Increased EPA Flexibility Predicted for Oil & Gas Audits by New Owners

A January 29, 2019 article in The Hill predicted EPA will soon announce a finalized audit policy for new owners of oil and gas facilities.  The Hill predicts the finalized “New Owner Clean Air Act Audit Program for Oil and Natural Gas Exploration and Production Facilities” will include greater flexibility than what appeared in the original draft of the program published in April 2018.

As the title suggests, the program will allow new owners the opportunity to perform audits of oil and gas facilities. The new owners will receive potential penalty reductions for non-compliance issues that originated during prior ownership, were identified in the audit, and are promptly corrected.

Nine Months to Report, 180 Days to Correct
The finalized program will give new owners nine months from acquisition to report emissions issues; the draft allowed only six.  Also, the program will allow for 180 days, rather than the previously proposed 60, from the date of discovery to the completion of corrective action.

Specific Program for Oil & Gas Sector
The Hill reported it received two internal EPA draft memos.  One indicated the program would give oil and gas companies penalty reductions beyond what EPA gives under its general audit policy.  The second indicated the policy will provide greater certainty for new owners and increased compliance across the sector.

The article indicated the program will include a focus on compliance by tank vapor control systems in upstream services, due to EPA seeing increased non-compliance with these systems.  This could be an indication that those in this and related sectors may see more oversight regarding tank vapor control systems.

The article suggests EPA was close to announcing the finalized program just as the shutdown began.

State or EPA Audit Program?
Many states, including Texas, have state audit programs.  It is often preferable in Texas to use the state program and report only to TCEQ.  In other states, the applicable EPA program or a combination of both may be the better choice.  Companies should evaluate on a state by state basis.

Presenting Wednesday at the 4C H.S.E. Conference in Austin
At the 2019 4C H.S.E. Conference in Austin, 2 PM Wednesday, February 6, I will be presenting “Federal, State and Local Enforcement.” 

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