American Oil and Gas Reporter - September 2020 - 28

pages 28-31_Layout 1 9/18/2020 10:18 AM Page 1

Methane Emissions

Two Final Rules Eliminate Obama Regs
WASHINGTON-The U.S. Environmental Protection Agency has completed
its roll-back of Obama-era methane regulations by releasing two final rules it says
will make it simpler and less burdensome
for the oil and gas industry to comply
with New Source Performance Standards.
Importantly, points out the Independent
Petroleum Association of America, the
new regulations exempt marginal wells
from the fugitive emissions requirments,
and also change the regulated emission
from methane back to volatile organic
compounds.
The rules were announced Aug. 13 by
EPA Administrator Andrew Wheeler while
touring Pittsburgh's Energy Innovation
Center.
"These rules will provide relief to
American energy companies by reducing
the massive cost of complying with unnecessary overregulation from the federal
government, allowing them to instead
spend their resources on job creation and
energy development," says Deputy Secretary of Energy Mark W. Menezes, who
joined Wheeler on the tour.
EPA says the regulatory package consists of:
· Final policy amendments to its
2012 and 2016 NSPSs that remove the
rule's transmission and storage segment,
and rescind methane emission standards
for the production and processing segments; and
· Final technical amendments to the
2016 NSPS to simplify compliance, including changes to leak monitoring and
repair schedules, changes to record keeping
and reporting, and changes to incorporate
several states' requirements.
Industry Support
Dan Weaver, president and executive
director of the Pennsylvania Independent
Oil & Gas Association, calls the regulatory
changes a practical mechanism for controlling methane emissions and comments.
"EPA's revised rule will bring particular
relief to small oil and gas producers who
are a vital part of the economy in many
western Pennsylvania counties, and who
must work hard to compete against larger
companies," he assesses.
According to IPAA Senior Vice President Lee Fuller, "These changes retain
the basic framework of emission regulations for oil and natural gas production,
but they modify flawed production provisions, particularly in the 2016 NSPS
28 THE AMERICAN OIL & GAS REPORTER

fugitive emission program (which were)
driven by political pressures to rush those
regulations to completion."
Texas Independent Producers & Royalty Owners Association President Ed
Longanecker says the rules "represent a
more balanced approach, will remove
unnecessary regulatory requirements, save
the industry millions in compliance costs
and strongly support ongoing efforts to
lower U.S. emissions."
He adds, "The previous NSPS was
among the most overreaching regulations
targeting the U.S. oil and gas industry to
be promulgated under the previous administration, without appropriate justification for such policies."
Longanecker cites EPA estimates that
the new rules will save the industry $750
million-$850 million from 2021 to 2030.
American Petroleum Institute Senior
Vice President of Policy Economics and
Regulatory Affairs Frank Macchiarola
says API "supports this revision (because)
it is consistent with the requirements of
the Clean Air Act," despite the fact major
integrated companies such as ExxonMobil,
Royal Dutch Shell and BP PLC lobbied
against the new rules.
Voluntary Reductions
"Under these modified rules, operators still will be required to control
emissions, and the industry continues
to make progress in reducing methane
emissions through new technologies,"
Macchiarola notes.
TIPRO and IPAA both emphasize producers' proactive and quantifiable success
at reducing energy-related emissions
through voluntary actions, sharing of industry best practices, and ongoing initiatives such as the Texas Methane Flaring
Coalition, API's Environmental Partnership, and the Our Nation's Energy (ONE)
Future coalition of producing, gathering,
processing, transmission, storage and distribution companies dedicated to minimizing methane emissions and increasing
natural gas production and throughput.
"In fact, prior to the first EPA NSPS
in 2012, oil and gas producers participated in EPA's Gas STAR program,
which identified and developed costeffective emissions technologies," observes IPAA's Fuller.
Many Gas STAR technologies such
as reduced-emission completions, lowbleed pneumatic controllers and storage
tank vapor recovery were the basis for

EPA's 2012 NSPS, Fuller says, adding,
"The issue for producers never has been
whether regulations were necessary; it
always has been whether the regulations
were sound and cost-effective."
TIPRO's Longanecker points out that
during the past 20 years, the U.S. oil and
gas industry has invested more than $300
billion in greenhouse-gas-mitigating technologies, and has slashed methane emissions 23% since 1990.
Others praising the new rules, published
reports say, include the entire Wyoming
congressional delegation: Republican Senators Mike Enzi and John Barrasso, and
Congresswoman Liz Cheney.
Conversely, U.S. Senator Angus King,
I-Maine, and New Mexico Governor
Michelle Lujan Grisham are among those
condemning EPA, other reports indicate.
On the same day EPA announced its final
rules, U.S. Senators Chris Van Hollen,
D-Md., and Edward Markey, D-Ma., introduced the Natural Gas Blowout Prevention, Oversight and Liability Act,
which Van Hollen says imposes penalties
for natural gas flared or released as a
result of a blowout, and requires companies
to report large-scale releases to EPA
within 72 hours.
Among those promising to challenge
the new rules in court, according to
reports, are the Environmental Defense
Fund, Sierra Club and Earthjustice.
Final Policy Amendments
In a summary of its final policy
amendments to the 2012 and 2016 NSPSs
for the oil and gas industry, EPA notes
the CAA requires it to make a formal
finding that a pollutant contributes significantly to air pollution before setting
NSPS requirements for an industry
source category.
Its original source category listings
for the oil and gas industry in 1979 included only production and processing,
and EPA did not make a formal finding
before issuing its 2012 and 2015 NSPSs,
which then included transmission and
storage. Consequently, EPA says, "The
agency has determined it was not appropriate to include this segment in the 2012
and 2016 amendments."
Emission sources in the transmission
and storage segment include transmission
compressor stations, pneumatic controllers
and underground storage vessels.
Similarly, EPA continues, the 1979
NSPS applied to VOCs, but did not con-



American Oil and Gas Reporter - September 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - September 2020

Contents
American Oil and Gas Reporter - September 2020 - Intro
American Oil and Gas Reporter - September 2020 - 1
American Oil and Gas Reporter - September 2020 - 2
American Oil and Gas Reporter - September 2020 - 3
American Oil and Gas Reporter - September 2020 - 4
American Oil and Gas Reporter - September 2020 - Contents
American Oil and Gas Reporter - September 2020 - 6
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