American Oil and Gas Reporter - October 2016 - 100

ConventionCoverage: Eastern Kansas Oil & Gas Association

EKOGA Joins Opposition
To Methane Rules
By Dan Holder
MAYETTA, KS.-Washington's push
for tougher methane regulations is a major
concern for oil and gas operators, assessed
David Bleakley at the Eastern Kansas
Oil & Gas Association's annual convention, held Sept. 13-15 at the Prairie Band
Casino and Resort in Mayetta.
Bleakley, chairman of EKOGA's Regulatory Committee, warned that restrictions
imposed by the U.S. Environmental Protection Agency's newest climate change
initiative would only be heightened by
the speed with which it was imposed as
the Obama administration closes out its
term. The new methane section, Subpart
OOOOa, falls under the Clean Air Act
and New Source Performance Standards,
Bleakley said.
The rule announced in May sets emission standards for all hydraulically fractured wells-not just natural gas wells-
imposes leak detection and repair requirements on new, modified or reconstructed well sites; sets new control standards for pneumatic pumps; and requires
that professional engineers certify vent
systems on storage tanks, pneumatic
pumps and compressors (AOGR, July
2016, pg. 101).
Bleakley noted that the new standards
for existing or modified well sites was
issued in conjunction with an information
collection request for data on existing
well sites, which the industry couldn't
fight. He added that the ICR was the first
step toward imposing the new standards
on existing wells.
"The ICR is the paperwork all of us
have to do," Bleakley said. "EPA will
send all operators one of two parts. One
is the operator survey, which is an inventory of wells and tank batteries. That is
all supposed to go out by Oct. 30, and
operators have to respond within 30 days.
Part two will be a facility survey, where
operators have to do testing on wells or
tank batteries to determine how much
methane is being emitted. That one will
be due in 120 days. If you do not respond,
there is a hefty fine."
When EPA proposed its methane reg-

natural gas production.
"The EPA already has enough information and it does not need to bother operators to get more," Bleakley held. "But
EPA is bent on doing this. All operators
are going to get this ICR by Oct. 30. So,
unfortunately, be prepared for that."

David Bleakley, chairman of the Eastern
Kansas Oil & Gas Association's Regulatory Committee, provides a federal regulatory update during the association's
annual convention, held Sept. 13-15 at
the Prairie Band Casino and Resort in
Mayetta, Ks.

ulation, oil wells producing 15 barrels a
day or less were exempt from the revised
standards, Bleakley said. He said research
by the Environmental Defense Fund convinced the agency that all wells were
emitting some levels of methane, and it
opted to remove the exemption.
Complying with the new monitoring
requirements may cost as much as
$100,000 for each tank battery, Bleakley
warned. He indicated that companies
were working on less-expensive alternatives, but the main hope for relief would
be EPA recognizing that once primary
production declined, wells emitted zero
to little methane.
EKOGA has joined other organizations
in a lawsuit against the methane emission
regulations, and submitted a letter suggesting changes to the ICR, Bleakley reported.
The lawsuit argues that the regulatory
scheme is excessive, uneconomic, and
threatens the long-term domestic production of oil and gas without corresponding
environmental benefits. It asks EPA to
reinstate the 15 bbl/d exemption.
EKOGA's letter contends the ICR has
the potential to shut in as much as 20
percent of domestic oil and 13 percent of

100 THE AMERICAN OIL & GAS REPORTER

Leases
Kansas operators still have a measure
of uncertainty regarding abandoned wells
on their leases, and Steve Korf, District 3
supervisor for the Kansas Corporation
Commission, told EKOGA the agency
wanted to talk to the industry about how
to resolve the issue.
The so-called 2008 Quest decision
controlled state policy on plugging responsibility for abandoned wells-holding
that a lease operator was responsible only
for the wells on the property that it had
worked on-until January 2015, when the
Kansas Court of Appeals upheld the October 2013 ruling by the Shawnee County,
Ks., District Court in John M. Denman
Oil Co. v. State Corporation Commission,
Korf recalled.
According to court documents, Denman
Oil appealed a KCC order that it plug 41
abandoned oil wells, arguing state law
limited responsibility for plugging to one
party, and another company had taken
over the lease from Denman. The appeals
court upheld the KCC, stating the statute
allowed for several parties to share plugging responsibilities.
"I have found that as long as everyone
understands the rules of the game, you
can figure out how to work it," Korf
mused. "The Denman case has a bit of a
twist, but not much. If you buy a lease,
you are responsible for wells on that
lease. If there is a well that is underground
and there is no information on it, that
might be a well that industry may not be
responsible for."
The three Oil & Gas Conservation
Division commissioners are planning to
hold round-table discussions with oil and
gas representatives as well as other stakeholders, Korf advised EKOGA. As soon
as this discussion is over, the commission
will start the process of turning the court's

American Oil and Gas Reporter - October 2016

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