PINEDALE -- In a tone of gloom-and-doom, H. James Sewell of Shell Upstream Americas commiserated with several colleagues from QEP Resources Inc. and Ultra Petroleum -- the three main operators of the Pinedale Anticline natural gas field.
If the Environmental Protection Agency lowers the ozone allowance, probably 90 percent of the nation will be out of compliance – even Yellowstone National Park. How do you regulate those emissions!
Ground-level ozone is a common concern for urban areas of the nation where factories and clogged freeways are blamed for smog. Yet even here in the picturesque Green River Valley, where deer, elk and antelope far outnumber cars or people, ozone and ozone regulation is a critical matter.
Nitrous oxides from drilling rigs and other internal combustion engines in the Pinedale Anticline field helped trigger several high ozone events here in recent years. It compelled state regulators to insist on a plan for reducing emissions that contribute to ozone – also a key goal of the EPA nationwide.
Ozone is a serious risk to people with respiratory problems. At the end of this month, EPA is expected to announce about a 20 percent reduction in the maximum threshold for ground-level ozone.
In addition to ozone, EPA has indicated that oil and gas operations will soon be under tougher monitoring and regulation of greenhouse gases.
"If we want to add a facility, we have to figure out how to offset the (ozone-contributing) emissions. And we're not even a non-attainment area yet," said Sewell, Shell's senior staff environmental engineer in Pinedale.
Among these industry officials, trepidation seems an instinctive response to the prospect of tougher air quality standards. Yet Shell, QEP and Ultra say they've already made huge strides in cleaning up emissions -- even creating jobs and finding economic efficiencies in doing so.
The companies invested in a liquid gathering network for condensate -- or residual oil -- which has already eliminated tens of thousands of truck trips in and out of the field. Separating and compression facilities are equipped with low-bleed pneumatic controls and vapor-capturing devices to prevent venting methane gas and instead put it in the pipeline for sale.
Another major improvement was to equip drilling rigs with catalytic controls to cut emissions of both nitrous oxides and volatile organic compounds.
All of these measures enabled the operators to meet a goal of reducing nitrous oxide emissions to 2005 levels. The operators say they're well on their way to meeting other emission reduction goals.
"Some of the items are truly gains in efficiency," Sewell said. "That gas, instead of just wasting it to the atmosphere, we can burn it in a combustor or it can be used in our operations as fuel gas. So that's a gain in efficiency."
But, Sewell added, not every investment in curbing emissions has an economic payoff – at least for the natural gas operator. The Pinedale Anticline is a geographically concentrated natural gas field where economies of scale, along with special stipulations to allow year-round drilling, make such investments viable.
The shared liquids pipeline, for example, makes logistic and economic sense for the Pinedale Anticline operators. But it's an unlikely model for the dozen or so operators preparing to delineate the Niobrara oil shale spanning much of southeast Wyoming.
"It is more a possibility with smaller mom-and-pops -- the economy of scale makes it harder to be a net positive," said Bruce Pendery of the Wyoming Outdoor Council. "But I think many, many times environmental regulations cannot be construed as just a money-out-the-door proposition with no positives. That's just not the way it works."
Pendery, program director for WOC, said the Pinedale Anticline operators should be commended for taking on emission reduction programs, some of which are voluntary. Converting from high-bleed to low-bleed pneumatic controls, for example, not only puts more of a greenhouse gas into the sales pipeline, but the investment also is usually paid off in less than a year.
Pendery said the oil and gas industry seems to be picking up on these kinds of efficiency gains that also yield good public relations. But environmental groups including WOC are not comfortable with simply leaving it up to oil and gas companies to voluntarily curb emissions.
"We don't think they can do it in a vacuum. It should be done in the context of a significant oversight role of government," he said.
Pendery said the Pinedale Anticline operators understood that after an ozone spike one winter, they faced serious legal ramifications.
"There's a strong need to protect the environment. That's part of doing business on public lands, every bit as much as making a profit is," he said. "To the extent they (industry) embrace it, I think they will find the operating environment will be that much more productive for them."
Earlier this month EPA Region 8 administrator James Martin and several other EPA officials joined Wyoming Department of Environmental Quality Administrator John Corra for a tour of the Pinedale Anticline field. Air quality was the main topic of discussion.
"EPA was out here on a fact-finding mission, because Wyoming is looked at for how to do it right," Sewell said.