American Oil and Gas Reporter - September 2015 - 36

Climate Action Plan

EPA Unveils New Methane Leak Rules

WASHINGTON-The U.S. Environmental Protection Agency's proposed
regulations to reduce methane emissions
from oil and gas operations will add unnecessary costs and added uncertainties for
few environmental gains, asserts Barry
Russell, president and chief executive officer of the Independent Petroleum Association of America.
"Oil and natural gas exploration and
production methane emissions, in the
context of all U.S. greenhouse gas emissions, are small and declining," Russell responds to the rules announced in August.
"The oil and natural gas exploration sector accounts for 1.07 percent of total
U.S. GHG emissions. In fact, EPA's own
data show methane emissions from hydraulic fracturing already are declining, despite rising production levels."
EPA says the proposed regulations,
which it released Aug. 18, are part of President Obama's Climate Action Plan. That
program seeks to reduce GHG and volatile
organic compound releases from the oil
and gas sector by as much as 45 percent
from 2012 levels by 2025. The revisions
follow the agency's 2012 final rule, "Standards of Performance for Crude Oil and
Natural Gas Production, Transmission
and Distribution," and amendments issued
in 2013 and 2014.
The proposed standards for new and
modified sources are based on industry
practices and technology, the agency
claims. It says the proposal requires:
* Finding and repairing leaks;
* Capturing natural gas from completing fractured wells;
* Limiting emissions from new and
modified pneumatic pumps; and
* Limiting emissions from several
types of equipment used at natural gas transmission compressor stations, including
compressors and pneumatic controllers.
Under the new regulations, EPA projects as much as 400,000 short tons of
methane will not enter the atmosphere, the
equivalent of reducing carbon dioxide
emissions by 9 million metric tons. EPA
estimates the rule will yield net climate
benefits of $120 million-$150 million in
2025, and also reduce VOC emissions by
as much as 180,000 tons, along with
2,500 tons of air toxics such as benzene,
toluene and xylene.
As part of the proposal, EPA says it is
updating the 2012 New Source Performance Standards to address methane as well
as VOC emissions for sources covered in
that rule. The agency says its proposal will

36 THE AMERICAN OIL & GAS REPORTER

require industry to lower methane and
VOC emissions from hydraulically fractured and refractured oil wells. In addition,
the proposal covers methane and VOC reductions from equipment in the natural gas
transmission sector that EPA says was not
regulated in its 2012 rules (Table 1).
Russell warns EPA's proposed regulations are likely to inflict more pain on oil
and gas industry workers at a time when
market forces already are creating economic challenges.

Oil Well Sites
Under the proposed rule, EPA would
require operators of hydraulically fractured
wells to use "green completion" equipment. The agency points out that similarly to its 2012 rule, the proposed updates
would not require green completions on
wildcat, delineation or low-pressure wells,
or in areas where it is not feasible to get
gas to a pipeline.
Refractured and recompleted oil wells
would not be considered "modified" under the new regulations if operators used
green completions and met notification and
reporting requirements for new wells. In
a number of states, this will allow operators to refracture wells without triggering
state permitting requirements, EPA says.
EPA is proposing to also require operators to use optical gas imaging as part of
leak monitoring surveys. For new wells,
operators would have to conduct surveys within 30 days of completion or the
date the site began producing. For modified wells, the agency says surveys would
have to be conducted within 30 days of the
modification. Following the first survey,
leak monitoring surveys would be conducted twice a year.
Under the proposal, sites with average
combined oil and gas production of less
than 15 barrels of oil equivalent a day, and
well sites that contain only wellheads,
would be exempt from the leak detection
requirements.
For well sites covered by the leak detection and repair requirements, the leakmonitoring survey would cover components such as valves, connectors, pressurerelief devices, open-ended lines, access
doors, flanges, crank case vents and pump
seals, among others. Equipment that vents
natural gas as part of normal operations is
not considered leaking, and therefore is not
covered by this requirement, EPA states.
Leaks would have to be repaired within 15 days, unless repairs would require
shutting down production. In that case, the

agency says operators would be required
to fix the leak at the next scheduled shutdown.
According to the proposal, the rules
give operators several incentives for minimizing leaks:
* If leaks are found from less than 1
percent of covered components during two
consecutive surveys, operators may reduce
the monitoring surveys to once a year instead of every six months.
* If leaks are discovered on 1-3 percent of covered components, surveys
must continue every six months.
* Operators of sites with leaks from
more than 3 percent of covered components during two consecutive monitoring
surveys would have to monitor every
three months.
EPA adds it is soliciting comments on
whether to allow operators to conduct leak
monitoring using EPA Method 21 as an alternative to optical gas imaging. Method
21 determines VOC emissions from
process equipment using a portable monitoring instrument such as an organic vapor analyzer, the agency explains.
The proposed rule would require that
VOC and methane emissions from pneumatic pumps be controlled by 95 percent,
if an emission control device already is on
site. It says the reduction would be accomplished by routing the emissions from the
pump to emission devices dedicated to other equipment-such as storage tanks-already on site.

Natural Gas Wells
The proposed EPA rules for natural gas
well sites cover processes and equipment
similar to those for oil wells, including requiring an optical gas imaging system to
monitor leaks on the same survey schedule. The agency says natural gas wells have
the same low-production exemptions.
EPA says it is not proposing to establish requirements for compressors at production sites because they typically are
small and have few emissions. The agency
adds that it is leaving the requirements for
storage tanks at gas transmission stations unchanged from the 2012 rules.
Draft control technique guidelines
(CTGs) proposed by the agency for reducing VOC emissions cover several types of
processes and equipment. EPA points out
the CTGs don't apply any requirements directly to production facilities, but rather
provide recommendations to state and local agencies to consider in determining reasonably available control technology

American Oil and Gas Reporter - September 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - September 2015