UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 4

Foster Wade Statoil GulfServices, LLC 2103 City West Boulevard, Suite 800 Houston, Texas 77042 ATLANTA FEDERAL CENTER 61 FORSYTH STREET ATLANTA, GEORGIA 30303-8960 May 7, 2014

Subject: Title V Permit Significant Modification and PSD Permit Major Modification Application OCS Permit OCS-EPA-R4012 for Drilling and Exploration Activities inthe DeSoto CanyonLease Blocks Dear Mr. Evans: This letter is inresponse to your application dated March 27, 2014, and received bythis office on April 1, 2014, for changes to your existing Outer Continental Shelf(OCS) permit OCS-EPA-R4012. The existing permit was issued on October 28, 2013, pursuant to Section 328 ofthe Clean Air Act (CAA) under the OCS Air Regulations at 40 CFR 55 from the United States Environmental Protection Agency (EPA) Region 4. The permitregulates air emission activities from the mobilization and operation ofdeep water drilling vessels and associated support fleets at multiple lease blocks on the OCS in the Eastern GulfofMexico. Theproposed PSD revision and Title V significant modification would revise engine load and fuel consumptionrequirements, as well as various operating parameters for the Maersk Developer drilling vessel based onrecent emissions testing data. Changes inthe cement and barite handling/transfer activities were also proposed. After ourinitial review ofthe above application and supporting information, wehave determined that the application is incomplete and additional information is necessary in order for EPAto make a preliminary determination. Enclosed is a list ofthe informationrequired. Please provide a response to the comments enclosed within 60 days ofthis letter. Your application is considered incompleteuntil this information is received andevaluated and the EPA has determined that the application contains all information needed to propose a permitdecision. Please notifythe EPA ifa complete response is not possible within 60 days ofthis letter. Multiple submittals, as informationbecomes available, are acceptable andwill allow us to continue to process the application while receipt ofadditional informationis pending. As the EPA continues processing your application, we may identify additional information that will be essential to develop a preliminarydetermination and make a permitdecision, including information that may be needed in response to public comments. Based oninformationreceived 

### inthe March 2014 application, business confidentially under40 CFR 2 subpart B is not claimed for any informationprovidedto us.

Internet Address (URL) • http://www.epa.gov Recycled/Recyclable • Printed wnh Vegetable Oil Based Inks on Recycled Paper (Minimum 30% Postconsumer)

### Ifyou have anyquestions concerning the review ofyour application, please contact Lori Shepherd of my staffat (404) 562-8435.

Enclosure Cc: Don Evans, Statoil Kjersti Seim, Statoil Michael Carbon, ENVIRON Sincerely,

# ~ 

# 111. ilii-OK_ HeatherM. Ceron Chief 

### AirPermits Section

### ENCLOSURE EPA Completeness Comments on Statoil GulfServices, LLC, OCS AirPermitModification Application for Drilling and Exploration Activities in the DeSoto Canyon Lease Blocks dated March 2014

1. Offshore Support Vessels (OSVs) and crew boats are not dedicated to anyparticular drilling vessel or campaign. Therefore, to allow for flexibility to use any available vessel in the support fleet and to more efficientlymeet project needs, Statoil determined the total hours ofoperations for up to 3 OSVs and 1 crewboat operating simultaneouslybased on historical drilling campaigns using representative vessels, the OSV Peyton Candies and the crewboat Sybil Graham. Statoil then used AP-42 emissions factors in conjunction with this determination to estimate annual and maximum hourly emissions from the support vessels. Annual emissions werebased on two main engines per support vessel running at 100 percent load for 2,570 hours for the OSVs and 618 hours for the crewboat per campaign ofapproximately 180 days per year. Maximumhourly emissions for the support vessels were based on two main engines on each support vessel running at 75 percent load, and the short-term NAAQS and PSD increment analysis assumes crew and supplyboats operate at 50% load for 18 hours a day. Because the support vessels are not owned or operated by Statoil directly, the EPA is concerned that compliance demonstration monitoring and recordkeeping will be too onerous and difficult to maintain on an ongoingbasis throughout each drilling campaign to demonstrate continual compliance. Permit requirements that would be necessary using this approach mayinclude monitoring and recordkeeping associated with hours ofoperation, engine load, and gallons of diesel fuel used byeach support vessel when within 25 miles ofthe drilling vessel. Please provide a specific methodology for demonstrating continual compliance with the operating limitations assumed for thethird party vessels. 2. Although Statoil is not proposing to add any additional lease blocks with this permit modification, they have requested authorization to conduct drilling activities at locations in the eastern GulfofMexico further from the Class I areas addressed in the application's air quality analysis. Pleaseprovide specific information on what is being proposed with respect to anylease block "further from shore and Class I areas," and a corresponding discussion or demonstration regarding how the modeling conducted for this application incorporates the proposed expansion. 3. Pleaseprovide more specific information regarding how the gross annual fuel limitations will be used to ensure compliance with annual and short term standards given the 12 varying operating scenarios presented in the application and the absence oflimiting conditions on the hours of operation for the Developer's main engines. Please include corresponding details ofa compliance methodology, including specific information regarding how load data will be logged and continual compliance demonstrated inthe discussion. 4. Please provide a discussion regarding the variability ofemissions rates at a given load, from the eight identical main engines on board the Developer, including any insight that the engines' manufacturermaybe able to provide.The following does not affect completeness ofthis application. Region 4received the following comment from Jill Webster at the U.S. Fish and Wildlife Service on May 1, 2014. The Fish and Wildlife has completed its review ofStatoil'sPSDpermitmodification forwarded to our office onApril3, 2014. While we do notagree with the results of the visibility modeling (ie. modeling results indicate that the change in extinction exceeds 5%for the modelyear2001, Table 5.4.11-4), we do not object to thepermitmodification andthe Class I analyses. We are basing our decision on the temporary nature of theprojectandthe conservatism of the emission estimates modeled. Therefore, pleasebe aware that ifany changes are made to the project emissions orto fundamental project operating parameters, additional review bythe U.S. Fish and Wildlife Service will be necessary.