Michael Hopkins Assistant Chief, Permitting Ohio EPA 614-644-3611 Air Permitting for Oil & Gas Well Sites.

Michael HopkinsAssistant Chief, Permitting

Ohio EPA614-644-3611

Air Permitting for Oil & Gas Well Sites

Discussion Topics

• Basics of an oil & gas well site• Three phases of development• Equipment installed• Exemptions• Permitted sources• Status of GP• Common Q&A

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Ohio’s Shale Plays

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Why Now?

• New method to get oil and gas from rock• 7,000 to 10,000 feet below ground• (Freshwater typically 10-1,500 feet)• Could satisfy 14 years of US NG demand• Also contains significant oil reserves

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Extracting Gas from Shale

• Three Phases– Drilling– Fracturing– Production

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Drilling Phase

• Drill initial bore• Insert well casings• Multi layer concrete

and steel• Drill rest of well (15-25

days)• Turn drill and drill

horizontally into shaleSource: ConocoPhillips Company

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Drilling Phase Equipment

• Portable drilling rigs w/ diesel engines (3-5,000 HP TTL)

• Diesel compressor engines (~3,000 HP)

• “Construction” roads• Portable storage tanks• Temporary flare to handle

gas safely• Lots of trucks

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Fracturing Process

• Isolate part of horizontal well

• Perforate through well casing

• Pump high pressure fracturing fluids into well to fracture rock and insert sand

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Fracturing Process

• Pump out fluid• Move to next part of

well• “Flow back” of

fracturing fluids to storage tanks

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Fracturing Phase Equipment

• Large diesel engines for pumping fracturing fluids (15 engines at 1,125 HP each = 17,000 HP)

• Temporary storage tanks• Lots and lots of support equipment• Lots of trucks• 2-3 days per well

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Fracturing Phase Photo

Source: Chesapeake Energy Corporation, 2008

Hydraulic Fracturing of a Marcellus Shale Well, West Virginia11

Production Phase

• Install gas conditioning equipment, liquid storage tanks, control equipment

• Designed to control pressure, flow; remove water, remove organic liquids

• Equipment generally stays static• As gas flow changes with time, equipment may be

swapped out

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Sample Oil & Gas Site

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Production Phase Equipment

• Dehydration/conditioning system• Natural gas-fired engines for compressors (up to

1800 HP total in GP)• Diesel-fired engines for power generation (up to

250 HP total in GP)• NG micro-turbines for power generation (2-200 kW

allowed)

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Production Phase Equipment

• Water and petroleum liquid storage tanks (up to fifteen 39,000 gallon tanks)

• Combustor/Flare (no more than 10 MMBtu/hr?)• Ancillary equipment (compressors, pumps, piping,

etc.) (equipment leaks)• Unpaved roadways (up to 3 miles) • Lots of trucks removing liquids

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Pollutants Expected

• Criteria (NOx, PM, CO, VOC, SO2(little))• Some HAPS (<10/25)

– Acetaldehyde– Formaldehyde– Benzene– Ethyl benzene– N-Hexane– Naphthalene– Toluene– Xylene– H2S (not expected in Ohio)

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General Permit Approach

• Drilling and fracturing phases are exempt• Production phase is not• GP designed to cover most, but not all, well sites• Covers well site (six wells typical)• Intended as a non-synthetic minor

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GP Unique Features

• Allows installation of various size engines if combined HP limit met

• Allows swapping of engines w/o new permit• Allows installation of various size tanks• Restricts total flow to tanks• Requires very basic leak detection/repair program

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GP Status

• Official draft for comment sent out

• Comment period ended Nov. 28

• Hope to have final done in 3 weeks

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What will happen after GP is issued?

• Expect companies to apply• Expect to find “issues” with GP (will

revise/expand as needed)• Expect some companies will not qualify for GP

(use as template)

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Why no permits for drilling and fracturing?

• Drilling and fracturing are thought of as construction activities

• Largest emitting equipment: portable engines• Engines are exempt from air permits because they are “non

road engines” per 31-03/31-01• Roadways are exempt because “construction” roads (still

can’t cause nuisance)• Drilling engines and fracturing engines required to meet

NSPS• Feds proposed NSPS

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Why didn’t we require well sites to get permits before?

• Well sites were smaller• Minimum emissions

expected• New sites are much

larger with much larger equipment

• Rigorous review found rules apply.

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What should existing sites do?

• Two options:– Wait for GP– Submit case-by-case

permit

• Sent sample letter to companies

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Sample Letter to Ohio & Gas Well Site Developers Dear Oil and Gas Well Site Developer: This letter is being sent to any company that has applied for a Utica/Point Pleasant shale or Marcellus shale well drilling permit from the Ohio Department of Natural Resources (ODNR), Division of Oil & Gas Resources Management. It is being sent to you to inform you about some additional permitting requirements associated with Ohio’s air pollution control program managed by the Ohio Environmental Protection Agency (Ohio EPA). In anticipation of the significant oil and gas drilling activity expected in the near future in Ohio, Ohio EPA spend the past nine months or so studying oil and gas well site activities to determine if any of these activities are regulated under the Ohio EPA’s air pollution permit program. Based on this analysis, we found that the activities associated with the drilling and fracturing phases of these wells are currently exempt from the permit program. However, we found that many of the activities associated with and the /equipment employed during the production phase of an oil and gas well are required to comply with this permit program. Once it was determined that air pollution permits were required for certain production activities, Ohio EPA decided to develop what is called a General Permit for the affected oil and gas drilling activities. A general permit is a type of permit that is developed ahead of time based on the expected equipment to be installed. The general permit approach was chosen because the general permit processing and approval time for an individual well site can be very quick. We felt that using the general permit approach was best in order to prevent any approval delays that would adversely impact the work while still being protective of the health and welfare of the citizens of Ohio. The Ohio EPA has worked diligently to develop the general permit but the work is not yet complete. We are currently expecting the final general permit to be ready within one to two months. Recently, Ohio EPA has had several inquiries from drilling companies, consultants, or others concerning the need to obtain an air pollution permit. Currently companies can apply for air pollution permits, but the permits would need to be processed on a case-by-case basis (as opposed to the general permit process) which is likely to take a significant amount of time. In order to avoid approval delays associated with case-by-case permitting, Ohio EPA has developed an alternative approach to use until such time as the general permit becomes available. This alternative approach asks you, in lieu of submitting a case-by-case permit application, to provide a letter to the Ohio EPA similar to the sample enclosed. This

What Rules May Apply?

• BAT• MACT Subpart HH, Oil & Gas• Chapter 17• NSPS Subpart JJJJ, IIII (SI, CI ICE)• MACT Subpart ZZZZ (SI ICE)• NSPS Kb, tanks• Oil and Natural Gas Sector: New Source Performance

Standards and National Emission Standards for Hazardous Air Pollutants proposed rule issued August 23, 2011

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What about ponds?

• Most not expected to use ponds – portable tanks instead

• Water/fracturing fluids expected to be reused or disposed

• Ponds are not covered by GP

• Must get case-by-case permit if need one

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What other sources are expected?

• Intermediate stations: gas cleaning and compression stations

• Expansion of existing compressor stations

• Chemical company facilities: to take gas and/or VOC liquids and process them into other materials

• NG powered power stations

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Wrap up

• Lots of work ahead• Ohio EPA web site:

http://www.epa.ohio.gov/shale.aspx • ODNR web site:

http://www.ohiodnr.com/oil/shale/tabid/23174/Default.aspx

• Questions?

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