The Impacts of Air Quality Regulations on the Pipeline Industry An Overview

Transcription

1 The Impacts of Air Quality Regulations on the Pipeline Industry An Overview March 3, 2014 James Smith Air Quality Director

2 Overview Drivers for Increased Regulation Air Quality Regulations Enforcement What s Ahead? 2

3 Drivers for Increased Regulation Boom in O&G production (fracking!) and low NG price Has led to increase in capital projects across supply chain Well-sites / CPFs Pipelines (oil and NG) NG fractionation plants Refinery expansions Terminal expansions Increased pollutant emissions March 4,

4 Drivers (cont d) O&G industry largest source of industrial VOC NOx and formaldehyde from gas-fired sources of primary concern Pipeline facilities a significant source of methane (greenhouse gas) Recent lawsuits have driven EPA to meet previously ignored rulemaking schedules, so new/revised rules have proliferated March 4,

5 Eagle Ford Shale From ~zero to >1,000,000 BOE/day by end of 2013 Page 5

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7 Air Quality Regulations Categories EPA/State construction and operating permit rules (40 CFR 52, 70, 71) Could trigger stringent emission controls Best Available Control Technology (BACT) or Lowest Achievable Emission Rate (LAER) Interstate pipelines - different States can have different permitting procedures Must conduct a permit review before moving engines from site to site New Source Performance Standards (NSPS) (40 CFR 60) New, modified, or reconstructed sources rules target criteria pollutants National Emission Standards for Hazardous Air Pollutants (NESHAP) For Source Categories (40 CFR 63) Maximum Achievable Control Technology (MACT) Rules target defined HAPs at large (major) and small (area) facilities Mandatory Greenhouse Gas Reporting (40 CFR 98) Methane from leaks and vents is primary GHG of concern National Ambient Air Quality Standards (NAAQS) (40 CFR 50) Defined for six pollutants NO2, CO, PM (PM10/2.5), Ozone, SO2, and Pb Nonattainment areas do not meet the NAAQS for a particular pollutant (severities) 1-hr SO2 and NO2 (modeling issue) March 4,

8 Specific Air Regulations List Federal Rules That May Apply. NSPS (40 CFR 60) Subpart A General GG Stationary Gas Turbines IIII Compression Ignition Internal Combustion Engines (diesel) JJJJ Spark Ignition Internal Combustion Engines (gas) KKKK Stationary Combustion Turbines OOOO Crude Oil and Natural Gas Production, Transmission, and Distribution NESHAP for Source Categories (40 CFR 63) Subpart A General R Bulk Gasoline Terminals and Pipeline Breakout Stations HH Oil and Natural Gas Production Facilities TT/UU Equipment Leaks March 4,

9 Specific Air Regulations (cont d) Federal Rules That May Apply (cont d). NESHAP for Source Categories (40 CFR 63) Subpart VV Oil-Water Separators HHH Natural Gas Transmission and Storage Facilities EEEE Organic Liquids Distribution (Non-Gasoline) YYYY Stationary Combustion Turbines ZZZZ Stationary Reciprocating Internal Combustion Engines DDDDD Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters BBBBBB Gasoline Distribution Bulk Terminals, Bulk Plants, Pipeline Facilities JJJJJJ Industrial, Commercial, and Institutional Boilers (Area Sources) GHG Mandatory Reporting Rule (40 CFR 98) Subpart A General C Stationary Fuel Combustion Sources W Petroleum and Natural Gas Systems March 4,

10 Consider State/Local Air Regulations State and local rules can be more stringent than the federal rules (cannot be less stringent) Most States have one environmental protection agency that handles AQ (e.g. TCEQ, LDEQ, NYDEC, etc.) California has CARB, part of Cal/EPA 35 local AQ management districts each with its own set of Air rules March 4,

11 Sections Of An Air Regulation Applicability/Exemptions Emission Limits Operating Limits Work Practice Standards Performance Testing Monitoring Recordkeeping Reporting March 4,

12 Overview of RICE MACT ( Quad Z ) Rule originally issued in 2004, revisions in 2008, 2010, 2011, and 2013 Requires reduction of criteria and HAP emissions from stationary ICE By 2013, US-wide reductions of: CO by 248,400 tpy PM 10 by 6,500 tpy VOC by 27,000 tpy HAP by 6,600 tons per year (tpy) mainly formaldehyde, methanol, acrolein, acetaldehyde Applies to existing and new CI (diesel-fired) and SI (gas-fired) engines located at major and area sources of HAP emissions SI engines two vs four stroke, and rich burn vs lean burn (e.g. 2SLB, 4SRB) Major HAP source emits 10 tpy single HAP or 25 tpy combination of HAPs Area HAP source source that is not major March 4,

13 Existing engine RICE MACT (cont d) Area HAP source: Engines constructed/reconstructed before June 12, 2006 Major HAP source: o Engines 500 bhp constructed/reconstructed before June 12, 2006 o Engines > 500 bhp constructed/reconstructed before Dec 19, 2002 New engine constructed/reconstructed on or after the above dates Emission and operating limits, and work practices, found in the twelve appendix tables Convoluted rule! EPA has a question-based navigation tool to walk you through rule applicability and requirements for your specific operating scenarios March 4,

14 RICE MACT (cont d) Typical after-treatment technologies include Oxidation Catalyst for CO, or Non-Selective Catalytic Reduction (NSCR) for NOx Use only Ultra Low Sulfur Diesel (ULSD) Fuel for Existing Non- Emergency CI Engines > 300 HP and <30 liter/cylinder displacement located at a Major HAP source Engines > 300 hp must be equipped with closed or open crankcase filtration system to reduce metallic HAP emissions (e.g. nickel, mercury) For certain new/reconstructed engines, compliance with RICE MACT is met by compliance with NSPS Subparts IIII (CI engines) and JJJJ (SI engines) March 4,

15 Rule applies to.. GHG MRR Subpart W Offshore and Onshore Petroleum and Natural Gas Production Onshore Natural Gas Processing Onshore Natural Gas Transmission Compression Underground Natural Gas Storage LNG Storage LNG Import and Export Equipment Natural Gas Distribution pipelines and metering stations operated by a Local Distribution Company within a single State (i.e., downstream of city gate ) March 4,

16 GHG MRR Subpart W (cont d) Onshore NG Transmission Compression.means any stationary combination of compressors that move natural gas from production fields, natural gas processing plants, or other transmission compressors through transmission pipelines to natural gas distribution pipelines, LNG storage facilities, or into underground storage. In addition, a transmission compressor station includes equipment for liquids separation, and tanks for the storage of water and hydrocarbon liquids. Residue (sales) gas compression that is part of onshore natural gas processing plants are included in the onshore natural gas processing segment and are excluded from this segment. March 4,

17 GHG MRR Subpart W (cont d) Rule does not set GHG emission limits, only reporting requirements GHGs are Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O) Applicability threshold is 25,000 metric tons (MT) Carbon Dioxide Equivalent (CO2e), applied to each compressor station CO2e (MT/yr) obtained by multiplying individual GHG emission rate (GHGi) with the GHG s defined Global Warming Potential (GWPi) GWPCO2 = 1 GWPCH4 = 25 GWPN2O = 298 March 4,

18 GHG MRR Subpart W (cont d) For NG transmission sector, report GHG emissions from Reciprocating Compressors (rod packing vent line) Centrifugal Compressors (wet seal degassing vent) Transmission Storage Tank Vents Blowdown Vent Stacks NG Pneumatic Bleed Devices (high and low bleed) Fugitive emissions from pipeline component leaks (Also any other combustion sources, e.g. flares) Must report prior year s total GHG (CO2e) emissions by March 31 using EPA s electronic reporting tool (e-ggrt) March 4,

19 Potential Enforcement EPA s Six National Enforcement Initiatives for o o o o o o Keeping raw sewage and contaminated stormwater out of our nation s waters Preventing animal waste from contaminating surface and ground waters Cutting toxic air pollution that affects communities health Reducing widespread air pollution from the largest sources, especially the coal-fired utility, cement, glass, and acid sectors Reducing pollution from mineral processing operations Assuring energy extraction sector compliance with environmental laws For HAPs, EPA focused on three areas of reduction (based on historical non-compliance) 1. Leak Detection and Repair (LDAR) 2. Reducing volume of waste gas to flare and flare control efficiency 3. Excess emissions, including those from Startup, Shutdown, and Malfunction March 4,

20 Potential Enforcement (cont d) EPA Office of Enforcement and Compliance Assurance (OECA) An unprecedented acceleration of natural gas development has led to a significant rise in air pollution throughout the intermountain West. Geospatial analysis suggests that a similar rise in air pollution is possible elsewhere as unconventional gas development grows in other shale plays. EPA will enforce based upon Clean Air Act, Clean Water Act, Safe Drinking Water Act, and other authorities Air regulations (e.g. GHG MRR) have language stating that a violation of any part of the rule constitutes a violation of the Clean Air Act Each day of a violation constitutes a separate violation Civil penalties can range anywhere from zero to $25,000 $35,000/day March 4,

21 What s Ahead? Lowering of Ozone NAAQS (primary) 0.12 ppmv (1-hr) for many years 0.08 ppmv (84 ppbv) (8-hr) in ppmv (75 ppbv) (8-hr) in 2008 Pending: ppbv (8-hr)? Timetable: EPA proposes new standard by Dec 2014 Finalizes new standard by Oct 2015 Will create more Ozone nonattainment areas in US March 4,

22 Ozone NAAQS EPA Ozone Nonattainment Map 75 ppbv March 4,

23 Ozone NAAQS EPA Ozone Nonattainment Map 60 ppbv (projected) March 4,

24 What s Ahead? (cont d) GHG-related issues PSD Tailoring Rule On Feb 24, 2014 US Supreme Court heard arguments on EPA s authority to limit GHG in air permits EPA developed GHG rules for motor vehicles and said the CAA forced similar rules for stationary sources Observers expect high court to curb EPA s authority to limit GHGs in permits 140 facilities already have GHG PSD permits, TX has 80 pending Mandatory Reporting Rule, Subpart W Proposed revisions to expand use of site-specific gas composition data, revise calc. methods for compressors that have safety or operational concerns, remove use of alternative monitoring methods March 4,

25 What s Ahead? (cont d) Pollutant Emission Factor Revisions? On Feb 25, 2014 EPA settled lawsuit by TX/LA community groups who claim factors are too low (emissions are underestimated) EPA has agreed to review/revise factors for emissions of VOC, CO, and NOx from liquid storage tanks, industrial flares, and wastewater treatment systems at refineries and petrochemical plants More Scrutiny of Methane Emissions U.S. Energy Secretary Moniz wants closer look at methane emissions from transmission and distribution systems (says actual emissions higher than EPA s estimates) March 4,

26 Questions? James Smith Golder Associates Inc. 500 Century Plaza Drive, Ste. 190 Houston, TX (281) March 4,

27 Backup Slides March 4,

28 Applications Received Number Air Permit Applications Received (TCEQ) 12,000 10,000 Oil and Gas Projects 9,276 9,664 8,000 Total NSR Projects 6,945 6,000 5,338 5,155 5,623 5,295 4,000 4,512 4,492 3,183 3,559 2,000 1, FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

29 Consider State/Local Air Regulations Ozone Transport Commission (OTC) Multi-state organization tasked with advising EPA on how to solve pollutant transport and ozone NAAQS compliance problem in the northeast Developing model rule for NOx control from equipment in O&G E&P sector, including compressors Evaluated reciprocating gas-fired (SI) engines (2SLB, 4SLB, 4SRB), diesel-fired (CI) engines, and combustion turbines Found that largest sources of NOx emissions from existing recip engines and combustion turbines March 4,

30 Typical Emission Sources / Pollutants Combustion Sources NOx, CO, PM10/2.5, VOC, HAPs, GHG Engines (Diesel-Fired, Gas-Fired) Gas Turbines Compressors Heaters and Boilers Flares Glycol Dehydrators VOC Storage Tanks VOC, GHG Equipment Leaks (aka Fugitives ) VOC, GHG Valves, flanges, pump/compressor seals, sampling stations, pneumatic devices, open-ended lines, etc. March 4,

31 RICE MACT Example Tables Emission Limits for Existing, New, and Reconstructed 4SRB RICE > 500 HP at Major HAP Source For each You must meet the following emission limitation, except during periods of startup... During periods of startup you must SRB stationary RICE a. Reduce formaldehyde emissions by 76%. If you commenced construction or reconstruction between December 19, 2002 and June 15, 2004, you may reduce formaldehyde emissions by 75 % until June 15, 2007 or b. Limit the concentration of formaldehyde in the stationary RICE exhaust to 350 ppbvd at 15% O 2 Minimize the engine's time spent at idle and minimize the engine's startup time at startup to a period needed for appropriate and safe loading of the engine, not to exceed 30 minutes, after which time the non-startup emission limitations apply. 1 Emission Limits for New and Reconstructed 2SLB and CI RICE > 500 HP, and New and Reconstructed 4SLB RICE 250 HP at Major HAP Source For each You must meet the following emission limitation, except during periods of startup... During periods of startup you must SLB stationary RICE a. Reduce CO emissions by 58%; or b. Limit concentration of formaldehyde in the stationary RICE exhaust to 12 ppmvd at 15% O 2. If you commenced construction or reconstruction between December 19, 2002 and June 15, 2004, you may limit concentration of formaldehyde to 17 ppmvd at 15% O 2 until June 15, Minimize the engine's time spent at idle and minimize the engine's startup time at startup to a period needed for appropriate and safe loading of the engine, not to exceed 30 minutes, after which time the non-startup emission limitations apply SLB stationary RICE a. Reduce CO emissions by 93%; or b. Limit concentration of formaldehyde in the stationary RICE exhaust to 14 ppmvd at 15% O 2 3. March CI stationary 4, 2014 RICE a. Reduce CO emissions by 70%; or 31 b. Limit concentration of formaldehyde in the stationary RICE exhaust to 580 ppbvd at 15% O 2

32 GHG MRR Subpart W (cont d) TABLE W-3 OF SUBPART W OF PART 98 DEFAULT TOTAL HYDROCARBON EMISSION FACTORS FOR ONSHORE NATURAL GAS TRANSMISSION COMPRESSION Onshore natural gas transmission compression Emission factor (scf/hour/component) Leaker Emission Factors Compressor Components, Gas Service Valve Connector 5.59 Open-Ended Line Pressure Relief Valve Meter Leaker Emission Factors Non-Compressor Components, Gas Service Valve Connector 5.71 Open-Ended Line Pressure Relief Valve 2.01 Meter 2.93 Population Emission Factors Gas Service Low Continuous Bleed Pneumatic Device Vents High Continuous Bleed Pneumatic Device Vents Intermittent Bleed Pneumatic Device Vents March 4,

33 Ozone NAAQS Interstate and Intrastate Pipelines With Compressor Stations March 4,