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2019-10-28
Industry gossip- Trends to watch out for in 2020
2019-10-28
2019-10-28
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The EPA or Environmental Protection Agency has recently proposed to update the national standards for the gas and oil industry. The main focus of these updates is to streamline the regulations by removing duplication. It is expected that this move would increase efficiency and reduce the costs of compliance for producers in the millions. At the same time, the proposal aims to retain necessary regulations for maintaining environmental and health quality.

The current proposal reflects the efforts of EPA’s monitoring of the performance standards in the gas and oil industry since 2016. The purpose of changes in regulations was to encourage energy independence in the country along with dynamic growth in this sector. According to Executive Order number 13783, agencies are compelled to monitor the current regulations and review them to reduce any burden placed on the economy or environment due to the use of local energy resources such as gas and oil.



EPA Impact Analysis

According to the impact analysis carried out by EPA, implementing the amendments proposed by it can help the gas and oil industry save up to USD 19 million each year. When this is extrapolated to 2025, the savings can go up to USD 123 million.

Andrew Wheeler who is an administrator at EPA states that the recent proposal is aimed at meeting the requirements of the executive order promoted by President Trump. The result is that excessive bureaucracy and regulatory barriers are removed from the industry. Since methane is a critical compound in the industry as well as in the economic growth, there is a dire need to increase the efficiency of its use by reducing any current leaks and creating more opportunities for its productive use. Methane emissions have dropped by almost 15% since 1990 across the country while the production of natural gas has nearly doubled. The purpose of any regulations should be the promotion of innovation rather than its inhibition.

Currently, EPA is working on two proposed actions aimed at minimizing regulatory procedures in the industry. The first proposal focuses on the removal of regulation from storage and transmission sources in the industry. The proposal would increase efficiency in the use of such devices as pneumatic controllers and compressor stations. Up until recently, these devices were included in the 2016 ruling, which did not produce any benefits for the industry. It was not possible for the agency to collect any meaningful data about transmission and storage sources as to the effect of their emissions on the environment or air pollution levels.

As part of the proposal, limits on methane production would be removed, including the processing industry as well. However, any compounds that contribute to the formation of ozone would continue to work under the current limits. The regulations would apply to gas processing plants, pneumatic controllers, storage sources and pumps. When VOC emissions are reduced, it also leads to reduced methane levels, which is why there is no need to establish a separate ceiling for methane emissions.

EPA’s alternative proposal is to remove the limitations on methane emission while retaining the limitations on other sources in both the storage and transmission sectors of the oil and gas industry.

Additionally, EPA is working on alternative ways to interpret its legal powers to monitor and control air pollutants as part of the Clean Air Act, particularly Section 111 of the law.



Conclusion

These changes in regulations come on the back of a technical action back in September 2018 according to which a proposal was made to bring about improvements in the implementation process, mainly by eliminating duplication of processes and requirements, as well as reducing excessive burdens on local producers. The comments received in response to these proposals are being currently reviewed by the EPA and a final report is expected in the next few months.

It is expected that the EPA will accept comments for 2 months after the publication of the proposal while also conducting a hearing. The details for these have not yet been announced.

The EPA or Environmental Protection Agency has recently proposed to update the national standards for the gas and oil industry. The main focus of these updates is to streamline the regulations by removing duplication. It is expected that this move would increase efficiency and reduce the costs of compliance for producers in the millions. At the same time, the proposal aims to retain necessary regulations for maintaining environmental and health quality.

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