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Collaborative Action Results in Adoption of Strict New Colorado Air Quality Rules; Local Groups Want More Restrictions on Oil and Gas Activities




by:
Kutak Rock LLP - Omaha Office

 
May 2, 2014

Previously published on April 28, 2014

On February 23, 2014, the Colorado Air Quality Control Commission adopted new point source emissions rules seeking to reduce the release of volatile organic compounds (VOCs) and methane from oil and gas operations. The new rules are among the strictest in the country and are the very first to regulate methane emissions. The rules are the result of a collaborative effort among a working group of state government agencies, environmental advocacy groups and oil and gas companies.

The new rules, which become effective upon adoption by the Colorado Secretary of State, will cover the entire state and the entire oil and gas production process, including well sites, storage tanks, gathering lines, compression stations and processing plants. The rules require regular routine inspections and monitoring for leaks and malfunctioning equipment, and prompt repairs and fines for noncompliance. It is anticipated that the new rules will cut 93,500 tons per day of VOC emissions and 65,000 tons per year of methane leaks, with the annual cost of compliance for the oil and gas industry estimated to be $42.5 million. The new Colorado rules are more restrictive than final federal rules adopted by the EPA in 2012, which are the subject of continued litigation.

While the new emissions rules represent a bold move forward, some groups are seeking further new restrictions on oil and gas development in the state. Currently, oil and gas development is regulated at the state level by several agencies, including the Colorado Oil and Gas Conservation Commission (COGCC), but allows for cities and counties to appoint a “local government designee” to work with the COGCC on local oil and gas impacts. However, several cities and towns have adopted local restrictions and bans on hydraulic fracturing. These initiatives were adopted by public vote but have been challenged in court by industry groups and the COGCC. The proponents of these local restrictions have recently initiated efforts for a statewide vote to amend the Colorado Constitution to provide local control over oil and gas operations. The proposed measure would provide that, “notwithstanding any other provision of law, local governments in Colorado may place restrictions on the time, place or method of oil-and-gas development, including but not limited to the use of hydraulic fracturing, that are intended to protect their communities and citizens.” The measure also would prohibit any local government from adopting regulations less strict than state rules.

Local activists want local control because, “[the state] has failed to keep us safe from fracking. For this reason, the ballot measure is necessary to ensure that we have the right to determine whether fracking is allowed next to our homes and schools.” Local officials seek “assurance that the state will recognize and support our rights and responsibilities to make land use decisions, including controlling oil and gas development.” The oil and gas industry opposes local regulation because, “It’s just not possible or practical for hundreds of local governments to enact differing standards for the protection of natural resources, such as clear air and clean water, which are of statewide significance ... The key to effective regulations and enforcement is to provide statewide predictability and consistency.”



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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