Updated with comments from West Virginia Oil and Natural Gas Association, Independent Petroleum Association of America
Air pollution from hydraulically fractured gas wells will be more strictly controlled under regulations issued April 17 by the Environmental Protection Agency.
The EPA's New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants will improve air quality and reduce health risks.
"The action taken today is expected to yield nearly a 95 percent reduction in smog-forming volatile organic compounds emitted from more than 13,000 hydraulically fractured gas wells each year," said EPA Office of Air and Radiation Assistant Administrator Gina McCarthy.
It also will protect health by reducing smog and by reducing emissions of hazardous air pollutants such as benzene, which can cause cancer.
Under the rule, operations are required to use "reduced emissions" or "green well completion" equipment to capture gas and condensate that comes up with hydraulic fracturing flowback, preventing their release into the air and making the valuable hydrocarbons available to the producer for sale.
During a transition period that ends Jan. 1, 2015, they will have the option to flare instead.
The transition period is a change from the rule the agency proposed last July and acknowledges the industry's concern that there is not yet enough equipment for 13,000 completions per year and that training workers in the use of the equipment will take time.
Even flaring reduces volatile organic compound, or VOC, emissions by 95 percent, McCarthy said, and that benefit will begin when the rule takes effect in 60 days.
But green completions are preferred for multiple reasons.
They provide the same reduction in VOCs as flaring. But while flaring allows the emission of smog-forming nitrogen oxides, green completions do not, she said.
And by capturing a valuable resource rather than wasting it, green completions make that resource available to the company. The technology pays for itself in about 60 days, she said; industry-wide, the agency expects savings of $11 to $19 million when the rule is effective in full in 2015 and every year thereafter.
Green completions are already used on about 50 percent of wells, she said.
The oil and gas industry is responsible for about 40 percent of U.S. emissions of methane, a powerful greenhouse gas. Although the targets of the rule are VOCs and hazardous air pollutants, methane is captured through this technology as well, and McCarthy said the agency does not see a need to take further action on industry methane emissions.
The agency received more than 150,000 comments on the proposed rule and held three public hearings.
The West Virginia Oil and Natural Gas Association was reviewing the rule when contacted by The State Journal, but expressed some satisfaction with the phased approach.
"Although we do not support unnecessary regulations that would slow the development of oil and natural gas in West Virginia, we are pleased that the final EPA air regulations allow a transition period for industry to meet the requirements, a proposition strongly backed by WVONGA," said WVONGA Executive Director Corky DeMarco.
The Independent Petroleum Association of America agreed with EPA's intentions and noted that many producers already control emissions. But IPAA believes the EPA has overestimated the industry's current emissions. The organization underlined the impact the rule could have on smaller independent producers.
"While the new standards provide industry with a phased-in approach for new control requirements, their effect on our nation's independent oil and natural gas producers – companies that drill 95 percent of wells with an average of 12 employees – as well as our economy and our national security has the potential to be profound," said IPAA President and CEO Barry Russell in a prepared release.
Environmental organizations tracking development of the rules expressed concern in recent weeks that the proposal would be weakened as industry met with the Office of Management and Budget during its review of the rule.
With the release, organizations reacted mostly positively yet pressed for further regulation.
"(These rules) are a solid start, but we need to keep working to reduce pollution from the gas industry all the way from the well to the customer," said David McCabe, senior scientist with Clean Air Task Force. "People who live near compressors and equipment already in use need to see their air cleaned up as well. Unfortunately these rules won't do that."
The EPA rules come as the result of a lawsuit filed against the agency in 2009 by WildEarth Guardians and San Juan Citizens Alliance, represented by Earthjustice. The suit alleged that the agency had failed to review the New Source Performance Standards and Air Toxic Standards for the oil and natural gas industry as mandated by the Clean Air Act.
A February 2010 consent decree established a schedule on which the agency would have to release proposed and final rules; April 17 was the third extension of the final-rules deadline.
The final rule, an overview and other resources may be found on the EPA's oil and natural gas air pollution standards web page.
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