On July 1, EPA communicated yet another suite of proposed updates and changes to NSPS Subpart OOOO. The proposed rule, not yet published in the Federal Register, requests significant industry feedback. Once published in the Federal Register, all comments will be due within 30 days. Although the rule is still in development, now is a good time to start assessing its potential impacts to the oil and gas industry.
In general, the proposed changes include:
- Addition of defined “phases” during hydraulic fracturing activities
- Revised definition of storage vessels that are removed from service
- Allowing reciprocating compressors to route emissions back into the process in lieu of changing rod packing at certain intervals
- Modification of the definition of “Responsible Official” to remove the advance approval requirement (however, advance notification remains)
- Removal of the affirmative defense provision
There are several items for which EPA is seeking industry feedback which could be particularly significant. First, EPA is seeking industry feedback on the hydraulic fracturing process, and how to divide the process into potential stages. As proposed, EPA has divided the hydraulic fracturing process into three distinct stages:
- Initial flowback stage
- Separation flowback stage
- Production stage
EPA is requesting feedback on this general approach and on when each stage should begin and end.
EPA is also seeking more detailed information regarding electronic spark ignition for combustion devices used to control VOC emissions from well completions, storage vessels, and centrifugal compressors using wet seals. While EPA is continuing to specifically disallow the use of pilot-less combustors, it is seeking specific details and information on their use. If EPA’s concerns are addressed during the comment period, EPA has stated it may be willing to allow these electronic spark ignition combustion devices in the rule once finalized.
Lastly, EPA is accepting comments regarding the current definition of low pressure gas well. There has previously been no opportunity to comment on this definition after the initial publication of NSPS Subpart OOOO, and EPA subsequently received multiple requests to use a simpler definition.
Each of the proposed changes are discussed in more detail below.
Hydraulic Fracturing Phases as Proposed by EPA
The stages of the hydraulic fracturing process are proposed by EPA to be defined as follows:
- Initial Flowback Stage: the first flowback following hydraulic fracturing. This phase generally results in high volumetric flow water, sand, fracturing fluids and debris with very little gas. During this phase, the flowback is sent to a “well completion vessel” that can be an open top frac tank, a lined pit or “any other vessel ”. This vessel is not considered a “storage vessel” as defined in NSPS OOOO. During this phase, there is no requirement for controlling emissions from the vessel or the flowback itself; it can be vented to the atmosphere.
- Separation Flowback Stage: Flow must be sent to a separator as soon as there is enough gas in the flowback to operate a separator. EPA’s understanding (which is admittedly limited) is that flowback is monitored for gas concentration, and once the concentration of gas reaches the lower explosive limit (LEL), the flowback is then directed to a separator. This initiates the Separation Flowback Stage, during which time the operator must route recovered gas into a gas flow line or collection system, reinject recovered gas into a well, and use recovered gas as an on-site fuel source or for some other useful purpose. If none of those options are feasible, the recovered gas must be routed to a completion combustion device. If, during this phase, the recoverable gas can no longer be sent to a separator, the activity reverts to the Initial Flowback Stage. Once the flowback has declined and stabilized enough to allow continuous recovery of the gas as well as production of crude oil, condensate and water, EPA believes the activity moves to the next phase, the Production Stage.
- Production Stage: During the Production Stage, gas from the separator cannot be vented or combusted and all liquids must be routed to a storage vessel. This is also the date for which all other control requirements would be based (e.g., determine emissions within 30 days after the start of the “production stage” and control emissions within 60 days of the “production stage”). EPA is soliciting feedback for objective criteria that could be used to determine when a well reaches this stage.
Use of VRU and PTE Calculations
EPA has indicated in guidance and subsequent regulation that operators can take “credit” for Vapor Recovery Units (VRUs) when evaluating the VOC emissions from storage tanks and comparing the emissions to the 6.0 T/yr applicability threshold under NSPS Subpart OOOO. As part of this proposed rule change, EPA has proposed that if an operator does not have a permit or another legally and practically enforceable limit established under federal, state or local authority, the operator can only take credit for that VRU as inherent process if the operator complies with the cover and closed vent system requirements found in 60.5365(e)(1) through (4).
Electronic Spark Ignition Combustion Devices
EPA has clarified that it will continue to disallow the use of electronic spark ignition for combustion devices used to control emissions from well completions, storage vessels, and wet seal compressors. EPA is requesting information and data so that the devices’ effectiveness can be evaluated in meeting the standards. EPA states that if it receives sufficient information prior to finalizing the rule, it may add language in the final rule allowing these devices. Specifically, EPA is looking for data that addresses the following concerns:
- Appropriate design, operation and maintenance procedures to ensure proper combustion of the waste stream
- The use of safety valves to ensure that no gas is available for combustion if the ignition system is not functional
- Measures that can be taken to avoid vapor venting upstream of the device in cases where the safety valve remains closed
- Frequency of monitoring in order to ensure proper operation
- Operating parameters that can impact pilot-less flare performance and flare flame stability
- The effects of low BTU content gas of variable content VOC
- Frequency of system replacement
Reciprocating Compressors and Vapor Recovery
EPA is proposing to add a control option for reciprocating compressors. EPA is specifically proposing to allow reciprocating compressors to route emissions from compressor venting back into the process in lieu of rod packing replacement . This specific option could prove to be helpful for compressors that are in VRU service.
EPA previously required that thief hatches be weighted and properly seated. EPA is now proposing that in lieu of a weighted lid, any mechanism can be used as long as it ensures that the thief hatch is properly seated.
Natural Gas Processing Plant Clarifications
EPA clarified two issues related to natural gas processing plants. First, it corrected an error whereby connectors were previously not exempted from leak detection at small gas processing plants and at gas plants on the Alaska North Slope. Second, EPA redefined the term “equipment” to clarify that it only applies to onshore natural gas processing plants.
Removal of “Affirmative Defense”
EPA is proposing to remove the “affirmative defense” provisions from the startup, shutdown and malfunction provisions of the 2012 rule. Citing an April 2014 ruling involving the Natural Resources Defense Council (NRDC) , EPA asserts that “if a source is unable to comply with emissions standards as a result of a malfunction, the EPA may use its case-by-case enforcement discretion to provide flexibility, as appropriate.”
View the proposed rule in its entirety here: http://www.gpo.gov/fdsys/pkg/FR-2014-07-17/pdf/2014-16576.pdf
Oil and gas operators should assess EPA’s proposed changes to NSPS Subpart OOOO for potential implications for their operations. Some proposed changes would likely be beneficial. These should be supported in comments by oil and gas companies. Other proposed changes may not be beneficial. Oil and gas operators should provide appropriate comments and recommend alternatives for EPA consideration that would accomplish EPA’s goals. The comment process is the industry’s opportunity to influence the final regulation.
This analysis is based on the pre-publication version of the proposed rule. There may be changes to the rule between the proposed version and what is published in the Federal Register. When providing feedback to EPA, commenters should ensure that they respond to the published version of the rule in the Federal Register.
1Page 26, Pre-publication preamble
2Page 47, Pre-publication preamble
3Page 54, Pre-publication preamble
4NRDC v. EPA, No. 10-1371 (D.C. Circuit, April 18, 2014)
5Page 67, Pre-publication preamble