API: More time needed on EPA's upstream GHG, refining proposals

The oil and gas industry will need more time to respond to the US Environmental Protection Agency’s proposed upstream greenhouse gas (GHG) emission requirements and its proposed refinery emissions rule, American Petroleum Institute officials said. “We’d like to work with the agency to get oil and gas rules that satisfy environmental improvements everyone is working for,” Howard Feldman, API’s regulatory and scientific affairs director, told reporters in a Sept. 26 teleconference.

“The Obama administration has an initiative to review and improve regulations to reduce unnecessary burdens on business,” added Khary Cauthen, API’s federal relations director, who also participated. “We support its work and urge the agency to focus on the enormous benefits to our economy that might be produced from sounder regulations, including those affecting our industry.”

Feldman noted that while the agency’s upstream GHG proposal has not attracted the amount of attention that EPA’s recently withdrawn out-of-cycle ozone rules did, it affects all oil and gas drilling, producing, and transportation. Its potential implementation costs could be much greater than EPA’s estimates, he warned.

“The proposal is expansive and complex,” he explained. It includes a set of five interconnected rules, spanning over 100 pages in the Federal Register with many times that number of pages of supplemental analyses and materials. Preparing comments on any one of these rules would be a challenge within 60 days. Preparing thorough and meaningful comments on all five [in that period] is not reasonable or practicable. The agency should allow an additional 60 days for comment.”

More time to implement

Producers support more use of what EPA has called green equipment if the technology is safe, technically feasible, and cost-effective, according to Feldman. But he recommended that final rules phase in any green completion requirements over 2 more years to give the industry time beyond the proposed implementation in 2012’s second quarter to assure that equipment is available and meets necessary performance and safety standards.

“Thousands of tank combustors, for example, will need to be certified and put on the market,” he said. “Some are in use right now. Thousands more would be required. If another manufacturer comes onto the market and says it wants to help meet the new demand, we’ll want to make sure it also can meet the technical and safety requirements. We’ll be asking for that much longer.” API and other witnesses will make that point at EPA’s hearings on the proposal Sept. 27 in Pittsburgh, Sept. 28 in Denver, and Sept. 29 in Arlington, Tex., Feldman indicated.

Similar time problems exist with EPA’s proposed downstream regulations, which include “Tier 3” gasoline requirements to reduce sulfur limits further as well as refinery emissions, Cauthen said.

“The refinery rule is currently scheduled to be proposed just over one month after EPA finishes collecting emissions data from oil and natural gas companies. More time is needed to review this information,” he noted. “And the agency has yet to make a strong case that additional sulfur reductions will produce environmental improvements worth their costs.”

He said that EPA is scheduled to receive a large amount of data at the end of 6 months. “It actually will be impossible—or near impossible—for companies to use that data as they move forward to comply with these rules,” Cauthen said. “EPA should do an advanced notice of proposed rulemaking on it instead.”

Contact Nick Snow at nicks@pennwell.com.

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