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The world’s leading sustainability consultancy
Air Quality and Greenhouse Gas Issues for the Oil and Gas SectorERM 2015 Webinar Series
September 10, 2015
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2The world’s leading sustainability consultancy
2The world’s leading sustainability consultancy
Agenda
The High Level View
Voluntary Methane Challenge
NSPS/CTG
Tribal NSR
Source Determination
Path from Here
Q&A Session
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3The world’s leading sustainability consultancy
3The world’s leading sustainability consultancy
The Growing Weight of Compliance
GAS PLANT CTG/RACT FOR EQUIPMENT LEAKS; MACT STANDARDS (HH, HHH);
SOURCE DETERMINATION/AGGREGATION FOR PERMITTING
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4The world’s leading sustainability consultancy
4The world’s leading sustainability consultancy
The Growing Weight of ComplianceGAS PLANT CTG/RACT FOR EQUIPMENT LEAKS
MACT STANDARDS (HH, HHH)SOURCE DETERMINATION/AGGREGATION FOR PERMITTING
NATURAL GAS STARGREENHOUSE GAS REPORTING SUBPART W
NSPS SUBPART OOOO FOR VOCNSPS SUBPART OOOOa FOR VOC AND METHANE
OIL AND GAS PRODUCTION CTG/RACTNATURAL GAS STAR METHANE CHALLENGE
TRIBAL NSR/FIP
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5The world’s leading sustainability consultancy
5The world’s leading sustainability consultancy
August 18, 2015EPA Administrator Signed: Proposed modifications to NSPS Subpart OOOO
Proposal for new NSPS Subpart OOOOa
Proposed rule to clarify EPA’s source determination air permitting rules as they apply to the oil and natural gas industry
Proposed a Federal Implementation Plan for EPA’s Indian Country Minor New Source Review (NSR) program for oil and gas production sources
Draft Control Techniques Guidelines for reducing VOC emissions from existing oil and gas sources in certain ozone nonattainment areas and states in the Ozone Transport Region
Gas and Oil WellsCompressorsFugitive Components
NSPS – CTGs – Tribal NSR – Source Determination – Methane Challenge
Equipment: wells, pneumatics, flares, control equipment Re-design/approach: monitoring equipment (IR cameras, sampling)Existing (retrofits) vs New
Check Gaps (vulnerability)Influence rule languageField trial of proposed methods (leaks: is it do-able?)Evaluate alternatives (voluntary programs)Look-ahead: future impacts?
Actions
Operational Expenses
Capital Expenses
Operational Change
People: training, skillsets, MOC challengesEquipment Upgrades: records, reports, data systemsExternal Stakeholders: Agencies, NGOs, neighbors/publicLicense to Operate: Violation, Risk
Pneumatic EquipmentStorage VesselsControl Devices
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Natural Gas STAR Methane ChallengeLisa Campbell
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8The world’s leading sustainability consultancy
8The world’s leading sustainability consultancy
Methane Challenge: Summary of action
Methane Challenge – companies make commitments to voluntarily reduce methane emissions: Implement Best Management Practices (BMPs) ‘company-wide’
One Future Program emissions intensity commitment
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9The world’s leading sustainability consultancy
9The world’s leading sustainability consultancy
Methane Challenge: What can you do about it?
AssessImpacts
• Assess baseline and impacts of options• What is current status of CI or sources?• What are the reduction options vs cost / operational impacts?
• Assess baseline and impacts of options• What is current status of CI or sources?• What are the reduction options vs cost / operational impacts?
Advocate
• Provide comments to EPA by Oct 13, 2015• What is company interest in participating?• What incentives, etc. are recommended?
• Provide comments to EPA by Oct 13, 2015• What is company interest in participating?• What incentives, etc. are recommended?
SetPriorities
• Prepare MOU• What are costs vs benefits of participation?• What are priorities and tradeoffs?
• Prepare MOU• What are costs vs benefits of participation?• What are priorities and tradeoffs?
AdaptProcedures
• Prepare Implementation Plan• How can existing systems be adapted to meet needs?• How can voluntary and compliance activities be integrated for efficiency?
• Prepare Implementation Plan• How can existing systems be adapted to meet needs?• How can voluntary and compliance activities be integrated for efficiency?
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NSPS/CTGAndy Woerner
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11The world’s leading sustainability consultancy
11The world’s leading sustainability consultancy
NSPS/CTG: Summary of action
• Amended in response to petitions for reconsideration• Applicability: Sources constructed/ modified/ reconstructed prior to
proposal date of Subpart OOOOa (September x, 2015)
Proposed NSPS Subpart OOOO Updates
• Regulates Methane in addition to regulating VOC• New source categories (not covered under OOOO)• More sources in Transmission and Storage Segment covered
Proposed NSPS Subpart OOOOa
• CTGs: EPA’s Guidelines to state, local and tribal air agencies to assist in determining RACT for reducing VOC emissions
• Addresses O&G industry emission sources in Non-Attainment Areas• Provides model rule language – in most cases mirrors NSPS OOOOa
Draft Control Techniques Guidelines (CTG)
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12The world’s leading sustainability consultancy
CTG vs. NSPS OOOOa - Distinctions
CTGs NSPSApplicability Existing O&G sources in
Moderate or higher non-attainment areas of ozone, and ozone transport region
Applies nationally to new, modified, and reconstructed
emissions sources
Regulated Pollutant
Addresses VOC only Proposes regulation of both methane and VOC
Level of Control Addresses RACT NSPS requires BSER
Regulatory Authority
Final rule-making authority is with state/local agency
NSPS is prescriptive and federally enforceable
Transmission & Storage Covered?
Tanks Only… Yes
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13The world’s leading sustainability consultancy
13The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN ! Out!
Well Completions - VOC
NSPS OOOO Applicability
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14The world’s leading sustainability consultancy
14The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN ! Out!
Well Completions – VOC and Methane
NSPS OOOOa Applicability
Expansion to cover Oil Wells Technical Feasibility Considerations…
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15The world’s leading sustainability consultancy
15The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN !
Out!Out!
Compressors - VOC
NSPS OOOO Applicability
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16The world’s leading sustainability consultancy
NSPS OOOOa Applicability
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN !
Out!
Compressors – VOC and Methane
Requirements SameScope of Sources Covered Expanded
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17The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN !
Out!
Pneumatic Controllers - VOC
NSPS OOOO Applicability
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18The world’s leading sustainability consultancy
NSPS OOOOa Applicability
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN !
Pneumatic Controllers – VOC and Methane
Requirements Same No high bleed, zero bleed at ProcessingScope of Sources Covered Expanded
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19The world’s leading sustainability consultancy
19The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
Storage Tanks - VOC
IN !
NSPS OOOO Applicability
Significant Updates to CVS and Control Device Compliance Demonstration Requirements…
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20The world’s leading sustainability consultancy
20The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
Storage Tanks - VOC
IN !
NSPS OOOOa Applicability
Significant Updates to CVS and Control Device Compliance Demonstration Requirements…
21The world’s leading sustainability consultancy
21The world’s leading sustainability consultancy
21The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN !
Out!Out!
Leak Detection and Repair – VOC
NSPS OOOO Applicability
“Traditional” LDAR @ Processing facilities…
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22The world’s leading sustainability consultancy
22The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
IN !
Leak Detection and Repair – VOC and Methane
NSPS OOOOa Applicability
Different requirements inside vs. outside of Processing facilities…
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23The world’s leading sustainability consultancy
23The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
Pneumatic Pumps – Not Applicable
Out!
NSPS OOOO Applicability
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24The world’s leading sustainability consultancy
24The world’s leading sustainability consultancy
Onshore Natural Gas Transmission Compression
Underground Natural Gas Storage
City Gate
Onshore Natural Gas Processing
Gathering Booster Stations
Onshore Oil & Natural Gas Production
Pneumatic Pumps – VOC and MethaneNSPS OOOOa Applicability
IN !
Control if control device already present…Processing facilities – use zero bleed
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25The world’s leading sustainability consultancy
25The world’s leading sustainability consultancy
NSPS/CTG: Important Considerations (1)
Regulation of Methane under NSPS opens up the door for future methane regulations for existing sources under 111(d) Consider legal argument Assessment of EPA”s use of Social Cost of Methane
Proposed NSPS addresses Methane, not other GHGs (CO2 etc.) Does regulation of methane under NSPS have any ramifications
from a GHG (minor or major source) permitting standpoint?
Treatment of Transmission and Storage Segments
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Significant increase in source categories covered Will the industry face a serious resource crunch? Would training and retaining skilled operators be a challenge?
Retrofit costs and technical feasibility Pneumatic pumps requiring routing to existing on-site control devices
Equipment leaks What triggers a Modification?
Additional recordkeeping and reporting requirements How does this compare relative to current activity? Changes to SOPs for voluntary, state-level programs?
NSPS/CTG: Important Considerations (2)
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27The world’s leading sustainability consultancy
Understand the potential impacts on Business Capital Costs Resource Burden
Leak Detection Critical Assessment of Existing LDAR program Outline elements of a system fit for purpose for your operations
Closed Vent Systems and Control Devices Tying in Pneumatic Pumps – Technical Issues? Tank Controls - Assess existing design relative to proposed changes Cost, Availability of technology to bring up to speed? Accuracy required for instrumentation (flow meters)
NSPS/CTG: Assessing Impacts
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Tribal NSRRyan Alam
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29The world’s leading sustainability consultancy
29The world’s leading sustainability consultancy
Tribal NSR: Overview of Proposed Rulemaking 8/18/15 USEPA proposed rulemaking to streamline minor NSR
permitting for O&G sources in “Indian Country”
Rulemaking consists of 2 parts: New FIP registration process for new true minor sources and minor
modifications at existing true minor sources Harmonizing amendments with existing minor NSR rule in §49.151 et seq.
Applies to “oil and natural gas production facility” that begin construction/modification on or after 10/3/16
New FIP establishes pre-construction registration process (30 days prior)
Incorporate by reference 6 federal rules: NESHAP DDDDD, NESHAP HH, NSPS Kb, NSPS IIII, NSPS JJJJ, and NSPS OOOOa
Extends existing O&G source permitting deadline from 3/2/16 to 10/3/16
Maintains option to pursue site-specific permits per §49.151 et seq.
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30The world’s leading sustainability consultancy
Tribal NSR: Potential Implications for New FIP Establishes pre-construction registration process as
opposed to post-construction process. PTE not known before completion and initial well test
Not applicable for sources in non-attainment areas (e.g. Uinta)
Does not provide any streamlined mechanism for obtaining synthetic minor permits for PSD/NNSR, T5, MACT, NSPS (OOOO/OOOOa tank 6 TPY) avoidance
USEPA retains ability to require site-specific permits to ensure protection of NAAQS
Does not cover natural gas processing plants
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Source DeterminationKevin Madry
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PurposeTo request comment on the best approach to define “adjacent” when identifying a major source in EPA permit programs for the onshore oil and natural gas sector.
• Case-by-case
1977-2007
• Proximity via guidance
• Withdrew guidance
2007-2009 • Florida River – not enough aggregation
• Summit Petroleum –too much aggregation
• EPA Regional guidance: case-by-case unless court says otherwise
2009-2015
History…
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Definition of Stationary Source
Only taking comments on the definition of adjacent
Share same SIC code
Under common control
Contiguous and or adjacent
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Affected Regulations
NSR (NNSR and PSD)Change: “Building, structure, facility or
installation” definition
Part 51- Requirements for Preparation, Adoption and Submittal of Implementation Plans
Part 52- Approval and Promulgation of Implementation Plans
Stationary source: “…any building…”“Building, structure…”: “…same industrial grouping…one or more contiguous and adjacent properties…”
Title VChange: “Major Source” definition
Part 70- State Operating Permit Programs
Part 71- Federal Operating Permit Programs
Major Source: “…any stationary source (or any group of stationary sources that are located on one or more contiguous or adjacentproperties…”
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35The world’s leading sustainability consultancy
Affected Processes/Equipment
Affected Processes- SIC code 13 Only applies to onshore oil
and gas operations
From well to point of custody transfer (oil) or customer (gas)
Does not include offshore
Does not include downstream operations
Production
• Wells• Pumps• Compressors• Separators• Tanks• Vessels• Pneumatic
devices• Dehydrators• Gathering lines
Processing
• Natural gas processing plants
• Liquid extraction plants
1st Option: Proximity (Similar to NESHAP)
2nd Option: Proximity & Functional Interrelatedness
Everything within a
proximity distance.
Everything within a
proximity distance.
OR
Everything greater than or
equal to a proximity distance.
And there is exclusive functional
interrelatedness
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37The world’s leading sustainability consultancy
Considerations Appropriate distance?
Measurement of appropriate distance?
Final implementation method?
Does this preclude daisy-chaining?
Other viable options: only equipment/operations within proximity distance that is functionally interrelated?
Overlapping facilities
Ability to “opt-in” equipment/operations?
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38The world’s leading sustainability consultancy
38The world’s leading sustainability consultancy
What should you do now?
Assess potential impact - evaluate scenarios
Consider future implications –expansion, mergers, acquisitions
Consider local/state impact –aligned?
Look at examples of aggregated source regulations
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Wrap-up
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The Road Ahead
Evaluate and Communicate Overall Impacts
Submit Comments
Capital Project Planning/Review
Pilot and Develop Compliance Programs LDAR
Testing and Monitoring
Prepare for Enforcement
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Q&A Session
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42The world’s leading sustainability consultancy
42The world’s leading sustainability consultancy
Contact Information
Toby HannaEwing, [email protected]
Andy WoernerPhiladelphia/Pittsburgh, [email protected]
Phil NorwoodRaleigh, [email protected]
Lisa CampbellRaleigh, NC [email protected]
Leslie WongHouston, [email protected]
Sid Rajmohan Houston, TX832-730-1056 [email protected]
Kevin MadryDenver, [email protected]
Ryan AlamDenver, CO [email protected]
Today’s Speakers and additional contacts: