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Air Quality Minor Source Permitting Multi-State Comparison Dallas, TX ♦ December 3, 2013
Will Backus ♦ Consultant [email protected]
Presentation Outline • Introduction to Minor Source Permitting • Methods and Assumptions • State Specific Requirements • Permitting Options Comparison • Timeline to Construct Comparison • Conclusions
Trinity Consultants • Founded 1974 • 400 employees in over
35+ U.S. offices plus Canada, China, and Bahrain
• Regulatory compliance and environmental management services
• Focus in air permitting and regulatory compliance
• ISO 9001 quality program
Trinity Locations
Introduction (1 of 3) – Comparison Overview
• Air quality minor permits can vary significantly by state • Scope: Eleven state air quality minor source permitting
programs were compared using multiple metrics for upstream Oil and Gas (O&G) facilities
• Goal: Evaluate the differing state permitting programs for streamlining and efficiency opportunities for industry
Introduction (2 of 3) – Minor Permits • Through the Clean Air Act (CAA) and EPA, authority for permitting O&G minor
sources is delegated to the states – State New Source Review (NSR) Permits are contained in the State Implementation Plan (SIP)
for projects which do not trigger major (federal) NSR review • Minor NSR permits apply to:
– Any new, relocated, modified, or reactivated source that is not otherwise exempt; or – Source emission increase greater than a certain threshold – Other factors including:
• Potential impact on nonattainment areas • Sources subject to any NSPS or NESHAP federal rule • Sources desiring a limit on “potential to emit”
• Generally, sources required to obtain a permit must do so prior to commencement of construction, modification, or operation
Introduction (3 of 3) – Goal of Air Permitting
• Balance protection of the environment and human health with jobs-producing economic development
• Ensure that the public has an opportunity to – Be informed of important government actions – Comment/participate/influence in the important
areas • Do so thoughtfully and cost- and time-efficiently
States Included in Review
StateOil
Production Rank (2012)
Gas Production
Rank (2011)Texas 1 1North Dakota 2 18Oklahoma 5 4New Mexico 6 7Louisiana 7 2Wyoming 8 3Colorado 9 5Montana 12 21Ohio 18 20Pennsylvannia 19 6West Virginia 22 10
Assumptions (1 of 2)
• Focus on upstream, specifically production facilities
• Onshore facility • Facility emissions
typically range from <10 tpy to ~40 tpy for criteria pollutants
Picture Source: npr.org
Assumptions (2 of 2)
• Typical Emission Sources at Production Facilities: – Compressor Engines – Storage Tanks – Pneumatic Controllers – Dehydrators – Flares – Equipment Leaks – Truck Loading
Methods • Analysis metrics evaluated include:
– Construction & Operation Permitting Options
– Exemptions and De Minimis Thresholds
– Timeline to Construct – State O&G Rules and Requirements – Dispersion Modeling Requirements – Public Notice Requirements
Common Permitting Pathways (1 of 6)
• There were 5 common permitting pathways that were analyzed: – Source and De Minimis Exemptions – Registration/ Notification – Permit by Rule (PBR) – General Permit (GP) – Source Specific State Minor Permit to Construct (PTC)/
Permit to Operate (PTO)
Common Permitting Pathways (2 of 6)
• Source and De Minimis Exemptions – O&G minor source production facilities may be
categorically exempt or may fall below state De Minimis permitting thresholds
– Recommended that Facility document their exempt status, and in some cases, report exempt status to state authority
– Careful! Many state level exemptions may go away (especially considering emissions reported by the industry on January 13, 2014, states may seriously re-think exemptions)
Common Permitting Pathways (3 of 6)
• Registration / Notification – One time submittal to the state agency – Registration programs allows a source to acknowledge
that it will comply with all federal and state requirements
• Must submit a short application prior to or following start-up – Cheapest “permitting” option due to short agency
processing times
Common Permitting Pathways (4 of 6)
• Permit by Rule (PBR) – Facilities that will not make a significant contribution of air contaminants to
the atmosphere if operated or constructed with certain restrictions – Adopted by a state when there are a sufficient number of facilities with very
similar operations, emissions, and activities that are subject to the same standards, limitations, and operating and monitoring requirements
– Functions in place of a permit to construct so long as a source meets qualifying criteria, including emission limitations, conditions for operation and requirements for recordkeeping and reporting
– Does not expire as long as the air pollution source continually meets all of the qualifying criteria
Common Permitting Pathways (5 of 6)
• General Permit (GP) – GP are similar to PBRs
• GPs are developed to streamline the permitting process for similar facilities
– Difference between GP and PBR • Recordkeeping and reporting requirements are lengthier for GP • A permit is issued which typically acts as both the construction
and operation permit • Source construction may commence upon receipt of the permit
application
Common Permitting Pathways (6 of 6)
˃ Source Specific State Minor Permit to Construct (PTC) / Permit to Operate (PTO) – Source specific state minor New Source Review (NSR)
permits require full-blown permit application • Typically, generalized permit forms or streamlined
requirements are not included – Source/Facility construction may only commence once
permit is in hand
State-Specific Permitting Overview
Picture Source: CNBC.com
When Considering Permitting Thresholds…
• When determining emissions, you may take “credit” for emission reductions using a vapor recovery unit (VRU) or other device if it is inherent to the process
• Watch out! Each state varies in what is considered an “inherent process”
Texas • Multiple permitting pathways • Permit application is dependent on
geography – Inside Barnett Shale vs. Outside the
Barnett Shale • PBR Thresholds:
– 250 tpy CO or NOX – 25 tpy VOC, SO2, or PM – 15 tpy PM10 – 10 tpy PM2.5
• Case-by-case permits for those that don’t meet Non-Rule Standard Permit or Standard Permit qualifying criteria
Texas – Barnett Shale Permitting • PBR
– Must submit pre-construction notification – Must submit application 90 – 180 days after operation
depending on level of emissions • Non-Rule Standard Permit (SP)
– Must submit pre-construction notification through STEERS (online e-permitting system)
– Must submit application 90 days after operation – Application is almost identical to PBR – BACT
Texas – Outside Barnett Shale Permitting
• PBR – Use individual PBRs for engines, flares, other O&G equipment – Sites can voluntarily submit Barnett Shale PBR application
• Standard Permit – Sites can voluntarily submit Barnett Shale Non-Rule Standard
Permit – Must evaluate additional emission limitations on speciated
VOCs for all units except those using natural gas (i.e., engines, heaters)
Colorado • Standard NSR permits and emission reporting have source-specific
thresholds for attainment and non-attainment areas • Source-specific General Permits, including:
– GP01 for Storage tanks less than 40 tpy VOC – GP02 for RICE with less than 40 tpy NOX – GP07 for truck load out (proposed) – GP08 for condensate, crude oil and produced water; threshold linked
to NSPS OOOO (proposed) • Permit in hand prior to construction • Significant rulemaking proposed in February 2014 will affect
permitting of oil and gas sources
Ohio • GP12 Finalized in February 2012. Notable
qualifying criteria: – Tank size thresholds – Toxic pollutant emission thresholds – HP restrictions on RICE – All RICE must meet NSPS JJJJ/NSPS IIII
requirements (even grandfathered engines) • BAT analysis required for every emission
unit regardless of permit type or PTE • Ohio EPA implemented expanded pre-
permit construction allowances for minor permits in 2006, allowing installation all the way up to final tie-ins
Pennsylvania • Exemption 38: Blanket exemption for drilling
phase/production sites replaced with a conditional exemption in 2013 – Limits on VOC emissions; control requirements – Annual Leak Detection and Repair (LDAR) provisions
• GP5 for Gas Production Facilities which do not fall within under the exemption qualifying criteria
• Best Available Technology (BAT) Requirements
West Virginia • Construction permit required:
– 6 lb/hr or 10 tpy of any regulated air pollutant; or – 144 lb/day any regulated air pollutant; or – 5 tpy aggregated HAP; or – State toxic air pollutant thresholds tripped; or – Subject to NSPS or NESHAP
• G-70A for Natural Gas Wells released in October 2013 • BAT requirements
Louisiana • Standard Oil and Gas Permit
– No longer issued – Existing standard permits are being converted to MSOG or site-specific minor source permit
• Minor Source Oil and Gas Permit (MSOG) – Questionnaire must be filled out to determine applicability; Emission thresholds including:
• 15 tpy PM10 • 20 tpy VOC
– Must convert to site-specific if no longer qualify for MSOG – Allows for facility modifications with notice if modified facility still covered under MSOG
• Site Specific Minor Source Permit – Regular LA minor source permit must be obtained if conditions of MSOG are not met – Not as flexible on modifications as MSOG
• Regulatory Permit for Emergency Engines – Current proposed rule to extend the regulatory permit to all engines – Must eventually be included in permit, but allows for quick approval for site-specific minor source permits and
Title V permits
New Mexico
NOINo Permit Part 72 NSR PSD
<10 tpy
10-25 tpy
>25 tpy>10 lb/hr
NSPS, NESHAP
100/250 tpy
• Notice of Intent (NOI) for sources less than 25 tpy criteria (100 tpy VOC)
• Construction permit application for sources greater than 25 tpy criteria (no construction permit required for VOC sources less than 100 tpy)
• General Construction Permits (GCPs) or New Source Review Permits
Oklahoma • Three oil and gas permitting alternatives exist
beyond a site-specific permit – General Permit for Oil & Gas Facilities – General Permit for Area Source & Small NSPS – Permit by Rule for Oil & Gas Facilities
Oklahoma – GP for Oil & Gas Facilities • Actual and PTE (after control) < “Major” • Notice of Intent (NOI) to Construct
– Forms to describe equipment and emissions – Site diagram/ map – DEQ letter authorization via permit # 2013-xxxx-NOI
• NOI to Operate – Describe any changes from NOI to Construct – DEQ issues permit # 2013-xxxx-0
• Notice of Modification for any changes • Quarterly engine emissions test • Covers all Federal Subparts
Oklahoma – General Permit for Area & Small NSPS
• Actual < 40 TPY and PTE (before control) < “Major” • Notice of Intent (NOI) to Construct
– Forms to describe equipment and emissions – Site diagram / map – DEQ letter authorization via Permit # 2013-xxxx-NOI
• Notice of Intent (NOI) to Operate – Describe any changes from NOI to Construct – DEQ issues Permit # 2013-xxxx-O
• Notice of Modification for any changes • NO quarterly engine emissions test • Covers all Federal Subparts
Oklahoma – New PBR for Oil & Gas • Can cover all Federal NSPS and NESHAP Subparts • Allows taking limits to avoid NSPS or NESHAP requirements
(e.g., can certify <6 tpy VOC for a storage tank to not be subject to NSPS Subpart OOOO)
• PBR Registration Specifics: – NO Notice of modification for changes – NO emission calculations (but keep records) – NO plot plan, map, or flow diagram – NO quarterly engine emissions test – Reduced emission inventory schedule (every 3 or 6 years)
Wyoming • Allows for startup or modification of upstream O&G facilities prior to
permitting provided certain emission control requirements are met. Does not apply to other facilities, where permit must be in hand.
• Presumptive Best Available Control Technology (PBACT) for new wellsites for tanks, dehydration units, pneumatics, and engines; standards are region specific (depending on basin) – PBACT requirements and guidance first published in 1999 – Sites with known emissions must obtain a pre-construction permit
• A complete permit application or waiver application must be filed within 60-90 days of date of first production (DOFP) depending on location; no de minimis thresholds.
• Waivers: – For small/insignificant sources of emissions (small engines, pumps, production
sites with low total emissions)
Montana • Any project which has the potential to emit more than 25 tpy of any
pollutant must obtain an air quality permit prior to construction • Registration program for production facilities (adopted in 2006)
– Registration application must be submitted no later than 60 days after DOFP
– PBACT including VOC control requirements for any unit with a potential to emit of 15 tpy or more; avoided prescriptive control requirements to allow flexibility in control options
– LDAR and additional recordkeeping requirements
North Dakota • State and Industry worked together to create Bakken-
specific guidance in May 2011 – Objective is to help ensure production facilities comply
with VOC emission regulations – Perform emission calculations, and within 60 days, install
additional controls as required – Submit a registration packet within 90 days of the DOFP – Registration package includes one form, gas analysis, and
summary pages for the North Dakota Department of Health Guidance Workbook
Summary of Alternative Permitting Pathways
Timeline to Construct • Important variable in any project involving air
permitting – Trinity examined possible permitting pathways for
O&G production facilities in each state in the study – Relied on previous Trinity permitting experience in
each state – The Timeline to Construct was plotted for every state
based on the two most likely permitting pathways in that state
Timeline to Construct
Reg.
PBR (Option1)
Exempt
Reg.
GP
Reg.
PBR
Waiver
GP
GP
GP
GP (Option 2)
GP
PTC
PTC
GP
GP
PTC
PTC
PTC
PTC
0 30 60 90 120 150 180 210
ND
OK
PA
MT
LA
NM
TX
WY
WV
OH
CO
Timeline to Construct based on Permit Options
Permit Option 2 (Days) Permit Option 1 (Days)
Permit Application Requirements: Modeling
• Modeling is typically a rare requirement since many upstream facilities are largely VOC emissions only
• Two most common pathways to dispersion modeling at production facilities are:
– Emergency generator emissions – Toxics modeling (H2S)
• TX: SCREEN3 modeling for engines (NO2) • OH: Significant Emission Rates (SERs) including
for toxics • CO, NM may require modeling for NSR permit
applications • WY may require modeling on larger case-by-
case projects
Permit Application Requirements: State BAT or BACT
• Best Available (Control) Technology Requirements can be an added step in the permitting process, or may be a presumptive step in order to begin well production
• BAT: Found in WV, PA, OH rules • Presumption BACT (PBACT): Found in
WY, MT, ND
Permit Application Requirements: Public Notice
• For permitting actions that trigger public review, a 30 day review and comment period is typical
• States in review where public notice is typically required for O&G production facilities include: • WV, OH, NM, LA
Conclusions (1 of 2)
• Many states are adopting streamlined permitting approaches for O&G production facilities in response to increased O&G production and federal requirements – Many states are in the process or will likely update rules in response to NSPS
OOOO/ NESHAP HH/HHH • Well registration programs combine sufficient guidelines with an industry
friendly permitting process • Regional similarities (EPA Regions/ Basin Regions)
– WY, MT, ND (Region 8) require PBACT and well registration or a waiver/permit application
– PA, WV (Region 3), OH (Region 5) require BAT and have General Permits for production facilities
– NM, TX, OK, LA (Region 6) do not show as many major similarities • However, Permit by Rule and General Permits are the norm
Conclusions (2 of 2)
• Tier 1 – “High likelihood of a quick permitting process, registration, or exemption”
• Tier 2 – “In many cases a production facility will fall under a streamlined permit’s qualifying criteria”
• Tier 3 – “Higher likelihood of full permit application along with less construction allowances prior to receiving permit”
Further Research Topics • Update state permitting comparison after
responses to NSPS OOOO • Include other O&G upstream facility types
(compressing, gathering, etc.) • Include permitting information on additional
states (CA, AK, etc.)
Questions?