DAQ-2024-004803

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-1359-23
Site ID: 15668 (B1)

Sent Via Certified Mail No. 70190700000208346535

Doug Betts
Water Disposal Inc.
2285 Lucky John Drive
P.O. Box 520
Roosevelt, UT 84066

Dear Mr. Betts:

Re: Early Settlement Agreement – Water Disposal Inc. – Produced Water Facility – Condition
I.3, Condition I.5, Condition II.B.2.b, Condition II.B.2.b.1, Condition II.B.2.f, and Condition
II.B.4.d.1 of Approval Order DAQE-AN156680001-17 – Duchesne County, Utah

On September 14, 2023, the Utah Division of Air Quality (DAQ) issued a Compliance Advisory
to Water Disposal Inc. as a result of an inspection performed on September 6, 2023. Water
Disposal Inc. responded to the Compliance Advisory on December 11, 2023. Based on the
findings of the inspection and response to the Compliance Advisory, the DAQ determined that
Water Disposal Inc. was in violation of:

1. Condition I.3 of Approval Order (AO) DAQE-AN156680001-17:

Modifications to the equipment or processes approved by this AO that could affect the
emissions covered by this AO have not been reviewed and approved – Equipment onsite
does not represent what is listed in the AO.

2. Condition I.5 of AO DAQE-AN156680001-17:

Associated air pollution control equipment is not used in a manner consistent with good air
pollution control practice for minimizing emissions - Two (2) open air mixing tanks and
sledge from tanks and centrifuge solids are not controlled by the combustor.

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DAQC-1359-23
Page 2

3. Condition II.B.2.a of AO DAQE-AN156680001-17:

The owner/operator shall not produce more than 14,400 barrels (1 barrel = 42 gallons) of
crude oil per rolling 12-month period.

4. Condition II.B.2.b of AO DAQE-AN156680001-17:

Centrifuge solids and tank sludge were not stored in an enclosed storage vessel prior to
being hauled off site.

5. Condition II.B.2.b.1: of AO DAQE-AN156680001-17:

All sludge and centrifuge waste were not contained in the enclosed storage vessel at the
end of each business day. Records of sludge and centrifuge waste deposits are not kept for
all periods when the plant is in operation. Deposits are not determined by supervisor
monitoring and maintaining an operations log.

6. Condition II.B.2.f of AO DAQE-AN156680001-17:

The owner/operator is not inspecting the thief hatches at least once monthly to ensure the
thief hatches are closed, latched, and the associated gaskets, if any, are in good working
condition.

7. Condition II.B.4.d.1 of AO DAQE-AN156680001-17:

Records of water treatment are not kept for all periods when the plant is in operation. The
following records have not been kept:
A. Date of treatment
B. Number of treatments made
C. Records of temperature if the temperature is below freezing

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 $18,965.

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 September 6, 2023, were
addressed by Water Disposal Inc. Water Disposal Inc. has created an operations and maintenance
plan (O & M plan) to inspect and keep records of thief hatches. The O & M plan will also include
DAQC-1359-23
Page 3

treating haul roads with water when needed and keeping records. Records of oil production will
also be kept. There are plans to install an enclosed tank for the two (2) open air mixing tanks that
will be controlled with the combustor by spring of 2024. Water Disposal Inc. is working with
Geostrata (consulting firm) to submit a NOI to raise the limit of crude oil produced per rolling
12-month period.

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

1. Water Disposal Inc. agrees to pay a reduced civil penalty in the sum of $15,172. Payment
of a civil penalty precludes further civil enforcement for the above described violation
against the named source. Water Disposal Inc. agrees to pay $15,172 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. If a violation is a failure to submit a Notice of
Intent to the Director and receive an Approval Order under Utah Administrative Code
R307-401-5, the DAQ retains its authority to take subsequent enforcement action if during
the next inspection the DAQ finds the source is still not in compliance with R307-401-5.

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
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 $15,172. 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.
DAQC-1359-23
Page 4

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.

If you need an Approval Order, this Early Settlement Agreement does not relieve you of that
responsibility and does not change that requirement in order to return to compliance with the
DAQ. You must submit a Notice of Intent for a required Approval Order as soon as possible.
Your source will be re-inspected in a reasonable time to confirm you have fully returned to
operating in compliance. Failure to obtain a required Approval Order will subject you to
additional penalties and a new compliance action by the DAQ.

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: TriCounty Health Department

DAQC-1359-23
Page 5

Acceptance of Early Settlement Agreement

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

Company Name: Water Disposal Inc. – Produced Water Facility

Name:

Title:

_____________________________ _________________ ___________________________
Signature Date Telephone Number

DAQC-1359-23
Page 6

Utah Division of Air Quality General Administrative Penalty Worksheet

Source:
Water Disposal Inc. –
Produced Water
Facility
Class:
Site ID #: 15668 Violation Date(s): 9/16/23
HPV: N/A Days to Resolution: TBD

Citation Description of the
Violation Events Category Range Daily
Penalty
Accumulated
Penalty
Condition I.3
of AO DAQE-
AN156680001-
17
Modifications to the
equipment or processes
approved by this AO
that could affect the
emissions covered by
this AO have not been
reviewed and
approved.
1 C
Up to
$2,000
per day
$729 $729
Condition I.5
of AO DAQE-
AN156680001-
17
Two (2) open air
mixing tanks and
sledge from tanks and
centrifuge solids are
not controlled by the
combustor
2 B $2,000-
$7,000 $5,100 $10,200
Condition
II.B.2.a of AO
DAQE-
AN156680001-
17
The owner/operator
shall not produce more
than 14,400 barrels (1
barrel = 42 gallons) of
crude oil per rolling
12-month period.
1 C
Up to
$2,000
per day
$1,009 $1,009
Condition
II.B.2.b of AO
DAQE-
AN156680001-
17
Centrifuge solids and
tank sludge were not
stored in an enclosed
storage vessel prior to
being hauled off site.
1 B $2,000-
$7,000 $4,700 $4,700
Condition
II.B.2.b.1 of
AO DAQE-
AN156680001-
17
All sludge and
centrifuge waste were
not contained in the
enclosed storage vessel
at the end of each
business day. Records
of sludge and
centrifuge waste
deposits are not kept
for all periods when the
plant is in operation.
Deposits are not
determined by
1 C
Up to
$2,000
per day
$869 $869
DAQC-1359-23
Page 7

supervisor monitoring
and maintaining an
operations log.
Condition
II.B.2.f of AO
DAQE-
AN156680001-
17
The owner/operator is
not inspecting the thief
hatches at least once
monthly to ensure the
thief hatches are closed,
latched, and the
associated gaskets, if
any, are in good
working condition
1 C
Up to
$2,000
per day
$729 $729
Condition
II.B.4.d.1 of
AO DAQE-
AN156680001-
17
Records of water
treatment are not kept
for all periods when the
plant is in operation.
The following records
have not been kept:
A. Date of treatment
B. Number of
treatments made
C. Records of
temperature if the
temperature is below
freezing
1 C
Up to
$2,000
per day
$729 $729
Total $18,965
20% Early
Settlement
Option
-$3,793
Total
Penalty $15,172

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.

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

Violations with high potential for impact on public health and the environment including:
DAQC-1359-23
Page 8

(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.

(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
DAQC-1359-23
Page 9

(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.

Kyle
Getting back to you after our inspection and the things we need to change. As
for record keeping we have made spread sheets for each of the following, Dust Control
or watering the roads, Tank Hatch inspection monthly, Oil Sales Monthly, and Solids
from centrifuge. I will have these sheets in my office where they will be kept and we will
record all of those items listed.
Regarding the solids from the centrifuge we found a tank that the top can slide
back and forth so we can close it at night and be able to haul it off as it gets full. Our
plan is to put the solids in it every night that we run the centrifuge and close the top so
hopefully it works like we want it to. The tank is here on site and we are using it now.
As far as replacing this last flat tank and getting our upright set we are thinking
this spring. As busy as the Oil field is right now its hard to get anyone to come and work
on this job for us, also as cold as it is getting right now it will be hard to keep things
running without everything being insulated to help keep it warm.
Finally the issue of the 14,400 bbl of oil that we are allowed to sell each month.
We had Geostrata submit a plan to have that amount raised to 30K each year. That will
roughly increase our emissions output from 24 ton a year to 24.3 ton on average each
year. However I do not see us selling 30K bbls a year my guess is that we will roughly
be between 20K-25K on a very good year.
I hope I have covered everything that we needed to talk about if you need
anything else please don’t hesitate to get a hold of me.
Thanks
Doug Betts
Water Disposal Inc.