Slawson Exploration Company, Inc. Clean Air Act Settlement

(Washington, D.C. – December 1, 2016) EPA and the Department of Justice today announced a settlement with Slawson Exploration Company, Inc., that will identify and address issues relating to inadequate design, operation, and maintenance of vapor control systems used to control emissions from Slawson’s storage tank batteries at oil and natural gas production well pads in North Dakota.

On this page:

• Overview of Company and Facility
• Violations
• Injunctive Relief
• Mitigation Projects
• Pollutant Reductions
• Health and Environmental Effects
• Civil Penalty
• Comment Period
• Contact

Overview of Company and Facility

Slawson is a privately held oil and gas exploration company that was founded by Donald C. Slawson in 1957. Slawson has drilled over 3,500 wells in ten states, including in 14 different formations in seven basins, and it has regional exploration offices in Denver, Oklahoma City, Houston, and Wichita. Slawson’s oil and natural gas operations in North Dakota are located both on and off the Fort Berthold Indian Reservation. 

Slawson’s oil and natural gas production operations in North Dakota use storage tanks to store produced oil and water at well pads prior to transport by pipeline or truck. Multiple storage tanks are typically present at a well pad and are frequently controlled by the same vapor control system. Vapor control systems are required for these storage tanks pursuant to the North Dakota State Implementation Plan or the Fort Berthold Indian Reservation Federal Implementation Plan, depending on whether the well pad is located on tribal lands. Improperly or inadequately designed, 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 hazardous air pollutants (HAPs), primarily benzene, toluene, ethylbenzene and xylenes. Today’s settlement resolves alleged violations at all of Slawson’s approximately 170 well pads in North Dakota that have wells in production.

Violations

The settlement resolves past violations of the North Dakota State Implementation Plan and the Fort Berthold Indian Reservation Federal Implementation Plan requirements for control of VOC and HAP emissions from oil and natural gas well pads. Specifically, this settlement resolves provisions implicated by claims that Slawson failed to adequately design, operate, and maintain vapor control systems on its storage tanks at oil and natural gas well pads, resulting in emissions of VOCs, HAPs, and methane. 

Injunctive Relief

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

• Slawson 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, Slawson 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. The directed inspection and preventative maintenance program will include semi-annual infrared camera inspections of all Slawson well pads to ensure ongoing proper operation and maintenance of vapor control systems, and to detect and prevent emissions from other components, such as valves and connectors, more broadly at Slawson well pads.
• A third-party auditor will review Slawson’s engineering evaluations for each vapor control system and perform infrared camera inspections at all storage tanks, associated combustion devices, and any open-ended lines at each well pad.
• Slawson will evaluate the condition of thief hatches, and mountings and gaskets, on each storage tank and address any evidence of VOC emissions from those components.
• Slawson will install Next Generation electronic pressure monitors with continuous data logging on a total of 60 tank batteries, 58 of which will be located on the Fort Berthold Indian Reservation, to verify that storage tanks are not experiencing increased pressure readings indicative of tank over-pressurization that could cause emissions. Further, Slawson will install analog pressure gauges that allow for manual readings on half of its tank batteries.
• Slawson will replace all pit flares being used to control storage tank emissions in North Dakota with a control device capable of achieving a 98 percent control efficiency.

It is estimated that implementation of these actions will cost approximately $4.1 million and reduce emissions by over 11,700 tons per year of VOCs, 400 tons per year of HAPs, and 2,600 tons per year of methane.

Mitigation Projects

Slawson will perform the following environmental mitigation projects that will provide additional reductions in ozone precursor emissions – VOCs and nitrogen oxides (NO_x):

• Installation and operation of $1.5 million in equipment to allow for auto-gauging of storage tanks so as to decrease the need to open thief hatches; and
• Drill rig emission controls through one of three options for every drill rig used by Slawson in North Dakota while the consent decree is in effect: using electrification to power the rig, using a selective catalytic reduction module as an add on control for the drill rig exhaust, or retrofitting the engines. Slawson estimates that the drill rig controls will cost approximately $550,000 per drill rig.

Pollutant Reductions

The following emissions reductions are estimated to result from implementation of this settlement’s injunctive relief at Slawson’s well pads in North Dakota:

• VOCs: Greater than 11,700 tons per year;
• HAPs:  Greater than 400 tons per year; and
• Methane:  Greater than 2,600 tons per year.

Health and Environmental Effects

Ozone is not emitted directly from air pollution sources. Instead, it is photochemical oxidant formed when certain chemicals – VOCs and NO_x – in the ambient air react with oxygen in the presence of sunlight. VOCs and NO_x are called “ozone precursors.” Sources that emit ozone precursors are regulated to reduce ground-level ozone in the ambient air. Ground-level ozone causes a wide variety of health and environmental impacts, including temporary breathing difficulty for people with asthma, respiratory illness, and aggravation of existing heart disease. 

VOC emissions from Slawson’s oil and natural gas operations in North Dakota include HAPs, primarily benzene, toluene, ethylbenzene and xylenes. HAPs, also known as air toxics, are those pollutants that are known or suspected to cause cancer or other serious health effects, such as reproductive effects or birth defects, or adverse environmental effects. Benzene has been classified by the EPA as a known human carcinogen.

Although North Dakota is currently classified as attainment/unclassifiable for all criteria pollutants, some scientific studies have concluded that VOC emissions from North Dakota oil and gas production operations may impact much of the United States and Canada, as well as have global impacts in terms of ethane and GHG emissions.  The following are two examples of recent studies:

• Fugitive emissions from the Bakken shale illustrate role of shale production in global ethane shift, available at https://onlinelibrary.wiley.com/doi/10.1002/2016GL068703/epdf . This study concludes that Bakken shale emissions now account for 1-3% of global ethane emissions.
• Aerial Surveys of Elevated Hydrocarbon Emissions from Oil and Gas Production Sites, available at https://pubs.acs.org/doi/pdf/10.1021/acs.est.6b00705. This study discusses the impact of GHG and VOC emissions from oil and gas production and notes that the Bakken had the highest well pad leak rate observed in any surveyed basin.

Civil Penalty

Slawson will pay a $2.1 million civil penalty to the United States.

Comment Period

The proposed settlement, lodged in the U.S. District Court for the District of North Dakota, 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.

For more information, contact:

Jessica Portmess, Attorney
Regulatory Enforcement Unit
Legal Enforcement Program (8ENF-L)
U.S. Environmental Protection Agency – Region 8
1595 Wynkoop Street (8ENF-L)
Denver, CO 80202
303-312-7026
[email protected]

Virginia Sorrell, Attorney
Air Enforcement Division
Office of Civil Enforcement
U. S. Environmental Protection Agency
1595 Wynkoop Street (8MSU)
Denver, CO 80202
(303) 312-6669
[email protected]