Major oil and gas production company Vintage Production California and its subsidiary OXY USA last week agreed to pay $34,000 to resolve the Environmental Protection Agency’s (EPA’s) first greenhouse gas (GHG) permitting violation case.

The company self-reported the prevention of significant deterioration (PSD) permitting violation at its Kern Front Oil Field located north of Bakersfield, Calif., admitting it built three steam generators at the oil field late last year without first obtaining a permit for GHG emissions under the PSD permitting program. According to EPA sources familiar with the case, the violation involves natural gas-fired, once-through steam generators with ultra-low nitrogen oxide burners and flue gas recirculation.  They have a heat input capacity of 85 MMBtu/hr (HHV) each.

EPA spokesperson Michael Ardito on Wednesday told POWERnews that the penalties were determined in accordance with the agency’s long-standing Clean Air Act Stationary Source Civil Penalty Policy.

The EPA granted authority to the San Joaquin Valley Air Pollution Control District to issue PSD permits to sources within its jurisdiction only last month. It said in a statement last week that Vintage would obtain the necessary PSD permit for the steam generators from the district. “Companies need to be mindful of the relatively new permitting requirements,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. “Now that EPA has approved the Prevention of Significant Deterioration permit program for the San Joaquin Valley, it simplifies the process.”

The PSD permitting program is a Clean Air Act initiative for new and modified "major sources" of air pollution such as fossil fuel–fired power plants. A PSD permit is essentially a legal document issued by the EPA, state, or local permitting authority that limits the amount of air pollution that can be released by a source, and it is required before the "major new source" begins construction, or before "major" or "significant" modifications are made at an existing source of air pollution.

The EPA began regulating GHG emissions for the first time under PSD and Title V Operating Permit Programs starting in January 2011, setting down thresholds of 100 and 250 tons per year. A contentious aspect of the EPA’s GHG permitting program is that—as with other criteria pollutants covered such as nitrogen oxides, sulfur dioxide, and fine particulates—it requires installation of the Best Available Control Technology (BACT). According to the EPA, BACT is determined by a "case-by-case decision that takes into account technical feasibility, cost, and other energy, environmental, and economic impacts." The EPA says BACT can be add-on control equipment or modification of the production processes or methods, or it could be a design, equipment, work practice, or operational standard if imposition of a numeric emissions standard is infeasible.

"Generally speaking, we have found that BACT for greenhouse gas emissions from this type of emissions unit consists of energy efficiency measures," Ardito said.  "The more efficient a unit is, the less fuel it burns to perform its intended function and thus, the fewer emissions it generates.  Where the specific units involved in this case are concerned, BACT will be determined by the [San Joaquin Valley Air Pollution Control District] during the PSD permitting process."

Sources: POWERnews, EPA

—Sonal Patel, Senior Writer (@POWERmagazine)