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EPA reaches agreement with Merit Energy and Shell on clean-air violations

Release Date: 10/01/2008
Contact Information: William Omohundro, 312-353-8254, omohundro.william@epa.gov

CONTACT: William Omohundro, 312-353-8254, omohundro.william@epa.gov


FOR IMMEDIATE RELEASE
No. 08-OPA152

CHICAGO (Oct. 1, 2008) - U.S. Environmental Protection Agency today announced an agreement with Merit Energy Co. LLC and Shell Exploration & Production Co. on alleged Clean Air Act violations at a natural gas processing facility in Manistee, Mich. Merit is the present owner and Shell is the former owner of the plant.

The agreement resolves federal allegations that the companies continued to operate the Manistee facility after Shell made modifications that allowed processing of larger volumes of natural gas without installing required controls to reduce sulfur dioxide emissions. The companies are also alleged to have violated their state operating permit and state regulations.

Merit expects to achieve compliance by injecting acid gas (a mixture of hydrogen sulfide and carbon dioxide) into the ground in depleted natural gas fields, resulting in zero sulfur dioxide emissions at a cost of more than $1 million. At current production levels, this will reduce sulfur dioxide emissions by 170 tons per year and carbon dioxide emissions by nearly 3,800 tons per year. Merit and Shell will also pay a $500,000 penalty, and Merit will perform an environmental project valued at $1 million.

For its environmental project, Merit will replace three natural gas compressor engines with electric compressor drives at three of its other facilities in Michigan. The project is expected to reduce nitrogen oxide emissions by 179 tons per year as well as emissions of several other pollutants by smaller amounts.

"Controls required by this agreement will cut sulfur dioxide emissions from the facility to zero and make a significant contribution to cleaner air for the Manistee area," said Cheryl Newton, acting director of the EPA Region 5 Air and Radiation Division. "In addition, the environmental project will reduce smog-forming nitrogen oxide emissions in other parts of Michigan."

This is the first Clean Air Act enforcement case that specifies the use of an acid gas injection system, which achieves 100 percent emission control, better than standard end-of-pipe controls. The technology has been used before in other natural gas processing plants but has never been required in an enforcement action.

Exposure to sulfur dioxide can impair breathing, aggravate existing respiratory diseases like bronchitis and reduce the ability of the lungs to clear foreign particles. Sulfur dioxide can cause acid rain and contribute to fine particle pollution. Children, the elderly and people with heart and lung conditions are the most sensitive to sulfur dioxide.

Nitrogen oxides contribute to the formation of ground-level ozone, or smog. Smog is formed when a mixture of air pollutants is baked in the hot summer sun. Smog can cause a variety of respiratory problems, including coughing and wheezing, shortness of breath and chest pain. People with asthma, children and the elderly are especially at risk, but these concerns are important to everyone.

The proposed consent decree was lodged by the U.S. Department of Justice on behalf of EPA with the U.S. District Court for the Western District of Michigan, and will be subject to a 30-day public comment period. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/open.html.

For more information on EPA's air enforcement program, visit http://www.epa.gov/compliance/civil/caa/caaenfprog.html.


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