Air Quality Issues Applicable to Marcellus Shale Gas Extraction Activities

1. Air Quality Issues Applicable to Marcellus Shale Gas Extraction Activities Krish Ramamurthy Chief, Division of Permits Bureau of Air Quality

2. Three Phases of Gas Extraction Activities • Well Drilling and Hydraulic Fracturing • Gas Collection, Dehydration and Compression • Gas processing to Pipeline Quality Natural Gas

3. Well drilling and Hydraulic FracturingPotential Air Emissions • NOx, VOC and PM2.5 emissions from drilling • PM emissions from construction activities and traffic on access roads • Diesel fumes from equipment operations • VOC and HAP (methanol from fracturing fluids) • NOx, CO and VOC emissions from off gas flaring • Radionuclides such as radium and radon from wastewater treatment of fluids

4. Gas collection, Dehydration and Compression Potential Air Emissions: • NOx, CO, PM2.5, VOC and HAP emissions from Reciprocating engines • VOC and HAP emissions from Condensate tanks)

5. Gas processing to Pipeline Quality Natural Gas • This processing remove moisture and separate components such as propane, ethane and Butane from the gas. • Sources include Ethylene Glycol dehydrator with flare, Engines, Re-boiler and Storage tanks • Fugitive Emissions from Equipment Leaks • Emissions include, NOx, VOCs and CO • SWRO has a issued a Plan approval for a gas processing plant to remove moisture and propane from the gas.

6. Overview of Air Quality Program • Pennsylvania has an air quality construction permit ("plan approval") program and an air quality state operating permit program since 1972. • These programs have been administered by the Department under the authority of the Pennsylvania Air Pollution Control Act ("Act") (35 P.S. §4001 etseq). • On July 9, 1992, the Pennsylvania Air Pollution Control Act was substantially amended to provides PA DEP the authority to implement the Clean Air Act requirements including the Title V operating permit program.

7. Permitting Process • Before a new air contaminant source can operate in the state of Pennsylvania, an air permit is usually required. The purpose of the air permit is to legally limit the amount of air contaminants that a source can release into the atmosphere. If a permit is needed, the type of permit a source will require depends on the type and amount of pollutants it is capable of emitting. Usually, either a State-Only or a Title V permit is required.

8. Permitting Process • The process of obtaining the air permit generally consists of two steps: • First, an applicant must obtain a plan approval from the Department in order to begin construction, installation, or modification of the source. • Secondly, once the source is constructed in accordance with the plan approval, the applicant must obtain a permit to operate the source.

9. Plan Approval • A Plan Approval is a written approval from the Department which authorizes a person to construct, assemble, install or modify any stationary air contamination source. It also includes the installation of any pollution control equipment or device.

10. Exemptions & Request for Determination (RFD) • Pursuant to 25 Pa. Code § 127.14, DEP may determine sources or classes of sources to be exempt from the plan approval and permitting requirements of 25 Pa. Code Chapter 127. • Exempted if it is included in the Air Quality Permit Exemption List or determined on a case-by-case basis through a Request for Determination (RFD) • RFD form may be submitted to the DEP either in a paper form or online electronically • Currently, the drilling phase of Marcellus Shale exploration activities is exempt from plan approval requirements.

11. Exemption List Re-proposal • On May 29, 2010 DEP re-proposed the Exemption List because of the substantial revisions made in response to comments submitted to the Department following publication in the Pennsylvania Bulletin of proposed revisions on November 22, 2008. See (40 Pa.B. 2822). • The proposed conditional exemption pertaining to oil and gas exploration, production facilities and operations is provided at Category 38. Current blanket exemption for the drilling phase will be replaced with the conditional exemption. • The owners and operators of engines not meeting the requirements identified in Category No. 38 are required to submit a RFD to the Department. If the RFD is not approved by the DEP, an application seeking authorization to use a general permit or plan approval must be submitted to the appropriate DEP regional office.

12. Proposed Exemption List • In the proposed list, the following language was published pertaining to Marcellus Shale activity in Section 127.14(a)(8) exemptions that do not require submission of a RFD form: • …38. Oil and gas exploration and production facilities and operations (include wells and associated equipment and processes), not located at a major source, meeting the following requirements: • i. All engines used at a facility shall not emit combined NOx emissions of more than 100 lbs/hr, 1000 lbs/day, 2.75 tons per ozone season (period beginning May 1 of each year and ending on September 30 of the same year) and 6.6 tons per year on a 12-month rolling basis. • ii. Sources of uncontrolled VOC emissions shall not emit more than 2.7 tpy. If VOCs contain HAPs emissions, the HAP exemption criteria in Paragraph v of this category must be met.

13. Revised Exemption List • iii. Temporary flares used at the drilling site shall not operate more than 14 days at each site. • iv. The owner or operator of liquid storage tanks and truck loading facilities shall minimize atmospheric emissions to the maximum degree possible. The measures utilized to minimize emissions shall include carbon canisters on tank vents, use of flares, vapor recovery units or thermal oxidizers on tank vents, the use of pressure relief valves which are maintained in good operating condition and which are set to release at no less than 0.7 psig (4.8 kilopascals) of pressure or 0.3 psig (2.1 kilopascals) of vacuum or the highest possible pressure and vacuum in accordance with state or local fire codes or the National Fire Prevention Association guidelines or other national consensus standards acceptable to the Department. Loading racks equipped with a loading arm with a vapor collection adaptor and pneumatic, hydraulic or other mechanical means to force a vapor-tight seal between the adaptor and the hatch of the tank must also be used to minimize emissions. • v. Sources of uncontrolled HAP emissions of less than 1000 lbs/yr of a single HAP or one tpy of a combination of HAPs that does not include Polychlorobiphenols (PCBs), Chromium, Mercury (Hg), Lead (Pb), Polycyclic Organic Matter (POM), Dioxins and Furans.

14. EPA Single Source Guidance • On September 22, 2009, EPA’s Assistant Administrator for the Office of Air and Radiation, Gina McCarthy, withdrew a 2007 EPA memorandum entitled “Source Determinations for Oil and Gas Industries,” • The memo focused primarily on geographic proximity for stationary source determinations for the oil and gas industry. • The withdrawal of the policy will result in certain operations being treated as major sources. This decision will affect how we aggregate emissions; multiple sites which are adjacent and under common control would be treated as a single facility for New Source Review applicability purposes; • Permitting authorities would also be required to consider whether the activities belong to the same industrial grouping for Title V purposes. 

15. General Permit • General Permit (GP) includes General Plan Approval and General Operating Permit • GP is optional and is valid for a period of 5 years. Applicant may opt to apply for a plan approval • The gas production/compression stage is covered by the Bureau of Air Quality’s General Permit for Natural gas, coal bed methane or Gob Gas production or recovery facilities (GP-5). We have authorized around 100 applications to use GP-5 in 2009 • Work has been initiated to revise GP -5 which would be applicable to any natural gas exploration and transmission facilities.

16. State Only Operating Permit • A State-Only Operating Permit is for facilities with emission rates below Title V thresholds, i.e., non major facilities. • The State-Only Operating Permit application can also be requested for facilities that are classified as Synthetic Minors. • A State-Only Operating Permit is usually good for 5 years.

17. Title V Operating Permit • Title V Operating Permits are for major facilities as defined in Pa. Code Title 25 Section 121.1 • The purpose of the Title V program is to detail a company’s air quality requirements in a single permit document so that industry, the regulatory agency and the public know exactly what regulations and requirements apply, what are the normal and potential emissions, and how the company will monitor compliance. These permits has a duration of 5 years.

18. NEXT STEPS • Finalize Exemption List Revisions • Propose revisions to General Permit (GP-5) • Build an inventory of sources and associated air emissions • Collect and Assess the Mobile Analytical Unit Sampling Data