EPA Finalizes New CAA Requirements for the Oil and Gas Industry

Jun 05, 2012

On April 17, 2012, EPA Administrator Lisa Jackson signed final NSPS and NESHAPS for the upstream and midstream oil and gas industries. EPA published proposed rules in the Federal Register on August 23, 2011, and then commenced a period of public comment and hearings.  The final rules will appear in the Federal Register in early summer and will take effect 60 days after publication.

The new rules include a new NSPS at 40 C.F.R. Part 60, Subpart OOOO, that regulates emissions of volatile organic compounds (VOC) and sulfur dioxide (SO2) from oil and gas exploration, production, processing, and transportation facilities and includes natural gas wells, storage vessels, specific compressors, pneumatic controllers, and sweetening units at onshore natural gas processing plants. Previously, the EPA only regulated VOCs from natural gas processing plants. The new NSPS will apply to new facilities and existing facility modification that commence construction after August 23, 2011, and will have 60 days after the final rule is published in the Federal Register to come into compliance.

The finalized rules also contain revisions to 40 C.F.R. Subparts HH and HHH, covering the oil and natural gas production sector and the natural gas transmission and storage, respectively. The finalized standards will cover previously unregulated small glycol dehydrators that are located at major sources. Differing from the proposed rules, large glycol dehydrators will retain the 0.9 megagrams per year compliance option.  Subparts HH and HHH were also amended to establish new leak detection standards for valves. Furthermore, the final rule eliminated the exemption periods of startup, shutdown, and malfunction (SSM) in response to the D.C. Circuit’s holding in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008).