American Oil and Gas Reporter - July 2016 - 103

of recovery, how the gas was recovered, and
other details during the flowback operation.
Entirely new to NSPS OOOOa are the
requirements for natural gas-driven pneumatic diaphragm pumps that are modified,
constructed or reconstructed after Sept. 18,
2015. These types of pumps located at well
sites or gas processing plants will have control requirements, along with monitoring,
record keeping, and reporting requirements.
Pneumatic diaphragm pumps located at
gas processing plants must have a natural
gas bleed rate of zero. Emissions from natural gas-driven diaphragm pumps located
at well sites must be reduced by 95 percent
with some alternative, depending on
whether the site is a green field.
In short, it appears EPA is driving new
well site (i.e., green field) design to control emissions from natural gas-driven
pneumatic diaphragm pumps, or to consider alternatives (i.e., electric or solar) in order to avoid becoming subject to these requirements.
EPA has provided more compliance alternatives for control at non-green-field sites
than are available to green-field sites.
P.E. Certification
Another new element found in NSPS
OOOOa is the requirement for certifica-

tion by a registered professional engineer
on closed-vent systems used to control
emissions from reciprocating compressors,
centrifugal wet seal compressors, pneumatic pumps, and storage tanks. EPA added
these requirements in an attempt to ensure
that closed-vent systems were designed so
as to capture and route all emissions to the
intended control device or process.
P.E. certification also will be required for
pneumatic pumps, if an operator determines
it is not feasible to route emissions to a control device or process at a non-green-field
site equipped with a new, modified, or reconstructed pneumatic pump.
The LDAR requirements found in NSPS
OOOOa will take many upstream operators-and some midstream operators-into
uncharted territory. The learning curve
will be steep for many. As such, it is never too early to begin the planning process.
The requirements under a LDAR program are record intensive. Therefore, upfront planning and thorough documentation can go a long way toward developing
a LDAR program that makes sense for a
particular operation, and can help ensure
adequate record keeping to demonstrate
compliance.
Those designing LDAR programs for
new well sites or compressor stations
must consider what closed-vent systems

may need to be installed and identify how
those systems can be P.E. certified. ❒

GEORGETTE
REEVES

Georgette Reeves is director of oil
and gas sector services for Trinity Consultants in Austin, Tx. She has been with
Trinity Consultants since 2007, previously serving as Gulf Region business development manager and prior to that as
a senior consultant in Trinity's Albuquerque, N.M., office. Reeves works with
oil and gas operators throughout the
Gulf Coast, Texas, New Mexico and Colorado on air quality regulatory issues.
She specializes in federal air quality regulations impacting the oil and gas industry throughout the Gulf and Rocky
Mountain regions. She has a master's in
public administration from the University of New Mexico.

Issues Update

IOGAWV Tackles Uneconomic Wells
By Danny Boyd
Special Correspondent
CHARLESTON, W.V.-With conventional operators often losing money on
their natural gas sales, the Independent Oil
and Gas Association of West Virginia is
working with the West Virginia Tax Department on well valuation alternatives for
the state legislature to consider in 2017.
IOGAWV members prepared for their
summer meeting, scheduled for Aug. 7-9
at The Greenbrier Resort in White Sulpher
Springs, W.V., as they monitored lawmakers in a special session in mid-June that was
called to cover a $270 million budget deficit
without overly depleting the state's Rainy
Day Fund (RDF), explains IOGAWV Executive Director Charlie Burd.
Budget deliberations during the regular session overshadowed attempts by
several IOGAWV members to gain approval for pooling of Marcellus Shale wells
and association efforts to support measures
that would adjust the 2011 Horizontal Well
Act and the Aboveground Storage Tank
Act of 2014, Burd says.

Property Tax Reform
With those issues still on the table for
the 2017 regular session that begins in January, IOGAWV also hopes to gain enough
support to convince lawmakers to accept
potential solutions to calculating property tax liabilities, Burd says.
"Going forward for the 2017 session,
we certainly are going to pursue relief by
looking at how wells are valued," he
states. "When natural gas prices leave operators with wells that literally generate no
revenue-because operating expenses exceed any production revenue-those wells
certainly yield no monetary value for
their owners. Property tax calculation
formulas in West Virginia do not consider the possibility that expenses could
surpass revenue."
Association members are among the
Appalachian Basin operators losing about
$1 for every Mcf of natural gas their wells
produce, Burd says. The property tax
calculations were not designed to account for such weak natural gas prices,
adds IOGAWV Vice President Scott

Freshwater.
"There really is not a sufficient allowance for operating expenses right
now," assesses Freshwater, vice president of Reserve Oil & Gas in Spencer,
W.V. "There are wells producing at a negative (net) so how is there value in that
loss? We are trying to get greater allowances for operating costs."
The tax calculation method is one of
several avenues by which IOGAWV is
striving to reduce economic hardships on
operators saddled with low prices, contractual obligations and state mandates that
force them to produce in the face of a loss,
he points out.
"For producers across the country, gas
gathering and processing costs are a major issue," Freshwater says. "Those costs
are so out of balance with the natural gas
price and are consuming a large portion of
a well's income. That is something we plan
to negotiate very aggressively during the
next 12-18 months. There will be a lot of
negotiations on midstream gathering
agreements."
JULY 2016 103

American Oil and Gas Reporter - July 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - July 2016