Design, Permitting and Construction Considerations for Marcellus Shale Gas Compressor Stations

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Design, Permitting and Construction Considerations for Marcellus Shale Gas Compressor Stations

Air Quality Permitting

All4, Inc.Roy Rakiewicz – Senior Consultant

John Slade – Senior Consultant

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Overview

• Why Air Permitting Matters• What’s Different in Pennsylvania?• Ozone Nonattainment• PM2.5 Nonattainment• Prevention of Significant Deterioration• Source Definition• GHG Tailoring Rule• Federal Regulations• Planning/Intangibles/Strategy

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Why Air Permitting Matters

• Sources of emissions– Turbines, reciprocating internal combustion

engines, dehydration units, separators, re-boilers, etc.

• Air pollution control equipment– Oxidizers, flares, condensers, etc.

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• Emission Profiles– Combustion products

o Nitrogen oxides (NOX)o Carbon monoxide (CO)o Particulate matter (PM/PM10/PM2.5)o Sulfur dioxide (SO2)o Total Hydrocarbons (THC)

– Process Emissionso Total hydrocarbons (THC)o Hazardous Air Pollutants (HAPs)

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• Permits and Rules– State “pre-construction” air permitting

requirements– Federal “pre-construction” air permitting

requirements– State/Federal operating permit requirements– State implementation plan (SIP) rules– Federal rules (e.g., NSPS and NESHAP)

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• Public Perception– Air permit applications and proposed permits are

available for public review and comment– Opportunities for public hearings– Company reputation– Publicity– Municipal government notice and comment– Concerned non-governmental organizations

(NGOs)

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What’s Different in Pennsylvania?

• List of exempt activities (subject to change)• General permits (subject to change)• Nonattainment areas

– Ozone– PM2.5

• Complex Terrain

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What’s Different in Pennsylvania?

Map from http://www.dcnr.state.pa.us/topogeo/map13/map13.aspx

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Ozone Nonattainment

• Northeast Ozone Transport Region (OTR)– Established by § 7511c (a) of the Clean Air Act

(CAA)– Includes Maine, New Hampshire, Vermont,

Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Maryland, Delaware, the northern counties of Virginia, and the District of Columbia

– Entire area is minimally considered as a moderate ozone nonattainment area

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Ozone Nonattainment

• OTR Requirements– §7511c (b)(1)(A): enhanced vehicle inspection and maintenance– §7511c (b)(1)(B): Reasonably Available Control Technology

(RACT) for major (> 50 ton) VOC sources – §7511a (b)(1)(A)(ii)(II): RACT for major (>100 to) NOX sources – §7511c (b)(2):

• Any stationary source that emits or has the potential to emit at least 50 tons per year of VOC shall be considered a major stationary source

• Such sources shall be subject to the requirements which would be applicable to major stationary sources if the area were classified as a moderate nonattainment area.

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Ozone Nonattainment

• Pennsylvania SIP Nonattainment New Source Review (NSR)Requirements– 100 tpy major source threshold for NOx nonattainment

NSR (NNSR)permitting vs. 250 tpy in “attainment areas”– 50 tpy major source threshold for VOC NNSR permitting vs.

250 tpy in “attainment areas”– For existing facilities, aggregation of contemporaneous

VOC or NOx emission increases– Lowest Achievable Emission Rate (LAER) and emission

offset (1.15 to 1) requirements

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PM2.5 Nonattainment

• Scattered fine particulate matter (PM2.5) non-attainment areas throughout state– Major modification threshold is 10 tpy and includes

condensable PM – Proposed Pennsylvania PM2.5 NNSR rules include

aggregation of contemporaneous PM2.5 emission increases

– Sulfur dioxide (SO2) is a PM2.5 precursor, but will not likely trigger applicability at 100 tpy

– NOX to be a precursor for PM2.5 emissions in Pennsylvania

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PM2.5 Nonattainment

• Significant increase in PM2.5 precursors (NOX and SO2) in PM2.5 nonattainment area triggers NNSR

• PM2.5 Emission Reduction Credits (ERCs) are generally not available

• Direct PM2.5 ERCs and PM2.5 precursor ERCs must be in the vicinity of the project

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PM2.5 Nonattainment

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Prevention of Significant Deterioration

• Best Available Control Technology (BACT)• Ambient air quality impacts analysis• “Double Jeopardy” for ozone and PM2.5 precursor

pollutants NO2 and SO2

• Stringent new National Ambient Air Quality Standards (NAAQS) for PM2.5, NO2, and SO2

• Attainment designations not yet made for NO2 and SO2 NAAQS

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Pollutant 1-hr (µg/m3)

3-hr(µg/m3)

24-hr(µg/m3)

Annual(µg/m3)

PM2.5 -- -- 35 15

NO2 188 -- -- 100

SO2 196 1300 -- --

Recently Revised NAAQS

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• Anticipated NAAQS Related Issues:– Very low Significant Impact Levels (SILs)– Elevated “background” concentrations– Revised NO2 and SO2 NAAQS 1-hour standards

oWorst-case conditions will dominate the modeled concentrations (emissions and meteorology)

– Attainment designations based solely on modeling– For PSD projects NAAQS could dictate level of

control (e.g., BACT may not be sufficient)

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Source Definition

• Source Aggregation– Why is aggregation important?• PTE of “source” defines air permitting requirements

(and schedule)• The definition of “source” under NSR and Title V has it

roots in the case of Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1979)• Source was limited by the four statutory terms,

“structure, building, facility or installation”• U.S. EPA can treat contiguous and commonly owned

units as a single source if they fit within these terms

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Source Definition

• The U.S. EPA defined “stationary source” facility to mean any building, structure, or facility which meets three criteria:– (1) belong to the same two-digit SIC Code; – (2) are under the control of the same company; and – (3) are located on one or more contiguous or adjacent

properties

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Source Definition

• U.S. EPA issued source aggregation guidance for oil and gas activities (Jan. 2007)– Guidance indicated that well sites and other production

activities occurring over large geographical distances should be treated as separate sources

– U.S. EPA withdrew the January 2007 guidance (Sept. 2009)– U.S. EPA required the Colorado Department of Public

Health and Environment (CDPHE) to explain its failure to aggregate commonly owned gas wells with a compressor station for NSR (and Title V) applicability

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Source Definition

• U.S. EPA will be making case-by-case permitting determinations consistent with their interpretation of source aggregation

• Agency interpretation of aggregation policy is expected to be more conservative on such determinations

• Aggregation is currently being discussed at PADEP in relation to natural gas development

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GHG Tailoring Rule

• May 13, 2010: U.S. EPA issues final rule establishing NSR and Title V thresholds for greenhouse gas (GHG) emissions

• The rule “tailors” the requirements of NSR and Title V programs to restrict rule applicability

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GHG Tailoring Rule

• Step 1: January 2, 2011 to June 30, 2011 – Sources currently subject to the PSD permitting or

Title V programs will be subject to permitting requirements for their GHG emissions

– Only GHG increases of 75,000 tpy or more of total GHG (CO2e basis) trigger PSD and BACT for GHG emissions

– No sources will be subject to Clean Air Act permitting requirements due solely to GHG emissions

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GHG Tailoring Rule

• Step 2: July 1, 2011 to June 30, 2013– PSD will be triggered for new construction projects

that result in GHG emissions of at least 100,000 tpy regardless of any other pollutant

– PSD will be triggered for modifications at existing major facilities that result in GHG emissions increases of 75,000 tpy

– Facilities that emit at least 100,000 tpy of GHG as CO2e will be subject to Title V permitting

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GHG Tailoring Rule

• U.S. EPA will propose “Step 3” to begin in 2011 and conclude no later than July 1, 2012– Step 3 will include streamlining options to limit

permitting for sources with greenhouse gas emissions > 50,000 CO2e tpy

– U.S. EPA will not require permits for smaller sources in Step 3 or through any other action until at least April 30, 2016

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Federal Regulations

• Standards of Performance for New Stationary sources (NSPS) requirements– 40 CFR Part 60 Subpart KKK – Standards of Performance

of Equipment Leak VOC from Onshore Natural Gas Processing Plants

– 40 CFR Part 60 Subpart JJJJ– Standards of Performance for Stationary Spark Ignition Internal Combustion Engines

– 40 CFR Part 60 Subpart IIII – Standards of Performance for Compression Ignition Internal Combustion Engines

– 40 CFR Subpart KKKK—Standards of Performance for Stationary Combustion Turbines

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Federal Regulations

• NESHAP requirements – major and possibly area sources of HAP– 40 CFR Part 63 Subpart HH – National Emission Standards

for Hazardous Air Pollutants from Oil and Natural Gas Production Facilities

– 40 CFR Part 63 Subpart HHH – National Emission Standards for Hazardous Air Pollutants: Oil and Natural Gas Production and Natural Gas Transmission and Storage

– 40 CFR Part 63 Subpart ZZZZ - National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion engines

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Air Permit Planning Issues

• General permits and applicability• Air permitting “exemptions”• Components of processing plants and

compressor stations are air emission sources• Major/minor sources are subject to differing

requirements and timelines• Air permits must be obtained prior to

“beginning actual construction”

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• Typical “minor source” permitting timeline:– Application Preparation (source) is 2 to 3 months

(typical)• Best Available Technology (BAT) for new sources

– PADEP review is typically 4 months, but can be up to 6 months

– Public comment period = 30 days

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• Typical “major” source permitting timeline (PSD and/or NNSR)– Application Preparation (source) typically 4 months

o BACT in attainment areas o LAER in non-attainment areaso Dispersion modeling (PSD)o Emission offsets (NNSR)

– PADEP technical review can be up to 12 months (or longer)– Public comment period and possible hearing = 30 days– U.S. EPA review and comment = 45 days– Total timeline = 18 months

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Intangibles

• Reputation• Not in my backyard• Guilt by association• Recent history and publicity• Public interest (this is an area where NGOs can

impact schedules)• Nuisance issues– Noise– Odor

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Strategy

• Master planning– Schedule– Identify potential delays and plan for them

oCommunication with local government, community, and NGOs

– Minimize agency review turnaround time– Relationships– Reputation

Documents

Design, Permitting and Construction Considerations for Marcellus Shale Gas Compressor Stations