May 2009

Summary of Greenhouse Gas Reporting Requirements for Petrochemical Production

ALERT: Your facility may be one of the 13,000 facilities in the US potentially impacted by EPA’s proposed greenhouse gas emissions regulations.

On March 10, 2009, the Environmental Protection Agency (EPA) proposed rule 40 CFR 98, which would require mandatory reporting of greenhouse gas (GHG) emissions from large sources in the United States. The proposed rule was published in the Federal Register on April 10, 2009, and the public comment period is open until June 9, 2009. The rule would require collecting and reporting comprehensive emissions data from certain facilities, suppliers of fossil fuels and industrial GHGs, manufacturers of vehicles and engines, and some facilities that emit 25,000 metric tons per year or more of GHGs. The purpose of this memorandum is to provide a brief overview of the proposed rule relative to this industrial sector.

General Provisions - 40 CFR Part 98
If enacted, the rule would require reporting of annual emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorochemicals (PFCs), and other fluorinated gases (e.g., nitrogen trifluoride, hydrofluorinated ethers [HFEs]). The rule would apply to certain facilities that emit GHGs, including petroleum refineries, and to suppliers of fossil fuels.

Background – Petrochemical Production
There are 88 facilities operating petrochemical processes in the U.S., and 9 of these facilities operate two or three petrochemical processes. EPA reports that emissions from petrochemical production account for approximately 55 million metric tons of CO2e, which represents less than 1 percent of total GHG emissions for the U.S. Most of these emissions are CO2 from fossil fuel combustion. Previous EPA studies suggest that 84 of the 88 operating petrochemical facilities will report annual GHG emissions exceeding 100,000 metric tons of CO2e.

Subpart X – Petrochemical Production Source Category
The petrochemical industry consists of numerous processes that use fossil fuels or petroleum refinery products as feedstocks. The proposed rule defines a petrochemical industry as:

“…limited to the production of acrylonitrile, carbon black (e.g. furnace black, thermal black, acetylene black, and lamp black) ethylene, ethylene dichloride, ethylene oxide, and methanol.”

Subpart X focuses on these six products because GHG emissions associated with their production are significant compared to other petrochemical production. Because petrochemical facilities are often considered “integrated processes,” other processes that occur within a petrochemical facility may not be listed in this subpart and therefore subject to Subpart C – General Stationary Fuel Combustion sources (threshold of 25,000 CO2e per year)—or other applicable subparts (hydrogen production, ammonia production, petroleum refining, etc). It is important to look at every potential emission source to determine the applicable standards under this proposed rule.

The proposed rule states that the three main GHGs reported for each emission source are CH4, CO2, and N2O.

Potential sources of GHG emissions from petrochemical production include the following:

• Combustion sources (CO2, CH4, and N2O) (Subpart C)
  
• Fugitive emissions (CH4) (Subpart Y)
  
• Combustion of off-gas as a supplemental fuel (CO2, CH4, and N2O) (Subpart C)
  
• CO2 capture (Subpart PP)
  
• Flaring (CO2, CH4, N2O) (Subpart Y)
  
• On-site wastewater treatment (CH4) (Subpart II))
  
• Process emissions (CO2) (Subpart X)
  

Monitoring of Emissions
The proposed rule lists three monitoring methods to estimate GHG emissions. These methods include (in order from highest to lowest uncertainty):

1. Use of engineering calculations and/or default parameters
   
2. Determination of carbon balance using all feedstock and products/byproducts to estimate GHG emissions/measure flow and carbon content of any supplemental fuel used in combustion sources
   
3. Direct emission measurements using continuous emission monitoring system (CEMS) for all emission sources (40 CFR 75)
   

Under the proposed rule, if a facility is required to use an existing CEMS to meet the requirements outlined in Part 98, Subpart C, it would use the CEMS data to estimate CO2 emissions from the source. For facilities without CEMS that meet the requirements as outlined Subpart C, the proposed monitoring method for emission calculations is addressed under 40 CFR 98 Subpart X, C, and II. Direct measurement of emissions is also the most costly option; therefore, EPA has determined that the second monitoring method (measurements of carbon content/fuel flow) would be appropriate for petrochemical production.

EPA has provided several methods to determine GHG emissions from general stationary combustion sources. To determine which calculation procedure would be required, please refer to Trihydro’s General Stationary Fuel Combustion Sources Tiered Data Monitoring Flow Diagram for CO2 Emissions (Attachment A).

Subpart PP – Suppliers of CO2
Subpart PP addresses any facility (including facilities that process petrochemicals) considered a supplier of CO2 for commercial applications. Facilities considered under this subpart would be required to report the mass of CO2 in metric tons:

• Captured from production process units
  
• Extracted from carbon dioxide production wells
  
• Imported/exported
  

This subpart does not include geologic sequestration; CO2 aboveground storage; CO2 used for enhanced oil and gas recovery; CO2 transportation via pipelines, vessels, motor carriers, etc.; CO2 imported or exported in equipment (e.g. fire extinguishers); and/or CO2 purification, compression, or processing.

Recordkeeping / Reporting
If enacted, all affected facilities would begin monitoring GHG sources on January 1, 2010. Petrochemical facilities would report all GHG emissions on March 31, 2011, for the 2010 reporting year. Each annual GHG report would be certified by the facility to be true, accurate, and complete. EPA would have the jurisdiction to perform selective random audits of all facilities in respective EPA regions. Furthermore, the proposed rule would require a QA/QC document and demonstrate emission source calculation procedures. Maintenance of records pertaining to the calculation of GHG emissions (feedstock and product flows and carbon content/CEMS) would be required for 5 years.

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