Thursday, April 19, 2012

Thumbs Up For EPA Gas Drilling Air Rule

Compelled by federal court litigation filed in 2009, the EPA final gas drilling air rule slashes pollution coming from gas production at modest costs. The pollution reduction numbers are big: volatile organic compounds cut by up to 290,000 tons, benzene by 12,000 to 20,000 tons, and methane by 1 million to 1.7 million tons.

The reductions of some pollutants, including those that cause ground level ozone or smog, will be an impressive 95%.

Though details of the rule had leaked (ironic when the rule addresses leaks of pollutants), the EPA made the rule available to the public yesterday.  The EPA materials at the link are well done and are worth reviewing.

Through the public comment process, EPA learned that approximately 50% of gas wells that are completed each year now use green completions or reduced emission completions.  The 50% number was higher than the EPA had presumed, when the proposed rule was announced.

Importantly, one implication of the high number of current green completions, now understood by the EPA, is that the EPA's 2.4% estimate of methane leakage in gas production is likely too high and will be revised downward.

The EPA also learned that approximately 11,400 wells are hydraulically fractured and completed each year, and another 1,400 are refracked.  Again these numbers are lower than EPA had estimated when the proposed rule was published.

Companies will be required to do green completions/reduced emission completions on most wells (but does not require them for low pressure wells as well as exploratory and delineation wells) by January 1, 2015 and must flare prior to that time.  Flaring destroys up to 95% of most pollutants but not nitrogen oxides that cause ground level ozone.

The rule also addresses other equipment used in gas production such as compressors, dehydrators and storage tanks and will slash emissions from those too.

The rule contains different starting dates for its various provisions.  The biggest change from the proposed rule to the final rule was extending until January 1, 2015 the implementation date for reduced emission completions.

EPA states that an extension was required by an inadequate number of reduced emission completion sets currently available.  The American Petroleum Institute filed comments that 300 such sets exist.  EPA concluded that more will be needed so that the approximately 13,000 green completions per year required by the rule can be done and so provided more time, but required flaring in the interim.

The EPA final rule is smart, reasonable, and deserves tow thumbs up. Let's hope that this is one rule that nobody appeals or, more realistically, that survives intact the gauntlet of federal court review.

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