The Honorable Gina McCarthy, Administrator

U.S. Environmental Protection Agency

EPA West (Air Docket), Room 3334

1301 Constitution Ave., NW

Washington, DC 20004

Submitted via email to: oilandgas.whitepapers@epa.gov

Re: Penneco Oil Company Technical Comments Regarding the “White Papers on Methane 

and VOC Emissions” Posted by U.S. EPA at 

http://www.epa.gov/airquality/oilandgas/whitepapers.html on April 15, 2014

Dear Administrator McCarthy,

Penneco Oil Company (PENNECO) is an independent oil and gas exploration company. The 

company was incorporated in 1979 and is currently located in Delmont, Pennsylvania. Its

business objective is to locate and profitably produce oil and gas reserves for ours and our 

partners’ benefits in an environmentally responsible and safe manner. Through multiple

generations, PENNECO has remained a stable family-owned business. We currently operate 

more than 900 oil and gas wells throughout the Appalachian Basin and we are constantly 

seeking new ventures to expand our portfolio.

As an operator who will likely be impacted by any eventual regulatory activity resulting from 

the recently published, “White Papers on Methane and VOC Emissions” posted by the U.S. EPA, 

PENNECO is compelled to review the documents and provide comments in response. As you 

know, the five White Papers cover the following types of sources or activities within the oil and 

natural gas sectors: (1) compressors; (2) emissions from completions and ongoing production 

of hydraulically fractured oil wells; (3) leaks from natural gas production, processing, 

transmission, and storage; (4) liquids unloading; and (5) pneumatic devices. 

A common theme throughout PENNECO’s comments relates to the differences between 

conventional and unconventional operators and the anticipated costs to such conventional 

operators that would result from potential future regulatory actions concerning methane 

emissions. PENNECO is a small, conventional operator with resulting air emissions that are a 

fraction of the emissions associated with large, unconventional operations. As such, we believe 

that PENNECO, as well as other small conventional operators, would bear a disproportionate 

financial burden from any future regulatory activity that results from the U.S. EPA White 

Papers. We, therefore, submit our comments from the perspective of a small, independent 
producer and with a healthy, respectful and informed skepticism. In addition to technical 

comments regarding the U.S. EPA White Papers, PENNECO has also included a policy 

commentary discussion for U.S. EPA’s consideration regarding the perceived need to regulate 

emissions of greenhouse gases (GHG) following the White Paper technical comments. 

Comments on the “White Papers on Methane and VOC Emissions”

The U.S. EPA, through the administration’s “Strategy to Reduce Methane Emissions” is 

apparently considering additional regulation of production emissions at the wellhead (e.g., 

liquids unloading, separator dumping, thread leaks, etc.). Based upon the data presented in the 

various white papers, it is PENNECO’s overarching position that the GHG emissions estimates 

presented do not support additional regulatory action. Specific comments regarding the White 

Papers are presented below.

Oil and Natural Gas Sector Liquids Unloading Processes

Comment No. 1): According to Table 2-2, the vast majority of wells in the study group 

generated an annual unloading measure of less than 3 1⁄2 metric tons. The Greenhouse Gas 

Reporting Rule1defines an onshore petroleum and natural gas production “facility” as “all 

petroleum or natural gas equipment on a single well-pad or associated with a single well-pad 

and CO2 EOR operations that are under common ownership or common control including leased, 

rented, or contracted activities by an onshore petroleum and natural gas production owner or 

operator and that are located in a single hydrocarbon basin...”. The “facility” is an affected 

facility if actual GHG emissions exceed 25,000 metric tons per year of carbon dioxide equivalent 

(CO2e). Based on the emissions specifics of the study, an operator would need to own over 

7,000 emitting wells in the same basin before it registered on the reporting radar. By this 

standard, very few independent operators would reach this level of scrutiny. PENNECO 

suggests that a general applicability threshold be established to ensure that future regulatory 

actions associated with the various white papers do not disproportionately impact small 

operators. 

Comment No. 2): The authors of this paper distinguish “conventional” wells from those that 

are hydraulically fractured (2.2 last paragraph). The intimation is that, according to the “study” 

definition, a conventional well is one that is producing naturally without the assistance of 

hydraulic stimulation. This is not consistent with the definitive distinction made in Pennsylvania 

law. In Pennsylvania, the term conventional is specific to the target formation’s composition 

and depth, not the technology used in the process of exploiting it. Under Pennsylvania law 

shallower wells are not heavily regulated due in part to their emissions profile even if they are 

hydraulically fractured. PENNECO suggests that a universal definition of “conventional well” be 

established and applied throughout the country to ensure regulatory consistency between 

state and Federal requirements in any subsequent regulations and to avoid unnecessary 

regulation. 

 

1

See 40 CFR Part 98 Subpart W - §98.238 Definitions (http://www.ecfr.gov/cgi-bin/textidx?SID=29a252bc4f8413ed2af8b20bc7972831&node=40:22.0.1.1.3.23.1.9&rgn=div8)
Comment No. 3): The authors of this paper admit that the sampling size was “insufficient,” that 

liquids unloading can vary dramatically from well to well and basin to basin, and that a much 

larger sampling of unloading events is required before the data can carry any practical 

relevance (2.4 last paragraphs). PENNECO agrees with this assertion and strongly suggests that 

additional studies be undertaken to ensure: 1) that the emissions estimates associated with 

liquids unloading merit regulation and 2) the cost burden of any resulting regulatory activity 

associated with liquids unloading are fair and equitable from the small operator’s perspective. 

Comment No. 4): As wells age and reservoir pressures decline, system line pressures may 

prevent the option of lifting a plunger load without purging to the atmosphere. If producers are 

required to limit unloading by tripping the plunger through the separator, this will effectively 

render many existing wells unproductive. Such a requirement could be devastating to a small 

operator that depends on marginal production associated with aging wells. Consistent with the 

previous comments, PENNECO suggests that any future regulatory action that is based on the 

information contained in the white papers do not disproportionately impact small operators. 

Oil and Natural Gas Sector Leaks

Comment No. 1): There is a specific reference to “oil and gas production from unconventional 

formations” in the introduction. The intimation of this detail suggests that shale development 

is the primary sector of oil and gas development that is targeted in this study, thereby placing 

conventional operations in a class of lesser impact. PENNECO suggests that any future 

regulatory actions that occur as a result of this white paper properly account for the differences 

in the emission profiles between conventional and unconventional oil and gas wells.

Comment No. 2): According to Table 2.2, an average Pennsylvania gas well with a separator, 

meter, and piping exhibits approximately 6 mcf of methane leak emissions per year. A good 

well requiring a heater, in addition to the components accounted for in an average well, 

exhibits approximately 11 mcf of methane leak emissions per year. A compressor with a 

dehydrator unit is estimated to exhibit approximately 12 mcf of methane leak emissions per 

year. PENNECO suggests that U.S EPA focus scarce fiscal resources on far more significant 

sources of atmospheric insult and that any resulting future regulatory action that is based on 

the information contained in the white papers does not disproportionately impact small 

operators. 

Comment No. 3): One of the methods proposed for calculating emissions would require that 

operators report a well equipment inventory at each site in order to plug in leak emissions 

factors that may or may not be relevant to that site or to the equipment at that site. Just 

because a study establishes an average leak emission factor for a particular piece of equipment, 

doesn’t mean that the calculation is applicable to each appurtenance at each site. Rather than 

focus scarce fiscal resources on estimating minor sources of GHG, why not direct resources to

the development and imposition of periodic leak detection and repair (LDAR) programs and 

encourage such activities by rewarding operators with exemptions from permitting 

requirements, etc., in response. The Pennsylvania Department of Environmental Protection 

(PADEP) has taken this approach and has achieved success and acceptance from both large and 

small operators. 
Comment No. 4): According to Table 2-6, a Pennsylvania well with a heater, separator, and 

meter will exhibit an annual methane leak emission of 0.24 metric tons. Based on the 

insignificant emissions associated with Pennsylvania wells as indicated in Table 2-6, PENNECO 

suggests that the U.S. EPA consider exempting the Northeast production sector from future 

regulatory activity associated with oil and gas sector leaks.

Comment No. 5): The authors of this paper recommend an economic analysis (cost of repair 

vs. value of leaked gas) as the overarching litmus test in determining whether a leak is given 

attention. Since the first commercial gas well was plumbed and pipelined for service in 

Murrysville, Pennsylvania, operators have been guided by economics and safety concerns 

without necessity of government intervention. If it makes economic sense to capture the gas, 

operators have and will continue to do so. If excess gas poses a safety concern, it will be flared.

In other words, operators are well equipped to make such decisions based on market 

knowledge, site specific cost structure, and experience and the paper is re-stating the obvious. 

PENNECO suggests that the white paper for oil and natural gas sector leaks acknowledge the 

experience and expertise of operators to make decisions related to the cost-benefit of 

performing leak repairs and avoid unnecessary regulation. 

Oil and Natural Gas Sector Hydraulically Fractured Oil Well Completions and Associated Gas 

during Ongoing Production

Comment No.1): There is a specific reference to “oil and gas production from unconventional 

formations” in the introduction. The intimation of this detail suggests that shale development 

is the primary sector of oil and gas development that is targeted in this study, thereby placing 

conventional operations in a class of lesser impact. PENNECO suggests that any future 

regulatory actions that occur as a result of this white paper properly account for the differences 

in the emission profiles between conventional and unconventional oil and gas wells.

Comment No. 2): Based on the regional uniqueness of the Bakken oil, the reach of any 

regulation resulting from the FBRI data used in the Fort Berthold FIP should be confined to oil 

shale plays only. PENNECO suggests that any regulatory activity resulting from data developed 

from oil shale plays included in this white paper be limited to operators in shale plays. 

Comment No. 3): Because the HPDI study data used by ERG and EC/R represented emissions 

from “hydraulically fractured, unconventional wells,” the reach of any associated regulation 

should be confined to shale oil plays only. PENNECO suggests that any regulatory activity 

resulting from data developed from oil shale plays included in this white paper be limited to 

operators in shale plays.

Comment No. 4): Because the HPDI study data used by EDF and EDF/Stratus represented 

emissions from completions of “unconventional oil play formations,” the reach of any 

associated regulation should be confined to oil shale plays only. Again PENNECO suggests that 

any regulatory activity resulting from data developed from oil shale plays included in this white 

paper be limited to operators in shale plays.

Comment No. 5): Because the HPDI study data used by Novim represented emissions from 

“hydraulically fractured oil” completions in formations that are primarily characterized as shale, 
the reach of any associated regulation should be confined to oil shale plays only. PENNECO 

suggests that any regulatory activity resulting from data developed from oil shale plays included 

in this white paper be limited to operators in shale plays.

Comment No. 6): The mitigation techniques mentioned by the authors of this white paper 

(flares, reduced emission completions or RECs, combustion devices, natural gas liquid (NGL) 

recovery, reinjection, and electricity generation) are based on completion and production 

characteristics specific to unconventional oil wells, therefore the reach of any associated 

regulation should be confined to oil shale plays only. PENNECO suggests that any regulatory 

activity resulting from data developed from oil shale plays included in this white paper be 

limited to operators in shale plays.

Oil and Natural Gas Sector Compressors

Comment No. 1): There is a specific reference to “oil and gas production from unconventional 

formations” in the introduction. The intimation of this detail suggests that shale development 

is the primary sector of oil and gas development that is targeted in this study, thereby placing 

conventional operations in a class of lesser impact. PENNECO suggests that any future 

regulatory actions that occur as a result of this white paper properly account for the differences 

in the emission profiles between conventional and unconventional oil and gas wells.

Comment No. 2): Because compressors vary significantly in component size, pressure rating, 

pump capacity, stroke count, revolutions, etc., it is difficult to make broad emissions 

assignments. PENNECO suggests that any future regulatory actions that occur as a result of this 

white paper properly account for the differences in the emission profiles between conventional 

and unconventional oil and gas wells. 

Oil and Natural Gas Sector Pneumatic Devices

Comment No. 1): Because emissions from pneumatic devices vary based on construct, 

pressure, stroke count, etc., it is difficult to make blanket emissions assignments. The 

production needs of conventional operations are far more modest than the growing 

unconventional sector and should be exempt from any emissions regulation of surface 

appurtenances. PENNECO suggests that any future regulatory actions that occur as a result of 

this white paper properly account for the differences in the emission profiles between 

conventional and unconventional oil and gas wells.

General Comment

PENNECO recognizes the time, effort, and cost associated with the development of the five 

white papers discussed herein and appreciates the findings expressed within each document. 

However, it is the opinion of this reviewer that primary regulatory oversight of the national oil 

and natural gas sector should be left to the discretion of the States, taking into consideration 

the findings of the U.S. EPA as articulated in the white papers and in other taxpayer funded 

research endeavors. State specific regulatory agencies are in regular communication with 

operators in their specific states or region and are much more cognizant of the unique 

challenges faced by the operators within their geographic and jurisdictional regions. As such, 
regulatory vetting is far more credible and prone to constructive dialogue at the state/local 

level than with Washington.

Policy Commentary Discussion

With all of the attention being given to climate change, its detriment to the planet, and 

regulatory solutions to mitigate its impact, one gets the impression that the industrious product 

of human inventiveness has pushed earth’s atmosphere to the precipitous brink of its lifesustaining balance. However, when you take look at the facts concerning the actual 

atmospheric composition, there is reason to suspect that there is more in play here than just 

stewardship and environmental preservation.

According to the Fundamentals eBook of PhysicalGeography.net2, the atmosphere is made up 

of primarily 11 gases. Of these eleven, three are compounds that are regulated as Greenhouse 

Gases (GHG). They are carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). Combined 

these three gases comprise nearly 0.04% of Earth’s total atmospheric composition (CO2 -

0.036%, CH4 – 0.00017%, and N2O – 0.00003%). Of the three atmospheric gases that comprise 

GHG, CO2 makes up over 95%. The U.S. EPA regulates emissions of these three natural 

atmospheric constituents, as well as emissions of manmade hydrofluorocarbons, 

perfluorocarbons, and sulfur hexafluoride, as GHGs based on their perceived contribution to 

climate change. Despite the cries of a ‘feedback loop’ or accelerated cycle by climate change 

alarmists, the hard fact remains that CO2 and CH4 make up less than 1% of greenhouse gases in 

our atmosphere.

The question begs, of all atmospheric CO2 gas (0.036% of total atmospheric gas composition), 

how much of it is naturally occurring in the carbon cycle and how much of it is introduced by 

life improvement ingenuity of human beings? Most resources on the subject agree that 

naturally occurring carbon emissions makes up 96% of the 0.036% total atmospheric CO2

leaving only 3.7% of the 0.036% total (or 0.0013%) to be considered anthropogenic or manmade. Of the total CO2 emissions assigned to human introduction (3.7%), only 8.4% of that is 

attributed to “fossil fuel retrieval, processing, and distribution.” This means that the U.S. EPA 

and other environmental agencies are intending to regulate an industry sector that may be 

responsible for one ten-thousandth of a percent (0.0001%) of a contribution to the atmosphere 

as it relates to CO2. 

The case for CH4 is similar. Of all atmospheric CH4 (0.00017% total atmospheric composition), 

64% of it can be assigned to nature (wetlands, bio-ruminants, termites, oceans). Of the 36% 

that is credited to anthropogenic introduction (36% of 0.00017% or 0.00006% of total 

atmospheric content), only half of that is assigned to the energy sector. This means that the 

U.S. EPA and other environmental agencies are intending to regulate an industry sector that 

may be responsible for a 0.00003% contribution to the atmosphere as it relates to methane.

 

2

See: http://www.physicalgeography.net/fundamentals/contents.html
Combined, the GHG contribution of concern constitutes a composition of earth’s atmosphere at 

a measure of 0.00013%. The U.S. EPA would like us to believe that the atmosphere is teetering 

on a delicate balance and that industry is the ample straw that will turn the poor camel into a 

motionless heap. The truth is the constitutional fluctuations over which the environmental 

regulators are clamoring are so insanely miniscule that any notion of legislation should be 

scoffed and any propagator shamefaced. The hype over GHG emissions and the need to 

regulate seems to be more political at its core than it is rooted in science. Politicians are 

capitalizing on the environmental sensibilities of good people by presenting weather related 

catastrophes as the inevitable result of selfish lifestyle choices like driving an SUV or comfort 

conditioning a home. We are rebuked with the mantra that ‘we all need to do our part’ for the 

sake of the planet and its most vulnerable inhabitants. 

Every good story needs a villain. In the tale of global warming and climate change, the dark 

figure is industrial America. The hero is government who constrains the civil tyrant and ensures 

clean air and stable coastlines for all good citizens of the world. The problem is, while the story 

is a fable, the imposition of this political storyline is very real.

The white papers mention that the U.S. submits our GHG Inventory to the United Nations 

Framework Convention on Climate Change. Why? Why are we compelled to report our 

emissions to the U.N. as a transgressor to a lord? What stake does the U.N. have in our national 

economy or innovation? Perhaps the stake is greater than any of us ever wish to imagine. 

When the largest percentage of the atmospheric gases of concern are introduced naturally, 

how can any anthropogenic fraction of the U.S. be considered a detriment, labeled a pollutant, 

and tagged for regulation when on the world stage, China emits twice our industrial totals? 

While we find ourselves under the increasing burden of compliance rule, developing nations are 

supplanting our self-imposed, high-priced emissions indulgences many times over. We are told 

that our conscience holds us to a higher standard, but for what environmental benefit and at 

what national cost?

We appreciate the opportunity to provide comments on the White Papers and thank you in 

advance for your anticipated consideration.

 

Respectfully submitted,

Penneco Oil Company

D. Marc Jacobs, Jr.

Senior Vice President