Pipeline & Gas Journal...May 2012
The Obama administration took its first two regulatory steps, one final
one tentative, toward guarding against air and ground water pollution from
fracking. The final rule on air emissions from the Environmental Protection
Agency (EPA) and proposed rule from the Department of Interior (DOI) covered different
regulatory terrain. The EPA limits emissions of volatile organic chemicals,
chiefly methane, from fracked oil and gas wells while the DOI wants gas
companies and their well digging contractors to disclose more information about
the fracking chemicals they use and about their well digging and construction
practices.
Lost in the headlines over
the controversial fracking implications was the EPA's decision, in its final
rule, to step back from what interstate pipelines worried would be onerous new,
emission reduction requirements on transmission and storage operations. There,
the EPA proposed rule issued previously would have expanded New Source
Performance Standards (NSPS) for the oil and gas industry. Those standards
regulate emissions of volatile organic chemicals, the chief one being, with
regard to pipelines, methane. The EPA
had proposed to broaden the reach of the NSPS to cover, for the first time, transmission
and storage operations and fracking.
In the final rule
published in April, the EPA stayed with the first-time fracking requirements,
but softened them considerably. The transmission and storage enhancements were,
for the most part, ditched. Compressor and pneumatic controller reductions were
omitted...for the moment. The
final rule exempted from regulation low-bleed controllers (with bleed rates
below 6 standard cubic feet per hour) located between the well-head and the
point where the gas enters the transmission line, to encourage a quicker transition
from high-bleed controllers. The requirements for high-bleed controllers were
also phased in over one year to give manufacturers of these devices the time
needed to test and document the gas bleed rate. A different metric was also
identified to simplify the determination of which storage tanks are covered by
the standards. Instead of the proposed throughput measurement, the final rule
identified a regulatory cutoff of 6 tons of VOC emissions.
With regard to fracked wells going
forward, operators there will have to either flare their emissions or
use emissions reduction technology called “green completions,” technologies
that are already widely deployed at wells. In 2015, all new fractured wells
will be required to use green completions. The final rule does not require new
federal permits.
"We are very pleased that EPA was
convinced by our arguments that there are very few VOC emissions from the
transmission sector and thus they chose not to regulate that segment in this
rule," says Lisa S. Beal, Vice
President, Environment & Construction Policy, Interstate Natural Gas
Association of America (INGAA). "However, we are still perplexed by some
of the language in the rule that suggests this might just be temporary.
We do not believe that further analysis will result in a different conclusion.
Simply put, EPA would be chasing something that just isn't there. So, in
short, yes, the final rule addressed our concerns but until EPA makes a
definitive determination that VOC controls on the transmission sector are
unnecessary, we will remain vigilant."
The EPA also softened
proposed changes to the Maximum Achievable Control Technology (MACT) standards
which apply to emissions of air toxics. Richard N.
Wheatley,
Manager, Media Relations/Emergency Response
Communications, El Paso Corporation, says the NSPS and MACT changes in the
final rule "are a significant improvement."
The Department of Interior proposed rule on
fracking was issued by the Bureau of Land Management (BLM), and will apply,
once finalized to state, federal and Indian lands. The rule would (1) provide disclosure to the public of
chemicals used in hydraulic fracturing on public land and Indian land, (2)
strengthen regulations related to well-bore integrity, and (3) address issues
related to flowback water.
The proposed rule would
require that disclosure of the chemicals used in the fracturing process be
provided to the BLM after the fracturing operation is completed. This
information is intended to be posted on a public web site, and the BLM is
working with the Ground Water Protection Council to determine whether the
disclosure can be integrated into the existing website known as FracFocus.org.
Prior approval would be required for well
stimulation activities, generally in connection with the prior approval process
that already is in place for general well drilling activities through the
Application for Permit to Drill (APD) process. Operators also will be required
to submit cement bond logs before fracturing operations begin. The running of
cement bond logs on surface casing, which is currently an optional practice,
would now be required for new wells. Existing wells would require mechanical
integrity testing prior to hydraulic fracturing.
In a teleconference with reporters on May
9, Jack Gerard, President and CEO of the American Petroleum Institute, didn't
mince words in criticizing the BLM proposed rule. He said the states are fully
able to handle regulation of hydraulic fracturing . "It is simply not
necessary to add a new federal regulatory regime for fracking on top of an
already highly competent state regime," he explained. Asked whether the
API would ask the BLM to withdraw the proposed rule, Gerard did not answer
directly. He said the API would continue to work with the White House and the
BLM and look closely at the proposed rule. "But at the end of the
exercise, we have to answer a
fundamental question. That is 'What is the need for these
regulation.'" He pointed out that EPA Administration Lisa Jackson said the
week before there was no evidence of groundwater contamination from fracking,
and allegations of contamination in specific places have been found to be
hollow. Rather than concerning itself with a new layer of federal fracking
rules, Gerard emphasized that the federal government ought to be spending its
time modifying oil and gas permitting rules,'" he stated.
He noted that Secretary of the Interior
Salazar had just approved a permit for Anadarko to drill over 3,600 natural gas
wells in Utah’s Uinta Basin. It
took DOI six years to approve that permit, Gerard stated. "North Dakota
can issue a permit in 14 days," he continued. "The federal government
should be looking at those models."
