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Jennifer Hiller | San Antonio Express-News | 12 May 2016

Sweeping federal rules unveiled Thursday will tackle the release of the greenhouse gas methane from oil wells and equipment as part of an effort to fight climate change.

The regulations would require oil companies to find and fix leaks in new wells and at equipment such as storage tanks and compressors, but would not apply to existing, older wells.

They are the final version of a draft that was released last year by the Environmental Protection Agency, and are tougher than the rules it initially proposed. The final version includes low-producing wells making less than 15 barrels per day of oil per day, which are drilled by mostly smaller companies, and had been expected to be exempt.

The regulations target both the emission of methane — the key component of natural gas — and smog-forming volatile organic compounds. But the Obama administration has made methane reduction in particular the linchpin of its climate change strategy because the gas is 25 times more effective than carbon dioxide in trapping heat. The administration has set a goal of reducing methane emissions by as much as 45 percent from 2012 levels by 2025.

The EPA estimates that the rules could cost companies about $530 million in 2025.

“These new actions will protect public health and reduce pollution linked to cancer and other serious health effects while allowing industry to continue to grow and provide a vital source of energy for Americans across the country,” said the agency’s administrator, Gina McCarthy.

The oil and gas industry called the rules unnecessary, saying they already have a reason to stop methane leaks — so they can sell it. Companies also say the rules would be too costly and come at a time when the industry has been battered by low oil prices, which started falling in late 2014, and natural gas prices that have been depressed for several years.

Industry groups in Texas, including the Texas Oil & Gas Association, Texas Independent Producers & Royalty Owners Association and North Texans for Natural Gas, came out against the new regulations.

“This is a costly rule that puts a bull’s-eye on the Texas energy economy,” Steve Everley, a spokesman for North Texans for Natural Gas, said by email.

In addition to leak detection, the regulations would force companies to eliminate flaring and venting during well completions — the time after drilling and before production when mostly wastewater flows up a well. Capturing the natural gas and other hydrocarbons during that process is called a “green completion,” and gas drillers across the country already have made that switch. Oil drillers would have to do the same now.

Although most of the requirements for new wells would apply immediately, energy companies have a year to submit leak detection and repair plans. Green completion technology will be required at new oil wells within six months, but energy companies still would be forced to reduce emissions at those sites in the meantime, including by burning excess gas.

There are exceptions to the regulations. They don’t apply to exploratory “wildcat” wells or at wells that produce a low amount of natural gas compared to oil.

They’re also unlikely to have a big impact on the amount of natural gas flaring in the Eagle Ford Shale, the 400-mile oil fields that arcs across South Texas. The Eagle Ford and its flares are visible in night satellite photos from NASA, glowing in a swoosh across South Texas.

The regulations won’t require a green completion at a oil well where it’s not “technically feasible” to get the gas to a pipeline — the reason that many Eagle Ford oil wells flare off their natural gas. The EPA said those wells should flare instead of vent during the completion process. While flaring is supposed to incinerate impurities in raw natural gas and produce carbon dioxide, venting releases the gas directly into the atmosphere and is more harmful.

Nevertheless, there should be air quality benefits for the region from the new regulations, said Colin Leyden, a state regulatory and legislative affairs manager for the advocacy group Environmental Defense Fund.

Leak detection and repair could save companies money and help air quality, both in the oil fields and in nearby cities such as San Antonio and Austin, which are struggling to comply with federal air quality standards, Leyden said. Recent air monitoring data for San Antonio show that the region is poised to be designated in “nonattainment” by the EPA by October 2017, which could trigger federal restrictions to reduce pollution from vehicles and new or expanding businesses.

“It won’t necessarily address flaring, but it will start to cut down on VOC emissions,” Leyden said. “If you plug a methane leak, you’re also reduce VOCs. It’s a win-win. There are no magic bullets for ozone, but it does help. We think this is a really good first step, a down payment on reducing methane emissions and tackling climate change. There’s also some co-benefits on air quality.”

The rule on methane emissions from new oil and gas wells will not be enough to meet Obama’s methane reduction targets, but the EPA is expected to move forward with additional rules governing methane leaks from existing wells.

Some companies in the Eagle Ford — most notably Statoil — already are monitoring for leaks using infrared cameras, and are avoiding gas flaring by installing pipelines before any of its wells are drilled.

Read more here: http://www.expressnews.com/business/eagle-ford-energy/article/For-oil-drillers-Obama-methane-rule-worse-than-7464430.php

 

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