EPA Releases Testing, Reporting and Compliance Deadlines for Oil and Gas Storage Tanks

On September 23rd, the United States Environmental Protection Agency (EPA) published in the Federal Register final amendments to sections of its 2012 New Source Performance Standard OOOO (NSPS OOOO) applicable to storage vessels used in the production, processing, transmission and storage of oil and natural gas. 78 Fed. Reg. 58415. Although the amendments contain a number of helpful changes sought by industry, they also include fast-approaching deadlines for operators of Class I vessels (see below) to test their VOC emissions (October 15, 2013) and report the results to EPA (January 15, 2014).

NSPS OOOO applies to a range of processes and equipment in the upstream and midstream oil-and-gas sectors (including natural gas wells). These amendments specifically modify the regulations applicable to storage tanks with a potential to emit (PTE) six or more tons per year (TPY) of volatile organic compounds (VOCs). If these tanks were constructed or modified after August 23, 2011, they are subject to NSPS OOOO and must achieve a 95% reduction in VOC emissions by the applicable compliance date. These amendments respond to industry petitions EPA received last year after initially promulgating the NSPS OOOO regulations on August 23, 2012. Among other things, industry participants expressed concerns regarding EPA’s initial compliance schedule because of the limited supply of available control devices, as well as certain ambiguities in the regulatory language.

To address the control supply issue, EPA’s amendments stagger the compliance deadlines for tanks subject to NSPS OOOO based on their age. The amendments create two categories of tanks—Class I and Class II. Class I includes all tanks constructed or modified between August 23, 2011 (the standard’s initial proposal date) and April 12, 2013 (the amendments’ proposal date). Class II includes all tanks constructed or modified after April 12, 2013. Owners of Class I tanks must achieve compliance with NSPS OOOO by April 15, 2015. Owners of Class II tanks must achieve compliance by April 15, 2014.

Although the amendments give operators of Class I tanks more time to meet the standard, they have a more immediate compliance duty. Specifically, operators with tanks in their inventories potentially subject to NSPS OOOO must test VOC emissions from those tanks by October 15, 2013 to determine whether they exceed the six TPY threshold. In addition, operators must submit initial notifications of the test results to EPA by January 15, 2014, to advise EPA and other regulatory agencies of the presence of the subject facilities. Per the amendments, this initial notification may be combined with the initial annual report already required by NSPS OOOO.

As we discussed in a post last month on the Energy Legal Blog, the amendments include a number of other additions that provide welcome flexibility in achieving the standards—provisions allowing operators to account for existing, non-federally enforceable control mechanisms in calculating the vessel’s PTE, to reduce a vessel’s PTE by routing emissions to a facility flare, or avoid controls by providing records showing that actual emissions over the previous 12 months have been less than four TPY, among other changes.

Nonetheless, the storage vessel provisions—like the remainder of NSPS OOOO—contain a complex array of requirements and conditions, including various recordkeeping, reporting and timing requirements above and beyond the basic emissions standards. Companies should carefully scrutinize the regulations and continually monitor for compliance with all aspects of these regulations.