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PetroShale (US), Inc. - Various Well Pads and Facilities Partial Compliance Evaluation (PCE) On-Site Clean Air Act (CAA) Inspections Inspection Date(s): October 20, 23 and 24, 2024 Inspection Report Date: December 19, 2024 EPA Representatives: Tribal Representatives: Katelyn Bergl, US EPA Region 8, Clean Air Act Inspector Youn Joo Kim, US EPA Region 8, Clean Air Act Inspector Taylor Waanders, US EPA, Clean Air Act Inspector Dwight Bruce, MHA Energy Company Representatives: None Inspection Report Prepared By: Katelyn Bergl, US EPA Region 8, Clean Air Act Inspector Youn Joo Kim, US EPA Region 8, Clean Air Act Inspector Inspection Report Reviewed By: Applicable Rules: Scott Patefield, Manager, Enforcement and Compliance Assurance Division, Air and Toxics Enforcement Branch Digitally signed by SCOTT SCOTT PATEFIELD PATEFIELD Date: 2024.12.19 17:48:13 -07'00' 40 C.F.R Part 49, Subpart K - Federal Implementation Plan for Oil and Natural Gas Well Production Facilities; Fort Berthold Indian Reservation (Mandan, Hidatsa and Arikara Nation), North Dakota (Fort Berthold FIP) 40 C.F.R Part 60, Subpart OOOOa - Standards of Performance for Crude Oil and Natural Gas Facilities for which Construction, Modification or Reconstruction Commenced After September 18, 2015 (NSPS OOOOa) 40 C.F.R Part 60, Subpart OOOOb - Standards of Performance for Crude Oil and Natural Gas Facilities for Which Construction, Modification or Reconstruction Commenced After December 6, 2022 (NSPS OOOOb) Compliance Assistance None Enforcement History None Areas of Concern 1. The EPA detected hydrocarbon emissions from the storage tanks co-located with the following well pads: Primus 3H/4H (West) Pad Tahu - Riverview CTB Facility Horse Camp West Pad See Table 1 below for more details regarding inspected locations for all well pads and Table 2 for inspection observation details. A log of images and videos captured during the inspections is provided in Appendix A. General Inspection Information Unannounced well pad inspections were conducted jointly by U.S. EPA and Fort Berthold Indian Reservation (FBIR) Tribal inspectors on October 20, 23, and 24, 2024, at multiple PetroShale (US), Inc. (PetroShale) facilities located on the FBIR. PetroShale is a whollyowned subsidiary of Lucero Energy Corp. that operates under the PetroShale name. The EPA inspectors evaluated each well site listed in Table 1 using audio, visual, and olfactory (AVO) inspection methods including the use of an optical gas imaging (OGI) camera and EPA Reference Method 22. At each facility, inspectors scanned the crude and/or water storage tanks, closed vent system and flares onsite for any detectable emissions. Specifically, inspectors scanned storage tank covers and closed vent systems for hydrocarbon emissions to determine compliance with the Clean Air Act, including the Fort Berthold FIP and NSPS regulations. Each well pad inspection followed the approach below: 1. Record the entry sign of the well pad when available. Survey the entire well pad with OGI camera. 2. Record the number and type of site process equipment such as well heads, tanks, and emission control devices. 3. Record AVO indications of emissions from the storage tanks, closed vent system to the control devices and control devices. 4. Using the OGI camera, survey each process in infrared modes (auto, manual, and/or high-sensitivity modes). Record any uncontrolled emissions with the OGI camera and describe the frequency and magnitude of emissions in the field notebook. 5. Observe control devices (enclosed combustor or utility flare) for visible emissions. If there is visible emissions present, conduct Method 22 and record the observations. Page 2 of 5 6. Using another OGI camera, if available, confirm any observations of uncontrolled emissions with another inspector. 7. If there are operators present onsite, share any Areas of Concern. Table 1 lists general inspection and well pad details for each inspected well pad. The well pad information located in Table 1 is from the North Dakota Industrial Commission (NDIC) well index located online at https://www.dmr.nd.gov/oilgas/. Table 1: Inspection Arrival Date Time 10/20/2024 14:17 10/20/2024 14:40 10/20/2024 14:48 10/20/2024 15:02 10/23/2024 15:44 10/23/2024 15:53 10/24/2024 10:15 and Facility Details of Facilities Inspected Departure API Time Well Pad Name Number Latitude 14:30 Primus 3H/4H 3305307774 47.991668 (West) Pad 3305307775 3305310070 3305310072 3305310073 3305310227 14:45 Primus 8H Pad 3305307650 47.991647 14:53 Primus 12/13H 3305307780 47.990736 (East) Pad 3305307868 15:16 Tahu - Riverview 3305309618 47.958060 CTB Facility 3305309619 3305309620 3305309622 3305309623 15:50 Horse Camp 4- 3302503328 47.744616 104-11H Pad 3302503329 16:09 Horse Camp 3302501236 47.745092 West Pad 3302501237 3302503507 3302503508 10:18 Bear Chase Pad 3305302870 47.788922 3305308677 3305308678 3305308679 Longitude -102.74835 -102.74087 -102.73826 -102.72972 -102.53933 -102.55379 -102.76122 Observations and Regulatory Applicability Fort Berthold FIP, NSPS OOOOa, and NSPS OOOOb regulations which are potentially relevant to the Areas of Concern observed during inspections are summarized in this section. Table 2 at the end of this report summarizes inspection observations and findings related to storage tank observations. See Appendix A for a log of images and videos taken during the inspections. Fort Berthold FIP Applicability Page 3 of 5 Based on drilling information reported to the NDIC well index by PetroShale, the facilities listed in Table 1 were completed after the August 12, 2007, applicability date (per 40 C.F.R. 49.4161) and are producing from the Bakken Pool (per 40 C.F.R 49.4163(a)(1)) and are thus subject to the Fort Berthold FIP. Closed Vent System Equipment Requirements [ 49.4165(b)] Per 49.4165(b)(1), "Each closed-vent system must route all produced natural gas and natural gas emissions from production and storage operations to the natural gas sales pipeline or the control devices...". The EPA, using an OGI camera, detected natural gas emissions from production and storage tanks at the Primus 3H/4H (West) Pad, the Tahu Riverview CTB Facility, and the Horse Camp West Pad. See Area of Concern #1 above. NSPS OOOOa Applicability Based on PetroShale's NSPS OOOOa annual reporting, the EPA believes that storage vessels and associated emissions control equipment at the Horse Camp West Pad are potentially subject to requirements for storage vessel affected facilities in NSPS OOOOa. Closed Vent System Equipment Requirements [ 60.5411a(c)] Per 60.5411a(c)(1), owners and operators must "Design the closed vent system to route all gases, vapors, and fumes emitted from the material in the storage vessel to a control device that meets the requirements specified in 60.5412(c) and (d), or to a process." The EPA, using an OGI camera, observed emissions from the closed vent system at the Horse Camp West Pad. See Area of Concern #1 above. NSPS OOOOb Applicability Based on PetroShale's most recent NSPS OOOOa annual reporting, which provided notice of future NSPS OOOOb applicability at certain PetroShale facilities, the EPA believes that storage vessels and associated emissions control equipment at the Primus 3H/4H (West) Pad and the Tahu - Riverview CTB Facility are potentially subject to requirements for storage vessel affected facilities in NSPS OOOOb. Closed Vent System Equipment Requirements [ 60.5411b(a)] Per 60.5411b(a)(2), owners and operators must "design the closed vent system to capture and route all gases, vapors, and fumes to a process or a control device that meets the requirements specified in 60.5412b(a) through (d)..." Furthermore, 60.5411b(a)(3) requires that the closed vent system be designed and operated "with no identifiable emissions." The EPA, using an OGI camera, observed emissions from the closed vent system at the Primus 3H/4H (West) Pad and the Tahu - Riverview CTB Facility. See Area of Concern #1 above. Page 4 of 5 Table 2: Inspection Details: Storage Tank Observations Number of AVO (Audio, visual, Storage olfactory) Well Pad Name Tanks Observations Primus 3H/4H (West) 20 Pad None Tahu - Riverview CTB Facility 12 None Horse Camp West Pad 16 None Emissions Description Continuous emissions from thief hatch on Tank 3H3108 (Oil). Two points of emission were observed: One was intermittent emissions from the oil tank located closer to the flares. The second was a continuous, large plume from a p/v vent on produced water tanks. Continuous emissions from the top of the tank. Media File Name MOV_3507.mp4 MOV_3508.mp4 MOV_3510.mp4 MOV_3511.mp4 MOV_3550.mp4 Page 5 of 5 APPENDIX A: Photograph and Video Log Media File MOV_3507.mp4* MOV_3508.mp4* MOV_3510.mp4* MOV_3511.mp4* MOV_3550.mp4* entrysign-20241020-142931.jpg entrysign-20241020-194102.jpg entrysign-20241020-144952.jpg entrysign-20241020-150355.jpg entrysign-20241023-204524.jpg Description Well Pad Name Continuous emissions from thief hatch on Tank 3H3108 Primus 3H/4H (West) Pad (Oil). Two points of emission were observed: One was intermittent emissions from the oil tank located closer to the flares. The second was a continuous, large plume from a p/v vent on produced water tanks. Tahu - Riverview CTB Facility Continuous emissions from the top of the tank. Horse Camp West Pad Entry Sign Primus 3H/4H (West) Pad Entry Sign Primus 8H Pad Entry Sign Primus 12/13H (East) Pad Entry Sign Tahu - Riverview CTB Facility Entry Sign Horse Camp 4-104-11H Pad entrysign-20241023-155604.jpg Entry Sign Horse Camp West Pad entrysign-20241024-151600.jpg Entry Sign Bear Chase Pad *In addition to recording metadata through the OGI camera's system, EPA collected metadata for the media files recorded during the inspections, including the date, time, and location of the recorded media, in the Survey123 ArcGIS application at the time of the inspections. Due to a technical issue experienced with the OGI camera's metadata captured for the .mp4type files, the Survey123 metadata was used as the primary reference for verifying inspection media file data. Appendix A Page 1 of 1