An American Petroleum Institute (API) official did not rule out the possibility that the group would challenge in court the Environmental Protection Agency’s (EPA) proposed rules to reduce air pollution from oil and natural gas drilling operations if its recommended improvements to the rule are ignored.

“Obviously, we’re going to try to work with the agency to get a satisfactory rule without having to go to litigation. But it would not be unprecedented for us to litigate an EPA rule,” said Howard Feldman, API director of regulatory and scientific affairs, during a teleconference with reporters Thursday.

API filed comments Wednesday on the agency’s proposed regulation to cut volatile organic compounds from oil and gas operations, with an emphasis on operations using hydraulic fracturing (fracking) well stimulation. The EPA is expected to come out with a rule within four months, in early April. “We think that does not give them enough time to work through what the comments are, what changes need to be made in the the regulatory language,” Feldman said. He indicated that the agency may need an additional year before issuing rules for the oil and gas sector.

Moreover, “we think we [industry] need more time to implement the [emission] controls,” he said. “The equipment prescribed to conduct reduced-emission well completions will simply not be available in time to comply with the…final rule schedule.”

The EPA has estimated that the rules will cost the oil and gas industry $754 million to implement. “We don’t have a better number on the cost side. [But] we believe the EPA vastly overestimated the savings” that will stem from the EPA rules, he said. The agency has projected that there will be “so much benefit from reducing…emissions of natural gas…Based on real world experience. We think that’s way out of whack.”

While the EPA rule will affect the natural gas industry “across the board,” Feldman said it’s “going to have a [potentially bigger] impact on smaller operators, just proportionally.”

With these proposed rules, “the EPA is doing greenhouse gas regulation in disguise,” he said. “They’re [even] acknowledging that’s what they’re doing…One of the things that this is picking up significant methane reduction, and that affects [the] climate issue directly.”

Feldman said the EPA has overestimated the amount of methane emissions associated with oil and gas development. “The modeling of actual emissions under existing rules indicated that the public is already protected with an ample margin of safety.”

EPA’s proposal would cut smog-forming volatile organic compound (VOC) emissions from several types of processes and equipment used in the oil and gas industry, including a 95% reduction in VOCs emitted during the completion of new and modified hydrofracked wells. The agency said this dramatic reduction would largely be accomplished by capturing gas that escapes to the air and making that gas available for sale through technologies and processes already in use by several companies and required in some states.

Issued in response to a court order following lawsuits from environmental groups, the updated standards would rely on “cost-effective existing technologies” to reduce emissions that contribute to smog pollution and can cause cancer while supporting the Obama administration’s priority of expanding safe and responsible domestic oil and gas production (see Daily GPI, July 29).

In September major producer groups called on EPA to give them more time to comment on the proposed standards (see Daily GPI, Sept. 30). API and others asked for an additional 60 days; EPA instead extended the original Oct. 22 closing date to Nov. 30.

“In addition to the inordinately short time frame for commenting, the vagueness of the proposal has deprived members of the public of the opportunity to provide meaningful comment and will prevent EPA from finalizing a rule that will withstand judicial scrutiny,” said the Arkansas Independent Producers & Royalty Owners in comments filed Nov. 23.

The Department of Energy (DOE) on Thursday released a study that concluded that proposed EPA rules for clean air standards “will not create resource adequacy issues.” The report compared compliance deadlines even more stringent than those that are expected to be associated with the Cross-State Air Pollution Rule and the Mercury and Air Toxics Standards to typical timelines for the installation of pollution controls at existing plants and construction of new generation capacity, DOE said.

“Our review, combined with several other studies, demonstrate that new EPA rules — which will provide extensive public health protections from an array of harmful pollutants — should not create resource adequacy issues,” said David Sandalow, assistant secretary of energy for policy and international affairs. “Any local reliability challenges that could arise should be manageable with timely cooperation and effective coordination among all relevant stakeholders.”

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