This paper describes the components of DOE's Regulatory E&P Air Model (DREAM) and its use in preparing comments on EPA's 1998 E&P Maximum Achievable Control Technology proposed regulation. DREAM, developed by ICF Resources Incorporated, uses detailed oil and gas well-level data to construct bottom-up estimates of both the costs and benefits of regulations related to air emissions from E&P operations. DREAM consists of a Cost Module and a Benefits Module. In addition to these two components of DREAM, the Cost Module was designed to provide inputs for two of DOE's reservoir-level oil and gas supply models (i.e., the Gas Supply Analysis Model [GSAM] and the Crude Oil Policy Model [COPM]). These models allow DOE to estimate the impacts of increased compliance costs on oil and gas production, well abandonment rates, and the size of economic reserves.

DREAM considers not only the costs of new regulations, but also the human health benefits of reduced emissions. To do this, a simplified air dispersion and risk algorithm is run for each producing field. The resulting individual cancer risks (based on benzene exposure) are superimposed on the population densities surrounding each oil or gas field. This provides a total number of cancers and deaths that would be expected each year. By applying various economic estimates of the "value of life" and the "value of health" to the resulting estimates, health benefits can be directly compared with compliance costs using the common metric of dollars. The most important innovation of this model is that it allows the user to identify the break-even point where social costs (i.e., compliance costs, lost oil production, lost employment) are offset by social benefits (i.e., reduction in the number of cancer illnesses and deaths). Results of two model runs are presented in the paper.

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