Implications of the New NESHAP/NSPS for the Oil and Gas Sector


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Presented March 27, 2012 to the Dallas Chapter of the American Institute of Chemical Engineers. Provides a broad overview of the new NESHAP and NSPS for Oil and Gas

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Implications of the New NESHAP/NSPS for the Oil and Gas Sector

  1. 1. Implications of the NewNESHAP/NSPS (MACT) for theOil & Gas SectorPresented byCindy Bishop(B.S.Ch.E.)1American Institute of Chemical EngineersDallas ChapterMarch 27, 2012
  2. 2. Implications of the NewNESHAP/NSPS (MACT) for theOil & Gas SectorI. What Has Changed?II. Who Is Affected?III.What Needs to Be Done?IV.When Does it Happen?V. What If You Don’t Do it?2
  3. 3.  Clean Air Act Section 111 EPA Must List Categories of StationarySources That Cause or ContributeSignificantly to Air Pollution EPA Must Issue PerformanceStandards for Each Category ―Best System of EmissionReduction‖ Cost Non-air Impacts Energy Requirements3ORIGIN
  4. 4. 4 NSPS (40 CFR Part 60) – New Source PerformanceStandards• New and Modified Sources• Industry Specific• Focus on Criteria Pollutants (VOCs, SO2)• EPA Review Required Every 8 YearsORIGIN
  5. 5. 5ORIGINNSPS (continued)1979 – Oil & Gas Production Placed on EPA’sPriority ListJune 24, 1985 - NSPS for leakingcomponents at gas processing plants (KKK)October 1, 1985 – SO2 regulations fromnatural gas processing (LLL)
  6. 6. 6 Clean Air Act Section 112 NESHAP (40 CFR Part 63) – National EmissionStandards for Hazardous Air Pollutants• New and Existing Sources• Industry Specific• Major Sources MACT – Maximum Achievable Control Technology Top 12% No Cost Consideration EPA Review Required Every 8 YearsORIGIN
  7. 7. 7ORIGINNESHAP (continued)July 16, 1992 – EPA Published List of Majorand Area Source Categories, including Oil &Gas ProductionFebruary 12, 1998 – Natural GasTransmission and Storage Added to ListJune 17, 1999 – MACT Issued (HH & HHH)January 3, 2007 – Area Sources
  8. 8. WHY NOW? January 14, 2009 suit filed February 4, 2010 – Settlement:• Proposed Standards by July 28, 2011• Final Action by February 28, 20128
  9. 9. 9
  10. 10. Who Is Affected?10Operations from Well to Refinery or to Customer•Onshore & Offshore•Production (well completion and workover)•Portable Equipment•Storage•Transmission
  11. 11. • Aug. 23, 2011 Rule Proposed Published• Oct. 24, 2011 Comment Deadline• April 3, 2012 Final Rule• ???11When Does it Happen?
  12. 12. What Has Changed?NSPS Revised:• Equipment Leaks (KKK)• SO2 (LLL) New (OOOO):• Hydraulic Fracturing• Gas-driven Pneumatic Devices, Centrifugal andReciprocating Compressors• Storage Vessels Applies to new facilities that were constructed ormodified after August 23, 201112
  13. 13. What Has Changed?NESHAP Revised• Oil & Gas Production Facilities (HH)• Gas Transmission and Storage (HHH) New• Small Glycol Dehydrators• Storage Vessels at Major Sources Must Notify EPA within 1 year after rule becomesfinal13
  14. 14. 14Oil & Gas Production, Transmission, and Distribution(OOOO)Applies to all construction, modification orreconstruction after August 23, 2011Includes fracking or refracking existing wellheadCompliance date: date of final rule publication.NSPS
  15. 15. 15Oil & Gas Production, Transmission, and Distribution(OOOO)Reduced Emission Completion (―REC‖)•Route gas during flowback into collection system•Use sandtraps, surge vessels, separators, and tanksduring flowback and cleanout operations•Capture and direct flowback emissions that cannotbe routed to a gathering line to a combustion device(flare)NSPS
  16. 16. 16Oil & Gas Production, Transmission, and Distribution(OOOO)Compressor standards•Rotating compressor: dry seal system•Reciprocating compressor: replace rod packingbefore 26,000 operating hoursPneumatic controller: zero emissions of natural gas ifat gas processing plant, otherwise no more than 6 scfh(switch to compressed air driven from gas controller)NSPS
  17. 17. 17Oil & Gas Production, Transmission, and Distribution(OOOO)Condensate and Crude Oil Storage TanksIf :•At least one barrel per day condensateor•At least 20 barrels per day crude oil;Then, 95% VOC emission reductionNSPS
  18. 18. 18Sulfur Recovery Units at Onshore Gas ProcessingPlantsSO2 standards:• Feed rates of 5 tons per day or greater or• With an acid gas stream H2S concentration of50% or greater•SO2 emission reduction of 99.9% (was 99.8%)NSPS
  19. 19. 19LDAR (Subpart VVa instead of VV)Applies to onshore gas processing plants•Lower ―leak‖ threshold•Monitoring connectorsNSPS
  20. 20. 20Startup, Shutdown, Malfunction•No ―Free Pass‖ During Startup and Shutdown•Affirmative Defense for Malfunctions•Sudden•Infrequent•Not reasonably preventable•Not caused by poor maintenance or carelessoperationNSPS
  21. 21. 21Registration/recordkeeping•Construction, startup, and modification notifications•Well registration and 30-day notification prior to eachwell completion•Annual Compliance Certification•Third Party verification•Electronic reporting•Over 20,000 completions and recompletions annuallyNSPS
  22. 22. 22NESHAP
  23. 23. 23
  24. 24. 24
  25. 25. 25NESHAP Subparts HH & HHHAddition of Small Glycol Dehydrators•Oil & Gas Production: gas flowrate < 85,000 scmd or0.90 Mg/yr benzene emissions•Existing sources: 1.10 x 10-4 g BTEX/scm•New sources: 4.66 x 10-6 g BTEX/scm•Gas Transmission & Storage: gas flowrate < 283,000 scmd or0.90 Mg/yr benzene emissions•Existing sources: 6.42 x 10-5 g BTEX/scm•New sources: 1.10x 10-5 g BTEX/scm•Types of control: process vent » control device or closed-vent system
  26. 26. 26NESHAP Subparts HH & HHHStorage Vessels95% reduction of HAPs for all storage vessels•Process modifications•Flare•Incinerator•Carbon Filter•CondenserPerformance Testing of Control DeviceElimination of Startup, Shutdown & MalfunctionExemption (See NSPS)
  27. 27. 27NESHAP Subparts HH & HHHCompliance dates:Existing sources: 3 years after the date of final rulepublicationNew sources (commenced construction on or after August23, 2011): immediately upon startup or the date of finalrule publication, whichever is later
  28. 28. 28What has industry said?Rules will slow drilling, cut natural gas productionand reduce royalties (API)Equipment for capturing emissions duringcompletions is unlikely to be as readily available asEPA assumed, and equipment would have to spendmore time at each site than estimated.
  29. 29. What If You Don’t Do it?• EPA can make you do it• Civil Penalties up to $25,000/day/violation• Criminal Penalties $250,000 per day perviolation and up to five years in jail.Corporations are subject to up to $500,000 perday per violation.• $10,000 bounty29
  30. 30. EPA Region 6 2011—2013 National Enforcement Initiatives1. Keeping raw sewage and contaminated stormwater out of our nation’swaters2. Preventing animal waste from contaminating surface and ground waters3. Cutting Toxic Air Pollution that Affects Communities’ Health4. Reducing Widespread Air Pollution from the Largest Sources, especially theCoal-Fired Utility, Cement, Glass, and Acid Sectors5. Reducing pollution from mineral processing operations6. ASSURING ENERGY EXTRACTION SECTOR COMPLIANCE WITHENVIRONMENTAL LAWS―To address these emerging problems, EPA will develop an initiative toassure that energy extraction activities are complying with federalrequirements‖30
  31. 31.  Stay on top of the rules –be organized! Look for exemptions Start reviewing operations now – do not wait untilthe rules are final. Look for innovative/emerging technology EPA favors those who voluntarily discloseproblems.31
  32. 32. Implications of the NewNESHAP/NSPS (MACT) for theOil & Gas SectorPresented byCindy