After four weeks of testimony and debate, Colorado regulators seem to have aligned on new cumulative-impacts rules that will require more protections from oil and gas firms wanting to drill in already impacted areas but will not shut off future projects altogether.
The Colorado Energy and Carbon Management Commission broke Thursday afternoon until Oct. 8 but not before coming to a consensus around how oil-and-gas operators must account for their emissions as part of the cumulative impacts of all industry in an area. Environmental advocates have sought such added considerations for five years to better protect poorer communities that already have higher levels of pollution and industrial activity, and the rules the ECMC is developing are expected to go into effect on Jan. 1.
Commissioners seem inclined to reject the most sweeping changes requested by green-minded groups to try to limit projects within what the state defines as disproportionately impacted communities.
They seemed to reject the idea, for example, of requiring informed consent by every resident and school within 2,000 feet of a proposed project for that project to move forward, saying such a plan would amount to giving every resident a veto. And, on advice of the Colorado Attorney General’s office, they seem to have decided against requiring that any project in an already impacted area would have to show no net negative impact on emissions for a radius of one mile or more, deeming that out of their power.
Permitting getting tougher in some ways
Colorado Energy and Carbon Management Commission Chairman Jeff Robbins addresses a virtual ECMC meeting.
However, ECMC Chairman Jeff Robbins this week offered a compromise plan in which firms can only drill within 2,000 feet of a residence or school in DICs if they demonstrate that they undertook a good-faith effort to try to get unanimous informed consent. Operators also would have to show that proposed locations avoid, minimize and mitigate negative effects on communities and that they will use best practices like electrification of production equipment unless they receive an exemption because it’s impracticable.
Meanwhile, the cumulative impacts analyses operators must submit — explaining projects’ impacts on air, water, climate, noise, odor, wildlife and biological resources — must explain how they will stay within their individual nitrous-oxide and greenhouse-gas intensity limits. If the ECMC deems the projects to lack safeguards for reaching that goal, commissioners can add additional conditions for approval or, if companies refuse that, can reject the permit application altogether.
Industry and environmental leaders are both likely to see the proposal, which is set for a final vote on Oct. 8 or Oct. 15, as a mixed bag. The new conditions for approval will require companies to invest more in reducing potential emissions and make it harder for some projects to get permits. But with nearly half the state classified as being in a DIC and some firms telling the ECMC that the majority of their projects are likely to be in such communities, they also don’t shut down new or expanded operations in most of Colorado.
Industry defends its impact on ozone pollution
Underlying the debate was a recurring disagreement on how much the oil and gas industry is responsible for air-quality issues that have left the northern Front Range in severe nonattainment of U.S. Environmental Protection Agency ozone standards. And while environmental groups argued that the ECMC needs to take bolder steps to cut down on the emissions stemming from oil and gas production, industry leaders asked commissioners to balance protections with the impact they could have on the economy.
Attorney Chris Colclasure addresses a virtual Colorado Energy and Carbon Management Commission meeting
“When you make rules on industry, I really want you to ask, ‘How big a difference will it make?’” said Chris Colclasure, a shareholder with Beatty & Wozniak representing American Petroleum Institute Colorado. “Adopt reasonable rules. But we would ask you not go beyond the staff’s proposal, because the benefits do not justify the costs.”
Aside from Robbins’ compromise plan on the requirements to drill within DICs, the final plan looks like it will adhere closely to the staff’s August proposal, which was largely lauded by industry leaders and criticized by environmental groups. A major sticking point was removal from an earlier proposal of the requirement to get unanimous informed consent within 2,000 feet of homes.
“Regulatory certainty” a key factor in cumulative-impacts rules
Another sticking point for those groups was ECMC staff’s decision to limit the impact area over which permit applicants must conduct their cumulative impact analyses to one mile from the site of the well pads, which groups argued should extend to two miles or further. Commissioners reached consensus on leaving that area of evaluation at one mile except as it pertains to bodies of water, for which applicants must measure project impacts out to 2.5 miles and to five miles upstream from a public water system’s surface intake.
Applicants can elect to measure impacts over a larger area upon urging from ECMC staffers — or potentially over a smaller distance in some mountainous regions outside the ozone nonattainment area. But commissioners said they wanted to keep the area of enforcement at a standard distance in order to give certainty to permit applicants.
“I think it’s important to have regulatory certainty for the public,” commissioner Mike Cross said. “I like the one mile because it provides that regulatory certainty.”
Colorado Energy and Carbon Management Commission member Mike Cross addresses a virtual ECMC meeting.
Commissioners also agreed to expand the area to which many notices must be sent to the public regarding community meetings, development-plan details and other notices meant to involve the public more in the planning and consideration of such projects. After discussion, the minimum areas for most notices now are a half mile — an expansion of the proposed 2,000-foot radius that was requested as a compromise by API and the Colorado Oil & Gas Association — while some minimum areas extend to 4,000 feet or one mile.
Environmental groups sought more on cumulative impacts
A coalition of environmental groups rejected that proposed compromise when it was offered to them, saying that the expansion of notice area from 2,000 feet to 2,640 feet was not a serious concession. But ECMC commissioners appeared inclined to accept it still.
Those groups, including Earthjustice and GreenLatinos, persuaded commissioners to solidify the role of two new community liaisons in being able to lead community outreach and advise on nonlegal matters. But they didn’t gain traction in other areas, leading to expressions of frustration.
“Putting distance between homes and drilling reduces the health risk,” said Mike Freeman, a senior attorney with the Rocky Mountain office of Earthjustice, as he and many others noted that 2024 has seen an unusually large number of high-ozone days. “The scientific evidence continues to support this commission’s evidence to adopt a presumptive 2,000-foot setback.”
That said, Robbins’ compromise plan on projects within DICs will be challenging for many operators, particularly those that may be smaller and have fewer financial resources.
No rubber stamp in DICs
Assistant Attorney General Kyle Davenport (top middle) addresses a virtual meeting of the Colorado Energy and Carbon Management Commission on Thursday.
Allowances to build within 2,000 feet of homes or schools now will be considered along with factors such as whether operators have signed voluntary community benefit agreements to boost the surrounding communities with funding or infrastructure. And pricier practices like not using hydrocarbon storage tanks on the property and employing hydrocarbon pipeline takeaways now become mandates rather than suggestions.
Operators will have to submit the cumulative impact analyses when they submit community action plans with site analyses — an early step in the development process that will bring government and community groups into the discussion quickly. And they must analyze the cumulative impacts not just of present development but of any foreseeable future development for which other firms already have applied for permits.
ECMC members now have nearly two weeks to consider whether this proposal will provide the protections that legislators sought when they required in several laws since 2019 that commission consider such cumulative impacts. And oil-and-gas operators likely have just three months to begin preparing these analyses and looking for further ways to reduce emissions when they seek permits to operate or expand, particularly within DICs throughout Colorado.