	Background

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) 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. Distribution . Sources of emissions include pad, road, and pipeline construction; drilling, completion, and flowback activities that occur during the development of a well; and gas processing and transmission equipment such as controllers, compressors, dehydrators, pipelines, 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. Pollutants also include nitrogen oxides, sulfur dioxide, particulate matter, and various forms of hazardous air toxics, including n-hexane, the BTEX compounds (i.e., benzene, toluene, ethylbenzene, and xylene), and hydrogen sulfide. While there may be significant emissions from the natural gas sector as a result of the combustion of other fossil fuels for process heat, power, and transportation, as well as the associated release of particulate matter from construction and road use, the primary focus of this report is on air quality issues related to the resource itself (i.e., the fugitive release of natural gas and its combustion during operations). Sources

Natural gas systems include many activities and pieces of equipment that have the potential to emit air pollutants. Drilling. Pollutants

Through provisions in the Clean Air Act (CAA), the U.S. Environmental Protection Agency (EPA) classifies air pollutants under several different categories, including the following:
Criteria Pollutants . Sulfur Dioxide (SO 2 ) . The Clean Air Act and the Federal Role in Air Quality Issues in Natural Gas Systems

The Clean Air Act (CAA) seeks to protect human health and the environment from emissions that pollute ambient, or outdoor, air. Some of the regulations implementing these sections have been revised by federal air standards promulgated by EPA on August 16, 2012. Section 112 of the CAA requires EPA to promulgate regulations establishing standards to control emissions of hazardous air pollutants (HAPs). On February 4, 2010, the U.S. Court of Appeals for the D.C. EPA's cost-benefit analysis, as put forth in its Regulatory Impact Analysis for the proposed air standards, has been critiqued as both too high and too low by industry and environmental stakeholders, respectively. Issues for Congressional Consideration

The expansion of both industry production and government regulation of natural gas systems has sparked discussion on a number of outstanding issues. The Regulatory Role of Federal, State, and Local Governments

According to EPA, the 2012 federal air standards are designed to provide minimum requirements for emissions of air pollutants from the crude oil and natural gas sector that can both protect human health and the environment and allow for continued growth in production. In total, these facilities accounted for GHG emissions of 225 MMtCO 2 e. Of note in the reporting: (1) The crude oil and natural gas sector is the second-largest stationary source of U.S. GHG emissions, behind power plants; (2) CO 2 emissions from the crude oil and natural gas sector account for 142 MMtCO 2 e, and methane emissions account for 83 MMtCO 2 e; (3) Onshore crude oil and natural gas production is the largest contributor, covering approximately 41% of reported emissions; (4) Emissions from onshore production facilities are primarily methane (such as leaks from equipment and vented emissions) while emissions from natural gas transmission and processing facilities are primarily CO 2 (such as combustion emissions associated with compressors); and (5) While the total emissions of CO 2 e reported by industry is consistent with the total emissions previously reported by EPA's national inventory, the ratio of CO 2 to methane emissions is notably different, with more CO 2 (and less methane) reported by the industry than estimated by EPA. Due to this unique linkage, pollution abatement has the potential to translate into economic benefits for the industry, as producers may be able to offset compliance costs with the value of natural gas and its byproducts recovered and sold at market. EPA estimates the 2012 air standards would yield a cost savings of $11 million to $19 million in 2015, as pollution abatement costs would be offset by the value of natural gas and condensate recovered and sold at market. Debate over the costs of compliance, covered sources and pollutants, and the proper regulatory institutions (i.e., local, state, or federal) continues.
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.