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California Adopts Nation's Strictest Methane Rules
Practical Law Legal Update w-007-2298 (Approx. 4 pages)
California Adopts Nation's Strictest Methane Rules
by Practical Law Finance
| Published on 29 Mar 2017 • USA (National/Federal) |
The California Air Resource Board (CARB) unanimously adopted new rules to control the emission of methane.
On March 23, 2017, the California Air Resource Board (CARB) announced the approval of new regulations aimed at curbing the release of methane during the production and transportation of natural gas. Methane is one of the main components of natural gas and, as a greenhouse gas, is considered a major contributor to the greenhouse effect.
According to the CARB, these regulations are partially in response to a large scale methane leak at the Aliso Canyon natural gas storage facility in 2016. The new methane regulations require the quarterly monitoring of methane emissions produced from oil and gas wells, natural gas processing facilities, compressor stations, and other facilities used to process and deliver oil and natural gas, described below.
CARB has described these new rules as "the most comprehensive of [their] kind" in the US.
California is implementing these regulations at a time when the federal government is weakening environmental regulations.
Separator and Tank Systems
Flash testing
The new regulations provide that:
- By January 1, 2018, existing separator and tank systems that do not use a vapor collection system to control emissions must conduct flash analysis testing of crude oil, condensate, or produced water that is processed, stored, or held in the stem. New separator and tank systems meeting the criteria above must conduct flash analysis testing within 90 days of initial system startup.
- All flash analysis testing must be conducted in accordance with established testing procedures discussed in Appendix C of the regulations.
Emissions control
By January 1, 2019:
- Owners or operators of existing separator and tank systems that have an annual emission rate that is greater than 10 metric tons per year of methane must use a vapor collection system. Systems with an annual emission rate that is less than or equal to 10 metric tons per year of methane will be required to conduct flash analysis testing and report the results annually.
- New separator and tank systems meeting the criteria above will be required to use a vapor collection system within 180 days of flash analysis testing.
- For systems with three years of test results that show methane emissions of less than or equal to 10 metric tons per year, the owner or operator may reduce the frequency of testing to once every five years.
Circulation Tanks for Well Stimulation Treatments
Circulation Tanks
By January 1, 2018, owners or operators of circulation tanks must implement best practices management to limit methane emissions. Best practices plans must address the following points:
- Inspections to minimize emissions from circulation tanks.
- Minimizing venting of emissions from circulation tanks.
- Minimizing the duration of liquid circulation.
- Alternative practices to control vented and fugitive emissions.
Circulation Tanks Employing the use of Well Stimulation Treatments
In the case of these wells, the regulations provide that:
- By January 1, 2019, owners or operators that conduct well stimulation treatments must provide the CARB Executive Officer with a written report detailing the results of equipment used to control emissions from circulation tanks.
- By July 1, 2020, owners or operators that conduct well stimulation treatments for circulation tanks must control emissions from the circulation tanks with at least a 95 percent vapor collection and control efficiency.
Reciprocating Natural Gas Compressors
Beginning January 1, 2018, certain components on driver engines and compressors for reciprocating natural gas compressors must comply with certain leak detection and repair requirements. These requirements are not applicable to reciprocating natural gas compressors located on onshore or offshore crude oil or natural gas production facilities that operate less than 200 hours per calendar year, so long as the owner or operator maintains a record of the hours of operation.
Centrifugal Natural Gas Compressors
The regulations also provide that:
- Beginning January 1, 2018, certain components on driver engines and compressors that employ a wet or dry seal shall be required to comply with certain leak detection and repair requirements.
- By January 1, 2019, centrifugal compressors that employ a wet seal will be required to control the venting of wet seal gas through the use of a vapor collection system.
These requirements are not applicable to centrifugal gas compressors that operate less than 200 hours per calendar year, so long as the owner or operator maintains a record of the hours of operation.
Natural Gas Powered Pneumatic Devices and Pumps
Beginning January 1, 2019, continuous bleed natural gas pneumatic devices and pumps and natural gas powered pneumatic pumps will be prohibited from venting natural gas to the atmosphere and will be required to comply with certain leak detection and repair requirements.
Liquid Unloading of Natural Gas Wells
Beginning January 1, 2018, owners or operators of natural gas wells which vent to the atmosphere for the purpose of liquid unloading will be required to perform one of the following procedures:
- Collect vented natural gas through the use of a vapor collection system.
- Measure the volume of vented gas.
- Calculate the volume of natural gas vented by methods specified in Appendix C of the regulations.
Owners or operators will be required to record the volume of natural gas vented and specify the calculation methods.
Well Casing Vents
Beginning January 1, 2018, owners or operators of wells with a well casing vent that is open to the atmosphere will be required to annually measure the natural gas flow rate and report results to CARB once per calendar year.
Natural Gas Underground Storage Facility Monitoring Requirements
By January 1, 2018, owners or operators of underground natural gas storage facilities will be required to submit to the CARB a monitoring plan for approval or disapproval by CARB. The monitoring plan is required to address procedures for:
- Validating data and alarms.
- Documenting the event of a well blowout.
- Monitoring equipment specifications and procedures.
Within 180 days of approval, the monitoring plan must be placed in effect.