IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

UNITED STATES OF AMERICA, ) 

) 

Plaintiff, ) 

) 

and )

 ) 
 

STATE OF COLORADO, ) 
 

) 

Plaintiff-Intervenor, ) 

) 

v. ) Civil Action No. 

) 

KERR-McGEE CORPORATION, ) 

) 

Defendant. ) 

__________________________________________) 

CONSENT DECREE 
TABLE OF CONTENTS 

I. JURISDICTION AND VENUE ...................................................................................... 4 

II. APPLICABILITY............................................................................................................ 5 

III. DEFINITIONS................................................................................................................. 5 

IV. EMISSION REDUCTION REQUIREMENTS............................................................... 9 

V. ADMINISTRATIVE REQUIREMENTS ..................................................................... 26 

VI. LIMITS ON POTENTIAL TO EMIT ........................................................................... 28 

VII. AMBIENT AIR MONITORING................................................................................... 29 

VIII. MULTI-PHASE PIPING/TANKLESS WELL-SITE PILOT PROJECT ..................... 30 

IX. PERFORMANCE OPTIMIZATION REVIEW............................................................ 34 

X. CIVIL PENALTY.......................................................................................................... 38 

XI. ENVIRONMENTAL PROJECTS................................................................................ 40 

XII. REPORTING REQUIREMENTS ................................................................................. 43 

XIII. STIPULATED PENALTIES......................................................................................... 46 

XIV. FORCE MAJEURE ....................................................................................................... 56 

XV. DISPUTE RESOLUTION............................................................................................. 59 

XVI. INFORMATION COLLECTION AND RETENTION ................................................ 61 

XVII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS...................................... 64 

XVIII. EMISSION REDUCTION CREDIT GENERATION .................................................. 66 

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XIX. COSTS ........................................................................................................................... 66 

XX. NOTICES....................................................................................................................... 67 

XXI. SALES OR TRANSFERS OF OWNERSHIP/OPERATOR INTERESTS .................. 68 

XXII. EFFECTIVE DATE....................................................................................................... 70 

XXIII. RETENTION OF JURISDICTION............................................................................... 70 

XXIV. MODIFICATION .......................................................................................................... 70 

XXV. TERMINATION............................................................................................................ 71 

XXVI. PUBLIC PARTICIPATION .......................................................................................... 72 

XXVII. SIGNATORIES/SERVICE............................................................................................ 72 

XXVIII. INTEGRATION ............................................................................................................ 73 

XXIX. FINAL JUDGMENT ..................................................................................................... 74 

XXX. APPENDICES ............................................................................................................... 74 

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WHEREAS, Plaintiff, the United States of America, (the “United States”) on behalf of 

the United States Environmental Protection Agency (“EPA”), has simultaneously with lodging 

this Consent Decree filed a Complaint alleging that Kerr-McGee Corporation, or one or more of 

its wholly-owned subsidiaries, (collectively “Defendant” or “Kerr-McGee” and as more 

specifically defined below), violated requirements of the Clean Air Act (the “Act”) and the 

federal and state regulations implementing the Act applicable to: (i) five compressor stations 

referred to herein as the Hudson Facility, Dougan Facility, Frederick Facility, Fort Lupton 

Facility, and Platteville Facility, which are located in the Denver-Julesburg Basin in and near 

Adams and Weld Counties, Colorado (the “D-J Basin”), (which facilities are among those later 

defined as the “D-J Basin Facilities”); and (ii) three compressor stations referred to herein as the 

Cottonwood Wash Facility, Ouray Facility, and Bridge Station Facility which are in the Uinta 

Basin located near Vernal, Utah (the “Uinta Basin”) (collectively the “Uinta Basin Facilities”); 

WHEREAS, EPA administers the Act’s programs for the Prevention of Significant 

Deterioration (“PSD”), National Emission Standards for Hazardous Air Pollutants (“NESHAP”), 

and federal operating permits under Title V with respect to the Uinta Basin Facilities, and the 

Colorado Department of Public Health and Environment (“CDPHE”) as well as EPA, through 

the Colorado State Implementation Plan (“SIP”), are authorized to administer the PSD, 

NESHAP, and Title V programs with respect to the D-J Basin Facilities; 

WHEREAS, on September 9, 2004, Kerr-McGee disclosed to EPA, pursuant to EPA’s 

policy titled “Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of 

Violations” published at 65 Fed. Reg, 19,618 - 27 (April 11, 2000), that both the Cottonwood 

Wash Facility and Ouray Facility, which Kerr-McGee acquired as part of a June 2004 merger 

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with Westport Resources Corporation, had the potential to emit greater than major source 

thresholds and were subject to the federal operating permit requirements of Title V of the Act. 

Kerr-McGee subsequently submitted applications for Title V permits for both facilities to EPA, 

removed the conventional dehydrators at those facilities and replaced them with new “lowemission dehydrators” (as defined herein) incorporating integral vapor recovery capabilities and 

emitting insignificant amounts of Volatile Organic Compounds (“VOC”) or other pollutants 

regulated under the Act; 

WHEREAS, Plaintiff-Intervenor, the State of Colorado (“State”), on behalf of CDPHE, 

has simultaneously with lodging this Consent Decree, filed a Complaint in Intervention joining 

in the claims alleged by the United States to have occurred at the D-J Basin Facilities and 

additionally citing violations of the Colorado Air Pollution Prevention and Control Act (the 

“Colorado Act”) and its implementing regulations. CDPHE previously issued to Kerr-McGee 

Rocky Mountain Corporation1

: (i) a Notice of Violation (“NOV”) on or about November 4, 

2005 for failure to install pollution control equipment on compressor engines (“RICE” as further 

defined below) at four of the D-J Basin Facilities; (ii) a Compliance Advisory on or about May 5, 

2005 for violations of Operating Permit No. 95OPWE013 and Construction Permit No. 

00WE0583 for the Fort Lupton Facility; (iii) a NOV on or about June 15, 2005 for violations of 

CDPHE Permit No. 02WE0126 Initial Approval, and Modification 1 thereof applicable to the 

Thermal Oxidizer at the Platteville Station’s Amine Unit; (iv) its findings that Kerr-McGee’s 

records for 2005, maintained pursuant to Regulation No. 7, indicated Kerr-McGee’s failure to 

achieve required emission reductions for 9 days between May 1, 2005, and September 30, 2005; 

1 Kerr-McGee Rocky Mountain Corporation no longer exists, and its former operating facilities in Colorado are now 

owned by Kerr-McGee Oil and Gas Onshore LP, a wholly-owned subsidiary of Kerr-McGee Corporation. 

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and (v) the preliminary findings of CDPHE on or about November 10, 2006, based on 

inspections during the 2006 Ozone Season of Kerr-McGee facilities with condensate storage 

tanks at which flares were installed to control VOC emissions pursuant to Colorado Air Quality 

Control Commission Regulation No. 7, Section XII, which findings indicated certain violations; 

WHEREAS, Kerr-McGee does not admit the violations occurred and further does not 

admit any liability for civil penalties, fines, or injunctive relief to the United States or the State 

arising out of the transactions or occurrences alleged in the Complaint, the Complaint in 

Intervention, or the NOVs and Compliance Advisory issued by CDPHE; 

WHEREAS, Kerr-McGee has worked cooperatively with the Plaintiff and PlaintiffIntervenor (collectively referred to as Plaintiffs) to settle this matter and committed to reduce or 

avoid annual emissions in the Uinta Basin and the D-J Basin by an estimated 1,750 tons of 

nitrogen oxides (“NOx”), 1,156 tons of carbon monoxide (“CO”), 686 tons of sulfur dioxide 

(SO2), and 2,195 tons of VOCs, and also to undertake various projects to conserve and return to 

the market place an estimated 456 million standard cubic feet of natural gas in the first twelve 

(12) months following full implementation of the Pneumatic Controller (defined herein) retrofits 

made pursuant to this Consent Decree; 

WHEREAS, Kerr-McGee previously developed plans to extensively use electric power 

for a portion of its natural gas compression needs in the future development of its Uinta Basin 

operating assets, which if implemented will avoid the emission of significant quantities of air 

pollutants otherwise produced by natural gas-fired engines used for natural gas compression, and 

has already implemented “green completion” practices and procedures for completing new wells 

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in both its Uinta Basin and D-J Basin operations to prevent or minimize the flaring and/or 

venting of natural gas during well completion; 

WHEREAS, the United States, the State, and Kerr-McGee (the “Parties”) recognize, and 

the Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by 

the Parties in good faith and at arm’s length, will avoid litigation among the Parties, and that this 

Consent Decree is fair, reasonable, consistent with the goals of the Act, the Colorado Act, and 

their implementing regulations, and that its entry is in the best interests of the Parties and is in 

the public interest; 

NOW, THEREFORE, before the taking of any testimony, without the adjudication or 

admission of any issue of fact or law except as provided in Section I (Jurisdiction and Venue), 

and with the consent of the Parties, 

IT IS HEREBY ADJUDGED, ORDERED, AND DECREED as follows: 

I. JURISDICTION AND VENUE 

1. This Court has jurisdiction over the subject matter of this action and the Parties 

pursuant to 28 U.S.C. §§ 1331, 1345, and 1355, and Sections 113(b), 167, and 304 of the Act, 42 

U.S.C. §§ 7413(b), 7477 and 7604. Venue lies in this District pursuant to Sections 113(b) and 

304(c) of the Act, 42 U.S.C. §§ 7413(b) and 7604(c), and 28 U.S.C. §§ 1391(b) & (c) and 

1395(a), because some of the violations alleged in the Complaint and the Complaint in 

Intervention are alleged to have occurred in, and Kerr-McGee conducts business in, this judicial 

district. The Uinta Basin Facilities are located on “Indian country” lands as defined at 18 U.S.C. 

§ 1151 in Uintah County. For purposes of this Consent Decree, or any action to enforce this 

Consent Decree, Kerr-McGee consents to and will not contest the jurisdiction of the Court over 

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this matter. For purposes of this Consent Decree, Kerr-McGee agrees that the Complaint and the 

Complaint in Intervention state claims upon which relief may be granted pursuant to Sections 

113, 167, and 304(a) of the Act, 42 U.S.C. §§ 7413, 7477 and 7604(a) and Sections 115, 121, 

and 122 of the Colorado Act, §§ 25-7-115, 121, and 122 C.R.S. 

II. APPLICABILITY 

2. The obligations of this Consent Decree apply to and are binding upon the United 

States and the State, and upon Kerr-McGee, as defined herein, and any of its successors and 

assigns. 

3. Kerr-McGee shall ensure that any of its corporate subsidiaries or affiliates that 

now or in the future may own or operate any of the Uinta Basin Facilities, the D-J Basin 

Facilities, or other natural gas production or gathering facilities subject to any work or 

compliance requirements of this Consent Decree, take all necessary and appropriate actions and 

provide EPA and/or the State access to facilities, equipment, and information as may be required 

to enforce this Consent Decree so that Kerr-McGee may fully and timely comply with all 

requirements of this Consent Decree. 

4. In any action to enforce this Consent Decree, Kerr-McGee shall not raise as a 

defense the failure by any of its officers, directors, employees, agents, contractors, or corporate 

affiliates or subsidiaries to take any actions necessary to comply with the provisions of this 

Consent Decree. 

III. DEFINITIONS 

5. Terms used in this Consent Decree that are defined in the Act or in regulations 

promulgated pursuant to the Act shall have the meanings assigned to them in the Act or such 

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regulations, unless otherwise provided in this Decree. Whenever the terms set forth below are 

used in this Consent Decree, the following definitions shall apply: 

a. “CDPHE” shall mean the Colorado Department of Public Health and 

Environment and any of its successor agencies or departments. 

b. “Consent Decree” or “Decree” shall mean this Consent Decree and all 

appendices attached hereto (listed in Section XXX). 

c. “Day” shall mean a calendar day unless expressly stated to be a business 

day. In computing any period of time under this Consent Decree, where 

the last day would fall on a Saturday, Sunday, or federal holiday, the 

period shall run until the close of business of the next business day. 

d. “D-J Basin Facilities” shall collectively mean the Hudson Facility, 

Dougan Facility, Frederick Facility, Fort Lupton Facility, Brighton 

Facility, Hambert Facility, and Platteville Facility, all located in the D-J 

Basin in Weld and Adams Counties, Colorado, as more specifically 

described in Appendix A. These facilities do not include wellhead 

facilities. 

e. “EPA” shall mean the United States Environmental Protection Agency 

and any of its successor departments or agencies. 

f. “HAP” shall mean hazardous air pollutant. 

g. “Kerr-McGee” shall mean Kerr-McGee Corporation, a Delaware 

corporation, and the wholly-owned subsidiary of Anadarko Petroleum 

Corporation as of August 10, 2006, and any of its corporate subsidiaries or 

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affiliates that own or operate any of the Uinta Basin Facilities or the D-J 

Basin Facilities (each as defined herein), or any other natural gas 

production or gathering facilities subject to any work or compliance 

requirements of this Consent Decree, and for which Kerr-McGee 

Corporation certifies pursuant to Paragraph 112 that it has authority to 

legally bind such entity to take all actions necessary for Kerr-McGee 

Corporation to comply with the provisions of this Consent Decree, 

including but not limited to: Kerr-McGee Oil and Gas Onshore LP, 

Westport Field Services LLC, Kerr-McGee (Nevada) LLC, and KerrMcGee Gathering LLC. 

h. “Low-Emission Dehydrator” shall be defined as set forth in Paragraph 6 of 

this Consent Decree. 

i. “Paragraph” shall mean a portion of this Decree identified by an Arabic 

numeral. 

j. “Performance Optimization Review” shall mean an evaluation of energy 

efficiency and the potential for product recovery at certain facilities for 

purposes of conserving natural gas and returning it to the marketplace. 

k. “Plaintiffs” shall mean the United States and the State. 

l. “Pneumatic Controller” shall mean a natural gas-driven pneumatic 

controller. 

m. “Potential to Emit” or “PTE” shall mean the maximum capacity of a 

stationary source to emit a pollutant regulated under the Act under its 

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physical and operational design. Any physical or operational limitation on 

the capacity of the source to emit a pollutant regulated under the Act, 

including air pollution control equipment and restrictions on hours of 

operation or on the type or amount of material combusted, stored, or 

processed, shall be treated as part of its design if the limitation or the 

effect it would have on emissions is federally enforceable and, as 

applicable, also legally and practicably enforceable by a state or local air 

pollution control agency. 

n. “Regulation No. 7” shall mean Colorado Air Quality Control Commission 

(“AQCC”) Regulation No. 7, 5 Colo. Code Regs. § 1001-9 (2007). 

o. “RICE” shall mean one or more stationary, natural gas-fired reciprocating 

internal combustion engines. 

p. “Section” shall mean a portion of this Decree identified by a Roman 

numeral. 

q. “Title V Permit” shall mean a permit issued pursuant to the federal 

operating permit program established by Title V of the Act, 42 U.S.C. §§ 

7661 - 7661f, and as implemented by 40 C.F.R. Parts 70 (applicable to 

states) or 71 (applicable to EPA). 

r. “TPY” shall mean tons per year. 

s. “Uinta Basin Facilities” shall collectively mean the Cottonwood Wash 

Facility, Ouray Facility, and Bridge Station Facility each located in the 

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Uinta Basin near Vernal, Utah, as more specifically described in 

Appendix B. 

t. “VOC” shall mean volatile organic compounds as defined in 40 C.F.R. 

§ 51.100(s). 

IV. EMISSION REDUCTION REQUIREMENTS 

A. LOW-EMISSION DEHYDRATORS 

6. “Low-Emission Dehydrator.” For purposes of this Consent Decree, a “LowEmission Dehydrator” shall meet the specifications set forth in Appendix C and shall mean a 

dehydration unit that: 

a. incorporates an integral vapor recovery function such that the dehydrator 

cannot operate independent of the vapor recovery function; 

b. either returns the captured vapors to the inlet of the facility where such 

dehydrator is located or routes the captured vapors to that facility’s fuel 

gas supply header; and 

c. has a PTE less than 1.0 TPY of VOCs, inclusive of VOC emissions from 

the reboiler burner. 

Existing Uinta Basin Facilities 

7. Kerr-McGee shall continue to operate and maintain Low-Emission Dehydrators 

for all gas dehydration performed at its existing Uinta Basin Facilities. 

8. By no later than 30 Days after the date of lodging of this Consent Decree, KerrMcGee shall provide a written notice to EPA and certify that each Low-Emission Dehydrator 

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installed at Kerr-McGee’s existing Uinta Basin Facilities meets the criteria set forth in 

Paragraph 6. 

New Facilities in the Uinta Basin 

9. Beginning as of the date of lodging of this Consent Decree, and continuing for so 

long as this Consent Decree is in effect, Kerr-McGee shall install and operate Low-Emission 

Dehydrators at all compressor stations or other facilities utilizing equipment to dehydrate natural 

gas in the Uinta Basin. 

10. Kerr-McGee shall provide written notice to EPA within 60 Days of each 

installation under Paragraph 9, and include a description of the equipment installed and a 

certification pursuant to Paragraph 112 that the Low-Emission Dehydrator meets the criteria set 

forth in Paragraph 6. 

11. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section IV.A., 

and shall report the status of its compliance with these requirements in its Annual Reports 

submitted pursuant to Section XII (Reporting Requirements). 

B. CONDENSATE STORAGE TANKS 

Cottonwood Wash and Ouray Facilities in the Uinta Basin 

12. Within 180 Days after the date of lodging of this Consent Decree, Kerr-McGee 

shall install and operate enclosed flares at the Cottonwood Wash Facility and Ouray Facility or 

install a non-flare alternative pursuant to Paragraph 18 to meet a 95% or greater reduction of 

VOC emissions from all condensate storage tanks located at each facility. 

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13. Kerr-McGee shall design, install, and operate each enclosed flare required 

pursuant to this Section IV.B. in accordance with the requirements of 40 C.F.R. § 60.18(c)-(e) 

and the manufacturer’s written instructions or procedures necessary to achieve the emission 

reductions listed in Paragraph 12. Kerr-McGee shall submit to EPA a worksheet setting forth the 

design calculations for each proposed enclosed flare, including heat content determination, exit 

velocity determination, and flow rate estimates, within 60 Days after the lodging this Consent 

Decree. 

14. Upon startup of each enclosed flare, Kerr-McGee shall operate and maintain an 

auto-ignition device equipped with a thermocouple that reignites the pilot flame whenever it goes 

out. 

15. No later than 60 Days following the start-up of each enclosed flare, Kerr-McGee 

shall submit a certification pursuant to Paragraph 112 to EPA that Kerr-McGee has complied 

with the requirements of Paragraphs 12 through 14. 

16. Kerr-McGee shall inspect each enclosed flare weekly and document whether the 

pilot light on each enclosed flare was lit or the enclosed flare was bypassed at the time of the 

inspection. 

17. Kerr-McGee shall notify EPA of all instances that a pilot light on each enclosed 

flare was not lit or the enclosed flare was bypassed, and the duration of each incident, with each 

Annual Report submitted pursuant to Section XII (Reporting Requirements). 

18. Instead of designing, operating, maintaining, and monitoring an enclosed flare in 

accordance with the applicable requirements of this Section IV.B., or as a future replacement of, 

or preferred primary means of emission control over, an enclosed flare installed to comply with 

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this Section IV.B., Kerr-McGee may elect to control emissions from condensate storage tanks at 

these facilities by installing and operating a vapor recovery unit (“VRU”), system for cascading 

stabilization of condensate, or any other system to capture and beneficially use or prevent VOC 

emissions from condensate tanks. No later than 30 Days prior to installation, Kerr-McGee shall 

submit to EPA a monitoring plan to ensure the non-flare alternative meets a 95% or greater 

reduction in VOC emissions. 

19. By no later than 60 Days after the start-up of any such enclosed flare and/or nonflare alternative, Kerr-McGee shall, where applicable, obtain all necessary federally-enforceable, 

non-Title V permits and amend its Title V Permit applications for the Cottonwood Wash and 

Ouray Facilities, as appropriate, to incorporate all enclosed flare and/or non-flare alternative 

installation, operation, monitoring and reporting requirements as set forth in this Section IV.B. 

Brighton Facility in the D-J Basin 

20. By no later than June 30, 2007, Kerr-McGee shall install and operate an enclosed 

flare at the Brighton Facility to meet a 95% destruction efficiency for VOC emissions from all 

condensate storage tanks located at the Brighton Facility. 

21. Kerr-McGee shall design, install and operate the enclosed flare in accordance 

with the requirements of “Regulation No. 7”, and the manufacturer’s written instructions or 

procedures necessary to achieve the emission reductions listed in Paragraph 20. 

22. By no later than June 1, 2007, Kerr-McGee shall have submitted a worksheet to 

CDPHE setting forth its design calculations for the proposed enclosed flare, including heat 

content determination, exit velocity determination, and flow rate estimates. 

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23. Upon startup of the enclosed flare, Kerr-McGee shall operate and maintain an 

auto-ignition device equipped with a thermocouple that reignites the pilot flame whenever it goes 

out. 

24. By no later than 60 Days following start-up of the enclosed flare, Kerr-McGee 

shall submit a certification pursuant to Paragraph 112 to CDPHE that it has complied with the 

requirements of Paragraphs 20-23. 

25. Kerr-McGee shall inspect the enclosed flare and document whether the pilot light 

on the enclosed flare was lit or the enclosed flare was bypassed at the time of the inspection, as 

required by Regulation No. 7. 

26. Kerr-McGee shall notify CDPHE of all instances that a pilot light on the enclosed 

flare was not lit or the enclosed flare was bypassed, and the duration of each incident, with each 

Annual Report submitted pursuant to Section XII (Reporting Requirements), and any other 

reports required to be submitted to CDPHE under Regulation No. 7. 

27. By no later than 60 Days after the start-up of such enclosed flare, Kerr-McGee 

shall apply to CDPHE for a construction permit and to amend its Title V Permit, as appropriate, 

to incorporate all enclosed flare installation, operation, monitoring and reporting requirements as 

set forth in this Section IV.B., or to request that CDPHE rescind its Title V Permit, as 

appropriate. 

28. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section IV.B., 

and shall report the status of its compliance with these requirements in its Annual Reports 

submitted pursuant to Section XII (Reporting Requirements). 

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C. COMPRESSOR ENGINES IN THE D-J BASIN 

29. Kerr-McGee shall install, operate and maintain emission control equipment to 

reduce: (i) NOx, CO and VOC emissions from seven existing two-stroke, lean-burn (“2SLB”) 

RICE located at the Frederick, Dougan, and Hudson Facilities; and (ii) CO and VOC emissions 

from four existing 2SLB RICE located at the Fort Lupton Facility, in accordance with the control 

requirements of this Section IV.C. Alternatively, Kerr-McGee may permanently remove from 

service any of these existing eleven 2SLB RICE located at the Frederick, Dougan, Hudson or 

Fort Lupton Facilities either before or after meeting the additional control requirements of this 

Section IV.C., and it may also replace one or more such existing 2SLB RICE with new RICE 

subject to all applicable permitting requirements then in effect, in accordance with the schedule 

in Paragraphs 30 and 31. Any such new RICE shall meet the requirements of Regulation No. 7, 

§ XVII regardless of whether such new RICE is relocated from a site within the State. Such new 

RICE shall have a manufacture date no earlier than January 1, 2004. 

30. The emission control equipment for the seven 2SLB RICE located at the 

Frederick, Dougan, and Hudson Facilities shall consist of: (i) new or remanufactured 

turbochargers; (ii) pre-combustion chambers; (iii) after-coolers with auxiliary water cooling, as 

needed; (iv) high-pressure fuel injection; and (v) oxidation catalysts. All such equipment shall 

be installed and operational, or one or more of the 2SLB RICE shall be replaced, in accordance 

with the following schedule: 

a.	 One Clark TLAD engine at the Hudson Facility - no later than January 4, 

2008; 

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b.	 A second Clark TLAD engine at the Hudson Facility - no later than 

February 22, 2008; 

c.	 A third Clark TLAD engine at the Hudson Facility - no later than April 11, 

2008; 

d.	 The fourth and last Clark TLAD engine at the Hudson Facility - no later 

than May 30, 2008; 

e.	 One Cooper-Quad engine at the Frederick Facility - no later than 

November 14, 2008 or certify by November 14, 2008 pursuant to 

Paragraph 112 that one Cooper-Quad RICE, specifically identified by 

AIRS Identification Number and serial number, will be replaced no later 

than January 16, 2009; 

f.	 The second and last Cooper-Quad engine at the Frederick Facility - no 

later than January 16, 2009 or replace the Cooper-Quad RICE, specifically 

identified by AIRS Identification Number and serial number, no later than 

January 16, 2009; and 

g.	 Dougan Engine 21 (a Cooper-Quad) - no later than March 20, 2009 or 

replace the Cooper-Quad RICE no later than March 20, 2009. 

31. The emission control equipment for the 2SLB RICE at the Fort Lupton Facility 

shall consist of oxidation catalysts. The oxidation catalysts shall be installed and operational, or 

the 2SLB RICE shall be replaced, in accordance with the following schedule: 

a.	 One Fairbanks-Morse MEP engine at the Fort Lupton Facility - no later 

than January 4, 2008 or certify by January 4, 2008 pursuant to Paragraph 

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112 that one Fairbanks-Morse MEP RICE, specifically identified by AIRS 

Identification Number and serial number, will be replaced no later than 

May 30, 2008; 

b.	 A second Fairbanks-Morse MEP engine at the Fort Lupton Facility - no 

later than February 22, 2008 or certify by February 22, 2008 pursuant to 

Paragraph 112 that one Fairbanks-Morse MEP RICE, specifically 

identified by AIRS Identification Number and serial number, will be 

replaced no later than May 30, 2008; 

c.	 A third Fairbanks-Morse MEP engine at the Fort Lupton Facility - no later 

than April 11, 2008 or certify by April 11, 2008 pursuant to Paragraph 112 

that one Fairbanks-Morse MEP RICE, specifically identified by AIRS 

Identification Number and serial number, will be replaced no later than 

May 30, 2008; and 

d.	 The fourth and last Fairbanks-Morse MEP engine at the Fort Lupton 

Facility - no later than May 30, 2008 or replace the Fairbanks-Morse MEP 

RICE, specifically identified by AIRS Identification Number and serial 

number no later than May 30, 2008. 

32. The emission control equipment for each existing 2SLB RICE at the Frederick, 

Dougan and Hudson Facilities shall meet the following control requirement for NOx: 2.0 

grams/hp-hr., or an equivalent lbs./MMBTU limit, when the RICE is operating at a 90% load or 

higher. 

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33. The emission control equipment for each existing 2SLB RICE shall have a control 

requirement of 58% destruction efficiency for CO when the RICE is operating at a 90% load or 

higher. 

34. All emission control equipment shall be appropriately sized for each existing 

2SLB RICE. Immediately following installation of each emission control device, Kerr-McGee 

shall operate and maintain each existing 2SLB RICE and associated emission control and related 

equipment according to all manufacturer’s written instructions or procedures necessary to 

achieve the emission reductions listed in Paragraphs 32 and/or 33. Oxidation catalysts shall be 

operated in accordance with Regulation No. 7, Section XVI. 

35. Kerr-McGee shall conduct an initial emission test on each existing 2SLB RICE to 

demonstrate compliance with the control requirements of Paragraphs 32 and/or 33 pursuant to 

the Test Protocols set forth in Appendix D. Such initial emission tests shall be conducted no 

later than 60 Days after installation of the emission control equipment and startup of each 

existing 2SLB RICE. 

36. If any emission control equipment fails to meet the control requirements of 

Paragraphs 32 and/or 33, Kerr-McGee shall take appropriate steps to correct such noncompliance and retest the emission control equipment no later than 30 Days after the initial 

emission test. Kerr-McGee shall submit a report to CDPHE no later than 30 Days after each 

such retest. The retest report will include a summary of the steps taken to comply with the 

control requirements of Paragraphs 32 and/or 33, and the retest results. 

37. Upon successful demonstration that the emission control equipment has met the 

control requirements of Paragraphs 32 and/or 33, Kerr-McGee shall thereafter operate and 

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maintain the emission control equipment to meet those requirements in accordance with the 

Operation and Maintenance Plan (“O&M Plan”) Kerr-McGee submits for approval to CDPHE. 

Kerr-McGee shall submit a proposed O&M Plan to CDPHE no later than 60 Days after a 

successful test or retest. 

38. Kerr-McGee shall apply to CDPHE for a construction permit and amend its 

existing Title V Permit for each facility to incorporate the use of the emission control equipment 

required by this Section IV.C., as well as the applicable performance, monitoring and reporting 

requirements. Kerr-McGee shall submit such applications for each facility no later than 60 Days 

after the date of the last compliance demonstration for the last affected 2SLB RICE at each such 

facility. 

39. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section IV.C., 

and any applicable regulatory requirements, and shall report the status of its compliance with 

these requirements in its Annual Reports, submitted pursuant to Section XII (Reporting 

Requirements). 

D. COMPRESSOR ENGINES IN THE UINTA BASIN 

Existing RICE in the Uinta Basin 

40. By no later than December 15, 2007, Kerr-McGee shall install and operate 

oxidation catalysts on each RICE operating in the Uinta Basin with a nameplate rating of 500 

horsepower (“hp”) or greater listed in Appendix E (all of which Kerr-McGee represents are 

located at HAP minor sources). 

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41. The oxidation catalysts installed on each RICE listed in Appendix E shall achieve 

a 93% destruction efficiency for CO when each RICE is operating at a 90% load or higher. 

42. Immediately following installation of each oxidation catalyst, Kerr-McGee shall 

operate and maintain each RICE and oxidation catalyst according to the catalyst manufacturer’s 

written instructions or procedures necessary to achieve the emission reductions listed in 

Paragraph 41. 

43. Kerr-McGee shall conduct an initial emissions test of each oxidation catalyst to 

demonstrate compliance with the CO destruction efficiency specified in Paragraph 41 using a 

portable analyzer in accordance with the Test Protocol set forth in Appendix F. An initial 

emissions test on each oxidation catalyst installed pursuant to the requirements of Paragraph 40 

shall be completed no later than 60 Days after the last oxidation catalyst installation on the RICE 

listed in Appendix E. 

44. If any oxidation catalyst fails to meet the destruction efficiency specified in 

Paragraph 41, Kerr-McGee shall take appropriate steps to correct such non-compliance and retest 

the oxidation catalysts within 30 Days after the initial test(s). Kerr-McGee shall submit a report 

to EPA no later than 30 Days after each retest. The retest report will include a summary of the 

steps taken to comply with the control requirement in Paragraph 41 and the retest results. 

45. Upon successful demonstration that an oxidation catalyst has met the destruction 

efficiency as specified in Paragraph 41, Kerr-McGee shall thereafter test the oxidation catalyst 

emission control efficiency on a semi-annual calendar-year basis using a portable analyzer in 

accordance with the Test Protocol set forth in Appendix F. 

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46. Kerr-McGee shall report to EPA in writing concerning all activities completed 

pursuant to the preceding Paragraphs 40 through 45. Such report shall be submitted no later than 

60 Days after the initial test deadline contained in Paragraph 43. The report shall contain the 

following information applicable to each RICE: 

a. RICE make, model, nameplate hp rating, location, installation date (when 

available) and manufacturer emission data; 

b. catalyst make, model, installation date and manufacturer emission data; 

c. initial emission test results including dates and times of test runs, names of 

employee(s) or contractor(s) who conducted the test, and oxygen (O2) and 

CO concentration results at the inlet and outlet of the oxidation catalyst for 

each run; the percent reduction of CO achieved for each test run after 

normalizing CO concentration to a dry basis and to 15% oxygen; length of 

run times, and average percent engine load during each run; 

d. a catalyst maintenance log (e.g., date of last catalyst replacement, number 

of engine operating hours since last catalyst replacement, and date and 

description of any catalyst maintenance activities); and 

e. a certification pursuant to Paragraph 112 of the information contained in 

the report in accordance with Section XII (Reporting Requirements). 

47. All subsequent semi-annual test results shall be included in Annual Reports to be 

submitted by Kerr-McGee regarding the RICE listed in Appendix E, as required by Section XII 

(Reporting Requirements), and shall include the information set forth in the preceding Paragraph 

46. 

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48. If otherwise required by applicable regulations implementing the Act, KerrMcGee shall apply for a permit for any RICE in Appendix E prior to termination of the Consent 

Decree. 

New RICE in the Uinta Basin at HAP Minor Sources 

49. Beginning on the date of the lodging of this Consent Decree, and continuing for 

so long as this Consent Decree is in effect, any new RICE with a nameplate rating of 500 hp or 

greater installed by Kerr-McGee at any facility in the Uinta Basin shall be lean-burn or achieve 

comparable emission reductions, and be equipped with catalyst controls. 

50. For those RICE installed by Kerr-McGee in the Uinta Basin, the oxidation 

catalysts that are required to be installed pursuant Paragraph 49 shall achieve a 93% destruction 

efficiency for CO when each RICE is operating at a 90% load or higher. 

51. By no later than 60 Days following the installation of a catalyst on any new RICE 

pursuant to Paragraph 49, Kerr-McGee shall conduct an initial emissions test of such catalyst to 

demonstrate compliance with the destruction efficiency specified in Paragraph 50, using a 

portable analyzer in accordance with the Test Protocol set forth in Appendix F. 

52. If the catalyst fails to meet the destruction efficiency as specified in Paragraph 50, 

Kerr-McGee shall take appropriate steps to correct such non-compliance and retest the oxidation 

catalyst within 30 Days after the initial test. Kerr-McGee shall submit a report to EPA no later 

than 30 Days after each retest. The retest report shall include a summary of the steps taken to 

comply and the retest results. 

53. Upon successful demonstration that the catalyst has met the destruction efficiency 

specified in Paragraph 50, Kerr-McGee shall thereafter test the oxidation catalyst emission 

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control efficiency on a semi-annual calendar-year basis using a portable analyzer in accordance 

with the Test Protocol set forth in Appendix F. 

54. Kerr-McGee shall submit a report to EPA within 60 Days after each initial test is 

performed pursuant to Paragraph 51. The report shall contain the initial test results and the 

following information applicable to each RICE: 

a. RICE make, model, nameplate hp rating, location, installation date and 

manufacturer emission data; 

b. catalyst make, model, installation date and manufacturer emission data; 

c. initial emission test results including date and times of test runs, name(s) 

of employee(s) or contractor(s) who conducted the test, and O2 and CO 

concentration results at the inlet and outlet of the oxidation catalyst for 

each run; the percent reduction of CO achieved for each test run after 

normalizing CO concentration to a dry basis and to 15% oxygen; length of 

run times, and percent engine load at each run; 

d. a certification pursuant to Paragraph 112 of the information contained in 

the report in accordance with Section XII (Reporting Requirements). 

55. Kerr-McGee shall include all subsequent semi-annual results in the Annual 

Report submitted pursuant to Section XII (Reporting Requirements), as well as the information 

gathered pursuant to the preceding Paragraph 54, and a catalyst maintenance log (e.g., date of 

last catalyst replacement, number of engine operating hours since last catalyst replacement, and 

date and description of any catalyst activities). 

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56. If otherwise required by applicable regulations implementing the Act, KerrMcGee shall apply for a permit for any new RICE subject to this Section IV.D. prior to 

termination of the Consent Decree. 

57. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section IV. D., 

and shall report the status of its compliance with these requirements in its Annual Reports 

submitted pursuant to Section XII (Reporting Requirements). 

E. PNEUMATIC CONTROLLERS 

Existing High-Bleed Pneumatic Controllers 

58. Retrofits: Kerr-McGee shall retrofit all “high-bleed” Pneumatic Controllers 

listed in Appendices G and H, with “low-bleed” Pneumatic Controllers, in accordance with the 

requirements of this Section IV.E. For purposes of this Consent Decree, a “high-bleed” 

Pneumatic Controller is any Pneumatic Controller that has the capacity to bleed in excess of six 

standard cubic feet of natural gas per hour (50,000 scf/year) in normal operation. During the 

performance of such work Kerr-McGee shall, to the extent practicable, repair or replace leaking 

gaskets, tubing fittings and seals, and all work will be completed so as to minimize potential 

emissions associated with the retrofitting project. 

59. By no later than September 30, 2007, Kerr-McGee shall install retrofit “lowbleed” Pneumatic Controllers on at least one-half of the high-bleed Pneumatic Controllers listed 

in Appendix G, and on at least one-half of the high-bleed Pneumatic Controllers listed in 

Appendix H. 

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60. Kerr-McGee shall install retrofit “low-bleed” Pneumatic Controllers on the 

remainder of the high-bleed Pneumatic Controllers listed in Appendices G and H by no later than 

May 31, 2008. 

61. Replacements: By no later than two years after the date of lodging of this 

Consent Decree, Kerr-McGee shall replace no less than 370 additional high-bleed Pneumatic 

Controllers that were not amenable to retrofit with low or no-bleed Pneumatic Controllers in the 

Wattenberg Gas Gathering System, and as many more such high-bleed Pneumatic Controllers as 

may be replaced at a total cost of $500,000 (inclusive of both capital and installation costs). 

62. Within 60 Days after the retrofit of Pneumatic Controllers listed in Appendices G 

and H is completed, and within 60 Days after the replacement of Pneumatic Controllers required 

by Paragraph 61, Kerr-McGee shall provide EPA, and as applicable CDPHE, a report that 

certifies the completion of each such project and an accompanying spreadsheet that identifies 

each unit retrofitted or replaced, its site location, its service, the date the retrofit or replacement 

was completed, the estimated bleed rate reductions and corresponding estimates of both annual 

VOC reductions (on a calendar-year basis) and the amount of natural gas conserved, and the 

approximate cost of each retrofit and replacement. 

New Construction 

63. Beginning on the date of the lodging of this Consent Decree, and continuing 

through January 1, 2017, Kerr-McGee shall install and operate low or no-bleed Pneumatic 

Controllers to conserve natural gas at all newly constructed facilities in the Uinta Basin and D-J 

Basin, where instrument air is not otherwise available. Kerr-McGee need not, however, install 

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low or no-bleed controllers at sites for which Kerr-McGee can demonstrate that the use of low or 

no-bleed pneumatic devices would not be technically or operationally feasible. 

64. Kerr-McGee shall have implemented the mandatory management directive 

(Appendix I) which requires the use of low-bleed Pneumatic Controllers at all newly constructed 

facilities in the D-J and Uinta Basins. 

65. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section IV. E., 

and shall report the status of its compliance with these requirements, in its Annual Reports 

submitted pursuant to Section XII (Reporting Requirements). 

F. SULFUR REMOVAL TECHNOLOGY IN THE UINTA BASIN 

66. Beginning on the date of lodging of this Consent Decree and continuing for so 

long as this Consent Decree is in effect, Kerr-McGee shall install and operate solid-bed or liquidbed sulfur removal processes when necessary to remove hydrogen sulfide (“H2S”) from natural 

gas in the Uinta Basin, in lieu of amine-based sulfur removal with flaring of removed H2S. 

67. Kerr-McGee shall provide written notice to EPA no later than 60 Days following 

each installation and startup of a liquid-bed sulfur removal unit under Paragraph 66. Such notice 

shall include a description and the location of all liquid-bed sulfur removal equipment installed, 

an estimate of the annual amount of SO2 emissions to be avoided (on a calendar-year basis), and 

a summary spreadsheet showing service conditions and actual capital costs. 

68. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section IV. F., 

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and shall report the status of its compliance with these requirements in its Annual Reports 

submitted pursuant to Section XII (Reporting Requirements). 

V. ADMINISTRATIVE REQUIREMENTS 

A. PLATTEVILLE FACILITY 

69. Within 30 Days after the date of lodging of this Consent Decree, Kerr-McGee 

shall submit for CDPHE’s approval and incorporation as a requirement of Colorado Construction 

Permit No. 02WE0126 an operation and maintenance (“O&M”) plan for the reboiler that 

controls VOC emissions from the amine gas treatment system at the Platteville Facility. 

70.	 Kerr-McGee’s O&M plan shall: 

a. Provide a routine program to minimize soot build-up of the reboiler 

burner; 

b. Incorporate the burner manufacturer’s written instructions or procedures 

necessary to ensure proper combustion; and 

c. Conform to applicable requirements of CDPHE’s AQCC Common 

Provisions Regulation, AQCC’s Regulation Nos. 1, 2, 3, and 6, and 40 

C.F.R. Part 60, Subparts A and Dc. 

71. CDPHE shall either approve Kerr-McGee’s plan or provide written comments and 

requested changes within 30 Days of submission of the plan. Kerr-McGee shall have an 

additional 30 Days from receipt of CDPHE’s written response to either amend the plan and 

resubmit it to CDPHE, or to begin implementation of O&M in accordance with the approved 

plan. Upon CDPHE’s approval, the O&M plan shall become an enforceable requirement of 

Colorado Construction Permit No. 02WE0126. 

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B. FORT LUPTON FACILITY 

72. Within 30 Days after the date of lodging of this Consent Decree, Kerr-McGee 

shall propose to CDPHE a consolidated annual allowable VOC emission limit for equipment 

leaks from components at the Fort Lupton Facility that are in VOC hydrocarbon service as 

described at 40 C.F.R. § 60.632(f). The following sources of VOC emissions shall be subject to 

such consolidated emission limit: 

a. Equipment leaks from those components of the Fort Lupton Facility 

subject to Condition 6.1 of CDPHE Operating Permit No. 95OPWE013 

(30.8 TPY); and 

b. Equipment leaks from components of the natural gas liquids (“NGL”) 

extraction unit subject to Condition 2 of CDPHE Construction Permit No. 

00WE0583 (46.4 TPY). 

73. Kerr-McGee’s proposal to CDPHE shall be made as an application to amend the 

Title V Permit for the Fort Lupton facility. The Parties agree that incorporation of this 

requirement into the Title V Permit for the Fort Lupton facility may be made by “administrative 

amendment” under 40 C.F.R. § 70.7(d) and corresponding State Title V rules, where allowed by 

State law. CDPHE shall administer Kerr-McGee’s application as a routine application for a 

Title V permit amendment. Until such time as CDPHE has taken final agency action with regard 

to such application, Kerr-McGee shall comply with the following interim emission limit for the 

Fort Lupton Facility, consistent with applicable EPA guidance on appropriate emission factors 

and control percentages for components in hydrocarbon service at facilities with quarterly leak 

detection and repair (“LDAR”) programs in place: 77.2 TPY of VOCs during any 12-month 

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period (on a rolling basis) from equipment leaks at the Fort Lupton Facility subject to the 

requirements of 40 C.F.R. Part 60, Subpart KKK and Regulation No. 7. For the purpose of 

demonstrating compliance with this interim emission limit, emissions shall be calculated in 

accordance with the methodology contained in Appendix J. 

VI. LIMITS ON POTENTIAL TO EMIT 

74. The control requirements established in Sections IV.A. (Low-Emission 

Dehydrators), IV.B. (Condensate Storage Tanks), IV.C. (Compressor Engines in the D-J Basin), 

IV.D. (Compressor Engines in the Uinta Basin) and IV.E. (Pneumatic Controllers), under this 

Consent Decree shall be considered “federally enforceable” and, as applicable, “legally and 

practicably enforceable” for purposes of calculating the PTE of a source or facility as may be 

applicable under the Act and the Colorado Act and any implementing federal or Colorado 

regulations. 

75. The PTE for VOCs from Low-Emission Dehydrators installed and certified 

pursuant to this Consent Decree at any facility in the Uinta or D-J Basins shall be limited by the 

control requirements set forth in Section IV.A. (Low-Emission Dehydrators), and shall be 

federally enforceable on that basis. 

76. The PTE for VOC emissions from condensate storage tanks at the Cottonwood 

Wash Facility and Ouray Facility shall be limited by the requirement that such emissions will be 

controlled by a flare, VRU, or other non-flare alternatives pursuant to the criteria set forth in 

Section IV.B. (Condensate Storage Tanks) and shall be federally enforceable on that basis. 

77. The PTE for CO and formaldehyde for all RICE in the Uinta Basin with a 

nameplate rating of 500 hp or greater shall be limited by the requirement that emissions be 

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controlled by catalysts which meet a destruction efficiency for CO set forth in Paragraphs 41 and 

50 and shall be federally enforceable on that basis. 

78. The PTE for CO for the eleven 2SLB RICE in the D-J Basin shall be limited by 

the requirements of Section IV.C. (Compressor Engines in the D-J Basin) that such emissions 

will be controlled by oxidation catalysts which meet the control requirements set forth in 

Paragraph 33 and shall be federally enforceable on that basis. 

79. The PTE for NOx for the 2SLB RICE at the Frederick, Dougan and Hudson 

Facilities shall be limited by the requirement that equipment be upgraded for purposes of 

reducing emissions which meet the control requirements set forth in Paragraph 32 and shall be 

federally enforceable on that basis. 

VII. AMBIENT AIR MONITORING 

80. By no later than six months after entry of this Consent Decree, Kerr-McGee shall 

fund the purchase, installation and initial operation of ambient air quality and meteorological 

monitoring station(s) in and/or adjacent to the Uinta Basin, subject to a $300,000 cap on KerrMcGee’s total expenditures to comply with this Section VII. The ambient air quality monitor(s) 

shall be designed to monitor ozone, NOx and PM2.5 concentrations. The meteorological 

station(s) shall have a 10 meter tower and be designed to monitor wind speed, wind direction, 

temperature and solar radiation. The station(s) shall be designed to gather multilevel 

meteorological data necessary for use in air quality monitoring under current federal and state 

laws and regulations. 

81. Kerr-McGee shall work cooperatively with EPA, the Utah Department of 

Environmental Quality (UDEQ) and the Ute Indian Tribe of the Uintah and Ouray Reservation 

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(the “Northern Ute Tribe”) regarding the location of monitor(s), schedule for project 

implementation and coordination of their initial operation. The station(s) shall meet the siting, 

methodology and operational requirements of 40 C.F.R. Part 58, and shall be sited in a 

representative location upwind of the Uinta Basin and/or a representative central location within 

the Uinta Basin. Additional guidance for meteorological monitoring is contained in “Quality 

Assurance Handbook for Air Pollution Measurement Systems, ” Vol. IV, “Meteorological 

Measurements.” Actual monitoring site selection shall be subject to approval by EPA and KerrMcGee, after review and comment on proposed locations by the UDEQ and the Northern Ute 

Tribe. All monitoring data shall be collected in a manner reasonably calculated to meet EPA’s 

quality assurance/quality control (“QA/QC”) requirements of 40 C.F.R. Part 58, App. A. 

Additional guidance is provided in “Quality Assurance Handbook for Air Pollution 

Measurement Systems.” 

82. Subject to a $300,000 cost cap, Kerr-McGee shall fund the operation and 

maintenance of up to two (2) stations, and the collection and distribution of monitoring data for 

the station(s) until Kerr-McGee has expended $300,000 in capital, installation, operation and 

maintenance costs. Kerr-McGee shall certify in accordance with Paragraph 112 that it has 

expended $300,000 in capital, installation, operation and maintenance costs for up to two (2) 

stations. 

VIII. MULTI-PHASE PIPING/TANKLESS WELL-SITE PILOT PROJECT 

83. Kerr-McGee shall complete a study of the technical and operational feasibility of 

using a system to gather multi-phase fluids (liquid and gas constituents) from multiple producing 

natural gas well-sites for collection, separation and metering at a central facility in the Uinta 

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Basin (“Feasibility Study”), and if technically and operationally feasible, shall implement a pilot 

project to demonstrate such technology in the Uinta Basin (“Multi-Phase Pilot”), in accordance 

with the requirements of this Section VIII. The Feasibility Study and Multi-Phase Pilot shall 

focus on a proposed system to: (i) eliminate the storage of hydrocarbon liquids and produced 

water at individual wellhead facilities within the system; and (ii) reduce emissions of VOCs from 

condensate storage tanks to be located at a central collection point. Subject to the cost cap set 

forth in Paragraph 86, the Multi-Phase Pilot shall include: (i) at least sixteen new or existing 

well pads and multi-phase piping from those well pads to a central collection point; and (ii) 

separation, liquid storage, gas metering equipment, and VOC emission control or capture, to the 

extent emissions are not otherwise prevented through process changes. 

84. Feasibility Study: Kerr-McGee shall complete the Feasibility Study in 

accordance with the scope of work (“FS SOW”) attached as Appendix K. No later than 90 Days 

after the date of lodging this Consent Decree, Kerr-McGee shall submit a written report of the 

conclusions of the Feasibility Study to EPA for review and concurrence. In the event the 

Feasibility Study concludes that the Multi-Phase Pilot is not technically or operationally feasible 

to implement, Kerr-McGee shall have no further obligations under this Section VIII. 

85. Multi-Phase Pilot: If the Multi-Phase Pilot is found to be technically and 

operationally feasible in the Feasibility Study, Kerr-McGee shall submit to EPA for review and 

approval a proposed scope of work (“Multi-Phase Pilot SOW”) to implement the Multi-Phase 

Pilot in a manner consistent with the conclusions of the Feasibility Study. The Multi-Phase Pilot 

SOW shall include an estimate of “Added Incremental Costs,” which for purposes of this Section 

VIII, are defined as the total costs over and above the costs of conventional well-site 

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development, accounting for normal construction. EPA shall either approve the Multi-Phase 

Pilot SOW or provide written comments on requested changes within 30 Days of receipt of such 

Multi-Phase Pilot SOW. Kerr-McGee shall have an additional 30 Days from receipt of EPA’s 

written response to either amend the Multi-Phase Pilot SOW and resubmit it to EPA, or to 

invoke the dispute resolution procedures set forth in Section XV (Dispute Resolution), and EPA 

shall have an additional 30 Days from resubmission to comment upon or approve such revised 

Multi-Phase Pilot SOW. 

86. In the event that Kerr-McGee can document to EPA’s satisfaction, in accordance 

with Paragraph 85, that the Added Incremental Costs of the Multi-Phase Pilot to be implemented 

pursuant to the EPA-approved Multi-Phase Pilot SOW will exceed $750,000, Kerr-McGee shall 

implement the Multi-Phase Pilot at as many well pads as can be funded for $750,000 in Added 

Incremental Costs. In the event that EPA and Kerr-McGee disagree on the total Added 

Incremental Costs, Kerr-McGee shall bear the burden of demonstrating by a preponderance of 

evidence that such costs exceed the $750,000 cost cap. 

87. Kerr-McGee shall provide EPA with semi-annual, calendar-year progress reports, 

beginning 180 Days following EPA’s approval of the Multi-Phase Pilot SOW, documenting 

progress on the Multi-Phase Pilot. The progress report shall include a description of the schedule 

status for engineering, procurement, construction and start up of the Multi-Phase Pilot, and an 

updated estimate of “Added Incremental Costs.” 

88. By no later than 18 months following EPA’s approval of the Multi-Phase Pilot 

SOW, Kerr-McGee shall have installed and begun operation of the Multi-Phase Pilot in 

accordance with the approved Multi-Phase Pilot SOW. 

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89. Within 90 Days of the installation and startup of the Multi-Phase Pilot, KerrMcGee shall provide EPA a final report that includes the following information: 

a. A description of the project as completed, including: (i) a topographic 

area map showing the well pads, multi-phase pipelines, and central liquids 

gathering; (ii) a process description with a summary of gas, condensate 

and water production rates since project startup; (iii) process flow 

diagrams for a typical well pad and for central liquids gathering 

equipment; (iv) a representative condensate liquids sample analysis from a 

well pad and from the outlet of central liquid separation; and (v) the API 

gravity and RVP for such required condensate samples; 

b. A discussion of the operating challenges presented by the Multi-Phase 

Pilot and their means of resolution; 

c. An itemization of the Added Incremental Costs of the project as 

completed; 

d. An itemized estimate of both incremental added and saved operating costs 

compared to conventional gas gathering methods; and 

e. A description of air quality and other environmental benefits attributable 

to the project, together with any calculations and process simulations used 

to estimate air emission reductions and natural gas conserved. 

90. General Record-Keeping Requirement: Kerr-McGee shall maintain records and 

information adequate to demonstrate its compliance with the requirements of this Section VIII, 

and any applicable regulatory requirements, and shall report the status of its compliance with 

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these requirements in its Annual Reports until the Multi-Phase Pilot is fully implemented and 

operating, as set forth in Section XII (Reporting Requirements). 

IX. PERFORMANCE OPTIMIZATION REVIEW 

91. Within one year after the date of lodging of this Consent Decree, Kerr-McGee 

shall complete a Performance Optimization Review (“POR”) to increase energy efficiency and 

enhance product recovery at five facilities in the Uinta Basin and five facilities in the D-J Basin 

in accordance with the Scope of Work attached as Appendix L. The five facilities in the Uinta 

Basin shall consist of four well-site facilities (two shall be at least five years old, one shall be 

less than five years old, and one shall be a new drill) and one (1) compressor station. The five 

facilities in the D-J Basin will consist of four well-site facilities (two shall be at least ten years 

old, one shall be less than ten years old, and one shall be a new drill) and the Platteville Facility. 

92. Kerr-McGee’s POR shall be performed by third-party consultants acceptable to 

EPA and CDPHE. Performance of the POR may be temporarily suspended during entry 

pursuant to Paragraph 140. 

93. The scope of the POR is expressly limited to the following activities, as set forth 

in the POR SOW: 

a. Pressure Relief Devices - repair or replace components, as appropriate, to 

specifically reduce product losses; 

b. Pneumatic Controllers - evaluate for use of low-bleed devices or 

instrument air; 

c. Production Separators - identify optimal pressures and temperatures, and 

reset as needed; 

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d. Dehydrators - evaluate for use of condensers, flares, flash tanks and 

electric pumps to reduce product losses; 

e. Internal Combustion Engines - evaluate maintenance practices and 

planned shutdown procedures to minimize product losses from blow down 

and the use of starter gas; 

f. Flare and Vent Systems - evaluate flare and vent system components and 

associated operating procedures to reduce the loss of product, where 

possible; 

g. Producing Wells - install plunger lifts and perform “green completion” 

practices on new wells, as appropriate; 

h. Operating Pressures - review and optimize, where possible; and 

i. Component Inspections and Repairs - perform component inspections 

using OVA, TVA, or other CDPHE-approved leak detection field 

equipment and repair or replace leaking components, as appropriate, to 

enhance product recovery. 

94. POR Reports. Within 60 Days of completion of the POR, Kerr-McGee shall 

submit a POR Report to EPA for the Uinta Basin and a POR Report to CDPHE for the D-J Basin 

which shall include: 

a. the contractor(s) used to conduct the POR; 

b. the name, location and original construction date of each of the well-site 

facilities and the compressor station at which the POR was completed; 

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c. a general description of the components by type and service that were 

inspected, how they were inspected, a summary and description of any 

repairs made, an estimate of natural gas conserved as a result of the repairs 

to the extent quantifiable, and the repair cost; 

d. a general description of the pressure relief devices that were inspected, 

how they were inspected, a summary description of any repairs made, an 

estimate of natural gas conserved as a result of the repairs to the extent 

quantifiable, and the repair cost; 

e. an evaluation of pneumatic devices for use of low-bleed devices or 

instrument air, and potential product losses avoided; 

f. a description of the review of production separators, identification of those 

for which optimal pressures and temperatures were calculated and how 

that was done; a comparison of those values to prior separator operating 

conditions, a summary of the adjustments to pressures or temperatures that 

were made, an estimate of the amount of natural gas conserved as a result, 

and the cost if significant, to adjust pressures and temperatures; 

g. a description of the evaluation of dehydrators for the use of condensers, 

flares, flash tanks, and electric pumps; a summary of the projects 

identified as a result of such review for possible future implementation by 

Kerr-McGee on a voluntary basis; if sufficient data exists to prepare an 

estimate, an estimate of the amount of natural gas potentially conserved if 

such projects were implemented, and the cost to implement such projects; 

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h. a description of the review of RICE shutdown procedures to reduce blow 

down and the use of starter gas; a summary of any changes that were made 

based on such review; an estimate of product losses avoided as a result of 

any changes made, if reasonably capable of estimation; and the cost to 

implement such changes; 

i. a description of the review of flare and vent systems, a summary of the 

repairs made, if any; an estimate of the amount of natural gas conserved as 

a result of repairs made, and the cost to implement such repairs; 

j. a list of well names and locations at which plunger lift systems were 

installed, if any, or at which green completion procedures were followed; 

a description of any plunger lift system(s) used and the well condition(s) 

that made such system(s) practicable or how new well completion 

procedures were “green”; an estimate of the amount of natural gas 

conserved as a result of POR evaluations of certain producing wells, and 

the cost to implement any such systems and/or procedures; and 

k. a description of how operating pressures were evaluated and, where 

possible, optimized; an estimate of the amount of natural gas conserved as 

a result of such evaluation, and an estimate of the cost, if non-negligible, 

to optimize operating pressures. 

95. Within 120 Days of completion of the POR, Kerr-McGee may identify in writing 

to EPA, and as applicable CDPHE, any areas of non-compliance with the Act and the Colorado 

Act (including federal and state implementing regulations) that are discovered during the POR. 

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Under this Paragraph, for other than PSD/NSR, Kerr-McGee shall include in its written 

submission: (1) a certification pursuant to Paragraph 112 that it has subsequently complied with 

all applicable statutory and regulatory requirements, or it shall propose a schedule for coming 

into compliance; (2) a description of the corrective measures taken, or proposed to be taken; and 

(3) a proposed calculation of any economic benefit pursuant to the EPA Stationary Source Civil 

Penalty Policy and BEN Model. EPA and/or CDPHE will review Kerr-McGee’s certifications, 

and/or proposed schedule for compliance, corrective measures, and economic benefit 

calculation(s), and will respond with written concurrence or comments. In the event that EPA 

and/or CDPHE do not approve of the proposed corrective measures or economic benefit 

calculation(s), each, as applicable, will respond with written comments. Should EPA and/or 

CDPHE still not agree with the economic benefit calculation(s), EPA and/or CDPHE’s 

independent economic benefit calculations shall be final and payable. If necessary, the Parties 

will address any PSD/NSR violations as a new and separate enforcement action. Kerr-McGee’s 

release from liability as specified in Section XVII (Effect of Settlement/Reservation of Rights) 

for the areas of non-compliance identified and corrected pursuant to this Section IX will take 

effect upon the Plaintiffs’ written concurrence with Kerr-McGee’s certification and its payment 

in full of any economic benefit. Any areas of non-compliance discovered by EPA or CDPHE, 

and any disclosures by Kerr-McGee beyond this specific 120-Day period, are not covered by this 

provision. 

X. CIVIL PENALTY 

96. Within 30 Days after the Effective Date of this Consent Decree, Kerr-McGee 

shall pay to the Plaintiffs a total civil penalty pursuant to Section 113 of the Act, 42 U.S.C. § 

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7413, in the amount of $200,000, with interest accruing from the date on which the Consent 

Decree is entered by the Court at the rate specified in 28 U.S.C. § 1961 as of the date of entry. 

97. Federal Payment Instructions: Of the total amount of the civil penalty, KerrMcGee shall pay $150,000 to the United States. Kerr-McGee shall make payment by Electronic 

Funds Transfer (“EFT”) to the United States Department of Justice (“DOJ”), in accordance with 

current EFT procedures, referencing the United States Attorney’s Office (“USAO”) File Number 

and DOJ Case Number 90-5-2-1-08656. Payment shall be made in accordance with instructions 

provided by the USAO for the District of Colorado. Any funds received after 11:00 a.m. 

(EST/EDT) shall be credited on the next business Day. Kerr-McGee shall provide notice of 

payment, referencing the USAO File Number, DOJ Case Number 90-5-2-1-08656 and the civil 

case name and case number, to DOJ and to EPA, as provided in Section XX (Notices). 

98. State Payment Instructions: Of the total amount of the civil penalty, Kerr-McGee 

shall pay $50,000 to the State. Kerr-McGee shall make payment by certified, corporate or 

cashier’s check drawn to the order of “Colorado Department of Public Health and Environment” 

and delivered to the attention of Legal Administrative Specialist, Air Pollution Control Division, 

4300 Cherry Creek Drive South, APCD-SS-B1, Denver, CO 80246-1530. Kerr-McGee shall 

provide notice of payment, referencing USAO File Number and DOJ Case Number 

90-5-2-1-08656, and the civil case name and case number, to CDPHE, as provided in Section 

XX (Notices). 

99. No amount of the civil penalty to be paid by Kerr-McGee shall be used to reduce 

its federal or Colorado tax obligations. 

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XI. SUPPLEMENTAL ENVIRONMENTAL PROJECTS 

A. Uintah County Road Dust SEP 

100. Subject to approval by the Uintah County Commissioners, Kerr-McGee shall 

implement a Supplemental Environmental Project (“SEP”), to improve a portion of a County 

Road in Uintah County, Utah, in the Uinta Basin, to reduce particulate matter (road dust), in 

accordance with the provisions of Appendix M (the “Road Dust SEP”). The Road Dust SEP 

shall be completed within 12 months after entry of this Decree. In implementing the Road Dust 

SEP, Kerr-McGee shall spend not less than $100,000 in eligible Road Dust SEP costs. Eligible 

Road Dust SEP costs include the costs of planning and implementing the Road Dust SEP, or 

contracting for the work through the Uintah County Roads Department. 

101. Kerr-McGee is responsible for the satisfactory completion of the Road Dust SEP 

in accordance with the requirements of this Consent Decree. Kerr-McGee may use contractors 

or consultants in planning and implementing the Road Dust SEP or coordinating such planning 

and implementation by the Uintah County Roads Department. “Satisfactory completion” means 

completion of the work in accordance with all work plans and specifications for the project and 

expenditure of not less than $100,000. 

B. Accelerated Vehicle Retirement State SEP 

102. No later than 30 Days after the Effective Date of this Consent Decree, KerrMcGee shall implement a SEP to reduce air pollution from high-emitting vehicles in the Denver 

metropolitan area (the “Accelerated Vehicle Retirement State SEP”) by transferring $150,000 

(“SEP Funds”) to the Regional Air Quality Council (“RAQC”). The criteria, terms and 

procedures for the Accelerated Vehicle Retirement State SEP are described in Appendix N. The 

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transfer of funds to the RAQC shall be by certified, corporate or cashiers check made payable to 

the Regional Air Quality Council and delivered to the attention of Steve McCannon, Program 

Manager, Regional Air Quality Council, 1445 Market St., Suite 260, Denver, CO 80202. Prior 

to transferring the funds, Kerr-McGee shall obtain a written statement from the RAQC 

acknowledging and agreeing that the RAQC will expend the SEP Funds to implement the 

Accelerated Vehicle Retirement State SEP in accordance with the criteria, terms and procedure 

described in Appendix N. Within 10 days of transferring the SEP Funds, Kerr-McGee will 

provide a copy of the check and the RAQC’s written statement to CDPHE. 

C. General Requirements 

103. With regard to both the Road Dust SEP and the Accelerated Vehicle Retirement 

State SEP, Kerr-McGee certifies the truth and accuracy of each of the following: 

a. that, as of the date of executing this Decree, Kerr-McGee was not required 

to perform or develop either SEP by any federal, state, or local law or 

regulation and was not required to perform or develop the SEPs by prior 

agreement, grant, or as injunctive relief awarded in any other action in any 

forum; 

b. that neither SEP is a project that Kerr-McGee was planning or intending to 

construct, perform, or implement other than in settlement of the claims 

resolved in this Decree; 

c. that Kerr-McGee has not received and will not receive credit for either 

SEP in any other enforcement action by a government entity; and 

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d. that Kerr-McGee will not receive any reimbursement for any portion of 

the SEP costs from any other person. 

104. SEP Completion Reports: Within 30 Days after the date set for completion of 

each SEP, Kerr-McGee shall submit a SEP Completion Report to the United States, and with 

regard to the Accelerated Vehicle Retirement State SEP also to CDPHE, in accordance with 

Section XIX (Notices) of this Consent Decree. The SEP Completion Reports shall contain the 

following information: 

a. a detailed description of the SEP, as implemented; 

b. a description of any problems encountered in completing the SEP and the 

solutions thereto; 

c. an itemized list of all eligible SEP costs; 

d. certification pursuant to Paragraph 112 that the SEP has been fully 

implemented pursuant to the provisions of this Decree; and 

e. a description of the air quality benefits resulting from implementation of 

the SEP, including an estimate of associated emission reductions. 

105. EPA, or as applicable CDPHE, may require information in addition to that 

described in the preceding Paragraph 104, which is reasonably necessary to determine 

satisfactory completion of the SEPs or eligibility of SEP costs. Kerr-McGee shall provide such 

additional information to which it has access. 

106. Within 60 Days after receiving each SEP Completion Report, the United States 

and/or CDPHE shall notify Kerr-McGee whether the SEP at issue has been satisfactorily 

completed. If a SEP has not been satisfactorily completed in accordance with all applicable 

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work plans and schedules, or if the amount expended on performance of a SEP is less than the 

amount set forth in Paragraphs 100 and 102, stipulated penalties may be assessed under Section 

XIII (Stipulated Penalties) of this Consent Decree. 

107. Disputes concerning the satisfactory completion of a SEP and the amount of 

eligible SEP costs may be resolved under Section XV (Dispute Resolution) of this Consent 

Decree. No other disputes arising under this Section shall be subject to Dispute Resolution. 

108. Each submission required under this Section shall be signed by an official with 

knowledge of the SEP and shall bear the certification language set forth in Paragraph 112. 

109. Any public statement by Kerr-McGee making reference to either SEP, whether 

oral or written, in print, film, or other media, shall include the following language: “This project 

was undertaken in connection with the settlement of an enforcement action taken on behalf of the 

U.S. Environmental Protection Agency and/or the State of Colorado for alleged violations of the 

Clean Air Act and/or the Colorado Air Pollution Prevention and Control Act.” 

XII. REPORTING REQUIREMENTS 

110.	 Kerr-McGee shall submit the following reports: 

a. All initial performance test results, retest reports, initial status reports, 

progress reports, final reports, notices, and monitoring data pursuant to 

any specific requirement of this Consent Decree for each annual reporting 

period (not a cumulative requirement). 

b. By no later than March 1 of each year, Kerr-McGee shall submit an 

Annual Report for the preceding calendar year to EPA, and for any 

matters involving the D-J Basin also to CDPHE. Kerr-McGee shall 

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provide a paper and electronic copy of each Annual Report to EPA and, as 

applicable, CDPHE. The Annual Report shall: (i) describe all work or 

other activities that Kerr-McGee performed pursuant to any requirement 

of this Consent Decree during the applicable reporting period; (ii) transmit 

any specific (non-annual) reports to be included in an Annual Report; (iii) 

describe compliance status; and (iv) describe any non-compliance with the 

requirements of this Consent Decree and explain the likely cause(s) of the 

violation(s) and the remedial steps taken, or to be taken, to prevent or 

minimize such violation(s). 

c. If Kerr-McGee violates, or has reason to believe that it may violate, any 

requirement of this Consent Decree, Kerr-McGee shall notify EPA, and as 

applicable CDPHE, of such violation(s), and its likely duration, in writing, 

within 10 Days of the Day Kerr-McGee first becomes aware of the 

violation(s), or potential violation(s), with an explanation of the likely 

cause of such violation(s) and the remedial steps taken, or to be taken, to 

prevent or minimize such violation(s) should it occur. If the cause of a 

violation cannot be fully explained at the time the notification is due, 

Kerr-McGee shall state this in the notice, investigate the cause of each 

such violation in the event that it occurs, and submit a full written 

explanation of the cause of the violation within 30 Days of the date that 

Kerr-McGee determines such cause. Nothing in this Paragraph relieves 

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Kerr-McGee of its obligation to provide the notice required by Section 

XIV (Force Majeure). 

111. All reports shall be submitted to the persons designated in Section XIX (Notices) 

of this Consent Decree. 

112. Each Annual Report submitted by Kerr-McGee shall be signed by a Responsible 

Official. All other reports or submissions may be signed by a delegated employee representative, 

unless otherwise required by applicable statute or regulation. All reports and submissions shall 

include the following certification: 

I certify under penalty of law that this document and all 

attachments were prepared under my direction or supervision in 

accordance with a system designed to assure that qualified 

personnel properly gather and evaluate the information submitted. 

Based on my inquiry of the person or persons who manage the 

system, or those persons directly responsible for gathering the 

information, the information submitted is, to the best of my 

knowledge and belief, true, accurate and complete. 

113. The reporting requirements of this Section shall continue until termination of this 

Consent Decree; however, upon written agreement by EPA, or as applicable CDPHE, where a 

Consent Decree reporting requirement is added to a final Title V permit or other non-Title V 

permit such that the permit meets or exceeds such Consent Decree reporting requirement, KerrMcGee may fulfill that Consent Decree reporting requirement by notifying EPA, and as 

applicable CDPHE, that the required report has been provided pursuant to a permit requirement, 

and by identifying the relevant permit in Kerr McGee’s Annual Reports, submitted pursuant to 

this Section XII (Reporting Requirements). 

114. Any information provided pursuant to this Consent Decree may be used by the 

United States or as applicable the State in any proceeding to enforce the provisions of this 

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Consent Decree and as otherwise permitted by law, except for disclosures made pursuant to 

Paragraph 95 of this Consent Decree. 

XIII. STIPULATED PENALTIES 

115. Kerr-McGee shall be liable for stipulated penalties to the United States and the 

State for violations of this Consent Decree as specified below, unless excused under Section XIV 

(Force Majeure), or reduced or waived by one or both Plaintiffs pursuant to Paragraph 121 of 

this Decree. A violation includes failing to perform any obligation required by the terms of this 

Decree, including any work plan or schedule approved under this Decree, according to all 

applicable requirements of this Decree and within the specified time schedules established by or 

approved under this Decree. 

a. Low-Emission Dehydrators (Section IV.A.). 

Violation Stipulated Penalty 

1. For failure to provide written notice as 

required by Paragraph 8 per unit per Day. 

For each unit: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,000 per Day thereafter. 

2. For failure to install and operate LowEmission Dehydrators at new facilities as 

required by Paragraph 9. 

For each unit: $1,000 per Day for the first 30 

Days of noncompliance, $1,500 per Day 

from the 31st to 60th Day of noncompliance, 

and $2,000 per Day thereafter. 

3. For failure to provide written notice as 

required by Paragraph 10. 

For each unit: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,000 per Day thereafter. 

4. For failure to maintain records and 

information as required by Paragraph 11. 

For each unit: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,000 per Day thereafter. 

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b. Condensate Storage Tanks (Section IV.B.). 

Violation Stipulated Penalty 

1. For failure to install and operate a 

flare, VRU, or other non-flare 

alternative as required by 

Paragraphs 12, 18, & 20. 

For each unit: $1,000 per Day for the first 30 

Days of noncompliance, $2,500 per Day from 

the 31st to 60th Day of noncompliance, and 

$5,000 per Day thereafter. 

2. For failure to submit a worksheet on 

flare design and certification of 

compliance as required by 

Paragraphs 13, 15, 22, & 24. 

For each unit: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from the 

31st to 60th Day of noncompliance, and $1,000 

per Day thereafter. 

3. For failure to conduct inspections, 

submit reports, maintain records and 

apply to amend Title V permit 

applications as required by 

Paragraphs 16, 17, 19, 25, 26 & 27. 

For each unit: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from the 

31st to 60th Day of noncompliance, and $1,000 

per Day thereafter. 

4. For failure to maintain records and 

information as required by 

Paragraph 28. 

For each unit: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from the 

31st to 60th Day of noncompliance, and $1,000 

per Day thereafter. 

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c. Compressor Engines (Section IV.C. & D.). 

Violation Stipulated Penalty 

1. For failure to install emission 

controls on RICE or alternatively 

replace with new RICE as required 

by the dates set forth in Paragraphs 

30, 31, 40, & 49. 

For each engine: $1,000 per Day for the first 30 

Days of noncompliance, $2,500 per Day from 

the 31st to 60th Day of noncompliance, and 

$5,000 per Day thereafter. 

2. For failure to conduct initial 

performance test on the RICE 

emission controls as required by 

Paragraphs 35, 43, & 51. 

For each engine: $500 per Day for the first 30 

Days of noncompliance, $1,000 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter. 

3. For failure to retest and submit a 

report as required by Paragraphs 36, 

44, & 52. 

For each engine: $500 per Day for the first 30 

Days of noncompliance, $1,000 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter. 

4. For failure to submit an O&M plan 

as required by Paragraph 37. 

$200per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

5. For failure to conduct semi-annual 

tests on RICE emission controls on a 

semi-annual, calendar-year basis as 

required by Paragraphs 45 & 53. 

For each engine: $500 per Day for the first 30 

Days of noncompliance, $1,000 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter. 

6. For failure to submit reports as 

required by Paragraphs 46, 47, 54, & 

55. 

For each report: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from the 

31st to 60th Day of noncompliance, and $1,000 

per Day thereafter. 

7. For failure to maintain records and 

apply to amend Title V permits as 

required by Paragraphs 38, 39, 56 & 

57. 

For each engine: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from the 

31st to 60th Day of noncompliance, and $1,000 

per Day thereafter. 

8 For failure to comply with the NOx 

control requirements and CO 

destruction efficiency required by 

Paragraphs 32 and 33. 

For each engine: $500 per Day for the first 30 

Days of noncompliance, $1,000 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter. 

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d. Pneumatic Controllers (Section IV.E.). 

Violation Stipulated Penalty 

1. For failure to complete the first one- For each project: $500 per Day for the first 30 

half of the Pneumatic Controller Days of noncompliance, $1,000 per Day from 

retrofits as required by Paragraph 59 the 31st to 60th Day of noncompliance, and 

in the Uinta Basin (as one project) 

and in the D-J Basin (as a separate 

project). 

$1,500 per Day thereafter. 

2. For failure to complete all the 

remaining Pneumatic Controller 

retrofits as required by Paragraph 60 

in the Uinta Basin (as one project) 

and in the D-J Basin (as a separate 

project). 

For each project: $500 per Day for the first 30 

Days of noncompliance, $1,000 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter. 

3. For failure to provide a final 

completion report for retrofitting 

Pneumatic Controllers in the Uinta 

Basin and the D-J Basin as required 

by Paragraph 62. 

For each project: $100 per Day for the first 30 

Days of noncompliance, $250 per Day from the 

31st to 60th Day of noncompliance, and $500 per 

Day thereafter. 

4. For failure to replace high-bleed 

Pneumatic Controllers in the D-J 

Basin as required by Paragraph 61. 

$100 per Day for the first 30 Days of 

noncompliance, $250 per Day from the 31st to 

60th Day of noncompliance, and $500 per Day 

thereafter. 

5. For failure to install low or no-bleed 

Pneumatic Controllers at newly 

constructed facilities in the Uinta 

Basin or the D-J Basin as required by 

Paragraph 63. 

For each project: $100 per Day for the first 30 

Days of noncompliance, $250 per Day from the 

31st to 60th Day of noncompliance, and $500 per 

Day thereafter. 

6. For failure to implement Appendix I 

and maintain records as required by 

Paragraphs 64 & 65. 

For each project: $200 per Day for the first 30 

Days of noncompliance, $500 per Day from the 

31st to 60th Day of noncompliance, and $1,000 

per Day thereafter. 

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e. Sulfur Removal Technology (Section IV.F.). 

Violation Stipulated Penalty 

1. For failure to install and operate 

liquid-bed sulfur removal technology 

in the Uinta Basin as required by 

Paragraph 66. 

For each unit: $1,000 per Day for the first 30 

Days of noncompliance, $2,500 per Day from 

the 31st to 60th Day of noncompliance, and 

$5,000 per Day thereafter. 

2. For failure to submit notification of 

each installation as required by 

Paragraph 67. 

For each unit: $100 per Day for the first 30 

Days of noncompliance, $200 per Day from the 

31st to 60th Day of noncompliance, and $500 per 

Day thereafter. 

3. For failure to maintain records as 

required by Paragraph 68. 

For each unit: $100 per Day for the first 30 

Days of noncompliance, $250 per Day from the 

31st to 60th Day of noncompliance, and $500 per 

Day thereafter. 

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f. Administrative Requirements (Section V). 

Violation Stipulated Penalty 

1. For failure to submit a proposed 

O&M plan as required by Paragraph 

69. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

2. For failure to timely implement the 

approved O&M plan as required by 

Paragraph 71. 

$500 per Day for the first 30 Days of 

noncompliance, $1,000 per Day from the 31st to 

60th Day of noncompliance, and $1,500 per Day 

thereafter. 

3. For failure to submit a proposed 

permit amendment for a consolidated 

allowable VOC limit for the Fort 

Lupton Facility as required by 

Paragraph 72. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

4. For failure to apply to amend the 

Title V permit as required by 

Paragraph 73. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

5 For failure to comply with the 

interim emission limit established in 

Paragraph 73. 

$500 per Day for the first 30 Days, $1,000 per 

Day for the 31st to 60th Day, and $1,500 per Day 

thereafter 

g. Ambient Air Monitoring (Section VII). 

Violation Stipulated Penalty 

1. For failure to fund the purchase of 

ambient air monitoring station(s) as 

required by Paragraph 80. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

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h. Multi-Phase Piping/Tankless Well-Site Pilot Project (Section VIII). 

Violation Stipulated Penalty 

1. For failure to complete the 

Feasibility Study, submit a written 

Feasibility Study report, submit a 

proposed SOW for the 

implementation of the Multi-Phase 

Pilot, or provide an Added 

Incremental Cost report as required 

by Paragraphs 83, 84, & 85, per 

deliverable. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

2. For failure to submit a semi-annual 

progress report as required by 

Paragraph 87. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

3. For failure to implement and 

complete the Multi-Phase Pilot as 

required by Paragraphs 86 & 88. 

$500 per Day for the first 30 Days of 

noncompliance, $1,000 per Day from the 31st to 

60th Day of noncompliance, and $1,500 per Day 

thereafter. 

4. For failure to submit a final report as 

required by Paragraph 89. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

5. For failure to maintain records as 

required by Paragraph 90. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per 

Day thereafter. 

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i. Performance Optimization Review (Section IX). 

Violation Stipulated Penalty 

1. For failure to complete the POR by 

the date specified in Paragraph 91 for 

either the Uinta Basin or the D-J 

Basin, as separate projects. 

For each project: $500 per Day for the first 30 

Days of noncompliance, $1,000 per Day from 

the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter. 

2. For failure to submit a POR report as 

required by Paragraph 94. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per 

Day thereafter. 

j. SEPs (Section XI). 

Violation Stipulated Penalty 

1. For failure to transfer funds to the 

Uintah County Road Department by 

the date specified in Paragraph 100. 

For each project, $500 per Day for the first 

30 Days of noncompliance, $1,000 per Day 

from the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter 

2. For failure to transfer SEP Funds to 

the RAQC by the date specified by 

Paragraph 102. 

For each project, $500 per Day for the first 

30 Days of noncompliance, $1,000 per Day 

from the 31st to 60th Day of noncompliance, and 

$1,500 per Day thereafter 

3. For failure to submit a report as 

required by 104. 

$200 per Day for the first 30 Days of 

noncompliance, $500 per Day from the 31st to 

60th Day of noncompliance, and $1,000 per Day 

thereafter. 

4. For failure to spend at least the 

amounts set forth in Paragraphs 100 

or 102. 

For each SEP, an amount equal to the difference 

between the amount of total eligible SEP costs 

expended and the amount set forth in 

Paragraphs 100 or 102. 

116. Late Payment of Civil Penalty: If Kerr-McGee fails to pay the civil penalty 

required to be paid under Section X (Civil Penalty) of this Consent Decree to the United States 

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or as applicable the State, when due, Kerr-McGee shall pay a stipulated penalty of $1,000 per 

Day for each Day that the payment is late. 

117. Stipulated penalties under this Section shall begin to accrue on the Day after 

performance is due or on the Day a violation occurs, whichever is applicable, and shall continue 

to accrue until performance is satisfactorily completed or until the violation ceases. Stipulated 

penalties shall accrue simultaneously for separate violations of this Consent Decree. 

118. Kerr-McGee shall pay any stipulated penalty within 30 Days of receipt of written 

demand of the United States, or as applicable the State, and shall continue to make such 

payments every 30 Days thereafter until the violation(s) no longer continue, unless Kerr-McGee 

elects within 20 Days of receipt of written demand from the United States, or as applicable the 

State, to dispute the accrual of stipulated penalties in accordance with the provisions in Section 

XV (Dispute Resolution) of this Consent Decree. 

119. For violations that concern or relate to facilities in the Uinta Basin, Kerr-McGee 

shall pay the total amount of stipulated penalties to the United States. For violations that concern 

or relate to facilities in the D-J Basin, Kerr-McGee shall pay 40 percent to the United States and 

60 percent to the State. 

120. Kerr-McGee shall pay stipulated penalties in accordance with the federal and state 

payment instructions set forth in Paragraphs 97 and 98. 

121. The United States or the State may, in the unreviewable exercise of their 

respective discretion, reduce or waive stipulated penalties otherwise due such Plaintiff under this 

Consent Decree. The determination by one Plaintiff not to seek stipulated penalties, or 

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subsequently to waive or reduce the amount it seeks, shall not preclude the other Plaintiff from 

seeking the full amount of stipulated penalties owing. 

122. Stipulated penalties shall continue to accrue as provided in Paragraph 117 during 

any dispute, with interest on accrued stipulated penalties payable and calculated by the Secretary 

of Treasury, pursuant to 28 U.S.C. § 1961, but need not be paid until the following: 

a. If the dispute is resolved by agreement or by a decision of Plaintiffs 

pursuant to Section XV (Dispute Resolution) of this Consent Decree that is 

not appealed to the Court, Kerr-McGee shall pay accrued stipulated 

penalties and accrued interest agreed or determined to be owing within 30 

Days of the effective date of such agreement or the receipt of Plaintiffs’ 

decision. 

b. If the dispute is appealed to the Court, and the Plaintiffs prevail in whole or 

in part, Kerr-McGee shall pay all accrued stipulated penalties determined 

by the Court to be owing, together with accrued interest, within 60 Days of 

receiving the Court’s decision or order, except as provided in Subparagraph 

c., below. 

c. If any Party appeals the Court’s decision, Kerr-McGee shall pay all accrued 

penalties determined by the appellate court to be owing, together with 

accrued interest, within 15 Days of receiving the final appellate court 

decision. 

123. Kerr-McGee shall not deduct stipulated penalties paid under this Section XIII in 

calculating its federal or state income tax. 

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124. Subject to the provisions of Section XVII (Effect of Settlement/Reservation of 

Rights), the stipulated penalties provided for in this Consent Decree shall be in addition to any 

other rights, remedies, or sanctions available to the United States for Kerr-McGee’s violation of 

this Consent Decree or applicable law. Where a violation of this Consent Decree is also a 

violation of the Act or regulatory requirements of the Act, or the Colorado Act or the regulatory 

requirements of the Colorado Act, Kerr-McGee shall be allowed a dollar-for-dollar credit, for 

any stipulated penalties paid, against any statutory penalties imposed for such violation. 

XIV. FORCE MAJEURE 

125. If any event occurs which causes or may cause a delay or impediment to 

performance in complying with any provision of this Consent Decree (e.g. would require 

operation in an unsafe manner), and which Kerr-McGee believes qualifies as an event of Force 

Majeure, Kerr-McGee shall notify the Plaintiffs in writing as soon as practicable, but in any 

event within 45 Days of when Kerr-McGee first knew of the event or should have known of the 

event by the exercise of reasonable diligence. In this notice Kerr-McGee shall specifically 

reference this paragraph of this Consent Decree and describe the anticipated length of time the 

delay may persist, the cause or causes of the delay, the measures taken and/or to be taken by 

Kerr-McGee to prevent or minimize the delay and the schedule by which those measures will be 

implemented. Kerr-McGee shall adopt all reasonable measures to avoid or minimize such 

delays. 

126. Failure by Kerr-McGee to substantially comply with the notice requirements of 

Paragraph 125, as specified above, shall render this Section voidable by the Plaintiffs, as to the 

-56-
specific event for which Kerr-McGee has failed to comply with such notice requirement. If so 

voided, this Section shall be of no effect as to the particular event involved. 

127. The Plaintiffs shall notify Kerr-McGee in writing regarding their agreement or 

disagreement with any claim of a Force Majeure event within 45 Days of receipt of each Force 

Majeure notice provided under Paragraph 125. 

128. If the Plaintiffs agree that the delay or impediment to performance has been or 

will be caused by circumstances beyond the control of Kerr-McGee, including any entity 

controlled or contracted by it, and that Kerr-McGee could not have prevented the delay by the 

exercise of reasonable diligence, the Parties shall stipulate to an extension of the required 

deadline(s) for all requirement(s) affected by the delay by a period equivalent to the delay 

actually caused by such circumstances, or such other period as may be appropriate in light of the 

circumstances. Such stipulation may be filed as a modification to this Consent Decree by 

agreement of the Parties pursuant to the modification procedures established in this Consent 

Decree. Kerr-McGee shall not be liable for stipulated penalties for the period of any such delay. 

129. If the Plaintiffs do not agree that the delay or impediment to performance has 

been or will be caused by circumstances beyond the control of Kerr-McGee, including any entity 

controlled or contracted by it, the position of the Plaintiffs on the Force Majeure claim shall 

become final and binding upon Kerr-McGee, and Kerr-McGee shall pay applicable stipulated 

penalties, unless Kerr-McGee submits the matter to this Court for resolution by filing a petition 

for determination with this Court within 20 business Days after receiving the written notification 

of the Plaintiffs as set forth in Paragraph 127. In the event that the United States and the State 

disagree, the position of the United States shall become the Plaintiffs’ final position with regard 

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to Kerr-McGee’s Force Majeure claim. Once Kerr-McGee has submitted such matter to this 

Court, the Plaintiffs shall have 20 business Days to file a response to the petition. If KerrMcGee submits the matter to this Court for resolution and the Court determines that the delay or 

impediment to performance has been or will be caused by circumstances beyond the control of 

Kerr-McGee, including any entity controlled or contracted by Kerr-McGee, and that it could not 

have prevented the delay by the exercise of reasonable diligence, Kerr-McGee shall be excused 

as to such event(s) and delay (including stipulated penalties) for all requirements affected by the 

delay for a period of time equivalent to the delay caused by such circumstances or such other 

period as may be determined by the Court. 

130. Kerr-McGee shall bear the burden of proving that any delay of any requirement(s) 

of this Consent Decree was (were) caused by or will be caused by circumstances beyond its 

control, including any entity controlled or contracted by Kerr-McGee, and that it could not have 

prevented the delay by the exercise of reasonable diligence. Kerr-McGee shall also bear the 

burden of proving the duration and extent of any delay(s) attributable to such circumstances. An 

extension of one compliance date based on a particular event may, but does not necessarily, 

result in an extension of a subsequent compliance date or dates. Unanticipated or increased costs 

or expenses associated with the performance of obligations under this Consent Decree shall not 

constitute circumstances beyond the control of Kerr-McGee. 

131. As part of the resolution of any matter submitted to this Court under this Section, 

the Parties by agreement, or this Court by order, may in appropriate circumstances extend or 

modify the schedule for completion of work under this Consent Decree to account for the delay 

in the work that occurred as a result of any delay or impediment to performance on which an 

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agreement by the Plaintiffs or approval by this Court is based. Kerr-McGee shall be liable for 

stipulated penalties for its failure thereafter to complete the work in accordance with the 

extended or modified schedule, except to the extent that such schedule is further modified, 

extended or otherwise affected by a subsequent Force Majeure event under this Section XIV. 

XV. DISPUTE RESOLUTION 

132. Unless otherwise expressly provided for in this Consent Decree, the dispute 

resolution procedures of this Section shall be the exclusive mechanism to resolve disputes arising 

under or with respect to this Consent Decree. For any dispute that concerns D-J Basin Facilities, 

the provisions of this Section apply equally to both the United States and the State, as Plaintiffs. 

133. Informal Dispute Resolution: Any dispute subject to Dispute Resolution under 

this Consent Decree shall first be the subject of informal negotiations. The dispute shall be 

considered to have arisen when Kerr-McGee sends the Plaintiff(s) a written Notice of Dispute. 

Such Notice of Dispute shall state clearly the matter in dispute. The period of informal 

negotiations shall not exceed 20 Days from the date the dispute arises, unless that period is 

modified by written agreement. If the Parties cannot resolve a dispute by informal negotiations, 

then the position advanced by the Plaintiff(s) shall be considered binding unless, within 20 Days 

after the conclusion of the informal negotiation period, Kerr-McGee invokes formal dispute 

resolution procedures as set forth below. In the event that the United States and the State are 

unable to reach agreement with regard to Kerr-McGee’s claim, the position of the United States 

shall be the Plaintiffs’ final position. 

134. Formal Dispute Resolution: Kerr-McGee may only invoke formal dispute 

resolution procedures, within the time period provided in the preceding Paragraph, by serving on 

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the Plaintiff(s) a written Statement of Position regarding the matter in dispute. The Statement of 

Position shall include, but may not necessarily be limited to, any factual data, analysis, or 

opinion supporting Kerr-McGee’s position and any supporting documentation relied upon by 

Kerr-McGee. 

135. The Plaintiff(s) shall serve its (their) Statement of Position within 30 Days of 

receipt of Kerr-McGee’s Statement of Position. The Plaintiff(s)’ Statement of Position shall 

include, but may not necessarily be limited to, any factual data, analysis, or opinion supporting 

that position and any supporting documentation relied upon by the Plaintiff(s). The Plaintiff(s)’ 

Statement of Position shall be binding on Kerr-McGee, unless Kerr-McGee files a motion for 

judicial review of the dispute in accordance with Paragraph 136. In the event that the United 

States and the State are unable to reach agreement with regard to Kerr-McGee’s claim, the 

position of the United States shall be the Plaintiffs’ final position. 

136. Kerr-McGee may seek judicial review of the dispute by filing with the Court and 

serving on the Plaintiff(s), in accordance with Section XIV of this Consent Decree (Notices), a 

motion requesting judicial resolution of the dispute. The motion must be filed within 30 Days of 

receipt of the Plaintiff(s)’ Statement of Position pursuant to the preceding Paragraph. The 

motion shall contain a written statement of Kerr-McGee’s position on the matter in dispute, 

including any supporting factual data, analysis, opinion, or documentation, and shall set forth the 

relief requested and any schedule within which the dispute must be resolved for orderly 

implementation of the Consent Decree. 

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137. The Plaintiff(s) shall respond to Kerr-McGee’s motion within the time period 

allowed by the Local Rules of the Court. Kerr-McGee may file a reply memorandum, to the 

extent permitted by the Local Rules and allowed by the Court. 

138. Except as otherwise provided in this Consent Decree, in any dispute brought 

under Paragraph 133, Kerr-McGee shall bear the burden of demonstrating that its position 

complies with this Consent Decree. 

139. The invocation of dispute resolution procedures under this Section shall not, by 

itself, extend, postpone, or affect in any way any obligation of Kerr-McGee under this Consent 

Decree, unless and until final resolution of the dispute so provides. Stipulated penalties with 

respect to the disputed matter shall continue to accrue from the first Day of alleged 

noncompliance, but payment shall be stayed pending resolution of the dispute as provided in 

Paragraph 122. If Kerr-McGee does not prevail on the disputed issue, stipulated penalties shall 

be assessed and paid as provided in Section XIII (Stipulated Penalties). 

XVI. INFORMATION COLLECTION AND RETENTION 

140. The United States, and its representatives, including attorneys, contractors, and 

consultants, shall have the right of entry into any facility covered by this Consent Decree, and the 

State, and its representatives, including attorneys, contractors, and consultants, shall have the 

right of entry into any facility in the D-J Basin subject to any requirement of this Consent 

Decree, at all reasonable times, upon presentation of credentials, for the purpose of monitoring 

compliance with any provision of this Consent Decree, including to: 

a. monitor the progress of activities required under this Consent Decree; 

b. inspect equipment and facilities covered by this Consent Decree; and 

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c. inspect and copy documents, records, or other information to be 

maintained in accordance with the terms of this Consent Decree. 

141. Kerr-McGee shall be entitled to: (1) splits of samples, where feasible, and (2) 

copies of any sampling and analytical results, documentary evidence and data obtained by the 

United States or the State pursuant to Paragraph 140 of this Consent Decree. 

142. Until five years after the termination of this Consent Decree, Kerr-McGee shall 

retain, and shall instruct its contractors and agents to preserve, all non-identical copies of all 

documents, records, or other information (including documents, records, or other information in 

electronic form) in its or its contractors’ or agents’ possession or control, or that come into its or 

its contractors’ or agents’ possession or control, and that relate in any manner to Kerr-McGee’s 

performance of its obligations under this Consent Decree. Such documents, records, or other 

information may be kept in electronic form. This information-retention requirement shall apply 

regardless of any contrary corporate or institutional policies or procedures. At any time during 

this information-retention period, upon request by the United States or the State, Kerr-McGee 

shall provide copies of any non-privileged documents, records, or other information required to 

be maintained under this Paragraph. 

143. At the conclusion of the information-retention period provided in the preceding 

Paragraph, Kerr-McGee shall notify the United States and the State at least 90 Days prior to the 

destruction of any documents, records, or other information subject to the requirements of the 

preceding Paragraph and, upon request by the United States or the State, Kerr-McGee shall 

deliver the requested non-privileged documents, records, or other information to EPA or 

CDPHE. 

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144. Kerr-McGee may assert that certain documents, records, or other information is 

privileged under the attorney-client privilege or any other privilege recognized by federal and/or 

state law. If Kerr-McGee asserts such a privilege, it shall provide the following: (1) the title of 

the document, record, or information; (2) the date of the document, record, or information; (3) 

the name and title of each author of the document, record, or information; (4) the name and title 

of each addressee and recipient; (5) a description of the subject of the document, record, or 

information; and (6) the privilege asserted by Kerr-McGee. However, no final documents, 

records or other information that Kerr-McGee is explicitly required to create or generate to 

satisfy a specific requirement of this Consent Decree shall be withheld on the grounds of 

privilege. 

145. Kerr-McGee may also assert that information required to be provided under this 

Section is protected as Confidential Business Information (“CBI”) under 40 C.F.R. Part 2 and/or 

C.R.S. § 25-7-111(4). As to any information that Kerr-McGee seeks to protect as CBI, KerrMcGee shall follow the procedures set forth in 40 C.F.R. Part 2 and/or C.R.S. § 25-7-111(4). 

146. This Consent Decree in no way limits or affects any right of entry and inspection, 

or any right to obtain information, held by the United States or the State pursuant to applicable 

federal or state laws, regulations, or permits, nor does it limit or affect any duty or obligation of 

Kerr-McGee to maintain documents, records, or other information imposed by applicable federal 

or state laws, regulations, or permits. 

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XVII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS 

147. This Consent Decree resolves all civil claims of the United States and the State 

for violations alleged in the Complaint and Complaint in Intervention through the date of lodging 

of this Consent Decree. 

148. This Consent Decree further resolves the civil and administrative claims, if any, 

of the United States and the State for civil penalties and injunctive relief, through the date of 

lodging of this Consent Decree, under the PSD requirements of Part C of the Act, and the 

regulations promulgated thereunder at 40 C.F.R. § 52.21 (the “PSD Rules”), and Section 25-7-

101 et seq. of the Colorado Act, and the regulations promulgated thereunder for: 

a. any increase in emissions resulting from the construction by KerrMcGee’s corporate predecessor of the Dougan and Frederick facilities; 

b. the disabling of the VRU at the Brighton facility by a Kerr-McGee 

predecessor and the subsequent failure to operate the VRU; 

c. claims that relate to any allegations of engine modifications to RICE 

located at D-J Basin Facilities, any horsepower discrepancies used to 

describe RICE in any applicable permit for D-J Basin Facilities, and any 

failure or error in horsepower documentation to specify appropriate 

horsepower and related operational parameters for RICE located at D-J 

Basin Facilities. 

149. This Consent Decree resolves the civil claims of the United States and the State 

for violations disclosed under Paragraph 95, except for non-compliance that would trigger 

PSD/NSR. 

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150. The United States and the State reserve all legal and equitable remedies available 

to enforce the provisions of this Consent Decree, except as expressly stated in Paragraphs 147-

149. This Consent Decree shall not be construed to limit the rights of the United States or the 

State to obtain penalties or injunctive relief under the Act or Colorado Act or their implementing 

regulations, or under other federal or state laws, regulations, or permit conditions, except as 

expressly provided in Section VI (Limits on Potential to Emit), and Paragraphs 147 - 149. 

151. This Consent Decree is not a permit, or a modification of any permit, under any 

federal, State, or local laws or regulations. Nothing in this Consent Decree shall relieve KerrMcGee of its obligation to achieve and maintain full compliance with all applicable federal, 

State, and local laws, regulations, and permits. Kerr-McGee’s compliance with this Consent 

Decree shall be no defense to any action commenced pursuant to any such laws, regulations, or 

permits, except as otherwise provided in Paragraphs 147-149. The United States and the State 

do not, by their consent to the entry of this Consent Decree, warrant or aver in any manner that 

Kerr-McGee’s compliance with any aspect of this Consent Decree will result in compliance with 

other provisions of the Act, the Colorado Act, or their implementing regulations or with any 

other provisions of federal, State, or local laws, regulations, or permits. 

152. This Consent Decree does not limit or affect the rights of Kerr-McGee or of the 

United States or the State against any third parties, not party to this Consent Decree, nor does it 

limit the rights of third parties, not party to this Consent Decree, against Kerr-McGee, except as 

provided herein and as otherwise provided by law. 

153. This Consent Decree shall not be construed to create rights in, or grant any cause 

of action to, any third party not a party to this Consent Decree. 

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XVIII. EMISSION REDUCTION CREDIT GENERATION 

154. Kerr-McGee shall not generate or use any NOx, CO, VOC or SO2 emission 

reductions that result from any projects conducted pursuant to this Consent Decree as credits or 

offsets in any PSD, major non-attainment and/or minor New Source Review ("NSR") permit or 

permit proceeding. The foregoing notwithstanding, Kerr-McGee may conduct projects pursuant 

to this Consent Decree that create more emission reductions of NOx, CO, VOCs or SO2 than are 

required for these pollutants by the underlying applicable requirement(s). In such instances, 

Kerr-McGee may retain a portion of the achieved emissions reductions for use as credits or 

offsets. All other emission sources of NOx, CO, VOCs or SO2, and any netting associated with 

other pollutants, are outside the scope of these netting limitations and are subject to PSD/NSR 

applicability as implemented by the appropriate permitting authority or EPA. Use of emission 

reductions in netting and as offsets in any PSD, major non-attainment and/or minor NSR permit 

or permit proceeding pursuant to the limitations herein shall be further limited by the applicable 

regulations, and by the PSD, major non-attainment, and/or minor NSR permit(s) in question, as 

applicable. 

XIX. COSTS 

155. The Parties shall bear their own costs of this action, including attorneys’ fees, 

except that the United States and the State shall be entitled to collect the costs (including 

attorneys’ fees) incurred in any action necessary to collect any portion of the civil penalty or any 

stipulated penalties if due. 

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XX. NOTICES 

156. Unless otherwise specified herein, whenever notifications, submissions, or 

communications are required by this Consent Decree, they shall be made in writing and mailed 

or hand delivered addressed as follows: 

As to the United States: 

Chief, Environmental Enforcement Section 

Environment and Natural Resources Division 

U.S. Department of Justice 

P.O. Box 7611, Ben Franklin Station 

Washington, D.C. 20044-7611 

Re: DOJ No. 90-5-2-1-08656 

and 

Director, Air Enforcement Division 

Office of Enforcement and Compliance Assurance 

U.S. Environmental Protection Agency 

Ariel Rios Building [2242A] 

1200 Pennsylvania Avenue, N.W. 

Washington, D.C. 20460 

and 

Assistant Regional Administrator 

Office of Enforcement, Compliance, and Environmental Justice 

U.S. Environmental Protection Agency, Region 8 

1595 Wynkoop Street 

Denver, CO 80202-1129 

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As to the State of Colorado: 

Director 

Air Pollution Control Division 

Colorado Department of Public Health and Environment 

4300 Cherry Creek Drive South 

Denver, CO 80246-1530 

As to Kerr-McGee: 

Vice President 

Kerr-McGee Corporation 

1099 18th Street 

Denver, CO 80202 

and 

Director, Environmental, Health and Safety, Rocky Mountain Region 

Kerr-McGee Corporation 

1099 18th Street 

Denver, CO 80202 

157. Any Party may, by written notice to the other Parties, change its designated notice 

recipient or notice address provided above. 

158. Notices submitted by mail pursuant to this Section XX shall be deemed submitted 

upon mailing, unless otherwise provided in this Consent Decree or by mutual agreement of the 

Parties in writing. 

XXI. SALES OR TRANSFERS OF OWNERSHIP/OPERATOR INTERESTS 

159. If Kerr-McGee proposes to sell or transfer all or part of its ownership or its 

responsibility as operator of any of the Uinta Basin Facilities, D-J Basin Facilities, or any other 

facilities that are subject to any requirement of this Consent Decree, except for individual wells 

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or groups of wells and associated wellhead facilities, to any entity unrelated to the Defendant 

(“Third Party”), Kerr-McGee shall advise the Third Party in writing of the existence of this 

Consent Decree prior to such sale or transfer and shall send a copy of such written notification to 

the Plaintiffs pursuant to Section XX (Notices) of this Consent Decree at least 60 Days before 

such proposed sale or transfer. 

160. No sale or transfer of ownership to a Third Party shall take place before the Third 

Party consents in writing, by a stipulation to be filed with the Court, to: (a) accept all of the 

obligations, terms and conditions of this Consent Decree applicable to Uinta Basin Facilities or 

D-J Basin Facilities, or any other facilities, exclusive of wellhead facilities, that are subject to 

any requirement of this Consent Decree; (b) the jurisdiction of the Court to enforce the terms of 

this Consent Decree as to such party; and (c) become a party to this Consent Decree. 

Notwithstanding such a sale or transfer to a Third Party, Kerr-McGee shall remain jointly and 

severally liable with the Third Party unless the Consent Decree is modified or Kerr-McGee’s 

joint and several liability is restricted in accordance with Paragraph 161. 

161. If the United States, and as applicable the State, agrees, the Parties and the Third 

Party may execute a modification to this Consent Decree that relieves Kerr-McGee of its liability 

under this Consent Decree for, and makes the Third Party liable for, all obligations and liabilities 

applicable to the purchased or transferred facilities or operator responsibility. Notwithstanding 

the foregoing, Kerr-McGee may not assign, and may not be released from, obligations under this 

Consent Decree to pay the civil penalty in accordance with Section X (Civil Penalty), undertake 

the Supplemental Environmental Projects in accordance with Section XI (Supplemental 

Environmental Projects), pay stipulated penalties with respect to actions occurring prior to the 

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date of transfer of ownership or operator responsibility in accordance with Section XIII 

(Stipulated Penalties), or maintain documents or provide reports with respect to those obligations 

in accordance with Sections XII (Reporting Requirements) and XVI (Information Collection and 

Retention). Kerr-McGee may propose, and the United States and as applicable the State, may 

agree to restrict the scope of the joint and several liability of any purchaser or transferee for any 

obligations of this Consent Decree that are not specific to the transferred or purchased facilities 

or operator responsibility, to the extent such obligations may be adequately separated in an 

enforceable manner. 

XXII. EFFECTIVE DATE 

162. Unless otherwise specifically provided herein, the Effective Date of this Consent 

Decree shall be the date upon which this Consent Decree is entered by the Court. 

XXIII. RETENTION OF JURISDICTION 

163. The Court shall retain jurisdiction over this case until termination of this Consent 

Decree, for the purpose of resolving disputes arising under this Decree pursuant to Section XV 

(Dispute Resolution) or entering, partially terminating or terminating orders modifying this 

Decree, pursuant to Sections XXI (Sales or Transfers of Ownership/Operator Interests) XXIV 

(Modification) and XXV (Termination), or otherwise effectuating, or enforcing compliance with, 

the terms of this Consent Decree. 

XXIV. MODIFICATION 

164. The terms of this Consent Decree, including any attached appendices, may be 

modified only by a subsequent written agreement signed by all the Parties. With respect to any 

modification that constitutes a material change to this Decree, such written agreement shall be 

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filed with the Court and effective only upon the Court’s approval. Any modification of a 

reporting requirement of this Consent Decree shall be deemed a non-material modification. Any 

disputes concerning modification of this Decree shall be resolved pursuant to Section XV 

(Dispute Resolution) of this Consent Decree. 

XXV. TERMINATION 

165. This Consent Decree shall remain in effect until terminated or partially terminated 

in accordance with the provisions of this Section. 

166. Kerr-McGee shall serve upon the United States and the State a Request for 

Termination after January 1, 2017. The Request for Termination shall certify that Kerr-McGee 

has paid the civil penalty and all stipulated penalties, if any, that have accrued, and has fulfilled 

all other obligations of this Consent Decree. 

167. Where a control requirement, recordkeeping requirement, reporting requirement 

or other requirement of this Consent Decree is incorporated into a federally enforceable permit, 

Kerr-McGee may serve upon the United States and the State a Request for Partial Termination. 

Upon approval of such request by the Plaintiffs, the filing of a joint stipulation by the Parties and 

the Court’s approval in accordance with Paragraph 168, the Consent Decree provision in 

question shall be superseded by the corresponding permit provision, which shall govern as the 

applicable requirement. 

168. Following receipt by the United States and the State of Kerr-McGee’s Request for 

Termination or Partial Termination, the Parties shall confer informally concerning the Request 

for Termination or Partial Termination and any disagreement that the Parties may have as to 

whether Kerr-McGee has satisfactorily complied with the requirements for termination of this 

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Consent Decree. If the United States and the State agree that the Decree may be terminated or 

partially terminated, the Parties shall submit, for the Court’s approval, a joint stipulation 

terminating or partially terminating the Decree. 

169. If the United States or the State does not agree that the Decree may be terminated, 

Kerr-McGee may immediately appeal the disposition of its Request for Termination to the Court. 

XXVI. PUBLIC PARTICIPATION 

170. This Consent Decree shall be lodged with the Court for a period of not less than 

30 Days for public notice and comment in accordance with 28 C.F.R. § 50.7. The United States 

and the State reserve the right to withdraw or withhold their respective consent if the comments 

regarding the Consent Decree disclose facts or considerations indicating that the Consent Decree 

is inappropriate, improper, or inadequate. Kerr-McGee consents to entry of this Consent Decree 

without further notice and agrees not to withdraw from or oppose entry of this Consent Decree 

by the Court or to challenge any provision of the Consent Decree, unless the United States or the 

State has notified Kerr-McGee in writing that it no longer supports entry of the Consent Decree. 

XXVII. SIGNATORIES/SERVICE 

171. Each undersigned representative of Kerr-McGee, the Director, Air Pollution 

Control Division, CDPHE, and the Assistant Attorney General for the Environment and Natural 

Resources Division of DOJ certifies that he or she is fully authorized to enter into this Consent 

Decree and to execute and legally bind the Party he or she represents to the terms and conditions 

of this document. 

172. Kerr-McGee represents that it has authority to legally obligate any of its corporate 

subsidiaries or affiliates that own or operate any of the Uinta Basin Facilities, the D-J Basin 

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Facilities, or any other natural gas production or gathering facilities subject to any work or 

compliance requirements of this Consent Decree, including but not limited to Kerr-McGee Oil 

and Gas Onshore LP, Westport Field Services LLC, Kerr-McGee (Nevada) LLC, and KerrMcGee Gathering LLC, to take all actions necessary to comply with the provisions of this 

Consent Decree. 

173. This Consent Decree may be signed in counterparts, and its validity shall not be 

challenged on that basis. Kerr-McGee agrees to accept service of process by mail pursuant to the 

provisions of Section XX (Notices) with respect to all matters arising under or relating to this 

Consent Decree and to waive the formal service requirements set forth in Rules 4 and 5 of the 

Federal Rules of Civil Procedure and any applicable Local Rules of this Court including, but not 

limited to, service of a summons. 

XXVIII. INTEGRATION 

174. This Consent Decree constitutes the final, complete, and exclusive agreement and 

understanding among the Parties with respect to the settlement of matters addressed in the 

Decree, and supersedes all prior agreements and understandings, whether oral or written, 

concerning such matters. Other than the appendices listed in Section XXX (Appendices), which 

are attached to and incorporated in this Decree, and deliverables that are subsequently submitted 

and approved pursuant to this Decree, no other document, representation, inducement, 

agreement, understanding, or promise constitutes any part of this Decree or the settlement it 

memorializes, nor shall evidence of any such document, representation, inducement, agreement, 

understanding or promise be used in construing the terms of this Decree. 

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XXIX. FINAL JUDGMENT 

175. Upon approval and entry of this Consent Decree by the Court, this Consent 

Decree shall constitute a final judgment of the Court as to the United States, the State, and KerrMcGee. 

XXX. APPENDICES 

176. The following appendices are attached to and incorporated into this Consent 

Decree: 

“Appendix A” lists the D-J Basin Facilities. 

“Appendix B” lists the Uinta Basin Facilities. 

“Appendix C” is the Description of Low-Emission Dehydrators. 

“Appendix D” is the Protocol for RICE Compliance Demonstration in the D-J Basin. 

“Appendix E” lists the Existing >500 hp RICE at Minor Sources in the Uinta Basin to be 

Controlled with Oxidation Catalysts. 

“Appendix F” is the Protocol for RICE Compliance Demonstration in the Uinta Basin. 

“Appendix G” lists the High-Bleed Pneumatic Controllers in the Uinta Basin to be 

Retrofitted with Low-Bleed Pneumatic Controllers. 

“Appendix H” lists the High-Bleed Pneumatic Controllers in the D-J Basin to be 

Retrofitted with Low-Bleed Pneumatic Controllers. 

“Appendix I” is the Kerr-McGee Management Directive Regarding Low-Bleed 

Pneumatic Controllers in New Construction. 

“Appendix J” is the Emission Calculation Methodology for the Fort Lupton facility. 

“Appendix K” is the Scope of Work for the Feasibility Study of the Multi-Phase 

Piping/Tankless Well-Site Pilot Project. 

“Appendix L” is the Scope of Work for the Performance Optimization Review Project. 

“Appendix M” is the Scope of Work for the Road Dust SEP. 

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“Appendix N” is the Scope of Work for the Accelerated Vehicle Retirement State SEP. 

Dated and entered this _____Day of _____________, 2007 

_______________________________________ 

UNITED STATES DISTRICT JUDGE 

 District of Colorado 

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FOR PLAINTIFF, UNITED STATES OF AMERICA 

s/ Matthew J. McKeown Date 5/15/07 

MATTHEW J. McKEOWN 

Acting Assistant Attorney General 

Environment & Natural Resources Division 

950 Pennsylvania Avenue, N.W. 

Room 2143 

Washington, D.C. 20530 

s/ Jerel L. Ellington Date 5/17/07 

JEREL (“JERRY”) L. ELLINGTON 

DIANNE S. SHAWLEY 

Senior Counsel 

Environmental Enforcement Section 

Environment and Natural Resources Division 

U.S. Department of Justice 

1961 Stout Street – 8th Floor 

Denver, CO 80294 

Telephone (303) 844-1363 

Fax (303) 844-1350 

s/ Troy A. Eid Date 5/17/07 

TROY A. EID 

United States Attorney for the District of Colorado 

U.S. Attorney’s Office 

1225 17th Street #700 

Denver, Colorado 80202 

Telephone (303) 454-0100 

Fax (303) 454-0400 

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FOR U.S. ENVIRONMENTAL PROTECTION AGENCY 

s/ Granta Y. Nakayama Date May 16, 2007 

GRANTA Y. NAKAYAMA 

Assistant Administrator 

Office of Enforcement and Compliance 

Assurance 

U.S. Environmental Protection Agency 

Ariel Rios Building 

1200 Pennsylvania Avenue, N.W. 

Washington, D.C. 20460 

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FOR PLAINTIFF-INTERVENOR, THE STATE OF COLORADO 

s/ Paul Tourangeau Date 5/10/07 

PAUL TOURANGEAU 

Director, Air Pollution Control Division 

Colorado Department of Public Health & Environment 

4300 Cherry Creek Drive South 

Denver, Colorado 80246-1530 

Telephone: (303)-692-3114 

Fax: (303) 782-5493 

s/ Stephen M. Brown Date 5/16/07 

STEPHEN M. BROWN 

Assistant Attorney General 

Natural Resources and Environmental Section 

Colorado Department of Law 

1525 Sherman Street, 7th Floor 

Denver, Colorado 80203 

Telephone: (303) 866-4434 

Fax: (303) 866-3558 

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FOR DEFENDANT, KERR-McGEE CORPORATION 

s/ James J. Kleckner Date 5-8-07 

JAMES J. KLECKNER 

Vice President 

Kerr-McGee Corporation
 

1099 18th Street 

Denver, Colorado 80202 

Telephone: (303) 575-0167 

Fax: (303) 607-3462 

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