June 12, 2014

U.S. Environmental Protection Agency

RE: State of Colorado Comments White Papers on Methane and VOC Emissions in the Oil and Natural Gas Sector

On April 15, 2014, the United States Environmental Protection Agency (“EPA”) released five technical white papers on oil and gas sector emissions for external review. The technical papers focused on compressors, hydraulically fractured oil well completions and associated gas during ongoing production, leaks, liquids unloading processes, and pneumatic devices. EPA stated that EPA will use the white papers and input from the peer reviewers and the p ublic to determine how best to pursue additional emission reductions from these sources. The State of Colorado Department of Public Health and Environment, Air Pollution Control Division (“Division”) appreciates the opportunity to submit the following comm ents on several of EPA’s oil and natural gas sector white

papers.

Colorado recently promulgated significant air quality regulations concerning the oil and gas sector in Colorado relating to several of the white paper topics. 1 Colorado now requires rod pac king replacement on reciprocating compressors located at natural gas compressor stations

, and a minimum 95% control of emissions from wet seal fluid degassing systems on wet seal centrifugal compressors. Colorado established a leak detection and repair (“ L DAR ”) program for well production facilities and natural gas compressor stations. Colorado requires operators to either route gas produced from any newly constructed, hydraulically fractured, or recompleted oil and gas well to a gas gathering line or contr ol hydrocarbon emis sions by 95%. Colorado requires operators to use best management practices to minimize hydrocarbon emissions and the need for well venting associated with liquids unloading. Colorado requires low

- bleed pneumatic

controllers and no

- bleed pneumatic controllers where electric grid power is utilized. Colorado also requires the replacement or retrofit of high

- bleed pneumatic controllers such that VOC emissions are equal to or less than a low

- bleed pneumatic controller.

The Division estimates that the new ly adopted strategies will reduce volatile organic compound (“VOC”) emissions in Colorado by 93,500 tons per year and methane/ethane

1 Colorado Air Quality Control Commission, Oil and Gas Rulemaking Hearing http://www.colorado.gov/cs/Satellite/CDPHE

- AQCC/CBON/1251647985820 Submitted electronically June 1 2 , 2014 , via oilandgas.whitepapers@epa.gov

June 12 , 2014 Page 1 of 5emissions by 64,000 tons per year, while promoting greater beneficial use of natural gas. Colorado’s new regul ations go beyond current EPA regulations and are cost

- effective. The regulations were developed after an extensive stakeholder process, and were supported by significant memb ers of the oil and gas industry, environmental community

, and local government

.

O il and Natural Gas Sector Hydraulically Fractured Oil Well Completions and Associated Gas during Ongoing Production

This paper presents EPA’s understanding of emissions and available emissions mitigation techniques for hydraulically fractured oil well completions and associated gas during ongoing production.

In defining oil well completions, EPA states that the backflow velocity during oil well refracturing will typically be too high for the normal wellhead equipment. The Division

recommends that EPA further clarify that the production equipment, while possibly already onsite during refracturing events as EPA noted, is typically not suitable for

flowback.

I n discussing emissions estimates for associated gas from hydraulically fractured oil wells, EPA states that one method could be to use the gas

- to

- oil ratio (“GOR”) of the well. In further considering this option, the Division requests EPA clarify or addres s how EPA would develop this emission factor, including how gas composition would affect the development of the emission factor. Specifically, the Division requests that EPA clarify how it anticipates that GOR will influence emission factor development

.

C oncerning the costs of completion combustion devices, EPA states that annual costs are assumed to be equal to capital costs because combustion devices are purchased for that

site’s REC events. The Division notes that owners can move combustion devices to

d ifferent sites when the device is no longer necessary at the currently installed site, so costs could potentially be lower for companies with multiple well REC events.

EPA requested comments on various approaches to estimating completion emissions

from h ydraulically fractured oil wells in Charge Question Four. The Division has found that the initial NSPS OOOO reporting shows flowback periods ranging from three to thirty days in Colorado. The Division believes EPA should us e an averaging period

consistent with the actual period of flowback (i.e. weekly or monthly), which would more conservatively estimate emissions from operations. Further, the Division has also

observed through review of an d communications with operators regarding NSPS OOOO well completions reporting that some formations may have an initial period during flowback with no emissions or several days where the well does not have flowback due

to the formation characteristics. The Division believes EPA should also consider this potential delay whe n determining the average used to calculate emissions from such operations.

June 12 , 2014 Page 2 of 5EPA requested comments on other methodologies or data sources appropriate for estimating hydraulically fractured oil well completion emissions in Charge Question

Five. The Divisio n suggests that EPA review the Colorado Oil and Gas Conservation Commission’s online database of well completions and production for information related to estimating hydraulically fractured oil well completion emissions. 2

EPA requested comment on the emi ssion reductions that RECs and completion combustion devices achieve when used during hydraulically fractured oil well completions in Charge Question Nine. Colorado requires that combustion devices controlling emissions from newly constructed, hydraulicall y fractured, or recompleted oil and gas wells achieve an average hydrocarbon control efficiency of 95% and have a design destruction efficiency of at least 98%. While these combustion devices may have an average control efficiency greater than 95%, the Div ision established the 95% control efficiency to account for periods of downtime and/or combustion device performance

issues . The Division requests EPA also consider the need to account for combustion device downtime and performance.

Oil and Natural Gas Se ctor Leaks

This paper presents EPA’s understanding of emissions and available emissions mitigation techniques for leaks from equipment related to oil and gas production, processing, transmission, and storage. For purposes of this paper, EPA did not consid er emissions from equipment intended to vent as part of normal operations, such as natural gas

- driven pneumatic controllers, as leaks.

As mentioned above, Colorado recently promulgated significant air quality regulations establishing a LDAR program for ne w and existing well production facilities and natural gas compressor stations. 3 The inspection frequencies under Colorado’s LDAR program are based on the facility’s VOC emissions and begin on January 1, 2015, for natural gas compressor stations, October 15 , 2014, for new well production facilities, and between January 1, 2015, and January 1, 2016, for existing well production facilities. Colorado’s LDAR program requires both audio, visual, and olfactory (“AVO”) inspections and approved instrument monitoring method (“AIMM”) inspections, which includes infrared cameras, EPA Method 21, and other Division approved methods

.

Concerning the white paper summary of leaks emissions data and emissions estimates, the Division currently uses the emission factors in EPA’ s 1995 Protocol for Equipment Leak Emission Estimate. However, the Division believes that all air regulators would benefit from additional studies that would help calculate site specific emission factors

, rather than just estimate emissions from the total o il and gas sector, which would better quantify emissions from leaks.

Concerning the white paper summary of emissions mitigation techniques and leak repair programs, the Division suggests that EPA compile the complete costs of a LDAR

2 Colorado Oil and Gas Conservation Commission, www.cogcc.state.co.us

3 Colorado Air Quality Control Commiss ion Regulation 7, Section XVII.F

.

June 12 , 2014 Page 3 of 5program when evaluati ng EPA’s range of options related to leak detection and repair. For example, the Division considered the costs of the equipment as well as the time spent surveying for leaks in order to develop a cost

- effective LDAR program.

Oil and Natural Gas Sector Li quids Unloading Processes

This paper presents EPA’s understanding of emissions and available emissions mitigation techniques for natural gas production liquids unloading events, which occur when the accumulation of liquids in the well impede or halt gas p roduction and the removal of the fluids is required to maintain production.

Colorado recently promulgated regulations requiring the use of best management practices to prevent a well from initially loading up and to address a well once it has been

loaded up with hydrocarbon liquids. 4 The Division believes that many of the practices identified in the liquids unloading white paper have utility in Colorado. The Division also appreciates that the unique characteristics of any given well may mean that there is not a “one size fits all” approach. Thus, the Division is encouraged by the potential innovation

that can be driven from Colorado’s less

- prescriptive rules at this time. To that end, the Division met with Colorado oil and gas operators to assist the Divis ion in developing guidelines for implementing Colorado’s new well unloading regulations. Through this meeting, the Division gained valuable insight into the reasons for and variations of well unloading events.

Concerning EPA’s request in Charge Question Three for comments on the type of wells with the highest tendency to develop liquids unloading, vertical wells are the primary well type prone to liquid loading problems, although liquid loading problems are also anticipated as horizontal wells age. Concerning EPA’s request in Charge Question Six for comments on the ability of plunger lift systems to perform liquids unloading without air emissions, plunger lifts must vent when they do not complete a cycle as antic ipated by the operator, which resets the plunger lift and allows cycling and production to continue. Finally, concerning EPA’s request in Charge Question Nine for comments on the pros and cons of a smart automation system as part of a plunger lift system, automated plunger lift systems are widely used in the field and cycle multiple times a day depending on the software programming. If a cycle does not complete within a specified amount of time, the operator assumes the plunger has encountered a problem and will vent t h e w e l l to reset the plunger lift. If the plunger lift again does not cycle as anticipated, the operator may elect to shut

- in the well.

Oil and Natural Gas Sector Pneumatic Devices

This paper presents EPA’s understanding of emissions and available emi ssions mitigation techniques for natural gas

- driven pneumatic controllers and natural gas

- drive pneumatic

pumps.

4 Colorado Air Quality Control Commission Regulation 7, Section XVII.H.

June 12 , 2014 Page 4 of 5In defining pneumatic controllers and pumps, EPA includes devices driven by gases other than natural gas, which EPA states do not emit methan e or VOCs. EPA further defines

non

- natural gas

- driven pneumatic controllers to include power examples of solar, electric, and instrument air. The Division requests that EPA clarify what, if any besides instrument air, other gases EPA intends to include in “driven by gases other than natural gas” to avoid reader assumptions that other, unidentified gases may drive pneumatic controllers and pumps.

Other Comments

Additionally, the Division suggests EPA also consider reviewing the emissions and mitigation techniques for pipeline cleanout and inspection activities (i.e. pigging).

The Division believes it is very important that state and federal regulations work together and do not create duplicative or contradictory requirements. To that end, Colorado

belie ves that the States, EPA, the Bureau of Land Management (“ BLM ”) , and Federal Land Managers must work together to create complementary regulatory programs that address oil and gas emissions in a cost

- effective manner. The Division notes that BLM is

currentl y investigating issues similar to those under consideration by EPA. 5 The Division encourages the federal agencies to work together to craft programs that recognize state expertise and rules, and avoid unduly burdensome, confusing, or redundant requirements

at the federal level.

Thank you for the opportunity to submit these comments on the White Papers on

Methane and VOC Emissions in the Oil and Natural Gas Sector.

Sincerely,

William C. Allison V Director, Air Pollution Control Division Colorado Depa rtment of Public Health and Environment

cc: Martha Rudolph, CDPHE Mike Silverstein, AQCC

5 BLM Forums on Venting & Flaring from Oil and Gas Operations on Public and Indian Trust Lands

, http://www.blm.gov/wo/st/en/prog/energy/public_events_on_oil.html

June 12 , 2014 Page 5 of 5