DAQ-2025-002593

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DAQC-PBR045260001-25
Site ID 4526 (B1)
MEMORANDUM

TO: FILE – SM ENERGY COMPANY – Young 2-2B1

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

FROM: Chris Jensen, Environmental Scientist

DATE: May 5, 2025

SUBJECT: OIL AND GAS PERMIT-BY-RULE EVALUATION

INSPECTION DATE: April 29, 2025

SOURCE LOCATION: Lat: -109.9577026, Long: 40.3432693
Uintah County

Business Office:
SM Energy Company
1700 Lincoln Street, Suite 3200 Suite 390
Denver, CO 80203

SOURCE TYPE: Tank Battery
API: 4304755666

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: 40 CFR 60 Subpart JJJJ and 40
CFR 60 Subpart OOOOa.

SOURCE EVALUATION: Site Type: PBR-Controlled
Controlled by flare, Site powered by Engine.
The source registered: 150,000 Estimated Oil BBL.
# - $ . ) . )
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DOGM current 12 month rolling production is:
14,129 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

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.
VOC emissions are, at all times, minimized as reasonably practicable by equipment design, maintenance
and operation practices. [R307-501-4(1)]
In Compliance. A combustion device to gather tank emissions 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. The tanks have working thief hatches and a pressure relief device installed.

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.

Any flare has an operational auto-igniter and a continuously burning pilot flame. [R307-503-4]
In Compliance. Auto-ignition is managed by the ECD control box. The pilot was found lit.
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 and operating as expected. Vessel vent lines are sloped
to a cow belly 2 phase separator. All of the usual spark arrestors, gauge, and burner management system is in place. The flare has a continuous pilot flame.

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. 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. No leaking components were found during the survey. The components were all operated and installed as expected. 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. 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 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. Operating correctly upon inspection. Green light on the BMS. 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. 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. 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 equipment is installed and operating as expected. Vessel vent lines are sloped to a cow belly 2 phase separator. All of the usual spark arrestors, gauge, and burner management system is in place. The flare has a continuous pilot flame. 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)] Out of Compliance. A design analysis was not presented. So, the DAQ is unable to know if the system design can handle peak fluctuations though it seems to be working fine at the current conditions. 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. Temporary Emergency Generators, in use for less than 100 days, have an operational hour meter and log book (onsite) recording hours used and maintenance performed. [40 CFR 60 Subpart IIII, JJJJ] In Compliance. Generator is not for emergency use, but continuous use.

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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 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. The source is registered with the DAQ. [R307-505-3(3)] In Compliance. 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. 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. 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] Out of Compliance. This document was not given to SM Energy at the time of purchase. In recognition of this deficiency, they have contracted with Valor to assess all assets and prepare this document or detail changes that need to be made. 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. The operator supplied inspection forms for review. These inspections were conducted monthly as required by 40 CFR (60) OOOOa. The operator indicated on the monthly inspection records that they use the EPA method 22 to detect visible emissions. 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. Records are being kept for up to 3 years as required by state rules. The DAQ did not ask to see the equipment operating instructions.

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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. The monitoring plan addresses difficult-to-monitor and unsafe-to-monitor components. [R307-509-4(1)(b)] In Compliance. The records supplied by the operator met the standards required here. Monitoring surveys are conducted to observe each fugitive emissions component for fugitive emissions. [R307-509-4(1)(c)] In Compliance. Consistent with the Emissions Monitoring Plan requirement for compliance with NSPS (60) OOOOa. 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. The operator supplied LDAR inspection forms for review. These inspections were conducted quarterly in excess of the frequency required by 40 CFR (60) OOOOa and this requirement. 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. 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 most recent LDAR found no leaking components. But, the 11/24 survey did find a thief hatch that had been left open by a truckdriver. it was closed and verified with an OGI camera that day during the survey. Resurvey of the repaired components is completed within 30 days. [R307-509-4(1)(g)] In Compliance. Verified that same day. 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. 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 rental generator engine is certified and SME presented a copy of the certification. The compressor engine is also certified and SME presented a copy of the certificate. Engine certifications or initial performance tests required are kept for the life of the engine at the source. [R307-510-5] In Compliance. This cert is kept digitally at the local offices.

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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. These are certified engines. No stack test required. 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 rental company, Sunbelt, has a maintenance plan stored digitally, with SME and they arrange and conduct the maintenance accordingly. SM Energy has the same arrangement with Archrock. 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. Federal Requirements NSPS (Part 60) JJJJ: Standards of Performance for Stationary Spark Ignition Internal Combustion Engines [40 CFR 60 Subpart JJJJ] In Compliance. The engines at this source have been certified that the emissions were within the limits allowed in this subpart. The recordkeeping and maintenance provisions are also met to maintain the certification. 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] Not In Compliance. This source is permitted (PBR) by 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 affected facilities. They are missing the design analysis. See above evaluations. There are no other affected facilities installed.
PREVIOUS ENFORCEMENT
ACTIONS: Compliance advisory in 2022 for inoperable ECD and leaking
components on the fuel supply line to the electric generator. See
DAQC-054-22

COMPLIANCE STATUS &
RECOMMENDATIONS: In regards to the site, the overall status is: Out of Compliance.
This source is a long horizontal well. 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 OOOOa
regulations and it appears that it is in compliance. There is a
rental electric generator installed as well as an Archrock
compressor set for artificial lift. Tank emissions are routed to a
Steffes air assisted flare with tank pressure monitoring and
electric BMS. Horizontal treaters have a well shut in device
installed in case of over pressure conditions. A safety PRV is
found at the tank battery.
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Recordkeeping was mostly complete and in order. There was
either not a design analysis completed by the previous owner or
supplied to SM Energy. SM Energy has contracted with Valor to
conduct these analyses on all controlled sources. This effort has
begun, but not completed in time for this evaluation. The DAQ
recommends no enforcement action be taken.

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.

UNDER EPA DECREE: No

ATTACHMENTS: None