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MEMORANDUM

TO: Melanie King, EPA OAQPS/SPPD/ESG
FROM: Tanya Parise , EC/R, Inc.
SUBJECT: Summary

of the September 3, 2010 Teleconference wi th Exterran Regarding the Proposed Amendments to the NSPS for Stationary Engines

INTRODUCTION Exterran requested this teleconference with EPA to discuss the proposed amendments to the new source performance standards (NSPS) for stationary engines, spec ifically

issues related to the definition of reconstruction and the date of manufacture. The proposed NSPS amendments were published in the Federal Register on June 8, 2010 (75 FR 32612).
ATTENDEES Melanie King, EPA Gerald Meinecke , Exterran Michael Horowitz, EPA Mike Wasson , Exterran Alan Stout, EPA Bill Bowes , Exterran Tanya Parise, EC/R Inc. James Harrison, Exterran Jeff Holmstead , Bracewell & Giuliani Kyle Jantzen, Exterran Rebecca Rentz , Bracewell & Giuliani
S UMMARY OF TELECONFERENCE
Ext erran indicated that it had concerns with certain provisions in the proposed amendments to NSPS for stationary engines. Exterran’ s main issue with the proposed amendments was the addition of the definition s of “reconstruct” and “date of manufacture.”
In terms of the reconstruction provisions, Exterran noted that the proposal represents a departure from oth er 40 CFR part 60 regulations and expressed particular concern with triggering NSPS with the 75 percent capital cost threshold. Exterran asked what EPA ’s intentions are with the proposed amendments. EPA indicated that the proposed amendments are not entirely

different from other regulations; in fact, something similar is being done with reconstruction of combustion turbines. EPA indicated that the purp ose of the proposed amendments w as to minimize attempts to circumvent the requirements where an engine should be regulated as a new engine . Also, EPA indicated that the language with respect to reconstructing, rebuilding, or refurbishing an engine previou sl y made it seem as if only owners and operators would b e subject to the requirements. EPA intended to clarify that with the 

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# / R Incorporated Providing Environmental Technical Support Since 19892

proposed amended language and to generall y minimize relying on the language in the General Provisions by

being more specific in th e proposed amendments

. EPA indicated that it is open to ideas from industry

and would like information on how the proposed amendments could cause problems for owners and operators

. In Exterran’s opinion, EPA needs to look at the additional costs associ ated with reconstructing an engine and not only consider the costs directly associated with the engine itself . For example, engineering, installation and other equipment costs need to be included in determining a “comparable new facility .” According to E xterran, stationary engines are regularl y updated and during an overhaul the engine is unbolted from the support system and dropped back into place after the necessary components (exhaust system, cooling s ys tem, inlet air sy stem, etc.) have been inspected and replaced , as necessary . To find a new engine to fit in the s ame location having the same design, would be difficult, e.g., the mounting arrangement could change, and according to Exterran, a new engine could not just be “dropped

- in” with the existing auxiliary sy stem. Such replacement would at least have to b e re - evaluated and Exterran asked that EPA look at and allow the use of other costs as well like the install and engineering costs that would occur during such a determination. EPA indicated that it would consider Exterran’s comments and discuss this issue with the Office of Enforcement and Compliance Assurance

. EPA indicated that it was not intending on changing the definition of “fixed capital costs” in 40 CFR 60.15(c).
Exterran indicated th at the nitrogen oxides (NO x) emissions from 4

- stroke lean burn engines (4SLB) are less than 3 grams per horsepower

- hour (g/HP

- hr). According to Exterran, 4SLB engines can easil y meet the first tier of standards in the spark ignited NSPS. However, Exterran believed that it would not make sense to control 4SLB engines to 1 g/HP

- hr of NO x if these engines received a new date of manufacture and subsequentl y would be subject to the second tier of standards. In Exterran’s opinion, this would be getting rid of an efficient engine and this does not seem to be EPA’s intent. Exterran recommended that i f a source meets the 75 percent reconstruction criteria, the engine should be subject to the standards applicable to reconstructed engines, not the standards applica ble to new engines.
Where EPA proposed to add the definition of “date of manufacture” to 40 CFR §§60.4219 and 60.4248 , Exterran disagrees that the removal of the crankshaft during reconstruction should a determining factor . According to Exterran, the crankshaft is removed with every

maintenance event and the removal of this part does not seem to fit with EPA’s intent. EPA indicated that it would look at this issue. Exterran indicated that it would provide additional and more extensive discussion and rationale supporting its position in the comments that it intends on submitting to EPA on the proposed rule amendments.