A turbine system and method of operating is provided. The system includes a compressor configured to generate a compressed low-oxygen air stream and a combustor configured to receive the compressed low-oxygen air stream and to combust a fuel stream to generate a post combustion gas stream. The turbine system also includes a turbine for receiving the post combustion gas stream to generate a low-NOx exhaust gas stream, a heat recovery system configured to receive the low-NOx exhaust gas stream and generate a cooled air stream and an auxiliary compressor configured to generate an oxygen and water vapor deficient cooled and compressed air stream. A portion of the oxygen and water vapor deficient cooled and compressed air stream is directed to the combustor to generate an Oxygen and H2O deficient film on exposed portions of the combustor, and another portion is directed to the turbine to provide a cooling flow.