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- 0122 MEMORANDUM

DATE: J uly 28 , 20 11

SUBJECT: Oil and Natural Gas Production MACT and Natural Gas Transmission and

Storage MACT

– Technology Review

FROM: Bradley Nelson , EC/R Incorporated

TO: Bruce Moor e, EPA/OAQPS/SPPD/CCG

The purpose of this memorandum is to present the results of an investigation to identify any developments in practices, processes, and control technologies for hazardous air pollutant s (HAP) emission sources for the Oil and Natural Gas Production Maximum Achievable Control Technology (MACT) and the Natural Gas Transmission and Storage MACT regulations . T his analysis is part of EPA’s review efforts in accordance with section 112(d)(6) of the Clean Air

Act.

Section 1 provide s background information on section 112(d)(6), the source categories, and the requirements of the N ational E mission S tandards for HAP (NESHAP) that address emissions from these categories. Section 2 discusses the exploration of developments in practices, processes, and control technologies that have occurred since the original development

of th e s e NESHAP, and section 3 provides the conclusions of this investigation.

1.0 BACKGROUND

Section 112 of the Clean Air Act (CAA) requires EPA to establish techno logy

- based standards for listed source categories. These technology

- based standards are often referred to as

MACT standards. The Oil and Natural Gas Production MACT (40 CFR 63, subpart HH) applies to major and area sources and regulates HAP emissions fro m oil and natural gas production facilities. The Natural Gas Transmission and Storage MACT (40 CFR 63, subpart HHH) requirements apply to major sources and regulates HAP emissions from natural gas transmission and storage facilities. Extracted streams an d recovered products, processes and operations, and HAP emission points are described in the following sections

. Section 112 contains provisions requiring EPA to revisit these standards. Specifically, paragraph 112(d)(6) section states:

(6) REVIEW AN D REVISION.

– The Administrator shall review, and revise as necessary (taking into account developments in practices, processes, and control technologies), emission standards promulgated under this section no less often than every 8 years.2

To comply with this CAA requirement, EPA conducted a technology review for each of these MACT standards for major sources.

1.1 Oil and Natural Gas Production MACT

The oil and natural gas production source categor y include s the separation, upgrading, storage, and transfer of extracted streams (primarily hydrocarbons) that are recovered from production wells. The extracted streams and recovered products for this source categor y include crude oil, condensate, natural gas, and produced water. The oil and natural gas production source category includes the processing and upgrading of crude oil prior to the point of custody

transfer

, and natural gas prior to entering the pipeline systems associated with the natural gas

transmiss ion and storage source category. The types of processes and operations in this source category include production wells, dehydration units, tank batteries, natural gas processing plants, and offshore production platforms

. The HAP emission points regula ted by the existing

MACT standards are dehydration units, storage vessels with the potential for flash emissions

, and equipment leaks.

Dehydration Units

D ehydration units are used as stand

- alone units that remove water and other condensates

in natural gas from an individual well or several wells . In addition, dehydration units may be part of various processing units at condensate tank batteries, natural gas processing plants

and offshore production platforms

. Dehydration is necessary to remove water v apor which may form hydrates that can cause corrosion and plug equipment lines. Triethylene glycol (TEG) dehydration units account for most of the population of dehydration units, with ethylene glycol (EG), diethylene glycol (DEG), and solid desiccant dehy dration units accoun ting for the remaining portion. The subpart HH control requirements are applicable to dehydration units that process an actual annual average flow rate of greater than or equal to 3 million standard cubic

feet per day ( MMscf/d ) and emi t benzene emissions greater than or equal to 1 ton per year ( tpy ).

The current NESHAP requires that a closed vent system be used to capture HAP emissions from the glycol dehydrator process vent and flash tank (if a flash tank is present), and

to route those HAP emissions to a control device or series of control devices that reduce the HAP mass emissions by 95 percent , or reduce the benzene emissions to less than 1 tpy.

Storage Vessels with the Potential for Flash Emissions

Storage vessels with the po tential for flash emissions refer to the collection of storage
vessels that contain a hydrocarbon liquid with a stock tank gas

- to

- oil ratio (GOR) greater than or equal to 1,750 cubic feet per barrel (ft 3 /bbl) , and an API gravity of greater than or equal to 40 degrees, and an actual average hydrocarbon liquid throughput of greater than or equal to 500 bbl/day . Flash emissions occur from these vessels when dissolved hydrocarbons evolve (or flash) from the tank contents when the f l uid pressure i s reduced. Th ese storage vessels typically

store crude oil, condensate, or other hydrocarbon liquids at production facilities prior to transfer of the oil or natural gas to a refinery or natural gas processing plant. Condensate, also referred to as retrograde gas, consists of hydrocarbons that are in a gaseous state under reservoir conditions, but become liquid in either the wellbore or the production process.3

The current NESHAP requires that e missions of HAP from storage vessels with the potential for flash emis sions be controlled using a cover that is connected to a closed vent system. The captured HAP emissions are then required to be routed to a control device or series

of control devices that reduce the HAP mass emissions by 95 percent.

Equipment Leaks

Eq uipment leaks are emissions from valves, pump seals, flanges, compressor seals, pressure relief valves, open

- ended lines, and other process and operation components. The amount of HAP emissions from equipment leaks is dependent on the type and number of

e quipment components and the concentration of HAP components in the component stream

. Components such as pumps, valves, pressure relief valves, flanges, agitators, and compressors are potential sources that can leak due to seal failure. Other sources, such as open

- ended lines, and sampling connections may leak for reasons other than faulty seals. In addition, corrosion of welded connections, flanges, and valves may also be a cause of equipment leak emissions.

The current NESHAP requires that the produc tion facility monitor components using a leak detection and repair (LDAR) program as described in 40 CFR part 61, subpart V. For most components, this requires monthly inspection of the components using a volatile organic compound (VOC) detection instrume nt. If a leak greater than 10,000 parts per million is detected, then the facility is required to repair that leak in 15 days.

1.2.2 Natural Gas Transmission and Storage MACT

T he natural gas transmission and storage source category includes the pipeline transport, storage, and processing of natural gas prior to entering the final pipeline of the local distribution company that delivers natural gas to the final end user.

Dehydration Units

As described above, dehydration units remove water and other condensates from the natural gas stream prior to going to the distribution company. The subpart HHH requirements are applicable to dehydration units that process an actual annual average flow rate of greater than or equal to 10 MMsc f/d and emit greater than or equal to 1 tpy

.

The current NESHAP requires that the emissions from a dehydration unit be controlled using a control device or series of control devices that reduce the HAP mass emissions by 95 percent, or reduce the benzene e missions to less than 1 tpy.4

2.0 PRACTICES, PROCESSES, AND CONTROL TECHNOLOGIES

For the purpose of reviewing the MACT standards , EPA considered a “development” in practices, processes, and control technologies to be:

 Any add

- on control technology or other equipment (e.g., floating roofs for storage

vessels ) that was not identified and considered during MACT development,

 Any improvements in add

- on control technology or other equipment (that was identified

and considere d during MACT development) that could result in significant additional emission reduction,

 Any work practice or operational procedure that was not identified and considered during MACT development, and

 Any process change or pollution prevention alternative that could be broadly applied that was not identified and considered during MACT development.

Table 1 summarizes the practices, processes, and control technologies considered during the development of the MACT standards for these categories. This is fo llowed by descriptions of the searches for developments since that time. The specific information sources that were consulted in this effort included EPA’s RACT/BACT/LAER clearinghouse (section 2.1), and direct correspondence with the industry (section 2. 2).

2. 1 RACT/BACT/LAER Clearinghouse

Under EPA's New Source Review (NSR) program, if a company is planning to build a new plant or modify an existing plant such that air pollution emissions will increase by a specified threshold , then the company must obtain an NSR permit. The NSR permit is a construction permit which requires the company to minimize air pollution emissions by either changing the process to prevent air pollution and/or installing air pollution control equipment. In obtaining an NSR pe rmit, a source will be required to install one of the following:

 Reasonably Available Control Technology (RACT) , is required on existing sources in areas that are not meeting national ambient air quality standards (i.e.,

non

- attainment areas). RACT is a co ntrol technology that is reasonably available, and both technologically and economically feasible.

 Best Available Control Technology (BACT) , is required on major new or

modified sources in attainment areas and is an emissions limitation that represents

th e maximum degree of control that a source can achieve. BACT can be add

- on control equipment or process modification.

 Lowest Achievable Emission Rate (LAER) , is required on major new or modified

s ources in non

- attainment areas and represents the most strin gent emission limitation contained in any State implementation plant (SIP) or the most stringent emission limitation achieved in practice by a source.

BACT and LAER (and sometimes RACT) are determined on a case

- by

- case basis, usually by State or local per mitting agencies. EPA established the RACT/BACT/LAER Clearinghouse, or RBLC, to provide a central data base of air pollution technology information (including past BACT and LAER decisions contained in NSR permits) to promote the sharing of

information amon g permitting agencies and to aid in future case

- by

- case determinations.5

Table 1. Summary of Practices, Processes, and Control Technologies Identified and

Considered During the Oil and Natural Gas Production and Gas Transmission and Storage

MACT Development

Source Category/

Emission

Source Practices, Processes, and Control Technologies Considered During MACT Development Determined to be

Feasible Under

MACT

Standards?

Oil and Natural Gas Production

Glycol Dehydrators Add

- on controls (condensers, catalytic incinerators, thermal

incinerators, carbon bed absorbers) Yes

Pollution prevention Yes

A combination of add

- on controls and pollution prevention Yes

Storage Vessels

with the

Potential for

Flash Emissions Floating roofs with specified seals and fittings No 1

Add

- on controls (condensers, catalytic incinerators, thermal incinerators, carbon bed absorbers) Yes

Pollution prevention Yes Equipment

Leaks Leak detection and repair programs Yes

S pecific equipment modifications Yes

Gas Transmission and Storage

Glycol Dehydrators Add

- on controls (condensers, catalytic incinerators, thermal

incinerators, carbon bed absorbers) Yes

Pollution prevention Yes

A combination of add

- on controls and pollution prevention Yes

1 U.S. Environmental Protection Agency, Office of Air Quality Planning and Standards. Research Triangle Park, NC. National Emission Standards for Hazardous Air Pollutants for Source Categories: Oil and Natural Gas Production and Natural Gas Transmission and Storage. Background Information Document for Proposed Standards.

EPA

- 453/R

- 94

- 0 79a.6

However, data in the RBLC are not limited to sources subject to RACT, BACT, and LAER requirements. Noteworthy prevention and control technology decisions and information are included even if they are not related to past RACT, BACT, or LA ER decisions. 2

The RBLC provides several options for searching the permit database on

- line to locate applicable control technologies. A basic search of the RBLC was conducted by specifying the process category, pollutant, permit dates, and State. The search specified VOC

- and HAP

emitting processes in the Petroleum/Natural Gas Production categories with permits dating back

to 1997. The search results included the following data fields:

 Facility Name, and State

 Standard Industrial Classification (SIC), and North American Industry Classification System (NAICS )

 Process Name and Description

 Control Technology and Emission Limit

 Percent Efficiency of Control

Table 2 presents processes, practices, and control technologies that were found in the

RBLC for the Petroleum/Natural Gas Production categories . More detailed example results of the search are presented in Attachment 1

.

As shown in Table 2, the practices, processes, and control technologies are all examples of the types of emission reduction techniques that were considered in the development of the Oil and Natural Gas Production and Gas Transmission and Storage MACT Devel opment . Therefore, this exercise did not reveal any developments in practices, processes, or control technologies.

2.2 Current EPA LDAR Programs

The current subpart HH equipment leak standards require compliance with specific provisions of 40 CFR part 6 1 , subpart V. This subpart V

- level LDAR program requires monthly monitoring of valves and a leak definition of 10,000 ppm. Since the promulgation of the subpart

HH standards , EPA has developed a more stringent LDAR program (40 CFR part 60, subpart VVa) that lowers the leak definition to 500 ppm and includes the annual monitoring of connectors. There have also been advancements in optical gas imaging and ultrasound LDAR monitoring. These instruments measure the magnitude of the leak, but are unable to m easure the concentration of the leak. The g eneral control device and work practice requirements in 40 CFR part 6 3 , subpart A allow for the use of these instruments as an alternative to the Method 21 monitoring.

2. 3 Natural Gas STAR

New practices, pr ocesses, and control technologies were also reviewed from the Natural Gas STAR program. The Natural Gas STAR Program is a flexible, voluntary partnership between EPA and industry throughout the oil and gas sector. This program encourages oil and

natural gas companies to adopt cost

- effective technologies and practices that improve operational

2 Technology Transfer Network: Clean Air Technology Center. RACT/BACT/LAER Clearinghouse Basic Information. http://www.epa.gov/ttn/catc/rblc/htm/welcome_eg.html

.7

efficiency and reduce pollutant emissions . The program provides the oil and natural gas industry with information on new techniques and developments to reduce pollut ant emissions from the various processes.

Table 2. Summary of the RBLC Processes, Practices, and Control Technologies for Glycol Dehydrators , Storage Vessels with the Potential for Flash Emissions, and Equipment Leaks

Control Method Identified in RBLC Considered u nder MACT? (Y/N) Comments Glycol Dehydrators

Thermal Oxidizer Y Catalytic Oxidizer Y

Condenser Y

Enclosed Flare Y While this technology was considered under MACT, it does not achieve the current MACT

emission reduction.

Pollution Prevention Y Storage Vessels with the Potential for Flash Emissions

Thermal Oxidizer Y Catalytic Oxidizer Y

Condenser Y

Enclosed Flare Y This technology does not achieve the current

MACT emission reduction.

Pollution Prevention N These options are process modifications or operating limitations and were not considered

under MACT. Equipment Leaks

Leak Detection and Repair Y

Low Emission Design Equipment N This technology has not yet been proven to be effective for reducing emissions.

Glycol Dehydrators

The Natural Gas STAR program listed the following control techniques for glycol dehydrators:

 Optimize Glycol Circulation Rates 3

- By optimizing the glycol circulation rate, the facility can prevent the over circulation of the glycol solution in the dehydrator, thus reducing the potential emissions of HAP. Over circulation of the glycol solution does not significantly reduce the m oisture content in the natural gas; however it does increase

HAP emissions.

3 EPA (2006). Lessons Learned: Optimize Glycol Circulation and Install Flash Tank Separators in Glycol Dehydrators. Natural Gas STAR.8

 Flash T ank S eparator (FTS) I nstallation 4

- The installation of a flash tank separator can capture the m ethane that flashes from rich glycol in an energy

- exchange pump . The captured emissions can be routed to a control device or re

- circulated back to the natural gas feed line.

 Electric P ump I nstallation 5

- Gas

- assisted pumps are used in remote areas that do not

have an electrical power supply and are designed to take advantag e of the energy of high

pressure natural gas entrained in the rich (wet) glycol solution leaving the gas contactor. The seals in these pumps wear over time and result in contamination of the lean (dry) glycol solution making it less efficient in dehydrati ng the gas, which increases the glycol

circulation rates , and increases HAP emissions

.

 Re

- route G lycol S kimmer G as 6

- R erouting the condensate separator gas, called skimmer gas, to the reboiler firebox or other low pressure fuel gas systems for fuel use can reduce

VOC and HAP emissions. N o information was provided on the level of VOC and HAP

emission reductions.

 Replace Glycol Dehydrators with Methanol Injection 7

- Replacing a glycol gas dehydrator with methanol injection can be a more efficient and simp ler method of controlling gas hydrate formation in gas lines than glycol dehydration . Methanol injection prevents hydrate formation in the natural gas and eliminates HAP emissions from the glycol dehydrator

. This technology has been used for low pressure systems, but there is no information on the effectiveness of this technology for high pressure systems. In addition, field personnel are required to be on

- site to operate the technology.

 Replace G lycol D ehydrators with D esiccant D ehydrators 8

- Replacing glycol dehydrators with desiccant dehydrators reduces methane, VOC, and HAP emissions by 99 percent by passing the wet gas through a drying bed of desiccant tablets. The tablets pull moisture from the gas and gradually dissolve in the process

. This technology is feasible for low temperature, high pressure processing facilities, but ha s not been proven for gas volumes great than 5 million cubic feet per day (5 MMscfd)

.

 Replace Glycol Dehydrator w ith Separators and In

- line Heaters 9

- Pipeline ga s is expanded and auto

- refrigerated in a cyclone separator to enhance water condensation and separation. The gas is then reheated to restore the gas to a dew point well below any conditions in the distribution system. Since no glycol is used to remove wa ter from gas,

VOC and HAP emissions from a glycol dehydrator are avoided. This technology is only appropriate for cold weather climates.

The optimization of the glycol circulation rates and the flash tank separator options were used in the MACT technolog y analysis from the Natural Gas STAR options. The other options

were considered to be new or emerging technologies and have not been proven to work for all glycol dehydrators in the production or transmission source categories

.

4 EPA (2006). Lessons Learned: Optimize Glycol Circulation and Install Flash Tank Separators in Glycol Dehydrators. Natural Gas STAR.

5 EPA (2006). Lessons Learned: Replacing Gas

- Assisted Glycol Pumps with Electric Pumps. Natural Gas STAR.

6 EPA (2004). Partner Reported Opportunities: Reroute Glycol Skimmer Gas. Natural Gas STAR.

7 EPA (2004). Partner Reported Opportunities: Replace Glyco l Dehydrators with Methanol Injection . Natural Gas

STAR.

8 EPA (2006). Lessons Learned: Replacing Glycol Dehydrators with Desiccant Dehydrators. Natural Gas STAR.

9 EPA (2004). Partner Reported Opportunities: Replace Glycol Dehydrator With Separators and I n

- line Heaters

. Natural Gas STAR.9

Storage Vessels

The Natural Gas STAR program listed the following control techniques for storage

vessels:

 Pressurized Condensate Tanks 10

– Pressurizing the condensate tanks allows the methane or other organic compounds to remain saturated in the condensate. The condensate ca n then be transported using trucks to a gas plant for economic recovery of gas liquids and associated methane, VOC, and HAP

. This option requires pressurized transport vehicles,

which are not allowed under MACT.

 Vapor Recovery Units 11

– Can be used to capt ure 95 percent of the vapor emissions from storage tanks and convert to methane and hydrocarbon liquids using separators or suction

scrubber.

Both of the above technologies were considered under the original MACT and do not represent developments in pra ctices, processes, or control technologies.

Equipment Leaks

 Ultrasound Leak Detection 12

- Ultrasound leak detectors are used to reveal high frequency sounds associated with gas leakage. The ultrasound detector indicates whether the valve is tightly shut and the magnitude of leakage.

 Directed Inspection and Maintenance 13

- A directed inspection and maintenance program begins with a baseline survey to identify and quantify leaks. Repairs are then made to only the leaking components that are cost

- effective t o fix, based on criteria such as repair cost, expected life of the repair, and payback period. Subsequent surveys are designed based on data from previous surveys, allowing operators to concentrate on the components that are most likely to leak and are pro fitable to repair.

 Compressor Rod Packing Systems 14

– Increased frequency of reciprocating engine compressor rod packing replacement can reduce methane, VOC, and HAP emissions from compressors

.

 Replacement of Wet Seals with Dry Seals 15

– R eplac ement of wet s eals with dry seals

reduces operating costs and methane , VOC, and HAP emissions from centrifugal

compressors

.

These control options were not considered to be appropriate for MACT. The directed inspection and maintenance program was not considered because it is based on the criteria of cost of repair versus emission reductions. The ultrasonic leak detection provides the magnitude of the leak, but does not quantify the leak. Therefo re, this option was not was not considered for

10 EPA (2004). Partner Reported Opportunities: Install Pressurized Storage of Condensate . Natural Gas STAR.

11 EPA (2006). Lessons Learned: Installing Vapor Recovery Units on Crude Oil Storage Tanks. Natural Gas STAR.

12 EPA (2004). Partner Reported Opportunities: Use Ultrasound to Identify Leaks . Natural Gas STAR.

13 EPA (2006). Lessons Learned: D irected I nspection and M aintenance at G as P rocessing P lants and B ooster
S tations. Natural Gas STAR.

14 EPA (2006). Lessons Learned: Reducing Methane Emissions from Compressor Rod Packing Systems. Natural

Gas STAR.

15 EPA (2006). Lessons Learned: Replacing Wet Seals with Dry Seals in Centrifugal Compressors . Natural Gas

STAR.10

MACT technology review. The compressor rod packing and dry seal replacement options reduce leaking emissions from compressors . These options were not considered as options for equipment leaks because of the low HAP content of the leaking gas. H owever th ese compressor option s will be reviewed for the NSPS for each of the oil and gas segments.

3.0 CONCLUSIONS

In order to identify developments in practices, processes, or control technologies that

could be used to further reduce emissions from Oil and Natural Gas Production and Natural Gas Transmission and Storage , the following sources of information were searched: EPA’s RACT/BACT/LAER clearinghouse, and Natural Gas STAR

.

For glycol dehydrators, many of the practices, processes, or control technologies listed by the Natural Gas STAR program were not identified and evaluated during the original MACT development. However, most of these practices are considered to be new and unproven practices that may are not applicable to all production or transmission facilities. Only one of the technologies identified in the Natural Gas STAR literature, glycol dehydrator with a desiccant dehydrator, would result in zero HAP emissions. However, this technology cannot be used for natural gas operations that operate at high temperature, high volume, or low pressure. Therefore, this technology was not considered as MACT for the natural gas and oil production or natural gas transmission and storage source categories. The RBLC results did not identify any practices, processes, and control technologies applicable to the emission sources in these categories that were not identified and evaluated during the original MACT development.

The applicable technologies for s torage vessels with the potential for flash emissions identified in the Natural Gas STAR program are comparable to the cover and control technologies currently required under the existing MACT. Therefore, these Natural Gas STAR technologies would not resu lt in any additional HAP reductions than what is achieved under the current MACT. The RBLC results did not provide any new technologies or practices that were not identified in the original MACT.

For equipment leaks, the RBLC and Natural Gas STAR progra ms did not provide any additional practices or technologies for reducing HAP from equipment leaks. The only new developments for equipment leaks were found in EPA’s current LDAR programs. Both the 40 CFR part 60, subpart VVa and the alternative work prac tices under 40 CFR part 60, subpart A provide more stringent requirements than the subpart V standards . The subpart VVa

- level program has a leak definition of 500 ppm and includes the annual monitoring of connectors. The

g eneral control device and work p ractice requirements in 40 CFR part 60, subpart A allow for the monthly monitoring of components using an optical gas imaging or ultrasound equipment

with an annual Method 21

– based LDAR check. Because the current leak definition under subpart HH is the sa me as the leak definition in subpart VV, which was evaluated in the Technical Support Document 16 (TSD) for the NSPS, the same equipment leak options could also be evaluated for the NESHAP. The ratio of VOC to HAP in the production natural gas stream is

app roximately 20 to 1; therefore the HAP reduction can be expected to be 1/20 th of the VOC

reduction calculated in the TSD.

16 U.S. EPA, Background Technical Support Do cument for Proposed Standards

- New Source Performance Standards for the Oil and Natural Gas Industry , July 2011.11

In the TSD, t he estimated incremental cost for moving from a subpart VV LDAR program to a subpart VVa LDAR program was determined to b e $3,340 per ton of VOC. Using

the 20

- to

- 1 VOC to HAP ratio

, the incremental cost to control HAP at the subpart VVa level would be approximately $66,800 per ton of HAP. Other LDAR options considered in TSD included the monthly monitoring using an optical gas imaging camera with a n annual EPA

Method 21 check . The HAP cost effectiveness of this option was approximately $129,000 per
ton of HAP, if purchasing the camera; and $93,000 per ton of HAP, if renting the camera

. Emission reductions from m onthly optical gas imagining with no Method 21 check, and annual optical gas imaging with no Method 21 check could not be quantified and, therefore, no cost

effectiveness values were determined. Based on these estimates, it was determined that the

additio nal costs of these options were not justified.

In addition to the plant

- wide LDAR program evaluations, a component cost analysis was also evaluated at gas processing plants for the 40 CFR part 60, subpart VVa

- level of control.

The component analysis was not performed for optical gas imaging, because this technology is not amenable to a component to component analysis. The component analysis for the subpart

VVa

- level of control for connectors has an incremental cost effectiveness of $4,360 per ton for

VO C for connectors and $144 per ton for VOC for valves. This converts to $87,200 per ton for

connectors and $2,880 per ton for valves using the 20 to 1 VOC to HAP ratio

. The additional cost for the more stringent requirement for connectors was determined no t to be justified, but the

additional cost for valves is justified. Therefore, the leak definition for valves in 40 CFR part 63, subpart HH is proposed to be lowered to a n instrument reading of at least 500 ppm as a result of

the technology review.ATTACHMENT 1

INFORMATION FROM THE RACT/BACT/LAER CLEARINGHOUSE