1. Air Quality Regulation 7 Briefing for the Garfield County Energy Advisory Board Jim Rada Environmental Health Manager Garfield County Public Health February 1, 2007

2. Introduction The oil and gas sector is rapidly growing and contributing to Colorado’s air quality issues The AQCC adopted oil and gas industry regulations in December 2006 – Control of VOC “flash emissions” from condensate tanks New Statewide requirements and more stringent EAC requirements –State-wide emission standards for new and relocated natural gas-fired engines –State-wide control of VOC emissions from dehydrators

3. More Stringent Condensate Tank Controls for the EAC Area Commencing May 1, 2007, system-wide reduction requirement raised from 47.5% to 75% for ozone season Commencing May 1, 2012, system wide reduction raised to 78% Commencing October 1, 2007, non-ozone season reduction requirement raised from 38% to 70%

4. More Stringent Condensate Controls for the EAC Area Additional requirements: –Recordkeeping Weekly inspection Weekly averaging Signage and IDs –Reporting: Movement of Controls Semi-annual compliance –Monitoring Inspection of equipment

5. Statewide Regulation Number 7 Revisions: Condensate Tanks New and existing condensate tanks emitting 20 tpy VOC or more: –Commencing May 1, 2008 –Required to control emissions by 95% 5,637 tpy VOC reduced from 152 condensate tanks –59 of 207 tank batteries in Garfield County (9/06) –Will reduce Garfield County emissions by ~2168 tpy, or ~46% –~30% of the statewide “fleet” controlled – 63% emission reduction Cost/benefit: – $263/ton of VOCs reduced

6. Statewide Reg. 7 Revisions: Engine Standards New and relocated engines from out-of-state: –Commencing July 1, 2007 –Engines greater than 100 HP will be required to meet emission limits for NOx, CO and VOCs NOx, VOC and CO emissions growth from engines will be reduced – quantity not determined due to uncertainty in future compression needs Cost Benefit: – NOx: $108/ton – VOC: $240-$1,100/ton – CO: $193-$385/ton

7. Statewide Reg. 7 Revisions: Engine Standards (These requirements apply throughout the State - EAC area has had similar controls for >500 hp engines since 2005) Maximum Engine hp Construction or Relocation Date NOx g/hp-hr CO g/hp-hr NMHC g/hp-hr 100 to 500 1/1/2008 1/1/2011 2.0 1.0 4.0 2.0 1.0 0.7 Greater than 500 7/1/2007 7/1/2010 2.0 1.0 4.0 2.0 1.0 0.7

8. Statewide Reg. 7 Revisions: Glycol Dehydrators New and existing dehydrators emitting 15 tpy VOC or more: –Commencing May 1, 2008 –Required to control emissions by 90% 1,193 tpy VOC reduced from 59 dehydrators (outside of the EAC area) –Applies to 22 units in Garfield County (as of 9/06) –Will reduce emissions ~304 tpy, ~27% of total statewide emissions from these sources Cost/benefit: – $165/ton of VOCs reduced The controls are consistent throughout the State –EAC area has had these controls since 2005

9. Rationale for Differing Condensate Tank Control Requirements The AQCC adopted oil and gas condensate tank regulations on December 17, 2006 –EAC Area: 75% VOC emission reduction –Statewide: 63% VOC emission reduction The more stringent EAC/Front Range requirements are based on the region’s precarious ozone situation –The region is close to violating the standard –Stringent requirements are designed to achieve a maximum emission reduction from the oil and gas sector and give the region the best chance of attaining the standard in 2007

10. Rationale for Differing Condensate Tank Control Requirements The Statewide regulation is an initial step to manage emissions from the burgeoning oil and gas sector –The rest of the State is not in jeopardy of violating the ozone standard –Controls to achieve a very good level of emission reduction to help ensure that, among other things, ozone levels do not approach the ozone standard The AQCD will continually assess ozone concentrations and other air quality issues across the State and will report its findings to the AQCC on an annual basis If Front Range or Statewide air quality issues require additional emission reductions, the AQCD will propose the appropriate control measures to the AQCC

11. Questions?