There is a continuing focus by regulators on the tightening of the regulation of vent gas (VOCs, methane) from oil and gas operations. These regulations place a large liability on industry to know the regulations and comply with all of the emission controls, standards, testing, record keeping and reporting requirements. As regulations are incorporated into a company’s day to day compliance systems, there is a need to be aware that enforcement of the rules is a reality.

Regulators expect continuous compliance with all rules and will take enforcement actions if noncompliance is discovered.

Most of the day to day compliance is handled by State environmental regulatory agencies.

There are many reasons to comply with the air quality regulations besides fear of enforcement action. This includes reputation of the company and our industry, competitive advantage given to those who do not comply and civil liabilities (e.g., citizen suits, environmental NGO suits) and greater scrutiny of all operations not related to the original violation.

IR image of vent gas from storage tank:

Some items to consider for your company’s ongoing environmental management system for general compliance and storage tanks emission controls are discussed below.

 

Legal Counsel

For any enforcement action, your company should consult your company attorney for the best response strategy.

 

EPA Online Enforcement and Compliance Histories

The EPA’s Enforcement and Compliance History Online website (ECHO) is publically available website that can be used to search for facilities compliance status with environmental regulations. This is a multimedia resource that includes air, water and waste regulatory compliance.  State agencies may also have online resources to determine compliance actions taken.

 

 

Types of Enforcement Actions for Air Quality Issues

 

Civil Administrative Actions are non-judicial enforcement actions taken by EPA or a state regulatory agency based on its authority. These actions do not involve a judicial court process. An administrative action by EPA or a state agency can include the following depending on the agency’s terms.

• Notice of violation (NOV)
• Incident of noncompliance (INC)
• Administrative order (AO) directing an individual, a business, or other entity to take action to come into compliance (may include monetary penalty). These can include agreed orders or default orders (e.g., TCEQ)

 

Expedited Settlement Agreements

The EPA and many state environmental regulatory agencies use Expedited Settlement Agreements (ESA) that address minor to moderate environmental violations.  The ESA is used for enforcement in cases where violations can be corrected and a penalty obtained in a short amount of time.

In such agreements, the agency offers to settle the violations for a reduced penalty in exchange for the facility certifying that the violation(s) was corrected within the a certain time frame (e.g., <30 days). Acceptance by the regulated facility is typically voluntary. The agreement benefits the department by cutting back staff time needed for smaller violations. It benefits the facility because of the reduction in paid violation penalties. There are usually restrictions for repeat violations.

 

Civil Judicial Actions are formal lawsuits which are filed in court, against persons or entities that have failed to:

• Comply with statutory or regulatory requirements
• Comply with an administrative order

These cases are filed by the U.S. Department of Justice on behalf of EPA. In regulatory cases they may be filed by the State’s Attorneys General on behalf of the states. Learn more about Civil Cases and Settlement.

 

Criminal Actions can occur when EPA or a state take enforcement action against a company or person through a criminal action. Criminal actions are usually reserved for serious violations which are willful or knowingly committed.

A court conviction can result in fines and/or imprisonment.

 

Air Noncompliance Civil Monetary Penalties

Fines for violations can exceed $50,000 per day per violation of the Federal Clean Air Act.  Note that this penalty is adjusted annual for inflation based on a base fine of $25,000 per day per violation. See 2020 Civil Monetary Penalty Inflation Adjustment Rule.

State regulatory agencies that have delegation of administering the Clean Air Act would have similar penalty schedules. State regulatory agencies may have their own penalty schedule for state-only specific air compliance requirements.

 

Civil Monetary Penalty Determination

The USEPA and state have a formal method to determine/calculate civil monetary penalties. Factors that are considered can include:

• Compliance history of facility
• Degree of culpability, recalcitrance, defiance, or indifference to regulations or orders
• Good-faith effort to comply
• Monetary benefits realized through noncompliance
• Nature and gravity of the violation
• Gross revenues generated by the respondent
• Degree of real or potential harm to the environment or human health
• Timeliness of reporting the noncompliance or violation
• Whether the violation or noncompliance was concealed or there was an attempt to conceal by the person charged
• Failure to mitigate the damages caused by his noncompliance or violation
• Costs to prosecute an enforcement action, such as staff time, equipment use, hearing records, and expert assistance.
• Whether the facility was a major or minor source of potential pollutants
• Was the violation was programmatic (lack of system to report, track, ensure compliance)

 

Costs of Noncompliance

Some potential factors to consider for the cost of noncompliance include:

• Cost to correct the issue
• Cost to prepare a response to the agency. This can include:
  • In-house HSE costs
  • In-house or outside attorney costs
  • Consultant costs
• Monetary Penalties
• Cost to offset any monetary gains from noncompliance
• Impact to the environment
• Community relations
• Cost to defend against regulatory agency suits
• Cost to defend against citizen suits

 

 

Air Emission Standards Compliance for Crude Oil and Produced Water Storage Tanks

To stay in compliance with state and federal (e.g., NSPS OOOO) air quality standards for storage tanks consider the following issues that can lead to enforcement actions.

1. Emission controls not installed or not operating properly.
2. Inadequate system design such that the needed percent VOC reduction is not achieved.
3. Inadequate piping (closed vent system) between storage tanks and control device – resulting in back pressure and leaking storage tank hatches.
4. Leaking hatches due to faulty/damaged seals.
5. Leaking pressure relief devices (other than emergency releases).
6. Undersized or oversized vapor recovery units (VRU).
7. Undersized or oversized vapor combustion units or flares.
8. Systems not sized for actual short-term minimum and/or maximum flowrates of vent gas.

 

Resources

• EPA General Enforcement: http://www.epa.gov/enforcement/enforcement-basic-information
• Criminal Provisions of the Clean Air Act: http://www.epa.gov/enforcement/criminal-provisions-clean-air-act.

 

Cimarron Services and Products

Cimarron can assess your existing vapor control systems for compliance with Federal (NSPS OOOO/OOOOa) and State air quality rules using our IQR Emissions Services. Our IQR team members are ready for the following:

• Monitor for leaks from vapor (vent gas) control systems (tank hatch, closed vent systems).
• Determine adequacy of existing vent gas systems including vapor recovery units and enclosed combustors.
• Based on site visits and measurements, supply data that can be used to prepare a Modeling Guideline according to the requirements of Appendix B of the EPA New Owner Clean Air Act Audit Program for Oil and Gas

As a part of our IQR/LDAR services we can conduct the required leak monitoring for NSPS OOOOa.

Our best in class Vapor Recovery Units, Vapor Recovery Towers, and Vapor Combustion Units can minimize emissions so production is optimized with minimal regulatory burdens.

 

Contact us today at:
+1 (844) 746-1676
sales@cimarron.com