3. Availability of Equipment and T rained Personnel

**Comment:** Commenters state that the supply of REC equipment and personnel is insufficient to meet the requirements of the proposed rule, applied nationally. According to commenters, proper surface equipment, collection infrastructure and qualified personnel are not readily available; they assert that this equipment is fairly specialized, the shops licensed to make it are limited and some of the components require a long lead time. For these reasons, commenters indicate that compliance by the issuance date of the rul e would be unrealistic and that the EPA should provide a longer compliance period. **Response:** Based on information submitted by commenters, we have reason to believe that, currently, there is already significant demand for REC equipment. For example, Colorado, Wyoming, the City of Fort Worth, Texas, and the City of Southlake, Texas, require REC under certain conditions. Additionally, public comments, reports to the EPA’s Natural Gas STAR Program and press statements from companies indicate that some produce rs implement REC voluntarily , based upon economic and environmental objectives. If REC were to be immediately required, NSPS would place significant additional demands on REC equipment supply and experienced personnel. As the near

- term supply of REC equipment and trained personnel will be insufficient to meet the new national demandfor equipment and labor, immediate compliance with the REC

requirements could be impossible, potentially causing producers to delay well completions until appropriate equipment and labor

are available. Resulting delays in well completions while awaiting equipment availability could cause a decrease in the nationwide natural gas supply and would drive up the cost of completions doing RECs. It is not the EPA’s intent to set in mot ion a series of events through this rule that has the potential to affect the natural gas supply and increased cost of REC would undermine our BSER analysis. Accordingly, it is important that the EPA consider the availability of REC equipment and personnel in its BSER analysis. The EPA received data on the current and future supply of REC equipment. According to one commenter, about 300 REC units are in use today, with the ability to process about 4,000 wells per year, and 1,300 additional units would be required to perform 20,000 REC per year. About 1, 600 units performing 20,000 REC /year implies a REC productivity rate of about 12.5 REC /year/unit, or roughly each unit performing one REC per month , on average. The NS PS proposal estimated 9,300 REC performed for new natural gas well compl etions and 12,200 REC performed for existing natural gas well completions following refracturing would be required, in addition to those already required bystate regulations . In the analysis supporting the final rule,

the EPA revised estimates show 12,375 hydraulically fractured well completions will be performed in a representative year, which includes completions in states which currently have REC requirements. Of the total hydraulically fractured well completions, the EPA estimates that about 9,500 REC will be required nationally on the basis of the final rule’s provisions for wildcat (exploratory) and delineation wells, flowback gas pressure, and natural gas well completions conducted on existing gas wells that are subsequently fractured or refractured. This estimate includes REC required by state regulations. Assuming a REC unit performs 12.5 REC/year, as is asserted by the commenter, about 760 units would be required. This implies a current shortfall of about 460 units, based upon the numbers and assumptions provided by the commenter. The commenter states that industry can deliver about 50 units per quarter, after a 1

- year build

-up period. Given the EPA does not have an alternative estimate of the number of REC units industry can produce per year, we adopt the estimate of 50 units per quarter for this analysis, although the EPA disagrees with the assumption that a 1

- year build

-up period is required. Using the commenter’s assumptions, it would take about 3.5 years to meet demand. This scenario is depicted in Scenario A in Table 2 below, assuming compliance is initiated at the beginning of thesecond quarter, 2012, and the industry begins delivering 50

units per quarter roughly 1 year after the compliance date. Surveys conducted by one commenter indicate that nine companies expect to perform more REC than the current stock is capable of. Given this growing demand, it is reasonable to assume industry can deliver units during the buildup period of the first year of implementation, which would reduce the time required to meet full demand another year to a total of about 2.5 years (Scenario B). The EPA also assessed whether the productivity of equipment in use could be higher than the 12.5 REC/year/unit derived from the comment, and the potential impact of such increase on the equipment supply . The EPA estimated that flowback periods will typically be 3 to 10 days with 7 being a reasonable average. Therefore, because it is likely that a REC unit could be moved to another well site and be in operation in less than 20 to 27 days, it is reasonable to conclude that each REC unit can perform more than 12.5 REC/year. If the utilization rate of REC units is increased gradually from performing 12.5 REC /year/unit to 14 to 18 REC /year/unit, the time required to build the supply of REC units decreases (Scenarios C

- G ). As the Table 2 shows, each 1 REC/year/unit increase reduces the buildup time by about 1 quarter. As is shown in Scenario s C and G , increasing the utilization rate ofREC to 14 to 18 REC /unit/year with industry supplying new units

beginning with the compliance date would provide between 1.25 and 2 years for full build out of the REC unit supply. **Table 2. REC Unit Supply A** **nalysis**

**Scenario A**  **B C**  **D E**  **F G**  **RECs Required 9,523**  **9,523 9,523**  **9,523 9,523**  **9,523 9,523**  **RECs/year/unit 12.5**  **12.5 14.0**  **15.0 16.0**  **17.0 18.0**  **Units Needed 762**  **762 680**  **635 595**  **560 529**  **Stock in Existence (assume industry can build 50 units/quarter; assuming industry starts with 300 units); compliance begins approximately at the end**  **of the second quarter, 2012. Scenario**  **A B**  **C D**  **E F**  **G 2012 (Q1)**  **300 300**  **300 300**  **300 300**  **300 2012 (Q2)**  **300 300**  **300 300**  **300 300**  **300 2012 (Q3)**  **300 350**  **350 350**  **350 350**  **350 2012 (Q4)**  **300 400**  **400 400**  **400 400**  **400 2013 (Q1)**  **300 450**  **450 450**  **450 450**  **450 2013 (Q2)**  **300 500**  **500 500**  **500 500**  **500 2013 (Q3)**  **350 550**  **550 550**  **550 550**  **550 2013 (Q4)**  **400 600**  **600 600**  **600 600**  **2014 (Q1) 450**  **650 650**  **650 2014 (Q2)**  **500 700**  **700 2014 (Q3)**  **550 750**  **2014 (Q4) 600**  **800 2015 (Q1)**  **650 2015 (Q2)**  **700 2015 (Q3)**  **750 2015 (Q4)**  **800** Because of uncertainties in the supply of equipment and labor over the near

- term, and based on our analysis described above, the EPA concludes that REC may not always be available during the first 2 years after the promulgation of the NSPS. Therefore, during the first 2 years, the BSER for well completions is to combust completion emiss ions . REC withcombustion as an alternative to combustion is permitted by the

rule so that facilities that are able to obtain REC equipment may still capture completion emissions using a REC. After the initial 2

- year period , capturing completion emissions using a REC will be considered BSER. This 2

- year period will permit the companies producing REC units to increase production to levels sufficient to meet new demand. In addition, because more REC will be performed as a result of this rule , the EPA believes that producers will take advantage of scale economies and use REC units at a higher rate of productivity than the rate implied by comments received. The EPA believes that the NSPS, as finalized, will minimize the risks of producers slowing well completion - related activities to obtain appropriate equipment and labor . While there would be NOx formation as a result from the additional combustion of completion emissions during the phase

- in period, VOC emissions reductions would be maintained because completion emissions will be either combusted or captured. The EPA maintains that the benefit of the VOC reduction during the phase

- in period far outweighs the secondary impact of NOx formation during pit flaring. The phase

- in period would also minimize the possibi lity that the cost of REC equipment and labor increases over the near

- term, enabling producers to better plan efficient use of existing and new capital and labor, andproviding additional time for innovation in REC technologies

and/or practices . We believe this period provides ample time for this technology to be built and available for use. The EPA will monitor the availability of equipment during this 2

- year period and take action as necessary.