DAQ-2025-002306

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DAQC-PBR045230001-25
Site ID 4523 (B1)
MEMORANDUM

TO: FILE – SM ENERGY COMPANY – Max’s Place 2-24B1

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

FROM: Chris Jensen, Environmental Scientist

DATE: April 21, 2025

SUBJECT: OIL AND GAS PERMIT-BY-RULE EVALUATION

INSPECTION DATE: April 16, 2025

SOURCE LOCATION: Lat: -109.9477996, Long: 40.298168
Uintah County

Business Office:
SM Energy Company
1700 Lincoln Street, Suite 3200
Denver, CO 80203

SOURCE TYPE: Tank Battery
API: 4304755640

SOURCE CONTACTS: James Lebeck, Corporate Environmental Contact
Phone: [phone], Email: [e-mail]
Ryan Sokolowski, Field 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: NSPS (60) OOOOa

SOURCE EVALUATION: Site Type: PBR-Controlled
Voluntarily Controlled by Flare, Site has Line Power. The source
registered: 150,000 Estimated Oil BBL.

# - $ . ) . )
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DOGM current 12 month rolling production is: 3,765 BBLs.
Utah Statute R307-506 requires a source with throughput
greater than 8,000 BBLs to have controls.

REGISTERED EQUIPMENT: Engine - Natural Gas 4-Stroke Lean Burn Make - PSI Model -
D111T1C Mfg Year - 2011 Horse Power - 300 Combustion - Field
Gas, Pneumatic, Tank
3 General Provisions
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 detected by use of the USEPA Method 9.
6 VOC emissions are, at all times, minimized as reasonably practicable by equipment design, maintenance and operation practices. [R307-501-4(1)] Out of Compliance. Operation or maintenance was poor, evidenced by a pot scrubber so full that it balled out, causing all tank emissions to escape past the thief hatch gaskets. 7 All natural gas-driven pneumatic controllers are in compliance with 40CFR 60.5390 or 60.5390a as applicable. Tagging and record keeping requirements are not required. [R307-502-4] In Compliance. The natural gas-driven pneumatic controllers at this source are not continuous bleed but are low-bleed or snap acting. 8 Associated Gas Flares 9 Any flare has an operational auto-igniter and a continuously burning pilot flame. [R307-503-4] In Compliance. This combustor has a BMS. 10 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. This equipment is installed as expected. Vessel vent lines are sloped to a pot scrubber 2 phase separator. All of the usual spark arrestors, gauge, and burner management system is in place. The flare has a continuous pilot flame. 11 Tank Truck Loading 12 Truck loading is done by bottom filling or submerged fill pipe. [R307-504(1)] In Compliance. The truck loading area is suitable for submerged loading and it is routine for truck drivers to load this way. 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. This source has the required vapor capture line installed. 14 Storage Vessels Thief hatches are kept closed and latched. [R307-506-4(1)] In Compliance. All hatches were found closed at the start of the evaluation.
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Vessel Vent Components: (valves, unions, pressure relief devices, etc.) are leak-free, in good repair, and working as intended. (Tank covers are leak free and form a continuous seal.). [R307-501-4] In Compliance. All thief hatches are found leaking but, this condition is due to a balled out pot scrubber on the ECD inlet. Once the scrubber was drained the hatches stopped leaking. 17 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. Tank emissions are routed to an enclosed combustor. The production here is below the 8,000 BBL threshold and is eligible for the exemption and removal of controls. 18 Emissions from emergency storage vessels (NOT used as a storage tank) are controlled according to R307-506-4(2), - or - are only used in emergencies, are emptied within 15 days of receiving fluids and are equipped with a liquid level gauge. [R307-506-4(4)] In Compliance. No vessels are used as an emergency tank. 22 Combustors and VOC Control Devices 23 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. Operation is less than adequate, as evidenced by a balled out scrubber, resulting in an increase of fugitive emissions. 24 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 are sloped to a 2 phase separator. 25 Combustor inlet lines are equipped with a fire arrestor, pressure gauge, inlet pressure regulating valve and other components according to the engineering design, the manufacturer's specifications or good practices for safety and emissions control. [R307-501-4(2)] In Compliance. All of the usual spark arrestors, gauge, and burner management system is in place. 26 Air pollution control equipment is designed and sized to achieve the destructive efficiencies in rules and to handle fluctuations in emissions. [R307-501-4(2)] In Compliance. 28 The VOC control device(s) required by R307-506 or R307-507 has a control efficiency of 95% or greater, operates with no visible emissions and has a continuously burning pilot flame and an operational auto-igniter according to R307-503. [R307-508-3(1)] In Compliance. The ECD is a brand of combustor that has been certified by the US EPA. VOC control devices required by R307-507-4(1) have only been removed after a minimum of one year, and only if the rolling 12-month actual uncontrolled emissions are <4 tons VOC per year, individually or combined with emissions from storage vessels. [R307-507-4(4)] In Compliance. 32

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Associated Gas Flaring 33 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 is gathered to a sales line. Recordkeeping Requirements 35 41 Oil and Gas Industry Registration Requirement The source is registered with the DAQ. [R307-505-3(3)] In Compliance. 54 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. Emission Inventory 42 An emissions inventory has been submitted within the past three years. [R307-150-9(1)] In Compliance. The operator submitted for the 2023 emissions inventory. Leak Detection and Repair 44 The source has a source specific emissions monitoring plan. [R307-509-4(1)(a)] Not Observed. As this no longer qualifies as a controlled source, the recordkeeping portions of the UAC R 307-509 rules were presented to the DAQ but the DAQ declined to review and record relevant facts as they no longer apply. 45 The monitoring plan addresses difficult-to-monitor and unsafe-to-monitor components. [R307-509-4(1)(b)] Not Observed. Monitoring surveys are conducted to observe each fugitive emissions component for fugitive emissions. [R307-509-4(1)(c)] Not Observed. 47 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)] Not Observed. 48 Monitoring surveys are done with OGI equipment or by Method 21. [R307-509-4(1)(e)] Not Observed. 49

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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)] Not Observed. 50 Resurvey of the repaired components is completed within 30 days. [R307-509-4(1)(g)] Not Observed. 51 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] Not Observed. Associated Gas 66 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 reported venting or breakdowns Applicable Federal Regulations 70 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. This source has an Approval Order from the State of Utah with legal and enforceable limits. This source is then exempt from OOOOa for the collection of fugitive emissions components. A monitoring, repair, and record keeping program is in place that would satisfy the requirements of 40 CFR (60) OOOOa for the collection of fugitive emissions components, closed vent system, and storage vessel facilities except that it is unlikely that the low volume of production will meet the standard of 4 TPY of potential emissions. The tank battery is no longer an affected facility under this subpart. No pneumatic controllers are constant bleed and all found are plumbed as snap acting. There are no other affected facilities installed that the DAQ noticed.

PREVIOUS ENFORCEMENT
ACTIONS: This source was found to not be in compliance on December 21,
2021. A subsequent return visit was made December 29 and did
not find any issues.

COMPLIANCE STATUS &
RECOMMENDATIONS: In regards to the site, the overall status is: Not In Compliance.
A survey with an OGI camera revealed leaking thief hatches on all
tanks, releasing fugitive emissions. The ECD was not lit. Further
investigation by SM Energy personnel found the pot scrubber for
the ECD inlet line was "balled out" and full of condensates due to
improper or no recent maintenance. This condition will cut off
flow to the ECD. It is noted that the low production levels at this
source qualifies this source to take the exemption from controls
(and likely places them below the 4 tons PTE to be subject to
NSPS (60) OOOO regulations and controls). SM Energy has not
yet exercised that option as of yet.

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Lack of proper maintenance shows a likely lack of thorough/
complete daily and monthly checks. The DAQ recommends that a
Warning Letter (DAQC-383-25) be issued to reinforce the training
or supervision of employees responsible for these checks. The
DAQ reminded SM Energy personnel that the status or other
changes to the source could be made from their own log-in to
TEMPO. This source has a generator engine listed. This has been
removed and line power has been installed.

RECOMMENDATION FOR
NEXT INSPECTION: The DAQ has no recommendations for the next inspector other
than what are customary. The DAQ was joined by SME personnel
during the site inspection.

RECOMMENDATIONS FOR NSR: None

ATTACHMENTS: None