1. Caterpillar Engine Conference November 2009
NSPS, NESHAP &
Emissions Section Only.
Caterpillar Engine Conference November 2009
Gas Compression NPI Update
Jim Cue and Vic Sheldon

2. Agenda Emission Regulations – Review of NSPS & regional regulations
Gas Generator Sets for Oil and Gas Applications
Natural Gas Engine Product Line Overview
Break
95 – 220 hp Gas Engine Update (G3300)
215 – 637 hp Gas Engine Update (G3400 – CG137)
524 – 1725 hp Gas Engine Update (G3500 Options)
6000 – 8180 hp Gas Engine Update (GCM34)
Gas Engine Rating Pro (GERP) Update (Optional Attendance)

3. Agenda Emission Regulations – Review of NSPS & regional regulations
Gas Generator Sets for Oil and Gas Applications
Natural Gas Engine Product Line Overview
Break
95 – 220 hp Gas Engine Update (G3300)
215 – 637 hp Gas Engine Update (G3400 – CG137)
524 – 1725 hp Gas Engine Update (G3500 Options)
6000 – 8180 hp Gas Engine Update (GCM34)
Gas Engine Rating Pro (GERP) Update (Optional Attendance) 3

4. Emissions Regulations – NSPS and regional regulations
National
EPA defines minimum standards and rules for the U.S.
New Source Performance Standards, Nonroad Source Rules
National Air Quality Attainment Requirements
States or Local
State Specific Standards (at least as strict as EPA)
Permits
Critical Area Rules: Non-attainment, Parks, BLM etc.
National – NSPS and NESHAP are the two major ones for stationary engines

5. National - SI NSPS and NESHAP
SI NSPS : (Stationary) Spark Ignited New Source Performance Standards
Published January ’08, Effective March ’08.
1st New engine requirements retroactive to July ‘07.
1st Remanufactured or Modified (RM) engine requirements retroactive to June ’06.
Applies to new, reconstructed or modified stationary engines.
Based on the date of engine manufacture, reconstruction or modification, not the date of installation.
Caterpillar and EMAs current dialogue with EPA on to obtain more clear wording which can be applied to engines has not yet resulted in EPA commitment to change from current definitions.
Were NESHAP requirements in 02, were revised in 08, and are being revised again.
Any engine that is previously regulated prior to NSPS has to continue to meet those regulations.
Any engine that is unregulated, may remain unregulated for the time being, but this is under review.
Need to provide information on how end users input to EPA. Is there a comment period remaining where they can comment or is there a special procedure? Most likely this would be via and industry group - API, INGAA or GCA.

6. National - SI NSPS Emissions Standards
Any engine built before the dates in the blue, and reconstructed or modified after June 12, 2006, needs to meet the white regulations.
Refer to stages as first and second stage.
There are alternate ppm values that may be advantageous depending on engine efficiency.
There are standards for other applications as well. (ie. Landfill, etc.)

7. National - NESHAP and SI NSPS
NESHAP : National Emissions Standards for Hazardous Air Pollutants
Update to existing rule published January ’08, Effective March ’08.
Existing requirements back to ’02.
Applies to new or reconstructed stationary engines.
Are working on applying rule to all existing stationary engines.
Newly regulated engines only have to meet SI NSPS.
Caterpillar and EMAs current dialogue with EPA on to obtain more clear wording which can be applied to engines has not yet resulted in EPA commitment to change from current definitions.
Were NESHAP requirements in 02, were revised in 08, and are being revised again.
Any engine that is previously regulated prior to NSPS has to continue to meet those regulations.
Any engine that is unregulated, may remain unregulated for the time being, but this is under review.
Need to provide information on how end users input to EPA. Is there a comment period remaining where they can comment or is there a special procedure? Most likely this would be via and industry group - API, INGAA or GCA.

8. NESHAP Notice of Proposed Rule Making
National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; Proposed Rule change.
Would change 40 CFR 63, subpart ZZZZ
Regulates all previously unregulated SI and CI existing and new stationary engines.
Intended to drive the use of Catalysts
Adds Startup, Shutdown and Malfunction Requirements
Adds Mandatory Maintenance Requirements
Over 180 comments were submitted.
NPRM – Notice of Proposed Rule Making – Spell this out on slide.
EMA – Engine Manufacturers Association
Submitted our comments to the EMA and to the EPA.
In speaking with EPA, we discussed our comments, going again in October to see what they are thinking of proposing for our final.
Any new engine installed after 3/31/2009 needs to be compliant at the date of promulgation. All existing engines need to comply by 2/10/2013.
Still dialogue going on.

9. NESHAP Notice of Proposed Rule Making
NPRM – Notice of Proposed Rule Making – Spell this out on slide.
EMA – Engine Manufacturers Association
Submitted our comments to the EMA and to the EPA.
In speaking with EPA, we discussed our comments, going again in October to see what they are thinking of proposing for our final.
Any new engine installed after 3/31/2009 needs to be compliant at the date of promulgation. All existing engines need to comply by 2/10/2013.
Still dialogue going on.

10. NESHAP Notice of Proposed Rule Making
HAPs - ~188 regulated compounds
Represented by a surrogate: Typically Formaldehyde, CO or VOC
Major Source site, 10 tons/yr single HAP, or 25 tons/yr all HAPs
Area Source – Anything that is not a Major Source

11. NESHAP Notice of Proposed Rule Making

12. NESHAP Notice of Proposed Rule Making

13. Example of Proposed NESHAP Ruling
G3406 NA Engine purchased in 1996
215 bhp at 1800 rpm Rich Burn
Area Source Compression site anywhere in the USA
Requires change from Standard “Best Efficiency” to Catalytic setting
Normal operation
40CFR60 JJJJ
40CFR c
Startup, Shutdown & Malfunction

14. State Emissions Highlights
Colorado, East Slope (Denver Area) Nonattainment
Wyoming, Sublette County
New Mexico, Aftertreatment Permits
Texas, HGB Nonattainment
Regional Regulation Activity

15. Colorado, East Slope (Denver Area) Non-attainment Area
The Denver area did not meet the federal 8 hour Ozone requirements
Colorado submitted a State Implementation Plan (SIP) that shows compliance by 2012

16. Colorado, East Slope (Denver Area) Non-attainment Area
New Rule
New, modified or relocated-into-the-state SI ICE must meet the SI NSPS emissions standards in place when the installation occurs.
Existing RB ICE >500 hp must have 3 way catalysts, and Air/Fuel controllers by May 1, 2010.
Existing LB ICE >500 hp must have oxidation catalysts by May 1, 2010, unless they are built before June 1, 2004 and the retrofit costs more than $5000/ton VOC.
Engines regulated under 40 CFR 60, or operating under MACT or BACT requirements are excluded.

17. Changes “Notice of Intent” Permit Policy
New Mexico
Changes “Notice of Intent” Permit Policy
Previously did not count aftertreatment in their consideration of “potential emission rate”.
Aftertreatment used in meeting the CI NSPS, SI NSPS or NESHAP will now be accepted.
Limits the number of engines that need to go through the full air permit process.
New Mexico
Basically similar to NSPS, but trying to add rules for RB Engines < 300 bhp.

18. Wyoming Interim Permit Policy in Sublette County
1 Measurement > Ambient NOx standard
Effectively caps VOC and NOx Emissions
Requires reduction of 1.5:1 for VOC, and 1.1:1 for NOx
Still Working on Permanent Measures
Gas engines to replace diesel engines in drill rigs
SCR in diesel drilling application
Regulation of Diesel Engines as Stationary

19. Texas, HGB Nonattainment
The Houston Area has been redesignated as a Severe Nonattainment area.
SIP update by 4/15/10.
Mandatory CAA compliance by 6/15/19
New rules for engines in the area likely.
SIP – State Implementation Plan
CAA – Clean Air Act
HGB – Houston-Galveston-Brazoria

20. Regional Regulation Activity
Four Corners Task Force
National engine emission rules will improve air quality without other measures.
Adding 3-way catalysts to existing RB engines is the only engine measure that showed other significant improvement.
Marcellus Shale
Just now evaluating potential air quality impacts.
Initial focus is on limiting drilling emissions.
Oklahoma & Arkansas
SI NSPS is enough for now.

21. Key Summary Points Emission Regulations – Review of NSPS & regional regulations
National Regulations
NSPS
Applies to every new engine
Based on born on date
Next key date is July 1st, 2010
NESHAP
Proposed plan has not been finalized
Based on start up date
Next key date is February 10th, 2010
States or Local
Typically more strict than National Regulations
Non – Attainment Areas
National – NSPS and NESHAP are the two major ones for stationary engines

22. Questions?

23. Back Up Slides

24. National - NESHAP Requirements, SI & CI
The EPA lists 188 Hazardous Air Pollutant compounds. Formaldehyde, Acetaldehyde, Benzene, Toluene, 1-3 butadiene are the most common produced in significant quantities from engines, but others can be present.
Major Source = One HAP > 10 tons/yr, or All HAPs > 25 tons/yr
HAPs are regulated at major and area sources, as shown:
Regulation
Bhp
Major
Area
>500
Existing HAPs
Requirements*
Meet NSPS Requirements
Meet NSPS Requirements *
*4SLB engines >= 250 bhp must meet existing HAPs requirements.

25. National - SI NSPS Reconstruction Definition
Defined in 40CFR60.15
“‘‘Reconstruction’’ means the replacement of components of an existing facility to such an extent that the fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility, and it is technologically and economically feasible to meet the applicable standards set forth in this part.”
Reconstruction is assessed on a case by case basis by the Administrator.
The administrator will either be a regional EPA office, or a state office.
Administrators are not yet defined
Definition of facility is not yet defined

26. National - SI NSPS Reconstruction Definition
API and INGAA understanding of what will likely be included in the calculation based on past EPA history with industrial sources.
"A reconstruction event consists of all of the applicable cost performed at a single time, unless the related changes are phased due to cost or compliance purposes. In the simplest terms, the fixed capital costs of the new components (the numerator) includes the engine cost of all new parts, labor, transportation, and other associated cost with completing the work and returning the engine to operation. The fixed capital cost that would be required to construct a comparable new source (the denominator) include all parts, labor, transportation, engineering and other associated cost to obtain, install, and startup a similar new unit. In addition, the cost considerations are limited to the engine and do not include the driven equipment (e.g., a separable compressor)."
If tripped, must notify Administrator, postmarked 60 days before start of reconstruction, or as soon as practicable.
Administrator has 30 days from receipt to reply.
Administrators are not yet defined
Definition of facility is not yet defined

27. National - SI NSPS Modification Definition
Defined in 40CFR60.14
Modification is “…any physical or operational change to an existing facility which results in an increase in the emission rate to the atmosphere of any pollutant to which a standard applies…”
“Emission rate shall be expressed as kg/hr of any pollutant discharged into the atmosphere.”

28. National - SI NSPS Modification Definition
Modification as defined in 40CFR60.14, Modification is not:
Maintenance, repair, and replacement which the Administrator determines to be routine
An increase in production rate of an existing facility, if that increase can be accomplished without a capital expenditure on that facility.
An increase in the hours of operation.
Use of an alternative fuel or raw material
The addition or use of any system or device whose primary function is the reduction of air pollutants
The relocation or change in ownership of an existing facility.

29. National - SI NSPS O&O Compliance
In most instances, Owners and Operators (O&O) have two options for compliance:
Purchase certified engines
Certification must come from an Engine Manufacturer.
Reduced national testing requirements.
No site notification requirement.
State or local testing still applies where applicable.
Increased operating limitations. Engines can become “non-certified”
CAT is looking for input on whether the market requires this option.
- or -
Prove engines compliant on site
Compliance is demonstrated with on site testing.
Increased national testing requirements.
Site notification required.
Maximum operating flexibility.
EPA

30. National - SI NSPS O&O Compliance
Requirements for Certified Engines
In compliance
Must operate and maintain the engine according to the Manufacturer’s emission-related instruction.
Must keep maintenance records, certification documentation, and notifications.
No site testing required.
Out of compliance
If not operated and maintained according to the Manufacturer’s emission-related instructions, then then engine changes status from “certified” to “non-certified”, and remains in that certification status for the remainder of its useful life.
The engine must be operated only on fuels for which it was certified to maintain its certified status.
Must maintain and operate the engine in a manner consistent with low emissions practices.
Must keep maintenance records, testing documentation, and notifications.
Requires site testing to verify compliance. (see next slide)
EPA

31. National – SI NSPS O&O Compliance
Testing Requirements for Out of Compliance Certified Engines
<100 hp
No testing is required.
>= 100 hp and <= 500 hp
The O&O must conduct initial performance test within 1 year of engine startup.
The O&O must submit performance tests within 60 days of test completion.
> 500 hp
The O&O must test every 8,760 hours or 3 years, whichever comes first.
Submit performance tests within 60 days of test completion.

32. National – SI NSPS O&O Compliance
Requirements for Non-Certified, Remanufactured or Modified Engines
May develop their own O&M plan.
Must keep maintenance records, testing documentation, and notifications.
May operate on any fuel, but must maintain and operate the engine in a manner consistent with low emissions practices.
Submit performance tests to administrator within 60 days of test completion.
> 25 hp and <= 500 hp
Conduct initial performance test.
No further testing required.
> 500 hp
Submit initial site notification to administrator (>= 500 hp)
Conduct initial performance Test.
Test every 8,760 hours or 3 years, whichever comes first.

33. National - SI NSPS O&O Compliance
On-site Testing
Test during normal operation within 10% of 100% peak load or highest achievable load.
Three test runs of at least 1 hour for each required performance test.
Test methodology is detailed in 40 CFR and 40 CFR 60, subpart JJJJ, Table 2.
EPA

34. National - NESHAP Requirements, SI and CI
Rules that still exist and were implemented in For new engines at major sources.
The new rule is not trying to lower these rules. These rules were trying to be BACT.

35. Discretion is recommended when distributing.
Information contained in this publication may be considered confidential.
Discretion is recommended when distributing.
Materials and specifications are subject to change without notice.
CAT, CATERPILLAR, their respective logos, ADEM, “Caterpillar Yellow” and the POWER EDGE trade dress,
as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.
LESWXXXX-00 (11/09) 2009 Caterpillar All rights reserved.