On July 28, the U.S. Environmental Protection Agency (EPA) proposed a package of regulations designed to reduce air pollution from the oil and natural gas industry. One of these regulations, a new source performance standard for volatile organic compounds (VOCs), will require drillers to use a technique called “green completions” on any oil or gas well that they hydraulically fracture. The EPA estimates that this new regulation, which is the United States’ first federal air standard addressing hydraulically fractured wells, will reduce such wells’ emissions of volatile organic compounds (VOCs) by 95 percent.
Green completions also have the co-benefit of capturing methane that would otherwise be vented or flared. Methane is the main constituent of natural gas and a greenhouse gas 25 times more potent than carbon dioxide. Recent estimates of methane emitted during the production, processing, and transport of natural gas have caused some to question the greenhouse gas benefits that could be achieved by switching from coal to gas-fired electricity.
The substantial air pollution associated with oil and gas development has so far largely managed to slip under the radar of federal regulation. Compressors, pumps, and drilling rigs used at wellpads and along pipelines, all often fueled by diesel, are considered small enough sources of emissions that they escape regulation under the federal Clean Air Act, and are not required to have the same kind of control technologies as, for example, car and truck engines. The raw gas and liquids produced from oil and gas wells contain VOCs, which can cause health problems and react with nitrogen oxides to form ground-level ozone (a key ingredient of smog). Raw gas and liquids also contain methane (CH4). Both VOCs and methane can be vented or leaked at various points during the production, processing, and transport of oil and natural gas.
In recent years, a surge in drilling, driven largely by a boom in tight sands, coalbed methane, and shale gas development, has led to deteriorating air quality in many parts of the country. Ozone levels in intensely-drilled rural areas of Wyoming have reached those of Los Angeles. A 2009 study estimated that oil and gas activities in five counties in the Barnett Shale emitted 165 tons per day of smog-forming compounds, while on-road motor vehicle emissions from the same five counties was only 121 tons per day.
Against this backdrop, another important question is the extent to which the more intensive development associated with unconventional reservoirs such as shale or tight sands—that is, horizontal drilling and hydraulic fracturing—could increase the air pollution risks already associated with conventional oil and gas. Because the drilling and completion of long, horizontal wells that are hydraulically fractured generally use more energy than that of shorter vertical wells, shale gas operations are likely to produce more combustion emissions per well from drilling rigs, pumps, compressors, and trucks than conventional natural gas operations. But how about non-combustion emissions such as fugitive methane and VOCs?
Although hydraulic fracturing, a technique that companies use to extract oil and natural gas from shale and other low-permeability rock formations, has become an increasingly common practice in the industry over the last decade, it was not until late 2010 that the EPA published new estimates of methane emissions associated specifically with hydraulic fracturing. While fracturing fluids are flushed out of the well in a three to ten day process called “flowback,” enabling natural gas production to commence, gases contained in the flowback fluids, which may include volatile organic compounds (VOCs), carbon monoxide, and methane, are often vented and/or flared.
This revision was one factor that led the EPA to revise upward its estimates of greenhouse gas emissions from U.S. natural gas systems, which launched a series of life-cycle greenhouse gas analyses of shale gas versus conventional gas. The EPA now estimates that the oil and natural gas sectors account for 40 percent of all U.S. methane emissions (4 percent of all U.S. greenhouse gas emissions).
While flowback emissions, if unmitigated, increase the life-cycle greenhouse gas footprint of natural gas produced from hydraulically fractured wells, they can also be captured using “green” or “reduced emissions” completions—a technique in which equipment is used to capture the solids, liquids and gas brought to the surface during flowback and separate the methane for sale. Because green completions allow producers to sell methane that they would otherwise have vented to the atmosphere, multiple companies have reported using green completions through the EPA’s voluntary Natural Gas STAR program. In addition to saving producers money, green completions have been found to significantly reduce both VOC and methane emissions.
The states of Colorado and Wyoming, which have experienced some of the most severe ozone level increases due to oil and gas development, already require green completions for all applicable oil and gas wells. The EPA’s new VOC regulation essentially follows these states’ formula.
The EPA estimates that the new regulation will reduce the oil and gas industry’s annual VOC emissions by 25 percent, and eliminate 95 percent of the VOC emissions associated with hydraulic fracturing. In addition, the EPA says implementing the regulation could result in annual savings of almost $30 million for the industry, since it would be able to sell natural gas captured during the flowback period.
Although methane is not the main target of the new source performance standards, the 26 percent reduction in methane emissions each year expected across the industry is, according to the EPA an important co-benefit because of methane’s role as a greenhouse gas. When the rule goes into effect next spring, it should dramatically reduce the upstream greenhouse gas emissions associated with natural gas.
In addition to this rule, the EPA also proposed three others concerning the oil and natural gas industry: a new source performance standard for sulfur dioxide (SO2), and air toxics standards for oil and natural gas production and natural gas transmission and storage. The EPA will be holding public hearings on all four proposed amendments over the next 60 days, and is required to finalize the rules by February 28, 2012.