The impacts of the 1990 amendments to the federal Clean Air Act on oil and gas exploration and production activity are now being experienced. Regulations developed by both state and federal regulatory agencies are having direct as well as indirect effects on the industry. Although the 1990 amendments granted the industry regulatory relief in several areas, regulatory agencies are developing and implementing new programs that will have significant impacts.

This paper will address the substance and impact on the oil and gas industry of federal environmental regulatory programs such as those involving hazardous air pollutants (including risk management), control of methane to prevent global warming, regulation of hydrogen sulfide, and exploration activities in the outer continental shelf. The paper will also discuss state regulation, using Texas as an example. State activity includes implementation of many of the federal programs in addition to state-initiated regulation of the industry. Among the Texas regulatory efforts that will be analyzed are odor regulation, licensing requirements, and control of nitrogen oxides and volatile organic compounds to minimize the formation of atmospheric ozone.

This paper alerts oil and gas operators to the potential for additional clean air requirements in the future including the establishment of maximum achievable control technology ("MACT") for the control of hazardous air pollutants.

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