The document discusses increasing air quality regulations from the EPA that are affecting oil and gas development. The EPA's New Source Performance Standards (NSPS OOOO) target volatile organic compound (VOC) emissions from oil and gas sources and require controls like green completions, compressor controls, and limits on storage vessels and pneumatic controllers. Other regulations address emissions reporting and may require carbon capture and storage if a project exceeds major source thresholds. While challenges exist in keeping up with changing rules, opportunities also arise in natural gas production and enhancing oil recovery through carbon sequestration.

1. Air Quality Compliance Affecting Oil
and Gas Development
Jay Christopher,
Business Unit Manager, Air & Process Services
July 9, 2013

2. The more you explain it, the more I
don’t understand it.
‐Mark Twain

3. Air Regulatory Issues
 The current regulatory environment is getting
more stringent
 Federal EPA regulations (NSPS OOOO, aka Quad O)
aimed at oil & gas operations impact some
enhanced CO2 operations
 Major air emission source permitting must
address CO2e emissions
 CO2e emission inventories include enhanced oil
recovery and sequestration projects
Let’s talk about these …

4. EPA’s New Source Performance Standards,
Subpart OOOO (aka NSPS Quad O)
 Applicable to Crude Oil and Natural Gas
Production, Transmission and Distribution
 Final rule published August 16, 2012
 Affects many activities after August 23, 2011
 Targets VOC emissions, not methane
 Natural gas focused, but not exclusively

5. Well site
• Completions
• Storage
Vessels
• Pneumatics
Gathering
Booster
Facilities
• Storage
Vessels
• Pneumatics
• Compressors
Natural Gas
Plants
• Storage
Vessels
• Pneumatics
• Compressors
• LDAR
• SO2
Natural Gas
Transmission
Compression
• Storage
Vessels
Underground
Natural Gas
Storage
• Storage
Vessels
To
Distribution
What is Covered Under NSPS OOOO?

6. NSPS
Applicability
Date
August 23,
2011
April 17,
2012
August 16,
2012
October 15,
2012
October 15,
2013
January 1,
2015
July 2015 October 15,
2015
EPA
Administrator
signs Final
Rule
Final Rule
Published
> Oil and Gas Production Facilities
> Gas wells – combustion
> Hydraulic Fracturing – record
keeping and recording
> Natural Gas Processing Plants
> Centrifugal and reciprocating
compressors
> NG pneumatic controllers
> Equipment leaks
> Sweetening Units
> Storage Vessels
> NG pneumatic controllers
between wellhead and gas
processing plant
Gas wells –
Phase II (RECs)
Equipment
leaks at
existing gas
plants
(NESHAP)
Glycol
dehydration
units at
existing
sources
(NESHAP)

7. Primary Impacts from Quad O
 Natural Gas Production
 Hydraulic Fracturing ‐
Green Completions
 Oil and/or Natural Gas
 Compressors (centrifugal
‐ wet seal controls;
reciprocating ‐ rod
packing replacement)
 Pneumatic controllers
(zero bleed at gas plants,
low bleed everywhere
else)
 Storage vessels (controls
if emit > 6 tons
VOCs/year)
Also, significant
recordkeeping and
reporting requirements.
Gas Plants (tighter LDAR
requirements)

8. Quad O – Storage Tank Reconsideration
 EPA recently proposed to “reconsider” storage
tank control requirements
 EPA accepted industry comments that EPA
significantly underestimated the number of effected
storage tanks
 Proposed April 2013, expect to finalize July 2013
(before current August 2013 compliance deadline)
 Group 1 (between August 23, 2011 and April 12, 2013) –
register, but no controls (unless production changes affecting
the tank)
 Group 2 (after April 12, 2013) – controls by April 15, 2014 (or
60 days after startup if later)

9. Other Air Regulations
 EPA Power Plant NSPS Rule – although it most directly
impacts coal‐fired power plants, the indirect affect is to
promote carbon capture / sequestration.
 Colorado’s proposed Regulation 7 changes – will
impose Quad O‐type requirements on all oil & gas
sources statewide (well pad LDAR/camera; compressor
LDAR, presumptive BACT control requirements). Likely
to be finalized by end of 2013. Will other states
follow?
 California Senate Bill 34 (pending) – would require
California Air Resources Board to regulate CO2 EOR
projects used for carbon sequestration

10. Air Permitting and CO2
 CO2 is an “air pollutant” (U.S. Supreme Court;
Massachusetts vs. EPA, 2007)
 EPA “Endangerment Finding” – 2009 (“greenhouse
gases in the atmosphere may reasonably be anticipated both to
endanger public health and to endanger public welfare”)
 Automobile tailpipe emission standards (once
CO2 was regulated as a pollutant under the Clean
Air Act, permitting requirements could be
established).
So how does this affect us?

11. Major Source Air Permitting
 EPA’s “Tailoring Rule”
 Since Clean Air Act major source permitting
thresholds (100 tons/year of pollutants) would result
in “absurd results” if applied to CO2 (EPA’s words), EPA
established a 25,000 tons/year threshold for CO2.
 Projects that are major for CO2 must consider Best
Available Control Technology (BACT), specifically
including carbon capture and sequestration (CCS).
 EPA acknowledges that CCS is not “mature” and most
CO2 BACT to date has focused on energy efficiency.

12. CO2 Emissions Reporting
 EPA’s Mandatory Reporting Rule
 Subpart W for oil and gas sources
 Subpart UU for enhanced oil recovery
 Subpart RR for geologic sequestration
 Electronic reporting due every March for prior
calendar year
 Testing, source counting, data capture,
emission factors; much recordkeeping

13. Air Regulatory Challenges
 Keeping up with the new regulations as well
as on‐going changes to the regulations
 Developing state and/or local requirements

14. Are There Opportunities?
 Will the President’s recently announced
Climate Action Plan present opportunities to
the industry?
 The continued focus on coal may provide:
 More opportunities for natural gas
 Opportunities to support coal plants to CCS or
EOR
 Energy Secretary Moniz expects EOR rates to grow from
300,000 BPD to 3,000,000 BPD, much of it from
capturing coal power plant CO2 emissions.

15. White House Policy on Climate Change
 Three weeks ago, President Obama presented his view
of changes that should be made regarding climate
change.
 The official policy is largely silent regarding the petroleum
industry.
 “Sometimes there are disputes about natural gas, but let
me say this: We should strengthen our position as the top
natural gas producer because, in the medium term, at
least, it not only can provide safe cheap power, but it can
also help reduce our carbon emissions.”
 Continue effort to eliminate “tax breaks”
 Keystone XL – approve only if the Pipeline does not
exacerbate GHG emissions.

16. If you ask me anything I don’t know, I’m
not going to answer.
‐Yogi Berra
Questions?

17. Contact Information:
Jay Christopher
jchristopher@trihydro.com
307/745‐7474