Enron Facilities in the Houston Area ,
 The MTBE plant, located on 70 acres of land in Morgan's Point, can produce=
=20
17,000 barrels per day of MTBE. Feedstocks to the plant to produce the MTBE=
=20
are methanol from Enron's methanol plant and normal butane from the Mt.=20
Belvieu underground storage facility. The emission sources at this facility=
=20
are authorized under Texas Natural Resource Conservation Commission (TNRCC)=
=20
air permits and authorizations (e.g., Standard Exemptions) and are not=20
"grandfathered" emission sources. Grandfathered emissions sources are sourc=
es=20
installed in Texas before September, 1971 (that predate the Texas Clean Air=
=20
Act) and are often uncontrolled.

The major sources of NOx emissions at this plant are two boilers, an olefle=
x=20
heater, and three hot oil heaters. All are currently controlled with low NO=
x=20
burners, but will require more combustion controls and Selective Catalytic=
=20
Reduction (SCR) to attain the strict limits in the proposed Houston=20
non-attainment regulations. The proposed limits are 0.01 pounds of NOx per=
=20
MMbtu for the two  boilers and oleflex heater, and 0.015 pounds of NOx per=
=20
MMbtu for the smaller hot oil heaters. One third of the reductions must be=
=20
attained by the end of 2002, two thirds by the end of 2003, and all=20
reductions must be completed (or emission credits purchased) by December 31=
,=20
2004.

Major Volatile Organic Compound (VOC) emission sources at this facility=20
include storage tanks (controlled with floating roofs) and loading faciliti=
es.

The methanol plant, located on 20 acres in Pasadena, can produce 125,000,00=
0=20
gallons of methanol per year. Feedstocks to the plant to produce methanol a=
re=20
natural gas and oxygen. Most of the emission sources at this facility are=
=20
authorized under TNRCC air permits and Standard Exemptions, but some predat=
e=20
the Texas Clean Air Act and are grandfathered.

The major sources of NOx emissions at this plant are a reformer (heater) an=
d=20
three natural gas-fired reciprocating engines. The reformer is currently=20
controlled with low NOx burners, but will require more combustion controls=
=20
and Selective Catalytic Reduction (SCR) to attain the strict limit of 0.01=
=20
pounds of NOx per MMbtu in the proposed Houston non-attainment regulations.=
=20
The proposed limit for the engines (currently uncontrolled) is 0.017 grams=
=20
per horsepower-hour. Although combustion controls and SCR are possible=20
control methods to attain this strict limit, they are unproven on engines,=
=20
and it is likely that the engines will need to be replaced with electric=20
motors. One third of the reductions must be attained by the end of 2002, tw=
o=20
thirds by the end of 2003, and all reductions must be completed (or credits=
=20
purchased) by December 31, 2004.

Major VOC emissions sources at this facility include storage tanks=20
(controlled with scrubbers) and loading facilities.

The Bammel gas storage facility is located on Kuykendahl Road in north=20
Houston and is used for the underground storage of natural gas. The 15=20
natural gas-fired engines at this facility were replaced with electric moto=
rs=20
in 1999. The estimated reductions of emissions by the replacements at this=
=20
facility were 1,254 tons/year of NOx and 42 tons per year of VOC. Most of t=
he=20
NOx credits have been sold to other companies under TNRCC=01,s current trad=
ing=20
program, which is not a cap and trade program.=20

The remaining minimal emissions at this site are from the glycol dehydrator=
s=20
(NOx and VOC), and storage tanks (VOC). The VOC emissions from the=20
dehydrators are already controlled with incinerators under current TNRCC=20
regulations.

The 1999 emissions from the chemical plants as indicated in Enron=01,s EH&S=
=20
Annual Report are 2,822 tons per year of NOx, 823.7 tons per year of VOC, a=
nd=20
195 tons per year of Carbon Monoxide. Most of the NOx emissions are from th=
e=20
uncontrolled engines at the methanol plant.

The Cost Estimate for the installation of combustion controls and SCR, and=
=20
replacement of the engines at the chemical plants is $30 to $40 million.
steven.kean@enron.com