New Emission Rules for IC Engines

1. New Emission Rules for IC Engines • Presented by • Scott Wallace • Devon Gas Services, L.P.

2. Topics of Discussion • ● Consolidated Engine Rule • NSPS JJJJ for SI Engines • Update to RICE MACT • Area Source RICE MACT • ● Control Requirements • ● Testing • ● Records www.devonenergy.com

3. Consolidated Engine Rule Background • Three Separate Rules in One • New Source Performance Standard (NSPS) (60 Subpart JJJJ) • NESHAP, MACT Small Engine Standard (63 Subpart ZZZZ) (< 500 HP at a Major HAP Source) • National Emission Standards for Hazardous Air Pollutants (NESHAP) Areas Source Standard (Everything that is not a Major HAP Source is an Area Source) • Proposed June 12, 2006 • Comment Deadline 10/11/2006 • INGAA and API supplied major comments • Rule Finalized 12/20/07; Published 1/18/08; Effective 3/18/08 • Follows CI, ICE Philosophy www.devonenergy.com

4. Consolidated Engine Rule Overview • NSPS JJJJ establishes minimum requirements for new or modified Spark Ignition engines with requirements based on size, type and date of manufacture • NESHAP RICE MACT • ● Major Source Sites (< 500 HP) follow NSPS JJJJ for new/reconstructed engines and your in compliance (Lean Burns require an oxidation catalysis for a 93% reduction in CO) • ● Minor Source Sites follow NSPS JJJJ for new/reconstructed engines and your in compliance. • Undecided on existing engines with rule to be issued in early 2009 with a final rule in 2010 www.devonenergy.com

5. Consolidated Engine Rule –New Engine Control Requirements www.devonenergy.com

6. NSPS General Certification Criteria • ● Manufacture’s Certification • All IC Engines 25 HP or less require certification for • any engine manufactured after 7/1/2008 • Certification on larger NG fired engines is • voluntary (Note: if an engine is certified and • operated as a certified engine the manufacture’s • requirements are not voluntary) • Certification process is the same as the • mobile source rule www.devonenergy.com

7. NSPS Monitoring • ● Compliance monitoring requirements include adherence to manufactures emissions related operating and maintenance specifications for certified engines • ● Uncertified or certified engines operated in an uncertified manor require an individual written maintenance plan • ● Also applies to emissions control vendors requirements (NSCR and Oxidation Catalysis) www.devonenergy.com

8. NSPS Testing • Certified engines operated in a certified manner do not require performance testing • Performance testing required on all uncertified engines: • < 100 hp certified engine operating in non-certified manner no test required • 25 hp –500 hp engines that are not certified subject to initial performance test within first year of operation. • 100 hp – 500 hp certified engine operating in non-certified manner initial performance test required within 1st year of operation. • > 500 hp certified engine operating in non-certified manner or non-certified engines are subject to initial performance test within first year of operation and every 8760 hours or 3 years. www.devonenergy.com

9. Testing Frequency • Greater than 500 hp •  Initial performance test •  Periodic test every 8760 hours or 3 years, which every comes first. • Less than 500 hp, but greater than 100 hp •  Initial performance test • Less than 100 hp, but greater than 25 hp •  Initial test for uncertified engines •  No testing for certified engine, even if operated as uncertified (i.e. non-specification fuel and owner written maintenance plan www.devonenergy.com

10. Performance Testing General Information • ● Initial performance test must be performed “within 60 days of achieving maximum production rate . . . , but not later that 180 days of initial startup.” • ● Certified engines, operated as uncertified engines have 1 year to perform initial performance test. • ● Performance testing required on CERTIFIED engines after overhaul • ● Test performed “within 10% of 100% peak (or the highest achievable) load. • ● Test consist of 3 – one hour test runs • ● Test must be for NOx, CO and VOC using prescribed EPA methods. • ● Unit does not have to be started-up just to perform test, but test must be run on start-up. www.devonenergy.com

11. NSPS: Recordkeeping and Reporting • ● All IC engines must maintain records of proper maintenance • ● Initial construction notification required within 30 days for uncertified engines > 500 HP • ● Notification at least 30 days prior to emissions testing • ● Certified engines require manufacturer’s documentation indicating the engine is certified to meet emissions standard • ● Uncertified engines require performance test and period test must be submitted within 60 days of completion • ● Emergency engines must maintain records of all operations www.devonenergy.com

12. Comments and Considerations • ● Engines that are overhauled are not considered modified unless an emissions increase has occurred. • ● These are minimum standard and the state may have additional requirements • ● As with existing NSPS and NESHAPS requirements, the “act of relocation” in of itself does not trigger applicability. The unit must be modified, reconstructed, or newly constructed within the prescribed dates. • ● Generally, reconstruction is defined as repairs where the fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to purchase an entirely new engine. • ● Title V permits will need to be modified to incorporate the NSPS Subpart JJJJ and NESHAPS Subpart ZZZZ as applicable requirements when subject engines are installed at title V sites. www.devonenergy.com

13. Additional Information • Internet links: http://www.epa.gov/ttn/atw/rice/ricepg.html Fact sheet  • http://www.epa.gov/ttn/oarpg/t1/memoranda/SI%20and%20RICE%20fact%20sheet%2012%2020%2007%20Scout.pdf Rule  • http://www.epa.gov/ttn/oarpg/t1/memoranda/SI%20NSPS%20NESHAP%20FRM%2012-20-07.pdf • API Training completed Summer 2008 (additional courses?) • Go to API.org under “meeting and training” to get the status of the training courses • API is planning to make the training manual available www.devonenergy.com

14. Questions ? • Answers. www.devonenergy.com