Effective this past August 3, the EPA has new regulations for methane and volatile organic compound emissions from oil and gas operations As you know, reducing methane emissions is a key component of the President‘s climate change agenda.
Why should I care?
Because if you own or operate an oil and gas production, processing, transmission or storage facility, you will be required to comply with the new rule by no later than June 3, 2017. Other than that, don’t worry, be happy, and continue to go about your daily business in blissful ignorance of the impending regulatory burden.
What does it mean?
More expenses for operators of the aforesaid facilities, more demand for good inspectors, more operations for the EPA to
meddle in oversee, and a risk of fines for a substantial failure to comply, whether willfully or by inadvertence.
Last weekend I heard Keith Kottrill of Innovative Ventures present a synopsis of the new standards.
The summary is an attempt in 22 pages to capture the spirit and effect of the new rule. It was not prepared by a lawyer and is not intended as a legal analysis. It is the product of Keith and his colleagues who will be implementing and conducting the on-site testing required by the rule. It should be viewed, relatively speaking if you aren’t an engineer, as a good place to begin to understand the rules.
- Get familiar with the term “Quad Oa”, an informal reference to the new rule.
- There are two main parts of the rule: Control devices or practices must reduce methane and VOC emissions from certain equipment by 95%, and fugitive emission leak detection and repair (LDAR) applies only to well sites and compressor stations.
- The rule applies to “affected facilities”, specific types of equipment or facilities that are new, modified, or reconstructed after September 18, 2015. Beware, those terms have certain, definite meanings under the rule.
- There will be a reporting and paperwork burden.
- Look forward to quarterly inspections of some midstream facilities.
- Generally, repairs must be made within 60 days.
- See pages 13 and 14 for the EPA’s estimated industry-wide costs of compliance, including projected economic benefits. Honk if you believe the costs will be far higher.
- The rule is based partially on a model called the the “Social Cost of Methane”, and the “methane-related monetized climate benefits” of the rule. Honk twice if you believe those models are based more on ideology than on science.
Time will tell how this rule will work. Among other things, supporters and detractors alike will learn the true extent of methane leakage in our oil and gas infrastructure.
A musical interlude
Today, girl singers you might not have heard of: