1 Summary of Meeting with the American Petroleum Institute (API) Regarding the Proposed Statio nary Existing RICE NESHAP August 5, 2009

Attendees

Bob Wayland, EPA Jim McCarthy, IES (by phone) Melanie King, EPA Janet Bounds, Chevron (by phone) Michael Horowitz, EPA (by phone) Shankar Ananthakrishna, Chevron (by phone) Tanya Parise, AGTI Rebecca Rentz, Bracewell & Giuliani (by phone) Stephanie Meadows, API Jack Maley, Exterran (by phone) Matt Todd, API Gerald Meineck e, Exterran (by phone) Jeff Adams, BP Kyle Jantzen, Exterran (by phone) Tom Monahan, ExxonMobil Jeff Panek, IES

Purpose of Meeting

The purpose of this meeting was to di scuss the proposed national emission standards for hazardous air po llutants (NESHAP) for existing stationary reciprocating internal combustion engines (RICE). The proposed NESHAP for existing stationary RICE was published in the Federal Re gister on March 5, 2009 (74 FR 9698).

Summary of Meeting

General

The American Petroleum Institute (API) requested this meeting with EPA to discuss the recently proposed NESHAP for st ationary engines. API has previously worked with EPA on other rulemakings affec ting stationary engine s and met with EPA earlier on the rule on May 14, 2009. API’s prim ary purpose for this meeting was to get an update from EPA on those issues brought up during the May meeting. A list of the issues was provided to EPA by API and is in cluded as Attachment 1 to this meeting summary. The summary of this meeting will be available in the docket for this rulemaking (Docket ID N o. EPA-HQ-OAR-2008-0708).

API indicated that it has started collecting a group of people to develop an engine test program, but that the current matrix of testing is substantial and that some bounds are

needed to limit the test matrix. API stressed that timing is an issue with the tight courtordered final rulemaking deadline in mind, ther efore it is really important to define exactly what type of emissions te sting information is needed.

EPA said that the option of splitting the rule into two separate rulemakings for diesel and gas engines has been discussed, but th at it is unlikely that separate rules will be developed. EPA recommended that API proceed under the assumption that no extension will be provided for natural gas engines.2 Specific Issues

The specific issues that API discussed dur ing the meeting are described below.

Further details on thes e issues and a complete list of API’s issues can be found in

Attachment 1.

1. Method 323

API wanted to know if EPA would allo w Method 323 in the final rulemaking and if EPA would consider including emissions data captured by Method 323 in a revised floor analysis. API indicated that it has been talking to EPA Region 8 regarding the method and believes that it is possible that th e issues related to the method are strictly associated with one particular testing firm. For that reas on, API believes that it may be appropriate to allow the method, which could produce reliable results and provide a more reasonable alternative to FTIR testing, whic h is currently the only allowable method. If only FTIR testing is allowed, API did not beli eve it could generate any significant data by the September/October timeframe. EPA asked if API could provide pieces of information that EPA could use, but API wa s hesitant because it was concerned that providing limited data would not be re presentative of all engines.

EPA pointed out that only having FTIR as an available and approved test method should only be an issue that is related to formaldehyde te sting for rich burn engines

because EPA could not establish a rela tionship between formaldehyde and carbon monoxide (CO) for rich burn engines. Howeve r, for lean burn engines, EPA determined that CO is an appropriate surrogate for fo rmaldehyde and consequently for hazardous air pollutants (HAP). In other words, API coul d use portable analyzers to capture CO data and even if API has previous CO data availabl e, it could provide that to EPA. For rich burn engines, EPA needs to document that th ere is a relationship between formaldehyde and some other pollutant that could be more easily measured, such as total hydrocarbons (THC) or volatile organic compounds (VOC). EPA could then use THC or VOC as a surrogate for HAP emissions from rich burn engines.

EPA indicated that it would check with EPA’s Emission Measurement Center to determine if there is any lat itude with regards to Method 323 and get back to API on this issue as soon as possible.

2. Rural vs. Urban Distinction

On the topic of rural versus urban area source engines, EPA indicated that it is considering various different options, including looking at the Oil and Natural Gas (ONG) MACT that API asked if EPA was contemplating following. API would be willing to provide more information and EPA not ed that any technical information on this subject would be helpful in finalizing the rule.

3. SSM Limits3 EPA indicated that it is reviewing th e comments submitted on the proposed SSM approach. EPA is considering the comments that recommended work practice standards would be appropriate for SSM. If EPA dete rmines that work practices are the MACT floor, then EPA would need to include very specific work practices. EPA indicated that it would appreciate any information from API on work practices that are used to limit emissions during startup.

4. Subcategories

EPA indicated that on the topic of su bcategories there has not been much discussion yet. API made the point that ther e are several engines that operate cyclically, which does not go well with a steady-state rulema king and that speci al provisions are needed for non-steady state operations, accordin g to API. API urged EPA to consider the bullets in the agenda list. Also, API ma de the point that no limited use category was included in the proposal, but was included in the original rulemaki ng for engines above 500 horsepower (HP) at major sources.

5. Emissions Data

EPA indicated that it has not received any emissions data as of yet for stationary engines. Exterran mentioned that it would be providing emissions data to EPA, but EPA has not received it yet. The only data EPA has received post-proposal is data for landfill and digester gas engines.

6. Cost Analysis

API indicated that it would provide mo re supporting information on the cost numbers it provided in the comments on the rule . API said that it would be helpful to

know the cost effectiveness threshold that EP A considers reasonable. EPA said that it would reanalyze the costs asso ciated with the rule.

7. Maintenance Practices

As with the requirements for SSM periods , EPA indicated that if maintenance practices are to be included in the final rule, such practices need to have substance and be

reasonable and enforceable.

8. Streamlining Requirements

On the issue of streamlining requirements , EPA noted that it wished to minimize the compliance and enforcement burden as much as possible, but that EPA is more

limited under this section 112 of the CAA rule making as opposed to what EPA could do under section 111 of the CAA (i.e., in the Ne w Source Performance Standards (NSPS)). However, EPA will do what it can to clarify and minimize confusion in the final rule. API made the point that require ments are confusing and suggest ed that if certain engines could demonstrate compliance by meeting the NSPS, that would be helpful.

9. Other Issues4 EPA could not tell API what will happen on the SSM issue. EPA also suggested that API focus on the category of engines of greater concern and try to gather data for those engines. API asked how it should acc ount for variability and if EPA planned to gather additional information on the efficien cy of add-on controls because 90 percent reduction is not achievable by all engines. API recommended that if EPA obtain vendor

information that EPA ask the vendors for catal yst warranties and specifications as well. EPA asked that API send any information it has available on these issues. API also asked if EPA would provide an exemption or a dopt less stringent re quirements (e.g., work practices) for smaller engines like those under 100 HP. EPA indicated that it could not

answer that at this time.5 Attachment 1 Existing Engine NESHAP Presentation by API