What began in 2009 as a court-ordered review of New Source Performance Standards (NSPS) continues to bring more attention and rulemakings for the oil and natural gas industry. Originally published by the U.S. Environmental Protection Agency (EPA) in 2012, NSPS OOOO has been updated four times prior to the current proposal announced on August 18, 2015, and renamed NSPS Subpart OOOOa. The proposed rule adds several significant requirements to the original 2012 rule:
- Including more facilities and equipment that were not previously affected by the rule
- Adding methane as a regulated pollutant
- Adding fugitive gas monitoring requirements
Although the rule has not been finalized, it will affect facilities that were constructed, modified, or reconstructed after September 18, 2015. As with other recent NSPS rulemakings, this interim period between the proposed rule and the publication of the final rule raises questions as to how facilities that are potentially affected should be managed in the meantime. Starting upstream and moving down the pipeline through the gas transmission sector, a number of existing sources and previously excluded equipment could be affected by the proposed rule.
EPA is bringing oil well production, pneumatic pumps, and previously excluded tank batteries under the NSPS regulatory umbrella. Previously, only wells completed for the principal production of natural gas were required to notify, track, report, and control VOC emissions following hydraulic fracturing and during completion. After September 18, 2015 (upon finalization of the rule), any oil well with a gas to oil (GOR) ratio over 300 scf/bbl will be considered an affected facility and will require the same notification, tracking, reporting, flaring, and completion requirements previously required of its natural gas counterpart.
Following well completions, EPA is proposing standards to further regulate fugitive methane and VOC emissions from new and modified oil and natural gas production well sites. As defined in the rule, a well site could include such items as separators, storage vessels, heaters, dehydrators, or other equipment at any site “directly disturbed during the drilling and subsequent operation of, or affected by, production facilities directly associated with any oil well, gas well, or injection well and its associated well pad.” 1 Although EPA has been careful to limit NSPS OOOOa applicability to only the fugitive monitoring portion of the rule, as proposed, any hydraulic fracturing and subsequent production would be considered a modification to a “well site.” This would include previously excluded facilities, such as tank batteries, associated with the well completions under the fugitive monitoring requirements of the rule.
EPA has also proposed adding pneumatic pumps to the list of regulated equipment. Although these could be located anywhere along the pipeline, subjecting them to regulation may have the most impact on upstream facilities where electricity may be unavailable and pumps may be natural gas driven. EPA is proposing that emissions from these pumps be 95% controlled assuming a control device already exists on site (except at gas plants, where 100% control is expected).
Midstream and Transmission
Similar to upstream requirements, at compressor stations EPA is proposing standards to regulate fugitive methane and VOC emissions from new and modified natural gas compressor stations that will bring many previously excluded sources under OOOOa fugitive monitoring. For example, EPA states that “for purposes of the proposed standards for fugitive emission at compressor stations, we propose that a modification occurs only when a compressor is added to the compressor station or when physical change is made to an existing compressor at a compressor station that increases the compression capacity of the compressor station.” Thus, once OOOOa is final, any change to previously excluded compressors that increases compression could be considered a modification and bring all associated components, including associated piping, condensate tanks, and connections, under fugitive monitoring requirements. Compared to previous OOOO requirements, this rule promises to increase fugitive monitoring requirements for compression operations throughout the oil and natural gas industry, including the transmission sector.
Although EPA was expedient in finalizing past changes to the rule, in this go-round it has extended comment periods and the final rule is not expected until June 2016. While the extensions have provided ample opportunity to thoroughly review the proposed rule and provide comment, it could also indicate that the final rule will differ significantly from the one currently proposed, potentially posing new compliance challenges for any affected facilities installed, modified, or reconstructed after September 18, 2015.