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- 1 5.0 PNEUMATIC CONTROLLER S
The natural gas industry uses a variety of process control devices to operate valves that regulate pressure, flow, temperature, and liquid levels

. Most instrumentation and control equipment falls into one of three categories: (1) pneumatic; (2) electrical; or (3) mechanical

. Of these, only pneumatic devices are direct sources of air emissions. Pneumatic controllers are used throughout the oil and natural gas sector as part of the instrumentation to control the position of valves. This chapt er describes pneumatic de vices including their function and associated emissions

. Options available to reduce emissions from pneumatic devices are presented, along with costs, emission reductions, and secondary impacts

. Finally, this chapter discusses considerations in developing regulatory alternatives for pneumatic devices.

5.1 Process Description
For the purpose of this document, a pneumatic controller is a device that uses natural gas to transmit a process signal or condition pneumatically and that may also adjust a valve position based on that signal, with the same bleed gas and/or a supplemental supply of power gas

. In the vast majority of applications, the natural g as industry uses pneumatic controllers that make use of readily available high

- pressure natural gas to provide the required energy and control signals

. In the production se gment , an estimated 400,000 pneumatic devices control and monitor gas and liquid flows and levels in dehydrators and separators, temperature in dehydrator regenerators, and pressure in flash tanks

. There are around 13,000 gas pneumatic controllers located in the gathering, boosting and processing segment that control and monitor temper ature , liquid , and pressure levels

. In the transmission segment , an estimated 85,000 pneumatic controllers actuate isolation valves and regulate gas flow and pressure at compressor stations, pipelines, and storage facilities.

Pneumatic controllers are aut omated instruments used for maintaining a process condition such as liquid level, pressure, pressure differential, and temperatu re. In many situations across all segments of the oil and gas industry, pneumatic controllers make use of the available high

- pr e ssure natural gas to operate control of a valve

. In these “gas

- driven” pneumatic controllers, natural gas may be released with every valve movement and/ or continuously from the valve control pilot. The rate at which th e continuous release occurs is referre d to as the bleed rate. Bleed rates are dependent on the design and operating characteristics of the devic e. Similar designs will have similar steady

- state rates when oper ated under similar conditions. There are three basic designs: (1) continuous bleed de vices are used to modulate flow, liquid level, or pressure, and gas is vented continuously at a rate that may vary over time ; (2) snap
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- 2 acting devices release gas only when they open or close a valve or as they throttle the gas flow; and (3) self

- contained devices release gas to a downstream pipeline instead of to the atmosphere. This analysis

assumes self

- contained devices that release natural gas to a downstream pipeline instead of to the atmosphere have no emissions are not further discussed in this analy sis.
Bleeding p neumatic controllers can be classified into two types based on their emissions rates: (1) high

bleed controllers and (2) low

- bleed controllers

. A controller is considered to be high

- bleed when the continuous bleed emissions are in excess of 6 standard cubic feet per hour (scfh), while low

- bleed devices bleed at a rate less than or equal to 6 scfh. a
Snap

- acting controllers are devices that only emit gas during actuation and do not h ave a continuous bleed rate

. The actual amount of emissions from snap

- acting devices is dependent on the amount of natural gas vented per actuation and how often it is actuated. Bleed devices also vent a n additional volume of gas during actuation , in addition to the device‟s bleed stream

. Since a ctuation emissions serve the device‟s functional purpose and can be highly variable , t he emissions characterized for high

- bleed and low

- bleed devices in this analysis (as described in section 5.2.2) account for only the continuous flow of emissions (i.e. the bleed rate) and do not include emissions directly resulting from actuation. Snap

- acting controllers are assumed to have zero bleed emissions. M ost applications (but not all), snap

acting devices serve functionally different purposes than bleed devices. Therefore, snap

- act ing controllers are not further discussed in this analysis.

In addition , n ot all pneumatic controllers are gas driven. These “non

- gas driven” pneumatic controllers use sources of power other than pressurized natural gas, such as compressed “instrument air.” Because these devices are not gas driven, they do not directly release n atural gas or VOC emissions, but they do have energy impacts, with associated secondary impacts related to generation of the electrical power required to drive the instrument air compressor system. These non
- gas driven pneumatic devices are feasible only a t oil and gas locations where the devices can be driven by compressed instrument air systems and have electrical service suffic ient to power an air compressor. At sites without electrical service sufficient to power an instrument air compressor, only gas d riven pneumatic devices can be used. This analysis assumes that natural gas processing plants are the only facilities in the oil and gas

a The classification of high

- bleed and low

- bleed devices originated from a report by Pacific Gas & Electric (PG&E) and the Gas Research Institute (GRI) in 1990 titled “Unaccounted for Gas Project Summary Volume”. This classification was adopted for the Octo ber 1993 Report to Congress titled “Opportunities to Reduce Anthropogenic Methane Emissions in the United States”. As described on page 2

- 16 of the report, “devices with emissions or „bleed‟ rates of 0.1 to 0.5 cubic feet per minute are considered to be „h igh

- bleed‟ types (PG&E 1990).” This range of bleed rates is equivalent to 6 to 30 cubic feet per hour.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 3 sector highly likely to have electrical service sufficient to power an instrument air system, and that most existing ga s processing plants use instrument air instead of gas driven devices. 7 The application of electrical controls is further elaborated in Section 5.3

.
5.2 Emissions Data and Information

5.2.1 Summary of Major Studies and Emissions
In the evaluation of the emissions from pneumatic devices and the potential options available to reduce these emissions, nu merous studies were consulted. Table 5

- 1 lists these references with an indication of the type of relevant information contained in each study.

5.2.2 Representative Pneumatic Device Emissions
For this analysis, EPA consulted information in the appendices o f the Natural Gas STAR Lessons Learned document on pneumatic devices , 11 Subpart W of the Greenhouse Gas Reporting rule, as well as obtained updated dat a from major vendors of pneumatic devices

. The data obtained from vendors included emission rates, costs, and any other pertinent information for each pneumatic device model (or model family)

. All pneumatic devices that a vendor offered were itemized and i nquir ies were made into the specifications of each device and whether it was applicable to oil and natural gas operations. High

bleed and low

- bleed devices were differentiated using the 6 scfh threshold.
Although by definition, a low

- bleed device ca n emit up to 6 scf h, through this vendor research , it was determined that the typical low

- bleed device available currently on the market emits lower than the maximum rate allocated for the device type

. Specifically, low

- bleed devices on the market today ha ve emissions from 0.2 scf

h up to 5 scf

h

. Similarly, the available bleed rates for a high bleed device vary significant ly from venting as low as 7 scf h to as high as 100 scf

h. 1 , b While the vendor data provides useful information on specific makes and models , it did not yield sufficient information about the prevalence of each make and model in the population of devices which is an important factor in developing a representative emission factor.

b All rates are listed at an assumed pressure supply of 20 psig.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 4 Table 5

- 1 . Major Studies Reviewed for Consideration

of Emissions and Activity Data

Report Name Affiliation Year of Report Number of

Devices Emissions

Information Control

Information Greenhouse Gas Mandatory Reporting Rule and Technical Supporting Document 1 EPA 2010 Nationwide X

Inventory of Greenhouse Ga s Emissions and Sinks: 1990

- 2009 2 , 3 EPA 2011 Nationwide/ Regional X

Methane Emissions from the Natural Gas Industry 4 , 5 , 6 , 7 Gas Research Institute / EPA 1996 Nationwide X

Methane Emissions from the Petroleum Industry (draft) 8 EPA 1996 Nationwide X
Methane Emissions from the Petroleum Industry 9 EPA 1999 Nationwide X

Oil and Gas Emission Inventories for Western States 10 Western Regional Air Partnership 2005 Regional X

Natural Gas S TAR Program 11 EPA 2000

- 2010 X XINTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 5 Therefore, f

or this analysis, EPA determined that best available emissions estimates for pneumatic devices are presented in Table W

- 1A and W

- 1B of the Greenhouse Gas Mandatory Reporting Rule for the Oil and Natural Gas Industry (Subpart W)

. However, for the natural gas processing segment, a more conservative approach was assumed since it h as been determined that natural gas processing plants would have sufficient electrical service to upgrade to non

- gas driven controls

. c Therefore, to quantify representative emissions from a bleed

- device in the natural gas processing segment, information from the EPA/GRI report d was used to estimate the methane emissions from a single pneumatic device by type. F urther distinction between high and low bleed could not be determined based on available data

. The basic approach used for this analysis was to fir st approximate methane emissions from the average pneumatic device type in each industry segment and then estimate VOC and hazardous air pollutants (HAP) using a representative gas composition

. 12 The specific ratios from the gas composition were 0.278 pound s VOC per pound methane and 0.0105 pounds HAP per pound methane in the production and processing segments, and 0.0277 pounds VOC per pound methane and 0.0008 pounds HAP per pound methane in the transmission segment.

Table 5

- 2 summarizes the estimated bleed emissions for a representative pneumatic controller by industry segment and device type

. The volume of gas emitted during actuation is not quantified in this analysis; therefore to be consistent with the comparison in emissions from the bleed devices, the bleed emissions from snap

- acting devices is estimated in this analysis as zero.

5.3 Nati onwide Emissions from New Sources

5.3.1 Approach

Nationwide emissions from newly installed natural gas pneumatic devices for a typical year were calculated by estimating the number of pneumatic devices installed in a typical year and multiplying by the est imated annual emission s per device listed in Table 5

- 2

. The number of new pneumatic devices installed for a typical year was determined for each segment of the industry including natural gas production, natural gas processing, natural gas transmission and storage, and oil production. The methodologies that determined the estimated number of new devices installed in a typical year is provided in section 5.3.2.

c EPA‟s approach taken for subpart W also assumed existing natural gas processing plants do not have bleed devices so no emission factor was developed for this segment. . d Table 4

- 11. page 56

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- 6 Table 5

- 2
. Average Bleed Emission Estimates per Pneumatic Device in the Oil and Natural Gas Secto r (tons/year) *

Industry Segment High

- Bleed Low

- Bleed Methane VOC HAP Methane VOC HAP
Natural Gas Production ‡ 6.91 1.92 0.07 3 0.26 0.07 2 0.003

Natural Gas Transmission and Storage ‡‡ 3.20 0.0 8 9 0.003 0.24 0.0 07 0.0002

Oil Production ± 6.91 1.92 0.07 3 0.26 0.07 2 0.003 Natural Gas Processing ±± 1.00 0.28 0.01 1.00 0.28 0.01

* The conversion factor used in this analysis is 1 thousand cubic feet of methane (Mcf ) is equal to 0.0208 tons methane

. Minor discrepancies may be due to rounding. ‡ Natural Gas Production methane emission s are derived from Table W

- 1A and W

- 1B of Subpart W. ‡‡ Natural gas transmission and storage methane emissions are derived from Table W

- 3 of Subpart W.
± Oil production methane emissions are derived from Table W

- 1A and W

- 1B of Subpart W. It is assumed only continuous bleed devices are used in oil production. ±± Natural gas processing sector methane emissions are derived from Volume 12 of the 1996 GRI report

. 7 Emissions from devices in the processing sector were determined based on data available for snap
- acting and bleed devices, further distinction between high and low bleed could not be determined based on av ailable data.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 7 5.3.2 Population of Devices Installed Annually
In order to estimate the average number of pneumatic devices installed in a typical year, each industry segment was analyzed separately using the best data available for each segment. For the natural gas production and oil production segments, t he number of new pneumatics installed in a typical year was derived using a multiphase analysis . First, d ata from the US Greenhouse Gas Invento ry: Emission and Sinks 1990

- 2009 was used to establish the r atio of pneumatic controllers installed per well site on a regional basis

. These ratios were then applied to the number of well completions estimated in Chapter 4 for natural gas well completions with hydraul ic fracturing, natural gas well completions with out hydraulic fracturing and for oil well completions. On average, one pneumatic device was assumed to be installed per well completion for a total of 33,411 pneumatic devices. By applying the estimated 51 percent of bleed devices (versus snap acting contr ollers), it is estimated that an average of 17,040 bleed

devices would be installed in the production segment in a typical year.
The number of pneumatic controllers installed in the transmission segment was approximated using the Inventor y of U.S. Greenhou se Gas Emissions and Sinks : 1990

- 2009. The number of new devices installed in a given year was estimated by subtracting the prior year (e.g. 2007) from the given year‟s total (e.g. 2008). This difference was assumed to be the number of new devices installe d in the latter year (e.g. Number of new devices installed during 2008 = Pneumatics in 2008

– Pneumatics in 2007). A 3

- year average was calculated based on the number of new devices installed in 2006 through 2008 in order to determine the average number of new devices installed in a typical year

.
Once the population counts for the number of pneumatics in each segment were established, this population count was further refined to account for the number of snap

- acting devices that would be installed versus a bleed device. This estimate of the percent of snap
- acting and bleed devices was based on raw da ta found in the GRI study, where 51 percent of the pneumatic controllers are bleed devices in the production segment, and 32 percent of the pneumatic controller s are bleed devic es in the transmission segment. 7 The distinction between the number of high

- bleed and low

- bleed devices was not estimated because this analysis assumes it is possible to predict or ensure where low bleeds will be used in the future. Table 5

- 3 summarizes the estimated number of new devices installed per year.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 8 Table 5

- 3
. Estimated Number of Pneumatic Device s Installed in an Typical Year
Industry Segment Number of New Devices Estimated for a Typical Year * Snap

- Acting Bleed

- Devices Total Natural Gas and Oil Production ** 16,371 17,040 33,411 Natural Gas Transmission and

Storage ‡ 178 84 262

* National averages of population counts from the Inventory were refined to include the difference in snap
- acting and bleed devices based on raw data found in the GRI/EPA study

. This is based on the assumption that 51 percent of the pneumatic controllers are bleed devices in the production segment , while 32 percent are bleed devices in the transmission segment.
** The number of pneumatics was derived from a multiphase analysis

. Data from the US Greenhouse Gas Inventory: Emission and Sinks 1990

- 2009 was used t o establish the number of pneumatics per well on a regional basis

. These ratios were applied to the number of well completions estimated in Chapter 4 for natural gas wells with hydraulic fracturing, natural gas wells without hydraulic fracturing and for oi l wells. ‡ The number of pneumatics estimated for the transmission segment was approximated from comparing a 3 year average of new devices installed in 2006 through 2008 in order to establish an average number of pneumatics being installed in this industry segment in a typical year

. This analysis was performed using the Inventor y of U.S. Greenhouse Gas Emissions and Sinks: 1990

- 2009

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- 9 For the natural gas processing segment, this analysis assumes that existing natural gas plants have already replaced pneuma tic controllers with other types of controls (i.e. an instrument air system) and any remaining high

- bleed devices that remain are safety related. As a result, the number of new pneumatic bleed devices installed at existing natural gas processing plants was estimated as negligible. A new greenfield natural gas processing plant would require multiple control loops. Chapter 8 in section 3.2.3 describes the number of natural gas processing facilities that are estimated for equipment leak detection. It is assume d that half of these facilities are new sites, or about 15 new processing sites.

5.3.3 Emission Estimates
Nationwide baseline emission estimates for pneumatic devices for new sources in a typical year are summarized in Table 5

- 4 by industry segment and device type. Since the number of low

- bleed versus high

- bleed could not be determined, it was assumed for the nationwide emission estimate that all bleed

devices have the high

- bleed emission rates estimated in Table 5

- 2 per industry segment.

5.4 Control Techniques
Although pneumatic devices have relatively small emissions individually , due to the large population of these devices installed on an annual basis, the cumulative VOC emissions for the industry is significant

. As a result, several options to reduce emissions have been developed over the years . Table 5

- 5 provides a summary of these options for reducing em issions from pneumatic devices including : instrument air,

non
- gas driven controls, and enhanced maintenance

. Given the various control options and applicability issues, the replacement of a high

- bleed with a low

bleed device is the most likely scenario fo r reducing emissions from pneumatic device emissions . Low

bleed devices are further described in the following section , along with estimates of the impacts of their application for a representative device and nationwide basis. Although snap

- acting devices have zero bleed emissions, this analysis assumes the devices are not always used in the same functional application as bleed devices and are, therefore, not an appropriate form of control for all bleed devices . It is assumed
snap
- acting, or no

- bleed, devic es meet the definition of a low

- bleed. This concept is further detailed in Section 5.5 of this c hapter. Since this analysis has assumed areas with electrical power have already converted applicable pneumatic d evices to instrument air system s, instrument ai r systems are also d escribed for natural gas processing plants only . Given applicability, efficiency and the expected costsINTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 10 Table 5

- 4 . Nationwide Baseline Emissions from Representative Pneumatic Device Installed in a Typical Year for the Oil and Natural Gas Industry (tons/year) *

Industry Segment Baseline Emissions from

Representative New Unit

(tpy) Number of

New Bleed Devices Expected Per Year Nationwide Baseline

Emissions from Bleeding Pneumatic (tpy) ** VOC Methane HAP VOC Methane HAP Oil and Gas Production 1.92 6.91 0.073 17,040 32,739 117,766 1,237
Natural Gas Transmission and Storage 0.089 3.20 0.003 84 8 288 0.2

* Emissions have been based on the bleed rates for a high

- bleed device by industry segment. Minor discrepancies may be due to rounding.
** To estimate VOC and HAP, weight ratios were developed based on methane emissions per device. The specific ratios used were 0.278 pounds VOC per pound methane and 0.0105 pounds HAP per pound methane in the prod uction and processing segments, and 0.0277 pounds VOC per pound methane and 0.0008 pounds HAP per pound methane in the transmission segment.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 11 Table 5

- 5
. Alternative Control Options for Pneumatic Devices
Option Description Applicability/Effectiveness Estimated Cost Range Install Low Bleed Device in Place of High Bleed Device Low

- bleed devices provide the same functional control as a

high

- bleed device, while emitting less continuous bleed emissions. Applicability may depend on the function of instrumentation for an individual device on whether the device is a level, pressure, or temperature controller. Lo w
- b leed devices
are , on average , comparable in price to the high bleed version. Convert to Instrument Air 13 Compressed air may be substituted for natural gas in pneumatic

systems without altering any of the parts of the pneumatic control

. In this type of system, atmospheric air is compressed, stored in a tank, filtered and then dried for instrument use

. For utility purposes such as small pneumatic pumps, gas compressor motor starters, pneumatic tools and sand blasting, air would not need to be dried

. Instrument air conversion requires additional equipment to properly compress and control the pressured air

. This equipment includes a compressor, power source, air dehydrator and air storage vessel. Replacing natural gas wit h instrument air in pneumatic controls eliminates VOC emissions from bleeding pneumatics

. It is most effective at f acilities where there are a high concentration of pneumatic control valves and
a operator present

. Since the system is powered by electric co mpressors, they require a constant source of electrical power or a back

- up natural gas pneumatic device. These systems can achieve 100 percent reduction in emissions. A c omplete cost analysis is provided in Sect ion 5.4.2. System cost s are dependent on siz e of compressor, power supply needs, labor and other equipment.

Install Non

Gas Driven Control Systems in place of Bleed device 14 Mechanical controls operate using a simple design comprised of

levers, hand wheels, springs and flow channels

. The most common mechanical control device is the liquid

- level float to the drain valve position with mechanical linkages

. Electricity or small electrical motors (including solar powered) have been used to operate valves. Solar control systems are driven by a solar power cells that actuate mechanical devices using electric power. As such, solar cells require some type of back

- up power or storage to ensure reliability. Application of mechanical controls is limited because the control must be located in close proximity to the process measurement

. Mechanical systems are also incapable of handling larger flow fluctuations

. Electric powered valves are only reliant with a constant supply of electricity

. Overall, these option s are applicable in niche areas but can achieve 10 0 percent reduction in emissions where applicable. Depending on supply of power, costs can range from below $1,000 to $10,000 for entire systems.

Enhanced Maintenance 15 Instrumentation in poor condition typically bleeds 5 to 10 scf

per hour more than repre sentative conditions due to worn seals, gaskets, diaphragms; nozzle corrosion or wear, or loose control tube fittings

. This may not impact the operations but does increase emissions. Enhanced maintenance to repair and maintain pneumatic devices periodicall y can reduce emissions

. Proper methods of maintaining a device is highly variable and could incur significant costs. Variable based on labor, time, and fuel required to travel to many remote locations.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 12 of the other options identif ied in Table 5

- 5 (i.e. mechanical controls and enhanced maintenance) , were not further conducted for this analysis.

5.4.1 Low

- Bleed Controllers

5.4.1.1 Emission Reduction Potential

A s discussed in the above sections, low

- bleed devices provide the same functional control as a high

bleed device, but have l ower continuous bleed emissions. As summarized in Table 5

- 6, it is estimated on average that 6.6 tons of methane and 1.8 tons of VOC will be reduced annually in the production segment from installing a l ow
- bleed device in place of a high

- bleed device. In the transmission segment, the average achievable reductions per device are estimated around 3.7 tons and 0.08 tons for methane and VOC, respectively . As noted in section 5.2, a low

- bleed controller can em it up to 6 scfh, which is higher than the expected emissions from the typical device available on the current market.

5.4.1.1 Effectiveness
There are certain situations in which replacing and retrofitting are not feasible, such as instances where a minima l response time is needed, cases where large valves require a high bleed rate to actuate, or a safety isolation valve is involved. Based on criteria provided by the Natural Gas STAR Program, it is assumed about 80 percent of high

- bleed devices can be repla ced with low

- bleed devices throughout the production and transmission and storage industry segments

. 11 This corresponds to 13,632 new high

bleed devices in the production segment (out of 17,040) and 67 new high

- bleed devices in the transmission and storage segment (out of 84) that can be replaced with a new low

- bleed alternative. For high

- bleed devices in natural gas processing, this analysis assumed that the rep laceable devices have already been replaced with instrument air and the remaining high

- bleed devices are safety related for about half of the existing processing plants

. Applicability may depend on the function of instrumentation for an individual device on whether the device is a level, pressure, or temperature controller

. High

- bleed pneumatic devices may not be applicable for replacement with low

- bleed devices because a process condition may require a fast or precise control response so that it does not stray too far from the desired set point. A slower

- acting controller could potentially result in damage to equipment and /or become a safety issue. An example of this is on a compressor where pneumatic devices may monitor the suction and discharge pressure and
actuate a re

- cycle when one or the other is out of the specified target range. Other scenarios for fastINTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 13 Table 5

- 6. Estimated Annual Bleed Emission Reductions from Replacing a Representative High

Bleed Pneumatic Device with a Representative Low

- Bleed Pneumatic Device

Segment/Device Type Emissions (tons/year) Methane VOC HAP Oil and Natural Gas Production 6.65 1.85 0.07 Natural Gas Transmission and Storage 2.96 0.082 0.002 Minor discrepancies may be due to rounding.
* Average emission reductions for each industry segment based on the typical emission flow rates from high

- bleed and low

- bleed devices as listed in Table 5

- 2 by industry segment

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- 14 and precise control include transient (non

- steady) situations where a gas flow rate may fluctuate widely or unpredictably. This situation requires a r esponsive high

- bleed device to ensure that the gas flow can be controlled in all situations

. Temperature and level controllers are typically present in control situations that are not prone to fluctuate as widely or where the fluctuation can be readily and safely accommodated by the equipment . Therefore, such processes can accommodate con trol from a low

- bleed dev ice, which is slower

- acting and less precise.
Safety concerns may be a limitation issue, but only in specific situations because e mergency valves are not bleeding controllers since safety is the pre

- eminent consideration

. Thus, the connection between the b leed rate of a pneumatic device and safety is not a direct one

. Pneumatic devices are designed for process control during normal operations and to keep the process in a normal operating state

. If an Emergency Shut Down (ESD) or Pressure Relief Valve (PRV) actuation occurs , e the equipment in place for such an event is spring loaded , or otherwise not pneumatically powered

. During a safety issue or emergency, it is possible that the pne umatic gas supply will be lost. For this reason, control valves are deliberately selected to either fail open or fail closed, depen ding on which option is the failsafe.
5.4.1.2 Cost Impacts

As described in Section 5.2.2, c osts were based on the vendor research described in Section 5.2 as a result of updating and expanding upon the information given in the appendices of the Natural Gas STAR Lessons Learned document on pneumatic devices

. 11 As Table 5

- 7 indicates, the average cost for a low bleed pneumatic is $2,553, while the average cost for a high bleed is $2,338. f Thus , the incremental cost of installing a low

- bleed device instead of a high

- bleed device is on the order of $165 per device

. In order to analyze cost impacts, the in cremental cost to install a low

- bleed instead of a high

- bleed was annualized for a 10 year period using a 7 percent interest rate

. This equated to an annualized cost of around $23 per device for both the production and transmission segments.
Monetary savings associated with additional gas captured to the sales line was estimated based on a natural gas value of $4.00 per M cf. g , 16 The representative low

- bleed device is estimated to emit 6.65 tons, or 319 Mcf, (using the conversion factor of 0.0208 tons m ethane per 1 Mcf) of methane less than

e ESD valves either close or open in an emergency depe nding on the fail safe configuration

. PRVs always open in an emergency

. f Costs are estimated in 2008 U.S. Dollars. g The average market price for natural gas in 20 10 was approximately $4.16 per M cf

. This is much less compared to the
aver age price in 2008 of $7.96 per M cf

. Due to the volatility in the price, a con servative savings of $4.00 per M cf estimate was projected for the analysis in order to not overstate savings

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- 15 Table 5

- 7 . Cost Projections for the Representative Pneumatic Devices

Device Minimum

cost ($) Maximum

cost ($) Average cost ($) Low

- Bleed Incremental Cost ($) High

- bleed controller 366 7,000 2,388 $165 Low

- bleed controller 524 8,852 2,553

* Major pneumatic devices vendors were surveyed for costs, emission rates, and any other pertinent information that would give an accurate picture of the present industry.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 16 the average high

- bleed device per year. Assuming production quality gas is 82.9% methane by volume, this equals 385.5 Mcf natural gas recovered per year. Therefore, t he value of recovered natural gas from one pneumatic device in the production segment equates to approximately $1,500

. Savings were not estimated for the transmission segment because it is assumed the owner of the pneumatic controllers generally is not the owner of the natural gas

. Table 5

- 8 provides a summary of low

- bleed pneumatic cost effective ness.

5.4.1.3 Secondary Impacts

Low

- bleed pneumatic devices are a replacement option for high

- bleed devices that simply bleed less natural gas that would otherwise be emitted in the actuation of pneumatic valves. No wastes should be created, no wastewater generated, and no electricity needed. Therefore, there are no secondary impacts expected due to the use of low

- bleed pneumatic devices.
5.4.2 Instrument Air Systems
5.4.2.1 Process Description
The major components of an instrument air conversion project include the compressor, power source, dehydrator, and volume tank

. The following is a description of each component as described in the Natural Gas STAR document, Lessons Learned: Convert Gas Pneumatic Controls to Instrument Air :
Compre ssors used for instrument air delivery are available in various type s and sizes, from centrifugal (rotary screw) compressors to reciprocating piston ( positive displacement) types

. The size of the compressor depends on the size of the facility, the number o f control devices operated by the system, and the typical bleed rates of these devices

. The compressor is usually driven by an electric motor that turns on and off, depending on the pressure in the volume tank. For reliability, a full spare compressor is n ormally installed

. Therefore, a minimum amount of electrical service is required to power the compressors.
A critical component of the instrument air control system is the power source required to operate the c ompressor

. Since high

- pressure natural gas is abundant and readily available, gas pneumatic systems can run uninterrupted on a 24

- hour, 7

- day per week schedule

. The reliability of an instrument air system, however, depends on the reliability of the compressor and electric power supply. Most large nat ural gas plants have either an existing electric powerINTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 17 Table 5

- 8. Cost

- effectiveness for Low

- Bleed Pneumatic Devices

versus High Bleed Pneumatics

Segment Incremental

Capital Cost Per Unit ($) * Total Annual Cost

Per Unit ($/yr) ** VOC Cost

Effectiveness ($/ton) Methane Cost

Effectiveness ($/ton) without savings with

savings without

savings with

savings without

savings with

savings Oil and Natural Gas Production 165 23.50

- 1,519 13 net savings 4 net

savings Natural Gas Transmission and Storage 165 23.50 23.50 286

- 286 8 8

*Incremental cost of a low bleed device versus a high bleed d evice as summarized in Table 5

- 7

. ** Annualized cost assumes a 7 percent interest rate over a 10 year equipment lifetime

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- 18 supply or have their own power generation system. For smaller facilities and in remote locations, however, a reliable source of electric power can be difficult to assure

. In some instances, solar

- powered battery

- operated air compressors c an be cost effective for remote locations, which reduce both methane emissions and energy consumption. Small natural gas powered fuel cells are also being developed.
Dehydrators, or air dryers, are also an integral part of the instrument air compressor system

. Water vapor present in atmospheric air condenses when the air is pressurized and cooled, and can cause a number of problems to these systems, including corrosion of the instrument parts and blockage of instrument air piping and controller orifices

.
The vo lume tank holds enough air to allow the pneumatic control system to have an uninterrupted supply of high pressure air without having to run the air compressor continuously

. The volume tank allows a large withdrawal of compressed air for a short time, such as for a motor starter, pneumatic pump, or pneumatic tools, without affecting the process control functions.
Compressed air may be substituted for natural gas in pneumatic systems without altering any of the parts of the pneumatic control. The use of instr ument air eliminates natural gas emissions from natural gas powered pneumatic controllers. All other parts of a gas pneumatic system will operate the same way with instrument air as they do with natural gas. The conversion of natural gas pneumatic controll ers to instrument air systems is applicable to all natural gas facilities with electrical service available. 13

5.4.2.2 Effectiveness
The use of instrument air eliminates natural gas emissions from the natural gas driven pneumatic devices; however, the system is only applicable in locations with access to a sufficient and consistent supply of electrical power

. Instrument air systems are also usually installed at facilities where there is a high concentration of pneumatic control valves and the presence of a full

- time operator that can ensure the system is properly functioning

. 13

5.4.2.3 Cost Impacts
Instrument air conversion requires additional equipment to properly compress and control the pressured air. T he size of the compressor will depend on the number of control loops present at a location . AINTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 19 control loop consists of one pneumatic controller and one control valve. The volume of compressor air supply for the pneumatic system is equivalent to the volume of gas used to run the ex isting instrumentation

– adjusted for air losses during the drying process. The current volume of gas usage can be determined by direct metering if a meter is installed. Otherwise, an alternative rule of thumb for sizing instrument air systems is one cubic foot per minute (cfm) of instrument air for each control loop. 13 As the system is powered by electric compressors, the system requires a constant source of el ectrical power or a back

- up pneumatic device. Table 5

- 9 outlines three different sized instrument air systems including the compressor power requirements, the flow rate provided from the compressor, and the associated number of control loops.
The primary c osts associated with conversion to instrument air systems are the initial capital expenditures for installing compressors and related equipment and the operating costs for electrical energy to power the compressor motor. This equipment includes a compresso r, a power source, a dehydrator and a storage vessel. It is assumed that in either an instrument air solution or a natural gas pneumatic solution, gas supply piping, control instruments, and valve actuators of the gas pneumatic system are required . The tot al cost, including installation and labor, of three representative sizes of compressors were evaluated based on assumptions found in the Natural Gas STAR document, “Lessons Learned: Convert Gas Pneumatic Controls to Instrument Air” 13 and summarized in Table 5

- 10. h

For natural gas processing, the cost

- effectiveness of the three representative instrument air system sizes was evaluated based on the emissions miti gated from the number of control loops the syste m can provide and not on a per device basis. This approach was chosen because we assume new processing plants will need to provide instrumentation of multiple control loops and size the instrument air system accordingly. We also assume that existing processing plants have already upgraded to instrument air unless the function has a specific need for a bleeding device, which would most likely be safety related. 7
Table 5

- 11 summarizes the cost

- effectiveness of the three sizes of representative instrument air systems.
5.4.2.4 Secondary Impacts
The secondary impacts from i nstrument a ir s ystems are indirect, variable and dependent on the electrical supply used to power the compressor. No other secondary impacts are expected.

h Costs have been converted to 2008 US dollars using the Chemical En gineering Cost Index.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 20 Table 5

- 9. Compressor Power R equirements and Costs for Various Sized Instrument Air Systems * Compressor Power Requirements ** Flow Rate Control Loops Size of Unit hp kW (cfm) Loops/Compressor small 10 13.3 30 15 medium 30 40 125 63 large 75 100 350 175 *Based on rules of thumb stated in the Natural Gas STAR document, Lessons Learned: Convert Gas Pneumatic Controls to Instrument Air 13

** Power is based on the operation of two compressors operating in parallel (each assumed to be operating at full capacity 50 percent of the year).INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 21 Table 5

- 10 Estimated Capital and Annual Cost s of Various Sized Representative Instrument Air Systems

Instrument Air System Size Compressor Tank Air Dryer Total Capital * Annualized

Capital** Labor

Cost Total

Annual Costs‡ Annualized Cost

of Instrument Air System Small $3,772 $754 $2,262 $16,972 $2,416 $1,334 $8,674 $ 11,090 M edium $18,855 $2,262 $6,787 $73,531 $ 10,469 $4,333 $26,408 $ 36,877 Large $33,183 $4,525 $15,083 $135,750 $ 19,328 $5,999 $61,187 $ 80,515
* Total Capital includes the cost for two compressor s , tank , an air dryer and i nstallation . Installation costs are assumed to be equal to 1.5 times the cost of capital. Equipment costs were derived from the Natural Gas Star Lessons Learned document (reference 13) and converted to 2008 dollars from 2006 dollars using the Chemical Engineering Cost Index.
** The annualized cost was estimated using a 7 percent interest rate and 10 year equipment life. ‡ Annual Costs include the co st of electrical power as listed in Table 5

- 9 and labor.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 22 Table 5

- 11 Cost

- effectiveness of Representative Instrument Air Systems in the Natural Gas Processing Segment

System Size Number of

Control Loops Annual Emissions

Reduction * (tons/year) Value of Product Recovered ($/year) ** Annualized Cost of

System VOC Cost

effective ness ($/ton) Methane Cost

effectiveness ($/ton)

VOC CH 4 HAP without savings with

savings without

savings with

savings without

savings with

savings
Small 15 4.18 15 0.16 3,484 11,090 7,606 2,656 1,822 738 506 Medium 63 17.5 63 0.66 14,632 36,877 22,245 2,103 1,269 585 353 Large 175 48.7 175 1.84 40,644 80,515 39,871 1,653 819 460 228 Minor discrepancies may be due to rounding.
* Based on the emissions mitigated from the entire system, which includes multiple control loops.
** Value of recovered product assumes natural gas processing is 82.9 percent methane by volume

. A natural gas price of $4 per Mcf was assumed.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 23 5.5 Regulatory Options
The affected facility definition for pneumatic controllers is defined as a single natural gas pneumatic controller

. Therefore, pneumatic controllers would be subject to a New Sourc e Performance Standard (NSP S) at the time of installation

. The following Regulatory alternatives were evaluated:
Regulatory Option 1 : Establish an emissions limit equal to 0 scfh.
Regulatory Option 2: Establi sh an emissions limit equal to 6 scfh.
5.5.1 Evaluation of Regulatory Options
By establishing an emission limit of 0 scfh, facilities would most likely install instrument air systems to meet the threshold limit. This option is considered cost effective for natural gas processing p lants as summarized in Table 5

- 11

. A major as sumption of this analysis , however, is that processing plant s that

are constructed at a location with sufficient electrical service to power the instrument air compression system. It is assumed that facilities located outside of the processing plant would not have sufficient electrical service to install an instrument air system . This would significantly increase the cost of the system at these locations , making it not cost effective for these facilities to meet this regulatory option. Therefore, Regulator y O ption 1 was accepted for natural gas processing plants and rejected for all other types of facilities.
Regulatory O ption 2 would establish an emission limit equal to the maximum emissions allowed for a low

- bleed device in the production and transmissions and storage industry segments . This would most likely be met by the use of low

- bleed controllers in place of a high

- bleed controller , but allows flexibility in the chosen method of meeting the requirement

. In the key instances related to pres sure control that would disallow the use of a low

- bleed device, specific monitor ing and recordkeeping criteria

w ould be required to ensure the device function dictates the precision of a high bleed device . Therefore, R egulatory O ption 2 was accepted for lo cations outside of natural gas processing plants.
5.5.3 Nationwide Impacts of Regulatory Options

Table 5

- 12 summarizes the costs impacts of the selected regulatory options by industry segment

. Regulatory Option 1 for the natural gas process ing segment is estimated to affect 15 new processing plants with nationwide annual costs discounting savings of $166, 000

. When savings are realized the netINTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

5

- 24 T able 5

- 12 Nationwide Cost and Emission Reduction Impacts for Selected Regulatory Options by In dustry Segment

Industry Segment Number

of Sources subject to NSPS* Capital Cost

Per Device/IAS ($)** Annual Costs

($/year) Nationwide Emission

Reductions (tpy)† VOC Cost Effectiveness ($/ton) Methane Cost

Effectiveness ($/ton) Total Nationwide Costs ($/year)

without savings with

savings VOC Methane HAP without savings with

savings without

savings with

savings Capital

Cost Annual

without savings Annual with

savings Reg ulatory Option 1 (emission threshold equal to 0 scfh)
Natural Gas Processing 15 16,972 11,090 7,606 63 225 2 2,656 1,822 738 506 254,576 166,351 114,094

Re gulatory Option 2 (emission threshold equal to 6 scfh) Oil and Natural G as Production 13,632 165 23 ( 1,519 ) 25,210 90,685 952 13 net savings 4

- 228 2,249,221 320,071 (20, 699,918 )

Natural Gas Transmission and Storage 67 165 23 23 6 212 0 .2 262 262 7 7 11,039 1,539 1,539
Mi nor discrepancies may be due to rounding. * The number of sources subject to NSPS for the natural gas processing and the natural gas transmission and storage segments represent the number of new devices expected per year reduced by 20 percent. This is con sistent with the assumption that 80 percent of high bleed devices can be replaced with a low bleed device. It is assumed all new sources would be installed as a high bleed for these segments. For the natural gas processing segment the number of new sources represents the number of Instrument Air Systems (IAS) that is expected to be installed, with each IAS expected to power 15 control loops (or replace 15 pneumatic devices). ** The capital cost for regulatory option 2 is equal to the incremental cost of a low bleed device versus a new high bleed device. The capital cost of the IAS is based on the smal l IAS as summarized in Table 5

- 10

. ‡ Nationwide emission reductions vary based on average expected emission rates of bleed devices typically used in each segm ent industry segment as summarized in Tables 5

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- 25 annual cost is reduced to around $114,000. Regulatory Option 2 has nationwide annual costs of $320,000 for the production segment and around $1,500 in the natural gas transmission and storage segment . When annual savings are realized in the production segment there is a net savings of $20. 7 million in nationwide annual costs.INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 26 5.6 References

1 U.S. Environmental Protection Agency. Greenhouse Gas Emissions Reporting From the Petroleum and Natural Gas Industry: Background Technical Support Document. Climate Change Division. Washington, DC. November 2010.
2 U.S Enviro nmental Protection Agency. Methodology for Estimating CH4 and CO2 Emissions from Natural Gas Systems. Greenhouse Gas Inventory: Emission and Sinks 1990

- 2008. Washington, DC.
3 U.S Environmental Protection Agency. Methodology for Estimating CH 4 and CO 2 Emissions from Petroleum Systems. Greenhouse Gas Inventory: Emission and Sinks 1990

- 2008. Washington, DC.
4 Radian International LLC. Methane Emissions from the Natural Gas Industry, Vol. 2: Technical Report. Prepared for the Gas Research Institute and E nvironmental Protection Agency. EP A

600/R

- 96

- 080b. June 1996.
5 Radian International LLC. Methane Emissions from the Natural Gas Industry, Vol. 3: General Methodology. Prepared for the Gas Research Institute and Environmental Protection Agency. EPA

- 600/R

- 96

- 080c. June 1996.

6 Radian International LLC. Methane Emissions from the Natural Gas Industry, Vol. 5: Activity Factors. Prepared for the Gas Research Institute and Environmental Protection Agency. EPA

600/R

- 96

- 080e. June 1996.
7 Radian International L LC. Methane Emissions from the Natural Gas Industry, Vol. 12: Pneumatic Devices. Prepared for the Gas Research Institute and Environmental Protection Agency. EPA

- 600/R

- 96

- 080k. J une 1996.
8 Radian International LLC, Methane Emissions from the U.S. Petrole um Industry , draft report for the U.S. Environmental Protection Agency, June 14, 1996.
9 ICF Consulting. Estimates of Methane Emissions from the U.S. Oil Industry. Prepared for the U.S. Environmental Protection Agency. 1999.
10 ENVIRON International Corpo ration. Oil and Gas Emission Inventories for the Western States. Prepared for Western Governors‟ Association. December 27, 2005.

11 U.S. Environmental Protection Agency. Lessons Learned: Options for Reducing Methane Emissions From Pneumatic Devices in the Natural Gas Industry. Office of Air and Radiation: Natural Gas Star. Washington, DC. February 2004
12 Memorandum to Bruce Moore from Heather Brown. Gas Composition Methodology. July 2011
13 U.S. Environmental Protection Agency. Lessons Learned: Convert Gas Pneumatic Controls to Instrument Air . Office of Air and Radiation: Natural Gas Star. Washington, DC. February 2004INTERNAL DRAFT: DO NOT CITE, QUOTE, or DISTRIBUTE 7/22/2011

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- 27 14 U.S. Environmental Protection Agency. Pro Fact Sheet No. 301. Convert Pneumatics to Mechanical Controls. Office of Air and Radiation: Natural Gas Star. Washington, DC. September 2004.
15 CETAC WEST. Fuel Gas Best Management Practices: Efficient Use of Fuel Gas in Pneumatic Instruments. Prepared for the Canadian Association of Petroleum Producers. May 2008.
16 U.S. Energy Information Adm inistration. Annual U.S. Natural Gas Wellhead Price. Energy Information Administration. Natural Gas Navigator. Retrieved online on 12 Dec 2010 at <http://www.eia.doe.gov/dnav/ng/hist/n9190us3a.htm>