DAQ-2025-002314

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DAQC-PBR101849001-25
Site ID 101849 (B1)
MEMORANDUM

TO: FILE – SM ENERGY COMPANY – Mike and Shelley 23-4C-21MWP

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

FROM: Chris Jensen, Environmental Scientist

DATE: April 28, 2025

SUBJECT: OIL AND GAS PERMIT-BY-RULE EVALUATION

INSPECTION DATE: April 16, 2025

SOURCE LOCATION: Lat: -109.962387, Long: 40.2905502
Uintah County

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

SOURCE TYPE: Tank Battery
API: 4304755849, 4304755850, 4304755851

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 using a pumping
unit. These products go through a separator where the oil and any
water products are sent to storage tanks and the 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. Gas products are brought to the
surface. These products are sent to an off lease compressor station
nearby by underground piping.

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, 40CFR 60 Subpart
OOOOb

# - $ . ) . )
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SOURCE EVALUATION: Site Type: PBR-Controlled
Controlled by flare, Site has Line Power.
DOGM current 12 month rolling production is: 495,312 BBLs.
Utah Statute R307-506 requires a source with throughput
greater than 8,000 BBLs to have controls.

REGISTERED EQUIPMENT: 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)] In Compliance. Associated gas is routed to a sales gathering line. Tanks all have thief hatches and PRV's that are closed and not leaking. The expected components were found installed. The DAQ observed the installation for a cycle and it seems to be operating as expected. Pneumatic Controllers 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 pneumatic controllers at this source are not continuous bleed but are low-bleed or snap acting. The few that have been installed use instrument air. 8 Associated Gas Flares 9 Any flare has an operational auto-igniter and a continuously burning pilot flame. [R307-503-4] In Compliance. The auto ignition function is performed by the BMS. The pilot flame is continuous. 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. A combustion device is installed and operating properly. The DAQ looked for design and installation parameters such as: The vessel vent line is sloped away from the inlet of the combustor, a two-phase scrubber is used to separate natural gas liquids or condensates, the combustor has a lit pilot with an auto-ignition device, and the inlet to the combustor is controlled by a pressure regulating device. 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. 13 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

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Storage Vessels 15 Thief hatches are kept closed and latched. [R307-506-4(1)] In Compliance. All hatches were found closed at the start of the evaluation. 16 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. No leaking components were found during the survey. The components were all operated and installed as expected. 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 air assisted flare. 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 tanks are uncontrolled or used as an emergency tank. 22 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)] In Compliance. This installation has been installed correctly as the DAQ understands. All of the expected components are present and not leaking. 24 Vessel vent lines are sloped away from the flare inlet or to a separation vessel (scrubber). [R307-501-4(2)] In Compliance. The vent lines are sloped properly. 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. This installation has a BMS, pressure gauge, fire suppressor, and inlet pressure regulating valve installed. 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. A design analysis was presented. 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. Steffes air assisted flare installed is EPA certified compliant. Natural Gas Engines 30 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. This engine compresses natural gas for artificial lift.
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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 routed to a sales gathering line. 41 Emission Inventory 42 An emissions inventory has been submitted within the past three years. [R307-150-9(1)] In Compliance. This source reported to the 2023 Emissions inventory. 52 Oil and Gas Industry Registration Requirement 53 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. 63 64 Storage Vessels Monthly inspections are conducted according to 40 CFR 60.5416a(c) on the closed vent system, openings, thief hatches and bypass devices if emissions control is required, and defects are repaired within 15 days. [R307-506-4(5)] In Compliance. The records supplied by the operator met the standards required here. 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. Copies kept at the local office. 65 Leak Detection and Repair The source has a source specific emissions monitoring plan. [R307-509-4(1)(a)] In Compliance. A field wide plan was produced to the DAQ for review during the records portion of the evaluation. The DAQ is not pursuing compliance action if this has not been prepared for each individual source. 45 The monitoring plan addresses difficult-to-monitor and unsafe-to-monitor components. [R307-509-4(1)(b)] In Compliance. Consistent with the Emissions Monitoring Plan requirement for compliance with NSPS (60) OOOOb.

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Monitoring surveys are conducted to observe each fugitive emissions component for fugitive emissions. [R307-509-4(1)(c)] In Compliance. These components are included in the plan. 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)] In Compliance. These surveys are being conducted quarterly as required by NSPS (60) OOOOb. 48 Monitoring surveys are done with OGI equipment or by Method 21. [R307-509-4(1)(e)] In Compliance. The operator uses a Flir GF 320 OGI camera. 49 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. The last two surveys both found several leaking components all of which were repaired and verified the same day. 50 Resurvey of the repaired components is completed within 30 days. [R307-509-4(1)(g)] In Compliance. Resurvey was completed at the completion of repair as the repair crew carries an OGI camera. 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] In Compliance. VOC Control Devices 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. 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. A signed and stamped engineering assessment (with required statement) certifying that the closed vent system is of sufficient design and capacity. [40 CFR 60 Subpart OOOOa] In Compliance. The DAQ saw an electronic copy of this document that SME keeps at the local office. The DAQ did not review the assessment, only that the document had the signature, stamp, and affirmative statement of an engineer.

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Natural Gas Engines Engines subject to R307-510 shall be certified or have an initial performance test per CFR 60.4244. [R307-510-4(2)] In Compliance. The DAQ was presented with a copy of the engine certification for the generator originally supplied to SME by the rental yard who owns and maintains the engine. 57 Engine certifications or initial performance tests required are kept for the life of the engine at the source. [R307-510-5] In Compliance. SME had a copy on file. 58 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. This is a certified engine in use here. 59 Certified and non-certified engines are regularly maintained according to the Engine manufacturer's Schedule or the Maintenance Plan. [40 CFR 60 Subpart IIII, JJJJ, 63 Subpart ZZZZ] In Compliance. The owner has prepared a plan and conducts the maintenance and recordkeeping requirements. Copies of the completed documents are kept at the local offices. Associated Gas Flaring 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 releases 66 Applicable Federal Regulations 68 NSPS (Part 60) JJJJ: Standards of Performance for Stationary Spark Ignition Internal Combustion Engines [40 CFR 60 Subpart JJJJ] In Compliance. The engine at this source is EPA certified that the emissions were within the limits allowed in this subpart. The recordkeeping and maintenance provisions are also met to maintain the certification. 71 NSPS (Part 60) OOOOb: Standards of Performance for Crude Oil and Natural Gas Facilities for which Construction, Modification or Reconstruction Commenced After December 6, 2022. In Compliance. This source has an Approval (PBR) from the State of Utah with legal and enforceable limits. A monitoring, repair, and record keeping program is in place that would satisfy the requirements of 40 CFR (60) OOOOb for the collection of fugitive emissions components, closed vent system, and storage vessel facilities. See above evaluations. These installations are installed as expected and operating properly. There are other affected facilities installed like intermittent bleed pneumatic controllers and diaphragm pumps, but they use instrument air for actuation. A reciprocating compressor (and cooling tower) is installed and operated for the purpose of cooling the gas. These have an exemption (in NSPS OOOOb) if installed on an oil well pad. No other affected facilities like gas well unloading, dehydrators, or sweetening units are installed. The planning documents like emissions monitoring, engine maintenance, and CVS design analysis are done.
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PREVIOUS ENFORCEMENT
ACTIONS: None. This is the first evaluation.

COMPLIANCE STATUS &
RECOMMENDATIONS: In regards to the site, the overall status is: In Compliance.
This source is a multi-well location of long horizontal wells. The
source was surveyed by AVO and with an OGI camera and was
found to be well-kept with no visible or fugitive emissions. The
DAQ toured the installation to look for compliance with NSPS
OOOOb regulations and it appears that it is in compliance. There
is instrument air for pneumatic controls. Tank bottom and scrubber
water transfer is done by centrifugal pumps driven by instrument
air. There is a rental gas compressor installed. Tank emissions are
routed to a Steffes air assisted flare with tank pressure monitoring
and electric BMS. Horizontal treaters have instrument air plumbed
for controls and a well shut in device installed in case of over
pressure conditions. A safety PRV is at every tank. Incidentally, a
LACT unit is installed for truck loading. Compressed natural gas
is used for artificial lift.

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