Hess Corporation was sued by the U.S. and New Jersey governments over air emissions at its petroleum
refinery in Port Reading, New Jersey, and is expected to settle
the case today,
a Justice Department spokesman said.

Bloomberg reported this afternoon that Hess violated federal and state laws in making a “major
modification” to the refinery that resulted in a “significant
net emissions increase” of nitrous oxide, sulfur dioxide,
carbon monoxide and particulates, according to the complaint
filed yesterday in federal court in Newak, NJ.

A settlement is expected to be filed today, said Justice
Department spokesman Wyn Hornbuckle. Jon Pepper, a Hess
spokesman, didn’t immediately return a call seeking comment on
the lawsuit, according to Bloomberg.

The news service reported that:

“The refinery, which has a crude oil capacity of 65,000
barrels a day, was cited for violations at a fluid catalytic
cracking unit catalyst regenerator, a sulfur recovery plant, and
at flaring devices and heaters and boilers, according to the
complaint. New York-based Hess failed to operate those
facilities in a “manner consistent with good air pollution
control practice” and also failed to comply with benzene waste
requirements, government officials said in the complaint.”

The complaint, by the U.S. Justice Department’s
environmental and natural resources division and New Jersey
Attorney General Jeffrey S. Chiesa, seeks civil penalties of as
much as $37,500 a day for the various violations.”

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**Updated at 4:50 p.m.**

The Obama administration yesterday set the first-ever national
standards to control air pollution from gas wells that are drilled using
a method called hydraulic fracturing, or fracking, but not without
making concessions to the oil and gas industry, the Associated Press reported.

President Barack Obama in his State of the Union address strongly backed natural gas drilling as a clean energy source, and recently announced an executive order calling for coordination of federal regulation to ease burdens on producers. But he has come under criticism by the industry and Republicans for policies they say discourage energy development.

Top EPA officials said yesterday that the new regulations would ensure pollution is controlled without slowing natural gas production.

“By ensuring the capture of gases that were previously released to pollute our air and threaten our climate, these updated standards will protect our health, but also lead to more product for fuel suppliers to bring to market,” said EPA Administrator Lisa Jackson in a statement.

Much of the air pollution from fracked gas wells is vented when the well transitions from drilling to actual production, a three- to 10-day process which is referred to as “completion.” An earlier version of the rule limiting air pollution from gas wells would have required companies to install pollution-reducing equipment immediately after the rule was finalized.

Drillers now will be given more than two years to employ technology to reduce emissions of smog- and soot-forming pollutants during that stage. The Environmental Protection Agency will require drillers to burn off gas in the meantime, an alternative that can release smog-forming nitrogen oxides, but will still slash overall emissions.

Industry groups had pushed hard for the delay, saying the equipment to reduce pollution at the wellhead during completion was not readily available. About 25,000 wells a year are being fracked, a process where water, chemicals and sand are injected at high pressure underground to release trapped natural gas.

Besides the new standards for oil and gas wells, the EPA also on Wednesday updated existing rules for natural gas processing plants, storage tanks and transmission lines that will reduce amounts of cancer-causing air pollution, such as benzene, and also reduce methane — the main ingredient in natural gas, but also one of the most potent global warming gases.

There were other changes made since the EPA proposed the rule last July under a court order that stemmed from a lawsuit brought by environmental groups.

Wells drilled in low-pressure areas, such as coal-bed methane reserves, would be exempt because they release less pollution during completion. And companies that choose to re-fracture wells using the pollution-reducing equipment prior to the January 2015 deadline would not be covered by other parts of the regulation.

Since companies could capture the natural gas and sell it, the EPA estimates that they would save about $11-$19 million a year starting in 2015.

The American Petroleum Institute, the main lobbying group for the oil and gas industry, said that much of the industry was already doing that.

“We don’t need (the EPA) to come and tell our members we will save you money,” said Howard Feldman, the institute’s director of regulatory and scientific affairs. “Their business is natural gas. They get it that they are trying to capture as much gas as they can.”

The reaction from environmental groups was mixed on Wednesday, in large part to the two-year delay on requiring companies to perform so-called green completions.

In Pennsylvania, the gas industry’s Marcellus Shale Coalition President Kathryn Klaber called the regulations “mostly workable.”

“Our industry continues to leverage many recent technological
advancements on an increasingly broader scale in an effort to further
heighten and protect environmental quality,” Klaber said in a statement.

In a statement released Wednesday night, Pennsylvania DEP Secretary Mike
Krancer said: “DEP is currently reviewing EPA’s final rule concerning
emissions related to natural gas exploration and development.”

He said DEP is in the midst of a public comment period on proposed revisions to the state’s natural gas operations regulations.

“We
look forward to analyzing the comments we receive along with the EPA’s
rule and finalizing our general permit that will allow for the continued
responsible development of natural gas,” Krancer said.

Allegheny County Health
Department’s air program manager Jim Thompson said the rules could help people living near well sites by cutting their
exposure to volatile organic compounds, which can cause cancer or
aggravate asthma.

The region’s bigger problem is ozone, which the EPA did little to
address, he said. Regulators should enforce similar rules, requiring the
use of technology to cut ozone-causing pollutants from other gas
industry sites, especially compressor stations, Thompson said.