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Pennsylvania Issues Revised General Permits Regulating Methane Emissions from Unconventional Natural Gas Wells 06-12-2018

On June 9, 2018, the Pennsylvania Department of Environmental Protection (“DEP”) released revised versions of General Plan Approval and/or General Operating Permits GP-5 and GP-5A (together, the “Revised General Permits”), applicable to “Natural Gas Compression Stations, Processing Plants, and Transmission Stations” and “Unconventional Natural Gas Well Site Operations and Remote Pigging Stations,” respectively. The Revised General Permits are aimed principally at regulating methane emissions from unconventional natural gas wells and midstream facilities, consistent with Governor Tom Wolf’s four point plan for reducing methane emissions announced in January 2016. The Revised General Permits are available to facilities with actual emissions less than 100 tons per year (“tpy”) of criteria pollutants (NOx, CO, SO2, PM10, and PM2.5), less than 50 tpy of VOCs, less than 10 tpy of any single hazardous air pollutant (“HAP”), and less than 25 tpy of total HAPs (use of the Revised General Permits is further restricted in Philadelphia, Bucks, Chester, Montgomery, or Delaware Counties to facilities with less than 25 tpy each of NOx and VOC emissions).

The Revised General Permits, which will apply to new and modified sources constructed on or after August 8, 2018, require compliance with federal New Source Performance Standards (such as 40 C.F.R. Part 63 Subparts OOOO and OOOOa, although EPA has proposed a temporary stay of some of the OOOOa requirements but also include more stringent requirements as well. Specifically, the Revised General Permits contain “Best Available Technology” (“BAT”) standards that apply in addition to federal New Source Performance Standards. Of the thirteen BAT determinations in the GP-5 permit, nine impose requirements more stringent than the federal New Source Performance Standards; eight of the eleven BAT determinations in the GP-5A permit are more stringent than federal New Source Performance Standards. 

Most notably, the Revised General Permits include a 200 tpy limit on methane emissions above which a BAT requirement for methane control applies--the first such numeric threshold applicable to methane emissions from unconventional natural gas wells and midstream facilities. While methane control techniques vary by emissions source, DEP considered “a closed vent system routed to a process or control” the primary control technique for emissions attributable to venting or process emissions, and a leak detection and repair (“LDAR”) program as the primary control technique for fugitive emissions. For fugitive emissions components, the Revised General Permits require LDAR within 60 days of startup and quarterly thereafter to comply with the BAT standard. Additional BAT requirements apply to storage vessels, tanker truck load-out operations, controllers, pumps, enclosed flares, well completion, combustion units, centrifugal natural gas compressors, fractionation process units, and sweetening units, among other sources addressed by GP-5 or GP-5A.

It remains to be seen whether the Revised General Permits requiring control of methane emissions will have any impact on drilling activity in Pennsylvania, where operators drilled 809 new unconventional natural gas wells in 2017. Industry groups may also choose to bring litigation challenging the issuance of the Revised General Permits; an industry challenge to DEP’s Chapter 78a regulations also applicable to the unconventional industry has resulted in a stay that has put many of the Chapter 78a requirements on hold for over twenty months and counting. In the meantime, Governor Wolf’s efforts to reduce methane emissions continue. The remaining items of his four point plan call for promulgation of a regulation aimed at reducing methane emissions from leaks at existing oil and natural gas facilities and the development of best management practices (including LDAR programs) applicable to production, gathering, transmission and distribution lines.

OCC Issues New Seismicity Protocol 03-02-2018

On February 27, 2018, the Oklahoma Corporation Commission (“OCC”) issued a new seismicity protocol for oil and gas operators in the South Central Oklahoma Oil Province (“SCOOP”) and the Sooner Trend Anadarko Basin Canadian and Kingfisher counties (“STACK”) plays. The new protocol requires all operators in a certain defined area to have access to a seismic array giving real-time seismicity readings; lowers the minimum level at which operators must take response actions from 2.5 magnitude to a 2.0 magnitude; and requires some operators to pause their operations for 6 hours at when readings exceed 2.5 magnitude, rather than 3.0 magnitude under the previous protocol. (Readings from the seismic array are necessary because tremors of less than magnitude 2.5 generally cannot be felt by humans on the ground surface.)

The new protocol is separate from existing rules addressing wastewater injection in the Arbuckle formation, in the northern area of Oklahoma. Drilling activities in the SCOOP and STACK plays have far less water associated with them than similar activities in the Arbuckle, where the disposal of produced water remains Oklahoma regulators’ “larger concern” in addressing seismic activity, according to an OCC news release. Indeed, seismic activity in the SCOOP and STACK plays is “relatively rare and smaller on average than [that] linked to injection activity. Most importantly, the risk of such events appears to be manageable,” according to the OCC. Read the news release in full here.

Federal Court’s Order Sends BLM Methane Rule into Force, For Now 03-01-2018

On February 22, 2018, the United States District Court for the District of California granted a preliminary injunction on the Bureau of Land Management’s (“BLM”) attempt to delay certain requirements of the 2016 Waste Prevention Rule (“Waste Prevention Rule”) for one year. In December 2017, BLM finalized a rule to delay the requirements of the Waste Prevention Rule originally effective January 17, 2018 until January 17, 2019 (the “Postponement”). The states of California and New Mexico (California et al. v. BLM et al., Case No. 17-cv-07186) and several environmental groups (Sierra Club et al. v. Zinke et al., Case No. 17-cv-07187) sued to enjoin the Postponement. 

The states and the environmental groups filed motions for preliminary injunctions, the court held a hearing on February 14, 2018, and the court issued its order the following week. In granting a preliminary injunction, the court considered only the Postponement and not BLM’s February 12, 2018 proposed rule intended to replace the Waste Prevention Rule (the “Proposed Replacement”). The comment period for the Proposed Replacement is ongoing and will end on April 23, 2018. 

The separate legal challenge to the validity of the Waste Prevention Rule in United States District Court for the District of Wyoming (Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al., Case No. 16-cv-00280) remains stayed, although two groups of states have already filed motions with the court to lift the stay. The joint motion of North Dakota and Texas seeks to establish an expedited schedule for further proceeding, while the motion of Wyoming and Montana requests that the court “immediately suspend the implementation deadlines in the Waste Prevention Rule until either the Bureau of Land Management promulgates the replacement rule or the Court rules on the merits of the Petitions for Review.”  For now, the Waste Prevention Rule, including the leak detection and repair, emission reduction, and reporting requirements (originally effective as of January 17, 2018) is in effect.

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