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Noble Energy, Inc. Settlement

(Washington, DC - April 22, 2015) The U.S. Environmental Protection Agency, the Department of Justice, and the State of Colorado announced a settlement with Noble Energy, Inc. (Noble) that comprehensively identifies and addresses issues with vapor control systems at Noble’s condensate storage tank batteries in the Denver-area 8-hour ozone marginal nonattainment area (nonattainment area). 

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Overview of Company and Operations

Noble Energy, Inc. is an oil and natural gas exploration and production company based in Houston, Texas. Noble has extensive domestic and international oil and natural gas assets and production activities. Noble’s U.S. onshore assets include operations in Colorado’s Denver-Julesburg Basin and the Marcellus Shale in Pennsylvania and West Virginia. Noble’s operations in the Denver-Julesburg Basin are located both inside and outside of the nonattainment area.

Noble’s Denver-Julesburg Basin operations include oil and gas wells, condensate storage tanks, and vapor control systems. A condensate storage tank collects liquid hydrocarbons that have been separated from natural gas after production from an oil and gas well. The liquid hydrocarbons, or condensate, are stored in tanks – multiple tanks located together constitute a tank battery – until pickup and transfer for sale and transport in a tank truck. Vapor control systems are required at many tank batteries to capture and recover or combust the condensate’s hydrocarbon vapors. Multiple tank batteries can be served by the same vapor control system. Improperly or inadequately designed, sized, operated, or maintained vapor control systems can lead to uncontrolled emissions of volatile organic compounds (VOCs), which contribute to the formation of ground-level ozone and may contain hazardous air pollutants such as benzene.

This settlement covers more than 3,400 tank batteries that are connected to approximately 2,400 vapor control systems, which represent essentially all of Noble’s vapor control systems in the nonattainment area operating pursuant to Colorado State Implementation Plan requirements. As defined in this settlement, a “tank system” refers to all of the tank batteries connected to a single vapor control system.

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The settlement resolves past violations of Colorado’s Regulation 7, Section XII requirements for controlling VOC emissions from oil and gas operations. The 2008 version of the Section XII requirements is part of Colorado’s federally-approved State Implementation Plan. Federally-approved State Implementation Plan requirements are federally enforceable under the Clean Air Act. Specifically, the settlement resolves alleged past violations of Regulation 7, Section XII requirements relating to installation, operation, maintenance, design, and sizing of vapor control systems at condensate storage tanks. The settlement also resolves past liability for (i) system-wide emissions reduction requirements under Section XII and (ii) failures to mark identification numbers on storage tanks and combustors.

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Injunctive Relief

The settlement requires the following actions to resolve the Clean Air Act violations:

  • Noble will perform engineering evaluations addressing certain identified minimum considerations to ensure its vapor control systems are properly designed and sized to control VOC emissions.
  • Following the engineering evaluations, Noble must make any necessary modifications to ensure each vapor control system is properly designed and sized, perform infrared camera inspections to ensure that the vapor control systems are controlling emissions and the tanks are not emitting VOCs, and then implement a directed inspection and preventative maintenance program to ensure proper upkeep and operation of the systems.
  • A third-party auditor will review Noble’s engineering evaluations of the vapor control systems at all tank systems and perform infrared camera inspections at a cross-section of the tank systems.
  • Noble will evaluate the condition of pressure relief valves, thief hatches, and mountings and gaskets on each condensate storage tank and address any evidence of VOC emissions from those devices.
  • Noble will install Next Generation pressure monitors with continuous data reporting on a cross-section of the tank systems to verify that storage tanks are not experiencing increased pressure readings indicative of tank over-pressurization that could cause VOC emissions.
  • Noble will prepare and publicly post reports containing useful information on its vapor control system engineering evaluations and modifications, intended to provide other companies with the opportunity to learn from Noble’s findings and apply them to their own storage tanks, helping to reduce emissions.

It is estimated that implementation of these actions will cost approximately $60 million and reduce VOC emissions by over 2,400 tons per year in the nonattainment area.

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Mitigation Projects

Noble will spend at least $4.5 million on the following environmental mitigation projects that will reduce ozone precursor emissions – VOCs and nitrogen oxides (NOx) – by an estimated combined total of 800 or more tons per year:

  • Loading condensate from storage tanks into tanker trucks in a closed system consisting of pipes and hoses designed to prevent vapors from being emitted to the atmosphere;
  • Drill rig diesel engine retrofits to reduce emissions of NOx and/or other ozone precursors;
  • Fracturing equipment – pressure pump – diesel engine retrofits to reduce emissions of NOx and/or other ozone precursors; and
  • Changeout of gas lawn mowers for electric mowers to reduce VOC emissions during the summer ozone season.

Noble will also require its tank truck contractors to implement an alternative oil measurement standard for product loadout if and when the American Petroleum Institute approves of the alternate method and relevant regulatory authorities adopt or endorse that method. This alternative standard would reduce or eliminate thief hatch opening during the sampling process for tank truck loadout and further reduce VOC emissions by an estimated 250 tons per year.

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Supplemental Environmental Projects (SEPs)

  • Noble will spend no less than $1 million on a federally-approved wood stove changeout SEP in the nonattainment area. This project will reduce emissions of particulate matter with a diameter of 2.5 microns or less (PM2.5), carbon monoxide (CO), VOCs, and hazardous air pollutants (HAPs) from woodstove appliances in the nonattainment area. 
  • Noble will spend no less than $1 million on a federally-approved SEP aimed at improving the reliability of hydrocarbon liquids sampling and analysis procedures, which can be used to estimate emissions and properly size condensate storage tanks’ vapor control systems. By identifying techniques that eliminate potential sources of error, the study should facilitate more accurate and reliable sampling results that provide better emission estimates for properly engineering and sizing vapor control systems. This SEP is likely to lead to future emission reductions.
  • Noble will spend $2 million on additional State-approved SEPs. Noble will propose projects for State approval after the court concludes its review of the settlement.

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Pollutant Impacts

Ozone is not emitted directly from air pollution sources. Instead, it is a photochemical oxidant formed when certain chemicals – VOCs and NOx – in the ambient air react with oxygen in the presence of sunlight. VOCs and NOx are called “ozone precursors.” Sources that emit ozone precursors are regulated to reduce ground-level ozone in the ambient air. The Denver-area is currently classified as marginal nonattainment for the 8-hour ozone National Ambient Air Quality Standard. The nonattainment area spans Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, and parts of Larimer and Weld counties.

The Denver-area’s location next to the Rocky Mountains makes it prone to temperature inversions, in which warm air traps cooler air near the ground such that pollutants do not rise into the atmosphere. These inversion conditions can lead to an unhealthy – and even visible – air pollution buildup.

Noble’s oil and gas exploration and production operations in the Denver-Julesburg Basin emit VOCs, NOx, and other pollutants. As a result of the settlement’s injunctive relief, mitigation projects, and SEPs, the following emissions reductions will be achieved:

  • VOCs:             Greater than 3,270 tons per year;
  • CO:                 An estimated 450 tons per year;
  • NOx:               An estimated 60 tons per year;
  • PM2.5:             An estimated 60 tons per year; and
  • HAPs:             An estimated 10 tons per year.

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Health Effects and Environmental Benefits

Ground-level ozone and PM2.5 cause a wide variety of health and environmental impacts. Ground-level ozone can cause temporary breathing difficulty for people with asthma, airway inflammation, and even permanent scarring of lung tissue from repeated exposure. PM2.5 has been linked to premature death in people with heart or lung disease, nonfatal heart attacks, aggravated asthma, and increased coughing or difficulty breathing. Additionally, fine particles (PM2.5) are the main cause of reduced visibility (haze) in parts of the United States, including many of our national parks and wilderness areas. This settlement’s emissions reductions will help address the Denver-area’s ozone marginal nonattainment status generally, as well as the visible buildup of air pollution during inversion conditions.

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Civil Penalty

Noble will pay a $4.95 million civil penalty divided as follows: $3.475 million to the United States; and $1.475 million to Colorado.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the District of Colorado, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

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For More Information, Contact:

Virginia Sorrell
U.S. Environmental Protection Agency (ENF-L)
1595 Wynkoop St.
Denver, CO 80202
(303) 312-6669

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