04 June 2012 18:51 [Source: ICIS news]
Tom Amontree, executive vice president at
API regulatory affairs director Howard Feldman said that the much lower methane emissions levels mean that major new EPA rules requiring energy companies to capture the escaping gas will be more costly to producers than the agency suggested.
In April this year, EPA issued a final rule under the Clean Air Act (CAA) to require natural gas producers to eliminate wellhead emissions of volatile organic compounds (VOCs) and other toxics such as benzene and hexane, and methane.
The new rule, first proposed in July 2011 to strong industry objection, is aimed at reducing or eliminating emissions from natural gas wells developed using hydraulic fracturing (fracking).
EPA said that fracked gas wells are a particular source of toxic emissions and vented methane when the wells are being completed and prepared for long-term production.
The agency said that when it goes into effect in 2015, the nearly 600-page regulation targeting emissions from fracked gas wells “will reduce 95% of the harmful emissions from these wells that contribute to smog and lead to health impacts”.
At the time the comprehensive regulations were issued, EPA said that the rules would not raise costs for energy producers and would in fact generate as much as $19m (€15.4m) in additional annual revenues through the sale of recovered methane that otherwise would have been lost to the atmosphere.
But with the measure of methane emissions now said to be almost 90% less than EPA’s estimate, Feldman said that complying with the new regulations will definitely impose costs on the energy industry.
However, he said API does not expect the more detailed study of wellhead emissions will have any impact on EPA’s already published regulation.
“If you look at EPA’s analysis that was used to support the new rules, that analysis was flawed,” Feldman said.
“But that doesn’t affect the rule, and we’re not suggesting that based on this study EPA should do something different,” he said. “It just means that the rule will be less effective than EPA suggested, and it will cost the industry to comply.”
Feldman said that API does not plan to use the new emissions study data to challenge the April rulemaking.
“For other reasons, we may ask them to modify the rule later,” he added.
The newly abundant natural gas resources from shale plays have been instrumental in reviving the
API officials have earlier charged that the Obama administration was trying to smother shale gas development with regulations.
($1 = €0.81)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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