JTED ATE E TIO

THE M TTER OF:

M R THO 01 O.

Respondent

DOCKET 0.: -08-2011-0025

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Pursuant t 40 C.F.R. §_2.13(b and 2.18. of EPA's onsolidat d Rules fPra tic. the

C nsent Agreement T sol ing thi matter i hcreb appro d and incorporated by r fer nc int

thi .inal rdeL Th e pondent is hereb ORD I (D to . mpl ith all rth t rms rth

n' nt gr el11 nt. [fecti imm dintcl up n r"'c ipt y Rc p ad nl of thi ons nt

Agr 111 nt and Final I'd r.

This COUI1 will accept th electronic filing of th onsent Agre ment in this matter at this

time, however tbe Parties ar to file the original onsent AgTeement within seven days of

i suanc orthi Ort! 'I'.

The Parti s ar hereby ORDER D to c mpl 'vvlth all orlhe t ml. ofthis Order.

effective immediately upon rec ipt by PaI1ies oftbi Order.
UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

REGION 8

Docket No. CAA-08-20J 1-0025

2011 AUG 29 A1'lIO: 53

In the Malter of:

Marathon Oil Company

Rt.:spondcnl.

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ADMINISTRATIVE COMI'LAINT

AND CONSENT AGREEMENT

AUTHORITY

The United Stules EnvironmcnUlI Protection Agenc)', Region 8 (EPA or Complainant) is issuing

trns Administrative Complaint and Consent Agreement (Agreement) to Martuhon Oil Company

(Respondent) PUnlUUIl1 to Sections 113(aX3) and 113(d)(I) oflhe Clean Air Act (CAA or U,e Act). 42

U..C. § 7413(a)(3) und § 7413(d)(I). The Administrator of the ErA has the authority to enter into this

Agreement and that authority has been properly delegated to the undersigned EPA official.

A. STATUTORY AND REGULATORY BACKGROUND

I. On June) 9. 1978. EPA promulgated the Prevention ofSignificanl Deterioration (PSD) regulations

pursU81l110 Subtitle I. PMt C ofthe Act. 43 red. Reg. 26403. EPA revised the PSO regulations on

several occasions including August 7. 1980 (45 Fed. ReI>. 52676) nnd December 31, 2002 (67 Fed. Reg.

80186). These regulmions nrc codified at 40 C.F.R. Purt 52.

2. Tern\s used in this Agreement that arc defined in the Act or io regulations promulgateu pursuant to the

Act shall have the lncunings assigned to them therein, unless otherwise provided in lhis Agreement.

3. The emission sources to which this Agreement relates are in "Indian country" us defined al 18 U. .C.

§1151. The locations of the emission sources arc identified in Appendix A.

4. Section IGS(a) of the Act. 42 U.S.C. § 7475(3), and the PSD regulations implementing Part C at 40

C.F.R. § 52.21(a)(2)(iii), prohibit a major stationary source from commencing construction or major

modification of a major stationary source without a permit which states that the major stationary source

or modifictltion would meet the requirements of 40 C.F.R. § 52.21 G) through (1').

5. 40 C.P.R. § 52.21 (b)(5) defines a "stationnry source" as, any building, structure, facility or installmion

which emits or may emit n regulated PSD pollutant.

6. 40 C.F.R.

*52.21 (b)( I)(i)(b) defines a "major stationu!)' source'" <IS. among other things, any stationary

source lhftt emits, or has the potential to emil, 250 tons per year or more or any rcguloted PSO pollutant.

7. On July I, 2011. EPA promulgated final rulcs titled I'Revicw of New Sources and Modifications in

Indian Conntry." (Tribal Minor NSR Rule) 76 Fed. Reg. 38748-808 (July 1.2011) (to be codified 0140

C'.F.R. I'arts 49 and 51). The final mles arc effective 00 Augusl 30,2011. 76 Fed. Reg. at 38748. Once
eif'ectivc, the rules allow, among other things. for n synthetic minor source permit to be issued to un

otherwise major source that has taken a restriction, enlbrccable as a legal and practicalmaller. so tlmt the

source's potential to emit is less t.ban the amounts for major sources.

8. This proceeding is governed by the Consolidated Rules of Practice Governing the Administrali\'c

Assessment ofCivil Penalties, and t.bc Revocation, Temlination or Suspension of Permits (Consolidated

Rules) set fOMh at 40 C.F.R. Part 22. The U.S. Department ofJustice has concurred with EPA Region

8's request for authorization to commence an administrative enforcement action in this malter.

9. This Agreement is VOluntarily entered into by the EPA and the Respondent for the purpose of

simultaneously commencing and concluding this lllatler, as authorized by 40 C.F.R. § 22.13(b), and

executed pursuant to 40 C.F,R. § 22. I8(b)(2) and (3) ofthe Consolidated Rules.

11. INTROI>UCTORY I'ROVISIONS

I. This Agreement addresses a unique situation in that tbe Respondent is unable to obtain an effective

synthetic minor source permit from EPA prior to commencing construction because, pursuant to the new

Tribal Minor NSR Rule, Ihe authority to issue such permits begins August 30, 2011.

2. This Agreement is cntercd into by EPA and Respondent to settle allcgcd violations and allow

Respondents to comply as expeditiously us possible with the rcquit'cmellls ofthe CAA, specifically PSO.

of certain Bakken ronlllltion Oil and Gas Emission Sources (emission sources) owned and/or opt:rated

by Respondent., located within the exterior boundaries ofthe Fort Berthold Indian Reservation in 'North

Dakota as described in Appendix A.

3. Respondent admits the jurisdictional allegations in lhis Agreement but docs nUl admitlhc specific

fnctual allegations or legal conclusions made by the Complainant hel'cin.

4. Respondent waives its rights 10 a heuring before LIllY tribunal and lo contest any issue of law or fact sel

forth in this Agreement.

5. Complainant asserts thut scllicment ofthis matter is in the public interest. Complainant and Respondent

agrec thOl resolving this mattCr without further litig:llion Rnd without ndjudicatiol\ of any issue of facl or

law is appropriatc.

6. This Agreement, which includes Appendices A and B, upon incorporation into a Final Order, applies 10

and is binding upon EPA and upon Respondent, Rnd Respondent's omccn~, directors, cmployccs1 uscnt::;.

successors and assigns.

7. This Agreement contains nil temlS ofthe settlemcnt agreed to by the EPA and Respondent.

2
C. ALLEGED VIOLATIONS

1. Respondent is an Ohio corporation and therefore u "person" as dclinlXl in section302(c) (lfthe CAA, 42

U.S.C. § 7602(e).

2. Respondent owns andlor operates the emission sources described in Appendix A.

3. Complainant alleges that Respondent violated the CAA by constructing each oflhc major stationary

sources identified in Appendix A. Table A·! without firsl obtaining a PSD permit pursuant to 40 C.F,I{.

§ 52.21.

D. REQUIIlEMENTS UNDER TlUS AGREEMENT

The EPA and RespondenL. by their undersigned representatives, hereby consent and agree as follows:

I. Permitting

<I, Within one year ofthe effective date of Ihis Agreement, for all Existing Emission Sources listed

in Appendix A, Tuble A·1 1 Respondent shall submit to EPA a complete synthetic minor source

permit application under EPA's Tribal Minor NSR Rule. IfRespondellt detennincs that an

emission source was incorrectly included in Appendix A, Tuble A-I. it may notify EPA orthat

fact by Oerober 14,2011. In this cirClmlstance, Paragraph F.13 below shall apply.

b, By October 1,2011, Respondent shall submit to EPA a complete synthetic minor source pennit

application for New Emission Sources listed in Appendix A, Table A-2 that will commence

construction during the period starting August 31, 20 II, and ending December 31. 2011,

c. By November 1.2011. Respondent shall submit to EPA a complete synthetic minor source

permit application for New Emission Sources listcd in Appendix At Tobie A-3 that will

commence construction during the period starting January 1,2012, and ending March 31, 2012.

d. By January I. 20 12, RcspOI~dellt shall submit 10 EPA a cQmplcte synthetic millor source pcnnit

application for New Emission Sources listed in Appendix A, Table A-4 that will commence

COllstnlction during the period starting April 1,2012, and endi.ng June 30, 2012.

c. Any emission sources for which constnlction will commence after June 30, 2012, are not subject

to this Agrecmcnt and Respondenl must obtain an effcctive synthctic minor source permit fj·om

EPA or comply with the provisions of 40 C.F.R. § 52.21 prior to commencing construction.

f. Inclusion of an emission source listed in Appendix A. Table A-2, A-3 or A-4 does nol preclude

Respondent [rom commencing construction ofthat emission source after the date specified in the

relevant ParClgraph D.I. h,c, Clnd d above. However. all such emission sources Illust commence

construction prior to June 30, 2012.

g. IflhoSie emission sources listed in Appendix A. Tables A-2, A-3, and/or A-4 do not cOl11mence

construction by June 30. 2012, then they arc therefore not subject to Section D of this

Agreement.

3
2. Control Requiremcnts

o. For nil Existing Emission Sources listed in Appendix A, Table A-I. thc Respondent shall comply

with the requirements of Appendix B by no latCT than December I. 20 II.

b. For all New Emission Sources listed in Appendix A, Tables A-2. A~3. and A~4 the Respondent

shall comply with the requirements of Appendix B upon slart-up of production. Emission

sources that recei\lc an eftective synthetic minor source penni! before commencing consu11ction

arc not subject to the requirements ofthis Agreement.

3. Notification

Respondcnt shall notify the EPA on thc last business day of each month of all ofthe cmission

sources subject to this Agreement thai commence construction in the previous month, Respondent shall

also notify the EPA whether those emission sources arc meeting the control requirements as required by

Appendix B and whether they have received alt effective synthetic minor source pennit. This nOlice

shall also include a list of emissions sources that arc removing a 98% control device and using <l 90%

control device as outJined in Appendix B.

Unless othcn¥isc specified herein, whenever Respondent's notificlltion, submissions, or

communication are required by this Agreement.. Ihey shall be made electronically or mailed to the

following:

Cynthia J. Reynolds. Director

U.S. EI'A Region 8 (8ENF-AT)

Air & Taxies Tcchllieul Enforcement Progrllnl

1595 Wynkoop SI.

Denver, CO 80208-1129

rc)'nolds.cynthiu@cpu.gov

E. CIVIL PENALTY

I. Pursuant to an analysis ol'thc facts and circumstances oflhis case with the statutory factors described in

scclion 113(dXI)(B) ofthe CAA, 43 U.S.C. §7413(d)(1 )(B), EPA has determined ~lBl an appropriate

civil penalty to settle this action is the amount of$3,OOO per emission source listed in Appendix A for a

IOlal of 8294,000.00.

2. Respondent consents to the issuance of a Final Ol'der and consents for the purpose ofsettlement to the

payment ofthe civil penalty ill the manuel' described below in this paragraph:

2. Payment is due within 90 calendar doys Ii-om the date of the Final Order. to be issued by Lhe

EPA's Regional Judiciol Of1iccr, Ilml adopts this Adminislrotivc Complaint and Consent

Agreement. If the due date falls on a weekend or legal federal holiday, then the due date

4
bcCOI~lCS the next busines!\ day. The date the payment j~ made is collsidered to be the date

processed by the Bank described below. Payments received by II :00 AM are processed onlhc

lle:xt busille:ss day.

h. The payment shall be made: by remitting n cashier's or certilied check, including the mlnlC aud

docketl1umber ofthis case, for the calculated amouot, payable to "Treasurer, United States of

America," 10:

Cl-IGCK PAYMENT:

US Environmental Protection Agency

Fines i'lnd I>cnaltics

Ci ncinnBti Finance Center

1'0 Box 979077

St. Louis, MO 63197-9000

OVERNIGHT MAIL:

U.S. Bank

1005 Convention Plaza

Mail Slation SL-MO-C2GL

St. Louis, MO 63101

Contact: Natalie: Penrson

314-418-4087

WIRE TRANSrER:

Wire Transfers should be directed to the Federal Reserve Bank of New York

federal Reserve Bank of New York

ABA =021 030004

Account = 68010727

SWIFT address - FRNYUS33

33 Liberty Street

New York, NY 10045

Field Tog 4200 of the Fedwire message should read AD 6801727 Environmental Protection

Agency

ACH (also known as REX or remittance express):

Automated Clearinghouse (ACII) for receiving US currency

I'NC Bunk

808 17th Street, NW

Washington, DC 20074

Contact B Jesse White 301-887-6548

ABA = 051 036706, Transaclion Code 22· checking,

Enviroomental Protection Agency, Account 3 J0006, CTX ponnat

5
ON-LINE I'AYMENT,

There is now an On Line Payment Option. avaihtblc through the Dept. ofTreasury. This payment option

cun be accessed from the infonnation below:

www.ray,gov

Enter sro ).1 ill lhe search field. Open Conn and complete required fields.

A copy ofthe check, or wire transfer, shall be sent simullaneously to:

Alexis North (8ENF-AT)

U.S. EPA Region 8

Technical Enforcement Program

1595 Wynkoop St.

Denver, CO 80202-1129

and Tin3 Artemis

Regional Hearing Clerk (8RC)

U.S. EPA Region 8

1595 Wynkoop 51.

Denver, CO 80202-1129

c. Payment oftile penalty in this manner docs not relieve Respondenl ofits obligation to comply

with the requirement'; of the CAA and its reguliltions.

F. GENEllAL I'ROYI IONS

I. The cmjssiol1s cOlltrols required in Appendix n under this Agreemellt shall be considered "federally

enforceable" and, as 8ppLicablc, "legally and practicably enforceable" lor purposes of calculating the

potelHil1lto emil lor the emission sources covered under this Agreement.

2. Failure by Respondent to timely apply for. and ulljmtl.lely obtajn. the synthetic minor permit for any

emission source identified in this Agreemcnl or 10 comply with the requirements of Section D and

Appendix Dshall render allY release Qr satisfaction of liability afforded under this Agreement null fUld

void as to that source.

3. Nothing in this Agreement shall be construed as a waivcr by the EPA or any other federal enlity ofits

authority to seek COSls or any appropriate penalty associatcd with any collccLion :lctiol1 instituted a

result of Respondent's failure to pcrfonn pursuant to Ihe teons ofthis Agreement.

4. Once Ihe Respondent has received a synthetic minor source permit from EPA for the emission source

identified in Appendix A. wld that pennil has become effective. the tc:nl1S of thQt pctmit supersede this

Agreement.

5. For all Existing Emission Sources listed in Appendix: A, Table A·!, Respondent's submission of u

complele :.-ynlilctic minor source permit application will constitute compliance with the rclevunt CAA

provisions during lhc period ofthis Agreement.

6
6. Fotoll New Emission Sources listed in Appendix A, Tables A-2. A-3, and A-4, compliance with the

relcvanl CAA provisions requires that Respondent; u)ob1sins an effective s)'tlthetic minor source pcnnit;

b) is suhject 10 an EPA approved Federallmplcmcntation Plan which allows for 8 pcnnit by rllle~ or c)

complies with a new EPA applicable CAA regulation that removes them from PSD applicability

7. Notwithstanding the terms ofthis Agreement. the Respondent must meet any olher applicable

requirements of the Act or its implementing regulations.

8. Respondent agrees thai for any emission source opcl"dled withoulthe controls required by lhis

Agreement. except for instances of malfunction, Respondent is in violation of Ihis Agreement.

Malfunction shall bo defined as any sudden. infrequent, nnd nOI reasonably preventable failure of air

pollution eonleol equipment, process equipmcl1I, or a process to operate in D normal or usual mwtner,

caused b)' circumslances entirely beyond lhe control of the owner or operator, bUI shall not include

failures that are caused in whole or in part by poor maintcnance or careless operation.

9. Respondellt agrees U18t any cmission source whose actual emissions have excecded 250 Ions per )'ctlr is

not covered by this Agrecment, including any emission source listed by the Respondent in Appendix A.

10. Each undersigned rcpresentat..ive of the EJ)A and Respondents (Parties) [0 this Agreement ccrtifh:s that

be or shc is rully aUiborizcd by the Party represented to bind the Party to tbe terms and conditions of lhis

Agreement and to cxecU1C and legally bind that Party to this Agreement.

II. The Parties agree 10 stlbmit this Agrecmc11I to the Regional Judicial Orncer, with (l rcqucsllhal it be

incorpomted into a Final Order.

12. The lenns. conditions, and compliance requirements ofthis Agreement may not be modified or amended

except upon the written ogrccmellt orboth parties. and approval ofa Regional Judjeiol Officer.

13. If lhe Respondent, pursuom to Paragraph O.I.a. above, wishes to amend lhe list of emission sources in

Appendix A, Table A-I, it shall submitlhose suggested changes to EPA ror approval. If EPA agrees

with the suggested changes, the Parties will submit an amended Agreemeni to the Regional Judicial

Officer for incorporation into a revised Final Order.

14. The effective date ofthis Agreement is the date Ihal the Final Order is signed by the Regional Judicial

Officer,

1S. This Agreement, upon incorporation into a Filllli Order by the Regional Judicial Officer and full

satisfaction by the Parties, shall be a complete, full and final se1l1ement orthe violations alleged in this

Agreement.

16. Each Party shall bear its own COStS and ~1I0rncys fees in connection with nil is:iuCS t1ssociatcd wilh this

A~recmctlt.

7
UNJTED ATE' 'NVIRONEMENTAL

PROTECTlON A ,EN .Y REGION 8,

omplainalll.

ndr M. ayd h

Assistant Regional Admini Irator

fficc of Enforccmel l, nmpliancc aud

Environmental Justice

M r thon il mp n.

Respondent.

at C£~b· II
APP rnrx

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APPENDIX B

EMISSION CONTROL REQUIREMENTS

A. Applicability

lllCse requirements apply to existing and new emission sources associaled wilh oil production from

the l3akken Fonn3tion on the Fort l3erthold Indian Reservation ill North Dakola nod Inrgcllhc control

of casinghead gas emissions (also known as treater gas) and emissions fro," oil and produced waler

stomge tanks (tllllks),

II. Confrol Requirements

A/I casinghead gas {lnd tank emissions must be cOlltrolled or C<\pmrcd upon sian of production. Irgu."

gathering infnJSlruCture is in place, casinghead gas shall be fOUled to a gas gathering pipeline as soon

as practicnble, When a pipeline is nOI available. casinghead gas is required to be rouled to a control

system or device in the Control System List below. 111C Control System List also tll>plies 10 emissions

from oil and produced water storage wnk.c;. Capture or control devices stulll be operaled at aJllimcs

when emissions may be venled (0 them.

The oWllcl'/operntor shull I1minlnin lind opcmlc ullnir pollution control cqllipmclll, 6r1d tlJl equipment

employed to contain and collect vapors and transport them 10 Ihe emission control ~ystcm or device,

in accordance wilh the manufacturer's l'ccommcndnlions Llnd in a manner cOllsislcnt Wilh good air

pollulion conlral pmclice (or minimizing emissions.

Control System Lisl

I. A ground pit narc (including, but notlimiled 10 pil nares, shop built flares or other similar

oilfield lype narcs) or other 90% or greater ORE device. Ir n ground pit narc is utilized, a

90% ORE 10 be nssumed. This is considcred the minimum level of control for tank and IreatCr

gas cmissions lit nlllimcs.

2. A vl\por recovery unit or oil siabilizer that is designed and opcrtlled 10 reduce the mass contcn1

of vac and lotal hazardous air pollutant (HAP) emissions in the vapors vented 10 the devicc

by m least 95% by weigh!.

3. An enclosed combustion device appropriately sized fortne site's opcl1lting p<lramctcrs and lor

which the manufacturer represents wilillchieve II destruction efficiency oftil least 95% ofthe

VOCs wilh respect to the volumetric now nnd OTU content ofthe sitc's waste gas Slream. An

enclosed combustion device is opcrutcd including, but notlimitcd to the lallowing:

• This device should be operatcd whh no visible emissions except for periods not 10

exceed a tOlal of 5 minutcs during uny 2 consecutive hours: Method 22 of40 CPR

Appendix A shall be used 10 detemline the compliance with this visible emission

provision.

I I
• Owner/operator shall install an appropriatc. reliable temperature sensor/transmitter

lhnt indicates continuous ignition ofthe pilot namc on the control device. The

sensor/transmitter will be connccted to the site's Supervisory Control and Data

Acquisition (SCADA) System. The SCAD/\ system will record temperature readings

at a specified Frequency and will be programmed to ll'igger an alarm iftemperatures

outside ofa pre-programmed range arc detected. For the purpose ofthis paragraph,

"continuous" monitoring equipment shallmcasure and record values at least once

every hour,

4. A utility nare (using an open name without enclosure) that is designed ;.lOd operated 10 reduce

the mass content of VOC and total HAP emissions in the vapors vented to the device by at

lcast 98% by weight. A utility narc is /lny narc that is designed and operated in accordance

with thcrequircments of40 C.F.R § 60.18. Requirements of40 C.F.R § 60.18 include, butllrc

notlill1ilcd to the following:

• Flare shall be designed and operatcd with no visible emissions except lor periods not

to exceed a lotal of5 minutes during any 2 eons(:cutive hours; Method 22 of40 CFR

Appendix A shall be used 10 dctcnnine the compliance with this visible emission

provision;

• Flare shall be opcratcd with a flame present at all limes;

• An owner/operator has the choice: of adhering to either the heat content specilieations

in paragraph 40 c.r.R. § 60.18(c)(3)(ii) and the maximum tip velocity specifications

in paragraph (c)(4) or adhering to the requirements in 40 C.F.R, § 60,18(c)(3)(i);

• rlares used to comply with this section shall be srcam-assistcd, air-assisted or

nonassisted;

• Owners/operators of narcs shalllllonitor the contro I devices 10 ensure that they (Ire

opel'8tcd and maintained in conformance with their designs;

• The presence of a flare pilot namc shall be monitored using a thcrmocouple or any

other equivalent device to deteclthe prescnce of a name. Continuous checks by an

operator to verify the existence of n visible flame or to verify proper operation orthc

igniter may be used in lieu ofa physical device. For the purpose or this paragraph,

"colltinuous" monitoring equipment shall mcasure and record values at least once

every hour.

• For sarety and air pollution control purposes: cRch narc must bccquippcd and

operated with an automatic ignitor or a continuous blll'ning pilot, which must be

maintained in good working order. This is required even ifthe flare is used for

emergency purposes only.

5. Control devices other than those listed above may be utilized upon approval frOllllhe EllA.

C. Rccordkccping Requirements

I. Owner/operalol' shnllmaintain control device temperaturc logs ror three years.

12
CERTll'ICATE OF SERVICE

The undersigned certifies tlmt the original urlhe attached OROER GRANTING

ELECTRONIC FILING OF CONSENT AGREEMENT AND FINAL ORDER inlhe

mailer ofMARATUON OIL CO.; DOCKET NO.: CAA-1J8-21J11-IJ025, was filed wilh the

Regional Hearing Clerk on August 29, 2011,

Further. the undersigned cenifies that a true and correct copy ofthe document was

delivered to Jim Eppers. Enforcement Anomey, U, S, EPA - Region 8, 1595 Wynkoop Street,

Denver, CO 80202-1129. True and correct copies oflhe aforementioned documents were

placed in the United States mail 011 AugusI29, 21011, to:

Rebecca K. Skiba

Marathon Oil Company

5555 San Felipe

IloustOll. Texas 77056

And c01l1ilcd (0;

Eli7"lbcth Whitsel

U. S. Environmental Protection Agenc)'

Cincinnati rilll.lllCC Center

26 W. Martin Luther King Drive (11'I8-0002)

'incinllUli. Ohio 45268

August 26. 20 II UdA-.a~1;Q Tina Artemis

Paralegal/Regional Ilearing Clerk