Oil & Gas Shale:

TCEQ

Lessons Learned

Texas Commission on Environmental Quality November 18, 2014

Mission Statement:

The Texas Commission on Environmental Quality strives to protect our state's public health and natural resources consistent with sustainable economic development. Our goal is clean air, clean water, and the safe management of waste.

2

Staff and Budget

• TCEQ is the environmental agency for the state.

• Approximately 2,767 employees

• 16 regional offices (~ 740 employees)

• $379 million operating budget •84% program fees •11% federal funding •3% general state revenue

3

Organization

4

Shale Development in Texas

Wolfcamp

Wolfberry

Cline Eaglebine

Page

7

Page 8

Poland

United Kingdom X2

Canada

Spain

Japan x 5

China x6

India x2

Jordan

Brazil x2

Turkmenistan

Iraq x2

Australia

Bulgaria

Ukraine

Turkey

Austria

South Africa

Netherlands

Mexico

Sweden

Approximately 300,000 Active Oil and Gas Wells as of January 2014 and Growing

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TCEQ Regulatory Activities

Who Regulates Oil and Gas Activities in Texas? • The Railroad Commission of Texas (RRC) has primary

regulatory jurisdiction over the oil and gas (O&G) industry.

• The Texas Commission on Environmental Quality (TCEQ) is the environmental agency for the state. •Surface water rights •Public water systems •Air emissions •Spills (Hazardous substances, refined petroleum products,

abandoned containers (unknown substances not leaking)

11

State Air Regulations - Authorizations

Since September 1, 1972, owners and operators of an O&G site must obtain an authorization for air emissions.

The agency uses a tiered approach to provide more options for permitting oil and gas facilities: de minimis sources; historical standard exemptions, permits by rule (PBR); standard permits; and case-by-case permits.

12

Oil and Gas Permitting Options

Increasing

Levels of

Emissions

De Minimis

Permit by Rule

Standard Permit

Minor NSR Permit

NNSR and PSD

13

But what about the dust, noise, and traffic associated with O&G sites?

• Dust from public roads should be addressed by the local government.

• Noise complaints should be reported to the local law enforcement agency.

• Traffic complaints should also reported to the local law enforcement agency.

14

TCEQ Air Regulations – cont.

A company had an “upset” at an O&G site that lead to unauthorized air emissions.

• Are they required to record the information concerning the event? Yes

• Are they required to report the event to the TCEQ? Depends on what and how much was emitted

• 30 TAC §101.201 and §101.222 have all of the answers

15

TCEQ Air Regulations

Someone has complained to the TCEQ about an odor or dust issue at a well pad that is being completed, what TCEQ rules could apply?

• 30 TAC §101.4 – Nuisance and

• 30 TAC §111.111 – Visible emissions

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TCEQ Air Regulations (cont.)

• Chapter 101 – State delegation of some Federal Regulations

• Chapter 112 – Control of sulfur dioxide and hydrogen sulfide

• Chapter 113 – State adopted 40 CFR Part 63 (MACT rules)

• Chapter 114 – Control of air pollution from motor vehicles - Gasoline and diesel

• Chapter 115 – Control of air pollution from volatile organic compounds

• Chapter 117 – Control of air pollution from nitrogen compounds

17

Federal Air Regulations

40 CFR Part 60 New Source Performance Standards (NSPS) •Subpart KKK – Equipment leaks of VOC from onshore natural gas

processing plants •Subpart LLL – Standards of performance for Onshore Natural Gas

Processing: SO2 emissions •Subpart JJJJ – Standards of performance for stationary spark

ignition internal combustion engines

40 CFR Part 63 National Emission Standards for hazardous Air Pollutants (NESHAP) •Subpart HH – Natural gas production facilities •Subpart HHH – Natural gas transmission and storage facilities •Subpart ZZZZ – Reciprocating internal combustion engines

18

Federal Air Regulations (cont.)

• Federal NSPS and MACT changes •EPA’s new Part 60 Subpart OOOO – Standards of

Performance for Crude Oil and Natural Gas Production, Transmission, and Distribution.

• Affected Facilities Include: •Natural Gas Well Completions •Centrifugal & Reciprocating Compressors •Pneumatic Controllers •Storage Vessels •Glycol Dehydrators •Gas Plant Fugitives and Treatment Units

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National Ambient Air Quality Standards

• All areas of the state are designated as attainment for NO2, CO, SO2

• A portion of one county designated nonattainment for lead

• All areas in Texas attainment/unclassifiable for 24-hour and annual PM2.5 NAAQS

• All areas attaining PM10 except the City of El Paso – moderate nonattainment

• All areas in Texas attaining O3 NAAQS except HGB and DFW areas

• BPA area maintenance for 1997 standard and attainment for 2008

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0

5

10

15

20

25

30

48

66

84

102

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Millions ppb Eight-Hour Ozone Design Values and Population

in Texas

Population BPA

CC DFW

HGB ARR

ELP SAN

NET VIC

1997 Eight-Hour Ozone NAAQS: 84 ppb 2008 Eight-Hour Ozone NAAQS: 75 ppb

*Design Values are from EPA's AQS **Nonattainment area population from US Census Bureau.

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2013 Ozone Design Values

87

87

81

73 75

72 74

60

67

70

77

74

71

64

22

23

2013 Ozone Design Values

Estimated year-to-date 2014 Ozone Design Values

=Based on federal requirements, areas where new ozone monitors could be required

Estimated year-to-date 2014 Ozone Design Values

81

79

78

69 70

72 69

58

62

64

71

72

65

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Ambient Air Monitoring in Texas

• Mobile monitoring (short-term monitoring) •Two Primary Job

Functions •Emergency Response •Mobile Monitoring

• Ambient air monitoring networks (long-term monitoring)

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Statewide Monitoring Network

• There are between 219 and 232 monitoring sites located statewide, depending on the time of the year.

• At many of these monitoring sites, there are multiple sampling instruments.

• So the Texas network has approximately 1,200 individual samplers. Half of which are controlled by the TCEQ.

• Much of the data is transmitted to Austin and displayed in real time on the agency’s website: http://www.tceq.texas.gov/agency/air_main.html/#monitor

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www.TexasOilandGasHelp.org

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2013 Average Benzene Concentrations at Air Monitoring Sites in Texas

TCEQ Long-Term Air Monitoring Comparison Value - 1.4 ppb

Barnett Shale Monitors Floresville Other Texas Monitors

(Values shown are arithmetic means of hourly autoGC measurements where available*;)

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2013 Average Toluene Concentrations at Air Monitoring Sites in Texas

Barnett Shale Monitors Floresville Other Texas Monitors

(Values shown are arithmetic means of hourly autoGC measurements where available*;)

TCEQ Long-term Air Monitoring Comparison Value: 1,100 ppb

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Barnett Shale Monitors Floresville Other Texas Monitors

(Values shown are arithmetic means of hourly autoGC measurements where available*;)

TCEQ Long-term Air Monitoring Comparison Value: 450 ppb

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Barnett Shale Monitors Floresville Other Texas Monitors

(Values shown are arithmetic means of hourly autoGC measurements where available*;)

TCEQ Long-term Air Monitoring Comparison Value: 140 ppb

Eagle Ford Shale Mobile Monitoring Study

• Under a contract with the TCEQ, the University of Texas at Austin conducted mobile monitoring upwind and downwind of the Eagle Ford Shale area.

• Monitored for ozone precursors to determine if there was a significant increase in ozone precursors downwind of the shale play.

• Also looking to see if the existing Wilson County monitor provides data representative of a large area downwind of the Eagle Ford Shale play.

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Eagle Ford Shale Mobile Monitoring Study Results

• Not a significant increase in nitrogen oxides or sulfur dioxide downwind of the Eagle Ford Shale.

• Did measure an increase in hydrocarbons downwind of the Eagle Ford Shale, but overall concentrations were small and the hydrocarbons potential impact on ozone formation would be primarily due to isoprene (typically emitted from trees and other vegetation).

• Study showed that the Wilson County monitor does appear to be representative of air quality generally downwind of the Eagle Ford Shale in this area. (adding a Karnes County monitor)

Summer 2013 Infrared Flyovers Eagle Ford Shale & Permian Basin

• Proactive tool to help identify new air emission sources, allow staff to focus their resources, and work with the identified facilities to address the observed emissions.

• Screening tool only, no direct violations based solely on the videos.

• Flew over parts of 23 counties, covered 4,200 square miles

• Observed over 16,000 storage tanks and other sources

• 417+ investigations, with a total of 62 NOVs and 8 NOEs.

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Number of Tanks with Observed Emissions Compared to Tanks Surveyed

County/Area

Tanks surveyed

Observed emissions

Percentage with observed emissions

2011 Eagle Ford Re-fly 408 55 13.4%

Dimmit / Webb 2,484 118 4.7%

La Salle 2,333 161 6.9%

McMullen 526 30 5.7%

Karnes / De Witt / Atascosa / Live Oak 4,459 210 4.7%

Crockett / Irion / Reagan / Upton 1,409 71 5.0%

Reeves / Ward / Winkler 2,883 76 2.6%

Ector / Midland / Howard / Martin 1,513 79 5.2%

Totals 16,015 800 4.9%

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So what did we see? REMEMBER: 95 percent of the time the contractor did not see any observed emissions.

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Video here

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UT Austin Mobile Monitoring Study

Canister Sampling

Infrared Flyovers

Ambient Monitoring Stations

What We Are Finding

• Nearly all of the issues documented arose from human or mechanical failures.

• These items were quickly remedied and could have been avoided through increased diligence on the part of the operator.

• Corrective actions amounted to little more than replacing worn gaskets, closing open hatches, and repairing stuck valves.

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Moving Forward

The TCEQ must continue to:

Ensure transparency of our efforts through abundant and timely communication with all interested parties;

Evaluate the existing ambient air quality monitoring network and expand, as needed, through the use of established agency protocol for determining the placement of long-term, stationary monitors;

Apply the use of state-of-the-art handheld air monitoring equipment to assess short-term, near-source air quality;

Maintain a frequent, routine investigative presence while also providing timely complaint response;

Base our rules and permits on sound science and common sense; and

Apply our enforcement tools in a fair and consistent manner.

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Contact Keith Sheedy, P.E. Technical Advisor Office of Air 512.239.1556 Keith.Sheedy@tceq.texas.gov