Having Fits About Oil and Gas Air Permits?
October 10, 2014

Oil and gas operators know that obtaining the correct oil and gas air permits for their operations is essential.  There is truly an “Alphabet Soup” of air pollution regulations to follow for oil and gas operations.  Knowing the different air permit types in no longer the domain of only the environmental department and consultants. 

These permits affect operations, engineering, safety, legal and accounting departments.  Permitting the facility correctly can save your company money and lower your exposure.  The right permit and emission controls can help your company avoid NSPS OOOO.  Below is a brief discussion of the different types of permits that applies to most areas of the U.S.  

Vapor Recovery Tower (VRT) used to collect flash gas upstream of tank. Flash gas from VRT sent to VRU. 

vapor recovery tower VRT natural gas tank vapor capture

 Onshore Air Permitting Agencies

Federal, state, tribal, and local agencies may have air permitting roles.  The air permitting body for most states is the state environmental agency that has been granted delegation by the EPA to issue permits for oil and gas operations.  In some states and geographic areas, local counties and tribal nations have been granted delegation for air permitting. 

The EPA has a list with links for health and environmental agencies of U.S. States and Territories that can help find a contact for specifics of the air permitting requirements.  See http://www2.epa.gov/home/health-and-environmental-agencies-us-states-and-territories

Consult the responsible agency or air quality permitting professional for details on air permitting requirements for your project.  

Offshore Air Permitting Agencies

In the Central and Western Gulf of Mexico, the air permitting agency is the Bureau of Ocean Energy Management (BOEM) for oil and gas drilling and production.  BOEM's jurisdiction covers the Outer Continental Shelf (OCS) west of 87.5 degrees longitude (off the coasts of Texas, Louisiana, Mississippi, and Alabama). The BOEM air regulations can be found in 30 CFR 250.  The BOEM also has jurisdiction to regulate air emissions associated with oil and gas activities on portions of the Alaska OCS

Offshore activities for OCS sources (other than Western and Central Gulf of Mexico) within 25 miles of the States' seaward boundaries are subject to the same Federal and state requirements as those that would apply if the source were located onshore.  The only exceptions are Texas and the west coast of Florida, where State jurisdiction extends from the coastline to 3 marine leagues (10.4 miles) into the Gulf of Mexico. Off the coast of Louisiana south to 3 miles (coastal/territorial seas), the Louisiana Department of Environmental Quality is the air permitting agency.  

Offshore OCS sources beyond 25 miles of the States' boundaries are subject to Federal requirements.  For example, EPA Region 4 is the permitting agency for Gulf of Mexico OCS facilities east of the 87.5 degrees longitude. 

 Air Permitting Scope

Air permits are normally only required for stationary sources (fixed, permanent) that have the potential to emit air pollution.  Mobile sources (cars, trucks) associated with the activity are not normally included in air permits – with exceptions.  Some states and the EPA, in certain geographic areas, are requiring drilling rigs to be included in air permits. 

Selected Definitions

  • Title V/Part 70/Part 71 Major Source – oil and gas facilities that have the potential to emit 100 tons per year (tpy) or more of criteria pollutants (including VOCs), 10 tpy of any one hazardous air pollutant (HAP) or 25 tpy of any combination of HAPs. 
  • PSD major source – oil and gas facilities that have the potential to emit 250 tons per year (tpy) or more of criteria pollutants (e.g., PM10, SO2, CO, NOx, or VOC).
  • Nonattainment NSR major source – oil and gas facilities located in a nonattainment area that have the potential to emit criteria pollutants (e.g., PM10, SO2, CO, NOx, or VOC) over the set thresholds.  
  • Modification – a physical change or change in the method of operation that results in an increase in emissions or a new pollutant not previously emitted.  There are minor modifications and major modifications.  The scope of this blog today does not have the space to explain the nuances to the types of modification.  Consult an air professional for more details.  

 

Potential to Emit (PTE)

Air permits require the facilities to use potential to emit (PTE) calculations for estimating emissions from a facility to determine total emissions.  Total facility PTE emissions drive permit type and eligibility.    

The EPA defines potential to emit (PTE) in 40 CFR 52.21(b)(4) as:

“Potential to emit means the maximum capacity of a stationary source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation or the effect it would have on emissions is federally enforceable. Secondary emissions do not count in determining the potential to emit of a stationary source.”

The gist of this definition is that air permit emissions used in the permit application can be the “after control” emissions level, thus lowering the PTE emissions.  The key requirement is that the control or process that lowers emissions is included in an enforceable permit.  

Example PTE

Facility XYZ uses a vapor recovery unit (VRU) to recover vent gas from storage tanks with the gas sent to the sales pipeline (not vented to the atmosphere).  

  • Uncontrolled (vented to atmosphere) storage tanks = 110 tons VOC per year
  • VRU controlled storage tanks = 5.5 tons VOC per year

If the VRU is included as a part of the process in an enforceable air permit, then PTE for the storage tank would be 5.5 tons VOC per year. 

Note that for NSPS OOOO (Quad O), VRUs used for storage tanks can be considered a part of the process (not emission controls). 

 

Air Permit Types

An approved air permit is required for construction and operation of new facilities and for modifications to existing facilities that have the potential to emit air emissions.

Generally, state agencies typically use the following air permitting methods:

  • Construction permits are required prior to beginning construction of a facility or modifying a facility
  • Operating permits required prior to beginning operations
  • Combined construction/operating permits typically required prior to construction
  • Authorization permits used to allow certain other activities that emit air pollution

Consult your regulatory agency to determine how they define “construction” and “operation.”  

Federal Operating Permits

The most common federal operating air permit types include:

  • Title V/Part 70 – General and individual federal operating air permit that have emissions over the permitting threshold.  General permits are designed for certain facility types (e.g., oil and gas production facility) or activities.  These are manage by the state regulatory agency.  
  • Part 71 Air Permits – Federal operating permits issued by EPA (primarily for Indian tribal lands).

 Federal New Source Review (NSR) Air Permits

  • Nonattainment New Source Review (NNSR) – air permitting program that applies to new major sources (facilities) or major modifications for pollutants where the area the source is located is in nonattainment (e.g., smog areas).  NNSR is a site specific, individual air permit that is very involved.  Regulatory approval times can take a few to many months.
  • Prevention of Significant Deterioration (PSD) - applies to new major sources or major modifications at existing sources for pollutants where the area the source is located is in attainment or unclassifiable with the National Ambient Air Quality Standards (NAAQS).  PSD is a site specific, individual air permit that is very involved. Regulatory approval times can take a few to many months.

 

Oil and Gas Facility Major Source Permits

Permit Type

Emission Trigger

Title V/Part 70/Part 71

 

Facility emissions of 100 tons per year (tpy) of any criteria pollutant; 10 tpy of one HAP; 25 tpy of any combination of HAPs.

PSD

Facility emissions of 250 tpy of any one criteria pollutant.

Nonattainment New Source Review

 

Depends on the area and pollutant that is in nonattainment.  See EPA NNSR presentation link

 Minor Source Air Permit

  • Minor Source Individual Permits – applies to facilities that are not major sources according to Title V/Part 70, NNSR or PSD.  These are site specific air permits for facilities not eligible for a minor source general air permit. 
  • Minor Source General Permits – applies to facilities that are not major sources according to Title V/Part 70, NNSR or PSD.  General permits are designed for certain facility types (e.g., oil and gas production facility) or activities.  General permits generally have rigid applicability requirements and specific emission limits that must be met by the facility. 

These permits include “Synthetic” Minor Source Permits.  A synthetic minor source is a facility which can operate as a major source, but for which the applicant is voluntarily requesting a enforceable limit on one or more parameters (e.g., throughput, operating time, etc.) such that the potential to emit (PTE) of the facility remains below major source thresholds.

Examples of general permits include the Texas Commission on Environmental Quality TCEQ PBR (Permit by Rule) and the Minor Source Oil and Gas (MSOG) air permit that the Louisiana Department of Environmental Quality (LDEQ) uses. 

If the facility cannot meet the General Air Permit requirements, an Individual Minor Source Air Permit would be required. The individual minor source air permit is will be tailored to the facility's operations.  Typically, the processing time to receive approval from the regulatory agency is longer for an individual air permit than for a general air permit.  

Other Permits

Other permit mechanisms used by permitting agencies cover non-routine activities that do not violate an applicable air quality standard. Depending on the agency, these can be named the following: 

  • Regulatory Permits
  • Well testing permit
  • Flaring permits
  • Temporary permits
  • Permits for non-routine actions such as running an emergency generator engine for a prolonged period due to power outage. 
  • Permits for portable equipment
  • Miscellaneous

Best Practices for Oil and Gas Permitting

Below are a few best practices that can help permit an oil and gas production facility. 

  1. Permit for an annual throughput (if allowed) that is the maximum throughput of natural gas and crude oil/condensate expected.  Modify, as needed, if throughputs decrease with time.
  2. Design and operate facilities such that the facility can obtain an available General Air Permit.  Many General Permits have shortened or no wait time for approval of construction/operation of new and modified facilities.  This can reduce time to begin production.  
  3. Use enforceable limits (production rates, runtime, etc.) to ensure the facility can permit as a minor source. 
  4. Use emission controls to permit facilities as minor sources.  Federal air permits (Title V, PSD, NNSR) have more exposure risk for the facility and increased monitoring, recordkeeping and reporting requirements. 
  5. Minimize venting of natural gas.  Use vapor recovery units (VRU) as process equipment to control VOC emissions from storage tanks.  Use vapor recovery towers (VRT) as a part of the VRU system. 
  6. Use flares or enclosed combustion units to control VOCs at facilities where VRUs are not economic. 
  7. When modifying a facility avoid triggering the major source emission thresholds in Title V, PSD or NNSR.  If already a Title V, PSD or NNSR permitted facility and making modifications, install emission controls to make the modifications a minor modification.  This will reduce processing time for the permit approval.
  8. After the facility has been constructed and begins operation, verify that the approved air permit matches actual operations. 
  9. Prepare a briefing sheet and data forms that can be used to ensure the field operators comply all permit monitoring, recordkeeping and reporting requirements. 
  10. Train field operations on the air permit requirements. 
  11. Conduct quarterly, semiannual or annual surveys of your facilities to ensure compliance. 
  12. With all of the new air quality rules such as NSPS OOOO (Quad O), keep good records of facility and equipment capacities, operating parameters and construction and operation dates.  These data are important for determining the applicability of many of the air quality rules.

How does the right air permit save you money and lower exposure? 

AVOID Quad O - If a facility reduces its storage tank VOC emissions below 6 tons per year per tank and the reduction is included in an enforceable permit, then the facility can "permit out" of NSPS OOOO.  VRTs and VRUs are considered process equipment under NSPS OOOO; use VRTs and VRUs as a way to avoid NSPS OOOO.  The costs for complying with NSPS OOOO monitoring, reporting and recordkeeping is much higher than complying with a state permit.  

If you can permit a facility as a minor source, then your permit fees, monitoring, reporting and recordkeeping would be less burdensome than for a major source.  The timeline to get an approval of a minor source general permit is usually much faster than for major source permits and individual permits.  If you shorten the time waiting for approval, the facility can begin production will no or minimal delays.  Also, use of minor source permit will reduce the exposure to federal oversight and requirements. 

The alphabet soup of air regulations only getting stricter, operators understand more that recovery of natural gas is the answer.  

HY-BON uses its Identify, Quantify, Rectify (IQR) methodology to help your company reduce and manage their air emissions. 

HY-BON Vent Gas Management – HANDLED!