Air Quality Issues in Natural Gas Systems

Richard K. Lattanzio
Analyst in Environmental Policy

Natural Gas Systems and Air Pollution 

Congressional interest in U.S. energy policy has focused in part on ways through which the United States could secure more economical and reliable fossil fuel resources both domestically and internationally. Recent expansion in natural gas production, primarily as a result of new or improved technologies (e.g., hydraulic fracturing, directional drilling) used on unconventional resources (e.g., shale, tight sands, and coal-bed methane), has made natural gas an increasingly significant component in the U.S. energy supply. This expansion, however, has prompted renewed questions about the potential impacts of natural gas systems on human health and the environment, including impacts on air quality. Unlike the debate over groundwater contamination or induced seismicity—where questions exist as to whether or not production activities contribute significantly to these impacts—there is little question that natural gas systems emit air pollutants. The concerns, instead, are the following:

• Which pollutants? 
• How much of each pollutant? 
• From which sources? 
• What are the impacts of the emissions? 
• How much is the cost of abatement? 
• What are the respective roles of federal, state, and local governments? 

Air pollutants are released by natural gas systems through the leaking, venting, and combustion of natural gas; the combustion of other fossil fuel resources; and the discharge of particulate matter during associated operations. Emission sources include pad, road, and pipeline construction; well drilling, completion, and flowback activities; and gas processing and transmission equipment such as controllers, compressors, dehydrators, pipes, and storage vessels. Pollutants include, most prominently, methane and volatile organic compounds—of which the natural gas industry is one of the highest-emitting industrial sectors in the United States—as well as nitrogen oxides, sulfur dioxide, particulate matter, and various forms of hazardous air pollutants. 

EPA’s 2012 Air Standards 

The U.S. Environmental Protection Agency (EPA), in response to a consent decree issued by the U.S. Court of Appeals, D.C. Circuit, promulgated air standards for several source categories in the crude oil and natural gas sector on August 16, 2012. These standards—effective October 15, 2012—revised existing rules and promulgated new ones to regulate emissions of volatile organic compounds (VOCs), sulfur dioxide, and hazardous air pollutants (HAPs) from many production and processing activities that had never before been covered by federal oversight. The standards control air pollution, in part, through the capture of fugitive releases of natural gas. Thus, compliance with the standards has the potential to translate into economic benefits, as producers may be able to offset abatement costs with the value of product recovered and sold. Using this assumption, EPA estimated the annual benefits of the standards to be VOC reductions of 190,000 tons, HAP reductions of 12,000 tons, methane reductions of 1.0 million tons, and a net cost savings of $11 million to $19 million after the sale of recovered product. Industry and other
stakeholders have disputed these figures as both too high and too low. Moreover, the expansion of both industry production and government regulation of natural gas has sparked discussion on a number of outstanding issues, including the following:

• defining the roles of local, state, and federal governments, 
• determining the proper coverage of pollutants and sources, 
• establishing comprehensive emissions data, 
• understanding the human health and environmental impacts of emissions, and 
• estimating the costs of pollution abatement. 

Scope and Purpose of This Report 

The report begins by briefly outlining the production, processing, transmission, and distribution phases of the natural gas industry, then characterizes the types and sources of pollutants in the sector. It then turns to the role of the federal government in regulating these emissions, including the provisions in the Clean Air Act and the regulatory activities of the EPA. It concludes with an extended discussion of the aforementioned outstanding issues. For an abbreviated version of this report, see CRS Report R42986, Air Quality Issues in Natural Gas Systems: In Brief.

Date of Report: March 4, 2013
Number of Pages: 77
Order Number: R42833
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Air Quality Issues in Natural Gas Systems: In Brief

Richard K. Lattanzio
Analyst in Environmental Policy

Natural Gas Systems and Air Pollution 

Congressional interest in U.S. energy policy has focused in part on ways through which the United States could secure more economical and reliable fossil fuel resources both domestically and internationally. Recent expansion in natural gas production, primarily as a result of new or improved technologies (e.g., hydraulic fracturing, directional drilling) used on unconventional resources (e.g., shale, tight sands, and coal-bed methane), has made natural gas an increasingly significant component in the U.S. energy supply. This expansion, however, has prompted renewed questions about the potential impacts of natural gas systems on human health and the environment, including impacts on air quality. Unlike the debate over groundwater contamination or induced seismicity—where questions exist as to whether or not production activities contribute significantly to these impacts—there is little question that natural gas systems emit air pollutants. The concerns, instead, are the following:

• Which pollutants? 
• How much of each pollutant? 
• From which sources? 
• What are the impacts of the emissions? 
• How much is the cost of abatement? 
• What are the respective roles of federal, state, and local governments? 

Air pollutants are released by natural gas systems through the leaking, venting, and combustion of natural gas; the combustion of other fossil fuel resources; and the discharge of particulate matter during associated operations. Emission sources include pad, road, and pipeline construction; well drilling, completion, and flowback activities; and gas processing and transmission equipment such as controllers, compressors, dehydrators, pipes, and storage vessels. Pollutants include, most prominently, methane and volatile organic compounds—of which the natural gas industry is one of the highest-emitting industrial sectors in the United States—as well as nitrogen oxides, sulfur dioxide, particulate matter, and various forms of hazardous air pollutants. 

EPA’s 2012 Air Standards 

The U.S. Environmental Protection Agency (EPA), in response to a consent decree issued by the U.S. Court of Appeals, D.C. Circuit, promulgated air standards for several source categories in the crude oil and natural gas sector on August 16, 2012. These standards—effective October 15, 2012—revised existing rules and promulgated new ones to regulate emissions of volatile organic compounds (VOCs), sulfur dioxide, and hazardous air pollutants (HAPs) from many production and processing activities that had never before been covered by federal oversight. The standards control air pollution, in part, through the capture of fugitive releases of natural gas. Thus, compliance with the standards has the potential to translate into economic benefits, as producers may be able to offset abatement costs with the value of product recovered and sold. Using this assumption, EPA estimated the annual benefits of the standards to be VOC reductions of 190,000 tons, HAP reductions of 12,000 tons, methane reductions of 1.0 million tons, and a net cost savings of $11 million to $19 million after the sale of recovered product. Industry and other stakeholders have disputed these figures as both too high and too low. Moreover, the expansion of both industry production and government regulation of natural gas has sparked discussion on a number of outstanding issues, including the following:

• defining the roles of local, state, and federal governments, 
• determining the proper coverage of pollutants and sources, 
• establishing comprehensive emissions data, 
• understanding the human health and environmental impacts of emissions, and 
• estimating the costs of pollution abatement. 

Scope and Purpose of This Report 

This report serves as a brief summary of the information provided in CRS Report R42833, Air Quality Issues in Natural Gas Systems. The report is structured similarly, providing information on the natural gas industry and the types and sources of air pollutants in the sector. It then examines the role of the federal government in regulating these emissions, including the provisions in the Clean Air Act (CAA) and the regulatory activities of EPA. It concludes with a brief discussion of the aforementioned outstanding issues. For more detail, reference information, and further citations, refer to CRS Report R42833.

Date of Report: March 4, 2013
Number of Pages: 21
Order Number: R42986
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Oil Sands and the Keystone XL Pipeline: Background and Selected Environmental Issues

Jonathan L. Ramseur, Coordinator
Specialist in Environmental Policy

Richard K. Lattanzio
Analyst in Environmental Policy

Linda Luther
Analyst in Environmental Policy

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Nicole T. Carter
Specialist in Natural Resources Policy

If constructed, the Keystone XL pipeline would transport crude oil (e.g., synthetic crude oil or diluted bitumen) derived from oil sands in Alberta, Canada to destinations in the United States. Because the pipeline crosses an international border, it requires a Presidential Permit that is issued by the Department of State (DOS). The permit decision rests on a “national interest” determination, a term not defined in the authorizing Executive Orders. DOS states that it has “significant discretion” in the factors it examines in this determination.

Key events related to the Presidential Permit include

• September 19, 2008: TransCanada submitted an application for a Presidential Permit for its Keystone XL pipeline. 
• November 10, 2011: DOS announced it needed additional information concerning alternative pipeline routes through the Nebraska Sandhills. 
• January 18, 2012: In response to a legislative mandate in P.L. 112-78, DOS, with the President’s consent, announced its denial of the Keystone XL permit. 
• May 4, 2012: TransCanada submitted a revised permit application to DOS. 
• January 22, 2013: Nebraska Governor approved TransCanada’s new route through Nebraska. 

Although some groups have opposed previous oil pipeline permits, opposition to the Keystone XL proposal has generated substantially more interest among environmental stakeholders. Pipeline opponents are not a monolithic group: some raise concerns about potential local impacts, such as oil spills or extraction impacts in Canada; some argue the pipeline would have national energy and climate change policy implications.

A number of key studies indicate that oil sands crude has a higher greenhouse gas (GHG) emissions intensity than many other forms of crude oil. The primary reason for the higher intensity: oil sands are heavy oils with a high viscosity, requiring more energy- and resourceintensive activities to extract. However, analytical results vary due to different modeling assumptions. Moreover, industry stakeholders point out that many analyses indicate that GHG emissions from oil sands crude oil are comparable to other heavy crudes, some of which are produced and/or consumed in the United States.

Because of oil sands’ increased emissions intensity, further oil sands development runs counter to some stakeholders’ energy and climate change policy objectives. These objectives may vary based on differing views concerning the severity of climate change risk and/or the need for significant mitigation efforts. Opponents worry that oil sands crude oil will account for a greater percentage of U.S. oil consumption over time, making GHG emissions reduction more difficult. On the other hand, neither issuance of a Presidential Permit nor increased oil sands development would preclude the implementation of energy/climate policies that would support less carbon intensive fuels or energy efficiency improvements.

A primary local/regional environmental concern of any oil pipeline is the risk of a spill. Environmental groups have argued that both the pipeline’s operating parameters and the material being transported imposes an increased risk of spill. Industry stakeholders have been critical of these assertions. To examine the concerns, Congress included provisions in P.L. 112-90 requiring a review of current oil pipeline regulations and a risk analysis of oil sands crude.

Opponents of the Keystone XL pipeline and oil sands development often highlight the environmental impacts that pertain to the region in which the oil sands resources are extracted. Potential impacts include, among others, land disturbance and water resource issues. In general, these local/regional impacts from Canadian oil sands development may not directly affect public health or the environment in the United States. Within the context of a Presidential Permit, the mechanism to consider local Canadian impacts is unclear.

Date of Report: February 21, 2013
Number of Pages: 56
Order Number: R42611
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EPA Regulation of Greenhouse Gases: Congressional Responses and Options

James E. McCarthy
Specialist in Environmental Policy

As a direct result of the Environmental Protection Agency’s promulgation of an “endangerment finding” for greenhouse gas (GHG) emissions in December 2009, and its subsequent promulgation of GHG emission standards for new motor vehicles in 2010, the agency has proceeded to control GHG emissions from new and modified stationary sources as well. Stationary sources, including power plants, refineries, manufacturing facilities, and others account for 69% of U.S. emissions of greenhouse gases. If the United States is to reduce its total GHG emissions, as President Obama has committed to do, it will be necessary to reduce emissions from these sources.

EPA’s regulations limiting GHG emissions from new cars and light trucks automatically triggered two Clean Air Act (CAA) provisions affecting stationary sources of air pollution. First, since January 2, 2011, new or modified major stationary sources must undergo New Source Review (NSR) with respect to their GHGs in addition to any other pollutants subject to regulation under the CAA that are emitted by the source. This review requires affected sources to install Best Available Control Technology (BACT) to address their GHG emissions. Second, major sources of GHGs (existing and new) must now obtain permits under Title V of the CAA (or have existing permits modified to include their GHG requirements).

Beyond these permitting requirements, EPA has begun the process of establishing emission standards for large stationary sources of GHG emissions under the act. In December 2010, EPA reached settlement agreements under which it was required to promulgate final decisions on New Source Performance Standards (NSPS) for electric generating units (EGUs) by May 2012 and for petroleum refineries by November 2012. These deadlines have not been met.

EPA shares congressional concerns about the potential scope of these regulations, primarily because a literal reading of the act would have required as many as 6 million stationary sources to obtain permits. To avoid this result, on May 13, 2010, the agency finalized a “Tailoring Rule” that focuses its resources on the largest emitters while deciding over a six-year period what to do about smaller sources.

Many in Congress have suggested that EPA should delay taking action on any stationary sources or should be prevented from doing so. There were at least 10 bills introduced in the 112th Congress that would have delayed or prevented EPA actions on greenhouse gas emissions. In February 2011, the text of one bill, H.R. 153, was added to the Full-Year Continuing Appropriations Act (H.R. 1) during floor debate, on a 249-177 vote. H.R. 1 passed the House, February 19, but failed in the Senate, March 9, 2011. On April 7, 2011, the House passed Representative Upton’s H.R. 910, which would have repealed EPA’s endangerment finding, redefined “air pollutants” to exclude greenhouse gases, and prohibited EPA from promulgating any regulation to address climate change. In the Senate, similar legislation failed to pass, April 6. Since then, EPA has taken no final action on stationary source GHG standards, but final action on EGU standards is expected in 2013. With that, congressional interest may be renewed.

This report discusses elements of this controversy, providing background on stationary sources of GHG pollution and identifying options Congress has at its disposal to address the issues, including (1) resolutions of disapproval under the Congressional Review Act; (2) freestanding legislation; (3) the use of appropriations bills as a vehicle to influence EPA activity; and (4) amendments to the Clean Air Act, including legislation to establish a new GHG control regime.


Date of Report: February 19, 2013
Number of Pages: 18
Order Number: R41212
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