Colorado took a major step forward in the regulation of oil and gas operations with the approval of new standards, negotiated and agreed upon by both energy companies and environmental groups. This is a monumental step forward in safe and effective regulation of fracking activities that relied on the input of both sides and should be a model for other states to follow.
Anadarko Petroleum, Noble Energy and Encana Corporation, which collectively run more than 80 percent of the oil and gas operations in the Denver-Julesburg basin where much of the state’s fracking takes place, worked with the Environmental Defense Fund to craft regulations approved by the Colorado Air Quality Control Commission. The Commission then approved these regulations by a vote of 8-1 after five days of hearings.
This step is huge for a number of reasons, beginning with the fact that it put two normally warring sides in the same room at a negotiating table. Governor Hickenlooper had asked major oil and gas producers, and environmental groups to reconcile differences and come up with a regulatory strategy for moving forward and ended up hitting a gold mine.
“This is a model for the country,” said Dan Grossman, the defense fund’s Rocky Mountain regional director in a Bloomberg article. “We’ve got this simmering battle between the oil and gas industry, and neighborhoods throughout the state that are being faced with development. That degree of acrimony is pushing the industry and policy makers to look for ways to get some wins.”
Curtis Rueter, a Denver-based development manager at Noble Energy, gave his opinion in a telephone interview quoted in the same Bloomberg article. “This is the right thing to do for our business,” said Rueter. “We want to find the leaks and fix them because that will reduce our emissions and the rules provide guidance and technology for us to do that.”
Another major step forward is that methane is included among the regulated gases. Methane is a greenhouse gas 20 times more potent at trapping heat than carbon dioxide. It is also largely an unknown in terms of climate change from fracking operations, as a wide array of studies have shown that differing amounts escape from well operations.
The new regulations require companies to install equipment to minimize leakage from tanks, control or capture 95 percent of all emissions and inspect well sites for leaks every month. Over the period of one year, the regulations will also remove enough damaging volatile organic compounds from the air to equal the number emitted by all cars and trucks in the state for a year.
Not everyone was all smiles, however. Members of the Colorado Oil and Gas Association and Colorado Petroleum Association said the costs to comply with the rules would be more than double what the state is projecting. The associations opposed parts of the emissions mandates, saying the rules weren’t factually supported and were only negotiated by a selected group of companies.
Given that Colorado is the sixth largest producer of natural gas and ninth largest producer of oil in the U.S., these regulations are a major step forward toward what one might call “responsible fracking,” wherecompanies are held more accountable for their actions and actually agree to negotiate with environmental groups over issues.
The oil and natural gas boom nationwide is not going anywhere soon, given the great economic benefits that are to be had in a still down economy. These new regulations in Colorado are a model for other states to follow as they draw up their own rules for fracking operations. They represent what could be the start of a new era in transparency and responsibility in fracking.
