RIN Data

Consistent with the White House Methane Strategy and the January 14, 2015, announcement of the EPA's approach to achieving methane and volatile organic compounds (VOC) reductions from the oil and natural gas sector, this action will finalize amendments to the 2012 new source performance standards (NSPS) for this sector. The proposed rule published 9/18/15, included methane and VOC standards for sources not covered by the 2012 Oil and Gas NSPS, such as completions of hydraulically fractured oil wells, pneumatic pumps and fugitive emissions at well sites and compressor stations. The proposal also included methane standards for sources covered in the 2012 NSPS. In addition, in response to the reconsideration petitions received for the 2012 NSPS and the 2013 amendments to the NSPS, this proposal addressed the issues for which the EPA is granting reconsideration.

Statement of Need:

This action finalizes amendments the new source performance standards for the oil and natural gas source category by setting standards for both methane and volatile organic compounds for certain equipment, processes, and activities across this source category that were not covered in the 2012 rules. This action responds to the 2014 Climate Action Plan: Strategy to Reduce Methane Emissions (the Methane Strategy). The Methane Strategy instructs the EPA to complete regulations pertaining to the sources of methane in the oil and gas sector by the end of 2016. Specifically, in January 2015, the Administration announced a new goal to cut methane emissions from the oil and gas sector. Additionally, this action finalizes certain issues raised in reconsideration petitions pertaining to the previously promulgated rule in 2012. EPA proposed these amendments on August 18, 2015.

Summary of the Legal Basis:

New source performance standards are issued under CAA section 111.

Alternatives:

Alternatives for this final rule have not yet been determined. The EPA proposed both methane and VOC standards for several emission sources not currently covered by the NSPS (i.e., hydraulically fractured oil well completions, fugitive emissions from well sites and compressor stations, and pneumatic pumps). In addition, the EPA proposed methane standards for certain emission sources that are currently regulated for VOC (i.e., hydraulically fractured gas well completions, equipment leaks at natural gas processing plants). The proposed amendments would establish methane standards for certain equipment across the source category and extend the current VOC standards to the remaining unregulated equipment. Lastly, amendments proposed to the current NSPS that improve implementation of several aspects of the current standards. Except for the implementation improvements and the setting of standards for methane, these amendments do not change the requirements for operations already covered by the current standards. The EPA has incorporated flexibility to the extent possible into the proposed rule affected sources can achieve emissions reductions in a cost-effective way. In additional to proposing alternatives options where possible, the EPA solicited comments on alternative approaches. We believe that affected sources already complying with more stringent State requirements may also be in compliance with this rule. Furthermore, the EPA is mindful that some facilities that will be subject to the proposed EPA standards will also be subject to current or future requirements of the Department of Interior's Bureau of Land Management (BLM) rules covering production of natural gas on Federal lands. The EPA and BLM have maintained an ongoing dialogue during development of this action to identify opportunities for alignment and ways to minimize potential conflicting requirements and will continue to coordinate through the agencies' respective proposals and final rulemakings.

Anticipated Costs and Benefits:

The EPA is currently assessing the costs and benefits associated with the final action. The August 18, 2015, proposal estimated the emission reductions are 340,000 to 400,000 tons of methane, 170,000 to 180,000 tons of VOC, and 1,900 to 2,500 tons of hazardous air pollutants in 2025. The proposal's methane-related monetized climate benefits are estimated to be $460 to $550 million in 2025. The estimate of total annualized engineering costs of the proposed NSPS (with gas savings) is $320 to $420 million in 2025. The quantified net benefits are estimated to be $120 to $150 million in 2025 using a 3 percent discount rate (model average) for climate benefits.

Risks:

This action is a reconsideration of new source performance standards and, thus, does not assess risk.