Emissions Proposal: Too Much, Too Soon

Mark Green
Posted December 2, 2011

On EPA's proposal to regulate emissions from oil and natural gas drilling, API's Howard Feldman, director of regulatory and scientific affairs, has suggestions including:

• Take more time - Four months isn't long enough to consider sweeping rules that Feldman says would affect hundreds of thousands of natural gas development operations.
• Longer time frame for implementation - Once regulations are finalized, industry will need years to manufacture the equipment needed for compliance and to train operators to use it. "The equipment prescribed to conduct reduced emission well completions will simply not be available in time to comply with the current final rule schedule," Feldman says.
• Improved cost analysis - EPA's analysis uses a model that doesn't represent all the equipment and compliance costs that will be involved. "We think the proposed rule would have a much greater economic impact than EPA predicts," Feldman says.

EPA's proposal aims to cut smog-forming volatile organic compounds (VOCs), specifically targeting VOCs released from new and updated natural gas wells that have been developed with hydraulic fracturing. EPA wants operators to capture natural gas that escapes during the drilling stage, claiming that will result in a net savings of $30 million a year. Feldman, during a conference call with reporters:

"We believe EPA vastly overestimated the savings side. They said we're going to get so much benefit from reducing fugitive emissions of natural gas that this rule will save you money, and based on real-world experience, we think that's way out of whack."

Generally, EPA's effort in this area looks overly broad, failing to account for differences in individual regions and states. Feldman:

"If impractical, unnecessarily stringent, or excessively costly, (rules) could depress domestic energy production, hurt workers and consumers, and reduce revenue to the government. We believe the proposal would not result in practical, cost‐effective rules. 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."

Additional resource: API's official comments on EPA's emissions proposal.