CDPHE s Regulation of Oil and Gas Development. Colorado Department of Public Health and Environment Kent Kuster CDPHE Oil and Gas Liaison

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1 CDPHE s Regulation of Oil and Gas Development Colorado Department of Public Health and Environment Kent Kuster CDPHE Oil and Gas Liaison

2 CDPHE s role The Colorado Oil and Gas Conservation Commission (COGCC) is authorized by the legislature to foster the responsible development of Colorado's oil and gas natural resources in a manner consistent with the protection of public health, safety, and welfare, including protection of the environment and wildlife. As a result, the Colorado Department of Public Health and Environment has a limited role in regulating oil and gas development.

3 CDPHE s Regulation of Oil and Gas The CDPHE has consultation responsibilities in the COGCC rules in the following areas. Public Water Supply Protection (consultation for variance request) Class II Injection wells (COGCC permitting agency) Statewide Setbacks and High Density Area s Coalbed Methane Wells Odors and Dust (COGCC and CDPHE regulate) E&P Waste Management (COGCC and CDPHE regulate) Stormwater Management (COGCC and CDPHE regulate)

4 COGCC s Rules The COGCC has rules to address concerns related to oil and gas development in Colorado 100 Series Definitions 200 Series General Rules 300 Series Drilling, Development, Production and Abandonment 400 Series Unit Operations, Enhanced Recovery Projects, and Storage of Liquid Hydrocarbons 500 Series Rules of Practice and Procedure 600 Series Safety Regulations 700 Series Financial Assurance and Oil and Gas Conservation Environmental Response Fund 800 Series Aesthetic and Noise Control Regulations 900 Series E&P Waste Management 1000 Series Reclamation Regulations 1100 Series Pipeline Regulations 1200 Series Protection of Wildlife Resources

5 COGCC Rule 317 B Public Water System Protection 3 protection zones Internal (0 300 ft.) Intermediate ( ft.) External ( ft.) Protection around drinking water intakes 5 stream miles upstream Variance request substantially equivalent protection

6 Regulation of groundwater In 1989 S.B. 181 was amended to define the responsibilities of state agencies to implement water quality protection of state waters. The COGCC is responsible for implementing standards and classifications for ground water discharges other than point source discharges to surface water. The Water Quality Control Commission (WQCC) is solely responsible for adoption of water quality standards and classifications.

7 Stormwater Management Rule is intended to pick up when the CDPHE/WQCD stormwater construction permit is no longer required. Requires all oil and gas locations (on going) to use BMPs to control stormwater discharges from operations. Post Construction Stormwater programs may not be required for locations where soil erosion potential is low, vegetative cover is high, disturbed land is less than an acre, and slope is less than 5%.

8 Solid and Hazardous Waste Division The Hazardous Materials and Waste Management Division (HMWMD) was a stakeholder in the COGCC 2008 rulemaking hearings and contributed to the 900 Series Rules that address E&P Waste Management Synthetic liner disposal (not intrinsic to oil and gas) Commercial Centralized E&P Waste Management Facilities (permitted by CDPHE) Table cleanup standards

9 COGCC s Regulation of Air Quality There is a new role in air quality regulation for the COGCC with the addition of COGCC Rule dealing with Odors and Dust Controlling emissions from tanks, glycol dehydrators, pits and pneumatic devises that have potential emit 5 tpy or greater in Garfield, Mesa and Rio Blanco Counties within ¼ mile of a building unit Green Completions (Statewide) where technically feasible Operators must employ sand traps, surge vessels, separators and tanks as soon as practicable during flowback and cleanout operations to safely maximize resource recovery and minimized releases to the environment.

10 Emissions from Oil & Gas Production Oil and gas facilities are industrial facilities and as such are regulated by the APCD if they have the potential to emit VOC s at certain levels.

11 APCD s Regulation of Oil and Gas The Air Pollution Control Division (APCD) is responsible for oversight and permitting of State and Federal Air Quality Rules. State Air Quality Rules AQCC Rule 1 Opacity (e.g. smoke and fugitive dust) AQCC Regulation 2 Odor AQCC Regulation 3 State permitting Requirements AQCC Regulation 6 New Source Performance Standards AQCC Regulation 7 Ozone Precursor Control AQCC Regulation 8 Maximum Achievable Control Technology (MACT) Standards

12 APCD s Regulation of Oil and Gas Federal Rules New Source Performance Standards (NSPS) 40 CFR Part 60 NSPS Kb Storage tanks NSPS GG Gas turbines NSPS KKK Fugitive Volatile Organic Compound emissions) (under revision) NSPS LLL Amine and sulfur recovery units) (under revision) NSPS IIII Compression ignition engines NSPS JJJJ Spark ignition engines NSPS KKKK Combustion turbines NSPS OOOO Oil and Gas (proposed) NSPS Dc Small boilers Maximum Achievable Control Technology (MACT) 40 CFR Part 63 MACT HH Oil and natural gas production facilities (tanks, compressors, and ancillary equipment) (under revision) MACT HHH Natural gas transmission and storage facilities (dehydrators) ) (under revision) MACT YYYY Combustion turbines MACT ZZZZ Reciprocating engines MACT DDDDD Boilers and process heaters MACT GGGGG Site remediation requirements

13 Air Pollutant Emission Notice (APEN) APEN required for emissions of air pollutants from construction, modification or alteration of any facility from which air pollutants are emitted at > 2 tpy of VOC emissions. APEN information includes: Description of emission point Fuel types and consumption rates Requested process rates Emission estimates Renew every 5 years unless major modification occurs

14 APCD Permit A permit is required for facilities that have the potential to emit 5 tpy VOCs. This document authorizes the legal emissions of air pollutants under certain terms and conditions. Defines what pollutants can be emitted and at what levels Identifies what steps a facility must take to reduce emissions Specifies how emissions must be measured and reported

15 APCD Permits Statewide 3,360 permit applications received in 2010 (Represents ~ 70% increase since 2008) COGCC records indicate that since 2009 there have been seven (7) drilling permits issued in Delta County and five (5) new well starts

16 APCD Inspections The APCD has 4.2 employees that conduct inspections throughout Colorado APCD conducted 336 inspections for 2010/2011 inspection period Ozone non attainment area a priority

17 Air Quality Monitoring Sites

18 Air Quality Monitoring Sites

19 Monitoring Site Costs Cost for a monitoring site: Shelter = $15,000 $35,000 Analyzer = $9,000 $32,000 Meteorological = $5,000 $10,000 On site QA equipment = $2,000 $25,000 Data logging/communications = $10,000 Installation = $1,000 $20,000 Multi pollutant site can cost $250,000 or more Operational: Utilities Filters/consumables/repairs Data processing/qa/qc

20 LGD Opportunities COGCC set up the Local Government Designee (LGD) role to provide communities with a single point of contact for oil and gas issues. The LGD is the person that receives notification of Form 2A Location Assessment applications and the Form 2 Drilling applications.

21 LGD Opportunities The COGCC rules provide an opportunity to officially consult with CDPHE on public health, safety, welfare and environmental concerns on Form 2A s and Form 2 s; however, there is always the opportunity to simply call to discuss a permit or situation with CDPHE. How should we use the LGD? Develop a relationship with the COGCC staff Be an information provider and serve as single point of contact to address specific concerns for the community

22 Questions?