[Federal Register Volume 82, Number 215 (Wednesday, November 8, 2017)]
[Proposed Rules]
[Pages 51788-51794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24344]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 60
[EPA-HQ-OAR-2010-0505; FRL-9970-55-OAR]
RIN 2060-AT59
Oil and Natural Gas Sector: Emission Standards for New,
Reconstructed, and Modified Sources: Stay of Certain Requirements
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule; notice of data availability.
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SUMMARY: The Environmental Protection Agency (EPA) is issuing this
notice of data availability (NODA) in support of the proposed rule
titled ``Oil and Natural Gas Sector: Emission Standards for New,
Reconstructed, and Modified Sources: Stay of Certain Requirements,''
which was published on June 16, 2017. In this document, the EPA is
providing additional information on several topics raised by
stakeholders and is soliciting comment on the information presented.
The two topic areas are the legal authority to issue a stay and the
technological, resource, and economic challenges with implementing the
fugitive emissions requirements, well site pneumatic pump standards,
and the requirements for certification of closed vent systems by a
professional engineer. This notice also provides an updated cost
savings and forgone benefits analysis for the 2-year stay.
DATES: Comments must be received on or before December 8, 2017.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2010-0505, at https://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Mr. Peter Tsirigotis, Sector Policies
and Programs Division (D205-01), Office of Air Quality Planning and
Standards, Environmental Protection Agency, Research Triangle Park,
North Carolina 27711; telephone number: (888) 627-7764; email address:
[email protected].
SUPPLEMENTARY INFORMATION:
Organization of This Document. The information presented in this
document is organized as follows:
I. Background
II. Legal Authority
III. Stakeholder Input on Sources' Ability To Implement Requirements
A. Fugitive Emissions Requirements
B. Well Site Pneumatic Pump Requirements
C. Professional Engineering Certification Requirements
IV. Estimated Cost Savings, Forgone Benefits, and Net Benefits of
the Proposed Stay
I. Background
On June 16, 2017, the EPA proposed to stay for 2 years certain
requirements that are contained within the final rule titled ``Oil and
Natural Gas Sector: Emission Standards for New, Reconstructed, and
Modified Sources,'' published in the Federal Register at 81 FR 35824,
June 3, 2016 (2016 Rule). This action proposed to stay the fugitive
emissions requirements, the well site pneumatic pump requirements, and
the requirements for certification of closed vent systems by a
professional engineer for 2 years, in order to provide the EPA with
sufficient time to propose, take public comment on, and issue a final
action on the issues concerning the specific requirements on which the
EPA has granted reconsideration. 82 FR 27645, June 16, 2017. While the
proposed 2-year stay was based on the time needed to complete a
rulemaking to address the issues for which we have granted
reconsideration, during this time, the EPA plans to also address all
remaining issues raised in these reconsideration petitions regarding
fugitive emissions, pneumatic pumps, and certification by professional
engineer requirements. The EPA believes that addressing all issues
related to these requirements would provide the regulated entities and
the general public clarity and certainty regarding these requirements.
Subsequent to the 82 FR 27645, June 16, 2017, proposal, the Agency
has heard a broad range of questions, concerns, and constructive
suggestions from stakeholders on how the proposed rule could be
improved. This document is not intended to address all of the issues
that have been raised; we will summarize and respond to all comments in
the final rule. Rather, the purpose of this document is to describe and
seek comment on several ideas raised by stakeholders that may go beyond
those for which the Agency sought comment in the June 16, 2017,
proposal. In this document, we describe the specific issues and ideas
raised by stakeholders and explain which of those ideas we consider to
be within or possibly beyond the scope of comment already requested.
The purpose of this document is to bring these ideas to the attention
of other stakeholders and the public so that they may also provide
comments to assist in developing a final rule.
The feedback the EPA has received since proposing the stay relates
to the EPA's legal authority to stay these requirements and lack of
clarity and other challenges in implementing these three requirements.
With respect to the implementation challenges, the commenters
recommend, as an alternative to the proposed stay, that the EPA amend
the 2016 Rule to extend the periods currently provided in the 2016 Rule
for establishing the necessary infrastructure and phasing in the
requirements for conducting the initial monitoring survey of fugitive
emissions
[[Page 51789]]
and for routing well site pneumatic pump emissions to onsite controls
or processes. The feedback similarly suggests the need for a phase-in
period to allow a scale-up of the number of qualified professional
engineers to meet the demand imposed by the 2016 Rule. The EPA is
soliciting comments on this recommendation. Specifically, the EPA is
soliciting relevant data and information, in particular those related
to the EPA's analyses and assumptions that were used to establish the
phase-in periods in the 2016 Rule, to help inform the EPA why the
appropriate duration of these periods may have been underestimated, as
the feedback suggests. Further, with respect to the requirement for
certification of closed vent systems by a professional engineer, while
in the preamble to the 2015 proposed New Source Performance Standards
(NSPS) the EPA had suggested such certification as a potential remedy
where a storage vessel is improperly designed,\1\ the final 2016 Rule
requires such certification for demonstrating compliance with not only
the storage vessel emission standards, but a number of other emission
standards, thereby affecting a large number of affected sources.\2\
According to the feedback received, the immediate high demand for
qualified professional engineers to meet this certification requirement
has made implementation of this requirement quite challenging. In light
of the feedback, the EPA is soliciting comments, data, and any other
information that would help the EPA determine whether a phase-in period
for this requirement is needed and, if so, the length of such period.
While the comment period on the June 16, 2017, proposal closed on
August 9, 2017, comments on this action may include further commentary
on statements made in the proposed 2-year stay.
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\1\ 80 FR 56649, September 18, 2015.
\2\ 40 CFR 60.5411a(d).
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This action also provides an updated cost analysis for the 2-year
stay, which reflects a revised time frame, as well as corrects a
technical error in the initial analysis. This correction results in a
slight increase in cost savings associated with the proposed 2-year
stay. The EPA has also updated this analysis to include forgone
benefits and net benefits from the proposed 2-year stay. For more
information, see section IV of this document.
II. Legal Authority
The EPA received comments from stakeholders on our legal authority
to stay these requirements or otherwise amend the 2016 Rule to extend
the ``phase-in'' periods currently provided in that rule. See Docket ID
No. EPA-HQ-OAR-2010-0505-10577. Specifically, noting that these
requirements are not mandated by Clean Air Act (CAA) section
111(b)(1)(B), the commenter interprets CAA section 111 as authorizing
the EPA to extend compliance deadlines or establish future compliance
dates. The commenter also cites section 705 of the Administrative
Procedure Act (APA) to provide the EPA authority to stay these
requirements pending judicial review. The commenter interprets the term
``postpone'' in section 705 of the APA to include ``delay, defer,
adjourn, shelve, table, and put on hold.'' Id. at 7. Lastly, the
commenter argues that the EPA's general rulemaking authority under
section 301(a) of the CAA authorizes a rulemaking staying these
requirements because ``Congress has not written a `clear impediment to
the issuance' '' of such stay. Id. at 12 (citations omitted). The EPA
solicits comments on these legal theories provided in this comment
document. See Docket ID No. EPA-HQ-OAR-2010-0505-10577.
For the reasons stated below, the EPA has legal authority to amend
the 2016 Rule to either stay certain provisions or otherwise revise
certain aspects of the rule. The EPA promulgated the 2016 Rule pursuant
to section 111(b)(1)(B) of the CAA in accordance with the notice-and-
comment rulemaking procedures under section 307(d) of the CAA. 81 FR
35828. The EPA is using the same statutory authority and following the
same procedures in the present rulemaking to amend the 2016 Rule to
stay certain requirements (as described in the June 16, 2017, proposal)
or make the suggested changes to aspects of these requirements as
described in this action (i.e., extension or provision of ``phase-in''
periods). In addition, section 301(a) of the CAA provides the Agency
with broad authority to prescribe regulations, including revisions to
prior rulemakings, as necessary to carry out the Administrator's
authorized functions under the statute. ``The power to decide in the
first instance carries with it the power to reconsider.'' Trujillo v.
Gen. Elec. Co., 621 F.2d 1084, 1086 (10th Cir. 1980); see also, United
Gas Improvement Co. v. Callery Properties, Inc., 382 U.S. 223, 229
(1965); Mazaleski v. Treusdell, 562 F.2d 701, 720 (D.C. Cir. 1977).
Section 111 of the CAA requires the EPA to list a source category
under that section if, ``in [the EPA Administrator's] judgment it
causes, or contributes significantly to, air pollution which may
reasonably be anticipated to endanger public health or welfare.'' Once
a source category is listed, CAA section 111(b)(1)(B) requires that the
EPA promulgate ``standards of performance'' for new sources in such
source category. In addition, CAA section 111(b)(1)(B) requires the EPA
to ``at least every 8 years review and, if appropriate, revise''
performance standards unless the ``Administrator determines that such
review is not appropriate in light of readily available information on
the efficacy'' of the standard. In 1979, the EPA published a list of
source categories, including Oil and Natural Gas, under section 111(b)
of the CAA. See Priority List and Additions to the List of Categories
of Stationary Sources, 44 FR 49222 (August 21, 1979) (``1979 Priority
List''). In 1985, the EPA promulgated NSPS for this source category
that addressed volatile organic compound(s) (VOC) emissions from
leaking components at onshore natural gas processing plants (40 CFR
part 60, subpart LLL) and sulfur dioxide emissions from natural gas
processing plants (40 CFR part 60, subpart KKK). In 2012, the EPA
conducted its required review under CAA section 111(b)(1)(B), and
promulgated NSPS subpart OOOO, which included updates to subparts KKK
and LLL standards as well as additional VOC standards for this source
category.
In addition to the mandatory obligations described above, the EPA
has discretion under CAA section 111(b)(1)(B) to add new standards of
performance for additional pollutants or emission sources not
previously covered concurrent with, or independent of, the 8-year
review. Pursuant to section 111(b)(1)(B) of the CAA, the EPA has
promulgated new performance standards for previously unregulated
sources concurrent with the 8-year review. See, e.g., 71 FR 9866
(February 27, 2006) (new particular matter standards for boilers); 73
FR 35838 (June 24, 2008) (new nitrogen oxide standards for additional
sources at refineries); 77 FR 49490 (August 16, 2012) (new VOC
standards for additional sources at oil and gas facilities). However,
the appropriate time for promulgating such new standards may not always
align with the 8-year review cycle. See, e.g., 73 FR 35838, 35859. (The
EPA did not promulgate performance standards for greenhouse gas
emissions as part of the 8-year review of the NSPS for refineries
because the Agency was still in the process of gathering information
and reviewing controls.) While the EPA could conduct the required
periodic review sooner than every 8 years, which
[[Page 51790]]
would potentially allow the EPA to conduct the review and set
additional standards concurrently, the EPA does not believe that the
schedule for the statutorily required review should be driven by the
timing for promulgating additional performance standards that are
discretionary. On the other hand, there is no reason that the EPA's
authority and discretion to promulgate such standards should be
constrained by the timing of the 8-year review. The EPA, therefore,
reasonably interprets CAA section 111(b)(1)(B) to allow the Agency to
exercise its discretion to promulgate new performance standards for
additional sources or pollutants when appropriate (concurrent with or
independent of the 8-year review).
Pursuant to this authority under section 111(b)(1)(B) of the CAA,
the EPA promulgated the 2016 Rule which contained, among other things,
a number of new performance standards for emission sources not
previously covered, including the fugitive emissions components at well
sites and compressor stations, as well as pneumatic pumps at well
sites.\3\ The EPA promulgated the fugitive emissions requirements for
well sites and compressor stations pursuant to section 111(h) of the
CAA, which authorizes the EPA to set a design, equipment, work
practice, or operational standard where it is not technically feasible
to prescribe or enforce an emission standard. 80 FR 56593, 56637
(September 18, 2015). A work practice standard generally consists of a
set of activities that sources must perform and a time period for
completing the activities. See, e.g., 40 CFR 60.632 (180 days from
initial startup to comply with the requirements to detect and repair
leaks at onshore oil and natural gas processing plants). Similar to
existing work practice standards, the fugitive emissions requirements
in the 2016 Rule specify a set of activities (e.g., developing an
emission monitoring plan, conducting initial and subsequent surveys,
repair or replacement, and resurvey of fugitive emissions components
according to the plan) and time frames for performing the activities.
40 CFR 60.5397a. Specifically, the 2016 Rule specifies a period of time
(i.e., until June 3, 2017, or 60 days after starting up production,
whichever is later) for sources to establish the necessary
infrastructure, develop a monitoring plan, secure the required
personnel and equipment, and conduct the initial monitoring survey of
fugitive emissions components at well sites and compressor stations. 81
FR 35858-9 and 35863, June 3, 2016.
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\3\ The 2016 Rule also includes standards for reducing methane
emissions from the oil and natural gas sector, as well as revisions
to the previously promulgated Oil and Natural Gas NSPS (40 CFR part
60, subpart OOOO).
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The 2016 Rule similarly did not establish an emission limit for
well site pneumatic pumps, but instead requires that emissions from
well site pneumatic pumps be routed to an available control or process
onsite, unless a qualified professional engineer certifies that it is
not technically feasible to do so. As with the fugitive emissions
requirements, the 2016 Rule similarly provided a period of time (until
November 30, 2016) for owners and operators to conduct the ground work
required for routing well site pneumatic pumps to an available onsite
control or process (or, if it is not technically feasible to do so, for
obtaining a certification by a qualified engineer of the technical
infeasibility). 81 FR 35859, June 3, 2016.
The 2016 Rule also added a requirement that all closed vent systems
routing emissions from storage vessels, compressors, and pneumatic pump
affected facilities be certified by a qualified professional engineer.
This certification requirement is not an emission standard under CAA
section 111(a)(1) or a design, equipment, work practice, or operational
standard under CAA section 111(h); it is a compliance measure that
would provide additional assurance that sources are meeting the
emission standards for storage vessels, compressors, and pneumatic
pumps. Some of these emission standards, such as those for storage
vessels and compressors, were promulgated in 2012 under section
111(b)(1)(B) of the CAA.
Through the June 16, 2017, action, the EPA is proposing to amend
the 2016 Rule to stay the fugitive emissions requirements, the well
site pneumatic pump requirements, and the certification requirement
described above. Since then, the EPA has received suggestions that,
instead of staying these requirements, the EPA extend the current
phase-in periods for the fugitive emissions requirements and well site
pneumatic pump requirements, as well as providing one for the
requirement for certification of closed vent systems by a professional
engineer. Agencies have inherent authority to reconsider past decisions
and to revise, replace, or repeal a decision to the extent permitted by
law and supported by a reasoned explanation. FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009); Motor Vehicle Mfrs. Ass'n v.
State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 42 (1983) (``State
Farm''). This includes a decision regarding the appropriate length of
the phase-in periods provided in the 2016 Rule for specific
requirements, as well as whether to provide one for phasing in an
additional compliance assurance measure, or whether to stay these three
requirements at issue while they are being revised through rulemaking.
Section 301(a) of the CAA provides the EPA with broad rulemaking
authority to carry out the CAA. Notwithstanding the potential
constraint that other parts of the CAA may have on the EPA's authority
to stay a rule pursuant to CAA section 301(a), see Natural Resources
Defense Council, Inc. v. Reilly, 976 F.2d 36, 41 (D.C. Cir. 1992),
there is no such constraint here with respect to staying the fugitive
emissions requirements, the well site pneumatic pump requirements, and
the certification requirement in the 2016 Rule, the promulgation of
which was discretionary and not compelled by CAA section 111(b)(1)(B).
In a case analyzing a similar general rulemaking authority granted to
the Federal Reserve Board by the Truth in Lending Act, the Supreme
Court held quite broadly that, where ``the empowering provision of a
statute states simply that an agency may make such rules and
regulations as necessary to carry out the provisions of an act, the
validity of a regulation promulgated thereunder will be sustained so
long as it is `reasonably related to the purposes of the enabling
legislation.' '' Mourning v. Family Publications Service, Inc., 411
U.S. 356, 369 (1973) (quoting Thorpe v. Housing Authority of City of
Durham, 393 U.S. 268, 280-81 (1969)). In a CAA section 301(a) case, the
District of Columbia Circuit Court of Appeals held that CAA section
301(a) authorizes the EPA to use rulemaking to issue the enhanced
vehicle inspection and maintenance programs guidance under section 182
of the CAA. Natural Res. Def. Council, Inc. v. EPA, 22 F.3d 1125 (D.C.
Cir. 1994). Noting the absence of any provision in CAA section 182
preventing issuing such guidance through rulemaking, the Court deferred
to the Agency's determination that the regulation was necessary as long
as it provided a reasoned explanation. Id. at 1148.
The EPA's proposed stay, as well as the stakeholder-suggested
extension or provision of ``phase-in'' periods for the three
requirements at issue, is consistent with the purposes of the CAA and,
therefore, authorized under section 301(a) of the CAA. The EPA
promulgated these requirements for purposes of achieving meaningful
emission reductions under the regulatory schemes established in the
2016 Rule to complement other emission reduction efforts and address
[[Page 51791]]
certain challenges (e.g., technical infeasibility and time needed for
building up for necessary equipment and trained personnel). For
instance, the EPA promulgated both the fugitive emissions requirements
and a process for applying and obtaining an alternative means of
emissions limitations (AMEL) with the clear intent to achieve emission
reductions from currently uncontrolled sources while still allowing
sources subject to effective existing state fugitive emissions programs
an avenue to continue implementing such programs, as well as to
encourage the use of innovative technology. Therefore, in promulgating
the fugitive emissions requirements, the EPA clearly intended and
anticipated the implementation of alternatives in lieu of such
requirements. However, stakeholders indicated that this purpose of the
2016 Rule was frustrated by the fact that the current AMEL provisions
are not sufficiently clear to allow sources to take advantage of them.
Stakeholders suggested that further revision or clarification would be
required before sources can apply and obtain approval to use an
innovative technology or implement their current state program in lieu
of the 2016 Rule requirements. The EPA received input from stakeholders
stating that without staying the fugitive emissions requirements
pending the EPA's reconsideration, the regulated entities would incur
significant and potentially unnecessary additional costs and compliance
burden to implement the 2016 Rule, and, in some cases, at the expense
of disrupting or complicating compliance with applicable state
programs, just to later revert back to what they were doing in the
first place. These were the consequences that the EPA sought to avoid
by promulgating the AMEL in the 2016 Rule. While not all states have
fugitive emissions programs, considering that many states with high oil
and gas production do have such programs in place,\4\ it is not clear
that the marginal additional emission reductions achieved during the
EPA's reconsideration process outweigh the potential disruption to
existing state programs and company-specific programs. In light of the
discussion above, the EPA believes that the proposed stay of the
fugitive emission requirements pending its reconsideration process is
reasonable and authorized under sections 111 and 301 of the CAA.
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\4\ Including California, Colorado, North Dakota, Ohio,
Pennsylvania, Texas, Utah, and Wyoming.
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With respect to the well site pneumatic pump requirements, the 2016
Rule acknowledges that routing the pneumatic pump emissions to an
available onsite control or process may not always be technically
feasible and, therefore, provides a technical infeasibility exemption
for such routing except for pneumatic pumps located at a ``greenfield
site.'' However, some sources could not tell based on the 2016 Rule
definition of ``greenfield site,'' which was not proposed for notice
and comment, whether they are ``greenfield sites,'' even though they
are encountering technical infeasibility, and, therefore, risk being in
noncompliance. Delaying these requirements until the EPA resolves this
potential problem through its reconsideration process is consistent
with the 2016 Rule to require emission reductions from well site
pneumatic pumps only where it is technically feasible to do so.
Lastly, as mentioned above, the closed vent certification by
professional engineer requirement is a compliance measure included in
the 2016 Rule to provide additional assurance that sources are meeting
the emission standards for a wide range of equipment, some of which
have been in place since 2012. The EPA granted reconsideration of this
requirement because the EPA had not considered its cost and whether the
additional assurance justifies such expenditure. The EPA's proposed
stay while conducting this evaluation is clearly consistent with
section 111 of the CAA, which expressly identifies cost as a factor for
consideration when promulgating emission standards. See CAA section
111(a)(1).
For the reasons stated above, both the proposed stay and the
suggestion by stakeholders to extend (or provide) the phase-in periods
are lawful exercises of the EPA's statutory authority and discretion
under the CAA. The EPA solicits comment on the EPA's legal authorities
for taking these actions. In addition, as mentioned above, the EPA
solicits comment on stakeholder input \5\ on the EPA's legal
authorities to take these actions.
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\5\ See, for example, Docket ID No. EPA-HQ-OAR-2010-0505-10577
and Docket ID No. EPA-HQ-OAR-2010-0505-12142.
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III. Stakeholder Input on Sources' Ability To Implement Requirements
In the June 16, 2017, proposal, the EPA explained that it is
proposing to stay the requirements at issue pending reconsideration due
to its concern that sources should not be compelled to comply with
these requirements pending the EPA's reconsideration of issues
associated with these requirements, as these issues impact the ability
of a wide range of sources to achieve and show compliance with their
applicable standards. 82 FR 27646-8, June 16, 2017. In that action, the
EPA proposed to amend the 2016 Rule by staying these requirements
pending reconsideration.
Since proposing to stay the requirements pending reconsideration,
the EPA received feedback from some stakeholders indicating that there
are additional issues affecting sources' ability to implement the above
mentioned requirements besides those for which the EPA has granted
reconsideration.\6\ Some stakeholders suggested that the EPA should
amend the 2016 Rule by extending the ``phase-in'' periods provided in
the 2016 Rule for a build-up of the number of trained personnel (i.e.,
certified monitoring survey contractors, qualified professional
engineers) and equipment (i.e., monitoring instruments) required to
meet the demand imposed by the fugitive emissions requirements and the
well site pneumatic pump requirements. The EPA anticipated that during
these periods, ``sources will begin to phase in these requirements as
additional devices and personnel become available.'' 81 FR 35859 and
35863, June 3, 2016. We solicit comment on the suggestion that these
periods be extended.
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\6\ See, for example, Docket ID No. EPA-HQ-OAR-2010-0505-11108
and Docket ID No. EPA-HQ-OAR-2010-0505-12337.
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Some stakeholders suggested that these concerns may also exist with
respect to other provisions requiring professional engineer
certifications. The EPA solicits comment on whether to similarly
provide a phase-in period to allow a scale-up of the number of
qualified professional engineers to meet the demand imposed by the 2016
Rule, which requires certification by such professionals of (1) the
closed vent systems routing emissions from various equipment and (2)
technical infeasibility of routing emissions from a well site pneumatic
pump to an existing control device or process onsite. The EPA
additionally solicits comment on the length of the phase-in period
necessary in order to achieve this scale-up.
As mentioned above, the EPA previously anticipated that some of
these issues might be present for a more limited period and, therefore,
provided in the 2016 Rule a ``phase-in'' period for both the fugitive
emissions requirements and the pneumatic pump requirements. 81 FR
35851, 35858-9, 35863, June 3, 2016. Specifically, in
[[Page 51792]]
regards to the fugitive emissions requirements, in light of the large
number of sources, the EPA concluded that time was needed to allow an
increase in production of the required equipment and scale-up of
trained personnel, as well as for sources to establish the groundwork
and secure the necessary monitoring equipment and personnel. The 2016
Rule, therefore, provided a ``phase-in'' period by allowing sources to
conduct initial monitoring by June 3, 2017, or within 60 days after
production starts, whichever is later. 81 FR 35858-9, 35863, June 3,
2016. Some stakeholders suggested that some sources continue to have
difficulty securing the necessary equipment and/or personnel to conduct
the required monitoring survey of fugitive emissions. For a similar
reason, the 2016 Rule provided a phase-in period until November 30,
2016, to connect well site pneumatic pumps to an existing control or
process onsite. 81 FR 35851, June 3, 2016.
However, some stakeholders suggested that the time provided in the
2016 Rule may not have been adequate to accommodate the number of
affected sources subject to these requirements. In addition, some
stakeholders indicated that sources that must now comply with these
requirements upon startup may be particularly affected by these
challenges. Therefore, the EPA solicits comment and information on
these challenges that sources are experiencing in carrying out these
requirements. Further, the EPA is soliciting comment on whether, in
light of the numerous ongoing compliance issues, the EPA should amend
the above mentioned phase-in periods in the 2016 Rule instead of simply
staying the requirements. The EPA additionally is soliciting comment on
the appropriate length of a phase-in period to address the challenges
sources are experiencing in carrying out the requirements in the 2016
Rule. A stay would mean that sources do not have to comply while the
stay is in place. It would not, however, change any dates in the 2016
Rule. This could create some uncertainty for sources regarding their
obligations upon expiration of the stay. A change to the phase-in
periods (or the addition of such a period where the rule does not
currently provide one) could provide greater certainty to sources.
Some stakeholders suggested that the challenges regarding acquiring
necessary equipment and trained personnel may also exist with respect
to the requirement of certification of closed vent systems by a
professional engineer. We note that the 2016 Rule does not have a
phase-in period associated with the closed vent system certification by
professional engineer requirement, which must be met by a wide range of
sources (i.e., storage vessels, compressors, and pneumatic pumps), even
though the EPA acknowledged that securing such professional engineer
certification may take time. 81 FR 35851, June 3, 2016. The EPA,
therefore, solicits comment on whether time (and how much) should be
provided to allow a further building up of the number of professional
engineers experienced in these requirements to meet the demand posed by
this certification requirement.
As mentioned above, the EPA solicits comment on the appropriate
length of time needed to address the challenges sources are
experiencing in carrying out these requirements in the 2016 Rule and
the suggestion to extend the ``phase-in'' periods established in the
2016 Rule for the fugitive emissions requirements and the well site
pneumatic pump requirements, as well as the suggestion to provide a
phase-in period for the requirement for certification of closed vent
systems by a professional engineer.
A. Fugitive Emissions Requirements
The EPA proposed to stay for 2 years the fugitive emissions
requirements at well sites and compressor stations while it reconsiders
the process and criteria for requesting and receiving approval for the
use of an AMEL and the applicability of the fugitive emissions
requirements to low production well sites. 82 FR 27646, June 16, 2017.
These issues determine the universe of sources that must implement the
fugitive emissions requirements. Id. The EPA has received feedback from
some stakeholders that securing certified monitoring survey contractors
and monitoring instruments has been more difficult than predicted, and,
therefore, the EPA is soliciting comment on the availability of
contractors and monitoring instruments, and the impact on owners and
operators complying with the requirements of the 2016 Rule. The EPA is
soliciting comment on extending the phase-in period and the appropriate
length of the phase-in period to allow for an adequate build-up of the
personnel and equipment required for meeting the fugitive emissions
requirements. Specifically, the EPA solicits comment on whether the
impact of this requirement and any feasibility issues are relevant to
few sources or a systemic issue related to many sources.
The EPA also received feedback regarding the applicability of the
fugitive emissions requirements to third-party equipment at well sites
which is ancillary to production (e.g., equipment such as meters owned
by midstream operators). The 2016 Rule requires that all fugitive
emissions components at a well site be monitored and repaired, but
there has been confusion as to the appropriate scope of components that
are included in the definition of the well site for the fugitive
emissions requirements. During the public comment period on the 2016
Rule, the EPA received feedback that ancillary midstream assets (e.g.,
meters) should be excluded from the fugitive emissions requirements
because they are owned by legally distinct companies from the well site
owner and operator and could have limited emissions.\7\ The EPA's
response to this comment was to state in its Response to Comments that
``the resolution for any leaking components identified during surveys
can be managed by the operator through cooperative agreements with
other potential owners at the site.'' \8\ The EPA has since received
feedback that there are complicated site configurations and contractual
arrangements that the EPA did not consider in the 2016 Rule that could
prevent compliance, including situations where the third-party
equipment could be made subject to the 2016 Rule based on actions made
by another operator.\9\ The EPA is soliciting comment on this feedback,
specifically, legal and logistical issues that could prevent midstream
operators, or other operators of ancillary third-party equipment, from
compliance with the 2016 Rule, and suggestions for addressing this
issue. The EPA additionally solicits comment on the number of contracts
that would need to be renegotiated and associated burden. The EPA is
further soliciting comment on whether, in light of the above, the EPA
should stay or otherwise extend the phase-in period as it applies to
third-party equipment on well sites until after the EPA has addressed
this compliance issue.
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\7\ See Docket ID No. EPA-HQ-OAR-2010-0505-7237.
\8\ See Docket ID No. EPA-HQ-OAR-2010-0505-7632, p. 4-282.
\9\ See Docket ID No. EPA-HQ-OAR-2010-0505-12245 and Docket ID
No. EPA-HQ-OAR-2017-0346-0328.
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The EPA additionally received feedback regarding technical, safety,
and environmental issues associated with the delay of repair provisions
in the 2016 Rule. The EPA proposed that if ``repair or replacement [of
a leaking fugitive emissions component] is technically infeasible or
unsafe to repair during operation of the unit, the repair or
replacement must be completed during the next scheduled shutdown or
[[Page 51793]]
within 6 months, whichever is earlier.'' 80 FR 56668, September 18,
2015. Stakeholders responded with concerns about ``delays lasting
longer than six months due to availability of supplies needed to
complete repairs and information regarding the frequency of delayed
repairs. Some commenters also indicated that in some cases, requiring
prompt repairs could lead to more emissions than if repairs were able
to be delayed, for example if a well shut-in or vent blow-down is
required.'' 81 FR 35858, June 3, 2016. In response to these comments,
the EPA extended the time a component can be placed on delay of repair
from 6 months to 2 years, and, in conjunction with this extension,
added that ``however, if an unscheduled or emergency vent blowdown,
compressor station shutdown, well shutdown, or well shut-in occurs
during the delay of repair period, the fugitive emissions components
would need to be fixed at that time.'' Id.
Since publication of the 2016 Rule, the EPA has received feedback
that requiring repair or replacement of fugitive emissions components
during unscheduled or emergency vent blowdowns could result in natural
gas supply disruptions, safety concerns, and increased emissions.\10\
In particular, stakeholder feedback suggests that compliance with this
provision could result in prolonged shutdowns impacting natural gas
supply if necessary parts and skilled labor is unavailable, and
avoidable blowdowns resulting in greater emissions than the leaking
component.\11\ This feedback additionally indicates that these events
may not necessarily result in the blowdown of all equipment located
onsite and, thus, the equipment needing repair may not have been
affected by the blowdown.12 13 The EPA is soliciting comment
on this feedback, specifically, the shutdown, shut-in, or blowdown
scenarios that result in the technical, safety, and environmental
issues described, and suggestions for addressing these issues. The EPA
is further soliciting comment on whether, in light of the above, the
EPA should stay or otherwise extend the phase-in period as it applies
to equipment requiring delay of repair at well sites and compressor
stations until after the EPA has addressed this compliance issue.
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\10\ See Docket ID No. EPA-HQ-OAR-2017-0346-0328 and Docket ID
No. EPA-HQ-OAR-2010-0505-12245.
\11\ Id.
\12\ Id.
\13\ Blowdown refers to the release of entrained gas from
equipment that causes a reduction in system pressure or a complete
depressurization. For example, a blowdown may occur to reduce line
pressure and discharge gas to ensure safe working conditions during
maintenance and repair activities.
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B. Well Site Pneumatic Pump Requirements
The EPA proposed to stay for 2 years the requirements for well site
pneumatic pump standards while it reconsiders the technical
infeasibility exemption and the definition of ``greenfield site.'' 82
FR 27647, June 16, 2017. The EPA acknowledges that the technical
infeasibility exemption that the EPA finalized in the 2016 Rule adopted
a different approach than previously applied to the oil and gas
industry and created an unanticipated and unnoticed distinction between
``greenfield'' (new development) and ``non-greenfield'' sites. For a
discussion on the technical infeasibility exemption provided in the
2016 Rule, please see 81 FR 35844-5, June 3, 2016. Some stakeholders
have suggested that this distinction has caused confusion among owners
and operators on what sites qualify for the technical infeasibility
exemption. The EPA received stakeholder feedback that some owners and
operators may have been unintentionally restricted in the design of new
sites that, for technical reasons, could not employ controls or
processes for certain pneumatic pump installations. The EPA is
soliciting comment on technical constraints of new ``greenfield'' sites
and specific site designs such as these which present challenges in
implementing the well site pneumatic pump requirements in the 2016
Rule. The EPA is, therefore, soliciting comment on extending the phase-
in period for 2 years, the time period the EPA estimates its
reconsideration process and the issuance of the resulting rule would
take, so that the EPA may provide the necessary clarification or
revision in conjunction with its reconsideration process, thereby
addressing all issues in one rulemaking. The EPA is also soliciting
comment on extending the phase-in period and the appropriate length of
the phase-in period for the well site pneumatic pump requirements as an
alternative to the proposed stay of these requirements.
C. Professional Engineering Certification Requirements
The EPA proposed to stay for 2 years the requirement for closed
vent system certification by professional engineer while the EPA
evaluates the benefits, as well as the cost and other compliance
burden, associated with this requirement. 82 FR 27647, June 16, 2017.
Such costs and associated burden are significant in light of the number
of affected sources. Based on the EPA's estimates, approximately 16,000
affected sources (i.e., pneumatic pumps, compressors, and storage
vessels) came online between the proposed rule and the final 2016 Rule,
not counting those that have and will come online since. The EPA
received feedback that owners and operators had to reanalyze and
potentially redesign the closed vent systems in order to meet this
certification requirement. Subsequent to the proposed stay, the EPA
received feedback from some stakeholders that owners and operators have
struggled to obtain professional engineers to complete these
certifications primarily because of a shortage of professional
engineers certified in each state of operation with experience in the
design of these systems. In light of this, the EPA is soliciting
comment on the availability of professional engineers qualified in each
state of operation and experienced in the oil and gas field and the
costs associated with completing the certification requirements in the
2016 Rule. The EPA additionally solicits comment on the costs of
reanalyzing and redesigning sites in order to comply with the
requirements of the 2016 Rule. Lastly, in light of the challenges
described above, the EPA is soliciting comment on providing a period to
phase in this certification period as an alternative to staying this
requirement. The EPA emphasizes that the proposed stay for this
certification requirement would not affect sources' obligation to meet
the underlying applicable emission standards during that time frame. As
explained above, this certification requirement is not an emission
standard, but a compliance measure to provide additional assurance that
the emission standards are being met.
IV. Estimated Cost Savings, Forgone Benefits, and Net Benefits of the
Proposed Stay
Since the June 16, 2017, proposal, the EPA has updated the economic
analysis presented in the proposed stay to include estimates of the
forgone benefits associated with the proposed rule. In addition, the
updated analysis reflects a revised time frame and corrects a technical
error in the calculation of cost savings, resulting in a minor increase
in cost savings associated with the proposed rule. The previous
analysis assumed that the proposed 2-year stay would cover the time
period from September 2017 through September 2019. As September has
passed, the analysis has been updated to reflect a time frame beginning
in January 2018 and ending in December 2019.
[[Page 51794]]
The present value of the updated cost savings of the proposed stay
are $270 million at a discount rate of 7 percent and $280 million at a
discount rate of 3 percent. The present value of the forgone climate
benefits using the domestic social cost of methane estimates are $11
million at 7 percent and $37 million at 3 percent. The present value of
net benefits is $250 million at 7 percent, and $240 million at 3
percent.
The equivalent annualized values of the cost savings are $100
million per year when using a 7-percent discount rate and $99 million
per year using a 3-percent discount rate. The equivalent annualized
values are the annualized present values, or the even flow of the
present values, over the years affected by the proposal. The equivalent
annualized value of the forgone climate benefits is $4.3 million per
year at 7 percent and $13 million per year at 3 percent. The equivalent
annualized value of net benefits is $97 million per year at 7 percent,
and $86 million per year at 3 percent. Please see the memorandum
``Estimated Cost Savings and Forgone Benefits Associated with the
Proposed Rule, Oil and Natural Gas: Emission Standards for New,
Reconstructed, and Modified Sources: Stay of Certain Requirements''
available in Docket ID No. EPA-HQ-OAR-2010-0505 for details.
Dated: November 1, 2017.
E. Scott Pruitt,
Administrator.
[FR Doc. 2017-24344 Filed 11-7-17; 8:45 am]
BILLING CODE 6560-50-P