[author: Justin Schwab]
On November 22, industry groups filed in the D.C. Circuit five petitions for review of the Environmental Protection Agency’s (EPA) final amendments to new source performance standards (NSPS) governing the oil and natural gas production sector. The standards impose limits on the emission of volatile organic compounds from gas wells, storage vessels, and other components of natural gas production infrastructure, including hydraulic fracturing operations. EPA’s amendments, published on September 23, extended the time to comply with the new standards from April 2014 to April 2015 for certain affected storage tanks, but they do not alter the compliance schedule for gas wells.
The petitions for review are just one part of an ongoing administrative and legal process. In a combined final rule in August 2012, EPA published both NSPS and National Emission Standards for Hazardous Air Pollutants (NESHAP)—under Clean Air Act Sections 111(b) and 112(d), respectively—for the oil and natural gas production source category. Nine separate petitions for review were filed in the D.C. Circuit, brought by environmental and industry groups, as well as the State of Texas. (Texas later moved for voluntary dismissal of its petition, which was granted.) The petitions were consolidated; the lead case is American Petroleum Institute v. EPA, No. 12-1405. In April 2013, the court granted EPA’s unopposed motion to sever the NSPS and NESHAP issues and to hold all proceedings in abeyance pending the agency’s consideration of pending petitions for administrative reconsideration of both the NSPS and NESHAP standards. (The NSPS challenge is now docketed as No. 13-1108.)
EPA informed the court that it will issue a notice of proposed rulemaking addressing additional NSPS issues raised in the petitions for administrative review by December 17, 2013, with final action to come by November 2014. The agency also projected that it will propose a reconsideration rulemaking regarding the NESHAP standards by April 30, 2014, with final action to come by May 2015.
While the recent petitions for review concern relatively minor amendments to the new standards, the underlying rulemaking, reconsideration, and judicial-review procedures are of great importance to the hydraulic fracturing community, as well as to the oil and gas sector more broadly. All those concerned should closely monitor the EPA’s reconsideration of these standards.