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Climate Change Hero

Climate Change Blog

  • 13
  • June
  • 2016

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Preparing for the New Rules for Fugitive Emissions at Well Sites

On June 3, 2016 EPA published a final New Source Performance Standards (NSPS) for methane and VOC emissions from the oil and gas sector (known as “Quad Oa”). This is the second in a series of posts discussing the new requirements. This post outlines steps that upstream companies may want to consider now that Quad Oa is taking effect. More information about the requirements is available here.

What are the new leak detection and repair requirements for well sites?

Quad Oa regulates the fugitive emissions from new or modified well sites. While the proposed rule would have exempted low production well sites (well sites where the average combined oil and natural gas productions is less than 15 barrels of oil equivalent (boe) per day), the final rule applies to all well sites, regardless of the level of production. Operators must create a leak detection and repair (LDAR) program designed to identify and fix gas leaks, and must conduct an initial LDAR survey within 60 days of the start-up of production. After the initial survey, operators must conduct additional surveys twice a year, at least four months apart from each other.

Following a survey, operators must replace or repair the sources of any detected fugitive emissions “as soon as practicable, but no later than 30 calendar days after detection,” unless the leak would be unsafe to repair or would require shutting down production, which could lead to significantly greater emissions releases. In that case, the leak must be fixed at the next shutdown or shut-in, or within two years, whichever is earlier. Equipment that qualifies as “unsafe-to-monitor” only needs to be surveyed in accordance with the company’s monitoring plan, while equipment that qualifies as “difficult-to-monitor” only needs to be surveyed once a year.   

All sources of fugitive emissions that are repaired or replaced must be resurveyed within 30 days of repair completion or replacement to ensure that there are no ongoing fugitive emissions. Operators will also be required to develop and implement monitoring plans to comply with these fugitive emission requirements, as well as meet the recordkeeping and reporting requirements in the rule.

When do operators need to conduct an initial survey?

Operators will have until June 3, 2017 to perform their initial surveys. For new well sites added or modified after the first year, the operator will have 60 days from the beginning of production to conduct the first survey for new wells, and 60 days after the first day of production for modified wells. Operators now have a little less than a year to create and implement an LDAR program. During this time, affected businesses should begin to think through how the new rules will impact existing operations.

What can operators do now to prepare for the new LDAR rules?

Although operators will have one year from the publication of the rule to perform their initial leak detection surveys, operators should begin the process of designing and implementing an LDAR program well in advance of the deadline. When designing their LDAR program, operators should consider the following questions:

1.Which, if any, of your sites will be subject to the new rules?

The LDAR requirements in Quad Oa apply to all new well sites added, or sites that are modified or reconstructed after September 18, 2015. The rule contains a unique definition of “modification,” which states that a well site is modified when:

(1) a new well is drilled at an existing well site;

(2) a well at an existing well site is hydraulically fractured; or

(3) a well at an existing well site is hydraulically refractured.

2.What components at your well site need to be included in the LDAR survey, and what should be included in your monitoring plan?

The proposal requires all “components” at a well site that can leak methane or VOCs to be included in the survey. The definition is broad, and includes valves, connectors, pressure relief devices, open-ended lines, flanges, compressors, instruments, and meters. The definition does not include equipment that is supposed to vent as part of normal operations, unless the emissions are coming from a part of that equipment that is not supposed to vent.

An owner or operator will need to develop a monitoring plan that would apply to each well site located within the company-defined area, which will require visiting each well site in order to properly assess the site. Depending on the number and location of wells within the company-defined area, the initial site visits and development of the monitoring plan may require a significant amount of time.

 As part of the monitoring plan, operators are required to include an “observation path” to ensure that all fugitive emissions components are within sight of the path. If the operator uses Method 21, the plan must also include a list of components to be monitored and a method for determining the location of fugitive emissions components to be monitored in the field. Under either approach, operators will need to determine where each of their “components” is located to ensure they are included in surveys. Operators should also determine which components will qualify as unsafe or difficult to monitor, and which will be unsafe or technically infeasible to repair without a shutdown.

3.Who will perform the surveys and repairs and which method will be used?

Operators can select between OGI technology and Method 21 to perform the surveys. While OGI surveys can be performed more quickly, many companies do not own the equipment needed to complete an OGI survey in-house. Each operator should assess, based on their individual circumstances, whether surveys should be performed internally or by a third-party consultant. Industry groups have warned that there may be a shortage of qualified consultants available to perform the surveys. As a result, companies planning to use outside help should look to establish a relationship with a consultant now.

The tight timeline between surveys and repairs also means that operators should have a plan for how repairs will be made. This will pose additional challenges for operators whose well sites are spread out in geographically remote areas where it may take longer for personnel to reach the site, and there may be fewer qualified personnel or contractors available in the area. If possible, it may be best to try to coordinate personnel so that surveys and repairs happen on the same day. That way, the resurvey mandated by the Quad Oa rules can also be performed without a second trip out to the well site.

4.How will you ensure that your LDAR program is functioning properly?

 Addressing methane gas emissions is likely to remain a high priority for EPA. Quad Oa contains detailed recordkeeping and reporting requirements. Companies should think about implementing strategies that will ensure these records are complete and kept up to date. Companies should also consider ways to ensure that the LDAR programs cover all of the necessary components, and are able to address leaks within the timeframes allowed by the rule. EPA is continuing to emphasize a desire to use electronic reporting, and operators will want to familiarize themselves with EPA’s online reporting system before the deadlines.

5.What future changes at existing facilities could trigger these requirements?

Complying with the Quad Oa LDAR requirements can impose meaningful compliance costs on a facility. When planning future changes at existing well sites, companies should ensure that their operations and business teams know that adding wells, or hydraulically fracturing or refracturing existing wells will trigger the Quad Oa requirements. Companies will also want to consider strategies for making sure that new, modified, or reconstructed sites are added to their LDAR program as future wells are hydraulically fractured or refractured.

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Author

Rachel D. Comeskey

Rachel D. Comeskey Associate