United States: EPA Issues Proposed Rules On VOC And Methane Emissions From Oil And Gas Operations

Last Updated: August 25 2015
Article by Kenneth Komoroski and Daniel Carmeli

The EPA seeks to reduce VOC and methane emissions by 40-45% by 2025.

On August 18, 2015, the US Environmental Protection Agency (EPA) published proposed changes to the new source performance standards (NSPS) and draft amendments to the control techniques guidelines (CTGs) for the oil and natural gas industry, seeking to further reduce volatile organic compound (VOC) and methane emissions by 40–45% from 2012 levels by 2025. NSPS are established for many industry sectors and establish minimum performance standards for new or modified sources of air pollution. CTGs are guidelines recommended by EPA to achieve NSPS. Once CTGs are finalized, states are required to evaluate the CTGs to determine if they must change their regulatory programs to accomplish EPA's recommendations for controls as presented in the CTGs.

These proposed rules follow a series of preliminary announcements on this subject.

On January 14, 2015, EPA had announced that it planned to propose these emission reduction rules this summer. The proposed rule reflects the Obama administration's and environmental groups' focus on VOC emissions (as precursors to ground-level ozone formation) and on methane (as a "greenhouse gas") from oil and natural gas operations. Many industry representatives see this proposal as duplicative, costly, and unnecessary regulation that also undercuts efforts for national energy security and economic opportunity. The oil and natural gas industry is already heavily regulated for these emissions and has achieved significant further reductions with state-of-the-art control measures implemented in the past several years.

On April 15, 2014, one month after the White House released its Strategy to Reduce Methane Emissions,1 EPA released five white papers that lay the groundwork for new regulatory controls on VOC emissions (and, in particular, methane emissions) for oil and gas exploration, production, and midstream (transportation) operations. The papers outline estimated emissions and proposed control technologies for liquids unloading, leaks, compressors, completions, and pneumatic devices.

The proposed rules individually target the emission sources addressed by each of the white papers.2 The proposed NSPS would add emission limits for any new, modified, and reconstructed sources based on what EPA recommends to be the best air pollution control techniques for each of the identified sources. Specifically, EPA proposes the following:


Sources

Proposed Control Technologies

Leaks3

Semiannual optical gas imaging emission surveys (or, alternatively, an annual survey at well sites and a semiannual survey at compressor stations) and repairs within 15 days of discovering leak

Compressors4

Periodic replacement of rod packing systems or closed vent systems for reciprocating compressors, and closed vent systems or routing emissions to a process for wet seal centrifugal compressors

Completions5

Reduced emission completions, or "green completions," in conjunction with completion combustion device

Pneumatic Devices6

Zero natural gas bleed rate at gas processing plants and six standard cubic feet per hour elsewhere for pneumatic controllers


EPA is also seeking to supplement the proposed rules with other nonbinding initiatives. Last month, it released for stakeholder feedback a summary of its proposed voluntary "Natural Gas STAR Methane Challenge Program,"7 which is intended to encourage companies to commit to achieving significant methane emission reductions through large-scale operational changes. Although EPA describes the program as offering companies flexibility to determine how they will achieve these voluntary reductions, it is unclear how such initiatives may be reconciled with the binding performance standards, as modified by the current rulemaking. In conjunction with the proposed rules, EPA also issued Control Techniques Guidelines to serve as an emission control model to reduce emissions from existing sources for states that have failed to achieve mandatory limits on ozone (which is partly attributable to VOCs). Although CTGs are technically "nonbinding," states must consider these guidelines when evaluating their individual regulatory programs. Federal and state regulatory agencies also use the guidelines for enforcement actions.

The proposed rules and nonbinding initiatives signify EPA's response to an active, public debate regarding VOC and methane emissions from oil and gas operations. Groups on both sides of the issue have proffered supporting evidence for their positions. Environmental groups have presented satellite imaging that they say shows atmospheric methane concentrations of approximately 1.3 million pounds per year, nearly 80% more than EPA estimates. These groups have pointed to the imaging as evidence of effects from oil and gas activities and the need for stronger regulation of methane air emissions. However, a number of researchers believe that the methane emissions that satellite imaging show are actually because of leaks associated with coal bed natural gas and not from gas extracted through hydraulic fracturing.

Overall, methane releases from oil and natural gas activities have decreased dramatically in the last several years. In fact, despite industry growth, EPA announced that the oil and gas sector has reduced greenhouse gas emissions from well sites, pipelines, and processing facilities. According to EPA, methane releases from hydraulic fracturing operations have decreased 73% since 2011, with most of that decrease attributable to technology improvements. The oil and gas sector as a whole has reduced methane emissions by 12% since 2011 and by 16% since 1991; the 2012 data that EPA relied on should be updated to reflect current conditions and information. In light of these reductions, existing controls, and EPA's expectation of continued reductions under the existing regulations, many in the industry question the need for additional restrictions because the proposed regulations are questionable, at best. In order for the NSPS to be legally proposed and finalized, EPA is required to take into account cost, energy needs, and environmental and health considerations. Given the costs and the questionable benefits from further controls, there are serious issues as to whether EPA fulfilled its regulatory accountabilities in proposing these rules.

Finally, EPA's NSPS do not preclude states from expanding their own VOC or methane reduction programs. On April 22, 2015, California did exactly that, releasing Draft Regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities.8 The California proposal parallels the same sources covered in the EPA proposed rules (except that the California proposal also covers various types of tanks). The objective is also the same as EPA's stated objective—the state regulators anticipate annual reductions of 556,000 million tons of greenhouse gases beginning in 2018.9

Interested parties will have an opportunity to provide comments, and the current framework could undergo significant changes before the rules are finalized.10 If the changes are sufficiently substantial, EPA would have to repropose the rules.

Footnotes

1. View the action plan here.

2. EPA indicated that it does not have sufficient information regarding liquids unloading to include it in the proposed rule.

3. View the EPA report on oil and natural gas sector leaks here.

4. View the EPA report on natural gas sector compressors here.

5. View the EPA report on completions here.

6. View the EPA report on pneumatic devices here.

7. View the program's proposed framework here.

8. View the draft regulations here.

9. View the California Air Resources Board's Standardized Regulatory Impact Assessment Summary here.

10. The comment period on the EPA proposed rules will run for 60 days following publication in the Federal Register, which normally occurs within a couple of weeks of the initial release.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Akin Gump Strauss Hauer & Feld LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Akin Gump Strauss Hauer & Feld LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions