Addressing Air Emissions 

from the Oil and Natural Gas Sector: 

New Source Performance Standards 

and National Emission Standards for Hazardous Air Pollutants

Briefing for OMB

June 22, 2011
Overview

• Background

– Litigation and Schedule

– Oil and gas operations overview

– Strategy

• New source performance standard (NSPS) technology 

review and recommended improvements

• Risk and technology reviews (RTR) for maximum 

achievable control technology (MACT) standards

– Oil and Gas Production

– Natural Gas Transmission and Storage

– Recommended improvements

• Potential issues

2

Draft Deliberative: Do not cite, quote, or distribute.
New Source Performance Standards (NSPS)

• Authority provided under section 111(b) of Clean Air Act

• Regulate new (i.e., constructed or modified) sources; primarily 

target the following pollutants:

– VOC (ozone precursors) 

– NOx (ozone precursors) 

– Sulfur dioxide (SO2)

– Nitrogen dioxide (NO2)

– Particulate matter (PM)

– Carbon monoxide (CO)

– Lead

• Concept – make new facilities perform as well as the best existing 

facilities (―best system of emission reduction‖)

• Must be reviewed every 8 years to determine whether technology 

advances warrant updating the requirements 

Draft Deliberative: Do not cite, quote, or distribute. 3
National Emission Standards

for Hazardous Air Pollutants (NESHAP)

• Section 112 of Clean Air Act requires EPA to control hazardous air 

pollutants (HAP) from new and existing sources

• Pollutants of primary concern from oil and natural gas sector:

– benzene, toluene, ethylbenzene, mixed xylenes (BTEX)

– n-hexane

• Concept - Standards are technology-based; require the maximum 

achievable control technology. 

• Requires risk and technology review (RTR) (CAA sections 112(f)(2) and 

112(d)(6))

– One-time residual risk assessment 8 years after promulgation to determine 

if existing rule protects public health with an ample margin of safety

– Technology review every 8 years to determine if technology advances 

warrant updating the requirements

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What We Have Done So Far 

• Two NSPS rules

– 1985 NSPS – covers VOC leak detection and repair at gas processing 

plants (facilities that remove natural gas liquids from field gas)

– 1985 NSPS – covers sulfur dioxide (SO2) emissions from gas processing 

plants 

• Two NESHAP rules

– Oil and Natural Gas Production

• 1999 MACT – covers some glycol dehydrators, storage tanks, and leak 

detection 

• 2007 Area Sources – covers only glycol dehydrators

– Natural Gas Transmission and Storage

• 1999 MACT – covers only glycol dehydrators

5

Draft Deliberative: Do not cite, quote, or distribute.
Litigation and Schedule

• 2009 WildEarth Guardians and 

San Juan Citizens Alliance 

deadline suit

• February 2010 consent decree

• Proposal July 28 (consent 

decree deadline)

• Final Feb. 28, 2012 (consent 

decree deadline)

6

Drilling Rig

Draft Deliberative: Do not cite, quote, or distribute.
Source: Adapted from American Gas Association and EPA Natural Gas STAR Program

Oil and Natural Gas Operations

Crude Oil to Refineries 

(not in this sector)

Production & Processing

1. Drilling and Well Completion

2. Producing Wells

3. Gathering Lines

4. Gathering and Boosting Compressors

5. Gas Processing Plant

7

3

1

2

4

5

6

7

8

10a

10b

10c

10d

9

Transmission & Storage

6. Transmission Compressor Stations

7. Transmission Pipeline

8. Underground Storage

Distribution (not covered by these rules)

9. Distribution Mains

10.Regulators and Meters for:

a. City Gate

b. Large Volume Customers

c. Residential Customers

d. Commercial Customer

Oil and natural gas systems encompass wells, gas gathering and processing facilities, storage, and 

transmission and distribution pipelines. These components are all important aspects of the natural gas cycle —

the process of getting natural gas out of the ground and to the end user. 
Oil and Natural Gas Sector in Perspective

• 1.1 million producing oil and gas wells 

– 500,000 producing gas wells

– 11,400 new fractured gas wells 

completed per year

– 14,000 existing gas wells re-fractured 

and completed per year

• 600 gas processing plants

• 3,000 gas transmission compression 

stations (there are thousands more 

gathering and boosting stations not 

included in this number)

• 1.5 million miles of gas pipelines

Pollutant Emissions (tpy)

(excludes engines and 

boilers)

NOx 15,000

SO2 28,000

VOCs 3,000,000

HAP 130,000

GHG (Methane) 16 million tons 

(300 MMTCO2e)

8

Note: The Oil and Natural Gas Sector accounts for 40% of all U.S. methane 

emissions. This is about 4% of all U.S. GHG emissions.

Draft Deliberative: Do not cite, quote, or distribute.
Sector Strategy 

• CAA limits what we can achieve through MACT

– Cannot aggregate wells and associated equipment to make a major source 

– Generally cannot list wells as area sources

• Get significant volatile organic compound (VOC), hazardous air pollutant 

(HAP), and methane reductions through rule improvements 

– NSPS: control 1 million tpy VOC from new and modified sources (including completion 

and workover of fracked wells); 36,000 tpy HAP co-benefits

– MACT: control 1,300 tpy HAP at new and existing sources; VOC and methane cobenefits

• Achieve methane co-benefits from new/modified sources

– 3.4 million tons, ~ 65 MMT CO2e

– About 22% of this sector’s methane emissions 

• One FR package 

– Review of two NSPS rules (significant expansion of VOC NSPS)

– Risk and technology review of two MACT rules (significant improvements)

Draft Deliberative: Do not cite, quote, or distribute. 9
NSPS Review

• Existing NSPS covers only natural gas processing plants

– No technology update is warranted for the SO2 NSPS

– Propose revision to reflect advancement in VOC equipment leak 

control at gas processing plants

• There are many unregulated VOC emission sources

– Well completions (and re-completions)

– Liquid unloading from gas wells

– Equipment leaks at upstream (exploration and production) operations

– Reciprocating and centrifugal compressors

– Pneumatic devices

– Storage vessels (condensate and crude oil tanks)

– Produced water ponds

10 Draft Deliberative: Do not cite, quote, or distribute.
Recommended NSPS Improvements

• Completion of new hydraulically fractured gas wells

– About 9,600 completions of new wells annually are not controlled

• Re-completion of existing (pre-NSPS) fracked gas wells are ―modifications‖

– Completion following re-fracking is the same process as a new completion and has 

emissions of similar magnitude and composition as an original completion

– About 10,600 re-completions annually would fit our criteria but are not controlled

• Recommendation: Regulate all completions of fracked wells (new and modified)

– Require combination of ―reduced emissions completion‖ (REC -- also referred to as 

―green completion‖) and flaring for most fracked wells 

• achieves 95% VOC reduction and 90% recovery of salable natural gas

– Require flaring in situations not meeting criteria for REC where flaring is not a hazard

– Control is not cost effective for oil wells and non-fracked gas wells

11

Reduced Emissions Completion 

(REC) Equipment

Draft Deliberative: Do not cite, quote, or distribute.
Recommended NSPS Improvements (cont’d)

• Compressors (gathering/boosting through transmission/storage)

– Centrifugal – require dry seals, seek comment on controlled wet seals as equivalent

– Reciprocating – require replacement of rod packing at 24,000 hours of operation (3 years for most 

compressors in regular use)

– Not cost effective for well pad compressors

• Storage vessels (crude oil and condensate tanks)

– Throughput > 1 bpd condensate or 21 bpd crude (6 tpy VOC) – require 95% control

– Throughput < 1 bpd condensate or 21 bpd crude (<6 tpy VOC) – low emissions and high costs do not 

warrant control 

• Pneumatic devices

– Require non-gas-actuated devices (instrument air systems) at gas processing plants

– Require ―low-bleed‖ controllers (gas emissions < 6 scfh ) at other facilities 

– Exempt applications requiring high-bleed controllers due to functional requirements

• Equipment leaks

– Leak detection and repair (LDAR) already required for gas processing plants under existing NSPS 

– Upgrade LDAR to lower leak threshold (500 ppm vs. 10,000 ppm) at gas plants

– LDAR not cost effective for production or transmission/storage segments

– Seek comment on ―look and fix‖ screening using IR camera at production facilities

• Produced water ponds

– Not enough data to propose controls at this time

– Raise in preamble; solicit comment and data on emissions and control techniques for later consideration

12 Draft Deliberative: Do not cite, quote, or distribute.
Emission Point 

or Activity

VOC

Reduction 

(tons/yr)

Methane 

Reduction 

(tons/yr)

VOC Cost 

Effectiveness 

($/ton)

Methane Cost 

Effectiveness 

(($/ton)

Total 

Nationwide 

Costs

(w/o savings)

($ million/yr)

Total

Nationwide

Costs

(w/ savings)

($ million/yr)

Well Completions 0.9 million 3.3 million (49) to 782 (14) to 217 712 (45)

Processing Plants

(equipment leaks)

392 1,411 2,508 to 3,343 697 to 928 1.3 1.0

Compressors

(reciprocating)

(centrifugal)

2,466

337

12,915

4,949

(297) to 445

(9,102) to 951

(57) to 94

(620) to 65

1.2

0.3

(0.7)

(3.1)

Pneumatics 

(production)

(trans/storage)

25,210

6

90,685

212

(821) to 13

262

(228) to 4

7

0.3

<0.1

(20.7)

<0.1

Storage Vessels

(> 6 tpy VOC )

29,654 6,490 143 to 149 652 to 680 4.4 4.2

TOTAL 1.0 

million

3.4 million

65 MMT 

CO2e

$ 738 million ($ 45 million)

(Net Savings)

Estimated Impacts of NSPS Improvements

13

Note: ―Savings‖ above are realized through recovery of salable natural gas product and through reductions

in operation and maintenance costs. Total costs shown include $18.8 million of reporting and recordkeeping costs.

Draft Deliberative: Do not cite, quote, or distribute.
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MACT Source Categories

• Oil and Natural Gas Production

– Tanks with flash emissions

– Equipment leaks

– Glycol dehydrators (area sources 

subject to GACT)

• Natural Gas Transmission and 

Storage

– Glycol dehydrators

• Highest HAP emission levels: 

benzene, toluene, ethylbenzene, 

xylenes (BTEX), and hexane

• Both MACTs provide exemptions 

and cutoffs, leaving significant 

emissions unregulated

Glycol Dehydrator

Draft Deliberative: Do not cite, quote, or distribute.
MACT Analysis

• No revision based on RTR review

– Advancement in controlling equipment leaks not cost effective

– No technology advancement is identified for glycol dehydrators and 

storage tanks

• Propose MACT for currently unregulated emissions

– Glycol dehydrators

• Establish limits for small dehydrators (<3 MMcfd Production; <10 

MMcfd Trans/Storage)

– Storage tanks

• Regulate all crude oil and condensate tanks at major sources

• Remove throughput, API gravity, and gas/oil ratio criteria

15 Draft Deliberative: Do not cite, quote, or distribute.
Emission Point or 

Activity

Facilities 

Requiring 

Control

HAP

Reduction 

(tons/yr)

HAP 

Reduction 

(percent)

HAP Cost 

Effectiveness

($/ton)

Total

Costs

($ million/yr)

Small Dehydrators

(Production) 115 458 57 7,600 3.5

Small Dehydrators

(Transmission/Storage) 19 243 88 1,500 0.4

Storage Vessels 376 589 72 16,600 9.8

TOTAL 1,290 $16 million *

Estimated Impacts of proposed MACT for 

currently unregulated emissions

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* Note: Total cost includes $2.3 million in reporting and recordkeeping costs

Draft Deliberative: Do not cite, quote, or distribute.
Conclusions from the Risk Review 

• Acceptability Determination – Baseline

– Actual emissions for the Production category pose acceptable risks (maximum 

individual risk (MIR) = 40 in one million, noncancer risks low); Allowable emissions from 

the current compliance alternative to MACT standard pose unacceptable risks (MIR = 

400 in one million)

• Proposal – remove the existing alternative to bring allowable well below 100 in one 

million

– Actual & allowable emissions from the Transmission category pose acceptable risks 

(MIRs up to 90 in one million, noncancer risks low)

• Ample Margin of Safety Determination

– Recommended changes to the MACT are cost effective and will reduce HAP emissions, 

including benzene, thereby reducing cancer risks

• MIR based on actual & allowable emissions will be 40 in one million (for Production) 

and 20 in one million (for Gas Transmission) after the proposed controls

– Proposed changes will reduce the worst-case acute hazard quotients for benzene from 

10 and 9 to 6 and 9 for the two categories (based on the REL), and to 0.1 and 0.07 

(based on the AEGL-1)

– Facility-wide: population with risks above 1 in one million is higher; this will be addressed 

by the RICE MACT

• After changes, the standards will provide an ample margin of safety to 

protect public health 17
Demographic Distribution of Cancer Risks

• For the Transmission category, results suggest African Americans may bear a disproportionate facilitywide risk burden; however, the majority of this burden is due to RICE

• For the Production category, results suggest some minorities (primarily Other & Multi-racial & Hispanic 

or Latino) may bear a disproportionate risk burden; however, the MIR is well below 100 in 1 million 

(MIR = 30)

Total

All 

Minority 

(%)

African 

American 

(%)

Other and

Multiracial 

(%)

Hispanic

or Latino 

(%)

Native 

American 

(%)

Below 

Poverty 

Level (%)

Over 25 

w/o HS 

Diploma 

(%)

Nationwide

Demographic Breakdown 285,000,000 25 12 12 14 1 13 13

MIR 

(in1 million)

Population With Risk Greater Than 1-in-1 million at Baseline

Transmission/Storage

Source Category 90 2,500 8 6 1 1 0.1 17 20

Transmission/Storage

Facility-wide 90 99,000 42 40 2 2 0.2 20 15

Production 

Source Category 30 160,000 38 12 25 22 0.7 14 10

Production

Facility-wide 30 597,000 39 8 30 34 1.3 19 16

Draft Deliberative: Do not cite, quote, or distribute. 18
Potential Issues

• Industry

– Completions of re-fracked existing gas wells (have been assumed by 

industry not to be modifications under NSPS)

– Removal of throughput, API gravity, and gas/oil ratio criteria from the 

definition of ―storage vessel‖ under the MACT

– Elimination of exemption and throughput thresholds for dehydrators

• Environmental groups

– Public groups will be strongly supportive of broad improvements to 

these rules

– Litigants and others will likely be disappointed that GHG is not 

regulated directly and that most existing sources are not affected

19 Draft Deliberative: Do not cite, quote, or distribute.
Appendix

20
Oil and Gas NSPS and NESHAP Outreach: Industry 

21

• Public Stakeholder meetings in CO and TX in August 2010 

• In addition to public meetings, EPA has met extensively with interested industry 

stakeholders since March 2010:

– American Petroleum Institute (API), Interstate Natural Gas Association of America 

(INGAA), British Petroleum, Chevron, ConocoPhillips, Devon, Encana, Enterprise, 

ExxonMobil, Marathon Oil, Shell

• API has been very active in providing pre-proposal comments to EPA:

– Represents more than 400 oil and gas member companies

– Meeting discussion topics included: available emissions data and estimation 

methodologies, latest control technologies and applicability, rule timeline/status, etc.

– Submitted detailed pre-proposal comments and supporting information to EPA 

(February 2011); major comments addressed by EPA in development of proposal 

*Note: All meeting summaries and pre-proposal comments will be available in docket 

MarchApril 2010

•Four 

informational 

meetings: API, 

BP and Devon 

•INGAA Meeting 

and Presentation 

to EH&S 

Managers

July 2010

•Meeting with 

API on emission 

control 

technologies

Aug 2010

•Public Meetings 

in TX and CO

•Targeted public 

meeting notice 

to major trade 

associations

Sept. 2010

•Conference call 

with API on 

available 

information on 

emission sources 

and emission 

controls

Oct. 2010

•API meeting 

follow-up to 

September 

conference call

Jan. 2011

•Conference call 

with API to 

notify of revised 

timeline 

Feb. 2011

•API submits 

pre-proposal 

comments

•Follow-up call 

with API on preproposal 

comments

June 2011

•API follow-up 

meeting on preproposal 

comments

Draft Deliberative: Do not cite, quote, or distribute.
Oil and Gas NSPS and NESHAP Outreach: 

NGOs, States, and Tribes

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• In addition to public meetings, EPA met extensively with interested stakeholders 

from NGOs, states and tribes:

– NGOs: Environmental Defense Fund (EDF), WildEarth Guardians, Wyoming 

Outdoor Council (WOC), Oil & Gas Accountability Project (OGAP), Natural 

Resources Defense Council (NRDC), several others

– States and State Entities: Region 3 and Region 6 states, WY, CO, Western 

States Air Resource Council (WESTAR), Western Regional Air Partnership 

(WRAP)

– Tribes: National Tribal Forum, regional tribal conferences, Alaska tribes 

• NGOs, States, and Tribes have expressed strong support of EPA’s early outreach 

efforts to date on NSPS and NESHAP

Feb. – April 

2010

•Presentation at 

WESTAR /WRAP 

Meeting

•Presentation to 

Region 6 States

•Presentation to 

Region 3 States

July 2010

•Presentation to 

National Tribal 

Forum on Air Quality

•Presentation at InterTribal Environmental 

Council Annual 

Meeting

•EPA Multi-NGO 

conference call

Aug 2010

•Public Meetings in 

TX and CO

•Presentation to 

WRAP 

•Meetings with CO 

and WY

•Presentation at Fort 

Belknap Tribal 

Energy Conference 

Sept. 2010

•Follow-up calls with 

CO and WY

•Region 10 Tribal 

Leaders Summit

Oct. 2010

•Region 10 Alaska 

Tribes conference 

call

•EPA OAQPS 

meeting with EDF, 

WOC, and OGAP

Dec. 2010

•EPA AA meeting 

with EDF, WOC, and 

OGAP

Draft Deliberative: Do not cite, quote, or distribute.
What is Involved in the Technology Review?

• The CAA requires that we review MACT standards, considering 

advances in practices, processes, and control technologies.

• This allows us to tighten existing MACT standards with cost-effective 

controls.

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What is Involved in the Risk Review?

• Decision process for residual risk

– If maximum individual cancer risk (MIR) is less than one-in-1 million and 

there are no other health impacts, then no further assessment is needed.

– If MIR is greater than 100-in-1 million or other significant health impacts are 

identified, risks are ―unacceptable‖ and must be reduced (this is not a bright 

line; uncertainties and other health factors need to be considered in this 

decision).

– If MIR is between one and 100-in-1 million, we tighten the standards if costeffective controls are available to provide an ―ample margin of safety.‖

– Also consider other endpoints, including noncancer effects, population risks, 

facility wide risks, and environmental impacts.

24
Cancer Risk Assessment: 

Baseline and Post-Control Risk Estimates

Source 

Category and 

Number of 

Facilities 

Modeled

Cancer MIR (in-1 million)

Cancer Incidence 

(cases per year)

Population with 

cancer risks at or 

above 1-in-1 million

Based on actual 

emissions

Based on 

allowable 

emissions

Baseline After 

Control Baseline After Control Baseline After Control Baseline After Control 

Oil and Natural 

Gas 

Production –

990 Facilities

40 40 400 40 0.02 0.02 160,000 160,000

Natural Gas 

Transmission 

and Storage -

321 Facilities

90 20 90 20 0.001 0.0002 2,500 600

► Cancer risk estimates are between one and 100-in-1 million (based on actual

emissions); benzene is the primary risk driver.
Chronic and Acute Noncancer Risk Assessment:

Baseline and Post-Control Risk Estimates

Source Category 

and Number of 

Facilities Modeled

Max Chronic Noncancer HI

Max Acute Noncancer HQ Based on actual 

emissions

Based on allowable 

emissions

Baseline After

Control Baseline After Control Baseline After Control

Oil and Natural 

Gas Production 

(ONGP) –

990 facilities

0.2 a 0.7 a

10 (REL)b

(benzene)

0.1 (AEGL-1) 

(benzene)

6 (REL)

(benzene)

0.1 (AEGL-1)

(benzene)

Natural Gas 

Transmission and 

Storage (NGTS) –

321 facilities

0.4 a 0.8 a

9 (REL)c 

(benzene)

0.07 (AEGL-1) 

(benzene)

9 (REL)c 

(benzene)

0.07 (AEGL-1)

(benzene)

Footnotes: a The max Chronic Noncancer HI is less than 1; therefore risks after controls were not estimated.

b 46 Production facilities (5% of total) had baseline Acute HQs > 1 using the Reference Exposure Level (REL)

c 15 Transmission & Storage facilities (5% of the total) had a baseline HQ > 1 (using the REL).

Interpretation of Acute Risk Results:

• The REL is quite protective; exceeding it does not necessarily indicate an adverse health effect.

• The highest estimated exposure after controls is about 5 times lower than the AEGL-1 (Max HQAEGL-1 = 0.2 ).

• Acute exposure estimates are worst-case. 

• Overall, we conclude acute noncancer adverse effects are unlikely, especially after controls.
27

Overall, we conclude significant acute adverse effects are 

unlikely:

– Acute exposure estimates are worst case

• Assumed 10 times actual hourly emission rate for peak short-term 

emissions

• Assume peak emissions, worst-case meteorology, and human presence 

directly downwind coincide

• More uncertain than chronic risk estimates

• Facilities commonly located in sparsely populated areas, so human 

presence less likely

– The REL is quite protective for acute noncancer risks; exceeding it 

does not necessarily indicate an effect

– Max exposure is 5X lower than the AEGL-1 (i.e., max HQAEGL-1 = 0.2)

• The AEGL-1 is a level at which mild effects can occur after short-term exposure. 

These effects are not disabling and are reversible upon cessation of exposure.

Interpretation of Potential Acute Noncancer

Risks for both source categories
• Chronic Cancer Risk

– 33 facilities have facility-wide cancer MIR of 10 or higher (17 in Production, 16 in 

Transmission & Storage)

– Maximum facility-wide cancer MIR for oil and natural gas production is 100 in-a-million

• Driven by nickel from oil-fired boilers and formaldehyde from RICE

– Maximum facility-wide cancer MIR for natural gas transmission and storage is 200 in-amillion

• Driven by formaldehyde from RICE

– Where facility-wide risks are higher than 100 in a million, the source category 

contribution is low

– RICE emissions are being addressed by the RICE MACT

• Chronic Non-cancer Risk

• Maximum facility-wide HI for oil and natural gas production is 9; for natural gas 

transmission and storage it is 80

– Driven by acrolein from RICE

– The source category contributes less than 0.4 to the HI in all cases

How do the Facility-wide Risks Compare to the Source 

Category Risks?

28