### Qctober 15 2014 Memorandum Subject: October 15, 2014 Meeting Between QEP Resources, Inc. and U.S. Environmental ProtectionAgency (EPA) From: Chris Stoneman, PolicyAdvisor



# ~ **~** Outreach and Information Division, Office ofAir QualityPlanning and Standards (OAQPS) To: Docket- EPA-HQ-OAR-2011-0151 This memorandum to docketprovides a briefsummary ofthe maindiscussionpoints made atthe subjectmeeting during the commentperiod for the AdvanceNotice of Proposed Rulemaking (ANPR): "ManagingEmissions from Oil andNatural Gas Production in Indian Country." (79 Federal Register 32502, June 5, 2104) Meeting details: When: October 15, 2014; 10:00- 11 :30 a.m. ET Where: EPA Offices, RTP, NC Participants: Greg Green, EPA, OAQPS LauraMcKelvey, EPA, OAQPS Chris Stoneman, EPA, OAQPS Mary Tom Kissell, EPA, OAQPS Ron LePlatt, QEP Mike Smith, QEP DickWilson, National Environmental Strategies, Inc. Duringthe meeting, QEP provided an overview ofseveral concerns theyraised in their comments onthe ANPR and in apreviousmeetingwiththe EPA. They also provided a handout, which is attached. The concerns QEP raised are:

• Post-constructionregistration; • Allowing sources to establishfederally enforceable limits for criteriaand hazardous airpollutants; • Coverage and requirements ofminor source program; • General conformityrequirements for nonattainment areas; and • Regulation ofexisting sources. The EPA answeredbasic questions about the contentofthe ANPR. This memorandumwill be filed inthe docket for the ANPR and will be available for public review.

### PostconstructionRegist raf ion Necessary to provide for accurate emission estimates, determination ofapplicable requirements, and identification/sizing ofemissions control equipment. Accurate emission estimates require well-specific production data and representative gas/liquid analysis data. Texas PBR for Oil and Gas Handling and Production Facilities (30 TAC 106.352): In the Barnett Shale, Registration is required either 90 days or 180 days after start ofoperation, depending on level of emissions.

Wyoming site-specific permit program: Deadlines for installation ofemissions control equipment and permit applications vary based on source, location within state, and type offacility (single well or multiwell pad). Example:

o Condensate and oil tanks in Concentrated Development Area at single well facility o Emissions are based on first 30 days ofproduction and a default decline factor of0.6 o Emissions are based on well-specific liquid analysis. Composite analyses data are acceptable only ifWDEQ-specified requirements are met. o Within 60 days offirst date ofproduction (FDOP) tanks with emissions greaterthan presumptive BACT threshold are required to be controlled by at least 98%. o Application is due within 90 days of FDOP. 

### Program should allow sourcestoestablishfederally enforceable limitsfor criteria and hazardous air pollutants Establishment offederally enforceable limits provides the ability ofsources to reduce emissions and more effectively comply with NSPS and NESHAPs. Examples:

CJ Condensate and oil tanks: Colorado's General Permit GP08 applies to tanks with actual uncontrolled orcontrolled VOC emissions equal to or less than 5

.9tpy. The General Permit establishes afederally enforceable emission limit. NSPS 

### 0000 does not apply to tanks that are registered under GP08. " Dehydration units: Wyoming's site-specific permitting program allows federally enforceable controls to be considered when evaluating applicability of MACT standards. Dehydration units with controlled benzene emissions less than 1.0tpy are subject only to limited requirements of Subpart HH.

o Texas' PBR for O&G Handling and Production facilities does not require registration forthose sources outside ofthe Barnett Shale. However, underthe General Requirements ofChapter 106 -Exemptions from Permitting, an owner or operator may voluntarily certify and register the maximum emission rates from facilities permitted by rule in orderto establish federallyenforceable allowable emission rates.**------saut'"ces-shou!d-be-a~!owed-t-O-vo!ul'ltat'"i!y--accept-feder-all¥-enf-OI'"Ceab!e-emissior+-IJmits-ir:J--Oroer-t-O** secure minorstatus. State streamlined permitting programs treattrue minor and synthetic minorsources equally. An Indian Country streamlined permitting program that includes synthetic minor sources would incentivize operators to voluntarily reduce emissions. Coverage and Requirements of Program The program should include all emission sources associated with the upstream (exploration and production) and midstream (gathering and gas processing) sectors ofthe industry. Similar to the upstream sector, the midstream sector (compressor stations, central gathering facilities, gas plants) requires a program that allows flexibility and timely permitting. The upstream and midstream sectors include similar emissions sources that are regulated by current NSPS 

### (JJJJ, 0000) and NESHAP (HH, 

### ZZZZ). Current NSPS and NESHAP for sources at oil and natural gas production facilities include control requirements at emission thresholds that in most cases are below uncontrolled emissions from new sources. It is recommended that current NSPS and NESHAP serve as a starting point for requirements of the program. General Conformity Requirements for NonattainmentAreas The General Conformity Rule ensures thatthe actionstaken by federal agencies in nonattainment and maintenance areas do not cause, contribute, or increase the severity of NAAQS. Such actions include the Approval ofApplication to Drill (APD) and the granting of right-of-ways for oil and gas facilities. Per 40 CFR 193 (d) a conformity determination is not required forthe portion ofan action that includes new or modified stationary sources that require a permit underthe New Source Review program ofthe CAA. Sources that are included in and comply with the streamlined permitting program should be presumed to**conform~** Regulation of Existing Sources
The ANPR includes the suggestions that existing sources can be regulated through a FIP. USEPA has expressed a concern that it may not be able to issue permits for new development in areas with impaired air quality without addressing existing sources. Concerning existing sources:

o New sources are subject to current NSPS and MACT standards that cause emissions to be far below existing sources. Allowing sources to voluntarily accept enforceable emissions limits below the requirements ofthose standards will encourage additional reductions.

o Natural decline in oil and gas production rates at existing wells will cause emissions from those facilities will decline.

o Because ofthe points above, overall emission trends for agiven basin will show a decline without additional control ofexisting sources.
o In orderto develop an effective program for regulation ofsources in basins with impaired air quality USEPA must first have a solid understanding ofthe sources, emissions profiles, and emission trends within those basins.o Tfii.ThS, US

### EPA, and operators snoul workt ogetherto develOp that understanding for basins with impaired air quality. This work should occur outside ofthe streamlined permitting program for new sources. • After a clear understanding of issues within a basin is developed, additional required actions, including the control ofexisting sources, can be more effectively identified and implemented. Such actions will be more effective ifoperators have the flexibilityto identify and implement specific opportunitiesfor emissions reductions, as opposed to a rule requiring across-the-board reductions at all sources.