Shale oil and natural gas has boomed in the United States—and throughout North America—over the past decade. The discovery of new reserves, and the emergence of technologies to access them, has changed the energy landscape of the world. Even though market forces continue to complicate near-term development prospects, with these newfound internal resources and capabilities the U. S. is poised to become a net exporter of natural gas by 2017. 

 

This boom presents challenges on many fronts: human capital, industry know-how, the availability and allocation of operational assets, geographical obstacles, and a growing concern over our air and water resources. 

 

The EPA, along with Texas, New Mexico, Ohio, and North Dakota, have embarked upon fierce rule-making and enforcement initiatives targeting oil and gas completions, production, and transportation. The actions of these regulatory agencies have in many cases created significant hurdles to developing our new energy fields. In their efforts to regulate an industry that’s just finding its footing, state and federal regulators have propagated rules that in some cases may not be economically or technologically feasible.

Vapor Point understands many of the obstacles our customers face in this rapidly evolving environment. One way we serve our oil and gas partners is to scout out the middle ground, to interpret a rational approach to these new challenges so that operators and regulators alike can focus on what is achievable. We can’t claim to know or understand all of potential impacts these new federal and state regulations will bring, but together we can solve many of these challenges with foresight and ingenuity. 

 

Even in these early days of this new energy boom, Vapor Point has found numerous ways to satisfy critical needs for both VOC and H2S controls: 

 

  • Flowback controls (green completions) 

  • Crude/condensate/water-loading operations 

  • Flash emissions on production tanks 

  • Process equipment on flash controls 

  • BTEX unit optimization (glycol dehydrator) 

  • Tail gas recovery 

  • Reduction of SOx at the flare stack 

 

The EPA and New Source Performance Standards

On April 12, 2012, EPA issued Subpart 0000 (commonly called “Quad 0”) of the New Source Performance Standards (NSPS). Quad 0 is an initiative that will regulate the entire domestic oil and gas industry. These new regulations are much more stringent that the typical requirements issued by the individual states. Though Quad 0 covers many aspects of the upstream market, there are two areas in particular where Vapor Point is well positioned to help you achieve and maintain air compliance:

  • Production tank emissions: Any tank that generates 6 tons or more of VOCs per year must reduce those emissions by a minimum of 95 percent, using either a flare or vapor recovery unit. This rule applies to all production tanks put in service after August 23, 2011, and was scheduled to be phased in by October 1, 2013.

  • Green completions: When a well is being flowed back prior to its actual production—or when being reworked —the flowback contains VOCs that are bound up in the natural gas. Current accepted practice is to flare the gas until the production facilities are in place. The new EPA requirements for green completions—phased in by January 1, 2015—require all production from new hydraulically fractured or refractured natural gas wells to send the natural gas generated to a sales line, a flare pit or a vapor recovery device.

 

TCEQ: Texas Commission on Environmental Quality

Amongst the major players in the new oil and gas boom, Texas is in many ways leading the way, including their regulatory initiatives. The Texas Commission on Environmental Quality (TCEQ) already has in place robust regulations for the downstream refinery and petrochemical markets. Because TCEQ has been tasked with the oversight of every industry that falls under the Clean Air Act, they are poised to expand more rigorous regulation into the oil and gas and pipeline markets as well. 

 

Permit and reporting requirements for pipelines and for oil and gas are substantially different from the downstream petrochemical and refining markets. Upstream and midstream operators must comply with annual tonnage limits for total VOCs generated on a typical oil and gas production facility, as well as hourly limits for propane emissions.

 

Permits apply to all stationary facilities—or groups of facilities —associated with the production, conditioning, processing, and pipeline transfer of fluids or gases found in geologic formations on or beneath the earth’s surface. These fluids and gases include, but are not limited to, crude oil, natural gas, condensate, and produced water.

 

There are four types of permits issued by TCEQ:

  • De minimis: This permit is issued for production sites that consist only of a wellhead.

  • Permit By Rule: A Permit By Rule allows up to 25 tons of total VOCs annually to be emitted from all sources on a production or gathering facility. This is the permit type that most oil and gas operators seek for their operating units.

  • Standard Permit: The Standard Permit allows from 26 up to a maximum of 100 tons of total VOCs annually to be emitted from all sources on a production or gathering facility.

  • New Source Review: If a facility exceeds the 100-ton VOC annual limit, it must operate under the New Source Review guidelines, which are stipulated in EPA’s Title V provisions. Title V already defines the permit requirements for the downstream market.

 

There are numerous potential VOC emission sources in the oil and gas industries. Here are several of more typical VOC emitters:

  • Extended flowbacks

  • Trailer vent emissions from oil and condensate transports during truck loading

  • Flash emissions off of production tanks

  • Off-gas emissions from process equipment: two-phase and three-phase separators, heater treaters, crude stabilizers, glycol dehydrators, BTEX units, and others

 

TCEQ will require upstream operators to reduce VOC emissions by employing a Best Available Control Technology (BACT), as defined and approved by TCEQ. TCEQ has identified four categories of BACT:

  • Flares, which must be one of three engineered types:

    • Enclosed (typically referred to as a waste-gas flare)

    • Steam assisted

    • Air assisted

  • Thermal oxidizers

  • Mechanical vapor recovery units

  • Liquid vapor recovery units (Vapor Point’s BACT category)

 

The reduction of VOC emissions is measured by control efficiency. The following are TCEQ’s permitted control efficiencies for the various BACTs:

  • Flares: 98% (can claim up to 99.9% based upon design and monitoring requirements)

  • Thermal oxidizers: 90% (can claim up to 99.9% based upon design and monitoring requirements)

  • Mechanical vapor recovery units: 95–98% (can claim up to 100% based upon design and monitoring requirements)

  • Liquid vapor recovery units: 95–98% for a single unit. Using dual scrubbers—a common configuration with high-contaminant vapor streams—an operator can claim up to 99.96% control efficiency.

 

Each of these BACTs fills an important role in air compliance. When it comes to economic viability and regulatory compliance, however, there are few situations where traditional control devices can compete with Vapor Point’s patented VaporLock systems.

 

MSS (Maintenance, Start-up, and Shutdown)

MSS is well entrenched in Texas downstream markets, but recently expanded to cover the oil and gas and pipeline markets as well. For the oil and gas industries, older MSS-related regulations applied only to the non-attainment counties that comprise the Barnett Shale. The TCEQ collected information from the upstream and midstream industries to aid in drafting a new statewide MSS rule. The plan became effective January 5, 2014.

 

As you can see, the regulatory environment for both the pipeline and the oil and gas industries has long been in flux, but the new, more stringent air compliance regulations are now in place. Vapor Point wants to be your partner in air compliance. We’re already ahead of the compliance curve, with regulatory expertise, operational skill, and superior air compliance technologies. We’re here for you today, and we’ll be here tomorrow and beyond.

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