United States Announces Clean Air Act Settlement With Two Oil and Gas Companies In Illinois

United States Announces Clean Air Act Settlement With Two Oil and Gas Companies In Illinois

The United States government and the state of Illinois today reached a Clean Air Act (CAA) settlement with oil producers Rex Energy Operating Corp. and PennTex Resources Illinois, Inc. which will result in reduced emissions from the companies’ facilities in Illinois. The settlement is the result of an exposure investigation which was initiated in response to citizen complaints, and requires the two companies to implement preventative measures and controls that will reduce harmful hydrogen sulfide emissions at their facilities.

Beginning in June 2006, the EPA and the Agency for Toxic Substances and Disease Registry monitored hydrogen sulfide concentrations at five residences, an elementary school, and two parks in Bridgeport and Petrolia, Ill. The monitoring data indicated that hydrogen sulfide concentrations posed a risk to public health. Hydrogen sulfide is a colorless gas that is malodorous at very low concentrations, deadly at very high concentrations, and can cause detrimental health effects at intermediate concentrations.

In a complaint filed at the same time as the consent decree, the U.S. alleged that the companies were required to take action at their oil production facilities because air pollution sources were causing or contributing to hydrogen sulfide emissions that were presenting an imminent and substantial endangerment to public health or welfare or the environment under the Emergency powers section of the CAA.

“The emissions reductions achieved through today’s settlement are evidence of the continued progress we are achieving with industry, through the cooperative enforcement efforts of federal and state governments,” said Matthew J. McKeown, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

“I am pleased that the companies stepped up to begin addressing this problem that had plagued the community for far too long,” said Mary Gade, Regional Administrator for U.S. EPA Region 5. “The hydrogen sulfide emissions were of great concern to me because the people who live and work in the area deserve to be able to breathe clean air.”

Rex Energy Operating Corp., headquartered in State College, Pa., operates numerous affiliated oil and gas companies including PennTex Resources Illinois, Inc., in Bridgeport and Petrolia. PennTex owns and operates four fields in southern Illinois and Indiana, covering about 20,000 acres. The largest field is located in Lawrence County, Ill., and contains 1,300 oil production wells, some of which are located on or near residential properties.

The crude oil and brine water mixture from the Lawrence County well-field contains high concentrations of dissolved and associated gases, including hydrogen sulfide. At a typical production well, crude oil and brine water are pumped to the surface through pipes to a receiver tank located at “gathering facilities” or tank farms. There, the crude and brine water separate. The crude oil then flows by gravity into a stock tank where it is off loaded by the crude oil purchasers’ tank trucks. The brine water flows into a different tank and eventually is injected back into a well to force out more oil and water in the production wells. During this process, hydrogen sulfide escapes from the oil and water and is released to the air.

Once fully implemented, Rex Energy and PennTex will reduce their emissions of the harmful air pollutants by installing flares to incinerate the hydrogen sulfide, to install better controls at the gathering facilities, and to take other steps to minimize hydrogen sulfide emissions from eight of their facilities.

The consent decree was lodged in U.S. District Court for the Southern District of Illinois. The consent decree will be subject to a 30-day public comment period and subsequent judicial approval, and is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.

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