The governor and air quality regulators in Colorado are seeking broad-based input and support for a new set of air emissions rules applied to oil and natural gas drilling as evidenced by Gov. John Hickenlooper's move on Monday to assure a smooth regulatory process.

At stake are new rules that carry potential economic impacts for oil and gas exploration and production, which is the state's largest source of volatile organic compounds (VOC) and the fourth largest polluter of nitrogen oxides (NOx), according to the most recent state baseline findings.

The Air Quality Control Commission (AQCC) is seeking "the adoption of reasonable emission reduction strategies." (see Shale DailyJuly 10). To help the process Hickenlooper told the AQCC he was extending the appointments of four of the nine-member commission's members beyond their termination dates of Jan. 31, 2014 so they can be part of the process of finalizing the now draft rules.

"These stakeholder groups are very important in trying to find some consensus," said Colorado Oil and Gas Association spokesman Doug Flanders. "Whether that can be accomplished depends on whether stakeholders will be willing to compromise and whether they believe the new [federal] rules are enough."

"We want to express our appreciation of the work of the AQCC and the willingness of all current members to remain on the commission until this important work is completed," Hickenlooper said in his letter to AQCC Chair John Lowey.

While the Colorado Oil/Gas Conservation Commission (OGCC) holds primary responsibility for oversight of the oil/gas E&P sector, the state Department of Public Health and the Environment's AQCC is expected to deal with a formal request from its staff for the emissions rulemaking in November, followed by a tentative hearing in February, according to an AQCC spokesperson.

"The ongoing stakeholder process that the division is extending includes participants from, among others, both the environmental and oil/gas sectors," the commission spokesperson said.

Recent local news reports have indicated that environmental groups are urging the AQCC to adopt a stricter approach with the oil/gas operators, in comparison to what they consider somewhat lax oversight by OGCC of oil/gas spills. Among the considerations in the new emission rules are tighter controls on storage tanks and expanding pollution control requirements that are now applied to the Front Range areas.

The context for the ongoing negotiations/collaboration is the fact that several proposals earlier in the year were put on the table to revamp the state's public health/environment regulations as part of an AQCC 2013 rulemaking effort. Among other things, regulators want to adopt in full the U.S. Environmental Protection Agency's (EPA) New Source Performance Standards within the Clean Air Act.

EPA last year gave industry until 2015 to eliminate harmful emissions from drilling sites (see Shale Daily, April 19, 2012). The state may adopt rules, but those rules need to be at least as stringent as EPA's.

The AQCC also is reviewing "overlaps and gaps" in state/federal oversight. The AQCC last year postponed fully adopting the EPA standards.

 Flanders said the oil/gas sector has been very involved in the rulemaking process so far. "We believe these stakeholder discussions are critical in ensuring that all the information necessary for this rulemaking is understood," he said. "Before any rulemaking moves forward, we all need to ensure that the right methodologies and processes are clear to all stakeholders."