Colorado regulators officially enacted new rules this week to limit the cumulative impacts of multiple emissions-producing projects on a single area — and, in doing so, did not make either industry or environmental groups particularly happy.
The effort to define cumulative impacts — the combined effects of oil-and-gas and industrial operations on the air quality, water, climate, noise, odor, wildlife and biological resources of a defined area — has been a half-decade endeavor. After receiving a legislative this year to complete rulemaking this fall, Colorado Energy and Carbon Management Commission members met from Sept. 3 through Oct. 15 before reaching a final unanimous decision on the rules.
As expected, the guidelines, which go into law on Dec. 15, hew closely to those proposed by commissioners on Sept. 26 allowing for continued industry growth within affected areas if it complies with emissions-intensity limits and takes further steps to minimize pollution. The only significant change during three days of hearings this month was the inclusion of a requirement for permit applicants to perform an additional analysis on the combination of each impact (air, water, climate, etc.) in order to provide a more holistic picture.
“This has been a very important rulemaking that has incorporated a lot of thought into it,” said Jeff Robbins, chairman of the ECMC. “I think we’ve done a really good job of trying to meet the intent of the Legislature as far as cumulative impacts go.”
The key point of conflict: Wells near homes
ECMC members appeared to agree with Robbins. However, both industry and environmental groups, including some whose complaints were backed by legislators, seemed to disagree, at least in part.
Both sides are frustrated, for example, over what permit applicants will or won’t have to do to drill within 2,000 feet of a home or school building in a disproportionately impacted community. State law defines DICs as areas that have populations that are poorer, have greater percentages of minority residents, have higher numbers of non-English speakers or have a higher amount of existing pollution, and those areas make up almost half the state.
A June draft of the cumulative-impact rules would have required that operators get informed consent from every resident within 2,000 feet to proceed, but the final draft removed that provision in exchange for other protections offered by the ECMC. Those include more engagement for residents at the pre-application stage, creation of new publicly funded community liaisons, longer public comment periods and requirements for operators to comply with previously optional enhanced system practices.
Those practices include a prohibition on fuel storage tanks on property and a requirement that oil will be piped off site rather than trucked, and a requirement to nix water tanks and to use electric drilling rigs unless operators can prove it’s not practicable. Those mandates, which will take effect in January 2026, will be expensive and potentially prohibitive for smaller oil-and-gas companies to meet and offer little environmental benefit, argued Dan Haley, President/CEO of the Colorado Oil & Gas Association.
Too much cumulative-impacts regulation or too little?
“A blanket approach, without site-specific conditions, could create unintended, detrimental cumulative impacts to communities,” Haley said, echoing the words of testifiers who questioned whether the mandated construction of pipelines through DICs would create added burdens. “These prescriptive regulations and mandates are pushed by a group of extreme environmental activists with the sole intention of banning the oil and natural gas industry here in Colorado, rather than coming to the table to find solutions that will actually benefit the most vulnerable among us and bring down energy costs.”
For many environmental groups, though, the protections offered by the new rules fell far short of the protections they sought over a public-comment period that lasted for a year-and-a-half. Ean Thomas Tafoya, Colorado director for GreenLatinos, acknowledged the two new community liaisons will help residents in DICs to get their voice heard, and he lauded some of the new required practices, though he hopes the state will enforce them strongly.
But his group, which now is in litigation with the state over what it claims are shortfalls in a previously approved rule to help DICs, said none of that will stop DIC residents from having to breath more polluted air if a drill operates within a half mile of their home. It very much wanted to see the requirement for 100% informed consent within 2,000 feet, and it would have liked cumulative-impact analyses to measure such impacts in areas beyond the one-mile radius that the final rule prescribes.
How far out do health effects extend?
“We feel like the commission failed to protect against expanded drilling near homes that are in communities that are disproportionately impacted,” Tafoya said. “At the end of the day, these gases add up.”
The subject of exactly what a safe distance is from a drilling pad was a focus of much of the rulemaking, and it’s a debate that continues after its conclusion. Oil-and-gas companies argued there is no evidence that a 2,000-foot setback is anything but protection against a worst-case scenario because impacts don’t range that far, while environmental groups offered studies of increased disease levels in areas around well pads.
One lingering question remains what impact the new rules will have on the time it takes for permit applicants to receive denials or approvals — a process that can stretch to a year now before the ECMC and even longer with the Colorado Air Quality Control Division. If the impact of ECMC verifying greenhouse-gas and nitrous-oxide emissions-intensity requirements that APCD already is monitoring is to delay approvals further, that would represent yet another regulatory burden from the state.
Impact of cumulative-impacts rules on permit timing?
“Colorado’s oil and natural gas operators have spent the past half-decade in constant rulemakings as state lawmakers have repeatedly moved the goalposts on our regulatory regime,” Kait Schwartz, director of American Petroleum Institute Colorado, said in a statement following the final vote. “As we continue to meet and exceed the state’s ambitious emissions-reduction goals while providing Coloradans with the safe and reliable energy they depend on, we strongly suggest the state adopts a more substantive and efficient approach to policymaking.”
Now it’s up to the ECMC to determine how it will enforce the new rules — specifically, how it will use the results of the operator-produced cumulative-impacts analysis to decide if more community protections are needed to approve permit applications. But it’s clear that after such lengthy discussion and debate, commissioners believe these rules will create a whole new level of protection for the residents around drilling sites.
“To me, the cumulative-impacts analysis is the plan that rules all plans,” ECMC member John Messner said during discussions on Oct. 8. “That shows how the operator is clearly defining and mitigating cumulative impacts.”