The release Monday of proposed air quality rules for Colorado’s oil and gas companies has insiders talking about industry inspection — from new technology such as infrared cameras that detect equipment malfunctions to shoe-leather inspections that listen, look and smell for leaks.
If the draft rules are adopted early next year by the Air Quality Control Commission appointment by Gov. John Hickenlooper, inspections on wells and storage tanks would skyrocket. That’s a big if, though. Before the regulations could be implemented, they’ll be run through a 90-day gauntlet that will include feedback from environmentalists who see them as too weak and industry executives who think they’ll cost too much.
Between the two factions are the proxies for both sides who spent months of negotiation and compromise to craft the proposed rules.
“I think it’s clear there will be segments of industry and segments of the environmental community that will throw stones at the proposal for being either too onerous or not strong enough,” said Dan Grossman, regional director of the Environmental Defense Fund who was chosen to negotiate for conservationists. “But I’m confident the critical mass in the center will be able to hold sway and keep the rules strong.”
Noble Energy’s Ted Brown, who negotiated on behalf of industry, said in the hours after the draft’s release that he hasn’t heard much blowback on his side, but expects any pushback will pivot on the cost of high-tech regulations.
If the more thorough and frequent inspection rules are implemented and enforced, they would require industry to document and repair any detected leaks. The process, known as Leak Detection and Repair (LDR), has been used effectively in portions of Wyoming and California. Colorado would be the first state to implement this scope of regulation statewide and also the first to target methane emissions in its rules.
“This is an instance of Colorado taking a leadership role in addressing emissions from oil and gas operations,” said Chris Arend of Conservation Colorado, responding to the draft rules. “The methane piece is extremely exciting for us. Methane is something like 80 times more potent a greenhouse gas over a 20 year period than carbon dioxide.”
Methane, not recognized as an ozone precursor, is usually the forgotten stepchild of fugitive emissions. Most of the focus in the past has landed on the volatile organic compounds that readily convert into the low-level ozone, which has well-documented negative impacts on the health of humans and plants.
“We need to understand that this is something we’ve never done before at this scale,” Brown said. “As we get into it, we’ll be able to identify better what the costs will be. But there’s no doubt they’ll be significant. CDPHE (the Colorado Department of Public Health and Environment) had it on the order of $30 million…”
That’s $30 million well spent, in the minds of environmentalists and residents throughout the state concerned about the health impacts of nearby oil and gas development. Watchdogs welcome the prospect of oil and gas inspectors listening for the hiss of escaping methane and the plink of leaking liquids, running their hands along the dirt, feeling for wet spots in gas patches and using soapy water to watch for bubbles formed by fugitive emissions. Inspectors would augment these hand-on methods with high-tech, infrared cameras and hand-held devices known as “sniffers.”
As proposed, the rules would require monthly inspections of well sites and storage tanks with fugitive emissions rates measured at more than 50 tons a year. Smaller, mid-range emitters (13 to 50 tons a year) would require quarterly inspections. Those below that would be inspected annually.
Across the board, those rules would shatter the status quo in a state with rampant increases in energy development that doesn’t currently require any such inspections at all, but rather relies on the good faith of companies to voluntarily inspect their own storage tanks and well sites.
“I can tell you that we’re really happy the LDR was included and with that, better and more frequent inspections,” said Jamie Travis, a leader of the group Colorado Moms Know Best, which is pressuring the state to call for tighter rules.
Mike Freeman, a lawyer with Earthjustice, a formal legal party to the rulemaking, agreed that there’s a lot to like in the new draft rules, which he called a major improvement to previous drafts. Still, Freeman said an initial look at the proposed rules indicates some language may need to be tightened to ensure enforceability.
“For example, the leak detection section says if you find a leak you have to repair it unless you have ‘good cause’ to not, but doesn’t explain what ‘good cause’ means,” he said. “The question is: Does this open the door for operators to just decide there isn’t good cause to do a repair and thereby inoculate themselves from any enforcement? We’re hoping that commission consideration in February will tighten that loophole up.”
Negotiations over such fine points will continue over the 90-day public reading period, with the first public hearing scheduled for the commission’s regularly monthly meeting this Thursday. There will be several more formal hearings through February, after which the nine commissioners will vote on whether to adopt or tweak the new rules.
Their final vote will fall about a year after Brown and his boss, Noble CEO Charles Davidson, stood in Hickenlooper’s office talking about how to get these rules made. It was in that meeting, Brown said, that they came up with the idea of sitting down with a single, powerful NGO — the Environmental Defense Fund — and negotiating.
Brown described those talks with Grossman and his staff as rocky, as the two sides struggled to find common ground. Each side suggested science- and technology-based approaches until they had something they could both stand behind. Then they brought in other major industry voices in the state — Anadarko and Encana.
“I want to make sure everyone understands this wasn’t something that was cooked up over a weekend,” said Brown.
“It took lots of late nights, lots of weekends, and lots of interrupted Broncos games,” Grossman added.
Though both expect criticism, they’re proud of having compromised to reach the draft rules.
“Look at what we’ve delivered. It’s a much different environment to have a collaborative process than to just call for a ban on something. When you call for a ban, all conversation stops, all innovation stops…,” Brown said.
From the environmental side of the table, Grossman largely agreed.
“It’s a huge win. In the end, it took a month of negotiations with three operators, who came to the table after months of getting no traction with anyone in the industry,” he said. “We sat down with Nobel, Anadarko and Encana and came up with a comprehensive proposal that amounts to the strongest regulations in the country.”
The Defense Fund and three of Colorado’s largest oil and gas companies aren’t the only ones taking a shine for the newly proposed rules. Hickenlooper — who, faces re-election next year and has been heavily criticized for waffling on oil-and-gas regulation — hopes the draft regulations pass in a way that convinces both environmental-minded and business-minded Coloradans that he has managed to keep his word.
“Hickenlooper should absolutely get credit for this. For a while now he’s talked about having zero tolerance for emissions,” said Arend. “He brought some pretty powerful folks together, those are the industry leaders in our state… Now we just need to see the same enthusiasm and involvement towards getting these rules finalized.”
[Photo by Tim Hurst]