Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 1 of 25 TABLE OF CONTENTS

Topics

1. Concern of Potential Gap in Best Available Monitoring Method (BAMM) Coverage (API and

others)

2. Concern that Decision to Extend BAMM is not Based on Any Rational Information in the

Rulemaking Docket

3. Concern that Extending BAMM Threatens to Undermine Quality of Data

4. Use of BAMM beyond 2011

5. Emission Sources Covered by BAMM

6. Use of BAMM for special circumstances

7. Other comments reviewed

Topic 1: Concern of Potential Gap in BAMM Coverage

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0012

‐ 001

Organization : American Petroleum Institute

Commenter : Karin Ritter

Comment Excerpt Text :

API looks forward to continuing the on

‐ going efforts with EPA to streamline the implementation of the

Mandatory Greenhouse Gas Reporting Program (GHGRP), and welcomes EPA’s attention to the issues

raised in the Petition for Reconsideration (filed on January 31, 2011) and the letter to EPA’s Bill Irving

(April 1, 2011). EPA issued a proposed rule on June 27, 2011 (76 FR 37300) that, if finalized, would

further revise BAMM provisions referenced in this letter to provide additional flexibility in the use of

BAMM for all Subpart W emission sources.

API and its members strongly support the revisions to the BAMM provisions for Subpart W, and concur

with the proposed action to automatically extend the applicability of BAMM for Subpart W sources to

December 31, 2011. However, there seems to be a potential gap in coverage. According to the current

Subpart W, companies are required to submit BAMM requests by July 31 in order to have BAMM for

§98.234 f(2) and f(3) available beyond September 30, 2011, to use BAMM for sources in paragraph f(4)

through 2011, or to use BAMM for sources not listed in paragraphs f(2), f(3), and f(4). Due to the fact

that the proposed rule

‐‐ the subject of these comments

‐‐ was published in the FR on June 27, 2011, it

appears unlikely that it can be finalized prior to July 31, 2011, and formally render this requirement

moot. This is a source of large uncertainty especially as it pertains to all subsection §98.234(f)(5)

sources.

In accordance with guidance provided by EPA in the “Additional Frequently Asked Questions (July 2011)”

document, API and its members understand that if this situation is unresolved at the time of the July 31,

2011 deadline, reporters who anticipate the potential need to use BAMM through December 31, 2011

should submit to EPA a written notice of intent (NOI), as specified in §98.234(f)(1). Furthermore, such anMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 2 of 25 NOI will be construed to meet the regulatory requirements, and allow reporters to submit further NOI’s

and complete BAMM extension applications in accordance with the yet to be promulgated final rule.

Response : EPA thanks the commenter for their comment.

In response to the comment on reconsideration issues, the amendments finalized in this action are in

part in response to petitions submitted for reconsideration on specific issues related to best available

monitoring methods. EPA is considering addressing in a separate rulemaking any additional items

raised in petitions for reconsideration not related to BAMM.

Consistent with the guidance given by EPA in the “Subpart W: Best Available Monitoring Methods” fact

sheet dated August 2011, EPA published a proposed rule on June 27, 2011 that sought comment on

allowing automatic use of BAMM for the entire 2011 reporting year for all emissions sources covered

under subpart W without seeking approval from EPA (76 FR 37300). The public comment period for that

proposed rule closed on July 27, 2011. Given the timing necessary to consider public comment and

finalize the rule, EPA was not able to promulgate a final rule by July 31, 2011, and July 31, 2011 was the

deadline for owners or operators to submit BAMM requests to EPA for use of BAMM in 2011. As noted

before, 40 CFR 98.234(f)(1) indicates that "If the reporter anticipates the potential need for best

available monitoring for sources for which they need to petition EPA and the situation is unresolved at

the time of the deadline, reporters should submit written notice of this potential situation to EPA by the

specified deadline for requests to be considered." As of July 31, 2011, the circumstances surrounding

the applicability of the deadline were "unresolved" and owners or operators who submitted a

notification of intent would have satisfied the rule requirements.

However, based on this final action, owners and operators of facilities subject to the requirements of

subpart W would not need to submit a BAMM request to EPA for approval before using BAMM during

any time period in 2011. Therefore, there is no gap in BAMM coverage. For owners and operators of

facilities that need to use BAMM beyond 2011, they must submit a notice of intent to apply for BAMM

by December 31, 2011, and follow that up with a BAMM request consistent with 40 CFR 98.234(f)(8) by

March 31, 2012. All other requests for BAMM coverage beyond 2012 must be submitted by September

30 th of the preceding year for which BAMM coverage is being sought.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0014

‐ 002

Organization: Gas Processors Association (GPA)

Commenter: Jeff Applekamp

Comment Excerpt Text:

GPA is also concerned about a potential gap in BAMM coverage. Currently, Subpart W

requires companies to submit BAMM requests by July 31, 2011 in order to have BAMM for §98.234 f(2)

and f(3) available beyond September 30, 2011, to use BAMM for sources in paragraph f(4) through 2011,

or to use BAMM for sources not listed in paragraphs f(2), f(3), and f(4). Due to the fact that this

Proposed Rule was not issued a direct final rule and may be subject to additional comments, it appearsMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 3 of 25 unlikely that it can be finalized prior to July 31, 2011, which would render this requirement moot. This is

a source of large uncertainty especially as it pertains to all subsection §98.234(f)(5) sources. As GPA and

its members understand, EPA has provided guidance in the “Additional Frequently Asked Questions (July

2011)” document, that suggests that if this situation is unresolved at the time of the July 31, 2011

deadline, reporters who anticipate the potential need to use BAMM through December 31, 2011 should

submit to EPA a written notice of intent (NOI), as specified in §98.234(f)(1). GPA has informed members

that this situation certainly will occur and it is unfortunate that companies will be subject to this

unnecessary burden.

Response: For a response to this comment, please see the response to EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0012

‐

001.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0009

‐ 003

Organization: Anadarko

Commenter: William W. (Bill) Grygar II

Comment Excerpt Text:

Anadarko is also concerned with the potential gap in BAMM coverage. Currently, Subpart W

requires applicable owners and operators to submit BAMM requests by July 31, 2011 in order to obtain

BAMM through the end of 2011 for those emission sources referenced in §98.234 (f)(2)

‐ (5). Without

this request, emissions sources referenced in §98.234 (f)(2)

‐ (3) are automatically covered by BAMM

only until September 30, 2011, and emission sources referenced in §98.234 (f)(4)

‐ (5) are not covered by

BAMM. Due to the fact that this Proposed Rule was not issued a direct final rule and may be subject to

additional comments, Anadarko has significant concern about the data elements encompassed under

§98.234 (f)(5) for which actual data may not be available, thereby presenting a compliance concern.

Anadarko has reviewed EPA’s guidance in the “Additional Frequently Asked Questions (July 2011)”

document, that suggests that if this situation is unresolved at the time of the July 31, 2011 deadline,

reporters who anticipate the potential need to use BAMM through December 31, 2011 should submit to

EPA a written notice of intent (NOI), as specified in §98.234(f)(1). Anadarko is accordingly submitting

NOIs per GPA’s guidance.

Anadarko supports this Proposed Rule and further select comments made by industry groups API, AXPC,

and GPA, of which Anadarko is a member.

Response: For a response to this comment, please see the response to EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0012

‐

001.

Topic 2: Concern that Decision to Extend BAMM is not Based on Any Rational Information in the

Rulemaking Docket

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0013

‐ 003

Organization : Environmental Defense Fund

Commenter : Peter ZalzalMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 4 of 25 Comment Excerpt Text:

EPA’s BAMM Extension Proposal alludes to concerns companies expressed regarding the compliance

deadlines for BAMM utilization. Specifically, the Agency references letters from Chesapeake Energy, the

American Exploration and Production Council, and the American Petroleum Institute (“API”), along with

meetings where “several companies requested an extension of the BAMM provisions in order to

complete initial equipment inventories and to secure internal resources to report data to EPA in

accordance with the rule requirements.” 76 Fed. Reg. at 37,303.

On July 22, just 5 days before the close of the comment period, EPA included six petitions for

reconsideration in the reconsideration docket for Subpart W and a May 3 letter from API in the docket

for this rulemaking. The May 3 API Letter explicitly requests an extension to use automatic BAMM based

on scope and breadth of analysis Subpart W requires, identifying the total number of sites and facilities

covered by the rule and the geographic distribution of covered facilities generally. EPA Doc. No. EPAHQ

‐

OAR

‐ 2011

‐ 0417

‐ 0002 (May 3 API Letter). Neither the letter nor any other information in the rulemaking

docket, however, provide data concerning compliance challenges for specific reporters or an empirical

justification for why a three month automatic deferral is reasonable to alleviate these concerns.

Similarly, the docket contains no information supporting a relaxation of the BAMM provisions beyond

2011. Cf. May 3 API Letter 4

‐ 8 (identifying safety and technical concerns but failing to identify other

“unique or unusual” circumstances that justify a relaxation of the post

‐ 2011 BAMM provisions). Absent

meaningful decision criteria and without a factual basis in the record, the BAMM Extension Proposal

lacks a rational basis. See Motor Vehicle Mfrs. Ass’n. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43

(1983); Motor Vehicle Mfrs. Ass'n v. EPA, 768 F.2d 385, 397 (D.C. Cir. 1985).

Response: EPA disagrees that the provisions finalized in this rulemaking are without a factual basis and

that they lack a rational basis. Please see section II.C of the preamble for the final rule amendments for

a response to this comment.

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0008

‐ 003

Organization : Sierra Club

Commenter : Joanne Spalding

Comment Excerpt Text :

Given Congress’s direction to EPA to publish and “begin implementation” of greenhouse gas reporting

“in all sectors of the economy of the United States” “not later than June 26, 2009,” Appropriations Act

of 2009, Pub.L. No. 111

‐ 8, 124 Stat 524, 729 (Mar. 11, 2009), EPA must carefully justify any decision to

defer high quality data reporting. EPA’s thin record for this rulemaking, which does not include any

technical documentation of the need for BAMM past any specific date, nor any analysis of the extent to

which data quality will suffer, provides little support for EPA’s actions. To support its proposal, EPA

instead largely cites three industry letters

– a petition for reconsideration from the American Petroleum

Institute (API), a similar petition from Chesapeake Energy Corporation and American Exploration and

Production Council, and an informal comment letter from API.

These letters do not provide any empirical data supporting EPA’s proposal. They certainly do not support

EPA’s proposed extension of BAMM past 2011, or even 2012, contained in proposed 40 C.F.R. §

98.234(f)(8)(iii), which invites post

‐ June 30, 2012 BAMM applications. The API petition does not offerMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 5 of 25 any detailed analysis of industry needs, and simply requests a deadline extension through 2011, and

that EPA “state it will consider BAMM requests for such time as there is a reasonable need for use of

BAMM.” API Petition at 4

‐ 5. The Chesapeake petition likewise only requests BAMM “for the entire first

reporting year 2011.” Chesapeake Petition at 8. The later API letter, which EPA quotes uncritically in its

proposal, likewise offers no detailed industry survey showing that post

‐ 2011 BAMM is necessary,

instead offering anecdotal descriptions of compliance challenges but without demonstrating that these

challenges cannot be addressed in 2011, or, at the latest, in 2012. See generally API Letter of May 3,

2011. Even that letter focuses only on making BAMM “more widely available through 2012,” and does

not request any further extensions past that year. See id

. at 2. Thus, even the industry letters which EPA

cites accept that BAMM ought to be available only for the limited time in which compliance difficulties

remain.

This limited record does not justify EPA’s broader proposal to continue accepting BAMM requests after

June 2012, or indeed, even after December 2011. EPA has not shown that its proposal will not seriously

impair data quality, especially as the BAMM requests it contemplates will cover some of the most

poorly

‐ known, and most important, emissions sources. Nor has it shown that its proposed BAMM

extension rationally relates to the anecdotal compliance difficulties that the industry letters complain of.

Nor has it calculated what costs, if any, an extended BAMM deadline avoids, nor determined when

those costs no longer justify allowing industry to avoid fully complying with Subpart W. EPA also has not

shown that these costs are real by, for instance, inquiring into how many operators would be unable to

comply with Subpart W by any given date. If EPA moves forward, it must justify its proposal on such a

substantial record, not on industry anecdotes.

Response: Please see section II.C of the preamble for the final rule amendments for a response to this

comment, and section III of the preamble for background on the economic impacts of this final rule.

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0008

‐ 004

Organization : Sierra Club

Commenter : Joanne Spalding

Comment Excerpt Text :

That said, we understand that industry groups have raised concerns that fully implementing Subpart W

may take time to do efficiently and safely. Nevertheless, the public interest in accurate, comprehensive

greenhouse gas emissions data from this critical industry warrants ending the use of such

approximations quickly. EPA should therefore set firm deadlines to ensure that industry comes into

compliance as rapidly as it safely can. In view of these challenges, we recommend that EPA do the

following:

First

, EPA should not finalize any deadline extension unless it can do so on the basis of a complete

technical analysis showing the need for the extension, the impact of that extension on the rule’s data

quality, and that the extension is warranted despite these costs.

Second

, as not even the industry has requested BAMM after 2012, nor demonstrated any need for such

measures, EPA should either strike its proposed 40 C.F.R. § 98.234(f)(8)(iii), thus establishing an end toMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 6 of 25 BAMM of June 30, 2012, or modify that provision to allow for deadline extensions only through

December 31, 2012 and no further. Either course would allow industry to spend much of 2012

upgrading any remaining facilities, while maintaining a hard deadline for full compliance.

Third

, EPA should restore its “extreme circumstances” standard for consideration of BAMM applications.

Response: EPA thanks the commenter for their submission. In regard to the first argument about EPA

conducting and producing a technical analysis supporting the extensions to the related BAMM dates,

please see section II.C of the preamble for the final rule amendments for a response to this comment.

Regarding the second argument on ending BAMM no later than December 31, 2012, and on the

assertion that industry did not request BAMM beyond 2012, please see section II.C of the preamble for

the final rule amendments for a response to this comment.

For the third argument that EPA should restore the original language of “extreme circumstances”

instead of “unique or unusual” for BAMM beyond 2011, EPA disagrees with the commenters’

suggestion, please see section II.C of the preamble for the final rule amendments for a response to this

comment.

Topic 3: Concern that Extending BAMM Threatens to Undermine Quality of Data

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0013

‐ 001

Organization : Environmental Defense Fund

Commenter : Peter Zalzal

Comment Excerpt Text:

We support the Agency’s efforts to implement a robust reporting program and share EPA’s interest in

collecting accurate, reliable data. EDF is deeply concerned, however, that the Agency’s proposal to

extend the availability of Best Available Monitoring Methods (“BAMM”) for Subpart W sources will

result in less reliable data from this important source of greenhouse gas emissions.

We incorporate by reference, as part of the administrative record for this rulemaking proceeding, all

documents and studies we cite, including our joint comments on the reproposed Subpart W, EPA Doc.

No. EPA

‐ HQ

‐ OAR

‐ 2009

‐ 0923

‐ 1155 (“Subpart W Comments”).

THE CLEAN AIR ACT UNDERSCORES THE IMPORTANCE THAT SUBPART W PRODUCE HIGH

‐ QUALITY DATA

EPA has frequently recognized the importance that the Mandatory Reporting Rule produce robust, high

‐ quality data. See, e.g., 74 Fed. Reg. 56,260, 56,265 (Oct. 30, 2009) (“Accurate and timely information on

GHG emissions is essential for informing many future climate change policy decisions. Although

additional data collection (e.g., for other source categories or to support additional policy or program

needs) will no doubt be required as the development of climate policies evolves, the data collected in

this rule will provide useful information for a variety of polices.”).Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 7 of 25 Inherent in the Administrator’s broad

‐ based authority to collect data under section 114 of the Act is the

presumption that any collected data are reliable. Indeed, the law anticipates such a result. Cf. NRDC v.

EPA, 529 F.3d 1077, 1085 (D.C. Cir. 2008) (disagreeing with claims that data EPA collected under section

114 were unreliable).

HIGH

‐ QUALITY DATA IS ESPECIALLY CRITICAL FOR SUBPART W SOURCES AND MEASUREMENT

METHODOLOGIES EXIST TO PRODUCE SUCH DATA

Accurate emissions data are especially important for Subpart W sources because of the predicted rate of

expansion for oil and gas development and the high degree of variability associated with these

emissions. The Energy Information Administration predicts that shale gas production will “increase

strongly through 2035 in the AEO2011 Reference case, growing almost fourfold from 2009 to 2035.”

ENERGY INFORMATION ADMINISTRATION, ANNUAL ENERGY OUTLOOK 2011 2 (Apr. 2011). Indeed,

according to the latest EPA greenhouse gas inventory, oil and gas activities are already the largest

source of U.S. methane emissions, which is an extremely potent greenhouse gas with a warming

potential 25 times that of carbon dioxide over 100 years and 72 times over 20 years.

Moreover, EPA has itself recognized the problem of emissions underreporting in the oil and gas sector.

In its own Technical Support Document (TSD) for the proposed Mandatory Reporting Rule, EPA

concludes that several emissions sources are “significantly underestimated” in the 1996 U.S. GHG

Inventory, specifically identifying concerns with: (1) well venting for liquids unloading; (2) gas well

venting during well completions; (3) gas well venting during well workovers; (4) crude oil and

condensate storage tanks; (5) centrifugal compressor wet seal degassing venting; and (6) flaring. 1

According to EPA, the emissions estimates for these sources “do not correctly reflect the operational

practices of today” and, in fact, EPA believes “that emissions from some sources may be much higher

than currently reported in the U.S. GHG Inventory.”2 As a result, in the TSD, EPA includes revised

emission factors for four of these underestimated sources leading to revised emissions estimates

ranging from ten times higher (for well venting from liquids unloading) to 35 times higher (from gas well

venting from conventional well completions) to as much as 3,500 and 8,800 times higher (for gas well

venting from completions and well workovers of unconventional wells, respectively). 3

These factual circumstances create an imperative for accurate measurements from the oil and gas

sector, and evidence exists suggesting such measurements are achievable. Indeed, the City of Forth

Worth recently completed a year

‐ long assessment of natural gas emissions at 400 well sites across the

city relying on direct measurement techniques. 4

EXTENDING BAMM FOR SUBPART W SOURCES THREATENS TO UNDERMINE THE QUALITY OF DATA

FROM SUBPART W

In the Final Subpart W Rule, EPA identified procedures facilities could use while coming into full

compliance with the Rule. EPA defined these Best Available Monitoring Methods (“BAMM”) as:

“monitoring methods currently used by the facility that do not meet the specifications of a relevant

subpart; supplier data; engineering calculations; or other company records.” 75 Fed. Reg. at 74,471.

The Agency has now proposed to relax provisions regarding facilities use of BAMM in essentially three

ways, each of which will allow for expanded use of these less reliable methodologies in calendar year

2011 and beyond. See Mandatory Reporting of Greenhouse Gases: Petroleum and Natural Gas Systems:Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 8 of 25 Revisions to Best Available Monitoring Method Provisions 76 Fed. Reg. 37,300 (June 27, 2011) (“BAMM

Extension Proposal”). First, EPA has proposed to extend facilities’ ability to automatically use BAMM for

the remainder of calendar year 2011. Second, EPA has proposed to expand the availability of automatic

BAMM in calendar year 2011 to encompass sources listed in 98.234(f)(4) (Leak Detection and

Measurement) and 98.234(f)(5)(iv) (all other sources not previously listed). 40 CFR 98.234(f)(4),

98.234(f)(5)(iv).

Finally, EPA’s BAMM Extension Proposal relaxes the requirements for facilities to utilize BAMM beyond

2011. Compare 75 Fed. Reg. at 74,471 (Nov. 30, 2010) (“EPA does not anticipate extending the use of

best available monitoring methods beyond 2011 as approximately fourteen months will have passed

since the Administrator’s signature; however, under extreme and unique circumstances

, which include

safety, or a requirement being technically infeasible or counter to other local, State or Federal

regulations, EPA may consider granting a further extension.”) with 76 Fed. Reg. at 37,304 (owners may

apply for BAMM beyond 2011 based on “unique or unusual circumstances such as data collection

methods that do not meet safety, technical, or legal issues rendering them unable to meet the

requirements of subpart W”) (emphasis added). The Agency’s proposal to replace “extreme” with

“unusual” and to add the qualifier “such as,” expands the number of facilities that may seek BAMM in

the future and opens the possibility that such requests are not limited to safety, technical, or legal

concerns.

These changes threaten to transform BAMM from a limited, transitional program meant to serve as a

bridge to full compliance into a permanent fixture of the Subpart W reporting program. While the

Agency carefully selected reporting methodologies under Subpart W, the same cannot be said for the

vast, non

‐ standardized set of techniques facilities can employ as BAMM. See supra at 3.

1 See EPA Technical Support Document at p.7.

2 EPA Technical Support Document at p.23.

3 See EPA Technical Support Document, Table 1, at p.8 and Appendix B; see also Subpart W Comments

at 5

‐ 9.

4 See City of Fort Worth, Natural Gas Air Quality Study (July 13, 2011), available at

http://www.fortworthgov.org/uploadedFiles/ Gas_Wells/AirQualityStudy_final.pdf.Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 9 of 25 Response:

In response to the first argument about extending facility’s abilities to use BAMM automatically in 2011

please see section II.C of the preamble for the final rule amendments for a response to this comment.

In response to the second argument about the expansion of the type of emissions sources covered

under automatic BAMM for 2011, please see section II.C of the preamble for the final rule amendments

for a response to this comment.

In response to the third argument about relaxing the criteria for use of BAMM beyond 2011, please see

section II.C of the preamble for the final rule amendments for a response to this comment.

Finally, in response to the last argument that the amendments in today’s action would undermine the

subpart W reporting program through the collection of non

‐ standardized techniques, please see

section II.C of the preamble for the final rule amendments for a response to this comment.

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0013

‐ 002

Organization : Environmental Defense Fund

Commenter : Peter Zalzal

Comment Excerpt Text:

To promote collection of the high

‐ quality data that the Clean Air Act contemplates, EDF strongly

encourages the Agency:

• 1) Not to extend the availability of automatic BAMM to sources categorized under 98.234(f)(4), Leak

Detection and Measurement, and, likewise, not to make BAMM available for these sources post

‐ 2011.

Accurate information on leaking equipment lies at the core of Subpart W and allowing BAMM for these

measurements would undermine the utility of these data and obscure opportunities for facilities to both

reduce emissions and save money.

• 2) To restore the language from the Final Subpart W Rule regarding BAMM post

‐ 2011. Because of the

importance of reliable data, EPA should only permit alternative methods where facilities experience

real, exigent circumstances. If EPA chooses to reopen the language regarding post

‐ 2011 BAMM, EDF

encourages the Agency develop and implement clear, rigorous criteria for granting BAMM requests and

that any such grants be expressly time

‐ limited. Below, EDF has included proposed language addressing

BAMM beyond 2011:

Requests for extension of the use of best available monitoring methods beyond 2011 for sources listed

in paragraphs (f)(2), (f)(3), and (f)(5)(iv) of this section. To obtain approval to use BAMM after December

31, 2011, the owner or operator must submit a request demonstrating to the Administrator's

satisfaction that the owner or operator has extraordinary and unique circumstances based on clearly

‐Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 10 of 25 demonstrated safety concerns or technical infeasibility, the reasons the reporter cannot otherwise

address the safety concerns or technical infeasibility, and the length of time requested for using BAMM

(less than one year). After December 31, 2011, any BAMM extension will be valid for a maximum of one

year. The use of BAMM after December 31, 2012 must be based on a new request and will be denied

unless due to extreme circumstances based on demonstrated safety concerns.

• 3) To clearly identify facilities that have requested BAMM, including the data from those facilities that

are BAMM and the methods facilities have used to obtain those data. To promote transparency, EDF

encourages EPA to include this information on its website, along with its public disclosure of the Subpart

W data.

Response: Regarding the first suggestion by the commenter to withholding the extension of automatic

BAMM to sources categorized under 40 CFR 98.345(f)(4)

, please see section II.C of the preamble for the

final rule amendments for a response to this comment.

Regarding the second suggestion by the commenter to restore the original BAMM language used in the

final subpart W rule (75 FR 74458) and rationale for that suggestion, please see section II.C of the

preamble for the final rule amendments for a response to this comment. Also, the suggestion to allow

BAMM for a maximum of one year increments is addressed in that section.

Regarding the third suggestion by the commenter to post data related to the BAMM process on the

world wide web, EPA agrees with the commenter that relevant information on the BAMM process

should be publically disseminated. EPA is currently reviewing ways to post relevant and appropriate

information on the BAMM submissions on the Agency website.

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0008

‐ 001

Organization : Sierra Club

Commenter : Joanne Spalding

Comment Excerpt Text :

Thank you for accepting these comments on behalf of the Sierra Club, Natural Resources Defense

Council, Clean Air Task Force, and Earthjustice. As you know, the oil and gas production sector is among

the most important sources of domestic greenhouse gas emissions. According to EPA, methane and

carbon dioxide emissions from natural gas systems exceeded 317 million metric tons CO2e in 2009. 1

Properly measuring and controlling these emissions

– the lion’s share of which result from methane

venting

‐‐ will be critical to addressing the climate crisis, particularly as natural gas production booms in

shale gas regions across the country. That is why we are concerned that, in this rule, EPA proposes to

allow oil and gas companies to indefinitely avoid fully implementing the provisions of Subpart W of the

Mandatory Greenhouse Gas Reporting Program.

As EPA knows, the emissions from many sources within the industry are poorly understood. In

particular, the Technical Support Document (TSD) for Subpart W shows that emissions factors for well

venting during completions, venting during workovers, and centrifugal compressor wet seal degassing

venting had long been underestimated

– in many cases hundreds of times over. 2 Even EPA’s new

emissions estimates are very rough, based, in many cases, on fragmentary data. Information from theMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 11 of 25 Subpart W program is absolutely essential to accurately characterize this major emissions source,

especially as EPA moves forward with its proposed New Source Performance Standards and National

Emissions Standards for Hazardous Air Pollutants from the industry. 1 Technical Support Document for

Subpart W at 10; see also U.S. EPA, Inventory of U.S. Greenhouse Gas Sources and Sinks 1990

‐ 2009 at

ES

‐ 5 (characterizing these emissions). 2 U.S. EPA, Greenhouse Gas Reporting from the Petroleum and

Natural Gas Industry: Background Technical Support Document at Table 1 (2010). 2

Yet, in this proposal, EPA would allow oil and gas companies to avoid accurate reporting on precisely

those sources for which its information is poorest. The proposal would allow companies to apply “Best

Available Monitoring Methods” (BAMM) for many sources, an ad hoc collection of methods that may

even include estimates from company records, through 2012, and possibly longer. See 76 Fed. Reg. at

37,302. Notably, the sources for which EPA would automatically allow BAMM for the remainder of 2011

include those listed in sections (f)(2)

‐ (4) of 40 C.F.R. § 98.234. See 76 Fed. Reg. at 37,306. These sections

cover emissions from “[g]as well venting during well completions and workovers with hydraulic

fracturing,” (f)(2), reports on the“[c]umulative hours of venting” and number of blowdowns,

completions, and workovers, (f)(3), and emissions from centrifugal compressor wet seal degassing,

(f)(4). These are the same sectors that the TSD identified as both important and poorly characterized.

1 Technical Support Document for Subpart W at 10; see also U.S. EPA, Inventory of U.S. Greenhouse Gas

Sources and Sinks 1990

‐ 2009 at ES

‐ 5 (characterizing these emissions).

2 U.S. EPA, Greenhouse Gas Reporting from the Petroleum and Natural Gas Industry: Background

Technical Support Document at Table 1 (2010).

Response: For a response to the comment on the impact the use of BAMM will have on data quality,

please see response to comment EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0013

‐ 001.

Topic 4: Use of BAMM Beyond 2011

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0008

‐ 002

Organization : Sierra Club

Commenter : Joanne Spalding

Comment Excerpt Text :

Even more concerning, EPA proposes to extend this deferral well into the future. Under the existing rule,

EPA will consider the use of BAMM beyond 2011 only “in extreme circumstances,” which are defined as

including reasons justified on safety grounds, or because a “requirement [is] technically infeasible” or

“counter to other local, State, or Federal regulations.” 40 C.F.R. § 98.234(f)(8). Consistent with

Congress’s direction that EPA implement the reporting system by 2009, EPA disfavored such BAMM

extensions, for which it did not “anticipate[] a need.” 40 C.F.R. § 98.234(f)(8). EPA now proposes to

jettison this “extreme circumstances” requirement, in favor of a more relaxed “unique or unusual

circumstances” standard, and to continue accepting BAMM applications indefinitely. 76 Fed. Reg. atMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 12 of 25 37,306

‐ 07. Under the proposed rule, BAMM would likely be used by many operators at least through

mid

‐ 2012, and could continue to be used beyond that if the operator demonstrates further “unique or

unusual circumstances.” Id.

Response: In this action, EPA is finalizing amendments to the BAMM provisions which would grant

BAMM for discrete time periods. Please see section II.B of the preamble for the final rule amendments.

Please see section II.C of the preamble for the final rule amendments for responses to comments

related to the selection of the BAMM deadlines in this action.

For a response to the comment about amendments to BAMM requirements, please see response to

comment EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0013

‐ 001.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 002

Organization: Chesapeake Energy Corporation and the American Exploration & Production Council

Commenter: Grover R. Campbell and V. Bruck Thompson

Comment Excerpt Text:

EPA proposes to allow reporters to use BAMM automatically through December 31, 2011 and to

automatically obtain BAMM through June 30, 2012 if a timely notice of intent (NOI) and BAMM request

are submitted. Assuming that EPA is able to resolve the remaining issues in the various petitions for

reconsideration through the issuance of a final rule by December 2011, the June 2012 deadline will

provide additional time to put a monitoring system in place. Chesapeake and AXPC support this

extension.

As noted above, however, the development of such a system requires reporters at a minimum to review

the revised final rule, develop most of the necessary data collection systems, conduct training and

ensure accuracy in order to achieve compliance with the revised final rule. Chesapeake and AXPC are

not certain that this can be accomplished in that time frame, and urge EPA to extend automatic BAMM

for all data inputs beyond June 2012. This will be even more important in the event that the final

reconsideration rule leaves continuing uncertainty in the definition of terms.

Extending BAMM automatically through June 30, 2012 will provide some relief to reporters and EPA

while reconsideration is ongoing. However, in addition to the BAMM extensions and revisions proposed

in this rule, it is important to make further revisions to the BAMM provisions to allow additional BAMM

post

‐ June 30, 2012. EPA has acknowledged that BAMM may be available to companies beyond June 30,

2012 if the BAMM extension request submitted by March 30, 2012 is approved. 76 Fed. Reg. 37,304

("The owners and operators who apply for BAMM beyond 2011 must follow the requirements as stated

in subpart W by July 1, 2012, unless EPA approves their BAMM extension request (due March 30,

2012)").

There are foreseeable circumstances for which BAMM will be necessary beyond June 30, 2012.

Assuming EPA will resolve outstanding issues raised in the petitions for reconsideration by the end of

2011, the number of instances where BAMM will be necessary beyond June 2012 may be limited.

However, EPA should anticipate that there may be some situations that are beyond companies' control,Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 13 of 25 which would require additional BAMM beyond June 2012. For example, if there is insufficient supply of

necessary monitoring equipment or if there are unexpected equipment manufacturing delays that

prevent a company from installing that necessary monitoring equipment until late 2012, EPA should

allow that company to use BAMM until the equipment can be delivered and installed. Another

possibility is that the terms as finalized in the rule require further clarification by EPA, as has been the

case with many of the elements of the Subpart W rule. In that case, sources will not be able to move

quickly to develop systems, if they must resolve interpretation issues prior to system development.

Chesapeake and AXPC understand that EPA is seeking comments at this time only on the revisions

provided in the proposed rule and not all BAMM

‐ related concerns raised in the petitions for

administrative reconsideration. 76 Fed. Reg. 37,304. Therefore, Chesapeake and AXPC will reserve any

further comments about the need for additional BAMM post

‐ June 30, 2012 for a future rulemaking that

specifically addresses this issue.

Response: In response to the comment on reconsideration issues, the amendments finalized in this

action are in part in response to petitions submitted for reconsideration on specific issues related to

best available monitoring methods. EPA is considering addressing in a separate rulemaking any

additional items raised in petitions for reconsideration not related to BAMM.

In reference to the argument made by the commenter about the need for BAMM, based on the

provisions in this final action, owners and operators of facilities desiring to use BAMM beyond June 30,

2011 must specify the requested amount of time in the BAMM request that is submitted by March 30,

2012. Further, based on the provisions finalized in this action, if owners and operators believe that they

will not be able to comply with the rule as written and would need additional time in order to get

processes in place, or as the commenter noted above, to obtain monitoring equipment, they should

submit a BAMM form and clearly demonstrate the need for BAMM.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 004

Organization: Chesapeake Energy Corporation (Chesapeake) and the American Exploration & Production

Council (AXPC)

Commenter: Grover R. Campbell (Chesapeake) and V. Bruck Thompson (AXPC)

Comment Excerpt Text:

EPA has proposed a two

‐ prong process for reporters to obtain BAMM through June 30, 2012. First,

reporters that need BAMM in 2012 must submit an NOI to EPA by December 31, 2011. The second step

is to submit a full BAMM request by March 30, 2012.

Reporters anticipate that sometime in December 2011, EPA might be able to issue a final rule resolving

any remaining issues raised in the various petitions for administrative reconsideration. If that timing is

correct, companies expect to have a very short window of time to become familiar with the revisions

EPA may make to the rule and then assess whether those changes require more or less BAMM beyond

2011.

Therefore, Chesapeake and AXPC strongly support the availability of BAMM automatically through June

30, 2012 for all reporters for all data parameters for all source types for each industry segment subjectMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 14 of 25 to Subpart W. Chesapeake and AXPC further strongly support these same terms for automatic BAMM

beyond June 2012, in light of the difficulties in implementing this rule already faced by reporters.

The proposed 2

‐ step process for obtaining BAMM beyond 2011 provides a reasonable means of meeting

the BAMM criteria. Given the complexity of the rule and the large number of covered sources,

Chesapeake and AXPC would not be able to prepare BAMM requests by December 31, 2011. In fact, it

would not be reasonable for EPA to publish key definitions and other provisions relating to the rule’s

applicability by December 2011, and require sources to submit at that same time, requests for BAMM.

Rather, requiring sources to notify EPA of their intent to seek BAMM by December 2011 is as much as

can reasonably be required of sources in that timeframe. Companies would not be able to submit

BAMM requests by then because they will need time to review any revisions EPA may make to Subpart

W in response to the petitions for reconsideration.

Companies will need to conduct inventories and assess what actions need to be taken to achieve

compliance, particularly whether BAMM is needed and for how long. It would not be possible for

companies to accurately and completely conduct all of these tasks in addition to preparing the BAMM

request paperwork by December 31, 2011. Therefore, Chesapeake and AXPC do not support requiring

BAMM requests be submitted by December 31, 2011.

Response: EPA carefully considered the BAMM deadlines in today’s action. Please see section II.B of

the final rule amendments for more information on the final provisions in this action. In addition, please

see section II.C of the preamble for the final rule amendments for a response to this comment.

Topic 5: Emission Sources Covered by BAMM

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0012

‐ 002

Organization : American Petroleum Institute

Commenter : Karin Ritter

Comment Excerpt Text :

Continuously Operated Equipment

API requests the following regulatory language revisions to allow the use of BAMM until the next

scheduled shutdown for circumstances where compliance would require shutdown of facilities or units

that operate continuously and to clarify the regulatory language. The use of BAMM for continuously

operated equipment is consistent with amendments made to 40 CFR § 98.3(j)(7) for Subparts X and Y.

API respectfully requests the same application of BAMM for Subpart W.

98.234(f)(8)

(ii) Content of request. Requests must contain the following information:

(A) A list of specific source categories and parameters for which the owner or operator is seeking use of

best available monitoring methods.

(B) For each specific source for which an owner or operator is requesting use of best available

monitoring methods, a description of the unique or unusual circumstances, such as

, but not limited to,Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 15 of 25 data collection methods or requirements that do not meet or are inconsistent with safety regulations or

practices, requirements that are technical ly infeasible infeasibility

, requirements that conflict with

specific laws or regulations, or the need to shut down process equipment or units to install monitoring

equipment that conflict with each specific source for which an owner or operator is requesting use of

best available monitoring methodologies

.

.

(iii) Approval criteria. To obtain approval to use BAMM 2 after June 30, 2012, the owner or operator must

demonstrate to the Administrator’s satisfaction that the owner or operator faces unique or unusual

circumstances such as data collection methods or requirements that do not meet or are inconsistent

with safety regulations or practices

, requirements that are technical ly infeasible infeasibility

, requirements that present legal issues rendering the owner or operator them unable to meet the

requirements of this subpart

, or the need to shut down process equipment or units to install monitoring

equipment

.

Response : Please see section II.C of the preamble for the final rule amendments for a response to this

comment.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0014

‐ 001

Organization: Gas Processors Association (GPA)

Commenter: Jeff Applekamp

Comment Excerpt Text:

GPA members will be directly and immediately affected by the requirements of the final

Subpart W rule and look forward to continuing the on

‐ going efforts with EPA to streamline the

implementation of the Greenhouse Gas Mandatory Reporting Rule (GHGMRR). GPA appreciates

EPA’s attention to the issues raised its the Petition for Reconsideration (filed on February 11, 2011)

including acknowledgment that BAMM provisions did not provide reporting entities with adequate

time to ensure compliance with the final rule. The time period EPA had provided reporting entities to

analyze their existing systems, identify parameters for which BAMM is required, and prepare and

submit BAMM or BAMM extension requests was impractical and unrealistic given the significant

complexities of the rule and the plethora of data parameters that must be assessed and collected for

compliance.

As a result of the Proposed Rule, GPA and its members generally support the revisions to the BAMM

provisions for Subpart W, and concur with the proposed action to automatically extend the applicability

of BAMM for Subpart W sources to December 31, 2011. However, GPA agrees with comments from the

American Petroleum Institute (API) ) and offers the following regulatory language provisions to §

98.234(f)(8):

(ii) Content of request. Requests must contain the following information:

(A) A list of specific source categories and parameters for which the owner or operator is

seeking use of best available monitoring methods.

(B) For each specific source for which an owner or operator is requesting use of best available

monitoring methods, a description of the unique or unusual circumstances warranting the use of

best available monitoring methods, such as

, but not limited to, data collection methods orMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 16 of 25 requirements that do not meet or are inconsistent with safety regulations or practices,

requirements that are technical ly infeasible infeasibility

, requirements that conflict with

specific laws or regulations, or the need to shut down process equipment or units to install

monitoring equipment that conflict with each specific source for which an owner or operator is

requesting use of best available monitoring methodologies

.

(iii) Approval criteria. To obtain approval to use BAMM1 after June 30, 2012, the owner or

operator must demonstrate to the Administrator’s satisfaction that the owner or operator faces

unique or unusual circumstances that make the use of the methods specified in this subpart

unreasonable or impracticable, such as data collection methods or requirements that do not

meet or are inconsistent with safety regulations or practices

, requirements that are technical ly

infeasible infeasibility

, requirements that present legal issues rendering the owner or operator

them unable to meet the requirements of this subpart

, or the need to shut down process

equipment or units to install monitoring equipment

.

Response: For a response to this comment, please see the response to comment EPA

‐ HQ

‐ OAR

‐ 2011

‐

0417

‐ 0012

‐ 002.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0009

‐ 001

Organization: Anadarko Petroleum Corporation (Anadarko)

Commenter: William W. (Bill) Grygar II

Comment Excerpt Text:

Anadarko is committed to meeting all requirements of the GHGRP and is currently involved in

comprehensive compliance implementation activities. Given the tremendous resources and time

required to identify, assess, collect, and assimilate all data elements required under Subpart W,

Anadarko appreciates EPA’s understanding of the challenges industry currently faces to comply with the

GHGRP and its best efforts to efficiently prepare for reporting deadlines.

After reviewing the Proposed Rule, Anadarko generally supports the revisions to the BAMM provisions

for Subpart W, and agrees with the proposed action to automatically extend the applicability of BAMM

for Subpart W emission sources in §98.234(f)(2)

– (f)(5) to December 31, 2011 without EPA approval.

Anadarko agrees, however, with the comment submitted by the American Petroleum Institute (API), the

American Exploration & Production Council (AXPC), and the Gas Processors Association (GPA) regarding

“unique and unusual” circumstances that warrant the need for BAMM post

‐ 2011. Anadarko concurs

that the description “unique and unusual” should be stricken from the regulatory language in order to

mitigate industry concern and provide confidence that should an operator have justifiable reason why

actual data may not be obtained in the timelines set forth by the rule, BAMM may be acquired to

protect it from non

‐ compliance.

Response: For a response to this comment, please see the response to EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0012

‐

002.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 005

Organization: Chesapeake Energy Corporation (Chesapeake) and the American Exploration & Production

Council (AXPC)Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 17 of 25 Commenter: Grover R. Campbell (Chesapeake) and V. Bruck Thompson (AXPC)

Comment Excerpt Text:

EPA clarified in the proposed rule "the circumstances under which BAMM may be requested beyond

2011 are not limited to concerns about safety, technical infeasibility or instances where meeting

monitoring requirements under subpart W would conflict with specific laws or regulations. Other unique

or unusual circumstances may be appropriate for requesting BAMM, if properly demonstrated." 76 Fed.

Reg. 37,304. Chesapeake and AXPC support BAMM availability for a wide variety of circumstances.

BAMM should be available, for example, if a facility complying with the monitoring requirement would

require the company to shut down the facility.

The scope of circumstances in which BAMM will be allowed also must be broad because there are many

flaws in the final rule that still need to be resolved. For example, the definition of "onshore natural gas

processing" (§ 98.230) needs to be revised to eliminate ambiguity between onshore production and

onshore natural gas processing. Without understanding how to classify facilities, reporters do not know

which reporting obligations apply at a facility. Until that issue is resolved, reporters cannot rationally be

obligated to take action at facilities that they may later learn are not subject to a compliance obligation.

Another problematic term in the final rule is "well testing," which is undefined. Without knowing what

flaring and venting emissions are supposed to be reported under "well testing" (§ 98.233( l )) versus

completion emissions (§§ 98.233(g), (h)) or "associated gas venting and flaring emissions not in

conjunction with well testing" (§ 98.233( l )), companies do not know what data to collect and during

what activities those emissions should be measured. Similarly, the term "field" is not sufficiently defined

in the final rule to enable reporters to know where to collect samples that are representative of a field

or how to report data on a field

‐ level because some wells are not in defined fields. It is also problematic

that the final rule does not provide a workable method to determine whether the bleed rate of a

pneumatic device is "high" or "low." Facilities cannot begin counting these devices until a methodology

is provided by EPA to distinguish between high and low bleed

‐ rates.

BAMM must be available for reporting any data elements that use or are associated with these and any

other undefined or unclear terms, because companies will not have set up permanent systems where

compliance obligations are as yet to be defined. Because EPA has acknowledged that certain terms in

the final rule make it impossible for sources to determine the rule’s applicability to the emission sources,

EPA must provide a reasonable alternative method of compliance for sources.

Response: Regarding the use of BAMM for shutdowns, please see the response to EPA

‐ HQ

‐ OAR

‐ 2011

‐

0417

‐ 0012

‐ 002.

In regard to the commenter’s concern about specific rule provisions not related to BAMM, please see

response to comment EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 002.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0014

‐ 003

Organization: Gas Processors Association (GPA)

Commenter: Jeff Applekamp

Comment Excerpt Text:Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 18 of 25 Lastly, GPA is concerned with inconsistency in the language of §§ 98.234(f)(2) and (3) as compared to

the comparable language in §§ 98.234(f)(4) and (5)(iv). The former provisions include a requirement that

BAMM is available for data “that cannot be reasonably obtained according to the monitoring and QA/QC

requirements of this subpart.” Similar language does not appear in the latter two provisions. As we have

discussed with the Agency at length, we believe that BAMM should be available for all source types for

all of calendar 2011 and that the availability of BAMM should not be limited to sources where data

cannot reasonably be obtained using the methods specified in the rule. The process of applying the

“cannot reasonably be obtained” criteria would be difficult and time consuming and could cause

affected sources to use BAMM for certain source types in 2011 while applying the specified methods to

other sources. Imposing such a burden defeats the purpose of extending BAMM through 2011. As a

result, we recommend that the phrase “that cannot reasonably be measured according to the

monitoring and QA/QC requirements of this subpart” should be deleted from §§ 98.234(f)(2) and (3).

Response: EPA thanks the commenter for pointing out the inconsistency. EPA’s intention for all subpart

W emission sources is to allow BAMM through 2011 only in cases when data could not be reasonably

obtained. For 2011, all subpart W emission source data that can be reasonably obtained should be

measured following the provisions as delineated in the rule.

EPA has clarified 40 CFR 98.234(f)(4) and 98.234(f)(5)(iv) accordingly. Please see section II.B of the final

rule amendments for more information on the final provisions related to this comment.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0009

‐ 002

Organization: Anadarko Petroleum Corporation (Anadarko)

Commenter: William W. (Bill) Grygar II

Comment Excerpt Text:

Furthermore, Anadarko also agrees with GPA’s comment regarding inconsistency in the regulatory

language of § 98.234(f)(2)

‐ (3) compared to§ 98.234(f)(4) and §98.234(f)( (5)(iv), specifically that the

former provisions include a requirement that BAMM is available for data “that cannot be reasonably

obtained.” We concur with GPA that this language defeats the purpose of extending BAMM to all

emission sources through 2011 and it should be deleted from the regulatory text to mitigate further

burden associated with assessing and applying BAMM.

Response: For a response to this comment, please see the response to EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0014

‐

003.

Topic 6: Use of BAMM for Special Circumstances

Comment Number : EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0012

‐ 003

Organization : American Petroleum Institute

Commenter : Karin RitterMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 19 of 25 Comment Excerpt Text :

Owners or operators of onshore petroleum and natural gas production frequently acquire and divest

equipment and operations. Integrating these new assets into the mandatory GHG reporting program,

particularly for those which did not previously meet the reporting threshold, will require time. API

requests specific language regarding the use of BAMM for these circumstances, rather than the vague

application of “unique or unusual circumstances.” In addition, due to the frequency of acquisitions that

can occur throughout a calendar year, API requests the ability to “accumulate” all acquired assets for a

given year and then be allowed to apply BAMM up to 6

‐ months past the current year end. This will

prevent the owner or operator from tracking numerous purchase dates and varying BAMM cycles that

would result.

The following language is proposed to provide more certainty with respect to the use of BAMM for

acquired equipment or operations:

"For onshore petroleum and natural gas production, assets acquired by an affected entity in any

calendar year shall be allowed to use best available monitoring methods until the end of the calendar

year end in which they were acquired without applying for best available monitoring methods. Such

assets may continue to use best available monitoring methods for up to six months of the calendar year

following acquisition. The owner or operator may request to use best available monitoring methods for

an additional six months, as needed, in accordance with the provisions of 98.234(f)(8)(ii) and (iii)."

Response: Please see section II.C of the preamble for the final rule amendments for a response to this

comment.

Topic 7: Other Comments Reviewed

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 001

Organization: Chesapeake Energy Corporation (Chesapeake) and the American Exploration & Production

Council (AXPC)

Commenter: Grover R. Campbell (Chesapeake) and V. Bruck Thompson (AXPC)

Comment Excerpt Text:

The final Subpart W rule is severely flawed in several important respects. In its final form, the Subpart W

Rule contains elements that prevent reporters from being able to discern what is a reportable emission

and how to measure it. Being unable to fulfill the requirements stated in the final rule may result in a

source being out of compliance with mandatory federal requirements. Failure to comply with federal

law is of such serious consequence that covered entities do not risk noncompliance. Therefore, on

January 31, 2011, Chesapeake and AXPC filed a petition for reconsideration with EPA and a petition for

judicial review in the D.C. Circuit (case no. 11

‐ 1025) in order to obtain the necessary clarifications toMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 20 of 25 comply with Subpart W. Several other parties also filed petitions for reconsideration and petitions for

review.

On April 25, 2011, EPA granted reconsideration on the issue of the time period during which owners and

operators of certain sources could automatically use BAMM without obtaining approval from the

Administrator. 76 Fed. Reg. 22,825 (Apr. 25, 2011).

The Subpart W Rule imposes significant new legal obligations on covered sources to measure, monitor

and report emissions of GHGs. As EPA's description of the source category suggests

– "equipment leaks

and vented GHG emissions"

– the overall source category is made up of hundreds of thousands of

sources throughout the oil and gas sector. Failure to discern and properly measure what is a reportable

emission as specified in the final rule may result in a source being out of compliance with mandatory

federal requirements. Failure to comply with federal law is of such serious consequence that covered

entities do not risk noncompliance. However, in its final form, the Subpart W Rule contains elements

that will force covered sources to do precisely that.

EPA recognized in finalizing the rule, that “for certain industry segments, some reporters would need

additional time to comply with the monitoring and QA/QC requirements.

. .” 75 Fed. Reg. 74458, 74471

(November 30, 2010). The final rule provides the use of best available monitoring methods (BAMM) as a

means for sources to comply with the rule as they develop the necessary internal processes and

technology to adapt their operations to the new regulatory obligations. In addition to the need for

BAMM as a means to comply under ordinary circumstances, the final rule included many definitions and

unclear provisions that made it impossible to determine whether and how the rule applies to some

sources. EPA is in the process of addressing key definitional and applicability issues, which have been

raised in petitions for reconsideration and review. Until EPA publishes final clarifications and/or

revisions of key terms and requirements, BAMM is absolutely critical for sources to comply with the

rule. Even after EPA publishes final clarifications, sources will still need a period of transition in order to

apply the new

‐ final rule to their operations, assess the means of compliance, and develop systems to

monitor, gather data and report that data.

As discussed further below, Chesapeake and AXPC support most aspects of the proposed rule extending

BAMM. However, as EPA acknowledged in the preamble to this proposed rule, the petitions for

reconsideration raised additional concerns that are not addressed by this proposal. 76 Fed. Reg. 37,304.

Chesapeake and AXPC's comments on this proposed rule are not intended to provide a release of any

other claims raised in their petition for reconsideration or pending judicial challenge to the final Subpart

W rule.

Reporters Need BAMM to be Extended to Provide Compliance Coverage Due to the Ongoing

Reconsideration Process.

EPA has noted that it believes that extending the automatic BAMM time period to December 31, 2011 is

appropriate "to provide sufficient time for companies to collect, prepare and submit data to EPA during

the initial year of reporting." 76 Fed. Reg. 37,304. Chesapeake and AXPC agree that facilities will need

time to develop data collection systems and monitoring plans, conduct training, and ensure accuracy

before they can comply with the rule. Data collection tools will need to be created and data collection

processes must be established to gather data.

Much of the data that must be reported under the rule is not currently gathered and the sheer

abundance of data required prevents it from feasibly being managed manually. EPA's Petroleum andMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 21 of 25 Natural Gas Systems Monitoring Checklist for Onshore Petroleum and Natural Gas Production (Nov.

2010) lists 294 data elements that must be collected. For example, various data must be monitored and

recorded for gas well venting during well completions with hydraulic fracturing. Companies have never

before collected this data to determine emissions associated with well completions. Computer codes

must be written to direct the systems to record certain data at the specified times (e.g., when venting

emissions). The code must be tested for accuracy. Recordkeeping tools

– at the bare minimum,

electronic spreadsheets or paper forms, or alternatively more sophisticated electronic tools

– will need

to be developed. Workers in the field will need to be trained to ensure they comply with new protocols

delineating their new data collection responsibilities. These data gathering and monitoring obligations

constitute a fundamental change to field operations and companies will need significant time to ensure

that personnel understand what data to collect, at what frequency, the importance of accuracy, and

how to record these activities.

Example of Difficulty Developing New Compliance Systems

It can be difficult to develop processes for monitoring data or activities that have never before been

subject to federal or state mandated reporting. For example, Subpart W requires reporting emissions

from dump valves associated with onshore production storage tanks. The final rule requires knowing

how long a dump valve has been stuck open. It is not industry practice to require field technicians to

maintain checklists indicating whether every dump valve at every site was operating properly. Rather, as

operational problems arise, corrections are made in the field as a matter of routine business practices.

The present text imposes a very large manual recordkeeping obligation for industry. One AXPC company

has determined that it has over 6,700 separators. Another company has approximately 8,000

separators. Each separator has one or two dump valves. Given the thousands of valves that a company

may be responsible for monitoring, to comply with the requirement for the onshore production sector

to record the status of dump valves, companies will need time to develop a recordkeeping system to

track dump valves. Attempting to implement such a system will prove to be difficult. Forms will need to

be developed and all field technicians will need to be trained to comply with the new expectation of

regularly recording whether a dump valve was operating properly during each site visit and whenever a

dump valve is repaired after having been found stuck open.

One AXPC member has reviewed data for several of its fields and estimates that dump valves get stuck

open approximately 1% of the time in a given year. Despite the infrequency of its dump valves getting

stuck open, this operator would still need to develop a system to manage tens of thousands of forms

documenting that dump valves are operating properly 99% of the time. A system would need to be

developed to retain tens of thousands of forms, which would be filled out at varying frequencies

‐‐ every

few days for wells that are visited regularly and up to every few weeks for others. All of these forms

would need to be reviewed on a regular basis (at least weekly or monthly) by the appropriate personnel

to:

 assess whether any valves had been stuck open,

 if so, review operational records/maintenance records/production data preceding

the discovery of the stuck valve,

 calculate the emissions associated with the stuck valve, and

 document the emissions in a format that will facilitate annual reporting.Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 22 of 25 Gathering and timely reporting of accurate data will need to be handled by an automated or electronic

recordkeeping process that will minimize the extensive manual effort to monitor and retain records to

report the minor emissions from stuck dump valves.

Contractual Relationships with Third

‐ Party Service Providers Increases the Need for Sufficient

BAMM Availability

The complexities of complying without clear regulatory requirements are even greater when compliance

also involves third

‐ party service providers on contract to the regulated entity. For activities performed

by third

‐ party service providers, contracts must be re

‐ written to bind the third

‐ party service providers to

perform these new responsibilities. These new contracts will need to be reviewed by the service

provider's legal department, which could lead to renegotiation of the terms of the service contract and

will require the resolution of any additional legal issues. The revised contract can only be executed and

the new responsibilities implemented in the field after all of these steps have been taken.

The BAMM extension should be long enough to accommodate a period to assess whether BAMM is

needed, in addition to what measures will need to be undertaken.

Chesapeake and AXPC agree with EPA's statement that it may be impossible to determine "in advance

the exact nature of the BAMM that would be needed" at each well

‐ site. 76 Fed. Reg. 37,303. As noted

above, EPA requires the collection of 294 distinct data elements. Some onshore production companies

own over 20,000 wells, and thereby potentially obligated to record and manage over 6 million data

elements. Equipment varies from well to well. Companies will need to invest a significant amount of

time and resources to inventory the equipment and monitoring devices present at each well and

determine where modifications or additional equipment may be necessary to comply with Subpart W.

As further discussed in Section 5 below, there is significant ambiguity in the existing Subpart W rule.

Until EPA clearly defines the now

‐ ambiguous terms in Subpart W provisions, companies cannot

determine what data needs to be collected, at which facilities that data must be collected and how to

collect that data. It is not rational for regulated sources to spend millions of dollars to purchase new

equipment, install that equipment, develop new data collection systems, and train personnel to comply

with reporting and measurement obligations that have not been fully defined by EPA. This risks mis

‐ applications of resources, should it turn out that the equipment is not needed to comply. While industry

has been moving forward to achieve compliance with the portions of the rule that are clear, progress

cannot be made on obligations that are not clear until the issues raised in the petitions for

reconsideration are resolved through a final rulemaking that revises Subpart W.

Companies Will Be Responsible for Reporting an Unprecedented Amount of Data

Data must be recorded electronically given the amount of data being collected. As noted above, EPA

indicates 294 data elements may need to be collected at each onshore production facility. Reporters will

need to assess whether all 294 data elements apply at each facility. A reporter that has, for example,

24,000 wells will be responsible for accurately reporting millions of data elements to EPA. Manual entry

of millions of data elements into EPA's electronic data reporting tool (e

‐ GGRT), a spreadsheet or

database would introduce an unnecessary element of human error into the reporting process and would

be unmanageable with respect to the amount of time necessary to upload the data. Allowing reporters

sufficient time to create electronic data collection systems is not a luxury for the reporter's convenience,

but a necessity to ensure timely submission of accurate reports.Mandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 23 of 25 Response: EPA thanks the commenter for their submission. For a response to this comment please see

response to comment EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 002.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 003

Organization: Chesapeake Energy Corporation (Chesapeake) and the American Exploration & Production

Council (AXPC)

Commenter: Grover R. Campbell (Chesapeake) and V. Bruck Thompson (AXPC)

Comment Excerpt Text:

This BAMM Extension is Appropriate Because Reporters Were Unable to Comment on the Duration of

BAMM.

As EPA acknowledges, BAMM provisions were not included in the proposed Subpart W rule, but were

included in the final rule only. 76 Fed. Reg. 37,303. Therefore, reporters did not have the opportunity to

comment on the BAMM timelines and whether those timelines were feasible. Id. If reporters had been

provided the opportunity to comment on the BAMM timelines, Chesapeake and AXPC would have

submitted information during the comment period to substantiate the need for a longer duration to use

BAMM in order to develop processes to gather data, record data, purchase and install new equipment,

and train personnel.

Response: On April 25, 2011, EPA granted reconsideration on the issue of the time period during which

owners or operators of certain sources could automatically use BAMM without obtaining approval from

the Administrator, 76 Fed. Reg. 22,825 (Apr. 25, 2011) and is now taking final action on that issue.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 006

Organization: Chesapeake Energy Corporation (Chesapeake) and the American Exploration & Production

Council (AXPC)

Commenter: Grover R. Campbell (Chesapeake) and V. Bruck Thompson (AXPC)

Comment Excerpt Text:

Suggested Revisions to 40 C.F.R. § 98.234(f)(8)(iii) (Requests for Extension of the Use of BAMM

Beyond 2011, Approval Criteria).

EPA has proposed modifying 40 C.F.R. § 98.234(f)(i)(iii) to state the following:

Approval criteria. To obtain approval to use BAMM after June 30, 2012, the

owner or operator must demonstrate to the Administrator’s satisfaction that the

owner or operator faces unique or unusual circumstances such as data collection

methods that do not meet safety regulations, technical infeasibility, or legal issues

rendering them unable to meet the requirements of this subpart.

Chesapeake and AXPC believe that the inclusion of the phrase "after June 30, 2012" was intended to

clarify that the approval criteria do not apply to situations where BAMM would be granted

automatically. To make this point even clearer, we suggest that EPA modify this part of the rule as

follows:

Approval criteria. To obtain approval to use BAMM other than BAMM that isMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 24 of 25 allowed automatically through after June 30, 2012, the owner or operator must

demonstrate to the Administrator’s satisfaction that the owner or operator faces

unique or unusual circumstances such as data collection methods that do not meet

safety regulations, technical infeasibility, or legal issues rendering them unable to

meet the requirements of this subpart.

Making this revision would clarify that a party that mistakenly did not submit an NOI by the December

31, 2011 deadline but that submits a BAMM request prior to the March 30, 2012 deadline would not be

subject to the approval criteria in 40 C.F.R. § 98.234(f)(8)(iii) although the NOI deadline was not met.

EPA should provide further clarity in the rule and preamble to address this unintentional but foreseeable

circumstance.

Response: EPA disagrees that the suggested language is necessary for inclusion in the final rule 40 C.F.R.

§ 98.234(f)(8)(iii). All BAMM requests that must be approved by EPA, including BAMM requests for the

period through June 30, 2012, must be completed in accordance with the “content of request” and the

“approval criteria” sections of the final rule, 40 C.F.R. § 98.234(f)(8)(ii) and (iii), and must demonstrate to

the Administrator’s satisfaction that the owner or operator faces unique or unusual circumstances such

as data collection methods that do not meet safety regulations, technical infeasibility, or legal issues

rendering them unable to meet the requirements of this subpart.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0011

‐ 007

Organization: Chesapeake Energy Corporation (Chesapeake) and the American Exploration & Production

Council (AXPC)

Commenter: Grover R. Campbell (Chesapeake) and V. Bruck Thompson (AXPC)

Comment Excerpt Text:

EPA stated in the preamble to the proposed BAMM extension rule that 40 C.F.R. § 98.234(f)(8)

is intended to be used by companies that have known issues that require BAMM. 76 Fed. Reg.

37,304. It is not intended to be used for "protective filings" for hypothetical situations in the

event that the company needs BAMM in the future. Id.

Chesapeake and AXPC agree that 40 C.F.R. § 98.234(f)(8) should not be used by companies for

facilities for which they think they need BAMM at a future date after the deadlines in Subpart W have

passed. Petitions for BAMM filed beyond the deadlines can be reviewed by EPA under 40 C.F.R. §

98.234(f)(1). However, such petitions should be reviewed to determine whether there is "good cause"

for requesting BAMM rather than requiring a demonstration of "extreme or unusual circumstances."

The complexity of the rule and the breadth of its application justify

broader discretion in allowing BAMM than this text would appear to provide. This is especially

true because it is unclear what EPA would classify "extreme or unusual circumstances."

BAMM should be available for companies, for example, that do not currently exceed the 25,000

tpy reporting threshold in a basin, but that because of the acquisition of additional assets in that basin

will be required to report for the first time under Subpart W after 2012. Under this type of scenario,

BAMM will be necessary so that the company can develop data collection systems and monitoring plans,

conduct training, and ensure accuracy before they are required to comply with the specific monitoring

methods provided in rule. Other circumstances are imaginable which may not appear to be “extreme orMandatory Reporting of Greenhouse Gases

‐ Petroleum and Natural Gas Systems, Revisions to Best

Available Monitoring Method Provisions: EPA’s Response to Public Comments

Page 25 of 25 unusual,” but which nevertheless may present an insurmountable compliance barrier for companies

grappling with these far

‐ reaching obligations.

Response: For a response to the commenters argument about changing the language from “extreme or

unusual” to instead reference “good cause” please see section II.C of the preamble for the final rule

amendments for a response to this comment.

In response to the commenter’s argument that new companies that exceed the 25,000 tpy reporting

threshold in a basin will need BAMM, please see section II.C of the preamble for the final rule

amendments.

In this action, EPA has revised 40 CFR 98.234(f)(1) by stating that owners and operators who submit a

BAMM request after the deadlines finalized in this action must demonstrate unique or unusual

circumstances unforeseen at the time of the associated BAMM deadline specified in the rule. In this

provision, EPA clarified that this provision is to be used for “unforeseen” circumstances to clarify that

the review and approval of late BAMM request submissions is for cases of unforeseen circumstances,

such as a natural disaster or fire, or some other circumstance not only beyond a reporter’s control, but

also unforeseen by the reporter, such that the reporter did not have the time to submit either an NOI or

BAMM extension request by the submission deadline.

Comment Number: EPA

‐ HQ

‐ OAR

‐ 2011

‐ 0417

‐ 0015

‐ 001

Organization: United States Department of the Interior

Commenter: Willie R. Taylor

Comment Excerpt Text:

The U.S. Department of the Interior has reviewed the U.S. Environmental Protection Agency's (EPA)

Proposed Rulemaking for Mandatory Reporting of Greenhouse Gases: Petroleum and Natural Gas

Systems: Revisions to Best Available Monitoring Method Provisions. We offer the following comment

developed by our Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).

EPA's Greenhouse Gas Reporting Rule Subpart W allows operators offshore to report using Gulfwide

Offshore Activities Data System (GOADS). We request that under the heading of "I. General Information

A. Does this information apply to me?", add the following sentence. "While this rule does not apply

offshore, offshore operations should continue to report on OCS facilities using GOADS."

Response: EPA disagrees that this final rule does not apply to facilities reporting under the offshore

petroleum and natural gas production industry segment. Offshore production facilities who report

under subpart W may apply for BAMM under 40 CFR 98.234(f)(5)(iv) if needed. However, EPA has

clarified in the preamble at the commenters’ suggestion that any obligation to report under 30 CFR

250.302 through 304 as applicable by owners or operators of facilities reporting under the offshore

petroleum and natural gas production industry segment of subpart W is not affected should they

choose to use BAMM.