American Oil and Gas Reporter - September 2016 - 28

sus a greenfield.
The additional record-keeping requirements associated with technical infeasibil-

ity in Subpart OOOOa that were not part
of the proposed rule demonstrate that EPA
fails to understand the impact they will

have on many independent producers and
operators, the industry groups say.
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Industry Rips EPA Information Request
WASHINGTON-The U.S. Environmental Protection Agency needs to develop a better understanding of the oil and natural gas industry, including the declining
nature of wells, before it develops additional emissions regulations, a coalition of oil
and gas associations asserts.
The federal agency announced plans in
June to expand its methane emission regulations from new and modified sources
to existing oil and gas wells, the Independent Petroleum Association of America says.
The EPA's initial step is collecting data
through an information collection request
(ICR) under the Paperwork Reduction Act.
In comments submitted in response to
that information request, IPAA, the American Exploration & Production Council,
and 47 state oil and gas trade associations
urge EPA to use agency statistics already
mandated and data publically available
from state agencies. According to industry, the consequences of EPA's regulatory actions could reduce U.S. oil production from marginal wells by 20 percent and
gas production by 13 percent.
IPAA says it sent a letter in June to EPA
Acting Assistant Administrator Janet McCabe, asking for an extension to the
ICR's initial comment period to accommodate the additional time required by industry to respond, but the agency denied the
request. Instead, IPAA notes the agency announced plans to distribute the ICR questionnaires by Oct. 30. The first part, to be
sent to all U.S. producers, requires information be returned within 30 days; the second, distributed to 3,000 select producers
and requiring more detailed responses,
would be due in 120 days, IPAA describes.
"Among the challenges for EPA-as Administrator (Gina) McCarthy observed-is
to understand the impact of regulations on
the hundreds of thousands of small
sources," IPAA says. "Yet, under EPA's
planned schedule, it would be sending its
detailed questionnaires to companies before it even received the information from
the first questionnaire to know how to get
a full understanding of the industry"
The coalition quotes McCarthy as indicating the agency is unfamiliar with domestic oil and gas activities, and saying
EPA had to learn how to regulate hundreds
of thousands of small sources.
"This is a real opportunity for the decision makers at EPA to better understand
the complexities of the U.S. oil and nat28 THE AMERICAN OIL & GAS REPORTER

ural gas industry," says Lee Fuller, IPAA
executive vice president. "However, this information-gathering effort creates additional paperwork for companies to produce to
EPA, and adds unnecessary burdens on
companies' technical teams to prepare and
submit rushed comments under enormous time constraints. Meanwhile, many
of these same technical teams are developing their companies' compliance programs for EPA's June regulations (limiting methane emissions from new and
modified sources), and then will turn to
their companies' greenhouse gas inventory reports, which are due in first quarter
2017."
The associations point out that regulating production is a different task than regulating other segments of oil and natural
gas processing. When an oil refinery is
built, it is designed to process petroleum
volumes within a specific range, and typically operates at a constant feed rate with
predictably constant emissions, they say.
"Oil production starts at an initial production rate and then begins to decline as
the resource is extracted. Consequently, its
potential to emit methane and volatile organic compounds is highest when production begins and then declines over time,"
the industry group explains. "The physics
of oil and natural gas production emissions
suggest that equipment designed to manage gas flow when the well is producing
5 million cubic feet a day will not be
stressed to release gases when the well has
declined to the average marginal natural
gas well rate of 22 Mcf/d."
Instead of creating duplicative work and
information, which goes against the intent
of the Paperwork Reduction Act, EPA
should first collect publically available data
from industry databases or from state
agencies, refine its search needs, and
then request more targeted information
from oil and gas companies, Fuller suggests. "As it stands now, EPA's proposed
ICR clearly is being driven by a tight political timeline to initiate and largely
complete the information-gathering
process before the end of this administration's term," he reasons.
GPA Midstream Comments
The GPA Midstream Association,
which represents more than 100 member
companies engaged in midstream gas activities, says EPA should cancel the ICR

because it couldn't use the information for
any lawful purpose under the Clean Air
Act.
The association states that while EPA's
reason for the request is to guide rule making under CAA Section 111(d), the agency
lacks the legal authority to regulate
methane emissions from existing oil and
gas production sources under that section
because EPA:
* Has chosen to regulate the source
category CAA under Section 112, and
therefore is barred from issuing rules under Section 111(d) for existing sources in
the same category; and
* Has not properly issued New Source
Performance Standard rules under Section
111(b) for methane emissions from the
source category, which is an explicit
statutory prerequisite for any regulations
issued under Section 111(d).
"As a result, the ICR has no 'practical
utility' to EPA, as required by the Paperwork Reduction Act, and should not be issued," GPA Midstream argues. "More
simply, EPA should not seek to collect this
information for regulations it cannot issue
as a matter of law."
The association recommends that if the
government proceeds with the ICR anyway, changes should be made to EPA's regulatory programs and the ICR to streamline and improve information collection
while minimizing the costs and burdens
imposed on the oil and gas industry.
Under that recommendation, GPA
Midstream urges EPA to rescind its greenhouse gas reporting program. In justifying
the expansive ICR, the federal agency has
determined that the GHG program is insufficient to support developing rules for
the oil and gas sector. The association asserts that if the GHG program cannot perform its stated purpose, and instead EPA
must resort to an ICR to gather data it
deems necessary, then the duplicative information gathering required by the GHG
program should be eliminated.
The association also suggests EPA extend the ICR's deadline by at least 120
days, arguing that in addition to helping
alleviate the demands placed on companies
by those reporting obligations, a delay
would improve the quality of data provided, since it would ensure producers would
be able to submit 2016 data instead of relying on earlier figures.
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American Oil and Gas Reporter - September 2016

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