environmental and clean air regulations

Environmental and Clean Air Regulations

MIDSTREAM ENERGY LAW CONFERENCE: MEETING THE DEMAND FOR INFRASTRUCTURE

HOUSTON, TEXAS

December 7, 2012

Benjamin RhemJackson Walker [email protected]• 512.236.2012

Presentation Outline

• Federal Clean Air Act Basics• Greenhouse Gas Regulations• Texas Air Permitting Structure• Aggregation of Oil and Gas Sites• EPA and TCEQ Legal Conflict Regarding

Regulation of Oil and Gas Operations• Compliance Best Practices

Federal Clean Air Act Basics

• National Ambient Air Quality Standards• New Source Performance Standards• National Emission Standards for

Hazardous Air Pollutants• State Implementation Plans

Recent EPA Oil and Gas Regulations

• On August 16, 2012, the following new air regulations were published in the Federal Register– NSPS Subpart OOOO, Crude Oil and Natural Gas

Production, Transmission and Distribution– NESHAP Subpart HH, Oil and Natural Gas

Production– NESHAP Subpart HHH, Natural Gas Transmission

and Storage


• What facilities are covered under Subpart OOOO?– Production sites – Gathering stations– Natural gas plants– Transmission compression– Underground natural gas storage


• NSPS OOOO– LDAR – natural gas processing

plants are subject to more stringent definition of “leak,” more frequent monitoring, and monitoring of more components

– SO2 Emissions – natural gas processing plants with sulfur feed rates of more than 2 long tons/day must control emissions up to 99% depending on feed rate and concentration


• NSPS OOOO– Natural gas wells using hydraulic fracturing must

control VOC emissions with green completions by 2015, but until then may use flares

– Centrifugal and reciprocating compressors are subject to certain seal and packing requirements

– All storage vessels are required to control VOC and HAPS emissions to 95%


• NESHAP HHH– Retains requirement that Large Glycol

Dehydrators must reduce benzene emissions to less than 1 ton per year or reduce total air toxics by 95%

– Small Glycol Dehydrators must meet unit specific limits for BTEX based on throughput and gas composition

Program Conflicts

• NSPS (40 CFR, Subpart OOOO)– EPA’s recently finalized NSPS for oil and gas facilities require

flaring of emissions associated with flowback from hydraulic fracturing operations.

– When this flowback contains high concentrations of sulfur compounds, the flaring process can actually create significant SO2 emissions.

• NAAQS (CAA § 109)– In some areas with a high density of fracking operations, TCEQ

is concerned that the required flaring operations may cause an

exceedance of the SO2 NAAQS.

Greenhouse Gas Regulations

• Reporting Rule• GHG Permitting

a. Mass. v. EPAb. Endangerment Findingc. Tailpipe Ruled. Tailoring Rulee. Texas’ Challenge

TCEQ Permitting Structure

• De Minimis Sources• Permits By Rule• Standard Permits• New Source Review Permits• MSS Authorizations

TCEQ Permitting Structure

• Title V– Federal Program – delegated to TCEQ– Only applies to “major sources”

• NSPS• NESHAPS

Aggregation of Oil and Gas Sites

• EPA regulations, 40 C.F.R. 52.21(b)(6), require– aggregation into a single source based upon:

• Common control, by the same person• Located on contiguous or adjacent properties• Same Industrial SIC grouping

Summit v. EPANos. 09-4348,10-4572, Decided August 7, 2012, 6th Circuit Court of Appeals

• EPA determined that 100 sour gas wells that were within a roughly 40 square mile area constituted a single stationary source because they were "adjacent."– Some of the wells and flares were located up to 8 miles from the

sweetening plant– Furthermore, the operator did not own all the land between the

plants and wells

• The 6th Circuit found that EPA's reliance on whether sources were functionally related in determining whether those sources should be aggregated was contrary to the plain meaning of "adjacent."

EPA and TCEQ Legal Conflicts and the SIP Gap

• Legal Challenges– On October 12, 2012, Texas filed a petition for

review of the EPA’s Final Oil and Gas NSPS and NESHAP rules

• SIP Gap– TCEQ adopts rules and incorporates them

into the SIP, but the EPA has not approved

• What is an operator supposed to do when presented with differing regulations from the federal and state environmental agencies, or when a state challenges federal regulations?– Example of the TCEQ Flex Permitting Program– Texas and other petitioners have been winning a

fair share of their challenges to EPA regulations, further complicating the decision operators face

EPA and TCEQ Legal Conflicts and the SIP Gap

Best Practices• No easy solution• Environmental-specific compliance

manager – Don’t assume safety manager will be

knowledgeable about and able to handle all environmental issues

• Proactive approach– Waiting for a TCEQ or EPA investigator to

show up at your site is rarely the right answer

Texas Environmental, Health, and Safety Audit Privilege Act

Notice of Audit + Conduct Audit+ Disclosure of Violations+ Corrective Action Plan

Immunity from penalties associated with those disclosed violations

EPA to greatly reduce its implementation of its audit policy.

QUESTIONS?

[email protected]

environmental and clean air regulations

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