The Independent Petroleum Association of America, American Exploration & Production Council, and 47 other US oil and gas trade associations urged the US Environmental Protection Agency to use its recent data collection request to learn more about the industry’s concerns and challenges.
Independent producers expressed particular concern in their Aug. 2 comments about EPA’s recent final rule to limit methane emissions from new oil and gas wells, which include an expansion of regulation to marginal wells producing less than an average 2.5 b/d of crude oil or 22 Mcfd of natural gas (OGJ Online, May 13, 2016).
These marginal, or stripper, wells represent about 80% of the nation’s oil wells and two thirds of its gas wells, the associations noted. “In current economic conditions, [they] are at an economic tipping point, and additional regulation would cause their failure if that regulation does not recognize this reality,” they said in their comments about EPA’s information collection request (ICR).
“More broadly, EPA is embarking on regulation in an industry that it does not understand,” the comments continued. Using the ICR progress could give it the understanding to be a fair and effective regulator, but “the pathway that is currently being taken in the ICR development will thwart, rather than improve, EPA’s understanding of the industry,” they said.
EPA must understand not only the proposed methane emissions limits impact on marginal wells, but also recognize that the universe of existing oil and gas wells and facilities is a mixture of wells, the associations said.
“There will be variability of oil and gas reservoir characteristics and production methods—e.g., primary, secondary recovery, enhanced oil recovery (EOR)—the presents of artificial lift technologies, future production dynamics, and numerous facility and pipeline configurations,” they explained. “There will be a mixture of regulatory driven technologies and voluntarily applied technologies that must be taken into account.”
Opportunity to understand
The associations stressed the need for EPA to better understand what US producers face, including how oil and gas wells’ production rates decline, and learn from existing agency data and resources that are publicly available from state agencies.
“The industry has successfully cut its greenhouse gas emissions levels, allowing the United States to become the world’s leader in cutting carbon,” IPAA Executive Vice-Pres. Lee O. Fuller said as the associations filed their comments. “However, this proposed ICR has all the signs of a rushed job, not a thorough process to gather the facts and hear meaningful public comment from the people closest to the US oil and gas industry.”
Fuller said the proposed information gathering effort creates additional paperwork for producers to submit to EPA and adds unnecessary burdens on companies’ technical teams to prepare and submit rushed comments under enormous time constraints. “Meanwhile, many of these same technical teams are currently developing their companies’ compliance programs for EPA’s June regulations and will then turn to their companies’ greenhouse gas inventory reports, which are due in the first quarter of 2017,” Fuller said.
Instead of creating duplicative work and information, which goes against the federal Paperwork Reduction Act’s intent, EPA should first, collect all of the publicly available data from industry databases—or acquire it free from state agencies—then can refine its search and request more targeted, specific information from the industry, he recommended. “As it stands now, EPA’s proposed ICR is clearly being driven by a tight political timeline to initiate and largely complete the information-gathering process before the end of this administration’s term,” Fuller said.
The independent producers expressed support for similar comments jointly submitted earlier by the American Petroleum Institute and the Western Energy Alliance.
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