New Modified Air Quality Permit Proposed for Shell to Operate the Frontier Discoverer Drillship in the Chukchi Sea, Alaska PUBLIC COMMENT PERIOD: JANUARY 8 - FEBRUARY 17, 2010 The U.S. Environmental Protection Agency (EPA) is seeking public comment on a new modified Clean Air Act permit for Shell Gulf of Mexico Inc. (Shell), located at 3601C Street, Suite 1000, Anchorage, Alaska 99503. EPA first proposed the permit for public comment on August 20, 2009. After reviewing the public comments, EPA decided to propose a new modified permit with a new public comment period. The permit would allow Shell to operate the Frontier Discoverer drillship and support fleet for multi-year exploratory oil and gas drilling within its current lease blocks in lease sale 193 on the Chukchi Sea outer continental shelf (OCS), beyond 25 miles from Alaska's seaward boundary. The permit and support documents have been modified to address issues raised by commenters, including changes requested by Shell. Overall, total emissions of all pollutants regulated under the new modified proposed permit are lower compared to the August 2009 permit. Because the operations would be a "major" source of air pollutants, the permit requires that operations meet Prevention of Significant Deterioration (PSD) program requirements. The proposed permit is based on non-guideline ISC3-PRIME modeling system used to predict air pollutant concentrations, the same model relied on in the August 2009 proposed permit. HOW TO COMMENT EPA is re-proposing the permit in its entirety and will not be taking any further action on the initial August 2009 proposed permit. If you believe any condition of this new proposed permit is not appropriate, you must comment on the permit and raise all reasonably ascertainable issues and all reasonably available arguments that support your position. Any supporting materials you submit must be included in full and not by reference unless they are already part of the permit record or are generally available. EPA will not be responding to public comments on the initial August 2009 proposed permit. If you believe that comments you provided on the initial proposed permit have not been addressed by the new modified proposed permit and statement of basis, you may resubmit those specific un-addressed comments for the new proposed permit. All comments must be postmarked by February 17, 2010 by mail or e-mail to the addresses below. SEND COMMENTS TO: PUBLIC HEARING - BARROW Email: R10ocsairDermits(5)eDa.aov Date: February 16, 2010 Fax: 206-553-0110 Time: 6:00 pm Mail: Shell Chukchi Air Permit Location: Inupiat Heritage Center EPA Region 10 Barrow, Alaska 1200 6th Ave, Ste. 900, AWT-107 Seattle, WA 98101 EPA has scheduled a public hearing to receive public comments on the proposed new revised OCS/PSD air quality permit. EPA managers and staff will participate in the public hearing by teleconference from EPA offices in Seattle, Washington. An EPA hearing officer will conduct the public hearing in Barrow. Communities can participate in the public hearing by teleconference at the North Slope Borough teleconference centers in Wainwright, Point Lay, Point Hope and Atqasuk. Written comments may be submitted by mail or e-mail. You may submit oral comments during the public hearing in Barrow. You can also record your oral comments on cassette tape or CD, and submit them by mail. We recommend that comments, whether submitted by mail, e-mail, cassette tape, or CD include your contact information so that we may provide all commenters with notice of the final permit decision. If EPA cannot read or hear your comment and cannot contact you for clarification, we may not be able to consider your comment. Please be aware that any personal EPA Air Permit Public Notice and Information Sheet - January/February 2010 1 ------- information, including addresses or phone numbers that are included with a public comment will be included in the public record for the new modified proposed permit. All comments received during the comment period will be considered in making the final decision. EPA will prepare a response to comments and a statement of reasons for any changes made in the final permit. EPA will provide all commenters with notice of the final permit decision. PERMIT DOCUMENTS AVAILABLE The permit record includes Shell's application and all supplemental information, all documents in the record for the first proposed permit, the new modified proposed permit and statement of basis, and all other materials relied on by EPA. The permit record is available at the EPA Region 10 Library, 1200 6th Ave, Seattle, Wash., 9 am-12 pm and 1 pm-4 pm Monday-Friday. The permit application, the new proposed permit and statement of basis will be available at the locations listed below. Barrow City Office, 2022 Ahkovak Street, Barrow, Alaska, 907-852-4050 Wainwright City Office, 1217 Airport Road, Wainwright, Alaska, 907-763-2815 Atqasuk City Office, 5010 Ekosik Street, Atqasuk, Alaska, 907-633-6811 Kali School Library, 1029 Ugrak Ave, Point Lay, Alaska, 907-833-2312 Point Hope City Office, 530 Natchiq Street, Point Hope, Alaska, 907-368-2537 EPA Alaska Office, Federal Building, 222 West 7th Ave, Anchorage, Alaska, 907-271-5083 EPA Region 10 web site: www.vosemite.epa.gov/R10/airpaae.nsf/Permits/chukchiap For more information about the public hearing or the permit, to request a copy of the permit documents, or to be added to EPA's Chukchi Sea or Beaufort Sea arctic permits mailing lists, contact Suzanne Skadowski, EPA community involvement, at 206-553-6689 or skadowski.suzanne@epa.gov. INFORMATION ABOUT THE PROPOSED PERMIT Sources of Air Emissions The Discoverer is a turret-moored drillship with air emission sources that include generators for the drilling systems and associated self-powered equipment (such as air compressors, hydraulic pumps, and cranes), small boilers for heating and a small incinerator. The Discoverer's operations will be supported by an associated fleet that consists of a primary icebreaker, a secondary icebreaker/anchor handler, a supply ship, an oil spill response ship, and oil spill workboats. As provided in the OCS regulations, emissions from a support vessel are counted as emissions from the OCS source when the support vessel is within 25 miles of the Discoverer and the Discoverer is an OCS source. Air Pollution Controls The permit requires Best Available Control Technology (BACT) on the Discoverer to limit emissions of air pollutants while the Discoverer is an OCS source. Control measures on the Discoverer include the use of ultra-low sulfur diesel fuel to reduce emissions of SO2; Selective Catalytic Reduction controls on the six largest engines to reduce emissions of NOx; and oxidation catalysts or catalytic diesel particulate filters on the six largest engines and all other engines to limit emissions ofVOC, CO, PM, PM-ioand PM2.5- The permit requires the use of good operation and maintenance procedures and good combustion practices on the Discoverer and the support vessels to meet emission limits. The permit requires record-keeping and reporting necessary to monitor compliance with the permit terms and conditions. Air Quality Impacts Shell is required to use air quality monitoring information and modeling to demonstrate that air quality in the vicinity of their drilling operations will meet the National Ambient Air Quality Standards and PSD increments. In addition to emission limitations and permit requirements that impose BACT, the permit includes annual emission limits for NOx, daily emission limits for PM-ioand PM2.5, and operational restrictions to ensure that emissions from the Discoverer and its support vessels do not exceed the National Ambient Air Quality Standards or PSD increments while the Discoverer is at a drill site. Operational restrictions include: ultra-low sulfur diesel fuel use in all support vessels, drilling limited to a total of 168 days between July 1 and December 31 of each year, and limits on the amount of fuel that can be combusted. The permit is based on the non-guideline ISC3-PRIME modeling system used to predict air pollutant concentrations, the same model relied on in the August 2009 proposed permit. This modeling system has not been approved by the EPA for general use, but has been tested for use in arctic conditions. EPA specifically requests public comment on the suitability ofthis model in this permitting action. PSD increments are limits on the amount that air quality can be degraded by actual emissions. The percentages of the applicable PSD increments which are predicted to be consumed by Shell's operations are shown in Table 1. The proposed permit would allow the Discoverer and its support vessels to emit air pollutants as specified in Table 2. EPA Air Permit Public Notice and Information Sheet - January/February 2010 2 ------- Table 1 - PSD Increment Predicted to be Consumed by Shell's Operations Air Pollutant PSD Increments 3-hour 24-hour Annual Nitrogen Dioxide (N02) - - 72.8% Particulate Matter Less than 10 (PM10) - 64.7% 8.2% Sulfur Dioxide (S02) 13.4% 29.5% 10.0% Table 2 - Permitted Air Pollutant Emissions from Discoverer as OCS source and Associated Fleet at all Locations Air Pollutant Initial Proposed Emissions (tons per year) Revised Emissions (tons per year) Carbon Monoxide (CO) 762 449 Nitrogen Oxides (NOx) 1965 1188 Particulate Matter Less than 2.5 (PM25) 184 52 Particulate Matter Less than 10 (PM10) 210 58 Sulfur Dioxide (S02) 181 2 Volatile Organic Compounds (VOC) 166 87 OTHER MAJOR CHANGES TO THE NEW MODIFIED PERMIT Emissions Compared to the August 2009 permit initially proposed by EPA,, total emissions of all pollutants regulated under the new proposed permit are lower: sulfur dioxide (SO2) reduced 99%, particulate matter (PM-ioand PM2.5) reduced 72%, nitrogen oxides (NOx) reduced 40%, volatile organic compounds (VOC) reduced 47%, and carbon monoxide (CO) reduced 41% (Table 2). Ultra-low sulfur diesel fuel use is required in the associated fleet when within 25 miles of the Discoverer operating as an OCS source, which decreases emissions of SO2 from 181 tons per year to 2 tons per year. Selective catalytic reduction controls are required on the icebreaker/anchor handler's main diesel engines, resulting in much lower emissions of NOx. For the oil spill response vessel, the daily fuel limit for the two propulsion engines is increased. For the two generator engines, the daily fuel limit is decreased. Catalytic diesel particulate filters are required on the propulsion and generator engines. The net result is a small increase in emissions of NOx, but substantial decreases in PM and SO2 emissions, and moderate decreases in CO and VOC from this vessel. Oxidation catalysts are required on the compressor diesel engines on the Discoverer (all new Tier 3 engines), which reduces emissions of particulate matter, VOC, and CO. The fuel limits for the cementing units and logging winch engines on the Discoverer are decreased to offset the small increase in the emissions from the emergency generator. Tighter restrictions are required on the waste throughput limit for the incinerator on the Discoverer, which are tied to the use of the Discoverer's hydraulic power units (HPU) engines. This results in an overall reduction of emissions from the incinerator and the HPU engines. Development and implementation of a waste segregation plan is also required. EPA Air Permit Public Notice and Information Sheet - January/February 2010 3 ------- The logging winch engines on the Discoverer have been replaced with newer engines, one of which is a newer Tier 3 engine that is larger in horsepower than the engine it replaced. The hours of operation of the emergency generator on the Discoverer are increased from 20 minutes to two hours a month to be consistent with U.S. Coast Guard requirements. Compliance For the main generator engines on the Discoverer and all engines on the icebreakers, the compliance assurance regime is based on the monitoring of engine loads instead of monitoring of fuel usage. Certain restrictions on the locations of the icebreakers in relation to the Discoverer while traveling on non- icebreaking activities are eliminated and replaced with requirements to record the duration, purpose and operating loads at such locations. The number of operating loads required for the stack testing of the newer and smaller engines and the boilers on the Discoverer and the non-propulsion engines on the icebreakers is reduced. Other changes The permit proposes an alternative definition for when the Discoverer is considered an "OCS source" and when the emission limitations and other operating restrictions apply. In the initial proposed permit and in this proposal, EPA seeks comment on considering the Discoverer to be an OCS source when it is attached by a single anchor to the seabed. EPA also seeks comment on an alternative proposal to consider the Discoverer to be an OCS source when it is sufficiently secure and stable to commence exploration at a drill site. EPA Air Permit Public Notice and Information Sheet - January/February 2010 4 ------- |