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Vol. 23, No.38 Week of September 23, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

EPA proposes change

Requirements for monitoring methane emissions, remediation, would be softened

Alan Bailey

Petroleum News

On Sept. 11 the Environmental Protection Agency announced a proposed new rule that would loosen the provisions in a rule implemented by the Obama administration in 2016, designed to reduce methane emissions from certain oil and gas operations. The 2016 rule came as one of a series of regulatory moves designed to reduce U.S. greenhouse gas emissions - methane is generally recognized as a particularly potent greenhouse gas.

The regulations under the rule require regular inspection of certain equipment to locate methane leaks and remedial action to deal with any leaks that are detected.

The EPA says that its proposed new rule would “significantly reduce regulatory burdens, saving the industry tens of millions in compliance each year. The changes also would streamline requirements and improve alignment between EPA’s rule and existing state programs.”

Frequency of monitoring

Under the 2016 rule, the operator of a well site had to survey the site twice per year, to monitor for methane emissions. The proposed new rule would relax this requirement to annual monitoring, except for low production wells, which would only have to be surveyed every two years. A low-production well is defined as having production of less than 15 barrels of oil equivalent per day. And the proposed new regulations would allow all monitoring to be stopped for a well where all production and processing equipment has been removed.

While the 2016 rule required methane monitoring at compressor stations to be conducted every quarter, the new rule proposes reducing that monitoring frequency to be every six months, or annually.

The new rule also sets specific regulations for the methane emissions monitoring of compressor stations on Alaska’s North Slope: The timing requirements for the start of emissions monitoring would recognize the limitations of starting the monitoring in the winter in that region.

Repair requirements

In terms of conducting necessary repairs after a methane leak has been detected, the EPA is proposing extending the time within which a repair must be executed. Currently a repair must be carried out within 30 days. Under the proposed change, recognizing that attempted repairs are not always successful, a first attempt at a repair must be conducted within 30 days, but an operator would have up to 60 days to complete the repair.

And the new rule attempts improved alignment with state programs by allowing operators to meet certain requirements of some states as an alternative to meeting specific aspects of EPA’s rule.

EPA is also proposing some changes to methane emission regulations that apply to the use of pneumatic pumps.

In addition, the new rule proposes improvements to the procedure for the approval of some other forms of methane emissions limitation, as an alternative to meeting the EPA’s specified monitoring and repair requirements.

Impact of the changes

The EPA says that the proposed changes to the regulations will save the oil and gas industry between $66 million and $75 million per year, depending on the discount rate used and the frequency of monitoring required at compressor stations. However, the changes would also increase methane emissions, potentially by 380,000 to 480,000 short tons between 2019 and 2025: That is equivalent in terms of greenhouse gas potency to 8.5 million to 11.0 million metric tons of carbon dioxide.

The EPA is accepting comments on it proposals for up to 60 days from the publication of the new rule in the Federal Register. The agency says that it is continuing to consider “broader policy issues in the 2016 rule,” and that these issues will be addressed in a separate proposal at a later date.

Mixed reactions

“We welcome EPA’s efforts to get this right and the proposed changes could ensure that the rule is based on best engineering practices and cost-effective,” said Howard Feldman, senior director of regulatory and scientific affairs for the American Petroleum Institute. “Significantly, methane emissions from the oil and natural gas industry are already down 14 percent since 1990 while production has increased by 50 percent. Clean natural gas produced through advanced technologies like hydraulic fracturing has helped reduce carbon emissions to 25-year lows. U.S. air quality continues to improve as the natural gas and oil industry remains committed to reaching our shared goals of protecting public health and the environment while meeting the nation’s energy needs.”

“It’s unfortunate that the Trump administration is once again ignoring facts and common sense only to put the interests of the nation’s worst-run oil and gas companies ahead of the health and welfare of all Americans,” said Matt Watson, associate vice president for energy for the Environmental Defense Fund. “The proposal would severely weaken protections that have been in effect for a year, diminishing vital safeguards that would otherwise prevent 300,000 short tons of methane pollution, 150,000 short tons of smog-forming pollutants, and 1,900 short tons of toxic pollutants per year by 2020, with further reductions by 2025.”

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