# 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 6

, 20 11

, Teleconference with the Sierra Club and the

U.S. Environmental Protection Agency to D iscuss the Proposed Oil & Gas NSPS/NESHAP

I. INTRODUCTION

The Sierra Club 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 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

U .S. Environmental Protection Agency

Bruce Moore Greg Nizich Alex Macpherson

Sierra Club Craig Segall
Bruce Buckheit
Darin Schroeder Ranajit Sahu
Praveen Amar
David McCabe Robin Cooley Cindy Copeland
Nathan Matthews2

EC/R Incorporated
Heather Brown
Denise Grubert Bradley Nelson

III. SUMMARY OF DISCUSSION

Craig Segall opened the meeting by stating that the purpose of the call was to understand the decisions that were made by EPA on the proposed rules , and to discuss how these rules will be
enforced. He f

urther stated that this is an important rule to reduce methane fugitive emissions. Bruce Moore stated that the proposed rules are currently still in the comment period and EPA could answer questions and provide clarifications , but could not provide any re sponses to comments on the proposed rules.

The first question that was asked by the Sierra Club was why EPA decided in the proposed rules
to control volatile organic compounds ( VOC ) emissions rather than methane. EPA stated that they believe that m any of the proposed requirements for control of VOC emission s that were
determined to be cost effective also control methane emissions. The Sierra Club asked if there were technical reasons why VOC was being used for the proposed rule. A member of the Sierra Club group suggested that EPA require a leak definition based on total hydrocarbons rather than VOC. EPA asked the group to provide comment on the types of analyzers that measure hydrocarbons from equipment leaks.

The Sierra Club asked if there was a VO C cost per ton threshold that determined wh ich control options were cost effective. EPA responded that this rule was an ozone driven regulation and each control option was evaluated separately. EPA further stated that there was no set cost per

ton thresh old that determined if a control option was costs effective. A Sierra Club member stated if methane was included that more control options may have been determined to be cost effective. Another Sierra Club member asked what is the reactivity of methane. EPA responded by acknowledging that methane is an ozone producer, but EPA has not developed any quantitative studies related to methane cost effectiveness as a precursor to ozone.

The next question asked by the Sierra Club was regarding the scope of so urc e coverage in
section 111(d) for VOC from centrifugal compressors. EPA stated that based on information
from the Natural Gas S TAR , the replacement of wet seals with dry seals is common industry practice. The Sierra Club asked if flares could be used t o control emission from wet seals. EPA responded that they requested comment from industry on situations where wet seals would be required for centrifugal compressors.3

A Sierra Club member asked what was the timing basis for the rod packing replacement for reciprocating engines. EPA responded that based on information from Natural Gas S TAR the replacement period was between 3 to 5 years. Therefore, EPA used 26,000 hours as the basis for rod packing replacement which is just under 3 years of operating t ime. Another member asked if leak detection and repair (LDAR) procedures could be used for reciprocating engines. EPA responded there are some issue s with using an LDAR approach to measure emission s from rod packing due to back pressure. EPA further stated that they requested comment on setting of thresholds for individual compressors. A Sierra Club asked if optical LDAR or other techniques would work for detecting leaks from reciprocating compress or rod packing. EPA stated that
leaks occur from all compressor rod packing; therefore the optical imaging equipment would always see leaks from compressor rod packing. Monitoring for pressure drop in the compressed

gas would also not find leaks because t here is no noticeable pressure drop when the leak
increases.

The Sierra C lub asked about the requirements for existing wells, specifically if recompletions were considered to be modifications. The g r oup also asked if refracking an existing well would
be considered a modification. A member of the group believes that the industry will state the there is no emission change when a well is refracked. EPA answered that the proposed rule is based on the §60.2 definition of modification , which includes a capit al expenditure requirement of 10 percent of the original cost for the well. Because of this definition, EPA does not expect existing wells to become new sources. A member of the Sierra Club stated that capital expenditures should not apply for these exis ting wells. EPA suggested that they include this
issue in their comments.

A Sierra Club member suggested that high bleed controllers should not be allowed under this rule and asked if EPA had information or data on the equipment life of these units. EPA replied that they did not have any data with respect to the equipment life of high bleed controllers.

A member asked if the industry was concerned with the costs of separators and the requirements for reduced emissions completions (REC). EPA answered th at industry is already using separators and that they sell the collected liquids as condensate. EPA stated that they observed separators on a skid that can be driven from well to well when needed. A member asked if EPA had emissions or cost data on produ ced water from these wells. EPA answered that they had no data on produced water and suggested the group add this issue to their comments.

A Sierra Club member asked whether EPA looked at cases where small throughput tanks were located with large throu ghput tanks. EPA replied that that it was not cost effective to apply controls on tanks with throughputs less than 1 barrel per day. However, EPA stated th at emission rates were being considered as a threshold for tanks. EPA also stated that since only4

condensate and oil tanks were specified in the proposed rule, produced water tanks could not be
included in the final rule.

A mem ber of the Sierra Club asked if EPA found any cost difference between controlling existing tanks with flares or a vapor recove ry unit (VRU). EPA responded that they saw no cost difference between the two control options.

The Sierra Club asked if EPA had any information on the composition of the emissions or control effectiveness from a pit flare or flare. EPA responded that they did not have any
information on the emissions from either of the flares. EPA did not e that a VRU could not be used in all applications; therefore a flare would be the only option. EPA stated that they would
discuss this issue with the EPA Office of Research and Development (ORD). A Sierra Club member stated that it is difficult to measure emissions from a flare, and asked if oxidizers or
afterburners were considered. EPA replied that the proposed rule requires the use of enclosed flares, which have residence time in the combustion zone and can be tested. EPA stated that the enclosed flare would be certified by the manufacturer to be compliant with the proposed rule and
this would alleviate the burden of testing. A member of the Sierra Club suggest ed that EPA
include an audit program requirement with the manufacturer certification to ensure that the emission reductions are being achieved. EPA stated that the Sierra Club should include this suggestion in their comments.

The next topic that was dis cussed was enforcement. A Sierra Club member asked what an inspector need ed to prove in order to show a violation. EPA recognized that some of the
definitions are objective . A member of the Sierra Club noted that they believe the definitions need to be more objective, with a couple examples being “fracking” and “refracking.” The member also noted that “workovers” were never defined in the proposed rule. EPA replied that

r efracking requires perforating the well casing or refracturing the rock. EPA also stated the need

to remove “ workovers ” from the proposed rules. EPA asked for definition suggestions for “high” volume and “high” pressure. A member of the Sierra Club sugg ested the test for refracking should be an engineering test or something that could be measured.

The next topic of discussion was pneumatics. A member of the Sierra Club asked what was meant by the term “ predicated ” in the requirements for pneumatic controllers. EPA stated that this requirement would allow the use of high bleed controllers on a case by case basis. A member of the Sierra Club suggested that the EPA provide a list of operations where high bleed

contr ollers could be used. EPA suggested that high bleed controllers are needed for emergency
situations.5

A Sierra Club member asked if a feasibility standard could be added to the proposed rules for delineated and wildcat wells that are in close proximity to the pipeline. EPA stated that they believed some states may already have requirements for this. A Sierra Club member stated that they were having difficulties finding some of the documents that were referenced. EPA asked the group to send a list of th e documents and they would make
them available. The Sierra Club also offered to provide assistance with issues being raised by industry if necessary.