EPA NEW OWNER CLEAN AIR ACT AUDIT PROGRAM FOR OIL AND GAS

On March 2, 2019, the USEPA finalized a voluntary New Owner Clean Air Act Audit (CAA) Program custom-made for the oil and natural gas sector. The program can be used by new owners of upstream exploration and production sites to voluntarily find, correct and self-disclose Clean Air Act violations. This can result in timely and cost-effective CAA compliance.

The Program was designed with an emphasis on correcting excess emissions from storage tanks and vapor control systems related to operation, maintenance, and/or design issues at oil and natural gas exploration and production facilities. The need for the Program was due to recurring deficiencies found at newly acquired upstream oil and gas facilities. Air quality regulatory and permitting deficiencies may not be identified during the due diligence process used by operators acquiring properties. The major air quality deficiency of concern is inadequate vent gas vapor control systems.

The EPA will not impose civil penalties for violations that are discovered, disclosed and corrected New Owners provided they fulfill all obligations of the Oil and Natural Gas Exploration and Production Facilities New Owner Audit Program Agreement.

This program is separate from the EPA’s Audit Policy (also called New Owner Audit Policy). The Audit Policy program is not discussed here. The Audit Policy program includes:

Web-based system called eDisclosure to submit and process violations disclosed to EPA under its self-disclosure policies
Online list of voluntary programs referred to as State Audit Privilege and Immunity Laws & Self-Disclosure Laws and Policies at: LINK

Program Action Items

Notify EPA of interest in using the Audit Program within nine months following the date of acquisition.
Supply a list of facilities.
Conduct an audit of air quality regulatory compliance for included facilities.
Submit audit report findings to EPA.
Submit a schedule for correcting violations.
Correct violations within required timeframe.
Submit progress and final reports to EPA.

Corrective Actions

For violations found during the audit, the Program lists the following schedule:

Correct vapor control system violations (Appendix B of the Program Agreement) within 180-day timeframe.
Correct non-vapor control system violations within 60 days of discovery. Extensions are available if requested.

Existing Noncompliance at Newly-Acquired Facilities

EPA may not enter into an Agreement if the EPA or a State has already discovered Clean Air Act noncompliance at newly-acquired facilities. This includes ongoing enforcement actions for violations at the newly-acquired facilities.

Need for Expanded Acquisition Due Diligence Audits

Most acquisitions of oil and gas facilities include a due diligence audit of the properties. This can be completed by the seller, buyer or both. These typically include a Phase 1 Environmental Site Assessment. using the EPA accepted standard for Phase I ESAs is ASTM E1527-13: Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. ASTM E1527-13 does not include requirements to determine air quality regulatory compliance for the properties.

New owners should include in their due diligence audit a complete examination of compliance with the federal and State applicable statutory, regulatory and air permitting requirements. This can be used to identify deficiencies and take needed corrective actions prior to the sale/transfer occurs or to use as a basis to use the New Owner Audit Program.

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.