BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
1
)
NOx EMISSIONS FROM STATIONARY
)
R07-18
RECIPROCATING INTERNAL COMBUSTION
)
(Rulemaking
-
Air)
ENGINES AND TURBINES:
)
AMENDMENTS TO 35 1LL.ADM.CODE
)
SECTION 201.146 AND PARTS 211 AND 217.
)
NOTICE OF FILING
John T. Theniault, Assistant Clerk
Persons included on the
Illinois Pollution Control Board
ATTACHED SERVICE LIST
James R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
PLEASE TAKE NOTICE that we
have today filed with the Office of the Clerk of the
Pollution Control Board the
TESTIMONY OF JAMES McCARTHY.
Dated: June 8,2007
Renee
Cipriano
Kathleen C. Bassi
Stephen
J. Bonebrake
Joshua R. More
SCHIFF
HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
3
12-258-5500
Fax: 3 12-258-5600
Electronic Filing, Received, Clerk's Office, June 8, 2007
BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
IN THE MATTER OF:
1
)
NOx EMISSIONS FROM STATIONARY
)
R07-18
RECIPROCATING INTERNAL COMBUSTION
)
(Rulemaking
-
Air)
ENGINES AND TURBINES:
1
AMENDMENTS TO 35 1LL.ADM.CODE
)
SECTION 201.146 AND PARTS 211 AND 217.
)
TESTIMONY OF JAMES McCARTHY
My name is James McCarthy. I am a Principal with Innovative Environmental Solutions,
Incorporated
(;;IES"). IES specializes in air quality and greenhouse gas emission consulting on
energy-related issues and technical facilitation of regulatory development, with a focus on the
natural gas industrial sector. IES is located in
Cary, Illinois and I have been with the company
for over
five years. Prior to IES, from 1994 through 2002,I managed the air quality research and
development
("R&D) program for the Gas Research Institute ("GRI"), which was located in
Chicago. GRI was a Federal Energy Regulatory Commission ("FERC") regulated non-profit
organization that planned, managed and directed
R&D programs for the benefit of natural gas
consumers. GRI was funded by a FERC sanctioned surcharge on natural gas deliveries.
The
characterization, control, costs: and environmental impact of air emissions associated with the
type of equipment impacted by the Illinois Environmental Protection Agency
("IEPA") proposal
were a primary component of the GRI
R&D program under my direction. This research included
development of retrofit control technologies to reduce emissions of nitrogen oxides
("NOx") for
natural gas-fired reciprocating internal combustion engines
("IC engines"), which are the
primary type of equipment affected by
IEPA's proposed rule. The GRI program also supported
technical research and regulatory
faeililation associated with the U.S. Environmental Protectin11
Electronic Filing, Received, Clerk's Office, June 8, 2007
Agency's ("U.S. EPA") NOx SIP Call Phase 11 Rule ("Phase I1 Rule") (69 Fed.Reg. 21604
(April 21,2004)). Prior to GRI, I was an engineering manager in compliance and planning with
the Santa Barbara County, California, Air Pollution Control District and an
R&D manager and
engineer in private industry addressing air quality and waste management challenges for
combustion sources. I hold multiple patents related to air emissions control and measurement.
A native of
illinois, I have a Bachelor of Science degree in Chemical Engineering from the
University of California at San
Diego, with graduate studies in respiratory toxicology.
IES has worked with a group of natural gas transmission and storage companies since the
summer of 2005 to provide technical and regulatory analysis and support associated with the
Subpart
Q rulemaking rulemaking that is the subject of this hearing and my testimony today. My
testimony today is on behalf of a group of natural gas transmission companies ("Pipeline
Group"): ANR Pipeline Company, Kinder Morgan, Incorporated, Trunkline Gas Company, and
Panhandle Eastern Company. The objective of my testimony is to provide background on the
affected industry and its proactive approach to addressing air emissions, as well as the Pipeline
Group's perspective on the IEPA proposal.
In the Phase 11 Rule, the U.S. EPA requires subject states to develop a SIP to address a
NOx emissions budget commensurate with an 82% NOx reduction from large natural gas-fired
IC engines
-
i.e.:
those IC engines in 21 eastern states and the District of Columbia that emitted
greater than one ton per day of
NOx emissions, on average, during the 1995 ozone season based
on U.S.
EPA's inventory. U.S. EPA developed a model rule to assist states in developing the
required SIP, and identified these units as "Large
NOx SIP Call Engines." About 90% of the
approximately 188 Large NOx SIP Call Engines throughout the SIP Call region are from the
natural gas industrial sector, where IC engines are used to drive natural gas compressors. These
Electronic Filing, Received, Clerk's Office, June 8, 2007
compressors are located at gas transmission compressor stations and storage facilities located
along the U.S. gas transmission system. The interstate system is regulated by FERC and ensures
the safe and reliable transportation and delivery of natural gas from producing areas to natural
gas residential, commercial, industrial, and utility customers in Illinois and throughout the
United States.
The Pipeline Group operates IC engines at natural gas compressor stations and storage
facilities in Illinois. Current generation
IC engines are typically 4-stroke cycle. higher speed,
separable engines, where the IC engine and driven equipment
(e.g., a compressor, pump, or
electric generator) are separate units. Natural gas compressor drivers operated
by the Pipeline
Group in Illinois are typically 2-stroke cycle or 4-stroke cycle, slow speed, large cylinder bore,
integral units, where the engine and compressor are integrated into a single piece of equipment
with one crank shaft. The Appendix
G affected units are nearly all 2-stroke cycle engines.
These slow speed, large bore, integral units were uniquely designed and developed for gas
compression and are no longer manufactured. Within the U.S. gas transmission system, the
majority of the IC engines were installed when primary components of the U.S. interstate
pipeline system were developed from the 1940's through about 1970. The continued operability
of these units is essential to our national energy infrastructure and its reliability.
Natural gas industry IC engines comprise 25 of the 28 Illinois units identified by the
U.S.
EPA in the Phase I1 Rule, and these same 25 units are Appendix G affected units per the IEPA
proposal. The 25 engines comprise less than fifteen percent of the IC engines at Illinois natural
gas industry facilities, and the affected units are relatively large and highly utilized units. Note
that the IEPA Technical Support Document ("TSD) for the proposal
(see Section 2.2, page 17)
implies a 1500 horsepower
("hp") size threshold for SIP Call Engines. However, Large NOx
Electronic Filing, Received, Clerk's Office, June 8, 2007
SIP Call Engines are considerably larger than the TSD implies. Background information
associated with the federal Phase I and Phase
11 rules indicates SIP Call engines as 2400 hp and
larger, not smaller as implied by the TSD. Assuming a typical uncontrolled
NOx emission rate.
for an IC engine to be identified as a Large SIP Call Engine in the 1995 inventory, a 2400 hp unit
would require full utilization throughout the ozone season to achieve a one ton per day average
NOx emission rate. The average size of the 25 natural gas industry Appendix G units is larger
than 4000 hp, and only three of the 25 units are smaller than 3400 hp. Thus, Large
NOx SIP Call
Engines and the Appendix
G engines are larger capacity, more highly utilized engines as
compared to other engines within the natural gas transmission and storage system.
High utilization is not typical of gas transmission compressor drivers. as FERC requires
that pipeline systems be designed to meet peak natural gas delivery demand. It is common for
equipment to be idle due to the excess system capacity relative to typical delivery requirements.
Thus, Large
NOx SIP Call engines are typically eo-located with additional IC engines or
combustion turbines at the facility, and many of the eo-located units may exhibit low or minimal
utilization. This is the case for the Appendix
G affected units as well. In addition, historical gas
demand is typically characterized by lower utilization during the ozone season, with gas demand
and use increasing during the winter heating season.
In recent years, emissions technology advances for the existing infrastructure have
primarily been driven by natural gas transmission companies. Because of the unique nature of
IC engines in natural gas transmission and storage and lack of manufacturer support, the natural
gas industry has a legacy of commitment to
R&D. This has advanced the technological status
for existing equipment, including an ongoing dedication to advancing emission reduction
technologies for the prevalent slow speed, integral IC engines. This proactive approach to
Electronic Filing, Received, Clerk's Office, June 8, 2007
technology development is a pragmatic objective to protect the specialized infrastructure and
ensure the availability and operability of a key physical industry asset: the IC engines that drive
compressors and provide natural gas to markets throughout the U.S. Thus, the technology used
to reduce
NOx emissions from natural gas industry IC engines, including the Appendix G
affected units, has primarily been developed through industry supported research with academic
institutions such as the Colorado State University Large Bore Engine Testhed and Kansas State
University National Gas Machinery Laboratory, as well as niche aftermarket service providers
that have filled the market gap left by the previous manufacturers.
These efforts have resulted in the development and enhancement of Low Emission
Combustion ("LEC")
technology for retrofit application to natural gas industry IC engines.
Through these efforts, the Pipeline Group has extensive experience in the retrofit application of
air pollution controls on natural gas-fired IC engines and in the installation of new engines that
incorporate the latest emissions control technologies. This proactive approach and commitment
to emissions issues is also apparent through the Pipeline Group's proactive approach to emission
reductions in Illinois for the 25
1,arge SIP Call Engines identified in Appendix G of the proposal.
The federal Phase
I1 Rule does not mandate control of Large SIP Call Engines, hut rather
that
each SIP Call state develop a plan and adopt regulations to achieve a federally mandated
NOx budget. The U.S. EPA required states to submit the Phase I1 Rule SIP by April 1,2005,
with a regulatory compliance deadline of the May 1,2007, which was the start of this year's
ozone season. While IEPA has not met these obligations, the natural gas companies that operate
the Appendix
G affected units in Illinois undertook a proactive approach.
Primarily through its trade association, the Interstate Natural Gas Association of America
("INGAA"), the natural gas industry was actively engaged in U.S. EPA's development of the
Electronic Filing, Received, Clerk's Office, June 8, 2007
Phase I1 Rule through meetings and by providing background support information on gas
transmission
IC engines to the agency. TNGAA also provided comment when U.S. EPA chose to
develop a model rule in September 2004 to assist states with SIP development. Based on
familiarity with the federally recommended approach. the eight natural gas transmission and
storage facilities in Illinois that operate Large
NOx SIP Call Engines have proactively initiated
projects to install emission controls and reduce
NOx in confomance with the federal program
intent. These actions were not required by any regulatory mandate.
Thus, despite the lack of an IEPA rule, the affected natural gas companies have
proactively initiated reduction programs and compliance plans for the units in Appendix G of the
proposal. The Pipeline Group has also worked cooperatively with IEPA since 2005 to integrate
provisions consistent with federal guidance and the model rule into the IEPA proposal, and
compliance approaches for the Appendix
G units include compliance with the applicable
emission limit in the proposal, which is commensurate with
U.S. EPA's 82% average reduction
target, as well as emissions averaging approaches that achieve emission reductions by controlling
or replacing other or additional units. Emissions averaging is consistent with federal guidance
and the IEPA proposal. Averaging acknowledges that the Phase
I1 Rule 82% reduction target is
an average level of emission performance across many engines, acknowledges that unique
technical challenges preclude all of the broad variety of legacy IC engines in the natural gas
industry from achieving 82%
NOx reduction, and provides operators the ability to most cost-
effectively implement controls and address emission requirements. The Pipeline Group is
assisting IEPA in documenting the status of the natural gas industry Appendix
G affected units to
facilitate
IEPA's communication with U.S. EPA regarding the federal Phase 11 Rule and 2007
ozone season emissions.
Electronic Filing, Received, Clerk's Office, June 8, 2007
In regard to the IEPA proposal under consideration at this hearing, the Pipeline Group
does not object to the Subpart
Q proposal under consideration at today's hearing. As noted
earlier, the Pipeline Group has worked with IEPA to integrate compliance options that promote
consistency with the federal Phase
I1 Rule and associated federal guidance.
However, there are several items regarding the proposal that we would like to highlight to
ensure that the public record for the proposal is consistent with our understanding of the federal
Phase I1 Rule and control technology applicability.
First, as noted above. the engine size associated with the Phase
I1 Rule is 2400 hp or
larger, and not 1500 hp as indicated in the TSD. Combustion turbines are also used to drive
natural gas compressors, and turbines larger than 25
hIW were addressed by Phase I of the
NOx
SIP Call rulemaking. There are no gas transmission turbines that large in Illinois, and turbines
are not affected units under the federal Phase
I1 Rule or IEPA proposal.
Second, the Phase
11 Rule addresses ozone transport concerns and thus requires NOx
budget conformance for only the ozone season. The IEPA proposal includes both oLone season
and annual requirements. with associated reporting and recordkeeping. We note that the control
strategies employed by the natural gas companies are operational whenever the unit operates, and
so emission reductions will not be limited to the ozone season. However, relative to federal
requirements. the Illinois proposal imposes an additional compliance burden in the annual
compliance requirement.
In addition, the IEPA
TSD describes emission control technologies that are not
necessarily proven controls for application to natural gas transmission and storage IC engines.
Selective Catalytic Reduction
("SCR") is included as an applicable control technology for IC
engines. However, to date, SCR has not been successfully applied to gas transmission units, and
Electronic Filing, Received, Clerk's Office, June 8, 2007
U.S. EPA has acknowledged this limitation. In a 2002 notice regarding the NOx SIP Call that
discusses large IC engines affected by the standard, U.S. EPA states:
[Tlhese engines (lean-burn IC engines in natural gas transmission)
experience frequently changing load conditions which make application of
SCR infeasible.
. . .
[Olur ACT document states that little data exist with
which to evaluate application of SCR for the lean-bum, variable load
operations. We now believe that there is
an insufficient basis to conclude
that SCR is an appropriate technology for large lean-bum engines.
67
Fed.Reg. 8395,841 1 (February 22,2002)
In addition, Section 3.2.4.2 of the July 2000 version of the EPA AP-42 document, which
discusses control techniques for lean-bum IC engines, states:
For engines which typically operate at variable loads, such as engines on
gas transmission pipelines, an SCR system may not function effectively,
causing either periods of ammonia slip or insufficient ammonia to gain the
reductions needed.
Other
NOx control technologies included in the TSD also are questionable in regard to
applicability to natural gas-fired IC engines. For example, ignition timing retard may not
provide meaningful emission reductions, and the commercial availability and performance of
prestratified charge are questionable.
Finally, the TSD for the proposal includes a section regarding the cost and cost-
effectiveness of
NOx emission controls. A detailed assessment of the TSD discussion is not
provided here, but it is important to clarify one point. The TSD (section 5.1, page 40) indicates
that a $5000 per ton basis is used for IC engines under the
NOx SIP Call. This is not consistent
with the federal 2004 Phase
I1 Rule or the original federal SIP Call Rule in 1998 (63 Fed.Reg.
57356 (October 27: 1998)). For example, the Phase 11 Rule indicates that "[EPA] determined
that an average of approximately $2,000 per ton removed is highly cost effective." (69
Fed.Reg.
21604,21618 (April 21,2004))
Electronic Filing, Received, Clerk's Office, June 8, 2007
There are additional cost issues that may warrant additional consideration and
clarification, such as the calendar year
hasis for the cost estimate, but the difference between the
noted IEPA value and SIP Call record is significant.
In closing, we reiterate that the efforts of the Pipeline Group to develop
a functional and
effective rule to address Large
NOx SIP Call Engines are evident through multiple meetings with
IEPA and Pipeline Group's comments submitted to IEPA since August 2005, The Pipeline
Group's intentions axe apparent through proactive emission reduction projects that will reduce
2007 ozone season emissions in Illinois. This proactive effort by natural gas companies has
culminated in a workable proposal and will assist IEPA in addressing federal obligations under
the
NOx SIP Call Phase I1 Rule.
Electronic Filing, Received, Clerk's Office, June 8, 2007
CERTIFICATE OF SERVICE
I, the undersigned, certify that on this 8" day of June, 2007, I have served electronically
the attached
TESTIMONY OF JAMES McCARTHY
upon the following persons:
John T.
Theniault, Assistant Clerk
Persons included on the
Illinois Pollution Control Board
ATTACHED SERVICE LIST
James R. Thompson Center
Suite 11-500
100 West Randolph
Chicago, Illinois 60601
Renee
Cipriano
Kathleen C. Bassi
Stephen J. Bonebrake
Joshua
R. More
SCHIFF
HARDIN, LLP
6600 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
3 12-258-5500
Fax: 3 12-258-5600
Electronic Filing, Received, Clerk's Office, June 8, 2007
SERVICE LIST
(R07-18)
Timothy Fox
Hearing Officer
Illinois Pollution Control Board
100 West Randolph, Suite
1 1-500
Chicago, Illinois 60601
foxt('ipcb.state.il.us
Katherine D. Hodge
N. LaDonna Driver
Gale W.
Newton
Hodge Dwyer Zeman
3 150 Roland Avenue
P.O. Box 5776
Springfield, Illinois 62705-5776
khodge@,hdzlaw.com
nldriver@,hdzlaw corn
gnewton@,hdzlaw
.
.corn
1
(PAPER SERVICE WAIVED)
John Kim
Rachel Doctors
Division of Legal Counsel
Illinois Environmental Protection Agency
102
1 North Grand Avenue, East
P.O. Box 19276
Springfield, Illinois 62794-9276
j-ov
rachel.doctors@illinois.eov
(PAPER SERVICE WAIVED)
William Richardson, Chief Legal Counsel
Virginia I Yang, Deputy Counsel
Illinois Department
of Natural Resources
One Natural Resources Way
Springfield, Illinois 67202-1271
william.richardson@,illinois.eov
virginia.vang@,illinois.pov
(PAPER SERVICE WAIVED)
Electronic Filing, Received, Clerk's Office, June 8, 2007