*See update at bottom
The EPA unveiled new rules aimed at cutting emissions from natural gas drilling, production and transportation on Thursday by requiring changes and additions to the equipment and procedures used in drilling, completions and production from gas wells.
Regulators argue the rules are long overdue and will actually save companies money in the long run — up to $30 million per year — by preventing the escape of saleable commodities.
One might have expected a broadside against the new rules, given how industry was ready with a study to counter EPA plans to toughen ozone-forming emissions yesterday.
But the response — so far — has been pretty mild.
The American Petroleum Institute‘s Howard Feldman briefly noted that the EPA already has limitations on emissions from engines used in oil and gas operations. The API is reviewing the 600-plus pages of the rule to ensure they don’t inadvertently create unsafe operating conditions, are cost-effective and “don’t stifle the development of our abundant natural resources,” he said in a statement. (here’s a shorter summary of the rules)
Feldman said API also wants EPA to extend the final rule deadline beyond the current February 2012 schedule.
Dan Whitten, Vice President of Strategic Communications for America’s Natural Gas Alliance (ANGA), was also pretty tame in his response, stressing the industry’s commitment to safe and responsible development, ” … including the preservation of air quality in communities where we operate.”
“We strongly believe that environmental protection and development of natural gas are not mutually exclusive,” Whitten said. “We will be studying EPA’s proposed rules in the days and weeks ahead, and we will consider submitting comments as part of the notice and comment process.”
While the proposed rules are lengthy, the notion of improving emissions from drilling doesn’t exactly seem like foreign territory for producers.
For example, when Shell unveiled its blueprint for best practices in natural gas drilling last month, one of the 5 principles included cutting emissions from it drilling operations. This includes plans to test facilities for fugitive emissions and to use vapor recovery technology where possible, Shell said.
And on a conference call with reporters on Thursday, Ramon Alvarez, a senior scientist with the Environmental Defense Fund, noted that Devon Corp. has been doing so-called “green” frac jobs for many years in the Barnett shale, capturing a high percentage of its emissions and saving many millions of dollars.
Devon told the Ft. Worth Star-Telegram that indeed it has been doing that in the Barnett for quite a while, and had previously adopted one of the new proposals from the EPA — using so-called low-bleed valves that release fewer emissions when activated.
But when the city council started to review the document, the meaning of the results seemed to be a bit less clear.
“There’s a line between what a scientist produces as a report and what the lay public can understand,” said District 7 Councilman Dennis Shingleton.
Platt’s gathered some other commentary from the industry on the proposed rules. This includes Texas Railraod Commissioner Elizabeth Ames Jones (who’s never at a loss for harsh words for the EPA) and the Marcellus Shale Coalition:
Kathryn Klaber, president and executive director of the Marcellus Shale Coalition said in a statement Thursday that the EPA began promulgating the new rules as a result of a lawsuit filed by two environmental groups, which she said oppose gas development.
“While we understand that EPA is required by law to periodically evaluate current standards, this sweeping set of potentially unworkable regulations represents an overreach that could, ironically, undercut the production of American natural gas,” Klaber said.