New Data on O&G Methane Rule Under Consideration

The Trump EPA continues to build a case for staying certain requirements of the Obama EPA’s June 2016 New Source Performance Standards (NSPS) governing emissions of methane from the oil and natural gas (O&G) sector.

In June 2017, in response to industry concerns about the difficulty of complying with certain provisions, the Agency proposed two stays of the NSPS: (1) a 3-month stay and (2) a 2-year stay specifically related to requirements affecting fugitive emissions, well-site pneumatic pumps, and certification of closed vent systems by a professional engineer (PE). The Agency says it received comments on the issues raised in the proposals and also received a “broad range of questions, concerns, and constructive suggestions” that warrant additional consideration. Those issues are summarized in two notices of data availability (NODAs), one for each of the two stays.

“The purpose of [the NODAs] is to describe and seek comment on several ideas raised by stakeholders that may go beyond those for which the Agency sought comment in the June 16, 2017, proposal,” the EPA states.

Issues raised by stakeholders

Information provided in the NODAs falls into two categories: (1) challenges to implementing the requirements in the 2016 rule that would be covered by the proposed stays and (2) the Agency’s legal authority to issue a stay. Comments have been requested on issues contained in each of those categories. Several specific concerns are summarized as follows:

• Legal authority. While recognizing that the Clean Air Act (CAA) limits EPA’s ability to stay certain actions, the Agency says it can find no such constraints with respect to the fugitive emissions requirements, the well-site pneumatic pump requirements, and the certification requirements. The Agency’s basic argument is that the 2016 NSPS did not adequately address the technical and cost issues of these requirements, and the Agency is empowered by the CAA to correct such inadequacies through rulemaking.
• Fugitive emissions. The 2016 rule states that all fugitive emissions components at a well site must be monitored and repaired. Stakeholders reported on the difficulty of applying these requirements to equipment owned by third parties. In the 2016 rule, the EPA said the resolution of leaking components identified during surveys can be managed by the operator through cooperative agreements with other potential owners at the site. The Agency now states that it has received feedback that there are complicated site configurations and contractual arrangements that the EPA did not consider in the 2016 rule, which could prevent compliance.
• Well-site pneumatic pump requirements. The 2016 rule included a technical infeasibility exemption for the pneumatic pump requirements. But stakeholders said the rule created an unanticipated and unnoticed distinction between greenfield (new development) and nongreenfield sites. Specifically, stakeholders suggested that this distinction has caused confusion among owners and operators on what sites qualify for the technical infeasibility exemption.
• PE certification requirements. The EPA estimates that approximately 16,000 affected sources (i.e., pneumatic pumps, compressors, and storage vessels) came online between the proposed rule and the 2016 final rule, not counting those that have and will come online since. The EPA received feedback that owners and operators had to reanalyze and potentially redesign the closed vent systems to meet the certification requirement. Subsequent to the proposed stay, the EPA also learned that owners and operators have struggled to retain PEs to complete these certifications primarily because of a shortage of PEs certified in each state of operation with experience in the design of these systems.
• Phase in instead of stay. In light of the numerous ongoing compliance issues, the EPA is soliciting comment on whether it should amend the phase-in periods in the 2016 rule instead of simply staying the requirements. A stay would mean that sources do not have to comply while the stay is in place. It would not, however, change any dates in the 2016 rule. This could create uncertainty for sources regarding their obligations upon expiration of the stay. A change to the phase-in periods (or the addition of such a period where the rule does not currently provide one) could provide greater certainty to sources, says the Agency.

The NODAs also request comment on an updated analysis of cost savings, forgone benefits, and net benefits for the proposed 2-year stay.

Comments on the NODAs must be received by December 8, 2017.

Both NODAs were published in the November 8, 2017, FR.