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MEMORANDUM DATE: January 1 9 , 2011 TO: Melanie King, EPA OAQPS/SPPD/ESG FROM: Tanya Parise , EC/R, Inc. SUBJECT: Summary

of the January 6, 2011 Meeting with API Regarding CPMS Stay Request and P etition to Reconsider on RICE NESHAP

INTRODUCTION The American Petroleum Institute (API ) requested this meeting with EPA to follow

- up on the December 15, 2010 meeting. A summary of the December 15 , 2010 meeting is available in the docket ( EPA
- HQ
- OAR
- 2008
- 0708 ). API also wanted to check on the status of the request for an administrative stay on the continuous parameter monitoring s ys tem ( CPMS ) requirements and to discuss the petition for reconsideration submitted by API on the National Emission Standards for Hazardous Air Pollutants (NESHAP) for stationary reciprocating internal combustion engines (RICE)
. T he most recent amendments to the NESHAP for stationary RICE were published in the Federal Register on August 20, 2010 (75 FR 51570 ). ATTENDEES Michael Horowitz, EPA Dan Regan, INGAA Bob Wayland, EPA Jim McCarthy , IES (b y phone) Melanie King, EPA (b y phone) Rebecc a Rentz, Bracewell & Giuliani (by phone) Barrett Parker , EPA (b y phone) Tom Monahan, ExxonMobil (by phone) Tanya Parise, EC/R (by

phone) Jeff Panek, IES (b y phone) Michael McBride, Van Ness Feldman Clay Freeberg, Chevron (by

phone) Bill Wehrum, Hunton & Williams Jenny Yang, Marathon (by

phone) Jeff Adams, BP Clint Gill, ConocoPhillips (by phone) John Wagner, API Kyle Jantzen, Exterran (by phone) Matt Todd, API Bill Grygar, Anadarko (by phone) Stephanie Meadows, AP I Grover Campbell, Chesapeake (b y phone) John Admire, DCP Midstream Janet Bounds, Chevron (by phone) Joshua Epel, DCP Midstream 

# E C 

# / R Incorporated Providing Environmental Technical Support Since 19892

S UMMARY OF MEETING APIsubmitted a request for an administrative stay on the CPMS requirements in the stationary RICE NESHAP. The letter from API specificall y requests that EPA stay the provisions requiring CPMS for major sources and additionally requests that EPA stay

the CPMS requirement for area sources engines to allow the full 3

- ye ar compliance period to begin once a final d ecision on reconsideration is reached. Th e request is available in the docket as EPA

- HQ
OAR
- 2008
- 0708
- 0682. APIhas also previousl y s ubmitted a petition for reconsideration on October 19, 2010 on the stationary RICE NESHAP (EPA

- HQ
- OAR
- 2008
- 0708
- 0582). A PI wanted to follow

- up on the CPMS stay request and other issues described in the petition for reconsideration. API provided an agenda for the meeting, which follows this meeting summary
. CPMS Stay Request APIreiterated from the December 15, 2010 meet ing to EPA that there are significant issues related to the CPMS requirements in the current rule and asked what EPA’s thoughts were on API ’s request . EPA ind icated that it has reviewed API’s letter and was in the process of responding to the request for the stay
. Urban/Rural Distinction EPA indicated that it was in the process of responding to the petitions for reconsideration
. Letters will be mailed to petitioners in the near future indicating whether reconsideration on various issues have been granted or denied, EPA said. Regarding the requirements for area source stationary engines at rural locations, in API ’s opinion there is no real need to regulate emissions from stationary engines at these locations
. According to API, rural source engines are not big emitters, there is a small population of these engines and the engines are in areas with a small population density . API expressed that it believes that the decisions made under the Oil and Natural Gas Production (O&G) NESHAP are still correct , and asserted that the O&G rule sets a precedent , which is equally justified to appl y to stationary

engines subject to this rule . APIadded that engines in rural locations are widel y dispersed. Ty

picall y, rural site s consist of only a single engi ne and s ome of these sites are at extreme distances, for instance in some cases as much as 30 miles from the nearest town , according to API . Accessibility can also be an issue at some locations. It is not practical to visit these engines, API said, who f urther stated that these sites are not visited on a regular basis. Having to frequently

visit these rural source s would involve more resources APIstated, as opposed to what would be necessary if the engine simply had to follow management practices. EPA asked how often staff come to the site for maintenance purposes as opposed to for monitoring reasons. API indicated that it has operators who are capable of performing some maintenance activities , but that it requires d ifferent people with the appropriate skills and knowledge to address instrumentation and electrical issues . Instrumentation and electrical staff rarel y go to rurall y located sites, but are usuall y at larger sites or plants. API said that the personnel currentl y visiting rural sites do not have the knowledge to conduct pressure monitoring.3

In general, API expressed that it is the testing and monitoring requirements that are creating the majority of the problems at rural sites. EPA asked what the specific problems are. APIresponded that getting a test trailer , for instance, to the rural location can be a problem, e.g., due to extreme weather conditions in Colorado or due to Bureau of Land Management land restrictions. Overall, API said that the problems related to testing and monitoring at rural locations are associated with logistics and costs. According to API, rich burn engine testing is very costl y, particularl y Method 323 and FTIR testing, whereas testing for carbon monoxide (CO) is easier to do than formaldeh yde testing. EPA as ked how API would recommend that compliance be demonstrated. API indicated that there are numerous way s to demonstrate compliance depend ing on how much assurance EPA requires. API said that it is not necessaril y reco mmending moving entirely away from all performance testing. It may be reasonable to test for nitrogen oxides (NO x ) or CO to demonstrate that the cataly tic converter is working and that a reduction is occurring across the catal ys t, API said. Also, APIrecommended that EPA could allow a short e r ASTM method as an alternative to Method 7E. The personnel sent to a site will depend on the type of compliance demonstration it is necessary to conduct. For example, APIsaid that a mechanic may be able to use a portable anal yz er, but may not be qualified to conduct a full EPA test method. APIadded that additional engines can be tested with shorter testing requirements , for instance with an EPA method about 1 1⁄2 engines can be tested per day as opposed to several engines being able to be tested with portable analyzers. APIargued that the numerical emission standard is not necessary and that it would make it easier with re spect to personnel and electronics if EPA removed the numerical limit. According to API, this would improve cost, operations, miles travelled, and so on
. As an alternative, API proposed a CO threshold that would act as a measurement or an indicator that the catal ys t is working. If the threshold is exceeded, further action would be required that would either require a test or replacing the catal ys t. EPA asked if the pressure drop would be sufficient to indicate whether the cataly st is working. API said that the pressure drop is not a good indicator because the pressure drop is impacted b y the flow. APIsuggested looking at a different pollutant besides formaldeh yd e , and EPA indicated that it is talking to the Engine Manufacturers Association (EMA) re garding this and EMA is recommending total h ydrocarbons (THC) in place of formaldeh yd e . API indicated that it is not sure if THC would be an appropriate surrogate because for natural gas engines THC would mostly consist of methane , which is hard to oxidiz e . The formaldeh yde could be reduced, but methane might not be and that would be reflected in the THC emissions. API mentioned that there are methane cutters available to address this issue and also recommended that CO percent reduction could be used as an indicator.4

Above

- the

- Floor Regarding aftertreatment controls on small rich burn engines at area sources , API questioned whether this decision was economically justified , and questioned whether it was correct to rel y on NO x reductions without a NO x limit in the rule. APIargued that there is a very specific operating window to achieve NO x reductions with a three

- way cataly st on rich burn engines. The air

- to - fuel ratio (AFR) has to be tightly controlled in order to obtain the NO x co benefit , and without a requirement on the AFR controller and a NO x limit, APIargued it is unlikely to obtain the NO x reduction EPA has claimed. Rule Future APIexpressed that the 3 years before sources will be required to comply with the RI CE NESHAP amendments is not long. According to API , companies will soon begin planning and budgeting of controls and CPMS. EPA said that it will look at the issues APIhas brought up
. EPA and APIplanned to meet again on January 26, 2011 to d iscuss monitoring specifics, and on February 9, 2011 to discuss other general issues related to the RI CE NESHAP reconsideration petitions
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## Meeting Agenda
Date: January 6 , 20 11 Location: API, 1220 L St NW, Washington, D.C. Room: 1204 Time: 1 :00 p.m. to 3 :00 p.m. Call

- In Information: ( 866 ) 443.0059; Pass Code

– 2026828319# Petition to Reconsider NESHAP for Reciprocating Internal Combustion Engines, Final Rule, 75 Fed. Reg. 51,570

1:00 Introductions & M eeting O bjectives 1: 0 5 Status of Request for Consideration of a Narrow Administrative Stay for CPMS Requirements 1:35 Failure to Include an U rban/ R ural D istinction for Area S ources has Resulted in Unsupported Requirements and S tandards for R

ural E ngines

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### EPA authority to regulate rural area source engines and failure to provide sufficient justification for their inclusion 1:50 Improper Inclusion of A bove the Floor C ontrols at Area S ources 2:10 MACT Floor and Above the Floor Determinations Contained In Final Rule Introduced New Data and Methodologies That Precluded an Opportunity for Public Comment 2:55 Need for Continued Discussions on Issues Outlined in the Petition for Reconsideration and Dis cussed Above

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### Implementation timeline to meet regulatory requirements 3:00 Conclude Meeting