# 2013 Rulemaking Stakeholder Meeting
April 25, 2013
Colorado Department of Public Health and Environment Air Pollution Control Division

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 1

# 2013 Rulemaking Effort Goals

 Identify and implement strategies that **improve the effectiveness and efficiency**  of Colorado’s air quality program
 Find ways to **reduce permitting burdens** for both the Division and the regulated community without impacting environmental benefits from the permitting program

 Address the growth in oil and gas development through the **adoption of reasonable emission reduction strategies**

 Lay the groundwork for ongoing efforts to **reduce oil and gas emissions**  while minimizing burdens that don’t provide environmental value

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 2

# Stakeholder Process Goals

 Role out concepts, draft language, and associated rulemaking documents, in phases, for stakeholder review and input

 All concepts, language and documents are expected to evolve through the stakeholder process

 Wrap up Regulation Numbers 3 and 6 by May 2013

 Wrap up Regulation Number 7 and Common Provisions by June 2013 NOTE: Stakeholders will have multiple opportunities to comment during the stakeholder process and later, during the rulemaking process.

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 3

# Timeline and Schedule

 

### Stakeholder Meetings

 Wednesday, May 22, 2013 1:30 pm - 4:30 pm Note: All meetings in Sabin/Cleere Rooms, CDPHE Campus



###  

### Rulemaking Process Goal

 August 2013 Request for Hearing

 November 2013 Hearing

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 4

# Areas of Discussion
Proposed Revisions: Part 1

 

### Regulation Number 6, Part A, NSPS OOOO

 EPA reconsideration



###  

### Regulation Number 3

– reporting and permitting

 Regulation Number 3 references

 APEN and permit analyses

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 5

# Areas of Discussion
Proposed Revisions: Part 2

 

### Possible Presumptive BACT options

 

### Oil and gas controls cost/benefit analyses

 

### Regulation Number 7

– oil and gas emission reduction strategies

 Discussion of comments received

 Review of language changes

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 6

# Proposed Revisions: Part 1

NSPS OOOO (Regulation Number 6, Part A) 

### Permitting and APEN Requirements (Regulation Number 3)

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 7

# Reg. 6

– NSPS OOOO

 

### Partial adoption October, 2012

 

### Adopt well completion and other provisions in full

 

### Remove manifolded tanks variation

 

### EPA reconsideration

 EPA estimated number of tanks and available controls

 Enforceable limits to avoid storage vessel requirements Continue moving forward with potential full adoption

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 8

# Reg. 3

– Revisions

 

### Remove requirements for sources subject to a NSPS, NESHAP, or MACT adopted by the AQCC to file an APEN and/or obtain a construction permit, regardless of emissions

 

### Revise Air Pollution Emission Notice (APEN) reporting thresholds (2 tpy)

 

### Revise Appendix A de minimis levels for non

- criteria reportable pollutant (1000 lbs/yr)

 

### Revise construction permit thresholds (25 tpy)

 

### Remove the crude oil storage tank permit exemptions

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 9

# Reg. 3

– References

 

## Avoid inadvertent changes to SIP requirements

 

## Regulation Number 1

 

### Section III.D.

 

## Regulation Number 7

 

### Section XII.

 

### Section XVII.

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 10

# Reg. 3

– Preliminary Analyses

 

### Construction Permits

 Historical data analysis

 Real

- time data analysis (ongoing)



###  

### APENs

 Historical data analysis

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 11

# Reg. 3

– Permit Analysis

 

### Division Proposal

 Raise construction permit threshold to 25 tpy for all criteria pollutants except lead


###  

### Goals

 Streamline and reduce permitting requirements

 Consistent thresholds statewide

 No loss in emission controls

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 12 NAA APENs 1 - 2 tpy 2007 - 2012

# Reg. 3

– Permit Analysis

 

### Analysis

 CDPHE permit database queried February, 2013

– all AIRS points with estimated uncontrolled actual emissions of criteria pollutants < 25 tpy

 Removed AIRS points at: major source facilities, facilities > 25 tpy, and synthetic minor sources

 Removed permit

- exempt, APEN

- exempt, and cancelled AIRS points


###  

### 7,600

– 9,500 AIRS points at facilities < 25 tpy

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 13 NAA APENs 1 - 2 tpy 2007 - 2012

# Reg. 3

– APEN Analysis Ozone NAA

 

### Division Proposal: Raise APEN reporting threshold in NAA from 1 to 2 tpy 

###  

### Goals

 Streamline and reduce reporting requirements

 Make APEN thresholds consistent statewide

 Minimal loss in emissions data


###  

### Analysis

 CDPHE APEN database queried March, 2013

 Looked at uncontrolled, unit

- level emissions

 Most recent, maximum data used (2012)

 Includes active APENs between 1

- 2 tpy in NAA

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 14

# Reg. 

# 3

– NAA APENs 1

- 2 tpy 2007

- 2012

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 15  APENs in this category have been rising steadily from 2007 to 2012

 Affected sources are very small relative to statewide point source emissions

 Most larger sources already have enacted controls

# Reg. 3

– VOC Sources 1

- 2 tpy Emissions

 

### VOC detailed example

 64% of state uncontrolled emissions of VOCs are in NAA

 NAA uncontrolled VOC are less than 1% of NAA VOC

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 16 NAA
rest of state NAA 1

- 2 tpy

• Most APENs are for point source activities related to loadout /tanker trucks and small condensate tanks

• 99% of condensate tank emissions are from tanks/batteries with uncontrolled emissions > 5 tpy Emissions4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 17 

### 2012 NAA Uncontrolled Emissions for sources between
1 - 2 tpy as a percent of all NAA Uncontrolled Emissions 

# Reg. 3

– Other pollutants in NAA

# Proposed Revisions: Part 2

Oil and Gas Potential Control Strategies (Regulation Number 7)

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 18

# Presumptive BACT Options

 

### Division considering improved capture requirement

 Storage tanks with required control devices have “no detectable emissions” from thief hatches, pressure relief valves, and other access points except during periods of malfunction

 Operators must keep thief hatches, pressure relief valves and other access points closed except for maintenance and liquid loadout

4/25/2013 19 APCD 2013 Rulemaking April Stakeholder Meeting

# Presumptive BACT Options

 

### Alternatively, compliance with “no detectable emissions” requirement is presumed when the tank is equipped with and operating presumptive Best Available Control Technology (BACT)

 New and modified storage tank batteries

 Existing storage tank batteries 

### NOTE: Still subject to 95% control requirements and General Provisions (good air pollution control practices)

4/25/2013 20 APCD 2013 Rulemaking April Stakeholder Meeting

## Options for New/Modified Storage Tanks

 Centralized liquids gathering system

 Liquids processed at centralized facility

 Liquids stabilized before dispensing into atmospheric storage vessel

 Gaseous emissions captured and sent to sales line

 Closed

- Loop Emission Capture System

 Technology that captures emissions from PRV and thief hatch

 Could include expandable tank bladder systems

 Gaseous emissions captured and sent to sales line

 HLP Separator

 At least two stages of separation must occur

 Gaseous emissions captured and sent to sales line

 The HLP control cost of a hypothetical 20 tons/year uncontrolled tank is about $1,174 per ton of VOC reduced

 VOC reduction about 19 tpy
4/25/2013 21 APCD 2013 Rulemaking April Stakeholder Meeting

# Options for Existing Storage Tanks

 

### Anything that qualifies as PBACT for new and modified tanks; or

 

### Second Stage Separation

- Buffer Bottle

 At least two stages of separation must occur

 Gaseous emissions can be flared

 The Buffer Bottle retrofit control cost of a hypothetical tank with 20 tons/year (uncontrolled) is about $637 per ton of VOC reduced

 VOC reduction about 4.75 tons/year (assumes 25% improvement in capture of emissions)

4/25/2013 22 APCD 2013 Rulemaking April Stakeholder Meeting

# HLP and Buffer Bottle Cost Estimates

4/25/2013 23 APCD 2013 Rulemaking April Stakeholder Meeting

# Cost/Benefit Analysis

 

### Lowering statewide VOC control threshold for storage tanks

 

### Adding auto

- igniters to existing flare controls statewide

 

### Expanding emission controls to crude oil tanks statewide

 

### Expand no/low bleed pneumatics statewide

 

### Connecting produced water tanks to existing flare controls statewide

4/25/2013 24 APCD 2013 Rulemaking April Stakeholder Meeting

# Control for Storage Tanks

 

### Division proposal to lower tank control threshold

 20 tons/year down to 6 tons/year



###  

### About 521 condensate tank batteries would need controls

 About 159 tanks are in the 9

- county Ozone NAA

 VOC reduction ≈ 3,908 tons/year

 Total annual cost for flares is about $3.2 million

 Total annual cost for VRUs is about $11.3 million



###  

### Flare Cost effectiveness ≈ **$824/ton of VOC** reduced

 

### VRU Cost effectiveness ≈ **$2,895/ton of VOC** reduced

4/25/2013 25 APCD 2013 Rulemaking April Stakeholder Meeting

# Flare & VRU Cost Estimates

4/25/2013 26 APCD 2013 Rulemaking April Stakeholder Meeting

# Auto

- Igniters

– Existing Flares

 

### Auto

- igniters required on flares in Ozone NAA

 

### APEN database analysis indicates:

 About 484 condensate tanks have flares

 About 198 glycol dehydrators have flares

 Total annual cost for auto

- igniters is about $230k for tanks and $94k for dehydrators

 Condensate tank VOC reduction ≈ 201 tons/year

 Dehydrator VOC reduction ≈ 174 tons/year

 VOC reduction assumes 1% flare downtime (88 hours/year)


###  

### Tank CE ≈ **$1,147 per ton of VOC** reduced

 

### Dehydrator CE≈ **$540 per ton of VOC** reduced

4/25/2013 27 APCD 2013 Rulemaking April Stakeholder Meeting

# Auto

- Igniter Cost Estimates

4/25/2013 28 APCD 2013 Rulemaking April Stakeholder Meeting

# Control for Crude Oil Tanks

 

### Division is proposing controls on all hydrocarbon liquid storage tanks over 6 tons/year statewide

 Allows for consistency with NSPS OOOO



###  

### Data Sources

 APEN data on Crude Oil tanks is limited

 APEN exemption removed in December 2008

 OGCC tracks O&G production and API gravity for each well

 Limitations between associating OGCC gas well API number with tank battery AIRS ID

 Division is still reconciling data

 Further analysis needed before the number of tanks is known

4/25/2013 29 APCD 2013 Rulemaking April Stakeholder Meeting

# Low/No Bleed Pneumatics

 Pneumatic valves are below the APEN reporting threshold

 Don’t have APEN data on pneumatic valves

 Number of pneumatics estimated using emission inventory data based on producer surveys

 About 41,500 devices in DJ Basin (2006 data)

 High bleed pneumatic valves are defined as emitting at least 6 scf per hour

 Replacing/retrofitting high bleed valves to no/low bleed reduces emissions by 88

- 98%

 Payback period of recovered natural gas is about 1 to 2 years

4/25/2013 30 APCD 2013 Rulemaking April Stakeholder Meeting

# Control for Existing Water Tanks

 

### Division proposes that produced water tanks with VOC emissions over 6 tpy should have emissions routed to the existing flare

 

### Number of tanks > 6 tpy uncontrolled = 26

 

### Division requests cost information on

 Plumbing costs

 Installation costs

 Maintenance costs

4/25/2013 31 APCD 2013 Rulemaking April Stakeholder Meeting

# Areas of Discussion
Proposed Revisions: Part 2

 

### Regulation Number 7

– oil and gas emission reduction strategies

 Discussion of comments received

 Review of language changes

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 32

# Potential Control Strategies

 

### Expand control requirements for storage tanks

 

### Enhance capture at controlled storage tanks

 

### Expand non

- attainment area auto

- igniter requirements statewide

 

### Expand leak detection and repair requirements

 

### Expand non

- attainment area pneumatic control requirements statewide

 

### Reduce venting and flaring of gas stream at well sites

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 33

# Overview of Comment Process

 

### Comments have been posted to website

 Mix of comments from environmental groups, industry groups, public citizens



###  

### Division will continue to receive and respond to comments throughout the stakeholder process

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 34

# Comment Areas

 Timing

 Definitions

 General provisions

 Good air pollution control practices

 Auto

- igniter requirement
 Storage tanks

 Control requirements

 Capture requirements
 Leak detection and repair requirements

 Well

- site flaring and venting requirements

 Low bleed pneumatic devices

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 35

# Timing

 

### Timing of Installation

 Installation on existing equipment by January 1, 2015 could be challenging

 Deadline for installation for existing equipment should be moved up

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 36

# Definitions

 

### Concerns that many of the proposed definitions are unclear, create unintended consequences or are unnecessary

 Division is still evaluating these definitions and will make appropriate revisions so that definitions serve the intended purpose



###  

### Concern that the definition of leak is overly stringent

 Leak definition intended to support substantive leak detection requirements, including use of IR camera to identify leaks

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 37

# Definitions

– Revisions

 Deleted

 Atmospheric

 Downtime

 Modified/modification

 Leak
 Revision

 Storage Tank

 Well site
 No revision

 Date of First Production

 Normal Operation

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 38

# General Provisions

 

### Good air pollution control practices requirements are overly broad

 Goal is to ensure that production and control equipment is operated properly in accordance with accepted standards

 Much of the language mirrors existing Regulation No. 7, Section XII


###  

### Good air pollution control language is subjective

 Similar good air pollution control language is commonly used and by its nature is informed by particular factual circumstances

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 39

# General Provisions

 

### Prevention of emissions requirements

 Apply to **all O&G operations** listed in header, regardless of size



###  

### Air pollution control equipment requirements

 Apply where **control equipment used to comply** with Section XVII



###  

### NSPS/MACT/BACT exemption for storage tanks

 Brings in NSPS OOOO, NSPS Kb, and MACT HH subject storage tanks

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 40

# General Provisions

– Revisions Good Air Pollution Control Practices

 

### Revision

 

### Add in language “unless being used for maintenance or liquids loadout ”



###  

### No revision

 

### No required frequency of inspections

 

### Not tied to permit or O&M required sources

 

### Information available to the Division does not create a recordkeeping requirement

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 41

# General Provisions

– Revisions Autoigniters

 

### Revision

 Deleted definition and reference to “modified”



###  

### No revision

 Maintained definition as used for Section XII

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 42

# Storage Tank Requirements

 

### Proposed language is more stringent than NSPS OOOO

 

### IR camera monitoring

 Costly and/or inherently unsafe

 Retaining images would require a lot of storage space

 Some cameras may not be able to capture or record, especially with “regular” video

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 43

# Storage Tank Requirements

 

### No Detectable Emissions

 Operating a controlled tank with no detectable emissions is not feasible

 Controlled condensate tanks can meet a no detectable emission limit and therefore BACT should not be available as an alternative compliance method

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 44

# Storage Tanks

– Revisions Modified

 

### Revision

 Deleted modified from compliance schedule

 Included a description that tanks that increase emissions to above the threshold must meet the 95% requirement immediately

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 45

# Storage Tanks

– Revisions Visual monitoring

 

### Revision

 Monitoring no required more often than every 7 days or less often than every 90 days

 Recordkeeping checklist

– added in date of inspection



###  

### No revision

 Visual monitoring requirement triggered by truck loadout

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 46

# Leak Detection Requirements

 

### Too stringent or not sufficiently stringent?

 Historically leak detection programs have not been applied to these sites

 Better leak detection and repair provides an opportunity to reduce emissions and capture valuable product


### No revisions made at this time

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 47

# Well Tie

- In

 

### Requiring wells to be tied into a gas pipeline within 6 months could hinder development of unproven reserves

 Sets an expectation that wells will be attached to a pipeline within 6 months

 Allows for exceptions to be granted in appropriate cases



###  

### Reporting requirement needed?

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 48

# Well Tie

- In

– Revisions Visual monitoring

 

### Revision

 Monitoring no required more often than every 7 days or less often than every 90 days

 Recordkeeping checklist

– added in date of inspection



###  

### No revision

 Visual monitoring requirement triggered by truck loadout

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 49

# Well Tie

- In

– Revisions Reporting

 

### Revision

 Deleted this requirement

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 50

# Pneumatic Devices

 

### Retrofitting existing devices is costly and rule should be limited to new devices

 

### Timing of compliance should be adjusted

No revisions made at this time

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 51

# Request for Additional Comments

 

### Economic costs of proposed requirements

 

### Feasibility of proposed timelines

 

### Options for leak detection/directed inspection and maintenance

 

### Presumptive BACT

 

### Monitoring schedule and frequency

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 52Submit comments by **May 15, 2013** On potential revisions to **Regulation Numbers 6 and 3** to Leah Martland at leah.martland@state.co.us and Erin Overturf at erin.overturf@state.co.us On potential revisions to **Regulation Number 7** to Stefanie Rucker at stefanie.rucker@state.co.us and Clay Clarke at clay.clarke@state.co.us Presentations, language, and additional information can be found on http://www.colorado.gov/cdphe/apcd

Hot Topics » 2013 Rulemaking Effort 

## Next meeting: **May 22, 2013, at 1:30pm**

4/25/2013 APCD 2013 Rulemaking April Stakeholder Meeting 53