Publication
Supreme Court of Canada rules managers cannot unionize in Quebec
On April 19, 2024, the Supreme Court of Canada handed down the long-awaited decision on the unionization of managers.
Publication | May 2016
On May 12, 2016, the U.S. Environmental Protection Agency (“EPA”) issued New Source Performance Standard (“NSPS”) Subpart OOOOa, the agency’s climate change regulations for methane and volatile organic compound (“VOC”) emissions for the oil and natural gas sector.1 Although the new rule only applies to facilities constructed, reconstructed, or modified after September 18, 2015, it may be a first step towards climate change regulations for existing oil and gas sources. The new rule builds on existing Subpart OOOO, as follows:
In general, all Subpart OOOO requirements have been incorporated into Subpart OOOOa, with the applicability of many requirements broadened significantly. The most significant elements of the rule are the extension of REC requirements to fractured and refractured oil wells, OGI fugitive emissions monitoring for well sites and compressor stations, and the application of compressor leak standards to the natural gas transmission segment.
NSPS Subpart OOOOa was promulgated under Section 111(b) of the Clean Air Act (“CAA”), which means it applies only to new, reconstructed, or modified affected facilities. However, the EPA may eventually propose climate change standards for existing sources under Section 111(d). Because this latter statutory provision is the basis for the agency’s Clean Power Plan regulations for existing power plants, the outcome of the legal challenges to that rule may strongly influence the likelihood and scope of future climate change regulations for existing oil and gas facilities.
When the Subpart OOOO oil and gas standards were finalized in 2012, the EPA declined to impose explicit requirements for methane reductions, instead allowing methane to be controlled as a “collateral benefit” of VOC reductions. However, the agency subsequently received petitions for reconsideration in which environmental advocacy groups urged the Administrator to adopt standards for the “methane pollution” released by the oil and gas sector.
The Subpart OOOOa rule is the agency’s response to the petitions for reconsideration. In the years since the petitions, the EPA collected data on oil and gas sector methane emissions through the Mandatory Greenhouse Gas Reporting Rule and prepared several white papers, issued in 2014, summarizing sector emissions and potential mitigation technologies.
The final rule was also influenced by President Obama’s 2013 Climate Action Plan and Methane Strategy and the administration’s announcement in January 2015 of a new goal to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. While not mentioned in the preamble, it appears clear that the new rule is also an element of the President’s plan to employ administrative rules to achieve administration commitments under the December 2015 Paris Agreement (pursuant to the United Nations Framework Convention on Climate Change).
In the preamble, the EPA states that the Best System of Emissions Reduction (“BSER”)—the control standard for new, modified, and reconstructed NSPS sources—is generally the same for methane as it is for VOCs. Accordingly, as a first step, Subpart OOOOa keeps the VOC emissions controls specified under Subpart OOOO and also applies these same measures to the control of methane.
However, the rule also adds new requirements, extends the applicability of Subpart OOOO requirements to additional types of sources, and expands coverage to additional segments of what the EPA calls the oil and natural gas source category (meaning the production, processing, transmission, and storage “segments”). These new and expanded requirements, summarized below, will apply to affected facilities constructed, modified, or reconstructed after September 18, 2015.
The EPA also finalized “implementation improvements” to Subpart OOOO, but did not amend the rule’s substantive control standards. The most significant of these amendments are:
Many of the provisions in the Subpart OOOOa rule could have been promulgated by the EPA as VOC control provisions, without any consideration of methane emissions. However, it has been touted as a climate change rule and, therefore, constitutes another step in the EPA’s campaign to regulate GHGs under the existing Clean Air Act without additional authorization by Congress. As such, it is expected that there will be numerous legal challenges to the rule.
Beyond climate change symbolism, the rule’s substantive provisions will impose a significant compliance burden on industry. Subpart OOOOa is the first federal standard to extend leak detection and repair requirements to production well sites and compressor stations—compliance with the periodic OGI surveys required by the rule will require significant resources by industry, especially so given that the EPA did not finalize the proposed exemption for well sites with less than 15 bopd production.
The expansion of requirements to apply sector-wide and the extension of control requirements to additional sources will also impose compliance costs. In particular, REC requirements for hydraulically fractured oil wells will be significant, given that many oil production facilities are not connected to sales pipelines, instead flaring separated gas and relying on trucks to convey crude oil and condensate liquids to market.
The requirement for professional engineer certifications for vent systems is also significant. Based on certain Consent Decrees with oil and gas operators and recent negotiations in the Bakken, the EPA has been seeking to impose a “no venting” standard for vapor collection systems at oil and gas facilities. The new rule's requirement for professional engineer certifications for these systems is clearly intended to move operators towards this level of design and control. Specifically, the professional engineer will need to verify and certify that the closed vent system is designed to handle all reasonably expected emissions scenarios, including flash emissions based on “peak flow,” such that thief hatches and other devices will not relieve during normal operations.
2 The EPA found that it was not cost effective to require the installation of a control device solely for the reduction of emissions from pneumatic pumps.
Publication
On April 19, 2024, the Supreme Court of Canada handed down the long-awaited decision on the unionization of managers.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023