In March 2023, Colorado Governor Jared Polis directed the Colorado Oil and Gas Conservation Commission (COGCC) to adopt stringent regulations aimed at sharply cutting emissions of ozone precursors by the state’s oil and gas industry by 2030.
In a letter to the COGCC, the governor signaled a shift towards more comprehensive regulations that prioritize environmental health and underscores the state’s determination to balance energy production with air quality concerns.
In this article, we cover the main elements of the Colorado Governor’s executive order and provide a glimpse into similar initiatives in New Mexico that may be a guide into where Colorado may be headed.
The Ozone Challenge
Ozone, a major component of smog, is a harmful air pollutant that poses significant health risks to humans and the environment. Exposure to high levels of ozone can lead to respiratory issues, exacerbate asthma and contribute to other cardiovascular diseases.
According to the Colorado Department of Public Health and Environment, “Vehicles that run on gas, other equipment that runs on gas, and industry operations are all large sources of ozone precursors in Colorado. Wildfires are also more prevalent during summer, and under certain conditions, wildfire smoke can contribute to the formation of ground-level ozone pollution.”
Colorado, like many regions, has been grappling with ozone levels that exceed federal air quality standards. In June 2022, the Environmental Protection Agency downgraded the air quality in northern Front Range (roughly speaking, from Fort Collins to southern Denver) from a “serious” to “severe” violator of federal ozone standards. In response, Colorado state government officials are seeking ways to reduce ozone precursors from a variety of sources, including automobiles, garden tools and energy production.
Oil and gas production operations are one recognized source of ozone precursor emissions, including volatile organic compounds (VOCs) and nitrogen oxides (NOx). NOx is generated as the result of flaring (combusting) of “waste gas” and tank vapors contaminated with oxygen.
The Directive: A Paradigm Shift
Governor Polis tasked the COGCC to create new regulations that would significantly curtail the emissions of ozone precursors from upstream oil and gas operations. In his letter, the governor directed the COGCC to:
- Develop rules requiring upstream operators in the ozone nonattainment zone to achieve at least a 30% reduction of NOx during the ozone season in 2025 and at least 50% in 2030 from a 2017 baseline.
- Establish rules that solidify environmental best management practices addressing ozone.
- Create an environmental best management practices program to incentivize and reward operators, who at the company or project-level, are demonstrating industry-leading environmental performance in Greenhouse Gas and local air pollution mitigation including exceeding goals.
Industry Response
The industry response to the governor’s initiative was measured and recognized the significant progress oil and gas operators have already made to reduce emissions in Colorado. As reported in the Colorado Sun, the president of the Colorado Oil & Gas Association (COGA), Dan Haley, said:
“The NOx targets as outlined by the governor are very ambitious and will be a challenge to achieve. This industry has proven time and again it is most successful when it leans into technology and innovation and engineers its way toward solutions. The governor’s letter raises questions for us, but we’re committed to being at the table for the rulemaking and finding common sense ways to continue reducing our emissions along the Front Range.”
Dan Haley, President, Colorado Oil and Gas Association (COGA)
Until the rules are made, however, the feasibility and economic impacts of the new regulations cannot be assessed.
Back to The Future – Does Colorado’s Regulatory Path Run Through New Mexico?
Recently developed ozone-related rules in New Mexico may offer some insight into where the Colorado rulemaking process might go. In 2019, New Mexico Governor Michelle Lujan Grisham promised to reduce GHG emissions and focus on ozone. She subsequently directed the New Mexico Energy, Minerals and Natural Resources Department (NMED) to develop new rules for reducing NOx and VOC emissions from oil and gas production operations in counties with high ozone levels. The result was the Ozone Precursor Rule that went into effect in August 2022.
The Ozone Precursor Rule Fact Sheet summarizes the main aims of the new regulation, which complements earlier rules rolled out in 2021 that limit venting and flaring from upstream operations.
Major components of the New Mexico Ozone Precursor Rule include:
- Burner Management Systems (BMS) for all flares and combustors (existing and new equipment) to prevent venting raw methane to the atmosphere from unlit pilot flames.
- BMS units have auto-ignition and monitoring capabilities.
- Permit and encourage use of new technologies for Leak Detection and Repair (LDAR), including satellites, air ships, drones and fence-line monitoring.
- Operators are also required to maintain records and demonstrate continuous compliance.
Note that these are only certain provisions of the rule, not a complete overview of regulatory requirements.
Conclusion
We expect Colorado regulators to look to the New Mexico initiatives as a guide to developing new emissions regulations. Additionally, we anticipate that the venting and flaring of tank vapor gas, both sources of VOC and NOx emissions, will come under greater scrutiny in Colorado.
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We will be watching the rulemaking process and look forward to reporting back as new information becomes available.
About EcoVapor
EcoVapor, a DNOW company, provides gas treating solutions to both geologic and biogas production problems. Our fleet of proprietary ZerO2 oxygen removal (deoxo) units has grown to a fleet of nearly 300 since 2010, operating reliably for leading producers in all major U.S. basins. ZerO2 technology helps Oil & Gas and biogas producers convert waste gas streams into revenue by treating gas to meet pipeline specifications so it can be sold instead of vented or flared, generating incremental value while reducing emissions and improving environmental performance.
EcoVapor is headquartered in Denver, Colorado and has field locations in Greeley, Colorado and Midland, Texas.
Contact
EcoVapor Recovery Systems (a DNOW Company)
Email: ecovapor.info@dnow.com
Phone: 844-NOFLARE (844-663-5273)
Sales: Joe Hedges (281-615-2072)