On August 1, 2023, EPA published the latest package of proposed changes to greenhouse gas (GHG) reporting requirements for oil and gas facilities under 40 CFR 98 Subpart W. The extensive proposal is aimed at addressing EPA’s mandate under the Inflation Reduction Act (IRA) to revise the requirements of Subpart W to achieve two key objectives: (1) to ensure that calculations are based on latest empirical data and research; and (2) to accurately reflect the total methane emissions potentially subject to the waste emissions charge under the IRA’s Methane Emission Reduction Program (MERP).
In the 160 pages of preamble and proposed regulatory language, EPA has included substantive new and revised requirements, including but not limited to the following key items:
- New source categories added to Subpart W:
- Nitrogen removal units (for onshore production, gathering & boosting, processing, LNG storage, and LNG import/export segments)
- Produced water tanks (for onshore production, gathering & boosting, and processing segments)
- Mud degassing (for onshore production segment)
- Crankcase venting (for all industry segments except offshore production)
- Other large release (super-emitter) events (for all industry segments)
- Existing source categories added to certain industry segments:
- Blowdown vent stacks (for onshore production, underground storage, LNG storage, and distribution segments)
- Pneumatic devices (for processing and distribution segments)
- Dehy vents (for transmission and underground storage segments)
- Acid gas removal units (for LNG storage and LNG import/export segments)
- Calculation methodology (including new monitoring, measurement, and/or emission factors) changes for all segments, such as:
- Combustion slip (use of site-specific test data or methane emission factors from AP-42 for engines and turbines in lieu of Subpart C factors)
- Flare stacks (measuring gas flow and composition; applying destruction efficiency values from 92% to 98% based on a tiered approach)
- Equipment leaks (use of direct measurement; revisions to default factors)
- Pneumatics (use of direct measurement for intermittent bleed devices; revisions to default factors for low- and high-bleed devices)
- Numerous revisions to reporting requirements, most notably:
- Disaggregation of most activity and emissions data reporting for onshore production to the wellpad level vs. basin level
- Disaggregation of most activity and emissions data reporting for gathering & boosting at the site level vs. basin level
In addition to the notable changes highlighted above, the proposal includes several new data reporting elements, new or revised definitions, as well as some technical amendments, corrections, and clarifications.
The effective date of the rule changes will be January 1, 2025 (to be reported by March 31, 2026); with an exception for data reporting elements for produced quantities of natural gas, crude oil, and condensate sent to sales for each well permanently taken out of production (i.e., plugged or abandoned) in the reporting year. Reporters must include that information for reporting year 2024 (to be submitted by March 31, 2025).
Comments on this proposal are due October 2, 2023. It should be noted that this proposal supersedes the proposed revisions that were published in June 2022. Any comments previously submitted on that proposal that remain relevant to this latest package should be resubmitted to EPA for consideration. EPA will be holding a public hearing on August 21, 2023.
Broader regulation impacts
These wide-sweeping revisions to Subpart W have significant implications to the oil and gas industry sector, particularly as they directly reference or may conflict with or depend upon other critical regulatory programs such as NSPS Subpart OOOOb and the IRA MERP which have yet to be finalized. To add further complexity, the IRA requires EPA to begin assessing the MERP waste emissions charge in 2025 based on 2024 emissions data (which is before the effective date of these proposed Subpart W changes). As companies evaluate the many potential impacts of the proposal on their facilities, numerous strategic factors should be considered, such as:
- Allocation of significant resources to fully understand the ramifications of the proposed changes to current operating practices, monitoring systems, equipment design/installation, testing and surveillance programs and make corresponding updates to GHG Monitoring Plans required under Subpart A of 40 CFR 98;
- Reconfiguration of existing software systems currently being used to comply with Subpart W recordkeeping, calculation, and/or reporting requirements (or new investment in digital solutions to aid in these efforts if not already doing so);
- Reassessment of potential waste emissions fee liabilities under the MERP in light of the addition of new covered sources and increased emission factors included in the proposal; and
- Reevaluation of any GHG or methane reduction targets that the company has publicly announced, as the proposal package is expected to increase the reported emissions for most facilities.
If you need assistance with understanding the implications of these proposed changes for your facilities, we can help! Trinity’s 40+ years of experience in the Oil & Gas sector translates to a deep understanding of the industry’s emission sources and business practices. We have been assisting companies with Subpart W compliance and reporting efforts (from developing monitoring plans, performing emissions calculations, and preparing reporting forms, to selection, configuration, and implementation of third-party software) since the program’s inception in 2009.
Reach out to our experts Christi Wilson or Anu Krishnan for a complimentary consultation.
