1. SBEA Internal Training – Oil & Gas February 3, 2010 Oil & Gas Investigations Jason Harris TCEQ Houston Region GCEAG – September 9, 2010

2. GCEAG - September 9, 2010 Oil & Gas Production in Texas Oil & Gas Wells As of 2008 DFW Barnett Shale

3. Investigation Types Complaints Complaints Emissions Events Emissions Events Stack Tests Stack Tests Comprehensive Compliance Investigations Comprehensive Compliance Investigations Focused Investigations Focused Investigations GCEAG - September 9, 2010

4. Complaints

5. GCEAG - September 9, 2010 Complaints Noise Noise Truck Traffic / Road Conditions Truck Traffic / Road Conditions Property Values Property Values Well Location / Distance to Homes Well Location / Distance to Homes Dust Dust Odors Odors No Permit / Authorization No Permit / Authorization

6. GCEAG - September 9, 2010 What is a Nuisance? 30 Texas Administrative Code §101.4 30 Texas Administrative Code §101.4 “No person shall discharge from any source whatsoever one or more air contaminants or combinations thereof, in such concentration and of such duration as are or may tend to be injurious to or to adversely affect human health or welfare, animal life, vegetation, or property, or as to interfere with the normal use and enjoyment of animal life, vegetation, or property” A nuisance violation may be issued regardless of compliance with other rules A nuisance violation may be issued regardless of compliance with other rules

7. GCEAG - September 9, 2010 Complaint Response Each complaint is prioritized Each complaint is prioritized Oil & gas complaints are investigated within 12 hours or by the next business day Oil & gas complaints are investigated within 12 hours or by the next business day

8. GCEAG - September 9, 2010 Emissions Events

9. GCEAG - September 9, 2010 Emissions Events 30 TAC §101, Subchapter F – Emissions Events and Scheduled Maintenance, Startup and Shutdown Activities 30 TAC §101, Subchapter F – Emissions Events and Scheduled Maintenance, Startup and Shutdown Activities Upset event – “An unplanned and unavoidable breakdown or excursion of a process or operation that results in unauthorized emissions” Upset event – “An unplanned and unavoidable breakdown or excursion of a process or operation that results in unauthorized emissions” Emission event – “Any upset event or unscheduled maintenance, startup, or shutdown activity, from a common cause that results in unauthorized emissions of air contaminants from one or more emissions points at a regulated entity” Emission event – “Any upset event or unscheduled maintenance, startup, or shutdown activity, from a common cause that results in unauthorized emissions of air contaminants from one or more emissions points at a regulated entity”

10. GCEAG - September 9, 2010 Emissions Events 30 TAC §101.201 - Emissions Event Reporting and Recordkeeping Requirements 30 TAC §101.201 - Emissions Event Reporting and Recordkeeping Requirements Reportable Quantities (within any 24 hr period) Reportable Quantities (within any 24 hr period) Typically 5,000 lbs for natural gas Typically 5,000 lbs for natural gas 100 lbs if H 2 S or mercaptans 100 lbs if H 2 S or mercaptans If RQ exceeded, must be reported within 24 hours (reportable) If RQ exceeded, must be reported within 24 hours (reportable) If not, final in-house record must be completed within 14 days (non-reportable) If not, final in-house record must be completed within 14 days (non-reportable)

11. GCEAG - September 9, 2010 Stack Testing

12. GCEAG - September 9, 2010 Stack Testing Oil & gas production sites often include multiple combustion sources which may require stack testing Oil & gas production sites often include multiple combustion sources which may require stack testing 30 TAC 117, Subchapter D 30 TAC 117, Subchapter D Applies to minor, stationary sources of NOx located in ozone non-attainment areas 40 CFR 60 Subpart JJJJ – Standards of Performance for Stationary Spark Ignition Internal Combustion Engines 40 CFR 60 Subpart JJJJ – Standards of Performance for Stationary Spark Ignition Internal Combustion Engines 40 CFR 63 Subpart ZZZZ – National Emissions Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines 40 CFR 63 Subpart ZZZZ – National Emissions Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines

13. GCEAG - September 9, 2010 Stack Testing To determine whether an engine must be stack tested, the following information is needed: Type of Compression Type of Compression Horsepower Rating Horsepower Rating Manufacture Date Manufacture Date Type of Burn (Rich v. Lean) *these numbers differ for the EPA vs. TCEQ Type of Burn (Rich v. Lean) *these numbers differ for the EPA vs. TCEQ Is the Engine in question Portable, Stationary, or Emergency? Is the Engine in question Portable, Stationary, or Emergency? Is the Engine located in an Attainment or non-Attainment County? Is the Engine located in an Attainment or non-Attainment County? Is the Engine a Major or Minor Source? Is the Engine a Major or Minor Source? Is the Engine used for Utility Electric Generation or is it Is the Engine used for Utility Electric Generation or is it used for Industrial/Commercial practices?

14. GCEAG - September 9, 2010 Compliance Investigations

15. GCEAG - September 9, 2010 Compliance Investigations Investigations are triggered primarily through: Investigations are triggered primarily through: reconnaissance activities reconnaissance activities complaints complaints ambient or mobile monitoring results ambient or mobile monitoring results special projects or initiatives special projects or initiatives An investigation may be limited in focus or may be more comprehensive An investigation may be limited in focus or may be more comprehensive

16. GCEAG - September 9, 2010 Investigation Tools GasFindIR ® camera Toxic Vapor Analyzer Mini RAE Summa canister

17. GCEAG - September 9, 2010 GasFindIR Camera

18. GCEAG - September 9, 2010 GasFindIR Camera Sources of Observed Emissions Sources of Observed Emissions Condensate tank thief hatches Condensate tank thief hatches Water tanks Water tanks Unlit flares Unlit flares Tank vents / Enardo valves Tank vents / Enardo valves Glycol still vents Glycol still vents Gas-actuated valves Gas-actuated valves Wellheads Wellheads

19. GCEAG - September 9, 2010 GasFindIR Camera

20. GCEAG - September 9, 2010 GasFindIR Camera If emissions are observed with the GasFindIR If emissions are observed with the GasFindIR IR video is recorded IR video is recorded Video is shared with the owner/operator along with a questionnaire Video is shared with the owner/operator along with a questionnaire The questionnaire is used to obtain specific information about site operations, the reason for the observed emissions, and steps taken to correct or minimize emissions The questionnaire is used to obtain specific information about site operations, the reason for the observed emissions, and steps taken to correct or minimize emissions

21. GCEAG - September 9, 2010 Oil & Gas Questionnaire Company Name:Site Name: Site Location/Address:Contact Name: Contact Phone Number:Contact Email Address: 1. What are the TCEQ air authorizations for this site (i.e. Permit By Rule, Standard Permit, or New Source Review Permit, Title V (if applicable))? Please provide the authorization number, or registration number. 2. Is the site currently in compliance with the authorizations listed above? What method (source testing, engineering calculations, etc…) did you use to determine compliance with your authorizations? What method (source testing, engineering calculations, etc…) did you use to determine compliance with your authorizations? If you are not currently in compliance with your authorizations, what actions are you planning to take to achieve compliance? If you are not currently in compliance with your authorizations, what actions are you planning to take to achieve compliance? 3. What is the distance to the nearest receptor (i.e. residence, park, school, church)? 4. Please provide a list of equipment at the site. 5. Please provide a detailed process description. 6. Based upon the provided video, please provide the following information: Identification of the unit or equipment with the observed plume. Identification of the unit or equipment with the observed plume. The associated authorization for that piece of equipment. The associated authorization for that piece of equipment. Explanation for the observed plume. Explanation for the observed plume. Explanation as to how you plan to fix or have fixed the observed emissions. Explanation as to how you plan to fix or have fixed the observed emissions. If the observed emissions from the source are allowed by the site’s authorization, provide the method used to determine this compliance. If the observed emissions from the source are allowed by the site’s authorization, provide the method used to determine this compliance. Please provide a timeline for addressing the observed emissions. Please provide a timeline for addressing the observed emissions.

22. GCEAG - September 9, 2010 Summa Canisters Used to collect air samples Used to collect air samples Analyzed with a gas chromatograph Analyzed with a gas chromatograph Provide concentrations of benzene and other hazardous air pollutants Provide concentrations of benzene and other hazardous air pollutants

23. GCEAG - September 9, 2010 Common Problems / Challenges Thief Hatch

24. GCEAG - September 9, 2010 Common Problems / Challenges Authorization Permit By Rule (PBR) - 30 TAC §106.352 Permit By Rule (PBR) - 30 TAC §106.352 limits total VOC emissions to 25 tpy limits total VOC emissions to 25 tpy special provisions for sour gas special provisions for sour gas no maintenance requirements and no distance requirements for sweet gas facilities no maintenance requirements and no distance requirements for sweet gas facilities Standard Permit - 30 TAC §116.620 Standard Permit - 30 TAC §116.620 not site-specific, but includes more requirements than a PBR not site-specific, but includes more requirements than a PBR New Source Review (NSR) Permit New Source Review (NSR) Permit site-specific permit site-specific permit may require modeling for air contaminants may require modeling for air contaminants Title V Permit Title V Permit required for sources emitting VOC greater than major source threshold (depends on location) required for sources emitting VOC greater than major source threshold (depends on location)

25. GCEAG - September 9, 2010 Common Problems / Challenges Emission Estimates Several methods for estimating VOC emissions Several methods for estimating VOC emissions Vasquez-Beggs Equation Vasquez-Beggs Equation Gas-Oil Ratio Gas-Oil Ratio Process Simulators Process Simulators Direct Measurement Direct Measurement Each method has drawbacks Each method has drawbacks Many operators fail to estimate or measure emissions; simply assume PBR limits Many operators fail to estimate or measure emissions; simply assume PBR limits

26. GCEAG - September 9, 2010 Rule Revisions

27. Draft oil & gas standard permit and PBR currently open for public comment Draft oil & gas standard permit and PBR currently open for public comment Draft Standard Permit: http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_proposed_s p_fin.pdf Draft Standard Permit: http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_proposed_s p_fin.pdf http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_proposed_s p_fin.pdf http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_proposed_s p_fin.pdf Draft PBR: http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_pro_010018 106.pdf Draft PBR: http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_pro_010018 106.pdf http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_pro_010018 106.pdf http://www.tceq.state.tx.us/assets/public/pe rmitting/air/Announcements/og_pro_010018 106.pdf GCEAG – September 9,2010

28. Rule Revisions TCEQ seeks to accomplish the following through this rulemaking: Update administrative and technical requirements Update administrative and technical requirements Include practically enforceable monitoring, sampling, and recordkeeping requirements Include practically enforceable monitoring, sampling, and recordkeeping requirements Address and authorize planned maintenance, startup, and shutdown (MSS) activities Address and authorize planned maintenance, startup, and shutdown (MSS) activities Allow the commission to more effectively focus resources on facilities that significantly contribute air contaminants to the atmosphere Allow the commission to more effectively focus resources on facilities that significantly contribute air contaminants to the atmosphere Make appropriate changes to registration and notification requirements Make appropriate changes to registration and notification requirements Ensure that air emissions from specific facilities are protective Ensure that air emissions from specific facilities are protective GCEAG – September 9,2010

29. Rule Revisions The comment period for the proposed Oil and Gas PBR and Standard Permit has been extended to October 1, 2010. The comment period for the proposed Oil and Gas PBR and Standard Permit has been extended to October 1, 2010. New date for consideration of adoption by the Commission will be December 14, 2010 New date for consideration of adoption by the Commission will be December 14, 2010 GCEAG – September 9,2010

30. GCEAG - September 9, 2010 Houston-Galveston-Brazoria Specific Requirements

31. HGB Specific Requirements After January 1, 2009, the following requirements apply to sites within the HGB ozone non-attainment area: After January 1, 2009, the following requirements apply to sites within the HGB ozone non-attainment area: 30 TAC 115.112(d)(4): Storage tanks storing condensate must route flash gases to a control device if throughput exceeds 1,500 barrels per year 30 TAC 115.112(d)(4): Storage tanks storing condensate must route flash gases to a control device if throughput exceeds 1,500 barrels per year 30 TAC 115.112(d)(5): Storage tanks storing crude oil or condensate must route flash gases to a control device if VOC emissions exceed 25 tpy 30 TAC 115.112(d)(5): Storage tanks storing crude oil or condensate must route flash gases to a control device if VOC emissions exceed 25 tpy GCEAG – September 9,2010

32. HGB Specific Requirements The Houston Regional Office recently concluded an outreach effort to advise tank battery operators of the HGB specific requirements The Houston Regional Office recently concluded an outreach effort to advise tank battery operators of the HGB specific requirements This outreach also included a survey of tank batteries with the potential to exceed 1,500 bbls of condensate per year This outreach also included a survey of tank batteries with the potential to exceed 1,500 bbls of condensate per year On-site investigations at a small number of tank batteries may begin as early as October On-site investigations at a small number of tank batteries may begin as early as October GCEAG – September 9,2010

33. Additional Information Multi-media compliance resource: http://www.tceq.state.tx.us/assistance/sb lga/industry/oilgas.html Multi-media compliance resource: http://www.tceq.state.tx.us/assistance/sb lga/industry/oilgas.html http://www.tceq.state.tx.us/assistance/sb lga/industry/oilgas.html http://www.tceq.state.tx.us/assistance/sb lga/industry/oilgas.html PBR and Standard Permit info: http://www.tceq.state.tx.us/permitting/air/ announcements/nsr_announce_3_25_10.html PBR and Standard Permit info: http://www.tceq.state.tx.us/permitting/air/ announcements/nsr_announce_3_25_10.html http://www.tceq.state.tx.us/permitting/air/ announcements/nsr_announce_3_25_10.html http://www.tceq.state.tx.us/permitting/air/ announcements/nsr_announce_3_25_10.html GCEAG – September 9,2010

34. GCEAG - September 9, 2010 Questions?