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First Ever Federal Air Standard for Fracking Proposed

08.01.2011

By Andy Bowman, Attorney, Bingham Greenebaum Doll LLP

On July 28, 2011, U.S. EPA announced a series of four proposed air emissions regulations for the oil and natural gas industry:

  • a new source performance standard for volatile organic compounds (VOC);
  • a new source performance standard for sulfur dioxide (SO2);
  • an air toxics standard for oil and natural gas production; and
  • an air toxics standard for natural gas transmission and storage.

According to U.S. EPA, the majority of new wells currently being drilled in the United States produce gas and a majority of these new wells use the hydraulic fracturing or “fracking” process. Fracking involves pumping large quantities of a mixture of water, chemicals and a proppant (such as sand) into shale formations at extremely high pressure to fracture the shale and release natural gas into capture wells. U.S. EPA estimates that 11,400 new wells are fractured annually and another 14,000 are refractured each year.

The proposed rules would require VOC reductions from

  • completions of new hydraulically fractured natural gas wells and recompletions of existing natural gas wells that are fractured or refractured through the use of “green completions” equipment to capture gas during flowback or through pit flaring.
  • new and replaced centrifugal compressors must be equipped with dry seal systems and new and replaced reciprocating compressors must replace rod packing every 26,000 hours of operation.
  • new or replaced pneumatic controllers at gas processing must not be gas-driven. Controllers at other sites must not emit more than six cubic feet of gas per hour.
  • new or modified condensate tanks with a throughput of 1 barrel per day and crude oil storage tanks with a throughput of 20 barrels of crude per day must reduce VOC emissions by 95%.
  • natural gas processing plants must enhance leak detection and repair (LDAR) programs.

The proposal strengthens the SO2 standards for new natural gas processing plants. Under the proposed rule all large glycol dehydrators used in production at major sources of hazardous air pollutants (HAP) will be required to reduce HAP emissions by 95%. Small glycol dehydrators (annual natural gas throughput of less than 3 million cubic feet per day or actual annual benzene emissions of less than 1 ton per year) will have emission limits.

Finally, large glycol dehydrators used in transmission and storage at major sources would no longer have the 1 ton per year benzene compliance option available and small glycol dehydrators (natural gas throughput of less than 10 million cubic feet per day or annual average benzene emissions less than 1 ton) will have emission limits.

The proposal would exempt well completions and other processes subject to the New Source Performance Standards from a Title V operating permit requirement if not a major source for other reasons.

Comments may be submitted for 60 days after the proposed rules are published in the Federal Register at www.regulations.gov under Docket ID No. EPA-HQ-OAR-2010-0505. Information on the proposed rules is available at www.epa.gov/airquality/oilandgas. U.S. EPA is subject to a court-entered consent decree requiring final action on the proposed rule by February 28, 2012.

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