2024-09306. California Air Plan Revisions; California Air Resources Board and Local California Air Districts; Crude Oil and Natural Gas Facilities

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

The Environmental Protection Agency (EPA) is proposing to approve revisions to a California statewide rule and six California air district rules into the California State Implementation Plan (SIP) under the Clean Air Act (CAA or the Act). These revisions concern emissions of volatile organic compounds (VOCs) from crude oil and natural gas facilities. Based on our proposed finding that these revisions correct previously-identified deficiencies in these rules, we are now proposing to fully approve the reasonably available control technology (RACT) requirement for the 2008 and 2015 ozone National Ambient Air Quality Standards (NAAQS) for sources covered by the EPA's 2016 Control Techniques Guidelines for the Oil and Natural Gas Industry (“2016 Oil and Gas CTG”) for the Sacramento Metropolitan Air Quality Management District (SMAQMD), San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD), Ventura County Air Pollution Control District (VCAPCD), and the Yolo-Solano Air Quality Management District (YSAQMD). We are also proposing to conditionally approve the RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the EPA's 2016 Oil and Gas CTG for the South Coast Air Quality Management District (SCAQMD). We are taking comments on this proposal and plan to follow with a final action.

DATES:

Comments must be received on or before June 3, 2024.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R09-OAR-2024-0175 at https://www.regulations.gov. For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission ( i.e., on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/​dockets/​commenting-epa-dockets. If you need assistance in a language other than English or if you are a person with disabilities who needs a reasonable accommodation at no cost to you, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT:

Nicole Law, EPA Region IX, 75 Hawthorne St., San Francisco, CA, 94105. By phone: [phone] or by email at [e-mail].

SUPPLEMENTARY INFORMATION:

Throughout this document, “we,” “us” and “our” refer to the EPA.

Table of Contents

I. The State's Submittal

A. What did the State submit?

B. Are there earlier versions of the submitted documents in the SIP?

C. What is the purpose of the submitted rules?

II. The EPA's Evaluation and Action

A. How is the EPA evaluating these rules?

B. Do these rules meet the evaluation criteria?

C. Were there any newly identified deficiencies with the April 2, 2024 submitted CARB Oil and Gas Methane Rule?

D. The EPA's Recommendations To Further Improve the Rules

E. Public Comment and Proposed Action

III. Incorporation by Reference

IV. Statutory and Executive Order Reviews

I. The State's Submittal

A. What did the State submit?

Table 1 lists the rules addressed by this proposal with the dates that they were adopted and submitted by the California Air Resources Board (CARB).

Table 1—Submitted Rules

Agency	Rule title	Adopted/amended	Submitted
CARB	California Code of Regulations, Title 17, Division 3, Chapter 1, Subchapter 10 Climate Change, Article 4 Subarticle 13: Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“CARB Oil and Gas Methane Rule”)	06/22/2023	04/02/2024
SJVUAPCD	Rule 4409—Components at Light Crude Oil Production Facilities, Natural Gas Production Facilities, and Natural Gas Processing Facilities	06/15/2023	10/13/2023
SJVUAPCD	Rule 4623—Storage of Organic Liquids *	06/15/2023	10/13/2023
SJVUAPCD	Rule 4401—Steam-Enhanced Crude Oil Production Wells *	06/15/2023	10/13/2023
VCAPCD	Rule 71.1—Crude Oil Production and Separation	07/11/2023	01/10/2024
SCAQMD	Rule 463—Organic Liquid Storage	05/05/2023	10/13/2023
SCAQMD	Rule 1178—Further Reductions of VOC Emissions from Storage Tanks at Petroleum Facilities	09/01/2023	02/14/2024
*  In two letters from Sheraz Gill, Deputy Air Pollution Control Officer, SJVUAPCD, to Lisa Beckham, Manager, EPA Region IX, both dated April 18, 2024, SJVUAPCD described administrative corrections to Rule 4401 section 5.4.4.2 to clarify which tables to refer to for repair leak time frames and Rule 4623 to correct table numbers and references throughout Rule 4623. The administrative corrections are minor, only clarify what is already in the rule, and do not impact our analysis of the approvability of the rules. The corrections are consistent with SJVUAPCD's Board's intent and SJVUAPCD has submitted the revised rules to the EPA to replace earlier submitted versions. For this proposed action, we are basing our evaluation on the SJVUAPCD rules as corrected.

The EPA has reviewed the submittals containing the documents listed in table 1 and finds that they fulfill the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.

The March 26, 2024, submittal letter to the EPA from CARB included a commitment to submit an amended version of SCAQMD Rule 1148.1 within 12 months of the effective date of our final action that will remedy the deficiency identified in this document.^[1]

B. Are there earlier versions of the submitted documents in the SIP?

On September 30, 2022 (87 FR 59314), we finalized a limited approval and limited disapproval of California Code of Regulations, Title 17, Division 3, Chapter 1, Subchapter 10 Climate Change, Article 4 Subarticle 13: Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“CARB Oil and Gas Methane Rule”) as adopted on March 23, 2017. That action also finalized a disapproval of the RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the 2016 Oil and Gas CTG regulated by various California air districts. CARB adopted revisions to the SIP-approved version of the CARB Oil and Gas Methane Rule on June 22, 2023, and submitted them to us on April 2, 2024.

We previously approved earlier versions of the six local air rules listed in table 1 into the SIP as follows: SJVUAPCD Rule 4409 on March 23, 2006 (71 FR 14652), SJVUAPCD Rule 4623 on September 13, 2005 (70 FR 53936), SJVUAPCD Rule 4401 on November 16, 2011 (76 FR 70886), VCAPCD Rule 71.1 on August 4, 1994 (59 FR 39690), SCAQMD Rule 463 on March 28, 2013 (78 FR 18853), and SCAQMD Rule 1178 on August 28, 2007 (72 FR 49196).

If we finalize our approval as proposed, the amended versions of the rules listed in table 1 will replace the previously approved versions of these rules in the SIP.

C. What is the purpose of the submitted rules?

Emissions of VOCs contribute to the production of ground-level ozone, smog and particulate matter (PM), which harm human health and the environment. Section 110(a) of the CAA requires states to submit plans that provide for implementation, maintenance, and enforcement of the NAAQS. In addition, CAA section 182(b)(2) requires, among other things, that SIPs for ozone nonattainment areas classified as “Moderate” or higher implement RACT for any category of sources covered by a control techniques guidelines (CTG) document. SMAQMD, SJVUAPCD, VCAPCD, SCAQMD, and YSAQMD all regulate ozone nonattainment areas that are classified as Moderate or higher for the 2008 and 2015 8-hour ozone NAAQS.^[2] The State is required to submit SIP revisions that implement RACT-level controls for all sources covered by a CTG document within the applicable nonattainment areas. The CARB Oil and Gas Methane Rule was submitted to establish RACT-level VOC controls on sources covered by the 2016 Oil and Gas CTG in these areas.

The CARB Oil and Gas Methane Rule establishes methane emission standards for crude oil and natural gas facilities in furtherance of the California Global Warming Solutions Act (AB 32, as codified in sections 38500-38599 of the California Health and Safety Code). The rule can be used to limit VOC emissions to meet RACT requirements because many of the methane controls in the CARB Oil and Gas Methane Rule also reduce VOC emissions. Additionally, the CARB Oil and Gas Methane Rule relies, in part, on requirements in local air district rules to establish RACT-level controls on VOC emissions. Five of those rules are already approved into the California SIP and we are proposing approval of the other six in this rulemaking.

SJVUAPCD Rule 4401 is designed to limit VOC emissions at steam-enhanced crude oil production wells. SJVUAPCD Rule 4409 is designed to control VOC emissions from leaking components at natural gas processing facilities and light crude oil and natural gas production facilities. SJVUAPCD Rule 4623 is designed to decrease VOC emissions from the storage of organic liquids. VCAPCD Rule 71.1 controls VOCs by establishing requirements for equipment used in the production, gathering, storage, processing, and separation of crude oil and natural gas from any petroleum production permit unit prior to custody transfer. SCAQMD Rule 463 and Rule 1178 control VOCs by establishing roof and cover requirements as well as vapor recovery system requirements for stationary above-ground tanks storing organic liquids.

The EPA's technical support documents (TSDs) for this action have more information about these rules and are included in the docket for this rulemaking.^[3]

II. The EPA's Evaluation and Action

A. How is the EPA evaluating these rules?

Rules in the SIP must be enforceable (see CAA section 110(a)(2)) and must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)). In addition, because these rules were submitted in part to satisfy the RACT requirement for sources covered by the 2016 Oil and Gas CTG in the applicable local air districts, these rules must establish RACT level controls for such sources. Section III.D of the preamble to the EPA's final rule to implement the 2008 8-hour ozone NAAQS and sections III.F and IV.B of the preamble to the EPA's final rule to implement the 2015 8-hour ozone NAAQS discusses RACT requirements.^[4]

The CARB Oil and Gas Methane Rule applies statewide, including within the applicable local air districts. However, the CARB Oil and Gas Methane Rule contains exemptions for certain equipment, provided that the equipment is subject to one of several specified local air district rules. Therefore, in order to establish RACT level controls for all facilities covered by the 2016 Oil and Gas CTG, both the CARB Oil and Gas Methane Rule and the local air district rules referenced within the CARB Oil and Gas Methane Rule must implement RACT.

In our September 30, 2022 action, we found that the CARB Oil and Gas Methane Rule, and the associated local air district rules were largely consistent with the relevant CAA requirements, including the requirement to implement RACT for sources covered by the CTG. However, in that action we identified a list of specific deficiencies that prevented full approval of the CARB Oil and Gas Methane Rule and the underlying RACT requirement in the applicable local air districts, which served as the bases for our disapproval of the RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the 2016 Oil and Gas CTG. Our proposed approval of the CARB Oil and Gas Methane Rule and the associated local air district rules in this action does not otherwise alter our previous determination that these rules together establish RACT-level controls for all sources subject to the 2016 Oil and Gas CTG within the applicable local air districts, but for the specified deficiencies. As a result, in this action, we focus our analysis primarily on the revisions that have been made to these seven rules, and supporting analysis, to cure the previously identified deficiencies and serve as the bases for now proposing to approve and conditionally approve ^[5] the associated RACT requirement for the 2008 and 2015 ozone NAAQS.

Guidance and policy documents that we used to evaluate enforceability, revision/relaxation, and rule stringency requirements for the applicable criteria pollutants include the following:

1. “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook, revised January 11, 1990).

3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

4. EPA 453/B-16-001, Control Techniques Guidelines for the Oil and Natural Gas Industry, October 2016.

B. Do these rules meet the evaluation criteria?

In our 2022 action, we determined that the CARB Oil and Gas Methane Rule established RACT level controls except for certain deficiencies that are addressed by this rulemaking.^[6] The revisions to the submitted CARB Oil and Gas Methane Rule as well as the six submitted California District rules correct the deficiencies identified in the EPA's previous action. Our analysis in our previous action relied on the CARB Oil and Gas Methane Rule and the SIP-approved local air district rules regulating sources covered by the 2016 Oil and Gas CTG. Some of the deficiencies were contained in the applicable local air district rules and precluded approval of the RACT requirement for these districts, even if the deficiencies in the CARB Oil and Gas Methane Rule were rectified. Our proposed approval of the CARB Oil and Gas Methane Rule and the revised local air district rules addressing these deficiencies does not otherwise alter our previous RACT determination.

On April 2, 2024, CARB submitted the CARB Oil and Gas Methane Rule (adopted June 22, 2023), to correct the deficiencies of the limited disapproval. CARB also submitted rules for the SCAQMD, VCAPCD, and SJVUAPCD on the dates specified in table 1 to correct the deficiencies of the disapproved RACT requirement from our September 30, 2022 action. Below we describe the prior deficiencies, explain how they have been corrected, and evaluate the overall enforceability and stringency of the submitted rules. Our TSD for the CARB Oil and Gas Methane Rule and six additional TSDs for the district rules include in-depth descriptions of the deficiencies and how they have been corrected.

1. Deficiencies in the CARB Oil and Gas Methane Rule

Subsections 95668(a)(2)(C), 95669(b)(1), and 95670(a)(1) of the CARB Oil and Gas Methane Rule provided general exemptions from the requirements for storage tanks or components when “approved for use by a local air district” or “subject to a local air district requirement.” It was unclear which specific requirements these provisions pointed to and whether these requirements were in the SIP. Additionally, absent specificity about what is required for “approv[al],” these exemptions appeared to provide unbounded director's discretion. To address this deficiency, for areas that must meet RACT, CARB revised the Rule to specify the local air district rule(s) a source must follow in place of the specified requirements in the CARB Oil and Gas Methane Rule.

Subsections 95668(a), 95668(b)(4), and section 95671 of the CARB Oil and Gas Methane Rule did not contain a requirement for separator and tank systems to demonstrate initial and continuous compliance with the requirement to control emissions with a vapor collection system. Nor did the subsections specify which test methods must be used to determine compliance or requirements to report information demonstrating initial and continuous compliance. To address this deficiency, Appendices D and E were added to the CARB Oil and Gas Methane Rule to require initial and continuous compliance for subsection 95668(a) and section 95671. These appendices closely follow the CTG model rule requirements.^[7] Subsection 95668(a) and section 95671 were also revised to require owners and operators to follow the provisions in Appendix D and E. Subsection 95668(b)(4) was removed in response to another deficiency, so no further revisions were needed to address this deficiency with respect to subsection 95668(b)(4).

The CARB Oil and Gas Methane Rule provided exemptions from the vapor control requirements of the Rule for low use compressors in subsections 95668(c)(2)(A) and 95668(d)(2)(A); however, the 2016 Oil and Gas CTG does not provide for this type of exemption. To address this deficiency, CARB conducted an analysis using compressor data from 2018,^[8] which demonstrated that the active exempted compressors estimated emissions were 2.4 MT CH4/yr,^[9] and the total emissions from the compressors complying with subsections 95668(c) and (d) of the CARB Oil and Gas Methane Rule is 7,000 MT CH4/yr for reciprocating compressors and 52 MT CH4/yr for centrifugal compressors.^[10] According to CARB's analysis, the emissions from all of the exempted low use compressors in 2018 amounted to 0.03% of total methane emissions from compressors subject to subsections 95668(c) and (d). CARB expects the relative composition of methane and VOCs in natural gas to be similar for compressors subject to control requirements as for those qualifying for the low-use exemption.^[11] Based on this analysis, we consider the VOC emissions exempted for low use reciprocating natural gas compressors to represent a de minimis amount of emissions and therefore addresses this deficiency.

Subsections 95668(c)(4)(F) and 95668(d)(9) of the CARB Oil and Gas Methane Rule potentially allowed a leak to go unrepaired for an additional year after being identified, but the 2016 Oil and Gas CTG does not allow for this extended timeline. To address this deficiency, CARB removed the extended repair provisions in subsections 95668(c)(4)(F) and 95668(d)(9).

Subsections 95668(c)(4)(B), 95668(d)(4), and 95668(g)(1) of the CARB Oil and Gas Methane Rule required measuring flowrate using “direct measurement (high volume sampling, bagging, calibrated flow measuring instrument).” However, the Rule did not specify test methods or a calculation methodology for determining flowrate. To address this deficiency, in place of the parenthetical following the term “direct measurement” in these subsections, CARB added a definition of direct measurement in subsection 95667(a)(17) of the rule that only allows high volume sampling or measurement with a calibrated flow measuring instrument. The definition requires high-volume sampling be performed in accordance with the procedures in the new Appendix G, requires owners and operators using a calibrated flow measuring instrument to meet the requirements in U.S. EPA Method 2D, and requires that the instrument is calibrated annually according to that test method. Given the addition of the test methods in Appendix G, along with the definitional changes described above. These amendments correct the deficiency.

Subsections 95668(c)(3)(D)(1)(a), (c)(4)(D)(1)(a), (d)(6)(A)(1) and subsections 95669(h)(4)(A)(1) and (i)(5)(A)(1) of the CARB Oil and Gas Methane Rule described delay of repair that is not allowed to exceed a specified number of days unless CARB is notified and provided with an estimated repair completion time. This provided an open-ended and potentially indefinite period during which a leak could remain unrepaired. To address this deficiency, CARB added section 95670.1 to the Rule, which requires operators to submit an estimated repair date that is as soon as practicable and to complete repairs by that date. This request must be substantiated with specified documentation providing justification for any delay. CARB must approve or deny a delay of repair request within five days. This removes the open-ended, potentially indefinite periods for unrepaired leaks. Subsection 95668(c)(3)(D)(1)(a) of the Rule was removed, and subsections 95668(c)(4)(D)(1)(a) and (d)(6)(A)(1) and subsections 95669(h)(4)(A)(1) and (i)(5)(A)(1) were revised to require that the operators use the delay of repair provisions in section 95670.1 of the amended Rule. These amendments address the deficiency.

The 2016 Oil and Gas CTG applies to most storage vessels in the oil and natural gas industry constructed primarily of non-earthen materials that contain an accumulation of crude oil, condensate, intermediate hydrocarbon liquids, or produced water. Those storage vessels with a potential to emit (PTE) of 6 tons per year (tpy) or greater of VOC are required to implement RACT-level control. The 2016 Oil and Gas CTG recommends RACT-level control to provide for at least (1) 95% vapor control efficiency or (2) maintenance of actual VOC emissions below 4 tpy. Because CARB's rule only considers the separator and first tank connected to the separator to determine whether the source meets the 10 tpy methane emissions applicability threshold,^[12] it was not clear whether the rule captured all storage vessels at oil and gas facilities that meet or exceed the 2016 Oil and Gas CTG PTE threshold, and which are therefore required to implement RACT. To address this deficiency, CARB and the applicable local air districts have demonstrated that storage vessels at oil and gas facilities in ozone nonattainment areas are required to have RACT-level controls for VOCs when the PTE exceeds 6 tpy of VOCs. SJVUAPCD Rule 4623, SCAQMD Rule 463, and SCAQMD Rule 1178 have been amended to include storage vessels with PTE of 6 tpy VOC or greater. VCAPCD demonstrated that an explicit 6 tpy VOC applicability threshold was not needed in the rule because most storage vessels are already required to meet the 95% vapor control efficiency requirement in VCAPCD Rule 71.1, and the exemptions to that requirement would not be available to storage vessels with a PTE of 6 tpy or greater.^[13] CARB demonstrated that sources regulated by SMAQMD and YSAQMD only have single tank systems ( i.e., separator and connected tank), and therefore the issue raised in this deficiency does not apply in these areas and the CARB Oil and Gas Methane Rule alone is sufficient to require RACT level controls for storage tanks regulated by these two districts.^[14] The amendments to the local SJVUAPCD and SCAQMD rules, along with VCAPCD and CARB's demonstrations address this deficiency.

Subsection 95668(a)(2)(A) of the CARB Oil and Gas Methane Rule exempted separator and tank systems, as defined within the rule, that receive an average of less than 50 barrels of crude oil or condensate per day from the rule's flash testing and vapor control requirements for storage vessels. By using the word “or,” this exemption potentially exempted tanks that receive a minor amount of either crude oil or condensate, but a significant quantity of the other organic liquid. To address this deficiency, CARB amended subsection (a)(2)(A) and replaced “or” with “and” so that only separator and tank systems that receive an average of less than 50 barrels of crude oil and less than 50 barrels of condensate per day will be exempted.

Subsections 95668(a)(3) and (4) of the CARB Oil and Gas Methane Rule required existing and new tanks that are not equipped with vapor collection systems to comply with specified requirements for flash testing. The rule required tanks with emissions greater than 10 tpy of methane to meet specified vapor control requirements. The rule did not specify requirements for how tanks equipped with vapor control (either vapor collection systems, or tanks with floating roofs) determine their emissions (PTE or actual) to assess whether they must meet RACT-level control requirements ( i.e., vapor collection systems that meet 95% control, or to maintain actual emissions at less than 4 tpy VOC). To address this deficiency, CARB amended the Rule to include specific requirements for how tanks equipped with vapor controls must conduct compliance testing, performance testing, and flash testing. The new requirements were added in subsections 95671(d) and (e).

Subsection 95668(b)(4) of the CARB Oil and Gas Methane Rule required circulation tanks for well completion to be controlled with at least 95% vapor collection and control efficiency unless CARB made a determination that controlling emissions was not possible. This provision was deficient because it insufficiently bounded CARB's discretion and provided for an exemption for these tanks that is inconsistent with the 2016 Oil and Gas CTG. To address this deficiency, CARB removed this section of the Rule and clarified that circulation tanks are now covered under requirements for separator and tank systems. Since this section of the rule, including the exemption, has been removed, CARB's discretion is now sufficiently bounded. These amendments address this deficiency.

Subsections 95668(c)(3)(B) and (c)(4)(B)(3) of the CARB Oil and Gas Methane Rule contained the term “inspection period.” The term was not defined, nor was it used in the relevant part of section 95669—Leak Detection and Repair—that specifies when to conduct equipment inspections. It was not clear if “inspection period” was referencing the section 95669(g) quarterly testing requirement or something else. To address this deficiency, section 95668(c)(3)(B) of the Rule, which addressed compressor rod packing and seals, has been deleted and the inspection requirement for this equipment is now included under subsection 95669(g), which requires leak detection testing each calendar quarter for all components. While rod packings and seals are not explicitly mentioned in section 95669, the definition of components includes “reciprocating compressor rod packing or seals for compressors located at onshore or offshore crude or natural gas production facilities.” Additionally, the “inspection period” language in subsection 95668(c)(4)(B)(3) was replaced with “calendar year.” Generally, in the places where the term “inspection period” was used, it has been replaced with “calendar year.” This quantifies the inspection period and clarifies the requirements. These amendments address the deficiency.

Subsection 95669(b)(7) of the CARB Oil and Gas Methane Rule exempted one-half inch and smaller stainless steel tube fittings used to supply natural gas to equipment or instrumentation from continuous monitoring. When these stainless-steel tube fittings are at natural gas processing plants or gathering and boosting stations, the 2016 Oil and Gas CTG recommends quarterly testing for leaks, as well as semi-annual fugitive emissions testing at well sites and gathering/boosting stations. Thus, this exemption was inconsistent with the CTG and identified as a deficiency in the Rule. To address this deficiency, CARB removed this exemption.

Subsection 95669(i)(1) of the CARB Oil and Gas Methane Rule required leaks of 1,000-9,999 ppm be repaired within 14 days, but this timing did not meet RACT level stringency because the 2016 Oil and Gas CTG recommends attempting repairs within 5 days of the detected leak.^[15] To address this deficiency, subsection 95669(h)(1) now contains additional language requiring that a first attempt at repair be made within five calendar days for leaks between 1,000-9,999 ppm.

The 2016 Oil and Gas CTG contains a requirement to maintain a list of identification numbers for all the equipment subject to leak regulation.^[16] Section 95669 of the CARB Oil and Gas Methane Rule did not contain a similar requirement, which undermined the enforceability of CARB's rule. To address this deficiency, subsection 95669(d)(1) was revised to require that operators develop and maintain detailed facility-specific leak detection and repair plans. Given the level of detail in these plan requirements, and specifically the inclusion of subsection 95669(d)(1)(C) in the Rule that specifies that the plan must include a list of equipment with an identification number or detailed description for each piece of equipment, these amendments correct the previous deficiency.

Section 95669 of the CARB Oil and Gas Methane Rule did not contain a requirement to maintain a list of equipment that is designated as “unsafe to monitor” consistent with the 2016 Oil and Gas CTG. This deficiency was corrected by an added requirement in subsection 95669(d)(1)(E) that leak detection and repair plans include a list of equipment and components that are designated as inaccessible or unsafe to monitor.

Subsection 95671(f) of the CARB Oil and Gas Methane Rule allowed vapor control systems (VCS) to be taken out of service for up to 30 calendar days per year while maintenance is performed. The 2016 Oil and Gas CTG does not specify time allowed for maintenance. Moreover, this maintenance requirement resulted in CARB having unbounded discretion to remove control equipment from service by not having requirements specifying the necessity of taking the system out of service and minimizing the outage time. To address this deficiency, subsection 95671(g) (formerly subsection 95671(f)) was revised to lower the number of non-operation days for maintenance of vapor collection systems per year from 30 to 14. Subsection 95671(g)(1) was revised to require that for any further extension to the number of maintenance days per year, the owner or operator must obtain approval from CARB and, among other requirements, provide CARB justification for the maintenance, the number of additional days requested, and justification that the number of additional days is necessary to perform the maintenance. These amendments correct the previous deficiency by lowering the standard number of days allowed for maintenance and any further extension is now sufficiently bounded.

Section 95672 of the CARB Oil and Gas Methane Rule did not specify what type of records needed to be kept for certain units, such as separator and tank systems, vapor collection systems, vapor control devices, compressors, and pneumatic devices. The section was not sufficiently enforceable because it did not describe what type of records need to be kept such as testing and monitoring results. To address this deficiency, section 95672 was revised to include several requirements specifying the types of records that must be kept. In addition, Appendix A also now contains recordkeeping and reporting forms that more specifically identify the types of records that must be kept. Given the additional specificity about the types of records that must be kept that have been added to the rule, including for the categories mentioned in the previously identified deficiency, these amendments correct the deficiency.

Previously, the CARB Oil and Gas Methane Rule relied on test methods that had otherwise not been approved by the EPA, and allowed alternative test procedures, sampling methods, or laboratory methods to be used if written permission was obtained from CARB. This created a deficiency because it undermined the enforceability of the rule and allowed CARB the discretion to modify rule provisions without a SIP revision. To address this deficiency, CARB revised Appendix C by removing references to test methods that have not been approved by the EPA and removing the relevant unbounded director's discretion language related to changing test methods.

2. Deficiencies Identified in District SIP-Approved Rules

We previously identified three deficiencies related to SMAQMD Rule 446 and one deficiency related to YSAQMD Rule 2.21. The deficiencies related to ensuring all the storage vessels required to be covered by the 2016 Oil and Gas CTG would be subject to these rules, and, in the case of Rule 446, ensuring the rule met RACT-level stringency. To address this deficiency, the CARB Oil and Gas Methane Rule now includes a specific list of local rules that allow equipment to be exempt from the Rule's requirements, and this list does not include SMAQMD Rule 446 or YSAQMD 2.21 as exemptions to CARB's requirements for separator and tank systems. As a result, all the storage tanks within the jurisdiction of SMAQMD and YSAQMD that are covered by the 2016 Oil and Gas CTG are now subject to the requirements in the CARB Oil and Gas Methane Rule and will meet RACT-level stringency.

SCAQMD Rule 463, SCAQMD Rule 1178, SJVUAPCD Rule 4623, VCAPCD Rule 71.1, and VCAPCD Rule 71.2 were each determined to potentially not apply to all the storage vessels at oil and gas facilities required to be covered by the 2016 Oil and Gas CTG. The 2016 Oil and Gas CTG recommends determining applicability for this equipment based on PTE and each of these rules determined applicability based only on a tank's volumetric capacity or vapor pressure. To address this deficiency, SCAQMD Rule 463, SCAQMD Rule 1178, and SJVUAPCD Rule 4623 were revised to establish the 6 tpy PTE threshold from the 2016 Oil and Gas CTG in determining applicability. For VCAPCD Rule 71.1, VCAPCD provided additional information and calculations to address the deficiency.^[17] VCAPCD performed calculations for each of the three vapor recovery exemptions in the rule and showed that all tanks currently using those exemptions are below the 6 tpy PTE threshold. The memo also demonstrates that no future tanks that exceed the 6 tpy PTE threshold will be exempt because either those exemptions are not available to future tanks or the size of tank that would be necessary to exceed the threshold is not a realistic tank size. Finally, the amended CARB Oil and Gas Methane Rule does not rely on VCAPCD 71.2 to meet RACT-level stringency and no revisions to this Rule were needed to address this deficiency.

VCAPCD Rule 71.1 was determined to not be sufficiently enforceable because it did not include initial or continuous compliance demonstration requirements. VCAPCD corrected this deficiency by adding such requirements that are consistent with the 2016 Oil and Gas CTG.

We previously determined that SJVUAPCD Rule 4401 did not meet RACT-level stringency because it required annual leak inspections with a threshold of 1,000 ppm, using Method 21, at a lower frequency and threshold than the 2016 Oil and Gas CTG (which recommends semiannual inspection frequency with threshold of 500 ppm). To address this deficiency, SJVUAPCD amended Rule 4401 to lower the minimum leak threshold and increase inspection frequency. SJVUAPCD lowered the minimum leak rate threshold for a minor leak from 2,000 ppm to 500 ppm for all components, except for pressure relief devices, which already had a lower threshold of 400 ppm. These revisions are consistent with the 2016 Oil and Gas CTG. The inspection frequency was also changed from annual to quarterly, which exceeds the 2016 Oil and Gas CTG's recommendation of semiannual inspections and aligns with the inspection frequency in SJVUAPCD Rule 4409 and the CARB Oil and Gas Methane Rule. These amendments correct the previously identified deficiency.

3. Deficiency Identified in CARB Oil and Gas Methane Rule and SJVUAPCD Rule 4409

The CARB Oil and Gas Methane Rule and SJVUAPCD Rule 4409 provide exemptions from leak detection and repair (LDAR) requirements based on the API gravity of crude oil at well sites. We previously determined that these exemptions had not been demonstrated to meet RACT because the 2016 Oil and Gas CTG does not provide for such an exemption based on API gravity. However, as described herein and in greater detail in our TSD for the CARB Oil and Gas Methane Rule, we have determined that the CARB Oil and Gas Methane Rule ensures RACT-level stringency for LDAR requirements at well sites. The 2016 Oil and Gas CTG limits its RACT recommendation for semiannual LDAR monitoring to well sites with crude oil that has a gas to oil ratio (GOR) greater than or equal to 300.^[18] This was based on the EPA's conclusion that monitoring for well sites producing heavy oils would not be sufficiently cost effective, as leaks associated with heavy oil production will generally emit less VOC. In developing the 2016 Oil and Gas CTG, the EPA defined a heavy oil well as a well that produces crude oil with a GOR of 300 standard cubic feet (scf)/barrel (bbl) or less.^[19] However, GOR is not the only metric that can be used to classify whether crude oil is heavy oil. Upon review of available information, we can conclude that an API gravity equal to or greater than 20 degrees, as used in the CARB Oil and Gas Rule to exempt well sites from LDAR requirements, is consistent with the 2016 Oil and Gas CTG recommendation to only exclude heavy oils from such requirements.^[20] However, SJVUAPCD Rule 4409 is intended to apply to “light” crude oil production and uses an API gravity equal to or greater than 30 degrees to make this determination. As a result, we do not agree that Rule 4409 alone ensures only heavy crude oils are exempt from LDAR requirements for sources regulated by SJVUAPCD. But well sites producing crude oil with an API gravity between 20 degrees and 30 degrees will still be required to meet RACT-level stringency because such sources will be subject to LDAR requirements under the CARB Oil and Gas Methane Rule. Sources can only be exempted from the requirements in the CARB Oil and Gas Methan Rule if they are “subject to” the specified local air district rules. Sources regulated by SJVUAPCD that are exempt from Rule 4409 are not “subject to” such rules, and thus do not qualify to be exempted from the CARB Oil and Gas Methane Rule. Thus, this deficiency has been addressed because we were able to determine that all sources regulated by the SJVUAPCD covered by the 2016 Oil and Gas CTG are required to meet RACT-level requirements by either the CARB Oil and Gas Methane Rule or SJVUAPCD Rule 4409.

4. Overall Stringency and Enforceability of the Submitted Rules

In our 2022 action, we reviewed the CARB Oil and Gas Methane Rule and applicable local air district rules that regulated the sources covered by the 2016 Oil and Gas CTG and determined that these rules together established RACT level controls, except for certain deficiencies.^[21] As described above, the submitted rules that contained deficiencies that precluded approval of the RACT demonstration were either amended to address the deficiencies, or were removed from the list of local air district rules that allow exemptions from the requirements of the CARB Oil and Gas Methane Rule.

The CARB Oil and Gas Methane Rule and the local air district rules listed in table 1 strengthen the SIP by establishing enforceable emission limits and by clarifying monitoring, recordkeeping, and reporting provisions. Except for one issue described below, these rules are consistent with CAA requirements and relevant guidance regarding enforceability, RACT, and SIP revisions. The TSDs for each of the rules we are proposing to approve into the California SIP in this rulemaking also include more information regarding the basis for our proposed approval.

C. Were there any newly identified deficiencies with the April 2, 2024, submitted CARB Oil and Gas Methane Rule?

The CARB Oil and Gas Methane Rule exempts sources from compliance with portions of the Rule if those sources comply with certain existing California air district rules. One such rule is SCAQMD Rule 1148.1—Oil and Gas Production Wells (Amended March 5, 2004). SCAQMD Rule 1148.1 lacks reporting requirements comparable to the reporting requirements included in the CARB Oil and Gas Methane Rule and applicable local air district rules. SCAQMD Rule 1148.1 otherwise contains comparable inspection requirements, recordkeeping and records retention requirements, and appropriate test methods to determine compliance, but it does not contain reporting requirements equivalent to similar CARB and local air district rules. For example, by comparison, section 95673 of the CARB Oil and Gas Methane Rule requires annual reports of LDAR inspections, and SJVUAPCD Rule 4401 contains annual reporting requirements for Operator Managment Plans.

In a letter included in their submittal on April 2, 2024, CARB has committed to submit an amended version of South Coast Rule 1148.1 that will address this deficiency. Consistent with the requirements of CAA section 110(k)(4), CARB has committed to submit the adopted rule to EPA within 12 months of the effective date of EPA's final rulemaking conditionally approving the RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the 2016 Oil and Gas CTG and regulated by SCAQMD.

D. The EPA's Recommendations to Further Improve the Rules

The TSDs include recommendations for the next time CARB and SJVUAPCD modify their rules.

E. Public Comment and Proposed Action

As authorized in section 110(k)(3) of the Act, the EPA is proposing to approve the SIP submissions amending: the CARB Oil and Gas Methane Rule, SJVUAPCD Rule 4401, SJVUAPCD Rule 4409, SJVUAPCD Rule 4623, VCAPCD Rule 71.1, SCAQMD Rule 463, and SCAQMD Rule 1178. Based on our proposed conclusion that the amended rules cure the previously identified deficiencies, and our prior analysis concluding that these rules met the RACT requirement but for the identified deficiencies, we are also proposing to fully approve the CTG RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the 2016 Oil and Gas CTG in SMAQMD, SJVUAPCD, VCAPCD, and YSAQMD because the rules fulfill all relevant requirements.

In addition, we propose to find that the CARB Oil and Gas Methane Rule, in combination with the specified local air district rules in the SCAQMD largely fulfills the relevant CAA section 110 and part D requirements, except for the newly identified deficiency in SCAQMD Rule 1148.1. As discussed in section II.C, this deficiency precludes full approval of the RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the 2016 Oil and Gas CTG and regulated by SCAQMD. Section 110(k)(4) authorizes the EPA to conditionally approve SIP revisions based on a commitment by the state to adopt specific enforceable measures by a date certain but not later than one year after the date of the plan approval.^[22] Because CARB has committed to provide the EPA with a SIP submission within 12 months of this final action that would adequately address the identified deficiency, we are proposing to conditionally approve the CTG RACT requirement for the 2008 and 2015 ozone NAAQS for sources covered by the 2016 Oil and Gas CTG in SCAQMD, pursuant to section 110(k)(4) of the Act.

If CARB and SCAQMD submit the required rule revisions by the specified deadline, and the EPA approves the submission, then the identified deficiency will be cured. However, if this proposed conditional approval is finalized, and SCAQMD, through CARB, fails to submit these revisions within the required timeframe, the conditional approval would be treated as a disapproval for the RACT requirement for sources covered by the 2016 Oil and Gas CTG in SCAQMD.

If we finalize this rulemaking as proposed, CARB and the applicable local air districts will have corrected the deficiencies identified in our September 30, 2022 action, and all sanction and Federal implementation plan clocks started by our September 30, 2022 action would be permanently stopped. We are concurrently making an interim final determination to defer CAA section 179 sanctions associated with our 2022 action finalizing a limited approval and limited disapproval of the 2018 submittal of the CARB Oil and Gas Methane Rule and a disapproval of the associated CTG RACT requirements. Consistent with our order of sanction regulations,^[23] this determination is based on this proposal to approve and conditionally approve SIP revisions from CARB that resolve the deficiencies that were the basis of our prior disapproval that triggered sanctions under section 179 of the CAA. The deficiency associated with our proposed conditional approval in this action is for a newly identified deficiency in SCAQMD Rule 1148.1, as discussed in section C, and is distinct from the deficiencies that formed the basis of our 2022 disapproval that triggered sanctions under sanction 179 of the CAA.

We will accept comments from the public on this proposal until June 3, 2024. If we take final action to approve the submitted rules, our final action will incorporate these rules into the federally enforceable SIP.

III. Incorporation by Reference

In this rule, the EPA is proposing to include in a final EPA rule, regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the CARB Oil and Gas Methane Rule, SJVUAPCD Rule 4409, SJVUAPCD Rule 4401, SJVUAPCD Rule 4623, SCAQMD Rule 1178, SCAQMD Rule 463, and VCAPCD Rule 71.1 described in section I.C. of this preamble. The EPA has made, and will continue to make, these materials available through https://www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

IV. Statutory and Executive Order Reviews

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

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);

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

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

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it proposes to approve a state program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rules do not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

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

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Incorporation by reference
• Intergovernmental relations
• Reporting and recordkeeping requirements
• Volatile organic compounds

Dated: April 24, 2024.

Martha Guzman Aceves,

Regional Administrator, Region IX.

Footnotes

1.  Letter dated March 26, 2024, submitted with the CARB Oil and Gas Methane Rule, from Steven S. Cliff, Executive Officer, CARB, to Martha Guzman, Regional Administrator, EPA, Region 9.

2.  40 CFR 81.305. We refer to these air districts collectively as the “applicable local air districts.”

3.  There are seven TSDs that support this action, one for each rule listed in table 1.

4.  80 FR 12264, March 6, 2015, and 83 FR 62998, December 6, 2018.

5.  See Section II.E of this preamble. We are proposing to approve the RACT requirement for SMAQMD, SJVUAPCD, VCAPCD, and YSAQMD, and conditionally approve the RACT requirement for SCAQMD.

6.  See 87 FR 59314.

7.  CARB Oil and Gas Rule Appendix D is modeled very closely to the 2016 Oil and Gas CTG Appendix A sections A.2-A.4, which is the section of the CTG model rule for requirements of VOC Emission control, initial compliance, and continuous compliance for storage vessels. CARB Oil and Gas Rule Appendix E is modeled very closely to the 2016 Oil and Gas CTG Appendix A section A.2(d)-(e) which is the closed vent and control device requirements for storage vessels under the model rule, and Appendix A section A.3-A.4 which details the requirements for continuous and continuous compliance for VOC emission control for storage vessels.

8.  CARB stated in the “Technical Clarifications Document” page 14, that Data from 2018 was used because CARB had previously been provided data about the operating hours of the compressors at issue for that year.

9.  Using Table 7-2 of Methane Emission Factors for Reciprocating and Centrifugal Compressors in EPA's 2021 Emissions Guidelines and New Source Performance Standards Technical Support Document. U.S. EPA, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Background Technical Support Document Proposed NSPS and EG, 40 CFR subparts OOOOb and OOOOc, 2021.

10.  CARB (2016a). Proposed Regulation for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities. Staff Report: Initial Statement of Reasons. Appendix B: Economic Analysis. Posted 31 May 2016. https://ww2.arb.ca.gov/​sites/​default/​files/​barcu/​regact/​2016/​oilandgas2016/​oilgasappb.pdf.

11.  CARB, “Technical Clarifications on the Resubmission of California's Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities into the California State Implementation Plan Following Amendments Effective April 1, 2024”, at p.15.

12.  The definition of “separator and tank system” found in section 95667(a)(57) limits the system to “the first separator in a crude oil or natural gas production system and any tank or sump connected directly to the first separator.” The 10 tpy methane threshold is found in section 95668(a)(4), (5), and (6). CARB's staff report estimates that the 10 tpy of methane emissions threshold in the Rule is about ~1.8 tpy VOC and below the CTG requirement that systems maintain emissions less than 4 tpy VOC. CARB Staff Report, 4.

13.  The TSD for VCAPCD Rule 71.1 has more detailed information.

14.  CARB, “Technical Clarifications on the Resubmission of California's Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities into the California State Implementation Plan Following Amendments Effective April 1, 2024”, at pp.18-19.

15.  2016 Oil and Gas CTG recommends implementation of an LDAR program equivalent to what is required under 40 CFR part 60, subpart VVa. Subpart VVa contains the requirement for first attempt at repair within 5 days in several sections for various types of components: 60.482-2a Pumps in liquid service, 60.482-31 Compressors, 60.482-7a Valves in gas/vapor service and in light liquid service, 60.482-8a Pumps, valves, and connectors in heavy liquid service and pressure relief devices in light liquid or heavy liquid service, and 60.482-10a Closed vent systems and control devices.

16.  2016 Oil and Gas CTG, 8-15.

17.  Appendix A, VCAPCD Rule 71.1 Vapor Recovery Exemption Analysis” in VCAPCD's Staff Report for Rule 71.1.

18.  2016 Oil and Gas CTG, 9-39.

19.  EPA, “Information Collection Request Supporting Statement, Information Collection Effort for Oil and Gas Facilities,” EPA ICR No. 2548.01, November 9, 2016, https://www.epa.gov/​sites/​default/​files/​2016-11/​documents/​oil-natural-gas-icr-supporting-statement-epa-icr-2548-01.pdf.

20.  As further explained in our TSD for the CARB Oil and Gas Methane Rule, both API gravity and GOR are metrics that reflect the volatility of crude, with greater VOC emissions coming from crude with higher values—both of API gravity and of GOR.

21.  See “Technical Support Document for EPA's Rulemaking for the California State Implementation Plan California Air Resources Board (CARB) Regulation for Greenhouse Gas Emissions Standards for Crude Oil and Natural Gas Facilities California Code of Regulations, Title 17, Division 3, Chapter 1, Subchapter 10 Climate Change, Article 4 Subarticle 13: Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities” p. 8 (stating that “we have reviewed the local air district rules and conclude that the provisions in those rules that relate to the Oil and Gas CTG generally establish RACT level controls” with the exception of specifically enumerated deficiencies).

22.  42 U.S.C. 7410(k)(4).

23.  40 CFR 52.31.