"Reconstructed" applies to engine overhaul?

[ivymike]

Alright, maybe this isn't the best forum for the question... but I'm not sure where else it would fit either. If one looks at the EPA spark-ignition NSPS regulation that covers natural gas engines in the USA, one might wonder what was meant by "reconstructed or modified." In particular, one might wonder whether overhauling an engine used for gas compression triggers the "reconstructed" requirements if the rest of the compression skid is not concurrently reworked:

http://www.epa.gov/EPA-TOX/2008/January/Day-18/t25394.htm

The final standards apply to stationary SI engines subject to the SI NSPS that are modified or reconstructed after June 12, 2006. The definitions for modification and reconstruction are given in 40 CFR 60.14 and 40 CFR 60.15, respectively. A stationary engine that is overhauled as part of a maintenance program is not considered a modification if there is no increase in emissions.

modified

http://edocket.access.gpo.gov/cfr_2005/julqtr/40cfr60.14.htm

reconstructed

http://edocket.access.gpo.gov/cfr_2005/julqtr/40cfr60.15.htm

Sec. 60.15 Reconstruction.
(a) An existing facility, upon reconstruction, becomes an affected facility, irrespective of any change in emission rate.

(b) ``Reconstruction'' means the replacement of components of an existing facility to such an extent that:
....(1) The fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility, and
....(2) It is technologically and economically feasible to meet the applicable standards set forth in this part.

(c) ``Fixed capital cost'' means the capital needed to provide all the depreciable components.

(d) If an owner or operator of an existing facility proposes to replace components, and the fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility, he shall notify the Administrator of the proposed replacements. The notice must be postmarked 60 days (or as soon as practicable) before construction of the replacements is commenced and must include the following information:
....(1) Name and address of the owner or operator.
....(2) The location of the existing facility.
....(3) A brief description of the existing facility and the components which are to be replaced.
....(4) A description of the existing air pollution control equipment and the proposed air pollution control equipment.
....(5) An estimate of the fixed capital cost of the replacements and of constructing a comparable entirely new facility.
....(6) The estimated life of the existing facility after the replacements.
....(7) A discussion of any economic or technical limitations the facility may have in complying with the applicable standards of performance after the proposed replacements.

(e) The Administrator will determine, within 30 days of the receipt of the notice required by paragraph

(d) of this section and any additional information he may reasonably require, whether the proposed replacement constitutes reconstruction.

(f) The Administrator's determination under paragraph

(e) shall be based on:
....(1) The fixed capital cost of the replacements in comparison to the fixed capital cost that would be required to construct a comparable entirely new facility;
....(2) The estimated life of the facility after the replacements compared to the life of a comparable entirely new facility;
....(3) The extent to which the components being replaced cause or contribute to the emissions from the facility; and
....(4) Any economic or technical limitations on compliance with applicable standards of performance which are inherent in the proposed replacements.

(g) Individual subparts of this part may include specific provisions which refine and delimit the concept of reconstruction set forth in this section.

 

[zdas04]

No, I've been through this with them and the important issue is that you spend more than 50% of the cost of a replacement skid. I've never had either an overhaul or an engine swap that met that criteria (since the cost of the skid includes a LOT of fabricator overhead and profit).

David

 

[ivymike]

it looks to me as though an engine itself can be reconstructed (versus simply being part of a facility that is reconstructed)

it looks like the question of whether or not an overhaul triggers the "reconstructed" requirements depends on whether you count the new pistons, rings, turbos, etc., as fixed capital or circulating capital. Based on the definitions of each, I'm inclined to say that the engine parts replaced during an overhaul are circulating capital. Using that interpretation, it would seem that one would never trigger the "reconstructed" requirement because of an engine overhaul alone.

If that's the case, then what's the point of having the "reconstructed" requirement in the regulation at all?

If that's not the case, then are we really supposed to send a letter to the EPA giving them 60 days notice for each-and-every engine overhaul? Who is going to read all those letters?

 

[ivymike]

sorry, I was typing the second bit while you were responding to the first.

 

[zdas04]

We had a situation a couple of years ago where a client was replacing a skid vessel, the cooler, much of the piping, and all the heads on a compressor while doing an engine overhaul (yes it would have been cheaper to buy a new skid if they could have waited 56 weeks for a new frame). All the modifications together kicked in the "greater than 50% of replacement" requirements and the client initiated the paperwork. I was only involved in the planning part so I never knew how the process worked out. I can't imagine a scenario where the engine overhaul by itself would ever get you to the trigger point.

David

 

[ivymike]

was this something that people were doing (deciding whether reconstructed applies, and sending in the paperwork) prior to the final rule coming out in January of this year?

 

[zdas04]

The reconstruction language hasn't changed much in the last few years. I'm not sure exactly what changed in this version (I only get it out and read it when I'm moving or installing compression).

David

 

[ivymike]

David, thanks for the input. It's at least a bit of a comfort to know that I'm not alone in thinking that triggering "reconstructed" would be a rare occurence.

Is there anyone else in here who has had similar experiences, or who has a different interpretation?

 

[ivymike]

Just a follow-up: I'm attending an API workshop on the NSPS rule, and they explicitly stated that the pertinent costs are related to the engine alone, not to a separable compressor or the rest of the skid. Apparently there are some EPA example calculations that show this - I don't have a URL handy at the moment. This makes it a bit more likely (especially on a small or old engine) that one would trigger "reconstructed" by doing an overhaul.