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RIncorporated 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: August 1, 2013

SUBJECT: Summary of June 27 , 2013, Meeting with Representatives from the Texas Oil & Gas Association (TXOGA)

FROM: Heather P. Brown, EC/R Incorporated

TO: Bruce Moore, EPA/OAQPS/SPPD/FIG

I. PURPOSE

This memorandum summarizes the June 27 , 2013 meeting between the Environmental Protection Agency (EPA) and industry representatives from the Texas Oil & Gas Association (TXOGA)

. The intent of the meeting was to allow TXOGA to clarify the ir comments submitted to EPA, dated May 28, 2013, 1 regarding EPA’s April 12, 2013, proposed amendments.

II. DATE

The meeting took place on June 27 , 2013, at 9 :00 am at the EPA building in the Research Triangle Park, NC. I ndustry members participated via telephone.

III. ATTENDEES

The following individuals participated in the meeting :

Industry Representatives Arnoldo Medina, Chevron Cory Pomeroy, TXOGA Shannon Broome, Katten Muchin Rosenman Judy Raab, Quicksilver Resources, Inc. Dan Isenhower, Devon Energy Gretchen Kern, Pioneer Tom Monahan, ExxonMobil Roger Zygmunt, Shell Scott Crump, Quantum Resources Eric Tiemeyer, Energy Transfer Ruben Herrera, BP

1 Comment submitted by Cory Pomeroy, General Counsel, Texas Oil & Gas Association (TXOGA) OK to EPA Docket Center, Washington, DC. Comments of the Gas Processors Association Regarding the Oil and Natural Gas Sector: Reconsideration of Certain Provisions of New Source Performance Standards; Proposed Rule, 78 Fed. Reg. 22,126 (April 12, 2013)

, May 28, 2013. EPA Doc ket No.EPA

- HQ

- OAR

- 2010

- 0505

- 46 23

.2 Rupangi Faldu, Pioneer

U.S. Environmental Protection Agency (EPA)

Bruce Moore , Office of Air Quality Planning and Standards (OAQPS) Chris Frantz, OAQPS Charlene Spells, OAQPS David Cozzie, OAQPS

EC/R Incorporated

Heather Brown

IV. SUMMARY OF DISCUSSION

TXOGA discussed their May 2013 comments and addressed the issues described below.

• TXOGA believes that EPA underestimated the number of new affected facilities and that the supply of control devices would be insufficient.

o If controls required to achieve compliance are not available, the standard is not

achievable.

 A shortage in the supply of control devices will have a larger impact on smaller producers than larger producers.

 Owners/operators’ ability to purchase control devices (i.e., money) is not

nece ssary a driving force behind their ability to acquire control devices.

o TXOGA would prefer a compliance date of April 2014.

• TXOGA expressed concerns about EPA’s proposed date of determination.

o According to TXOGA, a single employee is often responsible for calculating/monitoring air emissions.

o Although TXOGA understood that they had to determine emissions on proposal dates, they thought the date of determination should have be en in October 2013.

• TXOGA had issues with EPA’ s proposed 4 tpy emission limit for storage vessels at well

sites.

o A ccording to TXOGA

, it is not economically feasible for owners/operators to reequipped storage vessels with emission controls when monthly measurements predict annual emissions over 4 tpy.

o Having 2 threshold s is confusing.

o According to TXOGA , the cost s associated with the removal of control devices from wells emitting less than 4 tpy and reusing these devices at other locations (e.g., conducting an engineering analysis and money for reengineering the tank to

v ent) woul d be similar to ne w installation costs.

 A 30

- day compliance period does not provide owners/operators with enough time to comply with requirements.

o Cost

- effectiveness performance standards should not be much different from

reinstallation.

o Based on EPA’s determination that 6 tpy is the threshold at which it becomes

cost

- effective to control VOC emissions, TXOGA believes that the reinstallation limit should also be set at 6 tpy.3 o Storage vessels that produce more than 4 tpy are subject to enf orceable limits requiring 95 percent control of VOC emissions

.

o TXOGA inquired whether the 4 tpy threshold is based on an annual value or 4 tpy over a whole year of operations (i.e., an averaging period).

o TXOGA requested that EPA explain why it would be desirable for owners/operators to remove control devices and reuse them elsewhere, in particular the technical feasibility with operating a control de vice at such a low throughout.

o EPA should clarify that the averaging period should have a rolling average instead of extrapolating monthly emissions for 12 months.

• TXOGA had issues with the “ nature” of events and EPA’s proposed open

- ended event trigger language , which they believe enc ompasses “events” that do not lead to a long

term increase in emissions, but instead represent short

- term variations in well throughput.

o TXOGA recommended that t rigger events to require G roup 2 controls for G roup 1 tanks be limited to specific, objectively

- identifiable event s that increase the VOC emissions rate to a level >6 tpy , which is consistent with the modification

definition

.

o Inspectors need to easily ID an event, which is a challenge at small and widely spread

- out facilities.

• TXOGA had issues with how EPA defined Group 1 and Group 2 storage vessels.

o Section 60.5430 defines Group 1 and Group 2 storage vessels as those “constructed, modified or reconstructed” (C/M/R) as of certain dates

 TXOGA would prefer that EPA define Group 1 and Group 2 vessels in

relation to the date that construction commenced

.

o TXOGA encouraged EPA to clarify the meaning of C/M/R.

 It is unclear whether or not “construct” means completion of construction or the beginning of construction.

o If a “commence construction” approach i s not adopted th e n EPA runs the risk of categorizing some storage vessels as Group 1 and G roup 2.

• In regards to emergency replacement tanks, TXOGA would prefer that EPA exclude

emergenc y replacement vessels from the final r ule for 180 day s , so that owners/operators

have adequate time to obtain state permits.

o Many jurisdictions require a construction permit for replacement vessels if that

vessel is subject to NSPS, which can take states several months to issue.

o S kid

- mounted propane storage tanks may or may not be adequate replacements.

 According to TXOGA , while the use of a skid

- mounted temporary tank can often provide enough lead time for an operator/owner to permit, install, and secure a control device for a new permanent tank, tha t may not always be the case.

• TXOGA would prefer that t he requirement for responsible officials to certify compliance and reports be eliminated and the period for submittal of report s , certified by a responsible official or not, be extended.

o This requi rement should only apply to “major sources,” because it is grounded in the Title V program.4 o TXOGA believes that the requirement for responsible officials is burdensome and costly.

 T he requirement that a responsible official have overall responsibility over one or more facilities is specific for facilities that have large numbers of employees (250 persons) or revenues exceeding several million dollars ($25 million)

. According to TXOGA , t he o il and gas facilities are generally very small with full

- time employees and low revenue, so t his requirement would be impractical.