US EPA issues rules on ‘fracking’, industry blasts the move

18 April 2012 20:29  [Source: ICIS news]

WASHINGTON (ICIS)--The US Environmental Protection Agency (EPA) on Wednesday issued a final rule to require natural gas producers to eliminate wellhead emissions, but the ruling was quickly criticised by energy and manufacturing interests as harmful to industry and jobs growth.

The agency said its nearly 600-page regulation targeting emissions from gas wells that are hydraulically fractured “will reduce 95% of the harmful emissions from these wells that contribute to smog and lead to health impacts”.

The regulations announced on Wednesday are the first federal air pollution rules governing “fracked” gas wells.

EPA said industry compliance with the new emissions restrictions will be required by 1 January 2015. 

In the meantime, EPA said it will require that gas production companies use flaring to burn off emissions until wellhead equipment can be installed to capture the pollutants and natural gas that otherwise would escape into the atmosphere.

The agency said the equipment needed to block wellhead emissions is already in use on about half of the some 12,000 fracked gas wells being developed each year, and that the “green completion” technology is available and cost effective.

The agency said the rule will actually pay for itself because the installation of green completion equipment at wellheads will allow producers to capture and sell natural gas that otherwise would be lost to the atmosphere.

The rule is being phased in over the next two years, EPA said, in order to give manufacturers time to ramp-up production of the green completion equipment and for gas producers to acquire and install the gear and train personnel in its use.

However, the EPA rule was quickly and broadly condemned by manufacturers and many in the energy sector.

The Institute for Energy Research (IER), an energy industry think-tank, charged that the new EPA rules on fracking emissions are part of the Obama administration’s opposition to fossil energy resources and development.

“Once again, the Obama administration is using the EPA to execute its war on affordable energy,” said IER president Thomas Pyle.

“Today’s announced rule will increase the regulatory burden on natural gas producers,” he said, adding that the agency’s claim that the regulation will actually save producers money “is disingenuous and fraudulent”.

The National Association of Manufacturers (NAM) also criticised the fracking emissions rule as detrimental to US energy production and pricing and to industry and employment growth.

“Here we go again with another economically damaging regulation from the administration,” said NAM president Jay Timmons.

“These new costly regulations on energy producers hurt manufacturers’ competitiveness and delay job creation,” he said.

“Most unfortunate is that these new rules will only increase energy prices in the long run,” Timmons said. "These regulations will hamper our ability to develop much-needed US energy supplies.”

US petrochemical producers, downstream chemical makers and a broad range of manufacturers have hailed the development of shale gas – which can only be produced with hydraulic fracturing – as giving domestic US industry a rebirth.

However, the American Petroleum Institute (API), the principal trade group representing oil and natural gas producers, said it would reserve judgement on the new fracking rules until the large rulemaking document and its requirements can be fully analyzed.

API officials previously have accused the Obama administration of trying to smother shale gas development with regulations.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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