Air Quality State Implementation Plans; Approvals and Promulgations: Pennsylvania; Oil and Natural Gas Control Measures for 2008 and 2015 Ozone National Ambient Air Quality[...]

Air Plan Approval; Pennsylvania; Oil and Natural Gas Control Measures for 2008 and 2015 Ozone National Ambient Air Quality Standards

Supplementary Information

On December 12, 2022, the Pennsylvania Department of Environmental Protection (PADEP) submitted a revision to its SIP establishing RACT requirements for the 2008 and 2015 ozone NAAQS to control VOC emissions from sources covered by EPA's 2016 CTG for the oil and gas industry. On September 8, 2023, the Allegheny County Health Department (ACHD) submitted a revision to the Allegheny County SIP incorporating by reference (IBR) the aforementioned Pennsylvania regulations with minor modifications to Pennsylvania's regulations in order to refer to offices, officers, and make proper cross references to the existing Allegheny County regulations and EPA-approved SIP.

I. Background

A. Final Control Techniques Guidelines for the Oil and Natural Gas Industry

On October 27, 2016, EPA published in the Federal Register the "Final Control Techniques Guidelines for the Oil and Natural Gas Industry" (EPA's 2016 Oil and Gas CTG) (81 FR 74798). ⁽¹⁾ EPA's 2016 Oil and Gas CTG provided information to state, local, and Tribal air agencies to assist them in determining RACT for VOC emissions from select oil and natural gas industry emission sources. CAA section 182(b)(2)(A) and (B) requires that for ozone nonattainment areas classified as Moderate or above, states must revise their SIPs to include provisions to implement RACT for each category of VOC sources covered by a CTG document. CAA section 184(b)(1)(B) extends this RACT obligation to all areas of states within the Ozone Transport Region (OTR). EPA classifies nonattainment areas based on the severity of their ozone problem. Nonattainment areas fall into five categories: Marginal, Moderate, Serious, Severe, and Extreme. The Pennsylvania portion of the Philadelphia-Wilmington-Atlantic City, PA-NJ-MD-DE area is classified as Marginal nonattainment for the 2008 ozone standard, and as Moderate nonattainment for the 2015 ozone standard. The Allentown-Bethlehem-Easton, Lancaster, Pittsburgh-Beaver Valley, ⁽²⁾ and Reading areas are classified as Marginal nonattainment for the 2008 ozone standard, and attainment for the 2015 ozone standard. ⁽³⁾ Pennsylvania, which includes Allegheny County, is a State within the OTR. See CAA section 184. States subject to RACT requirements are required to adopt controls that represent reasonably available control technology for sources covered by CTGs either via the adoption of regulations, or by issuance of single source orders or permits that specify what the source is required to do to meet RACT. See CAA section 184(b)(1). PADEP, on behalf of the City of Philadelphia, Department of Public Health, Air Management Services (AMS), previously submitted a negative declaration, which EPA approved, stating that Philadelphia County contained no source categories covered by the 1983 Oil and Gas CTG as part of its SIP revision to address the RACT requirements for the 2008 Ozone national ambient air quality standard. ⁽⁴⁾

B. Findings of Failure To Submit

On November 16, 2020, and December 16, 2021, ⁽⁵⁾ EPA issued Findings of Failure to Submit (FFS) which found that certain states, including Pennsylvania, failed to submit SIP revisions in a timely manner to satisfy the CAA's RACT requirement for either, or both of, the 2008 and 2015 Ozone NAAQS, to implement RACT for categories of sources addressed by the EPA's 2016 Oil and Gas CTG. These findings of failure to submit each established a 24-month deadline for EPA to either approve SIP revisions or finalize Federal implementation plans (FIPs) to implement RACT level controls for the categories of sources addressed in the CTG. These actions also established timelines for the implementation of two mandatory sanctions that would begin if the named states did not submit complete SIP revisions to address the CTG: (1) eighteen months after the effective date of these findings, a 2-to-1 offset ratio for the nonattainment new source review (NSR) permitting program would go into effect, such that for every unit of VOC or Nitrogen Oxides (NO _X ) emissions a new or modified source will contribute to the nonattainment area or OTR state, two units must be reduced; and (2) six months after the date of offset sanctions, Federal highway funding would be withheld in nonattainment areas. See 85 FR 72963 at 72965, November 16, 2020. ⁽⁶⁾ Pennsylvania did not submit a SIP revision to EPA prior to June 16, 2022, so the offset sanctions identified in CAA section 179(b)(2) began June 16, 2022.

On December 12, 2022, PADEP submitted a SIP revision to implement RACT-level controls on categories of sources addressed by the EPA's 2016 Oil and Gas CTG to fulfill obligations associated with the 2008 and 2015 ozone NAAQS. ⁽⁷⁾ On September 8, 2023, PADEP submitted a SIP revision on behalf of the ACHD  ⁽⁸⁾ which incorporated by reference, with minor changes, Pennsylvania's regulations implementing RACT controls for sources covered by EPA's 2016 Oil and Gas CTG for both the 2008 and 2015 ozone NAAQS. ACHD submitted this revision so that regulations at the county level could be consistent with regulations at the State level and in Pennsylvania's approved SIP. Except for minor modifications, Allegheny County's regulation is identical to the Pennsylvania regulations addressing EPA's 2016 Oil and Gas CTG. Therefore, EPA's analysis of Pennsylvania's Oil and Gas regulation is applicable to ACHD's regulation. ACHD's minor revisions to the Pennsylvania regulations change cross references from Pennsylvania's regulations to ACHD's regulations and substitute Allegheny County offices and officials for state-level offices and officials referenced in the Pennsylvania regulation. As such, ACHD relied upon PADEP's RACT analysis and determinations to support its regulations. Therefore, references to PADEP's analysis below also apply to ACHD's SIP revision.

EPA evaluated Pennsylvania's December 12, 2022 SIP submittal and determined via a December 14, 2022 letter to PADEP that it was administratively complete. This completeness determination rescinded the offset sanctions that took effect on June 16, 2022 as a result of EPA's November 16, 2020 FFS and prevented the imposition of Federal highway sanctions that would have otherwise taken effect on December 16, 2022 as a result of EPA's 2020 FFS. The same completeness determination also stopped the imposition of sanctions that could have resulted from EPA's December 16, 2021 FFS for Pennsylvania's failure to submit a SIP revision for the 2015 ozone NAAQS addressing the EPA's 2016 Oil and Gas CTG.

Finally, EPA's long-standing definition of RACT is "the lowest emission limit that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility."  ⁽⁹⁾

II. Summary of Pennsylvania and Allegheny County's SIP Revision and EPA's Analysis

Pennsylvania's and Allegheny County's SIP submissions included two separate sets of nearly identical regulations for two types of oil and natural gas sources as defined by Pennsylvania and Allegheny County: "conventional" oil and gas sources, and "unconventional" oil and gas sources. EPA's 2016 Oil and Gas CTG does not distinguish between the two types of sources. As defined by Pennsylvania, a conventional gas well is located both above and below the Elk Sandstone and yields gas or oil from a conventional formation in age. Pennsylvania defines an unconventional well as a well that is drilled into an unconventional formation, which is a geological shale formation located beneath the Elk Sandstone or its geologic equivalent and in which natural gas production is typically limited to horizontal or vertical well bores that have been stimulated by hydraulic fracturing.

Despite being separate, both regulations (Regulation #7-544, entitled "Control of VOC Emissions from Conventional Oil and Natural Gas Sources," and Regulation #7-580, entitled "Control of VOC Emissions from Unconventional Oil and Natural Gas Sources,")  ⁽¹⁰⁾ are nearly identical and have no technical differences. ACHD is incorporating by reference the requirements of regulations 7-544 and 7-580 into Allegheny County's regulations. ⁽¹¹⁾

Regulation #7-544 amends 25 Pennsylvania Code (Pa. Code) chapter 129 by adding provisions (sections 129.131-129.140) imposing RACT-level controls for VOC emissions from certain sources within "conventional" oil and natural gas operations, including recordkeeping and reporting requirements. Regulation #7-580 amends 25 Pa. Code Chapters 121 and 129 by adding provisions (sections 129.121-129.130) imposing RACT-level VOC emissions controls for certain sources in "unconventional" oil and natural gas operations, including recordkeeping and reporting requirements. Both sets of regulations apply to similar sources of VOC emissions, including pneumatic controllers, diaphragm pumps, compressors, fugitive emission components, and storage vessels within certain areas.

EPA has reviewed Pennsylvania's and Allegheny County's SIP submissions containing regulations establishing RACT requirements for categories of sources identified in EPA's 2016 Oil and Gas CTG for both the 2008 and 2015 Ozone NAAQS. EPA's technical support document (TSD), which is in the docket for this action, provides more detail concerning EPA's review of Pennsylvania's regulations. Table 1 in the TSD lists the sources covered by EPA's 2016 Oil and Gas CTG and Pennsylvania's regulations, compares the RACT recommendations for sources in EPA's CTG to Pennsylvania's (and Allegheny County's) SIP requirements for each source category, and sets forth Pennsylvania's consideration of all available information as to whether these requirements constitute RACT. The following paragraphs summarize Pennsylvania's (and ACHD's) RACT regulations, analysis, and determinations.

Pennsylvania's Oil and Gas regulations address all of the sources covered by EPA's 2016 Oil and Gas CTG, as required by section 182(b)(2)(A) and (B) and section 184(b)(1)(B) of the CAA. These include storage vessels, pneumatic controllers, pneumatic pumps, compressors (reciprocating and centrifugal), equipment leaks, and fugitive emissions. Pennsylvania has also chosen to regulate certain individual reciprocating compressors at well sites, which is not a source covered by the 2016 Oil and Gas CTG, and has included these controls as part of the SIP revision. EPA is therefore proposing to approve these controls for individual reciprocating compressors at well sites as SIP strengthening measures.

For the sources covered by both the CTG and Pennsylvania's regulations, PADEP largely determined that the control techniques or methods and levels of emission control required by the 2016 Oil and Gas CTG were technologically feasible for Pennsylvania's sources, and EPA is proposing to agree. See Table 1 in EPA's TSD. In summary, Pennsylvania's regulations establish VOC emission limitations and other requirements for natural gas-driven continuous bleed pneumatic controllers, natural gas-driven diaphragm pumps, and centrifugal compressors that are similar to the RACT recommendations in the 2016 Oil and Gas CTG. For storage vessels and fugitive emissions components, Pennsylvania's regulations go beyond the CTG recommendations in certain ways. For storage vessels, Pennsylvania requires vessels with a potential to emit (PTE) 2.7 tons per year (tpy) of VOCs to be controlled to a 95% or greater by weight degree, while the CTG recommends 95% control for storage vessels with a PTE equal to or greater than six tpy or no control for those maintaining actual emissions below four tpy. See Table 1 in EPA's TSD. PADEP determined that a 2.7 tpy VOC emission threshold for storage vessels is RACT, as it is both technologically and economically feasible for both potential to emit and actual emissions from all covered storage vessels. For fugitive emissions, Pennsylvania's regulations address the same "affected sources" as EPA's CTG, i.e., leaks from components in VOC service at natural gas processing plants, fugitive emissions from oil and gas well sites meeting certain production criteria, and fugitive emissions from individual gathering and boosting stations located between the wellhead and transfer to the natural gas transmission or storage segment or oil pipeline. For natural gas processing plants, Pennsylvania requires following the same leak detection and repair (LDAR) requirements in 40 Code of Federal Regulations (CFR) part 60, subpart VVa that the CTG recommends, resulting in quarterly instrument LDAR inspections and monthly auditory, visual and olfactory (AVO) inspections. In addition, for individual well sites having wells with a gas-to-oil ratio (GOR) ≥300 that produce, on average, >15 barrel of oil equivalents (BOE) per well per day, the 2016 Oil and Gas CTG requires semi-annual Optical Gas Imaging (OGI) or Method 21 monitoring for fugitive emissions (leaks). Pennsylvania's regulations allow the same methods of leak detection (Method 21 or OGI) and other methods approved by PADEP. For well sites with a GOR equal to or greater than 300, Pennsylvania requires that one well produce 15 BOE per day and one other well produce 5 BOE per day to trigger annual instrument LDAR monitoring and monthly AVO monitoring. In addition, for well sites with a GOR equal to or greater than 300 with average production of 15 BOE or more per day and one well producing 15 BOE or more per day, the owner must conduct quarterly instrument LDAR monitoring and monthly AVO inspections. Thus, it appears that Pennsylvania is requiring some type of monitoring both more frequently and at more well sites than recommended by the 2016 Oil and Gas CTG in many cases.

PADEP also performed economic feasibility analyses for each individual source covered by the CTG recommendations. Pennsylvania's Regulatory Review Act (RRA)  ⁽¹²⁾ requires that every regulation be reviewed by the Independent Regulatory Review Commission (IRRC), and that the State agency submit to the IRRC a regulatory analysis form (RAF) answering certain questions, which include identifying the financial, economic and social impact of the regulation on, among other entities, individuals, small businesses, and private and public organizations. 71 Pennsylvania Statutes (P.S.) § 745.5(a)(10). PADEP's RAFs analyze the cost and savings of implementing their oil and gas regulations for each source covered by the regulations. In general, to determine whether a specific air pollution control technology was economically feasible as RACT, PADEP set a cost-effectiveness benchmark in terms of the annualized costs of each control per ton of VOC emissions removed by that control. PADEP adjusted the cost benchmarks it used in previous RACT rulemakings of $5,500 per ton of VOC emissions removed, by multiplying by the Consumer Price Index differential between 2014 and 2021, to arrive at a 2021 cost effective benchmark of $6,600 per ton of VOC emissions removed.

EPA's TSD summarizes, in Table 4, PADEP's cost analysis in the RAFs for each regulated source controlled by Pennsylvania's regulations. ⁽¹³⁾ PADEP performed a separate cost analysis for each regulated source, and a separate cost analysis for these sources in the conventional and unconventional oil and gas industry. PADEP's analyses showed that the cost per ton of VOC reduced for most sources would not exceed the $6,600 per ton economically feasible benchmark. However, for some sources, such as fugitive emissions from well sites without existing LDAR programs and well sites that would have to implement quarterly LDAR programs, the cost per ton of VOC reduced would exceed $6,600. PADEP still found these to be cost effective. PADEP also identified one gathering or boosting station in the conventional industry with an annual LDAR program which would have to implement a quarterly program, at a cost exceeding $6,600 per ton of VOC, but also found this to be cost effective. PADEP did not find that any that new controls or requirements were economically infeasible, and in some cases required controls notwithstanding the cost per ton exceeding the $6,600 cost per ton benchmark. PADEP can select differing economic feasibility benchmarks for different source categories if it elects to do so. EPA believes that PADEP has performed a thorough economic feasibility analysis and has justified the controls required by its regulations as economically feasible for RACT.

PADEP's oil and gas regulations also contain requirements for testing, recordkeeping, and reporting of information to PADEP so that compliance with the regulatory requirements can be tracked. Table 2 of EPA's TSD outlines these requirements.

PADEP also compared their regulations to oil and gas regulations adopted by the California Air Resources Board (CARB), South Coast Air Quality Management District (SCAQMD), San Joaquin Valley Air Pollution Control District (SJVAPCD), Colorado Department Of Public Health And Environment (CDPHE), Montana Department Of Environmental Quality (MDEQ), New Mexico Environment Department (NMED), and the New York State Department Of Environmental Conservation (NYDEC). ⁽¹⁴⁾ Pennsylvania determined its controls were in some cases both more stringent and less stringent than these other states' and air pollution control agencies' requirements, but Pennsylvania's oil and gas regulations are not an outlier among other jurisdictions' regulations for the same sources. Ultimately Pennsylvania did not change any of its required controls based on this comparison because the State determined its requirements comprised what was economically and technologically feasible in Pennsylvania. Table 3 in EPA's TSD describes PADEP's findings regarding its review of these other states' and air pollution control districts' control requirements and section V in EPAs' TSD documents PADEP's approach and reasoning for comparisons. EPA has reviewed this analysis as part of the Agency's proposed determination that PADEP's submitted SIP revision comprises RACT for sources covered by the 2016 Oil and Gas CTG.

III. Proposed Action

EPA is proposing to approve Pennsylvania's December 12, 2022 SIP submittal and Allegheny County's September 8, 2023 SIP submittal as satisfying the CAA requirement to implement RACT for each category of VOC sources covered by EPA's 2016 Oil and Gas CTG, as required by CAA section 182(b)(1)(B) for Moderate ozone nonattainment areas, and also for any VOC sources covered by the EPA 2016 Oil and Gas CTG for states in the Ozone Transport Region, as required by CAA section 184(b)(1)(B), for both the 2008 and 2015 ozone NAAQS.

IV. Incorporation by Reference

In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference Pennsylvania's amendments made to 25 Pa. Code Chapter 121 and 129 (relating to general provisions; and standards for sources), and article XXI as described in section II of this preamble. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region III Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

V. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:

• Is not a "significant regulatory action" subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and,

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA.

In addition, this proposed rulemaking, pertaining to Pennsylvania and Allegheny County's Oil and Natural Gas Control Measures for the 2008 and 2015 Ozone NAAQS, does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on Tribal governments or preempt Tribal law.

Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address "disproportionately high and adverse human health or environmental effects" of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as "the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies." EPA further defines the term fair treatment to mean that "no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies."

PADEP and Allegheny County did not evaluate environmental justice considerations as part of its SIP submittals; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

[FR Doc. 2024-13972 Filed 6-27-24; 8:45 am]

BILLING CODE 6560-50-P

⁽¹⁾ www.epa.gov/sites/default/files/2016-10/documents/2016-ctg-oil-and-gas.pdf .

⁽²⁾ www.epa.gov/green-book/green-book-8-hour-ozone-2008-area-information .

⁽³⁾ www.epa.gov/green-book/green-book-8-hour-ozone-2015-area-information .

⁽⁴⁾  The final rule action satisfying Philadelphia's VOC RACT requirements for source categories covered by CTGs for the 2008 Ozone NAAQS was published on October 24, 2019, effective November 25, 2019 (84 FR 56946).

⁽⁵⁾  The finding of failure to submit for the EPA 2016 Oil and Gas CTG for the 2008 NAAQS was issued and published on November 16, 2020 (85 FR 72963), with an effective date of December 16, 2020, and for the 2015 NAAQS on December 16, 2021 (86 FR 71385), with an effective date of January 18, 2022.

⁽⁶⁾  Findings of Failure To Submit State Implementation Plan Revisions in Response to the EPA 2016 Oil and Natural Gas Industry Control Techniques Guidelines for the 2008 Ozone National Ambient Air Quality Standards (NAAQS) and for States in the Ozone Transport Region, 85 FR 72963 (November 16, 2020).

⁽⁷⁾  PADEP's SIP submission is located in the docket for this proposed rulemaking and can be found under Docket ID Number EPA-R03-OAR-2023-0300 at www.regulations.gov .

⁽⁸⁾  Article XXI Air Pollution Control, ACHD rules and regulations, www.alleghenycounty.us/files/assets/county/v/1/services/health/documents/air-quality/enforcement/regulations/article-21-air-pollution-control.pdf . ACHD's SIP submission is located in the docket for this proposed rulemaking and can be found under Docket ID Number EPA-R03-OAR-2023-0300 at www.regulations.gov .

⁽⁹⁾  See Memorandum, dated December 9, 1976, from Roger Strelow, EPA, entitled "Guidance for determining Acceptability of SIP Regulations in Non-attainment Areas," available at www3.epa.gov/ttn/naaqs/aqmguide/collection/cp2/19761209_strelow_ract.pdf .

⁽¹⁰⁾  Both proposed regulations can be found in the Pennsylvania Bulletin at 52 Pa. B 7635, and 52 Pa. B. 7587 (December 10, 2022), at www.pacodeandbulletin.gov/Display/pabull?file=/secure/pabulletin/data/vol52/52-50/1925.html&d=reduce (conventional) and www.pacodeandbulletin.gov/Display/pabull?file=/secure/pabulletin/data/vol52/52-50/1924.html&d=reduce (unconventional) .

⁽¹¹⁾  The ACHD Rules and Regulations in Article XXI, Air Pollution Controls, are amended. The SIP revision adds § 2105.87, "Control of VOC Emissions from Unconventional and Conventional Oil and Natural Gas Industry Sources," to Article XXI. Section 2105.87 IBRs PADEP's final regulations, which are found at 25 Pa. Code 129.121-129.130 (unconventional sources) and 25 Pa. Code 129.131-129.140 (conventional sources).

⁽¹²⁾  The Regulatory Review Act is found at 71 P.S. sections 745.1-745.15.

⁽¹³⁾  Given the short period of time between Pennsylvania's consideration of the economic and technological feasibility of their regulations (November 2022) and Allegheny County's incorporation by reference of those regulations (September 2023), it is unlikely that the economic or technological considerations changed significantly enough to require a new analysis of those elements of RACT.

⁽¹⁴⁾  See [15-28] of the conventional RAF and [13-25] of the unconventional RAF for PADEP's analysis.