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On July 28, 2011 the EPA Administrator signed a suite of proposed new air regulations affecting both the Production/Processing and Transmission/Storage sectors of the oil and natural gas industry. The proposed rules mandate the use of emission controls and work practices through two different air regulatory programs – New Source Performance Standards (NSPS) and National Emissions Standards for Hazardous Air Pollutants (NESHAP).

The public comment period for these proposed rules will extend for 60 days from date of publication in the Federal Register. Additionally, public hearings will be held in Dallas, Denver, and Pittsburgh (dates yet to be announced).

The proposed new standards and proposed amended standards are highlighted in the following sections.

Proposed NSPS 40 CFR Part 60, Subpart OOOO

The standards for onshore natural gas processing plants currently found in NSPS Subparts KKK and LLL have been revised and consolidated under Subpart OOOO. NSPS Subpart OOOO will apply to newly constructed affected facilities, and EPA proposes to modify NSPS Subparts KKK and LLL to limit their applicability only to affected facilities already subject to those subparts. The proposed new rule will regulate emissions of volatile organic compounds (VOCs) and sulfur dioxide (SO2), and will include new emissions and work practice standards for completions of hydraulically fractured gas wells, pneumatic devices, compressors, and tanks as summarized below:

  • Hydraulically fractured well completion would be required to employ “green completion” techniques and/or pit-flaring for both newly drilled and fractured wells as well as existing wells where re-fracturing is performed.
  • Gas-driven pneumatic devices at gas processing plants would be subject to a zero emission standard, and devices at other locations would be subject to a bleed limit of 6 standard cubic feet per hour (scfh). 
  • As proposed, centrifugal compressors would be required to be equipped with dry seal systems. EPA notes that it may consider modifications to the proposed rule to allow wet seals if vented to closed vent systems and control devices. EPA is specifically requesting comments on this issue.
  • Reciprocating compressors would need to meet operational standards, including the replacement of the rod packing for every 26,000 hours of use. EPA is seeking comment on a fixed replacement frequency in lieu of monitoring hours of use.
  • New or modified storage vessels with throughput ≥ 1 barrel of condensate per day or ≥ 20 barrels of crude oil per day would be required to meet a 95% control efficiency using a vapor recovery unit (VRU) or a flare.
  • Gas processing plant fugitive emissions regulated through leak detection and repair (LDAR) programs would be subject to the new lower leak thresholds as specified in recently revised NSPS Subpart VVa.

The standards regulating SO2 from gas processing plants would be updated to raise the control efficiency requirement to 99.9% for plants with a sulfur feed rate > 5 tons per day (tpd) and a hydrogen sulfide (H2S) content ≥ 50%.  

Proposed Amendments NESHAP – 40 CFR Part 63, Subparts HH and HHH

Amendments to the two natural gas industry NESHAPS (HH for the production sector and HHH for the transmission and storage sector) are proposed as a result of EPA’s periodic residual risk review. The proposed rule amendments would include equipment not previously subject to NESHAP such as small dehydrators in both sectors and certain storage vessels in the production sector. Additionally, a number of other updates are proposed relating to the compliance demonstration requirements.

In the production sector, the small dehydrators covered by the proposed new standard are those with actual annual average natural gas flowrates less than 3 million standard cubic feet per day (scfd) or actual average benzene emissions less than 1.0 tons per year (tpy) that were previously exempt from the rules. EPA is also proposing to require 95% emission reduction to every storage vessel located at major source oil and natural gas production facilities, even those that do not have the potential for flash emissions. In addition, emissions from those tanks must now be counted toward determining the facility’s major source status.

In both sectors, EPA is also proposing an alternate compliance option for non-flare combustion devices allowing manufacturers to demonstrate the destruction efficiency for a specific model in lieu of facilities conducting site-specific tests for those specific model devices. In addition the following compliance related changes are proposed: 

  • Revisions to the parametric monitoring calibration provisions
  • Addition of periodic performance testing where applicable 
  • Removal of the allowance of a design analysis for all control devices other than condensers
  • Removal of the requirement for a minimum residence time for an enclosed combustion device
  • Addition of recordkeeping and reporting requirements to document carbon replacement intervals

EPA is also proposing to eliminate the startup, shutdown, malfunction (SSM) exemptions and is proposing that the established standards in these two NESHAPs apply at all times. In conjunction with this change, EPA proposes to add a provision for affirmative defense to civil penalties for exceedances of emission limits caused by malfunctions.