1. 1 Shale Gas Development/Production Activities and Air Quality Mike Abraczinskas, Deputy Director North Carolina Division of Air Quality Shale Gas Development/Production Activities and Air Quality Mike Abraczinskas, Deputy Director North Carolina Division of Air Quality Mining and Energy Commission October 17, 2014

2. 2 Overview Characterization of air emission sources and pollutant profiles Regulatory framework Learning from others: –Permitting –Compliance assurance Gather the best emissions data –Estimate emissions per well pad –Estimate air quality impacts Gather baseline monitoring data Sharing knowledge

3. 3 Air Emission Source Profile Important to consider lifecycle of activities

4. 4 Regulatory Structure – Air Sources Overall, a regulatory framework is in place covering air emission sources (and the permitting process) at shale gas development and production facilities. USEPA’s New Source Performance Standards for Oil and Gas (Subpart OOOO) and National Emission Standards for Hazardous Air Pollutants (Subpart HH) are already adopted by reference into NC’s air quality rules (02D.0524 and 02D.1111) – August 2012. From USEPA in 2012: “The final rules include the first federal air standards for natural gas wells that are hydraulically fractured, along with requirements for several other sources of pollution in the oil and gas industry that currently are not regulated at the federal level. The rules for fractured gas wells rely on proven, cost-effective technology and practices that industry leaders are using today at about half of the fractured natural gas wells in the U.S.”

5. 5 Regulatory Structure – Air Sources Most states have not developed air quality rules specifically for shale gas activities. –Exceptions: when dealing with unique situations that resulted in violations of federal air quality standards –Note: most of the “experiences” with this type of activity have been during an era void of the federal air emission rules for unconventional gas exploration At this time, DAQ is not recommending: –any changes to existing rules –new rules Continue to review new studies and information… especially with regard to leak detection and repair.

6. 6 Air Quality Permitting Learning from other states How have they handled the different phases of the shale gas development process? None cover the drilling/fracturing/completion stage of the process in air quality permits. –Drilling/fracturing not considered stationary sources –Although, completion may be rolled into permits. Several states have developed general permits for the production stage (mainly small air permits for storage vessels and generators) Most compressors require an air permit. Processing facilities have the potential to be Title V major sources.

7. 7 Air Quality Permitting of Shale Gas Activities in other States *Typical equipment subject to permitting after the initial drilling and fracking phase includes: engines, tanks, and separators at well site; mid – stream compressor operations; dehydrators, pneumatic controllers, equipment leaks, and sweetening units at processing sites. StatesWhat is Permitted? ArkansasTypical* ColoradoTypical* KansasTypical* LouisianaTypical* OhioTypical* OklahomaTypical* PennsylvaniaTypical* TexasTypical* West VirginiaTypical* UtahTypical* WyomingTypical*

8. 8 Emissions Assessment per G.S. 113-391(a3)(2) Gathering emission factors per pollutant to enable estimates of emissions per well pad developed. –Includes: truck trips and idling, land clearing and unpaved roads drilling and associated activities fracturing completion Gathering activity data estimates Continuing assessment 2014/2015: –Combine estimates of number of wells in a particular area, generate emissions estimates. Allows local and downwind air quality impacts to be assessed.

9. 9 Air Quality monitoring Assessment of existing monitoring network relative to shale gas deposits. Identified existing, well-placed upwind and downwind multi-pollutant air monitoring locations in Montgomery and Wake counties… but nothing in the area thought to be most promising for development. Establish a multi-pollutant air monitoring site in Lee County.

10. NC Air Quality Monitoring Network Deep River basin Sanford sub-basin Dan River basin New Lee County air monitoring location

11. 11 Baseline Monitoring - Summary 89 compounds will be measured. At least 1 year of baseline data will be collected. Continuous sampling for: –ozone, fine particles, nitrogen dioxide and sulfur dioxide Sampling every 6 th day for: –The remaining compounds. –Ensures that daily, weekly, seasonal patterns are captured. Meteorological data will be collected. –wind speed, wind direction, temperature and relative humidity Identical upwind and downwind sites.

12. 12 Opportunities to Share Information in 2013 & 2014 Mining and Energy Commission –Environmental Standards Committee Monitoring, testing, permitting, odor, dust, handling of confidential info. –Coordinated Permitting Study Group Comprehensive environmental permit for the development phase Air Quality Committee (AQC) of Environmental Management Commission DAQ Stakeholders –Outside Involvement Committee –Air quality forums in Greensboro, Hickory and Charlotte

13. 13 Recent activities “Oil and Gas Operations, Air Emissions, and Regulations” - 2014 –8 staff attended –Oil and Gas operations –Air Emissions –Emission calculations –Hydraulic Fracturing rules –Federal Regulations NSPS, Subpart OOOO NESHAP, Subpart HH and HHH Attending ECOS Shale Gas Caucus Reviewed EPA White Papers

14. 14 Final summary Federal rules in place. State rules apply. Monitoring baseline conditions… Source-oriented capable, if necessary. Complaint driven rules and processes in place. We respond. Potential for additional Federal rules. Estimating emissions - air quality impacts. Evaluating/learning from other states. Sharing information and recommendations. No changes to existing rules.. No new rules recommended at this time.

15. 15 Contact Information Mike Abraczinskas, CPM, EIT Deputy Director NC Division of Air Quality (919) 707-8447 –Visit our web site: http://www.ncair.org/ Michael.Abraczinskas@ncdenr.gov