualit y Designat io ns and Classificat io ns, April 2004, Chapter 3, at 3

- 202 ( http://www.epa.gov/ozonedesignations/1997standards/tech.ht m ).The Honorable Lisa P. Jackson, Administrator

July 20, 2012 Page 5 to include Wise County in the DFW nonattainment area. See, e.g., DFW TSD at 23 (“Examinat io n of back trajectories indicates that at times emissio ns from Wise Count y co nt ribute to observed vio lat io ns in the area....”). EPA should grant reco nsiderat io n to resolve these inconsistencies and provide greater clarit y as to how HYSPLIT is applied and what weight HYSPLIT results are given in making the Wise Count y designat io n decisio n. ( 4 ) EPA should have provided notice and an opportunity for public comment on its source apportionment modeling. EPA did not present any source apportionment modeling in it s proposed designat io n decisio n , yet relied on such modeling in making the final designation decisio n fo r Wise Count y. The use of such modeling ha d been suggested by TCEQ in its co mments on the proposed designations. But, EPA considered TCEQ’s modeling to be inadequate and, therefore, “reanalyzed the data” and applied a 1% factor in assessing whether emissio ns on any given day might contribute to downwind nonattainment. See DFW TSD at 15

- 20. In making its final designation decisio n, EPA concluded that, “ Source apportionment modeling for a portion of an oz one season indicates that emissio ns fro m Wise County can contribute to observed vio lat io ns in th e DFW nonattainment area.” Id. at 23. In short, source apportionment modeling was a significant factor i

n EPA’s final decisio n, but such modeling was unavailable during the comment period and therefore GPA and TPA had no notice that EPA would use such mo deling and no opportuni

ty to provide co mments to the Agency on the use of such modeling. In addi tion, EPA failed to provide any explanat io n as to why use of the 1% factor was justified. Reconsiderat io n would provide an opportunit y fo r GPA, TPA, and oth er stakeholders to better understand these issues and provide meaningful comments to EPA. ( 5 ) EPA should take extra steps to ensure that this decision was made in a transparent, objective, and unbiased way. Commenters including GPA and TPA demo nstrated t hat the approach taken by Regio n 6 in it s analysis of Wise County was fundamentally different fro m, and far more exact ing than, the approach emplo yed by other regional o ffices. Indeed, when Regio n 6’s analysis o f Wise Count y was compared to other Regions’ review o f ma ny similarly situated counties in other states and other EPA Regions

– which were not designated nonattainment

– one could have been left with th e impressio n t hat Region 6 for some reason was determined fro m t he beginning to add Wise County to th e DFW nonattainment area, regardless of the facts. What GPA and TPA did not know when they made those comments was that then

Region 6 Administrator Armendariz had appeared to admit in public statements that he harbored bias against the oil and gas in dustry . Thi s public statement is consistent with an article written by Dr. Armendariz before joining EPA th at inaccurately characterized emissio ns fro m o il and gas production in the Barnett Shale area, including Wise Count y. 4 Dr. Armendariz’s public
4 See Al Ar mendariz, Em issions from Natural Gas Production in the Barnett Shale Area and Opportunities for Cost

-Effective Improvements 3

- 4 (Jan. 26, 2009).