EPA's deadline on drilling-related air pollution standards extended

The US Environmental Protection Agency’s deadline for issuing New Source Performance Standards to reduce air pollution from oil and gas drilling and production is expected to be extended from a court-ordered Apr. 3 deadline to Apr. 17.

EPA said it needed more time to review public comments. On July 28, 2011, EPA proposed the rules, which involve several processes previously not subject to federal regulations, including hydraulic fracturing. The new standards are aimed at reducing emissions of volatile organic compounds (VOC).

The law firm Earthjustice briefed reporters in an Apr. 2 conference call with clean air policy representatives from the Sierra Club, Environmental Defense Fund, Clean Air Task Force, and the Natural Resources Defense Council.

The same groups, along with WildEarth Guardians, wrote a Mar. 30 letter to EPA urging the agency against diluting its proposed rule.

“The need to adopt rigorous performance standards to control harmful pollution from the oil and gas production sector cannot be overstated,” the letter said. “Such standards are necessary to prevent significant public health risks.”

The American Petroleum Institute has said the proposed standards could slow drilling, resulting in less oil and natural gas production, lower royalties to the federal government, and lower tax payments to state governments.

“API and its member companies have been working constructively with EPA to improve the final rule to be both achievable and environmentally beneficial,” said Jack Gerard, API president and chief executive officer. “I want to be clear that we are not opposing the rule but stating that the rule needs to change in key areas to avoid negative impacts to domestic production and job creation.”

Previously, API commissioned a study by Advanced Resources International Inc regarding the proposed standards. API said industry needs an additional 2-3 years to implement the proposed rules, citing a lack of available green completion equipment.

In addition, API asked EPA to avoid a "one-size-fits-all" approach for emissions completions, to allow more time to implement the requirements, and to streamline compliance and recordkeeping requirements (OGJ, Mar. 26, 2012, p. 21).

Under the proposed standards, VOC emissions would be minimized through the use of reduced emissions completions (REC), which simultaneously reduce both VOC and methane emissions.

The proposed rule imposes REC requirements on most unconventional gas wells, and it requests comment on concerns that limited availability of REC equipment could adversely impact drilling and US gas supplies. The proposed rule lists REC equipment as sand traps, surge vessels, separators, and tanks.

EPA estimates a maximum 4,000/year wells use REC out of the 25,000/year of new and existing gas wells involving fracing and recompletions.

NRDC disputes API

David Doniger of the NRDC, said on Apr. 2 that API and other industry groups have presented “bogus figures on cost.” Estimates on REC costs vary widely. EPA estimates REC costs $30,000/well while API estimated REC cost at $180,000/well. API’s estimate came in Nov. 30, 2011, written comments to the EPA.

A recent NRDC report said oil and gas companies could reduce methane emissions by 80%, an amount worth an estimated $2 billion/year at the average 2011 Henry Hub natural gas price by implementing affordable, available technologies to fix leaks and other waste throughout the production cycle.

NRDC said cost-effective actions could cut total US methane emissions by one third, equivalent to the global warming pollution from more than 50 coal-fired power plants.

NRDC’s report, entitled “Leaking Profits,” discussed 10 technologies that reduce methane emissions from production, processing, and transportation. Harvey Consulting LLC, an independent oil and gas industry, environmental, and regulatory compliance consulting firm prepared the report for NRDC.

Contact Paula Dittrick at paulad@ogjonline.com.

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