1 Summary of Meeting with the American Petroleum Institute (API) Regarding the Proposed Statio nary Existing RICE NESHAP May 14, 2009

Attendees

Peter Tsirigotis, EPA Janet Bounds, Chevron Bob Wayland, EPA Clay Freeberg, Chevron Michael Horowitz, EPA Tom Monahan, ExxonMobil Melanie King, EPA (by phone) Jena Martin, ExxonMobil David Cozzie, EPA (by phone) Jack Maley, Exterran Tanya Parise, AGTI (by phone) Gerald Meinecke, Exterran Stephanie Meadows, API Dan Salgado, KinderMorgan Matt Todd, API Carol Butero, Kinder Morgan Jim McCarthy, IES Terri Stil lwell, Magellan Pipeline Jeff Panek, IES Jenny Yang, Marathon Jeff Adams, BP Charlie Bennett, Marathon Randy Poteet, ConocoPhillips Jason Clark, Devon Clint Gill, ConocoPhillips Jeff Fincher, Colonial Pipeline Russell Wozniak, Dow

Purpose of Meeting

The purpose of this meeting was to di scuss the proposed national emission standards for hazardous air po llutants (NESHAP) for existing stationary reciprocating internal combustion engines (RICE). The proposed NESHAP for existing stationary RICE was published in the Federal Re gister on March 5, 2009 (74 FR 9698).

Summary of Meeting

General

The American Petroleum Institute (API) requested this meeting with EPA to discuss the recently proposed NESHAP for st ationary engines. API has previously worked with EPA on other rulemakings affecti ng stationary engines. A slide presentation of issues was provided to EPA by API and is included as Attachment 1 to this meeting summary. The summary of this meeting will be available in the docket for this rulemaking (Docket ID N o. EPA-HQ-OAR-2008-0708).

Stephanie Meadows opened the meeting by st ating that API has serious concerns with the proposed rule and th erefore wanted to meet with EPA to discuss its concerns. API expressed that it wished to work with EP A on the issues before final development of the rule. In general, API was surprised of the magnitude of the rule in terms of engines that would be covered. For example, API did not expect that all stationary engines would be covered. Specifically, API was referring to stationary natural gas engines, which API did not realize would be addressed with th e existing diesel engine rulemaking. In addition, API noted that the pr oposed rule threw in more e ngines in the upstream sector, that engines are going to have difficulties meeting the emission limits, and that the tight2 schedule of the rule is a problem. Other ge neral comments API had were that it is a complex rulemaking and asked how EPA harmoni zes the rule with ot her engine rules. Lastly, API suggested that EP A re-negotiate the timing on the consent decree with the litigant.

Specific Issues

The specific issues that API discussed dur ing the meeting are described below. Further details on thes e issues and a complete list of API’s issues can be found in Attachment 1.

1. Area Sources

One of the main concerns API has re garding the proposed standards for area sources is that stationary engines at these lo cations need alternative standards. Also, API expressed that EPA should look at the health effects associated with stationary engines located in rural areas. In ge neral, members do not install engines in the vicinity of people, according to API. It was suggested by API that one option could be to consider the distance of a source from residents. In addition, API pointed to 40 CFR part 63, subpart HH, where EPA promulgated a different approach with regards to area sources in urban and rural areas. As far as the standard s are concerned, API indi cated that catalysts should not be required for engines in rural ar eas. Engines in these locations are not visited frequently, the engines are located as far as 1 hour away, and the engines at rural areas are not located closely together. Acco rding to API, members have no issue with installing catalysts on engines in urban areas. EPA asked how the engines are identified. According to API, for about 90 percent of the en gines it is clear what the engines are, i.e., if they are rural or urban sources. EPA point ed out that every engine at an area source needs a standard. Such standard could be a work practice standard, EPA said, and wanted to know what specifi c practices API recommended.

2. Emission Limits

API stated that there is limited and flaw ed test data for the number of engines affected by the proposed rule. Actual operati on, load shifts, backpressure, and so on have not been taken into account in the rule, according to API. Additional time is needed in order to collect sufficient and appropriate data for the rule, API said, and indicated that it is in the process of collecti ng emissions data. EPA pointed out that it needs to link any rule extension to the collection of information and that API should come up with a plan to put the information and emissions data together . API noted that it is primarily focused on getting gas-fired data and again added that it was not clear on the fact that gas-fired engines would be affected by the rule until the February 2009 signature date. According to API, some engines will not be able to co mply with the rule with retrofits and some limits that EPA expects will be met without ad d-on controls will require add-on controls. API added that almost all engines affected by the rule will require add-on controls to meet the limits. API mentioned that slow sp eed engines that may be 30 to 40 years old will have to do a lot of work before add-on controls can even be considered.3 According to API, a 90 percent reducti on is not attainable for many engines subject to the proposed rule. This topic wa s not extensively discu ssed during the meeting and more information on API’s concerns can be found on page 4 of Attachment 1.

Regarding the above-the-floor analysis , API thought that the costs were not appropriate. In addition, API wanted to know what the acceptable cost per ton range is for making regulatory decisions . EPA indicated that it co uld not give API a specific number or range, but that cost per ton is so mething that is looked at on a case-by-case basis.

3. Maintenance Practices

Regarding the proposed maintenance practi ces that certain sta tionary engines are subject to under the proposed rule, API was of the opinion that so me of the specific maintenance practices provided in the rule ar e not appropriate. API said that it was supportive of the concept, but that it was not in agreemen t on the specific requirements such as the frequency of maintenance.

4. SSM Limits

The proposed startup, shutdown, and ma lfunction (SSM) limits cause compliance uncertainty and are too stringent, in API’s opinion. EPA said that it did not have any information showing that emissions data w ould be different duri ng periods of startup versus normal operation. EPA noted that it received the court decision affecting SSM limits just prior to the rule being proposed a nd did not have much time to investigate this issue. API indicated that it could take time for an engine to equilibrate and asked how sources are supposed to measure emissions during malfunctions. It was suggested by API that maintenance practices be implemented instead of specific limits for SSM periods. EPA noted that it will continue to work on this issue between proposal and promulgation.

5. Rich Burn Add-On Controls Threshold

Concerning rich burn engines, API indicated that it believ es that the threshold for requiring add-on controls should be higher. According to API, small rich burn engines are less stable and air-to-fuel ratio controller s have difficulties controlling them. Also, a shorter catalyst life is associated with sm aller rich burn engines, according to API. Finally, API indicated that the costs that EPA esti mated for the proposal are underestimated. EPA asked API to provide cost information and that it will take a look at it for the final rule.

6. Diesel Engines

API said that a steady-state rule makes it hard to come into compliance for diesel engines used for variable operation. Certain diesel engines also have short-term usage periods and some diesel engines will never r each full load. According to API, a limited use category would be appr opriate in the rule.4 7. Timeline/Next Steps

As mentioned, API thought that more time is needed for a workable final rule. API is working on gathering existing formalde hyde emissions data and is also collecting new emissions data. EPA said that API s hould not rely on a rule extension and should prepare its comments and get data to EPA as soon as possible.5 Attachment 1 Existing Engine NESHAP Presentation by API



# Existing Engine NESHAP 40 CFR 63 Subpart ZZZZ Amendments

EPA Meeting at API Offices Washington D.C. May 14, 2009



# Summary of Concerns

 

### Alternative Standards are Needed for Area Sources

 

### Most Engines Cannot Achiev e Emission Limits and 90% Reduction is Unattainable for Many Engines

MACT Floor Determinations Are Based On Too Few Data Points Beyond The Floor Analysis Cost per Ton is Significantly Under-estimated

 

### Maintenance Practices Are Not Tied To HAP Emissions and Event Frequency Is Unreasonable

 

### SSM Limits Cause Compli ance Uncertainty and Are Unproven

 

### RB Catalyst Threshold Should be 250 HP or higher based on beyond the floor analysis

 

### Diesel Engine Concerns6 

## Alternatives are Needed for Area Sources

 

## Area Source Standards Directed at Urban Human Health Risk

 

## Engines Demographics Similar to O&G MACT Significant population eng ines located outside urban cluster

 

## Unattended & Remote Operations

 

## Alternative Options Available Under Section 112(h) Should Be Considered

 

## Liberal Use of GACT Management Practices

Emission Limits and 90% Reduction are Unattainable for Many Engines

 

### Limited & Flawed Test Data for # Engines Affected

 

### Floor Determination Ignor es Actual Operations Reduced load, exhaust temp & back pressure, and swing loads Floor only considers high load conditions

 

### 90% Reduction Not Supported by Data

 

### Many Engines Unable to Meet Limits Many “uncontrolled” will require catalyst to meet limits. e.g. 2SLB slow speed engines

 

### Catalyst & Engine Life may be Shortened e.g. Oil consumption fouls catalyst7 

### Mandatory Maintenance Practices and Frequency

 

### Relationship Between Work Practices and HAP Emission Must Be Established Spark plug replacement – Appropriate, Design vs. Life expectancy

 

### Alternative Options Available Under Section 112(h) Should Be Considered

 

### Operator O&M Consistent With NSPS Requested Oil Change & Inspections – Integrity related

 

### At Minimum, Frequency Needs to Be Addressed e.g., Oil Change EVERY 8 DAYS is Proposed! Allow alternative frequency, i.e. performance metric based



## SSM Limits Cause Compliance Uncertainty and Are Too Low

 

## Await Outcome and Court Resolution of Pending Petitions

 

## SSM Emission Limits for Engines Impractical Limits equivalent to MACT Floor Limits e.g. Steady state best performing limit vs cold start emissions

 

## No Data on SSM Emissions

 

## How Can Title V Compliance Be Certified?

 

## Alternative Options Available Under Section 112(h) Should Be Considered

 

## SSM Plan Work Practi ce is Appropriate8 

### RB Catalyst Threshold Should be Higher

 

### RB Engines have Low Formaldehyde

 

### Small RB – Less Stable AFRC (KSU Study)

 

### Shorter Catalyst Life Expectancy Impacts Cost Analysis

 

### RIA only includes catalyst cost for $/ton value Does not include all equipment, monitoring recordkeeping, reporting, catalyst replacements, etc. EPA Beyond the floor $/ton analysis significantly underestimates costs



## Diesel Engines Issues

 

## Swing Loads Engines Including Drill Rigs, Cranes, Pumps Are Not Candidates For Steady State Regulation

 

## Technical Feasibility of Stacked Controls

 

## Diesel Fuel Quality and ULSD

 

## Limited Use Engine Category – less than 500 hours9 

## Rulemaking Timeline and Next Steps

 

### More Time Needed for Workable Final Rule

 

### Short Timeframe and Si gnificant Data Needs

 

### Adequate Catalyst Pe rformance Testing Equipment and Testing Personnel is not Available to meet Demand

 

### Ability to Introduce Data and Information Into the Docket Following Comment Period

 

### Lock Down Date For Additional Input to Finalize Rule

 

### Request Additional Meeting After Close of Comment Period – July 2009