EPA said the company, which Anadarko Petroleum Corp. bought in 2006, also agreed to spend $250,000 on environmental projects in the two areas where alleged violations of federal air pollution regulations occurred.

The settlement addresses alleged violations at natural gas compressor stations on the Uinta and Ouray Indian Reservation near Vernal, Utah, and in the Denver Julesberg basin of Colorado. The control measures and operational improvement are expected to reduce air pollution emissions by more than 3,000 tons/year in Utah and more than 2,500 tons/year in Colorado, EPA said.

EPA said Kerr-McGee disclosed a number of the violations itself and worked with state and federal regulators to resolve them.

Colorado independently initiated enforcement actions against Kerr-McGee in which it alleged violations at five gas compressor stations in Weld County during the last half of 2005. The state and EPA agreed to begin joint discussions with the oil and gas producer concerning those allegations and others in Utah in early 2006, the federal regulator said.

Under the settlement, Kerr-McGee will spend $100,000 to reduce dust emissions from roads that service oil and gas facilities in Utah, and $150,000 to identify and retire vehicles which have higher emissions than newer models in Colorado.

The company also agreed to:

-- Install low-emission dehydrators at its new Uinta basin facilities.

-- Install emissions controls on storage tanks at the Cottonwood and Ouray facilities in Utah and the Brighton facility in Colorado.

-- Install emission controls on 25 compressor engines in the Uinta basin and 11 compressor engines in the Denver Julesberg basin.

-- Retrofit high-bleed pneumatic controllers with low-bleed models at facilities in the two production areas.

-- Install liquid bed sulfur removal where necessary in the Uinta basin to remove hydrogen sulfide.

-- Spend $300,000 to develop an air-monitoring program in the Uinta basin.

-- Implement a Uinta basin pilot project which gathers multiphase fluids from multiple producing gas well sites for collection, separation, and metering at a central facility.

-- Conduct a study to increase gas recovery and reduce air emissions at five facilities each in the two basins.

PIN/OGJ.COM