On August 2, 2013, EPA updated the New Source Performance Standards (“NSPS”) at Subpart OOOO, which apply to the crude oil and natural gas production industry. The updates focus on storage tanks, and are an acknowledgement by EPA – after industry petition – that it underestimated the number of storage tanks that would become subject to the new performance standards.

Industry participants filed several administrative reconsideration petitions after EPA promulgated NSPS OOOO. These were stayed pending EPA reconsideration of the issues raised by the industry petitioners. While the amendments address some of the issues raised in the administrative reconsideration petitions, EPA must continue to evaluate other issues raised such as those related to compliance monitoring. In the preamble to the storage tank amendments, EPA notes that it intends to complete any such reconsideration by the end of 2014.

Bryan Cave has previously provided alerts on May 1, 2012 and August 17, 2012 regarding NSPS OOOO. In addition, we have published two papers discussing NSPS OOOO for the Rocky Mountain Mineral Law Foundation Annual Institute in 2012, and the Special Institute on Air Quality Issues Affecting Oil, Gas, Mining and Development in 2013.

For quick reference, the pre-publication rule is located here, http://www.epa.gov/airquality/oilandgas/pdfs/20130805fr.pdf, and the Fact Sheet is located here, http://www.epa.gov/airquality/oilandgas/pdfs/20130805fs.pdf.

So far, the rule has only been published as a “pre-publication” version. The final rule will be effective once it is published in the Federal Register.

Notably, the update pushes compliance deadlines back as follows:

  • Tanks that come online after April 12, 2013, must control VOC emissions as required by NSPS OOOO by April 15, 2014, or within 60 days, whichever is later; and
  • Tanks that came online between August 23, 2011, and April 12, 2013, must control VOC emissions as required by NSPS OOOO by April 15, 2015.

EPA’s primary focus in the amendments is on storage tanks deadlines. However, EPA made several additional changes to other regulations in NSPS OOOO as well. Most of the changes were technical, i.e., fixing typos and cross-references. Some of the changes are intended to streamline the regulations, or make them more consistent with other requirements, such as those in NESHAP HH. In all, the EPA action will amend the following provisions in NSPS OOOO:

  • 40 C.F.R. § 60.5365 (“Am I subject to this subpart?”)
    • Incorporating the applicability determination requirements (i.e., the 6 tpy threshold) that used to be located in the storage tank standards, Section 60.5395, so that the storage tank-specific regulation only applies to NSPS OOOO-regulated tanks;
    • Specifying deadlines for calculating VOC emissions from Group 1 storage tanks and submitting notifications;
    • Clarifying that a source can take into account any legally and practically enforceable emission limit under federal, state, local, or tribal authority when determining the VOC emission rate for storage tanks;
    • Clarifying that a NSPS OOOO--regulated storage tank whose VOC PTE decreases to less than 6 tpy remains an affected facility; and
    • Clarifying that PTE does not include any vapor recovered and routed to a process;
  • 40 C.F.R. § 60.5380 (centrifugal compressor standards);
    • Requiring control devices using wet seal fluid degassing systems to be equipped consistent with certain specifications; and
    • Updating initial and continuous compliance demonstration requirements;
  • 40 C.F.R. § 60.5390 (pneumatic controller standards);
    • Clarifying exemptions based on functional needs, which include response time, safety, and positive actuation;
    • Clarifying the requirement that exempt controllers must be tagged;
  • 40 C.F.R. § 60.5395 (storage vessel standards);
    • Specifying that requirements only apply to NSPS OOOO-regulated Group 1 and Group 2 storage tanks (as opposed to all storage tanks);
    • Pushing compliance for Group 1 vessels back to April 15, 2015, and compliance for Group 2 vessels to April 15, 2014;
    • Establishing an “alternative emissions limit” of uncontrolled emissions if the owner or operator can demonstrate that uncontrolled emissions from a tank have dropped to less than 4 tpy of VOCs;
    • Requiring control devices and floating roofs to be equipped consistent with certain specifications;
    • Establishing or clarifying compliance demonstration, notification, recordkeeping, and reporting requirements;
    • Imposing requirements for NSPS OOOO-regulated storage tanks that have been removed from service and are brought back into service for fracturing/refracturing or other reasons;
    • o Clarifying exemptions based on compliance with other regulations;
  • 40 C.F.R. § 60.5410, 60.5411, and 60.5412 (initial compliance demonstrations);
    • Correcting typos, numbering, and cross-references;
    • Correcting the omission of tagging for NSPS OOOO-regulated pneumatic controllers;
    • Clarifying compliance requirements for consistency with the other amendments;
    • Clarifying that the manufacturers’ performance testing applies to the model of the combustion control device, not each individual control device;
  • 40 C.F.R. § 60.5413 (performance testing for control devices on storage tanks and compressors);
    • Revising manufacturers’ performance testing requirements to be more consistent with updates to NESHAP HH that were not drafted into the original rule;
    • Streamlining testing so that enclosed combustor models that pass the test protocol in NSPS OOOO will also meet NESHAP HH requirements;
  • 40 C.F.R. § 60.5415 (compliance demonstrations);
    • Correcting typos, numbering, and cross-references;
    • Clarifying that manufacturers’ performance testing is optional;
  • 40 C.F.R. § 60.5416 (vent system inspection and monitoring);
    • Correcting typos, numbering, and cross-references;
    • Replacing Method 21 requirements with monthly sensory inspections of covers and closed-vent systems;
  • 40 C.F.R. § 60.5417 (control device monitoring for storage tanks and compressors);
    • Correcting typos, numbering, and cross-references;
    • Replacing continuous parametric monitoring systems (“CPMS”) requirements with visual inspections and pilot flame checks;
  • 40 C.F.R. § 60.5420 (notification, reporting, and recordkeeping);
    • Removing cross-references to notification requirements in 40 C.F.R. § 60.7;
    • Including centrifugal and reciprocating compressors in the list of NSPS OOOO-regulated sources that do not have to submit the “General Provisions” notifications in 40 C.F.R. § 60.7;
    • Allowing 90 days from the end of the initial compliance period for submittal of initial annual reports and compliance certifications (consistent with Title V);
    • Correcting typos, numbering, and cross-references;
  • 40 C.F.R. § 60.5430;
    • Adding or revising definitions of “condensate,” “flow line,” “Group 1 storage vessel,” “Group 2 storage vessel,” “Intermediate hydrocarbon liquid,” “produced water,” and “storage vessel.”