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Permian Basin Ozone Status Up In The Air

The EPA is reportedly taking another look at redesignating the Permian Basin in both Texas and New Mexico as an ozone nonattainment area. The first impact of an ozone redesignation would be to restrict air permits for constructing or modifying stationary sources of air emissions, including oil and gas facilities, by lowering the “major source” emissions rate threshold. The lower threshold will apply immediately on the effective date of redesignation. The states will have to adopt State  Implementation Plans (SIPs) with additional ozone strategies after three years if the region does not attain the federal ozone standard of 70 parts per billion (ppb). Those strategies will almost certainly include additional oil and gas regulations.

Background. In 2017, EPA designated southeast New Mexico and west Texas as attainment/unclassifiable areas under the 2015 National Ambient Air Quality Standard (NAAQS). In March 2021, an environmental group petitioned EPA to redesignate the area after exceedances were recorded in New Mexico. The EPA placed a redesignation on its regulatory agenda in 2022, but the issue stalled when EPA changed the agenda entry from “active” to “pending.” The most recent 3-year average ozone levels (used for regulatory purposes) recorded in southeast New Mexico exceed 70 ppb. There are indications the EPA might now move forward with a redesignation. EPA Region 6 Administrator Earthea Nance discussed it with local leaders during a May 2024 site tour near Midland, Texas.

Redesignation Process. Discretionary redesignations are governed by Clean Air Act section 107(d)(3). If EPA moves forward, it will commence by sending notification letters to the governor of each state. The states have 120 days to respond, then EPA has an additional 120 days to act. The redesignation would take effect after publication in the Federal Register, which adds approximately 60 days. See our July 2022 blog for additional information.

Legal Issues. A proposal to redesignate the Permian will raise several legal issues, which may include the geographic boundaries of a potential nonattainment area, the lack of ozone monitors in west Texas, and whether EPA should exclude the effect of wildfires or international emissions.

Next Steps. Oil and gas operators should watch for any notification letters from EPA to the New Mexico and Texas governors and be prepared to submit comments regarding the potential redesignation.

Please contact Chris Colclasure at [email protected] for more information.