The EPA and the Department of Justice (DOJ) recently announced two settlements with energy operators located in Pennsylvania. XTO Energy Inc. (XTO) and Hilcorp Energy Company (Hilcorp) agreed to resolve alleged Clean Air Act (CAA) and Pennsylvania Air Pollution Control Act violations involving their oil and gas production operations in the state.
Under the settlement, XTO agreed to pay a $4 million civil penalty, and Hilcorp agreed to pay a $1.275 million civil penalty. The monetary penalties will be shared equally by the federal government and the commonwealth of Pennsylvania, which is a co-plaintiff in both cases. In addition to the civil penalties, both companies will undertake compliance measures to achieve major reductions in harmful emissions at their oil and gas production facilities in Butler County, Lawrence County, and Mercer County.
“Hilcorp and XTO Energy’s violations contributed to smog that reduces air quality, as well as methane releases that are a primary driver of near-term climate change,” said Assistant Administrator David M. Uhlmann for the EPA’s Office of Enforcement and Compliance Assurance. “These settlements are the latest in EPA’s urgent efforts to limit the greenhouse gas emissions that cause climate change and hold corporate polluters accountable for jeopardizing public health.”
Under the terms of XTO’s settlement, the company will be required to work with the Pennsylvania Department of Environmental Protection (PADEP) to identify the heaviest-polluting abandoned oil and gas wells in western Pennsylvania and spend at least $1.4 million to plug or remediate them.
“Orphan” wells are often significant sources of methane emissions.
“The work that XTO will do will result in the reduction of over 1,960 tons of carbon dioxide equivalent emissions per year released as methane, similar to the reductions achieved by taking 420 cars off the road for one year,” according to an EPA news release. “The settlement will also eliminate nearly 120 tons of volatile organic compound (VOC) emissions annually.
“The XTO settlement resolves allegations by the EPA and PADEP that XTO failed to comply with federal and state requirements to capture and control air emissions from 11 of its oil and gas production facilities in Butler County. The EPA identified the alleged violations through field investigations conducted in 2018 and 2019.”
The Hilcorp settlement also includes a requirement to undertake a project to mitigate harm attributable to the company’s alleged violations. Hilcorp will retrofit at least 164 pneumatic controllers that emit pollution with non-emitting process controllers at eight of its facilities located in Lawrence and Mercer counties at least 3 years earlier than required under law.
“EPA projects that the Hilcorp agreement will result in the reduction of over 160 tons of VOC emissions annually and 5,200 tons of carbon dioxide equivalent emissions per year released as methane,” the EPA’s release adds. “The reductions in methane from the settlement are similar to the reductions that would be achieved by taking 1,100 cars off the road for one year.”
The EPA and PADEP allege that Hilcorp failed to comply with federal and state requirements to capture and control air emissions from six of its oil and gas production facilities in Lawrence and Mercer counties.
Due to these alleged violations, “both XTO and Hilcorp released methane and VOCs directly into the air instead of capturing and controlling the gas using specially designed equipment,” the news release notes.
Specific CAA violations
XTO Energy
XTO’s alleged CAA violations include the following:
- Standards of performance for crude oil and natural gas facilities for which construction, modification, or reconstruction commenced after August 23, 2011, and on or before September 18, 2015, and standards of performance for crude oil and natural gas facilities for which construction, modification, or reconstruction commenced after September 18, 2015, and on or before September 6, 2022, which require VOC and methane emissions to be controlled from new, modified, and reconstructed sources in the oil and natural gas industry, including storage vessels involved in production and transmission; and
- Federally enforceable provisions of the Pennsylvania state implementation plan (SIP), which require sources to obtain approvals from the PADEP before the construction or modification of an air contamination source.
Hilcorp
The EPA alleges the company violated CAA regulations at six of its facilities in Lawrence and Mercer counties. Specifically, Hilcorp allegedly violated Pennsylvania’s SIP at five of the facilities by failing to comply with the specifications in permit applications and the terms and conditions of its permits that require routing all vapors, including VOCs and methane, to a control device from the storage tanks at each facility. The complaint also alleges that Hilcorp violated the SIP by failing to obtain a plan approval and operating permit at one additional facility.
“These violations resulted in unlawful emissions of VOCs [into] the atmosphere. VOCs are regulated under the CAA as precursors to the criteria pollutant ground-level ozone,” according to the EPA Hilcorp settlement webpage.
The consent decrees were filed with the U.S. District Court in the Western District of Pennsylvania and are each subject to a 30-day comment period. The complaint and the proposed consent decree are available on the DOJ’s Proposed Consent Decrees webpage.