On Thursday, August 8, 2013, the Pennsylvania Department of Environmental Protection (DEP) released final air quality plan exemption criteria to be applied to unconventional natural gas wells (i.e., gas wells drilled into the Marcellus shale) constructed as a new or modified source after August 10, 2013¹. Marking a significant shift in air permitting policy, DEP rolled back an automatic blanket exemption previously enjoyed by operators of unconventional gas wells for air quality plan approvals for well sites since 1996. Under DEP’s revised technical guidance, however, an exemption remains available, provided operators implement controls that are more stringent than the applicable minimum federal standards.

Regulation of Air Contamination

The construction, modification, reactivation and operation of sources of air contamination (including pollution control equipment) are regulated under Chapter 127, Title 25 of the Pennsylvania Code to ensure the achievement and maintenance of ambient air quality standards in the commonwealth. Under the operational flexibility provisions of section 127.14, however, DEP may exempt from certain Chapter 127 requirements any sources (and classes of sources) that the DEP determines to be “of minor significance.”²

In its Technical Guidance Document No. 275-2101-003 titled “Air Quality Permit Exemptions,” DEP has listed 44 source categories that it has determined, under specified circumstances, to be of minor significance and therefore exempt from the requirement to obtain air quality plan approval.³ Category 38 covers sources associated with oil and gas exploration, development and production facilities and associated equipment and operations, including unconventional natural gas wells and wellheads.

The Category 38 Exemption as Applied to Unconventional Gas Facilities

Under its revised technical guidance, DEP has finalized the exemption criteria that will be applied specifically to unconventional wells, wellheads and associated equipment. An “unconventional well” is defined essentially to include any Marcellus shale well requiring hydraulic fracturing or multilateral bores to produce natural gas.⁴

The specific controls and practices applicable to these facilities under the revised guidance include the following:

• Within 60 days after a well is put into production and annually thereafter, a leak detection and repair program must be implemented for the entire well pad and facility, including valves, flanges, connectors, storage vessels/tanks and compressor seals.
• Leaks are to be repaired within 15 days after detection unless the site is down or replacement parts must be ordered. Repairs must meet further criteria as specified in the technical guidance.
• Storage vessel leak detection and repair must be performed in compliance with the federal regulations at 40 C.F.R. part 60, subpart OOOO.
• Leaks, repair methods and repair delays must be recorded and maintained for five years, which is consistent with federal requirements. Note that DEP does not consider emissions for safety reasons or prevention of gas migration from equipment designed to vent such as pneumatic controllers or to protect well integrity to be leaks.
• Aggregated emissions of volatile organic compounds (VOCs) from all facility sources must be less than 2.7 tons on a 12-month rolling basis.
• Emissions of hazardous air pollutants (HAPs) must be less than 1,000 pounds of a single HAP or one ton of all combined HAPs in any consecutive 12-month period.
• Combined emissions of nitrogen oxides from the stationary internal combustion engines wells and wellheads must be less than 100 pounds per hour, half a ton per day, 2.75 tons per ozone season and 6.6 tons per year on a 12-month rolling basis (not to include emissions from sources operating under previously approved plans/operating permits).
• Flaring is to be used only as provided in the technical guidance, primarily as a short-term or emergency activity. Any permanent flaring operations (e.g., used as emission control on storage vessels) must be enclosed.

Even where an unconventional well may not meet all of the above criteria, owners/operators of covered sources may nevertheless submit to DEP a request for determination seeking plan approval exemption. It should be noted, however, that the exemption is not available to a source subject to major facility requirements such as new source review and Title V permitting. If the request is not approved, an application for general permit coverage or a plan approval must be made.

The exemption criteria are more stringent than the federal requirements at 40 C.F.R. part 60, subpart OOOO in a number of significant ways. For example, the leak detection and repair requirements apply to the entire wellhead and not just storage vessels/tanks. The emission reduction requirements for VOCs, HAPs and nitrogen oxides are much tighter than under federal law. Also, permanent flaring activities must be enclosed. DEP anticipates that by implementing its exemption criteria, sources will be controlled to levels equal to or better than current New Source Performance Standards or Best Available Technology levels.