Feds’ oil-tank air regulations pushed out

Oil companies will have six months more to comply with emission regulations on oil storage tanks thanks to a recent decision by the Environmental Protection Agency.

Companies once had until Oct.15 to comply with new federal regulations requiring them to capture 95 percent of their emissions. They now have at least until next April to control organic compound emissions.

The federal delay comes as Colorado prepares to examine the same issue – how to reduce volatile organic compounds emitted from oil storage tanks. Those emissions are a key source of ozone pollution along the Front Range.

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The rules are tied to oil levels in storage tanks. Newer tanks are likely to be fuller because oil production is highest when wells are first drilled. Fuller tanks emit more volatile organic compounds, and therefore must meet the new guidelines quickly. Older tanks storing less oil have more time to comply with the regs.

Under changes to the federal rules, the following will occur:

• Tanks that come online after April 12, 2013, are likely to have higher emissions and must comply with the rules within 60 days or by April 15, 2014, whichever is later; and

• Tanks that came online before April 12, 2013 and which are likely to have lower emissions must comply with the new regulations by April 15, 2015.

The oil and natural-gas industry temporarily stores crude oil in tanks before it is moved to a pipeline or shipped by railroad. The storage tanks can emit ozone-forming volatile organic compounds, along with several toxic air pollutants, including benzene, which can cause cancer, according to the EPA. The oil and natural-gas industry is the largest industrial source of volatile organic compound emissions, a group of chemicals that contribute to the formation of ground-level ozone, or smog, according to the EPA. Exposure to ozone is linked to a wide range of health effects, including aggravated asthma.

Because of high ozone levels, a condition caused in part by oil storage tank emissions, the Front Range is out of compliance with the EPA’s ozone rules, said Peter Zalzal, staff attorney for the Environmental Defense Fund, which commented on the EPA’s proposal. The compounds include methane, a greenhouse gas that is more potent than carbon dioxide.

“Storage tanks are a significant source of smog-forming volatile organic compounds, hazardous air pollutants and climate-destabilizing methane emissions,” he said.

However, the delay in implementing the regulations is a cause for concern, considering the magnitude of storage tank emissions, he added.

“It’s imperative for EPA to move swiftly to address those emissions,” he said.

The delay came in part because the EPA underestimated the number of tanks that would need to be fitted with emission-control equipment, said Howard Feldman, director of regulatory and scientific affairs at the American Petroleum Institute. After API informed EPA of the greater number of tanks, he said, the agency changed the deadlines.

“We’re pleased that EPA made the change and recognized there was a shortcoming in the previous rule,” he said. “The industry is coming into compliance with federal rules … and that will continue to lower emissions going forward. That’s the good news for Colorado.”

The EPA updated its regulations Aug. 2 to ensure the tanks with the highest emissions are controlled first and that companies have adequate time to buy and install control equipment, an EPA spokeswoman said in a statement.

Oil storage tank pollution typically declines over time because the amount of liquid that moves through oil tanks decreases as production from wells slows and oil levels in tanks drop. The regulations will apply to storage tanks used in oil or natural-gas production that have the potential to emit six or more tons of volatile organic compounds annually and that were installed after Aug. 23, 2011.

The regulations also establish an alternative emissions limit that would let companies remove controls from tanks if they can show that they emit less than 4 tons per year of volatile organic compounds without controls.

In addition to EPA regulations, the state Air Pollution Control Division also will consider enhanced storage-tank regulations and expanded leak detection and repair requirements.

The Air Quality Control Commission plans meetings in November and February, a spokesman for the Colorado Department of Public Health and Environment said.

Colorado regulators had originally planned to begin deliberations this month, but extended them to begin in November because of the complicated nature of the rulemaking process, said Air Pollution Control Division director Will Allison.

“Colorado is considering its own rules regarding condensate tanks, storage tanks and produced water tanks that may even exceed (EPA’s) rules,´ said Stan Dempsey, president of the Colorado Petroleum Association. “That’s an ongoing discussion, and we’re participating in that conversation.”

Dempsey said the industry wants to ensure the state properly measures sources of volatile organic compounds: Oil and gas production isn’t the only source of those emissions.

“It’s mobile sources, it’s power plants,” Dempsey said. “There’s a wide range of emissions sources that contribute to that ozone issue.”

The Environmental Defense Fund also will be involved in Colorado’s rulemaking process.

“In the past, Colorado really has been a leader in developing common-sense requirements to control emissions, including from storage tanks,” Zalzal said. “This upcoming rulemaking really presents an opportunity to continue that leadership.”