The midstream world is bracing for the implementation of a costly and complex set of new federal regulations targeting spark-ignited reciprocating internal combustion engines (SI RICEs). In a move to lessen air pollution, the Environmental Protection Agency (EPA) introduced the new rules through the important Subpart ZZZZ of its National Emission Standards for Hazardous Air Pollutants (NESHAP) regulation, which will force companies to better control, manage and regulate their engines.

Owners and operators of SI RICEs face a string of new rules under the new legislation, says Exterran’s Steve Abernathy, vice president of quality, safety, health and environment and North American operations.

“NESHAP ZZZZ is significant because it will impact all existing engines,” Abernathy tells Midstream Business. “Previously, only a portion of engines were regulated. Compliance necessitates in many cases new processes, methods and systems—and potentially the installation of additional emission-control equipment. It also requires thorough documentation that must be accessible for potential audits. The EPA reports that industry compliance costs could be in the hundreds of millions of dollars. It is possible that the actual cost could be much higher.”

The new regulation will extend environmental standards to all area-source SI RICEs, meaning each piece of equipment will be somehow federally regulated. New maintenance requirements and emission-control equipment will be based on engine location and horsepower. Engines in remote locations must follow maintenance programs, while those in non-remote status are required to follow emission-control system rules.

The rules are aimed at reducing engine emissions, thereby improving local air quality. Aside from making the necessary adjustments to their engines, affected companies will be required to prove their compliance by closely monitoring and documenting activities.

The clock is ticking on compliance, with the new regulations set to kick in October 19. It’s crucial for companies to get involved and act early, say some of the industry’s environmental experts.

“Time is not on your side, so get started now,” says Abernathy. “Learn the rules and assess your options quickly and decisively. Evaluate whether compliance can be assessed and maintained internally or whether some degree of external expertise or services is needed.”

Challenges and opportunities

The new rules are expected to bring both challenges and opportunities. For starters, companies will be expected to better document their maintenance and operations practices. Records must be maintained for at least five years.

“As they stand, the new ZZZZ rules will require more manpower for record keeping, reporting and equipment maintenance and will likely result in increased operating costs by virtue of the sheer number of engines currently in operation,” Brad Stevener, environmental services manager for Valerus, tells Midstream Business.

“For these reasons, industry involvement in the regulatory process is critical: When rules are proposed for a given industry, those affected should comment on the draft legislation, whether through the company or industry trade groups. By presenting facts, data, economics and operating scenarios to regulators, this interaction can help reduce unreasonable burdens on the industry before the rules become final.”

New record-keeping requirements could bring opportunities, too, adds Exterran’s Abernathy.

“The ultimate advantage is that NESHAP ZZZZ may compel affected companies to move from paper-based, single-location maintenance documentation to digital documentation that can be accessed, online and securely, by anyone within their organization, from anywhere and at any time,” he says. “So, the silver lining is that the regulation may actually drive innovation and best practices in this area.”

Companies such as Valerus—which fabricates engine compressor packages, among other services—expect to see more rules introduced as studies continue to probe the air quality around oil and gas sites. Valerus is encouraging companies to educate themselves on proposed regulations and actively participate in the process.

As it stands, the majority of the midstream sector will be affected by the requirements, says Stevener. He points to the latest NESHAP ZZZZ amendments, released in January, which require existing four-stroke, non-remote engines greater than 500 horsepower located at sites that are area (minor) sources of hazardous air pollutants, to install catalysts to control emissions.

“For those engines in the same category but less than 500 horsepower, certain maintenance practices will have to be implemented, such as regular oil and filter changes along with inspections of spark plugs, hoses and belts at specified intervals depending on the engine types,” Stevener says. “Now the NESHAP ZZZZ requirements will apply to virtually all engines.”

Preparing for change

Companies should begin complying with the new requirements by ensuring their environmental and operations groups have an accurate inventory of their engines, says Stevener. Once this is complete, teams can begin individually reviewing engines to determine rule applicability. Companies should work with vendors and contractors to ensure they’re also in compliance, he adds.

“After performing an internal audit of all engines used across the company to determine how they are affected by the rule, affected companies may want to implement an internal environmental management system to track the engines and their associated requirements,” says Stevener. “Each company should put a plan in place to ensure that affected engines will be in compliance with the rules by the deadline in October.”

With many SI RICEs in remote status and several in non-remote locations, MarkWest Energy Partners LP is among the midstream companies that will comply with the new ZZZZ regulations. Since the new rules were announced, the company has been working to educate its operational staff, says MarkWest’s environmental manager, Christine Trontell.

Trontell counts her company lucky, since it doesn’t have too many existing engines that will be affected by the ZZZZ implementation. The company’s pipeline staff was tasked with determining which sites were remote or non-remote. The operations staff was informed of the engines that would require controls and which would be under a maintenance program.

“It’s a great undertaking because when the regulation is finalized, the details of the regulation can be very complicated,” Trontell tells Midstream Business. “Taking care of all the details up front and record keeping, are key to a solid compliance program.”

Under the new regulations, Valerus will be working at ensuring the compression packages it contracts and sells meet the new requirements, and that it understands the varying requirements that depend on where an engine is located.

“Our industry has worked very hard—both individually and in various industry work groups—to provide significant input on the new regulations, and the EPA did listen to many of these comments and amended the rules accordingly,” says Stevener. “We think this shows how the regulators and industry can work together successfully for a common cause, and we should continue participation in future regulatory negotiations.”

Some companies began preparing for, and anticipating, NESHAP ZZZZ regulations years ago. Exterran— considered one of the world’s largest contract gas engine-driven compression service providers—is among those proactive companies. It created a suite of compliance services, including an online compliance record management system called PerformX that gives clients easy access to engine performance, maintenance and compliance records.

Abernathy is urging all companies to be aware of the new rules, assess the relevant equipment and work to ensure they’re in compliance. The first step, he says, is becoming informed.

“With that knowledge, affected companies must next assess their operations, maintenance practices and maintenance records, including how they are managed and maintained, where they are and who is responsible for them,” he says.

“Affected companies should also evaluate their document- retention policy to ensure their aligned with NESHAP ZZZZ’s requirements, specifically requiring that relevant documents be maintained for a minimum of five years. Finally, affected companies must act—identifying the key internal people and external partners and service providers who can help ensure compliance. “Affected companies must act quickly and decisively, as the effective date will be here in a matter of months,” he says.

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