Methane emissions from oil and gas operations targeted by state regulations

Ohio has joined Colorado and Wyoming in issuing new regulations aimed at limiting the emission of methane gas from oil and natural gas operations to address climate change and health concerns. In development for more than a year, the revised Ohio rules are effective immediately and apply to high volume hydraulic fracturing, oil and gas well site production operations. The rules modify the Ohio Environmental Protection Agency’s general permitting process and include the following:

• Operators must now test and monitor for any fugitive emissions taking place at a well site on a quarterly basis.
• A leak detection and repair program must be developed and implemented. The program must be “designed to monitor and repair leaks from ancillary equipment and compressors covered by [the] permit, including each pump, compressor, pressure relief device, connector, valve, flange, vent cover, any bypass in the closed vent system, and each storage vessel.”
• “Leaks shall be detected by the use of either a ‘Forward Looking Infra-Red’ (FLIR) camera or” other approved technology.
• The first attempt at repair of a leak must be made within five (5) calendar days of finding the leak. Full repairs must be completed within 30 days.
• Information must be recorded during leak inspections and these records must be kept for at least five (5) years.
• Permit Evaluation Reports must be filed annually with the Ohio EPA.

With continued public concerns, it is likely that other states, possibly Pennsylvania and New York, will follow the lead of Colorado, Wyoming and Ohio to regulate fugitive emissions. North Dakota recently approved flaring reduction regulations.

Federal rules are already in effect requiring the use of green completion technology at well sites beginning in 2015. These rules target emissions from compressors, oil storage tanks and other oil and gas equipment, with the exception of “wildcat wells.” In March 2014, the White House released its “Climate Action Plan: Strategy to Reduce Methane Emissions” to target emissions from coal mines, landfills, agriculture and oil and gas activities.

As part of this plan, the Interior Department is to propose updated standards to reduce flaring and venting of methane gas. In addition, the EPA will be assessing several potentially significant sources of methane and other emissions and will be soliciting information from independent experts through a series of white papers.

In the fall of 2014, the EPA will decide how best to pursue further methane reductions; and, if necessary develop additional regulations by the end of 2016.

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