2021 Law Tightens Air Quality Emissions Standards for Oil and Gas

August 02, 2021

Congress rolls back OOOOa rules, operators need to detect methane leaks

Federal air quality standards are changing for the oil & gas industry, which means that some operators may need to increase leak detection and environmental monitoring. A June 2021 law reverted EPA regulations from relaxed 2020 rules back to stricter 2016 requirements. And the details could change yet again, as EPA issues clarifications and new proposals later this year.

 

What has changed?

In late 2020, EPA issued two rules for oil & gas industry, regarding air-quality emissions from new and modified wells or facilities, also called emissions sources.  

  • The first, known as the Policy Rule, removed methane regulation from the industry’s production and processing segment. It also created a separate source category for transmission and storage, excluding these from regulation of volatile organic compounds (VOC) and methane emissions.
  • The subsequent Technical Rule further modified existing requirements enacted in 2012 and 2016. In particular, this exempted low-producing wells (less than 15 boe/d) from leak detection and repair (LDAR) requirements for VOC emissions. The rule also relaxed fugitive emissions monitoring frequency, repair timing, recordkeeping, and other regulations.

 

A new 2021 law, or Congressional Review Act, disapproved the Policy Rule effective on June 30, 2021.  As a result, the affected oil & gas segments now return to regulations under 2012 and 2016 New Source Performance Standards (NSPS). Specifically, 40 CFR Part 60 Subpart OOOOa established emissions standards, leak detection and compliance schedules. The 2020 Technical Rule was not rolled back. 

 

EPA intends to propose comprehensive emissions guidelines in September, following a January 2021 presidential executive order. The proposal should include restrictions on methane and VOC emissions from existing sources – not just new or modified sites – and will reconcile discrepancies between 2016 and 2020 policies.

 

What does this mean for oil and gas producers?

After its disapproval, the 2020 Policy Rule no longer applies, as if it had never taken effect.  EPA indicated that it expects producers to act immediately to conform with 2012 and 2016 standards. 

 

The change means that low-producing wells are now subject to methane leak detection, even though VOC leak detection is not required.  Transportation and storage are no longer exempt and must comply with earlier rules. Those operators may need to begin routine LDAR on their equipment, as specified in relevant NSPS regulations.

 

While the agency noted that it will consider special circumstances caused by the disapproval, it also stated that compliance can be enforced. With the increased public attention to environmental issues, it wouldn’t be surprising to see greater enforcement of emissions standards over the next three years.

 

Source Category

Applicable rules and requirements

Transmission and storage segment

 

    • Not subject to 2020 Technical rule
    • Must comply with relevant 2012 and 2016 NSPS

For construction, reconstruction or modification started…

    • after Sep 18, 2015: Methane and VOC requirements in 2016 NSPS 
    • from Aug 23, 2011 to Sep 18, 2015: VOC requirements in 2012 NSPS

Production and processing segments

For construction or modification started after Sep 18, 2015:

    • Methane requirements in 2016 NSPS
    • VOC requirements in 2020 Technical Rule

Low-production well sites (less than 15 boe/d)

    • Semi-annual LDAR surveying of methane emissions required under original 2016 NSPS (OOOOa rule)
    • Exempt from LDAR surveying of VOC emissions under 2020 Technical Rule (still in effect)
    • May choose to comply with both standards or the stricter, which is 2016 NSPS

Saltwater disposal wells

    • Remains exempt from emissions requirements under the 2020 Technical Rule (still in effect)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write to: info@esg-dynamics.com


Disclaimer. The Materials IN THIS REPORT are provided “as is” without warranty of any kind. ESG DYNAMICS, LLC disclaims all warranties, whether express, implied or statutory, regarding the Materials, including without limitation any and all implied warranties of merchantability, accuracy, results of use, reliability, fitness for a particular purpose, title, interference with quiet enjoyment, non-infringement of third-party rights and any warranties or conditions arising out of course of dealing or usage of trade. Some states do not allow the exclusion or limitation of implied warranties, so the above limitations and exclusions may not apply, in whole or in part, solely in those states.

 

ESG DYNAMICS, LLC retains all worldwide right, title and interest in and to the Materials and any derivative works or enhancements thereof, including all worldwide intellectual property rights therein.