1. 1 Addressing Air Quality Impacts from Oil and Gas Development in Colorado WESTAR Conference October 23, 2008 Rose Waldman Colorado Air Pollution Control Division

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3. 3 Current Rule Requirements Condensate Tanks (VOCs) Ozone Control Area (OCA) –System-wide control by company at 75% (from 5/1 to 9/30); at 70% (rest of year) –Control device at 95% –Control not required at tank/batteries with ≤ 730 bbls/yr (~ 5 tpy) –Exemption for companies with total operations of < 30 tpy (uncontrolled) Statewide –Control at 95% required at tank/batteries with ≥ 20 tpy (uncontrolled)

4. 4 Current Rule Requirements (cont.) Gas Processing Plants in OCA (VOCs) –LDAR, NSPS Subpart KKK applies regardless of construction date –Condensate tanks must be controlled at 95% if not stabilized and if ≥ 1 tpy (uncontrolled) Glycol Dehydrators in OCA & Statewide (VOCs) –Control vents at 90% ≥ 15 tpy (uncontrolled)

5. 5 Current Rule Requirements (cont.) RICE Statewide (NOx, CO, & VOCs) Maximum Engine HP Construction or Relocation Date Emission Standards (G/hp-hr) NOxCOVOC 100<HP<5001/1/08 1/1/11 2.0 1.0 4.0 2.0 1.0 0.7 500<HP7/1/07 7/1/10 2.0 1.0 4.0 2.0 1.0 0.7

6. 6 Ozone Non-Attainment Status Denver Metro North Front Range 9-county area became non-attainment on 11/20/07 APEN threshold reduced from 2 tpy to 1 tpy Permit threshold reduced from 5 tpy to 2 tpy (VOCs), 10 tpy to 5 tpy (NOx) SIP Development Proposing new rules/regulations Possible implementation date 2/1/09

7. 7 Proposed Rule Changes Condensate Tanks (NAA) Move from system-wide to threshold approach New/modified tanks ≥ 2 tpy at 95% by 2/1/09 Existing tanks ≥ 10 tpy at 95% by 5/1/10 Existing tanks ≥ 5 tpy at 95% by 5/1/2011 Existing tanks ≥ 2 tpy at 95% by 5/1/2012 Control all tanks at 95% 1 st 90 days (new/modified) Auto-ignitor and electronic surveillance at controlled locations (new, modified, existing) Removing 30 tpy exemption Increase ozone season control from 75% to 80% (last season of system-wide approach) Statewide rules may be proposed next spring

8. 8 Proposed Rule Changes (cont.) Pneumatic Controllers (NAA) 1st time source being regulated Most controllers must be low-bleed (new: 2/1/09, existing: 5/1/09) Enhanced maintenance, inspection, and recordkeeping for remaining high-bleeds Statewide rules may be proposed next spring

9. 9 Proposed Rule Changes (cont.) Statewide RICE (existing) Install controls if >500 hp Rich burn: NSCR and air fuel controller by 5/12/2010 Lean burn: oxidation catalyst by 5/1/2010 Not required at ≥ $5,000 per ton reductions

10. 10 Potential future strategies Leak detection/maintenance at E&P sites and compressor stations Drill rigs (NOx) Miscellaneous oil and gas equipment

11. 11 House Bill 1341 – Enforced by COGCC Condensate/produced water/crude oil tanks - located in 3 counties within ¼ mile of affected buildings - control at 95% if source ≥ 5 tpy Glycol dehydrators - located in 3 counties within ¼ mile of affected buildings - control at 90% if source ≥ 5 tpy Production Pits - located in 3 counties within ¼ mile of affected buildings - control at 95% if source > 5 tpy Pneumatic devices shall be low-bleed if technically feasible (new/modified Statewide) Green completions - Statewide, unless exempt due to field conditions Control requirements will be reflected in an APCD-issued permit

12. 12 House Bill 1341 - continued COGCC hearing: Dec. 9-11, 2008 Implementation date: Feb. 1, 2009 (pending) Compliance date: Oct. 1, 2009, for most air related rules (pending) COGCC and CDPHE interaction –Revises permitting process for COGCC and adds a consultation component