[Federal Register Volume 82, Number 215 (Wednesday, November 8, 2017)]
[Proposed Rules]
[Pages 51788-51794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24344]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2010-0505; FRL-9970-55-OAR]
RIN 2060-AT59


Oil and Natural Gas Sector: Emission Standards for New, 
Reconstructed, and Modified Sources: Stay of Certain Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule; notice of data availability.

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SUMMARY: The Environmental Protection Agency (EPA) is issuing this 
notice of data availability (NODA) in support of the proposed rule 
titled ``Oil and Natural Gas Sector: Emission Standards for New, 
Reconstructed, and Modified Sources: Stay of Certain Requirements,'' 
which was published on June 16, 2017. In this document, the EPA is 
providing additional information on several topics raised by 
stakeholders and is soliciting comment on the information presented. 
The two topic areas are the legal authority to issue a stay and the 
technological, resource, and economic challenges with implementing the 
fugitive emissions requirements, well site pneumatic pump standards, 
and the requirements for certification of closed vent systems by a 
professional engineer. This notice also provides an updated cost 
savings and forgone benefits analysis for the 2-year stay.

DATES: Comments must be received on or before December 8, 2017.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2010-0505, at https://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. The EPA may publish any 
comment received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Mr. Peter Tsirigotis, Sector Policies 
and Programs Division (D205-01), Office of Air Quality Planning and 
Standards, Environmental Protection Agency, Research Triangle Park, 
North Carolina 27711; telephone number: (888) 627-7764; email address: 
[email protected].

SUPPLEMENTARY INFORMATION: 
    Organization of This Document. The information presented in this 
document is organized as follows:

I. Background
II. Legal Authority
III. Stakeholder Input on Sources' Ability To Implement Requirements
    A. Fugitive Emissions Requirements
    B. Well Site Pneumatic Pump Requirements
    C. Professional Engineering Certification Requirements
IV. Estimated Cost Savings, Forgone Benefits, and Net Benefits of 
the Proposed Stay

I. Background

    On June 16, 2017, the EPA proposed to stay for 2 years certain 
requirements that are contained within the final rule titled ``Oil and 
Natural Gas Sector: Emission Standards for New, Reconstructed, and 
Modified Sources,'' published in the Federal Register at 81 FR 35824, 
June 3, 2016 (2016 Rule). This action proposed to stay the fugitive 
emissions requirements, the well site pneumatic pump requirements, and 
the requirements for certification of closed vent systems by a 
professional engineer for 2 years, in order to provide the EPA with 
sufficient time to propose, take public comment on, and issue a final 
action on the issues concerning the specific requirements on which the 
EPA has granted reconsideration. 82 FR 27645, June 16, 2017. While the 
proposed 2-year stay was based on the time needed to complete a 
rulemaking to address the issues for which we have granted 
reconsideration, during this time, the EPA plans to also address all 
remaining issues raised in these reconsideration petitions regarding 
fugitive emissions, pneumatic pumps, and certification by professional 
engineer requirements. The EPA believes that addressing all issues 
related to these requirements would provide the regulated entities and 
the general public clarity and certainty regarding these requirements.
    Subsequent to the 82 FR 27645, June 16, 2017, proposal, the Agency 
has heard a broad range of questions, concerns, and constructive 
suggestions from stakeholders on how the proposed rule could be 
improved. This document is not intended to address all of the issues 
that have been raised; we will summarize and respond to all comments in 
the final rule. Rather, the purpose of this document is to describe and 
seek comment on several ideas raised by stakeholders that may go beyond 
those for which the Agency sought comment in the June 16, 2017, 
proposal. In this document, we describe the specific issues and ideas 
raised by stakeholders and explain which of those ideas we consider to 
be within or possibly beyond the scope of comment already requested. 
The purpose of this document is to bring these ideas to the attention 
of other stakeholders and the public so that they may also provide 
comments to assist in developing a final rule.
    The feedback the EPA has received since proposing the stay relates 
to the EPA's legal authority to stay these requirements and lack of 
clarity and other challenges in implementing these three requirements. 
With respect to the implementation challenges, the commenters 
recommend, as an alternative to the proposed stay, that the EPA amend 
the 2016 Rule to extend the periods currently provided in the 2016 Rule 
for establishing the necessary infrastructure and phasing in the 
requirements for conducting the initial monitoring survey of fugitive 
emissions

[[Page 51789]]

and for routing well site pneumatic pump emissions to onsite controls 
or processes. The feedback similarly suggests the need for a phase-in 
period to allow a scale-up of the number of qualified professional 
engineers to meet the demand imposed by the 2016 Rule. The EPA is 
soliciting comments on this recommendation. Specifically, the EPA is 
soliciting relevant data and information, in particular those related 
to the EPA's analyses and assumptions that were used to establish the 
phase-in periods in the 2016 Rule, to help inform the EPA why the 
appropriate duration of these periods may have been underestimated, as 
the feedback suggests. Further, with respect to the requirement for 
certification of closed vent systems by a professional engineer, while 
in the preamble to the 2015 proposed New Source Performance Standards 
(NSPS) the EPA had suggested such certification as a potential remedy 
where a storage vessel is improperly designed,\1\ the final 2016 Rule 
requires such certification for demonstrating compliance with not only 
the storage vessel emission standards, but a number of other emission 
standards, thereby affecting a large number of affected sources.\2\ 
According to the feedback received, the immediate high demand for 
qualified professional engineers to meet this certification requirement 
has made implementation of this requirement quite challenging. In light 
of the feedback, the EPA is soliciting comments, data, and any other 
information that would help the EPA determine whether a phase-in period 
for this requirement is needed and, if so, the length of such period. 
While the comment period on the June 16, 2017, proposal closed on 
August 9, 2017, comments on this action may include further commentary 
on statements made in the proposed 2-year stay.
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    \1\ 80 FR 56649, September 18, 2015.
    \2\ 40 CFR 60.5411a(d).
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    This action also provides an updated cost analysis for the 2-year 
stay, which reflects a revised time frame, as well as corrects a 
technical error in the initial analysis. This correction results in a 
slight increase in cost savings associated with the proposed 2-year 
stay. The EPA has also updated this analysis to include forgone 
benefits and net benefits from the proposed 2-year stay. For more 
information, see section IV of this document.

II. Legal Authority

    The EPA received comments from stakeholders on our legal authority 
to stay these requirements or otherwise amend the 2016 Rule to extend 
the ``phase-in'' periods currently provided in that rule. See Docket ID 
No. EPA-HQ-OAR-2010-0505-10577. Specifically, noting that these 
requirements are not mandated by Clean Air Act (CAA) section 
111(b)(1)(B), the commenter interprets CAA section 111 as authorizing 
the EPA to extend compliance deadlines or establish future compliance 
dates. The commenter also cites section 705 of the Administrative 
Procedure Act (APA) to provide the EPA authority to stay these 
requirements pending judicial review. The commenter interprets the term 
``postpone'' in section 705 of the APA to include ``delay, defer, 
adjourn, shelve, table, and put on hold.'' Id. at 7. Lastly, the 
commenter argues that the EPA's general rulemaking authority under 
section 301(a) of the CAA authorizes a rulemaking staying these 
requirements because ``Congress has not written a `clear impediment to 
the issuance' '' of such stay. Id. at 12 (citations omitted). The EPA 
solicits comments on these legal theories provided in this comment 
document. See Docket ID No. EPA-HQ-OAR-2010-0505-10577.
    For the reasons stated below, the EPA has legal authority to amend 
the 2016 Rule to either stay certain provisions or otherwise revise 
certain aspects of the rule. The EPA promulgated the 2016 Rule pursuant 
to section 111(b)(1)(B) of the CAA in accordance with the notice-and-
comment rulemaking procedures under section 307(d) of the CAA. 81 FR 
35828. The EPA is using the same statutory authority and following the 
same procedures in the present rulemaking to amend the 2016 Rule to 
stay certain requirements (as described in the June 16, 2017, proposal) 
or make the suggested changes to aspects of these requirements as 
described in this action (i.e., extension or provision of ``phase-in'' 
periods). In addition, section 301(a) of the CAA provides the Agency 
with broad authority to prescribe regulations, including revisions to 
prior rulemakings, as necessary to carry out the Administrator's 
authorized functions under the statute. ``The power to decide in the 
first instance carries with it the power to reconsider.'' Trujillo v. 
Gen. Elec. Co., 621 F.2d 1084, 1086 (10th Cir. 1980); see also, United 
Gas Improvement Co. v. Callery Properties, Inc., 382 U.S. 223, 229 
(1965); Mazaleski v. Treusdell, 562 F.2d 701, 720 (D.C. Cir. 1977).
    Section 111 of the CAA requires the EPA to list a source category 
under that section if, ``in [the EPA Administrator's] judgment it 
causes, or contributes significantly to, air pollution which may 
reasonably be anticipated to endanger public health or welfare.'' Once 
a source category is listed, CAA section 111(b)(1)(B) requires that the 
EPA promulgate ``standards of performance'' for new sources in such 
source category. In addition, CAA section 111(b)(1)(B) requires the EPA 
to ``at least every 8 years review and, if appropriate, revise'' 
performance standards unless the ``Administrator determines that such 
review is not appropriate in light of readily available information on 
the efficacy'' of the standard. In 1979, the EPA published a list of 
source categories, including Oil and Natural Gas, under section 111(b) 
of the CAA. See Priority List and Additions to the List of Categories 
of Stationary Sources, 44 FR 49222 (August 21, 1979) (``1979 Priority 
List''). In 1985, the EPA promulgated NSPS for this source category 
that addressed volatile organic compound(s) (VOC) emissions from 
leaking components at onshore natural gas processing plants (40 CFR 
part 60, subpart LLL) and sulfur dioxide emissions from natural gas 
processing plants (40 CFR part 60, subpart KKK). In 2012, the EPA 
conducted its required review under CAA section 111(b)(1)(B), and 
promulgated NSPS subpart OOOO, which included updates to subparts KKK 
and LLL standards as well as additional VOC standards for this source 
category.
    In addition to the mandatory obligations described above, the EPA 
has discretion under CAA section 111(b)(1)(B) to add new standards of 
performance for additional pollutants or emission sources not 
previously covered concurrent with, or independent of, the 8-year 
review. Pursuant to section 111(b)(1)(B) of the CAA, the EPA has 
promulgated new performance standards for previously unregulated 
sources concurrent with the 8-year review. See, e.g., 71 FR 9866 
(February 27, 2006) (new particular matter standards for boilers); 73 
FR 35838 (June 24, 2008) (new nitrogen oxide standards for additional 
sources at refineries); 77 FR 49490 (August 16, 2012) (new VOC 
standards for additional sources at oil and gas facilities). However, 
the appropriate time for promulgating such new standards may not always 
align with the 8-year review cycle. See, e.g., 73 FR 35838, 35859. (The 
EPA did not promulgate performance standards for greenhouse gas 
emissions as part of the 8-year review of the NSPS for refineries 
because the Agency was still in the process of gathering information 
and reviewing controls.) While the EPA could conduct the required 
periodic review sooner than every 8 years, which

[[Page 51790]]

would potentially allow the EPA to conduct the review and set 
additional standards concurrently, the EPA does not believe that the 
schedule for the statutorily required review should be driven by the 
timing for promulgating additional performance standards that are 
discretionary. On the other hand, there is no reason that the EPA's 
authority and discretion to promulgate such standards should be 
constrained by the timing of the 8-year review. The EPA, therefore, 
reasonably interprets CAA section 111(b)(1)(B) to allow the Agency to 
exercise its discretion to promulgate new performance standards for 
additional sources or pollutants when appropriate (concurrent with or 
independent of the 8-year review).
    Pursuant to this authority under section 111(b)(1)(B) of the CAA, 
the EPA promulgated the 2016 Rule which contained, among other things, 
a number of new performance standards for emission sources not 
previously covered, including the fugitive emissions components at well 
sites and compressor stations, as well as pneumatic pumps at well 
sites.\3\ The EPA promulgated the fugitive emissions requirements for 
well sites and compressor stations pursuant to section 111(h) of the 
CAA, which authorizes the EPA to set a design, equipment, work 
practice, or operational standard where it is not technically feasible 
to prescribe or enforce an emission standard. 80 FR 56593, 56637 
(September 18, 2015). A work practice standard generally consists of a 
set of activities that sources must perform and a time period for 
completing the activities. See, e.g., 40 CFR 60.632 (180 days from 
initial startup to comply with the requirements to detect and repair 
leaks at onshore oil and natural gas processing plants). Similar to 
existing work practice standards, the fugitive emissions requirements 
in the 2016 Rule specify a set of activities (e.g., developing an 
emission monitoring plan, conducting initial and subsequent surveys, 
repair or replacement, and resurvey of fugitive emissions components 
according to the plan) and time frames for performing the activities. 
40 CFR 60.5397a. Specifically, the 2016 Rule specifies a period of time 
(i.e., until June 3, 2017, or 60 days after starting up production, 
whichever is later) for sources to establish the necessary 
infrastructure, develop a monitoring plan, secure the required 
personnel and equipment, and conduct the initial monitoring survey of 
fugitive emissions components at well sites and compressor stations. 81 
FR 35858-9 and 35863, June 3, 2016.
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    \3\ The 2016 Rule also includes standards for reducing methane 
emissions from the oil and natural gas sector, as well as revisions 
to the previously promulgated Oil and Natural Gas NSPS (40 CFR part 
60, subpart OOOO).
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    The 2016 Rule similarly did not establish an emission limit for 
well site pneumatic pumps, but instead requires that emissions from 
well site pneumatic pumps be routed to an available control or process 
onsite, unless a qualified professional engineer certifies that it is 
not technically feasible to do so. As with the fugitive emissions 
requirements, the 2016 Rule similarly provided a period of time (until 
November 30, 2016) for owners and operators to conduct the ground work 
required for routing well site pneumatic pumps to an available onsite 
control or process (or, if it is not technically feasible to do so, for 
obtaining a certification by a qualified engineer of the technical 
infeasibility). 81 FR 35859, June 3, 2016.
    The 2016 Rule also added a requirement that all closed vent systems 
routing emissions from storage vessels, compressors, and pneumatic pump 
affected facilities be certified by a qualified professional engineer. 
This certification requirement is not an emission standard under CAA 
section 111(a)(1) or a design, equipment, work practice, or operational 
standard under CAA section 111(h); it is a compliance measure that 
would provide additional assurance that sources are meeting the 
emission standards for storage vessels, compressors, and pneumatic 
pumps. Some of these emission standards, such as those for storage 
vessels and compressors, were promulgated in 2012 under section 
111(b)(1)(B) of the CAA.
    Through the June 16, 2017, action, the EPA is proposing to amend 
the 2016 Rule to stay the fugitive emissions requirements, the well 
site pneumatic pump requirements, and the certification requirement 
described above. Since then, the EPA has received suggestions that, 
instead of staying these requirements, the EPA extend the current 
phase-in periods for the fugitive emissions requirements and well site 
pneumatic pump requirements, as well as providing one for the 
requirement for certification of closed vent systems by a professional 
engineer. Agencies have inherent authority to reconsider past decisions 
and to revise, replace, or repeal a decision to the extent permitted by 
law and supported by a reasoned explanation. FCC v. Fox Television 
Stations, Inc., 556 U.S. 502, 515 (2009); Motor Vehicle Mfrs. Ass'n v. 
State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 42 (1983) (``State 
Farm''). This includes a decision regarding the appropriate length of 
the phase-in periods provided in the 2016 Rule for specific 
requirements, as well as whether to provide one for phasing in an 
additional compliance assurance measure, or whether to stay these three 
requirements at issue while they are being revised through rulemaking.
    Section 301(a) of the CAA provides the EPA with broad rulemaking 
authority to carry out the CAA. Notwithstanding the potential 
constraint that other parts of the CAA may have on the EPA's authority 
to stay a rule pursuant to CAA section 301(a), see Natural Resources 
Defense Council, Inc. v. Reilly, 976 F.2d 36, 41 (D.C. Cir. 1992), 
there is no such constraint here with respect to staying the fugitive 
emissions requirements, the well site pneumatic pump requirements, and 
the certification requirement in the 2016 Rule, the promulgation of 
which was discretionary and not compelled by CAA section 111(b)(1)(B). 
In a case analyzing a similar general rulemaking authority granted to 
the Federal Reserve Board by the Truth in Lending Act, the Supreme 
Court held quite broadly that, where ``the empowering provision of a 
statute states simply that an agency may make such rules and 
regulations as necessary to carry out the provisions of an act, the 
validity of a regulation promulgated thereunder will be sustained so 
long as it is `reasonably related to the purposes of the enabling 
legislation.' '' Mourning v. Family Publications Service, Inc., 411 
U.S. 356, 369 (1973) (quoting Thorpe v. Housing Authority of City of 
Durham, 393 U.S. 268, 280-81 (1969)). In a CAA section 301(a) case, the 
District of Columbia Circuit Court of Appeals held that CAA section 
301(a) authorizes the EPA to use rulemaking to issue the enhanced 
vehicle inspection and maintenance programs guidance under section 182 
of the CAA. Natural Res. Def. Council, Inc. v. EPA, 22 F.3d 1125 (D.C. 
Cir. 1994). Noting the absence of any provision in CAA section 182 
preventing issuing such guidance through rulemaking, the Court deferred 
to the Agency's determination that the regulation was necessary as long 
as it provided a reasoned explanation. Id. at 1148.
    The EPA's proposed stay, as well as the stakeholder-suggested 
extension or provision of ``phase-in'' periods for the three 
requirements at issue, is consistent with the purposes of the CAA and, 
therefore, authorized under section 301(a) of the CAA. The EPA 
promulgated these requirements for purposes of achieving meaningful 
emission reductions under the regulatory schemes established in the 
2016 Rule to complement other emission reduction efforts and address

[[Page 51791]]

certain challenges (e.g., technical infeasibility and time needed for 
building up for necessary equipment and trained personnel). For 
instance, the EPA promulgated both the fugitive emissions requirements 
and a process for applying and obtaining an alternative means of 
emissions limitations (AMEL) with the clear intent to achieve emission 
reductions from currently uncontrolled sources while still allowing 
sources subject to effective existing state fugitive emissions programs 
an avenue to continue implementing such programs, as well as to 
encourage the use of innovative technology. Therefore, in promulgating 
the fugitive emissions requirements, the EPA clearly intended and 
anticipated the implementation of alternatives in lieu of such 
requirements. However, stakeholders indicated that this purpose of the 
2016 Rule was frustrated by the fact that the current AMEL provisions 
are not sufficiently clear to allow sources to take advantage of them. 
Stakeholders suggested that further revision or clarification would be 
required before sources can apply and obtain approval to use an 
innovative technology or implement their current state program in lieu 
of the 2016 Rule requirements. The EPA received input from stakeholders 
stating that without staying the fugitive emissions requirements 
pending the EPA's reconsideration, the regulated entities would incur 
significant and potentially unnecessary additional costs and compliance 
burden to implement the 2016 Rule, and, in some cases, at the expense 
of disrupting or complicating compliance with applicable state 
programs, just to later revert back to what they were doing in the 
first place. These were the consequences that the EPA sought to avoid 
by promulgating the AMEL in the 2016 Rule. While not all states have 
fugitive emissions programs, considering that many states with high oil 
and gas production do have such programs in place,\4\ it is not clear 
that the marginal additional emission reductions achieved during the 
EPA's reconsideration process outweigh the potential disruption to 
existing state programs and company-specific programs. In light of the 
discussion above, the EPA believes that the proposed stay of the 
fugitive emission requirements pending its reconsideration process is 
reasonable and authorized under sections 111 and 301 of the CAA.
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    \4\ Including California, Colorado, North Dakota, Ohio, 
Pennsylvania, Texas, Utah, and Wyoming.
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    With respect to the well site pneumatic pump requirements, the 2016 
Rule acknowledges that routing the pneumatic pump emissions to an 
available onsite control or process may not always be technically 
feasible and, therefore, provides a technical infeasibility exemption 
for such routing except for pneumatic pumps located at a ``greenfield 
site.'' However, some sources could not tell based on the 2016 Rule 
definition of ``greenfield site,'' which was not proposed for notice 
and comment, whether they are ``greenfield sites,'' even though they 
are encountering technical infeasibility, and, therefore, risk being in 
noncompliance. Delaying these requirements until the EPA resolves this 
potential problem through its reconsideration process is consistent 
with the 2016 Rule to require emission reductions from well site 
pneumatic pumps only where it is technically feasible to do so.
    Lastly, as mentioned above, the closed vent certification by 
professional engineer requirement is a compliance measure included in 
the 2016 Rule to provide additional assurance that sources are meeting 
the emission standards for a wide range of equipment, some of which 
have been in place since 2012. The EPA granted reconsideration of this 
requirement because the EPA had not considered its cost and whether the 
additional assurance justifies such expenditure. The EPA's proposed 
stay while conducting this evaluation is clearly consistent with 
section 111 of the CAA, which expressly identifies cost as a factor for 
consideration when promulgating emission standards. See CAA section 
111(a)(1).
    For the reasons stated above, both the proposed stay and the 
suggestion by stakeholders to extend (or provide) the phase-in periods 
are lawful exercises of the EPA's statutory authority and discretion 
under the CAA. The EPA solicits comment on the EPA's legal authorities 
for taking these actions. In addition, as mentioned above, the EPA 
solicits comment on stakeholder input \5\ on the EPA's legal 
authorities to take these actions.
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    \5\ See, for example, Docket ID No. EPA-HQ-OAR-2010-0505-10577 
and Docket ID No. EPA-HQ-OAR-2010-0505-12142.
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III. Stakeholder Input on Sources' Ability To Implement Requirements

    In the June 16, 2017, proposal, the EPA explained that it is 
proposing to stay the requirements at issue pending reconsideration due 
to its concern that sources should not be compelled to comply with 
these requirements pending the EPA's reconsideration of issues 
associated with these requirements, as these issues impact the ability 
of a wide range of sources to achieve and show compliance with their 
applicable standards. 82 FR 27646-8, June 16, 2017. In that action, the 
EPA proposed to amend the 2016 Rule by staying these requirements 
pending reconsideration.
    Since proposing to stay the requirements pending reconsideration, 
the EPA received feedback from some stakeholders indicating that there 
are additional issues affecting sources' ability to implement the above 
mentioned requirements besides those for which the EPA has granted 
reconsideration.\6\ Some stakeholders suggested that the EPA should 
amend the 2016 Rule by extending the ``phase-in'' periods provided in 
the 2016 Rule for a build-up of the number of trained personnel (i.e., 
certified monitoring survey contractors, qualified professional 
engineers) and equipment (i.e., monitoring instruments) required to 
meet the demand imposed by the fugitive emissions requirements and the 
well site pneumatic pump requirements. The EPA anticipated that during 
these periods, ``sources will begin to phase in these requirements as 
additional devices and personnel become available.'' 81 FR 35859 and 
35863, June 3, 2016. We solicit comment on the suggestion that these 
periods be extended.
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    \6\ See, for example, Docket ID No. EPA-HQ-OAR-2010-0505-11108 
and Docket ID No. EPA-HQ-OAR-2010-0505-12337.
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    Some stakeholders suggested that these concerns may also exist with 
respect to other provisions requiring professional engineer 
certifications. The EPA solicits comment on whether to similarly 
provide a phase-in period to allow a scale-up of the number of 
qualified professional engineers to meet the demand imposed by the 2016 
Rule, which requires certification by such professionals of (1) the 
closed vent systems routing emissions from various equipment and (2) 
technical infeasibility of routing emissions from a well site pneumatic 
pump to an existing control device or process onsite. The EPA 
additionally solicits comment on the length of the phase-in period 
necessary in order to achieve this scale-up.
    As mentioned above, the EPA previously anticipated that some of 
these issues might be present for a more limited period and, therefore, 
provided in the 2016 Rule a ``phase-in'' period for both the fugitive 
emissions requirements and the pneumatic pump requirements. 81 FR 
35851, 35858-9, 35863, June 3, 2016. Specifically, in

[[Page 51792]]

regards to the fugitive emissions requirements, in light of the large 
number of sources, the EPA concluded that time was needed to allow an 
increase in production of the required equipment and scale-up of 
trained personnel, as well as for sources to establish the groundwork 
and secure the necessary monitoring equipment and personnel. The 2016 
Rule, therefore, provided a ``phase-in'' period by allowing sources to 
conduct initial monitoring by June 3, 2017, or within 60 days after 
production starts, whichever is later. 81 FR 35858-9, 35863, June 3, 
2016. Some stakeholders suggested that some sources continue to have 
difficulty securing the necessary equipment and/or personnel to conduct 
the required monitoring survey of fugitive emissions. For a similar 
reason, the 2016 Rule provided a phase-in period until November 30, 
2016, to connect well site pneumatic pumps to an existing control or 
process onsite. 81 FR 35851, June 3, 2016.
    However, some stakeholders suggested that the time provided in the 
2016 Rule may not have been adequate to accommodate the number of 
affected sources subject to these requirements. In addition, some 
stakeholders indicated that sources that must now comply with these 
requirements upon startup may be particularly affected by these 
challenges. Therefore, the EPA solicits comment and information on 
these challenges that sources are experiencing in carrying out these 
requirements. Further, the EPA is soliciting comment on whether, in 
light of the numerous ongoing compliance issues, the EPA should amend 
the above mentioned phase-in periods in the 2016 Rule instead of simply 
staying the requirements. The EPA additionally is soliciting comment on 
the appropriate length of a phase-in period to address the challenges 
sources are experiencing in carrying out the requirements in the 2016 
Rule. A stay would mean that sources do not have to comply while the 
stay is in place. It would not, however, change any dates in the 2016 
Rule. This could create some uncertainty for sources regarding their 
obligations upon expiration of the stay. A change to the phase-in 
periods (or the addition of such a period where the rule does not 
currently provide one) could provide greater certainty to sources.
    Some stakeholders suggested that the challenges regarding acquiring 
necessary equipment and trained personnel may also exist with respect 
to the requirement of certification of closed vent systems by a 
professional engineer. We note that the 2016 Rule does not have a 
phase-in period associated with the closed vent system certification by 
professional engineer requirement, which must be met by a wide range of 
sources (i.e., storage vessels, compressors, and pneumatic pumps), even 
though the EPA acknowledged that securing such professional engineer 
certification may take time. 81 FR 35851, June 3, 2016. The EPA, 
therefore, solicits comment on whether time (and how much) should be 
provided to allow a further building up of the number of professional 
engineers experienced in these requirements to meet the demand posed by 
this certification requirement.
    As mentioned above, the EPA solicits comment on the appropriate 
length of time needed to address the challenges sources are 
experiencing in carrying out these requirements in the 2016 Rule and 
the suggestion to extend the ``phase-in'' periods established in the 
2016 Rule for the fugitive emissions requirements and the well site 
pneumatic pump requirements, as well as the suggestion to provide a 
phase-in period for the requirement for certification of closed vent 
systems by a professional engineer.

A. Fugitive Emissions Requirements

    The EPA proposed to stay for 2 years the fugitive emissions 
requirements at well sites and compressor stations while it reconsiders 
the process and criteria for requesting and receiving approval for the 
use of an AMEL and the applicability of the fugitive emissions 
requirements to low production well sites. 82 FR 27646, June 16, 2017. 
These issues determine the universe of sources that must implement the 
fugitive emissions requirements. Id. The EPA has received feedback from 
some stakeholders that securing certified monitoring survey contractors 
and monitoring instruments has been more difficult than predicted, and, 
therefore, the EPA is soliciting comment on the availability of 
contractors and monitoring instruments, and the impact on owners and 
operators complying with the requirements of the 2016 Rule. The EPA is 
soliciting comment on extending the phase-in period and the appropriate 
length of the phase-in period to allow for an adequate build-up of the 
personnel and equipment required for meeting the fugitive emissions 
requirements. Specifically, the EPA solicits comment on whether the 
impact of this requirement and any feasibility issues are relevant to 
few sources or a systemic issue related to many sources.
    The EPA also received feedback regarding the applicability of the 
fugitive emissions requirements to third-party equipment at well sites 
which is ancillary to production (e.g., equipment such as meters owned 
by midstream operators). The 2016 Rule requires that all fugitive 
emissions components at a well site be monitored and repaired, but 
there has been confusion as to the appropriate scope of components that 
are included in the definition of the well site for the fugitive 
emissions requirements. During the public comment period on the 2016 
Rule, the EPA received feedback that ancillary midstream assets (e.g., 
meters) should be excluded from the fugitive emissions requirements 
because they are owned by legally distinct companies from the well site 
owner and operator and could have limited emissions.\7\ The EPA's 
response to this comment was to state in its Response to Comments that 
``the resolution for any leaking components identified during surveys 
can be managed by the operator through cooperative agreements with 
other potential owners at the site.'' \8\ The EPA has since received 
feedback that there are complicated site configurations and contractual 
arrangements that the EPA did not consider in the 2016 Rule that could 
prevent compliance, including situations where the third-party 
equipment could be made subject to the 2016 Rule based on actions made 
by another operator.\9\ The EPA is soliciting comment on this feedback, 
specifically, legal and logistical issues that could prevent midstream 
operators, or other operators of ancillary third-party equipment, from 
compliance with the 2016 Rule, and suggestions for addressing this 
issue. The EPA additionally solicits comment on the number of contracts 
that would need to be renegotiated and associated burden. The EPA is 
further soliciting comment on whether, in light of the above, the EPA 
should stay or otherwise extend the phase-in period as it applies to 
third-party equipment on well sites until after the EPA has addressed 
this compliance issue.
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    \7\ See Docket ID No. EPA-HQ-OAR-2010-0505-7237.
    \8\ See Docket ID No. EPA-HQ-OAR-2010-0505-7632, p. 4-282.
    \9\ See Docket ID No. EPA-HQ-OAR-2010-0505-12245 and Docket ID 
No. EPA-HQ-OAR-2017-0346-0328.
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    The EPA additionally received feedback regarding technical, safety, 
and environmental issues associated with the delay of repair provisions 
in the 2016 Rule. The EPA proposed that if ``repair or replacement [of 
a leaking fugitive emissions component] is technically infeasible or 
unsafe to repair during operation of the unit, the repair or 
replacement must be completed during the next scheduled shutdown or

[[Page 51793]]

within 6 months, whichever is earlier.'' 80 FR 56668, September 18, 
2015. Stakeholders responded with concerns about ``delays lasting 
longer than six months due to availability of supplies needed to 
complete repairs and information regarding the frequency of delayed 
repairs. Some commenters also indicated that in some cases, requiring 
prompt repairs could lead to more emissions than if repairs were able 
to be delayed, for example if a well shut-in or vent blow-down is 
required.'' 81 FR 35858, June 3, 2016. In response to these comments, 
the EPA extended the time a component can be placed on delay of repair 
from 6 months to 2 years, and, in conjunction with this extension, 
added that ``however, if an unscheduled or emergency vent blowdown, 
compressor station shutdown, well shutdown, or well shut-in occurs 
during the delay of repair period, the fugitive emissions components 
would need to be fixed at that time.'' Id.
    Since publication of the 2016 Rule, the EPA has received feedback 
that requiring repair or replacement of fugitive emissions components 
during unscheduled or emergency vent blowdowns could result in natural 
gas supply disruptions, safety concerns, and increased emissions.\10\ 
In particular, stakeholder feedback suggests that compliance with this 
provision could result in prolonged shutdowns impacting natural gas 
supply if necessary parts and skilled labor is unavailable, and 
avoidable blowdowns resulting in greater emissions than the leaking 
component.\11\ This feedback additionally indicates that these events 
may not necessarily result in the blowdown of all equipment located 
onsite and, thus, the equipment needing repair may not have been 
affected by the blowdown.12 13 The EPA is soliciting comment 
on this feedback, specifically, the shutdown, shut-in, or blowdown 
scenarios that result in the technical, safety, and environmental 
issues described, and suggestions for addressing these issues. The EPA 
is further soliciting comment on whether, in light of the above, the 
EPA should stay or otherwise extend the phase-in period as it applies 
to equipment requiring delay of repair at well sites and compressor 
stations until after the EPA has addressed this compliance issue.
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    \10\ See Docket ID No. EPA-HQ-OAR-2017-0346-0328 and Docket ID 
No. EPA-HQ-OAR-2010-0505-12245.
    \11\ Id.
    \12\ Id.
    \13\ Blowdown refers to the release of entrained gas from 
equipment that causes a reduction in system pressure or a complete 
depressurization. For example, a blowdown may occur to reduce line 
pressure and discharge gas to ensure safe working conditions during 
maintenance and repair activities.
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B. Well Site Pneumatic Pump Requirements

    The EPA proposed to stay for 2 years the requirements for well site 
pneumatic pump standards while it reconsiders the technical 
infeasibility exemption and the definition of ``greenfield site.'' 82 
FR 27647, June 16, 2017. The EPA acknowledges that the technical 
infeasibility exemption that the EPA finalized in the 2016 Rule adopted 
a different approach than previously applied to the oil and gas 
industry and created an unanticipated and unnoticed distinction between 
``greenfield'' (new development) and ``non-greenfield'' sites. For a 
discussion on the technical infeasibility exemption provided in the 
2016 Rule, please see 81 FR 35844-5, June 3, 2016. Some stakeholders 
have suggested that this distinction has caused confusion among owners 
and operators on what sites qualify for the technical infeasibility 
exemption. The EPA received stakeholder feedback that some owners and 
operators may have been unintentionally restricted in the design of new 
sites that, for technical reasons, could not employ controls or 
processes for certain pneumatic pump installations. The EPA is 
soliciting comment on technical constraints of new ``greenfield'' sites 
and specific site designs such as these which present challenges in 
implementing the well site pneumatic pump requirements in the 2016 
Rule. The EPA is, therefore, soliciting comment on extending the phase-
in period for 2 years, the time period the EPA estimates its 
reconsideration process and the issuance of the resulting rule would 
take, so that the EPA may provide the necessary clarification or 
revision in conjunction with its reconsideration process, thereby 
addressing all issues in one rulemaking. The EPA is also soliciting 
comment on extending the phase-in period and the appropriate length of 
the phase-in period for the well site pneumatic pump requirements as an 
alternative to the proposed stay of these requirements.

C. Professional Engineering Certification Requirements

    The EPA proposed to stay for 2 years the requirement for closed 
vent system certification by professional engineer while the EPA 
evaluates the benefits, as well as the cost and other compliance 
burden, associated with this requirement. 82 FR 27647, June 16, 2017. 
Such costs and associated burden are significant in light of the number 
of affected sources. Based on the EPA's estimates, approximately 16,000 
affected sources (i.e., pneumatic pumps, compressors, and storage 
vessels) came online between the proposed rule and the final 2016 Rule, 
not counting those that have and will come online since. The EPA 
received feedback that owners and operators had to reanalyze and 
potentially redesign the closed vent systems in order to meet this 
certification requirement. Subsequent to the proposed stay, the EPA 
received feedback from some stakeholders that owners and operators have 
struggled to obtain professional engineers to complete these 
certifications primarily because of a shortage of professional 
engineers certified in each state of operation with experience in the 
design of these systems. In light of this, the EPA is soliciting 
comment on the availability of professional engineers qualified in each 
state of operation and experienced in the oil and gas field and the 
costs associated with completing the certification requirements in the 
2016 Rule. The EPA additionally solicits comment on the costs of 
reanalyzing and redesigning sites in order to comply with the 
requirements of the 2016 Rule. Lastly, in light of the challenges 
described above, the EPA is soliciting comment on providing a period to 
phase in this certification period as an alternative to staying this 
requirement. The EPA emphasizes that the proposed stay for this 
certification requirement would not affect sources' obligation to meet 
the underlying applicable emission standards during that time frame. As 
explained above, this certification requirement is not an emission 
standard, but a compliance measure to provide additional assurance that 
the emission standards are being met.

IV. Estimated Cost Savings, Forgone Benefits, and Net Benefits of the 
Proposed Stay

    Since the June 16, 2017, proposal, the EPA has updated the economic 
analysis presented in the proposed stay to include estimates of the 
forgone benefits associated with the proposed rule. In addition, the 
updated analysis reflects a revised time frame and corrects a technical 
error in the calculation of cost savings, resulting in a minor increase 
in cost savings associated with the proposed rule. The previous 
analysis assumed that the proposed 2-year stay would cover the time 
period from September 2017 through September 2019. As September has 
passed, the analysis has been updated to reflect a time frame beginning 
in January 2018 and ending in December 2019.

[[Page 51794]]

    The present value of the updated cost savings of the proposed stay 
are $270 million at a discount rate of 7 percent and $280 million at a 
discount rate of 3 percent. The present value of the forgone climate 
benefits using the domestic social cost of methane estimates are $11 
million at 7 percent and $37 million at 3 percent. The present value of 
net benefits is $250 million at 7 percent, and $240 million at 3 
percent.
    The equivalent annualized values of the cost savings are $100 
million per year when using a 7-percent discount rate and $99 million 
per year using a 3-percent discount rate. The equivalent annualized 
values are the annualized present values, or the even flow of the 
present values, over the years affected by the proposal. The equivalent 
annualized value of the forgone climate benefits is $4.3 million per 
year at 7 percent and $13 million per year at 3 percent. The equivalent 
annualized value of net benefits is $97 million per year at 7 percent, 
and $86 million per year at 3 percent. Please see the memorandum 
``Estimated Cost Savings and Forgone Benefits Associated with the 
Proposed Rule, Oil and Natural Gas: Emission Standards for New, 
Reconstructed, and Modified Sources: Stay of Certain Requirements'' 
available in Docket ID No. EPA-HQ-OAR-2010-0505 for details.

    Dated: November 1, 2017.
E. Scott Pruitt,
Administrator.
[FR Doc. 2017-24344 Filed 11-7-17; 8:45 am]
 BILLING CODE 6560-50-P


