----- Forwarded by Melanie King/RTP/USEPA/US on 10/19/2010 10:04 AM

----- |------------> | From: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |Melanie King/RTP/USEPA/US |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | To: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |"Holmstead, Jeff" <Jeff.Holmstead@bgllp.com> |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | Cc: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |Mike.Wasson@Exterran.com, "Rentz, Rebecca" <Rebecca.Rentz@bgllp.com>, RobertJ Wayland/RTP/USEPA/US@EPA, Michael Horowitz/DC/USEPA/US@EPA |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | Date: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |10/18/2010 04:26 PM |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | Subject: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |Re: Concerns about CPMS Requirement |

>--------------------------------------------------------------------------- ---------------------------------------------------------------|

Hi Jeff, Thanks for your note outlining the concerns about the CPMS requirement. As discussed in the response to comment # 8.1 in the summary of comments and responses for the final rule, we believe that these systems are available and our cost information is based on quotes from vendors of these systems. I have copied an excerpt from the response below. Our cost estimates for the final rule included not only the equipment cost discussed in the response, but also costs for operating and maintaining the systems. We believe that we have appropriately accounted for the CPMS costs in our analysis. Without more information on the basis for your estimates, we cannot determine why they are different from EPA's estimates. We believe that the continuous temperature monitoring is necessary to demonstrate that the emission limitations are being met on a continuous basis. The catalyst inlet temperature is an important determinate of catalytic activity and resulting emissions reduction.

Excerpt from response to comment # 8.1:"EPA disagrees with the commenters’ views that affordable, long-lasting, offthe-grid systems to measure and record temperatures and pressure differential at unmanned, remote locations do not exist. One instrument packager and vendorsuggested use of his firm’s off-theshelf, battery-operated components. Standalone temperature measurements could be made and recorded using a single channel data logger ($129), a temperature sensor ($40), and a copy of software ($99), while stand-alone pressure differential measurements could be made and recorded using a multi-channel data logger ($485), a differential pressure sensor ($220), and a copy of software ($89). As the battery life for such systems is over 14 months and the data loggers can hold over 43,000 data points – more than 14 months of 15 minute readings – each system could operate unattended for more than a year. Assuming that an average source has 4 engines, equipment costs for a stand-alone temperature system would be under $200 per point, while equipment costs for a stand-alone pressure differential system would be under $370 per point. Of course, these equipment costs could be further reduced by consolidating the number of data loggers. Given thatoff-the-shelf equipment is available and that plant personnel are expected to

visit each remote site at least once per year, when the data loggers could be downloaded or swapped out, we find no barriers for measuring and recording 15- minute temperature and pressure differential data at remote sites."

Melanie King Energy Strategies Group Sector Policies and Programs Division Office of Air Quality Planning and Standards U.S. Environmental Protection

Agency

Mail Code D243-01
RTP, NC 27711

Phone: (919) 541-2469
Fax: (919) 541-5450 king.melanie@epa.gov

|------------> | From: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |"Holmstead, Jeff" <Jeff.Holmstead@bgllp.com> |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | To: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |RobertJ Wayland/RTP/USEPA/US@EPA |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | Cc: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |Melanie King/RTP/USEPA/US@EPA, "Rentz, Rebecca" <Rebecca.Rentz@bgllp.com>, <Mike.Wasson@Exterran.com> |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | Date: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |10/15/2010 05:42 PM |

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |------------> | Subject: | |------------>

>--------------------------------------------------------------------------- ---------------------------------------------------------------| |Concerns about CPMS Requirement |

>--------------------------------------------------------------------------- ---------------------------------------------------------------|

Bob,

Sorry for the delay in getting back to you with more information about the requirement for continuous parametric monitoring systems (CPMS) on 4SRB and 4SLB RICE > 500 hp. As I mentioned, we had not really focused on this issue before the rule came out because the table in the proposal seemed to suggest that CPMS would not be required at area sources.

Over the last couple months, the Exterran folks have spent a lot of time and effort (including meetings with CPMS vendors) trying to understand what this requirement would actually mean for their fleet. They didn’t want to go back to you and Melanie unless it was a big issue for them, but they really believe that the CPMS requirement for >500 hp engines at area sources will be much more costly than EPA has estimated – quite a bit more expensive than actually installing and operating catalytic controls on the engines. They also pointout that the rule already includes 2 other compliance assurance mechanisms

that they believe will be more effective than CPMS, and that the CPMS requirement won’t really accomplish anything in terms of reducing emissions.

It looks like the full cost of CPMS installation and operation is not reflected in the Agency’s cost assessments for 4SRB and 4SLB > 500 hp at area sources. EPA has estimated that the cost of the CPMS requirement is about $568 per engine. Based on everything we have seen (including meetings to seek pricing from vendors), the actual cost for Exterran to purchase and install CPMS will be in the range of $6,000 - $8,000 per engine. But this is not the full cost – especially for engines at area sources, which are generally located in remote areas. On top of the initial cost, Exterran estimates that the annual operating costs (primarily for gathering, reviewing and processing the raw CPMS data) will be in the range of $9,000 - $13,000 per engine. The biggest part of this cost is for the time it will take to review the CPMS data and match it up with operating events to explain the frequent temperature variations that will occur at virtually all their engines.

Using our best estimates of the cost of CPMS requirement (including installation and ongoing operation), we believe that the cost per ton of formaldehyde reduced will be about 3 times higher than the estimates in the final rule for both 4SLB and 4SRB > 500 hp at area sources. Our estimate (and we can provide you with a lot of backup data and analysis) is that it will likely be more than $89,000 per ton of formaldehyde reduced for 4SLBs and about $320,000 for 4SRBs.

Our technical folks also believe that CPMS is unlikely to achieve any additional emission reductions because it is just one of three compliance assurance provisions in the rule. CPMS measures the catalyst inlet temperature and is one indicator of catalyst performance but not the most relevant one. They believe that the required monthly measurement of differential pressure across a catalyst is actually a better indicator for catalyst performance because it will show whether a catalyst is plugged (as indicated by high pressure differential) or has been blown out by an engine backfire (as indicated by low pressure differential). In addition to the monthly measurement of pressure differential, the ZZZZ performance-testing requirement is another compliance assurance mechanism. Given the additional cost and technical challenges associated with installing CPMS at area sources, we really don’t believe that CMPS is warranted for these engines.

Although CPMS provides a near continuous measurement of inlet temperature, operators will still need to go out and gather the data periodically and then review it against past operating events. Thus, CPMS will not identify potential catalyst problems any sooner than the monthly measurement of pressure differential. In place of CPMS data collection (and associated retroactive data review), we believe that regular temperature checks, together with the required pressure readings and performance tests, makes much more sense for the thousands of unmanned area sources. This approach would ensure regular on-the-spot checks and immediate maintenance actions, as opposed to the retroactive data analysis that would be conducted for each semi-annual report submittal. Regular manual collection of temperature and pressure differential would give a better indication of compliance by allowing the operator to review both measures at the same time and then implement any necessary maintenance actions immediately at the site.

Again, I am sorry we were not able to get this information to you sooner, but we wanted to be sure that we really understood these issues before raising them to you. Please shoot me a message or give me a call if you have any questions. 202-828-5852.

Jeff