On April 17, 2012, the U.S. Environmental Protection Agency (USEPA) issued final regulations revising the NSPS and NESHAP for the Oil & Natural Gas Production source category (40 C.F.R. Part 60, Subparts KKK and LLL). As we described earlier this month, USEPA issued the proposed rules on August 23, 2011 and thereafter extended the timeframe for promulgating the final rules several times in order to respond fully to voluminous (over 150,000) public comments. The final rule includes federal air standards for hydraulically fractured natural gas wells, as well as requirements for sectors of the oil and gas industry for which no federal air standards currently exist.The final rule includes the review and update of four rules for the oil and natural gas industry:
- a new source performance standard (NSPS) for VOCs leaking from equipment at gas processing plants;
- a NSPS for SO2 emissions from gas processing plants;
- an air toxics standard for oil and natural gas production; and
- an air toxics standard for natural gas transmission and storage.
A key component of the revised NSPS for VOCs involves the use of a process – known as a “reduced emissions completion” or “green completion” – to capture natural gas that currently escapes to the air. Some states already require such emission capture processes. But the final rule allows oil & gas sources until January 1, 2015 to conduct green completions, using a phased approach to allow sufficient time for cost-effective control equipment and trained operators to become broadly available. Several public comments on the proposed rules, including those by the American Petroleum Institute, indicated that these controls are not sufficiently available currently. Until 2015, the final rule requires fractured and refractured wells to reduce their VOC emissions by 95 percent through combustion devices (flares). In addition, the final rule exempts entirely from the green completion requirements certain types of exploratory (“wildcat”) wells and low-pressure wells.
The final rule also includes significant new notification and annual reporting requirements for fractured well completions, as well as emission limits for related equipment at well sites (such as pneumatic controllers, glycol dehydrators, and vessels/tanks used to store condensate, water, or crude oil.
USEPA has created a webpage for these regulatory actions; the webpage includes links to the final rule as well as summary documents explaining the key changes the rules will implement for various oil & gas industry sectors. The summary document concerning natural gas well production sites can be found here.