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Natural gas exploration and drilling has greatly increased over
the past several years. One reason for this boom has been the
development of new drilling techniques using hydraulic fracturing,
or "fracking," to extract gas from shale beds that were
formerly not economical to develop. New fracking wells in
Pennsylvania, Ohio, West Virginia, Texas, Wyoming, North Dakota,
and other states have led to calls for increased regulation by the
federal government.
On April 17, 2012, the U.S. Environmental Protection Agency
responded with new air emission regulations for the oil and gas industry under
the Clean Air Act. Most notably, one of these new regulations
governs air emissions from natural gas fracking wells, including
emissions of
greenhouse gases. Air emissions from natural gas wells were not
previously subject to federal regulation.
The new regulations set "new source performance
standards" under the Act for hydraulically fractured wells,
which EPA claims will reduce harmful emissions from such wells by
95 percent. The primary requirement is for hydraulically fractured
natural gas wells to incorporate "reduced emissions
completion" or "green completion" to capture excess
gas that is currently released into the atmosphere or burned off
through flaring when the well is fractured. Green completion allows
this excess gas to be recaptured and sold at market rather than
being lost into the atmosphere. Wildcat (exploratory) wells,
delineation wells, and low-pressure wells are exempt from the
requirement for green completion.
EPA estimates that the net benefit of selling this gas will
completely offset the cost of regulation to the industry, and in
fact will yield a net savings to the industry of $11 million to $19
million per year once the rule is fully implemented. EPA also
estimates that the new requirements will reduce annual volatile
organic compound emissions by 190,000 to 290,000 short tons,
hazardous air pollutant emissions by 12,000 to 20,000 tons, and
methane emissions by 1.0 million to 1.7 million tons (equivalent to
19 million to 33 million tons of
carbon dioxide).
Reduced emissions completions are already occurring in several
areas around the U.S. They are required by state law in Wyoming and
Colorado and by local law in Fort Worth and Southlake, Texas.
However, industry impressed upon EPA that there are only about 300
of the required green completion devices currently available for
use. In an open letter to EPA just days before the new rule was
published, the American Petroleum Institute estimated that to meet
current production levels, the industry would need approximately
1,000 such devices to comply with the rule. EPA acknowledged this
limitation and delayed the green completion requirement until
January 1, 2015 to provide additional time to build and deploy
additional units.
In addition to the green completion requirement, the new
regulation establishes new source performance standards for other
oil and gas operations, including reciprocating and centrifugal
compressors, pneumatic controllers, and storage vessels. The rule
also establishes new National Emissions Standards for Hazardous Air
Pollutants for gas transmission and storage facilities along with
oil and gas production facilities.
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