American Oil and Gas Reporter - June 2016 - 37

"EPA has made some room to allow for
additional approaches," Reeves acknowledges, "but it is requiring a lot of documentation to justify them."
Then there are OOOOa's frequency requirements. EPA notes it initially proposed
semi-annual LDAR inspections for some
midstream facilities, but the final rule doubles to quarterly. The twice-a-year schedule remains unchanged for upstream sites,
Fuller observes, but he contends even that
probably is overkill.
"The experience with state LDAR
programs indicates that once the emissions' fat tail is corrected, it basically stays
corrected for a long time, so aggressive
measurement cycles really are not justified," he reveals. "My own view is that,
over time, industry will understand the pattern of fugitive emissions, learn which
seals are more likely to be a problem, and
correct those."
Fuller goes on to say the fact that
OOOOa does not track any state programs
also may discourage innovation. "Once the
NSPS is finalized, it remains until after the
minimum eight-year cycle, so that technology becomes the framework for that period at least," he describes. "That will suppress development of other technologies."
And since OOOOa does not mirror any
state programs, Reeves counsels against

complacency for operators already complying with a state program. "Implementing LDAR may sound simple, but the
record-keeping and data management aspects should not be underestimated. I worry for people in states that already have
these kinds of programs," she relates.
"They may think they have it covered, but
they may find before the report deadline
that records are in some way lacking. A
rule like this is all about the records."
Even if EPA's rules do not mimic any
state rules, California Independent Petroleum Association Chief Executive Officer
Rock Zierman has expressed hope that the
standards can at least harmonize. "The key
will be how the federal rules come into
play with California's already strict regulations for air quality, not only at the state
level, but at the local level as well," he told
local media.
Define Adjacent
Fuller says a cursory examination of
EPA's final rule for defining adjacency for
the purpose of source determination suggests it may prove workable. "It does not
use the interrelationship test, which was
a significant concern," he lauds. "Where
EPA has used the noncontiguous approach to adjacency by referencing a distance from something that already exists,
it sets it at a quarter-mile and links that not

only to common control, but common
equipment."
He acknowledges IPAA thinks adjacency actually should require contiguous facilities as well as common control, but says
EPA's standard seems feasible. "A few
states also use the quarter-mile test,"
Fuller observes. "In my first read, EPA
seems to say it is a matter of two facilities
under common control within a quarter of
a mile, with common equipment that affects air quality."
Reeves concurs that the concept, on its
surface, seems somewhat reasonable.
"EPA generally rejected functional interrelatedness as proposed, and replaced
that with 'shared equipment,' which is as
decent as we could expect," she evaluates.
"The challenge will be that EPA made
these changes optional, so states will differ in how, or if, they choose to adopt these
rules."
Expanding on that, she points to page
12 of the rule's 48-page preamble, which
states, "We are making the meaning of 'adjacent' adopted in this rule mandatory only
for the permit programs administered by
the EPA or delegated states, while leaving
to other states the decision whether to
make a similar change to their approved
permitting."
Reeves admits her interpretation may
be fallible, but says, "I think this means

Methane Inventory Flawed, API Says
WASHINGTON-The latest greenhouse gas inventory issued by the U.S.
Environmental Protection Agency contains significant errors, and is inconsistent with the agency's earlier reports as
well as other scientific research, says the
American Petroleum Institute.
"While we are still reviewing the latest figures and methodology, it's clear that
EPA's report is fundamentally flawed. We
are concerned the administration is putting politics ahead of science by turning
the numbers on their heads. It is a major
shift from prior models," says Kyle
Isakower, API's vice president of regulatory and economic policy.
EPA's latest GHG inventory says the
oil and gas sector accounts for a third of
total U.S. methane emissions. The agency
issued revised inventory totals for the past
several years, calculating 2013 methane
emissions at 721.5 million metric tons of
carbon dioxide equivalent, up from its
original estimate of 636.3 million metric
tons.
According to Isakower, EPA's GHG

inventory consistently had shown a downward trend in emissions, even as domestic oil and natural gas production increased. The 2015 inventory documented an 11.0 percent drop since 2005, but
Isakower indicates EPA's flawed new
methodology erases that progress in this
year's inventory. The agency's 2016 calculation shows a 0.68 percent decline
from 2005.
"This dramatic change should raise
eyebrows. And it goes against leading science that shows fossil fuel methane
emissions are not increasing, even as U.S.
energy production has risen dramatically in the last decade," he says.
A study by the National Oceanic and
Atmospheric Administration analyzing
fossil fuel production since 2007 concluded that increased emissions originated in
other sources (AOGR, April 2016, pg. 32).
Since 2000, domestic oil and gas industry investments in green completion
technologies, including zero- and low-carbon completions, total $90 billion, more
than twice the next largest industry sec-

tor, and nearly as much as the federal government's, Isakower says.
"EPA's prior estimates reflect these investments and the industry's leadership
in reducing methane and other emissions,"
he says. "It doesn't make sense that all of
a sudden those reductions would stop. Yet,
that is what EPA's new figures suggest.
API thinks these new figures are off, and
are not an accurate reflection of science
or reality."
Without justification, EPA assumes operations at large wells may be extrapolated to those at smaller wells, Isakower
says. He adds that producers have every
incentive to capture and sell methane.
"Rather than acknowledging this success and working to ensure market-driven environmental progress continues,
this administration is pushing for new
government policies that ignore market-based solutions in favor of duplicative regulations that threaten to undermine
not only our economy, but our success in
reducing emissions," he says.
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JUNE 2016 37

American Oil and Gas Reporter - June 2016

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