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OIL AND GAS INDUSTRY FEDERAL STANDARDS CHANGES

This presentation discusses the changes in federal standards for the oil and gas industry, focusing on NSPS OOOO, NESHAP HH, and NESHAP HHH. It covers the affected facilities, such as natural gas well completions, storage vessels, pneumatic controllers, compressors, glycol dehydrators, gas plant fugitives, and treatment units. The presentation also highlights the phased-in approach for well completions, exceptions for new well completions, notification requirements, and reporting obligations. Additionally, it covers control options for storage vessels, regulations for pneumatic controllers and compressors, and requirements for sweetening units and fugitive components at gas processing plants.

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OIL AND GAS INDUSTRY FEDERAL STANDARDS CHANGES

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  1. OIL AND GAS INDUSTRYFEDERAL STANDARDS CHANGES Anne M. Inman, P.E. Air Permits Division September 11, 2012

  2. Today’s Topics • NSPS OOOO • NESHAP HH • NESHAP HHH

  3. New Federal Requirements Dates • Proposal August 23, 2011 • Prepublication EPA Final Rule April 17, 2012 • Federal Register Publication August 16, 2012 • Effective Date October 15, 2012*

  4. NSPS OOOO NESHAP HH and HHH Affected Facilities Include: • Natural Gas Well Completions • Storage Vessels • Pneumatic Controllers • Centrifugal & Reciprocating Compressors • Glycol Dehydrators • Gas Plant Fugitives and Treatment Units

  5. Natural Gas Well Completions • Regulations aimed at reducing Volatile Organic Compounds (VOCs) • Applicability for natural gas wells • Excludes crude oil wells • Focuses on flowback period for fractured and refractured wells

  6. Phased-In Approach for Well Completions • Phase 1:As of Aug 23, 2011 and before Jan. 1, 2015, operators must flare or use reduced emissions completions (RECs) (also known as green completions) unless combustion is a safety hazard or is prohibited by state or local regulations. • Phase 2:Beginning Jan. 1, 2015, operators must capture the gas and make it available for use or sale, i.e. green completions and use combustion control unless combustion is a safety hazard or is prohibited by state or local regulations.

  7. Exceptions for New Well Completions Green completions are not required for: • New exploratory (“wildcat”) wells or delineation wells (used to define the borders of a natural gas reservoir), because they are not near a pipeline to bring the gas to market. • Hydraulically fractured low-pressure wells, where natural gas cannot be routed to the gathering line. Operators may use a simple formula based on well depth and well pressure to determine whether a well is a low-pressure well.

  8. Refractured Natural Gas Wells • Refractured wells using green completions will not be considered to be “modified” if they meet notification and reporting requirements for new wells. • Refractured wells that flare are considered modified and thus subject to the NSPS requirements.

  9. Notification Requirements • Notify the Administrator in writing or by e-mail no later than two days before completion work begins • Compliance with state advance notification requirements satisfies the federal requirement • Options for notification in development by TCEQ and RRC

  10. Annual Reporting The final rule allows for individual well reports or company-wide reports following either of two options: • Traditional report: Must detail each well completion, and include information on compressors, pneumatic controllers, and storage tanks constructed, modified or reconstructed during the year. • List of all well completions with photographic documentation of each green completion at each site. The photo must include digital stamps the geographic coordinates of the well and the date of the well completion.

  11. Storage Vessels • After 8/23/11, any new, modified, or reconstructed storage tanks with VOC emissions of ≥ 6 TPY must reduce VOC emissions by at least 95% • Control Options 1. Route emissions to a combustion device or 2. Use vapor recovery (condensor)

  12. Storage Vessels Timing: • Applicable October 15, 2013. • Owners/operators at sites with no wells in production will have 30 days to determine the emissions from a tank; and another 30 days to install controls.

  13. Storage Vessels • Applicable to Permanent Tanks • Potentially Applicable to Portable Tanks • If located on a site ≥ 180 consecutive days • If temporary tanks removed before the 180 days, but other tanks return to the site within 30 days, the timing is not reset and the entire period applies • Must maintain clear records of all temporary and portable tanks at a site

  14. Pneumatic Controllers At oil and natural gas well sites from wellhead to processing plant: • Applies to continuous bleed natural gas-driven pneumatic controllers with a bleed rate greater than 6 scfh between wellhead and natural gas processing plant if constructed or modified after 8/23/11. • Applicable October 15, 2013. • Exceptions for applications requiring high-bleed controllers for certain purposes, including operational requirements and safety.

  15. Pneumatic Controllers • At natural gas processing plants: • The VOC emission limit is zero. • Compliance is required October 15, 2012.

  16. Centrifugal Compressors • Does not apply to compressors using dry seals. • Requires a 95% reduction in VOC emissions from compressors with wet seal systems. • Flaring, or • Routing captured gas back to a compressor suction or fuel system

  17. Reciprocating Compressors Two options for replacing rod packing: • Every 26,000 hours of operation (operating hours must be monitored and documented); or • Every 36 months (monitoring and documentation of operating hours not required).

  18. Sweetening Units At onshore natural gas processing plants: • Requirements to reduce SO2 emissions based on sulfur feed rate and sulfur content of acid gas. • Increased emission reduction standard from 99.8% to 99.9% for units with a sulfur production rate of at least 5 long tons per day.

  19. Fugitive Components At onshore natural gas processing plants: • Enhanced Leak Detection and Repair (LDAR) requirements. • Lowered the leak definition for valves from 10,000 ppm to 500 ppm and requires monitoring of connectors, pumps, pressure relief devices. and open-ended valves or lines. • Increased recordkeeping and reporting.

  20. Glycol Dehydrators • Large dehydrators: The final rule also retains the existing one-ton-per year benzene compliance option for large glycol dehydrators, meaning operators may reduce benzene emissions from large dehydrators to less than one ton per year as an alternative to reducing total air toxics emissions by 95%.

  21. Glycol Dehydrators • Small dehydrators at oil and gas production facilities (NESHAP HH): • Applies to glycol dehydrators with an annual average natural gas flowrate less than 85,000 scmd or actual benzene emissions less than 0.9 Mg/yr. • BTEX limits: • New sources – 4.66x10-6g/scm-ppmv. • Existing sources – 3.28x10-4g/scm-ppmv. • Small dehydrators with annual average benzene emissions of less than one ton per year are exempt.

  22. Glycol Dehydrators • Small dehydrators in the Natural Gas Transmission and Storage category (NESHAP HHH): • Applies to dehydrators with actual annual average natural gas flow rate less than 283,000 scmd or actual average benzene emissions less than 0.9 Mg/yr • BTEX limits: • New sources – 5.44x10-5 g/scm-ppmv • Existing sources – 3.01x10-4 g/scm-ppmv

  23. Glycol Dehydrators Compliance Deadlines: • New smallglycol dehydrators (commenced construction or reconstruction on or after 8/23/11) must comply immediately upon startup or within 60 days after the final rule is published in the Federal Register, whichever is later. • Existing small glycol dehys that are subject to the MACT for the first time: 3 yrs +60 days after publication. • Existing sources at production facility that constructed before 8/23/11, previously determined to be an area source, but becomes a major source on the 60th day after the effective date, due to the amendment to the associated equipment definition in 40 CFR Part 63, Subpart HH have 3 years +60 days after publication.

  24. Summary • Reducing VOCs from hydraulically fractured natural gas wells during flowback period. • Phased-in applicability • Exceptions for wildcat, delineation, and low pressure wells • Includes Pre-completion Notification and Annual Reporting requirements • Reducing VOCs from storage tanks • Includes temporary vessels if at site >180 days • Additional requirements: • Centrifugal & Reciprocating Compressors • Pneumatic Controllers • Sweetening Units • Glycol Dehydrators (small and large)

  25. Where to find more Information • www.texasoilandgashelp.org • AIROG@tceq.texas.gov • Small Business and Environmental Assistance 1-800-447-2827 or www.TexasEnviroHelp.org • Air Permits Division Main Line (512) 239-1250

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