NEPA Compliance: Energy Development and Air Quality

1. NEPA Compliance:Energy Development and Air Quality Westar Energy Conference Denver, Colorado October 22, 2008

2. Topics • Oil and Gas Development and NEPA • Addressing air analysis in NEPA • Status of Field Office air analyses for RMPs • Air pollutant emission controls • Regional assessments

3. Land Use Planning and NEPA • BLM plans for, and analyzes oil and gas decisions at two distinct levels: • RMPs • Master Development Plans • RMP – leasing decisions • Analyze reasonably foreseeable development scenarios related to the leasing decisions • Conduct determination of NEPA adequacy before each lease • Master Development Plans – development decisions • BLM promotes MDPs over individual APDs • Analysis and decision should be consistent with RMP

4. Master Development Plans • Operator 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

5. Application for Permit to Drill • Early 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 owners • Drilling Plan – engineering specifications • Surface Use Plan – an outcome of the onsite visit including design criteria • APD Processing – BLM has 30 days to Deny, Defer, Approve • Begin NEPA analysis

6. Purpose of a NEPA Document • Support 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

7. NEPA Screening Process • Does 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?

8. Determining Significance • Context – the potential significance of an impact will vary based on the setting of the proposed action • Local vs regional • Short-term vs long-term • Intensity – refers to the severity of impact • Must assess direct, indirect and cumulative effects • Also beneficial effects, controversy, public health, uncertainty, precedent, sensitive resources, etc.

9. Mitigation Measures • Actions that can reduce, avoid, minimize, rectify, or compensate adverse impacts • Required mitigation measures must be described in the decision document • Monitoring is required to ensure the implementation of mitigation measures • For 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

10. Recent NEPA Changes • BLM 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 • Changes • Consensus management approach • Adaptive management • Purpose and need • Impact analysis • Connected actions • Cumulative effects

11. Status of Air Quality for RMPs • BLM began using air quality models to disclose impacts from RMPs a few years ago • Methods and models used for air quality models have evolved due to: • A need to better quantify cumulative impacts • A need to include ozone impacts • Greater 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

12. Status of AQ for RMPs • Different AQ models used to support RMPs in Colorado • Adverse impacts have varied too • See table on subsequent slide that provides • Number of wells (RFD federal only) • Model(s) used in the analysis • Adverse air quality impacts • EPA NEPA rating

13. 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

14. 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)

15. Air Emission Controls • As 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 7 • New Source Emission Standards (NSPS) for stationary engines and turbines • NONROAD 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?

16. 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.

17. 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)

18. Air Emission Controls Cont. • So why would BLM implement further control measures? • State and federal regulations may not be sufficient to avoid unacceptable impacts • Not 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)

19. Air Emission Controls Cont. • Does BLM have authority to require stricter emission standards? • A question of law, not BLM air quality policy • In practice, this has been addressed on an ad-hoc basis in coordination with state DEQs • Likely 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

20. 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