New York regulators are seeking input on an early draft of rules to further curb volatile organic compounds (VOC) and methane emissions, a proposal that one state oil and natural gas industry group has warned could be “devastating” for producers if it’s finalized.
The New York State Department of Environmental Conservation (DEC) has been at work on the rulemaking for more than a year now. The process was started in response to Obama-era guidelines for the industry issued in 2016 for limiting VOC emissions from existing sources, part of which the Trump administration is considering rolling back. In an outline of the proposal released by DEC last month, however, some of the draft requirements would go beyond the federal guidelines to address methane emissions.
A similar process is underway in nearby Pennsylvania, while Ohio is also considering more air regulations for the industry based in part on the Obama-era guidelines. But unconventional oil and gas development has helped lift the industry’s fortunes in those states. New York has banned high-volume hydraulic fracturing (HVHF), a move that has left smaller producers struggling with few prospects.
“One of our positions will definitely be that most producing wells in New York state are well below the stripper well/marginally economic threshold and therefore should be exempt from these regulations,” said Executive Director Brad Gill of the Independent Oil & Gas Association of New York (IOGANY). He told NGI’s Shale Daily that his organization intends to point out the potential economic impacts of such regulations and make the case that the industry “is being unfairly targeted.”
Gill also noted that producers wouldn’t be the only ones affected by the proposal. DEC is drafting the rules for oil and gas production; storage tanks; and gathering, boosting and compressor stations, along with other midstream operations.
The DEC is considering more robust leak detection and repair standards for VOCs and methane on a quarterly basis. Compressors and other equipment might also have to be retrofitted to meet higher emission control rates, among other things.
DEC spokesperson Erica Ringewald said the proposal would help implement aspects of the state’s methane reduction plan and help meet Gov. Andrew Cuomo’s administration’s goal of reducing emissions by 2030 by 40% from 1990 levels.
Cuomo, recently elected to a third term, has plans to sharply increase renewable energy generation and reduce emissions in the decades ahead. On Monday, he strengthened those commitments by pledging carbon neutral electricity generation by 2040.
DEC is accepting stakeholder input until Dec. 31, including on whether the proposed requirements for oil and gas production should apply to economically marginal and low volume wells. The agency is seeking feedback on factors that would be used to define those kinds of wells.
To be sure, oil and gas production in New York continues to decline. Oil volumes dropped 3.3% year/year in 2017 to 214,828 bbl, according to the DEC. Natural gas production, driven primarily by shallower formations such as the Medina and Trenton-Black River, also decreased 16% over the same period. Total reported gas production in New York for 2017 was only 11.4 Bcf.
The IOGANY has been working closely with the DEC’s Division of Air Resources in the rulemaking process. “We appreciate them allowing us input at this early stage and want to represent our members as well as we can on this,” Gill said.
IOGANY has hired a consulting firm to help submit feedback to DEC. It asked members last month for donations to help meet those costs, which Gill said have since been met. “Of course, we can always use more as it promises to be a long, drawn-out regulatory battle,” he added.
Environmental groups, including those that battled with IOGANY and others during the process to ban HVHF, are expected to file comments on the DEC proposal, Gill said in an email to members last month. While Cuomo has continued to strengthen the state’s environmental protections, many groups want his administration to do even more.
Ringewald said the DEC doesn’t yet have a specific timeline for implementing the regulations. After the agency receives early stakeholder input it would issue a formal rulemaking proposal and allow public comment before the rules are finalized.