Update — EPA issues final New Source Performance Standards for Oil and Gas with significant new compliance requirements

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On June 3, 2016, U.S. Environmental Protection Agency (EPA) finalized amendments to the Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution (Quad O) and a new subpart at 40 CFR 5360a et seq. (Quad Oa) for post-September 18, 2015, affected facilities. As noted in a previous CEC blog on this topic, U.S. EPA received nearly one million comments following the initial proposal. The new Quad Oa rule establishes emission standards for both methane and volatile organic compounds (VOC) at natural gas and oil well sites, production gathering and boosting stations, natural gas processing plants, and compressor stations. There are several new requirements for oil and natural gas production-related activities in these new federal rules, and it is important to understand how these rules might impact ongoing compliance activities under existing state rules and permit requirements already in effect. In this update, we focus on two of these new requirements due to their history and interrelatedness.

It is clear in reading both the proposed and final rules that U.S. EPA has expanded its understanding of oil and natural gas operations, particularly with respect to upstream E&P. Notably, the requirement for a professional engineer (PE) to evaluate and certify closed vent system design brings a new level of scrutiny borne out of a consent decree with a major oil and gas producer, and placed into practice in both the September 2015 Compliance Alert and the ongoing enforcement initiative targeting “energy extraction activities.” Not only is this new requirement intended to bring industry resources to bear on what the Agency views as a significant issue, but it also attaches professional liability to any subsequent violations attributed to closed vent system design. Further, with additional attention being focused on closed vent system design, the next obvious move on the Agency’s part was either construction practices (which are in many cases guided by industry consensus standards) or the operator’s preventative maintenance program.

From an air pollution control perspective, one focus of an upstream E&P maintenance program is to minimize or eliminate fugitive emissions from production facility equipment. As addressed by the industry during the comment period, there is an economic incentive to minimize losses of otherwise saleable products. Rather than dictate the contents of a preventative maintenance program, the Agency has instead required operators to survey for and repair fugitive emissions at well sites. While not a maintenance program per se, the new rule will require operators to engage in some routine maintenance and communication planning to ensure that fugitive leaks discovered during a survey are repaired and verified within the allotted timeframe.

Many producers operating in the Utica and Marcellus plays already had some form of fugitive emissions survey requirements in effect, as does Colorado. In other states, this will be the first time operators will have to grapple with leak detection and repair programs. This new requirement will have a disparate impact on upstream E&P operators that do not have the resources to employ full-time environmental staff or purchase the equipment needed to perform these required fugitive leak surveys in-house.

A summary of the new requirements discussed above is provided here. In the meantime, if you have questions on any aspects of the NSPS for the oil and natural gas source category, please contact the post authors: John McGreevy (jmcgreevy@cecinc.com), Kris Macoskey (kmacoskey@cecinc.com), or Ben Blasingame (bblasingame@cecinc.com).

For those interested in exploring this topic further:

Final NSPS OOOO and OOOOa rule from the Federal Register

http://www.ecfr.gov/cgi-bin/text-idx?SID=9ba826583925d770787ebc6558d2c418&mc=true&node=20160603y1.84a

U.S. EPA National Enforcement Initiatives

https://www.epa.gov/enforcement/national-enforcement-initiatives

CEC’s previous blog: EPA Receives Nearly One Million Comments on Proposed New Source Performance Standards for Oil and Gas

https://blog.cecinc.com/2016/04/07/epa-receives-nearly-one-million-comments-on-proposed-new-source-performance-standards-for-oil-and-gas/

U.S. EPA Proposes an Information Collection Request for the Oil and Natural Gas Industry

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On June 3, 2016, U.S. Environmental Protection Agency (EPA) published a proposed Information Collection Request (ICR) for the oil and natural gas industry in the Federal Register for notice and comment. Once the comment period ends and EPA provides responses to all significant comments, the amended proposal will be sent to the Office of Management and Budget (OMB) for review and approval. If approved, and U.S. EPA is issued a valid OMB control number, U.S. EPA would begin collecting information from oil and natural gas companies. The Agency envisions the collection process to begin in October 2016.

The purpose of the ICR is to collect detailed information to support regulation of existing oil and natural gas stationary sources. This is in contrast with recent regulatory efforts, which have focused (primarily) on new or modified sources. The information from the proposed ICR will be used to develop a pathway for the phase-in of new standards, rather than making those standards become effective for all affected sources at once.

Based on the proposal, the ICR will be divided into two parts. The first part will be sent to all oil and natural gas operators and requires information with respect to the company and its operations. The second part requires more detailed information with respect to specific sources and could involve a significant time investment from environmental and operations teams to complete. In addition, the second part of the ICR may require information that many organizations would consider confidential. Companies with confidentiality concerns may want to involve their legal teams in this process.

Also, keep in mind that this ICR will be issued under U.S. EPA’s authority under Section 114 of the Clean Air Act. This means that the Agency has the legal authority to require all responses to the ICR be certified by a responsible official and establish a deadline for providing a response.

For those interested in reading more about the proposed ICR, the U.S. EPA has a dedicated website here. Civil & Environmental Consultants, Inc. will be following the ICR approval process closely, and plans on updating this post as events unfold. In the meantime, if you have any questions with respect to the ICR or other recent federal air pollution regulatory activity, please contact John McGreevy at 888-598-6808 or jmcgreevy@cecinc.com.

EPA Receives Nearly One Million Comments on Proposed New Source Performance Standards for Oil and Gas

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On September 18, 2015, the U.S. EPA proposed amendments to the Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution (Quad O) and a new subpart at 40 CFR 5360a et seq. (Quad Oa) for post-September 18, 2015, affected facilities. By the end of the comment period in December, U.S. EPA had received nearly one million comments. The proposed Quad Oa sets standards for both methane and volatile organic compounds (VOC) at natural gas and oil well sites, production gathering and boosting stations, natural gas processing plants, and natural gas compressor stations. In this blog, CEC focuses on the Quad Oa requirements for natural gas and oil well sites.

Quad Oa establishes the following requirements and definitions for fugitive equipment leaks:

  • For the first time, operators of well sites will be required to control fugitive methane and VOC emissions.
  • A fugitive emission is defined as “any visible emission from a fugitive emissions component observed using optical gas imaging.”
  • A “fugitive emission component” is essentially any component that could leak methane or VOC.
  • A leak detection and repair (LDAR) plan that includes a site map and a defined walking path for monitoring surveys will be required.
  • An initial monitoring survey must be conducted within 30 days of the first well completion or modification.
  • Following the initial survey, the LDAR monitoring frequency will be performance-based, meaning that the sites with a higher percentage of leaks will have to monitor more frequently than other sites.
  • Each leak must be repaired or replaced within 15 calendar days unless doing so is technically infeasible or unsafe.
  • Operators may resurvey the repaired leak with either Method 21 or optical gas imaging (OGI). The leak is repaired when the Method 21 reading indicates < 500 ppm above background or OGI shows no leak.
  • Operators must maintain records specific to each monitoring survey.

These new fugitive emission requirements generated a huge volume of comments. On review of comments from trade organizations including American Petroleum Institute (API), Gas Processors Association (GPA), Interstate Natural Gas Association of America (INGAA), Independent Petroleum Association of America (IPAA), and Pennsylvania Independent Oil and Gas Association (PIOGA), we found that the majority fall into four general categories, as summarized below.

1. Leak Detection Methodology
The trade organizations stated that EPA should not dictate a specific technology for detecting leaks and that EPA should allow for any of the six or more other technologies or techniques, rather than requiring the use of OGI for leak detection. The trade organizations caution that the motivation to innovate these technologies will be greatly reduced if the rule precludes other methods from being used to detect leaks. As such, many commenters stated that the final rule should allow flexibility for leak detection including Method 21 and other future EPA-approved technologies.

2. Monitoring Frequency
The majority of the trade organizations are opposed to performance-based monitoring frequencies. The primary concern with such programs is that they oblige the operator to count and tag every component so that percentages of leaking components can be calculated. Industry’s perspective is that due to economics and safety concerns, the incentive to repair leaks is present regardless of a performance-based monitoring frequency. The potential for different facilities being monitored at different frequencies is expected to significantly complicate recordkeeping requirements without significantly improving the results. In addition to being a burdensome and costly requirement, commenters pointed out that EPA’s assumed fugitive emission reduction rates for inspection frequencies are not supported by well-documented data. Rather than performance-based monitoring, the trade organizations generally agree that LDAR monitoring should occur at a fixed annual frequency.

3. Focus on Gross Emitters
In the preamble to the rule, EPA references studies that demonstrate a majority of leaks from this industry (more than 80 percent in one study) come from a small segment of sources referred to as “gross emitters.” The EPA requested comment on a program focused on these “gross emitters.” The trade organizations are in agreement that the proposed rule should focus on emissions from these sources (such as thief hatches on condensate storage tanks) and not on the trivial leaks that can be detected by OGI. By drawing attention to these large potential sources, EPA enabled industry to point out the irrelevance of performance-based LDAR programs that would effectively equate a single super-emitter with an insignificant valve leak when determining the percentage of leaking components.

4. Initial Monitoring Timing
All of the trade organizations’ comments reviewed by CEC indicated their disapproval of the requirement that an initial monitoring survey be performed within 30 days. API pointed out that within the first 30 days of startup, extra temporary equipment will be on site. GPA discussed that the first 30 days after startup is a frenetic time when temporary construction staff and heavy equipment are on site. GPA and INGAA identified the discrepancy between the proposed Quad Oa and other existing rules for other industries. GPA pointed out that EPA allows for a 180-day initial startup window for fugitive emission monitoring in the synthetic organic chemicals manufacturing industry under NSPS subpart VV and VVa. INGAA stated that MACT standards at 40 CFR 63 subparts JJJ, KKKK, and ZZZZ allow 180 days or longer to complete the initial performance test. The degree of the extensions for the initial survey varied: IPAA and PIOGA requested a 60-day window while API, GPA, and INGAA requested 180 days.

CEC estimates that hundreds of comments are focused on these four topics alone. In addition to these four issues, other topics included:

  • inconsistencies between existing state programs and the proposed federal rule,
  • flawed aspects with the EPA’s cost-benefit analysis,
  • a request for an expansion of available exemptions, and
  • the need for additional definitions and clarifications.

For those interested in exploring the comments, they can be found at the following link to the main docket of the proposed rule: https://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2010-0505-4776

The EPA anticipated being finished with their review of the comments by the spring of 2016. CEC will be following the final rule development closely. In the meantime, if you have questions on any aspects of the NSPS for the oil and natural gas source category, please contact the post authors, Ben Blasingame (bblasingame@cecinc.com) or Kris Macoskey (kmacoskey@cecinc.com). Both individuals can also be reached at 800-365-2324.

REVISION TO MINIMUM STANDARD DETAIL REQUIREMENTS FOR ALTA/NSPS LAND TITLE SURVEYS

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American Land Title Association® (ALTA®) and the National Society of Professional Surveyors (NSPS) have released the 2016 revision of the Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, effective date February 23, 2016. (The NSPS is the legal successor organization to the American Congress on Surveying and Mapping (ACSM).) This new version has replaced the 2011 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys.

The official redline edits to the 2011 standards are available for viewing. The redline edits formed the 2016 revision. To help you interpret the redline edits, CEC provides a marginal notation within this PDF for your convenience.

It is anticipated that the 2016 revised standards will resolve past questions and communication issues that have occurred between surveyors, title companies, clients, and lenders. As with all previous versions, the standards of the state in which the property is located may require additional items. To view the 2016 revised standards in their finalized version, click here.

Changes to Table A, Optional Survey Responsibilities and Specifications

The 2016 version will revise and clarify a number of items in Table A, Optional Survey Responsibilities and Specifications. These are the aspects that directly affect the processes of the survey companies you might engage to perform the work. Highlights of the revisions include:

  • A zoning report (Item 6) must be provided by the client before the surveyor can list or identify setback requirements, height and floor space restrictions, and parking requirements. As long as the zoning restrictions do not require interpretation by the surveyor, the surveyor will graphically show building setback requirements.
  • Parking striping (Item 9) has been clarified to specifically identify disabled spaces.
  • The 2011 standards gave two options for the location of utilities: by observed evidence (11a) and by observed evidence together with evidence of provided plans and markings combined to develop a view of the underground utilities (11b). For the 2016 standards, option 11a has been eliminated, and 11b is now identified as Item 11. Therefore, if selected, this option will require underground utilities to be depicted on the survey. It is further clarified that underground utilities shown on the survey must be considered approximate and may be incomplete as a result of the lack of response from the One Call Notification and should be noted accordingly. Since the depiction of underground utilities is now required under this option, the opening of manhole structures may be necessary to confirm underground connections in some cases.
  • The use of property (formerly Item 18) as a solid waste dump, sump, or sanitary landfill has been removed.
  • The location of wetlands (formerly Item 19, now Item 18) has been clarified to “a field delineation of wetlands conducted by a qualified specialist hired by the client.”
  • Setting survey monuments for off-site easements (formerly Item 20b) that may benefit the surveyed property has been eliminated.

A copy of the new 2016 Table A, Optional Survey Responsibilities and Specifications is provided here.

If you have any questions or would like further interpretation on any of the 2016 revisions to the ALTA survey requirements, please contact the authors, Jim Bruggeman (jbruggeman@cecinc.com) or Evan Baker (ebaker@cecinc.com), both of whom can also be reached at (800) 365-2324, or Jeff Miller, Survey practice lead, at jmiller@cecinc.com; (888) 598-6808 ext. 3339.

Pennsylvania DCNR to Roll Out Enhanced, Fee-based Environmental Review Tool

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The Pennsylvania Department of Conservation and Natural Resources (DCNR) is preparing to roll out an enhanced Environmental Review Tool. The existing tool is widely used by companies and organizations to screen development projects for potential impacts to threatened, endangered, and special concern species and resources in Pennsylvania. Though an exact roll-out date has yet to be announced by DCNR, the most apparent changes in the new tool will be enhanced mapping capabilities and a $40 online credit-card-only fee to be paid before an Environmental Review Receipt is issued. Pennsylvania Natural Diversity Inventory (PNDI) Environmental Review Receipts are required prior to obtaining permits from the Pennsylvania Department of Environmental Protection and the U.S. Army Corps of Engineers. The tool includes databases from three state agencies (DCNR, the Pennsylvania Game Commission, and the Pennsylvania Fish and Boat Commission) and one federal agency (the U.S. Fish and Wildlife Service).

The new tool, called the Pennsylvania Conservation Explorer, will replace the existing PNDI Environmental Review Tool, which has been free-of-charge since its launch in 2005. The Pennsylvania Conservation Explorer combines a new Conservation Planning Tool designed to help avoid impacts during project planning stages with a more robust Environmental Review Tool for formally requesting an Environmental Review Receipt. The new tool also has the ability to serve as a digital hub for revising project boundaries and communicating with DCNR. (The Pennsylvania Fish and Boat Commission, Pennsylvania Game Commission, and U.S. Fish and Wildlife Service may not fully support this functionality.)

Users of the Pennsylvania Conservation Explorer will notice several new features:

  • The ability to screen possible project locations for potential environmental impacts without submitting the project locations for review
  • The ability to create, revise, and save projects independent of submitting them for review
  • The ability to revise submitted projects without resubmitting

The new Conservation Planning Tool provides greater access to conservation and species habitat information and allows users to view sensitive ecological areas and, in some cases, protected species habitats, which should make it easier to identify and potentially avoid sensitive areas. This feature could potentially save time and money by allowing the user to avoid impacts, thus reducing or eliminating the need for correspondence with regulatory agencies. The Conservation Planning Tool may be used without registering or logging in to the Pennsylvania Conservation Explorer website.

The enhanced Environmental Review Tool is more robust than the existing tool and allows users to upload project shape files in addition to drawing project boundaries on-screen. Project boundaries may also be revised without creating a new project search and incurring an additional fee. Additional drawing tools allow a user to edit, crop, and exclude areas—essentially allowing the inclusion of more than one area for a project, a nice upgrade from the previous version. The tool also displays the project buffer area based on the project type.

Digital hub functionality will be available through the My Project feature of the Pennsylvania Conservation Explorer. All correspondence, data, reporting, and project revisions (up to 10 MB in size) can be sent to DCNR through this feature by uploading most common file formats, including doc, jpg, png, text, pdf, ppt, ods, xls, kmz, and kml; however, this feature will be available only to the creator of the project in the Pennsylvania Conservation Explorer. This feature will not be available if a second or third party will be providing project documentation, as project sharing is not expected to be included in the initial release of the tool. In these cases, project information must be provided to the project creator for submission through the tool, or it may be provided outside the tool, as it is now. Users may also choose to submit information via mail or complete an entirely offline review, which would require separate communication and coordination with individual regulatory agencies.

If you have questions about the new Pennsylvania Conservation Explorer tool, please contact the post author, David Quatchak (dquatchak@cecinc.com), or Dan Maltese (dmaltese@cecinc.com), co-lead of the PNDI workgroup for the Marcellus Shale Coalition’s Surface Use Committee. Both individuals can also be reached at 800-365-2324.

Northern Long-Eared Bat Final 4(d) Rule Announced

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On January 14th, 2016, the United States Fish and Wildlife Service (USFWS) published a final 4(d) rule for the federally threatened northern long-eared bat (Myotis septentrionalis). The final rule lifts the Endangered Species Act’s (ESA) “prohibition against incidental take.” As a result, all otherwise-legal activities related to tree clearing are exempt from the prohibition outlined in the ESA, except:

  • Tree clearing within 0.25 mile of known hibernacula
  • Tree clearing within 150 feet of a known maternity roost (i.e., a tree used by reproductive females to raise their young) between June 1 and July 31

If these exceptions cannot be avoided by project impacts, a project proponent will need to coordinate with the local USFWS office. The USFWS’s final 4(d) rule recognizes the fact that declines in northern long-eared bat populations are primarily attributable to White-Nose Syndrome (WNS), a fungal disease decimating bat populations, and not from direct take associated with the clearing of forested habitat. While this provides relief for some, it is important to note that take prohibitions of federally endangered Indiana bats (Myotis sodalis) are more stringent and remain in place. The two species’ geographic ranges greatly overlap. Additionally, state agencies have yet to officially weigh in on the final 4(d) rule and whether they will require additional conservation measures for the species.

The entire final 4(d) rule can be found here: https://www.federalregister.gov/articles/2016/01/14/2016-00617/endangered-and-threatened-wildlife-and-plants-4d-rule-for-the-northern-long-eared-bat.

For perspective, northern long-eared bats were listed as federally threatened with an interim 4(d) rule in April 2015. The interim rule allowed certain activities requiring tree clearing to be exempted from the ESA’s “prohibition against incidental take.” Similar to Indiana bats, northern long-eared bats raise their young each summer in trees within forested habitat. Northern long-eared bats range across 39 U.S. states and portions of Canada, which is the largest range of any federally listed species. Each winter, these bats hibernate in the region’s caves and mines (called ‘hibernacula’). WNS was first discovered near Albany, New York, in 2006 and has quickly spread across the eastern United States and Canada. The disease, which is not harmful to humans, causes bats to quickly burn through their fat reserves during the winter hibernation period. Affected animals emerge from hibernacula, depleted of their stored body fat, to a cold and snowy landscape devoid of insects, their sole food source. Mortality as a result of WNS is estimated to range from 90 to 100% at most hibernacula.

If you have any questions about the final 4(d) rule, please contact Ryan Slack at rslack@cecinc.com or 317-655-7777.

TSCA Chemical Data Reporting (CDR) – 2016 Requirements

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The next submission period for the U.S. EPA’s Chemical Data Reporting (CDR) requirement under the Toxic Substances Control Act (TSCA) is from June 1, 2016, through September 30, 2016, and will cover the 2012 – 2015 reporting years.  The previous CDR submission was in 2012 for the 2010 and 2011 reporting years.

Manufacturers and importers of TSCA inventory-listed chemical substances that exceed either the reduced reporting threshold (2,500 lbs/yr for certain chemical-specific TSCA Actions) or the standard reporting threshold (25,000 lbs/yr for all other listed chemicals) for any calendar year from 2012 through 2015 must prepare a CDR for each chemical exceeding the respective thresholds and submit to U.S. EPA.  Note that a CDR must be submitted covering all four reporting years if a facility exceeds an applicable threshold in any year.

For chemicals that are imported to the U.S., note that only the primary importer of a chemical (generally the entity responsible for payment of import tariffs) has the TSCA CDR responsibilities.  A facility that purchases an imported chemical from the primary importer (or other down-stream entity) is not responsible for preparation of a TSCA CDR for that chemical.

The report must be filed electronically using the U.S. EPA’s Central Data Exchange (CDX) and must include production quantities for calendar years 2012, 2013, 2014 and 2015, as well as the following information for 2015:

  • Manufacturing Related Data
    • Chemical ID,
    • Production quantity,
    • Number of workers on site who are likely to be exposed to the chemical,
    • Maximum concentration, and
    • Physical forms and relative production of each form.
  • Processing Related Data
    • Types of processes / use (up to 10),
    • Sectors,
    • Industrial function categories,
    • Percent of production,
    • Number of sites, and
    • Number of workers off site who are likely to be exposed to the chemical.
  • Consumer and Commercial Use Related Data
    • Product categories,
    • Sectors,
    • Whether the product is intended for use by children,
    • Percent of production,
    • Concentration range, and
    • Number of commercial workers who are likely to be exposed to the chemical.

For the 2016 submission, calendar year 2015 is the principal reporting year, which requires the presentation of enhanced manufacturing / processing and use data.

Whether a chemical substance is covered or not covered by TSCA can be determined by searching the U.S. EPA’s Substance Registry Services (SRS) web page.

Note that the current TSCA list includes more than 60,000 chemicals.

Chemicals applicable to CDR submission are identified as “TSCA Inv” in the chemical-specific search tables.

Common chemical substances (by industry sector) included on the TSCA inventory that may be subject to CDR requirements include:

  • Primary Metals – Steel, Slag, Baghouse Dust, Copper, Zinc, Manganese and Chromium;
  • Secondary Metals – Mill Scale, Zinc Oxide and Ferro Manganese;
  • Aggregates – Lime, Hydrated Lime, Bentonite and Kaolin;
  • Power – Coal Ash;
  • Paper – Secondary Treatment Sludge;
  • Refineries – Gasoline and Diesel Fuel;
  • Industrial Gases – Hydrogen, Oxygen, and Nitrogen; and
  • Miscellaneous – Glass, Tanning Waste and Cement.

TSCA includes a number of important exemptions from CDR reporting, including:

  • Byproducts that are disposed (i.e., not released to commerce) need not be reported;
  • A chemical present as an impurity (unintentionally present in another chemical substance) is exempt from reporting;
  • Polymers have a full reporting exemption;
  • Naturally occurring chemical substances have a full reporting exemption; and
  • Certain listed forms of natural gas and natural gas liquids have a full reporting exemption.

In addition, partial exemptions are available for certain petroleum process streams and for other common chemical substances (e.g., limestone, hydrogen, oxygen, nitrogen).

Additional information on the TSCA CDR program is provided on the U.S. EPA’s Chemical Data Reporting web page.

If you have any questions about the 2016 TSCA Chemical Data Reporting, please contact Dennis Ritter at dritter@cecinc.com or 412-429-2324.