DAQ-2024-011440

1
DAQC-PBR101704001-24
Site ID 101704 (B1)
MEMORANDUM

TO: FILE – XCL ASSETCO, LLC – Brotherson 23-3A-23

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

FROM: Stephen Foulger, Environmental Scientist

DATE: October 28, 2024

SUBJECT: OIL AND GAS PERMIT-BY-RULE EVALUATION

INSPECTION DATE: June 6, 2024

SOURCE LOCATION: Lat: 40.29228 Long: -110.19775

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

SOURCE TYPE: Tank Battery
Duchesne
API: 4301354235, 4301354236, 4301354237, 4301354238,
4301354239, 4301354240, 4301354241, 4301354242,
4301354243, 4301354468, 4301354469, 4301354472,
4301354474, 4301354475, 4301354476, 4301354477,
4301354478

SOURCE CONTACTS: Lauren Brown, Corporate Environmental Contact
Phone: (713) 808 - 9406, 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.

2
SOURCE EVALUATION: Site Type: PBR-Controlled
Controlled by flare, site has line power. The source registered:
513,882 Estimated Oil BBL.
DOGM current 12 month rolling production is: 1,732,774.
Utah Statute R307-506 requires a source with throughput
greater than 8,000 BBLs to have controls.

REGISTERED EQUIPMENT: Tanks, Pneumatics.
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. Emissions produced from cracked radiator on the VRU, a produced water tank thief hatch, and two burners. Flares Any flare has an operational auto-igniter and a continuously burning pilot flame. [R307-503-4] In Compliance. Flare found with operational auto-ignitor installed at the time of inspection. 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)]] In Compliance. Flare inlet found properly engineered at the time of inspection. 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.
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)]
In Compliance. VOCs found properly routed at the time of inspection.
3
Combustors and VOC Control Devices:
Air pollution control equipment is installed appropriately, maintained and operated, pursuant to the
manufacturer’s specifications, to control emissions. [R307-501-4(2)]
Out of Compliance. Emissions produced from cracked radiator on the VRU, a produced water
tank thief hatch, and two burners.
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.

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.
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 source has not been subjected to an emissions inventory yet.

Leak Detection and Repair:

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

In Compliance. Emissions monitoring plan found 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. Emissions monitoring plan properly addresses difficult-to-monitor and unsafe-to
monitor components.

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

In Compliance. Monitoring surveys were reviewed and found properly performed at the time of inspection.

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.

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. Fugitive leak repair records were reviewed and found to be compliant at the time
of inspection.

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

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

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.

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.

5
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) OOOOa: Standards of Performance for Crude Oil and Natural Gas Facilities for which
Construction, Modification or Reconstruction Commenced After September 18, 2015 [40 CFR 60
Subpart OOOOa]

In Compliance.

PREVIOUS ENFORCEMENT
ACTIONS: No enforcement actions within the past five years.

COMPLIANCE STATUS &
RECOMMENDATIONS: In regards to the site, the overall status is: Out of Compliance.
Several major leaks were found during the inspection.
Compliance Advisory and ESA issued.

ATTACHMENTS: Compliance Advisory, CA Response, ESA.
qffi
State of Utah
SPENCER J. COX
Goventor
DEIDRE HENDERSON
Lieutenant Governor
Department of
Environmental Quality
Kimberly D. Shelley
Executive Director
DTVISION OF AIR QUALITY
Bryce C. Bird
Direclor
July 78,2024 DAQC-CA101704001-24
Site to 101704 (Bl)
Sent Via Certified Mail No. 70190700000208347068
Lauren Brown
XCL AssetCo, LLC
600 North Shepherd Drive Suite 390
Houston, TX77007
Dear Ms. Brown,
Re: Compliance Advisory - XCL AssetCo, LLC - Brotherson 23-3A-23, Duchesne County
On June 6,2024, a representative of the Utah Division of Air Quality (DAQ) conducted an inspection
of XCL AssetCo, LLC Brotherson 23-34-23 remotely located with the latitude and longitude of
40.29228, -l 10.197 7 5, Duchesne county.
The DAQ observed the following regulations of concern:
R307-501-4 - General Requirements
These findings may be a violation of Utah Air Conservation Rules. XCL AssetCo, LLC Brotherson
23-3A-23 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 at80l-662-8650 or [e-mail] if you have any additional questions.
Sincerely,
,/i' ,- la. t '--
Rik Ombach
Minor Source Oil and Gas Compliance Section Manager
cc: Alan Humpherys, Manager, Minor Source NSR Section
TriCounty Health Department
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]
w.deq.utah.gov
Printcd on 100% recycled paper
DAQC-CA101704001-24
Page2
Potential Violation(s)
On June 6,2024, Stephen Foulger, an inspector from the DAQ conducted an inspection at XCL
AssetCo, LLC Brotherson 23-34-23 located remotely with the latitude and longitude:40.29228,
- I 10.197 7 5, 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 l9-2-l l5 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, Waming 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.
Reouirement & Rule Comments & Observations
VOC emissions are minimized as reasonably practicable by
equipment design, maintenance and operation practices.
[R307-s0l-4(1)]
Out of Compliance: Emissions coming
from a cracked radiator on VRU, a
produced water tank thief hatch, and two
burners.
Air pollution control equipment is designed and installed
appropriately, maintained and operated to control emissions.
1R307-s01-4(2)l
Out of Compliance: Emissions coming
from a cracked radiator on VRU, a
produced water tank thief hatch, and two
burners.
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T,AUREN BROWN
xcl. AssiTco, LLc
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LAUREN BROWN
XCL ASSETCO, LLC
600 N SHEPTilERD DR STE 390 _-
XCL Resources is committed to being a good neighbor by maintaining and operatfng our facilitfes in good
workmanlike manner, taking additfonal measures to locate and fix fugitfve emissions sooner, and
investfng in newer technology to enhance our leak detectfon and repair program.
Please see our response below for DAQC-CA-158300001-24, DAQC-CA101073001-24, DAQC-
CA15697001-24, AND DAQC-CA101704001-24, as it speaks to general items cited for each listed facility
as well as the individual pieces that are unique to each facility.
The Crozier 2-1A-32 pad was submitted with our 2020 emissions inventory. Attached are the provided
documents confirming submittal. Please note that due to historical naming conventfons when XCL
acquired the Butcher Butter 34-144H-22, Butcher Butte 35-44H-22, and Butcher Butter 35-54H-22,
(which were the only wells in productfon at the tfme of reportfng the 2020 Emissions inventory), the
cited Crozier 2-1A-32 facility was submitted under the name Butcher Butter 2-1A-32 (Source ID# 793).
XCL has updated the registratfon (Source ID# 15830) to reflect the current nomenclature and producing
wells on locatfon.
Regarding the fugitfve emissions cited under rules R307-501-4(1) and R307-501-4(2), at the Crozier 2-1A-
32, Shiner 30-3A-22, Butcher Butte 32-4D-22, and Brotherson 23-3A-23, XCL has provided vent header
assessments for each of these locatfons. The vent header assessments showcases that the facilitfes are
adequately designed and sized to achieve the established control efficiency rates and capable of
handling reasonably foreseeable fluctuatfons.
Taking the approved vent header assessments into account, the found fugitfve emissions for controlling
equipment on locatfon during the inspectfon can and should be attributed to normal wear and tear
under normal operatfng conditfons. Other than leaks on delay of repair associated with receiving
replacement parts, any of the identffied fugitfve emissions were fixed on locatfon at the tfme of
inspectfon.
XCL has increased staffing throughout our operatfons. XCL conducts monthly AVO’s and Quarterly OGI
inspectfons at all facilitfes, thus reducing our overall potentfal fugitfve emissions impact by more quickly
identffying fugitfve emissions from normal wear and tear, and then fixing the problem. Additfonally, XCL
has recently made significant investments in newer technologies in acquiring Enardo 665 High Flow thief
hatches, which will help alleviate additfonal future fugitfve emissions.
In response to the cited R307-506-4(2)(a) rule for the Shiner 30-3A-22, that locatfon is equipped with a
Steffes HP SAA-8, a Steffes LP SAA-4 flare, and a Platfnum VRU, that is controlling emissions associated
with the storage vessels on locatfon.
In response to the citatfons for the VRU located at the Butcher Butter 32-4D-22 locatfon, the VRU was
unintentfonally and incorrectly left in an inoperable state. The VRU was started up on locatfon during
the initfal inspectfon on June 6th, 2024.nvb
In response to the identffied VRU at the Brotherson 23-3A-23, the VRU unit was taken out of service and
the cooler replaced on June 25th, 2024.
Given the nature of the findings, vent header assessments, quick actfon to immediately make repairs on
fugitfve components, and investment already underway, XCL respectiully requests that the UDAQ
resolves these compliance advisories as “No Further Actfon”.
State of Utah
SPENCER J. COX
Governor
DEIDRE HENDERSON
Lieuleilanl Governor
Department of
Environmental Quality
Kimberly D. Shellcy
Executive Direclor
DIVISION OF AIR QUALITY
Bryce C. Bird
Dit'ector
August 22,2024 DAQC-8so-24
Site ID: 101704 (B1)
Sent Via Certified Mail No. 70190700000208347235
Lauren Brown
XCL AssetCo, LLC
600 North Shepherd Drive, Suite 390
Houston, Texas 77007 4580
Dear Ms. Brown:
Re: Early Settlement Agreement - XCL AssetCo, LLC - Brotherson 23-3A-23, Duchesne County
On Jtrly'79,2024,the Utah Division of Air Quality (DAQ) issued a Compliance Advisory to XCL
AssetCo, LLC as a result of an inspection performed on June 6,2024. XCL AssetCo, LLC
responded to the Compliance Advisory on August 8,2024. Based on the findings of the inspection
and response to the Compliance Advisory, the DAQ determined that XCL AssetCo, LLC was in
violation of:
l. R307-501-4 - General Requirements:
Emissions coming from a cracked radiator on VRU, a produced water tank thief hatch, and
two bumers.
Section l9-2-ll5 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 of $3,500.
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.
195 North 1950 Wesr. Salt Lake Ciry, UT
Mailing Address: P.O. Box 144820. Salt Lake City, UT 841144820
Telephone (80 I ) 5364000 . Fax (80 I ) 5364099 . T.D.D. (80 I ) 903-3978
wov.deq.ilah.gov
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NIVISION OF AIR OL'AI-ITY
DAQC-8so-24
Page2
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 found on June 6,2024,were
addressed by XCL AssetCo, LLC on the same day as the inspection.
If you are interested in settling this violation, we are authorized to offer settlement in accordance
with the DAQ Penalty Policy as follows:
l. XCL AssetCo, LLC agrees to pay a reduced civil penalty in the sum of $2,800. Payment of
a civil penalty precludes ftirther civil enforcement for the above described violation against
the named source. XCL AssetCo, LLC agrees to pay $2,800 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 ftlrther 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 (UAC) 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 infened
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 constihrtes 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 $2,800. 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-850-24
Page 3
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
801-536-4164 or by email at [e-mail].
Sincerely,
1,r*
Bryce C. Bird
Director
BCB:RO:SF:rh
cc: TriCounty Health Department
DAQC-8s0-24
Page 4
Acceptance of Early Settlement Agreement
I have read the above Early Settlement Agreement and I agree to the terms and conditions thereof.
CompanyName: XCL AssetCo, LLC
Name: Ryan Sokolowski
1ft1s. AIR QUALITY SPECIALIST
574-360-7168,€r//* Srrinbaro/) 9t1ol2o24 v' -
Si(nature Date Telephone Number
Division of Air Quality Marketplace
911012024 2:39:21 PM
Page 1
Ord er N u m ber: d1 7 4c7 83-7 85f -4d66-938d -a3cbd 5a 8700a
Select ltem(s) to Purchase
Item: Penalty Payment for Compliance
Descrlptlon: Please enter DAQC or DAQA number to identiff the penalty payment.
Prlce: $2800
Quantlty:4
Item Total: 11200.00
Add itlona I I nformatlon: DAQ C-850-24 DAQC -849-24 DAQC-85 1 -24 DAQC -845-24
Total of all ltems: 1 1200.00
Contact Information
Name/Buslness: XCL Resou rces
Phone: [phone]
Emall: rya n.sokolowski@xcl resources.com
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