This morning, the Environmental Protection Agency published in the Federal Register its latest significant Clean Air Act regulatory actions specifically targeting the oil and natural gas industry.
This alert updates our pre-publication alert on EPA’s actions, https://www.bryancave.com/en/thought-leadership/epa-the-clean-air-act-and-the-oil-and-natural-gas-industry-new.html, and focuses on compliance, judicial review and public comment deadlines triggered by publication in the Federal Register. As a refresher for those familiar with the rule and update for those catching up, the rules cover:
- Performance standards to limit methane emissions and volatile organic compound emissions from new, modified and reconstructed emission sources in the oil and natural gas field: https://www.gpo.gov/fdsys/pkg/FR-2016-06-03/pdf/2016-11971.pdf;
- A change to EPA’s air-permitting regulations that clarifies how EPA will determine what a “source” is for permitting purposes: https://www.gpo.gov/fdsys/pkg/FR-2016-06-03/pdf/2016-11968.pdf; and
- A plan for permitting “minor” emissions sources in Indian country: https://www.gpo.gov/fdsys/pkg/FR-2016-06-03/pdf/2016-11969.pdf.
The deadline to seek judicial review of the rules will be August 2, 2016. The rules will have substantial impacts on the oil and natural gas industry. Most notably, operators will have to pay attention to the compliance dates in the new performance standards, NSPS OOOOa. One challenging aspect of NSPS OOOOa is that operators will have to meet the compliance dates even as industry and EPA duel over interpretations and likely lawsuits. The headline compliance dates for the new NSPS OOOOa are:
- August 2, 2016 – start of initial compliance period for tanks, LDAR and processing plants, sweetening units, wet seal centrifugal compressors, reciprocating compressors and pneumatic controllers (see table below for compliance requirements), 40 C.F.R. §§ 60.5370a(a) and 60.5410a;
- November 30, 2016 – phase-in for the new “green” well completion and pneumatic pump requirements, 40 C.F.R. §§ 60.5375a and 60.5393a;
- June 3, 2017 – phase-in for LDAR requirements at well sites and compressor stations, 40 C.F.R. § 60.5397a(f);
- August 2, 2017 – initial compliance period ends, 40 C.F.R. § 60.5410a;
- October 31, 2017 – initial annual reports are due to EPA, 40 C.F.R. § 60.5420a(b).
EPA has published a table summarizing the performance standards, which we reproduce here:
Click here to view table.
Today, EPA also published public notice of its proposed existing-sources information collection request (ICR), https://www.gpo.gov/fdsys/pkg/FR-2016-06-03/pdf/2016-11967.pdf. There is a 60-day comment period on EPA’s proposal, so comments on the proposed ICR will also be due on August 2, 2016.
Already, oil and natural gas operators have begun expressing concerns about the ICR’s scope:
- If a company becomes aware of existing or past noncompliance (e.g., Title V permitting) during its response to the ICR, will they qualify for any audit privilege or affirmative defense?
- Does an owner’s/operator’s likelihood of receiving the ICR or its requirement to respond to the ICR depend on what type of air permit (if any) the owner/operator has for a given facility?
- Is there any relief for small-business owners?
- Does EPA provide any information regarding how it will select the Part 2 ICR respondents?
- What should owners/operators think of EPA’s proposed CBI protections, or lack thereof?
- Will responses to EPA open the door to FOIA disputes and competitive issues?
Some of these questions have straightforward answers. For example, there is no relief for small-business owners. The Part 1 survey, in which operators must catalogue the number and types of equipment at production facilities, is required for all operators. The Part 2 survey, in which operators must provide detailed, unit-specific facility surveys regarding emission-control devices and practices, employs a sampling approach that may capture small businesses. According to EPA, the only “relief” for small business is that they are smaller, i.e., they will have “fewer wells and equipment to report.” Moreover, the other questions raise complicated issues, and all of the questions have caused concern in the industry. Accordingly, operators and trade groups should consider submitting public comments, and scrutinize their responses closely for confidentiality and potential enforcement issues.
After taking comment, EPA hopes to publish the ICR itself by October 30, 2016. Operators would have to complete Part 1 within 30 days of receipt. The sample of operators receiving Part 2 would have to respond to that more-detailed survey within 120 days of receipt.