Hydraulic Fracking Blog: Colorado's air quality control commission approves hydrocarbon emission control requirements

After a five-day public hearing, on Sunday February 23, 2014, the Colorado Air Quality Control Commission in an 8 to 1 vote approved regulations to control hydrocarbon emissions of volatile organic compounds (VOCs). The Commission estimates that these rules which include input from the Environmental Defense Fund and a number of oil and gas companies, including Anadarko Petroleum Corporation, Noble Energy Inc., and Encana Corporation, will reduce methane emissions by an estimated 92,000 tons per year in the state.

These regulations for oil and gas operations include:

Storage Tanks – Beginning May 1, 2014, owners or operators of storage tanks at well production facilities must collect and control emissions by routing emissions to operating air pollution control equipment during the first 90 days after the date of first production. The air pollution control equipment must achieve an average hydrocarbon control efficiency of 95%.
Inspections of Storage Tanks – Beginning May 1, 2014, owners or operators of storage tanks must conduct audio, visual, olfactory and additional visual inspections of the storage tanks and any associated equipment at least once every 31 days.
Storage Tank Emission Management System (“STEM”) must be developed. All hydrocarbon emissions must be routed to air pollution control equipment and must be operate without venting hydrocarbon emissions from the thief hatch or pressure relief device during normal operation, unless venting is reasonably required for maintenance or safety of personnel and equipment.
Glycol Natural Gas Dehydrators – Beginning May 1, 2015, still vents and vents from any flash separator or flash tank on a glycol natural gas dehydrator located at an oil and gas exploration and production operation, natural gas compressor station, or gas-processing plant must reduce uncontrolled actual emissions of hydrocarbons by at least 95% on a rolling 12-month basis through the use of a condenser or air pollution control equipment.
Leak Detection and Repair (“LDAR”) Programs for well production facilities and natural gas compressor stations must be conducted
Repair and Remonitoring – Repairs for a leak must be made no later than 5 working days after discovery unless parts are unavailable, the equipment requires shutdown to complete the repair or other good cause exists. Within 15 days of the repair, the leak must be remonitored to verify that the repair was effective.
Venting During Downhole Well Maintenance – Beginning May 1, 2014, owners or operators must use best management practices to minimize hydrocarbon emissions and the need for well venting associated with downhole well maintenance and liquids unloading, unless venting is necessary for safety.

With these regulations, Colorado becomes the first state to directly regulate methane emissions from oil and gas operations. The U.S. Environmental Protection Agency in April 2012 proposed new source performance standards under the Clean Air Act and national emission standards for hazardous air pollutants. These standards require companies to use “green completions” to capture and treat hydrocarbons by January 2015, as opposed to using flaring or burning off the emissions. The EPA estimates that with full implementation of these standards methane emissions will be reduced by up to 1.7 million tons annually.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.