Weekly Compliance Digest – Methane Emissions Proposed Rule

January 29, 2016 By
In this edition of the Weekly Compliance Digest, we take a look at the proposed rule from the U.S. Department of the Interior’s Bureau of Land Management (BLM) to reduce methane emissions and wasted gas on public and tribal lands from oil and gas operations.

Methane and Waste Reduction Rule

What is it?

Last week, the BLM announced a proposed rule that aims to reduce the waste of natural gas from flaring, venting, and leaks from oil and gas production operations on public and Indian lands, and reduce methane emissions. The BLM’s proposed rule would require oil and gas producers to take measures to reduce the release of natural gas into the atmosphere. The proposed rule would modernize existing oil and gas production rules that are more than 30 years old, and bring them in line with technological advances in the industry, the BLM says.

Who is affected?

The proposed rule affects the oil and gas industry in the U.S. Entities directly affected include those involved in the exploration and development of oil and natural gas on Federal and Indian lands. According to AFMSS data (as of March 27, 2015), there are up to 1,828 entities that currently operate Federal and Indian leases, the BLM says. These 1,828 entities would be most affected by the proposed rule.

The potentially affected entities are likely to be part of one of the following industries identified by NAICS codes:

  • Oil and Gas Extraction (NAICS code 21111)
  • Drilling Oil and Gas Wells (NAICS code 213111)
  • Support Activities (NAICS code 213112)

What are the requirements?

The BLM produced a fact sheet that lists important elements of the proposed rule, including:

  • Limiting Routine Gas Flaring:
    • The proposal would phase in, over several years, a flaring limit per development oil well, averaged across all of the producing wells on a lease:
      • Year one limit: 7,200 thousand cubic feet (Mcf)/month/well
      • Year two limit: 3,600 thousand cubic feet (Mcf)/month/well
      • Year three limit (and thereafter): 1,800 thousand cubic feet (Mcf)/month/well.
    • Operators would be subject to metering requirements when flared volumes reach 50 Mcf/day.
  • Pre-Drilling Planning for Gas Capture:
    • Before drilling a development oil well, operators would need to evaluate opportunities for gas capture and prepare a waste minimization plan.
    • The plan must meet various requirements, and must be shared with midstream gas capture companies to facilitate timely pipeline development, but plan details would not be enforceable elements of the permit to drill.
  • Detecting Leaks:
    • The proposed rule will require operators to use an instrument-based leak detection program to find and repair leaks.
    • Operators would begin by inspecting twice a year. If they consistently find few leaks, they would be allowed to inspect annually, while if they consistently find more leaks, they would be required to inspect quarterly.
  • Reducing Venting:
    • Operators would be prohibited from venting natural gas. Exceptions include emergencies and venting from certain equipment subject to proposed limits.
    • Operators would have to replace all “high bleed” pneumatic controllers with “low bleed” controllers within one year in most instances.
    • Operators would generally have to replace certain pneumatic pumps with solar pumps, if adequate for the function, or route the pumps to a flare (if one is available on-site).
    • Within six months of the rule’s effective date, operators would have to capture or flare gas from storage tanks that vent more than six tons of VOCs per year.
    • Operators of new wells would generally not be allowed to purge those wells into the atmosphere; and operators unloading liquids from existing wells would be required to use best management practices.
    • Operators would be required to capture, flare, use, or re-inject gas released during well completions.

The flaring limits apply only to flared associated gas from production wells, not flaring from exploration or wildcat wells or during emergencies. In addition, the rule provides an exemption if meeting the limit would cause an operator to cease production and abandon significant recoverable oil reserves under a lease. The BLM says operators could comply with the proposed flaring limits by: expanding gas-capture infrastructure; adopting alternative on-site capture technologies; or temporarily slowing production at a well to minimize losses until capture infrastructure is installed.

What is next?

Following the publication of the proposed rule in the Federal Register, the public will be given 60 days to submit comments. The BLM also plans to hold a series of public meetings on the proposed rule in February and March.

Visit Enablon Insights again next Friday for a brand new Weekly Compliance Digest!

Categories: EHS

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