This article is the second in a two-part series analyzing recent proposals by federal agencies to reduce methane emissions from oil and gas production. The first article deals with the rule proposed by the Bureau of Land Management (BLM).
On December 6, 2022, the EPA published an additional Proposed Rule (Proposed Rule) to reduce emissions of methane and volatile organic compounds (VOCs) from petroleum and natural gas facilities, including the first presumptive standards for existing oil and gas facilities. 87 Fed. Reg. 74 702. The proposed rule, which follows an initial proposal and November 15, 2021 request for comment, will have significant (and costly) implications for oil and gas operations if finalized as proposed. Comments are due on February 13, 2023.
These regulations are proposed under Section 111 of the Clean Air Act (CAA) and build on existing New Source Performance Standards (NSPS) for methane and VOC emissions from petroleum and gas sources. natural gas that are built, modified or rebuilt after November 15. 2021 (NSPS OOOOb) while setting presumptively aggressive standards for methane emissions from existing sources (EG OOOOc). The EPA’s proposed approach includes the following key elements that would apply to both new and existing sources, which are discussed in more detail below:
- Fugitive emissions: Links fugitive emission monitoring requirements to the types and quantity of equipment at a site rather than estimated emissions and increases monitoring frequency for all sources.
- Alternative monitoring: Allows facilities (and regulators) more choice of methane detection technologies for monitoring fugitive emissions instead of OGI surveys or EPA Method 21.
- Well closure: Imposes continuous fugitive monitoring requirements until the wells are plugged in accordance with the well closure plan submitted to the competent authority.
- Buckling: Limits flaring to times when there is no other possible route to a sell line or other beneficial use.
- Super Emitter Response Program: Creates a new program requiring owners and operators to undertake root cause analysis and take prompt corrective action when an approved third party detects significant methane emissions events.
- Pneumatic controllers, pneumatic pumps and centrifugal compressors: Requires the use of zero-emission pneumatic controllers and pumps in new and existing installations. Pneumatic pumps at an affected facility could not run on natural gas.
The proposed rule follows previous EPA NSPS regulations for the petroleum and natural gas sector at 40 CFR Part 60, Subparts OOOO (“Quad O”) and OOOOa (“Quad Oa”), which impose various requirements according to the date of construction, modification and reconstruction.
The proposed rule also includes the first national emissions guidelines for states to limit methane from existing oil and gas facilities under the authority of the EPA to establish performance standards for existing sources in CAA § 111(d). The proposed rule would create a new Subpart OOOOc (“Quad Oc”) requiring states to regulate methane from existing oil and gas facilities. States would be required to submit their plans to the EPA within 18 months of the publication of the final guidelines in the Federal Register. The State would then be required to impose a deadline for compliance with the existing source no later than 36 months after the expiry of the plan. The EPA states in the proposed rule that compliance with the state or federal plan implementing Quad Oc would constitute compliance for sources currently regulated by Quad O and Quad Oa, since the proposed presumptive standards would result in reductions in same or higher emissions.
Totaling 146 pages with an additional 600 pages of regulatory text (NSPS OOOOb and EG OOOOc) available in the rulebook, EPA’s proposed rule contains detailed provisions to reduce methane and VOC emissions from the petroleum sector and natural gas. Along with similar regulatory measures, the proposed rule is a crucial part of the Biden administration’s agenda to fight climate change and reduce emissions from the oil and natural gas sector.
Key requirements of the proposed rule include:
The EPA proposal rule would expand the 2021 proposal by requiring regular inspections of everything wellheads, regardless of their contribution. The proposed rule ties fugitive emissions monitoring requirements to the types and quantity of equipment at a site rather than estimated emissions. Under the proposed rule, single wellhead sites would be required to undergo quarterly audio, visual and olfactory (AVO) inspections. Wellhead-only sites with two or more wells would be required to undergo quarterly AVO inspections and bi-annual monitoring using Optical Gas Imaging (OGI) surveys or EPA Method 21.
For centralized generation facilities or sites with major equipment, the EPA would require AVO inspections every two months and quarterly monitoring using OGI or EPA Method 21. Compressor stations would require AVO inspections monthly and quarterly monitoring using OGI or EPA Method 21. Well sites and compressor stations on the Alaska North Slope would have different annual monitoring requirements to account for weather conditions.
The proposed rule also includes timelines for repairing leaks based on how fugitive emissions are identified. Owners and operators would be required to complete repairs to leaks identified by AVO inspections within 15 days of the first repair attempt. Leaks identified by OGI surveys would take slightly longer, with initial repair attempts required within 30 days and final repairs to be completed within 30 days of the first attempt.
The EPA’s proposed rule would allow facilities a greater choice of methane detection technologies for monitoring fugitive emissions instead of OGI surveys or the EPA’s Method 21. As an alternative, the EPA has proposed a screening “matrix” that would specify several different screening frequencies corresponding to a range of minimum detection levels. Additionally, the EPA’s proposed rule would allow facilities to use continuous monitoring systems as an alternative to periodic screening. The proposed rule would also establish a streamlined process for the EPA to approve alternative test methods. Once the EPA has approved a technology and technique, owners and operators would then be permitted to use it in the future.
The EPA’s proposed rule would also require monitoring for fugitive emissions to continue for the life of the well until it is properly shut down. Owners and operators would be required to submit a well closure plan, which would include a plugging plan for all wells, financial assurance documentation, and a completion schedule. The proposed rule would require owners and operators to complete a final OGI survey to ensure there are no ongoing emissions and make repairs, if necessary. Once the OGI survey confirms that no emissions are present, the EPA will consider the site closed and monitoring for fugitive emissions will cease.
The EPA’s proposed rule would also significantly limit flaring by restricting it only to times when there is no other possible route to a sales line or other beneficial use. Associated gas could not be piped to a flare unless an operator demonstrated that all options were impractical for technical or safety reasons and the demonstration was approved by a certified professional engineer. The EPA’s proposed rules would also require continuous monitoring to ensure the pilot light was burning at all times.
Super Emitter Response Program
Based on recent studies showing that the largest methane emission events (super-emitters) at sources (often caused by malfunctions or abnormal operating conditions) are responsible for the majority of total emissions, the EPA proposes the creation of a super-emitter response program to prevent, detect, and repair these super-emitter events (defined as quantified emissions of 100 kg/h or more of methane).
The new response program would allow EPA-approved third parties to identify these super-emitter events using specific remote sensing methods (i.e. remote sensing aircraft, (mobile or satellite surveillance forms) and then notify owners and operators when an event is detected. Once notified, owners and operators would be required to perform a root cause analysis within five days and take corrective action within 10 days if the event is caused by a malfunction or abnormal operation. Corrective actions taking longer than 10 days would require the submission of a corrective action plan to the EPA or state agency. By leveraging the citizen app and cutting-edge technology, this new initiative is part of a broader and more fundamental change in how the industry is regulated.
Pneumatic controllers, pneumatic pumps and centrifugal compressors
Finally, the EPA rule proposal establishes standards for pneumatic controllers, pneumatic pumps, and centrifugal compressors in new and existing installations. Since the proposed rule will also apply to existing facilities, owners and operators would be required, in some cases, to upgrade facilities.
Under the proposed rule, pneumatic pumps at an affected facility could not be powered by natural gas. Owners of sites without on-site electricity should route gas pump emissions to an on-site process, unless this is impossible. If this is not possible, the emission control requirements would depend on the number of pumps on site. For pneumatic controllers, the proposed rule updates the definition of a facility affected by a pneumatic controller from a single controller to an array of natural gas operated pneumatic controllers at a wellsite. Standalone natural gas pneumatic controllers, as well as controllers routed to a sales line or used on site, would still be permitted, but would not be permitted to directly emit methane and VOCs. Finally, the proposed rule establishes requirements for new and existing dry-seal centrifugal compressors by requiring owners or operators to maintain volumetric flow at or below 3 standard cubic feet per minute.