L ONE S TAR C HAPTER

Call: 512.477.1729 . Explore, enjoy and p rotect the planet . Fax: 512.477.8526 lonestar.chapter@sierraclub.org . www.texas.sierr aclub.org . PO Box 1931, Austin, TX 78767 August 3, 2010

RE: EPA’s Comprehensive Update of Air Quality Regu lations for the Oil and Gas Sectors

Dear sir or madam,

The Lone Star Chapter of the Sierra Club appreciate s the opportunity to make comments and raise issues related to EPA’s comprehensive upd ate of air quality regulations for the oil and gas sectors. The Sierra Club encourages EPA to car efully consider these comments and questions as it promulgates new rules and regulatio ns but most importantly, encourages the EPA to carefully and fully conduct a comprehensive upda te over all aspects of oil and gas development. EPA’s proposal for new rules and regu lations should be extensive in order to facilitate best practice standards for all oil and gas development. As these industries search to develop hard to reach places and more unconventiona l finds, the EPA must be two steps ahead of industry in order to ensure that America’s air is a s clean and healthy as possible.

Introduction

State regulators and community groups have linked o il and gas development to increased

air emissions for decades. There is no doubt that as these industries develop this natural resource, air emissions of highly carcinogenic comp ounds, like benzene, volatile organic chemicals, and hydrogen sulfide are released into t he air. Further, during the refining process, major emissions are currently released and under th e failed oversight of Texas regulators, these emissions have not complied with the Clean Air Act for years. The failure of the Texas Commission on Environmental Quality’s flex permit p rogram is just one example of this state’s

failure to enforce our nation’s laws and demonstrat es why EPA must update its existing rules and regulations over the oil and gas industries.

Reports of major emissions violations are increasin g; reports of major accidents are increasing; and reports of industry putting profit before safety and human health are apparent. The EPA must do more to protect citizens as these e ntities profit off our shared natural resources. We emphasize that EPA must not miss this opportunit y. It must promulgate strong rules and regulations to force best practices on an industry that routinely sees record profits.

This must be a comprehensive update

First and foremost, the EPA needs to be as comprehe nsive as possible in reviewing and updating federal air quality regulations. All sour ces of air pollution in the oil and gas sector, including exploration, production, processing, tran smission, distribution, and storage, and all pollutants released by these sources need to be reg ulated, including greenhouse gases such as methane, odors, hazardous air pollutants, hydrogen sulfide, and smog and haze-forming gases.L ONE S TAR C HAPTER

Call: 512.477.1729 . Explore, enjoy and p rotect the planet . Fax: 512.477.8526 lonestar.chapter@sierraclub.org . www.texas.sierr aclub.org . PO Box 1931, Austin, TX 78767 It is also goes without saying that citizens, parti cularly in Texas, look to the EPA to protect us from the worst of these industries. For years, major oil refineries in the state of Texas have been operating under illegal flex permits, all owing massive emissions into our air with absolutely no oversight by our state agency or Gove rnor. Only the EPA can assure that rogue states like Texas abide by the minimum safety requi rements set by our Congress. If EPA sets the floor for these types of regulations, it must work overtime to ensure that no state undermines its

efforts.

Environmental justice must be justice for the immed iate community

While you are reviewing these rules and regulations , examine the regulations you already have in place that provide loopholes to industry or alternatives to industry that do not meet the goal of protecting our public health or environment . One example is the regulations EPA has adopted as guidelines for an industry Supplemental Environmental Project. A Supplemental Environmental Project (SEP) is an environmental pro ject that a violator voluntarily agrees to perform as part of the settlement of an enforcement action. Although the violator is not legally required to perform a SEP, the cash penalty may be lower if the company chooses to perform

one.

A SEP is only required during an enforcement action , meaning that EPA has already identified that an industry participant has violate d the law. But rather than provide for real benefit to the community most affected by that viol ation, EPA has promulgated regulations that allow industry to “pick” where to spend its money, including a category entitled “emergency planning and preparation.” This rule allows indust ry to spend its money on protections that it should already have in place but under the guise of a penalty. EPA should reconsider these regulations and promulgate guidelines for SEPs that actually benefit the immediate communities affected by the violation from the industry partici pant but still allow that participant to propose a variety of different types of projects.

Further, in adopting any new rules, the EPA should not provide exemptions to compliance in the case of startups, shutdowns, malf unctions, or any other situation. Those loopholes affect the immediate communities at a gre ater rate than any other loophole within the current rules and regulations. For the sake of pub lic health and welfare, continuous compliance needs to be assured and no community should be exem pt from this protection—particularly not the community closest in location.

Life Cycle Approach is a Necessity

Air emissions occur throughout every stage of explo ration, production and transmission and thus, should be carefully regulated throughout the entire life cycle of a well or play. Thus, with any proposed rules and regulations by EPA, EPA should examine the following nonexclusive list of potential emission points:L ONE S TAR C HAPTER

Call: 512.477.1729 . Explore, enjoy and p rotect the planet . Fax: 512.477.8526 lonestar.chapter@sierraclub.org . www.texas.sierr aclub.org . PO Box 1931, Austin, TX 78767 • Venting of wells during initial set up and mainte nance • Compression stations • Pipelines and transmission • Gathering stations and accompanied transmission • Seasonal differences in air temperatures and how such variations affect seals, pipelines, and compressing • Processing units and refineries • Worst-case scenarios for major explosions or othe r accidents

These are but a few examples of how the EPA must ex amine the entire life cycle of these industries in order to adequately protect the publi c from air emissions.

Fugitive Emissions

The EPAs regulations should also account for fugiti ve emissions as industry uses this to allow major emissions without any regulatory oversi ght. Often, fugitive emissions occur because maintenance is delayed or never done, thus increasing pollution emissions near a site for absolutely no reason. EPA should provide a floor o f regulations for these types of emissions to encourage best practices for industry participants and to ensure that the public is protected.

It is also particularly important that all sources of fugitive emissions be examined and regulated. There are multiple points where emissio ns or spills can occur—from the well bore to the pipeline. EPA should examine each potential po int source so that emissions or spills are

minimized.

After identifying the various pollution pathways, E PA should also consider its regulations in the light of worst-case scenarios and should sup port adequate regulation or bonding requirements for potential disasters. As we have s een with the BP Oil Disaster in the Gulf of Mexico, industry must be required to plan for and a nticipate major catastrophes so that both the environment and human life may be saved. It is al ways important to remember that our environmental laws protect the public health, first and foremost, and then the natural world.

Air Emissions of Benzene and other BTEX compounds s hould be closely regulated

Of particular importance in the Barnett Shale, are the unforeseen air emissions of benzene and other highly carcinogenic compounds, often refe rred to as the BTEX compounds. For example, the town of DISH, Texas – at its own expen se – found high concentrations of carcinogenic and neurotoxin compounds in ambient ai r near people’s homes. This is but one example of the interconnection between natural gas drilling and air emissions.

Likewise, citizens or municipalities should not be required to conduct baseline testing at

their own cost in order to demonstrate that industr y is at fault for the perceived changed in airL ONE S TAR C HAPTER

Call: 512.477.1729 . Explore, enjoy and p rotect the planet . Fax: 512.477.8526 lonestar.chapter@sierraclub.org . www.texas.sierr aclub.org . PO Box 1931, Austin, TX 78767 quality. Thus, the EPA should work to mandate base line testing for both air and water quality to ensure that industries that are making a profit off our natural resources adequately protect the air

we breathe and the water we drink.

Similarly, the emissions that result from frack job s, coupled with the transportation of these fluids along pipelines for disposal or in tru cks to the well site should be examined for how they impact an area’s ability to meet the National Ambient Air Quality Standards. Thus, EPA’s update of its regulations cannot simply be artifici ally limited to only one source at a time but must examine the air emissions resulting from this huge use of chemicals in hundreds of well sites in one regional area.

Best Available Controls and Technologies

EPA’s promulgated rules and regulations should forc e new pollution controls as entities seek new permits and expand drilling across the nat ion. Like with all air permits under the Clean Air Act, EPA’s new rules and regulations should req uire the most stringent pollution controls possible. But further, EPA’s new promulgated rules and regulations should focus on requiring technologies that are inherently low emitting, rath er than simply requiring add-on controls. Technologies exist now that would better protect th e public health and the environment. As the oil and gas industries expand their reach to unconv entional sources and seek to earn as much profit as possible in unconventional places, they m ust be required to use the best available controls and technologies.

Examples of basic pollution controls that should be required are (1) electric motors (rather than diesel) be used to drive gas compresso rs and other stationary infrastructure, (2) condensate tanks should be equipped with vapor reco very units to monitor and control VOC emissions, and (3) pipeline networks should be equi pped with no-bleed pneumatic valves and fittings. These basic updates could immediately pr ovide real benefit to communities but unless forced to adopt best available controls, oil and ga s entities will continue to avoid these types of updates.

Open Pits Must Be An Emission Source and Regulated

Similarly, open pits containing hazardous chemicals , or fluids or flowback, should receive added scrutiny as the evaporation process l eads to real problems in both air and water quality. Again, another easy industry fix – mandat ing a closed loop system – could alleviate this problem.

Cumulative Impacts

There are over 9,000 horizontal producing wells in the Barnett Shale and an unknown number of dry holes, disposal wells, or other types of wells. When updating the rules and regulations for the oil and gas industries, EPA mus t analyze the cumulative impacts of large scale development, and in particular, must look at the cumulative impacts on air quality. AsL ONE S TAR C HAPTER

Call: 512.477.1729 . Explore, enjoy and p rotect the planet . Fax: 512.477.8526 lonestar.chapter@sierraclub.org . www.texas.sierr aclub.org . PO Box 1931, Austin, TX 78767 thousands of wells are drilled in a gas shale play, the cumulative impacts for a region must be accounted for and protected against major pollution

.

Enforceability

The EPA needs to ensure that any proposed rules and regulations include monitoring, recordkeeping, and reporting to ensure continuous c ompliance with the standards and to allow the public, States, and the EPA to easily enforce v iolations. The importance of ensuring that these regulations are enforced cannot be stressed e nough. All too often, enforcement is an afterthought and states or regulators turn a blind eye to violations. Only with strict enforcement can the public be assured that the air we breathe i s clean and healthy. EPA must ensure that public accountability and enforcement occurs in all of its promulgated rules and regulations.

Concluding Remarks

Put simply, the nation cannot afford to make mista kes with the oil and gas industry, as evidenced by the BP Oil Disaster, the pipeline burs t near Lake Michigan, and multiple other examples that have occurred within recent years. T hank you for this opportunity to provide comments as EPA examines its current rules and regu lations affecting the oil and gas industries. Again, please take this opportunity to carefully up date these rules and regulations to ensure not only best practices but that the public health is c arefully protected.

Sincerely,

/s/ Jen Powis Lone Star Chapter of the Sierra Club