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Federal HAP and Criteria Pollutant Rules
Impacting the Natural Gas Industry
Presented to:
Gas/Electric Partnership Workshop
Presented by:
Jim McCarthy
Innovative Environmental Solutions, Incorporated
Houston, TX
February 10, 2009
innovative environmental solutions, inc.
Acronyms, etc.
4(2)SLB: Four(two)-stroke cycle lean burn engine (versus RB for “rich burn”)
BACT: Best Available Control Technology
EPA: United States Environmental Protection Agency
EGU: Electric Generating Unit
GACT: Generally Achievable Control Technology (NESHAP for area sources)
GHG: Greenhouse Gas (CO2 and methane emissions from nat. gas systems)
ICE: (Reciprocating) Internal Combustion Engine
LAER: Lowest Achievable Emission Rate
MACT: Maximum Achievable Control Technology (NESHAP for major sources)
NAAQS: National Ambient Air Quality Standard
NSCR: Non-Selective Catalytic Reduction (4SRB emissions control)
NSPS: New Source Performance Standard
NESHAP: National Emission Standard for Hazardous Air Pollutants (e.g., MACT)
O3: Ozone
PM2.5: Fine Particulate Matter (aerodynamic mean diameter <2.5 µµµµm)
RACT: Reasonably Achievable Control Tech. (NOx control for existing units)
SIP: State Implementation Plan
SSMP: Startup, Shutdown, Malfunction Plan (NESHAP requirement)
TPY: Tons per Year
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Topics
� Introduction – Primary Federal Clean Air Act (CAA)
requirements that impact natural gas sector emission
control requirements
� IC Engine NESHAP
» RICE MACT and 2008 Amendments
» Recent Court decisions and implications for additional
revisions planned for 2009
� Turbine MACT status
� NAAQS Related Regulations – NOx Control Implications
» Fine Particulate NAAQS
» Ozone NAAQS
» Example state regulations
Primary CAA Triggers for
Emission Control Regulations (1)
� New Source Performance Standards (NSPS): EPA
adopts standards for “new” sources of “criteria
pollutants” and associated precursors (e.g., NOx,
CO, VOC, Particulate) for source categories that
contribute to pollution
» National standard based on “best demonstrated
technology” – no geographical differences
–Affects new, modified and reconstructed equipment
» For example:
– IC Engine NSPS adopted in January 2008 requires NSCR for
rich burn engines, low emission combustion for lean burns
– Turbine NSPS revised in July 2006 requires lean-premixed
combustion for turbines >50 MMBtu/hr
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� Nonattainment New Source Review (NNSR) and
Prevention of Significant Deterioration (PSD)
» NSR/PSD require LAER technology in nonattainment areas
and BACT in attainment areas if “new” facility emissions
or emission changes at an existing facility are above a
defined emissions threshold
– Emissions threshold depends upon pollutant and air quality
severity in the area where the source is located
» LAER is lowest achievable emission rate without
consideration of cost
» BACT allows a “top down analysis” that considers
technological and economic feasibility
» States implement through permitting process
– Some judgment involved – e.g., BACT feasibility
Primary CAA Triggers for
Emission Control Regulations (2)
� National Emission Standards for Hazardous Air Pollutants
(NESHAPs): EPA adopts HAP standards
» e.g., formaldehyde is the HAP of concern for natural gas-fired
combustion
» National rule – no geographical differences
– For existing sources, standard is based on “average emission
limitation achieved by the best performing 12 percent”
� Historically, EPA frequently concluded that this is “no control”
– For new and reconstructed sources, emission standard is based
on the best controlled similar source
–Major source standards (e.g., RICE MACT) and area source rules
� “Major source” is a facility with HAP emission of 10 TPY or more for
a single HAP or 25 TPY for aggregation of all HAPs
� Area source rules can be based on a lesser degree of control
(GACT) or management / work practices
Primary CAA Triggers for
Emission Control Regulations (3)
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� National Ambient Air Quality Standard (NAAQS) are
ambient air standards for six “criteria pollutants”
» Ozone, particulate, CO, SO2, NO2 and lead
–Ozone, and – to a lesser extent – fine particulate (PM2.5) NAAQS
nonattainment drives NOx regulations for the natural gas sector
–NOx and VOC regulated as a precursor to ozone
� EPA requires a “State Implementation Plan” (SIP)
» In SIP, state identifies regulations and measures it will adopt
to improve air quality and “attain” the NAAQS
� Reasonable Achievable Control Technology (RACT): For
ozone and PM2.5 nonattainment, EPA requires states to
consider NOx RACT for existing equipment as a SIP
measure
Primary CAA Triggers for
Emission Control Regulations (4)
Regulatory Overview:
Why all of the recent activity?
� Key activity: Lawsuits by environmental groups or states
� CAA requires EPA to complete a timely review of many
standards
» Review NAAQS every 5 yrs and NSPS/NESHAPs every 8 yrs
� EPA historically missed (or ignored) these schedules
� Recent lawsuits have forced EPA to meet CAA schedules
» If challenged, EPA will lose in Court – Only new legislation
can change these Clean Air Act driven schedules
� EPA and litigant often agree to Court Ordered “Consent
Decree” schedule for regulation development
» High activity since 2006 based on Court ordered deadlines
» To date, EPA has typically met the Court ordered deadlines
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NESHAPs for Reciprocating
Internal Combustion Engines
and Combustion Turbines
And… Implications of recent
Court cases
IC Engine MACT
40 CFR 63, Subpart ZZZZ
� IC Engine MACT Final Rule (aka RICE MACT)
» Affects IC engines >500 hp at major sources
» Final Rule in Federal Register: June 15, 2004
» 2004 rule affects new or reconstructed units >500 hp and
existing rich burns >500 hp at HAPs major source
–Major source >10 TPY single HAP or >25 TPY all HAPs
– Formaldehyde from ICEs is typical trigger
� RICE MACT was amended in 2008 to address small major
source engines and area sources (new units)
» Proposal date of June 12, 2006
–Applies if reconstructed after this date; Applicability date for
new units based on manufacture date (a la NSPS requirements)
� Due to recent Court cases, EPA will revise again in 2009
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Summary of 2008
NESHAP Amendments
� Proposed as amendments to the current IC Engine
MACT Standard, 40 CFR Part 63, Subpart ZZZZ
» NESHAP includes diesel (i.e., compression ignition)
» January 2008 amendments address:
(1) Major source engines < 500 hp, and
(2) All area source engines
» Amendments only affect new or reconstructed engines
–No new requirements for existing engines
� With proposed amendments, ALL new and
reconstructed units are affected regardless of size
» However, most units comply based on NSPS compliance
2008 NESHAP Amendments
� NESHAP amendments do NOT impact applicability or
requirements under the original (June 2004) RICE MACT
» “RICE MACT” still applies for large, major source ICEs
» Minor change: emergency ICE cannot sell power to the grid
� Amendments result in “RICE MACT” requirements for
one new source subcategory » Major HAP source, new or reconstructed, four-stroke lean
burn engine applicability decreased to 250 hp
– Engine is “new” if constructed on or after June 12, 2006;
HOWEVER, new units are not required to meet emission or
operating limits unless manufactured on or after Jan. 1, 2008
� All other new and reconstructed units covered by the
NESHAP amendments comply via NSPS compliance» Streamlines reporting and recordkeeping
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RICE MACT Requirements
� Applies to new or reconstructed engines and existing rich burns >500 hp at major HAPs source
» For 4SLB, applicability at 250 hp due to 2008 revision
� Full “MACT” Requirements Apply» Requires oxidation catalyst & parameter monitoring
» Emission Limits – CO or formaldehyde limits
» Performance Tests for emissions compliance
» Operating Limits for catalyst operation
» Parameter Monitoring – Catalyst Tinlet and ∆∆∆∆P monitoring
» Performance Evaluation for Continuous Parameter Monitoring (CPM) of inlet temperature
� Long list of Reporting, Notification and Recordkeeping requirements
» e.g., SSMP and associated recordkeeping/reporting
Brick MACT Court Case (1)Implications for IC Engine NESHAP in 2009
� “MACT Floor”: For existing major sources, the Clean Air
Act requires EPA to identify a “MACT floor” of emissions
control, which is “the average emission limitation
achieved by the best performing 12% of the existing
sources”
» The “floor” can be “no control” and in some cases EPA
determined that a “no control” MACT floor does not require
emissions limits or other requirements
� Sierra Club sued EPA over the Brick MACT, challenging
EPA’s failure to establish an emission limit for “no
control” existing units
» Also challenged how EPA considers factors such as
emissions variability when setting the emissions limit
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Brick MACT Court Case (2)Implications for IC Engine NESHAP in 2009
� D.C. Circuit Court decision on March 13, 2007 sided with
the Sierra Club and vacated the Brick MACT
» Court ruled, "EPA has a clear statutory obligation to set
emissions standards for each listed HAP, which does not
allow it to avoid setting standards for HAPs not controlled
with technology."
� EPA will implement this Court ruling for other MACT
standards – e.g., RICE MACT sources
» Emission limits for existing IC engines
� 2009 amendments to Subpart ZZZZ will consider emission limits for some existing units at major sources
» 2004 RICE MACT and 2008 amendments: only existing major source rich burn engines >500 hp have an emission standard
Startup, Shutdown, Malfunction Court CaseImplications for IC Engine NESHAP in 2009
� During SSM, operator not required to meet emission limits
» Must follow good practices to minimize emissions
» SSM Plan is required and must be followed
� EPA sued over legality of SSM “exemption”
� DC Circuit Court agreed with litigant in Dec 2008 ruling
» For NESHAPs, CAA requires compliance with an emission
standard at all times
» Court vacated the SSM provisions for NESHAPs
� EPA has indicated that NESHAPs will require standard
during startup, shutdown, and malfunction events
� In pending IC engine NESHAP revisions, EPA may
address this new SSM requirement
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IC Engine Rules: EPA Plans for 2009 NESHAP Revision (1)
� ICE NESHAP revision is required to address Court decisions on MACT limits for existing units
» Based on settlement agreement, EPA must propose RICE
NESHAP revision in Feb 2009 and Final Rule in Feb 2010
–Consent decree based on EPA agreement to include controls
for at least some existing diesel IC engines
– Signature deadline for proposed rule is February 25, 2009
» In January, EPA indicated the February proposed rule will
also address “emission standards” for some existing
natural gas-fired IC engines
» NESHAPs must include emission standards for existing
units with “no control” MACT floor
IC Engine Rules:
EPA Plans for 2009 NESHAP Revision (2)
� February proposed rule will likely include existing:
» Natural gas-fired area source engines and major source
engines 500 hp and smaller (i.e., ICEs in 2008 amendments)
» Major source engines will include an emission standard
–May be based on uncontrolled emissions in some cases; But,
“best performing” requirement may require control for some
engines to meet the “uncontrolled” standard
� Some area source IC engine standards may include
management practices rather than an emission standard
� Recordkeeping will be required
� EPA intends to address SSM limits in this rule
� Emission standards for existing lean burn ICEs covered
by the 2004 RICE MACT (major source >500 hp) will likely
be addressed during eight year review due by June 2012
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Turbine MACT
40 CFR 63, Subpart YYYY
� Turbine MACT Final Rule
» Proposed: Jan 14, 2003 (“new” if constructed on/after 1/14)
» Final in Federal Register & Effective Date: March 5, 2004
» Rule “Stayed” for Gas-Fired Turbines on August 18, 2004 in
response to petition to “delist” this source category
– EPA tentative Delisting is based “low risk” for this category
–Court cases / recent actions may complicate delisting decision
� If delisting is not approved, Final Rule would apply
» Formaldehyde emission limit (91 ppbvd@15%O2) for new/
reconstructed turbines located at a major HAPs source
» Oxidation catalyst for ≥≥≥≥1 MW units (ISO conditions)
» Rule also establishes full range of MACT requirements:
operating limits; initial and annual performance tests;
monitoring; recordkeeping and reporting
NAAQS and Related
NOx Regulations
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NOx Background: NAAQS & EPA/State Emission Controls
� NOx and VOCs are regulated as “precursors” to ozone
» NOx, VOC & sunlight form ozone via atmospheric reactions
» NOx is also a PM2.5 precursor
� “Original” 1-hr O3 NAAQS applied for over two decades
� 8-hour ozone NAAQS adopted in 1997 is 0.08 ppmv
� EPA adopted a lower ozone NAAQS in March 2008
» New 8-hour ozone NAAQS is 0.075 ppmv
� Since 1990, ozone strategy has evolved from VOC focus
from the 1970’s – 1990 to an increased focus on NOx
» States develop SIPs for nonattainment areas
» Original urban area focus now includes regional controls
» In the last decade, NOx RACT and regional control rules
have increased NOx controls for existing ICEs and turbines
NAAQS – PM2.5 Standard
� NOx is regulated as a precursor to fine particulate» If nonattainment, states may have to consider NOx RACT
for existing ICEs and turbines
� 1997 NAAQS: » Annual = 15 ug/m3 and 24-hr = 65 ug/m3
� 2006 NAAQS: » Annual = 15 ug/m3 and 24-hr = 35 ug/m3
» EPA designated nonattainment counties in December 2008
– Final Rule publication in the Federal Register is pending
» Nonattainment SIPs will be due in ~April 2012
–May include NOx control in some cases, especially when
coincidental with ozone nonattainment
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2006 PM2.5 NAAQS Nonattainment
EPA Nonattainment Area Map (Dec 2008)
1997 Ozone NAAQS: Recent Activities
� 1997 Ozone NAAQS is 0.08 ppmv» Implementation was delayed due to lawsuits
» SIPs were due in June 2007 and many rules are in place, but
regulatory clarifications could occur in 2009
� EPA pursued regional reductions through the Clean Air
Interstate Rule (CAIR) which allows emissions trading
» NOx and SO2 reductions from Power Plants
» CAIR was a primary strategy in many SIPs
» CAIR was challenged and Court “vacated” CAIR in July
2008; In December, Court reconsidered and remanded to
EPA (i.e., sent it back for revision) without vacatur
– Vacatur left too large of a regulatory hole in SIPs, etc.
� Eastern states threatening regional transport suit to
address NOx from sources in upwind states
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Ozone NAAQS Nonattainment:
1-hr versus 8-hr standards
Nonattainment Areas for
1-hour ozone standard
Nonattainment Areas for
1997 8-hr ozone standard (includes 258 new counties; 474 total)
Clean Air Interstate Rule (CAIR)
Regional Controls
Color scheme indicates
NAAQS of concern:
Blue: O3 and PM2.5
Red: O3 Yellow: PM2.5
� CAIR finalized 3/2005
» Reductions required
in two phases
� Requires emissions
reductions for power
plant NOx and SO2 for
28 states & DC
» Projected 61% NOx
reduction by 2015
» Intended to address
interstate O3 & PM2.5
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“New” Ozone NAAQS
� EPA adopted a lower ozone NAAQS in March 2008
» Schedule driven by litigation
� New NAAQS is 0.075 ppmv (8-hour standard)
» Compared to 1997 standard of 0.08 ppmv
–Rounds to 0.084 ppmv or 84 ppbv
–Many states were challenged to “demonstrate” via
modeling that 84 ppbv could be achieved
–Many states have alluded to the need for broader NOx
controls to address the new ozone NAAQS and ratchet
down below 84 ppbv
2008 Ozone NAAQS: EPA Map
� 345 monitored counties violate 0.075 ppm based on 2004-2006 data
� EPA expects fewer nonattainment counties based on 2006-2008 data
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2008 Ozone NAAQS: NAM Estimate
of Potential Nonattainment Counties (red and yellow counties)
2008 Ozone NAAQS Schedule
� Final Rule published in Fed Register March 27, 2008
� States recommend designations March 12, 2009
» Based on 2006-2008 monitoring data
� EPA nonattainment designations final March 12, 2010*
* 1 year extension possible if insufficient information
� SIPs due for nonattainment areas ~June 2013
» Or, 3 years and 3 months after final designations
� New state control measures implemented 2012+
� Attainment deadline 2013 – 2030
» Depending upon severity of the problem
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2008 Ozone NAAQS: RIA and Stationary Source Implications
� EPA conducted analysis: Reductions to achieve 0.075 ppm
� Regulatory Impact Analysis (RIA) for the new ozone
NAAQS includes CAIR and additional mobile and
stationary source NOx controls
» EPA indicated that RIA is illustrative and not binding, but
strategy may inform upcoming SIPs
– Strategy includes incremental NOx controls from “large”
stationary sources other than Electric Generating Units (EGUs)
� Non-EGU NOx control included for “large” facilities >1,000 TPY that
are 200 km or more from a nonattainment area
» For non-EGU NOx reductions, RIA indicates that natural
gas-fired ICEs provide the largest tonnage of NOx reductions
–Control technology analysis is not thorough, but EPA presumed
Selective Catalytic Reduction (SCR) for lean burn engines
2008 Ozone NAAQS:
RIA Map for Non-EGU Controls
� Counties with
non-EGU
controls in
EPA RIA for
2008 ozone
NAAQS
� NOx controls
for facilities
with NOx
>1,000 TPY
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RIA Implications – “Large” facility
� Assuming 14 g/bhp-hr for reciprocating ICEs:
» 7,400 hp exceeds 1,000 TPY based on potential to emit
» 9,870 hp exceeds 1,000 TPY at 75% utilization
» 14,800 hp exceeds 1,000 TPY at 50% utilization
» 29,600 hp exceeds 1,000 TPY at 25% utilization
� Based on facility ICE horsepower from industry
database:
» 49% of compressor stations > 7,400 hp (ICEs only)
» 42% of compressor stations > 9,870 hp
» 31% of compressor stations > 14,800 hp
» 16% of compressor stations > 29,600 hp
Example State Rules
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Example State Actions: NOx Control
� Recent IL EPA NOx Rule provides examples of
flexible compliance options pursued by operators
� Emissions from oil and gas have been targeted in
several states
» Primary interest appears to be E&P, but gas transmission
could be implicated
» For example: East Texas Rule, Colorado rule for
relocated engines
– Limits <3 g/bhp-hr; lower than other recent NOx RACT rules
» TX and CO examples follow
Illinois EPA NOx Rule
for ICEs and Turbines
� NOx limits (at 15% O2), with averaging allowed:
» 210 ppmv for lean burn ICEs, 150 ppmv for rich burns, 365 ppmv
for Worthington lean burns (500 hp and above subject)
» 42 ppmv for turbines (3.5 MW and above subject)
� Rule provisions include flexible options based on pipeline
group comments and ongoing dialogue over 3+ years» Emission averaging based on “bottom up” budget
» Facility-level annual utilization-based exemption
– 8 MMhp-hrs for ICEs and 20,000 MWh for turbines
» NOx budget allowances can be used in limited cases (e.g., excess
tons from anomaly with emissions averaging or hp-hrs)
» Compliance in 2010 (extra year from earlier proposal)
» Applicability only in nonattainment areas
– Challenge by pipeline group provided time for new modeling to be
considered – negated IL EPA desire for statewide rule
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East Texas Combustion Rule
� Dallas-Forth Worth area is ozone nonattainment
� TCEQ developed IC engine rule for Dallas area» Requires control of rich burn and lean burn engines >50 hp
» Control required by March 2009 or 2010 based on facility size
» NOx limit of 0.5 – 0.7 g/bhp-hr and CO limit of 3.0 g/bhp-hr
» Retrofit control technology challenges for lean burn engines
� Due to pollution “transport” from remote counties,
TCEQ also developed new rule for existing engines in
33 “attainment” counties upwind of Dallas» Focus: Oil & gas operations, rich burn engines >240 hp
–NOx limit: 1.0 g/bhp-hr (240 - 500 hp) or 0.5 g/bhp-hr (>500 hp)
» Compliance required by March 2010
Colorado Relocated Engines
� Typically, relocating an existing engine does not change
its regulatory status – i.e., rules aren’t triggered unless
the engine is modified or reconstructed
� Due to oil & gas growth, Colorado is concerned about
“dirty” engines being moved into the state
� Starting in 2007, engines relocated into CO must meet
emission limits analogous to the IC engine NSPS
» 2.0 g/bhp-hr NOx thru 2010/2011;
» For units relocated after 2010/11, NOx = 1.0 g/bhp-hr
» CO and NMHC standards also apply
» Effective date depends on engine size
– July 1, 2007 for engines >500 hp
– January 1, 2008 for engines from 100 – 500 hp