American Oil and Gas Reporter - July 2017 - 30

Federal Update

Executive Agencies Slow Regulations
WASHINGTON-The Trump administration's assault on Obama-era energy
regulations largely moved to the agency
level in June as both the Environmental
Protection Agency and Department of
Interior announced rollback initiatives,
although the White House did provide
one significant announcement when the
president told a Rose Garden audience
he was withdrawing the United States
from the 2015 Paris Climate Accord.
EPA said it would stay enforcement
of portions of the New Source Performance
Standards for fugitive emissions of
methane, volatile organic compounds and
other air pollutants from oil and gas
sources while it reconsidered the regulations finalized in June 2016, and DOI
said it was postponing indefinitely compliance requirements for key parts of its
methane venting and flaring rules.
DOI Secretary Ryan Zinke also signed
secretarial orders directing the agency to
revisit its 2015 sage grouse land use
plans, as well as to jump-start Alaskan
energy development. And EPA Administrator Scott Pruitt advised states that he
was extending the deadline for making
compliance designations under the 70
parts-per-billion National Ambient Air
Quality Standard for ozone promulgated
in October 2015.

Methane NSPS
On April 19, EPA had announced its
intention to postpone the June 3, 2017,
effective date of its 2016 methane NSPS
for oil and gas sources under Subpart
OOOOa (AOGR, May 2017, pg. 29). On
June 5, the agency published official
notice of the stay in the Federal Register.
According to association reports, the
notice also indicated EPA would reconsider the rule's:
* Leak detection and repair requirements for low-volume wells;
* Standards for pneumatic pumps at
well sites;
* Process and criteria for requesting
and receiving approval to use alternative
means of limiting emissions; and
* Requirements that closed-vent systems be certified by a professional engineer.
EPA followed that by announcing on
June 13 it was proposing to stay the fugitive emissions, pneumatic pump and professional engineer certification requirements for two years "while the agency
reconsiders issues associated with these
requirements."
30 THE AMERICAN OIL & GAS REPORTER

"Under the proposal, sources would
not need to comply with these requirements while the stay is in effect," according
to an agency press release.
On June 6, the Clean Air Council,
Earthworks, Environmental Defense Fund,
Environmental Integrity Project, Natural
Resources Defense Council and the Sierra
Club petitioned the U.S. Court of Appeals
for the District of Columbia Circuit to
block EPA's stay, according to an NRDC
statement, contending EPA failed to provide sufficient notice of the stay or an
opportunity for public comment.
The Texas Independent Producers &
Royalty Owners Association reports it
and a number of other associations filed
a motion to intervene in the environmental
group's lawsuit on June 14. "TIPRO remains committed to repealing overbearing
methane regulations and fighting related
efforts by environmental activist groups
in the courts," vows President Ed Longanecker.
TIPRO notes that it, along with the
Independent Petroleum Association of
America and other oil and gas associations
are parties to lawsuits challenging the
methane rules pending in the D.C. Circuit.
The association also points out that a
study published in May in the journal Environmental Science & Technology indicates
EPA may have relied on inflated emission
estimates to justify the 2016 methane
NSPS. "The ground-breaking report, whose
lead author is a researcher from the National
Oceanic & Atmospheric Administration,
found that previous high emission estimates
were based on measurements taken during
peak events, and did not necessarily reflect
average emission rates," TIPRO says,
adding that report may be found at
http://pubs.acs.org/doi/abs/10.1021/acs.est.7
b01810.
Venting And Flaring Rule
DOI's Bureau of Land Management
published its notice that the agency would
postpone indefinitely compliance requirements for key parts of its venting and
flaring regulations in the June 15 Federal
Register, TIPRO continues.
The Waste Prevention, Production Subject to Royalties and Resource Conservation Rule, which was finalized in November 2016, requires producers to reduce
by half methane flared from wells on
public and tribal lands (AOGR, December
2016, pg. 32). Under the rule, operators
also must periodically inspect their facilities

for leaks and replace equipment that vents
large quantities of gas.
Other parts of the rule require limited
venting from storage tanks and the use
of best practices to limit gas losses when
removing liquids from wells.
IPAA and the Western Energy Alliance,
as well as a number of states, challenged
the waste prevention rule in the U.S. District Court for Wyoming, and in its notice,
BLM acknowledged that "while (it) believes the rule was promulgated properly,
the petitioners have raised serious questions
concerning the validity of certain provisions. Given this legal uncertainty, operators should not be required to expend
substantial time and resources to comply
with regulatory requirements that may
prove short lived."
Western Energy Alliance President
Kathleen Sgamma praises both EPA and
DOI "for listening to the concerns of
companies."
"Both rules vastly exceeded federal
authority," Sgamma contends. "In the
case of the BLM rule, the bureau tried to
assume authority that resides with the
states and EPA to regulate air quality. In
the case of the EPA rule, the agency attempted to regulate methane without conducting a methane endangerment finding
as required by the Clean Air Act. The
Trump administration is correcting that
overreach from the prior administration,
thereby saving jobs and supporting American energy independence."
American Petroleum Institute Upstream
and Industry Operations Group Director
Erik Milito mentions that an analysis
done by Environmental Resources Management finds the cost of complying with
BLM's rule may render uneconomic up
to 40 percent of wells that flare on federal
lands.
"Based on 2016 royalties reported by
the federal Office of Natural Resources
Revenue, even a 1 percent loss of royalties
would result in lost government revenues
of more than $14 million," Milito adds.
According to published reports, in testimony on the Trump administration's
proposed fiscal 2018 budget before the
Senate Energy and Natural Resources
Committee on June 20, Secretary Zinke
responded to a question about how DOI
intended to rewrite the waste prevention
rule by saying, "As a public steward, I
think it's wasteful to flare, but you have
to give incentives to make sure there are
capture systems and that (the gas) can be
used for beneficial (purposes). It's better
http://pubs.acs.org/doi/abs/10.1021/acs.est.7b01810 http://pubs.acs.org/doi/abs/10.1021/acs.est.7b01810
American Oil and Gas Reporter - July 2017

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