# Oil and Natural Gas NSPS and NESHAP

Update for Interagency Review March 5, 2012

# Overview ► 

# Overview of Public Comments Received ► 

# Summary of Significant Changes from Proposal ► 

# Impacts

2 Deliberative – Do Not Cite or Quote

# Oil and Na **tur al Gas Oper** **at ions** 

**Crude Oil**  **to Refineries (**  **not covered by these**  **rules )**  **Pr oduction & Pr** **ocessing** 1. Drilling and Well Completion 2. Producing We lls 3. Gathering Lines 4. Gathering and Boosting Compressors 5. Gas Processing Plant **3 1**  **2**

**4 5**  Oil and natural gas systems encompass wells, gas gathering and processing facilities, storage, as well as transmission and distribution pipelines. These components are all important aspects of the process of getting natural gas out of the ground and to the end user .

Sour ce: Adapted fr

om American Gas Association and EP A Natural Gas ST

AR Pr ogram 3 **6 7**  **8 10a**  **10b**
**10c**

**10d 9**  

### Tr**ansmission & Stor** **ag e**  6. Transmission Compressor Stations 7. Transmission Pipeline 8. Underground Storage 

### Dis**tribution** (not covered by these rules) 9. Distribution Mains 10. Re gulators and Meters for: a. City Gate b. Large Volume Customers c. Re sidential Customers d. Commercial Customer

# Overview of Comments from Stakeholders ► 

## More than 156,000 comments received on proposal ► 

## Environmental community ► 

## Generally supportive of the rulemaking regarding treatment of upstream operations (wells to gas processing plants) ► 

## Believes we should regulate methane and cover existing sources, not just new sources, under the NSPS 

## Oil and gas industry ► ► 

## Asserts that we are regulating methane under the guise of regulating VOC ► 

## Claims that EP

A’ s emission factor overestimates emissions from well completions ► 

## Generally supportive of control requirements ► 

## Concerns with implementation and administrative burden ► 

## States ► 

## Generally supportive ► 

## Wa nt to minimize conflict with existing state regulations Deliberative – Do Not Cite or Quote 4

# Summary of Significant Changes to NSPS ► 

## We ll Completions ► 

### 2 year delay for requiring reduced emission completion • Based on unavailability of sufficient REC equipment to comply by the effective date • For 2 years after publication, best system of emission reduction (BSER) will be combustion ► 

### Clarified the period of well completion that is being regulated • Begins with flowback following fracturing 

### • Ends with (1) well shut- in or (2) gas continuously routed to sales line (whichever is earlier) ► 

### Formed new

s ubcategory for “low

p ressure” wells • Av oids wells with pressure inadequate to overcome gathering line being required to perform reduced emission completions 

### • Uses formula involving vertical well depth and reservoir pressure 

### • Will be required to flare (treated same as wildcat and delineation wells) ► 

### Streamlined notification requirements • Companies submit single “bulk” notification for all completions for upcoming month, instead of individually 

### • Submit 2 - day follow- up e - mail for each completion Deliberative – Do Not Cite or Quote 5

# Summary of Significant Changes to NSPS ► 

## Compressors ► 

### Reciprocating compressors • Require changing rod packing every 26,000 hours of operation • Added a new alternative that operators can change packing every 36 months instead of tracking hours of operation ► 

### Centrifugal compressors • Compressors in transmission and storage segments (emitting pipeline quality natural gas) are not af

fected 

### • Redefined “affected facility” to be only compressors with wet seal systems 

### • Require 95 percent control for wet seal systems 

### • Dry seal compressors (inherently low in emissions) are not regulated 

### ► 

## Pneumatic Controllers ► 

### Controllers in transmission and storage segments are not af fected ► 

### Only “continuous bleed natural gas operated controllers” are af fected ► 

## Storage Ve ssels ► 

### Changed applicability criteria from liquid throughput to VOC emissions ► 

### Ve ssels emitting at least 6 tpy must reduce emissions by 95 percent Deliberative – Do Not Cite or Quote 6

# Impacts of NSPS Improvements

**Emission Point**  **or Activity VOC** 

**Reduction (tons/yr)**  **Methane**

**Reduction (tons/yr)**  **VOC Cost** 

**Effectiveness (w/o savings)**  **($/ton) Methane**  **Cost**

**Effectiveness (w/ savings)**  **($/ton) Total** 

**Nationwide Costs**  **(w/savings) ($**  **million/yr) Total**  **Nationwide Costs**  **(w/o savings) ($**  **million/yr) Completions**  240,000 1,600,000 (40) to 1400 (6) to 200 (9.3) 320.0 **Storage vessels**  30,000 6,500 200 900 to 930 5.9 6.0 **Production** (Compressors, 26,000 92,000 (800) to 33 (220) to 9 (21.0) 0.84

7 Deliberative – Do Not Cite or Quote (Compressors, Pneumatics) 26,000 92,000 (800) to 33 (220) to 9 (21.0) 0.84 **Processing** (Equipment Leaks, Compressors, and Pneumatics) 1,500 7,400 (500) to 650 (100) to 140 (0.76) 1.0 **TOTAL 293,000**  **1.7 million (33 MMT**  **CO2 -**  **e) (60)**  **to 1,100 (10)**  **to 200 (18)**  **335** Note: “Savings” above are re aliz ed through recovery of salable natural gas product. To tal costs shown include $7.1 million of annualiz ed re porting and recordkeeping costs. To tals may not sum due to independent r ounding.

# NSPS Impacts: Changes from Proposal **Costs Proposal**  **Final Annualized**  **Compliance Costs ($/** **yr )**  738 million 335 million **Revenues from Product**  **Recovery ($/ yr** **)** 783 million 353 million **Net Annualized Compliance Costs**  **($/ yr** **)** ( 45 million) (18 million)

8 **Emissions VOC**  **Reductions (** **tons/yr )**  535 thousand 293 thousand **Methane Reductions (tons/yr)**  3.4 million 1.7 million **Well Completions Well completions (number** **/yr)** 22,000 11,000 Deliberative – Do Not Cite or Quote

# Impacts of NESHAPImprovements

**Emission Point or Activity**  **Facilities**

**Requiring Control**  **HAP**

**Reduction (tons/yr)**  **HAP**

**Reduction (percent)**  **HAP Cost**

**Effectiveness ($/ton)**  **Total Costs**  **($ million/yr) Small Dehydrators**  (Production) 74 500 59 3,300 1.7

9 Deliberative – Do Not Cite or Quote **Small Dehydrators** (Transmission/Storage) 7 160 85 810 0.13 **Storage Vessels** 376 590 72 23,000 13.0 **TOTAL 1,260**  **$18 million** Note: To tal costs shown include $2.4 million of annualiz ed re porting and recordkeeping costs. To tals may not sum due to independent r ounding.

# NESHAPI mpacts: Changes from Proposal
**Costs Proposal**  **Final Annualized**  **Compliance Costs ($/** **yr )**  16 million 18 million **Emissions HAP Reductions**  **( tons/yr** **)** 1,380 1,260

10 Deliberative – Do Not Cite or Quote