EPA Emissions Rule Shows Improvements

It will take some time to fully digest the EPA’s new rule governing emissions from oil and natural gas production, including hydraulic fracturing, but it’s clear the agency heard industry’s concerns and worked to improve the regulation from its preliminary version.

Significantly, companies will have until 2015 to comply with some of the requirements of the new rule. Industry had maintained more time was needed to develop the equipment needed for compliance and to train workers to use it. Howard Feldman, API’s director of regulatory and scientific affairs on the final rule:

“The industry has led efforts to reduce emissions by developing new technologies that were adopted in the rule.  EPA has made some improvements in the rules that allow our companies to continue reducing emissions while producing the oil and natural gas our country needs. 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.”

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EPA Should Improve Emissions Rule Before Finalizing

Here’s something to keep in mind as we discuss the Environmental Protection Agency’s proposed rule on emissions from oil and natural gas development: A Rasmussen Reports poll this week showed 44 percent of likely voters believe, generally, that EPA’s regulations and actions hurt the economy. Just 17 percent disagree and say EPA’s policies help the economy.

EPA has a new policy on the way, the proposed New Source Performance Standards. As presently crafted, the standard would require hydraulic fracturing operators to use “green completion” equipment to control emissions of volatile organic compounds or VOCs.

But in a conference call with reporters, Howard Feldman, API director of regulatory and scientific affairs, said the proposed rule could needlessly impose significant costs – more than $780 million over four years – and troublesome delays on energy producers:

“First, the proposed rule would require more emissions equipment for sources that emit little to no regulated pollutants and should not be subject to these requirements. … Second, EPA recognized that there will be a significant increase in reduced emission completions but failed to analyze whether or not there is enough of the specific emissions reduction equipment available.”

Joined by Sara Banaszak of America’s Natural Gas Alliance, Feldman said industry has urged EPA to apply the new rule only to sources with significant VOCs emissions – and not to those whose vent streams contain less than 10 percent VOCs. Industry also believes more time is needed to develop and deploy the equipment needed to reduce emissions, as well as to train workers to use it. Feldman:

“The fact is that the industry is already leading efforts to reduce emissions. Our companies, after all, are in the business of selling methane, which is natural gas, so they don’t want it to escape into the atmosphere. The technology and equipment being used to reduce emissions were created by the industry itself – not by the EPA or by our critics in the environmental movement – and companies are already implementing it in many locations. … The (EPA) proposal took too much of a one-size-fits-all approach to regulating an industry that varies greatly in the type, size and complexity of operations.”

Critics say oil and natural gas companies are trying to avoid compliance with emissions-reducing efforts, which Feldman rejected:

“I want to be clear that we do not oppose these rules. … The whole concept of the VOCs threshold, let me emphasize, is to make sure that the rule is cost-effective for the regulated pollutant. It would be unprecedented to try to fit a standard that would have an extremely high [cost] approaching infinity. … You don’t force controls where there are no significant emissions. … Where there’s no emissions, to require control equipment doesn’t make any sense.”

Although environmentalists say the proposal as written would pay for itself or even produce revenue for industry, Feldman and Banaszak said EPA cost-effectiveness estimates are based on flawed data. Drillers say compliance costs and delays would be significantly greater. Feldman said if the choice is between the estimates of “lawyers in Washington” and operators, he would go with people doing the work on the ground.

EPA’s proposed rule is scheduled to be finalized next week. Earlier Thursday, API President and CEO Jack Gerard sent a letter to EPA Administrator Lisa Jackson, outlining industry’s concerns. Will EPA listen? Rasmussen’s results certainly suggest it should.

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EPA Needs to Fix Air Emissions Proposal

Howard Feldman, API director of scientific and regulatory affairs, spoke with reporters today about proposed rules for oil and natural gas air emissions.  This is what he had to say.

EPA's proposed rules for the oil and natural gas sector, which address sources of air emissions including those associated with hydraulic fracturing, are due to be finalized in the first week of April. The rules are important because they would over time affect hundreds of thousands of natural gas development operations.

A new study conducted by Advanced Resources International, which we are releasing today projects the rules as proposed would significantly slowdown drilling, resulting in less oil and natural gas production, lower royalties to the federal government, and lower tax payments to state governments.

Unless EPA makes changes to the proposal, the study found that between the time these rules are implemented and 2015:

Overall drilling for natural gas using hydraulic fracturing would be reduced by up to 52%, reducing drilling by as much as 21,400 wells;Natural gas production from hydraulically fractured wells would decline by up to 11% compared to what would otherwise have been developed;Oil production from hydraulically fractured wells would decline by up to 37% compared to what would have otherwise been developed;The federal government would not collect up to 8.5 billion dollars in royalties due to reduced drilling and production;State governments would not collect up to 2.3 billion dollars in severance taxes due to reduced drilling and production.

This analysis does not even attempt to estimate the lost jobs and decline in other economic benefits that would result from reduced drilling and reduced oil and gas supply services.

As we suggested in our comments on the proposal, EPA must make changes to this rule and allow for reduced emissions while not impeding the massive job creation and economic revitalization that we’ve seen in states like North Dakota and Pennsylvania due to the shale boom.

First, reduced emission completions requirements should be less prescriptive and limited to circumstances that are cost-effective and technically feasible. A one-size-fits-all approach will not work.

EPA should also allow more time to implement the requirements once they are final. The equipment prescribed to conduct reduced emission well completions will simply not be available in time to comply with the current final rule schedule.

Manufacturers and industry need two to three years to design, manufacture and certify a sufficient number of control devices and train personnel.

We also think the system of notifications, monitoring, recordkeeping, performance testing and reporting requirements for compliance assurance must be simplified. Taken as a whole, these requirements would be overly burdensome for the small and/or temporary facilities that EPA is regulating. They would waste time and resources for the industry and EPA.

The benefits of shale energy development are indisputable. Nationwide, shale gas development was supporting 600,000 jobs in 2010, according to a December IHS-Global Insight report. Natural gas prices have fallen by half from their level three years ago. That is benefiting families that heat their homes with natural gas, as well as businesses and consumers that buy their electricity from utilities that generate it with natural gas.

Low natural gas prices are also benefiting chemical manufacturers and other businesses that use natural gas as a raw material, and that is encouraging businesses to locate new facilities in America rather than overseas.

The president has called for his administration to reign in burdensome regulations. At a time when the government is desperate for revenue, and America’s gasoline prices are high, applying overly burdensome regulations would be bad public policy and could place an even bigger burden on Americans in the form of higher energy costs.

EPA can fix these rules so they reduce emissions yet are still compatible with oil and natural gas development that creates jobs, government revenue and improves our energy security. We ask them to keep these recommendations in mind as they finalize the rule.

View the original article here

EPA Needs to Fix Air Emissions Proposal

 

Howard Feldman, API director of scientific and regulatory affairs, spoke with reporters today about proposed rules for oil and natural gas air emissions.  This is what he had to say.

EPA's proposed rules for the oil and natural gas sector, which address sources of air emissions including those associated with hydraulic fracturing, are due to be finalized in the first week of April. The rules are important because they would over time affect hundreds of thousands of natural gas development operations.

A new study conducted by Advanced Resources International, which we are releasing today projects the rules as proposed would significantly slowdown drilling, resulting in less oil and natural gas production, lower royalties to the federal government, and lower tax payments to state governments.

Unless EPA makes changes to the proposal, the study found that between the time these rules are implemented and 2015:

Overall drilling for natural gas using hydraulic fracturing would be reduced by up to 52%, reducing drilling by as much as 21,400 wells;Natural gas production from hydraulically fractured wells would decline by up to 11% compared to what would otherwise have been developed;Oil production from hydraulically fractured wells would decline by up to 37% compared to what would have otherwise been developed;The federal government would not collect up to 8.5 billion dollars in royalties due to reduced drilling and production;State governments would not collect up to 2.3 billion dollars in severance taxes due to reduced drilling and production.

This analysis does not even attempt to estimate the lost jobs and decline in other economic benefits that would result from reduced drilling and reduced oil and gas supply services.

As we suggested in our comments on the proposal, EPA must make changes to this rule and allow for reduced emissions while not impeding the massive job creation and economic revitalization that we’ve seen in states like North Dakota and Pennsylvania due to the shale boom.

First, reduced emission completions requirements should be less prescriptive and limited to circumstances that are cost-effective and technically feasible. A one-size-fits-all approach will not work.

EPA should also allow more time to implement the requirements once they are final. The equipment prescribed to conduct reduced emission well completions will simply not be available in time to comply with the current final rule schedule.

Manufacturers and industry need two to three years to design, manufacture and certify a sufficient number of control devices and train personnel.

We also think the system of notifications, monitoring, recordkeeping, performance testing and reporting requirements for compliance assurance must be simplified. Taken as a whole, these requirements would be overly burdensome for the small and/or temporary facilities that EPA is regulating. They would waste time and resources for the industry and EPA.

The benefits of shale energy development are indisputable. Nationwide, shale gas development was supporting 600,000 jobs in 2010, according to a December IHS-Global Insight report. Natural gas prices have fallen by half from their level three years ago. That is benefiting families that heat their homes with natural gas, as well as businesses and consumers that buy their electricity from utilities that generate it with natural gas.

Low natural gas prices are also benefiting chemical manufacturers and other businesses that use natural gas as a raw material, and that is encouraging businesses to locate new facilities in America rather than overseas.

The president has called for his administration to reign in burdensome regulations. At a time when the government is desperate for revenue, and America’s gasoline prices are high, applying overly burdensome regulations would be bad public policy and could place an even bigger burden on Americans in the form of higher energy costs.

EPA can fix these rules so they reduce emissions yet are still compatible with oil and natural gas development that creates jobs, government revenue and improves our energy security. We ask them to keep these recommendations in mind as they finalize the rule.

View the original article here