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Oil, Gas Tank Standards Revised after Industry Complaints
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On July 31, EPA revised the definition of storage vessel under its new source performance standards (NSPS) for oil and natural gas development operations in response to industry concerns.  The agency, in a final rule July 31 but not yet officially published, changed the regulatory definition of storage vessel to remove the terms “connected in parallel” and “installed in parallel.”  The revisions don't change any emissions reduction requirements included in the performance standards, the agency said.

 

The storage vessel definition was established in a 2014 rule that made several changes to the oil and gas performance standards, including language that was intended to clarify regulatory requirements for storage tanks.  EPA said it included the language about parallel storage vessels as a way to prevent well operators from avoiding the need to comply with the standards by dividing throughput between separate vessels.  However, the agency said in its new final rule that inclusion of those terms in the definition “inadvertently included storage vessels” beyond those EPA intended to address in its oil and gas operation standards.  Existing provisions on circumvention of air standards are sufficient for the agency to address a situation where storage vessels are divided into smaller tanks to avoid regulatory requirements, the agency said.

 

The Gas Processors Association in February asked the EPA to reconsider the definition of storage vessels because the language could potentially have a significant effect on how companies evaluate whether storage vessels are covered by EPA emissions standards. The reconsideration request was supported by the American Petroleum Institute, the Interstate Natural Gas Association of America and other industry groups after the EPA issued a March proposed rule to revise the storage vessel definition. 

 

EPA's final rule also generally retained the agency's definition of a low-pressure well, with one minor change made in response to an industry suggestion.  Low-pressure gas wells are exempted from requirements to use emissions completion equipment, commonly known as green completions, because it's technologically infeasible to do so.  The Independent Petroleum Association of America and other industry groups asked EPA to revise its low-pressure gas well definition, which they argued required the use of green completions at marginally cost-effective wells.  EPA retained the definition in its 2014 reconsideration rule, but the agency reopened the rulemaking process after realizing that an industry comment that recommended an alternative definition hadn't been included in the docket and wasn't considered by the agency.  EPA rejected the proposed alternative definition, which the agency said may not adequately account for factors that must be considered when determining if a green completion would be feasible for a hydraulically fractured gas well.  The one change EPA did make to its low-pressure well definition was to include a reference to “true vertical depth” rather than “vertical depth.”

 

To see a prepublication version of the final rule, go to http://www.epa.gov/airquality/oilandgas/pdfs/20150731definitions.pdf.
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