As prepared for delivery
Press briefing teleconference on proposed oil and gas emission rules
Howard Feldman, director, regulatory and scientific affairs, API
Thursday, December 1, 2011
Opening statement:
Good morning everyone. Yesterday, API submitted its comments on EPA's proposed rules for the oil and natural gas sector, which includesregulation of air emissions from hydraulic fracturing.
The rules are important because they would over time affect hundreds of thousands of natural gas development operations. If impractical, unnecessarily stringent, or excessively costly, they could depress domestic energy production, hurt workers and consumers, and reduce revenue to the government.
While API commends the efforts the Agency has made to learn about the oil and natural gas production industry, we believe the proposal would not result in practical, cost-effective rules.
We have some limited concerns about the control technologies that have been selected, many of which are emission control techniques developed by our industry over many years of operating experience.
We have much stronger concerns about the one-size-fits-all approach of the proposed rule to regulating an industry that varies greatly in the type, size and complexity of operations.
A number of steps could be taken to improve the proposal.
The first is procedural: EPA should allow more time to review stakeholder comments. Four months are not enough. The proposed requirements would affect hundreds of thousands of oil and natural gas operations covering virtually every state in the union. These operations vary widely in scale, physical setting, equipment and technology, and the rules need to recognize and allow for this. The only way that can happen is if the agency takes the time to carefully assess the extensive stakeholder comments it is receiving.
Also, more time should be allowed to implement the requirements once they are final. The equipment prescribed to conduct reduced emission well completions will simply not be available in time to comply with the current final rule schedule. We believe it will take years to manufacture this specialized equipment and adequately train operators in its safe use.
We also think the system of notifications, monitoring, recordkeeping, performance testing and reporting requirements for compliance assurance must be simplified. Taken as a whole, these requirements would be overly burdensome for the small and/or temporary facilities that EPA is regulating. They would waste time and resources for the industry and EPA.
Improved cost analyses are also needed. EPA cost analyses are based on "average model facilities" that do not represent all equipment and compliance costs and fail to identify when the controls are no longer economic. We think the proposed rules would have a much greater economic impact than EPA predicts.
EPA also should pull back provisions that exceed the agency's authority. As proposed, the rules expand listed categories and apply standards in unique and unprecedented ways. They now include new sources that emit little to no regulated pollutants that should not be subject to these requirements.
Finally, EPA should improve its risk analysis. It has expanded an already conservative risk analysis to include allowable emissions and wrongly concluded that additional requirements are needed. The modeling of actual emissions under the existing rules indicates that the public is already protected with an ample margin of safety.
EPA can fix these rules so they reduce emissions yet still are compatible with oil and natural gas development that creates jobs, revenue and energy security. That is our goal, and the comments we are providing EPA and which we have sent to you show in detail how we think the rules could be changed to achieve that.
Thank you. Now, I'd be happy to take your questions.