API urges EPA to delay wellsite emissions rule at least a year

At least another year will be needed to adequately consider potential impacts and feasibility of proposed US Environmental Protection Agency regulations involving air emissions at oil and gas production sites and gas transmission and storage facilities, the American Petroleum Institute said. It urged EPA to wait until Apr. 5, 2013, to issue a final rule.

API has only minor concerns with the selected control technologies, which are emissions control techniques developed by the industry over years of operations, it said in comments submitted on Nov. 30 to EPA. “However, we are concerned about the ‘one-size-fits-all’ approach to the proposed rule to regulating an industry that varies greatly in the type, size, and complexity of operations,” it continued.

EPA has set an early April deadline for issuing a final rule that would change federal New Source Performance Standards and National Emissions Standards for Hazardous Air Pollutants for the oil and gas industry, API Regulatory and Scientific Affairs Director Howard J. Feldman said on Dec. 1.

“We don’t believe that’s enough time to review comments and address issues which are raised. That could be a whole extra year before issuing a final rule,” he said during a teleconference with reporters. “Second, we think the actual affected facilities will need much more time to put the equipment in place to meet these new requirements.”

In its comments, API said the proposed rule also would expand listed categories and apply NSPS to new affected facilities in unique and unprecedented ways that may be outside EPA’s authority. Equipment for the reduced emissions completions under the proposal would not be available in time for producers which don’t already have it to meet the deadline. Proposed monitoring, record-keeping, performance testing, and reporting requirements would be a burden to small producers and temporarily operating facilities. EPA also has not adequately considered the proposals costs while over-estimating its benefits, according to API.

Regulatory ‘sweet spot’

“We’re taking this very seriously,” Feldman said. “We think this is a major issue, and we want to work with the agency over the next few months to develop a rule that works…. We think EPA can craft regulations that do not inhibit production of natural gas while protecting communities and providing jobs. We want to help it hit this sweet spot.”

In addition to postponing its deadline for issuing a final rule on the proposed regulations, API recommended that EPA consult with state air pollution offices on expanding the source category for new and unique facilities as the federal Clean Air Act requires, and repropose new regulations as needed. It also urged the agency to allow between 60 days and 2 years for affected operations to comply with equipment-specific NSPS requirements once the final rule is promulgated.

“This is a broadening of EPA’s enforcement of NSPS,” Feldman said. “We don’t really believe it has the authority to do that…. In some places, EPA tries to define a source as a specific valve. It’s trying to bring the affected source down to a much smaller, unprecedented level.”

API also recommended that EPA revise its economic analyses for the proposed regulations to include all compliance cost and operational variables. “These revised analyses should be used to limit the emission controls applicability to operations where they are economically justifiable,” it suggested.

Feldman said that there are instances where gas escapes during production, but added that many producers already use reduced emissions completions to recapture and sell it. “They already have incentives to do this because it essentially is money going up into the air,” he explained. “There are certain places where this makes sense. There are others where the proper gathering lines aren’t in place, or the reservoir pressure has decreased to a point that it isn’t practical.”

Contact Nick Snow at nicks@pennwell.com.

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