Meeting Summary

Topic: Meeting with IPAA about the unconventional oil and gas effluent 

guideline rulemaking

Meeting Date: 20 February 2013

Participants: Lisa Biddle, Jan Matuszko, Ahmar Siddiqui, Karen Milam (EPA/EAD)

Brent Ruminski (ERG)

Lee Fuller, Matt Kellogg (IPAA)

On 20 February 2013, the U.S. Environmental Protection Agency (EPA) held a meeting 

with the Independent Petroleum Association of America (IPAA) 1to discuss EPA’s effluent 

guideline (ELG) rulemaking for the unconventional oil and gas extraction industry. Lee Fuller, 

Vice President of Government Relations, and Matt Kellogg, Manager of Government Relations, 

represented the IPAA. Discussion topics included:

 Small entity activity in the oil and gas extraction industry;

 Small entity activity in unconventional oil and gas extraction; and

 Data needs and available sources for ELG development.

Attachment 1 lists the meeting participants.

Small Entity Activity in the Oil and Gas Extraction Industry

IPAA discussed background information on small entities and their operations in the oil 

and gas extraction industry. The Small Business Association (SBA) defines a small entity under 

the North American Industry Classification System (NAICS) code 211111 Oil and Gas 

Extraction as one with less than 500 employees.

2 NAICS code 211111 represents entities that are

primarily engaged in operating and/or developing oil and gas wells. Table 1 shows a breakdown 

of the number of firms, establishments, and employees by company size for oil and gas operators

with NAICS code 21111.

Table 1. 2010 U.S. Oil and Gas Extraction Entity Census Data

Company Size 

(Employees) Number of Firmsa

Number of 

Establishmentsb Number of Employees

0-4 4,409 4,420 7,255

5-9 921 938 5,968

 

1 More information on the IPAA is available online at: http://www.ipaa.org/about-ipaa/managementteam/#Government

2 The definition of a small business in the oil and gas exploration industry is available online at for NAICS 211111 

(Oil and Gas Extraction): http://www.sba.gov/sites/default/files/files/Size_Standards_Table(1).pdf
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Table 1. 2010 U.S. Oil and Gas Extraction Entity Census Data

Company Size 

(Employees) Number of Firmsa

Number of 

Establishmentsb Number of Employees

10-19 547 560 7,220

20-99 363 438 13,157

100-499 94 253 12,729

500 or more 81 912 53,173

Total 6,415 7,521 99,502

a—A firm is an business or entity consisting of a one domestic establishment or more.

b—An establishment is an business located at a single location.

Source: U.S. Department of Commerce.

3

Lee explained that small operators in the oil and gas industry are most likely to operate 

conventional wells or wells categorized as a stripper or marginal wells. Conventional wells are 

typically shallower and do not require hydraulic fracturing to produce economically. Small 

entities are more likely to afford the capital costs for these types of wells. Marginal and stripper 

wells may be conventional or unconventional wells that are either old and no longer produce at 

high rates or were unsuccessfully completed and never produced at high rates. According to 

IPPA, marginal and stripper wells are defined as:

 Marginal well—One that produces less than 15 barrels of oil or 90 thousand cubic 

feet (MCF) of natural gas per day

 Stripper well—One that produces less than 10 barrels of oil or 60 MCF of natural 

gas per day

In many cases, these are wells that large entities drilled and completed, and then sold to 

smaller entities when the well’s production dropped below the marginal level. Small entities tend 

to have lower overhead and daily operating costs, and therefore can continue to profit while 

operating a marginal or stripper well.

To provide context of the role small entities play in the oil and gas industry IPAA 

provided some key facts on the oil and gas industry, which are also available on IPAA’s 

website.4Table 2 provides a breakdown of the total number of oil and gas wells in the United 

States in 2010. In 2010, there were over 1,000,000 active oil and gas wells in the United States. 

Approximately 73 percent of all these wells were classified as marginal wells and accounted for 

15 percent of oil and gas production. IPAA suggested small entities operate the majority of these 

types of wells. 

Table 2. 2010 U.S. Marginal and Stripper Wells

Oil Wells Gas Wells

Marginal Other All Marginal Other All

Number of active wells 370,315 149,254 519,569 376,086 117,448 493,534

 

3 Available online at: http://www.census.gov/econ/susb/. 

4 More information from IPPA on the oil and gas industry is available online at: http://www.ipaa.org/economicsanalysis-international/industry-statistics/
Meeting Summary

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Table 2. 2010 U.S. Marginal and Stripper Wells

Oil Wells Gas Wells

Marginal Other All Marginal Other All

Percent of total active wells (%) 71 29 100 76 24 100

Total production 

(oil—MBO)

(gas—BCF)

363 1,871 2,233 3,085 18,247 21,332

Percent of total production (%) 16 84 100 14 86 100

Average production per day per 

wella

(oil— BPD per well)

(gas—MCFD per well)

3 34 12 22 426 118

a—Calculated based on reported data above.

Source: IPPA’s website.4

MBO—Million barrels of oil.

BCF—Billion cubic feet.

BPD—Barrels per day.

MCF—Thousand cubic feet per day.

Small Entity Activity in the Unconventional Oil and Gas Extraction Industry 

As previously mentioned, IPAA suggested that most small entities in the oil and gas 

extraction industry are likely to only operate conventional wells or wells that are classified as a 

marginal or stripper wells. Both EPA and IPAA are aware that some small entities operate wells 

in unconventional formations such as coalbed methane (CBM), tight sands, and shale but it is 

unclear how many. IPAA went on to further explain these small entities are most likely to 

operate CBM wells because these wells cost less to drill and complete than tight gas and shale 

gas wells. Through previous communication with the industry, EPA is aware that smaller entities 

do drill and complete shale gas wells. 

IPAA suggested that entities operating CBM wells, including small entities, have a larger 

variety of wastewater management practices including: underground injection, surface water 

discharge, land application, and evaporation depending on location but practices did not 

differentiate between small and large entities. This is because of the relatively low levels of 

dissolved solids in CBM wastewater compared to shale gas wastewater. IPAA went on to explain 

that entities operating shale gas wells are mostly likely to manage their wastewater only through 

reuse in fracturing or underground injection due to high levels of dissolved solids. However, 

small entities operating shale gas wells are less likely to reuse wastewater in fracturing because 

the time between completions increases storage costs.

Data Needs for Effluent Guideline Development 

The data needs for the unconventional oil and gas ELG rulemaking were discussed at the 

conclusion of the meeting. EPA is seeking data on the following topics on a basin and formation 

basis:
Meeting Summary

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 Industry profile (shale gas entity size distribution);

 Well drilling and completion costs;

 Hydraulic fracturing fluid and wastewater volumes;

 Wastewater quality; and

 Wastewater (i.e., flowback and produced water) management practices and costs.
Attachment 1

Table A-1. List of Meeting Participants

Name Affiliation Phone Email

Lee Fuller IPAA 202-857-4722 lfuller@ipaa.org

Matt Kellogg IPAA 202-857-4722 MKellogg@ipaa.org

Lisa Biddle US EPA 202-566-0350 Biddle.Lisa@epamail.epa.gov

January Matuszko US EPA 202-566-1035 Matuszko.January@epa.gov

Karen Milam US EPA 202-564-9752 Milam. Karen@epa.gov

Ahmar Siddiqui US EPA 202-566-1044 Siddiqui.Ahmar@epa.gov

Brent Ruminski ERG 703-633-1701 Brent.Ruminski@erg.com