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Air Quality Regulation of Oil and Gas Development:
Hydraulic Fracturing Leads to Evolving and New State
and Federal Standards, and Increased Efforts to Ban
Development at the Local Level
ABA 2015 Joint CLE Seminar
Environmental Breakout – Regional Perspectives on
Environmental Challenges to Controversial
Development Projects
By Colin G. Harris
Bryan Cave LLP
One Boulder Plaza
1801 13th Street, Suite 300
Boulder, CO 80302
(303) 417-8543
Colin.harris@bryancave.com
Bradley Purcell
Bryan Cave LLP
2200 Ross Avenue, Suite 3300
Dallas, Texas 75201
(214) 721-8057
Bradley.purcell@bryancave.com
I. Introduction
Over the past several years, oil and gas production and related midstream
activities in the several regions of the United States - - including Texas, the
Intermountain West, North Dakota, and Pennsylvania and its border states - - have
increased due to spectacular discoveries in unconventional resource plays, such as shale
gas, and new technologies, such as horizontal drilling and hydraulic fracturing. Although
crude oil and natural gas prices have declined due to oversupply and other factors, oil and
gas development will likely continue to grow and intensify, and will move into other
regions where shale resources are as yet untapped, such as Illinois and, if the recently
enacted state-wide hydraulic fracturing ban is successfully challenged, in New York.
The pace of this activity is facing gale-force headwinds caused by air quality
regulation and disputes, include efforts by local governments to entirely ban hydraulic
fracturing or oil and gas development. The Environmental Protection Agency (“EPA”)
and state and local agencies already have an intimidating array of Clean Air Act rules
applicable to drilling, natural gas processing, storage, compression, dehydration, and
pipeline transportation. The scope and stringency of the regulations in these sectors is
growing.
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EPA recently added to the complexity by amending the nationally applicable
“New Source Performance Standards” (NSPS) for upstream and midstream oil and gas
production facilities. The new regulations cover several operations and equipment,
including hydraulic fracturing, also referred to as “fracing.” The regulations overlay
rules and policies in states that already regulate the air quality impacts associated with
fracing and other upstream activities. The oil and gas industry is concerned that
complexities and uncertainties in the new rules may significantly impact the planning,
capital investment, and time for installation of required controls needed to achieve
compliance. Accordingly, oil and gas operators face increased costs, regulatory burdens,
public scrutiny, and delay.
This paper focuses on new regulations that specifically address the hydraulic
fracturing phase of oil and gas production. In addition, we hope that the reader will better
understand the fundamental and important distinction between fracing and the other oil
and gas development phases. Finally, while fracing is the focus of this paper, our goal is
to emphasize that vigorous emission control programs for the oil and gas sector as a
whole already exist, and as development increases and moves into more populated areas,
are becoming even more stringent. On top of the comprehensive federal and state
controls already in place, local governments have now decided to step into the fray and
enact regulations to ban fracing or oil and gas development entirely, based in substantial
part on perceived impacts to health and the environment from air emissions. Colorado
and New York have already weighed in on opposite sides of the debate about whether
local governments my regulate oil and gas activities, with California and Ohio waiting in
the wings.
A. Fracing is a Brief Phase of Drilling and Production
A common misunderstanding is that hydraulic fracturing is a drilling technique, or
that fracing is the same as oil and gas production. In fact, fracing is a very brief phase in
the life-cycle of a well, often lasting just a few days. Consequently, the potential air
quality impacts associated with the actual process of fracing are limited to that short time-
frame. Oil and gas production causes other emissions, which are subject to various
controls, but these occur either before fracing - - during the drilling phase - - or after,
when, for example, gas is processed or oil is stored.
B. What is Hydraulic Fracturing and How Does it Generate Emissions?
After the well is drilled, the well bore is cased with steel and cement to protect
against any fluid or gas loss during operation of the well. After the drill rig is removed,
the well is completed and stimulated. Hydraulic fracturing is a well stimulation
technique utilized to optimize well performance. The shale resource is typically a mile or
more below groundwater supplies, separated by layers of bedrock. Fracing is necessary
to create small fissures in the rock to release the gas or oil. This involves injecting a
typical mixture of 90 percent water, 9.5 percent sand and proppants (which hold open the
fissures), and 0.5 percent chemicals (these help reduce friction and bacteria growth) into
