Colorado, which has about 51,000 active natural gas and oil wells, has toughened regulations for reporting spills at drill sites, a measure expected to inflate the annual numbers.

HB 13-1278 requires that spills for 1 barrel and above be reported; the previous standard was 5 barrels. There have been 241 reported spills this year through July and 2,475 reported by exploration and production operators since 2008.

A Colorado Oil and Gas Conservation Commission (COGCC) spokesperson said with the lower threshold reporting limit, the spill numbers may increase. “I can say generally that the majority of the spills are smaller in size and more routine to address and clean up,” he said. However, there continues to be the danger of larger spills, such as one at Parachute Creek earlier (see Daily GPI,April 1).

“Our rules continue to evolve and adapt to address the impacts of a fast-changing industry, and we work with state lawmakers to add personnel to ensure the robust oversight Coloradans deserve and demand,” the spokesman told NGI Tuesday.

Even before the lower spill threshold went into effect, Colorado had one of the lowest reporting thresholds in the nation, and most releases continue to be relatively small and confined to the site, according to the industry-led Colorado Oil and Gas Association (COGA).

COGA Director of Policy and External Affairs Doug Flanders told NGI that any spill regardless of size is “unacceptable,” and the industry is “continuously improving equipment and procedures” to prevent spills.

Flanders said the number of reportable spills would increase with the new threshold reporting. A more accurate way to grade the industry, he said, would compare oil and gas spills by volume to the total volume of fluids being handled. A report two years ago by COGCC made that comparison, he added.

From January through October 2011, Colorado reported that the industry had spilled 2 million gallons of fluids, and industry had handled about 10 billion gallons of fluids. “This means total fluids spilled constituted 1/5,000th, or 1/20th of 1% of the overall fluids handled by the industry,” said Flanders.

Skeptics complain that the state is not penalizing the industry enough for the larger spills. They acknowledge that this year PDC Energy ($35,000) and Anadarko Petroleum Corp. ($42,500) have been assessed five-figure penalties for 84,000-gal. and 93,600-gal. spills, respectively. But they also note that OGCC earlier in August presented “outstanding operator” awards to both companies.

“The oil and gas industry is a major industry in Colorado, operating on a large scale,” Flanders said. “Unfortunately, there will be spills, releases and other impacts, and the industry must continuously improve its performance and strive to minimize these events.”