# E C 

# / R Incorporated Providing Environmental Technical Support Since 1989

1 MEMORANDUM

TO: Bruce Moore

, EPA/OAQPS/SPPD/CCG

FROM: Bradley Nelson, EC/R, Inc.

DATE: October 1 8 , 201 1

SUBJECT: Summary of the October 4

, 20 11

, Teleconference with the Western States Air

Resources (WESTAR) Council and the U.S. Environmental Protection Agency to

D iscuss the Proposed Oil & Gas NSPS/NESHAP

I. INTRODUCTION

WESTAR requested this meeting with EPA to discuss questions on the proposed Oil and Gas NSPS (40 CFR Part 60, subparts KKK, LLL, and OOOO) and NESHAP (40 CFR Part 63, subpart s HH and HHH ). This meeting summary will be available in the docket for this rulemaking (Docket ID No. EPA

- HQ

- OAR

- 20 1 0

- 0 505 ). The proposed rule for the oil and natural gas sector wa s published in the Federal Register on August 23, 20 11 (7 6 FR 52738 ).

II. ATTENDEES

The following is a list of participants in the meeting.

U.S. Environmental Protection Agency

Bruce Moore Greg Nizich Alex Macpherson

WESTAR Bob Lebens, WESTAR

Western Regional Air Partnership (WRAP)

Tom Moore

Lee Gribovicz2

States Rebecca Smith, AK Rose Waldman, CO Eilene Steilman, MT David Aguirre, MT Mark Jones, NM Kerwin Singleton, NM Rebecca Smith, NM Jim Semerad, N D Mark Dihle, ND Todd Peterson, N D Jim Anderson, SD Cynthia Madison, WY Chris Krey, WY Brock LeBaron, UT Tim Andrus, UT Dave McNeil, UT Joel Karmazyn , UT

EC/R Incorporated

Heather Brown

Denise Grubert Bradley Nelson

III. SUMMARY OF DISCUSSION

Bruce Moore opened the meeting by stating that the proposed rules are currently still in the comment period and EPA could answer clarifying questions from the group, but could not provide any responses to comments on the proposed rules. He then started the question period by responding to a list of questions submitted by Bob Lebens regarding the proposed NSPS and

NESHAPs . A copy of the email submitted questions is presented in Attachment A of this meeting summ a ry.

The first question in the email submittal asked why the cost effectiveness of valves and open

ended connectors increased with longer a longer monitoring frequency. EPA stated th at while the monitoring cost decreases slightly with less frequent monitoring, the emission reductions decrease much more significantly with less frequent monitoring. Therefore, the annual cost for less frequent monitoring increases.

The second question asked why §§ 60.5420(b)(2)(iii) and 60.5420(c)(1) required the same submittal of records. EPA stated that their intent was to streamline recordkeeping and reporting and to remove duplicate efforts. EPA asked the group to submit a forma l comment on this issue.

The third question asked for clarification on whether the reporting of pneumatic controllers occurs during the reporting period or when the rule becomes effective. EPA stated that the intent3

was for the reporting period to appl y to pneumatic controllers installed during the reporting period.

The fourth question pointed out a “typo” in 60.5420(b)(5)(iv) which states “each controllers.”

The fifth and sixth question s submitted by WESTAR asked if the 21 bbl/day requirement in §§ 60. 5420(b)( 6)(ii) and 60.5420(c)(5)(iii) were actually supposed to be 20 bbl/day. EPA stated that both the requirements should be 20 bbl/day.

The seventh question asked why the definition of flare in § 60.5430 excluded enclosed flares. EPA stated that they will elaborate on this in the final rule, but the intention was to make the

definition consistent with other rules.

The eighth question asked for a clarification of the definition for a storage vessel in subpart

OOOO. EPA stated that the definition shoul d be written as storage vessels with a potential for VOC emissions equal to or greater than 6 tpy.

The next topic in the su bmitted list of questions is the exemption of some well completion operations occurring in coalbed methane (CBM) wells. The group asked why these well s were exempted and could individual well characteristics such as VOC content be used as a threshold rather than a categorical exemption. EPA stated that they were soliciting comment on these wells, and would review any sug gestions by the group on these and other low VOC wells.

The next topic from the submitted list addressed VOC emissions from wellheads during production. The group noted that the WRAP III Oil & Gas 2006 inventory estimated well venting

- blowdown emissions to be 11,995 tons of VOC and should have been included in the proposed rule. EPA stated that they welcomed comment on this issue.

The next topic from the list asked whether EPA intends to provide implementation tools to help industry and states determine applicability and requirements for the proposed rules. EPA st a ted that they believe outreach and implementation tools will be developed for these rules.

The last topic in from the list of questions asked why SO 2 emissions from flaring and other

upstream operations were not considered for these rules. EPA asked the group to submit

comments on SO 2 emissions if they should be included in the final rule.

EPA then stated that the comment period closes on October 31, 2011 , which is 30 days after the last p ublic hearing. The group asked about the 1

- year extension for the final rule that was requested by industry. EPA responded that they are under a court ordered deadline ( February 28,

2012 ) to finalize the rule and they do not believe the litigants will ag ree to a year

- long extension.

The groups asked what were the major changes to subpart HHH. EPA responded that the main change is the emission limits for small glycol dehydrators. EPA also stated that they have

removed the 1 ton per year benzene exemptio n for large dehydrators.4

A member from CO asked if the leak definition of 5,000 ppm in §60 .5401(b)(2) was correct. EPA responded that this leak definition should be 500 ppm and asked that this issue be included

in their comments. Another member asked wh y the sampling connection systems in § 60.5401(c) are exempt from the requirements in § 60.482

- 5a. EPA answered that this exclusion was originally in subpart KKK and was carried over to the proposed NSPS.

The next issue that was discussed involved the requirements for storage vessels in non

attainment areas and how the thresholds were determined. The states have different requirements for storage vessels depending on whether they are located in an attainment or non

attainment area. EPA stated that tha t have already received a few comments on this issue and

that the emissions are the common factor in those comments

. EPA asked what thresholds are used by states to determine if the storage vessels should be controlled. One member replied non

attainment areas require 95% control, and the average control is approximately 90%. Another member replied that MT has a statewide 15 tpy cutoff. Another member stated that WY has an 8 tpy cutoff statewide. EPA noted that they did not have the background data from CO that were used for the cutoffs and asked WESTAR if any of their members could provide the data.

WESTAR asked if there was a distinction between condensate and crude oil in the proposed

rules. They noted that many of the states define condensate at 40° API gravity. A member from WY noted they used the 40° API gravity in the past, but now define liquid at the wellhead as crude oil and gas at the wellhead as condensate. EPA asked the group to submit input on the storage vessel definition and thresholds for storage vessels. A member of the group asked what were the differences between storage vessels and affected storage vessels. They noted that the definition for storage vessels includes stora ge vessels that are manifolded together, but the throughput is on a per tank basis. EPA asked for comments on the definitions.

The group asked for clarification on the applicability of well sites in the proposed rule. They noted that the definition impl ies one well. EPA clarified that completions apply at each

wellhead.

The next topic that was discussed was the exemption of completions for wildcat, exploratory,

and delineation wells and whether there were economic exemptions based on feasibility

. EPA responded that feasibility was built into these types of well definitions. EPA referred to cut offs for applications used in Colorado’s regulations, but the background information regarding where the cut offs were developed was not available. WESTAR agree d to research this issue and respond. EPA stated that they do not have much data and asked for comment on completions.

EPA expressed the need for data on completions in order to develop and support a regulation for completions.

The group asked EPA how t he implementation of the rule would affect regional offices and

T ribal sources. EPA stated that permitting of these sources can be a burden for the regional offices. EPA will develop compliance guides to assist these offices with permitting.

The group asked if EPA intended to require green completions for oil or conventional wells. EPA stated that they looked at this issue, but were unable to find significant VOC emissions from these sources. The representatives from ND responded that they did not ha ve any5

documentation on the emissions from oil wells there. Another group member stated that the oil industry have stated that this information is proprietary. EPA also clarified that reduced emissions completions are required for hydraulically fractured well only, and that these sources had the highest emissions.

EPA requested information on innovative approaches for compliance and third party verifications. EPA stated that they want to encourage innovation of pollution prevention concepts for the oil and gas industry. EPA stated they will send a list of comment solicitations that were compiled from the proposed rules to Bob Lebens to distribute to the group.6 Attachment A

Email submittal of Questions for 10/4/2011 Meeting with EPA7

From: Bo b Lebens <blebens@westar.org>

To: Bruce Moore/RTP/USEPA/US@EPA, Alex Macpherson/RTP/USEPA/US@EPA, David Cozzie/RTP/USEPA/US@EPA, Oil & Gas Work Group

Date: 09/30/2011 06:58 PM Subject: Questions for O&G NSPS/NESHAPS call next Tuesday

All,

Below are the questions/comments I've received from two people for our call next Tuesday, October 4, at 11 AM Mountain. If you have other questions/comments for EPA, please feel free to send them to me or to the whole group.

Th e call

- in number is: 800.244.9194 and the access code is: 107484.

Bob

1) On 76 FR 52765, paragraph starting "For the subpart VVa level of control": The cost

effectiveness for valves and open

- ended connectors increased with a longer monitoring frequency? If the source monitors less often, I would expect the costs to come down. Perhaps EPA staff can explain this better.

2) In 60.5420(b)(2)(iii) requires submittal of records from 60.5420(c)(1). 60.5420(b)(2)(i) and (ii) request the same information covered in 60.5420(c)(1). This is duplicative. Is there a reason? This seems to be a problem throughout this reporting section.

3) 60.5420(b)(5)(1) requires reporting of pneumatic controllers installed. Is this during the reporting period or sinc e the rule became effective? Just a clarification.

4) 60.5420(b)(5)(iv) "each controllers"

- typo. :)

5) In 60.5395(a), storage vessels must meet standards if the condensate throughput is 1 bbl/d or more, or if the crude oil throughput is 20 bbl/d or mo re. In 60.5420(b)(6)(ii), the source must document that the crude oil throughput is less than 21 bbl/d. Is this a typo?

6) In 60.5420(c)(5)(iii), the discrepancy between 20 bbl/d and 21 bbl/d occurs again.

7) In 60.5430, the definition of "Flare" specifically excludes enclosed flares. The preamble

was not clear on the reason for this. (I believe this was also mentioned during the Denver hearing.)

8) In the preamble to Subpart OOOO, EPA stated that the condensate and crude throughput levels corresponded to approximately 6 tpy of VOC from each affected storage vessel. In 60.5430, the definition of "Storage vessel" only included those tanks with emissions of 10 tpy or more of VOC. This leaves those vessels between 6 and 10 tpy undefine d.8

____

• Proposed rule p. 52758(FR), "We solicit comment on criteria and thresholds that could be used to exempt some well completion operations occurring in coalbed methane (CBM) reservoirs from the requirements for subcategory 1 wells." (based on a surv ey in 2006) Approx half the gas production and Approx 4,000 of 20,000 total gas wells in San Juan County are CBM. What is the idea behind the CBM well exemption? Will individual well characteristics including VOC content gas analysis for CBM wells be used rather than a categorical exception.

• Proposed rule p. 52760(FR), "As discussed below in section VI.B.1.e, VOC emissions from wellheads are very small during production and account for about 2.6 tons VOC per year. We are not aware of any cost effective co ntrols that can be used to address these relatively small emissions." WRAP Phase III O&G 2006 inventory for South San Juan Basin estimated well venting

- blowdown emissions to be 11,995 tons VOC compared to venting

- completion emissions of 12,418 tons VOC. B Lowdowns are a significant source. Gas STAR has some techniques for reducing emissions from blowdowns. Why was this category not included in rules? Also, I could not find section VI.B.1.e.

• Implementation tools designed by EPA to help industry and state s determine applicability and requirements (along the lines of the Quad Z implementation tools) would be useful.

• Why were SO2 emissions from flaring and other upstream O&G operations not

c onsidered.

--

Bob Lebens

WESTAR

503.478.4956