Colorado production

Colorado’s Air Quality Control Commission (AQCC) on Wednesday unanimously adopted ambitious rules aimed at curbing local air pollution and climate-warming greenhouse gas emissions from state oil and natural gas operations.

The rules will require high frequency monitoring for gas leaks during the pre-production phase of wells, representing “the first state regulatory system of its kind in the country,” AQCC said.

Although different provisions will take effect at different times, the monitoring requirements will take effect as of May 31, 2021, Andrew Bare, spokesman for the Colorado Department of Public Health and Environment, told NGI’s Shale Daily.

The new rules were written under the framework of Senate Bill 181, the landmark legislation strengthening regulatory oversight of the sector that was signed into law in 2019.

Operators will be required to monitor emissions during pre-production, “which starts with the drilling phase and ends with flowback and early production activities,” AQCC said. Operators will also be required to report carbon dioxide and nitrous oxide (NOx) emissions.

The rules also set emissions standards for natural gas-fired reciprocating internal combustion engines of at least 1,000 hp. Officials estimated the standards would cut statewide emissions of the ozone precursor NOx by more than 2,300 tons annually.

Additional controls on flowback tanks at oil and gas sites would also reduce emissions of methane and volatile organic compounds, officials said.

Regulators with Colorado’s Department of Public Health and Environment (DPHE) and the Air Pollution and Control Division (APCD) said the rulemaking was significant.

“Our mandate is to minimize emissions, and collecting the most accurate possible data is a crucial component of our long-term plan,” said DPHE’s John Putnam, who directs environmental programs.

“This new monitoring regime will provide the state and operators with invaluable data on emissions from oil and gas sites, and that will inform our rulemaking as we move forward with this ambitious agenda.”

“It’s a good day’s work,” APCD director Garry Kaufman said of the rules. “But we’re not done. We’re going to build on this step and further enhance air quality monitoring at oil and gas sites, while we continue to push forward on new rules that will protect the public health and environment in Colorado.”

Colorado’s oil production grew nearly six-fold between 2009 and 2019, mainly because of the advent of horizontal drilling combined with hydraulic fracturing.

Industry response to the changes was generally positive, which has not always been the case in Colorado, home to some of the country’s most stringent environmental standards for the energy sector.

American Petroleum Institute (API) executive director for Colorado, Lynn Granger, called the new rules “largely feasible” and “practical” on Wednesday. “We continue to seek consistency and certainty regarding Colorado’s strongest-in-the-nation natural gas and oil regulations, and hope that the revisions adopted tonight will remain in concert with those proposed by other regulatory agencies.”

Colorado Oil and Gas Association CEO Dan Haley also weighed in.

“Everyone knows Colorado has the toughest air quality rules for oil and natural gas development in the nation, and those rules just got even tougher,” Haley said. “Industry largely supported new regulations adopted by the AQCC, which focus on reducing emissions from engines and the flowback stage of pre-production, as well as first-of-their-kind air monitoring requirements.

“Make no mistake, these rule changes will be costly and difficult to implement, but this industry is serious, not only about protecting Colorado’s air, but proving it to local communities.”

The Environmental Defense Fund’s Jon Goldstein, director of regulatory and legislative affairs, praised the regulations, highlighting that Colorado in 2014 became the first state to tackle methane emissions at the wellsite during production. The AQCC, Goldstein said, continued that leadership by extending monitoring requirements to the pre-production phase and by prohibiting natural gas venting during completions when drilling activities can result in significant emissions of methane and other dangerous pollutants.

The new rules follow the Trump administration’s rescission of federal methane controls for the oil and gas sector enacted under the Obama administration. The rollback has been paused by a federal court however, amid multiple legal challenges.