June 1 2 , 2015

The Honorable Janet McCabe Acting Assistant Administrator

Office of Air and Radiation U.S. Environmental Protection Agency

Via Electronic Mail

Re: Oil and gas emissions sources

Dear Ms. McCabe:

The American Petroleum Institute (“API”) has had a long, successful working relationship with the US Environmental Protection Agency (“ EPA ”) on a number of air emissions programs. The oil and gas industry has also been successful in significantly reducing emissions from our operations. As we have indicated previously, w e do not believe that additional EPA regulation of the emissions from our industry is necessary. Increased exploration, production and use of natural gas are both essential to meeting the goals of the Administration’s Climate Action Plan and an objective of US energy policy. Furthermore, t here is wide agreement that increased reliance upon natural gas as a cleaner fuel can significantly reduce US greenhouse gas emissions. Below, we

to uch on our positions on regulation and voluntary programs, and provide a more

detailed discussion of an API framework for emissions reduction credits.

Additional Revisions to NSPS OOOO

Should EPA adopt additional controls as part of the ongoing reconsideration of NSPS

OOOO

, EPA should continue to regulate only VOC emissions

. I f EPA believes that additional controls are necessary for transmission and storage sources

, EPA must propose a separate NSPS category for transmission and storage, and determine whether this new source category warrants regulatory controls

. Additionally, EPA should minimize the reporting, recordkeeping, quantification, and verification burden on industry in any regulatory program. Howard J. Feldman

Senior Director

Regulatory and Scientific Affairs

1220 L Street, NW Washington, DC 20005

- 4070

USA Telephone 202

- 682

- 8340

Email feldman@api.org www.api.orgPage 2 of 3

EPA Voluntary Program

As indicated in my May 5, 2015 letter to you (attached), i t is a win for EPA, industry and the environment if EPA ensures that any voluntary program is embraced by all
stakeholders. As described in that letter, o ur four primary concerns revolve around 1) flexibility, 2) clear commitments and assurances with resp ect to benefits that would accrue to participants through their participation, 3) regulatory overlap and 4) recordkeeping, quantification, and verification. We believe these concerns need to be addressed within the confines of the potential program if suc h a program is to be a success and we are happy to discuss these further with you and/or your staff. As you
are aware, i ndustry is facing a suite of proposed regulatory changes in the coming

years. EPA should make it clear that robust participation in the onshore equipment leak and high bleed pneumatic controller programs by operators will obviate the need for direct regulation of methane for new sources.

Emission Reduction Credits

A s EPA moves in the direction of additional regulations of oil and gas operations, potentially more stringent ozone standards, and development of new voluntary emissions reduction programs, the establishment of a framework for emissions reduction credits ( “ ERCs ” ) would be a win

- win for all parties.

ERCs provide important compliance flexibility to industry in areas where a more stringent ozone standard could jeopardize continued industry operations.

As indicated

, i t is beneficial for all parties if EPA ensures that any voluntary program is coordinated with other regulatory action, including any Control Technique Guid eline (“ CTG”) to the states

. This would preserve industry’s ability to generate ERCs for VOCs to the maximum extent permissible under the Clean Air Act and to preserve those

credits

. Voluntary reductions of other ozone precursors such as NO X currently generate ERCs. EPA may want to consider incentivizing further reductions from these precursors in its voluntary framework to make the program appealing to producers who may not

have VOC

- rich gas. Also, EPA should consider the generation and use of credits for methane emission reductions as well and crediting early action in recognition of the significant reductions industry has already made.

Attached, please find a paper entitled INCENTIVIZING VOLUNTARY PARTICIPATION

IN THE ENHANCED NATURAL GAS STAR PROGRAM, that proposes a framework for the continued generation of emission reduction credits for use as offsets to help attain
the ozone NAAQS. This framework would assure that industry has incentives to participate in EPA's voluntary methane emissions reduction program ("Enhanced Natural Gas Star" or “ENGS”) by enabling VOC reductions achieved as co

- benefits ofPage 3 of 3

voluntary methane controls to be treated as ERCs . This would thereby preserv e industry's compliance flexib ility under the NAAQS being developed for ground level

ozone. We anticipate that the framework would be incorporated into the Control Technique Guidelines ("CTGs") EPA is developing for oil and gas production sources,

so that the CTGs do not "mandate" red uctions that will be made voluntarily under the

ENGS and thus preclude their use as ERCs.

Since preserving ERC opportunities for companies that wish to use them may significantly inform and influence industry's perspective on the ENGS, we strongly urg e EPA to review and respond to the proposed framework before the draft ENGS is released for comment. Affirming EPA's willingness to preserve ERC opportunities will help lay the groundwork for a positive dialogue on the draft ENGS and clarify one of the
pot ential benefits to industry of participating in the ENGS.

We encourage the EPA to take the necessary time to address our proposal before it

releases a draft ENGS. Incorporating the proper incentives i nto the ENGS from the start will greatly assist companies in justifying their participation and the costs

involved. Obviously, w ide industry participation is important to the success of the

ENGS

. W e believe that, with the right incentives in place, a significant portion of the production industry would be encouraged to join , which would obviate the need for an additional regulatory program.

Thank you for your consideration. We look forward to discussing these issues with you and your staff at your earliest convenience. Please contact me if you have any questions.

Sincerely,



### Howard J. Feldman

Cc: Jo seph Goffman Paul Gunning Carey Bylin Peter Tsirigotis