2024 Look Ahead: New Oil and Gas Greenhouse Gas Requirements

Changes to the Standards of Performance for New Stationary Sources (NSPS) for oil and gas operations have been in the works for several years, dating back to the prior administration. The U.S. Environmental Protection Agency (EPA) recently finalized a rule package to regulate greenhouse gas emissions (i.e., methane) under new 40 CFR Part 60 Subpart OOOOb – Standards of Performance for Crude Oil and Natural Gas Facilities for Which Construction, Modification, or Reconstruction Commenced After December 6, 2022 (NSPS OOOOb). EPA also finalized 40 CFR Part 60 Subpart OOOOc – Emissions Guidelines for Greenhouse Gas Emissions from Existing Crude Oil and Natural Gas Facilities (EG OOOOc) under Clean Air Act (CAA) Section 111(d) to regulate methane emissions from existing oil and gas sources. While not addressed in this article, EPA also recently signed a proposed rule implementing provisions of the Inflation Reduction Act (IRA) related to reported waste greenhouse gas (i.e., methane) emissions, associated fees, and incentives for the early adoption of methane reduction practices as included in NSPS OOOOb and EG OOOOc. The NSPS OOOOb and EG OOOOc rule package builds upon the existing regulations, is highly nuanced, and is the first step in unifying the requirements for new and existing oil and gas operations.  Please read on for additional details.

The regulatory process began on November 15, 2021 with EPA’s initial proposal of NSPS OOOOb and EG OOOOc. The process was interrupted on December 6, 2022 when EPA published a supplemental proposal to “…update, strengthen, and expand the standards proposed on November 21, 2021…”  The new proposals included a “super-emitter response program,” refinements based on public comments received on the November 15, 2021 proposal, and implementation of methane requirements for states related to EG OOOOc. The final NSPS OOOOb and EG OOOOc rules were signed by the EPA Administrator on November 30, 2023 but have not yet been published in the Federal Register as of January 16, 2024. It is important to note that many of the requirements under NSPS OOOOb for “new, modified, and reconstructed” sources will gradually be required and implemented at “existing” sources as states finalize their plans to implement EG OOOOc or equivalent rules. Implementing the EG OOOOc requirements at “existing” low-producing sources could present technical and financial challenges to many operators.

NSPS OOOOb and its predecessors (i.e., NSPS OOOO and OOOOa) apply  to affected “upstream” (i.e., well sites, storage tank batteries, gathering and boosting stations, and natural gas processing plants) and “midstream” operations (i.e., compressor stations and storage tank batteries) in the crude oil and natural gas category. Both NSPS OOOOb and EG OOOOc include a newly defined facility characterized as a “centralized production facility,” which is “…all equipment at a single surface site used to gather, for the purpose of sale or processing to sell, crude oil, condensate, produced water, or intermediate hydrocarbon liquid from one or more offsite natural gas or oil production wells.” While the NSPS OOOO and OOOOa rule iterations primarily regulate emissions of volatile organic compounds (VOC), NSPS OOOOb regulates both VOC and methane emissions and EG OOOOc regulates methane emissions.

Under NSPS OOOOb, the applicability date for affected new, modified, or reconstructed sources is December 6, 2022. Sources that commenced construction prior to December 6, 2022 are existing sources under NSPS OOOOb but remain subject to and affected by NSPS OOOOa. Sources will need to pay particular attention to the term “commenced” to ensure that potentially affected sources that are/were  under construction between the effective date of the rule (December 6, 2002) and the rules’ signature date of November 30, 2023 are properly characterized as subject to NSPS OOOOa or OOOOb. As a reminder, “commenced” under 40 CFR 60.2 means that “… an owner or operator has undertaken a continuous program of construction or modification or that an owner or operator has entered into a contractual obligation to undertake and complete, within a reasonable time, a continuous program of construction or modification.”

Under EG OOOOc, states are required to develop and have EPA approve “plans” to regulate all existing oil and gas sources within 24 months of the effective date of the rule. The state-specific plan compliance dates for facilities cannot exceed 36 months after the plans are due to EPA (i.e., approximately 5 years total from the EG’s effective date). There is no “applicability date” for EG OOOOc because as emissions guidelines, EG OOOOc does not directly regulate affected sources but provides presumptive requirements for states for use in developing their plans. Applicability dates will be based on state-specific plans. EPA’s action on each State plan submission will be carried out via rulemaking, which includes public notice and comment.

“Existing” oil and gas sources that are currently subject to 40 CFR Part 60, Subpart KKK (NSPS KKK), Subpart OOOO (NSPS OOOO), or NSPS OOOOa will continue to be subject the applicable standards under each rule until a state or Federal plan implementing EG OOOOc becomes effective. After a plan’s implementation, any source that is not subject to NSPS OOOOb, as described, is by default an existing source subject to EG OOOOc and compliance with an implementing plan consistent with EG OOOOc will constitute compliance with the applicable older NSPS rules (i.e., Subpart OOOO, Subpart OOOOa). EPA has generally determined that the presumptive standards under EG OOOOc will result in the same or greater emission reductions than the current standards in the older NSPS.

A summary¹ of key² standards under NSPS OOOOb and EG OOOOc is provided in Table 1.

Table 1 | Summary of Key Standards

One new key aspect under both NSPS OOOOb and EG OOOOc are the “super-emitter” provisions that are intended to promote early detection and mitigation of super-emitter events. A super-emitter event is defined as “…any emissions event that is located at or near an oil and natural gas facility (e.g., individual well site, centralized production facility, natural gas processing plant, or compressor station) that is detected using remote detection methods and has [a] quantified emissions rate of 100 kg/hr of methane, or greater.” Under the rule a “notifier,” which could be the source operator, a regulatory agency, or a qualified third party entity, can detect a methane emission event using satellite detection, remote sensing equipment on aircraft, or a mobile monitoring platform. The notifier must submit an event notification to the EPA through a new super-emitter portal that must provide specific information (i.e., notifier ID, date, location, facility owner/operator, methodology, documentation, etc.) within 15 days of the event.  The EPA will review the notification and provide notice regarding the reported event to the source. The source is then required to initiate an investigation within five days of their receipt of notice from the EPA. The investigation must be completed in 15 days and must include key information as specified in the rule (i.e., event ID number, general facility information, is source subject to regulation, source of  the event, is the event ongoing or not, when ended, end date and time of event, and certification). This new super-emitter provision could be a harbinger of what facilities can expect under future new or revised rules where remote sensing of releases is technically feasible.

The NSPS OOOOb and EG OOOOc rule package is substantial with many nuances that are not addressed within this article. ALL4 recommends that potentially affected facilities review the rule package to gain a basic understanding of all of its new requirements. Also, note again that many of the substantive requirements under NSPS OOOOb for “new, modified, and reconstructed” sources will gradually be required and implemented at “existing” sources as states finalize their plans to implement EG OOOOc or equivalent rules. Implementing the EG OOOOc requirements at “existing” low-producing sources could present technical and financial challenges to many operators. Please contact your ALL4 Project Manager or Roy Rakiewicz at rrakiewicz@all4inc.com if you have any questions.

¹Derived from EPA summary.

² Refer to the final rule for all applicable requirements.

³ See the final rule for additional time-graduated standards based on well commencement dates.