2437ss02

SUPPORTING STATEMENT

ENVIRONMENTAL PROTECTION AGENCY

NSPS for Oil and Natural Gas Production and Natural Gas Transmission and Distribution

(40 CFR part 60, subpart OOOO) (Final Rule)

Part A of the Supporting Statement

1.0 Identification of the Information Collection

(a) Title and Number of the Information Collection

NSPS for Crude Oil and Natural Gas Production, Transmission, and Distribution (40 CFR part 60, subpart OOOO). This is a new information collection request (ICR), and the EPA tracking number is 2437.02 and the OMB Control Number is 2060-0673.

(b) Short Characterization

This ICR covers information collection requirements in the new source rule for Oil and Natural Gas Production Facilities (40 CFR part 60, subpart OOOO). The information collected will be used by EPA and delegated state and local agencies to determine the compliance status of sources subject to the rule.

On June 24, 1985 (50 FR 26122), EPA promulgated an NSPS for the Crude Oil and Natural Gas Production category which addressed VOC emissions from leaking equipment at onshore natural gas processing plants (40 CFR part 60, subpart KKK). These standards apply to the following affected facilities constructed, reconstructed/or modified after January 20, 1984, located at onshore natural gas processing plants: a compressor in Volatile Organic Compound (VOC) service or in wet gas service, and the groups of all equipment (except compressors) within a process unit. A process unit is defined as the equipment assembled for extraction of natural gas liquids from field gas, fractionation of liquids into natural gas products, or other processing of natural gas products.

The New Source Performance Standards (NSPS) for Onshore Natural Gas Processing - SO₂ Emissions- (40 CFR part 60, subpart LLL) were proposed on January 20, 1984, and promulgated on October 1, 1985. These standards apply to the following affected facilities located at onshore natural gas processing plants: each sweetening unit, and each sweetening unit followed by a sulfur recovery unit. Affected facilities commenced construction, modification, or reconstruction after the date of proposal. A sweetening unit is defined as a process device that separates the hydrogen sulfide and carbon dioxide (CO₂) contents from the sour natural gas stream. The provisions of subpart LLL do not apply to sweetening facilities that produce acid gas that is completely re-injected into oil or gas bearing geologic strata or that is otherwise not released to the atmosphere. The control and monitoring requirements of subpart LLL do not apply to affected facilities with design capacities of less than two long tons per day (LT/D) of hydrogen sulfide in the acid gas, expressed as sulfur.

As part of the mandatory review of NSPS as required under the Clean Air Act, the requirements of subpart KKK and subpart LLL would be contained in a new subpart, 40 CFR 60, subpart OOOO. The existing provisions of subparts KKK/LLL will be included in the new subpart OOOO along with the new provisions for the following affected facilities: gas wellheads, pneumatic controllers, centrifugal and reciprocating compressors, and storage vessels.

The oil and natural gas sector includes operations involved in the extraction and production of oil and natural gas, as well as the processing, transmission, and distribution of natural gas. The potential respondents are owners or operators of oil and gas affected facilities found throughout these industry segments. All of the oil and natural gas facilities located in the United States are owned and operated by the oil and natural gas industry (the “Affected Public”). None of the facilities in the United States are owned or operated by state, local, tribal or the Federal government. All facilities are privately, owned for-profit businesses.

In general, all NSPS standards require initial notifications, performance tests, and periodic reports. Owners or operators are also required to maintain records of calculations and compliance determinations. These notifications, reports, and records are essential in determining compliance, and are required of all sources subject to NSPS.

We estimate an average of 500 operators will be affected by subpart OOOO. The average annual burden for the recordkeeping and reporting requirements in subpart OOOO for these owner and operators that are subject to the Oil and Natural Gas Production, and Natural Gas Transmission and Distribution NSPS is 68,906 person-hours, with an annual average cost of $2,306,573. We expect an average of $219,000 for capital and startup costs and an average of $102,600 for operation and maintenance over the 3-year period for sweetening units. The capital and startup costs for centrifugal compressors equipped with wet seals and storage vessels were included in the costs of the control equipment. The average operation and maintenance costs for monitoring equipment for centrifugal compressors equipped with wet seals and storage vessels were estimated to be $20,904 and $488,832 respectively over the 3-year period.

2. Need For and Use of the Collection

(a) Need/Authority for the Collection

The EPA is charged under section 111 of the Clean Air Act (CAA), as amended, to establish standards of performance for new stationary sources that reflect:

. . . application of the best technological system of continuous emissions reduction which (taking into consideration the cost of achieving such emissions reduction, or any non-air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated. Section 111(a)(l).

The Agency refers to this charge as selecting the best demonstrated technology (BDT). Section 111 also requires that the Administrator review and, if appropriate, revise such standards every 8 years.

In addition, section 114(a) states that the Administrator may require any owner or operator subject to any requirement of this Act to:

• establish and maintain such records;

• make such reports; (C) install, use, and maintain such monitoring equipment,

• and use such audit procedures, or methods;

• sample such emissions (in accordance with such procedures or methods, at such locations, at such intervals, during such periods, and in such manner as the Administrator shall prescribe);

• keep records on control equipment parameters, production variables or other indirect data when direct monitoring of emissions is impractical;

• submit compliance certifications in accordance with Section 114(a)(3); and

• provide such other information as the Administrator may reasonably require.

(b) Use/Users of the Data

The information will be used by the Administrator to ensure that the standards and other requirements are being achieved. Based on review of the recorded information at the site and the reported information, the Administrator can identify facilities that may not be in compliance and decide which facilities, records, or processes may need inspection.

3. Nonduplication, Consultations, and Other Collection Criteria

(a) Nonduplication

No other regulation currently requires the same information under this ICR from owners/operators subject to the requirements of this subpart. In the event that certain reports required by state or local agency may duplicate information required by this subpart, a copy of the report submitted to the state or local agency can be sent to the Administrator in lieu of the report required by the Federal standards. Therefore, no duplication exists.

(b) Public Notice Required Prior to ICR Submission to OMB

EPA will provide public notice of this ICR by means of a Federal Register Notice of Final Rulemaking.

(c) Consultations

In developing the final rule, EPA performed a comprehensive review of existing state rules and industry standards, visited oil and natural gas sites, as well as consulted with individual companies, state agencies, and environmental groups. The main organizations that provided expert advice during the development of this rule include the Agency’s industry experts. A summary of the consultations are presented in the table below.

Organization	Contact Person
Western States Air Resources Council	Bob Lebens
Sierra Club	Craig Segall
America’s Natural Gas Alliance/American Exploration and Production Council	Amy Farrell
Gas Compressor Association	John Dutton
Independent Petroleum Association of America	Lee Fuller
American Petroleum Institute	Matt Todd
Gas Processors Association	Molly Wentworth
Region 8 and Air Quality Representatives from Colorado and Wyoming	Cindy Beeler

(d) Effects of Less Frequent Collection

Respondents must monitor all specified criteria at each affected facility and maintain these records for 2 years. The reporting frequency to EPA has been established to minimize the burden on owners and operators of affected facilities.

(e) General Guidelines

This collection of information is consistent with all OMB guidelines established by OMB at 5 CFR part 1320, section 1320.5.

(f) Confidentiality

All information submitted to the Agency for which a claim of confidentiality is made will be safeguarded according to the Agency policies set forth in Title 40, Chapter 1, Part 2, Subpart B--Confidentiality of Business Information (see 40 CFR 2; 41 FR 36902, September 1, 1976; amended by 43 FR 39999, September 28, 1978; 43 FR 42251, September 28, 1978; 44 FR 17674, March 23, 1979).

(g) Sensitive Questions

This section is not applicable because this ICR does not involve matters of a sensitive nature.

4. The Respondents and the Information Requested

(a) Respondents/NAICS Codes

Potential respondents under subpart OOOO are owners or operators of new or modified oil and natural gas affected facilities as defined under the rule. The North American Industry Classification System (NAICS) codes for the oil and gas industry include: 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).

(b) Information Requested.

(i) Data Items, Including Recordkeeping Requirements

Recordkeeping
Maintain records from each completion operation including the location of the well, duration of gas capture, the API well number, duration of combustion, duration of gas venting, and reasons for venting to occur in lieu of capture or flaring.	60.5420(b)(2); (c)(1)
Maintain records for each pneumatic controller, date device is installed, device location, manufacturer specifications, records of reasons why pneumatic controllers with a bleed rate of greater than 6 scf/hr are required.	60.5420(b)(5); (c)(4)
For each centrifugal compressor, maintain records of deviations in cases where the centrifugal compressor was not operated in compliance.	60.5420(b)(3); (c)(2)
For each reciprocating compressor, maintain records of cumulative number of hours of operation or number of months since initial startup, record of the time and date of rod packing replacement, records of deviations in cases where the reciprocating compressor was not operated in compliance.	60.5420(b)(4); (c)(3)
Maintain records of storage vessel emissions and reductions. Records related to storage vessel inspections including results of inspection.	60.5420(b)(6); (c)(5)
Keep records of measurements, performance evaluations, calibration checks, adjustments and maintenance related to continuous monitoring systems.	60.7(f)
Keep records of parts of closed vent systems designated as unsafe or difficult to inspect.	60.632(a); 60.482-10a(l)(1), (2)
Keep records related to pressure relief valves; number of pressure relief valves	60.5421(b); 60.5422(a)-(c)
Keep records of inspections of closed vent systems during which no leaks are detected.	60.632(a); 60.482-10a(l)(4), (5)
Perform attachment of identification numbers to leaking equipment.	60.5416(b)(1)
Keep records of leak detection and repair.	60.5416(b)(2)
Keep records of design requirements for and operation of closed vent systems and control devices.	60.635(a); 60.486(d)
Keep records listing equipment.	60.635(a), (b); 60.486(e)
Keep records of compliance tests.	60.635(a), 60.486(e)(4)
Keep records of valves designated as unsafe or difficult to monitor.	60.635 (a); 60.486(f); 60.5417(b)
Keep records of design criterion that indicate failure.	60.635(a); 60.486(h)
Keep records of parts not in VOC service or otherwise exempt.	60.635(a),(c); 60.486(j)
Notifications and Reporting
Notify the Administrator at least two days prior to a well completion operation.	60.5410(a)
Submit an annual report for all wellhead, pneumatic, storage vessels and compressor affected facilities per operating entity.	60.5420(b)
Notification of construction or reconstruction.	60.7(a)(1)
Notification of initial performance test.	60.8(d)
Annual reports including those of excess emissions.	60.5417(c); 60.487(c)(2)(i)-(vi)
Performance test results.	60.487(e)
Annual report on excess emissions from and performance of continuous monitoring system, and/or summary report forms at processing plants	60.5423(b)

(ii) Respondent Activities

Respondent Activities

Read instructions.

Gather relevant information.

Perform initial performance test and repeat performance tests if necessary.

Write the notifications and reports listed above.

Enter information required to be recorded above.

Submit the required reports developing, acquiring, installing, and utilizing technology and systems for the purpose of collecting, validating, and verifying information.

Develop, acquire, install, and utilize technology and systems for the purpose of processing and maintaining information.

Develop, acquire, install, and utilize technology and systems for the purpose of disclosing and providing information.

Adjust the existing ways to comply with any previously applicable instructions and requirements.

Train personnel to be able to respond to a collection of information.

Transmit, or otherwise disclose the information.

5. The Information Collected–Agency Activities, Collection Methodology, and Information Management

(a) Agency Activities

The Agency activities associated with the final subpart OOOO are provided in Exhibits 2a, 2b, and 2c (located at the end of this supporting statement) and are introduced in section 6(c).

(b) Collection Methodology and Management

Data and records maintained by the respondents are tabulated and published for use in compliance and enforcement programs of the Administrator. Information contained in the reports will be required to submit records electronically to EPA’s Central DATA Exchange (CDX) using the Electronic Reporting Tool. CDX enables fast, efficient and more accurate environmental data submissions from state and local governments, industry and tribes to the EPA and participating program offices. EPA's CDX is the point of entry on the Environmental Information Exchange Network (Exchange Network) for environmental data submissions to the Agency. CDX works with both EPA program offices looking for a way to better manage incoming data, and stakeholders looking for a way to reduce burden from reporting requirements.

(c) Small Entity Flexibility

EPA performed a screening analysis for impacts on a sample of expected affected small entities by comparing compliance costs to entity revenues. The impact on small entities (i.e., small businesses) was taken into consideration during the development of the regulation. EPA nonetheless has tried to reduce the impact of this rule on small entities by the selection of highly cost-effective controls and specifying monitoring requirements that are the minimum to insure compliance.

(d) Collection Schedule

The specific frequencies for each information collection activity within this request are shown in Exhibit 1a, Exhibit 1b, and Exhibit 1c: Respondent Burden of Reporting and Recordkeeping Requirements, NSPS for Oil and Natural Gas Production and Natural Gas Transmission and Distribution (40 CFR part 60, subpart OOOO) for the first 3 years after promulgation, respectively.

6. Estimating the Burden and Cost of the Collection

(a) Estimating Respondent Burden

Exhibit 1a, Exhibit 1b, and Exhibit 1c document the computation of individual burdens for the recordkeeping and reporting requirements applicable to the industry for the subpart included in this ICR for each of the first 3 years. The table below contains a summary of the respondent burden hours and costs detailed in Exhibit 1a, Exhibit 1b, and Exhibit 1c.

Summary of Respondent Burden

Year	Total Annual Labor Burden (hours)	Total Annual Labor Cost ($)
1	57,093	$1,911,148
2	68,906	$2,306,573
3	80,719	$2,701,999
Total	206,718	$6,919,720
3-Year Average	68,906	$2,306,573

(b) Estimating Respondent Costs

The information collection activities for the final subpart OOOO are presented in Exhibit 1a, Exhibit 1b, and Exhibit 1c. Because the data are already collected by respondents as part of normal operations, no respondent development costs are associated with the information collection activities.

1. Estimating Labor Costs

This ICR uses the following labor rates: $33.51 per hour for technical labor, $52.85 per hour for management labor, and $23.43 for clerical labor. The rates have already been increased by 110 percent to account for the benefit packages available to those employed by private industry. These rates are from the Employer Costs for Employee Compensation Historical Listing March 2004 – December 2010 published by the Bureau of Labor and Statistics and represents the state of the industry in 2008, consistent with the control costs associated with the final rule (Source: ftp://ftp.bls.gov/pub/special.requests/ocwc/ect/ececqrtn.pdf).

(ii) Estimating Capital and Operations and Maintenance (O&M) Costs

The monitoring cost estimated for subpart OOOO is the monitoring cost currently estimated in the existing provisions for subpart LLL, which are now incorporated into subpart OOOO. The capital and startup costs for monitoring equipment were included in the calculation of the capital device of the control equipment for storage vessels and centrifugal compressors. The annual operation and maintenance cost of the storage vessel and centrifugal compressor affected sources were estimated assuming 2 hours per month at $33.51 per hour. We do not estimate additional monitoring costs for the other newly affected sources.

Capital/Startup vs. Operation and Maintenance (O&M) Costs
(A) Continuous Monitoring Device	(B) Capital/‌Startup Cost for One Respondent	(C) Number of New Respondents	(D) Total Capital/Startup Cost, (B×C)	(E) Annual O&M Costs for One Respondent a	(F) Average Number of Respondents with O&M b	(G) Total O&M, (E×F)
SO2 CEM, control outlet (only for subpart LLL)	$73,000	3	$219,000	$17,100	6	$102,600
Continuous control device monitoring for centrifugal compressor affected facilities	N/Ab	13	$0	$804	26	$20,904
Continuous control device monitoring for storage vessel affected facilities	N/Ab	304	$0	$804	608	$488,832

Assumptions:

^a O&M costs reflect operation and maintenance of an in-situ SO₂ CEM after the control device. The annual operation and maintenance costs of monitoring equipment for centrifugal compressors and storage vessels were calculated assuming 2 hours per month at $33.51 per hour.

^b Capital/Startup costs for continuous control device monitoring were included in the control device costs for storage vessels and centrifugal compressors.

The total capital/startup costs for this ICR are $219,000. This is the total of column D in the above table. The total operation and maintenance (O&M) costs for this ICR are $612,336. This is the total of column G. The average annual cost for capital/startup and operation and maintenance costs to industry over the next three years of the ICR is estimated to be $831,336.

(c) Estimating Agency Burden and Cost

Because reporting and recordkeeping requirements on the part of the respondents are required under the operating permits rules in 40 CFR part 70 or part 71 and the part 60 NSPS General Provisions, no operational costs will be incurred by the Federal Government. Publication and distribution of the information are part of the Compliance Data System, with the result that no Federal costs can be directly attributed to the ICR. Examination of records to be maintained by the respondents will occur incidentally as part of the periodic inspection of sources that is part of EPA’s overall compliance and enforcement program, and, therefore, is not attributable to the ICR. The only costs that the Federal government will incur are user costs associated with the analysis of the reported information, as presented in Exhibit 2a, Exhibit 2b, and Exhibit 2c.

This cost is based on the average hourly labor rate as follows:

Managerial $59.63 (GS-13, Step 5, $37.27 + 60%)

Technical $47.20 (GS-12, Step 1, $29.50 + 60%)

Clerical $23.94 (GS-6, Step 3, $14.96 + 60%)

These rates are from the Office of Personnel Management (OPM), 2008 General Schedule, which excludes locality, rates of pay. The rates have been increased by 60 percent to account for the benefit packages available to government employees. Costs have been estimated in 2008 dollars for this ICR to be consistent with other costs (i.e. control devices) estimated in the development of subpart OOOO.

(d) Estimating the Respondent Universe and Total Burden and Costs

It was estimated that an average of 468 operators will be subject to the subpart OOOO requirements in the first year, 500 in the second year, and 532 in the third year during the 3-year period of this ICR. These values are based on 300 exploration and production businesses, 136 transmission and storage operators that remain constant over the 3-year period, and an average of 29 processing plants and 3 sweetening units becoming affected sources each year.

For the Crude Oil and Natural Gas Production, Transmission, and Distribution NSPS, the components of the total annual responses attributable to this ICR are notification of construction, reconstruction and modification from 1,064 each year and annual or semiannual reporting from an average of 500 entities over the 3-year period.

The number of total annual responses for subpart OOOO is estimated as: 3,230 total respondents over the three year period.

Year	Annual Number of Respondents
1	468
2	500
3	532
Total	1,500

The total number of annual responses per year is calculated using the following table.

Total Average Annual Responses
(A) Information Collection Activity	(B) Average Number of Respondents1	(C) Number of Responses	(D) Number of Existing Respondents That Keep Records But Do Not Submit Reports	(E) Total Average Annual Responses E=(BxC)+D
Notification of construction, reconstruction, or modification	1,064	1	N/A	1,064
Annual Compliance Reports	2,166	1	N/A	2,166
			Total	3,230

¹ We assume each facility will make the appropriate notifications and that each owner will submit the annual report for all affected sources in each year.

(e) Bottom Line Burden Hours and Cost Tables

(i) Respondent tally

The bottom line respondent burden hours and costs, presented in Exhibit 1a, Exhibit 1b, and Exhibit 1c are calculated by adding person-hours per year down each column for technical, managerial, and clerical staff, and by adding down the cost column. The average annual burden for the recordkeeping and reporting requirements in subpart OOOO for the 500 owners and operators that are subject to the Crude Oil and Natural Gas Production, Transmission, and Distribution NSPS is 68,906 person-hours, with an annual average cost of $2,306,573.

(ii) The Agency tally

The average annual Federal Government cost is $420,919 for 9,207 hours for subpart OOOO. The bottom line Agency burden hours and costs presented in Exhibit 2a, Exhibit 2b, and Exhibit 2c are calculated by adding person-hours per year down each column for technical, managerial, and clerical staff, and by adding down the cost column.

(iii) Variations in the annual bottom line

This section does not apply since no significant variation is anticipated.

(f) Reasons for Change in Burden

This ICR covers information collection requirements in the new source rule for Oil and Natural Gas Production Facilities (40 CFR part 60, subpart OOOO). The information collected will be used by EPA and delegated state and local agencies to determine the compliance status of sources subject to the rule.

(g) Burden Statement

The annual public reporting and recordkeeping burden for this collection of information is estimated to average 21 hours per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB Control Number. The OMB Control Numbers for EPA regulations are listed at 40 CFR part 9 and 48 CFR chapter 15.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA-HQ-OAR-2010-0505. An electronic version of the public docket is available at http://www.regulations.gov/ which may be used to obtain a copy of the draft collection of information, submit or view public comments, access the index listing of the contents of the docket, and to access those documents in the public docket that are available electronically. When in the system, select “search,” then key in the docket ID number identified in this document. The documents are also available for public viewing at the Enforcement and Compliance Docket and Information Center in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket and Information Center is (202) 566-1742. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Officer for EPA. Please include OMB Control Number 2060-0673 and EPA Docket ID Number EPA-HQ-OAR-2010-0505 in any correspondence.

PART B

This section is not applicable because statistical methods are not used in data collection associated with the final rule.

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