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R Incorporated Providing Environmental Technical Support Since 1989

501 Eastowne Drive, Suite 250  Chapel Hill, North Carolina 27514 Telephone: (919)484

- 0222  Fax: (919) 484

- 0122 MEMORANDUM

DATE: August 1, 2013

SUBJECT: Summary of May 14, 2013, Meeting with Representatives from the Independent

Petroleum Association of America (IPAA) and State Associations

FROM: Heather P. Brown, EC/R Incorporated

TO: Bruce Moore, EPA/OAQPS/SPPD/FIG

I. PURPOSE

This memorandum summarizes the May 14, 2013 meeting between the Environmental Protection Agency (EPA) and industry representatives fr om the Independent Petroleum Association of America (IPAA) and State Associations (“the Associations”) . The intent of the meeting was to

allow IPAA and the Associations to clarify the ir petition for reconsideration submitted on October 15, 2012, as well as the April 12, 2013, proposed amendme nts.

II. DATE

The meeting took place on May 14 , 2013, at 10:00 am at the EPA building in the Research Triangle Park, NC. Several industry members participated via telephone.

III. ATTENDEES

The following individuals participated in the meeting either in person or via teleconference (as indicated) :

Industry Representatives

Sarah Bartlett, PDC Energy James Elliott, Spilman Thomas & Battle Andrew McNeill, Kentucky Oil & Gas Association Michael Wallen, Magnum Hunter Production, Inc.

Dawn DeVries

, ENCANA Jim Stephe ns, Hard Rock Exploration

The following representatives participated in the meeting via teleconference: Katherine Crockett, Spilman Thomas & Battle Christi Wilson,Trinity Consultants Rudy Vogt III , CV Resources Chris Martinez, Noble Energy2 Rachelle King, Triana Energy Bill Thompson, Williams Astrud Masterson, KY Oil and Gas Association Matt Kellogg, IPAA Dave Ochs, Kreibel Gas Shane Kreibel, Kreibel Gas Anthony Giuliani, Vorys

U.S. Environmental Protection Agency (EPA)

Bruce Moore , Office of Air Quality Planning and Standards (OAQPS) Amy Branning (via teleconference) , Office of General Council (OGC) Suzie Waltzer (via teleconference) , Office of Atmospheric Programs (OAP) Melissa White (via teleconference) , OAP Alex MacPherson, OAQPS

Nick Parsons , OAQPS Rachel Agnew , OAQPS Mike Witowsky , OAQPS

Ravi Srivastava

, OAQPS EC/R Incorporated

Heather Brown

IV. SUMMARY OF DISCUSSION

T hree issues were discussed : (1) the definition of low pressure wells ; (2) issues surrounding control requirements ; and (3) storage vessel issues.

Definition of Low Pressure Wells

The following items were discussed regarding the definition of low pressure wells :

• The Associations had issues with how EPA defined low pressure wells. They consider th e following to be low pressure wells: stripper wells (i.e., under pressurized wells); conventionally fracked vertical wells; and energized frack wells.

• Low pressure wells have a much smaller environmental footprint than other types of wells. Accordingly, pad acreage is smaller, emissions are lower, and water usage is

lower.

• Flowback of low pressure wells is much shorter in duration and flow , resulting in a smaller opportunity to recoup the cost of controls . With the exception of wells that employ energized fracking, flowback usually lasts somewhere between 24 hours and 2 days. Flowback associated with energized fracking can last longer.

• Issues with the regulation as written are a combination of both technical feasibility and economic feasibility. However, f or energized fracking, it is more technically infeasible because controls would require the separation of the nitrogen (N 2 ) used for the energized fracking and the methane.

• Rigs and other equipment are in high demand, with larger companies getting preferen ce over smaller companies.

• In order to avoid regulation of these low pressure wells, the Associations would prefer

EPA to use an alternate applicability level for which the well completion requirements3 would apply. The following are examples of the levels that would be preferable to the

current NSPS.

o The applicability level used by the Colorado Oil and Gas Conservation

Commission (COGCC): Green completions are required where the reservoir pressure, formation productivity, and wellbore conditions are likely to enable the well to be capable of naturally flowing hydrocarbon gas in flammable or greater concentrations at a stabilized rate in excess of 500 mcf/d to the surface against an induced surface backpressure of 500 psig or sales line pressure, whichever is

greater.

o The well completion requirements would apply to wells with pressures above the “fresh water gradient.” The “fresh water gradient” is defined as 0.433 psig/ft x depth (ft). As suggested by the Associations , wells would be subject to requirements if the rock pressure was higher than the fresh water gradient. EPA mentioned that it would be necessary to better understand the basis for this

definition and how it would be used.

• According to the Associations , the applicability levels in the 2008 COGCC r ulemaking

were based on where it was determined to be reasonable to do reduced emission completions (REC). No pump would be required, the 500 psig pressure requirement was determined to be a reasonably expected line pressure and the flowrate was likely to be

based on economics at a natural gas price of $7/mcf. EPA mentioned that they would like

to better understand the bases of these pressure and flowrate levels.

Issues Surrounding Control Requirements

The following issues were discussed regarding flare safety issues :

• EPA undere stimated the importance of well pad space needed for a combustion device.

• Independent studies conducted by industry indicate that emissions from well completions are much lower than currently estimated.

• It is unclear if well operators claim that it is unsa fe to use a flare, will they be required to make the necessary changes to make it safe for flare use.

• Combustion of flowback from a well undergoing energized fracking is inconsistent and

unsafe.

• The requirement for maintaining records onsite is burdensome because there is typically nowhere to keep these records. The Associations suggested being allowed to keep the

records at the nearest field office.

• The Associations requested that electronic igniters be allowed as an alternative to

continuous flames and th at igniters be monitored on a similar schedule as continuous flame monitoring (i.e., periodic). To continuously monitor electronic igniters, a supervisory control and data acquisition (SCADA) system would be required, which is not feasible for many remote sources. As a point of information, the electronic igniter does not required SCADA to operate.

Storage Vessel Issues

The following storage vessels issues were discussed:

• The Associations support the proposed amendments with respect to streamlined monitoring and encouraged EPA to adopt these in the final rule.4 • There are some issues with what requirements apply to the temporary tanks under the requirements for REC. These tanks are frequentl y used to collect flowback water after the

separator.

• The 30

- day period for calculation storage vessel emissions is too short. Accurate production data is usually not available for about 45 days due to a lag in information flow from the accounting process.

• The Associations expressed concerns with what would happen if they originally determined that a storage vessel would have emissions less than 6 tpy based on production projections but spikes in production resulted in emissions greater than 6 tpy.

• The Asso ciations supported the use of flow rate, in barrels per day, rather than emission for applicability determination.

• It is taking 4 to 6 months for small operators to get control equipment delivered.

• The currently proposed amendments appear to prevent the use of flares as control equipment for storage vessels.