Q749. What are the notification requirements when an Onshore Petroleum and Natural Gas Production facility or an Onshore Petroleum and Natural Gas Gathering and Boosting Facility, reporting under Subpart W, sells equipment in a basin?

A749: 

For transactions that occur prior to January 1, 2025:

In general, an Onshore Petroleum and Natural Gas Production facility that reports under subpart W and sold some or all of its wells and associated equipment in a basin or an Onshore Petroleum and Natural Gas Gathering and Boosting facility that reports under subpart W and sold some or all of its pipelines and associated equipment in a basin is not required to notify EPA of the transaction. Below is information for six specific hypothetical scenarios that may apply to transactions that occur prior to January 1, 2025.

Scenario 1. The Purchaser buys all of the Seller’s equipment in a basin where the Purchaser already operates (and the Purchaser has an e-GGRT ID).  

There is no requirement that the Seller report the sale to EPA. While not required to do so, the selling facility may choose to optionally notify EPA through e-GGRT that the facility is discontinuing reporting because it has merged with another facility.  This will permit the Seller to avoid receiving notices from EPA regarding missing reports for reporting years following the transaction. For more information, refer to the online help page at http://www.ccdsupport.com/confluence/display/help/About+e-GGRT+Data+Reporting+Tab, specifically the section titled "Notification to Discontinue Reporting for the Next Reporting Year."

The Purchaser must add the newly acquired equipment to their Onshore Petroleum and Natural Gas Production facility or Onshore Petroleum and Natural Gas Gathering and Boosting facility, as applicable, for purposes of GHG reporting under Subpart W and shall be responsible for all Part 98 requirements for the acquired equipment for the entire reporting year.

Note: If the Purchaser buys all of the Seller’s equipment in a basin where the Purchaser already operates and the Purchaser does not have an e-GGRT ID, then FAQ 811 applies.

Scenario 2. The Seller sells some, but not all, of its equipment in a basin and its aggregate annual emissions from the facility after the transaction (i.e., the equipment at the facility that the Seller did not sell) will still exceed the 25,000 metric tons per year CO2 equivalent reporting threshold.

Seller remains required to comply with all the Rule’s requirements for the portion of the facility that was not sold.  There is no requirement that either entity report this transaction to EPA.

The Purchaser would now be considered the owner or operator of the acquired equipment, assuming the Purchaser now meets the definition of “owner or operator” for the applicable industry segment in 40 CFR 98.238.  The Purchaser’s potential monitoring, calculations, reporting, and notification requirements depend on facility-specific considerations.  To ascertain its Part 98 responsibilities, EPA encourages the Purchaser to conduct an applicability determination for its Onshore Petroleum and Natural Gas Production facility or Onshore Petroleum and Natural Gas Gathering and Boosting facility, as applicable, taking into account the emissions from the equipment that meets the applicability definition of “facility” in 40 CFR 98.238, including acquired equipment as well as any emission sources the Purchaser already owned in the same industry segment and basin, for the entire reporting year. 

Scenario 3.  The Seller sells some, but not all, of its equipment in a basin and its aggregate annual emissions from the facility after the transaction (i.e., the equipment at the facility that the Seller did not sell) will be between 15,000-25,000 metric tons per year CO2 equivalent.

Seller remains required to comply with all the Rule’s requirements for the portion of the facility that was not sold, unless and until all the criteria at 40 CFR 98.2(i)(1) are met that would enable the Seller to cease reporting.  There is no requirement that either entity report this transaction to EPA.

The Purchaser would now be considered the owner or operator of the acquired equipment, assuming the Purchaser now meets the definition of “owner or operator” for the applicable industry segment in 40 CFR 98.238.  The Purchaser’s potential monitoring, calculations, reporting, and notification requirements depend on facility-specific considerations.  To ascertain its Part 98 responsibilities, EPA encourages the Purchaser to conduct an applicability determination for its Onshore Petroleum and Natural Gas Production facility or Onshore Petroleum and Natural Gas Gathering and Boosting facility, as applicable, taking into account the emissions from the equipment that meets the applicability definition of “facility” in 40 CFR 98.238, including acquired equipment as well as any emission sources the Purchaser already owned in the same industry segment and basin, for the entire reporting year.

Scenario 4. The Seller sells some, but not all, of its equipment in a basin and the Seller’s aggregate annual emissions from the facility after the transaction (i.e., the equipment at the facility that the Seller did not sell) will be below 15,000 metric tons per year CO2 equivalent.

Seller remains required to comply with all the Rule’s requirements for the portion of the facility that was not sold, unless and until all the criteria at 40 CFR 98.2(i)(2) are met that would enable the Seller to cease reporting. There is no requirement that either entity report this transaction to EPA.

The Purchaser would now be considered the owner or operator of the acquired equipment, assuming the Purchaser now meets the definition of “owner or operator” for the applicable industry segment in 40 CFR 98.238. The Purchaser’s potential monitoring, calculations, reporting, and notification requirements depend on facility-specific considerations. To ascertain its Part 98 responsibilities, EPA encourages the Purchaser to conduct an applicability determination for its Onshore Petroleum and Natural Gas Production facility or Onshore Petroleum and Natural Gas Gathering and Boosting facility, as applicable, taking into account the emissions from the equipment that meets the applicability definition of “facility” in 40 CFR 98.238, including acquired equipment as well as any emission sources the Purchaser already owned in the same industry segment and basin, for the entire reporting year.

Scenario 5. The Seller sells all of its equipment in a basin, with some equipment sold to Purchaser 1 and other equipment sold to Purchaser 2.  Neither Purchaser 1 nor Purchaser 2 owned or operated a facility reporting under the GHGRP in the basin prior to the transaction (i.e. neither has an existing reporting ID).

There is no requirement that the Seller report the sale to EPA or report to EPA that it is ceasing operations.  While not required to do so, the selling facility may choose to optionally notify EPA through the GHGRP Help Desk requesting the facility be marked as “not reporting” and explaining that all of the equipment in the basin have been transferred to Purchaser 1 and Purchaser 2.  This will permit the seller to avoid receiving notices from EPA regarding missing reports for reporting years following the transaction.

Purchaser 1 and Purchaser 2 would now be considered the owners or operators of the acquired equipment, assuming they now meet the definition of “owner or operator” for the applicable industry segment in 40 CFR 98.238.  Purchaser 1’s and Purchaser 2’s potential monitoring, calculations, reporting, and notification requirements depend on facility-specific considerations.  To ascertain their Part 98 responsibilities, EPA encourages Purchaser 1 and Purchaser 2 to conduct an applicability determination for its Onshore Petroleum and Natural Gas Production facility or Onshore Petroleum and Natural Gas Gathering and Boosting facility, as applicable, taking into account the emissions from the equipment that meets the applicability definition of “facility” in 40 CFR 98.238, including acquired equipment as well as any emission sources each Purchaser already owned in the same industry segment and basin, for the entire reporting year.

Scenario 6. The Seller sells all of its equipment in a basin, with some equipment sold to Purchaser 1 and other equipment sold to Purchaser 2.  Both Purchaser 1 and Purchaser 2 already owned or operated a facility reporting under the GHGRP in the basin prior to the transaction (and already have e-GGRT IDs).

There is no requirement that the Seller report the sale to EPA or report to EPA that it is ceasing operations. While not required to do so, the selling facility may choose to optionally notify EPA through the GHGRP Help Desk requesting the facility be marked as “not reporting” and explaining that all of the equipment in the basin have been transferred to Purchaser 1 and Purchaser 2.  This will permit the seller to avoid receiving notices from EPA regarding missing reports for reporting years following the transaction.

Purchaser 1 and Purchaser 2 would add the respective newly acquired equipment to their facilities for purposes of GHG reporting and shall be responsible for all Part 98 requirements for these equipment for the entire reporting year.

Note: If one Purchaser has an e-GGRT ID for a facility in the same industry segment and basin as the acquired equipment and the other Purchaser does not already have an applicable e-GGRT ID, then the Purchaser with the e-GGRT ID should follow the guidance in Scenario 6 while the Purchaser who does not should follow the guidance in Scenario 5.

Beginning with transactions that occur on or after January 1, 2025:

Owners and operators for industry segments with a unique definition of facility as defined in 40 CFR 98.238, including the Onshore Petroleum and Natural Gas Production and Onshore Petroleum and Natural Gas Gathering and Boosting industry segments, must follow the provisions in 40 CFR 98.4(n).

Below is information on the requirements of 40 CFR 98.4(n) as well as information for hypothetical scenarios that may apply to transactions that occur on or after January 1, 2025.

40 CFR 98.4(n)(1):

Scenario: The Purchaser buys all of the Seller’s equipment in a basin where the Purchaser does not report for a facility in that basin and industry segment (i.e., does not already have an e-GGRT ID).

If the Purchaser buys all of the Seller’s equipment in a basin where the Purchaser does not already report under the GHGRP for a facility in the same industry segment and basin and does not have an e-GGRT ID, then per 40 CFR 98.4(n)(1), the Certificate of Representation (COR) needs to be updated within 90 days of the change of ownership in order to reflect the new ownership (see  FAQ 811 for additional details). The new owner or operator and the new designated representative shall be responsible for submitting the annual report for the facility for the entire reporting year beginning with the reporting year in which the acquisition occurred.

40 CFR 98.4(n)(2)

Scenario 1. The Purchaser buys all of the Seller’s equipment in a basin where the Purchaser already operates (and the Purchaser has an e-GGRT ID).  

The Purchaser and Seller should follow the provisions of 40 CFR 98.4(n)(2). Specifically, the Purchaser must add the newly acquired equipment to their Onshore Petroleum and Natural Gas Production facility or Onshore Petroleum and Natural Gas Gathering and Boosting facility, as applicable, for purposes of GHG reporting under Subpart W and is responsible for all Part 98 requirements for the acquired equipment for the entire reporting year.

In addition, the owner or operator must notify EPA through e-GGRT that the facility is discontinuing reporting because it has merged with another facility (per 40 CFR 98.2(i)(6)). This will permit the Seller to avoid receiving notices from EPA regarding missing reports for reporting years following the transaction. For more information, refer to the online help page at http://www.ccdsupport.com/confluence/display/help/About+e-GGRT+Data+Reporting+Tab, specifically the section titled "Notification to Discontinue Reporting for the Next Reporting Year."

40 CFR 98.4(n)(3)

Scenario 2. The Seller sells some, but not all, of its equipment in a basin and its aggregate annual emissions from the facility after the transaction will still exceed the 25,000 metric tons per year CO2 equivalent reporting threshold.

Scenario 3.  The Seller sells some, but not all, of its equipment in a basin and its aggregate annual emissions from the facility after the transaction will be between 15,000-25,000 metric tons per year CO2 equivalent.

Scenario 4. The Seller sells some, but not all, of its equipment in a basin and the Seller’s aggregate annual emissions from the facility after the transaction will be below 15,000 metric tons per year CO2 equivalent.

Under Scenarios 2, 3, or 4, the Seller remains required to comply with all the Rule’s requirements for the portion of the facility that was not sold, unless and until all the criteria at 40 CFR 98.2(i)(1) or (2) are met that would enable the Seller to cease reporting.  There is no requirement that either entity report this transaction to EPA.

Under Scenarios 2, 3, or 4, the Purchaser would now be considered the owner or operator of the acquired equipment, assuming the Purchaser now meets the definition of “owner or operator” for the applicable industry segment in 40 CFR 98.238.

If the Purchaser already has a reporting facility in the same industry segment and the same basin and has an e-GGRT ID, then the Purchaser must add the acquired equipment to their existing facility for purposes of reporting under Subpart W. The Purchaser is responsible for submitting the annual report for their entire facility, including the acquired equipment, for the entire reporting year beginning with the reporting year in which the acquisition occurred.

If the Purchaser does not already have a reporting facility in the same industry segment and the same basin and therefore does not already have an e-GGRT ID, the Purchaser must register a new facility in e-GGRT. The new facility must include the acquired equipment as well as any emission sources the Purchaser already owned in the same industry segment and basin. The Purchaser is responsible for submitting the annual report for the new facility for the entire reporting year beginning with the reporting year in which the acquisition occurred. The Purchaser must continue to report under Subpart W for the new facility unless and until that facility meets one of the criteria in 40 CFR 98.2(i).

40 CFR 98.4(n)(4)

Scenario 5. The Seller sells all of its equipment in a basin, with some equipment sold to Purchaser 1 and other equipment sold to Purchaser 2.  Neither Purchaser 1 nor Purchaser 2 owned or operated a facility reporting under the GHGRP in the basin prior to the transaction (i.e. neither has an existing reporting ID).

Scenario 6. The Seller sells all of its equipment in a basin, with some equipment sold to Purchaser 1 and other equipment sold to Purchaser 2.  Both Purchaser 1 and Purchaser 2 already owned or operated a facility reporting under the GHGRP in the basin prior to the transaction (and already have e-GGRT IDs).

If the Seller sells all of their equipment and does not retain any of the emission sources, then the Seller must notify EPA within 90 days of the last transaction that all of the facility’s emission sources were acquired by multiple purchasers, including the identity of the purchasers.

Each Purchaser accounts for the acquired equipment as follows:

If the Purchaser already has a reporting facility in the same industry segment and the same basin and has an e-GGRT ID, then the Purchaser must add the acquired equipment to their existing facility for purposes of reporting under Subpart W. The Purchaser is responsible for submitting the annual report for their entire facility, including the acquired equipment, for the entire reporting year beginning with the reporting year in which the acquisition occurred.

If the Purchaser does not already have a reporting facility in the same industry segment and the same basin and therefore does not already have an e-GGRT ID, the Purchaser must register a new facility in e-GGRT. The new facility must include the acquired equipment as well as any emission sources the Purchaser already owned in the same industry segment and basin. The Purchaser is responsible for submitting the annual report for the new facility for the entire reporting year beginning with the reporting year in which the acquisition occurred. The Purchaser must continue to report under Subpart W for the new facility unless and until that facility meets one of the criteria in 40 CFR 98.2(i).