# E C



# / R Incorporated Providing Environmental Technical Support Since 1989

501 Eastowne Drive, Suite 25 0  Chapel Hill, North Carolina 2751 4 Telephone: (919)484

- 0222  Fax: (919) 484

- 0122 M EMORANDUM

DATE: August 30 , 2010

SUBJECT: Summary of the July 27, 2010 Teleconference Between the EPA and

Representatives of Environmental Organizations Regardin g the Oil and Natural Gas Industry

FROM: Denise Grubert , EC/R Incorporated

TO: Bruce Moore , EPA/OAQPS/SPPD/CCG

I. PURPOSE

The purpose of this memorandum is to summarize the July 27, 2010 telephone confer ence between the Environmental Protection Agency (EPA) and representatives of environmental organizations. The purpose of the meeting was to provide information about the Risk and Technology Review (RTR) of Part 63, Subparts HH and HHH (the Oil and Natura l Gas Production and the Natural Gas Transmission and Storage standards) and the 8

- year review of New Source Performance Standards (NSPS) in Part 60, Subparts KKK and LLL (Equipment Leaks of VOC and SO 2 Emissions from Onshore Natural Gas Processing Plants)

.

II. DATE

The meeting took place on July 27, 2010 from 12:00 p.m. to 1:30 p.m. at the United States Environmental Protection Agency in Research Triangle Park, North Carolina.

III. ATTENDEES

The following individuals participated in the meeting.

Ramon Alvar ez Environmental Defense Fund Thomas Au Jim Bradbury City of Fort Worth Deborah Goldberg Earthjustice Amy Mall Natural Resources Defense Council Jeremy Nichols WildEarth Guardians Joe Osborne Group Against Smog and Pollution Bruce Pendery Wyoming Out door Council Dan Randolph Earthworks Oil & Gas Accountability Project Deborah Rogers City of Fort Worth Joanne Spalding Sierra Club Amy Branning EPA/OGC

# E C



# / R Incorporated Providing Environmental Technical Support Since 1989

501 Eastowne Drive, Suite 25 0  Chapel Hill, North Carolina 2751 4 Telephone: (919)484

- 0222  Fax: (919) 484

- 0122 Jodi Howard EPA/OAQPS Alex MacPherson EPA/OAQPS
Bruce Moore EPA/OAQPS Greg Nizich EPA/OAQPS Nick Parsons EPA/OAQPS David Solomon EPA/OAQPS Denise Grubert EC/R Incorporated (Contractor for EPA) Karen Marsh EC/R Incorporated (Contractor for EPA)

IV. SUMMARY OF DISCUSSION

The discussion topics included an update of the progress of EPA’s review of the r egulations for the sector, the status of the Risk and Technology Review (RTR) and Maximum Achievable Control Technology (MACT) assessments, and methane emission requirements. Additional topics were discussed at the end of the meeting.

A. EPA’s Review in Pro gress

 EPA provided a brief overview of the regulations under review pertaining to the
Oil and Natural Gas sector along with the consent decree agreement. The public meetings that we re scheduled for August 2 and 3 in Arlington, TX and Denver, CO, res pectiv ely were also discussed. EPA explained that the current review is looking at all segments of the industry, from drilling to the house meter. It was also explained that a 114 survey will not be sent to industry but that any
informatio n available would be considered and should be provided to EPA.

 All of the information presented during this part of the discussion is included in
Attachment 1

.

 Questions raised during this portion of the discussion included the following:

a. Will the review include pipelines?
i. E PA responded that pipelines are included in the review.
b. How is EPA coordinating with Regional offices?
i. It was noted by EPA that Regions 6 and 8 have already been consulted on this project. EPA is working closely with various individuals to
obtain informat ion from studies. Additionally, contacts have been established with Regions 2 and 3. The workgroup performing the review and advising on regulatory approaches consists of representatives from the various regions and other EPA offices.

c. Will engines be cov ered under the revised regulations?
i. Stationary engines are covered under other EPA regulations and will not be covered separately under the Oil and Natural Gas regulations.3 ii. Drilling engines are considered “non

- road” engines and are covered by rules from EP A’s Office of Transportation and Air Quality (OTAQ). However, some of the participants on the call are concerned about whether drilling engines that are left stationary for over a year would be covered under OTAQ’s rule. EPA agreed to check into this

iss ue more.

B. RTR Assessment Status

 EPA stated that the only risk assessment that has been previously conducted on the Oil and Natural Gas sector was performed on glycol dehydrators and was not comprehensive. It was also noted that the current review is not a t a stage appropriate for conducting a risk analysis. However, EPA plans to use the same methods as those used on recent risk analyses and will utilize information on specific facility locations.

C. MACT Assessment Status

 EPA stated that the current review is not at a stage appropriate for conducting a thorough MACT assessment. However, EPA plans to evaluate all emission sources, including those not already regulated by the current MACT
standards.

D. Methane Requirements under NSPS

 EPA stated that co

- benefits from regulating VOC emission sources are expected even if specific greenhouse gas regulations are not promulgated

E. Additional Topics of Discussion

 Waste Disposal Facilities

o Mr. Bradbury a sked about information collected on waste disposal
facilities. He st ated that in the Barnett Shale area of Texas, these facilities are not regulated, but are permitted by the Texas Railroad Commission. These facilities are run 24 hours a day, 7 days a we ek with salt water trucks making frequent visits. Some of these sources are gravity fed, while others are part of the pipeline. Tanks are present at these disposal facilities and they are a larger volume than land farming operations. No emissions studie s have been conducted on this type of source, but Mr. Bradbury stated that ERG is in the process of conducting a study but not for the environmental regulation
basis.4  Available Information

o Mr. Alvarez stated his concern over the lack of data on this sector . He
said there is data available on downwind emissions for ambient air from the Texas Commission of Environmental Quality (TCEQ) monitoring campaigns.

o Mr. Bradbury stated that TCEQ has conducted a study showing benzene downwind from injection wells.

 In jection Wells

o Ms. Goldberg stated that Pennsylvania site do not use injection wells. Instead, produced water sites and new wastewater treatment plants were being developed to handle waste. Large impoundments are also a popular choice for waste disposal. In most cases, a central wastewater treatment plant will receive piped waste for treatment. Pennsylvania has been monitoring areas with a large number of various sources, but this data is not publically available at this time.

 Section 111(d) of the Clean Air Act

o Ms. Spalding asked if EPA plans to utilize section 111(d) of the Clean Air Act. EPA responded they would only use this if greenhouse gases are regulated.

 Scope of Future NSPS

o Mr. Nichols asked if EPA will broaden the scope of any future NSPS.

EP A responded this would be done only if warranted by a review.

o Mr. Alvarez asked what information needs to be provided to warrant adding new requirements for previously unregulated sources. EPA stated that any statutory/regulatory authority would be used a nd if information found in the review suggested a broader scope, then EPA
should do so.

 Hydraulic Fracturing

o Mr. Bradbury stated that any studies about hydraulic fracturing would be a big public concern.

 Total Source Emission Assessment

o Mr. Bradbury asked if EPA intended to conduct an assessment of a model shale field to come up with the total contribution to air quality. He stated this would allow EPA to evaluate the sector as a whole,
instead of emissions from individual sources. EPA stated this was not part of this particular project. However, EPA did state an analysis based on emissions and equipment counts could be used to determine
the total contribution.5 o Mr. Alvarez also stated that a cumulative impact analysis of the development in one particular area is very important. He asked what would be the most appropriate way to address this issue. EPA responded they would discuss this issue further.

o Ms. Spalding stated that a cost/benefit analysis of the NSPS would
include this type of assessment. EPA r esponded that they would look at what has been done before when completing the cost/benefit analysis.

 Providing Information to EPA

o Mr. Nichols and Mr. Alvarez asked how information should be provided to EPA. EPA responded that any information received pri or to proposal could be sent directly to Nick Parsons; otherwise, it should be submitted to the docket that goes with this rulemaking.6 

### ATTACHMENT 1 Oil & Natural Gas Sector Regulatory Review Update EPA and Environmental Group Teleconference

July 27, 2010

 WildEarth Guardians and San Juan Citizens Alliance filed deadline suit for failure to review 1985 NSPS (KKK, LLL) and failure to conduct risk and technology review of 1999 NESHAP (HH, HHH) covering oil and natural gas production and transmission.

o Consent Decree entered 02/04/10

o Proposal deadline 01/31/11

o Promulgation deadline 11/30/11

 Although not part of the consent decree, we agreed to conduct public meetings in the Dallas and Denver areas prior to proposal to seek information from the public to further inform our review.

o Arlington, TX Monday, 8/2/10, 12

- 4 and 6

- 10 pm

o Denver, CO Tuesday, 8/3/10, 12

- 4 and 6

- 10 pm

 Our existing rules are fairly narrow in scope, primarily covering gas processing plants and some gas transmission and storage ope rations. We believe that there are significant emissions across all segments of the industry that are not addressed by our existing rules. These segments include:

o Exploration & Production Processing

o Transmission & Storage Distribution

 During our revi ew in progress, we are identifying all significant emission points across all operations from drilling to local distribution. We are considering a comprehensive, coordinated sector approach that addresses all emission points that warrant control and the b est strategy to achieve cost

- effective multipollutant reductions

 Because our actions could target venting and leaks to control criteria and toxic pollutants, there should be significant methane co

- benefits.

 Some sources of criteria, toxics, and methane emissions not controlled by existing rules are:

o Pneumatic devices Well completions and workovers

o Condensate tanks and tank batteries Vapor displaced from truck loading

o Produced water ponds Land farming

 The project is now in the data collection and a nalysis phase, and we are looking at data from recent studies (WRAP III, CENRAP, and studies done by TCEQ and others), facility and well data from the Department of Homeland Security, conducting site visits, and have been interacting with our Natural Gas S TAR program, regional offices, stakeholders on all sides, and States. Due to the short schedule and availability of recent data, we have no plans for a section 114 survey.

 There may be significant Tribal and Environmental Justice (EJ) issues and opportun ities in this sector. We have already briefed the National Tribal Air Association and presented at a recent National Tribal Forum on Air Quality. The EJ analysis is normally conducted at the time of the risk assessment exercise as part of the Risk and Te chnology Review.

Contact:

Bruce Moore EPA Office of Air Quality Planning and Standards (919) 541

- 5460 moore.bruce@epa.gov