DAR File No. 38580

Environmental Quality, Air Quality

Rule R307-502

Oil and Gas Industry: Pneumatic Controllers

Notice of Proposed Rule

(New Rule)

DAR File No.: 38580
Filed: 06/05/2014 02:06:03 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

In 2012, the State of Utah entered into EPA's Ozone Advance Program with the goal to proactively lower ozone values in the Uinta Basin. Ozone is created by photochemical reaction, and the main precursors are volatile organic compounds (VOC) and (NOx). In the Uinta Basin, oil and gas production accounts for 97% of anthropogenic VOC emissions. This proposed rule is one of four that the Air Quality Board has proposed as the first phase to combat high ozone levels by lowering VOC emissions. Pneumatic controllers powered by pressurized natural gas are used in the oil and gas industry. In the past, high-bleed devices that vent natural gas to the atmosphere were commonly used. The recent oil and gas New Source Performance Standard (NSPS) OOOO requires the use of low-bleed controllers in most circumstances. Rule R307-502 would require the replacement of existing high-bleed devices with low-bleed devices so that all pneumatic controllers in the state would meet the NSPS standard. Implementation of this rule is estimated to reduce VOC emissions by 3,716 tons/year in the 5-county area included in the WRAP Phase III inventory for oil and gas (Duchesne, Uintah, Carbon, Emery, and Grand Counties).

Summary of the rule or change:

Rule R307-502 would require the replacement of existing high-bleed devices with low-bleed devices so that all pneumatic controllers in the state would meet the NSPS standard. The draft rule phases in the requirement over several years. High-bleed pneumatic devices in Duchesne and Uintah Counties must be replaced by 12/01/2015 to provide reductions prior to the 2015/16 winter ozone season. High-bleed pneumatic devices in the rest of the state must be replaced prior to 04/01/2017 to provide reductions prior to the 2017 summer ozone season.

State statutory or constitutional authorization for this rule:

• Subsection 19-2-104(1)(a)

Anticipated cost or savings to:

the state budget:

Because there are no new requirements to the state, there are no anticipated costs or savings.

local governments:

Because there are no new requirements for local government, there are no anticipated costs or savings.

small businesses:

Because the requirements of this rule apply to businesses with more than 50 employees, there are no anticipated costs for small businesses.

persons other than small businesses, businesses, or local governmental entities:

There are no new requirements for persons other than small businesses, businesses, or local government entities; therefore, there are no anticipated costs or savings.

Compliance costs for affected persons:

While there is an initial cost to replace these controllers, there is also a benefit to the operators as the natural gas is recaptured and can be sold as product. EPA's Natural Gas Star Program estimates a cost of $2,104 to replace an existing high-bleed controller. More recently, Colorado estimated initial costs of $1,420 to replace each high-bleed pneumatic controller. At current natural gas prices the new devices will pay for themselves in about 1-1/2 to 2 years and will then continue to provide on-going savings to the company.

Comments by the department head on the fiscal impact the rule may have on businesses:

While there is an initial cost to replace these controllers, there is also a benefit to the operators as the natural gas is recaptured and can be sold as product. EPA's Natural Gas Star Program estimates a cost of $2,104 to replace an existing high-bleed controller. More recently, Colorado estimated initial costs of $1,420 to replace each high-bleed pneumatic controller. At current natural gas prices the new devices will pay for themselves in about 1 1/2 to 2 years and will then continue to provide on-going savings to the company.

Amanda Smith, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Environmental Quality
Air QualityRoom Fourth Floor
195 N 1950 W
SALT LAKE CITY, UT 84116-3085

Direct questions regarding this rule to:

• Mark Berger at the above address, by phone at 801-536-4000, by FAX at 801-536-0085, or by Internet E-mail at mberger@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/31/2014

This rule may become effective on:

09/04/2014

Authorized by:

Bryce Bird, Director

R307. Environmental Quality.

R307-502. Oil and Gas Industry: Pneumatic Controllers.

R307-502-1. Purpose.

(1) The purpose of R307-502 is to reduce emissions of volatile organic compounds from pneumatic controllers that are associated with oil and gas operations.

(2) The rule requires existing pneumatic controllers to meet the standards established for new controllers in 40 CFR Part 60, Subpart OOOO.

 

R307-502-2. Definitions.

(1) The definitions in 40 CFR 60, Subpart OOOO Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution, which is incorporated by reference in R307-210 apply to R307-502.

(2) "Existing pneumatic controller" means a pneumatic controller affected facility as described in 40 CFR 60.5365(d)(1) through (3) that was constructed, modified, or reconstructed prior to October 15, 2013.

 

R307-502-3. Applicability.

R307-502 applies to the owner or operator of any existing pneumatic controller in Utah.

 

R307-502-4. Retrofit Requirements.

(1) Effective December 1, 2015, all existing pneumatic controllers in Duchesne County or Uintah County shall meet the standards established for pneumatic controller affected facilities that are constructed, modified or reconstructed on or after October 15, 2013, as specified in 40 CFR 60, Subpart OOOO Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution.

(2) Effective April 1, 2017 all existing pneumatic controllers in Utah shall meet the standards established for pneumatic controller affected facilities that are constructed, modified or reconstructed on or after October 15, 2013 as specified in 40 CFR 60, Subpart OOOO Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution.

 

R307-502-5. Documentation Required.

The owner or operator shall identify all existing pneumatic controller facilities that were replaced or retrofitted to meet the requirements of R307-502-4 in the annual report required under 40 CFR 60.5420.

 

KEY: air pollution, oil, gas, pneumatic controllers

Date of Enactment or Last Substantive Amendment: 2014

Authorizing, and Implemented or Interpreted Law: 19-2-104(1)(a)