A modified version of a sweeping emissions regulation proposal would let the state deny or revoke any construction permit over modifications that increases ozone pollution by any amount.

The bill’s sponsors argue the legislation is necessary because Coloradans, particularly people of color and residents of low-income communities, have long suffered from high levels of ozone pollution, which is connected to severe health effects and premature death. 

Critics say the proposal would result in far-reaching repercussions that would handicap not just the oil and gas industry, but also other companies in Colorado.

Interestingly, the new version abandoned a provision that would have required any ozone plan for regions not meeting federal air quality standards to include a “vehicle miles traveled reduction rule.”

A coalition of businesses opposed to the underlying legislation described the original provision as reviving a proposal from two years ago that would have required large businesses to “increase parking charges” for gas-powered vehicles, appoint an “Employee Transportation Coordinator” to administer programs that reduce “single occupied vehicle” commutes and offer fully or partially subsidized public transportation passes, even if the business is nowhere near any – all aimed at reducing vehicle-sourced emissions, particularly during peak times.

In a legislative maneuver called a “strike below,” proponents of House Bill 23-1294 replaced the measure’s entire content with new language just as the first committee hearing began on Thursday.

The newly amended bill includes a section that allows denial or revocation of an air pollution or construction permit for any modification to any building, including minor sources, that “increases the amount of any air pollutant emitted by the source by any amount on an annual or hourly basis; or results in the emission of any air pollutant not previously emitted by the source.”

Critics say while the bulk of the bill is directed at the oil and gas industry, the change means that any building that requires a building permit for work that would increase emissions “by any amount” would require a complex analysis of the project.

The bill requires the use of a state air pollution modeling program to determine if the cumulative impacts of the project, when combined with existing emissions, would increase the total of emissions that contribute to the formation of ozone.

Critics say that would allow denial of a new permit and revocation of an existing permit for any increase in emissions from any building in the state, including buildings not in areas where ozone is a problem.

Referencing the original bill’s trip reduction provision, Paul Seby, a natural resources attorney who recently won a U.S. Supreme Court case against the EPA, told The Denver Gazette it “would have limited driving by anyone: citizens, people on their way to work, mothers taking their children to school, people shopping for food, going to obtain prescriptions; or otherwise going to work.”

Seby said the provision would have given the Colorado Air Quality Control Commission “an open check to remove the freedom of travel by people” within the nonattainment area.

The EPA’s nonattainment designation includes nine counties from Douglas County in the south to Weld and Larimer counties in the north, as well as Boulder, Denver, Arapahoe, Jefferson, Adams, and Broomfield counties.

The federal agency downgraded the area’s rating from serious to severe on Sept. 15. 

The new language creates an interim legislative committee to examine how to get into ozone compliance. The first meeting would take place within 60 days of June 30 and up to five bills resulting from the deliberations could be presented in next year’s legislative session.

The revised bill also sets up processes for public complaints allowing anyone to file a complaint against any business the complainant alleges to be violating air pollution rules, which would necessitate mandatory investigations and hearings by the Air Quality Control Division – unless the agency deems the complaint to be clearly frivolous or trivial.

Under the bill, penalties for violations or noncompliance with permitting regulations cannot be less than economic benefit that the owner or operator derived from the violation.

The bill also requires the state to adopt rules that requires the electrification of all stationary engines, unless oil and gas operators can demonstrate that it’s not feasible. 

Critics say this will tie up ordinary businesses in lawsuits and bring investment and upgrades to a grinding halt.

At the House Energy and Environment Committee hearing on HB 1294, Rep. Jenny Willford, who sponsored the bill, explained the need for the legislation by saying that minor sources are a significant driver of ozone pollution.

“Yet,” she added, “Colorado’s permitting largely processes largely ignore their air quality impacts.”

“Colorado has thousands of minor sources including many oil and gas wells, but because they’re deemed minor permitting of minor sources is fast-tracked and the state does virtually no air quality analysis before approving these permits,” Willford said. 

Citing the Federal Clean Air Act, the bill says that the state has an obligation to “increase air quality analysis in its permitting processes and to assess the impacts of potential new sources” before building permits are issued to “avoid emission increases” that would contribute to ozone creation.

The bill also says that minor sources can cause a region to exceed federal standards, leading to a cumulative impact on “already overburdened, disproportionately impacted communities.”

Christy Woodward, senior director of regulatory affairs for the Colorado Oil and Gas Association, testified that half or more of ozone and ozone precursor chemicals come from natural sources, as well as from ozone and chemicals blown into the state from other states, including from forest fires in the west.

In the fall of 2021, during the COVID-19 pandemic, modeling data from the Regional Air Quality Council showed that of the seven air quality monitors that exceeded the federal ozone limit of 75 parts per billion, between 36 and 39 parts per billion were attributable to out of state sources, said Woodward.

Willford, the bill’s sponsor, countered that, in November, state analysis determined that 45% of oxides of nitrogen and 41% of volatile organic chemicals, both substances that create ozone when exposed to sunlight, came from the oil and gas industry.

Sarah Blackhurst, president of Action 22, a public policy chamber of commerce for 22 counties in southern Colorado, said the organization opposes the bill.

“Colorado businesses are already working hard and making sacrifices to comply with existing air quality standards,” Blackhurst said. “The bill requires new pollution modeling simulations for several categories of permits, including but not limited to dry cleaners, bakeries, warehouses, distribution centers, breweries, rail yards, oil and gas facilities, and any other indirect air pollution sources.”

The bill sponsors insist that “extraordinary air quality measures” are required to get into compliance with federal law.

“This bill is not about bakeries, they’re not going to meet that modeling threshold,” said bill sponsor Jennifer Bacon, D-Denver. “This bill is also not about putting on oil and gas out of business since we are simply asking that we come together share information, provide that transparency, and figure out how to move this state into compliance.

“Colorado has an ozone problem and it’s past time we take the needed steps to improve our laws to solve it,” added Willford. “Coloradans deserve clean air and my hope is that over the summer interim committee process that stakeholders will bring solutions that aren’t based in fear, false choices or ultimatums.”