EPA provides more time to comply with air standards for oil, gas storage tanks

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Courtesy of Bloomberg BNA

The Environmental Protection Agency will give industry additional time to install air pollution controls on storage tanks that are used during the production and transmission of oil and natural gas, according to a final rule released Aug. 5.

The agency now will phase in the deadlines to control volatile organic compounds through April 15, 2015, rather than requiring compliance by Oct. 15, 2013, as originally contemplated.

EPA revised the 2012 new source performance standards under the Clean Air Act for the oil and natural gas sector, after determining that 11,600 storage tanks per year would be subject to the regulation, rather than the 304 that EPA had projected, and that industry would need additional time to comply.

The additional time will allow the market to increase the production and installation of pollution controls, EPA said.

The phased-in deadlines require compliance first from tanks that emit the most pollutants, EPA said.

The agency said storage tank emissions decline over time as a well's production slows. Tanks that were built or modified after April 12, 2013, are likely to have higher emissions and must comply by April 15, 2014, and tanks that came online earlier should have lower emissions and must comply by April 15, 2015, EPA said.

EPA published the original standards Aug. 16, 2012, at 40 C.F.R. pt. 60. The 2012 rule set limits for hydraulic fracturing, as well as other sources in the oil and gas industry, and the final rule, which was signed Aug. 2 and released Aug. 5, does not affect the standards for fracked wells (77 Fed. Reg. 49,490).

The 2012 final rule requires storage tanks that emit six tons of volatile organic compounds or more a year to reduce emissions by 95 percent.

Controls Can Be Removed

The newly released revisions allow operators to remove controls from a tank if the tank's emissions fall to less than four tons of volatile organic compounds per year without controls. EPA said emissions decline at tanks over time, and the change allows operators to move pollution controls to higher-emitting tanks.

“[I]n light of the questionable cost effectiveness of additional control, the secondary environmental impact and the energy impacts we conclude that the best system of emissions reduction … for reducing [volatile organic compounds] emissions from storage vessel affected facilities is not represented by continued control when their sustained uncontrolled emission rates fall below 4 [tons per year],” EPA wrote in the preamble of the final rule.

In addition, the final rule specifies that fuel tanks are not subject to the standards.

It also specifies that tanks that have enforceable permit limits of less than six tons per year under federal, state, local, or tribal authority are not subject to the standards.

Rule Addresses Industry Concerns

EPA issued a proposed version of the revisions April 12 after receiving petitions for reconsideration (78 Fed. Reg. 22,126; 72 DER A-23, 4/15/13).

The American Petroleum Institute, which submitted a petition for reconsideration, said Aug. 5 that the final rule addresses many of its concerns.

“API never opposed the control requirements, but additional time is needed to implement the rule potentially affecting thousands of new sources,” Howard Feldman, the trade association's director of regulatory and scientific affairs, said in a statement to BNA.

EPA will publish the amendments in an upcoming issue of the Federal Register.

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