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/R Incorporated Providing Environmental Technical Support Since 1989

_________________________________________________________________________________________

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514

Telephone: (919)484-0222  Fax: (919) 484-0122

MEMORANDUM

Date: January 5, 2011

Subject: Summary of the Conference Call between the EPA and American 

Petroleum Institute on January 5, 2011

From: Denise Grubert, EC/R Incorporated

To: Bruce Moore, EPA/OAQPS/SPPD/CCG

I. PURPOSE

This memorandum summarizes the January 5, 2011 phone call between the Environmental 

Protection Agency (EPA) and industry representatives from the American Petroleum Institute 

(API). The intent of the call was to update API on the current timeline and give them an 

opportunity to raise questions and concerns. 

II. DATE

The meeting took place on January 5, 2011 at 1:00pm (ET) on a phone line arranged by the EPA.

The call lasted approximately 90 minutes.

III. ATTENDEES

The following individuals called the conference line:

Industry Representatives

American Petroleum Institute: Kathy Kalisz

 Matt Todd

 John Wagner

British Petroleum: Jeffrey Adams

Chevron: Janet Bounds

Clay Fleeberg

 Shankar Ananthakrishna

ConocoPhillips: Clint Gill

Devon: Darren Smith

Encana: Cindy Allen

Enterprise: John Columbo

John Fields

ExxonMobil: Tom Monahan
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/R Incorporated Providing Environmental Technical Support Since 1989

_________________________________________________________________________________________

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514

Telephone: (919)484-0222  Fax: (919) 484-0122

Bob Morehouse

Robert Nolan

Marathon Oil: Jenny Yang

Shell: George Deeley

U.S. Environmental Protection Agency (EPA/OAQPS/SPPD/CCG)

Alex McPherson

Bruce Moore

David Salman

Jodi Howard

Nick Parsons

Rachel Agnew

EC/R Incorporated

Heather Brown

Denise Grubert

Brad Nelson

IV. SUMMARY OF DISCUSSION

Bruce Moore began the call by thanking everything for participating in the call and started 

discussing the current deadlines, current timeline for events. There is a meeting with Gina 

McCarthy, the Assistant Administrator, on Friday, January 7, 2011. Options selection with the 

work group will be held on the 1/14.

EPA stated their desire to maintain a sense of “pragmatism” about what is realistic to do and 

cost-effective. Without going into any details, EPA representatives maintain they feel the 

options they have come up with are very cost-effective. 

A question was asked about what value is considered cost-effective. EPA answered that the 

VOC cost-effectiveness has typically been lower than the HAP emissions cost-effectiveness. 

Bruce responded that $3,000 to $5,000 per ton has been allowed in the past. Savings have been 

developed considering the benefit of additional methane added to the sales line when 

appropriate, but costs will also be presented without this benefit. The social cost of carbon is not 

factored in the cost analysis of the rule, but we are going to be consistent with the direction the 

Agency is going in regards to carbon. It will possibly be included in the preamble. 

Another question was asked about the projected amount of emissions reductions projected in the 

proposal. EPA responded on the order of thousands of VOC and a few million in methane cobenefits. 
E

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/R Incorporated Providing Environmental Technical Support Since 1989

_________________________________________________________________________________________

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514

Telephone: (919)484-0222  Fax: (919) 484-0122

A question was raised whether EPA was aware of the limitations of green completions. EPA 

answered that we believe we do understand. Late in the call, this topic was revisited and API 

recommended reviewing Wyoming’s green completion permit for reference. API also provided 

the following limitations:

 Proximity to pipelines

 Inert gas concentration

 Proper pressure. 

A question was raised from EPA to API regarding inert gas concentration. This is caused during 

energized fracs, which are becoming common especially in tight sand formations, when carbon 

dioxide and nitrogen are pumped into the well. The initial flowback will contain a high

concentration of inert gas and will, therefore, not be considered sales line quality. 

The subject of leak detection and repair was mentioned since it can be troublesome outside of 

processing plants and EPA would like to find some type of alternative. For example, Directed 

Inspection & Maintenance, which is less burdensome and more meaningful to remote locations. 

EPA would like to minimize vehicle miles and man hours if it is possible and still reach 

emissions reductions. 

A question was raised about what is being regulated. EPA indicated, that rules are being 

proposed for the NSPS and the MACT. He did indicate the possibility of the CTG, which would 

affect more sources in non-attainment areas. Since the residual risk is not finalized, EPA would 

prefer to not discuss any of the preliminary results during this call. 

Tom Monahan from Exxon asked if EPA was considering having criteria to incentivize 

innovation in reducing emissions. EPA said it will not be in the provisions in the rule, but EPA 

plans to seek comment on this issue. EPA wants to encourage innovation. There should be 

some trial period of that technology where you would be considered to be in compliance with the 

rule. David Salman from EPA discussed the general provisions, which does allow a new 

technology with lower cost to be implemented if it can meet the minimum emission reductions as 

the rule. API members raised caution because many times, the regions need to approve this and 

it is not always easy to obtain permission. It would be more helpful if an approval could be 

made through a State Agency or another streamlined approval process. Within the context of the 

innovative technology waiver, if this is granted than that technology is no longer considered 

innovative for future use. Policy has been issued for PSD that more than one might be allowed 

under certain circumstances.

There are frequently multiple ways of controlling some of these sources. EPA is mostly looking 

at performance standards but that some are equipment standards. API wanted to ensure EPA 

realizes there are many factors that cause technologies to be inapplicable. EPA said if something 

is wrong in our understanding, you will have time to provide comment and correct us. Ideally, 

EPA would like to catch any issues early, as is the purpose for these calls. 
E

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/R Incorporated Providing Environmental Technical Support Since 1989

_________________________________________________________________________________________

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514

Telephone: (919)484-0222  Fax: (919) 484-0122

Brick issues in the MACT will be corrected. API asked if more tanks would be included and 

EPA responded yes. Another question focused on dehydrators. With respect to the 1-tpy of 

benzene threshold, exemption was not supported by the MACT floor so it may be converted to a 

limit and EPA is also looking into throughput as well.

At this time, EPA is looking at degassing from centrifugal compressor seals although in some 

cases there are relatively low VOC emissions. This is the same for rod packing too. 

API was concerned whether promulgation would be extended if the proposal date changed. EPA 

said they could not comment as nothing is confirmed yet. API is concerned with the length of 

the comment period if extension is granted. EPA said 60 days is typically given for public 

comment and those are the current intentions. EPA also indicated that more than likely they will 

hold several public hearings and the comment period must remain open for a certain time after 

the last hearing is held. 

API raised additional concern with the 1 tpy of benzene exclusion on dehydrators. This causes 

conflict with a State’s New Source Review permitting programs. This makes it difficult to 

include existing dehydration units as part of the NESHAP. As a result, thousands of dehydrators 

would have to be permitted. Therefore, the emissions threshold is an important aspect of the 

exemption. In addition, many dehydrators are area sources and API is concerned about having to 

have an emission limit for every source, particularly for these small area sources. API restated 

this exemption is fairly important because if there is a requirement under the NESHAP it causes 

NSR permitting problems. EPA asked if there is an existing source that has a permit, does 

becoming subject to the rule require them to re-apply for a permit. The response was that it 

depends on the permitting authority.

Another question was posed about well venting for liquids unloading. API is concerned since 

the Natural gas STAR focuses on plunger lifts. This is just one option that can be used over the

lifetime of a well. EPA is currently focusing on plunger lifts. API stated this does not 

necessarily solve the venting problem. During the beginning of production liquids lift on their 

own, then perhaps velocity strings are used. EPA stated it is planning to build in criteria to allow 

other liquid lift measures and perhaps, as long as emissions are controlled. Bruce requested 

more information on this issue.

API also raised a question on the effective date of the NSPS. Typically, sources built after the 

proposal date will be subject to the rule. Since well construction takes place over a relatively 

short time period, this definition may not apply. EPA has discussed this topic and formalizing a 

way to address this issue. 

API asked about 112(n)(4)(b), which states that well heads are exempt and provides steps 

required to regulate them. At this time, well head and Christmas tree will not be included in the 

rule. You would have to “kill” the well in order to repair the leak. 
E

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/R Incorporated Providing Environmental Technical Support Since 1989

_________________________________________________________________________________________

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514

Telephone: (919)484-0222  Fax: (919) 484-0122

API wondered if there is no extension is there another option. EPA responded that the Agency is 

progressing as if there is no extension. 

In regards to produced water ponds, EPA plans to ask for comment since there is not enough 

available emissions data to propose measures at this time.

Tanks and thief hatches were then discussed. EPA understands that all tanks cannot have 

controls on them so this will not be required as we do not want to ruin the integrity of the tank.

API responded that the integrity of the tank does not matter. API does not feel there is a 

difference in emissions if the thief hatch is open or closed because all tanks have a vent system 

anyway. If the hatch is sealed, the tank vent will have a larger plume versus the hatch. EPA 

asked whether there was documentation to show this, especially when flashing occurs. API 

believes the physics of the tank should prove this is true since there is always a positive pressure 

condition in the tank. Devon Energy has been able to convince regulators that having the hatch 

open does not increase the quantity of emissions.

The call ended by Bruce thanking everyone for the information they provided. API requested 

information regarding the decision of the extensions once a decision has been made final. The 

call ended at approximately 2:30pm.