Estimate of Air Emissions from Shale Gas Development and Production in North Carolina July 8, 2015 Presented to the Environmental Management Commission – Air Quality Committee D EPARTMENT OF E NVIRONMENT A ND N ATURAL RESOURCES D IVISION OF A IR Q UALITY S USHMA M ASEMORE M ICHAEL A BRACZINSKAS

Call for Shale Gas Air Quality Analysis Session Law , Section 2(c) as amended by SL , Section 6  DAQ required to estimate: 1) emissions from oil and gas exploration, development, 2) emissions from associated truck traffic  Determine impact to ozone levels 2

Overview of Air Quality Assessment Process 1. Build Emissions Inventory a.Quantify emissions discharged into the atmosphere 2. Photochemical Modeling a.Emission data input into model along with meteorology b.Quantify formation and transport of ozone and pollutants 3. Assess Air Quality Impacts a.Quantifies increase/decrease in concentration of pollutants b.Impacts to receptors 3 Emissions Inventory Photochemical Model Air Quality Impact +

4 Pollutants Inventoried * Nitrogen oxides (NO X ) Volatile Organic Compounds (VOC) Carbon monoxide (CO)Sulfur dioxide (SO 2 ) Particulate Matter - PM 10 & PM 2.5 Methane (CH 4 ) Benzene (C 6 H 6 )Methanol (CH 4 O) Toluene (C 7 H 8 ) Hexane (C 6 H 14 ) Ethylbenzene (C 8 H 10 CH 2 CH 3 ) Styrene (C 8 H 8 ) Xylene (C 8 H 10 ) Acrolein (C 3 H 4 O) Formaldehyde (CH 2 O) Acetaldehyde (C 2 H 4 O) Ozone (O 3 ) – formed from NO X and VOC in the presence of sunlight *where emission factors are available for a given activity

Gathering* Compressor Engines Well Pad Roadway ProductionProcessing Gathering*, Transmission, and Distribution Development Gas Processing Plant Transmission Compressor Station To Market Shale Gas Phases 5 Well Pad

Key Assumptions 1.Gas recovery occurs in the Sanford sub‐basin (59,000 acres) 2.Cumulative gas produced by the field is 773 Bcf 3.Well spacing of 160 acres, total of 368 wells drilled 4.Year of maximum activity is Year new wells drilled and 247 producing wells Total produced gas is 151,605 MMcf 5.4 wells drilled per pad, total of 92 pads 6.National average raw gas composition assumed 7.40 CFR Part 60 and Part 63 regulations apply 8.Non-road engines used for drilling and pumping are subject to Federal engine standards (40 CFR 89) 9.Total annual emissions for Year 6 was assumed to be distributed evenly throughout the year to arrive at a daily emission rate 6 Bcf = billion cubic feet MMcf = million cubic feet

Summary of Results Estimated Annual Emissions of Criteria Air Pollutants Criteria Air Pollutants (ton per year) PhaseNO X VOCCOSO 2 PM 10 PM 2.5 Development Mobile Contribution* Production Processing E-02 Gathering & Transmission YR 6 Total Shale Gas Emissions (tpy) 1,344 1, *Shown for illustration purposes; mobile sources emissions are incorporated into Development emissions

Daily Emissions of Criteria Air Pollutant by Activity Used for Modeling Criteria Air Pollutants (ton per day) PhaseNO X VOCCOSO 2 PM 10 PM 2.5 Development E Production E-041.1E-02 Processing E-021.4E-04 Gathering / Transmission E-045.5E-03 YR 6 Total Daily Emissions (tpd) E

Relative Contribution of NO X Emissions by Activity 9 NOTE: Less than 1 tpy or Zero NO X Emissions from the following phases/activities: Development - Land Clearing, Unpaved Roads, Drilling Mud Degassing, and Green Well Completion Production - Produced Water tanks, Glycol dehydrator and associated reboiler, Pneumatic Controllers, Fugitive leaks Processing - Glycol dehydrator and associated reboiler, Vents, Fugitive Leaks & Venting, Acid Gas Waste Sweetening Units Gathering Stations (all) - Glycol dehydrator and associated reboiler, Vents Transmission - Glycol dehydrator and associated reboiler, Vents, Fugitive Leaks & Venting

Photochemical Modeling Utilized the 2007/2018 SEMAP modeling platform to estimate ambient air quality impacts from shale gas development. – Air Quality Model: CMAQ v – 12km resolution – 2007 meteorology Model data post-processed to generate graphical air quality output, EPA MATS software for station- specific air quality predictions. 10

Shale Gas Emissions Modeling Methodology - Geography Total shale gas emissions evenly distributed throughout the shale gas area (light blue image to the right). Surface area of estimated shale gas drilling area partitioned into 12- squared-kilometer model grid-boxes. Each individual grid-box’s percentage to the total shale gas area determined. This percentage determined how much shale gas emissions were produced within each grid-box. Shale gas emissions merged with 2018 SEMAP emissions. 11

Photochemical Modeling Scenarios Performed four CMAQ model runs: – Base 2007 emissions – Base 2018 emissions – Scenario 1 - Base 2018 emissions merged w/ estimated shale gas emissions. – Scenario 2 - Base 2018 emissions merged w/ only the estimated NOx emissions from shale gas development. Impacts estimated by taking the difference between the base 2018 and each of the shale gas scenarios. Focused on the highest ozone days in the Base 2018 run for analysis. – Year hour ozone values >60 PPB in the Triangle area. 59 total days studied. 12

Results – Predicted Change at Monitors 13 CountyMonitor Base07 Ozone Design Value (ppb) 1 Future18 Ozone Design Value (ppb) 2 Sanford18 Ozone Design Value (ppb) 3 Change from Future18 to Sanford18 (ppb) LeeBlackstone ChathamPittsboro WakeFuquay-Varina MontgomeryCandor WakeMillbrook Durham CumberlandWade GranvilleButner JohnstonWest Johnston FranklinFranklinton CumberlandGolfview Base 2007 ozone design values 2.Future 2018 model predicted ozone design values 3.Future 2018 model predicted ozone design values with emissions from shale gas development in the Sanford Sub-basin

Results – Comparison with Ozone Standards 14 Little to no increase in days with ozone > 65ppb.

Conclusions The average daily NOx emissions attributed to shale gas activities is estimated to be ~3.7 tons per day. No ozone attainment concerns anticipated. The additional emissions from this “maximum activity” scenario are predicted to increase ozone by less than 2 PPB in Lee County, and by less than 1 PPB across the remaining central NC monitoring sites. 15