INFORMATION RELATIVE TO
THE DRAFT MODIFICATION TITLE V OPERATING PERMIT

December 12, 2017

FOR:

Tellus Operating Group LLC, Tallahala 4-7 Number 1 Tank Battery
Smith County Road 95
Sylvarena, MS 39422    
 
FACILITY DESCRIPTION
This facility is an oil and gas production facility that produces oil, condensate and produced gas.  The produced gas is considered sour gas because it has a concentration of H2S in excess of 1 grain/100 standard cubic feet. The equipment utilized at this facility includes a separator, a produced water storage tank, two produced oil storage tanks, an oil process tank, a truck loading operation, a vapor recover unit and a flare. 

MODIFICATION DESCRIPTION
The Title V operating permit requires monthly H2S monitoring of the combined gas streams routed to the flare. Tellus Operating Group LLC (Tellus) submitted a request to reduce hydrogen sulfide (H2S) monitoring frequency.  In the past year there has been a decrease in H2S concentration and gas volume. To justify reducing the H2S monitoring frequency, Tellus submitted results that showed H2S concentrations for the past ten months have been approximately 4 % (volume) each month. In addition, the gas volume of the well has decreased over the past year. Calculations based on actual measured data of H2S and gas volume resulted in SO2 emissions less than 94.63 tpy during the past twelve months. Compared to the SO2 permit limit of 240 tpy, the actual SO2 emissions over the past 12 months have been less than 40% of the permit limit.  Due to this large margin of compliance, MDEQ has determined that reducing the sampling frequency for H2S is justified.  In this modification, the H2S sampling frequency is being reduced from monthly to annually. If the H2S concentrations increases above 10% (volume) based on annual monitoring, the H2S concentration will be monitored semiannually. If the H2S concentrations increases above 12 % (volume), the H2S concentration will be monitored quarterly. 

TITLE V PROGRAM APPLICABILITY BASIS
Flaring the produced gas could result in SO2 emissions that exceed the Title V major source threshold of 100 tpy. No other pollutants, including hazardous air pollutants (HAP), are close to the major source thresholds. Tellus will also ensure the Tallahala site is not subject to Prevention of Significant Deterioration (PSD) by maintaining an SO2 limit of 240 tpy, below the 250 tpy PSD major source threshold. 

LEGAL AND FACTUAL BASIS FOR DRAFT PERMIT CONDITIONS

The State and Federally-enforceable conditions of Title V Operating Permits are based upon the requirements of the State of Mississippi Air Emissions Operating Permit Regulations for the Purposes of Title V of the Federal Clean Air Act (11 Miss. Admin. Code Pt. 2, Ch. 6.), and applicable requirements effective upon the date of permit issuance.  Applicable requirement means all of the following as they apply to emissions units in a Title V source:

1.	any standard or other requirement set forth in the State Implementation Plan (SIP) approved or promulgated by EPA through rulemaking under Title I of the Federal Clean Air Act (Federal Act) including the following:

a.	most of the State of Mississippi Air Emission Regulations for the Prevention, Abatement, and Control of Air Contaminants (11 Miss. Admin. Code Pt. 2, Ch. 1.) 
b.	the State of Mississippi Regulations for the Prevention of Air Pollution Emergency Episodes (11 Miss. Admin. Code Pt. 2, Ch. 3.),
c.	the State of Mississippi Regulations for the Prevention of Significant Deterioration of Air Quality (11 Miss. Admin. Code Pt. 2, Ch. 5.), and 40 CFR Part 52.21 by reference, and
d.	the provisions of the State of Mississippi Permit Regulations for the Construction and/or Operation of Air Emissions Equipment (11 Miss. Admin. Code Pt. 2, Ch. 2.), relating to construction permits and synthetic minor operating permits;

2.	any term or condition of any construction permits issued pursuant to Mississippi regulations approved or promulgated through rulemaking under Title I;

3.	any standard or other requirement under Section 111 of the Federal Act, including Section 111(d) which includes Title 40, Part 60 of the Code of Federal Regulations (40 CFR Part 60) and relevant sections of 11 Miss. Admin. Code Pt. 2, Ch. 1.;

4.	any standard or other requirement under Section 112 of the Federal Act, including relevant sections of 11 Miss. Admin. Code Pt. 2, Ch. 1.and 40 CFR Parts 61, 63, and 68;

5.	any standard or other requirement of the acid rain program under Title IV of the Federal Act or the regulations promulgated thereunder, including the State of Mississippi Acid Rain Program Permit Regulations for Purposes of Title IV of the Federal Clean Air Act (11 Miss. Admin. Code Pt. 2, Ch. 7.)  adopted November 17, 1994, and 40 CFR Parts 72, 73, 75, 77, and 78;

6.	any requirements established pursuant to Section 504(b) or Section 114(a)(3) of the Federal Act;

7.	any standard or other requirement governing solid waste incineration under Section 129 of the Federal Act;

8.	any standard or other requirement for consumer and commercial products under Section 183(e) of the Federal Act;

9.	any standard or other requirement for tank vessels under Section 183(f) of the Federal Act;

10.	any standard or other requirement of the program to control air pollution from outer continental shelf sources under Section 328 of the Federal Act;

11.	any standard or other requirement of the regulations promulgated to protect stratospheric ozone under Title VI of the Federal Act;

12.	any national ambient air quality standard or increment or visibility requirement under part C of Title I of the Federal Act.

Each State and Federally-enforceable condition of the draft Title V Operating Permit references the specific relevant requirements of 11 Miss. Admin. Code Pt. 2, Ch. 6.or the applicable requirement upon which it is based. Any condition of the draft Title V permit that is enforceable by the State but is not Federally-enforceable is identified in the draft Title V permit as such.

CAM APPLICABILITY
Although there is a limit on SO2, there are no control devices used to meet this limit. The State limit on H2S applies to the gas streams vented to the flare. The flare is used to control these emissions and meet this standard. However, the post-control emissions of H2S do not exceed 100 tpy from any emissions unit; therefore, the H2S sources would at most qualify as “other pollutant-specific emissions units.” CAM for these sources does not have to be evaluated until the application for renewal of the TVOP is due, per §64.5(b). 

MACT APPLICABILITY
The Tellus Tallahala site is a minor or area source of HAP. Therefore, the facility is not subject to any MACT standards addressing major sources only.

NESHAP Subpart ZZZZ and DDDDD
There are no engines or boilers at this site; therefore, the related MACT standards were not evaluated.

NESHAP Subpart HH
The only potentially applicable MACT could be Subpart HH – National Emission Standards for Hazardous Air Pollutants from Oil and Natural Gas Production Facilities. This subpart does apply to both area and major sources; however, for area sources, the affected source only includes each triethylene glycol (TEG) dehydration unit. Tellus does not operate a dehydration unit at this site; therefore, there are no affected sources under Subpart HH at this facility.

NSPS APPLICABILITY
Following is an evaluation of potentially applicable New Source Performance Standards found in 40 CFR Part 60. 

NSPS Subparts Dc, IIII, and JJJJ
There are no engines or boilers at this site, so no evaluation of the potentially relevant fuel burning NSPS standards were made. 

NSPS Subpart Kb:
There are four tanks located at the site which were evaluated for applicability to NSPS Subpart Kb -Standards of Performance for Volatile Organic Liquid Storage Vessels for which Construction, Reconstruction, or Modification Commenced after July 23, 1984. However, the 500-barrel power oil production tank meets the definition of a “process tank” and is not considered a “storage vessel” potentially subject to Subpart Kb. Also, §60.110b(d)(4) states that Subpart Kb does not apply to vessels with a design capacity less than or equal to 420,000 gallons used for petroleum or condensate stored, processed, or treated prior to custody transfer. All four vessels meet the exemption criteria and, thus, are not subject to Subpart Kb.

NSPS Subpart OOOO:
The Standards of Performance for Crude Oil and Natural Gas Production, Transmission, and Distribution were evaluated. These standards apply to affected facilities that commence construction, modification, or reconstruction after August 23, 2011. The site has three (3) potentially affected sources – oil production well, natural gas well, and storage tanks.  This site does not operate a pneumatic controller, this is not a gas well principally drilled for natural gas production, and the tanks were constructed prior to August 23, 2011.  On this basis, the site is not subject to Subpart OOOO.

SPECIFIC APPLICABLE REQUIREMENTS

EMISSION LIMITS	
Emission Point No.	Pollutant	Draft Permit Emission Limits	Monitoring Requirements	
AA-001
(Flare)	SO2	240 tpy	Monitor total gas flow to the flare, monitor H2S concentration of gas annually, semiannually, or quarterly as indicated in the draft permit, calculate monthly and rolling 12-month total SO2 emissions using this data and assuming 100% conversion from H2S to SO2	
AA-001
(Flare)	Flare Pilot	Operate with flame present at all times	Install, operate, and maintain a thermocouple or equivalent device for detecting the presence of a flame.	
AA-002 through AA-007	H2S	1 gr H2S/100 scf and Route gas streams to the Flare	Monitor for presence of a flame.	

OTHER LIMITS: