EPA’s Energy Extraction Regulatory and Enforcement Initiative: The Storm is Here Colin G. Harris, Faegre Baker Daniels, Boulder, CO

UNCONVENTIONAL OIL AND GAS PLAYS

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UPSTREAM

►  Source: Michael W. Conder and April D. Schroer, Production Facility Design (2015)

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MIDSTREAM

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DRIVERS OF INCREASED REGULATION: MORE PRODUCTION

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DRIVERS OF INCREASED REGULATION: MORE PRODUCTION

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DRIVERS OF INCREASED REGULATION: “FRACKING” ► 2-3 Day Fracking Process Source: EPA

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DRIVERS OF INCREASED REGULATION: MULTI-WELL PADS

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DRIVERS OF INCREASED REGULATION: OZONE AND METHANE

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DRIVERS OF INCREASED REGULATION: LOCATION OF OIL AND GAS DEVELOPMENT

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DRIVERS OF REGULATION: LOCATION OF OIL AND GAS DEVELOPMENT

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DRIVERS OF REGULATION: LOCATION OF OIL AND GAS DEVELOPMENT

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DRIVERS OF REGULATION: LOCATION OF OIL AND GAS DEVELOPMENT

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DRIVERS OF REGULATION: LOCATION OF OIL AND GAS DEVELOPMENT

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DRIVERS OF REGULATION: LOCATION OF OIL AND GAS DEVELOPMENT

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DRIVERS OF REGULATION: STONE AGE THINKING (“COMMAND AND CONTROL”)

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“QUAD O”

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► CAA section 111 " Emission standards for new and modified facilities

(“NSPS”) in production and transmission " 40 CFR Part 60, Subpart OOOO - - OOOOa

► Quad O (2012) " “VOCs”

► Quad Oa (2016) " VOCs/Methane

QUAD O/Oa: WELL COMPLETION

► Flowback " fracturing fluids, water, and reservoir gas or oil (or

both) surface at a high velocity and volume " Mixture may contain a high volume of VOCs and

methane " Must limit by either

► Performing a “green completion” ► Or sending to a control device (combustion

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QUAD O/Oa: WELL PRODUCTION

►  Source: Magnetrol

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QUAD O/Oa: “FLARING”

►  Source: University of North Dakota Energy & Environmental Research Center

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QUAD O/Oa: WELL PRODUCTION

►  Source: Texas DEQ

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QUAD O/Oa: WELL PRODUCTION

►  Source: Texas Environmental Research Consortium

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QUAD O/Oa: WELL PRODUCTION

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QUAD O/Oa: STORAGE VESSELS

► Applicability: 6 tons per year " Could be as low as 20 barrels of oil produced/1 mcf emission " tanks connected in parallel considered single tank? " Valid state permit can limit VOCs to less than 6 tons per year

► Reduce VOC emissions by 95% ► Performance testing of control devices

" Pre-certification " Field test

► Tank and vapor control system design and certification " Caution: EPA believes operators have not properly designed their

tank piping systems and air emission control devices to handle “peak flows” from separators

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QUAD O/Oa: STORAGE VESSELS

►  Source: Emerson Process Management

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QUAD O/Oa: STORAGE VESSELS

► Photoionization Detector

► Infrared Imaging Camera " Can “see” methane leaks and volatile organic compounds " Displays real-time visual image " Does not quantify or speciate

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QUAD O/Oa: LDAR

► 

►  Texas Commission on Environmental Quality

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QUAD O/Oa: LDAR

► Prevent fugitive emissions " fugitive emission = visible using OGI or a reading of 500

ppm or greater using EPA’s Method 21 ► Prohibits fugitive emissions from cover of a tank (e.g.,

access hatches, sampling ports, pressure relief valves) ► Use optical gas imaging or Method 21 to conduct a leak

survey ► Repair leaks within 30 days ► Strategies

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ENFORCEMENT: NOBLE ENERGY CONSENT DECREE

► EPA/State alleged that vapor control systems at well pads were undersized

► Relied on State law " Colorado’s SIP: “all air pollution equipment shall be adequately designed and

sized…to handle reasonably foreseeable fluctuations in emissions of [VOC’s]. Fluctuations in emissions that occur when the separator dumps into the tank are reasonably foreseeable.”

► Regulation through enforcement " Basin wide settlement " Applies to existing facilities

► “Next Generation” monitoring/reporting concepts applied ► “Quad O on steroids”

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ENFORCEMENT: NOBLE ENERGY CONSENT DECREE

► Sample Develop Model Perform Design Evaluation VCS Modifications Verification

►  Source: Michael W. Conder and April D. Schroer, Production Facility Design (2015) 30

ENFORCEMENT: NOBLE ENERGY CONSENT DECREE

► Multiple avenues to trigger well shut-ins ► EPA estimates $73 million total value of settlement " ≈ $13 million in in civil penalties/SEP’s/mitigation

project funding " EPA estimated ≈ $60 million in equipment

upgrades/changes ► IR camera inspection triggers ► Elaborate reporting including to public via website ► Impacts asset sales/restructuring

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ENFORCEMENT: NOBLE ENERGY CONSENT DECREE

► Read the consent decree ► Read the End of Phase Reports This is the template EPA wants for you!

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ENFORCEMENT: COMPLIANCE ALERT

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ENFORCEMENT: CAA INFORMATION REQUESTS

► CAA §114 requests to numerous operators in Region 8 and 6

► Declare whether design analyses of VCS completed and provide to EPA

► Perform design analysis to verify VCS has capacity to handle peak emissions

►  Provide detailed information so EPA can perform independent design analysis

► CAA §114 response strategies

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North Dakota and EPA: Breakdown in Cooperative Federalism Over the Energy Extraction Initiative

► What is Cooperative Federalism? ► Lessons

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Questions?

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