By Katerina E. Milenkovski
Today [April 18, 2012], the U.S. Environmental Protection Agency (EPA) issued the first ever federal air standards for natural gas wells that are hydraulically fractured, along with requirements for several other sources of pollution in the oil and gas industry that currently are not regulated at the federal level.
The key component of the final rules is a requirement to use "reduced emissions completion" or "green completion" to capture natural gas that escapes into the air. Using green completion, gas and liquid hydrocarbons are separated from the flowback that comes from the well as it is being prepared for production. This approach is expected to yield a nearly 95 percent reduction in volatile organic compound (VOC) emissions from the more than 11,000 new hydraulically fractured gas wells each year. In addition, the rules will reduce emissions of air toxics, including benzene, and greenhouse gases, such as methane.
Based on public comment, the final rule contains some changes as compared to the initial proposal - the most important being a "phase in" of the green completion requirements. Recognizing that there was a shortage of equipment necessary to perform green completions, EPA has pushed back the requirement to begin using green completions to January 1, 2015. In the interim, companies who do not use green completions will be required to flare the emissions, which also effectively reduces VOC emissions by 95 percent.
Green completions will not be required for new exploratory ("wildcat") wells or delineation wells (used to define the borders of a natural gas reservoir) or for low pressure wells, which are defined using a simple formula based on well depth and well pressure.
The rule also includes new requirements for glycol dehydrators, pneumatic controllers, compressors and storage tanks at well sites, gathering and boosting stations, processing plants and compressor stations.
EPA estimates the rule will result in combined annual emission reductions of:
According to EPA, the value of natural gas and condensate captured by green completions (rather than emitted into the air) is expected to offset the cost of capturing it.
The new rules will become effective 60 days after publication in the Federal Register.
If you have any questions about these new air regulations, please contact us.
Katerina E. Milenkovski's legal practice focuses on energy and environmental law, with an emphasis on air quality issues.
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