As an independent oil & gas operator, it’s important to know what the EPA is doing and what they’re thinking.
In this post, we’re going to explore the good, the bad, and the savvy regarding tank emissions, how they jeopardize your oil & gas operations, and what exactly you need to do about them.
NSPS Subpart OOOO (for the Savvy Operator)
“I never worry about action, but only inaction.”
Winston Churchill, Widely regarded as one of the greatest wartime leaders of the 20th century.
The New Source Performance Standards (NSPS) — aka QuadO — is the most radical piece of legislation or rules to come down on the oil & gas industry. However, it’s not QuadO that scares us; it’s the thought of independent producers not understanding the rules that has us worried…
Operators in Oklahoma and Texas are getting a lot of misinformation from consultants. And, when slapped with a fine, a “but I didn’t know, Sir” ain’t gonna get you off the hook. Essentially, if you’re generating BOC (biogenic organic compounds) emissions of 6 tonnes or more per tank per year, which are C3+ (not methane or anything below), you’re required to reduce those emissions by 95%.
What in the world does 6 tonnes look like? (yah, we had no idea either…)
- 33 lbs of emissions per day
- 1 MCF per day coming off your tank (which is about 1300 BTU of gas…)
- 1 bbl of condensate produced / day (40 API and above)
- 20 bbls of oil produced/day
- 2000 bbls of produced water/day (remember: produced water produces VOCs… so heads up you disposal site and water flood play owners!!)
So, if you’re making 20 bbls of oil per day, you’re more than likely making 6 tonnes of gas per year per tank.
So, when did all this happen??
August 23, 2011 is where the authorities draw their line in the sand. Essentially, anything coming online after August 23, 2011 falls squarely under QuadO. That being said, anything before August 23 isn’t affected…
Why aren’t our production assets with an earlier spud date affected? Because the EPA feels that these sites will generally be in decline and any emissions issues will resolve themselves — which actually makes pretty good sense.
However, if you go back in and rework a well from the late 1980s, that property will now fall square under the regulations of the EPA.
So, what happens if you do fall above the 6 tonne threshold?
We know some of the shiftier operators would like to say, “hell, we’ll just throw a few more tanks out there and simply fall into compliance with those SOBs…”
Which leads to an interesting question: 6 tones is great and all, but can we average tanks?
It’s a good thought, and while the State rules take into account site wide emissions, the federal rules explicitly state 6 tonnes per year PER TANK.
Many consultants and trade associations say you can average tanks, but the EPA rules say you can’t. The EPA is effectively saying 6 tonnes per single facility or source.
Now, a lot of us have read about certain States are coming down heavy on companies who flare (high volumes of) gas because they see that as potential revenue going up in flames (Much Of North Dakota’s Natural Gas Is Going Up In Flames…)
It’s interesting to note that there are three essential areas of VOC creation:
working losses (tank levels moving up and down from loading and offloading…)
standing losses (temperature changes causes oil to expand and contract)
flash (Bingo! 90% of our emissions happen here)
Why do 90% of the emissions happen from flash?
Two words: Live. Crude.
“Live Crude” is simply product that contains gas in the solution, and is still remains under pressure as it moves through the equipment of our tank batteries.
Flash happens because crude is dumped into atmospheric tanks — generally from a separator or heater with 30-50 PSI — that reside at an atmospheric level. It’s sort of like soda coming out of a can… when opened, all the gas wants to break out. And, this is exactly from where the majority of our emissions are coming…
Now that we know the source of 90% of our emissions, let’s approach this methodically. That first tank we’re flashing into from our separator or heater, we must take our VOC measurement from that tank.
**Fun Side Note: Here at GreaseBook, we hear all sorts of good stuff that we like to pass along. And while we never promote doing the wrong thing, we do like to make sure independents are as informed as possible so that they can make their own best decision…
That being said, the Savvy Operator knows that if you really want to tip-toe around the rules, you can set up your sites to ‘load parallel’ — essentially, load all your tanks evenly.
By doing this, you’d be sending a stern message to the EPA of ‘don’t tread on me / leave me alone…’ But, you may also invite unnecessary scrutiny from your inspector…
In this case, we think it’s easier to just play by the rules. The more quickly we understand the rules (and abide by them), the more quickly we can get back to the business at hand (ie producing oil).
Hey EPA! So, where do Stripper Well Operators fall in all this?
Don’t worry — the EPA isn’t out to put us out of business. If each source is below 4 tonnes per year, you can dodge the draft altogether as you aren’t required to have controls. We still gotta have our thief hatches etc — but no combustors, and definitely no VRUs.
Fear: The Great Motivator
Colorado has been in the news for having some pretty strict compliance rules. And, many of the 23 oil producing States (including Ohio, Utah, Wyoming…) are looking at the CO rule book as a blueprint. However, until these States pass similar regulations of their own, be aware that fear-mongering is a well-known tactic to sell you compliance equipment you may not need…
Just a few weeks ago, a VRU consultant told us in passing that if a “Colorado inspector sees visible emissions, hears hissing, smells gas, sees smoke off a flair, they’ll write you a fine on the spot. No negotiations. No notice. No bull.”
He went on to say, “You have two tank lids open left open by a purchaser or service co? Boom. Each one is $15K violation.”
We thought that was pretty strong…
Denise wrote in to say, “I used to work for Colorado in their oil and gas unit at the Air Pollution Control Division. The State of Colorado doesn’t have statutory authority to issue you a fine right on the spot if they find a violation. A Notice of Violation (NOV) will be issued and they go back to the office to prepare it.”
Denise went on to tell us, “There is an opportunity for negotiation. The State may not give in but you can try. There may be a situation such as you just bought the facility and are about to start getting everything in compliance… this may not get you off the hook but you can enter into a compliance plan.
The emissions ARE measured per tank. Any tank with a potential to emit of 6 tons or more is subject to Quad O (unless it was built and not modified before August 23, 2011). Rearranging your facility to avoid this situation may meet the letter of the law but still violates the spirit of the law. The same emissions that the regulation is trying to control end up not controlled. States may not allow you to permit a facility with a rearrangement to avoid a regulation.
It’s very frustrating to try to calculate the emissions inventory of a facility if the records are inadequate or missing. EVERYONE needs to keep accurate, complete records, even the small operators. This regulation applies to many small operators and states don’t want to hear excuses for poor recordkeeping. That’s also something that will get you an NOV.”
(Excellent insight, Denise! GreaseBook thanks you!!)
You can’t manage what you don’t measure. So, we recommend the carpenter’s rule: measure twice, cut once. Again, the idea is to know how many VOCs you’re producing before someone comes to tell you how many VOCs you’re producing!!
(Tank emissions detected with the FLIR GasFindIR infrared camera at an oil and gas storage facility located in Fayette County, Texas.)
How to Measure those VOCs
“What gets measured gets managed.”
Peter Drucker, Austrian-born American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corporation.
So, just how much gas is coming off each source / tank? Breathing and working loss emissions from produced water tanks can be determined using the current version of the TANKS program (the EPA’s free software), available for download here:
Again, it all comes back to knowing what you got. Figure out whether you need to act so that you can get on with the business of producing.
Many of our readers made us aware that the EPA’s TANKS Program is defunct and no longer working. Shortly thereafter (leave it to private industry!), we were contacted by a Halker Consulting (Denver, CO) who has built a free tank emissions app which you can download straight to your iPhone.
Essentially, the app helps estimate emissions of volatile organic compounds (VOCs) and hazardous air pollutants (HAPs) from fixed and floating roof liquid storage tanks. The user inputs the tank dimensions and conditions, ambient conditions, and component specifications, and the app calculates the estimated emissions from the specified type of tank.
EPA 101: One Class You Don’t Wanna Fail
Basically, there are two dates you need to get your homework in by…
Group 1: from August 23, 2012 to April 12, 2013 — any production coming online during this window, you must make a determination how many tonnes have been produced off. If you haven’t done this, you’re already out of compliance.
Basically, every well you had, emissions toneage had to be determined by October 15, 2013 and you had to notify either the State or the EPA by January 15, 2014. If you haven’t done this, you’re already out of compliance.
Group 2: April 12, 2013 to Today — these wells that have recently come online are in the EPA ‘system’. So, once the well has stabilize, you have 60 days to bring it into compliance. Basically, the feds give you 30 days to determine your emissions, and 30 more to get your controls onsite.
Finally, mark April 15, 2015 on your calendar (whoops!), as this was our ‘due by’ date to put any necessary controls onsite.
While none of us are Hot for Teacher when it comes to the EPA, some savvy operators have come up with some Cliff’s Notes which may help some of us get through the class that much easier…
In our next installment of this two part series, we’ll explore the Vapor Recovery Unit, the VRU tower, and why some industry consultants believe it’s the future of the oil & gas industry.
Did we get something wrong? Do you disagree with something we said? Or, maybe you’re just a big Van Halen fan??
Whatever it is, other independents can benefit from your input.
So, your comments below, other independents would like to hear about it…