This document discusses key considerations for air quality permitting for Marcellus Shale gas compressor stations in Pennsylvania. It outlines why permitting matters given the emissions sources and profiles. It describes differences in Pennsylvania regulations, including ozone and PM2.5 nonattainment areas. Prevention of significant deterioration requirements and how source definitions can impact permitting are summarized. Federal regulations like NSPS and NESHAP that may apply are briefly mentioned. Intangible factors like reputation and the importance of planning are also highlighted.

1. Design, Permitting and Construction Considerations
for Marcellus Shale Gas Compressor Stations
Air Quality Permitting
All4, Inc.
Roy Rakiewicz – Senior Consultant
John Slade – Senior Consultant
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2. Overview
• Why Air Permitting Matters
• What’s Different in Pennsylvania?
• Ozone Nonattainment
• PM2.5 Nonattainment
• Prevention of Significant Deterioration
• Source Definition
• GHG Tailoring Rule
• Federal Regulations
• Planning/Intangibles/Strategy
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3. Why Air Permitting Matters
• Sources of emissions
– Turbines, reciprocating internal combustion
engines, dehydration units, separators, re-boilers,
etc.
• Air pollution control equipment
– Oxidizers, flares, condensers, etc.
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4. Why Air Permitting Matters
• Emission Profiles
– Combustion products
o Nitrogen oxides (NOX)
o Carbon monoxide (CO)
o Particulate matter (PM/PM10/PM2.5)
o Sulfur dioxide (SO2)
o Total Hydrocarbons (THC)
– Process Emissions
o Total hydrocarbons (THC)
o Hazardous Air Pollutants (HAPs)
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5. Why Air Permitting Matters
• Permits and Rules
– State “pre-construction” air permitting
requirements
– Federal “pre-construction” air permitting
requirements
– State/Federal operating permit requirements
– State implementation plan (SIP) rules
– Federal rules (e.g., NSPS and NESHAP)
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6. Why Air Permitting Matters
• Public Perception
– Air permit applications and proposed permits are
available for public review and comment
– Opportunities for public hearings
– Company reputation
– Publicity
– Municipal government notice and comment
– Concerned non-governmental organizations
(NGOs)
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7. What’s Different in Pennsylvania?
• List of exempt activities (subject to change)
• General permits (subject to change)
• Nonattainment areas
– Ozone
– PM2.5
• Complex Terrain
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8. What’s Different in Pennsylvania?
Map from http://www.dcnr.state.pa.us/topogeo/map13/map13.aspx 8

9. Ozone Nonattainment
• Northeast Ozone Transport Region (OTR)
– Established by § 7511c (a) of the Clean Air Act
(CAA)
– Includes Maine, New Hampshire, Vermont,
Massachusetts, Connecticut, Rhode Island, New
York, New Jersey, Pennsylvania, Maryland,
Delaware, the northern counties of Virginia, and
the District of Columbia
– Entire area is minimally considered as a moderate
ozone nonattainment area
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10. Ozone Nonattainment
• OTR Requirements
– §7511c (b)(1)(A): enhanced vehicle inspection and maintenance
– §7511c (b)(1)(B): Reasonably Available Control Technology
(RACT) for major (> 50 ton) VOC sources
– §7511a (b)(1)(A)(ii)(II): RACT for major (>100 to) NOX sources
– §7511c (b)(2):
• Any stationary source that emits or has the potential to emit at least
50 tons per year of VOC shall be considered a major stationary source
• Such sources shall be subject to the requirements which would be
applicable to major stationary sources if the area were classified as a
moderate nonattainment area.
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11. Ozone Nonattainment
• Pennsylvania SIP Nonattainment New Source
Review (NSR)Requirements
– 100 tpy major source threshold for NOx nonattainment
NSR (NNSR)permitting vs. 250 tpy in “attainment areas”
– 50 tpy major source threshold for VOC NNSR permitting vs.
250 tpy in “attainment areas”
– For existing facilities, aggregation of contemporaneous
VOC or NOx emission increases
– Lowest Achievable Emission Rate (LAER) and emission
offset (1.15 to 1) requirements
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12. PM2.5 Nonattainment
• Scattered fine particulate matter (PM2.5) non-
attainment areas throughout state
– Major modification threshold is 10 tpy and includes
condensable PM
– Proposed Pennsylvania PM2.5 NNSR rules include
aggregation of contemporaneous PM2.5 emission increases
– Sulfur dioxide (SO2) is a PM2.5 precursor, but will not likely
trigger applicability at 100 tpy
– NOX to be a precursor for PM2.5 emissions in Pennsylvania
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13. PM2.5 Nonattainment
• Significant increase in PM2.5 precursors (NOX
and SO2) in PM2.5 nonattainment area triggers
NNSR
• PM2.5 Emission Reduction Credits (ERCs) are
generally not available
• Direct PM2.5 ERCs and PM2.5 precursor ERCs
must be in the vicinity of the project
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14. PM2.5 Nonattainment
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15. Prevention of Significant Deterioration
• Best Available Control Technology (BACT)
• Ambient air quality impacts analysis
• “Double Jeopardy” for ozone and PM2.5 precursor
pollutants NO2 and SO2
• Stringent new National Ambient Air Quality
Standards (NAAQS) for PM2.5, NO2, and SO2
• Attainment designations not yet made for NO2 and
SO2 NAAQS
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16. Prevention of Significant Deterioration
Recently Revised NAAQS
Pollutant 1-hr 3-hr 24-hr Annual
(µg/m3) (µg/m3) (µg/m3) (µg/m3)
PM2.5 -- -- 35 15
NO2 188 -- -- 100
SO2 196 1300 -- --
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17. Prevention of Significant Deterioration
• Anticipated NAAQS Related Issues:
– Very low Significant Impact Levels (SILs)
– Elevated “background” concentrations
– Revised NO2 and SO2 NAAQS 1-hour standards
o Worst-case conditions will dominate the modeled
concentrations (emissions and meteorology)
– Attainment designations based solely on modeling
– For PSD projects NAAQS could dictate level of
control (e.g., BACT may not be sufficient)
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18. Source Definition
• Source Aggregation
– Why is aggregation important?
• PTE of “source” defines air permitting requirements
(and schedule)
• The definition of “source” under NSR and Title V has it
roots in the case of Alabama Power v. Costle, 636 F.2d
323 (D.C. Cir. 1979)
• Source was limited by the four statutory terms,
“structure, building, facility or installation”
• U.S. EPA can treat contiguous and commonly owned
units as a single source if they fit within these terms
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19. Source Definition
• The U.S. EPA defined “stationary source” facility
to mean any building, structure, or facility which
meets three criteria:
– (1) belong to the same two-digit SIC Code;
– (2) are under the control of the same company; and
– (3) are located on one or more contiguous or adjacent
properties
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20. Source Definition
• U.S. EPA issued source aggregation guidance for
oil and gas activities (Jan. 2007)
– Guidance indicated that well sites and other production
activities occurring over large geographical distances
should be treated as separate sources
– U.S. EPA withdrew the January 2007 guidance (Sept. 2009)
– U.S. EPA required the Colorado Department of Public
Health and Environment (CDPHE) to explain its failure to
aggregate commonly owned gas wells with a compressor
station for NSR (and Title V) applicability
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21. Source Definition
• U.S. EPA will be making case-by-case
permitting determinations consistent with
their interpretation of source aggregation
• Agency interpretation of aggregation policy is
expected to be more conservative on such
determinations
• Aggregation is currently being discussed at
PADEP in relation to natural gas development
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22. GHG Tailoring Rule
• May 13, 2010: U.S. EPA issues final rule
establishing NSR and Title V thresholds for
greenhouse gas (GHG) emissions
• The rule “tailors” the requirements of NSR and
Title V programs to restrict rule applicability
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23. GHG Tailoring Rule
• Step 1: January 2, 2011 to June 30, 2011
– Sources currently subject to the PSD permitting or
Title V programs will be subject to permitting
requirements for their GHG emissions
– Only GHG increases of 75,000 tpy or more of total
GHG (CO2e basis) trigger PSD and BACT for GHG
emissions
– No sources will be subject to Clean Air Act
permitting requirements due solely to GHG
emissions
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24. GHG Tailoring Rule
• Step 2: July 1, 2011 to June 30, 2013
– PSD will be triggered for new construction
projects that result in GHG emissions of at least
100,000 tpy regardless of any other pollutant
– PSD will be triggered for modifications at existing
major facilities that result in GHG emissions
increases of 75,000 tpy
– Facilities that emit at least 100,000 tpy of GHG as
CO2e will be subject to Title V permitting
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25. GHG Tailoring Rule
• U.S. EPA will propose “Step 3” to begin in 2011
and conclude no later than July 1, 2012
– Step 3 will include streamlining options to limit
permitting for sources with greenhouse gas
emissions > 50,000 CO2e tpy
– U.S. EPA will not require permits for smaller
sources in Step 3 or through any other action until
at least April 30, 2016
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26. Federal Regulations
• Standards of Performance for New Stationary
sources (NSPS) requirements
– 40 CFR Part 60 Subpart KKK – Standards of Performance of
Equipment Leak VOC from Onshore Natural Gas Processing
Plants
– 40 CFR Part 60 Subpart JJJJ– Standards of Performance for
Stationary Spark Ignition Internal Combustion Engines
– 40 CFR Part 60 Subpart IIII – Standards of Performance for
Compression Ignition Internal Combustion Engines
– 40 CFR Subpart KKKK—Standards of Performance for
Stationary Combustion Turbines
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27. Federal Regulations
• NESHAP requirements – major and possibly area
sources of HAP
– 40 CFR Part 63 Subpart HH – National Emission
Standards for Hazardous Air Pollutants from Oil and
Natural Gas Production Facilities
– 40 CFR Part 63 Subpart HHH – National Emission
Standards for Hazardous Air Pollutants: Oil and
Natural Gas Production and Natural Gas Transmission
and Storage
– 40 CFR Part 63 Subpart ZZZZ - National Emission
Standards for Hazardous Air Pollutants for
Reciprocating Internal Combustion engines
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28. Air Permit Planning Issues
• General permits and applicability
• Air permitting “exemptions”
• Components of processing plants and
compressor stations are air emission sources
• Major/minor sources are subject to differing
requirements and timelines
• Air permits must be obtained prior to
“beginning actual construction”
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29. Air Permit Planning Issues
• Typical “minor source” permitting timeline:
– Application Preparation (source) is 2 to 3 months
(typical)
• Best Available Technology (BAT) for new sources
– PADEP review is typically 4 months, but can be up
to 6 months
– Public comment period = 30 days
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30. Air Permit Planning Issues
• Typical “major” source permitting timeline (PSD
and/or NNSR)
– Application Preparation (source) typically 4 months
o BACT in attainment areas
o LAER in non-attainment areas
o Dispersion modeling (PSD)
o Emission offsets (NNSR)
– PADEP technical review can be up to 12 months (or
longer)
– Public comment period and possible hearing = 30 days
– U.S. EPA review and comment = 45 days
– Total timeline = 18 months
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31. Intangibles
• Reputation
• Not in my backyard
• Guilt by association
• Recent history and publicity
• Public interest (this is an area where NGOs can
impact schedules)
• Nuisance issues
– Noise
– Odor
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32. Strategy
• Master planning
– Schedule
– Identify potential delays and plan for them
o Communication with local government, community,
and NGOs
– Minimize agency review turnaround time
– Relationships
– Reputation
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