EPA May Reconsider Air Emissions Standards for Hydraulic Fracturing Operations—Litigation Delayed

In August 2012, the EPA published in the Federal Register standards for oil and gas production facilities promulgated under the New Source Performance Standards (NSPS) and National Emissions Standards for Hazardous Air Pollutants (NESHAP) programs.

The NSPS portion of the rulemaking, NSPS Subpart OOOO, included control requirements for the hydraulic fracturing of natural gas wells, storage vessels, compressor engines, pneumatic controllers, and fugitive emissions. (The NESHAP rule does not regulate hydraulic fracturing and is largely beyond the scope of this blog.)

With the new NSPS, the EPA is for the first time regulating air emissions associated with hydraulic fracturing operations. Due dates under the NSPS rule vary. Some requirements, such as a requirement to use combustion controls during frack flowback, took effect in October 2012.

 Storage vessel provisions are due to take effect in October 2013. A mandate to employ “reduced emission completions” (aka “green completions”) is scheduled for 2015.

No new EPA rulemaking goes unchallenged these days, and the NSPS and NESHAP rules have been no exception.

 Industry groups, including the American Petroleum Institute, have petitioned the EPA to reconsider the rule and also filed challenges in the District of Columbia Circuit Court of Appeals. The court challenges have been consolidated as American Petroleum Institute v. U.S. EPA.

On January 16, 2013, the EPA submitted an unopposed motion to sever the NSPS and NESHAP issues in American Petroleum Institute v. U.S. EPA. The EPA’s motion also requested that the NSPS and NESHAP cases be held in abeyance until August 30, 2013, and May 30, 2014, respectively.

Given that the EPA already needed to clarify NSPS Subpart OOOO, it’s not much of a surprise that the EPA intends to reconsider “certain issues” in the rule. A notice of proposed rulemaking is anticipated by March 29, 2013, with finalization anticipated by July 31, 2013.

 In the longer term, the agency may also reconsider other portions of the rule in a separate rulemaking that would possibly be proposed in December 2013 and finalized in November 2014.

Of note, in its motion to sever, the EPA did not describe the “certain issues” it intends to reconsider. Based on the dates proposed, it’s a good bet that the first of the NSPS reconsideration packages will focus on existing requirements and compliance requirements with October 2013 deadlines (such as storage tank applicability and control requirements).

The earlier package also may include clarifications concerning the existing frack flowback provisions, reserving significant changes to the 2015 “green completion” requirements, if any, for the subsequent rulemaking.

Please note that the stays requested by the EPA are temporary stays of the proceedings in the court case challenging the NSPS and NESHAP rules and do not stay the deadlines in these rules.

The EPA may announce an administrative stay, or adjust deadlines through rulemaking, but unless and until the agency takes these actions, the regulatory compliance deadlines remain in effect.

This article was prepared by Heather Corken (hcorken@fulbright.com / 713 651 8386) and Bob Greenslade (rgreenslade@fulbright.com / 303 801 2747) from Fulbright’s Environmental Law Practice.