1. Montana DEQ Air Resources Management Bureau Registration Section Montana Petroleum Association Annual Meeting August 27, 2008 Billings, Montana Presented By: Mark Ewanic

2. August 27, 2008

3. Outline Introduction –History –Office & Staff Registration/Deregistration –Submittal Process –New/Updated Registrations –Backlogged Registrations –Deregistrations Compliance Monitoring –Compliance Determination –Inspection Zones –Field Approach Providing Compliance Assistance –Registered Facilities –Unregistered Facilities –Common Compliance Issues Current Status and Path Forward Contact Information

4. August 27, 2008 Introduction

5. August 27, 2008 History Before January 2006 –Department had 600+ MAQP applications from oil or gas well facilities –Majority of facilities already constructed/operating without MAQP –Not feasible to utilize existing Department staff to issue the MAQPs within statutory time frames J F M AMJJASOND 2006 J F M AMJJASOND 2007 J F M AMJJASOND 2008

6. August 27, 2008 History January 2006 ARM Title 17, Chapter 8, Subchapter 16 –Oil or gas well facilities can construct/operate prior to issuance of MAQP –Must comply with requirements of Subchapter 16 –Must have submitted application prior to January 3, 2006, or within 60 days after well completion date (whichever was later) J F M AMJJASOND 2006 J F M AMJJASOND 2007 J F M AMJJASOND 2008 Jan 06 – Subchapter 16

7. August 27, 2008 History April 2006 ARM Title 17, Chapter 8, Subchapter 17 –Allow oil or gas well facilities to register with the Department in lieu of obtaining MAQP Supply requested registration information Follow fee, operating, emission control, inspection and repair, and recordkeeping and reporting requirements J F M AMJJASOND 2006 J F M AMJJASOND 2007 J F M AMJJASOND 2008 Jan 06 – Subchapter 16 Apr 06 – Subchapter 17

8. August 27, 2008 History October 2007 Air Quality Registration Section –Office established and staffed –Began acknowledging backlog –Acknowledge new registration/deregistration requests –Identify/contact facilities that may be required to be either permitted or registered but have not submitted an application J F M AMJJASOND 2006 J F M AMJJASOND 2007 J F M AMJJASOND 2008 Jan 06 – Subchapter 16 Apr 06 – Subchapter 17 Oct 07 – Registration Section

9. August 27, 2008 History June 2008 Initial Field Inspections and Verifications –Compliance inspections on Registered facilities –Verify status of unregistered facilities that may require MAQP or registration –Provide compliance assistance J F M AMJJASOND 2006 J F M AMJJASOND 2007 J F M AMJJASOND 2008 Jan 06 – Subchapter 16 Apr 06 – Subchapter 17 Oct 07 – Registration Section June 08 – Field Insp/Verif

10. August 27, 2008 History Present Day Ongoing Work –Inspection reports –Contact companies with unregistered facilities –New registration/deregistration requests –Backlog –Evaluate/improve process Subchapter 17 rule change J F M AMJJASOND 2006 J F M AMJJASOND 2007 J F M AMJJASOND 2008 Jan 06 – Subchapter 16 Apr 06 – Subchapter 17 Oct 07 – Registration Section June 07 – Initial Facility Inspections WE ARE HERE

11. August 27, 2008 Purpose of Registration Provide oil or gas well facilities with an alternative to MAQP –More operational flexibility Register 60-days after well completion Notify within 15-days after change –Reduced administrative burden No application No public notice No BACT analysis No notification prior to change

12. August 27, 2008 Reg. Section Office & Staff Office - Butte, Montana Staff –1 Supervisor Dave Aquirre –3 Full-Time Staff Mark Peterson Eileen Steilman Mark Ewanic –2 Student Interns Karen Gillespie Whitney Walsh

13. August 27, 2008 Registration & Deregistration Processes

14. August 27, 2008 Registration Submittal Process Facility Eligibility Registration Form –Inventory of emitters –Quantify emissions Registration & Operation Fees

15. August 27, 2008 Oil or Gas Well Facility Eligibility Meets definition of oil or gas well facility –75-2-103(13), MCA Subject to requirements of ARM 17.8.743 –PTE > 25-tpy any airborne pollutant –Modified after 11/23/68 and PTE increase >25-tpy NOT subject to ARM Title 17, Chapter 8, Subchapter 12 (Title V Source)

16. August 27, 2008 Registration Form Available online –(http://deq.mt.gov/AirQuality/airForms.asp) Owner & Facility Information –Contact –Location –Emitting Units –Emission Controls –Uncontrolled/Controlled Emissions Electronic or hard copies

17. August 27, 2008 Registration & Operation Fee Registration Fee –$500 per newly registered facility –Registration request is incomplete until fee is paid No fee when submitting facility update Annual Operation Fee –$600 per registered facility

18. August 27, 2008 Registration Acknowledgement Completeness Review Compliance Review Desk Audit Acknowledgment Letter

19. August 27, 2008 Completeness Review Facility is eligible for registration? Registration Process and Information is complete? Registration Fee has been received? Department requests additional information if necessary

20. August 27, 2008 Compliance Review Desk Audit Completed prior to registration acknowledgement Does not delay registration –Potential compliance issues identified –Provides compliance assistance

21. August 27, 2008 Acknowledgement Letter New facilities – Within 30-days of receiving completed Registration Form Backlog - 25% each calendar year beginning in 2008

22. August 27, 2008 Deregistration Request Letter to Department –Justification for deregistration Department may request additional information –Quantify all emissions (e.g., fugitives) –Emission calculations using more appropriate software –Source specific inputs Updated production Separator temperature and pressure Site specific oil and/or gas analytical data Plan Ahead –Submit in time to deregister by March 1 – Be aware of issues that my delay acknowledgement

23. August 27, 2008 Deregistration Acknowledgement Review similar to compliance review desk audit Respond to deregistration requests within 30-days of receiving completed request

24. August 27, 2008 Compliance Monitoring

25. August 27, 2008 Compliance Determination Initial compliance review desk audit –Completed when Registration is acknowledged Field inspection –Standardized field observations sheet –Compliance review desk audit upon return to office Documentation –Standardized inspection reports –Supplemental CD Digital photos Video from IR camera

26. August 27, 2008 Inspection Zones Divided counties with oil or gas well facilities Full-time staff members assigned zones –Complete field inspections – Registered –Complete field verifications – Unregistered

27. August 27, 2008 Inspection Zones - Inspectors

28. August 27, 2008 Inspection Zones - Facilities

29. August 27, 2008 Inspection Zones – Richland County

30. August 27, 2008 Current Field Approach Focusing on companies/facilities that did not comply with the ARM –Focus on unregistered facilities potentially needing to be registered –Conduct compliance field inspections on registered sources in same area

31. August 27, 2008 Providing Compliance Assistance

32. August 27, 2008 Registered Facilities Field Comp. Insp. Comp. Desk Audit Issue Insp. Rpt. 30-Days In Compliance No Further Action YES NO Phone Call Followed By Report Warning or Violation Letter Possible Enforcement Company Responds YES NO Resolution, More Time, etc. 60-Days

33. August 27, 2008 Unregistered Facilities Review DNRC Data ??? PTE >25-tpy ??? Phone Call Followed By Letter No Further Action Company Responds Site Verification NO YES 60-Days NO YES Possible Enforcement Request Add. Time Submit Registration Submit Info. For Not Registering Review Submittal

34. August 27, 2008 Common Compliance Issues Controlling emissions –Tank emissions not controlled Flare, VRU, etc. –Flare not working properly (i.e., combusting produced gas and/or tank gas) –Leaks detected H 2 S detected –Strong odor but no air quality analysis –Must comply with ARM 17.8.210 Notification of change(s) to registration information –Addition of emitter –Change to emission controls

35. August 27, 2008 ThermCAM TM GasFindIR Camera Detect hydrocarbon emissions –Cost savings to industry Leaks in produced gas line Leaks in vapor recovery unit –Assistance with site maintenance Leaking thief hatches (faulty seal) Flares not operating Repair leaking VOC equipment (ARM 17.8.1712)

36. August 27, 2008 Current Status and Path Forward

37. August 27, 2008 Registration Activity (8/26/08) Total Registrations Submitted:727 Total Registered Facilities:621 Reg. Facilities Acknowledged:135/67 (Backlog/New) Reg. Updates Acknowledged:145

38. August 27, 2008 Inspection/Verification Activity Facility Inspections:75 Facility Verifications:130

39. August 27, 2008 Emission Inventory –Send out in December –Report actual 2008 emissions –Return to Department by February Upcoming Activity Rule Changes – Subchapter 17 –Addition of BACT requirements for larger internal combustion engines –Emission control requirements of Subchapter 16 match Subchapter 17 –Notification requirements Registration Form Format –Working on Excel TM version –Link calculation sheets

40. August 27, 2008 Things To Remember Not required to register in lieu of MAQP No fee for submitting an update Registering by facility versus by well PTE should reflect maximum potential production March 1 deadline for deregistration And when in doubt...

41. August 27, 2008 Contact Information

42. August 27, 2008 DEQ ARMB Registration Section Butte, Montana Office 49 N Main, Suite B Butte MT 59701 Tel: (406) 782-2689 Fax: (406) 782-2701 Web: http://deq.mt.gov/http://deq.mt.gov/