Flotek issues response to EPA's amendments for flare monitoring regulations

Flotek has provided an update regarding flare monitoring regulations issued by the Environmental Protection Agency (EPA). On December 20, 2024, the EPA issued proposed amendments to its New Source Performance Standards and Emission Guidelines for Existing Sources for the Crude Oil and Natural Gas Source Category (OOOOb). Originally issued on May 8, 2024, the rules oversee monitoring the Net Heating Value (NHV) of flares to ensure that methane emissions are minimized.

While the proposed amendments address many industry concerns regarding the complexity of the testing, they do not materially change Flotek’s outlook regarding the potential addressable market for monitoring services including the scope of installations that will be subject to compliance.

The EPA's proposed amendments make discrete technical changes to the vent gas NHV continuous monitoring requirements for flaring operations expanding some of the exemptions for new testing requirements while limiting the number of flares that were "generally exempted" from compliance testing. The proposed amendments are open for comment for 45 days after publication in the Federal Register. While Flotek believes the regulations should allow the industry to confidently move forward with compliance testing, impacted companies continue to face limited technical, staffing, and analytical resources to conduct these challenging measurements.

As previously announced, on July 12, 2024, the EPA notified Flotek that its JP3 system had been designated as an approved measurement technology for the initial flare regulations. Flotek's optical instrument, designed for the precise measurement of NHV in flare gases, was the first to be approved as an alternative method under the initial regulations.

"After a diligent assessment of the proposed amendments, we continue to believe that the flare monitoring regulations provide a meaningfully positive opportunity for our Data Analytics segment and overall business," said Ryan Ezell, CEO of Flotek. "We are confident in our ability to offer our customers, and the oil and gas industry, a superior and approved technology, utilizing autonomous, real-time measurements, to monitor flares and reduce emissions."