As Colorado regulators prepare for another round of rulemaking to limit greenhouse gas emissions from the oil and gas sector, they have revealed that the industry — as well as manufacturing — is exceeding emissions-cut goals substantially.
The Colorado Department of Public Health and Environment announced last month that revisions to its greenhouse gas inventory show that the two sectors are cutting pollution more significantly than previously had been recorded. Overall, new regulations and changes in industry practices has left Colorado just short of its goals to reduce emissions 26% from a 2005 baseline by 2025 and 50% by 2030, said Matthew Twyman, supervisor for the GHG inventory and reporting unit in CDPHE’s climate change reporting program.
Members of two key appointed bodies — the Colorado Air Quality Control Commission and the Colorado Energy and Carbon Management Commission — received GHG inventory updates in the past two weeks and expressed pleasure at the news. AQCC commissioners, however, questioned whether the state would still need to do more to stay on schedule as President-elect Donald Trump ponders potential rollbacks of some federal regulations, particularly regarding low- and zero-emissions vehicles.
Why two sectors are beating emissions goals so much
Still, Twyman said that the update to the emissions inventory shows success among the identified sectors in exceeding emissions-reduction targets that were groundbreaking when approved by legislators over the past half-decade. Oil and gas is projected to exceed their reduction target by 25% next year — meaning it will remove 2.5 million more metric tons of carbon dioxide equivalent than was required — and industrial manufacturing by 44% or 5.5 million tons by its first target in 2030.
A Colorado Department of Public Health and Environment graphic shows emissions reductions in the industrial and manufacturing sector.
“We see the goal being surpassed by a larger margin now,” Twyman told ECMC members during a meeting on Monday.
Oil/gas and manufacturing, two of the largest contributors to greenhouse-gas emissions in Colorado, have been the target of numerous rulemakings over the past several years. The AQCC and ECMC have set new limits on emissions intensity for both sectors, established new rules to limit cumulative impacts of the industries’ emissions in disproportionately impacted communities and set limits on nitrous oxide emitted in drilling.
This week, the ECMC began hearings on how to regulate carbon capture and sequestration, a process by which drills push carbon into underground storage areas, which Colorado Energy Office leaders say is necessary to meet longer-term emissions-reduction goals. And later this month, the AQCC will set new emissions limits on the midstream sector of oil and gas, comprised of the pipelines and facilities that transport and compress natural gas.
Explanation of changes to historical emissions estimates
Legislators mandated overall emissions reductions against the 2005 baseline that will step up over the years — 65% by 2030, 75% by 2040, 90% by 2045 and net-zero by 2050 — as well as specific reductions for certain industries. Those included 36% cuts in the oil and gas industry by 2025 and 60% by 2030, 20% in the industrial and manufacturing sector by 2030 and 80% for electric utilities by 2030.
Officials went to update the greenhouse-gas inventory in February and, in doing so, found that several calculations made on historical emissions levels before the current team came on board were wrong, Twyman explained. Those included historical underestimations of upstream (drilling site) and midstream emissions leakage from equipment and an underestimation of emissions produced by venting and flaring.
Those changes produced a 30% across-the-board increase in historical emissions — the equivalent of more than 6 million metric tons of carbon-dioxide equivalent per year — that means the emission cuts from key industries have been greater than originally estimated. And that means the state is even closer to meeting its goals, Twyman explained.
Overall emissions levels still too high for regulators
A Colorado Department of Public Health and Environment graphic shows reductions in the oil and gas sector.
Oil and gas now is on pace to reduce emissions 45% by 2025 and 67% by 2030, exceeding both its goals, Twyman told the two commissions. And the industrial and manufacturing sector is on pace for 49% emissions reductions by 2030 — exceeding its goal by nearly 2.5 times the needed percentage.
“Because of the efforts that commenced in 2020, we see enormous ambition achieved on Colorado’s behalf,” Twyman said, referencing the first year that proposed rule changes began to be discussed.
Still, the efforts of the two industries, which have reminded state officials repeatedly of how hard they are working to cut emissions, aren’t quite enough to get Colorado on pace to meet its overall emissions-cut goals. The state is on pace to reduce emissions 24.4% by 2025 and 48.6% by 2030 — less than two percentage points short in both cases.
For that final push, it appears likely that regulators will seek more rules for new sectors.
Transportation, agriculture may be targeted
A resolution passed by the AQCC on Nov. 20 called on CDPHE to offer new strategies to reduce vehicle emissions, including potential regulations around clean fuel and limits on emissions from indirect sources where vehicles gather, like warehouses or malls. The Transportation Legislative Review Committee discussed the same concepts this summer, and while the TLRC didn’t recommend a bill on the matter, it’s likely that one of its members will bring legislation to try to accomplish those aims.
The AQCC resolution also asked staffers to propose strategies on reducing landfill methane emissions and agriculture-sector emissions. And it requests the department to update the social cost of carbon that is used in setting sector-specific emissions limits, improve emissions-verification methods and look at more ways to consider the cumulative impacts of emissions beyond rules passed recently by the ECMC.
Commissioner Elise Jones said she is worried that the incoming federal administration could take steps like repealing rules on zero-emission vehicles that could set back Colorado efforts and require it to find more ways to cut other emissions. Colorado Automobile Dealers Association statistics show that 22.1% of new cars purchased in Colorado in the most recent quarter were electric or plug-in hybrid, indicating that Gov. Jared Polis’ push to electrify transportation as an emissions-reduction strategy is bearing fruit.
“It’s vital as we try to meet our state targets to know what’s likely shifting beneath us,” Jones said.