Page 1 of 36 6560.50 ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 98 [EPA-HQ-OAR- 2011 - 0417; FRL - XXXX-X]

RIN 2060 -AP99 Mandatory Reporting of Greenhouse Gases: Petroleum and Natural Gas Systems: Revisions to Best Available Monitoring Method Provisions AGENCY : Environme ntal Protection Agency (EPA). ACTION : Proposed Rule. SUMMARY : EPA is proposing to amend certain provisions related to best available monitoring methods in regulations for Petroleum and Natural Gas Systems of the Greenhouse Gas Reporting Rule. Specifica lly, EPA is proposing to extend the time period during which owners and operators of covered facilities would be permitted to use best available monitoring methods during 2011 without submitting a request to the Administrator for approval. In addition, EPA is proposing to expand the list of types of emissions sources for which owners and operators would not be required to submit a request to the Administrator to use best available monitoring methods for 2011 and extend the deadline by which owners and oper ators of covered facilities would request use of best available monitoring methods for beyondPage 2 of 36

2011. These proposed amendments are in response to a request for reconsideration of specific provisions. DATES: Comments . Comments must be received on or befor e [ INSERT THE DATE, 30 DAYS AFTER PUBLICATION OF THIS PROPOSED RULE IN THE FEDERAL REGISTER ], unless a public hearing is held, in which case comments must be received on or before [ INSERT THE DATE 45 DAYS AFTER PUBLICATION OF THIS PROPOSED RULE IN THE FEDE RAL REGISTER ]. Public Hearing. A public hearing will be held if requested. To request a hearing, please contact the person listed in the following FOR FURTHER INFORMATION CONTACT section by [ INSERT DATE 7 DAYS AFTER DATE OF PUBLICATION OF THIS PROPOSED RULE IN THE FEDERAL REGISTER ]. If requested, the hearing will be conducted on [ INSERT DATE 15 DAYS AFTER DATE OF PUBLICATION OF THIS PROPOSED RULE IN THE FEDERAL REGISTER ], in the Washington, DC area. EPA will provide further information about the heari ng on its webpage if a hearing is requested. ADDRESS : You may submit your comments, identified by docket ID No. EPA

- HQ
- OAR
- 2011

- 0417 by any of the following methods:

 Federal eRulemaking Portal: http://www.regulations.gov . Follow the online instructions f or submitting comments. E -mail: GHG_Reporting_Rule_Oil_And_Natural_Gas@epa.gov .Page 3 of 36 Include Docket ID No. EPA- HQ
- OAR
- 2011

- 0417 in the subject line of the message.

 Fax: (202) 566

– 9744.

 Mail: Environmental Protection Agency, EPA Docket Center (EPA/DC), Mailcode 28221T, Attention Docket ID No. EPA- HQ
- OAR

– 2011

- 0147, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.

 Hand/Courier Delivery : EPA Docket Center, Public Reading Room, EPA West Building, Room 3334, Attention Docket ID No. EPA

- HQ
- OAR

– 2011

- 0147, 1301 Constitution Avenue, NW., Washington, DC 20004. Such deliveries are only accepted during the docket’s normal hours of operation, and special arrangements should be made for deliveries of boxed information. Instructions: Direct your comments to Docket ID No. EPA- HQ
- OAR
- 2011

- 0417 , Mandatory Reporting of Greenhouse Gases: Petroleum and Natural Gas Systems. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov , including any personal information provided, unless the comment includes information claimed to be confidential business info rmation (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or e -mail. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e

-mail comment directly toPage 4 of 36

EPA without going through http://www.regulations.gov your

e -mail address wi ll be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the bo dy of your comment and with any disk or CD

- ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of spec ial characters, any form of encryption, and be free of any defects or viruses. Docket: All documents in the docket are listed in the http://www.regulations.gov index . Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available for viewing at the EPA Docket Center . Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the EPA Docket Center , EPA/DC, EPA West Building, Room 3334, 1301 Constitution Ave., NW., Washington, DC. This Docket Facility is open from 8:30 a.m. to 4:30 p.m., MondayPage 5 of 36

through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566

- 1744, and the telephone number for the Air Docket is (202) 566

- 1742. FOR FURTHER INFORMATION CONTACT: Carole Cook, Climate Change Division, Office of Atmospheric Programs (MC

- 6207J), Envir onmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (202) 343

- 9263; fax number: (202) 343

- 2342; e

-mail address: GHGReportingRule@epa.gov . Worldwide Web (WWW). In addition to being available in the docket, an el ectronic copy of today ' s proposal will also be available through the WWW. Following the Administrator's signature, a copy of this action will be posted on EPA's greenhouse gas reporting rule Web site at http://www.epa.gov/climatechange/emissions/ghgrulemaking.ht ml . Additional information on Submitting Comments. To expedite review of your comments by Agency staff, you are encouraged to send a separate copy of your comments, in addi tion to the copy you submit to the official docket, to Carole Cook, U.S. EPA, Office of Atmospheric Programs, Climate Change Division, Mail Code 6207

- J, Washington, DC 20460, telephone (202) 343

- 9263, e

-mail address: GHGReportingRule@epa.gov .Page 6 of 36

SUPPLEMENTARY INFORMATION: Organization of this document. The information presented in this preamble is organized as follows: I. General Information A. Does this Action apply to me? B. Acronyms and Abbreviations II. Background III. Proposed Amendments to 40 CFR part 98 IV. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental He alth Risks and Safety Risks H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low

Income Populations I. General Information A. Does this Action apply to me? These are proposed amendments to optional methods under an existing regulation. If finalized, these amended regulations could affect owners or operators of petroleumPage 7 of 36

and natural gas systems. Regulated categories and entities include those listed in Table 1 of this preamble: Table 1. Examples of Affected Entities by Category Source Category NAICS Examples of affected facilities

Petroleum and Natural Gas Systems 486210 Pipeline transportation of natural gas. 221210 Natural gas distribution

facilities. 211 Extractors of crude petroleum

and natural gas. 211112 Natural gas liquid extraction

facilities. Table 1 of this preamble is not intended to be exhaustive, but rather provides a guide for readers regarding facilities likely to be affected by this action. Although Table 1 of this preamble lists the types of facilitie s of which EPA is aware that could be potentially affected by this action, other types of facilities not listed in the table could also be affected. To determine whether you are affected by this action, you should carefully examine the applicability crite ria found in 40 CFR part 98, subpart W or the relevant criteria in the sections related to petroleum and natural gas systems. If you have questions regarding the applicability of this action to a particular facility, consult the person listed in the prece ding FOR FURTHER INFORMATION CONTACT section. B. Acronyms and AbbreviationsPage 8 of 36 The following acronyms and abbreviations are used in this document.

API American Petroleum Institute AXPC American Exploration & Production Council BAMM best available monitori ng methods CAA Clean Air Act CBI confidential business information CEC Chesapeake Energy Corporation CFR Code of Federal Regulations EO Executive Order EPA U.S. Environmental Protection Agency FR Federal Register GHG greenhouse gas IBR incorporation by ref erence ICR information collection request ISO International Organization for Standardization MRR mandatory GHG reporting rule OMB Office of Management and Budget RFA Regulatory Flexibility Act RIA Regulatory Impact Analysis SBA Small Business Administratio n SBREFA Small Business Regulatory Enforcement and

Fairness Act U.S. United States UMRA Unfunded Mandates Reform Act of 1995 USC United States Code II. Background The EPA published Subpart W: Petroleum and Natural Gas Systems of the Greenhouse Gas Repor ting Rule on November 30, 2010, 40 CFR Part 98, s ubpart W (75 FR 74458)( s ubpart W). Included in the final rule were new provisions thatPage 9 of 36

were added in response to comments on the proposal allowing owners or operators the option of using best available moni toring methods(BAMM) for specified parameters in 40 CFR 98.233. As stated in the preamble to the 2009 final rule (74 FR 56260), CAA section 114 provides EPA broad authority to require the information required to be gathered under subpart W. As discussed in the preamble to the initial proposed rule ( 74 FR 16448, April 10, 2009) , CAA section 114(a)(1) authorizes the Administrator to require emissions sources, persons subject to the CAA, manufacturers of control or process equipment, or persons whom the Admi nistrator believes may have necessary information to monitor and report emissions and provide such other information the Administrator requests for the purposes of carrying out any provision of the CAA. For further information about EPA’s legal authority, see the preamble to the April 2009 (74 FR 16448) proposal and October 2010 (74 FR 56260) final rules for the Mandatory Reporting of Greenhouse Gases. Following the publication of subpart W in the Federal Register, several industry groups requested reconsi deration of several provisions in the final rule, including the provisions for BAMM. In a follow up action, EPA grantedPage 10 of 36

reconsideration and extended specific BAMM deadlines in a rule that was promulgated on April 25, 2011 (76 FR 22825). In further respons e to that request for reconsideration of specific BAMM provisions, EPA is seeking comment on several proposed amendments to the BAMM provisions in this proposal, including extension of the time period during which owners and operators of covered facilities with emissions sources listed in 40 CFR 98.234(f)(2), (f)(3), (f)(4), and (f)(5)(iv) would be permitted to use BAMM during calendar year 2011 without having to request approval from the Administrator . Additionally, EPA is seeking comment on the proposed amendment to the BAMM provisions beyond 2011 outlined in this proposal which includes an initial submission of a notice of intent to request use of BAMM beyond 2011 followed by a submission of a BAMM request consistent with 40 CFR 98.234(f)(8)(ii) to the Administrator for approval to use BAMM beyond 2011. III . Proposed Amendments to 40 CFR part 98 Subpart W of the GHG reporting rule includes provisions allowing owners and operators of covered facilities to use BAMM in lieu of specified data input requir ements for determining greenhouse gas emissions in certain circumstances for specified emissions sources.Page 11 of 36

Methods that constitute BAMM are: supplier data; monitoring methods currently used by the facility that do not meet the specifications of a relevant subpart; engineering calculations; and/or other company records. When using BAMM, the owner or operator must use the equations and calculation methods set forth in 40 CFR 98.233, but may use BAMM to estimate the parameters in the equations as specified in the rule. EPA carefully evaluated each emissions source outlined in subpart W, and the required calculation methodologies for determining greenhouse gas emissions from that emissions source. Based on this evaluation, EPA has identified the specific emi ssion sources for which the use of BAMM would be appropriate. Those emission sources are categorized into the following four groups. Well

- related emissions . This group of emissions sources includes those well

- related data that cannot reasonably be measu red according to the monitoring and QA/QC requirements of subpart W such as well testing, venting, and flaring, for example. Specified activity data . This group includes those activity data that cannot reasonably be obtained according to the monitoring and QA/QC requirements specified inPage 12 of 36

subpart W such as cumulative hours of venting, days, or times of operation, for example. Leak Detection and Measurement . This group includes those sources of emissions that require leak detection and/or measurement such as the measurement of equipment leaks from valves and connectors. Unique or Unusual Circumstances . These circumstances include emission sources not covered under the previous three categories for which the owner or operator of a covered facility is fac ing unique or unusual circumstances, such as data collection methods that do not meet safety regulations, technical infeasibility such as a compressor never having maintenance during the calendar year rendering the installation of a port or meter difficult , or legal issues rendering them unable to meet the requirements of subpart W. EPA is proposing the following amendments to subpart W:

 Best available monitoring methods for well

- related emissions. EPA is proposing to extend the time period for use of BAMM without EPA approval, by three months, such that owners and operators of facilities with emissions sources listed in 40 CFR 98.234(f)(2) would not be required to request approval by the Administrator to use BAMM between January 1, 2011 and December 31 , 2011.

 Best available monitoring methods for specified activity data . EPA is proposing to extend the timePage 13 of 36 period for use of BAMM without EPA approval, by three months, such that owners and operators of facilities with emissions sources listed in 40 CFR 98.234(f)(3) would not be required to request approval by the Administrator to use BAMM between January 1, 2011 and December 31, 2011.

 Best available monitoring methods for leak detection and measurement . EPA is proposing to allow owners and operators of facilities with emissions sources listed in 40 CFR 98.234(f)(4) to use BAMM between January 1, 2011 and December 31, 2011 without having to request approval from the Administrator.

 Best available monitoring methods for unique or unusual circumstances . EPA is proposing to allow owners and operators of facilities with emissions sources listed in 40 CFR 98.234(f)(5)(iv) to use BAMM between January 1, 2011 and December 31, 2011 without having to request approval from the Administrator.

 Best available monit oring methods for use beyond December 31, 2011 . EPA is proposing to revise the introductory sentence in 40 CFR 98.234(f)(8) by removing reference to extreme circumstances. In addition, EPA is proposing to amend 40 CFR 98.234(f)(8)(i) such that owners and operators of facilities with emissions sources listed in 40 CFR 98.234(f)(8) may submit a notice of intent to submit a request for BAMM beyond 2011 to EPA by December 31, 2011. Facilities that submit a BAMM request consistent with 40 CFR 98.234(f)(8)(ii ) by March 30, 2012 who have also submitted a notice of intent by December 31, 2011 would automatically be granted BAMM through June 30, 2012. Facilities which submit such a notice of intent but do not follow up with a BAMM request by March 30, 2012 would not be allowed to use BAMM after December 31, 2011. Following promulgation of subpart W on November 30, 2010, industry groups sought reconsideration of several provisions in the final rule, including the provisions allowing owners and operators of facili ties with emissionsPage 14 of 36

sources listed in 40 CFR 98.234(f)(2), (f)(3),(f)(4), and (f)(5)(iv) to use BAMM. By letter dated January 31, 2011, Chesapeake Energy Corporation (CEC) and the American Exploration & Production Council (AXPC) stated that “BAMM should be allowed without EPA approval for entities reporting under subpart W for the entire first reporting year 2011 and for all data necessary to conduct the calculation s required under the rule.” Also, by letter dated January 31, 2011, the American Petroleum Institute (API) stated that “[u]pon reconsideration, API requests that EPA provide pre

- approval for (1) leak detection and measurement...” and also “[u]pon reconsideration, API requests that EPA allow BAMM to be used for the onshore production sector and a ctivity data categories through December 31, 2011.” EPA met with several trade associations and companies that own or operate facilities subject to subpart W . During those meetings, several companies requested an extension of the BAMM provisions in or der to complete initial equipment inventories and to secure internal resources to report data to EPA in accordance with the rule requirements. In particular, companies stated that a large number of data points that are necessary to determine greenhouse ga s emissions using the calculationPage 15 of 36

methodologies outlined in subpart W are not currently tracked by internal company data systems and may not be managed by the company in such a way that would enable those data to be readily reported to EPA in a timely

mann er. By letter dated May 3, 2011 API submitted information to EPA regarding the number of sources for which information must be collected. The letter states that “[g]iven the extraordinary scope of Subpart W

– both the hundreds of thousands of discrete s ites and sources whose emissions must be quantified and reported and their broad geographic dispersion

– compliance with the monitoring and reporting deadlines and the deadlines to apply for approval to extend the use of BAMM are not only unrealistic but i nfeasible.” The letter further states that “[t]he Onshore Petroleum and Natural Gas Production segment of the Petroleum and Natural Gas Systems source category (Onshore Production) alone covers hundreds of thousands [emphasis in original] of well sites al ong with tens of thousands of sites “associated with a well pad” (which is not defined or discussed in the rule). These sites are widely dispersed across hundreds of thousands of square miles in all of the oil and gas producing basins across the United St ates. The seven additional industry segments subject to subpart WPage 16 of 36

extend this coverage to tens of thousands of additional offshore platforms, onshore sites and facilities, and natural gas distribution sites. Within each of these industry segments, subpar t W mandates that reporters monitor and determine emissions from multiple source types; for example, the Onshore Production portion of the rule covers 22 distinct source types. Each of these source types requires the collection of a broad variety of information, data points, analyses, models, and/or measurements to determine emissions and submit emission reports.” The letter also states that “[t]he problems created by the large number of facilities that are subject to the rule are exacerbated by their wide geographic distribution. Unlike a chemical plant or a refinery, oil and natural gas operations are spread out over huge geographic areas and are typically not staffed at all times. Often there is no electricity, difficult access, and little existing inf rastructure or communications ability at these disparate locations. Given this geographic dispersion of oil and natural gas facilities, installation of any additional equipment, monitors, and/or data acquisition and transmitting systems will be very chall enging. Even traveling to each of these sites requires significant timePage 17 of 36

and effort. When this is combined with the specific monitoring methods demanded by the rule, reporters cannot realistically meet the rule’s BAMM extension application deadlines or have the full suite of required monitoring and recordkeeping systems in place by September 30.” For example, c ompanies that own or operate facilities subject to subpart W, such as API members , and as discussed in API’s May 3, 2011 correspondence, the data collection systems that would be necessary to collect and process the numerous inputs required for subpart W are very complex. Because of the extensive, inter

- related, complex nature of these data collection systems, many companies described the need for automatic BAMM for emissions sources that fall under 40 CFR 98.234(f)(5)(iv). For some sources, it would be nearly impossible to gauge in advance the exact nature of the BAMM that would be needed; for example, if one specific tank pressure measurement was not available and an alternate method was required to be used, a company or facility may not have had advance knowledge of that need and may not have prepared a specific BAMM request for that alternate measurement by the BAMM application deadline. Becau se EPA did not include specific BAMM provisions in the proposed rule for subpart W (75 FR 18609), companies did not have the opportunity to comment on BAMM timelinesPage 18 of 36

and how those timelines would affect their facilities. Therefore, after evaluating the in formation provided, EPA has concluded that it is appropriate to propose extending the time period, to December 31, 2011, that owners and operators of covered facilities would be allowed to use BAMM without having to submit a request for approval from the Administrator. EPA believes these proposed amendments to the BAMM provisions are appropriate in order to provide sufficient time for companies to collect, prepare and submit data to EPA during the initial year of reporting. In this action, EPA is proposin g to amend 40 CFR part 98 subpart W to allow facilities with the emissions sources listed in 40 CFR 98.234(f)(2), (f)(3), (f)(4), and (f)(5)(iv) to automatically use BAMM, without EPA approval, for the entire 2011 reporting year. We are also proposing to amend 40 CFR 98.234(f)(8) for owners and operators who want to request to use BAMM beyond 2011. In this proposal, owners or operators requesting to use BAMM beyond 2011 are required to electronically notify EPA by December 31, 2011 that they intend to apply for BAMM for 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 . Owners or operators must submit the full extensionPage 19 of 36

request fo r BAMM by March 30, 2012. The full extension request must include a list of specific source categories and parameters at the facility for which the owner or operator is seeking to use BAMM. The full request must also include a description of the unique o r unusual circumstances, including data collection methods that do not meet safety regulations, methods that are technically infeasible, or specific laws or regulations that conflict with each specific source for which BAMM is being requested. In addition , the full request must include supporting documentation of how and when the owner or operator will come into full compliance with subpart W, including but not limited to acquiring necessary services or equipment to comply with all of subpart W reporting

r equirements. The contents of the full BAMM request for post 2011 remain unchanged from the 2010 final rule (75 FR 74508) with the exception that we are clarifying in this proposal that 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, i f properly demonstrated. We are seeking comment only onPage 20 of 36

these amendments to 40 CFR 98.234(f)(8)(iv) which we have proposed to change and not other elements of the post 2011 BAMM process. Further, we would note that the notice of intent, due December 31, 2011 to request BAMM post 2011 is intended for known issues (e.g., a monitoring requirement in the rule is counter to another federal, state or local regulation). EPA does not intend for the proposed amendments to 40 CFR 98.234(f)(8) to lead to a submiss ion of a notification of intent and a subsequent BAMM request consistent with 40 CFR 98.234(f)(8)(ii) by a facility to cover that facility in the event that the facility might need BAMM in a future year (sometimes referred to as a “protective filing”). S ubmission of a BAMM request for these possible future issues (e.g, newly acquired operations) is covered under 40 CFR 98.234(f)(1), which states “EPA reserves the right to review petitions after the deadline but will only consider and approve late petition s which demonstrate extreme or unusual circumstances.” EPA recognizes that it is not reasonable to predict all potential future issues and, as such, reserves the right to consider those BAMM requests in future years, without the reporter’s having to notify EPA by the December 31, 2011 notification of intent deadline described in 40 CFR 98.234(f)(8).Page 21 of 36 Once the owner or operator has notified EPA, by December 31, 2011, of their intent to apply for BAMM and has subsequently submitted a full extension request , by March 30, 2012, they can automatically use BAMM for the specific parameters identified in their request through June 30, 2012, regardless of the final determination by EPA on approval or denial of the BAMM request. This automatic extension would be n ecessary because under the proposed rule, facilities would have only been granted automatic BAMM through December 31, 2011. For facilities that are requesting BAMM for beyond 2011, BAMM must be extended automatically to provide EPA the time to review thor oughly the BAMM requests submitted for beyond 2011, while ensuring that the requesting facilities are not out of compliance with the rule during that review process . The owners and operators who apply for BAMM beyond 2011 must follow the requirements as s tated in subpart W by July 1, 2012, unless EPA approves their BAMM extension request (due March 30, 2012). Under the proposal, facilities that submit a notice of intent but do not follow up with a BAMM request consistent with 40 CFR 98.234(f)(8)(ii) by Ma rch 30, 2012 cannot use BAMM after December 31, 2011. EPA is seeking comment on these proposed deadlines for BAMM beyond 2011. EPA recognizes that there may bePage 22 of 36

additional concerns related to BAMM for post 2011 that were raised in the petitions for reco nsideration. Although EPA is aware of these concerns, we are not proposing amendments related to these concerns at this time . We are seeking comment s only on the proposal to extend the BAMM deadlines (for both 2011 and post 2011) and to clarify that BAMM may be sought for unique or unusual (as opposed to “extreme”) circumstances, including data collection methods that do not meet safety regulations , technical infeasibility and instances where subpart W monitoring requirements would conflict with regulatio ns. EPA is also re

- numbering several paragraphs that were incorrectly numbered. 40 CFR 98.234(f)(8)(iii) is re

designated as 40 CFR 98.234(f)(8)(ii)(A). 40 CFR 98.234(f)(8)(iv) is re

- designated as 40 CFR 98.234(f)(8)(ii)(B). 40 CFR 98.234(f)(8)(v) is re designated as 40 CFR 98.234(f)(8)(ii)(C). 40 CFR 98.234(f)(8)(v)(C) is re

- designated as 40 CFR 98.234(f)(8)(iii). The Administrator has determined that this action is subject to the provisions of Clean Air Act (CAA) section 307(d). See CAA section 307 (d)(1)(V)(the provisions of section 307(d) apply to “such other actions as the Administrator may determine”).Page 23 of 36

IV . S tatutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulat ion and Regulatory Review This action is not a "significant regulatory action" under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011). B. Paperwork Reduction Act This action does not impose any new information collection burden. These amendments affect provisions in the rule related to best available monitoring methods, which is an optional provision and is not mandatory. Fu rthermore, the proposed amendments would significantly reduce the administrative burden on industry by removing the requirement to make a formal application to use best available monitoring methods in 2011. However, the Office of Management and Budget (OMB) has previously approved the information collection requirements contained in the existing regulations, 40 CFR 98 subpart W (75 FR 74458), under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number [20 60

- 0651] . T he OMB control numbers for EPA's regulationsPage 24 of 36

in 40 CFR are listed in 40 CFR part 9. The ICR number for 40 CFR part 98, subpart W is 2376.03. C. Regulatory Flexibility Act The RFA generally requires an agency to prepare a regulatory flexibili ty analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this proposed rule on small entities, small entity is defined as: (1) a small business as defined by the Small Business Administration’s regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization tha t is any not

- for

-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of today’s proposed rule on small entities, I certify that this action will not have a significant economic impact on aPage 25 of 36

substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the p rimary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” 5 USC 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. Based on the se proposed amendments, certain c ompanies would be granted additional time to use BAMM during 2011 without being required to submit an application for approval to the Administrator. In addition, these proposed amendments increase the scope of the types of companies who would be granted the option to use BAMM in 2011 without being required to submit an application for approval to the Administrator. Finally, companies who choose to request BAMM for 2012 and beyond would be given additional time by which they would be required to submit thei r application to the EPA Administrator for approval. We have thereforePage 26 of 36

concluded that these proposed amendments will relieve regulatory burden for all affected small entities. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531

– 1538, requires Federal agencies, unless otherwise prohibited by law, to asses s the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Federal agencies must also develop a plan to provide notice to small governments that might be significantly or uniquely affected by any regulatory r equirements. The plan must enable officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates and must inform, educate, and advise small governments on compliance with the regulatory requirements. The proposed rule amendments do not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private secto r in any one year. Thus, the proposed rule amendments are not subject to thePage 27 of 36

requirements of section 202 and 205 of the UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The proposed amendments will not impose any new requirements that are not currently required for 40 CFR part 98, and the rule amendments would not unfairly apply to small governments. Therefore, thi s action is not subject to the requirements of section 203 of the UMRA. E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the na tional government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. These amendments apply to an optional provision in the final rule for subpart W, which applies to petroleum and natural gas facilities that emit greenhouse gases . Few, if any, State or local government facilities would be affected. This regulation also does not limit the power of States or localities to collect GHG data and/or regulate GHG emissions. Thus, Executive Order 13132 does not apply to this action.Page 28 of 36

F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249 , November 9, 2000). The proposed rule amendments would not result in any changes to the current requirements of 40 CFR part 98 subpart W. The amendments proposed in this rule only apply to optional provisions in 40 CFR part 98 subpart W. Thus, Executive Order 13175 does not apply to this action. Although Executive Order 13175 does not apply to this action, EPA sought opportunities to provide information to Tribal governments and representatives during the development of the rule for subpart W promulgate d on November 30, 2010. A summary of the EPA’s consultations with Tribal officials is provided in Sections VIII. D and VIII.F of the preamble to the 2009 final rule and Section IV.F of the preamble to the 2010 final rule for subpart W (75 FR 74485). G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5

- 501 of the ExecutivePage 29 of 36

Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety r isks. H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104

- 113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) tha t are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.Page 30 of 36 This proposed rulemaking does not involve technical standards . T herefore, EPA is not considering the use of any voluntary consensus standards. J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low

Income Populations Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low

- income populations in the United States. E PA has determi ned that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low

- income populations because it does not affect the level of protection provided to human health or the environment because it is a rule addressing information collection and reporting procedures.Mandatory Reporting of Greenhouse Gases: Petroleum and Natural Gas Systems: Revisions to Best Available Monitoring Method Provisions

Page 31 of 3 6 List of Subjects in 40 CFR Part 98 Environmental Protection, Administrative practice and procedures, Greenhouse gases, Air pollution control, Monitoring, Reporting and recordkeepi ng requirements.

Date:

Lisa P. Jackson, Administrator.Page 32 of 36 For the reasons discussed in the preamble, EPA proposes to amend 40 CFR part 98 as follows: PART 98 [AMENDED] 1. The authority citation for part 98 continues to read as follows: Authority: 42 U.S.C. 7401

– 7671q. Subpart W [Amended] 2. Section 98.234 is amended as follows: a. By revising paragraph (f)(2) introductory text. b. By revising paragraph (f)(3) introductory text. c. By revising paragraph (f)(4) introductory text. d. By revising paragraph (f)(5). e. By removing and reserving paragraph (f)(6). f. By removing and reserving paragraph (f)(7). g. By revising paragraph (f)(8). §98.234 Monitoring and QA/QC Requirements

* * * * * (f) * * * (2) Best available monitoring methods for well

related emissions. During January 1, 2011 through December 31, 2011, owners and operators may use best available monitoring methods for any well

- related data that cannot reasonably be measured according to the monitoring andPage 33 of 36

QA/QC requirements of this subpart. These well

- related

sources are:

* * * * * ( 3) Best available monitoring methods for specified activity data . During January 1, 2011 through December 31, 2011, owners or operators may use best available monitoring methods for activi ty data as listed below that cannot reasonably be obtained according to the monitoring and QA/QC requirements of this subpart. These sources are:

* * * * * (4) Best available monitoring methods for leak detection and measurement . During January 1, 2011 through December 31, 2011, owners or operators may use best available monitoring methods for sources requiring leak detection and/or measurement. These sources include:

* * * * * (5) Requests for the use of best available monitoring methods . (i) No requ est or approval by the Administrator is necessary to use best available monitoring methods between January 1, 2011 and December 31, 2011 for the sources specified in paragraph (f)(2) of this section. (ii) No request or approval by the Administrator is

ne cessary to use best available monitoring methods betweenPage 34 of 36

January 1, 2011 and December 31, 2011 for sources specified in paragraph (f)(3) of this section. (iii) No request or approval by the Administrator is necessary to use best available monitoring meth ods between January 1, 2011 and December 31, 2011 for sources specified in paragraph (f)(4) of this section. (iv) No request or approval by the Administrator is necessary to use best available monitoring methods between January 1, 2011 and December 31, 2011 for sources not listed in paragraph (f)(2), (f)(3), and (f)(4) of this section. (6) [Reserved] (7) [Reserved] (8) Requests for extension of the use of best available monitoring methods beyond 2011 for sources listed in paragraphs (f)(2), (f)(3), (f )(4), and (f)(5)(iv) of this section. The owner or operator must first provide the Administrator an initial electronic notification of intent to submit an extension request for use of best available monitoring methods beyond December 31, 2011 for unique o r unusual circumstances which include data collection methods that do not meet safety regulations, a requirement being technically infeasible, or counter to other local, State, or Federal regulations. The owner or operator must follow

-Page 35 of 36

up this initial noti fication with an extension request containing the information specified in 98.234(f)(8)(ii). Facilities that submit both a timely notice of intent and extension request consistent with 98.234(f)(8)(ii) can automatically use BAMM through June 30, 2012, fo r the specific parameters identified in their notification of intent and BAMM request regardless of whether the BAMM request is ultimately approved. Facilities that submit a notice of intent but do not follow up with a BAMM request by March 30, 2012 cannot automatically use BAMM after December 31, 2011. (i) Timing of Request . The initial electronic notice of intent to request BAMM must be submitted by December 31, 2011. The completed extension request must be submitted to the Administrator no later than March 30, 2012. (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) A description o f the unique or unusual circumstances, such as data collection methods that do not meet safety regulations, technical infeasibility, or specific laws or regulations that conflict with eachPage 36 of 36

specific source for which an owner or operator is requesting use of best available monitoring methodologies. (C) A detailed explanation and supporting documentation of how and when the owner or operator will receive the services or equipment to comply with all of this subpart W reporting requirements. (iii) Approval cr iteria . 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.