Garry Kaufman Colorado Air Pollution Control Division May 14, 2014

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1 Garry Kaufman Colorado Air Pollution Control Division May 14, 2014

2 Colorado emissions data by sector Greenhouse gas emissions (GHG) Nitrogen oxides (NO x ) Volatile organic compounds (VOC) Past efforts to reduce air emissions from the oil and gas sector Newly adopted emission reduction strategies

3 MMTCO2e Agriculture Waste Management Industrial Processes Gas Production Coal Mining & Abandoned Mines Residential, Commercial & Industrial Fuel Use Transportation Electric Power

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6 Colorado has been a national leader in regulating air emissions from oil and gas production sector 2004 AQCC Rulemaking to reduce VOC emissions from Oil and Gas Sector in the Denver Metro/North Front Range as part of Early Action Compact Condensate tanks Dehydrators Engine VOC controls Leaks at natural gas processing plants 2006 AQCC update to 2004 rules and adoption of new rules with statewide applicability Condensate tanks (DMA/NFR and statewide) Dehydrators (statewide) No x and VOC engine controls (statewide)

7 2008 Ozone Action Plan to address nonattainment with ozone National Ambient Air Quality Standard Condensate tanks Low-bleed pneumatic devices 2008 and 2013 COGCC Rulemakings Petroleum storage tangs Dehydrators Pneumatic devices Green completions

8 In February 2014 AQCC adopted new requirements to reduce VOC and methane emissions from the oil and gas sector New rules apply statewide New rules target VOC and methane emissions from the largest O&G source categories Tanks Fugitives/Venting Pneumatic devices

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10 Expand control requirements for storage tanks Lower control threshold from 20 tons per year to 6 tons per year Include crude oil and produced water storage tanks Require controls during the first 90 days of production statewide Improve capture of emissions at controlled tanks Controlled tanks must be operated without venting to the atmosphere Establish requirements for Storage Tank Emission Management systems (STEM) Capture performance evaluation Certified design to minimize emissions Extensive instrument based monitoring Continual improvement

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13 Establish LDAR requirements for compressor stations and well production facilities Frequent monitoring using Method 21 or infra-red (IR) cameras Tiered monitoring schedule to focus on the highest emitting facilities and reduce the burdens on smaller facilities Establishes the most comprehensive leak detection program for oil and gas facilities in the nation Repair schedule for identified leaks Recordkeeping and reporting requirements

14 Leak Detection and Repair Leak on loose hammer union on pipe leading to Flare Combustor

15 Expand low-bleed pneumatic controller requirements statewide Require capture or control of the gas stream at well production facilities Establish requirements to minimize emissions during well maintenance Require auto-igniters on all combustion devices Expand control requirements for glycol dehydrators Lower control threshold from 15 tons per year to 6 tons per year More stringent threshold for facilities near populated areas

16 Estimated annual cost of new rules for industry is approximately $42 million State will administer rule using existing resources Significant reduction of volatile organic compounds and methane Approximately 94,000 tpy of VOC Approximately 64,000 tpy of methane EDF estimates approximately 113,000 tpy methane reduction

17 Expands Colorado s existing program and establishes innovative new strategies that address each of the most significant sources of hydrocarbon emissions from the oil and gas production sector Maintains Colorado s leadership role in regulating air emissions from oil and gas production Establishes a rigorous set of requirements to ensure responsible development of Colorado s oil and gas resources

18 -AQCC/CBON/