In a landmark maneuver last Thursday the U.S. Environmental Protection Agency (EPA) released a list of proposed standards to reduce air pollution from oil and natural gas drilling operations, with particular attention paid to shale development operations, which include hydraulic fracturing (hydrofracking).

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.

Industry groups called the newly proposed air emission standards an “overreach,” and urged the EPA to rethink its plans. In fact, the Marcellus Shale Coalition (MSC) warned that the standards could stifle natural gas production, which could promote the use of other less-clean energy sources and actually make air quality worse.

The proposed standards come on the heels of the agency separately proposing new ozone standards, which came under fire from the American Petroleum Institute (API) as it claims the EPA “exaggerated the benefits” of the proposed ozone rules.

The EPA said the proposed standards unveiled last Thursday would leverage operators’ ability to capture and sell natural gas that currently escapes into the air, resulting in more efficient operations while reducing harmful emissions that can impact air quality in surrounding areas and nearby states.

“This administration has been clear that natural gas is a key component of our clean energy future, and the steps announced today will help ensure responsible production of this domestic energy source,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation. “Reducing these emissions will help cut toxic pollution that can increase cancer risks and smog that can cause asthma attacks and premature death — all while giving these operators additional product to bring to market.”

The 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.

MSC said the proposed regulations are a result of a consent decree stemming from a federal lawsuit brought forth by two groups — based in New Mexico and Colorado — opposed to the “responsible development” of American natural gas.

“While we understand that EPA is required by law to periodically evaluate current standards, this sweeping set of potentially unworkable regulations represents an overreach that could, ironically, undercut the production of American natural gas, an abundant energy resource that is critical to strengthening our nation’s air quality,” said MSC President Kathryn Klaber.

Klaber said the MSC will do its part to educate the EPA on the issue. “As this process moves forward, we look forward to providing EPA with fact-based information regarding our best practices and industry-leading operations, which are ensuring that the region’s air quality is not impacted,” she said. “In fact, Pennsylvania Department of Environmental Protection [DEP] studies have determined that Marcellus activities do not present any ‘air-related health issues.’ Our state regulators are keeping an eye on the ball. However, it’s not clear if EPA is as well.”

Klaber also cited three DEP reports to back up the MSC’s claims. The Marcellus Shale Short-Term Air Sampling studies, which were conducted in Southwest Pennsylvania on Nov. 1, 2010, Northeastern Pennsylvania on Jan. 12, 2011 and Northcentral Pennsylvania on May 6, 2011, found that while some spots had concentrations of certain natural gas constituents including methane, ethane and propane, and associated compounds such as benzene, in the air near Marcellus Shale drilling operations, none of the regions identified “concentrations of any compound that would likely trigger air-related health issues associated with Marcellus Shale drilling activities.”

In commenting on the proposed EPA rules, an API spokesman told NGI that the institute needs to “take a look at the components of the plan” to be able to gauge what kind of impact they might have on the industry.

Dan Whitten, vice president of Strategic Communications for America’s Natural Gas Alliance, responded to the proposed standards late Thursday. “Natural gas producers are committed to safe and responsible development including the preservation of air quality in communities where we operate,” Whitten said. “We strongly believe that environmental protection and development of natural gas are not mutually exclusive. We will be studying EPA’s proposed rules in the days and weeks ahead, and we will consider submitting comments as part of the notice and comment process.”

The EPA said the standards are especially important now due to the fact that gas production in the United States is growing, with more than 25,000 new and existing wells fracked or re-fracked each year.

“The VOC reductions in the proposal are expected to help reduce ozone nonattainment problems in many areas where oil and gas production occurs,” the EPA said. “In addition, the VOC reductions would yield a significant environmental benefit by reducing methane emissions from new and modified wells.” The agency added that the proposed standards also would reduce cancer risks from emissions of several air toxics, including benzene.

Following analysis of the proposed changes, which also include requirements for storage tanks and other equipment, EPA deemed the standards as “highly cost-effective,” with a net savings to the industry of tens of millions of dollars annually from the value of natural gas that would no longer escape to the air.

The proposal includes reviews of four air regulations for the oil and gas industry as required by the Clean Air Act:

Because it is under a consent decree, EPA said it was required to sign a proposal by Thursday (July 28) and has to take final action by Feb. 28, 2012. Under a public comment period, EPA will hold three public hearings, in the Dallas, Denver and Pittsburgh areas.

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