EPA outlines new source performance standards

April 18, 2012
The US Environmental Protection Agency outlined a phased approach as it issued long-awaited final rules Apr. 17 to reduce air pollution from oil and natural gas production, including federal air standards for wells that involve hydraulic fracturing.

The US Environmental Protection Agency outlined a phased approach as it issued long-awaited final rules Apr. 18 to reduce air pollution from oil and natural gas production, including federal air standards for wells that involve hydraulic fracturing.

The updated rules are to be fully implemented in 2015.

The Clean Air Act requires EPA to set new source performance standards (NSPS) for industrial categories that contribute to air pollution. EPA is required to review these standards every 8 years.

The existing NSPS were issued in 1985, and EPA’s existing air toxics standards for oil and gas production were issued in 1999.

“The final rules provide flexibility for industry to ensure equipment is available to capture natural gas in time to meet compliance deadlines while maintaining the environmental benefits from the proposal,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation.

The final rules are expected to yield a nearly 95% reduction in volatile organic compound emissions from more than 11,000/year new wells that involved fracing, McCarthy said. The reduction will come through the use of reduced emissions completions (REC), which also are called green completions.

The agency received more than 156,000 comments on the proposal that EPA released on July 28, 2011. In February 2010, the US District Court for the District of Columbia issued a consent decree requiring EPA to take action.

Howard Feldman, American Petroleum Institute director of regulatory and scientific affairs, said EPA amended its final air rules to allow for emission reductions while still allowing for production.

“The industry has led efforts to reduce emissions by developing new technologies that were adopted in the rule,” Feldman said. “This is a large and complicated rulemaking for an industry so critical to the economy, and we need to thoroughly review the final rule to fully understand its impacts.”

The rules, which take effect in 60 days, outline a transition period that ends on Jan. 1, 2015. During the transition period, companies can use both green completions and flaring. After Jan. 1, 2015, companies cannot only use flaring, McCarthy said.

Previously, API had asked that REC requirements be phased in over 2 years where it will apply because there are not enough REC sets available to handle all the wells being completed each year.

Green completions

Green completions allow producers to capture emissions, and profit from the sale of gas that would otherwise be lost.

The value of recovered gas offsets the costs of the green completions mandated by the new rules, McCarthy said. Some states, such as Wyoming and Colorado, require green completions, as do some cities. Some oil and gas companies already voluntarily use green completions.

EPA estimated revenues from selling the gas that currently goes to waste. McCarthy said EPA’s analysis shows a cost savings of $11-19 million in 2015 when the rules are fully implemented.

The VOC emission reductions from wells, combined with reductions from storage tanks and other equipment, are expected to help reduce ground-level ozone in areas of oil and gas production.

The reductions are expected to reduce methane emissions from new and recompleted wells. Oil and gas production and processing accounts for nearly 40% of all US methane emissions, making industry the nation’s single largest methane source, EPA said.

The final rules also would protect against potential cancer risks from emissions of several air toxics, including benzene.

Rep. Ed Markey (D-Mass.) said the new rules ensure that “the natural gas industry won’t be able to escape proper oversight.” Markey is the ranking Democrat on the House Natural Resources Committee.

“American natural gas will be a vital part of our economic and environmental progress, but only if the industry accepts the fact that the public wants assurances that drilling practices are done safely and don’t result in needless releases of pollution into the environment,” Markey said.

He called upon industry to “embrace these standards as a responsible way to continue the expansion of domestic natural gas.”

Contact Paula Dittrick at [email protected].

About the Author

Paula Dittrick | Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.