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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 with 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, specifically 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

SUMMARY OF TELECONFERENCE

Exterran 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 definitions of “reconstruct” and “date of manufacture.”

In terms of the reconstruction provisions, Exterran noted that the proposal represents a 

departure from other 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 purpose of the proposed 

amendments was 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 previously made it seem as if only owners 

and operators would be subject to the requirements. EPA intended to clarify that with the 

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proposed amended language and to generally minimize relying on the language in the General 

Provisions by being more specific in the 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 associated 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 Exterran, stationary engines are 

regularly 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 system, inlet 

air system, etc.) have been inspected and replaced, as necessary. To find a new engine to fit in 

the same 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 system. Such replacement would at least have to be 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 that the nitrogen oxides (NOx) 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 easily 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 NOx if 

these engines received a new date of manufacture and subsequently 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 if a source meets the 75 

percent reconstruction criteria, the engine should be subject to the standards applicable to 

reconstructed engines, not the standards applicable 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.