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August 21, 2012
Revised air rules for O&G sector

The oil and gas (O&G) industry is reviewing significant revisions to air emissions requirements for the sector, which were recently published in the Federal Register. The EPA initiated amendments to the Clean Air Act’s new source performance standards (NSPS) and national emissions standards for hazardous air pollutants (NESHAP) following a February 2010 court-approved consent decree that settled a suit brought by environmental groups against the Agency for failing to meet its obligations to review and revise the O&G NSPS and NESHAP.

NSPS

The final rule both revises the existing NSPS and finalizes standards for certain crude oil and natural gas sources that were not covered by preexisting NSPS. Volatile organic compound (VOC) limits are established for gas wells, centrifugal compressors, reciprocating compressors, pneumatic controllers, storage vessels, and leaking components at onshore natural gas processing plants, which must also meet limits for sulfur dioxide (SO2) emissions. Specifically:

  • Natural gas. The rule covers any onshore well drilled principally for production of natural gas. For the approximately 13,000 gas wells that are hydraulically fractured or refractured each year, the rule generally requires owners/operators to use reduced emissions completions (RECs, or green completions) instead of flaring to lower VOC emissions by nearly 95 percent. Flaring is optional until January 1, 2015, when either a completion combustion device or RECs become mandatory except in cases where the use of RECs is not feasible. RECs allow the collection of gas previously lost through flaring. The EPA believes this will save the industry approximately $11 million to $15 million annually.
  • Storage vessels. Individual O&G storage vessels with emissions equal to or greater than 6 tons per year (tpy) must achieve at least 95.0 percent reduction in VOC emissions. This provision covers vessels unregulated under the previous NSPS.
  • Controllers. A natural gas bleed rate limit is set at 6 standard cubic feet per hour (scfh) for individual, continuous bleed, natural gas-driven pneumatic controllers located between the wellhead and the point at which the gas enters the transmission and storage segment. For individual, continuous bleed, natural gas-driven pneumatic controllers located at natural gas processing plants, the rule sets a natural gas bleed limit of 0 scfh.
  • Compressors. The rule requires a 95.0 percent reduction of VOC emissions from wet seal centrifugal compressors located between the wellhead and the point at which the gas enters the transmission and storage segment. The rule also requires measures to reduce VOC emissions from reciprocating compressors located between the wellhead and the point where natural gas enters the natural gas transmission and storage segment.
  • Leak detection and repair. For onshore natural gas processing plants, NSPS requirements for leak detection and repair (LDAR) are revised to reflect procedures and leak thresholds established in the NSPS for equipment leaks of VOCs in the synthetic organic chemicals manufacturing sector. The final rule also increases the SO2 emissions reduction standard from 99.8 percent to 99.9 percent for units with a sulfur production rate of at least 5 long tons per day.

NESHAP

Changes for NESHAP in the final rule include:

  • The amendments establish first-time benzene, ethylbenzene, toluene, and xylene (BTEX) standards for small glycol dehydrators.
  • For major natural gas processing plants, the leak definition for valves has been lowered to 500 parts per million, thus requiring LDAR procedures at this level.
  • The exemption from emissions limits during periods of start-up, shutdown, and malfunction has been eliminated.

According to the EPA, the revised standards will reduce annual emissions of VOCs by 190,000 to 290,000 tons; air toxics by 12,000 to 20,000 tons; and methane by 1.0 to 1.7 million tons. The methane reduction would be equivalent to 19 to 33 million tons of CO2.

In initial reactions, spokespersons for the O&G industry said the amendments will hit small producers particularly hard.

EPA’s final air standards for the O&G sector were published in the August 16, 2012, FR.

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