On August 18, 2015, EPA released additional components of President Obama’s Climate Action Plan. The four separate actions are intended to reduce greenhouse gases and other emissions from the oil and natural gas sector. The newly-released components include:
1) Additional New Source Performance Standards;
2) New Control Techniques Guidelines;
3) Proposed revisions to the regulatory definition of covered oil and gas equipment; and
4) A proposed Federal Implementation Plan for Indian Country New Source Review.
Each is discussed in turn.
New Source Performance Standards
First, EPA has proposed additional New Source Performance Standards that will:
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Reduce 95% of the methane and VOC from compressor stations, specifically requiring modifications to wet seal centrifugal compressors and replacement of rod packing at reciprocating compressors based on a set number of hours of operation or route emissions into a closed vent system.
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Establish a standard bleed rate limit across all natural gas-driven pneumatic controllers.
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Establish a lower standard (zero) bleed rate limit at natural gas processing plants.
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Reduce emissions from all pneumatic pumps at different rates and with different technologies.
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Require “green completions” at hydraulically fractured well sites, using capture and combustion devices to reduce emissions.
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EPA reconsidered various issues from the 2012 proposals, and is proposing actions concerning such issues as storage vessel monitoring, Leak Detection and Repair requirements, monitoring methods, and fugitive emission issues.
Although EPA has proposed the above New Source Performance Standards, EPA is also soliciting comment on “alternative approaches” that would meet the above guidelines. EPA appears willing to consider alternative approaches because it has encouraged companies to reduce emissions in numerous ways voluntarily over the last several years, including as recently as June 2015 with its modified Energy Star program, and EPA indicates it does not want to impede equivalent reduction strategies.
VOC emission Guidelines from certain oil and gas facilities
Second, EPA is proposing Control Techniques Guidelines (CTGs) for reducing VOC emissions from certain oil and gas facilities in the northeast Ozone Transport Region. These guidelines, proposed under Clean Air Act (CAA) Section 172(c)(1), will be used by states to set “reasonably available control technology” for existing sources of emissions. CTGs are recommendations for technologies and practices to reduce emissions from existing sources in certain ozone non-attainment areas. States may be required to modify their State Implementation Plans for certain sources within two years after the final CTGs are issued.
Amendments to what facilities are “adjacent” for permitting purposes
Third, EPA is proposing to define the term “adjacent” for purposes of evaluating when oil and gas equipment and activities are considered part of the same source. EPA proposes two alternatives: One defines “adjacent” by reference to proximity; the other in terms of function. EPA requests comment on both definitions. Either approach represents a potential change to current definitions as many oil and gas development wells are located in close proximity but in such a manner as that avoids meeting EPA’s traditional test as a “common source.” “Common sources” can be classified as “major sources” with more stringent emission limits.
Proposed Federal Implementation Plan for Indian Country
Last, EPA is proposing a Federal Implementation Plan (FIP) for Indian Country Minor New Source Review. EPA required tribes administering the CAA to establish minor New Source Review programs in 2011. This FIP will be imposed in areas where acceptable programs have not been implemented. Because many oil and gas well sites are “minor” new sources, the FIP will provide guidance on air permitting for drilling in tribal territories.
More information, including the proposed rules and fact sheets, can be found at EPA’s website: http://www.epa.gov/airquality/oilandgas/actions.html.
© 2015 Schiff Hardin LLP
