Colorado is the fifth largest producer of oil and gas in America, which means the fossil fuel industry is a vital part of the state’s economy. One of the consequences of oil and gas operations is the release of methane into the atmosphere, sometimes deliberately and sometimes accidentally. Since methane is a powerful greenhouse gas, governments around the world have been struggling to reduce or eliminate those emissions for decades, but have gotten pushback — make that strong pushback — from the oil and gas industry, which says controlling methane emissions is simply too costly (as if destroying every living thing on Earth is just an unfortunate consequence of doing business).
In 2021, the Colorado Air Quality Control Commission, in response to a mandate from the state legislature, began to formulate rules to significantly reduce methane emissions from operations within the state. What followed was 18 months of intensive negotiations with all stakeholders.
Colorado Methane Reduction Rules
Last week, the commission unanimously approved new standards that will directly tie the amount of oil and gas that companies can produce within the state to how well they reduce and measure the methane emissions from their operations. The Colorado rules could become a model for other states and the federal government. The big news here is that the commission was able to get all parties to agree to the new rules, which means they will not be the subject of endless litigation (hopefully).
According to the Colorado Sun, from the beginning of the process, the oil and gas industry was supportive of the rule-making process while environmental and community groups were wary of the process or opposed to it altogether. Commissioner Curtis Rueter said the new rules were “delicately balanced, everyone has given a little bit.” Commissioner Elise Jones went further, saying, “Each preposition was heavily negotiated. I don’t even want to mess with that.”
The rules target specific field equipment such as tanks, engines, and valves and also require enhanced inspections. These “command-and-control” rules are of increasingly limited value, Rueter said. “We’ve picked all the low hanging fruit. We’ve taken care of all those easy ones.”
The intensity program, which aims to curb releases of methane, will give oil and gas companies a free hand in how they reduce emissions, and will set the targeted cuts based on the amount of oil and gas produced. The rules are part of an effort to meet statutory requirements for Colorado to cut its greenhouse gas emissions from 2005 levels by 26% by 2025; 50% by 2030; and 90% by 2050. The oil and gas industry is the third largest source of greenhouse gas emissions in Colorado after transportation and electricity generation.
“The agreement reached today is rooted in technical expertise across academia, technology providers, and industry, and will provide Colorado with a sound regulatory framework to verify greenhouse gas emissions,” the state’s two major industry trade groups — the Colorado Oil and Gas Association and the American Petroleum Institute — said in a joint statement.
The EDF Response
“The Air Quality Control Commission has voted today to adopt the Air Pollution Control Division’s commonsense proposal to directly measure methane emissions in the field,” said Nini Gu, regulatory and legislative manager for the Environmental Defense Fund.
“While there is still important work ahead as the Division develops a scientifically robust program, this rule creates the necessary framework to evaluate whether the state is meeting its statutory methane targets and ensure that oil and gas operators comply with pollution reduction standards. Today’s vote shows Colorado’s continued leadership on oil and gas methane regulations, which is possible thanks to the Division’s commitment to bringing stakeholders to the table to find win-win solutions.”
The rule approved by the Commission today contains the following key points:
- Requires the quantity of methane emissions at production sites to be directly measured, and the measurement data must be publicly reported.
- Empowers the Division with the authority and tools to ensure industry’s compliance.
- Establishes a public process for the development and continuous evaluation of a robust companion protocol by the Division.
This protocol, to be finalized later in the year, is critical to the success of the program. It will ensure that the rule is correctly implemented, which improves the state’s ability to create an accurate greenhouse gas inventory based on real-world data, the EDF said.
Supporters hope the carbon-intensive program will generate innovative ways to capture methane. To meet the 2030 goal, the state Air Pollution Control Division calculates the industry must reduce methane emissions by 140,000 metric tons a year. The intensity program rules are expected to account for about 39% of the cuts.
Real-World Monitoring For Real-World Results
Oil and gas operators will be required to submit more detailed inventories of their emissions, calculate the greenhouse gas intensity for each 1,000 barrels of oil equivalent, or BOE (a measure of oil and gas), and submit a plan to meet carbon intensity goals. In 2025, the first year the rule will be in effect, oil companies producing more than 10 million BOE a year can emit no more than the equivalent of 11 tons of carbon dioxide for each 1,000 BOE.
Operators below that level could emit the equivalent of 34 tons of carbon dioxide per 1,000 BOE. The levels are lowered in 2027 and 2030. All new oil and gas operations will have even tighter emission limits.
The key to the rule is verified measurements of emissions to see if the reduction plans are really working. “The goal is to reduce real emissions, not just reported emissions,” David McCabe, a senior scientist with Clean Air Task Force, told the commission.
To do that, operators will be required to have some form of ground monitors or measurements, whose records will be verified by an independent author. At the same time, state air regulators will do surface, fixed-wing air and satellite measurements.
What kinds of monitoring technologies will be allowed and what best management practices are identified as ways of cutting emissions still have to be negotiated among the parties for a protocol. Stephanie Rucker, manager of the APCD’s Office of Innovations in Planning and Air Quality and the principal architect of the intensity rule, told the commission that the goal is to have the first version of the protocol by the end of the year.
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