DAQ-2024-004830

195 North 1950 West • Salt Lake City, UT
Mailing Address: P.O. Box 144820 • Salt Lake City, UT 84114-4820
Telephone [phone] • Fax [phone] • T.D.D. [phone]
www.deq.utah.gov
Printed on 100% recycled paper
State of Utah

Department of
Environmental Quality

Kimberly D. Shelley
Executive Director

DIVISION OF AIR QUALITY
Bryce C. Bird
Director

SPENCER J. COX
Governor

DEIDRE HENDERSON
Lieutenant Governor
DAQC-1360-23
Site ID: 12656 (B1)

Sent Via Certified Mail No. 70190700000208346542

Thomas Muchard
Price River Energy, LLC
950 Echo Lane, Suite 200
Houston, TX 77024

Dear Mr. Muchard:

Re: Early Settlement Agreement – Price River Energy, LLC – Gordon Creek Compressor
Facility – Condition II.B.2.c.2, Condition II.B.5.b, and Condition II.B.5.b-1 of Approval
Order DAQE-AN126560008-22; 40 CFR Part 60 Subpart JJJJ – Carbon County

On August 1 ,2023, the Utah Division of Air Quality (DAQ) issued a Compliance Advisory to
Price River Energy, LLC as a result of an inspection performed on June 24, 2023. Price River
Energy, LLC responded to the Compliance Advisory on December 7, 2023. Based on the findings
of the inspection and response to the Compliance Advisory, the DAQ determined that Price River
Energy, LLC was in violation of:

1. Condition II.B.2.c.2 of Approval Order (AO) DAQE-AN126560008-22:

The owner/operator has not conducted an initial stack test on the emission unit (637 hp
compressor engine) within 180 days after startup of the emission unit.

2. Conditions II.B.5.b and II.B.5.b.1 of AO DAQE-AN126560008-22:

During the time of the inspection the owner/operator did not keep the storage tank thief
hatches closed and latched except during tank unloading or other maintenance activities.
The owner/operator has not inspected the thief hatches at least once every six (6) months
to ensure the thief hatches are closed, latched, and the associated gaskets, if any, are in
good working condition. Records have not been kept of thief hatch inspections.

" " * " / Û Û Û Ù Û Ü
DAQC-1360-23
Page 2

3. 40 CFR Part 60 Subpart JJJJ § 60.4243(b)(2)(i):

The owner or operator of a stationary SI internal combustion engine (Waukesha H24GL
generator engine SN:5283700164) greater than or equal to 100 HP and less than or equal
to 500 HP, did not keep a maintenance plan and records of conducted maintenance and
must, to the extent practicable, maintain and operate the engine in a manner consistent
with good air pollution control practice for minimizing emissions. In addition, owner or
operator did not conduct an initial performance test within 1 year of engine startup to
demonstrate compliance.

Section 19-2-115 of the Utah Code provides that violations of the Utah Air Conservation Act (the
Act) and/or any order issued thereunder may be subject to a civil penalty of up to $10,000 per day
for each violation. Based upon our civil penalty policy, we calculated a preliminary civil penalty
for the above listed violation(s) of $5,156.

The monetary amount of the DAQ settlement offer specified below is derived from a
pre-established schedule of penalties, which takes into account, among other factors, the
magnitude and severity of the violation, economic benefit, cooperation of the source as well as the
prior history of violations. See the attached penalty worksheet for details.

All parties we deal with, whether private, commercial, or governmental are treated similarly in the
settlement process. Early Settlement Agreements are based on the evaluation of the same factors
and criteria in all cases. The DAQ acknowledges that the violations on June 24, 2023, was
addressed by Price River Energy, LLC and records showing initial and subsequent stack test were
not able to be provided to the DAQ and records showing thief hatch inspections were also not able
to be provided.

If you are interested in settling this violation, we are authorized to offer settlement in accordance
with the DAQ Penalty Policy as follows:

1. Price River Energy, LLC agrees to pay a reduced civil penalty in the sum of $4,125.
Payment of a civil penalty precludes further civil enforcement for the above described
violation against the named source. Price River Energy, LLC agrees to pay $4,125 of the
stipulated penalty within twenty (20) business days from the date you receive this Early
Settlement Agreement.

2. The DAQ retains its authority to take any enforcement actions based on any and all
violations not specifically described above.

3. In the event any further violations of the Act, the Utah Air Quality Rules, the source’s AO,
or the Director’s Orders occur, the DAQ may consider the violation described above in
assessing a penalty for the subsequent violations, in accordance with the provisions of
Utah Administrative Code R307-130.

4. Entering into this Early Settlement Agreement shall not constitute an admission of
violation of the Act, the Utah Air Quality Rules, or the source’s AO nor shall it be inferred
DAQC-1360-23
Page 3

to be such an admission in any administrative or judicial proceeding. The described
violation will constitute part of the company compliance history for any purpose for which
such history is relevant to the DAQ.

At the DAQ’s option, you may request a portion of the calculated civil penalty gravity component
to be used to complete a Supplemental Environmental Project (SEP) or credited toward the Utah
Environmental Mitigation Fund to benefit present and future air quality within Utah. For more
information, please contact the DAQ representative listed below.

This Early Settlement Agreement constitutes an offer of settlement and is not a demand for
payment. The Early Settlement Agreement reflects a reduced penalty for early settlement of this
matter.

If the above terms are acceptable to you, please sign and return this Early Settlement Agreement
and a check in the sum of $4,125. Submit the signed Early Settlement Agreement and check made
payable to the DAQ at the letterhead address within twenty (20) business days of receipt of this
Early Settlement Agreement. Electronic payments are also available on our website at:
https://deq.utah.gov/general/payment-portal.

You may write or call to request a settlement conference with the DAQ representative listed
below. A conference must be scheduled within twenty (20) business days of your receipt of this
Early Settlement Agreement. If we do not receive a signed copy of this Early Settlement
Agreement and payment or other correspondence from you within twenty (20) business days of
your receipt, we will assume that you are not interested in resolving this matter as outlined above.

This Early Settlement Agreement is intended to quickly resolve the non-compliance issues listed
above and requires the immediate attention of your company. Failure to resolve this matter as
outlined above may result in this offer being revoked and/or having this matter referred to a
formal enforcement process, including filing a judicial case to collect penalties (up to $10,000 per
day for each violation) and compel compliance in the state district court.

If you have any additional questions regarding this matter, please contact Rik Ombach at
801-499-6095 or by email at [e-mail].

Sincerely,

Bryce C. Bird
Director

BCB:RO:rh

cc: Southeast Utah Health Department

DAQC-1360-23
Page 4

Acceptance of Early Settlement Agreement

I have read the above Early Settlement Agreement and I agree to the terms and conditions thereof.

Company Name: Price River Energy, LLC – Gordon Creek Compressor Facility

Name:

Title:

_____________________________ _________________ ___________________________
Signature Date Telephone Number

DAQC-1360-23
Page 5

Utah Division of Air Quality General Administrative Penalty Worksheet

Source:
Price River Energy,
LLC – Gordon
Creek Compressor
Facility
Class:
Site ID #: 12656 Violation Date(s): 6/24/23
HPV: N/A Days to Resolution: TBD

Citation Description of the
Violation Events Category Range Daily
Penalty
Accumulated
Penalty
Condition
II.B.2.c.2 of
AO DAQE-
AN126560008-
22
The owner/operator
has not conducted
an initial stack test
on the emission unit
(637 hp compressor
engine) within 180
days after startup
of the emission unit.
1 c
Up to
$2,000
per
day
$1,289 $1,289
Conditions
II.B.5.b &
II.B.5.b.1 of
AO DAQE-
AN126560008-
2
During the time of
the inspection the
owner/operator did
not keep the storage
tank thief hatches
closed and latched
except during tank
unloading or other
maintenance
activities. The
owner/operator has
not inspected the
thief hatches at
least once every six
(6) months to
ensure the thief
hatches are closed,
latched, and the
associated gaskets,
if any, are in good
working condition.
Records have not
been kept of thief
hatch inspections
2 C
Up to
$2,000
per
day
$1,289 $2,578
40 CFR Part
60 Subpart
JJJJ §
60.4243(b)(2)(i)
The owner or
operator of a
stationary SI
internal combustion
engine (Waukesha
H24GL generator
1 c
Up to
$2,000
per
day
$1,289 $1,289
DAQC-1360-23
Page 6

engine
SN:5283700164)
greater than or
equal to 100 HP
and less than or
equal to 500 HP,
did not keep a
maintenance plan
and records of
conducted
maintenance and
must, to the extent
practicable,
maintain and
operate the engine
in a manner
consistent with
good air pollution
control practice for
minimizing
emissions. In
addition, owner or
operator did not
conduct an initial
performance test
within 1 year of
engine startup to
demonstrate
compliance
Total $5,156
20% Early
Settlement
Option
-$1,031
Total
Penalty $4,125

R307-130-1.
Scope.

This policy provides guidance to the director in negotiating with air pollution sources penalties for
consent agreements to resolve non-compliance situations. It is designed to be used to determine a
reasonable and appropriate penalty for the violations based on the nature and extent of the violations,
consideration of the economic benefit to the sources of non-compliance, and adjustments for specific
circumstances.

R307-130-2.
Categories.

Violations are grouped in four general categories based on the potential for harm and the nature and
extent of the violations. Penalty ranges for each category are listed.
DAQC-1360-23
Page 7

(1) Category A. $7,000-10,000 per day.

Violations with high potential for impact on public health and the environment including:

(a) Violation of emission standards and
limitations of NESHAP.

(b) Emissions contributing to
nonattainment area or PSD increment
exceedances.

(c) Emissions resulting in documented public health effects
and/or environmental damage.

(2) Category B. $2,000-7,000 per day.

Violations of the Utah Air Conservation Act, applicable State and Federal
regulations, and orders to include:

(a) Significant levels of emissions resulting from violations of emission limitations or
other regulations which are not within Category A.

(b) Substantial non-compliance with
monitoring requirements.

(c) Significant violations of approval orders, compliance orders, and
consent agreements not within Category A.

(d) Significant and/or knowing violations of "notice of intent" and other notification
requirements, including those of NESHAP.

(e) Violations of reporting requirements
of NESHAP.

(3) Category C. Up to $2,000 per day.

Minor violations of the Utah Air Conservation Act, applicable State and Federal Regulations and orders
having no significant public health or environmental impact to include:

(a) Reporting
violations

(b) Minor violations of monitoring
requirements, orders and agreements

(c) Minor violations of emission
limitations or other regulatory
requirements.

DAQC-1360-23
Page 8

(4) Category D. Up to $299.00.

Violations of specific provisions of
R307 which are considered minor to
include:

(a) Violation of automobile emission
standards and requirements

(b) Violation of wood-burning
regulations by private individuals

(c) Open burning violations by private
individuals.

R307-130-3.
Adjustments.

The amount of the penalty within each category may be adjusted and/or suspended in
part based upon the following factors:

(1) Good faith efforts to comply or lack of good faith. Good faith takes into account the openness in
dealing with the violations, promptness in correction of problems, and the degree of cooperation with the
State to include accessibility to information and the amount of State effort necessary to bring the source
into compliance.

(2) Degree of willfulness and/or negligence. In assessing willfulness and/or negligence, factors to be
considered include how much control the violator had over and the foreseeability of the events
constituting the violation, whether the violator made or could have made reasonable efforts to prevent
the violation, and whether the violator knew of the legal requirements which were violated.

(3) History of compliance or non-compliance. History of non-compliance includes consideration of
previous violations and the resource costs to the State of past and current enforcement actions.

(4) Economic benefit of non-compliance. The amount of economic benefit to the source of non-
compliance would be added to any penalty amount determined under this policy.

(5) Inability to pay. An adjustment downward may be made or a delayed payment schedule may be used
based on a documented inability of the source to pay.

R307-130-4.
Options.

Consideration may be given to suspension of monetary penalties in trade-off for expenditures resulting
in additional controls and/or emissions reductions beyond those required to meet existing requirements.
Consideration may be given to an increased amount of suspended penalty as a deterrent to future
violations where appropriate.