Oil and Gas Lawyer Blog
Big news this week about the Environmental Protection Agency’s new proposed regulations to limit emissions of methane and volatile organic compounds (VOCs) from oil and gas drilling, operating, compression and processing facilities. EPA’s proposed new rules can be viewed here. Among other things, the proposed regs would require operators to use “green completion” technology in drilling and completing wells, to reduce emissions of natural gas during those operations. The proposed rules would apply only to “new sources” of emissions, not existing facilities.
Representative Lamar Smith, R-San Antonio, called the proposed rules “yet another example of the Obama administration’s war on American energy jobs.” Barry Russell, CEO of the Independent Petroleum Association of America, said the proposed rules would cause “unnecessary costs and added uncertainty” that would “inflict more pain on the men and women who work in the oil and gas industry at a time when market forces are already creating economic challenges.” Environmentalists praised the proposed regulations, but said that EPA needs to begin regulating emissions from existing facilities.
VOCs are carbon-based molecules that evaporate at ordinary temperatures and pressures, and are emitted into the air during oil and gas production, gathering, transportation and processing activities. They include benzene, ethylbenzene, and n-hexane, which are harmful to human health. VOCs and methane are also powerful greenhouse gases, contributing to global warming according to scientific consensus.
Meanwhile, a study was published this week in Environmental Science and Technology, led by Colorado State University and sponsored by the Environmental Defense Fund and based on a comprehensive review of methane emissions in oil and gas facilities. It found that emissions from natural gas pipelines and processing facilities are much higher than estimated by EPA or the Energy Information Administration. The study concludes that the methane escaping from natural gas pipelines and processing facilities could to power more than 3 million homes.
It appears that most emissions of methane from production and processing facilities result from poor oversight, monitoring and maintenance. Good operating practices would greatly reduce such emissions. Other emissions can be reduced only by installing new or different equipment that does not emit methane as part of normal operations. If the industry wants to limit the intrusiveness of EPA regulations on its operations, it needs to clean up its own house by identifying bad actors and encouraging compliance with good industry standards, by increased monitoring of emissions and fixing problems when they occur, and by cooperating with EPA in crafting regulations that allow the industry to address the problem in its own way.
The Cynthia and George Mitchell Foundation has endorsed the proposed rules. George Mitchell, now deceased, is the father of the modern method of hydraulic fracturing that has transformed the US energy industry.