Economic Factors Factor and reference

Equipment Life (n), year Maximum Lease Duration [1] 5

Annual Interest Rate (I) Assumed [2] 7%

Consumer Price Index, CPI CPI to convert 2009 USD to 2013 USD [3] 1.09

Total Direct Costs (TDC) Factor and reference Cost

Purchased Equipment Cost

8 New Caterpillar 3512C Engines (A) 8 40 CFR 94 EPA Tier II engines @ $371,484 each [4] $2,971,872

Instrumentation (Instr) 0.1 A [5] $297,187

Sales Tax (ST) 0.03A [5] $89,156

Freight (Fr) 0.05A [5] $148,594

B= A + Instr + ST + Fr $3,506,809

Direct Installation Cost (DI)

Foundations and Support (F&S) 0.08 B, Reference [6] $280,545

Handling and Erection (Install) 0.14 B, Reference [6] $490,953

Retrofit at Dry Dock Cost (dock) $250,000/day for 7 days [11] $1,750,000

Electrical (Electric) 0.04 B, Reference [6] $140,272

Piping (Pipe) 0.02 B, Reference [6] $70,136

Insulation for Ductwork (Insul) 0.01 B, Reference [6] $35,068

Painting (Paint) 0.01 B, Reference [6] $35,068

DI = F&S + Install + Dock + electric + Pipe + Insul + Paint $2,802,043

Total Direct Cost (TDC) = B + DI $6,308,852

Indirect Costs (IC)

Construction Expenses (CE) 0.05 B [6] $175,340

Engineering and Supervision (E&S) 0.1 B [6] $350,681

Contractor Fee (Contract) 0.1 B [6] $350,681

Startup (SU) 0.02 B [6] $70,136

Total Indirect Costs (TIC) = CE + E&S + Contract + SU + Test + PC $946,838

Total Capital Investment (TCI) TCI = TDC + TIC $7,255,690

Direct Annual Costs (DAC) Factor and reference Cost

Operating Labor (L) not considered an add-on cost 0

Maintenance (M) not considered an add-on cost 0

Utility (electricity cost, E) not considered an add-on cost 0

CEMS Required QA/QC Cost (CEMS) not considered an add-on cost 0

DAC= L + M + E + CEMS $0

Indirect Annual Costs (IAC)

Overhead (O) 0.6 (L + M) [7] $0

Administrative Charges (A) 2% of TCI [7] $145,114

Property Taxes (P) 1% of TCI [7] $72,557

insurance (Ins) 1% of TCI [7] $72,557

Capital Recovery Factor, CRF (i * (1 + i)^n) / ((1 + i)^n - 1) [8] 0.24389

Capital recovery (CR) CRF * TCI $1,769,595

IAC = O + A + P + Ins + CR $2,059,823

Total Annual Cost (TAC) TAC = DAC + IAC $2,059,823

Control Cost Analysis for Replacement of engines with EPA Tier 2 Engines

DESIGN CONDITIONS

TOTAL CAPITAL INVESTMENT (TCI)

TOTAL ANNUAL COSTS

Stimulation Vessel - Caterpillar 3512DITA

EPN: SV-PE-01 thru SV-PE-08

Anadarko Petroleum Corporation

Diamond BlackHawk EGOM PSD/Title V Permit Application

August 2013 1 of 2

Trinity Consultants

New Engine (stimulation vessel)
Maximum power for 8 existing engines, hp 2250 hp/engine, based on application 18,000

Maximum power for 8 new engines, hp 2250 hp/engine [4] 18,000

Engine Load 100%

TAC apportioned for NOX (%) Uncontrolled NOX emissions / Sum of uncontrolled NOX, VOC, PM, and CO 97.17%

TAC apportioned for PM (%) Uncontrolled PM emissions / Sum of uncontrolled NOX, VOC, PM, and CO 2.83%

NOx factor for existing engines, lb/hp-hr AP-42 Factor 2.40E-02

NOx factor for new Tier II engines, g/kW-hr [10] 7.20

NOx emissions from existing engines, tpy Refer to Emission Calculations in Appendix B 108.86

NOx emissions from new engines, tpy 7.20 g/kW-hr / 453.59 * 18,000 hp/1.341 * ton/2000 lb * 504 hours * 100% 53.69

NOx reduced, tpy 55.17

Cost Effectiveness of New Engines [9] TAC/NOx reduced $36,277

PM factor for existing engines, lb/hp-hr AP-42 Factor 7.00E-04

NOx factor for new Tier II engines, g/kW-hr [10] 0.20

PM emissions from existing engines, tpy Refer to Emission Calculations in Appendix B 3.18

PM emissions from new engines, tpy 0.20 g/kW-hr / 453.59 * 18,000 kW * ton/2000 lb * 504 hours * 100% 1.49

PM reduced, tpy 1.68

Cost Effectiveness of New Engines [9] TAC/PM reduced $34,670

[12] CO and VOC were not considered for the control cost analysis since the 40 CFR 94 EPA Tier 2 standards for these pollutants were larger than the AP42 factors used to calculate the CO and VOC emissions from the existing engine.

[11] Based on Personal Communication, E-mail from Mr. Rick Jeffrey (Baker Hughes) to Ms. Sara Carlson (Anadarko), 11/28/12. The E-mail 

communication is provided in Appendix E-2. Conservatively, it is assumed to take 7 days for replacing the engines.

[4] Based on proposal provided by Mustang Power Systems to Ms. Sara Carlson (Anadarko), dated 12/13/2012. 

NOx REDUCTION EFFECTIVENESS

ENGINE LOAD AND POWER

PM REDUCTION EFFECTIVENESS

[1] Anadarko's maximum lease duration for the drillship is five years.

[2] Estimated using guidance from OAQPS Manual.

[3] http://www.bls.gov/data/inflation_calculator.htm.

[5] Based on general cost ranges as presented on page 2-27 of Section 1, Chapter 2 of EPA AIR POLLUTION CONTROL COST MANUAL, Sixth Edition, 

EPA/452/B-02-001 , January 2002.

[6] Based on factors used on page 1-22 of Section 3.1, Chapter 1 of EPA AIR POLLUTION CONTROL COST MANUAL, Sixth Edition, EPA/452/B-02-001 , 

January 2002.

[7] Based on example shown on page 2-45 of Section 3.2, Chapter 2 of EPA AIR POLLUTION CONTROL COST MANUAL, Sixth Edition, EPA/452/B-02-

001 , January 2002.

[8] Based on equation 2.49 shown on page 2-55 of Section 4.2, Chapter 2 of EPA AIR POLLUTION CONTROL COST MANUAL, Sixth Edition, EPA/452/B02-001 , January 2002.

[10] Based on 40 CFR 94 EPA Tier 2 Standards.

TAC APPORTIONMENT BASED ON WT.% OF POLLUTANT FROM THE EXISTING ENGINE [9], [12]

[9] The TAC was apportioned based on the weight percentage of the components of the stream being controlled, per memorandum from Mr. Brian Beals, Preconstruction/HAP 

section/ARTB/APTMD to Mr. Edward Cutter, Jr.,GDNR, Calculation of Cost Effectiveness of Emission Control Systems, March 24, 1997 .

Example:

Cost Effectiveness of PM ($/ton) = TAC apportioned for PM (2.83%) * TAC ($ 4,386,485) / PM reduced (1.68 tpy)

Anadarko Petroleum Corporation

Diamond BlackHawk EGOM PSD/Title V Permit Application

August 2013 2 of 2

Trinity Consultants

New Engine (stimulation vessel)