EPA Next Generation Compliance - React or Respond?
May 20, 2015

The mandate to reduce oil and gas facility flaring, venting and leaking of natural gas (due to VOC and methane content) is expanding every year. Regulatory initiatives have focused on prescriptive command and control regulations for newer sources. Voluntary efforts are focused on existing emission sources. Recent news reports and initiatives indicate a push for even more restrictions on oil and gas emissions.

Image from EPA Enforcement page regarding EPA focus on reducing flaring from industrial activities and reducing pollutant emissions including volatile organic compounds (VOC) and soot. 

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Some drivers for these actions include the following: 

  • The President’s Climate Action Plan which includes a mandate to reduce methane emissions from oil and gas.
  • Existing EPA NSPS OOOO (Quad O) rules and future modifications (expected proposal in June 2015) to these rules that will require methane and VOC emission controls.
  • State initiatives such as Colorado Regulation 7 to control oil and gas VOC emissions.
  • Recent news stories that focus on GAO reports on flaring and venting from oil and gas operations on federal lands and waters (Gulf of Mexico).

Along with these new regulations comes the need for the EPA and state, local and other regulators to find ways to use limited resources for enforcement. EPA’s “Next Generation Compliance” strategy is to find and use new tools, technologies and approaches to strengthen enforcement of all environmental laws. The strategy is an integrated approach that will bring together the best ideas from inside and outside EPA. Expect that the ways the EPA will improve enforcement will be changing and accountability for industry will increase.

EPA Next Generation Compliance Components (http://tinyurl.com/mzlwp3l)  

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New technologies (e.g., remote methane sensors for O&G) are rapidly being incorporated into the fabric of the regulatory agencies to ensure compliance with the ever expanding flaring and venting rules. The detection and repair of natural gas leaks (methane, VOCs) is one major target for the use of new technology. This include leaks from components (valves, flanges, seals, pressure relief devices) and from storage tank hatches and pressure relief devices. 

The EPA has created a strategic plan organized around the five interconnected components.  

  1. More Effective Regulations and Permits
  2. Advanced Monitoring
  3. Electronic Reporting
  4. Expanded Transparency
  5. Innovative Enforcement

Using what they have learned about what drives better compliance, EPA can write regulations and permits with “built in” compliance and receive better results with less use of limited government resources. This means that EPA wants the operator to collect the data needed to ensure enforcement and send that data to the EPA to ensure compliance. EPA has an internal directive to use new compliance tools in civil enforcement settlements. See http://tinyurl.com/knje9l4.

A brief explanation of these five components are: 

  1. Rules and Permits with Compliance Built-in: Design more effective regulations and permits using Next Generation Compliance principles and tools that reduce pollution and increases compliance. For example, requiring stack testing of enclosed combustion devices can improve destruction efficiency of VOCs in storage tank vent gas.
  2. Advanced Monitoring: Use of existing pollution monitoring technologies and find new ones that help regulators, industry and the public identify and solve pollution problems. Many expect the greater use of methane leak detection technology for enforcement for oil and gas facilities.
  3. Electronic Reporting: Shift to electronic reporting in regulations and permits to obtain more accurate, complete, and timely information on pollution sources, pollution, and compliance. This will standardize report data and make it easier to compare data between facilities.
  4. Expanded Transparency: Make the information we have today more accessible and make new information obtained from advanced monitoring and electronic reporting publicly available. This data can help companies (within the same industry) find out how their peers perform and this can confirm that better performance is possible and provide a competitive incentive to improve.
  5. Innovative Enforcement: Use Next Gen Compliance principles and tools in enforcement planning and cases.

 A recent EPA settlement requires the company to operate fence line monitors that report near real time air pollution data and make the data publically available. Other settlements are requiring third-party verification of facility compliance status. These tools are used in case settlements and plea agreements with the intent of making the EPA more efficient and effective. With limited resources, the EPA will be using these tools more in the future. EPA wants to use enforcement cases as a way to test new technology and approaches that provide increased compliance while also saving money for compliant facilities.

Published Settlement Cases as Alerts/Examples

As always, the EPA uses the published enforcement cases as alerts and ways to increase compliance by the company with the violation and to deter potential violators and so improve compliance generally in the regulated community.

The cost to comply is much less costly than the expenses for legal fees, company resources to respond to noncompliance issues, regulatory penalties and possibly lost production. Also, once a company is on the radar for noncompliance, they can become a greater target for future expanded compliance investigations. 

React or Respond?

Oil and gas operators may want to decide whether to just react to new rules and new technologies after implementation or respond by pursuing a strategy for operating in a regulatory environment requiring more controls, monitoring and reporting with greater consequences. This is especially true for the air quality rules such as NSPS OOOO and state air permitting rules regarding venting of natural gas. These rules are a priority for EPA and states – especially since flaring and venting of natural gas is constantly in the news today.

Strategic Responses

Some strategic air quality ideas for oil and gas operators to consider include:

  1. Join and participate in the EPA Natural Gas STAR Program or the ONE Future Coalition to voluntarily reduce methane and VOC emissions from existing emissions sources not affected by air emission standards.
  2. Maintain an accurate inventory of permitted air emissions and GHG emissions for all company facilities. This includes facilities with GHG emissions not required to be reported to the EPA.
  3. Periodically review GHG emissions data the EPA has on file to ensure accuracy. This include onshore and Gulf of Mexico oil and gas operators.
  4. Rank facilities based on permitted emissions and actual GHG emissions. This will help to determine the facilities with higher emission rates that may need more monitoring.
  5. Measure storage tank vent rate and chemically analyze vent gas to accurately quantify emissions and for proper sizing of vapor recovery units (VRU), vapor recovery towers (VRT), flares and enclosed combustion units (VCU). See HY-BON IQR
  6. When possible, obtain state enforceable minor source air permits for production facilities. This can help maintain emissions below regulatory thresholds for federal rules and required emissions controls.
  7. Use a combination of VRU and VCU as redundant emission controls to minimize leaks of natural gas to the atmosphere.
  8. Periodically check for leaks from production facilities, especially storage tanks. This can include audio, visual and olfactory (AVO) monitoring, IR Camera and/or Volatile Organic Analyzers (VOA).
  9. Implement a system to detect and respond to leaks of natural gas from facilities. This is especially important for leaks from storage tanks required to be controlled by a VRU or flare/enclosed combustor.
  10. Ensure adequate sizing of VRUs and flares so that all the gas is sent to the control device. Note that a recent enforcement action cited inadequate sized piping between storage tanks and the VRU/VCU as a cause for back pressure that caused natural gas to be leaked to the atmosphere through tank hatches and pressure safety valves.
  11. Use service contracts for VRUs and VCUs to ensure maximum control and run time. This can include routine inspection of emission control devices for proper operation.
  12. Conduct semiannual or annual air quality inspections of facilities to ensure compliance with air quality regulations and permits.
  13. Conduct annual training for operations employees for requirements of air permits and air quality rules.

 References

  • Next Generation Compliance: Strategic Plan 2014 – 2017, U.S. Environmental Protection Agency Office of Enforcement and Compliance Assurance Washington, DC 20460, October 2014
  • General Accounting Office (GAO) Report: Federal Oil and Gas Leases Opportunities Exist to Capture Vented and Flared Natural Gas, Which Would Increase Royalty Payments and Reduce Greenhouse Gases, October 2010. http://www.gao.gov/assets/320/311826.pdf
  • Enforcement and Compliance and History Online (ECHO) that includes publically available facility search of enforcement and compliance data for Clean Air Act enforcement activities.
  • EPA Civil Cases and Settlements http://cfpub.epa.gov/enforcement/cases/index.cfm
  • EPA Natural Gas STAR Program - Enhanced Voluntary Efforts in the Oil and Gas Sector
  • ONE Future Coalition voluntary program to reduce methane emissions to no more than 1 percent across the natural gas supply chain.
  • INECE Special Report  http://inece.org/resource/next-gen-report/

Right Response with HY-BON 

Let HY-BON be your response to being proactive. Let us help your company get into compliance and stay in compliance with NSPS OOOO and state air permits and make your company money. HY-BON’s vent gas management (VGM) system is a cost effective way to take this issue off of your plate. We can assist by accurately quantifying emissions and use “best in class” vapor recovery units (VRU), Vapor Recovery Towers (VRT) and enclosed combustors (ECU) to comply with Quad O storage tank emission control requirements.