Future-Proofing Your Inspections for Regulations like SCAQMD 1178, 1173, and 463

Blog     · 8 MIN READ

Posted on October 10

Back to blog

Future-Proofing Your Inspections for Regulations like SCAQMD 1178, 1173, and 463

As regulations governing leaks and emissions become increasingly stringent globally and regionally, oil and gas asset owners are under more pressure than ever to ensure their operations are in compliance. Regulatory agencies are cracking down on violations, and the associated fines are skyrocketing. Mewbourne Oil paid $5.5 million in penalties in the Permian Basin in August 2023, Ameredev was hit with $40 million in fines for air quality violations in New Mexico in 2024, and penalties hit record-breaking heights when Marathon Oil faced $241 million in fines for air pollution violations in North Dakota in July 2024. Global regulations like this are inspiring local regulations in the US to strengthen their compliance standards, and the South Coast Air Quality Management District (SCAQMD) is leading the charge. States like Colorado, New Mexico, and more will assuredly follow suit as the regulatory wave continues.

This year, SCAQMD has escalated its efforts to reduce air quality violations, with significant amendments to three key regulations: Rule 1178, Rule 1173, and Rule 463. Traditional methods for maintenance, reporting, and asset tracking are no longer acceptable in this new regulatory environment, and other regulatory agencies are soon to follow suit. Whether under the jurisdiction of SCAQMD or not, organizations must completely overhaul their compliance strategies and processes to meet these new and rapidly evolving standards.

The first step to navigating upcoming regulatory changes is understanding what these rules entail and how best to prepare. Below, we break down the key updates from SCAQMD and what they mean for operations like yours.

Looking Ahead: SCAQMD Rules 1178, 1173, and 463

SCAQMD Rule 1178

SCAQMD’s Proposed Amended Rule (PAR) 1178 took effect in 2024 and focuses on reducing emissions from storage tanks at petroleum facilities that emit more than 20 tons per year of VOCs (volatile organic compounds).

The most pressing amendments include:

  • Weekly scanning of regulated tanks and semi-annual comprehensive inspections.
  • 24-hour reporting of emissions and 72-hour resolution of detected issues.
  • Record-keeping for at least 5 years, including media from any applicable devices.

This means oil and gas producers will need to increase the frequency and thoroughness of their inspections to ensure tanks are in compliance, and they must maintain detailed records of their previous inspections and repairs. As other agencies head down a similar path, asset owners regardless of jurisdiction should be hypervigilant with their inspections and record-keeping operations.

SCAQMD Rule 1173

Rule 1173 amendments are set to impact VOC leak detection from petroleum facilities and chemical plants. Proposed in early 2024 and put to a hearing early this month, the rule requires  the use of advanced detection technologies like Optical Gas Imaging (OGI) to complete more thorough inspections. 

The most pressing updates to this ruling in particular would include:

  • Monthly OGI inspections to detect and repair VOC leaks.
  • Lower VOC concentration thresholds, making smaller leaks more impactful and harder to ignore.
  • 14-day repair windows for detected leaks.

The increased frequency of inspections and shortened repair windows mean it will be critical for asset owners to invest in OGI cameras and systems that can accommodate large video files and quick repair notifications. This is one of the first regulations to require, rather than encourage, OGI technologies for inspections of this magnitude. Undoubtedly, as more sites adopt and benefit from the insights of this technology, other regulatory bodies will follow suit in this requirement. 

SCAQMD Rule 463

The amendments to Rule 463, initiated in December 2023 and updated in May 2024, apply to aboveground storage tanks (ASTs) that store organic liquids.

To stay compliant, organizations must enact:

  • Bi-weekly optical gas inspections of ASTs with capacities over 75,000 liters.
  • Dome installation on external floating roofs with a vapor pressure of 3.0 psia or greater.
  • Stricter seal gap allowances to prevent emissions.

Rule 463 will make it a costly challenge for organizations to stay compliant, as the number of inspections and monitoring activities conducted increase. Even if organizations are not operating in these areas, there is no doubt that other jurisdictions are watching closely and writing their own versions of regulations like this. Investing in more efficient asset management strategies will help organizations across the board to remain compliant as regulations like these come into effect.

The Challenge: What These Changes Mean for You

These new regulations will significantly transform how oil and gas companies conduct inspections, manage maintenance activities, and report on emissions. Non-compliance isn’t an option when fines reach record-breaking heights, so organizations will need to overcome a number of challenges before they can confidently say they’re ready for the change. 

Conducting more frequent inspections using advanced technology means dealing with more complex data. The influx of inspection data and the large size of the associated file types will quickly expose any inefficiencies in current data strategies. Systems of record that cannot accommodate large and varied quantities of data will become obsolete. 

With larger and more complex data sets, the traditionally long data entry and reporting processes will no longer make the cut. Organizations will need to reassess their processes and  find solutions that automate their work planning and reporting to ensure they stay compliant with the shortened remediation and reporting periods. 

Structured and detailed data retention will also be important to both managing the data and ensuring records provide a clear history of asset health and management overtime. 

Finally, with an increase in inspections comes a greater strain on resources. Operational efficiency will need to be top of mind; organizations may need to engage additional third party vendors and creatively leverage cutting-edge technology like digital twins, AI, or robotic solutions, like the Ghost Robotics Vision 60, to lighten the load. 

These adjustments can seem a bit overwhelming to asset owners just getting started, and every organization will face unique challenges when working to address their individual gaps. Luckily, there are solutions that can help your organization become and remain compliant — fast. 

The Solution: How to Stay Compliant

Compliance with new regulations will require an operational audit for many organizations, starting with investing in new technology, upgrading data management systems, and optimizing inspection processes to scale up accordingly.  

A centralized data system that can accommodate and store massive amounts of OGI and visual inspection data long term, stream video footage, and organize it in an asset-centric manner will make the influx of data much simpler to manage. 

Efficiency when managing such complex data sets will be critical. Rather than spending long hours manually entering data from the field into spreadsheets and creating reports, organizations that adopt systems that can automatically ingest, store, and generate reports with embedded imagery and footage via one single system can cut their inspection and reporting time in half – and potentially reduce the spend on software tools that don’t communicate seamlessly with each other. 

Teams will also save time and heartache by standardizing the data collection methods so that all vendors, robotics, or in-house technicians are collecting clean and consistent data every time. Clean data removes the guesswork from interpreting results across maintenance teams and leads to better reporting in the long term for optimized compliance. 

Finally, an organization looking to improve their processes for compliance will need a solution that can accommodate new tools like digital twins, AI/ML, and robotic data collection to optimize resources onsite. Systems like HUVR can overlay field data on digital twins to reduce time in the field, use AI/ML tools to spot anomalies quicker than manually reviewing footage, and integrate with the latest technology to make routine remote inspections a painless endeavor. 

SCAQMD’s amended rules 1178, 1173, and 463 may seem daunting as they – and potential new regulations modeling them – quickly barrel towards the industry requiring significant operational changes for many oil and gas producers. However, by investing in the right tools and processes early, your teams can future-proof their operations for optimized compliance and avoid hefty fines in the process no matter where your operations sit. 

Ready to explore your options and future-proof your processes and systems for compliance? Reach out to a HUVR expert to see if the HUVR compliance system is right for your team. 

Share this article

Back to blog