In the next few days, the Bureau of Ocean Energy Management (BOEM) will publish in the Federal Register a Proposed Rule that would result in a significant change on how the agency regulates air emissions from oil and gas operations on the Outer Continental Shelf (OCS), in the Central and Western Gulf of Mexico (GOM).  On March 17, BOEM released a pre-publication version on their website.  With the title of “Air Quality Control, Reporting, and Compliance,” the 349-page document details what would be the first major re-write of the OCS air quality regulations in 35 years.

From a high-level standpoint, the agency’s approach would stay the same (as required by the OCSLA): projected emissions would be compared to exemption thresholds, and if these are exceeded, additional analysis would be required to determine if emissions “significantly affect the air quality of any state.”  43 U.S.C. § 1334(a)(8).  The proposed rule does not change the exemption thresholds at this time, although the agency all but assures regulated entities that the exemption thresholds will be changed in the near future.[1]  However, the proposed rule modifies to some degree or another every other aspect of the current air regulations.

Under the proposed rule, lessees and operators submitting a new or revised Exploration Plan, Development and Production Plan, or Development Operations Coordination Document, would calculate the projected emissions associated with the plan just like they have to do under the current rule.  However, the projected emissions would now include additional pollutants to account for all criteria pollutants and precursors.  The projected emissions would also have to include emissions from mobile support craft operating in support of the facility, regardless of their distance from the facility.  Finally, contemporaneous emissions from facilities that are wholly or partially owned, controlled, or operated by the same entity would need to be aggregated if the facilities are within 1 nautical mile or relate to a common reservoir.  The projected emissions would be compared to the exemption thresholds based on the existing formulas that have Distance as the only variable.[2]  However, once new exemption threshold values are promulgated, the Distance to use would be the State Seaward Boundary instead of the ”from the closest onshore area.”  30 C.F.R. § 550.303(d).

If VOC emissions exceed the threshold, Emission Reducing Measures (ERM) are automatically required based on the type of facility and attainment status of the nearest State.  For all other pollutants, modeling would be required.  The proposed rule modifies the points of origin and points of impact for modeling analysis, requiring lessees to evaluate impacts over the entire area of a State’s jurisdiction extending to its seaward boundary, and model non-stationary emission points from a separate point of origin.  In addition, the proposed rule would now harmonize the air standards for determining impacts with the EPA standards.  Finally, the impacts analysis in attainment areas would need to take into account other onshore and offshore sources that may already be using the maximum allowed increases in ambient air concentration.

If the modeling analysis shows that the applicable standard or benchmark would be exceeded at the State water line, ERM’s would be required.  While the current rule uses Best Available Control Technology (BACT) as the first and primary control mechanism (and to a lesser degree, emission credits), the proposed rule would allow use of other mechanisms to reduce emissions.  As such, BACT is but one type of ERM, along with emissions credits, operational controls and equipment replacement.  Lessees would be required to identify all technically feasible ERM’s and rank them according to potential effectiveness.  Lessees would be required to implement the most effective one unless it is found not to be cost effective.  Whether consideration of BACT must be included in this ERM analysis depends on the pollutant and the attainment status.  However, BOEM stresses that BACT as defined in the BOEM rule “would not have the same meaning as used in the USEPA regulation.”  Proposed Rule, p. 108.

Reporting and recordkeeping requirements would be expanded under the proposed rule.  All facilities would need to record fuel usage and activity data, which would be submitted to BOEM periodically.  Facilities that are subject to emission controls or have large emissions may also be subject to monitoring requirements using PEMS.

The proposed rule would require resubmittal of plans 10 years after approval, and they would be subject to the air control requirements in place at that time.  In addition, after issuance of new exemption thresholds, plans that were previously approved would need to be resubmitted for compliance with these changes (resubmittal depends on the date of approval and would begin in the year 2020).

In the proposed rule, the agency solicits comments on many specific issues and requirements.  Comments will be due 60 days after publication in the Federal Register, but industry is expected to ask for an extension.  While environmental groups can be expected to support these changes, industry groups such as API have already expressed deep concerns about the proposal.  Lessees and operators should review the proposed rule and provide comments prior to the deadline.

[1]              Although the thresholds are not changing at this time, BOEM is currently conducting a scientific study to determine if they should be changed.  Any new exemption thresholds are expected to be finalized no later than the year 2020.  Proposed Rule, p. 80.

[2]              For example, for TSP, SO2, NOX and VOC, the emission exemption threshold (E) in tons per year is equal to 33.3 x D, where D is the distance in miles to the closest State shoreline.  Therefore, a facility located 50 miles from shore would have an exemption threshold of 1,665 TPY.