Proposed BOEM OCS Air Quality Rules
April 5, 2016

The Bureau of Ocean Energy Management (BOEM) is proposing to modify its air quality regulations applicable primarily to operations in the Outer Continental Shelf (OCS) of the Gulf of Mexico and Alaska’s Arctic waters.

Below is a brief summary of some key proposed changes to the BOEM’s air quality rules. Review the proposed rule for details for the proposed changes and key important changes for your company or clients. Expect that industry will give comments on this rule and the final rules may be different from those proposed.

See Federal Register Notice at: BOEM proposed rules

Map of OCS waters of Gulf of Mexico 

Gulf_Plan.jpg

 

On April 5, 2016, the proposed rule were published in the Federal Register. Interested parties can submit comments on the substance of the rule by June 6, 2016. Submit comments on the information collection (IC) burden in this rule making to the Office of Management and Budget (OMB) by May 5, 2016. 

The proposed rule changes affect 30 CFR Part 550 – OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF.

The proposed rules will significantly increase the amount of effort required by operators to obtain approval of their air emissions from drilling projects and production operations.

BOEM Jurisdiction

The Bureau of Ocean Energy Management (BOEM) is agency in the Department of Interior responsible for managing development of the nation's offshore resources. BOEM is the agency with responsibility for review and approval of projects for oil and gas offshore operation.

For air quality issues, the BOEM has jurisdiction for the Outer Continental Shelf (OCS) of the Central and Western Gulf of Mexico. BOEM regulates O&G drilling and production air emissions over the OCS west of 87.5 degrees West longitude. This includes OCS waters off the coasts of Texas, Louisiana, Mississippi, and Alabama. The air rules are found in 30 CFR 550. BOEM also has jurisdiction to regulate air emissions associated with O&G activities on portions of the Alaska OCS. 

The USEPA has jurisdiction for air quality for other OCS waters of the US.

The proposed rules are stated as the way BOEM will fulfill compliance with the National Ambient Air Quality (NAAQS) at the State boundaries and so there is no significant impact to non-attainment areas and Class 1 Areas.

Bureau of Safety and Environmental Enforcement (BSEE)

BSEE is the sister agency that enforces safety and environmental regulations. Functions include field operations, permitting, research, inspections and environmental compliance.

Air Permitting System

The proposed rules do not set up a formal air permitting system like that used for onshore oil and gas productions operations.

The proposal is for a similar system that is currently used for obtaining approval of “Plans” for drilling and production operations. Plans are documents prepared and submitted by operators to the BOEM to obtain approval for exploration, development and operations for oil and gas activities in OCS waters of the US. Plans are very detailed documents supplying information on a proposed project. A project may include drilling and production operations. A plan will include sections addressing air emissions from expected operations.

As currently required, operators will be required to submit air emission calculations for drilling, production and support operations. The proposal expands the amount of air quality information required and specifies when air quality dispersion modeling may be needed.

The procedures used for approval of air emissions for a project will be similar to the existing procedure used. The basic steps include:

  1. Calculate emissions for the project. This includes emissions from drilling rig, support activities (including marine support vessels) and/or platforms.
  2. Compare calculated emissions to the calculated Exemption Level for each air pollutant. The exemption level is proposed to be named Emission Exemption Threshold (EET). Based on results of ongoing air dispersion modeling studies, the EET formulas currently used will change.
  3. If emissions for the project are below the EET for each air pollutant, then emissions are exempt and no further action is required.
  4. If emissions for the project exceed the EET, then the operator will be required to conduct air dispersion modeling to demonstrate impact on State boundaries, nonattainment areas and Class 1 Areas. Depending on modeling results, geographic areas affected and type of operations generating the air emissions, the operator may be required to reduce emissions using Emission Reduction Measures (ERM).

Emission Reduction Measure (ERM)

ERMs are proposed to be temporary or permanent reductions in air emissions and can include:

Separate ERM requirements are proposed for short-term projects (>3 years duration).

Emissions Credits

The proposed use of emission credits would allow operators to offset emissions from a project in lieu of implementing emission controls for emission sources operating at the specific drilling ship, platform and support vessels used.

The emissions credits are defined as reductions from an emissions source(s) not associated with the proposed Plan regardless of whether these emissions credits are acquired from an emissions source(s) located either offshore or onshore. The system would allow, based on approval by the BOEM, the use of:

  • Emissions offsets generated by the lessee or operator itself
  • Emissions offsets acquired from a third party
  • Trading allowances associated with a market-based trading mechanism such as mitigation banks

Emissions credits can only be obtained from projects for emission reductions that were not mandated by regulation and not included in an air permit to reduce the potential to emit (PTE) emissions of a facility.

Emission credits and offsets are currently used in the ozone (O3) nonattainment areas in Texas (Houston-Galveston-Brazoria area) Louisiana (Baton Rouge 5-Parish area. 

Periodic Review of Emissions

After 2020, any Plan that was approved more than ten years prior must be resubmitted for air quality review by BOEM.

Reporting of Emissions

  • If actual emissions from a project exceed projected emissions reported to BOEM, then must notify BOEM and provide appropriate data regarding the exceedance.
  • Periodic emission inventories (every 3 years) will be required. The old “Gulf-wide Offshore Activities Data System (GOADS)” will be replaced with the “OCS Emissions Inventory.” The OCS Emission Inventory will use a similar system used by the GOADS system.

Air Pollutants Regulated

BOEM rules would only regulate EPA criteria pollutants and ozone and particulate matter precursor pollutants. The list is expanded to include ammonia and lead. The list includes:

  • Nitrogen oxides (NOx) and Nitrogen dioxide (NO2)
  • Carbon monoxide (CO) – criteria pollutant
  • Volatile organic compounds (VOC) – ozone and PM2.5 precursor
  • Sulphur dioxide (SO2) and Sulphur oxides (SOx)
  • Hydrogen sulfide (H2S)
  • Particulate matter – PM2.5, PM10 – criteria pollutants
  • Ammonia (NH3) - PM2.5 precursor
  • Lead (Pb) – criteria pollutant

Hazardous Air Pollutants are not discussed in the proposed regulations. Greenhouse Gases (GHG) are not listed as air pollutants to be covered in the proposed rule.

Conclusions

Since these rules propose significant changes and burdens to industry, expect that many comments to the rule will be submitted by oil and gas companies, trade organizations and other interested parties.

If the final rules allow the use of emissions credits to offset emissions from offshore operations, then operators may want to consider generating emission reductions from existing onshore oil and gas (O&G) operations. Many O&G facilities are currently permitted to flare gas from storage tanks. Vapor recovery units (VRUs) could be used to replace the flares as a cost-effective way to produce emissions credits. Replacing flares with VRUs could provide the offsets needed for approval of an offshore project. Also, the facility using the VRUs gets the benefit of increased revenue from the natural gas recovered from the storage tanks.

HY-BON/EDI Products and Services

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 units (VRU)
  • Vapor recovery towers (VRT)
  • Vapor combustion devices (VCU)
  • Field Service (VRU/VCU maintenance, tank seal inspection/replacement, leak detection)