On August 18 2015 the US Environmental Protection Agency (EPA) fired another salvo in its efforts to combat climate change, proposing new methane and volatile organic compound (VOC) regulations under the Clean Air Act for the oil and natural gas sector.(1)
Specifically, the EPA is proposing expansive amendments to New Source Performance Standards Sub-part OOOO, the new source performance standards for the oil and natural gas sector. The proposal addresses new, modified and reconstructed emissions sources across the entire sector.
The proposal adds requirements for hydraulically fractured oil well completions, fugitive emissions from well sites and compressor stations and pneumatic pumps.
The proposal adds methane standards to the existing VOC standards for hydraulically fractured gas well completions and equipment leaks at natural gas processing plants.
The proposal expands standards for pneumatic controllers and centrifugal and reciprocating compressors (with the exception of well-head compressors) to the entire oil and gas sector.
In general, the standards for new or expanded sources will be the same or similar to those under the current version of Sub-part OOOO. However, the proposed fugitive emissions standards for well sites and compressor stations will be based on the use of an optical gas imaging device (eg, an infrared camera). This requirement and reduced emission completion requirements for oil wells appear to be the most significant of the new and expanded control provisions.
Potentially more significant than the proposed methane control requirements, the EPA is requesting comments on 'next-generation compliance' options. This request may be laying the foundation for eventual requirements, such as use of third-party auditors to certify compliance, submission of third-party reports directly to the EPA and professional engineer certification that vent systems will meet a 'no venting' standard.
Like all of the EPA's climate change regulations, the proposal will receive much scrutiny.
As expected, the new proposal arrives in the form of amendments to New Source Performance Standards Sub-part OOOO. When Sub-part OOOO was finalised in 2012, the EPA declined to impose explicit requirements for methane reductions. It subsequently received petitions for reconsideration in which environmental advocacy groups urged the administrator to adopt standards for the methane pollution released by the oil and gas sector.
The EPA states in the preamble to the proposed rule that the new regulations are its response to these petitions for reconsideration. The preamble also notes that the EPA has, over the last several years, collected significant data on oil and gas sector methane emissions through the Mandatory Greenhouse Gas Reporting Rule and issued several white papers summarising sector emissions and potential mitigation technologies in 2014.
Lastly, the preamble notes that proposed regulations follow through on President Obama's 2013 Climate Action Plan and Methane Strategy and the EPA's own goal of cutting oil and gas sector methane emissions by 40% to 45% from 2012 levels by 2025.
New and expanded requirements
In the preamble, the EPA states that the Best System of Emissions Reduction – the control standard for new, modified and reconstructed new source performance standards sources – is generally the same for methane as it is for VOCs. Accordingly, the proposal generally expands the application of the types of existing VOC control contained in the current version of Sub-part OOOO. The new and expanded requirements will apply to those controls constructed, modified or reconstructed after the publication date of the proposal.
The proposal expands the requirements for wet-seal centrifugal compressors in the production segment to the entire oil and gas sector, except well-head compressors. The requirement will be to capture and reduce emissions by 95%.
The proposal expands the requirements for reciprocating compressors in the production segment to the entire oil and gas sector, except well-head compressors. The requirement will be to change the rod packing every 26,000 hours or 36 months.
The proposal expands the general requirement to use low-bleed controllers (not to exceed six standard cubic feet per hour) to the entire oil and gas sector; however, no-bleed controllers will still be the general requirement for natural gas processing plants.
The proposal adds natural gas-driven chemical/methanol pumps and diaphragm pumps to Subpart OOOO. The general requirement would be to capture and reduce emissions by 95% if a control device is available at the site.
The proposal expands the reduced emission completion and combustion control requirements for hydraulically fractured natural gas wells to hydraulically fractured oil wells. The same partial exemptions that apply to natural gas wells (eg, for wildcat, delineation and low-pressure wells) will also apply to oil wells.
The proposal adds fugitive emission requirements to production well sites and compressor stations. Inspections will be required on a quarterly to annual basis, depending on the results of the last two semi-annual monitoring events.
Leaks will be visually confirmed with an optical gas imaging device. The EPA is soliciting comments on whether to allow Method 21 as an alternative.
Well sites with only a wellhead and no ancillary equipment and low production sites (less than 15 barrels of oil per day) will be excluded.
Well sites will be classed as 'modified' only if a new well has been added or a well has been fractured or refractured.
Compressor sites will be classed as 'modified' only if a new compressor has been added or a physical change has been made that increases the compression capacity of the facility.
For natural gas processing plants, methane will be added to the list of VOCs as a controlled pollutant, but requirements will not change.
Based on insufficient information, the EPA is not proposing standards for liquids unloading. However, it is soliciting comment on this issue.
The EPA is taking comment on next-generation compliance options, such as independent third-party compliance verifications, professional engineer certifications for vent systems and third-party submission of compliance information.
The EPA is also proposing modifications to the current requirements in Sub-part OOOO. These changes will apply to affected facilities that are already subject to Sub-part OOOO. The most significant of these amendments are as follows.
Control device monitoring and testing
The proposal will require that unless a manufacturer's performance test has been conducted, the operator must conduct an initial test and follow-up tests every 60 months. The performance criterion will be raised from 20 to 600 parts per million by volume. Monthly monitoring of visual emissions will be required (15 minutes using Method 22).
The EPA proposes to clarify that flares must meet the requirements in the Code of Federal Regulations Section 40 Part 60.18. It is requesting comment on the use of pressure-assisted flares that exceed the maximum exit velocity of 400 feet per second.
Large water recycling tanks
The EPA is considering changes to remove applicability for large water recycling tanks that, despite very low VOC concentrations, can exceed six tons per year of VOCs due to millions of gallons of annual throughput.
With the possible exception of the Mandatory Greenhouse Gas Reporting Rule, which was specifically mandated by Congress, every EPA rule concerning greenhouse gases has faced extensive litigation. This rule will be no different.
However, the most significant issue in the proposal may not be the proposed methane limits, but the EPA's request for comments regarding next-generation compliance options. These could presage requirements to employ third-party auditors to inspect and certify compliance and even provisions mandating that auditors submit compliance reports directly to the EPA.
A possible professional engineer certification for vent systems and control devices could be another issue. The EPA seems to be aiming towards a 'no venting' standard similar to that currently imposed in Colorado. The professional engineer would have to verify and certify that the closed vent system was designed to handle all reasonably expected emissions scenarios, including flash emissions, such that thief hatches and other devices would not relieve during normal operations. If such a requirement were adopted, it would have a very significant effect on many facilities, particularly minor sources that are currently permitted to allow emissions from such devices as long as annual emissions are below specified levels.
If next-generation compliance options were to be finalised, they would almost certainly begin appearing in future rules as well, especially if the EPA's budgets keep getting cut and enforcement resources continue to dwindle. The overall impact of these types of requirement on Clean Air Act enforcement could be similar to Title V.
Edward Clark Lewis
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