With a mid-2022 deadline looming for submitting MSAPR compliance reports, there are plenty of questions regarding the associated costs for engine owners and operators. In order to ensure compliance, however, many upgrades across the oil and gas industry are needed.
As it stands, estimates for the cost of MSAPR regulations are currently at $479.3 million, though engine owners and operators may also be keenly aware of a second number: the cost to them, which is estimated to be $385.4 million.
These are big numbers when it comes to the bottom line but it’s important to understand the various categories within the overall cost estimates. By breaking down these costs, owners and operators can accurately plan and forecast, thereby avoiding any unpleasant surprises.
What Are the Most Expensive Categories for MSAPR Compliance?
The following categories represent the highest expenses related to MSAPR compliance.
Performance Tests and Emission Checks
Initial performance tests for pre-existing engines in your subset/subgroup should have been conducted prior to December 31, 2021. Each test can cost upwards of $3,000, along with HSE concerns associated with each testing site visit. In addition to these costs, subsequent testing may be required:
- Regular-use engines and those over 375kW require subsequent testing
- Depending on the burn type, subsequent testing requirements can range from every six months to every three years
- Additional emissions checks may be required up to three times annually, increasing in frequency if an engine does not pass the requirements
Test and Check Failures
Testing failures can lead to large, unexpected costs. In addition to the $3,000 cost of re-testing, achieving compliance for any second-attempt Performance Tests and Emission Checks often requires engine modifications. Given that re-testing must be completed within 90 days, these modifications must be made quickly.
Upgrades & Swap-Outs
Many owners and operators have already begun necessary equipment upgrades in order to meet MSAPR limits leading up to the 2026 deadline. These upgrades may be costly and include retrofits.
Supply Chain Issues
Due to current global supply chain issues, Test and Check Failures may lead to higher than usual costs. For operators in 2022, it is important to consider how your supply chain has been affected; engine parts may be backordered, unavailable, or more expensive than years prior due to global shortages, making any compliance-related modifications more costly and complicated.
How to Mitigate the Risk of MSAPR Compliance Costs
Understandably, engine owners and operators are interested in mitigating the risk of compliance costs wherever possible. There are several factors that may contribute to lower costs, which include:
- Optimizing a testing strategy to take full advantage of the grace period between now and the regulation deadline of 2026.
- Leveraging NOx Manager’s modelling tool designed to effectively model various engine grouping and test selection scenarios. Modelling can also help determine the various impacts associated with acquisitions & divestitures on MSAPR compliance costs.
- Streamlining administration related to performance testing through using NOx Manager to ensure test dates aren’t missed.
- Ensuring data accessibility for auditors making site visits. This may include up to five years’ worth of compliance records.
There are certainly many factors to consider when it comes to the costs associated with MSAPR compliance. Through breaking down these costs, engine owners and operators can work to reduce costs through strategic planning and the use of NOX Manager’s valuable modelling and data management tools.