# MARCELLUS

SHALE COALITION

### June 16, 2014

Re: Comments on Environmental Protection Agency (EPA) Oil and Natural Gas Sector Leaks

To whom it may concern,
The Marcellus Shale Coalition (MSC), a regional trade association with a national membership, appreciates the opportunity to comment on the U.S. Environmental Protection Agency (EPA) Oil and Gas Sector Leaks.

The MSC was formed in 2008 and is currently comprised of approximately 300 producing and supply chain members who are fully committed to working with local, county, state and federal government officials and regulators to facilitate the development of the natural gas resources in the Marcellus, Utica and related geological formations. Our members represent many of the largest and most active companies in natural gas production, gathering and transmission in the country, as well as the suppliers, consultants and contractors who serve the industry. MSC member companies have a steadfast commitment to strengthen communities by making our region a better place to live, work and raise our families — for our generation and for future generations. Our members have a strong and unwavering commitment to the safety of our employees, contractors and communities. More information about our organization can be found at http://marcelluscoalition.org

. As background, the Marcellus Shale Formation is the most prolific natural gas production basin in the U.S., generating approximately 14 billion cubic feet per day and contributing more than 20% of daily U.S. supply. The Marcellus is making a significant contribution to energy security, while generating sustainable economic and environmental benefits for the nation. According to a recent economic analysis, the natural gas industry invested more than $12 billion in Pennsylvania in 2011 while supporting more than 230,000 new hires in the region. Domestically produced natural gas has provided a clean-burning energy resource for power generation that is contributing to air quality improvements in the U.S. According to the U.S. Energy Information Administration, nationwide energy-related carbon dioxide emissions dropped 3.8% in 2012 versus 2011. In addition, the U.S. Environmental Protection Agency has determined that carbon dioxide emissions from power plants decreased 10% in 2012 versus 2010. Both of these emission reductions were attributed, in large part, to the increased use of natural gas.

24 Summit Park Drive • 2 ° Fl • Pittsburgh PA 15275 I P 412.706.5160 I F 412.706.5170 I www.mamelluscoalition.org2

In addition to the specific comments below, the MSC also wishes to take this opportmity to voice our support for all comments submitted by the American Petroleum Institute (API), Western Energy Alliance (WEA), and the Interstate Natural Gas Association of America (INGAA).

1.) When discussing leaks at Oil and Gas Production locations it is important to note that upwards of 90% of the emissions from leaks are generated by 1 to 2% of the total facility components and that the UT study 2013 suggests that 66% of production facilities have
no leaks at all. 2.) The MSC suggests the possible implementation of AVO's and a vigorous preventivemaintenance program similar to that recently incorporated by the TCEQ in its permit-byrule program, instead of an overly burdensome and costly LDAR program. A preventative maintenance program using AVO would provide a platform for operators to inspect and replace components prior to failure rather than reacting to and repairing a leak at some arbitrary interval. 3.) We encourage EPA to remove references to components designed with an inherent leak rate (thief hatches, pressure relief devices, etc.) from any leak definition going forward. These devices are designed to relieve pressure for safety and must do so to ensure proper operation. 4.) Leaking from improperly controlled storage vessels as discussed in Section 1, and in that sections footnote, should not be considered a "leak" as those control devices would be regulated under a state permit or other state and/or federal regulation. 5.) The MSC feels that leaks not repaired the day they are discovered are the only ones that should require documentation. If a repair requires procurement of a part or a facility, is required to be shut-in, etc., then documentation of this should be maintained. 6.) We strongly encourage EPA to evaluate the different sectors (production, gathering, transmission, and processing) of the Oil and Gas industry separately when it comes to the economic aspect of leak detection and repair. There are different metrics for each of the industry sectors that impact economic feasibility. The EPA has also failed to perform verification of the costs referenced in the studies found in the White Paper. 7.) EPA has left out many costs associated with finding leaks as well as those associated with recordkeeping and reporting. These are significant and will affect the bottom line. The MSC recommends a more complete cost analysis be performed before any new regulations are promulgated.

MSC is concerned that the compressed time schedule for EPA to develop additional requirements for the Oil and Gas Industry will not include recent study data or recent regulatory requirements in its evaluation of any new regulations. There are numerous studies currently underway evaluating methane sources and regional methane emissions across the country, which



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### should be reviewed and considered. MSC member companies are voluntarily participating in several of these studies because the resulting information is valuable.
In addition, MSC is unsure whether the recent emission reduction requirements for the Oil and Gas Industry in Pennsylvania can be evaluated under this schedule. These requirements include NSPS 0000, Pennsylvania Department of Environmental Protection's General Permit 5 (GP5) and Pennsylvania's Exemption #38 for wellpads. MSC believes this information should be considered as additional requirements are considered for the industry.
MSC appreciates the opportunity to comment on the white paper and looks forward to further opportunities to work with EPA to develop regulations and guidelines that are economically and environmentally sound. If you have any questions, please do not hesitate to contact the undersigned.
Yours t- ly,

David`Spigel yer President



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