United States: Quad Workout: Compliance With EPA's New Methane Regulations

As all serious skiers know, consistent year-round quad, leg, and core workouts are critical to maximizing a fun, rewarding, and safe ski season. For the oil and gas industry, there is a new quad workout that demands even more attention and dedicated work to ensure compliance and minimize enforcement risk: EPA's new methane and volatile organic compound ("VOC") rules under 40 CFR Part 60, Subparts OOOOb (pronounced "Quad O-b") and OOOOc ("Quad O-c").

These new rules build and expand upon EPA's original OOOO ("Quad O") and OOOOa ("Quad O-a") regulations. Unlike EPA's prior rules, the new rules affect both new and existing facilities. EPA's OOOOc rules direct States and Native American Tribes to adopt enforceable plans for existing sources of emissions to cut methane.

EPA's new methane rules were published in the Federal Register on March 8, 2024, after being announced on December 2, 2023, during the United Nations climate conference (COP28). The effective date of these new rules is May 7, 2024. See 89 Federal Register 16,820 (March 8, 2024).

The new rules comprise two main components. The Subpart OOOOb regulations are directly applicable to sources of emissions in the oil and gas industry that were constructed or modified after December 6, 2022. The second component, Subpart OOOOc, sets regulatory guidelines for the formulation of state plans to regulate industry's existing sources that were constructed on or before December 6, 2022.

Here is a quick quad summary of which rules apply based on date of construction or modification:

OOOOb Sources. The OOOOb regulations cover the following emission sources:

• Routine flaring of associated gas
• Well completions
• Centrifugal compressors (wet and dry seals)
• Reciprocating compressors
• Fugitive emissions (wells and centralized production facilities)
• Process controllers (also known as pneumatic controllers) using natural gas
• Pneumatic pumps using natural gas
• Gas well liquids unloading
• Storage vessels (tank battery with potential emissions exceeding 6 tons per year (tpy) VOC or 20 tpy of methane)
• Sweetening units
• "Process unit equipment" at gas plants (equipment leaks)
• Emissions control devices

OOOOb Compliance Dates. Most new and modified sources (after December 6, 2022) must comply upon initial start-up or by May 7, 2024 (60 days after publication in the Federal Register), whichever is later. Companies must ensure that process controllers and pneumatic pumps (outside of Alaska) comply with the zero-emissions standard by March 8, 2025, and these devices have interim standards such as low-bleed and intermittent process controllers.

EPA's OOOOb rules phase out flaring of gas from new oil wells. The two-year phase out compliance deadline for routine flaring of associated gas is March 8, 2026, and after that date, gas must be routed to a sales line, used on-site, or used for some other beneficial purpose.

Compliance Timeline for OOOOc. The OOOOc regulations require states and Tribes to submit plans to address existing sources within 24 months (March 8, 2026) at which point EPA has 14 months to decide on the state plan submission. The plans must set compliance deadlines no later than 22 months after EPA's decision on the State Plan or Tribal Plan (or within 5 years of the March 8, 2024, effective date – March 2029). Facility compliance with the state plan is required within 36 months after submission, assuming approval by EPA.

Under the OOOOc emissions guidelines for state plans/rules, flaring is permitted for preexisting wells with documented methane emissions of 40 tons per year or less, so long as that gas is routed to a flare or control device that achieves a 95% reduction in methane.

Concluding Observations. EPA's new methane rules are voluminous and densely complex. Stay tuned for more summaries of these rules in the coming weeks, including EPA's Third-Party Super Emitter Monitoring Program, in the context of EPA's new enforcement and compliance strategy issued in the fall of 2023, navigating the new leak detection and report (LDAR) requirements, and how to play four-dimensional chess at the state and federal levels upon the forthcoming issuance of BLM's final Waste Prevention Rules on venting and flaring.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.