Colorado oil and gas producers along much of the Front Range must cut nitrogen oxides 30% by 2025 and 50% by 2030 under a new directive from Gov. Jared Polis — changes that industry leaders described Thursday as achievable but requiring new investment levels and technology.
The requirements — which came via a letter the Democratic governor sent to the Colorado Oil and Gas Conservation Commission and the Colorado Department of Public Health and Environment directing new rulemakings — are the latest regulations on the industry from Polis. They come as resource producers already are taking voluntary measures to cut emissions but also as legislators and regulators seek even further pollution reductions following Colorado’s designation in 2022 as a “severe” violator of federal ozone regulations.
Nitrous oxides, when breathed in high concentrations, are linked to increased problems with asthma and increased susceptibility to respiratory infections. They are produced by operations of diesel engines, which are used in oil and gas production for field compression required to pump gas to the surface and for frac fleets needed to perform hydraulic fracturing services.
Oil and gas companies have been working to reduce these air pollutants since 2017, which was the modeling year for the State Implementation Plan to address ozone nonattainment levels, and the reduction levels in Polis’ order are based on a 2017 baseline. But to achieve the further reductions specified in the directive, they will have to move more field-compression equipment and frac fleets from being diesel-powered to being powered by electricity or natural gas, and the migration may depend on whether equipment suppliers can provide alternatively fueled options quickly enough.
Polis, in his letter to the state agencies, painted the move, which is applicable to operators in the ozone nonattainment area, as a necessity next step to clean up the Front Range’s air after a bevy of recent boosts in oil and gas regulation stemming from a 2019 law. He called it the most significant standard in state history for reduction of this pollutant and said it also will be the first comprehensive nitrogen-oxides reduction program for the oil and gas industry in the U.S.
“Despite passing meaningful and effective legislation to reduce emissions from oil and gas operations, the sector still has a significant impact on our state’s air quality and greenhouse gas emissions,” he wrote. “Put simply, just as we need to do more in transportation and other sectors, we need to do more to reduce emissions from oil and gas operations in Colorado.”
But several oil-and-gas industry leaders questioned Thursday why their industry is being targeted again, even as it’s cut emissions in half since 2013 through a variety of measures.
Dan Haley, president and CEO of the Colorado Oil & Gas Association, noted that his industry already faces as many as eight more rulemakings this year to bolster regulations and reduce emissions, and he said state rules now are “the most rigorous in the country.” Operators currently are self-limiting truck traffic and are looking to decommission older technologies that producer greater emissions, but they need help from the state, particularly in speeding the consideration of permits necessary to do business, he said.
Lynn Granger, Midwest/Mountain West director for the American Petroleum Institute, said that while the industry will work to comply with the “aggressive and highly ambitious” directives, it’s been frustrated by the process that led to Thursday’s announcement. With producers already on track to meet the 2025 emissions-reduction goals set forth in the state’s Greenhouse Gas Pollution Reduction Roadmap, she hopes officials now can stop layering on new requirements.
“We are hopeful that the governor’s actions today will set the state on a path toward the regulatory certainty our industry has sought since 2019 and stand ever ready to lead and not follow in achieving our shared goals,” Granger said in a news release.
In the letter, Polis directed the state agencies to develop rules by the end of 2024 that set out how oil and gas operators will achieve the reductions in nitrogen oxides, requiring the emissions reductions to be verifiable and reportable to the public. He also directed the COGCC to develop an environmental best-management-practices program that incentivizes and rewards operators that exceed goals in mitigating greenhouse gases and local air pollution.
Operators will watch closely to see the details of the new program, paying special attention to whether the state will require the targets to be met individually by each company in the field and, if so, how the state determines their 2017 baseline of nitrogen oxide emissions. They also will seek to talk more about the 50% reduction goal for 2030, which some have said may be possible only if new technology is brought onto the market to replace older equipment.