UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 5 IN THE MATTER OF: KCBX Terminals Company 3259 East 100th Street Chicago, Illinois 60617 ATTENTION: Brandon Walker Environmental Health and Safety Manager Request to Provide Information Pursuant to the Clean Air Act The U.S. Environmental Protection Agency is requiring KCBX Terminals Company (KCBX or you) to submit certain information about its facilities at 3259 East 100th Street (the North Plant) and 10740 South Burley Avenue (the South Plant) in Chicago, Illinois. Appendix A provides the instructions needed to answer this information request, including instructions for electronic submissions. Appendix B specifies the information that you must submit. You must send this information to us according to the schedule in Appendix B. We are issuing this information request under Section 114(a) of the Clean Air Act (the CAA), 42 U.S.C. § 7414(a). Section 114(a) authorizes the Administrator of EPA to require the submission of information. The Administrator has delegated this authority to the Director of the Air and Radiation Division, Region 5. KCBX owns and operates emission sources at both Chicago, Illinois, facilities. We are requesting this information to determine whether your emission source is complying with the Clean Air Act, including but not limited to the Illinois State Implementation Plan. KCBX must send all required information to: Attn: Compliance Tracker, AE-17J Air Enforcement and Compliance Assurance Branch U.S. Environmental Protection Agency Region 5 77 W. Jackson Boulevard Chicago, Illinois 60604 KCBX must submit all required information under an authorized signature with the following certification: I certify under penalty of law that I have examined and am familiar with the information in the enclosed documents, including all attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are, to the best of my knowledge and belief, true and complete. I am aware that there are significant penalties for knowingly submitting false statements and information, including the possibility of fines or imprisonment pursuant to Section 113(c)(2) of the Clean Air Act and 18 U.S.C. §§ 1001 and 1341. As explained more fully in Appendix C, you may assert a claim of business confidentiality under 40 C.F.R. Part 2, Subpart B for any part of the information you submit to us. Information subject to a business confidentiality claim is available to the public only to the extent, and by means of the procedures, set forth at 40 C.F.R. Part 2, Subpart B. If you do not assert a business confidentiality claim when you submit the information, EPA may make this information available to the public without further notice. You should be aware, moreover, that pursuant to Section 114(c) of the CAA and 40 C.F.R. § 2.301(a) and (f), emissions data, standards and limitations are not entitled to confidential treatment and shall be made available to the public notwithstanding any assertion of a business confidentiality claim. Appendix C provides additional information regarding the meaning and scope of the term “emissions data.” This information request is not subject to the Paperwork Reduction Act, 44 U.S.C. § 3501 et seq., because it seeks collection of information from specific individuals or entities as part of an administrative action or investigation. 2 We may use any information submitted in response to this request in an administrative, civil or criminal action. Failure to comply fully with this information request may subject KCBX to an enforcement action under Section 113 of the CAA, 42 U.S.C. § 7413. You should direct any questions about this information request to Bonnie Bush at 312.353.6684. 'Jb;/;) Date Director Air and Radiation Divis· 3 Hagan Lovells us LLF Columbia Square 555 rhineenlri Street. NW Wasnln mrl. DC 20004 232 mm, Lovells .i 202 63759") hoganlovells com January 31. 2014 By FedEx and Electronic Mail Attn: Compliance Tracker. AE-17J Alr Enlorcerrient and Campllance Assurance Branch U.S. Environmental Protection Agency Region 5 77 w. Jackson Boulevard Chicago. IL 60604 Cantello Bonnie Bush U.S. Environmental Protection Agency 77 West Jackson Boulevard Chicago. Illinois 60647 Re: Koch Mineral Services - Response to EPA Inlormation Request Dated December 30, 201 3 Dear Ms. Cantellc and MS. Bush: This letter and its attachments are hereby submitted as a response to the above-relerenced December 30. 2013 request lor inlormation. issued by the United States Envlronmental Protection Agency to Koch Mineral Services, LLC pursuant to Section 114(a) ol the Clean Alr Act. 42 u.S.c. 7414(a). We note that Kocn Mineral Services. LLC is a holding company that does not ltselt conduct any actlvitles relevant to information request. and are lnstead onerlng this response on behall ol Koch Minerals. LLC (a direct subsidiary ol Kocti Mineral Services. LLC) and its attiliates KCBX Terminals Company and The c. Coal Company (collectively tor purposes ol responding to requests. "Koch erlerals"). In your electronic message ol January 14. 2014. EPA agreed to cenain modilications and claritications ol the criglnal intormation request. Koch Minerals understanding ol the requests as modilied is indicated with respect to each request below. Koch Minerals has engaged in considerable ettort to ensure that its submissions are complete. responsive. and usetul to the Agency. Koch Minerals makes the lollowing general qualilications and obiections to request: Hugo-l lmeli us ur is . iimaiiniliopamnno mortar" inrna cam; is an .nuinmai l-oal prime- rnai have; Hogan Lamb us Hugaanelilm-mamukmmulfiunrl Alam- canine. s-irng 5W: cams mm one human Franlam Han-mug Hm mm; Human Jminnadwrg Lamar! ran-oars "muslin; Madnd new man Mam Mario. Vent momma": Fins malaria-a mu. anaemia Run- sanrimm Shawna are." vale snow. ram Llaanbamal Winn Messiaen" Blaze-n Jakani .kddfil man bgr-b Nicole Cantello Bonnie Bush -2- January 31, 2014 • Koch Minerals objects to the request insofar as it seeks privileged information, including any and all communications and documents that are protected from disclosure by either the attorney-client communication privilege or attorney work-product doctrine. • Koch Minerals objects to the request to the extent it improperly seeks information beyond the scope of EPA's authority under Section 114(a) of the Clean Air Act, 42 U.S.C. § 7414(a), and therefore is not a proper exercise of EPA's information-gathering authority. • Koch Minerals objects to the request to the extent it is vague, ambiguous, overbroad, or unduly burdensome. • Koch Minerals reserves the right to supplement and revise its response, and reserves the right to assert additional objections as it continues to evaluate its response. • Koch Minerals requests confidential treatment for the documents and information designated as "confidential business information" ("CBI") to the extent information in the files and documents is designated confidential. Accordingly, notwithstanding the foregoing, and without waiving any of the foregoing qualifications and objections, below Koch Minerals has included the relevant numbered request followed by Koch Minerals' response.' The numbers of the responses below correspond to the numbers of the specific request included in Appendix B of the December 30, 2013 request. Request No. 1: Provide a list of all locations in Region 5 that Koch owned or operated for storage of petroleum coke from 2004 through the present. For each location, identify the following: a. The owner or operator of the petroleum coke storage or handling during the entire period you owned or handled petroleum coke at that site; b. The dates Koch first and last stored or handled petroleum coke at the site and all intervening dates when shipments were accepted at the site and when shipments were transported off the site; c. The dates and amounts (in tons) of each shipment from 2009 to the present; and d. Detailed descriptions of any measures taken to prevent fugitive emissions from each pile. Response to Request No. 1: As reflected in EPA's January 14th electronic message, Koch Minerals understands this Request to require it to identify, as to sites that Koch Minerals owned or operated in Region 5: a. The owner(s) or operator(s) of such sites at which Koch Minerals staged or handled petroleum coke since January 1, 2004; 1 For all attached electronic files, KCBX has scanned the files for viruses using Symantec Endpoint Protection in accordance with the instructions in Appendix A of the information request. Koch Minerals - Response to December 30, 2013 EPA Information Request Nicole Cantello Bonnie Bush -3- January 31. 2014 b. For the sites identified in (a) above, the first and last date petroleum coke was staged or handled there; c. For the sites identified in (a) above for the period 2009 to the present, the monthly throughput expressed in tons of petroleum coke; and d. For the sites identified in (a) above, descriptions of the measures taken to prevent fugitive emissions from piles. Koch Minerals notes that subsection (a) appears to inadvertently omit the word "site" from "the owner or operator of the petroleum coke storage or handling [site] during the entire period you owned or handled petroleum coke at that site," and interprets that portion of the request accordingly. Koch Minerals objects to this Request to the extent it implies that Koch Minerals "stores" or accepts for "storage" any petroleum coke. For purposes of identifying responsive information, Koch Minerals interprets these terms to refer to staging, rather than storage, of petroleum coke. Koch Minerals owned or operated the following sites within Region 5 from January 1, 2004 until the present where petroleum coke was staged or handled. 1. KCBX North (3259 E. 100th St., Chicago, Illinois) — Owned and operated by KCBX Terminals Company. Koch Minerals presently stages and handles petroleum coke at this facility. Upon information and belief, Koch Minerals has staged and handled petroleum coke at this site since January 1, 2004. Therefore, for purposes of this request, the date petroleum coke was first staged or handled at this facility is January 1, 2004. Further, please note that Koch Minerals purchased and began to operate the facility in 1990. Koch Minerals would have staged and handled petroleum coke at this facility from time to time between the date of purchase and December 31, 2003. However, Koch Minerals is unable to identify with precision or certainty when it might have received the first shipment of petroleum coke at the facility because Koch Minerals, in accordance with its record retention policy, has not retained the records sufficient to definitively state an exact date. Total monthly throughput of petroleum coke from January 2009 through December 2013 is set forth in the spreadsheet designated "KM00000001_Native_Format" (with a duplicate provided in bates-numbered pdf format), attached hereto on Disc 1 in an electronic file folder labeled Response #1c A detailed description of the measures taken to prevent fugitive emissions from piles at the site is contained in a document designated "KM00000017," attached hereto on Disc 1 in an electronic file folder labeled Response #1d. 2. KCBX South (10730 S. Burley Ave., Chicago, Illinois) — Owned by KM Railways, LLC and operated by KCBX Terminals Company. Koch Minerals presently stages and handles petroleum coke at this facility. Koch Minerals acquired the facility on December 20, 2012. It has staged and handled petroleum coke at the facility from that date. The first shipment of petroleum coke from this facility was on or about December 21, 2012. Total monthly throughput of petroleum coke from December 2012 through December 2013 is Koch Minerals Response to December 30, 2013 EPA Information Request Nicole Cantello Bonnie Bush -4- January 31, 2014 set forth in the spreadsheet designated "KM00000001_Native_Format" (with a duplicate provided in bates-numbered pdf format), attached hereto on Disc 1 in an electronic file folder labeled Response #1c. A detailed description of the measures taken to prevent fugitive emissions from piles at the site is contained in the document designated "KM00000031," attached hereto on Disc 1 in an electronic file folder labeled Response #1d 3. Duluth (50th Avenue West & LeSure, Duluth, Minnesota) — Owned and operated by The C. Reiss Coal Company. Koch Minerals presently stages and handles petroleum coke at this facility. Koch Minerals has staged and handled petroleum coke at this site since January 1, 2004. Therefore, for purposes of this request, the date petroleum coke was first staged or handled at this facility is January 1, 2004. Further, please note that Koch Minerals purchased and began to operate the facility in December 1986. Koch Minerals would have staged and handled petroleum coke at this facility from time to time between the date of purchase and December 31, 2003. However, Koch Minerals is unable to identify with precision or certainty when it might have received the first shipment because Koch Minerals, in accordance with its record retention policy, has not retained the records sufficient to definitively state an exact date. Total monthly throughput of petroleum coke from January 2009 through December 2013 is set forth in the spreadsheet designated "KM00000001_Native_Format" (with a duplicate provided in bates-numbered pdf format), attached hereto on Disc 1 in an electronic file folder labeled Response #1c. A detailed description of the measures taken to prevent fugitive emissions from piles at the site is contained in the document designated "KM00000003," attached hereto on Disc 1 in an electronic file folder labeled Response #1d. 4. Green Bay (111 W. Mason St., Green Bay, Wisconsin) — Owned and operated by The C. Reiss Coal Company. Koch Minerals presently stages and handles petroleum coke at this facility. Koch Minerals has staged and handled petroleum coke at this site since January 1, 2004. Therefore, for purposes of this request, the date petroleum coke was first staged or handled at this facility is January 1, 2004. Further, please note that Koch Minerals purchased and began to operate the facility in 1986. Koch Minerals would have staged and handled petroleum coke at this facility from time to time between the date of purchase and December 31, 2003. However, Koch Minerals is unable to identify with precision or certainty when it might have received the first shipment of petroleum coke at the facility because Koch Minerals, in accordance with its record retention policy, has not retained the records sufficient to definitively state an exact date. Total monthly throughput of petroleum coke from January 2009 through December 2013 is set forth in the spreadsheet designated "KM00000001_Native_Format' (with a duplicate provided in bates-numbered pdf format), attached hereto on Disc 1 in an electronic file folder labeled Response #1c A detailed description of the measures taken to prevent fugitive emissions from piles at the site is contained in the document designated "KM00000008," attached hereto on Disc 1 in an electronic file folder labeled Response #1d. Koch Minerals - Response to December 30, 2013 EPA Information Request Nicole Centello Bonnie Bush -5- January 31, 2014 Scott Lebbin (Vice-President of Operations - Koch Minerals, LLC), William Reiss (President - The C. Reiss Coal Company), Robert Valley (Dock Superintendent - The C. Reiss Coal Company), Richard Schlies (Manager of Transportation - Koch Minerals, LLC), Kathy Meese (Administrative Assistant - The C. Reiss Coal Company), Roberta Peterson (Administrative Clerk - KCBX Terminals Company), Christian Zuidmulder (Operations Supervisor - The C. Reiss Coal Company), Pete Rotundo (Distribution Manager - KCBX Terminals Company), Mark Cummings (Manager of Bulk Sales & Dev. - The C. Reiss Coal Company), Terry Steinert (Environmental Compliance Manager - Koch Minerals, LLC), John Hydock (Controller - Koch Minerals, LLC), Tom Kramer (General Manager - KCBX Terminals Company), Kermit Altendorfer (General Manager North American Marketing - Koch Carbon, LLC), Dave Emmerich (Operations Manager - The C. Reiss Coal Company) and Michelle Joki (Office Supervisor - The C. Reiss Coal Company) were consulted in preparation of this response and the appendices attached hereto. Request No. 2: Identify all locations owned or operated by Koch currently used for petroleum coke storage or handling in Region 5. Response to Request No. 2: Koch Minerals objects to this Request to the extent it implies that Koch Minerals "stores" or accepts for "storage" any petroleum coke. For purposes of identifying responsive information, Koch Minerals interprets these terms to refer to staging, rather than storage, of petroleum coke. The following facilities are currently used for petroleum coke staging and handling: KCBX North (Chicago, Illinois) KCBX South (Chicago, Illinois) Duluth (Duluth, Minnesota) Green Bay (Green Bay, Wisconsin) Scott Lebbin (Vice-President of Operations - Koch Minerals, LLC), William Reiss (President - The C. Reiss Coal Company), Robert Valley (Dock Superintendent - The C. Reiss Coal Company) and Richard Schlies (Manager of Transportation - Koch Minerals, LLC) were consulted in preparation of this response. Request No. 3: Identify all locations owned or operated by Koch where future petroleum coke storage or handling is planned, permitted, or zoned in Region 5. Continue to identify and notify EPA of such sites through December 31, 2015. For each location, identify the date Koch plans to use the location and the date when operations commence Provide an explanation for how and why the location was chosen. Response to Request No. 3: Koch Minerals — Response to December 30, 2013 EPA Information Request Nicole Centello Bonnie Bush -6- January 31, 2014 Koch Minerals objects to this Request as improperly issued under Clean Air Act Section 114(a), 42 U.S.C. § 7414(a), because the information sought is not necessary to serve any of the purposes outlined in Section 114(a)(i), (ii), or (iii). Any future petroleum coke staging or handling by Koch Minerals is not currently subject to regulation under the Clean Air Act and therefore is not within the scope of EPA's authority under Section 114(a). Koch Minerals further objects to the request insofar as EPA seeks to require Koch Minerals to "[c]ontinue to identify and notify EPA of such sites through December 31, 2015," as beyond the scope of EPA's Clean Air Act Section 114(a) authority. Furthermore, information regarding "how and why" any location for petroleum coke staging or handling "was chosen" is not relevant to Clean Air Act compliance and therefore is also outside EPA's Section 114(a) authority. In its January 14th electronic message, EPA modified this request to require Koch Minerals to submit documents regarding "locations where there is a current permit application, current permit or current permit that does not prohibit the storage of petcoke." It is Koch Minerals' understanding that air permits issued by state and federal authorities do not typically "prohibit" the handling of a bulk material. Nonetheless, Koch Minerals responds that, in addition to the four sites identified in its response to Request 1, it owns and operates four additional facilities within Region 5 that could at least potentially stage or handle petroleum coke at some point in the future. Ashland (601 1/2 Lake Shore Drive, Ashland, WI) Escanaba Dock 1 (Power Plant Road, Escanaba, MI) Escanaba Dock 2 (1010 3rd Avenue North, Escanaba, MI) Manitowoc (937 S. Fifth St., Manitowoc, WI) Relevant permitting documents and/or applications for each respective facility are attached hereto on Disc 1 in an electronic file folder labeled Response #3 (KM00000044KM00000478). In addition to the sites identified above, Koch Minerals or its affiliates own the following industrial sites within Region 5 that do not involve the handling of petroleum coke: Benton Facility, 5182 State Highway 37, Benton, IL 62812 (Magnetite Handling Facility) Clarkson Dock, end of 1 1th Ave. East, Ashland, Wisconsin 54806 (Koch Minerals is not presently operating this site and has not since at least January 1, 2004) Superior-Berwind Dock, Adjacent to 3200 Winter Street, Superior, Wisconsin 54880 (Koch Minerals has not operated this site since the early 1980s) Sault Ste. Marie Dock, South Street, Sault Ste. Marie, MI 49783 (Koch Minerals has not operated this site since the 1990s) Koch Minerals or its affiliates also own real estate located at 2400 Winter Street, Superior, WI 54880, which it leases to a third party. That third party has informed Koch Minerals that it has not handled petroleum coke at the property at any time since January 1, 2004. Koch Minerals does not have specific information as to whether the facility has permits to handle petroleum coke. Koch Minerals - Response to December 30, 2013 EPA Information Request Nicole Cantello Bonnie Bush -7- January 31, 2014 Scott Lebbin (Vice-President of Operations — Koch Minerals, LLC), William Reiss (President — The C. Reiss Coal Company), Robert Valley (Dock Superintendent — The C. Reiss Coal Company) and Richard Schlies (Manager of Transportation — Koch Minerals, LLC) were consulted in preparation of this response and the appendices attached hereto. Koch Minerals welcomes further discussion with EPA regarding the purpose and scope of this Request. Request No. 4: For all petroleum coke Koch owns or owned that was stored or handled by Detroit Bulk Storage at 115 Rosa Parks Boulevard, Detroit, Michigan, identify each location to which that petroleum coke has been transported. Provide the name of the entity that owns each location with the complete address along with copies of all supporting documentation. Response to Request No. 4: In its January 14th electronic message, EPA modified this request to require Koch Minerals to submit "information regarding the users or end users in Region 5 only." Further, EPA clarified that Koch Minerals should submit "just locations" of users, and that EPA "do[es] not require all back up information." Koch Minerals responds that it does not own and has never owned any petroleum coke that was stored or handled by Detroit Bulk Storage at 115 Rosa Parks Boulevard, Detroit, Michigan. David Stout (General Manager West Coast Pet Coke — Koch Carbon, LLC), Kathy Jordan (Carbon Process Improvement Manager — Koch Carbon, LLC, Michael Albrecht (Manager, North American Pet Coke Marketing — Koch Carbon, LLC) were consulted in preparation of this response. Request No. 5: For all petroleum coke Koch owns or owned that was stored or handled by Detroit Bulk Storage in River Rouge, Michigan, identify each location to which that petroleum coke has been transported. Provide the name of the entity that owns each location with the complete address along with copies of all supporting documentation. Response to Request No. 5: In its January 14th electronic message, EPA modified this request to require Koch Minerals to submit "information regarding the users or end users in Region 5 only." Further, EPA clarified that KCBX should submit "just locations" of users, and that EPA "do[es] not require all back up information." Koch Minerals responds that it does not own and has never owned any petroleum coke Koch Minerals — Response to December 30, 2013 EPA Information Request Nicole Clnlello -s - January 31' 2014 Bonnie Bulh that was stored or handled by Detroit Bulk Storage in River Rouge, Michigan. David Stout (General Manager West Coast Pet Coke -- Koch Carbon. LLC). Kathy Jordan (Carbon Process Improvement Manager -- Koch Carbon. LLC. and Michael Albrecht (Manager, North American Pet Coke Marketing -- Koch Carbon. LLC) were consulted in preparation at this response The oem'ficahon requested in the December 30. 2013 information request is attached hereto. Koch Minerals stands willing to discuss the foregoing responses and the attached appendices with EPA at a mutually convenient time. Sincerely. {if M, Panner Enclosures Koch Min-rain - Responu to Dun-mber 30. 2013 EPA Inmmiun Raquel! Hogan Lovells US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 T +1 202 637 5600 F +1 202 637 5910 www.hoganlovells.com March 6, 2015 By Overnight and Electronic Mail George T. Czerniak Director, Air and Radiation Division U.S. Environmental Protection Agency 77 West Jackson Boulevard Chicago, Illinois 60647 Nicole Cantello Attorney-Advisor U.S. Environmental Protection Agency 77 West Jackson Boulevard Chicago, Illinois 60647 Re: KCBX Terminals Company’s Notice Regarding February 14, 2015 Dear Mr. Czerniak and Ms. Cantello: For over a year now, KCBX Terminals Company (“KCBX”) has operated nine PM10 site monitors. These monitors have recorded a total of 3,205 daily (24-hr average) PM10 measurements within the KCBX fenceline (not in areas where the general public has access). 99.9% of the readings have been below 150 µg/m3. On Saturday, February 14, 2015, the North Terminal Southeast (“NT-SE”) station recorded a 24-hour PM10 monitor reading of 175 micrograms per cubic meter (“µg/m3”). Because the February 14th reading is unusual for KCBX’s facilities, KCBX writes to notify you of the circumstances that existed on that day. As a preliminary matter, the 175 µg/m3 reading occurred at only one monitor at KCBX’s North Terminal, where KCBX intends to cease bulk material handling on or before June 30, 2015. February 14, 2015: February 14th was an extremely cold, high wind day, with an outside average temperature of 15.6° Fahrenheit, and sub-hourly wind data from Chicago Midway show that wind gusts exceeded 47 mph. On-site hourly average speeds reached 16 mph at the North Terminal. Gust speeds of 30 mph or higher occurred from about 8:00 AM to 4:00 PM. During this period, which coincides with elevated hourly PM10 measurements at the NT-SE site, on-site wind speeds were consistently from the Northwest, ranging from 322 to 332⁰. Given this wind direction, the nearest residence downwind from the NT-SE monitor is about 300 yards from the KCBX fence line. Consistent with its Fugitive Dust Plan, KCBX acted proactively. A few days prior to February 14, KCBX sealed the piles with surfactant and made water truck passes around the North Terminal. After doing so, KCBX did not move any material at the North Terminal, including not moving any product on February 14th. On that day, KCBX closely monitored the North Terminal site monitors for Hogan Lovells US LLP is a limited liability partnership registered in the District of Columbia. “Hogan Lovells” is an international legal practice that includes Hogan Lovells US LLP and Hogan Lovells International LLP, with offices in: Alicante Amsterdam Baltimore Beijing Brussels Caracas Colorado Springs Denver Dubai Dusseldorf Frankfurt Hamburg Hanoi Ho Chi Minh City Hong Kong Houston Johannesburg London Los Angeles Luxembourg Madrid Miami Milan Moscow Munich New York Northern Virginia Paris Philadelphia Prague Rio de Janeiro Rome San Francisco Shanghai Silicon Valley Singapore Tokyo Ulaanbaatar Warsaw Washington DC Associated offices: Budapest Jakarta Jeddah Riyadh Zagreb. For more information see www.hoganlovells.com \\DC - 041006/000002 - 6454877 v1 George T. Czerniak Nicole Cantello March 6, 2015 letter -2- March 6, 2015 high readings and deployed employees to identify what, if any, on-site sources were potentially contributing dust to the NT-SE monitors. KCBX employees worked to prevent and address the potential for dust by operating and troubleshooting dust control equipment and monitoring the piles for emissions. At no time, did KCBX employees observe dust crossing the fence line. KCBX attempted to deploy its two rented on-site water trucks. One truck, serviced the day before and driven earlier in the day on February 14th, experienced a mechanical failure of the compressor due to the extreme cold outside temperatures; and the second truck became stuck in the process of being deployed. The events on February 14, 2015 were highly unusual. As you know, since KCBX first deployed the PM10 site monitors at the North and South Terminals, it has actively used them to assist in managing the potential for dust. Results of analyses performed on these data are summarized below: • • • 88.5% (2,836) of the measurements are below 50 µg/m 3; 98.8% (3,165) of the measurements are below 100 µg/m 3; and 99.9% (3,201) of the measurements are below 150 µg/m 3. Monitoring data from February 14th in fact demonstrate the effectiveness of KCBX’s fugitive dust program in that the NT-SE monitor is the only monitor at either the North Terminal or the South Terminal that had an unusual PM10 reading. KCBX’s On-Site Monitors Are Not Ambient Monitors: For the reasons set forth in our May 21, 2014 and June 11, 2014 letters (see attached), and in 40 C.F.R. Part 58, the KCBX monitors are not ambient air monitors as they are located in places within the KCBX fence line on private property to which the general public does not have access. See 40 C.F.R. § 50.1. Consequently, the National Ambient Air Quality Standards (“NAAQS”) for PM10 of 150 µg/m 3 (24-hour average concentration) is not applicable. Thus, the monitoring data is not an indicator of PM10 levels in the ambient air in the surrounding neighborhoods and data from the KCBX source monitors are not an appropriate legal basis for determining whether there has been an exceedance of the NAAQS PM10 or a violation of the provisions of the State of Illinois state implementation plan. Further, previous analyses have shown that PM10 concentrations decrease substantially with distance from the source, generally dropping by half within 100-200 yards downwind. Therefore, it is expected that the concentrations measured on-site would be well below the 24-hour PM10 NAAQS at the nearest residence. Again, given the wind direction, the nearest residence downwind from the monitor with the 175 reading is about 300 yards away. Please contact us should you have any questions or comments regarding this letter or the enclosed information. Sincerely, /s/ Adam M. Kushner Adam M. Kushner \\DC - 041006/000002 - 6454877 v1 Hogan Lovells US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 T +1 202 637 5600 F +1 202 637 5910 www.hoganlovells.com June 11, 2014 By Electronic Mail George T. Czerniak Director Air and Radiation Division United States Environmental Protection Agency Region 5 77 West Jackson Boulevard Chicago, IL 60604-3590 Re: KCBX Terminals Company Response to June 3, 2014 Notice of Violation Dear Mr. Czerniak: Introduction I am writing on behalf of my client, KCBX Terminals Company, to provide this initial response to the United States Environmental Protection Agency’s (EPA) June 3, 2014 notice of violation (NOV) which alleges violations of the Clean Air Act, 42 U.S.C. §§ 7401 et seq., and the Illinois State Implementation Plan (SIP). We are looking forward to our proposed June 26th meeting to further discuss the issues contained in the NOV, but nevertheless thought it would be productive to provide our initial response to the NOV in advance of that meeting. At the outset, we want to emphasize that KCBX remains committed to working with EPA to apply the best science to provide EPA and the public with the best information regarding air emissions associated with KCBX terminal operations. For this reason, KCBX has developed a stateof-the-art source air monitoring program that goes well beyond the scope of the air monitoring program required by EPA in its November 15, 2013 Clean Air Act Section 114 information request. In addition, on its own initiative, KCBX has retained world-renowned air quality and analytical sampling experts (the same experts that EPA has retained on multiple occasions) to secure their unvarnished opinions regarding community impacts, if any, from KCBX terminal operations. Those experts have analyzed and modeled the air monitoring data and have on two occasions collected extensive soil and dust sampling in the neighborhood. KCBX has shared all its data with EPA and in an April 22, 2014 meeting with EPA presented in detail KCBX’s experts’ findings that air emissions from the KCBX terminal sites were not impacting ambient air quality. Response to NOV We have reviewed the NOV and provide below detailed responses to EPA’s core allegations. As explained below, EPA has fundamentally misinterpreted the data that serves as bases for its NOV. Accordingly, the facts alleged by EPA do not give rise to a violation of the federal Clean Air Act or the Illinois SIP. Hogan Lovells US LLP is a limited liability partnership registered in the District of Columbia. “Hogan Lovells” is an international legal practice that includes Hogan Lovells US LLP and Hogan Lovells International LLP, with offices in: Alicante Amsterdam Baltimore Beijing Brussels Caracas Colorado Springs Denver Dubai Dusseldorf Frankfurt Hamburg Hanoi Ho Chi Minh City Hong Kong Houston Johannesburg London Los Angeles Luxembourg Madrid Miami Milan Moscow Munich New York Northern Virginia Paris Philadelphia Prague Rio de Janeiro Rome San Francisco São Paulo Shanghai Silicon Valley Singapore Tokyo Ulaanbaatar Warsaw Washington DC Associated offices: Budapest Jakarta Jeddah Riyadh Zagreb. For more information see www.hoganlovells.com George Czerniak -2- June 11, 2014 1. Paragraph 18 of NOV Alleges: KCBX submitted monitoring data to EPA for February 18, 2014 through May 10, 2014, which shows that on April 12, 2014, the northeast PM10 continuous monitor at the North Terminal recorded a 24 hour average of 155 µg/m3, and on May 8, 2014, the northeast PM10 continuous monitor at the North Terminal and the northeast PM10 continuous monitor at the South Terminal each recorded a 24 hour average of 156 µg/m3. KCBX Response to Paragraph 18: The majority of PM10 measured on the referenced days originated from sources other than KCBX. • The readings referenced by EPA were recorded at only 1 of 9 source monitors on April 12, and at 2 of 9 source monitors on May 8. • Although these monitors were oriented downwind of the piles on those two days, concurrent PM10 concentrations at all of the other KCBX monitors were similar. The similarity of readings across all monitors, even monitors that would not have been affected by the piles on those days, is a strong indication of the effect of off-site sources. • Moreover, observations of airborne dust from properties adjacent to the KCBX terminals site confirm the presence of other sources of particulate matter. 2. Paragraph 19 of NOV States: The data from the meteorological station at the North Plant shows that the wind on April 12, 2014 was from the south to south southwest at an average 5.5 mph, and on May 8, 2014 was from the south southwest at an average 5.6 mph, blowing across the South Plant and the North Plant toward the North Plant northeast monitor, which recorded the two values exceeding 150 µg/m3. The data from the meteorological station at the South Plant shows that the wind on May 8, 2014 was from the south southwest at an average 6 mph, blowing across the South Plant toward the South Plant northeast monitor. KCBX Response to Paragraph 19: Winds from these directions are consistent with off-site contributions from sources other than KCBX. • The fact that winds were from the south to southwest is important. Evaluation of the entire monitoring period (not just the two days cited by the EPA) shows that winds from the NW and south are consistent with offsite contributions of PM10 from sources to the NW and south of the KCBX terminals, which include a cement plant, the Beemsterboer properties, a metal recycling facility, and other current or former commercial/industrial land uses. George Czerniak • -3- June 11, 2014 In its NOV, EPA misstates the average wind speeds for the two dates in question. On those two days, winds were generally from the south to southwest with an average speed of 5.5-6 meters per second (approximately 13 miles per hour), not 5.5-6 miles per hour. 3. Paragraph 21 of NOV States: On April 23, 2014, KCBX presented information to EPA about the ratio of vanadium to nickel (V:Ni) in the soil in the Chicago area and in petroleum coke. Specifically, KCBX informed EPA that the V:Ni in background soil is about 1 and in petroleum coke ranges from 4 to 12. KCBX Response to Paragraph 21: The NOV incorrectly states that information KCBX provided at a meeting with EPA showed that the vanadium to nickel ratio in background soil in the Chicago area is “about 1.” • KCBX collected soil data and other measures of background levels of vanadium and nickel in soil in the Chicago area presented to EPA show average background V:Ni ratios of between 1.2 and 2.5, not 1. • Data presented by KCBX to EPA confirm that a pet coke signature would be much higher than the ratios found by EPA – i.e., in the range of 4.0, which EPA itself references in its NOV. This means that there is no signature for pet coke found by EPA in its wipe samples. 4. Paragraph 22 of NOV States: On May 20, 2014, EPA received results from the preliminary wipe sampling conducted on April 17, 2014. The wipe samples from five of the eleven locations sampled showed the presence of both vanadium and nickel, with V:Ni in excess of 1 in several instances. KCBX Response to Paragraph 22: All of the V:NI ratios reported by EPA are well within the ranges determined by the United States Geological Survey and the State of Illinois (and confirmed by KCBX sampling) to represent background levels in urban areas of Chicago. Using either EPA’s or the much more comprehensive study done by Dr. David MacIntosh of Environmental Health & Engineering, there is no evidence of pet coke or coal in the surrounding community. • Only one sample collected in the vicinity of KCBX North had detectable levels of both V and Ni (with a ratio of 1.0), which is consistent with background levels found throughout the Chicago area, and does not represent a signature for pet coke. • Four samples collected in the vicinity of KCBX South had detectable levels of both V and Ni, with ratios of 0.7, 1.1, 1.4 and 1.7; these ratios are consistent with George Czerniak -4- June 11, 2014 background ratios of those compounds in the Chicago area, and as with KCBX North, none of those samples show a signature for pet coke. o All of EPA’s values of V:Ni are within the ranges of ratios seen previously in soil samples collected by KCBX, US Geological Survey (USGS) and incorporated into state Tiered Approach to Corrective Action Objectives (TACO) regulations; and o None of the values measured by EPA were within the range of values measured for coal and pet coke samples from the KCBX facilities as presented to EPA, which show median V:Ni values of 3.8 and 3.5, respectively. The ranges were 1.9-9.4 for coal and 3.0-4.4 for pet coke. 5. Paragraph 23 of NOV States: The V:Ni at the sampling locations was highest at the location closest to KCBX and decreased as distance of the sampling location from KCBX increased. KCBX Response to Paragraph 23: There is no consistent evidence of higher V to Ni ratios closer to the KCBX Terminals. Both V and Ni were detected in only 5 of the 11 samples. Some sample locations closer to the KCBX terminals had lower concentrations of V and Ni than sample locations farther away from the terminals. Neither element was detected in 4 of the 11 samples, and V but not Ni was detected in 2 of the 11 samples, indicating that V and Ni levels were very low in those locations. The V:Ni relationship is indeterminate when one or the other element is non-detect. Thus, the relationship of V:Ni with distance asserted by EPA is actually interspersed with numerous samples when the element concentrations were so low that a ratio could not be determined.. Even if the relationship with distance asserted by EPA was correct, the important point is that all of EPA’s ratios are well within the ranges determined by the United States Geological Survey and the State of Illinois (and confirmed by KCBX) to represent background levels in urban areas of Chicago. • This statement can relate only to KCBX South since only 1 of the samples collected in the vicinity of KCBX North had detectable levels of both V and Ni, and the ratio of those values (1.0) reflected background. • The highest ratio of 1.7 was found at sample 7A. But the adjacent sampling site and another site nearby on the same street (samples 4A and 5A) had V and Ni levels below detection. All three of these locations are approximately 70 m from the property line of the KCBX South site. o These findings are consistent with V and Ni ratios at background levels (where measureable) and are consistent with a finding that the South Terminal is not a notable source of those metals. George CZernlak - 5 - June 11. 2014 . Sample 8A was non-detect, and rt rs closer to the South Telmlnal than the srte ln sample 13A, had delectable and NI (although the ratro was below background). . Samples 10A and 11A were collected llkely less than (mm apart lrorn each other. and they show the greatest dlflerence between any pall. Dn-Sile Monitors are No! Amhienl Monitors For the reasons set tonh rh our May 21, 2014 loner. and In 40 C.F.R. Fan 53, the KCBX on- Slle cannot be amblenl alr The KCBX are not located In "Emblem all" because they are located the tehce llne on pnvate KCBX propeny to the general publlc does not have access. To the extent EPA assen that the monrtorrng data provrdes some or levels ln the ambrent arr In the ambrent arr, that data rs not an appropnate legal basrs tor whether there has been an exceedance or the NAAQS. Conclusion In summary, the allegatlons contarned In the NOV do not vrolatrons or the CAA or the lHlnols SIP. We are lntormatlon to you lh advance or our proposed June 26'" meetlhg. so that we can contrhue to productrvely drscuss the meahrng or the arr monltorlng and dust wlpe data taken to date and provrde any necessary clanlrcatrons. Thank you fior your consrderatron cl rhfiormatron. ls/ Adam M. Kushner Adam M. Kushner Partner cc: Nrcole Cantello, EPA Regron 5 September 2015 EP! Observes !ir Emissions from Controlled Storage Vessels at Onshore Oil and Natural Gas Production Facilities Purpose The U/S/ Environmental Protection !gency (EP!) is publishing this ompliance !lert because EP! and state investigations have identified lean !ir !ct compliance concerns regarding significant emissions from storage vessels, such as tanks or containers, at onshore oil and natural gas production facilities/ The !lert discusses certain engineering and maintenance practices causing the compliance concerns and potential emissions-reducing solutions/ While this !lert provides information intended to help operators and state regulators identify and address compliance concerns, the !lert’s engineering and maintenance practices do not equate to or guarantee compliance with federal and state regulations/ and natural gas is extracted from sub-surface formations through a wellhead and then flows into a separator at varying pressures/ The separator divides material from the wellhead into various constituents, such as oil, water, hydrocarbon liquids and natural gas or comingled Storage vessels at an oil and gas production facility. Compliance Concerns liquids and natural gas, depending on the characteristics This !lert aims to help operators assess whether their of the well/ The separator has a valve that opens to vapor control systems are properly designed, sized, op“dump” the pressurized liquid into a storage vessel/ erated, and maintained such that emissions from storWhile some storage vessels are designed to operate at age vessels may be controlled in complipressures greater than atmospheric presP! and state inspecance with applicable federal and state regsure, most storage vessels currently used tors have observed ulations/ For purposes of this !lert, a for oil and natural gas production are atemissions from stor“vapor control system” includes a closedmospheric storage vessels, which are onage vessel PRDs, such as top storage vessel, all vent lines leading closed thief hatches and presly designed to operate at or below atsure relief valves/ Inadequatefrom the storage vessel, fittings and conmospheric pressure/ ly designed, sized, operated, nectors in the vent lines, any liquid knockand/or maintained vapor conStorage vessel emissions at onshore oil out vessels in the vent lines, any pressure trol systems may not effecand natural gas production facilities are relief devices (PRDs) on the vessel or vent tively capture and control regulated because they contain. (1) large lines, and the control device used to comemissions/ quantities of volatile organic compounds bust gas or route gas into the sales line/ (VO s) that contribute to the formation of ground-level !t onshore oil and natural gas production facilities, oil ozone- (2) hazardous air pollutants (H!Ps) such as ben- E zene, a known carcinogen- and (3) methane, a powerful comply with the 95 percent control requirement are. (1) greenhouse gas/ Many storage vessels at onshore oil enclosed combustion devices- (2) vapor recovery devicand natural gas production facilities generate emissions es- and (3) flares/ that can be safely and economically captured and conEP! and state inspectors have observed numerous introlled to protect public health and the stances of detectable emissions from conenvironment, and prevent loss of valuable trolled oil and natural gas storage vessels/ ump events can product/ Moving from the high-pressure overwhelm inThe primary reasons for these detectable separator to a storage vessel’s atmospheradequately deemissions are. (1) inadequate design and ic pressure causes gas to “flash” off/ In adsigned or sized vapor consizing of vapor control systems- and (2) introl systems and create dition to flash emissions, storage vessels adequate vapor control system operation back pressure that causes also have working emissions caused by and maintenance practices/ With respect to emissions to escape from liquid level changes in the storage vessel PRDs/ design and sizing of vapor control systems, during loading and unloading operations the instantaneous peak surge of flash emisand breathing emissions caused by temsions that occurs when pressurized liquid is “dumped” perature fluctuations in the storage vessel/ State and from the separator (or other upstream pressurized vesfederal laws require certain facilities to design, install, sel) to the atmospheric storage vessel – a “dump event” operate, and maintain effective pollution control – can overwhelm an inadequately designed or sized vameasures to minimize the emission of VO s from storpor control system and create back pressure that causes age vessels/ Such laws include state permitting and air VO s, H!Ps, and methane to escape from PRDs (e.g., pollution regulations – many of which are federallythief hatches and pressure relief valves (PRVs))/ !ltenforceable and collectively referred to as the State Imhough this peak surge of flash emissions may be short in plementation Plan or “SIP” – and the federal New duration, flash emissions constitute the majority of storSource Performance Standards for rude Oil and Natuage vessel emissions/ Inadequate operation and mainteral Gas Production, Transmission and Distribution (NSPS nance practices can prevent a vapor control system from achieving its full control capacity or performance and lead to sustained emissions from storage vessels/ Such emissions can be large quantities of flash emissions during dump events and working and breathing losses at all times/ For example, vapor line capacity for emissions is reduced if condensed liquid is allowed to accumulate in vent lines/ Further, inadequate operation and maintenance practices can also compromise vapor control system performance if emissions are able to circumvent routing to a control device altogether through open Infrared video image showing emissions from a thief hatch on a storage thief hatches or improperly seated PRDs/ In any of these vessel. situations, the storage vessel may be emitting VO s in OOOO)/ NSPS OOOO requires that new, reconstructed, excess of federal or state regulations/ EP! and its state or modified storage vessels with the potential for VO partners are monitoring these compliance issues/ emissions of equal to or greater than six tons per year reduce VO emissions by at least 95 percent/ That reEngineering Solutions and Maintenance Considerations duction also reduces H!P and methane emissions/ The There are numerous engineering solutions and maintethree predominant types of control devices used to D 2 nance considerations available to address underperforming vapor control systems/ This ompliance !lert highlights some options that operators are employing when attempting to address issues with vapor control system performance/ This !lert does not present an exhaustive list nor rank the engineering solutions and maintenance considerations presented herein/ !s with all engineering solutions and maintenance considerations, factors such as safety, protecting public health and the environment, timing, cost, and site limitations should be considered along with applicable regulations/ needs to handle/ This may allow an existing, under-sized vapor control system to remain in place by reducing the flow to a rate that the existing system can handle/ This is also a good approach for construction of new systems since it may allow for installation of a smaller, less expensive vapor control system, and it allows additional gas to be routed for sale/ Increase Size of Piping Used for Vent Lines (and Capacity of the Control Device if Necessary) Many vapor control systems are constructed using piping, and possibly control devices, that are too small to Reduce Liquid Pressure Prior to Transferring the Liquid effectively handle instantaneous peak flow emissions/ If to !tmospheric Storage Vessels operators observe emissions from PRDs on their storage vessels equipped with vapor control systems, they could Many operators have experience adding multiple stages consider reconfiguring the vapor control of separation to reduce the pressure of the educing flash liquid in the last stage of separation prior to system by installing larger diameter piping emissions will dumping the pressurized liquid into atmosand eliminating potential bottlenecks from typically lower the piping (e.g., excessive fittings or pipe pheric storage vessels/ !ll else being equal, the potential peak flow a smaller pressure differential between the length that reduces capacity, etc/)/ !n inrate of emissions that a vapor control system last stage of separation and the atmosphercrease in vent line capacity may result in needs to handle/ ic storage vessel will result in less gas being higher flow rates of gas to the control deflashed off the liquid during the dump vice, so control device capacity should also event/ Vapor recovery towers, surge bottles, or other be evaluated to ensure that the control device is propercomparable intermediate pressurized vessels immedily sized for the full range of gas flows/ Vapor control sysately upstream of the atmospheric storage vessel protems, whether new or existing, should be designed and vide an additional stage of separation/ The additional sized to handle what the engineering analyses (e.g., pressure reduction provided by an additional separation modeling) predict to be the worst-case or highest possistage decreases the change in pressure that will occur ble peak flow during operating conditions, including when liquid is dump events/ This ensures the vapor control systems transferred to the can handle the potential peak instantaneous flow of storage vessel and emissions without causing PRDs to open/ The system thereby reduces operating pressure may change over the useful life of the amount of the well for various reasons, including changes in forflash emissions/ mation pressure or natural gas sales line pressure/ UpReducing flash dated engineering analyses should be conducted as apemissions will typpropriate/ ically lower the Prevent Liquid Collection in Vent Lines potential peak Vapor control system performance may also be comproflow rate of emisHydrocarbon staining under a PRV mised if condensed liquids are allowed to collect in vent sions that a vapor indicating storage vessel overlines that route emissions to a control device/ onpressurization. control system R 3 densed liquid accumulation reduces vapor control system capacity, thereby inhibiting the flow of emissions to the control device, creating backpressure, and triggering the opening of PRDs/ Reducing or eliminating low points in the vapor control system’s piping configuration and installing knock out drums, drip pots, or other low-point liquid collection systems may restore some vent line capacity without the expense of installing larger diameter piping/ However, eliminating liquid collection in vent lines cannot alone prevent the opening of PRDs during normal operations if the unobstructed cross-sectional area of the existing vent lines does not provide sufficient capacity to handle the potential peak flow rate of emissions without building excessive backpressure/ maintain safe operation of the atmospheric storage vessel, rather than as a process vent during normal operations/ The PRV’s set point for opening must be set low enough to protect structural integrity and avoid overpressurization of the storage vessel, but set high enough to exceed operating pressures experienced inside the storage vessel during normal operations, including flash emissions resulting from dump events/ If an operator detects emissions from a PRV, steps should be taken to ensure that the valve has and will reseat properly after opening/ Further, if PRVs are opening on a regular basis, the operator should determine the cause(s) and either. (1) increase the set point for the PRV if there is sufficient margin between the set point and the rated pressure of the storage vessel to do so safely and still protect storage vessel integrity- (2) take steps to decrease the operating pressures experienced at the storage vessel (see above)- or (3) replace the storage vessel with a vessel that is rated to a higher pressure and then increase the set point for the PRV/ Eliminate !ny Unintentional Natural Gas Carry-Through Unintentional natural gas carry-through to a storage vessel can increase the potential peak flow of emissions to a vapor control system/ In certain instances, this will result in continuous vapor flow to a storage vessel (i.e., not just during dump events) and create enough pressure to trigger the extended opening of PRDs/ Natural gas can be unintentionally carried through to a storage vessel during a liquid dump event or through a dump valve that is stuck in the open position (i.e., where a valve failed to properly reseat)/ If operators conclude that unintentional natural gas carry-through is overwhelming a vapor control system, steps should be taken to eliminate such carry-through with maintenance and design changes (e.g., repair or replacement of a stuck dump valve, installation of a vortex eliminator, installation of an appropriately sized separator, or maintaining liquid levels in the separator above a certain level)/ Minimize Emissions from Thief Hatches To minimize emissions from closed thief hatches, operators should install quality thief hatch gaskets that are compatible with the liquids stored and regularly inspect, Pressure Relief Valves – Ensure Proper Maintenance and Set Points Infrared video image of thief hatch emissions. PRVs function as safety devices to protect against structural damage that can result from over-pressurization and should not open during normal operations/ ! PRV should be selected, installed, and maintained to ensure proper functioning as an emergency relief valve to maintain, and replace the gaskets and all other contact points to ensure a tight seal/ Similar to PRVs, thief hatches will open at a pressure set point/ The set point should be set low enough to protect against storage vessel over-pressurization and high enough to avoid open4 ing during normal operations, including instances of flash emissions resulting from dump events/ Operators should ensure that their liquid pumpers properly close thief hatches after vessel gauging and unloading/ and the State of olorado announced a judicial settlement with Noble Energy that requires innovative solutions designed to evaluate and address VO emissions from storage vessels due to under-sized vapor control systems and inadequate operation and maintenance Sampling and Modeling to Estimate the Potential Peak practices/ This settlement resulted from joint inspecFlow of Emissions tions conducted by the EP! and the State of olorado, which found evidence of emissions coming from PRDs at ! common approach to vapor control system design is many storage vessels/ Subsequent to model the potential peak flow of he EP! is undertaking an endata analyses indicated that many emissions and size the vapor control forcement initiative to ensure storage vessels were connected to system based on those results/ Modthat natural gas extraction and vent lines with insufficient capacity eling inputs may rely on data from production activities occur in a manner that sampling of pressurized liquid obprotects communities from effects that may to route all vapors to combustion devices without causing back presthreaten health or the environment/” tained from the last stage of separasure to build in the storage vessels tion prior to an atmospheric storage -Cynthia Giles, !ssistant !dministrator of the EP!’s Office of Enforcement and Compli- and PRDs to open/ The settlement vessel/ Quality control procedures ance !ssurance provides an example of potential during sample collection and analysis compliance issues that operators are critical to obtaining reliable and may experience if vapor control systems are not properaccurate sample results/ are should be taken to prely sized, designed, operated, and maintained/ Noble Envent flashing of emissions during the sample collection ergy is undertaking the following measures to help enprocedure to ensure that the integrity of the composisure compliance with federal and state regulations and tion of the pressurized liquid is maintained so that all reduce emissions. material is included in the analyzed sample/ Inaccurate “T sampling results could lead operators to underestimate the volume of flash emissions and, thus, under-design and under-size vapor control systems/  onducting engineering evaluations of vapor control systems (including revised emissions modeling), making necessary modifications to ensure the systems are properly-sized, conducting infrared camera inspections to ensure modifications are effective, and conducting a directed inspection and preventative maintenance program to ensure proper upkeep and operation- The alifornia !ir Resources oard ( !R ) “Test Procedure – Flash Emissions of Greenhouse Gases and Other ompounds from rude Oil and Natural Gas Separator and Tank Systems” is now being implemented and used by industry as a part of alifornia’s mandatory reporting of greenhouse gas emissions/ This “ !R Protocol” provides a narrative description of Gas Processors !ssociation Standard 2174 with additional guidance on the maximum rate at which pressurized liquid samples should be pulled to minimize flashing during the sampling process/ See http.//www/arb/ca/gov/cc/reporting/ ghg-rep/regulation/mrr-2013-clean/pdf (!ppendix )/  Third-party audits of Noble Energy’s engineering evaluations and infrared camera inspections at a cross-section of vapor control systems Evaluating pressure relief devices and addressing evidence of emissions from those devices Installing pressure monitors on a cross-section of vapor control systems to verify storage vessels are not over-pressurized and potentially causing VO emissions- and  Installing tank truck loadout control systems/ For more information, visit http.//www2/epa/gov/ enforcement/noble-energy-inc-settlement/ Enforcement Settlement with Noble Energy On !pril 22, 2015, the EP!, the Department of Justice, 5 systems can lead to increased emissions of VO s, H!Ps such as benzene, and methane/ In some instances, such emissions violate federal or state regulations/ In all instances, emissions from underperforming equipment erode public confidence, detract from an operator’s social license to operate in that community, and potentially harm public health and the environment/ Conclusion Responsible oil and natural gas exploration and production includes using good engineering practices to. (1) extract and route oil and natural gas to downstream operations for further processing- and (2) capture and route emissions to control devices/ Inadequately designed, sized, operated, or maintained vapor control Potential !pproaches for Improving Vapor Control System Performance  Use multiple stages of separation to operate with a smaller pressure differential between the last stage of separation and the atmospheric storage vessel to reduce flash emissions and the peak flow of emissions during dump events to the storage vessel/  Install vent piping with a diameter sufficient to handle the instantaneous peak flow of all potential emissions, including flash emissions during dump events/  Eliminate or reduce vent line low points and install drip pots or other low-point liquid collection systems as needed to avoid reductions to existing vent line capacity caused by liquid accumulation in vent lines/  If PRDs are opening on a regular basis due to storage vessel pressure, investigate whether unintentional natural gas carry-through could be occurring and take steps to eliminate it/ If repeated PRD opening is not due to unintentional natural gas carry-through. (1) increase the PRD set points if there is sufficient margin between the set point and the rated pressure of the storage vessel to do so while continuing to safeguard storage vessel integrity- (2) take steps to decrease the operating pressures experienced at the storage vessel (see previous three approaches)- or (3) replace the storage vessel with a storage vessel that is rated to a higher pressure and then increase the set points/  Install quality gaskets on thief hatches and regularly inspect those gaskets and all other contact points to ensure a tight seal, and ensure thief hatches are properly closed after vessel gauging and unloading/  Ensure that control devices are properly operated and sized to control the full range of gas flows that could be routed to them during different operational periods, including any increased flow rate that may result from retrofits to an existing vapor control system/ DISCL!IMER: This !lert puts EP! regulatory requirements in context with plain language; Nothing in this !lert revises or replaces any regulatory provisions, any other part of the Code of Federal Regulations, the Federal Register, or the Clean !ir !ct; Undertaking engineering or maintenance practices discussed in this document does not equate to or guarantee compliance with the Clean !ir !ct, its implementing regulations, and associated state and/or local requirements; For more information, visit: www2;epa;gov/compliance; 6 We've made some changes to EPA.gov. If the information you are looking for is not here, you may be able to find it on the EPA Web Archive or the January 19, 2017 Web Snapshot. Reference News Release: Noble Energy Inc. agrees to make system upgrades and fund projects to reduce air pollution in Colorado Reference News Release This is a reference news release copy, posted specially for content linking on this site. CLICK HERE to go to the regular EPA news release site. Release Date: 04/22/2015 (Denver, Colo.-- April 22, 2015) The U.S. Environmental Protection Agency, Department of Justice and the State of Colorado today announced a settlement with Houston-based Noble Energy, Inc. resolving alleged Clean Air Act violations stemming from the company's oil and gas exploration and production activities in the Denver-Julesburg Basin, north of Denver, Colorado. The settlement resolves claims that Noble failed to adequately design, size, operate and maintain vapor control systems on its controlled condensate storage tanks, resulting in emissions of volatile organic compounds (VOCs). VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis. As part of the settlement, Noble will spend an estimated $60 million on system upgrades, monitoring and inspections to reduce emissions, in addition to $4.5 million to fund environmental mitigation projects, $4 million on supplemental environmental projects, and a $4.95 million civil penalty. The case arose from a joint EPA and Colorado investigation that found significant VOC emissions coming from storage tanks, primarily due to undersized vapor control systems. Noble has agreed to evaluate vapor control system designs, significantly reduce VOC emissions, and provide reports to the public. These reports will give other companies the opportunity to learn and apply this information to emissions estimates and vapor control system designs. Using advanced monitoring technologies, Noble will be better able to detect air pollution problems in real time and ensure proper operation and maintenance of pollution control equipment. "Today's agreement demonstrates EPA's commitment to work with the state of Colorado to address regional pollution challenges," said Shaun McGrath, EPA's Regional Administrator in Denver. "Noble Energy's efforts to reduce emissions from its production facilities will benefit communities in an area of the Front Range that is currently not meeting the national air quality standard for ozone pollution. As the development of Colorado's energy resources continues, EPA will continue to engage our partners to identify practical measures to protect public health and the environment." "This first-of-its-kind settlement takes a basin-wide, systematic approach to address oil and gas emissions," said Assistant Attorney General John C. Cruden for DOJ's Environment and Natural Resources Division. "Our nation's energy security and independence requires that oil and gas production be done safely, responsibly, and lawfully. We look forward to continuing to work with states and the oil and gas industry to ensure that oil and gas emissions are minimized nationwide." Under the settlement lodged today in Colorado, Noble will perform engineering evaluations and make modifications to ensure that its vapor control systems are properly designed and sized to capture and control VOC emissions. Noble will use an infrared camera to inspect these systems, both initially to confirm capture and control of VOCs and periodically to verify proper upkeep and operation. These activities will be audited by a third-party, and Noble will develop and post reports summarizing its engineering evaluations and modifications online. Additionally, Noble will install monitors at certain storage tanks to detect tank pressure increases that may indicate possible emission releases. Noble has also committed to evaluate the condition of pressure relief valves, thief hatches, and mountings and gaskets on each storage tank and address any evidence of VOC emissions from those devices. EPA estimates that modifications to the vapor control systems will reduce VOC emissions by at least 2,400 tons per year, and that significant additional reductions will be achieved with operational and maintenance improvements. The settlement covers all of Noble's controlled condensate storage tanks in the Denver 8-hour ozone marginal nonattainment area that have vapor control systems operating pursuant to the Colorado State Implementation Plan - more than 3,400 tank batteries, which are multiple storage tanks located together. Noble must survey all of its controlled condensate storage tanks in the area and implement any needed design changes to minimize emissions and ensure compliance with state regulations. Noble already has begun this work, having focused first on its largest storage tank batteries. In addition to system upgrades, monitoring and inspections, Noble will spend at least $4.5 million on mitigation projects to reduce and prevent harmful emissions. These projects include: offloading condensate from storage tanks into tanker trucks in a closed system to prevent vapors from being emitted to the atmosphere; retrofitting diesel engines on drilling rigs and pumps used in fracturing operations to lower emissions of nitrogen oxide or ozone precursors; and replacing highemitting 2-stroke gas-fired lawnmowers being used by residents with electric lawnmowers. These projects are expected to reduce VOC and nitrogen oxide emissions by a combined 800 tons or more per year. Additionally, Noble will require its tank truck contractors to implement an alternative oil measurement standard once it is approved by relevant authorities. This would substantially reduce or eliminate VOC emissions associated with opening storage tanks' thief hatches. Noble will also complete supplemental environmental projects costing a total of $4 million. One of the projects will provide financial incentives to residents in the ozone nonattainment area to replace or retrofit inefficient, higher-polluting woodburning or coal appliances with cleaner burning, more efficient heating appliances and technologies. This project is expected to achieve emission reductions of 450 tons per year of carbon monoxide, 130 tons per year of VOCs, 60 tons per year of fine particulates known as PM2.5, and 10 tons per year of hazardous air pollutants. A second project will consist of a study - portions of which will be reported publicly - evaluating the reliability of various pressurized hydrocarbon liquids sampling and laboratory analysis techniques. The study is expected to result in more accurate data to estimate emissions associated with condensate storage tanks. Noble will spend $2 million on additional State-approved supplemental environmental projects. Noble will propose projects for State approval after the court concludes its review of the settlement. This settlement is part of EPA's national enforcement initiative to reduce public health and environmental impacts from energy extraction activities. For more information about EPA's enforcement initiative, click here:http://www2.epa.gov/enforcement/national-enforcement-initiative-ensuringenergy-extraction-activities-comply The State of Colorado will receive $1.475 million of the total $4.95 million civil penalty in this case. More on this settlement: http://www2.epa.gov/enforcement/noble-energy-incsettlement LAST UPDATED ON MAY 10, 2017 . Responding to Section 114 Letters fr0n1_ EPA The world?s leading sustainability consu anc 114 Letter Requests Using broad authorities under Section 114 of the CAA, EPA can request voluminous information related to compliance with: ■ MACT Standards ■ SIP rules ■ Title V requirements ■ PSD (look backs at potential subject projects). Request requires submittal within 30 days. Foundries have been targeted. The world’s leading sustainability consultancy 114 Letter Requests (cont.) The information requests are often very cumbersome and ask for the following information: ■ Information that is publicly available, e.g., issued permits and permit applications. ■ Stack tests (official and engineering tests) ■ Compliance Monitoring Data ■ Submitted and internal records and reports. ■ Information dating back more than the past five (5) years. EPA has asked requested information dating back to 2000 in a recent request. ■ Detailed information about capital expenditures for all capital projects in a given time frame, e.g., the past five years ■ Supporting documentation for emissions calculations The world’s leading sustainability consultancy What does EPA Want? • To find instances of non-compliance and initiate an enforcement action. • If PSD may have applied: require PSD permit application and permit including BACT and air quality modeling. • Penalties (potentially significant) The world’s leading sustainability consultancy What do you do? Get legal counsel and special assistance. Request an extension. Respond to requests fully. If you don’t have records, just say so. Counsel may object to certain requests. Assess the potential liabilities of the response materials. May want to claim some materials as “Confidential”. The world’s leading sustainability consultancy What to Expect • EPA may not respond for some time. • EPA may issue an NOV without prior discussions with source. • EPA may over reach on alleged violations. • EPA may use indirect information as “credible evidence” of a violation. • EPA may pile on multiple violations from a single cause. • EPA may re-interpret your permit, and underlying rules. • IDEM will likely not be a player. The world’s leading sustainability consultancy Playing Defense • Cooperate to the extent possible. • Written follow-up to alleged violations to correct misinterpretations of data and regulatory/ permit requirements. • Stand by your permit. • Statute of Limitations (5 years for alleged PSD issues based on 7th Circuit decision). • If there is a clear violation, get it settled quickly and move on. • Decide where the “settlement line” is and when you’d be willing to fight the issue in court. The world’s leading sustainability consultancy S. Hrg. 114-393 OVERSIGHT OF U.S. ENVIRONMENTAL PROTECTION AGENCY ENFORCEMENT AND COMPLIANCE PROGRAMS ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, AND REGULATORY OVERSIGHT OF THE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION __________ JUNE 29, 2016 WITNESSES Giles, Cynthia, Assistant Administrator, Office of Enforcement and Compliance Assurance, U.S. Environmental Protection Agency Senator Rounds. Thank you for your testimony. Senators will now have 5 minutes each for questions. I will begin. I appreciated your comments with regard to the cooperative approach with States, and specifically I would like to focus on Section 114. The EPA has increasingly issued requests for information from regulated entities under the Clean Air Act Section 114. These requests sometimes inform future regulatory actions and, in other cases, lead to enforcement action. Despite the inherent principle of cooperative federalism in the Clean Air Act, the EPA Headquarters submits these requests without including its State partners, who are most familiar with the regulated entities. Do you think this practice is consistent with the principle of cooperative federalism in the Clean Air Act, and is there any reason not to include State regulators on such correspondence, and would you consider including these State regulators on such correspondence moving forward? Ms. Giles. Thank you, Senator. Thank you for that question. As you point out, Section 114 is the authority that Congress gave to EPA to collect information to look for potential violations, so we use it for that purpose. I am not aware of the increasing use that you reference, but we do, and have, consistently used that authority to collect information about potential violations, and we also do routinely share information with States about what we know about violations or issues of concern, and they, likewise, share information they have with us. Senator Rounds. It is interesting that you bring up the fact that there is a concern as to whether or not there actually is an increasing use of it, and I am just wondering who is accountable for keeping the records of who does receive these letters and the purpose of the requests. Ms. Giles. We use 114 authorities when it is appropriate to review specific concerns that we may have about compliance. I am not aware that we separately track them, but we are careful to use them just in those instances where we have a reason to believe that there is a concern that requires attention. Senator Rounds. Would there be any reason why we shouldn't be able to keep track of the number of 114 requests that are made and their outcomes? Seems to me to be a reasonable metric to keep. Ms. Giles. Well, we do track, of course, the cases that we bring, and Clean Air cases very frequently are based on information we gain from 114 letters. Senator Rounds. Do you think that there is someone that keeps track of the number of 114s? I would just ask for the record if you don't know if there is, could we get you to followup with the Committee and find out whether or not there is someone responsible for keeping track of the 114s? And, if not, is there any reason that you could think of why we shouldn't be keeping track of the number of inquiries made to the 114 process? Ms. Giles. I am not specifically aware of a separate record that is kept, but I would say each enforcement team and regional office is responsible for ensuring the appropriate use of Section 114 letters. I would be happy to look into that further and get back to you. Senator Rounds. It would be very interesting to find out the number of 114s. As you say, if there is a perception out there that the 114s have increased, and you are not sure if they have, it would be a fact one way or another that would be useful to have in front of us for these purposes. Fair enough? Ms. Giles. I will look into that and get back to you, Senator. Senator Rounds. OK, thank you. How does the EPA justify the use of 114 letters to require operators to require a lengthy and rather expensive design evaluation that are not expressly required by current regulations? Isn't this a backdoor way of requiring the industry to change its operations without a transparent public rulemaking process of notice and comment? Ms. Giles. Thank you, Senator. The 114 authority does allow EPA to ask facilities to collect information about emissions or other relevant information to determine if there is compliance. It is not for the purpose of rulemaking; it is for the purpose of determining if there is a pollution problem that requires enforcement attention. Senator Inhofe. Let me get back, Ms. Giles, to something the Chairman was talking about on the 114s, because we have heard from people that the oil and gas companies, that these are used to pressure them to curb and monitor methane emissions before the EPA has even issued a methane rule for the industry. Now, are you contending that these are not enforcement letters, but they are, I think you said, informational letters? Ms. Giles. Thank you, Senator Inhofe. Yes, 114 letters are for the purpose of collecting information, they are not enforcement actions. Senator Inhofe. So would you confirm that they are not targeting methane, let's say, in future consent decrees? Ms. Giles. I am not aware of the specific matter that you are referring to, but Section 114, that section of the statute, does give EPA the authority to ask companies for information about pollution and emissions as we are looking into the potential violations that may be occurring. Senator Inhofe. We all talked about and made our own comments about what happened in Paris and the President coming up with a commitment that he would be reducing CO2 emissions by between 26 and 28 percent by 2025, and then we made an effort through every group we could find, including the EPA, to determine how he is going to do that and we haven't been able to find anyone who has any idea. In fact, I don't think it can be done. I don't think he does either. But it appears that your office stepped up enforcement of VOC emission requirements against the oil and gas sector, and the chairman commented, as a backdoor effort for the EPA to cut greenhouse gas emissions. Now, the question I would ask you is have you been pressured or do you have any kind of a mandate to reduce greenhouse gas emissions through enforcement against utilities and the oil and gas industry to help the President meet these climate commitments? Has that happened? Ms. Giles. No, it hasn't. Senator, I think what you may be referring to is some enforcement work that EPA has done with respect to VOC emissions, as you mentioned, from the oil and gas sector, which is with respect to existing laws that have long been in effect, and deal with pollution issues in some communities that are quite significant in the formation of ozone as a result of some of these industries. Senator Inhofe. In a broader perspective on your regulations that you are in the process of doing, have you been talking to the Administration about seeing what regulations can be adjusted or changed or put forth that would help them meet these requirements? In other words, nobody knows how he is going to get to a 26 percent reduction, and I am if you have had conversations with them saying, through the regulation, what can you get done. Ms. Giles. Senator, the Enforcement Office doesn't write regulations, so I am not aware of what conversations---- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION B 1595 Wynkoop Street Denver, CO 80202-1129 Phone 800~227-8917 www. epa. gov/reg ion08 St!' &2016 Ref: SENF-L CERTIFIED MAIL# 7009 34IO 0000 2596 5609 RETURN RECEIPT REQUESTED Paul R. Williams Operations Manager Bakken Asset Team Marathon Oil Company 3172 Highway 22 North Dickinson, Nm1h Dakota 58601 Re: Section 114(a) Information Request for Marathon Oil Company's Oil and Natural Gas Operations in North Dakota Dear Mr. Williams: The United States Environmental Protection Agency hereby requires Marathon Oil Company (Marathon) to provide certain info1mation to detenuine the Clean Air Act (CAA) compliance status of its oil and natural gas operations located in North Dakota. The EPA is investigating the release of hydrocarbon gases on January 7, 2012, at Marathon's storage tanks that produce from Buffalo 12-I-l and Elk Creek wells located Northwest of Killdeer. ND. Pursuant to section ll4(a) of the CAA, 42 U.S.C. § 7414(a). the Administrator of the EPA is authorized to require any person who owns or operates an emissions source to establish and maintain records, make reports, sample emissions (in accordance with the procedures and methods that the Administrator shall prescribe) and provide such other information as she may reasonably require for the purposes of determining whether such person is in violation of any provision of the CAA. This authority has been delegated to the undersigned official. For the EPA to determine whether a violation of the CAA has occurred, you are hereby required, pursuant to section 114(a) of the CAA, to provide responses to Requests 1-18 herein (Enclosure 2). Accordingly, within thirty (30) calendar days from receipt of this request, you must respond in full to Enclosures 2-3. Instructions and definitions are provided in Enclosure 1 and the information being requested is contained within Enclosure 2. You arc required to attach a properly executed Statement of Certification (Enclosure 3) to your response to this request. The statement must be signed and dated. You are under an obligation to preserve all documents requested in this letter until you receive further instructions from the EPA. Failure to provide the required infonnation is a violation of the CAA and may result in one or more of the following actions: 1) issuance of an administrative penalty order pursuant to section 113(d) of the CAA, 42 s.c. 7413(d); 2) issuance cfan order requiring compliance with this request: 3) the initiation oi'a civil action pursuant to section 113(b) ofthc CM, 42 US c. MI and/or 4) any other action authorized under the CAA. In addition. knowingly providing false infurmaiion in response to this information request may be actionable under section 113(c) oftlte CAA, 42 U.S.C. 7413(e)_ and 18 U.S.C. 1001 and 134] The infomtation you provide may be used by the EPA in adtniniernuve. civil, and criminal proceedings. Under section l4(c) oftlie CAA. 42 U.S.C. 74l4(c), and pursuant to regulations at 40 CPR. Part 2. including 40 CPR. 2301. you are entitled to claim as confidential any information you provide to the EPA which involves trade secrets and is regarded as confidential business information by you. For such information. you may request that the EPA treat such information as confidential. Any such claim for confidentiality nntsi conform to the requirements of40 Grill. 22030:). Note that emission cam cannot be claimed as confidential under section 1 14(0). For detailed please see Enclosure 4 to this letter. Information you supply will be treated as confidential business information to the degree determined to be appropriate according to the regulations. if you fail to furnish a business confidentiality claim with your response to this information request' EPA will construe your foilure as a waiver of that claim. and the information may be made available to the public without l'urther notice to you. confidentiality. Please submit your response to this request to: U.S. Environmental Protection Agency, Region 8 Technical Enforcement Program Attention: Greg Bazley (BENF-AT) Office of Enforcement. Compliance and Environmental Justice 1595 Wynkoop Street Denver. Colorado 8020271129 If on have an questions regarding this lnfon-nanon Request, please contact Greg Eazley, at "or your counsel may Contact Lauren Hammond. Sincerely. Suzanne J. Bohan Assistant Regionni Administrator Office of Enforcement, Compliance and Environmental Justice Enclosures: (1) Instructions and Definitions (2) Information Requested (3) Statement of Certification (4) Confidential Business lnfomtation cc: Terry O'Clair, North Dakota Department of I Icalth (w/encl) Jim Semerad. North Dakota Department of Health (w/encl) ENCLOSUR E2 INFORMAT ION REQUESTE D In accordance with the authority outlined in the cover letter of this request, this infonnation request pertains specifically to those oil and gas operations that you own or operate within North Dakota. Information requested below must be provided to the EPA within 30 days from the date of this request. l. The EPA is aware of a release of hydrocarbon gases on January 7, 2012, from a storage tank (or multiple storage tanks) owned by Marathon, at the tank battery producing from the well sites identified as Buffalo 34-121-I (NDIC number 330250!177) and Elk Creek 33-l2H (NDIC number 3302501178) located Northwest of Killdeer, ND. This is the same date and reported location where Dustin Bergsing, a flow tester, was found deceased. Please confirm that the preceding date and location is accurate and provide the latitudinal and longitudinal coordinates of the location. 2. At the location described in Request 1, above, provide the number of storage tanks located at that tank battery, the contents of each of the storage tanks on January 7, 2012 (i.e. produced water or oil). Additionally, provide the following: a. b. The speciiic storage tank(s) identification number(s) and specify which of the storage tanks was affiliated with the fatality; and The approximate volume of the contents of the specific storage tank on January 7, 2012. Also provide the storage capacity of the storage tank. 3. Provide all documents, such as sales agreements or other contracts with midstream or downstream entities, which describe when, why, and how m1y midstream or downstream entities, their contractors, or their subcontractors are allowed to access any of your storage tanks identified in your Response to Request 2, above, from September 2011 until the date of your response. In addition, identify the midstream or downstream entity(ies), contractor(s), or subcontractor(s), and Marathon employees that were onsite on January 7, 2012. 4. For the storage tanks identified in your Response to Request 2, above, and from the date of December 1, 2011, through the date of your response, provide all logs or other documentation reflecting when the storage tanks were accessed by you, your employees, yom contractors, or your subcontractors, and the reason for that access (e.g., gauging, flow testing, offloading, or maintaining the tanks). 5. Provide all industry standards that apply to operating and maintaining the storage tanks identified in your Response to Request 2, above. In addition, provide the following: a. All Standard Operating Procedure (SOP) documents and all supporting documentatio n of the existence of a SOP or any written requirements of those who are employed or contracted by Marathon to access its storage tanks (e.g. company policies, procedures, manuals, reports, memoranda, emaiis, and/or any 5 other written documentation) beginning on December l, 2011, through the date of your response; and b. Any and all SOPs or written documentation that are referenced, used, read, or followed by any person accessing your storage tanks lbr the purposes of: 1. n. 111. 6. 7. Measuring or gauging the volume of produced oil in those tanks, by, for example, employing the tank gauging technique described in American Petroleum Institute's Manual of Petroleum Measurement Standards; Collecting produced oil from those tanks for transport; and/or Evaluating the physical condition of those tanks or maintaining the storage tanks in good working order. Describe in detail~and provide any documents pertaining t(}----any gas detection or monitoring devices used by you, your contractors, or your subcontractors, to determine the working conditions present when accessing a storage tank. In particular, describe: a. The date on which requirements for gas detection or monitoring devices were first required, if ever; b. Each type of gas monitor(s) used and identify the manufactmer, make, and model of the gas monitor(s); c. If and under what circumstances an individual accessing one ofyom storage tanks is directed to wear a gas monitor; d. If and when an individual accessing one of your storage tanks is directed to wear a gas monitor; e. How often the monitors must be calibrated to ensure accuracy; f. The dates of each calibration; g. The data recorded by the monitor when it is in operation (e.g., location,% LEL time, duration of exposure, etc.); and h. When, where, and how often data measured or recorded by the gas monitors are downloaded or otherwise transferred to a computer for storage, review, or analysis. Identify any computer software used by Marathon to store, review, or analyze infmmation retrieved from gas monitors used by any person accessing your storage tanks as identified and discussed in your response to Request 6, above, from the time peliod of December 1, 2013, through the date of your response. In addition, describe, and provide 6 documentatio n of: 8. a. How and the frequency that data is retrieved from any gas monitors; b. Yom data retention practices for such data; and c. Any data review or analysis practices you use to assess the data for any reason, including, but not limited to, contract compliance monitoring, employee petformance rewards, or equipment monitoring or malfunction detection. Provide all gas monitoring data retrieved from the gas monitors discussed in your Response to Request 6, above, for the period of December 1, 2011, through the date of your Response, and provide the data in a fonnat such that all infommtion can be readily viewed in Microsoft Access. In particular, provide: a. b. c. 9. Describe any safety-oriente d training given to or required of any persons accessing Marathon's storage tanks for the purposes of gauging, flow testing, offloading, or maintaining those tanks. a. b. 10. From December 1, 2011, through the date of your Response, provide the position(s) of the person(s) who instructs the training and his/her qualifications to do so; and The dates and locations of each training. For any training identified in your Response to Request 9, above, provide: a. b. 11. The raw data, in its native eleCtronic format, as it is retrieved from the gas monitoring equipment; Any data summaries or database reports describing the data that you, your contractors, or your subcontractors developed in the ordinary course of your business for the same time period and the location of all gas monitors during the timeframe specified, above; and Any additional information that may be necessary to meaningfully review the data, including, but not limited to, rosters that identify which employee, contractor, or subcontractor was using a given gas monitor at a given time. Any documents describing the training's purpose and content including, but not limited to, training manuals or curricula; and Any training logs or other docwnents recording attendance or completion of the identified trainings for any employees, contractors, or subcontractor s for the period of December 1, 201 1, through the date of your response. In addition to the gas monitoring devices discussed in Request 6, above, describe any other Personal Protective Equipment (PPE) required to be used by persons when accessing your storage tanks. Additionally, describe any other PPE that may not be 7 required but is used by persons when accessing Marathon storage tanks. In particular identify: a. b. c. d. Types of respirators and records of fit testing for respirator use; Types of gas masks that individuals may be wearing; If and under what circumstances an individual accessing one of your tanks is directed to wear a respirator or gas mask; and Whether you or another entity provides the respirator or gas mask, as well as the fit testing. 12. Produce any documents setting forth the technical specifications of, industry standards, or standard operating procedures for using all PPE identified in Request 11, above. 13. Produce any hazard assessment documentation or industrial hygiene analyses pet1aining to storage tanks identified in your response to Request 2, above. 14. For the time period of September 1, 2011, through the date of your response, produce any near-miss reports, incident reports, root cause analysis, substantial equipment damage, or other documentation regarding injuries, deaths, illnesses, or accidents involving your employees, contractors, or subcontractors while gauging, flow testing, unloading, maintaining, or otherwise accessing your storage tanks. For each incident identified, provide the date, time, and location of the incident. 15. Provide any documentation of standard practices that Marathon utilized in the past 5 years for the design and operation of Marathon's reduced emission completion facilities in North Dakota. In addition, provide the following: a. b. c. d. e. 16. The Process and Instrumentation Design (P&ID) for standard equipment at the production facility; The Process and Instrumentation Design (P&ID) used in practice for each facility constructed in the past 5 years; If and when Marathon deviates from the P&ID submit what those deviations are and the reason(s) for the deviations; A schematic of any deviations fi·om the P&ID; and Following the reduced emission completion, describe what equipment is removed from the facility. For the time period of September 1, 2011, through the date of your response, provide whether the tanks identified in your Response to Request 2 had a documented venting event either observed/documented by a state inspector, EPA inspector, or any contractor, subconu·actor, or employee of Marathon. For each venting event identified, provide the following: a. b. c. The date on which it occurred; Identification of the individual who observed the venting event; The component on the tank that was venting; and 8 d. 17. 18. If the venting component was fixed, replaced, or otherwise addressed and the date on which that occurred. Identify and provide documentation of any industry practice/SOPs that Dustin Bergsing was required to follow, particularly on January 7, 2012. In addition, provide all of the following responsive data from September 1, 2011, until January 7, 2012: a. Data from all gas monitors worn by Dustin Bergsing; b. The date(s) of calibration for any gas monitors Dustin Bergsing wore; c. The dates and description of any training provided to Dustin Bergsing and identify all persons who trained Dustin Bergsing and their qualifications/years of experience/certifications to train workers that access Marathon's storage tanks for the pmposes of flow testing, gauging, and otherwise operating and maintaining the storage tanks; and d. Provide the name(s) of the person(s) and the position(s) of the person(s) present at the Marathon storage tanks on January 7, 2012, where the incident occulTed. If no other person was present, please state as such. Identify the first employees, contractors, or subcontractors of Marathon to arrive at the location on January 7, 2012, following the incident. Provide a narrative of the events or circw11stances that caused or substantially contributed to the fatality ofDustin Bergsing on January 7, 2012. 9 UNITED STATES ENVIRONMEN TAL PROTECTION AGENCY REGION 8 1595 Wynkoop Street Denver, CO 80202-1129 Phone 800-227-8917 www.epa.gov/region08 Ref: 8ENF-L SEP 6 2016 CERTIFIED MAIL# 7009 3410 0000 2596 5449 RETURN RECEIPT REQUESTE D Bradley A. Aman Vice President, Northern Region Production Continental Resources, Inc. 20 North Broadway Oklahoma City, Oklahoma 73126 Re: Section 114(a) Information Request for Continental Resources Inc. ' s Oil and Natural Gas Operations in North Dakota Dear Mr. Aman: The United States Environmental Protection Agency hereby requires Continental Resources, Inc. (Continental) to provide certain information to determine the Clean Air Act (CAA) compliance status of its oil and natural gas operations located in North Dakota. The EPA is investigating the release of hydrocarbon gases on April28, 2014, at Continental's storage tanks that produce from the Columbus Federal 2-16H well, located approximately 19 miles north of Alexander, North Dakota. Pursuant to section 114(a) ofthe CAA, 42 U.S.C. § 7414(a), the Administrator ofthe EPA is authorized to require any person who owns or operates an emissions source to establish and maintain records, make reports, sample emissions (in accordance with the procedures and methods that the Administrator shall prescribe) and provide such other information as she may reasonably require for the purposes of determining whether such person is in violation of any provision of the CAA. This authority has been delegated to the undersigned official. For the EPA to determine whether a violation ofthe CAA has occurred, you are hereby required, pursuant to section 114(a) ofthe CAA, to provide responses to Requests 1-18 herein (Enclosure 2). Accordingly, within thirty (30) calendar days from receipt of this request, you must respond in full to Enclosures 2-3. Instructions and definitions are provided in Enclosure 1 and the information being requested is contained within Enclosure 2. You are required to attach a properly executed Statement of Certification (Enclosure 3) to your response to this request. The statement must be signed and dated. You are under an obligation to preserve all documents requested in this letter until you receive further instructions from the EPA. Failure to provide the required information is a violation of the CAA and may result in one or more of the following actions: 1) issuance of an administrative penalty order pursuant to section 113(d) of the CAA, 42 U.S.C. § 7413(d); 2) issuance of an order requiring compliance with this request; 3) the ini ation ofa civil action pursuant to section 113(b) ofthe CAA. 42 741303); and/or 4) any other action authorized under the CAA. In addition. knowingly providing false information in response to this information request may be actionable under section 113(c) orthe CAA, 42 U.S.C. 7413(c), and 18 U.S.C. 1001 and 1341. The information you provide may be used by the EPA in administrative. civil, and criminal proceedings Under section 1 14(0) ofthe CAA. 42 U.S.C. 7414(5), and pursuant to regulations at 40 C.F.R, Part 2, including 40 C.F.R. 2301. you are entitled to claim as confidential any information you provide to the EPA which involves trade secrets and is regarded as confidential business information by you. For such infomlation, you may request that the EPA treat such information as confidential. Any such claim for confidentiality must conform to the requirements of40 C.F.R. Note that emission data cannot be claimed as confidential under section 114(c). For detailed instructions. please see Enclosure 4 to this letter. Information you supply will be treated as confidential business information to the degree determined to be appropriate according to the regulations. Ifyou fail to furnish a business confidentiality claim with your response to this information request, the EPA will construe your failure as a waiver of that claim, and the information may be made available to public without funher notice to you. confidentiality Please submit your response to this request to: U.S. Environmental Protection Agency, Region 8 Technical Enforcement Program Attention: Greg Bazley (8ENF-AT) Office of Enforcement, Compliance and Environmental Justice 1595 Wynkoop Street Denver, Colorado 80202-1129 If ou have an questions regarding this Information Request, please contact Greg Bazley, at H, or your counsel may contact Lauren Hammond. at -- sincerely, %%eflh, Suzanne J. Bohan Assistant Regional Administrator Office of Enforcement, Compliance and Environmental Justice Enclosures: (1) Instructions and Definitions (2) Information Requested (3) Statement of Certification (4) Confidential Business Information KEN PAXTON ATTORNEY GENERAL 01' TEXAS March 1, 2017 Hon. Scott Pruitt, Administrator U.S. Environmental Protection Agency Office of the Administrator, 1101A 1200 Pennsylvania Avenue, N.W. Washington D.C. 20460 Re: Request to Suspend and Withdraw the Environmental Protection Agency's Information Collection Request for Existing Oil and Gas Facilities, EPA ICR No. 2548.01; from the State of Texas, from the State of Alabama, from the State of Arizona, from the State of Kansas, from the State of Kentucky, from the State of Louisiana, from the State of Mississippi (by and through the governor), from the State of Montana, from the State of Oklahoma, from the State of South Carolina, and from the State of West Virginia Dear Administrator Pruitt: We write to express our concern with the pending Information Collection Request (Request) for Oil and Gas Facilities, EPA ICR No. 2548.01, and request that it be suspended and withdrawn. The information request was issued on November 10, 2016 and requires oil and natural gas companies to provide voluminous information and survey responses in support of the Obama Administration's initiatives to impose onerous requirements upon industry to reduce emissions of greenhouse gasses, such as methane. As you are aware, 15 States, as well as industry partners, challenged the Obama Administration's attempts to govern emissions of greenhouse gasses from a broad spectrum of new facilities within the oil and natural gas sector. See North Dakota v. EPA, Case No. 16-1242 (D .C. Cir.); State of Texas v. EPA, Case No. 16-1257 (D.C. Cir.); State of West Virginia v. EPA, Case No. 16-1242 (D.C. Cir.). 1 These matters were recently consolidated with pending challenges to the Obama Administration's earlier rules targeting emissions of other compounds from oil and natural gas facilities. See Am. Petroleum Inst. v. EPA, Case No. 13-1108, and consolidated cases. The litigation in these matters has just begun, but it relates to a common theme from the Obama Administration-the issuance of onerous regulations The States that are in this pending litigation are: Alabama, Arizona, Kansas, Kentucky, Louisiana, Michigan, Montana, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Texas, West Virginia, and Wisconsin. 1 Post Office Box 12548 , Austin , Texas 78711 -2548 • (5 12) 463-2100 • www. texasattorneygeneral.gov Hon. Scott Pruitt Page 2 and requirements in support of an overall climate agenda targeting multiple industry sectors that will create an economic drag on our nation's economy with dubious environmental benefit. We also disagree with EPA's assumption that it possesses clear authority to regulate methane under section lll(d) of the Clean Air Act without a specific methane endangerment finding. This information request furthers the previous administration's climate agenda and supports the next and most onerous phase of the Obama Administration's regulations targeting the oil and gas industry-the imposition of burdensome climate rules on existing sites, the cost and expense of which will be enormous. The burden of the Request is disproportionate to its benefit. We believe the EPA's requests to be an unnecessary and onerous burden on oil and gas producers that is more harassment than a genuine search for pertinent and appropriate information. Among the 114 inquiries of the Request, many state regulatory agencies already have up-to-date records and data available and responsive to many of the EPA requests. And yet the EPA has not adequately attempted to work with state agencies to develop less burdensome avenues to acquire much of the data sought. For other information sought in the Request, oil and gas producers are required to gather data and information that does not provide an environmental benefit. The EPA's own estimates claim the industry cost of responding to the Request is about $42 million: $18 million to respond to the operator survey and $24 million to respond to the more detailed facility survey, or between $1,100 and $5,800 for each company to respond to and complete the Request. Experience indicates that the true cost and burden is undoubtedly much higher and comes at a time when the oil and gas industry is recovering from its most significant economic downturn in decades. Many of the companies can ill-afford the time and expense to comply with yet another empty regulatory burden. We hope that the burdensome Obama climate rules never see the light of day, which is why we ask that this Information Collection Request be suspended and withdrawn. At a minimum, we suggest that the EPA: (1) grant a 180-day extension for any required response ; (2) take no enforcement against companies that do not respond; (3) allow companies to use "best estimate" data and information; and (4) work with state regulatory agencies to acquire pertinent and appropriate information. We appreciate that the Administration has many priorities and that this request may require additional deliberation. Please consider an immediate suspension of the Information Collection Request pending internal review by the EPA concerning whether it should withdraw the Request. We appreciate your prompt consideration to this matter. Hon. Scott Pruitt Page 3 Sincerely, Ken Paxton Attorney General of Texas Steven T. Marshall Attorney General of Alabama -=:DAk. ..sS-: LfMark Brnovich Attorney General of Arizona Derek Schmidt Matt Bevin Governor of Kentucky Jeff Landry Attorney General of Louisiana Phil Bryant Governor of Mississippi Tim Fox Attorney General of Montana ... Mike Hunter Attorney General of Oklahoma Patrick Morrisey Attorney General for West Virginia Alan Wilson Attorney General of South Carolina NORTH AKO TA PE ROLEUM (I l' (I l- IOO Wcs' Broodwoy. Site. 200 Box l395 Bismu?til, ND 58501 l395 223 6380 r?dpcm?doilorg March 31, 2017 Environmental Protection Agency Mr. Scott Pruitt, Administrator Mail Code 28221T 1200 Ave. NW Washington, DC 20460 Dear Mr. Pruitt; Congratulations on your appointment as Administrator of the Environmental Protection Agency. 1 am the President of the North Dakota Petroleum Council (NDPC) and wanted to take this opportunity to tell you about the overreach of the prior administration that continues to affect NDPC members. Under the previous administration, EPA initiated sweeping Clean Air Act (CAA) Section 114 information requests and threatened company-ending sanctions under the CAA against oil companies operating in North Dakota. style and process were often contrary to the North Dakota Department of Health?s alternative approach to Clean Air Act Enforcement. In the one consent decree that EPA completed before the election, North Dakota refused to sign the ?nal decree, even though had participated fully in months of EPA driven negotiations with the operator. The North Dakota approach produced industry-wide results that immediately bene?tted the environment in a shorter time?ame, with substantially less cost and included continued future compliance opportunities. Unfortunately, despite the successful North Dakota effort, we continue to see EPA focused on an aggressive, federal-only approach adopted under the earlier administration. We respectfully request, consistent with your recent internal directive and President Trump?s March 28, 2017 Executive Order, Promoting Energy Independence and Economic Growth, that you review ongoing enforcement activities in North Dakota to determine whether they are consistent with your and the Trump Administration?s approach to environmental protection and regulation.? We also ask that you seriously consider adoption of the approach to Clean Air Act enforcement and take steps to amend, with court approval, the existing federal consent decree to add North Dakota (ND) so that the state continues to play an important role in protecting its environment. The attached documents describe the EPA Section 114 enforcement process, and contrasts it with the approach that North Dakota utilized. The information provided will show that ND achieved industry-wide compliance plus (above current regulations) in one-third of the time required by EPA to negotiate a settlement with one ND operator. NDPC believes that you will ?nd this information of interest as you seek to make EPA a more effective and ef?cient agency, which works with states to implement, enforce and adopt resolutions that directly bene?t the environment. Please call or email with any questions you may have. We welcome the opportunity to discuss this with you and would be available to travel to Washington, DC if you feel it would be bene?cial. Thank you for your time and consideration. Ron Ness President cc: President Donald Trump ND Governor Doug Burgum Senator John Hoeven Senator Heidi Heitkamp Senator Cory Gardner Congressman Kevin Cramer 1 We understand that, on March 2, 2017, EPA Headquarters Assistant Administrators (MS) and Regional Administrators (M5) were noti?ed that the Administrator was retaining approval authority for actions having signi?cant regulatory and enforcement effect. The MS and RAs were directed to ?identify and send upward any proposed decisions or ?nal agency actions for the Administrator?s review" those items that ?would limit the ?exibility of the States, limit energy resource use, impose signi?cant costs on industry or commerce, or otherwise likely result in signi?cant public attention on the proposed decisions or ?nal agency actions.? See Pruitt Withdraws Decision-Making Powers From Senior Of?cials. 1. The North Dakota Petroleum Council. The North Dakota Petroleum COuncil is a trade association representing more than 510 companies involved in all aspects of the oil and gas industry in North Dakota, South Dakota, and the Rocky Mountain Region. North Dakota is ranked second in the nation in the production of oil and gas, and NDPC members produce 98 percent of the oil and gas in North Dakota. North Dakota produces approximately 350 million barrels of oil per year and 567 billion cubic feet of natural gas per year. In 2015, the economic bene?t from the oil and gas industry in North Dakota was approximately $34 billion. North Dakota has two major economic generators, agriculture and energy. The state has more than 13,000 producing wells, and anticipates the development of tens of thousands of additional wells in the coming decades. North Dakota is only one of seven states to meet all national ambient air quality standards. 2. The EPA CAA Enforcement Process. Under the Obama Administration, EPA has, in the past two years, pursued a policy of changing regulatory standards via purported enforcement actions in North Dakota. This ?sue and settle? strategy threatened companies with draconian penalties, effectively making settlement the only realistic option, generating new industry-wide ?rules? that were not created in a formal rulemaking. EPA, without consent as the concurrent regulatory authority, utilized its rarely-justi?ed ?over-?ling? authority under the Clean Air Act in an attempt to develop new, basin-wide storage tank standards outside of the normal rulemaking procedures. ?sue and settle? paradigm is slow and costly, and inherently unfair to the companies that are singled out. To pursue this policy regarding storage tank fugitive emissions, EPA ?rst conducts ?eld inspections to identify and allege violations (material and immaterial) of the Clean Air Act. Next, EPA uses Section 114 to collect detailed information about all companies? facilities where any alleged violations were observed. Finally, EPA threatens enforcement actions under Section 113 of the CAA, using emissions calculated using a proprietary model and extrapolating the penalty amount to include all days since the alleged violation at the maximum penalty amount of $37,500 per day per violation. To avoid the costly litigation with potentially massive penalties and negative publicity, the companies are forced to settle by executing a Consent Decree based on interpretation of the applicable rules. The Consent Decrees often contain requirements for the companies to adopt sweeping changes to monitor operations, including an emphasis on ?next- gen? technologies to gather information on, for example, methane emissions, escaping Paperwork Reduction Review Act requirements that would be required in a formal rulemaking effort. a. Field Inspections. During the summer of 2014, EPA conducted several inspections of oil and gas facilities in North Dakota, on and off the Fort Berthold Indian Reservation (FBIR). EPA used AVO (audio, visual and olfactory) inspections and FLIR (Forward Looking Infrared Technology) cameras to detect fugitive emissions. Using FLIR technology in ?igitive emissions detection and routine inspections was not required by any federal rulemaking until August 2, 2016 under EPA Quad 0a, and no federal rule currently requires use of FLIR emissions technology for existing facilities. The LIR camera has a very high resolution so it is capable of detecting, without quantifying, minor immaterial leaks that would not otherwise be capable of detection by an operator?s standard AVO inspections. In some instances, the fugitive emissions observed by LIR cameras were from storage tank equipment such as thief hatches or pressure relief valves, equipment that is designed to provide ?pressure relief as part of normal and safe operations. Many of the fugitive emissions were also due to routine and expected performance of gaskets, seals, and other equipment that wears and becomes dirty during normal, intended use. b. The Noble Energv Consent Decree. The ?rst example of the ?sue and settle? strategy related to storage tank emissions in the oil patch occurred in 2014 and 2015 in Colorado?s Denver- Julesburg Basin. In April 2015, EPA, the US. Department of Justice, and the State of Colorado entered into a Consent Decree with Noble Energy, Inc. for its alleged violations of Section 113 of the CAA. EPA has held up the Noble Consent Decree as the template for national enforcement campaign regarding storage tank fugitive emissions and the model for compliance in North Dakota. EPA interpreted North Dakota?s rules and regulations to be similar to the those applicable to nonattainment areas in Colorado. But the differences far outweigh any similarities. North Dakota?s laws differ from Colorado. North Dakota is in attainment for ozone and, understandably, its air quality regulations are therefore much less onerous than Colorado?s regulations. Nevertheless, apparent goal is to use the Colorado nonattainment regulations and the Noble Consent Decree as a template for oil and gas operations nationally, even for attainment areas. This is directly at odds with the dynamic of ?cooperative federalism? at the core of the Clean Air Act, which affords each state the ?exibility to develop and implement its own regulations to meet national air quality standards. c. EPA Section 114 Information Requests. When a company receives a Section 114 information request, it can take easily six months and hundreds of man-hours, both in the ?eld and of?ce, to provide the required information. In addition, because EPA has in the past threatened signi?cant sanctions for imperfect compliance, companies must spend substantial sums on outside counsel to reduce the risk faced by just providing EPA the request information. (1. Alleged Violations of the Clean Air Act - Design Flaws and The Picard Model. To identify alleged violations of the CAA, EPA relies on conclusions provided by a Canadian company, Clearstone Engineering Ltd, and its engineer, David Picard. Picard developed a proprietary model (the Picard Model)?different from the many off-the?shelf models available to companies?that essentially ?nds that all of the oil facilities were prone to emissions because they had design ?aws. The bias toward design ?aws was apparent in the Noble Consent Decree and the NDPC members? interactions with EPA. The Picard Model was at the heart of EPA design ?aw assertion, but because the Picard Model was proprietary it had not been subjected to peer review or public comment, nor mandated by agency rulemaking. The companies in the Section 114 process were not allowed access to the Picard Model but were required to accept its results. The Picard Model was developed for determining vapor generation rate for the worst-case conditions at a production facility. In other words, the Picard Model determines whether a facility is capable of handling peak vapor ?ow during worst-case conditions, that occur in?'equently if at all. EPA then uses Picard Model results, assuming all of an operator?s facilities Operate in constant worst-case conditions, and calculates unrealistic emissions estimates. Using these drastically overestimated emissions estimates, EPA calculates and threatens multi-billion dollar civil penalties, on the basis of statutory maximum daily penalties, to scare operators into one-sided settlement negotiations. To our knowledge, EPA or Clearstone did not validate the Picard Model against real world performance. Because of the errors and erroneous assumptions in the Picard Model, EPA claimed that operators had violated major federal air regulations and were subject to multibillion dollars in ?nes, but those claims had no basis in science or observed emissions. e. Negotiatitm of the Consent Decree. After EPA identi?ed the violations, it would skip issuing a Notice of Violation and move to settlement negotiations. To start the settlement process, EPA typically holds an all hands on deck meeting with the company and representatives from EPA legal and enforcement divisions as well as the Department of Justice. At one such meeting, there were ?ve EPA attorneys, ?ve EPA technical/enforcement personnel and two Department of Justice attorneys. At the meeting, EPA would typically present the results of its analysis of the 114 information after running it through the Picard Model, and the ?eld inspection, and extrapolate the alleged violations over the time-period since the inspection, and calculate a theoretical maximum penalty amount at $37,500 per day per violation. The company is presented two options, proceed to litigation or negotiate a settlement embodied in a Consent Decree. These negotiations often go on for a year or more and involve hundreds of company man-hours and hundreds of thousands of dollars in attorney?s fees and third party engineering and modeling experts. f. Consent Decrees. In the ?rst 30 months of the Section 114 effort in North Dakota, EPA settled with only one company in early November 2016. Notably, though the North Dakota Department of Health initiated a signi?cant effort to address emissions and made substantial progress with most of the industry, EPA demanded terms relating to third party audits and extensive design analysis that were not found in any regulatory requirement. Because EPA steadfastly insisted these onerous settlement terms, did not sign as a party to the Consent Decree?even after spending substantial efforts to try to accommodate unlawful demands. That company spent substantial time and effort in the of?ce and in the ?eld working through the Section 114 process. The cost to that company for third party consultants, engineers, and attorneys exceeded $1.2 million. Months and hundreds of man-hours were required to provide the information required by the Section 1 l4 request, prior to the negotiation phase. The negotiation phase for the company involved in the settlement with EPA lasted over a year, and involved countless meetings all attended by EPA enforcement personnel, EPA lawyers and at least one DOJ lawyer. In addressing storage tank emissions, Section 114 ?sue and settle? process has proven to be expensive, inef?cient, and unnecessary. enforcement model addresses the goal of minimizing emissions as quickly as possible and has achieved signi?cant emissions reductions via cooperative settlements with numerous companies. In contrast, EPA has signed one Consent Decree in North Dakota that took over two years from the ?eld inspections to execution of the Consent Decree. As set forth in the following section, the has a better approach. The NDPC respectfully requests that EPA amend, with court approval, this consent decree to add North Dakota and harmonize its requirements with the effective and broad-reaching steps North Dakota has taken, as described below. g. President Trump?s March 28. 2017 Executive Order. EPAs enforcement initiative in North Dakota is just the type of government overreach that President Trump?s Executive Order addresses. The Executive Order states, is in the national interest to promote clean and safe development of our Nation?s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent iob creation.?1 (emphasis added) 1 See Section 2(a) of the Executive Order Consistent with this policy, the President ordered the heads of agencies to ?review all existing regulations, orders, guidance dowments, policies, and any other similar agency actions . . . that potentially burden the development or use of domestically produced energy resources, with particular attention to oil [and] natural gas?. As EPA stated in its December 1, 2016 news release regarding the Slawson Consent Decree, that settlement (and subsequent similar settlements and enforcement actions) is ?part of national enforcement initiative to reduce public health and environmental impacts from energy extraction activities.?3 This national enforcement initiative targeting the oil and gas industry clearly constitutes agency policy or other action that requires your immediate review as EPA Administrator. In fact, in our view, the Executive Order prohibits EPA from moving forward with its national enforcement initiative until it has undergone the review and approval contemplated in the Executive Order. 3. North Dakota Department of Health Process and Apprnae_h. Initially, the was participating as a partner with EPA in the 114 process and present at the meeting negotiating the Consent Decrees. However, after several months of observing the EPA process, concluded the potential for statewide compliance could be achieved in a much shorter time?'ame and at a much lower cost through collaborative effort with the industry. paradigm was ?sue and settle? with individual companies one by one, with the threat of penalties motivating other companies to comply. The paradigm was to work cooperatively with industry to ?nd a solution. a. The DPC Bakken Upstream Air Task Force. A?er six members received their respective EPA Section 114 information requests in late 2014 through the fall of 2015, the NDPC members formed the Bakken Upstream Air Task Force with the purpose of evaluating technical, mechanical, and engineering aspects of ?eld management of vapor recovery and potential for fugitive emissions. The task force was comprised of more than 130 individuals ?'om 30 companies representing more than 93 percent of the oil and gas production in North Dakota. The task force logged more than 3,000 man-hours exploring these topics and invited both EPA Region 8 and personnel to participate in periodic updates and discussions. b. North Consent Decree. In a timeframe of six months, in cooperation with NDPC ?nalized an industry-wide consent decree template that results in emissions reductions via provisions that exceed current regulatory requirements. In contrast to the thirty months long, burdensome and costly EPA Section 114 process, policy was to identify problematic emissions and inform the companies accordingly. The companies then ?xed the emissions, or faced administrative actions and penalties. This ??nd it and ?x it? policy worked well, and was incorporated into the North Dakota industry-wide consent decree. This cooperative attitude and process between regulators and industry is a model for true innovative environmental improvement without unnecessarily encumbering energy production, constraining economic groth or preventing job creation. The success of this model comes not ?'om a roomful of 2 See Section 2(a) of the Executive Order 3 See h_llp_r- on upgrades-and (copy attached) attorneys and third party consultants with threatened punitive action, but from discussions between regulators and industry held in the spirit of collaborative problem solving. NDPC has had a proven track record of industry led efforts leading to wide adoption of industry best practices and common sense rulemaking processes by state agencies. In fact, in 201 1, NDPC and collaborated to address VOC ?ash emissions that were self-reported by the industry. This effort led to an industry?wide consent decree with and millions of dollars in equipment upgrades in ?eld equipment for statewide compliance. The NDPC respectfully requests that EPA reconsider its Clean Air Act enforcement initiative in North Dakota, and in its place, adopt something similar to the model of enforcement, including amending, with court approval, the one federal-only Consent Decree in place by adding North Dakota, and making its terms consistent with the industry-wide consent decree. 525 E. SCOTT PRUITT ADMINISTRATOR July 11, 2017 Mr. Ron Ness President North Dakota Petroleum Council 100 West Broadway, Suite 200 PO. Box 1395 Bismarck, North Dakota 58501 RE: EPA Clean Air Act Compliance Assurance Activities in the Oil and Gas Sector Dear Mr. Ness: Thank you for sharing your concerns regarding the Environmental Protection Agency?s Clean Air Act enforcement and compliance assurance activities in the oil and gas sector. We discussed the concerns raised in your correspondence with involved staff at the EPA and the North Dakota Department of Health. We are focused on increased coordination and collaboration among the EPA, our state partners and oil and gas producers. The EPA acknowledges the critical role that the oil and gas industry plays in ensuring the nation?s energy independence through domestic energy production. We are committed to working with the oil and gas industry and our state partners to ensure domestic oil and gas production occurs in a safe and responsible manner and in compliance with applicable environmental laws. We recognize the efforts industry and our state partners have made to reduce excess emissions from oil and gas operations in order to protect and improve the nation?s air quality. The agency intends to continue working with NDDH to address violations and reduce Bakken oil and gas emissions. Going forward, the EPA plans to focus its Bakken oil and gas compliance assurance activities on operations on the Fort Berthold Indian Reservation where the state does not have Clean Air Act authority, and NDDH will focus its efforts on operations outside of Indian country. Close coordination on these efforts will help to ensure a level playing ?eld. Your letter raises broad concerns about the agency?s relationships and communications involving the oil and gas sector. To begin to address those concerns, I have directed agency staff to take the following steps: 1200 AYE. NW 0 MAIL Com: 1101A - WASHINGTON, DC 20460 - (202) 564-4700 0 FAX: (202) 501-1450 This paper is printed with vegetable-oil-based inks and is loo-percent postconsumer recycled material, chlorine-free-processed and recyclable I. Each region will work with their counterpart state oil and gas regulatory agencies to enhance existing relationships and de?ne EPA/state-lead responsibilities on compliance and enforcement work to eliminate duplication of efforts. This may include discussions of tools to promote compliance in the oil and gas sector, joint planning and a process for elevating any material disagreements with states that cannot be resolved in the normal course of business. 2. Nationally, we will develop best practices for the judicious use of Clean Air Act section 114 information requests in the oil and gas sector, such as tailoring requests to potential violations and elevating for senior policy consideration any planned information requests that meet certain criteria. 3. We plan to convene a roundtable with representatives of the oil and gas sector and state regulatory agencies to discuss industry concerns and enhance communication while ensuring safe and responsible domestic oil and gas production. I hope these steps will help to address your concerns and provide a solid basis for our continuing partnership with state agencies. We welcome your ideas in this regard. Please contact Deb Thomas, Region 8 Acting Regional Administrator, at (303) 312-6532 with any questions or recommendations you may have. Respectfully yours E. Scott Pruitt cc: Deb Thomas, Acting Regional Administrator, Region 8 Larry Starfield, Acting Assistant Administrator Office of Enforcement and Compliance Assurance Patrick Traylor, Deputy Assistant Administrator Of?ce of Enforcement and Compliance Assurance Patrick Davis, Deputy Assistant Administrator Of?ce of Land and Emergency Management E0 574 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 5:3 WASHINGTON, 0.0. 20460 a a 424? MAY 3 2017 Privileged/Con?dential/Do Not Release OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE MEMORANDUM SUBJECT: Interim Procedures for Issuing Info 513 Pursuant to Clean Air Act 1 14. Clean Water Act 308, and 3007 FROM: Susan Shinkman, Director Of?ce ofCivil Enforcem (OCE) TO: Regional Counsel Regional Enforcement Directors Regional Enforcement Coordinators OC Division Directors This memorandum establishes interim procedures for OECA review Of certain information requests before they are issued by enforcement staff. As you may have seen, on May 15, 2017. Office ofCompliance (0C) issued the attached "Interim Guidance on Required Reporting of Compliance Monitoring Information Requests in to ensure a more nationally consistent and complete accounting of federal compliance monitoring and enforcement activities. It requires OECA and regional otfices to enter certain minimum data into after issuance of an information request. The OC interim guidance also reminds enforcement statT about several important pre-issuance information request considerations the need to open a case ?le and coordinate with other offices as needed). OECA discussed these and other helpful considerations in the attached July 2001 memorandum entitled. "Enhancing the Effectiveness oflnformation Requests in Regulatory Enforcement Matters. EPA has broad authority to investigate whether entities are violating environmental laws. Information requests under CAA 1 l4. RCRA 3007 and CWA 308 are useful and necessary tools that help to ensure that EPA can enforce environmental laws and protect public health. They also can signi?cantly reduce the regulated community?s burden by allowing lil?A inspectors to more narrowly tailor their onsite inspections and in some cases by demonstrating to that no enforcement action is warranted. To ensure careful consideration regarding EPA's use ofits information gathering authorities. we are implementing the following interim procedures. Effective immediately. OECA HQ review is required prior to issuance ofinformation requests under CAA 114, RCRA 3007 and CWA 308. that meet any of the following criteria: Internet Address (URL) 0 epa gov Pnr?ted wutr Vegetable Oll Based Inks on 100% Postoonsumet P'ocess Chlorine Free ReCycted Paper Requests that require testing or sampling. Note: No OECA HQ review is required if such sampling or testing is required by law or permit and was not completed by the entity, or for requests merely to produce already- existing sampling/testing data or other documents. Requests in an authorized or delegated state where EPA knows that EPA and an agency of the state are not in agreement on direction of the matter or interpretation of the law. Where EPA has no information speci?c to the recipient indicating that it may be in violation of the law. Note: As stated in the attached July 2001 memo, when issuing information requests you ?do not need to be certain that there is a violation . . . as a matter of Agency practice your prior research should be suf?cient to determine that for each recipient there is some basis for believing that the facility may be in violation where our research shows that some -- but not all --elements of liability have been met).? When considering issuance of information requests meeting any of the above criteria, please share your proposal (including both the draft request and any explanatory materials) with the appropriate OCE Division(s). We will do our best to evaluate the proposed request in a timely manner or elevate any issues as needed, with a goal of responding to your request as as possible and minimizing any undue delay. Also please give OECA HQ a heads up on any information requests where there is signi?cant public, press, or elected of?cial interest. Please contact me if you have any questions. Thanks. cc: Tom Mariani, Attachments: Of?ce of Compliance, ?Interim Guidance on Required Reporting of Compliance Monitoring Information Requests in (May 15, 2017) Memorandum from Director of Of?ce of Regulatory Enforcement, ?Enhancing the Effectiveness of Information Requests in Regulatory Enforcement Matters? (July 3, 2001) Interim Guidance on Required Reporting of Compliance Monitoring Information Requests in ICIS Effective date: May 15, 2017 Purpose In order to have more nationally consistent and complete accounting of federal compliance and enforcement activities (beyond inspections and enforcement actions), this interim guidance requires OECA and regional of?ces to enter nationally consistent minimum data about CAA ?114, RCRA ?3007 and CWA ?308 information requests in ICIS. As a short reminder, when issuing information requests, please remember the importance of both opening a case file and coordinating with other regulatory authorities states, other EPA of?ces) as explained in our July 2001 Office of Regulatory Enforcement (now OCE) memorandum ?Enhancing the Effectiveness of Information Requests in Regulatory Enforcement Matters?. Required National Minimum Data to be entered into the ICIS Compliance Monitoring Module 1) Information requests issued under the following statutory authorities: a) CAA ?114, b) RCRA ?3007, and c) CWA {5308 (does not include ?entry access warrants?) 2) Minimum National Data entered for each information request: a) Compliance Monitoring Activity Name i) This provides a way to uniquely identify each information request (in addition to the compliance monitoring identi?er number automatically assigned to the record) ii) Example "Information Request Stack Test Records? b) Facility/Company Name and Location (Search by name or location and then select the correct facility in ICIS) i) This links the Facility to the Compliance Monitoring Activity Name ii) This also identifies Facility/Company name and facility location If the Facility/Company Name and Location do not exist, a new facility will need to be created. c) Federal Statute under which the information request is authorized i) Two dropdowns are available to select: 1) Federal Statute, and (2) Law Section d) Compliance Monitoring Type i) Select ?Formal? from the dropdown e) Date information request issued i) Populate Actual Start date with date Information Request is issued Page 1 of 2 3) Timing for Data Entry a) b) Information should be entered into ICIS for all CAA 5114, RCRA ?3007 and CWA ?308 information requests issued after the date of this guidance. Information requests issued prior to the date of this guidance need not be entered into ICIS. Data entry into ICIS is required within ten (10) business days of the information request being issued. OPTIONAL DATA ENTRY The following fields are available to be used as the region/office issuing the information request wishes, but their use is neither required by this guidance nor ICIS business logic: Code Compliance Monitoring Details Compliance Monitoring Information OECA National or Regional Priority EPA contact Information Comment Field. (This ?eld could be used to provide a brief description of what information is being requested.) RELATED EFFORTS Note that a short-term workgroup has been formed to evaluate our existing guidance document(s) and practices in using information requests in our enforcement and compliance assurance work, and there may be additional or revised guidance or a compilation of practice tips as a result of that effort. In addition, at the request of Agency senior leadership, 3 process for review of select draft information requests and associated criteria for the types of information requests that may require additional review is being considered. That criteria and process, when ?nalized, will be formalized in some way. To the extent a region has been entering information request data into the region does not need to continue this practice unless they desire to do so. Page 2 of 2 874?, UNITED STATES PROTECTION AGENCY A ?summon. ac. 20460 4 ?u mo? omrr: or AND COIPLIAVCE ASSIRASCE NOT RELEASE UNDER FOIA July 3, 2001 MEMORANDUM SUBJECT: Enhancing the Effectiveness of Information Requests in Regulatory Enforcement Matters V. Schaeffer Director, Of free of Regulatory Enforcement TO: Regional Counsel Regional Enforcement Coordinators Regional Enforcement Division Directors Over the past several years, many of you have participated in comprehensive investigations of serious and potential violations of federal environmental law by certain companies. These often depend on the effective use of our authority to request relevant information that is essential to determining compliance. This memorandum outlines several issues to consider when issuing formal written information requests either to individual companies or to many companies within a regulated community. It is designed to help ensure that responses will be on time and valuable to the investigation, and to reduce transaction costs for both the government and the responding party. While the points made below are consistent with common practice and do not conflict with existing Agency guidance, this memorandum may serve as a useful reminder, as well as a quick reference for new employees. As always, you should be familiar with any related media-speci?c guidance documents. 1) Proper Authorization and Issuance: Information requests should always cite the relevant statutory authority, and be signed by an individual with the delegated responsibility to issue such requests. Although informal oral requests for information (ag, photocopies of facility records) are common and may be appropriate when done very carefully during onsite inspections in several media programs, under no circumstances should a formal written information request be left onsite during an inspection unless it has been reviewed by all appropriate Agency personnel and approved and signed by an authorized individual. You will, of course, need to confirm receipt of such formal information requests through registered mail), thereby making hand delivery generally inappropriate unless delivery by mail has been refused or otherwise has been unsuccessful. 2 2) Compliance With the PRA: The Paperwork Reduction Act (PRA) requires EPA to obtain OMB approval before collecting information by means of identical questions posed to more than nine persons. The PRA does not apply to the collection of information during the conduct of an agency?s administrative administrative action or investigation involving potential violations by speci?c individuals or entities. This exemption ?applies during the entire course of the investigation, audit, or action, whether before or after formal charges or complaints are ?led or formal administrative action is initiated, but only after a case ?le or equivalent is opened with respect to a particular party.? 5 C.F.R. Although not required by the PRA, we urge you to open a separate physical or electronic case ?le with respect to eaclz individual party under investigation. When seeking to apply this exemption. it is also important for you to have done prior research review of commercial data, permit ?les, citizen complaints or prior inspection reports) suf?cient to justify opening a case ?le or its investigative equivalent. Obviously, you do not need to be certain that there is a violation. Moreover, it is position that near certainty of a violation is not required under the administrative investigation exemption or under longstanding Agency policies and practices. Although this guidance does not attempt to interpret or summarize the precise legal boundaries of the investigative case ?le exemption, as a matter of Agency practice your prior research should be suf?cient to determine that for each recipient there is some basis for believing that the facility may be in violation (eg, where our research shows that some - but not all ~elements of liability have been met). Once such data are developed, you should open and maintain an enforcement case ?le with the data used to support your information request. The attached letter from the Of?ce of Management and Budget con?rming that Section 114 requests to numerous electric utilities were exempt from the PRA, may provide useful background. 3) Coordination With Other Information Sources and Affected Media Offices: Please remember to factor in other appropriate programs and existing sources of information before sending out requests for information. This should include determining whether existing Agency information, or information requests pending in other media programs, eliminates the need to ask for certain information. In addition to eliminating potentially redundant requests, coordinating with other appropriate of?ces in the Regions or Headquarters will allow such of?ces to raise any possible concerns in a timely manner. This coordination is particularly important in multimedia investigations, but it is no less important for single-media investigations where the Agency already has in its possession general facility information such as ownership or geographic data, ?nancial information, similarly broad demographic data, or extensive compliance history information. 4) Reasonable Time to Respond and Tone of Requests: Of course, the time allowed to respond should be stated clearly and reasonably should re?ect the effort required to identify and gather the data requested. Information request letters should identify an EPA person to contact to discuss any issues concerning the request and should provide a clear opportunity to meet to discuss additional time that may be appropriate to respond. In general, the tone of information requests should be polite, and should thank the respondent in advance for its cooperation. Although it should be clear that the information request is being issued pursuant to statutory authority, in exercising your discretion you may decide that citation to statutory penalties for failure to respond is not always necessary, where you anticipate cooperation from the respondent 3 This is not meant to encourage or suggest that information requests generally should not cite to the statut01y penalties, but simply is intended to reiterate that you should use your best judgment in deciding whether it is appropriate in all circumstances. For example, in addition to considering whether the respondent is likely to cooperate with the request, it may be appropriate to consider whether citation to statutory penalties is necessary in an initial request to a smaller entity that has little or no experience with EPA regulatory authorities, particularly where the potential violations do not present a serious immediate threat and there is time for a followup request that can recite such penalties. if necessary. Also consider whether it is possible to discuss information needs with the respondent in advance, to refine the request as necessary. You should be careful to document such discussions, however, and to follow up with a more formal request to avoid misunderstanding or delays in obtaining needed information. 5) Time For Review: In drafting your questions, consider the length of time the government may need to review the response. delays in reviewing responses may make violations stale once they are finally identified, and otherwise compromise the integrity of any future enforcement action. Investigations of certain serious violations may require in-depth review of corporate records, where compliance cannot be determined from available monitoring or permit data, or ordinary inspection reports. In such cases, it may save time and be more effective to focus on a few threshold questions initially, and use the response to further re?ne the inquiry. Of course, we should avoid asking questions that have already been answered. This can ease the burden for both the government and the respondent, but also ensure that short-term deadlines are taken seriously and are easier to enforce. 6) Multi-State Investigations: If you are working on a multi-state, corporate investigation, it is important to coordinate with Headquarters and your regional colleagues to avoid duplicative requests. Large investigations can benefit from case management plans that establish short-term and long-term goals, establish timetables, and otherwise improve efficiency for both EPA and responding parties. Where multi-regional investigations are involved, OECA can work with the Department of Justice to help establish procedures for document control and quick distribution of responses to information requests to the appropriate EPA staff. 7) Phased Information Requests: Where your prior research indicates that a large number of regulated entities may be in violation, consider focusing your initial information request on a smaller subset of respondents. This may be particularly appropriate where your initial analyses suggest that there may be some question about certain issues necessary to establish liability. Such phasing can allow you to revise your query based on the initial response, by eliminating or revising questions where initial responses indicate an unexpected regulatory exemption. This can improve the quality of our information requests, make our review more efficient, and reduce burdens for both EPA and the respondent. Also, please keep in mind that even though providing such identical requests initially to fewer than than ten entities may be an appropriate way to phase such requests under certain circumstances, sending the initial requests to greater than nine entities may be appropriate and will not necessarily pose a PRA concern provided the administrative investigation exemption applies. 4 8) Other Legal Requirements and Agency Guidance: Please keep in mind the requirements of existing law and the guidance contained within existing agency policy documents, neither of which are superseded by this memorandum. For example, 40 C.F.R. Part 2 provides that EPA must give notice as to certain procedural rights in information requests that are likely to be regarded as seeking con?dential business information (C31). 40 CPR. 2.203. Also. under the August 31, 1999 ?Revised Final Gurkz?ance on Drssemr'naahg EPA 's SBREFA Infomaa'on Sheet to Businesses at the Time of an Enforcement Acn'vr'zy, EPA gives small businesses certain information at the initial enforcement contact with the business, which may occur at the information request stage. Finally. please keep in mind that this memorandum applies only to regulatory enforcement matters and does not apply to remedial cases or investigations that are subject to existing OSRE guidance and oversight. If you have any questions, please do not hesitate to contact me, or Gary Jonesi at 202-564-4002. In the meantime, thank you for your continued efforts to enforce the laws that protect our environment. Attachment cc: Bruce Gelber, Walker Smith, Ben Fisherow, Barbara Pace. OGC ORE Division Directors and Deputy/Associate Directors Response: The numbers may differ because of the distinction between the number of requests versus the number of facilities the}: covered. Several requests required information at a number of facilities. FY2015 FY2016 {tare-May 31) {post-May 31) 1143 Sent {Total number of 14? 120 El 13 facilities that received a 114) Requiring Monitoringr'Testmg 36 {73 facilities) 28 14 EPA Region 5 Separation Report 1/20/2017-10/17/2017 Agency Org Division Employee Position Title Opm Date of Departure EPA Yrs of Svc. Duty Station EP 00 U5 nonresponsive Superfund Division BEARD, GLADYS ENVIRONMENTAL PROTECTION SPECIALIST 2/20/2017 nonresponsive CHICAGO,COOK,ILLINOIS ATTORNEY-ADVISER 4/28/2017 EP 00 U5 Office of Regional Counsel BERMAN, MICHAEL R. EP 00 U5 Superfund Division BESLOW, MICHAEL A. ENVIRONMENTAL SCIENTIST 10/1/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Land & Chemical Division BILL, BRIANA C. ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS Water Division BREESE, ANDREA A. ADMINISTRATIVE PROGRAM ASSISTANT EP 00 U5 8/30/2017 CHICAGO,COOK,ILLINOIS CHICAGO,COOK,ILLINOIS EP 00 U5 Air & Radiation Division CAPASSO, JULIE A. MANAGEMENT ANALYST 6/23/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Great Lakes National Program Office CESTARIC, RITA M. ENVIRONMENTAL ENGINEER 9/30/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Counsel EP 00 U5 Air & Radiation Division COX, RICHARD E. PROGRAM ANALYST 9/1/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division DABABNEH, FOUAD N. ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Great Lakes National Program Office DAMATO, MARCIA LYNN ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Air & Radiation Division DAUGHERTY, JAMES R. ADMINISTRATIVE PROGRAM ASSISTANT 2/3/2017 EP 00 U5 Superfund Division ELLIOTT, WILLIAM A INVESTIGATOR 5/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division ELSTON, SUE F. LIFE SCIENTIST 4/29/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 CLARK, BARBARA A. PARALEGAL SPECIALIST ATTORNEY-ADVISER 9/2/2017 8/31/2017 CHICAGO,COOK,ILLINOIS CHICAGO,COOK,ILLINOIS Office of Regional Counsel ESTES, SHERRY L. EP 00 U5 Air & Radiation Division ETZ, BRADY AARON STUDENT TRAINEE (ENGINEERING) 6/9/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Great Lakes National Program Office EVANS, LAURA D. ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Administrator FISCUS, TAYLOR R. SPECIAL ADVISOR TO THE REG ADMIN 1/20/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division GAGE, FRED GOVERNMENT INFORMATION SPECIALIST 6/30/2017 EP 00 U5 Superfund Division GEBIEN, CHARLES M. SUPERVISORY PHYSICAL SCIENTIST 9/30/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division HENRY, TIMOTHY C. PROGRAM MANAGER 6/30/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Counsel CHICAGO,COOK,ILLINOIS HENRY, WANDA STUDENT TRAINEE (ADMINISTRATION) 9/8/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division HERNANDEZ, ALICIA ENVIRONMENTAL PROTECTION SPECIALIST 3/3/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division HERRING, MARGARET E. INVESTIGATOR 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division HOLLRIEGEL, MARILYN A. MANAGEMENT ANALYST 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 PARALEGAL SPECIALIST 8/31/2017 Office of Regional Counsel HUBBARD-GREENE, PENNY E. EP 00 U5 Water Division JACKSON, MARY MANAGEMENT ANALYST 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Counsel JACKSON, RITA ADMINISTRATIVE PROGRAM ASSISTANT 9/2/2017 CHICAGO,COOK,ILLINOIS MADISON,DANE,WISCONSIN EP 00 U5 JANCZY, JOSEPH J. LIFE SCIENTIST 8/31/2017 EP 00 U5 Land & Chemical Division KING, PHILIP W. ENVIRONMENTAL PROTECTION SPECIALIST 3/31/2017 EP 00 U5 Office of Regional Counsel KINGHORN, CASH ALLEN STUDENT TRAINEE (LEGAL) 9/8/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Air & Radiation Division KO, JOSEPH ENVIRONMENTAL ENGINEER 7/21/2017 CHICAGO,COOK,ILLINOIS Air & Radiation Division LEHRMAN, LORETTA PROGRAM COORDINATOR 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division CHICAGO,COOK,ILLINOIS CHICAGO,COOK,ILLINOIS EP 00 U5 Land & Chemical Division LUBIN, ARTHUR STATISTICIAN 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division MAHMOOD, TAHIRA TRAINING COORDINATOR 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Administrator CHICAGO,COOK,ILLINOIS MANGAHIS, ENRICO-JOSE PHYSICAL SCIENTIST (ENVIRONMENTAL) 4/1/2017 EP 00 U5 Land & Chemical Division MASTER, EDWARD F. ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Administrator MATTHEWS, FLORINE EQUAL EMPLOYMENT SPECIALIST 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Land & Chemical Division EP 00 U5 Air & Radiation Division MCGRATH, JESSE A. PHYSICAL SCIENTIST (ENVIRONMENTAL) 6/9/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division MCNAMARA, RUTH ANN ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division MOORE, JOHN SPENCER CHEMIST 8/18/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Air & Radiation Division MURPHY, MICHAEL H. HEALTH PHYSICIST 5/27/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division NEWELL, MARIETTA ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division ROY, STEPHEN D. GEOLOGIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division MCDONALD, HOLLY G. ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS SANTOS, MARCO C. LEAD GRANTS MANAGEMENT SPECIALIST 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Land & Chemical Division SAWYER, JENNA ANN ENVIRONMENTAL PROTECTION SPECIALIST 4/1/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division SEIVERT, PAUL MATTHEW CONTRACT SPECIALIST 8/5/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division ENVIRONMENTAL PROTECTION SPECIALIST 2/3/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division SIDLO, JULIE A. ACCOUNTANT 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division SPAULDING, WILLIAM D. SHEPPARD, DEENA ENVIRONMENTAL PROTECTION SPECIALIST 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Counsel STEINBAUER, GARY E. ATTORNEY-ADVISER 5/27/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Counsel STIMSON, CARL K. MANAGEMENT & PROG ANALYST 4/29/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division TELLES, LINDA LABORATORY MGMT ASSISTANT 9/2/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Office of Regional Counsel TUNSTILL-GALE, MARION ADMINISTRATIVE SERVICES ASST (OA) 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division ULFIG, JOSEPH N. ENVIRONMENTAL ENGINEER 8/3/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Resources Management Division WALANKA, IRENE EP 00 U5 Resources Management Division WESOLOWSKI, DENNIS J. SUPERVISORY PHYSICAL SCIENTIST (ENV) 9/30/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Superfund Division WILLIS, GLORIA ENVIRONMENTAL PROTECTION SPECIALIST 6/30/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division YEDAVALLI SR., SREEDEVI ENVIRONMENTAL PROTECTION SPECIALIST 8/31/2017 CHICAGO,COOK,ILLINOIS EP 00 U5 Water Division YOUNG, DENISE E. ENVIRONMENTAL PROTECTION SPECIALIST 9/2/2017 CHICAGO,COOK,ILLINOIS BUDGET ANALYST 9/2/2017 The data in this report was extracted from FPPS at approximately 8:00 pm EST the day before the "Time run" date. Time run: 10/31/2017 8:34:49 AM This report structure was developed by the HR Shared Service Centers. CHICAGO,COOK,ILLINOIS STATE OF NORTH DAKOTA IN DISTRICT COURT COUNTY OF BURLEIGH SOUTH CENTRAL JUDICIAL DISTRICT North Dakota Department of Health, CONSENT DECREE 08-2017-CV-02240 Plaintiff, vs. Civil No. EOG Resources, Inc., Defendant. PRELIMINARY STATEMENT [111] Plaintiff, North Dakota Department of Health brought this action against Defendant. EOG Resources, Inc., for alleged violations of the state's air pollution control laws, N.D.C.C. ch. 23?25, N.D. Admin. Code art. 33-15, the North Dakota State Implementation Plan, and those provisions of the federal Clean Air Act and its body of implementing regulations for which the Department has been delegated authority by the U.S. Environmental Protection Agency (collectively the ?Air Pollution Control Laws?). The North Dakota State implementation Plan has been approved by the US. Environmental Protection Agency as consistent with the Clean Air Act. [112] The Department has primary authority and jurisdiction to address and resolve any noncompliance with the Air Pollution Control Laws. The Department has determined that this Consent Decree is the most appropriate means of resolving the alleged violations of the Air Pollution Control Laws by Defendant identified in the Complaint in this matter because it is in the public interest and will ensure prompt compliance with the Air Pollution Control Laws. and is fair. reasonable, and consistent with the requirements of the federal Clean Air Act. Resolving these complex issues falls within the Department?s expertise. Page 1 of21 [113] The Department and Defendant (the ?Parties?) have agreed to settle this matter through the execution of this Consent Decree. The Parties agree to be bound by the terms and conditions of this Consent Decree upon entry by the Court as a ?nal order. [114] NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and conditions in this Consent Decree, and desiring to be legally bound, the Parties agree as follows: STIPULATIONS [115] Defendant has waived service of the Complaint in this matter [116] Defendant admits to all the jurisdictional allegations contained in the Complaint and stipulates to venue in the Burleigh County Court (South Central Judicial District). [1171 Defendant owns and operates and has owned and operated crude oil and natural gas production facilities in North Dakota. [118] This Consent Decree only applies to Defendant's facilities listed on Exhibit 1 to this Consent Decree and any facilities subsequently identi?ed by Defendant in accordance with Paragraph 34 (the ?Facilities"). For purposes of this Consent Decree, a ?Facility" is an area constructed and maintained for oil and natural gas extraction and includes all tanks, associated wells, well pads, associated equipment and components, Vapor Control Systems, and air pollution control devices. [119] The types of emissions from the Facilities typically consist of: (1) ?ash emissions, which are released from solution in liquids produced during the process of oil and natural gas extraction as the liquids are transferred from higher to lower pressure; (2) standingfworkingibreathing losses, which are released from produced liquids while they are stored in tanks at atmospheric pressure; (3) fugitive emissions; and (4) combustion emissions. Flash emissions, losses, and fugitive emissions are collectively referred to as ?tank emissions." [1110] The "Air Contaminants? associated with these emissions include, but are not limited to, methane, ethane, volatile organic compounds certain hazardous air Page 2 of21 poliutants and other Air Contaminants as defined in N.D.C.C. 23-25-010) and ND. Admin. Code 33-15-01-04. [1111] Defendant?s Facilities have one or more Vapor Control Systems intended to control emissions of Air Contaminants as required by the Air Pollution Control Laws. For purposes of this Consent Decree, a ?Vapor Control System? includes a closed-top storage tank, all vent lines leading from the storage tank to a control device or sales line, fittings and connectors in or to the vent lines, any liquid knock?out vessels in the vent lines, thief hatches and other access points and pressure relief devices on the vessel or vent lines, and the control device used to combust gas not routed to the sales line. [1112] In September 2015, EPA issued a compliance alert noting that it had concerns regarding unauthorized tank emissions due to Vapor Control Systems being inadequately designed, sized, operated, and/or maintained (the ?Compliance Alert?). In 2014?2015, the Department began inspecting oil and gas production facilities using an optical gas imaging infra-red camera and, as a result, became aware that many ownerioperators' current emission controls on their Bakken Pool facilities were periodically not adequately controlling emissions. The emission of organic compounds vapors and gases from storage tanks and associated equipment at oil and gas production facilities are often not visible without the use of OGI technology. The Compliance Alert confirmed to the Department that this is an industry?wide issue. The Department shares the concerns identified by EPA in the Compliance Alert, and thereafter informed industry, including Defendant, that prompt actions may be necessary to address the concerns raised in the Compliance Alert. [1113] Although Defendant has been and is currently taking good faith steps to control the emissions of Air Contaminants that are the subject of this Consent Decree, certain Facilities may still need additional controls or adjustments to their Vapor Control Systems to fully comply with the Air Pollution Control Laws. Page 3 of21 [1114] As set forth in the Complaint, the Department alleges that Defendant?s operation of its Facilities, including associated emissions of Air Contaminants, may have violated and may be currently violating the Air' Pollution Control Laws, including, without limitation, producing unauthorized or excess emissions of VOCs, methane, ethane and other Air Contaminants from the Vapor Control Systems. [1115] Defendant does not admit and speci?cally denies the violations alleged in the Complaint in this matter and the findings of violation made by the Department herein. Defendant retains the right to dispute the alleged violations in any subsequent or contemporaneous proceedings, other than proceedings by the Department to implement or enforce this Consent Decree. This Consent Decree is for the purpose of settlement only. Neither the fact that Defendant and the Department have entered into this Consent Decree, nor the statements in it, shall be used against Defendant for any purpose in any proceeding except the enforcement by Defendant or the Department of this Consent Decree. The foregoing shall not be construed as preventing use of this Consent Decree to show Defendant's resolution and compliance with the Air Pollution Control Laws. As to others who are not Parties to this Consent Decree, nothing contained in this Consent Decree is an admission by Defendant, and this Consent Decree is not an admission by Defendant of liability for conditions at or near the Facilities and is not a waiver of any right, cause of action or defense otherwise available to Defendant. [1116] Nevertheless, in order to resolve this dispute without further litigation, the Parties enter into this settlement. The Parties agree that all noncompliance with the Air Pollution Control Laws resulting from or associated with unauthorized or excess emissions from Vapor Control Systems and related equipment at the Facilities, which is alleged in the Complaint or which the Department could have reasonably alleged against Defendant as of the filing of the Complaint, including ongoing noncompliance or Page 4 of21 newly discovered noncompliance addressed during the term of and in accordance with this Consent Decree, is fully and finally resolved pursuant to this Consent Decree. [1117] During the term of and in accordance with this Consent Decree, compliance with the terms of Paragraph 25 of this Consent Decree shall constitute and be deemed compliance with the Air Pollution Control Laws for any unauthorized or excess emissions of VOCs, methane, ethane and other Air Contaminants from the Vapor Control Systems and related equipment at the Facilities. This Paragraph 17 shall not relieve Defendant from the requirement to construct and operate Facilities in accordance with Section 33-15-07?01 of the North Dakota Administrative Code. [1118] Except as expressly set forth in Paragraph 17 of this Consent Decree, the requirements, duties, and obligations set forth in this Consent Decree are in addition to any other requirements, duties, or obligations contained in any permit which the Department has issued or may issue to Defendant and are in addition to any requirements, duties, or obligations imposed by State or federal law, including any requirement to apply for and obtain a permit. Except as provided herein, this Consent Decree does not relieve Defendant from the duty to comply with requirements contained in any permit or with any State or federal law. Where a requirement of any air permit or State or federal law is more stringent than or in con?ict with the requirements of this Consent Decree, compliance with such other more stringent requirement shall be deemed compliance with this Consent Decree. SETTLEMENT TERMS [1119] Injunctive Relief. Defendant shall comply with all requirements of the Compliance Measures, Paragraph 25 of this Consent Decree. [1120] Civil Penalties. Defendant will be assessed a baseline civil penalty of Four Hundred Thousand Dollars as set forth in Exhibit 1 to this Consent Decree. to address and resolve the alleged violations at each Facility listed in Exhibit 1 to the Complaint. In addition, Defendant will be assessed a penalty of Ten Thousand Dollars Page 5 of21 ($10,000) to address and resolve the alleged specific violations alleged in Claim One relating to NDIC well number 17222 (Austin in Mountrail County. Defendant may receive a reduction of the $400,000 baseline penalty based on early compliance, as discussed in Paragraph 21, and a reduction based on the development and implementation of a QAIQC Policy, as discussed in Paragraph 22. Defendant may also be subject to a baseline penalty enhancement as discussed in Paragraph 231. The $10,000 penalty for alleged specific violations will not be subject to the potential penalty reductions and enhancements provided for in Paragraphs 21, 22 and 23. Defendant must calculate a final penalty amount (?Final Penalty Amount") accounting for any reductions and submit written documentation of this calculation to the Department within 60 days of the effective date of this Consent Decree. The Department will review such submittal and issue a written notice to Defendant of the Final Penalty Amount. Defendant shall pay the final penalty within 30 days of receipt of the Department's written notice of the final penalty amount. Defendant shall make the payment by check payable to the State of North Dakota, Department of Health, shall include the case number of this Consent Decree, and shall direct the check to the attention of L. David Glatt, Environmental Health Section Chief, 918 E. Divide Ave., Bismarck, ND 58501? 1947. Defendant shall pay any baseline penalty enhancement due under Paragraph 23. in accordance with that Paragraph. l. Supplemental Environmental Projects Respondent agrees to undertake the following SEPs, which the Parties agree are intended to secure significant environmental and public health protection and improvements. A. Equipment and Training for Emergency Responders: Respondent shall donate funds to be used to fund emergency alert systems and equipment sirens) to provide warnings to the public of hazardous events, including oilfield emergencies, which may have air quality impacts. B. Respondent may provide the funds to Mountrail County andior communities within Mountrail County. Page 6 of 21 C. Respondent shall provide the Department with a copy of its checks to fund the SEPs within 60 days of this Agreement?s effective date. D. Respondent may deduct from the Final Penalty Amount an amount equal to that donated for SEPs in accordance with this Paragraph 20.l, not to exceed 50% of the Final Penalty Amount (for example, if the Final Penalty Amount would otherwise have been $200,000.00 without SEP deductions, then the amount that may be spent on SEPs and deducted from the Final Penalty Amount would be [1121] Penalty Reduction Early Compliance. The baseline penalty in Paragraph 20 shall be reduced (on a per Facility basis) subject to the applicability of one (1) of the following criteria. Only one penalty reduction criterion (1.9., that which provides the greatest percentage reduction) may be used per Facility. l. Twenty-five percent reduction at each Facility at which Defendant has completed initial site inspections under Paragraph and completed any required Initial Repairs, as defined herein, where needed, by December 31, 2016. ll. Fifty percent reduction at each Facility at which Defendant has completed initial site inspections under Paragraph and completed any required Initial Repairs, as defined herein, where needed, by October 31, 2016. [1122] Penalty Reduction - QAIQC Policy. In addition to Paragraph 21's penalty reduction, the total baseline penalty in Paragraph 20 shall also be reduced ten percent if Defendant develops and implements a OAIQC policy for all Facilities in accordance with this Paragraph 22. The QAIQC policy must address general aspects of emission control measures and practices to achieve and maintain compliance with the Air Pollution Control Laws. The QNQC policy must be submitted to the Department within 30 days after the effective date of this Consent Decree, along with certification from Defendant's Responsible Official that Defendant has implemented the QAIQC policy. Page 7 0121 [1123] Stipulated Penalties. Defendant HEREBY STIPULATES to pay the following additional civil penalties in lieu of other civil penalties available under the Air Pollution Control Laws: Defendant shall pay a $2,500 penalty per Facility for each Facility at which Defendant completed initial site inspections under Paragraph 25.I.A, but did not completed Initial Repairs as defined herein by June 30, 2017. Defendant shall pay an additional penalty per Facility for each additional month in which Initial Repairs at the Facility were not completed by the 30?h day of the month, as follows: July 30, 2017: $1,000 August 30, 2017: $1,500 September 30, 2017: $2,000 October 30, 2017?: $2,500 November 30, 2017: $3,000 These penalties shall be cumulative, with a maximum penalty of $12,500 per Facility. Defendant must calculate a final stipulated penalty amount and submit written documentation of this calculation to the Department by December 31, 2017. Defendant shall pay the final penalty within 30 days of receipt of the Department?s written notice of the final stipulated penalty amount. Defendant shall make the payment by check payable to the State of North Dakota, Department of Health, shall include the case number of this Consent Decree, and shall direct the check to the attention of L. David Glatt, Environmental Health Section Chief, 918 E. Divide Ave, Bismarck, ND 58501-1947. Payment of the stipulated penalty does not relieve Defendant of its obligation to complete required repairs or corrective actions. During the term of this Consent Decree, the Department may conduct routine inspections for compliance with the Air Pollution Control Laws. If a Department inspection of a Facility shows an alleged violation of the Air Pollution Control Laws relating to unauthorized or excess emissions of VOCs, methane, ethane and other Air Contaminants from the Vapor Control Systems, the Department shall notify Defendant of such violation in writing and allow ten days for Defendant to respond to the allegation and demonstrate that prior to the inspection, either, as applicable: (1) Defendant had scheduled the Facility for an initial site inspection pursuant to and in accordance with Paragraph (2) Defendant had identified the need for repair or other corrective action in accordance with this Consent Decree if an initial site inspection pursuant to Paragraph 25.l.A had previously occurred; (3) Defendant had conducted an inspection required under Paragraph 25.1? and was in compliance with Paragraph repair requirements; or (4) that the violation was the result of an unavoidable malfunction as set out in ND. Admin. Code 33-15-01?13 and Defendant complied with N.D. Admin. Code 33-15?01-13?s requirements. If Defendant fails to make a sufficient demonstration under this Paragraph the Department may elect to assess an additional stipulated penalty of $2.500. Defendant must pay any such penalty within 30 days of receipt of written notice by the Department. Defendant shall Page 8 of21 make the payment by check payable to the State of North Dakota, Department of Health, shall include the case number of this Consent Decree, and shall direct the check to the attention of L. David Glatt, Health Section Chief, 918 E. Divide Ave., Bismarck, ND - 947. [1124] Reservation of Rights. The Department reserves the right to pursue any and all remedies, including assessment of penalties, for any violation by Defendant of the terms of this Consent Decree not otherwise addressed through the imposition of stipulated penalties. The Department also reserves the right to initiate administrative or legal proceedings relating to any violation of the Air Pollution Control Laws not addressed herein. If the Department determines there is an imminent and substantial threat to public health and safety, the Department may take any measures it deems necessary, including issuing an emergency order under N.D.C.C. 23-25-08 and seeking injunctive relief under N.D.C.C. 23-25?10. Likewise, Defendant reserves its rights and defenses with respect to actions or proceedings that might be initiated by the Department other than to enforce the provisions of this Consent Decree, including but not limited to emergency orders or injunctive relief. COMPLIANCE MEASURES [1125] Defendant shall comply with the following requirements for all Facilities: l. Initial Site Inspections Repairs A. Defendant shall have conducted an initial site inspection(s) using an OGI infra?red camera, in the manner described in Paragraph 25.l l.B, at each Facility by the end of December 31, 2016. Any OGI inspection by the Defendant at a Facility during 2016 may be used to demonstrate compliance with this Paragraph 25.l. If unauthorized or excess emissions were identified in any inspection required by this Paragraph 25.I.A, then Defendant must complete all needed repairs (?Initial Repairs") in accordance with the schedule outlined below in Paragraphs 25.l.A.1?2. For any Facilities lacking proper authorization, Initial Repairs may include seeking from the Department proper authorization for the Facility as then currently con?gured and operating. For any Facilities found not to be constructed in accordance with Section 33?15-07-01 of the North Dakota Administrative Code, such Facilities shall be repaired to meet these provisions. For any Facilities at which Initial Page 9 of 21 Ii. Repairs were not completed as of June 30, 2017, Defendant shall: 1. Notify the Department within 30 days of this Consent Decree's effective date of any Facilities at which Initial Repairs are not complete as of June 30, 2017. Any Facilities for which Initial Repairs have not been completed as of June 30, 2017, are subject to the stipulated penalty set forth in Paragraph 23.l. 2. All Initial Repairs must be complete by December 31, 2017. If, at any time, Defendant has knowledge that emissions from uncorrected issues at a single Facility are causing an exceedance of a National Ambient Air Quality Standard off-site or that such emissions otherwise pose an imminent or substantial threat to human health or worker safety, it must take immediate steps to address the issues (up to and including well shutdown or well shut? in) and notify the Department within 24 hours. Initial Repairs are complete once Defendant veri?es that there is no evidence of organic compound emissions. ?Evidence of organic compound emissions" does not include indications of authorized or reasonably expected emissions associated with the normal operation of the Facilities. Defendant must have a good faith basis for asserting that emissions are authorized or reasonably expected emissions associated with the normal operation of Facilities. Such a good faith basis may be based upon process knowledge, engineering speci?cations, vendor materials, best management practices, or generally accepted industry standards. For emissions other than authorized or reasonably expected emissions associated with normal operations, Defendant may verify there is "no evidence of organic compound emissions? by showing that any of the following are met: 1. No emissions are observable from equipment in organic compound vapor service using an OGI infra-red camera; or 2. Emissions from equipment in organic compound vapor service has a leak rate of less than 500 parts per million organic compounds as demonstrated by using a flame ionizing detector calibrated with Zero air (less than 10 by volume hydrocarbon in air) and a mixture of methane in air at a concentration less than 10,000 by volume; or 3. An alternate analyzer Photoionization Detector), methodology, or threshold may be approved by the Department. Design Analysis Page 10 of21 Defendant shall perform a design analysis for any Facilities for which Initial Repairs were not completed as of June 30, 2017. Defendant may seek a waiver of this requirement from the Department by demonstrating in writing that the Initial Repairs have been delayed due to non?design issues unavailability of parts. coordination with a planned shutdown, etc.). Defendant may utilize a single design analysis for multiple Facilities if operational parameters used in the analysis are sufficiently representative of each Facility, in the Department?s judgment. Defendant shall identify required corrective actions (if any) (?Design Corrective Actions?) and implement any Design Corrective Actions by December 31. 2017. Defendant?s design analysis shall consider, at a minimum, the following parameters. In all instances, Defendant shall use inputs in this design analysis that are representative of current and reasonably anticipated future operating conditions and throughputs for the Facility(ies). 1. Assessment of potential storage tank(s) emissions considering the following elements: a. Vapor sources tied or to be tied to the Vapor Control System; b. Operating pressure and temperature from the last stage of separation prior to the storage tanks; c. Vapor pressure of the ?nal weathered product; d. The use of pressurized liquid sampling data that reflects flash emissions representative of each producing pool (such data must be collected and analyzed in accordance with a generally accepted pressurized liquid sampling methodology); e. API gravity of hydrocarbon liquids; f. Volume and duration of the flow of the liquids from the separator or heater treater to the storage tanks; g. Anticipated range of liquid ?ow rates from separator or heater treater to storage tanks, including an assessment of simultaneous dump events as needed; and h. Any other inputs needed to estimate potential storage tank(s) emissions. 2. Assessment of Vapor Control System capacity considering the following elements: a. Configuration of the piping system between the Page 11 of21 storage tanks and the emissions control device, including consideration of pipe diameter, length, and back pressure vatves or other restrictions on vapor flow; b. Size and specifications of the emissions control device, as represented by the manufacturer; and c. Engineering design considerations applied to account for issues associated with the Vapor Control System and variability of data. C. Defendant shall maintain and provide to the Department upon request records, including all input parameters, calculations, assumptions etc, for each design analysis required above during the term of this Consent Decree. D. No later than December 31, 2017, Defendant shall submit to the Department the following report for each design analysis required above: 1. Submit a summary for each design analysis that includes the following: a. All vapor sources (including well names) feeding the Facility; b. A discussion of any identified design issues; and c. Any corrective action(s) necessary to convey storage tank emissions to a properly sized control device. 2. Submit the summary via email to airquality@nd.gov. inspection and Maintenance Program A. Auditory, Visual. Olfactory, and Maintenance Inspections: Beginning the following full month after this Consent Decree?s effective date, Defendant shall conduct no less than auditory, visual and olfactory walk-around inspections of all Facilities. The AVO walk-around inspections shall check for hissing, new stains, evidence of a spill or other indicators of operational abnormalities. Properly trained personnel shall perform AVO walk-around inspections during normal operations. AVO walk?around inspections shall include but not be limited to the following equipment, if present at the Facility: 1. Separators. heater?treaters and vapor towers Final stage separation temperature and pressure (ensure wrthin normal operating parameters); 2. Storage tanks Thief hatches, PRDs and all tank valves. If leaks are detected, further inspect gaskets or equrpment for contamination or wear; and Page 12 of21 3. Other parts of Vapor Control System Verify no apparent issues with vent lines and flame arrestors and confirm that any scrubber pots have been emptied in accordance with applicable schedules; that combustion device(s) is lit, or auto ignite functioning properly; and if smoke emissions are observed, no visible smoke emissions are observed for more than a total of 1 minute during any 15 minute period of the inspection. Periodic OGI Infra-Red Camera Inspections: Defendant shall conduct semi-annual OGI camera inspections at each Facility following manufacturer?s recommendations and specifications for camera operations. This requirement only applies to Facilities that are producing an average of more than 15 barrels per day during the previous semi? annual period. Semi-annual periods are January 1 to June 30 and July 1 to December 31. OGI camera inspections shall first apply for the semi? annual period beginning on July 1. 2017. Such inspections shall be performed by properly trained OGI camera operators, must be conducted during normal operations. and shall include. but not be limited to the following: 1. Storage tanks including thief hatches, PRDs and openings; 2. Other aspects of the Vapor Control System including piping. valves, connectors, open ended lines and ?anges; and 3. Combustion devices included as part of the Vapor Control System. Alternative Inspections: Alternative technologies and methods in lieu of those specified in Paragraph and l l.B may be approved by the Department. Alternative technologies and methods must be demonstrated to be comparable in their effectiveness with the inspection criteria specified in Paragraph 25.l l.A andfor Paragraph 25.l l.B. Repair Requirements: lf "evidence of organic compound emissions? is detected in accordance with Paragraph 25.l.C during any inspection(s) required by Paragraph 25.l l.A, or ll .C. Defendant must comply with Paragraph below. For Facilities at which evidence of organic compound emissions is identified pursuant to inspections required under Paragraph 25.l l.A, or INC and for which either Initial Repair or Design Corrective Actions are pending, Defendant is not subject to Paragraph so long as Defendant has properly documented the need for repair previously. Such Initial Repairs and Design Corrective Actions must be completed in accordance with the schedules outlined in Paragraphs 25.l.A and 25.l .A. 1. Make a first attempt to repair or document a basis for delaying a first attempt at repair within five calendar days of discovery; 2. Complete and verify successful repair of detected emissions within 30 calendar days after the ?rst attempt to repair utilizmg an approved inspection methodology listed in Paragraph except that emissions detected utilizing an AVO inspection (Paragraph 25.l l.A) may be veri?ed as repaired usrng any Page 13 of21 inspection methodology in Paragraph 25.l l; Notwithstanding anything herein to the contrary, Method 21 may be used, but shall not be required. as an alternative inspection technology for repair veri?cation purposes; and lf Defendant cannot complete and verify repairs as successful in accordance with Paragraph 25.ll , then Defendant must notify the Department of any such difficult to repair components and complete any needed repairs before the expiration of the term of this Consent Decree or at the time of the next scheduled well shutdown or scheduled well shut?in, whichever occurs first. Defendant shall maintain records for each inspection performed per Paragraph as follows: 1. Date. start and end time, Facility name and permit number of theinspec?on; List of equipment inspected (see Paragraph and leaking components identi?ed; Name of inspector performing the inspection; Datel(s) of all repair actions taken including any basis for delay of repair; For each inspection conducted in accordance with Paragraph (or Paragraph as an alternative to Paragraph a list of repairs and verification of repairs shall be maintained and kept on file; and Records maintained pursuant to this Paragraph shall be retained for the term of this Consent Decree, and provided to the Department upon request. Page 14 of21 F. Except as otherwise provided herein, Defendant?s obligations under Paragraph 25. Il shall be in effect fora period of two years, beginning on the date of entry ofjudgment herein. ADDITIONAL TERMS [1126] Retention of Jurisdiction. The Court shall retain jurisdiction until termination as described in Paragraph 36 over this matter for the purpose of enabling the Parties to this Consent Decree to apply to the Court for any further order that may be necessary to construe, carry out, or enforce compliance with the terms of this Consent Decree, or to seek its termination. Subsequent Modification. This Consent Decree may be amended by mutual agreement of the Department and Defendant. Any amendment shall be in writing, and if the modification constitutes a material change, then such modi?cation shall be submitted to the Court, and shall be effective only if approved by the Court. [1128] Severability. If any term of this Consent Decree is declared by a court having jurisdiction to be illegal or unenforceable, the validity of the remaining terms will not be affected and, if possible, the rights and obligations of the Parties are to be construed and enforced as if this Consent Decree did not contain that term. [1129] No Waiver. No failure by the Department to enforce any of this Consent Decree's terms after any breach or default will be deemed as a waiver of its rights with regard to that breach or default. nor will such failures be construed as a waiver of the right to enforce all of this Consent Decree?s terms on any further breach or default. [1130] Time for Compliance. The date of postmark or date of email shall be the date used to determine Defendant?s compliance with the requirements of this Consent Decree. Unless a written extension of time is obtained from the Department, failure to submit any document or make any payment by the deadlines set forth in this Consent Decree is a violation of this Consent Decree. Unless otherwise specified. all references Page 15 of2?l to days in this Consent Decree are to calendar days; however, if a deadline occurs on a weekend or legal holiday, the deadline is extended to the next working day. [1131] Force Majeure. Defendant shall perform all the requirements of this Consent Decree according to the time limits set forth herein, unless performance is prevented or delayed by events which constitute a force majeure. l. Force majeure, for the purposes of this Consent Decree, is defined as any event, arising from causes beyond the reasonable control of Defendant, its authorized representatives or contractors, which delays or prevents the performance of any obligation under this Consent Decree and which, by the exercise of due diligence, could not have been overcome or prevented by Defendant. Force majeure includes but is not limited to adverse weather, natural disaster, and delays caused by essential third parties such as construction contractors or equipment suppliers. Force majeure shall not include increased costs of performance of the terms and conditions of this Consent Decree, changed economic circumstances or reasonably foreseeable seasonal fluctuations in the weather conditions of the region. II. If any event occurs which causes or may cause delays in complying with the terms of this Consent Decree, Defendant shall, within ten days of such delay or anticipated delay, whichever is earlier, notify the Department in writing of the anticipated length and precise cause of the delay, the measures taken and to be taken by Defendant to prevent or minimize the delay, and the timetable by which Defendant intends to implement these measures. Any request for an extension of time must be made in writing. If Defendant fails to comply with any of the requirements of this paragraph for a particular event, Defendant shall be precluded from asserting any claim of force majeure for that event. If the Department agrees that the delay or anticipated delay has been or will be caused by a force majeure, the Department shall extend the time for performance hereunder for a reasonable time. In the event the Department does not, in its reasonable judgment and opinion, agree that a delay in achieving compliance with the requirements of this Consent Decree has been or will be caused by a force majeure, the Department will notify Defendant in writing of its decision and any delays in compliance shall not be excused. Defendant has the burden of proving that any delay is caused by a force majeure. [fl32] Parties? Representatives. The Department Representative, as that term is used in this Consent Decree, is Terry O?Clair, Director of the Department's Division of Air Quality, or his successor, unless he designates a replacement in writing. Defendant shall submit all documents required by this Consent Decree, either by certified mail, return receipt requested, email to airquality@nd.gov, or by hand delivery with an Page 16 of21 acknowledgment of receipt form for the Departments signature to the attention of Terry OCIair, Director. Division of Air Quality, 918 East Divide Avenue, 2"d Floor, Bismarck. ND 58501-1947. Defendant's Representative to receive notices relating to this Consent Decree and consult with the Department on its implementation is: Damd Long EOG Resources, inc. 60017" Street, Suite 1000N With a copy to. Eddie Lewis Norton Rose Fulbright US LLP "ii illiil Suite 5100 Successors This Consent Decree shall be binding upon Defendant its agents, successors, and assigns (including any lessee or grantee of the 0&6 production facilities at which the Facilities are located), and upon all persons. contractors and consultants acting on behalf or Defendant During the term of this Consent Decree, Defendant shall include a copy of this Consent Decree with any conveyance of its interest in the Facilities identified on Exhibit 1. Within fifteen business days following any transfer of any such Facility, Defendant and transferee shall each notify the Department in writing of the transfer, the specific Facilities transferred, the identity of the transferee, and the date of transier (the Notification") To relieve Defendant of its obligations under this Consent Decree with respect to the transferred Facilities. and transfer those obligations and rights flowth from those obligations to the transferee. the followrng substitution procedures must occur- I The transferee, concurrent With the Notification, shall commit in writing to the Department that it Will undertake all of Defendant's obligations under this Consent Decree, Upon receipt of such commitment by the Page 17 of21 Department, Defendant shall be relieved of any obligations under this Consent Decree with respect to the transferred Facilities retroactive to the date of the transfer. After transferring any Facilities, Defendant and the Department shall file a joint motion with the Court to approve an amendment to this Consent Decree (to which the transferee is a signatory party), which amendment will effectuate the substitution of transferee for Defendant as a Party to this Consent Decree with respect to the transferred Facilities. Notwithstanding the foregoing, Defendant is not relieved of the obligation to pay any unpaid stipulated penalty owed as of the date of transfer. Any subsequent transfer is subject to these same procedures. [1134] Future Facilities. In addition to the Facilities identified on Exhibit 1, Defendant may elect to identify to the Department Facilities constructed or first operated after the Parties? execution of this Consent Decree ("new Facilities?). Further, for Facilities not subject to a similar Consent Decree of another party, Defendant may elect to identify to the Department Facilities acquired after the Parties' execution of this Consent Decree (?newly acquired Facilities?). The Parties agree that such election to include new or newly acquired Facilities shall be made to the Department in writing. and shall be subject to the rights and obligations set forth in this Consent Decree, including without limitation those specified in Paragraph 25 and Paragraph 17. For new Facilities, in no event shall a civil penalty be owed in accordance with Paragraph 20 but such new Facilities are subject to Paragraph stipulated penalties. Defendant shall pay a civil penalty pursuant to Paragraph 20 for all newly acquired Facilities with any applicable reductions under Paragraph 21 and Paragraph 22. Newly acquired Facilities are subject to the Paragraph 23?s stipulated penalties. Beginning the following full month after inclusion of such Facilities, Defendant shall conduct inspections in accordance with Paragraph 25. ll.A and Paragraph Any subsequent addition of Facilities by Defendant in accordance with Paragraph 25 shall not be considered a material change in accordance with Paragraph 27. Page 18 of21 [1135] Covenant Not To Sue. Subject to the provisions of Paragraph 24 (Reservation of Rights), and Respondent's substantial compliance with the terms of this Consent Decree, the Department shall not institute any further action against Respondent for the violations of Air Pollution Control Laws covered in Paragraphs 16 and 17 and noncompliance issues addressed in Paragraph 25. However, nothing herein shall be construed as limiting the Department?s right to seek damages, penalties, and fines for the violation of the terms and conditions of this Consent Decree or for violation of an order issued by the Department incorporating this Consent Decree's terms. [1136] Termination. Defendant may petition the Court for termination of this Consent Decree upon receipt of written notice from the Department that Defendant has demonstrated that all the terms of this Consent Decree have been completed to the satisfaction of the Department and that any assessed civil penalty has been paid. Alternatively, after two years from the effective date of this Consent Decree, Defendant may request in writing that the Department agree to termination. If the Department fails to respond in 30 days after service of the request or denies such request, Defendant may petition the Court for termination, such petition to be granted upon a showing that Defendant has complied with the terms of this Consent Decree. [1137] Costs. Each Party shall bear its own costs incurred in this action, including attorney fees. All costs incurred by Defendant in complying with the terms of this Consent Decree shall be borne by Defendant. [1138] Voidable. If for any reason the Court declines to approve this Consent Decree, the settlement shall be voidable at the sole discretion of the Department or Defendant, and if voided, the terms of this voided Agreement may not be used by either Party as evidence in any proceeding. [11 39] Rights. Except as expressly provided herein, this Consent Decree shall not create any rights in any party other than the Parties to this Consent Decree. Page 19 of21 [1140] Effective Date. This Consent Decree becomes effective on the date of the entry of judgment herein. [1141] Stipulation for Entry of Decree, Order, and Judgment. The Department and Defendant consent to the entry of this Consent Decree as a final order and judgment in this matter. Page 20 of 21 1N WHEREOF, the Parties have set their hands. DATED: F2 -- :1 DEPARTMENT OF HEALTH Want David Giattg: Chief Environmei?qtal Heaith Section DATED: 3333;: 3i. EOG RESOURCES, INC. a W194 Name: k?rtmd'h W. 506?. (1?6 km" [Printed] Title: Vtez. Puma/1+ Md 6anem! Manager Page 21 ot21 3 Missouri Department of NATURAL RESOURCES Eric R. Greitens, Governor Carol 5. Comer. Director SEP 1 8 2017 Mr. Edward Chu Deputy Administrator, Region 7 U.S. Environmental Protection Agency 11201 Renner Blvd. Lenexa, KS 66219 Dear Ed: On July 18, 2017, while attending a meeting at the Environmental Protection Agency?s (EPA) Headquarters, I received from you the letter from DeAndr? Singletary of Region 7 Enforcement Coordination Of?ce transmitting the Region 7 Draft EPA Planned Inspections for the Fiscal Year. I understand that this letter has long been part of the annual planning and collaboration process between Region 7 and the Missouri Department of Natural Resources to avoid duplicative inspections and ensure the best allocation of resources by both agencies. Historically, the inspection function has been shared, with the EPA regularly conducting a percentage of inSpections under the various media. believes that it is appropriate at this time to revisit and clarify our reSpective roles, particularly for how we conduct inspections, set enforcement objectives and approach permitting decisions. As the current administration has expressed on many occasions, will continue to stand on its own two feet on environmental matters in Missouri, a vision that aligns squarely with the principle of cooperative federalism, which has been articulated by Administrator Pruitt and other senior EPA of?cials. Under this principle, we believe that the state is in the best position to cra? environmental policy and implement programs to achieve the outcomes articulated by the state and federal statutes. While not overlooking the fact that there are speci?c situations that warrant Region 7 assistance in these areas of inspection, enforcement and permitting, I would ask Region 7 to step back from its routine practice of conducting individual inspections and taking enforcement actions in Missouri. It is apprOpriate for the EPA to retain its oversight role by periodically and routinely auditing state implementation programs to achieve national minimum standards, but the Department is the implementer of these programs, not the EPA. To the extent that Missouri has received delegated federal authority for the various programs, we believe that implementation ?mctions should reside with the state program, except where particular circumstances or the pursuit of speci?c goals would recommend otherwise. Exceptions to this should be identi?ed through close communication and involvement of upper management of both agencies. if: Rocydod pour Mr. Edward Chu Page Two In the same vein, it is apparent that Region 7 has long been accustomed to reviewing a large volume of permits issued in Missouri. This is noted especially, though not exclusively, in the area of National Pollutant Discharge Elimination System permitting. The Department requests that Region 7 review its practice of routinely scrutinizing the proposed and ?nal permits, over and above what is authorized in existing memoranda of agreement or other programmatic agreements. I understand that this represents a signi?cantly different direction from the past and will require dedicated effort and communication to reach an understanding on its implications and practices. I also realize that such changes may require revisiting memoranda of agreements, partnership agreements and other documents regarding coordination and workload. We will be reviewing all such agreements for areas in which the scope and frequency of Region 7?s activities would seem to exceed what is expected of a normal audit function. Through this, I am con?dent that you will recognize the opportunities available to Region 7 to direct more resources to those activities which are the exclusive function your agency. Together, I?m con?dent that we can achieve greater compliance, environmental protection and economic bene?t to Missouri by working in concert under this approach. Should you have any questions, please feel free to contact me at 573-751n0763, by email at ed.galbraim@dnr.mo.gov, or by mail at the Missouri Department of Natural Resources, P.O. Box 176, Jefferson City, MO 65102-0176. OF ENVIRONMENTAL QUALITY I I Ed Galbraith Director Esto c: Ms. Carol S. Corner, Missouri Department of Natural Resources Mr. Dru Buntin, Missouri Department of Natural Resources Mr. Steven Feeler, Missouri Department of Natural Resources Mr. Aaron Schmidt, Missouri Department of Natural Resources Mr. DeAndr? D. Singletary, U.S. EPA, Region 7, Enforcement Coordination Of?ce Ms. Katie Jo Wheeler, Missouri Department of Natural Resources Mr. Don Willoh, Missouri Department of Natural Resources UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 94"" mo?- 7 11201 BOULEVARD LENEXA, KS 66219 OCT 1 2 2017 OFFICE OF THE REGIONAL ADMINISTRATOR Mr. Ed Galbraith, Director Missouri Department of Natural Resources, Division of Environmental Quality P.O. Box 176 Jefferson City, Missouri 65102 Dear Mr raith: E17 Thank you for your letter of September 18, 2017. Your letter provides MDNR's response to proposed inspection list for Fiscal Year 2018, and also addresses more broadly the principle of cooperative federalism and the state?s desire to revisit our respective roles in implementing federal programs which have been delegated to the State of Missouri. With reSpect to inspections and enforcement, we agree with the basic principle you articulated. We agree that the MDNR should be the primary day-to-day implementer of delegated programs, except where particular circumstances or the pursuit of speci?c goals would recommend otherwise. We also wholeheartedly agree with you that exceptions to this should be identified through close communication and involvement of upper management of both agencies. From our point of view, examples of some of the types of situations that upper management might decide warrant EPA involvement in inspections and enforcement include: Emergency situations involving protection of public health and the environment Signi?cant noncompliance that the state has not timely addressed Inspection or enforcement work requiring specialized EPA equipment or expertise Federal and State owned/operated facilities Actions of national interest or involving multiple state jurisdictions . Program oversight inSpections I ReSponse to requests for assistance With reSpect. to the FY18 prOposed inSpection list, most of the facilities on that list do not involve particular circumstances that warrant EPA involvement, and we are prepared to defer to MDNR on the conduct of those inspections. On the other hand, we believe some of the facilities on the list do present circumstances where EPA involvement in the inspection is appropriate. We would like to meet with you and your senior managers to go through the list of proposed inspections and discuss the speci?c ones where we believe EPA involvement is warranted. Your letter also touches on cooperative federalism as applied to permitting. We agree with the principle that EPA should focus its oversight efforts on periodically auditing state programs. However, we have found that early reviews of proposed permits can be bene?cial and there are particular circumstances where EPA review of individual permits would be appropriate. One example would be permits that are not in accord with legal requirements of the Clean Water Act, Clean Air Act, or Resource Conservation and Recovery Act. Currently, we review CAA Prevention of Significant Deterioration Permit applications concurrent with MDNR providing technical assistance during develOpment of the permit. This review results in any regulatory issues being addressed prior to permits being placed on public notice. For RCRA, we review draft permits and concur to allow for the elimination of Part II permit since MDNR is fully authorized. Under section 402(d) of the Clean Water Act, EPA reviews draft permits placed on public notice. If there are any legal suf?ciency issues, receipt prior to public notice allows us to discuss and jointly reach a better understanding and work to a common resolution in advance of the full permit development, and avoid EPA commenting during the public notice period. We acknowledge that some of our past permit reviews might have focused on Federal policy choices rather than limiting the review to legal requirements. We hope that our narrowed focus on legal suf?ciency when conducting permit reviews will allow us to continue our pre-public inter-governments review and comment process. We look forward to further discussions with you on permitting roles and responsibilities. These shifts in direction do represent signi?cant change, and we are committed to working together with you to reach a common understanding on our reSpective roles. You point out, so, that we may need to revisit overarching documents such as memoranda of understanding and performance partnership agreements. In the meantime, as we have conversations about inspections, enforcement actions and permitting the initial agreements on roles and responsibilities should be captured in writing to ensure staff in both agencies understand how environmental programs will be implemented in Missouri. We see our collaborative discussions with MDNR as an interfacing with the ECOS EPA workgroup on enforcement and our reapective roles evolving as the workgroup results are implemented. Our goal is to work together with you in close collaboration, mindful of our roles, to best use our collective resources and expertise to achieve compliance with the law and promote prosperity. We look forward to ?srther conversations with you. Sincer y, ward . hu Deputy Regional Administrator