new colorado air quality regulations for the oil
TRANSCRIPT
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NEW COLORADO AIR QUALITY REGULATIONS FOR THE OIL AND GAS
INDUSTRY – HAS COLORADO GOTTEN IT RIGHT?
ROCKY MOUNTAIN LAND USE INSTITUTE
UNIVERSITY OF DENVER - STURM COLLEGE OF LAWJOHN R. JACUS
DAVIS GRAHAM & STUBBS LLP
MARCH 14, 2014
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DISCLAIMER – MY PERSONAL VIEWS
� Not speaking for any specific clients, trades
associations or for my firm.
� Views expressed are my own, not attributable
to any DGS clients, or the firm.
� Simply sharing perspectives of an advocate for
more workable and cost-effective regulations
in AQCC rulemakings for ozone since 2004.
� Thank all clients with whom I’ve worked.
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DID COLORADO GET IT RIGHT?
� In many ways, yes it did.
� In some ways, it could have done better (not
quite “right”).
� As was stressed to the Commission, these are
long-term challenges, so there will be
opportunities to revisit these issues, and the
new requirements, with benefit of experience.
� Continual reassessment - an EMS principle
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THE RIGHT STUFF
� A lengthy stakeholder process.
� A commitment from staff to meet frequently
with all stakeholders.
� Staff’s willingness to seek additional time from
the Commission, to allow for more progress.
� A willingness to revise concepts and
approaches taken in early strawman draft
proposals based on thoughtful dialogue.
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THE RIGHT STUFF (CONT.)
� A flexible Storage Tank Emissions Monitoring
(STEM) plan requirement
� A tiered leak detection and repair (LDAR)
requirement, based on amount of production
� Important exceptions to absolute
requirements, for safety, maintenance,
operational reasons
� Commission direction for further study
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THE NOT QUITE RIGHT STUFF
� “Shall not vent” vs. “minimize venting to maximum extent practicable” – tanks must vent
� State-wide application, even where oil & gas production are in decline, O3 in attainment
� Cost of rules underestimated, especially the impact on small operators, marginal wells
� Addressing “perceptions” in these rules without addressing the validity of those perceptions
� Creates unrealistic expectations, e.g., “Zero Tolerance” for CH4 emissions, or blaming oil and gas for ozone levels, so broader change unlikely
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SCOPE OF NEW REQUIREMENTS
• AQCC Regulation No. 3
• Removal of “Catch-all Provision”
• Removal of crude oil storage tank exemption
• AQCC Regulation No. 6
• Full adoption of NSPS OOOO (“Quad O”)
• “Storage Vessel” vs. “Storage Tank”
• AQCC Regulation No. 7
• STEM, LDAR, Low-bleed pneumatics & auto-igniters:
State-wide regulation of hydrocarbon emissions
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RULE SPECIFICS - STORAGE TANK
EMISSION MANAGEMENT “STEM”
• Must update STEM plans “as necessary” to achieve/maintain compliance
• STEM must include:• Selected control technologies
• Monitoring practices
• Operational practices
• Procedures for ongoing evaluation of capture performance
• Monitoring according to schedule
• STEM Plan – can apply to multiple sites
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RULE SPECIFICS – LEAK DETECTION AND
REPAIR
• Compressor stations and well production
facilities (upstream of gas plants)
• Approved Instrument Monitoring Method
(AIMM) and auditory, visual & olfactory (AVO)
• Infrared camera monitoring approved, other
methods/instruments subject to Division
approval
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RULE SPECIFICS – LEAK DETECTION AND
REPAIR AT COMPRESSOR STATIONS
• Compressor stations – LDAR requirements begin
January 1, 2015
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LEAK DETECTION AND REPAIR AT WELL
PRODUCTION FACILITIES
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RULE SPECIFICS – LEAK DETECTION AND
REPAIR AT WELL PRODUCTION FACILITIES
• Difficult/unsafe/inaccessible to monitor
• Leaks (Method 21):
• Constructed before May 1, 2014 a “leak”
• Hydrocarbon > 500 ppm for WPF
• Hydrocarbon > 2,000 ppm all other facilities
• Constructed after May 1, 2014 a “leak” is any hydrocarbon > 500 ppm
• Leaks (IR/AVO):
• Any “detectable emissions”
• Option to repair or quantify within 5 days
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RULE SPECIFICS – LEAK DETECTION AND
REPAIR AT WELL PRODUCTION FACILITIES
• Leak repair and re-monitoring
• First attempt no later than 5 working days
• If parts are unavailable or shutdown required,
repair required within 15 days of receipt or next
scheduled shutdown
• Other “good cause” delay
• Re-monitor within 15 working days of repair
• Enforcement for failure to repair (not “leaks”)
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RULE SPECIFICS – PNEUMATIC DEVICES
• All pneumatics after May 1, 2014 must be low
or no-bleed (electric power on-site)
• All high bleed pneumatics in service before
May 1, 2014, replaced/retrofitted to low-
bleed by May 1, 2015 unless they must remain
in place for safety or process purposes
• Intermittent-bleed devices not covered, to be
studied
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RULE SPECIFICS – STATEMENT OF BASIS
AND PURPOSE
• Burden expressly placed on the owner,
operator to show compliance with “no
venting” standard
• Commission encouraged a “pilot study” to
evaluate effectiveness of LDAR programs
• Commission encouraged further evaluation of
emissions at downstream compressor stations
and from intermittent pneumatic devices
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AQCC REGULATION NECESSARY,
APPROPRIATE
� Oil and gas production a vital state interest
� State is better able to regulate technically
complex aspects of the industry, air quality
� State primacy a better framework for
cooperative governance
� State primacy a check on parochial extremes
� Local regulation of nuisance impacts (noise,
light, odor, dust, vibration, traffic) a given
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IS BROADER CHANGE LIKELY TO OCCUR?
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QUESTIONS?
Davis Graham & Stubbs LLP – 1550 17TH St. – Denver CO
Tel. 303.892.7305