Month: January 2010

Pennsylvania DEP Training Focuses On Regulatory Oversight of Oil and Gas Industry

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Over 650 stakeholders in Pennsylvania’s rapidly growing oil and gas industry gathered in State College, Pennsylvania on January 11th and 12th of 2010 to participate in the Pennsylvania Department of Environmental Protection’s (PADEP) Regulatory Training for the Oil and Gas Industry.  The attendees included, among others, representatives from exploration and production groups, midstream operators, consulting engineering firms, and the PADEP.  The purpose of the presentation was to provide industry training and updates on permitting, policy, and regulations in Pennsylvania pertaining to the oil and gas operations.

The 1½ day training session focused on PADEP’s oversight of the following aspects of the industry:

  • Erosion and Sedimentation Control Permitting for Oil and Gas Construction Activities
  • Impoundment Permitting for Marcellus Shale Gas Wells
  • Waste Reporting and Disposal
  • Stream and Wetland Protection and Permitting
  • Spill Reporting Requirements
  • Water Management Plans and Water Use Reporting Requirements

While the training session was intended for Pennsylvania’s oil and gas industry in general, the focus of the presentations and the reason for the overwhelming attendance was the development of the Marcellus Shale play.  The Marcellus has presented unique challenges for both operators and regulators in that the process of developing and completing a typical Marcellus well involves many elements and development at a scale atypical of traditional oil and gas exploration in Pennsylvania.  Increased well development and vastly increased quantities of gas are spurring the development of gathering lines, transmission lines, and gas treatment, fractionation, and compression facilities across the Commonwealth.  Increased current and projected activity and the processes necessary for successful extraction of natural gas from the Marcellus shale have spurred additional regulation and prompted the PADEP to provide training and informational sessions such as the recent event in State College to communicate both new and existing regulatory requirements to stakeholders.

The PADEP has implemented new regulation or applied existing regulations to all aspects of the Marcellus development with the goal of protecting Pennsylvania’s natural resources.  Earth disturbance associated with natural gas development projects on sites in excess of five acres is regulated under the ESCGP-1 general permit.  The construction of impoundments to hold fresh water for use in the hydraulic fracturing process and to receive produced water from the wells is regulated under PADEP’s Chapter 105 Dam Safety and Waterway Management Program.  The permitting of impacts to streams, wetlands and other water bodies is also regulated under the Chapter 105 program and by the US Army Corps of Engineers.  Approvals for use of water in the drilling and hydraulic fracturing process must be obtained through the PADEP Bureau of Oil and Gas through the Water Management Plan process and the Susquehanna River Basin Commission or Delaware River Basin Commission, where applicable.  Waste disposal and treatment is regulated through the PADEP Bureaus of Oil and Gas and Waste Management.  Operators are required to keep records of their waste handling, sampling, transport, and disposal activities and provide annual reporting to PADEP.

Future postings will provide more detailed information on the various aspects of the development of Marcellus Shale gas resources in Pennsylvania and other states. Specific questions about the topics identified in this posting can be answered by directly contacting our experts, Dustin Kuhlman at 800-365-2324 or dkuhlman@cecinc.com, Paul Kanouff at 800-899-3610 or pkanouff@cecinc.com.

Further information on the Marcellus Shale and the regulatory framework for managing the development of this resource is available at the following web sites:

Navigating Muddy Waters – New Effluent Limitation Guidelines Will Impact 21,000 Construction Sites Annually

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On November 23, 2009, EPA released the final Construction & Development Effluent Limit Guidelines (C&D ELG).  The final C&D ELG will impact all construction sites disturbing more than one acre by imposing non-numeric effluent limitations.  More importantly, the C&D ELG will impose numeric effluent limits for the first time on all construction disturbing more than 10 acres within approximately 4 years.  Most construction sites will need to use Passive Treatment Systems (PTS) to achieve those limits rather than the typical erosion and sediment control measures currently in use.  EPA estimates as many as 21,000 construction sites annually would need to meet those numeric limit standards.

In the past, sediment control practices have generally been designed based upon a rule of thumb.  Many states rely on 1800 ft3/acre of drainage (or disturbed acre), which doesn’t take into consideration the discharge quality.  In fact, a sediment control measure can have an 80% settling efficiency and still produce a turbid (muddy) discharge.  With this in mind, EPA has been struggling since early 2000 to establish a C&D ELG, with prodding from environmental groups.

In November 2008, EPA published a draft C&D ELG that set the ELG (turbidity) at 13 Nephelometric Turbidity Units (NTUs) for sites that disturbed 30 acres or more, were located in areas of the country with high rainfall intensity, and located on soils that had at least 10% clay.  That incredibly low turbidity limit (13 NTUs) severely limited the stormwater treatment options to Active Treatment Systems (ATS) that, simply put, look and function like small waste water treatment plants.  EPA requested public comment on the draft rule and requested additional data on the cost benefit analysis, treatment feasibility, and other components.  Concerns mounted as those affected began questioning the draft rule, particularly the feasibility of achieving the 13 NTU discharge standard.

EPA published the final C&D ELG in November 2009 with major revisions based on the comments received.  EPA chose to greatly simplify the rule and increase the numeric standard.  Below is a summary of the final rule:

  • All construction projects must install best practicable control technologies.
  • Sediment basins and other impoundments must be dewatered from the surface.
  • The ELG has been set at 280 NTUs.  This limit is a daily maximum average, based upon sampling for storms up to the 2 yr, 24 hr storm.  Discharges from storm events greater than the 2 yr, 24 hr are not required to meet the ELG.
  • Discharges from construction sites must meet an effluent limitation guideline as follows:
    • Within 18 months of the effective date of the rule (August 2011), sites disturbing 20 acres or more must meet the ELG.
    • Within 4 years of the effective date of the rule, sites disturbing 10 acres or more must meet the ELG.
    • For both scenarios above, the size limitations apply to “larger common plans of development” like subdivisions with multiple small lots.

Each state will need to marry the final C&D ELG with their existing monitoring plans, which will be a huge task.  Additionally, EPA has noted that as each state’s construction stormwater permit comes up for renewal, these requirements must be inserted.  EPA is the permitting authority in four states.  Their general permit is due to expire in June 2011 and will be reissued with the ELG requirements in it at that time.  Interestingly, North Carolina’s permit was in the midst of renewal when the ELG rule was finalized, and EPA only allowed their permit to be renewed for 18 months (through August 2011).  After that date, the reissued permit must include the ELG requirements.

As indicated earlier in this blog, PTS will generally be required to meet the numeric standard of 280 NTUs.  A PTS incorporates a flocculant with a standard construction site practice.  An example of a PTS is a jute-lined ditch that has been impregnated with polyacrylamide (PAM).   Design components that must be considered include mixing zones and settling zones.  At this point, we don’t have design tools that dictate the amount flocculant to be used on a site.  Flocculants and soils must be matched (not every flocculant works on every soil), and the applications tweaked in the field for peak performance.  Then the flocculant must be reapplied after rain events.

You can expect to have the ELG requirements inserted into the permit language if your state’s permit expires before August 2011.  If, however, your permit was reissued before the rule was finalized and without the ELG language in it, EPA could administratively open the permit to have the language inserted into it.  I suspect that between June 2011 (when EPA’s Construction General Stormwater permit expires) and August 2011 (the deadline to begin implementing the ELG) some permits may be administratively opened.  That option is certainly possible.

If you have any questions about the C&D ELG, how it may impact an upcoming project, and how you can meet the numeric standard, contact CEC’s Nashville office at (800) 763-2326.

Mandatory Greenhouse Gas Reporting – General Provisions

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If you are following the new 40 CFR 98 Mandatory Greenhouse Gas Reporting Rule (GHG Rule) you will know that facilities were to have started collecting reporting data on January 1, 2010.  You may be studying the requirements specific to your facility or industry group, but be sure to also take a careful look at Subpart A – General Provisions.  Subpart A contains provisions that are applicable to all facilities subject to the GHG Rule requirements.  A thorough understanding of Subpart A is a necessary prerequisite to complying with this new regulation.  Key elements include:

  •  Who must report;
  • When you can stop reporting;
  • How and when reports must be submitted;
  • What the annual report must contain;
  • Special provisions that have been made for 2010 reporting;
  • Recordkeeping requirements;
  • Calibration requirements; and
  • Definitions as well as tables of greenhouse gases (GHGs) and their global warming potentials.

The who, how, and when of reporting were addressed in our December 23, 2009 posting, but it is important to note that reporting is required on a facility-specific basis.  A facility, as defined in Subpart A, can be limited to a single stationary piece of equipment that emits a GHG.

The criteria for determining when reporting can cease is a function of whether or not the facility continues to emit GHGs and at what levels.  Continuous annual reporting is required unless:

  • The facility has five consecutive years of emissions below 25,000 metric tons (mt);
  • Three consecutive years of emissions below 15,000 mt; or
  • All GHG-emitting processes and operations subject to the rule cease to operate (although this provision does not apply to MSW landfills).

At least 60 days prior to submitting the first annual report, an electronic certificate of representation must be submitted to EPA.  EPA expects each facility to have only one designated representative who will be responsible for certifying, signing, and submitting GHG reports.  The contents of the annual report will include:

  • Facility name or supplier name and address;
  • The period of time covered by the report;
  • The date of the report;
  • For facilities – annual emissions of GHG as follows:
    • aggregate annual emissions (excluding biogenic CO2) for all GHG from all applicable source categories and expressed as carbon dioxide equivalents (CO2e);
    • aggregate annual emissions of biogenic CO2e;
    • individual GHG totals for each applicable source category; and
    • other data as specified in the respective subparts.
  • For suppliers – annual quantities of GHG that would be emitted from combustion or use of the supplied products during the year, as follows:
    • aggregate annual emissions for all GHG from all applicable supply categories expressed as CO2e;
    • individual GHG totals for each applicable supply category; and
    • other data as specified in the respective subparts.

One special provision for the 2010 report is the allowance for best available monitoring methods.  EPA expects GHG emissions to be estimated according to the specified methods.  However, due to the limited notice provided prior to the effective date, if it was not reasonably feasible to acquire, install, and operate required monitoring equipment by January 1, 2010, then best available monitoring methods may be used until March 31, 2010.  Best available methods may include:

  • Monitoring methods currently used by the facility that do not meet the specification of the relevant subpart;
  • Supplier data;
  • Engineering calculations; and
  • Other company records.

Extensions for continued use of best available monitoring methods beyond April 1, 2010 may be requested, but such requests need to be submitted by January 28, 2010.

Another special provision for the 2010 report applies to facilities where the only sources of CO2e are general stationary fuel combustion.  For such facilities, a simplified report will be accepted.  It would include the aggregate facility-wide GHG emissions and associated process information as well as general facility information and certification.

Records must be maintained for three years in either electronic or hard-copy format.  Specific records that must be retained include:

  • A list of all units, operations, processes, and activities for which GHG emissions were calculated;
  • The data used to calculate GHG emissions including:
    • emission calculations,
    • analytical results for the development of site-specific emission factors,
    • results of all required analyses (e.g., high heat value and carbon content), and
    • any facility operating data or process information used in GHG calculations,
  • Annual GHG reports;
  • Missing data documentation;
  • A written GHG Monitoring Plan;
  • The results of all required certification and quality assurance (QA) tests of continuous monitoring systems, flow meters, and other instrumentation; and
  • Maintenance records for all continuous monitoring systems, flow meters, and other instrumentation.

The written GHG Monitoring Plan needs to identify who is responsible for collecting the data, what processes and methods are used to collect the data, and what procedures and methods are used for quality assurance, maintenance, and repair of all continuous monitoring systems, flow meters, and other relevant instrumentation.

Relative to QA, EPA expects facilities to calibrate their flow meters and other measurement devices prior to April 1, 2010.  Fuel billing meters are exempted from the requirement, but unless a device cannot be removed because of continuous operation, calibration in accordance with manufacturer recommendations is required.  If a postponement in calibration is needed due to continuous operations, it must be documented in the GHG Monitoring Plan.

Other important elements of Subpart A include definitions that are applicable to the remaining subparts as well as Table A-1 that lists all 70 GHGs and their respective assigned global warming potentials.

CEC recommends that facilities develop a thorough GHG Monitoring Plan to document both the applicability determination as well as procedures that will be used to collect the required data, meet the QA requirements, and estimate emissions.  In our next posting we will take an in-depth look at Subpart C – General Stationary Fuel Combustion Sources.

If you have any questions regarding the requirements of Subpart A or other portions of the GHG Rule, please contact one of CEC’s GHG experts, Kris Macoskey. Their contact information can be found on the CEC Experts page.