When EPA proposed New Source Performance Standard (NSPS) OOOO on August 23, 2011, not many operators had a solid handle on emissions from oil field storage tanks. A lot has been learned since then. Oilfield operators and agencies alike have since learned that storage tanks - particularly those associated with newer facilities, and with high production rates or producing from shale oil formations with high volatility oil - can be significant emitters of Volatile Organic Compounds (VOCs). As a result, oil and gas operators have become accustomed to securing air quality permits for these types of facilities. Indeed, there are more permitted upstream facilities today than ever before - many of which are claiming a 95% reduction (or more) in emissions from storage tanks, thanks to the installation of closed vent systems which collect vapors from tanks and either recycle them, or combust them.

However, EPA (and others) have seen these systems are routinely not operating as expected at upstream facilities. In 2015, EPA issued a "Compliance Alert" regarding emissions from storage tanks at upstream sites.1 EPA has now made it clear that this audit program has been developed, "…because EPA and states have observed significant emissions and Clean Air Act noncompliance at these facilities."2

On March 29, 2019, the US EPA finalized a program intended to allow upstream exploration and production (E&P) facilities protections for acquired assets with inadequate storage tank control systems. While the program offers protections for operators from EPA, it does not offer unilateral protections from state level enforcement unless the operator also agrees to the conditions of a state-level audit program. The program is also limited to facilities that have been acquired by a company not otherwise responsible for environmental compliance prior to the date of acquisition.

The finalized agreement and appendices can be found on EPA's website.

New Owner Audit Policy Overview

As with any audit program, EPA's New Owner Audit Program comes with prescriptive schedules, notification and reporting requirements, and (of course) corrective actions. The audit protections only apply to discreet facilities listed within the agreement, with provisions to add or remove facilities in the event of more acquisitions or divestitures.

  • New acquisitions can be pulled into EPA's audit program within nine months of the date of acquisition or by March 29, 2019 (the date EPA finalized the program), whichever is later. However, the date of the acquisition cannot be earlier than March 29, 2018.
  • The schedule to complete the audits will be determined on a case-by-case basis and will be determined by the number of facilities within the audit, and the overall scope of the audit.
  • During the course of the audit, the company will submit reports to EPA summarizing the violations discovered and corrected during each six-month period.
  • For noncompliance violations stemming from improperly designed vapor capture systems, operators have 180 days from the date of discovery to correct the noncompliance. EPA will grant an extension under special circumstances as they deem appropriate.
  • Any other violation that is discovered must be corrected within 60 days. Again, an extension is possible if EPA deems it to be justified.
  • As with any audit, in the event the operator discovers noncompliance that is resulting in the immediate and substantial endangerment to public health or welfare, or the environment, the operator must correct noncompliance "as expeditiously as possible."

System Engineering and Design Analysis, Field Survey and Corrective Action Guidelines

EPA's main focus of the program is ensuring closed vent system and tank controls are operating properly. As such, they are expecting up-front documentation on exactly how each operator will determine that closed vent systems are appropriately designed and operated in accordance with those design specifications.

Modeling Guideline

This document will detail how the operator will determine the Potential Minimal Instantaneous Vapor Flow Rate and the Potential Peak Instantaneous Vapor Flow Rate for each stream feeding into a vapor control system. The procedure must include all sources routed to the control device, including tanks, loading, and any other sources routed to the control device.

Engineering Design Standards

The operator will perform one or more Engineering Design Standard to determine whether vapor control systems are adequately sized to handle the calculated "Potential Minimal" and "Potential Peak" Instantaneous Vapor Flow Rates feeding to each system. These evaluations can be performed for each individual system, or by grouping as appropriate.

Vapor Control System Field Survey Standard Operating Procedures

Within 60 days of notifying EPA of entry into the program, operators will provide EPA with the Standard Operating Procedures (SOPs) for conducting field surveys to determine the efficacy of vapor control systems. As with the Modeling Guideline, EPA will provide feedback within 45 days of receiving the SOP. The SOP will include procedures for:

  • Verifying the equipment associated with the vapor control systems is operating properly;
  • Conducting Infrared (IR) camera inspections to confirm the vapor control system is capturing the vapors while liquids are being sent to the tank; and
  • Evaluating all vapor system components (including thief hatches, pressure relief valves, mountings, and gaskets), and documentation of potential upgrades to those components to reduce the likelihood of VOC emissions to atmosphere.

Vapor Control System Modifications and Verification

During the course of the audit, if vapor control systems are determined to be inadequate, the operator will make the necessary modifications to either:

  • Increase the capacity of the vapor control system; and/or
  • Reduce the flow through the vapor control system.

Once modifications have been made, the operator will ensure that the system is operating properly by applying the Engineering Design Standard, and confirming with an IR camera.

Reporting Requirements

Once the program is underway, operators will submit semiannual reports to EPA that include:

  • A list of the facilities audited during the six-month period;
  • A summary of violations discovered;
  • Summary of actions taken to correct the violations; and
  • Any changes to the list of facilities covered in the agreement.

An annual report will be provided to EPA within 60 days following the completion of the program and corrective actions. The final report includes the following information for each disclosed violation:

  • Facility name, Well ID and location;
  • Facility permitting status and applicable permit number;
  • Violations;
  • Federal statutory and regulatory citation;
  • Start date (if known) and end date of noncompliance;
  • Corrective actions taken to bring facility into compliance; and
  • Which corrective actions directly resulted from improperly designed vapor control systems.

Timeframes


Notification to EPA to enter program

Within 9 months of the date of acquisition or by March 29, 2019 (whichever is later). The date of acquisition cannot be earlier than March 29, 2018.

Within 60 days after notification to EPA to enter program

Submit auditing tools.
Submit Modeling Guideline for EPA approval.
Submit Vapor Control System Field Survey SOPs.

Within 45 days after submittal of Modeling Guideline to EPA

EPA to provide feedback on auditing tools, Modeling Guideline and Field Survey SOPs.

Within 30 days of receiving feedback from EPA

Submit revised Modeling Guidelines, Field Surveys to EPA with amended procedures.

With 15 days after the end of each 6-month period

Submit semiannual report.

Within 60 days following the completion of audit program and corrective actions

Submit final report.

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1https://www.epa.gov/sites/production/files/2015-09/documents/oilgascompliancealert.pdf
2 EPA's "Response to Comments" on the draft policy: https://www.epa.gov/sites/production/files/2019-03/documents/oilandgasnewownerauditprogrampolicydevelopmentdocuments032919.pdf