On June 3, 2016, the U.S. Environmental Protection Agency (EPA) published a rule targeting methane and volatile organic compound (VOC) emissions from new, modified and reconstructed natural gas processing plants and compressor stations. This rule, known as “Subpart OOOOa” or “Quad Oa,” builds on existing regulations that EPA previously released for gas plants and natural gas wells. The rule, which goes into effect on Aug. 2, places a number of new requirements on midstream owners and operators, and could create headaches for businesses caught unprepared.
For the midstream industry, the new rule has two primary requirements:
- Mandating that control devices or practices be used to reduce methane and VOC emissions—both components of natural gas—from certain equipment by 95%; and
- Fugitive emission leak detection and repair (“LDAR”) requirements for compressor stations.
One of the most difficult near-term tasks for midstream businesses will be determining whether these requirements apply to their facilities. In addition, companies will have to carefully monitor any future changes to their facilities not currently subject to the new rule to know if those actions have suddenly “triggered” Quad Oa compliance obligations.
What midstream facilities are covered by Quad Oa?
EPA’s new rules only apply to specific types of equipment, compressor stations and natural gas processing plants that are new or have undergone certain changes since Sept. 18, 2015. (Natural gas processing plants built, modified or reconstructed before Sept. 18, 2015 may be subject to other regulations under Subpart OOOO.)
Determining whether a facility qualifies as new, modified or reconstructed can be particularly tricky because the analysis must be done for each piece of equipment or compressor station that could potentially be subject to the rule, and the definition of “modification” is different depending on the piece of equipment or facility in question. For example, a particular pneumatic controller at a compressor station can be “modified,” and thus be required to reduce emissions, when certain physical or operational changes are made to that specific controller.
In contrast, the entire compressor station will only be considered “modified” for purposes of the LDAR requirements when one or more additional compressors is installed at a compressor station, or when one or more compressors at a compressor station is replaced by one or more compressors of greater total horsepower than the compressor(s) being replaced. As a result, companies will need to undertake a careful analysis of their facilities and institute internal protocols to ensure that future changes at compressor stations and gas processing plants are flagged when those changes could result in additional compliance requirements.
What are the new compressor station LDAR requirements?
New, modified and reconstructed compressor stations must conduct quarterly leak-monitoring surveys using one of two methods specified in the rules: OGI technology or EPA Method 21.
Successfully implementing the new LDAR requirements in a cost-effective way will require significant near-term planning and assessment of station-specific considerations. The rule requires a survey of all “fugitive emission components” at the compressor station. As a result, operators will need to identify all of the “components” at their stations to ensure that every component is included in the surveys.
EPA defined components to include anything at the station “that has the potential to emit fugitive emissions of methane or VOC,” such as valves, connectors, open-ended lines, pressure-relief devices, compressors, instruments and meters. Equipment is not considered a “component” if it is already subject to other Quad Oa requirements and vents natural gas as part of its normal operation, as natural gas-driven pneumatic controllers or natural gas-driven pumps do.
A fugitive emission (leak) is defined as any visible emission from a component observed using OGI or an instrument reading of 500 ppm or greater using Method 21. Operators must perform an initial survey by the latter of June 3, 2017, or within 60 days after startup or a modification.
Following that initial survey, operators must complete quarterly surveys at each station spaced at least 60 days apart. If any leaks are detected during a survey, then repairs must be made within 30 days, unless the repair would require a shutdown. If a shutdown is required, then operators must repair any leaks during the next scheduled shutdown or within two years, whichever is earlier.
For equipment that is deemed “difficult to monitor” because it would require elevating personnel more than 2m, EPA only requires that the components be monitored once per calendar year. However, these “difficult to monitor” components must still be repaired within 30 days, rather than at the next scheduled shutdown.
A leak is considered to be repaired when no emissions are visible using OGI, or the Method 21 reading is below 500 ppm. All repaired components must then be resurveyed within 30 days of the repair to ensure that no emissions are visible using OGI, or greater than 500 ppm for Method 21.
When a particular leak found during the survey cannot be fixed on the day of the survey, the operator must either tag or take a digital photograph of the leaking component.
Operators must also prepare monitoring plans and comply with recordkeeping and reporting requirements. Companies must create one or more monitoring plans that include detailed information about how the surveys will be conducted.
For operators using OGI to perform surveys, these plans must include an observation path, indicating how the survey will be conducted, to ensure that all components are visible during the survey. Operators must also take and retain one digital photo from each survey. An annual report must be filed with the EPA and records must be maintained for five years.
EPA also added a new provision in the final rule that allows owners and operators to apply to the agency to use an alternative method to limit fugitive emissions. However, such applications will be subject to public notice and hearing, and the applicant must include a large amount of supporting data.
What are the new requirements for specific types of equipment?
Quad Oa also includes requirements aimed at reducing emissions from particular pieces of new, modified or reconstructed equipment.
Wet-seal centrifugal compressors must achieve a 95% control efficiency by capturing and routing VOC and methane emissions to a combustion control device. Alternatively, centrifugal compressors can use dry-seal systems or capture gas from centrifugal-compressor seals and route it back to a low-pressure fuel gas system.
Rod-packing systems on reciprocating compressors must be replaced every 26,000 hours of operation or every 36 months. Alternatively, operators can route emissions from the rod packing through a closed-vent system under negative pressure. Owners or operators can also apply to use an alternative method of compliance if they can demonstrate that it will result in the same emissions reductions as EPA’s methods.
For continuous-bleed, gas-driven pneumatic controllers, the final rule sets a gas-bleed limit of zero standard cubic feet of gas per hour (scf/h) at an individual controller for natural gas processing plants, and a limit of 6 scf/h for pneumatic controllers found anywhere else. These requirements will go into effect on Aug. 2.
Natural gas plants will have until Nov. 30 to meet the new requirements for pneumatic pumps, which include achieving a zero bleed gas rate. Pneumatic pumps at compressor stations are not subject to any new requirements.
This article is intended for educational and informational purposes only and does not constitute legal advice or services. These materials represent the views of and summaries by the author. They do not necessarily reflect the opinions or views of Vinson & Elkins LLP or of any of its other attorneys or clients.