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EPA Proposes Changes to Storage Tank Provisions of 2012 NSPS for Oil & Natural Gas Sector

Beveridge & Diamond, P.C., April 12, 2013

On April 12, 2013, in response to a number of industry petitions for reconsideration, EPA proposed amendments to NSPS Subpart OOOO requirements for storage vessels.  78 Fed. Reg. 22,125 (Apr. 12, 2013).  The amendments provide additional time for some vessels to install controls, temporarily suspend certain monitoring requirements, provide an alternative compliance option, and make other changes to definitions, testing, and reporting requirements.  The Agency will accept comments until May 13, 2013.

Storage vessel controls.  After EPA issued the final Subpart OOOO rule in August 2012, the Agency received a number of petitions for reconsideration arguing that EPA had significantly undercounted the number of storage vessels affected by the rule.  After reviewing both the pace of well development and the higher liquids generation that results from hydraulic fracturing, EPA agreed and revised its estimates from approximately 300 new vessels per year to 11,600 per year.  EPA further agreed that compliant control devices would not be available for all of these new tanks until approximately 2016.  As a result, EPA has proposed a phased schedule for storage vessel compliance with the Subpart OOOO standards:  storage vessels constructed, modified, or reconstructed between August 23, 2011 and April 12, 2013 are now required only to submit a notification by October 15, 2013 (although they will be required to install controls if their emissions increase after April 12, even without a “modification”); storage vessels that are constructed, modified, or reconstructed after April 12 will be required to install compliant controls by the later of April 15, 2014 or 60 days after startup.  The Agency has asked for information on the number of storage vessels at different VOC emission levels to enable it to develop a strategy to manage higher-emission storage vessels that the proposal would allow to remain uncontrolled for extended periods.

Monitoring and testing requirements.  In light of the significant increase in the number of regulated storage tanks, EPA also reevaluated the feasibility of the testing and monitoring requirements imposed under the original rule, which included an initial performance test, installation and operation of a continuous parametric monitoring system (“CPMS”), calculation of daily averages of the continuously monitored parameters, and other requirements for combustion control devices.  The current proposal acknowledges that these requirements are not appropriate given the substantial increase in the number of affected storage vessels, the remoteness of well sites at which they are installed, and the various logistical and infrastructure concerns that these remote locations raise.  EPA has accordingly proposed more streamlined monitoring and compliance demonstration obligations (e.g., OVA and visual inspections) pending its full reconsideration of this issue, which the Agency expects to complete by the end of 2014.

Alternative compliance option.  Several petitioners noted that Wyoming allows the removal of control devices once tank emissions can be demonstrated to be below the applicability threshold, and requested that EPA adopt a similar approach under Subpart OOOO.  EPA agreed that this approach would be appropriate given the declining nature of well production over time, but proposed a 4 tpy (uncontrolled) threshold instead of the 6 tpy threshold for regulation under Subpart OOOO.  The Agency further clarified that any vessels that were at one time “affected facilities” under Subpart OOOO (i.e., vessels that at one time exceeded the 6 tpy threshold) would remain affected facilities even if their emissions dropped below the 4 tpy level.  

Other proposed changes include the following:

  • Owners and operators of storage vessels at all wellsites will have 30 days to determine emissions from new tanks and another 30 days to install controls.  Under the current rule, these 30 day periods are limited to wellsites with no wells already in production. 
  • The combustor control device manufacturer test protocol will be revised to be consistent with NESHAP Subpart HH.  EPA has solicited further comment on the option to comply based on manufacturer testing.
  • The deadline for submitting annual reports and compliance certifications will be extended from 30 days to 90.
  • The definitions of “storage vessel” and “storage vessel affected facility” will be amended to clarify that the rule is limited to vessels containing crude oil, condensate, intermediate hydrocarbon liquids or produced water (i.e., not fuel tanks), and to expressly incorporate the 6 tpy emissions threshold.  

The proposed rule is available at http://www.gpo.gov/fdsys/pkg/FR-2013-04-12/html/2013-07873.htm.  For more information, please contact Laura McAfee at lmcafee@bdlaw.com, (410) 230-1330 or Aron Schnur at aschnur@bdlaw.com, (410) 230-1334. 

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