Ed Ireland's Remarks to EPA

Good morning.  I am Ed Ireland, executive director of the Barnett Shale Energy Education Council, a non-profit educational organization that focuses on energy education as related to the Barnett Shale region in North Texas.  BSEEC members are committed to responsible principles and operations in the development of the clean-burning natural gas in the Barnett Shale.

I would like to focus on two points regarding the proposed New Source Performance Standards or NSPS rules.  First, a “one-size fits all” approach to regulating VOC emissions from natural gas wells is not appropriate because VOC emissions vary widely due to geologic factors and operating conditions. For example, the dry gas areas of the Barnett Shale have very low VOC emissions. This also suggests that it is not appropriate for the EPA to use natural gas emissions as a surrogate for VOC emissions (NSPS Proposed Rules, Federal Register, page 52760).

Second, the proposed new NSPS rules for the oil and natural gas sector are so extensive and complex and the comment period so short that the EPA should extend the comment period and delay implementation of the rules until sufficient review is performed and comments can be made. 

Regarding VOC emissions from Barnett Shale natural gas wells, the TCEQ recently released the data collected from their Phase 2 Special Inventory in which operators were required to report the actual VOC, NOx and HAP emissions from all 49,021 pieces of equipment listed in the Phase 1 inventory. Those data revealed that the TCEQ significantly overestimated VOC emissions from Barnett Shale natural gas wells in its State Implementation Plan (SIP) for the 9-county DFW non-attainment area. 

TCEQ’s Phase 2 emissions data showed that VOC emissions in the 9-county EPA non-attainment area of the Barnett Shale were actually 23.2 tons per day (TPD) in 2009.  This compares to TCEQ’s SIP estimate of 101.8 TPD for 2010 (after backing out the 10% growth rate that TCEQ assumed from 2010 to 2012—see page 3-28 of “Revisions to the State of Texas Air Quality Implementation Plan for the Control of Ozone Air Pollution,” Proposal, June 8, 2011).  Even allowing for the modest growth in the number of wells in operation between 2009 and 2010, it is obvious that the TCEQ has been over-estimating the VOC emissions from Barnett Shale natural gas wells by many orders of magnitude. 

One basis for the over-estimation of VOC appears to be TCEQ’s assumption that substantial amounts of VOC emissions are emitted from condensate storage tanks.  TCEQ has cited certain studies and findings as support for its assumption as to the level of VOC emissions from condensate storage tanks, As explained in the attached comments, TCEQ’s basis for this assumption rests solely on the “HARC H51C” VOC flash emissions factor of 33 lbs./bbl.  As detailed in the attached written comments, this 33 lbs./bbl. emission factor is based on faulty data and was applied by TCEQ for its SIP rulemaking for all condensate production regardless of the substantial differences in VOC content of the flash gas and operating conditions.  This in turn has led to an unrealistic and substantial increase in TCEQ’s statewide VOC emissions inventory from the oil and gas sector  (see attached:  Ed Ireland’s August 8, 2011 written comments on TCEQ’s proposed revisions to the Chapter 115 Volatile Organic Compounds storage rules).

The recent City of Fort Worth ERG Study provides additional evidence that prior estimates, such as in the current TCEQ SIP (cited above) and the January 26, 2009 Armendariz report “Emissions from Natural Gas Production in the Barnett Shale Area and Opportunities for Cost Effective Improvements”, have overestimated VOC emissions from the oil and gas sector.   Unfortunately, the faulty 33 lbs./bbl. emission factor from these studies has reappeared in this EPA rulemaking and appears to underlie the EPA’s VOC calculations on which subpart OOOO is based.

In summary, the EPA should recognize that a “one-size fits all” regulatory approach to regulating VOC from natural gas wells is not appropriate because such emissions vary widely depending on geologic factors and operating conditions.  This also suggests that it is not appropriate for the EPA to use natural gas emissions as a surrogate for VOC emissions.  Since both TCEQ and EPA have overestimated VOC emissions, the costs of these proposed NSPS rules may be underestimated and the benefits overestimated. The EPA needs to be encouraging, not discouraging, the development of clean-burning natural gas.  This was highlighted in a study released this week by well-known economist Dr. Ray Perryman that noted the huge economic benefits and jobs that Barnett Shale activity is providing to north Texas and the entire state of Texas.  The EPA should proceed with caution so as not to damage this powerful economic engine unnecessarily.

Finally, the EPA needs to provide more time for affected companies to review the rules and prepare comments.  There must be a reasonable time period for companies to avoid non-compliance by being able to properly prepare for implementation of these new regulations. 

Thank you.

RESOURCES

• BSEEC SIP
• HARC 51C
• Appendix