EPA Expands Oil and Gas Production Sector’s Methane Emission Reduction Requirements | Pillsbury Winthrop Shaw Pittman LLP

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The EPA’s last effort to reduce methane emissions from the oil and gas sector was in 2016. However, the regulations only covered new sources, leaving about a million oil and gas wells uncovered. Biden administration regulations would, for the first time, order states to impose new standards for existing sources, meaning that every oil and gas production facility that meets certain threshold criteria set out in the regulations will have to comply.

In recent enforcement actions, the EPA and the Department of Justice have taken the position that the 2016 regulations require owners of oil and gas production facilities to prevent virtually all oil leaks. emissions. This is a difficult standard that has been questioned as unrealistic, especially since production facilities must safely control high pressure gases. However, the proposed regulations only double the goal of requiring facilities to be emission-free.

Strengthening regulations on new sources

The proposed rule would create a new set of regulations, Quad Ob (Subpart OOOOb), which would focus on both strengthening and expanding the current requirements for new sources as well as standards for emission sources. previously unregulated by Quad Oa. Some key new requirements include a first nationwide requirement to minimize emissions from discharging liquids and new requirements for leak detection and repair.

Order states to regulate existing sources

Perhaps the most significant change proposed by the EPA is its regulatory extension to cover existing sources of oil and gas. The new Quad Oc (Subpart OOOOc) would require states to implement methane emission limitation plans for existing sources under Section 111 (d) of the Clean Air Act. The rule would establish “emission guidelines” on methane reduction, providing “deemed standards” for states to incorporate into their individual plans. Most of these presumed standards for existing sources mirror the standards that the EPA proposes for new sources. States would not be required to adopt the presumptive standard, but would otherwise have to develop their own plan that would only be approved by the EPA if it was generally as strict as the presumed standard.

Establish a new monitoring program

The proposed rule also includes a comprehensive new monitoring plan that would require companies to search for fugitive emissions and repair leaks at new and existing well sites and compressor stations. Well sites with emissions of at least three tonnes per year will need to monitor for leaks and repair them quickly. The EPA expects this requirement to apply to approximately 300,000 well sites nationwide. Sites with emissions of less than three tonnes per year will have to carry out and submit an initial survey demonstrating that they are free from leaks and malfunctions. This is a change from the current monitoring program, which includes a low production well site exclusion that many oil and gas production facilities have invoked over the years.

Other proposed changes

The rule also proposes changes to how emissions from pneumatic controllers and storage tanks are regulated, as well as changes to how associated gas can be vented from oil wells.

  • Pneumatic controllers: The rule proposes a “zero emission” standard for new and existing pneumatic controllers. For the first time, even pneumatic controllers with intermittent ventilation will be regulated.
  • Storage tanks: The rules for storage tanks will be tightened. Tank batteries would be added to the definition of facilities that must reduce emissions of volatile organic chemicals (VOCs) and methane, requiring that new, modified or rebuilt tank batteries with potential VOC emissions of six tonnes or more per year reduce their emissions by 95%, which is the amount currently required for individual tanks. The presumptive standard proposed by the state would similarly require that existing storage tanks or batteries of tanks that could emit 20 tons of methane or more per year to control their emissions by 95%. Additionally, the rule would include tank hatches and openings in the list of types of equipment that should be monitored for leaks as part of the fugitive emissions program.
  • Ventilation: The rule proposes to eliminate the evacuation of associated gases from oil wells. Operators would be required to capture and send gas associated with a pipeline when possible, and if there is no pipeline available, operators would be required to either use the gas for electricity on the pipeline. site or for other useful purposes, either routing it to a torch and control device that would reduce methane and VOCs by 95 percent.
  • Unloading liquids: The rule proposes to require that liquid unloading operations be carried out with zero emissions of methane or VOCs, with an option to implement best practices to minimize emissions when zero emissions are not possible.

Looking forward

Affected companies are strongly encouraged to participate in the rulemaking process by submitting comments, including comments on the feasibility of the proposed requirements and whether there are additional sources that should be covered. The public comment period is expected to end on January 14, 2022.

These comments are likely to be critical in the EPA’s review, given that the rule proposed by the EPA did not include specific regulatory text as is generally the case and that the EPA would have to issue a additional proposal with the regulatory text proposed in 2022.


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