• Cross-State Air Pollution Rule & Offshore Oil & Gas Facilities Rule

Weekly Compliance Digest – Cross-State Air Pollution, Offshore Oil & Gas Facilities

September 16, 2016 By
In this edition of the Weekly Compliance Digest, we cover the EPA’s updated Cross-State Air Pollution Rule (CSAPR) and a final rule from BSEE on offshore oil and gas facilities.

Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS

What is it?

On September 7, 2016, the EPA finalized an update to the Cross-State Air Pollution Rule (CSAPR) ozone season program by issuing the CSAPR Update, as part of an effort to reduce emissions of nitrogen oxides (NOx) from power plants. The rule addresses the summertime (May – September) transport of ozone pollution in the eastern U.S. that crosses state lines to help downwind states and communities meet and maintain the 2008 ozone national ambient air quality standard (NAAQS).

Starting in May 2017, the final rule will reduce ozone season emissions of nitrogen oxides (NOx) from power plants in 22 states in the eastern U.S. The final rule reflects consideration of stakeholder input received during the public comment process for the proposal and the July 2015 Notice of Data Availability (NODA), and helps meet the EPA’s obligation under the Clean Air Act to address the interstate transport of ozone air pollution.

The EPA estimates that in 2017 the rule and other changes already underway in the power sector will help cut ozone season NOx emissions by 80,000 tons, which represents a 20% reduction from 2015 levels.

Who is affected?

The final rule affects Electric Generating Units (EGUs) and regulates fossil fuel-fired electric power generation in the 22 states in yellow on the following map:

CSAPR Update Region 2008 Ozone NAAQS

The final CSAPR Update will impact 2,875 EGUs at 886 coal-, gas-, and oil-fired facilities in the 22 states shown above. States will be responsible for reducing ozone pollution to 75 parts per billion (ppb) measured over eight hours.

To establish emission budgets (i.e. tonnage-based, state-level emission limits), the EPA focused on NOx reductions that can be made quickly, such as turning on or optimizing existing pollution control technology, the agency says. The CSAPR Update implements these emission budgets through the CSAPR ozone season NOx trading program. The CSAPR allowance trading program allows facility owner/operators to determine their own compliance path, including the buying, selling, and banking (saving for a future year) of allowances on the market. The rule does not require that any particular facility make specific reductions or use certain pollution controls. At the end of the ozone season, compliance is measured by whether sources hold enough allowances to cover their emissions.

What is next?

The final rule will be in effect beginning with the 2017 ozone season (May 1 through September 30).

Oil and Gas and Sulfur Operations on the Outer Continental Shelf-Oil and Gas Production Safety Systems

What is it?

Last week, the Bureau of Safety and Environmental Enforcement (BSEE) published a final rule that amends and updates current regulations regarding production safety systems and equipment that is used to collect and treat oil and gas from Outer Continental Shelf (OCS) leases. The final rule addresses recent technological advances involving production safety systems, subsurface safety devices, safety device testing, and life cycle analysis. According to BSEE, the rule will help to reduce the number of production incidents resulting in oil spills, injuries and fatalities.

Who is affected?

The final rule affects more than 3,000 facilities located on the OCS that are involved in the collection and treatment of oil and gas collected from oil and gas wells. These facilities range in size and scale from unmanned single well caissons to large, manned deepwater facilities that make use of advanced technology.

What are the requirements?

The final rule will revise 30 CFR Part 250, Subpart H – Oil and Gas Production Safety Systems. The regulatory action aims to ensure that the regulations are keeping pace with industry’s recent technological advancements. With the shift to deeper water in the past decade, more specialized requirements and regulations are required for these newer and emerging safety technologies, BSEE says. Here are some of the main provisions of the rule:

  • Inclusion of regulatory language concerning the use of best available and safest technology (BAST) that is consistent with the Outer Continental Shelf Lands Act’s statutory mandate.
  • Clarifications of the operator’s regulatory obligations related to life cycle analysis of critical equipment. The requirements have previously been included in standards that are incorporated by reference into BSEE regulations.
  • Addition of rigorous design and testing requirements for boarding shut down valves, as they are among the most critical components of the subsea system.
  • Addition of new inspection and repair requirements for tube type heaters. Failure of this equipment to be properly inspected and maintained has resulted in several incidents in recent years, according to BSEE.
  • Prohibition of the installation of single bore production risers from new floating production facilities. BSEE believes that this technology does not provide an acceptable level of safety since the integrity of the riser may be compromised when operations are performed.
  • Codification of existing BSEE policy and guidance related to deepwater production equipment and systems to make sure they represent best practices, that the regulatory process is transparent, and that the requirements are enforceable.
  • Requirement to have documentation/schematics certified by registered professional engineers (based on the Atlantis investigation).
  • Increase in allowable leakage rates for certain contained safety valves to ensure consistency with industry standards and to reduce risks created by replacing these valves in deepwater and subsea applications.

What is next?

The final rule will become effective on November 7, 2016. However, BSEE has deferred the compliance dates for certain provisions:

  • Compliance with requirements related to boarding shutdown valves (BSDVs) and their actuators as SPPE is deferred until September 7, 2017.
  • Compliance with the provision requiring District Manager approval of existing uncoded pressure and fired vessels that are not code stamped according to ANSI/American Society of Mechanical Engineers (ASME) Boiler and Pressure Vessel Code, is deferred until March 1, 2018.
  • Compliance with provisions requiring all new firewater pump drivers to be equipped with automatic starting capabilities upon activation of the ESD, fusible loop, or other fire detection system is deferred until September 7, 2017.

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

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