Let states take lead in drilling regs
Oil and gas industry folks can be forgiven if they are a bit skeptical of the declaration by the Environmental Protection Agency that proposed new air-quality regulations will be highly cost effective for the industry.
It’s not that capturing methane and other gases from gas wells and the hydraulic fracturing procedure that accompanies most drilling these days is a bad idea. It’s such a good notion, in fact, that companies in Colorado have been using so-called “green completion” technology for a number of years.
They capture gases and liquids from the drilling processes and collect those with marketable value to be sold. Some 4,000 gas wells using that technology have already been drilled in Colorado, according to David Ludlam of the West Slope Colorado Oil & Gas Association.
But Ludlam also suggested it’s a bit ridiculous for the EPA to announce that the new regulations are going to save the industry money.
“They don’t need to position the rules in such a way that they claim they are going to save us money,” he said. “We can do that on our own.”
Like the American Petroleum Institute, Ludlam said his group is reviewing the more than 600 pages of proposed regulations and won’t have a formal statement on them for some time. It is examining how cost-effective the rules may actually be, and how effective they will be from a public-health standpoint.
Ludlam also said members of his group are concerned that there may not be enough flexibility in the rules to recognize the differences between production within drilling operations on large, established lease areas — where as many as 50 wells may be drilled from one pad — and smaller, exploratory operations where the economics of green completion are far different.
We’re also worried about the EPA applying a one-size-fits-all approach to regulating air quality for drilling nationwide. What’s appropriate in new fields in New York and Pennsylvania may not be what’s needed in Colorado and Wyoming.
Moreover, Colorado already has some of the toughest rules in the country with respect to oil and gas drilling. Just ask the many critics of those rules, who believe the rules are largely responsible for the slowdown in drilling in this state over the past few years. We don’t agree with that argument, but we do believe Colorado’s rules go further than most to address environmental issues related to drilling.
Universal rules, hastily formulated in response to a lawsuit, don’t necessarily make the best policy. In the final version of its proposal, the EPA should recognize the work that a few states — notably Colorado — have already done in this area and allow them to take the lead, in cooperation with industry, to address “green completion” requirements.