American Oil and Gas Reporter - January 2015 - 194
The Presidential Papers
Kentucky Oil & Gas
Association
RUDY VOGT III
Member Manager
Cumberland Valley
Resources LLC
Frankfort, Ky.
FROM THE PRESIDENT
No matter what the head of the U.S.
Environmental Protection Agency says
about the number of new regulations
being promulgated by her agency, over
the last year KOGA has been busy commenting on several proposed regulations,
evaluating their potential impact, and informing association members on the complicated compliance issues.
Over the past two years, EPA has implemented new regulations through 40
CFR 60, Subpart OOOO, regarding eliminating methane emissions during fracturing treatments of natural gas wells,
and reducing volatile organic compound
emissions from multiple sources, including
storage vessels. We still are waiting on
EPA's response to comments on its proposed changes to the definition of the
waters of the United States (WOTUS).
Clean Water Act Section 404 compliance has been among the new challenges
facing Kentucky's industry. KOGA has
been working with the state Division of
Water and the U.S. Army Corps of Engineers to educate association members on
how to comply. This challenge was magnified with the proposed WOTUS rule
changes. Even though the Corps and EPA
have indicated they don't expect significant
changes to the number of Kentucky waterways that would be regulated under
that section, review of the proposed
changes concern KOGA members.
KOGA hired a consultant to help it
understand the poorly written proposed
new definitions and help decide how they
would affect Kentucky operators. It was
the determination of the consultant and
the KOGA Technical and Regulatory
Committee that the new definitions could
increase dramatically the frequency under
which Corps permits would be needed.
The poorly written definitions and the
use of the term "nexus" to include areas
adjoining waterways that would not be
included in the "affected area" would expand areas disturbed from not even needing
a nationwide permit to possibly needing
an individual permit. The potential new
permitting requirements would be very
burdensome to the small oil and gas operators in the commonwealth.
KOGA has filed comments with EPA
and the Corps of Engineers on its concerns
with the proposed definitions. The association also has benefited from its relationship with the Independent Petroleum
Association of American, and has communicated to IPAA what it sees as the effects on small operators in Kentucky.
Air Quality Rules
The Kentucky Division of Air Quality
has been tasked with implementing EPA's
new air quality regulations set out in Subpart OOOO, having to do with methane
emissions associated with fracturing gas
wells and VOC emissions, from storage
vessels and other sources. KOGA has
been working with the DAQ to help it understand the drilling, completion, and production processes associated with oil and
gas production in the commonwealth.
DAQ encountered issues with how to
regulate flow back from fractured gas
wells. Historically, its typical permitting
scenarios included point-source emissions
over long periods. KOGA helped the
agency understand and incorporate regulation of a source of emission that may
occur only for a few hours.
The result is a compliance guide published by DAQ, and available to Kentucky
operators on line and through the Division
of Oil & Gas, where an operator can determine easily if his operation requires
notification to the state, what control
measures are acceptable, and how and to
whom reporting should be done.
194 THE AMERICAN OIL & GAS REPORTER
It has yet to be seen exactly what the
DAQ will accept as far as reporting,
since only a very small number of gas
wells were drilled and fractured in 2014
and the annual reporting is not due until
early this year. Again, with consultant
help and working with DAQ, it was
agreed that tanks receiving less than 20
barrels of oil a day did not require any
notification or VOC control. This makes
life easy for Kentucky's small operators
who don't have access to in-house technical staff. There are very few leases in
the commonwealth that produce more
than 20 bbl/d into one tank.
Last year, KOGA members, along
with representatives from several state
government agencies, environmental
groups and other industries, were invited
by Kentucky Energy and Environmental
Secretary Len Peters to participate in a
work group to review state oil and gas
regulations, and to make proposals to
revise regulations that would address
what was seen by the group as public
concerns with the industry, as well as to
develop regulations that would address
new situations in the commonwealth,
such as deep horizontal drilling and production, and large-volume hydraulic fracturing.
An ad hoc committee of KOGA members has been put together to review and
help form some of the suggested new
regulations, which then will be referenced
by KOGA members on the work group.
It is the hope of the Energy and Environment Cabinet to have a legislative
package to submit to the Kentucky Legislature with solutions to a few issues
that the work group has developed and
can support. It is anticipated that the
work group will continue working
throughout 2015.
What ties the association's efforts together is the fact that KOGA is working
toward solutions, not simply complaining
about problems. We owe it to our industry
and our membership to embrace the challenges and do our best to minimize the
impacts. That is what we have dedicated
ourselves to over the past two years-and
the results are starting to show.
Ì
Coming In February
Special Report: Gulf of Mexico
American Oil and Gas Reporter - January 2015
Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2015
Contents
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