U.S. EPA Issues Supplemental Proposal to Oil and Natural Gas Sector Methane and VOC Rules

On December 06, 2022, the U.S. Environmental Protection Agency (U.S. EPA) released a supplement to its proposed rule from November 15, 2021 which amended existing New Source Performance Standards (NSPS) for Crude Oil and Natural Gas Facilities (40 CFR Part 60, Subparts OOOO and OOOOa), established a new subpart for Crude Oil and Natural Gas Facilities for which Construction, Modification, or Reconstruction Commenced after November 15, 2021 (Subpart OOOOb), and created Emissions Guidelines for Greenhouse Gas Emissions from Existing Crude Oil and Natural Gas Facilities (Subpart OOOOc).  An article on the original proposed rule was published on our website in December 2021 by Daryl Whitt.

The original proposed rule did not include draft regulatory text of the newly proposed rules for review. However, with this supplemental proposal, revised language for both Subparts OOOOb and OOOOc is provided. The new proposed rule package includes revised monitoring requirements, updates to requirements for specific facility types, a Super Emitter Response Program, and guidance for the development of plans for existing sources by state and tribal agencies. The following includes a brief overview of each of these changes, with each applying to both new sources (OOOOb) and existing sources (OOOOc).

Revised Monitoring

New monitoring provisions are proposed to ensure that equipment is not leaking at well sites, centralized production facilities, natural gas processing plants, and compressor stations. The following changes to monitoring requirements are included in the supplemental proposal:

• Monitoring is required for all well sites, regardless of the magnitude of the emissions.
• The use of advanced technologies for the monitoring of methane will no longer have a fixed bimonthly frequency, with frequencies dependent on the facility type and minimum detection threshold of the technology.
• The use of advanced technologies for periodic screening as an alternative to the standard prescribed OGI monitoring is encouraged and allowed with approval.
• The use of continuous monitoring is also encouraged and allowed with approval.
• The new Appendix K containing procedures for OGI monitoring is now only required at onshore natural gas processing plants. The remaining facilities where monitoring is required (well sites, centralized production facilities, and compressor stations) can conduct OGI according to newly proposed procedures or Method 21.
• Monitoring at well sites will need to continue for the life of the site until the wells are properly plugged.

Changes Associated with Facility Types

The following key proposed changes, by facility type, are incorporated into the supplemental proposal:

• Pneumatic pumps – the definition of pneumatic pump affected facility is updated so that it is now the collection of all pumps. The proposed standard is revised so that it is now a zero emissions standard, restricting the use of natural gas-driven pneumatic pumps completely.
• Pneumatic controllers – the definition of pneumatic controller affected facility is updated to the collection of all pneumatic controllers. The zero emissions standard from the proposed rule is retained.
• Centrifugal compressors –proposed standards are added for dry seal centrifugal compressors and the standards for wet seal centrifugal compressors are revised.
• Well affected facility – the definition is updated to reflect a single well, with separate standards for well completions (new sources/OOOOb only), associated gas, and gas well liquids unloading operations, all of which could apply to an affected facility. A modification to a well affected facility now includes hydraulic fracturing or re-fracturing of an existing well.
• Associated gas – the supplemental proposal eliminates flaring as an option except for extenuating circumstances. The expectation is that associated gas will be routed to a sales line, will be used as an onsite fuel source or another useful purpose that a purchased fuel or raw material would serve, or will be reinjected into a well for enhanced oil recovery.
• Liquids unloading is no longer automatically considered a modification to an existing well affected facility subject to the new source standards. A zero emissions standard is proposed for existing sources, which aligns with the standard for new and modified wells.
• Storage Vessels – the definition of storage vessel affected facility is updated to reflect a tank battery with potential emissions of VOC greater than 6 tons/yr (tpy) or potential emissions of methane greater than 20 tpy. The method for determining potential emissions must now account for flashing, working, and breathing losses.
• Combustion control devices – requirements addressing continuous parameter monitoring systems for maintenance of pilot flame, minimum net heating value, and maximum velocity for flares and enclosed combustion devices are added along with monthly Method 22 observations.
• Onshore natural gas processing plants – Appendix K procedures are now required for OGI monitoring to ensure that equipment is not leaking.

Super Emitter Response Program

The supplemental proposed rule includes elements of a super-emitter response program, designed to reduce emissions associated with large emissions events (defined as events with emissions greater than 220.5 lbs/hr of methane).  Several key elements of the program are described below:

• Certain regulatory authorities or U.S. EPA approved third party entities can notify owners and operators of regulated facilities when a super emitter event is detected.
• Once notified that a super emitter event is detected, owners and operators would be required to conduct a root cause analysis and take corrective actions to address emissions.
• If a super emitter event is confirmed, details would need to be reported to both the U.S. EPA and any appropriate state or tribal authorities.
• All notices and reports will be made available in a database visible by the public.
• U.S. EPA is working on a mechanism for notifier’s certification to be revoked if they report erroneous information more than once.

Resources for Development of Plans for Existing Sources

State, tribal, and federal authorities are responsible for creating and submitting plans to establish emissions standards that align with the Emissions Guidelines for existing sources in the newly created Subpart OOOOc. In the supplemental proposed rule, U.S. EPA has established criteria to determine whether existing state programs are equivalent to the proposed standards. There are also guidelines for the types of information and evidence states must provide if they would like to apply a less stringent standard to a particular facility or type of facility, based on factors such as the source’s age or physical limitations of installing emissions control equipment. As part of the process of developing these plans, states are required to include meaningful engagement with pertinent stakeholders. The final plans are required within 18 months after the final Emissions Guidelines are published in the Federal Register, with a mandated compliance deadline of no later than 36 months after the state plan is due.

What do I need to do?

The comment period for the supplemental rule ends on February 13, 2023. U.S. EPA will conduct virtual public hearings on January 10 and January 11, 2023. The final rule is expected in 2023. The proposed changes to the proposed supplemental rules add many new requirements for new and existing sources in the Oil and Natural Gas industry. This article only provides an overview of some of the key changes associated with the supplemental proposed rule and is not a complete inventory of all of the requirements or revisions. If you have additional questions or would like to gain an understanding of how the new rules could affect your facility’s compliance program, please reach out to me at cward@all4inc.com. ALL4 is monitoring all updates published by the U.S. EPA on this topic, and we are here to answer your questions and assist your facility with any aspects of regulatory compliance.