Westar Energy ConferenceDenver, ColoradoOctober 22, 2008

Topics

Oil and Gas Development and NEPAAddressing air analysis in NEPAStatus of Field Office air analyses for RMPsAir pollutant emission controlsRegional assessments

Land Use Planning and NEPABLM plans for, and analyzes oil and gas decisions

at two distinct levels:RMPsMaster Development Plans

RMP – leasing decisionsAnalyze reasonably foreseeable development

scenarios related to the leasing decisionsConduct determination of NEPA adequacy before

each leaseMaster Development Plans – development decisions

BLM promotes MDPs over individual APDsAnalysis and decision should be consistent with RMP

Master Development PlansOperator may submit master development plan

(MDP) for 2 or more APDs that share a common drilling plan, a common surface use plan and future plans for development

More like geographic area plans and plans of development

May or may not include field (regional) development by other operators

Application for Permit to DrillEarly Notification – voluntary initial conference

with BLM Notice of Staking – casual use, staking only

followed by BLM onsite inspection Good Faith Efforts – to notify and include

private surface ownersDrilling Plan – engineering specificationsSurface Use Plan – an outcome of the onsite

visit including design criteriaAPD Processing – BLM has 30 days to Deny,

Defer, ApproveBegin NEPA analysis

Purpose of a NEPA DocumentSupport decisions through an understanding of

environmental consequences and alternative actions

Promote public involvement in decision making (including other governmental agencies)

Disclose and analyze the potential environmental consequences

Take action to protect, restore, and enhance the environment

Encourage productive and enjoyable harmony between people and the environment

NEPA Screening ProcessDoes proposal conform to the Land Use Plan?Is proposal an exception from NEPA

requirements?Is proposal listed as Categorically Excluded?Is existing analysis and documentation

sufficient?Is proposal listed as normally requiring an EIS?Are environmental impacts expected to be

significant?

Determining SignificanceContext – the potential significance of an impact

will vary based on the setting of the proposed actionLocal vs regionalShort-term vs long-term

Intensity – refers to the severity of impactMust assess direct, indirect and cumulative effectsAlso beneficial effects, controversy, public health,

uncertainty, precedent, sensitive resources, etc.

Mitigation MeasuresActions that can reduce, avoid, minimize,

rectify, or compensate adverse impactsRequired mitigation measures must be

described in the decision documentMonitoring is required to ensure the

implementation of mitigation measuresFor an EIS – all relevant and reasonable

measures are to be identified (even if outside the agency’s jurisdiction)

For an EA – mitigation should be used and required to reduce the impacts below significance

Recent NEPA ChangesBLM NEPA Handbook

Detailed procedural guide for BLM specialists and the public

DOI NEPA Regulations (Departmental Manual)Clarifying CEQ regulations, Departmental guidance, and

evolving case law

ChangesConsensus management approachAdaptive management Purpose and needImpact analysis Connected actionsCumulative effects

Status of Air Quality for RMPsBLM began using air quality models to disclose

impacts from RMPs a few years agoMethods and models used for air quality models

have evolved due to:A need to better quantify cumulative impactsA need to include ozone impactsGreater scrutiny of analysis techniques

Unlike air quality modeling conducted for large stationary point source permitting, methods for spatially distributed small sources within NEPA are not well established

New direction is to use models capable of large-scale regional assessments in areas with dense oil and gas development

Status of AQ for RMPsDifferent AQ models used to support RMPs in

Colorado Adverse impacts have varied tooSee table on subsequent slide that provides

Number of wells (RFD federal only)Model(s) used in the analysisAdverse air quality impactsEPA NEPA rating

Status of AQ for RMPs Cont.Various air quality models used to support RMPs

AERMOD (a “plume” model”) Used for near-field impacts up to <50 km Limited chemistry for particulates, not capable of simulating ozone Assumed to give most conservative results $15 -$75k and weeks to a few months to run

CALPUFF (a “puff” model) Used for far-field analysis up to 300 km Limited chemistry for particulates, not capable of simulating ozone $100 - $300k and 2-6 months to run

CAMx or CMAQ (photochemical grid models) Used for regional impacts from a multitude of sources up to

continental scale with gridded, nested “domains” Full chemistry, including ozone Use massive meteorological and emissions data sets as inputs $200k - $750k and 6 -18 months to run Ultimate cumulative impacts tool

Status of AQ for RMPs Cont.Adverse Impacts (or thresholds)

Air Quality National and State Ambient Air Quality Standards (e.g., Prevention of Significant Deterioration Increments Particular case of ozone

Air Quality Related Values (AQRVs for Class I areas) Visibility (light extinction) - 1.0 or 0.5 deciviews Nitrogen and Sulfur Deposition – 5 and 3 kg/ha/yr for N and

S, respectively NPS has proposed 0.005 kg/ha/yr for each

Lake Acidification – 10% change in acid neutralizing capacity (ANC)

Hazardous Air Pollutants Acceptable ambient concentration levels (AACLs)

Air Emission ControlsAs air quality impacts from both federal and non-

federal development increase, BLM sees a need to adopt controls

Both CDPHE and EPA have passed regulations that address a host of oil and gas sources:Colorado Reg 7New Source Emission Standards (NSPS) for

stationary engines and turbinesNONROAD diesel engine emission standards

Will the existing emission control regulations be sufficient?

Adoption of emission controls may be more workable than phasing or limiting development?

Air Emission Controls Cont.Colorado Reg 7 Emission Standards

Tanks standards: New and existing condensate tanks emitting 20 tons per year or more of VOCs required to control emissions by 95 percent commencing May 1, 2008

Engine Standards for new or relocated engines from out of state commencing July 1, 2007:

Source: CDPHE

Glycol Dehydrator controls: New and existing glycol dehydrators emitting more than 15 tons per year of VOCs are required to control emissions by 90 percent commencing May 1, 2008.

Air Emission Controls Cont.

EPA has promulgated “Tier” NONROAD emission standards for diesel engines , including drill rigs

Emissions are progressively reduced until 2015 through Tier 1 – 4 emission standards

An associated diesel fuel standard will reduce the sulfur content for nonroad engines form 500 ppm to 15 ppm

The nonroad engines emission standards address several pollutants, but primarily NOx (see next slide)

Air Emission Controls Cont.So why would BLM implement further control

measures?State and federal regulations may not be

sufficient to avoid unacceptable impactsNot all air emission source categories are

addressed by state and federal regulations (fugitive dust, venting emissions, methane, etc..)

Some emission standards will not be implemented until future year (e.g., Tier 4 nonroad standards in 2014)

Air Emission Controls Cont.Does BLM have authority to require stricter

emission standards?A question of law, not BLM air quality policyIn practice, this has been addressed on an ad-hoc

basis in coordination with state DEQsLikely not an easy answer as due to

Regulatory framework for source type (mobile vs. stationary vs. area)

EPA delegation of authority to state Legal precedents (case law) Example: Green completions

Generally, yes, as various sections of FLMPA and the Clean Air Act direct BLM to protect air quality

Regional Assessment Air quality analyses are currently being conducted on a plan-by-plan or

project-by-project basis Air quality impacts from wide-spread oil and gas development are

inherently well suited to be assessed with photochemical grid models Advantages include:

Cost efficiencies

Disadvantages include:

Not well suited for assessing near-field impacts Predicted impacts from an individual plan

Several existing air quality studies could be leveraged, including: Uinta Basin / IPAMS modeling White River CAMx modeling Four Corners Air Quality Taskforce

CDPHE, EPA, and USFS have indicated support for this approach