Perspectives on Environmental Challenges Relating to Oil and Gas Development

William C. Allison VDirector, Air Pollution Control Division

Colorado Department of Public Health and Environment

October 24, 2011

Oil and Gas Regulation in Colorado

• Drilling activities governed by Colorado Oil and Gas Conservation Commission (COGCC).

• Air quality matters governed by Colorado APCD • 2008 legislation promotes agency collaboration on many

O&G matters, including odor, citizen complaints, environmental performance, etc.

• Strong O&G focal point north of Denver area (Denver-Julesburg Basin) and on Western Slope of Colorado (Piceance Basin)

45,956

22,500

24,500

26,500

28,500

30,500

32,500

34,500

36,500

38,500

40,500

42,500

44,500

46,500

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COLORADO MONTHLY ACTIVE WELL COUNT09-07-11

1529

22732007

2245

2917

4323

5904

6368

8027

5159

5996

3157

125 242 312560

890

1762

2773

3649

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1000

2000

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Num

ber

of A

pplic

atio

ns F

or

Per

mit

s T

o D

rill

Number of Oil and Gas Well Permits For Wells Drilled Directionally From Common Well Pads in Colorado

09-07-11

Total APDS

APDs For Directional Wells From Common Well Pads

Relative VOC Contribution from the Oil and Gas Sector(Anthropogenic sources)

Nine county upper front range ozone non-attainment area (2010)

Colorado Clean Air, Clean Jobs Act

• Legislation passed in 2010 • Designed to promote retirement of older coal-

fired EGUs• Promotes natural gas and other sources• 70,000 tons of NOx and SOx reductions

Concerns Relating to O&G Activity

• Permits • Enforcement• Health Effects• Air Quality • Water Quality• Fracking / Water Usage• Wildlife

• ~3,360 permit applications received in 2010– Represents ~ 70% increase since 2008

• APCD is implementing various mechanisms to

address permit volumes – Temporary engineers (brings engineers corps to 11+)– New permitting tools being developed (e.g., engine

general permit)– Expanded permit templates and standardized language to

speed permitting

APCD Oil and Gas Permitting

APCD Oil & Gas Inspections/Enforcement

• 336 inspections for 2010/2011 inspection period

• Ozone non-attainment area a priority

• Oil and Gas industry significant portion of non-compliance in Colorado

Recent Steps Taken To Address Oil and Gas Industry Impacts in Colorado

• 2008 - 2009 Overhaul of COGCC Rules

• 2007 - 2008 Revisions to AQCC oil and gas rules

• Condensate Tanks in NAASystem must be controlled by at least 90% during 2011 ozone season

• Reciprocating Internal Combustion Engines (RICE) Stringent statewide emission standards meant to mirror NSPS JJJJ requirements.

2011 Ozone Planning

Identified 26 separate strategies, including:• Condensate/crude/produced water tanks• Dehydrators• Drill rigs• Fugitive leaks• Green completions• Electronic surveillance programs for condensate tanks

Disclosure of fracking fluids

COGCC fracking rules currently undergoing STRONGER review

Recent Steps (cont.)

Division Innovations to Address Oil and Gas Workload Issues

• Self-Certification of Condensate Tanks- Three county pilot project

• Electronic Surveillance System (ESS) Pilot Project- Early notification of problems with auto-igniters at ESS-equipped tanks

• Development of various General Permits

Regulatory Activities: EPA

• EPA Oil and Gas Rules – Proposed rules published in Federal Register on 8/23/11– APCD presently reviewing extensive set of rules

• Package has revisions to NSPS KKK, NSPS LLL, MACT HH, and MACT HHH; and, has new NSPS OOOO

• NSPS OOOO:– Focus on wellhead emissions (fracking) – Requires green completions and/or flaring for most wells– Also requires controls on compressors, pneumatics, storage

tanks, sweetening units, and onshore natural gas processing plants

Regulatory Activities: Aggregation

• Colorado is front and center with aggregation due to Anadarko’s Frederick Compressor Station

• EPA ultimately concurred with Colorado’s determination

• Colorado successfully continues to build our permitting record on potential aggregated sources– Continue to use the “three-part” test to assess

aggregation, as appropriate

Closing Remarks for Oil and Gas

• O&G largest single sector for APCD- VOC Emissions- Air Permitting- Compliance/ Enforcement

• Oil and gas-related activities remain significant

• Colorado rising to challenge to address this important source category

For More Information

http://www.cdphe.state.co.us/ap/oilgas.html

http://cogcc.state.co.us/

http://fracfocus.org/