February 12, 2007
Ms. Joyce Spencer
MC 205
Texas Commission on Environmental Quality
P.O. Box 13087
Austin, Texas 78711-3087
Re:
Docket No. 2006-1512-RUL, Rule Project Number 2006-034-117-EN
Proposed Rule on Chapter 117 Reformat, NOx Controls for DFW 8-Hour
Ozone Attainment Demonstration, and Revisions to the Residential Water
Heater Rules
Dear Ms. Spencer:
Texas Oil and Gas Association [“TXOGA”] appreciates the opportunity to file this second
set of comments on the Texas Commission on Environmental Quality’s proposed
rulemaking on Chapter 117, Subchapter E, Division 4, East Texas Combustion (hereinafter
referred to as the “East Texas Combustion Rule”). TXOGA is a trade association whose
members produce, gather, transport, and process crude oil and natural gas in Texas. Its
members own or operate stationary reciprocating internal combustion engines that are
affected by this rule proposal.
Included in this letter are comments resulting from our technical review of the proposed
East Texas Combustion Rule. Line specific comments with recommended changes to the
proposal are found in table format in Attachment No. 1, while a general discussion of some
of our concerns with the proposal is included in subsequent paragraphs below. Also
attached is Table 1, which summarizes the results of our joint survey with the Texas
Pipeline Association [“TPA”] and is referred to in relevant discussions within our
comments.
TXOGA endorses and fully supports comments provided by the Texas Pipeline
Association [“TPA”] in their second letter of February 12, 2007 and generally supports
comments provided by the Engine Manufacturer’s Association [“EMA”] at the Austin
public hearing on February 8, 2007.
While comments specific to this proposal are being provided, this is not meant to diminish
the importance of our request to withdraw this rule proposal. For reasons provided in our
first letter plus additional reasons provided below, withdrawal of the East Texas
Combustion Rule proposal is our primary position. Second to withdrawal of this proposal,
TXOGA recommends exempting engines less than 240 hp and existing lean burn engines.
TXOGA recognizes the need for TCEQ to seek emission reductions in the DFW area as
well as the NETEAC area, and would welcome the opportunity for our members to meet
with TCEQ staff to find ways to achieve this goal.
TXOGA Comments
Docket No. 2006-1512-RUL, Rule Project Number 2006-034-117-EN
February 12, 2007
Page two
Impact of Coal Fired Electric Generation Plants and Engine Count on 2009 Future Case Modeling
In our first comment letter of January 30, 2007, we discussed the following reasons why the East Texas
Combustion Rule proposal should be withdrawn:
 We question the validity of EPA’s Phase 1 Implementation Rule. On December 22, 2006, the U.
S. Court of Appeals for the District of Columbia issued a ruling in South Coast Air Quality
Management District v. Environmental Protection Agency [“South Coast”] that potentially
vacates the rule.
 This proposal to apply nonattainment rules to attainment county sources could set an unjustified
precedent in the oil and gas industry.
 Expectations of control technology that can be applied to small engines and older lean burn
engines are unrealistic.
 The compliance date is not feasible for the majority of engines impacted by this proposal.
 Emission reductions that have been achieved since 1999 need to be taken into consideration.
 The cost of compliance is unreasonable.
Since then, questions regarding the quality of the emissions data used in the TCEQ model have come to
light which raises concerns about the validity of the model used as the basis for this rule proposal. These
questions appear to strengthen our position that the rule should be withdrawn.
The modeling used for this rulemaking appears flawed on at least two counts. First, the emission impacts
of 15 new coal fired electric generating plants were not factored into the model. Second, the assumed
number of existing engines in the 39 county area undercounts the actual number of engines which has
resulted in overly burdensome emission requirements being proposed on the population of engines 50 hp
and higher.
On February 7, 2007, The Texas Clean Air Cities Coalition [“TCACC”] released their emissions
modeling study conducted by the University of Texas at Austin showing the potential impacts of
constructing 15 coal fired electric generation plants by a major Texas electric utility. According to this
study, ozone could at times increase in the DFW area by over 2.0 ppb, easily cancelling out the 0.3 ppb
ozone reduction sought by the impact of the East Texas Combustion Rule.
It appears the TCACC study used as a baseline the TCEQ's 2009 model used for justifying the East Texas
Combustion Rule and added the net emission increases generated by these 15 new plants. The results
from updating the TCEQ model appear to void the impact of emission reductions predicted by the
proposed East Texas Combustion Rule.
From a review of the online air permits database, NSR/PSD applications for the coal fired plants appear to
have been filed in April of 2006, but impacts have not yet been modeled by the TCEQ for the purpose of
the East Texas Combustion rule. Unless the TCEQ has no intention of authorizing construction of these
coal fired plants, the East Texas Combustion rule should be withdrawn until modeling that includes these
coal fired plants can demonstrate that reductions sought by the East Texas Combustion Rule will still
bring DFW ozone emissions into compliance with the 8-hr ozone standard. The cost of compliance with
the East Texas Combustion Rule is simply too high to promulgate a standard with no beneficial effect.
TXOGA Comments
Docket No. 2006-1512-RUL, Rule Project Number 2006-034-117-EN
February 12, 2007
Page three
TXOGA/TPA’s joint survey of only 11 companies summarized in attached Table 1, indicates that the
engine count used for the TCEQ’s model was underestimated by a significant margin. The joint survey
accounts for 1055 engines which exceeds the 985 engine count used in the TCEQ’s model by 70 engines.
Additionally, the TCEQ predicts 850 engines would require control or modification to meet the proposed
emission limits. The TXOGA/TPA survey alone accounts for 726 engines that would require controls,
modification, or replacement.
Based on the proposed emission rates for these engines, our survey alone indicates an emissions reduction
of 53 tpd NOx which exceeds the 37 tpd estimated by the TCEQ.
Due to the undercount in engines, the predicted total emission reduction is underestimated resulting in
expensive and unrealistic emission requirements being proposed. Until modeling can be updated to better
reflect both the impact of the proposed coal fired plants and a more realistic database of engines, TXOGA
again requests the East Texas Combustion Rule proposal be withdrawn or suspended.
Section 117.3300, Applicability
TXOGA requests that Bosque, Somervell, Hood, Wise, Cooke, and Grayson counties be removed from
the list of counties in §117.3300, as they are not in the southerly to easterly wind pattern blowing across
the DFW area that is claimed to occur during ozone exceedence days. Therefore, there is no expected
benefit associated with the inclusion of these counties within this proposal, and they should be removed.
Section 117.3303, Exemptions
Assuming this rulemaking is not withdrawn as TXOGA recommends, there would seem to be room for
exempting both smaller, difficult to control engines and existing lean burn engines while still being able
to achieve needed reductions to satisfy SIP requirements. As discussed in our first comment letter, small
engines could prove difficult to control and older lean burn engines are not capable of achieving emission
reductions proposed in the rule without being replaced.
As shown in attached Table 1, not counting ancillary and testing costs, replacing lean burn engines will
account for 64% of the total cost of control at an unreasonable rate of approximately $28k/ton of NOx for
the larger engines. At the same time, our data shows these engines will account for only 28% of the
emissions reductions sought by this rule proposal.
Additionally, reasonable emission reductions have already occurred for older lean burn engines due to the
VERP and PFP permitting programs which eliminated grandfathering. Newer existing lean burn engines
that can meet the proposed standard have the same federally enforceable limits already in their permit.
Engines less than 240 Hp should be exempted due to concerns with the reliability of controls on this class
of engines. Load swings on this class of engine can be abrupt and continuous which will not allow add on
emissions controls to obtain steady state operation. Many low hp engines are typically used on pump
jacks that swing from 20% load to 100% load two to six times per minute. Also, this class of engine is
used on single well applications where the load on the engine is determined by a small and varying
production stream.
TXOGA Comments
Docket No. 2006-1512-RUL, Rule Project Number 2006-034-117-EN
February 12, 2007
Page four
An industry study through Kansas State University is planned in 2007 to help better understand the
reliability and challenges associated with the control of small IC engines in oil & gas service. This
information will be provided to the EPA for consideration in developing requirements for small engines.
EPA has requested information for the proposed combined engine rule because there is very limited
information on the reliability of controlling this class of engine as referenced (Fed. Reg./Vol. 71, No. 112/
6/7/2006 pgs 33815 – 33820).
The option of replacing these small engines with electric motors is also not practicable for the vast
majority of small remote sources, as the grid is simply not available.
Referring again to Table 1, the emission reductions determined from our survey of 11 companies for
categories of lean and rich burn engines are grouped by horsepower range. For the population of engines
within our limited survey group, a total emissions reduction of 70 tpd NOx is predicted. 53 tpd comes
from emissions reductions from the rule proposal itself, and another 17 tpd comes from emissions
reductions since 1999 that were unaccounted for in the TCEQ model. These reductions come from
shutdowns, engine replacements, and controls, as well as RICE MACT and the VERP and PFP permitting
programs.
If engines less than 240 hp and existing lean burn engines are exempted, deducting emissions from these
engines from the 70 tpd total reduction predicted in our survey results in a net reduction of 39 tpd NOx.
This is still 2 tpd above the 37 tpd the TCEQ is predicting from this rulemaking. Factoring in rich burn
engines unaccounted for in our survey that would be in the nonexempt category will most certainly raise
this emissions reduction.
Section 117.3310, Emission Specifications for Eight-Hour Attainment Demonstration
As stated in our first letter, EGR is not a proven technology, and its application will not work on older
vintage lean burns. SCR is not a real option because of the cost and associated safety issues of handling
ammonia. Industry will not utilize either of these technologies. Therefore, if a unit is not able to meet the
listed emissions standard, the only option is engine replacement. TXOGA supports comments provided
by the EMA regarding the viability of SCR control on existing lean burn engines.
As mentioned in our first letter, the cost of compliance for the proposed emission specifications is
unreasonably high. In fact, the cost is even higher than we first reported. After finishing the analysis of
our survey, cost numbers have been revised upward. As shown in Table 1, instead of the $135M first
reported, the total projected cost of engine replacement and controls for our survey group of 11
companies is $152.9M. Add to that, ancillary costs of trucking, piping and fittings, and labor of $38.2M
plus $4.1M in testing averaged over a 4 yr cycle, and the total cost of compliance for our survey group of
companies is $195.3M or $65M per one-tenth of a ppb ozone reduction in the DFW area. In our first
letter, we estimated an additional 50% cost factor for engines not included in our survey. Applying this
same factor to our revised costs, and the total projected cost could approach $300M.
TXOGA Comments
Docket No. 2006-1512-RUL, Rule Project Number 2006-034-117-EN
February 12, 2007
Page five
If existing lean burn engines and engines less than 240 hp are exempted as recommended, the total cost to
our survey group is significantly reduced to a total of about $51M including 25% for ancillary costs. The
difference in cost/ton of NOx reduced is also significantly lower, going down from an average $10.1k/ton
to $6.4k/ton.
Again, TXOGA appreciates the opportunity to provide comments. It is our hope the TCEQ will
withdraw or suspend the East Texas Combustion Rule proposal. If not, we request the TCEQ to exempt
small engines less than 240 hp and existing lean burn engines as well as adopt specific line item changes
recommended in Attachment 1 to make the rule proposal more appropriate for use in attainment area
counties. If you have any questions regarding our comments, please call me at (512)478-6631.
Sincerely,
Debbie Hastings
Vice-President for Environmental Affairs
DH:ad
Attachment