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EPA Proposes Methane Standards for Oil and Gas Sources

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On August 18, 2015, EPA proposed a sweeping expansion of the existing Clean Air Act new source performance standards (“NSPS”) designed to reduce methane and VOC emissions from upstream and midstream operations. The proposed amendments include standards for methane and VOCs for certain new, modified and reconstructed equipment, processes and activities across the oil and gas source category.

EPA has determined that the existing NSPS for VOCs (NSPS OOOO, first adopted in 2012) reflects the best system of emission reduction (“BSER”) for methane. Therefore the current VOC standards reflect the BSER for methane reduction for the same emission sources. EPA is proposing to extend the existing 2012 VOC standards to additional equipment and processes not currently regulated, including:

  • Centrifugal compressors, reciprocating compressors and pneumatic controllers at natural gas compressor stations
  • Completions and recompletions of hydraulically fractured oil wells; and
  • Equipment leaks at natural gas processing plants.

In addition, there are some aspects of the proposed rule that would apply new standards to reduce VOC and methane emissions from certain equipment/processes:

  • Pneumatic pumps at all oil and gas sources: zero emissions at natural gas processing plants; 95% control at all other sites if a control device is already available on site.
  • Fugitive emissions: monitoring of emissions and replacement/repair of emissions components at new or modified oil or gas well sites and compressor stations, including gathering and boosting stations.

EPA is also proposing some “improvements” to the existing NSPS for oil and gas sources after considering certain issues raised in petitions of reconsideration: storage vessel control device monitoring and testing provisions, initial compliance requirements in §60.5411(c)(3)(i)(A) for a bypass device that could divert an emission stream away from a control device, recordkeeping requirements of § 60.5420(c) for repair logs for control devices failing a visible emissions test, clarification of the due date for the initial annual report under the 2012 NSPS, flare design and operation standards, leak detection and repair (LDAR) for open-ended valves or lines, compliance period for LDAR for newly affected units, exemption to notification requirement for reconstruction, disposal of carbon from control devices, the definition of capital expenditure and initial compliance clarification.

Finally, EPA is also taking comment on the following approaches to enhance its enforcement capabilities through “next generation compliance” and rule effectiveness initiatives such as:

  • The establishment of third-party compliance verification programs addressing: (1) Closed Vent Emission Capture System Design (an issue of significant concern to EPA as evidenced in the recent Noble consent decree); and (2) Infrared Camera Fugitive Emission Monitoring Programs
  • Fugitive emissions independent audit program
  • Third-party information reporting of a regulated entity’s compliance performance directly to the regulator; and
  • Increasing electronic reporting and public availability of reported information.

The cost and timing impacts of these proposed changes have not yet been fully evaluated, but are likely to be significant. Comments on the proposed rule will be due 60 days after the date of publication in the Federal Register. EPA will also hold public hearings on the proposal.

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