What Rich Oil Men Need to Know About Quad O Revisions

No doubt that Jed Clampett and J.R. Ewing would not have been quite as successful with their oil and natural gas operations if they had to meet the Standards of Performance for New Stationary Sources listed under 40 CFR Part 60, Subpart OOOO (Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution).  But they might be encouraged with the recently proposed amendments from U.S. EPA regarding a reconsideration of issues related to storage vessel provisions in Subpart OOOO.

The first issue that U.S. EPA proposed for reconsideration was the definition of a storage vessel and a storage vessel affected facility.  U.S. EPA refined the contents and materials that make up a storage vessel so that only the intended vessels were being regulated, that is, non-mobile storage vessels with crude oil, condensate, intermediate hydrocarbon liquids, and produced water.  The refined definition clarified the applicability of the definition and eliminated the potential for other containers to become regulated.   Although, if a storage vessel is skid mounted or on wheels, and thus could be exempt, records showing that the storage vessel has not been on site for 180 consecutive days must be available. If there is at least one storage vessel at the well site, a natural gas processing segment or a natural gas processing or storage segment and that single vessel has the potential to emit volatile organic compounds (VOCs) at rates of 6 tons per year (tpy) or more, then the operations qualify as a storage vessel affected facility.  If the individual storage vessels have enforceable requirements limiting VOC emissions to less than 6 tpy and the documentation to support the actual emission levels is maintained, then the storage vessel affected facility definition does not apply. 

In their proposed reconsideration, U.S. EPA also noted that industry’s concern about having sufficient control equipment available to limit VOC emissions from more than 20,000 affected storage vessels was legitimate.  As a result, U.S. EPA is proposing a couple of concessions.  First, U.S. EPA is proposing two categories of storage vessels where both of these regulated storage vessels have 6 tpy of VOC emissions.  Group 1 sources are those sources constructed, modified, or reconstructed between August 23, 2011 and the Federal Register publication date of the proposed reconsideration.  These Group 1 sources will be able to avoid the requirement to install emission control equipment as long as their emissions do not increase from levels present on the Federal Register publication date.  If a Group 1 source does increase its emissions for any reason, then it will become subject to the Group 2 requirement to install a control device.  A Group 2 source is one that was constructed/reconstructed/modified after the Federal Register publication date of the proposed reconsideration.  A Group 2 source must control its VOC emissions by 95% by April 15, 2014 or 60 days after start-up whichever is later (during the 60 day period sources must quantify emissions in the first 30 days and then control emissions within the next 30 days).  Only Group 2 sources must calculate their emission on a monthly basis; however, it would be a good idea for Group 1 sources to determine their emissions monthly so that there is documentation that the Group 1 storage vessel is not experiencing a VOC emission increase.  The only formal Group 1 requirement is to notify U.S. EPA of each storage vessel and its location by October 15^th, 2013. 

Once uncontrolled VOC emissions from a storage vessel drop to less than 4 tpy and stay below this threshold for 12 consecutive months, then emission control equipment can be removed.  However, if uncontrolled emission increase to 4 tpy or more, then the 95% control requirement is reactivated.  For storage vessels that are already equipped with 95% VOC emission control, U.S. EPA proposed streamlined compliance monitoring provisions that will be applicable until the reconsideration of issues concerning initial and continuous compliance provisions of the NSPS are completely vetted.

In addition to rule revisions directly affecting oil and natural gas operators, U.S. EPA proposed a test protocol for manufacturer testing of enclosed combustors that would be used to control storage vessel VOC emissions.  This manufacturer testing of the control device is in lieu of owners and operators conducting site testing of the control device.  Owners or operators could essentially purchase “certified” U.S. EPA combustion control devices that would be equipped with a thermocouple and a recording device and thereby eliminate the need for on-site emission testing.  Finally, U.S. EPA allocated 60 more days (from 30 days to 90 days) for affected facilities to submit the annual report and compliance certification.

In conclusion, it would be an easy bet that if Jed and J.R. were still alive they would be investing in companies associated with the VOC controls on the storage vessels and companies involved with keeping oil and natural gas companies in compliance.  Should you need the services of the latter and need recommendations for the former, we invite you to contact Dan Holland or Roy Rakiewicz.