Natural Gas Processors to Report to EPA’s Toxic Release Inventory Beginning 2023

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In a final rule published in the Federal Register on November 24, the Environmental Protection Agency (EPA) quietly finalized a hotly contested proposed rule, adding natural gas processing facilities to the list of industry sectors required to report their releases of certain chemicals under Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), also known as the Toxic Release Inventory (TRI). Facilities must report releases and waste management of specifically listed chemicals to the TRI if they: (1) have 10 or more full-time employees, (2) have a primary Standard Industrial Classification (SIC) or North American Industry Classification System (NAICS) code listed in the regulations, and (3) manufacture, process, or otherwise use certain listed chemicals in the course of a calendar year in quantities exceeding identified thresholds.

The extension of TRI reporting requirements to natural gas processors was originally proposed by the Obama administration in 2017 in response to a 2012 petition from environmental groups requesting EPA to add the oil and gas extraction industry sector to the scope of the TRI program. While EPA denied much of the petition in 2015, the agency agreed to proceed with the inclusion of natural gas processing plants and issued a proposed rule in early 2017. The proposal sat dormant throughout the Trump administration until the Biden EPA finalized the rule the day before Thanksgiving. The final rule becomes effective December 27, and applies for the 2022 reporting year, which has a reporting deadline of July 1, 2023. This rule comes on the heels of another recent rulemaking effort by EPA targeting the oil and gas industry.

In the final rulemaking, EPA responded to public comments received on the proposed rule, which was strongly opposed by the industry. EPA noted that some commenters argued that EPCRA only allows EPA to make changes to the list of chemicals covered by the TRI and does not permit the public to petition EPA for changes to the list of industry sectors subject to TRI reporting. EPA responded by pointing to the general process available under the Administrative Procedure Act for citizens to petition for rulemakings, as well as its independent authority under EPCRA to add or delete industry sectors from the TRI and to promulgate regulations necessary to carry out the statute. In the proposed rule, commenters raised a number of additional concerns, including that much of the data that will be reported is already in the public domain, that EPA has underestimated the burden on the regulated community, and that there will be confusion in the industry both regarding what constitutes a “facility” subject to the rule and whether certain facilities fall within the industry codes identified in the rule. EPA dismissed each of these concerns in the final rule.

EPA’s final rule expands TRI requirements to qualifying facilities that “primarily engage in the recovery of liquid hydrocarbons from oil and gas field gases” by adding SIC code 1321 (Natural Gas Liquids) and NAICS code 211130 (Natural Gas Liquid Extraction) to the TRI regulations. EPA estimates (based on its 2017 proposal) that at least 282 natural gas processing facilities would be subject to the rule because they meet the TRI threshold of 10 or more full-time employees and manufacture, process, or otherwise use at least one TRI-listed chemical. EPA believes that collectively, natural gas processing facilities use at least 21 different TRI-listed chemicals, including n-hexane, hydrogen sulfide, toluene, benzene, xylene, and methanol. Minimum compliance costs to the industry are estimated by EPA to be at least $11.8 million in the first year and $5.6 million thereafter. If you have questions about the final rule, please contact Melissa Horne or Randy Brogdon.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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