OIL AND GAS FACE UP TO AIR POLLUTION ISSUES

Volume XXVII, Number 2, 2014 REPRINT - Air Pollution Control 2014 Environmental Business International Inc.

OIL AND GAS Furthermore, while obtaining air per- the opportunity even more is the supply
PRODUCERS mits for many links along the upstream chain serving midstream oil and gas—pro-
FACE UP TO AIR and midstream oil and gas value chain is viders of equipment from pipes to trucks,
POLLUTION ISSUES fairly straightforward, there are some regu- all of which will require control equipment
latory issues looming that could change the as well, according to Anguil.
The boom in oil and gas explora- landscape. In addition, the push to collect
tion and production in the United more of the gas that is currently vented or Moving upstream, in terms of the
States beginning just a few years flared from well sites will be a challenge for overall environmental impacts of uncon-
ago continues to provide tremendous op- the oil and gas industry. ventional oil and gas production, “there
portunity to multiple sectors of the en- has been a great deal of concern about the
vironmental industry. Energized by the The primary air quality issues are asso- cumulative effects of wells and compressor
emergence of innovative technologies such ciated with the producing wells themselves stations and processing plants,” says Gavin
as horizontal drilling and hydraulic frac- and associated means of getting the wells Biebuyck, leader of the air quality practice
turing, or “fracking,” so-called “unconven- into the pipelines. The midstream part of at environmental consulting and engineer-
tional” oil and gas production has provid- the business—pipeline development— ing firm Liberty Environmental, Inc.
ed consulting and engineering firms with does not present special challenges. (Reading, PA). The big concern is ozone
abundant work in environmental studies, forming downwind, “in Wyoming of all
permitting, compliance management, and It’s the compressor stations along pipe- places.”
engineering for the production operations lines that have emissions issues, but ob-
themselves and the associated infrastruc- taining the permits for these stations tends The U.S. Environmental Protection
ture—the roads and pipelines that disturb to be a simple, routine matter, according Agency has found high smog levels in
open land, stream beds, and wetlands, the to Gale Hoffnagle, head of the air quality Wyoming in the winter, which “is almost
impacts of which must be minimized or practice at TRC Companies, Inc. (Lowell, unheard of,” says Biebuyck. The agency is
mitigated. MA), a company with a major pipeline en- attributing this finding to topography and
gineering business that has “trended very meteorology to some extent, but also to
As EBJ readers know, the water tech- strongly upward.” By contrast, the permits high levels of nitrogen oxide and volatile
nology segment of the environmental for the treatment plants that process natu- organic compounds (VOCs), which are as-
industry has thrived from the opportuni- ral gas liquids for market—a growing op- sociated with oil and gas operations.
ties to manage the enormous volumes of portunity—are more complicated, Hoff-
produced water and flowback water gener- nagle tells EBJ. MODELING REGIMES TIGHTEN
ated by fracking. Oil and gas country from Ozone concerns have resulted in the
Pennsylvania to Texas to North Dakota is The permitting for midstream opera-
served by multiple firms—new and old, tions may be straightforward, but there is imposition of more onerous modeling and
large and small—that offer solutions from still a healthy air pollution control (APC) control demands on upstream oil and gas
the innovative to the tried and true for equipment market arising from the boom operations, according to Bruce Macdon-
treating and disposing of or reusing these in pipeline construction. Chris Anguil, ald, vice president and North America air
wastewaters. president of Anguil Environmental Sys- quality practice lead at AECOM Technol-
tems, Inc. (Milwaukee, WI) reports that ogy Corp. (Los Angeles, CA). “A lot of
The air quality impacts of unconven- midstream oil and gas companies “de- the new federal rules require controls on
tional oil and gas production receive less mand our thermal and catalytic oxidizers drilling completions and production at
attention than the water supply and wa- for VOC compliance,” says Anguil. “The upstream sites.” An added wrinkle is the
ter quality impacts, perhaps justifiably so. outlook is very positive for both of those remoteness of many of these sites. “It can
Where the oil and gas producers are going sectors in the coming years.” be a huge task to demonstrate compliance
to get the water to do all the fracking that at places that are infrequently visited or
they’d like, and how they are going to re- For the midstream oil and gas indus- hard to access,” says Macdonald.
sponsibly manage the water they use, are try, Anguil supplies a line of regenerative
major environmental and economic con- thermal oxidizers (RTOs) and other vapor The ozone concerns were a major driver
cerns. But the air quality impacts of oil and combustion technologies, as well as a di- behind EPA’s move to require “green com-
gas production are not negligible. rect-fired thermal oxidizer (DFTO). These pletions,” according to Biebuyck. “Green
systems are installed on amine treaters, gly- completions” is the term the industry
col dehydrators, sulfur recovery units, and uses—EPA calls them “reduced emission
nitrogen rejection units. What strengthens completions” (RECs)—for the steps that

Continued on page 2

Environmental Business Journal, REPRINT “Except in unusual circumstances, flaring FLARING PHASE-OUT
oil and gas operators must take to control will not be allowed when Quad-O takes This flaring is drawing criticism—and
harmful emissions from their wells during effect. However, there will be exemptions
fracking operations, under Clean Air Act for remote sites and test wells. At most lawsuits—so in late January, a task force
(CAA) regulations that were issued in April sites, the operators will have to capture representing oil and gas companies and
2012. The rule, Subpart OOOO—“Quad- those gases and put them in a line, which associated entities operating in North Da-
O”—of CAA’s New Source Performance might require compressors with their own kota announced a pledge to take aggres-
Standards (NSPS, 40 CFR Part 60)—es- air pollution control systems.” sive steps to capture the gas and NGLs
tablishes emission standards for various produced in the Bakken formation. By ac-
components of the oil and gas production EPA is showing some determination to celerating the construction of gas-gather-
and processing chain, with particular em- reduce flaring as much as possible, because ing pipelines and processing plants—with
phasis on the production operations. flaring is a source of carbon dioxide emis- state support—the industry could increase
sions, but the industry’s ability to move gas capture rates from 70% currently to
In a green completion, “you can’t just away from flaring won’t be easy in all loca- 85% in two years and 90% in three years,
drill a well and then cap it,” Biebuyck ex- tions. In the Bakken formation of western the task force reported to the North Da-
plains. “You’ll need to capture the fluids North Dakota, for example, oil producers kota Industrial Commission.
and the gases, prohibiting releases of any are flaring a large percentage of the natu-
air emissions during the completion of a ral gas that comes up with the oil, because Work associated with reduced flaring
well. That’s a new and different standard, while that gas and the associated natural and green completions has turned into a
and it will change the game.” gas liquids (NGLs) have market value, the solid business for environmental consul-
producers haven’t deemed that value to be tancies in advance of the 2015 compliance
Currently, as fluids are pumped up sufficient to offset the costs of developing deadline, according to Ken Weiss, manag-
during production operations, the gases the infrastructure necessary to capture, ing partner for the global air quality and
that come up with the fluids are vented or process, and transport the gas. climate change practice at Environmental
flared, and “that practice will be prohib- Resources Management (ERM; London,
ited now,” he continues. Subpart OOOO A satellite image of the upper Midwest U.K.). EPA’s recent rules (NSPS, GHG
incorporates a transition period until Jan- and Great Plains, widely circulated on the reporting) have focused on reducing and
uary 1, 2015 to ensure, in EPA’s words, internet, shows that flaring in the Bakken reporting emissions from gas well comple-
“sufficient time for needed cost-effective region is visible from space in a cluster of tions. However, noting the visibility of
control equipment and trained operators light comparable to Chicago and larger Bakken oil well flaring from space and the
to become broadly available.” In the mean- than Minneapolis. In a report issued in current lack of infrastructure to deliver the
time, oil and gas operators must at least July 2013, the nonprofit organization Ce- gas to market, he stresses that the situation
flare the gases to reduce VOC emissions res (Boston, MA) estimates that natural gas is evolving.
by 95%. flaring in North Dakota resulted in emis-
sions of 4.5 million tons of carbon dioxide “We are supporting oil and gas majors
“Green completions will require a se- equivalent (CO2e) and represented a lost in the development and implementation
ries of separators to first separate the gas market value of $1 billion in fuel. of their strategies for reducing flaring and
from the sand and the produced water and collecting and selling more gas—from
condensate, and then flare that gas where both gas wells and oil wells. In many plac-
it’s allowed,” notes AECOM’s Macdonald. es, you can compress flare gas and generate
a product. Flaring is not going to be very
Environmental Business Journal ® (ISSN 0145-8611) is published by Environmental Business prevalent in the future.
International, Inc., 4452 Park Blvd., #306, San Diego, CA 92116. © 2014 Environmental
Business International, Inc. All rights reserved. This publication, or any part, many not be “NSPS Subpart OOOO and state-level
duplicated, reprinted, or republished without the written permission of the publisher. air quality programs are thus generating a
good, growing volume of business for en-
To order a subscription, call 619-295-7685 ext. 15 or visit us online at www. vironmental consulting and engineering
environmentalbusinessjournal.com. The annual subscription rate for standard paper copy is firms,” he continues. So are the relatively
$995. A corporate electronic subscription with internal reproduction license starts at $1,250. recent greenhouse gas (GHG) emissions
reporting requirements under the Sub-
Editor in Chief, Grant Ferrier Federal Analyst, Andrew Paterson part W section of EPA’s Greenhouse Gas
Senior Editor, George Stubbs Research Analyst, Jim Hight Reporting Program (40 CFR Part 98), he
Research Analyst, Jenny Christopher Managing Editor, Lyn Thwaites adds. AECOM’s MacDonald agrees, char-
acterizing Subpart OOOO and Subpart
W as perhaps the most far-reaching of the
EDITORIAL ADVISORY BOARD federal air regulations affecting unconven-
tional oil and gas production activities.
Andrew Paterson, Chairman; Dr. Edgar Berkey, Vice President, Concurrent Under Subpart W, owners or operators
Technologies; Richard Fortuna, President; Strategic Environmental Analysis;
Daniel Noble, Founder, Resource Trends; Paul Zofnass, President, Strategic Information for a Changing Industry
Environmental Financial Consulting Group

Environmental Business Journal, REPRINT

NSPS Subpart OOOO Affected Facilities

Affected Emissions Source Production Facili- Gathering Facili- Gas Processing Transmission Gas Storage
ties ties Facilities Facilities Facilities

Hydraulically fractured gas well X X X X X
X X
Centrifugal compressors - wet seals X X
X X
Reciprocating compressors X

Pneumatic controllers X X

Storage vessels X

Equipment leaks at gas processing
plants

Sweetening units - onshore gas
processing plants

Source: 40 CFR Part 60

of facilities that contain petroleum and putting it into the high-pressure interstate the most substantial air quality issues, he
natural gas systems and emit 25,000 met- pipeline. These ‘dehy’ units condense the adds.
ric tons or more of CO2e must report the liquids, but they can be very high sources
emissions data to EPA. of methane.” ENVIRON is generating business in
helping clients obtain permits for new and
The new GHG requirements “have FRACKING IMPACTS LIMITED revitalized oil fields, with or without frack-
been a revelation and concern to the in- Hydraulic fracturing operations by ing, but “it’s easier to get permits without
dustry,” says Liberty Environmental’s fracking, because of public opposition,”
Biebuyck. “You now have to worry about themselves are presenting limited air qual- Hower notes. “It’s not just a regulatory is-
greenhouse gases, regulated as CO2e, ity issues. Fracking, of course, is one of the sue. They’ve seen Gasland, and so they are
which includes carbon dioxide and meth- keystone production technologies that has against fracking.”
ane.” Under CAA’s tailoring rule, “if you led to the boom in U.S. oil and gas produc-
go over 100,000 tons on a potential basis, tion in recent years. It has been very con- In California, where ENVIRON does
you need a federal Prevention of Signifi- troversial, although more for the impacts much of its air permitting work, the big is-
cant Deterioration [PSD] permit and en- on water resources than on air quality. sues in permitting for oil and gas operations
sure that you have implemented the best are associated with National Environmen-
available control technology” (BACT). “The air quality impacts from frack- tal Policy Act (NEPA) and California En-
ing itself are pretty small,” says Joseph vironmental Quality Act (CEQA) require-
Now, “in our compressor station per- Hower, principal and Southwest air qual- ments, which provide opposition groups
mitting jobs, we’ve bumped up against the ity practice leader in the Los Angeles office with the tools to delay the permitting pro-
100,000 CO2e standard,” he continues. of energy and environmental consultancy cess. “The Title V permits themselves are
“The biggest surprise is methane, and the ENVIRON Holdings, Inc. (Arlington, not the big deal,” Hower explains. How-
dehydration units on the pad next to the VA). It’s the diesel engines used in parts ever, “you can’t get your air agency permit
compressors that pre-clean the gas before of the production operations that present until you have a signed CEQA document.

NSPS Subpart OOOO Emission Standards

Affected facility Emission Standard
Hydraulically fractured gas well Prior to 1/1/15, use completion combustion device to control flowback gas;
beginning 1/1/15, use reduced emission completions (REC) to control flow-
Centrifugal compressors - wet seal back gas.
Reciprocating compressors Reduce wet seal emissions by 95%.
Pneumatic controllers (production, gathering) Replace reciprocating rod packing seals every 26,000 hours or every 3 years.
Use devices with continuous bleed rates less than or equal to 6 standard cubic
Storage vessels feet per hour (scfh).
Reduce VOC emissions by 95% for each tank with VOC emissions equal to or
Equipment leaks at gas processing plants greater than 6 tpy
Sweetening units - onshore gas processing plants Conduct leak detection and repair program
Control SO2 emissions at reduction efficiencies based on sulfur feed rate and
Source: 40 CFR Part 60 sulfur content of the acid gas
Strategic Information for a Changing Industry

Environmental Business Journal, REPRINT Ozone Transport Region in the Northeast. Regardless of where these regulatory
The application isn’t deemed complete un- In West Virginia, it’s 100 tons. paths lead, the opportunities to help the
til that document is signed.” oil and gas industry to solve its air quality
Oil and gas companies operating in the issues are very good, he concludes. “There’s
Another permitting hurdle relates to Marcellus and Utica shale formations have a lot of compliance and permitting work
oil and gas production on Native Ameri- thus been able to obtain a simplified, eas- that needs to be done. We try to streamline
can reservations, or in “Indian country,” ily obtainable general permit and not un- our services to our large clients so that they
which is EPA’s preferred term, according dergo the major-source permitting process get a really effective product from a cost
to AECOM’s Macdonald. “Minor source with its associated modeling requirements. perspective, and I think that’s where the
permits are now required for some de- Over the past three or four years, however, opportunities are.” 
velopment, based on size, and there is a as unconventional oil and gas exploration
bottleneck in processing the applications,” and production has boomed, “there’s been Excerpted from the Air Pollution Control
he explains. EPA implements the permit- a lot of scrutiny by environmental activ- 2014 edition of EBJ and reprinted with
ting program in Indian Country, and the ists,” says Biebuyck. permission from Environmental Business
agency is looking to create a general permit International Inc. All rights reserved.
that will alleviate the backlog in permit- Aggregation in particular has become a © 2014 EBI Inc., www.ebionline.org
ting, but that hasn’t been done yet.” big issue, he points out. “A lot of time has
been spent on this issue by the state agen-
Although the regulation of oil and gas cies and EPA. The concept from the activ-
exploration and production is largely a fed- ists’ standpoint is that these multiple wells
eral ballgame at this point, there are some are often close together, so they should be
states, particularly Colorado and Wyo- thought of as a single source.”
ming, that are moving ahead of the federal
program with their own controls, Mac- Aggregation is a longstanding concept
donald reports. Wyoming has presump- under the Clean Air Act, he continues. “If
tive BACT requirements for controlling you have facilities under common control,
air emission from oil and gas production common ownership, and adjacent to one
operations, and Colorado has a new set of another, EPA can regulate them as a single
regulations that state air officials approved source. The question is, what is adjacent?
in February. One of the new features of the The facilities don’t have to be right next to
Colorado rule is the monitoring and repair each other.”
requirements for fugitive leaks of produced
gas from compressor stations and produc- These questions have given rise to lots
tion facilities, according to Macdonald. of lawsuits and appeals of permits, not only
in Pennsylvania but also in West Virginia
MINOR TO MAJOR SOURCES? and even the West, Biebuyck notes. “The
Back east, Liberty Environmental’s upshot of aggregation is that, if these facili-
ties are regarded as major sources, they’d
Biebuyck, whose company serves oil and have to be modeled and regulated under
gas operators in Pennsylvania and West the National Ambient Air Quality Stan-
Virginia, those operators have largely dards [NAAQS] regime,” he says. “NOx is
been able to avoid detailed scrutiny with the biggest concern.”
regard to emissions. “The vast majority of
wells are permitted as minor sources. In Right now, the approach of EPA and
Pennsylvania and West Virginia, there’s the states is not to aggregate, and for the
a requirement to obtain general permits, most part, the courts have sided with this
which are sort of canned permits that you approach—although the issue is far from
can get very quickly. They are required for settled. Should aggregation be required
operations that keep their emissions below and oil and gas operations find themselves
the major source thresholds.” regulated as major NOx sources, however,
they will have to comply with the new
Those thresholds are typically 100 tons one-hour NO2 NAAQS, which is far from
for particulate matter (PM) or nitrogen trivial. “Compliance with the new one-
oxide (NOx), while for hazardous air pol- hour NO2 standards is very constraining
lutants (HAPs), it’s 10 tons for one pollut- for a facility that needs modeling to be per-
ant or 100 tons for all HAPs combined. mitted,” notes AECOM’s Macdonald.
In Pennsylvania, the threshold for VOCs
is 50 tons, because the state is part of the

Strategic Information for a Changing Industry