Top 10 Air Quality Issues for the Oil and Gas Industry in 2013
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Top 10 Air Quality Issues for the Oil and Gas Industry in 2013

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ALL4 and Schnader Harrison Segal & Lewis LLP presented at the 2013 Pennsylvania Independent Oil and Gas Association (PIOGA) Winter Meeting on February 13, 2013 about the top 10 air quality issues that ...

ALL4 and Schnader Harrison Segal & Lewis LLP presented at the 2013 Pennsylvania Independent Oil and Gas Association (PIOGA) Winter Meeting on February 13, 2013 about the top 10 air quality issues that the oil and gas industry should be mindful of in 2013.

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Top 10 Air Quality Issues for the Oil and Gas Industry in 2013 Top 10 Air Quality Issues for the Oil and Gas Industry in 2013 Presentation Transcript

  • TOP 10 AIR QUALITY ISSUES FOR THE OIL AND GAS INDUSTRY IN 2013
  • Agenda• Well Completion Requirements of 40 CFR Part 60 Subpart OOOO - Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution• Final Revisions to Pennsylvania General Permit (GP-5) - Natural Gas Production and/or Processing Facilities• 40 CFR Part 98 Subpart W - Petroleum and Natural Gas Systems• Aggregation of Emissions for New Source Review and Title V Applicability• 40 CFR part 63 Subpart ZZZZ - National Emissions Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines• Proposed Revisions to PADEP Document No. 275-2101-003: Air Quality Permit Exemptions
  • NSPS RULES FORNATURAL GAS WELL COMPLETIONS Ron Cusano SCHNADER HARRISON SEGAL & LEWIS LLP
  • I. Final NSPS and NESHAPS / Oil and Gas Sector (the “Final Rule”) A. Promulgated on August 16, 2012 [77 Fed. Reg. 49490 (August 16, 2012)].
  • I. Final NSPS and NESHAPS / Oil and Gas Sector (the “Final Rule”) A. Promulgated on August 16, 2012 [77 Fed. Reg. 49490 (August 16, 2012)]. B. NSPS applies to numerous categories of sources in addition to gas well completions.
  • II. Statutory Authority and Requirements for NSPS
  • A. Before listing a category of stationary sourcesEPA must find that emissions from the sourcecategory cause or contribute significantly to airpollution which endangers public health or welfare.Section 111(b)(1)(A) of the Clean Air Act (the “CAA”or “Act”); 42 U.S.C. §7411(b)(1)(A).
  • B. Best System of Emission Reduction (“BSER”): BSER must be cost effective and must have been adequatelydemonstrated. Section 111(a)(1), 42 U.S.C. §7411(a)(1).
  • III. Well Completion Rules A. PaDEP Proposed Revisions to Plan Approval andOperating Permit Exemption List (42 Pa.B. 742) February 2, 2013 B. Applicability and Definitions (Well CompletionRules)
  • 1. Apply to every gas well affected facility that is fractured or refracturedafter October 15, 2012. (40 C.F.R. §60.5375).
  • 1. Apply to every gas well affected facility that is fractured or refracturedafter October 15, 2012. (40 C.F.R. §60.5375).2. “Gas well affected facility … is a single natural gas well”. (40 C.F.R.§60.5365).
  • 1. Apply to every gas well affected facility that is fractured or refracturedafter October 15, 2012. (40 C.F.R. §60.5375).2. “Gas well affected facility … is a single natural gas well”. (40 C.F.R.§60.5365).3. “Gas well” or “natural gas well” - “an on-shore well drilled principallyfor production of natural gas”. (40 C.F.R. §60.5430).
  • 1. Apply to every gas well affected facility that is fractured or refracturedafter October 15, 2012. (40 C.F.R. §60.5375).2. “Gas well affected facility … is a single natural gas well”. (40 C.F.R.§60.5365).3. “Gas well” or “natural gas well” - “an on-shore well drilled principallyfor production of natural gas”. (40 C.F.R. §60.5430).4. Apply to conventionally drilled gas wells.
  • 1. Apply to every gas well affected facility that is fractured or refracturedafter October 15, 2012. (40 C.F.R. §60.5375).2. “Gas well affected facility … is a single natural gas well”. (40 C.F.R.§60.5365).3. “Gas well” or “natural gas well” - “an on-shore well drilled principallyfor production of natural gas”. (40 C.F.R. §60.5430).4. Apply to conventionally drilled gas wells.5. “Delineation well” - “a well drilled in order to determine theboundary of a field or producing reservoir.” (40 C.F.R. §5430).
  • 6. “Wildcat well” - “a well outside known fields or the first well drilledin an oil or gas field where no other oil and gas production exists.” (40 C.F.R.§5430).
  • 6. “Wildcat well” - “a well outside known fields or the first well drilledin an oil or gas field where no other oil and gas production exists.” (40 C.F.R.§5430).7. “Low pressure gas well” “means a well with reservoir pressure andvertical well depth such that 0.445 times the reservoir pressure (in psia) minus0.038 times the vertical well depth (in feet) minus 67.578 psia is less than theflow line pressure at the sales meter.” (40 C.F.R. §60.5430).
  • 6. “Wildcat well” - “a well outside known fields or the first well drilledin an oil or gas field where no other oil and gas production exists.” (40 C.F.R.§5430).7. “Low pressure gas well” “means a well with reservoir pressure andvertical well depth such that 0.445 times the reservoir pressure (in psia) minus0.038 times the vertical well depth (in feet) minus 67.578 psia is less than theflow line pressure at the sales meter.” (40 C.F.R. §60.5430).8. Reduced emissions completion means gas that would otherwise bevented must be captured, cleaned and directed to the flowline, re-injectedinto the well or another well, used on-site as a fuel source, or used for otheruseful purpose without emission to the atmosphere. (40 C.F.R. §60.5430).
  • B. StandardsThere are three subcategories of gas well affected facilities for purposes of the regulation. They are wildcat,delineation and low pressure wells fractured or refractured after October 15, 2012; all other gas wellsfractured or refractured prior to January 1, 2015; and all other gas wells fractured or refractured afterJanuary 1, 2015. (77 Fed. Reg. 49497). Well Category Completion Requirements Wildcat, delineation and low pressure wells Route emissions to completion combustion device fractured or refractured after October 15, 2012 [40 C.F.R. §60.5375(f)]. Other gas wells fractured or refractured prior to Route emissions to completion combustion device January 1, 2015 [40 C.F.R. §60.5375(a)(3) and (4)]. Gas wells fractured or refractured after January Use REC and route emissions to completion combustion device 1, 2015 [40 C.F.R. §60.5375(a)(1)-(4)].
  • 1. Do the well completion requirements meet BSER?
  • 1. Do the well completion requirements meet BSER?2. Exception to flaring which applies, “in conditions that may result in afire hazard or explosion or where high heat emissions from a completioncombustion device may negatively impact tundra, permafrost or waterways”.[40 C.F.R. §60.5375(a)(3)].
  • 1. Do the well completion requirements meet BSER?2. Exception to flaring which applies, “in conditions that may result in afire hazard or explosion or where high heat emissions from a completioncombustion device may negatively impact tundra, permafrost or waterways”.[40 C.F.R. §60.5375(a)(3)].3. Owners and operators also have “a general duty to safely maximizeresource recovery and minimize releases to the atmosphere during flowbackand subsequent recovery." [40 C.F.R. §60.5375(a)(4)].
  • 1. Do the well completion requirements meet BSER?2. Exception to flaring which applies, “in conditions that may result in afire hazard or explosion or where high heat emissions from a completioncombustion device may negatively impact tundra, permafrost or waterways”.[40 C.F.R. §60.5375(a)(3)].3. Owners and operators also have “a general duty to safely maximizeresource recovery and minimize releases to the atmosphere during flowbackand subsequent recovery." [40 C.F.R. §60.5375(a)(4)].4. Is there a duty to cut trees to remove the risk of fire?
  • C. Other Requirements1. Owners and operators of gas wells “must submit annual reportscontaining the information specified in …” the regulations. [40 C.F.R.§60.5420(b)].
  • C. Other Requirements1. Owners and operators of gas wells “must submit annual reportscontaining the information specified in …” the regulations. [40 C.F.R.§60.5420(b)].2. The annual report must contain “[r]ecords of deviations in caseswhere well completion operations with hydraulic fracturing were notperformed in compliance with the requirements specified in §60.5375”. [(40C.F.R. §60.5420(c)(1)].
  • C. Other Requirements1. Owners and operators of gas wells “must submit annual reportscontaining the information specified in …” the regulations. [40 C.F.R.§60.5420(b)].2. The annual report must contain “[r]ecords of deviations in caseswhere well completion operations with hydraulic fracturing were notperformed in compliance with the requirements specified in §60.5375”. [(40C.F.R. §60.5420(c)(1)].3. Each annual report must contain, “a certification by a responsibleofficial of truth, accuracy and completeness”. [40 C.F.R. §60.5420(h)(iv)].
  • IV. IPAA and PIOGA Petition for Review and Joinder in Petition for Administrative Reconsideration A. On October 15, 2012, IPAA and PIOGA petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the Final Rule.
  • IV. IPAA and PIOGA Petitions for Review and Administrative Reconsideration A. On October 15, 2012, IPAA and PIOGA petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the Final Rule. B. At the same time, IPAA and PIOGA joined in a pending Petition for Administrative Reconsideration. 1. The pending Petition sought reconsideration of EPA’s low pressure well definition as well as other aspects of the Final Rule.
  • C. Petition for Administrative Reconsideration1. EPA did not sufficiently vet the definition of low pressure welland adopted the definition without input from Industry.
  • C. Petition for Administrative Reconsideration1. EPA did not sufficiently vet the definition of low pressure welland adopted the definition without input from Industry.2. EPA’s cost benefit analysis is flawed because EPA relied uponits Natural Gas STAR Program which grossly over-predicted emissionsfrom well completions.
  • 3. Meeting with EPA. a. EPA has agreed to meet with IPAA, PIOGA and othersconcerning their pending Petition for Administrative Reconsideration. b. Meeting is expected to occur in the next two to threemonths. c. Jim Elliott of Spillman, Thomas & Battle, PLLC iscoordinating the meeting. d. Jim has also authored an article which will be appearing inthe next issue of the PIOGA Newsletter detailing the petitions and themeeting. Persons with information that may be helpful to the cause areencouraged to submit such information to James D. Elliott (717-791-2012),jelliott@spilmanlaw.com; or Ron Cusano (412-577-5203),rcusano@schnader.com.
  • e. Lastly, while these developments are positive I must cautionthat EPA may in the end deny the Petition for Reconsideration or grant thePetition, but decide not to change the Final Rule. Further, even if EPA doesdecide to make changes it is doubtful that final action on those changes willoccur any time soon. EPA is currently projecting that final action on anyNSPS Petition for Reconsideration that it grants will not occur beforeNovember of 2014. In the meantime, the current rules remain in effect andmust be complied with.
  • GENERAL PLAN APPROVAL AND/OR GENERAL OPERATING PERMIT BAQ-GPA/GP-5Natural Gas Compression and/or Processing Facilities Roy Rakiewicz, All4 Inc. rrakiewicz@all4inc.com
  • What is a General Permit?• Authorized by Section 504(d) of the Federal Clean Air Act (CAA), Section 6.1 of the Pennsylvania Air Pollution Control Act, and 25 Pa. Code §127.611• General Permits (GP) may be established – If PADEP “determines that sources in the category are similar and can be adequately regulated using standardized specifications and conditions”• PADEP has issued multiple General Plan Approvals and General Operating Permits to specific categories of sources in Pennsylvania• Benefits include pre-approved conditions and expeditious review and approval (i.e., 30 days)• General Permit (GP-5) covers Natural Gas Compression and/or Processing Facilities• The use of GP-5 is optional for facilities that meet applicability criteria
  • Brief History of GP-5• Previous (original from March 10, 1997) - GP-5 for Natural Gas, Coal Bed Methane, or GOB Gas Production or Recovery Facilities• Proposed March 3, 2012 - GP-5 for Natural Gas Production and/or Processing Facilities• Final February 2, 2013 - GP-5 for Gas Compression and/or Processing Facilities
  • GP-5 Review/Revision Process• Published in March 2012 for public comment• Significant public interest• PADEP revised GP-5 in response to numerous public comments• Final GP-5 February 2, 2013• Extensive revisions to final GP-5, several substantial
  • Final GP-5 Exclusions• Wellheads (proposed new exemption No. 38)• Sources located at Title V facilities• Major new source review (NSR) sources• Engines/turbines used as a “peak shaving engine generator” or source participating in an Emergency and Economic Load Response Program• Any engine or turbine that is used on a natural gas transmission line• Cannot limit PTE of individual units
  • Final GP-5 Additions• All potentially applicable Federal emission standards• Natural gas compression/processing facilities• Equipment (turbines, compressors, pneumatic devices, sweetening units, etc.)• $1,700 application fee• Annual emission limits
  • Federal Standards Incorporated in GP-5• Standards of Performance for New Stationary Sources (NSPS) – 40 CFR Part 60, Subpart JJJJ – Internal Combustion Engines (ICE) – 40 CFR Part 60, Subpart Kb – Liquid Storage Vessels (tanks) – 40 CFR Part 60, Subpart KKK – Equipment Leaks of VOC – 40 CFR Part 60, Subpart KKKK – Combustion Turbines – 40 CFR Part 60, Subpart LLL – Onshore Natural Gas Processing; SO2 Emissions (Sweetening Units) – 40 CFR Part 60, Subpart OOOO – Crude Oil and Natural Gas Production, Transmission, and Distribution• National Emission Standards for Hazardous Air Pollutants (NESHAP) – 40 CFR Part 63, Subpart HH – Oil and Natural Gas Production Facilities (glycol dehydrators) – 40 CFR Part 63, Subpart ZZZZ – Stationary Reciprocating Internal Combustion Engines (RICE)
  • Other Key GP-5 Revisions• Emissions recordkeeping requirements to track actual emissions on a rolling 12-month basis• Only two definitions – Natural gas compression and/or processing facility – Coal bed methane• Engine emission limits/testing for PM and SO2 deleted• Single Source Determination forms required• Most engine emission limits have been revised (i.e., lowered)
  • Why Multiple/Different Standards?• Pennsylvania regulations require best available technology (BAT) for new sources• GP-5 is predominantly for new sources• BAT can be (and often is) more stringent than NSPS/NESHAPS limits• GP-5 includes such emissions limits that PADEP established as BAT• NSPS/NESHAP limits do not go away
  • GP-5 Coverage• Internal Combustion Engines (ICE)• Combustion Turbines• Compressors• Storage Vessels• Pneumatic Devices• Natural Gas Processing Operations• Glycol Dehydrators• Sweetening Units• Equipment Leaks/Fugitive Emissions
  • Existing ICE• Continue to comply with the following emissions standards: – 2.0 g NOX /bhp-hr – 2.0 g CO /bhp-hr – 2.0 g NMHC /bhp-hr• Comply with (as applicable): – 40 CFR Part 60, Subpart JJJJ (NSPS) – 40 CFR Part 63, Subpart ZZZZ (NESHAP).
  • Lean/Rich Burn ICE < 100 BHP “Old” GP-5 40 CFR 60 “New” GP-5 Subpart JJJJ BATNOX Exempt Combined NOX 2.0 g/hp-hr and HC limitCO Exempt 4.85 g/hp-hr 2.0 g/hp-hrNMNEHC Exempt Combined NOX No Limits and HC limitFormaldehyde No Limits No Limits No Limits
  • Lean Burn ICE > 100 < 500 BHP “Old” GP-5 40 CFR 60 “New” GP-5 Subpart JJJJ BATNOX 2.0 g/hp-hr 1.0 g/hp-hr 1.0 g/hp-hrCO 2.0 g/hp-hr 2.0 g/hp-hr 2.0 g/hp-hrNMNEHC 2.0 g/hp-hr 0.7 g/hp-hr 0.7 g/hp-hrFormaldehyde No Limits No Limits No Limits
  • Lean Burn ICE >500 BHP “Old” GP-5 40 CFR 60 40 CFR 63 “New” GP-5 Subpart JJJJ Subpart ZZZZ BATNOX 2.0 g/hp-hr 1.0 g/hp-hr N/A 0.5 g/hp-hrCO 2.0 g/hp-hr 2.0 g/hp-hr 47 ppmvd @ 47 ppmvd @ 15% O2 or 93% 15% O2 or 93% reduction reductionNMNEHC 2.0 g/hp-hr 0.7 g/hp-hr N/A 0.25 g/hp-hrFormaldehyde No Limits No Limits N/A 0.05 g/hp-hr
  • Rich Burn ICE > 100 < 500 BHP “Old” GP-5 40 CFR 60 “New” GP-5 Subpart JJJJ BATNOX 2.0 g/hp-hr 1.0 g/hp-hr 0.25 g/hp-hrCO 2.0 g/hp-hr 2.0 g/hp-hr 0.3 g/hp-hrNMNEHC 2.0 g/hp-hr 0.7 g/hp-hr 0.2 g/hp-hrFormaldehyde No Limits No Limits No Limits
  • Rich Burn ICE >500 BHP “Old” GP-5 40 CFR 60 40 CFR 63 “New” GP-5 Subpart JJJJ Subpart ZZZZ BATNOX 2.0 g/hp-hr 1.0 g/hp-hr N/A 0.2 g/hp-hrCO 2.0 g/hp-hr 2.0 g/hp-hr N/A 0.3 g/hp-hrNMNEHC 2.0 g/hp-hr 0.7 g/hp-hr N/A 0.2 g/hp-hrFormaldehyde No Limits No Limits 2.7 ppmvd @ 2.7 ppmvd @ 15% O2 or 76% 15% O2 or 76% reduction reduction
  • Simple Cycle Turbines <1,000 BHP• Exempt pursuant to Technical Guidance Document #275-2101-003
  • Simple Cycle Turbines > 1,000 <5,000 BHP “Old” GP-5 40 CFR 60 “New” GP-5 Subpart KKKK BAT NOX N/A 100 ppmvd @ 25 ppmvd @ 15% O2 15% O2 CO N/A No Limits 25 ppmvd @ 15% O2 NMNEHC N/A No Limits 9 ppmvd @ 15% O2 Formaldehyde N/A No Limits No Limits PM N/A No Limits 0.03 lb/MMBtu
  • Simple Cycle Turbines > 5,000 <15,000 BHP “Old” GP-5 40 CFR 60 “New” GP-5 Subpart KKKK BAT NOX N/A 25 to 100 ppmvd 15 ppmvd @ @ 15% O2 15% O2 CO N/A No Limits 25 ppmvd @ 15% O2 NMNEHC N/A No Limits 9 ppmvd @ 15% O2 Formaldehyde N/A No Limits No Limits PM N/A No Limits 0.03 lb/MMBtu
  • Simple Cycle Turbines > 15,000 BHP “Old” GP-5 40 CFR 60 “New” GP-5 Subpart KKKK BAT NOX N/A 25 to 15 ppmvd 15 ppmvd @ @ 15% O2 15% O2 CO N/A No Limits 10 ppmvd @ 15% O2 or 93% reduction NMNEHC N/A No Limits 5 ppmvd @ 15% O2 or 50% reduction Formaldehyde N/A No Limits No Limits PM N/A No Limits 0.03 lb/MMBtu
  • BAT-Equivalent Incorporated Standards• Compressors – 40 CFR Part 60, Subpart OOOO• Storage Vessels/Storage Tanks – 40 CFR Part 60, Subpart OOOO• Pneumatic Devices – 40 CFR Part 60, Subpart OOOO• Natural Gas Processing Operations – 40 CFR Part, 60 Subpart KKK• Sweetening Units – 40 CFR Part 60, Subpart LLL
  • Existing Glycol Dehydrators• Existing glycol dehydrators (authorized to operate under a previous GP-5) – Comply with 40 CFR Part 60, Subpart HH – Comply with the emission standards and other requirements established in previous GP-5
  • New Glycol Dehydrators• Located at natural gas compression and/or processing facilities – Comply with 40 CFR Part 63, Subpart HH• Not subject to 40 CFR Part 63, Subpart HH with uncontrolled PTE of VOC > 5 tpy – Controlled either by at least 95% with a condenser, a flare or other air cleaning device• Not subject to 40 CFR Part 63, Subpart HH with uncontrolled PTE of VOC < 5 tpy – Comply with the visible emissions, malodor, and recordkeeping requirements
  • Equipment Leak Provisions• Federal equipment leak provisions as applicable – 40 CFR Part 60, Subparts KKK and OOOO – 40 CFR Part 63, Subpart HH• Monthly leak detection and repair program (LDAR) – Audible, visual, and olfactory (AVO) inspection• Quarterly LDAR fugitive leak inspection – Forward looking infrared (FLIR) cameras or – Other approved devices• Detected leaks must be repaired: – As expeditiously as practicable – But no later than 15 days after detection• All leaks and associated repairs must be recorded
  • Key Points• GP-5 is not a comprehensive document – Applicable NSPS/NESHAP are all incorporated by reference – Sources will need to be aware of all compliance obligations• Multiple standards apply – Standards may differ (e.g., BAT vs. NSPS ICE standards) – Monitoring, recordkeeping, reporting, and notification requirements differ• Completion of single source questionaire required• GP-5 not applicable to major sources – Mandatory rolling 12-month emissions tracking to demonstrate on-going minor source status• Proceed with caution!
  • Federal Greenhouse Gas (GHG) Reporting Rule: 40 CFR Part 98, Subpart WPetroleum and Natural Gas Systems Meghan Schulz, All4 Inc. mschulz@all4inc.com
  • Federal GHG Reporting Rule Basics• First promulgated in 2009; first reporting year 2010 – Subpart W promulgated in 2010; first reporting year 2011• Frequently amended – now up to Subpart UU• What is Carbon Dioxide Equivalent (CO2e)? Pollutant Global Warming Potential (GWP) n CO2 e = ∑ GHGi × GWPi CO2 1 CH4 21 i =1 N2 O 310• Petroleum & natural gas facilities emitting 25,000+ metric tons/year CO2e must report
  • From EPA’s “Facility Level Information on GreenHouse gases Tool” (FLIGHT)… … 46 Pennsylvania facilities reported under Subpart W in 2011.
  • GHG Reporting Rule Basics• Affected facilities required to develop a GHG Monitoring Plan• Reporting due by March 31st of each year unless otherwise noted• Must use EPA’s electronic GHG Reporting Tool (e-GGRT) – https://ghgreporting.epa.gov/ghg/login.do – User registration required
  • Subpart W: Petroleum and Natural Gas SystemsApplies to the following industry segments:• Onshore Petroleum and Natural Gas Production – All equipment on/associated with a single well-pad• Onshore Natural Gas Processing – Separation of natural gas liquids (NGLs) from produced natural gas• Offshore Petroleum and Natural Gas Production• Onshore Natural Gas Transmission Compression• Underground Natural Gas Storage• Liquefied Natural Gas (LNG) Storage• LNG Import and Export Equipment• Natural Gas Distribution
  • RY 2011 Information from EPA’s “Facility Level Information onGreenHouse gases Tool” (FLIGHT)
  • Subpart W: Definition of “Facility”• Facility with respect to onshore petroleum and natural gas production for purposes of reporting under this subpart and for the corresponding subpart A requirements means: – all petroleum or natural gas equipment on a single well-pad or associated with a single well-pad and CO2 EOR operations that are under common ownership or common control including leased, rented, or contracted activities by an onshore petroleum and natural gas production owner or operator and that are located in a single hydrocarbon basin as defined in § 98.238. – Where a person or entity owns or operates more than one well in a basin, then all onshore petroleum and natural gas production equipment associated with all wells that the person or entity owns or operates in the basin would be considered one facility.
  • Subpart W: GHGs to be Reported• Equipment leaks and vented CO2 and CH4 emissions• CO2, CH4, N2O emissions from flares• CO2, CH4, and N2O combustion emissions – Combustion emission calculation methodology depends on your industry segment
  • Subpart W: Calculating Emissions Leak Detection and Equipment Count Engineering Direct Source Type Estimate Measurement Leaker Emission and Population Factor Emission FactorNatural gas pneumatic deviceventing XNatural gas driven pneumaticpump venting XWell venting for liquidsunloading X XGas well venting duringcompletions without Xhydraulic fracturingGas well venting duringcompletions with hydraulic X Xfracturing Source: EPA’s “Overview of Subpart W” webinar, June 19, 2012
  • Subpart W: Reporting• Must download a Excel Reporting Form for each industry segment.
  • ALL4’s GHG Reporting Expertise • Applicability Analysis • Monitoring Plans • Emissions Inventories • e-GGRT Submittals • Reporting Follow-up Thank you!
  • Aggregation of Emissions for NewSource Review and Title V Applicability Levi Jones SCHNADER HARRISON SEGAL & LEWIS LLP
  • “Major StationarySource”
  • “Facility” Defined
  • The WehrumMemoJanuary 2007
  • Page 3: “Given the diverse nature of the oil and gas activities, we believe that proximity is the most informative factor in making source determinations for these industries.”Footnote 16: “In making majorstationary source determinations forthis industry, some southern Statesapply a rule that generally results inseparating pollutant-emittingactivities located outside a 1/4 mileradius.”
  • The WehrumMemoJanuary 2007
  • The WehrumMemoJanuary 2007
  • The McCarthyMemoSeptember2009
  • Page 2: “After conducting thenecessary analysis, it maybe that, in some cases,‘proximity’ may serve as theoverwhelming factor in apermitting authority’s sourcedetermination decision.However, such a conclusioncan only be justified throughreasoned decision makingafter examining whetherother factors are relevant tothe analysis.”
  • Summit Petroleum Corporation v. EPA
  • “We conclude that both the dictionary definition and etymological history of the term ‘adjacent,’ as well as applicable case law, support Summit’s position.” “The EPA does not cite, nor could we locate, any authority suggesting that the term ‘adjacent’ invokes an assessment of the functional relationship between two activities.” “We are particularly struck by API’s final observation—that the EPA’s source determination in this case is an ironic showcase of the very fears that caused the agency not to adopt a functionalJudge Suhrheinrich relatedness test for source determinations in the first instance.”
  • The PageMemoDecember2012
  • “Outside the 6th Circuit, at this time, the EPA does not intend to change itslongstanding practice of considering interrelatedness in the EPA permittingactions in other jurisdictions.” 8 5
  • Pennsylvania DEPGuidanceOctober 2012 8 6
  • Page 7: “The application ofthe quarter-mile or less rule ofthumb takes a ‘commonsense approach’ todetermining if sources arelocated on adjacent orcontiguous properties anddoes not aggregate pollutant-emitting activities that as agroup would not fit within theordinary meaning of ‘building,’‘structure,’ ‘facility,’ or‘installation.’” 8 7
  • EPA Comments toPADEP Guidance 8 8
  • “totally ignores the real problem, which is that DEP refuses to aggregate emissions results. So if there are 10 compressors right next to one another, DEP monitors emissions of each one separately, even though the combined emissions of all 10 are coming in throughState Rep. Jesse White(D - Washington County) your kitchen window.” 8 9
  • 40 CFR Part 63 Subpart ZZZZ - RICE MACT Roy Rakiewicz, All4 Inc. rrakiewicz@all4inc.com
  • RICE Regulatory Overview• 40 CFR Part 63, Subpart ZZZZ – – Regulates existing, new, and reconstructed stationary RICE, both compression ignition (CI) and spark ignition (SI). – Section 112 of the CAA, focused on HAP.• 40 CFR Part 60, Subpart IIII and JJJJ – – Regulates new, modified, and reconstructed stationary RICE, compression ignition (CI) (Subpart IIII) and spark ignition (SI) (Subpart JJJJ). – Section 111 of the CAA, focused on criteria pollutants.
  • RICE MACT/NSPS History1/18/2008 – Revised RICE MACT (New, ≤500 hp, Major 3/3/2010 – Revised RICE MACT 5/3/2013 – CI RICE and New, All hp, Area) and NSPS (CI) (CI RICE) Compliance Date 2004 … 2008 2009 2010 2011 2012 2013 6/15/2004 – Original RICE MACT 8/20/2010 – Revised RICE MACT TODAY(New and Existing, >500 hp, Major) NSPS (SI) (SI RICE) 10/19/2013 –SI RICE Compliance Date
  • What’s a Stationary RICE• Stationary RICE - not mobile, not non-road.• Non-road engines are: – Self-propelled (tractors, bulldozers, etc.) . – Propelled while performing their function (lawnmowers).• Portable or transportable (has wheels, on a skid, cartable, trailer mounted, etc.). – Portable non-road RICE become stationary if located onsite more than 12 consecutive months.
  • Key RICE Terms• SI – Spark Ignition: – Gas (gasoline, natural gas, propane, landfill gas, digester gas, etc.)• Other types of SI RICE: – 2SLB: 2-stroke lean burn. – 4SLB: 4 stroke lean burn. – 4SRB: 4-stroke rich burn. – LFG/DG: Landfill gas/digester gas.
  • Not Everyone is Impacted• Area Sources of HAP (i.e., not a major source). – Comply with RICE MACT, by complying with the NSPS – Any new or reconstructed (i.e., after June 12, 2006) RICE at an area source (regardless of capacity) complies with the RICE MACT by complying with the NSPS for SI RICE (i.e., 40 CFR Part 60, Subpart JJJJ).
  • Determining ApplicabilityFacility HAP Status – Area vs. Major Site Rated Capacity – Brake Horsepower (bhp)RICE Construction Status – Existing, New, or RICE Fuel Type – CI vs. SIReconstructedConstruction Date Fire Pump RICE – Yes/No?Manufacture Date Peak Saving RICE – Yes/No?RICE Usage Status – Emergency vs. Historic Operation – Hours Per YearNonemergency
  • Potential Requirements• Emission Limits – Carbon monoxide (CO) or formaldehyde (CH2O) (or THC as a substitute for CH2O)• Notification requirements• Initial and ongoing testing requirements• Monitoring, reporting, and recordkeeping requirements• Fuel requirements• Work practice standards• Generally applicable requirements
  • Emission Limits Existing RICE Located at Area Sources RICE Type Nonemergency RICESite-Rated Emergency or Capacity CI SI 2SLB SI 4SLB SI 4SRB SI LFG/DG Black Start RICE Management Management Management ≤300 Practice Standards Practice Standards Practice Standards CO 49 ppm or Management Management Management 300-500 70% CO Reduction Practice Standards Practice Standards Practice Standards CO 47 ppm or CH2O 2.7 ppm or 93% CO Reduction 76% CH2O Reduction CO 23 ppm or >500 70% CO Reduction
  • Ongoing Compliance• RICE Subject to an emission limit also subject to: – Testing Requirements: • Perform an initial performance test • Perform subsequent performance tests. – Operating Limitations: • Catalyst pressure drop and inlet temperature. – Related monitoring, reporting, and recordkeeping requirements. – Notification Requirements. • Initial notification (due date has passed for existing RICE) – Compliance reports (semiannual or annual) – Fuel requirements
  • Ongoing Compliance RICE not subject to an emission limit also subject to: • Work Practice or Management Practice Standards:  Change oil/air filter, inspect air filter and or spark plugs, hoses/belts at prescribed operating hour intervals  Operate/maintain engine per manufacturer’s instructions or owner- developed maintenance plan  May use oil analysis program as an alternative to prescribed oil changes • Records of maintenance. • No notifications necessary (for the most part) • Fuel requirement
  • Key Points• RICE units vulnerable• Review the RICE MACT and the RICE NSPS• Know your RICE units• Determine your key criteria• Decipher your applicable NESHAP/NSPS requirements• Take appropriate action
  • Key Points• Align your existing maintenance and work practices with those RICE MACT practices that apply – Communicate with RICE maintenance companies to facilitate this alignment• Be ready to comply with your SI RICE by October 19, 2013
  • Proposed Revisions to PADEP Permit Exemption List Roy Rakiewicz, All4 Inc. rrakiewicz@all4inc.com
  • Current Exemption No. 38• Oil and gas exploration and production facilities and operations that include wells and associated equipment and processes used either to: a) drill or alter oil and gas wells; b) extract, process and deliver crude oil and natural gas to the point of lease custody transfer; c) plug abandoned wells and restore well sites, or d) treat and dispose of associated wastes. This includes petroleum liquid storage tanks which are used to store produced crude oil and condensate prior to lease custody transfer (Multiple sources within this subcategory may be exempt from plan approval requirements.). This category does not include gas compressor station engines equal to or greater than 100 HP or gas extraction wells at landfills.• A true blanket exemption
  • Proposed Conditional Exemption No. 38• (i) Wells, wellheads, and associated equipment subject to 40 CFR Part 60 Subpart OOOO provided the exemption criteria specified in Paragraphs iii, iv, v, vi and vii as applicable are met• (ii) Conventional wells, wellheads and associated equipment
  • Proposed Conditional Exemption No. 38• (iii) Leak Detection and Repair – Initial leak survey (60 days after completion) – Annual leak survey – Forward looking infrared (FLIR) or other approved device – For all leaks: • Quantification of leaks • Repair of leaks as expeditiously as practical, no later than 30 days – No detectable organic emissions consistent with 40 CFR Part 60 Subpart OOOO, or – Less than a concentration of 2.5% methane – All leaks and repairs must be recorded.
  • Proposed Conditional Exemption No. 38• (iv) Storage vessels/storage tanks equipped with VOC emission controls achieving emission reduction of 95% or greater – Compliance shall be demonstrated in accordance with 40 CFR Part 60 Subpart OOOO (Uncontrolled PTE > 6 TPY)• (v) Combined VOC emissions from all the sources at the facility must be less than 2.7 tons on a 12-month rolling basis – HAP emissions less than 1,000 lbs. of a single HAP or one ton of a combination of HAPs in any consecutive 12-month period – Emission criteria exclude emissions from well heads meeting the exemption criteria specified in Paragraphs iii (fugitive leaks), iv (NSPS tanks) or vi (flaring) – leaving only non NSPS tanks (< 6 TPY uncontrolled VOC PTE)
  • Exemption No. 38• (vi) Flaring operations used at a wellhead subject to 40 CFR Part 60 Subpart OOOO requirements• (vii) Combined NOX emissions from the stationary internal combustion engines at a facility – less than 100 lbs. /hr., 1000 lbs. /day, – 2.75 tons per ozone season, and – 6.6 tons per year on a 12-month rolling basis – Emission criteria do not include emissions from sources which are approved by plan approvals/GPs• (viii) Non-road engines as defined in 40 CFR, Part 89.
  • Exemption No. 38• Comply with all applicable requirements including notification, recordkeeping, and reporting requirements as specified in 40 CFR Part 60 Subpart OOOO• Demonstrate compliance with the exemption criteria using any generally accepted model or calculation methodology within 180 days of after the well completion or installation of a source
  • Key Points• Proposed conditional exemption No. 38 is more of a general permit than an exemption• Comments are due March 19, 2013• Overall complicated for an exemption, but not terrible• Review the proposed exemption and identify specific points or technical issues and related hardships• Prepare public comments or contribute to public comments being prepared by PIOGA