Proposed Air Regulations to Have Broad Impact and High Cost for Fracking and Oil Production: Lawsuits and Stays Likely

In response to a court-imposed deadline, on July 28, 2011, U.S. EPA proposed Clean Air Act regulations covering a broad array of oil and gas production activities. While existing “New Source Performance Standards,” and “Maximum Achievable Contained Technology” regulations governing upstream and midstream oil and gas activities govern predominantly natural gas processing plants, the proposed regulation would govern fracking, oil and gas compressors, separators, pneumatic controllers and storage vessels, and delete the current exemption for small glycol dehydrators. Comments on the Proposed Rule are due on or before October 24, 2011, and U.S. EPA has scheduled public meetings on September 27, 28 and 29 in Pittsburgh, Denver and Arlington, Texas, respectively. Volatile organic compounds, air toxics including benzene, and methane (a suspected greenhouse gas), sulphur dioxide, and particulates are all targeted for reduction. Extensive notification, recordkeeping and reporting obligations are also mandated. All wells constructed or refracked after the effective date of the rule would be subject to the requirements. Exploratory and delineation wells would not be covered except for requiring the use of pit flaring. U.S. EPA estimates that the proposed rule will effect 11,400 new wells that are fracked each year as well as 14,000 wells that are refracked each year.
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