On May 12, 2016, EPA issued its final rule for reduction of methane emissions from the oil and gas sector. The rule, originally proposed in September 2015, builds on the 2012 new source performance standards that addressed emissions of volatile organic compounds (VOC), and serves as a key component of President Obama’s Climate Action Plan: Strategy to Reduce Methane Emissions issued in 2014. Requirements of the rule include green completions for hydraulically fractured wells,[1] emissions controls on a range of equipment (including pneumatic controllers, pumps and compressors), and the identification and repair of leaks. Interestingly, the final rule contains a number of choices that the Agency presumably intended to have a technology-forcing effect.
Leak Detection and Repair
The final rule requires operators to monitor leaks at compressor stations, well sites, processing plants, and gathering and boosting stations. The proposed rule would have mandated use of optical gas imaging (OGI) as the best system of emission reduction (BSER) to detect leaks. The final rule includes two additional options. At the request of commenters, operators may use Method 21 for leak detection. However, the rule sets the Method 21 leak detection threshold at 500 ppm, a level intended to provide more emission reduction than OGI. The second alternative permits operators to seek approval of emerging alternative leak detection technology with a demonstration that the alternative technology achieves methane and VOC reductions at a level that matches or exceeds OGI.[2] Put together, the leak detection technology provisions incentivize operators to move beyond the traditional Method 21.
Compressors
The final rule includes provisions for emission reduction and rod packing system replacement. By routing emissions to a combustion control device, EPA expects operators to achieve 95% control of compressor emissions. However, the requirements apply only to wet seal centrifugal compressors.[3] Dry seal systems are exempt from the rule’s requirements, indicating the Agency’s preference for dry seal technology. Moreover, like the leak detection provisions, the final rule allows an operator to seek approval of an alternate method of compliance that achieves a 95% emission reduction.
Pneumatic Pumps
Under the final rule, diaphragm pumps must route emissions to a control device specific to the pump or a control used for other equipment. Pumps that are not natural gas driven (such as solar, electrically powered or air driven pumps) are exempt from the final rule’s requirements. These exemptions provide motivation for operators to select these options rather than those driven by natural gas.
In promulgating the final methane emissions regulation for the oil and natural gas sector, EPA offers regulated operators a range of options for compliance with certain aspects of the rule. A close review of this “carrot and stick” approach demonstrates EPA’s preference for newer technologies over more traditional control methods. Ultimately, the rule encourages operators to adopt the newest technology options or develop their own. In either case, EPA gains additional information that it can leverage in future rules.
[1] "Green completions"separate liquid hydrocarbons and gas from the flowback and recover the gas and liquids for use.
[2] Applications for the use of alternate technologies require notice, a public hearing, and substantial data supporting the application.
[3] Wet seal compressors at well sites are excluded from the rule requirements.
