Regulatory Update: USEPA Releases Proposed Methane Regulations Targeting the Oil and Gas Industry
On November 2nd, the United States Environmental Protection Agency (USEPA) announced regulations aimed at reducing methane emissions from the oil and gas industry.
Methane is a potent greenhouse gas that traps at least 25 times as much heat in the atmosphere as carbon dioxide and is sometimes referred to as a "superpollutant." According to USEPA, methane emissions from landfills, agriculture, and the oil and gas industry directly contribute to climate change. The oil and natural gas industry is the largest industrial source of methane emissions in the United States. In line with the Biden Administration's long-term strategy to achieve net zero greenhouse gas emissions by 2050, USEPA is looking to expand methane regulations for the oil and gas industry. These reductions are anticipated to yield $48 billion in climate benefits from 2023 to 2035, based on USEPA's calculation of the social cost of methane.
USEPA has proposed New Source Performance Standards in 40 CFR Part 60 Subpart OOOOb (OOOOb) and Emissions Guidelines for Existing Sources in 40 CFR Part 60 Subpart OOOOc (OOOOc) to regulate methane emissions from the oil and gas industry. These standards would directly regulate new and modified methane sources. The emission guidelines would also require states to regulate methane emissions from existing sources through the development and implementation of state plans and regulations.
The proposed standards and guidelines encourage technological advancements regarding detection of fugitive emissions, allowing for the use of advanced methane detection technologies for leak surveys. In fact, under this proposal, any technology that meets the rigorous minimum methane detection threshold of 10 kilograms per hour is allowed. These surveys would be required at least every two months. To ensure that smaller leaks are detected, the surveys must be supplemented by an annual optical gas imaging(OGI) or Method 21 inspection.
USEPA is seeking comment on whether the advanced methane detection pathway constitutes the best way to reduce emissions, as well as on whether advanced methane detection should be required for well sites and compressor stations. Use of the method is optional as currently proposed.
In 2022, USEPA plans to issue a supplemental proposal to further regulate methane emissions. The agency is requesting information from stakeholders on the following subjects to help them evaluate opportunities to further reduce emissions: abandoned wells, flaring, pipeline pigging operations, and tank truck loading operations. In addition, they are seeking comment on how to empower local communities and regulators to identify and report excess emissions events.
The following lists outline the additional requirements for each emission source, beyond those of the existing regulations, that will be required under the proposed regulation. The proposed regulations apply to both methane and volatile organic compound (VOC) emissions.For fugitives from new/modified and existing sources, the following would apply:
- Well Pad Monitoring Co-Proposal 1: Well sites with emissions ≥ 3 tons per year (TPY) must monitor with OGI or Method 21 quarterly. Well sites with emissions < 3TPY must monitor once with OGI or Method 21 to demonstrate that they are leak-free but are not subject to ongoing monitoring.
- Well Pad Monitoring Co-proposal 2: Well sites with emissions between 3 TPY and 8 TPY must conduct semi-annual monitoring with OGI or Method 21.
- Compressor Stations must monitor with OGI or Method 21 quarterly.
- Natural gas processing plants must conduct monitoring with OGI bimonthly.
- Use of advanced methane detection technology will be allowed.
For new/modified and existing pneumatic controllers, the following would apply:
- Pneumatic controllers at production, processing, and transmission and storage facilities must have zero emissions.
For new/modified and existing associated gas venting, the following would apply:
- Sources must capture and send gas to a sales line if one is available.
- Where producers do not have a sales line, they must use the gas for power on site or another useful purpose or route it to a flare or control device that reduces methane and VOCs by at least 95%.
For storage tanks, the following would apply:
- For new/modified storage tanks, tank batteries with emissions of ≥ 6 TPY must control by at least 95% and follow all associated monitoring, recordkeeping, and reporting. Unlike OOOOa, tank battery emissions must be calculated as a whole and not as individual tanks.
- Existing tanks/tank batteries with emissions of 20 TPY of methane or greater must control by at least 95% and follow all associated monitoring, recordkeeping, and reporting.
For new/modified and existing pneumatic pumps, the following would apply:
- Pneumatic pumps in production segment with access to a control device on site must reduce emissions by 95%. This includes all natural gas driven diaphragm and piston pumps.
- USEPA is requesting comment on whether zero bleed pneumatic pumps are feasible for the production segment.
- Pneumatic pumps in processing segment must be zero bleed.Transmission and storage segment mirrors production segment, but excludes piston pumps.
- Existing sources guidelines exclude piston pumps.
For new/modified and existing liquids unloading facilities, the following would apply:
- Liquids Unloading Co-Proposal 1: "Affected facility" is defined as every well that does not result in any venting to the atmosphere.
- Liquids Unloading Co-Proposal 2: "Affected facility" is defined as every well that undergoes liquids unloading using a method that is not designated to eliminate venting.
- Unloading techniques that result in venting to the atmosphere must utilize best management practices to ensure venting is minimized.
For new/modified and existing reciprocating compressors, the following would apply:
- Regulations would apply to production segment in addition to gathering and boosting segment.
- Compressor rod packing must be replaced when the measured leak rate exceeds 2 scfm based on the results of annual monitoring. Or emissions must be collected and routed to a process through a closed vent system under negative pressure.
- Compressors at single well sites are exempt.
For new/modified and existing centrifugal compressors, the following would apply:
- Emissions from the wet seal fluid degassing system must be captured and routed to a control device or process with 95% reduction.
Current standards would remain in place for all well completions and sweetening units.
The proposed regulation was published in the federal register on 11/15/2021. The 60-day public comment period, where stakeholders can provide input to USEPA, is open until 1/14/2022. This proposal may present many challenges for the oil and gas industry, from increased costs of operation to technical feasibility and implementation issues.