                                                                               
MEMORANDUM   

TO:		Amy Hambrick, EPA/OAQPS/SPPD/FIG

FROM:	Bradley Nelson, EC/R, Inc.

DATE:	April 22, 2016

SUBJECT:	Summary of the February 8, 2016, Meeting with the American Petroleum Institute and the U.S. Environmental Protection Agency 
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I.	INTRODUCTION

This purpose of this meeting was to discuss the comments submitted by the American Petroleum Institute (API) related to the fugitive emission requirements in the September 18, 2015 proposed Oil and Natural Gas Sector NSPS (80 FR 56593) and draft CTG (80 FR 56577).

II.	ATTENDEES

The following is a list of participants in the meeting.

U.S. Environmental Protection Agency
Bruce Moore
Amy Hambrick
Jodi Howard
Ravi Srivastava
Jason Dewees
Jameel Alsalam
Marcia Mia
Charlene Spells

API and Member Organizations
Mike Ford, Hess
Tom Monahan, XTO
Phil Norwood, ERM
Brad Morello, Shell
Dana Wood, BP
Grover Campbell, Devon
Greg Johnston, Chesapeake
Mike O'Connor, XTO
Matt Todd, API
Dennis Newman, Oxy
Shankar Ananthakrishna, Chevron
Vanessa Ryan, Chevron
John Wagner, API
Andrew Baker, Encana
Jeff Adams, BP
Laura Perry, ConocoPhillips
Andy Woerner, ERM

EC/R Incorporated
Bradley Nelson

III.	SUMMARY OF DISCUSSION

Bruce Moore opened the meeting and explained to the attendees that since the EPA is in the post-proposal phase of the NSPS and CTG, EPA personnel would listen to their comments but cannot respond to any of the issues raised. However, the EPA welcomed the comments. The attendees offered the following comments.

NSPS Proposal
 Fugitive Emissions Monitoring Program
 Believes fugitive requirements include unintended sources such as covers, closed vent systems, atmospheric tanks and pneumatics. 
 Suggested regulation changes that clarify that these items are not included in fugitive emission monitoring.
            
 Fugitive Emissions Components Definition
 Stated that the definition of "Fugitive Emission Components" in the proposed rule includes emissions from components that are intended to vent. These components include compressor rod packing and thief hatches. 
 Suggested that components from a closed vent system may also be included in the definition. 
            

 State LDAR Programs
 The API believes that the proposed rule fugitive emissions requirements should not be imposed on sites in states that already have an LDAR program. 
 Commented on overlap of EPA and state rules and general permits. For example, Texas has two minor source and general states have annual reporting of fugitive emissions. Must send monitoring plan and annual report.
 Submit state records to EPA? Not different from Tanks. Tanks is applicability. Need enforcement.
 60.5365(e) not an affected facility under state program.
 Difficulty determining what is equivalent.
 Includes frequency, repair, and reporting.
 Indicated that there was no data available that shows the lack of leak detection technology or leak detection contractors. 
 Believes that the incentive for less frequent monitoring for sites with less than 1% leaking components does not reduce fugitive emissions. Concerned that the 1% of leaking components may be high emitters.
 Provided data that shows that there are a disproportionate number of low throughput wells that are high methane emitters.
 Recommended having a tiered approach for fugitive monitoring based on production or revenue. Provided an analysis of monitoring cost analyses for natural and oil well sites (See attached presentation).
 Recommended basing incentives on innovation rather than the percentage of leaking components.
            
 Low Volume Production Wells
 The 15 BOE/day exemption will not be useful for new sites because this level is consistent with stripper wells and small businesses.
 If LDAR is required at these low producing wells, they may close down. The same exemption from the REC requirements based on a GOR of 300 should be used to exempt well sites from leak detection because LDAR would not be cost effective at that level.
 Stated the less than 4 tpy storage vessel emission exemption is based on cost effectiveness and LDAR would not be cost effective for low volume wells.
 A well site less than 15 BOE/day for 12 consecutive months after startup should not be an affected facility.
            
 Definition of Well Site
 Concerned that the definition of well site modification expands the affected source to include control battery tanks but should only include pads.
 Claimed hydraulically fracturing an existing well does not increase the probability of a leak (same equipment and components), thus the potential emissions rate is unchanged. Pressure/throughput do not change, equipment is not operated at capacity and operating pressure remains below design limits.
 Believed that addition of a new compressor at an existing compressor station does not automatically increase the compressor station's emission rate, thus meeting the definition of a "modification." Installation of a new compressor to replace one or more existing compressors may reduce emissions.
 Stated that increased compressor capacity does not necessarily increase throughput and fugitive emission rate, as it may be added for redundancy and increased reliability. Increased throughput can also occur without increasing the number of compressors if increases remain below currently installed compressor capacity.
 Concluded that EPA's definition of "modification" is overly inclusive. Recommended that the definition be based on the addition of certain large equipment such as a separator, heater or dehydrator, as used for the model plant count basis, to be consistent with the basis of the cost analysis and other fugitive rules. Replacement of existing equipment should not be considered a modification because it does not increase the component count.
            
 Survey Costs
 Additional costs beyond cost of actual survey were not considered and should be included including program design/setup, training, monitoring device calibration, data management and transportation.
 Costs based on survey for corporate plan includes purchase of equipment, which would be the same for small business.
 API added or updated EPA's survey costs based on company information received and claim key differences showing EPA underestimated or did not consider such costs as data collection, OGI equipment purchase and travel. 
 EPA's resurvey cost reflects M21 use of soap bubble method for offline component repair, whereas API resurvey cost assumes 2 hours travel to/from site.
 API included the table: Comparison of Monitoring Costs  -  One Time Company Level Costs.
            
 Monitoring Plans
 Costs for developing and maintaining a corporate- and site-specific plan for every well subject to the rule have not been considered. Factors to consider include use of contract services in some areas and internal staff in others. Additionally, different production areas may dictate different monitoring approaches.
 Believe companies should be allowed to create area monitoring plans in place of site-specific monitoring plans or as an option for corporate-wide plans.
 Requiring a walking path for each site is unnecessary and onerous. Many production areas do not have developed site maps. Concern that plot plans would need to be created in order to then create walking paths.
            
 Recurring LDAR has Diminishing Returns 
 Expressed confusion between EPA rule and Colorado Air Quality Control Commission on origin of 640/60/80 percent emission reduction assumptions.
 Colorado assumptions based on chemical manufacturing industry do not fit with LDAR data observed for upstream ONG industry.
 Number of leaks decrease over time because first survey identifies and correct most of the leaks, with significantly fewer leaks identified in subsequent surveys; however, cost of survey remains the same.
 Recommends annual surveying with no performance based adjustment to the survey frequency.
            
 Gross Emitters
 Insufficient data to define gross emitters.
 Compressors may be gross emitters due to vibration.
 Believe fugitive emission program should be targeted on identifying and correcting high emitting sources; resulting in great cost-efficiency and quicker emission reductions.
 Annual LDAR is sufficient for identifying and correcting the relatively few fugitive sources with very high emission rates.
            
 Comments on the CTG
 Noted that many of the comments and recommendations on the NSPS are also appropriate for the CTG.

