Document ID: EPA-HQ-OAR-2010-0505-7736
Agency: epa
Document Type: Proposed Rule
Title: Oil and Natural Gas Sector; Emission Standards for New, Reconstructed, and Modified Sources: Stay of Certain Requirements
Posted Date: 2017-06-16T04:00Z

[Federal Register Volume 82, Number 115 (Friday, June 16, 2017)]
[Proposed Rules]
[Pages 27645-27652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12698]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2010-0505; FRL-9963-36-OAR]
RIN 2060-AT59

Oil and Natural Gas Sector: Emission Standards for New, 
Reconstructed, and Modified Sources: Stay of Certain Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to stay 
for two years certain requirements that are contained within the Final 
Rule titled ``Oil and Natural Gas Sector: Emission Standards for New, 
Reconstructed, and Modified Sources,'' published in the Federal 
Register on June 3, 2016 (2016 Rule). On June 5, 2017, the EPA 
published a notice that it stayed for three months the; fugitive 
emissions requirements, well site pneumatic pump standards, and the 
requirements for certification of closed vent systems by a professional 
engineer in accordance with the Clean Air Act (CAA). The EPA has 
granted reconsideration based on specific objections to these 
requirements. The proposed stay discussed in this action, which follows 
the three-month stay, would provide the EPA sufficient time to propose, 
take public comment, and issue a final action on the issues concerning 
the specific requirements on which EPA has granted reconsideration. 
During this time, the EPA also plans to complete its reconsideration 
process for all remaining issues raised in these reconsideration 
petitions regarding fugitive emissions, pneumatic pumps, and 
certification by professional engineer requirements. The EPA 
acknowledges that the administrative reconsideration petitions include 
additional issues regarding these three requirements other than the 
issues for which we specifically have granted reconsideration. In 
addition, since the publication of the 2016 Rule, the EPA has received 
numerous questions relative to the implementation of these three 
requirements. During the reconsideration proceeding, the EPA intends to 
look broadly at the entire 2016 Rule. The EPA believes that addressing 
all of these issues at the same time would provide clarity and 
certainty for the public and the regulated community with regard to 
these requirements. The EPA is seeking comment pertaining to this stay 
and its duration and impact. The EPA is not taking comment at this time 
on substantive issues concerning these requirements, or on any of the 
other provisions subject to the reconsideration.

DATES: Comments must be received on or before July 17, 2017. If a 
hearing is requested on this proposed rule, written comments must be 
received on or before August 9, 2017.
    Public Hearing. A public hearing will be held, if requested by June 
21, 2017, to accept oral comments on this proposed action. If a hearing 
is requested, it will be held at the EPA's Washington, DC campus 
located at 1201 Constitution Avenue NW., Washington, DC. The hearing, 
if requested, will begin at 9 a.m. (local time) and will conclude at 4 
p.m. (local time) on July 10, 2017. To request a hearing, to register 
to speak at a hearing, or to inquire if a hearing will be held, please 
contact Aimee St. Clair at (919) 541-1063 or by email at 
stclair.aimee@epa.gov.
    Any updates made to any aspect of the hearing, including whether or 
not a hearing will be held, will be posted online at https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/actions-and-notices-about-oil-and-natural-gas#regactions. In addition, 
you may contact Aimee St. Clair at (919) 541-1063 or email at 
stclair.aimee@epa.gov with public hearing inquiries. The EPA does not 
intend to publish a notice in the Federal Register announcing any such 
updates. Please go to https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/actions-and-notices-about-oil-and-natural-gas#regactions for more information on the public hearing.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2010-0505, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting 
comments. Once submitted, comments cannot be edited or removed from 
Regulations.gov. The EPA may publish any comment received to its public 
docket. Do not submit electronically any information you consider to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Multimedia submissions (audio, 
video, etc.) must be accompanied by a written comment. The written 
comment is considered the official comment and should include 
discussion of all points you wish to make. The EPA will generally not 
consider comments or comment

[[Page 27646]]

contents located outside of the primary submission (i.e., on the Web, 
cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Mr. Peter Tsirigotis, Sector Policies 
and Programs Division (D205-01), Office of Air Quality Planning and 
Standards, Environmental Protection Agency, Research Triangle Park, 
North Carolina 27711; telephone number: (888) 627-7764; email address: 
airaction@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    On June 3, 2016, the EPA published a final rule titled ``Oil and 
Natural Gas Sector: Emission Standards for New, Reconstructed, and 
Modified Sources; Final Rule,'' at 81 FR 35824 (``2016 Rule''). The 
2016 Rule establishes new source performance standards (NSPS) for 
greenhouse gas emissions and volatile organic compound (VOC) emissions 
from the oil and natural gas sector. This rule addresses, among other 
things, fugitive emissions at well sites and compressor stations 
(``fugitive emissions requirements'') and emissions from pneumatic 
pumps. In addition, for a number of affected facilities (i.e., 
centrifugal compressors, reciprocating compressors, pneumatic pumps, 
and storage vessels), the rule requires certification by a professional 
engineer of the closed vent system design and capacity, as well as any 
technical infeasibility determination relative to controlling pneumatic 
pumps at well sites. For further information on the 2016 Rule, see 81 
FR 35824 (June 3, 2016) and associated Docket ID No. EPA-HQ-OAR-2010-
0505.
    On August 2, 2016, a number of interested parties submitted 
administrative petitions to the EPA seeking reconsideration of various 
aspects of the 2016 Rule pursuant to section 307(d)(7)(B) of the CAA 
(42 U.S.C. 7607(d)(7)(B)).\1\ Those petitions include numerous 
objections relative to the fugitive emissions requirements, well site 
pneumatic pump standards, and the requirements for certification by 
professional engineer.
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    \1\ Copies of these petitions are included in the docket for the 
2016 Rule, Docket ID No. EPA-HQ-OAR-2010-0505.
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    In accordance with section 307(d)(7)(B) of the CAA, the 
Administrator shall convene a reconsideration proceeding if, in the 
Administrator's judgment, the petitioner raises an objection to a rule 
that was impracticable to raise during the comment period or if the 
grounds for the objection arose after the comment period but within the 
period for judicial review, and the objection is of central relevance 
to the outcome of the rule. The Administrator may stay the 
effectiveness of the rule for up to three months during such 
reconsideration.
    In a letter dated April 18, 2017, based on the criteria in CAA 
section 307(d)(7)(B), the Administrator convened a proceeding for 
reconsideration of the following objections relative to the fugitive 
emissions requirements: (1) The process and criteria for requesting and 
receiving approval for the use of an alternative means of emission 
limitations (AMEL) for purposes of compliance with the fugitive 
emissions requirements in the 2016 Rule and (2) the applicability of 
the fugitive emissions requirements to low production well sites.\2\
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    \2\ See Docket ID No. EPA-HQ-OAR-2010-0505-7730.
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    After issuing the April 18, 2017, letter, the EPA identified 
objections to two other aspects of the 2016 Rule that meet the criteria 
for reconsideration under section 307(d)(7)(B) of the CAA. These 
objections relate to (1) the requirements for certification of closed 
vent system by professional engineer (``PE certification 
requirement''); and (2) the well site pneumatic pump standards. As part 
of the administrative reconsideration proceeding, the EPA will prepare 
a notice of proposed rulemaking that will provide the petitioners and 
the public an opportunity to comment on the fugitive emissions 
requirements, well site pneumatic pump standards, and the requirements 
for certification by professional engineer, and the issues associated 
with these requirements.
    On June 5, 2017, the EPA published a notice that it stayed the 
fugitive emissions requirements, the well site pneumatic pumps 
requirements, and the requirements for certification of closed vent 
system by professional engineer for three months pursuant to section 
307(d)(7)(B) of the CAA. This stay is effective from June 2, 2017, to 
August 31, 2017. When we have issued similar stays in the past, it has 
often been our practice to also propose a longer stay through a 
rulemaking process. See, e.g., 74 FR 36427 (July 23, 2009). In this 
case, for the reasons stated below, we propose to stay these 
requirements in the 2016 Rule for two years.

II. The Proposed Action

    The EPA is proposing to stay the fugitive emissions requirements, 
the well site pneumatic pump standards, and the requirements for 
certification of closed vent system by professional engineer in the 
2016 Rule until [DATE 2 YEARS AFTER PUBLICATION OF FINAL RULE IN THE 
FEDERAL REGISTER].
    As explained above, the EPA has convened a proceeding for 
reconsideration based on the following two objections to the fugitive 
emission requirements: (1) The process and criteria for requesting and 
receiving approval for the use of an AMEL for the fugitive emissions 
requirements; and (2) the applicability of the fugitive emissions 
requirements to low production well sites. These issues determine the 
universe of sources that must implement the fugitive emissions 
requirements. With respect to the AMEL issue, the EPA recognizes that a 
number of states have developed programs to control oil and gas 
emission sources in their own states, and that certain owners or 
operators may achieve equivalent, or more, emission reduction from 
their affected source(s) than the required reduction under the 2016 
Rule by complying with their state-mandated requirements. 81 FR 35871. 
During development of the 2016 Rule, the EPA evaluated state fugitive 
emissions programs in Colorado, Ohio, Pennsylvania, Texas, West 
Virginia, and Wyoming. Additionally, California has recently proposed 
regulations to reduce methane emissions from oil and gas activities, 
including proposing fugitive emissions requirements. These seven states 
represent a significant portion of the oil and gas activities in the 
U.S. To encourage states' proactive efforts to reduce emissions from 
the oil and gas industry, the EPA included AMEL provisions in the final 
2016 Rule, which can be used to request and obtain EPA approval of 
state programs, or other means, as an alternative for complying with 
the fugitive emissions requirements. Id.
    While the AMEL provisions apply to work practice standards besides 
the fugitive emissions requirements, these other standards (i.e., well 
completions and reciprocating compressors work practice standards) have 
been implemented since they were first promulgated in 2012\3\ (subpart 
OOOO) to reduce VOC emissions from hydraulically fractured gas well

[[Page 27647]]

completions and reciprocating compressors used in production, and there 
has not been a demand for AMEL for these standards. In contrast, the 
newly promulgated fugitive emissions requirements are still in the 
process of being phased in.\4\ In addition, as the EPA observed in the 
2016 Rule, fugitive emissions monitoring is a field of emerging 
technology, and major advances are expected in the near future. 81 FR 
35860-1. For the reasons stated above, the AMEL provisions are of 
particular importance to the fugitive emissions requirements as they 
directly impact how compliance can be achieved with respect to the 
fugitive emissions requirements. However, several administrative 
reconsideration petitions raised issues and questions regarding the 
AMEL provisions relative to the fugitive emissions requirements (e.g., 
who can apply for and who can use an approved AMEL).
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    \3\ Oil and Natural Gas Sector: New Source Performance Standards 
and National Emission Standards for Hazardous Air Pollutants 
Reviews. 77 FR 49490 (August 16, 2012).
    \4\ As mentioned above, the fugitive emissions requirements, 
including the June 3, 2017, deadline for conducting initial 
monitoring survey, are currently stayed for three months pursuant to 
section 307(d)(7)(B).
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    These inquiries and concerns suggest that the AMEL provisions 
included in the 2016 Rule, which were finalized without having been 
proposed for notice and comment, may not be sufficiently clear to 
facilitate effective application and approval of AMEL, and therefore 
fail to serve their intended purpose. The ability to apply for and 
obtain AMEL for fugitive emissions requirements determines whether well 
sites and compressor stations, in particular those subject to existing 
state programs or those which have invested in emerging technology, 
must now redirect or expend additional resources and efforts to 
implement the 2016 Rule's fugitive emissions requirements, which may 
negatively impact or otherwise complicate their compliance with 
applicable state programs and/or their progress in using emerging 
technology, an endeavor that may potentially be rendered unnecessary 
should the sources qualify for AMEL. For the reasons stated above, the 
EPA believes that it is reasonable to stay the fugitive emissions 
requirements while it completes a review of the current AMEL process 
via rulemaking.
    The low production well site issue concerns the scope of the 
sources subject to the well site fugitive emissions requirements. The 
EPA had proposed to exempt low production well sites from the fugitive 
emissions requirements, believing the lower production associated with 
these wells would generally result in lower fugitive emissions. 80 FR 
56639. However, in the final rule, the EPA required that these well 
sites comply with the fugitive emissions requirements, based on 
information and rationale not presented for public comment during the 
proposal stage. See 81 FR 35856 (``. . . well site fugitive emissions 
are not correlated with levels of production, but rather based on the 
number of pieces of equipment and components''). Available information 
indicated that ``30 percent of natural gas wells are low production 
wells, and 43 percent of all oil wells are low production wells.'' 81 
FR 35856. In light of the sizable percentage of well sites that may be 
impacted by the outcome of this reconsideration, the EPA believes that 
it is reasonable to stay the well site fugitive emissions requirements 
while the EPA reassesses whether an exemption is appropriate and, if 
so, establishes proper criteria for such exemption.
    For closed vent systems used to comply with the emission standards 
for various equipment used in the oil and natural gas sector, the 2016 
Rule requires certification by a professional engineer that a closed 
vent system design and capacity assessment was conducted under his or 
her direction or supervision and that the assessment and resulting 
report were conducted pursuant to the requirements of the 2016 Rule. 
This certification requirement must be met in order comply with the 
emissions standards for centrifugal compressors, reciprocating 
compressors, pneumatic pumps, and storage vessels; as such, this 
requirement impacts a wide range of sources with respect to their 
ability to show compliance. With the exception of pneumatic pumps, all 
of the equipment mentioned above is covered by the oil and gas NSPS, 
subpart OOOO, that was promulgated in 2012, and have had to demonstrate 
compliance without this certification requirement. While the EPA has 
observed instances of inadequate design and capacities of the closed 
vent system resulting in excess emissions from some storage vessels, 80 
FR 56649, it is not clear how pervasive this issue is, in particular 
with respect to all the other equipment mentioned above. Further, as 
noted by one petitioner, ``no costs associated with the certification 
requirement were considered or provided for review during the proposal 
process.'' \5\ Section 111 of the CAA requires that the EPA consider, 
among other factors, the cost associated with establishing a new source 
performance standard. See 111(a)(1) of the CAA. The statute is thus 
clear that cost is an important consideration in determining whether to 
impose a requirement.
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    \5\ See Docket ID No. EPA-HQ-OAR-2010-0505-7682, p. 1.
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    In finalizing the 2016 Rule, the EPA made clear that it viewed the 
PE certification requirement to be an important aspect of a number of 
performance standards in the rule. The EPA acknowledges that it had not 
analyzed the costs associated with the PE certification requirement and 
evaluated whether the improved environmental performance this 
requirement may achieve justifies the associated costs and other 
compliance burden. Because the emission standards for these various 
equipment (with the exception of the well site pneumatic pump standards 
as discussed later in this notice) will continue to apply during the 
proposed stay of this certification requirement, emission reductions 
from this equipment will continue to be achieved during the stay. For 
the reasons stated above, the EPA believes that it is reasonable to 
stay the requirement for closed vent system certification by 
professional engineer while the EPA evaluates the benefits, as well as 
the cost and other possible compliance burden, associated with this 
requirement.
    In addition to the closed vent system certification requirement, 
there are other issues that we are reconsidering that may further 
complicate a source's ability to comply with the well site pneumatic 
pump standards. Specifically, the 2016 Rule requires certification by a 
professional engineer of technical infeasibility in order for a well 
site pneumatic pump to qualify for an exemption from controlling 
emissions using an existing control or process. The certification 
requirement was included in the 2016 Rule without having been 
previously proposed for notice and comment. Further, the technical 
infeasibility exemption is not available for a well site that is a 
``greenfield'' site, a caveat and term that was also not proposed for 
notice and comment and, as evident from several reconsideration 
petitions, has generated a number of questions and issues.
    As explained above, certification of closed vent systems by a 
professional engineer affects how compliance with various emission 
standards is to be determined. The technical infeasibility exemption 
and the associated certification by professional engineer requirement, 
as well as the ``greenfield'' issues described above, dictate whether a 
source must comply with the emission reduction requirement for well 
site pneumatic pumps. These requirements and their associated issues 
directly impact the ability of a wide range of

[[Page 27648]]

sources, in particular well site pneumatic pumps, to achieve and show 
compliance with their applicable standards. Therefore, the EPA believes 
it is reasonable to stay these requirements pending reconsideration.
    The EPA is proposing to stay the fugitive emissions requirements, 
the well site pneumatic pump standards, and the requirements for 
certification by professional engineer for 2 years. As described above, 
these three requirements entail a wide range of technically complex 
issues. For example, the AMEL provisions involve determining 
equivalency with the fugitive emissions requirements, and the low 
production well site exemption requires determining the factors that 
correlate to fugitive emissions. Further, based on the great interest 
expressed by stakeholders (including states, industry, and 
manufacturers of emerging monitoring technology), in particular on the 
AMEL,\6\ the EPA anticipates receiving a large amount of information 
during the reconsideration proceeding. Also, during the reconsideration 
proceeding the EPA intends to request comment on the cost and other 
compliance burden, among other relevant information, associated with 
the requirement for certification by a professional engineer. In light 
of the above, the EPA believes that two years would provide sufficient 
time to review available information and propose, take public comment, 
and issue a final action on the reconsideration of these issues. The 
administrative reconsideration petitions raise numerous other issues 
relative to the fugitive emission requirements, well site pneumatic 
pump standards, and requirements for certification by professional 
engineer other than those described above. The EPA has also been asked 
clarifying questions on implementation of these requirements from 
stakeholders since the 2016 Rule was published. These questions touch 
on issues such as the timeframe for repair of leaking components, 
timeframe for closed vent system inspection definitions related to 
fugitive emissions and pneumatic pump requirements, definitions of the 
affected facilities, and the temperature waiver for quarterly 
monitoring. Given the breadth of the issues identified in the petitions 
for reconsideration of the 2016 Rule, and the additional implementation 
questions from stakeholders following publication, the EPA believes 
that it is in the public interest that it address these other related 
issues at the same time it reconsiders the fugitive emissions 
requirements, well site pneumatic pumps standards, and the 
certification by professional engineer requirements, thereby avoiding 
addressing these requirements in a piecemeal fashion. The EPA believes 
that staying the specified requirements for two years is necessary to 
provide sufficient time to complete the actions described above.
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    \6\ See e.g., Oil and Natural Gas Sector: Request for 
Information, Emerging Technologies. 81 FR 46670 (July 18, 2016), and 
associated docket EPA-HQ-OAR-2016-0346.
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    Note that we are not taking comment at this time on substantive 
issues concerning these requirements, or on any of the other provisions 
subject to the reconsideration. This notice simply proposes to stay the 
specified requirements for two years. The EPA is seeking comment 
pertaining to this stay and its duration. A separate Federal Register 
notice published in the near future will specifically solicit comment 
on substantive issues concerning these requirements.

III. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is an economically significant regulatory action that 
was submitted to the Office of Management and Budget (OMB) for review. 
Any changes made in response to OMB recommendations have been 
documented in the docket. The EPA prepared a Regulatory Impact Analysis 
(RIA) of the potential costs and benefits associated with the 2016 
Rule, which is available at Docket ID No. EPA-HQ-OAR-2010-0505-7630. As 
this action affects two of the components that were included in the 
costs and benefits estimations, the fugitive requirements and the 
pneumatic pump requirements, as well as only affects three years of 
compliance activity, 2017 through 2019, the cost estimates provided 
here focus only on those affected provisions and years. It should be 
noted that these figures only represent the cost reductions associated 
with these activities. Although there would be foregone benefits as a 
result of this proposed delay, a quantitative estimate of this effect 
is not currently available, and therefore the associated foregone 
benefits are not presented.
    This action delays compliance for fugitive requirements from 
approximately September 2017 until September 2019. In the 2016 rule, 
fugitive components accumulated as affected sources from September 2015 
until June 2017, when all accumulated and new sources moving forward 
had to be in compliance. The previously published three-month stay 
delayed compliance until September 2017. This proposed stay further 
delays compliance so affected components accumulate from September 2015 
through September 2019, after which all accumulated sources and new 
sources moving forward must be in compliance.
    This action also extends the stay for pneumatic pump requirements 
at well sites that was enacted in the three-month stay. Pneumatic pump 
affected facilities at well sites were required to be in compliance 
from November 2016 until June 2017 when EPA issued the three-month 
stay. Newly affected sources accumulate under the initial three-month 
stay starting in June 2017 to September 2017. This proposed stay delays 
compliance until September 2019, after which the accumulated affected 
sources and newly affected sources moving forward must be in 
compliance.
    Costs and benefits for each year after 2019 remain unaffected. 
Using the estimated source counts as presented in Table 3-2 of the 2016 
RIA, the EPA estimated a baseline for the capital costs, annual 
operating and maintenance costs and value of product recovery between 
2017 and 2019 for the two requirements. This baseline accounts for the 
initial three-month stay. Then, the EPA estimated these costs under 
this proposed stay. Total costs for both actions were calculated as 
capital costs plus annual costs minus revenue from product recovery. 
These undiscounted costs are presented in Table 1, below. The 
difference between them, cost savings due to this proposed stay, is 
presented in Table 2. Table 3 presents the total costs, accounting for 
the value of product recovery, and their differences discounted to 2017 
using both a 3 percent and a 7 percent discount rate, the present 
values of these costs, and their equivalent annualized values. The 
equivalent annualized values are the annualized present values, or the 
even flow of the present values, over the three years affected by this 
proposed action. These costs are presented in 2016 dollars.\7\
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    \7\ Careful consideration must be made in comparing these costs 
to those presented in the 2016 RIA. Costs presented in the 2016 RIA 
are costs in 2020 and 2025 and are presented in 2012 dollars. Costs 
presented here are for 2017, 2018 and 2019 and presented in 2016 
dollars, in accordance with OMB Guidance M-17-21 for EO 13771. In 
addition, some of the presented capital costs presented in the 2016 
RIA are annualized values, as are the presented total costs; capital 
costs, and therefore total costs, are not annualized in the analysis 
presented here.

[[Page 27649]]

                                         Table 1--Cost Estimates of the Baseline and This Proposal, Undiscounted
                                                                    [2016$ millions]
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                                              Baseline                                                                     Proposal
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                                                                              Revenue                                             Revenue
                                                    Capital       Annual        from                    Capital       Annual        from
                                                     costs        costs       product    Total costs     costs        costs       product    Total costs
                                                                              recovery                                            recovery
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2017............................................          $43          $61          $11          $92           $3           $0           $0           $3
2018............................................           21          153           28          146            0            0            0            0
2019............................................           21          199           36          184           83          199           36          246
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Note: These costs only account for the fugitive emissions and well site pneumatic pumps requirements. We did not include the costs of professional
  engineer certification because these costs were not accounted for in the 2016 Rule. Values may not sum due to rounding.

            Table 2--Difference of the Cost Estimates of the Baseline and this Proposal, Undiscounted
                                                [2016$ millions]
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                                                                            Difference
                                                 ---------------------------------------------------------------
                                                                                   Revenue from
                                                   Capital costs   Annual costs       product       Total costs
                                                                                     recovery
----------------------------------------------------------------------------------------------------------------
2017............................................            -$40            -$61            -$11            -$89
2018............................................             -21            -153             -28            -146
2019............................................              61               0               0              61
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                                   Table 3--Total Cost Estimates of the Baseline and This Proposal, Discounted to 2017
                                                                    [2016$ millions]
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                                                                     Baseline                        Proposal                       Difference
                                                         -----------------------------------------------------------------------------------------------
                                                                3%              7%              3%              7%              3%              7%
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2017....................................................             $92             $92              $3              $3            -$89            -$89
2018....................................................             142             136               0               0            -142            -136
2019....................................................             174             161             231             214              58              53
Present Value...........................................             408             390             234             217            -173            -172
Equivalent Annualized Value.............................             140             139              80              77             -60             -61
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Note: These costs only account for the fugitive emissions and well site pneumatic pumps requirements. We did not include the costs of professional
  engineer certification because these costs were not accounted for in the 2016 Rule. These total costs account for the value of product recovery.

    The total costs presented here reflect the total capital costs 
estimated for all affected sources in each year, as well as the 
accumulated annual operating and maintenance costs and associated 
product recovery values. The difference in estimated costs between the 
baseline and this proposed action are largely due to the annual 
operating and maintenance that would be incurred in 2017 and 2018 by 
affected components under the baseline that are not incurred under the 
stay. The small cost of this proposal in 2017 is due to the cost of 
compliance for affected pneumatic pumps at well sites before the three-
month stay began. The difference in costs in 2019 is due to the capital 
costs borne by new sources constructed prior to 2019 whose compliance 
was delayed until 2019 under this proposal.
    As can be seen in Table 2, the cost savings of this proposal in 
2017 and 2018, mainly due to forgone annual operating and maintenance 
costs, are slightly offset by the higher costs in 2019, due to the 
larger number of sources that would be incurring capital and annual 
operating and maintenance costs in that year under this proposal. The 
larger costs savings in the early years leads to net cost savings from 
this action. As can be seen in Table 3, the estimated total present 
value of cost savings associated with this proposal are $173 million 
when using a 3 percent discount rate and $172 million when using a 7 
percent discount rate. The equivalent annualized values of the cost 
savings are $60 million per year when using a 3 percent discount rate 
and $61 million per year using a 7 percent discount rate.
    The estimates presented here are made under a few assumptions, 
including:
     The EPA is assuming that no affected entities with 
compliance dates after June 2017 have begun performing compliance 
activities. If some affected entities have already begun performing 
compliance activities, there are associated sunk costs and ongoing 
operating and maintenance costs that should be accounted for in the 
estimates of costs of this proposal; this would reduce the cost savings 
associated with this proposal.
     Affected entities may decide not to delay compliance by 
the full two years because earlier compliance may allow for 
coordination of regulatory and non-regulatory capital work, thus 
minimizing operational downtime. Earlier compliance leads to earlier

[[Page 27650]]

incurrence of annual costs and benefits, which would reduce the cost 
savings associated with this proposed action.
     However, this may also reduce capital costs for those 
entities electing to comply earlier under this proposal--for instance, 
if overtime payments and rush charges can be avoided. This may increase 
the cost savings associated with the proposal.
     The cost of the PE certification was not taken into 
account in the 2016 RIA and therefore the costs of this provision under 
the 2016 rule cannot be compared to the costs under this proposal. The 
inclusion of the costs of this certification would likely increase the 
cost savings under this proposal, as costs related to the 
certifications that would otherwise take place between September 2017 
and September 2019 would no longer be incurred.
     The costs presented here assumes pneumatic pumps become 
affected evenly throughout the year. If more sources become affected in 
the earlier (later) months than is assumed, the associated sunk costs 
will be higher (lower) than presented and cost savings associated with 
this proposal will decrease (increase).
    Given data limitations, the cost estimates related to this action 
have not been adjusted to reflect these analytic considerations. The 
cost estimates also do not reflect any changes in baseline conditions, 
with the exception of the initial three-month stay, since the analysis 
for the 2016 rule was conducted (e.g., new developments in state level 
fugitive emissions programs, technological change, or other factors 
affecting the cost of compliance activities).
    Although the potential existence of sunk costs, voluntary early 
compliance, and changes in baseline assumptions would likely reduce the 
effects of this proposed action to less than the difference shown in 
Table 1, the impact in at least one year is still almost certainly 
greater than $100 million, thus rendering this action economically 
significant under Executive Order 12866.
    The analysis accompanying the 2016 Rule includes estimates of the 
2016 Rule's emission reduction benefits. It should be noted that, just 
as the annual operating and maintenance costs and value of product 
recovery in 2017 and 2018 are not incurred by affected sources under 
the proposal, neither are the associated climate and human health 
benefits. Although there would be foregone benefits as a result of this 
proposed delay, a quantitative estimate of this effect is not currently 
available.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. OMB has previously approved the information collection 
activities contained in the existing 40 CFR part 60, subpart OOOO and 
has assigned OMB control number 2060-0673. The information collection 
requirements in the final 40 CFR 60, subpart OOOOa have been submitted 
for approval to the OMB under the PRA. The Information Collection 
Request (ICR) document prepared by EPA has been assigned EPA ICR 
2523.01. This action does not result in changes to the approved ICR for 
subpart OOOO or the submitted ICR for subpart OOOOa, so the information 
collection estimates of project cost and hour burdens have not been 
revised.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. 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, has no 
net burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This action proposes a limited stay for 
certain requirements. This proposed stay will decrease the burden on 
small entities subject to this rule. The EPA prepared a final RFA 
analysis for the 2016 Rule, which is available as part of the 
Regulatory Impact Analysis in the docket at Docket ID No. EPA-HQ-OAR-
2010-0505-7630. We have therefore concluded that this action will have 
a net negative regulatory burden for all directly regulated small 
entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local or tribal governments or the private sector.

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 national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments, on the relationship between the federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the federal government and Indian tribes, as specified in 
Executive Order 13175. Thus, Executive Order 13175 does not apply to 
this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is subject to Executive Order 13045 because it is an 
economically significant regulatory action as defined by Executive 
Order 12866, and the EPA believes that the environmental health or 
safety risk addressed by this action may have a disproportionate effect 
on children. The basis for this determination can be found in the 2016 
Rule (81 FR 35893). However, because this action merely proposes to 
delay the 2016 Rule, this action will not change any impacts of the 
2016 Rule after the stay. Any impacts on children's health caused by 
the delay in the rule will be limited, because the length of the 
proposed stay is limited. The agency therefore believes it is more 
appropriate to consider the impact on children's health in the context 
of any substantive changes proposed as part of reconsideration.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution or use of energy. The basis for this determination can be 
found in the 2016 Rule (81 FR 35894).

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Because this action merely proposes to delay action and does not 
change the requirements of the final rule, this action will not change 
any impacts of the rule when it is fully implemented. Any impacts on 
minority populations and low-income populations caused by

[[Page 27651]]

the delay in the rule will be limited, because the length of the 
proposed stay is limited. The agency therefore believes it is more 
appropriate to consider the impact on minority populations and low-
income populations in the context of any substantive changes proposed 
as part of reconsideration.

List of Subjects in 40 CFR Part 60

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Reporting and recordkeeping.

    Dated: June 12, 2017.
E. Scott Pruitt,
Administrator.

    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

0
1. The authority citation for part 60 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart OOOOa--[AMENDED]

0
2. Section 60.5393a is amended by:
0
a. Staying paragraphs (b) and (c) until [DATE 2 YEARS AFTER PUBLICATION 
OF FINAL RULE IN THE Federal Register]; and
0
b. Adding paragraph (f).
    The addition reads as follows:

Sec.  60.5393a  What GHG and VOC standards apply to pneumatic pump 
affected facilities?

* * * * *
    (f) Pneumatic pumps at a well site are not subject to the 
requirements of paragraphs (d) and (e) of this section until [DATE 2 
YEARS AFTER PUBLICATION OF FINAL RULE IN THE Federal Register].

Sec.  60.5397a   [AMENDED]

0
3. Section 60.5397a is stayed until [DATE 2 YEARS AFTER PUBLICATION OF 
FINAL RULE IN THE Federal Register].
0
4. Section 60.5410a is amended by:
0
a. Staying paragraphs (e)(2) through (5) until [DATE 2 YEARS AFTER 
PUBLICATION OF FINAL RULE IN THE Federal Register];
0
b. Adding paragraph (e)(8); and
0
c. Staying paragraph (j) until [DATE 2 YEARS AFTER PUBLICATION OF FINAL 
RULE IN THE Federal Register].
    The addition reads as follows:

Sec.  60.5410a   How do I demonstrate initial compliance with the 
standards for my well, centrifugal compressor, reciprocating 
compressor, pneumatic controller, pneumatic pump, storage vessel, 
collection of fugitive emissions components at a well site, collection 
of fugitive emissions components at a compressor station, and equipment 
leaks and sweetening unit affected facilities at onshore natural gas 
processing plants?

* * * * *
    (e) * * *
    (8) Pneumatic pump affected facilities at a well are not subject to 
the requirements of paragraphs (e)(6) and (7) of this section until 
[DATE 2 YEARS AFTER PUBLICATION OF FINAL RULE IN THE Federal Register].
* * * * *
0
5. Section 60.5411a is amended by:
0
a. Revising the introductory text;
0
b. Staying paragraph (d) until [DATE 2 YEARS AFTER PUBLICATION OF FINAL 
RULE IN THE Federal Register]; and
0
c. Adding paragraph (e).
    The revision and addition read as follows:

Sec.  60.5411a   What additional requirements must I meet to determine 
initial compliance for my covers and closed vent systems routing 
emissions from centrifugal compressor wet seal fluid degassing systems, 
reciprocating compressors, pneumatic pumps and storage vessels?

    You must meet the applicable requirements of this section for each 
cover and closed vent system used to comply with the emission standards 
for your centrifugal compressor wet seal degassing systems, 
reciprocating compressors, pneumatic pumps and storage vessels except 
as provided in paragraph (e) of this section.
* * * * *
    (e) Pneumatic pump affected facilities at a well site are not 
subject to the requirements of paragraph (a) of this section until 
[DATE 2 YEARS AFTER PUBLICATION OF FINAL RULE IN THE Federal Register].
0
6. Section 60.5415a is amended by:
0
a. Revising paragraph (b) introductory text and adding paragraph 
(b)(4); and
0
b. Staying paragraph (h) until [DATE 2 YEARS AFTER PUBLICATION OF FINAL 
RULE IN THE Federal Register].
    The revision and addition read as follows:

Sec.  60.5415a   How do I demonstrate continuous compliance with the 
standards for my well, centrifugal compressor, reciprocating 
compressor, pneumatic controller, pneumatic pump, storage vessel, 
collection of fugitive emissions components at a well site, and 
collection of fugitive emissions components at a compressor station 
affected facilities, and affected facilities at onshore natural gas 
processing plants?

* * * * *
    (b) For each centrifugal compressor affected facility and each 
pneumatic pump affected facility, you must demonstrate continuous 
compliance according to paragraph (b)(3) of this section except as 
provided in paragraph (b)(4) of this section. For each centrifugal 
compressor affected facility, you also must demonstrate continuous 
compliance according to paragraphs (b)(1) and (2) of this section.
* * * * *
    (4) Pneumatic pump affected facilities at a well site are not 
subject to the requirements of paragraph (b)(3) of this section until 
[DATE 2 YEARS AFTER PUBLICATION OF FINAL RULE IN THE Federal Register].
* * * * *
0
7. Section 60.5416a is amended by revising the introductory text and 
adding paragraph (d) to read as follows:

Sec.  60.5416a   What are the initial and continuous cover and closed 
vent system inspection and monitoring requirements for my centrifugal 
compressor, reciprocating compressor, pneumatic pump, and storage 
vessel affected facilities?

    For each closed vent system or cover at your storage vessel, 
centrifugal compressor, reciprocating compressor and pneumatic pump 
affected facilities, you must comply with the applicable requirements 
of paragraphs (a) through (c) of this section, except as provided in 
paragraph (d) of this section.
* * * * *
    (d) Pneumatic pump affected facilities at a well site are not 
subject to the requirements of paragraphs (a) and (b) of this section 
until [DATE 2 YEARS AFTER PUBLICATION OF FINAL RULE IN THE Federal 
Register].
0
8. Section 60.5420a is amended by:
0
a. Revising paragraph (b) introductory text;
0
b. Staying paragraphs (b)(7), (8), and (12) until [DATE 2 YEARS AFTER 
PUBLICATION OF FINAL RULE IN THE Federal Register];
0
c. Adding paragraph (b)(13); and
0
d. Staying paragraphs (c)(15) through (17) until [DATE 2 YEARS AFTER 
PUBLICATION OF FINAL RULE IN THE Federal Register].
    The revision and addition read as follows:

[[Page 27652]]

Sec.  60.5420a   What are my notification, reporting, and recordkeeping 
requirements?

* * * * *
    (b) Reporting requirements. You must submit annual reports 
containing the information specified in paragraphs (b)(1) through (8) 
and (12) of this section and performance test reports as specified in 
paragraph (b)(9) or (10) of this section, if applicable, except as 
provided in paragraph (b)(13) of this section. You must submit annual 
reports following the procedure specified in paragraph (b)(11) of this 
section. The initial annual report is due no later than 90 days after 
the end of the initial compliance period as determined according to 
Sec.  60.5410a. Subsequent annual reports are due no later than same 
date each year as the initial annual report. If you own or operate more 
than one affected facility, you may submit one report for multiple 
affected facilities provided the report contains all of the information 
required as specified in paragraphs (b)(1) through (8) of this section, 
except as provided in paragraph (b)(13) of this section. Annual reports 
may coincide with title V reports as long as all the required elements 
of the annual report are included. You may arrange with the 
Administrator a common schedule on which reports required by this part 
may be submitted as long as the schedule does not extend the reporting 
period.
* * * * *
    (13) The collection of fugitive emissions components at a well site 
(as defined in Sec.  60.5430a), the collection of fugitive emissions 
components at a compressor station (as defined in Sec.  60.5430a), and 
pneumatic pump affected facilities at a well site (as defined in Sec.  
60.5365a(h)(2)) are not subject to the requirements of paragraph (b)(1) 
of this section until [DATE 2 YEARS AFTER PUBLICATION OF FINAL RULE IN 
THE Federal Register].
* * * * *
[FR Doc. 2017-12698 Filed 6-15-17; 8:45 am]
 BILLING CODE 6560-50-P