EPA Proposes Amendments to Oil and Gas Sector NSPS; Delays Compliance Date

May 9, 2013

On April 12, 2013, EPA announced that it is seeking public comment on its proposal to amend 40 CFR Part 60, Subpart OOOO, the Oil and Natural Gas Sector New Source Performance Standards (“Oil and Gas NSPS”), first published in August, 2012 (78 Fed. Reg. 22126).  Since original publication of the Oil and Gas NSPS, EPA received numerous petitions for reconsideration of various aspects of the rule.  After reviewing the petitions, EPA is granting reconsideration of and proposing amendments to numerous aspects of the Oil and Gas NSPS, primarily those relating to implementation of the rule’s storage vessel emission standards.  EPA has also acknowledged that it included technical errors in the original rule which it is correcting in the proposed amendments. 

Under the Oil and Gas NSPS as originally published, storage vessels were required to meet a 95% reduction of volatile organic compounds (“VOCs”) by October 15, 2013.  In the proposed amendments, however, EPA has suspended the October 15, 2013 compliance date and is, instead, proposing to group storage vessels into two classifications to account for the fact that a sufficient number of control devices – which are necessary to meet the 95% reduction standard – will not be available until 2016.  When developing the Oil and Gas NSPS, EPA greatly underestimated the total number of storage vessels that would be impacted by the rule, believing that the Oil and Gas NSPS would affect roughly 300 storage vessels per year.  Based on information submitted by petitioners seeking reconsideration, EPA now believes that roughly 970 storage vessels per month will need to comply with the Oil and Gas NSPS, and that roughly 20,000 storage vessels were constructed, modified, or reconstructed between August 23, 2011 (the date the Oil and Gas NSPS was proposed) and April 12, 2013.  Under EPA’s proposed amendments, “Group 1” includes all storage vessels that were constructed, modified, or reconstructed between August 23, 2011 and April 12, 2013.  “Group 2” includes all storage vessels that were constructed, modified, or reconstructed after April 12, 2013. 

To comply with the amended rule, Group 1 storage vessels would be required to (1) notify EPA of their existence by October 15, 2013; and (2) meet the 95% reduction standard if an event occurs that will increase their potential to emit VOCs after that date.  On the other hand, Group 2 sources would be required to meet the 95% VOC reduction requirement by April 15, 2014, or within 60 days of startup, whichever is later.  EPA has provided examples of events that have potential to increase the emissions from Group 1 storage vessels, including the fracturing or re-fracturing of a well.  EPA is seeking comment as to whether it should permit owners and operators of Group 1 vessels to have 60 days to meet the 95% VOC reduction standard when the cause of their increased potential to emit is a planned event, such as re-fracturing a well.      

In addition to its proposal to categorize storage vessels into two groups with different compliance obligations, EPA is seeking comments on a number of other issues, including: (1) its proposal to amend the definition of “storage vessel” under the rule; (2) its proposal to amend the definition of “storage vessel affected facility” under the rule; (3) its proposal to include an alternative mass-based standard for extended periods of low uncontrolled emissions; (4) its proposal regarding compliance demonstrations and monitoring of closed-vent systems and control devices for storage vessels; (5) its revisions to protocol for manufacturer testing of enclosed combustors; (6) its proposal to broaden the provision for determining VOC emissions, including the rule’s expansion to all storage vessels, regardless of location; and (7) its proposed amendments to the provisions detailing submission of annual reports and compliance certifications. 

Any party who wishes to comment on EPA’s proposed amendments to the Oil and Gas NSPS must submit comments to EPA by Monday, May 13, 2013.  Please contact Michael Dillon at (484) 386-6161 for more information.