Air Quality, Acronyms, and Midstream Marcellus Operations
Posted: January 9th, 2012Author: All4 Staff
In the March 2011 issue of 4 The Record, ALL4’s Marcellus Gas team provided a general overview of air quality requirements surrounding drilling operations. Drilling, along with exploration, and the physical process of bringing gas to the surface are part of the exploration and production (E&P) sector, commonly known as “upstream” operations. Of course, finding gas and bringing it to the surface is only part of the process of ultimately bringing gas to end users. Marketing Marcellus gas requires the development of infrastructure to deliver the gas from the ground, to a pipeline, and ultimately to a customer.
The second phase of bringing the Marcellus gas to market is comprised of “midstream” operations. Midstream operations include natural gas gathering, dehydration and compression, processing, conditioning, treatment, fractionation, and transportation systems (e.g., pipelines). Gathering systems move natural gas from wells to gas production plants through low pressure, small diameter pipe with some treatment occurring near the wellhead. Heaters and scrubbers may also be installed in gathering systems near the wellheads. Scrubbers remove particulate matter impurities present in the raw gas while heaters ensure that gas temperatures do not drop too low. Small natural gas-fired heating units can be installed along the gathering pipe to reduce the occurrence of hydrates, which are solid or semi-solid compounds that resemble ice that can form when water is present in the gas.
Natural gas from the gathering systems is compressed and transported to “regional” processing plants. The treatment and processing of shale gas in processing plants is accomplished using the same techniques that are used in conventional gas processing plants. Processing plants use multiple technologies and treatment systems to remove oil and condensates, water, natural gas liquids (NGLs), and in some instances, sulfur, carbon dioxide, and other impurities. Pipeline grade natural gas from processing plants is then compressed and introduced into interstate natural gas transmission pipelines. Compressor stations are required at regular intervals on the pipeline to keep the gas moving through the pipeline. Natural gas from transmission pipelines is delivered to storage facilities or to distribution systems.
Midstream Air Quality Concerns
A key component of processing plants and transmission pipelines is the natural gas compressor. Natural gas compressors are typically driven by internal combustion engines fueled by the gas provided in the pipeline (although electric compressors are becoming more common). Reciprocating Stationary Internal Combustion Engines (RICE) are likely to be subject to various Federal regulatory requirements. Depending on the size, fuel, installation date, and other factors, the RICE units may be subject to Federal Standards of Performance for New Stationary Sources (NSPS) Subparts IIII-Standards of Performance for Stationary Compression Ignition Internal Engines or Subpart JJJJ-Standards of Performance for Stationary Spark Ignition Internal Combustion Engines. The RICE units may also be subject to National Emission Standards for Hazardous Air Pollutants (NESHAP) Subpart ZZZZ – Stationary Reciprocating Internal Combustion Engines.
Other NSPS and NESHAPs may be applicable to midstream operations including 40 CFR Part 60, Subpart KKK-Standards of Performance for Equipment Leaks of VOC from Onshore Natural Gas Processing Plants, which includes provisions for VOC leak detection and repair (LDAR) for gas processing plants. 40 CFR Part 60, Subpart LLL-Standards of Performance for Onshore Natural Gas Processing: SO2 Emissions may also apply. This NSPS includes requirements for emissions of sulfur dioxide (SO2) from gas sweetening and sulfur recovery units. Potentially applicable NESHAPs include 40 CFR Part 63, Subpart HH-National Emission Standards for Hazardous Air Pollutants from Oil and Natural Gas Production Facilities. This rule regulates HAP emissions from oil and natural gas production operations and contains provisions for both major sources (i.e., facilities that emit at least 10 tons per year of any single HAP or 25 tons per year of combined HAP) and area sources of HAP. 40 CFR Part 63, Subpart HHH – Natural Gas Transmission and Storage Facilities may also apply if the facility is a major source of HAP and utilizes glycol dehydrators.
Depending on the type and quantity of the emissions of regulated New Source Review (NSR) pollutants, State and even Federal air permitting requirements could be triggered for pipeline compressor stations and gas processing plants as sources of volatile organic compounds (VOC), nitrogen oxides (NOX), sulfur dioxide (SO2), particulate matter (PM), carbon monoxide (CO), and carbon dioxide (CO2). Individually, gathering systems, processing plants, and compressor stations would not likely qualify as major stationary sources1, 2 under State and Federal air permitting programs such as Prevention of Significant Deterioration (PSD) and/or Nonattainment New Source Review (NNSR). However, depending upon the ownership and control of the various midstream operations, their physical proximity to one another, and their processing relationship, air permitting agencies could consider the collective activities to be a single source, thereby increasing the potential to emit (PTE) of the collective source by “aggregating” the emissions of all of the smaller sources.
As noted above, the threshold for being classified as a major stationary source is relatively high under one program (e.g., PSD = 250 tpy) but relatively low under another (NNSR = 100 tpy, 50 tpy, or 25 tpy depending upon the level of nonattainment). What is even more troubling is that U.S. EPA has elected to not provide any real guidance regarding when emissions from multiple sources must be aggregated. They have elected to stay with their historical approach of evaluating possible aggregation projects on a “case-by-case” basis. The uncertainty around such determinations could force applicants for air permits for midstream operations to obtain formal determinations regarding the need to aggregate emissions prior to initiating any permit application actions. In addition, interested third parties (e.g., non-governmental organizations or NGOs) have discovered this “gray” regulatory area and have filed appeals to recently issued Plan Approval Applications in Pennsylvania. Becoming subject to PSD or NNSR permitting requirements is likely to adversely affect permitting timelines and elevate the project’s status from a public perception viewpoint.
1 40 CFR Â§52.21 (b)(1)(i) Major stationary source means: (b) Notwithstanding the stationary source size specified in paragraph (b)(1)(i) of this section, any stationary source which emits, or has the potential to emit, 250 tons per year or more of a regulated NSR pollutant;
2 Appendix S to Part 51-Emission Offset Interpretative Ruling 4. (i) Major stationary source means: (a) Any stationary source of air pollutants which emits, or has the potential to emit, 100 tons per year or more of any pollutant subject to regulation under the Act, except that lower emissions thresholds shall apply in areas subject to subpart 2, subpart 3, or subpart 4 of part D, title I of the Act, according to paragraphs II.A.4(i)(a)(1) through (6) of this Ruling.
This article identifies the main processes that comprise midstream operations for bringing Marcellus gas to market. The midstream processes required to deliver “clean” natural gas can vary widely depending on the location of the wellheads and the quality of the Marcellus gas. Development of the infrastructure required for midstream processes is ongoing and rapid growth in this area is anticipated to meet the demand for delivery of Marcellus gas for consumption.
Locating and drilling for Marcellus gas is only the first step in delivering the gas to the end user. Each midstream process is a potential emission source with varying levels of potential environmental impact. Potential emissions from each midstream process must be evaluated to determine applicability of air permitting requirements as well as applicability of other existing Federal and State air quality requirements and policy. It is likely that as the Marcellus gas midstream industry grows, regulatory agencies such as the Pennsylvania Department of Environmental Protection (PADEP) will “ramp-up” industry-specific policies and guidelines designed to ensure regulatory and permitting consistency across the Marcellus gas industry. Impacted entities and operators would be well served to understanding existing regulations and watch out for new regulations, guidelines, and policies.