oil and gas industry air reg update -...
TRANSCRIPT
OCTOBER 2016
O&G REGULATORY UPDATE
OIL AND GAS INDUSTRYAIR REG UPDATE
Kelli Calhoon
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• NSPS Subpart OOOO/OOOOa—VOC and methane
• Source determination
• Methane ICR for existing sources
SUMMARY
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
NSPS SUBPART OOOO/OOOOaVOC AND METHANE
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Final Rule published in Federal Register June 3, 2016
• Why methane?
• O&G operations are second largest emitter of GHGs in US
• Climate action plan—strategy to reduce methane emissions, goal to reduce
emissions from O&G sector
• NSPS – Applies to new, reconstructed, and modified processes and
equipment
BASICS
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Subpart OOOO
• Amendments to existing regulations to improve implementation
• Subpart OOOOa:
• Establish CH4 standards for emission sources currently regulated for VOC
• Extend current VOC standards and establish CH4 standards for remaining
unregulated equipment
• Establish CH4 and VOC standards for emission sources not currently covered by
NSPS Subpart OOOO
• Best system of emissions reduction (BSER)
• BSER for CH4 = BSER for VOC
BASICS
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
APPLICABILITY/COMPLIANCE DATES
• Applicability – facilities constructed, modified or reconstructed
• Between August 23, 2011 and September 18, 2015 Subpart OOOO
• After September 18, 2015 Subpart OOOOa
• Subpart OOOOa compliance date:
• August 2, 2016 or start-up, whichever is later
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
Sources covered by the 2012 New Source Performance Standards (NSPS) for VOCs and the 2016 NSPS for Methane and VOCs, by site
Location and Equipment/Process Covered
Required to ReduceEmissions Under USEPA Rules
Rules that Apply
2012 NSPS for VOCs*
2016 NSPS for methane
2016 NSPS for VOCs
Natural Gas Well Sites
Completions of hydraulicallyfractured wells
✔ • •
Compressors
Equipment leaks ✔ • •
Pneumatic controllers ✔ • •
Pneumatic pumps ✔ • •
Storage tanks ✔ •
Oil Well Sites
Completions of hydraulicallyfractured wells
✔ • •
Compressors
Equipment leaks ✔ • •
Pneumatic controllers ✔ • •
Pneumatic pumps ✔ • •
Storage tanks ✔ •Note: Types of sources already subject to the 2012 NSPS requirements for VOC reductions that also are covered by the 2016 methane requirements will not have to install additional controls, because the controls to reduce VOCs reduce both pollutants.
https://www3.epa.gov/airquality/oilandgas/may2016/nsps-table.pdf
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
Location and Equipment/Process Covered
Required to ReduceEmissions Under USEPA Rules
Rules that Apply
2012 NSPS for VOCs*
2016 NSPS for methane
2016 NSPS for VOCs
Production Gathering and Boosting Solutions
Compressors ✔ • •
Equipment leaks ✔ • •
Pneumatic controllers ✔ • •
Pneumatic pumps
Storage tanks ✔ •
Natural Gas Processing Plants*
Compressors ✔ • •
Equipment leaks ✔ • •
Pneumatic controllers ✔ • •
Pneumatic pumps ✔ • •
Storage tanks ✔ •
Natural Gas Compressor Stations (Transmission and Storage)
Compressors ✔ • •
Equipment leaks ✔ • •
Pneumatic controllers ✔ • •
Pneumatic pumps
Storage tanks ✔ •Note: Types of sources already subject to the 2012 NSPS requirements for VOC reductions that also are covered by the 2016 methane requirements will not have to install additional controls, because the controls to reduce VOCs reduce both pollutants.
https://www3.epa.gov/airquality/oilandgas/may2016/nsps-table.pdf
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Wet seal centrifugal compressors: 95 percent reduction of CH4 and VOC
• Accomplished by flaring or routing back to a process
• Dry seal systems not covered
• Reciprocating compressors:
• Replace rod packing every 26,000 hours of operation (monitor/document operating hours)
or
• Replace rod packing every 36 months
or
• Route emissions from rod packing to process through closed vent system
under negative pressure to be reused or recycled
SUBPART OOOOaCOMPRESSORS
Compressor Location
Rules that Apply
2012 NSPS for VOCs
2016 NSPS for methane
2016 NSPS for VOCs
NG Well Sites
Oil Well Sites
Gathering & Boosting Stns • •
NG Processing • •
NG Compressor Stations (T&S) • •
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• All except natural gas processing: natural gas bleed rate limit of six scfh (same as 2012 NSPS, new for compressor stations)
• Low-bleed controllers (gas bleed rate<six scfh) at compressor stations are not subject
• Natural gas processing plants: zero natural gas bleed rate (current NSPS)
SUBPART OOOOaPNEUMATIC CONTROLLERS
Pneumatic Controller Location
Rules that Apply
2012 NSPS for VOCs
2016 NSPS for methane
2016 NSPS for VOCs
NG Well Sites • •
Oil Well Sites • •
Gathering & Boosting Stns • •
NG Processing • •
NG Compressor Stations (T&S) • •
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Have 180 days from publication in FR to meet requirement
• Natural gas processing plants: zero emissions of CH4/VOC
• For natural gas-driven diaphragm pumps
• Because electricity is widely available at NG processing plants
• Does not include non-natural gas driven pumps (solar, electric, air-driven)
• USEPA is not finalizing requirements for natural gas-driven piston pumps because they are low-emitting
• Final rule removed pumps at gathering and boosting stations and compressor stations—USEPA did not have enough information about prevalence of use at these sites
• Well sites (oil and NG): 95 percent control of CH4/VOC if control device already onsite
• Final rule exempts: limited use (operate<90 days/yr), lean glycol circulation pumps, all non-natural gas driven pumps (solar, electric, air-driven)
SUBPART OOOOaPNEUMATIC PUMPS Pneumatic
Pump Location
Rules that Apply
2012 NSPS for VOCs
2016 NSPS for methane
2016 NSPS for VOCs
NG Well Sites • •
Oil Well Sites • •
Gathering & Boosting Stns
NG Processing • •
NG Compressor Stations (T&S)
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Now includes oil well sites
• Subcategory 1 wells (non-wildcat, non-
delineation)
SUBPART OOOOaHYDRAULICALLY FRACTURED WELL COMPLETIONS
• Reduced emissions completions (RECs), must have separator onsite during flowback period (some
exceptions)
• Not required for wells with gas-to-oil ratio<300 scf/bbl (maintain records)
• Not required if not technically feasible—use combustion controls
• Phase in: can use combustion controls until November 30, 2016
• After November 30, 2016 utilize RECs, as applicable
• Subcategory 2 wells (exploratory, delineation, low-pressure)
• Use combustion device or completion vessel and separator (unless technically infeasible for
separator to function)
• Modification defined as new well site or fracking/refracking at existing site
• Refracture-recompletion not considered “modification” if use green completions and meet notification and reporting requirements for new wells
Well Location
Rules that Apply
2012 NSPS for VOCs
2016 NSPS for methane
2016 NSPS for VOCs
NG Well Sites • •
Oil Well Sites • •
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• NG Processing – same as 2012 NSPS
• Final rule removed incentive for reductions in leak survey frequency
• Monitoring Plan required
• Outlines measures for locating sources and detection technology to be used, number and ID of components, site map, observation path, equipment verification procedures
SUBPART OOOOaFUGITIVE EMISSIONS Fugitive
Emissions Equip Location
Rules that Apply
2012 NSPS for VOCs
2016 NSPS for methane
2016 NSPS for VOCs
NG Well Sites • •
Oil Well Sites • •
Gathering & Boosting Stns • •
NG Processing • •
NG Compressor Stations (T&S) • •
• Final rule allows use of optical gas imaging (OGI), Method 21, or other emerging technology with approval
• Fugitive emissions
• OGI – Any visible emission
• Method 21 – 500 ppm
• Does not include equipment that vents natural gas as part of normal operation
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
SUBPART OOOOa
Fugitive Emissions Monitoring Schedule
Type of Facility Initial Leak Monitoring Survey
Repeat Leak Survey Frequency
Repair Leaks Within
NotableExemptions
Well sites (oil and natural gas)
Within 60 days of start-up of production or by June 3, 2017; whichever is later
Semi-annual, at least four months apart
30 days, unless shutdown required then at next shutdown within two years
Sites with only wellheads
Compressor Stations -Gathering & Boosting, Transmission
Within 60 days of start-up or by June 3, 2017; whichever is later
Quarterly, at least 60 days apart
30 days, unless shutdown required then at next shutdown within two years
Can waive quarterly inspection if 2/3 of quarter has 0oF or below average temperature
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Consistent with current NSPS
• Initial notifications for NG processing (not for wells, pneumatic controllers, pneumatic pumps and compressors)
• Notification for well affected facilities at least two days prior to commencement of well completion operation
• Include contact info, US well number, lat/long, planned date for beginning of flowback
• Annual reports
• Due no later than 90 days after end of initial compliance period (initial compliance period begins Aug 2, 2016 or upon initial startup, whichever is later)
• Include information on affected facilities constructed, modified or reconstructed during prior year
• Information on fugitive emissions surveys
SUBPART OOOOaRECORDKEEPING AND REPORTING
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Storage vessels
• Revise enclosed combustor TOC limit
at outlet of control device from 20
ppmv to 275 ppmv
• Monitor visible emissions consistent
for all enclosed combustion units—
monthly 15 minute Method 22
• Initial compliance requirement for
bypass devices—audible alarm or
remote alarm to nearest field
office
• Recordkeeping of repair logs for
control devices failing visible
emissions test
• Initial report due date January 15,
2014 erroneous, should be January
13
• Flare design and operation comply
with 40 CFR 60.18
• Clarify that monitoring provisions
of Subpart VVa do not apply to
open-ended valves and lines
(no change required)
• Clarify initial compliance
certification for LDAR requirements
at NG processing plants is within
180 days of initial start-up (no
change required)
SUBPART OOOO AMENDMENTS
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Reconstruction notification
required only for some affected
facilities, updated Table 3
• Re-proposing provisions for
management of waste from spent
carbon canisters—no comment so
finalized as proposed
• Clarify definition of “capital
expenditure” for equipment leak
provisions to mirror definition in
Subpart VV, reflect basis year of
2011 and B value of 4.5
• Amend to ensure tanks associated
with water recycling operations
not subject to rules (see
§63.5365(e)(5))
• Continuous control device
monitoring requirements for
storage vessels and centrifugal
compressor affected facilities were
NOT included in final rules (only
proposed)
• Effective 60 days after publication
in FR
SUBPART OOOO AMENDMENTS
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Did not include liquids unloading in final rules—information received was
not sufficient to finalize standard representing BSER for liquids unloading
• Continuing to search for better means to address emissions
• Including in information gathering efforts
OTHER NOTES
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Permitting – Applicability & compliant equipment/controls
• Compliance – OOOO/OOOOa
• Well completion notifications
• Fugitive emissions monitoring plan
• Site specific -OR-
• Basic plan plus site specific attachments
• Schedule monitoring surveys
• Staff/contractors
• Understand modifications, as defined in the rules
• Reporting – annual schedule
PLAN AHEAD
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
SOURCE DETERMININATION
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Published June 3, 2016
• Applies only to the oil and natural gas sector (SIC Group 13)
• USEPA clarifies the term “adjacent” in the definition for “building,
structure, facility or installation” used to determine
• Stationary source in PSD/NNSR program (construction permitting)
• Major source in Title V program (operating permitting)
SOURCE DETERMINATION
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• PSD/NNSR
• Stationary source: any building, structure, facility or installation that emits or
may emit a regulated NSR pollutant.
• Building, structure, facility or installation: all of the pollutant-emitting
activities which belong to the same industrial grouping are located on one or more
contiguous or adjacent properties, and are under the control of the same person
(or persons under common control).
• Title V
• Major source: any stationary source or group of stationary sources that are
located on one or more contiguous or adjacent properties, and are under common
control of the same person (or persons under common control) belonging to a
single major industrial grouping.
PRIOR DEFINITIONS
Note: Industrial grouping refers to two-digit SIC code
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• USEPA uses a three part test:
1. Same industrial grouping
2. Location on contiguous or adjacent property
3. Under common control
• Adjacent not defined in regulations
• Interpretation of “contiguous or adjacent”: land associated
with the source is connected or nearby another source
• USEPA has considered both distance and whether they share operational
dependence or functional interrelatedness
USEPA INTERPRETATION
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Summit Petroleum Corp. appealed single source determination in 2012
• Oil and gas sweetening plant and approximately 100 oil and gas wells
located within eight mile radius, same two-digit SIC code, under common control
• Sixth Circuit overturned USEPA’s single source determination
• Use of interrelatedness is unreasonable and contrary to the plain meaning of
“adjacent”, related only to physical proximity
• USEPA directed regions to apply outcome within Sixth Circuit,
rest of country continue to follow prior interpretations
• Challenged in DC Circuit for violating USEPA’s Regional Consistency regulations
• DC Circuit agreed, memo conflicted with USEPA regulations that
promote uniform national regulatory policies
• Decision noted that USEPA could avoid conflict by revising source determination
regulations to explicitly require consideration of functional interrelatedness
USEPA INTERPRETATION: WHAT LEAD TO CHANGE?
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
For onshore activities under SIC Major Group 13: Oil and Gas Extraction,
all of the pollutant-emitting activities included in Major Group 13 that are located on
one or more contiguous or adjacent properties, and are under the control of the same
person (or persons under common control). Pollutant emitting activities shall be
considered adjacent if they are located on the same surface site; or if they are
located on surface sites that are located within 1⁄4 mile of one another
(measured from the center of the equipment on the surface site) and they
share equipment. Shared equipment includes, but is not limited to, produced
fluids storage tanks, phase separators, natural gas dehydrators or emissions
control devices. Surface site, as used in this paragraph (a)(1)(ii)(B), has the
same meaning as in 40 CFR 63.761.
Applicable starting August 2, 2016 – not retroactive, previous determinations stand
USEPA FINAL RULE
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
USEPA SIMPLIFIED EXAMPLES
Legend
Gas well
Oil well
Tank battery
Shared equipment
Adjacent
New site(center)
¼ mile
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
USEPA SIMPLIFIED EXAMPLES
Not AdjacentEquipment not shared with new site
Not AdjacentNot within ¼ mile
New site(center)
¼ mile
New site(center)
¼ mile
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Additional EPA examples:
• Equipment used to process or store oil/gas is located within a ¼ mile of a commonly-owned well site is part of the same stationary source as the well site
• Two well sites that feed a common pipeline are not part of the same stationary source if they do not share processing or storage equipment
• Does not cover transmission/distribution under SIC 49
• States may, but are not required, to update regulations
• Ownership changes – reduced burden due to “shared equipment”
clause
CONSIDERATIONS
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
ICR FOR EXISTING SOURCES
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
• Information collection request (ICR) for existing oil and gas sources
released Sept. 29, 2016 (draft #2)
• Provide information that will assist in development of regulations to
reduce methane emissions for existing sources
• Gather information on existing sources:
• Methane emissions—agency seeking to identify sources with high emissions and
factors that contribute to those emissions
• Technologies to reduce emissions
• Costs of technologies
• Includes oil and gas production, gathering, processing, transmission and storage
• Comments must be submitted on or before October 31, 2016
• EPA anticipated release date of October 30, 2016
https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/oil-and-gas-industry-information-requests
METHANE ICR FOR EXISTING SOURCES
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
Part 1 - Operator survey (30 days to respond)
• 15,000 operators
• Collects number and types of equipment at all onshore oil and gas production facilities in the US
https://www.epa.gov/sites/production/files/2016-09/part-1-operator-survey-v61-locked_0.xlsx
METHANE ICR FOR EXISTING SOURCES
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
METHANE ICR - PART 1
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
Part 2 - Facility survey (120 days to respond)
• Fewer respondents, representative sample
• Collect detailed information on emissions sources and control devices or practices
• Some information readily available, other may need to be collected (counts of pneumatic devices)
https://www.epa.gov/sites/production/files/2016-09/part-2-survey-v81-locked_0.xlsx
METHANE ICR FOR EXISTING SOURCES
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
METHANE ICR – PART 2
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
METHANE ICR – PART 2 RESPONDENTS
https://www.epa.gov/sites/production/files/2016-09/documents/20160926-oilandgas-icrss.pdf
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
METHANE ICR – PART 2 RESPONDENTS
https://www.epa.gov/sites/production/files/2016-09/documents/20160926-oilandgas-icrss.pdf
JUNE 2016
O&G REGULATORY UPDATE
OCTOBER 2016
THANK YOU
Kelli Calhoon
+1 913 553 5930