American Oil and Gas Reporter - December 2021 - 36

quality of the emissions factors, " Fuller
observes. " The Subpart W emissions factors
have a history of creating issues, because
they never were crafted to be a
regulatory tool. The proposal would rely
on a component count approach, but there
are problems with the building blocks. "
Comments from IPAA and its collaborators
offered another reason EPA should
wait for the DOE study, Fuller continues.
" That study breaks out marginal wells in
a variety of ways, " he details. " It considers
whether a well produces crude oil or natural
gas, and then looks at production
levels, starting at zero-one, one-four, foureight
and greater than eight barrels a day
to see whether each has a different emissions
picture.
" Then it looks at the equipment on
site. Is it a wellhead only? Is it a wellhead
and a pumpjack? Is it a wellhead and a
separator, and is there storage? Are all
the pieces in one place? Those questions
inform a component count approach, and
so EPA ought to look at the DOE study. "
Large And Small
According to Fuller, EPA has suggested
it plans to revise the general structure for
the emissions guidelines under CAA Section
111(d), the basis for the Quad Oc
proposals. These rules were modified
during the latter part of Trump administration
when EPA introduced the Affordable
Clean Energy (ACE) Rule.
" The ACE rule was thrown out earlier
this year, " Fuller relates. " When that happened,
Section 111(d) reverted to the
structure under which it was written in
1975. Section 111(d) is structured similar
to the state implementation plan process
in nonattainment areas for criteria pollutants.
The 1975 rules require states to
adopt regulations within 90 days from
the time EPA finishes with them. That
was a different world. Today, all states
have elaborate administrative procedure
rules with comment periods, public hearings
and such. "
Fuller adds that the Biden administration
has expressed a desire to expand the
proposal's scope. " It really wants to
expand on community involvement and
environmental justice issues, which the
1975 structure does not address, " he clarifies.
" That means the administration will
add into this structure how states should
interact with those issues when they develop
their plans. "
He says these revised Section 111(d)
requirements would be completed in 2022
prior to the revised NSPS/emissions guidelines
methane emissions proposal and
used for the finalization of the methane
emissions guidelines.
Media accounts estimate that the
methane proposal will place about a million
new and existing wells under EPA
air quality requirements. Industry reactions
to EPA's proposal have varied.
" IPAA is a large tent, " Fuller acknowledges.
" Because larger producers drill the
most wells, they have the most new and
modified sources and have been affected
the most by EPA and state regulations.
They already have been putting in lowbleed
pneumatic controllers, and they are
trying nonpneumatic controllers or moving
to compressed air systems. They are implementing
leak detection and repair programs-which
are more cost-effective for
projects that include a larger pool of wells-
and putting vapor recovery on their tanks. "
Because smaller operators typically
deal with existing sources, EPA methane
regulations have not touched their operations
as much, Fuller notes. " Where smaller
operators have dealt with regulatory
efforts, they have been triggered by states, "
he contrasts. " Some states have fairly
aggressive activities, but most tend to
have a threshold that limits what must be
done for low-production wells, though
they may focus on source tanks and specific
equipment. Now, everybody is going
to be under this regulatory package. "
States to which EPA has delegated
authority will continue to oversee existing
sources, Fuller says. " Texas, for instance,
would be the direct regulator with state
rules for the existing sources that will
come out once the federal guidelines
are finalized, " he describes. " In a sense,
EPA is creating model regulations, much
like it did for control technique guidelines
for VOCs back in 2016. States can deviate
from the model regulations, but
they have to convince EPA their approach
is equivalent.
" Then you get to the issue of states'
flexibility to deal with the useful life of
existing facilities and what that may mean
in terms of particularly small wells, "
Fuller adds.
❒
Infrastructure Passes, Spending Waits
By Del Torkelson
WASHINGTON-Mid-November saw
Congress pass and President Biden sign
H.R. 3684, the $1 trillion " Infrastructure
Investment and Jobs Act. " About a week
later, the U.S. House of Representatives
passed a $2 trillion spending package
that Capitol Hill observers insisted would
only become law if it picked up more
favor in the Senate.
Both bills contain provisions that pertain
directly to oil and gas.
The spending bill, which had not seen
the Senate floor by late November, included
steeper fees for development on
federal lands and waters, as well as higher
royalty rates for those wells. However,
the most prominent language for U.S. oil
and gas producers introduced a methane
" fee " that many said better met the definition
of a tax.
In contrast, the infrastructure bill that
36 THE AMERICAN OIL & GAS REPORTER
President Biden signed into law on Nov.
16 contained the Revive Economic Growth
and Reclaim Orphaned Wells (REGROW)
Act of 2021, which had the support of
numerous independent oil and gas groups.
Moreover, some analysts indicate, H.R.
3684's overarching purpose points to energy
demand growth. In one example,
press accounts quote Rystad Energy Senior
Market Analyst Louise Dickson as describing
the legislation as " a super-spending
initiative, which will definitely help
oil demand growth. " She reiterated that
" this U.S. infrastructure bill screams 'bullish'
for oil. "
Orphaned Wells
The Independent Petroleum Association
of America notes that by incorporating
the REGROW Act, the infrastructure bill
will provide:
· $4.28 billion for orphaned well
cleanup on state and private lands;
· $400 million for orphan well
cleanup on public and tribal lands; and
· $32 million for related research,
development and implementation.
According to Lee Fuller, officer-environment
and general strategy for IPAA,
the REGROW provision constitutes the
most significant piece in the new law
with direct import for U.S. independent
producers. " We worked hard with state
regulators to make the orphan well program
a reality, " he says.
He recalls that the concept behind the
provision surfaced in Congress as an idea
in early 2020 as part of the country's
initial response to the COVID-19 pandemic.
Although the language failed to
find its way into any successful COVID
legislation, Fuller notes that the bill's
backers knew they were onto a good idea
and resolved to keep pushing it.
" There was a lot of activity in 2020,
where we worked with state regulators
American Oil and Gas Reporter - December 2021

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