Articles, Newsletters and Advisories
In 2016, the U.S. Environmental Protection Agency finalized a rule that established first-time federal standards for methane emissions from new, modified, and reconstructed sources in the oil and gas industry. The so-called new source performance standards (NSPS) at 40 C.F.R. 60, Subpart OOOOa (Subpart OOOOa), have since become the subject of considerable debate and litigation. Consistent with the Trump administration’s other deregulatory efforts, EPA published a proposal in the Federal Register in October that aims to reduce the Subpart OOOOa regulatory burden for industry.
EPA estimates that the proposed improvements to the rule could save industry tens of millions of dollars in compliance costs each year. EPA held a public hearing in November and is accepting stakeholder comments through December 17.
Significant changes to applicable requirements
The 52-page rulemaking notice describes several proposed amendments to Subpart OOOOa. EPA is addressing certain issues that were presented to the agency in formal petitions for reconsideration, as well as “other implementation issues and technical corrections” brought to the agency’s attention after Subpart OOOOa was promulgated. For example, it is proposing significant changes to the requirements for fugitive emissions components, including revised leak monitoring frequencies. Whereas the current regulation subjects well sites to semiannual leak monitoring, the revised Subpart OOOOa would require monitoring every other year for low production well sites and annually for all other well sites. The required frequency of compressor station monitoring would be reduced from quarterly to either semiannual or annual. (The proposal includes distinct monitoring requirements for well sites and compressor stations on the Alaska North Slope.) EPA also is proposing to reduce the schedule for repairing leaks from 30 to 60 days. Finally, EPA proposes to no longer require monitoring surveys at well sites once all major production and processing equipment is removed.
These are just a few of the many technical issues for which the agency is seeking public input. Operators should review the rulemaking notice and evaluate how the proposed changes could impact day-to-day operations.
Proposed rule attempts to address potentially overlapping federal and state requirements
While EPA may be inclined to relax regulatory obligations at the federal level, states could continue to impose more stringent requirements. For example, Pennsylvania’s Department of Environmental Protection finalized an air permitting package earlier this year that requires quarterly leak detection and repair (LDAR) monitoring for well sites subject to the new general permit known as GP-5A. As proposed, the revised Subpart OOOOa would require only annual or in some cases biennial monitoring at well sites. In general, where federal and state standards are in conflict, operators will need to comply with the most stringent requirement that applies.
EPA’s rulemaking proposal includes provisions that attempt to address potential overlap in federal and state requirements. The proposed rule would allow operators to meet certain existing state requirements as an alternative means of complying with Subpart OOOOa. Pennsylvania is one of six states where the proposed rule would allow operators to elect to comply with the state requirements in lieu of certain federal requirements.
Public comment period and hearing
EPA will accept public comments on the proposed revisions to Subpart OOOOa until December 17. The rulemaking notice indicates that the agency is seeking comment only on the specific issues identified in the notice. The agency is “not opening for reconsideration any other provisions of the NSPS at this time.” EPA’s related fact sheet indicates that it is still evaluating broad policy issues—such as the regulation of greenhouse gases—associated with Subpart OOOOa. According to the agency, such issues will be addressed separately at a later date.
On November 14, EPA held a public hearing at its Region 8 office in Denver, Colorado. The online docket for EPA’s proposed rule states that more than 48,000 comments have been received, although many of these comments appear to be form letters opposing the proposed rule. In addition, a group of shareholders for large publicly traded oil and gas companies reportedly sent a letter to these companies on December 5, urging the companies to oppose EPA’s proposed rule and supporting the regulation of methane emissions by EPA. As the public comment period ends, other parties will share their views on this important rulemaking.
Editor’s note: PIOGA’s Environmental Committee is actively engaged in the Subpart OOOOa issue and the association is part of an oil and gas industry coalition working to ensure commonsense methane regulations.
Babst Calland actively monitors federal and state air program developments affecting the oil and gas industry. If you have any questions about the proposed changes to Subpart OOOOa or air quality issues in general, contact Michael H. Winek at 412- 394-6538 or firstname.lastname@example.org; Meredith Odato Graham; 412-773-8712 or email@example.com; or Gary E. Steinbauer, 412- 394-6590 or firstname.lastname@example.org.
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