1. (Thanks to Amnon Bar-Ilan for the origin of most of the Slides)

2. Oil and Gas Production in the Rocky Mountains Boom in oil and gas production in this region over the last ten years driven by record prices for crude oil and natural gas − Western states gas production in 1996: 3.9 trillion cubic feet − Western states gas production in 2006: 5.9 trillion cubic feet Activity supported by large fleet of specialized equipment at thousands of individual well sites Historically only a partial inventory of this equipment was available through state permitting databases One Reason: Wide state-to-state variation in permitting thresholds and source categories permitted

3. History of Oil and Gas EI’s – WRAP Phase I & II Summary of state point source inventory thresholds (PTE = Potential to Emit) StatePoint Source Inventory Threshold AlaskaPTE 100 TPY ArizonaPTE 40 TPY Colorado2 TPY actual emissions MontanaPTE 25 TPY New MexicoPTE 25 TPY North DakotaPTE 100 TPY NevadaPTE 5 TPY OregonPTE 100 TPY South DakotaPTE 100 TPY UtahPTE 100 TPY WyomingPTE 25 TPY

4. Originally formed from SSJF to look at these O&G issues in the WRAP region - Guided the development of the 1 st Regional O&G Emission Inventory in 2005 (“Phase I”) Phase I Inventory found 116K Tons of NOx from O&G Area Sources not previously counted (900% increase from previous 2002 baseline) In 2007 the WG completed Phase II O&G Inventory Update improved accuracy, updated to 2005 baseline for a revised 2018 projection methodology, improved Point Source SO2 projections, evaluated potential control strategies Currently overseeing the IPAMS Phase III O&G Emission Inventory development project Website: http://www.wrapair.org/forums/ogwg/index.html

5. Represented the first regional inventory for the western U.S. to address oil and gas area sources not previously inventoried Intent was to create a regionally consistent inventory methodology for oil and gas area source emissions estimates for all of the western states Output data were model-ready emissions of all criteria pollutants for use in WRAP regional haze modeling for the western U.S. History of Oil and Gas EI’s – WRAP Phase I

6. Considered a baseline year of 2002, future year projections to 2018 All 2002 O&G production statistics derived from each states’ OGCC database Most major source categories considered in WRAP Phase I: compressors, drill rigs, heaters, completion venting, condensate /oil tanks, truck loading Emissions factor and activity information derived from a limited number of regionally-specific sources available at the time (ie/ Wyoming state-wide inventory, EPA’s NONROAD model, NMOGA inventory for NW New Mexico) Activity/emissions data from these regionally-specific studies was broadly applied to entire WRAP domain Limited industry participation in Phase I effort Future year projections created using EIA Annual Energy Outlook growth factors for western U.S. and some Resource Management Plans / Environmental Impact Statements History of Oil and Gas EI’s – WRAP Phase I

7. History of Oil and Gas EI’s – WRAP Phase II Focused on improving the methodology from the Phase I work for two specific major NOx source categories: compressors and drill rigs Utilized direct industry survey to obtain detailed information from the oil and gas companies on this equipment by basin Updated baseline year from 2002 to 2005. Reviewed and updated SO 2 emissions from large gas plants

8. History of Oil and Gas EI’s – WRAP Phase II New methodology estimated 2002 emissions on a basin-wide average basis for all basins in the WRAP region, focusing on those basins where major O&G activities are occurring and producer information was available In basins where significant activity was not occurring, or producer information was unavailable, used Phase I estimates Data were collected from all major and some medium-sized and independent oil and gas companies operating in the WRAP region in the form of a questionnaire sent to each producer Oil and gas production statistics were derived from each state’s OGCC database and updated from 2002 to 2005 to reflect growth in activity and better availability of data The revised 2005 base statistics were used in making 2018 projections using most recent planning information available and producer data where available

9. History of Oil and Gas EI’s – WRAP Phase I & II WRAP Phase I completed in December 2005 WRAP Phase II completed in September 2007 Documentation available at: (http://www.wrapair.org/forums/ogwg/Phases_I_and_II_Inventories.html) Documentation for both projects consists of technical reports detailing the workplan and methodologies used, with appendices showing quantitative results

10. History of Oil and Gas EI’s – WRAP Phase I & II Phase I & II Results – NOx “Area Source” Emissions (Phase II Total: 118,887 T.)

11. History of Oil and Gas EI’s – WRAP Phase I & II Phase I & II Results – SOx “Area Source” Emissions (Phase II Total: 1,248 T.)

12. Phase II – 2002 NOx Inventory Summary of All WRAP States O&G Point & Area Source Inventory States All Area Sources All Point SourcesTOTAL Percent of WRAP Alaska (#3)886 45,43146,31716.1 Arizona17 642659 0.2 California8,07010,80918,8796.6 Colorado (#2)23,51825,21948,73716.9 Idaho 2,590 0.9 Montana7,557 3,99611,553 4.0 Nevada62 83145 0.1 New Mexico (#1)55,640 56,900112,540 39.1 North Dakota4,631 4,6389,269 3.3 Oregon85 1,1821,267 0.4 South Dakota361 323684 0.2 Utah3,335 3,0496,384 2.2 Washington 480 0.2 Wyoming (#4)14,725 13,42328,148 9.8 WRAP Total118,887 168,765287,652 100.0

13. Phase II – 2002 SO2 Inventory Summary of All WRAP States O&G Point & Area Source Inventory States All Area Sources All Point SourcesTOTAL Percent of WRAP Alaska66 773 8392.6 Arizona0 00 0.0 California578879443.0 Colorado118 91209 0.7 Idaho770.0 Montana225 11236 0.7 Nevada1 01 0.0 New Mexico (#1)250 13,67513,925 43.7 North Dakota358 2,9443,302 10.4 Oregon0 88 0.0 South Dakota6 1016 0.1 Utah17 0 0.1 Washington880.0 Wyoming (#2)150 12,18812,338 38.7 WRAP Total1,248 30,602 31,850100.0

14. Earlier inventories focused primarily on NOx and SOx – Phase III includes all criteria pollutants including VOC’s (critical for RH & other regional issues) Phase III provides opportunity for greater industry participation to provide most detailed, local equipment and activity data to improve baseline emissions inventories for all basins for all source categories Phase III updates baseline year to 2006 to reflect continued increase in O&G production, and makes use of best available O&G production statistics (IHS database) Phase III provides opportunity to improve on estimates/assumptions from Phase I & II based on comments received on those inventories – can account for well declines, technology advances, new regulations Phase III analyzes both unpermitted oil and gas sources and state permit data to generate complete oil and gas inventory for all major source categories Why a Phase III?

15. Project initiated (& funded) by the Independent Petroleum Association of the Mountain States IPAMS solicited WRAP Stakeholder participation: foster a sense of reviewer confidence in the integrity and acceptability of results Additional O&G Workgroup participation was recruited from interested WRAP stakeholder groups (State & Tribal Agencies, EPA, FLM’s, O&G Industry & Environmental Groups) to assure broad representation O&G WG provides feedback on the Scope and Methodology O&G Workgroup identified limitations of Phase III does not identify emissions from on and non-road mobile sources associated with O&G field operations does not quantify HAP or Greenhouse Gas emissions associated with O&G field operations

16. Basins in Phase III Study Denver-Julesburg Uinta Piceance San Juan (North & South) Green River Powder River Wind River Big Horn Paradox Williston-Great Plains N O R T H D A K O T A C O L O R A D O N E W M E X I C O M O N T A N A W Y O M I N G U T A H Williston Basin Wind River Basin Powder River Basin Big Horn Basin Green River Basin Uinta Basin Paradox Basin San Juan Basin Piceance Basin Denver- Julesburg Basin Great Plains Basin

17. Phase III Emissions Inventory Temporal (inventories produced for 3 time frames) All basins will have complete source inventories for a base year (2006), a mid-term projection (2010 or 2012) and far future year projection (2018) – for all exploration and production activities. Pollutants NOx, SOx, PM, VOC, CO

18. Emissions Inventory Sources Natural Gas Processing Plants Compressor Stations Wellhead Compressor Engines CBM Pump Engines Miscellaneous or Exempt Engines Drilling/Workover Rigs Salt-water Disposal Engines Artificial Lift Engines (Pumpjacks) Vapor Recovery Units (VRU’s) Oil/Gas Well Heaters Hydrocarbon Liquid Storage Tanks  Well Completions  Fugitive Emissions  Completion Venting  Well Blowdowns  Dehydration Units  Amine Units  Hydrocarbon Liquid Loading  Landfarms  Water Treatment/Injection  Flaring  Pneumatic Devices  Produced Water Tanks

19. Unpermitted sources surveys to O&G producers Combined survey responses for all participating companies Permitted sources data from state and/or federal standard permits Any additional state reporting data Complete oil and gas emissions inventory for entire basin Phase III Methodology Diagram for Inventory Development IHS database (oil and gas production and well and spud counts) Scaled-up unpermitted sources emissions for entire basin

20. Phase III Study Schedule November 2007 – June 2008  Completed D-J Basin baseline 2006 emissions and mid-term 2012 projections in April ‘08  Begin Uinta Basin baseline 2006 and mid-term 2012 projections  Begin Piceance Basin baseline 2006 emissions July 2008  Complete draft Uinta Basin baseline 2006 projections  Complete draft Piceance Basin baseline 2006 emissions  Begin Piceance Basin mid-term 2012 projections  Begin North San Juan baseline 2006 emissions and mid-term 2012 projections  Begin South San Juan Basin baseline 2006 and mid-term emissions August – September 2008  Complete draft Uinta Basin mid-term 2012 projections  Complete draft Piceance Basin mid-term 2012 projections  South San Juan Basin Surveys to Producers October 2008  Complete North San Juan Basin baseline 2006 emissions  Wyoming Surveys to Producers

21. Phase III Study Schedule (cont.) November 2008  Complete North San Juan Basin mid-term 2012 projections  Complete South San Juan Basin baseline 2006 & mid-term 2012 emissions December 2008  Complete all Wyoming basins baseline 2006 emissions  Begin Wyoming basins mid-term 2012 projections January 2009  Anticipated Release Uinta & Piceance Basin Emissions  Complete Wyoming basins mid-term 2012 projections  Williston, Great Plains & Paradox Basins Surveys to Producers March 2009  Complete Williston, Great Plains & Paradox Basins 2006 Baseline April 2009  Complete Williston, Great Plains & Paradox Basins mid-term 2012 projections May 2009  Begin Far Future Year 2018 Projections for all Basins June 2009  Final Project Report

22. Phase III Study Review Process WRAP O&G Workgroup will study base and future years’ emission inventory results for each basin and review final technical memo Workgroup participants represent: States & Tribal Agencies, EPA, Federal Land Managers, Industry, Environmental Interest Groups WRAP staff will summarize comments from each basin workgroup session Phase III work products at: http:// www.wrapair.org/forums/ogwg/PhaseIII_Inventory.html

23. IPAMS/WRAP Phase III Oil & Gas Emission Inventory Project & WRAP O&G Workgroup QUESTIONS ?