OIL AND GAS INDUSTRYFEDERAL STANDARDS CHANGES

Anne M. Inman, P.E.Air Permits Division

September 11, 2012

NSPS OOOONESHAP HHNESHAP HHH

Today’s Topics

Proposal August 23, 2011

Prepublication EPA Final Rule April 17, 2012

Federal Register Publication August 16, 2012

Effective Date October 15, 2012*

New Federal Requirements Dates

Affected Facilities Include:◦Natural Gas Well Completions◦Storage Vessels◦Pneumatic Controllers◦Centrifugal & Reciprocating Compressors◦Glycol Dehydrators ◦Gas Plant Fugitives and Treatment Units

NSPS OOOO NESHAP HH and HHH

• Regulations aimed at reducing Volatile Organic Compounds (VOCs)

• Applicability for natural gas wells • Excludes crude oil wells• Focuses on flowback period for fractured and

refractured wells

Natural Gas Well Completions

◦Phase 1: As of Aug 23, 2011 and before Jan. 1, 2015, operators must flare or use reduced emissions completions (RECs) (also known as green completions) unless combustion is a safety hazard or is prohibited by state or local regulations.

◦Phase 2: Beginning Jan. 1, 2015, operators must capture the gas and make it available for use or sale, i.e. green completions and use combustion control unless combustion is a safety hazard or is prohibited by state or local regulations.

Phased-In Approach for Well Completions

Green completions are not required for: New exploratory (“wildcat”) wells or delineation

wells (used to define the borders of a natural gas reservoir), because they are not near a pipeline to bring the gas to market.

Hydraulically fractured low-pressure wells, where natural gas cannot be routed to the gathering line. Operators may use a simple formula based on well depth and well pressure to determine whether a well is a low-pressure well.

Exceptions for New Well Completions

Refractured wells using green completions will not be considered to be “modified” if they meet notification and reporting requirements for new wells.

Refractured wells that flare are considered modified and thus subject to the NSPS requirements.

Refractured Natural Gas Wells

Notify the Administrator in writing or by e-mail no later than two days before completion work begins

Compliance with state advance notification requirements satisfies the federal requirement

Options for notification in development by TCEQ and RRC

Notification Requirements

The final rule allows for individual well reports or company-wide reports following either of two options:

1. Traditional report: Must detail each well completion, and include information on compressors, pneumatic controllers, and storage tanks constructed, modified or reconstructed during the year.

2. List of all well completions with photographic documentation of each green completion at each site. The photo must include digital stamps the geographic coordinates of the well and the date of the well completion.

Annual Reporting

After 8/23/11, any new, modified, or reconstructed storage tanks with VOC emissions of ≥ 6 TPY must reduce VOC emissions by at least 95%

Control Options

1. Route emissions to a combustion device or 2. Use vapor recovery (condensor)

Storage Vessels

Timing: Applicable October 15, 2013.

Owners/operators at sites with no wells in production will have 30 days to determine the emissions from a tank; and another 30 days to install controls.

Storage Vessels

Applicable to Permanent Tanks

Potentially Applicable to Portable Tanks ◦ If located on a site ≥ 180 consecutive days◦ If temporary tanks removed before the 180 days, but

other tanks return to the site within 30 days, the timing is not reset and the entire period applies

◦Must maintain clear records of all temporary and portable tanks at a site

Storage Vessels

At oil and natural gas well sites from wellhead to processing plant:◦Applies to continuous bleed natural gas-driven

pneumatic controllers with a bleed rate greater than 6 scfh between wellhead and natural gas processing plant if constructed or modified after 8/23/11.

◦Applicable October 15, 2013.

◦Exceptions for applications requiring high-bleed controllers for certain purposes, including operational requirements and safety.

Pneumatic Controllers

At natural gas processing plants:

◦The VOC emission limit is zero.

◦Compliance is required October 15, 2012.

Pneumatic Controllers

Does not apply to compressors using dry seals. Requires a 95% reduction in VOC emissions

from compressors with wet seal systems. ◦Flaring, or ◦Routing captured gas back to a compressor suction or

fuel system

Centrifugal Compressors

 Two options for replacing rod packing:

Every 26,000 hours of operation (operating hours must be monitored and documented); or

Every 36 months (monitoring and documentation of operating hours not required).

Reciprocating Compressors

At onshore natural gas processing plants:◦Requirements to reduce SO2 emissions based

on sulfur feed rate and sulfur content of acid gas.

◦Increased emission reduction standard from 99.8% to 99.9% for units with a sulfur production rate of at least 5 long tons per day.

Sweetening Units

At onshore natural gas processing plants: Enhanced Leak Detection and Repair (LDAR)

requirements. Lowered the leak definition for valves from

10,000 ppm to 500 ppm and requires monitoring of connectors, pumps, pressure relief devices. and open-ended valves or lines.

Increased recordkeeping and reporting.

Fugitive Components

Large dehydrators: The final rule also retains the existing one-ton-per year benzene compliance option for large glycol dehydrators, meaning operators may reduce benzene emissions from large dehydrators to less than one ton per year as an alternative to reducing total air toxics emissions by 95%.

Glycol Dehydrators

Small dehydrators at oil and gas production facilities (NESHAP HH):◦ Applies to glycol dehydrators with an annual average

natural gas flowrate less than 85,000 scmd or actual benzene emissions less than 0.9 Mg/yr.

BTEX limits: ◦New sources – 4.66x10-6 g/scm-ppmv.◦Existing sources – 3.28x10-4 g/scm-ppmv.◦Small dehydrators with annual average benzene

emissions of less than one ton per year are exempt.

Glycol Dehydrators

Small dehydrators in the Natural Gas Transmission and Storage category (NESHAP HHH):◦Applies to dehydrators with actual annual average

natural gas flow rate less than 283,000 scmd or actual average benzene emissions less than 0.9 Mg/yr

BTEX limits:◦New sources – 5.44x10-5 g/scm-ppmv◦Existing sources – 3.01x10-4 g/scm-ppmv

Glycol Dehydrators

Compliance Deadlines:◦ New small glycol dehydrators (commenced construction or

reconstruction on or after 8/23/11) must comply immediately upon startup or within 60 days after the final rule is published in the Federal Register, whichever is later.

◦ Existing small glycol dehys that are subject to the MACT for the first time: 3 yrs +60 days after publication.

◦ Existing sources at production facility that constructed before 8/23/11, previously determined to be an area source, but becomes a major source on the 60th day after the effective date, due to the amendment to the associated equipment definition in 40 CFR Part 63, Subpart HH have 3 years +60 days after publication.

Glycol Dehydrators

Reducing VOCs from hydraulically fractured natural gas wells during flowback period. ◦Phased-in applicability ◦Exceptions for wildcat, delineation, and low pressure wells ◦ Includes Pre-completion Notification and Annual Reporting

requirements Reducing VOCs from storage tanks◦ Includes temporary vessels if at site >180 days

Additional requirements:◦Centrifugal & Reciprocating Compressors◦Pneumatic Controllers◦Sweetening Units◦Glycol Dehydrators (small and large)

Summary

www.texasoilandgashelp.org

AIROG@tceq.texas.gov

Small Business and Environmental Assistance 1-800-447-2827 or www.TexasEnviroHelp.org

Air Permits Division Main Line (512) 239-1250

Where to find more Information