Air Quality Regulatory Enforcement and Compliance
February 17, 2016

There has continuing focus by the USEPA on air quality regulatory enforcement of vent gas (VOCs, methane) emissions from oil and gas operations. These regulations place a large liability on industry to know the regulations and comply with all of the emission controls, standards, testing, recordkeeping and reporting requirements. As regulations are incorporated into a company’s day to day compliance systems, there is a need to be aware that enforcement of the rules is a reality.

Regulators expect continuous compliance with all rules and will take enforcement actions if noncompliance is discovered.

There are many reasons to comply with the air quality regulations besides fear of enforcement action. This includes reputation of the company and our industry, competitive advantage given to those who do not comply and civil liabilities (e.g., citizen suits, environmental NGO suits) and greater scrutiny of all operations not related to the original violation.

IR image of vent gas from storage tank: 

tank_flir.jpg

 

 Some items to consider for your company’s ongoing environmental management system for general compliance and storage tanks emission controls are discussed below.

Legal Counsel

For any enforcement action, your company should consult your company attorney for the best response strategy.

EPA Online Enforcement and Compliance Histories

The EPA's Enforcement and Compliance History Online website (ECHO) is publically available website that can be used to search for facilities compliance status with environmental regulations. This is a multimedia resource that includes air, water and waste regulatory compliance. 

Types of Enforcement Actions for Air Quality Issues

Civil Administrative Actions are non-judicial enforcement actions taken by EPA or a state regulatory agency based on its authority. These actions do not involve a judicial court process. An administrative action by EPA or a state agency can include the following depending on the agency’s terms.

  • Notice of violation (NOV)
  • Incident of noncompliance (INC)
  • Administrative order (AO) directing an individual, a business, or other entity to take action to come into compliance (may include monetary penalty). These can include agreed orders or default orders (e.g., TCEQ)

Expedited Settlement Agreements

The EPA and many state environmental regulatory agencies use Expedited Settlement Agreements (ESA) that address minor to moderate environmental violations.  The ESA is used for enforcement in cases where violations can be corrected and a penalty obtained in a short amount of time.

 In such agreements, the agency offers to settle the violations for a reduced penalty in exchange for the facility certifying that the violation(s) was corrected within the a certain time frame (e.g.,

Civil Judicial Actions are formal lawsuits which are filed in court, against persons or entities that have failed to:

  • Comply with statutory or regulatory requirements
  • Comply with an administrative order

These cases are filed by the U.S. Department of Justice on behalf of EPA. In regulatory cases they may be filed by the State's Attorneys General on behalf of the states. Learn more about Civil Cases and Settlement.

Criminal Actions can occur when EPA or a state take enforcement action against a company or person through a criminal action. Criminal actions are usually reserved for serious violations which are willful or knowingly committed.

A court conviction can result in fines and/or imprisonment.

Air Noncompliance Civil Monetary Penalties

Fines for violations can be up to $37,500 per day per violation of the Federal Clean Air Act.  See Civil Monetary Penalty Inflation Adjustment Rule.

State regulatory agencies that have delegation of administering the Clean Air Act would have similar penalty schedules. State regulatory agencies may have their own penalty schedule for state-only specific air compliance requirements.

Civil Monetary Penalty Determination

The USEPA and state have a formal method to determine/calculate civil monetary penalties. Factors that are considered can include:

Compliance history of facility

  • Degree of culpability, recalcitrance, defiance, or indifference to regulations or orders
  • Good-faith effort to comply
  • Monetary benefits realized through noncompliance
  • Nature and gravity of the violation
  • Gross revenues generated by the respondent
  • Degree of real or potential harm to the environment or human health
  • Timeliness of reporting  the noncompliance or violation
  • Whether the violation or noncompliance was concealed or there was an attempt to conceal by the person charged
  • Failure to mitigate the damages caused by his noncompliance or violation
  • Costs to prosecute an enforcement action, such as staff time, equipment use, hearing records, and expert assistance.
  • Whether the facility was a major or minor source of potential pollutants
  • Was the violation was programmatic (lack of system to report, track, ensure compliance)

Costs of Noncompliance

Some potential factors to consider for the cost of noncompliance include:

  • Cost to correct the issue
  • Cost to prepare a response to the agency. This can include:
    • In-house HSE costs
    • In-house or outside attorney costs
    • Consultant costs
  • Monetary Penalties
  • Cost to offset any monetary gains from noncompliance
  • Impact to the environment
  • Community relations
  • Cost to defend against regulatory agency suits 
  • Cost to defend against citizen suits

Air Emission Standards Compliance for Crude Oil and Produced Water Storage Tanks

To stay in compliance with state and federal (e.g., NSPS OOOO) air quality standards for storage tanks consider the following issues that can lead to enforcement actions.

  1. Emission controls not installed or not operating properly.
  2. Inadequate system design such that the needed percent VOC reduction is not achieved.
  3. Inadequate piping (closed vent system) between storage tanks and control device – resulting in back pressure and leaking storage tank hatches.
  4. Leaking hatches due to faulty/damaged seals.
  5. Leaking pressure relief devices (other than emergency releases).
  6. Undersized or oversized vapor recovery units (VRU).
  7. Undersized or oversized vapor combustion units or flares.
  8. Systems not sized for actual short-term minimum and/or maximum flowrates of vent gas.

Resources


 Let HY-BON/EDI assist your company stay in compliance with EPA and state vent gas regulations. Our company’s 60 plus years of experience can help with your vent gas management (VGM) needs. This `includes the following:

  • Vent gas measurement and leak detection using our IQR services
  • Vapor recovery systems (VRU)
  • Vapor recovery tower (VRT)
  • Vapor combustion devices (VCU)
  • Field Service (VRU/VCU maintenance, tank seal inspection/replacement, leak detection)