# Approval and Promulgation of Federal Implementation Plan for Oil and Natural Gas Well Production Facilities; Fort Berthold Indian Reservation (Mandan, Hidatsa, and Arikara Nation), North Dakota

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2013-05666

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** March 22, 2013
- **Citation:** 78 FR 17836

## Text

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 49
[EPA-R08-OAR-2012-0479; FRL-9789-3]
Approval and Promulgation of Federal Implementation Plan for Oil and Natural Gas Well Production Facilities; Fort Berthold Indian Reservation (Mandan, Hidatsa, and Arikara Nation), North Dakota

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The EPA is taking final action to promulgate a Reservation-specific Federal Implementation Plan in order to regulate emissions from oil and natural gas production facilities located on the Fort Berthold Indian Reservation in North Dakota. The Federal Implementation Plan includes basic air quality regulations for the protection of communities in and adjacent to the Fort Berthold Indian Reservation. The Federal Implementation Plan requires owners and operators of oil and natural gas production facilities to reduce emissions of volatile organic compounds emanating from well completions, recompletions, and production and storage operations. This Federal Implementation Plan will be implemented by the EPA, or a delegated tribal authority, until replaced by a Tribal Implementation Plan. The EPA proposed a Reservation-specific Federal Implementation Plan concurrently with an interim final rule on August 15, 2012. This final Federal Implementation Plan replaces the interim final rule in all intents and purposes on the effective date of the final rule. The EPA is taking this action pursuant to the Clean Air Act (CAA).

DATES:

This final rule is effective on April 22, 2013.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-R08-OAR-2012-0479. All documents in the docket are listed on the
www.regulations.gov
Web site. Although listed in the index, some information is not publicly available,
i.e.,
CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through
www.regulations.gov,
or in hard copy at the Air Program, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop Street, Denver, Colorado 80202-1129. The EPA requests that if at all possible, you contact the individual listed in the
FOR FURTHER INFORMATION CONTACT
section to view the hard copy of the docket. You may view the hard copy of the docket Monday through Friday, 8 a.m. to 4 p.m., excluding federal holidays.

FOR FURTHER INFORMATION CONTACT:

Deirdre Rothery, U.S. Environmental Protection Agency, Region 8, Air Program, Mail Code 8P-AR, 1595 Wynkoop Street, Denver, Colorado 80202-1129, (303) 312-6431,
rothery.deirdre@epa.gov.

SUPPLEMENTARY INFORMATION:

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

Definitions

For the purpose of this document, we are giving meaning to certain words or initials as follows:

i. The initials
APA
mean or refer to the Administrative Procedure Act.

ii. The words or initials
Act
or
CAA
mean or refer to the Clean Air Act, unless the context indicates otherwise.

iii. The initials
BTU
mean or refer to British Thermal Unit.

iv. The initials
CAFOs
mean or refer to Consent Agreement Final Orders.

v. The initials
CDPHE
mean or refer to Colorado Department of Public Health and Environment Air Pollution Control Division.

vi. The initials
CO
mean or refer to carbon monoxide.

vii. The words
EPA, we,

us
or
our
mean or refer to the United States Environmental Protection Agency.

viii. The words Reservation or the initials
FBIR
mean or refer to the Fort Berthold Indian Reservation.

ix. The initials
FIP
mean or refer to Federal Implementation Plan.

x. The initials
GOR
mean or refer to gas-to-oil ratio.

xi. The initials
LACT
mean or refer to lease automatic custody transfer.

xii. The initials
MDEQ
mean or refer to Montana Department of Environmental Quality.

xiii. The initials
NAAQS
mean or refer to the National Ambient Air Quality Standards.

xiv. The initials
NAICS
mean or refer to the North American Industry Classification System.

xv. The initials
NDDoH
mean or refer to the North Dakota Department of Health.

xvi. The initials
NDIC
mean or refer to the North Dakota Industrial Commission.

xvii. The initials
NESHAP
mean or refer to National Emission Standards for Hazardous Air Pollutants.

xviii. The initials
NMED
mean or refer to New Mexico Environment Department Air Quality Bureau.

xix. The initials
NO
X
mean or refer to nitrogen oxides.

xx. The initials
NO
2
mean or refer to nitrogen dioxide.

xxi. The initials
NSPS
mean or refer to New Source Performance Standards.

xxii. The initials
NSR
mean or refer to new source review.

xxiii. The initials
ODEQ
mean or refer to Oklahoma Department of Environmental Quality Air Quality Division.

xxiv. The initials
PM
mean or refer to particulate matter.

xxv. The initials
PSD
mean or refer to prevention of significant deterioration.

xxvi. The initials
PTE
mean or refer to potential to emit.

xxvii. The initials
RCT
mean or refer to Railroad Commission of Texas, Oil and Gas Division.

xxviii. The initials
SCADA
mean or refer to Supervisory Control and Data Acquisition.

xxix. The initials
SIP
mean or refer to State Implementation Plan.

xxx. The initials
SO
2
mean or refer to sulfur dioxide.

xxxi. The initials
TAR
mean or refer to Tribal Authority Rule.

xxxii. The initials
TAS
mean or refer to treatment as state.

xxxiii. The initials
TIP
mean or refer to Tribal Implementation Plan.

xxxiv. The initials
UDEQ
mean or refer to Utah Department of Environmental Quality.

xxxv. The initials
VOC
mean or refer to volatile organic compound(s).

xxxvi. The initials
VRU
mean or refer to vapor recovery unit.

xxxvii. The initials
WDEQ
mean or refer to Wyoming Department of Environmental Quality Air Quality Division.

Table of Contents

I. Background

II. Basis for Final Action

III. Final Action

IV. Major Issues Raised by Commenters and EPA's Response

A. Purpose and Scope of FIP

B. Legal Basis and Authority

C. Rule Development and Implementation

D. Applicability

E. Control Equipment and Requirements

F. Monitoring and Recordkeeping Requirements

G. Reporting Requirements

H. Cost Analysis

I. Public Notice

V. Summary of Final Rule and Significant Changes From the Proposed and Interim Final Rule

A. Administrative Edits

B. Introduction

C. Compliance Schedule

D. Provisions for Delegation of Administration to the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation

E. General Provisions

F. Construction and Operational Control Measures

G. Control Equipment Requirements

H. Monitoring Requirements

I. Recordkeeping Requirements

J. Reporting Requirements

K. Effect on Permitting of Facilities

L. Registration Requirements

VI. Statutory and Executive Order Reviews

I. Background

On August 1, 2012, we signed a proposed rulemaking to establish a Federal Implementation Plan (FIP) for oil and natural gas production facilities located on the Fort Berthold Indian Reservation (FBIR). We also signed an interim final rule concurrent with the proposed action because we found good cause under Section 553(b)(B) of the Administrative Procedure Act, 5 U.S.C. 551
et seq.
that notice-and-comment are impracticable, unnecessary or contrary to the public interest in this instance. The proposal and concurrent interim final rule were published in the
Federal Register
on August 15, 2012 (77 FR 48878), and residents of the FBIR, as well as industry representatives and environmental groups commented on the proposed rule. During the 60-day comment period that ended on October 15, 2012, we also held a public hearing in New Town, North Dakota on September 12, 2012. We received seven written comments during the comment period and 12 people provided oral testimony at the public hearing. This
Federal Register
action announces our final action on the proposed regulations.

In promulgating this rule, the EPA is exercising its discretionary authority under Sections 301(a) and 301(d)(4) of the Clean Air Act (CAA) to promulgate regulations as necessary to protect tribal air resources. Promulgating this final rule addresses an important initial step to fill a regulatory gap between state and federal requirements with regard to controlling volatile organic compound (VOC) emissions from oil and natural gas operations on the FBIR. There is no other federal rule, including the recently finalized New Source Performance Standards (NSPS) and National Emissions Standards for Hazardous Air Pollutants (NESHAP) for the Oil and Natural Gas Sector (NSPS OOOO and NESHAP HH),
1

that establishes regulations for the particular oil and natural gas production operations that exist on the FBIR. This is in contrast to oil and natural gas operations off the Reservation, which are governed by the North Dakota Department of Health (NDDoH) regulations and North Dakota Industrial Commission (NDIC) regulations within the State of North Dakota's jurisdiction. The NDDoH requirements were developed with an understanding of the high VOC emissions and infrastructure constraints that exist in the region. Consistent with the regulatory structure that exists off the FBIR, and NSPS OOOO, this rule has requirements for VOC emissions control and reductions, monitoring, recordkeeping, and reporting. This rule also establishes requirements that are clear and legally and practicably enforceable.

1
“Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Review, Final Rule”
Federal Register
77:159 (16 August 2012) p. 49490. The regulations can be accessed at
http://www.epa.gov/airquality/oilandgas/actions.html
and are included in the docket for this rule.

We developed this rule in consultation with the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation. As part of this consultation, we evaluated the oil and natural gas activities and sources of VOC emissions that could impact air resources on the Reservation and the differences in the VOC emission reduction requirements for those facilities operating on the FBIR compared to those facilities operating in NDDoH jurisdiction. The final rule we are promulgating today establishes regulations for oil and natural gas production and storage operations specific to the FBIR and applies to all lands on the FBIR, which is defined by the Act of March 3, 1891 (26 Statute 1032) and which includes all lands added to the Reservation by Executive Order of June 17, 1982.

We drafted the requirements that are consistent to the greatest extent practicable with the most relevant aspects of neighboring state and local rules concerning the air pollutant emitting activities on the FBIR. We do not intend, nor do we expect, this regulation to impose significantly different regulatory burdens upon industry or the residents of the FBIR than those imposed by the rules of state and local air agencies in the surrounding areas. We evaluated the regulations imposed by other oil and natural gas producing state jurisdictions, NDDoH, NDIC, and NSPS OOOO. Included in the docket for this rule are copies of the regulations and guidance that we considered in this process, as well as a technical support document
2

(TSD) explaining the requirements.

2
The Technical Support Document includes a more detailed explanation of the development of this FIP. It can be found in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

We requested comments on all aspects of our proposed action and provided a 60-day comment period. During the comment period, we received comments on our proposed rule that supported our proposed action and that were critical of our proposed action. After evaluating all the comments that were received, we are taking final action to respond to the comments we have received, explain the basis for our action, and promulgate the final rule. In this final rule, also referred to as the Federal Implementation Plan for Oil and Natural Gas Well Production Facilities; Fort Berthold Indian Reservation (Mandan, Hidatsa, and Arikara Nation), North Dakota, we are making certain revisions based on the information provided by commenters and regulated entities. This preamble to the final rule responds to the issues raised by commenters and describes the final rule and significant changes from the proposed rule.

II. Basis for Final Action

This
Federal Register
action announces the EPA's final action on the proposed regulations of August 15, 2012. In promulgating this rule, the EPA is exercising its discretionary authority under Sections 301(a) and 301(d)(4) of the CAA to promulgate such implementation plan provisions as are necessary or appropriate to protect air quality within the FBIR, specifically identified in 40 CFR part 49, subpart K—Implementation Plans for Tribes—Region VIII. After evaluating air quality issues for the FBIR, the EPA was concerned that there was a gap in air quality requirements for oil and natural gas production facilities on the FBIR under the CAA and its implementing regulations.

Our proposed rule in August 2012 was generally based upon the aspects of neighboring NDIC and NDDoH regulations most relevant to the oil and natural gas production VOC-emitting activities occurring on the FBIR. We acknowledged that there were some differences between the requirements in the proposed rule and those in the NDIC and NDDoH regulations, most notably additional monitoring requirements. These differences were necessary to meet the standards for promulgating FIPs. Included in the docket for the proposed rulemaking were copies of all of the state rules that the EPA considered in this process, as well as a TSD comparing the proposed regulations with the state regulations and a description of why the EPA believed the proposed rule was appropriate.

During the public comment period, a number of FBIR residents, industry representatives and the regulated entities, environmental and resident advocate organizations, and tribal government agencies submitted comments on the rule proposed by the EPA and offered suggestions for improving the proposed rule. We have fully considered all substantive public comments on our proposal and have

concluded that certain changes are warranted. Those changes are discussed in Section V of this notice. However, the EPA does not intend, nor does it expect, these regulations to impose significantly different regulatory burdens upon industry or the residents within the FBIR than those imposed by the rules of the NDIC and NDDoH in the surrounding areas.

III. Final Action

In this action, we are promulgating a Reservation-specific FIP to establish enforceable control requirements for reducing VOC emissions from oil and natural gas production activities on the FBIR in North Dakota. This final rule replaces the interim final rule promulgated on August 15, 2012 (77 FR 48878) in all intents and purposes on the effective date of the final rule.

IV. Major Issues Raised by Commenters and EPA's Response

A. Purpose and Scope of FIP

Comment:
Multiple commenters described the ways in which the existing oil and natural gas development had negatively affected their communities. For example, commenters described black smoke, visible soot, and strong gas odors. Other commenters expressed support of the EPA's decision to cover existing wells in the FIP.

Response:
We acknowledge the concerns expressed by the commenters related to oil and natural gas production activities on the FBIR. The purpose of this FIP, in part, is to address the potential impacts of VOC emissions caused by the oil and natural gas production occurring in the region. By requiring process equipment at oil and natural gas production facilities to be operated with specific air emission controls, under specific operating conditions and following specific procedures, this FIP will help address these concerns. We are requiring that operations at these facilities be monitored and records be kept such that any improper process or emission control equipment operated by the owner or operator at a facility can be identified and remedied by the EPA through enforcement of this FIP. The public can report possible harmful environmental activity on the EPA's Web site at
http://www.epa.gov/tips/.

We acknowledge the commenters support of the FIP to cover existing wells. As discussed in the TSD, one goal of this FIP was to provide an avenue of compliance with the CAA for those companies subject to CAFO agreements. Our primary goal, as always is with regard to regulations developed under the CAA, was to ensure increased protection to the public health and the environment. This FIP provides these benefits through promulgation of enforceable requirements to limit VOC emissions from facilities that constructed prior to the effective date of the interim final FIP.

Comment:
One commenter stated that the EPA needs to control air quality because hydraulic fracturing (“fracking”) is under-regulated.

Response:
The majority of oil and natural gas wells drilled today are hydraulically fractured. Hydraulic fracturing occurs when wells are being completed and recompleted. NSPS OOOO ensures that VOC emissions are controlled from the completion and recompletion of natural gas wells. Additionally, this FIP requires that owners and operators of oil and natural gas production facilities on the FBIR reduce by at least 90% the VOC emissions from casinghead natural gas during the completion or recompletion of any oil and natural gas well. Together, these recent regulatory actions will provide significant control of emissions from hydraulic fracturing activities.

Comment:
Several commenters stated that the EPA should set methane standards in the final FIP noting that methane is a greenhouse gas (GHG) with a high carbon dioxide (CO
2
) equivalent, and that leaked methane therefore negatively influences climate change. These same commenters also stated that the EPA already requires control technologies that could facilitate emissions standards for methane and that tribes have particular interest in mitigating climate change because they are disproportionately impacted by it.
3

The commenters also stated that leaked methane decreases a potentially significant revenue stream for producers. Another commenter stated that flaring creates significant CO
2
pollution, which contributes to climate change.

3
Commenter cites “EPA Tribal Science Council, Tribal Science Priority” at 1 (June 2011). A copy of the document is included in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Response:
We had a very specific purpose for developing this FIP, which was to regulate VOC emissions from oil and natural gas production operations on the FBIR which represented the largest source of air quality concerns at this time. While this rule does not directly regulate other pollutants subject to regulation under the CAA, such as the GHGs methane and CO
2,
it does result in significant reductions of GHGs because of the substantial methane reduction as a co-benefit of the required VOC control.

Comment:
Other commenters expressed concern about the dust now prevalent in the area. The commenters stated that excessive dust was often seen in the air as well as on trees and grass. Some commenters insisted that oil and trucking companies should participate in control of dust in the area. One commenter stated that visible emissions have not been responded to by the EPA or the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation.

Response:
This FIP is focused on emissions of VOCs, and regulating fugitive dust resulting from oil and natural gas production activities on the FBIR was not within the scope of the rulemaking. If the EPA determines it is necessary to regulate other pollutants, we will address those at that time. Generally, dust from road traffic is a local issue and the public should contact the local environmental or health agency with these concerns. The public can report possible harmful environmental activity on the EPA's Web site at
http://www.epa.gov/tips/.

Comment:
Several commenters noted a significant increase in truck traffic since oil and natural gas production on the FBIR had begun. One commenter noted that the incidence of traffic accidents, often fatal, has significantly increased on the FBIR since production has begun.

Response:
Traffic in North Dakota and on the FBIR is regulated by the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation or the United States Department of Transportation, and not by the EPA and thus is not within the EPA's authority to address.

Comment:
One commenter discussed being bothered by noticeable diesel emissions from the increased truck traffic. Another commenter noted that an oil rig was polluting in close proximity to a school.

Response:
This FIP does not regulate the exhaust emissions from the trucks or oil rigs. These sources of emissions meet the definition of on-road and non-road motor vehicles (mobile sources) under the CAA and are subject to regulations under those provisions. This FIP only regulates stationary oil and natural gas production sources. A stationary source is defined in the CAA (42 U.S.C. 7602(z)) to mean “generally any source of an air pollutant.” The definition specifically excludes those emissions resulting directly from an internal combustion engine for transportation purposes or from a nonroad engine or nonroad vehicle as defined in 42 U.S.C. 7550. This rule however does not

exempt the owners and operators from any other requirements under the CAA to minimize pollutants and control emissions from these sources.

Comment:
Some commenters stated that oil and natural gas development had also negatively impacted water quality. One commenter stated that the water at her house is undrinkable and is often too poor to be used for other common functions like laundry. Some commenters stated that they had witnessed trucks dumping waste from oil and natural gas production in unauthorized locations, including the ground near Skunk Bay.

Response:
We acknowledge the concerns expressed by the commenters in regard to the effect that oil and natural gas production activities may have on water quality. Our authority to issue this rule, however, falls under the CAA. Water pollution on the FBIR is addressed through separate regulations established under the Clean Water Act (CWA). Additional information about the CWA can be found at
http://www.epa.gov/regulations/laws/cwa.html.
In addition, the public can report possible harmful environmental activity on the EPA's Web site at
http://www.epa.gov/tips/.

Comment:
One commenter recommended that the EPA explore voluntary partnerships with FBIR producers in order to deploy best practices for gas capture and use. Commenter stated that this may allow FBIR producers to demonstrate the feasibility and benefits of comprehensive gas capture at co-producing sites, and in doing so encourage these practices for other producers in the Bakken and elsewhere.

Response:
We appreciate the commenter's suggestion; however, such a partnership is outside of the scope of this FIP and 40 CFR part 49. The comment is more appropriately addressed through the EPA's voluntary programs, such as the Natural GasSTAR Program.
4

Therefore we have forwarded this comment on to the Natural GasSTAR Program for their consideration.

4
Information on the EPA's Natural Gas STAR Program is available online at:
http://www.epa.gov/gasstar/,
Accessed November 15, 2012.

B. Legal Basis and Authority

Comment:
Some commenters disagreed with our assertion that the rule is needed and justified to mitigate hazards to the public health and the environment, stating that actual emissions are much lower than potential emissions, and are low enough to present no hazard to public health or the environment. The commenters further stated that rather than the protection of the public health and environment, the purpose of this FIP is to solve the “legal and hypothetical problem” of ensuring potential emissions do not exceed regulatory applicability thresholds, such as the PSD thresholds. The commenters stated that the EPA proposed the FIP not to improve already good air quality
5

or to satisfy CAA requirements, but because many FBIR operators need preconstruction permits and the EPA lacks adequate time or resources to issue those permits by the time the Consent Agreement and Final Orders (CAFOs)
6

governing the sources expire.

5
Commenter references the interim final rule at 77 FR 48886.

6
The FBIR CAFOs are included in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Several commenters support the proposed FIP and also agree that we have just cause to mitigate hazards to the public health and the environment and with our assertion and that we are acting in accordance with our trust responsibilities to protect the public health and environment in Indian country.

Response:
The purpose of this FIP is to address potential impacts to the public health and the environment. It also solves some of the unusual challenges that owners and operators on the FBIR face with regard to compliance with the permitting requirements of the CAA. However, our primary purpose for developing rules to regulate air emissions is to meet the requirements of the CAA to protect the public health and the environment by providing those living on the Reservation the same level of air quality and health protection as people living outside the Reservation. So, while this FIP solves some of the challenges that the owners and operators on the FBIR face with regard to requirements of the CAA, or more specifically the PSD permitting requirements, the primary focus is to prevent the potential degradation of the air quality on the FBIR.

The CAA is a comprehensive federal law that regulates air emissions from stationary and mobile sources. Among other things, this law authorizes us to establish National Ambient Air Quality Standards (NAAQS) to protect public health and the environment. Amendments to the CAA codified the PSD preconstruction permitting program to protect the public health and the environment from any actual or potential adverse effects which may reasonably be anticipated to occur notwithstanding attainment and maintenance of the NAAQS.

Because of the high quantity of VOC emissions present in the oil and natural gas operations in the Bakken formation, the absence of infrastructure to capture excess volatile liquids, and the regulatory gap that rendered the use of control technology unenforceable prior to the FIP, some sources had potential emissions that would have required major source permits. These preconstruction PSD permits are one mechanism available to the EPA to assure that emissions increases associated with economic development do not threaten the NAAQS. Under the Federal Tribal NSR rule, sources located on the FBIR may also obtain synthetic minor NSR permits to limit their emissions below major source levels. Either of these options would require that the EPA review and issue several hundred air permits to emissions limitations similar to those required by this FIP. We determined, therefore, that issuing this FIP, and imposing emission limitations for these sources at one time was a more efficient and streamlined mechanism than issuing individual permits. We believe that this is the best way to address the potential harm that these previously unregulated VOC emissions would create, and ensure that we are not inhibiting the growth of oil and natural gas due to the permitting process, which could put the Tribe at an economic disadvantage.

Finally, while actual emissions for some sources may be lower than potential emissions, there are no federally and practicably enforceable emission control requirements for the affected equipment limiting the potential to emit. This rule imposes emission limitations that are federally and practicably enforceable.

Comment:
Several commenters stated that by proposing to adopt this FIP, the EPA is stepping into the shoes of the Tribes and acting as the local air pollution control authority. The FIP includes a comprehensive set of control measures for oil and natural gas operations—imposing requirements on such operations merely because they exist and not because they have engaged in an activity that triggers a regulatory requirement, such as building a new source or modifying an existing source such that a PSD permit or a synthetic minor NSR permit is needed. In other words, the EPA is adopting what would otherwise amount to a State Implementation Plan (SIP) or TIP for the FBIR. The authority for such a control program necessarily flows from section 110(a), which specifies the measures that a SIP may include. This section of

the CAA specifies that a SIP may “include enforceable emission limitations and other control measures, means, or techniques * * *
as may be necessary or appropriate
to meet the applicable requirements of this chapter.” CAA section 110(a)(2)(A) (emphasis added). Thus, the EPA may adopt as part of this FIP only those measures that are needed to attain or maintain NAAQS or to meet other specified CAA applicable requirements.

Response:
We disagree; the commenter is mistaken that the underlying authority for this FIP is found in Section 110(a) of the Act. Section 301(d) of the CAA, 42 U.S.C. 7601(d), directs us to promulgate regulations specifying the provisions of the Act for which it is appropriate to treat Indian tribes in the same manner as states. Pursuant to this statutory directive, the EPA promulgated regulations entitled, “Indian Tribes: Air Quality Planning and Management” (TAR) (63 FR 7254, February 12, 1998). Our regulations delineate the CAA provisions for which it is appropriate to treat tribes in the same manner as a state.
See
40 CFR 49.3, 49.4. Among those provisions for which we determined such treatment was inappropriate are CAA section 110(a)(1) (SIP submittal and implementation deadlines) and CAA section 110(c)(1) (directing the EPA to promulgate a Federal Implementation Plan (FIP) “within 2 years” after we find that a state has failed to submit a required plan, or has submitted an incomplete plan, or within 2 years after we disapproved all or a portion of a plan).
See
40 CFR 49.4(a), (d); 63 FR 7262-7266, February 12, 1998.

The TAR preamble clarified that by including CAA section 110(c)(1) on the § 49.4 list, “EPA is not relieved of its general obligation under the CAA to ensure the protection of air quality throughout the nation, including throughout Indian country. In the absence of an express statutory requirement, EPA may act to protect air quality pursuant to its “gap-filling” authority under the Act as a whole.
See, e.g.
CAA section 301(a).” (63 FR 7265, February 12, 1998). The preamble confirmed that “EPA will continue to be subject to the basic requirement to issue a FIP for affected tribal areas within some reasonable time.”
Id.
(referencing § 49.11(a) which provides that the Agency will promulgate a FIP to protect tribal air quality within a reasonable time if tribal efforts do not result in adoption and approval of tribal plans or program).
7

7
Section 49.11(a) states that the Agency, “[s]hall promulgate without unreasonable delay such federal implementation plan provisions as are necessary or appropriate to protect air quality, consistent with the provisions of sections 301(a) and 301(d)(4), if a tribe does not submit a tribal implementation plan meeting the completeness criteria of 40 CFR part 51, Appendix V, or does not receive EPA approval of a submitted tribal implementation plan.” 40 CFR 49.11(a).

The preamble to the TAR set forth our view articulated in the proposed rule that, based on the “general purpose and scope of the CAA, the requirements of which apply nationally, and on the specific language of Sections 301(a) and 301(d)(4), Congress intended to give to the Agency broad authority to protect tribal air resources.”
Id.
at 63 FR 7262. It further discussed our intent to “use its authority under the CAA ‘to protect air quality throughout Indian country’ by directly implementing the Act's requirements in instances where tribes choose not to develop a program, fail to adopt an adequate program or fail to adequately implement an air program.”
Id.

The NDDoH, the CAA permitting authority for areas of North Dakota outside of Indian country, including outside of the FBIR, has promulgated rules to control emissions from oil and natural gas production facilities. Since there is not currently an approved TIP specifically covering the reduction of VOC emissions related to natural gas emissions from oil and natural gas production facilities on the FBIR, a lack of regulation exists with regard to such facilities operating within the exterior boundaries of the Reservation. This FIP establishes legally and practicably enforceable requirements to control and reduce VOC emissions. Therefore, in this rule, we determined that it is necessary and appropriate to exercise our discretionary authority under sections 301(a) and 301(d)(4) of the CAA and 40 CFR 49.11(a) to promulgate a FIP to remedy an existing regulatory gap under the Act with respect to oil and natural gas operations on the FBIR.

Comment:
One commenter was concerned that the Tribe would have enforcement authority and be allowed to act arbitrarily and capriciously with regard to shutting down operations and requested that the requirements of this rule be enforced by the federal government. The commenter stated that the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation should not be allowed to enforce the rule because its elected officials have economic interest in the oil and natural gas industry, making them conflicted.

Response:
At this time, EPA has not delegated to the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation the authority under these regulatory provisions to enforce the provisions of this FIP. The provisions in § 49.4162 of the Code of Federal Regulations establish the steps by which the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation may request delegation to assist us with the administration of this rule. As described in the regulatory provisions and the preamble to the proposed rule, any such delegation will be accomplished through a delegation of authority agreement between the EPA Region 8 Administrator and the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation. In the event such an agreement is reached, the rule would continue to operate under federal authority throughout the FBIR, and the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation would assist us with administration of the rule to the extent specified in the delegation agreement.

C. Rule Development and Implementation

Comment:
One commenter indicated that the State of North Dakota was issuing permits to drill on the FBIR and asserted that the State has been giving out drilling permits “like candy,” leading to an overwhelming level of oil and natural gas development and increase in pollution on the FBIR. The commenter stated that the Tribe did not have, nor did they develop, necessary regulations when development began, and that the Tribe, as well as the EPA, is now playing “catch-up.”

Response:
We acknowledge the commenter's concern with increased oil and natural gas development on the FBIR, as well as increased development under the State of North Dakota's jurisdiction and the need for reservation-specific regulations to protect public health and the environment. We note that the State of North Dakota does not have jurisdiction over development on the FBIR. As discussed in the preamble for the interim final rule, we first became aware of the need to address VOC emissions from these operations in August of 2011. At that time, a significant number of entities engaged in oil and natural gas operations on the FBIR informed us that the emissions of regulated air pollutants, including VOC, were significantly larger than previously understood and larger than emissions in other areas, due to the geologic characteristics and infrastructure challenges in the Bakken formation. At

that time, we immediately took measures to ensure that VOC emissions were appropriately controlled by entering into CAFOs with the owners/operators to implement VOC controls. We then developed and promulgated this FIP as an interim final rule to immediately establish federally and practicably enforceable emission control requirements for the affected equipment. In addition, given the number of existing facilities that were operating as unregulated sources, we determined that existing facilities should also be subject to the FIP. We believe the series of actions taken to address the unregulated sources of VOC emissions on the FBIR occurred as soon as practicable after becoming aware of the issue.

Comment:
One commenter stated that the EPA had accelerated development of this FIP without consideration of its impact on the community to avoid disrupting the pace of oil and natural gas development. Another commenter stated that this FIP is not strict enough, citing the estimated potential long-term development of 1,000 oil and natural gas facilities by 2029 as discussed in the interim final rule (77 FR 48887).

Response:
We disagree with the assertion that the expedited process for developing this FIP did not take into consideration the impacts of oil and natural gas development on the community. The mitigation of the air quality impact of oil and natural gas development on the FBIR was a priority when developing this rule. This rule will reduce VOC emissions from existing operations and limit the amount of VOC emissions from potential new development. Our intent is to level the health protections between the residents living on the FBIR and the residents living in the State of North Dakota. In other words, the EPA intends that the FBIR residents receive equivalent air quality protections as those residing in the State. We acted quickly in developing this FIP in order to provide those protections as soon as possible and avoid unnecessary disruption to oil and natural gas development. While the FIP development process has been quick, as discussed in this notice we have provided for full public participation and fully responded to all concerns.

We also disagree that the FIP is not strict enough. This FIP establishes requirements to control air pollution in the form of VOC emissions from oil and natural gas production and storage operations on the FBIR, comparable to those requirements developed by state permitting authorities. In addition, this FIP imposes emission reduction requirements that are robust and consistent with the control technology requirements for the oil and natural gas production and storage industry under NSPS OOOO.

Comment:
One commenter stated that an environmental impact statement (EIS) was not required prior to leasing the tribal land for oil and natural gas development. The commenter noted that a programmatic environmental assessment (EA) is being conducted, but insisted that the more rigorous EIS should have been required. The commenter questioned whether it was legal for the EIS requirement to be bypassed, and stated that the requirements of the National Environmental Policy Act (NEPA) had been “minimized.” Therefore, the commenter asserted that area residents were denied the opportunity to make statements regarding the impact of oil and natural gas development on their lives. Another commenter stated that the lack of adequate public notice for the EA was not compliant with NEPA and environmental justice.

Response:
This FIP only regulates the VOC air pollutant emissions generated by the well completion and production and storage operations on the FBIR and is not subject to the requirements of NEPA (EIS or EA). A FIP is an action under the CAA and Section 7(c) of the Energy Supply and Environmental Coordination Act of 1974 (15 U.S.C. 793(c)(1)) exempts actions under the CAA from the requirements of NEPA, specifically this section reads “* * * (c) Major federal actions significantly affecting the quality of the human environment (1) No action taken under the Clean Air Act [42 U.S.C. 7401 et seq.] shall be deemed a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969 [42 U.S.C. 4321 et seq.].” Therefore a NEPA analysis is not required for this FIP.

Leasing of the mineral rights and drilling of the oil and natural gas wells is regulated by the Bureau of Indian Affairs (BIA) and the Bureau of Land Management (BLM). Those federal agencies are undertaking any applicable NEPA requirements when approving leasing and drilling activities.

Comment:
Many commenters asserted that this FIP falls short of its stated purpose because some facilities' potential to emit (PTE) of VOCs or any other regulated NSR pollutant may exceed the applicability thresholds for PSD permitting resulting in the need for a synthetic minor NSR permit issued under Federal Tribal NSR Rule (if PSD permitting is to be avoided) even after applying the legally and practicably enforceable emission reductions provided in this rule (77 FR 48885). Several commenters stated that the EPA should declare in the final FIP that all sources that become minor under the Federal Tribal NSR rule will be considered “true minor” sources. More specifically, commenters claim that sources treated as synthetic minor sources under this FIP could not install new wells for the foreseeable future because the EPA has not developed an expeditious process for issuing synthetic minor NSR permits.

Another commenter questioned why owners and operators working within the FBIR would be allowed to exceed VOC emission standards.
8

The commenter asked if there was any point in setting these standards if permits could be obtained to exceed them.

8
The commenter is referring to the interim final rule Section III.E. “Effect on Permitting of Facilities.” (77 FR 48885).

Response:
The owners and operators subject to this FIP are not allowed to exceed established standards, and nothing in this FIP is intended to relieve the owners and operators of the responsibility to comply with all federal environmental laws and rules. This rule does not replace any requirement to obtain permission to construct under the PSD regulations at 40 CFR 52.21 or the Federal Tribal NSR regulations at 40 CFR 49.151; therefore, this FIP does not automatically create “true minor” status for those sources that become minor under the Federal Tribal NSR Rule. Owners and operators complying with this rule may still be required to obtain preconstruction permits to further reduce VOC emissions or the emissions of other pollutants that are regulated by the PSD and Federal Tribal NSR permitting regulations if the emissions thresholds for these regulations are exceeded. Further, this rule does not automatically make sources synthetic minor sources for purposes of the PSD regulations. A synthetic minor source is generally understood to include any source that would be major but for a requested enforceable limitation. For example, a source can become a synthetic minor source when the owner or operator requests a synthetic minor NSR permit through the Federal Tribal NSR regulations to avoid major source requirements of PSD and that request is approved and the permit is issued.

This rule is similar to NSPS OOOO promulgated at 40 CFR part 60, NESHAP HH promulgated at 40 CFR part 63, and the NDDoH regulations specific to oil and natural gas production operations at Chapters 33-

15-07 and 33-15-20 of the North Dakota Administrative Code, none of which replace CAA permitting requirements. Similar to the NSPS, NESHAPs, and NDDoH regulations, this rule provides legally and practicably enforceable restrictions for VOC emissions on an emission unit specific basis. Any reductions realized by complying with this rule can then be used to calculate the PTE of VOCs when determining whether any CAA permitting may be required. In addition, the rule only requires controls on VOC emissions, because of the high amount of associated natural gas in the crude oil from the FBIR and the absence of infrastructure to capture the natural gas emissions. Therefore, any potential emissions of VOCs or any other criteria pollutant that exceed the PSD permitting thresholds after taking credit for the enforceable restrictions in this rule would still result in the requirement to obtain a PSD permit for permission to construct. A synthetic minor NSR permit to avoid the PSD permitting requirements can still be requested through the Federal Tribal NSR regulations. Those facilities with potential emissions of VOCs and all other criteria pollutants that are below the PSD permitting thresholds and above the Federal Tribal NSR permitting thresholds after complying with the requirements of this FIP would be considered true minor sources under the Federal Tribal NSR regulations.

Finally, regarding the commenter's claim that sources treated as synthetic minor sources under this FIP could not install new wells for the foreseeable future because the EPA has not developed an expeditious process for issuing synthetic minor permits, the EPA has issued and continues to issue synthetic minor permits to sources on the FBIR to those who request them.

Comment:
Several commenters requested that the EPA clarify that a stationary source and corresponding minor NSR permitting requirements apply to operations and equipment on a well pad and immediately appurtenant operations. These commenters also urged the EPA to clarify that geographically separated “well pads and related operations” should not be aggregated into one stationary source simply because they are connected by gathering or production lines. The commenters asserted that the EPA's use of the term “integrally connected” (77 FR 48885) could create confusion as to what equipment and activities are considered part of a facility. The commenters cited
Summit Petroleum Corp.
v.
EPA

9

as an example of the EPA incorrectly aggregating multiple wells, well pads and related facilities that were geographically widespread into one single facility for the purposes of the CAA. The commenters stated that such an approach is “nonsensical” and inconsistent with the CAA definition of “stationary source.” The commenters also requested that the EPA explain the limited circumstances in which aggregation into a “facility” or “stationary source” is appropriate, and suggested the following as those circumstances; When: (1) The operations share a single two-digit major SIC code; (2) the operations are under common ownership or control; and (3) the operations are physically contiguous or physically proximate. The EPA should specify that functional interrelatedness should not be used to determine physical proximity.

9

Summit Petroleum Corp.
v.
EPA,
Nos. 0904348, 10-4572 (Sixth Cir. 2012) at 1. The document is included in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Response:
This action affects facilities operating on the FBIR in North Dakota, and thus the 6th Circuit's
Summit Petroleum
decision cited by the commenters does not apply.
10

When the EPA issues permits to sources that are also subject to this rule, the ultimate determination regarding the scope of the stationary source to be permitted will be made by implementing the stationary source definition contained in the federal NSR and Title V regulations (40 CFR 52.21(b)(5) and (6), 71.2). Such determinations are highly fact specific and will continue to be made on a case-by-case basis, applying the relevant regulatory criteria to the facts of the oil and natural gas production activities being permitted.

10
Memo from Stephen D. Page, Director, Office of Air Quality Planning and Standards, to Regional Air Division Directors, Regions 1-10,
Applicability of the Summit Decision to EPA Title V and NSR Source Determinations
(Dec. 21, 2012),
available at http://epa.gov/nsr/documents/SummitDecision.pdf
and included in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Comment:
Several commenters stated that the final FIP should refer to Bakken Pool wells located on the FBIR simply as “oil wells” or “Fort Berthold Indian Reservation wells” rather than using the phrases “oil and natural gas production wells” or “oil and natural gas production facilities.” The commenters asserted that using the characterization “oil wells” is consistent with related EPA rules.
11

One commenter also stated that North Dakota permits refer to these as oil wells. On the other hand, two commenters stated that they support the inclusion of co-producing oil and natural gas wells, which are defined as “oil and natural gas production facilities” in this FIP.

11
Commenter specifically mentions the “New Source Performance Standards for Crude Oil and Natural Gas Production, Transmission and Distribution” (40 CFR part 60, subpart OOOO) and the “Greenhouse Gas Reporting Rule” (40 CFR part 98, subpart W).

Response:
The reference to the Bakken Pool
12

production facilities as oil and natural gas production facilities in this FIP is consistent with: (1) NDDoH regulations at 33-15-20 which defines an oil well as “any well capable of producing oil or oil and casinghead gas from a common source of supply”; and (2) the NDDoH's Bakken Pool Guidance
13

(Bakken Pool Guidance) which refers to the facilities as oil and gas production facilities, both of which form the basis of this rule. We believe this reference adequately describes the affected facilities under the FIP and is consistent with NDDoH regulations and guidance.

12
The Bakken Pool is defined as a compilation of crude oil formations consisting of Bakken, Sanish and Three Forks formations.

13

Bakken Pool Oil and Gas Production Facilities Air Pollution Control Permitting & Compliance Guidance,
NDDoH Air Quality Division, May 2, 2011. This guidance document was developed by the Bakken VOC Task Force. The Bakken VOC Task Force was a collaboration between the NDDoH and the owners and operators of oil and gas operations producing from the Bakken Pool. A copy of the guidance document is included in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

We acknowledge the commenter's assertions that the facilities may be described differently in other EPA regulations. Although the Bakken Pool production wells on the FBIR would be considered oil wells based on the discussions in NSPS OOOO and Subpart W (76 FR 80567), those discussions do not adequately reflect the volume of natural gas coproduced from a Bakken Pool well. NSPS OOOO and Subpart W are national rules, and therefore, the discussions they contain must be broad enough to apply nationwide. Since this a reservation-specific FIP, we believe it is appropriate to use a more focused definition, as did the State of North Dakota in the Bakken Pool Guidance, due to the unique nature of the oil being produced from the Bakken Pool.

D. Applicability

Comment:
Several commenters stated that the FIP should establish a minimum emissions threshold for applicability, which exists in NSPS OOOO.

Response:
The only minimum emission threshold for applicability that

exists in NSPS OOOO and could apply to emission units regulated under this FIP is the 6 tpy applicability threshold for storage tanks. While this FIP does not provide the same applicability threshold for tanks as that found in NSPS OOOO, it does exempt storage tanks that are or become subject to the requirements of NSPS OOOO.
See
§ 49.4164(f). However, several tanks operating on the FBIR prior to the applicability date of NSPS OOOO are not subject to NSPS OOOO. Therefore, since these tanks are not subject to NSPS OOOO and do not have a minimum emissions threshold for applicability, we decided that it was appropriate to regulate these tanks in a manner consistent with NDDoH requirements for tanks at oil and natural gas production facilities outside the FBIR. Specifically, the Bakken Pool Guidance at Appendix D and this FIP at § 49.4164(d)(2)(ii), allow for a reduced VOC destruction efficiency and the use of pit flares where the PTE of VOCs from the aggregate of all produced oil storage tanks and produced water storage tanks interconnected with produced oil storage tanks at an oil and natural gas production facility is less than, and reasonably expected to remain below, 20 tons in any consecutive 12-month period. The commenters failed to provide any supporting information on appropriate applicability thresholds for the other production equipment regulated under this FIP. As previously discussed, we believe the volume of VOC emissions from oil and natural gas operations on the FBIR warrants specially tailored regulation, which we have developed in this FIP, and which NDDoH developed in their Bakken Pool Guidance. At this time, we do not have sufficient information to establish minimum thresholds for other production equipment.

Comment:
Several commenters stated that the EPA should clarify that the FIP statements “[t]he completion date is considered the date that construction at an oil and natural gas production facility has commenced” (77 FR 48885), and “[t]he recompletion date is considered the date that a modification has occurred at an oil and natural gas production facility” (77 FR 48885) are for the purposes of determining whether this FIP applies to a particular oil production facility and does not apply to other EPA rules or programs.

Response:
We agree that the suggested clarification is necessary. We have added language to the applicable provision (§ 49.4161(b)) to indicate that the correlation of the initiation of well completion operations and well recompletion operations to the dates that construction and modifications commence is specific to this rule. In addition, we have changed the language to clarify that the compliance date is upon initiation of well completion operations and well recompletion operations.

Comment:
Several commenters disagree with the EPA's assertion contained in the NSPS OOOO that recompletion of an existing well constitutes a modification. Because the EPA acts in accordance with the NSPS OOOO regarding this position, the commenters restated the position they had voiced in comments on the proposed NSPS OOOO. The commenters concluded that this same error should not be perpetuated in the final FIP.

Response:
The issue of what constitutes modifications under CAA section 111 was decided by EPA in the prior rulemaking and is not being reopened here. While we are not statutorily compelled to use the same definition here, we think it is appropriate to do so and commenters have not provided a policy basis on which to revisit EPA's conclusion. As explained in detail in section IX.A. of the preamble for the final
Federal Register
notice of NSPS OOOO (77 FR 49510), a completion operation associated with refracturing is considered a modification under CAA section 111(a) because a physical change occurs to the well resulting in emissions increases during the recompletion operation. When determining applicability for the rule, we used August 12, 2007, which is the earliest well completion date identified in the CAFOs and thus the earliest well completion date information available to the EPA at the time of the rulemaking. Due to the nature of operations producing from the Bakken Pool and the significant amount of co-produced natural gas emissions, it is important that modified facilities are required to control emissions from affected equipment. We believe including the definition of a modified facility in the final FIP is important because it will require the control of emissions from the recompletion of any existing well that was completed prior to August 12, 2007 that the agency may not have been aware of at the time of the rulemaking and that would not be subject to the rule prior to a modification.

Comment:
One commenter urged the EPA to include pollution control requirements for dehydration units, pneumatic controllers and pumps, and compressors, stating that these sources could be significant sources of pollution. The commenter requested that the EPA incorporate the requirements for compressors and pneumatics from the NSPS OOOO, at a minimum.

Response:
We agree with the commenter that dehydration units, pneumatic controllers and pumps, and compressors are other sources of air pollution that may be operating at the oil and natural gas production facilities on the FBIR. We reviewed information provided in 154 applications for synthetic minor NSR permits submitted to the Region 8 office
14

during the development of the FIP. Based on these applications, we were able to determine that the most significant sources of the VOC emissions are the pieces of equipment used to produce the oil and natural gas during well completions, phase separation of the extracted reservoir fluids (heater-treater), and the temporary storage of the crude oil (tanks). The information in the applications indicates pneumatic devices, dehydration units, compressors, and associated fugitive emissions listed in the applications were minor sources of VOC emissions when compared to other emission units. Therefore, requirements for this equipment have not been included in this rule. If we determine at a later date that there is a need for control of VOC emissions from oil and natural gas production equipment and operations not covered by this rule, we may propose additional FIPs or propose supplements to this FIP.

14
The applications can be found in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at
http://www.regulations.gov.

Comment:
Several commenters stated that the EPA should remove all requirements applicable to heater-treater combustion devices from the FIP. The commenters asserted that the use of heater-treater combustion devices can already be taken into account when determining PTE because they are “inherent process equipment,” and that additional requirements for these devices are therefore unnecessary. The commenters cited criteria from the EPA letters
15

and the Compliance Assurance Monitoring (CAM) rulemaking
16

to

argue that heater-treater combustion devices must be considered inherent process equipment based on those criteria.

15
Letter from EPA to Mr. Timothy J Mahin, Intel Government Affairs, dated November 27, 1995; see also Letter from EPA to Edward R. Herbert III, Director of Environmental Affairs, National Ready Mixed Concrete Association, July 10, 2002, included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

16
“CAM Response to Comments, Part III,” at 6-7, October 2, 1997, available online at
http://www.epa.gov/airtoxics/cam/ricam.html
and included in the docket for this rule under Docket

ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

The commenters stated that the EPA's description of the heater-treater combustion device requirement in the FIP mandates the use of such devices at oil facilities, primarily for safety and product recovery, and does not address air quality concerns (77 FR 48883-48884).

The commenters also stated that the possibility of some oil facilities operating without heater-treater devices is not an appropriate justification for the FIP requirements, because any facilities operating as such would be in clear violation of standard operating procedures which ensure safe working conditions. The commenters insisted that the EPA should not base this justification on “unsupported assumptions” that standing laws are being violated or inadequately enforced.

Response:
We acknowledge that the preamble at 77 FR 48883 states that the oil/natural gas/water emulsion from the production wells is transported through 2-phase separators (separators), which are an inherent component of the pipeline. We also state in the same paragraph that following the 2-phase separator, the emulsion enters a 3-phase separator (heater-treater), which is a necessary step in the production process and produces gas that is separated from the emulsion. However, until the separated gas from the heater-treater is captured as product or used in some other beneficial way at the facility (e.g., a fuel source for gas burning equipment) it is a significant source of the high volume VOC emissions we determined requires control to protect public health and the environment on the FBIR. Throughout the rulemaking process, one of our priorities was to equalize the requirements that apply to sources operating in the State of North Dakota's jurisdiction with the requirements that apply to sources outside of the State's jurisdiction. The NDIC regulations found in the Control of Oil and Gas Resources at Chapter 38-08-06 require that natural gas from the heater-treaters be routed to a natural gas gathering pipeline as soon as practicable. When a pipeline is not available, the natural gas produced in the heater-treater process is required to be routed to a control system or device. While we acknowledged in the preamble for the interim final rule that the purpose of the NDIC requirements was principally for safety and product recovery reasons, we also acknowledged that the requirements for heater-treaters were modeled after the Bakken Pool Guidance which requires that the emissions from heater-treaters be controlled.

E. Control Equipment and Requirements

Comment:
One commenter stated that flares of roughly 40 feet are a usual sight in Mandaree and can be a nuisance to area residents because of light and noise pollution. Another commenter stated that flares were not being lit when they should have.

Response:
We acknowledge the concerns expressed by the commenters and offer a clarified explanation of the purpose and operation of the flares being used by operators of oil and natural gas production facilities on the FBIR.

The purpose of flaring the natural gas that is coproduced when extracting oil from the FBIR wells is to prevent the emission of VOC gases that might otherwise be vented to the ambient air when the natural gas cannot be captured and injected into a sales pipeline. The flames from the flares indicate that the VOCs are actually being combusted. The flares should be lit at all times that co-produced natural gas is being routed to them rather than to the sales pipeline. In situations where production facilities are able to take advantage of existing infrastructure and inject produced gas into a pipeline, flaring is significantly reduced, in some cases to the point of only occurring as a backup control measure in the event that pipeline injections of all or part of the produced natural gas becomes temporarily infeasible. Situations at production facilities that are unable to route the gas to a sales pipeline and where flares are not visibly operating may indicate the flares are not being operated properly and gas is being vented directly to the ambient air. This FIP has appropriate monitoring, recordkeeping, and reporting requirements to ensure that the flares are operating properly. Further, because the FIP intends to limit the use of flares in favor of capture and injection of the produced natural gas into sales pipelines as soon as practicable, secondary impacts such as noise and light pollution from combustion of gas are expected to be reduced by the owner or operator complying with the rule.

Comment:
One commenter speculated that the level of emissions from flares is above the allotted amount.

Response:
It is unclear what is meant by the term “allotted amount.” The majority of oil and natural gas production facilities currently in operation on the FBIR do not hold any air pollution control permits that specify any “allotted amount” of emissions from the flares. Should the combustion emissions from flaring exceed the major source permitting thresholds under PSD specified at 40 CFR 52.21, the owner or operator would be required to obtain a PSD permit or may opt to obtain a minor NSR permit to become synthetically minor for purposes of PSD prior to beginning actual construction, independently of this FIP. Either of these permits would require the installation of control technology sufficient to ensure protection of air quality.

Comment:
Several commenters stated that the EPA should eliminate the 500 hour limitation on pit flare usage because it is inconsistent with the Bakken Pool Guidance and unnecessary. One commenter wondered why use of the pit flare was limited to 500 hours per year and not something different. The commenters also asserted that only being allowed to assume 90% VOC destruction and removal efficiency (DRE) for pit flares already limits the amount of pit flaring that could occur without exceeding major source thresholds. The commenters also stated that a limitation on the use of pit flares punishes operators that inject recovered produced natural gas and natural gas emissions into existing pipeline infrastructure to sell it, because 98% VOC DRE control devices are more costly. Another commenter asked who will monitor the pit flare operations and what the repercussions are if a source exceeds the limit of 500 hours of operation in any consecutive 12-month period?

Response:
We disagree with the commenters that the 500 hour limitation on pit flare usage is unnecessary. The purpose of the 500-hour per year limit on use of a pit flare as a backup control device in instances where injection of produced natural gas and natural gas emissions is temporarily infeasible is to discourage the use of pit flares as a primary control device. Based on past EPA guidance
17

that addresses backup situations, we have concluded that applying a 500 hour per year limit to the oil and natural gas production facilities for the use of a pit flare in backup situations is reasonable and consistent with backup operation timeframes

allowed for other industry sectors. In addition, past EPA enforcement settlements
18 19

that address backup situations have led us to conclude that 500 hours (or 21 days) is a reasonable period of time for owners and operators of oil and natural gas production facilities to address these situations and maintain compliance with the rule. During development of the draft synthetic minor NSR permits prior to this rule, we had discussions with owners and operators indicating that many oil and natural gas production facilities on the FBIR regularly utilize temporary 98% VOC DRE control devices while they are preparing a facility for permanent production and storage operations;
20

therefore, we concluded it is reasonable to expect that an owner or operator could acquire one of these temporary control devices in situations where use of the pipeline may be infeasible for more than 500 hours.

17
Memo from John S. Seitz, Director, Office of Air Quality Planning and Standards, to Regional Air Division Directors, Regions 1-10,
Calculating Potential to Emit (PTE) for Emergency Generators
(September 6, 1995), available at
http://epa.gov/region07/air/title5/t5memos/emgen.pdf
and included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

18
Consent Decree
United States of America
v.
Marathon Petroleum Company, LP, and Catlettsburg Refining, LLC,
available at:
http://epa.gov/compliance/resources/decrees/civil/caa/marathonrefining-cd.pdf
and included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

19
Consent Decree
United States of America, and the State of Indiana, and Plaintiff Intervenors
v.
BP Products North America, Inc,
available at:
http://epa.gov/compliance/resources/decrees/civil/caa/whiting-cd.pdf
and included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

20
As discussed in the preamble for the interim final rule (77 FR 48880), the EPA Region 8 air permit and enforcement programs hosted a Fort Berthold Oil and Natural Gas Production Minor NSR Permitting Process Meeting with the oil producers in late August 2011. Representatives from the Tribes were invited and attended in person and by phone. Discussions included the anticipated permitting timeline for permit applications submitted by the oil producers. Between August 23 and September 1, 2011, a draft example synthetic minor permit was sent by EPA to the meeting attendees and the Tribes in preparation for the next meeting on September 1, 2011. Then, on September 1, 2011, Region 8 hosted a permitting workshop. Representatives from the various oil producers and the Tribes were invited and attended. Representatives of the NDDoH also participated by phone. The minor NSR permitting process was discussed, as well as questions that the companies submitted ahead of time. The group began discussions on the draft example permit and set up a workshop specifically to delve into the specific permit conditions for the following week. On September 7 and 8, 2011, the EPA hosted a two-day follow-up permitting workshop. All previous meeting attendees were invited, including the Tribes. Participants included the oil producers and their consultants. NDDoH representatives were also on the phone. At this meeting the group went through the draft example permit and discussed the proposed conditions and appropriate edits. Also discussed was what would constitute a complete application (administrative and technical) and the various methods of PTE calculation proposed by the companies in attendance. The EPA Region 8 hosted an additional meeting on November 30, 2011 to discuss the revised example permit, and representatives from the various oil producers and the Tribes were invited and attended. During these permitting workshops, it was brought to our attention that owners and operators routinely use temporary, portable utility flares capable of achieving a 98% VOC DRE for the initial period when a new oil and natural gas production facility is being prepared for permanent operations. A copy of the attendee list for each meeting has been included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

The final rule requires the owners and operators to monitor and keep records of the hours that a pit flare is operated, a description of the justification for use and the volume of gas sent to it, to ensure that the EPA can make a determination, if necessary, that injection of produced natural gas and natural gas emissions into a pipeline for sale or other beneficial purpose, or the use of the primary control device, has been maximized. Any deviations of these requirements must be reported to the EPA.

Comment:
Several commenters stated that the EPA should clarify that 98% DRE utility flares and combustors are not required to be installed as backup control devices if an operator chooses to route vapors to a production line and use a 90% VOC DRE control device as backup. The commenters stated that such a clarification would prevent operators tied into a sales line from keeping utility flares or combustors idle and on-site for infrequent backup use.

Response:
We agree. While the rule does not require the use of utility flares and combustors as back-up control devices if the owner or operator is routing produced natural gas and natural gas emissions to a sales line, the rule does not clearly state this. The rule has been clarified.

Comment:
Commenters stated that control requirements during completions, recompletions, and for the first 90 days of production are insufficient. The commenters urged the EPA to require that any flaring under the FIP be performed using an enclosed vent system, along with a utility flare or a similar device, which is capable of 98% VOC DRE.

Response:
We disagree with the commenter that control requirements during completions, recompletions, and for the first 90 days of production are insufficient. This FIP establishes requirements to control air pollution in the form of VOC emissions from oil and natural gas production and storage operations on the FBIR, comparable to those requirements developed by state permitting authorities. In other words, we were motivated to level the playing field for the regulated community. With that in mind, the NDIC and NDDoH allow the use of pit flares or other 90% VOC DRE control devices during completions and recompletions. Shared by both the State of North Dakota and the EPA, another reason to limit the required VOC destruction efficiency to 90% VOC DRE is that an owner or operator may be put at a significant economic disadvantage if they purchase and install the much more expensive 98% VOC DRE control devices and within the first 90 days after the first date of production a well is found to be too low producing to justify continued production and must be shut-in.

Comment:
Several commenters stated that the EPA must clarify that emissions from completion and recompletion operations do not need to be vented to a flare until the level of VOC is sufficient to support combustion. The commenters asserted that one might interpret the FIP language which required each owner or operator to “route all casinghead natural gas to a utility flare or a pit flare capable of reducing the mass content of VOC by at least 90%”(77 FR 48895) to include venting materials that are not flammable and therefore unable to sustain combustion. The commenters stated that such an interpretation would make compliance with the rule impossible, as vented materials are typically not flammable in the early stages of completion or recompletion. The commenters cite “Letter to Mr. Matthew Todd from Peter Tsirigotis, Director, Sector Policies and Programs Division (Sept. 28, 2012)” as evidence that the EPA recently reached a similar conclusion.
21

21
A copy of the letter has been included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Response:
While the regulatory language at § 49.4164(b) in the interim final rule is not specific on this point, the recordkeeping requirements for well completion and recompletion operations in § 49.4167(a)(4)(ii) of the interim final rule specifically require logging the date, time, and duration of any venting of casinghead natural gas from the oil and natural gas well; and specific reasons for each instance of venting in lieu of capture or combustion. Therefore, this requirement allows some degree of venting materials that may not be flammable during well completion and recompletion operations.

Comment:
Several commenters stated that this FIP is inconsistent with NSPS OOOO and adds further confusion for operators who will be required to comply with both sets of requirements.

These commenters further state that for all sources to which NSPS OOOO applies, the FIP should mirror NSPS OOOO requirements for oil and produced water tank control devices. Specifically, the commenters stated that because the NSPS OOOO does not take effect for tanks for one year, the inconsistency results in an unnecessary burden. The commenters also asserted that since NSPS OOOO does not apply to heater-treaters, the requirements in the FIP for heater-treaters should mirror the requirements of the NDDoH regulations precisely. The commenter also expressed concern that the terms of NSPS OOOO are still subject to challenges that have not been resolved, although the commenter indicated that the EPA was in discussions with industry representatives to resolve those issues.

Response:
We disagree that differences between this FIP and NSPS OOOO result in an “unnecessary burden” to owners or operators affected by the rules. Where there are differences between this FIP and NSPS OOOO, NDDoH requirements, and NDIC requirements, they exist for a specific reason. For example the requirements in this FIP for produced oil and produced water storage tanks provide legally and practicably enforceable control requirements for facilities currently operating on the FBIR until applicable storage tank requirements become effective under NSPS OOOO. At that time, the provisions in the NSPS OOOO for produced oil and produced water storage tanks will supersede the produced oil and produced water storage tank requirements in the FIP at § 49.4164(f), and owners or operators will never be required to comply with both sets of requirements since duplicate requirements do not apply to the affected equipment. In addition, we are addressing emissions controls for heater-treaters because we determined such controls are cost effective and have been demonstrated to be effective in light of the air quality concerns at play in the area. Specifically, we included the provision in the FIP at § 49.4164(d)(2)(iii), which requires aggregate storage tank VOC emissions at any facility that are greater than 20 tpy to be reduced by at least 98%, and VOC emissions less than 20 tpy to be controlled by at least 90%. We evaluated and adopted this FIP provision, which is consistent with the requirements for the heater-treaters found in the NDIC requirements at 38-08-06.4 and the heater-treater requirements in the Bakken Pool Guidance. We acknowledge that the 98% VOC DRE control requirement for heater-treaters in this FIP is at the upper end of the 90-98% range in the Bakken Pool Guidance. However, the owners and operators of oil and natural gas production facilities on the FBIR have indicated that a 98% VOC DRE is achievable and committed in their synthetic minor NSR applications to reduce the mass content of VOC emissions routed to the enclosed combustors or utility flares used for both produced gas from heater-treaters and flashing gas from storage tanks by at least 98%. With this reduction, the owners and operators demonstrated that for most of their facilities the potential emissions would not trigger the requirements to obtain a PSD and/or Part 71 permit when accounting for the requested federally enforceable restrictions. The 98% level of control is necessary because of the high volume of VOC emissions that must be controlled.

The commenter did not specifically state which “challenges” to NSPS OOOO they were referring to in their comment. However, current petitions filed concerning NSPS OOOO are outside of the scope of this rule. Regardless of any future changes to NSPS OOOO, the primary intent of FIP is to provide environmental protection on the FBIR by creating federally enforceable control requirements for oil and natural gas operations on the FBIR. Additionally, as discussed above, these FIP requirements are consistent with the State's requirements.

Comment:
Multiple commenters stated that completion and recompletion requirements should be removed from the FIP because completion and recompletion requirements in NSPS OOOO only apply to hydraulically fractured natural gas wells, and that the application of these activities to oil wells in the FIP is therefore inconsistent with NSPS OOOO.

Response:
This FIP requires owners or operators to route emissions from well completion and recompletion operations to a combustion device. This is similar to the requirements for hydraulically fractured gas wells in NSPS OOOO prior to January 1, 2015. While requirements for completions and recompletions in the NSPS OOOO only apply to natural gas wells, the FIP includes this requirement for the oil and natural gas wells on the FBIR because of the high amount of associated natural gas in the crude oil. This is a significant source of VOC emissions that required control in the FIP and we think such a requirement is appropriate given the emissions characteristics of these wells in the Bakken formation, regardless of the emissions characteristics of other oil and natural gas production wells nationwide.

Comment:
Commenter stated that the EPA should require recompleted oil and natural gas wells on the FBIR to perform reduced emission completions (RECs). The commenter asserted that many states including Colorado and Wyoming currently require RECs, and that both states have thriving oil and natural gas industries.
22

The commenter also stated that several natural gas companies currently employ use of RECs despite the fact that they are not required. The commenter insisted that, if RECs are determined not to be economical in areas like the FBIR with limited natural gas pipeline and gathering line infrastructure, the EPA must find alternative local uses for the natural gas. Commenter stated that the EPA should at least require RECs on the FBIR in the near future, similar to the NSPS. Commenter stated that the EPA's NSPS OOOO will require RECs at all new and modified gas wells beginning in 2015. Furthermore, another commenter stated that if the FIP were to require green completions, advanced notice of completion or recompletion as is included in the NSPS OOOO would be a critical requirement in the FIP.

22
Commenter cites William C. Allison, Director, Air Pollution Control Division, Colorado Department of Public Health and the Environment, Testimony before the United States Senate, Environment and Public Works Committee, Clean Air and Nuclear Safety Subcommittee, June 19, 2012. A copy of this transcript has been included in the docket for the rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Response:
RECs cannot be performed if there is no gathering line available to convey natural gas produced during the completion flowback. Such lines are not likely to be available if the well location has no access to a natural gas gathering system. Although pipeline infrastructure is currently being developed on the FBIR, we do not believe there is currently sufficient access to natural gas gathering pipelines in all development areas of the FBIR to require RECs at this time. We recognize the potential for VOC emissions from well completion and recompletion operations and have maintained the requirement in the final rule to reduce these emissions by at least 90%. If we determine at a later date that there is a need for additional control of VOC emissions from well completion and recompletion operations, we may propose additional FIPs or propose supplements to this FIP.

Comment:
One commenter stated that the emission control requirements of the FIP will not exceed the current NDIC emission control requirements,

providing a “smooth transition” for the owners or operators. Another commenter requested more stringent emission limits be required than the NDIC requirements. A third commenter expressed concern that the regulations of the proposed FIP are equal to the NDDoH regulations and noted that the FBIR is its own nation, and therefore the FIP regulations are pertinent to the residents of the FBIR and not individuals outside the FBIR's boundaries.

Response:
One of the goals of this FIP is to provide air quality protection for the residents of the FBIR, while also allow for continued development of mineral resources. The FIP requirements are consistent with the most relevant aspects of the North Dakota rules based on our evaluation that the level of control was appropriate for meeting these goals while ensuring the enforceability required by a federal rule. We also evaluated over 150 synthetic minor NSR permit applications
23

to identify the most significant sources of VOC emissions and associated control equipment employed by the operators to ensure that the control requirements in this FIP are based on the nature of oil and natural gas production and storage operations on the FBIR.

23
The information reviewed was contained in synthetic minor NSR applications submitted to EPA, which are included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Comment:
Several commenters stated that the requirements of the FIP are too stringent. The commenters also noted that since FBIR is in attainment with all applicable NAAQS, highly stringent controls are neither appropriate nor necessary. The commenters stated that the 98% control required in the FIP is above the 90-98% range the EPA allowed in recent CAFOs. The commenters also stated that the requirements of the FIP are inconsistent with the requirements that currently apply to operators of the same type of facilities through NDDoH regulations, specifically the Bakken Pool Guidance. The commenters asserted that the more burdensome requirements of the FIP as compared to those outside the FBIR may discourage expansion of operations within the FBIR.

On the other hand, other commenters stated their support of the EPA's requirements in the FIP, and encouraged the EPA to retain the 98% VOC DRE requirement for flaring at storage tanks, restating the EPA's position that this level is appropriate considering the unique geochemistry of the Bakken formation.

Response:
We disagree that the requirement to reduce VOC emissions from production and storage operations by 98% is too stringent or burdensome. The owners and operators of oil and natural gas production facilities on the FBIR have indicated that a 98% VOC DRE is achievable and have even committed to it in their synthetic minor NSR applications to reduce the mass content of VOC emissions routed to the enclosed combustors or utility flares used for both produced gas from heater-treaters and flashing gas from storage tanks by that amount. The high VOC content of the oil and natural gas produced from Bakken Pool operations allows for a higher DRE. Many of the owners and operators of oil and natural gas production facilities indicated that a DRE of 98% was imperative to limit the applicability of permitting requirements that may result if only a 90% creditable reduction of VOC emissions is allowed. We also evaluated regulations in other oil and natural gas producing states within Region 8 and note that this FIP is consistent with Wyoming's requirements to control both storage tank and separation vessels by 98%.

Comment:
Multiple commenters expressed concern with the requirements in § 49.4164 which states that, beginning with the first date of production, facilities subject to the rule are required to route natural gas emissions from production operations and storage operations to a 90% emissions reduction device. Within 90 days of the first date of production, this device must be either replaced with a 98% emissions reduction device or tied to a gas sales line. The 90-day time frame listed in the rule should be extended to at least 180 days, to allow operators time to get the required equipment. There is added concern that given the number of devices that may need to be purchased for new facilities, particularly with the impending implementation of NSPS Subpart OOOO, equipment shortages will be expected. Further, commenters stated that the EPA should include a provision here that allows for an extension of the 180-day time limit for upgrading to a sales line or 98% control device in the event such equipment is unavailable.

Response:
We disagree with the commenter that we should change the 90-day timeframe allotted to either replace a 90% emissions reduction device with a 98% emissions reduction device or inject produced natural gas and natural gas emissions to a gas sales line. One of the goals of this FIP is to protect human health and the environment and the required VOC emission control should be achieved as expeditiously as possible. Furthermore, when evaluating the estimated emissions provided by the oil and natural gas production operators for the facilities covered by the August 2011 CAFOs (77 FR 48879), we found that in many cases, the difference in controlled heater-treater emissions between only 90% VOC DRE for 90 days or less versus more than 90 days is the difference between being a true minor source of VOC emissions under the Federal Tribal NSR regulations and being a major source of VOC emissions under the PSD regulations based on the high VOC emissions from these oil and natural gas operations on the FBIR.

We recognize that some owners and operators might need time to acquire equipment that achieves the required VOC control and we believe, based on the information in permit applications provided by the owners and operators on the FBIR that 90 days is a reasonable timeframe to acquire the necessary control equipment. The interim final FIP contains a provision that the owner or operator may use 98% VOC DRE control devices other than those specified in the FIP upon prior written approval from the EPA. Based on information submitted to date by an operator requesting alternative control device approval, it is possible to economically engineer shop-built flares that can be demonstrated to meet the required VOC DRE and that can be used until a utility flare becomes available, if insertion of the produced natural gas to a sales pipeline or use of the produced natural gas for other beneficial purpose is demonstrated to not be feasible.
24

24
A copy of the submittal from Lisa Decker, WPX Energy, to Carl Daly, EPA Region 8 Air Program Director, on November 13, 2012 has been added to docket for the rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

F. Monitoring and Recordkeeping Requirements

Comment:
Multiple commenters stated that the EPA should impose less burdensome monitoring and recordkeeping requirements for minor sources. The commenters asserted that the level of detail required in the FIP is generally required only for major sources, and that it is higher than the detail required for minor sources by NDDoH regulations and the Bakken Pool Guidance. The commenters stated that the FIP should mirror NDDoH regulations regarding heater-treater control devices, meaning that monitoring and recordkeeping requirements should be eliminated. The commenters stated that the cost of monitoring and recordkeeping in the

FIP is high compared to the benefit, and that these factors will create a disincentive to expand drilling on the FBIR. Although one commenter stated that the EPA's monitoring and reporting requirements are reasonable and will facilitate compliance while also gathering pertinent information on operations. Yet another commenter stated that the EPA's monitoring and reporting requirements could be even more stringent to include leak monitoring of the closed vent systems and advanced notification prior to performing a well completion or recompletion.

Response:
We acknowledged in the
Federal Register
notice and the TSD for the interim final FIP that monitoring, reporting, and recordkeeping (MRR) requirements were an area where the FIP would differ from the NDIC and NDDoH regulations, and the Bakken Pool Guidance. Federal regulations must contain requirements that are legally and practicably enforceable; and therefore this FIP contains legally and practicably enforceable provisions that are necessary to meet the requirements for federal regulations. Recognizing that this FIP regulates different oil and natural gas production equipment than NSPS OOOO, the approach we took in developing MRR requirements for oil and natural gas production emission control equipment is similar to the approach the Agency used in developing MRR requirements for gas well production emission control equipment. Therefore, we do not believe the requirements are any more burdensome than requirements for similar equipment in NSPS OOOO.

Comment:
Several commenters stated that the EPA should allow an operator to make a visual inspection only once per quarter, and should require that operator to conduct a one-hour Method 22 evaluation only if the control device is actually smoking. The commenters asserted that the amount of time it would take just to conduct quarterly monitoring without this change could potentially require three full-time equivalent operators for that task alone.

The commenters requested that the EPA make two additional changes to the FIP's current requirements for monitoring smoking combustion devices, though the commenters ultimately stated that the resource burden to meet the smoke monitoring requirements would still be extreme regardless of whether the two changes were made. The first change is that the EPA increase the amount of time a control device can smoke before being considered a “smoking” device from two minutes to five minutes for consistency.
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The second change is that the EPA remove the phrase “whenever an operator is on site” from § 49.4166(g)(3). The commenter stated that this phrase is ambiguous when read in conjunction with the phrase “at a minimum quarterly.” The commenters also stated that it would be extremely burdensome for an operator to observe a flare for an entire hour each time that operator was on site. The commenters ultimately stated that even with this change, the requirement would still be extremely burdensome.

25
Commenter does not list the rule with which such a change would maintain consistency.

Response:
We agree with the commenters that the EPA should only require an operator to conduct a Method 22 evaluation if visible smoke emissions are observed. We also agree with the commenter's request that we increase the amount of time a control device can smoke before being considered a “smoking” device from two minutes to five minutes. This is consistent with the specification in NSPS OOOO at § 60.5415(e)(vii)(C) and (e)(vii)(D)(3), and the general provisions at § 60.18(b) for visible emissions testing of combustion control devices (77 FR 49556). However, we do not agree that one-hour observations are suitable, as both § 60.18(b) and NSPS OOOO require two-hour observations and we have no reason to conclude that a different approach is appropriate here.

We have revised the applicable condition in this final FIP to require the owner or operator to monitor for visible smoke and to only conduct a Method 22 evaluation if visible smoke emissions are observed. We have also revised the provision to specify that visible smoke emissions are present if smoke is observed more than five minutes in any 2 consecutive hours. We have not removed the requirement to conduct on site inspections of the operation of the device when an operator is onsite, but not less frequently than quarterly, because we disagree that this requirement is ambiguous. In addition, since we changed the monitoring provision to require observations for visible smoke before triggering the requirement for Method 22 evaluations, the commenters' concern that the requirements are burdensome has been addressed.

Comment:
Several commenters stated that the EPA should allow the operator to make frequent onsite checks or use other alternatives to meet the continuous recording device requirement in § 49.4165(c)(6)(v) for utility flares and enclosed combustors. The commenters asserted that there are significant challenges with obtaining the appropriate continuous monitoring equipment, and that operator checks should therefore be accepted as fully meeting the requirement, or at least as meeting the requirement in the interim.

Response:
We agree that there needs to be an opportunity to perform alternative monitoring upon prior written EPA approval. We have revised the applicable provision at § 49.4166(i) to reflect this in the final rule.

Comment:
One commenter stated that the EPA should “require regulated entities to regularly monitor VOC emissions from the components of closed-vent systems, using well-established methods and leak thresholds.” The commenter stated that in the preamble and proposed regulatory text, the EPA required proper maintenance and operation of vent lines, connections, fittings, valves, relief valves, or any other appurtenance employed to contain, collect and transport gases, and required that these components be designed to operate with no detectable natural gas emissions (77 FR 48889, 48896). However, the EPA failed to require producers to demonstrate or verify that the required closed-vent systems are “maintained and operated properly” or “operate with no detectable natural gas emissions.” Commenter stated that without a monitoring or verification requirement, the requirements for closed-vent systems “will be unenforceable and largely hortatory in nature.”

Commenter also stated that the lack of monitoring or verification requirements for closed-vent systems is at odds with the goal of the FIP, which is to establish emission limits at oil and natural gas facilities that are legal and practically enforceable. Commenter asserted that absent these verification requirements, a producer could not guarantee natural gas is controlled at 90% or 98%, and the EPA could not guarantee that the projected emission reductions have been achieved. Commenter stated that the EPA requires closed-vent monitoring techniques in other regulations, including NSPS OOOO and the “National Uniform Emission Standards.”
26

Commenter recommended that, at a minimum, the EPA use the approach proposed by the agency in the National Uniform Emission Standards.

26
“National Uniform Emission Standards for Storage Vessel and Transfer Operations, Equipment Leaks, and Closed Vent Systems and Control Devices; and Revisions to the National Uniform Emission Standards General Provisions,” 77 FR 17,898, 17,943 and 18,009 (proposed Mar. 26, 2012) (proposed 40 CFR 65.429(a)).

Response:
We disagree that leak detection and repair (LDAR) requirements should be included in this FIP. As discussed in the preamble and TSD for NSPS OOOO, it was determined that LDAR monitoring was not cost effective for smaller oil and natural gas production facilities and we have no information from which to conclude that the same is not the case here. To demonstrate compliance with the requirements for closed-vent systems, the final rule requires all vent lines, connections, fittings, valves, relief valves, or any other appurtenance on tank covers and closed-vent systems be maintained and operated properly at all times and that they are visually inspected at least quarterly while the equipment is operating. Further, each bypass devices on all closed-vent systems are required to be equipped with a flow meter to continuously monitor the volume of natural gas emissions that are diverted from the natural gas gathering pipeline, or required control device. The final rule requires that the owners and operators keep records of all monitoring parameters and report instance where construction and operation was not performed in compliance with the requirements specified in the final rule.

G. Reporting Requirements

Comment:
Commenter recommended that the EPA require a self-certification mechanism, which would require a senior company official to certify as to the truth, accuracy and completeness of its annual report. Commenter suggested that the EPA draw on the example of the NSPS OOOO in developing this mechanism.

Response:
We agree that self-certification is an important mechanism for assuring the public that the information submitted by each facility is accurate and have added a provision in the rule requiring owners or operators to certify as to the truth, accuracy and completeness of the annual reports. The EPA already requires a similar certification in the NSPS OOOO; therefore, we concluded that it is not unreasonable to require the certification for reports submitted under this FIP.

H. Cost Analysis

Comment:
One commenter agreed with the EPA's position that the FIP does not impose a significant cost on operators. Another commenter noted the benefits of the FIP, specifically citing the substantial and cost-effective VOC reductions that the EPA estimated in the FIP.

Response:
We acknowledge the support of these commenters for this FIP. We have included information regarding the cost-effectiveness of this FIP in the TSD for the interim final rule.
27

27
The TSD includes a more detailed explanation of the cost analysis for this FIP. It can be found in the docket for this rule, Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Comment:
Commenter stated that the EPA does not address the economic benefits of natural gas capture when estimating the costs and benefits of the FIP. The commenter stated that “producers are very likely to derive substantial amounts of revenue by installing vapor recovery units and gathering lines to route excess natural gas that is captured by voluntary RECs and through other regulatory requirements to reduce leaks.” The commenter referenced an NRDC report
28

and the NSPS OOOO (77 FR 49534, 49537) to support this point. The commenter also stated that the EPA noted this revenue opportunity in the FIP TSD, though it did not address it in the FIP itself. The commenter stated that it is especially important to consider these benefits because the EPA notes that its analysis already overestimates costs, and also generally stated that gas is a valuable commodity that should not be wasted.

28
“Natural Resources Defense Council, Leaking Profits: The U.S. Oil and Gas Industry Can Reduce Pollution, Conserve Resources, and Make Money by Preventing Methane Waste,” 2012. A copy of this document has been included in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

Response:
We did not discuss the use of RECs in the cost analysis in the TSD, as there is not currently adequate access to pipeline gathering systems on the FBIR to require RECs from well completion and recompletion operations, thus the current infrastructure is not amenable to this technique at this time. However, if we determine at a later date that there is a need for additional control of VOC emissions during oil and natural gas production well completion and recompletion operations on the FBIR, we may propose additional FIPs or propose supplements to this FIP.

Comment:
Commenter stated that the EPA failed to quantify the economic benefits of protecting public health and ecosystems from pollution in the FIP. Commenter stated that increased oil and natural gas production leads to increased levels of ozone in the surrounding area, risking public health.
29

Commenter stated that the EPA must consider the medical and other public health costs associated with oil and natural gas production and resulting ozone in order to provide an accurate economic impact assessment for the FIP.

29
Commenter provides several examples in which oil and gas development drives up ozone emissions. See NRDC comments in the docket for this rule for specific citations.

Response:
Given the accelerated development in this area, the high VOC emissions associated with the oil and natural gas operations and the absence of infrastructure on the FBIR, we determined the FIP should be effective immediately upon promulgation to ensure the protection of public health and the environment from exposure to air pollution, avoid fire hazards and protect the public from hazardous conditions. This FIP establishes regulations that significantly reduce VOC emissions from oil and natural gas production facilities on the FBIR, thereby protecting public health and the environment. This FIP is not a significant regulatory action under Executive Order 12866 and therefore an analysis of the potential costs and benefits associated with this action is not required. While we did not specifically quantify the economic benefits of protecting public health and the environment in the cost analysis, the control equipment required by this FIP is already extremely cost effective at less than $15/ton, and any additional cost benefits due to possible reduced public health costs would only result in increased cost effectiveness. Therefore, we believe the cost analysis sufficiently addresses the economic impacts for this action.

I. Public Notice

Comment:
A commenter stated that the EPA did not provide the public with proper notice of the hearing, and therefore failed to ensure public participation in the rulemaking process. The commenter stated that the notice of the hearing in the tribal newspapers mistakenly referred to the hearing as a “meeting,” which the commenter noted is quite different than a hearing. The commenter also stated that information about the hearing should have been advertised on the radio, and noted that many residents in the FBIR have limited internet access. Some commenters blamed lack of adequate notice on what they observed to be a low turnout at the hearing(s). One commenter stated that the oil companies had been given adequate notice, but the public had not. One commenter urged the EPA to come back and host more hearings. Several commenters requested an extension of the comment period, but none specified a suggested length of extension.

Response:
We disagree with these comments. We have exceeded the CAA

public notice requirements for rulemaking. Under Section 307, the EPA is required to allow any person to submit written comments, data, or documentary information, as well as give interested persons an opportunity for the oral presentation of data, views, or arguments. The EPA is required to keep a transcript of any oral presentations and keep the record of the proceeding open for 30 days after completion of the proceeding to provide an opportunity for submission of rebuttal and supplementary information. The EPA is required to allow a reasonable period of at least 30 days for public participation.

As explained earlier in this notice, in promulgating this rule, the EPA is exercising its discretionary authority under sections 301(a) and 301(d)(4) of the CAA to promulgate regulations as necessary to protect tribal air resources. Therefore, while the Title I planning requirements of the CAA applicable to states do not directly apply to the EPA in promulgating a FIP in Indian Country, the EPA used the public notice requirements found within the planning requirements as a guide in developing this FIP. For this FIP, the EPA also followed the public hearing and public notice regulations in 40 CFR 51.102 as a guide. According to CAA sections 301(a) and 301(d)(4) and 40 CFR 51.102, notice given to the public is to be provided by prominent advertisement in the affected area announcing the date(s), times(s), and place(s) of such hearings. Each proposed plan is to be made available for public inspection in at least one location in each region that it will apply.

The proposed FIP was published in the
Federal Register
on August 15, 2012. The
Federal Register
notice stated that public hearings would be held on September 12, 2012 from 1-4 p.m. and again at 6-8 p.m. at the 4 Bears Casino and Lodge in New Town, ND. An address for the location and contact information was provided. The
Federal Register
notice provided for a 60-day comment period, which required that public comments be received by the EPA Region 8 by October 15, 2012 and provided instructions for submitting comments. Two locations for review of publically available supporting docket materials for this FIP were listed including one at the EPA Region 8 office in Denver and one at the Environmental Division office of the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation, in New Town, ND. A link for publically available electronic docket materials was listed in the
Federal Register
notice.

A public notice was posted in the following newspapers regarding the availability of this FIP for public comment on August 15 and 17, 2012: Bismarck Tribune, Dickinson Press, Minot Daily News, New Town News, Williston Herald, MHA Times, and Mountrail County Record. This public notice included all of the information about the public hearings, docket review locations (including internet link), contact information, and the instructions for submittal of comments that was contained in the
Federal Register
notice. Additionally, this public notice listed seven locations and addresses where the public could review copies of this FIP and all supporting docket materials in addition to the two listed in the
Federal Register
notice, including: Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation's Administration Office, New Town, ND; Fort Berthold Community College Library, New Town, ND; Mandaree Community Center, Mandaree, ND; Parshall Segment Office, Parshall, ND; Twin Buttes Memorial Hall, Halliday, ND; White Shield Segment Office, Roseglen, ND; and Four Bears Community Building, Four Bears Village, ND. The EPA confirmed that this public notice was published in each of the seven local newspapers. We confirmed that copies of the FIP and administrative records were received on August 13, 2012 by each of the nine locations listed above.

We also prepared a public notice and request for comment bulletin. A copy of the bulletin was provided to the Director of the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation Environmental Programs Office in New Town, ND on August 10, 2012 with a request that it be posted in prominent locations throughout the Reservation and affected area. The bulletin provided a summary of the proposed rule, the contacts, the nine locations where the proposed rule and administrative records could be viewed, the date, times and location of the public hearings and referred the public to a link for publically available electronic docket materials.

Additionally, we prepared a Public Service Announcement (PSA) for the local radio station, KMHA 91.3 FM Radio, Fort Berthold, New Town, ND. A copy of the PSA was provided to the Director of the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation Environmental Programs Office in New Town, ND on August 10, 2012 with a request that it be provided to the local radio station for broadcasting throughout the Reservation and affected area. The PSA provided a brief summary of the proposed rule, requested public comment through October 15, 2012, provided a contact, listed the eight locations on the FBIR where the proposed rule and administrative records could be viewed, and provided date, time(s) and location information for the September 12, 2012 public hearings. One of the commenters noted the PSA was aired on the local radio station. This is documented on Page 30 of the public hearing transcript for September 12, 2012 at 6 p.m.

Transcripts for both public hearings held on September 12, 2012 were generated and placed into the docket for this FIP. The comment period was kept open for 30 days after the public hearing. We verified that the seven newspaper notices published on August 15 and 17, 2012 referenced the public hearings held on September 12, 2012 as “public hearing” and not as a “public meeting.” This included the New Town News and the MHA Times in New Town, ND. The commenter may have intended to refer to the PSA instead of the newspaper regarding reference to a “public meeting” instead of a “public hearing.” The PSA inadvertently referred to the “public hearing” as a “public meeting.”

These opportunities for public participation were provided equally to the public and the regulated community. All residents and the regulated community were given the same opportunities to request and access information, comment and participate in this rule making process. Based on the
Federal Register
notice, newspaper notices, posting public notice and request for comment bulletin at locations on the reservation, holding two public hearings, making public hearing transcripts publically available, providing a 60-day public comment period, PSA, and links for publically available electronic docket materials, the EPA has exceeded all legal requirements for proper public notice of this FIP. We therefore decided not to hold additional hearings and meetings, or extend the public comment period.

Comment:
Another commenter stated that the lack of adequate public notice was not compliant with environmental justice.

Response:
We disagree with this comment. Environmental justice is one of the Agency's highest priorities and we believe the process used in developing this rule fully complies with the requirements of Executive Order 12898 (59 FR 7629, February 16, 1994), which establishes federal executive policy on environmental justice (EJ). Its main provision directs federal agencies, to the greatest extent practicable and

permitted by law, to make EJ part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA defines environmental justice as providing fair treatment and meaningful participation in environmental decision making. As detailed above, EPA exceeded CAA public notice requirements for rulemaking, and the record reflects extensive efforts to ensure meaningful participation in this case. The EPA's Action Development Process, Interim Guidance for Considering Environmental Justice during the Development of an Action provides additional guidance for implementation of EO 12898 related to public notice for actions like rulemaking. This guidance suggests inclusion of one or more public meetings or hearings in or near affected communities and tribes. Public meetings or hearings should include sufficient notice and should be scheduled at a time and place convenient to the affected communities and tribes. Successful solicitation of public comments from affected communities and tribes may incorporate tailored outreach materials that are concise, understandable, and readily accessible to the communities to be reached. For remote towns and villages, local radio stations, local newspapers, and posters at village or community centers may represent the most effective approach. We employed these methods to ensure that we reached the FBIR EJ community and allowed for meaningful involvement of affected communities and tribes.

While we understand that many residents on the FBIR do not have internet access, we employed numerous prominent advertisement methods not relying on the internet, including newspaper notices, posting public notice and request for comment bulletin at locations on the FBIR, holding public hearings, providing a 60-day public comment period, providing a PSA broadcast on local radio, as well as relying on the internet by providing links for publically available electronic docket materials.

We conclude that the public notice process exceeded EPA's legal obligations in rulemakings of this type, and that there is no reason to believe that such public notice was inadequate for compliance with the Executive Order.
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Although we agree that turnout was low at the September 12, 2012 public hearings, we do not believe that additional public hearings or meetings would have significantly increased turnout. We believe that low turnout at the public hearings was due to factors other than the significant public notice methods employed. We employed every reasonable effort to encourage attendance at public hearings and obtain public comments on this FIP.

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See In re Shell Gulf of Mexico, Inc. & Shell Offshore, Inc., 15 EAD __, OCS Appeal Nos. 11-02, 11-03, 11-04, 11-08,
slip op. at 40 n. 38 (EAB Jan. 12, 2012) (treating evidence of compliance with statutory and regulatory public participation requirements as showing sufficiency of participation for purposes of compliance with EO). A copy of the document has placed in the docket for this rule under Docket ID: EPA-R08-OAR-2012-0479, which can be accessed at:
http://www.regulations.gov.

We recognize that there are EJ concerns in the FBIR community. We have determined that this rule will not have disproportionately high and adverse human health or environmental effects on minority, low-income, and indigenous populations, because it ensures compliance with the NAAQS, which provides environmental and public health protection for all affected populations. Compliance with the NAAQS is relevant to an EJ claim to the extent that the NAAQS are health-based standards, designed to protect public health with an adequate margin of safety, including sensitive populations such as children, the elderly, and asthmatics.

Comment:
A commenter asked if the annual report of FBIR facility activity would be accessible by the public.

Response:
These reports will be submitted to the EPA Region 8 office in Denver, Colorado and maintained on file and will be available to the public. The documents may be obtained through the Freedom of Information Act (FOIA) process. If you seek a record, you should address your request to the EPA Region 8 FOIA Office. Requests for records can be sent by mail to FOIA office at Regional Freedom of Information Officer; U.S. EPA, Region 8, Mailcode: 8-OC; 1595 Wynkoop Street; Denver, CO 80202-1129. Request may also be made by electronic mail to
r8foia@epa.gov,
by facsimile at (303) 312-6859, or by telephone at (303) 312-6856. Your request should be as specific as possible with regard to the subject, time frames, and locations. You do not have to give a requested record's name or title, but the more specific you are; the more likely it will be that the record you seek can be located. For example, if you are seeking records dealing with the FIP annual reports, request the FBIR FIP Annual Reports, the owner or operator you seek information on, and the calendar year(s) for the reports you seek.

V. Summary of Final Rule and Significant Changes from the Proposed and Interim Final Rule

A. Administrative Edits

Correction:
In the proposed rule we identified incorrect citations to the Code of Federal Regulations (CFR) for publishing the rule. The final rule has been promulgated at Subpart K of 40 CFR part 49 which is specific to Region 8 FIPs.

§ 49.140 is now § 49.4161;

§ 49.141 is now § 49.4162;

§ 49.142 is now § 49.4163;

§ 49.143 is now § 49.4164;

§ 49.144 is now § 49.4165;

§ 49.145 is now § 49.4166;

§ 49.146 is now § 49.4167; and

§ 49.147 is now § 49.4168.

B. Introduction

This rule applies to any person who owns or operates an existing (constructed or modified on or after August 12, 2007), new, or modified oil and natural gas production facility
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that is located on the FBIR and producing from the Bakken Pool with one or more oil and natural gas wells, any one of which a well completion or recompletion operation is/was initiated on or after August 12, 2007.

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For the purposes of this rule, an oil and natural gas production facility consists of one or more oil and natural gas wells and the air pollution emitting units that are utilized for production operations and storage operations for those wells. This definition was clarified from what was proposed in the interim final rule. Additionally, August 12, 2007 is the earliest well completion date identified in the CAFOs.

For the purposes of this rule, a well completion means the process that allows for the flowback of oil and natural gas from newly drilled wells to expel drilling and reservoir fluids and tests the reservoir fl

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2013-05666. Public record. Not legal advice.