From: Akachi Imegwu/DC/USEPA/US

To: Karin Ritter <Ri tterk@api.org>

Cc: Roger Fernandez/DC/USEPA/US@EPA, Ragan Tate/ DC/USEPA/US@EPA, Kate Cardamone/DC/USEPA/US@ E

Date: 05/17/2010 05:05 PM

Subject: Re: API Question Regarding Wells Impacted: Subpart W

Hello Karin,

The Administrator signed a proposed supplemental rule on March 22, 2010 (75 FR 18608, April

12, 2010) to require reporting of greenhouse ga s (GHG) emissions from petroleum and natural

gas systems ("proposed rule"). The comment period on the proposed rule closes on June 11,

2010. The proposed rule describes how official comments should be provided. To be

considered, comments should be provided in the time and manner described therein. Any

communication on the proposed rule before close of the comment period is intended to provide

general and administrative information about the proposed rule. This communication does not

provide legal advice, and responses to questions received do not have legally binding effect or

expressly or implicitly create, expand, or limit any legal rights, obligations, responsibilities,

expectations, or benefits in regard to any perso n. Facility owners or operators and suppliers are

responsible for determining how they would be affected by the requirements of the rule.

EPA conducted extensive analysis on the various costs as sociated with the proposed rule.

Complete details of the economic impacts of t he proposed rule can be found in the text of the

Economic Impact Analysis for the Mandatory Re porting of Greenhouse Gas Emissions under

Subpart W Supplemental Rule. In addition, fu rther related information can be found on EPA's

reporting threshold analysis in the related Technical Support Document. See,

http://www.epa.gov/climatechange/ emissions/subpart/w.html

Sincerely,

____________________________ Akachi N. Imegwu

Climate Change Division

Office of Air and Radiation

US Environmental Protection Agency

p(202) 343-9709

Any communication on the mandatory GHG reporting rule is intended to provide general and

administrative information about the Rule. This communication does not provide legal advice, and

responses to questions received do not have legally binding effect or expressly or implicitly

create, expand, or limit any legal rights, obligatio ns, responsibilities, expectations, or benefits in

regard to any person. Facility owners or operat ors and suppliers are responsible for determining

how they would be affected by the requirements of the rule.

From: "Karin Ritter" < Ritterk@api.org>

To: Roger Fernandez/DC/USEPA/US@EPA

Cc: Akachi Imegwu/DC/USEPA/US@EPA

Date: 04/28/2010 10:56 AM

Subject: API Question Regarding Wells Impacted: Subpart WRoger,

During the April 20, 2010 meeting with EPA staff on Subpart W, API members commented that

the cost estimates for impact on the industry appear too low by an order of magnitude. API

members made a simple calculation to obtain a rough estimate of labor time required to

determine the number of fugitive components at oil and gas production wells, based on an

estimated 750,000 wells in the U.S. In response, EPA commented that the Economic Impact

Analysis (EIA) determined, given the 25,000 tonne CO2e threshold and the basin

‐ level facility

definition, that only 4% of wells would be impacted by the rule, but not all 750,000.

API looked deeper in the EIA analysis to learn that the 4% value cited by EPA relates to 4% of

"facilities" being covered by the rule at the 25,000 tonnes CO2e threshold and the basin

definition for facility. As shown in Table W

‐ 2, 4% represents 1,232 "facilities" out of a total of

27,993 "facilities" that would have to report under subpart W. We assume that the 27,993

“facilities” equates to the sum of the number of operators in each basin and is not reflective of

the number of wells potentially covered if all 27,993 “facilities” were covered (750,000). Table

W

‐ 2 also shows that this 4% of "facilities" account for 81% of the emissions. We are struggling to

understand how 4% of "facilities" can account for 81% of emissions without covering 81% of the

individual sites/wells. WE request EPA to provide details of how this conclusion was made, since

in our view, 81% of the emissions would also be represented by roughly the same percentage of

wells (~607,500 wells)!

Neither the EIA nor the preamble to subpart W explain in detail how these “facility” counts were

determined, and how the emissions were allocated to these "facilities" to evaluate the different

thresholds. We believe our comment that the economic impact is significantly underestimated

remains valid, and request EPA to provide further details on the allocation of emissions to

"facilities" as defined in the proposed rule. In particular, please provide the "equipment activity

(that) was estimated at the field

‐ level and aggregated to the national level then apportioned to

individual operators in basins by production rates" as mentioned in the EIA (page 4

‐ 5).

Regards,

Karin Ritter

Regulatory and Scientific Affairs

+1 (202) 682- 8472

www.api.org