The Environmental Protection Agency (EPA) has published the final rule set of revised New Source Performance Standards (NSPS) to reduce hazardous air pollutants (HAPS) from oil and gas operations within the United States. These standards, known as Quad O, will impose strict compliance obligations for the production, transmission, and processing sectors of the oil and gas industry.
On March 8th, 2024, the Environmental Protection Agency (EPA) published the final rule set of revised New Source Performance Standards (NSPS) to reduce methane emissions and other hazardous air pollutants (HAPS) from upstream and midstream natural gas and crude oil operators within the United States. These standards formally known as EPA 40 Code of Federal Regulations, Part 60, subpart OOOO or Quad O, will impose stringent and potentially costly compliance obligations for the production, transmission, and processing sectors of the oil and gas industry. The final rule set includes additional standards for sources constructed, modified, or reconstructed after December 6, 2022, and stringent first-time standards for methane emissions from existing sources. The new Quad O rules comprise two main components, Quad Ob and Quad Oc.
Background of Quad O:
The first iteration of Quad O, published in 2012, implemented new volatile organic compounds (VOCs), hazardous air pollutants (HAPs) and methane monitoring and reduction requirements from various sources within the oil and natural gas industry. In 2016, Quad Oa was released which expanded the number of facilities subject to regulations to include methane emissions reduction and monitoring from sources constructed, reconstructed, or modified after September 15, 2015. In 2021, Quad O was amended again, and oil and gas sources were divided into four classes: Quad O, Oa, Ob, and Oc.
Quad O: New, modified, or reconstructed sources after August 23, 2011, but on or before September 18, 2015.
Quad Oa: New, modified, or reconstructed sources after September 18, 2015, but on or before November 15, 2021.
Quad Ob: New, modified, or reconstructed after December 6, 2022.
Quad Oc: Existing sources, including sources that commenced construction, reconstruction, or modification before December 6, 2022.
Key Impacts:
Methane Emissions Reduction
Under Quad Oc, air pollution control agencies must develop implementation plans for methane emissions as strict (or equivalent) as the final Quad Ob rule and submit them for EPA approval.
Flaring Restrictions
The updated Quad Ob standards mandate the phase-out of routine flaring of gas from new oil wells. Effective March 8, 2026, gas from these wells must be directed to a sales line, used on-site, or for other beneficial purposes, as flaring will be restricted except under temporary or emergency circumstances.
Super Emitter Program
Within the updated rule set the EPA has introduced a Super Emitter Program which aims to address high methane emission sources within the oil and gas industry. Local regulatory agencies and certified third parties can submit notifications to the EPA when detecting "super-emitter events," defined as emissions of 100 kilograms of methane p er hour or greater. Upon receiving a notification, the owner or operator must investigate the event within 5 calendar days and submit a report to the EPA within 15 days.
Waste Emissions Charge (Methane Fee)
In 2022 the EPA introduced the Waste Emissions Charge (WEC) which applies to oil and gas facilities that emit more than 2500 metric tons Co2 equivalent per year. Starting in 2024, owners and operators of oil and gas facilities will incur a fee of $900 per ton of methane emitted. That fee is set to increase to $1,200 per metric ton in 2025 and $1,500 in 2026 and later. However, facilities that comply with the new methane regulations outlined in Quad Ob and Quad Oc standards may be exempt from this fee.
Process Controllers and Pneumatic Pumps
Quad Ob and Oc regulations mandate zero methane and VOC emissions for process controllers and pumps, except for sites in Alaska that lack onsite power. Quad Ob facilities must ensure compliance with the zero-emissions standard for process controllers and pumps (excluding Alaska) by March 8, 2025, with interim standards such as low-bleed and intermittent process controllers. Quad Oc facilities may have up to 36 months after the state or Tribal plan submittal deadline to comply, with potential earlier deadlines set by state or Tribal plans.
Leak Detection and Monitoring Regulations
The updated rule set mandates routine monitoring and timely repair of natural gas leaks, allowing flexibility in using advanced emissions monitoring technology as an alternative to conventional methods like audio, visual and olfactory (AVO) inspections, Optical Gas Imaging (OGI), and EPA Method 21. Approval from the EPA is required for alternative technologies, with a streamlined approval process similar to existing alternative test methods. Operators can adjust monitoring frequencies based on technology effectiveness, with minimum screening frequencies quarterly.
Storage Tank Regulations
The finalized regulations for storage tanks will significantly expand the scope of new and existing sources subject to federal emissions standards. The threshold triggering requirements now apply to aggregated emissions from storage tank batteries, rather than individual tanks. Storage tanks are now subject to sitewide tank emissions of six TPY of VOC or 20 TPY of methane. Tank batteries exceeding these limits must reduce VOC and methane emissions by 95%, and each battery must be equipped with closed vent systems.
Well Completion Practices
Owners and operators will now be required to conduct monitoring surveys for fugitive emissions components at well sites until permanent closure, as outlined in the required well closure plan. Upon completion of well closure activities, a final OGI site survey must be conducted and recorded in the well closure plan, with any detected emissions eliminated.
Compressor Regulations
The new Quad Ob standards impact compressors at centralized production facilities and introduce requirements for dry seal centrifugal compressors. Reciprocating compressors must maintain emissions below two standard cubic feet per minute (scfm) per cylinder, while dry seal centrifugal compressors must maintain flow rates below 10 scfm per seal, and wet seal centrifugal compressors must maintain flow rates below three scfm per seal or achieve a 95% reduction in emissions.
Compliance Timeline
Under Quad Ob new and modified oil and gas sources (after December 6, 2022) must comply upon initial start-up or by May 7, 2024 (60 days after publication in the Federal Register) or, whichever is later.
The Quad Oc regulations mandate states and Tribes to submit plans addressing existing sources within 24 months, with EPA having 14 months to decide on plan submissions. Compliance deadlines in the plans must not exceed 22 months after EPA's decision or March 2029 (five years from the effective date). Facilities must comply with state plans within 36 months after submission, pending EPA approval.
While oil and gas operators will have 3 years to comply with the new Quad Oc standards after state plan submissions, identifying necessary resources needed to meet the new rule and addressing the potential challenges proactively will ensure operations remain viable as environmental regulations become stricter over time.
