DAQ-2024-011414

1
DAQC-PBR069480001-24
Site ID 6948 (B1)

MEMORANDUM

TO: FILE – XCL ASSETCO, LLC – Butcher Butte Pad 19-4C-22

THROUGH: Rik Ombach, Minor Source Oil and Gas Compliance Section Manager

FROM: Stephen Foulger, Environmental Scientist

DATE: October 28, 2024

SUBJECT: OIL AND GAS PERMIT-BY-RULE EVALUATION

INSPECTION DATE: August 27, 2024

SOURCE LOCATION: Lat:40.287724, Long: -110.151495

Business Office:
XCL AssetCo, LLC
600 North Shepherd Drive, Suite 390
Houston, TX 77007

SOURCE TYPE: Tank Battery
Duchesne County
API: 4301353742, 4301353748, 4301353899, 4301354426,
4301354427, 4301354428, 4301354430, 4301354431,
4301354432, 4301354433, 4301354434, 4301354435

SOURCE CONTACTS: Lauren Brown, Corporate Environmental Contact
Phone: [phone], Email: [e-mail]

OPERATING STATUS: Operating

PROCESS DESCRIPTION: Oil and gas products are brought to the surface. These products
go through a separator where the oil and any water products are
sent to storage tanks and the gas is used to power equipment on
site (pump jack engine, tank heater, separator, flare, combustor,
etc.) Any remaining gas is sent to a pipeline that feeds a local
gas plant. The oil and process water in the storage tanks is
loaded into tanker trucks and hauled off-site for processing and
disposal.

APPLICABLE REGULATIONS: Utah Administrative Code (UAC) R307-500 Series for the Oil
and Gas Industry, and UAC R307-201: Emission Standards:
General Emission Standards; and UAC R307-150: Emission
Inventories. Federal Subpart: 40 CFR 60 Subpart JJJJ, 40 CFR
60 Subpart OOOO.

2
SOURCE EVALUATION: Site Type: PBR – Controlled
Controlled by flare, Site powered by Engine.
DOGM current 12 month rolling production is: 363,781.
Utah Statute R307-506 requires a source with throughput
greater than 8,000 BBLs to have controls.

REGISTERED EQUIPMENT: Engine - Engine - Natural Gas 4-Stroke Rich Burn Make -
Cummins Model - KTA19 Mfg Year - 2014 Horse Power - 308
Combustion - Natural Gas, Pneumatic, Tank.

Visible Emissions

Visible emissions are within the following opacity limits: VOC Control Devices and Gasoline engines
0%, Diesel engines 20%, Natural Gas Engines and Boilers, Treater burners & Tank burners 10%, Mobile
source dust 10%. [R307-201-3]

In Compliance. No visible emissions were observed at the time of inspection.

VOC emissions are, at all times, minimized as reasonably practicable by equipment design, maintenance
and operation practices. [R307-501-4(1)]

Out of Compliance. One produced water tank thief and seven oil tank thief hatches were leaking,
one separator burner was out, and one combustor was out.

Flares

Any flare has an operational auto-igniter and a continuously burning pilot flame. [R307-503-4]

Out of Compliance. One combustor was found in non-working order.

Flare inlet lines are equipped with a fire arrestor, pressure gauge, inlet pressure regulating valve and
other components according to the engineering design, the manufacturers specifications or good
practices for safety and emissions control. [R307-501-4(1)]]

Out of Compliance. No pressure regulator found on flare inlet.

Tank Truck Loading

Truck loading is done by bottom filling or submerged fill pipe [R307-504(1)]

In Compliance. Truck loading done by bottom or submerged filling at the time of inspection.

A vapor capture line is used during truck loading if subject to storage vessel emissions controls of
R307-506-4(2). [R307-504-4(2)]

In Compliance. Vapor capture lines found available for use at the time of inspection.

3
Storage Vessels

Thief hatches are kept closed and latched. [R307-506-4(1)]

In Compliance. Thief hatches found closed and latched at the time of inspection.

VOCs from storage vessels are recycled, recovered or controlled by a device that is compliant with
R307-508. Exempt if <8000 bbls crude oil per year, <2000 bbls condensate, or if uncontrolled emissions
are <4 tons VOC per year. [R307-506-4(2)(a)]

Out of Compliance. Thief hatches found leaking at the time of inspection.

Upon modification, the well site was re-evaluated against the thresholds of R307-506-4(2).
[R307-506-4(6)]

In Compliance. Source found unmodified at the time of inspection.

Combustors and VOC Control Devices:

Air pollution control equipment is installed appropriately, maintained and operated, pursuant to the
manufacturers specifications, to control emissions. [R307-501-4(2)]

Out of Compliance. Emissions were found at one produced water tank thief, seven oil tank thief
hatches, one separator burner was out, and one combustor was out. No back pressure on
combustor.

Vessel vent lines are sloped away from the flare inlet or to a separation vessel (scrubber).
[R307-501-4(2)]

In Compliance. Vessel vent lines found properly sloped at the time of inspection.

The VOC control device(s) required by R307-506 has a control efficiency of 95% or greater, and
operates with no visible emissions. [R307-508-3(1)]

In Compliance. Control device found operating at proper destruction level with no visible
emissions.

Natural Gas Engines

Affected engine exhaust vents are vertical and unrestricted.
Stacks are 8' or greater if the site horsepower rating is 151 to 305
Stacks are 10' or greater if the site horse power rating is 306 or greater. [R307-510-4(3)]

In Compliance. Proper stack height observed at the time of inspection.

Associated Gas Flaring

Associated gas is routed to a process unit for combustion, a sales pipeline or an operating VOC control
device, except in an emergency.
4
An emergency release is unanticipated, temporary, infrequent, unavoidable, =24 hrs. and is not
due to operator negligence.
Low pressure gas from working loss, breathing loss and oil flashing is not
"associated gas." [R307-511-4(1)]

In Compliance. Associated gas found properly routed at the time of inspection.

The following records are kept:
The time and date of event
Volume of emissions
Any corrective action taken for 3 years.[R307-511-5(1)(a)(b)]

In Compliance. No events were reported at the time of inspection.

Emission Inventory:

An emissions inventory has been submitted within the past three years. [R307-150-9(1)]

In Compliance. This is a new source and has not been subject to an emissions inventory.

Leak Detection and Repair:

The source has a source specific emissions monitoring plan. [R307-509-4(1)(a)]

In Compliance. These records were reviewed and found to be compliant at the time of inspection.

The monitoring plan addresses difficult-to-monitor and unsafe-to-monitor components.
[R307-509-4(1)(b)]

In Compliance. Review of monitoring plan shows these areas of concern properly addressed.

Monitoring surveys are conducted to observe each fugitive emissions component for fugitive emissions.
[R307-509-4(1)(c)]

In Compliance. Monitoring surveys properly observe potential emission points.

Initial monitoring surveys were within 60 days after startup for new sources. Subsequent surveys are
semi-annual (no further than 7 months nor nearer than 4 months apart) for regular components, annual
for difficult-to-monitor components, and as required by the monitoring plan for unsafe-to-monitor
components. [R307-509-4(1)(d)]

In Compliance. These records were reviewed and found to be compliant at the time of inspection.

Monitoring surveys are done with OGI equipment or by Method 21. [R307-509-4(1)(e)]

In Compliance. Monitoring is conducted using OGI equipment.

5
Fugitive leaks are attempted within 5 days and repaired within 15 days unless infeasible, unsafe, etc., as
stated in the rule, which require repair within 24 months per the rule. [R307-509-4(1)(f)]

In Compliance. Records show fugitive leaks addressed in proper time frame.

Resurvey of the repaired components is completed within 30 days. [R307-509-4(1)(g)]

In Compliance. Repaired components found properly resurveyed.

The following records are kept:
The emissions monitoring plan, for life of the site
LDAR inspections, repairs and resurveys, for 3 years [R307-509-5]

In Compliance. These records were reviewed and found to be compliant at the time of inspection.

Oil and Gas Industry Registration Requirement

The source is registered with the DAQ. [R307-505-3(3)]

In Compliance. Source found properly registered at the time of inspection.

Registration has been updated within 30 days of a company name change, removal or addition of control
devices, or termination of operations. [R307-505-3(3)]

In Compliance. Source found properly registered at the time of inspection.

Engines subject to R307-510 shall be certified or have an initial performance test per CFR 60.4244.
[R307-510-4(2)]

In Compliance. Engine records were reviewed and found to be compliant.

Engine certifications or initial performance tests required are kept for the life of the engine at the source.
[R307-510-5]

In Compliance. Engine records were reviewed and found to be compliant.

Engines that were installed, relocated or modified after January 1, 2016 are required to show compliance
with Table 1 of R307-510-4 through a performance test evaluation that is reviewed by the DAQ and
found to be in compliance. [R307-510-4(1)]

In Compliance. Engine records were reviewed and found to be compliant.
Records for each of the following are kept for three years:
Monthly storage vessel vent system inspections (openings, thief hatches, pressure relief devices,
bypasses, etc.), if controlled. Monthly crude oil throughput
Emission calculations, actuals and sampling data when used to justify an exemption to storage
vessel rules Emergency storage vessel usage (dates used, emptied, and volumes), if not controlled. [R307-506-5]

In Compliance. These records were reviewed and found to be compliant at the time of inspection.
6
Monthly AVO and USEPA method 22 inspections are conducted on VOC control devices and associated
equipment, and corrective actions are taken within 5 days and completed within 15 days.
[R307-508-3(3)]

In Compliance. These records were reviewed and found to be compliant at the time of inspection.

The following records are kept:
VOC control device efficiency, for life of the equipment
Manufacturer operating and maintenance instructions for VOC control devices, for life
of the equipment
AVO and USEPA method 22 inspections of the VOC control device(s), associated equipment and any
repairs, for 3 years
[R307-508-4]

In Compliance. These records were reviewed and found to be compliant at the time of inspection.

NSPS (Part 60) JJJJ: Standards of Performance for Stationary Spark Ignition Internal Combustion
Engines [40 CFR 60 Subpart JJJJ]

In Compliance.

NSPS (Part 60) OOOO: Standards of Performance for Crude Oil and Natural Gas Production,
Transmission and Distribution [40 CFR 60 Subpart OOOO]

In Compliance.

PREVIOUS ENFORCEMENT
ACTIONS: Compliance advisory issued in 2023.

COMPLIANCE STATUS &
RECOMMENDATIONS: In regards to the site, the overall status is: Out of Compliance.
Thief hatch leaks were covered by a delay of repair order. The
flare inlet improperly designed, unlit combustor, and unlit burner
were addressed in the Compliance Advisory.

ATTACHMENTS: Compliance Advisory, CA response, NFA.
State of Utah
SPENCER J. COX
Goventor
DEIDRE HENDERSON
Lieutenant Govennr
Department of
Environmental Quality
Kimberly D. Shelley
Executive Director
DTVISION OF AIR QUALITY
Bryce C. Bird
Director
August 30,2024 DAQC-CAO69480001-24
Site ID 6948 (B1)
Sent Via Certified Mail No. 70I90700000208347297
Lauren Brown
XCL AssetCo, LLC
600 North Shepherd Drive, Suite 390
Houston, TX77007-4580
Dear Ms. Brown,
Re: Compliance Advisory - XCL AssetCo, LLC - Butcher Butte Pad l9-4C-22, Duchesne County
On July 17,2024, a representative of the Utah Division of Air Quality (DAQ) conducted an inspection of
XCL AssetCo, LLC Butcher Butte Pad l9-4C-22 remotely located with the latitude and longitude of
40.287724, -1 I 0. I 5 1495, Duchesne County.
The DAQ observed the following regulations of concern:
R307-501-4 - General Requirements
R307-503-4 - Auto-Igniters
These findings may be a violation of Utah Air Conservation Rules. XCL AssetCo, LLC Butcher Butte Pad
l9-4C-22 is required to comply with the above regulations. A written response to this letter is required
within ten (10) business days of receipt of this letter.
Additional details about the above observations and regulations are included with this letter. Please contact
Stephen Foulger at 801-662-8650 or [e-mail] if you have any additional questions.
Sincerely,
,/',' --lsuh-'
Rik Ombach
Minor Source Oil and Gas Compliance Section Manager
cc: TriCounty Health Department
Alan Humpherys, Manager, Minor Source NSR Section
195 North 1950 West. Salt Lake City, UT
Mailing Address: P.O. Box 144820. Salt Lake City, UT 841144820
Telephone [phone] . Fax [phone] . T.D.D. [phone]
ww.deq.utah.gov
Printed on 100% recycled paper
DAQC-CAo6948000r-24
Page2
Potential Violation(s)
On July 17,2024,Stephen Foulger, an inspector from the DAQ conducted an inspection at XCL AssetCo,
LLC Butcher Butte Pad l94C-22 located remotely with the latitude and longitude of 40.287724,
-l 1 0. 1 5 1495, Duchesne County.
At the time of the inspection, the DAQ documented the following potential violation:
The purpose of a Compliance Advisory (CA) is to document observations made by the DAQ. You are
responsible for complying with the Utah Air Conservation Rules. There are possible administrative and
civil penalties for failing to do so. Section 19-2-115 of the Utah Code Annotated provides that violators of
the Utah Air Conservation Act and/or any order issued there under may be subject to a civil penalty of up
to $10,000 per day for each violation.
When considering if the deficiencies are resolved, the DAQ will consider the written response to this CA.
Responses may include information demonstrating compliance with the regulations or an anticipated
schedule from your company to be in compliance with the applicable regulations. Once received, the DAQ
will review your response and the CA may be revised as a result of that review.
Failure to respond in writing within ten (10) business days of receipt of this CA shall be considered in the
escalation of subsequent enforcement action and assessment of penalties.
Possible DAQ actions to resolve a CA include: No Further Action Letter, Warning Letter, Early
Administrative Settlement with reduced civil penalty, Settlement Agreement with civil penalty, or Notice
of Violation and Order to Comply.
This CA does not limit or preclude the DAQ from pursuing additional enforcement options. Additionally,
this CA does not constitute a bar to enforcement action for conditions that the DAQ did not observe or
evaluate, or any other conditions found during future inspections.
A meeting may be requested to discuss this CA. Please contact Stephen Foulger at 801-662-8650 or
[e-mail] if you would like to request a meeting or if you have any questions.
Requirement & Rule Comments & Observations
Flare inlet lines are equipped with a fire arrestor, pressure gauge,
inlet pressure regulating valve and other components according
to the engineering design, the manufacturers specifications or
good practices for safety and emissions control. [R307-501-2]
uut oI uompllance: No pressure regulator
found on flare inlet.
Any flare has an operational auto-igniter. [R307-503-4]Out of Compliance: One combustor was
found in non-working order.
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XCL ASSETCO, LLC
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XCL Resources | 600 N Shepherd Drive, Suite 390| Houston, TX 77007

Compliance Advisory Response DAQC-CA069500001 & 69480001 Butcher Butte Pad 22-4D2-23 & Butcher Butte Pad 19-4C-22 Site ID: 6950 & 6948 Mr. Ombach, Please see the below response from XCL Resources for the subject title Compliance Advisory for
location Butcher Butte Pad 11-3A-23 (A.K.A Faucett 11-3A-23) stemming from a July 17th, 2024,
on-site inspection and received on October 10th, 2024.

The inspection on July 17th, 2024, noted two findings at the Butcher Butte Pad 19-4C-22, no
pressure regulator on flare inlet and a combustor in non-working order, and a leaking T12 at
the Butcher Butte Pad 22-4D2-23. The fugitive emissions stemming from the T12 at the
Butcher Butte Pad 22-4D2-23 and the unlit combustor at the Butcher Butte 19-4C-22 was
immediately fixed during the noted inspection date on July 17th, 2024.

An internal work order was created for the pressure regulator equipment and crew to install
the regulator on the flare inlet. This work was completed on August 20th, 2024.

Due to the quick response, XCL respectfully requests that the subject Compliance
Advisories to be classified as “No Further Action”.

Thank you,

Ryan Sokolowski

XCL Resources | 600 N Shepherd Drive, Suite 390| Houston, TX 77007

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
October 21, 2024 DAQC-
Site ID 6948 (B1)
Lauren Brown
XCL AssetCo, LLC
Address: 600 North Shepard Drive, Suite 390
Houston, TX 77007

Dear Lauren Brown,

Re: Compliance Advisory, No Further Action – XCL AssetCo, LLC. Butcher Butte Pad #19-4C-
22, Duchesne County.

On August 28, 2024, the Utah Division of Air Quality (DAQ) sent XCL AssetCo, LLC a
Compliance Advisory (DAQC-CA069480001-24) for potential violations of the Utah Air Quality
Rules. A written response to this compliance advisory was received on October 15, 2024. UDAQ
recommends that no further action is required at this time. Please be aware that closure of this
Compliance Advisory does not constitute a bar to enforcement action for conditions found during
other inspections.

Thank you for your cooperation in resolving this matter. If you have any questions regarding this
letter, please contact me at [phone] or at [e-mail].

Sincerely,

Rik Ombach, Manager
Minor Source Compliance Section

RO:SRF:xx

cc: Tri-County Health Department