Regulatory Update: New Source Performance Standards for Crude Oil and Natural Gas Facilities
The U.S. Environmental Protection Agency (EPA) published the final rule for crude oil and natural gas facilities on June 3, 2016 for construction, modification, or reconstruction of facilities commenced after September 18, 2015.
The regulation addresses air emissions of methane, volatile organic compounds, and sulfur dioxides from various affected facilities. The effective date of this regulation was August 2, 2016 and the initial monitoring survey to identify fugitive leaks was to be performed by June 3, 2017.
Several parties submitted administrative petitions to EPA seeking reconsideration of the regulation. On June 5, 2017, the EPA issued a 90-day stay on specific portions of the rule while these items undergo reconsideration.
- the fugitive emissions requirements
- the decision to regulate low-production wells
- the process for proving compliance by "alternative means"
- the requirement that a professional engineer certify proper design of vent systems
- the decision to exempt pneumatic pumps from regulation only if a professional engineer certified that it was "technically infeasible" to route such pumps "to a control device or a process"
In addition, on June 13, 2017, EPA issued a pre-publication proposed rule that would grant a two-year stay on the effective date of the same specific portions of the regulation.
Several environmental groups filed an emergency motion in the U.S. Court of Appeals D.C. Circuit for a stay or summary vacatur of EPA's 90-day stay. On July 3, 2017, the Court granted the petitioners' motion and vacated the EPA's 90-day stay. Thus, any affected facility that has not already performed the initial monitoring by June 3, 2017 is currently out of compliance with the regulation.
On July 13, 2017, the Court granted a recall of the mandate for a period of 14 days or July 27, 2017. This was to allow the EPA time to determine whether they will seek relief. After a review by the full Court, nine of the 11 judges issued a ruling on July 31, 2017 that the EPA unlawfully tried to delay implementing the rule. Although the legal process could continue to the Supreme Court, the compliance dates of the original final rule are still applicable to affected facilities.