### P ROPOSED 

### R EGULATORY 

### L ANGUAGE 

### R EVISIONS July 29, 2011 API is continuing to address topi cs discussed during the May 26 an d June 6, 2011 meetings with EPA. Two items are included here: 1) Proposed definition of a “tight reservoir”; and 2) Proposed regulatory language providing an approach to extrapolate flow-back volumes for gas well workovers and comp letions across a sub-basin category. Definition of “Tight Reservoir” API proposes the following definition to clarify the meaning of a “Tight Reservoir”: For Subpart W, a tight reservoir is an unconve ntional reservoir, excluding CBM and shale formations, that cannot be produced at econom ic flow rates or recover economic volumes of oil or natural gas unless the well is stimul ated by a hydraulic fracture treatment. Flow-back Volume Normalization During the May 26, 2011 meeting, EPA had outlined an approach to extrapolate measured or quantified flow-back volumes for gas well comp letions and workovers across all workovers and completions in the sub-basin category. Th e following provides proposed mark-ups to the regulatory language to incorporate this approach. Our revisions for the flow-back volume normalization approach are indicated in blue text . These are added to the revisions addressing the sub-basin category approach pr ovided to EPA on June 22, 2011, shown in red text. API’s revisions include a modification to E quation W-10 that consists of removing the subtraction of the SG term. API is proposing to define the “flow-back volume” term in Equation W-10 by limiting it only to the time span during which gas is actually vented to the atmosphere or flared. These proposed revision s add clarity, simplify the calculation, and reflect the emissions characteristics of flow-back operations. Without the removal of the SG term, Equation W-10 has the potential to either lead to the calculation of a negative emissions value, or compare emissions values vented to the atmosphere to sales values that are produced against the back-pressure of a gatherin g or sales pipeline; these are two completely different operating scenarios. Please note that these proposed regulatory revisions do not yet address changes to Methodology 2 under §98.233(g). API is working to develop an alternative approach to Equations W-11 and W-12, but this is a difficult technical challenge. API intends to address this separately with EPA.1 o f 288

(g) Gas well venting during completions and workovers from hydraulic fracturing. Calculate CH 4 , CO 2 and N 2 O (when flared) annual emissions from gas well venting during completions involving hydraulic fracturing in wells and well workovers using Equa tion W-10 of thi s section. Both CH 4 and
CO 2 volumetric and mass emissions shall be calculated from volumetric total gas emissions using cal culations in paragraphs (u) and ( v) of this section.

E a,n = ( T*FR ∑ Flow-back Volume well ) – EnF

- SG (Eq. W-10)
Where:

E a,n = Annual volumetric total gas emissions in cubic feet at standard con ditions from gas well venting during completions and workovers following hydraulic fracturing. Flow-back Volume Well = Volume of flow-back gas from completions and workovers for the time that gas is vented to the atmosphere or a flare, in cubic feet at standard conditions from Equation W-YY T = Cumulative amount of time in hours of all well completion vent ing in a field during the year reporting. FR = Average flow rate in cu bic feet per hour, under actual conditions, con verted to standard conditions, as required in par agraph (g)(1) of this section. EnF = Volume of CO 2 or N 2 injected gas in cubic feet at standard condition s that was inj ected into the reservoir during an energized fracture job. If the fracture process did not inject gas into the reservoir, then EnF is 0. If injected gas is CO 2 then EnF is 0. SG = Volume of natural gas in cubic feet at standard conditions that was recovered into a sales pipeline. If no gas was recovered for sales, SG is 0.

(1) The average flow rate for gas well venting to the2 o f 288
atmosphere or to a flare during well completions and workovers from hydraulic fractur ing shall be determined using either of the calculation methodologies described in this paragraph (g)(1) of this section.

(i) Calculation Methodology 1. For one horizontal well completion and one vertical well completion in each gas producing sub-basin catego ry field and for one horizontal well workover and one verti cal well workover in each gas producing sub-basin ca tegory field , a recording flow meter (digital or analog) shall be installed on the vent line, ahead of a flare if used, to measure the backflow venting event according to methods se t forth in §98.234(b).
(A) The average flow rate in standard cubic feet per hour of venting to the atmosphere or routed to a flare is determined from the flow recording over the period of backflow venting to the atmosphe re or a flare

.
(B) The respective average flow rates for the
horizontal and vertical wells are used to determine a volume factor (VF) to be applied to all horizontal and vertical gas well completions , respectively, in the producing sub-basin category field and to all horizontal and vertical well
workovers , respectively, in the gas producing sub-basin category for the total number of hours of venting to the atmosphere or a flare of each of these wells as described in paragraph (g)(2) of this section.3 o f 288

(C) New flow rates for completions and workovers are measured every other calendar year for each reporting gas producing sub-basin category field and gas producing geologic horizon in each gas producing field starting in the first calendar year of data collection.
(D) Calculate total volumetric flow rate at standard conditions using cal culations in paragraph (t) of this section.
(ii) Calculation Methodology 2. For one horizontal

gas well completion and one vertical gas well completion in each gas producing sub-basin category field and for one
horizontal well workover and one vertical well workover in each gas producing sub-basin category field , record the well flowing pressure upstream (and downstream in subsonic flow) of a well choke accord ing to methods set forth in §98.234(b) to calculate intermittent well flow rate of gas during venting to the atmosphere or a flare. Calculate emissions using Equation W-11 of this section for subsonic flow or Equation W-12 of this sectio n for sonic flow:4 o f 288

(A) The average flow rate in standard cubic feet per hour of venting to the atmosphere or flaring across the choke is calculated for one horizontal well completion and one vertical well completion in each gas producing sub-basin5 o f 288

category field and for one horizontal well workover and one vertical well workover in each gas producing sub-basin category field by averaging the gas flow rates during venting to the atmosphere or routing to a flare. (B) The horizontal and verti cal respective flow rates are
used to determine a volume factor (VF) to be applied to all
horizontal and vertical well completions , respectively in the gas producing sub-basin category field and to all horizontal
and vertical well workovers , respectively, in the gas producing sub-basin category field for the total number of hours of venting to the atmosphere or a flare of each of
these wells as described in paragraph (g)(2) of this
section.

(C) Average f low rates for horizontal and vertical gas well completions and for horizontal and verti cal gas well workovers in each sub-basin category field shall be calculated once every two years for each reporting gas producing field and geologic horizon in each gas producing field starting in the first calendar year of data collection.
(D) Calculate total volumetric fl ow rate at standard conditions using calculations in paragraph (t) of this section.

(2) The average flow rates per hour determined in paragraph (g)(1) above shall be used to determin e a flowback volume factor (V F) as follows.

(A) Determine the aver age production rate per6 o f 288

hour for the first calendar mo nth after well completion or well workover ope rations have ended and the well has been routed to normal production for w ell(s) measured or calculated in paragraphs (g)(1) abov e and all well completions or workovers. For wells routed to normal production late in a calendar year this period can extend into the following cale ndar year. Calculate this average hourly product ion rate as follows:

PR= (Total Produ ction in standard cubic feet) /total hours of production in the first calendar month)

If a well, measured or calculated in paragraph (g)(1), is not put on production for a calendar month following comp letion/workover an d flow-back it cannot be used for determination of an emission factor and another well must be measured or calculated as detailed in paragraph (g)(1) and used for determ ination of a volume factor.

(B) Calculate a flow-back volume factor (in scf flow-back rate/h r per scf of production rate per /hr) as follows:

VF Flow-back = FR /PR (Equation W-XX)

Where:

VF Flow-back = Flow-back vo lume factor, dimensionless
FR= Average flow back rate of gas vented to the atmosphere or a flare in standard cubic feet per hour as determined in paragraph (g)(1)of thi s section.7 o f 288

PR = Average pro duction rate in standa rd cubic feet per hour as determin ed in paragr aph (g)(2) of this section.

(C) Apply the flow-back volume factor from Equation W-XX to all well completions in the gas producing subbasin category and to all well workovers in the gas producing sub-basin category to determine volume of flow-back gas from well flow-back post fracture stimulation. Calculate the flow-back volume for each well completion and workover as follows:

Flow-back Volume well = VF Flow-back *PR well *HR well (Equation W-YY)

Where:

Flow-back Volume well = standard cubic feet of gas vented to the atmosphere or a flare resulting from flow-back for the subject well.

VF Flow-back = The flow-back volume factor calculated in paragraph (g)(2)(B) of this section (Equation W-XX)

PR well = The hourly production volume, in standard cubic feet per hour for each well as calculated in paragraph (g)(2)(A) of this section.

HR well = Total hours the subject well was flowed

back vented to the atmosphere or a flare post fracture stimulation before being routed to production.
If production of a well is delayed and the first calendar month of production is not available then use the average hourly flow rate of recent wells in the8 o f 288

same field during the first calendar month. This average hourly flow rate shall be determined from company records or engineering estimates.

( 2 3 ) The volume of CO 2 or N 2 injected into the well reservoir during energized hydraulic fractures will be measured usi ng an appropri ate meter as described in 98.234(b) or using receipts of gas purchases that are used for the energized fracture job.
(i) Calculate gas volume at standard conditions using calculations in paragraph (t) of this section. (ii) [Reserved]

(3) The volume of recovered completion or workover gas sent to a sales line will be measure d using existing company records. If data does not exist on sales gas, then an appropriate meter as described in 98.234(b) may be used.
(i) Calculate gas volume at standard condi tions using calculations in paragraph (t) of this section. (ii) [Reserved]

(4) Both CH 4 and CO 2 volumetric and mass emissions shall be calculated from volumetric total emissions using calculations in paragraphs (u) and (v) of this section.
(5 ) Determine if the well completion or workover from hydraulic fracturing r ecovered gas with purpose designed equipment that separates saleable gas from the backflow, and sent this gas to a sales line (e.g. reduced emissions completion).9 o f 288

(i) Use the factor SG in Equation W

- 10 of this section, to adjust the emissions estimated in paragraphs (g)(1) through (g)(4) of this section by the magnitude of emissions captured using reduced emission completions as determined by engineering estimate based on best available data. (ii) [Reserved]
( 5 6 ) Calculate annual emissions from gas well venting during well completions and workovers from hydraulic fracturing to flares as follows:
(i) Use the total ga s well venting volume during well completions and workovers as determined in paragraph (g) of this section.
(ii) Use the calculati on methodology of flare stacks in paragraph (n) of this section to determine gas well venting during well completi ons and workovers using hydraulic fract uring emissions from the flare. This adjustment to emissions from completions using flaring versus completion s without flaring accounts for the conversion of CH 4 to CO 2 in the flare.