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The Environmental Protection Agency (EPA) has finalized two amendments to Obama-era rules governing new sources of methane emissions, and it is proposing to withdraw some guidelines for reducing volatile organic compounds (VOC) to save the oil and gas industry millions.
Eliminating the VOC rules alone would save operators a total of at least $14 million over a 14-year period, according to officials.
On Thursday, EPA unveiled two amendments to fugitive emissions requirements contained in its New Source Performance Standards (NSPS), which were promulgated in 2016. Specifically, the agency plans to amend requirements that oil and gas operators repair leaking components during unplanned or emergency shutdowns, as well as monitoring requirements for well sites located on Alaska's North Slope.
The amendments were signed by EPA Administrator Scott Pruitt on Feb. 23, and have since been submitted for publication in the Federal Register.
Separately, EPA proposed to completely withdraw the 2016 Control Techniques Guidelines (CTG) for the oil and gas industry. The CTG provides recommendations for some states and areas that are required to address VOC emissions from covered sources, which form part of state implementation plans to meet national standards for ground-level ozone.
Under the current NSPS, operators have 30 days to repair leaking components found during monitoring surveys, with some exceptions. Those include that the repairs are technically infeasible, would require the shutdown of a compressor station or well, or it would be unsafe to conduct repairs during operations. In those cases, operators are required to fix leaks during a next event, including unscheduled or emergency shutdowns, or within two years, whichever is earlier.
The first of the two amendments would remove the requirement that operators fix leaks during unscheduled or emergency shutdowns. However, they would still be required to make repairs during the next scheduled shutdown of a compressor station or well; a well shut-in; after a planned vent blowdown; or within two years, whichever is earlier.
The EPA said it had received comments that under the current requirements, repairs conducted during unscheduled or emergency shutdowns "could lead to unintended negative consequences both at well sites and compressor stations, including emissions that are higher than emissions that would occur if the leaks were repaired during a scheduled shutdown.
"This could occur from venting or flaring that would be necessary while certain equipment was depressurized or 'blown down' in order for the repair to occur -- actions that can lead to higher emissions than would occur from continuing to delay a repair. Similarly, commenters noted that the requirement to repair leaks during unscheduled or emergency shutdowns could lead to gas service disruption."
The EPA added that after considering the comments it received, along with supporting data, it had decided on an amendment rather than a stay or extending the requirement's phase-in period, "which would have provided only temporary relief."
Monitoring North Slope Wells
The current NSPS also requires semiannual monitoring of wells in Alaska's North Slope, in an area that extends from the Brooks Range to the Arctic Ocean, to accommodate the area's Arctic climate.
Under the second amendment released Thursday, new or modified wells that begin production between September and March would conduct initial leaks monitoring surveys within six months after the startup of production or by June 30, whichever is later. New or modified wells that begin production between April and August must continue to meet the requirements of the 2016 rule, which requires initial monitoring surveys within 60 days of the startup of production.
Also, once the initial surveys are completed, operators would be required to conduct annual, rather than semiannual, monitoring surveys at well sites on the North Slope. The annual surveys would have to be conducted at least nine months apart, but no more than 12 months apart.
EPA said the amended the North Slope requirement is based on public comments that said "monitoring technologies specified in the 2016 rule cannot reliably detect methane emissions for much of the year because of extremely cold temperatures. Temperatures in the North Slope region often are below zero."
On withdrawing the CTG, EPA said the move is warranted because it would be more efficient for the states. Otherwise, states could be required to revise implementation plans twice: first to address recommendations tied to the 2012 NSPS, and potentially a second time after reconsideration of the 2016 NSPS is complete.
"In addition, facilities throughout the oil and natural gas sector may contain some sources subject to the 2012 NSPS and other sources subject to the 2016 NSPS," EPA said. "Withdrawing the oil and gas CTG in its entirety will allow EPA to take a more holistic approach as it considers options for addressing VOC emissions from covered oil and gas sources."
The EPA said even if the CTG were withdrawn, some states still may be required to obtain VOC emission reductions from existing oil and gas sources as part of their state implementation plans to meet EPA's national ozone standards.
According to the EPA, under Sections 182 and 184 of the Clean Air Act (CAA), some states are required to deploy Reasonably Available Control Technology (RACT) to limit VOC emissions from existing sources that are covered by a CTG.
"CTGs are not regulations and do not impose legal requirements directly on pollution sources," the EPA explained. "Rather, they provide recommendations for state and local air agencies to consider as they determine what emissions limits to apply to covered sources in their jurisdictions in order to meet RACT requirements."
RACT is required in ozone nonattainment areas currently classified as "moderate" and above, of which there are currently 21 in the United States. RACT is also required throughout the Ozone Transport Region (OTR), which includes 11 states and metropolitan areas in the Northeast.
The OTR comprises Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. It also includes Washington, DC, and portions of northern Virginia.
EPA said withdrawing the CTG would not prevent states from taking separate actions to reduce oil and gas emissions if they chose to do so. But a withdrawal would eliminate the requirement that the 21 nonattainment areas and the OTR region use RACT for oil and gas sources that are not major sources.
"The CAA requires RACT for major sources of VOC emissions in nonattainment areas classified as moderate and above and throughout the OTR, independent of CTGs," the EPA said.
The agency estimates that the oil and gas industry could save $45-49 million per year, or $439-599 million between 2021 and 2035, in avoided compliance costs if all states fully addressed RACT and CTG is withdrawn.
However, under a scenario where CTG is withdrawn and some states obtain VOC emission reductions from existing oil and gas sources as part of their state implementation plans to meet the national ozone standard, the EPA estimates savings would total $1.2-1.6 million per year, or $14-16 million from 2021 through 2035.
Public comments on withdrawing the CTG are to be accepted for 45 days after the notice is published in the Federal Register.