Wednesday, March 22, 2017

Shale Law in the Spotlight: DEP Addresses Oil and Gas Methane Emissions Reduction Strategy

Written by Chloe Marie – Research Fellow

The extent to which methane emissions from natural gas development is an issue that requires additional regulatory measures has been hotly contested across the country. Proponents of more stringent requirements against oil and gas operators claim that action is required to combat climate change while opponents of new regulations claim that these regulations will impose unnecessary obligations upon an important industry. On January 19, 2016, Governor Wolf issued a press release announcing the proposed implementation of a strategy plan by the Department of Environmental Protection (DEP) to reduce methane emissions. In his press release, Governor Wolf declared that as “the second-leading producer of natural gas in the nation behind Texas, [Pennsylvania is] uniquely positioned to be a national leader in addressing climate change while supporting and ensuring responsible energy development, creating new jobs, and protecting public health and our environment.”

This strategy plan was presented as an integral part of the updated Pennsylvania Climate Change Action Plan, which was published by DEP in August 2016. In the updated Climate Change Action Plan, DEP stated that “Pennsylvania’s gross GHG emissions are projected to be lower in 2030 than in 2000, with reductions in the residential, commercial, transportation, agriculture and waste sectors.”  The strategy plan is comprised of specific measures including those listed below:

·       DEP plans to replace the August 2013 Category No. 38 conditional permit exemption (exemption 38) for unconventional wells with a new Air Quality General Permit for oil and gas exploration, development, and production facilities, including well pads, known as GP-5A. More precisely, unconventional wells in Pennsylvania are currently exempted from air quality permitting requirements provided that the operator or owner meets all application requirements established in the Category No. 38 exemption criteria. The new General Permit will establish requirements for the use of Best Available Technology (BAT) for sources at unconventional natural gas wells.

·       DEP proposes to review the existing GP-5 applicable to sources located at natural gas compressor stations and/or processing facilities and provides for updates to the existing BAT requirements and Leak Detection and Repair (LDAR) program for new sources. DEP also intends to amend and strengthen the requirements for affected sources and expand the applicability of GP-5 to cover sources located at natural gas transmission stations. To advance this objective, in February 2017, DEP issued an updated Technical Support Document addressing the new GP-5A permit for Unconventional Natural Gas Well Site Operations and Remote Pigging Stations and the revised GP-5 for Natural Gas Compressor Stations and/or Processing Facilities.

·       DEP plans to bring forward specific proposals to address existing source emissions. In October 2016, U.S. EPA released its final Control Techniques Guidelines (CTG) for the Oil and Natural Gas Industry with recommendations to states to reduce VOC and methane emissions from certain existing oil and gas industry emission sources.

·     DEP will work through the Pennsylvania Pipeline Infrastructure Task Force (PITF) to implement best management practices (BMPs), including best available technology (BAT), to reduce fugitive methane emissions from oil and gas industry infrastructure.

Following the release of the strategy plan, three state senators from Pennsylvania – namely Senator President Pro Tempore Joe Scarnati, Senate Majority Leader Jake Corman and Senator Gene Yaw, Majority Chair of the Senate Environmental Resources and Energy Committee  – sent a letter to the Acting Secretary of Environmental Protection, Patrick McDonnell, dated February 6, 2017, asking a number of key questions regarding the proposed revisions to the existing GP-5 permit and the new proposed GP-5A permit.

The senators expressed concern that such changes would “[add] new degrees of complexity to the permitting and site construction process that may significantly impair the competitiveness of the Commonwealth and strongly discourage the investment of private capital into Pennsylvania.” They questioned DEP’s legal authority to look into matters relating to methane emissions and asked for more information about the scientific evidence gathered to establish methane limitations on the unconventional oil and gas industry. In addition, the senators requested further explanation regarding the cost-benefit analysis of proposed permits, the content requirements for the permit application, and the legal justification chosen to impose methane limitations on only the unconventional oil and gas industry.

On February 24, 2017, Acting DEP Secretary Patrick McDonnell responded to the senators’ letter stating that “DEP believes that proposed GP-5A and the proposed revisions to GP-5 balance the needs of industry for cost-effective operation and the needs of the public for enhanced environmental protection.” In the same letter, Secretary McDonnell also claimed that DEP is required to implement federal regulations governing control of methane emissions pursuant to Section 4 of the Air Pollution Control Act and the Clean Air Act permitting in Pennsylvania. With regard to the omission of the conventional oil and gas industry, Secretary McDonnell reasoned that it comprises a small portion of total gas production in Pennsylvania and is addressed through EPA requirements.

The draft GP-5 and GP-5A permits are available for public comment until June 5, 2017.

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