ARE NEW OIL-GAS RULES TOUGH?
Even when compared to policy changes made in other states, the answer remains complicated
The answer depends on where you direct the question.
When sponsors of a bill revamping Colorado’s oil and gas laws said the state’s regulations hadn’t changed much in decades, industry representatives were taken aback.
In a statement reminiscent of previous debates, Dan Haley, president and CEO of the Colorado Oil and Gas Association, said the state’s regulations are some of the strictest in the country and have been updated “dozens and dozens of times with bipartisan support.”
As state regulators write new oil and gas rules and update others to implement what one person called an “earthquake” of a law, Colorado’s regulations, and just how strong they are or should be, will get a hard look.
“Are there states like New York that ban fracking? Yeah, so that’s a stricter set of rules.those are tougher than ours because they don’t allow for oil and gas development,” Haley said in a recent interview. “But of the major oiland gas-producing states, I would argue that our rules across the board are more comprehensive than others.”
Some supporters of the legislation, Senate Bill 19-181, disagree. Rules still on the books were written under the Colorado Oil and Gas Conservation Commission’s former mandate to “foster the responsible development of Colorado’s oil and gas natural resources.”
The bill, signed into law in April, changed the mission of the Colorado Oil and Gas Conservation Commission from fostering to regulating development “in a manner that protects public health, safety, welfare, the environment and wildlife resources.” The COGCC is writing rules to comply with the new mandate, a process expected to take several months.
In the past, industry had a seat at the table but homeowners and others didn’t, contended Susan Noble, a Commerce City resident and a founder of the community group North Range Concerned Citizens.
“So any regulations crafted prior to this were regulations that were approved by the oil and gas industry,” Noble said. “SB 181 upended that. Now we have a place at the table.”
For Bruce Baizel, energy program director with the environmental group Earthworks, the issue of enforcement is as impor
tant as how tough the regulations are. He said Colorado regulators have tended toward a don’t-rockthe-boat attitude.
But Colorado’s new law could be “an earthquake,” depending on how rules are written and enforced, because it directs companies to ensure their projects will be protective of human health and the environment.
“That’s a shift from the presumption that you can drill a well and then figure out the mitigation for it,” Baizel said. “With SB 181, elements of that bill are far stronger than anything else in the country.”
First-of-a-kind rules
When Senate Majority Leader Steve Fenberg joined other sponsors in February to announce the introduction of SB 181, he called it “the most sweeping oil and gas reform the state has ever seen” and said Colorado “hadn’t really done anything since the ’50s.”
But Haley said before SB 181, there were 15 rounds of major rule changes over nine years. “That doesn’t account for the massive changes that happened under (former Gov.) Bill Ritter in 20072008.”
Laws passed in those years reorganized the Colorado Oil and Gas Conservation Commission to broaden the representation on the board. The COGCC mission statement was rewritten to replace “encourage and promote” oil and gas development with fostering “responsible, balanced” development. Rules were written to balance development with protection of public health, safety, the environment and wildlife conservation.
The changes affected 10 of 11 categories of regulations, revising or adopting rules on drilling, siting of wells, reclamation and waste management. Consultation with state wildlife officials was required.
Scott Prestidge with COGA said several of the regulations were the first of their kind in the nation. Those include requiring disclosure of the chemicals used in hydraulic fracturing — fracking — when drilling a well and groundwater monitoring before and after development. Distances, or setbacks, between wells and homes, schools and hospitals were increased. Requirements for reporting spills were tightened.
And in 2014, Colorado became the first state in the country to require oil and gas companies to reduce methane emissions. New requirements included monitoring leaks of methane, a potent greenhouse gas, making repairs and more frequent inspections. The rule was hailed by environmental groups and the industry as the gold standard and was a model for Obama-era federal rules, since repealed or revised by the Trump administration.
Clearing the air
“I don’t care how strong the oil and gas industry thinks our rules are, if they’re not effectively reducing ozone from emissions so that they’re complying with federal health standards, then it’s a failure,” said Jeremy Nichols, the climate and energy program director at Wildearth Guardians.
According to state data, oil and gas development is the largest source of volatile organic compounds, pollutants that when heated by the sun form groundlevel ozone and contribute to smog. The industry points out that emissions have decreased while production has significantly increased. However, a ninecounty area along the Front Range, stretching from Douglas County to the north, remains out of compliance with federal airquality standards and the state faces tougher controls to clear the air.
Wildearth Guardians has assailed the practice of allowing companies to drill and operate a new well for 90 days before getting a permit that limits emissions from industrial sites. State officials say companies still have to meet state standards during that period, and companies say the 90 days allow them to determine production levels.
But the state will consider ending what critics see as a loophole as part of the rule-making for SB 181. Nichols would like to see companies have to cut existing emissions before getting permits for new wells.
“At some point, we have to acknowledge that we’ve exceeded our carrying capacity,” Nichols said.
“It’s complicated”
Does Colorado have some of the toughest oil and gas regulations in the country or not?
“The answer is that it’s complicated,” Joel Minor, an attorney with Earthjustice in Denver, said in an email.
At one point, Colorado’s regulations were among some of the toughest, Minor said, but since then other states have adopted stronger air-quality protections, including:
• Utah, which requires more frequent leak detection and repairs to prevent methane and other emissions. Minor said Utah requires twice-yearly inspections for sites, whereas Colorado allows facilities outside the Front Range to operate with just a onetime inspection.
• California, which requires quarterly inspections for all facilities. Minor said California also has stronger regulations for pneumatic devices, equipment that regulates pressure, temperature and the flow of fluids or gas and can be an emissions source. California prohibits new devices from venting natural gas and requires quarterly inspections.
• North Dakota, which has a statewide cap on flaring extra gas produced at a wellhead. Minor said Colorado doesn’t have such a cap.
When it comes to water, Colorado is one of just a few states with mandatory groundwater monitoring, said Lynn Granger, executive director of the Colorado Petroleum Council.
“Colorado is the only state that requires both pre- and postdrilling water sampling,” Granger said.
Rules approved in 2013 require sampling up to four water wells within one-half mile of a new well before drilling starts and after it’s finished. More samples are required five to six years later.
But there is a loophole that applies to the Wattenberg oil and gas field in northeast Colorado, where most of the drilling is occurring, said Matt Samelson, an environmental attorney. Operators can use data collected up to five years prior to drilling rather than sample water wells to establish baseline water quality. Only one post-production sample is required.
Granger said the thinking is that so many wells are being drilled close to each other in the area that “you don’t have to go out sample the same well twice.”
“If you’ve already sampled and established a baseline and now you’re going to drill a new well, you don’t need to go out and collect a new baseline,” Granger added.
However, Samelson said some companies in the Wattenberg have agreements with communities to conduct the more stringent monitoring, so “it’s a doable fix.”
Under SB 181, the COGCC could also shore up water protection by adopting regulations similar to those in Oklahoma and California that require monitoring of the cementing around the casing in a wellbore, Minor said. Colorado doesn’t have specific rules on monitoring, Minor said, which help prevent cracks and leaks into groundwater or on the surface.
Public health, safety and environment
The COGCC and the Colorado Department of Public Health and Environment will spend the next several months writing new rules to carry out SB 181’s mandate to make protecting public health and safety, the environment and wildlife the priority when regulating oil and gas development. The rules will run the gamut from air and water quality to pipelines, flowlines, bonding required of companies, the cumulative impacts of oil and gas production and other issues.
Stew and Chris Nyholm also want to see broader notification of the public when drilling is proposed and more information about oil and gas activities in neighborhoods. In Adams County, where they’ve lived for 33 years, wells have multiplied around them.
“We figure there are at least 114 wells that have been permitted in close proximity to our home and hundreds of other homes,” Chris said.
As members of Adams County Communities for Drilling Accountability Now, the couple are attending COGCC hearings and meeting with county officials, who they hope will strengthen local regulations. The Nyholms are closely monitoring what is happening on a proposed multiwell site about 2 miles north of where they live.
“You can have all the finest regulations in the world, but someone has to uphold them, and you have to have transparency and accountability,” Chris said.