Gearing-up to Reduce Emissions from Existing Oil and Gas Facilities: Summer Preview of Operator Surveys Due This Fall

The U.S. Environmental Protection Agency recently finalized rules expanding emissions control requirements for new, reconstructed and modified oil and gas facilities, including well sites, gas processing plants, compressor stations and other downstream facilities.

• Published on June 3, 2016, the revised New Source Performance Standards at 40 CFR Part 60, Subparts OOOO and OOOOa, require operators to prevent or collect volatile organic compounds (VOCs) emissions, including methane, from hydraulically fractured well completions, pneumatic pumps and controllers, centrifugal and reciprocating compressors, storage tanks and facility components that may be leaking “fugitive emissions,” such as pipeline connectors, valves, flanges, pressure-relief devices, open-ended lines and thief hatches.

Next up: Similar control requirements for existing oil and gas facilities. Soon the EPA will begin collecting detailed information from oil and gas operators to use in developing methane emissions reduction guidelines. Individual states will then be required use the guidelines to implement emissions control regulations for existing oil and gas facilities.

• On June 3, EPA officially invited public comment on a draft two-part survey that will be sent to over 22,000 oil and gas operators. See, 81 Fed. Reg. 35763.
   
• Part I, referred to as the operator survey, will be sent to all known operators of oil and gas production wells.
  • The survey solicits basic facility-level information, such as location, contact information, and the numbers and types of wells, tanks and compressors.
     
  • Operators must be careful in how they define the “facility,” which is “all buildings, equipment, structures and other stationary equipment that are located on one or more contiguous or adjacent properties, and that are under common ownership or control.”
     
• EPA proposes that Part II, referred to as the detailed facility survey, be sent to 3,385 operators, representing a “statistically significant” number of companies operating facilities across different industry segments, including onshore production, gathering and boosting, processing, compression/transmissions, pipeline, natural gas storage, liquefied natural gas storage and import/export facilities.
   
  • The survey solicits detailed unit-specific information covering, for example, well site production and types of equipment, emission sources, feed material composition, monitoring devices and any emissions control devices or management practices used to reduce emissions.
     
  • EPA expects that most of the required information is readily available in company records. However, the scope of detailed questions is vast and will require a concentrated effort to retrieve the data. In addition, operators may need to conduct actual equipment component counts or develop flash gas analysis.
     
  • EPA is specifically requesting comment on which of two methods to use for developing “statistically significant” population categories within the onshore production segment of the industry. One option involves categorization based on well types, e.g., heavy oil, light oil, wet gas, etc. The other option defines population categories based on regional production basin groupings, e.g., East, South, West Texas, etc., as defined by the EPA.
     
  • EPA is also seeking comment on its designation of the data elements for which an operator will be allowed to request confidential treatment as “confidential business information.”
     
  • Responses will be due within 120 days of receipt of the survey.
     
• Operators may comment on the draft survey through Aug. 2, 2016. EPA may then revise the survey and, pursuant to the Paperwork Reduction Act, submit the survey as an “Information Collection Request” to the Office of Management and Budget (OMB) for review and approval. EPA will announce when it submits the final package to OMB, and OMB will publish a second draft of the survey for a 30-day public comment period.
   
  • OMB’s role is to help ensure that EPA’s survey effort is as efficient as possible and avoids imposing unjustified burdens and costs on industry.
     
• Operators can expect to receive the surveys by Oct. 30, 2016.
   
  • The surveys will arrive with a formal Information Request letter from EPA, issued pursuant to Section 114 of the federal Clean Air Act. Responses are mandatory and must be certified by the operator to be accurate and complete.  Failure to respond could result in a fine of up to $37,500 per day of violation.
     
• EPA will use the survey information to develop guidelines, pursuant to Section 111(d) of the Clean Air Act, which individual states must use to implement and enforce regulations for controlling emissions from existing facilities in the various oil and gas industry sectors.
   
• In a related move on July 18, 2016, EPA published a voluntary request for information on emerging technologies that can be used to monitor emission points on oil and gas production and transmission systems, as well as methods to mitigate methane leaks. Operators may submit comments through Nov. 15, 2016. See, 81 Fed. Reg. 46670.