Page 1

1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

2 OIL AND NATURAL GAS SECTOR

3 OFFICE OF AIR QUALITY PLANNING AND STANDARDS

4

5

6

7

8

9 PUBLIC HEARING ON EPA'S PROPOSED RULE ON

10 New Source Performance Standards; National

 Emissions Standards for Hazardous Air Pollutants

11 And Review

12

13

 CORRECTED TRANSCRIPT

14

 November 17, 2011

15

16 Arlington, Texas

17 Thursday, September 29, 2011

18 Morning Session

19

20

21

22

 REPORTED BY: SCHIAS K. CARMON-BROWN, TEXAS CSR#7682

23 ATKINSON-BAKER, INC.

 COURT REPORTERS

24 Telephone: 1-800-288-3376

 www.depo.com

25 FILE NO: A507E0A
Page 2

1 PARTICIPANTS:

2 EPA Hearing Panel:

3 Morning Session:

4 FRED THOMPSON, Hearing Chair

 Associate Director, Sector Policies and Programs

5 Division

 Office of Air Quality Planning and Standards

6

 ALEX MACPHERSON

7

 ROB LAWRENCE

8

 BRUCE MOORE

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25
Page 3

1 P R O C E E D I N G S:

2 MR. THOMPSON: Today is Thursday,

3 September 29, 2011. This is the public hearing on the

4 Oil and Natural Gas Sector: New Source Performance

5 Standards and National Emissions Standards for

6 Hazardous Air Pollutants and Review here in Arlington,

7 Texas.

8 Good morning and thank you for attending

9 this public hearing. The U.S. Environmental Protection

10 Agency, the EPA, is holding this hearing to take

11 comment on the proposed rules. My name is Fred

12 Thompson, and I am the associate director for the

13 Sector's Policies and Programs Division in the EPA's

14 Office of Air Quality Planning and Standards. I will

15 be chairing today's hearing.

16 Joining me on the panel are Bruce Moore,

17 to my right, of the Sector's Policies and Programs

18 Division in Research Triangle Park, North Carolina;

19 Alex Macpherson, to my left, who's with the Health and

20 Environmental Impacts Division in Research Triangle

21 Park, North Carolina; and Rob Lawrence of Region 6 here

22 in Dallas, Texas and he's with the EPA.

23 We're here today to listen to your

24 comments on the EPA's proposal, Oil and Natural Gas

25 Sector: New Source Performance Standards and National
Page 4

1 Emissions Standards for Hazardous Air Pollutants and

2 Review. On July 28th, 2011, the EPA proposed a suite

3 of regulations that will reduce harmful air pollution

4 from the oil and natural gas industry while allowing

5 continued responsible growth in U.S. oil and natural

6 gas production.

7 The proposal is based on proven

8 technology and best practices that the oil and gas

9 industry is using in some states today. It includes

10 the first federal air standards for wells that are

11 hydraulically fractured along with requirements for

12 several other sources of pollution in the oil and gas

13 industry that currently are not regulated at the

14 federal level.

15 The proposal is based on reviews of four

16 rules, two New Source Performance Standards and two air

17 toxics rules. As a result of our reviews, we are

18 proposing to improve existing NSPS for VOC and SO2 as

19 well as proposing NSPS or additional VOC emission

20 sources not currently covered. In addition, we are

21 proposing improvements to the two existing air toxics

22 rules.

23 The proposal would cut smog-forming

24 volatile organic compounds of VOC emissions by nearly

25 one-fourth across the oil and gas industry, including a
Page 5

1 nearly 95 percent reduction in VOCs emitted from new

2 and modified hydraulically-fractured gas wells. This

3 significant reduction would be accomplished primarily

4 through use of a proven technology to capture natural

5 gas that currently escapes to the air. That gas would

6 then be made available for sale.

7 Today we are accepting oral comments on

8 all aspects of our proposal and we will prepare a

9 written transcript of the hearing. The transcript for

10 the hearing will be available as part of the official

11 record for this rule. The EPA will consider your

12 comments as we move forward to complete a final rule by

13 February 28th, 2012. We are also accepting written

14 comments on the proposed rule until 30 days after the

15 last public hearing and at present, that is October

16 31st, 2011.

17 At the registration area, which is

18 located in the hallway outside of this room, there are

19 handouts with detailed information for submitting

20 written comments by mail, fax or electronically. Now,

21 let me describe procedures for today's hearing. I will

22 call the scheduled speakers to the microphone in pairs.

23 When it is your turn to speak, please state your name

24 and your affiliation before you begin your testimony.

25 You will be asked to spell your name to ensure
Page 6

1 accuracy. In order to be fair to everyone, please

2 limit your testimony to five minutes each and remain at

3 the microphone until both speakers in a pair have

4 finished. After you finish your testimony, members of

5 the panel may ask clarifying questions. If in addition

6 to the transcript of your testimony you would also like

7 us to put the full text of your written comments into

8 the docket, please be sure and give a copy of any

9 written comments to our staff at the registration

10 table.

11 We have a time-keeping system, which is

12 located here consisting of green, yellow and red

13 lights. When you begin speaking, the green light will

14 go on. You will have five minutes to speak. The

15 yellow light will signal that you have one minute to

16 speak. When the red light goes on, five minutes has

17 passed and I will ask you to please complete your

18 testimony.

19 Today's hearing is scheduled from 9 a.m.

20 and will continue until 8 p.m. or later, if necessary,

21 depending on the number of speakers. The hearing will

22 go on recess during the scheduled lunch break from

23 12:30 p.m. until 2 p.m., and a dinner break from 5 p.m.

24 until 6:30 p.m. We will reconvene promptly at 2 p.m.

25 and 6:30 p.m., respectively. We intend to stay into
Page 7

1 the evening until everyone has had an opportunity to

2 comment.

3 If you would like to testify but have not

4 yet registered to do so, please sign up at the

5 registration table in the hallway outside of the room.

6 For those who have already registered to speak, we have

7 tried to accommodate your request for specific time

8 slots. We ask for your patience as we proceed through

9 the list of speakers. We may -- excuse me. We may

10 need to make some adjustments as the day progresses.

11 If any questions arise throughout the day, please see a

12 staff member at the registration table for assistance.

13 Thank you again for participating today. And at this

14 time, I'd like to get started.

15 I'd like to ask Mike O'Connor and Luke

16 Metzger to please come forward.

17 Good morning, gentlemen. If you would,

18 please state your name for the court reporter and spell

19 it, please.

20 MR. O'CONNOR: Mike O'Connor.

21 MR. METZGER: Luke Metzger.

22 MR. THOMPSON: Mr. O'Connor.

23 MR. O'CONNOR: Thank you. I'm Mike

24 O'Connor with XTO Energy, a wholly-owned subsidiary of

25 Exxon Mobile Corporation, and I'm here today on behalf
Page 8

1 of the American Petroleum Institute. I appreciate

2 having the opportunity to appear at this hearing for

3 the proposed regulations of the -- of the emissions

4 associated with the oil and natural gas industry. The

5 proposed rules have a very broad reach. My focus is on

6 these parts specifically directed at emissions related

7 to oil and gas development and especially operations

8 employing hydraulic fracturing.

9 This focus is important because hydraulic

10 fracturing operations are critical to U.S. energy

11 development. Without this technology and without the

12 ability to employ it cost effectively, natural gas and

13 oil development could be discouraged, delayed or

14 reduced. Oil and gas are a vital part of our nation's

15 energy landscape today and are expected to continue to

16 be in our future. The EIA energy projections show that

17 oil and natural gas are expected to supply most of our

18 nation's energy for decades.

19 Unfortunately, unless property --

20 properly crafted, these rules could hamper ability to

21 supply the oil and natural gas that we know will be

22 needed and making the rules work could be difficult.

23 The comment period for these extensive, detailed rules

24 is too short. Controls would be imposed on the

25 industry with inadequate lead time. This would make it
Page 9

1 difficult for operators to prepare to implement the

2 controls and would increase the risk of unintended

3 consequences.

4 In the worst case, the result could be

5 requirements that would hinder or hurt job creation,

6 federal and state revenue generation and harm our

7 nation's energy future. We have prodigious reserves of

8 oil and natural gas here in the United States. Oil

9 will continue to be vital for supplying transportation

10 fuels and are large and growing markets for natural gas

11 related to electricity generation, manufacturing,

12 transportation and home consumption. We need to be

13 able to meet this demand. Natural gas is more

14 affordable today relative to just a few years ago,

15 largely because of the shale boom now under way.

16 More domestic oil and natural gas

17 development is crucial for job growth. The industry

18 has a strong track record of creating jobs, as

19 evidenced by what is happening in North Dakota, Texas,

20 Pennsylvania and many other states. The industry now

21 supports 9.2 million jobs and continues to create them.

22 More than 9,000 oil and gas related jobs were created

23 this summer according to BLS at a time when new job

24 creation in the economy was sorely needed. Perhaps a

25 million or more U.S. jobs could be created over the
Page 10

1 next seven years if common sense changes to energy

2 policy were implemented, according to recent --

3 research conducted by the energy consulting firm, Wood

4 Mackenzie, assuming new regulations do not have

5 unreasonable provisions.

6 Finally, sound common sense rules that do

7 not impair development are important because increased

8 use of natural gas could greatly benefit the

9 environment, reducing air pollutant and carbon

10 emissions. As for specifics in the proposed rules, we

11 support reduced emission completions when the

12 operations determine the technology to be safe,

13 technically feasible and cost effective. However, the

14 final rule should phase any reduced emission completion

15 requirements by a significant extension of time for

16 their full implementation.

17 Specifically designed equipment that is

18 time-consuming to build is required to safely perform

19 reduced emission completions. There is insufficient

20 emission control equipment currently available and it

21 cannot be constructed before the expected second

22 quarter 2012 compliance date. Furthermore, the

23 proposed regulations do not account for challenges

24 related to several current completion technologies in

25 known reservoir properties.
Page 11

1 For example, there are challenging

2 technical issues regarding certain coalbed methane

3 technologies, low-pressure reservoirs and reservoirs

4 with very low volatile organic compound content. The

5 final rule should also recognize that thousands of tank

6 emission combusters will need to be certified and

7 manufactured to reduce emissions. These combusters

8 will not be available early next year. The final rules

9 should recognize that additional time is necessary

10 before this requirement is imposed.

11 Lastly, EPA should simplify the

12 overly-burdensome aspects of the notification,

13 recordkeeping, monitoring, reporting and performance

14 testing requirements in this proposed rule to reflect

15 that many of the industry sources are at remote and

16 unmanned facilities.

17 In closing, we believe the Agency should

18 allow an additional 60 days for the public to provide

19 comment on this important rulemaking for the following

20 reasons: First, the proposed rules are expansive and

21 complex. This is a set of five complex and

22 interconnected rules. Indeed, the proposal spans over

23 a hundred pages in the Federal Register and the docket

24 contains many times more pages of supplemental analysis

25 and materials. Preparing comments on any of one of
Page 12

1 these rules would be a challenge within 60 days.

2 Preparing thorough and meaningful comments on all

3 within 60 days is not reasonable or practicable (sic).

4 Second, the proposed rules are not being implemented in

5 a vacuum. The EPA has numerous other rules under

6 development that demand time and attention from this

7 sector.

8 The proposed rules will have much greater

9 economic impact than EPA predicts. Following a

10 preliminary review of the regulatory impacts analysis,

11 it already seems clear that the EPA has significantly

12 underestimated the cost of implementing the proposed

13 rules.

14 MR. THOMPSON: Mr. O'Connor, your time

15 has expired. Final comments.

16 MR. O'CONNOR: Thank you, sir. I'll

17 submit the remainder to the registrar out front

18 incorporation into the record.

19 MR. THOMPSON: Okay. Thank you. Remain

20 seated. Any clarifying questions for Mr. O'Connor?

21 Mr. Metzger.

22 MR. METZGER: Good morning. My name is

23 Luke Metzger. I'm the director of Environment Texas.

24 We're a statewide citizen-funded advocate for clean

25 air, clean water and open spaces. Welcome to Texas,
Page 13

1 gentlemen. And if you had a chance to drive around the

2 area yesterday or today, you may have seen some of the

3 electronic billboards flashing warnings for another

4 orange ozone day, directing people to limit their

5 activity outdoors. And, unfortunately, that's an

6 all-too-common site here in the D/FW area and across

7 Texas.

8 Last year, there were more than 48 days

9 where the ozone levels exceeded national health

10 standards. And, of course, that has a particular

11 impact on our most vulnerable populations, children and

12 senior citizens, who really take the brunt of the

13 problems. Children who grow up in smoggy areas may

14 develop diminished lung capacity, putting them at

15 greater risk of lung disease later in life. And

16 Children exposed to smog in the womb can experience

17 lower birth weight and growth retardation. Even for

18 healthy adults, exposure to smog pollution damages lung

19 tissues, decreases the ability to breathe, exacerbates

20 chronic diseases like asthma and can even cause

21 premature death.

22 In addition to the smog, Texas just

23 recently finished its -- the hottest June through

24 August summer in recorded U.S. history. And that's

25 something that the Texas state climatologist, an
Page 14

1 appointee of Governor Perry, mind you, has attributed

2 in part to greenhouse gas emissions. And in addition,

3 our drought, which again is the worst one-year dry

4 spell in recorded history, and the recent wild fires,

5 again the worst in Texas history, are consistent with

6 scientific predictions about global warming.

7 Texans deserve clean air, but on far too

8 many days for our children and for senior citizens, the

9 air is just not safe to breathe. And we are also

10 suffering from serious impacts from air toxics and from

11 global warming. And so we are -- I'm, you know, here

12 today to commend the EPA for this proposal to reduce

13 emissions from the oil and gas sector, which is a large

14 contributor to the smog problem, to the air toxics and

15 to global warming emissions. According to the Texas

16 Commission on Environmental Quality, emissions from oil

17 and gas operations in the D/FW area will soon surpass

18 that of the on-road vehicles in the D/FW areas by four

19 million cars. So that's a significant impact. And I

20 think it's important to understand that you're not

21 asking very much of the oil and gas industry. These

22 are best practices taking place in other states and

23 they can certainly afford it. You know, these

24 companies are -- like Exxon and some of the richest in

25 the world are raking in billions of dollars in profits.
Page 15

1 They're making a killing on all this drilling. And I

2 think they can certainly afford it.

3 And then if you think about what the rest

4 of us are doing, we're all doing our parts here in

5 Texas. Certainly in the D/FW area and where I live in

6 Austin, we have to take our cars in every year to get

7 inspected. And if they're not clean, we have to pay

8 the -- make sure that they're not belching out

9 health-damaging pollution. It's only fair that the oil

10 and gas industry do its part as well and reduce

11 emissions from their operations.

12 And, you know, company profits should not

13 be -- company profits should be based on hard work and

14 smart management and not irresponsible policies that

15 put citizens and the environment at risk. So I

16 definitely support these rules and excited that they're

17 going to reduce smog-forming pollutants by 25 percent

18 and methane emissions by 26 percent and air toxics

19 emissions by 30 percent. So we urge you to move

20 forward in the adoption of these rules. No more

21 delays. We can't wait any longer to get clean air here

22 in Dallas or across Texas or across the country. So

23 thank you very much.

24 MR. THOMPSON: Thank you, Mr. Metzger,

25 for your testimony. Thank you both. Any clarifying
Page 16

1 questions for either?

2 Okay, gentlemen. Thank you very much.

3 Would John Rath and Jeff Applekamp please

4 come forward. Good morning, gentlemen. Please state

5 your name and spell them, please, for the court

6 reporter.

7 MR. RATH: John Rath.

8 MR. APPLEKAMP: Jeff Applekamp,

9 A-p-p-l-e-k-a-m-p. Who would you like to go first?

10 MR. THOMPSON: Mr. Rath, please.

11 MR. RATH: Okay. Thank you, gentlemen.

12 Thank you for coming down here. I'm a resident of

13 Grapevine, Texas, which is about the second worst air

14 quality community in Northeast Tarrant County. Keller

15 gets the first spot. Grapevine gets the second. We

16 have our own monitor right by Lake Grapevine. I don't

17 represent anybody but me, my family, my neighborhood,

18 the 10 or 12 kids on my basketball team, 4 of which

19 need inhalers to play basketball. And I'd like to just

20 share a couple thoughts with you, please.

21 I don't want any more delays in air

22 regulations. I don't know whether you want the human

23 side or the statistical side. You'll probably get

24 plenty of both today, but our air needs to get cleaned

25 up. I have a memento here from the 1980's, which was a
Page 17

1 government industry initiative called, Do Your Share

2 for Cleaner Air. And it lists all kinds of things that

3 we as citizens can do: don't mow our lawn, don't gas up

4 during the heat of the day, things like that. We're

5 trying to do our part. Two things. That's the first

6 one.

7 The second one is, we still have really

8 lousy air. So I'm convinced -- and I was a volunteer

9 going around to talk to organizations to help clean up

10 air -- that we don't have the leadership here in the

11 state or the local area, either business wise or

12 government wise, to get this done. We need your help.

13 Cook Children's Hospital did an independent study

14 talking about the bad air quality. I think it was

15 25 percent increase in respiratory problems for fourth

16 grade students. Those are the kids on my basketball

17 team. There was a study by a professor at SMU,

18 Dr. Armendariz, talking about ways that the industry

19 can reduce and make profits on the bad air that's being

20 released right now, common sense things.

21 So when I hear industry people talk about

22 common sense and the desire to reduce emissions, it's

23 like, why do we have to be here? Why weren't you doing

24 it beforehand and why weren't you making money off of

25 it? So I kind of have to ask myself, if they really
Page 18

1 want to reduce emissions, what the heck does it take

2 you guys having to come here and hear this kind of

3 thing.

4 I heard an interesting statistic from a

5 former EPA employee the other day that your own study

6 of the benefits of the Clean Air Act and what that's

7 done is something like 116 times the cost benefit

8 ratio -- in other words, the benefits outweighed the

9 costs, 280 billion in -- in saved lives in productivity

10 versus 2.4 billion in costs of compliance, and you

11 probably know that study better than I do.

12 So gentlemen I ask you, please, no more

13 delays. You're hearing from a citizen. Thank you

14 again for the time to come here and talk to you, and

15 I'll sadly drive my internal combustion engine back to

16 Grapevine.

17 MR. THOMPSON: Thank you for your

18 testimony, Mr. Rath. Are there any clarifying

19 questions for Mr. Rath?

20 MR. MOORE: Do you have any -- do you

21 have any oil and gas facilities near your home? Unless

22 I missed this in your testimony.

23 MR. RATH: Grapevine has several wells.

24 At least one of the producers is Chesapeake. I'm

25 thinking we have two active wells at this point. I
Page 19

1 could be off one or two, and we've got more permitted.

2 MR. MOORE: Thank you.

3 MR. THOMPSON: Any additional questions?

4 Mr. Applekamp.

5 MR. APPLEKAMP: Thank you. On behalf of

6 the gas Gas Processors Association, GPA, I appreciate

7 this opportunity to speak to you regarding the proposed

8 rulemaking entitled, Oil and Natural Gas Sector: New

9 Performance Standards and National Emissions Standards

10 for Hazardous Air Pollutants Reviews.

11 GPA is a nonprofit trade organization

12 made up of approximately 130 corporate members, all of

13 whom are engaged in the processing of natural gas or in

14 the manufacture, transportation or further processing

15 of natural gas liquids. GPA's membership accounts for

16 approximately 92 percent of all natural gas liquids

17 produced by the midstream energy sector in the United

18 States.

19 Our members also produce, gather,

20 transmit and market natural gas and natural gas

21 liquids. Safely bringing clean-burning natural gas

22 from producers to U.S. consumers has always been one of

23 the highest priorities of GPA-member companies. The

24 vast supply of natural gas and natural gas liquids is

25 one of our country's greatest assets. Increased
Page 20

1 production and use of natural gas will help reduce our

2 country's dependence on foreign oil and keep billions

3 of dollars each year at home in the United States.

4 Therefore, we urge the EPA to be

5 thoughtful and use caution in this rulemaking, ensuring

6 the rules are streamlined, reasonable and do not impede

7 the production, processing and transportation of

8 natural gas to U.S. consumers. In that regard, we have

9 only a few short comments to make at this time.

10 We commend the EPA for the hard work that

11 has led to the proposed NSPS Subpart quad O so far.

12 Our members feel that the proposed new NSPS is a

13 reasonable start from which we can build a final rule

14 that meets the EPA objectives and, provided adequate

15 time, would not unnecessarily burden the industry.

16 GPA respectfully requests an extension of

17 the comment period to December 30th, 2011, to allow

18 adequate time for a thorough review of the multiple

19 changes contained in the proposed rulemaking. GPA

20 feels an extension of time is justified based on the

21 significant expansion of the regulatory requirements in

22 the proposed rulemaking that would cover a variety of

23 emission units that have not previously been addressed

24 by these standards.

25 In order to provide meaningful comments,
Page 21

1 GPA and other stakeholders need a reasonable amount of

2 time to review and verify EPA's data, as well as to

3 collect information that could prove useful in the

4 rulemaking process. Given the scope and complexity of

5 the proposed rulemaking and the anticipated burdens it

6 will place on the oil and gas -- and gas sector,

7 particularly small operators, GPA submits that an

8 additional 60 days for this comment period is

9 reasonable and appropriate.

10 GPA also requests that the EPA seek an

11 extension of the February 28th, 2012, consent

12 decree deadline for finalization of the rule. It seems

13 unlikely that EPA can complete a thoughtful review and

14 response to comments before the current consent decree

15 deadline. For example, if the OMB interagency process

16 requires 90 days for review, which would have to start

17 December 1st, assuming the February 28th, 2012

18 deadline, then the EPA would have about one month from

19 the current October 29th comment submittal deadline in

20 which to review, analyze and give thoughtful

21 consideration to the anticipated high number of

22 comments.

23 GPA suggests that the EPA seek a full

24 year extension to February 28th, 2013, for finalization

25 of this rule. GPA members have also specific concerns
Page 22

1 relative to the copious number of requirements for

2 notifications, monitoring, recordkeeping and reporting

3 that will apply to thousands of small and insignificant

4 sources under this new rule. We do not believe that

5 EPA has adequately considered the substantial effort

6 and expenditure required to meet the ongoing paperwork

7 requirements of the new rule.

8 In that regard, GPA asks for EPA's

9 consideration and help in rectifying specific concerns

10 that, left unresolved, will place substantial burdens

11 on our industry without an associated and justified

12 environmental benefit. GPA has established a work

13 group within our environmental committee that is

14 reviewing the proposed rulemaking and developing

15 specific and detailed written comments that we will

16 submit to the EPA. Our comments can be more meaningful

17 to the rulemaking process if EPA provides the comment

18 deadline extension requested.

19 GPA appreciates your consideration of our

20 concerns and we look forward to working with the EPA to

21 address these and future comments and discussions.

22 Thank you.

23 MR. THOMPSON: Thank you, Mr. Applekamp.

24 Any clarifying questions for Mr. Applekamp?

25 Mr. Rath, Mr. Applekamp, thank you both
Page 23

1 for your testimony.

2 Would Craig Brown and Teddy Carter please

3 come forward. Craig Brown and Teddy Carter.

4 Good morning, gentlemen.

5 MR. BROWN: Good morning.

6 MR. CARTER: Good morning.

7 MR. THOMPSON: Would you please state and

8 spell your name for the court reporter, please.

9 MR. BROWN: My name is Craig Brown,

10 C-r-a-i-g B-r-o-w-n.

11 MR. THOMPSON: Thank you, sir.

12 MR. BROWN: Good morning. My name is

13 Craig Brown and I'm from QEP Resources. Today I'm

14 offering comments on behalf of America's Natural Gas

15 Alliance, ANGA, a trade association dedicated to

16 increasing understanding of the environment, economic

17 and national security benefits of clean, abundant,

18 dependable and efficient North American natural gas.

19 ANGA's 31 members include North America's largest

20 independent natural gas exploration and production

21 companies, the leading developers of the shale clays

22 that are transforming the clean energy landscape and

23 allowing communities across the country to advance

24 economically, creates stable jobs, staying competitive

25 locally and embrace a cleaner environment. We need
Page 24

1 reliable energy to meet our growing needs. We need

2 clean energy to protect our environment. Natural gas

3 bridges both of these needs while providing us energy

4 security and domestic jobs.

5 Discovery of U.S. shale clays combined

6 with advances in drilling technology have resulted in

7 game-changing projections of our supply of affordable

8 domestic natural gas. Respected academics, government

9 agencies and expert bodies from the Energy Information

10 Agency to MIT to the National Petroleum Council are all

11 coming to the same conclusion. We have abundant

12 domestic supplies of economically-recoverable natural

13 gas to power our nation for generations to come.

14 We see a growing role for natural gas in

15 the nation's energy mix, in particular, because of the

16 environmental advantages of its uses, power generation

17 and transportation fuel. When used to generate

18 electricity, natural gas burns cleaner than many other

19 fuel sources, virtually eliminating SO2, particulate

20 and mercury emissions and significantly reducing NOx

21 emissions.

22 Vehicles running on natural gas also

23 emit -- emit significantly less NOx, VOCs and

24 particulate matter than vehicles running on gasoline or

25 diesel. The natural gas community is keenly aware that
Page 25

1 with the opportunities presented by North America's

2 vast supplies of natural gas comes a responsibility to

3 be dedicated environmental stewards.

4 We firmly believe that people do not have

5 to choose between protecting their natural resources

6 and reaping the benefit of this abundant energy source.

7 To that end, we hope to work with the EPA to ensure

8 these regulations protect the environment in a manner

9 that is consistent with our commitment to a safe,

10 responsible development without adding unnecessary

11 burden that would impede our nation's ability to take

12 full advantage of the tremendous potential of American

13 natural gas. ANGA intends to submit detailed written

14 comments to the agency, and we hope to have a continued

15 dialogue with the agency as it develops a final

16 rulemaking.

17 In the meantime, we offer the following

18 thoughts on the proposed requirements: In the natural

19 gas production process, we are already -- there are

20 already significant incentives in place for operators

21 to reduce air emissions. Lost emissions equate to lost

22 revenues as we strive to be cost effective in capturing

23 as much sellable gas as possible. It is important that

24 the new standards recognize these existing incentives.

25 To that end, we encourage the Agency to ensure the
Page 26

1 standards continue to allow appropriate consideration

2 of safety as well as engineering judgment, particularly

3 with respect to reduced emission completions. We

4 require -- where requirements are prescriptive, such as

5 those that require installation of a particular piece

6 of equipment or maintenance on a particular time frame,

7 we encourage the agency to ensure that compliant

8 technologies or equipment exists and that operators be

9 given the flexibility with respect to prescribed

10 schedules if there is no need from an emissions

11 standpoint to undertake an activity at a particular

12 time.

13 In the instances where we believe the

14 requirements are largely captured, existing good

15 operating practices because of these incentives

16 mentioned above. We encourage the agency to recognize

17 that and to avoid unnecessarily and overly-burdensome

18 recordkeeping recording -- requirements.

19 Finally, we look forward to discussing

20 the -- further the agency's regulatory impact analysis.

21 We believe a better understanding of existing operating

22 practices will help the agency produce a more accurate

23 cost benefit estimate associated with rulemaking.

24 Again, ANGA and its member companies appreciate the

25 opportunity to comment here today. We look forward to
Page 27

1 working with the Agency to ensure the dual goals of

2 resource development and environmental protection are

3 met so that Americans continue to benefit from the

4 development of our vast domestic natural gas resources.

5 Thank you.

6 MR. THOMPSON: Thank you, Mr. Brown. Any

7 clarifying questions for Mr. Brown? Mr. Carter.

8 MR. CARTER: Hi. My name is Teddy

9 Carter, T-e-d-d-y C-a-r-t-e-r, and I'm here today to

10 speak on behalf of the Texas Independent Producers and

11 Royalty Owners Association, also known as TIPRO. TIPRO

12 is comprised of over 2,300 members, including small

13 family-owned companies, largest -- largest publicly

14 traded independence and large and small mineral estates

15 and trusts.

16 Let me first state, TIPRO and its member

17 companies are in favor of clean air. People in the oil

18 and gas industry live and work around their facilities

19 and they want to protect the air that their families

20 breathe just as much or more than the EPA does. The

21 new regulations, particularly in this current economy,

22 must be reasonable and based on sound science.

23 Oil and gas producers operate like any

24 other business. All business owners will tell you that

25 when all is said and done, they're in business to turn
Page 28

1 a profit. Profitability allows businesses to reinvest

2 capital to grow their business, retain and reward their

3 current employees and hire new employees to grow their

4 work force. There are approximately 5,000 oil and gas

5 well operators in Texas, many of them small

6 independents with limited capital resources.

7 These operators work hard at maintaining

8 a positive bottom line and that includes examining and

9 implementing every possible scenario by which they may

10 invest in new technology, equipment or strategies to

11 improve profitability. Green completions are strategy

12 recommended by EPA and often evaluated by operators.

13 The EPA is correct. It makes economic sense to perform

14 these types of completions where possible because it

15 results in greater quantities of saleable product. For

16 this reason, many operators will opt for green

17 completions when circumstances permit. However, a lack

18 of readily available gathering lines often prohibits

19 them from performing one and the alternative practice

20 of flaring is oft -- is also often prohibited due to

21 municipal flaring restrictions. Again, TIPRO's in

22 favor of clean air, but we believe that one size does

23 not fit all with regard to which wells should have

24 green completions performed on them and the practice

25 should continue to be encouraged but not mandated.
Page 29

1 Secondly, EPA's residual risk review

2 found that the current maximum individual cancer risk

3 from oil and natural gas production is 40 in 1 million,

4 which falls within the -- a range the EPA considers

5 acceptable. The Agency's residual risk review of air

6 toxic standards for natural gas transmission and

7 storage is 90 in 1 million, also a level which EPA

8 finds acceptable.

9 The dictionary defines the word

10 acceptable as able to be agreed on, suitable, adequate,

11 satisfactory, pleasing or welcome. If the risk as it

12 exists today is acceptable, then why pass regulations

13 that will needlessly harm businesses and jobs. TIPRO

14 believes that a primary reason standards are reviewed

15 periodically is so that agencies need not try to

16 regulate based on every scenario they can imagine.

17 When the average American leaves for

18 work, they know that any number of scenarios could

19 happen that may cause them harm. A meteor could fall

20 from the sky. They might be attacked by animals

21 escaped from the zoo and they -- it's possible they

22 could get hit by lightning. But the mere existence of

23 these possibilities is not sufficient reason to stay

24 home from work. Instead, people take action to reduce

25 risk to acceptable levels. They look both ways before
Page 30

1 they cross the street. They wear their seat belts.

2 They hold firmly to that strap on the subway.

3 Regulation should be based on actual

4 facts and evidence, not theories or projections. If

5 current evidence shows that risk from oil and gas is

6 acceptable, then no additional regulation should be

7 required until the next review period. Regulation for

8 regulation's sake is a dangerous path that can

9 potentially cause greater harm than good, and TIPRO

10 urges the EPA not to present solutions to problems that

11 do not currently exist.

12 Finally, this proposed rule package is

13 extremely complicated and will require very extensive

14 technical and economic review in order for stakeholders

15 to properly address the operational and cost

16 consequences that will arise as a result of the

17 rulemaking. Many TIPRO members are small businesses

18 that do not have in-house staff with proper knowledge

19 or expertise to conduct such a comprehensive review.

20 The very short 60-day time frame for review and

21 comment, even with the pre-publication version of the

22 rule available will pose a significant hardship to

23 TIPRO members. EPA's proposed timeline with the final

24 action date mandated by February 2012 will not allow

25 for TIPRO members to prepare to implement the rules and
Page 31

1 could, therefor, place TIPRO members in the untenable

2 position of operating out of compliance as well as

3 causing economic hardship because these businesses will

4 not have had the opportunity to prepare to incorporate

5 the cost of the rule requirements into their operating

6 budgets.

7 The Railroad Commission of Texas has

8 unparalleled knowledge of the oil and gas industry.

9 The Texas Commission on Environmental Quality has

10 successfully reduced harmful emissions at a greater

11 rate than any other state in the country. Together,

12 these agencies continue to ensure compliance and

13 provide proper oversight based on verifiable science.

14 And although the EPA is well-intentioned, TIPRO

15 believes that regulation of oil and gas operations in

16 Texas should reside at the state level.

17 However, if this rule package is going to

18 continue to move forward regardless of that fact, then

19 TIPRO --

20 MR. THOMPSON: Mr. Carter, I'm sorry.

21 Your time has expired. You're more than welcome to

22 submit the remainder of your written comments.

23 Are there any clarifying questions for

24 Mr. Carter?

25 MR. CARTER: My last statement was just
Page 32

1 requesting more time and I'll submit that.

2 MR. THOMPSON: Thank you, sir. Thank

3 you, gentlemen. Would Bill Stevens and Angie

4 Burckhalter please come forward.

5 Good morning. Would you please state

6 your names and spell them for our court reporter,

7 please, starting with Mr. Stevens.

8 MR. STEVENS: My name is Bill Stevens,

9 S-t-e-v-e-n-s.

10 MS. BURCKHALTER: Angie Burckhalter,

11 B-u-r-c-k-h-a-l-t-e-r.

12 MR. THOMPSON: Okay, thank you.

13 Mr. Stevens, please.

14 MR. STEVENS: We've had -- thank you very

15 much and I am Bill Stevens. I am a government affairs

16 consultant for the Texas Alliance of Energy Producers.

17 We are an oil -- Texas oil and gas trade association

18 with about 3,400 members across the State of Texas.

19 About 70 percent of our membership have fewer than ten

20 employees in their companies. So it is truly the small

21 business men and women of Texas that are in the oil and

22 gas business. And I won't repeat a lot of what has

23 already been said by two or three of the industry

24 representatives ahead of me, but I came here also today

25 to ask for an extension on this. You should have
Page 33

1 received a letter from us. If not, it's en route

2 asking for a six-month extension on these rules. And

3 again, as Teddy Carter said, the current time schedule

4 that we see, I think that many of our small producers

5 will be -- will be out of compliance maybe -- well,

6 they will be out of compliance without even knowing so.

7 There's a long education process.

8 We've just been through a nearly

9 year-long rulemaking with TCEQ, which promulgated a new

10 PBR and standard permit. And I'm seeing in our

11 producer community that the education, particularly the

12 small corporations, who again have no staff for this

13 type of thing, who have not been involved in -- in air

14 permitting in the past, that there is a -- there's a

15 time lag there and we're working on that and happy to

16 do so. But let's keep -- let's stay in compliance.

17 We're working to clean up the -- to clean up the air in

18 this industry, doing better and better.

19 I would like to -- and I will -- in our

20 comments, whether we get another -- another 30 days or

21 another six months, we will submit technical comments

22 to you and, again, happy to do so. But when we talk

23 about green completions, the industry is moving that

24 direction. And it is often not -- not even possible to

25 do some of the things that -- that you require. I
Page 34

1 would say that in your overview, I believe that you

2 overstated the benefits of the green com -- the dollar

3 benefits of green completions and understated the cost.

4 And oftentimes, there is not infrastructure available.

5 And when we talk about another alternative of flaring,

6 that is also not an option, whether it's through

7 municipal ordinance -- we have a ban burn in Texas and

8 many, many places. And I don't think that a pit flare

9 or any type of flare is warranted today in some of

10 the -- in some of the areas where we're drilling. I

11 just don't think you want to do that and there is a

12 ban -- a burn ban.

13 So it's not -- it's not always -- always

14 possible and we're obviously trying to -- trying to

15 accomplish what you want there voluntarily. The tank

16 emissions and flash emissions, we've been through that

17 with TCEQ and we've been working on that. But I would

18 say to you that requiring a closed system on many, many

19 of the small wells, the small locations that you're

20 talking about, is inordinately onerous. A one barrel

21 per day condensate level in any one tank, there needs

22 to be a much higher minimum standard than that. I will

23 say that the 20 barrels of crude oil is possibly

24 reachable, but it is -- again, I don't believe -- I

25 think that should be raised. I don't believe that
Page 35

1 you're going to find the emissions factors there that

2 you want.

3 We have -- and again -- and I'm not

4 trying to mix agencies. I understand your mission, but

5 we've been through this in the last year of trying to

6 educate our Barnett shale producers and seeing that.

7 But we have the difference with one rule with one PBR

8 and one standard permit. We have the difference in

9 population density from Tarrant County at 2,500 people

10 per square mile to Shackelford County with less than 2

11 people per square mile with wells that are making an

12 average of 250 to 400 MCF a day to wells that are

13 producing associated gas at 3 MCF per day. And -- so

14 the one size does not fit all. These are the types of

15 things we would like to present to you in a more

16 detailed comment.

17 Pneumatic controllers, another -- another

18 area. Again, other people have talked about control

19 equipment. Pneumatic controllers where you're wanting

20 a guarantee of 6 M -- lead rate of 6 MCF per day or

21 less, the manufacturers will not guarantee that.

22 MR. THOMPSON: Mr. Stevens, I'm sorry.

23 Your time has expired.

24 MR. STEVENS: Okay. Thank you very much.

25 I appreciate it and happy to be here with you.
Page 36

1 MR. THOMPSON: Thank you, sir.

2 Ms. Burckhalter, please.

3 MS. BURCKHALTER: My name is Angie

4 Burckhalter, and I represent the Oklahoma Independent

5 Petroleum Association in Oklahoma City. OIPA has

6 approximately 2,100 small to large independent crude

7 oil and natural gas producers in Oklahoma that will be

8 significantly impacted by the proposed rules. We

9 appreciate the opportunity to be here today and we

10 submit the following comments.

11 Many oil and gas operators in Oklahoma

12 are small businesses. That's already been stated a

13 number of times this morning. They are v -- these

14 small companies are ill-equipped to be able to bear the

15 cost burdens of more and more air regulations. Over

16 the past three years, EPA alone has come out with

17 significant rules that have impacted our membership.

18 For example, the engine rules and the greenhouse gas

19 reporting rules.

20 Many small businesses that operate

21 production facilities have limited staff.

22 Forty-six percent of OIPA's members have less than 19

23 employees. Their tolerance for more complex and costly

24 regulations is significantly different and is

25 significantly less than as compared to the larger
Page 37

1 companies. These truly are small businesses that are

2 struggling to stay in business. Oil and gas

3 facilities, very significantly across the country, as

4 you know, there's drastic differences between the

5 fluids and the gases produced, the volumes that are

6 produced initially, the production volume drop-offs

7 rates. The economics of each well vary. So there's a

8 number of variabilities that EPA needs to consider.

9 The proposed regulations do not provide the flexibility

10 to address these different issues or the different

11 sectors of our industry, nor does it address the costly

12 and burdensome issues for small businesses.

13 For example, the EPA proposed an

14 overwhelming amount of information be submitted, for

15 example, your initial and subsequent notifications,

16 your reporting -- your annual reporting requirements,

17 your monitoring, your testing data, your recordkeeping.

18 It goes on and on and on. The types of requirements

19 will be onerous for the large companies, but it will be

20 significant for the smaller companies. The small

21 companies don't have EHS data -- data management

22 systems in place for the staff to address these issues.

23 EPA proposes to use an electronic

24 database or a third party compliance. Instead, we

25 request EPA re-evaluate the need for all of this
Page 38

1 information. Greatly simplify and streamline the

2 various notices, recordkeeping, monitoring, all that

3 data that I just mentioned and try to implement

4 something more in the area of a general duty clause

5 allowing operators to just collect data and keep the

6 records and, if needed or requested, they can submit

7 those.

8 Another area that's problematic for small

9 operators, compliance deadlines. They won't be able to

10 meet -- meet the Federal Register Publication

11 compliance date. They need time to fully understand

12 the rules. They need to be able to program funding.

13 They need to be able to either train their staff or

14 hire consultants, establish procedures and protocols to

15 comply, purchase or rent the equipment. Our members

16 are greatly concerned that they're going to have to

17 complete with the larger operators for the consultants

18 and the equipment. As you know, once the demand goes

19 up, the supply goes down and the costs increase.

20 That's pretty basic economics.

21 So, therefore, we request an 18-month

22 delay in the compliance requirements, specifically

23 regarding production sites. EPA's NESHAP requirements

24 have become so technical that only a person with

25 significant knowledge and experience can really
Page 39

1 understand those. Even someone who's very

2 sophisticated that's done air for many years has issues

3 with those MACT requirements. We're very concerned

4 that the small operators will be struggling to figure

5 out those rules and comply.

6 I see my time is getting short. Also,

7 it's imperative that EPA, once they finalize the rule,

8 develops useful tools that can be implemented that

9 operators can determine applicability, figure out how

10 to comply. That would be tables, fax sheets, webinars,

11 various flowcharts, things like that, that would help

12 our members better understand the rule and how to

13 comply. We request a 60-day extension to the comment

14 period to allow the smaller operators more time to

15 review and evaluate the rule. And also, we would

16 greatly appreciate specific consideration to production

17 operations and the smaller operators. That's all I

18 have. I appreciate your time.

19 MR. THOMPSON: Thank you, Ms.

20 Burckhalter. Any clarifying questions? One question,

21 please. A question to start.

22 MR. MOORE: Actually, this is for both of

23 you, but Angie answered part of it already. Most of

24 you brought up the fact that you have a lot of smaller

25 operators out there that are not as sophisticated as a
Page 40

1 lot of the larger companies may be. What I would like

2 to ask you -- and you can provide this later in your

3 written comments to give you more time to think about

4 it -- would be suggestions in addition to those that

5 Angie has already listed for what EPA can do to help

6 the smaller operators understand what the requirements

7 are before they get into place so they'll know what

8 they're required to do before they're required to do

9 it. And we su -- we would like your suggestions on

10 types of things we could do to help that be done.

11 MS. BURCKHALTER: We'll be happy to

12 submit our comments in writing, but we'll have detailed

13 comments by the comment deadline. Bill, go ahead if

14 you want.

15 MR. STEVENS: I just appreciate you

16 asking that question, and that's something that -- I

17 think that we can work together -- together on and

18 particularly -- and through Region 6. Closer to home

19 is always better. And have a good -- good staff at

20 Region 6 to help us with that. As we look forward,

21 I've always thought that, you know, there's not a lot

22 of difference sometimes between -- between production

23 sites. And -- and proving up every production site is

24 not always necessary. There can be forms and/or

25 methods through reporting to EPA -- it can be so simple
Page 41

1 if it's this configuration, if this pressure, this

2 volume, this is the controller, then there's not really

3 anything for you to do other than, you know, to verify

4 those facts and send them to you because you're going

5 to know very, very closely what the potential to emit

6 will be or any -- any potential for degradation.

7 MR. THOMPSON: Any additional question?

8 MS. BURCKHALTER: Just one quick

9 suggestion. You know, screening tools, I know in your

10 greenhouse gas reporting rule, you have an

11 applicability tool on the website. Though our

12 operators try to use that, they can't. It's not usable

13 tool for them. So we need something more specific that

14 is more reasonable. And probably in that, you know,

15 y'all were trying to be conservative whenever you

16 developed this rule, but it needs to be more reasonable

17 and useful because I'm getting calls all the time from

18 operators saying, you know, I can't even find anything

19 to use as -- you know, even telling me I need to do

20 more detailed calculations. So anything like that

21 would be very helpful.

22 MR. THOMPSON: Thank you both for your

23 testimony. Thank you very much.

24 Ed Ireland and Thomas Sullivan, please

25 come forward. Ed Ireland and Thomas Sullivan. Good
Page 42

1 morning, gentlemen.

2 MR. IRELAND: Good morning.

3 MR. THOMPSON: Could you please state

4 your names and spell for the court reporter, please,

5 starting with Mr. Ireland.

6 MR. IRELAND: It's Ed Ireland. That's

7 E-d and I-r-e-l-a-n-d.

8 MR. SULLIVAN: Thomas Sullivan,

9 T-h-o-m-a-s S-u-l-l-i-v-a-n.

10 MR. THOMPSON: Thank you. Mr. Ireland,

11 please.

12 MR. IRELAND: Good morning.

13 MR. THOMPSON: Good morning.

14 MR. IRELAND: I'm Ed Ireland, the

15 executive director of the Barnett Shale Energy

16 Education Counsel, which is a nonprofit educational

17 organization that focuses on energy education as

18 related to the Barnett Shale region in North Texas.

19 BSEEC members are committed to responsible principles

20 and operations in the development of the clean burning

21 natural gas in the Barnett Shale. I would like to

22 focus on two points regarding the proposed New Source

23 Performance Standards or NSPS rules.

24 First, a one-size-fits-all approach to

25 regulating VOC emissions from natural gas wells is not
Page 43

1 appropriate because VOC emissions vary widely due to

2 geologic factors and operating conditions. For

3 example, the dry gas areas in the Barnett Shale have

4 very low VOC emissions. This also suggests that it is

5 not appropriate for the EPA to use natural gas

6 emissions as a surrogate for VOC emissions.

7 Second, to propose NSPS rules for the oil

8 and gas natural gas -- oil and natural gas sector are

9 so extensive and complex and the comment period so

10 short that the EPA should extend the comment period and

11 delay implementation of the rules until sufficient

12 review is performed and comments can be made.

13 Regarding VOC emissions from Barnett Shale natural gas

14 wells, the TCEQ recently released data collected from

15 their phase two special inventory in which operators

16 were required to report the actual VOC, NOx and HAP

17 emissions from all 49,021 pieces of equipment listed in

18 their phase one inventory. These data revealed that

19 the TCEQ significantly overestimated VOC emissions from

20 Barnett Shale natural gas wells in its state

21 implementation plan for the nine county D/FW

22 nonattainment area.

23 TCEQ's phase two emissions data show that

24 VOC emissions in the nine county area of the Barnett

25 Shale were actually 23.2 tons per day compared to the
Page 44

1 TCEQ's SIP estimate of 101.8 tons per day. Even

2 allowing for a modest growth in the number of wells in

3 operation between 2009 and 2010, it's obvious that TCEQ

4 has been overestimating VOC emissions by many orders of

5 magnitude.

6 One basis for the overestimation of VOC

7 appears to be the assumption that substantial amounts

8 of VOC emissions are omitted from condensate storage

9 tanks. TCEQ has cited certain studies and findings in

10 support of its assumption as to the level of VOC

11 emissions from condensate storage tanks. As explained

12 in the attachments to my testimony, which I supplied to

13 your staff, the basis for this assumption rests solely

14 on the HARC H51C VOC flash emissions factor of

15 33 pounds per barrel. As detailed in my written

16 comments, this emissions factor is based on faulty data

17 and was applied by TCEQ to its SIP rulemaking for all

18 condensate production regardless of the differences in

19 VOC content of the flash gas and operating conditions.

20 The recent City of Fort Worth ERG study

21 provides additional evidence that prior estimates,

22 including the January 26, 2009 Armendariz report, have

23 overestimated VOC emissions from the oil and gas

24 sector. Unfortunately, the faulty 33 pounds per barrel

25 emissions factor from these studies has reappeared in
Page 45

1 this EPA rulemaking and appears to underlie the EPA's

2 VOC calculations on which subpart quad O is based.

3 In summary, the EPA should recognize that

4 a one-size-fits-all regulatory approach to regulating

5 VOC from natural gas wells is not appropriate because

6 such emissions vary widely depending on geologic

7 factors and operating conditions. This also suggests

8 it is not appropriate for the EPA to use natural gas

9 emissions as a surrogate for VOC emissions. Since both

10 TCEQ and EPA have overestimated VOC emissions, the cost

11 of the proposed NSPS rules may be underestimated and

12 the benefits overestimated.

13 The EPA needs to be encouraging, not

14 discouraging the development of clean-burning natural

15 gas. This was highlighted in a study released this

16 week by well-known economist, Dr. Ray Perryman, that

17 noted the huge economic benefits and jobs that Barnett

18 Shale activity is providing to North Texas and the

19 entire State of Texas. The EPA should proceed with

20 caution so as not to damage this powerful economic

21 engine unnecessarily.

22 Finally, the EPA needs to provide more

23 time for --

24 MR. THOMPSON: Mr. Ireland --

25 MR. IRELAND: -- companies to review --
Page 46

1 MR. THOMPSON: -- I'm sorry. Your time

2 has expired.

3 MR. IRELAND: Thank you.

4 MR. THOMPSON: Thank you. I have a

5 question for you, Mr. Ireland. The 2009

6 Armendero (phonetic) report I think you referenced --

7 MR. IRELAND: Yes.

8 MR. THOMPSON: January 26th, 2009 report.

9 My question for you is, is that referenced in your

10 written comments that you've submitted to us?

11 MR. IRELAND: Yes, it is.

12 MR. THOMPSON: Okay. Thanks. Thank you.

13 Mr. Sullivan.

14 MR. SULLIVAN: My name is Thomas

15 Sullivan. I'm with Zephyr Environmental here today

16 speaking on behalf of the Texas Oil and Gas

17 Association. TXOGA is the largest and oldest petroleum

18 organization in Texas representing over 4,000 members.

19 That includes production of over 90 percent of Texas

20 crude oil and natural gas and operates over nearly a

21 hundred percent of the state's refining capacity.

22 The oil and gas industry in Texas

23 directly employs over 297,000 people in Texas and

24 indirectly supports millions of additional jobs. So

25 that's -- that's a scope of what your rule is going to
Page 47

1 affect at this point in time. According to the

2 Railroad Commission, the Texas rig count as of

3 September 26th was 898, representing nearly 46 percent

4 of the active land rigs in the United States. And

5 statewide, over 9,400 wells were drilled in 2010. So

6 there's -- this rule disproportionately impacts Texas

7 versus the rest of the country.

8 Texas holds nearly 24 percent of the

9 domestic crude reserves and 32 percent of the domestic

10 natural gas preserves and is currently providing

11 27 percent of the onshore crude production and

12 32 percent of the onshore natural gas production. This

13 is more than any other state. As it's been said

14 before, and I think everyone's aware, all production is

15 not the same. The variety of reservoirs, the different

16 types of wells, the variable number and size of sites,

17 different types of operation, the different ages of

18 these wells and production facilities and the variable

19 capability of the operators all makes a

20 one-size-fits-all rule very difficult to implement and

21 to comply with.

22 One of the things that has been mentioned

23 in part and I'd like to discuss some more is the way

24 that -- excuse me -- operators typically have many

25 different contractors doing work and have different
Page 48

1 responsibilities for their operations. This makes

2 compliance with -- with the different sections of the

3 rule very difficult and it also means that a lot of the

4 people who were going to be required to do actions

5 under this -- to comply with the rule are not present

6 here and they aren't necessarily represented in this --

7 in this process. And that's one of the reasons why

8 we've requested an extension on the comment periods, so

9 that we can deal with -- can get the word out to the

10 vendors, to the contractors and get their comments

11 back. Because compliance is not going to be just, does

12 Exxon Mobil know about this rule, it's do the

13 operators, do their contractors know about this rule.

14 You're talking about thousands and thousands of

15 companies that all have to be educated and all have to

16 understand their role in this new -- in this new rule.

17 So I think that both from a comment

18 extension and for a compliance extension, that's --

19 that requires some consideration. Now, it's been said

20 before, the proposed rules, we have serious concerns

21 about the recordkeeping burdens and the control

22 requirements. We'll provide additional technical

23 comments within the -- this current submittal deadline

24 but we would like more time to be able to address all

25 the technical issues within these rules.
Page 49

1 Let's see. One additional comment I'd

2 like to make is in regards to D/FW and how over the

3 past ten years, the air quality in the D/FW area has

4 shown improvement from the existing ozone monitoring.

5 And that's over a time period where the well count has

6 gone from 700 in 2000, wells, to over 13,000 wells in

7 2009. We've seen the ozone -- excuse me --

8 exceedences (phonetic) in the high days decrease over

9 that same period and at the same time that D/FW has had

10 added 4 million people in population. So we are doing

11 things right. I think that tying the results back to

12 what we're actually seeing on the ground is important.

13 But thank you for your time.

14 MR. THOMPSON: Thank you. Just one

15 question. What kind of comment extension are you --

16 MR. SULLIVAN: At this point in time, I

17 believe we've asked for 60 days extension.

18 MR. THOMPSON: Sixty days.

19 MR. SULLIVAN: We have sent in a letter

20 requesting that.

21 MR. THOMPSON: Any clarifying questions,

22 gentlemen? Thank you both for your testimony. Thank

23 you.

24 Would Frederick Lopez and representative

25 Lon Burnam please come forward. Good morning,
Page 50

1 gentlemen.

2 MR. LOPEZ: Hi, good morning.

3 MR. THOMPSON: Could you please pronounce

4 your names and spell for our court reporter.

5 MR. LOPEZ: Frederick Lopez,

6 F-r-e-d-e-r-i-c-k L-o-p-e-z.

7 MR. THOMPSON: Thank you. State your

8 name and spell for the court reporter, please.

9 MR. BURNAM: I'm State Representative

10 Lon, L-o-n, Burnam, B-u-r-n-a-m, from Fort Worth.

11 MR. THOMPSON: Thank you both.

12 Mr. Lopez, please begin testimony.

13 MR. LOPEZ: Thank you for this

14 opportunity to speak to you. Good morning. The

15 American Lung Association supports the protection of

16 all people from harm of pollu -- of air pollution,

17 especially those who suffer disproportionate exposure

18 from local sources of emission. We recognize that

19 energy and transportation sources of air pollution are

20 often located near where many people, especially

21 communities of color, and lower income live and work.

22 We recognize that many factors have contributed to

23 disproportionate levels of exposure in these

24 communities, including missing or weak limits on

25 emissions, poor enforcement of existing regulations,
Page 51

1 inadequate monitoring of pollution and limited

2 scientific research.

3 Therefore, we support regular, thorough

4 assessments of the impacts to nearby communities from

5 sources of dangerous air pollution, including highways,

6 industrial boilers, power plants and other sources of

7 air pollution. Organization is fighting every day for

8 a day when we can all breathe easier. Our over-arching

9 call is for the implemation (sic) of effective air

10 quality programs and standards as we transition to a

11 cleaner energy future with a commitment of

12 environmental justice.

13 It is also important that, as we discuss

14 natural gas drilling, we mention the importance of

15 domestic production of shale gas to reduce point source

16 and mobile (phonetic) source pollution. We are

17 concerned with toxic air emissions coming from

18 coal-fired power plants in our state. Therefore, we

19 support the cleanup of coal-fired power plants with a

20 conversion of natural gas. As we pursue advancements

21 in renewable energy and build infrastructure to utilize

22 renewable energy sources, natural gas is a transition

23 fuel that burns cleaner than oil -- than coal.

24 In addition, the transportation sector in

25 the United States generates a significant share of the
Page 52

1 nation's air pollution, threatening the health and

2 lives of millions of people. We've been urging the

3 administration to issue a stronger national air quality

4 standard for ozone. However, the administration

5 decided to delay the decision for more protective

6 ozone national air quality standards until 2013.

7 Despite the EPA's efforts over the last

8 12 years -- over the last 2 years to strengthen the

9 standard. As we continue to push for stricter

10 standards, (unintelligible) areas in our nonattainment

11 transportation -- in our nonattainment areas,

12 transportation alternatives that are affordable and

13 viable for public vehicle use.

14 The American Lung Association supports

15 programs to reduce transportation energy use and to

16 provide greater transportation alternatives. Natural

17 gas is one tool in a toolbox of solutions to reduce the

18 exposure to mobile source air pollutions. It's

19 important that the benefits of natural gas in energy

20 production in vehicle use are not negated by the

21 extraction process and also the process of getting it

22 to the end user.

23 Therefore, we support the adoption of

24 best practices with the least operational impact and

25 the best environmental outcome. That's it.
Page 53

1 MR. THOMPSON: Thank you, Mr. Lopez. Any

2 clarifying questions for Mr. Lopez? Thank you.

3 Representative Burnam, please.

4 MR. BURNAM: Thank you, Mr. Thompson. I

5 stated earlier, I'm State Representative Lon Burnam

6 from Fort Worth, and it's been my honor to represent

7 the people of District 90 and the inner city district

8 in Fort Worth of -- now of about 160,000 people for the

9 last 15 years. But for the last 35 years, I've been

10 coming to public forums like this to try to clean up

11 the air here in North Texas. And today is particularly

12 unique because I am here primarily to praise the

13 efforts of the EPA, and you haven't seen a lot from

14 elected state officials here in Texas. But it's also

15 not unique in the context of, for that 35 years while

16 we have seen slow and incremental progress towards

17 cleaning up our air, we have heard a consistent line

18 that we've heard again today from the producers of the

19 air pollution. They also produce a really important

20 economic product. And my graduate degree is in

21 regional economic development. I understand the role

22 and the importance of the Barnett Shale and I'm really

23 kind of sick and tired of being sick and tired from

24 people talking about cost effectiveness and talking

25 about risk acceptableness at the cost of the children
Page 54

1 in my district.

2 You've heard the allusion to the Cook

3 Children's hospital study. I was one of those

4 asthmatic children. From the age of nine forward, I

5 was asking what is in the air that makes me so sick

6 that I can't play outside. One of the first witnesses

7 talked about the fact that in suburban Tarrant County,

8 we have kids that can't play basketball outside without

9 using their inhalers. The air has been steadily

10 cleaning up for 30 of those 35 years. But what we've

11 seen in the last five years with the development of the

12 ability to develop the Barnett Shale is increasing air

13 pollution problems. All of that said, as the angry

14 nine-year-old wondering why he can't play outdoor, now

15 I want to talk about some of the specifics and I'll

16 read my testimony.

17 I want to applaud you for posing these

18 common sense rules to reduce dangerous emission for

19 proliferating oil and gas facilities around the

20 country. These long overdue improvements to the New

21 Source Performance Standards will do what the Texas

22 legislature and state agencies that oversee oil and gas

23 production have failed to do.

24 There has been no leadership in Texas.

25 I'm on the environmental reg committee, the Texas House
Page 55

1 of Representatives, and I have offered several pieces

2 of legislation that address the specific issues that

3 your proposed rules propose, that with this situation

4 that we have in Texas with people consistently -- I

5 mean elected officials -- putting private profit over

6 public health, we have not been able to do what we need

7 to do. We need to protect public health by placing

8 reasonable limits on air pollution that will both

9 reduce emissions and increase industry revenue.

10 In fact, if they would do -- implement a

11 lot of the what you're talking about, in the longer

12 run, they would make a larger profit. But what we

13 always hear from the industry is short-term profits.

14 Let's talk about the first -- next quarter, not a year

15 from now, two years from -- three years from now.

16 I have a number of comments, and I

17 realize I'll probably run out of time. So let me

18 highlight them. First, I want to talk about green

19 completion, pneumatic control devices, storage tanks

20 and leak detection at gas processing plants. All of

21 those proposals are sound. Some of them need a little

22 bit of refinement.

23 While green completions are already

24 required by the City of Fort Worth gas drilling

25 ordinance, this rule will extend the requirement to the
Page 56

1 unincorporated areas in the many municipalities around

2 Tarrant County and the Barnett Shale that lack these

3 requirements. Requiring green completions to include

4 all gas wells in the Barnett Shale will significantly

5 reduce emissions in the D/FW nonattainment area.

6 I recommend that regardless of comments

7 provided today, the green completion requirement not be

8 limited to apply only to gas wells with certain VOC

9 content but rather to all hydraulically-fractured well

10 completions. With increasing production of oil Barnett

11 and other shale formations in Texas, the requirement

12 should be extended to include new and existing oil

13 wells that co-produce gas, instead of only applying to

14 gas wells.

15 With regards to pneumatic control

16 devices, requiring that new and replaced pneumatic

17 devices be, quote, no bleed or low bleed is an

18 important step. But the improved rules would have no

19 impact on emissions from the thousands of valves

20 already in operation in the Barnett Shale. The reason

21 four years ago I called for a moratorium on development

22 is because we knew the increasing hazards to health and

23 we knew that the industry was consistently and

24 constantly resisting appropriate regulation. We should

25 have had a moratorium.
Page 57

1 In one sense, we've let the cat out of

2 the bag or the horses out of the barn or we've opened

3 Pandora's box. We needed and should have had that

4 moratorium. That all we hear from industry is delay,

5 delay, delay while they maximize their profits in a

6 huge profit industry at the expense of public health.

7 Am I out of time?

8 MR. THOMPSON: Yes, sir, you are. Your

9 time has expired.

10 MR. BURNAM: Thank you. You can read

11 about storage tanks and leak detection of gas

12 processing in my submitted comments. Thank you for

13 your time.

14 MR. THOMPSON: Absolutely. Are there any

15 clarifying questions by either of these gentlemen?

16 Okay. Mr. Lopez and State Representative Burnam, thank

17 you for your testimony.

18 MR. BURNAM: Thank you.

19 MR. THOMPSON: Would Ramon Alvarez and

20 Darren Smith please come forward. Ramon Smith, please

21 come forward. And, again, if you would pronounce --

22 you do a whole lot better job of it than I am,

23 obviously -- and spell your name for our court

24 reporter. It'd be much appreciated.

25 MR. ALVAREZ: My name is Ramon Alvarez,
Page 58

1 R-a-m-o-n A-l-v-a-r-e-z.

2 MR. SMITH: My name is Darren Smith,

3 D-a-r-r-e-n S-m-i-t-h.

4 MR. THOMPSON: Thank you. And,

5 Mr. Alvarez, please begin your testimony.

6 MR. ALVAREZ: Good morning and welcome to

7 Texas, for most of you. My name is Ramon Alvarez. I'm

8 a scientist with Environmental Defense Fund in Austin.

9 We're a nonpartisan environmental organization with

10 more than 700,000 members nationwide.

11 Thanks for the opportunity to testify

12 today. The proposed rule for new national clean air

13 standards for the oil and gas industry represent a

14 critical step towards protecting public health and the

15 environment from harmful air contaminants. The

16 standards will not only reduce air pollution through

17 proven and highly cost-effective pollution controls but

18 avoid the needless waste of a valuable domestic energy

19 resource.

20 They will also standardize many common

21 sense practices and technologies that are already

22 implemented in states such as Colorado and Wyoming and

23 are already being used by many natural gas companies

24 throughout the country. Just a little bit of

25 background and then I have some specific comments.
Page 59

1 We all know that natural gas and oil

2 operations are expanding rapidly into new locations

3 across the country due to new technology developments

4 that allow the commercial extraction of previously

5 untapped unconventional resources. The lack of

6 national level emission standards poses a serious

7 threat to families and communities across the U.S.,

8 since exploration and production activities emit a

9 number of hazardous air pollutants and other airborne

10 contaminants known to negatively affect human health

11 and the environment.

12 For example, hazardous air pollutants

13 like benzine, a known human carcinogen, have been

14 detected near production sites in Texas and Colorado,

15 also wintertime ozone levels in remote parts of Wyoming

16 and Utah with little industrial activity except for oil

17 and gas have higher levels of ozone than other parts of

18 the country, the most heavily-polluted cities in the

19 country, in fact.

20 These air pollution problems coupled with

21 other concerns, such as the risks presented by

22 hydraulic fracturing, have led many to wonder whether

23 the trade-offs to increasing domestic gas production

24 are too steep. Adoption of this proposal will be a

25 vital step to reducing the health and environmental
Page 60

1 impact to the natural gas and oil industry. Simply

2 stated, there is real urgency for EPA to take this

3 action. We ask that you reject calls for delaying the

4 adoption or implementation of this package.

5 EDF supports EPA's proposal and

6 recommends it be strengthened. The proposal is an

7 important first step in securing cleaner air and more

8 efficient industry practices. It goes a long way

9 towards capturing the multiple benefit achievable to

10 the implementation of readily achievable

11 technologies -- readily available technologies and

12 practices. However, we believe the standards could be

13 strengthened. In particular, we are concerned that the

14 proposal fails to reduce emissions from many existing

15 sources.

16 As a result, these sources will continue

17 to contribute to unhealthy levels of air pollution for

18 years to come. EDF applauds EPA's efforts thus far,

19 but calls on the Agency to address existing sources in

20 order to achieve greater health and environmental

21 benefits and reduce waste of a valuable, natural

22 resource.

23 Second, national standards are needed to

24 protect families and communities in states like Texas

25 that have lagged behind in limiting emissions. All
Page 61

1 Americans, regardless of where they live, deserve the

2 same opportunity to breathe air free of pollution from

3 oil and gas activities. Texas recently updated its

4 permit requirements for oil and gas but failed to

5 require any specific controls. So Texans are deprived

6 of protections afforded to citizens of other states.

7 For example, Colorado and Wyoming require

8 reduced emission completions, as proposed by EPA.

9 However, Texas does not require any controls on well

10 emissions, nor does it even consider those emissions in

11 determining the applicability of permitting

12 requirements. Wyoming and Colorado require the use of

13 low and no-bleed pneumatics, the industry gold standard

14 in reducing emissions from another significant source

15 of air pollution. Texas has no such requirement.

16 Finally, the standards proposed by EPA

17 rely on proven technologies and practices. This is not

18 pie-in-the-sky stuff. The good news is, there are

19 existing and cost-effective solutions at hand. EPA's

20 proposal builds on regulations already in place in

21 states like Colorado and Wyoming. Further, as the EPA

22 has shown, in cooperation with oil and gas companies

23 through the Natural Gas STAR Program, there are dozens

24 of technologies and best management practices to reduce

25 emissions from natural gas operations, a number of
Page 62

1 which were on the basis of EPA's proposal.

2 These technologies reduce natural gas

3 losses, producing a greater recovery and sale of

4 product. The return on initial investment for many of

5 these required practices is sometimes as short as a few

6 months and almost always less than two years. EPA's

7 proposed standards have also the added effect of

8 ensuring that our finite domestic resources are being

9 used widely.

10 As we indicated in our comments in

11 Pittsburgh, there is no evidence of adverse effects

12 from --

13 MR. THOMPSON: I'm sorry --

14 MR. LOPEZ: -- the rules on --

15 MR. THOMPSON: -- Mr. Lopez. Your time

16 has expired.

17 MR. LOPEZ: Thank you.

18 MR. THOMPSON: Thank you. Any clarifying

19 questions for Mr. Alvarez? Mr. Smith, please.

20 MR. SMITH: Thank you. Good morning and

21 thank you, EPA, for taking the time to hear public

22 comments on this important issue. My name is Darren

23 Smith. I'm an environmental health and safety manager

24 for Devon Energy, based in Oklahoma City.

25 Devon has been recognized numerous times
Page 63

1 by the EPA for demonstrating leadership through our

2 voluntary air emission reduction projects. Today, I

3 want to discuss the serious concern Devon has about the

4 economics that the EPA relied on to justify the

5 requirements of this NSPS rule.

6 EPA has suggested that producers can

7 actually profit by implementing this rule, and that

8 simply is not correct. Let me explain our concern. In

9 2010, representative of EPA's climate program employed

10 a flawed methodology to estimate natural gas emissions

11 from hydraulically-fractured well completions and

12 re-completions, those from shale gas, coalbed methane

13 and tight sand wells.

14 The EPA misapplied data reported to them

15 in good faith by producers under the EPA Natural Gas

16 STAR Program. The EPA made an assumption that the

17 volume of gas recovered by the practice of green

18 completing the well, a technique used to capture and

19 sell gas from a well before it is connected to a sales

20 line. They believe that that quantity of gas is the

21 same quantity of natural gas that would be emitted if a

22 well was not green completed. This is simply not the

23 case, and the data set that was used to develop the

24 factor had only four data points.

25 We became suspicious of this estimate
Page 64

1 when we realized that, if it was true, Devon alone

2 would be losing more than $305 million to the

3 atmosphere in a single year, and no business would

4 tolerate this type of waste. The reality is that the

5 volume of gas emitted in instances where green

6 completion equipment cannot be employed is a small

7 fraction of what EPA believes.

8 We have proof. Just yesterday, we

9 completed a U.S. company-wide data effort at Devon from

10 wells completed in ten different basins across the

11 country. In using an EPA-endorsed flow equation, we

12 estimated the actual emissions from

13 hydraulically-fractured well completions. Our mission

14 estimate is very conservative, definitely erring on the

15 high side. But even then, it represents less than 7

16 percent of what -- of the EPA estimate.

17 Now, the problem that we are facing today

18 is that the subpart quad O authors used the

19 overestimates supplied to them from their coll --

20 climate colleagues in their economic analysis. As a

21 result, and not surprisingly, the EPA believes that the

22 proposed green completion requirement would allow a

23 company to actually make $6,000 each time they

24 performed one. I should add that they did not discount

25 for the cost of all the associated reporting and
Page 65

1 recordkeeping and notification that the rule proposes.

2 When we apply our conservative estimate

3 of actual completion emissions, green completions would

4 actually cost the company $25,000 each. Producers

5 already employ green completion technology where it

6 makes sense. Devon is in favor of the practice. There

7 are benefits to doing it, but we are strongly opposed

8 to using misleading emission estimates to force this

9 requirement where it isn't feasible.

10 The purpose of my testimony this morning

11 is to inform the EPA that there is actual industry data

12 to suggest that its economics are wrong. We, and our

13 peers, will be providing this data formally to you

14 under the public comment period. I don't need to

15 remind you that under the Clean Air Act, the EPA has an

16 obligation to employ the best available data to assess

17 the economic impacts of this rule.

18 The EPA also has an obligation to the

19 American people to correct the data that is fueling

20 criticisms about the environmental performance of this

21 industry. Already, there have been reports and

22 potential public policy implications stemming from this

23 erroneous data.

24 Finally, EPA is using it to justify more

25 uncostly regulations on an industry that Americans rely
Page 66

1 on for energy and job -- jobs. We urge the EPA to

2 recognize that additional costs translate into fewer

3 wells, fewer people earning a paycheck and higher

4 energy costs. This concludes my testimony. Thank you.

5 MR. THOMPSON: Thank you, Mr. Smith. Any

6 clarifying questions? Okay.

7 MR. MACPHERSON: Thank you, Mr. Smith.

8 You said the reduced emissions completion cost $25,000.

9 That's after netting out the value of the recovered

10 gas?

11 MR. SMITH: That's correct.

12 MR. MACPHERSON: Okay. And that's

13 described in support to your comments?

14 MR. SMITH: We haven't submitted those

15 yet, but we certainly will be before the deadline.

16 MR. MACPHERSON: Okay. Thank you.

17 MR. THOMPSON: Thank you, gentlemen.

18 Thank you both for your testimony.

19 At this time, we're going to take a

20 ten-minute break and we'll reconvene at 10:35.

21 (Recess taken 10:25-10:38.)

22 MR. THOMPSON: At this time, I'd like to

23 ask Adam Briggle and David Weinberg to please come

24 forward.

25 Good morning, gentlemen.
Page 67

1 MR. BRIGGLE: Good morning.

2 MR. THOMPSON: If you could state your

3 names and spell them for our court reporter, please.

4 MR. BRIGGLE: Yeah. My name is Adam

5 Briggle. It's A-d-a-m B-r-i-g-g-l-e.

6 MR. THOMPSON: Thank you.

7 MR. WEINBERG: David Weinberg,

8 W-e-i-n-b-e-r-g.

9 MR. THOMPSON: Thank you. Mr. Briggle,

10 please begin your testimony.

11 MR. BRIGGLE: Okay. Thank you very much.

12 I'm a UNT professor and I live at 1315 Dartmouth Place,

13 76201. That's in Denton. I'm here today to add my

14 voice to those in favor of the new regulations that

15 have been put forward by the EPA for air emissions in

16 the oil and gas industry. I'd like to applaud the EPA

17 for taking this step, and I want to strongly encourage

18 you to adopt these regulations. But I'm really here

19 today to speak on behalf of my three-and-a-half year

20 old daughter, Mary Grace Briggle, and my wife, Amber,

21 who's pregnant with our second child.

22 Now, we recently moved back to the U.S.

23 after living abroad for several years. And for the

24 most part, we're happy to be home and we like it here

25 and we're proud to be back. But I tell you what, it's
Page 68

1 scary living in D/FW because not only do you have

2 6 million people driving their cars and trucks,

3 conducting their businesses, running their industries,

4 but you've got the Barnett Shale which is experiencing

5 exploding growth in oil and gas exploration, drilling

6 and production. You add that up and you see the smog

7 that I saw on the way down here.

8 Now, my daughter is breathing that in

9 every day. Every time she takes a breath in, she's

10 circulating around her body our collective waste and

11 that has got to change. And I think these regulations

12 are a great step forward to make that change.

13 Now, I do what I can. I ride my bike to

14 work. I buy wind power for my home. But in reality,

15 there's only so much individuals acting alone can do.

16 We're talking about energy systems. To change systems,

17 you need systematic change. And for that, you need

18 strong leadership. You need leadership at the top.

19 I think what we need is the federal

20 government to make these decisions that will steer the

21 creative energies of the industry into more beneficial

22 channels. Now, our state leaders, I think, have shown

23 a blatant disregard for the health of my daughter.

24 Every time they attack the EPA, that's the way I read

25 what they're doing. And so I'm here to tell you me --
Page 69

1 and I think there's lots of citizens in Texas that are

2 looking for the federal government to step in where our

3 state leaders refuse to step in and to be the leaders

4 that we need.

5 So I'm asking you to make hard choices,

6 but in reality, I don't think this is a hard choice. I

7 think this is a no-brainer. You're going to make

8 significant reductions in volatile organic compounds.

9 You're going to reduce benzine and other air toxics,

10 and it's all going to be cost-effective. And so my

11 message to you is simply, when you're making this

12 decision, when you go back to Washington, I want you to

13 keep my daughter and all the other children around here

14 in the front of your mind. Realize that they're going

15 to be breathing in your decisions, and so I'm asking

16 you to do the right thing. Thank you.

17 MR. THOMPSON: Thank you, Mr. Briggle.

18 Thank you for your testimony. Any questions of

19 Mr. Briggle from the panel? Okay. Mr. Weinberg.

20 MR. WEINBERG: Good morning. My name is

21 David Weinberg. I'm the executive director of the

22 Texas League of Conservation Voters, a statewide

23 environmental policy organization. My comments this

24 morning will be brief.

25 And, in short, we support the EPA in
Page 70

1 promulgating these new regulations. I'm not going to

2 get into the weeds of the policy sort-of debate this

3 morning. I will defer to my colleagues at the

4 Environmental Defense Fund and some other organizations

5 to get into the specific policy debate on that, but I

6 wanted to couch our support in just a couple quick -- I

7 think possibly more political comments.

8 There's been a lot of debate in Texas

9 lately around not just these regulations but other EPA

10 rules which are being looked at. And my organization

11 feels very strongly that it is the role of government.

12 There is a very vital and important role for government

13 to play in balancing market needs and demands with

14 public health and public safety. So this is a very,

15 very important process that we are going through this

16 morning.

17 A few other quick points, I do want to

18 give some credit where credit is due. I -- you know,

19 we are strongly supportive of the fact that Texas this

20 year became the first state to pass a mandatory

21 hydraulic fracturing disclosure law. That law will

22 help to understand the science and the methodology

23 hydraulic fracturing in terms of protecting our water

24 supply. But we do need to do more in this country and,

25 particularly in the state, in this area, in terms of
Page 71

1 air emissions and reducing air emissions from oil and

2 gas drilling.

3 My organization supports using more

4 natural gas as opposed to, say, lignite coal or

5 Canadian tar sands. It is much cleaner. But if you

6 improve in particular reducing methane emissions from

7 natural gas drilling in use, it becomes even more

8 clean, as that is a potent greenhouse gas.

9 The last thing that I would add this

10 morning is, that regardless of whatever regulations

11 come out of this process, the EPA cannot successfully

12 police, either in this state or in the country, the oil

13 and gas industry in terms of drilling practices and

14 everything else in between. It takes a partnership

15 between states and the federal government to make this

16 work. I would argue that here in Texas, we are failing

17 at the state level in terms of adequate regulations in

18 terms of oil and gas drilling. The Railroad Commission

19 needs to be adequately funded, in terms of inspectors.

20 It is not. There needs to be clarity between whose

21 roll it is between the TCEQ and the Railroad Commission

22 to address air quality and water quality issue with gas

23 drilling. That is not clear.

24 And lastly, with some of the more

25 egregious constituent cases you will hear from this
Page 72

1 morning of citizens who were impacted, this state needs

2 to do a better job in addressing the needs and the

3 concerns of those citizens in terms of people who were

4 impacted on their property and public health and their

5 lives. And we need to do a better job of doing that.

6 So, in short, we do support these

7 regulations. We do support the oil and gas industry in

8 Texas. We need to be doing a better job, and it will

9 require cooperation between the federal government and

10 the states. Thank you very much.

11 MR. THOMPSON: Thank you, Mr. Weinberg.

12 Any clarifying questions for either Mr. Weinberg or

13 Mr. Briggle? Gentlemen, thank you both for your

14 testimony.

15 Would Jenna Gleaton and Larry Schweiger

16 please come forward. Could you both pronounce and

17 spell your last names for us, please, starting with

18 Ms. Gleaton.

19 MS. GLEATON: Hi. Jenna Gleaton,

20 J-e-n-n-a G-l-e-a-t-o-n.

21 MR. THOMPSON: Thank you.

22 MR. SCHWEIGER: Larry Schweiger. It's

23 L-a-r-r-y S-c-h-w-e-i-g-e-r.

24 MR. THOMPSON: Thank you and good morning

25 to you both. Ms. Gleaton, please begin your testimony.
Page 73

1 MS. GLEATON: Good morning. My name is

2 Jenna Gleaton, and I am here on behalf of a group

3 called Clean Resources, which is a group of concerned

4 citizens, small business owners and other Texans who

5 represent the more than hundred thousand jobs in the

6 Barnett Shale region and rely on this vital resource.

7 We understand the value that the shale

8 gas development plays in improving our state and local

9 economy, making our lives better and reducing for oil

10 imports and making our country stronger and protecting

11 our environment. And I'm just here to give some

12 information from various studies and groups, some of

13 which have already been mentioned here today, but are

14 very important. It shows the support that the citizens

15 have in this region.

16 The Barnett Shale Energy Education

17 Council commissioned an air quality study to provide

18 the public with facts about emissions, and the study

19 concluded that natural gas sites in Fort Worth and

20 Arlington District 2 expected to have the highest

21 benzine emissions are, in fact, not emitting harmful

22 levels of benzine or other compounds tested.

23 Furthermore, the Texas Commission on Environmental

24 Quality surveyed a hundred natural gas facilities and

25 did not find any cause for concern about harmful
Page 74

1 materials being released.

2 It is a cleaner burning fuel that we need

3 and must protect and be allowed to utilize to its full

4 potential. The economic impact also cannot be ignored.

5 It has had an impact of $65.4 billion in North Texas

6 and supports a hundred thousand, two hundred

7 sixty-eight jobs in 24 counties, according to a report

8 done by Ray Perryman. He also estimated that the total

9 regional impact of the Barnett Shale will be

10 $11.1 billion in 2011.

11 There are numerous citizens that are

12 legitimately concerned about natural gas development

13 decreasing because of regulations. Some cities in the

14 area have made it nearly impossible, and I have

15 personally heard their complaints about not being able

16 to see the economic progress other towns around them

17 are experiencing because of all the regulations. And

18 this is progress that -- this progress is vital to this

19 region and it's a vital resource that should not be

20 hindered and should be allowed to continue to provide

21 benefits to the state and our country and the citizens

22 in this region. Thank you.

23 MR. THOMPSON: Thank you, Ms. Gleaton.

24 Any clarifying questions for Ms. Gleaton?

25 Mr. Schweiger.
Page 75

1 MR. SCHWEIGER: Hi. I'm Larry Schweiger

2 and I am president and CEO of the National Wildlife

3 Federation. We represent over 4 million Americans.

4 And the National Wildlife Federation believes that

5 America needs a responsible energy development,

6 including natural gas exploration. We do believe that

7 it must be done with best practices, using best

8 available control technologies in a manner that

9 considers wildlife and habitat impacts that considers

10 the clean air that people need for -- for life and for

11 clean water and all the other threats to human health.

12 The federation represents millions of

13 sportsmen across America. And the unique heritage of

14 hunting and fishing in the country has been threatened

15 in places by a rush for natural gas, like the Marcellus

16 Shale in my home state of Pennsylvania, and the Eagle

17 Ford and Barnett Shale here in Texas. We simply cannot

18 afford to extract gas in an irresponsible manner that

19 harms land, that damages our air quality and degrades

20 our water resources.

21 The National Wildlife Federation supports

22 EPA's efforts to curb smog, harmful sulfates, air

23 toxins and acid rain by creating standards for volatile

24 organic compounds, for establishing standards for

25 sulfur dioxide emissions, new standards for air toxins
Page 76

1 for oil and gas production and standards for air toxins

2 related to natural gas transmission.

3 The fracking process raises serious

4 concerns about its impact on -- on these resources.

5 Much of the equipment used at the well pads runs on

6 diesel fuel with serious emission problems that lead to

7 poor air quality. As an example of that, the --

8 this -- earlier this year in the upper Green River

9 Basin near Pinedale, Wyoming, we saw air quality worse

10 than Los Angeles from these operations.

11 The Wyoming Department of Air Quality

12 issued a notice that elderly children and people with

13 respiratory conditions should stay indoors as a result

14 of this intense pollution problem. I've seen the same

15 thing in the Wind River Reservation in Wyoming and also

16 in surrounding areas where the air quality has been

17 degraded.

18 The National Wildlife Federation also

19 views these rules as one essential step in tackling the

20 climate crises. The co-benefits of methane emissions

21 reductions from this rule are a much-needed piece of

22 the puzzle that -- if the United States is going to

23 make a concerted effort to reduce our global warming

24 pollution. I might also say that the federation is

25 concerned about the impacts from oil and gas
Page 77

1 development that go beyond this critical issue of air

2 quality. Specifically, companies should be required to

3 disclose chemicals used in fracking, fluids that have

4 the potential to pollute ground water, streams and

5 lakes and rivers across the areas where gases and oil

6 are being developed.

7 Drilling operations should be monitored

8 under Safe Drinking Water Act, closing the loophole

9 created by the 2005 energy legislation. We also should

10 identify public lands that should be off limits to

11 drilling. These very special places that contain

12 precious landscapes, critical wildlife habitats are

13 essential for sportsmen and for other enthusiasts who

14 love the outdoors and care for these fragile resources.

15 I would like to end by thanking the EPA

16 for protecting the health of our children. We heard

17 much here this morning and I won't add to that, but

18 simply say thanks for that and also for your

19 willingness to address these important issues. We urge

20 speedy implementation to protect the public health in

21 this region and other parts of the country where we're

22 experiencing air pollution degradation. Thank you.

23 MR. THOMPSON: Thank you, Mr. Schweiger.

24 Any clarifying questions? No. Okay. Respectfully,

25 Ms. Gleaton and Mr. Schweiger, thank you for your
Page 78

1 testimony.

2 MR. SCHWEIGER: Thank you.

3 MR. THOMPSON: Thank you very much. At

4 this time, I'd like to ask Julia Burgen and Donald

5 Dillard to please come forward. Good morning.

6 MR. BURGEN: Good morning.

7 MR. THOMPSON: Could you both please

8 state your names and spell them for our court reporter.

9 MS. BURGEN: Julia Burgen, J-u-l-i-a

10 B-u-r-g-e-n.

11 MR. THOMPSON: Thank you.

12 MR. DILLARD: Donald Dillard, D-o-n-a-l-d

13 D-i-l-l-a-r-d.

14 MR. THOMPSON: Thank you, Mr. Dillard.

15 Ms. Burgen, please begin your testimony.

16 MS. BURGEN: Thank you. I'm looking for

17 the lights because I need to watch because I want to be

18 sure I get my punch line in.

19 MR. THOMPSON: All right.

20 MS. BURGEN: I may have to, you know,

21 come early around that. Thank you for this opportunity

22 to comment on this issue. I also spoke as an advocate

23 for breathers and healthy air at EPA hearings on

24 March 16th and August 2nd, 2010, and also at a couple

25 of TCEQ hearings at this same location in the last two
Page 79

1 years.

2 I'm a native Texan of seven plus decades,

3 residing in the metroplex since 1949. If you want

4 someone who knows the history of environmental efforts,

5 you're looking at one. My history with air issues

6 began in Dallas. My earliest clipped cartoon is dated

7 19 -- on air quality is dated 1971. My first letter in

8 my files addressed to the EPA was 1973.

9 I moved to Arlington by the late 1980s

10 and began attending meetings at the North Central Texas

11 Council of Governments on air quality and other

12 environmental issues. That was almost 25 years ago.

13 Why is it taking so long to get breathable, healthy

14 air? The latest hurdle has been thrown by the gas

15 industry with its emissions virtually unabated. In

16 fact, they were specifically exempted from all the

17 federal and environmental laws for their horizontal

18 fracking in the 2005 energy bill in a section commonly

19 known as the Halliburton loophole.

20 That marked the beginning of the recent

21 phenomenal growth in the gas industry. Yet, as a

22 November 3rd, 2009 New York editorial -- Times

23 editorial said, but if hydraulic fracking is as safe as

24 the industry says it is, why should it fear regulation

25 or is this all just about turf wars and not public
Page 80

1 health. I have five gas well complexes between three

2 eighths of a mile and one and two-thirds mile of my

3 home. There are two more that are within two miles.

4 I've got seven of these things. Two more gas well

5 complexes just two miles away. My personal costs for

6 medication due to asthma are currently $1,827 a year.

7 I use Singulair, ProAir and Advair and none are

8 generic. Note that air is in each of these drugs to

9 help me breathe.

10 That $1,827 is money that I don't have to

11 spend in our local economy. It ends up in companies in

12 Kansas or California, which is still the U.S. so far.

13 Not even figuring the cost of doctor visits and

14 insurance copay. If you start quantifying the cost to

15 society and citizens paid by themselves are partly

16 through drug plans that they pay for or partly through

17 donations made to the many social service agencies to

18 assist those with no insurance or little income or

19 property taxes to support county health, the costs

20 become more than just significant. It's no wonder that

21 medical services and drugs are a growth industry.

22 That's not the rationale for allowing the

23 gas industry to continue polluting, is it? I feel we

24 are approaching the same scenario that we had with the

25 cement kilns since they started bringing hazardous
Page 81

1 waste in 1987. Health issues were rampant in that

2 area. I have attended meetings along with thousands of

3 breeders (sic) -- breathers, written so many letters,

4 made lots of phone calls over the years to get relief

5 for North Texans from air pollution, not just from

6 cement kilns but from all the other sources. And now

7 we have a new source.

8 How long will it take? Another 25 years

9 to get this newest polluter in line? I hope not

10 because I won't be here and I don't want to leave a

11 damaged planet as my legacy. Any business plan has two

12 paramount themes, maximize profits and minimize cost.

13 It's imperative under such a system that there be a

14 government agency charged with acting in the interest

15 of the public to see that the industries play fair.

16 You are the people's Environmental Protection Agency.

17 I am eternally grateful that the Agency

18 was started in December of 1970, the year of the first

19 Earth Day. I need you. We all need you. Thanks very

20 much.

21 MR. THOMPSON: Thank you, Ms. Burgen, for

22 your testimony. Mr. Dillard.

23 MR. DILLARD: My name is Donald Dillard

24 and I approve a one-size-fits-all regulation. I very

25 much appreciate the EPA's purpose. If you don't
Page 82

1 protect the public, no one will. Like everyone else in

2 North Texas, I have no choice but to breathe the

3 available air. I want to be healthy and to pursue this

4 goal, I have run every day in North Texas for the last

5 11 years.

6 The North Texas air quality regularly and

7 often is horrible. Horrible. In today's morning run,

8 I am more easily tired, adjusted my pace slower and

9 felt marginally worse than usual. And in my little

10 drive over here today, I heard on the radio that our --

11 the air pollution index is orange. That happens all

12 the time. All the time. And I'm one of the healthy

13 ones. Thank God, I don't have to do that (indicating)

14 stuff. But I probably will, if I continue to live in

15 Texas.

16 I live in Duncanville, Texas, which is

17 between here and the cement plants that continue to

18 burn who knows what. And whenever the -- whenever the

19 air blows from the south, people all over my area

20 complain. Hot, cold, whatever it is, they all start

21 coughing and wheezing. And I know that's not directly

22 related, but what is related is North Texas air quality

23 has been horrible for a very long time and it continues

24 to be horrible. And the last five years, we have added

25 new insults, so I very much appreciate the EPA as doing
Page 83

1 their best to try to regulate the new insults that

2 we're having. Because so much of what we're -- so much

3 of what's happening in North Texas air quality is very,

4 very, very difficult to control. And this is one --

5 your regulation is something that we can control.

6 And we -- and the fact that some people

7 can make extra money by polluting the air is not -- is

8 not right because everybody has to breathe the air.

9 And it's important that we need to factor in the

10 environmental cost to -- in the effort so that clean

11 energies can be developed. If we don't set an -- if we

12 don't set an environmental situation so that the cost

13 of polluting are on the ones who get the benefit from

14 the -- the companies that gain financially also ought

15 to bear the cost of the pollution. And if we don't set

16 an environment where that's happening, then we'll --

17 then we'll never get this air -- air quality cleaned

18 up.

19 Many of the problems in North Texas air

20 are very difficult to -- to manage and control. One

21 comment I noticed as I was listening here today is that

22 a lot of the people who were, quote -- everybody is for

23 clean air. All the polluters, everybody I've noticed,

24 all the testimony is for clean air, but some people are

25 benefitting from lack of regulation. And they're
Page 84

1 quoting studies that -- by people who are paid by the

2 people who benefit from polluting air. And so I do

3 think it's important that we pay attention when we hear

4 studies who -- who did these studies and who benefits

5 from the outcome of the studies. I'd like to say that

6 when we delay in doing the right thing, we're doing the

7 wrong thing.

8 I thank you for your diligence in doing

9 your duty. We need you.

10 MR. THOMPSON: Thank you, Mr. Dillard.

11 Please sit tight. Any clarifying questions from

12 anyone? Okay. Ms. Burgen and Mr. Dillard, thank you

13 both for your testimony today.

14 I'd like to ask Tom Hayden and Susan

15 Waskey to please come forward. Good morning. Could

16 you please state and spell your names please for the

17 court reporter, starting with Mr. Hayden.

18 MR. HAYDEN: Tom Hayden, T-o-m

19 H-a-y-d-e-n.

20 MR. THOMPSON: Thank you, sir.

21 MS. WASKEY: Susan Waskey, S-u-s-a-n

22 W-a-s-k-e-y.

23 MR. THOMPSON: Thank you. Mr. Hayden,

24 you can begin with your testimony, sir.

25 MR. HAYDEN: Thank you very much, sir. I
Page 85

1 appreciate you coming and giving us an opportunity to

2 speak to you.

3 MR. THOMPSON: Yes, sir.

4 MR. HAYDEN: I'm speaking as a private

5 citizen. I live in Double Oak, Texas, which is close

6 to here. I drink the water from the aquifer underneath

7 there through my water company and I'm particularly

8 interested in that. I know this is an air pollution,

9 but please don't wait too long about the water. If you

10 haven't heard, we're a little dry in Texas and don't

11 want to waste any.

12 I want to address a number of the

13 proposals you have and say that I really appreciate

14 your two-step approach to the risk analysis. I think

15 that's a very prudent way to do it, is to first go

16 ahead with the one and ten thousand criteria and then

17 later on, as you evaluate things, to move up to the

18 more aggressive criteria. I think that's a very

19 prudent way to do that.

20 The previous speaker addressed the Green

21 River Valley in Wyoming situation. I think that's

22 really important because there's many arguments given,

23 okay, is this pollution caused by fracking gas wells

24 or, look, all the other sources are causing the

25 trouble. That's a case history that says, look, they
Page 86

1 went into the Green River Valley there. That's a

2 pristine area. No pollution. There's no industry, no

3 big towns, no nothing. It's the one of the few test

4 cases that are around. What happened. Maybe the ozone

5 reduction there and we know that's a surrogate for

6 VOCs. The EPA standard is 75 parts per billion. Green

7 River Valley measured 124 parts per billion. Los

8 Angeles, which is not nice to breathe, top peak level

9 the year before was 114.

10 It was all due to fracking and the

11 related industry. Nothing else. Therefore, any

12 argument that, oh, this is something -- some other

13 problem, that refutes that argument, I think, clearly

14 and concisely. Another argument that's already been

15 given this morning is that it turns out the air

16 pollution measuring Little Dish, Texas, up here close

17 to us set off the -- was bigger than ESL limits of TCEQ

18 and triggered their investigation. And then there was

19 a report soon came out in Fort Worth that said, oh,

20 TCEQ surveyed the Fort Worth air pollution and there's

21 no problems.

22 Well, they just forgot to mention, and

23 only in very small letters on their slides, does it

24 show that, oh, we didn't follow the EPA procedures and

25 the quality things we should have. And furthermore,
Page 87

1 industry had to pay some of that because we didn't have

2 enough money. And third, the samples that were looked

3 at, there was an error in that and we just forgot to

4 tell our congressmen and things that there was these

5 problems.

6 So I think, you know, the fact that they

7 say there is no problem, that's very suspect. And I'd

8 like to jump down to the cost-effective measures which

9 I think are clearly being shown. And it turns out you

10 might argue, well, the price is way down. It's not

11 going to be cost effective. The price of gas will go

12 up in the future and I don't believe in the meantime

13 the gas that's been there a couple of million years is

14 going to go anywhere. And I think we can just wait and

15 there will be plenty of time for it to come back up.

16 It's hard to try to project ahead and say exactly what

17 something's going to cost.

18 Let's look back at a case history which

19 really will indicate, I think, how good you are at

20 estimating these things. For example, a few years ago

21 around the refineries, we asked for a reduction in

22 sulfur dioxide. The EPA estimated it would cost 350 to

23 $500 a ton. Industry, oh, no, it's going to cost

24 $1,500 a ton. When it was done, actual number, $100 a

25 ton. I think you were right on except a little high.
Page 88

1 And so whenever they begin to question your future

2 estimates, I think you've done a really good job.

3 And Furthermore, your estimate showed

4 that there would be probably 2,300 premature deaths a

5 year that would be saved from reducing this, 54,000

6 asthma attacks. The cost to industry over ten years

7 for the reduction of sulfur dioxide would be about

8 1.5 billion. That looks big. Cost benefits, 13 to 33

9 billion per year. There's a big difference. So it's

10 very cost-effective.

11 MR. THOMPSON: Mr. Hayden, I'm sorry.

12 Your time has expired.

13 MR. HAYDEN: Thank you. Sorry.

14 MR. THOMPSON: No need for apology.

15 Thank you. Again, I recommend, if you haven't done so,

16 submit your comments to our folks out front so we can

17 have them as part of the public record, sir.

18 MR. HAYDEN: Thank you, sir.

19 MR. THOMPSON: Thank you very much.

20 MR. HAYDEN: Thank you for your time.

21 MR. THOMPSON: Any clarifying questions

22 for Mr. Hayden? No. Okay. Ms. Waskey, please.

23 MS. WASKEY: My name is Susan Waskey. I

24 represent myself. I live in Argyle, Texas, which is a

25 small community about 35 miles north of Arlington. I'm
Page 89

1 here today to share some of the health impacts I have

2 experienced from gas industry pollution.

3 My family moved to Texas 14 years ago,

4 buying a nice home on three acres in the country away

5 from any city development and any industrial

6 facilities. However, since the advent of the Barnett

7 Shale gas drilling broo -- boom, my home now lies

8 within one mile of at least 20 drilling sites.

9 In the past year, I have experienced

10 migraine headaches at an alarming frequency. These

11 migraines have been especially bad this summer, which

12 is, coincidentally, the worst ozone season in the

13 Dallas-Fort Worth history. Granted, I've had migraines

14 all my life, but usually only at the rate about one

15 headache a month. However, recently the frequency of

16 these headaches has dramatically increased to sometimes

17 five migraines per week. I attribute this increased

18 frequency to an environmental change, namely the

19 volatile organic compounds and other ozone-forming

20 chemicals leaking from gas drilling operations.

21 My rationale for this is that, if I

22 travel away from the Dallas-Fort Worth area, which I

23 often do, I rarely get the headaches. For example, I

24 recently returned from a two-week vacation to Ohio and

25 Indiana and I had no headaches there for a whole two
Page 90

1 weeks. Anyone who has ever experienced a migraine

2 knows that it is not a simple headache that will go

3 away with a couple of Advil. To be able to function

4 and get relief of the intense pain, I must take a

5 specific prescription medicine. That pill costs $54

6 per dose and I sometimes must take two pills per day to

7 rid myself of the migraine.

8 So assuming I take five pills per week,

9 the weekly cost of this medication easily exceeds $250,

10 more than a thousand dollars a month. I have also had

11 to begin seeing a neurologist that specializes in

12 headaches. These visits have cost only $450 so far,

13 but they will continue at a rate of the $175 per visit.

14 So if these air pollution-induced migraines continue at

15 this elevated level, the cost of them -- treating them

16 is $1,100 per month or more than $13,000 per year.

17 This medication is not available in a

18 generic form. I know I'm not the only person in the

19 D/FW area that is suffering from health problems due to

20 the increased air pollution from gas drilling

21 operations. I hope the EPA will take the necessary

22 steps to protect human health and force these companies

23 to take the appropriate measures to reduce their

24 emissions. I believe it is time for the gas industry's

25 free wide to end. Other industries in the area have
Page 91

1 had to control their emissions and automobile emissions

2 are being reduced as cleaner cars are being purchased.

3 The gas industry should also be required

4 to do their fair share to reduce air pollution in the

5 D/FW area. I support the Fair Share for Clean Air

6 campaign advocated by the group Downwinders At Risk and

7 the proposed EPA regulations for controlling emissions

8 from the gas industry. It frustrates me that the

9 natural gas companies are reluctant to take any steps

10 to reduce the pollution from their operations without

11 an EPA mandate, especially in light of the fact that

12 according a recent study, Dr. Melanie Sadler's study,

13 the cost of implementing these measures is less than

14 the revenues the company could generate by capturing

15 the emissions and selling them as a product.

16 This seems like a no-brainer. As a

17 citizen of the State of Texas, I must rely on the

18 federal EPA to implement regulations necessary for

19 protecting my public -- my health and the public's

20 health. The emissions created by the natural gas

21 drilling operations are a new public health threat in

22 our area, as they are in many other shale drilling

23 areas of the country.

24 I strongly urge the EPA to implement and

25 enforce regulations that require the natural gas
Page 92

1 industry to control these harmful emissions, thus

2 ensuring the health of the public and reducing the

3 medical expenses incurred by treating the pollution's

4 adverse health effects. Thank you for holding this

5 hearing and listening to my concerns.

6 MR. THOMPSON: Thank you, Ms. Waskey.

7 Any clarifying questions? Well, thank you Mr. Hayden

8 and Ms. Waskey for your testimony. Thank you very

9 much.

10 Okay. At this time, I'd like to ask

11 Alisa Rich and David Foster to please come forward.

12 Good morning to you both. Could you please pronounce

13 your names and spell for our court reporter, please.

14 Ms. Rich.

15 MS. RICH: My name is Alisa Rich, Alisa,

16 last name is R-i-c-h.

17 MR. THOMPSON: Thank you. Mr. Foster.

18 Mr. Foster?

19 MR. FOSTER: David Foster, D-a-v-i-d

20 F-o-s-t-e-r.

21 MR. THOMPSON: Thank you, sir. Ms. Rich,

22 you can begin with your Testimony whenever you're

23 ready.

24 MS. RICH: Thank you, respected

25 officials, for being here and thank you for hearing the
Page 93

1 people today. My name is Dr. Alisa Rich, and I'm an

2 environmental scientist and health analyst with Wolf

3 Eagle Environmental. I come today to speak to you

4 about my growing concern for the exposures of the

5 people across the country to both air pollution and

6 water pollutants that are reaching our systems.

7 Texas is burning and so is North Dakota,

8 who burns off all the natural gas in order to reach the

9 liquids. Our water resources are becoming depleted to

10 the point that ranchers can no longer feed their cattle

11 and municipalities will be forced to limit our water.

12 This is a side -- whoops. Previous. There you go.

13 Previous slide. This is a slide of the drilling

14 permits issued in the State of Texas by the Railroad

15 Commission approximating 19,692 since 2001.

16 This is the slide of the water that has

17 been permanently removed from the hydrogeological

18 (phonetic) cycle in Texas, as the water is no longer

19 usable as it has been contaminated with fracking

20 chemicals. In the same period of time, we have lost 19

21 to 49 billion cubic feet of water based on an estimate

22 of 1 to 5 million gallons of water used for each well.

23 However, this estimate may be too low. According to

24 the Advanced Resource International Case Presentation

25 given in China 2005, a new -- a new 12-stage open hole
Page 94

1 completion system is being used which provides higher

2 reserves per well. This typically uses 18,000 barrels

3 of water per stage which equates to 11,880 million

4 gallons per well.

5 Texas is burning, and possibly, this is

6 one of the reasons why. I spent the last four years

7 testing air and water across Texas and other states

8 involved in natural gas drilling, and many of these

9 same chemicals that are used in fracking are winding up

10 in our air.

11 My testing has confirmed the presence of

12 radioactive material in our municipal and private water

13 wells in areas with natural gas production, including

14 isotopes of thallium, lead, radium, thorium, uranium

15 and strontium. These same isotopes are airborne during

16 fracking, many of which the U.S. EPA has no primary,

17 secondary standards, protective guidelines in water.

18 The state regulatory body overseeing this

19 contamination considers clients to be their natural gas

20 industry rather than the men and women and children

21 they're supposed to protect. And yet, in a 1992

22 document, it was very clear that the petroleum industry

23 and regulators are becoming increasingly concerned

24 about the presence of norm (phonetic). Our own

25 governor has spent a career attacking the U.S. EPA
Page 95

1 while scientists, including four National Academy of

2 Science -- Scientists address the threat to municipal

3 water system to Andrew Cuomo.

4 Governor Rick Perry has said the air

5 pollution regulations are to blame for a loss of 500

6 energy-related jobs in Texas. He shows his allegiance

7 boldly and openly and it is not to the people. Many

8 Texans would be dead today if not for the federal air

9 pollution rules that he fights so strongly against.

10 In 2005, asthma expenditures in Texas

11 alone exceeded 665 million, 706 billion -- excuse me,

12 billion dollars and this far exceeds the 500 job (sic).

13 Texas is burning and it's time for the people to become

14 burning mad about the contamination that the state

15 turns a blind eye to, allowing our children to become

16 sick and die and our precious resources become

17 contaminated.

18 I want to thank you for your time today.

19 I want to thank you for listening to the people, and I

20 respectfully request that U.S. Administrator Jackson

21 provide regulatory limits on airborne methane,

22 water-borne methane, and radioactive material that is

23 reaching our air, our private and our municipal water

24 systems. I am not against natural gas, but I cannot

25 sit back and allow any industry to contaminate our
Page 96

1 natural resources because it is our children that will

2 suffer from our negligence. Thank you very much.

3 MR. THOMPSON: Thank you, Dr. Rich, for

4 your testimony. Any clarifying questions from the

5 panel? Mr. Foster.

6 MR. FOSTER: Thank you. My name is David

7 Foster. I'm here to speak as Texas program director

8 for Clean Water Action. I want to begin on a personal

9 note and mention that I was born in Dallas, mostly grew

10 up here. My wife is from Fort Worth. We went to

11 college up the road in Denton, Texas, and still have

12 many family and friends here. And it saddens me every

13 time I come back to my native city and experience

14 firsthand how bad the air quality has become. And this

15 is a situation that the continued unregulate -- or lack

16 of regulation of fracking can only worsen.

17 I do want to thank EPA for coming to

18 Arlington to listen to us and I want to thank EPA for

19 the strong proposals to restrict air emissions from oil

20 and gas extraction operations. EPA regulations of

21 these large pollution sources are urgently needed here

22 in Texas and in many other communities across the

23 country. State governments, including Texas, have so

24 far done little or nothing to manage gas drilling and

25 we need the federal government to step in and play a
Page 97

1 strong role in protecting public health and the

2 environment. It's important that the EPA understand

3 that fracking operations in Texas and elsewhere are

4 frequently occurring quite literally in people's back

5 yards.

6 We have over a thousand gas facilities

7 within the city limits of Fort Worth alone, a city with

8 more than half a million residents. Any rules on air

9 emissions must take into account that people are living

10 extremely close to these pollution sources. So we need

11 to be protecting -- not protecting people on average

12 but make sure that the rules are protecting everyone

13 living near gas drilling operations.

14 Another important point for EPA to

15 consider is that these rules are urgently needed and

16 should be implemented as soon as possible. The EPA

17 should not delay or the extend the comment period or

18 the effective date of any of these new rules. Many of

19 Texas' major metropolitan areas, including this one,

20 are already nonattainment under the federal Clean Air

21 Act. New air pollution rules can take a long time to

22 be enacted, and we need these rules in place as soon as

23 possible.

24 There was no moratorium on the state

25 level for permits for new frack wells here in Texas.
Page 98

1 Thousands of wells have already been drilled. We know

2 that many thousands of additional wells are planned.

3 Any delay in putting restrictions in place means

4 allowing thousands of new pollution sources in Texas

5 that will have a significant impact on public health.

6 Finally, we urge EPA to ensure that these

7 new rules are as strong as they can be. Best available

8 control technology should be a standard requirement for

9 all oil and gas operations. All significant sources of

10 air emissions must be included in the rules, such as

11 the thousands of open-air frack pits that accompany

12 drilling sites. Remember, these pits can also only be

13 a couple of hundred feet from where people live.

14 All relevant pollutants should be

15 directly controlled, including methane and hydrogen

16 sulfide. Finally, flaring should be completely

17 prohibited. It is simply irresponsible to allow the

18 gas industry to start production in a well before they

19 have a way to safely control the flow of hazardous

20 emissions. It can have a serious impact on people's

21 health.

22 I just want to close by thanking the EPA

23 once again for coming to Texas and for issuing these

24 important rules. And again, I urge you to implement

25 them without delay. Thank you very much.
Page 99

1 MR. THOMPSON: Thank you, Mr. Foster.

2 Any clarifying questions? Okay. Respectfully, thank

3 you, Dr. Rich, and Mr. Foster, for your testimony

4 today.

5 At this time, I'd like to ask Kip Averitt

6 and Charles Morgan to please come forward.

7 MR. THOMPSON: Good morning, gentlemen.

8 MR. AVERITT: Good morning.

9 MR. THOMPSON: If you could you please

10 state your names and spell for our court reporter,

11 please.

12 MR. AVERITT: Kip Averitt, Kip Averitt,

13 representing the Texas Clean Energy Coalition.

14 MR. THOMPSON: Thank you, sir.

15 MR. MORGAN: I'm Charles Morgan from

16 Freestone County. I represent Citizens for

17 Environmental Clean-up.

18 MR. THOMPSON: If you could spell your

19 name for the court reporter, please. Spell your name

20 for the court reporter.

21 MR. MORGAN: Spell my name. It's

22 Charles, C-h-a-r-l-e-s, M-o-r-g-a-n.

23 MR. THOMPSON: Thank you, for the court

24 reporter. Thank you, sir. Please begin your

25 testimony.
Page 100

1 MR. AVERITT: Thank you, gentlemen.

2 Thank you for being here. We know you have a tough job

3 to do. You've heard a lot of testimony this morning, a

4 lot of testimony this morning. I feel a little bit

5 like Elizabeth Taylor's eighth husband. I know what

6 I'm supposed to do here, but I don't know how I'm going

7 to make it interesting for you.

8 The Clean Energy Coalition believes that

9 Texas has a lot to gain by promoting and adopting

10 public policy that encourages the development and

11 implementation of new clean energy technologies. We

12 believe that there are a lot of economic benefits to

13 the development of the new green energies. And I'm

14 talking about renewable energies, such as geothermal

15 and wind and solar and also natural gas, which is clean

16 energy as well.

17 We believe that our public policy

18 procedures should be encouraging and nurturing these --

19 the development of these job creating technologies and

20 energy producers. Texas has a history of -- a varied

21 history but, gentlemen, in the last six years or so,

22 we've put our clean air programs on steroids here in

23 the State of Texas. And since that time, we have seen

24 dramatic, almost miraculous, results in the air

25 emissions in our nonattainment areas in the Dallas-Fort
Page 101

1 Worth metroplex and the Houston area as well. To the

2 point that in 2009, for example, only El Paso in our

3 entire state was out of compliance with our ozone

4 standards. Now, that was a one-year deal and it was an

5 extremely hot summer that year. It was not a fluke.

6 And we've had a lot of hot summers in the last six

7 years. But our EPA slash TCEQ administered monitoring

8 system shows that we have achieved dramatic results in

9 our state.

10 The ozone layers are dropping

11 dramatically. And we are never satisfied. We know

12 that you are always working to do better as well. Just

13 this last session, the Texas legislature adopted even

14 stronger monitoring positions, increased monitoring

15 levels, strictly for the Barnett Shale because of the

16 concern here in North Texas, the legitimate concern

17 people have about the quality of air here.

18 The Texas legislature funded $8 million

19 more dollars just for monitoring in the Barnett Shale

20 area. Not afraid to see what the results are. We have

21 34 monitors up here already and, as I said, the trend

22 is significantly down on all of those monitors, as

23 applied by the EPA rules. And we believe that there's

24 nothing wrong that can be had by having more

25 information. So I would say, bottom line, is that from
Page 102

1 the clean energy point of view is that we do have a lot

2 to do with -- a lot to gain with promoting clean energy

3 policy. And when we're not promoting clean energy

4 opportunities, we are subsidizing less clean fuel

5 sources. In other words, if we're going to hinder our

6 clean energy development, then we are going to maintain

7 or promote or inadvertently subsidize those energy

8 sources that are not as clean. And so I would -- I

9 would ask that you would consider that as you consider

10 these rules.

11 And finally, we think that natural gas

12 has a lot to offer our state, both in terms of economic

13 development but also in further helping clean up our

14 air quality. We're never satisfied and we always want

15 to do better, but we would ask you to allow all of our

16 things that we've done and the things that are on the

17 verge of being implemented to be considered as you

18 consider these new rules. And I thank you for your

19 time.

20 MR. THOMPSON: Thank you, Mr. Averitt.

21 Any clarifying questions from the panel? Okay.

22 Mr. Morgan.

23 MR. MORGAN: I'm Charles Morgan. I'm

24 addressing the gas treating facility and natural gas

25 compressor stations and national compliance and another
Page 103

1 area that you have not covered in your rules. Under

2 the gas treating facilities and your rules, the 40 CFR

3 part 60, subpart LLL for facilities with a sulfur feed

4 rate of less than five long ton per day. And I ask

5 what is the sulfur dioxide preferred control method?

6 In Freestone County, we have permits for

7 facilities that burn hydrogen sulfide via flaring. And

8 the result of sulfur dioxide is uncontrolled and not

9 measured it. Flaring of H2S is not an acceptable

10 method of control of the sulfur. It should be removed

11 from that system as liquid sulfur or something like

12 that, I believe. In the natural gas compressor

13 stations, compliance with the New Source Performance

14 Standards -- reference your page in the internet there,

15 52751, paragraph E2, the title, five permits not

16 required for natural gas compressor stations, only a

17 permit by rule is required in Texas.

18 However, with a significant number of

19 compressor stations in one county, the air emissions

20 allowed can exceed those of a large coal-fired power

21 plant. There are 130 compressor stations in Freestone

22 County, Texas, alone. They're allowed to emit 32,500

23 tons per year of nitrogen oxides and 3,250 tons per

24 year of sulfur dioxide.

25 How can we address this issue? Maybe a
Page 104

1 corporation having enough aggregate facilities in a

2 given county that exceeded NSPS standards should be

3 required to obtain a title five permit by the aggregate

4 of facilities. In national compliance, a county's

5 national compliance is undeterminable without air

6 monitors. There are few air monitors in Central Texas

7 and most all areas with less than a hundred thousand

8 population do not have an air monitor.

9 Rural towns and counties need protection

10 of our air quality also. We believe air monitoring

11 must not depend on population. By -- the existence of

12 major sources of air pollution in an area would be more

13 appropriate. Air monitoring is a must to ensure

14 compliance with the NAAQS. In Freestone County, we

15 have two large coal-fired power plants emitting

16 86,000 tons per year of sulfur dioxide, the dirtiest

17 power plant in Texas.

18 We have one large gas-fired power plant.

19 A hundred and thirty natural gas compressor stations,

20 the emissions noted earlier in the thousands of tons.

21 Several gas treating facilities, not to mention

22 numerous industrial facilities, are also there having

23 air emissions. And just south of us are two more large

24 coal-fired power plants with another one approved that

25 put out about 18,000 tons per year of sulfur dioxide.
Page 105

1 Therefore, the uncontrolled issuance of

2 air permits continues where any facility they want to

3 locate in our area because our county is classified as

4 attainment slash unclassified. How do we get

5 classified? If we've got the worst power plant in the

6 State of Texas plus others and numerous thousands of

7 other tons of emissions, how can we become properly

8 classified?

9 We're in a continuous battle trying to

10 protect our air. Air monitors must be installed within

11 40 miles of any major source of air pollution. A major

12 area not addressed by any EPA rule is the noise issue.

13 Noise from gas compressor stations is causing havoc all

14 across the United States. I received e-mails from

15 Connecticut to Idaho, people having major, major issues

16 both personally affecting their bodies and as to

17 property devaluation.

18 People are dying and being run out of

19 their homes, suffering body damage such as brain

20 damage, ruptured eardrums -- mine have been ruptured

21 twice just laying in bed, heart damage -- I've been

22 diagnosed with that -- restless leg syndrome, vertigo

23 and other symptoms. This is name vibroacoustic disease

24 by the Portuguese, those studied this whole body

25 pathology for 25 years. And there's low frequency
Page 106

1 noise symposiums held in Lyons (sic), France, with all

2 of the Europe represented, but the United States was

3 not present. Also held a low frequency noise symposium

4 in Australia, with Japanese and the Canadians and all

5 present but not the United States.

6 When are we going to address this issue?

7 The EPA delegated authority to state and local

8 governments in 1982 as a cost-cutting measure.

9 MR. THOMPSON: Mr. Morgan, I'm sorry.

10 Your time has expired, sir.

11 MR. MORGAN: Sir?

12 MR. THOMPSON: Your time has expired.

13 MR. MORGAN: Okay. I just had a sentence

14 or two. I said there's -- 44 states are just

15 unprotected. Only six have picked up this thing and I

16 believe that the EPA should retake authority of this

17 1972 noise control and abatement act to protect our

18 people.

19 MR. THOMPSON: So noted, Mr. Morgan.

20 Your time has expired. If you could please submit your

21 comments out front. Sit tight, please. Any questions

22 from the panel? Gentlemen, thank you both for your

23 testimony.

24 MR. MORGAN: Thank you, sir.

25 MR. THOMPSON: Thank you very much.
Page 107

1 At this time, I'd like to ask Calvin

2 Tillman to please come forward. Good morning,

3 Mr. Tillman.

4 MR. TILLMAN: Good morning. Thank you.

5 MR. THOMPSON: Yes. If you could state

6 your name and spell it for the court reporter, please.

7 MR. TILLMAN: My name is Calvin Tillman,

8 C-a-l-v-i-n T-i-l-l-m-a-n.

9 MR. THOMPSON: Thank you, and you can

10 begin with your testimony.

11 MR. TILLMAN: Thank you very much.

12 Appreciate you guys coming out and listening to this

13 and going around the country. I'm sure it must be

14 pretty tasking to sit and listen to -- to a variety of

15 different statements.

16 You know, on my way over here today,

17 there was actually this radio commercial that was from

18 the natural gas industry that talked about the

19 equipment they're using to control emissions. It

20 talked about infrared technology and it talked about

21 special valves and other things that they're using to

22 help protect our air right here in the Barnett Shale.

23 And it's funny that those very equipment -- that very

24 equipment is what could help them comply with this

25 regulation.
Page 108

1 I walked in just a few minutes ago. I

2 haven't been here that long, but I'm guessing that

3 there's several industry folks who have come up here

4 and said why they -- why this rule is not needed. If

5 you do much research at all, you'll find that a lot of

6 the same companies that come up here and talk about

7 that and the same organizations actually have various

8 presentations that you can find all over the internet

9 that talks about how they can control their emissions

10 in other parts of the United States and other parts of

11 the world.

12 The fact of the matter is, is that they

13 control -- they can control a lot of the emissions they

14 produce. And the fact of the matter is, is that it

15 saves money over time. If they were really the good

16 neighbors that they claim to be, we wouldn't have to be

17 having this discussion because they would already be

18 controlling these emissions.

19 However, a lot of these companies aren't

20 worried about three years from now when a lot of this

21 technology would pay off. They're simply worried about

22 next quarter's profits. There's been a lot of debate,

23 especially here in the State of Texas, that this is a

24 state's right issue. The fact of the matter is, is

25 that this industry, like many others, are shopping for
Page 109

1 the best deal. If all of the sudden the state started

2 holding them accountable, they'd be screaming for the

3 EPA to come in and protect them.

4 In Dish, we have one of the largest

5 natural gas compression stations and processing

6 facilities in this area. Actually, there are five

7 individually-permitted facilities, all permitted under

8 what's called Permit by Rule by the Texas Commission on

9 Environmental Quality. Unfortunately, that state

10 Agency permitted those five and didn't know that they

11 were permitting them right next to one another. When

12 this was brought to their attention, they had no idea

13 that they had permitted five facilities right next to

14 one another, essentially on the same piece of real

15 estate.

16 Since that time, there's been some

17 improvements. That doesn't help the people in the town

18 of Dish. After getting some attention for the research

19 that we did in Dish, there's been a lot of changes.

20 There's been some clean-ups. There's been some

21 technology installed to help control some of this

22 stuff. Albeit, the situation is not perfect, it's much

23 better than it was. I recently brought this up to

24 another state regulatory agency that's headed by three

25 commissioners. It's the Railroad Commission of Texas.
Page 110

1 And I was telling her that things were being installed

2 and simple housekeeping things, I think, have improved

3 the situation. We still have issues from time to time,

4 but I think if you looked overall, things have improved

5 because of technology that has been installed.

6 And that Railroad Commissioner, she told

7 me that Dish must have been built on top of a landfill

8 and that was where all the methane was coming from. It

9 couldn't be from one of the largest natural gas

10 production facilities and compressor stations in the

11 area. We had to be built on top of a landfill, even

12 though I was telling her that things were improving

13 while this technology was being installed. And this is

14 the person who currently runs the Railroad Commission

15 of Texas.

16 Those are two examples of what our state

17 agencies have done. There's many others and you'll

18 probably hear about them today and you've probably

19 heard about different state agencies all around the

20 country. So these are the agencies here in Texas that

21 are supposed to protect us. And, unfortunately, that

22 isn't happening. I think that this whole state's right

23 issue is nothing but rhetoric.

24 MR. THOMPSON: Mr. Tillman, your time is

25 expired.
Page 111

1 MR. TILLMAN: Okay. Do I have a quick

2 second or do I need to --

3 MR. THOMPSON: A quick second is a

4 second, but your time has expired. So I'm going to

5 have to ask you, if you would, please, for the sake of

6 consistency to submit your additional comments -- all

7 of your comments, if you would, please, out front.

8 MR. TILLMAN: Okay. I'll just close by

9 saying that I think you guys need to implement this

10 rule. You need to implement this rule as quickly as

11 possible and I thank you for your time here today.

12 MR. THOMPSON: Thank you very much.

13 Before you go, any questions for Mr. Tillman? Okay.

14 Thank you, sir.

15 MR. TILLMAN: And I will submit written

16 comments. Thank you.

17 MR. THOMPSON: Thank you very much.

18 Okay. I have been given a note here to ask that if

19 there's anyone here who has signed up to speak and you

20 have not checked in up front, that you please do so at

21 this time. And also if anyone would like to speak,

22 please see a staff person at the registration desk. I

23 guess, in sum, there's no one signed up to speak at

24 this very moment. So until then, we're going to take a

25 recess and begin when the next speaker shows up. Okay.
Page 112

1 Well, we take lunch break at 12:30, so between now and

2 12:30, I think that is -- between now and 12:30, the

3 panel will be here to listen to comments. But until

4 then, we're gonna -- you guys can take a recess. Thank

5 you very much.

6 (Recess taken 11:41-12:01.)

7 MR. THOMPSON: At this time, I'd like to

8 ask Rosemary Reed and Michael Thornton to please come

9 forward. Rosemary Reed and Michael Thornton.

10 And I guess it's officially good

11 afternoon, give or take a few seconds. So good

12 afternoon to the both of you. If you could please

13 state your names and spell them for the court reporter,

14 starting with Ms. Reed, please.

15 MS. REED: My name is Rosemary Reed. My

16 address is 277 Donnie Lane in Grand Prairie, Texas.

17 MR. THOMPSON: And could you spell your

18 name for the court reporter.

19 MS. REED: R-e-e-d.

20 MR. THOMPSON: And Rosemary?

21 MS. REED: R-o-s-e-m-a-r-y.

22 MR. THOMPSON: Thank you. Mr. Thornton.

23 MR. THORNTON: I'm Michael Thornton,

24 M-i-c-h-a-e-l T-h-o-r-n-t-o-n.

25 MR. THOMPSON: Thank you, sir. And,
Page 113

1 Ms. Reed, we'll begin with your testimony.

2 MS. REED: Good afternoon. Again, my

3 name is Rosemary Reed. I live at 277 Donnie Lane in

4 Grand Prairie. I am the president of the HOA in Grand

5 Prairie, the Westchester Association of Homeowners. I

6 am also a member of the Westchester Grand Prairie

7 Community Alliance on Gas Drilling.

8 I would like to thank you today for

9 conducting this hearing on the federal emissions

10 standards for gas pollution. I'm here to tell you

11 about my experiences with gas drilling. Chesapeake has

12 put a gas well 537 feet from my backyard and a frack

13 pond that held 176,000 barrels of water. That was

14 built ten feet from my backyard. And also flared that

15 well behind my house.

16 I am very -- more fortunate than other

17 residents in other cities because Grand Prairie has

18 improved some of their gas drilling ordinance

19 deficiencies. When Chesapeake was drilling on the Corn

20 Valley pad site, I called several times to TCEQ when we

21 smelled the methane gas and several times went on for

22 hours. By the time TCQ -- TCEQ got there, the fumes

23 were gone. The same thing happened when they were

24 fracking the well, but again, the fumes were gone by

25 the time they showed up. Our residents in our
Page 114

1 neighborhood and my family had no breathing problems

2 for months. And then -- since we've lived there. And

3 when the gas drilling started, we had breathing

4 problems for many, many months.

5 My neighbor, which is my nextdoor

6 neighbor, as you can see in the picture right there,

7 her daughter died shortly after the gas drilling

8 activities were ended through the drilling, the

9 fracking and the flaring. She also had a compromised

10 immune system an health issues before this happened but

11 were extremely exacerbated by the gas drilling

12 activities that was going on behind our homes. I have

13 brought that visual board you're looking at today to

14 show you exactly what gas drilling in residential

15 communities look like.

16 Unfortunately, it is not available with a

17 scratch and sniff. The oil and gas regulation, we want

18 them to do their fair share to clean the air. We need

19 the EPA's help. We need you because the State of Texas

20 refuses to act to reduce pollution from the gas

21 drilling activities. Rick Perry says Texas does not

22 need or want federal air regulations and we want -- and

23 we went to Texas in Austin to ask the representatives

24 to help us on this issue and they also have refused.

25 Today, you will hear from Texans who do
Page 115

1 want stricter federal air regulations. Everyone coming

2 here today wants green completion that separates the

3 gas and liquid hybocarbons (phonetic) from the flowback

4 that comes from the gas wells. We want the gas

5 industry to replace the wells at the operate -- operate

6 by releasing natural gas through their pneumatic

7 valves. We want emission controls for the tanks that

8 are on the gas drilling properties down to at least six

9 tons of VOCs a year. We want better maintenance on the

10 compressors.

11 These rules would cut -- would cut small

12 forming VOC emissions by nearly one-fourth across the

13 oil and gas industry, including nearly 95 percent

14 reduction in the VOCs emitted from new and re-fracked

15 gas wells primarily through the use of pollution

16 controls to capture natural gas that currently escapes

17 to the air. The gas that would be available, they

18 could then sell. These rules would reduce almost

19 40 million tons of toxins in the air and three and a

20 half million tons of methane, a green gas -- a

21 greenhouse gas that is over 20 times more destructive

22 than carbon dioxide.

23 The gas industry should have to comply

24 with the same clean air standards as other industries

25 in the Texas. We have hundreds of thousands of
Page 116

1 high-impact wells that are now in existence in

2 neighborhoods just like mine, and they should not or

3 ever be given a loophole or be grandfathered. Each and

4 every well should have to become compliant under the

5 new rules that the EPA sets. We need your help.

6 Please protect our family. Thank you for your time.

7 MR. THOMPSON: Thank you, Mrs. Reed. And

8 if you don't mind, I want to ask can you just

9 briefly -- because you still have some time left here

10 but -- I'm going to stop this (indicating). Can you

11 briefly just kind of step us through what we're seeing

12 here, your illustration? Can you come to it? Because

13 we can't -- at least I can't. I'm going to speak for

14 my eyesight. If you don't mind, just -- yeah, just

15 kind of tell us what we have here and I'll hold it for

16 you. So what do we see here?

17 MS. REED: This is the gas well that's

18 behind our community and that just shows how close --

19 you know when you hear the numbers 500 feet, in some

20 communities, it's 200 feet. But 500 feet, you can see

21 exactly how close that is. This is the frack pond that

22 they built behind my fence. And again, ten feet from

23 my fence. I can reach out and touch it. This is the

24 construction that you have to put up with. We're

25 talking the big earth movers. We're not talking
Page 117

1 regularly -- you know, the regular home constructions.

2 This is the -- the path site right in front of the Joe

3 Pool Dam and it's 850 feet from the dam. This is the

4 filling up the frack pond, which I said is hundreds of

5 thousands of gallons.

6 MR. THOMPSON: Thank you.

7 MS. REED: Thank you.

8 MR. THOMPSON: Any additional clarifying

9 questions for Ms. Reed?

10 MR. LAWRENCE: I'm just going to ask, how

11 many people live in the neighborhood?

12 MS. REED: In our neighborhood, we have

13 200. In Westchester, we have 4,000.

14 MR. THOMPSON: Any additional questions?

15 Okay. Thank you for your patience, Mr. Thornton. You

16 can begin your testimony.

17 MR. THORNTON: Okay. I'm Michael

18 Thornton, and I represent one of the small oil

19 operating companies that were described in earlier

20 testimony by the representatives of the various oil and

21 gas associations of which we are member of TIPRO and

22 the Alliance of Energy Producers and those such

23 organizations.

24 Our company is fortunate to have interest

25 in a few wells that have been drilled and completed
Page 118

1 using horizontal drilling and hydraulic fracking

2 technology. But these wells are operated by larger oil

3 companies and green completion methods are employed on

4 these wells and base recovery units are employed on the

5 storage vessels to reduce VOC emissions.

6 However, the mass majority -- the vast

7 majority of the wells we have an interest in are those

8 producing 20 barrels of oil per day or less. The

9 production facilities associated with these wells emit

10 very low levels of VOCs to the atmosphere. We've made

11 these calculations on these emissions as part of the

12 requirements of the new PBR for the oil and gas

13 association from the TCEQ. We share the view of the

14 previous presentations by the oil and gas associations

15 that a one rule fits all producing facilities is not

16 cost-effective and burdensome to the hundred -- to the

17 thousands of oil and gas facilities producing low

18 volumes of oil and gas in sparsely-populated areas. A

19 lot of our production in Shackelford County is reported

20 earlier and we have two people per square mile out

21 there. That's what I have. I just wanted to add that

22 to what the association said earlier.

23 MR. THOMPSON: Okay. Thank you,

24 Mr. Thornton. Clarifying questions? Bruce.

25 MR. MOORE: You mentioned that you had
Page 119

1 done calculations on your tank emissions for your TCEQ

2 permits. What did you -- did you have -- did you

3 discover a relationship between the emissions in the

4 throughput of your tanks?

5 MR. THORNTON: Yes. We used the

6 calculation methods that the TCEQ has. I think they

7 talked about that earlier, that that's some of the

8 things that would be good in your rule. They have

9 fill-in-the-blank formats that you can do the

10 calculations with. One of the problems is, is

11 getting -- for oil, especially, is getting analysis

12 with the breakdown for those calculations. It's

13 expensive. There are very few labs in the State of

14 Texas do it. It costs like $3,000 to get an analysis

15 done on an oil sample. So it is costly to the smaller

16 operators. But yes, we did those calculations and we

17 ran oil well of 11 barrels of oil per day and

18 15 barrels of oil per day, 15 barrels of produced water

19 a day, just very little gas with two -- 210 tank -- oil

20 tanks and a 200-barrel water tank and a separator

21 flow-through. And the emissions on that was less than

22 four and a half tons a year. And so -- and we're --

23 there's not an individual within two miles of the

24 facility. So, you know, they can -- you know, I can

25 understand -- we understand and we are involved in some
Page 120

1 wells that make a lot more volume than that in

2 highly-populated areas. But that's where we ask, is

3 that there's some differential made -- difference made

4 between, you know, the high-volume wells

5 highly-populated area versus the majority of the wells,

6 you know -- I think there's like 3,000 wells out in the

7 Stephen/Shackelford County area with very few people

8 out there and the average wells are way below ten

9 barrels of oil per day.

10 MR. THOMPSON: Thank you. Any additional

11 questions from anyone else? Respectfully, Mrs. Reed

12 and Mr. Thornton, thank you for your testimony. Thank

13 you very much.

14 Okay. At this time, I'd like to ask

15 Dixie Fields and Molly Rooke to come forward. Good

16 afternoon, ladies. If you could both state your names

17 and spell them for the court reporter, starting with

18 Ms. Fields, please.

19 MS. FIELDS: Spell my name?

20 MR. THOMPSON: State your name and spell

21 it for the court reporter.

22 MS. FIELDS: Okay. Dixie Fields,

23 D-i-x-i-e F-i-e-l-d-s.

24 MR. THOMPSON: Thank you. And

25 Mrs. Rooke, do the same, please.
Page 121

1 MS. ROOKE: Molly Rooke, M-o-l-l-y

2 R-o-o-k-e.

3 MR. THOMPSON: Thank you very much.

4 Mrs. Fields, you can begin with your testimony.

5 MS. FIELDS: First of all, I want to

6 thank the EPA, sincerely thank you for your time, the

7 EPA, for proposing rules that will help protect our

8 children, the public health, our environment from

9 toxins emitted by the oil and gas industry, for helping

10 clean up our air pollution and for holding the oil and

11 gas companies -- excuse me -- to the same standards as

12 other industries while making existing wells follow the

13 same rules as future wells.

14 I spoke to the planning and zoning

15 committee in January to ask them to keep the Greenman

16 drill off of Green Oaks in North Arlington away from my

17 home and our neighbors and my children. The drill is

18 now a little over a thousand feet from my home. And I

19 unfortunately know firsthand what toxins can do to our

20 health when my two and a half daughter was diagnosed

21 with leukemia.

22 On December 14th of 2006, my husband and

23 I were told that our daughter, Trinity, had leukemia,

24 which is a blood cancer. Sitting in the doctor's

25 office four month's pregnant, my first question was, is
Page 122

1 she going to die and my second question, was how did

2 this happen. This is a little emotional. Excuse me.

3 MR. THOMPSON: Take your time.

4 MS. FIELDS: It has been over four years

5 since our daughter was diagnosed with such a vicious

6 cancer. It was so vicious that it would have taken her

7 life in two weeks had we not found what had happened to

8 her. For two years and seven months, Trinity had

9 countless hospital stays, bone marrow tests, spinal

10 taps, tiny -- her little chest was stuck with needles

11 repeatedly to access her port to inject her body with

12 over 20 different chemos, steroids, alterating --

13 alternating leg shots three times a week, blood

14 transfusions, platelets and isolation from all of her

15 friends and most of her family.

16 These are just some of the challenges

17 that our two and a half year old daughter had to endure

18 for two years and seven months. As her mother, I

19 wanted and needed today know why this happened to my

20 daughter and how I could protect her. Being on the

21 family advisory counsel at Cook Children's Hospital in

22 Fort Worth, on the board of directors for the Honored

23 Hero Run, which benefits the Leukemia and Lymphoma

24 Society, and part of Team in Training, which also

25 benefits the Leukemia and Lymphoma Society, there have
Page 123

1 been millions of dollars raised to research to answer

2 the family's questions, how did my little one get

3 cancer.

4 Research from these organizations,

5 including research with individual doctors,

6 oncologists, and families I have met with over the

7 years all points to toxins in the environment as one of

8 the main causes of cancer, one being leukemia. There

9 are absolutely serious health risks for natural gas

10 drilling. I'll just -- and I know y'all know this, but

11 I'll just give you five of them.

12 The biggest one I am concerned about is

13 benzine, which I know we've heard of repeatedly. That

14 is absolutely linked with leukemia and that is in the

15 natural gas drilling. Hydrogen sulfide, heavy metals,

16 such as arsenic, barium, lead and mercury, nitrogen

17 oxide and sulfur dioxide. I truly hope for the sake of

18 our children's lives, our lives and the environment

19 that the EPA is allowed to do their job and have the

20 rules passed for much cleaner air and much better

21 regulations to hold the gas -- oil and gas companies

22 accountable for past and future wells. Thank you.

23 MR. THOMPSON: Thank you, Mrs. Reed,

24 thank you for your testimony.

25 MS. FIELDS: Fields. I'm Fields.
Page 124

1 MR. THOMPSON: I'm sorry. Mrs. Fields,

2 I'm sorry. Thank you. Are there any clarifying

3 questions? Okay. Mrs. Rooke, please.

4 MS. ROOKE: I wanted to let you know that

5 I am a mineral owner and have had oil and gas drilling

6 on my family's ranch in South Texas for many years and

7 I think we need to have stronger standards to protect

8 our health. I am -- as a volunteer, I am the clean air

9 issues coordinator for the Dallas Sierra Club.

10 The Sierra Club applauds the EPA's

11 proposal to issue comprehensive and strong rules to

12 help reduce the millions of tons of dangerous air

13 pollution currently emitted by the oil and gas

14 operations. These new safeguards are much needed to

15 replace the outdated, grossly inadequate and patchy

16 rules that now cover the industry's air pollution.

17 We urge the EPA to go even further to

18 strengthen the rules as it finalizes its plan. As the

19 oil and gas industry is one of the largest sources of

20 methane pollution, this rule must require direct

21 methane reductions and controls. Hydrogen sulfide is a

22 dangerous air pollutant with significant health effects

23 to all who are in contact with it. So this dangerous

24 gas is currently ignored and must be addressed

25 immediately.
Page 125

1 The oil and gas industry also must not be

2 allowed to flare or burn off uncaptured gas, as this is

3 still a significant source of air pollution.

4 And, finally, on more things to add, if

5 you would, please, the EPA needs to get rid of the part

6 of the rule known as the malfunction defense so that

7 the industry can't get away with polluting at unlawful

8 levels without paying any penalty while communities

9 suffer the consequences.

10 And we can expect the industry and their

11 allies to fight these changes and even may refer to

12 them as job killing or unnecessary regulations, but

13 they are neither. In fact, these regulations are

14 absolutely necessary to protect our health and our

15 communities, which are currently suffering from

16 under-regulated oil and gas operations. These new

17 rules will create more jobs and the pollution control

18 equipment sometimes even pays for itself as companies

19 stop leaks and capture oil and gas products they can

20 sell. EPA, we are counting on you to be strong and

21 hold firm on these proposed rules. Our lives depend on

22 it. Thank you.

23 MR. THOMPSON: Thank you, Mrs. Rooke.

24 Any clarifying questions for Mrs. Rooke? Okay.

25 Mrs. Fields and Mrs. Rooke, thank you very much for
Page 126

1 your testimony today. Thank you.

2 At this time, I'd like to ask Shirl Miles

3 to come forward, Shirl Miles. We're smiling because

4 there's a Shirl Miles who works in our office.

5 MS. MILES: Really?

6 MR. THOMPSON: Yes, there is. Good

7 afternoon.

8 MS. MILES: Good afternoon. Shirl Miles,

9 S-h-i-r-l, Miles, M -- like Mary -- i-l-e-s.

10 MR. THOMPSON: Thank you very much.

11 MS. MILES: I'm a private citizen. I did

12 not come prepared to speak today. I have never spoken

13 at a public place, so I feel honored and thank you for

14 giving me the opportunity.

15 There's just no way in just the short

16 five minutes that you could express all the concerns to

17 the human beings and land and the environment and the

18 creatures and the water of oil fracking. I wanted to

19 offer a couple of websites that -- I recently checked

20 out some movies at the library that showed things.

21 One is called The Fuel Film. If you go

22 to www.thefuelfilm.com, it shows that there is a cancer

23 ally and it's well known in State of Louisiana. And it

24 also shows that Louisiana is one of the biggest gas --

25 in the United States for gas production. And it shows
Page 127

1 the air quality -- I mean, you can tell by the

2 pictures. I've recently taken pictures of the Dallas

3 skyline and Fort Worth skyline. And pictures say it

4 all, but the air quality is definitely decreased since

5 oil and gas fracking and production in the State of

6 Texas.

7 There's another movie called Modern

8 Marvels -- Modern Marvels Renewable Energy that shows

9 alternatives to energy, rather than coal plants or gas,

10 oil, nuclear power, all of these that emit terrible

11 toxins into our air. And it doesn't just affect human

12 beings, but it -- if you can look at it from your

13 standpoint as a human being, you're a human being. If

14 you got sick from it, you'd want somebody to take

15 notice. Well, what if it's your wife, what if it's

16 your daughter, what if it's your granddaughter, what if

17 it's like one of these ladies that just spoke? It's

18 her child.

19 People suffer all around the entire

20 world. There are websites all over the internet from

21 not just Texas but from other areas. One is

22 www.guardian.co.uk, forward slash, environment, forward

23 slash, 2011, forward slash, SEP, forward slash, 28,

24 forward slash, S-H-A-L-E, then a hyphen and then gas, a

25 hyphen, threaten, a hyphen, bath, hyphen, springs. And
Page 128

1 it's about fracking in another country. I mean, it's

2 not just -- we're concerned because we live here in

3 this state.

4 I was born and raised in Texas. I want

5 to stay in Texas, but it's in the fair to human beings

6 just because the oil and gas industries are very strong

7 in Texas. Other alternatives need to be reached and

8 it's -- and for y'all to finally say, you know what, if

9 you're going to do this, there's going to be some rules

10 and regulations. Well, to me, that should have

11 happened in the very beginning. What business -- what

12 other business would get away with such things? Do we

13 tell that to our physicians when we go to the hospital,

14 oh, well, there's not going to be any rules and

15 regulations and just let them practice their medicine

16 without any rules or regs?

17 It needs to be -- I mean, if it's going

18 to be done, it needs to be regulated and it needs to

19 protect all people. It affects our water, it affects

20 our air. The animals are affected, the trees, the

21 grass. Everything is polluted by the fracking

22 industry. Is my time up?

23 MR. THOMPSON: No, ma'am. You still have

24 a minute.

25 MS. MILES: Okay. The effects of oil and
Page 129

1 gas drilling, the dirty oil and gas industry is the

2 second largest stationary source of global warming

3 pollution in the United States. United States is the

4 number one producer of carbon monoxide in the entire

5 world. We're the number one user of oil and gas. We

6 only have two percent that we can offer up out of the

7 United States. Why are we not seeking alternatives?

8 Texas is a strong state. We can divest and divert into

9 different things. So just wanted to say thank you for

10 your time.

11 MR. THOMPSON: Thank you, Mrs. Miles.

12 Are there any clarifying questions for Mrs. Miles?

13 Okay. Thank you again for your testimony and you did

14 really well, your first time.

15 Okay. I've just been informed that we

16 can now break for lunch and reconvene at 2 p.m.

17 (Proceedings recessed at 12:26 p.m.)

18

19

20

21

22

23

24

25
Page 130

1 REPORTER'S CERTIFICATE

2 I, SCHIAS K. CARMON-BROWN, CSR, RPR, State of

3 Texas, do hereby certify:

4 That the foregoing proceedings is a correct

5 transcription from the proceedings in the

6 above-entitled matter.

7 That the foregoing is a true and correct

8 transcript of my shorthand notes so taken.

9 I further certify that I am neither counsel

10 for, related to, nor employed by any of the parties to

11 the action in which this proceeding was taken, and

12 further that I am not financially or otherwise

13 interested in the outcome of the action.

14 DATED this 14th day of October, 2011.

15

16 _______________________________________

 SCHIAS K. CARMON-Brown, Texas CSR #7682

17 Expiration date: December 31, 2012

 ATKINSON-BAKER, INC.

18 500 North Brand Boulevard, Third Floor

 Glendale, California 91203

19 Firm Registration #32

 License Expiration: December 31, 2011

20 Telephone: 1-800-288-3376

 www.depo.com

21

22

23

24

25