[Federal Register Volume 81, Number 107 (Friday, June 3, 2016)]
[Rules and Regulations]
[Pages 35823-35942]
[FR Doc No: 2016-11971]

Vol. 81

Friday,

No. 107

June 3, 2016

Part II

Environmental Protection Agency

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40 CFR Part 60

Oil and Natural Gas Sector: Emission Standards for New, Reconstructed,
and Modified Sources; Final Rule

Federal Register / Vol. 81 , No. 107 / Friday, June 3, 2016 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2010-0505; FRL-9944-75-OAR]
RIN 2060-AS30

Oil and Natural Gas Sector: Emission Standards for New,
Reconstructed, and Modified Sources

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action finalizes amendments to the current new source
performance standards (NSPS) and establishes new standards. Amendments
to the current standards will improve implementation of the current
NSPS. The new standards for the oil and natural gas source category set
standards for both greenhouse gases (GHGs) and volatile organic
compounds (VOC). Except for the implementation improvements, and the
new standards for GHGs, these requirements do not change the
requirements for operations covered by the current standards.

DATES: This final rule is effective on August 2, 2016.
    The incorporation by reference (IBR) of certain publications listed
in the regulations is approved by the Director of the Federal Register
as of August 2, 2016.

ADDRESSES: The Environmental Protection Agency (EPA) has established a
docket for this action under Docket ID No. EPA-HQ-OAR-2010-0505. All
documents in the docket are listed on the http://www.regulations.gov
Web site. Although listed in the index, some information is not
publicly available, e.g., confidential business information (CBI) or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
Internet and will be publicly available only in hard copy form.
Publicly available docket materials are available electronically
through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For further information concerning
this action, contact Ms. Amy Hambrick, Sector Policies and Programs
Division (E143-05), Office of Air Quality Planning and Standards,
Environmental Protection Agency, Research Triangle Park, North Carolina
27711, telephone number:<PHONE_NUMBER>; facsimile number: (919) 541-
3470; email address<EMAIL_ADDRESS>or Ms. Lisa Thompson, Sector
Policies and Programs Division (E143-05), Office of Air Quality
Planning and Standards, Environmental Protection Agency, Research
Triangle Park, North Carolina 27711, telephone number:<PHONE_NUMBER>;
facsimile number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
For other information concerning the EPA's Oil and Natural Gas Sector
regulatory program, contact Mr. Bruce Moore, Sector Policies and
Programs Division (E143-05), Office of Air Quality Planning and
Standards, Environmental Protection Agency, Research Triangle Park,
North Carolina 27711, telephone number:<PHONE_NUMBER>; facsimile
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Outline. The information presented in this
preamble is presented as follows:

I. Preamble Acronyms and Abbreviations
II. General Information
    A. Executive Summary
    B. Does this action apply to me?
    C. Where can I get a copy of this document?
    D. Judicial Review
III. Background
    A. Statutory Background
    B. Regulatory Background
    C. Other Notable Events
    D. Stakeholder Outreach and Public Hearings
    E. Related State and Federal Regulatory Actions
IV. Regulatory Authority
    A. The Oil and Natural Gas Source Category Listing Under CAA
Section 111(b)(1)(A)
    B. Impacts of GHGs, VOC and SO2 Emissions on Public
Health and Welfare
    C. GHGs, VOC and SO2 Emissions From the Oil and
Natural Gas Source Category
    D. Establishing GHG Standards in the Form of Limitations on
Methane Emissions
V. Summary of Final Standards
    A. Control of GHG and VOC Emissions in the Oil and Natural Gas
Source Category--Overview
    B. Centrifugal Compressors
    C. Reciprocating Compressors
    D. Pneumatic Controllers
    E. Pneumatic Pumps
    F. Well Completions
    G. Fugitive Emissions From Well Sites and Compressor Stations
    H. Equipment Leaks at Natural Gas Processing Plants
    I. Liquids Unloading Operations
    J. Recordkeeping and Reporting
    K. Reconsideration Issues Being Addressed
    L. Technical Corrections and Clarifications
    M. Prevention of Significant Deterioration and Title V
Permitting
    N. Final Standards Reflecting Next Generation Compliance and
Rule Effectiveness
VI. Significant Changes Since Proposal
    A. Centrifugal Compressors
    B. Reciprocating Compressors
    C. Pneumatic Controllers
    D. Pneumatic Pumps
    E. Well Completions
    F. Fugitive Emissions From Well Sites and Compressor Stations
    G. Equipment Leaks at Natural Gas Processing Plants
    H. Reconsideration Issues Being Addressed
    I. Technical Corrections and Clarifications
    J. Final Standards Reflecting Next Generation Compliance and
Rule Effectiveness
    K. Provision for Equivalency Determinations
VII. Prevention of Significant Deterioration and Title V Permitting
    A. Overview
    B. Applicability of Tailoring Rule Thresholds Under the PSD
Program
    C. Implications for Title V Program
VIII. Summary of Significant Comments and Responses
    A. Major Comments Concerning Listing of the Oil and Natural Gas
Source Category
    B. Major Comments Concerning EPA's Authority To Establish GHG
Standards in the Form of Limitations on Methane Emissions
    C. Major Comments Concerning Compressors
    D. Major Comments Concerning Pneumatic Controllers
    E. Major Comments Concerning Pneumatic Pumps
    F. Major Comments Concerning Well Completions
    G. Major Comments Concerning Fugitive Emissions From Well Sites
and Compressor Stations
    H. Major Comments Concerning Final Standards Reflecting Next
Generation Compliance and Rule Effectiveness Strategies
IX. Impacts of the Final Amendments
    A. What are the air impacts?
    B. What are the energy impacts?
    C. What are the compliance costs?
    D. What are the economic and employment impacts?
    E. What are the benefits of the final standards?
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act of 1995(UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR Part 51
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations

    K. Congressional Review Act (CRA)

I. Preamble Acronyms and Abbreviations

    Several acronyms and terms are included in this preamble. While
this may not be an exhaustive list, to ease the reading of this
preamble and for reference purposes, the following terms and acronyms
are defined here:

API American Petroleum Institute
bbl Barrel
boe Barrels of Oil Equivalent
BSER Best System of Emissions Reduction
BTEX Benzene, Toluene, Ethylbenzene and Xylenes
CAA Clean Air Act
CBI Confidential Business Information
CFR Code of Federal Regulations
CO2 Eq. Carbon dioxide equivalent
DCO Document Control Officer
EIA Energy Information Administration
EPA Environmental Protection Agency
GHG Greenhouse Gases
GHGRP Greenhouse Gas Reporting Program
GOR Gas to Oil Ratio
HAP Hazardous Air Pollutants
LDAR Leak Detection and Repair
Mcf Thousand Cubic Feet
NEI National Emissions Inventory
NEMS National Energy Modeling System
NESHAP National Emissions Standards for Hazardous Air Pollutants
NSPS New Source Performance Standards
NTTAA National Technology Transfer and Advancement Act of 1995
OAQPS Office of Air Quality Planning and Standards
OGI Optical Gas Imaging
OMB Office of Management and Budget
PRA Paperwork Reduction Act
PTE Potential to Emit
REC Reduced Emissions Completion
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
scf Standard Cubic Feet
scfh Standard Cubic Feet per Hour
scfm Standard Cubic Feet per Minute
SO2 Sulfur Dioxide
tpy Tons per Year
TSD Technical Support Document
TTN Technology Transfer Network
UMRA Unfunded Mandates Reform Act
VCS Voluntary Consensus Standards
VOC Volatile Organic Compounds
VRU Vapor Recovery Unit

II. General Information

A. Executive Summary

1. Purpose of This Regulatory Action
    The Environmental Protection Agency (EPA) proposed amendments to
the New Source Performance Standards (NSPS) at subpart OOOO and
proposed new standards at subpart OOOOa on September 18, 2015 (80 FR
56593). The purpose of this action is to finalize both the amendments
and the new standards with appropriate adjustments after full
consideration of the comments received on the proposal. Prior to
proposal, we pursued a structured engagement process with states and
stakeholders. Prior to that process, we issued draft white papers
addressing a range of technical issues and then solicited comments on
the white papers from expert reviewers and the public.
    These rules are designed to complement other federal actions as
well as state regulations. In particular, the EPA worked closely with
the Department of Interior's Bureau of Land Management (BLM) during
development of this rulemaking in order to avoid conflicts in
requirements between the NSPS and BLM's proposed rulemaking.\1\
Additionally, we evaluated existing state and local programs when
developing these federal standards and attempted, where possible, to
limit potential conflicts with existing state and local requirements.
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    \1\ 81 FR 6616, February 8, 2016, Waste Prevention, Production
Subject to Royalties, and Resource Conservation, Proposed Rule.
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    As discussed at proposal, prior to this final rule, the EPA had
established standards for emissions of VOC and sulfur dioxide
(SO2) for several sources in the source category. In this
action, the EPA finalizes standards at subpart OOOOa, based on our
determination of the best system of emissions reduction (BSER) for
reducing emissions of greenhouse gases (GHGs), specifically methane, as
well as VOC across a variety of additional emission sources in the oil
and natural gas source category (i.e., production, processing,
transmission, and storage). The EPA includes requirements for methane
emissions in this action because methane is one of the six well-mixed
gases in the definition of GHGs and the oil and natural gas source
category is one of the country's largest industrial emitters of
methane. In 2009, the EPA found that by causing or contributing to
climate change, GHGs endanger both the public health and the public
welfare of current and future generations.
    In addition to finalizing standards for VOC and GHGs, the EPA is
finalizing amendments to improve several aspects of the existing
standards at 40 CFR part 60, subpart OOOO related to implementation.
These improvements and the setting of standards for GHGs in the form of
limitations on methane result from reconsideration of certain issues
raised in petitions for reconsideration that were received by the
Administrator on the August 16, 2012, NSPS (77 FR 49490) and on the
September 13, 2013, amendments (78 FR 58416). These implementation
improvements do not change the requirements for operations and
equipment covered by the current standards at subpart OOOO.
2. Summary of 40 CFR Part 60, Subpart OOOOa Major Provisions
    The final requirements include standards for GHG emissions (in the
form of methane emission limitations) and standards for VOC emissions.
The NSPS includes both VOC and GHG emission standards for certain new,
modified, and reconstructed equipment, processes, and activities across
the oil and natural gas source category. These emission sources include
the following:
     Sources that are unregulated under the current NSPS at
subpart OOOO (hydraulically fractured oil well completions, pneumatic
pumps, and fugitive emissions from well sites and compressor stations);
     Sources that are currently regulated at subpart OOOO for
VOC, but not for GHGs (hydraulically fractured gas well completions and
equipment leaks at natural gas processing plants);
     Certain equipment that is used across the source category,
for which the current NSPS at subpart OOOO regulates emissions of VOC
from only a subset (pneumatic controllers, centrifugal compressors, and
reciprocating compressors), with the exception of compressors located
at well sites.
    Table 1 below summarizes these sources and the final standards for
GHGs (in the form of methane limitations) and VOC emissions. See
sections V and VI of this preamble for further discussion.

 Table 1--Summary of BSER and Final Subpart OOOOa Standards for Emission
                                 Sources
------------------------------------------------------------------------
                                                     Final standards of
           Source                     BSER          performance for GHGs
                                                           and VOC
------------------------------------------------------------------------
Wet seal centrifugal          Capture and route to  95 percent
 compressors (except for       a control device.     reduction.
 those located at well
 sites) \2\.
Reciprocating compressors     Regular replacement   Replace the rod
 (except for those located     of rod packing        packing on or
 at well sites) \2\.           (i.e.,                before 26,000 hours
                               approximately every   of operation or 36
                               3 years).             calendar months or
                                                     route emissions
                                                     from the rod
                                                     packing to a
                                                     process through a
                                                     closed vent system
                                                     under negative
                                                     pressure.
Pneumatic controllers at      Instrument air        Zero natural gas
 natural gas processing        systems.              bleed rate.
 plants.
Pneumatic controllers at      Installation of low-  Natural gas bleed
 locations other than          bleed pneumatic       rate no greater
 natural gas processing        controllers.          than 6 standard
 plants.                                             cubic feet per hour
                                                     (scfh).
Pneumatic pumps at natural    Instrument air        Zero natural gas
 gas processing plants.        systems in place of   emissions.
                               natural gas driven
                               pumps.
Pneumatic pumps at well       Route to existing     95 percent control
 sites.                        control device or     if there is an
                               process.              existing control or
                                                     process on site. 95
                                                     percent control not
                                                     required if
                                                    (1) routed to an
                                                     existing control
                                                     that achieves less
                                                     than 95 percent or
                                                    (2) it is
                                                     technically
                                                     infeasible to route
                                                     to the existing
                                                     control device or
                                                     process (non-
                                                     greenfield sites
                                                     only).
Well completions              Combination of        REC in combination
 (subcategory 1: Non-wildcat   Reduced Emission      with a completion
 and non-delineation wells).   Completion (REC)      combustion device;
                               and the use of a      venting in lieu of
                               completion            combustion where
                               combustion device.    combustion would
                                                     present safety
                                                     hazards.
                                                    Initial flowback
                                                     stage: Route to a
                                                     storage vessel or
                                                     completion vessel
                                                     (frac tank, lined
                                                     pit, or other
                                                     vessel) and
                                                     separator.
                                                    Separation flowback
                                                     stage: Route all
                                                     salable gas from
                                                     the separator to a
                                                     flow line or
                                                     collection system,
                                                     re-inject the gas
                                                     into the well or
                                                     another well, use
                                                     the gas as an
                                                     onsite fuel source
                                                     or use for another
                                                     useful purpose that
                                                     a purchased fuel or
                                                     raw material would
                                                     serve. If
                                                     technically
                                                     infeasible to route
                                                     recovered gas as
                                                     specified above,
                                                     recovered gas must
                                                     be combusted. All
                                                     liquids must be
                                                     routed to a storage
                                                     vessel or well
                                                     completion vessel,
                                                     collection system,
                                                     or be re-injected
                                                     into the well or
                                                     another well.
                                                    The operator is
                                                     required to have a
                                                     separator onsite
                                                     during the entire
                                                     flowback period.
Well completions              Use of a completion   The operator is not
 (subcategory 2: Exploratory   combustion device.    required to have a
 and delineation wells and                           separator onsite.
 low pressure wells).                                Either: (1) Route
                                                     all flowback to a
                                                     completion
                                                     combustion device
                                                     with a continuous
                                                     pilot flame; or (2)
                                                     Route all flowback
                                                     into one or more
                                                     well completion
                                                     vessels and
                                                     commence operation
                                                     of a separator
                                                     unless it is
                                                     technically
                                                     infeasible for a
                                                     separator to
                                                     function. Any gas
                                                     present in the
                                                     flowback before the
                                                     separator can
                                                     function is not
                                                     subject to control
                                                     under this section.
                                                     Capture and direct
                                                     recovered gas to a
                                                     completion
                                                     combustion device
                                                     with a continuous
                                                     pilot flame.
                                                    For both options (1)
                                                     and (2), combustion
                                                     is not required in
                                                     conditions that may
                                                     result in a fire
                                                     hazard or
                                                     explosion, or where
                                                     high heat emissions
                                                     from a completion
                                                     combustion device
                                                     may negatively
                                                     impact tundra,
                                                     permafrost or
                                                     waterways.
Fugitive emissions from well  For well sites:       Monitoring and
 sites and compressor          Monitoring and        repair of fugitive
 stations.                     repair based on       emission components
                               semiannual            using OGI with
                               monitoring using      Method 21 as an
                               optical gas imaging   alternative at 500
                               (OGI) \3\.            parts per million
                                                     (ppm).
                              For compressor        A monitoring plan
                               stations:             must be developed
                               Monitoring and        and implemented and
                               repair based on       repair of the
                               quarterly             sources of fugitive
                               monitoring using      emissions must be
                               OGI.                  completed within 30
                                                     days of finding
                                                     fugitive emissions.

Equipment leaks at natural    Leak detection and    Follow requirements
 gas processing plants.        repair at 40 CFR      at NSPS part 60,
                               part 60, subpart      subpart VVa level
                               VVa level of          of control as in
                               control.              the 2012 NSPS.
------------------------------------------------------------------------

    Reconsiderationissues being addressed. As fully detailed in
sections V and VI of this preamble and the Response to Comment (RTC)
document, the EPA granted reconsideration of several issues raised in
the administrative reconsideration petitions submitted on the 2012 NSPS
and subsequent amendments (subpart OOOO). In this final rule, in
addition to the new standards described above, the EPA includes certain
amendments to the 2012 NSPS at subpart OOOO based on reconsideration of
those issues. The amendments to the subpart OOOO requirements are
effective on August 2, 2016 and, therefore, do not affect compliance
activities completed prior to that date.
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    \2\ See sections VI and VIII of this preamble for detailed
discussion on emission sources.
    \3\ The final fugitive standards apply to low production wells.
For the reasons discussed in section VI of the preamble, we are not
finalizing the proposed exemption of low production wells from these
requirements.
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    These provisions are: Requirements for storage vessel control
device monitoring and testing; initial compliance requirements for a
bypass device that could divert an emission stream away from a control
device; recordkeeping requirements for repair logs for control devices
failing a visible emissions test; clarification of the due date for the
initial annual report; flare design and operation standards; leak
detection and repair (LDAR) for open-ended valves or lines; the
compliance period for LDAR for newly affected units; exemption to the
notification requirement for reconstruction; disposal of carbon from
control devices; the definition of capital expenditure; and continuous
control device monitoring requirements for storage vessels and
centrifugal compressor affected facilities. We are finalizing changes
to address these issues to clarify the current NSPS requirements,
improve implementation, and update procedures.
3. Costs and Benefits
    The EPA has carefully reviewed the comments and additional data
submitted on the costs and benefits associated with this rule. Our
conclusion and responses are summarized in section IX of the preamble
and addressed in greater detail in the Regulatory Impact Analysis (RIA)
and RTC. The measures finalized in this action achieve reductions of
GHG and VOC emissions through direct regulation and reduction of
hazardous air pollutant (HAP) emissions as a co-benefit of reducing VOC
emissions. The data show that these are cost-effective measures to
reduce emissions and the rule's benefits outweigh these costs.
    The EPA has estimated emissions reductions, benefits, and costs for
2 years of analysis: 2020 and 2025. Therefore, the emissions
reductions, benefits, and costs by 2020 and 2025 (i.e., including all
emissions reductions, costs, and benefits in all years from 2016 to
2025) would be potentially significantly greater than the estimated
emissions reductions, benefits, and costs provided within this rule.
Actions taken to comply with the final NSPS are anticipated to prevent
significant new emissions in 2020, including 300,000 tons of methane;
150,000 tons of VOC; and 1,900 tons of HAP. The emission reductions
anticipated in 2025 are 510,000 tons of methane; 210,000 tons of VOC;
and 3,900 tons of HAP. Using a 100-year global warming potential (GWP)
of 25, the carbon dioxide-equivalent (CO2 Eq.) methane
emission reductions are estimated to be 6.9 million metric tons
CO2 Eq. in 2020 and 11 million metric tons CO2
Eq. in 2025. The methane-related monetized climate benefits are
estimated to be $360 million in 2020 and $690 million in 2025 using a
3-percent discount rate (model average).\4\
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    \4\ We estimate methane benefits associated with four different
values of a 1 ton methane reduction (model average at 2.5-percent
discount rate, 3 percent, and 5 percent; 95th percentile at 3
percent). For the purposes of this summary, we present the benefits
associated with the model average at a 3-percent discount rate.
However, we emphasize the importance and value of considering the
full range of social cost of methane values. We provide estimates
based on additional discount rates in preamble section IX and in the
RIA.
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    While the only benefits monetized for this rule are GHG-related
climate benefits from methane reductions, the rule will also yield
benefits from reductions in VOC and HAP emissions and from reductions
in methane as a precursor to global background concentrations of
tropospheric ozone. The EPA was unable to monetize the benefits of VOC
reductions due to the difficulties in modeling the impacts with the
current data available. A detailed discussion of these unquantified
benefits appears in section IX of this preamble, as well as in the RIA
available in the docket.
    Several VOC that are commonly emitted in the oil and natural gas
source category are HAP listed under Clean Air Act (CAA) section
112(b), including benzene, toluene, ethylbenzene and xylenes (this
group is commonly referred to as ``BTEX'') and n-hexane. These
pollutants and any other HAP included in the VOC emissions controlled
under the NSPS, including requirements for additional sources being
finalized in this action, are controlled to the same degree. The co-
benefit HAP reductions for the final measures are discussed in the RIA
and in the technical support document (TSD), which are included in the
public docket for this action.
    The HAP reductions from these standards will be meaningful in local
communities, as members of these communities and other stakeholders
across the country have reported significant concerns to the EPA
regarding potential adverse health effects resulting from exposure to
HAP emitted from oil and natural gas operations. Importantly, these
communities include disadvantaged populations.
    The EPA estimates the total capital cost of the final NSPS will be
$250 million in 2020 and $360 million in 2025. The estimate of total
annualized engineering costs of the final NSPS is $390 million in 2020
and $640 million in 2025 when using a 7-percent discount rate. When
estimated revenues from additional natural gas are included, the
annualized engineering costs of the final NSPS are estimated to be $320
million in 2020 and $530 million in 2025, assuming a wellhead natural
gas price of $4/thousand cubic feet (Mcf). These compliance cost
estimates include revenues from recovered natural gas, as the EPA
estimates that about 16 billion cubic feet in 2020 and 27 billion cubic
feet in 2025 of natural gas will be recovered by implementing the NSPS.
    Considering all the costs and benefits of this rule, including the
revenues from

recovered natural gas that would otherwise be vented, this rule results
in a net benefit. The quantified net benefits (the difference between
monetized benefits and compliance costs) are estimated to be $35
million in 2020 and $170 million in 2025 using a 3-percent discount
rate (model average) for climate benefits in both years.\5\ All dollar
amounts are in 2012 dollars.
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    \5\ Figures may not sum due to rounding.
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B. Does this action apply to me?

    Categories and entities potentially affected by this action
include:

      Table 2--Industrial Source Categories Affected by This Action
------------------------------------------------------------------------
                                                  Examples of regulated
            Category             NAICS code \1\          entities
------------------------------------------------------------------------
Industry.......................          211111  Crude Petroleum and
                                                  Natural Gas
                                                  Extraction.
                                         211112  Natural Gas Liquid
                                                  Extraction.
                                         221210  Natural Gas
                                                  Distribution.
                                         486110  Pipeline Distribution
                                                  of Crude Oil.
                                         486210  Pipeline Transportation
                                                  of Natural Gas.
Federal government.............  ..............  Not affected.
State/local/tribal government..  ..............  Not affected.
------------------------------------------------------------------------
\1\ North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that the EPA is now
aware could potentially be affected by this action. Other types of
entities not listed in the table could also be regulated. To determine
whether your entity is regulated by this action, you should carefully
examine the applicability criteria found in the final rule. If you have
questions regarding the applicability of this action to a particular
entity, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section, your air permitting authority, or your EPA Regional
representative listed in 40 CFR 60.4 (General Provisions).

C. Where can I get a copy of this document?

    In addition to being available in the docket, an electronic copy of
the final action is available on the Internet through the Technology
Transfer Network (TTN) Web site. Following signature by the
Administrator, the EPA will post a copy of this final action at http://www3.epa.gov/airquality/oilandgas/actions.html. The TTN provides
information and technology exchange in various areas of air pollution
control. Additional information is also available at the same Web site.

D. Judicial Review

    Under section 307(b)(1) of the CAA, judicial review of this final
rule is available only by filing a petition for review in the United
States Court of Appeals for the District of Columbia Circuit by August
2, 2016. Moreover, under section 307(b)(2) of the CAA, the requirements
established by this final rule may not be challenged separately in any
civil or criminal proceedings brought by the EPA to enforce these
requirements. Section 307(d)(7)(B) of the CAA further provides that
``[o]nly an objection to a rule or procedure which was raised with
reasonable specificity during the period for public comment (including
any public hearing) may be raised during judicial review.'' This
section also provides a mechanism for the EPA to convene a proceeding
for reconsideration, ``[i]f the person raising an objection can
demonstrate to the EPA that it was impracticable to raise such
objection within [the period for public comment] or if the grounds for
such objection arose after the period for public comment (but within
the time specified for judicial review) and if such objection is of
central relevance to the outcome of the rule.'' Any person seeking to
make such a demonstration to us should submit a Petition for
Reconsideration to the Office of the Administrator, U.S. EPA, Room
3000, EPA WJC, 1200 Pennsylvania Ave. NW., Washington, DC 20460, with a
copy to both the person(s) listed in the preceding FOR FURTHER
INFORMATION CONTACT section, and the Associate General Counsel for the
Air and Radiation Law Office, Office of General Counsel (Mail Code
2344A), U.S. EPA, 1200 Pennsylvania Ave. NW., Washington, DC 20460.

III. Background

A. Statutory Background

    The EPA's authority for this rule is CAA section 111, which
requires the EPA to first establish a list of source categories to be
regulated under that section and then establish emission standards for
new sources in that source category. Specifically, CAA section
111(b)(1)(A) requires that a source category be included on the list
if, ``in [the EPA Administrator's] judgment it causes, or contributes
significantly to, air pollution which may reasonably be anticipated to
endanger public health or welfare.'' This determination is commonly
referred to as an ``endangerment finding'' and that phrase encompasses
both of the ``causes or contributes significantly to'' component and
the ``endanger public health or welfare'' component of the
determination. Once a source category is listed, CAA section
111(b)(1)(B) requires that the EPA propose and then promulgate
``standards of performance'' for new sources in such source category.
Other than the endangerment finding for listing the source category,
CAA section 111(b) gives no direction or enumerated criteria concerning
what constitutes a source category or what emission sources or
pollutants from a given source category should be the subject of
standards. Therefore, as long as the EPA makes the requisite
endangerment finding for the source category to be listed, CAA section
111 leaves the EPA with the authority and discretion to define the
source category, determine the pollutants for which standards should be
developed, and identify the emission sources within the source category
for which standards of performance should be established.
    CAA section 111(a)(1) defines ``a standard of performance'' as ``a
standard for emissions of air pollutants which reflects the degree of
emission limitation achievable through the application of the best
system of emission reduction which (taking into account the cost of
achieving such reduction and any non-air quality health and
environmental impact and energy requirement) the Administrator
determines has been adequately demonstrated.'' This definition makes

clear that the standard of performance must be based on controls that
constitute ``the best system of emission reduction . . . adequately
demonstrated.''
    In determining whether a given system of emission reduction
qualifies as a BSER, CAA section 111(a)(1) requires that the EPA take
into account, among other factors, ``the cost of achieving such
reduction.'' As described in section VIII.A of the proposal
preamble,\6\ in several cases the DC Circuit has elaborated on this
cost factor and formulated the cost standard in various ways, stating
that the EPA may not adopt a standard the cost of which would be
``exorbitant,'' \7\ ``greater than the industry could bear and
survive,'' \8\ ``excessive,'' \9\ or ``unreasonable.'' \10\ For
convenience, in this rulemaking, we use ``reasonableness'' to describe
costs, which is well within the bounds established by this
jurisprudence.
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    \6\ 80 FR 56593, 56616 (September 18, 2015).
    \7\ Lignite Energy Council v. EPA, 198 F.3d 930, 933 (D.C. Cir.
1999).
    \8\ Portland Cement Ass'n v. EPA, 513 F.2d 506, 508 (D.C. Cir.
1975).
    \9\ Sierra Club v. Costle, 657 F.2d 298, 343 (D.C. Cir. 1981).
    \10\ Sierra Club v. Costle, 657 F.2d 298, 343 (D.C. Cir. 1981).
---------------------------------------------------------------------------

    CAA Section 111(a) does not provide specific direction regarding
what metric or metrics to use in considering costs, again affording the
EPA considerable discretion in choosing a means of cost
consideration.\11\ In this rulemaking, we evaluated whether a control
cost is reasonable under a number of approaches that we find
appropriate for assessing the types of controls at issue. Specifically,
we considered a control's cost effectiveness under a ``single pollutant
cost-effectiveness'' approach and a ``multipollutant cost-
effectiveness'' approach.\12\ We also evaluated costs on an industry
basis by assessing the new capital expenditures (compared to overall
capital expenditures) and the annual compliance costs (compared to
overall annual revenue) if the rule were to require such control. For a
detailed discussion of these cost approaches, please see section VIII.A
of the proposal preamble.
---------------------------------------------------------------------------

    \11\ See, e.g., Husqvarna AB v. EPA, 254 F.3d 195, 200 (D.C.
Cir. 2001) (where CAA section 213 does not mandate a specific method
of cost analysis, the EPA may make a reasoned choice as to how to
analyze costs).
    \12\ As discussed in the proposed rule preamble, we believe that
both the single and multipollutant approaches are appropriate for
assessing the reasonableness of the multipollutant controls
considered in this action. The EPA has considered similar approaches
in the past when considering multiple pollutants that are controlled
by a given control option. See e.g., 73 FR 64079-64083 and EPA
Document ID Nos. EPA-HQ-OAR-2004-0022-0622, EPA-HQ-OAR-2004-0022-
0447, EPA-HQ-OAR-2004-0022-0448.
---------------------------------------------------------------------------

    The standard that the EPA develops, based on the BSER, is commonly
a numerical emissions limit, expressed as a performance level (in other
words, a rate-based standard). As provided in CAA section 111(b)(5),
the EPA does not prescribe a particular technological system that must
be used to comply with a standard of performance. Rather, sources can
select any measure or combination of measures that will achieve the
emissions level of the standard.
    CAA section 111(h)(1) authorizes the Administrator to promulgate
``a design, equipment, work practice, or operational standard, or
combination thereof'' if in his or her judgment, ``it is not feasible
to prescribe or enforce a standard of performance.'' CAA section
111(h)(2) provides the circumstances under which prescribing or
enforcing a standard of performance is ``not feasible'': Such as, when
the pollutant cannot be emitted through a conveyance designed to emit
or capture the pollutant, or when there is no practicable measurement
methodology for the particular class of sources.
    CAA section 111(b)(1)(B) requires the EPA to ``at least every 8
years review and, if appropriate, revise'' performance standards unless
the ``Administrator determines that such review is not appropriate in
light of readily available information on the efficacy'' of the
standard. As mentioned above, once the EPA lists a source category
under CAA section 111(b)(1)(A), CAA section 111(b)(1)(B) provides the
EPA discretion to determine the pollutants and sources to be regulated.
In addition, concurrent with the 8-year review (and though not a
mandatory part of the 8-year review), EPA may examine whether to add
standards for pollutants or emission sources not currently regulated
for that source category.

B. Regulatory Background

    In 1979, the EPA published a list of source categories, which
include ``crude oil and natural gas production,'' for which the EPA
would promulgate standards of performance under CAA section 111(b) of
the CAA. See Priority List and Additions to the List of Categories of
Stationary Sources, 44 FR 49222 (August 21, 1979) (``1979 Priority
List''). That list included, in the order of priority for promulgating
standards, source categories that the EPA Administrator had determined,
pursuant to CAA section 111(b)(1)(A), contribute significantly to air
pollution that may reasonably be anticipated to endanger public health
or welfare. See 44 FR at 49223, August 21, 1979; see also, 49 FR 2636-
37, January 20, 1984.
    On June 24, 1985 (50 FR 26122), the EPA promulgated an NSPS for the
source category that addressed VOC emissions from leaking components at
onshore natural gas processing plants (40 CFR part 60, subpart KKK). On
October 1, 1985 (50 FR 40158), a second NSPS was promulgated for the
source category that regulates SO2 emissions from natural
gas processing plants (40 CFR part 60, subpart LLL). In 2012, pursuant
to its duty under CAA section 111(b)(1)(B) to review and, if
appropriate, revise NSPS, the EPA published the final rule, ``Standards
of Performance for Crude Oil and Natural Gas Production, Transmission
and Distribution'' (40 CFR part 60, subpart OOOO) (``2012 NSPS''). The
2012 NSPS updated the SO2 standards for sweetening units and
VOC standards for equipment leaks at onshore natural gas processing
plants. In addition, it established VOC standards for several oil and
natural gas-related operations not covered by 40 CFR part 60, subparts
KKK and LLL, including gas well completions, centrifugal and
reciprocating compressors, natural gas-operated pneumatic controllers,
and storage vessels. In 2013 and 2014, the EPA made certain amendments
to the 2012 NSPS in order to improve implementation of the standards
(78 FR 58416, September 23, 2013, and 79 FR 79018, December 31, 2014).
The 2013 amendments focused on storage vessel implementation issues;
the 2014 amendments provided clarification of well completion
provisions which became fully effective on January 1, 2015. The EPA
received petitions for both judicial review and administrative
reconsiderations for the 2012 NSPS as well as the subsequent amendments
in 2013 and 2014. The litigations are stayed pending the EPA's
reconsideration process.\13\
---------------------------------------------------------------------------

    \13\ In 2015, the EPA made further amendments to provisions
relative to storage vessels and well completions (in particular low
pressure wells). No judicial review or administrative
reconsideration was sought for the 2015 amendments.
---------------------------------------------------------------------------

    In this rulemaking, the EPA is addressing a number of issues raised
in the administrative reconsideration petitions.\14\ In addition to
addressing the petitions requesting we reconsider our decision to defer
regulation of GHGs, these topics, which mostly address implementation
in 40 CFR part 60, subpart OOOO, are: Storage vessel control device
monitoring and testing provisions; initial compliance requirements for
a bypass device that

could divert an emission stream away from a control device;
recordkeeping requirements for repair logs for control devices failing
a visible emissions test; clarification of the due date for the initial
annual report; emergency flare exemption from routine compliance tests;
LDAR for open-ended valves or lines; compliance period for LDAR for
newly affected process units; exemption to notification requirement for
reconstruction of most types of facilities; and disposal of carbon from
control devices.
---------------------------------------------------------------------------

    \14\ The EPA intends to complete its reconsideration process in
a subsequent notice.
---------------------------------------------------------------------------

C. Other Notable Events

    To provide relevant context to this final rule, EPA will discuss
several notable events. First, in 2009 the EPA found that six well-
mixed GHGs--carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--
endanger both the public health and the public welfare of current and
future generations by causing or contributing to climate change. Oil
and natural gas operations are significant emitters of methane.
According to data from the Greenhouse Gas Reporting Program (GHGRP),
oil and natural gas operations are the second largest stationary source
of GHG emissions in the United States (when including both methane
emissions and combustion-related GHG emissions at oil and natural gas
facilities), second only to fossil fuel electricity generation. See
section IV of this preamble which discusses, among other issues, this
endangerment finding in more detail.
    Second, on August 16, 2012, the EPA published the 2012 NSPS (77 FR
49490). The 2012 NSPS included VOC standards for a number of emission
sources in the oil and natural gas source category. Using information
available at the time, the EPA also evaluated methane emissions and
reductions during the 2012 NSPS rulemaking as a potential co-benefit of
regulating VOC. Although information at the time indicated that methane
emissions could be significant, the EPA did not take final action in
the 2012 NSPS with respect to the regulation of GHG emissions; the EPA
noted the impending collection of a large amount of GHG emissions data
for this industry through the GHGRP (40 CFR part 98) and expressed its
intent to continue its evaluation of methane. As stated previously, the
2012 NSPS was the subject of a number of petitions for judicial review
and administrative reconsideration. Litigation is currently stayed
pending the EPA's reconsideration process. Controlling methane
emissions is an issue raised in several of the administrative petitions
for the EPA's reconsideration.
    Third, in June 2013, President Obama issued his Climate Action
Plan, which included direction to the EPA and five other federal
agencies to develop a comprehensive interagency strategy to reduce
methane emissions. The plan recognized that methane emissions
constitute a significant percentage of domestic GHG emissions,
highlighted reductions in methane emissions since 1990, and outlined
specific actions that could be taken to achieve additional progress.
    Fourth, as a follow-up to the 2013 Climate Action Plan, the
Administration issued the Climate Action Plan: Strategy to Reduce
Methane Emissions (the Methane Strategy) in March 2014. The focus on
reducing methane emissions reflects the fact that methane is a potent
GHG with a 100-year GWP that is 28-36 times greater than that of carbon
dioxide.\15\ The GWP is a measure of how much additional energy the
earth will absorb over 100 years as a result of emissions of a given
gas, in relation to carbon dioxide. Methane has an atmospheric life of
about 12 years, and because of its potency as a GHG and its atmospheric
life, reducing methane emissions is an important step that can be taken
to achieve a near-term beneficial impact in mitigating global climate
change. The Methane Strategy instructed the EPA to release a series of
white papers on several potentially significant sources of methane in
the oil and natural gas sector and to solicit input from independent
experts. The white papers were released in April 2014 and are discussed
in more detail in section III.D of this preamble.16 17
---------------------------------------------------------------------------

    \15\ IPCC, 2013: Climate Change 2013: The Physical Science
Basis. Contribution of Working Group I to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Stocker,
T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A.
Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and New York, NY, USA,
1535 pp. For the analysis supporting this regulation, we used the
methane 100-year GWP of 25 to be consistent with and comparable to
key Agency emission quantification programs such as the Inventory of
Greenhouse Gas Emissions and Sinks (GHG Inventory), and the
Greenhouse Gas Reporting Program (GHGRP). For more information see
Preamble section Methane Emissions in the United States and from the
Oil and Natural Gas Industry.
    \16\ http://www.epa.gov/airquality/oilandgas/methane.html.
    \17\ Public comments on the white papers are available in the
EPA's nonregulatory docket at http://www.regulations.gov, Docket ID
No. EPA-HQ-OAR-2014-0557.
---------------------------------------------------------------------------

    Finally, following the Climate Action Plan and the Methane
Strategy, in January 2015, the Administration announced a new goal to
cut methane emissions from the oil and gas sector by 40 to 45 percent
from 2012 levels by 2025 and steps to put the United States on a path
to achieve this ambitious goal. These actions encompass both
commonsense standards and cooperative engagement with states, tribes,
and industry. Building on prior actions by the Administration and
leadership in states and industry, the announcement laid out a plan for
the EPA to address, and if appropriate, propose and set standards for
methane and ozone-forming emissions from new and modified sources and
to issue Control Technique Guidelines (CTG) to assist states in
reducing ozone-forming pollutants from existing oil and natural gas
systems in areas that do not meet the health-based standard for ozone.

D. Stakeholder Outreach and Public Hearings

1. White Papers
    As mentioned, the Methane Strategy was released in March 2014, as a
follow-up to the 2013 Climate Action Plan, and directed the EPA to
release a series of white papers on several potentially significant
sources of methane in the oil and natural gas sector and solicit input
from independent experts. The papers were released in April 2014, and
the peer review process was completed on June 16, 2014.
    The peer review, consisting of 26 sets of comments and more than
43,000 public comment submissions on the white papers, included
additional technical information that further clarified our
understanding of the emission sources and emission control options.\18\
The comments also provided additional data on emissions and the number
of sources and pointed out newly published studies that further
informed our emission rate estimates. Where appropriate, we used the
information and data provided to adjust the control options considered
and the impacts estimates that are presented in the TSD to this final
rule.
---------------------------------------------------------------------------

    \18\ The comments received from the peer reviewers are available
on the EPA's oil and natural gas white paper Web site (http://www.epa.gov/airquality/oilandgas/methane.html). Public comments on
the white papers are available in the EPA's nonregulatory docket at
www.regulations.gov, docket ID #EPA-HQ-OAR-2014-0557.
---------------------------------------------------------------------------

2. Outreach to State, Local and Tribal Governments
    Throughout the rulemaking process, the EPA collaborated with state,
local, and tribal governments to hear how they have managed regulatory
issues and to receive feedback that would help us develop the rule. As
discussed in the

proposal, 12 states, three tribes, and several local air districts
participated in several teleconferences in March and April 2015. The
EPA hosted additional teleconferences in September 2015 with the same
group of states, tribes, and air districts that the EPA spoke with
earlier in the year. In September 2015, the EPA also hosted a webinar
series with states, tribes, and interested communities to provide an
overview of the proposed rule and an opportunity to ask clarifying
questions on the proposal.\19\
---------------------------------------------------------------------------

    \19\ See 80 FR 56609, September 18, 2015.
---------------------------------------------------------------------------

    The EPA specifically consulted with tribal officials under the
``EPA Policy on Consultation and Coordination with Indian Tribes''
early in the process of developing this regulation to provide them with
the opportunity to have meaningful and timely input into its
development. Additionally, the EPA spoke with tribal stakeholders
throughout the rulemaking process and updated the National Tribal Air
Association on the Methane Strategy. Consistent with previous actions
affecting the oil and natural gas sector, significant tribal interest
exists because of the growth of oil and natural gas production in
Indian country.
3. Public Hearings
    The EPA hosted three public hearings on the proposed rule in
September 2015.\20\ The public hearings addressed this rule's proposal
and two related actions.\21\ All combined, approximately 329 people
gave verbal testimony. The transcripts and written comments collected
at the hearings are in the public docket for this final rule.\22\
---------------------------------------------------------------------------

    \20\ See 80 FR 51991, August 27, 2015.
    \21\ Source Determination for Certain Emission Units in the Oil
and Natural Gas Sector; Review of New Sources and Modifications in
Indian Country: Federal Implementation Plan for Managing Air
Emissions from True Minor Sources Engaged in Oil and Natural Gas
Production in Indian Country.
    \22\ See EPA Docket ID No. EPA-HQ-OAR-2010-0505.
---------------------------------------------------------------------------

E. Related State and Federal Regulatory Actions

    As mentioned, these rules are designed to complement current state
and other federal regulations. We carefully evaluated existing state
and local programs when developing these federal standards and
attempted, where possible, to limit potential conflicts with existing
state and local requirements. We recognize that, in some cases, these
federal rules may be more stringent than existing programs and, in
other cases, may be less stringent than existing programs. We received
over 900,000 comments on the proposed rule. After careful consideration
of the comments, we are finalizing the standards with revisions where
appropriate to reduce emissions of harmful air pollutants, promote gas
capture and beneficial use, and provide opportunity for flexibility and
expanded transparency in order to yield a consistent and accountable
national program that provides a clear path for states and other
federal agencies to further align their programs.
    During development of these NSPS requirements, we were mindful that
some facilities that will be subject to the standards will also be
subject to current or future requirements of the Department of
Interior's Bureau of Land Management (BLM) rules covering production of
natural gas on federal lands.\23\ To minimize confusion and unnecessary
burden on the part of owners and operators, the EPA and the BLM have
maintained an ongoing dialogue during development of this action to
identify opportunities for aligning requirements and will continue to
coordinate through BLM's final rulemaking and through the agencies'
implementation of their respective rules. While we intend for our rule
to complement the BLM's action, it is important to recognize that the
EPA and the BLM are each operating under different statutory
authorities and mandates in developing and implementing their
respective rules.
---------------------------------------------------------------------------

    \23\ See 81 FR 6616, February 8, 2016.
---------------------------------------------------------------------------

    In addition to this final rule, the EPA is working to finalize
other related actions. The EPA will finalize the Source Determination
for Certain Emissions Units in the Oil and Natural Gas Sector rule,
which will clarify the EPA's air permitting rules as they apply to the
oil and natural gas industry. Additionally, the EPA plans to finalize
the federal implementation plan for the EPA's Indian Country Minor New
Source Review (NSR) program for oil and natural gas production sources
and natural gas processing sources, which will require compliance with
various federal regulations and streamline the permitting process for
this rapidly growing industry in Indian country. Lastly, the EPA will
also issue Control Techniques Guidelines (CTG) for reducing VOC
emissions from existing oil and gas sources in certain ozone
nonattainment areas and states in the Ozone Transport Region. This
suite of requirements together will help combat climate change, reduce
air pollution that harms public health, and provide greater certainty
about CAA permitting requirements for the oil and natural gas industry.
    Other related programs include the EPA's GHGRP, which requires
annual reporting of GHG data and other relevant information from large
sources and suppliers in the United States. On October 30, 2009, the
EPA published 40 CFR part 98 for collecting information regarding GHG
emissions from a broad range of industry sectors (74 FR 56260).
Although reporting requirements for petroleum and natural gas systems
(40 CFR part 98, subpart W) were originally proposed to be part of 40
CFR part 98 (75 FR 16448, April 10, 2009), the final October 2009 rule
did not include the petroleum and natural gas systems source category
as one of the 29 source categories for which reporting requirements
were finalized. The EPA reproposed subpart W in 2010 (79 FR 18608,
April 12, 2010), and a subsequent final rule was published on November
30, 2010, with the requirements for the petroleum and natural gas
systems source category at 40 CFR part 98, subpart W (75 FR 74458).
Following promulgation, the EPA finalized actions revising subpart W
(76 FR 22825, April 25, 2011; 76 FR 59533, September 27, 2011; 76 FR
80554, December 23, 2011; 77 FR 51477, August 24, 2012; 78 FR 25392,
May 1, 2013; 78 FR 71904, November 29, 2013; 79 FR 63750, October 24,
2014; 79 FR 70352, November 25, 2014; 80 FR 64262, October 22, 2015).
    40 CFR part 98, subpart W includes a wide range of operations and
equipment, from wells to processing facilities, to transmission and
storage and through to distribution pipelines. Subpart W consists of
emission sources in the following segments of the petroleum and natural
gas industry: Onshore petroleum and natural gas production, offshore
petroleum and natural gas production, onshore petroleum and natural gas
gathering and boosting, onshore natural gas processing plants, onshore
natural gas transmission compression, onshore natural gas transmission
pipeline, underground natural gas storage, liquefied natural gas
storage, liquefied natural gas import and export equipment, and natural
gas distribution.
    On March 10, 2016, the EPA announced the next step in reducing
emissions of GHGs, specifically methane, from the oil and natural gas
industry: Moving to regulate emissions from existing sources. The
Agency will begin with a formal process to require companies operating
existing oil and gas sources to provide information to assist in the
development of comprehensive

regulations to reduce GHG emissions.\24\ An Information Collection
Request (ICR) will enable the EPA to gather important information on
existing sources of GHG emissions, technologies to reduce those
emissions, and the costs of those technologies in the production,
gathering, processing, and transmission and storage segments of the oil
and natural gas sector. There are hundreds of thousands of existing oil
and natural gas sources across the country; some emit small amounts of
GHGs, but others emit very large quantities. Through the ICR, the EPA
will be seeking a broad range of information that will help us
determine how to effectively reduce emissions, including information
such as how equipment and emissions controls are, or can be,
configured, and what installing those controls entails. The EPA will
also be seeking information that will help the Agency identify sources
with high emissions and the factors that contribute to those emissions.
The ICR will likely apply to the same types of sources covered by the
40 CFR part 60, subparts OOOO and OOOOa, as well as additional sources.
---------------------------------------------------------------------------

    \24\ https://www3.epa.gov/airquality/oilandgas/pdfs/20160310fs.pdf.
---------------------------------------------------------------------------

IV. Regulatory Authority

    In this section, we describe our authority under CAA section 111(b)
to regulate emissions from operations and equipment used across the oil
and natural gas industry.

A. The Oil and Natural Gas Source Category Listing Under CAA Section
111(b)(1)(A)

    In 1979, the EPA published a list of source categories, including
``crude oil and natural gas production,'' for which the EPA would
promulgate standards of performance under section 111(b) of the CAA.
Priority List and Additions to the List of Categories of Stationary
Sources, 44 FR 49222 (August 21, 1979) (``1979 Priority List''). The
EPA published the 1979 Priority List as directed by a then new section
111(f) under the CAA amendments of 1977. Clean Air Act section 111(f)
set a schedule for the EPA to promulgate regulations under CAA section
111(b)(1)(A); listing ``categories of major stationary sources'' and
establishing standards of performance for the listed source categories
in the order of priority as determined by the criteria set forth in CAA
section 111(f). The 1979 Priority List included, in the order of
priority for promulgating standards, source categories that the EPA
Administrator had determined, pursuant to CAA section 111(b)(1)(A), to
contribute significantly to air pollution that may reasonably be
anticipated to endanger public health or welfare. See 44 FR 49222,
August 21, 1979; see also 49 FR 2636-37, January 20, 1984. In
developing the 1979 Priority List, the EPA first analyzed the data to
identify ``major source categories'' and then ranked them in the order
of priority for setting standards. Id. Although the EPA defined a
``major source category'' in that listing action as ``those categories
for which an average size plant has the potential to emit 100 tons or
more per year of any one pollutant,'' \25\ the EPA provided notice in
that action that ``certain new sources of smaller than average size
within these categories may have less than a 100 ton per year emission
potential.'' 43 FR 38872, 38873 (August 31, 1978). The EPA thus made
clear that sources included within the listed source categories in the
1979 Priority List were not limited to sources that emit at or above
the 100 ton level. The EPA's decision to not exclude smaller sources in
the 1979 Priority List was consistent with CAA section 111(b), the
statutory authority for that listing action and the required standard
setting to follow. In requiring that the EPA list source categories and
establish standards for the new sources within the listed source
categories, CAA section 111(b) does not distinguish between ``major''
or other sources. Similarly, as an example, CAA section 111(e), which
prohibits violation of an applicable standard upon its effective date,
applies to ``any new source,'' not just major new sources.
---------------------------------------------------------------------------

    \25\ 44 FR 49222, August 21, 1979.
---------------------------------------------------------------------------

    As mentioned above, one of the source categories listed in that
1979 Priority List generally covers the oil and natural gas industry.
Specifically, with respect to the natural gas industry, it includes
production, processing, transmission, and storage. The 1979 Priority
List broadly covered the natural gas industry,\26\ which was evident in
the EPA's analysis at the time of listing.\27\ For example, the
priority list analysis indicated that the EPA evaluated emissions from
various segments of the natural gas industry, such as production and
processing. The analysis also showed that the EPA evaluated equipment,
such as stationary pipeline compressor engines that are used in various
segments of the natural gas industry. The scope of the 1979 Priority
List is further demonstrated by the Agency's pronouncements during the
NSPS rulemaking that followed the listing. Specifically, in its
description of this listed source category in the 1984 preamble to the
proposed NSPS for equipment leaks at natural gas processing plants, the
EPA described the major emission points of this source category to
include process, storage, and equipment leaks; these emissions can be
found throughout the various segments of the natural gas industry. 49
FR 2637, January 20, 1984. In addition, the EPA identified emission
points not covered by that rulemaking, such as ``well systems field oil
and gas separators, wash tanks, settling tanks and other sources.'' Id.
The EPA explained in that action that it could not regulate these
emissions at that time because ``best demonstrated control technology
has not been identified.'' Id.
---------------------------------------------------------------------------

    \26\ The process of producing natural gas for distribution
involves operations in the various segments of the natural gas
industry described above. In contrast, oil production involves
drilling/extracting oil, which is immediately followed by
distribution offsite to be made into different products.
    \27\ See Standards of Performance for New Stationary Sources, 43
FR 38872 (August 31, 1978) and Priority List and Additions to the
List of Categories of Stationary Sources, 44 FR 49222 (August 21,
1979).
---------------------------------------------------------------------------

    The inclusion of various segments of the natural gas industry into
the source category listed in 1979 is consistent with this industry's
operations and equipment. Operations at production, processing,
transmission, and storage facilities are a sequence of functions that
are interrelated and necessary for getting the recovered gas ready for
distribution.\28\ Because they are interrelated, segments that follow
others are faced with increases in throughput caused by growth in
throughput of the segments preceding (i.e., feeding) them. For example,
the relatively recent substantial increases in natural gas production
brought about by hydraulic fracturing and horizontal drilling result in
increases in the amount of natural gas needing to be processed and
moved to market or stored. These increases in production and throughput
can cause increases in emissions across the entire natural gas
industry. We also note that some equipment (e.g., storage vessels,
pneumatic pumps, compressors) are used across the oil and natural gas
industry, which further supports considering the industry as one source
category. For the reasons stated above, the 1979 Priority List broadly
includes the various segments of the natural gas

industry (production, processing, transmission, and storage).
---------------------------------------------------------------------------

    \28\ The crude oil production segment of the source category,
which includes the well and extends to the point of custody transfer
to the crude oil transmission pipeline, is more limited in scope
than the segments of the natural gas value chain included in the
source category. However, increases in production at the well and/or
increases in the number of wells coming on line, in turn increase
throughput and resultant emissions, similarly to the natural gas
segments in the source category.
---------------------------------------------------------------------------

    Since issuing the 1979 Priority List, which broadly covers the oil
and natural gas industry as explained above, the EPA has promulgated
performance standards to regulate SO2 emissions from natural
gas processing and VOC emissions from certain operations and equipment
in this industry. In this action, the EPA is regulating an additional
pollutant (i.e., GHGs) as well as additional sources from this
industry.
    As explained above, the EPA, in 1979, determined under section
111(b)(1)(A) that the listed oil and natural gas source category
contributes significantly to air pollution that may reasonably be
anticipated to endanger public health or welfare. Therefore, the 1979
listing of this source category provides sufficient authority for this
action. The listed oil and natural gas source category includes oil
\29\ and natural gas production, processing, transmission, and storage.
For the reasons stated above, the EPA believes that the 1979 listing of
this source category provides sufficient authority for this action.
However, to the extent that there is any ambiguity in the prior
listing, the EPA hereby finalizes, as an alternative, its proposed
revision of the category listing to broadly include the oil and natural
gas industry. As revised, the listed oil and natural gas source
category includes oil \30\ and natural gas production, processing,
transmission, and storage. In support, the EPA has included in this
action the requisite finding under section 111(b)(1)(A) that, in the
Administrator's judgment, this source category, as defined above,
contributes significantly to air pollution which may reasonably be
anticipated to endanger public health or welfare.
---------------------------------------------------------------------------

    \29\ For the oil industry, the listing includes production, as
explained above in footnote 27.
    \30\ For the oil industry, the listing includes production, as
explained above in footnote 27.
---------------------------------------------------------------------------

    To be clear, the EPA's view is that no revision is required for the
standards established in this final rule. But even assuming it is, for
the reason stated below, there is ample evidence that this source
category as a whole (oil and natural gas production, processing,
transmission, and storage) contributes significantly to air pollution
that may reasonably be anticipated to endanger public health and
welfare.
    First, through the 1979 Priority List, the EPA determined that the
oil and natural gas industry contributes significantly to air pollution
which may reasonably be anticipated to endanger public health or
welfare. To the extent that the EPA's 1979 determination looked only at
certain emissions sources in the industry, clearly the much greater
emissions from the broader source category, as defined under a revised
listing, would provide even more support for a conclusion that
emissions from this category endanger public health or welfare. In
addition, the EPA has included immediately below information and
analyses regarding public health and welfare impacts from GHGs, VOC,
and SO2 emissions, three of the primary pollutants emitted
from the oil and natural gas industry, and the estimated emissions of
these pollutants from the oil and natural gas source category. It is
evident from this information and analyses that the oil and natural gas
source category contributes significantly to air pollution which may
reasonably be anticipated to endanger public health and welfare.
Therefore, to the extent such a finding were necessary, pursuant to
section 111(b)(1)(A), the Administrator hereby determines that, in her
judgment, this source category, as defined above, contributes
significantly to air pollution which may reasonably be anticipated to
endanger public health or welfare.
    Provided below are the supporting information and analyses
referenced above. Specifically, section IV.B of this preamble describes
the public health and welfare impacts from GHGs, VOC and
SO2. Section IV.C of this preamble analyzes the emission
contribution of these three pollutants by the oil and natural gas
industry.

B. Impacts of GHGs, VOC and SO2 Emissions on Public Health
and Welfare

    The oil and natural gas industry emits a wide range of pollutants,
including GHGs (such as methane and CO2), VOC,
SO2, nitrogen oxides (NOX), hydrogen sulfide
(H2S), carbon disulfide (CS2) and carbonyl
sulfide (COS). See 49 FR 2636, 2637 (January 20, 1984). Although all of
these pollutants have significant impacts on public health and welfare,
an analysis of every one of these pollutants is not necessary for the
Administrator to make a determination under CAA section 111(b)(1)(A);
as shown below, the EPA's analysis of GHGs, VOC, and SO2,
three of the primary emissions from the oil and natural gas source
category, is sufficient for the Administrator to determine under CAA
section 111(b)(1)(A) that the oil and natural gas source category
contributes significantly to air pollution which may reasonably be
anticipated to endanger public health and welfare.\31\
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    \31\ We note that the EPA's focus on GHG (in particular
methane), VOC, and SO2 in these analyses, does not in any
way limit the EPA's authority to promulgate standards that would
apply to other pollutants emitted from the oil and natural gas
source category, if the EPA determines in the future that such
action is appropriate.
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1. Climate Change Impacts From GHG Emissions
    In 2009, based on a large body of robust and compelling scientific
evidence, the EPA Administrator issued the Endangerment Finding under
CAA section 202(a)(1).\32\ In the 2009 Endangerment Finding, the
Administrator found that the current, elevated concentrations of GHGs
in the atmosphere--already at levels unprecedented in human history--
may reasonably be anticipated to endanger the public health and welfare
of current and future generations in the United States. We summarize
these adverse effects on public health and welfare briefly here.
---------------------------------------------------------------------------

    \32\ ``Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR
66496 (December 15, 2009) (``2009 Endangerment Finding'').
---------------------------------------------------------------------------

a. Public Health Impacts Detailed in the 2009 Endangerment Finding
    Climate change caused by manmade emissions of GHGs threatens the
health of Americans in multiple ways. By raising average temperatures,
climate change increases the likelihood of heat waves, which are
associated with increased deaths and illnesses. While climate change
also increases the likelihood of reductions in cold-related mortality,
evidence indicates that the increases in heat mortality will be larger
than the decreases in cold mortality in the United States. Compared to
a future without climate change, climate change is expected to increase
ozone pollution over broad areas of the United States, especially on
the highest ozone days and in the largest metropolitan areas with the
worst ozone problems, and thereby increase the risk of morbidity and
mortality. Climate change is also expected to cause more intense
hurricanes and more frequent and intense storms and heavy
precipitation, with impacts on other areas of public health, such as
the potential for increased deaths, injuries, infectious and waterborne
diseases, and stress-related disorders. Children, the elderly, and the
poor are among the most vulnerable to these climate-related health
effects.
b. Public Welfare Impacts Detailed in the 2009 Endangerment Finding
    Climate change impacts touch nearly every aspect of public welfare.
Among the multiple threats caused by manmade emissions of GHGs, climate
changes are

expected to place large areas of the country at serious risk of reduced
water supplies, increased water pollution, and increased occurrence of
extreme events such as floods and droughts. Coastal areas are expected
to face a multitude of increased risks, particularly from rising sea
level and increases in the severity of storms. These communities face
storm and flooding damage to property, or even loss of land due to
inundation, erosion, wetland submergence, and habitat loss.
    Impacts of climate change on public welfare also include threats to
social and ecosystem services. Climate change is expected to result in
an increase in peak electricity demand. Extreme weather from climate
change threatens energy, transportation, and water resource
infrastructure. Climate change may also exacerbate ongoing
environmental pressures in certain settlements, particularly in Alaskan
indigenous communities, and is very likely to fundamentally rearrange
United States ecosystems over the 21st century. Though some benefits
may help balance adverse effects on agriculture and forestry in the
next few decades, the body of evidence points towards increasing risks
of net adverse impacts on United States food production, agriculture,
and forest productivity as temperatures continue to rise. These impacts
are global and may exacerbate problems outside the United States that
raise humanitarian, trade, and national security issues for the United
States.
c. New Scientific Assessments and Observations
    Since the administrative record concerning the 2009 Endangerment
Finding closed following the EPA's 2010 Reconsideration Denial, the
climate has continued to change, with new records being set for a
number of climate indicators such as global average surface
temperatures, Arctic sea ice retreat, methane and other GHG
concentrations, and sea level rise. Additionally, a number of major
scientific assessments have been released that improve understanding of
the climate system and strengthen the case that GHGs endanger public
health and welfare both for current and future generations. These
assessments, from the Intergovernmental Panel on Climate Change (IPCC),
United States Global Change Research Program (USGCRP), and National
Research Council (NRC), include: IPCC's 2012 Special Report on Managing
the Risks of Extreme Events and Disasters to Advance Climate Change
Adaptation (SREX) and the 2013-2014 Fifth Assessment Report (AR5),
USGCRP's 2014 National Climate Assessment, Climate Change Impacts in
the United States (NCA3), and the NRC's 2010 Ocean Acidification: A
National Strategy to Meet the Challenges of a Changing Ocean (Ocean
Acidification), 2011 Report on Climate Stabilization Targets:
Emissions, Concentrations, and Impacts over Decades to Millennia
(Climate Stabilization Targets), 2011 National Security Implications
for U.S. Naval Forces (National Security Implications), 2011
Understanding Earth's Deep Past: Lessons for Our Climate Future
(Understanding Earth's Deep Past), 2012 Sea Level Rise for the Coasts
of California, Oregon, and Washington: Past, Present, and Future, 2012
Climate and Social Stress: Implications for Security Analysis (Climate
and Social Stress), and 2013 Abrupt Impacts of Climate Change (Abrupt
Impacts) assessments.
    The EPA has carefully reviewed these recent assessments in keeping
with the same approach outlined in section VIII.A of the 2009
Endangerment Finding, which was to rely primarily upon the major
assessments by the USGCRP, IPCC, and the NRC to provide the technical
and scientific information to inform the Administrator's judgment
regarding the question of whether GHGs endanger public health and
welfare. These assessments addressed the scientific issues that the EPA
was required to examine, were comprehensive in their coverage of the
GHG and climate change issues, and underwent rigorous and exacting peer
review by the expert community, as well as rigorous levels of United
States government review.
    The findings of the recent scientific assessments confirm and
strengthen the conclusion that GHGs endanger public health, now and in
the future. The NCA3 indicates that human health in the United States
will be impacted by ``increased extreme weather events, wildfire,
decreased air quality, threats to mental health, and illnesses
transmitted by food, water, and disease-carriers such as mosquitoes and
ticks.'' The most recent assessments now have greater confidence that
climate change will influence production of pollen that exacerbates
asthma and other allergic respiratory diseases such as allergic
rhinitis, as well as effects on conjunctivitis and dermatitis. Both the
NCA3 and the IPCC AR5 found that increased temperature lengthens the
allergenic pollen season for ragweed and that increased CO2
by itself elevates production of plant-based allergens.
    The NCA3 also finds that climate change, in addition to chronic
stresses such as extreme poverty, is negatively affecting indigenous
peoples' health in the United States through impacts such as reduced
access to traditional foods, decreased water quality, and increasing
exposure to health and safety hazards. The IPCC AR5 finds that climate
change-induced warming in the Arctic and resultant changes in
environment (e.g., permafrost thaw, effects on traditional food
sources) have significant impacts, observed now and projected, on the
health and well-being of Arctic residents, especially indigenous
peoples. Small, remote, predominantly indigenous communities are
especially vulnerable given their ``strong dependence on the
environment for food, culture, and way of life; their political and
economic marginalization; existing social, health, and poverty
disparities; as well as their frequent close proximity to exposed
locations along ocean, lake, or river shorelines.'' \33\ In addition,
increasing temperatures and loss of Arctic sea ice increases the risk
of drowning for those engaged in traditional hunting and fishing.
---------------------------------------------------------------------------

    \33\ IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and
Vulnerability. Part B: Regional Aspects. Contribution of Working
Group II to the Fifth Assessment Report of the Intergovernmental
Panel on Climate Change [Barros, V.R., C.B. Field, D.J. Dokken, M.D.
Mastrandrea, K.J. Mach, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O.
Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S.
MacCracken, P.R. Mastrandrea, and L.L. White (eds.)]. Cambridge
University Press, Cambridge, p. 1581.
---------------------------------------------------------------------------

    The NCA3 also finds that children's unique physiology and
developing bodies contribute to making them particularly vulnerable to
climate change. Impacts on children are expected from heat waves, air
pollution, infectious and waterborne illnesses, and mental health
effects resulting from extreme weather events. The IPCC AR5 indicates
that children are among those especially susceptible to most allergic
diseases, as well as health effects associated with heat waves, storms,
and floods. The IPCC finds that additional health concerns may arise in
low income households, especially those with children, if climate
change reduces food availability and increases prices, leading to food
insecurity within households.
    Both the NCA3 and IPCC AR5 conclude that climate change will
increase health risks that the elderly will face. Older people are at
much higher risk of mortality during extreme heat events. Pre-existing
health conditions also make older adults more susceptible to cardiac
and respiratory impacts of air pollution and to more severe
consequences from infectious

and waterborne diseases. Limited mobility among older adults can also
increase health risks associated with extreme weather and floods.
    The new assessments also confirm and strengthen the conclusion that
GHGs endanger public welfare and emphasize the urgency of reducing GHG
emissions due to their projections that show GHG concentrations
climbing to ever-increasing levels in the absence of mitigation. The
NRC assessment, Understanding Earth's Deep Past, stated that ``the
magnitude and rate of the present GHG increase place the climate system
in what could be one of the most severe increases in radiative forcing
of the global climate system in Earth history.'' \34\ Because of these
unprecedented changes, several assessments state that we may be
approaching critical, poorly understood thresholds. As stated in the
NRC assessment, Understanding Earth's Deep Past, ``[a]s Earth continues
to warm, it may be approaching a critical climate threshold beyond
which rapid and potentially permanent--at least on a human timescale--
changes not anticipated by climate models tuned to modern conditions
may occur.'' The NRC Abrupt Impacts report analyzed abrupt climate
change in the physical climate system and abrupt impacts of ongoing
changes that, when thresholds are crossed, can cause abrupt impacts for
society and ecosystems. The report considered destabilization of the
West Antarctic Ice Sheet (which could cause 3 to 4 meters (m) of
potential sea level rise) as an abrupt climate impact with unknown but
low probability of occurring this century. The report categorized a
decrease in ocean oxygen content (with attendant threats to aerobic
marine life); increase in intensity, frequency, and duration of heat
waves; and increase in frequency and intensity of extreme weather
events (droughts, floods, hurricanes, and major storms) as climate
impacts with moderate risk of an abrupt change within this century. The
NRC Abrupt Impacts report also analyzed the threat of rapid state
changes in ecosystems and species extinctions as examples of an
irreversible impact that is expected to be exacerbated by climate
change. Species at most risk include those whose migration potential is
limited, whether because they live on mountaintops or fragmented
habitats with barriers to movement, or because climatic conditions are
changing more rapidly than the species can move or adapt. While the NRC
determined that it is not presently possible to place exact
probabilities on the added contribution of climate change to
extinction, they did find that there was substantial risk that impacts
from climate change could, within a few decades, drop the populations
in many species below sustainable levels, thereby committing the
species to extinction. Species within tropical and subtropical
rainforests, such as the Amazon, and species living in coral reef
ecosystems were identified by the NRC as being particularly vulnerable
to extinction over the next 30 to 80 years, as were species in high
latitude and high elevation regions. Moreover, due to the time lags
inherent in the Earth's climate, the NRC Climate Stabilization Targets
assessment notes that the full warming from increased GHG
concentrations will not be fully realized for several centuries,
underscoring that emission activities today carry with them climate
commitments far into the future.
---------------------------------------------------------------------------

    \34\ National Research Council, Understanding Earth's Deep Past,
p. 138.
---------------------------------------------------------------------------

    Future temperature changes will depend on what emission path the
world follows. In its high emission scenario, the IPCC AR5 projects
that global temperatures by the end of the century will likely be
2.6[emsp14][deg]Celsius to 4.8[emsp14][deg]Celsius (4.7[deg] to
8.6[emsp14][deg]F) warmer than today. Temperatures on land and in
northern latitudes will likely warm even faster than the global
average. However, according to the NCA3, significant reductions in
emissions would lead to noticeably less future warming beyond mid-
century and, therefore, less impact to public health and welfare.
    While the amount of rainfall may not change significantly when
looked at from the standpoint of global and annual averages, there are
expected to be substantial shifts in where and when that precipitation
falls. According to the NCA3, regions closer to the poles will see more
precipitation while the dry subtropics are expected to expand
(colloquially, this has been summarized as wet areas getting wetter and
dry regions getting drier). In particular, the NCA3 notes that the
western United States, and especially the Southwest, is expected to
become drier. This projection is consistent with the recent observed
drought trend in the West. At the time of publication of the NCA3, even
before the last 2 years of extreme drought in California, tree ring
data were already indicating that the region might be experiencing its
driest period in 800 years. Similarly, the NCA3 projects that heavy
downpours are expected to increase in many regions, with precipitation
events in general becoming less frequent but more intense. This trend
has already been observed in regions such as the Midwest, Northeast,
and upper Great Plains. Meanwhile, the NRC Climate Stabilization
Targets assessment found that the area burned by wildfire is expected
to grow by 2 to 4 times for 1[emsp14][deg]Celsius
(1.8[emsp14][deg]Fahrenheit) of warming. For 3[emsp14][deg]Celsius of
warming, the assessment found that nine out of 10 summers would be
warmer than all but the 5 percent of warmest summers today; leading to
increased frequency, duration, and intensity of heat waves.
Extrapolations by the NCA3 also indicate that Arctic sea ice in summer
may essentially disappear by mid-century. Retreating snow and ice, and
emissions of carbon dioxide and methane released from thawing
permafrost, will also amplify future warming.
    Since the 2009 Endangerment Finding, the USGCRP NCA3, and multiple
NRC assessments have projected future rates of sea level rise that are
40 percent larger to more than twice as large as the previous estimates
from the 2007 IPCC 4th Assessment Report. This is due, in part, to
improved understanding of the future rate of melt of the Antarctic and
Greenland ice sheets. The NRC Sea Level Rise assessment projects a
global sea level rise of 0.5 to 1.4 meters (1.6 to 4.6 feet) by 2100.
An NRC national security implications assessment suggests that ``the
Department of the Navy should expect roughly 0.4 to 2 meters (1.3 to
6.6 feet) global average sea-level rise by 2100,'' \35\ and the NRC
Climate Stabilization Targets assessment states that an increase of
3[emsp14][deg]Celsius will lead to a sea level rise of 0.5 to 1 meter
(1.6 to 3.3 feet) by 2100. These assessments continue to recognize that
there is uncertainty inherent in accounting for ice sheet processes: It
is possible that the ice sheets could melt more quickly than expected,
leading to more sea level rise than currently projected. Additionally,
local sea level rise can differ from the global total depending on
various factors: The east coast of the United States in particular is
expected to see higher rates of sea level rise than the global average.
For comparison, the NCA3 states that ``five million Americans and
hundreds of billions of dollars of property are located in areas that
are less than four feet above the local high-tide level,'' and the NCA3
finds that ``[c]oastal infrastructure, including roads, rail lines,
energy infrastructure, airports, port facilities, and military bases,
are increasingly at risk from sea level rise and damaging

storm surges.'' \36\ Also, because of the inertia of the oceans, sea
level rise will continue for centuries after GHG concentrations have
stabilized (though reducing GHG emissions will slow the rate of sea
level rise and, therefore, reduce the associated risks and impacts).
Additionally, there is a threshold temperature above which the
Greenland ice sheet will be committed to inevitable melting: According
to the NCA3, some recent research has suggested that even present day
CO2 levels could be sufficient to exceed that threshold.
---------------------------------------------------------------------------

    \35\ NRC, 2011: National Security Implications of Climate Change
for U.S. Naval Forces. The National Academies Press, p. 28.
    \36\ Melillo, Jerry M., Terese (T.C.) Richmond, and Gary W.
Yohe, Eds., 2014: Climate Change Impacts in the United States: The
Third National Climate Assessment. United States Global Change
Research Program, p. 9.
---------------------------------------------------------------------------

    In general, climate change impacts are expected to be unevenly
distributed across different regions of the United States and have a
greater impact on certain populations, such as indigenous peoples and
the poor. The NCA3 finds climate change impacts such as the rapid pace
of temperature rise, coastal erosion, and inundation related to sea
level rise and storms, ice and snow melt, and permafrost thaw are
affecting indigenous people in the United States. Particularly in
Alaska, critical infrastructure and traditional livelihoods are
threatened by climate change and, ``[i]n parts of Alaska, Louisiana,
the Pacific Islands, and other coastal locations, climate change
impacts (through erosion and inundation) are so severe that some
communities are already relocating from historical homelands to which
their traditions and cultural identities are tied.'' \37\ The IPCC AR5
notes, ``Climate-related hazards exacerbate other stressors, often with
negative outcomes for livelihoods, especially for people living in
poverty (high confidence). Climate-related hazards affect poor people's
lives directly through impacts on livelihoods, reductions in crop
yields, or destruction of homes and indirectly through, for example,
increased food prices and food insecurity.'' \38\
---------------------------------------------------------------------------

    \37\ Melillo, Jerry M., Terese (T.C.) Richmond, and Gary W.
Yohe, Eds., 2014: Climate Change Impacts in the United States: The
Third National Climate Assessment. United States Global Change
Research Program, p. 17.
    \38\ IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and
Vulnerability. Part A: Global and Sectoral Aspects. Contribution of
Working Group II to the Fifth Assessment Report of the
Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros,
D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee,
K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N.
Levy, S. MacCracken, P.R. Mastrandrea, and L.L. White (eds.)].
Cambridge University Press, p. 796.
---------------------------------------------------------------------------

    The impacts of climate change outside the United States, as also
pointed out in the 2009 Endangerment Finding, will also have relevant
consequences on the United States and our citizens. The NRC Climate and
Social Stress assessment concluded that it is prudent to expect that
some climate events ``will produce consequences that exceed the
capacity of the affected societies or global systems to manage and that
have global security implications serious enough to compel
international response.'' The NRC National Security Implications
assessment recommends preparing for increased needs for humanitarian
aid; responding to the effects of climate change in geopolitical
hotspots, including possible mass migrations; and addressing changing
security needs in the Arctic as sea ice retreats.
    In addition to future impacts, the NCA3 emphasizes that climate
change driven by manmade emissions of GHGs is already happening now and
that it is currently having effects in the United States. According to
the IPCC AR5 and the NCA3, there are a number of climate-related
changes that have been observed recently, and these changes are
projected to accelerate in the future. The planet warmed about
0.85[emsp14][deg]Celsius (1.5[emsp14][deg]Fahrenheit) from 1880 to
2012. It is extremely likely (greater than 95-percent probability) that
human influence was the dominant cause of the observed warming since
the mid-20th century, and likely (greater than 66-percent probability)
that human influence has more than doubled the probability of
occurrence of heat waves in some locations. In the Northern Hemisphere,
the last 30 years were likely the warmest 30 year period of the last
1,400 years. United States average temperatures have similarly
increased by 1.3[deg] to 1.9[emsp14][deg]F since 1895, with most of
that increase occurring since 1970. Global sea levels rose 0.19 meters
(7.5 inches) from 1901 to 2010. Contributing to this rise was the
warming of the oceans and melting of land ice. It is likely that 275
gigatons per year of ice melted from land glaciers (not including ice
sheets) since 1993, and that the rate of loss of ice from the Greenland
and Antarctic ice sheets increased substantially in recent years, to
215 gigatons per year and 147 gigatons per year, respectively, since
2002. For context, 360 gigatons of ice melt is sufficient to cause
global sea levels to rise 1 millimeter (mm). Annual mean Arctic sea ice
has been declining at 3.5 to 4.1 percent per decade, and Northern
Hemisphere snow cover extent has decreased at about 1.6 percent per
decade for March and 11.7 percent per decade for June. Permafrost
temperatures have increased in most regions since the 1980s by up to
3[emsp14][deg]Celsius (5.4[emsp14][deg]Fahrenheit) in parts of northern
Alaska. Winter storm frequency and intensity have both increased in the
Northern Hemisphere. The NCA3 states that the increases in the severity
or frequency of some types of extreme weather and climate events in
recent decades can affect energy production and delivery, causing
supply disruptions, and compromise other essential infrastructure such
as water and transportation systems.
    In addition to the changes documented in the assessment literature,
there have been other climate milestones of note. According to the
National Oceanic and Atmospheric Administration (NOAA), atmospheric
methane concentrations in 2014 were about 1,823 parts per billion, 150
percent higher than methane concentrations were in the year 1750. After
a few years of nearly stable concentrations from 1999 to 2006, methane
concentrations have resumed increasing at about 5 parts per billion per
year. Concentrations today are likely higher than they have been for at
least the past 800,000 years. Arctic sea ice has continued to decline,
with September of 2012 marking a new record low in terms of Arctic sea
ice extent, 40 percent below the 1979 to 2000 median. Sea level has
continued to rise at a rate of 3.2 mm per year (1.3 inches/decade)
since satellite observations started in 1993, more than twice the
average rate of rise in the 20th century prior to 1993.\39\ Also, 2015
was the warmest year globally in the modern global surface temperature
record, going back to 1880, breaking the record previously held by
2014; this now means that the last 15 years have been 15 of the 16
warmest years on record.\40\
---------------------------------------------------------------------------

    \39\ Blunden, J., and D.S. Arndt, Eds., 2015: State of the
Climate in 2014. Bull. Amer. Meteor. Soc., 96 (7), S1-S267.
    \40\ http://www.ncdc.noaa.gov/sotc/global/201513.
---------------------------------------------------------------------------

    These assessments and observed changes make it clear that reducing
emissions of GHGs across the globe is necessary in order to avoid the
worst impacts of climate change and underscore the urgency of reducing
emissions now. The NRC Committee on America's Climate Choices listed a
number of reasons ``why it is imprudent to delay actions that at least
begin the process of substantially reducing emissions.'' \41\ For
example:
---------------------------------------------------------------------------

    \41\ NRC, 2011: America's Climate Choices, The National
Academies Press.
---------------------------------------------------------------------------

     The faster emissions are reduced, the lower the risks
posed by climate change. Delays in reducing emissions could commit the
planet to a wide range

of adverse impacts, especially if the sensitivity of the climate to
GHGs is on the higher end of the estimated range.
     Waiting for unacceptable impacts to occur before taking
action is imprudent because the effects of GHG emissions do not fully
manifest themselves for decades and, once manifested, many of these
changes will persist for hundreds or even thousands of years.
     In the committee's judgment, the risks associated with
doing business as usual are a much greater concern than the risks
associated with engaging in strong response efforts.
    Methane is also a precursor to ground-level ozone, which can cause
a number of harmful effects on health and the environment (see section
IV.B.2 of this preamble). Additionally, ozone is a short-lived climate
forcer that contributes to global warming. In remote areas, methane is
a dominant precursor to tropospheric ozone formation.\42\ Approximately
50 percent of the global annual mean ozone increase since preindustrial
times is believed to be due to anthropogenic methane.\43\ Projections
of future emissions also indicate that methane is likely to be a key
contributor to ozone concentrations in the future.\44\ Unlike
NOX and VOC, which affect ozone concentrations regionally
and at hourly time scales, methane emissions affect ozone
concentrations globally and on decadal time scales given methane's
relatively long atmospheric lifetime compared to these other ozone
precursors.\45\ Reducing methane emissions, therefore, will contribute
to efforts to reduce global background ozone concentrations that
contribute to the incidence of ozone-related health
effects.46 47 48 The benefits of such reductions are global
and occur in both urban and rural areas.
---------------------------------------------------------------------------

    \42\ U.S. EPA. 2013. ``Integrated Science Assessment for Ozone
and Related Photochemical Oxidants (Final Report).'' EPA-600-R-10-
076F. National Center for Environmental Assessment--RTP Division.
Available at http://www.epa.gov/ncea/isa/.
    \43\ Myhre, G., D. Shindell, F.-M. Br[eacute]on, W. Collins, J.
Fuglestvedt, J. Huang, D. Koch, J.-F. Lamarque, D. Lee, B. Mendoza,
T. Nakajima, A. Robock, G. Stephens, T. Takemura and H. Zhang, 2013:
Anthropogenic and Natural Radiative Forcing. In: Climate Change
2013: The Physical Science Basis. Contribution of Working Group I to
the Fifth Assessment Report of the Intergovernmental Panel on
Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor,
S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley
(eds.)]. Cambridge University Press, Cambridge, United Kingdom and
New York, NY, USA. Pg. 680.
    \44\ Ibid.
    \45\ Ibid.
    \46\ West, J.J., Fiore, A.M. 2005. ``Management of tropospheric
ozone by reducing methane emissions.'' Environ. Sci. Technol.
39:4685-4691.
    \47\ Anenberg, S.C., et al. 2009. ``Intercontinental impacts of
ozone pollution on human mortality,'' Environ. Sci. & Technol. 43:
6482-6487.
    \48\ Sarofim, M.C., Waldhoff, S.T., Anenberg, S.C. 2015.
``Valuing the Ozone-Related Health Benefits of Methane Emission
Controls,'' Environ. Resource Econ. DOI 10.1007/s10640-015-9937-6.
---------------------------------------------------------------------------

2. VOC
    Many VOC can be classified as HAP (e.g., benzene \49\) which can
lead to a variety of health concerns such as cancer and noncancer
illnesses (e.g., respiratory, neurological). Further, VOC are one of
the key precursors in the formation of ozone. Tropospheric, or ground-
level, ozone is formed through reactions of VOC and NOX in
the presence of sunlight. Ozone formation can be controlled to some
extent through reductions in emissions of ozone precursors VOC and
NOX. A significantly expanded body of scientific evidence
shows that ozone can cause a number of harmful effects on health and
the environment. Exposure to ozone can cause respiratory system effects
such as difficulty breathing and airway inflammation. For people with
lung diseases such as asthma and chronic obstructive pulmonary disease
(COPD), these effects can lead to emergency room visits and hospital
admissions. Studies have also found that ozone exposure is likely to
cause premature death from lung or heart diseases. In addition,
evidence indicates that long-term exposure to ozone is likely to result
in harmful respiratory effects, including respiratory symptoms and the
development of asthma. People most at risk from breathing air
containing ozone include: Children; people with asthma and other
respiratory diseases; older adults; and people who are active outdoors,
especially outdoor workers. An estimated 25.9 million people have
asthma in the United States, including almost 7.1 million children.
Asthma disproportionately affects children, families with lower
incomes, and minorities, including Puerto Ricans, Native Americans/
Alaska Natives, and African-Americans.\50\
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    \49\ Benzene IRIS Assessment: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
    \50\ National Health Interview Survey (NHIS) Data, 2011. http://www.cdc.gov/asthma/nhis/2011/data.htm.
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    Scientific evidence also shows that repeated exposure to ozone can
reduce growth and have other harmful effects on sensitive plants and
trees. These types of effects have the potential to impact ecosystems
and the benefits they provide.
3. SO2
    Current scientific evidence links short-term exposures to
SO2, ranging from 5 minutes to 24 hours, with an array of
adverse respiratory effects including bronchoconstriction and increased
asthma symptoms. These effects are particularly important for
asthmatics at elevated ventilation rates (e.g., while exercising or
playing).
    Studies also show an association between short-term exposure and
increased visits to emergency departments and hospital admissions for
respiratory illnesses, particularly in at-risk populations including
children, the elderly, and asthmatics.
    SO2 in the air can also damage the leaves of plants,
decrease their ability to produce food--photosynthesis--and decrease
their growth. In addition to directly affecting plants, SO2,
when deposited on land and in estuaries, lakes, and streams, can
acidify sensitive ecosystems resulting in a range of harmful indirect
effects on plants, soils, water quality, and fish and wildlife (e.g.,
changes in biodiversity and loss of habitat, reduced tree growth, loss
of fish species). Sulfur deposition to waterways also plays a causal
role in the methylation of mercury.\51\
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    \51\ U.S. EPA. Intergrated Science Assessment (ISA) for Oxides
of Nitrogen and Sulfur Ecological Criteria (2008 Final Report). U.S.
Envieronmental Protection Agency, Washington, DC, EPA/600/R-08/082F,
2008.
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C. GHGs, VOC and SO2 Emissions From the Oil and Natural Gas
Source Category

    The previous section explains how GHGs, VOCs, and SO2
emissions are ``air pollution'' that may reasonably be anticipated to
endanger public health and welfare. This section provides estimated
emissions of these substances from the oil and natural gas source
category.
1. Methane Emissions in the United States and From the Oil and Natural
Gas Industry
    The GHGs addressed by the 2009 Endangerment Finding consist of six
well-mixed gases, including methane. For the analysis supporting this
regulation, we used the methane 100-year GWP of 25 to be consistent
with and comparable to key Agency emission quantification programs such
as the Inventory of United States Greenhouse Gas Emissions and Sinks
(GHG Inventory), and the GHGRP.\52\ The use of the 100-year GWP of 25
for methane value is currently required by the United Nations Framework
Convention on Climate Change (UNFCCC) for reporting of national
inventories, such as the United States GHG Inventory.

Updated estimates for methane GWP have been developed by IPCC
(2013).\53\ The most recent 100-year GWP estimates for methane range
from 28 to 36. In discussing the science and impacts of methane
emissions generally, here we use the GWP range of 28 to 36. When
presenting emissions estimates, we use the GWP of 25 for consistency
and comparability with other emissions estimates in the United States
and internationally. Methane has an atmospheric life of about 12 years.
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    \52\ See, for example, Table A-1 to subpart A of 40 CFR part 98.
    \53\ IPCC, 2013: Climate Change 2013: The Physical Science
Basis. Contribution of Working Group I to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Stocker,
T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A.
Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and New York, NY, USA,
1535pp.
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    Official United States estimates of national level GHG emissions
and sinks are developed by the EPA for the United States GHG Inventory
to comply with commitments under the UNFCCC. The United States GHG
Inventory, which includes recent trends, is organized by industrial
sectors. Natural gas and petroleum systems are the largest emitters of
methane in the United States. These systems emit 32 percent of United
States anthropogenic methane.
    Table 3 below presents total United States anthropogenic methane
emissions for the years 1990, 2005, and 2014.

                               Table 3--United States Methane Emissions by Sector
                          [Million metric ton carbon dioxide equivalent (MMT CO2 Eq.)]
----------------------------------------------------------------------------------------------------------------
                             Sector                                    1990            2005            2014
----------------------------------------------------------------------------------------------------------------
Oil and Natural Gas Production, and Natural Gas Processing and               201             203             232
 Transmission...................................................
Landfills.......................................................             180             154             148
Enteric Fermentation............................................             164             169             164
Coal Mining.....................................................              96              64              68
Manure Management...............................................              37              56              61
Other Methane Sources \54\......................................              95              71              57
                                                                 -----------------------------------------------
    Total Methane Emissions.....................................             774             717             731
----------------------------------------------------------------------------------------------------------------
Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2014 (published April 15,
  2016), calculated using GWP of 25. Note: Totals may not sum due to rounding.

    Oil and natural gas production and natural gas processing and
transmission systems encompass wells, natural gas gathering and
processing facilities, storage, and transmission pipelines. These
components are all important aspects of the natural gas cycle--the
process of getting natural gas out of the ground and to the end user.
In the oil industry, some underground crude oil contains natural gas
that is entrained in the oil at high reservoir pressures. When oil is
removed from the reservoir, associated natural gas is produced.
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    \54\ Other sources include remaining natural gas distribution,
petroleum transport and petroleum refineries, forest land,
wastewater treatment, rice cultivation, stationary combustion,
abandoned coal mines, petrochemical production, mobile combustion,
composting, and several sources emitting less than 1 MMT
CO2 Eq. in 2013.
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    Methane emissions occur throughout the natural gas industry. They
primarily result from normal operations, routine maintenance, fugitive
leaks, and system upsets. As gas moves through the system, emissions
occur through intentional venting and unintentional leaks. Venting can
occur through equipment design or operational practices, such as the
continuous bleed of gas from pneumatic controllers (that control gas
flows, levels, temperatures, and pressures in the equipment), or
venting from well completions during production. In addition to vented
emissions, methane losses can occur from leaks (also referred to as
fugitive emissions) in all parts of the infrastructure, from
connections between pipes and vessels, to valves and equipment.
    In petroleum systems, methane emissions result primarily from field
production operations, such as venting of associated gas from oil
wells, oil storage tanks, and production-related equipment such as gas
dehydrators, pig traps, and pneumatic devices.
    Tables 4 (a) and (b) below present total methane emissions from
natural gas and petroleum systems, and the associated segments of the
sector, for years 1990, 2005, and 2014, in MMT CO2 Eq.
(Table 4 (a)) and kilotons (or thousand metric tons) of methane (Table
4 (b)).

               Table 4(a)--United States Methane Emissions From Natural Gas and Petroleum Systems
                                                    [MMT CO2]
----------------------------------------------------------------------------------------------------------------
                             Sector                                    1990            2005            2014
----------------------------------------------------------------------------------------------------------------
Oil and Natural Gas Production and Natural Gas Processing and                201             203             232
 Transmission (Total)...........................................
Natural Gas Production..........................................              83             108             109
Natural Gas Processing..........................................              21              16              24
Natural Gas Transmission and Storage............................              59              31              32
Petroleum Production............................................              38              48              67
----------------------------------------------------------------------------------------------------------------
Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2014 (published April 15,
  2016), calculated using GWP of 25. Note: Totals may not sum due to rounding.

               Table 4(b)--United States Methane Emissions From Natural Gas and Petroleum Systems
                                                    [kt CH4]
----------------------------------------------------------------------------------------------------------------
                             Sector                                    1990            2005            2014
----------------------------------------------------------------------------------------------------------------
Oil and Natural Gas Production and Natural Gas Processing and              8,049           8,131           9,295
 Transmission (Total)...........................................
Natural Gas Production..........................................           3,335           4,326           4,359
Natural Gas Processing..........................................             852             655             960
Natural Gas Transmission and Storage............................           2,343           1,230           1,282
Petroleum Production............................................           1,519           1,921           2,694
----------------------------------------------------------------------------------------------------------------
Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2014 (published April 15,
  2016), in kt (1,000 tons) of CH4. Note: Totals may not sum due to rounding.

2. United States Oil and Natural Gas Production and Natural Gas
Processing and Transmission GHG Emissions Relative to Total United
States GHG Emissions
    Relying on data from the United States GHG Inventory, we compared
United States oil and natural gas production and natural gas processing
and transmission GHG emissions to total United States GHG emissions as
an indication of the role this source plays in the total domestic
contribution to the air pollution that is causing climate change. In
2014, total United States GHG emissions from all sources were 6,871 MMT
CO2 Eq.

Table 5--Comparisons of United States Oil and Natural Gas Production and Natural Gas Processing and Transmission
                               CH4 Emissions to Total United States GHG Emissions
----------------------------------------------------------------------------------------------------------------
                                                         2010        2011        2012        2013        2014
----------------------------------------------------------------------------------------------------------------
Total U.S. Oil & Gas Production and Natural Gas            207.0       214.3       218.8       228.0       232.4
 Processing & Transmission methane Emissions (MMT
 CO2 Eq.)...........................................
Share of Total U.S. GHG Inventory...................        3.0%        3.1%        3.3%        3.4%        3.4%
Total U.S. GHG Emissions (MMT CO2 Eq.)..............       6,985       6,865       6,643       6,800       6,870
----------------------------------------------------------------------------------------------------------------
Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2014 (published April 15,
  2016), calculated using CH4 GWP of 25. Note: Totals may not sum due to rounding.

    In 2014, emissions from oil and natural gas production sources and
natural gas processing and transmission sources accounted for 232.4 MMT
CO2 Eq. methane emissions (using a GWP of 25 for methane),
accounting for 3.4 percent of total United States domestic GHG
emissions. The natural gas and petroleum systems source is the largest
emitter of methane in the United States. The sector also emitted 43 MMT
of CO2, mainly from acid gas removal during natural gas
processing (24 MMT) and flaring in oil and natural gas production (18
MMT). In total, these emissions (CH4 and CO2)
account for 4.0 percent of total United States domestic GHG emissions.
    Methane is emitted in significant quantities from the oil and
natural gas production sources and natural gas processing and
transmission sources that are being addressed within this rule.
3. United States Oil and Natural Gas Production and Natural Gas
Processing and Transmission GHG Emissions Relative to Total Global GHG
Emissions

Table 6--Comparisons of United States Oil and Natural Gas Production and Natural Gas Processing and Transmission
                                   CH4 Emissions to Total Global GHG Emissions
----------------------------------------------------------------------------------------------------------------
                                                         2010        2011        2012        2013        2014
----------------------------------------------------------------------------------------------------------------
Total U.S. Oil & Gas Production and Natural Gas            207.0       214.3       218.8       228.0       232.4
 Processing & Transmission methane Emissions (MMT
 CO2 Eq.)...........................................
Share of Total U.S. GHG Inventory...................        3.0%        3.1%        3.3%        3.4%        3.4%
Total U.S. GHG Emissions (MMT CO2 Eq.)..............       6,985       6,865       6,643       6,800       6,870
----------------------------------------------------------------------------------------------------------------
Emissions from the Inventory of United States Greenhouse Gas Emissions and Sinks: 1990-2014 (published April 15,
  2016), calculated using CH4 GWP of 25.

    For additional background information and context, we used 2012
World Resources Institute/Climate Analysis Indicators Tool (WRI/CAIT)
and International Energy Agency (IEA) data to make comparisons between
United States oil and natural gas production and natural gas processing
and transmission emissions and the emissions inventories of entire
countries and regions. Though the United States methane emissions from
oil and natural gas production and natural gas processing and
transmission are a seemingly small fraction (0.5 percent) of total
global emissions of all GHG from all sources, ranking United States
emissions of methane from oil and natural gas production and natural
gas processing and transmission against total GHG emissions for entire
countries (using 2012 WRI/CAIT data), shows that these emissions are
comparatively large as they exceed the national-level emissions totals
for all GHG and all anthropogenic sources for Greece, the Czech
Republic, Chile, Belgium, and

about 150 other countries.\55\ Furthermore, United States emissions of
methane from oil and natural gas production and natural gas processing
and transmission are greater than the sum of total emissions of 54 of
the lowest-emitting countries, using the 2012 WRI/CAIT data set.\56\
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