Oil and Natural Gas Sector: Definitions of Low Pressure Gas Well and Storage Vessel

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

On July 17, 2014, the Environmental Protection Agency (EPA) published proposed amendments to the new source performance standards (NSPS) for the Oil and Natural Gas Sector. One of the issues addressed in the proposed amendments was the EPA's proposed definition of “low pressure gas well.” A petitioner's timely submitted comment on the proposed amendments concerning the definition was, inadvertently, not made part of the record in the rulemaking docket and was, therefore, not available to be considered by the EPA when the agency finalized the definition of “low pressure gas well” in its December 19, 2014, final amendments to the NSPS. To correct the above mentioned procedural defect, the EPA is re-proposing its definition of “low pressure gas well” for notice and comment. The EPA is also soliciting comment on certain issues raised in the missed comment.

We are also proposing to amend the NSPS to remove provisions concerning storage vessels connected or installed in parallel and to revise the definition of “storage vessel”. The EPA is granting reconsideration of the issue.

DATES:

Comments. Comments must be received on or before April 22, 2015.

Public Hearing. If the EPA holds a public hearing, the EPA will keep the record of the hearing open for 30 days after completion of the hearing to provide an opportunity for submission of rebuttal and supplementary information. If requested by March 30, 2015, we will hold a public hearing on April 7, 2015, from 1:00 p.m. (Eastern Standard Time) to 5:00 p.m. (Eastern Standard Time) at the U.S. Environmental Protection Agency building located at 109 T.W. Alexander Drive, Research Triangle Park, NC 27711. Please contact Ms. Virginia Hunt of the Sector Policies and Programs Division (E143-01), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-0832; to request a hearing, register to speak at the hearing or to inquire as to whether or not a hearing will be held. The last day to pre-register in advance to speak at the hearing will be April 6, 2015. Additionally, requests to speak will be taken the day of the hearing at the hearing registration desk, although preferences on speaking times may not be able to be fulfilled. If you require the service of a translator or special accommodations such as audio description, we ask that you pre-register for the hearing, as we may not be able to arrange such accommodations without advance notice. The hearing will provide interested parties the opportunity to present data, views or arguments concerning the proposed action. The EPA will make every effort to accommodate all speakers who arrive and register. Because this hearing is being held at a U.S. government facility, individuals planning to attend the hearing should be prepared to show valid picture identification to the security staff in order to gain access to the meeting room. Please note that the REAL ID Act, passed by Congress in 2005, established new requirements for entering federal facilities. If your driver's license is issued by Alaska, American Samoa, Arizona, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Montana, New York, Oklahoma or the state of Washington, you must present an additional form of identification to enter the federal building. Acceptable alternative forms of identification include: Federal employee badges, passports, enhanced driver's licenses and military identification cards. In addition, you will need to obtain a property pass for any personal belongings you bring with you. Upon leaving the building, you will be required to return this property pass to the security desk. No large signs will be allowed in the building, cameras may only be used outside of the building and demonstrations will not be allowed on federal property for security reasons. The EPA may ask clarifying questions during the oral presentations, but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the public hearing. Verbatim transcripts of the hearing and written statements will be included in the docket for the rulemaking. The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearing to run either ahead of schedule or behind schedule. Again, a hearing will not be held on this rulemaking unless requested. A hearing needs to be requested by March 30, 2015. Please contact Ms. Virginia Hunt of the Sector Policies and Programs Division (E143-01), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-0832.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2010-0505, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments.
• Email: a-and-r-docket@epa.gov. Include Docket ID No. EPA HQ-OAR-2010-0505 in the subject line of the message.
• Fax: (202) 566-9744. Attention Docket ID No. EPA HQ-OAR 2010-0505.
• Mail: Environmental Protection Agency, EPA Docket Center (EPA/DC), Mailcode 28221T, Attention Docket ID No. OAR-2010-0505, 1200 Pennsylvania Ave. NW., Washington, DC 20460.
• Hand/Courier Delivery: EPA Docket Center, Room 3334, EPA WJC West Building, 1301 Constitution Avenue NW., Washington, DC 20004. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

Instructions. Direct your comments to Docket ID Number EPA-HQ-OAR-2010-0505. The EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov,, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. (See section I.C. below for instructions on submitting information claimed as CBI.) The www.regulations.gov Web site is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you submit an electronic comment through www.regulations.gov,, the EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. If you send an email comment directly to the EPA without going through www.regulations.gov,, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. Electronic files should avoid the use of special characters or any form of encryption and be free of any defects or viruses. For additional information about the EPA's public docket, visit the EPA Docket Center homepage at: www.epa.gov/epahome/dockets.htm. The petitioners need not resubmit their previous comment, which will be considered before the EPA takes final action on today's re-proposal. However, the EPA welcomes additional comments and/or information the petitioners may wish to provide.

Docket. The EPA has established a docket for this rulemaking under Docket ID No. EPA-HQ-OAR-2010-0505. All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the EPA Docket Center, EPA WJC West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the EPA Docket Center is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:

Mr. Bruce Moore, Sector Policies and Programs Division (E143-05), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, North Carolina 27711, telephone number: (919) 541-5460; facsimile number: (919) 685-3200; email address: moore.bruce@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this reconsideration action apply to me?

Categories and entities potentially affected by today's action include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult either the air permitting authority for the entity or your EPA regional representative as listed in 40 CFR 60.4 (General Provisions).

B. How do I obtain a copy of this document and other related information?

In addition to being available in the docket, an electronic copy of this action is available on the World Wide Web (WWW). Following signature by the EPA Administrator, a copy of this proposed action will be posted at the following address: http://www.epa.gov/airquality/oilandgas/actions.html.

C. What should I consider as I prepare my comments for the EPA?

We seek comment only on the aspects of the final NSPS for the Oil and Natural Gas Sector specifically identified in this proposed rule. We are not opening for reconsideration any other provisions of the NSPS at this time.

Do not submit CBI to the EPA through www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI contained on a disk or CD-ROM that you mail to the EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comments that includes information claimed as CBI, you must submit a copy of the comments that does not contain the information claimed as CBI for inclusion in the public docket. If you submit a CD-ROM or disk that does not contain CBI, clearly mark the outside of the disk or CD-ROM as not containing CBI. Information not marked as CBI will be included in the public docket and the EPA's electronic public docket without prior notice. Information marked as CBI will not be disclosed except in accordance with the procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI only to the following address: OAQPS Document Control Officer (C404-02), OAQPS, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina, 27711, Attention Docket ID No. EPA-HQ-OAR-2010-0505.

II. Background

A. Low Pressure Gas Wells

On August 23, 2011 (76 FR 52758), the EPA proposed the Oil and Natural Gas Sector NSPS (40 CFR part 60, subpart OOOO). Among the elements of the proposed rule were provisions for reduced emission completion (REC), also known as “green completion” of hydraulically fractured gas wells. In the proposal, the EPA solicited comment on situations where conducting an REC would be infeasible. Several commenters highlighted technical issues that prevent the implementation of an REC on what they referred to as “low pressure” gas wells because of the lack of the necessary reservoir pressure to flow at rates appropriate for the transportation of solids and liquids from a hydraulically fractured gas well completion against additional back-pressure which would be caused by the REC equipment. Based on our analysis of the public comments received, we determined that there are certain wells where an REC is infeasible because of the characteristics of the reservoir and the well depth that will not allow the flowback to overcome the gathering system pressure due to the additional back pressure imposed by the REC surface equipment. On August 16, 2012, the EPA published the final NSPS (see 77 FR 49490). Based on comments received in response to our solicitation at proposal, we provided at § 60.5375(f) of the 2012 final NSPS that “low pressure gas wells” (i.e., those wells for which an REC would not be feasible because of a combination of well depth, reservoir pressure and flow line pressure) would not be required to meet the requirements for recovery of gases and liquids required under § 60.5375(a), except as provided in § 60.5375(f)(2) which subjects wildcat, delineation and low pressure gas wells to requirements for combustion of flowback emissions and to the general duty to safely maximize resource recovery and minimize releases to the atmosphere required under § 60.5375(a)(4). Under the NSPS, low pressure wells are treated the same as exploratory and delineation wells (i.e., they are not required to perform an REC). We also added a definition of “low pressure gas well” in the final rule that is based on a mathematical formula that takes into account a well's depth, reservoir pressure and flow line pressure. Section 60.5430 defines low pressure gas well as “a well with reservoir pressure and vertical well depth such that 0.445 times the reservoir pressure (in psia) minus 0.038 times the vertical well depth (in feet) minus 67.578 psia is less than the flow line pressure at the sales meter.”

Following publication of the 2012 final NSPS, a group of petitioners, led by the Independent Petroleum Association of America (IPAA), representing independent oil and natural gas owners and operators, submitted a joint petition for administrative reconsideration of the 2012 NSPS. The petitioners questioned the technical merits of the low pressure well definition and asserted that the public had not had an opportunity to comment on the definition because it was added in the final rule. The petitioners expressed concern that the formula adopted in the 2012 NSPS was based on “questionable assumptions” and “sparse data” and will “exclude from its scope many gas wells drilled in formations that historically have been recognized as `low pressure.'” In the view of the petitioners, “the 2012 definition has the potential to directly affect many smaller producers, who are less likely to be able to bear the costs of implementing costly RECs.” However, the administrative petition did not identify which assumptions were questionable and why, or what additional data the petitioners consider necessary to support the EPA's “low pressure gas well” definition.

On March 24, 2014, the petitioners submitted to the EPA a suggested alternative definition for consideration. The petitioners' definition is based on the fresh water hydrostatic gradient of 0.433 pounds per square inch per foot (psi/ft). The petitioners assert that this approach is straightforward and has been recognized for many years in the oil and natural gas industry and by governmental agencies and professional organizations. As expressed in the paper submitted by the petitioners, the alternative definition for consideration by the EPA, as stated by the petitioners, would be “a well where the field pressure is less than 0.433 times the vertical depth of the deepest target reservoir and the flow-back period will be less than three days in duration.”

On July 17, 2014, the EPA proposed clarifying amendments to the gas well completion provisions of the NSPS. In the July proposal, we expressed concern that the IPAA alternative definition is too simplistic and may not adequately account for the parameters that must be considered when determining whether an REC would be feasible for a given hydraulically fractured gas well. We expressed disagreement with the petitioners' assertion that the EPA definition is too complicated and that it would pose difficulty or hardship for smaller operators. However, we agreed with the petitioners that the public should have been provided an opportunity to comment on the 2012 definition of “low pressure gas well,” and we re-proposed the 2012 definition for notice and comment in the July 17, 2014, proposal. In addition, we solicited comment on the alternative definition suggested by the petitioners.

On August 18, 2014, prior to the close of the public comment period for the July 17, 2014, proposal, the IPAA, on behalf of the independent oil and natural gas owner and operator petitioners, submitted a comment to the EPA via the email address to the Air and Radiation Docket provided in the proposed rule. This timely submitted comment addressed the following: (1) Clarification that the petitioners' primary concern is that the EPA's definition would require REC to be performed on marginally cost-effective wells, and not that the calculation required by the EPA's definition would impose a hardship; (2) whether it was the petitioners' burden to justify the assumptions on which the EPA's definition was based; (3) accuracy of the Turner equation used in the development of the EPA's definition; (4) technical derivation of the petitioners' definition; and (5) relationship between low pressure gas wells and EPA's stages of flowback as proposed in the July 17, 2014, proposal.

The EPA published final amendments in the Federal Register at 79 FR 79018 on December 31, 2014, which finalized the definition of “low pressure gas well” unchanged from the 2012 definition. Subsequent to the December 31, 2014, publication of the final amendments, the EPA became aware that the comment submitted by the IPAA was not made part of the record in the docket and, thus, was not available to be considered by the EPA in its decision-making process prior to finalizing the amendments.

B. Storage Vessels Connected in Parallel

In the December 31, 2014, final rule, the EPA had finalized amendments to the NSPS to address, among other issues, the affected facility status of storage vessel affected facilities that are removed from service and storage vessels being returned to service. The final action included amendments related to storage vessels “connected in parallel” or “installed in parallel.” As we explained in the final rule preamble (see 79 FR 79027, December 31, 2014), “Although we believe it is an unlikely occurrence, we note that, when two or more storage vessels receive liquids in parallel, the total throughput is shared between or among the parallel vessels and, in turn, this causes the PTE of each vessel to be a fraction of the total PTE.” To address such isolated occurrences where storage vessels are installed or connected to reduce PTE and, therefore, avoid being subject to subpart OOOO, we amended the NSPS to address situations in which two or more storage vessels could be installed or connected in parallel which could, in some cases, lower the PTE of the individual storage vessels to levels below the 6 tons per year (tpy) applicability threshold provided in § 60.5365(e). Specifically, we amended § 60.5365(e)(4) to provide that a storage vessel that is being placed into service, and is connected in parallel with a storage vessel affected facility, is immediately subject to the same requirements as the affected facility with which it is being connected in parallel. We also amended the definitions for “returned to service” and “storage vessel” in § 60.5430 to provide that two or more storage vessels connected in parallel are considered equivalent to a single storage vessel with throughput equal to the total throughput of the storage vessels connected in parallel.

Following publication of the December 2014 final rule, we became aware that the terms “connected in parallel” and “installed in parallel” inadvertently include in storage vessels beyond those we attempted to address as described above. On February 19, 2015, the Gas Processors Association (GPA) submitted a petition for administrative reconsideration of the December 31, 2014, amendments. The GPA asserted that “it is quite common for multiple storage vessels to be situated next to each other and connected in parallel. Sometimes the storage vessels are operated in parallel, sometimes they are operated in series, and sometimes they are operated one-at-a-time with the connecting valves closed.” The GPA further asserted that this configuration has existed for decades and that “this language potentially has large impacts to how our members evaluate affected facility status.”

For the reasons discussed above, we are proposing to remove the regulatory provisions relative to storage vessels “installed in parallel” or “connected in parallel.” Instead, we solicit comment on other approaches to help avoid or discourage installation or operation of storage vessels that would unnecessarily reduce the potential to emit (PTE) of a single storage vessel.

III. Today's Action

In this action, the EPA is re-proposing for notice and comment the same definition of “low pressure gas well” that was finalized in 2012 and re-proposed in the July 17, 2014, proposal. In addition, as in the 2014 proposal, we are soliciting comment on the petitioners' alternative definition as presented above. We note that the EPA has now made the comment submitted by the IPAA on August 18, 2014, part of the record in the docket; therefore, it is not necessary for the IPAA to resubmit this comment in response to this proposed rule. However, the EPA welcomes the submittal of any additional comments by the petitioners and other interested parties. We are in the process of evaluating the IPAA comments. In this proposal, we solicit further comments on both the EPA proposed definition and on the IPAA alternative definition. We seek comment on (1) gas wells that are not considered “low pressure gas wells” based on the re-proposed EPA definition, but for which RECs are technically infeasible, and the specific well characteristics or other technical factors that make RECs technically infeasible; (2) gas wells that are considered “low pressure gas wells” based on the IPAA alternative definition, but for which RECs could be performed; and (3) specific well parameters or drilling techniques that should be considered in determining whether an REC would be technically feasible and how these factors could be used to define “low pressure gas well.”

With regard to storage vessels, in response to the GPA petition and in light of the considerations discussed above, we are proposing to amend the NSPS provisions relative to storage vessels “installed in parallel” or “connected in parallel.” Specifically, we are proposing to amend § 60.5365(e) to remove language related to storage vessels “installed in parallel” or “connected in parallel.” We are also proposing to amend the definitions of “returned to service” and “storage vessel” in § 60.5430 to remove language pertaining to storage vessels connected in parallel. We solicit comment on other approaches to help avoid or discourage installations or operations of storage vessels that would unnecessarily reduce the PTE of a single storage vessel.

IV. Statutory and Executive Order Reviews

Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

This action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.

B. Paperwork Reduction Act (PRA)

This action does not impose an information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060-0673. This action does not change the information collection requirements previously finalized and, as a result, does not impose any additional burden on industry.

C. Regulatory Flexibility Act (RFA)

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This action is a reconsideration of an existing rule and imposes no new impacts or costs.

D. Unfunded Mandates Reform Act (UMRA)

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

E. Executive Order 13132: Federalism

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This action does not have tribal implications as specified in Executive Order 13175. This action is a reconsideration of an existing rule and imposes no new impacts or costs. Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.

H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations because it does not affect the level of protection provided to human health or the environment. This action is a reconsideration of an existing rule and imposes no new impacts or costs.

List of Subjects in 40 CFR Part 60

• Administrative practice and procedure
• Air pollution control
• Environmental protection
• Intergovernmental relations
• Reporting and recordkeeping

For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is proposed to be amended as follows:

PART 60—STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

1. The authority citation for part 60 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

Subpart OOOO—Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution

2. Section 60.5365 is amended by revising paragraph (e) to read as follows:

3. Section 60.5430 is amended by revising the definitions of “Returned to Service” and “Storage Vessel” to read as follows: