Document ID: EPA-HQ-OAR-2010-0505-7735
Agency: epa
Document Type: Rule
Title: Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources; Grant of Reconsideration and Partial Stay
Posted Date: 2017-06-05T04:00Z

[Federal Register Volume 82, Number 106 (Monday, June 5, 2017)]
[Rules and Regulations]
[Pages 25730-25734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11457]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2010-0505; FRL-9963-40-OAR]
RIN 2060-AT63

Oil and Natural Gas Sector: Emission Standards for New, 
Reconstructed, and Modified Sources; Grant of Reconsideration and 
Partial Stay

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of reconsideration and partial stay.

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SUMMARY: By a letter dated April 18, 2017, the Administrator announced 
the convening of a proceeding for reconsideration of the fugitive 
emission requirements at well sites and compressor station sites in the 
final rule, ``Oil and Natural Gas Sector: Emission Standards for New, 
Reconstructed, and Modified Sources,'' published in the Federal 
Register on June 3, 2016. In this action, the Environmental Protection 
Agency (EPA) is granting reconsideration of additional

[[Page 25731]]

requirements in that rule, specifically the well site pneumatic pumps 
standards and the requirements for certification by professional 
engineer. In addition, the EPA is staying for three months these rule 
requirements pending reconsideration.

DATES: This final rule is effective June 2, 2017. The action granting 
reconsideration is effective June 2, 2017. The stay of Sec. Sec.  
60.5393a(b) through (c), 60.5397a, 60.5410a(e)(2) through (5) and (j), 
60.5411a(d), 60.5415a(h), 60.5420a(b)(7), (8), and (12), and (c)(15) 
through (17) is effective from June 2, 2017, until August 31, 2017.

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.
    Electronic copies of this document are available on EPA's Web site 
at https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry. Copies of this document are also available at https://www.regulations.gov, at Docket ID No. EPA-HQ-OAR-2010-0505.

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,'' 81 FR 35824 (June 3, 2016) (``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 
station sites (``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).
    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 Clean 
Air Act (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. Under 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. In either case, the 
Administrator must also conclude that 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.
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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 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 applicability of the fugitive emissions 
requirements to low production well sites, and (2) 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.
    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, the final rule differs significantly 
from what was proposed in that it requires these well sites to 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''). It was therefore impracticable 
to object to this new rationale during the public comment period.
    The AMEL process and criteria were included in the 2016 Rule 
without having been proposed for notice and comment. The EPA added the 
AMEL provisions in the final rule with the intent of, among other 
goals, reducing compliance burdens for those sources that may already 
be reducing fugitive emissions in accordance with a state requirement 
or other program that is achieving reductions equivalent to those 
required by the 2016 Rule. These AMEL provisions were also added to 
encourage the development and use of innovative technology, in 
particular for fugitive emissions monitoring. 81 FR 35861. However, 
issues and questions raised in the administrative petitions for 
reconsideration (e.g., who can apply for and who can use an approved 
AMEL) suggest that sources may have difficulty understanding and 
applying for AMEL.
    Both issues described above, which relate directly to whether 
certain sources must implement the fugitive emissions requirements, are 
of central relevance to the outcome of the 2016 Rule for the reasons 
stated below. Fugitive emissions are a significant source of emissions 
for many industries, and the EPA has promulgated numerous NSPS 
specifically for reducing fugitive emissions, including 40 CFR part 60, 
subpart KKK (addressing VOC leaks from on-shore natural gas processing 
plants), as standalone rules. The fact that the EPA chose here to 
promulgate the well site and compressor station fugitive emissions 
requirements along with other standards in the 2016 Rule does not make 
these requirements any less important than the other fugitive emissions 
standards; rather, because of their importance, they are a significant 
component of the 2016 Rule. The issues described above are important as 
they determine the universe of affected facilities that must implement 
the fugitive emission requirements; as such, they are of central 
relevance to the outcome of the 2016 Rule. As stated in the April 18, 
2017, letter, the EPA has convened an administrative proceeding for the 
reconsideration of the fugitive emissions requirements in response to 
these two objections.

II. Grant of Reconsideration of Additional Issues

    Since issuing the April 18, 2017, letter, the EPA has 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, and (2) the well site pneumatic 
pump standards.

A. Requirements for Certification of Closed Vent System by Professional 
Engineer

    For closed vent systems used to comply with the emission standards 
for

[[Page 25732]]

various equipment used in the oil and natural gas sector, the 2016 Rule 
requires certification by a professional engineer (PE) 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 
(``PE certification requirement''). Several petitioners for 
administrative reconsideration assert that the PE certification 
requirement was not proposed for notice and comment.\2\ One petitioner 
notes that no costs associated with obtaining such certification were 
considered or provided for review during the proposal process.\3\ The 
petitioner claims that there is no quantifiable benefit to the 
environment from this additional compliance demonstration requirement, 
while there is significant expense involved.\4\
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    \2\ See Docket ID No. EPA-HQ-OAR-2010-0505-7682 and Docket ID 
No. EPA-HQ-OAR-2010-0505-7686.
    \3\ See Docket ID No. EPA-HQ-OAR-2010-0505-7682.
    \4\ Id.
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    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. 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 that rule. The EPA acknowledges 
that it had not analyzed the costs associated with the PE certification 
requirement; therefore, it was impracticable for petitioners to provide 
meaningful comments during the comment period on whether the improved 
environmental performance this requirement may achieve justifies the 
associated costs and other compliance burden. This issue is of central 
relevance to the outcome of the 2016 Rule because the rule requires 
this PE certification for demonstrating compliance for a number of 
different standards, including the standards for centrifugal 
compressors, reciprocating compressors, pneumatic pumps, and storage 
vessels. For the reasons stated above, the EPA is granting 
reconsideration of the PE certification requirement.

B. Technical Infeasibility Determination (Well Site Pneumatic Pump 
Standards)

    In the 2016 Rule, the EPA exempts a pneumatic pump at a well site 
from the emission reduction requirement if it is technically infeasible 
to route the pneumatic pump to a control device or a process. 81 FR 
35850. However, the rule requires that such technical infeasibility be 
determined and certified by a ``qualified professional engineer'' as 
that term is defined in the final rule. During the proposal stage, the 
EPA did not propose or otherwise suggest exempting well site pneumatic 
pumps from emission control based on such certification. In fact, the 
technical infeasibility exemption itself was added during the final 
rule stage. Further, this certification requirement differs 
significantly from how the EPA has previously addressed another 
``technical infeasibility'' issue encountered by this industry. 
Specifically, the oil and gas NSPS subpart OOOO, which was promulgated 
in 2012, exempts hydraulically fractured gas well completions from 
performing a reduced emission completion (REC) if it is not technically 
feasible to do so, and requires documentation and recordkeeping of the 
technical infeasibility. See 40 CFR 60.5375. The 2016 Rule extends the 
REC requirement and associated technical infeasibility exemption to 
hydraulically fractured oil well completions and requires more detailed 
documentation of technical infeasibility. Neither subpart OOOO nor the 
2016 Rule require that REC technical infeasibility be certified by a 
qualified professional engineer, nor was such requirement proposed or 
otherwise raised during the public comment period for these rules. In 
light of the fact that the EPA had not proposed such certification 
requirement for pneumatic pumps, and how this requirement differs from 
the EPA's previous treatment of a similar issue as described above, one 
could not have anticipated that the 2016 Rule would finalize such 
certification requirement for pneumatic pumps in the 2016 Rule. 
Further, believing that ``circumstances that could otherwise make 
control of a pneumatic pump technically infeasible at an existing 
location can be addressed in the site's design and construction,'' the 
EPA does not allow such exemption for new developments in the 2016 
Rule. 40 CFR 60.5393a(b)(5); see also, 81 FR 35849. The 2016 Rule 
refers to such new developments as ``greenfield,'' which is defined as 
an ``entirely new construction.'' 40 CFR 60.5430a.
    The provisions described above were included in the 2016 Rule 
without having been proposed for notice and comment, and numerous 
related objections and issues were raised in the reconsideration 
petitions. With respect to the requirement that technical infeasibility 
be certified by a professional engineer, petitioners raised the same 
issues as those for closed vent system certification discussed in 
section II.A. In addition, several petitions find the definition of 
greenfield unclear. For example, one petitioner questions whether the 
term ``new'' as used in this definition is synonymous to how that term 
is defined in section 111 of the CAA. Additional questions include 
whether a greenfield remains forever a greenfield, considering that 
site designs may change by the time that a new control or pump is 
installed (which may be years later). Petitioners also object to EPA's 
assumption that the technical infeasibility encountered at existing 
well sites can be addressed when ``new'' sites are developed. The 
issues described above dictate whether one must achieve the emission 
reduction required under the well site pneumatic pump standards, which 
were a major addition to the existing oil and gas NSPS regulations 
through promulgation of the 2016 Rule. Therefore, these issues are of 
central relevance to the outcome of the 2016 Rule.
    As announced in the April 18, 2017, letter, and as further 
announced in this document, the Administrator has convened an 
administrative reconsideration proceeding. As part of the proceeding, 
the EPA will prepare a notice of proposed rulemaking that will provide 
the petitioners and the public an opportunity to comment on the rule 
requirements and associated issues identified above, as well as those 
for which reconsideration was granted in the April 18, 2017, letter. 
During the reconsideration proceeding, the EPA intends to look broadly 
at the entire 2016 Rule. For a copy of this letter and the 
administrative reconsideration petitions, please see Docket ID No. EPA-
HQ-OAR-2010-0505.

III. Stay of Certain Provisions

    By this document, in addition to the grant of reconsideration 
discussed in section II above, the EPA is staying the effectiveness of 
certain aspects of the 2016 Rule for three months pursuant to section 
307(d)(7)(B) of the CAA pending reconsideration of the requirements and 
associated issues described above and in the April 18, 2017, letter. 
Specifically, the EPA is staying the effectiveness of the fugitive 
emissions requirements, the standards for pneumatic pumps at well 
sites, and the certification by a professional engineer requirements. 
As explained above, the low production well sites and AMEL issues under 
reconsideration determine the universe of sources that must implement 
the fugitive emissions requirements. The

[[Page 25733]]

2016 Rule requires compliance with the closed vent system requirements, 
including certification by a professional engineer, in order to meet 
the emissions standards for a wide range of equipment (centrifugal 
compressors, reciprocating compressors, pneumatic pumps, and storage 
vessels); therefore, the issues relative to closed vent certification 
affect the ability of these equipment to comply with the 2016 Rule. 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. In light of the 
uncertainties these issues generate regarding the application and/or 
implementation of the fugitive emissions requirements, the well site 
pneumatic pumps standards and the certification by professional 
engineers requirements, the EPA believes it is reasonable to stay the 
effectiveness of these requirements in the 2016 Rule, pending 
reconsideration. Therefore, pursuant to section 307(d)(7)(B) of the 
CAA, the EPA hereby stays the effectiveness of these requirements for 
three months.
    This stay will remain in place until August 31, 2017.

List of Subjects in 40 CFR Part 60

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

    Dated: May 26, 2017.
E. Scott Pruitt,
Administrator.

0
For the reasons cited in the preamble, title 40, chapter I of the Code 
of Federal Regulations is 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) from June 2, 2017, until August 31, 
2017; 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 paragraph (d) and (e) of this section from June 2, 
2017, until August 31, 2017.

Sec.  60.5397a   [Amended]

0
3. Section 60.5397a is stayed from June 2, 2017, until August 31, 2017.

0
4. Section 60.5410a is amended by:
0
a. Staying paragraphs (e)(2) through (5) from June 2, 2017, until 
August 31, 2017;
0
b. Adding paragraph (e)(8); and
0
c. Staying paragraph (j) from June 2, 2017, until August 31, 2017.
    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 (e)(6) and (7) of this section from June 2, 2017, 
until August 31, 2017.
* * * * *

0
5. Section 60.5411a is amended by:
0
a. Revising the introductory text;
0
b. Staying paragraph (d) from June 2, 2017, until August 31, 2017; 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 from June 
2, 2017, until August 31, 2017.

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) from June 2, 2017, until August 31, 2017.
    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 paragraphs (b)(3) of this section from 
June 2, 2017, until August 31, 2017.
* * * * *

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 
from June 2, 2017, until August 31, 2017.

0
8. Section 60.5420a is amended by:
0
a. Revising paragraph (b) introductory text;
0
b. Staying paragraphs (b)(7), (8), and (12) from June 2, 2017, until 
August 31, 2017;
0
c. Adding paragraph (b)(13); and
0
d. Staying paragraphs (c)(15) through (17) from June 2, 2017, until 
August 31, 2017.
    The revision and addition read as follows:

[[Page 25734]]

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 from June 2, 2017, until August 31, 2017.
* * * * *
[FR Doc. 2017-11457 Filed 6-2-17; 8:45 am]
 BILLING CODE 6560-50-P