----- 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 vendor

suggested 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 that
off-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 point
out 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