Colorado Air Regulators Mull Increased Drilling Oversight

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  • 7/11/2013 |
  • 10:00 am
Colorado Air Regulators Mull Increased Drilling Oversight
published by NGI's Shale Daily: July 10, 2013

Colorado drillers may face more scrutiny about emissions from their oil and natural operations under regulations being pondered by the state's Department of Public Health and Environment (CDPHE).

The Colorado Oil & Gas Conservation Commission has primary oversight of exploration and production and the state's growing 500,000-plus wells. The CDPHE oversees the state's air quality, and air pollution emissions from drilling operations are the No. 1 source of volatile organic compounds and the third-largest source of nitrogen oxides, officials said.

Several proposals are on the table to revamp CDPHE's regulations, all part of a 2013 rulemaking effort by the department's Air Quality Control Commission (AQCC). Among other things, regulators want to adopt in full the U.S. Environmental Protection Agency's (EPA) New Source Performance Standards (NSPS) within the Clean Air Act.

EPA last year gave industry until 2015 to eliminate harmful emissions from drilling sites (see Shale Daily, April 19, 2012). The state may adopt rules, but they would have to be at least as stringent as EPA's. The AQCC also is reviewing "overlaps and gaps" in state/federal oversight. The nine-member AQCC last year postponed fully adopting the EPA standards.

"As we move toward adopting EPA's rules, we are also looking at cost-effective enhancements to the state's existing air quality regulations," CDPHE Air Pollution Control Division director Will Allison said.

The nine-member AQCC has several goals in mind that it hopes to achieve through the expansive rulemaking effort:

Identify and implement strategies to improve the program's effectiveness and efficiency;

Find ways to reduce permitting burdens on both the division and the regulated community "without impacting environmental benefits" from the permit program;

Address oil and gas development growth by adopting "reasonable" emission reduction strategies; and

Lay the groundwork for ongoing efforts to reduce oil and gas emissions "while minimizing burdens that don't provide environmental value."

In line with those goals, proposed regulations are being considered to increase and streamline permit threshold criteria pollutants, and to remove catchall provisions that require permits for all sources subject to NSPS or maximum available control technologies.

New rules being considered include rules governing ozone and ozone precursors for tanks that would include more covered tanks (condensate, produced water, crude oil, etc.) and rules covering emission capture and routing to control devices or sales lines. Rules also are proposed to address:

Fugitive emissions and leaks by increasing their identification and requiring leaks be repaired;

Wellhead venting and flaring; and

Timely tie-ins of wells to natural gas sales lines to reduce venting or flaring.

Doug Flanders, policy director for the industry-led Colorado Oil and Gas Association (COGA), said the industry has pledged a commitment "to the continual pursuit of emissions reductions," and COGA "will continue to partner with our communities and state regulators" to achieve it.

A meeting to present the AQCC proposals is set for Aug. 7, with a request for a hearing scheduled for Aug. 15
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