Oil and Gas Rules Colorado

A storage tank near a well pad in a field near a housing development in Broomfield. (AP Photo/David Zalubowski, file)

Colorado regulators are signaling that they will not stop issuing permits for new oil and gas activity in the state as new development rules are being drafted.

The Colorado Department of Public Health and Environment's (CDPHE) Air Pollution Control Division held its first meeting Monday to discuss rulemaking resulting from Senate Bill 181, the oil and gas regulatory reform measure passed during the 2019 legislative session.

While attention has focused on what the measure means for the Colorado Oil and Gas Conservation Commission, a portion of the law separately directs the CDPHE to take bigger steps to ratchet down emissions from oil and gas activity.

Officials began that process with rulemaking at the meeting Monday, the first of several meetings around the state in the coming months. Those rules then go to the commission for approval.

The bill's language is simple, only requiring the commission to regulate the emission of air pollutants from oil and gas activity. But some who attended Monday meeting believe officials should take stronger steps, such as imposing a moratorium on new air quality permits until the rulemaking is completed.

Over the next several months, officials will write rules intended to reduce emissions in methane, hydrocarbon, volatile organic compounds (VOCs), hazardous air pollutants (HAPs) and nitrogen oxide (NOx) emissions.

According to Air Pollution Control Division Director Garry Kaufman, the rules will apply to leak detection, inspection of transmission pipelines, and continuous methane monitoring at large facilities, multi-well facilities, and those close to occupied dwellings.

The agency will hold other rulemaking sessions in the coming months that could produce rules that work alongside SB 181. Chief among those rulemakings: one on House Bill 1261, as well as rulemakings dealing with ozone standards (the Front Range has seen unhealthy levels throughout June and July) and regional haze.

Kaufman pointed out that the state has actually reduced NOx emissions over the past seven years, despite an increase in oil and gas production. Those improvements have come in every area monitored except for oil and gas, he said.

Emissions leaks at oil and gas facilities have also come down, as have emissions of non-methane organic compounds. But the industry is still the leader in emissions of volatile organize compounds, Kaufman said.

"If you want to reduce ozone, you have to reduce VOCs and NOx," he said. "We've made progress, but it's not enough."

This isn't the state's first effort with rulemaking on oil and gas; they date back to the 2000s, Kaufman said. The most significant rulemaking took place in 2014, when Colorado became the first state in the nation with methane emission requirements for the industry. 

The Air Pollution Control Division is looking at regulations in eight areas, including several that have never before had regulations from CDPHE. 

  • In the transmission area, the division's proposal requires companies to adopt best management practices, including annual compliance certifications and annual company-wide emissions reports that can be verified by third parties.
  • Another larger source of emissions, tanker trucks, would be required to install a vapor collection and return system or an enclosed combustion device. Kaufman said the division believes that will take the industry longer to implement, so an effective date isn't envisioned until 2021. 
  • The division also proposes a first-ever annual statewide emission report. Colorado already has a robust requirement for reporting emissions, Kaufman said, "but it's not enough." This would provide a first-ever reporting on methane emissions, he said. "We can't reduce what we don't measure or understand."
  • The division also proposes enhanced rules in existing areas like leak detection. A proposed rule could require semi-annual inspections, which will be more frequent than currently required for small facilities outside the Denver area. That rule won't change the requirements for inspections at larger facilities, which are quarterly or even monthly.
  • The division also proposes some flexibility for oil and gas operators on those inspections, Kaufman said. That would allow operators to use more cost-efficient new technologies (monitoring now relies primarily on infrared cameras), so long as they can demonstrate it would be at least as effective as what's currently in place. 
  • For pneumatic devices, primarily in the natural gas sector and which emit methane, the division will propose provisions to make greater emissions reductions.
  • One rule proposal would close a loophole in permitting, which currently allows operators to run new exploration and production facilities for the first 90 days before applying for an air quality permit. That would come to an end in the division's proposed rule.
  • For storage tanks, the division's proposal would require tanks that emit VOCs to add new controls; new tanks would require auto-gauging devices that would prevent emissions when its liquids are moved from tank to truck. It isn't a lot of emission individually, Kaufman said, but when looked at collectively over thousands of tanks, it can be a large emission source.

This set of rules won't be the last, Kaufman said. One of the proposals officials are looking at for next year is continuous methane monitoring, which was included in SB 181, but the technology may not yet be there. The division also has to deal with rules for zero-emission vehicles, also the result of legislation from the 2019 session.

Some of the nearly 100 in the audience, however, believed the division isn't going far enough. One man said that minimizing emissions is not the goal of SB 181, that the law intends for the industry to operate in a manner that protects public health. That means shutting down oil and gas production, said he and other environmental activists who testified during the meeting's public comment period.

That led to a back and forth between Kaufman and audience members about interpretation of the new statute. Kaufman noted that while the ultimate goal is to protect public health, the bill said the commission's directive is to reduce emissions.

"We're protecting public health by reducing emissions," he said. "... We were not told [by the legislature] to shut down the industry or issue a moratorium. Minimizing emissions is an aggressive target."

Several residents of Boulder County in attendance asked that the division require emissions reductions that come from the wind blowing those emissions from wells in Weld County. There are 24,000 active wells in Weld but just 100 in Boulder, said attendee Leslie Weise.

Kaufman said the proposed rules will benefit those who live nearby and those who live far from the emissions sources.

The state has made progress, but emissions from those facilities are still far too high and don't meet air quality goals, Kaufman said, adding: "We do that by implementing strategies, finding new technologies or less-emitting facilities."

Christy Douglas, a Commerce City resident in attendance, said that the air in their community is blanketed with haze "as thick as pea soup. It looks like a picture from China.

"This madness has got to stop," she added. "You have to stop ignoring it and pretending it isn't happening."

John Putnam, director of environmental programs for the CDPHE, said the agency takes minimization seriously.

"We want to drive it as close to zero as possible," he said.

Rebecca Fisher, an attorney with Wild Earth Guardians, provided a list of recommendations to the division in its rulemaking process, including that the division cease all permitting and processing of air quality permits for the oil and gas industry until the rulemaking is completed.

"Public health and safety must be protected today," she said.

The division should make rules that include a net reduction in emissions, which might require the division to reject some of the permits, she said.

"The most obvious way to minimize emissions is to stop permitting," added Karen Kalavity of Westminster. "The more permits, the more drilling and more emissions and more damage to the earth." 

While representatives and advocates for the oil and gas industry attended the meeting, few spoke out. Among the few who did was Eric Carlson, executive director of the West Slope Colorado Oil and Gas Association, who said he hopes the state's rulemaking will achieve significant emissions reductions without being a burden to the industry. 

Putnam said at the hearing's conclusion that "we share the same goal: protection of public health. The only question is timing. We will get there. Everything we're doing is aiming at reducing emissions of ozone-forming, greenhouse gas-forming substances. We are committed to doing that."

But "the targets set by the legislature for greenhouse gases are exceptionally aggressive," he said. "It will be difficult to get there. We are not elected officials, we take our orders from the governor and legislature. ... It won't happen overnight, but we are working on an aggressive schedule to meet all the obligations. ... We want to do it right."

The next meeting, scheduled for Aug. 22, will include a presentation on drafts of the proposed rules. From there, the division plans to hold stakeholder meetings in Broomfield (Sept. 4) and Grand Junction (Sept. 10).

It will then be up to the state's Air Quality Control Commission to review the division's proposed rules, sometime in late fall.

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