[Federal Register Volume 85, Number 178 (Monday, September 14, 2020)]
[Rules and Regulations]
[Pages 57018-57072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18114]
[[Page 57017]]
Vol. 85
Monday,
No. 178
September 14, 2020
Part IV
Environmental Protection Agency
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40 CFR Part 60
Oil and Natural Gas Sector: Emission Standards for New, Reconstructed,
and Modified Sources Review; Final Rule
Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 /
Rules and Regulations
[[Page 57018]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 60
[EPA-HQ-OAR-2017-0757; FRL-10013-44-OAR]
RIN 2060-AT90
Oil and Natural Gas Sector: Emission Standards for New,
Reconstructed, and Modified Sources Review
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: This action finalizes amendments to the oil and natural gas
new source performance standards (NSPS) promulgated in 2012 and 2016.
These amendments remove sources in the transmission and storage segment
from the source category, rescind the NSPS (including both the volatile
organic compounds (VOC) and methane requirements) applicable to those
sources, and separately rescinds the methane-specific requirements of
the NSPS applicable to sources in the production and processing
segments. Furthermore, the U.S. Environmental Protection Agency (EPA)
adopts an interpretation of Clean Air Act (CAA) section 111 under which
the EPA, as a predicate to promulgating NSPS for certain air
pollutants, must determine that the pertinent pollutant causes or
contributes significantly to dangerous air pollution.
DATES: This final rule is effective on September 14, 2020.
ADDRESSES: The EPA established a docket for this action under Docket ID
No. EPA-HQ-OAR-2017-0757. All documents in the docket are listed on the
https://www.regulations.gov/ website. Although listed, some information
is not publicly available, e.g., Confidential Business Information or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
internet and will be publicly available only in hard copy form.
Publicly available docket materials are available electronically
through https://www.regulations.gov/. Out of an abundance of caution
for members of the public and our staff, the EPA Docket Center and
Reading Room are closed to the public, with limited exceptions, to
reduce the risk of transmitting COVID-19. Our Docket Center staff will
continue to provide remote customer service via email, phone, and
webform. For further information and updates on EPA Docket Center
services, please visit us online at https://www.epa.gov/dockets. The
EPA continues to carefully and continuously monitor information from
the Center for Disease Control, local area health departments, and our
Federal partners so that we can respond rapidly as conditions change
regarding COVID-19.
FOR FURTHER INFORMATION CONTACT: For questions about this final action,
contact Ms. Amy Hambrick, Sector Policies and Programs Division (E143-
05), Office of Air Quality Planning and Standards, U.S. Environmental
Protection Agency, Research Triangle Park, North Carolina 27711;
telephone number: (919) 541-0964; fax number: (919) 541-0516; and email
address: [email protected].
SUPPLEMENTARY INFORMATION: Preamble acronyms and abbreviations. We use
multiple acronyms and terms in this preamble. While this list may not
be exhaustive, to ease the reading of this preamble and for reference
purposes, the EPA defines the following terms and acronyms here:
AEO Annual Energy Outlook
APA Administrative Procedure Act
BSER best system of emission reduction
CAA Clean Air Act
CFR Code of Federal Regulations
CH4 methane
CO carbon monoxide
CO2 carbon dioxide
CO2 Eq. carbon dioxide equivalent
EAV equivalent annualized value
EG Emission Guidelines
EGU Electricity Generating Units
EIA U.S. Energy Information Administration
EPA Environmental Protection Agency
GHG greenhouse gases
GHGI greenhouse gas inventory
GHGRP Greenhouse Gas Reporting Program
HAP hazardous air pollutant(s)
H2S hydrogen sulfide
ICR Information Collection Request
IR infrared
kt kilotons
MMT million metric tons
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NEI National Emissions Inventory
NEMS National Energy Modeling System
NOX nitrogen oxides
NSPS new source performance standards
NTTAA National Technology Transfer and Advancement Act
OGI optical gas imaging
OMB Office of Management and Budget
PM particulate matter
PM2.5 PM with a diameter of 2.5 micrometers or less
PM10 PM with a diameter of 10 micrometers or less
PRA Paperwork Reduction Act
PV present value
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
SC-CH4 social cost of methane
SCF significant contribution finding
scfh standard cubic feet per hour
SIP state implementation plan
SO2 sulfur dioxide
tpy tons per year
the Court United States Court of Appeals for the District of
Columbia Circuit
TSD technical support document
UMRA Unfunded Mandates Reform Act
U.S. United States
VOC volatile organic compounds
Organization of this document. The information presented in this
preamble is organized as follows:
I. Executive Summary
A. Purpose and Summary of the Regulatory Action
B. Costs and Benefits
II. General Information
A. Does this action apply to me?
B. How do I obtain a copy of this document, background
information, other related information?
C. Judicial Review
III. Background
IV. 2019 Proposal
V. Final Action and Rationale
A. Summary of Final Action
B. Rationale
VI. Significant Contribution
A. Legal Interpretation Concerning the Air Pollutants That Are
Subject to CAA Section 111
B. Flaws in the 2016 Rule's Significant Contribution Finding
C. Criteria for Making a Significant Contribution Finding Under
CAA Section 111
VII. Implications for Regulation of Existing Sources
A. Existing Source Regulation Under CAA Section 111(d)
B. Impact of Lack of Regulation of Existing Oil and Natural Gas
Sources Under CAA Section 111(d)
VIII. Summary of Major Comments and Responses
A. Revision of the Source Category To Remove Transmission and
Storage Segment
B. Rescission of the Applicability to Methane of the NSPS for
Production and Processing Segments
IX. Summary of Significant Comments and Responses on Significant
Contribution Finding for Methane
A. Requirement for Pollutant-Specific Significant Contribution
Finding
B. Significant Contribution Finding in 2016 Rule
C. Criteria for Making a Significant Contribution Finding Under
CAA Section 111
X. Summary of Significant Comments and Responses Concerning
Implications for Regulation of Existing Sources
A. Existing Source Regulation Under CAA Section 111(d)
B. Limited Impact of Lack of Regulation of Existing Oil and
Natural Gas Sources Under CAA Section 111(d)
XI. Impacts of This Final Rule
A. What are the air impacts?
B. What are the energy impacts?
C. What are the compliance costs?
D. What are the economic and employment impacts?
[[Page 57019]]
E. What are the benefits of the final standards?
XII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act (NTTAA)
K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
L. Congressional Review Act (CRA)
I. Executive Summary
A. Purpose and Summary of the Regulatory Action
The EPA is finalizing amendments to its 2012 and 2016 Rules
affecting the oil and natural gas industry, titled, respectively, ``Oil
and Natural Gas Sector: New Source Performance Standards and National
Emission Standards for Hazardous Air Pollutants Reviews; Final Rule''
(``2012 Rule'') \1\ and ``Oil and Natural Gas Sector: Emission
Standards for New, Reconstructed, and Modified Sources; Final Rule''
(``2016 Rule'').\2\ Those rules established NSPS for VOC emissions from
the oil and natural gas industry, and the 2016 Rule also established
NSPS for greenhouse gases (GHG), in the form of limitations on methane,
for that industry.\3\ The amendments that the EPA is finalizing are
intended to continue existing protections from emission sources within
the source category that the EPA originally listed for regulation under
CAA section 111--termed the Oil and Natural Gas Production Source
Category--while removing regulatory duplication.
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\1\ 77 FR 49490 (August 16, 2012).
\2\ 81 FR 35824 (June 3, 2016).
\3\ Docket ID No. EPA-HQ-OAR-2010-0505.
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In response to President Donald J. Trump's March 2017 Executive
Order on Promoting Energy Independence and Economic Growth, the EPA has
reviewed the 2012 and 2016 Rules with attention to whether they
``unduly burden the development of domestic energy resources beyond the
degree necessary to protect the public interest or otherwise comply
with the law'' and, thus, should be ``suspend[ed], revise[d], or
rescind[ed]''.4 5 From this review, the EPA has determined
that some of the requirements under those rules are inappropriate. For
example, some of these requirements affect sources that are not
appropriately identified as part of the regulated source category. In
addition, some of the requirements under the 2016 Rule are unnecessary
insofar as they impose redundant requirements. Accordingly, the EPA is
acting to rescind those requirements while maintaining health and
environmental protections from appropriately identified emission
sources within the regulated source category.\6\
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\4\ Executive Order 13783, ``Promoting Energy Independence and
Economic Growth,'' section 1(c) (March 28, 2017); see also section
7(a) (specifically directing the EPA to review the 2016 Rule, ``and
any rules and guidance issued pursuant to it, for consistency with
the policy set forth in section 1 of this order and, if appropriate,
[to], as soon as practicable, suspend, revise, or rescind the
guidance, or publish for notice and comment proposed rules
suspending, revising, or rescinding those rules'').
\5\ 82 FR 16331 (April 4, 2017) (review of 2016 Rule pursuant to
Executive Order 13783, signed by the EPA Administrator).
\6\ We note that the EPA is addressing certain specific
reconsideration issues--fugitive emissions requirements at well
sites and compressor stations, well site pneumatic pump standards,
and the requirements for certification of closed vent systems by a
professional engineer (PE)--in a separate final rule. See Docket ID
Item No. EPA-HQ-OAR-2010-0505-7730 and 82 FR 25730.
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Specifically, the EPA is finalizing what it referred to as the
primary proposal in the September 24, 2019, proposed action (``2019
Proposal''). Thus, this final rule contains two main actions. First,
the EPA is finalizing a determination that the source category includes
only the production and processing segments of the industry and is
rescinding the standards applicable to the transmission and storage
segment of the industry. This determination is based on the EPA's
review of the original source category listing and its 2012 and 2016
Rules' interpretations of, and its 2016 Rule's revision to, the scope
of the source category, which, as revised, covered sources in the
transmission and storage segment. Having reexamined its prior
rulemakings regarding the scope of this source category and the
transmission and storage segment, the EPA has determined that the
revision in the 2016 Rule of the original source category was not
appropriate. Because the EPA is determining that the original source
category did not cover the transmission and storage segment, and that
this segment constitutes a separate source category from the production
and processing segments, the EPA was authorized to list it for
regulation under CAA section 111(b) only by making a cause-or-
contribute-significantly and endangerment finding as required by the
statute, which the EPA never did. Accordingly, in this first action,
the EPA is rescinding the standards applicable to sources in the
transmission and storage segment of the oil and natural gas industry.
Second, the EPA is separately rescinding the methane requirements
of the NSPS applicable to sources in the production and processing
segments. The EPA is concluding that those methane requirements are
redundant with the existing NSPS for VOC and, thus, establish no
additional health protections. The emission source control technologies
that apply to the sources achieve reductions in both methane and VOC
emissions, and the recordkeeping and other requirements overlap as
well. Rescinding the applicability of the 2016 Rule requirements to
methane emissions, while leaving the applicability to VOC emissions in
place, will not affect the amount of methane emission reductions that
those requirements will achieve.
This final rule also concludes that, as a prerequisite for newly
regulating any air pollutant that the EPA did not consider when listing
or initially regulating the source category, CAA section 111 requires
the EPA to make a finding that emissions of that air pollutant from the
source category cause or contribute significantly (which we term the
significant contribution finding, or SCF) to air pollution which may
reasonably be anticipated to endanger public health or welfare (which
we sometimes refer to as dangerous air pollution). Further, the final
rule determines that the SCF for methane that the EPA made in the
alternative in the 2016 Rule was invalid and did not meet this
statutory standard, for two reasons: (i) The EPA made that finding on
the basis of methane emissions from the production, processing, and
transmission and storage segments, instead of just the production and
processing segments; and (ii) the EPA failed to support that finding
with either established criteria or some type of reasonably explained
and intelligible standard or threshold for determining when an air
pollutant contributes significantly to dangerous air pollution. The
fact that the 2016 Rule's SCF for methane was invalid provides another
basis for rescinding the methane requirements for the
[[Page 57020]]
production and processing segments. While the EPA took comment in the
2019 Proposal on what criteria should inform its judgment as to whether
a pollutant causes or contributes significantly to dangerous air
pollution, the EPA is not taking further action on such criteria in
this rulemaking.
B. Costs and Benefits
The EPA has projected the compliance cost reductions, emissions
changes, and forgone benefits that may result from the final rule for
the years of analysis, 2021 to 2030. The projected cost reductions and
forgone benefits are presented in detail in the Regulatory Impact
Analysis (RIA) accompanying this final rule. The EPA notes that the
projected cost reductions and forgone benefits are directly associated
with the rescission of the NSPS applicable to sources in the
transmission and storage segment of the source category and not the
rescission of methane from the production and processing segments.
A summary of the key results of this final rule is presented in
Table 1.\7\ Table 1 presents the present value (PV) and equivalent
annualized value (EAV), estimated using discount rates of 7 and 3
percent, of the changes in benefits, costs, and net benefits, as well
as the change in emissions under the final rule. Here, the EPA refers
to the cost reductions as the ``benefits'' of this rule and the forgone
benefits as the ``costs'' of this rule in Table 1. The net benefits are
the benefits (cost reductions) minus the costs (forgone benefits).
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\7\ In a separate action, the EPA is finalizing technical
reconsideration amendments to 40 CFR part 60, subpart OOOOa (EPA-HQ-
OAR-2017-0483; FRL-10013-60-OAR; FR Doc. 2020-18115). These
technical amendments where proposed in October 2018. 83 FR 52056.
Please reference that final rule for the summary and rationale of
those technical changes. Please refer to the RIA for both rules to
see the combined impacts.
Table 1--Cost Reductions, Forgone Benefits, and Forgone Emissions Reductions of the Final Rule, 2021 Through
2030
[Millions 2016$]
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7-Percent discount rate 3-Percent discount rate
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PV EAV PV EAV
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Benefits (Total Cost Reductions)................ $31 $4.1 $38 $4.3
Costs (Forgone Benefits)........................ 17 2.2 63 7.2
Net Benefits 1.................................. 14 1.9 -25 -2.9
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Emissions....................................... Forgone Reductions
Methane (short tons)............................ 400,000
VOC (short tons)................................ 11,000
Hazardous Air Pollutant(s) (HAP) (short tons)... 330
Methane (million metric tons carbon dioxide
equivalent (CO2 Eq.)).......................... 9
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1 Note: Estimates may not sum due to independent rounding.
This final rule is expected to result in benefits (compliance cost
reductions) for affected owners and operators. The PV of these benefits
(cost reductions), discounted at a 7-percent rate, is estimated to be
about $31 million, with an EAV of about $4.1 million (Table 1). Under a
3-percent discount rate, the PV of cost reductions is $38 million, with
an EAV of $4.3 million (Table 1).
The estimated costs (forgone benefits) include the monetized
climate effects of the projected increase in methane emissions under
the final rule. The PV of these climate-related costs (forgone
benefits), discounted at a 7-percent rate, is estimated to be about $17
million, with an EAV of about $2.2 million (Table 1). Under a 3-percent
discount rate, the PV of the climate-related costs (forgone benefits)
is about $63 million, with an EAV of about $7.2 million (Table 1). The
EPA also expects that there will be increases in VOC and HAP emissions
as a result of this final rule. While the EPA expects that the forgone
VOC emission reductions may also degrade air quality and adversely
affect health and welfare effects associated with exposure to ozone,
particulate matter with a diameter of 2.5 micrometers or less
(PM2.5), and HAP, we are unable to quantify these effects at
this time. This omission should not imply that these forgone benefits
do not exist. To the extent that the EPA were to quantify these ozone
and particulate matter (PM) impacts, the Agency would estimate the
number and value of avoided premature deaths and illnesses using an
approach detailed in the Particulate Matter National Ambient Air
Quality Standards (NAAQS) and Ozone NAAQS RIA (U.S. EPA, 2012; U.S.
EPA, 2015).
The PV of the net benefits of this rule, discounted at a 7-percent
rate, is estimated to be about $14 million, with an EAV of about $1.9
million (Table 1). Under a 3-percent discount rate, the PV of net
benefits is about $-25 million, with an EAV of about $-2.9 million
(Table 1).
II. General Information
A. Does this action apply to me?
Categories and entities potentially affected by this action
include:
Table 2--Industrial Source Categories Affected by This Action
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NAICS code 1 Examples of regulated
Category entities
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Industry....................... 211120 Crude Petroleum
Extraction.
211130 Natural Gas Extraction.
221210 Natural Gas
Distribution.
486110 Pipeline Distribution
of Crude Oil.
486210 Pipeline Transportation
of Natural Gas.
Federal Government............. .............. Not affected.
[[Page 57021]]
State/local/tribal government.. .............. Not affected.
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1 North American Industry Classification System (NAICS).
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in the table could also be
affected by this action. To determine whether your entity is affected
by this action, you should carefully examine the applicability criteria
found in the final rule. If you have questions regarding the
applicability of this action to a particular entity, consult the person
listed in the FOR FURTHER INFORMATION CONTACT section, your air
permitting authority, or your EPA Regional representative listed in 40
CFR 60.4 (General Provisions).
B. How do I obtain a copy of this document, background information, and
other related information?
In addition to being available in the docket, an electronic copy of
the final action is available on the internet. Following signature by
the Administrator, the EPA will post a copy of this final action at
https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry. Following publication in the Federal Register, the EPA will
post the Federal Register version of the final rule and key technical
documents at this same website. A redline version of the regulatory
language that incorporates the final changes in this action is
available in the docket for this action (Docket ID No. EPA-HQ-OAR-2017-
0757). Additional background information about this final rule,
including industry and emissions information, regulatory history,
litigation background, other notable events, related Federal actions,
and a comprehensive summary and rationale of the proposed options can
be found at 84 FR 50244 (September 24, 2019).
C. Judicial Review
Under section 307(b)(1) of the CAA, judicial review of this final
rule is available only by filing a petition for review in the United
States Court of Appeals for the District of Columbia Circuit (``the
Court'') by November 13, 2020. Moreover, under section 307(b)(2) of the
CAA, the requirements established by this final rule may not be
challenged separately in any civil or criminal proceedings brought by
the EPA to enforce these requirements. Section 307(d)(7)(B) of the CAA
further provides that ``[o]nly an objection to a rule or procedure
which was raised with reasonable specificity during the period for
public comment (including any public hearing) may be raised during
judicial review.'' This section also provides a mechanism for the EPA
to convene a proceeding for reconsideration, ``[i]f the person raising
an objection can demonstrate to the EPA that it was impracticable to
raise such objection within [the period for public comment] or if the
grounds for such objection arose after the period for public comment
(but within the time specified for judicial review) and if such
objection is of central relevance to the outcome of the rule.'' Any
person seeking to make such a demonstration to us should submit a
Petition for Reconsideration to the Office of the Administrator, U.S.
Environmental Protection Agency, Room 3000, WJC South Building, 1200
Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the
person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT
section, and the Associate General Counsel for the Air and Radiation
Law Office, Office of General Counsel (Mail Code 2344A), U.S.
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460.
III. Background
The EPA reviewed the relevant background in the 2019 Proposal,
including discussing the oil and natural gas industry and its
emissions, 84 FR 50247 through 50; the statutory background, Id. at
50251; the regulatory history and litigation background regarding
performance standards for the oil and natural gas industry, Id. at
50251 and 52; other notable events, including the March 28, 2017,
Executive Order that led the EPA to initiate this rulemaking, Id. at
50252 and 53; and related state and Federal regulatory actions, Id. at
50253 and 54. The EPA incorporates that information by reference and
will not repeat it here.
Since the 2019 Proposal, the EPA has updated information on the oil
and natural gas industry emissions inventories based on the recently
released Inventory of United States Greenhouse Gas Emissions and Sinks:
1990-2018 (published April 13, 2020) and the 2017 National Emissions
Inventory (NEI) (released February 2020). In Tables 3 to 7 below, the
EPA provides the updated estimate of emissions of methane, VOC, and
sulfur dioxide (SO2) from oil and natural gas industry
sources.
Methane emissions in the U.S. and from the oil and natural gas
industry. Official U.S. estimates of national level GHG emissions and
sinks are developed by the EPA for the U.S. GHG Inventory (GHGI) to
comply with commitments under the United Nations Framework Convention
on Climate Change. The U.S. GHGI, which includes recent trends, is
organized by industrial sectors. The oil and natural gas production,
natural gas processing, and natural gas transmission and storage
sectors emit 25 percent of U.S. anthropogenic methane. Table 3 below
presents total U.S. anthropogenic methane emissions for the years 1990,
2008, and 2018.
Table 3--U.S. Methane Emissions by Sector
[Million metric ton carbon dioxide equivalent (MMT CO2 eq.)]
----------------------------------------------------------------------------------------------------------------
Sector 1990 2008 2018
----------------------------------------------------------------------------------------------------------------
Oil and Natural Gas Production, and Natural Gas Processing and 185 185 163
Transmission and Storage.......................................
Oil and Natural Gas Production, and Natural Gas Processing.. 128 153 129
Oil and Natural Gas Transmission and Storage................ 57 32 34
Landfills....................................................... 180 125 111
[[Page 57022]]
Enteric Fermentation............................................ 164 174 178
Coal Mining..................................................... 97 76 53
Manure Management............................................... 37 54 62
Other Oil and Gas Sources....................................... 44 18 13
Wastewater Treatment............................................ 15 15 14
Other Methane Sources 8......................................... 57 51 57
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Total Methane Emissions..................................... 779 698 650
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Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2018 (published April 13,
2020), calculated using global warming potential (GWP) of 25. Note: Totals may not sum due to rounding.
Table 4 below presents total methane emissions from natural gas
production through transmission and storage and petroleum production,
for years 1990, 2008, and 2018, in MMT CO2 Eq. (or million
metric tonnes CO2 Eq.) of methane.
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\8\ Other sources include rice cultivation, forest land,
stationary combustion, abandoned oil and natural gas wells,
abandoned coal mines, mobile combustion, composting, and several
sources emitting less than 1 MMT CO2 Eq. in 2018.
Table 4--U.S. Methane Emissions From Natural Gas and Petroleum Systems
[MMT CO2 eq.]
----------------------------------------------------------------------------------------------------------------
Sector 1990 2008 2018
----------------------------------------------------------------------------------------------------------------
Oil and Natural Gas Production and Natural Gas Processing and 185 185 163
Transmission (Total)...........................................
Natural Gas Production.......................................... 61 100 82
Natural Gas Processing.......................................... 21 11 12
Natural Gas Transmission and Storage............................ 57 32 34
Petroleum Production............................................ 45 42 35
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Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2018 (published April 13,
2020), calculated using GWP of 25. Note: Totals may not sum due to rounding.
VOC and SO2 emissions in the U.S. and from the oil and natural gas
industry. Official U.S. estimates of national level VOC and
SO2 emissions are developed by the EPA for the NEI, for
which states are required to submit information under 40 CFR part 51,
subpart A. Data in the NEI may be organized by various data points,
including sector, NAICS code, and Source Classification Code. The oil
and natural gas sources emit 5.8 and 2.4 percent of U.S. VOC and
SO2, respectively. Tables 5 and 6 below present total U.S.
VOC and SO2 emissions by sector, respectively, for the year
2017, in kilotons (kt) (or thousand metric tons).
Table 5--U.S. VOC Emissions by Sector
[kt]
------------------------------------------------------------------------
Sector 2017
------------------------------------------------------------------------
Biogenics--Vegetation and Soil.......................... 25,823
Fires--Wildfires........................................ 4,578
Oil and Natural Gas Production, and Natural Gas 2,504
Processing and Transmission............................
Fires--Prescribed Fires................................. 2,042
Solvent--Consumer and Commercial Solvent Use............ 1,610
Mobile--On-Road non-Diesel Light Duty Vehicles.......... 1,507
Mobile--Non-Road Equipment--Gasoline.................... 1,009
Other VOC Sources 9..................................... 4,045
---------------
Total VOC Emissions................................. 43,118
------------------------------------------------------------------------
Emissions from the 2017 NEI (released April 2020). Note: Totals may not
sum due to rounding.
Table 6--U.S. SO2 Emissions by Sector
[kt]
------------------------------------------------------------------------
Sector 2017
------------------------------------------------------------------------
Fuel Combustion--Electric Generation--Coal.............. 1,319
Fuel Combustion--Industrial Boilers, Internal Combustion 212
Engines--Coal..........................................
Mobile--Commercial Marine Vessels....................... 183
[[Page 57023]]
Industrial Processes--Not Elsewhere Classified.......... 138
Fires--Wildfires........................................ 135
Industrial Processes--Chemical Manufacturing............ 123
Oil and Natural Gas Production and Natural Gas 65
Processing and Transmission............................
Other SO2 Sources 10.................................... 551
---------------
Total SO2 Emissions................................. 2,726
------------------------------------------------------------------------
Emissions from the 2017 NEI (released April 2020). Note: Totals may not
sum due to rounding.
Table 7 below presents total VOC and SO2 emissions from
oil and natural gas production through transmission and storage, for
the year 2017, in kt (or thousand metric tons).
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\9\ Other sources include remaining sources emitting less than
1,000 kt VOC in 2017.
\10\ Other sources include remaining sources emitting less than
100 kt SO2 in 2017.
Table 7--U.S. VOC and SO2 Emissions From Natural Gas and Petroleum
Systems
[kt]
------------------------------------------------------------------------
Sector VOC SO2
------------------------------------------------------------------------
Oil and Natural Gas Production and 2,504 65
Natural Gas Processing and Transmission
(Total)................................
Oil and Natural Gas Production.......... 2,478 41
Natural Gas Processing.................. 12 23
Natural Gas Transmission and Storage.... 14 1
------------------------------------------------------------------------
Emissions from the 2017 NEI, (published April 2020), in kt (or thousand
metric tons). Note: Totals may not sum due to rounding.
IV. 2019 Proposal
On September 24, 2019, the EPA issued a proposed rulemaking (2019
Proposal) to amend the 2012 Rule and 2016 Rule for the oil and natural
gas industry that would remove regulatory duplication and save the
industry millions of dollars in compliance costs each year, while
maintaining health and environmental protections from oil and natural
gas sources that the Agency considers appropriate to regulate in this
rule.\11\ The EPA issued the proposal in response to President Trump's
Executive Order on Promoting Energy Independence and Economic Growth.
Generally speaking, that order directs agencies to review existing
regulations that potentially ``burden the development or use of
domestically produced energy resources,'' including oil and natural
gas, and to suspend, revise, or rescind such regulatory requirements if
appropriate. The proposal included a primary regulatory option and an
alternative regulatory option. The primary option proposed to remove
all sources in the transmission and storage segment of the oil and
natural gas industry from regulation under the NSPS, both for VOC and
for GHG. The primary option separately proposed to rescind the methane
requirements in the 2016 Rule that apply to sources in the production
and processing segments of the industry. The alternative option
proposed to rescind the methane requirements that apply to all sources
in the oil and natural gas industry, without removing any sources from
the source category as defined in the 2016 Rule. The EPA additionally
solicited comment on alternative interpretations of the EPA's legal
authority to regulate pollutants under CAA section 111.
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\11\ 84 FR 50244.
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CAA section 111 requires the EPA to set NSPS for categories of
stationary sources that the EPA has listed (``source categories'')
because they cause, or significantly contribute to, air pollution that
may reasonably be anticipated to endanger public health or welfare. The
Agency's original source category listing for the oil and natural gas
industry, issued in 1979, included only the crude oil and natural gas
production and natural gas processing segments of the industry.
However, in the 2012 Rule and 2016 Rule, the EPA interpreted the 1979
listing to have established the scope of the source category as
including the industry's transmission and storage segment. In the 2016
Rule, the EPA also, as an alternative, expanded the source category to
include the transmission and storage segment. In the 2019 Proposal, the
EPA proposed to remove sources in the transmission and storage segment
from the Oil and Natural Gas Production source category on the grounds
that the Agency had erred in the 2012 and 2016 Rules when it had
interpreted or expanded the source category, because the transmission
and storage segment of the industry is functionally separate from the
production and processing segment. The EPA further stated that a
separate SCF would be necessary for that segment to be listed as a
source category for regulation. The proposal further stated that the
emissions limits that apply to sources in the transmission and storage
segment in the 2012 Rule and 2016 Rule would be rescinded because that
segment would be removed from the source category. Finally, the EPA
proposed to rescind emissions requirements for methane for sources
located in the production and processing segments on grounds that those
requirements are redundant to the requirements for VOC. The proposal
made clear that the emissions limits for VOC would remain for the
production and processing segments.
In the alternative proposal, the EPA proposed to rescind the
methane requirements in the 2016 Rule for all oil and natural gas
sources, without removing the transmission and storage sources from the
source category. Under this alternative, the rule would retain VOC
standards for the production, processing, and transmission and storage
segments of the industry. As with the primary proposal, the alternative
proposal is based on the view that because the controls to reduce VOC
emissions also reduce methane, separate methane requirements for the
industry are redundant.
The EPA further stated that the proposed amendments would remove
the Agency's obligation to develop emission guidelines (EG) to address
methane emissions from existing sources under section 111(d) of the
CAA. The EPA stated its belief that not
[[Page 57024]]
regulating existing sources would have limited environmental impact,
because some existing sources will ``modify'' such that they will
become subject to requirements for new sources, and because the number
of remaining sources may decline over time as they are shut down or
become obsolete.
The EPA also took comment on an alternative interpretation of its
legal authority to regulate pollutants under CAA section 111. In the
2016 Rule, the EPA took the position that the law did not require the
Agency, as a prerequisite to regulating methane as part of the NSPS, to
first make a separate determination that GHG emissions from the oil and
natural gas industry cause, or significantly contribute to, dangerous
air pollution (a pollutant-specific SCF). However, the Agency also made
a finding in the alternative that if the CAA were interpreted to
require a pollutant-specific SCF, then GHG emissions from the Oil and
Natural Gas source category do cause or contribute significantly to
dangerous air pollution. The 2019 Proposal solicited comment on three
issues: (1) Whether the Agency should revise the interpretation it took
in the 2016 Rule, so that CAA section 111 requires the EPA to make a
pollutant-specific SCF for GHG emissions from the oil and natural gas
industry as a predicate to regulation; (2) whether, if CAA section 111
does require a pollutant-specific SCF, whether the finding in the
alternative in the 2016 Rule satisfied that requirement; and (3) what,
if any, specific criteria the EPA should use to make a pollutant-
specific SCF.
The EPA solicited comments on all aspects of the proposal during a
60-day public comment period. The EPA held a public hearing in Dallas,
Texas, in October 2019; 105 speakers provided oral testimony and 32
observers attended. The EPA received almost 300,000 public comments on
the proposed rule. The EPA is not responding to any late comment
received.
V. Final Action and Rationale
A. Summary of Final Action
The EPA is finalizing what was referred to as the primary proposal
in the 2019 Proposal. First, the final rule removes all sources in the
transmission and storage segment of the oil and natural gas industry
from regulation under the NSPS and removes all emissions limitations
for both VOC and GHG for sources in the transmission and storage
segment. Second, the final rule separately rescinds the standards for
methane emissions in the 2016 Rule that apply to sources in the
production and processing segments of the industry. Third, the final
rule articulates the EPA's interpretation that under CAA section
111(b)(1)(A), as a prerequisite for newly regulating any air pollutant,
the Agency is required to make a finding that emissions of the air
pollutant, from the source category, cause or contribute significantly
to air pollution which may reasonably be anticipated to endanger public
health or welfare. Further, the final rule concludes that the
alternative SCF made by the EPA in the 2016 Rule was invalid and did
not meet this statutory standard.
B. Rationale
1. Revision of the Source Category To Remove Transmission and Storage
Segment
As noted above, the EPA is finalizing its proposal to remove the
transmission and storage segment entirely from the source category and
rescind the NSPS requirements applicable to sources within that
segment. This final action is based on the EPA's determination that its
2012 and 2016 rulemakings that interpreted or expanded the source
category to include sources in that segment were improper. The
following discussion provides background on CAA section 111, the
history of the Oil and Natural Gas Production source category, and the
rationale for this final decision.
Under CAA section 111(b)(1)(A), the EPA must ``publish . . . a list
of categories of stationary sources, emissions from which, in the
judgment of the Administrator, cause[ ], or contribute[ ] significantly
to, air pollution which may reasonably be anticipated to endanger
public health or welfare.'' Further, CAA section 111(b)(1)(A) directs
that ``from time to time thereafter'' the EPA ``shall revise'' this
``list'' of categories of stationary sources. Following the ``inclusion
of a category of stationary sources in a list,'' the EPA then proposes
and promulgates ``standards of performance for new sources within such
category.'' CAA Section 111(b)(1)(B). Thereafter, the EPA ``shall . . .
review and, if appropriate, revise such standards.'' Id.
CAA section 111(b)(1)(A) does not include any specific criteria for
determining the reasonable scope of a given ``category'' of
``stationary sources'' beyond the requirement that the Administrator
make a finding that, in his or her ``judgment,'' emissions from the
``category of sources . . . cause[ ], or contribute[ ]significantly to,
air pollution which may reasonably be anticipated to endanger public
health or welfare.'' Accordingly, the EPA is afforded some measure of
discretion in determining at the outset the scope of a source category.
In 1978, the EPA published ``Priorities for New Source Performance
Standards Under the Clean Air Act Amendments of 1977.'' \12\ The
purpose of this document was to implement the requirements of CAA
section 111(f) to develop and apply a methodology for identifying,
establishing, and prioritizing the source categories that should be
considered first for in-depth analysis prior to NSPS promulgation under
CAA section 111. For purposes of the 1978 analysis, the EPA aggregated
emissions from ``oil and gas production fields'' and ``natural gas
processing'' as part of the ``Crude Oil and Natural Gas Production
Plant'' source category. The EPA identified this aggregated source
category as a major source of hydrocarbon (HC) and SO2
emissions. When the EPA finalized the priority list in 1979, it revised
the name of the source category as ``Crude Oil and Natural Gas
Production.'' 49 FR 49222 (August 21, 1979).
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\12\ Priorities for New Source Performance Standards Under the
Clean Air Act Amendments of 1977. April 1978. EPA-450/3-78-019.
---------------------------------------------------------------------------
In 1985, the EPA promulgated two rulemakings establishing NSPS for
the Crude Oil and Natural Gas Production source category. These were 40
CFR part 60, subpart KKK--Standards of Performance for Equipment Leaks
of VOC from Onshore Natural Gas Processing Plants (50 FR 26124, June
23, 1985); and subpart LLL--Standards of Performance for SO2
Emissions from Onshore Natural Gas Processing (50 FR 40160, October 1,
1985). When it first proposed 40 CFR part 60, subpart KKK, the EPA
noted that the ``crude oil and natural gas production industry
encompasses the operations of exploring for crude oil and natural gas
products, removing them from beneath the earth's surface, and
processing these products for distribution to petroleum refineries and
gas pipelines.'' \13\ The EPA repeated that description of the
identified source category when it proposed 40 CFR part 60, subpart
LLL, explaining that the ``crude oil and natural gas production
industry encompasses not only processing of the natural gas (associated
or not associated with crude oil) but operations of exploration,
drilling, and subsequent removal of the gas from porous geologic
formations beneath the earth's surface.'' \14\
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\13\ 49 FR 2637 (January 20, 1984).
\14\ 49 FR 2658 (January 20, 1984).
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In 2012, the EPA reviewed the VOC and SO2 standards and
at the same time
[[Page 57025]]
established new requirements for additional stationary sources of VOC
emissions that had not been regulated in the 1985 rulemaking (e.g.,
well completions, pneumatic controllers, storage vessels, and
compressors)--``Oil and Natural Gas Sector: New Source Performance
Standards and National Emission Standards for Hazardous Air Pollutants
Reviews--Final Rule'' (77 FR 49490, August 16, 2012). In the preamble
of the 2011 proposal for the 2012 Rule, the EPA interpreted the 1979
listing as indicating that ``the currently listed Oil and Natural Gas
source category covers all operations in this industry (i.e.,
production, processing, transmission, storage and distribution).''
``Oil and Natural Gas Sector: New Source Performance Standards and
National Emission Standards for Hazardous Air Pollutants Reviews--
Proposed Rule,'' 76 FR 52738, 52745 (August 23, 2011). Further, the EPA
stated that ``[t]o the extent there are oil and gas operations not
covered by the currently listed Oil and Natural Gas source category. .
. ., we hereby modify the category list to include all operations in
the oil and natural gas sector.'' Id. The stated basis for that
proposed decision was that ``[s]ection 111(b) of the CAA gives the EPA
the broad authority and discretion to list and establish NSPS for a
category that, in the Administrator's judgment, causes or contributes
significantly to air pollution which may reasonably be anticipated to
endanger public health or welfare.'' Id. No additional discussion of
this listing position was provided in the 2011 proposal.
In the 2012 final rulemaking, the EPA promulgated NSPS for emission
sources in the production, processing, and transmission and storage
segments, 77 FR 49492, and stated that ``[t]he listed Crude Oil and
Natural Gas Production source category covers, at a minimum, those
operations for which we are establishing standards in this final
rule.'' Id. at 49496. In responding to comments, the EPA took the
position that it was not actually revising the source category to
include emission sources in the transmission and storage segment, but
rather, was interpreting the 1979 listing to be ``broad,'' and
interpreting the 1985 rulemaking as ``view[ing] this source category
listing very broadly,'' Id. at 49514, so that, in the EPA's view, the
source category was already sufficiently broad to include that
segment.\15\
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\15\ In the 2012 Rule rulemaking, the EPA referred to the
distribution segment of the oil and natural gas industry, which
entails transporting natural gas to the end user. 76 FR 52738, 52745
(August 23, 2011) (proposed rule); 77 FR 49514, 77 FR 49493 (Table
2) (August 16, 2012) (final rule). However, in the 2016 Rule, the
EPA clarified that the scope of the Oil and Natural Gas Production
and Processing source category includes the transmission and storage
segment, but not the distribution segment. In addition, the EPA has
never treated any sources in the distribution segment as subject to
the requirements of NSPS subpart OOOO or OOOOa.
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In 2016, the EPA promulgated additional NSPS (40 CFR part 60,
subpart OOOOa) for the Crude Oil and Natural Gas Production source
category (81 FR 35824, June 3, 2016). As the EPA did in the 2012 Rule,
the EPA took the position that the 1979 listing was broad enough to
encompass the transmission and storage segment and that the 1985
rulemakings confirmed that broad listing. 81 FR 35832 (``The scope of
the 1978 Priority List is further demonstrated by the Agency's
pronouncements during the NSPS rulemaking that followed the
listing.''). The EPA stated that the inclusion of the transmission and
storage segment into the original 1979 source category was warranted
because equipment and operations at production, processing,
transmission and storage facilities are a sequence of functions that
are interrelated and necessary for getting the recovered gas ready for
distribution. Nevertheless, the EPA recognized that the scope of the
prior listing may have had some ambiguity. Accordingly, ``as an
alternative,'' the EPA finalized a revision of the category to broaden
it, so that ``[a]s revised, the listed oil and natural gas source
category includes oil and natural gas production, processing,
transmission, and storage'' and the EPA changed the source category
name to be ``Crude Oil and Natural Gas source category.'' (81 FR
35840).
a. Scope of 1979 Listing Action
For this final rule, the EPA has reviewed the original 1979 listing
of the Crude Oil and Natural Gas Production source category and the
associated background materials and now finds that its 2012 and 2016
interpretation of the 1979 listing (i.e., that the 1979 listing
included natural gas transmission and storage) was erroneous. See
F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (an agency
may revise its policy, but must demonstrate that the new policy is
permissible under the statute and is supported by good reasons, taking
into account the record of the previous rule). The EPA received
comments on the 2019 Proposal concerning this issue and the associated
rationale. These comments are provided, along with the EPA's responses,
in section VIII.A of this preamble and in Chapter 5 of the Response to
Comments Document for this action. None of the comments received
resulted in a change in the EPA's rationale and conclusions from
proposal. The following explains our decision.\16\
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\16\ In 1979, the EPA named the source category ``Crude Oil and
Natural Gas Production source category.'' In 2016, the EPA changed
the source category name to be ``Crude Oil and Natural Gas source
category.'' Because this final rule rescinds the 2016 expansion, the
EPA is finalizing the source category's name back to how it read in
1979.
---------------------------------------------------------------------------
While the EPA has listed source categories that are broad,\17\ the
silence of the 1979 listing as to the transmission and storage segment
suggests that the segment was not considered for inclusion at the time
of the listing. Principles of administrative law require that in order
for something (in this case, the transmission and storage segment) to
be subject to regulation, the EPA should provide for and explain such
regulation clearly. Moreover, where the EPA has remained silent on any
explanation for its choice of regulation, the Court has held, ``a rule
without a stated reason is necessarily arbitrary and capricious.''
Small Refiner Lead Phase-Down Task Force v. U.S. EPA, 705 F.2d 506, 551
(1983). Accordingly, if the EPA had intended for the 1979 listing to
include the transmission and storage segment, the Agency's failure to
explain that decision would have rendered it arbitrary and capricious.
It is reasonable to presume that the Agency did not act arbitrarily and
capriciously, and, therefore, that its silence regarding the
transmission and storage segment indicated that it did not intend to
cover that segment in the 1979 listing.
---------------------------------------------------------------------------
\17\ The EPA also has listed narrow source categories, as noted
in section VIII.A of this preamble.
---------------------------------------------------------------------------
Additionally, to the extent there was ambiguity in the original
1979 listing, the EPA made clear its interpretation in 1984, when the
EPA proposed to set the first standards of performance for sources
within the Crude Oil and Natural Gas Production source category (i.e.,
40 CFR part 60, subpart KKK). The views the Agency expressed concerning
the scope of the source category are particularly relevant because this
rulemaking was conducted shortly after the listing and because it
established the initial NSPS. In this proposal, the EPA described the
category as ``encompass[ing] the operations of exploring for crude oil
and natural gas products, removing them from beneath the earth's
surface and processing these products for distribution to petroleum
refineries and gas pipelines,'' but this description made no reference
to the subsequent activities of transmission
[[Page 57026]]
and storage of crude oil and natural gas products.\18\ This description
is reasonably read to establish that sources in the transmission and
storage segment were not included in the Crude Oil and Natural Gas
Production source category as listed in 1979.
---------------------------------------------------------------------------
\18\ 49 FR 2637; see also 49 FR 2658.
---------------------------------------------------------------------------
Similarly, in the same sentence, the EPA defined the scope of the
source category as encompassing oil operations up to the point of
distribution to petroleum refineries, which are a separate source
category. In this manner, the EPA indicated that the Crude Oil and
Natural Gas Production source category includes operations from well
sites (exploration, drilling, and removal) and natural gas processing
plants (processing). While gathering and boosting compressor stations
were not specified, it is reasonable to conclude that they are also
included because they are located between two covered sites, the well
site and the processing plant. However, to reiterate, subsequent
operations, such as transmission and storage, and distribution were not
included.
In the 1984 proposal, the EPA added that ``there are several VOC
emission points within this industry,'' which the Agency categorized as
process, storage, and equipment leaks. 49 FR 2637. In the 2016 NSPS,
the EPA used this description of the three sets of emission points as
support for the proposition that the Agency previously intended the
source category to include transmission and storage. Specifically, the
EPA stated that ``these emissions can be found throughout the various
segments of the natural gas industry.'' 81 FR 35832. The EPA has
closely reexamined the language of the 1984 proposal and found that,
importantly, in the descriptions of these three categories of emission
points, it is clear that the EPA considered these emission sources only
in the production and processing segments. Therefore, while it is true
that there are process, storage, and equipment leak emissions
throughout the oil and natural gas sector, the discussion in the 1984
proposal entirely focused on these sources in the production and
processing segments, and made no reference to the transmission and
storage segment. The following discusses each of those three sets of
sources in more detail.
With respect to process sources, the 1984 proposal states that they
include well systems, field oil and natural gas separators, wash tanks,
settling tanks, and other sources. The proposal further states that
process sources remove the crude oil and natural gas from beneath the
earth and separate gas and water from the crude oil. 49 FR 2637. This
description of the process emission point clearly refers to the
production and processing segments and is silent concerning the
transmission and storage segment.
For the second set of emission points, storage sources, the 1984
proposal states that they include field storage tanks, condensate
tanks, and cleaned oil tanks. These tanks emit VOC, the pollutant
addressed in the 1984 proposal. These three types of tanks are common
in the production segment and/or at natural gas processing plants; as
gas is separated from oil, condensate and impurities, these tanks are
used to store oil and condensate, which contain VOC. As such, these
tanks are storage sources of VOC emissions. In contrast, storage at
natural gas transmission and storage facilities refers to storage of
gas, mostly in the underground storage reservoirs. Because the gas
stored in underground reservoirs is pipeline quality natural gas (95-98
percent methane), these storage facilities in the transmission and
storage segment are not emission points of concern for VOC, or any of
the other pollutants identified in the 1984 proposal as being emitted
from the oil and gas industry. Additionally, the cited discussion in
the proposal made no explicit mention of transmission and storage
facilities. Furthermore, there are no oil tanks or field tanks in the
transmission and storage segment. As for condensate tanks, these tanks
are rarely used at the transmission and storage segment because, as
mentioned above, the gas that enters this segment is pipeline quality
gas and, therefore, contains little to no condensate. Given the
reference in the 1984 proposal to two other types of tanks that are
also commonly found in the production and processing segments but
absent in the transmission and storage segment, it is reasonable to
conclude that the proposal's reference to condensate tanks was also
intended to be limited to the production and processing segments. For
all of these reasons, the better reading of the 1984 proposal
discussion on storage tanks is that it was limited only to such tanks
located in the production and processing segments, and was not intended
to encompass tanks located in the transmission and storage segment.
Similarly, the 1984 proposal describes the equipment leak emission
points as referring to the production and processing segments of the
Oil and Natural Gas source category and is silent concerning the
transmission and storage segment. The proposal explains that equipment
leaks of VOC can occur from ``pumps, valves, compressors, open ended
lines or valves, and pressure relief devices used in onshore crude oil
and natural gas production (emphasis added).'' Id. Additionally, the
preamble acknowledges that there is equipment used in crude oil and
natural gas production and distinguishes this from equipment used in
natural gas processing. The EPA examined the use of leak detection and
repair work practices for equipment leaks of VOC at natural gas
processing plants and explained in the preamble that the costs and
emission reduction numbers for the application of these techniques at
the ``widely dispersed'' crude oil and natural gas production sites
were not known at that time. In this manner, the EPA clearly
acknowledged the existence of equipment leaks at both the production
and processing segments. In contrast, although equipment leaks do occur
in the transmission and storage segment, the proposal makes no mention
of leaks in that segment. Thus, each of the three sets of emission
sources under consideration in the 1984 proposal clearly is in the
production and processing segments, and the proposal is silent about
the transmission and storage segment.
Another indicator that the 1984 proposal did not consider
transmission and storage lies in the fact that this proposal addressed
VOC emissions. As discussed below, the composition of the natural gas
in the transmission and storage segment is significantly different than
in the production and processing segments, as the transmission and
storage segment contains considerably less VOC, and as a result,
sources in that segment emit low amounts of VOC. In many areas of the
country, particularly those that produce liquids and associated gas,
the production and processing segments have high VOC-content gases, but
the transmission and storage operations have substantially lower VOC-
content gases. In light of the fact that the 1979 listing concerned VOC
content (termed, at that time, HC), this difference between the
segments further supports the view that the EPA would not have included
transmission and storage in the 1979 listing. This corroborates that
the proposal did not consider emission sources related to the
transmission and storage of natural gas. Thus, although process,
storage, and equipment leaks are emission sources that are present
across the industry, including in natural gas transmission and storage,
additional examination of the 1984 proposal makes it clear that it
considered process, storage, and equipment leaks in only the production
[[Page 57027]]
and processing segments of the oil and natural gas industry.
For the reasons noted above, the EPA concludes that its statements
in the 2012 and 2016 Rules that the 1979 listing of the Crude Oil and
Natural Gas Production source category included the transmission and
storage segment, and that the 1984 proposal confirmed that action, were
in error. Rather, the record of the 1979 action indicates that the
source category did not include that segment, and the Agency confirmed
that narrower scope of the source category in its 1984 proposal to
promulgate the initial set of NSPS.
b. Operations in the Transmission and Storage Segment Are Distinctly
Different
As noted above, the 2016 Rule stated that the ``1979 listing of
[the Crude Oil and Natural Gas Production] source category provides
sufficient authority for this action'' to promulgate NSPS for sources
in the transmission and storage segment, but then added that, ``to the
extent that there is ambiguity in the prior listing, the EPA hereby . .
., as an alternative, . . . revis[es] . . . the category listing to
broadly include the oil and natural gas industry.'' \19\ ``As
revised,'' the 2016 Rule continued, ``the listed oil and natural gas
category includes oil and natural gas production, processing,
transmission, and storage.'' \20\ As discussed in the following
paragraphs, the EPA is concluding, in line with the 2019 Proposal, that
this alternative approach of revising the scope of the source category
to include sources within the transmission and storage segment was also
in error and should be rejected.
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\19\ 81 FR 35833.
\20\ Id. (footnote omitted).
---------------------------------------------------------------------------
The EPA received comments on this issue, including the associated
rationale. These comments are provided, along with the EPA's responses,
in section VIII.A of this preamble and in Chapter 5 of the Response to
Comments Document for this action. None of the comments received
resulted in a change in the EPA's rationale and conclusions from
proposal.
While CAA section 111(b)(1)(A) and (B) respectively authorize the
EPA to ``revise,'' where warranted, both the ``list of source
categories'' and ``standards of performance'' that the EPA has
promulgated, nothing in CAA section 111 expressly authorizes or directs
the EPA to ``revise'' a particular ``source category'' by altering its
scope once the EPA has listed that source category. However, the EPA
has inherent authority to reconsider, repeal, or revise past decisions,
to the extent permitted by law, so long as the Agency provides a
reasoned explanation. See Sang Seup Shin v. INS, 750 F.2d 122, 130
(D.C. Cir. 1984) (in absence of specific statutory prohibition, an
agency has inherent authority to reconsider its decisions). The CAA
complements the EPA's inherent authority to reconsider prior
rulemakings by providing the Agency with broad authority to prescribe
regulations as necessary, under CAA section 301(a). Even so, the
authority to revise the scope of a source category must be exercised
within reasonable boundaries and cannot be employed in a way that
results in an unreasonable expansion of an existing source category.
For the reasons discussed below, the EPA is not authorized to expand
the scope of a listed source category to cover a new set of sources
that are not sufficiently related to the sources in the pre-existing
category, so that they constitute a separate source category for which
the EPA would be required to make a new SCF and endangerment finding
under CAA section 111(b)(1)(A) as a prerequisite to regulating them.
Otherwise, expanding the source category by including new sources could
be used to circumvent that requirement.
The EPA proposed to determine that the operations in the
transmission and storage segment are not sufficiently related to the
production and processing segments that were included in the original
source category listing. In the 2016 Rule, the EPA held that the source
category should be expanded because equipment and operations at
production, processing, and transmission and storage facilities are a
sequence of functions that are interrelated and necessary for getting
the gas ready for distribution. In the 2019 Proposal, the EPA proposed
to determine that this 2016 finding was unreasonable and proposed that
transmission and storage operations are distinct from production and
processing operations because (among other things) the natural gas that
enters the transmission and storage segment has different composition
and characteristics than the natural gas that enters the production and
processing segments. 84 FR 50257.
While CAA section 111 does not define the term ``source category''
or use the phrase ``sufficiently related,'' this concept is inherent in
the everyday definition of ``category.'' Merriam-Webster defines
``category'' as ``any of several fundamental and distinct classes to
which entities or concepts belong,'' \21\ and it defines a ``class[ ]''
as ``a group, set, or kind sharing common attributes'' (emphasis
added).\22\ Commenters point out what they view as commonalities among
both the production and processing and transmission and storage
segments. These comments implicitly acknowledge that, to be a
``category,'' the associated sources must have something in common,
that is, they must be sufficiently related to merit being associated as
part of the same category. The EPA may not have articulated the
``sufficiently related'' test in those terms in prior actions, but,
again, that test is implicit in the everyday meaning of ``category.''
That is, for items to be part of a ``category'' they must have key
things in common, and if they have substantial differences, they should
not be included in the same category. Without this test, it would be
difficult to develop a basis for ascertaining the scope of a category.
For this reason, the EPA has in effect regularly applied this test. For
example, fugitive VOC emissions from leaking equipment occurs across
several industries, including the synthetic organic chemical
manufacturing industry and the petroleum refinery industry, but there
are substantial enough differences between those industries to warrant
putting them in separate source categories, notwithstanding the fact
that some of their equipment is similar. For another example, when
proposing to expand the original Asphalt Roofing Plants source category
listing to include other locations where the preparation of asphalt for
roofing may take place, such as oil refineries, the EPA stated that,
``the emissions, processes, and applicable controls for blowing stills
and asphalt storage tanks at oil refineries and asphalt processing
plants are the same as those at asphalt roofing plants. It is therefore
reasonable to treat the asphalt processing and roofing manufacture
industry as a single category of sources for the purposes of
establishing standards of performance.'' 45 FR 76428. By finding
commonality in emissions, processes, and applicable controls for these
otherwise different sources, the EPA determined that they should be
part of the same source category.
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\21\ ``Category.'' Merriam-Webster.com Dictionary, Merriam-
Webster, https://www.merriam-webster.com/dictionary/category.
Accessed 21 May, 2020.
\22\ ``Class.'' Merriam-Webster.com Dictionary, Merriam-Webster,
https://www.merriam-webster.com/dictionary/class. Accessed 19 May,
2020.
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[[Page 57028]]
In contrast, based on a reexamination of the processes and
operations found in the transmission and storage segment, the EPA is
finalizing its determination that transmission and storage sources are,
in fact, sufficiently distinct from production and processing sources
so that the Agency erred when, in the 2016 Rule, it revised the source
category to include sources in the transmission and storage segment.
Specifically, the EPA now concludes that the processes and operations
found in the transmission and storage segment are distinct from those
found in the production and processing segments because the purposes of
the operations are different and because the natural gas that enters
the transmission and storage segment has different composition and
characteristics than the natural gas that enters the production and
processing segments.
The primary operations of the production and processing segments
are exploring crude oil and natural gas products beneath the earth's
surface, drilling wells to extract these products, and processing the
crude oil and field gas for distribution to petroleum refineries and
natural gas pipelines. As stated previously in this section, the EPA
described this source category's operations similarly when proposing 40
CFR part 60, subpart KKK, in 1984. 49 FR 2637. The primary purpose of
these segments is to obtain the product and then, in the case of
natural gas, to remove impurities from the extracted product. At a well
site (production segment), crude oil and natural gas are extracted from
the ground. Some processing can take place at the well site, such as
the physical separation of gas, production fluids, and condensate. Of
these products, crude oil and natural gas undergo successive, separate
processing. Crude oil is separated from water and other impurities and
transported to a refinery via truck, railcar, or pipeline. The EPA
treats oil refineries as a separate source category, accordingly, for
present purposes, the oil component of the production segment ends at
the point of custody transfer at the refinery.\23\ The separated gas
(``field gas'') is then sent through gathering pipelines to the natural
gas processing plant (processing segment).\24\ At the processing plant,
the field gas is converted to sales gas or pipeline quality gas. This
involves several steps, including the extraction of natural gas liquids
(e.g., a mixture of propane, butane, pentane) from the field gas, the
fractionation of these natural gas liquids into individual products
(e.g., liquid propane), or both extraction and fractionation. The final
natural gas that exits in the processing plant is sales gas, which is
predominantly methane. In these segments, the field gas has physically
changed such that it is a usable product.
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\23\ See 40 CFR part 60, subparts J and Ja, and 40 CFR part 63,
subparts CC and UUU.
\24\ Natural gas with high methane content is referred to as
``dry gas,'' while natural gas with significant amounts of ethane,
propane, or butane is referred to as ``wet gas.'' The degree and
location of processing is dependent on various factors, one being
the type of natural gas (e.g., wet or dry gas). In some ``dry gas''
areas, the field gas, with naturally higher methane content, may go
from the well site directly into the transmission and storage
segment without processing in a gas processing plant. The fact that
some produced natural gas does not require processing and can be
transported directly into the transmission and storage segment does
not diminish the differences between the production and processing
segments, on the one hand, and the transmission and storage segment,
on the other. Rather, it just means that some gas does not need to
go through the processing segment.
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The operations of the production and processing segments differ
from the transmission and storage segment operations because in the
latter, the natural gas does not undergo changes in composition, except
for some limited removal of liquids that condensed during the
temperature and pressure changes as the natural gas moves through the
pipeline. Therefore, the natural gas that enters the transmission and
storage segment has approximately the same composition and
characteristics as the natural gas that leaves the segment for
distribution. The segment includes natural gas transmission compressor
stations, whose primary operation is to move the natural gas through
transmission pipelines by increasing the pressure. Dehydration, which
can also occur at compressor stations, is a secondary operation used
when the natural gas has collected water during transmission. As
discussed in the 2019 Proposal, this differs from the significant
natural gas processing in the production and processing segments, which
involves a series of processing steps dependent on factors such as the
type of natural gas (e.g., wet or dry gas), market conditions, and
company contract specifications. 84 FR 50258. At storage facilities,
natural gas is injected into underground storage for use during peak
seasons.\25\ When demand increases, the natural gas is extracted from
the underground storage, dehydrated to remove water that has entered
during storage, compressed, and moved through distribution pipelines.
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\25\ Storage can also take place in above ground storage
vessels; however, it is the EPA's understanding that these are more
commonly used after the local distribution company custody transfer
(LDC) or commonly ``city gate,'' which has not been included in the
source category at any point. The term ``local distribution company
custody transfer,'' defined in 40 CFR part 60, subpart OOOOa, means
a metering station where the LDC receives a natural gas supply from
an upstream supplier, which may be an interstate transmission
pipeline or a local natural gas producer, for delivery to customers
through the LDC's intrastate transmission or distribution lines.
This final rule adds the definition of LDC to 40 CFR part 60,
subpart OOOO.
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Analysis of the composition of natural gas on a nationwide basis in
the various industry segments confirms the different character of the
segments. In 2011 and subsequently in 2018, the EPA conducted an
analysis of the composition, expressed in percent volume, of natural
gas based on the methane, VOC, and HAP content across the various
industry segments.26 27 For example, in 2011, the nationwide
composition for the production segment, which included wells and
unprocessed natural gas, consisted of approximately 83-percent methane,
4-percent VOC, and less than 1-percent HAP. In contrast, the
transmission segment, which included pipeline and sales gas (i.e., post
processing), consisted of approximately 93-percent methane, 1-percent
VOC, and less than 0.01-percent HAP. In 2018, the EPA reviewed new
studies available and found similar results for the production segment.
The nationwide composition for the production segment consisted of
approximately 88-percent methane and 4-percent VOC. At proposal in
2019, we concluded that these differences in the gas composition
demonstrated that the emissions profile is different following gas
processing. After proposal in 2019, the EPA conducted a comprehensive
analysis of data reported directly to the Greenhouse Gas Reporting
Program (GHGRP) for reporting years 2015 through 2018 to determine
whether the composition of natural gas, in terms of methane content, is
statistically different between industry segments.\28\ In order to
determine whether the methane content is statistically different
between industry segments, the analysis evaluated the average methane
concentration for each segment based on the 2015-2018 GHGRP reporting
data.\29\
[[Page 57029]]
For oil and natural gas production, the analysis estimated an average
methane content of 69 and 83 percent, respectively. For gathering and
boosting,\30\ the analysis estimated an average methane content of 81
percent, and for gas processing, an average methane content of 78
percent. The analysis estimated an average methane content of 94
percent for transmission and 95 percent for storage. The analysis
performed additional calculations and statistical assessments to
generate the final statistical analysis and subsequent conclusions.
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\26\ Memorandum to Bruce Moore, U.S. EPA from Heather Brown, EC/
R. ``Composition of Natural Gas for use in the Oil and Natural Gas
Sector Rulemaking.'' July 2011. Docket ID Item No. EPA-HQ-OAR-2010-
0505-0084.
\27\ Memorandum to U.S. EPA from Eastern Research Group.
``Natural Gas Composition.'' November 13, 2018. Docket ID No. EPA-
HQ-OAR-2017-0757.
\28\ Memorandum. Analysis of Average Methane Concentrations in
the Oil and Gas Industry Using Data Reported Under 40 CFR part 98
Subpart W. April 9, 2020. Included in Docket ID No. EPA-HQ-OAR-2017-
0757.
\29\ See Table 17 of Memorandum. Analysis of Average Methane
Concentrations in the Oil and Gas Industry Using Data Reported Under
40 CFR part 98 Subpart W. April 9, 2020. Included in Docket ID No.
EPA-HQ-OAR-2017-0757.
\30\ Gathering and boosting is located between well sites and
natural gas processing plants in the Oil and Natural Gas Production
source category.
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This analysis found that there is a substantial difference in
methane concentrations between (1) gas production, gathering and
boosting, and gas processing and (2) transmission and storage. This
agrees with earlier data and analyses and the conclusion that there is
a difference in the emissions profile between the production and
processing segments and the transmission and storage segment.
It should be noted that in regulating HAP from the oil and natural
gas industry, the EPA created separate source categories for the
production and processing segments, regulated under subpart HH of 40
CFR part 63; and the transmission and storage segment, regulated under
subpart HHH of 40 CFR part 63. See 64 FR 32610, June 17, 1999. In
addition, the EPA has made a similar distinction between other source
categories with segments that handle the production and processing of a
material and subsequent transport of the product. As the EPA noted in
the 2019 Proposal, 84 FR 50258, one example is the petroleum industry,
in which production facilities,\31\ refineries,\32\ and bulk gasoline
terminals \33\ all have operational differences, and the EPA placed
them in three different source categories. Those operational
differences are similar to the operational differences between the
production and processing segments and the transmission and storage
segment at issue in this final rule.
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\31\ U.S. EPA. ``Revised Prioritized List of Source Categories
for NSPS Promulgation.'' March 1979. EPA-450/3-79-023.
\32\ 38 FR 15406 (May 4, 1973); 39 FR 9315 (March 8, 1974).
\33\ 45 FR 83126 (December 12, 1980); 48 FR 37578 (August 18,
1983).
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It should be noted that in the 2016 Rule, the EPA justified
including the transmission and storage segment in the Crude Oil and
Natural Gas source category partly because some similar equipment
(e.g., storage vessels, pneumatic pumps, compressors) is used across
the industry. While that is true, the differences in the operations of,
and the differences in emission profiles of, the different segments
support excluding the transmission and storage segment from the source
category. A review of 2016 Rule compliance reports from sources in the
EPA Regions (3, 6, 8, 9, and 10) with the greatest oil and natural gas
activity indicates that there were no storage vessels emitting more
than 6 tons per year (tpy) VOC reported in the transmission and storage
segment.\34\ Therefore, even though there are storage vessels in the
transmission and storage segment, the liquids (condensate) stored and
the throughputs are such that the VOC emissions are significantly
different. This supports our understanding that VOC emissions are lower
in the transmission and storage segment and that any gas processing
that occurs in the transmission and storage segment generally is
limited to removing liquids that condensed during the temperature and
pressure changes as the gas moves through the pipeline. In addition,
there are types of equipment present in the production segment (e.g.,
oil tanks, three-phase separators) and processes at natural gas
processing plants (e.g., natural gas liquid extraction, natural gas
liquids fractionation, sulfur and CO2 removal) that are
either not present or uncommon at natural gas transmission and storage
facilities.
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\34\ These reports have since been made available for public
viewing at https://www.foiaonline.gov/foiaonline/action/public/submissionDetails?trackingNumber=EPA-HQ-2018-001886&type=request.
---------------------------------------------------------------------------
In summary, there are distinct differences in the operations
between oil and natural gas production and natural gas processing, on
the one hand, and natural gas transmission and storage, on the other.
The primary operations of the production and processing segments are
exploring crude oil and natural gas products beneath the earth's
surface, drilling wells that are used to extract these products, and
processing the crude oil and field gas for distribution to petroleum
refineries and natural gas pipelines. The operations of the production
and processing segments differ from the transmission and storage
segment operations because in the latter, the natural gas does not
undergo changes in composition, except for some limited removal of
liquids that condensed during the temperature and pressure changes as
the natural gas moves through the pipeline. Second, there are
statistically significant differences in the emissions profiles between
the production and processing segments and the transmission and storage
segment. Third, there are equipment types and processes present in the
oil and natural gas production and processing segments that are not
present, or not common, at natural gas transmission and storage
facilities. The EPA is, therefore, finalizing a revised source category
which excludes transmission and storage sources from the Crude Oil and
Natural Gas Production source category.
As the EPA stated in the 2019 Proposal, the 2016 Rule's expansion
of the source category to include sources in the transmission and
storage segment did, in fact, exceed the reasonable boundaries of the
EPA's authority to revise source categories. 81 FR 35833. The 2016 Rule
also erred in purporting to list, under CAA section 111(b)(1)(A), the
source category, as expanded to include transmission and storage
sources, for regulation on grounds that it causes or contributes
significantly to air pollution which may reasonably be anticipated to
endanger public health or welfare. Id. Rather, in order to include the
transmission and storage segment on the CAA section 111(b)(1)(A) list
for regulation, the EPA is required to treat it as a separate source
category and determine that in and of itself it causes or contributes
significantly to air pollution which may reasonably be anticipated to
endanger public health or welfare. The EPA did not make that
determination in the course of promulgating the 2016 Rule. 81 FR 35833.
2. Rescission of the NSPS for Sources in Transmission and Storage
Segment
A prerequisite for the EPA to promulgate an NSPS applicable to new
sources is that the new sources must be in a source category that the
EPA has listed under CAA section 111(b)(1). As stated in section V.B.1
of this preamble, the EPA is removing the transmission and storage
segment from the source category. Accordingly, the promulgation of NSPS
for transmission and storage sources was contrary to law, and as a
result, the EPA is also rescinding the standards for both VOC and GHG
emissions in the 2012 Rule and the 2016 Rule for emission sources
located in the transmission and storage segment. Specifically, we are
rescinding the requirements for compressor affected facilities,
pneumatic controller affected facilities, storage vessel affected
facilities, and the affected facility that is the collection of
fugitive emissions components located at a compressor
[[Page 57030]]
station, where these affected facilities are located downstream of the
natural gas processing plant or, if no gas processing plant is present,
after the point of custody transfer. To further clarify that the
requirements do not apply to these units, we are adding a definition of
``natural gas transmission and storage segment'' which describes the
boundaries of the segment. The definitions of ``natural gas processing
plant'' and ``custody transfer'' are unchanged.
3. Status of Sources in Transmission and Storage Segment
The result of this final rule, as it relates to the transmission
and storage segment, is that these sources are not part of a listed
source category under CAA section 111(b)(1)(A) and, thus, are not
subject to regulation under CAA section 111(b) (for new sources) or CAA
section 111(d) (for existing sources that emit certain air pollutants).
This is consistent with the treatment of emissions sources in other
industries that the EPA has not listed as a source category under CAA
section 111(b)(1)(A). In the future, the EPA may evaluate these
emissions more closely and determine whether the transmission and
storage segment should be listed as a source category under CAA section
111(b)(1)(A).\35\
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\35\ Methane emissions from the transmission and storage segment
are 34 MMT CO2 Eq. (1,355 kt methane) per the Inventory
of United States Greenhouse Gas Emissions and Sinks: 1990-2018
(published April 13, 2020), which amounts to 5 percent of United
States methane emissions and 0.6 percent of total U.S. GHG emissions
on a CO2 equivalent basis (using a GWP of 25 for
methane). With respect to VOC emissions, the transmission and
storage segment emitted 14 kt in 2017, which amounts to just 5.8
percent of national VOC emissions from that year. With respect to
SO2 emissions, there were 1 kt emitted from the
transmission and storage segment in 2017, or just 1.8 percent of
national SO2 emissions. For HAP emissions, the
transmission and storage segment emitted 1,143 tons in 2014, or just
0.01 percent of national HAP emissions for that year.
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4. Rescission of the Limitations on Methane for Sources in the
Production and Processing Segments
As the second of the two main actions of this final rule, the EPA
is also rescinding the limits on methane emissions for the NSPS
applicable to sources in the production and processing segments. The
EPA finds that, in the specific circumstances presented here, the EPA
erred in establishing the methane NSPS because those requirements are
redundant with the NSPS for VOC, establish no additional health
protections, and are, thus, unnecessary. Even if the 2016 Rule's
establishment of limits on methane emissions is not considered to be,
the EPA would exercise its discretion to rescind them on those same
grounds. Rescinding the applicability of the 2016 Rule requirements to
methane emissions, while maintaining the applicability of those
requirements to VOC emissions, will not affect the amount of methane
reductions that those requirements will achieve, because the controls
that reduce VOC emissions simultaneously reduce methane emissions.
Comments were received on both sides of this proposed decision and
the rescission of the requirements for methane and the associated
rationale. We respond to some of the major comments in the discussion
immediately below and in section VIII.B of this preamble, and to the
rest in Chapter 6 of the Response to Comments Document. None of the
comments received have led the EPA to materially change its views from
the proposal, and as a result, the EPA is rescinding the methane NSPS.
The following is the rationale for this decision.
In the 2016 Rule, the EPA justified regulating methane for the
following reasons: At the outset, the EPA noted that methane is a GHG,
that the EPA has determined that GHG pollution endangers public health
and welfare, and that the Crude Oil and Natural Gas Production source
category is one of the nation's largest industrial emitters of methane.
81 FR 35825. The EPA also noted that ``[r]educing methane emissions . .
. will contribute to efforts to reduce global background ozone
concentrations that contribute to the incidence of ozone-related health
effects.'' Id. at 35837. The EPA went on to determine that the amounts
of emissions of methane from the source category were sufficiently
large that it was rational to regulate them under CAA section 111, and
that, in the alternative, assuming that it was necessary to determine
that those emissions cause or contribute significantly to dangerous GHG
air pollution, the EPA made that determination as well. Id. at 35841-
43.
The EPA recognized that the controls that facilities use to meet
the VOC NSPS ``also reduce methane emissions incidentally.'' Id. at
35841. However, the Agency added that ``in light of the current and
projected future GHG emissions from the oil and natural gas industry,
reducing GHG emissions from this source category should not be treated
simply as an incidental benefit to VOC reduction; rather, it is
something that should be directly addressed through GHG standards in
the form of limits on methane emissions under CAA section 111(b) based
on direct evaluation of the extent and impact of GHG emissions from
this source category and the emission reductions that can be achieved
through the best system for their reduction.'' Id. The Agency added,
``The standards detailed in this final action will achieve meaningful
GHG reductions and will be an important step towards mitigating the
impact of GHG emissions on climate change.'' Id.
The EPA further justified methane requirements by noting that
``there are cost-effective controls that can simultaneously reduce both
methane and VOC emissions from these equipment across the industry, and
in many instances, they are cost effective even if all the costs are
attributed to methane reduction.'' Id. In addition, the EPA noted that
``establishing both GHG and VOC standards for equipment across the
industry will also promote consistency by providing the same regulatory
regime for this equipment throughout the oil and natural gas source
category for both VOC and GHG, thereby facilitating implementation and
enforcement.'' Id. The Agency added that, ``[w]hile this final rule
will result in additional reductions [of GHG] . . ., the EPA often
revises standards even where the revision will not lead to any
additional reductions of a pollutant because another standard regulates
a different pollutant using the same control equipment. For example, in
2014, the EPA revised the Kraft Pulp Mill NSPS in 40 CFR part 60
subpart BB published at 70 FR 18952 (April 4, 2014) to align the NSPS
standards with the National Emission Standards for Hazardous Air
Pollutants (NESHAP) standards for those sources in 40 CFR part 63,
subpart S. Although no previously unregulated sources were added to the
Kraft Pulp Mill NSPS, several emission limits were adjusted downward.
The revised NSPS did not achieve additional reductions beyond those
achieved by the NESHAP, but aligning the NSPS with the NESHAP eased the
compliance burden for the sources.'' Id. n.60.
In F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502 (2009),
the U.S. Supreme Court described the type of reasoning an agency must
provide to justify changing a rule it has previously adopted:
We find no basis in the Administrative Procedure Act or in our
opinions for a requirement that all agency change be subjected to
more searching review. The Act mentions no such heightened standard.
And our opinion in Motor Vehicle Mfrs. Assn. of United States, Inc.
v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29 (1983)
[[Page 57031]]
neither held nor implied that every agency action representing a
policy change must be justified by reasons more substantial than
those required to adopt a policy in the first instance. . . . The
statute makes no distinction, however, between initial agency action
and subsequent agency action undoing or revising that action.
To be sure, the requirement that an agency provide reasoned
explanation for its action would ordinarily demand that it display
awareness that it is changing position. . . . And of course the
agency must show that there are good reasons for the new policy. But
it need not demonstrate to a court's satisfaction that the reasons
for the new policy are better than the reasons for the old one; it
suffices that the new policy is permissible under the statute, that
there are good reasons for it, and that the agency believes it to be
better, which the conscious change of course adequately indicates.
This means that the agency need not always provide a more detailed
justification than what would suffice for a new policy created on a
blank slate. Sometimes it must--when, for example, its new policy
rests upon factual findings that contradict those which underlay its
prior policy; or when its prior policy has engendered serious
reliance interests that must be taken into account. Smiley v.
Citibank (South Dakota), N. A., 517 U.S. 735, 742, 116 S.Ct. 1730,
135 L.Ed.2d 25 (1996). It would be arbitrary or capricious to ignore
such matters. In such cases it is not that further justification is
demanded by the mere fact of policy change; but that a reasoned
explanation is needed for disregarding facts and circumstances that
underlay or were engendered by the prior policy.
Id. at 514-16.
In the 2019 Proposal, the EPA acknowledged that in the 2016 Rule,
it decided to add methane requirements even though it was aware that
the VOC requirements would, by themselves, achieve the same reductions
in methane. 84 FR 50259-60 and n.64 (citing 81 FR 35841). However, in
that proposal, the EPA nevertheless stated that upon further review, it
was proposing that it erred in 2016 by including methane requirements
and explained that those requirements were redundant to the VOC
requirements. Id. The EPA is finalizing this position for several
reasons, which meet the requirements of Fox Television for reversing
the 2016 Rule and rescinding the methane requirements.
In the 2016 Rule, the EPA justified regulating methane on grounds
that methane emissions from this source category are great enough to
provide a rational basis for regulation in light of the dangers of GHG
air pollution and, in fact, if it were necessary, the Agency would
determine that those emissions contribute significantly to GHG air
pollution. However, in the present action, the EPA is determining that
its rational basis finding and alternative SCF in the 2016 Rule were
invalid because they included emissions from the transmission and
storage segment, as discussed in section VI of this preamble.
Accordingly, this basis \36\ in the 2016 Rule for regulating methane is
invalid.
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\36\ 81 FR 35833.
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Considering only the production and processing segments, the 2016
rational basis determination was incorrect because the methane NSPS was
redundant on the grounds that it does not achieve any additional
methane reductions beyond what sources achieve by implementing the VOC
NSPS.\37\ The EPA explained its basis for this view at length in the
2019 Proposal, noting that ``for each emission source in the source
category subject to the NSPS, the requirements overlap completely.'' 84
FR 50259. The EPA explained that each emission source in the source
category emits methane and VOC as co-pollutants through the same
emission points and processes. The requirements of the NSPS, including
the emission limits, required controls or changes in operations,
monitoring, recordkeeping, reporting, and all other requirements, apply
to each emission source's emission points and processes and, therefore,
to each emission source's methane and VOC emissions, in precisely the
same way. The capture and control devices used to meet the NSPS
requirements are the same for these co-pollutants and are not selective
with respect to either VOC or methane emissions. Id. In the proposal,
the EPA gave several examples of how the VOC and methane requirements
are duplicative of each other. Some examples include the requirements
for well affected facilities, pneumatic controllers, pneumatic pumps,
and compressors. For each of these emission points, the applicability
requirements in NSPS subpart OOOOa are entirely ``pollutant-blind.''
That is, the requirement to control is based on applicability criteria
that are not specific to VOC. For example, a pneumatic controller
affected facility is a controller operating at a natural gas bleed rate
of greater than 6 standard cubic feet per hour (scfh). The ``natural
gas'' bleed rate is based on total gas and does not consider the amount
of VOC in the gas. In fact, the VOC content could be zero. Similarly,
pneumatic pumps are affected facilities if they are ``natural gas
driven.'' All reciprocating and wet-sealed compressors, except those at
well sites, are affected facilities. Rescission of the methane
standards will have no impact on the number of affected facilities that
will be subject to the control requirements in NSPS subpart OOOOa.
Further, for well completions, pneumatic controllers, reciprocating
compressors, and pneumatic pumps at natural gas processing plants, the
control requirements are either equipment standards or work practices
that do not distinguish between VOC and methane. For pneumatic pumps,
the requirement is a 95-percent reduction in ``natural gas emissions.''
Finally, for wet-sealed centrifugal compressors, the requirement is the
only one that specifically mentions VOC or methane, as it requires a
95-percent reduction in VOC and methane. However, removal of
``methane'' will not result in any change in methane reduction as the
test method required to demonstrate this level of reduction (EPA Method
25A) measures the reduction of total organic carbon, which includes
methane.
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\37\ The same is true for methane reductions that reduce global
ozone levels.
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Thus, after the rescission of the methane standards, there will be
no change in the number of affected facilities subject to the rule.
There will also be no impact in the methane emission reductions
achieved from those sources. While commenters recognized this fact,
some raised concerns that in the future, advances in leak measurement
technology may result in situations where VOC and methane controls are
not redundant. The EPA points out that any future request for an
alternative means of emissions limitation must include a demonstration
that the alternative identifies emissions for repair that are at least
equivalent to the visible emissions observed (and repaired) using
optical gas imaging (OGI) with the current levels of sensitivity to
methane, especially where the technology speciates emissions. Section
VIII.B of this preamble, as well as Chapter 6 of the Response to
Comments Document, includes comments and responses on this topic.
Because methane reductions occur anyway as a result of the same
controls required under the VOC requirements, the benefits of the
methane reductions in protecting public health or welfare do not
justify regulation of methane under CAA section 111. By the same token,
the fact that the controls are cost effective--even, in many cases,
when all of the costs are assigned to the methane requirements--does
not justify those requirements. Again, the controls, imposed to reduce
VOC, would result in the same amount of methane reductions, even
without the methane requirements.
Nor can the methane requirements be justified on grounds that their
overlap with VOC requirements is a means to
[[Page 57032]]
promote consistency by providing the same regulatory regime for this
equipment throughout the Oil and Natural Gas source category for both
VOC and methane, thereby facilitating implementation and enforcement.
Although, as noted above, the EPA regulates the same sources/same
pollutants at kraft mills under two differing rules, the requirements
were established under two different CAA regulatory programs (i.e.,
under CAA sections 111 and 112) (two different regulatory regimes). The
pollutants regulated under CAA section 111(b) for new, modified, or
reconstructed emission units at kraft pulp mills are filterable PM and
total reduced sulfur compounds. Opacity is regulated to ensure proper
operation and maintenance of the electrostatic precipitator used to
control PM emissions. Particulate matter emissions and opacity are also
regulated under a separate Federal standard, the subpart MM NESHAP for
chemical recovery combustion sources at kraft, soda, sulfite, and
stand-alone semichemical pulp mills (40 CFR part 63).
It is rational for the EPA to determine that requirements that are
redundant to other requirements are not necessary because they do not
result in emission reductions beyond what would otherwise occur. As the
EPA noted in the 2019 Proposal, the rulemaking to promulgate NSPS for
lime manufacturing plants provides another example of the Agency
determining not to promulgate a NSPS for an air pollutant,
SO2, on grounds that the emissions were adequately
controlled by emissions controls required under a NSPS for another air
pollutant, PM. Standards of Performance for New Stationary Sources Lime
Manufacturing Plants, 42 FR 22506 (May 3, 1977). Although in that
rulemaking, the EPA did not explicitly state that SO2
controls would have been redundant and, thus, were unnecessary, the
Agency's reasoning was fully consistent with that characterization.
Specifically, the EPA noted that the controls it was requiring for PM
(a baghouse or an electrostatic precipitator) would achieve 85- to 90-
percent reductions in SO2, and that although the EPA could
impose further controls to achieve another 7 percent reduction in
SO2, based on the use of a scrubber, the cost would be too
high and the environmental benefits too little for that approach to be
appropriate. Id. at 22507. Accordingly, the EPA prescribed standards
for PM but not for SO2. Id. at 22509 (40 CFR 60.342). That
is, it appears that the EPA could have promulgated standards for
SO2 that required the same 85- to 90-percent level of
control achieved through compliance with the PM standards (and not the
additional 7 percent that would have necessitated installation of a
scrubber), but the Agency declined to do so. Even though the EPA did
not explicitly describe the potential SO2 NSPS as redundant
and, therefore, unnecessary, the fact that it did not promulgate any
standards for SO2 coupled with its explanation that PM
controls reduced SO2 by 85 to 90 percent make clear that the
rulemaking serves as a precedent for the present rulemaking and the
Agency's present position that the methane NSPS is redundant to the VOC
NSPS. By the same token, in the Lime Manufacturing Plants rule, the EPA
declined to promulgate NSPS for (1) nitrogen oxides (NOX)
because they are emitted in low concentrations or (2) CO because, among
other things, regulation would produce little environmental benefit.
Id. at 22507. These rationales for not adopting controls for those air
pollutants are similar to the redundancy rationale--the essential point
in all cases is that any controls would not result in meaningful
emission reductions.
In a more recent rulemaking, under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), the EPA also
declined to promulgate requirements that it considered to be redundant,
and the Court upheld that action. Under 42 U.S.C. 9608(b)(1), the EPA
is required to ``promulgate requirements . . . that classes of
facilities establish and maintain evidence of financial responsibility
consistent with the degree and duration of risk associated with the
production, transportation, treatment, storage, or disposal of
hazardous substances.'' In 2018, the EPA took an action in which it
declined to issue financial responsibility regulations for the hardrock
mining industry. Financial Responsibility Requirements Under CERCLA
Section 108(b) for Classes of Facilities in the Hardrock Mining
Industry (Final Action), 83 FR 7556, 7556 (February 21, 2018). As
summarized by the Court, the EPA stated that ``existing federal and
state programs as well as modern mining practices reduced the risk that
the EPA would be required to use the Superfund to finance response
actions at currently active mines.'' Idaho Conservation League v.
Wheeler, 930 F.3d 494, 501 (D.C. Cir. 2019) (citing 83 FR 7556). The
Court upheld that determination, stating that 42 U.S.C. 9608(b)(1)
``does not place any obligation on the EPA to issue redundant financial
responsibility requirements.'' Id. at 504-5.38 39
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\38\ In addition, as the EPA noted in the 2019 Proposal, it
``ha[s] `historically declined to propose standards for a pollutant
[that] is emit[ted] in low amounts . . . .' '' 80 FR 56599 (quoting
75 FR 54970, 54997 (September 9, 2010). This situation is similar to
the present situation in which a pollutant (methane) is fully
controlled by requirements applicable to a second pollutant (VOC).
\39\ The EPA notes that removing the applicability of the NSPS
to methane emissions does not alter the basis for the applicability
of the NSPS to VOC emissions for affected sources in the source
category, which for some affected sources have been regulated since
the 2012 Rule. To determine the best system of emission reduction
(BSER), the EPA assesses a set of factors, which include the amount
of emissions reduction, costs, energy requirements, non-air quality
impacts, and the advancement of particular types of technology or
other means of reducing emissions, and retains discretion to weight
the factors differently in any case. In the 2016 NSPS subpart OOOOa,
the EPA gave primary weight to the amount of emission reductions and
cost. The EPA describes this analysis in depth in the 2015 NSPS
subpart OOOOa proposal at 80 FR 56618 through 56620 and 80 FR 56625
through 56627. For the source types in the production and processing
segments, the NSPS requirements, considered on a VOC-only basis, are
cost effective (relatively low cost and relatively high emissions
reductions). See memorandum titled ``Control Cost and Emission
Changes under the Amendments to 40 CFR part 60, subpart OOOOa Under
Executive Order 13783,'' in the public docket for this action. The
EPA provides this information for the benefit of the public and is
not reopening the above-described determination in the 2016 NSPS
subpart OOOOa that the VOC-only requirements for sources in the
production and processing segments meet the requirements of CAA
section 111.
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One commenter cites two Court cases that it asserts support the
view that the EPA must regulate a source's emissions of a particular
pollutant under CAA section 111 even where the source already controls
those emissions because of other legal obligations. In New York v.
Reilly, 969 F.2d 1147, 1153 (D.C. Cir. 1992), the Court rejected the
EPA's argument that it need not ban the burning of lead-acid vehicle
batteries under the NSPS for municipal waste combustors because the
Resource Conservation and Recovery Act precludes the burning of lead-
acid batteries. The Court responded that ``the mere existence of other
statutory authority which might undergird EPA's final stance is
insufficient to justify the omission of the battery ban.'' In Portland
Cement Ass'n v. EPA, 665 F.3d 177, 191 (D.C. Cir. 2011), the Court
rejected legal challenges to an NSPS limit for PM that tracked a
concurrently issued PM standard adopted under CAA section 112. The
Court explained that, ``[a]lthough both the NSPS and NESHAP rulemaking
resulted in a PM emissions limit of 0.01 pounds per ton, EPA arrived at
that limit using two different mechanisms,'' and added that ``the final
rule . . . noted that kilns would have to install fabric filter
technology to comply
[[Page 57033]]
with NESHAP, . . . and the parallel NSPS rule would therefore have no
additional cost.'' The commenter states that, similarly, while the EPA
set the same BSER for methane and VOC in the 2016 Rule, the
considerations underlying the BSER analysis differs significantly for
these pollutants, which cause distinct harms. However, these cases are
distinguishable because they stand for the proposition that when two
separate statutory requirements apply, each must be given effect, and
compliance with one does not obviate the other. In the present
rulemaking, only one statutory requirement is applicable--the CAA
section 111(b)(1)(B) requirement to promulgate standards of
performance--and the EPA has determined that promulgating a standard of
performance for VOC emissions obviates the need for a standard of
performance for methane emissions from the same sources. Further, as
the EPA noted in the 2019 Proposal, the EPA has historically declined
to propose standards for a pollutant that is emitted in small amounts.
84 FR 50260. In the case of the Oil and Natural Gas Production source
category, there are no methane emissions from the sources subject to
the NSPS beyond those emissions already subject to control by the
provisions to control VOC in the NSPS. Accordingly, there is no need to
add NSPS requirements applicable to methane.
The EPA recognizes that in rescinding one set of standards in part
for its redundancy with another set, the EPA is choosing to rescind the
applicability of those standards to methane emissions and not VOC
emissions, rather than vice-versa. Rescinding the methane-specific
standards is reasonable because the requirements for VOC and
correspondingly, sources' compliance with those requirements, are
longer established than those for methane. As described earlier, the
EPA regulated VOC first, beginning in 1985 and continuing in 2012, and
then added regulation of methane for some sources in 2016.
Additionally, redundancy is not uniform across affected facilities
in the production and processing segments. All sources in the segments
are subject to VOC requirements and many are subject to methane
requirements as well. However, some sources, such as storage vessels,
are subject only to VOC requirements and not methane requirements. For
those sources, it cannot be said that regulation of VOC is redundant to
regulation of methane because the EPA has not regulated methane from
them. In addition, there are no sources that are subject to only
methane requirements. For these reasons, in choosing between the two
requirements, the EPA considers it appropriate and less disruptive to
rescind the methane standards.
Commenters asserted that the methane NSPS are not redundant to the
VOC NSPS because the former trigger the requirements in CAA section
111(d) to regulate methane from existing sources, but the VOC NSPS do
not trigger CAA section 111(d) requirements to regulate VOC from
existing sources. The commenters noted that the EPA must consider
emissions from existing sources when determining whether to list the
source category, which is the predicate to regulating a given pollutant
under CAA section 111.
The commenters are correct that methane NSPS, but not VOC NSPS,
would trigger the CAA section 111(d) requirements for existing
sources,\40\ but the fact that the methane NSPS carries with it a
trigger for CAA section 111(d) regulation of existing sources is simply
a legal consequence of the requirements of CAA section 111, and does
not undermine the EPA's conclusion that methane NSPS are redundant. Nor
does the fact that the EPA considers emissions from existing sources in
listing the source category. These conclusions are supported by the
structure of CAA section 111. This provision establishes a multi-step
process for regulation. Section 111(b)(1)(A) of the CAA directs the EPA
to list source categories for regulation, CAA section 111(b)(1)(B)
directs the EPA then to promulgate standards of performance for
pollutants emitted from new sources, and CAA section 111(d)(1) directs
the EPA then to promulgate guidelines for states to adopt standards of
performance for certain of those pollutants emitted by existing
sources. As explained above and in responses to comments, the basis for
rescinding the applicability of the standards of performance for
methane emissions is that those NSPS are redundant with the VOC NSPS.
The legal consequence of that rescission is that the EPA is not
authorized to promulgate CAA section 111(d) guidelines for existing
sources. That consequence does not negate the fact that the methane
NSPS is redundant with the VOC NSPS.
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\40\ In section VII below, we finalize our proposal that VOC
NSPS do not trigger CAA section 111(d) requirements.
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As discussed in section VII.B of this preamble, the EPA believes
that the impact of not regulating existing oil and natural gas sources
under CAA section 111(d) will be limited due to existing factors that
encourage or require control of emissions from oil and natural gas
existing sources. For comments on that view, and the EPA's response to
those comments, see section X.B of this preamble.
Additional comments and responses by the EPA on the rescission of
the applicability to methane are provided in section VIII.B of this
preamble and in Chapter 6 of the Response to Comments Document.
In the next section, the EPA concludes that the 2016 Rule's
determination that methane emissions from the source category
contribute significantly to dangerous air pollution was erroneous and
must be rescinded. Rescinding that determination also requires
rescinding the methane NSPS. The redundancy of the methane requirements
and the inadequacy of the 2016 Rule's SCF for methane are separate and
independent reasons for rescinding the methane NSPS, and, thus, are
severable from each other.
VI. Significant Contribution
The EPA is finalizing the position that the Administrator is
required to determine that methane emissions from the Crude Oil and
Natural Gas Production source category cause or contribute
significantly to GHG air pollution as a predicate for promulgating
standards of performance for methane. The EPA solicited comment on this
position in the 2019 Proposal, based on an interpretation of section
111 of the CAA, and the EPA bases this final action on a refinement of
that interpretation. Specifically, the EPA interprets the requirement
of CAA section 111(b)(1)(B) that the Administrator propose to
``establish[ ] . . . standards of performance'' and then finalize
``such standards''--together with the CAA section 111(a)(1) definition
of ``standard of performance'' as a ``standard for emissions of air
pollutants''--to limit the standards of performance to only those air
pollutants that the Administrator determined cause or contribute
significantly to dangerous air pollution when listing the source
category under CAA section 111(b)(1)(A). If the Administrator did not,
when listing the source category, determine that a particular air
pollutant causes or contributes significantly to dangerous air
pollution, then the Administrator must do so as a predicate to
promulgating standards of performance for that air pollutant.
Section VI.A of this preamble, immediately below, discusses that
interpretation of CAA section 111. In section VI.B of this preamble, we
explain how this interpretation applies
[[Page 57034]]
to the regulation of methane from the Crude Oil and Natural Gas
Production source category. In section VI.C of this preamble, we
briefly discuss criteria for making a SCF under CAA section 111.
A. Legal Interpretation Concerning the Air Pollutants That Are Subject
to CAA Section 111
1. 2019 Proposal
As noted above, CAA section 111 establishes a process for the EPA
to regulate air pollutants from industrial source categories. Section
111(b)(1)(A) of the CAA requires the first step: the Administrator must
list a particular category of stationary sources that ``causes, or
contributes significantly to, air pollution which may reasonably be
anticipated to endanger public health or welfare,'' and then, under CAA
section 111(b)(1)(B), the Administrator must proceed to promulgate
standards of performance for that source category. For convenience, we
refer to ``air pollution which may reasonably be anticipated to
endanger public health or welfare'' as dangerous air pollution, and we
refer to the reference to ``causes or contributes significantly'' as
the SCF. In the 2019 Proposal, we solicited comment on whether CAA
section 111(b)(1)(A) must be read, or reasonably could be read, to
require the Administrator to make not only a SCF to list the source
category, but also a SCF for a particular air pollutant as a predicate
to promulgating a standard of performance for that pollutant under CAA
section 111(b)(1)(B).
The EPA supported this interpretation with a detailed discussion of
the relevant statutory provisions, their context, and purpose, as well
as past administrative practice. At the outset, the EPA acknowledged
that CAA section 111(b)(1)(A) by its terms requires that the
Administrator make a SCF for the source category, and is silent on
individual air pollutants.\41\ However, the EPA noted that CAA section
111(b)(1)(A) should be read in conjunction with CAA sections
111(b)(1)(B) and 111(a)(1), which require the Administrator to
promulgate ``standards of performance,'' defined as ``standard[s] for
emissions of air pollutants.'' The EPA posited that those provisions,
read together, by virtue of their focus on emissions of air pollutants,
could be interpreted to require or authorize the EPA to require a
pollutant-specific SCF as a predicate for promulgating a standard of
performance. 84 FR 50263. The EPA acknowledged that in the past it has
not promulgated a pollutant-specific SCF, and instead has taken the
position that it may promulgate a standard of performance for a
pollutant not previously regulated under CAA section 111 as long as it
simply has a rational basis for doing so. In the 2019 Proposal, the EPA
explained that this approach is flawed because it is vague and not
guided by any statutory criteria, and that as a result, it could result
in the Agency promulgating standards for air pollutants that are
emitted in relatively minor amounts. 84 FR 50263. The Agency stated
that interpreting CAA section 111 to require a pollutant-specific SCF
as a predicate to regulating the pollutant would guard against this
possibility.\42\
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\41\ It should be noted that even though CAA section
111(b)(1)(A) is clear in requiring a SCF for the source category,
its silence as to individual air pollutants, which of course are
what causes or contributes significantly to dangerous air pollution
and are the subject of regulation, leaves to the EPA the task of
addressing individual air pollutants.
\42\ The EPA went on to review other provisions in the CAA that
explicitly require a pollutant-specific SCF; the legislative history
accompanying these provisions; the references in another CAA section
111 provision, CAA section 111(f)(2)(A) and (B), to the impacts of
particular pollutants on dangerous air pollution; and previous
interpretations that the EPA had made of the CAA section 111
requirements concerning individual air pollutants. 84 FR 50263-67.
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2. Comments
The EPA received comment on all aspects of its solicitation of
comment. Some commenters supported the EPA's arguments and urged the
Agency to finalize an interpretation that requires the Administrator to
make a pollutant-specific SCF as a predicate to promulgating standards
of performance for that pollutant from a source category. Other
commenters opposed this interpretation and sought to counter the
support for it that the EPA offered. They argued that under CAA section
111(b)(1)(A), the SCF applies only to source categories. They further
argued that the references in CAA sections 111(b)(1)(B) and 111(a)(1)
to air pollutants are unremarkable because standards of performance
necessarily apply to particular air pollutants, and should not be read
to elucidate the meaning of CAA section 111(b)(1)(A) in the manner the
EPA suggested.\43\ These comments are discussed in more detail in
section IX of this preamble and in Chapter 8 of the Response to
Comments Document located in the docket for this rulemaking.
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\43\ The commenters objected to the EPA's interpretation of
other CAA provisions, of legislative history, and of other
provisions of CAA section 111, as well as the EPA's interpretations
of CAA section 111 in earlier administrative actions. We discuss
these comments in the Response to Comments Document located in the
public docket of this final rulemaking.
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3. Final Action
The EPA is finalizing the position that CAA section 111 requires,
or at least authorizes the Administrator to require a pollutant-
specific SCF as a predicate for promulgating a standard of performance
for that air pollutant. The EPA bases this position primarily on a
refinement of the interpretation of CAA section 111, described above,
on which it solicited comment. Specifically, the EPA interprets the CAA
section 111(b)(1)(B) requirement that the Administrator propose to
``establish[ ] . . . standards of performance'' and then finalize
``such standards with such modifications as he deems appropriate,'' in
light of both the CAA section 111(a)(1) definition of ``standard of
performance'' as a ``standard for emissions of air pollutants,'' and
CAA section 111(b)(1)(A), which requires the Administrator to list a
source category only ``if in his judgment it causes, or contributes
significantly to [dangerous] air pollution.'' Read in this context, CAA
section 111(b)(1)(B) is best understood not to require the
Administrator to promulgate standards for emissions of all air
pollutants but only to require him or her to promulgate standards for
the emissions of air pollutants that the Administrator has determined
``cause or contribute significantly'' to the ``air pollution'' that the
Administrator determined to be dangerous when listing the source
category. Under this interpretation, if the Administrator did not, in
listing the source category, determine that a particular air pollutant
causes or contributes significantly to the dangerous air pollution,
section 111 requires the Administrator to make--or, at least,
authorizes the Administrator to require--a pollutant-specific SCF as a
predicate to regulating that air pollutant.\44\
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\44\ Although this interpretation is a refinement of the
interpretation for which the EPA solicited comment in the 2019
Proposal, it is rooted in the Proposal. As noted in the summary
above, in supporting the interpretation that CAA section
111(b)(1)(A) requires or authorizes the EPA to require a pollutant-
specific SCF, the EPA made numerous references to CAA sections
111(a)(1) and 111(b)(1)(B), and made clear that those three
provisions must be read together. The EPA made other references as
well to the need to make a pollutant-specific SCF in order to
promulgate standards of performance, which is the thrust of the
interpretation described in this final action. See Id. at 50262-63.
The rational basis approach was an interpretation of CAA section
111(b)(1)(B). That is, under this approach, the EPA interpreted that
provision to authorize standards of performance for those air
pollutants for which the EPA had a rational basis, but not
necessarily standards for all air pollutants. See 81 FR 35842 (2016
Rule), cited in 84 FR 50262 (2019 Proposal). This approach is
similar to the pollutant-specific SCF approach. By the same token,
the EPA's discussions in the 2019 Proposal of the legislative
history, CAA section 111(f), and previous statements the EPA made in
support documents all contain references to a pollutant-specific SCF
as a predicate for promulgating standards of performance. 84 FR
50263 through 67.
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[[Page 57035]]
4. Legal Interpretation of CAA Sections 111(a)(1), (b)(1)(B), and
(b)(1)(A) and the Pollutants Subject to Regulation
The EPA interprets CAA sections 111(b)(1)(B), in light of CAA
sections (b)(1)(A) and (a)(1), to require, or at least to authorize the
Administrator to require, a pollutant-specific SCF as a predicate for
promulgating a standard of performance for that air pollutant. The EPA
bases this interpretation on a close reading of these provisions in the
context of CAA section 111. CAA section 111 directs the EPA to
regulate, through a multi-step process, air pollutants from categories
of stationary sources. CAA section 111(b)(1)(A) requires the initial
action, which is that the Administrator must ``publish . . . a list of
categories of stationary sources. He shall include a category of
sources in such list if in his judgment it causes, or contributes
significantly to, air pollution which may reasonably be anticipated to
endanger public health or welfare.'' This provision does not by its
terms require the Administrator, in listing a source category, to
identify particular air pollutants of concern that are emitted from the
source category, but it does make clear that the Administrator must
identify air pollution that is of concern and must make a finding that
this air pollution, in our shorthand, is dangerous.
CAA section 111(b)(1)(B) then directs the EPA to propose
regulations ``establishing Federal standards of performance'' for new
sources within the source category, then to allow public comment, and
then to ``promulgate . . . such standards with such modifications as he
deems appropriate.'' CAA section 111(a)(1) defines the term ``standard
of performance'' as ``a standard for emissions of air pollutants which
[the Administrator is required to determine through a specified
methodology].'' This definition makes clear that the standards of
performance that CAA section 111(b)(1)(A) directs the Administrator to
promulgate must concern air pollutants emitted from the sources in the
source category. However, industrial sources of the type subject to CAA
section 111(b)(1)(A) invariably emit more than one air pollutant and
neither CAA section 111(b)(1)(B) nor 111(a)(1) by its terms specifies
for which of those air pollutants the EPA must promulgate standards of
performance.
But the statute does provide guidance as to the class of air
pollutants for which the EPA must promulgate standards of performance.
Section 111(b)(1)(A) of the CAA demonstrates that the statutory scheme
of CAA section 111 is aimed at controlling ``air pollution which may
reasonably be anticipated to endanger public health or welfare.'' It
follows that the air pollutants for which the Administrator must
establish standards must, or at least may reasonably, be limited to
those air pollutants which contribute to this dangerous air pollution.
The Administrator's discretion to limit the class of air pollutants
for which he promulgates standards is supported by his statutory
discretion under CAA section 111(b)(1)(B) to finalize standards ``with
such modifications as he deems appropriate.'' In an exercise of this
discretion, the Administrator deems it appropriate to limit the
standards of performance to those air pollutants that contribute to
dangerous air pollution.
Several other provisions in CAA section 111 also refer to air
pollutants, including CAA section 111(b)(3), which requires the
Administrator to, ``from time to time, issue information on pollution
control techniques for categories of new sources and air pollutants
subject to the provisions of this section.'' This reference to ``air
pollutants subject to the provisions of this section'' (emphasis added)
implies that some air pollutants may not be subject to CAA section 111;
otherwise, the emphasized phrase would be superfluous.\45\
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\45\ Similarly, CAA section 111(d)(1)(A) makes clear by its
terms that ``a standard of performance under this section'' need not
govern all pollutants emitted from a regulated source to give effect
to Congress's purpose. The requirements of CAA section 111(d)(1)(A)
apply to only a subset of air pollutants, that is, ``any air
pollutant . . . for which air quality criteria have not been issued
or which is not included on a list published under section 7408(a)
of this title or emitted from a source category which is regulated
under section 7412 of this title but . . . to which a standard of
performance under this section would apply if such existing source
were a new source.''
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As noted in the 2019 Proposal, in the past, the EPA has interpreted
CAA section 111(b)(1)(B) to authorize it to promulgate standards of
performance for any air pollutant that the EPA identified in listing
the source category and any additional air pollutant for which the EPA
has identified a rational basis for regulation. 81 FR 35843 (2016 Oil &
Gas Methane Rule); ``Standards of Performance for Greenhouse Gas
Emissions from New, Modified, and Reconstructed Stationary Sources:
Electric Utility Generating Units--Final Rule,'' 80 FR 64510 (October
23, 2015) (EGU CO2 NSPS Rule). Inherent in this approach is
the recognition that CAA section 111(b)(1)(A) does not, by its terms,
necessarily require the EPA to promulgate standards of performance for
all air pollutants emitting from the source category. Citizen group
stakeholders and some states have endorsed the rational basis approach.
Some industry stakeholders and other states, however, have advocated a
narrower approach with respect to, at least, the GHG for which the EPA
promulgated standards of performance for the Fossil Fuel-Fired Electric
Utility Generating Units source category and the Crude Oil and Natural
Gas Production source category. The stakeholders argued that under this
narrower approach, the EPA is not authorized to promulgate NSPS for at
least GHG unless it first makes a SCF with respect to that pollutant.
The EPA interprets the phrase at issue in CAA section 111(b)(1)(B),
``standards of performance,'' and the associated phrase in CAA section
111(a)(1), ``emissions of air pollutants,'' by analogy to the similar
phrase, ``any air pollutant,'' found in the CAA permitting provisions
that the U.S. Supreme Court considered in Utility Air Regulatory Group
v. EPA, 573 U.S. 302 (2014) (UARG). In UARG, the Court interpreted CAA
section 169(1), which provides construction and modification permitting
requirements under the Prevention of Significant Deterioration (PSD)
program, and CAA sections 501(2)(B) and 302(j), which provide the
operating permit requirements of the title V program. The Court
concluded that when read in the context of the permitting provisions,
the phrase ``any air pollutant'' did not encompass GHG, even though
they are air pollutants. The EPA considers that the analytical approach
that the Court adopted in UARG also applies to CAA section
111(b)(1)(B). Under this approach, the provisions in that section that
direct the Administrator to establish ``standards of performance'' for
new sources in the source category, require, or at least reasonably
allow, the Administrator to promulgate standards for only those air
pollutants for which the EPA has made a SCF.
The EPA considers the same analytical approach to support
interpreting ``emissions of air pollutants'' in CAA section 111(a)(1)
to encompass only those air pollutants for which the EPA has made a
SCF. Under the PSD requirements, no ``major emitting facility'' may be
constructed or
[[Page 57036]]
modified in certain areas of the U.S. unless it has received a permit
that includes certain conditions and emission limits. CAA section
165(a)(1). In the PSD definitional provisions, CAA section 169(1)
defines the term ``major emitting facility'' as any stationary source
of air pollutants that emits, or has the potential to emit, at least
100 or 250 tpy (depending on the source) of ``any air pollutant.'' See
CAA sections 169(2)(C), 111(a)(4) (defining ``construction'' to include
``modification,'' which in turn is defined to mean, in relevant part, a
certain type of change that increases the amount of ``any air
pollutant'' emitted by the source). Title V makes it unlawful to
operate a ``major source'' without an operating permit that includes
all applicable CAA requirements. Title V defines a ``major source'' by
incorporating the CAA-wide definition of ``major stationary source:'' A
stationary source that emits or has the potential to emit at least 100
tons per year of ``any air pollutant.'' CAA section 501(2)(B), 302(j).
In a 2010 rule, ``Prevention of Significant Deterioration and Title
V Greenhouse Gas Tailoring Rule,'' 75 FR 31514 (June 3, 2010)
(Tailoring Rule), the EPA took the position that the phrase ``any air
pollutant'' in these provisions necessarily included GHG, based on the
2007 decision by the U.S. Supreme Court that the CAA-wide definition of
``air pollutant,'' CAA section 302(g), encompasses GHG. Massachusetts
v. EPA, 549 U.S. 497 (2007). The EPA's interpretation, however, created
practical problems, which the Agency recognized in the Tailoring Rule:
It would cause numerous commercial and small industrial sources to
become subject to the permitting requirements, which were burdensome
and which Congress designed to apply only to large industrial sources
that were equipped to carry those burdens. UARG, 573 U.S. at 310-11
(citing 73 FR 44355, 44498 and 99).
UARG held that the EPA's interpretation of the PSD and title V
provisions was unreasonable, and that the phrase ``any air pollutant''
in these provisions did not include GHG. The Court adopted a two-step
analysis. First, the Court found that the fact that the CAA-wide
definition of ``air pollutant'' included GHG did not mean that all the
references to ``air pollutant'' in the CAA's operative provisions
necessarily include GHG; rather, whether the term included GHG was
dependent on the context of the particular operative provision. 573
U.S. at 316. The Court found support for this position in the fact that
``where the term `air pollutant' appears in the Act's operative
provisions, EPA has routinely given it a narrower, context-appropriate
meaning.'' Id. The Court explained that the EPA had already interpreted
``any air pollutant'' in the permitting provisions to be limited to
``regulated'' air pollutants, which the Court described as ``a
reasonable, context-appropriate meaning.'' Id. at 316-17. The Court
identified several other provisions ``where EPA has inferred from
statutory context that a generic reference to air pollutants does not
encompass every substance falling within the Act-wide definition.'' For
example, and of particular significance here, the Court noted that CAA
section 111(a)(4), read together with CAA sections 111(a)(2) and
(b)(1)(B), applies NSPS requirements to a source that undergoes a
physical or operational change that increases its emission of ``any air
pollutant,'' but the EPA interprets this provision as limited to air
pollutants for which the EPA has promulgated standards of performance.
573 U.S. at 317. Similarly, the Court noted that CAA sections
169A(b)(2)(A) and (g)(7) require a certain type of source that
interferes with visibility to retrofit if it has the potential to emit
250 tpy of ``any pollutant,'' but that the EPA interprets this
provision as limited to visibility-impairing air pollutants. 573 U.S.
at 318. The Court emphasized that Massachusetts did not call these
interpretations into question; rather, according to the Court,
``Massachusetts does not foreclose the Agency's use of statutory
context to infer that certain of the Act's provisions use `air
pollutant' to denote not every conceivable airborne substance, but only
those that may sensibly be encompassed within the particular regulatory
program.'' 573 U.S. at 319. Therefore, in this first step, the Court
concluded that the CAA did not compel the EPA to interpret the phrase
``any air pollutant'' in the permitting provisions to include GHG.
Second, the Court found that the EPA did not have the discretion to
interpret this phrase to include GHG, because it was unreasonable to do
so in light of the permitting provisions. The Court explained that
including GHG would expand the permitting programs to large numbers of
small sources, but that ``a brief review of the relevant statutory
provisions leaves no doubt that the PSD program and Title V are
designed to apply to, and cannot rationally be extended beyond, a
relative handful of large sources capable of shouldering heavy
substantive and procedural burdens.'' Id. at 322. The Court went on to
describe the various PSD and title V statutory requirements that are
resource-intensive and time-consuming, and, therefore, incompatible
with application to large numbers of small sources. Id. at 322-23.
The EPA is adopting UARG's two-step analytical approach to conclude
that, in light of its context, CAA section 111(b)(1)(B) does not
mandate, and cannot reasonably be read to authorize, the EPA to
promulgate standards of performance for an air pollutant for which the
EPA has not made a SCF. At a minimum, even if these provisions are not
read to preclude the EPA from promulgating standards of performance
without first making a pollutant-specific SCF, it is reasonable to
interpret these provisions as authorizing the EPA to decline to
promulgate standards without first making such a SCF. UARG was explicit
that provisions of CAA section 111 are subject to its analytical
approach. As noted above, the Court endorsed the EPA's interpretation
that, notwithstanding the reference to ``any air pollutant'' in CAA
section 111(a)(4), the requirements concerning a ``modification'' in
CAA section 111(b)(1)(B), which is at issue here, and CAA sections
111(a)(2) and (4) do not require the EPA to promulgate standards for
every pollutant that a modified source emits, because those provisions
must be understood in context to embrace a limited set of air
pollutants. 573 U.S. at 317.
As is clear from the EPA's summary above of the CAA section 111
rulemaking process, the first action that the EPA must take, specified
in CAA section 111(b)(1)(A), is to list a source category for
regulation on the basis of a determination that the category
contributes significantly to dangerous air pollution, and it is this
provision that establishes the context that is relevant for present
purposes. This provision makes clear that although Congress designed
CAA section 111 to apply broadly to source categories of all types
wherever located, Congress also imposed a constraint: The EPA is
authorized to regulate only sources that it finds cause or contribute
significantly to air pollution that the EPA finds to be dangerous.
Congress' direction to EPA to promulgate standards of performance
for the sources in the category, under CAA section 111(b)(1)(B), must
be viewed in this context. Congress did not specify which air
pollutants the standards of performance must address, stating only, as
noted above, in the definitional provisions of CAA section 111 that the
term ``standard of performance'' means a standard for
[[Page 57037]]
``emissions of air pollutants.'' This phrase is substantially similar
to the phrase ``any air pollutant'' in the PSD and Title V provisions
addressed in UARG. In fact, ``emissions of air pollutants'' appears to
be less encompassing than ``any air pollutant.'' As the U.S. Supreme
Court has noted, ``Read naturally, the word `any' has an expansive
meaning, that is, `one or some indiscriminately of whatever kind.'
Webster's Third New International Dictionary 97 (1976).'' United States
v. Gonzales, 520 U.S. 1, 4, 1997), quoted in Department of Housing and
Urban Development v. Rucker, 535 U.S. 125, 131 (2002), cited in
Massachusetts, 549 U.S. at 529 n.25.
Under the analytical approach of UARG, because the regulatory scope
of the CAA's ``operative provisions,'' such as CAA sections
111(b)(1)(B) and 111(a)(1), must be understood in context, their
reference to ``standards of performance'' and ``emissions of air
pollutants'' cannot be read to mandate promulgation of standards of
performance for each and every air pollutant emitted from the source
category. In addition, because Congress limited the EPA to regulating
only stationary sources in a category that the Administrator must first
determine to cause or contribute significantly to dangerous air
pollution, it is not reasonable to read ``air pollutants'' to refer to
any of the source category's air pollutants for which the EPA has not
made a SCF. At the very least, it is reasonable to interpret that
phrase more narrowly. As noted in the 2019 Proposal, interpreting the
CAA section 111 provisions to authorize the EPA to regulate any air
pollutant, even ones that the EPA did not consider in listing the
source category, creates the risk that the EPA may regulate air
pollutants emitted in small quantities or otherwise having little
adverse effect.\46\
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\46\ As should be clear from this discussion immediately above,
this interpretation of CAA sections 111(b)(1)(B) and (a)(1) differ
from the interpretation of CAA section 111(b)(1)(A) that the EPA
described in the 2019 Proposal. See 84 FR 50263 (stating that
interpreting CAA section 111(b)(1)(B), the EPA was mindful that an
Agency ``[may] avoid a literal interpretation at Chevron step one .
. . [by] show[ing] either that, as a matter of historical fact,
Congress did not mean what it appears to have said, or that, as a
matter of logic and statutory structure, it almost surely could not
have meant it'' (citation omitted)).
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It is true that, recently, the EPA has adopted the approach of
regulating additional air pollutants that it did not address in the
listing determination only after determining that it has a rational
basis for doing so, and in making that determination, has considered
the same factors as it would in making a SCF. 81 FR 35843 (2016 Rule).
However, this approach is a creature of Agency practice and, therefore,
is not as firmly established as statutory requirements. As noted in the
2019 Proposal, interpreting CAA section 111 to require only a
pollutant-specific rational basis standard, and not a SCF, could lead
to potentially anomalous results when the Agency, after listing a
source category on grounds that its emissions taken together contribute
significantly to dangerous air pollution, proceeds to promulgate NSPS
for individual air pollutants. EPA stated that, as an example, under
the rational basis interpretation, the EPA could list a source category
on grounds that it emits numerous air pollutants that, taken together,
significantly contribute to air pollution that may reasonably be
anticipated to endanger public health or welfare, and proceed to
regulate each of those pollutants, without ever finding that each (or
any) of those air pollutants by itself causes or contributes
significantly to--or, in terms of the text of other provisions, causes
or contributes to--air pollution that may reasonably be anticipated to
endanger public health or welfare. 84 FR 50263. As further noted in the
2019 Proposal, CAA section 111(b)(1)(A) does not provide or suggest any
criteria to define the rational basis approach, the EPA has not
articulated any criteria in its previous applications in the EGU
CO2 NSPS and the 2016 subpart OOOOa rules, and in instances
before those rules in which the EPA has relied on the ``rational
basis'' approach, the EPA has done so to justify not setting a standard
for a given pollutant, rather than to justify setting such a standard.
Id. Thus, the rational basis test allows the EPA virtually unfettered
discretion in determining which air pollutants to regulate. As a
result, the rational basis standard creates the possibility that the
EPA could seek to promulgate NSPS for pollutants that may be emitted in
relatively minor amounts, as the EPA noted in the 2019 Proposal. 84 FR
50263. As noted in section IX below, numerous commenters reiterated
these concerns.
In contrast, CAA section 111(b)(1)(A) is clear that the EPA may
list a source category for regulation only if the EPA determines that
the source category ``causes or contributes significantly'' (emphasis
added) to dangerous air pollution. In light of the stringency of this
statutory requirement for listing a source category, it would be
unreasonable to interpret CAA section 111(b)(1)(B) to allow the Agency
to regulate air pollutants from the source category merely by making an
administrative determination under the open-ended and undefined
rational basis test. Rather, it is logical to interpret CAA section
111(b)(1)(B) to require that the Agency apply the same degree of rigor
in determining which air pollutants to regulate as it does in
determining which source categories to list for regulation.
For these reasons, the EPA concludes that in the context of CAA
section 111, the requirement that the EPA promulgate ``standards of
performance,'' (CAA section 111(b)(1)(B)), defined as ``standard[s] for
emissions of air pollutants'' (CAA section 111(a)(1)), must be
interpreted to require a pollutant-specific SCF (CAA section
111(b)(1)(A)) as a predicate for promulgating standards of performance.
At a minimum, the Agency considers this interpretation to be reasonable
and, accordingly, adopts it. Requiring a pollutant-specific SCF
establishes a clearer framework for assessing which air pollutants
merit regulatory attention that will require sources to bear control
costs. This promotes regulatory certainty for stakeholders and
consistency in the EPA's identification of which air pollutants to
regulate and reduces the risk that air pollutants that do not merit
regulation will nevertheless become subject to regulation due to an
unduly vague standard.
In the 2019 Proposal, the EPA solicited comment on whether to
interpret CAA section 111(b)(1)(A) to require a determination that the
pollutant causes or contributes significantly to dangerous air
pollution (the SCF) or instead, to interpret it to require a
determination that the pollutant simply causes or contributes to
dangerous air pollution. 84 FR 50261. The same issue arises with
respect to CAA sections 111(b)(1)(B) and (a)(1), but the EPA has
concluded that interpreting these provisions to require a SCF as the
pollutant-specific finding is consistent with the source-category SCF
in CAA section 111(b)(1)(A). That is, in light of Congress' clearly
expressed intent in CAA section 111(b)(1)(A) that the EPA base its
listing of a source category on a finding that the emissions from the
source category contribute significantly to dangerous air pollution,
the EPA concludes that CAA sections 111(b)(1)(B) and (a)(1) require the
EPA to base its regulation of a pollutant on a similarly rigorous
finding that the pollutant contributes significantly to dangerous air
pollution. If, in the alternative, the statute is ambiguous in this
regard, the EPA exercises its
[[Page 57038]]
discretion to interpret it to require a pollutant-specific SCF.
In the 2019 Proposal, the EPA noted that interpreting CAA section
111 to require a pollutant-specific SCF as a predicate to regulation
``need not result in duplicative SCFs (or duplicative associated
endangerment findings). That is, the EPA would not need to make
separate SCFs (and associated endangerment findings) for both the
source category and each pollutant emitted by the source category that
the EPA seeks to regulate.'' 84 FR 50266. The EPA continues to hold
this view. In identifying any new source categories under CAA section
111(b)(1)(A), the EPA could identify each air pollutant of concern and
make a SCF, as appropriate, for emissions of each of those pollutants
from the source category, and, in that same action, make the SCF for
the source category itself. In addition, in the 2019 Proposal, the EPA
solicited comment on what implications interpreting CAA section 111 to
require a pollutant-specific SCF would give rise to for already
promulgated standards of performance. Id. The EPA believes that
standards of performance will generally not be affected by this
requirement because generally, the EPA identified and analyzed the air
pollutants of concern when the EPA listed a source category, or
initiated promulgation of standards of performance at the same time or
shortly after listing the source category, and, therefore, in
association with the significance determination the Agency made in that
listing. For example, as noted elsewhere, the EPA followed that process
when it listed the Crude Oil and Natural Gas Production source
category, that is, it identified and analyzed the air pollutants of
concern at that time in the supporting documents. Importantly, the EPA
relied on its analyses of those air pollutants as the basis for
determining that the source categories' emissions contribute
significantly to dangerous air pollution.\47\
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\47\ The EPA also took the approach in the 2016 Rule that it is
revising here, when it attempted to expand the Crude Oil and Natural
Gas Production source category. It discussed the pollutant
emissions, including GHG, VOC, and SO2, made a SCF for
those emissions, and, on the basis of that SCF, listed the expanded
source category. 81 FR 35837 through 40.
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B. Flaws in the 2016 Rule's Significant Contribution Finding
When the Administrator listed the oil and natural gas industry as a
source category in 1979, he did not determine that methane emissions
from the source category cause or contribute significantly to dangerous
air pollution. In this rulemaking, the EPA is taking the position that
the EPA must make that determination as a predicate to promulgating
standards of performance for methane from this source category. The
Administrator did determine in the 2016 Rule that methane from the
source category contributes significantly to dangerous air pollution,
but that determination was flawed and must be rescinded for two
reasons: (1) The Administrator made that determination on the basis of
methane emissions from the production, processing, and transmission and
storage segments, instead of just the production and processing
segments; and (2) the Administrator failed to support that
determination with either established criteria or some type of
reasonably explained and intelligible standard or threshold for
determining when an air pollutant contributes significantly to
dangerous air pollution.
1. Improper Scope of Source Category
In the 2016 Rule, the Administrator made the significant
contribution finding on the basis of assessing methane emissions from
the source category as defined to include the production, processing,
and transmission and storage segments. In the present action, we are
removing the transmission and storage segment, leaving only the
production and processing segments. Because the 2016 Rule did not
assess whether methane emissions from the production and processing
segments alone cause or contribute significantly to dangerous air
pollution, we find that the Rule's determination is not adequate and,
therefore, we are rescinding it. Until the EPA makes an appropriate
determination that methane emissions from the Oil and Natural Gas
source category, properly calculated, contribute significantly to
dangerous air pollution, it does not have authority to promulgate
standards of performance for methane from these sources under CAA
section 111(b)(1)(b).
2. Lack of Criteria or Standard for Determining Significant
Contribution
In the 2019 Proposal, the EPA ``solicit[ed] comment on the question
of whether the SCF in the 2016 . . . [R]ule can be considered
appropriate given that nowhere in the course of developing and
promulgating that rule did the EPA set forth the standard by which the
`significance' of the contribution of the methane emissions from the
source category (as revised) was to be assessed.'' 84 FR 50267. The EPA
elaborated that it was asking for comment on whether, as a matter of
law, under CAA section 111, the EPA is obligated to identify the
standard by which it determines whether a source category's emissions
``contribute significantly,'' and whether, if not so obligated, the EPA
nevertheless fails to engage in reasoned decision-making by not
identifying that standard. Id. The EPA cited Motor Vehicle Mfrs. Assn.
of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S.
29, 43 (1983), which states, ``Normally, an agency rule would be
arbitrary and capricious if the agency has . . . entirely failed to
consider an important aspect of the problem.''. Id. See Department of
Homeland Security v. Regents of Univ. of Cal., No. 18-587, slip op. at
18 (U.S. June 18, 2020) (executive action to rescind the Deferred
Action for Childhood Arrivals program failed to provide a reasoned
explanation when it failed to consider certain ``conspicuous issues'').
For the reasons that follow, the EPA concludes that the failure to
identify any such standard or any established set of criteria for the
2016 Rule's SCF for methane emissions from the source category is
unreasonable and requires rescinding the 2016 Rule's SCF.
As the EPA noted in the 2019 Proposal, the ``contributes
significantly'' provision in CAA section 111(b)(1)(A) is ambiguous. See
84 FR 50267-68 (citing EPA v. EME Homer City Generation, L.P., 572 U.S.
489 (2014) (holding that a similar provision in CAA section
110(a)(2)(D)(i), often termed the ``good neighbor'' provision, is
ambiguous)). Accordingly, the EPA has authority to interpret that
provision. Id. at 50268. As noted above, the EPA reads CAA section
111(b)(1)(B) in light of CAA sections 111(b)(1)(A) and (a)(1) to
incorporate the ``contributes significantly'' standard in connection
with promulgating NSPS for particular air pollutants. The EPA has
concluded that to allow the EPA to distinguish between a contribution
and a significant contribution to dangerous pollution, some type of
(reasonably explained and intelligible) standard and/or established set
of criteria that can be consistently applied is necessary. Without at
least one or the other, it is impossible to evaluate whether the SCF is
well reasoned. Therefore, the lack of a standard or established set of
criteria for the 2016 Rule's SCF renders the finding arbitrary and
capricious. A supporting basis for this conclusion can be found in the
EPA's analysis of the ``contribute significantly'' provisions of CAA
section 189(e), concerning major stationary sources of PM with a
diameter of 10 micrometers or less (PM10). This provision
requires that the
[[Page 57039]]
control requirements applicable to major stationary sources of
PM10 also apply to major stationary sources of
PM10 precursors ``except where the Administrator determines
that such sources [of precursors] do not contribute significantly to
PM10 levels which exceed the standard in the area.'' As the
EPA noted in the 2019 Proposal, in CAA section 189(e), Congress
intended that, in order to be subject to regulation, the emissions must
have a greater impact than a simple contribution not characterized as a
significant contribution. However, Congress did not quantify how much
greater. Therefore, the EPA developed criteria for identifying whether
the impact of a particular precursor would ``contribute significantly''
to a NAAQS exceedance. 84 FR 50268. These criteria included numerical
thresholds. Id.
The EPA has concluded similarly that, under CAA section 111(b), a
standard or an established set of a criteria, or perhaps both, are
necessary to identify what is significant and what is not. Moreover,
without either, any determination of significance is arbitrary and
capricious because it does not identify a reasoned basis for that
determination.\48\ This is evident in the flawed significance finding
in the 2016 Rule. There, the EPA determined that ``the collective GHG
emissions from the oil and natural gas source category are
significant'' and based that determination on several facts concerning
the amount of methane emissions from the Oil and Gas source category,
in comparison to other domestic and global emissions. Specifically, the
EPA stated that oil and gas GHG emissions are significant, whether the
comparison is (i) ``domestic'' (noting that this sector is ``the
largest source of methane emissions, accounting for 32 percent of
United States methane and 3.4 percent of total United States emissions
of all GHG''), (ii) ``global'' (noting that this sector, ``while
accounting for 0.5 percent of all global GHG emissions, emits more than
the total national emissions of over 150 countries, and combined
emissions of over 50 countries''), or (iii) ``when both the domestic
and global GHG emissions comparisons are viewed in combination.'' 81 FR
35840. The EPA did add a qualitative assessment of those facts. It
noted that ``no single GHG source category dominates on the global
scale,'' noted further that the oil and natural gas source category,
``like many (if not all) individual GHG source categories, could appear
small in comparison to total emissions,'' and asserted that
nevertheless, ``in fact, it is a very important contributor in terms of
both absolute emissions, and in comparison to other source categories
globally or within the United States.'' Id. However, the EPA did not
identify any set of criteria by which to evaluate those facts and to
ensure that those facts constituted the comprehensive set of data for
determining significance. In contrast, when the EPA determines whether
an area should be designated nonattainment on grounds that it
``contributes'' to ambient air quality problems in a nearby area, the
EPA applies an established set of criteria that identify the relevant
sets of data to analyze and explain how to analyze them. See Catawba
Cty. v. EPA, 571 F.3d 20, 39-40 (DC Cir. 2009) (Catawba) (holding that
in determining whether an area ``contributes'' to downwind ozone air
quality problems, the EPA, ``[t]o be reasonable . . . must . . . define
and explain the criteria the agency is applying''; explaining that the
EPA adopted a set of nine criteria that it defined and explained ``in
spades''). These criteria help ensure that the EPA's decision-making is
well-reasoned and consistent. The EPA considers it particularly
important to develop a set of criteria and/or a standard in order to
determine when a significant contribution occurs, in order, as noted
above, to distinguish it from a simple contribution. A contribution can
be greater or lesser and remain a contribution, but a significant
contribution determination necessarily involves a judgment about the
degree of the contribution that rises to the level of significance. For
such a judgment to be meaningful (and to be understood by regulated
parties and by the public), the Agency must identify the criteria it
will use to determine significance. In the 2016 Rule's significance
finding, the EPA did not identify such criteria.
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\48\ As noted in the 2019 Proposal, in a 1994 rule concerning
CAA section 213(a), which requires the EPA to make a finding that
air pollutant emissions from new and existing nonroad engines and
vehicles are ``significant contributors'' to dangerous air
pollution, the EPA determined that it is not necessary to establish
a ``specific numerical standard'' for determining significance. 84
FR 50268 (citing 59 FR 31306 and 31308 (June 17, 1994)). However,
more recently, as further noted in the 2019 Proposal, the EPA
promulgated criteria to interpret and apply ``contribute
significantly'' in the ``good neighbor'' provision, CAA section
110(a)(2)(D)(i). 84 FR 50267 and 68 (discussing the criteria and the
EPA's use of them in the Cross State Air Pollution Rule, which the
U.S. Supreme Court upheld in EPA v. EME Homer City Generation, LP.,
572 U.S. 489 (2014)). In Coalition for Responsible Regulation v. EPA
(CRR), the Court considered a challenge to the EPA's 2009
determination under CAA section 202(a) that GHG air pollution may
reasonably be anticipated to endanger public health and welfare (the
GHG Endangerment Finding) on grounds that the EPA had failed to
quantify a threshold amount of GHG air pollution that would be safe
and that, as a result, the EPA had no basis for concluding that the
current amount may endanger. 684 F.3d 102, 122-23 (DC Cir. 2012),
aff'd in part and rev'd in part on other grounds sub nom. Utility
Air Regulatory Group v. EPA, 573 U.S. 302 (2014). The Court upheld
the GHG Endangerment Finding, concluding that the EPA based it on an
overall assessment of risk--accounting for ``the precautionary
thrust of the CAA and the multivariate and sometimes uncertain
nature of climate science''--for which no quantitative threshold is
necessary. Id. at 123. That case is distinguishable because it
focused on the endangerment finding for GHG air pollution, not on
the amount of contribution that GHG emissions make to that air
pollution. In any event, the contribution requirement of section
202(a)(1) requires only a simple contribution determination, not a
significant contribution.
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Nor did the EPA identify any threshold against which to compare the
cited facts concerning methane emissions, and thereby assess their
importance, much less explain why a contribution above such a threshold
should be deemed significant while a contribution below it should not.
Thus, for example, although the EPA justified the significance
determination, in part, on grounds that the source category's emissions
constitute 3.4 percent of total U.S. GHG emissions and 0.5 percent of
all global GHG emissions, the EPA did not explain why either of those
facts supports the significance determination. Because the EPA did not
identify a threshold or criteria for evaluating the oil and gas
industry's percentage of domestic or global GHG emissions, the EPA
could not justify the 2016 Rule's SCF. As a result, that determination
cannot be considered the result of reasoned and appropriate decision-
making.\49\ The EPA intends to begin
[[Page 57040]]
rulemaking shortly to identify thresholds and/or criteria and to apply
them in future significance determinations.
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\49\ In the EGU CO2 NSPS Rule, the EPA determined, in
the alternative, that CO2 emissions from fossil fuel-
fired EGUs contribute significantly to dangerous air pollution. The
EPA explained that fossil fuel-fired EGUs ``emit almost one-third of
all U.S. GHG emissions, and are responsible for almost three times
as much as the emissions from the next ten stationary source
categories combined.'' The EPA added that ``[t]he CO2
emissions from even a single new coal-fired power plant may amount
to millions of tons each year,'' and that ``the CO2
emissions from even a single NGCC unit may amount to one million or
more tons per year.'' The EPA also asserted that in that rulemaking,
``[i]t is not necessary'' for the EPA ``to decide whether it must
identify a specific threshold for the amount of emissions from a
source category that constitutes a significant contribution.'' The
EPA explained that ``under any reasonable threshold or definition,
the emissions from combustion turbines and steam generators are a
significant contribution.'' 80 FR 64531. In 2018, the EPA proposed
to revise the EGU CO2 NSPS Rule, and solicited comment on
whether a SCF for GHG emissions from fossil fuel-fired EGUs was a
necessary predicate for promulgating a NSPS for those emissions.
``Review of Standards of Performance for Greenhouse Gas Emissions
From New, Modified, and Reconstructed Stationary Sources: Electric
Utility Generating Units--Proposed Rule, 83 FR 65424, 65432 n.25
(December 20, 2018). While the EPA has not taken final action for
that rule, the unique CO2 emissions profile of fossil
fuel-fired EGUs should be noted: The volume of emissions from EGUs
dwarfs the amount of GHG emissions from every other source category.
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Commenters objected that the 2016 Rule's SCF should not be
considered invalid due to the lack of a standard by which to assess
significant contribution, citing Mississippi Commission on Envtl.
Quality v. EPA, 790 F.3d 138 (D.C. Cir. 2015) (Mississippi), the most
recent decision in the line of cases that includes Catawba, noted
above. In that line of cases, the Court upheld the EPA's approach to
determining whether, under CAA section 107(d)(1)(A)(i), an upwind area
should be treated as nonattainment because it ``contributes'' to
downwind air quality problems. See Mississippi, 790 F.3d at 150 (citing
Catawba, 571 F.3d at 39-40). The Court held that the EPA was not
required to establish a threshold level of impact for determining
whether an upwind area ``contributes'' to a downwind area. The
Mississippi Court cited Catawba, 571 F.3d at 39-40), which commenters,
in turn, cite to argue that such a threshold is not necessary for
determining a significant contribution under CAA section 111(b).
However, as noted above, the EPA had ``define[d] and explain[ed]'' a
set of criteria for determining whether an upwind area ``contributes,''
and in the cited case law, the Court found that these criteria
facilitated the reasonableness of the EPA's decision-making. Catawba,
571 F.3d at 39-40. In any event, this case law is distinguishable
because it concerns the EPA's determination under CAA section
107(d)(1)(A)(i) of a simple contribution, whereas CAA section 111(b)
requires the EPA to determine a significant contribution. As noted
above, the EPA considers it particularly important to develop a set of
criteria and/or a standard in order to determine when a significant
contribution occurs, in order to distinguish it from a simple
contribution.
C. Criteria for Making a Significant Contribution Finding Under CAA
Section 111
In the 2019 Proposal, the EPA solicited comment regarding criteria
for the Agency to consider in making a SCF. 84 FR 50267. The
solicitation for comment was not on the factors the Agency should
consider in determining whether air pollution may reasonably be
anticipated to endanger public health or welfare, but rather the
factors that should be considered when determining under CAA section
111 whether a pollutant from a source category significantly
contributes to that air pollution. Several commenters recommend that
the EPA defer any action on SCF criteria and suggest the EPA undertake
these questions in a separate future rulemaking. Some commenters
suggest specific criteria the EPA could consider.
The EPA made clear in the 2019 Proposal that it would not finalize
criteria in this rulemaking, but rather would conduct a separate
rulemaking to do so. 84 FR 50267. There is no need for the EPA to
promulgate criteria at this time because this rule rescinds NSPS. The
EPA expects that in the future, it will promulgate criteria before
promulgating additional NSPS.
It should be noted that several commenters contend that oil and gas
methane emissions are too small to be considered ``significant.'' For
example, some commenters cite as support that the contribution of oil
and gas methane to total U.S. GHG emissions is only about 3 percent,
that U.S. methane emissions are only about 7 percent of global methane
emissions, and that U.S. methane emissions are only about 1 percent of
global GHG emissions. The EPA appreciates the commenters' views
concerning the amounts and impacts of methane emissions from the
transmission and storage segment, as well as the production and
processing segments. The EPA acknowledges that depending on the
criteria that it adopts to support a SCF in the future, such a
relatively small contribution to the national and global pool of
methane emissions may not be deemed significant. But until the EPA
itself reviews and assesses those amounts of emissions according to the
criteria that it eventually adopts, the EPA cannot make a determination
as to whether methane emissions from the production and processing
segments contribute significantly to dangerous air pollution.
VII. Implications for Regulation of Existing Sources
As discussed in section VII of the proposal preamble, the EPA
recognizes that by rescinding the applicability of the NSPS, issued
under CAA section 111(b), to methane emissions for the sources in the
Crude Oil and Natural Gas Production source category that are currently
covered by the NSPS, existing sources of the same type in the source
category will not be subject to regulation under CAA section 111(d).
This is a legal consequence that results from the application of the
CAA section 111 requirements. Comments were received that both agreed
and disagreed with the proposed decision and reflected varying opinions
on the implications for regulation of existing sources. These comments
are provided, along with the EPA's responses, in section X of this
preamble and in Chapter 9 of the Response to Comments Document. None of
the comments received resulted in a material change in the EPA's
rationale and conclusions from proposal. The following provides a
summary of the EPA's legal interpretation of CAA section 111(d)(1) and
rationale for why the lack of regulation of existing sources under CAA
section 111(d) will have a limited environmental impact.
A. Existing Source Regulation Under CAA Section 111(d)
As the EPA stated at proposal (see section VII of the 2019 Proposal
preamble), CAA section 111(d) authorizes the regulation of existing
sources in a source category for particular air pollutants to which a
standard of performance would apply if those existing sources were new
sources. By legal operation of the terms of CAA section 111(d), certain
existing sources in the Crude Oil and Natural Gas Production source
category will no longer be subject to regulation under CAA section
111(d) as a result of this final rule. Under CAA section 111(d)(1)(A),
CAA section 111(d) applies only to air pollutants (1) for which air
quality criteria have not been issued, and which are not on the EPA's
list of air pollutants issued under CAA section 108(a) (commonly
referred to as the ``CAA 108(a) exclusion''), and (2) which are not HAP
emitted from a source category regulated under CAA section 112
(commonly referred to as the ``CAA 112 exclusion''). See 42 U.S.C.
7411(d)(1)(A) (CAA section 111(d) applies to ``any air pollutant (i)
for which air quality criteria have not been issued or which is not
included on a list published under section 7408(a) of this title or
emitted from a source category which is regulated under section 7412 of
this title'').
For reasons set out in the proposal preamble, the EPA has concluded
that VOC fall within the CAA 108(a) exclusion and, thus, are not the
type of air pollutant that, if subjected to a standard of performance
for new sources, would trigger the application of CAA section 111(d).
VOC are not expressly listed as CAA section 108(a) pollutants, but they
are precursors to photochemical oxidants (e.g., ozone) and PM, both of
which are listed CAA section 108(a) pollutants. As provided in CAA
section 302(g), the term ``air pollutant'' is defined to include
[[Page 57041]]
precursors ``to the extent that the Administrator has identified such
precursor or precursors for the particular purpose for which the term
`air pollutant' is used.'' For the following reasons, it is appropriate
to consider VOC within the scope of photochemical oxidants and PM,
which are listed CAA section 108(a) pollutants, for the particular
purpose of applying the CAA section 108 exclusion in CAA section
111(d).
First, VOC are regulated through the CAA's NAAQS implementation
program established under CAA section 110, as a result of the inclusion
of ozone and PM on the CAA section 108(a) list, because VOC are
precursors to those two listed pollutants. See, e.g., CAA section
182(b)(2) (establishing ``reasonably available control technology''
requirements for VOC sources in moderate ozone attainment areas); CAA
section 182(c)(2)(b) (requiring serious ozone areas to submit a
reasonable further progress demonstration that will account for a set
amount of VOC emissions reductions); CAA section 182(d)(2) (requiring
specific VOC reductions to satisfy the offset requirement for severe
areas); CAA section 182(e)(1) (requiring specific VOC reductions to
satisfy the offset requirement for extreme areas). Indeed, the
regulation of ozone precursors is the means of addressing ozone in the
ambient air, because ozone levels in the ambient air are the result of
photochemical reactions of precursors (VOC and NOX), as
opposed to being directly emitted from sources.
Second, as explained in the proposal preamble, excluding VOC from
regulation under CAA section 111(d) makes sense within the CAA's three-
part structure for addressing emissions from stationary sources. As the
EPA has discussed in past rulemakings, the CAA sets out a comprehensive
scheme for air pollution control, addressing three general categories
of pollutants emitted from stationary sources: (1) Criteria pollutants
(which are addressed in CAA sections 108 through 110); (2) hazardous
pollutants (which are addressed under CAA section 112); and (3)
``pollutants that are (or may be) harmful to public health or welfare
but are not or cannot be controlled under [CAA] sections 108-110 or
112.'' ``Carbon Pollution Emission Guidelines for Existing Stationary
Sources: Electric Utility Generating Units: Final Rule,'' 80 FR 64661,
64711 (October 23, 2015) (quoting 40 FR 53340 (November 17, 1975)).
Within this three-part structure, CAA section 111(d) is properly
understood as a ``gap-filling'' measure to address pollutants that are
not addressed under either the criteria pollutant and NAAQS
implementation provisions in CAA sections 108 through 110 or the HAP
provisions in CAA section 112. Because VOC are regulated as precursors
to ozone and PM2.5 under CAA sections 108 through 110, they
are properly excluded from regulation under CAA section 111(d) because
the ``gap-filling'' function of CAA section 111(d) is not needed.
Third, reading the phrase ``included on a list published under [CAA
section 108(a)]'' as including precursors is reasonable in light of the
provision in CAA section 112(b)(2) that restricts what pollutants may
be listed as CAA section 112 HAP.
Finally, as discussed in detail in the proposal preamble, the fact
that precursors are not always treated as CAA section 108(a) listed
pollutants under all contexts across the CAA does not undermine the
conclusion that they should be excluded under the CAA section 108
exclusion in CAA section 111(d).
B. Impact of Lack of Regulation of Existing Oil and Natural Gas Sources
Under CAA Section 111(d)
The EPA maintains its position from the proposed rule that the lack
of regulation of existing sources under CAA section 111(d) through an
Emission Guideline (EG) will have limited impact. This is because there
are several factors that will continue to contribute to the downward
trend of total methane emissions from oil and natural gas existing
sources even in the absence of an EG.
First, as the EPA stated in the 2019 Proposal preamble, the 2016
Rule includes a definition and approach to determining new source
applicability that are very broad, and in the specific context of the
oil and natural gas production industry, can be anticipated to result
in wide applicability of the NSPS to existing sources due to the
frequency with which such sources can be reasonably expected to engage
in ``modification'' activity. Specifically, it would take at least 7
years from date of promulgation of an EG for requirements to be fully
implemented.\50\ During this time, the EPA expects that a percentage of
existing sources will shut down or undertake modification which will
result in them becoming subject to regulation under CAA section 111(b).
However, based on limited information that commenters submitted, the
EPA acknowledges there may be some existing sources that have never
been modified and accepts that these are examples of existing sources
that have continued to operate for long periods of time without being
reconstructed or modified. The EPA did not prepare and include a
quantitative analysis that estimates the levels at which source
modification/equipment turnover may occur. However, the EPA maintains
that this is one factor (among other factors) that in the absence of an
EG will continue to contribute to the downward trend of total methane
emissions from oil and natural gas existing sources.
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\50\ This estimation considers the development of states' plans
and the Federal plan. Unlike NSPS, EG are not directly enforceable;
thus, these mechanisms are critical for implementation.
---------------------------------------------------------------------------
Secondly, there are market incentives for the oil and natural gas
industry to capture as much natural gas (and, by extension, methane) as
is cost effective. Depending on the future trajectories of natural gas
prices and the costs of natural gas capture and emission reductions,
market incentives may continue to drive emission reductions, even in
the absence of specific regulatory requirements applicable to methane
emissions from existing sources. Assessing the relationship of methane
emissions and natural gas production, overall natural gas gross
withdrawals have increased about 50 percent from 1990 to 2018, while
aggregate methane emissions from the NSPS subpart OOOOa-relevant
industry segments have stayed relatively flat (Figure 1). This trend
indicates decreasing aggregate methane emissions intensity for these
segments over this period (Figure 1). These trends are likely driven by
a combination of economic and technical advances.
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\51\ Methane emissions from Table 3-37 (Petroleum Systems) and
Table 3-57 (Natural Gas Systems) in U.S. EPA. 2020. Inventory of
U.S. Greenhouse Gas Emissions and Sinks: 1990-2018. EPA 430-R-20-
002. Available at: https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2018. Accessed July 1, 2020.
U.S. Energy Information Administration (EIA) data on natural gas
gross withdrawals available at: https://www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_FGW_mmcf_a.htm. Accessed July 1, 2020.
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[[Page 57042]]
[GRAPHIC] [TIFF OMITTED] TR14SE20.004
While environmental performance is a challenging concept to
quantify in monetary terms, improving such performance is increasingly
important for firms that seek to maintain a ``social license to
operate.'' Generally speaking, the social license to operate means that
the firm's employees, investors, customers, and the general public find
that the firm's business activities and operations are acceptable to
continue to freely participate in the marketplace. Maintaining the
social license by improving environmental performance, such as reducing
emissions, can help firms respond to the complex environment within
which they operate in ways that are favorable to their longer-term
business interests.
Third, the EPA maintains, and has received a substantial amount of
comments confirming its position that participation in the various
voluntary methane emissions mitigation programs is one factor (among
other factors) that in the absence of an EG that will continue to
contribute to the downward trend of total methane emissions from oil
and natural gas existing sources. Owners and operators of facilities in
the oil and natural gas industry participate in voluntary programs that
reduce their methane emissions. Specifically, many owners and operators
of facilities participate in two EPA partnership programs: The Natural
Gas STAR Program \52\ and the Methane Challenge Program.\53\ Owners and
operators also participate in voluntary programs that are not
administered by the EPA, such as the Environmental Partnership \54\ and
the Climate and Clean Air Coalition (CCAC) Oil & Gas Methane
Partnership.\55\ Firms might participate in voluntary environmental
programs for a variety of reasons, including attracting customers,
employees, and investors who value more environmentally responsible
goods and services; finding approaches to improve efficiency and reduce
costs; and reducing pressures for potential new regulations or helping
shape future regulations.56 57 The EPA does acknowledge that
the industry as a whole is not uniformly meeting voluntary measures at
the same level of control and that some companies may not be
participating in cited voluntary methane emissions programs at all.
This makes it difficult to verify the impacts on emissions as a result
of voluntary program participation. Additional time will be needed to
allow these programs to further develop and to be fully implemented to
better quantify the impacts the varied programs have on
[[Page 57043]]
reducing emissions from oil and natural gas industry sources.
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\52\ The Natural Gas STAR Program started in 1993 and seeks to
achieve methane emission reductions through cost-effective best
practices and technologies. Partner companies document their
voluntary emission reduction activities and report their
accomplishments to the EPA annually. Natural Gas STAR includes over
100 partners across the natural gas value chain and has eliminated
nearly 1.39 trillion cubic feet of methane emissions since 1993.
\53\ The Methane Challenge Program, started in 2016 and designed
for companies that want to adopt more ambitious actions for methane
reductions, expands the Natural Gas STAR Program through specific,
ambitious commitments; transparent reporting; and company-level
recognition of commitments and progress. This program includes more
than 50 companies from production, gathering and boosting,
transmission and storage, and distribution.
\54\ The Environmental Partnership is composed of various
companies of different sizes and includes commitments to replace all
high-bleed pneumatic controllers with low-bleed controllers (i.e.,
controllers with a bleed rate less than 6 scfh) within 5 years,
require operators to be on-site or nearby when conducting liquids
unloading, and require initial monitoring for fugitive emissions at
all sites within 5 years, with repairs completed within 60 days of
fugitive emissions detection. https://theenvironmentalpartnership.org/.
\55\ The CCAC Oil and Gas Methane Partnership is a technical
partnership between oil and natural gas companies, the Environmental
Defense Fund, the EPA Natural Gas STAR Program, and the Global
Methane Initiative that provides technical documents on a wide
variety of opportunities for reducing methane emissions and requires
annual progress reports from its participants. Yearly data on the
progress being made by participants is available on the CCAC
website. http://ccacoalition.org/en/content/oil-and-gas-methane-partnership-reporting.
\56\ Borck, J.C. and C. Coglianese (2009). ``Voluntary
Environmental Programs: Assessing Their Effectiveness.'' Annual
Review of Environment and Resources. 34(1): 305-324.
\57\ Brouhle, K., C. Griffiths, and A. Wolverton (2009).
``Evaluating the role of EPA policy levers: An examination of a
voluntary program and regulatory threat in the metal-finishing
industry.'' Journal of Environmental Economics and Management.
57(2): 166-181.
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Fourth, several major oil and natural gas producing states have
established regulations on oil and natural gas sector emissions. The
EPA recognizes that state requirements vary in stringency and that only
a subset of states include requirements for sources that the EPA could
potentially define as existing sources. However, states that have
standards applicable to existing sources include California, Colorado,
Utah, Wyoming (in the Upper Green River Basin ozone non-attainment
area), and Texas, and account for a substantial portion of oil \58\ and
natural gas production \59\ in the United States. Furthermore, current
state regulations (and permits) controlling VOC emissions will
concurrently reduce methane emissions from the oil and natural gas
industry. For example, areas that are designated Moderate nonattainment
and above for certain ozone NAAQS, and states within the Ozone
Transport Region, are required to adopt and implement VOC controls for
oil and gas sources covered by the EPA's 2016 Control Techniques
Guidelines.\60\ These controls, which the EPA will address through the
state implementation plan (SIP) approval process, will concurrently
reduce methane emissions.
---------------------------------------------------------------------------
\58\ Approximately 52 percent of crude oil production in 2019
according to https://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_a.htm.
\59\ Approximately 35 percent of natural gas production in 2019
according to https://www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_VGM_mmcf_a.htm.
\60\ On October 27, 2016, the EPA provided notice of the
availability of a final control techniques guideline document titled
Control Techniques Guidelines for the Oil and Natural Gas Industry
(EPA 453/B-16-001). 81 FR 74798 (October 27, 2016).
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As with other factors cited by the EPA, existing source state
requirements are one factor (among others) that in absence of an EG
will continue to contribute to the downward trend of total methane
emissions from oil and natural gas existing sources. Further detail
regarding comments received on the potential for limiting emissions
from existing sources can be found in section X of this preamble.
VIII. Summary of Major Comments and Responses
In this section, we respond to many of the major comments made on
the 2019 Proposal. In the Response to Comments Document in the docket,
we provide additional discussion for some of these comments, and
respond to additional comments.
A. Revision of the Source Category To Remove Transmission and Storage
Segment
1. History of Scope of Oil and Natural Gas Source Category
Comment: Commenters assert that language in CAA section 111
demonstrates that Congress contemplated that source categories would be
broad and encompass a variety of different types of emission sources.
The commenters disagree that the 1979 listing did not include the
natural gas transmission and storage segment, and add that, in 1980,
the Agency explained: ``Source categories are intended to be broad
enough in scope to include all processes associated with the particular
industry.'' Commenters state that, in practice, the EPA has long listed
broad source categories, covering an entire industry or a source that
may be found in numerous industries, and sometimes establishing
different subcategories within source categories, including electric
utilities, non-metallic mineral processing, and compressor engines. The
commenters contend that the EPA's treatment of other source categories
soon after the priority listing process consistently recognized the
interrelatedness of facilities or of emissions controls for those
facilities and that this helps determine what sources to include in
each source category. Although petroleum refineries are a separate
source category under CAA section 111, the commenters note that the EPA
previously explained that the source category for the asphalt roofing
industry ``encompasses not only asphalt roofing plants but certain
production units at oil refineries and asphalt processing plants which
were not included on the Priority List promulgated on August 21,
1979.'' 45 FR 76405.
Response: The EPA has generally exercised discretion in identifying
the scope of any particular industry, including which industrial
processes it includes, for purposes of treating it as a source category
under CAA section 111.\61\ The EPA acknowledges that some of the listed
source categories were broad in scope. However, the EPA has also listed
source categories that are relatively narrow in scope--they have
distinct facility boundaries that encompass a particular process that,
in turn, follows a linear path and results in a specific product.
Examples of narrowly defined source categories include the following.
---------------------------------------------------------------------------
\61\ The EPA has not relied on particular formulations, such as
standard industrial classification, to identify an industry for
purposes of classifying it.
---------------------------------------------------------------------------
Primary Copper Smelting, Subpart P: A primary copper
smelter is any installation or any intermediate process engaged in the
production of copper from copper sulfide ore concentrates through the
use of pyrometallurgical techniques. The affected facilities in primary
copper smelters are dryers, roasters, smelting furnaces, and copper
converters.
Nitric Acid Plants, Subpart G and Ga: A nitric acid plant
is a nitric acid production unit, which, in turn, is any facility
producing weak nitric acid by either the pressure or atmospheric
pressure process.
Kraft Pulp Mills, Subparts BB and BBa: A kraft pulp mill
is any stationary source which produces pulp from wood by cooking
(digesting) wood chips in a water solution of sodium hydroxide and
sodium sulfide (white liquor) at high temperature and pressure.
Regeneration of the cooking chemicals through a recovery process is
also considered part of the kraft pulp mill. The affected sources are
digester systems, brown stock washer systems, evaporator systems,
condensate stripper systems, recovery furnaces, smelt dissolving tanks,
and lime kilns at kraft pulp mills.
Sulfuric Acid Plants, Subpart H: The affected sources are
sulfuric acid production units. These are defined as any facility
producing sulfuric acid by the contact process by burning elemental
sulfur, alkylation acid, hydrogen sulfide, organic sulfide and
mercaptans, or acid sludge, but do not include facilities where
conversion to sulfuric acid is utilized primarily as a means of
preventing emissions to the atmosphere of sulfur dioxide or other
sulfur compounds.
If the EPA does not originally include in a listing certain
processes, and subsequently seeks to include those processes, the EPA
must make the requisite statutory findings in order to do so. The
action that the commenters cite supports this point. In the original
1979 Priority List, the EPA listed the Asphalt Roofing Plants source
category. Subsequently, based on studies on the asphalt roofing
industries, the EPA determined that the initial processing of asphalt
for roofing manufacture may take place at sources other than asphalt
roofing plants. Accordingly, the EPA, through rulemaking, amended the
1979 source category listing to include additional locations such as
asphalt processing plants and asphalt storage tanks at oil refineries.
See 45 FR 76427 and 28. In doing so, the EPA provided a specific
rationale for broadening the source category. The present situation
[[Page 57044]]
requires a similar analytical framework: (1) The original source
category listing for Crude Oil and Natural Gas Production was not
broadly defined to include transmission and storage, and (2) the
requisite statutory findings have not been made to expand the category
to include it.
Comment: Several commenters assert that nothing in the 1979 listing
decision supports the EPA's claim that the Agency at the time viewed
facilities used in natural gas transmission and storage (e.g.,
stationary pipeline compressor engines) as a separate source category.
Another commenter asserts that the omission in the 1979 listing of
a source in the transmission and storage segment that had been included
in the 1978 technical document suggests that this source was
incorporated into the Crude Oil and Natural Gas Production source
category. The commenter states that, while the EPA studied Stationary
Pipeline Compressor Engines, which are found in the transmission and
storage segment, as a potential independent source category in the 1978
technical document,\62\ this source was not listed as a major or minor
source in the 1979 Listing.\63\ The commenter states that, while the
Agency argues that the source was included in the Stationary Internal
Combustion Engines listing, the EPA supports this proposition only by
citing to a 2008 rule, which does not expressly include stationary
pipeline compressor engines within the Stationary Internal Combustion
Engines source category.\64\ The commenter notes that the EPA cites to
a page stating that ``[c]ategories and entities potentially regulated
by this action'' include ``[a]ny manufacturer that produces or any
industry using a stationary internal combustion engine as defined in
the final rule.'' 73 FR 3568 and 69. The preamble contains a list of
``[e]xamples of regulated entities'' that includes ``[n]atural gas
transmission.'' 73 FR 3569. However, according to the commenter, the
applicability criteria of the final rule contains no explicit reference
to stationary pipeline compressor engines.
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\62\ U.S. EPA. Priorities for New Source Performance Standards
Under the Clean Air Act Amendments of 1977. April 1978. EPA-450/3-
78-019. p. 33.
\63\ 44 FR 49222 through 49226.
\64\ 73 FR 3568, 3569 (January 18, 2008).
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Response: As a general matter, the Agency has the authority to
revisit its prior categorization determinations. Nonetheless, the EPA,
upon a close read of its prior rules believes that this and certain
other comments on prior Agency determinations are mistaken, as
described further in this section. The EPA notes that while it believes
the 1979 listing did not include the transmission and storage segment
for the reasons described in this final rule, any interpretation
otherwise (i.e., that the listing did include this segment) did not
have any practical effect until the 2012 Rule, when the EPA promulgated
standards for this segment for the first time. Therefore, to the extent
the 1979 listing can be considered to have included the transmission
and storage segment, the EPA is alternatively determining that such
inclusion was incorrect for the same reasons why the 2012 and 2016
Rules incorrectly included the segment as part of the source category.
The EPA disagrees with the commenter's suggestion that the 1979
listing incorporated stationary pipeline compressor engines into the
Crude Oil and Natural Gas Production source category. This is clearly
evidenced by examining the pollutants which are identified for the
category. For the 1979 listing, the pollutants identified for the Crude
Oil and Natural Gas Production source category were VOC and
SO2. In the 1978 background documentation, the pollutants
identified for stationary pipeline compressor engines were
NOX, SO2, and carbon monoxide (CO). If the EPA
had included stationary pipeline compressor engines in the Crude Oil
and Natural Gas Production source category in 1979, the Agency likely
would have added NOX and CO to the list of pollutants for
the category.
That the Stationary Internal Combustion Engine rule (40 CFR part
60, subpart IIII) covers engines in the natural gas transmission and
storage segment is further evidenced by the statement from the February
26, 2008, Federal Register document that specifically identifies
engines in natural gas transmission as example entities subject to the
rule. The commenter is incorrect in asserting that the applicability
criteria of the regulations are silent on engines in natural gas
transmission. Those applicability criteria are characteristics of the
engine (e.g., maximum engine power), which are unrelated to the
location of the engine (e.g., in the transmission segment). See Sec.
60.4230 of 40 CFR part 60, subpart JJJJ. Therefore, the lack of
explicit mention of the transmission segment does not mean that engines
in that segment are not included in the category.
Comment: Several commenters stated that the description of the
Crude Oil and Natural Gas Production source category in the 1984
proposed NSPS for VOC and SO2 emissions made clear that the
category did not include transmission and storage operations. The
commenters pointed to the statement in the preamble that the source
category excluded emission sources related to the ``distribution'' of
products ``to petroleum refineries and gas pipelines'' (citing, e.g.,
49 FR 2636.
Other commenters disagree. One commenter asserts that the EPA
defined the source category as ``encompass[ing] the operations of
exploring for oil and natural gas products, drilling for these
products, removing them from beneath the earth's surface, and
processing these products from oil and gas fields for distribution to
petroleum refineries and gas pipelines.'' The commenter states that it
is clear that compressor stations within the transmission and storage
segment ``process these products . . . for distribution'' by
compressing the gas and forcing it through the pipelines.
Response: The EPA does not agree with the commenter's
interpretation of the quotation from the 1984 proposal. Specifically,
the EPA does not agree that the compression of the natural gas along
transmission pipelines constitutes processing of the natural gas.
Natural gas processing has historically been defined by the Agency to
include the extraction of natural gas liquids from field gas,
fractionation of mixed natural gas liquids to natural gas products, or
both. (40 CFR part 60, subpart KKK; 40 CFR part 63, subpart HH). The
EPA maintains that the language in the 1984 proposal, i.e., that the
category includes ``the operations of exploring for oil and natural gas
products, drilling for these products, removing them from beneath the
earth's surface, and processing these products from oil and gas fields
for distribution to petroleum refineries and gas pipelines,'' is not
ambiguous. Following the well-defined ``processing'' operations, the
natural gas enters transmission gas pipelines. These are the gas
pipelines referred to in the 1984 preamble, meaning that the gas leaves
the processing segment of the oil and natural gas production source
category and travels to the next segment, the natural gas transmission
pipelines.
Comment: One commenter asserts that, within the 1984 definition of
the production segment, the EPA drew a definitional boundary whereby
production consisted of extraction ``and processing [of oil and natural
gas] for distribution to petroleum refineries and gas pipelines.'' The
commenter states that this implies that the boundary at which the
Agency has always historically defined the category as being where
production meets local distribution to pipelines or refineries. The
commenter states that this interpretation of the CAA meant that the
[[Page 57045]]
production segment abuts the distribution end of the industry--not an
arbitrarily created ``Transmission and Storage'' segment.
Response: The EPA's use of the term ``distribution'' in the 1984
preamble was misinterpreted by the commenter. The commenter appears to
interpret ``distribution'' as the distribution segment of the natural
gas industry, and that the source category includes everything up to
that segment. In the context of the 1984 preamble, the EPA's use of the
term ``distribute'' means the transfer to the next segment of the
industry.
Comment: A commenter asserts that the 1984 proposal serves to
demonstrate that the EPA did not view its listing as constrained to its
literal terms--``Crude Oil and Natural Gas Production''--because the
1985 NSPS regulated the processing, not the production, segment of the
natural gas industry. Specifically, the EPA stated that, with regard to
the discussion of equipment leaks, ``equipment used in crude oil and
natural gas production (not to be confused with natural gas processing)
for equipment leaks of VOC is not appropriate for widely dispersed
equipment.'' 49 FR 2637. The commenter states that, taken to a literal
extreme, the proposal's argument would mean that the 1985 NSPS exceeded
the scope of the source category and was, thus, unlawful.
Response: The EPA agrees that the language that the commenter
quotes indicates the Agency's view in the 1985 NSPS that the source
category covered both production and processing. However, this does not
in turn mean that the Agency thought that the source category included
the transmission and storage segment as well. As described above, the
1984 proposal acknowledged equipment leaks in the production segment
but declined to set standards for them based on a technical analysis.
This discussion makes clear that the Agency considered production to be
part of the source category. In contrast, as discussed above, the
preamble is silent on equipment leaks in the transmission and storage
segment.
Comment: Further, the commenter states that the EPA's proposal
appears to concede that the Agency has never been limited to regulating
only those specific sources within the listed category that it
regulated in the first NSPS. The commenter states that, prior to 2012,
the EPA had issued standards for emissions at gas processing plants
only as part of the ``Crude Oil and Natural Gas Production.'' The
commenter notes that in 2012 the EPA regulated VOC from previously
unregulated upstream sources, including well completions, centrifugal
compressors, reciprocating compressors, pneumatic controllers and
storage vessels (citing 77 FR 49490 (Final Rule promulgating 40 CFR
part 60, subpart OOOO)). The commenter states that these sources were
not part of the EPA's analysis in 1979 or 1984 NSPS, yet the proposal
does not suggest that they were improperly regulated in the 2012 Rule.
Specifically, in 2012 the EPA stated: ``[i]n addition to the operations
covered by the existing standards, the newly established standards will
regulate volatile organic compounds from gas wells, centrifugal
compressors, reciprocating compressors, pneumatic controllers and
storage vessels'' (citing 77 FR 49490).
The commenter also indicates that the EPA's citation to the 1984
NSPS ignores other statements made during other rulemakings for the
source category, including the same 1984 rulemaking, that suggest that
the source category was intended to cover broadly the oil and natural
gas sector, or at least was not limited to production and processing
(citing 84 FR 50256). The commenter states that, in that NSPS, the EPA
felt the need to exclude specifically certain sources found in the
transmission and storage segment from the standards it set, something
that would not have been necessary if the Agency had intended to
exclude these segments themselves from the definition of the source
category. The sources excluded in that NSPS are compressor stations,
dehydration units, sweetening units, underground storage facilities,
and field gas gathering systems, unless the facility is located at an
onshore natural gas processing plant.
Response: The commenter's representation of the 1984 rulemaking is
not entirely accurate. It is true that the 1984 proposal limits the
sources covered to those at natural gas processing facilities. However,
the EPA does not agree that this rulemaking was an expansion of the
original ``Crude Oil and Natural Gas Production'' source category. The
commenter is implying that natural gas processing operations were not
included in the original source category listing in 1979 but does not
provide any evidence from the 1978/1979 actions to support that
assertion. An alternative interpretation of this text could also be
that the Agency wished to make it sufficiently clear that while sources
in part of the production and processing segment are included in the
source category, the same sources that are part of the transmission and
storage segment are not included in the source category. However, in
the absence of an explanation for this exclusion, the most that can be
taken away from this text is that these sources are not subject to the
1984 NSPS; this text alone is not dispositive on whether these sources
are included in the broader Oil and Natural Gas source category.
Therefore, the commenter extrapolates a conclusion without a basis to
do so. The fact that SO2 was a pollutant identified for the
Crude Oil and Natural Gas Production source category clearly shows that
processing was included, as the sweetening units covered by the 1984
proposed rules are the primary source of SO2 emissions in
the oil and natural gas industry.
In addition, there are numerous statements made by the EPA
throughout the 1984 proposal that clearly demonstrate consideration of
sources across the entire Crude Oil and Natural Gas Production source
category. The commenter cites the statement in the1984 proposal that
emission points can be divided into three categories and uses this
statement to argue that the source category included transmission and
storage. However, the comment fails to include the remainder of the
paragraph that includes that statement:
These emission points can be divided into three main categories:
Process, storage, and equipment leaks. Process emission sources
include well systems, field oil and gas separators, wash tanks,
steeling tanks, and other sources. These process sources remove the
crude oil and natural gas from beneath the earth and separate gas
and water from the crude oil. Best demonstrated control technology
has not been identified for these process emission points;
therefore, these sources have not been considered in developing the
proposed standards. 49 FR 2637 (emphasis added).
This part of the paragraph clarifies two points. First, the EPA
clearly considered the upstream sources (well systems, field oil and
natural gas separators, etc.) as part of the source category but
indicated that since best demonstrated control technology had not been
identified for those sources, no standards were being proposed at that
time. These sources were then addressed in the 2012 rulemaking, when
the best demonstrated technology/BSER had been determined for them.
Second, this discussion did not mention operations in the transmission
segment.
One commenter also refers to the parenthetical in the 1984 proposal
related to oil and natural gas production and argues that it is proof
that natural gas processing was not included in the Crude Oil and
Natural Gas Production source category. The following provides more of
the discussion to provide the full context.
Equipment leaks of VOC can occur from pumps, valves,
compressors, opened ended
[[Page 57046]]
lines or valves, and pressure relief devices used in onshore crude
oil and natural gas production. These leaks usually occur due to
design or failure of the equipment. Equipment used in crude oil and
natural gas production (not to be confused with natural gas
processing) are widely dispersed over large areas. The analysis
presented in the BID for the principal control technique (leak
detection and repair work practices) for equipment leaks of VOC is
not appropriate for widely dispersed equipment. The costs and
emission reduction numbers for such an analysis are unknown at this
time. Thus, the proposed standards do not apply to equipment
associated with crude oil and natural gas production. The proposed
standards apply only to equipment located at onshore natural gas
processing plants. 49 FR 2637.
Taking the 1984 preamble excerpt in context illustrates that the
distinction made between production and processing was specifically
related to the application of leak detection and repair work practices
for equipment leaks and not to define the source category. In fact, the
discussion makes it clear that the EPA's definition of the source
category includes production and processing. Again, there is no mention
here of the application of leak detection and repair programs to the
transmission and storage segment.
Finally, the commenter cites a paragraph from the proposed
regulation, which clarifies that sources not located at a natural gas
processing plant are not affected facilities, as evidence that the
category includes the transmission and storage segment, since
``compressor stations'' are included. This is also not a compelling
argument. It is not uncommon for equipment, other than that used to
extract natural gas liquids from field gas or to fractionate mixed
natural gas liquids to natural gas products, to be located at a natural
gas processing plant. This paragraph--40 CFR 60.630(e)--simply
clarifies that if other operations (i.e., compressor stations,
dehydration units, sweetening units, underground storage facilities,
field gas gathering units, and liquefied natural gas units) are located
at a natural gas processing plant, the associated components are
subject to the leak detection and repair requirements in NSPS subpart
KKK. This list cannot be extrapolated to the conclusion that the EPA
considered all these operations to be in the source category. As
evidence of this note that ``liquefied natural gas units'' are included
in the list. These units, while part of the overall oil and natural gas
industry, have never been contemplated as being part of the Crude Oil
and Natural Gas source category.
2. ``Sufficiently Related'' Test and Whether Transmission and Storage
Operations Are Distinct From Production and Processing
Comment: Commenters contend that the proposal to amend the source
category definition is fundamentally at cross-purposes with the
proposal to remove standards of performance for methane. The EPA
proposed to justify the latter by finding that regulation of methane
and VOC is redundant because the controls that sources are required to
implement to reduce their VOC emissions will also reduce their methane
emissions, and this is true regardless of the relative amounts of VOC
and methane in their overall emissions. The commenters state that if
methane regulation is redundant on those grounds, then differences in
gas composition cannot be the basis for determining that two distinct
source categories are necessary.
Response: The commenters conflate the proposal to remove the
transmission and storage segment from the source category with the
proposal to rescind the methane requirements for the remaining
production and processing segment, without acknowledging that while the
substance of each may have technical similarities, each proposal
addresses discrete, stepwise legal aspects of CAA section 111(b). Under
CAA section 111(b), a source category must first be listed before the
EPA can promulgate an NSPS for sources within the category. The EPA
proposed the first action of removing the transmission and storage
segment from the source category, in part based on the conclusion that
the segment was not previously properly added to the source category
because there are distinct differences in operations and differences in
the emissions profiles between the production and processing segments
and the transmission and storage segment. As described further in this
section, based on the sufficiently related test, these distinct
differences in operations and differences in emissions profile means
that the transmission and storage segment requires a separate SCF in
order to be properly regulated under CAA section 111(b).
However, once a source category is properly listed and defined, as
are the production and processing segments, the inquiry then is what
are the appropriate standards of performance for sources within that
category. This inquiry is separate from and subsequent to the initial
inquiry of whether a source category is properly identified for
regulation under CAA section 111(b). For example, the EPA has
previously identified sources as appropriately subject to regulation
under CAA section 111(b), but then subsequently declined to promulgate
standards of performance based on inadequate data. In proposing VOC
standards for equipment leaks in oil and gas processing, the EPA
declined to apply such standards to equipment in the production
segment, which is clearly part of the source category, because it did
not have data on costs and emission reduction numbers at that time. 49
FR 2637.
Similarly, here, while the production and processing segments have
been properly identified as subject to regulation under CAA section
111(b) through the 1979 listing of the source category, the EPA must
then contend with how to regulate these segments. Accordingly, the EPA
proposed the second action to rescind the methane requirements for the
production and processing segments based on the fact that VOC and
methane controls are redundant. While the rationales for both actions
are premised partly on differences in gas composition, the legal and
technical inquiry for each action is different, as these are discrete
steps to regulation under CAA section 111(b). Though the findings under
each inquiry are similarly premised on differences in gas composition,
that does not mean that the response to both inquiries must be the
same, as each inquiry is distinctly different from one another (i.e.,
one is whether the transmission and storage segment is properly part of
the source category, the other is whether and how to regulate methane
from the production and processing segments). The rationale for this
second action was also discussed at length in section IV.D of the 2019
Proposal (84 FR 50259 and 50260). The comments received and the EPA
responses on this second action are provided in section VIII.B below.
Comment: Commenters do not agree that the transmission and storage
segment cannot be included in the Crude Oil and Natural Gas source
category because the gas composition and operations in that segment are
too different from those in the production and processing segments.
These commenters assert that the EPA's own data do not support the
EPA's rationale. The commenters suggest that, while the EPA compares
the average composition of the production segment to the average
composition of the transmission segment, the Agency fails to consider
the extensive overlap in the range of compositions in both segments.
The commenters state that the EPA's 2011 Natural Gas Composition
memorandum data show the wide range of compositions of gas in the
production
[[Page 57047]]
and transmission segments.\65\ The commenters contend that the range of
methane compositions in the production segment fully encompasses the
range in the transmission segment, demonstrating the similarity of the
gas composition in the two segments; similarly, there is extensive
overlap between the segments' VOC compositions.
---------------------------------------------------------------------------
\65\ Memorandum to Bruce Moore, U.S. EPA from Heather Brown, EC/
R. ``Composition of Natural Gas for use in the Oil and Natural Gas
Sector Rulemaking.'' July 2011. Docket ID Item No. EPA- HQ-OAR-2010-
0505-0084.
---------------------------------------------------------------------------
Commenters also discussed the EPA's more recent 2018 composition
data,\66\ asserting that it shows even more variation in gas
composition. A commenter asserts that while the EPA recognizes that
variations in the gas composition can occur from basin-to-basin within
each segment, the EPA does not acknowledge that these basin-to-basin
variations can swamp the purported variations on which the EPA relies
to justify a distinction between production and transmission segments.
---------------------------------------------------------------------------
\66\ Memorandum to U.S. EPA from Eastern Research Group.
``Natural Gas Composition.'' November 13, 2018. Docket ID No. EPA-
HQ-OAR-2017-0757.
---------------------------------------------------------------------------
One commenter states that its experience with the oil and natural
gas industry operating in Pennsylvania shows that unprocessed field gas
\67\ can range from, by volume, 75-percent to 98-percent methane and
0.1-percent to 10-percent VOC. The commenter states that in a number of
Pennsylvania counties, the county average field gas composition meets
the EPA's pipeline quality gas composition (i.e., is equal to or
greater than 93-percent methane and less than or equal to 1-percent
VOC; HAP data is unavailable). The commenter states that there are
several natural gas well pads that dehydrate the produced gas onsite
and transfer custody directly to an interstate pipeline. The commenter
notes that this reality further blurs the distinction between the
production and the transmission and storage segments. The commenter
contends that, if a well site is required to meet the requirements of
the 2016 Rule, it stands to reason that a transmission compressor
station accepting the same gas should be required to meet the same
requirements.
---------------------------------------------------------------------------
\67\ Field gas is described earlier in section V.B of this
preamble.
---------------------------------------------------------------------------
One of the commenters also notes that the 2018 Natural Gas
Composition memorandum did not include any updated data for the
transmission and storage segment. The commenter states that, given the
significant difference in the production segment data from 2011 and
2018, the EPA must collect more current data for the transmission and
storage segment if it seeks to justify any claims about the segment
being sufficiently distinct from production and processing to warrant
revision of the source category.
Response: The EPA recognizes that the composition of natural gas in
the production segment can vary considerably, and that in some basins/
areas it is possible that the composition can mirror that in the
transmission segment. However, while the commenters stress this overlap
in the gas composition in limited geographical regions in the U.S.,
such as in some parts of Pennsylvania, they seem to discount the
substantial differences in most areas. For example, for Texas, the
EPA's 2011 gas composition analysis showed that the methane content in
the production segment was, on average, 80.1 percent, but ranged from
55.0 percent to 97.8 percent.\68\ Because the NSPS subpart OOOOa is a
nationwide regulation which applies equally across the country, it is
most appropriate to consider the average composition for the segments.
Further, on a nationwide basis, the data clearly reveal a distinction
in the gas composition between the production and processing segments
and the transmission and storage segment.
---------------------------------------------------------------------------
\68\ Memorandum to Bruce Moore, U.S. EPA from Heather Brown, EC/
R. ``Composition of Natural Gas for use in the Oil and Natural Gas
Sector Rulemaking.'' July 2011. Docket ID Item No. EPA-HQ-OAR-2010-
0505-0084.
---------------------------------------------------------------------------
The commenter is correct that the 2018 Natural Gas Composition
memorandum did not include data for the transmission and storage
segment. The EPA conducted a new analysis which analyzed average
methane concentrations using 2015 through 2018 data reported under 40
CFR part 98, subpart W (Petroleum and Natural Gas Systems), of the
EPA's GHGRP.\69\ This analysis did include recent data for the
transmission and storage segment. The EPA found that there is a
statistically significant difference between the average methane
concentration in natural gas at either the gas production, gathering
and boosting, or gas processing \70\ industry segments and the average
methane concentration in natural gas at either the transmission
compression or underground storage segment. This difference further
supports the EPA's justification to remove the transmission and storage
segment from this source category.
---------------------------------------------------------------------------
\69\ Analysis of Average Methane Concentrations in the Petroleum
and Natural Gas Industry Using Data Reported Under 40 CFR part 98
Subpart W. April 6, 2020. Included in Docket ID No. EPA-HQ-OAR-2017-
0757.
\70\ Methane concentrations at gas processing facilities
evaluated in this study are based on the inlet gas composition (as
received) by the gas processing facilities.
---------------------------------------------------------------------------
Comment: Several commenters disagree with the EPA's statements in
the 2019 Proposal that equipment and operations in the production and
processing segments were not interrelated with the transmission and
storage facilities. The commenters contend that while the transmission
and storage segment serves a different role than the production,
processing, and distribution segments, it is still part of the overall
oil and natural gas industry and is a necessary element of the source
category because it prepares the recovered gas for distribution. They
add that, as the 2019 Proposal notes, the processes used to remove
impurities (for example, dehydrators) in the production and processing
segments are also used in the transmission and storage segment (citing
84 FR 50258). Commenters noted that the 2016 Rule stated that the
equipment and operations at production, processing, transmission, and
storage facilities are a sequence of functions that are interrelated
and necessary for getting the product ready for distribution (citing 81
FR 35838). Commenters also noted that the 2016 Rule also cited the
increase in natural gas production from hydraulic fracturing and
horizontal drilling as an example of the interrelated nature of the
industry--i.e., increased production resulting in an increase in the
amount of natural gas needing to be processed and moved to market or
stored, which in turn results in increases in emissions across the
entire natural gas industry.
Response: The EPA agrees with the commenters that production,
processing, transmission and storage are all segments of the oil and
natural gas industry and that the transmission and storage segment is a
part of the industry because it prepares the recovered gas for
distribution.
However, this does not necessitate that all of the segments belong
in the same source category for regulatory purposes under CAA section
111. As explained in the 2019 Proposal, the primary purposes of each
segment differs. The purposes of the production and processing segments
are to explore, drill, extract, and process crude oil and natural gas
found beneath the earth's surface. Extracting crude oil and field gas
through drilling wells and processing these products for distribution
to petroleum refineries and gas pipelines is an industrial process that
is distinct from the transmission and storage segment, whose primary
purpose is to move to market pipeline quality natural gas through
transmission
[[Page 57048]]
pipelines by increasing the pressure and to store the gas underground
along the pipeline.
The EPA understands that dehydrators are used to remove impurities
from the natural gas in both the production and processing segments and
in the transmission and storage segment. In the latter segment,
dehydrators are occasionally present along transmission pipelines and
at natural gas storage facilities to remove water and other impurities
that condense as a result of temperature and pressure changes as the
gas moves through the pipeline or is stored underground. However, the
different uses of dehydrators illustrate the separate functions that
the segments have in the industry. In the transmission and storage
segment, dehydrators simply remove these impurities as they accumulate
in pipelines. In the production and processing segment, dehydrators are
a part of the process to change the overall composition of the gas. It
is also noteworthy that the EPA included and regulated air toxics
emissions from dehydrators in two separate source categories and in two
different NESHAP. Dehydrators in the production and processing segments
are covered by 40 CFR part 63, subpart HH, and dehydrators in the
natural gas transmission and storage segment are covered by 40 CFR part
63, subpart HHH.
The EPA continues to assert that the comparison with the petroleum
industry is directly relevant. The commenters insist that the necessary
link between the extraction and processing of the natural gas in the
production and processing segments and the transmission of the natural
gas predetermines that the two segments must be treated as a single
source category. However, this same link exists between the extraction
and processing of oil, condensate (and other liquids from oil and
natural gas wells) in the production segment and the petroleum
refineries and pipelines that refine/process and distribute these
liquids. However, the commenters do not suggest the interrelatedness of
the production and processing sources originally included in the Crude
Oil and Natural Gas Production source category with those in the
petroleum liquid source categories necessitates that Crude Oil and
Natural Gas Production and Petroleum Refineries be combined into one
category and regulated together. The EPA applies the same logic to
conclude that the fact that the transmission and storage segment is
related to the production and processing sources in the Crude Oil and
Natural Gas Production source category does not necessarily result in
the requirement that they be regulated together. In addition, other
instances in which similar source types emitting the same air
pollutants and subject to the same types of controls are included in
different source categories. For example, leaking pumps, valves,
connectors, and other components at a wide variety of types of
facilities that emit VOC and GHG are included in different source
categories.
3. The Authority To Expand Source Categories and the EPA's Alternative
Approach
Comment: One commenter asserts that, while the 2012 Rule and 2016
Rule expanded the source category, this expansion was appropriate
considering the statutory mandate that the Administrator should from
time to time review the source categories. The commenter states that
the purpose of this review was to assure that the EPA periodically
consider new scientific developments to ensure that the Agency was
continually acting in a way that protected the public health. The
commenter adds that the statute provides no guidance regarding the
proper scope of a source category, and that Congress left that
determination to Agency expertise, so long as the Agency considers the
impacts of the source's emissions on public health. According to the
commenter, the EPA's expansion of the source category in the 2016 Rule
properly considered the source category's impact on the public health.
However, the commenter adds, but the EPA's current effort to rescind
that expansion is based on alleged procedural errors and fails to
consider the public health impacts of the transmission and storage
segment. The commenter states that the transmission and storage segment
does significantly contribute to the deterioration of public health.
The commenter asserts that the natural gas held at storage facilities
contains all of the same toxic air pollutants and hazardous chemicals
as natural gas does at other stages of the production process, and that
the methane and VOC emissions from compressor stations have the same
adverse impact on public health regardless of what segment of the
source category the methane and VOC emissions are coming from. The
commenter suggests that the EPA take this opportunity to do its own
analysis to determine whether methane, VOC, and HAP (air toxic)
emissions from the transmission and storage segment of the source
category adversely impact public health.
Response: The EPA agrees that the CAA authorizes the EPA to review
and revise source categories, and that its purpose was to ensure that
the Agency was continually acting in a way that protected the public
health. However, the EPA disagrees with the commenters' position on the
EPA's past consideration of public health in the expansion of the Crude
Oil and Natural Gas source category. The EPA's 2015 evaluation of the
impacts of GHG, VOC, and SO2 on public health and welfare
(80 FR 56601) was conducted for crude oil and natural gas production
and processing, along with natural gas transmission and storage. While
it is true, as the commenter points out, that methane and VOC are
emitted from the natural gas transmission and storage segment, the
EPA's 2015 analysis did not separate the impacts of the pollutants
emitted by natural gas transmission and storage to demonstrate that the
emissions from this segment contribute significantly to the overall
impacts. In the 2019 Proposal, the EPA proposed that it was required to
make a finding that the transmission and storage segment, in and of
itself, contributes significantly to air pollution which may reasonably
be anticipated to endanger public health and welfare. Nothing in the
comments provided cause the EPA to change this conclusion.
4. Significant Contribution Finding for Natural Gas Transmission and
Storage
Comment: Several commenters state that the SCF that the EPA made in
the 2016 Rule, which was for the production, processing,
transportation, and storage segments collectively, was not appropriate
to authorize the EPA to promulgate NSPS for sources in the transmission
and storage segment. The commenters assert that to regulate sources in
that segment, the EPA was required to make a SCF determination for
emissions from that segment itself. Commenters explain that, to
consider otherwise, once the EPA makes a SCF determination for a source
category consisting of certain types of sources, the Agency would then
be able to add into that source category all manner of ancillary
equipment and operations, even if those ancillary equipment and
operations do not in and of themselves significantly contribute to the
previously-identified endangerment. The commenter states that this
would allow the EPA to evade the express listing criteria by lumping
loose associations of nominally related segments of an industry into a
sector.
Other commenters disagreed, stating that in the 2016 Rule, the EPA
determined that the rulemaking record
[[Page 57049]]
supported a revision of the source category listing to include broadly
the entire oil and natural gas industry (i.e., production, processing,
transmission and storage) that, in the Administrator's judgment,
contributes significantly to air pollution which may reasonably be
anticipated to endanger public health or welfare. Commenters add that
CAA section 111(b)(1)(A) grants the Administrator authority to ``from
time to time . . . revise'' the listed categories, and that nothing in
the statutory text or relevant case law suggests that the EPA must,
before revising a source category in a way that expands its scope, make
a SCF determination for the newly added part of the category,
considered alone. The commenter adds that nothing in the statute
indicates that Congress intended for it to be more difficult for the
EPA to add sources to a category than to include those sources in the
category in the first instance. The commenter states that the EPA's
obligation when revising a source category is only to conclude that the
entire category, as revised, can still be deemed to contribute
significantly to pollution that endangers public health or welfare.
Response: In this action, the EPA is determining that the
transmission and storage segment of the oil and natural gas industry
should not be included with the production and processing segments as a
single source category. For that reason, if, in the future, the EPA
seeks to promulgate standards of performance for any air pollutants
from the transmission and storage segment, it must first list the
segment as a source category and then determine that their emissions
cause or contribute significantly to air pollution reasonably
anticipated to endanger public health or welfare (SCF). Commenters take
different positions on the question of whether the EPA must make a SCF
for the transmission and storage segment as a predicate to adding them
into a source category that already includes the production and
processing segments. However, because the EPA is determining that the
transmission and storage segment was not properly added to the source
category, it is not necessary to resolve that question, and the EPA
does not do so in this action.
Comment: Several commenters assert that, in order to remove
transmission and storage segment sources from the Oil and Natural Gas
source category, the EPA must affirmatively show that emissions from
the sources do not significantly impact public health.
Response: The EPA disagrees with this comment. In this action, the
EPA is determining that its previous determinations that the Crude Oil
and Natural Gas source category included the transmission and storage
segment beginning in 1979, or, in the alternative, that the EPA was
justified in expanding the category to include that segment, were
improper. Rather, the EPA is determining that the source category did
not include that segment beginning in 1979 and that the EPA's action in
2012 and 2016 to add this segment into the source category was
improper. These reasons justify the EPA in determining that the proper
scope of the source category is the production and processing segments
alone. There is no requirement under CAA section 111 that the
improperly added segment must remain in the source category until the
EPA determines that they do not cause or contribute significantly to
dangerous air pollution.
5. Whether EPA Must Move To Add/Expand the Source Category and Regulate
Transmission and Storage Emission Sources
Comment: Several commenters suggest that if the EPA finalizes the
proposal to remove natural gas transmission and storage and rescind the
applicable requirements for this segment, that the EPA should also move
to properly and legally expand the source category and regulate natural
gas transmission and storage emission sources. The commenters state
that, beyond asserting that it might do so in the future, the proposal
fails to explain why it does not take the logical next step and assess
whether the emissions from the transmission and storage segment
contribute significantly to dangerous pollution. The commenters contend
that the current record, as well as the EPA's past findings,
demonstrates that the emissions from the transmission and storage
segment by itself does contribute significantly to dangerous air
pollution.
Response: The EPA determined that the Agency's past interpretations
and actions related to the inclusion of the transmission and storage
segment in the Crude Oil and Natural Gas Production source category
were in error. This action focuses on the correction of these past
errors and interpretations. The EPA posits that retaining this focus,
in the absence of established SCF criteria for GHG emissions/methane
needed to add/expand the scope of this rulemaking, is necessary and
appropriate, and that doing so provides greater clarity and certainty
for the regulated community.
The EPA agrees with commenters that if an appropriate assessment of
the emissions from the transmission and storage segment concludes that
emissions from this segment contribute significantly to the
endangerment to public health or welfare, we would need to propose a
separate rulemaking for the regulation of emissions from sources in
this segment. However, the EPA is not, at this time, assessing whether
the emissions from the transmission and storage segment contribute
significantly to the endangerment to public health or welfare.
Further, the proposal preamble solicited comment regarding
appropriate criteria for the EPA to consider in making a SCF. This
request was made both as a broad matter and with particular reference
to GHG emissions generally, and to methane emissions from the Oil and
Natural Gas source category most particularly. The EPA is evaluating
the responses received to its solicitation and has not yet established
criteria that it would follow to make such a SCF for the transmission
and storage segment as it relates to GHG emissions/methane. Discussion
on comments received on the EPA's solicitation related to SCF criteria
can be found in section VI.C of this preamble.
B. Rescission of the Applicability to Methane of the NSPS for
Production and Processing Segments
The following summarizes some of the major comments on the EPA's
proposal to rescind the methane NSPS for the production and processing
segments and provides the EPA's responses. Additional discussion and
comments and responses on this topic are provided above, in section
V.B, and in Chapter 6 of the Response to Comments Document.
Comment: Several commenters do not agree with the proposal that
section 111 of the CAA authorizes the EPA to rescind one pollutant's
standards because another pollutant's standards may capture them. The
EPA claims that it lacked a rational basis for its 2016 action because
the requirements added in 2016 are entirely redundant with the existing
NSPS for VOC. However, commenters indicate that there is not a specific
provision within the CAA that expressly exempts pollutants from
regulation due to overlapping control technology.
Response: Although it is true that no CAA provision explicitly
authorizes rescinding requirements on the ground that they are
redundant, the EPA's basis for this action is that it erred in the 2016
Rule when it concluded that it had a rational basis to regulate
methane. It is not rational to impose redundant requirements, because
they are not necessary and do not achieve additional
[[Page 57050]]
health or environmental protections. This basis for the EPA's action
does not depend on explicit statutory authorization.
Comment: Multiple commenters support removing methane requirements
for the production and processing segments on the ground that they are
redundant with the existing NSPS for VOC, for the reasons the EPA
stated in the 2019 subparts OOOO and OOOOa Proposal. Another commenter
states that: (1) Methane can be detected more economically than VOC and
detecting VOC typically is 2 to 4 times the cost of detecting methane,
(2) methane is a reliable indicator of VOC, and (3) detecting methane
is safer than detecting VOC. Other commenters disagreed. One commenter
states that, while the release of VOC may always be accompanied by
methane, it does not follow that the release of methane will always be
accompanied by the release of VOC. Some commenters make the case that
the NSPS does not simply duplicate requirements for emission controls;
rather, it allows, but does not require, operators to comply with both
VOC and methane controls using the same practices. Another commenter
states that selective technologies do exist and could be applied to
reduce VOC but not methane emissions if the methane rescission is
finalized. One commenter asserts that it would be arbitrary to regulate
methane and VOC as the same just because the currently chosen control
technologies are the same. Another commenter adds that, while the
sources of VOC and methane leaks may overlap, the two have distinct
pollutant effects. The commenter further adds that the urgency and
stringency of desired reductions may differ considerably for the two
pollutant categories and may change over time, if, for example, the
need for climate change mitigation becomes more acute. The commenter
suggests that the most sensible approach to regulation of emissions
from oil and natural gas operations is, thus, to keep performance
standards for both VOC and methane on the books, and to update those
standards periodically as the science and technology evolve.
Response: The EPA acknowledges the comments but emphasizes that all
of the requirements in the rule apply independently of emissions of
either methane or VOC. We discussed this redundancy in detail in
section IV.D of the 2019 Proposal (84 FR 50259) and in section V.B of
this preamble. The EPA continues to take the position that standards of
performance for methane emissions from the production and processing
segments are redundant with the existing NSPS for VOC and establish no
additional health protections. As explained, every affected source in
the production and processing segments will continue to be subject to
the same NSPS requirements for VOC as before, and those requirements
will have the same impact in reducing the source's methane emissions as
before the removal of methane requirements. The EPA maintains that
removing the methane NSPS, while retaining the VOC NSPS, will not
affect the amount of methane reductions that those requirements will
achieve.
One commenter claims that methane can be detected more economically
and more safely than VOC. First, it is important to note that BSER for
leaking equipment is based on the use of OGI equipment, which does not
require the direct measurement of VOC. It is also worthy to note that
this commenter was primarily referring to economic and safety
advantages of methane leak detection technologies deployed via
aircraft, which is not an option currently allowed under the rule.
Comment: One commenter asserts that removing methane standards
would almost certainly lead to the adoption of less protective
requirements. The commenter notes that in the 2016 Response to Comment
Document (p. 2-61), the EPA stated, ``that direct regulation of GHG
enables the reduction of additional methane emissions beyond what could
be achieved by prior VOC-focused rules.''
Response: The EPA agrees that, in theory, the direct regulation of
GHG and consideration of the costs in relation to GHG reduction could
result in more stringent standards and more emission reductions than if
decisions were made entirely based on VOC emission reductions. The EPA
also acknowledges that, for the 2016 Rule, the costs were considered
both in relation to the VOC and methane emission reductions. However,
the EPA disagrees with the comment that removing methane standards
would ``almost certainly'' lead to less protective standards. A
separate action amending NSPS subpart OOOOa (EPA-HQ-OAR-2017-0483; FRL-
10013-60-OAR; FR Doc. 2020-18115), which will be finalized in the
Federal Register of Tuesday, September 15, 2020, is an example of how
this assertion by the commenter is incorrect.
In 2018, the EPA proposed amendments and clarifications to NSPS
subpart OOOOa (83 FR 52056, October 15, 2018) as a result of the
reconsideration of issues raised in petitions on the 2016 Rule. In
2018, the EPA proposed to decrease the monitoring frequency for well
sites with average combined oil and natural gas production for the
wells at the site greater than or equal to 15 barrels of oil equivalent
(boe) per day from semi-annually to annually. The EPA also proposed to
decrease the monitoring frequency at compressor stations from quarterly
to semi-annually. For both of these situations, the standards were both
for VOC and methane and the cost-effectiveness based on both VOC and
methane emission reductions considered. In fact, the ``multi-
pollutant'' cost effectiveness was also considered where the control
costs were split between VOC and methane.
In a separate action, the EPA is finalizing the reconsideration
amendments to NSPS subpart OOOOa (EPA-HQ-OAR-2017-0483; FRL-10013-60-
OAR; FR Doc. 2020-18115). However, the decisions for these
reconsideration amendments take into account this final policy review
action, which first rescinds the methane standards for production and
processing sources. Therefore, the separate reconsideration amendments
are finalizing ``VOC-only'' standards based on the cost effectiveness
of the reduction in VOC only. These final reconsideration amendments
are more stringent than the proposed reconsideration amendments, which
were based on both VOC and methane standards. Specifically, in the
separate reconsideration action, the EPA is finalizing semi-annual
monitoring for well sites with average combined oil and natural gas
production for the wells at the site greater than or equal to 15 boe
per day and semi-annual monitoring for gathering and boosting
compressor stations. Therefore, in this specific situation, the
elimination of methane standards resulted in more stringent standards.
Comment: Commenters state that the redundancy rationale does not
consider future BSER evaluations required by CAA section 111(b)(1)(B).
One commenter notes that CAA section 111(b)(1)(B) requires the EPA to
periodically--every 8 years--review and, if appropriate, revise the
standards established under this section (we refer to this as the 8-
year review). Commenters state that removing methane will mean that the
methane requirements will not be subject to this review. One commenter
states that the EPA's claimed redundancy ignores that methane
regulation will have unique impacts on the 8-year review, including how
the Agency considers cost and benefits, which are relevant factors in
the likely stringency of the standards the EPA ultimately adopts.
A commenter states that, while the BSER is largely the same for
methane
[[Page 57051]]
and VOC in the current NSPS, there is no guarantee that the BSER will
not diverge for the two pollutants in the future. The commenter adds
that at least one other GHG--CO2--is emitted in significant
quantities from this industry, and the EPA may determine in the future
that it has a rational basis to regulate those emissions under CAA
section 111(b). The commenter states that, in that case, the BSER for
GHG may differ significantly from the BSER for VOC, since the former
would encompass controls for methane and CO2.
Some commenters remark specifically on the future of technologies
for fugitive emission detection and the impact on redundancy. One
commenter states that future developments in leak monitoring technology
may be able to speciate emissions (i.e., distinguish between methane
and VOC), potentially allowing operators to comply with a VOC-only NSPS
by controlling VOC while leaving methane emissions unabated. The
commenter states that the EPA fails to consider the impact of these
VOC-only technologies on future methane emissions in the absence of the
current NSPS. Another commenter similarly notes that for newly
developed technologies that have the potential to significantly reduce
the cost of compliance for regulated entities, the mandates are not
redundant. The commenter states that more than 20 percent of natural
gas produced in the U.S. has little or no VOC content, making VOC an
inherently poor measurement target compared to methane. The commenter
adds that some emerging emissions detection technologies--such as
spectroscopic sensors used for aerial and satellite surveillance--are
more sensitive to methane than to VOC. The commenter adds that, by
signaling that reduction of methane emissions is not a national
priority, the EPA discourages the development and improvement of the
best available controls for methane.
Response: The EPA acknowledges the comments made regarding
potential future control technologies and how that could impact
redundancy. However, methane and VOC emissions occur through the same
emission points and processes, and the same currently available
technologies and techniques minimize both pollutants from these
emission sources. The EPA recognizes that new control technologies are
under development, particularly for detecting fugitive emissions. These
emerging technologies include technologies that would detect speciated
fugitive emissions from oil and natural gas operations, and, in the
2019 Proposal, the EPA solicited comment on these technologies. 84 FR
50260. We received some information, but we consider it speculative and
lacking in specific examples, so that we do not have enough information
to evaluate these technologies at this time, much less how these
technologies could impact future analyses. In short, the potential for
developing future technology that will distinguish between methane and
VOC emissions does not change our conclusion that methane requirements
at present are redundant. If such technology does develop, the EPA
could consider whether to revisit the issue of regulation of methane.
By the same token, it is speculative that the 8-year review would
result in different levels of controls if EPA were to consider methane
emissions and requirements, along with VOC emissions and requirements.
In any event, commenters on that review could raise the issue of
whether methane should be controlled and whether doing so would result
in more stringent VOC controls. With respect to the comment that some
natural gas produced has little or no VOC content, the detection of a
leak using OGI equipment is not dependent on the relative
concentrations of VOC or methane, so that leaks of even low VOC gases
would still be identified and required to be repaired. As discussed
above, how the emergence of technology in the future could impact the
requirements to detect and repair leaks is speculative at this point in
time.
The EPA does not agree with the commenter that this action signals
a reduction in the prioritization of the reduction in methane. As
explained in section V.B.4 of this preamble and above in this section,
the methane and VOC requirements are redundant, and the rescission of
the methane requirements will streamline the regulation without
impacting the methane reductions. With regard to discouraging the
development of the best available controls for methane, future
evaluations of BSER will continue to recognize the nationwide profile
of natural gas, which includes VOC and methane. Therefore, improvements
for the control of methane will be considered, as they also will
represent improvements for VOC reductions.
Comment: One commenter expresses concern that although methane
reductions would still occur even after the EPA rescinds the methane
NSPS, the EPA has recently indicated its view that that reductions of
co-emitted (but formally unregulated) pollutants should not factor into
a benefits analysis in the same manner as those pollutants that are
directly regulated. The commenter contends that, under this view,
removing methane as a regulated pollutant could result in the Agency
disregarding the benefits of methane emission reductions, which the EPA
states are the only pollution reduction benefits from the oil and
natural gas sector that the EPA can monetize (citing 81 FR 35827, June
3, 2016).
Response: The EPA maintains, as it did at proposal (84 FR 50278),
that because the methane control options are redundant with VOC control
options in the NSPS subpart OOOOa rule, there are no expected emission
impacts or environmental disbenefits from rescinding the methane
requirement for the production and processing segments. The EPA has
made control decisions on the basis of the cost-effectiveness of the
controls, for which monetization of health and environmental impacts
other than emission reductions is not necessary. The decision whether
to quantify and monetize health and environmental impacts is based upon
technical judgments made within the context of developing RIAs which
are written to satisfy Executive Order 12866 requirements. The EPA
recognizes that in the current previous Oil and Natural Gas NSPS RIAs,
the Agency has not quantified the benefits of reductions in emissions
other than methane (except for quantifying the amounts of emissions
reduced). These RIAs also explained these technical decisions. However,
these choices have not influenced the choice of what pollutants to
regulate, or the stringency of the standards promulgated, in the Oil
and Natural Gas NSPS rulemakings.\71\
---------------------------------------------------------------------------
\71\ It should be noted that in its recently promulgated rule,
``National Emission Standards for Hazardous Air Pollutants: Coal-
and Oil-Fired Electric Utility Steam Generating Units--
Reconsideration of Supplemental Finding and Residual Risk and
Technology Review'' (signed by the Administrator on April 16, 2020),
https://www.epa.gov/sites/production/files/2020-04/documents/frn_mats_finding_and_rtr_2060-at99_final_rule.pdf, the EPA based its
regulatory decision primarily on the amounts and costs of reductions
of the regulated pollutant, but stated that it may continue to
consider the co-benefits of reductions in other pollutants, as long
as doing so is consistent with the applicable CAA provisions.
---------------------------------------------------------------------------
Comment: Several commenters state that the EPA fails to identify
any way in which the alleged redundancy is problematic. The commenter
notes that, while agencies may reconsider and revise their policies,
before doing so they must demonstrate ``that the new policy is
permissible under the statute, [and] that there are good reasons for
it,'' taking into account the record of the previous rule (citing Fox
Television, 556 U.S. at 515-16). The commenter states
[[Page 57052]]
that the EPA has failed to provide any ``good reasons'' for why the
alleged redundancy between methane and VOC requirements justifies the
removal of methane requirements. The commenter explains that the EPA
states in the 2019 Proposal that there are ``no expected cost . . .
effects from removing the methane requirements . . .'' (citing 84 FR
50247). The commenter states that the EPA characterizes removal of
methane requirements as ``less disruptive'' than removal of VOC
requirements (citing 84 FR 50260), but does not explain why it is
taking any ``disruptive'' action at all, especially since the 2016 Rule
has been in full effect and successfully implemented for over 3 years.
Response: The fact that the air pollution controls implemented by
sources in the Crude Oil and Natural Gas Production source category to
comply with the VOC NSPS reduce methane emissions along with VOC
emissions means that the legal requirement to control methane--that is,
the methane NSPS--is redundant to the VOC requirement, and, therefore,
is unnecessary. The fact that the methane NSPS does not provide
benefits--it does not reduce emissions beyond what would otherwise
occur--means that the EPA erred in the 2016 Rule when it determined
that it had a rational basis to promulgate the methane NSPS, which is
sufficient justification to rescind that regulation. As discussed
elsewhere, as a predicate for promulgating NSPS for methane, the EPA
was required to, and failed, to make a SCF for methane emissions from
the appropriately constituted source category.
Comment: One commenter states that the EPA's true rationale for
rescinding the methane NSPS is to prevent regulation of existing
sources under CAA section 111(d). The commenter notes that the courts
have held that administrative agencies must identify their actual
reasons for policy choices, that an agency's decision may be arbitrary
or pretextual if there is a substantial mismatch between the action and
the rationale, and that the courts will compare the evidence for the
Agency's decision with the stated explanation to discern whether such a
mismatch is present (citing Dep't of Commerce v. New York, 139 S.Ct.
2551, 2575 (2019)). Noting that CAA section 111(d) imposes, as a
precondition to regulation of GHG from existing sources, promulgation
of NSPS for GHG under CAA section 111(b), the commenter asserts that in
this case, the Agency's true rationale for rescinding the methane NSPS
is to prevent regulation of methane emissions from existing oil and
natural gas sources under CAA section 111(d). The commenter reviews
email communications between oil and natural gas industry officials and
EPA (including transition team) officials related to the Agency's
decision in early 2017 to rescind the Information Collection Request
(ICR) under CAA section 114 for information from existing oil and
natural gas sources concerning their methane emissions, coupled with
the rescission of that ICR, as evidence of what the commenter considers
to be the Agency's true rationale. The commenter asserts that the
Agency's stated rationale of redundancy is arbitrary and pretextual.
Response: The EPA disagrees with the commenter. The EPA's reasons
for rescinding the methane NSPS are as stated in the 2019 NSPS subparts
OOOO and OOOOa proposal, this preamble, and the accompanying documents:
The methane NSPS is redundant to the VOC NSPS and does not achieve
additional reductions. In other sections of this preamble and the
supporting documents, the EPA elaborates upon this rationale and relies
on it in responding to adverse comments. The Agency justified its
rescission of the ICR in the rulemaking action in which it did so, and
that action is separate from this rulemaking.
Comment: Several commenters address the issue of which set of NSPS
to retain, methane or VOC. One commenter notes that by keeping the
focus on VOC, the EPA ensures that storage tanks, which represent an
important source of emissions in the production, gathering and
boosting, and processing segments, remain regulated, whereas storage
vessels would not be regulated under a methane-only rule. The commenter
adds that the EPA data supporting NSPS subpart OOOO shows that, aside
from completion activities, estimated VOC reductions from storage
vessels represent the largest source of VOC reductions. See Regulatory
Impact Analysis, April 2012 at Table 3-4. See 2019 Proposal, 50260
(``Some sources, such as storage vessels, are subject only to VOC
requirements and not methane requirements.''). Other commenters
asserted that, if redundancy is the concern for the EPA, the Agency
should make methane the key pollutant and remove VOC from the
requirements because this will allow for the regulation of existing
sources of methane and VOC, and thereby result in reduced
environmental, social, and health impacts from both pollutants.
Response: As noted in section V.B above, the EPA is rescinding the
methane NSPS and retaining the VOC NSPS, rather than vice versa,
because rescinding the latter would affect more facilities, and affect
facilities that had been regulated for a longer period. The EPA does
not agree that the methane standards should be retained instead of the
VOC standards in order to retain the trigger of the CAA section 111(d)
requirement to develop standards for existing sources standards. The
purpose of the NSPS is to reduce emissions from new sources; as a
result, the decision of which NSPS to retain should not turn on the
impact on existing sources.
IX. Summary of Significant Comments and Responses on Significant
Contribution Finding for Methane
This section summarizes and responds to comments on the 2019
Proposal's solicitation of comment on whether the EPA is required to
make, or is authorized to make, a SCF for methane emissions from the
Oil and Natural Gas Production source category as a predicate for
promulgating methane NSPS.
A. Requirement for Pollutant-Specific Significant Contribution Finding
1. Promulgation of NSPS for Pollutants That the EPA Did Not Evaluate
When It Listed the Source Category
Comment: Some commenters assert that CAA section 111 cannot be
interpreted to authorize the EPA to promulgate NSPS for air pollutants
that were not the subject of the EPA's initial determination that the
source category causes or significantly contributes to dangerous air
pollution. Commenters argue that in determining which pollutants the
EPA should regulate from a source category under CAA section 111(b), it
is reasonable to conclude that it should be limited to the pollutants
that justified listing that source category for regulation in the first
place. Commenters add that this interpretation provides for consistency
in applying CAA section 111 across all air pollutants, that is, the EPA
regulates air pollutants that it considered when it made a SCF
determination for the source category, as well as air pollutants that
it regulates subsequently, as long as it makes a similar SCF
determination for those subsequently regulated air pollutants. A
commenter adds that this approach makes sense because, to list the
source category, the Agency must engage in some level of analysis to
understand the nature of the emissions from that category; and that the
Agency should apply the same analysis to air pollutants that it
subsequently seeks to regulate. Numerous commenters state that it is
anomalous for the EPA to attempt to regulate methane, as of 2016,
[[Page 57053]]
based on a SCF determination the EPA made in 1977 and 1978, when
methane was not even a regulated pollutant under the CAA.
Other commenters take the opposite view. One asserts that CAA
section 111(b)(1) affords the EPA broad discretion to determine which
pollutants and sources to regulate and allows the EPA to revise the
NSPS to include pollutants or emission sources that were not currently
regulated for a particular source category. Other commenters assert
that, if the Agency failed to regulate a pollutant emitted from a
listed category when it first issued standards for the source category,
it must do so in a later rulemaking to achieve the purposes of the CAA,
within the limitations set forth in CAA section 111. One commenter
argues that CAA section 111(b)(1)(A)'s statutory factors for listing a
source category provide a floor according to which the EPA must
regulate a particular pollutant from that category, regardless of
whether the pollutant is addressed in the initial listing decision.
Response: The EPA agrees that it promotes consistent treatment of
all air pollutants subject to the NSPS to require a pollutant-specific
SCF as a predicate for regulating a pollutant that the Agency did not
consider at the time it made the SCF for the source category and
promulgated the initial NSPS. The EPA further agrees that it is
anomalous for the Agency to newly regulate an air pollutant, like
methane, long after listing the source category on the basis of other
pollutants, unless the Agency makes a determination concerning that
pollutant that is comparable to the determination that it made when it
listed the source category. These considerations support the Agency's
interpretation, described in section VI above, that the Agency's
authority to promulgate standards of performance for particular air
pollutants under CAA section 111(b)(1)(B), along with the definition of
``standard of performance'' under CAA section 111(a)(1), must be
interpreted within the context of the finding the Agency makes
concerning the source category's contribution to dangerous air
pollution under CAA section 111(b)(1)(A). For the same reasons, the
Agency disagrees with commenters who assert that listing the source
category is a sufficient predicate for subsequent regulation of air
pollutants that the Agency did not address in that listing or in
promulgating the initial set of standards of performance.
2. Congressional Intent
Comment: The EPA noted in the 2019 Proposal that during the 1977
CAA Amendments, the House-Senate Conference Committee Report described
the revisions made to the SCF and endangerment requirements in CAA
section 111 and other provisions as follows:
Provides a uniform standard of proof for EPA regulation of air
pollutants which applies to the setting of . . . criteria for
national ambient air quality standards under Section 108; . . . new
stationary source performance standards under Section 111; . . . new
auto emission standards under Section 202; . . . regulations of
fuels and fuel additives under Section 211; aircraft emission
standards under Section 231.
In all future rulemaking in these areas, the Administrator could
regulate any air pollutant from those sources, the emissions of
which ``in his judgment cause or contribute to air pollution which
may reasonably be anticipated to endanger public health or
welfare.''
H.R. Rep. No. 95-564, at 183-84 (1977) (emphasis added) (cited in 84 FR
50264). The EPA stated in the 2019 Proposal that the emphasized
language is evidence that Congress intended to require the EPA (or
understood that the EPA had always been required), in promulgating a
pollutant-specific NSPS under CAA section 111, to make a pollutant-
specific finding, as the EPA does under the other provisions mentioned
in the Conference Report. Id. at 50264-65.
The 2019 Proposal added that the House Committee Report for the
1977 CAA Amendments included a similar statement in describing one of
its purposes for rephrasing the various endangerment finding
provisions: ``To provide the same standard of proof for regulation of
any air pollutant, whether that pollutant comes from stationary or
mobile sources, or both, and to make the vehicle and fuel industries
equally responsible for cleaning up vehicle exhaust emissions.'' H.R.
Rep. No. 94-1175, at 33 (1976) (emphasis added) (cited in Id. at
50265). The EPA added that the emphasized phrase could suggest that the
House Committee drafters understood the SCF provision in CAA section
111(b)(1)(A) to concern the particular air pollutant subject to the
NSPS, like other analogous provisions. Id.
Commenters offered competing interpretations of these statements in
the 1977 legislative history. Some commenters agreed with the EPA's
discussion, noted above. Other commenters, however, state that those
Committee Report statements do not support interpreting CAA section 111
to require a pollutant-specific SCF. They assert that the 2019 Proposal
was incorrect in suggesting that the 1977 CAA Amendments imposed
uniform requirements on the several CAA provisions calling for
contribution and endangerment determinations; rather, the commenters
noted, the precise terms Congress adopted varied for each of those
provisions, the terms function differently for each of the provisions,
and the language in the Conference Report was a paraphrase of those
provisions. For example, one commenter noted, the statement in the
Conference Report does not describe how the cause-or-contribute phrase
that appears in section 108 works. The commenter explained that this
phrase relates not the to ``the Administrator['s] . . . regulat[ion]
[of an] air pollutant from [a] source[ ],'' but instead to the
Administrator's decision as to which emissions to include on the list
of NAAQS pollutants. The commenter states that the NAAQS program is an
area-specific program, not a source-specific one, and it grants states,
not the Administrator, the primary authority to directly control
emissions to achieve the NAAQS. Other commenters state that the purpose
of this language in the Conference Report was to explain that Congress
revised the various SCF and endangerment provisions to assure that they
were each precautionary, not to assure that they each required a
pollutant-specific SCF. Another commenter notes that these revisions to
the SCF and endangerment provisions were made to CAA section
111(b)(1)(A), which covers source category listings, but not to CAA
section 111(b)(1)(B), which requires the EPA to promulgate standards of
performance. The commenter asserts that, if Congress had wanted to make
clear that the EPA may not issue standards under CAA section
111(b)(1)(B) unless it had made a pollutant-specific SCF, it could have
achieved that result by amending CAA section 111(b)(1)(B) in addition
to CAA section 111(b)(1)(A), but it chose not to do so. The commenter
asserts that ``[w]hen Congress amends one statutory provision but not
another, it is presumed to have acted intentionally'' (citing Gross v.
FBL Fin. Servs., Inc., 557 U.S. 167, 174 (2009)). Other commenters
contend that the Conference Report is at best ambiguous as to whether
the source or the air pollutant must be the focus of the ``cause or
contribute'' finding, and, in any event, cannot overcome what they
describe as the plain meaning of the statute.
Response: We appreciate the different perspectives that commenters
provide
[[Page 57054]]
on the above-quoted statements in the legislative history. Because
these statements explicitly describe CAA section 111, along with other
CAA provisions, as requiring a pollutant-specific SCF, we think that
they can fairly be read to indicate that interpreting CAA section 111
to require, or at least authorize the Administrator to require, a
pollutant-specific SCF is consistent with Congressional intent. It was
not necessary for Congress to amend CAA section 111(b)(1)(B) explicitly
to require a pollutant-specific SCF because its provisions, read in
context, already required, or at least authorized the EPA to require,
that SCF. None of the commenters point to anything in the legislative
history that indicates Congress did not intend to require a pollutant-
specific SCF under CAA section 111.
3. Comparison With Other CAA Provisions That Generally Include a Cause
or Contribute Finding on a Pollutant-Specific Basis
In the 2019 Proposal, the EPA noted that when Congress enacted CAA
section 111 as part of the 1970 CAA Amendments, Congress also enacted
several other provisions that required the EPA to promulgate
regulations for certain pollutants or certain sources, and that in each
of these provisions, Congress required the EPA to make an endangerment
or cause or contribute finding, and, further, required the EPA to make
the relevant finding on a pollutant-specific basis. The EPA solicited
comment on the relevance of whether any of these other provisions for
whether CAA section 111 could be interpreted to require, or at least
authorize, a pollutant-specific SCF. 84 FR 50263 and 64, 50265 n.74
(discussing, among others, CAA sections 108(a)(1)(A) and (B), 115(a),
202(a)(1), 211(c)(1), 231(a)(2)).
Comment: Some commenters stated that interpreting CAA section 111
to not require a pollutant-specific SCF renders that section anomalous
compared with other CAA provisions that premise the EPA's regulatory
authority on a pollutant-specific ``cause or contribute'' finding. One
commenter suggests that the primary difference between CAA section
111(b) and certain other CAA provisions is that CAA section 111(b)
requires that the source category cause or contribute ``significantly''
to air pollution endangering public health or welfare. The commenter
states that this implies that the EPA should face a higher burden to
justify regulating each specific pollutant under CAA section 111, not a
lower burden that allows the EPA to regulate every pollutant from the
source category so long as just one meets the statutory criteria.
Other commenters take the opposite position. They assert that the
requirements for pollutant-specific cause-or-contribute findings under
other CAA sections shows that Congress knew how to require pollutant-
specific findings when it intended to do so, and it evidently did not
intend to do so under CAA section 111. Another commenter adds that
Congress clearly chose to use different phrasing in different sections
because it amended all these provisions at the same time in the same
section of the 1977 CAA Amendments. From this, the commenter infers
that Congress chose to use different phrasing in CAA section 111 than
in the other provisions.
One commenter distinguishes CAA section 111 from other CAA
provisions that the EPA cited because the latter provisions identify
the particular category or class of sources as requiring regulation,
and the EPA proceeds to regulate particular pollutants from those
sources that it determines cause or contribute to dangerous air
pollution. The commenter states that these provisions include CAA
section 183(f)(1)(A) (addressing standards applicable to the loading
and unloading of tank vessels) and CAA section 213(a)(1) through (4)
(governing emission standards for new nonroad engines and vehicles). In
contrast, the commenter explains, CAA section 111 does not pre-define
any source category for regulation, but instead directs the EPA to
fulfill this obligation. The commenter asserts that it is implausible
that Congress would rest on any implication from CAA section 111(b)
that the EPA must make an additional SCF for each pollutant regulated.
The commenter adds that Congress knew how to provide for such an
additional finding because CAA section 213(a)(4) requires one for an
air pollution problem that (1) emissions from new nonroad engines or
vehicles contribute significantly to and (2) emissions from classes or
categories of new nonroad engines or vehicles cause or contribute to.
The commenter also identifies another distinction between CAA
section 111 and some of the other provisions the EPA cites, which is
that the latter address a specific kind or sub-class of pollutants. For
example, according to the commenter, CAA sections 108(a)(1)(A) and (B)
charges the Administrator with determining which emissions should be
classified as criteria pollutants subject to the NAAQS because they
contribute to dangerous air pollution and are emitted by numerous
diverse mobile or stationary sources, and CAA section 115(a) concerns
specific instances in which a pollutant or pollutants that originated
in the U.S. cross an international border and endanger public health or
welfare in a foreign country. The commenter suggests that a pollutant-
specific contribution finding is sensible for these programs: The
Agency's task is to identify all the air pollutants that contribute to
an air pollution problem in order to determine whether they should
qualify as NAAQS pollutants or whether they are harming public health
or welfare in another country. The commenter states that this approach
is distinct from CAA section 111, which is oriented toward source
categories and requires them to achieve an emission limitation that
reflects deployment of the BSER for dangerous pollutants, and which
does not focus on or even reference any particular type or sub-class of
pollutants.
Response: The EPA appreciates the commenters' perspectives on
whether the other provisions in the CAA that explicitly require a
pollutant-specific contribution finding suggest that Congress did or
did not intend that CAA section 111 do so as well. For the reasons
described in section VI above, by their terms, CAA section
111(b)(1)(B), in conjunction with CAA section 111(a)(1), and in the
context of CAA section 111(b)(1)(A), requires, or at least authorizes
the EPA to require, a pollutant-specific SCF as a predicate to
promulgating a NSPS for that pollutant, notwithstanding the fact that
Congress did not explicitly require such a determination in CAA section
111(b)(1)(B). We believe that this interpretation is consistent with
the fact that Congress included requirements for a pollutant-specific
cause-or-contribute finding in other CAA provisions. It is true, as the
EPA recognized in the 2019 Proposal, 84 FR 50264, and as commenters
noted, these other provisions differ from CAA section 111(b) in certain
respects, but they differ from each other as well. For example, in CAA
sections 213(a)(2), (3), and (4), Congress required a two-step
determination, unlike in other provisions. In addition, the fact that
CAA section 111 delegates to the EPA the task of identifying the source
category for regulation, whereas other provisions themselves identify
the source category, explains why it is necessary for the EPA to make a
SCF for the source category (it is to assure that the source category
merits regulation), but does not provide a compelling reason why the
EPA should not also,
[[Page 57055]]
when it subsequently promulgates a NSPS for a particular pollutant,
make a SCF for that pollutant. The important point from comparing these
various provisions is that Congress recognized the utility of a
pollutant-specific cause-or-contribute finding in a range of
circumstances, including a range of regulatory schemes for a range of
industries that emit a range of air pollutants that affect a range of
geographic areas (including other nations, under CAA section 115). That
supports interpreting CAA section 111 to include a pollutant-specific
finding as well.
Comment: A commenter asserts that a two-step process in which the
EPA makes a SCF for the source category and then for the particular
pollutant is anomalous since the other provisions the EPA cites involve
only a one-step process. The commenter adds that the two-step process
is anomalous because the first step--listing the source category on
grounds that it contributes significantly to dangerous air pollution--
becomes unnecessary if the EPA must also determine that particular
pollutants contribute significantly to dangerous air pollution. The
commenter further suggests that a two-step scheme creates two
additional anomalies: (1) The EPA might determine that emissions from a
source category significantly contribute, but might not be able to
determine that any individual air pollutant significantly contributes,
and, therefore, might not be able to regulate at all; and (2) the EPA
might determine that emissions from a source category significantly
contributes, but might be able to regulate only an insignificant
portion of those emissions. Another commenter asserts that the other
provisions require only a cause-or-contribute finding, not a cause-or-
contribute significantly finding, which casts doubt on the EPA's
interpretation that CAA section 111(b) requires the latter type of
finding.
Response: As noted above, CAA sections 213(a)(2), (3), and (4)
impose a two-step process. The commenter's claimed anomalies may be
theoretically possible but are highly unlikely to actually occur. The
source categories that the EPA lists under CAA section 111(b)(1)(A) are
industrial sources that the EPA has determined contribute significantly
to dangerous air pollution and that typically emit more than one air
pollutant; it is highly unlikely that none of such a category's air
pollutants, or only a minor portion of its pollutants, would contribute
significantly to dangerous air pollution, and the commenter does not
claim that either of those situations is true of any of the some 76
source categories that the EPA has listed. As noted below, the
rational-basis approach creates its own set of anomalies. Contrary to
the commenter's views, a two-step process under CAA section 111(b)(1),
under which the EPA makes a SCF for the source category and a SCF for
the particular air pollutants, does not render the first step
unnecessary. As the EPA explained in section VI above, the EPA has
generally evaluated the contributions of the source category and the
air pollutants it emits at the same time, and it has generally relied
on data concerning the individual air pollutants to make the SCF for
the source category. As a practical matter, then, the EPA generally
would need to make a SCF for an air pollutant separately from the SCF
for the source category only when the EPA seeks to promulgate a NSPS
for an air pollutant that the EPA did not consider when it listed the
source category. It is true, as the commenter noted, that the other
provisions cited by the EPA in the 2019 Proposal and discussed by the
commenters require a pollutant-specific cause-or-contribute finding,
and not a SCF, but interpreting CAA section 111(b)(1)(B) to require, or
at least authorize the EPA to require, a SCF is consistent with the
requirement for a SCF under CAA section 111(b)(1)(A). Section
111(b)(1)(B) of the CAA is not unique in this regard--in the 1990 CAA
Amendments, Congress revised the Good Neighbor Provision, CAA section
110(a)(2)(D)(i)(I), to require that SIPs prohibit sources from emitting
air pollutants in amounts that will ``contribute significantly'' to
nonattainment downwind.
4. Rational Basis Approach
Comment: Numerous commenters agree with, and elaborate on, the
concerns that the EPA expressed in the 2019 Proposal about the rational
basis approach (discussed in section VI of this preamble). Some note
that the approach is not tied to any language in the CAA, is not based
on any statutory criteria, and, thus, is largely undefined. They state
that it does not meaningfully limit the EPA's authority and, therefore,
injects confusion into the regulatory process. One commenter asserts
that it makes no sense to regulate unless there is assurance that the
regulation will produce the desired benefits, which may be accomplished
only by analyzing emissions on a pollutant-specific basis. Other
commenters add that the rational basis standard allows the EPA to rely
on a SCF made for a source category decades ago for a different
pollutant in order to justify regulating any pollutant from the
category--even pollutants that do not cause or significantly contribute
to endangerment. Many commenters assert that, without a pollutant-
specific SCF, the EPA would have unfettered discretion to add
pollutants no matter how minimal the contribution or how benign the
impacts to public health and welfare, and that this could result in
potentially costly, disruptive, and inefficient regulations on an
industry. Another commenter points to anomalies that could result from
the rational basis approach: (1) The approach could lead to a case
where the EPA would be free to regulate all pollutants from a source
category, even though only one of the pollutants was found to
contribute to endangerment; and (2) it could result in disparate
treatment of similarly emitting source categories: For example, Source
Categories 1 and 2 may both emit Pollutant A in equal amounts that do
not significantly contribute to endangerment, while Source Category 1
also emits Pollutant B in an amount that does significantly contribute
to endangerment. The commenter states that, under the rational basis
approach, the EPA would have the authority to list Source Category 1
and regulate emissions of Pollutant A from it, but would not have the
authority to list Source Category 2, and, therefore, would not be able
to regulate emissions of Pollutant A from it, even though each Source
Category's emissions of Pollutant A present identically insignificant
risks. The commenter contends that requiring a SCF for each pollutant
would prevent these anomalies. In contrast to the vague rational basis
standard, other commenters state, CAA section 111(b) provides clear
criteria for whether the EPA is authorized to regulate a source's
emissions of a pollutant: The endangerment and SCF determinations for
listing a source category. Other commenters add that CAA section 111(b)
established this rigorous finding as necessary to justify the EPA's
authority to promulgate nationwide standards, and that only a
pollutant-specific SCF, not a rational basis standard, would maintain
that rigorous approach.
Other commenters assert that the requirement of a rational basis
standard is appropriate. They note that the standard is equivalent to
the ``arbitrary and capricious'' standard. They state that CAA section
111(b)(1)(A), by its terms, applies the endangerment and SCF findings
to the source category as a whole, and not to each newly-regulated
pollutant emitted from a previously-listed source category, and that,
given that many decisions delegated to the EPA are governed by a
[[Page 57056]]
default rational basis standard, it is reasonable to conclude that
Congress could have intended that standard to govern the regulation of
subsequent pollutants from previously-listed sources in the absence of
any other prescription for how the EPA is to make the decision.
Commenters further state that the arbitrary and capricious standard is
not undefined. Rather, one commenter says, the Supreme Court, in
defining ``[t]he scope of review under the `arbitrary and capricious'
standard,'' has explained that ``the agency must examine the relevant
data and articulate a satisfactory explanation for its action including
a rational connection between the facts found and the choice made''
(citing Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 42-43 (1983)). The commenter adds that the
Court affirmed that it ``may not set aside an agency rule that is
rational, based on consideration of the relevant factors and within the
scope of the authority delegated to the agency by the statute.'' \72\
The commenter adds that this standard applies whether or not Congress
has expressly specified the criteria relevant to the Agency's decision.
A commenter further notes that under the ``arbitrary and capricious''
standard, the Court has identified certain factors that the EPA must
consider in promulgating emission standards under CAA section 111(b)
(citing Sierra Club v. Costle, 657 F.2d 298, 326 (D.C. Cir. 1981). A
commenter adds that the Court remanded the Lime Kiln NSPS under the
``arbitrary and capricious'' standard, and quoted from the legislative
history of the 1977 Amendments, which indicated Congress's intent that
the arbitrary and capricious standard to have teeth: ``With respect to
the `arbitrary and capricious' scope of review retained in these
amendments, the conferees intend that the courts continue their
thorough, comprehensive review which has characterized judicial
proceedings under the CAA thus far'' (citing Nat'l Lime Ass'n v. EPA,
627 F.2d 416, 452 (D.C. Cir. 1980) (quoting H.R. Conf. Rep. No. 564,
95th Cong., 1st Sess. 178 (1977))). The commenters contend that, under
the arbitrary and capricious standard, an EPA decision to promulgate a
standard of performance for a benign or harmless substance would fail.
---------------------------------------------------------------------------
\72\ By the same token, a commenter notes that the EPA explained
the rational basis test in its response to comments on the 2016 Rule
as follows: ``the EPA's use of the phrase `rational basis' . . .
explains how the agency's actions are supported by the record and is
a reasonable exercise of the EPA's broad authority under section
111'' (citing the EPA's Response to Public Comments at 2-16, Docket
ID Item No. EPA-HQ-OAR-2010-0505-7632 (May 2016).
---------------------------------------------------------------------------
Response: In the 2019 Proposal, the EPA acknowledged that the
rational basis test ``offers some protection against arbitrary or
capricious decisions by the EPA.'' 84 FR 50263. However, CAA section
111 includes no explicit criteria to guide the application of such a
test, and in the times that the EPA has used the test, the EPA has not
attempted to articulate criteria or metrics to guide it, and rather,
has relied on facts and circumstances. In those respects, the rational
basis test is largely (or wholly) undefined and could potentially
incorporate a wide range of considerations and lead to inconsistent
results. This creates uncertainty for the regulated industry and other
stakeholders over whether particular additional pollutants will be
regulated or not. The EPA has concluded that the standard is not
appropriate for determining the air pollutants for which it will
promulgate standards of performance under CAA section 111(b)(1)(B)
because of statutory context: CAA section 111(b)(1)(A) makes clear that
before the EPA may regulate any air pollutants from major new sources,
it must determine that the source category whose sources emit the air
pollutants cause or contribute significantly to dangerous air
pollution. This is a rigorous predicate for regulation. It is not
consonant with this rigorous predicate for the Agency to proceed to
regulate the individual air pollutants based only on a rational basis
determination. Rather, requiring the Agency to make a SCF determination
is consistent with CAA section 111(b)(1)(A). In addition, the SCF
determination is better defined because it is focused directly on the
extent of the air pollutant's impact on dangerous air pollution, and it
provides a metric for assessing that extent: The air pollutant causes
or contributes significantly to that air pollution. These metrics more
clearly cabin the EPA's discretion.
5. Impacts on the CAA Section 111 Program if a Pollutant-Specific SCF
Is Needed
Comment: Commenters state that for more than 4 decades the EPA has
interpreted CAA section 111(b)(1) to require a SCF as a prerequisite
only for the initial listing of a source category. Commenters contend
that, if the EPA now contradicts its past practice and interpretation
and undermines or repeals what they describe as the dozens of NSPS it
has issued during that time, entities that are subject to new and
existing source performance standards under CAA section 111, as well as
for the states and local agencies that implement those standards, and
other stakeholders, will face regulatory uncertainty and harm to their
reliance interests. Commenters add that the EPA's reversal of precedent
would also call into question the validity of state implementation
plans that were based in part on the continued existence of regulation
under CAA section 111(b), as well as the validity of state and Federal
plans based on CAA section 111(d) guidelines, and conclude that health
and welfare will suffer. Commenters express concern that the EPA fails
to provide an analysis of the potential impacts on the overall CAA
section 111 program if a pollutant-specific SCF is needed. Commenters
assert the EPA should not alter what they describe as the EPA's
longstanding interpretation that a pollutant-specific SCF is not needed
without first completing a full analysis of impacts such a change would
have on existing CAA section 111 rules and soliciting further public
participation through a separate notice-and-comment rulemaking process.
One commenter contends that, even if the EPA begins requiring a
pollutant specific contribution finding, this should not affect the
validity of previously, lawfully issued NSPS and CAA section 111(d)
guidelines and state plans.
Response: The EPA has listed some 76 source categories and
promulgated over 100 standards of performance for them. In the vast
majority of cases, the EPA identified the pollutants of concern at the
time that it listed the source category or when it promulgated the
initial set of standards of performance contemporaneously with the
listing or shortly thereafter. It is only in recent rulemakings
concerning GHG that stakeholders have expressed concerns that the EPA
had not considered GHG when listing the source category, and, thus, had
not made determinations for GHG consistent with the determinations that
the EPA made to justify regulation of other pollutants from the source
categories. Accordingly, the EPA disagrees with commenters who are
concerned that interpreting CAA section 111 to require a pollutant-
specific SCF will undermine numerous NSPS, with adverse effects for
other CAA control programs. In addition, the rational basis approach,
under which the EPA promulgates a standard of performance for a
pollutant upon determining that it has a rational basis for doing so,
cannot be considered to be long-established. The EPA clearly
articulated this standard for the first time to justify regulation of a
previously unregulated
[[Page 57057]]
air pollutant in the 2015 EGU GHG NSPS rule, and then again in the 2016
Rule. The EPA considers that the present rulemaking has provided a full
opportunity for the public to respond to the solicitation of comment on
the pollutant-specific SCF interpretation.
B. Significant Contribution Finding in 2016 Rule
1. 2016 SCF for Methane Emissions From the Oil and Natural Gas Source
Category
Comment: Several commenters contend that oil and gas methane
emissions are too small to be considered ``significant.'' These
commenters cite as support that the contribution of oil and gas to
total U.S. GHG emissions is only 3 percent, that U.S. methane emissions
are only 7 percent of global methane emissions, that U.S. methane
emissions are only 1 percent of global GHG emissions, and that
estimated impacts of the 2016 Rule would be to reduce methane
concentrations in 2100 by 0.12 percent and temperatures by less than a
thousandth of a degree. Other commenters assert that, if a SCF for
methane emissions from the Oil and Natural Gas source category were
required under the statute, the EPA fully satisfied this obligation in
the 2016 Rule. Several commenters assert that, even if the EPA
eliminates the transmission and storage segment from the source
category, the 2016 SCF remains appropriate and binding. A commenter
notes in the 2019 Proposal the production and processing segments
account for 1.8 percent of global methane and 0.3 percent of total
global GHG and states this is equal to or greater than the total
methane emissions from all but eight countries around the world. The
commenter asserts that these totals are significant by any measure. One
commenter states that because climate change is a global phenomenon,
small percentage changes are relevant and addressing a large number of
smaller sources will ultimately reduce the rate of climate change. The
commenter adds that to solve a global problem, reductions of a fraction
of a percent are substantial and important (citing 2016 Rule's Response
to Comments Document, Docket ID Item No. EPA-HQ-OAR-2010-0505-7632).
One commenter states that, if the production and processing segments
were listed as an individual methane source, it would still be larger
than every other source currently listed apart from enteric
fermentation. One commenter notes that in light of methane's 20-year
GWP of 87, methane from the domestic sources accounts for 9.3 percent
of total U.S. GHG emissions and 1.2 percent of global GHG emissions.
One commenter states that the transmission and storage segment emits
16.8 percent of the source category's total GHG emissions and it would
be arbitrary and capricious for the EPA to undermine its 2016 SCF by
removing from that source category facilities that emit only a minority
of the pollutants.
Response: The EPA agrees with commenters that the 2016 Rule failed
to provide a pollutant-specific SCF as a prerequisite to imposing NSPS
regulations for methane emissions. The SCF determination made in the
2016 Rule was on the basis of methane emissions from the production,
processing, transmission and storage segments. In this action, the EPA
is removing the transmission and storage segment from the source
category. The 2016 Rule did not assess whether methane emissions from
the production and processing segments alone cause or contribute
significantly to dangerous air pollution; thus, we find that the 2016
Rule's determination is not adequate. In addition, the EPA has yet to
makes an appropriate determination that methane emissions from the Oil
and Natural Gas Production source category cause or contribute
significantly to dangerous air pollution. The EPA appreciates the
commenters' views concerning the amounts and impacts of methane
emissions from the transmission and storage segment, as well as the
production and processing segments, but until the EPA itself reviews
and assesses those amounts of emissions, it cannot make a determination
as to whether methane emissions from the production and processing
segments contribute significantly to dangerous air pollution.
2. Identification of the Standard for Determining Significance
Comment: Commenters responded to the EPA's solicitation of comment
concerning whether, as a matter of law, under CAA section 111, the EPA
is obligated to identify the standard by which it determines whether a
source category's emissions contribute significantly, and whether, if
not so obligated, the EPA nevertheless fails to engage in reasoned
decision-making by not identifying that standard. Some commenters
stated that the EPA must identify the standard by which it determines
whether a source category's emissions ``contribute significantly.''
They asserted that, in order to not be arbitrary and capricious, an
agency must articulate a reasonable explanation for the actions it
takes, and that as a result, the EPA should establish what constitutes
``significant'' contribution for purposes of CAA section 111(b). They
note that the EPA has done so for other programs that require a similar
showing, such as CAA sections 110(a)(2)(D)(i), 189(e), and 213 (citing
76 FR 48208, 48236 and 37 (August 8, 2011) (Cross-State Air Pollution
Rule)). Other commenters assert there is no indication that Congress
intended that the EPA must establish such a standard before making a
SCF and that the EPA has made SCFs for dozens of source categories over
almost 50 years without having established such a standard. They added
that in the past, the EPA has appropriately relied on a facts and
circumstances analysis and that it would be irrational to adopt a
standard or threshold because different air pollutants have different
effects on health and/or welfare, as well as different geographic
trajectories.
Response: The EPA appreciates these comments, as well as the
additional ones noted in the Response to Comments Document. They will
inform the Agency's future consideration of this issue. As explained
above, the Agency has concluded that it must identify a standard for
``contribute significantly'' in order to make a SCF for a source
category, to ensure not only that the public is on notice of the
criteria that the Agency uses in making such determinations but also
that the Agency itself is acting consistently in making such
determinations. However, it is not necessary to resolve the specific
content of this standard in this rulemaking because, as discussed above
in section VI of this preamble, the EPA is rescinding the SCF for
methane from the Oil and Natural Gas Production source category that
the Agency made in the 2016 Rule, on the ground that the scope of the
source category inappropriately included the transmission and storage
segment.
C. Criteria for Making a Significant Contribution Finding Under CAA
Section 111
Comment: Several commenters responded to the EPA's solicitation of
comment regarding criteria for the EPA to consider in making a SCF.
Some recommend that the EPA defer any action on SCF criteria and
instead address this question in a future advance notice of proposed
rulemaking, ICR, and/or proposed rulemaking. One commenter adds that
deferring the issue would allow the EPA to focus on finalizing the core
rulemaking and to streamline issues in any future legal challenge to a
final rule. Some commenters discuss other contexts under the CAA in
which the Agency has
[[Page 57058]]
interpreted and applied similar language to governing the SCF
determinations under CAA section 111(b)(1)(A). For example, these
commenters discuss factors suggested by past EPA action under CAA
sections 189(e) and 213(a)(2), (3), and (4). Some commenters suggest
specific criteria that the EPA could consider, including, among others,
consideration of the 1979 source category listing methodology, factors
related to climate change, all factors relevant to a source category's
contribution on a case-by-case basis, accumulation in the atmosphere of
pollutants, projected future emissions, and consistency with the goal
of protection of the Nation's air resources. We summarize these
comments at greater length in the Response to Comments Document.
Response: The EPA acknowledges the commenters' statements. As
pointed out in the proposal, the EPA does not intend for these comments
to inform the finalization of this rule, but rather to inform the EPA's
actions in future rules. Therefore, the EPA is not evaluating the
merits of comments on these topics at this time. However, the Agency
will look at the details provided in these comments when considering
future action in making a SCF.
X. Summary of Significant Comments and Responses Concerning
Implications for Regulation of Existing Sources
A. Existing Source Regulation Under CAA Section 111(d)
Comment: Several commenters agree with the statements in the 2019
Proposal that the EPA's rescission of the applicability of the NSPS to
methane emissions for the sources in the Crude Oil and Natural Gas
Production source category that are currently covered by the NSPS would
have the consequence that the EPA would no longer be authorized to
regulate existing sources of the same type in the source category under
CAA section 111(d).
However, other commenters assert that the 2016 Rule regulation of
methane from the oil and natural gas sector has already triggered a
mandatory duty for the EPA to develop CAA section 111(d) EG for
existing sources within that sector. They state that the EPA's 2009
endangerment finding for GHG emissions and its 2016 rational basis
determination and pollutant-specific endangerment/SCF for methane
emissions from the Oil and Natural Gas Production source category
obligate the EPA to regulate such emissions not just from new sources
under CAA section 111(b), but also from existing sources under CAA
section 111(d).
Response: The EPA agrees that following promulgation of the methane
NSPS in the 2016 Rule, the EPA was obligated to develop EG under CAA
section 111(d) for existing sources of methane in the source category.
However, that obligation ends with the rescission of those NSPS.
Section 111(d)(1) of the CAA provides by its terms that the EPA is
authorized to promulgate guidelines for regulation of any existing
source ``to which a standard of performance under this section would
apply if such existing source were a new source.'' Once the EPA has
rescinded the methane NSPS, existing sources of methane would no longer
be subject to such an NSPS if they were new sources. As a result, from
the time of the rescission forward, the EPA would no longer have
authority to promulgate guidelines to regulate those sources. Nothing
in CAA section 111(d) indicates that once the EPA promulgates NSPS that
trigger an obligation to regulate existing sources, that obligation
remains in place even after the NSPS has been rescinded.
Comment: As discussed in the proposal preamble for this action, the
EPA interprets CAA section 111(d) as not permitting a CAA section
111(d) existing source regulation to be developed as a result of the
NSPS for VOC emissions from new sources in the Crude Oil and Natural
Gas Production source category under CAA section 111(b). Specifically,
the EPA stated that VOC do not qualify as the type of air pollutant
that, if subjected to a standard of performance for new sources, would
trigger the application of CAA section 111(d) the pollutants excluded
from regulation under CAA section 111(d) include pollutants which have
been included on the EPA's CAA section 108(a) list. VOC are not
expressly listed on the EPA's CAA section 108(a) list, but they are
precursors to ozone and PM, both of which are listed CAA section 108(a)
pollutants. The definition of ``air pollutant'' in CAA section 302(g)
expressly provides that the term ``air pollutant'' includes precursors
to the formation of an air pollutant ``to the extent that the
Administrator has identified such precursor or precursors for the
particular purpose for which the term `air pollutant' is used.'' Based
on this ``particular purpose'' phrasing, it is appropriate to identify
VOC as a listed CAA section 108(a) pollutant for the particular purpose
of applying the CAA section 108(a) exclusion in CAA section 111(d)
[hereinafter referred to as the EPA's ``VOC exclusion argument'']. 84
FR 50272. Comments provided on the proposal both agree and disagree
with this interpretation. These comments are provided below.
Commenters that agree with the EPA's interpretation assert that the
statute is clear that a source category cannot be subject to CAA
section 111(d) emission standards for ``any pollutant . . . for which
air quality criteria have . . . been issued or which is . . . included
on a list published under'' CAA section 108(a). The commenters state
that while VOC are not themselves directly on the list of criteria
pollutants under CAA section 108, the EPA has designated them as
precursors for ozone and PM, both of which are listed CAA section
108(a) criteria pollutants. The commenters add that the CAA defines
``air pollutant'' to include ``any precursors to the formation of any
air pollutant, to the extent the Administrator has identified such
precursor or precursors for the particular purpose for which the term
`air pollutant' is used,'' and because the ``particular purpose'' of
the term ``air pollutant'' in CAA section 111(d) is to identify
pollutants that are already subject to regulation under the NAAQS
program, it is appropriate to conclude that VOC are one of the ``air
pollutants'' covered by this exclusion.
Conversely, several other commenters disagree with the EPA's
interpretation that CAA section 111(d) does not require that existing
source regulation be developed as a result of the NSPS for VOC
emissions from new sources in the Crude Oil and Natural Gas Production
source category under CAA section 111(b). One commenter notes that the
EPA first argues that VOC are ``regulated under the CAA's NAAQS/SIP
program'' because they are precursors to listed pollutants ozone and
PM, pointing to provisions of the CAA relating to requirements for
ozone non-attainment areas that explicitly call for reductions in VOC
emissions. The commenter asserts, however, that the statutory test for
whether a pollutant is excluded is not whether it is ``regulated
under'' CAA section 108 or CAA section 110, but rather the test is
whether air quality criteria have been issued for the pollutant of
concern, or the pollutant has been listed under CAA section 108. The
commenter asserts that neither of these is true here for VOC, as the
only pollutants for which air quality criteria have been issued or
included on a list published under CAA section 108(a) are
SO2, PM10 and PM2.5, CO, ozone,
NOX, and lead.
One commenter contends that the proposal VOC exclusion argument
contradicts the Agency's own position in other regulations and notes
that in 1996 the EPA finalized parallel
[[Page 57059]]
rulemakings for new and existing municipal solid waste (MSW) landfills
under CAA sections 111(b) and 111(d), respectively. The commenter
states that pollutants deemed harmful to human health emitted from MSW
landfills included methane, VOC, HAP, and odorous compounds,
collectively termed ``landfill gas.'' The commenter notes that the EPA
chose to use non-methane organic compounds (NMOC), which includes VOC,
as a surrogate for landfill gas in its setting standards of performance
and EG for new and existing MSW landfills under CAA sections 111(b) and
111(d). The EPA updated these regulations in 2016 (2016 Standard), with
its new EG ``expected to significantly reduce emissions of LFG
[landfill gas] and its components, which include methane, VOC, and
hazardous air pollutants (HAP).'' The commenter states that the EPA
noted that reducing methane had become more important since the prior
1996 rulemaking, which had focused on NMOC (including VOC) ``because
NMOC contain[ed] the air pollutants that at that time were of most
concern due to their adverse effects on public health and welfare.''
The commenter adds that, as such, the 2016 Standard was focused on
``reducing [both] the NMOC and methane components of LFG.'' The
commenter provides that the EPA acknowledged VOC was a precursor to
criteria pollutants PM2.5 and ozone, but nowhere did the EPA
make the argument the Agency now raises that VOC status as a precursor
means that it is not subject to regulation under CAA section 111(d).
Response: First, with respect to the comment that the EPA has
applied a ``regulated under CAA 108'' test rather than the ``listed
under CAA 108'' test that is stated in the statute, this comment
misstates the EPA's argument. The EPA's conclusion is that VOC are
included within the CAA section 108(a) listings for ozone and
PM2.5 for the particular purpose of applying the CAA section
108(a) exclusion in CAA section 111(d). The ``regulated under CAA 108''
point is one of the reasons why the EPA has concluded that it is
appropriate to consider VOC to be part of the CAA section 108(a)
listings for ozone and PM 2.5 for this purpose--because VOC are
regulated through the NAAQS implementation program, and thus there is
no gap in the CAA regulation of VOC that needs to be covered by CAA
111(d) regulation. In other words, we are not concluding that VOC are
excluded from CAA 111(d) regulation because they are regulated under
the NAAQS implementation program. Instead, we are concluding that VOC
are excluded from 111(d) regulation because they are part of the CAA
108(a) listings for ozone and PM2.5 for the purpose of
applying CAA section 111(d), and we reach that conclusion based in part
on the fact that VOC are regulated through the NAAQS implementation
program.
Second, the argument that EPA's regulation of municipal solid waste
(MSW) landfill emissions (sometimes referred to as ``landfill gas'')
under CAA 111(d) contradicts EPA's conclusion that VOC cannot be
regulated under CAA 111(d), because MSW landfill emissions landfill
includes VOC among its components, is incorrect. The EG and standards
of performance for MSW landfills that were originally promulgated in
subparts Cc and WWW of part 60 and subsequently in subparts Cf and XXX
regulate only ``MSW landfill emissions,'' not the individual components
of landfill gases. See 40 CFR 60.30c through 60.36c; 40 CFR 60.30f
through 60.41f; 40 CFR 60.750 through 60.759, and 40 CFR 60.760 through
60.769. Both the regulatory text in these subparts and the EPA's
preamble discussion explicitly address this issue and clarify that
``MSW landfill emissions'' is a single designated pollutant and the
only pollutant subject to regulation by these subparts.
For example, the regulatory text of 40 CFR part 60, subpart Cc,
clarified that it contains guidelines for the control of ``certain
designated pollutants'' and identifies ``MSW landfill emissions'' as
the pollutant to be controlled by the state plans. 40 CFR 60.30c and
60.33c(a). The same is true for 40 CFR part 60, subpart Cf. 40 CFR
60.30f (subpart establishes requirements for ``designated pollutants),
60.33f(a) (pollutant to be controlled is ``MSW landfill emissions'').
Similarly, 40 CFR part 60, subparts WWW and XXX, require affected
sources to collect and control landfill gases, and each defines ``MSW
landfill emissions'' as ``gas generated by the decomposition of organic
waste deposited in an MSW landfill or derived from the evolution of
organic compounds in the waste.'' 40 CFR 60.751; 40 CFR 60.761. This
definition in each subpart makes clear that the regulated pollutant is
confined to emissions that originate from an MSW landfill.
Further, in proposing the MSW regulations in 1991, the EPA was
explicit that it was regulating only MSW landfill emissions
collectively, and not the individual components of those emissions. The
EPA stated the following in the preamble to the proposed rule:
The pollutant to be regulated under the proposed standards and
guidelines is ``MSW landfill emissions.'' Municipal solid waste
landfill emissions, also commonly referred to as ``landfill gas,''
is a collection of air pollutants, including methane and NMOC's
[non-methane organic compounds], some of which are toxic. The
composite pollutant is proposed to be regulated under section
111(b), for new facilities, and is proposed to be the designated
pollutant under section 111(d), for existing facilities.
56 FR 24468, 24470 (May 30, 1991). In additional discussion, the EPA
explained the following:
The EPA views these emissions as a complex aggregate of
pollutants which together pose a threat to public health and welfare
based on the combined adverse effects of the various components. . .
. [T]he exact composition of MSW landfill emissions can vary
significantly from landfill to landfill and over time. Although the
types of compounds are typically the same, the complex mixture
cannot be characterized quantitatively in terms of single
pollutants. The EPA thus views the complex air emission mixture from
landfills to constitute a single designated pollutant.
Id. at 24474-24475. Thus, the argument that VOC or any other of the
individual components of landfill gases are separately regulated under
these provisions is incorrect and inconsistent with the regulatory text
and record for these subparts.
Comment: The proposal preamble for this action cited CAA section
112(b)(2) and argued that the ``except'' phrasing of CAA section
112(b)(2) suggests that air pollutants which are ``listed under section
7408(a)'' can be read to include precursors to the pollutant that is
listed under CAA section 108(a). The EPA provided that otherwise the
pollutants that are described in the second part of the sentence
(pollutants that meet the listing criteria and are precursors to a CAA
section 108(a) pollutant) would not be an exception to the prohibition
in the first part of the sentence. 84 FR 50272.
One commenter contends that the EPA's analogy to CAA section 112 to
ostensibly demonstrate that Congress would have explicitly subjected
precursors to regulation in CAA section 111(d) if it wanted to, because
it did so in CAA section 112 is inapposite here. The commenter states
that, first, as the EPA acknowledges, Congress provided a flexible
definition of ``air pollutant'' depending on ``the particular purpose
for which the term `air pollutant' is used.'' The commenter states that
the particular purpose for which the term ``air pollutant'' is used in
CAA section 112 is quite different than in CAA section 111(d). The
commenter notes that the relevant statutory provision in
[[Page 57060]]
CAA section 112 excludes from regulation as a HAP any ``air
pollutant[s] listed under section [108(a)] . . . except that . . .
precursor[s] to a pollutant which [are] listed under section [108(a)]''
can be regulated as a HAP. The commenter states that the EPA argues
that to interpret the phrase ``air pollutant[s] listed under section
[108(a)]'' as being exclusive of precursors would render meaningless
the exception in CAA section 112(b)(2) for precursors. The commenter
contends that it may be true in the context of CAA section 112, but it
does not follow that the same interpretation applies in CAA section
111, which lacks such an express statutory exception.
Response: This commenter misunderstands the relevance of the text
in CAA section 112(b)(2) in determining whether VOC are excluded from
CAA section 111(d) regulation by the CAA section 108(a) exclusion. The
EPA is not drawing an analogy to the outcome in CAA section 112(b)(2),
which expressly removes precursors from the prohibition on the
regulation under CAA section 112 of air pollutants listed under CAA
section 108(a). The point here is that CAA section 112(b)(2)
demonstrates that Congress understood that the phrase ``air pollutant
listed under section 7408(a)'' could be read to encompass precursors.
Moreover, in CAA section 112(b)(2) Congress included express language
stating its choice: That regulation of precursors under CAA section 112
was not barred by the prohibition on regulating pollutants listed under
CAA section 108(a). In CAA section 111(d), however, Congress did not
state a choice; it stated an exclusion for pollutants listed under CAA
section 108(a) without specifying whether that exclusion extended to
precursors. This ambiguity, combined with the CAA section 302(g)
definition of ``air pollutant'' that expressly gives the EPA the
discretion to determine whether precursors are to be considered part of
``air pollutant'' on a case-by-case basis for each ``particular purpose
for which the term `air pollutant' is used,'' means that the EPA has to
apply its expertise in administering the CAA program to determine
whether the air pollutants excluded from CAA section 111(d) regulation
by the CAA section 108(a) exclusion covers precursors. For all of the
reasons discussed, the EPA has reasonably concluded that precursors are
excluded by the CAA section 108(a) exclusion.
Comment: The proposal preamble for this action stated that ``CAA
section 111(d) is properly understood as a `gap-filling' measure to
address pollutants that are not addressed under either the NAAQS/SIP
provisions in CAA sections 108-110 or the HAP provisions in CAA section
112. Because VOC are regulated as precursors to ozone and
PM2.5 under CAA sections 108-110, they are properly excluded
from regulation under CAA section 111(d) because the ``gap-filling''
function of CAA section 111(d) is not needed.'' 84 FR 50272. Some
commenters agreed with the EPA's interpretation that CAA ``section
111(d) is properly understood as a `gap filling' measure to address
pollutants that are not addressed under either the NAAQS [SIP]
provisions in CAA sections 108-110 or the [HAP] provisions in CAA
section 112.'' These commenters generally note that regulation of
existing sources under CAA section 111(d) is very rare and that the
provision has been used only a handful of times, in part because it can
only be triggered by a handful of pollutants and that Congress'
inclusion of CAA section 111(d) can only be viewed as a safety valve
for a limited number of circumstances. One commenter concludes that
because VOC emissions are regulated under CAA section 108 and related
statutory provisions as part of the NAAQS implementation program, they
do not fall into this ``gap'' and cannot be regulated under CAA section
111(d).
Conversely, other commenters assert that the EPA's proposal
preamble discussion regarding CAA section 111(d) as a gap-filling
measure does not support the EPA's claim that Congress intentionally
chose to exclude criteria pollutant precursors from regulation under
CAA section 111(d) and that the ramifications of such an interpretation
would be enormous.
The commenter states that the EPA makes a structural argument that
excluding VOC from regulation under CAA section 111(d) makes sense with
respect to that section's ``gap-filling'' role, since VOC are already
``regulated as pre-cursors under CAA sections 108-110'' and, thus,
there is no gap to be filled. However, the commenter believes that this
argument ignores the legislative history of CAA section 111(d). The
commenter asserts that CAA section 111(d) began as a Senate proposal
with an explicit list of pollutants to be regulated, and that
ultimately, this explicit list was replaced with gradually broader
phrasing until the language we see today was included in the 1970 CAA
Amendments. The commenter adds that the legislative history reflects
Congress' intent to give the EPA the flexibility to regulate a broad
range of pollutants, rather than to constrain the EPA's discretion to a
designated list of pollutants subject to regulation under CAA section
111(d). The commenter contends that the EPA's current interpretation
would restrict the applicability of CAA section 111(d) to a narrower
set of pollutants than Congress intended, and indeed, to a narrower set
of pollutants than the Agency itself has regulated in the past. The
commenter concludes that contrary to the EPA's assertions in its
proposal, such a narrow interpretation upends the very idea of a ``gap-
filling'' provision intended to give the Agency the flexibility to
regulate a broad range of pollutants where necessary to fill gaps left
by the NAAQS and NESHAP programs.
Response: The EPA disagrees with this comment. First, the argument
that legislative history shows that Congress intended to give the EPA
the authority to regulate a broad range of pollutants under CAA section
111(d) fails in the face of the statutory exclusions of pollutants that
Congress enacted. The exclusions in CAA section 111(d) expressly
narrowed the breadth of the pollutants that the EPA can regulate under
CAA section 111(d). Second, the gap-filling role of CAA section 111(d)
is properly understood to fill the gaps that exist between the
regulatory regimes that address criteria/CAA section 108(a) pollutants
and HAP--that is, the regulation of those pollutants that are not
listed and regulated under those other CAA programs. CAA section 111(d)
is not properly read to fill gaps that exist within those other CAA
programs.
B. Impact of Lack of Regulation of Existing Oil and Natural Gas Sources
Under CAA Section 111(d)
In the proposal preamble, the EPA stated that ``the lack of
regulation of existing sources under CAA section 111(d) will not mean a
substantial amount of lost emission reductions.'' 84 FR 50271. The
proposal preamble provided several reasons for why there could be
limited impact from not regulating existing oil and natural gas sources
under CAA section 111(d), including (1) equipment turnover/source
modifications will result in existing sources being subject to the
NSPS, (2) market incentives capture valuable methane product, (3)
voluntary actions to reduce methane emissions are prevalent, and (4)
state regulations result in emission reductions. The EPA received
comments that both agree and disagree with the EPA's conclusions and
reasoning presented in the proposal preamble. These comments and the
EPA response to their comments are provided below.
Comment: Several commenters assert that the EPA's assertion that
the lack of
[[Page 57061]]
regulation of existing sources directly caused by the proposed rule to
deregulate methane emissions from new sources will have ``limited
impact,'' does not have sufficient supporting data or analysis, and is
false and arbitrary and capricious. One commenter states that, although
the EPA attempts to downplay the likely impact from its non-regulation
of existing sources, the EPA fails either to define what it means by
``substantial'' or to provide evidence to support this claim.
The commenters state that it would not be rational or legal for the
EPA to put blinders on in order to ignore the enormous consequences of
rescinding methane regulation for existing sources. The commenters
assert that section 111 of the CAA is concerned with reducing dangerous
pollution from stationary sources--new, modified, and existing. See,
e.g., 42 U.S.C. 7411(b)(1)(B) (discussing ``new sources within such
category''); Id. 42 U.S.C. 7411(d)(2)(B) (discussing existing sources
as ``sources in the category of sources''). Some commenters state that
while the EPA claims that ``[a]nalysis of potential impacts of removing
the requirement to regulate existing sources under CAA section 111(d)
is outside the scope . . . and would be speculative,'' the EPA's
refusal to consider these impacts renders its proposal unlawful.
Response: The EPA acknowledges in the proposal preamble (84 FR
50271) that by rescinding the applicability of the methane NSPS for the
sources in the Crude Oil and Natural Gas Production source category,
existing sources of the same type in the source category will not be
subject to regulation under CAA section 111(d). The EPA is not required
under a CAA section 111(b) NSPS subpart OOOOa rulemaking, however, to
consider the impacts of existing sources not being regulated under a
hypothetical CAA section 111(d) rule as a result of amending a CAA
section 111(b) rule. While the EPA did not prepare and include a
quantitative analysis that estimates the levels at which source
modification/equipment turnover, market incentives, voluntary programs,
and state requirements--might limit potential emissions increases from
not regulating existing sources, the EPA discusses how each of these
factors currently contribute and will continue to contribute to the
downward trend of total methane emissions from oil and natural gas
existing sources in absence of an EG in absence of existing source CAA
section 111(d) guidelines.
The EPA concedes, however, that the use of the term ``substantial''
conveys a quantitative value, and that it would have been more accurate
in absence of a quantitative analysis to state that these factors all
have the potential to motivate or require operators to control
emissions from existing sources in absence of a CAA section 111(d) EG.
Further detail regarding comments received on the potential for
limiting emissions from existing sources for each of these factors, and
responses to these comments are provided below.
Comment: Several commenters suggest that the EPA's claim that
equipment turnover, market incentives, voluntary actions, and state
regulations will mean that there will not be a substantial loss of
emission reductions is inconsistent with findings the EPA itself made
in prior rulemakings, including the 2016 Rule. The commenters state
that the EPA has provided no rational basis for its drastic shift in
position (citing Lone Mountain Processing, Inc. v. Secretary of Labor,
709 F.3d 1161, 1164 (D.C. Cir. 2013)).
Response: The EPA's notes that changes have occurred since the
earlier rulemakings that affect emissions from existing oil and natural
gas sources. For example, there is greater industry participation in
voluntary methane emissions reduction programs/actions and more state
regulations/permits limiting emissions from oil and natural gas
operations than there were when the EPA developed the 2016 Rule.
Comment: Commenters contend that the EPA cannot support not
establishing standards under CAA section 111(d) based on source
modification/equipment turnover, market incentives, voluntary programs,
or state requirements factors mitigating potential emissions increases
from not regulating existing sources. The commenters note that the
cited factors are precisely the ones that Congress rejected when it
chose to require uniform national standards. The commenters also note
that the CAA is clear: The EPA ``shall prescribe regulations'' for
existing sources in listed source categories that are subject to new
source requirements for air pollutants not regulated under the NAAQS or
section 112. 42 U.S.C. 7411(d)(1). The commenters suggest that the
EPA's reliance on source modification, market incentives, voluntary
programs, and state requirements to justify the proposal exceeds the
Agency's authority under the CAA (citing Massachusetts v. EPA, 549 U.S.
497, 533-535 (2007) (the EPA cannot rely on a ``laundry list of reasons
not to regulate'' when there is a ``clear statutory command'' under the
CAA)).
Response: The EPA recognizes that rescinding the applicability of
the NSPS to methane emissions for the sources in the Crude Oil and
Natural Gas Production source category that are currently covered by
the NSPS will mean that existing sources of the same type in the source
category will not be subject to regulation under CAA section 111(d).
The reasoning for not developing a CAA section 111(d) standard is not
because source modification, market incentives, voluntary programs, and
state requirements will limit emissions increases that may result from
not pursuing a CAA section 111(d) standard. Rather, this is a legal
consequence that results from the application of the CAA section 111
requirements.
Comment: Several commenters specifically provide support for, and
opposition to, the individual factors (equipment turnover/source
modifications, market incentives, voluntary actions, and state
regulation) cited by the EPA as mitigating emission increases as a
result of not regulating existing sources.
Equipment turnover/source modifications. One of the factors that
the EPA provided in the proposal for the limited impact of the lack of
regulation of existing sources under CAA section 111(d) was ``that the
number of existing sources may decline over time due to obsolescence or
to shut down and removal actions.'' 84 FR 50273. The EPA provided
analysis to support this rationale and also solicited comment regarding
the rate at which this decline can be expected to occur. One commenter
supported the proposal by stating that because CAA section 111 defines
an ``existing source'' as one that is not a ``new source,'' the
universe of existing oil and natural gas sources potentially subject to
CAA section 111(d) requirements would be any affected facility for
which construction commenced on or before September 18, 2015,
indicating that any ``existing source'' has already been in operation
for at least 4 years. The commenter contends that even if the EPA were
to issue EG for methane for these sources today, the Agency's 40 CFR
part 60, subpart Ba regulations implementing CAA section 111(d)
(Emission Guidelines for Municipal Solid Waste Landfills) provide
states with 3 years to develop and submit their state plans. The
commenter notes that these state plans may provide a source with up to
24 months to comply with emission standards (or longer if the
compliance schedule includes legally enforceable increments of
progress), and states retain discretion under CAA section 111(d) and
the regulations to further
[[Page 57062]]
extend these compliance deadlines for an individual source based on its
remaining useful life or other factors. The commenter states that by
the time CAA section 111(d) emission standards would become effective,
roughly 10 years will have passed since the date marking the cutoff
between ``new'' and ``existing'' sources. During that time period, the
commenter states, it is likely that sources constructed before this
cutoff will have been plugged and abandoned or replaced with new
equipment that would itself be subject to the VOC requirements of NSPS
subpart OOOO (which will also reduce associated methane emissions). The
commenter adds that those existing oil and natural gas sources that are
not plugged and abandoned or replaced may also undergo changes that
qualify as ``modifications'' under NSPS subpart OOOOa, and in that case
would be treated as new sources.
Conversely, several other commenters express concern that the EPA
has not supported its claim that source turnover is one reason for the
limited impact of not regulating existing sources. One commenter
contends that the EPA's withdrawal of the ICR, coupled with its lack of
information that could support a reasoned analysis, makes its action
arbitrary and capricious. One commenter notes that the average life of
an oil and natural gas well is 20 to 30 years, meaning that facilities
installed prior to September 2015 could still be in operation in
September 2045. The commenter points out that many of the largest-
emitting facilities (e.g., field storage tanks) typically do not
undergo modification or reconstruction during their useful life.
Another commenter asserts that the EPA's claim that the existing
source inventory will turn over is undercut by the EPA's extensive
list, in the 2019 Proposal preamble, of questions to stakeholders about
the rate of modification practices within the sector. The commenter
states that the existence of the EPA's extensive list of questions
indicates that the EPA has little information on how regularly these
transitions occur and cannot claim that there will be little emissions
impacts until after the Agency has analyzed the information that it
requests.
Some commenters assert that the EPA-cited data from the U.S.
Greenhouse Gas Inventory (GHGI) (for pneumatic controllers,
compressors, tank throughput, and well completions); Drillinginfo.com
(for well completions); and NSPS subpart OOOOa compliance reports (for
assessing turnover rates) do not support the EPA's turnover
conclusions, and exhibit substantial limitations for assessing turnover
and obsolescence rates. For example, the commenters note that the GHGI
provides absolute source counts for each year, but does not include
information on specific sources--meaning it is not possible to assess
the number of sources that are new, the number that have ceased
operation, or the number that have remained in use over a time period.
Furthermore, the commenters contend that the EPA's analysis ignores
large sources of emissions, such as reciprocating compressors and all
leaks downstream of well pads. The commenters address the data the EPA
provided by source (i.e., pneumatic controllers, compressors, storage
vessels, well completions) to illustrate their point that the data are
insufficient or do not support the EPA's claim that many existing
sources will become ``modified'' sources in the future, while other
existing sources will be replaced by new facilities or shut down.
Some commenters also assert that the compliance reports and the
preliminary data submitted in response to the ICR indicate that the
large majority of facilities in the oil and natural gas sector are not
currently complying with the NSPS. This means, according to the
commenters, that these sources are existing sources with limited
turnover. One commenter adds that records of natural gas operations in
New Mexico demonstrates that numerous oil and natural gas fugitive
emissions sources, storage tanks, and loadout emissions sources with
construction dates going back to 1970 have not been modified,
reconstructed, or replaced with new equipment.
Market incentives. Many commenters generally agree with the EPA's
statements in the 2019 Proposal that market incentives already provide
a powerful impetus for owners and operators of sources in the oil and
natural gas industry to limit their methane emissions. Commenters state
that the fact that the ``pollutant'' at issue is itself a valuable
commodity means that source owners and operators have economic
incentives to prevent its release in order to maximize the amount of
natural gas that is sold for revenue. One commenter notes that the
EPA's data bear that out, demonstrating that over the past 80 years,
the fraction of natural gas withdrawals lost to venting and flaring has
decreased from over 20 percent to just 1 or 2 percent.
Conversely, other commenters contend that there are a number of
flaws with the EPA's theory that market incentives will meaningfully
address methane emissions from existing oil and natural gas sources.
First, one commenter notes that these theoretical ``market incentives''
largely depend on natural gas price trajectories, and contends that the
EPA fails to conduct any analysis of how operators might be anticipated
to reduce their emissions in light of expected natural gas prices. In
reality, the commenter states, examples abound of operators choosing to
flare or vent gas, rather than capture it, under current market prices.
Second, a commenter states that the EPA ignores a fundamental economic
principle in its discussion of market incentives: When there is a
negative externality associated with an activity (here, the emission of
both climate-disrupting and conventional pollution) that is not
reflected in an individual operator's costs, market incentives are
typically insufficient to reduce the activity to socially optimal
levels. Third, a commenter states that the emissions trends noted by
the EPA do not support the proposition that market incentives are
adequate to reduce methane emissions from existing sources; and in
fact, the data cited by the EPA shows that emissions from the oil and
natural gas industry have remained persistently high despite those
incentives.
Voluntary actions. Several commenters present information regarding
existing voluntary programs and methane mitigation strategies being
employed to reduce methane emissions from oil and natural gas
operations. These commenters present a series of voluntary programs/
strategies that the industry is currently undertaking and will continue
to undertake to help reduce its methane emissions.
One industry representative organization [American Petroleum
Institute (API)] adds that participants in The Environmental
Partnership's Leak Detection and Repair Program reported a leak
occurrence rate of just 0.16 percent, and that figure comes from more
than 156,000 surveys across more than 78,000 production sites and is an
important signal that ongoing industry efforts to identify and fix
emissions sources are working.
Several other commenters contend that voluntary measures to control
methane emissions would not compensate for the removal of the Federal
methane requirements. Commenters note that of the thousands of oil and
natural gas sources across the U.S., only about 1 percent participate
in voluntary programs to address methane emissions (citing http://blogs.edf.org/energyexchange/2019/09/03/epas-proposal-to-rollback-methane-rules-ignores-scientific-evidence-will-lead-to-5-million-tons-of-methane-pollution/).
[[Page 57063]]
Commenters note that even industry members that have participated in
these voluntary programs have noted that they are not a substitute for
strong, uniform regulatory requirements. In addition, some commenters
state that while voluntary efforts are important for reducing emissions
and understanding how production operations can become more efficient
and deliver environmental benefits, they cannot replace uniform Federal
methane regulations for the oil and natural gas industry.
State regulations. Some commenters agree with the EPA that there
are several states--including many of the states with the most
significant oil and natural gas activity levels, that are already
taking actions to reduce VOC and, by extension, methane emissions. One
commenter states that while not every state has adopted such
regulations, the states the EPA cites in the proposal cover the vast
majority of the nation's oil and natural gas production, and while not
every state's regulatory program covers all of the emission sources
listed in NSPS subparts OOOO and OOOOa, they do all include regulatory
requirements for storage vessels and fugitive emissions at well sites,
``two of the largest emission sources within the oil and natural gas
industry.'' Another commenter concludes that current regulations of VOC
emissions in North Dakota and other top oil and natural gas producing
states will be sufficient to reduce methane emissions from the oil and
natural gas industry, and that the participation of those states in
national organizations such as the Environmental Council of the States
(ECOS) are generating increasingly consistent state requirements that
will meaningfully reduce emissions should the proposed amendments be
finalized.
Other commenters assert that emissions control requirements of
state regulatory programs will not be sufficient to reduce methane
emissions. Commenters note that California, Colorado, Montana, New
Mexico, North Dakota, Ohio, Pennsylvania, Texas, Utah, and Wyoming--the
states that the EPA includes in the Proposal's ``Comparison of State
Oil and Natural Gas Regulations'' table, 84 FR 50277--take widely
divergent approaches that vary significantly in stringency, and most
states have no standards applicable to existing sources. In 2020,
according to the commenters, state standards applicable to existing
sources (certain standards in California, Colorado, Utah, Wyoming (in
the Upper Green River Basin ozone non-attainment area), and Texas) will
reduce only 180,000 metric tons of methane, roughly 5 percent of what
CAA section 111(d) guidelines modeled on the current NSPS could
achieve. Other commenters added that regulation of existing sources by
the EPA under section 111(d) of the CAA is preferable to a patchwork of
regulations created separately by each state Agency (or the lack of
regulation in some states). One commenter explains that Federal
regulation creates a consistent framework that establishes a minimum
level of emission control that strengthens public confidence in the
natural gas industry and ensures GHG emission reductions.
Modeling analyses of impacts of foregone regulation of existing
sources. Commenters presented two competing modeling analyses
estimating the potential impacts of not pursuing EGs under CAA section
111(d). One presented by API supported the EPA's statements in the 2019
Proposal that the impacts would be limited, and one presented by the
Environmental Defense Fund (EDF) disputed the EPA's
claim.73 74 The assumptions used in these analyses vary;
including the assumed EG requirements, the date when emissions that
could have and would be controlled under an EG, what sources/segments
the EG would cover, and how they accounted for turnover rates and state
regulations when projecting emissions from existing sources. Neither of
these analyses provide sufficient detail by emission source by segment
to do a direct comparison of their analyses. However, the most
important driver of differences between the competing analyses appears
to be the differing assumptions regarding the emissions sources and
segments the EG would regulate and the date when emissions could have
and would be controlled under an EG.
---------------------------------------------------------------------------
\73\ Earth Systems Sciences, LLC (for API). Methane Emissions
from Regulated Onshore Production Sources. Evaluating the Impact of
Existing Federal and State Regulations. October 2019. (Docket ID
Item No. EPA-HQ-OAR-2017-0757-2090, Appendix A) (API Analysis).
\74\ EDF. Assessment of Harm to the Public from Foregoing
Methane Guidelines for Existing Sources. November 21, 2019. (Docket
ID Item No. EPA-HQ-OAR-2017-0757-2134; Appendix D) (EDF Analysis).
---------------------------------------------------------------------------
The API Analysis includes a subset of emission sources compared to
the EDF Analysis. The API Analysis includes the following production
sources: Storage vessels, pneumatic devices, pneumatic pumps, and
fugitive emissions from non-low production wells--it does not include
low production wells, reciprocating/centrifugal compressors, or
fugitive emissions from gathering and boosting compressor stations
based on what was covered under the 2016 Control Techniques Guidelines
for the Oil and Natural Gas Industry.\75\ The EDF Analysis assumes that
the EG will extend the requirements found in the 2016 Rule to all
affected existing sources, specifically: High-bleed pneumatic
controllers at well sites and transmission and storage compressor
stations, all continuous bleed pneumatic controllers at natural gas
processing plants, fugitive emissions from gas processing plants, well
sites, and compressor stations, reciprocating and centrifugal
compressors at both processing plants and compressor stations, and
pneumatic pumps at well sites and processing plants. The EDF Analysis
estimates emissions uncontrolled from existing sources starting in 2017
that would have been controlled by an EG and API assumes that an EG
would not have been implemented (and, therefore, uncontrolled emissions
as a result of a lack of an EG would not apply) until 2028. In absence
of any other assumptions, this difference leads to vastly different
results.
---------------------------------------------------------------------------
\75\ U.S. EPA. Control Techniques Guidelines for the Oil and
Natural Gas Industry. October 2016. EPA-453-/B-16-001). https://www.epa.gov/sites/production/files/2016-10/documents/2016-ctg-oil-and-gas.pdf.
---------------------------------------------------------------------------
According to the API Analysis, if an existing source rule were
implemented in 2028, minimal methane emission reductions (5 percent-
(102,000 MT (metric tons) methane) from NSPS regulated sources would be
realized with their hypothetical reductions decaying to ~1 percent
(24,000 MT) of the total emissions from regulated sources by 2043. The
API Analysis concludes that by 2028, 94 percent (and by 2043, 99
percent) of oil and natural gas production will be regulated by 40 CFR
part 60, subpart OOOO or OOOOa. In other words, the API Analysis
estimates that an EG modeled after a modified version of the EPA's 2016
Control Techniques Guideline would only achieve an additional 5 percent
of emissions reductions when compared to the NSPS regulations alone.
The API provides that their analysis illustrates that an existing
source rule would provide negligible environmental benefit.
This is in contrast to the EDF Analysis that estimates that each
year that the EPA does not promulgate EG under CAA section 111(d) will
allow substantial additional emissions. They estimate emissions that
have occurred and will occur starting in 2017 through 2030 by the EPA's
failure to adopt EGs, as well as the emission reductions possible if
EGs were promulgated. For example, they estimate that, in 2021, 9.8
[[Page 57064]]
million metric tons of methane will be emitted by affected existing
sources. The EDF Analysis estimates that by 2030, emissions from
existing sources will be substantial and have a cumulative impact of
about 126 MMT of methane; about 29 MMT of VOC; and about 1.1 million
tons of HAP. The EDF Analysis estimates that in the over 3 years since
the EPA has promulgated the 2016 Rule, 33.4 MMT of methane have been
emitted by existing oil and natural gas sources. They further estimate
that 12.2 MMT of those methane emissions, or 37 percent, could have
been avoided if EGs were in effect.
Response: The EPA's response to comments specific to the four
factors cited by the EPA in the proposal preamble for why there would
be limited impacts from not regulating existing oil and natural gas
sources under CAA section 111(d), are provided in the following
paragraphs. Equipment turnover/source modifications. For the first
factor (equipment turnover/source modifications will result in existing
sources being subject to the NSPS), the EPA reviewed information and
analyses supporting the proposal's claim of a high turnover rate
(limited impact of an EG) and information/analyses that supporting a
low turnover rate (substantial impact of an EG).
Referring to the API and EDF Analyses, each of those analyses
accounted for turnover and source modifications differently in their
emissions projections in absence of an EG under CAA section 111(d). The
approaches used and information provided in these analyses do not allow
for a direct comparison on how their differing assumptions impact their
results. The API Analysis does not include modification triggers in
their projection modeling, contending that the lack of modification
triggers in their model is a conservative assumption because it will
underestimate the number of wells that are covered by NSPS requirements
in the future. However, the API Analysis used historical well records
to estimate a distribution for the expected lifetime of wells (and
associated equipment) in each state. The EDF Analysis assumes that
emissions attributable to existing sources decline year-over-year as
existing sources are removed from operation or undertake modifications
that subject them to regulation as modified sources under the 2016 Rule
based on turnover rate percentages. Insufficient detail provided by EDF
on where the turnover percentage rates they used in their analysis came
from. It is unclear how the percentages used (existing source decline
turnover rate of 5 percent for production sources, 4 percent for
gathering and boosting sources, and 1 percent for all downstream
sources) in the EDF Analysis were estimated.
The EPA recognizes the limitations pointed out by commenters
regarding the GHGI (for pneumatic controllers, compressors, tank
throughput, and well completions); Drillinginfo.com (for well
completions); and NSPS subpart OOOOa compliance reports (for assessing
turnover rates). As commenters indicate, when comparing activity
counts, compliance reports, and preliminary information received in the
ICR process, the data indicates that there is incomplete information to
assess turnover and obsolescence rates. The justification of the EPA's
rescission of the ICR is presented in a separate rulemaking action,
``Notice Regarding Withdrawal of Obligation To Submit Information'' (82
FR 12817, March 7, 2017). Absent further information (which is why we
solicited comment on turnover rates) and time, where compliance report
information can be assessed over a longer time period, there will
continue to be a high level of uncertainty with any estimates on
turnover/obsolescence rates.
The EPA maintains, however, as it did in the proposal, that
equipment turnover and source modification are a factor (albeit
difficult to quantify with any certainty) that will limit the emissions
from existing sources in the oil and natural gas industry in the
absence of a CAA section 111(d) EG. In addition to the reasons stated
in the proposal, we acknowledge that it could take up to 7 to 10 years
from date of promulgation of an EG for requirements to be fully
implemented. During this time, the EPA expects that a percentage of
existing sources will shut down or undertake modification, which will
result in them becoming subject to regulation under CAA section 111(b).
This turnover, in the case of well-sites, would likely be impacted as
production declines and dependent on the economic viability of the
well-site.
Lastly, the EPA acknowledges the information the state of New
Mexico identifies that indicates that there are existing sources in
that state that have never been modified as supporting that turnover
and modifications will not be a factor that results in reducing
emissions from oil and natural gas existing sources in that area in
absence of an EG and accepts that these are examples of existing
sources that have continued to operate for long periods of time without
being reconstructed or modified.
Market incentives. With regards to the second factor (market
incentives), as stated in section VII.B of this preamble, there are
market incentives for the oil and natural gas industry to capture as
much natural gas (and, by extension, methane) as is cost effective.
Depending on the future trajectories of natural gas prices and the
costs of natural gas capture and emission reductions, market incentives
may continue to drive emission reductions, even in the absence of
specific regulatory requirements applicable to methane emissions from
existing sources. While it is a challenging concept to quantify in
monetary terms, improving their environmental performance is
increasingly important for firms to maintain a ``social license to
operate.'' Generally speaking, the social license to operate means that
the firm's employees, investors, customers, and the general public find
that the firm's business activities and operations are acceptable to
continue to freely participate in the marketplace. Maintaining the
social license by improving environmental performance, such as reducing
emissions, can help firms respond to the complex environment within
which they operate in ways that are favorable to their longer-term
business interests.
In response to the commenter that states that the emissions trends
noted by the EPA do not support the proposition that market incentives
are adequate to reduce methane emissions from existing sources in lieu
of Federal regulation, the EPA is not making that claim. The EPA claims
that market incentives are one factor (among others) that contribute
and will continue to contribute to the downward trend of total methane
emissions from oil and natural gas existing sources in absence of an
EG.
Voluntary action. With regards to the third factor (voluntary
actions), the EPA maintains, and has received a lot of comments in
support of, its position that the plethora of voluntary methane
emissions mitigation programs will limit (among other factors) methane
emissions increases from existing oil and natural gas industry emission
sources in absence of a CAA section 111(d) EG. The EPA does
acknowledge, however, as several commenters contend, that the industry
as a whole is not uniformly meeting voluntary measures at the same
level of control and that some companies may not be participating in
cited voluntary methane emissions programs at all. This makes it
difficult to verify the impacts on emissions as a result of voluntary
program participation. Additional time will be needed to allow these
programs
[[Page 57065]]
to further develop and to be fully implemented to better quantify the
impacts the varied programs have on limiting emissions from oil and
natural gas industry sources.
In response to the commenters that contend that voluntary actions
cannot be relied upon to reduce methane emissions from existing sources
in lieu of Federal regulation, the EPA is not making that claim. As
with other mitigating factors cited by the EPA, voluntary actions are
one factor (among others) that contribute and will continue to
contribute to the downward trend of total methane emissions from oil
and natural gas existing sources in absence of an EG.
State regulations. With regards to the fourth and final factor
(state regulations), the EPA agrees that there could be an impact of
not regulating existing oil and natural gas sources, but at this time,
the EPA has not conducted a quantitative analysis of the impact of
state regulatory programs to determine the degree to which those
programs would reduce emissions from existing sources. The EPA also
acknowledges that state requirements do vary in stringency and that
only a subset of states include requirements for sources that the EPA
could potentially define as existing sources. However, those states
that have standards applicable to existing sources (certain standards
in California, Colorado, Utah, Wyoming (in the Upper Green River Basin
ozone non-attainment area), and Texas) account for a substantial
portion of oil and natural gas production in the United States. The EPA
also expects a percentage of existing sources to shut down or undertake
modification which would make them become subject to certain state
standards or permits. As one of the commenters points out, and the EPA
agrees, while not every state has adopted specific methane emissions
regulations for oil and natural gas industry existing sources, current
regulations (and permits) controlling VOC emissions in North Dakota and
other top oil and natural gas producing states will concurrently reduce
methane emissions from the oil and natural gas industry.
In response to the commenters that contend that state regulations/
permits that include oil and natural gas industry existing source
emissions control requirements cannot be relied upon to reduce methane
emissions from existing sources in lieu of Federal regulation, the EPA
is not making that claim. As with other mitigating factors cited by the
EPA, existing source state requirements are one factor (among others)
that contribute and will continue to contribute to the downward trend
of total methane emissions from oil and natural gas existing sources in
absence of an EG.
XI. Impacts of This Final Rule
A. What are the air impacts?
The EPA projected that, from 2021 to 2030, relative to the
baseline, the final rule will forgo about 448,000 short tons of methane
emissions reductions (10.1 million tons CO2 Eq.), 12,000
short tons of VOC emissions reductions, and 400 short tons of HAP
emission reductions from facilities affected by this
reconsideration.\76\ The EPA estimated regulatory impacts beginning in
2021 as it is the first full year of implementation of this rule. The
EPA estimated impacts through 2030 to illustrate the accumulating
effects of this rule over a longer period. The EPA did not estimate
impacts after 2030 for reasons including limited information, as
explained in the RIA.
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\76\ In a separate action, the EPA is finalizing technical
reconsideration amendments to 40 CFR part 60, subpart OOOOa (EPA-HQ-
OAR-2017-0483; FRL-10013-60-OAR; FR Doc. 2020-18115). These
technical amendments were proposed in October 2018. 83 FR 52056.
Please reference that final rule for the summary and rationale of
those technical changes. Please refer to the RIA for both rules to
see the combined impacts.
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B. What are the energy impacts?
Energy impacts in this section are those energy requirements
associated with the operation of emissions control devices. Potential
impacts on the national energy economy from the rule are discussed in
the economic impacts section. Under the final rule, there will likely
be little change in the national energy demand resulting from the
deregulatory actions finalized here.
C. What are the compliance costs?
The PV of the regulatory compliance cost reduction associated with
this final rule over the 2021 to 2030 period was estimated to be $67
million (in 2016 dollars) using a 7-percent discount rate and $83
million using a 3-percent discount rate. The EAV of these cost
reductions is estimated to be $8.9 million per year using a 7-percent
discount rate and $9.4 million per year using a 3-percent discount
rate.
These estimates do not, however, include the forgone producer
revenues associated with the decrease in the recovery of saleable
natural gas, though some of the compliance actions required in the
baseline would likely have captured saleable product that would have
otherwise been emitted to the atmosphere. Estimates of the value of the
recovered product were included in previous regulatory analyses as
offsetting compliance costs. Because of the deregulatory nature of this
final action, the EPA projected a reduction in the recovery of saleable
product. Using the 2020 Annual Energy Outlook (AEO) projection of
natural gas prices to estimate the value of the change in the recovered
gas at the wellhead projected to result from the final action, the EPA
estimated a PV of regulatory compliance cost reductions of the final
rule over the 2021 to 2030 period of $31 million using a 7-percent
discount rate and $38 million using a 3-percent discount rate. The
corresponding estimates of the EAV of cost reductions after accounting
for the forgone revenues were $4.1 million per year using a 7-percent
discount rate and $4.3 million per year using a 3-percent discount
rate.
D. What are the economic and employment impacts?
The EPA used the National Energy Modeling System (NEMS) to estimate
the impacts of the 2016 Rule on the U.S. energy system. The NEMS is a
publicly available model of the U.S. energy economy developed and
maintained by the EIA and is used to produce the AEO, a reference
publication that provides detailed projections of the U.S. energy
economy.\77\ The EPA estimated small impacts on crude oil and natural
gas markets of the 2016 Rule over the 2020 to 2025 period. This final
rule will result in a decrease in total compliance costs relative to
the baseline. Therefore, the EPA expects that this rule will partially
reduce the impacts estimated for the 2016 Rule in the 2016 Rule RIA.
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\77\ https://www.eia.gov/outlooks/aeo/.
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Executive Order 13563 directs Federal agencies to consider the
effect of regulations on job creation and employment. According to the
Executive order, ``our regulatory system must protect public health,
welfare, safety, and our environment while promoting economic growth,
innovation, competitiveness, and job creation. It must be based on the
best available science.'' (Executive Order 13563, 2011). While a
standalone analysis of employment impacts is not included in a standard
benefit-cost analysis, such an analysis is of concern in the current
economic climate given continued interest in the employment impact of
regulations such as this proposed rule. The EPA estimated the change in
compliance-related labor due to the reduced requirements for the
installation, operation, and maintenance of control equipment, control
activities, and labor associated with reporting and recordkeeping
requirements in the 2016
[[Page 57066]]
Rule RIA. Under the final rule, the EPA expects there will be slight
reductions in the labor required for compliance-related activities
associated with the 2016 Rule requirements relating to the rescission
of requirements in the transmission and storage segment of the oil and
natural gas industry.
E. What are the benefits of the final standards?
The EPA expects forgone climate and health benefits due to the
forgone emissions reductions projected under this final rule. The EPA
estimated the forgone domestic climate benefits from the forgone
methane emissions reductions using an interim measure of the domestic
social cost of methane (SC-CH4). The SC-CH4
estimates used here were developed under Executive Order 13783 for use
in regulatory analyses until an improved estimate of the impacts of
climate change to the U.S. can be developed based on the best available
science and economics. Executive Order 13783 directed agencies to
ensure that estimates of the social cost of GHG used in regulatory
analyses ``are based on the best available science and economics'' and
are consistent with the guidance contained in OMB Circular A-4,
``including with respect to the consideration of domestic versus
international impacts and the consideration of appropriate discount
rates'' (Executive Order 13783, Section 5(c)). In addition, Executive
Order 13783 withdrew the technical support documents (TSDs) and the
August 2016 Addendum to these TSDs describing the global social cost of
GHG estimates developed under the prior Administration as no longer
representative of government policy. The withdrawn TSDs and Addendum
were developed by an interagency working group that included the EPA
and other executive branch entities and were used in the 2016 Rule RIA.
The EPA estimated the PV of the forgone domestic climate benefits
over the 2021 to 2030 period to be $17 million under a 7-percent
discount rate and $63 million under a 3-percent discount rate. The EAV
of these forgone benefits is estimated $2.2 million per year under a 7-
percent discount rate and $7.2 million per year under a 3-percent
discount rate. These values represent only a partial accounting of
domestic climate impacts from methane emissions and do not account for
health effects of ozone exposure from the increase in methane
emissions.
Under the final rule, the EPA expects that forgone VOC emission
reductions will degrade air quality and are likely to adversely affect
health and welfare associated with exposure to ozone, PM2.5,
and HAP, but did not quantify these effects at this time. This omission
should not imply that these forgone benefits may not exist; rather, it
reflects the inherent difficulties in accurately modeling the direct
and indirect impacts of the projected reductions in emissions for this
industrial sector. To the extent that the EPA were to quantify these
ozone and PM impacts, it would estimate the number and value of avoided
premature deaths and illnesses using an approach detailed in the
Particulate Matter NAAQS and Ozone NAAQS Regulatory Impact
Analyses.78 79 This approach relies on full-form air quality
modeling. The Agency is committed to assessing ways of conducting full-
form air quality modeling for the oil and natural gas sector that would
be suitable for use in regulatory analysis in the context of NSPS,
including ways to address the uncertainties regarding the scope and
magnitude of VOC emissions.
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\78\ U.S. EPA. December 2012. Regulatory Impact Analysis for the
Final Revisions to the National Ambient Air Quality Standards for
Particulate Matter. EPA-452/R-12-005. Office of Air Quality Planning
and Standards, Health and Environmental Impacts Division. https://www3.epa.gov/ttnecas1/regdata/RIAs/finalria.pdf. Accessed January 9,
2020.
\79\ U.S. EPA. September 2015. Regulatory Impact Analysis of the
Final Revisions to the National Ambient Air Quality Standards for
Ground-Level Ozone. EPA-452/R-15-007. Office of Air Quality Planning
and Standards, Health and Environmental Impacts Division. https://www3.epa.gov/ttnecas1/docs/20151001ria.pdf. Accessed January 9,
2020.
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When quantifying the incidence and economic value of the human
health impacts of air quality changes, the Agency sometimes relies upon
alternative approaches to using full-form air quality modeling, called
reduced-form techniques, often reported as ``benefit-per-ton'' values
that relate air pollution impacts to changes in air pollutant precursor
emissions.\80\ A small, but growing, literature characterizes the air
quality and health impacts from the oil and natural gas
sector.81 82 83 The Agency feels more work needs to be done
to vet the analysis and methodologies for all potential approaches for
valuing the health effects of VOC emissions before they are used in
regulatory analysis, but is committed to continuing this work.
Recently, the EPA systematically compared the changes in benefits, and
concentrations where available, from its benefit-per-ton technique and
other reduced-form techniques against the changes in benefits and
concentrations derived from full-form photochemical model
representation of a few different specific emissions scenarios.\84\ The
Agency's goal was to create a methodology by which investigators could
better understand the suitability of alternative reduced-form air
quality modeling techniques for estimating the health impacts of
criteria pollutant emissions changes in the EPA's benefit-cost
analysis, including the extent to which reduced form models may over-
or under-estimate benefits (compared to full-scale modeling) under
different scenarios and air quality concentrations. The EPA Science
Advisory Board (SAB) recently convened a panel to review this
report.\85\ In particular, the SAB will assess the techniques the
Agency used to appraise these tools; the Agency's approach for
depicting the results of reduced-form tools; and, steps the Agency
might take for improving the reliability of reduced-form techniques for
use in future Regulatory Impact Analyses RIAs. The scenario-specific
emission inputs developed for this project are currently available
online.\86\ A thorough description of the study design and methodology
is also available.\87\
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\80\ U.S. EPA. February 2018. Technical Support Document:
Estimating the Benefit per Ton of Reducing PM2.5
Precursors from 17 Sectors. https://www.epa.gov/sites/production/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf. Accessed
January 9, 2020.
\81\ Fann, N., K.R. Baker, E.A.W. Chan, A. Eyth, A. Macpherson,
E. Miller, and J. Snyder. 2018. ``Assessing Human Health
PM2.5 and Ozone Impacts from U.S. Oil and Natural Gas
Sector Emissions in 2025.'' Environmental Science and Technology
52(15):8095-8103.
\82\ Litovitz, A., A. Curtright, S. Abramzon, N. Burger, and C.
Samaras. 2013. ``Estimation of Regional Air-Quality Damages from
Marcellus Shale Natural Gas Extraction in Pennsylvania.''
Environmental Research Letters 8(1), 014017.
\83\ Loomis, J. and M. Haefele. 2017. ``Quantifying Market and
Non-market Benefits and Costs of Hydraulic Fracturing in the United
States: A Summary of the Literature.'' Ecological Economics 138:160-
167.
\84\ This analysis compared the benefits estimated using full-
form photochemical air quality modeling simulations (CMAQ and CAMx)
against four reduced-form tools, including: InMAP; AP2/3; EASIUR;
and EPA's benefit-per-ton.
\85\ 85 FR 23823 (April 29, 2020).
\86\ The scenario-specific emission inputs developed for this
project and all associated documentation are currently available
online at https://github.com/epa-kpc/RFMEVAL.
\87\ Baker, K.R., M. Amend, S. Penn, J. Bankert, H. Simon, E.
Chan, N. Fann, M. Zawacki, K. Davidson, K. and H. Roman. 2020. ``A
Database for Evaluating the InMAP, APEEP, and EASIUR Reduced
Complexity Air-Quality Modeling Tools.'' Data in Brief 28: 104886.
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XII. Statutory and Executive Order Reviews
Additional information about these statutes and Executive orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
[[Page 57067]]
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review because it
raises novel legal or policy issues. Any changes made in response to
OMB recommendations have been documented in the docket. In addition,
the EPA prepared an RIA of the potential costs and benefits associated
with this final action. The RIA available in the docket describes in
detail the empirical basis for the EPA's assumptions and characterizes
the various sources of uncertainties affecting the estimates below.
Table 8 shows the PV and EAV of the costs, benefits, and net benefits
of the final rule for the 2021 to 2030 period relative to the baseline
using discount rates of 7 and 3 percent, respectively. The table also
shows the total forgone emission reductions projected from 2021 to 2030
relative to the baseline.
In the following table, we refer to the compliance cost reductions
as the ``benefits'' and the forgone benefits as the ``costs'' of this
final action. The net benefits are the benefits (total cost reductions)
minus the costs (forgone domestic climate benefits).
Table 8--Summary of the PV and EAV of the Monetized Forgone Benefits, Cost Reductions, and Net Benefits From
2021 to 2030, 7- and 3-Percent Discount Rates
[Millions of 2016$]
----------------------------------------------------------------------------------------------------------------
7-Percent discount rate 3-Percent discount rate
---------------------------------------------------------------
PV EAV PV EAV
----------------------------------------------------------------------------------------------------------------
Benefits (Total Cost Reductions)................ $31 $4.1 $38 $4.3
Compliance Cost Reductions...................... 67 8.9 83 9.4
Forgone Value of Product Recovery............... 36 4.7 45 5.1
Costs (Forgone Domestic Climate Benefits)....... 17 2.2 63 7.2
Net Benefits.................................... 14 1.9 -25 -2.9
---------------------------------------------------------------
Non-Monetized Forgone Benefits.................. Non-monetized climate impacts from increases in methane
emissions.
Health effects of PM2.5 and ozone exposure from an increase of
about 11,000 short tons of VOC from 2021 through 2030.
Health effects of HAP exposure from an increase of about 330
short tons of HAP from 2021 through 2030.
Health effects of ozone exposure from an increase of about
400,000 short tons of methane from 2021 through 2030.
Visibility impairment.
Vegetation effects.
----------------------------------------------------------------------------------------------------------------
Note: Estimates may not sum due to independent rounding.
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
This action is considered an Executive Order 13771 deregulatory
action. Details on the estimated cost savings of this final rule can be
found in the EPA's analysis of the potential costs and benefits
associated with this action.
C. Paperwork Reduction Act (PRA)
The information collection activities in this final rule have been
submitted for approval to OMB under the PRA. The ICR document that the
EPA prepared has been assigned EPA ICR number 2604.02 and OMB Control
Number 2060-0729. The information collection requirements are not
enforceable until OMB approves them.
A summary of the information collection activities previously
submitted to the OMB for the final action titled ``Standards of
Performance for Crude Oil and Natural Gas Facilities for Construction,
Modification, or Reconstruction'' (2016 Rule) under the PRA, and
assigned OMB Control Number 2060-0721 (EPA ICR number 2523.02), can be
found at 81 FR 35890. You can find a copy of the ICR in the 2016 Rule
Docket (Docket ID Item No. EPA-HQ-OAR-2010-0505-7626). In this rule,
the EPA is finalizing the information collection activities as a result
of the EPA's review under Executive Order 13783 (EPA ICR number
2604.02). These final changes (2020 NSPS Subpart OOOOa Executive Order
13783 Review Final) would remove reporting and recordkeeping
requirements associated with the rescinded requirements.\88\
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\88\ In a separate action, the EPA is finalizing technical
reconsideration amendments to NSPS subpart OOOOa (EPA-HQ-OAR-2017-
0483; FRL-10013-60-OAR; FR Doc. 2020-18115). These technical
amendments where proposed in October 2018. 83 FR 52056. The
information collection burden for the combination of these NSPS
subpart OOOOa Reconsideration final amendments and the Policy Review
final amendments is addressed in a separate ICR (OMB Control Number
2060-0721; EPA ICR number 2523.04).
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Comments were received on the October 15, 2018 (83 FR 52056)
proposed rule indicating that the recordkeeping and reporting burden
for the 2016 Rule was significantly underestimated. In particular, the
commenters pointed to the estimated burden associated with the fugitive
emissions requirements. As a result of these comments, the EPA
reexamined the analysis for the 2016 Rule recordkeeping and reporting
burden and made adjustments where warranted. This resulted in an
updated and more accurate assessment of the recordkeeping and reporting
burden for the 2016 Rule. The updated 2016 Rule recordkeeping and
reporting burden was estimated at a 3-year annual average of 689,154
hours and $110,336,343 (2016$) over the 3-year period. These figures
represent the ``baseline'' from which changes made in these final
amendments (2020 NSPS Subpart OOOOa Executive Order 13783 Review Final)
can be compared. Burden associated with this rule (2020 Rule E.O. 13783
Review Final):
Respondents/affected entities: Oil and natural gas operators and
owners.
Respondent's obligation to respond: Mandatory.
Estimated number of respondents: 519.
[[Page 57068]]
Frequency of response: Varies depending on affected facility.\89\
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\89\ The specific frequency for each information collection
activity within this request is shown in Tables 1a through 1d of the
Supporting Statement in the public docket.
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Total estimated burden: 680,841 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
Total estimated cost: $108,723,359 (2016$), which includes no
capital or O&M costs.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for the
EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB
approves this ICR, the Agency will announce that approval in the
Federal Register and publish a technical amendment to 40 CFR part 9 to
display the OMB control number for the approved information collection
activities contained in this final rule.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden, or otherwise has a positive economic effect on the small
entities subject to the rule. This is a deregulatory action, and the
burden on all entities affected by this final rule, including small
entities, is the same or reduced compared to the 2016 Rule. See the
discussion in section XI of this preamble and the RIA for details. The
EPA has, therefore, concluded that this action will have no net
increase regulatory burden for all directly regulated small entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any state,
local, or tribal governments or the private sector.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the National Government and the states, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. It will not have substantial direct effects on
tribal governments, on the relationship between the Federal Government
and Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes, as specified in
Executive Order 13175. Thus, Executive Order 13175 does not apply to
this action.
Consistent with the EPA Policy on Consultation and Coordination
with Indian Tribes, on September 10, 2019, the EPA sent a letter to all
tribal governments inviting consultation. Additionally, on August 29,
2019, and September 18, 2019, the EPA provided an overview of the
proposed rule to the National Tribal Air Association. The EPA did not
receive any requests for consultation.
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
This action is not subject to Executive Order 13045 because it is
not economically significant as defined in Executive Order 12866. The
2016 Rule, as discussed in the RIA,\90\ was anticipated to reduce
emissions of methane, VOC, and HAP, and some of the benefits of
reducing these pollutants would have accrued to children. The final
rule is expected to decrease the impact of the emissions reductions
estimated from the 2016 Rule on these benefits, as discussed in the
RIA.
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\90\ See Final RIA in the public docket for this rulemaking.
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The final action does not affect the level of public health and
environmental protection already being provided by existing NAAQS and
other mechanisms in the CAA. This final action does not affect
applicable local, state, or Federal permitting or air quality
management programs that will continue to address areas with degraded
air quality and maintain the air quality in areas meeting current
standards. Areas that need to reduce criteria air pollution to meet the
NAAQS will still need to rely on control strategies to reduce
emissions. The EPA does not believe the decrease in emission reductions
projected by the final rule will have a disproportionate adverse effect
on children's health.
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. In the RIA accompanying the 2016 Rule,
the EPA used the NEMS to estimate the impacts of the 2016 Rule on the
United States energy system. The EPA estimated small impacts of that
rule over the 2020 to 2025 period relative to the baseline for that
rule. This final rule is estimated to result in a decrease in total
compliance costs, with the reduction in costs affecting a subset of the
affected entities under NSPS subpart OOOOa. Therefore, the EPA expects
that this deregulatory action will reduce the impacts estimated for the
final NSPS in the 2016 RIA and, as such, is not a significant energy
action.
J. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
The EPA believes that this final action is unlikely to have
disproportionately high and adverse human health or environmental
effects on minority populations, low-income populations, and/or
indigenous peoples, as specified in Executive Order 12898 (59 FR 7629,
February 16, 1994). The 2016 Rule was anticipated to reduce emissions
of methane, VOC, and HAP, and some of the benefits of reducing these
pollutants would have accrued to minority populations, low-income
populations, and/or indigenous peoples. The final rule is expected to
decrease the impact of the emission reductions estimated from the 2016
Rule on these benefits. These communities may experience forgone
benefits as a result of this action, as discussed in the RIA.
This final action does not affect the level of public health and
environmental protection already being provided by existing NAAQS and
other mechanisms in the CAA. This final action does not affect
applicable local, state, or Federal permitting or air quality
management programs that will continue to address areas with degraded
air quality and maintain the air quality in areas meeting current
standards. Areas that need to reduce criteria air pollution to meet the
NAAQS will still
[[Page 57069]]
need to rely on control strategies to reduce emissions.
The EPA believes that this final action is unlikely to have
disproportionately high and adverse human health or environmental
effects on minority populations, low-income populations, and/or
indigenous peoples. The EPA notes that the potential impacts of the
final rule are not expected to be experienced uniformly, and the
distribution of avoided compliance costs associated with this action
depends on the degree to which costs would have been passed through to
consumers.
L. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).
List of Subjects in 40 CFR Part 60
Environmental protection, Administrative practice and procedure,
Air pollution control, Reporting and recordkeeping requirements.
Andrew Wheeler,
Administrator.
For the reasons set forth in the preamble, the EPA amends 40 CFR
part 60 as follows:
PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES
0
1. The authority citation for part 60 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
0
2. Revise the heading of subpart OOOO to read as follows:
Subpart OOOO--Standards of Performance for Crude Oil and Natural
Gas Facilities for Which Construction, Modification, or
Reconstruction Commenced After August 23, 2011, and on or Before
September 18, 2015
0
3. Section 60.5360 is amended to read as follows:
Sec. 60.5360 What is the purpose of this subpart?
This subpart establishes emission standards and compliance
schedules for the control of volatile organic compounds (VOC) and
sulfur dioxide (SO2) emissions from affected facilities in
the crude oil and natural gas production source category that commence
construction, modification, or reconstruction after August 23, 2011,
and on or before September 18, 2015.
0
4. Section 60.5365 is amended by revising the introductory text and
paragraphs (b), (c), and (d)(1), removing and reserving paragraph
(d)(2), and revising paragraph (e) introductory text to read as
follows:
Sec. 60.5365 Am I subject to this subpart?
You are subject to the applicable provisions of this subpart if you
are the owner or operator of one or more of the onshore affected
facilities listed in paragraphs (a) through (g) of this section that is
located within the Crude Oil and Natural Gas Production source
category, as defined in Sec. 60.5430 for which you commence
construction, modification, or reconstruction after August 23, 2011,
and on or before September 18, 2015.
* * * * *
(b) Each centrifugal compressor affected facility, which is a
single centrifugal compressor using wet seals. A centrifugal compressor
located at a well site, or an adjacent well site and servicing more
than one well site, is not an affected facility under this subpart.
(c) Each reciprocating compressor affected facility, which is a
single reciprocating compressor. A reciprocating compressor located at
a well site, or an adjacent well site and servicing more than one well
site, is not an affected facility under this subpart.
(d)(1) For the oil and natural gas production segment, each
pneumatic controller affected facility, which is a single continuous
bleed natural gas-driven pneumatic controller operating at a natural
gas bleed rate greater than 6 standard cubic feet per hour.
* * * * *
(e) Each storage vessel affected facility, which is a single
storage vessel, and has the potential for VOC emissions equal to or
greater than 6 tons per year (tpy) as determined according to this
section by October 15, 2013, for Group 1 storage vessels and by April
15, 2014, or 30 days after startup (whichever is later) for Group 2
storage vessels, except as provided in paragraphs (e)(1) through (4) of
this section. The potential for VOC emissions must be calculated using
a generally accepted model or calculation methodology, based on the
maximum average daily throughput determined for a 30-day period of
production prior to the applicable emission determination deadline
specified in this section. The determination may take into account
requirements under a legally and practically enforceable limit in an
operating permit or other requirement established under a Federal,
State, local or tribal authority.
* * * * *
0
5. Section 60.5420 is amended by revising paragraph (c)(5)(iv) to read
as follows:
Sec. 60.5420 What are my notification, reporting, and recordkeeping
requirements?
* * * * *
(c) * * *
(5) * * *
(iv) For storage vessels that are skid-mounted or permanently
attached to something that is mobile (such as trucks, railcars, barges,
or ships), records indicating the number of consecutive days that the
vessel is located at the site. If a storage vessel is removed from the
site and, within 30 days, is either returned to or replaced by another
storage vessel at the site to serve the same or similar function, then
the entire period since the original storage vessel was first located
at the site, including the days when the storage vessel was removed,
will be added to the count towards the number of consecutive days.
* * * * *
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6. Section 60.5430 is amended by:
0
a. Adding the definition for Crude Oil and Natural Gas Production
source category in alphabetical order.
0
b. Revising the definition of Custody transfer.
0
c. Adding the definitions for Local distribution company (LDC) custody
transfer station and Natural gas transmission and storage segment in
alphabetical order.
The additions and revision read as follows:
Sec. 60.5430 What definitions apply to this subpart?
* * * * *
Crude Oil and Natural Gas Production source category means:
(1) Crude oil production, which includes the well and extends to
the point of custody transfer to the crude oil transmission pipeline or
any other forms of transportation; and
(2) Natural gas production and processing, which includes the well
and extends to, but does not include, the point of custody transfer to
the natural gas transmission and storage segment.
Custody transfer means the transfer of crude oil or natural gas
after processing and/or treatment in the producing operations, or from
storage vessels or automatic transfer facilities or other such
equipment, including product loading racks, to pipelines or any other
forms of transportation.
* * * * *
Local distribution company (LDC) custody transfer station means a
metering station where the LDC receives
[[Page 57070]]
a natural gas supply from an upstream supplier, which may be an
interstate transmission pipeline or a local natural gas producer, for
delivery to customers through the LDC's intrastate transmission or
distribution lines.
* * * * *
Natural gas transmission and storage segment means the transport or
storage of natural gas prior to delivery to a ``local distribution
company custody transfer station'' (as defined in this section) or to a
final end user (if there is no local distribution company custody
transfer station). For the purposes of this subpart, natural gas enters
the natural gas transmission and storage segment after the natural gas
processing plant, when present. If no natural gas processing plant is
present, natural gas enters the natural gas transmission and storage
segment after the point of ``custody transfer'' (as defined in this
section). A compressor station that transports natural gas prior to the
point of ``custody transfer'' or to a natural gas processing plant (if
present) is not considered a part of the natural gas transmission and
storage segment.
* * * * *
Subpart OOOOa--Standards of Performance for Crude Oil and Natural
Gas Facilities for Which Construction, Modification, or
Reconstruction Commenced After September 18, 2015
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7. Section 60.5360a is revised to read as follows:
Sec. 60.5360a What is the purpose of this subpart?
(a) This subpart establishes emission standards and compliance
schedules for the control of volatile organic compounds (VOC) and
sulfur dioxide (SO2) emissions from affected facilities in
the Crude Oil and Natural Gas Production source category that commence
construction, modification, or reconstruction after September 18, 2015.
The effective date of the rule in this subpart is August 2, 2016.
(b) [Reserved]
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8. Section 60.5365a is amended by revising the introductory text to
read as follows:
Sec. 60.5365a Am I subject to this subpart?
You are subject to the applicable provisions of this subpart if you
are the owner or operator of one or more of the onshore affected
facilities listed in paragraphs (a) through (j) of this section, that
is located within the Crude Oil and Natural Gas Production source
category, as defined in Sec. 60.5430a, for which you commence
construction, modification, or reconstruction after September 18, 2015.
* * * * *
0
9. Section 60.5375a is amended by revising the section heading and
introductory text to read as follows:
Sec. 60.5375a What VOC standards apply to well affected facilities?
If you are the owner or operator of a well affected facility as
described in Sec. 60.5365a(a) that also meets the criteria for a well
affected facility in Sec. 60.5365(a) (in subpart OOOO of this part),
you must reduce VOC emissions by complying with paragraphs (a) through
(g) of this section. If you own or operate a well affected facility as
described in Sec. 60.5365a(a) that does not meet the criteria for a
well affected facility in Sec. 60.5365(a) (in subpart OOOO of this
part), you must reduce VOC emissions by complying with paragraphs
(f)(3) and (4) or paragraph (g) of this section for each well
completion operation with hydraulic fracturing prior to November 30,
2016, and you must comply with paragraphs (a) through (g) of this
section for each well completion operation with hydraulic fracturing on
or after November 30, 2016.
* * * * *
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10. Section 60.5380a is amended by revising the section heading,
introductory text, and paragraph (a)(1) to read as follows:
Sec. 60.5380a What VOC standards apply to centrifugal compressor
affected facilities?
You must comply with the VOC standards in paragraphs (a) through
(d) of this section for each centrifugal compressor affected facility.
(a)(1) You must reduce VOC emissions from each centrifugal
compressor wet seal fluid degassing system by 95.0 percent.
* * * * *
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11. Section 60.5385a is amended by revising the section heading,
introductory text, and paragraph (a)(3) to read as follows:
Sec. 60.5385a What VOC standards apply to reciprocating compressor
affected facilities?
You must reduce VOC emissions by complying with the standards in
paragraphs (a) through (d) of this section for each reciprocating
compressor affected facility.
(a) * * *
(3) Collect the VOC emissions from the rod packing using a rod
packing emissions collection system that operates under negative
pressure and route the rod packing emissions to a process through a
closed vent system that meets the requirements of Sec. 60.5411a(a) and
(d).
* * * * *
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12. Section 60.5390a is amended by revising the section heading and
introductory text to read as follows:
Sec. 60.5390a What VOC standards apply to pneumatic controller
affected facilities?
For each pneumatic controller affected facility you must comply
with the VOC standards, based on natural gas as a surrogate for VOC, in
either paragraph (b)(1) or (c)(1) of this section, as applicable.
Pneumatic controllers meeting the conditions in paragraph (a) of this
section are exempt from the requirements in paragraph (b)(1) or (c)(1)
of this section.
* * * * *
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13. Section 60.5393a is amended by revising the section heading and
introductory text to read as follows:
Sec. 60.5393a What VOC standards apply to pneumatic pump affected
facilities?
For each pneumatic pump affected facility you must comply with the
VOC standards, based on natural gas as a surrogate for VOC, in either
paragraph (a) or (b) of this section, as applicable, on or after
November 30, 2016.
* * * * *
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14. Section 60.5397a is amended by revising the section heading and
introductory text to read as follows:
Sec. 60.5397a What fugitive emissions VOC standards apply to the
affected facility which is the collection of fugitive emissions
components at a well site and the affected facility which is the
collection of fugitive emissions components at a compressor station?
For each affected facility under Sec. 60.5365a(i) and (j), you
must reduce VOC emissions by complying with the requirements of
paragraphs (a) through (j) of this section. The requirements in this
section are independent of the closed vent system and cover
requirements in Sec. 60.5411a.
* * * * *
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15. Section 60.5398a is amended by revising the section heading and
paragraphs (a) and (d)(1)(xi) to read as follows:
Sec. 60.5398a What are the alternative means of emission limitations
for VOC from well completions, reciprocating compressors, the
collection of fugitive emissions components at a well site and the
collection of fugitive emissions components at a compressor station?
(a) If, in the Administrator's judgment, an alternative means of
emission limitation will achieve a
[[Page 57071]]
reduction in VOC emissions at least equivalent to the reduction in VOC
emissions achieved under Sec. Sec. 60.5375a, 60.5385a, and 60.5397a,
the Administrator will publish, in the Federal Register, a notice
permitting the use of that alternative means for the purpose of
compliance with Sec. Sec. 60.5375a, 60.5385a, and 60.5397a. The notice
may condition permission on requirements related to the operation and
maintenance of the alternative means.
* * * * *
(d) * * *
(1) * * *
(xi) Operation and maintenance procedures and other provisions
necessary to ensure reduction in VOC emissions at least equivalent to
the reduction in VOC emissions achieved under Sec. 60.5397a.
* * * * *
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16. Section 60.5400a is amended by revising the section heading and
paragraph (c) to read as follows:
Sec. 60.5400a What equipment leak VOC standards apply to affected
facilities at an onshore natural gas processing plant?
* * * * *
(c) You may apply to the Administrator for permission to use an
alternative means of emission limitation that achieves a reduction in
emissions of VOC at least equivalent to that achieved by the controls
required in this subpart according to the requirements of Sec.
60.5402a.
* * * * *
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17. Section 60.5401a is amended by revising the section heading to read
as follows:
Sec. 60.5401a What are the exceptions to the equipment leak VOC
standards for affected facilities at onshore natural gas processing
plants?
* * * * *
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18. Section 60.5402a is amended by revising the section heading and
paragraphs (a) and (d)(2) introductory text to read as follows:
Sec. 60.5402a What are the alternative means of emission limitations
for VOC equipment leaks from onshore natural gas processing plants?
(a) If, in the Administrator's judgment, an alternative means of
emission limitation will achieve a reduction in VOC emissions at least
equivalent to the reduction in VOC emissions achieved under any design,
equipment, work practice or operational standard, the Administrator
will publish, in the Federal Register, a notice permitting the use of
that alternative means for the purpose of compliance with that
standard. The notice may condition permission on requirements related
to the operation and maintenance of the alternative means.
* * * * *
(d) * * *
(2) The application must include operation, maintenance, and other
provisions necessary to assure reduction in VOC emissions at least
equivalent to the reduction in VOC emissions achieved under the design,
equipment, work practice or operational standard in paragraph (a) of
this section by including the information specified in paragraphs
(d)(2)(i) through (x) of this section.
* * * * *
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19. Section 60.5410a is amended by revising paragraphs (a) introductory
text, (b)(1), (d) introductory text, and (f) to read as follows:
Sec. 60.5410a How do I demonstrate initial compliance with the
standards for my well, centrifugal compressor, reciprocating
compressor, pneumatic controller, pneumatic pump, storage vessel,
collection of fugitive emissions components at a well site, collection
of fugitive emissions components at a compressor station, and equipment
leaks and sweetening unit affected facilities at onshore natural gas
processing plants?
* * * * *
(a) To achieve initial compliance with the VOC standards for each
well completion operation conducted at your well affected facility you
must comply with paragraphs (a)(1) through (4) of this section.
* * * * *
(b)(1) To achieve initial compliance with standards for your
centrifugal compressor affected facility you must reduce VOC emissions
from each centrifugal compressor wet seal fluid degassing system by
95.0 percent or greater as required by Sec. 60.5380a(a) and as
demonstrated by the requirements of Sec. 60.5413a.
* * * * *
(d) To achieve initial compliance with VOC emission standards for
your pneumatic controller affected facility you must comply with the
requirements specified in paragraphs (d)(1) through (6) of this
section, as applicable.
* * * * *
(f) For affected facilities at onshore natural gas processing
plants, initial compliance with the VOC standards is demonstrated if
you are in compliance with the requirements of Sec. 60.5400a.
* * * * *
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20. Section 60.5412a is amended by paragraphs (a)(1)(i) and (a)(2) to
read as follows:
Sec. 60.5412a What additional requirements must I meet for
determining initial compliance with control devices used to comply with
the emission standards for my centrifugal compressor, and storage
vessel affected facilities?
* * * * *
(a) * * *
(1) * * *
(i) You must reduce the mass content of VOC in the gases vented to
the device by 95.0 percent by weight or greater as determined in
accordance with the requirements of Sec. 60.5413a(b), with the
exceptions noted in Sec. 60.5413a(a).
* * * * *
(2) Each vapor recovery device (e.g., carbon adsorption system or
condenser) or other non-destructive control device must be designed and
operated to reduce the mass content of VOC in the gases vented to the
device by 95.0 percent by weight or greater as determined in accordance
with the requirements of Sec. 60.5413a(b). As an alternative to the
performance testing requirements in Sec. 60.5413a(b), you may
demonstrate initial compliance by conducting a design analysis for
vapor recovery devices according to the requirements of Sec.
60.5413a(c).
* * * * *
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21. Section 60.5413a is amended by revising paragraph (d)(11)(iii) to
read as follows:
Sec. 60.5413a What are the performance testing procedures for control
devices used to demonstrate compliance at my centrifugal compressor and
storage vessel affected facilities?
* * * * *
(d) * * *
(11) * * *
(iii) A manufacturer must demonstrate a destruction efficiency of
at least 95 percent for THC, as propane. A control device model that
demonstrates a destruction efficiency of 95 percent for THC, as
propane, will meet the control requirement for 95-percent destruction
of VOC (if applicable) required under this subpart.
* * * * *
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22. Section 60.5415a is amended by revising paragraphs (b)(1) and (f)
to read as follows:
Sec. 60.5415a How do I demonstrate continuous compliance with the
standards for my well, centrifugal compressor, reciprocating
compressor, pneumatic controller, pneumatic pump, storage vessel,
collection of fugitive emissions components at a well site, and
collection of fugitive emissions components at a compressor station
affected facilities, and affected facilities at onshore natural gas
processing plants?
* * * * *
[[Page 57072]]
(b) * * *
(1) You must reduce VOC emissions from the wet seal fluid degassing
system by 95.0 percent or greater.
* * * * *
(f) For affected facilities at onshore natural gas processing
plants, continuous compliance with VOC requirements is demonstrated if
you are in compliance with the requirements of Sec. 60.5400a.
* * * * *
0
23. Section 60.5420a is amended by revising paragraph (c)(5)(iv) to
read as follows:
Sec. 60.5420a What are my notification, reporting, and recordkeeping
requirements?
* * * * *
(c) * * *
(5) * * *
(iv) For storage vessels that are skid-mounted or permanently
attached to something that is mobile (such as trucks, railcars, barges,
or ships), records indicating the number of consecutive days that the
vessel is located at a site in the Crude Oil and Natural Gas source
category. If a storage vessel is removed from a site and, within 30
days, is either returned to the site or replaced by another storage
vessel at the site to serve the same or similar function, then the
entire period since the original storage vessel was first located at
the site, including the days when the storage vessel was removed, will
be added to the count towards the number of consecutive days.
* * * * *
0
24. Section 60.5421a is amended by revising the section heading to read
as follows:
Sec. 60.5421a What are my additional recordkeeping requirements for
my affected facility subject to VOC requirements for onshore natural
gas processing plants?
* * * * *
0
25. Section 60.5422a is amended by revising the section heading to read
as follows:
Sec. 60.5422a What are my additional reporting requirements for my
affected facility subject to VOC requirements for onshore natural gas
processing plants?
* * * * *
0
26. Section 60.5430a is amended by:
0
a. Revising the definition for Compressor station.
0
b. Removing the definition for Crude oil and natural gas source
category.
0
c. Adding the definition for Crude Oil and Natural Gas Production
source category in alphabetical order.
0
d. Revising the definitions for Equipment and Fugitive emissions
component.
0
e. Adding the definition for Natural gas transmission and storage
segment in alphabetical order.
The revisions and additions read as follows:
Sec. 60.5430a What definitions apply to this subpart?
* * * * *
Compressor station means any permanent combination of one or more
compressors that move natural gas at increased pressure through
gathering pipelines. This includes, but is not limited to, gathering
and boosting stations. The combination of one or more compressors
located at a well site, or located at an onshore natural gas processing
plant, is not a compressor station for purposes of Sec. 60.5397a.
* * * * *
Crude Oil and Natural Gas Production source category means:
(1) Crude oil production, which includes the well and extends to
the point of custody transfer to the crude oil transmission pipeline or
any other forms of transportation; and
(2) Natural gas production and processing, which includes the well
and extends to, but does not include, the point of custody transfer to
the natural gas transmission and storage segment.
* * * * *
Equipment, as used in the standards and requirements in this
subpart relative to the equipment leaks of VOC from onshore natural gas
processing plants, means each pump, pressure relief device, open-ended
valve or line, valve, and flange or other connector that is in VOC
service or in wet gas service, and any device or system required by
those same standards and requirements in this subpart.
* * * * *
Fugitive emissions component means any component that has the
potential to emit fugitive emissions of VOC at a well site or
compressor station, including valves, connectors, pressure relief
devices, open-ended lines, flanges, covers, and closed vent systems not
subject to Sec. 60.5411 or Sec. 60.5411a, thief hatches or other
openings on a controlled storage vessel not subject to Sec. 60.5395 or
Sec. 60.5395a, compressors, instruments, and meters. Devices that vent
as part of normal operations, such as natural gas-driven pneumatic
controllers or natural gas-driven pumps, are not fugitive emissions
components, insofar as the natural gas discharged from the device's
vent is not considered a fugitive emission. Emissions originating from
other than the device's vent, such as the thief hatch on a controlled
storage vessel, would be considered fugitive emissions.
* * * * *
Natural gas transmission and storage segment means the transport or
storage of natural gas prior to delivery to a ``local distribution
company custody transfer station'' (as defined in this section) or to a
final end user (if there is no local distribution company custody
transfer station). For the purposes of this subpart, natural gas enters
the natural gas transmission and storage segment after the natural gas
processing plant, when present. If no natural gas processing plant is
present, natural gas enters the natural gas transmission and storage
segment after the point of ``custody transfer'' (as defined in this
section). A compressor station that transports natural gas prior to the
point of ``custody transfer'' or to a natural gas processing plant (if
present) is not considered a part of the natural gas transmission and
storage segment.
* * * * *
[FR Doc. 2020-18114 Filed 9-9-20; 8:45 am]
BILLING CODE 6560-50-P