On March 29, 2019, the EPA announced its final Oil & Natural Gas Exploration and Production Facilities New Owner Audit Program Agreement (Oil & Gas New Owner Audit Policy, or Policy). This new program is completely voluntary and provides total civil penalty mitigation for qualified new owners of upstream oil and natural gas well sites as long as they agree to identify and correct all Clean Air Act noncompliance at their new facility. This policy marks the first time the EPA has proposed complete penalty forgiveness, including mitigation of economic benefit penalties, for entities that disclose and correct violations in conformance with the guidelines. This is also a deviation from the Obama-era EPA’s reduced emphasis on auditing and self-disclosure.
The Oil and Gas New Owner Audit Policy will initially focus on excess air emissions from vapor intrusions. To qualify as a new owner under this program, you need to notify the EPA within 9 months of your acquisition. However, the benefits of the program can be retroactive for those who have purchased a site while the policy was being finalized. This is only for facilities purchased a year prior. The policy states new owners must complete the following:
- Perform an audit that is comprehensive of the Clean Air Act – If there are any corrective actions, they must be made within 60 days of notification of non-compliance.
- Complete an engineering and design assessment to ensure vapor control systems are
adequately designed and sized to handle maximum and minimum system pressures and are
operated to prevent excess emissions – Any corrective actions as a result of the assessment must be taken in 180 days,
especially if incorrect size is found. - Within 60 days of the finalization of an agreement between a new owner and the EPA, the new owner must submit proposed audit protocols and checklists, and a plan for its engineering and design assessment.