MEMORANDUM 

TO: Docket ID No. EPA-HQ-OAR-2015-0764 

FROM: Alexis McKittrick and Mark de Figueiredo, EPA/CCD 

DATE: January 21, 2016 

SUBJECT: Assessment of Impacts of the Leak Detection Methodology Revisions and 

Confidentiality Determinations for Petroleum and Natural Gas Systems 

Introduction 

The EPA is proposing to add new monitoring methods for detecting leaks from oil and 

gas equipment in the petroleum and natural gas systems source category in subpart W of the 

Greenhouse Gas Reporting Rule (40 CFR part 98, subpart W) (hereafter referred to as “subpart 

W”). Specifically, the EPA is proposing methods consistent with the leak detection methods in 

the recently proposed new source performance standards (NSPS) for the oil and gas industry 

(80 FR 56593; September 18, 2015), also known as 40 CFR part 60, subpart OOOOa (hereafter 

referred to as the “NSPS subpart OOOOa”). In addition, the EPA is proposing to add emission 

factors for leaking equipment to subpart W to be used in conjunction with these monitoring 

methods to calculate and report greenhouse gas (GHG) emissions resulting from equipment 

leaks. 

An increase in respondent burden is expected for subpart W reporters in industry 

segments that conduct leak detection surveys and become subject to the proposed NSPS subpart 

OOOOa in the next 3 years. In this memorandum, we discuss the potential burden to reporters 

affected by these proposed amendments. 

To accommodate the new methods and emission factors added by these proposed 

amendments, it is expected that these facilities would update their facility-specific calculation 

mechanism (i.e., calculation spreadsheet, recordkeeping database, etc.) to accommodate the new 

methodology and emission factors. 

The costs of these proposed amendments to subpart W were estimated as the incremental 

change from the previously estimated costs of the requirements under subpart W.1

 This 

incremental cost was calculated based on the number of reporters in each industry segment that 

 

1 The previously estimated costs of the requirements under subpart W are included in the proposed Information 

Collection Request for the Greenhouse Gas Reporting Program, OMB Control No. 2060-0629, EPA ICR No. 

2300.17 (80 FR 68534; November 5, 2015). 
2 

are likely to be affected by these proposed amendments. The details for estimating this 

incremental cost (the potential burden to reporters) are included in the sections below. 

Determination of Count of Subpart W Facilities That Would Become Subject to the 

Proposed NSPS Subpart OOOOa 

To determine the number of potential Onshore Petroleum and Natural Gas Production 

facilities and Onshore Petroleum and Natural Gas Gathering and Boosting facilities subject to 

subpart W that may become subject to the proposed NSPS subpart OOOOa during the next 

3 years, subpart W data from the Greenhouse Gas Reporting Program (GHGRP) were used as 

described below. 

Onshore Petroleum and Natural Gas Gathering and Boosting Industry Segment 

Reporting requirements for the Onshore Petroleum and Natural Gas Gathering and 

Boosting industry segment were added to subpart W on October 22, 2015 (80 FR 64262), so 

GHGRP data related to subpart W facilities in this industry segment have not yet been collected. 

However, the subpart W ICR for those final amendments assumed that there would be 200 

facilities subject to subpart W.2

 Based on the fact that NSPS subpart OOOOa applicability for 

fugitive emissions components is proposed to be determined by an increase in capacity at the 

compressor level, a compressor station that is part of a subpart W facility in this industry 

segment could theoretically become subject to the NSPS subpart OOOOa if one compressor at 

any of the facility’s compressor stations is modified to increase the compressor capacity. An 

average subpart W facility in this industry segment was assumed to have eight compressor 

stations and each compressor station was assumed to contain multiple compressors. A 

conservative approach was used to estimate that all 200 of the subpart W facilities in the industry 

segment would have at least one compressor station that would become subject to the proposed 

NSPS subpart OOOOa over the next 3 years, or approximately 67 facilities per year. 

Onshore Petroleum and Natural Gas Production Industry Segment 

For the proposed amendments to this subpart W industry segment, the applicable 

proposed NSPS subpart OOOOa affected facility is the collection of fugitive emissions 

components at a new or modified well site, where a modification is proposed to occur when a 

new well is drilled at an existing well site or a well at an existing well site is hydraulically 

fractured or hydraulically refractured. 

Oil wells. Reporting requirements for oil well completions and workovers with hydraulic 

fracturing were added to subpart W on October 22, 2015 (80 FR 64262); previously, only 

 

2

 Information Collection Request for the Greenhouse Gas Reporting Program, OMB Control No. 2060-0629, EPA 

ICR No. 2300.17 (80 FR 68534; November 5, 2015). 
3 

completions and workovers for gas wells were required to be reported. As with the new Onshore 

Petroleum and Natural Gas Gathering and Boosting industry segment, GHGRP data related to 

these amendments have not yet been collected. However, according to the proposed ICR for the 

Greenhouse Gas Reporting Program, there are expected to be 50 new facilities with oil wells that 

will begin reporting to subpart W due to the increase in emissions from oil well completions or 

workovers with hydraulic fracturing.3

 These completions and workovers with hydraulic 

fracturing would be considered new or modified affected facilities under the proposed NSPS 

subpart OOOOa. Therefore, all 50 of these new subpart W facilities were assumed to have at 

least one well site that would become subject to the proposed NSPS subpart OOOOa over the 

next 3 years, or approximately 17 facilities per year. 

Gas wells. According to 2014 subpart W GHGRP data, there were 503 facilities reporting 

in this industry segment, and 283 of these reported at least one gas well completion or workover. 

Over the 4-year period of the GHGRP for subpart W, 399 facilities out of the total 628 facilities 

that have reported in this industry segment had at least one gas well completion or workover. In 

addition, the supporting documentation for the proposed NSPS subpart OOOOa indicates that the 

number of new or modified oil well sites projected for the year 2020 (16,562) is projected to be 

about three times the number of new or modified gas well sites (5,518).4 Due to the increase in 

completions or workovers with hydraulic fracturing of oil wells, and the fact that the definition 

of subpart W includes all of a reporter’s production operations in an entire basin, it is highly 

probable that a facility currently reporting to subpart W in this industry segment could have a 

completion or workover with hydraulic fracturing for a gas well and/or an oil well. For these 

reasons, a conservative approach was used to estimate that all 503 of the facilities in the industry 

segment currently reporting to subpart W were assumed to have at least one well site that would 

become subject to the NSPS subpart OOOOa over the next 3 years, or approximately 167 

facilities per year. 

Total facilities. For purposes of calculating cost impacts, for the reasons described above, 

a conservative approach was used to estimate that all 553 of the subpart W facilities in this 

industry segment would have at least one well site that would become subject to the proposed 

NSPS subpart OOOOa over the next 3 years, or approximately 184 facilities per year. 

 

3

 Information Collection Request for the Greenhouse Gas Reporting Program, OMB Control No. 2060-0629, EPA 

ICR No. 2300.17 (80 FR 68534; November 5, 2015). It is expected that these reporters have other subpart W 

emission sources at the facility but that the addition of emissions from oil well completions or workovers with 

hydraulic fracturing will increase emissions to 25,000 metric tons of CO2 equivalent or more per year. 4

 See Table 5-12 of Oil and Natural Gas Sector: Standards for Crude Oil and Natural Gas Facilities; Background 

Technical Support Document for the Proposed New Source Performance Standards (40 CFR Part 60, subpart 

OOOOa). August 2015. Docket Item No. EPA-HQ-OAR-2010-0505-5120. 
4 

Results of Analysis 

Costs to reporters associated with this proposal are expressed as labor costs (i.e., the cost 

of labor by facility staff to meet the proposed amendments). Labor costs were determined using 

an approach consistent with previous impacts analyses associated with the GHGRP. For all 

industry segments, the labor rates are $129.83 for senior managers, $118.86 for middle 

managers, $99.18 for engineers and $52.84 for technicians.5 The update to the facility-specific 

calculation mechanism is expected to take 2 hours for an engineer to perform at $99.18 per hour, 

or $198.36 per reporter. 

As described above, approximately 184 Onshore Petroleum and Natural Gas Production 

facilities and 67 Onshore Petroleum and Natural Gas Gathering and Boosting facilities per year 

(251 total facilities) would be expected to become subject to the proposed NSPS subpart OOOOa 

and to incur labor costs under these amendments. Each of these 251 facilities are expected to 

incur a 2-hour increase in burden and a nearly $200 increase in burden costs over the 3-year 

period covered by this impacts analysis. 

There are no changes in burden to the following industry segments: Offshore Petroleum 

and Natural Gas Production, Onshore Natural Gas Processing, Onshore Natural Gas 

Transmission Compression, Underground Natural Gas Storage, Liquefied Natural Gas (LNG)

Storage, LNG Import and Export Equipment, Natural Gas Distribution, and Onshore Natural Gas 

Transmission Pipeline. As noted in the preamble to the proposed amendments, reporters in these 

industry segments would need to add a few new emission factors to their existing systems rather 

than fully transitioning their recordkeeping, calculating, and reporting systems, so we do not 

estimate any additional, quantifiable burden for these reporters. 

The estimated change in burden (labor hours) and cost for these proposed amendments to 

subpart W are summarized in Table 1. 

 

5 The base hourly wages & salaries (not including benefits & overhead) are from BLS’s May 2014 National 

Industry-Specific Occupational Employment and Wage Estimates (http://www.bls.gov/oes/current/oessrci.htm). 
5 

Table 1. Annual Average Change in Reporter Burden and Cost for Proposed Changes to 

Subpart W 

Industry Segment 

Change in Total 

Burden (Technical 

Labor Hours) 

Change in Burden 

(Technical Labor 

Hours/Reporter) 

Change in 

Total Cost ($) 

Change in Cost 

($/reporter) 

Onshore Petroleum and 

Natural Gas Gathering and 

Boosting 133 2.00 $13,224 $198 

Onshore Petroleum and 

Natural Gas Production 369 2.00 $36,564 $198 

TOTAL 502 $49,788 

Small Entity Impacts 

The EPA has determined that some small businesses would be affected by these proposed 

amendments because their production processes emit GHGs exceeding the reporting threshold. 

However, the EPA has determined that the burden of these proposed amendments is not a 

significant increase, regardless of the size of the affected reporter. Therefore, these proposed 

amendments would not have a significant economic impact on a substantial number of small 

entities. 

Although these proposed amendments would not have a significant economic impact on a 

substantial number of small entities, the EPA nonetheless has tried to reduce the impact of this 

rule on small entities. As part of the process of finalizing the subpart W 2010 final rule (75 FR 

74458, November 30, 2010), the EPA took several steps to evaluate the effect of the rule on 

small entities. First, the EPA determined appropriate thresholds that reduced the number of small 

businesses reporting. Also, the EPA supports a “help desk” for the GHGRP, which would be 

available to answer questions on the provisions in this rulemaking. Finally, the rule includes a 

mechanism in 40 CFR 98.2 to allow facilities and suppliers that report less than 25,000 metric 

tons of CO2e/year for 5 years or less than 15,000 metric tons CO2e/year for 3 years to cease 

annual reporting to the EPA.