Oil, gas air rules drifting

EPA begins review of standards, amid industry concern

Donnie Jenkins, plant operator for Williams Production, points out the direction that the natural gas is bound once it passes through the thermal combustor, at right, and leaves the Rabbit Brush compressor station.

When it comes to how the Environmental Protection Agency regulates oil and gas industry air pollution, the agency “has been invigorated, to say the least,” environmental advocate Jeremy Nichols says.

Change is in the air regarding the EPA’s approach to oil and gas companies under the Obama administration, which encourages Nichols and worries the industry.

“We are very concerned about increased regulation from the EPA,” said Kathleen Sgamma, director of government affairs for the Independent Petroleum Association of Mountain States.

She said she believes the industry already works hard to control its emissions and that stricter rules would reduce the amount companies can spend on exploration and production.

Nichols, climate and energy program director for the WildEarth Guardians environmental group, defends his group’s efforts in helping nudge the EPA toward stricter regulations.

“We’re not about shutting down oil and gas development. We’re about protecting clean air here,” Nichols said.

Recently the group had success on two fronts.

In October, at its urging, EPA Administrator Lisa Jackson ordered the Colorado Department of Public Health and Environment to take a second look at whether emissions from a Weld County compressor station should have been considered as part of an overall emissions pattern with potentially related facilities such as wells.

Use of such an aggregate standard for emissions would subject the compressor station to stricter air quality standards.

Nichols said the decision on the issue of aggregation has ramifications for other oil and gas pollution permit applications in Colorado and other states.

On Tuesday, WildEarth Guardians and the San Juan Citizens Alliance announced a lawsuit settlement under which the EPA must review, and if appropriate update, clean air rules for the oil and gas industry.

Meanwhile, the agency instituted new reporting requirements for greenhouse gas emission, and their reach includes the oil and gas industry.

James Golden, who lives near Rifle, in a region where thousands of gas wells have been drilled in recent years, has had to live with odors from the industry and worries about emissions of substances such as benzene, a carcinogen. Although he is not familiar with the Weld County case, Golden said, the need to consider oil and gas facilities collectively makes sense, considering the number of oil and gas condensate tanks in Garfield County.

“You have to take the cumulative effect of all of those to get a picture of what the industry is doing as a whole and the air quality (effect),” he said.

Concerns met, company says

Rick Matar, air quality practice manager for Williams Production, the leading natural gas producer in western Colorado’s Piceance Basin, questions how much will be achieved by some of the shifts in the EPA’s approach to oil and gas emissions. He said he believes emissions already are adequately addressed by companies and state regulators.

“It’s mainly making things difficult not only for the industry, but for the regulating community as well,” he said.

Paul Tourangeau, director of the state’s Air Quality Control Division, shares that concern as the EPA looks at new air quality initiatives in a variety of areas, not just oil and gas emissions. States face the prospect of enforcement requirements increasing even as federal contributions of enforcement resources have been reduced, he said.

“It’s a very important consideration to, I think, all states as EPA is framing various regulatory initiatives around greenhouse gas issues under the Clean Air Act,” he said.

He said he also recognizes the importance of methane emissions related to oil and gas development as a greenhouse gas source. The EPA considers methane more than 20 times as effective as carbon dioxide in trapping heat in the atmosphere.

Last week, Jackson issued a finding that greenhouse gases pose a risk to human health and welfare.

The EPA also imposed new reporting requirements for industries with facilities generating at least 25,000 metric tons of greenhouse gases a year. Matar said that applies to certain oil and gas facilities, and he expects the reporting requirements to eventually extend to other oil and gas operations as well. And the reporting rules may very well lead to regulation of the emissions, he said.

Callie Videtich, air program director for EPA Region 8, based in Denver, said it’s too early to know the reach and implications of Jackson’s recent greenhouse gas announcement.

“I really couldn’t say what we think the impact is going to be on the oil and gas industry at this point,” she said.

“We’re really trying to take a common-sense approach to dealing with these emissions that’s not going to burden … our businesses unduly.”

Bush-era directive withdrawn

Videtich said that on the issue of aggregation,  the EPA always has required that permits be evaluated to determine whether a facility should be considered separately or in connection with other operations.

What has changed is the guidance the EPA is providing states for making a decision on aggregation.

Nichols said the aggregation question is important because it’s intended to keep connected sources of pollution from being broken down into smaller sources to avoid stricter pollution control requirements. For oil and gas operations, drill rigs, compressor engines, condensate tanks and other facilities are large sources of pollution when considered collectively, he said.

Sgamma questions the logic of how Nichols would like to see aggregation applied.

“If he had his way, the entire West would be one facility, which really doesn’t make any sense,” she said.

The EPA has said aggregate pollution should be determined by evaluating proximity of facilities, whether they are under common control, and whether they share the same industrial grouping. But in 2007, a top EPA official in the Bush administration issued a memo instructing that proximity should be the “most informative factor” in the case of oil and gas facilities, and that proximity shouldn’t be a factor at all if facilities are separated by more than a city block.

In September, the Obama administration withdrew that direction. Instead, EPA Assistant Administrator Gina McCarthy stressed the importance of all three criteria in considering an aggregate source of pollution. In the Weld County compressor station case, the EPA recommended the state re-evaluate the permit application based on all three criteria.

A coalition of environmental groups since has called on states to follow the direction established by the EPA’s order in the Weld County case in considering similar permit applications. Nichols contends Colorado has ignored the EPA’s guidance and continued to issue permits in violation of the law. He recently raised the issue in objecting to the state’s proposal to issue permits in conjunction with a plan by Gunnison Energy to modify a compressor station in Gunnison County. Nichols said the state overlooked wells feeding the station.

Videtich said she’s not familiar with whether the state has changed its handling of recent permit applications.

Tourangeau said the state is “very aware” of the EPA’s revised policy and is “trying to understand how to apply it.”

Beyond federal requirements

“I’m not aware of a situation where we aren’t doing what EPA is suggesting,” he said.

More broadly, he said the Air Quality Control Division and Colorado Oil and Gas Conservation Commission have adopted a number of restrictions of oil and gas emissions that go beyond federal requirements.

“I feel good about the fact that we have a handle on these emissions and have been controlling them,” he said.

Meanwhile, under its recently announced settlement, the EPA will be considering whether to update oil and
gas emission rules that in some cases date back to 1985 and cover concerns from benzene to ozone. While the settlement doesn’t guarantee any changes will be made, Nichols said he is hopeful the agency will broaden the rules’ scope. As an example, he would like to see certain regulations apply to more equipment and facilities.

Golden, of Rifle, welcomes the efforts of clean-air advocates like Nichols.

“The rest of America thinks natural gas is clean. What they don’t know is what’s involved to get it,” he said.

Sgamma said natural gas is indeed clean, resulting in 95 percent fewer emissions from production to end use than other conventional fuels.

“Therefore, natural gas is part of a meaningful solution for reducing air pollution,” she said.



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